/raid1/www/Hosts/bankrupt/TCR_Public/230727.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Thursday, July 27, 2023, Vol. 27, No. 207
Headlines
117 SPENCER: Seeks Cash Collateral Access Thru Sept 30
34 SUMNER: Court OKs Cash Collateral Access Thru Aug 10
371 CALABASAS: Taps Binder & Malter as Bankruptcy Counsel
502 E JED REALTY: Lender Seeks to Prohibit Cash Collateral Access
AGEX THERAPEUTICS: Agrees to Swap $36M Debt for Preferred Stock
AGOGIE INC: Seeks Continued Use of Cash Collateral
ARSENAL AIC: Fitch Gives BB+(EXP) Rating to New $900MM Sec. Notes
BIOSTAGE INC: All Proposals Passed at Annual Meeting
BISHOP OF OAKLAND: Committee Taps Keller as Local Counsel
BROOKFIELD PROPERTIES: Moody's Alters Outlook on 'Ba3' CFR to Neg.
BURGER BUILDING: Taps Marcus & Millichap as Real Estate Broker
CAMBER ENERGY: Gets Shareholder Approval of Proposed Viking Merger
CARVANA CO: Reaches Restructuring Deal With Apollo, Bondholders
CBS TRUCKING: Taps Charles A. Higgs as Special Litigation Counsel
CENTRALIA APARTMENTS: Has Deal on Cash Collateral Access
CHALLENGER BRASS: Bid to Use Cash Collateral Denied
CHARISMA MARBLE: Taps Joel M. Aresty as Legal Counsel
CHECKERS HOLDINGS: Moody's Assigns 'Caa2' CFR, Outlook Stable
CLEAN ENERGY: Issues $556K Promissory Note to Mast Hill
COMPLETION RESOURCES: Case Summary & Five Unsecured Creditors
COMUNICADORES GRAFICOS: Lender Seeks to Prohibit Cash Access
CONSUMER ACTION: Court OKs Deal on Cash Collateral Access
DIAMOND SPORTS: Bally Sports Okayed to Drop Diamondbacks TV Deal
DTC CABOOSE: Seeks Court Approval to Hire Geva Accounting
ERBO PROPERTIES: Taps Avinoam Y. Rosenfeld as Special Counsel
ERBO PROPERTIES: Taps Law Office of Isaac Nutovic as Counsel
EVOKE PHARMA: Granted Until Nov. 20 to Regain Nasdaq Compliance
FUSION GALAXY: Case Summary & 12 Unsecured Creditors
GENERATION BRIDGE: Moody's Rates New $950MM Secured Loans 'Ba2'
GENERATION BRIDGE: S&P Assigns Prelim 'BB' Rating on Term Loan B
GOLDEN STATE: Moody's Lowers CFR to B3 & Sr. Secured Loans to B2
GOODLIFE PHYSICAL: Court OKs Deal on Cash Collateral Access
H & H INVESTMENT: Gets Approval to Employ Enrolled Agent
HEART HEATING: Has Deal on Cash Collateral Access
INMET MINING: Gets OK to Hire Stretto as Administrative Advisor
INSTANT BRANDS: Gets Court Approval for Sept. 13 Auction for Assets
INSTANT BRANDS: Gets OK to Hire Guggenheim as Investment Banker
INSTANT BRANDS: Taps AlixPartners as Restructuring Advisor
INVENERGY THERMAL: Moody's Rates New Senior Secured Loans 'Ba2'
IRVIN AUTOMOTIVE: Voluntary Chapter 11 Case Summary
ITTELLA INTERNATIONAL: Taps Levene Neale Bender Yoo as Counsel
J&J VENTURES: Moody's Rates New $375MM Incremental Term Loan 'B2'
J&J VENTURES: S&P Alters Outlook to Positive, Affirms 'B' ICR
JAFFAN INTERNATIONAL: Taps Joel M. Aresty as Substitute Counsel
JONES DESLAURIERS: Fitch Rates New $350MM 1st Lien Term Loan 'B+'
K & H AUTOMOTIVE: Taps Going Sebastian Fisher as Accountant
KDC/ONE DEVELOPMENT: Moody's Rates New $500MM Secured Notes 'B3'
LAKE DISTRICT: Seeks to Hire The Shopping Center Group as Broker
LEONA TRANSPORTATION: Taps Wisdom Professional as Accountant
LTL MANAGEMENT: Disclosure Statement Hearing Set for August 22
LTL MANAGEMENT: J&J Ordered to Pay $18.8M at Cal. Talc-Cancer Trial
MOUNTAIN EXPRESS: Deadline to File Claims Set for August 28
OILFIELD EQUIPMENT: Case Summary & 11 Unsecured Creditors
PACIFICA CMFM: Wins Cash Collateral Access
PAO BAY INVESTMENT: Case Summary & Eight Unsecured Creditors
PARK SLOPE: Case Summary & One Unsecured Creditor
PERATIV GENERAL: Gets Initial Stay Order Under CCAA
RELIABLE CASTINGS: Case Summary & 20 Largest Unsecured Creditors
RIVERSIDE MILK: Case Summary & 20 Largest Unsecured Creditors
SATURNO DESIGN: Seeks to Hire Foster Garvey as Legal Counsel
SIO2 MEDICAL: $350 Million Debt Swap Chapter 11 Plan Approved
SMITHFIELD FOODS: Moody's Alters Outlook on 'Ba1' CFR to Stable
STARWOOD CAPITAL: Defaults on $212.5M Mortgage on Tower Place 100
STAT EMERGENCY: Court OKs Interim Cash Collateral Access
STAT EMERGENCY: Taps Schafer and Weiner as Legal Counsel
SUPPLY CHAIN: Gets OK to Tap Bowen Law Group as Corporate Counsel
SURGE TRANSPORTATION: Case Summary & 20 Top Unsecured Creditors
TABULA RASA: Seeks to Hire Bradford Law Offices as Counsel
TECH-MAR ENTERPRISES: Taps The Lane Law Firm as Bankruptcy Counsel
TK CLEANING: Seeks to Hire David Hodson as Real Estate Broker
TOCCOA OUTPOST: Seeks to Hire Tarpy Cox Fleishman as Counsel
TOLIAO IOROI: Case Summary & 20 Largest Unsecured Creditors
TRUCK DEPOT LLC: Taps Troutman Law Firm as Bankruptcy Counsel
TUPPERWARE BRANDS: Expects to Breach Covenants for 2023 1st Half
VAUGHN ENVIRONMENTAL: May Use $60,629 of Cash Collateral
VERITEXT: Moody's Raises CFR to 'B2', Outlook Stable
VINCENT POND: Seeks to Hire Levitt & Slafkes as Bankruptcy Counsel
VOIP-PAL.COM INC: Issues Warrants to CEO to Purchase 831.5M Shares
VOIP-PAL.COM INC: Jin Kuang Replaces Kevin Williams as CFO
VT TOPCO: S&P Affirms 'B' Issuer Credit Rating, Outlook Stable
WCS PROPERTY: Seeks to Hire Buddy D. Ford as Bankruptcy Counsel
WEXFORD LABS: Wins Cash Collateral Access on Final Basis
WHITTAKER CLARK: FCR Taps Willkie Farr & Gallagher as Legal Counsel
YARDBOYS AND YARDGIRLS: Taps Bradford Law Offices as Counsel
[*] Buffett Unit’s Wildfire Liability Risk Stokes Industry Fears
[*] Distressed Investing Conference 2023: EARLY BIRD SAVINGS!
[^] Recent Small-Dollar & Individual Chapter 11 Filings
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117 SPENCER: Seeks Cash Collateral Access Thru Sept 30
------------------------------------------------------
117 Spencer, LLC asks the U.S. Bankruptcy Court for the District of
Massachusetts for authority to use cash collateral and provide
adequate protection, through September 30, 2023.
The bankruptcy filing was caused by disputes with two private
lenders, QS Private Lending, LLC and Resource Capital, LLC. These
private lenders made loans not to the Debtor, but to one of the
Debtor's principals, Peter Venuto, and/or his affiliated real
estate development entities. The Debtor disputes all claims and
liens asserted by these two private lenders, and intends to assert
affirmative claims against both of them.
Mr. Venuto is a real estate developer and in conjunction with his
business, he and/or various of his affiliated entities borrow money
from various lenders. Among the lenders Mr. Venuto borrowed money
from was QS Private Lending, LLC. In 2021, Mr. Venuto caused the
Debtor to execute a deed to the Property to QS in exchange for QS
executing guarantees of two loans from Country Bank, one to the
Debtor and one to another corporation owned by Ms. Venuto. The
Escrow Deed was to be held in escrow by a third party until the
earlier of (a) the release of QS' guarantees; (b) a default under
either of the Country Bank loans; or (c) the death of Mr. Venuto.
In September of 2022, Mr. Venuto needed $50,000 for a real estate
development project he was building through a separate limited
liability company. Mr. Venuto borrowed the money from QS, but QS
required the Debtor to be a maker on the $50,000 note, even though
the Debtor did not receive any of the funds from or the benefit of
the loan.
In the early Spring of 2023, the relationship between Mr. Venuto
and QS had soured, as a number of the real estate projects being
developed by Mr. Venuto were experiencing financial issues, and QS
had, ostensibly, loaned money to various of those projects. QS
claimed that the $50,000 Loan was in default.
QS somehow obtained the Escrow Deed and, although none of the
conditions for recordation of the Escrow Deed had occurred, QS
recorded the Escrow Deed on April 24, 2023. The Debtor attempted to
resolve its outstanding issues and requested that QS voluntarily
reconvey the Property, but QS refused to do so and the Debtor was
required to file the chapter 11 case in order to preserve, among
other things, the ability to seek the avoidance of the transfer of
the Property to QS under chapter 5 of the Bankruptcy Code.
The Debtor obtained a loan of approximately $2.2 million from
Country Bank in order to acquire the Property, and granted Country
Bank a mortgage on the Property to secure the repayment of that
loan. As of the Petition Date, Country Bank is owed approximately
$2.1 million. As part of its loan from Country Bank, the Debtor
contributes monthly amounts to a real estate tax escrow held by
Country Bank. While the Debtor may owe real estate taxes that have
accrued in the ordinary course of business, there are amounts
escrowed with Country Bank to pay those accrued real estate taxes.
In mid-2022, Peter Venuto borrowed $200,000 from William Depietri.
Mr. Venuto received all of the funds from the loan individually. In
January of 2023, William Depietri demanded that his loan to Mr.
Venuto be memorialized by a $225,000 promissory note from 136
Spencer, LLC, a limited liability company owned by Mr. Venuto, to
Resource Capital, LLC, a limited liability company owned or
controlled by William Depietri. Even though the Debtor did not
receive any of the funds from or the benefit of the $200,000 loan,
William Depietri also required the Debtor to guaranty the
obligations under the 136 Spencer Note and to secure the Guaranty
with a mortgage on the Property. The 136 Spencer Note and the
Guaranty were executed on January 27, 2023. On February 10, 2023,
just 14 days later, Resource declared a default under the 136
Spencer Note.
As adequate protection, the Debtor proposes to grant Country Bank,
and any other secured creditors, replacement liens on the same
types of post-petition property of the estate against which such
creditors held liens as of the Petition Date. The Replacement Liens
shall maintain the same priority, validity and enforceability as
the secured creditors' pre-petition liens (if any). The Replacement
Liens will only be recognized to the extent of the diminution in
value of the secured creditors' prepetition collateral after the
Petition Date resulting from the Debtor's use of the cash
collateral during the case.
The Debtor asserts there is in excess of $1.6 million in equity in
the Debtor's real property, and it generates approximately $9,000
in net income each month, inclusive of debt service to the first
mortgage holder, Country Bank. The Debtor intends to continue
making normal debt service payments to Country Bank. The Debtor
disputes both the claims and liens asserted by the second mortgage
holder, Resource Capital, LLC.
But the equity cushion in and the positive cash flow generated by
the Debtor's real property provides ample adequate protection for
any use of cash collateral.
A copy of the motion is available at https://urlcurt.com/u?l=fTDKQt
from PacerMonitor.com.
About 117 Spencer, LLC
117 Spencer, LLC is a Massachusetts limited liability company that
was formed in 2019 to own and operate the real estate located at
117 Main Street, Spencer, Massachusetts. The Debtor has always been
in the business of operating the Property, and has not had any
other material business operations. Lisa Venuto and Peter Venuto,
who are married, collectively own 100% of the Debtor's membership
interests. Peter Venuto is the manager of the Debtor.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Mass. Case No. 23-40590) on July 21,
2023. In the petition signed by Peter Venuto (by Lisa Venuto under
power of attorney), the Debtor disclosed up to $10 million in both
assets and liabilities.
D. Ethan Jeffery, Esq., at Murphy & King, Professional Corporation,
represents the Debtor as legal counsel.
34 SUMNER: Court OKs Cash Collateral Access Thru Aug 10
-------------------------------------------------------
The U.S. Bankruptcy Court for the District of Massachusetts,
Western Division, authorized 34 Sumner Realty LLC to continue using
cash collateral on an interim basis under the same terms and
conditions as the previous order through August 10, 2023.
A hearing on the matter is also set for August 10 at 10 a.m.
As previously reported by the Troubled Company Reporter, the Debtor
is attempting to operate its businesses and manage its affairs and
properties, although its efforts are being thwarted by the first
mortgagee on its properties, Mooring NC IV, LLC.
The first mortgage on the Debtor's property located in 34 Sumner
Avenue, Springfield, Massachusetts -- save perhaps one condominium
and certain parking places -- was originally held by Security
Mutual Insurance Company of New York, and was transferred to
Mooring in May or June 2022.
Security Mutual took possession of the 34 Sumner Avenue Property
approximately three years ago, and Mooring has continued to possess
the property, receiving rents.
There is a second mortgage held by Belvidere Capital LLC.
The Debtor said it needs to use the cash collateral assets
generated by the rentals to continue paying condominium fees,
utilities, insurance, real estate taxes, maintenance, and related
items. The Debtor proposed to retain any balance in its
debtor-in-possession account.
These creditors assert security interests in the Debtors'
properties:
-- Mooring NC IV, LLC, with a principal place of business at
100 Court Street, P.O. Box 1625, Binghamton, New York, 13902.
Mooring claims a first mortgage on the real properties of the
Debtor, securing a loan of approximately $3,500,000; this loan was
a refinance of the original mortgage obligation incurred in the
purchase of the Debtor's real properties.
-- Belvidere Capital, LLC, 396 Andover Street, Lowell, MA
01852, claims a second mortgage on the real properties of the
Debtor, securing a loan of approximately $3,000,000. The Debtor did
not receive the benefits of this loan, but rather an affiliate of
the Debtor did.
As adequate protection to the extent that the Debtor's use of cash
collateral results in a decrease in the value of the Secured
Creditors' interest in their collateral, the Secured Creditors are
granted replacement liens and security interests in all of the
Debtor's assets in which the Secured Creditors possess a security
interest as of the Petition Date, to the same extent, validity,
priority and enforceability of their perfected security interests
that they would have had in the absence of the bankruptcy filing.
A copy of the order is available at https://urlcurt.com/u?l=x756Fk
from PacerMonitor.com.
About 34 Sumner Realty LLC
34 Sumner Realty LLC owns various condominium units, garage units,
retail unit, and storage unit, at 34 Sumner Avenue, Springfield,
MA, with an aggregate value of $4 million.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Mass. Case No. 23-30073) on March 2,
2023. In the petition signed by Louis Masaschi, as manager, the
Debtor disclosed $4,000,000 in assets and $7,000,000 in debts.
Judge Elizabeth D. Katz oversees the case.
The Law Offices of Louis S. Robin serves as counsel to the Debtor.
371 CALABASAS: Taps Binder & Malter as Bankruptcy Counsel
---------------------------------------------------------
371 Calabasas, LLC seeks approval from the U.S. Bankruptcy Court
for the Northern District of California to employ Binder & Malter,
LLP as its legal counsel.
The Debtor requires legal counsel to:
a. assist in protecting and preserving the interests of
secured and unsecured creditors, maximizing the value of estate
property, and administering that property throughout the Debtor's
Chapter 11 case;
b. advise the Debtor of its powers and responsibilities under
the Bankruptcy Code;
c. advise the Debtor generally as general bankruptcy counsel;
d. develop legal positions and strategies with respect to all
facets of the case, including analyzing administrative and
operational issues;
e. prepare legal papers;
f. participate in the resolution of issues related to a plan
of reorganization and the development, approval and implementation
of such plan; and
g. render such other necessary services that the Debtor may
require in connection with this case.
The firm will be paid at these rates:
Heinz Binder $625 per hour
Michael W. Malter $625 per hour
Robert G. Harris $575 per hour
Julie H. Rome-Banks $575 per hour
Wendy W. Smith $575 per hour
Joshua de Larios-Heiman $575 per hour
Christian P. Binder $475 per hour
Trang Do $425 per hour
Paralegals and Law Clerks $325 per hour
In addition, the firm will receive reimbursement for out-of-pocket
expenses incurred.
The firm received an initial retainer in the amount of $75,000.
Julie Rome-Banks, Esq., a partner at Binder & Malter, disclosed in
a court filing that her firm is a "disinterested person" pursuant
to Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Julie H. Rome-Banks, Esq.
Binder & Malter, LLP
2775 Park Avenue
Santa Clara, CA 95050
Tel: (408) 295-1700
Fax: (408) 295-1531
Email: julie@bindermalter.com
About 371 Calabasas
371 Calabasas, LLC filed Chapter 11 petition (Bankr. N.D. Calif.
Case No. 23-50652) on June 16, 2023, with $1 million to $10 million
in both assets and liabilities. Gina Klump has been appointed as
Subchapter V trustee.
Judge Stephen L. Johnson oversees the case.
Michael W. Malter, Esq., at Binder & Malter, LLP is the Debtor's
legal counsel.
502 E JED REALTY: Lender Seeks to Prohibit Cash Collateral Access
-----------------------------------------------------------------
NPL Fund LLC asks the U.S. Bankruptcy Court for the Eastern
District of New York to enter an order prohibiting 502 E. Jed
Realty Corp. from using cash collateral, directing the Debtor to
turnover cash collateral to Secured Creditor and provide an
accounting of post-petition income and expenses with respect to the
Debtor's mixed-use building, and requiring the Debtor to make
adequate protection payments.
The Chapter 11 case was commenced in bad faith solely for the
purpose of preventing NPL Fund, the Debtor's largest pre-petition
creditor from exercising its right to foreclose its mortgage on the
Debtor's investment property and to obstruct Receiver's efforts to
operate the Property and collect rent.
The Debtor's Property consists of a mixed-use building consisting
of no less five commercial units and 32 residential units. Prior to
the Bankruptcy Case, the Debtor failed to adequately manage the
Property.
Unfortunately, the Debtor's mismanagement has continued during the
Bankruptcy Case. Here, the Debtor is using Secured Creditor's cash
collateral without the consent of Secured Creditor or Court
approval for non-emergency expenses and has not filed any monthly
operating reports to account for its income and expenses.
On September 20, 2017, the Debtor, executed, acknowledged, and
delivered to Sterling National Bank, a Promissory Note, bearing
said date, wherein and whereby it was covenanted and agreed that it
would repay Original Lender, the principal amount of $4.650 million
with interest thereon as set forth in the Note in connection with a
commercial loan.
On September 20, 2017, to secure repayment of the indebtedness
evidenced by the Note, the Debtor, duly executed, acknowledged, and
delivered to Original Lender, a Mortgage Consolidation, Extension
and Modification Agreement, encumbering the Property and recorded
in the City Register of the City of New York, Bronx County on
October 6, 2017 under City Register File No.: 2017000371181.
On September 20, 2017, as further security for the Note, Delfino
Velez, individually, executed, acknowledged, and delivered to
Original Lender an Unlimited Guaranty, guaranteeing all
obligations under the Loan to original Lender.
To further secure the Note, Original Lender perfected a security
interest against the personal property situated at the Property by
filing a UCC-1 Financing Statement that was recorded with the
Register's Office on October 6, 2017 under CRFN: 2017000371184.
On April 1, 2022, the Debtor executed a Forbearance Agreement in
favor of Tower Capital Management LLC, a Delaware limited liability
company, as Servicer on behalf of the NYCTL 2021-A Trust pursuant
to a Servicing Agreement dated as of January 3, 2022 among NYCTL
2021-A Trust, as Issuer, Tower, as Servicer and The Bank of New
York Mellon. Borrower represented in the Forbearance Agreement that
certain real estate taxes, water and sewer charges and various
other charges are a lien on the Property.
On June 16, 2022, the Note and Mortgage were assigned by Webster
Bank, National Association, successor by merger to Original Lender,
as evidenced by an Assignment of Mortgage that was recorded in the
Register's Office on June 30, 2022 under CRFN: 202200260365.
Additionally, the assignment of the Note is evidenced by certain
Allonge to the Note, annexed to the Note evidencing Secured
Creditor, as holder of the Note.
On June 16, 2022, the ALR was assigned from Webster Bank to Secured
Creditor pursuant to an Assignment of Assignment of Leases and
Rents that was recorded in the Register’s Office on June 30, 2022
under CRFN: 2022000260366.
On June 17, 2022, the UCC-1 was assigned by the Webster Bank to
Secured Creditor as evidenced by the UCC-3 Assignment.
On September 8, 2022, Secured Creditor filed a UCC-3 Continuation,
which was recorded with the Register’s Office on September 9,
2022 under CRFN: 2022000352848.
Secured Creditor is the owner and holder of the Note, Mortgage,
Guaranty, ALR, and any and all other loan documents evidencing the
Loan.
The Debtor failed to comply with the terms and provisions of the
Loan Documents by, among other things, (i) failing and omitting to
pay the entire debt which came due and owing on the September 15,
2022 Maturity Date; (ii) failing to comply with the New York City
Department of Buildings 12 open violations on the Property, filed
between May 2, 2019 and December 1, 2021, (iii) failing to comply
with the New York City Environmental Control Board's four open
violations on the Property, filed between May 12, 2020 and November
5, 2021, and (iv) failing to deliver a Permanent Certificate of
Occupancy to Webster Bank on or before April 1, 2018, all
constituting events of default as defined in the Loan Documents .
Prior to the Maturity Default, as more particularly set forth in
that certain notice dated May 2, 2022, transmitted to Borrower by
Webster Bank, among other things, (i) the Debtor was advised of its
Events of Default (other than the Maturity Default) under the Loan
Documents; and (ii) demand was made for any and all amounts due and
owing under the Loan Documents.
On December 8, 2022, as result of the Events of Default, pursuant
to the terms of the Loan Documents, Secured Creditor commenced a
commercial mortgage foreclosure action in the New York State
Supreme Court, Bronx County under Index No. 818433/2022 in the
matter originally styled NPL Fund LLC v. 502 E. Jed Realty Corp.
The Summons and Complaint were filed in the Clerk's Office on
December 8, 2022.
On December 19, 2022, due to the Debtor's failure to maintain the
Property, Secured Creditor filed an application to have a temporary
receiver appointed to manage the Property to resolving multiple
problems relating to the Property.
The Debtor has never sought Secured Creditor's consent or court
approval to use cash collateral.
The Secured Creditor asserts based on the unauthorized use of cash
collateral and the Debtor's history of mismanagement it is
troubling that there is no accounting of the Debtor's post-petition
operating income and expenses as no monthly operating reports have
been filed. This particularly concerning since as of the 341
Meeting: (i) pre-petition accounts have not been closed where the
Schedules reflect Debtor-in-possession accounts of almost $200,000
and (ii) monthly rent is about $65,000. The Court should require
Debtor to provide a detailed account of its income and expenses.
A copy of the motion is available at https://urlcurt.com/u?l=aLj54a
from PacerMonitor.com.
About 502 E Jed Realty Corp.
502 E Jed Realty Corp., a company in Astoria, N.Y., filed its
voluntary petition for Chapter 11 protection (Bankr. E.D.N.Y. Case
No. 23-41316) on April 18, 2023, with $1 million to $10 million in
both assets and liabilities.
Judge Nancy Hershey Lord oversees the case.
Lawrence F. Morrison, Esq., at Morrison Tenenbaum, PLLC serves as
the Debtor's legal counsel.
NPL Fund LLC, as secured creditor, is represented by:
Jerold C. Feuerstein, Esq.
Daniel N. Zinman, Esq.
Stuart L. Kossar, Esq.
Kriss and Feuerstein LLP
360 Lexington Avenue, 12th Floor
New York NY 10017
Tel No: (212) 661-2900
AGEX THERAPEUTICS: Agrees to Swap $36M Debt for Preferred Stock
---------------------------------------------------------------
AgeX Therapeutics, Inc. and Juvenescence Limited entered into an
exchange agreement pursuant to which AgeX agreed to issue to
Juvenescence 211,600 shares of a newly authorized Series A
Preferred Stock and 148,400 shares of a newly authorized Series B
Preferred Stock in exchange for the cancellation of a total of $36
Million of indebtedness consisting of the outstanding principal
amount of certain loans made by Juvenescence to AgeX and loan
origination fees accrued with respect to those loans.
The exchange of the indebtedness for shares of Series A Preferred
Stock and Series B Preferred Stock will be implemented for the
purpose of bringing AgeX common stock back into compliance with the
continued listing requirements of the NYSE American that require
AgeX to have at least $6 Million of stockholders equity; however
the continued listing remains dependent upon a determination by the
NYSE American that AgeX has regained compliance with their listing
standards. The exchange of $36 Million of indebtedness for the
Preferred Stock would, on a proforma basis as of March 31, 2023,
increase AgeX's stockholders equity to approximately $16 Million
from a deficit of approximately $20 Million. Actual stockholders
equity will be reduced by losses recognized by AgeX subsequent to
March 31, 2023 which are not reflected in the pro forma amounts but
if the exchange of indebtedness for Preferred Stock were to be
consummated on the date of this press release, AgeX's stockholder
equity would exceed the $6 Million amount necessary to meet NYSE
American continued listing requirements. The consummation of the
exchange of indebtedness for Preferred Stock was expected to occur
on or around July 25, 2023 subject to (a) the NYSE American
approving a supplemental application to list the common stock
issuable upon conversion of the Preferred Stock into common stock,
and (b) the filing of a Certificate of Designation of the Series A
Preferred Stock and a Certificate of Designation of the Series B
Preferred Stock with the Secretary of State of Delaware.
The Preferred Stock is not entitled to receive any payment or
distribution of cash or other dividends. In the event of any
voluntary or involuntary liquidation, dissolution or other winding
up of the affairs of AgeX, subject to the preferences and other
rights of any senior stock, before any assets of AgeX shall be
distributed to holders of common stock or other junior stock, all
of the assets of AgeX available for distribution to stockholders
shall be distributed among the holders of Series A Preferred Stock
and Series B Preferred Stock until AgeX shall have distributed to
the holders of those shares an amount of assets having a value
equal to the subscription price per share.
Each share of Preferred Stock will be convertible into a number of
shares of AgeX common stock determined by dividing (x) a number
equal to the number of dollars and cents comprising the
subscription price, by (y) a number equal to the number of dollars
and cents comprising the conversion price. The subscription price
per share of Preferred Stock is $100 which was paid through the
exchange of indebtedness for shares of Preferred Stock. The
conversion price per share of Series A Preferred Stock or Series B
Preferred Stock is $0.72 which was the closing price of AgeX common
stock on the NYSE American on the last trading day immediately
preceding the execution of the Exchange Agreement.
If under the rules of the NYSE American or any other national
securities exchange on which AgeX common stock may be listed,
approval by AgeX stockholders would be required in connection with
the issuance of common stock in excess of the "19.9% Cap" upon any
conversion of Series B Preferred Stock, then unless and until such
stockholder approval has been obtained, the maximum number of
shares of common stock that may be issued upon conversion of all
shares of Series B Preferred Stock shall be an amount equal to the
19.9% Cap. The 19.9% Cap means 7,550,302 shares of common stock.
If under the rules of the NYSE American or any other national
securities exchange on which AgeX common stock may be listed,
approval by AgeX stockholders would be required in connection with
the issuance of common stock in excess of the 50% Cap upon any
conversion of Series B Preferred Stock, then unless and until such
stockholder approval has been obtained, the maximum number of
shares of common stock that may be issued to a holder of Series B
Preferred Stock upon conversion of such shares shall be an amount
that, when added to other shares of common stock owned by such
holder immediately prior to such conversion would equal one share
less than the 50% Cap.
The Preferred Stock has limited voting rights. The following
matters will require the approval of the holders of a majority of
the shares of a series of Preferred Stock then outstanding, voting
as a separate class: (i) creation of any Preferred Stock ranking as
senior stock to the series with respect to liquidation preferences;
(ii) repurchase of any shares of common stock or other junior stock
except shares issued pursuant to or in connection with a
compensation or incentive plan or agreement approved by the Board
of Directors for any officers, directors, employees or consultants
of AgeX; (iii) any sale, conveyance, or other disposition of all or
substantially all AgeX's property or business, or any liquidation
or dissolution of AgeX, or a merger into or consolidation with any
other corporation (other than a wholly-owned subsidiary
corporation) but only to the extent that the Delaware General
Corporation Law requires that such transaction be approved by each
class or series of Preferred Stock; (iv) any adverse change in the
powers, preferences and rights of, and the qualifications,
limitations or restrictions on, the series of Preferred Stock; or
(v) any amendment of AgeX's Certificate of Incorporation or Bylaws
that results in any adverse change in the powers, preferences and
rights of, and the qualifications, limitations or restrictions on,
the series of Preferred Stock. Except as may otherwise be required
by the Delaware General Corporation Law, the Preferred Stock will
have no other voting rights.
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.
AGOGIE INC: Seeks Continued Use of Cash Collateral
--------------------------------------------------
Agogie, Inc. ask the U.S. Bankruptcy Court for the District of
Delaware for authority to use cash collateral until the
confirmation of its reorganization plan.
Pursuant to the Small Business Debtor's First Amended Plan of
Reorganization, the Debtor intends to continue operations, assume
all contracts necessary to operations, and over a five year term -
pay all administrative and priority claims in full, pay all secured
claims the full value of their collateral, and pay allowed general
unsecured claims the Debtor's projected disposable income over the
next 5 years through annual distributions thereto in accordance
with the Debtor's cash flow projections.
Confirmation is scheduled for September 6, 2023 at 10 a.m.
Prior to the Petition Date, the Debtor engaged First Corporate
Solutions to conduct searches of Uniform Commercial Code Financing
Statements recorded against the Debtor in both Missouri and
Delaware.
The parties that assert an interest in the Debtor's cash collateral
are Kickfurther, U.S. Small Business Administration, Shopify,
Ondeck, Fox Capital, Fintap, Lendora, National Funding, and
Cloudfund.
The SBA's UCC filing secures the Debtor's obligations to the SBA,
which originated through an EIDL loan that the Debtor obtained at
the beginning of the COVID-19 pandemic.
As of the Petition Date, the Debtor was indebted to the SBA in the
total amount of about $350,000.
It is the Debtor's position that the SBA has a first priority
perfected lien encumbering all of the Debtor's assets as of the
Petition Date.
Albeit, because the Debtor's assets as of the Petition Date have a
value of only $61,788, the SBA is undersecured by about $288,212.
It is also the Debtor's position that KickFurther's UCC filings
perfect Kickfurther's interest in all inventory consigned to the
Debtor, and secures the Debtor's obligations thereto.
The Debtor requires use of cash collateral, without interruption,
and the ability to sell its inventory, as well as the product
consigned to it by Kickfurther in order to maintain regular
operating expenses and to remain in business.
A copy of the motion is available at https://urlcurt.com/u?l=QfjubV
from PacerMonitor.com.
About Agogie Inc.
Agogie, Inc. designs and manufactures resistance integrated
clothing for the sports performance, fitness, and athleisure
industries. The company is based in Saint Louis, Mo.
Agogie sought protection for relief under Chapter 11 of the
Bankruptcy Code (Bankr. D. Del. Case No. 23-10215) on Feb. 17,
2023, with as much as $1 million in both assets and liabilities.
Judge J. Kate Stickles oversees the case.
The Debtor tapped Kasen & Kasen, P.C., as bankruptcy counsel and
Dickinson Wright, PLLC, as special counsel.
ARSENAL AIC: Fitch Gives BB+(EXP) Rating to New $900MM Sec. Notes
------------------------------------------------------------------
Fitch Ratings has assigned a 'BB+(EXP)'/'RR2' expected rating to
Arsenal AIC Parent LLC's (Arsenal) proposed $900 million senior
secured notes due in 2030. The notes will rank pari passu with the
previously announced $1 billion term loan B (BB+(EXP)/RR2). The
ratings benefit from a two-notch uplift from Arsenal's 'BB-(EXP)'
Long-Term Issuer Default Rating (IDR).
Arsenal's 'BB-(EXP)' rating reflects the company's competitive
position in the aluminum fabricated product market, improved
end-market outlook, considerable operational/product flexibility to
accommodate demand shifts, favorable operational and cost
improvement initiatives, and elevated post-acquisition leverage
profile. Fitch's rating case forecasts EBITDA leverage and coverage
metrics both in the mid-3x range, a level commensurate with 'BB-'
rating. Fitch recognizes end-market improvements and execution of
its operational and cost initiatives could increase EBITDA and
improve metrics. However, the current ratings also consider the
uncertainty around the sponsor's medium-term financial policy and
capital allocation priorities, including the potential for M&A
transactions. The 'BB+(EXP)'/'RR2' rating, consistent with Fitch's
Corporates Recovery Ratings and Instrument Ratings Criteria,
reflects the company's competitive asset base and expected capital
structure, including an ABL facility.
The final ratings are contingent upon the receipt of final
documents conforming to the information already received. Upon
closing, Fitch will assign final ratings and expects to align
Arconic Corporation's (ARNC) IDR with that of Arsenal when the
acquisition is completed.
KEY RATING DRIVERS
Apollo Acquisition: In May 2023, ARNC entered into a definitive
agreement to be acquired by funds managed by affiliates of Apollo,
or Arsenal, in an all-cash transaction at an enterprise value of
about $5 billion, financed through a combination of debt and
equity. Apollo has identified cost savings initiatives such as raw
material optimization, savings on public company costs and
productivity improvement, all of which will help grow margins over
the next few years. Arsenal is committed to allocate capital in
improving asset integrity in order to reduce operational outages
and optimize its facilities.
Mid-3x EBITDA Leverage Near-Term: Fitch views Arsenal's pro forma
credit profile as weaker than ARNC's pre-acquisition following the
debt-financed acquisition which adds around $1 billion of
incremental debt. Fitch forecasts EBITDA leverage will initially be
elevated at around 3.7x in FY23, but could decline below 3.0x over
the next three or four years depending on the company's operational
execution, end-market recovery, and financial policies and capital
deployment priorities.
Future financial policy, capital deployment decisions including
potential M&A transactions and commitment to deleverage over the
medium term could change its credit risk profile.
Secular Tailwinds Supporting Projected Performance: Fitch believes
the company will benefit over the next several years as both auto
and aerospace & defense original equipment manufacturers (OEMs)
shift to lightweight materials in production. Packaging will be
supported by steady volume and pricing growth in the North American
can sheet market, which is traditionally undersupplied. In the
longer term, environmental trends would also benefit the company as
the transition to electric vehicles could yield higher aluminum
content per vehicle and aluminum may be an increasingly preferred
method of packaging given its recyclability.
Fitch expects EBITDA to grow at mid- to -high single digits largely
supported by strong demand in the end-markets over the rating
horizon. Demand from aerospace end-market in particular, is
anticipated to steadily increase over the next few years despite
near-term recessionary fears given the ongoing recovery in air
traffic demand, airline operators taking a long-term view on fleet
planning, and also boosted by underinvestment during COVID.
Operational Flexibility: With an exception of assets deployed for
aerospace products, the company benefits from the adaptability of
their assets where they can switch their production lines in the
merit order to serve different end-markets depending on the market
demand dynamics. The company serves higher-margin, baseline
industrial products, including transportation and building
products/construction, and lower-margin but more stable packaging,
while leaving some capacity buffer to meet overall spot industrial
market demand.
Low-Double Digit Profitability Expected: Fitch views ARNC's
profitability as somewhat weaker than broader diversified
industrial peers. Fitch forecasts the company will generate high
single-digit, improving to low double-digit EBITDA margins and
low-single digit FCF margins (annual FCF of $100 million-$200
million) over the rating horizon. Fitch believes the company's
anticipated top-line growth and focus on operational efficiency
will likely support management in maintaining or improving the
margin over the long term. Fitch anticipates cost savings to come
from raw material optimization, less stringent reporting obligation
as a private company, procurement and productivity. ARNC also has
relatively low capital intensity, with capex representing around
2.5% of revenue on average and minimal working capital
requirements.
