/raid1/www/Hosts/bankrupt/TCR_Public/230811.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Friday, August 11, 2023, Vol. 27, No. 222
Headlines
117 SPENCER: Seeks to Hire Murphy & King as Bankruptcy Counsel
1INMM CAPITAL: Investors Settle With JJMT Capital, et al.
3D & COMPANY: Leon Jones Named Subchapter V Trustee
5280 AURARIA: Updates DB Auraria Claim; Files Amended Plan
A&P PINTO TRUCK: Jerrett McConnell Named Subchapter V Trustee
ADT INC: Moody's Puts 'B1' CFR Under Review for Upgrade
AEROFARMS INC: $20MM DIP Loan from Grosvenor et al. Wins Final OK
ALBERTSONS COS: S&P Upgrades ICR to 'BB+', On Watch Positive
ALL FLORIDA SAFETY: Court OKs Interim Cash Collateral Access
AMO TX 1: Continued Operations to Fund Plan Payments
AMSTERDAM HOUSE: Seeks to Extend Plan Exclusivity to October 3
ARCHDIOCESE OF SAN FRANCISCO: Likely to File Chapter 11 Bankruptcy
ATLANTA URBAN: S&P Lowers Housing Revenue Debt Rating to 'B-'
AVENTIS SYSTEMS: Seeks Continued Cash Collateral Access Thru Dec 31
BESTWALL LLC: Dodges 4th Circuit Rehearing of Bankruptcy Shield
BH&G HOLDINGS: Involuntary Chapter 11 Case Summary
BIG BOY TOYS: Case Summary & 16 Unsecured Creditors
BLOOMIN' BRANDS: S&P Alters Outlook to Positive, Affirms 'BB-' ICR
BOURBON STREET: Thomas Kapusta Named Subchapter V Trustee
CANDY CLUB: Tom Howley Named Subchapter V Trustee
CHIPLEY’S FAMILY: Seeks Cash Collateral Access
CLEAR CHANNEL: Moody's Rates New $500MM Senior Secured Notes 'B1'
CONGREGATION COFFEE: Taps Lugenbuhl as Legal Counsel
CORNER OYSTER: Seeks Cash Collateral Access
CSR WORLDWIDE: Seeks to Hire Hinkle Law as Bankruptcy Co-Counsel
CSR-OK WORLDWIDE: Seeks to Tap Hinkle Law as Bankruptcy Co-Counsel
DAHLIA MEDITERRANEAN: Taps Bolger Law Firm as Bankruptcy Counsel
DIVERSITY FREIGHT: James Fellin Named Subchapter V Trustee
EBERHARDT PARTNERSHIP: Unsecureds to Get 10 Cents on Dollar in Plan
ECL ENTERTAINMENT: Moody's Rates New $380MM First Lien Loan 'B2'
EMERGENT BIOSOLUTIONS: Cuts 400 Jobs, Eliminates COO Role
EMPLOYBRIDGE HOLDING: S&P Alters Outlook to Neg., Affirms 'B-' ICR
ENVISION HEALTHCARE: Committee Seeks OK to Hire Investment Banker
EPIC CRUDE: S&P Upgrades ICR to 'B-' on Improved Performance
FRANKLIN SOUTHERN: Court OKs Interim Cash Collateral Access
FREE SPEECH: Chapter 11 Judge Sets 3-Hour Early Win Bid Hearing
GANNETT PEAK: Thomas Kapusta Named Subchapter V Trustee
GARDNER AGENCY: Taps General Insurance Brokerage as Broker
GENEVER HOLDINGS:Trustee Taps Bohonnon Law Firm as Special Counsel
GGG INVESTMENTS: Court OKs Cash Collateral Access Thru Aug 14
GULF COAST TRANS: Court OKs Cash Collateral Access Thru August 17
HERTZ CLEVELAND: Auction for Cleveland Property Owner on Sept. 29
HOLIDAY ERIN: Craig Geno Named Subchapter V Trustee
HUGHES SATELLITE: S&P Places 'BB' ICR on Watch Negative
INSTANT BRANDS: Gets $30 Million Fresh Chapter 11 Financing
INTELIGLAS CORPORATION: Case Summary & 20 Top Unsecured Creditors
INVGRP3 LLC: Todd Hennings Named Subchapter V Trustee
IYS VENTURES: Court OKs Cash Collateral Access Thru Aug 31
J.A.R. CONCRETE: Seeks Approval to Hire Ryan LLC as Tax Consultant
JAB OF ROCKLAND: Seeks to Hire Kirby Aisner as Bankruptcy Counsel
JAFFAN INTERNATIONAL: Taps Joel M. Aresty as Substitute Counsel
JETASAP LLC: L. Todd Budgen Named Subchapter V Trustee
LIGHT & WONDER: S&P Rates New $550MM Senior Unsecured Notes 'B+'
MATEO ENTERPRISE: Lisa Holder Named Subchapter V Trustee
MAZEL ON DEL: Case Summary & Four Unsecured Creditors
MEDIAMATH HOLDINGS: Sale Process, Aug. 18 Auction Okayed
MEGNA REAL ESTATE: John-Patrick Fritz Named Subchapter V Trustee
MESQUITE ENERGY: Junior Creditors Get $70% Ownership After Ch. 11
MOUNTAIN EXPRESS: Mediation Ordered in Chapter 11 Mess
NEW HAVEN TRUCK: Taps Balletto Shariff & Associates as Accountant
NOBLE HEALTH II: Seeks to Hire Integra Realty as Appraiser
NORTH VILLAGE SNOW: William Avellone Named Subchapter V Trustee
NORTH VILLAGE: Court OKs Cash Collateral Access Thru Sept 15
NS FOA: Seeks Approval to Hire Haley Ward as Engineer
OPEN COURT SPORTS: Brendon Singh Named Subchapter V Trustee
ORION TECHNOLOGIES: Court OKs Cash Collateral Access Thru Aug 16
PARADOX RESOURCES: Taps CAMS Midstream Services as Consultant
PARAMETRIC SOLUTIONS: Files Emergency Bid to Use Cash Collateral
PETRI ENTERPRISES: Thomas Kapusta Named Subchapter V Trustee
PGX HOLDINGS: $19MM New Money DIP Loan Wins Final OK
PREMIER CONSTRUCTION: Andrew Levin Named Subchapter V Trustee
PURDUE PHARMA: Victims Struggle With Settlement's High Bar
REVOLVE CONSTRUCTION: Mark Dennis Named Subchapter V Trustee
RINGCENTRAL INC: S&P Assigns 'BB' ICR, Outlook Stable
ROBS BAR: Jarrod Martin Named Subchapter V Trustee
ROCKPORT COMPANY: Committee Taps Cole Schotz as Legal Counsel
ROCKPORT COMPANY: Committee Taps Province LLC as Financial Advisor
RUTHERFORD ENTERPRISES: Seeks Cash Collateral Access
SABRE GLBL: Moody's Assigns B3 Rating to New Senior Secured Notes
SIMPLETECH REPAIR: Seeks Cash Collateral Access
SORRENTO THERAPEUTICS: New $100 Million Chapter 11 DIP Loan Okayed
TAMPA BAY PLUMBERS: Court OKs Interim Cash Collateral Access
TENNECO INC: Moody's Affirms B2 CFR & Rates Sr. Unsecured Debt Caa1
TGL CAPITAL: Seeks Approval to Hire Legal Counsel
UNITED FURNITURE: Trustee Taps Dallas, Rawlings as Special Counsel
UNITY ELECTRICAL: Melissa Haselden Named Subchapter V Trustee
UPTOWN 240: Gets OK to Hire Level Engineering & Inspection
VERICAST CORP: S&P Affirms 'CCC' Issuer Credit Rating, Outlook Neg
VIEWRAY INC: Hires B. Riley Securities as Investment Banker
VIEWRAY INC: Seeks to Hire Faegre Drinker as Bankruptcy Counsel
VIEWRAY INC: Seeks to Hire Stretto Inc as Administrative Advisor
VIEWRAY INC: Taps Berkeley Research Group as Financial Advisor
VIPER ENERGY: Moody's Ups CFR to Ba2 & Sr. Unsecured Notes to Ba3
VIVO TECHNOLOGIES: Unsecureds Will Get 9 to 32 Cents on Dollar
WAWANESA GENERAL: A.M. Best Reviews C++(M) Fin. Strength Rating
WEST 132ND: Seeks Approval to Hire Joel M. Aresty as Legal Counsel
WEWORK INC: Posts $397 Million Net Loss in Second Quarter
WHITESTONE BREWERY: Unsecureds to Split $90K over 60 Months
WYCKOFF EQUITIES: Case Summary & 13 Unsecured Creditors
YELLOW CORP: Apollo Loan Carries 17% Interest Rate
YELLOW CORP: Faces More Layoff Notice Claims After Chapter 11
YELLOW CORP: Moody's Cuts PDR to D-PD Following Bankruptcy Filing
[*] Commercial Ch. 11 Bankruptcy Filings Rose 71% Y/Y in July 2023
[^] BOOK REVIEW: Bailout: An Insider's Account of Bank Failures
*********
117 SPENCER: Seeks to Hire Murphy & King as Bankruptcy Counsel
--------------------------------------------------------------
117 Spencer, LLC seeks approval from the U.S. Bankruptcy Court for
the District of Massachusetts to hire employ Murphy & King,
Professional Corporation as Counsel.