DERIVATION SUMMARY
ARNC has weaker profitability than similarly rated peers in the
diversified industrials sector. Fitch believes it compares well
with Kaiser Aluminum Corp. (BB-/Stable), a manufacturer of
semi-fabricated specialty aluminum mill products, in terms of
diversification and exposure to cyclical end-markets Fitch
considers ARNC's end markets to be relatively diversified and
expects the company's cash flow to gradually improve following
several cost-cutting measures, reduced environmental costs and
lower pension contributions.
KEY ASSUMPTIONS
Fitch's Key Assumptions within Fitch Rating Case for the Issuer
-- Relatively stable aluminum prices through 2025 with an average
price between $2,400 and $2,500 per tonne before declining to
around $2,200 per tonne in 2026;
-- Sales volume to recover to a normalized level after operational
outage, which was fully resolved in 1Q23, followed by low-single
digit increase in volumes throughout the forecasted period, led by
aerospace, transportation, and packaging;
-- Margins gradually increase and trend toward the low-double
digit range over the next few years;
-- Capex between 2% and 3% of revenue per year;
-- No dividend;
-- Pension contributions plus other post-employment benefit (OPEB)
payments around $125 million per year over the forecast;
-- No voluntary gross debt repayment or M&A.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Demonstrated commitment to a financial policy leading to
mid-cycle EBITDA leverage sustained below 3.25x;
-- Improved financial flexibility with EBITDA coverage sustained
above 4.0x;
-- EBITDA margin improvement toward low-double digits due to
successful cost saving initiatives or higher asset utilization
supported by strong end-market demand;
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Mid-cycle gross EBITDA leverage sustained around 4.0x;
-- Weakening financial flexibility with EBTIDA/FFO interest
coverage sustained below 3.0x or 2.5x respectively;
-- Contingent liabilities, pension contributions, or weaker
utilization result in significant impact to FCF margins reducing
financial flexibility.
LIQUIDITY AND DEBT STRUCTURE
Arsenal's liquidity is expected to be supported by a new $1.2
billion ABL facility. Fitch anticipates Arsenal will maintain
liquidity of between $1.0 billion and $1.5 billion on average over
the next several years between cash and its ABL facility, which
could be drawn upon during the year to cover short-term working
capital fluctuations but would likely be subsequently paid down.
ISSUER PROFILE
Arsenal is an affiliate of funds managed by Apollo, which is
acquiring Arconic Corp. Arconic is a provider of rolled aluminum
products, extrusions, and building products within the building and
construction, industrial, packaging, ground transportation, and
aerospace & defense end-markets.
ESG CONSIDERATIONS
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' 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. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
BIOSTAGE INC: All Proposals Passed at Annual Meeting
----------------------------------------------------
Biostage, Inc. held its Annual Meeting of Stockholders during
which:
(1) elected each of Junli He and Dr. James Shmerling as Class I
Directors, each for a three-year term, such term to continue until
the annual meeting of stockholders in 2026 and until such
Director's successor is duly elected and qualified or until their
earlier resignation or removal;
(2) ratified the appointment of Marcum LLP as the Company's
independent registered public accounting firm for the fiscal year
ending Dec. 31, 2023;
(3) approved an amendment to the Company's Amended and Restated
Equity Incentive Plan; and
(4) approved, by non-binding advisory vote, the compensation of
the Company's Named Executive Officers.
About Biostage
Holliston, Massachusetts-based Biostage, Inc. -- www.biostage.com
-- is a biotechnology company with a mission to cure patients of
cancers, injuries, and birth defects of the gastro-intestinal tract
and the airways. The Company believes its technology is likely to
be used to treat esophageal cancer, esophageal injuries, and birth
defects in the esophagus. The Company believes additional product
candidates in its pipeline may treat bronchial cancer, intestinal
cancer, and colon cancer. Since inception, the Company has devoted
substantially all of its efforts to business planning, research and
development, recruiting management and technical staff, and
acquiring operating assets.
Biostage reported a net loss of $6.07 million for the year ended
Dec. 31, 2022, compared to a net loss of $7.98 million for the year
ended Dec. 31, 2021. As of Dec. 31, 2022, the Company had $2.40
million in total assets, $1.41 million in total liabilities, and
$4.18 million in series E convertible preferred stock, and a total
stockholders' deficit of $3.19 million.
Boston, MA-based Marcum LLP, the Company's auditor since 2022,
issued a "going concern" qualification in its report dated March
30, 2023, citing that the Company has suffered recurring losses
from operations, has an accumulated deficit, uses cash flows in its
operations, and will require additional financing to continue to
fund its operations. These conditions raise substantial doubt
about the Company's ability to continue as a going concern.
BISHOP OF OAKLAND: Committee Taps Keller as Local Counsel
---------------------------------------------------------
The official committee of unsecured creditors of Roman Catholic
Bishop of Oakland received approval from the U.S. Bankruptcy Court
for the Northern District of California to employ Keller Benvenutti
Kim, LLP as local counsel.
The firm's services include:
a. providing legal advice to the committee with respect to its
duties and powers in the Debtor's Chapter 11 case;
b. consulting with the committee and the Debtor concerning
administration of the case;
c. assisting the committee in its investigation of the acts,
conduct, assets, liabilities, and financial condition of the
Debtor, sales under Section 363 of the Bankruptcy Code, the
formulation of a Chapter 11 plan, litigation relating to any of the
foregoing, and any other matter relevant to the case;
d. assisting the committee in analyzing the Debtor's capital
structure;
e. assisting the committee in evaluating claims against the
estate, including analysis of and possible objections to the
validity, priority, amount, subordination, or avoidance of claims
or transfers of property in consideration of such claims;
f. assisting the committee in participating in the formulation
and confirmation of a Chapter 11 plan, including the committee's
communications with unsecured creditors concerning such plan;
g. assisting the committee with any effort to request the
appointment of a trustee or examiner;
h. advising and representing the committee in connection with
matters generally arising in the case, including the obtaining of
credit, the sale of assets, and the rejection or assumption of
executory contracts and unexpired leases;
i. appearing before the bankruptcy court or any other court;
j. providing traditional services of local co-counsel including,
without limitation: monitoring the docket for filings and
coordinating with lead counsel in matters that need response,
preparing certifications of counsel and notices of fee applications
and hearings, and preparing documents and pleadings for hearings;
and
k. other necessary legal services.
The firm will be paid at these rates:
Tobias S. Keller (Partner) $950 per hour
Jane Kim (Partner) $850 per hour
David Taylor (Partner) $750 per hour
Gabrielle L. Albert (Associate) $650 per hour
Jullian Sekona (Associate) $390 per hour
Colin Mitsuoka (Staff) $175 per hour
In addition, the firm will receive reimbursement for out-of-pocket
expenses incurred.
Tobias Keller, Esq., a partner at Keller, disclosed in a court
filing that the firm is a "disinterested person" pursuant to
Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Tobias S. Keller, Esq.
Keller Benvenutti Kim. LLP
650 California Street, Suite 1900
San Francisco, CA 94108
Telephone: (415) 496-6723
Facsimile: (650) 636-9251
Email: tkeller@kbkllp.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.
BROOKFIELD PROPERTIES: Moody's Alters Outlook on 'Ba3' CFR to Neg.
------------------------------------------------------------------
Moody's Investors Service affirmed Brookfield Property Retail
Holding LLC's ('Brookfield Property Retail' or 'the company')
Corporate Family Rating at Ba3. In the same rating action, Moody's
also affirmed the company's B1 senior secured note and senior
secured bank credit facility ratings. The rating outlook was
changed to negative from stable due to pressure on the company's
fixed charge coverage ratio due to higher interest rates and the
thin and declining cushion on the coverage covenant. The negative
outlook also considers the challenging financing environment that
could meaningfully affect capital access and raise capital costs to
address the maturities of the company's mortgages and corporate
debt maturities over the next several years. Moody's withdrew the
company's speculative grade liquidity rating.
The affirmation reflects the company's solid operating performance
in recent quarters, its large and diversified portfolio of
primarily enclosed Class A malls, and demonstrated however,
implicit, support from its parent companies, Brookfield Property
Partners L.P. ('BPY', unrated) and Brookfield Corporation
('Brookfield Corp', A3 stable).
Issuer: Brookfield Properties Retail Holding LLC
-- Corporate Family Rating, Affirmed at Ba3
-- Senior Secured Bank Credit Facility, Affirmed at B1
-- Senior Secured Notes, Affirmed at B1
Withdrawals:
Issuer: Brookfield Properties Retail Holding LLC
Speculative Grade Liquidity Rating, Withdrawn, previously rated
SGL-4
Outlook Action:
Issuer: Brookfield Properties Retail Holding LLC
Outlook, Changed to Negative from Stable
RATINGS RATIONALE
Brookfield Property Retail's Ba3 CFR reflects its ownership of many
Class A malls with high occupancy and sales per square foot, high
leverage metrics, modest fixed charge coverage, and limited
financial flexibility due to its almost fully encumbered portfolio.
The ratings also reflect the implicit support from its parent
companies Brookfield Property Partners L.P. and Brookfield
Corporation that was demonstrated by previous capital injections
including during the pandemic. Other significant credit
considerations are a capital structure that includes a significant
share of primarily non-recourse property level mortgage debt that
reduces flexibility for future capital raises, meaningful exposure
to floating rate debt in a rising interest rate environment, and
laddered yet significant debt maturities over the next two years. A
diverse tenant base, and its strong track record of improving
portfolio asset quality through investment and redevelopment are
credit strengths.
Brookfield Property Retail's net debt to EBITDA, including pro-rata
share of unconsolidated joint ventures was high at 12.3x for the 12
months ended March 2023. The company's effective and secured
leverage metrics on the same basis are weak at 61.1% and 60.3%,
reflecting the company's aggressive capital strategy and proclivity
to secured debt. Fixed charge coverage was 1.49x at the end Q1 2023
on a trailing 12-month (TTM) basis and Moody's projects will
decline by 20-30 bps in the next 3 quarters due to the company's
exposure to floating rate debt and refinancing costs in a higher
rate environment. Moody's expects the company's aggregate leverage,
secured leverage and net debt to EBITDA ratios to improve modestly
in the next few quarters with a reduction in debt outstanding
related to mortgages where the company has stopped making
payments.
Brookfield Property Retail's capital structure has always included
a significant amount of property level mortgage debt. At the end of
Q1 2023, the consolidated properties had $9.1 billion of mortgage
balance of which almost 89% was non-recourse to the company.
Brookfield Property Retail's proportionate share of non-recourse
mortgage debt for the 55 assets in the unconsolidated joint
ventures amounted to $6.2 billion as of March 31, 2023. The company
has stopped making payments on $886 million of property level
mortgages and could consider similar options for other loans where
the property is facing occupancy and income challenges. The
carrying value for the ten properties where payments have been
suspended is less than the aggregate mortgage debt balance, and
their EBITDA contribution is not meaningful.
The corporate debt outstanding includes a secured revolver, a
secured term loan B, and two series of senior secured notes. At the
end of Q1 2023, the company had $685 million of remaining capacity
on its $1.0 billion revolver and $1,505 million of term loan debt.
The revolver and term loan mature in 2025 and the secured notes,
$1.7 billion in total, have 2026 and 2027 maturities.
Brookfield Property Retail has weak liquidity due to reliance on
capital markets to address the almost $2.8 billion of mortgages,
primarily non-recourse, maturing over the next 12 months and the
weak fixed charge ratio covenant cushion. The cushion on the fixed
charge ratio covenant has declined materially with the increase in
fixed charges in large part due to Brookfield Property Retail's
floating rate debt exposure, about 45% of aggregate debt, and cost
of refinancing maturing fixed rate debt. Moody's expects the
covenant cushion to remain thin, less than 10 bps for the 1.35x
covenant, over the next 4-5 quarters before slow recovery in the
second half of 2024. In the interim, costs saving measures and
support from its parents, BPY and Brookfield Corp, would help the
company avoid a breach, should the metric weaken beyond current
forecasts. Brookfield Property Retail is an indirect wholly owned
subsidiary of BPY which in turn is a wholly owned subsidiary of
Brookfield Corporation.
The company's portfolio metrics have improved in the last few
quarters. The company was 94.6% leased at the end of Q1 2023 and
re-leasing spreads grew by 13.9% on a TTM basis. Brookfield
Property Retail's strong $793 sales per square foot reflects the
quality of its portfolio and the healthy 4.7% growth in the metric
in the last year. These factors indicate good potential for rent
growth. The largest ten tenants account for a manageable 19.5% of
its portfolio. Some of the operating metrics, such as releasing
spreads, growth in same-store NOI and sales psf, would moderate in
the current environment although Moody's does not expect occupancy
to weaken given the company's solid track record with repositioning
and re-tenanting properties.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The negative outlook reflects the potential that the company's
fixed charge coverage ratio will remain weak for a sustained period
of time. The credit profile could also be pressured by weak capital
access for mall properties that will weaken refinancing terms for
the 2024 recourse mortgages maturities and the revolver and Term
Loan B that mature in 2025.
Brookfield Property Retail's ratings could be downgraded if its
abillity to maintain covenant compliance deteriorates or fixed
charge coverage per Moody's calculations drops below 1.2x. The
ratings could also be downgraded if net debt/EBITDA, including its
pro-rata share of joint venture debt and earnings, remains above
12.5x, the pool of mortgages where the company suspends interest
payments or equity contibutions grows or if refinancing maturing
mortgages and corporate debt at reasonable terms becomes more
challenging.
A rating upgrade is unlikely given the negative outlook and would
require sustaining net debt/EBITDA under 11.0x and fixed charge
coverage over 2.0x. Maintaining ample liquidity to meet near- and
intermediate-term obligations, solid occupancy and positive core
NOI growth, would also be necessary for an upgrade.
Brookfield Property Retail LLC, a Delaware limited liability
company, through its subsidiaries and affiliates, is an owner and
operator of primarily Class A regional malls. As of March 31, 2023,
the company was the owner, either entirely or with joint venture
(JV) partners, of 110 retail properties in the US. The company is
indirectly and wholly owned by Brookfield Corporation and for the
12 months ended March 2023 generated revenue of approximately $2.4
billion factoring in the proportionate share of JV partner
operations.
The principal methodology used in these ratings was REITs and Other
Commercial Real Estate Firms published in September 2022.
BURGER BUILDING: Taps Marcus & Millichap as Real Estate Broker
--------------------------------------------------------------
The Burger Building, LLC seeks approval from the U.S. Bankruptcy
Court for the Eastern District of New York to employ Marcus &
Millichap Real Estate Investment Services of New York, Inc.
The Debtor needs a commercial real estate broker to assist in the
sale of its commercial property located at 57-18 Myrtle Ave,
Queens, N.Y.
The broker will receive 4 percent of the property's selling price
as compensation.
William Stephan, a real estate agent at Marcus & Millichap,
disclosed in a court filing that his firm is a "disinterested
person" as defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
William Stephan
Marcus & Millichap Real Estate Investment Services of New
York, Inc.
260 Madison Avenue, 5th Floor
New York, NY 10016
Telephone: (212) 430-5100
Email: william.stephaniv@marcusmillichap.com
About The Burger Building
The Burger Building, LLC is the fee simple owner of a property
located at 5718 Myrtle Ave, Ridgewood, N.Y. The property is valued
at $1.8 million.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D.N.Y. Case No. 23-40481) on Feb. 13,
2023, with $2,317,238 in assets and $1,614,216 in liabilities. Paul
Amato, managing member, signed the petition.
Judge Jil Mazer-Marino oversees the case.
H. Bruce Bronson, Esq., at Bronson Law Office, P.C., represents the
Debtor as bankruptcy counsel.
CAMBER ENERGY: Gets Shareholder Approval of Proposed Viking Merger
------------------------------------------------------------------
Camber Energy, Inc. and Viking Energy Group, Inc. announced that
their shareholders approved by the requisite voting thresholds at
special meetings held separately by each company on July 20, 2023,
the various proposals relating to the adoption and approval of the
Agreement and Plan of Merger between Camber and Viking dated Feb.
15, 2021, as amended on April 18, 2023 and the transactions
contemplated by the Merger Agreement, including a wholly owned
subsidiary of Camber merging with and into Viking, with Viking
surviving the Merger as a wholly owned subsidiary of Camber and
Camber remaining the sole publicly-traded entity.
Camber and Viking anticipate that the Merger will be completed on
or about Aug. 1, 2023, subject to the satisfaction of required
closing conditions.
If remaining closing conditions are satisfied, upon closing of the
Merger, Camber will acquire full legal and accounting control of
Viking, permitting Camber to, among other things, report underlying
subsidiary revenues at the Camber level, and Camber would benefit
directly and fully from Viking's business activities, including as
it relates to Viking's interests in the following:
* Custom Energy & Power Solutions Business;
* Exclusive License to a Patented Clean Energy & Carbon-Capture
system;
* Intellectual property rights to a fully developed, patented
ready-for-market proprietary Medical & Bio-Hazard Waste Treatment
system using Ozone Technology; and
* Patent-pending ready-for-market proprietary Open Conductor
Detection systems.
About Camber Energy
Based in Houston, Texas, Camber Energy, Inc. --
http://www.camber.energy-- is a growth-oriented diversified energy
company. Through its majority-owned subsidiary, Camber provides
custom energy & power solutions to commercial and industrial
clients in North America and owns interests in oil and natural gas
assets in the United States. The company's majority-owned
subsidiary also holds an exclusive license in Canada to a patented
carbon-capture system, and has a majority interest in: (i) an
entity with intellectual property rights to a fully developed,
patent pending, ready-for-market proprietary Medical & Bio-Hazard
Waste Treatment system using Ozone Technology; and (ii) entities
with the intellectual property rights to fully developed, patent
pending, ready-for-market proprietary Electric Transmission and
Distribution Open Conductor Detection Systems.
Camber Energy reported a net loss attributable to the company of
$107.74 million for the year ended Dec. 31, 2022, a net loss
attributable to the company of $169.68 million for the year ended
Dec. 31, 2021, compared to a net loss attributable to the company
of $52.01 million for the nine months ended Dec. 31, 2020.
Dallas, Texas-based Turner, Stone & Company, L.L.P., the Company's
auditor since 2021, issued a "going concern" qualification in its
report dated March 17, 2023, citing that the Company has suffered
recurring losses from operations, has a stockholder deficit and has
a net capital deficiency that raises substantial doubt about its
ability to continue as a going concern.
CARVANA CO: Reaches Restructuring Deal With Apollo, Bondholders
---------------------------------------------------------------
Carvana Co., which claims to be the fastest-growing used car dealer
in U.S. history, on July 18, 2023, announced that it entered into a
transaction support agreement with a group of noteholders
representing over 90% of the aggregate principal amount outstanding
of the Company's existing senior unsecured notes.
"The strong performance of our business in 2023 presented an
opportunity for an impactful and win-win transaction for Carvana
and its senior unsecured noteholders," said Mark Jenkins, Carvana's
Chief Financial Officer. "This transaction significantly increases
our financial flexibility by reducing our total debt, extending
maturities, and lowering near-term cash interest expense as we
continue to execute our plan of driving significant profitability
and returning to growth."
"Apollo is pleased to support this debt exchange agreement, which
stands to significantly strengthen Carvana's financial position
while providing creditors with new first lien debt. Working with
Carvana, PIMCO, Ares and the ad hoc group of noteholders, we
believe this agreement demonstrates the types of win-win outcomes
that companies can achieve with constructive and engaged financing
partners," said John Zito, Apollo Deputy CIO of Credit. "We
continue to have strong conviction in Carvana's strategy and Ernie
Garcia's vision to revolutionize the way consumers buy, sell, and
finance their vehicles."
Carvana also released record-breaking second quarter 2023 financial
results today that can be found on the Company's Investor Relations
website and additional information on its Press website.
Moelis & Company LLC served as exclusive financial advisor and
Kirkland & Ellis LLP served as exclusive legal advisor to the
Company.
PJT Partners LP served as exclusive financial advisor and White &
Case LLP served as exclusive legal advisor to the ad hoc group of
holders of existing unsecured notes.
About Carvana
Founded in 2012 and based in Tempe, Arizona, Carvana Co.(NYSE:
CVNA) -- http://www.carvana.com-- is an e-commerce platform for
buying and selling used cars. Carvana claims to bethe
fastest-growing used automotive retailer in U.S. history, and
provides a 7-day money back guarantee to customers. Customers also
have the option to sell or trade-in their vehicle across all
Carvana locations, including its patented Car Vending Machines, in
more than 300 U.S. markets.
Carvana Co. reported a net loss of $2.89 billion for the year ended
Dec. 31, 2022, compared to a net loss of $287 million for the year
ended Dec. 31, 2021. As of Dec. 31, 2022, the Company had $8.70
billion in total assets, $9.75 billion in total liabilities, and a
total stockholders' deficit of $1.05 billion.
* * *
As reported by TCR on June 8, 2023, S&P Global Ratings raised its
issuer credit rating on Carvana Co. to 'CCC' from 'CC'. S&P said,
"The rating action and 'CCC' rating reflects the expiration and
termination of the exchange offers as well as our view that
liquidity will continue to erode, creating the potential for
another distressed exchange over the next 12 months."
CBS TRUCKING: Taps Charles A. Higgs as Special Litigation Counsel
-----------------------------------------------------------------
CBS Trucking, Inc. seeks approval from the U.S. Bankruptcy Court
for the Southern District of New York to hire the Law Office of
Charles A. Higgs as its special litigation counsel.
The firm's services include:
a. drafting and filing a motion to value the Debtor's real
property;
b. representing the Debtor at hearings on valuation, in
discovery related to the valuation hearing, and at the evidentiary
hearing on valuation; and
c. commencing adversary proceedings for turnover of property
of the estate, to recover amounts for use and occupancy, and
potentially asserting other claims for the benefit of the estate in
adversary proceedings against third parties.
The hourly rates of the firm's counsel and staff are as follows:
Charles A. Higgs, Esq. $400
Paraprofessionals $200
The firm received a pre-bankruptcy retainer of $5,000.
Mr. Higgs, Esq., 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:
Charles A. Higgs, Esq.
The Law Office of Charles A. Higgs
2 Depot Plaza, Ste. 4
Bedford Hills, NY 10507
Telephone: (917) 673-3768
Email: Charles@FreshStartEsq.com
About CBS Trucking
CBS Trucking, Inc. operates in the general freight trucking
industry. The company is based in Newburgh, N.Y.
CBS Trucking sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D.N.Y. Case No. 23-35547) on June 30,
2023, with $448,619 in assets and $1.236 million in liabilities.
Sokol Bala, president, signed the petition.
Judge Cecelia G. Morris oversees the case.
The Debtor tapped the Law Office of James J. Rufo as bankruptcy
counsel and the Law Office of Charles A. Higgs as special
litigation counsel.
CENTRALIA APARTMENTS: Has Deal on Cash Collateral Access
--------------------------------------------------------
Centralia Apartments and Axos Bank advised the U.S. Bankruptcy
Court for the Central District of California, Los Angeles Division,
that they have reached an agreement regarding the Debtor's use of
cash collateral and now desire to memorialize the terms of this
agreement into an agreed order.
Axos Bank holds the first-in-priority deed of trust against the
Debtor's apartment building complex located at 21114-21118 Pioneer
Boulevard in Lakewood, California. The Debtor is current on all of
its payments owed to Axos.
Prior to the Debtor filing for bankruptcy, Michael L. Koenig and
Lauren M. Koenig, who hold a combined 9.986% minority partnership
interest in Centralia Limited, filed a lawsuit in the Superior
Court of the State of California for the County of Los Angeles
against Debtor and various entities, alleging causes of action for
breach of partnership agreements, breach of fiduciary duty,
conversion, declaratory relief, dissolution, breach of contract,
fraud, and dissociation, under Case No. BC 717394. In connection
with the State Court Action, the Superior Court granted a motion
for appointment of receiver. The proposed receiver took the
position that it would collect rents but was not required to make,
and would refuse to make, payments on the loan secured by a
first-in-priority deed of trust against the Property held by Axos
Bank, and the receiver would also refuse to pay, and not pay, the
property taxes and the property insurance. The secured lien held by
Axos against the Property secures a loan of approximately $8
million, and the Property is worth approximately $16 million
according to a recent appraisal. The Debtor is current on the Loan
and has never made a late payment.
The parties agree that the Debtor may use cash collateral through
September 15, 2023. However, the right to use cash collateral will
terminate immediately and automatically upon the occurrence of the
following:
a. The appointment of a chapter 11 trustee for the Debtor;
b. The dismissal or conversion of the Debtor's chapter 11 case
to a chapter 7 case;
c. The written agreement of Axos and Debtor to terminate this
Agreement.
The Debtor reaffirms and acknowledges the loan agreement,
promissory note, deed of trust, and all other loan documents
executed by the Debtor in conjunction with or in relation to Axos'
loan to Debtor of $8.050 million on or about August 13, 2019. The
Debtor further reaffirms and acknowledges that all of its
obligations to Axos, including but not limited to an unpaid
principal balance of $7.7 million as of the petition date, are
absolute, unconditional, and not subject to any dispute or offset
and that the lien granted to Axos thereunder is valid, continuing,
perfected, enforceable, and unavoidable.
The Debtor will use the income generated from the Property to (a)
pay the mortgage and all periodic amounts owed to Axos when such
amounts become due and payable; and (b) use all excess cash
collateral pursuant to the provisions of Title 11 of the U.S. Code.
The Debtor will not use any cash collateral to make any payments to
members, insiders, or affiliates of the Debtor absent written
consent of Axos or court order. Without regard to whether the
Debtor's management company, Proland Management Company, LLC, is an
insider, Axos consents to the Debtor continuing to reimburse
Proland for expenses of operation and fees not to exceed 9.3444%
pursuant to the prepetition management agreement. All reimbursement
and fees will be disclosed in the Debtor's monthly operating
reports.
The equity cushion is more than sufficient to protect Axos'
interest in the Property. However, as additional adequate
protection, Axos will be granted replacement adequate protection
liens on, and security interests in, the assets of the Debtor's
estate.
Axos will receive superpriority administrative expense claims
against the Debtor's estate under section 507(b) of the Bankruptcy
Code to the extent of any diminution in Axos' collateral after the
petition date resulting from the Debtor's use of cash collateral.
A hearing on the matter is set for August 15, 2023 at 10 a.m.
A copy of the motion is available at https://urlcurt.com/u?l=csxisI
from PacerMonitor.com.
About Centralia Apartments
Centralia Apartments is a Single Asset Real Estate as defined in 11
U.S.C. Section 101(51B).
Centralia Apartments filed a petition for relief under Subchapter V
of Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No.
23-13132) on May 20, 2023. In the petition filed by Dennis G.
Gesolowitz, as in-house counsel., the Debtor reported assets and
liabilities between $1 million and $10 million.
The case is overseen by Honorable Bankruptcy Judge Barry Russell.
The Debtor is represented by D Edward Hays, Esq. at Marshack Hays
LLP.
CHALLENGER BRASS: Bid to Use Cash Collateral Denied
---------------------------------------------------
The U.S. Bankruptcy Court for the District of Puerto Rico denied
the motion to use cash collateral filed by Challenger Brass &
Copper Co Inc. for failure to comply with Fed. R. Bank. P. 4001(b)
by failing to file a motion in accordance with Fed. R. Bankr. P.
9014 and accompanied by a proposed form of order.
Further, LBR 4001-2(c) requires that a request for urgent interim
use of cash collateral be presented by an affidavit. The debtor is
directed to file a motion in compliance with national and local
bankruptcy rules on or before July 26, 2023, to be considered by
the court during the August 2, 2023, hearing.
A copy of the order is available at https://urlcurt.com/u?l=whhNKM
from PacerMonitor.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.
CHARISMA MARBLE: Taps Joel M. Aresty as Legal Counsel
-----------------------------------------------------
Charisma Marble, LLC seeks approval from the U.S. Bankruptcy Court
for the Southern District of Florida to employ Joel M. Aresty, P.A.
as its legal counsel.
The Debtor requires legal counsel to:
a. give advice with respect to the powers and duties of the
Debtor and the continuation of its business operations;
b. advise the Debtor with respect to its responsibilities in
complying with the U.S. trustee's Operating Guidelines and
Reporting Requirements and with the rules of the court;
c. prepare legal documents;
d. protect the interest of the Debtor in all matters pending
before the court; and
e. represent the debtors in negotiation with its creditors in
the preparation of a Chapter 11 plan.
The firm will be compensated at $440 per hour and will be
reimbursed for out-of-pocket expenses incurred.
The retainer fee is $5,000.
Joel Aresty, Esq., disclosed in a court filing that his firm is a
"disinterested person" pursuant to Section 101(14) of the
Bankruptcy Code.
The firm can be reached at:
Joel M. Aresty, Esq.
Joel M. Aresty, P.A.
309 1st Ave S
Tierra Verde, FL 33715
Tel: (305) 904-1903
Fax: 1-800-559-1870
Email: Aresty@Mac.com
About Charisma Marble
Charisma Marble, LLC filed a Chapter 11 bankruptcy petition (Bankr.
S.D. Fla. Case No. 23-14749) on June 19, 2023, with as much as $1
million in both assets and liabilities. Judge Scott M. Grossman
oversees the case.
The Debtor is represented by Joel M. Aresty, P.A.
CHECKERS HOLDINGS: Moody's Assigns 'Caa2' CFR, Outlook Stable
-------------------------------------------------------------
Moody's Investors Service assigned a Caa2 Corporate Family Rating
to Checkers Holdings, Inc. following completion of its debt
restructuring. Moody's also assigned to Checker's a Caa2-PD
probability of default rating, a B1 rating on its $25 million
senior secured first-out delayed draw term loan ("delayed draw term
loan") and Caa2 rating on its $75 million senior secured takeback
last-out term loan ("takeback facility"). The ratings outlook is
positive.
The ratings assignments reflect governance considerations including
Checker's comprehensive debt restructuring on June 20, 2023, which
resulted in reducing debt by $215 million and a change in its
private equity ownership. The company is controlled by its lenders
post the transaction.
Assignments:
Issuer: Checkers Holdings, Inc. (NEW)
Corporate Family Rating, Assigned Caa2
Probability of Default Rating, Assigned Caa2-PD
Backed Senior Secured Delayed Draw Term Loan, First-Out, Assigned
B1
Backed Senior Secured Takeback Term Loan, Last-Out, Assigned Caa2
Outlook Actions:
Issuer: Checkers Holdings, Inc. (NEW)
Outlook, Assigned Positive
RATINGS RATIONALE
The Caa2 CFR reflects Checker's historically weak operating
performance as it operates in the highly competitive hamburger
quick service restaurant segment, which has been hampered by
inflation including beef prices as the industry deals with higher
wages and a weakening consumer demographic. Although the company
has reduced funded debt to $85 million, interest coverage remains
weak, and free cash flow generation is limited. Total debt
comprises a $75 million takeback facility due June 2028 and a $25
million of new money that is its delayed draw term loan due June
2027, of which $10 million was drawn at closing. Moody's expects
adjusted gross interest coverage will be approximately 0.9x for the
full year 2023. Adjusted total debt to EBITDA is approximately 5.3x
for the fiscal 1Q23 LTM period. Although Moody's projects leverage
to improve to below 5.0x at year-end 2023, there are significant
risks to improving performance. The newly restructured company is
owned by its former debt holders, thus a track record of prudent
financial policies and a go-forward strategic plan will take time.
The CFR also reflects the company's adequate liquidity with
approximately $15 million of cash and $15 million of availability
on the delayed draw term loan. The company's free cash flow
generation is limited due to continued investment in its store
remodels which is integral to its operating improvement. The
company's cash flow is also supported by its ability to PIK
(payment-in-kind) a portion of its interest expense option to
preserve cash, reducing its total cash interest expense to
approximately $9 million from $14 million.
Checker's still faces headwinds from persistently high inflation in
beef prices and wages, and its ability to further increase prices
on its lower-income demographic locations is uncertain. Further,
the hamburger QSR segment requires high advertising spending and
restaurant investments to remain competitive, and the company's
ability to generate cash flow to support those efforts is limited.
Positive credit consideration is given to the company's off-premise
(drive-thru) focused business model, its high level of brand
awareness, and reasonable scale.
The lenders of the former first lien term loan (due April 2024)
converted to the takeback facility and received 95% of the
reorganized common equity.
The positive outlook reflects improving operating trends following
good early results from the company's store re-images including
positive same-store for the first half of 2023, though traffic
patterns still remain soft. The outlook also reflects Moody's
expectation for continued improvement in operating performance as
well as maintenance of significantly improved credit metrics.
Adequate liquidity is also expected which includes at least
break-even levels of free cash flow to fund needed capital
expenditures.
The B1 rating on the delayed draw term loan reflects its priority
position in the capital structure ahead of the new takeback term
loan. The Caa2 rating on the takeback term loan reflects its
subordinated position to the smaller delayed draw term loan. Both
loans are secured by substantially all assets. The first-out
delayed draw term loan and the last-out term loan have a maximum
Total Net Leverage Ratio financial maintenance covenant. Moody's
expects the company to have ample cushion.
An upgrade would require the demonstration of a track record of
improved operating performance and conservative financial
strategies. An upgrade would also require adequate liquidity
including consistently positive free cash flow generation.
The ratings could be downgraded if operating performance or credit
metrics weaken, liquidity deteriorates, including free cash flow
becomes negative, or financial strategies become more aggressive.
Checkers Holdings, Inc. operates and franchises about 850 hamburger
quick service restaurants (approximately 30% company-operated and
70% franchised locations) under the brand names Checkers and
Rally's Hamburgers across the Southeast and Mid-Atlantic US.
Revenue was about $317 million for fiscal 2022.
The principal methodology used in these ratings was Restaurants
published in August 2021.
CLEAN ENERGY: Issues $556K Promissory Note to Mast Hill
-------------------------------------------------------
Clean Energy Technology, Inc. disclosed in a Form 8-K filed with
the Securities and Exchange Commission that it closed the
transactions contemplated by the Securities Purchase Agreement with
Mast Hill, L.P. dated July 18, 2023, pursuant to which the Company
issued to Mast Hill a $556,000 Convertible Promissory Note, due
July 18, 2024 for a purchase price of $500,400 plus an original
issue discount in the amount of $55,600.00, and an interest rate of
15% per annum.
The principal and interest of the Note may be converted in whole or
in part at any time on or following the issue date, into common
stock of the Company, par value $.001 share, subject to
anti-dilution adjustments and for certain other corporate actions
subject to a beneficial ownership limitation of 4.99% of Mast Hill
and its affiliates. The per share conversion price into which
principal amount and accrued interest may be converted into shares
of Common Stock equals $6.00, subject to adjustment as provided in
the Note. Upon an event of default, the Note will become
immediately payable and the Company shall be required to pay a
default rate of interest of 15% per annum. At anytime prior to an
event of default, the Note may be prepaid by the Company at a 150%
premium. The Note contains customary representations, warranties
and covenants of the Company.
The Securities Purchase Agreement provides customary
representations, warranties and covenants of the Company and Mast
Hill as well as providing Mast Hill with registration rights.
About Clean Energy
Headquartered in Costa Mesa, California, Clean Energy Technologies,
Inc. -- http://www.cetyinc.com-- designs, produces and markets
clean energy products and integrated solutions focused on energy
efficiency and renewables. The Company provides waste heat
recovery solutions, waste to energy solutions, and engineering,
consulting and project management solutions.
Spokane, Washington-based Fruci & Associates II, PLLC, the
Company's auditor since 2015, issued a "going concern"
qualification in its report dated April 17, 2023, citing that the
Company has an accumulated deficit, a working capital deficit and
negative cash flows from operations. These factors, among others,
raise substantial doubt about the Company's ability to continue as
a going concern.
COMPLETION RESOURCES: Case Summary & Five Unsecured Creditors
-------------------------------------------------------------
Debtor: Completion Resources, LLC
115 Oakwood Ln.
Hickory Creek TX 75065
Chapter 11 Petition Date: July 25, 2023
Court: United States Bankruptcy Court
Eastern District of Texas
Case No.: 23-41324
Debtor's Counsel: Howard Marc Spector, Esq.
SPECTOR & COX, PLLC
12770 Coit Road
Suite 850
Dallas TX 75251
Tel: (214) 365-5377
Email: hms7@cornell.edu
Total Assets: $687,636
Total Liabilities: $3,810,400
The petition was signed by Nancy Fuller as member.