The firm's services include:
a. advising the Debtor with respect to its rights, powers and
duties as debtor-in-possession in the continued operation of its
businesses and management of its assets;
b. advising the Debtor with respect to any plan of
reorganization and any other matters relevant to the formulation
and negotiation of a plan or plans of reorganization in the case;
c. representing the Debtor at all hearings and matters
pertaining to its affairs as debtor and debtor-in-possession;
d. preparing, on the Debtor's behalf, all necessary and
appropriate applications, motions, answers, orders, reports, and
other pleadings and other documents, and review all financial and
other reports filed in this Chapter 11 case;
e. advising the Debtor with respect to, and assisting in the
negotiation and documentation of, financing agreements, debt and
related transactions;
f. reviewing and analyzing the nature and validity of any
liens asserted against the Debtor's property and advising the
Debtor concerning the enforceability of such liens;
g. advising the Debtor regarding its ability to initiate
actions to collect and recover property for the benefit of the
estate;
h. advising and assisting the Debtor in connection with the
potential sale of the Debtor's assets;
i. advising the Debtor concerning executory contract and
unexpired lease assumptions, lease assignments, rejections,
restructurings and recharacterization of contracts and leases;
j. reviewing and analyzing the claims of the Debtor's
creditors, the treatment of such claims and the preparation, filing
or prosecution of any objections to claims;
k. commencing and conducting any and all litigation necessary
or appropriate to assert rights held by the Debtor, protect assets
of the Debtor's Chapter 11 estate or otherwise further the goal of
completing the Debtor's successful reorganization other than with
respect to matters to which the Debtor retains special counsel;
and
l. performing all other legal services and providing all other
necessary legal advice to the Debtor as debtor-in-possession which
may be necessary in the Debtor's bankruptcy proceeding.
The firm will be paid based upon its normal and usual hourly
billing rates. The firm will also be reimbursed for reasonable
out-of-pocket expenses incurred.
D. Ethan Jeffery, Esq., a partner at Murphy & King, Professional
Corporation, 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:
D. Ethan Jeffery, Esq.
Murphy & King, Professional Corporation
One Beacon Street 21st Floor
Boston, MA 02108
Tel: 617 226-3414
Fax: 617 305-0614
Email: ejeffery@murphyking.com
About 117 Spencer
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.
1INMM CAPITAL: Investors Settle With JJMT Capital, et al.
---------------------------------------------------------
Michele Vives, the court-appointed receiver for 1inMM Capital LLC
as well as assets that are attributable to investor or client funds
or that were fraudulently transferred by 1inMM or Zachary J.
Horwitz, and certain plaintiffs who invested in 1inMM have reached
an agreement to settle all claims asserted or that could have been
asserted against JJMT Capital LLC, JJMT Group LLC, J.T.H.D.
Investments LLC or Chi-Town Capital LLC ("JJMT"), Joseph deAlteris,
Jacob Wunderlin and Matthew Schweinzger ("JJM Parties"), as well as
their wives, children, respective current and former employers and
certain other entities and trusts identified in the settlement
agreement, as to any acts or omissions arising out of, in
connection with or relating in any way to: (1) the 1inMM Ponzi
Scheme; (2) the 1inMM Defendants; (3) JJMT; (4) any investments or
lack of repayment by JJMT or the 1inMM defendants ("settlement").
As part of the settlement, the receiver has asked the Court to
permanently enjoin any person or entity from commencing any legal
proceeding against any of the JJM Parties and any of the related
parties asserting any legal or relating in any way to, 1inMM, the
1inMM Ponzi Scheme, JJMT or Mr. Horwitz.
All 1inMM claims will be channeled into a receivership claims
process the Court will establish by separate order.
Complete copies of the settlement agreement, the proposed bar order
and other documents pertaining to the settlement are available on
the receiver's website at https://www.1inMMreceivership.com/
Interested parties may submit written questions or objections to
the settlement to the receiver by sending an email to
1inMM@douglaswilson.com by no later than 4:00 p.m. PDT on Sept. 4,
2023.
1inMM Capital LLC is a California limited liability company formed
in September 2013. Its principal place of business is Zachary J.
Horwitz's home in Los Angeles, California.
3D & COMPANY: Leon Jones Named Subchapter V Trustee
---------------------------------------------------
The U.S. Trustee for Region 21 appointed Leon Jones, Esq., at Jones
& Walden, LLC, as Subchapter V trustee for 3D & Company.
Mr. Jones will be paid an hourly fee of $450 for his services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. Jones declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Leon S. Jones, Esq.
Jones & Walden, LLC
699 Piedmont Ave. NE
Atlanta, Georgia 30308
Phone: (404) 564-9300
Email: ljones@joneswalden.com
About 3D & Company
3D & Company filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. N.D. Ga. Case No. 23-57343) on Aug. 1,
2023, with $500,001 to $1 million in assets and $100,001 to
$500,000 in liabilities.
Judge Paul W. Bonapfel oversees the case.
Joseph Chad Brannen, Esq., at Brannen Firm, LLC represents the
Debtor as legal counsel.
5280 AURARIA: Updates DB Auraria Claim; Files Amended Plan
----------------------------------------------------------
5280 Auraria, LLC, submitted a Second Amended Disclosure Statement
to accompany its Modified Second Amended Plan of Reorganization
dated August 3, 2023.
The Plan provides for the continued, post-confirmation operation of
the principal asset of the Debtor, i.e., the Real Property, under
Chapter 11 of the Bankruptcy Code unless a sale of the Real
Property takes place.
The Plan contemplates that the Debtor's current management remains
in place post-confirmation and that Mr. Nelson and his team at
Nelson Partners will continue to operate the Real Property and
oversee any sale process. Pursuant to the Plan, once the Real
Property has been liquidated or the Debtor has refinanced, the
Debtor shall distribute funds to creditors in conformity with the
Bankruptcy Code. The Plan is a relatively simple Chapter 11 plan of
reorganization.
DB Auraria amended its claim on July 17, 2023 to reflect its view
that it is oversecured, and that the value of the Real Property
securing its claim can be determined through a sale this year. This
amended claim indicated that an approximate balance owed on July
15, 2023 is $59,500,000, not including unbilled legal fees. With
legal fees as of the date of this Disclosure Statement, DB Auraria
asserts its claim is $61,145,041.68.
But ultimately the value of DB Auraria's collateral will be
determined in large part by the sale of the Property under the
Plan. The Debtor disputes DB Auraria's claim because it asserts
that it is grossly overstated and derived from predatory activities
contrary to Fortress' representations and contractual obligations.
The Debtor's Schedules and Plan reflect that the Debtor disputes
this claim.
Prior versions of the Plan called for a sale of the Real Property
in calendar year 2023. This plan calls for a sale or refinance in
calendar year 2024. The proposed adjustments reflect the Debtor's
business judgment that values will be maximized in year 2024.
According to the Debtor, two basic factors drive the proposed
timing adjustment. First, general conditions for sale of student
leasing properties are expected to be very favorable in 2024.
Student leasing is still recovering from COVID-19, and the
environment for rents is expected to be robust. Most owners of
student housing who might be considering a sale have elected to
defer marketing until 2024. The Debtor's view on market trends is
shared by most parties in the industry.
Second, factors specific to the Real Property reinforce the
Debtor's assessment of market conditions. A sale in 2023 would be
based upon expected performance, not proven, historical
performance. A sale in 2024 would also be based upon expected
performance, not proven, historical performance, except that the
Debtor will be one further year beyond the depressed financial
performance of the COVID-19 pandemic years (2020-2022). For current
market conditions, expected future performance is likely to be
heavily discounted.
Moreover, the aggressive increases in rents implemented by the
Debtor may take more than one leasing season to be fully realized.
Normally, a student housing project might expect renewals from one
year to the next of 30-40%. Due to rent increases reflecting
different positioning in the market, renewals for the Real Property
have been much lower. Finally, renovations were underway and
completed last year, which may have distorted operating expenses. A
year of steady-state performance should better position the Real
Property in the market. The Debtor projects that annual Net
Operating Income will grow from $3,816,442 for the 2023-24 school
year to approximately $3,884,337 for the 2024-25 school year, a net
increase of only approximately $67,900, or about 1.7 percent.
The Debtor's position is that the majority of the value of the Real
Property occurs in the future and any increase in value is
incremental and subject to whatever upward adjustment that the
Court finds is fair based on the completion of the renovations, the
Debtor's preleasing efforts, and the continuing deterioration of
the commercial real estate market. The Court in its discretion may
find a different valuation than $48.4 million in the context of
plan confirmation.
Class 3 consists of General Unsecured Claims in an amount greater
than $1,500 that do not elect to be treated as a Convenience
Claim.
* The holders of Allowed Unsecured Claims in Class 3 shall
receive their Pro Rata share of Net Sale Proceeds upon the closing
of the Sale in accordance with the Waterfall Recovery (subject to
the provisions for Disputed Claims set forth in Section 4.05 of the
Plan). The payments shall be in full and final satisfaction,
compromise, settlement, release, and discharge of the Class 3
claimant's Allowed Claim.
* In the event the Real Property is not sold and the Debtor
refinances, the Debtor must pay Allowed General Unsecured Claims in
full by the Payment Deadline.
* For the avoidance of doubt, along with other General
Unsecured Claims, the Allowed Auraria Stub Secured Claim and any
Allowed Claim of DB Auraria in an amount above the Secured Claim
shall be treated as an Allowed General Unsecured Claim under the
Plan.
* For the avoidance of doubt, a Class 3 claimant shall not
receive a greater amount under this Plan than the amount of its
Allowed Claim.
Upon the Effective Date, the Estate's Assets shall vest with the
reorganized Debtor. The reorganized Debtor shall operate the Real
Property consistent with the Debtor's practices during the Chapter
11 case. Nelson Partners retains an equity interest in the
reorganized Debtor, subject to the provisions in this Plan.
DB Auraria contends that Nelson Partners and Patrick Nelson are
under economic pressure from other creditors that may impact their
ability to act as fiduciaries for the benefit of creditors
postconfirmation.
A full-text copy of the Second Amended Disclosure Statement dated
August 3, 2023 is available at https://urlcurt.com/u?l=woD7BL from
PacerMonitor.com at no charge.
Attorneys for the Debtor:
Michael J. Pankow, Esq.
Amalia Sax-Bolder, Esq.