A full-text copy of the petition containing, among other items, a
list of the Debtor's five unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/KCMEVPI/Completion_Resources_LLC__txebke-23-41324__0001.0.pdf?mcid=tGE4TAMA
COMUNICADORES GRAFICOS: Lender Seeks to Prohibit Cash Access
------------------------------------------------------------
Resolute FP US Inc. asks the U.S. Bankruptcy Court for the District
of Puerto Rico to prohibit Comunicadores Graficos, Inc. from using
cash collateral.
Prior to the Petition Date, the Debtor entered into various
agreements with Resolute pursuant to which the latter provided
materials to the Debtor.
Prior to the Petition Date, the Debtor defaulted on its obligations
under the Invoices, which defaults were duly notified to the
Debtor. The amount due by Debtor under the Invoices total
$266,445.
Resolute commenced a legal action against the Debtor, which
culminated with the Commonwealth of Puerto Rico Court of First
Instance, Carolina, granting partial summary judgment in favor of
Resolute on April 2, 2019, and requiring the Debtor to pay the
amounts due under the Invoices.
On October 22, 2019, Resolute, Debtor, and Accurate Printers, Inc.
executed the Settlement and Payment Agreement to resolve, among
other things, the Debtor's and Accurate's respective debts to
Resolute, including the Comunicadores Judgment. Further, the Debtor
acknowledged and confirmed in the Settlement Agreement that (i) the
Comunicadores Judgment is payable on demand, is liquidated, and
that it is immediately due and payable to Resolute; (ii) it
reaffirmed and ratified all of the covenants and obligations under
the Invoices and the contracts; (iii) the total amount of the debt
is $324,963, which Debt is jointly and severally liable by both
Debtor and Accurate; (iv) that Debtor is in default with the Debt;
(v) that Debtor and Accurate agreed to a payment plan for full and
complete satisfaction of the Debt, among other covenants; and (vi)
that Debtor and Accurate will grant a voluntary lien in favor of
Resolute over all of their "assets, equipment, and accounts
receivable".
As of the Petition Date, the amounts due by the Debtor under the
Invoices, the Comunicadores Judgment, and the Debt in the
Settlement Agreement total no less than $248,183 as evidenced by
Proof of Claim No. 33.
As of today, the Debtor has not requested an order authorizing the
use of Resolute's cash collateral. Further, Resolute has not
consented to any use of cash collateral by the Debtor.
The Debtor requests that the court prohibit any and all use of the
Cash Collateral and, in addition to such prohibition, that the
Court grant Resolute adequate protection on an emergency basis by:
a. granting a first priority replacement lien on all of the
Debtor's post-petition assets;
b. requiring an accounting of all cash collateral received by or
for the benefit of the Debtor since the Petition Date;
c. requiring that any cash collateral or property of Resolute that
is in the possession, custody or control of the Debtor or any of
the insiders of the Debtor be turned over to Resolute, whether now
existing or hereafter created, within the later of: (i) five days
from date hereof; or (ii) five days of receipt;
d. prohibiting the Debtor from using any of the Resolute's cash
collateral unless otherwise ordered by the Court;
e. granting such other relief that the Court finds necessary and
just; and
f. providing that nothing will prejudice the opportunity for, and
nothing will obligate any party to make, further stipulations
concerning any matter (including but not limited to future use of
cash collateral).
A copy of the motion is available at https://urlcurt.com/u?l=8QhfxI
from PacerMonitor.com.
About Comunicadores Graficos
Comunicadores Graficos Inc. is a Puerto Rico-based company engaged
in printing and related support activities.
Comunicadores Graficos filed its voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bankr. D.P.R. Case No.
23-01064) on April 13, 2023, with $1 million to $10 million in both
assets and liabilities. Juan Rafael Pierantoni Gonzalez, president
of Comunicadores Graficos, signed the petition.
Jesus Enrique Batista Sanchez, Esq. at The Batista Law Group, P.S.C
represents the Debtor as counsel.
Resolute FP US Inc., as lender, is represented by:
Nayuan Zouairabani, Esq.
Victoria Rivera Llorens, Esq.
McConnell Valdes LLC
270 Muñoz Rivera Avenue
Hato Rey, Puerto Rico 00918
Tel: 787-250-5619
Fax: 787-759-9225
Email: nzt@mcvpr.com
vrll@mcvpr.com
CONSUMER ACTION: Court OKs Deal on Cash Collateral Access
---------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California,
Los Angeles Division, authorized Consumer Action Law Group of
Panzarella & Associates, P.C. to use cash collateral on an interim
basis in accordance with its agreement with the U.S. Small Business
Administration.
As previously reported by the Troubled Company Reporter, CALG
requires immediate use of its cash on hand and other income
generated from its work to maintain the day-to-day business
operations and pay employees and vendors on a timely basis.
Although the Debtor does not hold an interest in any real estate,
the SBA is a secured creditor and is subject to a lien consisting
of UCC Financing Statement recorded with the California Secretary
of State.
The Debtor executed an SBA Note with a loan number ending 7401 with
an Effective Date of January 3, 2022. The original loan amount was
$500,000.
Pursuant to the SBA Loan, the Debtor is required to "use all the
proceeds of this Loan solely as working capital to alleviate
economic injury caused by disaster occurring in the month of
January 31, 2020, and continuing thereafter for loans more than
$25,000 to pay Uniform Commercial Code (UCC) lien filing fees and
third-party UCC handling charge of $100 which will be deducted from
the Loan amount stated above.
The terms of the SBA Loan require the Debtor to make installment
payments, including principal and interest, of $2,476 monthly. As
of the Petition Date, the amount due on the SBA Loan is
approximately $318,000.
As evidenced by the Security Agreement and the subsequently Amended
Security Agreement executed on January 3, 2022 and a valid UCC-1
filing on May 27, 2020 as file number 207781895784, the SBA Loan is
secured by all tangible and intangible personal property.
The SBA consents to the Debtor's use of its cash collateral on an
interim basis through September 1, 2023 and CALG's use of cash
collateral is conditioned upon adequate protection being provided
to the SBA.
The SBA's primary form of adequate protection will be the Debtor's
use of cash collateral to preserve the going concern value of
CALG's assets and solely in accordance with the budget.
Additionally, CALG will be granting replacement liens and super
priority claims as adequate protection, which is commonplace.
The Debtor will remit adequate protection payments to the SBA in
the amounts and terms as set forth in the applicable SBA Loan
documents, with the first payment to be paid on or before July 1,
2023 in the amount of $2,476, and continuing until further order of
the Court regarding interim and/or final use of cash collateral, or
the entry of an order confirming the Debtor's Chapter 11 plan of
reorganization, whichever occurs first.
The SBA will be entitled to a super-priority claim over the life of
the Debtor's bankruptcy case, pursuant to 11 U.S.C. sections
503(b), 507(a)(2) and 507(b), which claim will be limited to any
diminution in the value of the SBA's collateral, pursuant to the
SBA Loan, as a result of the Debtor's use of cash collateral on a
post-petition basis.
A copy of the order is available at https://urlcurt.com/u?l=FGwku9
from PacerMonitor.com.
About Consumer Action Law Group
of Panzarella & Associates, P.C.
Consumer Action Law Group of Panzarella & Associates, P.C. provides
legal advice with respect to auto claims and lemon law and, on a
more limited basis, bankruptcy law and Fair Credit Reporting
claims.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. C.D. Cal. Case No. 23-13906) on June 23,
2023. In the petition signed by Charles Panzarella, president, the
Debtor disclosed up to $500,000 in assets and up to $10 million in
liabilities.
Judge Julia W. Brand oversees the case.
Andy C. Warshaw, Esq., at Financial Relief Law Center, APC,
represents the Debtor as legal counsel.
DIAMOND SPORTS: Bally Sports Okayed to Drop Diamondbacks TV Deal
----------------------------------------------------------------
Jonathan Randles of Bloomberg Law reports that the bankrupt owner
of the Bally Sports brand of local sports television stations was
authorized to end broadcasts of Arizona Diamondbacks games starting
with tonight's contest against the Atlanta Braves which will be
streamed by Major League Baseball.
Diamond Sports Group lawyer Andrew Goldman said Tuesday, July 18,
2023, during a court hearing that its broadcast deal with the team
was unprofitable and that attempts to amend the agreement failed
because proposed changes wouldn't be supported by MLB Commissioner
Robert D. Manfred. Goldman said Diamond had sought new digital
rights in talks with the Diamondbacks.
About Diamond Sports Group
Diamond Sports Group, LLC operates as a sports marketing company.
It offers seminars, combine, speed and agility assessments,
recruiting tools, and online training sessions for sports including
football, baseball, soccer, and basketball. Diamond Sports is an
unconsolidated and independently run subsidiary of Sinclair
Broadcast Group.
Diamond Sports Group and 29 of its affiliates sought relief under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Tex. Lead Case
No. 23-90116) on March 14, 2023. Diamond said it plans to
restructure its balance sheet while continuing to broadcast local
games on its portfolio of 19 networks under the Bally Sports brand
across the U.S.
In the petition filed by David F. DeVoe, Jr., as chief financial
officer and chief operating officer, Diamond Sports Group listed $1
billion to $10 billion in both assets and liabilities.
Judge Christopher M. Lopez oversees the cases.
The Debtors tapped Paul, Weiss, Rifkind, Wharton & Garrison, LLP
and Porter Hedges, LLP as bankruptcy counsels; Wilmer Cutler
Pickering Hale, Dorr, LLP and Quinn Emanuel Urquhart & Sullivan,
LLP as special counsels; AlixPartners, LLP as financial advisor;
Moelis& Company, LLC and LionTree Advisors, LLC as investment
bankers; Deloitte Tax, LLP as tax advisor; Deloitte Financial
Advisory Services, LLP as accountant; and Deloitte Consulting, LLP
as consultant. Kroll Restructuring Administration, LLC is the
claims agent.
The U.S. Trustee for Region 7 appointed an official committee to
represent unsecured creditors in the Debtors' Chapter 11 cases.
The committee tapped Akin Gump Strauss Hauer& Feld LLP as counsel;
FTI Consulting, Inc., as financial advisor; and HoulihanLokey
Capital, Inc. as investment banker.
DTC CABOOSE: Seeks Court Approval to Hire Geva Accounting
---------------------------------------------------------
DTC Caboose Inc. seeks approval from the U.S. Bankruptcy Court for
the Northern District of New York to employ Geva Accounting to
provide accounting services during the pendency of its Chapter 11
case.
The firm will be paid based upon its normal and usual hourly
billing rates and will be reimbursed for work-related expenses
incurred.
As disclosed in court filings, Geva Accounting is a "disinterested
person" pursuant to Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Geva Accounting
17 Industrial Pkwy
Gloversville, NY 12078
Tel: (518) 725-1313
About DTC Caboose
DTC Caboose, Inc. is a New York State corporation formed on March
17, 2004.
DTC Caboose filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. N.D.N.Y. Case No. 23-60330) on May 11,
2023, with as much as $50,000 in assets and $100,001 to $500,000 in
liabilities. Francis Brennan, Esq., at Nolan Heller Kauffman, LLP
has been appointed as Subchapter V trustee.
Judge Patrick G. Radel oversees the case.
The Debtor tapped Maxsen D. Champion, Esq., a practicing attorney
in Fayetteville, N.Y., as bankruptcy counsel, and Geva Accounting
as accountant.
ERBO PROPERTIES: Taps Avinoam Y. Rosenfeld as Special Counsel
-------------------------------------------------------------
Erbo Properties, LLC and its affiliates seek approval from the U.S.
Bankruptcy Court for the Southern District of New York to employ
the Law Office of Avinoam Y. Rosenfeld as special counsel.
On April 18, 541 W 21 SME, LLC, a creditor of Gold Mezz, LLC, filed
a motion seeking relief from the automatic stay to permit it to
exercise its rights under a Membership Interests Pledge and
Security Agreement under which Gold Mezz pledged and assigned to
SME its rights in its membership interest in KOVA 521, LLC. On June
7, the bankruptcy court entered an order granting in part and
denying in part the motion.
The Debtor needs the firm's legal assistance in connection with the
June 7 order and the pledged interest.
The Law Office of Avinoam Y. Rosenfeld will be paid at these
rates:
Attorney $350 to 450 per hour
Paralegal $200 per hour
The firm received a retainer in the amount of $35,000.
Avinoam Rosenfeld, Esq., a partner at the Law Office of Avinoam Y.
Rosenfeld, disclosed in a court filing that the firm is a
"disinterested person" pursuant to Section 101(14) of the
Bankruptcy Code.
The firm can be reached at:
Avinoam Y. Rosenfeld, Esq.
Law Office of Avinoam Y. Rosenfeld
156 Harborview South
Lawrence, NY 11559
Tel: (516) 547-1717
About ERBO Properties
ERBO Properties, LLC is a single asset real estate (as defined in
11 U.S.C. Sec. 101(51B)). It is the owner of a property located at
541 West 21st St., New York, valued at $80 million.
ERBO Properties and affiliates, Gold Mezz, LLC and Kova 521, LLC,
sought Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Lead Case
No. 23-10210) on Feb. 13, 2023. In the petition filed by Erno
Bodek, manager, ERBO reported $50 million to $100 million in both
assets and liabilities.
Judge Lisa G. Beckerman oversees the cases.
The Debtors tapped the Law Office of Isaac Nutovic as bankruptcy
counsel and the Law Office of Avinoam Y. Rosenfeld as special
counsel.
ERBO PROPERTIES: Taps Law Office of Isaac Nutovic as Counsel
------------------------------------------------------------
Erbo Properties, LLC and its affiliates seek approval from the U.S.
Bankruptcy Court for the Southern District of New York to employ
the Law Office of Isaac Nutovic to substitute for Tarter Krinsky &
Drogin, LLP.
The firm's services include:
a. providing the Debtors with legal advice regarding their
powers and duties under the Bankruptcy Code;
b. negotiating with creditors in furtherance of a Chapter 11
plan and taking the necessary legal steps in order to consummate
the plan;
c. preparing legal papers and appearing before the bankruptcy
court; and
d. other necessary legal services.
The firm will be paid at these rates:
Isaac Nutovic $600 per hour
Colleen Dalton $450 per hour
Paralegals $250 per hour
In addition, the firm will receive reimbursement for out-of-pocket
expenses incurred.
Isaac Nutovic, Esq., disclosed in a court filing that his firm is a
"disinterested person" pursuant to Section 101(14) of the
Bankruptcy Code.
In response to the request for additional information set forth in
paragraph D.1. of the Appendix B Guidelines, Mr. Nutovic disclosed
the following:
Question: Did you agree to any variations from, or
alternatives to, your standard or customary billing arrangements
for this engagement?
Response: No.
Question: Do any of the professionals included in this
engagement vary their rate based on the geographic location of the
bankruptcy case?
Response: No.
Question: If you represented the client in the 12 months
prepetition, disclose your billing rates and material financial
terms for the prepetition engagement, including any adjustments
during the 12 months prepetition. If your billing rates and
material financial terms have changed post-petition, explain the
difference and the reasons for the difference.
Response: The firm's rates provided to the Debtors prepetition
were the same as the rates agreed to for the Chapter 11 work.
Question: Has your client approved your prospective budget and
staffing plan, and, if so, for what budget period?
Response: No budget has been prepared due to the highly
contingent nature of the work expected to be done. In the event the
Debtors' Chapter 11 cases unfold in a more predictable direction,
the firm will provide the Debtors with a budget and staffing plan
for this retention, which it will review with the Debtors.
The firm can be reached at:
Isaac Nutovic, Esq.
Law Office of Isaac Nutovic
261 Madison Avenue, 26th Floor
New York, New York 10016
Telephone: (917) 922-7936
About ERBO Properties
ERBO Properties, LLC is a single asset real estate (as defined in
11 U.S.C. Sec. 101(51B)). It is the owner of a property located at
541 West 21st St., New York, valued at $80 million.
ERBO Properties and affiliates, Gold Mezz, LLC and Kova 521, LLC,
sought Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Lead Case
No. 23-10210) on Feb. 13, 2023. In the petition filed by Erno
Bodek, manager, ERBO reported $50 million to $100 million in both
assets and liabilities.
Judge Lisa G. Beckerman oversees the cases.
The Debtors tapped the Law Office of Isaac Nutovic as bankruptcy
counsel and the Law Office of Avinoam Y. Rosenfeld as special
counsel.
EVOKE PHARMA: Granted Until Nov. 20 to Regain Nasdaq Compliance
---------------------------------------------------------------
The Listing Qualifications Department of The Nasdaq Stock Market
LLC notified Evoke Pharma, Inc. that it has granted the Company an
extension until Nov. 20, 2023 to regain compliance.
Under the terms of the extension, the Company must provide to the
Nasdaq staff a publicly available report that evidences such
compliance and otherwise comply with conditions included in the
extension notice. If the Company fails to evidence compliance upon
filing the Company's Annual Report on Form 10-K for the year ended
Dec. 31, 2023 with the Securities and Exchange Commission and
Nasdaq, the Company may be subject to delisting from the Nasdaq
Capital Market. In the event the Company does not satisfy the
terms of the extension, the Nasdaq staff will provide written
notification to the Company that its securities will be delisted.
At that time, the Company may appeal the Nasdaq staff's
determination to a Hearings Panel.
There can be no assurance that the Company will be successful in
implementing its plan to regain compliance with the Minimum
Stockholders' Equity Requirement or will otherwise be in compliance
with other Nasdaq listing rules.
On May 24, 2023, Evoke Pharma received a written notice from Nasdaq
indicating that, based on the Company's stockholders' equity of
$2.1 million as of March 31, 2023, as reported in the Company's
Quarterly Report on Form 10-Q for the quarter ended March 31, 2023,
it was not in compliance with the minimum stockholders' equity
requirement for continued listing on the Nasdaq Capital Market
under Nasdaq Listing Rule 5550(b)(1), which requires listed
companies to maintain stockholders' equity of at least $2.5
million. As required by Nasdaq, the Company submitted its plan to
regain compliance with the Minimum Stockholders' Equity Requirement
on July 7, 2023.
About Evoke Pharma
Headquartered in Solana Beach, California, Evoke Pharma, Inc. --
http://www.evokepharma.com-- is a specialty pharmaceutical company
focused primarily on the development of drugs to treat GI disorders
and diseases. The Company is developing Gimoti, a nasal spray
formulation of metoclopramide, for the relief of symptoms
associated with acute and recurrent diabetic gastroparesis in adult
women.
Evoke Pharma reported a net loss of $8.22 million for the year
ended Dec. 31, 2022, compared to a net loss of $8.54 million for
the year ended Dec. 31, 2021.
San Diego, California-based BDO USA, LLP, the Company's auditor
since 2014, issued a "going concern" qualification in its report
dated March 21, 2023, citing that the Company has suffered
recurring losses and negative cash flows from operations since
inception. These factors raise substantial doubt about the
Company's ability to continue as a going concern.
FUSION GALAXY: Case Summary & 12 Unsecured Creditors
----------------------------------------------------
Debtor: Fusion Galaxy LLC
First Location
17031 W Bell Rd Ste 104
Surprise, AZ 85374
Chapter 11 Petition Date: July 26, 2023
Court: United States Bankruptcy Court
District of Arizona
Case No.: 23-05010
Judge: Hon. Madeleine C Wanslee
Debtor's Counsel: D. Lamar Hawkins, Esq.
GUIDANT LAW, PLC
402 E. Southern Ave
Tempe, AZ 85282
Tel: 602-888-9229
Email: lamar@guidant.law
Total Assets: $342,116
Total Liabilities: $1,686,283
The petition was signed by Robert Lyle Agnew as manager.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 12 unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/52KGLPI/FUSION_GALAXY_LLC__azbke-23-05010__0001.0.pdf?mcid=tGE4TAMA
GENERATION BRIDGE: Moody's Rates New $950MM Secured Loans 'Ba2'
---------------------------------------------------------------
Moody's Investors Service has assigned a Ba2 rating to Generation
Bridge Northeast, LLC's ("GB NE", "Borrower" or "Project") proposed
$950 million senior secured credit facilities, made up of a $850
million term loan B due in 2029 and a $100 million revolving credit
facility due in 2028. The rating outlook is stable.
Proceeds from the financing will be utilized to repay Generation
Bridge II, LLC's ("GB II") outstanding senior secured credit
facilities, make a distribution to the Sponsors and pay transaction
related fees and expenses. Moody's intends to withdraw the Ba2
rating on GB II's existing three credit facilities upon the closing
of GB NE's new credit facilities.
Assignments:
Issuer: Generation Bridge Northeast, LLC
Senior Secured Term Loan B, Assigned Ba2
Senior Secured Bank Revolving Credit Facility, Assigned Ba2
Outlook Actions:
Issuer: Generation Bridge Northeast, LLC
Outlook, Assigned Stable
RATINGS RATIONALE
The Ba2 rating reflects the issuer's anticipated robust degree of
contracted cash flow anchored by the tolling agreement with NRG
Energy, Inc. (Ba1 stable) for Arthur Kill Generating Station's
(Arthur Kill) entire capacity and energy through April 2025 and
Bridgeport Harbor 5 (BH5)'s cleared capacity revenue through 2026
via a 7-year inflation-protected capacity price lock at $9.23 per
kilowatt-month for 2023-24 planning year, which together
contributes to a high degree of certainty around GB NE's near-term
cash flows. Under Moody's base case, Moody's estimate GB NE's
contracted revenues represent approximately 45% and 26% of gross
margin in 2024 and 2025, respectively. These numbers also include
its other assets in ISO-NE which have cleared their capacity into
the forward capacity auctions through May 2027. The Ba2 rating also
considers the higher capacity pricing environment within NY-ISO in
the near term that should result in very strong financial metrics
and considerable debt reduction through 2026.
The Ba2 rating, however, is limited by GB NE's meaningful
dependence on more volatile cash flows that are expected to come
from the sale of merchant capacity and energy, especially after the
termination of Arthur Kill's tolling agreement in 2025, coupled
with a high degree of uncertainty around capacity pricing beyond
2026. The pricing uncertainty in NYISO is driven by potential new
entrants into Zone J and the impact the new entrants may have on
capacity parameters and pricing. Potential new entrants include the
Champlain Hudson Power Express, a high-voltage direct current
(HVDC) power cable project linking the Quebec area to Astoria,
Queens and various offshore wind projects.
The rating also considers the generally competitive profile of GB
NE's portfolio of generating assets, with a combination of
efficient CCGTs and vintage peaking facilities. GB NE's newest
asset is BH5, a 500 megawatt (MW) dual-fuel combined cycle facility
commissioned in 2019 with a highly efficient 6,600 btu/kwh heat
rate and recent capacity factors of around 80%. BH5 has a firm gas
transportation agreement with Southern Connecticut Gas Company (A3
stable) to source natural gas from the Iroquois Zone 2 pipeline,
and also includes the storage of fuel oil, increasing winter
reliability. Another asset, Bethlehem Energy Center ("BEC"), is a
877MW 2005-vintage combined cycle gas turbine which has operated at
a 63% capacity factor on average from 2019 through 2022 and at a
6,867 heat rate. BEC benefits from a diversified gas supply with
access to both the Dominion Energy pipeline and the Tennessee gas
pipeline. The connection to Dominion provides the ability to source
low-priced Marcellus gas creating a substantial advantage versus
other generators in the region that are limited to higher priced
pipelines. GB NE's load following generator, Arthur Kill, is a 872
MW natural gas fired facility which is deemed as critical to NYC
grid reliability. GB NE also includes one of the largest NYISO Rest
of State generators, Oswego, a 1.6 GW vintage steam turbine with
peaking dispatch profile located along the south shore of Lake
Ontario in Western New York. GB NE's remaining approximately 1,212
MW (or 24% of the portfolio's generating capacity) are peaking
assets located in ISO-NE. Capacity factors for these peaking assets
have consistently been below 5% and their primary source of revenue
is derived from the sale of capacity.
Overall, Moody's base case incorporates more conservative capacity
price, energy margins, and expense assumptions than the Sponsor's
base case and relies more heavily on GB NE's historical average
energy margins as a proxy for prospective results owing to the
volatile performance of capacity prices and energy margins.
Capacity pricing assumptions for NYISO Zone J and Rest of State in
the near term remains elevated driven by the onset of the New York
State peaker rule compliance date. Based on these assumptions,
Moody's project GB NE's cash from operations (CFO) to adjusted debt
to range from 25 to 40%, and debt service coverage ratio (DSCR) to
range between 3.0x to 4.9x during the three-year period 2024-2026
leading to an approximate $380 million reduction in the term loan
balance by year-end 2026.
In light of the possibility of new capacity entrants to Zone J in
2026 and beyond, Moody's medium-term capacity pricing forecast
assumes a decline in pricing levels and financial performance
beginning late 2026. Assuming capacity prices that are more in line
with historical averages, Moody's forecast suggests a material
decline in GB NE's financial performance and debt reduction
resulting in roughly $396 million (or 47%) of debt outstanding at
the final maturity in 2029. The anticipated decline in credit
metrics beyond 2026 and the anticipated remaining debt balance are
credit considerations reflected in the Ba2 rating.
STRUCTURAL CONSIDERATIONS
The lenders will benefit from traditional project financing
features including a pledge of the Sponsor's ownership interests in
the plants, a trustee administered cash flow waterfall of accounts,
and a six-month debt service reserve that will be provided in the
form of a letter of credit. There will be additional liquidity from
a $100 million revolving credit facility. There will be a quarterly
mandatory cash sweep equal to the greater of 75% excess cash flow
(which steps down to 50% if Leverage Ratio is equal or below 2.5x)
or 100% to a specified Target Debt balance, and a 1% mandatory
amortization. The transaction includes asset sales limitation with
prohibition on the sale of Arthur Kill, BEC and BH5. Also, the
collateral package includes a first lien pledge on all of GB NE's
assets and stock, provided that in the case of BEC, Arthur Kill,
and Oswego, the mortgage amount will not exceed $100 million, $75
million and $25 million, respectively. As such, Moody's views
claims above these values relative to these assets are considered
unsecured claims, which is a structural weakness and a
consideration in the rating outcome. The equity pledge in the
subsidiaries that hold these assets is uncapped and secured up to
the full amount of the loan. The structure includes a $25 million
cap of permitted tax distributions to the Sponsor before the excess
cash flow sweep payment.
OUTLOOK
The stable outlook reflects GB NE's capital structure that
positions the borrower reasonably well to withstand the volatility
associated with merchant capacity and energy margins particularly
in the early years of the transaction. The stable outlook reflects
Moody's expectation that the borrower will generate strong
consolidated financial metrics with CFO to Debt between 25% to 40%
and consolidated DSCR between 3.0x to 4.9x over the next three
years.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The rating could be upgraded should GB NE repay substantially
greater debt than is incorporated in Moody's case, if GB NE manages
to lock-in contracted revenues beyond 2026 at similar levels as the
prior years, and if capacity prices in NYISO do not materially
decline beginning in 2026 as Moody's anticipate, leading GB NE to
continue to produce very strong credit metrics, meaningful excess
cash flow and associated debt reduction.
The rating could be downgraded should GB NE not be able to reduce
debt at the levels incorporated in Moody's case. The rating could
face downward pressure if GB NE plants were to experience prolonged
operational issues or significantly increased expenses or if market
conditions were to weaken such that GB NE's cash flow generating
ability became materially impacted leading to deteriorating credit
metrics. The rating could be downgraded if the borrower's
consolidated DSCR drops below 2.5x or consolidated CFO to Debt
approaches 15% for an extended period.
PROFILE
Generation Bridge Northeast, LLC is a holding company created to
indirectly hold 100% interests of eight power generation facilities
located in New York and Connecticut. This SPV was created to
consolidate two portfolio companies, Generation Bridge, LLC ("GB
I") and Generation Bridge II ("GB II") following the sale of GB I's
586 MW CCGT Sunrise facility in California for $525 million. GB NE
will include all GB I assets located in the northeast region, all
of GB II generating assets, and one peaking plant in Uncasville,
CT, Montville Power. GB NE will be one of the largest power
portfolios in the region, representing approximately 5GW of
generation capacity
GB NE's anchor assets are the two gas-fired combined cycle
facilities, the 877 megawatt (MW) Bethlehem Energy Center ("BEC")
located in Glenmont, NY within NY-ISO Zone F, and the 500 MW
Bridgeport Harbor 5 (BH5) located in Bridgeport, CT within ISO-NE,
and Arthur Kill Generating Station (Arthur Kill), a 873-MW
gas-fired power station located in Staten Island, NY within the
premium NYISO Zone J power market. Collectively, these plants
represent approximately 45% of GB NE's generating capacity and
account for approximately 76% of GB NE's pro-forma EBITDA from 2020
through 2022.
The principal methodology used in these ratings was Power
Generation Projects published in June 2023.
GENERATION BRIDGE: S&P Assigns Prelim 'BB' Rating on Term Loan B
----------------------------------------------------------------
S&P Global Ratings assigned its preliminary 'BB' rating to
Generation Bridge Northeast LLC's (GBNE) $850 million proposed
senior secured term loan B (TLB). The recovery rating is '1'.
ArcLight Capital Partners LLC (ArcLight or the sponsor) is
consolidating its two portfolio companies, Generation Bridge LLC
(GB1), and Generation Bridge II LLC (GBII), into a single entity,
Generation Bridge Northeast LLC (GBNE or the project).
GBNE owns a portfolio of eight assets with a total net capacity of
about 5.1 GW across NYISO Zone J (Arthur Kill [873 MW]), NYISO ROS
(Bethlehem [877 MW], and Oswego [1,635 MW]); and ISONE (Bridgeport
[500 MW], New Haven Steam [437 MW], Montville [486 MW], CT Jets
[169 MW], and Devon [166 MW]). The project is wholly owned by
affiliates of ArcLight, and managed by Eastern Generation.
-- A degree of cash flow visibility over the next few years via a
tolling agreement at Arthur Kill, capacity lock at Bridgeport,
existing energy hedges, and generally cleared capacity in ISONE
-- Ownership of two highly competitive and performing combined
cycle natural gas-fired power plants (CCGTs), Bethlehem and
Bridgeport, which are the second-most-efficient facilities in their
respective states
-- Multi-asset and portfolio nature of the project that provides a
key differentiation compared with single-asset facilities due to
operational redundancy that mitigates against potential event
risks
-- Dual-fuel capabilities at the ISONE fleet that provides added
flexibility during extreme weather events
-- Strong collateral coverage arising out of relatively
conservative debt sizing ($167/kilowatt [kW])
-- Exposure to both short-term market swings (to the extent
unmitigated), as well as long-term secular trends in the power
industry. Power prices are volatile and are a function of a variety
of uncontrollable factors, such as fuel (coal, natural gas, etc.)
that is on the margin, its cost, changes in energy demand and
supply, emission costs, transmission constraints, and weather
conditions. Over the longer term, power prices are influenced by
broader factors, such as policy and regulation, electrification
intensity, renewable penetration, and energy efficiency
-- Heavy reliance on capacity remuneration, which limits GBNE's
ability to weather prolonged periods of weaker capacity pricing
-- Energy transition is a tangible, although long-dated risk
factor, given the operating profile and competitive characteristics
of the majority of the portfolio
-- Like other projects financed with TLB structures, debt
repayment is primarily tied to cash flow sweeps, which are
dependent on market conditions and financial performance of the
project through TLB life.
The project's revenues represent a mix of cash flows from multiple
assets and three distinctive markets. GBNE comprises a sizable
portfolio that will be diversified from an asset (eight
facilities), technology (mix of CCGTs and peakers), and
geographical standpoint (NYISO Zone J, NYISO ROS, and ISONE). This
provides a key differentiation compared with single-asset projects
that rely primarily on a single fuel and market for cash flow
generation. S&P said, "We believe that this attribute provides a
strong hedge against idiosyncratic risks associated with a certain
market (such as regulatory changes, weather, or fuel shortages), or
a particular asset (technical issues or equipment failures).
Diversification also provides operational flexibility. For example,
both of GBNE's CCGTs, Bethlehem and Bridgeport, which we expect to
operate at high capacity factors (60%-80%), are backstopped by
peaking facilities in their respective ISOs. Therefore, if the
CCGTs were to experience an operational disruption, especially
during hedged periods, the peaking facilities can provide backup
generation and limit potential losses. We reflect GBNE's
diversification advantage in our analysis of the project's
operating risk with a positive performance-redundancy assessment."
There is some cash flow visibility over the next few years. GBNE is
at its core a merchant portfolio; however, the project also
benefits from elements that provide some cash flow predictability
to its operations over the next three years.
Arthur Kill, which is GBNE's NYISO Zone J asset, is operating under
a tolling agreement with NRG Energy Inc. (NRG) until April 30,
2025. Under the agreement, Arthur Kill receives a fixed capacity
payment from NRG for making its facility available. Arthur Kill
also retains partial upside to NYISO Zone J capacity prices beyond
the tolling price via a revenue-sharing mechanism. S&P said, "At
only the tolling strike price (that is, excluding the impact of
upside sharing), we expect the contract to provide GBNE about $75
million of annual stable cash flow over the next two years. In
addition, given our projections of capacity pricing for NYISO Zone
J, we also estimate Arthur Kill will generate excess cash flows
(revenues in excess of the tolling strike price) under the
revenue-sharing construct."
Bridgeport, GBNE's youngest asset (commissioned in 2019), has a
seven-year capacity lock at about $9.75/kilowatt (kW)-month until
May 2026, which is considerably above current capacity prices in
ISONE, and provides the project with further stable revenues until
the end of its term. The latest ISONE capacity auction cleared
capacity at $2.59/kW-month for the 2026-2027 delivery period, and
the average cleared capacity price in ISONE during Bridgeport's
capacity lock period is about $2.75/kW-month, or 70% lower than the
asset's capacity lock price. This translates into more than $100
million of excess cash flow (relative to generally cleared capacity
prices) for Bridgeport through May 2026.
Capacity prices in ISONE, which represents about 33% of GBNE's
portfolio (24% excluding Bridgeport), have cleared until May 2027.
This provides further revenue visibility to the project over the
cleared period.
GBNE has executed clean spark spread hedges at both Bethlehem and
Bridgeport, for volumes between 2023-2025. These hedges have been
placed at attractive levels, and we estimate their cash flow
contribution to the project, provided the plants operate as normal
during the hedged period, will total almost $120 million through
2025.
Combined cycle plants owned by GBNE have performed very strongly.
Bridgeport and Bethlehem, which together represent 27% of GBNE's
capacity, are the second-most-efficient plants in their respective
ISOs. Bridgeport has operated at high capacity factors (about 80%)
since it was commissioned in 2019. The realized clean spark spread
for the facility during 2022 was about $17 per megawatt-hour
(/MWh). Similarly, Bethlehem has also operated at reasonable
capacity factors in the past five years, averaging at about 64%,
and the realized clean spark spread for the asset during 2022 was
$26/MWh. The profitability of both assets represented a
considerable overperformance compared with their budgets, which
resulted in GBII exceeding its EBITDA forecast by more than 100%
during 2022, almost all of which was spurred by outsize margins at
the CCGTs.
Given their highly efficient nature and operating record to date,
S&P believes that Bridgeport and Bethlehem are well positioned to
capitalize on tight market conditions and strong plant economics,
as and when it occurs in the future.
Dispatchable generation is getting a renewed focus due to its
flexibility to address fluctuations in power demand. Although
renewable expansion and a progressively decarbonizing grid remain
an inevitable reality, the role and place of dispatchable
generation in the energy transition process is also taking on
increased relevance. Extreme weather conditions, demand growth from
electrification, and continued retirement of coal have led policy
makers and industry experts to rethink the position and criticality
of dispatchable generation, which provides a firm source of power,
when needed. Although renewable generation is "greening" the
overall power supply as it increases considerably faster than
thermal generation, this evolution has come at the expense of
reliability, which remains an unsolved aspect of this transition.
In California, which has seen heavy entry of solar generation
capacity over the past few years, although without long-duration
energy storage solutions, peak demand has shifted to evening hours,
when solar is ineffective, and the grid relies materially on
conventional power to support demand. At the same time, global
warming and climate changes are also affecting hydro output, which
has historically represented 15% of total produced power in the
state, although that number has dropped notably dropped over past
three years. Heat waves are also a more frequent occurrence, and
have disrupted transmission lines, and affected the performance of
aged plants. A combination of these factors has led the state to
take countermeasures, which not only include expedited procurement
of long-duration batteries and other forms of firmer renewable
generation sources (such as geothermal), but also delayed the
retirement of thermal units, including several gas-fired plants,
and the state's last remaining nuclear plant (Diablo Canyon).
Texas, which is effectively an energy island given its lack of
interconnection with the rest of the country, has made certain
reforms after the winter storm event in February 2021 to address
scarcity pricing in an effort to attract and maintain investment in
thermal generation, as its grid becomes highly complex and resource
dependent. ISONE, where GBNE has almost 33% of its capacity, has
established the Inventoried Energy Program (IEP), which is intended
to mitigate reliability concerns and fuel security risks during the
winter months. The program will compensate eligible generators for
maintaining up to three days of fuel on-site, which can be used to
produce energy at ISONE's direction. Based on S&P's discussions
with GBNE's management team, we understand that all of the
project's assets have the capability to participate in this
program.
Lack of material energy revenues exposes the project to potential
revenue shortfall risk. Except for Bridgeport and Bethlehem, all of
GBNE's assets operate in the 10,000 British thermal unit per
kilowatt hour (Btu/kWh) to 17,000 Btu/kWh heat rate range. Given
their high heat rates, these facilities fall toward the very end of
the dispatch curve, and therefore operate as peaking assets with
minimal dispatch possibilities. While capacity payments provide
compensation for their operations, lack of energy revenues limits
their ability to weather periods of weak capacity pricing, exposing
them to revenue shortfall risk if capacity prices remain depressed
for a prolonged period. For example, capacity prices in NYISO Zone
J were very low ($5.00/kW-month-$5.50/kW-month) for two consecutive
years, 2021 and 2022, largely due to pandemic-related demand
destruction and incremental temporary supply from ConEd's series
reactor bypass. Similarly, the Pennsylvania-New Jersey-Maryland
(PJM) interconnection, an unrelated market to GBNE but a
significant merchant market in the U.S. given its geographic span,
is also experiencing multiyear and historically low capacity prices
due to complex regulations and price determination mechanisms. In
S&P's experience, generators that have had the ability to dispatch
power (in addition to selling capacity), such as CCGTs and
mid-merit plants, have been far more resilient during downturn
events than those that are solely reliant on capacity cash flows,
such as peakers.
S&P forecasts capacity revenues will represent at least two-thirds
of GBNE's revenues through its life.
Energy transition is a tangible, although a long-dated, risk factor
for the project. Both NYISO and ISONE, the operating markets for
GBNE, have ambitious clean energy goals. New York, where almost 70%
of GBNE's capacity is located, is targeting 70% carbon-free
electricity by 2030 and 100% by 2040. Additional goals include 9 GW
of offshore wind capacity by 2035, 3 GW of energy storage capacity
by 2030, and 6 GW of distributed solar capacity by 2025. To achieve
these goals, NYISO has projects underway, which have commissioning
dates through the end of this decade. These include two offshore
wind projects: Empire Wind (800 MW), which is aimed to begin
construction soon (COD: 2026-27), and Sunrise Wind (880 MW), which
is targeted to begin construction in 2024-2025 and achieve
completion in 2027. New York is also developing two transmission
lines, Champlain Hudson Power Express (CHPE) and Clean Path New
York (CPNY), which are aiming to bring renewable power to
load-concentrated zones of the state. Cumulatively, these
transmission projects represent 2,300 MW of capacity, although CHPE
is expected to be a summer-only resource.
Although these large-scale renewable development goals remain
intact and unchanged from when announced, practical realities are
affecting their progress and execution. Offshore wind, in
particular, which has already been one of the most expensive means
of producing clean energy due to its very high capital costs, is
facing increasing development headwinds due to inflation,
supply-chain bottlenecks, and substantially higher interest rates.
Soaring materials costs, particularly for steel, have forced
turbine makers to raise prices, and costs related other key
services, such as specialized vessels that are used to install the
turbines, have increased as well. Elevated interest rates are
further compounding the impact of these factors due to expectations
of much higher debt service cost during construction and
operations. In an effort to preserve project economics, developers
are seeking contract renegotiations, which if unsuccessful, could
lead to contract cancellations or outright project exits.
S&P said, "Given these development hurdles, we are skeptical that
the renewable targets established by NYISO and ISONE can be
achieved within the desired timelines. However, we also think that
there is reasonable likelihood that the projects under development
will ultimately be built by the end of this decade due to
policy-level support and strong momentum around environmental,
social, and governance investing. Given the largely peaking nature
of GBNE's portfolio, we believe this poses a tangible, although a
long-dated risk to the project, as renewable penetration, and
potentially adverse regulations (increased carbon pricing or
emission standards), will pressure the competitiveness and economic
viability of GBNE's inefficient assets."
New York City is facing a potential transmission shortfall
situation due to peaker retirements and recovering power demand. In
its most recently published short-term reliability assessment
report, NYISO warned that New York City could face transmission
deficit of 300 MW-550 MW under various heat wave scenarios,
beginning in summer 2025. The projected shortfall is largely
predicated around peaking capacity that either has or will retire
through 2025 to comply with the peaker rule, as well as
faster-than-projected demand expansion in New York City due to
population growth and increasing electrification needs. About 1 GW
of peaking plants have deactivated or limited their operations as
of May 1, 2023, and an additional 500 MW is scheduled to be offline
beginning on May 1, 2025, to comply with the peaker rule. NYISO
expects transmission pressures will ease with the completion of
CHPE, in mid-2026, if the project does not experience delays. NYISO
is also evaluating options to address this issue, which could also
include, as a last resort, extending the life of peaker plants that
are set for closure.
S&P said, "We believe this dynamic is favorable for Arthur Kill,
which is one of the largest generators in New York City, and
provides critical peaking capacity, when needed.
"The stable outlook reflects our view that GBNE's operational and
financial performance will remain aligned with expectations and the
portfolio will generate sufficient cash flows through its life to
pay debt service obligations. Under our base-case scenario, we
forecast a minimum DSCR of about 2.4x during the total debt life
(2023-2044), which includes a hypothetical refinancing scenario
beyond the TLB maturity.
"We would consider a negative rating action if the project's
performance and cash sweeps were weaker than we expected, leading
to weaker-than-anticipated DSCRs, or TLB balance outstanding at
maturity materially exceeding our estimates. This could occur if
the assets in the project portfolio experience operational or
financial difficulties, triggered by events such as extended
outages, higher-than-expected operating or capital expenses, and/or
weaker-than-expected energy margins and capacity pricing in NYISO
and ISONE. We could also consider a negative rating action if the
TLB repayment was slower than anticipated due to GBNE's lenders
declining mandatory prepayments, to the extent unmitigated by
improved project economics. At the current rating, we expect GBNE's
DSCRs over our forecast period (2023-2044) will remain above
2.25x.
"Given the age and peaking nature of most of the assets in GBNE's
portfolio, as well as our view of the inherent regulatory and
environmental risks associated with these facilities, we believe
that an upgrade is highly unlikely without significant
deleveraging. We could consider raising the rating if the project's
debt repayment well exceeded our projections, such that we
anticipate minimum DSCR of 3.5x through the remaining asset life."
GOLDEN STATE: Moody's Lowers CFR to B3 & Sr. Secured Loans to B2
----------------------------------------------------------------
Moody's Investors Service downgraded Golden State Buyer, Inc.'s
(borrowing entity of Golden State Medical Supply, Inc.,
collectively, "Golden State") Corporate Family Rating to B3 from B2
and the probability of default rating to B3-PD from B2-PD. At the
same time, Moody's downgraded the senior secured bank credit
facility rating to B2 from B1, and the second lien senior secured
term loan rating to Caa2 from Caa1. The outlook is stable.
The ratings downgrade reflects Moody's expectation for ongoing
operational headwinds, in particular margin contraction, driven by
growing competition from generic pharmaceutical manufactures, to
persist over the next 12-18 months. As result, Moody's expects
financial leverage will be sustained above 6.0x, into 2024.
Additionally, the downgrade reflects weakening in the company's
liquidity, reflected in a decline in free cash flows and the
approaching expiry of the revolving credit facility in June 2024.
Downgrades:
Issuer: Golden State Buyer, Inc.
Corporate Family Rating, Downgraded to B3 from B2
Probability of Default Rating, Downgraded to B3-PD from B2-PD
Backed Senior Secured First Lien Revolving Credit Facility,
Downgraded to B2 from B1
Backed Senior Secured First Lien Term Loan B, Downgraded to B2
from B1
Backed Senior Secured Second Lien Term Loan, Downgraded to Caa2
from Caa1
Outlook Actions:
Issuer: Golden State Buyer, Inc.
Outlook, Remains Stable
RATINGS RATIONALE
Golden State's B3 Corporate Family Rating reflects the company's
high customer concentration with the US Department of Veteran's
Affairs and the Department of Defense, which account for all of its
revenues. The rating is constrained by Golden State's high Moody's
adjusted gross debt-to-EBITDA of 6.7 times for the last twelve
months ended March 31, 2023. Contract re-bidding is a key credit
risk. Golden State must compete for new and existing government
contracts, as well as expand the share of generic drugs that
manufacturers sell to the government through resellers. Roughly
one-fifth of National Contracts are up for re-bid annually;
however, Moody's expects Golden State will re-bid and win the
majority of these contracts. A large percent of revenue is derived
from long-term, exclusive contracts with relatively high win rates,
resulting in lower earnings volatility as compared to generic
manufacturers in nongovernment markets.
Moody's expect that Golden State will maintain adequate liquidity
over the next 12 months. The company's liquidity is supported by a
modest cash balance of approximately $5 million, as of March 31,
2023. Additionally, Moody's expects the company to generate
positive free cash flow in the range of $5-10 million over the next
12 months. These cash sources provide sufficient coverage for the
required 1% amortization (roughly $4.0 million) of the first-lien
senior secured term loan, and modest capital expenditures,
typically at less than $1 million per quarter. Golden State's
liquidity is bolstered by its $40 million revolving credit
facility, which was undrawn as of March 31, 2023. However, the
facility will expire in June 2024.
Golden State's first lien senior secured credit facilities
comprised of $40 million revolver expiring in June 2024 and
approximately $410 million of outstanding term loan due 2026 are
rated B2, one notch higher than the Corporate Family Rating. These
facilities benefit from a first lien pledged on all assets and
contain upstream and downstream guarantees. The $107 million second
lien term loan due 2027 is rated Caa2, two notches below the
Corporate Family Rating, reflecting its junior position in the
capital structure. The second lien facility has a second lien
pledge on all assets and the same guarantee structure as the first
lien credit facility.
Golden State's CIS-4 indicates the rating is lower than it would
have been if ESG risk exposures did not exist. Amongst social risks
is responsible production, reflecting risks associated with
compliance with regulatory requirements for safety in distribution
of pharmaceutical products. The company benefits from demographic
trends, such as rising use of specialty medicines, which underpins
good organic growth, over the long term. Governance risks reflect
Golden State's high financial leverage, as well as private equity
ownership, which creates risk of aggressive financial policies.
The stable outlook reflects Moody's expectation that despite
operational headwinds and high financial leverage, the company will
stabilize profitability margins and sustain at least adequate
liquidity, over the next 12 to 18 months.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be downgraded if a weakening of operating cash
flow or increase in investment needs leads to sustained negative
free cash flow, or if the company's liquidity deteriorates. Ratings
could also be downgraded if the company undertakes significant
debt-funded acquisitions or shareholder distributions. Failure to
successfully manage its re-bid of expiring national contracts each
year could also result in a downgrade.
Moody's could consider a rating upgrade if Golden State can
demonstrate a path to achieving a sustainable base of earnings to
support its debt and a return to earnings growth. Specifically,
Golden State would need to sustain debt/EBITDA below 6.0x and
maintain good liquidity highlighted by consistent positive free
cash flows, for the ratings to be upgraded.
The principal methodology used in these ratings was Distribution
and Supply Chain Services published in February 2023.
Golden State Buyer, Inc., headquartered in Camarillo, CA, and doing
business via its operating subsidiary, Golden State Medical Supply,
Inc. is a repackager and distributor of generic pharmaceuticals,
primarily supplying US government agencies, such as the Department
of Veteran Affairs and the Department of Defense. The company is
owned by private equity sponsor Court Square Capital Partners.
Revenue for the twelve months ended March 31, 2023 was
approximately $448 million.
GOODLIFE PHYSICAL: Court OKs Deal on Cash Collateral Access
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California,
Los Angeles Division, authorized Goodlife Physical Medicine Corp to
use cash collateral on an interim basis in accordance with its
agreement with the U.S. Small Business Administration.
The Debtor and the SBA have reached a further agreement to permit
the Debtor to use cash collateral September 15, 2023, for payment
of the ordinary and necessary expenses as set forth in the budget.
Pre-petition, on February 25, 2022, the Debtor executed an SBA
Note, pursuant to which the Debtor obtained a COVID-19 Economic
Injury Disaster Loan in the amount of $1.5 million. On May 14,
2022, the Debtor executed a First Modification of Note, pursuant to
which the Debtor increased the Original SBA Loan by $100,000 in the
cumulative amount of $1.6 million. The terms of the Modified Note
require the Debtor to pay principal and interest payments of $8,468
every month beginning 24 months from the date of the Note over the
30-year term of the SBA Loan, with a maturity date of March 2,
2052. Interest has accrued and continues to accrue since February
25, 2022. The SBA Loan has an annual rate of interest of 3.75% and
may be prepaid at any time without notice or penalty. As of the
Petition Date, the amount due on the SBA Loan was $1.652 million.
As evidenced by a Security Agreement and subsequently the Amended
Security Agreement executed on May 14, 2022 and a valid UCC-1
filing on March 14, 2022 as Filing Number U220173912326, the SBA
Loan is secured by all tangible and intangible personal property of
the Debtor.
As adequate protection, retroactive to the Petition Date, the SBA
will receive a replacement lien(s) that is deemed valid, binding,
enforceable, non-avoidable, and automatically perfected, effective
as of the Petition Date, on all postpetition revenues of the Debtor
to the same extent, priority and validity that its lien attached to
the Personal Property Collateral. The scope of the Replacement Lien
is limited to the amount (if any) that the cash collateral
diminishes post-petition as a result of the Debtor's post-petition
use of the cash collateral.
The Debtor will remit adequate protection payments to the SBA in
the amount of $3,500 per month, to be paid on August 1, 2023 and
September 1, 2023. Adequate protection payments will include the
Debtor's SBA Loan number and be sent to the payment address on the
SBA Proof of Claim or may be paid by wire transfer or pay.gov.
The SBA will be entitled to a super-priority claim over the life of
the Debtor's bankruptcy case, pursuant to 11 U.S.C. sections
503(b), 507(a)(2) and 507(b), which claim will be limited to any
diminution in the value of the SBA's collateral, pursuant to the
SBA Loan, as a result of the Debtor's use of cash collateral on a
post-petition basis.
A copy of the stipulation and the Debtor's budget is available
athttps://urlcurt.com/u?l=JjycAh from PacerMonitor.com.
The Debtor projects $288,762 in total revenue and $288,198 in total
expenses, on a monthly basis.
A copy of the order is also available at
https://urlcurt.com/u?l=m9ohYu from PacerMonitor.com.
About Goodlife Physical Medicine Corp
Goodlife Physical Medicine Corp, a company in Redondo Beach,
Calif., filed a petition for relief under Chapter 11 of the
Bankruptcy Code (Bankr. C.D. Calif. Case No. 23-10340) on Jan. 23,
2023. In the petition filed by its owner, David Carry, the Debtor
reported up to $50,000 in assets and $1 million to $10 million in
liabilities.
Judge Sandra R. Klein oversees the case.
The Debtor is represented by Leslie A. Cohen, Esq., at Leslie Cohen
Law, PC.
H & H INVESTMENT: Gets Approval to Employ Enrolled Agent
--------------------------------------------------------
H & H Investment Group, LLC received approval from the U.S.
Bankruptcy Court for the Northern District of California to employ
Tony Gu, an enrolled agent at Clement Tax Services.
Mr. Gu will assist the Debtor in the preparation of tax returns and
will act as the Debtor's tax advisor in discussion with taxing
authorities.
Mr. Gu will be compensated at $300 per hour.
As disclosed in court filings, Mr. Gu is a "disinterested person"
pursuant to Section 101(14) of the Bankruptcy Code.
Mr. Gu holds office at:
Tony Gu
Clement Tax Services
912 Clement St.
San Francisco, CA 94118
Telephone: (415) 668-1682
About H & H Investment Group
H & H Investment Group, LLC, a company in Alameda, Calif., filed a
petition under Chapter 11, Subchapter V of the Bankruptcy Code
(Bankr. N.D. Calif. Case No. 23-40642) on June 2, 2023, with
$500,000 in assets and $2,899,466 in liabilities. Christopher Hayes
has been appointed as Subchapter V trustee.
Judge William J. Lafferty oversees the case.
E. Vincent Wood, Esq., at The Law Offices of E. Vincent Wood is the
Debtor's counsel.
HEART HEATING: Has Deal on Cash Collateral Access
-------------------------------------------------
Heart Heating & Cooling, LLC and to use cash collateral on an
interim basis in accordance with its agreement with the Colorado
Department of Revenue.
The Debtor requires the use of cash collateral to fund its
post-petition operations in accordance with the budget projections
set forth in budget.
The Debtor's budget projections accounted for among other things:
a. Monthly adequate protection payments to the CDOR in the amount
of $3,244;
b. Monthly adequate protection payments to merchant cash advance
lenders in the total amount of $1,000; and
c. Monthly adequate protection payments to the lenders on the
Debtor's vehicles in the approximate total amount of $30,000.
Pre-petition, the Debtor incurred unpaid state payroll tax
liabilities, interest, and penalties to the CDOR in the approximate
amount of $162,000.
The CDOR asserts payment of the State Payroll Tax Liability is
secured first and prior lien under C.R.S. sections 39-26-117(1)
and/or 39-22-604(7)(a), on the Debtor's cash on hand, accounts
receivable, inventory, equipment, and other assets.
The Debtor and the CDOR agree that the Debtor's cash on hand,
accounts receivable, equipment, inventory, and any proceeds from
the foregoing constitute collateral securing the State Payroll Tax
Liability.
Beginning on the first day of the month following entry of an order
approving the Stipulation and continuing upon the first day of
every succeeding month thereafter until confirmation of a plan,
appointment of a Chapter 7 trustee, dismissal, or conversion, the
Debtor will pay the CDOR an adequate protection payment in the sum
of $3,244 on a monthly basis. The payments will include August 2023
and all months thereafter. All payments will be applied to the
State Payroll Tax Liability.
CDOR will have a first priority replacement lien on all property of
the Debtor and the estate, including without limitation, on all
post-petition accounts and accounts receivable, in and securing
such amounts as lawfully set forth as secured claims in the proof
of claim filed by Colorado Department of Revenue and any amendments
thereto.
The Debtor will maintain adequate insurance coverage on all
personal property assets to insure adequately against any potential
loss and provide proof of such insurance at least annually starting
on December 1, 2023.
The Debtor will expend cash collateral only for the purpose of
ordinary business expenses, including the purchase of replacement
inventory, payment of employee wages, and regular overhead
expenses, including fees under 28 U.S.C. section 1930, and will
provide CDOR with a budget by August 1, 2023.
No later than September 1, 2023, the Debtor will file any
delinquent reports and returns for pre- and post-petition periods.
The Debtor shall cure and fully pay to CDOR any delinquent taxes
for post-petition periods by that date. Thereafter, the Debtor will
timely file all reports and returns with CDOR and timely pay all
post-petition taxes due thereunder.
The Debtor will preserve and maintain in good condition all
collateral in which CDOR has an interest.
The Stipulation will terminate and the Debtor will cease using the
cash collateral upon an uncured default; 30 days written notice
provided by the CDOR in its sole discretion; or the confirmation of
a plan of reorganization, appointment of a Chapter 11 trustee, or
the conversion or dismissal of the Debtor's Bankruptcy Case.
Events of default under the Stipulation include the Debtor's
failure to make adequate protection payments when due; the Debtor's
failure to maintain adequate insurance or to provide annual proof
of insurance; the Debtor's use of the cash collateral for
unauthorized expenditures; and the Debtor's failure to file all
pre- and post-petition returns and reports.
A copy of the stipulation is available at
https://urlcurt.com/u?l=9SM1o3 from PacerMonitor.com.
About Heart Heating & Cooling, LLC
Heart Heating & Cooling, LLC is a HVAC contractor in Colorado
Springs, Colorado.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Colo. Case No. 23-13019) on July 11,
2023. In the petition signed by Robert M. Townsend, chief executive
officer, the Debtor disclosed $2,676,312 in assets and $11,173,434
in liabilities.
Judge Thomas B. McNamara oversees the case.
K. Jamie Buechler, Esq., at Buechler Law Office, LLC, represents
the Debtor as legal counsel.
INMET MINING: Gets OK to Hire Stretto as Administrative Advisor
---------------------------------------------------------------
Inmet Mining, LLC received approval from the U.S. Bankruptcy Court
for the Eastern District of Kentucky to employ Stretto, Inc. as
administrative advisor.
The Debtor requires an administrative advisor to:
a. assist with, among other things, solicitation, balloting
and tabulation of votes, prepare any related reports, and process
requests for documents;
b. prepare an official ballot certification and, if necessary,
testify in support of the ballot tabulation results;
c. provide a confidential data room, if requested; and
d. provide other administrative services.
Sheryl Betance, a partner at Stretto, disclosed in a court filing
that her firm is a "disinterested person" pursuant to Section
101(14) of the Bankruptcy Code.
The firm can be reached at:
Sheryl Betance
Stretto, Inc.
410 Exchange, Ste. 100
Irvine, CA 92602
Telephone: (714) 716-1872
Email: sheryl.betance@stretto.com
About Inmet Mining
Inmet Mining, LLC is a company in Knoxville, Tenn., which operates
in the coal mining industry.
Inmet Mining sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. E.D. Ky. Case No. 23-70113) on April 5, 2023, with $50
million to $100 million in assets and $100 million to $500 million
in liabilities. Jeffrey Strobel, chief restructuring officer,
signed the petition.
Judge Gregory R. Schaaf oversees the case.
Jeffrey Phillips, Esq., at Steptoe & Johnson, PLLC serves as the
Debtor's legal counsel. Stretto, Inc. is the Debtor's claims,
noticing and solicitation agent and administrative advisor.
Paul Randolph, Acting U.S. Trustee for Region 8, appointed an
official committee to represent unsecured creditors in the Debtor's
Chapter 11 case. The committee tapped Dentons Bingham Greenebaum,
LLP and Whiteford, Taylor & Preston, LLP as legal counsels; and BDO
Consulting Group, LLC as financial advisor.
INSTANT BRANDS: Gets Court Approval for Sept. 13 Auction for Assets
-------------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Texas
approved bidding procedures for the sale of the assets of Instant
Brands Acquisition Holdings Inc. and its debtor affiliates, and
Chapter 11 plan bids.
The Court approved these dates and deadlines:
1) Indication of Interest Deadline: The deadline for Potential
Bidders to submit non-binding indications of interest to Guggenheim
Securities is July 21, 2023 at 3:00 p.m. (prevailing Central
Time).
2) Bid Deadline: The deadline to submit a Qualified Bid is Sept.
7, 2023 at 3:00 p.m. (prevailing Central Time).
3) Auction: In the event that the Debtors timely receive more
than one Qualified Bid for the Bid Assets, and subject to the
satisfaction of any further conditions set forth in the Bidding
Procedures, the Debtors intend to conduct an Auction for the Bid
Assets. The Auction, if one is held, will commence on Sept. 11,
2023 at 10:00 a.m. (prevailing Eastern Time) at the offices of
Davis Polk & Wardwell LLP, 450 Lexington Avenue, New York, New York
10017.
4) Auction and Sale Objections Deadline: The deadline to file an
objection with the Court to the Sale Order, the conduct of the
Auction, or the Sale Transaction is Sept. 13, 2023 at 4:00 p.m.
(prevailing Central Time).
5) Sale Hearing: A hearing to consider the proposed Sale
Transaction will be held before the Court on Sept. 14, 2023 at 9:00
a.m. (prevailing Central Time) or such other date as determined by
the Court.
Copies of the bidding procedures order, as well as all related
exhibits (including the Bidding Procedures) and all other documents
filed with the Court, are available free of charge on the Debtors'
case information website located at
https://dm.epiq11.com/InstantBrands or can be requested by email at
InstantBrandsInfo@epiqglobal.com.
Any interested bidder should contact:
Guggenheim Securities, LLC
330 Madison Avenue
New York, New York 10017
Jonathan Wober
Email: jonathan.wober@guggenheimpartners.com
Tel.: + 1 (212) 823-6780
Robert Ramirez
Email: robert.ramirez@guggenheimpartners.com
Tel.: + 1 (212) 823-6688
Drew Heimlich
Email: drew.heimlich@guggenheimpartners.com
Tel.: + 1 (212) 699-2078
Denys Levin
Email: denys.levin@guggenheimpartners.com
Tel.: + 1 (212) 823-6792
Andrew Herrera
Email: andrew.p.herrera@guggenheimpartners.com
Tel. + 1 (212) 801-8960
About Instant Brands
Instant Brands designs, manufactures, and markets a global
portfolio of innovative and iconic consumer lifestyle brands:
Instant, Pyrex, Corelle, Corningware, Snapware, Chicago Cutlery,
ZOID and Visions.
Instant Brands Acquisition Holdings Inc. and its affiliates,
including Instant Brands LLC, sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 23-90716)
on June 12, 2023. Judge David R. Jones oversees the case.
In addition, the Company commenced ancillary proceedings in Canada
under the Companies' Creditors Arrangement Act (CCAA) seeking
recognition of the U.S. Chapter 11 proceedings in Canada.
In its Chapter 11 petition, Instant Brands disclosed up to $1
billion in both assets and liabilities.
The Debtors tapped Davis Polk & Wardwell, LLP, and Haynes and
Boone, LLP, as bankruptcy counsels; Stikeman Elliott, LLP as
Canadian counsel; Guggenheim Securities, LLC, as investment banker;
and AlixPartners, LLP as restructuring advisor. Adam Hollerbach, a
partner and managing director at AlixPartners, serves as the
Debtors' chief restructuring officer.
The U.S. Trustee for Region 7 appointed an official committee to
represent unsecured creditors in the Debtors' Chapter 11 cases.
The committee is represented by James P. Muenker, Esq.
INSTANT BRANDS: Gets OK to Hire Guggenheim as Investment Banker
---------------------------------------------------------------
Instant Brands Acquisition Holdings Inc. and its affiliates
received approval from the U.S. Bankruptcy Court for the Southern
District of Texas to hire Guggenheim Securities, LLC as investment
banker.
The firm's services include:
a. Review and analysis of the business, financial condition
and prospects of the Debtors;
b. Evaluation of the liabilities of the Debtors, their debt
capacity and their strategic and financial alternatives;
c. In connection with a transaction:
i. Evaluation from a financial and capital markets point of
view of alternative structures and strategies for implementing the
transaction;
ii. Preparation of offering, marketing, disclosure or other
transaction materials concerning the Debtors and the transaction
for distribution and presentation to the relevant transaction
counterparties;
iii. Development and implementation of a marketing plan with
respect to such transaction;
iv. Identification and solicitation of, and the review of
proposals received from, the Investors and other prospective
transaction counterparties; and
v. Negotiation of the transaction.
d. In connection with the pursuit of any transaction in a
bankruptcy case, evaluation, from a financial point of view, of
alternative strategies for implementing and seeking approval of any
such transaction, including pursuant to a plan, which may be a plan
under Chapter 11 of the Bankruptcy Code confirmed in bankruptcy
court; and
e. other investment banking services.
Guggenheim will be compensated as follows:
a. A monthly fee of $125,000 for the first three months and
$150,000 per month thereafter.
b. A cash fee of $4 million if a restructuring transaction is
consummated.
c. If a financing transaction is consummated, a cash fee in an
amount equal to the greater of (i) $1 million and (ii) the sum of:
(A) 150 basis points (1.50%) of the aggregate face amount
of any debt obligations to be issued or raised by the Debtors
(including the face amount of any related commitments) in any debt
financing that is secured by first priority liens over the Debtors'
assets; plus
(B) 250 basis points (2.50%) of the aggregate face amount
of any debt obligations to be issued or raised by the Debtors
(including the face amount of any related commitments) in any debt
financing that is not covered by Section 4(c)(i)(A) of the
Engagement Letter; plus
(C) 400 basis points (4.00%) of the aggregate amount of
gross proceeds raised by the Debtors in any equity financing
(including the face amount of any related commitments); plus
(D) With respect to any other securities or indebtedness
issued that is not otherwise covered by Sections 4(c)(i)(A) to
4(c)(i)(C) of the Engagement Letter, such financing fees,
underwriting discounts, placement fees or other compensation as
customary under the circumstances and mutually agreed in advance by
the Debtors and Guggenheim.
d. A cash fee in an amount equal to $4 million if a sale
transaction is consummated.
In addition, Guggenheim will seek reimbursement for work-related
expenses incurred.
Ronen Bojmel, senior managing director at Guggenheim, disclosed in
a court filing that his firm is disinterested" pursuant to Section
101(14) of the Bankruptcy Code.
Guggenheim can be reached at:
Ronen Bojmel
Guggenheim Securities, LLC
330 Madison Avenue
New York, NY 10017
About Instant Brands
Instant Brands designs, manufactures and markets a global portfolio
of innovative and iconic consumer lifestyle brands: Instant, Pyrex,
Corelle, Corningware, Snapware, Chicago Cutlery, ZOID and Visions.
Instant Brands Acquisition Holdings Inc. and its affiliates,
including Instant Brands LLC, sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 23-90716)
on June 12, 2023. Judge David R. Jones oversees the case.
In addition, the Company commenced ancillary proceedings in Canada
under the Companies' Creditors Arrangement Act (CCAA) seeking
recognition of the U.S. Chapter 11 proceedings in Canada.
In its Chapter 11 petition, Instant Brands disclosed up to $1
billion in both assets and liabilities.
The Debtors tapped Davis Polk & Wardwell, LLP and Haynes and Boone,
LLP as bankruptcy counsels; Stikeman Elliott, LLP as Canadian
counsel; Guggenheim Securities, LLC as investment banker; and
AlixPartners, LLP as restructuring advisor. Adam Hollerbach, a
partner and managing director at AlixPartners, serves as the
Debtors' chief restructuring officer.
The U.S. Trustee for Region 7 appointed an official committee to
represent unsecured creditors in the Debtors' Chapter 11 cases. The
committee is represented by James P. Muenker, Esq.
INSTANT BRANDS: Taps AlixPartners as Restructuring Advisor
----------------------------------------------------------
Instant Brands Acquisition Holdings Inc. and its affiliates
received approval from the U.S. Bankruptcy Court for the Southern
District of Texas to hire AlixPartners, LLP and designate Adam
Hollerbach as chief restructuring officer.
The Debtors require a restructuring advisor to:
(a) prepare budgets and 13-week cash forecasts and evaluate
variances thereto, as required by the Debtors' lenders;
(b) communicate with, and meet the information needs of, the
Debtors' various constituencies, including potential exit lenders;
(c) support the development of the Debtors' revised business
plan and such other related forecasts as may be required by the
Debtors' lenders in connection with negotiations or by the Debtors
for other corporate purposes;
(d) provide management with recommendations and tools to help
improve liquidity management procedures;
(e) develop a short-term cash disbursement plan designed to
minimize cash requirements while maintaining the efficiency of
operations, sustain vendor relationships, and minimize the impact
on the Debtors' customer base;
(f) design, negotiate and implement a restructuring strategy
designed to maximize enterprise value, taking into account the
unique interests of key constituencies;
(g) develop short-term and long-term cash flow forecasting
tools and related methodologies to support negotiations with the
Debtors' stakeholders and fundraising initiatives;
(h) prepare for and file a bankruptcy petition, coordinating
and providing administrative support for the proceeding and develop
the Debtors' plan of reorganization or other appropriate case
resolution, if necessary;
(i) prepare disclosure statement and plan of reorganization,
liquidation analysis, statements of financial affairs, schedules of
assets and liabilities, potential preference analysis, claims
analysis, and monthly operating reports and other regular reporting
required by the bankruptcy court;
(j) coordinate the Debtors' professionals assigned to
sourcing, negotiate and implement any financing, including
debtor-in-possession and exit financing facilities, in conjunction
with a plan of reorganization and the overall restructuring;
(k) manage the "working group" professionals who are assisting
the Debtors in the reorganization process or who are working for
the Debtors' various stakeholders to improve coordination of their
effort and individual work product to be consistent with the
Debtors' overall restructuring goals; and
(l) other necessary services.
The hourly rates charged by the firm for its services are as
follows:
Partner/Managing Director $1,140 - $1400
Partner $1,115
Director $880 - $1,070
Senior Vice President $735 - $860
Vice President $585 - $725
Consultant $215 - $565
Paraprofessional $360 – 380
In addition, the firm will seek reimbursement for work-related
expenses incurred.
AlixPartners received a retainer in the amount of $1,000,000 from
the Debtors. During the 90-day period prior to their Chapter 11
filing, the Debtors paid the firm $1,949,035.79 in aggregate for
professional services performed and expenses incurred, including
the retainer.
Adam Hollerbach, a partner and managing director at AlixPartners,
disclosed in a court filing that his firm is a "disinterested
person" pursuant to Section 101(14) of the Bankruptcy Code.
AlixPartners can be reached at:
Adam Hollerbach
AlixPartners, LLP
2000 Town Center #2400
Southfield, MI 48075.
Mobile: +1 313 401 7964
Email: ahollerbach@alixpartners.com
About Instant Brands
Instant Brands designs, manufactures and markets a global portfolio
of innovative and iconic consumer lifestyle brands: Instant, Pyrex,
Corelle, Corningware, Snapware, Chicago Cutlery, ZOID and Visions.
Instant Brands Acquisition Holdings Inc. and its affiliates,
including Instant Brands LLC, sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. S.D. Texas Lead Case No. 23-90716)
on June 12, 2023. Judge David R. Jones oversees the case.
In addition, the Company commenced ancillary proceedings in Canada
under the Companies' Creditors Arrangement Act (CCAA) seeking
recognition of the U.S. Chapter 11 proceedings in Canada.
In its Chapter 11 petition, Instant Brands disclosed up to $1
billion in both assets and liabilities.
The Debtors tapped Davis Polk & Wardwell, LLP and Haynes and Boone,
LLP as bankruptcy counsels; Stikeman Elliott, LLP as Canadian
counsel; Guggenheim Securities, LLC as investment banker; and
AlixPartners, LLP as restructuring advisor. Adam Hollerbach, a
partner and managing director at AlixPartners, serves as the
Debtors' chief restructuring officer.
The U.S. Trustee for Region 7 appointed an official committee to
represent unsecured creditors in the Debtors' Chapter 11 cases. The
committee is represented by James P. Muenker, Esq.
INVENERGY THERMAL: Moody's Rates New Senior Secured Loans 'Ba2'
---------------------------------------------------------------
Moody's Investors Service has assigned a Ba2 rating to Invenergy
Thermal Operating I LLC ("ITOI" or "Borrower") senior secured
credit facilities. The outlook is stable.
The senior secured credit facilities will consist of approximately
$325 million senior secured first lien term loan B due 2029; a $25
million senior secured first lien term loan C due 2029 and $150
million senior secured first lien revolving credit facility
maturing in August 2028.
These credit facilities will refinance ITOI's existing
approximately $234 million outstanding senior secured first lien
term loan B due 2025 (CUS: 46123UAG3); and the $95 million senior
secured revolving credit facility due 2023 (CUS: 46123UAH1), both
of which are currently rated at Ba2 with a stable outlook. The
rating on each of ITOI's existing debt instruments (CUS: 46123UAG3
and CUS: 46123UAH1) will be withdrawn following financial close of
the new credit facilities.
RATINGS RATIONALE
The Ba2 rating for the new senior secured credit facilities
considers ITOI's manageable debt load and the resulting relatively
robust credit metrics, the geographic and power market diversity
supporting ITOI's cash flows, offset by the portfolio's exposure to
merchant power markets. ITOI's underlying project portfolio
consists of the 609 MW Nelson combined cycle natural gas power
generation facility and the 380 MW Nelson Expansion simple cycle
natural gas power generation facility located within the PJM Com-Ed
market region; the 650 MW natural gas fired Grays Harbor combined
cycle power generation facility located in the Pacific Northwest
(PNW) power market region, and the 584 MW natural gas fired St.
Clair combined cycle power generation project serving the Ontario,
CA power market. The rating further reflects the good operating
track record of the underlying projects in the portfolio and
Invenergy's sound asset management strategy, including Moody's
expectations for implementing hedging for the merchant portion of
the ITOI portfolio.