BROWNSTEIN HYATT FARBER SCHRECK, LLP
675 15th Street, Suite 2900
Denver, CO 80202
Tel: (303) 223-1100
Fax: (303) 223-1111
E-mail: mpankow@bhfs.com
asax-bolder@bhfs.com
About 5280 Auraria
5280 Auraria, LLC, owns Auraria Student Lofts, a high-rise building
in downtown Denver aimed at providing housing for college students.
5280 Auraria's sole member and manager is Nelson Partners, LLC, a
Utah limited liability company. The individual principal is Patrick
Nelson.
5280 Auraria sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Colo. Case No. 22-12059) on June 9,
2022. In the petition filed by Patrick Nelson, as managing member,
the Debtor listed between $50 million and $100 million in both
assets and liabilities.
Judge Kimberley H. Tyson oversees the case.
Michael J. Pankow, Esq., at Brownstein Hyatt Farber Schreck, LLP,
is the Debtor's counsel.
A&P PINTO TRUCK: Jerrett McConnell Named Subchapter V Trustee
-------------------------------------------------------------
The U.S. Trustee for Region 21 appointed Jerrett McConnell, Esq.,
at McConnell Law Group, P.A. as Subchapter V trustee for A&P Pinto
Truck Express, LLC.
Mr. McConnell will be paid an hourly fee of $350 for his services
as Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. McConnell declared that he is a disinterested person according
to Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Jerrett M. McConnell, Esq.
McConnell Law Group, P.A.
6100 Greenland Rd., Unit 603
Jacksonville, FL 32258
Phone: (904) 570-9180
Email: trustee@mcconnelllawgroup.com
About A&P Pinto Truck
A&P Pinto Truck Express, LLC filed a petition under Chapter 11,
Subchapter V of the Bankruptcy Code (Bankr. M.D. Fla. Case No.
23-03044) on July 28, 2023, with $100,001 to $500,000 in assets and
liabilities. Judge Tiffany P. Geyer oversees the case.
Daniel A. Velasquez, Esq. of Latham, Luna, Eden & Beaudine, LLP
represents the Debtor as legal counsel.
ADT INC: Moody's Puts 'B1' CFR Under Review for Upgrade
-------------------------------------------------------
Moody's Investors Service has placed ADT Inc.'s ("ADT", "the
company") ratings under review for upgrade, including the B1
corporate family rating, B1-PD probability of default rating, Ba3
ratings on the first-lien senior secured credit facilities and
first-lien notes issued by Prime Security Services Borrower, LLC
and The ADT Security Corporation (both subsidiaries of ADT), as
well as the B3 rating on the second-lien notes issued by Prime
Security Services Borrower, LLC. The speculative grade liquidity
rating ("SGL") remains SGL-3. ADT, headquartered in Boca Raton, FL,
is the largest provider of alarm monitoring services in the US.
The review for upgrade was prompted by the company's announcement
that it will pay down approximately $1.5 billion of debt with
proceeds from the sale of its commercial business segment, which
management expects to close before the end of 2023. The divestiture
modestly reduces scale and revenue diversification by eliminating a
segment with lower capital intensity than ADT's core residential
business, but the pro forma debt reduction reduces financial
leverage and refinancing risk. Moody's could upgrade the ratings if
the transaction closes as expected and ADT reduces $1.5 billion of
existing debt with the after-tax proceeds, while also sustaining
operational improvement. Over the last few years, ADT's core
residential segment has steadily enhanced its key operating
metrics, including recurring monthly revenue ("RMR"), attrition and
subscriber acquisition costs. Refinancing risk remains a negative
credit consideration, but the announced debt paydown reduces ADT's
sizeable maturity tower in 2026. The debt reduction plan also
underscores the company's commitment to less aggressive financial
policies and lower long-term financial leverage, a key governance
consideration that mitigates ADT's concentrated, albeit
diminishing, ownership by Apollo Global Management, Inc.
("Apollo").
RATINGS RATIONALE / FACTORS THAT COULD LEAD TO AN UPGRADE OR
DOWNGRADE OF THE RATINGS
ADT's credit ratings reflect its leading position as the largest
residential alarm-monitoring and home automation services provider
in the fragmented US market. Improving operating and credit metrics
support the credit, including higher recurring monthly revenue
(RMR); lower gross attrition and subscriber acquisition costs; and
diminishing debt/RMR leverage (under 25x as of June 2023,
Moody's-adjusted pro forma with the commercial business divestiture
and future debt paydown). Moody's expects the company will continue
to pursue financial policies that reduce leverage and allocate free
cash flow to pay down debt. Moody's also anticipates ownership
concentration will diminish over time as private equity sponsor
Apollo reduces its stake in ADT. The company generates over 70% of
revenue from multi-year monitoring services contracts that result
in a predictable, recurring revenue base. However, the industry is
characterized by prevalent customer churn and costly subscriber
acquisition costs, which result in high capital intensity and limit
free cash flow generation. Subscriber attrition, a key operating
metric, is typically correlated with home relocations, which
creates exposure to housing market cycles. Refinancing risk will
diminish pro forma with the announced debt paydown but a heavy debt
load in a high interest rate environment with approaching
maturities remains a negative credit consideration.
Recent partnerships with high profile firms Google Inc. ("Google")
(subsidiary of Alphabet Inc., Aa2 stable) and State Farm Life
Insurance Company ("State Farm") (Aa1 stable), which have also
become minority shareholders, will continue to benefit product
development and innovation. Moody's expects the relationships with
these two firms will support revenue growth and help reduce
subscriber acquisition costs and attrition, which are key for
driving greater profitability and cash flow.
The review for upgrade reflects Moody's expectation that ADT's
operating and credit metrics will continue to improve over the next
12-18 months, as the company implements more balanced financial
strategies, including an emphasis upon financial leverage reduction
rather than shareholder returns or debt-financed acquisitions.
Moody's also anticipates that ownership concentration will continue
to decline and refinancing risk will diminish as ADT continues to
reduce its 2026 maturity tower before it becomes current. Moody's
expects low single-digit revenue growth over the next 12 months as
growth in the residential segment is offset by higher financing
rates that will continue to reduce solar installations. Moody's
anticipates pro forma debt/RMR and FCF/debt metrics will improve
towards 24x and 5%, respectively, pro forma with the announced debt
reduction and commercial divestiture.
The SGL-3 liquidity assessment reflects ADT's adequate liquidity,
supported by $146 million of balance sheet cash and an undrawn $575
million first-lien revolving credit facility as of June 30, 2023,
as well as Moody's expectation for over $180 million of free cash
flow in 2023 (Moody's adjusted net of dividends). As is assumed for
alarm monitors in general, liquidity is also supported by Moody's
expectation that ADT can both curtail its active subscriber
acquisition program and turn to the alarm monitoring industry's
robust market for trading alarm monitoring contracts, to generate
additional liquidity, if necessary. Moody's expects ADT will remain
in compliance with the 4.9x net first-lien leverage covenant, which
is only applicable to revolver borrowings when the facility is
drawn 30% or more.
ADT's capital structure includes first-lien and second-lien debt,
as well as two receivable securitization facilities. The ratings
for the individual debt instruments incorporate ADT's overall
probability of default, reflected in the B1-PD PDR, and the Loss
Given Default assessments for the individual debt instruments. The
Ba3 ratings on ADT's $3.4 billion first-lien term loan ($2.1
billion pro forma with debt paydown), $575 million first-lien
revolver, and $4.7 billion of first-lien notes ($4.5 billion pro
forma), which are held collectively at Prime Security Services
Borrower, LLC and The ADT Security Corporation, are weakly
positioned given the heavy preponderance of first-lien debt,
relative to the $1.3 billion of senior secured second-lien notes,
which are rated B3. To support its securitization facilities, ADT
contributes contracted receivables to wholly-owned,
bankruptcy-remote entities that act as the borrowers.
The ratings could be upgraded upon conclusion of the review if the
transaction closes as expected, including the $1.5 billion debt
reduction, and if Moody's believes ADT can sustain good operating
momentum while employing more conservative long-term financial
policies that maintain debt/RMR leverage well below 30x and
FCF/debt approaching 2.5% or higher (Moody's adjusted, net of
dividends) and sustain revenue growth.
The review for upgrade indicates that rating downgrades are
unlikely. However, the ratings could be downgraded if 1) revenue
growth, attrition, RMR, subscriber acquisition costs or other
operating metrics weaken materially, reflecting a diminished
competitive profile; 2) the company pursues more aggressive
financial policies, such as debt-funded shareholder distributions
or acquisitions; 3) Moody's expects debt/RMR to be sustained above
30x or FCF/debt to remain below 1.0%; 4) liquidity deteriorates; or
5) refinancing risk increases.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
ADT Inc. (NASDAQ: ADT), headquartered in Boca Raton, FL, is the
largest provider of security, interactive automation and alarm
monitoring services in the US, with about 6.4 million residential
subscribers as of June 30, 2023, plus independent security-alarm
dealer customers on a wholesale basis. The company was formed in
2016 as an Apollo-backed combination of alarm monitors Protection 1
and The ADT Security Corporation. The company generated $6.4
billion in revenue as of fiscal year 2022.
On Review for Upgrade:
Issuer: ADT Inc.
Corporate Family Rating, Placed on Review for Upgrade, currently
B1
Probability of Default Rating, Placed on Review for Upgrade,
currently B1-PD
Issuer: Prime Security Services Borrower, LLC
Senior Secured 1st Lien Bank Credit Facility, Placed on Review for
Upgrade, currently Ba3
Backed Senior Secured 1st Lien Regular Bond/Debenture, Placed on
Review for Upgrade, currently Ba3
Senior Secured 1st Lien Regular Bond/Debenture, Placed on Review
for Upgrade, currently Ba3
Senior Secured 2nd Lien Regular Bond/Debenture, Placed on Review
for Upgrade, currently B3
Issuer: The ADT Security Corporation
Backed Senior Secured 1st Lien Regular Bond/Debenture, Placed on
Review for Upgrade, currently Ba3
Senior Secured 1st Lien Regular Bond/Debenture, Placed on Review
for Upgrade, currently Ba3
Outlook Actions:
Issuer: ADT Inc.