The rating recognizes the cash flow stability from the St. Clair
project that benefits from a long-term contract for differences
(CFD) with Independent Electricity System Operator (IES: Aa3
positive) of Ontario through 2029, and which has been negotiated to
be extended to 2035 following the advanced gas path (AGP) upgrade
at the St. Clair project that is expected to be completed by 2025.
The St. Clair project provides contracted cash flows to ITOI and
provides a degree of cash flow predictability representing
approximately 25% to 30% of consolidated cash flows over the term
of the ITOI credit facilities. However, the rating also
acknowledges the structural subordinated position of the cash flows
coming from St. Clair to ITOI due to the existence of project level
debt at St. Clair. Specifically, the St. Clair project has C$176
million (US$ 134 million) of outstanding project debt.
The Nelson project, together with the Nelson Expansion project and
the Grays Harbor project, though having the benefit of partial
contracts or financial hedges which will help to stabilize
financial performance, have a substantially high degree of exposure
to merchant capacity and energy market pricing volatility. These
projects are anticipated to constitute an even larger share of the
portfolio's cash flows in the coming years. While Nelson and Grays
Harbor projects have demonstrated several years of strong financial
performance, both projects face ongoing headwinds that could lead
to some margin compression and higher cash flow volatility in the
coming years.
The Nelson and Nelson Expansion projects will be impacted by
declining capacity prices at least through 2024/2025 based on lower
cleared PJM BRA capacity auctions, tightening power prices in the
region, and State of Illinois' mandated carbon emission
restrictions as per the State's Climate and Equitable Jobs Act
(CEJA) law that could impact future dispatch levels of these power
plants and potentially weaken future energy margins. However, the
rating recognizes that the Nelson project has a long-term offtake
contract with WPPI Energy (A1/STA) for a 96MW (15%) portion of the
plant's output through 2037, reflecting the value of the Nelson
plant to regional market participants at least through Illinois'
carbon transition period.
While the Nelson project has demonstrated a strong operating track
record over the past several years, the project also remains
vulnerable to the impact of PJM Capacity Performance (CP) events.
The Nelson project suffered a CP penalty from the December 2022
Winter Storm Elliott due to a forced outage at both of its units
for part of the penalty assessment period when the CP event was
invoked by PJM. The financial impact to Nelson and ITOI was partly
offset by the bonus payment and the existence of insurance as
Invenergy maintains outage insurance that mitigated a degree of the
CP penalty exposure for non-performance. It also earned a bonus for
generating the rest of the penalty assessment period. Nelson paid
the final installment of CP penalties as of the end of June 2023.
The Grays Harbor project, while benefiting from heat rate call
options (HRCO) for a 200 MW strip of its output through the end of
2024, will likely see its operating costs increase in the coming
years in view of having to purchase carbon allowances to comply
with the requirements of the Climate Commitment Act (CCA) that was
passed in 2021 in the State of Washington and took effect earlier
this year. However, Moody's recognize that Grays Harbor is well
positioned to benefit from increasingly tightening market
conditions in the PNW region due to aggressive decarbonization
goals in the states of Washington and Oregon leading to an
accelerated shut down of coal plants within PNW, combined with
increasing renewable energy deployment which results in a high
degree of intermittency in the region's dispatch stack.
Furthermore, lower levels of imports from California together with
recent trends of low hydro generation in the PNW region will be
expected to drive power prices and spark spreads higher in the
upcoming summer and winter peak seasons. While the current
Mid-Columbia power and gas forward prices point to substantially
high peak prices and spark spreads during the summer months,
Moody's views this development to be largely influenced by the low
hydro generation being experienced this year in the PNW which is
exacerbated by the carbon tax imposed in the State of Washington
that impacts the marginal costs of the region's thermal generation,
as well as current lower imports from California. Given the recency
bias built into the forward prices, Moody's view the substantially
robust cash flows reflected in management's base case for Grays
Harbor to have a high degree of uncertainty beyond the current
year. However, Moody's note that ITOI intends to address future
cash flow uncertainty with a comprehensive hedging program.
The rating considers ITOI's debt profile that constitutes a
manageable level of leverage which provides the Borrower a degree
of cushion to withstand potentially significant volatility in its
cash flows due to the portfolio's merchant market exposure. Under
more conservative cash flow scenarios considered by Moody's,
Moody's anticipate the ITOI portfolio to demonstrate relatively
strong credit metrics over the next three years, which are
supportive of the rating level. The base case scenario that Moody's
considered shows ITOI's adjusted debt service coverage ratio (DSCR)
to average approximately 3.5x over the next three-year period, with
the adjusted ITOI cash flow from operations (adjusted CFO) to debt
ratio averaging approximately 25% and ITOI's consolidated debt to
EBITDA ratio averaging approximately 3.0x. Furthermore, given the
cash sweep mechanism contemplated in the debt financing, Moody's
anticipate that ITOI could achieve a meaningful level of
de-levering to less than 50% of the initial term debt load over the
six-year tenor of the term loans under the cash flow scenarios
considered by Moody's. While an upside scenario to Moody's base
case, Moody's observe that should the current favorable market
conditions in the PNW region continue as anticipated by Invenergy,
which would significantly benefit Grays Harbor's cash flows beyond
Moody's current base case expectations, the possibility exists for
the ITOI debt to be repaid entirely within the six-year tenor of
the term loan B.
STRUCTURAL FEATURES
The ITOI debt structure reflects a customary term loan B project
finance cash flow waterfall, and includes restrictions on
additional debt incurrence, except for the refinancing of project
debt at St. Clair (with an expected covenant to reflect that such
refinancing debt to have no onerous terms restricting distributions
to ITOI than in the existing St. Clair project debt structure).
The ITOI financing package includes dividend restrictions subject
to a cash sweep mechanism, reflecting a sweep of 75% of excess cash
flows if the leverage ratio (as defined in the credit documents) is
greater than 2.5x and a cash sweep of 50% if the leverage ratio is
equal to or below 2.5x. The structure further requires a 100% cash
sweep to achieve certain prescribed annual target debt balances.
Cash distributions to equity will be further subject to a
distribution lock-up at a 1.20x debt service coverage ratio or
below. The structure will further include a 1.10x minimum debt
service coverage covenant and customary change of control
provisions.
SECURITY
The credit facilities will be secured by a first lien pledge of the
real property and assets comprising of the Grays Harbor project,
the Nelson project and the Nelson Expansion project; and the
collateral package will further comprise of direct and indirect
equity interest in the Grays Harbor, Nelson and Nelson Expansion
projects, as well as an equity interest in the holding company of
the St. Clair project. The equity pledge in the St. Clair project
is subject to a 66% voting equity interest to the extent the pledge
of a greater percentage of voting interest could result in adverse
tax consequences for ITOI. Additionally, there will be a $75
million carveout of the ITOI collateral package for commodity
hedging purposes. However, this cap does not apply to asset
specific commodity hedging at Grays Harbor, Nelson and Nelson
Expansion projects which are permitted to pledge collateral on a
first lien basis for right way hedging.
LIQUIDITY
The ITOI financing structure includes a six-month debt service
reserve requirement in support of the ITOI debt, which could either
be cash funded or fulfilled through the issuance of letters of
credit. The structure includes a requirement to maintain a major
maintenance reserve account dedicated to reserving expected
maintenance expenses for the Nelson, Nelson Expansion and Grays
Harbor projects for the immediately succeeding two-year period.
The financing structure further incorporates a provision to enable
ITOI to reserve funds needed to purchase carbon allowances
projected to be incurred in the immediately succeeding three-month
period. Moody's views the inclusion of this carbon allowance
payment provision to be a credit positive liquidity feature given
the substantially high carbon allowance purchase costs anticipated
at Grays Harbor in the coming years.
ITOI's liquidity profile will be supported by the $150 million
revolving credit facility and the $25 million Term Loan C letter of
credit facility. The revolver will be available for general
working capital liquidity and collateral for commodity hedging
purposes.
RATING OUTLOOK
The stable outlook reflects Moody's expectation that ITOI will be
able to generate cash flows to support the expected credit metrics
in Moody's base case, that management will enter into hedging
strategies for the merchant assets that lowers cash flow volatility
for the portfolio, and that the assets will continue to maintain a
sound operating track record reducing the potential for operational
disruptions. The stable outlook further assumes Invenergy's track
record of implementing risk mitigation strategies, as with the
existing ITOI portfolio, will continue following this refinancing,
enabling the portfolio to manage a degree of event risk should it
occur, while helping to facilitate expected debt repayment.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
ITOI's rating has somewhat limited prospects for an upgrade in the
near-term owing to the overall business risk profile which relies
heavily on merchant cash flows from the Nelson and the Grays Harbor
plant. The rating could be upgraded should the hedging strategy
lower the level of anticipated cash flow volatility and lead to
higher than anticipated project cash flow generation so that there
is a substantially greater repayment of debt than expected in
Moody's base case, such that ITOI's DSCR exceeds 4.0x and the
adjusted CFO/debt ratio is greater than 30% on a sustained basis.
ITOI's rating could be downgraded if there are significant outages
or prolonged operating problems at the underlying projects leading
to an inability to generate excess cash flow to the Borrower or if
there is deterioration of ITOI's consolidated credit metrics such
that the DSCR decreases below 2.0x and the adjusted CFO to debt
ratio decreases below 15% on a sustained basis.
PROFILE
Invenergy Thermal Operating I LLC holds 100% ownership interests in
approximately net 2,293 MW portfolio of four operating natural gas
fired plants located across the US and CA. The ITOI project
portfolio consists of the 609 MW Nelson combined cycle generating
facility (Nelson) and 380 MW natural gas combustion turbine peaking
facility (Nelson Expansion) located in Rock Falls, IL, within the
PJM Com-Ed market region; the 650 MW Grays Harbor combined cycle
generating facility (Grays Harbor) located near Olympia, WA; and
the 584 MW (expanding to 654 MW) St. Clair combined cycle
generating facility (St. Clair) located in Sarnia, Ontario, CA.
ITOI is owned under a 50/50 joint venture partnership named
Invenergy AMPCI Thermal Power LLC, which is a partnership between
Invenergy Clean Power LLC (Invenergy) and InfraBridge's Global
Infrastructure Fund Platform (InfraBridge), formerly known as AMP
Capital's Global Infrastructure Equity Platform.
The principal methodology used in these ratings was Power
Generation Projects published in June 2023.
IRVIN AUTOMOTIVE: Voluntary Chapter 11 Case Summary
---------------------------------------------------
Debtor: Irvin Automotive Parts, Inc.
522 Hwy 278 West
Amory, MS 38821
Chapter 11 Petition Date: July 25, 2023
Court: United States Bankruptcy Court
Northern District of Mississippi
Case No.: 23-12234
Judge: Hon. Selene D. Maddox
Debtor's Counsel: Craig M. Geno, Esq.
LAW OFFICES OF CRAIG M. GENO, PLLC
587 Highland Colony Parkway
Ridgeland, MS 39157
Tel: 601-427-0048
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Joel Dean Irvin as president.
The Debtor failed to include in the petition a list of its 20
largest unsecured creditors.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/VPFE3KQ/Irvin_Automotive_Parts_Inc__msnbke-23-12234__0001.0.pdf?mcid=tGE4TAMA
ITTELLA INTERNATIONAL: Taps Levene Neale Bender Yoo as Counsel
--------------------------------------------------------------
Ittella International, LLC seeks approval from the U.S. Bankruptcy
Court for the Central District of California to employ Levene,
Neale, Bender, Yoo & Golubchik, LLP as its bankruptcy counsel.
The firm's services include:
a. advising the Debtor with regard to the requirements of the
bankruptcy court, Bankruptcy Code, Bankruptcy Rules and the Office
of the U.S. Trustee as they pertain to the Debtors;
b. advising the Debtors with regard to certain rights and
remedies of their bankruptcy estates and the rights, claims and
interests of creditors;
c. representing the Debtors in any proceeding or hearing in
the bankruptcy court involving their estates unless the Debtors are
represented in such proceeding or hearing by a special counsel;
d. conducting examinations of witnesses, claimants or adverse
parties and representing the Debtors in any adversary proceeding
except to the extent that any such adversary proceeding is in an
area outside of Levene's expertise or which is beyond the firm's
staffing capabilities;
e. preparing and assisting the Debtors in the preparation of
reports and legal papers;
f. representing the Debtors with regard to obtaining use of
debtor-in-possession financing or cash collateral;
g. assisting the Debtors in any asset sale process;
h. assisting the Debtors in the negotiation, formulation,
preparation and confirmation of a plan of reorganization and the
preparation and approval of a disclosure statement in respect of
the plan; and
i. other necessary legal services.
The firm's hourly rates are as follows:
Attorneys $450 to $690 per hour
Paraprofessionals $295 per hour
In addition, the firm will receive reimbursement for out-of-pocket
expenses incurred.
The firm received a retainer in the amount of $250,000.
David Neale, Esq., a partner at Levene, disclosed in a court filing
that his firm is a "disinterested person" pursuant to Section
101(14) of the Bankruptcy Code.
The firm can be reached at:
David L. Neale, Esq.
Todd M. Arnold, Esq.
John-Patrick M. Fritz, Esq.
Robert M. Carrasco, Esq.
Levene, Neale, Bender, Yoo & Golubchik, LLP
2818 La Cienega Avenue
Los Angeles, CA 90034
Tel: (310) 229-1234
Fax: (310) 229-1244
Email: dln@lnbyg.com
tma@lnbyg.com
jpf@lnbyg.com
rmc@lnbyg.com
About Ittella International
Ittella International LLC supplies plant-based products.
Ittella International and seven affiliates sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. C.D. Calif. Lead
Case No. 23-14154) on July 2, 2023. In the petition signed by its
the chief executive officer, Salvatore Galletti, Ittella
International disclosed up to $50 million in both assets and
liabilities.
Judge Sandra R. Klein oversees the cases.
David L. Neale, Esq., at Levene, Neale, Bender, Yoo and Golubchik
LLP, represents the Debtors as legal counsel.
J&J VENTURES: Moody's Rates New $375MM Incremental Term Loan 'B2'
-----------------------------------------------------------------
Moody's Investors Service assigned B2 rating to J&J Ventures
Gaming, LLC's proposed $375 million incremental senior secured 1st
lien term loan B (non-fungible) due April 2028. J&J's' existing
ratings, including the company's B2 Corporate Family Rating and B2
1st lien senior secured revolving credit facility due April 2026
and its B2-PD Probability of Default Rating remain unchanged. The
outlook remains stable.
Net proceeds from the proposed $375 million nonfungible add-on to
the existing rated senior secured 1st lien term loan B are expected
to be used to finance J&J's previously announced acquisition of
Golden Entertainment, Inc.'s (Ba3 stable) distributed assets in
Nevada and Montana. Moody's projected J&J's debt/EBITDA to increase
to about 4.6x pro-forma from 4.0x currently. However, it remains
within the downgrade driver of 5.0x and Moody's expects J&J to
reduce leverage to near 4.0x in the next year. The transaction is
pending regulatory approvals and is expected to close in two
separate tranches, Montana in late 2023 and Nevada in early 2024.
The net proceeds for the Nevada assets will be held in escrow
account for the closing in 2024.
Assignments:
Issuer: J&J Ventures Gaming, LLC
Senior Secured 1st Lien Term Loan, Assigned B2
RATINGS RATIONALE
J&J Gaming Ventures, LLC's B2 rating reflects its flexible and
asset light business model characterized by limited capital
expenditure requirements, a highly variable expense structure, and
the contract nature of revenues and earnings. Additionally, there
is no material customer concentration. Combined, these factors
result in significant and stable free cash flow relative to EBITDA.
J&J's management team has considerable experience in video gaming
terminal (VGT) management. The company is the largest terminal
operator in Illinois with a 31% market share in the state.
These credit strengths are offset by J&J's single product focus and
its small size relative to the rated gaming peers with just about
$293 million revenue for the LTM period ended March 31, 2023.
Despite the favorable regulatory history of Illinois supporting and
expanding VGT's, J&J remains inherently exposed to unfavorable
regulatory changes including potential higher tax rates. Moreover,
J&J is majority owned by a private equity firm. There is always the
possibility that the company's owner will alter its financial
policy and operate in a manner to maximize dividend and equity
value at the expense of creditors.
The stable rating outlook reflects Moody's expectation that J&J
will continue to generate positive free cash flow that it can use
to manage its debt levels and its financial policy with a long-term
target of debt/EBITDA less than 3.0x gross debt-to-EBITDA
leverage.
The stable rating outlook also takes into account a considerable
amount of flexibility regarding covenant compliance. There will be
no financial maintenance covenants on the proposed term loan, and
the revolver will only contain a first lien springing maximum
leverage covenant that is only triggered if the revolver is at 35%
utilization. Moody's do not expect that the revolver will need to
be drawn to support operations during the life of the loan.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
Ratings could be upgraded if J&J generates consistent and positive
free cash flow while maintaining debt-to-EBITDA at or below 4.0x.
Ratings could be downgraded if J&J experience a deterioration in
liquidity, decline in EBITDA performance or inability to sustain
debt-to-EBITDA below 5.0x
J&J Ventures Gaming, LLC is a terminal operator in the Illinois
Video Gaming Terminal (VGT) market. As of December 31, 2022, the
company operated terminals in 2,446 live video gaming locations.
Oaktree Capital Management, L.P. owns approximately 57% of J&J with
management-related entities owning the remaining minority position.
For the LTM ended March 31, 2023, net revenue was approximately
$293 million.
The principal methodology used in this rating was Gaming published
in June 2021.
J&J VENTURES: S&P Alters Outlook to Positive, Affirms 'B' ICR
-------------------------------------------------------------
S&P Global Ratings revised its rating outlook on Effingham,
Il.-based video gaming terminal (VGT) operator J&J Ventures Gaming
LLC (J&J) to positive from stable and affirmed the 'B' issuer
credit rating and issue-level rating on its existing debt.
S&P said, "We also assigned our 'B' issue-level rating and '3'
recovery rating to the proposed $375 million incremental term loan
due 2028, which reflects our expectation of meaningful (50%-70%;
rounded estimate: 55%) recovery for lenders in the event of a
payment default.
"The positive outlook reflects our expectation that J&J will
successfully integrate its announced acquisition and that pro forma
leverage will remain below 4.5x over the next 12 months.
"We expect pro forma leverage will remain below our 4.5x rating
upgrade threshold over the next 12-18 months.
"On March 6, 2023, J&J reached an agreement with Golden
Entertainment Inc. to purchase its 1,050 distributed gaming assets
for a total purchase price of $362 million. J&J plans to fund the
acquisition with an incremental $375 million term loan due 2028. As
part of the transaction, the company plans to upsize its existing
revolving credit facility to $100 million from $60 million, which
will remain undrawn. Pending regulatory approvals, the company
expects the transaction to close by the end of 2023. We expect
these acquired assets to contribute an additional $40 million of
EBITDA. Pro forma for the proposed transaction, we expect S&P
Global Ratings-adjusted leverage will be in the mid-4x area in 2023
and further declining to the low-4x area forecast by the end of
2024 on EBITDA growth and modest debt amortization payments. The
pro forma leverage improvement has cushion below our 4.5x upgrade
threshold."
S&P expects the proposed acquisition will significantly increase
J&J's revenue and EBITDA base and improve diversification.
The transaction will significantly increase the company's scale by
adding approximately 1,050 locations to J&J's portfolio, bringing
its total location count to nearly 3,500 licensed video gaming
locations in U.S. The transaction also expands J&J's regional
footprint into two established gaming markets in Nevada and
Montana. Golden Entertainment's distributed gaming operations have
a leading market position in Nevada and are the second largest in
Montana, with a 25% market share. These market positions complement
well with J&J's existing leading market position in the Illinois
VGT market, where it has about a 30% market share. As a result, S&P
believes the increased scale from the acquisition will give J&J a
competitive advantage with its ability to provide superior service
and favorable contract terms that will be difficult for smaller
competitors to replicate. Although J&J is concentrated in three
states and generates the majority of its EBITDA in Illinois, it
does not depend on a single location or customer because its
machines are located in thousands of convenient establishments. S&P
views its diversity of locations and proximity to customers as
advantageous given that regional casino operators rely on drive-to
traffic from further distances. The average J&J customer lives
within 15 minutes of a partner location, which results in increased
frequency of play, stickier customers, and highly recurring
revenue.
S&P said, "J&J already has a strong record of not only renewing its
existing contracts but also winning contracts and taking share from
its competitors, and we believe this acquisition will further
entrench the company's market-leading position. J&J's expansion
into these markets will also reduce its geographic concentration in
Illinois, allowing it to somewhat reduce its vulnerability to
potential adverse regulatory developments, weather-related
disruptions, regional economic weakness, or changes in the
competitive landscape. Despite J&J's successful track record of
integrating acquisitions of smaller competitors in its existing
markets, we believe there is potential execution and integration
risk, given this is J&J's largest acquisition to date and it is
expanding operations into two new VGT markets We also expect pro
forma margins to slightly decline due to the impact of fully
integrating Golden Entertainment's assets, which are lower margin.
This is due to the lower net terminal income (NTI)/VGT per day
generated at the acquired locations.
"J&J's majority ownership by financial sponsor Oaktree Capital
Management is a key financial risk given our belief that
financial-sponsor owners frequently engage in debt-financed
acquisitions or shareholder returns.
"Our view of financial risk incorporates Oaktree's majority
ownership and ability to dictate J&J's strategy and cash flows.
This could lead the company to adopt a more aggressive financial
policy, such as pursuing debt-financed acquisitions or
distributions, and result in a deterioration in credit measures.
J&J continues to demonstrate a willingness to fund acquisitions
with additional debt, though our forecast for the company's pro
forma adjusted leverage of the mid-4x area in 2023 is less
aggressive than with typical financial sponsor-backed companies.
Nevertheless, we expect J&J will likely continue to pursue
debt-financed acquisitions in the future as it looks to expand to
new VGT markets as well as further penetrate its existing markets
to solidify its leading market position.
"Oaktree owns 56.9% of J&J through its preferred shareholding while
management owns the remainder through common equity. We view the
preferred ownership by Oaktree as non-common equity because we
believe that taking out any part of the preferred equity with
funded debt would reduce Oaktree's ownership and therefore its
control of the company, which would not be in Oaktree's financial
interest. In addition, payment of cash dividends is made pro rata
among preferred and common shareholders. Our ratio calculations are
unchanged because this treatment would not affect the leverage.
"We believe J&J's operating performance will be more resilient than
that of traditional casinos despite our expectation of a
macroeconomic slowdown in 2023 that could result in a modest
pullback in gaming activity.
"We view J&J's model as more akin to the lottery business than to
casino gaming because both VGT and lottery operators benefit from
less-volatile revenue given their products' low prices and easy
access. J&J primarily serves lower-stakes gaming customers who may
be overlooked by casinos. Although VGTs and casinos are two
distinct product offerings with different customer bases, we view
J&J's hyper-local gaming model more favorably given it does not
rely on destination travel or group business, which could
experience significant declines during economic recessions. We view
J&J's business as being less cyclical given that customers tend to
engage in local, convenient, low-cost forms of entertainment during
recessions." In addition, the increased maximum bet and ability to
add terminals should drive higher revenue growth. Furthermore, West
Virginia, whose VGT market is more limited in scope, generates a
higher NTI per adult, which suggests the VGT market in Illinois has
room to grow.
Despite modest declines in NTI/VGT per day due to waning government
stimulus and inflationary pressures, J&J continued to outperform
pre-pandemic periods during the first quarter of fiscal 2023.
Year-to-date revenue and EBITDA grew 16% and 8% year over year,
respectively, due to location and machine count growth from
acquisitions. S&P expects more muted organic growth this year due
to our expectation of a growth slowdown over the next 12 months
stemming from decreased consumer spending.
S&P said, "The positive outlook reflects our expectation J&J will
successfully integrate the acquired locations and that pro forma
leverage will remain below 4.5x following the transaction close.
"We could raise our ratings if J&J successfully integrates the
acquisition and we believe the company will sustain leverage below
our 4.5x upgrade threshold, including the potential for future
acquisitions or shareholder distributions.
"We could return the outlook to stable if we expect leverage to
remain above 4.5x. This could occur if missteps with integrating
the new locations or rising unemployment and weaker consumer
spending resulted in declines in demand. This could also occur if
the company undertook additional leveraging acquisitions or
shareholder returns."
ESG credit indicators:E-2; S-3; G-3
S&P said, "Social factors are a moderately negative consideration
in our credit rating analysis of J&J Ventures. J&J faces regulatory
risks since it is subject to high regulation in Illinois.
Governance factors are also a moderately negative consideration.
Our assessment of the company's financial risk profile as highly
leveraged reflects corporate decision-making that prioritizes the
interests of controlling owners, in line with our view of most
rated entities owned by private-equity sponsors. Our assessment
also reflects generally finite holding periods and a focus on
maximizing shareholder returns."
JAFFAN INTERNATIONAL: Taps Joel M. Aresty as Substitute Counsel
---------------------------------------------------------------
Jaffan International, LLC seeks approval from the U.S. Bankruptcy
Court for the Middle District of Florida to employ Joel M. Aresty,
P.A to substitute for Buddy D. Ford, P.A.
The firm's services include:
a. advising the Debtor with respect to its powers and duties
and the continuation of family and business operations;
b. advising the Debtor with respect to its responsibilities in
complying with the U.S. trustee's Operating Guidelines and
Reporting Requirements and with the rules of the court;
c. preparing legal documents;
d. protecting the interest of the Debtor in all matters
pending before the court; and
e. representing the Debtor in negotiation with its creditors
in the preparation of a Chapter 11 plan.
The firm will be paid an hourly fee of $440 and a retainer of
$2,000 per month.
In addition, the firm will receive reimbursement for out-of-pocket
expenses incurred.
Joel Aresty, Esq., disclosed in a court filing that his firm is a
"disinterested person" pursuant to Section 101(14) of the
Bankruptcy Code.
The firm can be reached at:
Joel M. Aresty, Esq.
Joel M. Aresty, P.A.
309 1st Ave S
Tierra Verde, FL 33715
Telephone: (305) 904-1903
Facsimile: (800) 559-1870
Email: Aresty@Mac.com
About Jaffan International
Jaffan International, LLC, doing business as Crave Restaurant and
Bar, sought protection under Chapter 11 of the Bankruptcy Code
(Bankr. M.D. Fla. Case No. 22-00459) on Feb. 4, 2022, with as much
as $500,000 in both assets and liabilities. Ahmad Maher AlJaffan,
managing member, signed the petition.
Judge Roberta A. Colton oversees the case.
The Debtor is represented by the law firm of Joel M. Aresty, P.A.
JONES DESLAURIERS: Fitch Rates New $350MM 1st Lien Term Loan 'B+'
-----------------------------------------------------------------
Fitch Ratings has assigned a 'B+'/'RR3' to the new USD350 million
senior secured first lien term loan issued by Navacord Corp.'s
subsidiary, Jones DesLauriers Insurance Management Inc. The
proceeds of this transaction will be utilized to refinance the
company's existing CAD first lien term Loan due March 2028 and for
general corporate purposes, including near-term M&A opportunities.
Fitch will withdraw ratings on the existing CAD first lien term
loan.
Fitch currently rates Navacord Corp. and its wholly owned borrower
subsidiary, Jones DesLauriers Insurance Management Inc., at 'B'.
The Rating Outlook is Stable. While leverage is notably high at
more than 8.0x pro forma, Navacord's 'B' rating is reflective of
the company's resilient organic growth profile and strong operating
margin profile. The rating also reflects the company's position as
a top four commercial brokerage firm in Canada. Limitations to the
rating include an aggressive financial policy and the expectation
to maintain an elevated leverage profile.
Fitch will withdraw rating on the existing CAD first lien term loan
as the proceeds from the new senior secured USD first lien term
loan will be utilized to pay the existing CAD first lien term
loan.
KEY RATING DRIVERS
Solid Market Position: Fitch views Navacord's solid position in the
Canadian insurance distribution market as a credit positive, with
it being the fourth largest commercial brokerage and benefits firm
in Canada. The insurance brokerage industry is highly fragmented
and competitive, but Navacord realized solid organic revenue growth
at least in the mid-single digit range since 2017 (double digit
organic growth from 2019-2023). This compares favorably against
other Fitch-rated brokers in North America. Fitch expects the
industry to grow mid-to high-single digits over time but certain
higher growth brokers such as Navacord may exceed this growth rate.
Navacord also sustained solid EBITDA margins in the high-20% to
mid-30% range in the past five years.
High Leverage: Fitch views high leverage as a limiting factor for
the Issuer Default Rating (IDR) and will likely constrain the
rating to the 'B' rating category in the near term. Pro forma for
M&A and the pending secured first lien term loan issuance, reported
EBITDA leverage (debt/EBITDA) is in the low 8.0x range while net
leverage is in the mid-6.0x range.
Fitch expects Navacord will continue to maintain an elevated
leverage profile due to its aggressive M&A strategy. Well-managed
insurance brokerage firms can tolerate a higher degree of financial
leverage versus other Corporates sectors given the industry's high
degree of stability throughout the economic cycle, with large
brokers having only experienced organic sales declines in the
low-single digit range following the 2008 global financial crisis.
However, Navacord's leverage is higher versus other Fitch-rated
peers.
M&A Growth Strategy: Fitch views Navacord's aggressive M&A growth
strategy as a key rating consideration that constrains the IDR to
the 'B' category. The $275 million acquisition of Home Hardware
Financial, completed in July 2023 is the company's largest deal to
date and was a relatively expensive valuation for the sector, so
Fitch will closely monitor the company's execution in the next
couple of years. The company has spent nearly $1.379 billion on 89
deals since FY 2019, including the Home Hardware deal, and Fitch
expects acquisitions will remain core to its future strategy.
Diversification: Navacord benefits from broad client, broker, and
carrier diversification although it solely operates in Canada. It
operates throughout Canada, with more than 50,000 commercial
clients and its top 20 customers only comprise 4% of revenue. Its
top 10 producers are less than 10% of revenue and it is also
diversified by insurance carrier partners. It is also fairly well
diversified by lines of business, with a mix of commercial property
& casualty (P&C), personal P&C, and benefits offerings. Its
geographic concentration does not constrain the rating to its
current IDR, given its strong market position. However, Fitch
believes the company could expand outside Canada over time but
there would be an execution risk associated with the geographical
diversification.
Stable Business Model: Fitch believes the company operates a fairly
predictable business model in an industry that performs well
throughout the economic cycle. Navacord was founded in 2014 and has
a more limited
operating history versus other Fitch-rated brokers, but Fitch
expects the industry to exhibit much lower revenue and earnings
declines in a recession versus other sectors given the highly
sticky nature of insurance. Many large global insurance brokers
grew organically each year since 2007, except for a modest decline
during 2009, and also grew during the 2020 coronavirus pandemic.
However, Navacord faces more unique risk given its geographic
exposure solely to the Canadian market.
Cash Flow Ratios Constrained: Fitch-defined FCF will likely be
constrained over the ratings horizon due to debt-financed M&A that
has led to high financial leverage and rising interest costs.
Interest coverage is also low in the near term and near Fitch's
negative sensitivity threshold for the 'B' IDR. Importantly, much
of the constrained FCF is a derivative of its M&A roll-up strategy,
and Fitch views the underlying cash generation profile of the
business as healthy. If the company were to significantly slow its
M&A strategy, Fitch believes cash flow generation would improve
materially unless all of excess cash flow were then diverted to
shareholder capital returns.
DERIVATION SUMMARY
Navacord competes in a fragmented landscape of insurance brokerage
and benefits services providers that includes other local/regional
companies, national agents and large multi-national brokers. Fitch
rates numerous companies in the insurance brokerage industry that
are comparable in terms of scale, operating profile and business
model.
Navacord maintains a top four position among commercial brokers in
Canada and has established reasonable size with revenue of more
than CAD500 million and annual premium near CAD3.0 billion.
However, it remains relatively small and has meaningfully higher
financial leverage versus larger global brokers such as Marsh &
McLennan Companies, Inc. (A-), Aon plc (BBB+), among others.
The 'B' rating is reflective of the company's strong historic
growth profile, solid profitability, and diversification among its
customers and business segments. This is offset by an aggressive,
debt-financed M&A strategy, that has led to high gross leverage.
KEY ASSUMPTIONS
-- Organic revenue growth in the mid-single digit percentage range
over the ratings horizon plus contributions from incremental M&A
through FY 2025;
-- EBITDA margins estimated in the low-30% range, with some
forecasted pressures from cost/wage inflation and additional growth
investments. Also, Fitch expects further cost normalization as the
company returns to post COVID working practices;
-- Cash taxes and working capital remain a modest use of cash flow
in the next few years;
-- Fitch assumes Navacord will continue its growth-driven M&A
strategy and will incur cash outflows related to purchase and
integration costs. Fitch assumes this remains the primary use of
cash flow and incremental M&A is funded via internal cash flow and
incremental debt.
Recovery Analysis
-- For entities rated 'B+' and below, where default is closer and
recovery prospects are more meaningful to investors, Fitch
undertakes a tailored, or bespoke, analysis of recovery upon
default for each issuance. The resulting debt instrument rating
includes a Recovery Rating or published 'RR' (graded from RR1 to
RR6), and is notched from the IDR accordingly. In this analysis,
there are three steps: (i) estimating the distressed enterprise
value (EV); (ii) estimating creditor claims; and (iii) distribution
of value.
-- Fitch assumes Navacord would emerge from a default scenario
under the going concern approach liquidation.
Key assumptions used in the recovery analysis are as follows:
(i) Going concern EBITDA - Fitch estimates a going concern EBITDA
of approximately CAD145 million, or 36% below the company's current
run-rate EBITDA. This lower level of EBITDA considers competitive
and/or company specific pressures that hurt earnings in the future
while also considering that its M&A strategy could lead to a much
higher EBITDA base before any risk of bankruptcy.
(ii) EV Multiple - Fitch assume a 6.5x multiple, which is validated
by historic public company trading multiples, industry M&A and past
reorganization multiples Fitch has seen across various industries.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- EBITDA Leverage, or Debt/EBITDA, sustained below 6.5x;
-- (CFO-capex)/Debt sustained in low double digits.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Deterioration in operating fundamentals that lead to weaker
revenue trends, margin underperformance, and compression of cash
flows;
-- Interest Coverage, or EBITDA/Interest paid, sustained below
1.5x;
-- (CFO-capex)/Debt sustained near 0% or below;
-- EBITDA Leverage sustained above 8.0x.
LIQUIDITY AND DEBT STRUCTURE
Strong Liquidity: Navacord has a fairly well-positioned balance
sheet pro forma for the new senior term loan issuance. The company
had roughly CAD165 million of unrestricted cash on its balance at
April 30, 2023, and is projected to have more following the debt
raise. Additionally, it has full access to its CAD150 million
senior secured revolving credit facility. Cash needs are fairly
minimal given the nature of its business that has low capital
intensity and working capital needs, along with fairly manageable
debt amortization and cash taxes. This should provide sufficient
liquidity to both operate its current business as well as invest
for organic growth and M&A.
Debt Structure: Pro forma for the upcoming first lien term loan
issuance, the company's debt capital consists of: (i) a CAD150
million senior secured revolver (ii) USD350 million of new senior
secured first lien term loan; (iii) USD725 million of senior
secured notes and (iv) USD300 million of senior unsecured notes.
Its revolver and term loans are floating rate while the senior
notes will have a fixed coupon. There are no near-term maturities
with the first lien debt and senior notes maturing in 2030. Fitch
expects its debt will grow in the future as the company continues
its M&A driven growth strategy.
ISSUER PROFILE
Navacord Corp. was founded in 2014 and competes in the Canadian
commercial insurance brokerage space. It was incorporated under
Navacord Corp. in 2018. The company is a top four commercial
insurance broker and benefits provider in Canada. Navacord has a
network of over 40 offices serving in excess of 50,000 commercial
clients.
K & H AUTOMOTIVE: Taps Going Sebastian Fisher as Accountant
-----------------------------------------------------------
K & H Automotive Services, LLC received approval from the U.S.
Bankruptcy Court for the Middle District of Louisiana to employ
Going, Sebastian, Fisher and Lebeouf, LLP as accountant.
The firm will be paid at these rates:
Accountant $60 to $200 per hour
Staff employed $95 per hour
Darren Cart, CPA, a partner at Going, Sebastian, Fisher and
Lebeouf, disclosed in a court filing that his firm is a
"disinterested person" pursuant to Section 101(14) of the
Bankruptcy Code.
The firm can be reached at:
Darren J. Cart, CPA
Going, Sebastian, Fisher, and Lebeouf, LLP
2811 S Union St.
Opelousas, LA 70570
Tel: (337) 942-3041
Fax: (337) 942-7112
Email: info@goingcpa.com
About K & H Automotive Services
K & H Automotive Services, LLC filed a Chapter 11 bankruptcy
petition (Bankr. M.D. La. Case No. 23-10314) on May 16, 2023, with
as much as $50,000 in assets and $100,001 to $500,000 in
liabilities. Judge Michael A. Crawford oversees the case.
The Debtor tapped Sternberg Naccari & White, LLC as legal counsel
and Going, Sebastian, Fisher and Lebeouf, LLP as accountant.
KDC/ONE DEVELOPMENT: Moody's Rates New $500MM Secured Notes 'B3'
----------------------------------------------------------------
Moody's Investors Service assigned a B3 rating to kdc/one
Development Corporation, Inc.'s $500 million of senior secured
notes due 2028. All other ratings, including the B3 Corporate
Family Rating, the B3-PD Probability of Default Rating, and the B3
ratings of the first lien credit facility instruments, are
unchanged at this time. The rating outlook is stable. Moody's
expects to withdraw the company's B3 ratings of the existing first
lien term loans when the refinancing is completed.
KDC/ONE plans to utilize the proceeds from the senior secured notes
and a new credit facility to repay the reminder of its existing
credit facility. The transaction is credit positive because it will
extend the maturity profile to 2028 with only a modest expected
increase in cash interest expense. KDC US Holdings, Inc. is a
co-borrower of the senior secured notes.
Assignments:
Issuer: kdc/one Development Corporation, Inc.
Backed Senior Secured Regular Bond/Debenture, Assigned B3
RATINGS RATIONALE
The B3 CFR reflects KDC/ONE's good market position, high leverage
and low free cash flow. Operating performance is being negatively
affected by customer volume declines because of a temporary period
of inventory destocking as well as consumers being more selective
amid higher prices. Moody's expects the company's credit metrics to
improve, including a decline in debt-to-EBITDA leverage to a low
6.0x range by fiscal 2024 (ending April 30, 2024), supported by new
business wins and cost reductions. The rating also reflects some
degree of customer concentration, as well as revenue and earnings
volatility because of shifts in customer volume and product
development. Moreover, Moody's expects financial policies to be
aggressive under private equity ownership including the potential
for partially debt-funded acquisitions that may periodically
increase leverage. KDC/ONE's aggressive growth plans are
contributing to weak free cash flow due to a period of high capital
spending to build capacity as well as research and development.
Free cash flow was negative in fiscal 2023. Moody's expects
improvement in fiscal 2024 due to lower capital spending and a
reduction in working capital, but free cash flow is likely to
remain low including headwinds from higher interest rates. Margins
are thin on a reported basis, as compared to other consumer
products companies, partially because of the large amount of
materials costs that are passed through to customers but also
because contract manufacturing is highly competitive and customers
are cost-conscious.
KDC/ONE's ratings are supported by its growing presence as a global
manufacturer specializing in custom formulation, packaging and
manufacturing solutions for beauty, personal care and home care
brands, supported by solid innovation capabilities and
long-standing customer relationships. The beneficial effect of raw
material pass-through arrangements reduces the company's exposure
to the volatility of input costs such as essential oils, alcohols
and specialty chemicals. KDC/ONE is experiencing good demand for
its expanded offerings of essential products across home, beauty
and personal care segments. The capacity expansion provides good
de-leveraging opportunity through earnings growth that should also
lead to positive free cash flow as capital spending subsides. The
company also has longstanding relationships with its top 10
customers with average tenure of 30 years, serving 135 brands cross
multiple product categories and geographic locations.
KDC/ONE has adequate liquidity. Support is provided by $81 million
of cash and approximately $350 million availability from the
revolving credit facilities as of April 30, 2023 (including the $60
million revolving credit facility that expires in December 2023).
Moody's expects KDC/ONE to generate modest free cash flow in the
next 12 months as capital spending gradually declines and working
capital improves. The cash on balance sheet provides good coverage
for the $10 million of required first lien term loans amortization
payments. The revolver has a springing maximum net debt-to-EBITDA
leverage covenant of 7.75x that becomes effective if usage exceeds
35%. Moody's does not expect the covenant to be tested. However, if
the covenant is triggered, Moody's expects the company to meet the
financial covenant with a good cushion in part because the EBITDA
definition including numerous add-backs including pro forma cost
savings. The term loans have no financial maintenance covenants.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
The stable outlook reflects Moody's expectation that volume
declines will moderate as the April 2024 fiscal year progresses,
KDC/ONE's revenue and EBITDA will improve in the next 12-18 months
due to new business wins and cost reductions, and the company will
maintain adequate liquidity including meaningful cash and modestly
positive free cash flow.
The ratings could be upgraded if the company is able to post
consistent positive organic revenue growth with a stable to higher
margin, generates comfortably positive free cash flow, demonstrates
a track record of more conservative financial policies, and if it
reduces and sustains debt/EBITDA below 6.0x. A rating upgrade would
also require improved quality of earnings, including a reduction in
the amount of other cash costs. Better earnings quality would
translate to higher operating cash flow, which would better support
the company's growth.
The ratings could be downgraded in the case of operational
difficulties including weakness in customer volumes, revenue or
margins that prevents the company from generating positive free
cash flow. A deterioration in liquidity, debt funded shareholder
distributions, leveraging acquisitions, or EBITA-to-interest at or
below 1.0x could also lead to a downgrade.
The principal methodology used in this rating was Consumer Packaged
Goods published in June 2022.
KDC/ONE is a global manufacturer specializing in custom
formulation, packaging and manufacturing solutions for beauty,
personal care and home care brands, supported by solid innovation
capabilities, and long standing customer relationships. The
company's customers are beauty, personal care and home care
companies largely in North America, with growing presence in Europe
and Asia. The company has been majority owned by Cornell Capital
following a 2018 leveraged buyout. The company generated roughly
$2.6 billion in revenue for the fiscal year ending April 30, 2023.
LAKE DISTRICT: Seeks to Hire The Shopping Center Group as Broker
----------------------------------------------------------------
The Lake District, LLC seeks approval from the U.S. Bankruptcy
Court for the Western District of Tennessee to employ The Shopping
Center Group, LLC, a Memphis-based broker, to sell certain
outparcels owned by the company.
The broker's listing agreements provide for a commission of 4
percent of the gross sales price of the property if there is no
cooperating agent involved in the sale or, in the alternative, 7
percent inclusive of a cooperating agent.
Shawn Massey, a real estate agent at The Shopping Center Group,
disclosed in a court filing that the firm is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
The broker can be reached at:
Kevin S. Royal
The Shopping Center Group, LLC
5101 Wheelis Drive, Suite 106
Memphis, TN 38117
Telephone: (901) 869-2720
Email: Shawn.Massey@tscg.com
About The Lake District LLC
The Lake District, LLC is the developer of The Lake District, a
major mixed-use development in Lakeland, Tenn.
The Debtor sought relief under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. W.D. Tenn. Case No. 23-21496) on March 24, 2023, with
$80,244,507 in assets and $47,247,115 in liabilities. Yehuda
Netanel, manager, signed the petition.
Judge Jennie D. Latta oversees the case.
Michael P. Coury, Esq., at Glankler Brown, PLLC serves as the
Debtor's legal counsel.
LEONA TRANSPORTATION: Taps Wisdom Professional as Accountant
------------------------------------------------------------
Leona Transportation, Inc. seeks approval from the U.S. Bankruptcy
Court for the Eastern District of New York to employ Wisdom
Professional Services, Inc.
The Debtor requires an accountant to prepare its monthly operating
reports.
Wisdom Professional Services will be compensated at $200 per
report.
The firm received an initial retainer in the amount of $2,500.
Michael Shtarkman, a partner at Wisdom Professional Services,
disclosed in a court filing that his firm is a "disinterested
person" pursuant to Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Michael Shtarkman
Wisdom Professional Services Inc.,
626 Sheepshead Bay Rd, Ste 640
Brooklyn, NY 11224
Telephone: (718) 554-6672
Email: michael@shtarkmancpa.com
mshtarkmancpa@gmail.com
About Leona Transportation
Leona Transportation, Inc. filed a Chapter 11 bankruptcy petition
(Bankr. E.D.N.Y. Case No. 23-41546) on May 3, 2023, with as much as
$1 million in both assets and liabilities. Judge Elizabeth S. Stong
oversees the case.
The Debtor tapped the Law Offices of Alla Kachan, P.C. as
bankruptcy counsel and Wisdom Professional Services, Inc. as
accountant.
LTL MANAGEMENT: Disclosure Statement Hearing Set for August 22
--------------------------------------------------------------
The Hon. Michael B. Kaplan of the U.S. Bankruptcy Court for the
District of New Jersey will hold a hearing on Aug. 22, 2023, at
10:00 a.m. (Prevailing Eastern Time) at the Bankruptcy Court at the
Clarkson S. Fisher U.S. Courthouse, 402 East State Street,
Courtroom No. 8, Trenton, New Jersey 08608, to consider whether to
approve the adequacy of the disclosure statement describing the
amended Chapter 11 plan of reorganization of LTL Management LLC.
Objections to the approval of the Debtor's disclosure statement, if
any, must be filed by Aug. 8, 2023.
The Plan provides a mechanism by which Talc personal injury claims
against the Debtor will be channeled to a trust established
pursuant to Sections 524(g) and 105(g) of the Bankruptcy Code.
Upon approval of the disclosure statement, the Debtor intends to
solicit holders of Talc personal injury claims and equity interests
of the Debtor for support of the plan. You should read the plan
and disclosure statement carefully for details about how the plan,
if approved, will affect your rights. For the specific terms and
conditions of all the releases and injunctions provided for in the
plan, and the precise scope of the claims and demands to be
channeled, please refer to the specific terms of the plan, which
can be obtained at https://dm.epiq11.com/case/ltl.
Pursuant to the solicitation procedures, only holders of class 4
claims (Talc Personal Injury Claims) and holders of class 6
interests (Equity Interests of the Debtor) are entitled to receive
a ballot for casting a vote on the plan. Holders of claims in all
other classes under the plan are deemed to accept the plan, because
they are unimpaired by the Plan.
About LTL Management
LTL Management, LLC, is a subsidiary of Johnson & Johnson (J&J),
which was formed to manage and defend thousands of talc-related
claims and oversee the operations of Royalty A&M. Royalty A&M owns
a portfolio of royalty revenue streams, including royalty revenue
streams based on third-party sales of LACTAID, MYLANTA/MYLICON and
ROGAINE products.
LTL Management filed a petition for Chapter 11 protection (Bankr.
W.D.N.C. Case No. 21-30589) on Oct. 14, 2021. The case was
transferred to New Jersey (Bankr. D.N.J. Case No. 21-30589) on Nov.
16, 2021. The Hon. Michael B. Kaplan is the case judge. At the
time of the filing, the Debtor was estimated to have $1 billion to
$10 billion in both assets and liabilities.
The Debtor tapped Jones Day and Rayburn Cooper & Durham, P.A., as
bankruptcy counsel; King & Spalding, LLP and Shook, Hardy & Bacon
LLP as special counsel; McCarter & English, LLP as litigation
consultant; Bates White, LLC as financial consultant; and
AlixPartners, LLP as restructuring advisor. Epiq Corporate
Restructuring, LLC, is the claims agent.
An official committee of talc claimants was formed in the Debtor's
Chapter 11 case on Nov. 9, 2021. On Dec. 24, 2021, the U.S.
Trustee for Regions 3 and 9 reconstituted the talc claimants'
committee and appointed two separate committees: (i) the official
committee of talc claimants I, which represents ovarian cancer
claimants, and (ii) the official committee of talc claimants II,
which represents mesothelioma claimants.
The official committee of talc claimants I tapped Genova Burns LLC,
Brown Rudnick LLP, Otterbourg PC and Parkins Lee & Rubio LLP as its
legal counsel. Meanwhile, the official committee of talc claimants
II is represented by the law firms of Cooley LLP, Bailey Glasser
LLP, Waldrep Wall Babcock & Bailey PLLC, Massey & Gail LLP, and
Sherman Silverstein Kohl Rose & Podolsky P.A.
Re-Filing of Chapter 11 Petition
On Jan. 30, 2023, a panel of the Third Circuit issued an opinion
directing the Court to dismiss the 2021 Chapter 11 Case on the
basis that it was not filed in good faith. Although the Third
Circuit panel recognized that the Debtor "inherited massive
liabilities" and faced "thousands" of future claims, it concluded
that the Debtor was not in financial distress before the filing.
On March 22, 2023, the Third Circuit entered an order denying the
Debtor's petition for rehearing. The Third Circuit entered an
order denying LTL's stay motion on March 31, 2023, and, on the dame
day, issued its mandate directing the Bankruptcy Court to dismiss
the 2021 Chapter 11 Case.
The Bankruptcy Court entered an order dismissing the 2021 Case on
April 4, 2023.
Johnson & Johnson on April 4, 2023, announced that its subsidiary
LTL Management LLC (LTL) has re-filed for voluntary Chapter 11
bankruptcy protection (Bankr. D.N.J. Case No. 23-12825) to obtain
approval of a reorganization plan that will equitably and
efficiently resolve all claims arising from cosmetic talc
litigation against the Company and its affiliates in North
America.
In the new filing, J&J said it has agreed to contribute up to a
present value of $8.9 billion, payable over 25 years, to resolve
all the current and future talc claims, which is an increase of
$6.9 billion over the $2 billion previously committed in connection
with LTL's initial bankruptcy filing in October 2021. LTL also has
secured commitments from over 60,000 current claimants to support a
global resolution on these terms.
LTL MANAGEMENT: J&J Ordered to Pay $18.8M at Cal. Talc-Cancer Trial
-------------------------------------------------------------------
Jef Feeley of Bloomberg News reports that Johnson & Johnson was
ordered to pay $18.8 million to a California man who blamed the
company's talcum-based powders for giving him cancer in the
company’s first trial in almost two years over accusations it hid
the health risks of its iconic baby powder.
Jurors in state court in state court in Oakland concluded Tuesday,
July 18, 2023, that J&J's baby powder helped cause Anthony
Hernandez Valadez's mesothelioma, a specific type of cancer linked
to asbestos exposure.
About LTL Management
LTL Management, LLC, is a subsidiary of Johnson & Johnson (J&J),
which was formed to manage and defend thousands of talc-related
claims and oversee the operations of Royalty A&M. Royalty A&M owns
a portfolio of royalty revenue streams, including royalty revenue
streams based on third-party sales of LACTAID, MYLANTA/MYLICON and
ROGAINE products.
LTL Management filed a petition for Chapter 11 protection (Bankr.
W.D.N.C. Case No. 21-30589) on Oct. 14, 2021. The case was
transferred to New Jersey (Bankr. D.N.J. Case No. 21-30589) on Nov.
16, 2021. The Hon. Michael B. Kaplan is the case judge. At the
time of the filing, the Debtor was estimated to have $1 billion to
$10 billion in both assets and liabilities.
The Debtor tapped Jones Day and Rayburn Cooper & Durham, P.A., as
bankruptcy counsel; King & Spalding, LLP and Shook, Hardy & Bacon
LLP as special counsel; McCarter & English, LLP as litigation
consultant; Bates White, LLC as financial consultant; and
AlixPartners, LLP as restructuring advisor. Epiq Corporate
Restructuring, LLC, is the claims agent.
An official committee of talc claimants was formed in the Debtor's
Chapter 11 case on Nov. 9, 2021. On Dec. 24, 2021, the U.S.
Trustee for Regions 3 and 9 reconstituted the talc claimants'
committee and appointed two separate committees: (i) the official
committee of talc claimants I, which represents ovarian cancer
claimants, and (ii) the official committee of talc claimants II,
which represents mesothelioma claimants.
The official committee of talc claimants I tapped Genova Burns LLC,
Brown Rudnick LLP, Otterbourg PC and Parkins Lee & Rubio LLP as its
legal counsel. Meanwhile, the official committee of talc claimants
II is represented by the law firms of Cooley LLP, Bailey Glasser
LLP, Waldrep Wall Babcock & Bailey PLLC, Massey & Gail LLP, and
Sherman Silverstein Kohl Rose & Podolsky P.A.
Re-Filing of Chapter 11 Petition
On Jan. 30, 2023, a panel of the Third Circuit issued an opinion
directing the Court to dismiss the 2021 Chapter 11 Case on the
basis that it was not filed in good faith. Although the Third
Circuit panel recognized that the Debtor "inherited massive
liabilities" and faced "thousands" of future claims, it concluded
that the Debtor was not in financial distress before the filing.
On March 22, 2023, the Third Circuit entered an order denying the
Debtor's petition for rehearing. The Third Circuit entered an
order denying LTL's stay motion on March 31, 2023, and, on the dame
day, issued its mandate directing the Bankruptcy Court to dismiss
the 2021 Chapter 11 Case.
The Bankruptcy Court entered an order dismissing the 2021 Case on
April 4, 2023.
Johnson & Johnson on April 4, 2023, announced that its subsidiary
LTL Management LLC (LTL) has re-filed for voluntary Chapter 11
bankruptcy protection (Bankr. D.N.J. Case No. 23-12825) to obtain
approval of a reorganization plan that will equitably and
efficiently resolve all claims arising from cosmetic talc
litigation against the Company and its affiliates in North
America.
In the new filing, J&J said it has agreed to contribute up to a
present value of $8.9 billion, payable over 25 years, to resolve
all the current and future talc claims, which is an increase of
$6.9 billion over the $2 billion previously committed in connection
with LTL's initial bankruptcy filing in October 2021. LTL also has
secured commitments from over 60,000 current claimants to support
a global resolution on these terms.
MOUNTAIN EXPRESS: Deadline to File Claims Set for August 28
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Texas set
Aug. 28, 2023, at 5:00 p.m. (Prevailing Central Time), as the
deadline for all persons and entities of Mountain Express Oil
Company and its debtor-affiliates to file proofs of claim against
the Debtors.
The Court also set Sept. 14, 2023, at 5:00 p.m. (Prevailing Central
Time) as the deadline for governmental units to file their claims
against the Debtors.
Each proof of claim must be filed, including supporting
documentation, by either (1) electronic submission through PACER
(Public Access to Court Electronic Records at
https://ecf.txsb.uscourts.gov), (2) electronic submission using the
interface available on the claims on noticing agent's website at
http://www.kccllc.net/mountainexpressoil,or (3) if submitted
through non-electronic means, by U.S. Mail or other hand delivery
system, so as to be actually received by the claims and noticing
agent on or before the claims bar date or the governmental bar
date, or any other applicable bar date, at:
Mountain Express Oil Claims Processing Center
c/o KCC
222 N. Pacific Coast Highway, Suite 300
El Segundo, California 90245
The proof of claim form, the payment request form, the bar date
order, and all other pleadings filed in the Chapter 11 cases are
available free of charge on the claims agent's website at:
http://kccllc.net/mountainexpressoil. If you require additional
information regarding the filing of a proof of claim, you may
contact the Debtors' claims and noticing agent, KCC information
line at 866-967-0495 (US & Canada Toll Free).
About Mountain Express Oil Company
Mountain Express Oil Company operates in the fuel distribution and
retail convenience industry. As one of the largest fuel
distributors in the American South, the company and its affiliates
serve 828 fueling centers and 27 travel centers across 27 states.
Mountain Express Oil Company and its affiliates sought protection
under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Texas
Lead Case No. 23-90147) on March 18, 2023. In the petition signed
by its chief restructuring officer, Michael Healy, Mountain Express
Oil Company disclosed $100 million to $500 million in both assets
and liabilities.
Judge David R. Jones oversees the cases.
Pachulski Stang Ziehl & Jones, LLP represents the Debtors as
bankruptcy counsel. The Debtors also tapped Raymond James
Financial, Inc. as investment banker; FTI Consulting, Inc. as
financial advisor; and Axinn, Veltrop & Harkrider LLP as special
antitrust counsel. Michael Healy, senior managing director at FTI,
serves as the Debtors' chief restructuring officer. Kurtzman Carson
Consultants, LLC is the claims, noticing and solicitation agent and
administrative advisor.
The U.S. Trustee for Region 7 appointed an official committee to
represent unsecured creditors in the Debtors' Chapter 11 cases. The
committee is represented by Marcus Helt, Esq.
OILFIELD EQUIPMENT: Case Summary & 11 Unsecured Creditors
---------------------------------------------------------
Debtor: Oilfield Equipment Rental, LLC
d/b/a Rapid Flow Testing
3800 South County Rd 1232
Midland TX 79706
Chapter 11 Petition Date: July 25, 2023
Court: United States Bankruptcy Court
Eastern District of Texas
Case No.: 23-41325
Debtor's Counsel: Howard Marc Spector, Esq.
SPECTOR & COX, PLLC
12770 Coit Road
Suite 850
Dallas TX 75251
Tel: (214) 365-5377
Email: hms7@cornell.edu
Total Assets: $3,621,705
Total Liabilities: $2,081,715
The petition was signed by Nancy Fuller as member.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 11 unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/YB4UVBI/Oilfield_Equipment_Rental_LLC__txebke-23-41325__0001.0.pdf?mcid=tGE4TAMA
PACIFICA CMFM: Wins Cash Collateral Access
------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of New York
authorized Pacifica CMFM Group LLC and Centric FM Solutions, Inc.
to use cash collateral on an interim basis in accordance with the
budget, through July 27, 2023.
The Debtors require the use of cash collateral to continue
operating their businesses in the ordinary course.
The Debtors owe the U.S. Small Business Administration $1.858
million under a secured note, which amount includes all unpaid
prepetition accrued interest, legal fees and costs. In addition,
the Debtors have a line of credit loan with TD Bank in the total
amount currently owed of approximately $88,862. As collateral
security for such TD Bank Loan.
The SBA will receive from the Debtor as adequate protection for its
interest in the cash collateral, monthly payments of $8,885 as
adequate protection for any diminution in the value of any
collateral securing the Secured Claim as a result of the use of
cash collateral, commencing in the month of the date of entry of
the Order.
The Replacement Lien will be subject to liens and other interests
in property of the Debtors' estates existing as of the Petition
Date that are both (i) valid, enforceable and not subject to
avoidance by any trustee under the Bankruptcy Code; and (ii) senior
under applicable non-bankruptcy law to, or encumber assets not
encumbered by, the Lender's liens in the Prepetition Collateral as
of the Petition Date.
These events constitute an "Event of Default":
a. The Debtors' Chapter 11 Cases are dismissed or converted to
cases under chapter 7 of the Bankruptcy Code;
b. A chapter 11 trustee or examiner with expanded powers is
appointed in the Debtors' Chapter 11 Cases;
c. The Debtors collectively cease operations of their present
businesses or take any material action for the purpose of effecting
the foregoing without the prior written consent of the Lender,
except to the extent contemplated by the Budget or otherwise
approved by the Court;
d. The Debtors expend any material amounts of funds or monies for
any purpose other than those set forth in the Budget or as
otherwise approved by the Court;
e. The Debtors fail to comply with any of the terms of the Interim
Order;
f. The Debtors expend Cash Collateral in an amount in excess of 10%
in total disbursements over the period of the Budget, without the
advance written consent of the Lender; or
g. Except as may be authorized under the Court's Order or with
prior written consent of the Lender, the Debtors transfer
Collateral or cash collateral to any non-Debtor.
A final hearing on the matter is set July 27 at 10 a.m.
A copy of the order is available at https://urlcurt.com/u?l=iIITOV
from PacerMonitor.com.
About Pacifica CMFM Group LLC
Pacifica CMFM Group LLC and Centric Fm Solutions, Inc. are
affiliated and related businesses owned and operated by a husband
and wife, Chip Zoegall and Rihman Farid. Pacifica provides
construction management, program management, as well as consulting
services for commercial and multi-unit residential facilities.
Farid is the sole shareholder and serves as its President, with
Zoegall providing operational support.
Centric provides facility management and support services for
capital improvement programs and everyday facility support to
primarily commercial entities. Zoegall is the sole shareholder and
serves as its President.
The Debtors sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D.N.Y. Case No. 8-23-72182) on June 20,
2023. In the petition signed by Riham Farid, president, the Debtor
disclosed up to $50,000 in assets and up to $500,000 in
liabilities.
Judge Louis A. Scarcella oversees the case.
Todd E. Duffy, Esq., at DuffyAmedeo LLP, represents the Debtor as
legal counsel.
PAO BAY INVESTMENT: Case Summary & Eight Unsecured Creditors
------------------------------------------------------------
Debtor: Pao Bay Investment Corp
7600 Bayside Lane
Miami Beach, FL 33141
Business Description: The Debtor is engaged in activities related
to real estate.
Chapter 11 Petition Date: July 25, 2023
Court: United States Bankruptcy Court
Southern District of Florida
Case No.: 23-15800
Debtor's Counsel: Scott Alan Orth, Esq.
LAW OFFICES OF SCOTT ALAN ORTH, P.A.
3860 Sheridan Street. Suite A
Hollywood, FL 33021
Tel: 305-757-3300
Email: scott@orthlawoffice.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Paola Oramas as president.
A full-text copy of the petition containing, among other items, a
list of the Debtor's eight unsecured creditors is available for
free at PacerMonitor.com at:
https://www.pacermonitor.com/view/KYCRXZY/Pao_Bay_Investment_Corp__flsbke-23-15800__0001.0.pdf?mcid=tGE4TAMA
PARK SLOPE: Case Summary & One Unsecured Creditor
-------------------------------------------------
Debtor: Park Slope 317A 21st ST. LLC
1345 East 81st Street
Brooklyn, NY 11228
Business Description: The Debtor is the owner of the residential
property located at 317 A 21st Street,
Brooklyn, New York, which is a three family
dwelling.
Chapter 11 Petition Date: July 25, 2023
Court: United States Bankruptcy Court
Eastern District of New York
Case No.: 23-42628
Judge: Hon. Nancy Hershey Lord
Debtor's Counsel: Michael W. Holland, Esq.
LAW OFFICES OF MICHAEL W. HOLLAND
421 Willis Avenue
Williston Park NY 11596
Tel: (516) 248-2655
Email: mwh@michaelhollandlaw.com
Total Assets: $6,000
Total Liabilities: $1,500,000
The petition was signed by Salvatore Garzillo as managing member.
The Debtor listed Christina Trust, a Division of Wilmington LLP
Saving Fund Society FSB, not in its individual capacity, but as
trustee of ARLP Trust, as its sole unsecured creditor holding a
claim of $300,000 on account of mortgage loan.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/X22OMSA/Park_Slope_317A_21st_ST_LLC__nyebke-23-42628__0001.0.pdf?mcid=tGE4TAMA
PERATIV GENERAL: Gets Initial Stay Order Under CCAA
---------------------------------------------------
An initial order pursuant to the Companies' Creditors Arrangement
Act was rendered on July 3, 2023 by the Superior Court of Quebec
("Initial Order") with respect to Perativ General Partnership,
Perativ Holdings Limited, Perativ Solutions Inc., Perativ Partnerco
Limited and Saratoga ATM Armored Services Inc.
The Initial Order provides for an initial stay of all proceedings
against the Debtors as well as their respective directors and
officers until July 13, 2023 and appoints PricewaterhouseCoopers
Inc., LIT (Philippe Jordan, CPA, CIRP, LIT), as Monitor of the
business and of the financial affairs of the Debtors. On July 13,
2023, the Superior Court of Quebec issued an Amended and Restated
Initial Order extending the stay period against the Debtors as well
as their respective directors and officers until Aug. 31, 2023.
When the pandemic hit the Canadian and worldwide economy, the
ensuing business closures and government-imposed restrictions
represented a direct impact on Perativ and its ATM operations
across the country as consumers and business quickly converted
day-to-day operations to a heightened use of electronic payment
methods. Cash payments as a potential means of Covid transmission
were considered ill-advised.
The two years which followed brought on a severe downturn in
operations and consequently adversely affected the financial
performance of the Debtor companies.
As a result, the operating performance decreased substantially from
FY19 to FY21 as a result of ATMs not being operational. In fact,
the number of ATM terminals in the market decreased from
approximately 10,352 in FY19 to approximately 7,300 by 2022
representing a 29,5% decrease as a result of the response to the
pandemic. It should be noted that though the cash payment industry
has generally been declining since the advent of electronic payment
methods, the pandemic accelerated this shift much more than the
trends until then.
Operating losses ensued and totaled $25.8 million, $61.3 million
and $12.6 million, in 2020, 2021, and 2202 respectively.
The Monitor can be reached at:
Pricewaterhousecoopers Inc.
2500-1250 Boul Rene-Levesque O
Montreal, QC H3B 4Y1
Philippe Jordan
Tel: 514-205-5232
Email: philippe.jordan@cpwc.com
Jonathan Zidel
Tel: 514-205-5222
Email: jonathan.d.zidel@cpwc.com
Ryan Moncarz
Tel: 514-833-0530
Email: ryan.moncarz@pwc.com
Counsel for the Monitor:
Fasken Martineau DuMoulin LLP
800 Square-Victoria Street, Suite 3500
Montreal, Quebec, H4Z 1E9
Alain Riendeau
Tel: 514-397-7678
Email: ariendeau@fasken.com
Brandon Farber
Tel: 514-397-5179
Email: bfarber@fasken.com
Counsel for the Companies:
Davies Ward Phillips & Vineberg LLP
1501, McGill College Avenue, 8th Floor
Montreal, Quecbec H3A 3N9
Tel: 514-841-6576
Email: clachance@dwpy.com
Monitor's web page for the proceedings:
https://www.pwc.com/ca/perativ.
Perativ General Partnership is an automatic teller machine operator
in Canada and distributes cash to bank-card holders via
approximately 7,000 branded and unbranded ATMS.
RELIABLE CASTINGS: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Reliable Castings Corporation
1521 West Michigan Street
Sidney, OH 45365
Business Description: Reliable Castings is a supplier of quality
aluminum castings, specializing in aluminum,
sand, and permanent mold castings, prototype
castings, mold finishing and repair, and
tooling design and fabrication.
Chapter 11 Petition Date: July 25, 2023
Court: United States Bankruptcy Court
Southern District of Ohio
Case No.: 23-31157
Judge: Hon. Guy R. Humphrey
Debtor's Counsel: Patricia J. Friesinger, Esq.
COOLIDGE WALL CO., L.P.A.
33 West First Street, Suite 200
Dayton, OH 45402
Tel: 937-223-8177
Fax: 937-223-6705
Email: friesinger@coollaw.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Robert J. Kuhn as authorized
representative.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 20 largest unsecured creditors is available
for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/AEUJAHA/Reliable_Castings_Corporation__ohsbke-23-31157__0001.0.pdf?mcid=tGE4TAMA
RIVERSIDE MILK: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Riverside Milk LLC
28485 County Road 2
Snyder, CO 80750
Chapter 11 Petition Date: July 25, 2023
Court: United States Bankruptcy Court
District of Colorado
Case No.: 23-13267
Judge: Hon. Michael E. Romero
Debtor's Counsel: Jonathan M. Dickey, Esq.
KUTNER BRINEN DICKEY RILEY PC
1660 Lincoln Street, Suite 1720
Denver, CO 80264
Tel:303-832-2400
Email: jmd@kutnerlaw.com
Total Assets: $1,161,130
Total Liabilities: $18,999,089
The petition was signed by A. Foy Chapin as authorized
representative.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 20 largest unsecured creditors is available
for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/2TJBSHQ/Riverside_Milk_LLC__cobke-23-13267__0001.0.pdf?mcid=tGE4TAMA
SATURNO DESIGN: Seeks to Hire Foster Garvey as Legal Counsel
------------------------------------------------------------
Saturno Design, LLC seeks approval from the U.S. Bankruptcy Court
for the District of Oregon to employ Foster Garvey P.C. as its
legal counsel.
The firm's services include:
a. providing the Debtor with advice on its duties and
responsibilities;
b. preparing and filing bankruptcy schedules;
c. assisting in obtaining use of cash collateral;
d. defending motions for relief from stay, analyses and
objections to claims, prosecution and defense of adversary
proceedings, formulation and approval of a Chapter 11 plan and
disclosure statement, negotiations with creditors and other parties
involved in the Debtor's Chapter 11 case; and
e. other necessary legal services.
The firm will be paid based upon its normal and usual hourly
billing rates and will be reimbursed for out-of-pocket expenses
incurred.
On April 28, the Debtor provided the firm with a retainer of
$35,000 for legal services. On May 4, the Debtor provided the firm
with a supplement to its retainer in the amount of $15,000 for
legal services in connection with the bankruptcy matter. On June
21, the Debtor provided Foster Garvey with a supplement to its
retainer in the amount of $10,000 in connection with additional
legal services required.
Tara Schleicher, Esq., a partner at Foster Garvey, disclosed in a
court filing that the firm is a "disinterested person" as the term
is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Tara J. Schleicher, Esq.
Dan Youngblut, Esq.
Foster Garvey P.C.
121 SW Morrison St., 11th Floor
Portland, OR 97204
Tel: (503) 228-3939
Fax: (503) 226-0259
Email: tara.schleicher@foster.com
dan.youngblut@foster.com
About Saturno Design
Saturno Design, LLC owns and operates a business that provides
website development and software solutions to the legal industry.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Ore. Case No. 23-31455) on July 3, 2023,
with as much as $1 million in assets and $1 million to $10 million
in liabilities. Rodolfo Bozas, managing partner, signed the
petition.
Judge David W. Hercher oversees the case.
Tara J. Schleicher, Esq., at Foster Garvey P.C., represents the
Debtor as legal counsel.
SIO2 MEDICAL: $350 Million Debt Swap Chapter 11 Plan Approved
-------------------------------------------------------------
Rick Archer of Law360 reports that a Delaware bankruptcy judge
Tuesday, July 18, 2023, approved medical packaging company SiO2
Medical Products Inc.'s $350 million debt-swap plan after being
told all objections to the proposal had been resolved.
The Plan embodies an agreement reached between the Debtors, the
Committee, Oaktree, and Athos in the Settlement Term Sheet. The
Settlement Term Sheet has a few key features including: (a)
releases for Oaktree and all Oaktree Related Parties, Athos and all
Athos Related Parties, employees of the Debtors, and the vendors
and customers of the Reorganized Debtors, other than BARDA and
Moderna; (b) a minimum recovery pool for Holders of General
Unsecured Claims of $1.25 million; (c) resolution to potential
litigation related to the claim for the Make-Whole Amount; and (d)
establishment of, and funding for, the Liquidation Trust.
A full-text copy of the Second Amended Disclosure Statement dated
June 6, 2023 is available at https://urlcurt.com/u?l=enH0db from
Donlin, Recano and Co., Inc., claims agent.
About SiO2 Medical Products
SiO2 Medical Products, Inc. is a material life sciences company
that is at the precipice of mass-commercialization of its
breakthrough materials science technology that is poised to
revolutionize the pharmaceutical industry. Major pharmaceutical
players are testing the company's vials, syringes, tubes, and other
offerings, and the Company anticipates large-scale adoption in the
relative near term.
SiO2 Medical Products and its affiliates sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case
No. 23-10366) on March 29, 2023. In the petition signed by its
chief executive officer, Yves Steffen, SiO2 Medical Products
disclosed $100 million to $500 million in assets and $500 million
to $1 billion in liabilities.
Judge John T. Dorsey oversees the cases.
The Debtors tapped Kirkland Ellis, LLP and Kirkland & Ellis
International, LLP as general bankruptcy counsels; Cole Schotz P.C.
as local bankruptcy counsel; Alvarez & Marshal North America, LLC
as financial and restructuring advisor; and Lazard as investment
banker. Donlin, Recano and Co., Inc. is the claims, noticing,
solicitation and administrative agent.
SMITHFIELD FOODS: Moody's Alters Outlook on 'Ba1' CFR to Stable
---------------------------------------------------------------
Moody's Investors Service affirmed Smithfield Foods, Inc.'s Ba1
Corporate Family Rating, Ba1-PD Probability of Default Rating, and
the Ba1 rating on the company's senior unsecured global notes.
Moody's revised the outlook to stable from positive.
The outlook change to stable from positive reflects that the
diversity provided by the packaged food business will not be
sufficient to mitigate the significant consolidated earnings and
cash flow declines being experienced due to the downturn in the
pork market. Moody's expects that Smithfield's credit metrics will
deteriorate in the next six to 12 months, as an oversupply of hogs
and fresh pork combined with soft consumer demand negatively impact
the company's operating profits and free cash flow. High grain
costs are likely to also negatively impact operating profits at the
company's US hog production segment. Moody's expects Smithfield's
debt-to-EBITDA leverage to increase to near 3x in the next six to
12 months and then decline to under 2.5x thereafter as a correction
in hog inventories is likely to lift prices.