Outlook, Changed To Rating Under Review From Positive
Issuer: Prime Security Services Borrower, LLC
Outlook, Changed To Rating Under Review From Positive
Issuer: The ADT Security Corporation
Outlook, Changed To Rating Under Review From Positive
AEROFARMS INC: $20MM DIP Loan from Grosvenor et al. Wins Final OK
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized
AeroFarms, Inc. and affiliates to use cash collateral and obtain
postpetition financing, on a final basis.
A consortium of lenders committed to provide up to $20 million in
postpetition financing on a secured superpriority basis, available
in two tranches:
Subscription Amount
-------------------
DIP Lender Tranche A Tranche B
---------- --------- ---------
Grosvenor Food & AgTech $5,565,690 $5,565,690
Prepetition Equity and
Noteholder; Affiliate of
AeroFarms Board Member
INGKA Investments $2,000,000 $2,000,000
Ventures US BV
Prepetition Equity and
Noteholder
Cibus Fund (comprising $1,300,000 $1,300,000
Cibus Fund LP and Cibus
Clara Fund LP)
Prepetition Equity and
Noteholder
James Borel $206,238 $206,238
Prepetition Noteholder;
AeroFarms Board Member
ACEG $824,953 $824,953
Beteilgungsgesellschaft mbH
Prepetition Equity and
Noteholder
Peter Lacy
AeroFarms Board Member $103,119 $103,119
----------- -----------
Total $10,000,000 $10,000,000
=========== ===========
The Tranche A Loan is a new money term loan facility in an
aggregate principal amount of up to $10 million, of which:
-- $5 million became available to the Debtors pursuant to the
terms and conditions of the First Interim Order and the term
sheet;
-- $2 million became available to the Debtors pursuant to the
terms of the Second Interim Order and the DIP Term Sheet;
-- $3 million became available to the Debtors pursuant to the
terms of the Third Interim Order and the DIP Term Sheet; and
-- the full amount of up to $10 million in aggregate principal
amount of Tranche A Loans continuing to be available pursuant to
the Final Order and in the DIP Term Sheet.
The Tranche B Loan is a new money term loan facility available on a
junior secured superpriority basis. The entire $10 million
commitment is available pursuant to the Final Order.
The Debtors are required to comply with these milestones:
a. No later than July 21, 2023, the Bidding Procedures Order
will be entered by the Bankruptcy Court;
b. No later than August 14, 2023, entry of the Final DIP
Order;
c. No later than August 20, 2023, the auction, if any, on the
terms set forth in Bidding Procedures Order will have occurred;
d. No later than August 24, 2023, the Sale Order will have
been entered by the Bankruptcy Court; and
e. The Sale will be consummated no later than the Outside
Closing Date.
The DIP Facility is due and payable through the earliest to occur
of:
(i) December 31, 2023;
(ii) the Plan Effective Date,
(iii) closing of an Alternative Transaction, following entry of
an order authorizing the sale of substantially all of the Debtors'
assets (which sale will constitute an Alternative Transaction); or
(iv) the acceleration of any outstanding DIP Loans following
the occurrence of an uncured Event of Default.
Prior to the Petition Date, the Borrowers, Horizon Credit II LLC,
as assignee of Horizon Technology Finance Corporation as lender,
Horizon Funding I, LLC, as assignee of Horizon as lender,
Powerscourt Investments XXV Trust, as assignee of Powerscourt
Investments XXV, LP as lender, and Horizon, as collateral agent,
entered into the Venture Loan and Security Agreement dated as of
March 22, 2022.
As of the Petition Date, the Borrowers were indebted and liable to
the Prepetition Secured Parties, with respect to $15 million in
principal amount of loans outstanding, plus accrued and unpaid
interest thereon and fees, expenses.
The Debtors have an immediate, continuing and critical need to
obtain financing pursuant to the DIP Facility and continue using
the Prepetition Collateral to, among other things, (a) pay the
fees, costs, and expenses incurred in connection with the Chapter
11 Cases, (b) fund the Carve-Out, (c) permit the orderly
continuation of the operation of their business, (d) maintain
business relationships with customers, vendors, and suppliers, (e)
make payroll, (f) satisfy other working capital and operational
needs, and (g) maximize the value of their estates.
Subject to the Carve Out and Permitted Liens, all amounts owing by
the Borrowers under the DIP Facility will be joint and several as
to each Borrower and will be entitled to superpriority claim status
pursuant to 11 U.S.C. section 364(c)(1). The DIP Superpriority
Claims related to the Tranche A DIP Obligations will be pari passu
with the superpriority claims held by the Prepetition Secured
Parties arising under 11 U.S.C. section 507(b) and the Prepetition
Secured Obligations.
The DIP Superpriority Claim related to the Tranche B DIP
Obligations will be junior to the Adequate Protection Superpriority
Claims, the Prepetition Secured Obligations and the Tranche A
Superpriority Claims. All of the DIP Superpriority Claims and
Adequate Protection Superpriority Claims will have priority over
any and all administrative expense claims and unsecured claims
against the Borrowers or their estates in any of the Chapter 11
Cases and any Successor Cases.
The DIP Liens securing the Tranche A Obligations will be pari passu
with, and have the same priority as, the security interest and
liens securing Borrowers' obligations owing to Horizon Funding
Trust 2022-1, as assignee of
Horizon Technology Finance Corporation as lender, Horizon Funding
I, LLC, as assignee of Horizon as lender, Powerscourt Investments
XXV Trust, as assignee of Powerscourt Investments XXV, LP as
lender, and Horizon, as collateral agent under the Venture Loan and
Security Agreement, dated as of March 22, 2022.
The DIP Liens securing the Tranche B Obligations will be junior to
the Prepetition Liens, the Adequate Protection Liens and the
Tranche A DIP Liens.
The Carve-Out consists of clerk of court fees, U.S. Trustee fees
and approved bankruptcy professional fees.
A copy of the order is available at https://urlcurt.com/u?l=km9ol8
from PacerMonitor.com.
About AeroFarms Inc.
AeroFarms, Inc. is engaged in large-scale commercial indoor
vertical farming, using proprietary aeroponic technology to grow
differentiated leafy greens products while using up to 95 percent
less water and zero pesticides. AeroFarms operates two commercial
farms, which are located in Danville, Virginia and Newark, New
Jersey, where they also have their Company headquarters.
AeroFarms and affiliates sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. D. Del. Lead Case No. 23-10737) on
June 8, 2023. In the petition signed by Guy Blanchard, president
and CEO, the Debtor disclosed up to $500 million in assets and up
to $100 million in liabilities.
Judge Mary F. Walrath oversees the case.
The Debtors tapped DLA Piper LLP (US) as general bankruptcy
counsel, CloudPoint Capital LLC as investment banker, ICR, LLC as
communications and consulting services provider, Omni Agent
Solutions as notice and claims agent.
ALBERTSONS COS: S&P Upgrades ICR to 'BB+', On Watch Positive
------------------------------------------------------------
S&P Global Ratings raised its issuer credit rating on Albertsons
Cos. Inc. (ACI) to 'BB+' from 'BB' and its issue-level rating on
its senior unsecured notes to 'BB+' from 'BB'. S&P's '3' recovery
rating on the notes is unchanged, indicating its expectation for
meaningful recovery (50%-70%; rounded estimate: 65%) in the event
of a payment default or bankruptcy.
S&P said, "At the same time, we raised our issue-level ratings on
the senior notes issued by Safeway Inc. and New Albertsons L.P.
(NALP) to 'BB+' from 'B+' and revised our recovery rating to '3'
from '6'. The '3' recovery rating indicates our expectation for
meaningful recovery (50%-70%; rounded estimate: 65%) in the event
of a payment default or bankruptcy.
"Our ratings on ACI remain on CreditWatch, where we placed them
with positive implications on Oct. 14, 2022, due to its proposed
acquisition by Kroger Co. We expect to resolve the CreditWatch once
the proposed acquisition closes and we can assess the pro forma
company's capital structure, operational plans, and management.
"The upgrade reflects ACI's robust performance during and after the
coronavirus pandemic, its solid prospects, and our expectation for
further reductions in S&P Global Ratings-adjusted debt. ACI
performed well through the pandemic, expanding its S&P Global
Ratings-adjusted EBITDA margins to over 7% in fiscal years 2020 and
2021 as food-at-home inflation helped drive sales above $70
billion. While we expect some margin contraction due to increased
costs, we expect its margin will remain above pre-pandemic levels.
In addition, the company has significantly reduced its debt and
debt-like obligations through the conversion of its preferred
shares and the expected reduction in its MEPP underfunding from the
use of government programs. While we expect to align our rating on
ACI with our rating on Kroger at the close of the proposed
transaction, this upgrade reflects the company's improved
stand-alone performance and leverage."
The company closed the first quarter ended June 2023 with $7.90
billion of reported debt, which was relatively unchanged from its
$8.05 billion of reported debt as of February 2020 (the end of its
last pre-pandemic fiscal year). During this time, ACI increased its
trailing 12-month EBITDA by almost 25% to $3.99 billion as of June
2023 from $3.21 billion as of February 2020.
S&P said, "ACI's convertible preferred shares, which it issued in
fiscal year 2020 and we include in our adjusted debt figure, stood
at nearly $1.3 billion as of fiscal year 2021 and have now been
fully converted. We expect the company will continue to generate
healthy free cash flow in 2023 and 2024, which will partially
offset the increase in leverage from the January 2023 special
dividend it funded with revolver borrowings and cash. More
materially, we expect ACI will significantly reduce its S&P Global
Ratings-adjusted debt when several MEPPs that the company is party
to--and which we add to our adjusted debt calculation ($4 billion
as of June 2023)--receive relief. We expect the relief the MEPPs
will receive from the 2021 American Rescue Act Special Financial
Assistance program (Under the program, eligible MEPPs receive a
one-time cash payment, which is not subject to repayment, in the
amount necessary to maintain solvency through 2051. Filings for the
program must be submitted by December 31, 2025 [petitioners are
allowed to file via a lottery system], are approved or denied in
120 days of submission, and are paid out 90-120 days after
approval) will enable it to reduce most of this $4 billion
exposure. Therefore, we expect ACI's leverage will fall to the
low-3x area by the end of fiscal year 2024. Accordingly, we revised
our assessment of the company's financial risk to significant from
aggressive."