Moody's affirmed the existing ratings because the company maintains
good liquidity including sizable unused revolver capacity to manage
the cyclical slowdown in the pork market and restore leverage to a
level in line with expectations for the rating. Cost inflation,
economic uncertainty in the US and Europe, and the company's
predominant focus on a single protein (pork) create the potential
for meaningful volatility in EBITDA and operating cash flow in the
next 12 to 18 months. Smithfield's operating profits have continued
to be volatile in recent years despite the focus on growing the
packaged foods business since WH Group Limited (Baa2 stable)
purchased the company in 2013.
The following ratings/assessments are affected by the action:
Affirmations:
Issuer: Smithfield Foods, Inc.
Corporate Family Rating, Affirmed Ba1
Probability of Default Rating, Affirmed Ba1-PD
Senior Unsecured Notes, Affirmed Ba1
Outlook Actions:
Issuer: Smithfield Foods, Inc.
Outlook, Changed To Stable From Positive
RATINGS RATIONALE
Smithfield's Ba1 CFR reflects its large scale and global leadership
in hog production, fresh pork, and value-added packaged pork
products. Additionally, the rating is also supported by the
company's good liquidity and positive long-term fundamentals for
the pork industry from growing global demand for protein. These
strengths are balanced against high earnings volatility inherent in
the protein processing industry, predominant protein focus on pork
and financial obligations to parent, WH Group Limited, in the form
of an ongoing dividend. Cyclical protein market swings, high
capital spending, working capital needs and dividends to WH Group
can limit and create volatility in free cash flow. Moody's expects
Smithfield's debt-to-EBITDA leverage (2.4x as of April 1, 2023
incorporating Moody's adjustments) to potentially increase to
nearly 3x in the next six to 12 months due to the significant
cyclical slowdown in the pork market related to hog oversupply and
high input costs. Smithfield's continued focus on growing its
higher margin and more stable value-added packaged meats business
is favorably providing a partial mitigant to the high volatility of
the commodity pork business. The significant earnings decline in
the current pork market downturn nevertheless indicates that
overall business volatility remains high. Smithfield's good
liquidity should allow the company to manage through the downturn
and reduce debt-to-EBITDA below 2.5x by the end of 2024.
Smithfield's financial policy is to have a limit on debt-to-EBITDA
of 2.5x (based on the company's calculation). The company is
weighed down by event risk associated with the recent settling of a
price fixing case that elevates governance concerns.
Smithfield has good liquidity supported by $144 million of cash as
of April 1, 2023 and roughly $2.5 billion of unused capacity on
$2.8 billion of committed facilities after factoring in borrowings
and coverage of outstanding commercial paper. The facilities
consist of a $2.1 billion senior unsecured revolver, a $275 million
accounts receivable securitization facility, and $413 million in
international facilities. The senior unsecured revolver expires in
May 2027, the accounts receivable securitization facility matures
in 2025, and the international facilities have various maturities,
the latest of which is in 2025. In addition, the company has four
senior unsecured notes that mature in 2027-2031. Smithfield
incurred a free cash flow deficit of -$204 million in the 12 months
ended April 1, 2023, although Moody's is forecasting positive free
cash flow in a $200 million to $300 million range in the next 12 to
18 months.
Smithfield's ESG CIS-3 credit impact reflects its exposure to
environmental and social risks that are only partially mitigated by
a conservative financial policy. The main environmental risks stem
from its significant reliance on water and natural capital as the
company has to feed and nurture live hogs on its wholly-owned
farms, which necessitates use of agriculture-based feed,
consumption of a lot of water, and investment and management to
minimize the environmental effects of animal waste and prevent
disease from reducing supply. Smithfield's social risk is driven
mainly by responsible production, as its pork must adhere to food
safety and quality measures in order to prevent recalls or
contamination. The company's conservative financial policies and
good liquidity provide financial flexibility to manage the
environmental and social risks.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The stable outlook reflects Moody's view that Smithfield's good
liquidity will provide the company sufficient liquidity to manage
the cyclical slowdown in the pork market. Leverage is likely to
increase and be weak for the rating by the end of 2023, but Moody's
expects a recovery in the pork market will reduce debt-to-EBITDA
leverage to below 2.5x and lead to positive free cash flow in
2024.
The ratings could be downgraded if debt/EBITDA is sustained above
2.5x or if the company's liquidity deteriorates. Other events that
could contribute to a downgrade include further cost inflation, a
decline in demand for pork products relative to other proteins,
prolonged trade disputes in key export markets, a disease outbreak
or a persistet pork supply and demand imbalance.
A rating upgrade could occur if Smithfield maintains conservative
financial policies including debt/EBITDA sustained below 2.0x and
strong liquidity, comprised of a sizeable cash balance and at least
$1 billion of liquidity including cash and undrawn committed
multi-year bank facilities. In addition, the company would need to
maintain overall earnings stability, continue to improve the EBITDA
margin, and generate consistent and comfortably positive free cash
flow while maintaining good reinvestment to be considered for an
upgrade.
The principal methodology used in these ratings was Protein and
Agriculture published in November 2021.
Smithfield Foods, Inc., headquartered in Smithfield, Virginia, is
one of the world's largest vertically integrated protein companies.
Smithfield primarily focuses on pork through production, processing
and packaged foods though it also has a smaller poultry business.
Net revenue during the last twelve months ended April 1, 2023
totaled approximately $19.1 billion. Smithfield's Hong Kong-based
parent company, publicly-traded WH Group Limited, is an investment
holding company that owns 100% of Smithfield along with 70.3% of
publicly-traded Henan Shuanghui Investment & Development Co., Ltd.
(Shuanghui; SZSE: 000895), the largest pork processor in China.
STARWOOD CAPITAL: Defaults on $212.5M Mortgage on Tower Place 100
-----------------------------------------------------------------
John Gittelsohn of Bloomberg Law reports that Barry Sternlicht's
Starwood Capital Group is in default on a $212.5 million mortgage
backed by an Atlanta office tower, another sign of mounting
distress in US commercial real estate. The mortgage on Tower Place
100, in the Georgia capital's Buckhead district, matured on July 9,
2023 and Starwood failed to refinance or pay off the debt,
according to a filing compiled by Computershare.
About Starwood Capital Group
Starwood Capital Group LLC -- https://www.starwoodcapital.com/--
operates as a real estate investment firm. The Company focuses on
office, retail, industrial, multi-family, hotel, land, and debt
investments. Starwood Capital Group serves clients worldwide.
STAT EMERGENCY: Court OKs Interim Cash Collateral Access
--------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Michigan in
Flint authorized STAT Emergency Medical Services, Inc. to use cash
collateral on an interim basis in accordance with the budget.
The Debtor requires the use of cash collateral for the maintenance,
preservation and liquidation of its assets, and for the operation
of its business and the payment of business expenses in the
ordinary course.
The amount of cash collateral necessary for the Debtor to use to
avoid immediate and irreparable harm before the date of the final
hearing or the date the Order becomes a final order in the absence
of a timely objection and final hearing is $88,432 to pay the
immediate operating expenses of the Debtor's business for the 30
days following the Petition Date, as set forth in the Second
Amended Budget.
Huntington Bank and any other secured creditors that may claim an
interest in the cash collateral of Debtor, to the extent that
Debtor uses such cash collateral and does not replace it, are
granted replacement liens in all types and descriptions of
collateral that were secured by the applicable pre-petition loan
documents, which are created, acquired, or arise after the Petition
Date, but only to the extent of any diminution in the value of such
cash collateral, to the extent that there is any diminution.
As additional adequate protection to Huntington Bank, the Debtor
will pay it $13,363 per month as set forth in the Budget.
A hearing on the matter is set for August 2, 2023 at 11 a.m.
A copy of the order is available at https://urlcurt.com/u?l=ukyMFv
from PacerMonitor.com.
About STAT Emergency Medical Services, Inc.
STAT Emergency Medical Services, Inc. provides emergency medical
services.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D. Mich. Case No. 23-31085) on July 5,
2023. In the petition signed by Stephen M. Lund, president, the
Debtor disclosed up to $50,000 in assets and up to $10 million in
liabilities.
Judge Joel D. Applebaum oversees the case.
Kim K. Hillary, Esq., at Schafer and Weiner, PLLC, represents the
Debtor as legal counsel.
STAT EMERGENCY: Taps Schafer and Weiner as Legal Counsel
--------------------------------------------------------
Stat Emergency Medical Services, Inc. seeks approval from the U.S.
Bankruptcy Court for the Eastern District of Michigan to employ
Schafer and Weiner, PLLC as its legal counsel.
The firm's services include:
a. counseling as to the rights, powers, and duties of the
Debtor;
b. counseling, preparing and filing necessary legal documents in
the Debtor's Chapter 11 case;
c. counseling, preparing and filing responses to legal documents
filed in the case;
d. attending meetings and providing representation in
negotiations with creditors and other parties involved in the
case;
e. counseling, commencing and conducting possible litigation
necessary or appropriate to assert rights, protect assets of the
estate, or otherwise further the goals of restructuring;
f. counseling and prosecuting possible actions to collect and
recover property for the benefit of the estate;
g. counseling and assisting in reviewing, estimating, and
resolving any claims asserted against the estate;
h. counseling and taking possible action as to executory
contracts and unexpired lease assumption, assignment, and
rejection;
i. counseling and taking possible action on tax matters;
j. counseling and taking possible action in connection with
potential sales of assets;
k. counseling and assisting in efforts to prepare, solicit,
confirm, and consummate a Chapter 11 plan; and
l. performing all other necessary legal services in connection
with the case.
The firm will be paid at these rates:
Daniel J. Weiner $590 per hour
Howard M. Borin $450 per hour
Joseph K. Grekin $450 per hour
John J. Stockdale, Jr. $430 per hour
Kim K. Hillary $385 per hour
Jeffery J. Sattler $360 per hour
Leon N. Mayer $330 per hour
Brandi M. Dobbs $290 per hour
Legal Assistant $170 per hour
Michael E. Baum (Of Counsel) $615 per hour
In addition, the firm will receive reimbursement for out-of-pocket
expenses incurred.
Kim Hillary, Esq., a partner at Schafer and Weiner, disclosed in a
court filing that the firm is a "disinterested person" pursuant to
Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Kim K. Hillary, Esq.
Jeffery J. Sattler, Esq.
Schafer and Weiner, PLLC
40950 Woodward Ave., Ste. 100
Bloomfield Hills, MI 48304
Tel: (248) 540-3340
Email: khillary@schaferandweiner.com
jsattler@schaferandweiner.com
About STAT Emergency
STAT Emergency Medical Services, Inc. filed a petition under
Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. E.D. Mich.
Case No. 23-31085) on July 5, 2023, with as much as $50,000 in
assets and $1 million to $10 million in liabilities. Charles
Mouranie of CMM & Associates has been appointed as Subchapter V
trustee.
Judge Joel D. Applebaum oversees the case.
Kim K. Hillary, Esq., at Schafer and Weiner, PLLC represents the
Debtor as counsel.
SUPPLY CHAIN: Gets OK to Tap Bowen Law Group as Corporate Counsel
-----------------------------------------------------------------
Supply Chain Warehouses Savannah, LLC received approval from the
U.S. Bankruptcy Court for the Southern District of Georgia to
employ The Bowen Law Group.
The firm will represent the Debtor for any and all corporate
matters.
Ryan Schmidt, Esq., an attorney at The Bowen Law Group, will be
paid at his hourly rate of $250.
The Debtor owed the firm a pre-bankruptcy balance of $425.
Mr. Schmidt 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:
Ryan W. Schmidt, Esq.
The Bowen Law Group
7 East Congress Street, Suite 1001
Savannah, GA 31401
Telephone: (912) 544-2050
Email: rschmidt@thebowenlawgroup.com
About Supply Chain Warehouses Savannah
Supply Chain Warehouses Savannah, LLC operates warehousing and
storage facility in Port Wentworth, Ga.
Supply Chain Warehouses Savannah filed a petition under Chapter 11,
Subchapter V of the Bankruptcy Code (Bankr. S.D. Ga. Case No.
23-40540) on June 23, 2023, with $1 million to $10 million in both
assets and liabilities. Tiffany Caron has been appointed as
Subchapter V trustee.
Judge Edward J. Coleman, III oversees the case.
The Debtor tapped Jon Levis, Esq., at Levis Law Firm, LLC as
bankruptcy counsel; John D. Haupt, CPA, at Williams and Haupt, PC
as accountant; and Ryan W. Schmidt, Esq., at The Bowen Law Group,
as corporate counsel.
SURGE TRANSPORTATION: Case Summary & 20 Top Unsecured Creditors
---------------------------------------------------------------
Debtor: Surge Transportation, Inc.
7077 Bonneval Road
Suite 150
Jacksonville, FL 32216
Business Description: Founded in 2016 by Omar Singh, Surge is a
Jacksonville based trucking/freight
broker licensed with the U.S. Department of
Transportation and the United States Federal
Motor Carrier Safety Administration
specializing in sourcing extra truckload
capacity during peak seasons and other
periods of high demand. The Debtor
maintains satellite offices in Chicago,
Illinois and Ashburn, Virginia.
Chapter 11 Petition Date: July 24, 2023
Court: United States Bankruptcy Court
Middle District of Florida
Case No.: 23-01712
Debtor's Counsel: Bradley R. Markey, Esq.
THOMAS MARKEY
50 North Laura Street
Suite 1600
Jacksonville, FL 32202
Tel: 904-358-4000
Email: brm@thamesmarkeylaw.com
Estimated Assets: $10 million to $50 million
Estimated Liabilities: $10 million to $50 million
The petition was signed by Omar Singh as president.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/ZZR27ZI/Surge_Transportation_Inc__flmbke-23-01712__0001.0.pdf?mcid=tGE4TAMA
List of Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
1. Anheuser Busch Claims for $150,000
Transportation Log. Services Freight Damages
PO Box 503018
Saint Louis, MO 63150
2. Apex Capital Corp Purchase of $659,644
PO Box 961029 Accounts
Fort Worth, TX 76161 Receivable
3. CompassFundingSolutionsLLC Purchase of $251,514
7531 S Ferdinand Ave Accounts
Bridgeview, IL Receivable
60455
4. Crestmark TPG LLC Purchase of $133,657
800 Crescent Center Dr Accounts
Franklin, TN 37067 Receivable
5. E2Open Purchase of $400,000
915 E 32nd St. Suite B Accounts
Holland, MI 49423 Receivables
6. Ecapital Freight Purchase of $229,743
Factoring Corp Accounts
5928 Pascal Court Receivable
Carlsbad, CA 92008
7. England Carrier Svcs Purchase of $182,703
Dba CR England Accounts
PO Box 953086 Receivable
St. Louis, MO 63195
8. Firstline Funding Purchase of $203,544
1108 S Washington Ave Accounts
Madison, SD 57040 Receivable
9. Love's Financial Purchase of $167,314
PO Box 96-0479 Accounts
Oklahomoa City, OK Receivable
73196
10. Next Day Funding Purchase of $105,546
PO Box 640 Accounts
Chicago Heights, IL Receivable
60412
11. OTR Solutions Purchase of $489,817
PO Box 1175760 Accounts
Atlanta, GA Receivable
30368-7576
12. Phoenix Capital Group Purchase of $222,643
PO Box 1415 Accounts
Des Moines, IA Receivable
50305
13. Project44 License Fees $110,000
222 W Merchandise
Mart Plaza
#1744
Chicago, IL 60654
14. RTS Financial Serv Inc. Purchase of $2,486,848
PO Box 840267 Accounts
Dallas, TX 75284 Receivable
15. Saint John Capital Corp Purchase of $145,952
PO Box 6503 Accounts
Carol Stream, IL Receivable
60197-6503
16. TBS Factoring Serv Purchase of $157,227
PO Box 210513 Accounts
Kansas City, MO Receivable
73154
17. Transam Financial Svcs Purchase of $280,710
dba TAFS Accounts
PO Box 872632 Receivable
Kansas City, MO 64187
18. Triumph Financial Svcs Purchase of $1,436,299
PO Box 610028 Accounts
Dallas, TX 75261 Receivable
19. Valoroo Staffing Services $173,500
9466 Black Mountain Rd
#125
San Diego, CA 92126
20. Wex Factoring LLC Purchase of $349,947
Dba Fleet One Accounts
PO Box 94565 Receivable
Cleveland, OH 44101
TABULA RASA: Seeks to Hire Bradford Law Offices as Counsel
----------------------------------------------------------
Tabula Rasa, Co. seeks approval from the U.S. Bankruptcy Court for
the Eastern District of North Carolina to employ Bradford Law
Offices to handle its Chapter 11 case.
Bradford Law Offices' hourly rates are below:
Attorney time outside court $450
Attorney time in court $450
Paralegal time $185
The Debtor agrees to make an initial deposit in the amount of
$6,738 upon the execution of the agreement.
Danny Bradford, Esq., an attorney at Bradford Law Offices,
disclosed in a court filing that the firm is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
Danny Bradford, Esq.
Bradford Law Offices
455 Swiftside Drive, Suite 106
Cary, NC 27518-7198
Telephone: (919) 758-8879
Email: Dbradford@bradford-law.com
About Tabula Rasa
Tabula Rasa, Co. is a North Carolina corporation that has operated
for the past four years as a licensed distillery in the Raleigh and
Garner, North Carolina area. It also operates a small bar at its
facility on Rand Mill Road in Garner.
Tabula Rasa sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D.N.C. Case No. 23-01911) on July 10,
2023, with up to $500,000 in assets and up to $1 million in
liabilities. Paul Jacob Howland, president, signed the petition.
Judge David M. Warren oversees the case.
Danny Bradford, Esq., at Bradford Law Offices represents the Debtor
as bankruptcy counsel.
TECH-MAR ENTERPRISES: Taps The Lane Law Firm as Bankruptcy Counsel
------------------------------------------------------------------
Tech-Mar Enterprises, LLC seeks approval from the U.S. Bankruptcy
Court for the Southern District of Texas to employ The Lane Law
Firm, PLLC as its counsel.
The firm will render these legal services:
(a) assist, advise, and represent the Debtor relative to the
administration of its Chapter 11 case;
(b) assist, advise, and represent the Debtor in analyzing its
assets and liabilities, investigating the extent and validity of
lien and claims, and participating in and reviewing any proposed
asset sales or dispositions;
(c) attend meetings and negotiate with representatives of
secured creditors;
(d) assist the Debtor in the preparation, analysis, and
negotiation of any plan of reorganization and disclosure
statement;
(e) take all necessary action to protect and preserve the
interests of the Debtor;
(f) appear, as appropriate, before the bankruptcy court, the
appellate courts and other courts in which matters may be heard,
and protect the interests of the Debtor before said courts and the
Office of the U.S. Trustee; and
(g) perform all other necessary legal services in this case.
The hourly rates of the firm's counsel and staff are as follows:
Robert C. Lane, Partner $550
Joshua D. Gordon, Partner $500
Associate Attorneys $375 - $425
Bankruptcy Paralegals/Legal Assistants $150 - $190
In addition, the firm will seek reimbursement for expenses
incurred.
The firm received payments for its retainer in the amount of
$31,500 for financial advice and representation of the Debtor.
Mr. Lane 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:
Robert C. Lane, Esq.
Joshua D. Gordon, Esq.
A. Zachary Casas, Esq.
The Lane Law Firm, PLLC
6200 Savoy, Suite 1150
Houston, TX 77036
Telephone: (713) 595-8200
Facsimile: (713) 595-8201
Email: notifications@lanelaw.com
joshua.gordon@lanelaw.com
zach.casas@lanelaw.com
About Tech-Mar Enterprises
Tech-Mar Enterprises LLC is an IT service provider in Houston,
Texas.
The Debtor filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. S.D. Texas Case No. 23-32570) on July 10,
2023, with $182,174 in assets and $1,544,635 in liabilities. Tom
Howley of Howley Law, PLLC has been appointed as Subchapter V
trustee.
Judge Eduardo V. Rodriguez oversees the case.
Robert C. Lane, Esq., at the Lane Law Firm, represents the Debtor
as counsel.
TK CLEANING: Seeks to Hire David Hodson as Real Estate Broker
-------------------------------------------------------------
TK Cleaning & Lawn Service, LLC seeks approval from the U.S.
Bankruptcy Court for the District of South Carolina to employ David
Hodson, a real estate broker at Properties of the Carolinas, to
assist in the sale of its commercial estate in Rock Hill, S.C.
Mr. Hodson will be paid a 6 percent commission from the sale of its
property located at 240 Old Rawlinson Road, and 8 percent from the
sale of its property located at 270 Old Rawlinson Road.
Mr. Hodson disclosed in a court filing that he is a "disinterested
person" within the meaning of Section 101(14) of the Bankruptcy
Code.
The broker can be reached at:
David A. Hodson
Properties of the Carolinas
20460 Chartwell Center Drive, Suite 2
Cornelius, NC 28031
Telephone: (704) 533-5201
About TK Cleaning & Lawn Service
TK Cleaning and Lawn Service, LLC is a landscape service company in
Rock Hill, S.C.
TK Cleaning and Lawn Service filed a petition under Chapter 11,
Subchapter V of the Bankruptcy Code (Bankr. D.S.C. Case No.
22-03485) on Dec. 19, 2022, with $1 million to $10 million in both
assets and liabilities. Troy Kelley, owner, signed the petition.
Judge Helen E. Burris oversees the case.
The Debtor tapped Jane H. Downey, Esq., at Moore Bradley Myers Law
Firm, PA as legal counsel; Newpoint Advisors Corporation as
financial advisor; and BNA CPAs & Advisors as accountant.
On May 26, 2023, the court confirmed the Debtor's Chapter 11 small
business Subchapter V plan.
TOCCOA OUTPOST: Seeks to Hire Tarpy Cox Fleishman as Counsel
------------------------------------------------------------
The Toccoa Outpost, LLPC seeks approval from the U.S. Bankruptcy
Court for the Eastern District of Tennessee to employ Tarpy Cox
Fleishman & Leveille, PLLC to handle its Chapter 11 case.
The firm will be paid at these rates:
Thomas Leveille $375 per hour
Ed Shultz $350 per hour
Taylor Drinnen $250 per hour
Paralegals $75 to $95 hour
In addition, the firm will receive reimbursement for out-of-pocket
expenses incurred.
Tarpy received an initial retainer of $5,000, plus the filing fee
of $1,738.
Lynn Tarpy, Esq., a partner at Tarpy, disclosed in court filings
that the firm is a "disinterested person" pursuant to Section
101(14) of the Bankruptcy Code.
Tarpy can be reached at:
Lynn Tarpy, Esq.
Tarpy Cox Fleishman & Leveille, PLLC
1111 N. Northshore, Suite N-290
Knoxville, TN 37919
Tel: (865) 588-1096
Email: ltarpy@tcflattorneys.com
About The Toccoa Outpost
The Toccoa Outpost, LLPC filed a Chapter 11 bankruptcy petition
(Bankr. E.D. Tenn. Case No. 23-31164) on July 5, 2023, with as much
as $1 million in both assets and liabilities. Judge Suzanne H.
Bauknight oversees the case.
The Debtor is represented by Lynn Tarpy, Esq., at Tarpy Cox
Fleishman & Leveille, PLLC.
TOLIAO IOROI: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Toliao Ioroi Holding LLC
d/b/a Cassava
d/b/a Cassava Bakery & Cafe
3519 Balboa St
San Francisco, CA 94121
Business Description: The Debtor operates a restaurant in
California with indoor and outdoor seating.
Chapter 11 Petition Date: July 26, 2023
Court: United States Bankruptcy Court
Northern District of California
Case No.: 23-30498
Judge: Hon. Hannah L. Blumenstiel
Debtor's Counsel: Kevin Tang, Esq.
TANG & ASSOCIATES
17011 Beach Blvd
Suite 900
Huntington Beach, CA 92647
Tel: (714) 594-7022
Fax: (714) 594-7024
Email: kevin@tang-associates.com
Total Assets: $718,637
Estimated Liabilities: $2,982,464
The petition was signed by Yuka Ioroi as president.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 20 largest unsecured creditors is available
for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/A3JBDJA/Toliao_Ioroi_Holding_LLC__canbke-23-30498__0001.0.pdf?mcid=tGE4TAMA
TRUCK DEPOT LLC: Taps Troutman Law Firm as Bankruptcy Counsel
-------------------------------------------------------------
The Truck Depot, LLC seeks approval from the U.S. Bankruptcy Court
for the District of Oregon to employ Troutman Law Firm, PC to
handle its Chapter 11 case.
The firm will charge an hourly fee of $495 for attorney time and
$220 for paralegal time.
The retainer is $26,738.
Ted Troutman, Esq., an attorney at Troutman Law Firm, disclosed in
a court filing that his firm is a "disinterested person" pursuant
to Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Ted A. Troutman, Esq.
Troutman Law Firm, PC
5075 SW Griffith Dr., Suite 220
Beaverton, OR 97005
Tel: (503) 292-6788
Fax: (503) 596-2371
Email: tedtroutman@sbcglobal.net
About The Truck Depot
The Truck Depot, LLC filed Chapter 11 petition (Bankr. D. Ore. Case
No. 23-31457) on July 5, 2023, with as much as $50,000 in assets
and $1 million to $10 million in liabilities. Amy Mitchell of
Comcast Corp. has been appointed as Subchapter V trustee.
Judge Peter C. Mckittrick oversees the case.
Ted A. Troutman, Esq., at Troutman Law Firm, P.C. represents the
Debtor as counsel.
TUPPERWARE BRANDS: Expects to Breach Covenants for 2023 1st Half
----------------------------------------------------------------
Tupperware Brands Corporation recently indicated it expects to file
with the Securities and Exchange Commission its Annual Report on
Form 10-K for fiscal year 2022 by August 2023 and its Quarterly
Report on Form 10-Q for the quarter ended April 1, 2023, by late
September 2023; however, there can be no assurance that either the
Form 10-K or Form 10-Q will be filed by those dates.
The Company previously identified multiple prior period
misstatements and material weaknesses in internal control over
financial reporting for the periods covered by the Form 10-K, and
it is continuing its work to finalize its financial close process,
including the restatement of its previously issued financial
statements, and the identification, quantification, and remediation
of material weaknesses, as applicable.
In its Current Report on Form 8-K filed on April 7, 2023, the
Company also reported its conclusion that there is substantial
doubt about its ability to continue as a going concern. The Company
has entered into a limited waiver with its lenders. Despite
entering into the Waiver, the Company is currently forecasting
non-compliance with certain of its financial covenants set forth in
the Credit Agreement in the first and second quarters of fiscal
year 2023 and is forecasting insufficient liquidity to make its
interest payment in July 2023 under the Credit Agreement, which
would further limit its ability to borrow under the Credit
Agreement. The Company also has violated certain covenants under
the Credit Agreement due to the delay in filing (a) its Form 10-K
(and the anticipated report of the Independent Registered Public
Accounting Firm containing an explanatory paragraph expressing
substantial doubt about the Company's ability to continue as a
going concern) and (b) its Form 10-Q.
"If the Company is unable to obtain adequate capital resources or
further amendments to the Credit Agreement to fund its operations,
the Company believes that it would not be able to continue to
operate its business pursuant to its current business plan. This
would require management to further modify its operations to reduce
spending to a sustainable level by, among other things, delaying,
scaling back or eliminating some or all of the Company's ongoing or
planned investments in corporate infrastructure, business
development, sales and marketing, research and development and
other activities, which would have a material impact on the
Company's operations and its ability to increase revenues, or it
may be forced to reorganize or liquidate," Tupperware said.
Waiver
On June 30, 2023, Tupperware Brands Corp., Tupperware Products AG,
and certain other subsidiaries of the Company entered into the
Limited Waiver of Mandatory Prepayment and Payment Deferral
Agreement in connection with the Credit Agreement dated as of
November 23, 2021, with Wells Fargo Bank, National Association, as
administrative agent. The Waiver, among other things, (a) provides
for a waiver of the Term Loan mandatory prepayment requirements set
forth in the Credit Agreement in connection with the Company's
receipt of approximately $10.4 million in net cash proceeds from
the sale of certain of its Indonesian real property interests, on
the condition that, among other things, the Borrowers make a
one-time prepayment of the Global Tranche Revolving Loans (as
defined in the Credit Agreement) in an aggregate principal amount
of $6 million by July 10, 2023, (b) provides for a deferral of the
$2,500,000, $500,000, and €2,200,000 principal amortization
payments required to be made on or about June 30, 2023, by the
Borrowers with respect to the USD Term Loans, the USD Term-2 Loans,
and the EUR Term Loans (each as defined in the Credit Agreement),
respectively, until July 31, 2025, and (c) provides that on and
after the Waiver Effective Date, the consent of all Revolving
Lenders (as defined in the Credit Agreement) (instead of Required
Revolving Lenders (as defined in the Credit Agreement)) will be
required to re-draw the final $6 million of revolving commitments
during the existence of a Default (as defined in the Credit
Agreement).
Material Weaknesses
As previously disclosed in the Company's Current Report on Form 8-K
filed on March 16, 2023 and subsequent Forms 8-K, the Company
disclosed that it had determined that as of December 31, 2022,
multiple material weaknesses existed in its internal control over
financial reporting, and that its work to evaluate its control
environment was ongoing. At present, the Company has determined
that it did not design and maintain an effective control
environment commensurate with its financial reporting requirements.
Specifically, the Company determined that: (a) it did not maintain
a sufficient complement of personnel with an appropriate degree of
internal controls and accounting knowledge, experience, and
training commensurate with its accounting and financial reporting
requirements; and (b) the Company did not design and maintain
effective controls in response to the risks of material
misstatement, and that specifically, changes to existing controls
or the implementation of new controls were not sufficient to
respond to changes to the risks of material misstatement in
financial reporting.
The Company believes that these two material weaknesses contributed
to the following additional material weaknesses:
* The Company did not design and maintain effective controls
related to the accounting for the completeness, occurrence,
accuracy and presentation of income taxes, including the income tax
provision and related income tax assets and liabilities.
* The Company did not design and maintain effective controls
related to the accounting for the completeness, accuracy and
presentation of right of use assets and lease liabilities.
* The Company did not design and maintain effective controls
related to the presentation of gains/losses related to intercompany
loans.
* The Company did not design and maintain effective controls
related to the accounting for the valuation of goodwill.
* The Company did not design and maintain effective controls
related to account reconciliations to support the completeness,
accuracy and presentation of the consolidated financial
statements.
The Company said the material weaknesses are expected to result in
the restatement of the Company's annual consolidated financial
statements in 2021 and 2020 and each of the Company's interim
consolidated financial statements in 2022 and 2021. There can be no
assurance that additional material weaknesses will not be
identified as the Company completes its financial close process.
Additionally, the material weaknesses could result in misstatements
to the Company's accounts and disclosures that would result in a
material misstatement of the annual or interim consolidated
financial statements that would not be prevented or detected. Based
on these material weaknesses, management concluded that as of
December 31, 2022, the Company's internal control over financial
reporting was not effective.
The Company is working to implement remediation efforts with the
objective of significantly improving the Company's internal
controls. A remediation plan will take time to develop, fully
implement, and confirm its effectiveness and sustainability. Until
a remediation plan is adopted and fully implemented and tested, the
material weaknesses are expected to continue to exist.
In April, Tupperware disclosed it has engaged financial advisors to
help improve its capital structure and remediate its doubts
regarding its ability to continue as a going concern.
The consortium of bank lenders include:
Wells Fargo
BMO Harris
Truist
Fifth Third
HSBC USA
Keybank
US Bank
TD Bank
Associated Bank
Synovus
VAUGHN ENVIRONMENTAL: May Use $60,629 of Cash Collateral
--------------------------------------------------------
The U.S. Bankruptcy Code for the District of Oregon authorized
Vaughn Environmental, Inc. to use cash collateral on an interim
basis in accordance with the budget, with a 10% variance.
The Small Business Administration and John Deere each assert a
security interest in cash collateral as of the petition date and
may assert their security interests are perfected.
The Debtor had approximately $674,840 in accounts and receivables
on the Petition Date, along with post-petition receivables. The
cash collateral is the proceeds of the operation of the Debtor's
business.
Each creditor with a security interest in cash collateral will be
granted adequate protection in the form of a replacement lien,
dollar for dollar, in post-petition accounts and accounts
receivable to replace their security interest in liens in
collateral to the extent of pre-petition cash collateral utilized
by Debtors during the pendency of this bankruptcy proceeding.
A final hearing on the matter is set for August 11, 2023 at 3 p.m.
A copy of the order is available at https://urlcurt.com/u?l=vjxeT5
from PacerMonitor.com.
About Vaughn Environmental, Inc.
Vaughn Environmental, Inc. operates a construction and excavation
business.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Ore. Case No. 23-31549) on July 17,
2023. In the petition signed by Raegan Vaughn, president, the
Debtor disclosed up to $10 million in assets and liabilities.
Judge Peter C Mckittrick oversees the case.
Ted A. Troutman, Esq., at Troutman Law Firm P.C., represents the
Debtor as legal counsel.
VERITEXT: Moody's Raises CFR to 'B2', Outlook Stable
----------------------------------------------------
Moody's Investors Service upgraded VT Topco, Inc.'s ("Veritext")
corporate family rating to B2 from B3 and probability of default
rating to B2-PD from B3-PD. Concurrently, Moody's assigned B2
ratings to the company's new debt instruments including the $720
million senior secured first lien term loan, $125 million revolving
credit facility, and $720 million senior secured notes. The ratings
under the company's existing first and second lien senior secured
debt instruments will be withdrawn at close. The outlook remains
stable. Veritext, based in Livingston, New Jersey, is the largest
provider of deposition solutions to the United States and Canada
legal industry.
The CFR upgrade to B2 from B3 reflects Veritext's improved
liquidity, extension of debt maturities, and Moody's expectations
of prudent financial policies in the next 12-18 months. As part of
the transaction the company's $55 million revolving credit facility
will be upsized to $125 million and fully available at close,
significantly improving Veritext's external liquidity profile. The
proposed revolving credit facility is set to expire in 2028, while
term loan and notes to mature in 2030. Veritext is highly
acquisitive, and Moody's expects this to continue but mostly funded
through internally generated cash.
Upgrades:
Issuer: VT Topco, Inc.
Corporate Family Rating, Upgraded to B2 from B3
Probability of Default Rating, Upgraded to B2-PD from B3-PD
Assignments:
Issuer: VT Topco, Inc.
Backed Senior Secured 1st Lien Term Loan B, Assigned B2
Backed Senior Secured 1st Lien Revolving Credit Facility, Assigned
B2
Backed Senior Secured Global Note, Assigned B2
Outlook Actions:
Issuer: VT Topco, Inc.
Outlook, Remains Stable
RATINGS RATIONALE
Veritext's credit profile reflects the company's high
debt-to-EBITDA of 5.3x (pro forma for the LTM period ending June
30, 2023), modest but increasing revenue scale through an
aggressive growth strategy, and narrow service scope mostly as a
provider of deposition services. The company's credit profile
benefits from its leading position in a fragmented market, largely
variable cost structure, high operating margins, solid remote
technology platform, and strong liquidity.
All metrics are Moody's adjusted.
The company's strong liquidity profile is underpinned by Veritext's
healthy cash balances, steady free cash flow generation and full
availability of its revolving credit facility. Pro forma
unrestricted cash expected to close at $41 million. During fiscal
year 2022, the company generated close to $100 million of free cash
flow (adjusted for equity payments to former owners), or
approximately 7% free-cash-flow to debt. Veritext's $125 million
revolving credit facility, which now expires in 2028, is fully
available. The revolver contains a springing maximum first lien net
leverage ratio, tested quarterly when revolver usage is 35% or
more. Moody's does not expect revolver usage to exceed 35% in the
next 12-18 months.
The ratings for Veritext's debt instruments reflect both the
overall Probability of Default of the company, B2-PD, and a loss
given default assessment of the debt instruments. Since Veritext's
debt capital structure consists of first-lien debt only, the term
loan, notes, and revolver ratings, at B2, directly reflects the
company's B2 CFR.
The stable outlook reflects Moody's expectations of continued
deleveraging of the business through organic and inorganic EBITDA
expansion, while maintaining a strong liquidity profile underpinned
by low revolver usage and strong free cash flow generation.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if Moody's expects the company's
financial leverage to be sustained below 5x, while maintaining its
strong liquidity profile with free cash flow-to-debt in the high
single digits.
The ratings could be downgraded if the company's financial
performance deteriorates, liquidity profile weakens, or
acquisitions strategy results in operational disruptions. The
ratings could also be downgraded if Moody's expects debt-to-EBITDA
to be sustained above 6x.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
Veritext, headquartered in Livingston, NJ, is the largest
deposition and litigation support solutions provider to the US and
Canada legal industry. The company's ownership is shared between
CVC Capital Partners, Leonard Green & Partners, and GIC, with CVC
being the majority shareholder.
VINCENT POND: Seeks to Hire Levitt & Slafkes as Bankruptcy Counsel
------------------------------------------------------------------
Vincent Pond Homes MDV, LLC seeks approval from the U.S. Bankruptcy
Court for the District of New Jersey to employ Levitt & Slafkes, PC
to handle its Chapter 11 case.
The hourly rates of the firm's counsel and staff are as follows:
Partners $500
Associates $300 - $400
Paralegals $100
The firm received a retainer fee of $7,500 from the Debtor.
Bruce Levitt, Esq., an attorney at Levitt & Slafkes, disclosed in a
court filing that his firm is a "disinterested person" within the
meaning of Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Bruce H. Levitt, Esq.
Levitt & Slafkes, PC
515 Valley Street, Suite 140
Maplewood, NJ 07040
Telephone: (973) 313-1200
Email: blevitt@lsbankruptcylaw.com
About Vincent Pond Homes MDV
Vincent Pond Homes MDV, LLC sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. D.N.J. Case No. 23-15800) on July
6, 2023, with as much as $1 million in both assets and liabilities.
Bruce H. Levitt, Esq., at Levitt & Slafkes, PC serves as the
Debtor's counsel.
VOIP-PAL.COM INC: Issues Warrants to CEO to Purchase 831.5M Shares
------------------------------------------------------------------
VoIP-Pal.Com Inc. disclosed in a Form 8-K filed with the Securities
and Exchange Commission that it issued warrants to purchase an
aggregate of 831,466,899 shares of the Company's common stock to
Emil Malak, the president, chief executive officer and a director
of the Company, pursuant to the share transfer agreement between
the Company, Digifonica Intellectual Properties (DIP) Limited and
Digifonica (International) Limited dated June 25, 2013, as amended
on July 18, 2013, Oct. 6, 2013, Oct. 31, 2013, Nov. 25, 2013, March
17, 2014, April 21, 2021 and April 23, 2023. Pursuant to the STA,
the Company is obligated to (a) issue Warrants to DIP or DIP's
assignee (in this case Mr. Malak) in a sufficient quantity such
that when exercised, the shares of common stock issuable upon the
exercise of the Warrants plus certain previously-issued shares of
common stock held by DIP, equal 40% of the Company's outstanding
share capital, and (b) issue to DIP that number of shares of the
Series A preferred stock of the Company that allows DIP to retain
voting rights equivalent to the same 40% interest. Each Warrant is
exercisable into one share of the Company's common stock at a price
of $0.001 per share for a period of 10 years.
In connection with the foregoing, on June 30, 2023, the Company
issued an aggregate of 138,420 shares of Series A Stock to Mr.
Malak for nominal consideration.
The Company granted options to purchase an aggregate of 75,000,000
shares of the Company's common stock to certain directors, officers
and consultants of the Company. Each Option is exercisable into
one share of the Company's common stock at a price of $0.005 per
share for a period of five years and is subject to the terms of the
Company's incentive stock option plan. The Options are exercisable
on a cashless basis subject to certain conditions as more
particularly described in the Company's current report on Form 8-K
dated May 10, 2023. Of the Options, 65,000,000 vested immediately.
As part of the Option grant, the Company and one Optionee agreed
to cancel an aggregate of 15,000,000 stock options granted to that
Optionee on Sept. 1, 2020 that were exercisable at a price of $0.01
per share.
The Shares and Warrants were issued in private transactions in
reliance upon the exemption from registration provided by Rule 903
of Regulation S promulgated under the Securities Act of 1933, as
amended. The Company's reliance on Rule 903 of Regulation S was
based on the fact that DIP is not a "U.S. person" as that term is
defined in Rule 902(k) of Regulation S, that the holder acquired
the Shares and Warrants for investment purposes for his own account
and not as nominee or agent, and not with a view to the resale or
distribution thereof, and that he understood that the Shares and
Warrants may not be sold or otherwise disposed of without
registration under the Securities Act and any applicable state
securities laws, or an applicable exemption or exemptions
therefrom.
The Options were granted to Optionees in private transactions in
reliance upon the exemptions from registration provided by Section
4(a)(2) of the Securities Act and Rule 903 of Regulation S
promulgated under the Securities Act. The Company's reliance on
Section 4(a)(2) was based on the fact that the grants to U.S.
persons did not involve a "public offering" and the applicable
Optionees provided representations to the Company that they
acquired the Options for investment purposes and not with a view to
any resale, distribution or other disposition in violation of
United States securities laws or applicable state securities laws.
The Company's reliance on Rule 903 of Regulation S was based on the
fact that the relevant Options were granted in "offshore
transactions", as that term is defined in Rule 902(h) of Regulation
S. The Company did not engage in any directed selling efforts in
the United States in connection with the granting of the applicable
Options, and the relevant Optionees were not U.S. persons and did
not acquire the Options for the account or benefit of any U.S.
person.
About VOIP-PAL.com
Since March 2004, VOIP-PAL.com has developed technology and patents
related to Voice-over-Internet Protocol (VoIP) processes. All
business activities prior to March 2004 have been abandoned and
written off to deficit. The Company operates in one reportable
segment being the acquisition and development of VoIP-related
intellectual property including patents and technology.
Vancouver, Canada-based Davidson & Company LLP, the Company's
auditor since 2015, issued a "going concern" qualification in its
report dated Dec. 23, 2022, citing that the Company has suffered
recurring losses from operations and has a net capital deficiency
that raise substantial doubt about its ability to continue as a
going concern.
VOIP-PAL.COM INC: Jin Kuang Replaces Kevin Williams as CFO
----------------------------------------------------------
Kevin Williams resigned as the chief financial officer of
VoIP-PAL.COM Inc. and Jin Kuang was appointed to fill the resulting
vacancy, as disclosed in a Form 8-K filed by the Company with the
Securities and Exchange Commission.
Mr. Williams' resignation as CFO was not due to any disagreement
with the Company regarding its operations, policies, practices or
otherwise, and he remains a director of the Company.
Jin Kuang, 52, has over 15 years of professional expertise in
various financial domains, including IFRS, US GAAP, financial
reporting, financial planning, merger and acquisition, financial
analysis and tax, gained across the USA and Canada. She has also
spent over a decade in progressively responsible financial
leadership roles within publicly traded companies. Ms. Kuang has
served as CFO for several publicly listed companies, in addition to
her years of auditing experience with KPMG LLP Chartered
Accountants. She holds a BA in Accounting and an MBA from the
University of Northeastern China, along with US-CPA and CGA
designations.
In connection with her appointment, the Company entered into a
consulting agreement with Ms. Kuang pursuant to which, among other
things, the Company agreed to pay a fee of $5,000 per month and
granted her options to purchase an aggregate of 10,000,000 shares
of the Company's common stock at a price of $0.005 per share for a
period of five years. The options vest over a period of 24 months
as follows: 35% on the date of grant, 35% on the 12-month
anniversary of the date of grant, and 30% on the 24-month
anniversary of the date of grant.
About VOIP-PAL.com
Since March 2004, VOIP-PAL.com has developed technology and patents
related to Voice-over-Internet Protocol (VoIP) processes. All
business activities prior to March 2004 have been abandoned and
written off to deficit. The Company operates in one reportable
segment being the acquisition and development of VoIP-related
intellectual property including patents and technology.
Vancouver, Canada-based Davidson & Company LLP, the Company's
auditor since 2015, issued a "going concern" qualification in its
report dated Dec. 23, 2022, citing that the Company has suffered
recurring losses from operations and has a net capital deficiency
that raise substantial doubt about its ability to continue as a
going concern.
VT TOPCO: S&P Affirms 'B' Issuer Credit Rating, Outlook Stable
--------------------------------------------------------------
S&P Global Ratings affirmed its 'B' issuer credit rating on
Livingston, N.J.-based litigation support solutions provider VT
TopCo Inc. (d/b/a as Veritext) based on its expectation that its
leverage will remain in its historical range of 6x–7x.
At the same time, S&P assigned its 'B' issue-level rating and '3'
recovery rating (rounded estimate: 60%) to the company's new debt.
The stable outlook reflects S&P's expectation the company will
increase revenue from organic growth initiatives while holding
EBITDA margins steady in the high-20% area.
S&P said, "We believe performance trends will improve from the
integration of LIT and execution of operations initiatives. LIT
Group is the leading player in the Las Vegas court reporting
market, expanding Veritext's operating scope to this existing
customer base. The acquired portfolio also includes Golkow, a
dominant player specializing in pharmaceutical court reporting,
providing opportunities for the company to expand in this segment.
We expect integration costs to be minimal as Veritext has proven
integration capabilities with a successful track record of about 60
acquisitions over the past five years. LIT has slightly lower
EBITDA margins due to its smaller scale and business mix. We
believe as service volume for the combined company increases,
EBITDA margins will remain steady in the high-20% area."
Financial sponsor ownership limits upside potential. On October 13,
2022 CVC Capital Partners and GIC collectively became majority
owners of Veritext, with prior majority owner Leonard Green &
Partners rolling a minority position in the business alongside
management and other co-investors. These partners contributed their
pro rata share of equity to partially fund the LIT acquisition.
With private equity ownership there is the risk it could implement
debt-funded dividends to maximize its return. S&P's believe
Veritext's financial-sponsor owners will employ an aggressive
financial policy and could prioritize shareholder distributions to
maximize returns, limiting potential rating upside.
The stable outlook on Veritext reflects S&P's expectation for S&P
Global Ratings-adjusted leverage in the 5.5x-6.5x range over the
next 12 months, supported by organic growth and the successful
integration of LIT Group and other recent acquisitions.
ESG Credit Indicators: E-2 S-2 G-3
WCS PROPERTY: Seeks to Hire Buddy D. Ford as Bankruptcy Counsel
---------------------------------------------------------------
WCS Property Group, LLC seeks approval from the U.S. Bankruptcy
Court for the Middle District of Florida to employ the law firm of
Buddy D. Ford, PA as its bankruptcy counsel.
The firm will render these legal services:
(a) advise the Debtor regarding its powers and duties in the
continued operation of the business and management of the estate's
property;
(b) prepare and file schedules of assets and liabilities,
statement of affairs, and other documents required by the court;
(c) represent the Debtor at the Section 341 creditors'
meeting;
(d) advise the Debtor with respect to its responsibilities in
complying with the United States Trustee's Operating Guidelines and
Reporting Requirements and with the rules of the court;
(e) prepare legal papers;
(f) protect the interest of the Debtor in all matters pending
before the court;
(g) represent the Debtor in negotiation with its creditors in
the preparation of a Chapter 11 plan; and
(h) perform all other legal services for the Debtor.
The hourly rates of the firm's counsel and staff are as follows:
Buddy D. Ford, Esq. $450
Senior Associate Attorneys $400
Junior Associate Attorneys $350
Senior Paralegal Services $150
Junior Paralegal Services $100
In addition, the firm will seek reimbursement for expenses
incurred.
Prior to the commencement of this Chapter 11 case, the Debtor paid
the firm an advance fee of $26,738.
Buddy Ford, Esq., 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:
Buddy D. Ford, Esq.
Jonathan A. Semach, Esq.
Heather M. Reel, Esq.
Buddy D. Ford, PA
9301 West Hillsborough Avenue
Tampa, FL 33615-3008
Telephone: (813) 877-4669
Email: Buddy@tampaesq.com
Jonathan@tampaesq.com
Heather@tampaesq.com
About WCS Property Group
WCS Property Group, LLC owns commercial real property in Sarasota,
which it leases out to various tenants.
WCS Property Group sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. M.D. Fla. Case No. 23-02820) on July 3,
2023, with $1 million to $10 million in both assets and
liabilities. Taylor Santos, manager, signed the petition.
Judge Catherine Peek McEwen oversees the case.
Buddy D. Ford, PA is the Debtor's legal counsel.
WEXFORD LABS: Wins Cash Collateral Access on Final Basis
--------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Illinois
authorized Wexford Labs, Inc. to use cash collateral on a final
basis in accordance with the budget.
The Debtor requires the use of cash collateral to continue its
business operations and pay their regular daily expenses.
The Debtor is indebted to Financial & Marketing Solutions, L.L.C.,
in the approximate amount of $403,765. The Debtor is also indebted
to Jeffrey L. Singer Revocable Trust in the approximate amount of
$1.6 million and to Mary Anne Auer in the approximate amount of
$608,592.
The Prepetition Indebtedness is secured by certain of the Debtor's
assets.
As adequate protection for use of the cash collateral, Financial
Solutions, Singer, and Auer will have first-priority replacement
liens in any prepetition assets of Debtor's estate which were
subject to their respective liens, whensoever acquired pursuant to
the provisions of 11 U.S.C. section 552, to the same extent,
validity, priority, perfection, and enforceability as their
interests in any assets of the Debtor's estate and to the extent of
any diminution in value. The security and priorities granted to
Financial Solutions, Singer, and Auer shall not affect or impair
the separate existing collateral of all other creditors. Any and
all causes of action under Chapter 5 of the Bankruptcy Code are
expressly excluded from the foregoing replacement liens.
The replacement liens granted will be subject only to the following
carve-out: (i) the allowed professional fees and expenses of the
Debtor's bankruptcy counsel not to exceed $25,000 to be paid as
ordered by the Bankruptcy Court and only to the extent so ordered,
and (ii) the allowed professional fees and expenses of the
Subchapter V Trustee.
A final hearing on the matter was set July 11.
A copy of the court's order is available at
https://urlcurt.com/u?l=zPZkQq from PacerMonitor.com.
About Wexford Labs, Inc.
Wexford Labs, Inc. formulates and manufactures broad-spectrum
antimicrobial solutions for healthcare facilities, dental offices,
hospitality and food service businesses, educational institutions
and public service agencies, pharmaceutical facilities,
agricultural businesses and more.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Ill. Case No. 23-30420) on June 20,
2023. In the petition signed by CEO Jeffrey Singer, the Debtor
disclosed $1,386,692 in assets and $4,782,608 in liabilities.
Judge Laura K. Grandy oversees the case.
Robert E. Eggmann, Esq., at Carmody MacDonald P.C., represents the
Debtor as legal counsel.
WHITTAKER CLARK: FCR Taps Willkie Farr & Gallagher as Legal Counsel
-------------------------------------------------------------------
Shelley Chapman, the future claimants' representative (FCR)
appointed in the Chapter 11 cases of Whittaker, Clark & Daniels,
Inc. and its affiliates, seeks approval from the U.S. Bankruptcy
Court for the District of New Jersey to employ Willkie Farr &
Gallagher, LLP as counsel.
The firm will provide these services:
(a) advise the FCR of her powers and duties;
(b) take any and all actions necessary to protect and maximize
the value of the Debtors' estates, and represent the interests of
the FCR;
(c) appear on behalf of the FCR at meetings, hearings and
court proceedings in the Debtors' Chapter 11 cases;
(d) prepare and file legal papers;
(e) represent and advise the FCR with respect to any contested
matter, adversary proceeding, lawsuit or other proceeding in which
the FCR may become a party or otherwise appear in connection with
these Chapter 11 cases; and
(f) perform any other legal services.
The hourly rates of the firm's counsel and staff are as follows:
Daniel I. Forman, Partner $1,500
Stuart R. Lombardi, Partner $1,500
Christine Thain, Associate $1,125
In addition, the firm will seek reimbursement for expenses
incurred.
Mr. Forman provided the following in response to the request for
additional information set forth in Paragraph D.1 of the U.S.
Trustee Fee Guidelines.
Question: Did you agree to any variations from, or alternatives
to, your standard billing arrangements for this engagement?
Answer: No.
Question: Do any of the professionals included in this engagement
vary their rate based on the geographical location of the
bankruptcy case?
Answer: No.
Question: If you represented the client in the 12 months
prepetition, disclose your billing rates and material financial
terms for the prepetition engagement, including any adjustments
during the 12 months prepetition. If your billing rates and
material financial terms have changed post-petition, explain the
difference and the reasons for the difference.
Answer: Willkie did not represent the FCR prior to the filing of
the Debtors' Chapter 11 cases.
Question: Has your client approved your prospective budget and
staffing plan, and if so, for what budget period?
Answer: The FCR and Willkie expect to develop a prospective
budget and staffing plan to comply with the U.S. Trustee requests
for information and additional disclosures, and any other orders of
the court, recognizing that in the course of these Chapter 11
cases, there may be unforeseeable fees and expenses that will need
to be addressed by the FCR and the firm.
Mr. Forman disclosed in a court filing that his firm is a
"disinterested person" within the meaning of Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
Daniel I. Forman, Esq.
Stuart R. Lombardi, Esq.
Willkie Farr & Gallagher, LLP
787 Seventh Avenue
New York, NY 10019
Telephone: (212) 728-8000
Facsimile: (212) 728-8111
Email: dforman@willkie.com
slombardi@willkie.com
About Whittaker Clark & Daniels
Whittaker, Clark & Daniels, Inc. and affiliates, Brilliant National
Services Inc., Soco West Inc. and L.A. Terminals Inc., were engaged
in nonmetallic mineral mining and quarrying.
The Debtors sought Chapter 11 protection (Bankr. D.N.J. Lead Case
No. 23-13575) on April 26, 2023. The Debtors estimated $100 million
to $500 million in assets against $1 billion to $10 billion in
liabilities as of the bankruptcy filing.
The Hon. Michael B. Kaplan is the case judge.
The Debtors tapped Kirkland & Ellis LLP as general bankruptcy
counsel; Cole Schotz P.C. as co-bankruptcy counsel; and M3 Partners
LLC as financial advisor. Stretto, Inc. is the claims agent.
Honorable Shelley Chapman was appointed as the future claimants'
representative (FCR) in these Chapter 11 cases. Willkie Farr &
Gallagher, LLP is the FCR's counsel.
YARDBOYS AND YARDGIRLS: Taps Bradford Law Offices as Counsel
------------------------------------------------------------
Yardboys and Yardgirls, LLC seeks approval from the U.S. Bankruptcy
Court for the Eastern District of North Carolina to employ Bradford
Law Offices to handle its Chapter 11 case.
The firm will be paid at these rates:
Attorney time outside court $450 per hour
Attorney time in court $450 per hour
Paralegal time $185 per hour
The Debtor agreed to make initial deposit in the amount of $6,738
upon execution of its agreement with the firm.
Danny Bradford, Esq., an attorney at Bradford Law Offices,
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:
Danny Bradford, Esq.
Bradford Law Offices
455 Swiftside Drive, Suite 106
Cary, NC 27518-7198
Tel: (919) 758-8879
Email: Dbradford@bradford-law.com
About Yardboys and Yardgirls
Yardboys and Yardgirls, LLC sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. E.D.N.C. Case No. 23-01858) on
July 5, 2023, with up to $100,000 in assets and up to $500,000 in
liabilities. Victor Scott, member, signed the petition.
Judge David M. Warren oversees the case.
Danny Bradford, Esq., at Bradford Law Offices represents the Debtor
as legal counsel.
[*] Buffett Unit’s Wildfire Liability Risk Stokes Industry Fears
------------------------------------------------------------------
Joel Rosenblatt of Bloomberg News reports that destructive
wildfires are now an almost routine part of summer in the American
West, and electrical utilities have likewise become used to having
their power lines and equipment blamed for igniting the blazes.
But a jury verdict last month ordering Warren Buffett's PacifiCorp
to pay 17 owners of properties destroyed by a series of 2020 Oregon
fires an average of $5 million each -- setting up total liability
for thousands of others in the billions -- took investors by
surprise and raised new fears about the scale of exposure utilities
may be facing, and whether they will all survive.
At trial, Portland-based PacifiCorp itself estimated its potential
liability at $11 billion. Oakland, California-based PG&E Corp.,
which agreed to settle a much larger group of victim claims over
California wildfires for $13.5 billion in 2020, may have gotten off
easy by comparison.
PacifiCorp still faces another wildfire trial in January and
several other pending suits, including complaints filed last week
by Oregon wineries which claimed fires destroyed their grape
harvests. And some of the same lawyers who brought the class
action against PacifiCorp sued Public Service Co. of Colorado and
its parent company, Xcel Energy Inc., last week over the largest
wildfire to hit the Rocky Mountain state.
"It's not just PacifiCorp, it's not just Pacific Gas and Electric,
it's not just Public Service Company of Colorado, it's every
utility in every mountain -- that's the risk," said Andy DeVries, a
utility analyst at CreditSights. He said investors need to
understand that utilities in the Western US are operating with
"significantly more business risk than they have in the past."
PacifiCorp, which denied responsibility for the fires and blamed
lightning and climate change instead, said it's confident it will
get the verdict overturned on appeal. The company stressed that it
was committed to operating safely in six states but also said its
ability to provide electricity was "being threatened by excessive
wildfire damages."
Liability on the scale imposed by the Oregon jury presents an
existential threat to an industry that faces increasing wildfire
risk from from more extreme weather fueled by climate change.
DeVries said that, by his calculations, if PG&E had been ordered to
pay similar amounts to California claimants, its total damages
would be $1 trillion.
As a part of Buffett's Berkshire Hathaway Energy, PacifiCorp isn't
publicly traded, but its bonds have taken the hitfrom the verdict
that its shares might otherwise have. S&P Global downgraded
PacifiCorp's issuer credit rating two notches, and its outlook for
the utility and its parent company to negative from stable.
Berkshire Hathaway Energy is one of the largest US utility owners
with 5.2 million customers. The unit, which also owns natural gas
pipelines, renewable power plants and a UK utility, booked net
income of $3.1 billion last year based on $26.3 billion in revenue
— about a fifth of it from PacifiCorp.
"We're very concerned about those risks," Gabe Grosberg, an S&P
credit analyst, said in an interview. "There's always an assumption
that every parent values every asset it has. To the extent that
liabilities rise for that asset, there's a level, for every parent,
where they just don't view that asset as having value anymore."
The liabilities PacifiCorp faces from both the June 2023 verdict
and other similar lawsuits led S&P to conclude that it won't, under
all "foreseeable circumstances," get a lifeline from Berkshire
Hathaway Energy. Grosberg said S&P is re-assessing the risks that
other utilities face.
PacifiCorp took the calculated risk to go to trial rather than
settle claims over the 2020 fires. A central issue was that the
company allegedly failed to turn off power in the affected service
areas after being warned of hazardous weather conditions.
The jury found the company grossly negligent and voted to
compensate 17 test plaintiffs well beyond their property losses,
adding millions of dollars more for pain and suffering than their
lawyers requested. Collectively, they actually got 15 times as much
for emotional distress as they were awarded in economic damages.
Those 17 plaintiffs were awarded $90 million, but damages for as
many as 5,000 other residents and business owners will be
determined in a later proceeding.
"No one on the bond side was looking at the potential for these
huge amounts over actual economic damages – it just caught
everybody off guard," DeVries said. "It woke a lot of people up,
looking at their portfolios, wondering what’s going on."
PacifiCorp's appeal of the verdict could take years. Marisa Miller,
a lawyer who has defended companies in wildfire suits but isn't
involved in the case, said it will be tough for the utility to
persuade an Oregon appeals court to overturn the jury's conclusion
that it's liable for the fires, but the company has a stronger
argument that the case shouldn't have been allowed to proceed as a
class action.
What Bloomberg Intelligence Says
"PacifiCorp has indicated it will appeal the jury verdict, but we
assess its likelihood of success as tenuous for now." - Elliott
Stein, senior litigation analyst, and Matthew Palazola, senior
industry analyst
PG&E filed for Chapter 11 protection in the face of wildfire
litigation, emerging from bankruptcy in 2020. If Berkshire doesn't
step in, that's a possibility for PacifiCorp as well, according to
DeVries and Grosberg.
PacifiCorp said in a statement that, in the face of growing legal
liabilities, being part of Berkshire Hathaway Energy offers
competitive advantages including flexibility of dividend payments
and capital spending. Berkshire Hathaway Energy didn’t respond to
a request for comment.
The company could also try to pass the cost along to consumers.
PacifiCorp has asked the Oregon Public Utility Commission to let it
track costs from the litigation so that it can decide later whether
to seek reimbursement of the June verdict in its electric bills.
"This is outrageous," said Bob Jenks, executive director of the
Oregon Citizens' Utility Board. "Customers should not pay a dime of
these costs."
PacifiCorp said it remains open to settling outstanding legal
claims. It "has resolved -- and will continue to resolve --
wildfire damage claims when they are reasonable, and the damages
were caused by Pacific Power," according to the statement.
Settlement talks in the case going to trial in January have not
been fruitful, according to Robert Julian, a lawyer in that case
who also represented PG&E fire victims. He said 17 of his clients
have died waiting for their cases to go to trial.
Julian said his understanding was that, in the case decided in
June, PacifiCorp could have settled for between $300,000 and
$500,000 per household, or less than a tenth of what the jury
ordered it to pay. He said that amount would be on top of damages
for plaintiffs' property losses. PacifiCorp didn't respond to
requests for comment on settlement talks.
"We're going to end up owning this company, and destroying all of
Berkshire Hathaway Energy's equity in it, if they don't sit down
and deal with us," Julian said.
[*] Distressed Investing Conference 2023: EARLY BIRD SAVINGS!
-------------------------------------------------------------
Registration is now open for the 30TH DISTRESSED INVESTING
CONFERENCE. Save with discounted early bird pricing until Sept.
1st.
This year's conference will be held Nov. 29th, in-person at the
Harmonie Club in Manhattan. The event is presented by Beard Group,
Inc.
Top industry experts gather together to discuss the latest topics
and trends in the distressed investing industry. Now on its 30th
year, this value-packed event features special presentations from
keynote speakers, live panel discussions and networking sessions
with other insolvency professionals.
Visit https://www.distressedinvestingconference.com for more
information.
For conference sponsorship and speaking opportunities, contact:
Will Etchison
305-707-7493
Will@BeardGroup.com
[^] Recent Small-Dollar & Individual Chapter 11 Filings
-------------------------------------------------------
In re Froggy Flats, LLC
Bankr. D. Mont. Case No. 23-40050
Chapter 11 Petition filed July 18, 2023
See
https://www.pacermonitor.com/view/3JP5NPQ/FROGGY_FLATS_LLC__mtbke-23-40050__0001.0.pdf?mcid=tGE4TAMA
represented by: Gary S. Deschenes, Esq.
DESCHENES & ASSOCIATES LAW OFFICES
E-mail: gsd@dalawmt.com
In re Compound Landmark Solutions LLC
Bankr. D.N.J. Case No. 23-16112
Chapter 11 Petition filed July 18, 2023
See
https://www.pacermonitor.com/view/6I2CWCQ/Compound_Landmark_Solutions_LLC__njbke-23-16112__0001.0.pdf?mcid=tGE4TAMA
represented by: Timothy P. Neumann, Esq.
BROEGE, NEUMANN, FISCHER & SHAVER LLC
E-mail: tneumann@bnfsbankruptcy.com
In re Royal Jet Car Corp.
Bankr. E.D.N.Y. Case No. 23-42508
Chapter 11 Petition filed July 18, 2023
See
https://www.pacermonitor.com/view/TROERHQ/Royal_Jet_Car_Corp__nyebke-23-42508__0001.0.pdf?mcid=tGE4TAMA
represented by: Alla Kachan, Esq.
LAW OFFICES OF ALLA KACHAN, P.C.
E-mail: alla@kachanlaw.com
In re MuddledTyme, LLC
Bankr. E.D. Tex. Case No. 23-41285
Chapter 11 Petition filed July 18, 2023
See
https://www.pacermonitor.com/view/Z6SGSTY/Robert_DeMarco__txebke-23-41285__0001.0.pdf?mcid=tGE4TAMA
represented by: Robert DeMarco, Esq.
DEMARCO MITCHELL, PLLC
Email: robert@demarcomitchell.com
In re Shayar Jon Maroufkani
Bankr. D. Ariz. Case No. 23-04871
Chapter 11 Petition filed July 19, 2023
represented by: Michael Jones, Esq.
ALLEN, JONES & GILES, PLC
In re Basecamp 116 LLC
Bankr. E.D. Cal. Case No. 23-11548
Chapter 11 Petition filed July 19, 2023
See
https://www.pacermonitor.com/view/BMLGE4Y/BASECAMP_116_LLC__caebke-23-11548__0001.0.pdf?mcid=tGE4TAMA
represented by: Darren J. Bogie, Esq.
DARLING & WILSON, PC
E-mail: dbogie@dwlawfirm.com
In re Upper Room Development LLC
Bankr. D. Md. Case No. 23-15071
Chapter 11 Petition filed July 19, 2023
See
https://www.pacermonitor.com/view/KDPIJ6Y/Upper_Room_Development_LLC__mdbke-23-15071__0001.0.pdf?mcid=tGE4TAMA
represented by: Michael Coyle, Esq.
THE COYLE LAW GROUP LLC
E-mail: mcoyle@thecoylelawgroup.com
In re Ronald Leonard Cyrus and Chivon Marie Cyrus
Bankr. N.D. Ga. Case No. 23-56856
Chapter 11 Petition filed July 20, 2023
represented by: Angelyn Wright, Esq.
In re PJ Trans, Inc.
Bankr. N.D. Ill. Case No. 23-09390
Chapter 11 Petition filed July 20, 2023
See
https://www.pacermonitor.com/view/2MEZBJI/PJ_Trans_Inc__ilnbke-23-09390__0001.0.pdf?mcid=tGE4TAMA
represented by: Saulius Modestas, Esq.
MODESTAS LAW OFFICES, P.C.
E-mail: smodestas@modestaslaw.com
In re Endurance Recovery Services
Bankr. N.D. Ill. Case No. 23-09414
Chapter 11 Petition filed July 20, 2023
See
https://www.pacermonitor.com/view/D4Y3WBA/Endurance_Recovery_Services__ilnbke-23-09414__0001.0.pdf?mcid=tGE4TAMA
Filed Pro Se
In re 1163 Fulton LLC
Bankr. E.D.N.Y. Case No. 23-42554
Chapter 11 Petition filed July 20, 2023
See
https://www.pacermonitor.com/view/NLHWLLI/1163_Fulton_LLC__nyebke-23-42554__0001.0.pdf?mcid=tGE4TAMA
Filed Pro Se
In re Ernesto Rafael Irizarry Santiago
Bankr. D.P.R. Case No. 23-02210
Chapter 11 Petition filed July 20, 2023
represented by: Javier Vilarino, Esq.
In re Willie Crawford
Bankr. E.D.N.Y. Case No. 23-42579
Chapter 11 Petition filed July 21, 2023
In re Slow Burn Hot Chicken, LLC
Bankr. M.D. Tenn. Case No. 23-02591
Chapter 11 Petition filed July 21, 2023
See
https://www.pacermonitor.com/view/6W3I2VI/Slow_Burn_Hot_Chicken_LLC__tnmbke-23-02591__0001.0.pdf?mcid=tGE4TAMA
represented by: Steven L. Lefkovitz, Esq.
LEFKOVITZ & LEFKOVITZ
E-mail: slefkovitz@lefkovitz.com
In re 1st & 2nd Chance Furniture, Inc.
Bankr. M.D. Tenn. Case No. 23-02597
Chapter 11 Petition filed July 21, 2023
See
https://www.pacermonitor.com/view/NKCL7WI/1st__2nd_Chance_Furniture_Inc__tnmbke-23-02597__0001.0.pdf?mcid=tGE4TAMA
represented by: Steven L. Lefkovitz, Esq.
LEFKOVITZ & LEFKOVITZ
E-mail: slefkovitz@lefkovitz.com
In re Harpers Ferry Hospitality, LLC
Bankr. E.D.N.Y. Case No. 23-42590
Chapter 11 Petition filed July 22, 2023
See
https://www.pacermonitor.com/view/PJRUYII/Harpers_Ferry_Hospitality_LLC__nyebke-23-42590__0001.0.pdf?mcid=tGE4TAMA
represented by: Lawrence Morrison, Esq.
MORRISON TENENBAUM PLLC
E-mail: lmorrison@m-t-law.com
In re Irma Higuera
Bankr. S.D. Tex. Case No. 23-32728
Chapter 11 Petition filed July 22, 2023
represented by: Larry Vick, Esq.
In re Alvaro Carlos Velasquez
Bankr. C.D. Cal. Case No. 23-14607
Chapter 11 Petition filed July 23, 2023
represented by: Andrew Bisom, Esq.
In re Beacon Coffee Company, Inc.
Bankr. C.D. Cal. Case No. 23-10607
Chapter 11 Petition filed July 24, 2023
See
https://www.pacermonitor.com/view/TNHS4NI/Beacon_Coffee_Company_Inc__cacbke-23-10607__0001.0.pdf?mcid=tGE4TAMA
represented by: William C. Beall, Esq.
BEALL & BURKHARD, APC
E-mail: will@beallandburkhardt.com
In re JR7 Worldwide, Inc
Bankr. C.D. Cal. Case No. 23-14615
Chapter 11 Petition filed July 24, 2023
See
https://www.pacermonitor.com/view/LQN4WQI/JR7_Worldwide_Inc__cacbke-23-14615__0001.0.pdf?mcid=tGE4TAMA
represented by: Joseph Trenk, Esq.
LAW OFFICES OF JOSEPH TRENK
E-mail: trenklaw@gmail.com
In re Thomas A. Gorman
Bankr. N.D. Ill. Case No. 23-09614
Chapter 11 Petition filed July 24, 2023
represented by: David P Leibowitz, Esq.
LAW OFFICES OF DAVID P. LEIBOWITZ, LLC
E-mail: dleibowitz@lakelaw.com
In re Chinah Maiden Lane LLC
Bankr. S.D.N.Y. Case No. 23-11154
Chapter 11 Petition filed July 24, 2023
See
https://www.pacermonitor.com/view/A2GPN7Q/Chinah_Maiden_Lane_LLC__nysbke-23-11154__0001.0.pdf?mcid=tGE4TAMA
represented by: Erica Aisner, Esq.
KIRBY AISNER & CURLEY LLP
E-mail: eaisner@kacllp.com
In re Chi Na Eating House LLC
Bankr. S.D.N.Y. Case No. 23-11156
Chapter 11 Petition filed July 24, 2023
See
https://www.pacermonitor.com/view/F5OUM7I/Chi_Na_Eating_House_LLC__nysbke-23-11156__0001.0.pdf?mcid=tGE4TAMA
represented by: Erica Aisner, Esq.
KIRBY AISNER & CURLEY LLP
E-mail: eaisner@kacllp.com
In re Chinah 275 Madison LLC
Bankr. S.D.N.Y. Case No. 23-11153
Chapter 11 Petition filed July 24, 2023
See
https://www.pacermonitor.com/view/THOJN2Q/Chinah_275_Madison_LLC__nysbke-23-11153__0001.0.pdf?mcid=tGE4TAMA
represented by: Erica Aisner, Esq.
KIRBY AISNER & CURLEY LLP
E-mail: eaisner@kacllp.com
In re Chinah Brooklyn Commons LLC
Bankr. S.D.N.Y. Case No. 23-11158
Chapter 11 Petition filed July 24, 2023
See
https://www.pacermonitor.com/view/AXGOAJY/Chinah_Brooklyn_Commons_LLC__nysbke-23-11158__0001.0.pdf?mcid=tGE4TAMA
represented by: Erica Aisner, Esq.
KIRBY AISNER & CURLEY LLP
E-mail: eaisner@kacllp.com
In re La Crosse Tent & Awning, Inc.
Bankr. W.D. Wisc. Case No. 23-11250
Chapter 11 Petition filed July 24, 2023
See
https://www.pacermonitor.com/view/2IHMVNY/La_Crosse_Tent__Awning_Inc__wiwbke-23-11250__0001.0.pdf?mcid=tGE4TAMA
represented by: Galen W. Pittman, Esq.
PITTMAN & PITTMAN LAW OFFICES, LLC
E-mail: Info@PittmanandPittman.com
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
On Thursdays, the TCR delivers a list of recently filed
Chapter 11 cases involving less than $1,000,000 in assets and
liabilities delivered to nation's bankruptcy courts. The list
includes links to freely downloadable images of these small-dollar
petitions in Acrobat PDF format.
Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.
Monthly Operating Reports are summarized in every Saturday edition
of the TCR.
The Sunday TCR delivers securitization rating news from the week
then-ending.
TCR subscribers have free access to our on-line news archive.
Point your Web browser to http://TCRresources.bankrupt.com/and use
the e-mail address to which your TCR is delivered to login.
*********
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