S&P expects ACI to expand its sales to nearly $79 billion in fiscal
year 2023 and almost $81 billion in 2024, with S&P Global
Ratings-adjusted EBITDA of about $5 billion each year, despite
margin pressures. The company increased its sales by 8% in fiscal
year 2022 (ended February 2023) to $77.6 billion, supported by a
6.9% rise in identical (ID) sales, which--in turn---improved on
retail price inflation, a rise in pharmacy sales, and a 28%
increase in digital sales. However, ACI's S&P Global
Ratings-adjusted EBITDA margins contracted last fiscal year to
6.6%, from 7.2% in fiscal year 2021, due to increased shrinkage and
picking and delivery costs related to its rising digital sales.
ACI continued to advance its revenue in the first quarter ended
June 18, 2023, expanding its ID sales by 4.9% on retail price
inflation and a 22% increase in its digital sales. S&P said, "While
inflation is moderating, we expect it will continue to support an
expansion in the company's sales over the remainder of fiscal year
2023. We also expect ACI's gross margins will moderate slightly in
fiscal years 2023 and 2024 (a cumulative 40 basis point
contraction) as pharmacy sales increase, COVID-19 vaccine sales
decline, and shrink and supply chain costs stabilize. We expect the
company's various strategic initiatives will help offset part, but
not all, of these effects. For example, we believe its supply chain
automation efforts and new enterprise warehouse management system
will likely enhance cost efficiencies." In addition, its ongoing
productivity initiatives have already provided it with
approximately $1.5 billion of savings between 2020 and 2022.
S&P said, "We believe ACI will maintain its strong liquidity
position over the coming year. The company's used $2.5 billion of
cash and $1.4 billion of revolver borrowings to fund its January
2023 special dividend, which, along with other factors, reduced its
cash balance to $225 million as of the last fiscal quarter from
$3.2 billion a year ago (prior to fiscal year 2020, its year-end
cash balances were in the $450 million-$950 million range). The
company had more than $3.4 billion available under its $4.0 billion
asset-based lending (ABL) facility as of June 2023. We expect ACI's
improved cash flow generation will be sufficient to cover its $2.3
billion of annual capital spending, $1 billion of upcoming debt
maturities, working capital swings, and revolver paydowns ($500
million repaid since February 2023).
"Albertsons' proposed acquisition by Kroger Co. will materially
expand the combined company's footprint and scale. We expect the
proposed transaction will materially enhance the combined company's
geographic diversity in the U.S., given ACI's presence in the west
coast, northeast, and southwest U.S. and Kroger's store base in the
mid-west to mid-Atlantic. ACI's 2,271 stores will account for a
large portion of the combined company's footprint (4,996 stores)
prior to any closures or divestitures. We continue to expect the
transaction will close in early 2024, though it remains subject to
the receipt of necessary regulatory approvals.
"We expect to resolve the CreditWatch placement once the proposed
merger closes and we can assess the combined entity's pro forma
store base, operating forecasts, divestiture plans, and capital
structure. We expect to align our issuer credit rating on
Albertsons with our 'BBB' issuer credit rating on Kroger based on
the current merger plan. However, we could withdraw our ratings on
the company at a later date depending on how the combined entity
handles its pro forma organizational structure and debt reduction.
"ESG factors are an overall neutral consideration in our credit
rating analysis of ACI. About 200,000 of the company's 290,000
employees were covered by collective bargaining agreements through
the fiscal year ended Feb. 25, 2023. Health care, pension
contributions, and wage costs have remained important topics for
negotiations and the expiration of such agreements without
contracts could lead to strikes that disrupt its operations."
ALL FLORIDA SAFETY: Court OKs Interim Cash Collateral Access
------------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida,
Jacksonville Division, authorized All Florida Safety Institute, LLC
to use cash collateral on an interim basis in accordance with the
budget.
The Debtor requires the use of cash collateral to continue
operating the business and pay salaries.
As of the Petition Date, the Debtor was indebted to the U.S. Small
Business Administration in the approximate amount of $2.066 million
and Westlake Funding Company, LLC in the approximate amount of
500,000. The Debtor's obligation is evidenced by a Promissory Note,
Security Agreement, Financing Statement, and Chattel Mortgage
executed on May 27, 2020 to SBA and July 21, 2021 to Westlake.
The Debtor is permitted to pay only expenses necessary for the
operation of the business and not any pre-petition expenses,
officer salaries, professional fees, or insiders without further
court order.
As adequate protection to each Lender's interest and the estate's
interest in cash collateral, the Lender is granted a replacement
lien to the same nature, priority, and extent the Lender may have
had immediately prior to the date that the case was commenced nunc
pro tunc to the Petition Date. Further, the Lender is granted a
replacement lien and security interest on property of the
bankruptcy estate to the same extent and priority as that which
existed pre-petition on all of the cash accounts, accounts
receivable and other assets and property acquired by the Debtor's
estate or by the Debtor on or after the Petition. The replacement
lien will be deemed effective, valid and perfected as of the
Petition Date, without the necessity of filing with any entity of
any documents or instruments otherwise required to be filed under
applicable non-bankruptcy law.
The Debtor is directed to make adequate protection payments:
a. $6,164.40 per month to the SBA commencing November 1, 2022
and on the 1st of the month thereafter or further Court Order;
b. $0.00 per month to Westlake Funding. Stay to be lifted upon
Court Order;
c. All other UCC-1 receivable Lenders including NewCo Capital
Group, Samson, Cloudfund/Delta and IOU shall receive no adequate
protection at this time. This order is without prejudice to a later
finding that such Lenders may be secured by receivables, personal
property, inventory and/or equipment.
As additional adequate protection of the Lender's interest in the
cash collateral, the Debtor will (a) maintain all necessary
insurance coverage on the Lender's collateral and under no
circumstances will the Debtor allow its insurance coverage to
lapse, (b) continue to pay such monthly insurance payment in a
timely manner, and (c) within two days of the Lender's request, the
Debtor will provide to the Lender's counsel a written statement
supported by evidence of Debtor's compliance with the foregoing.
The Debtor's authority to use the cash collateral will terminate
immediately and upon the earlier of (a) a Court order; (b) the
conversion of the case to a Chapter 7 case or the appointment of a
Chapter 11 trustee without the consent of the Lender; (c) the entry
of an Order that alters the validity or priority of the replacement
liens granted to the Bank; (d) the Debtor ceasing to operate all or
substantially all of its business; (e) the entry of an order
granting relief from the automatic stay that allows any entity to
proceed against any material assets of the Debtor that constitute
cash collateral; (f) the entry of an Order authorizing a security
interest under 11 U.S.C. section 364(c) or 364(d) in the collateral
to secure any credit obtained or debt incurred that would be senior
to or equal to the replacement lien; or (g) the dismissal of the
Chapter 11 case.
A copy of the order is available at https://urlcurt.com/u?l=ejG3Pm
from PacerMonitor.com.
About All Florida Safety Institute, LLC
All Florida Safety Institute, LLC offers driving lessons, driver's
license testing and traffic school. All Florida Safety sought
protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr.
M.D. Fla. Case No. 22-01926) on September 22, 2022. In the petition
signed by Mark Allen, manager, the Debtor disclosed $2,200,185 in
assets and $5,618,570 in liabilities.
Judge Jacob A. Brown oversees the case.
Bryan K. Mickler, Esq., at the Law Offices of Mickler & Mickler,
LLP, is the Debtor's counsel.
AMO TX 1: Continued Operations to Fund Plan Payments
----------------------------------------------------
AMO TX 1, LLC and AMO TX 2, LLC filed with the U.S. Bankruptcy
Court for the Eastern District of Texas a Joint Plan of
Reorganization dated August 3, 2023.
Each of the Debtor's owns and operates a Dairy Queen restaurant.
Each Debtor is owned by AMO Holdings, LLC. AMO Holdings, LLC is
owned by Brian Amira, Ned Mohammad and Birant Or.
The bankruptcies were filed to try and bring operating expenses in
line with revenues.
The Debtor proposes to restructure its current indebtedness and
continue its operations to provide a dividend to the creditors pf
Debtor.
Class 8 consists of Allowed Unsecured Creditors of AMO TX #1. All
unsecured creditors of AMO TX #1 shall share pro rata in the
unsecured creditors pool. The AMO TX #1 shall make monthly payments
commencing 30 days after the effective date of $1000 into the
unsecured creditors' pool. The amount represents the AMO TX #1's
disposable income. The Debtor shall make 60 payments into the
unsecured creditors pool. The Class 8 creditors are impaired.
Class 9 consists of Allowed Unsecured Creditors of AMO TX #2. All
unsecured creditors of Frontier shall share pro rata in the
unsecured creditors pool. The AMO TX #2 shall make monthly payments
commencing 30 days after the effective date of $1000 into the
unsecured creditors' pool. The amount represents the AMO TX #2's
disposale income. The Debtor shall make 60 payments into the
unsecured creditors pool. The Class 9 creditors are impaired.
The current owners in Class 10 will receive no payments under the
Plan, however, they will be allowed to retain their ownership in
the Debtors.
Debtors anticipate the continued operations of the businesses to
fund the Plan.
A full-text copy of the Plan of Reorganization dated August 3, 2023
is available at https://urlcurt.com/u?l=3Svca5 from
PacerMonitor.com at no charge.
Proposed Attorney for Debtor:
Eric A. Liepins, Esq.
Eric A. Liepins, PC
12770 Coit Road, Suite 850
Dallas, TX 75251
Telephone: (972) 991-5591
Facsimile: (972) 991-5788
Email: eric@ealpc.com
About AMO TX
AMO TX 1, LLC and its affiliates, AMO TX 2, LLC and AMO TX 3, LLC,
operate a Dairy Queen restaurant.
The Debtors filed petitions under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. E.D. Texas Lead Case No. 23-40812) on May
5, 2023, with as much as $50,000 in assets and $500,001 to $1
million in liabilities. Behrooz Vida, Esq., at The Vida Law Firm,
PLLC, has been appointed as Subchapter V trustee.
Judge Brenda T. Rhoades oversees the cases.
Eric A. Liepins, PC, serves as the Debtors' counsel.
AMSTERDAM HOUSE: Seeks to Extend Plan Exclusivity to October 3
--------------------------------------------------------------
Amsterdam House Continuing Care Retirement Community, Inc. asks the
U.S. Bankruptcy Court for the Eastern District of New York to
extend its exclusive periods to file a chapter 11 plan and
solicit acceptances thereof to October 3, 2023 and December 2,
2023, respectively.
Unless extended, the exclusive filing period and the exclusive
solicitation period expire on July 20, 2023, and September 18,
2023, respectively.
The Debtor submits that the size and complexities of its chapter
11 case warrant an extension of the exclusive periods. The
Debtor explained that in addition to providing continued care and
services to its over 234 residents, it has spent a considerable
amount of time during the first several months of its chapter 11
case focused on its marketing and sale process. The Debtor also
added that, because of the nature of its business, which involves
a complex regulatory framework, the sale process has required
frequent engagement with regulatory agencies and other third
parties, including the New York Department of Health and
Department of Financial Services.
Amsterdam House Continuing Care Retirement Community, Inc. is
represented by:
Gregory M. Juell, Esq.
DLA PIPER LLP (US)
1251 Avenue of the Americas
New York, NY 10020
Tel: (212) 335-4500
Email: gregory.juell@us.dlapiper.com
- and -
James P. Muenker, Esq.
DLA PIPER LLP (US)
1900 North Pearl Street, Suite 2200
Dallas, TX 75201
Tel: (214) 743-4500
Email: james.muenker@us.dlapiper.com
- and -
Rachel Nanes, Esq.
DLA PIPER LLP (US)
200 South Biscayne Boulevard, Suite 2500
Miami, FL 33131
Tel: (305) 423-8500
Email: rachel.nanes@us.dlapiper.com
About Amsterdam House Continuing Care
Amsterdam House Continuing Care Retirement Community, Inc., doing
business as The Amsterdam at Harborside, operates Nassau County's
first and only continuing care retirement community licensed
under Article 46 of the New York Public Health Law, which
provides residents with independent living units, enriched
housing and memory support services, comprehensive licensed
skilled nursing care, and related health, social, and quality of
life programs and services.
Amsterdam House Continuing Care Retirement Community filed a
voluntary petition for relief under Chapter 11 of the Bankruptcy
Code (Bankr. E.D.N.Y. Case No. 23-70989) on March 22, 2023. In
the petition signed by Brooke Navarre, president and chief
executive officer, the Debtor disclosed $100 million to $500
million in both assets and liabilities.
Judge Alan S. Trust oversees the cases.
The Debtor tapped Gregory M. Juell, Esq., at DLA Piper LLP (US)
as bankruptcy counsel; and Ankura Consulting Group, LLC as
restructuring advisor. Michael W. Morton of Ankura Consulting
Group is the Debtor's chief restructuring officer.
The U.S. Trustee for Region 2 appointed an official committee to
represent unsecured creditors in the Debtor's Chapter 11 case.
Cooley LLP and GlassRatner Advisory & Capital Group, LLC, doing
business as B. Riley Advisory Services, serve as the committee's
legal counsel and financial advisor, respectively.
ARCHDIOCESE OF SAN FRANCISCO: Likely to File Chapter 11 Bankruptcy
------------------------------------------------------------------
San Francisco's Catholic Archdiocese will "likely" be filing for
Chapter 11 bankruptcy amid hundreds of lawsuits filed against the
church in recent years, according to an Aug. 4, 2023 statement by
the church's archbishop.
Archbishop Salvatore J. Cordileone said the decision to file for
Chapter 11 would allow the archdiocese to continue to operate while
reorganizing its finances and handling the cases all together
rather than individually.
In 2002, the California Legislature permitted certain expired
claims of childhood sexual abuse not only against the perpetrators
but also against third-party defendants (like the dioceses) for a
one-year period starting Jan. 1, 2003. This resulted in the
Archdiocese of San Francisco selling excess property and drawing on
insurance coverage to pay approximately $68 million to roughly 100
plaintiffs to settle claims.
In 2019, the State of California again removed the statute of
limitations on sexual abuse claims for non-profit organizations,
opening a new three-year window allowing cases to be filed against
the Archdiocese through Dec. 31, 2022. This resulted in more than
500 civil lawsuits being filed against the Archdiocese.
"I want you to know that, as with the 2003 window, the vast
majority of the alleged abuse occurred in the 1960s, 1970s, and
1980s and involved priests who are deceased or no longer in
ministry. In addition to deceased individuals who can no longer
defend themselves, a significant number of these claims include
unnamed individuals or named individuals who are unknown to the
Archdiocese," Archbishop Cordileone said.
"For several months now, with the assistance of our financial and
legal advisors, we have been investigating the best options for
managing and resolving these cases. After much contemplation and
prayer, I wish to inform you that a Chapter 11 bankruptcy
reorganization is very likely. It would allow the Archdiocese to
achieve two very important goals. First, Chapter 11 is a process
that brings all parties together in one place to resolve difficult
claims fairly and equitably under the supervision of the bankruptcy
court, allowing the Archdiocese to deal with the hundreds of cases
collectively rather than one at a time. That could result in a
faster resolution for hundreds of survivors, providing them with
fair compensation and finally, hopefully, some peace and closure.
Secondly, Chapter 11 would allow the Archdiocese to reorganize its
financial affairs to continue its vital ministries to the faithful
and to the communities that rely on our services and charity."
If a Chapter 11 is filed, only the legal entity, The Roman Catholic
Archbishop of San Francisco, a Corporation Sole, would be included.
The operations of the parishes and schools should continue as
usual without disruption, as should the activities of the
Archdiocese. The Archdiocese would join a growing list of dioceses
in the United States and California that have filed for protection
under the bankruptcy laws. Some of these dioceses have already
restructured and emerged from this process.
About San Francisco Archdiocese
The Archdiocese of San Francisco is a Latin Church ecclesiastical
territory or diocese of the Catholic Church in the northern
California region of the United States. The Archdiocese of San
Francisco was erected on July 29, 1853, by Pope Pius IX and its
cathedral is the Cathedral of Saint Mary of the Assumption.
ATLANTA URBAN: S&P Lowers Housing Revenue Debt Rating to 'B-'
-------------------------------------------------------------
S&P Global Ratings lowered its rating one notch to 'B-' from 'B' on
Atlanta Urban Residential Finance Authority, Ga.'s multifamily
housing revenue debt, issued for CHC Trestletree LLC's Trestletree
Village apartments project.
The outlook is negative.
"The downgrade reflects persisting cash-flow pressures in
conjunction with certain elevated operating expenses, resulting in
maximum annual debt service coverage of 0.07x in fiscal 2022, net
of one-time revenues from the sale of land, and our expectation
that coverage will likely remain below 1.0x in fiscal 2023," said
S&P Global Ratings credit analyst Daniel Pulter.
The series 2013A bonds were issued to acquire, renovate, and equip
Trestletree Village apartments, an affordable-housing complex in
Atlanta. The roughly 18.67-acre, family-oriented apartment complex
operates two sites, Trestletree North and Trestletree South. The
complex includes one- and two-story buildings containing a total of
188 units and was constructed between 1949 and 1953. Management
renovated the complex in 2014.
AVENTIS SYSTEMS: Seeks Continued Cash Collateral Access Thru Dec 31
-------------------------------------------------------------------
Aventis Systems, Inc. asks the U.S. Bankruptcy Court for the
Northern District of Georgia, Atlanta Division, for authority to
continue using cash collateral and provide adequate protection,
through December 31, 2023.
The Debtor requires the use of cash collateral to meet its ordinary
operating expenses and to continue its business operations.
The Debtor's management believes that the going concern value of
its inventory on hand as of June 30, 2023, is $7.198 million. The
Debtor also calculates $1.5 million of accounts receivable as of
June 30, 2023. The values of both the inventory and the accounts
receivable would be significantly less if the company was
liquidated.
The Debtor's first position secured lender is allegedly Funding
Circle/FC Marketplace, LLC, which, through counsel, filed a proof
of claim No. 28-1 for $18,631.98, consisting of $17,793 in
principal, $538 in interest, and $300 in fees. FC has also sought
adequate protection payments. Given the size of FC's claim, the 17
percent interest rate and FC's first lien position, the Debtor
believes in its business judgment that the administrative burden of
adequate protection payments does not justify making such payments
and seeks authority to pay the FC Claim in full, subject to an
appropriate reduction for a stay violation by FC.
The stay violation occurred when, after the petition date, FC's
collections department made repeated demands to the Debtor that it
reduce the outstanding balance or be subject to fees and penalties.
Without consulting counsel, Debtor paid FC $6,000 to avoid the
threatened fees and penalties. Accordingly, the balance allegedly
due to FC has been reduced to approximately $12,632. The Debtor
contends that FC's actions in demanding the post-petition payment
violated the automatic stay and deprived the Debtor of revenue
needed to manage its affairs in bankruptcy.
The Debtor hopes to reach resolution with FC for a reduced amount
due to the stay violation. However, the Debtor seeks authority to
pay the full amount of the claim. If FC will not settle with the
Debtor by reducing its payoff, the Debtor will pay off the claim
and also file a motion for contempt seeking damages, attorney fees
and to subordinate the FC Claim.
The Cash Collateral Order authorized the Debtor to pay in full the
claim of Amazon Capital Services, Inc., which was allegedly the
second position secured lender as of the petition date. ACS is now
paid in full and terminated its UCC-1. Accordingly, adequate
protection to ACS is no longer required.
The Cash Collateral Order further required the Debtor to make
interest only adequate protection payments to United Community
Bank, its alleged third position secured lender as of the Petition
Date. The Debtor made the required payments to UCB and proposes to
continue making the interest payments pursuant to a new cash
collateral order.
The Debtor also proposes to pay to UCB an amount equal to the sale
proceeds of two Tesla's once the sale motion has been approved by
the Court.
The Debtor proposes the following adequate protection:
1) FC (debt - approximately $12,632) - pay off the full amount of
debt, subject to an adjustment for the stay violation if an
accommodation can be reached with FC.
2) UCB (debt - approximately $3.5 million) - pay monthly
contractual rate of interest, plus principal payments in the amount
of 1/3 of the Debtor's positive cash flow as shown on its financial
statements, with a minimum monthly principal payment of $25,000.
3) All other Lenders - replacement lien to the same extent,
validity and priority as each Lender had pre-petition; and
4) MCAs - replacement lien only to the same extent, validity, and
priority as they had pre-petition and only to the extent there was
an indebtedness owed.
A copy of the motion and the Debtor's budget is available at
https://urlcurt.com/u?l=PGGHrV from PacerMonitor.com.
The Debtor projects total operating expenses, on a monthly basis,
as follows:
$1.9 million for September 2023;
$1.9 million for October 2023;
$1.9 million for November 2023; and
$1.9 million for December 2023.
About Aventis Systems, Inc.
Aventis Systems, Inc., a company in Atlanta, offers custom IT
solutions to build and operate complete physical and virtual
infrastructures. The comprehensive solutions include refurbished
and new hardware, system and application software, and an array of
in-depth managed services including infrastructure consultation,
cloud hosting and migration, virtualization deployment, data and
disaster recovery, security consultation, hardware relocation, and
equipment buyback.
Aventis Systems and affiliate, Cortavo, Inc., sought protection
under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Ga. Lead
Case No. 23-51162) on Feb. 6, 2023. In the petition signed by its
chief executive officer, Hessam Lamei, Aventis Systems disclosed up
to $50 million in assets and up to $10 million in liabilities.
Judge Lisa Ritchey Craig oversees the cases.
The Debtors tapped Anna Humnicky, Esq., at Small Herrin, LLP as
bankruptcy counsel; AI Law as special counsel; and Nichols, Cauley
& Associates, LLC as accountant.
BESTWALL LLC: Dodges 4th Circuit Rehearing of Bankruptcy Shield
---------------------------------------------------------------
James Nani of Bloomberg Law reports that cancer victims lost their
bid for another chance to challenge industrial giant
Georgia-Pacific LLC's legal protections stemming from the
bankruptcy of its asbestos liability unit, Bestwall LLC.
A majority of judges on the US Court of Appeals for the Fourth
Circuit voted Monday, August 7, 2023, to decline a full-court
rehearing of a June panel ruling that upheld a preliminary
injunction blocking thousands of asbestos exposure lawsuits against
Georgia-Pacific.
The decision fuels an ongoing debate over some financially healthy
corporations' controversial legal strategy, dubbed the Texas
Two-Step, to resolve mass tort liabilities through bankruptcy.
About Bestwall LLC
Bestwall LLC -- http://www.Bestwall.com/-- was created in an
internal corporate restructuring and now holds asbestos
liabilities. Bestwall's asbestos liabilities relate primarily to
joint systems products manufactured by Bestwall Gypsum Company, a
company acquired by Georgia-Pacific in 1965. The former Bestwall
Gypsum entity manufactured joint compounds containing small amounts
of chrysotile asbestos; the manufacture of these
asbestos-containing products ceased in 1977.
Bestwall's non-debtor subsidiary, GP Industrial Plasters LLC
("PlasterCo"), develops, manufactures, sells and distributes gypsum
plaster products, including gypsum floor underlayment, industrial
plaster, metal casting plaster, industrial tooling plaster, dental
plaster, medical plaster, arts and crafts plaster, pottery plaster
and general purpose plaster.
On Nov. 2, 2017, Bestwall sought Chapter 11 protection (Bankr.
W.D.N.C. Case No. 17-31795) in an effort to equitably and
permanently resolve all its current and future asbestos claims.
The Debtor estimated assets and debt of $500 million to $1 billion.
It has no funded indebtedness.
The Hon. Laura T. Beyer is the case judge.
The Debtor tapped Jones Day as bankruptcy counsel; Robinson,
Bradshaw & Hinson, P.A., as local counsel; Schachter Harris, LLP as
special litigation counsel for medicine science issues; King &
Spalding as special counsel for asbestos matters; and Bates White,
LLC, as asbestos consultants. Donlin Recano LLC is the claims and
noticing agent.
On Nov. 8, 2017, the U.S. bankruptcy administrator appointed an
official committee of asbestos claimants in the Debtor's case. The
committee retained Montgomery McCracken Walker & Rhoads, LLP as
legal counsel; and Hamilton Stephens Steele + Martin, PLLC and JD
Thompson Law as local counsel.
On Feb. 22, 2018, the court approved the appointment of Sander L.
Esserman as the future claimants' representative in the Debtor's
case. Mr. Esserman tapped Young Conaway Stargatt & Taylor, LLP as
legal counsel; Hull & Chandler, P.A., as local counsel; Ankura
Consulting Group, LLC as claims evaluation consultant; and FTI
Consulting, Inc., as financial advisor.
BH&G HOLDINGS: Involuntary Chapter 11 Case Summary
--------------------------------------------------
Alleged Debtor: BH&G Holdings, LLC
9555 Hillwood Drive, Suite 110
Las Vegas, NV 89134
Business Description: The Debtor is a Single Asset Real Estate
as defined in 11 U.S.C. Section 101(51B).
Involuntary Chapter
11 Petition Date: August 9, 2023
Court: United States Bankruptcy Court
District of Nevada
Case No.: 23-13321
Petitioners' Counsel: Blakeley E. Griffith, Esq.
SNELL & WILMER, L.L.P.
3883 Howard Hughes Parkway, Suite 1100
Las Vegas, NV 89169
Tel: 702-784-5200
E-mail: bgriffith@swlaw.com
A full-text copy of the Involuntary Petition is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/6XF6T7I/BHG_HOLDINGS_LLC__nvbke-23-13321__0001.0.pdf?mcid=tGE4TAMA
Alleged creditors who signed the petition:
Petitioner Nature of Claim Claim Amount
---------- --------------- ------------
MGP Apex 582 Multifamily, LLC Capital $26,593,877
170 Green Valley Parkway, Suite 300 Contributions/
Henderson NV 89012 Loans
MGP Apex 582 Guaranty, LLC Guaranty $3,781,644
170 S Green Valley Parkway,
Suite 300
Henderson NV 89012
MGP Apex 582 Development, LLC Capital $3,369,552
170 S Green Valley Parkway Contributions/
Suite 300 Loans
Henderson NV 89012
BIG BOY TOYS: Case Summary & 16 Unsecured Creditors
---------------------------------------------------
Debtor: Big Boy Toys II, LLC
148 Mays Road SE
Milledgeville, GA 31061
Business Description: The Debtor is the owner of real estate
property located at 3050 N. Columbia St
Milledgeville, GA valued at $275,000.
Chapter 11 Petition Date: August 9, 2023
Court: United States Bankruptcy Court
Middle District of Georgia
Case No.: 23-51073
Debtor's Counsel: Daniel L. Wilder, Esq.
EMMETT L GOODMAN JR LLC
544 Mulberry Street Suite 800
Macon, GA 31201
Tel: (478) 745-5415
Fax: (478) 746-8655
Email: bkydept@goodmanlaw.org
Total Assets: $1,811,500
Total Liabilities: $1,743,250
The petition was signed by John T. Stevens, IV as sole member.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 16 unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/GL45Q3I/Big_Boy_Toys_II__LLC__gambke-23-51073__0001.0.pdf?mcid=tGE4TAMA
BLOOMIN' BRANDS: S&P Alters Outlook to Positive, Affirms 'BB-' ICR
------------------------------------------------------------------
S&P Global Ratings revising its outlook on Tampa Florida-based
casual dining restaurant company Bloomin' Brands Inc. to positive
from stable and affirmed its 'BB-' issuer credit rating.
S&P said, "We are also raising the issue-level rating on Bloomin's
senior unsecured notes due 2029 to 'BB-' from 'B+' and revising our
recovery rating on the debt to '4' from '5', indicating our
expectations of average recovery (30%-50%; rounded estimate 40%) in
the event of a payment default or bankruptcy.
"The positive outlook reflects our expectation that Bloomin' will
continue to grow sales while maintaining margins despite an
increasingly challenging environment and maintain leverage of less
than 3x over the next 12 months.
"The positive outlook reflects our expectation for leverage of less
than 3x in 2023 and 2024. In 2022, Bloomin' generated S&P Global
Ratings-adjusted free operating cash flow (FOCF) of $239 million,
despite a substantial increase in capital expenditure (capex) to
around $220 million, mainly utilized for new restaurant openings.
We anticipate capital spending to increase to $260 million annually
in fiscal 2023 and 2024 for opening around 20 new restaurants each
year as part of its accelerated expansion plan in Brazil. Despite
this increase in spending, we believe stable margins will help the
company generate S&P Global Ratings-adjusted FOCF of at least $250
million in each of 2023 and 2024."
Bloomin' has reduced outstanding borrowings under its senior
secured credit facility by $65 million since the end of 2022.
During that same timeframe, the company's S&P Global
Ratings-adjusted EBITDA has increased approximately 7%
year-over-year to $409 million at June 25, 2023. S&P said, "We
forecast S&P Global Ratings-adjusted EBITDA to exceed $770 million
in 2023 and eclipse the $800 million in 2024 due to sales leverage
and improved operational efficiency. As a result, we expect S&P
Global Ratings-adjusted leverage to be in the mid- to high-2x range
in 2023 and 2024."
Bloomin' operates nearly 80% of its units and is directly exposed
to fluctuations in commodity prices, wage inflation, and other
restaurant-related operating cost pressures, as well as ongoing
capital investment needs. S&P said, "In our view, this segment of
the restaurant industry is more subject to volatility based on
underlying economic fluctuations and we believe the intense
competitive dynamics of the industry will return. We apply a
negative one-notch comparable rating analysis modifier to our
anchor score on Bloomin' to reflect these risks."
Bloomin's success in Brazil will provide it with a growth
accelerant as U.S. operations normalize. Bloomin's Brazil
operations have demonstrated strong growth, expanding same
restaurant sales 9.1% in the first half of 2023 after 38.3% growth
in 2022 (compared to combined U.S. growth of 3.1% and 4.0% during
the same periods). The company has a mall-centric restaurant base
in Brazil, which has resulted in sustained growth in customer
traffic over the last two years amid increasing mall foot-traffic,
and according to the company it has material share in Brazil's
casual dining market. S&P said, "We expect the company's growth in
Brazil to accelerate as it aims to double its footprint to nearly
300 stores by 2028. While Brazil enacted recent legislation that
will reverse Bloomin's tax exemption in the country starting in the
fourth quarter, we do not see this as having a meaningful impact on
the company's earnings potential."
Bloomin' has navigated a more stressed consumer environment, which
will be critical going forward. Following a hefty 20.7% increase in
combined U.S. traffic in 2021, Bloomin' saw a 5.3% decline the
following year, moderating to a 2.4% decline in the first half of
2023. Over the same period, S&P Global Ratings-adjusted EBITDA
margins stayed within a narrow band, standing at 16.8% in 2021,
contracting 60 basis points (bps) to 16.2% in 2022, and expanding
to 17.1% in the first half of 2023. S&P said, "We believe the
continuation of ongoing productivity initiatives, improved supply
chains, and targeted menu pricing will help Bloomin' maintain solid
EBITDA margins as it reduces discounting and promotions, driving
sustainable traffic. As a result, we anticipate S&P Global
Ratings-adjusted EBITDA margins to stabilize in the mid- to
high-16% area in 2023 and 2024."
The positive outlook reflects S&P's expectation that Bloomin' will
continue to grow sales while maintaining margins despite an
increasingly challenging environment and maintain leverage of less
than 3x over the next 12 months.
S&P could raise its rating over the next 12 months if:
Bloomin' continues its track record of generating higher sales and
relatively stable EBITDA margins, indicating sustained gains from
its market share and operating margin expansion initiatives; and
S&P Global Ratings-adjusted leverage is maintained below 3.5x and
we expect consistent annual FOCF generation in the $250 million
area.
S&P could revise the outlook to stable over the next 12 months if
operating performance falls short of its forecast, including weaker
margins and cash flow generation, as well as expected leverage of
more than 3.5x.
ESG factors are an overall neutral consideration in our credit
rating analysis of Bloomin' Brands Inc.
BOURBON STREET: Thomas Kapusta Named Subchapter V Trustee
---------------------------------------------------------
The Acting U.S. Trustee for Region 12 appointed Thomas Kapusta as
Subchapter V trustee for Bourbon Street, LLC.
Mr. Kapusta will be paid an hourly fee of $275 for his services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. Kapusta declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Thomas J. Kapusta
P.O. Box 90624
Sioux Falls, SD 57109
Email: tkapusta@aol.com
About Bourbon Street
Bourbon Street, LLC filed a petition under Chapter 11, Subchapter V
of the Bankruptcy Code (Bankr. D.N.D. Case No. 23-30246) on July
29, 2023, with $50,001 to $100,000 in assets and $100,001 to
$500,000 in liabilities.
Judge Shon Hastings oversees the case.
Maurice VerStandig, Esq., at Dakota Bankruptcy Firm represents the
Debtor as legal counsel.
CANDY CLUB: Tom Howley Named Subchapter V Trustee
-------------------------------------------------
The U.S. Trustee for Region 7 appointed Tom Howley, Esq., at Howley
Law, PLLC as Subchapter V trustee for Candy Club, LLC and its
affiliates.
Mr. Howley will be paid an hourly fee of $550 for his services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. Howley declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Tom Howley, Esq.
Howley Law, PLLC
711 Louisiana Street, Suite 1850
Houston, TX 77002
Telephone: (713) 333-9120
Email: tom@howley-law.com
About Candy Club
Candy Club, LLC and its affiliates design, market, and sell
premium, branded confectionary products in the United States. They
distribute confections to over 12,000 customers across all 50
states.
The Debtors filed petitions under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. S.D. Texas Lead Case No. 23-60048) on July
27, 2023. $1 million to $10 million in assets and liabilities. In
the petition signed by its chief executive officer, Keith Cohn,
Candy Club reported $1 million to $10 million in both assets and
liabilities.
Judge Christopher M. Lopez oversees the case.
Jackson Walker, LLP represents the Debtors as legal counsel.
CHIPLEY’S FAMILY: Seeks Cash Collateral Access
------------------------------------------------
Chipley's Family Restaurant, LLC asks the U.S. Bankruptcy Court for
the Middle District of Georgia for authority to use cash
collateral.
Corporation Service Company, as representative, and US Foods, Inc.
may claim an interest in the Debtor's restaurant revenues.
The restaurant revenues derive from a service provided and,
therefore, such revenues are not cash collateral, as defined in 11
U.S.C. Section 363. However, revenues are derived, in part, from
inventory used. If the restaurant revenues, or any part thereof,
are deemed cash collateral, then pursuant to 11 U.S.C. Section 552,
the restaurant revenues will be limited to the inventory used,
based on the equities of the case. The value of inventory at any
one time would be approximately $6,000.
Prior to the filing of the petition for relief, the Debtor was
permitted by creditors to use such revenues from collateral for
payment of expenses necessary for the operation of its business.
The Debtor proposes to use the revenues of operations to pay
operating expenses incurred in the normal course of its business.
As adequate protection, the Debtor proposes to grant creditors a
post-petition security interest in post-petition inventory and
proceeds to the same extent and priority that it held a prepetition
security interest in such inventory and proceeds, and to provide
adequate protection payments to creditors in exchange for the
Debtor's continued use of cash collateral postpetition.
A copy of the motion is available at https://urlcurt.com/u?l=QDa6Qj
from PacerMonitor.com.
About Chipley's Family Restaurant, LLC
Chipley's Family Restaurant, LLC owns and operates restaurants
known as Eddie Mae's Country Kitchen and Louise's Cafeteria.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. M.D. Ga. Case No. 23-40451) on August 4,
2023. In the petition filed by Peter Brochu, the Debtor disclosed
up to $100,000 in assets and up to $500,000 in liabilities.
Fife M Whiteside, Esq., at Fife M. Whiteside PC, represents the
Debtor as legal counsel.
CLEAR CHANNEL: Moody's Rates New $500MM Senior Secured Notes 'B1'
-----------------------------------------------------------------
Moody's Investors Service assigned a B1 rating to Clear Channel
Outdoor Holdings, Inc.'s proposed $500 million of senior secured
notes due 2028. Clear Channel's B3 Corporate Family Rating, B1
rating on the existing senior secured credit facility and senior
secured notes, and Caa2 rating on the existing senior unsecured
notes are unchanged. The outlook remains negative.
The majority of the net proceeds from the proposed senior secured
notes will be used to paydown the Term Loan B due in 2026. The
transaction is expected to be substantially leverage neutral and
modestly reduces interest expense.
Assignments:
Issuer: Clear Channel Outdoor Holdings, Inc.
Senior Secured Regular Bond/Debenture, Assigned B1
RATINGS RATIONALE
Clear Channel's B3 CFR reflects the company's dependence upon the
global economy and outdoor advertising spending as a percentage of
overall ad budgets, and particularly for transit advertising demand
given changes in urban work patterns and remote working. It also
reflects the company's stubbornly high leverage (10.2x as of Q1'23,
as reported), high debt levels, and negative free cash flows.
Moody's expects leverage will continue to improve going forward as
the company has and will continue to focus on selling their lower
performing international business segments. Clear Channel benefits
from its market position as one of the largest outdoor advertising
companies in the world with diversified international operations.
The ability to convert traditional static billboards to digital
provides growth opportunities which Moody's expects will lead to
higher revenue and EBITDA with appeal to a broader range of
advertisers. Outdoor advertising is not likely to suffer from
disintermediation as other traditional media outlets have and will
benefit from restrictions of the supply of additional billboards
(particularly in the US), which helps support advertising rates and
very high asset valuations.
The Speculative Grade Liquidity (SGL) rating of SGL-3 reflects
Moody's expectation that Clear Channel will maintain adequate
liquidity. Cash on the balance sheet was $340 million, while their
$150 million revolving credit facility had $43.2 million in letters
of credit (L/C) outstanding, resulting in $106.8 million of excess
availability as of Q1'23. The $175.0 million receivables-based
credit facility (which was upsized from $125 million) had $43.1
million of letters of credit outstanding. The receivables facility
available amount varies depending on the asset base available to
borrow against. Based upon the eligible accounts receivable of the
borrower and the subsidiary borrowers and after considering the
letters of credit outstanding, the available eligible balance as of
3/31/23 was $116.2 million. The sale of some of the company's
international assets that were agreed upon in Q2'23 will also
bolster liquidity or at least offset negative cash flows during the
back half of 2023. Free Cash Flow (FCF) remains $86m negative as of
LTM Q1'23 but improving from the $-262 and $-282 in 2020 and 2021,
respectively. Additional sales of non-core assets are possible
going forward, especially outside of North America, which could
provide Clear Channel with an additional source of liquidity.
The revolver is subject to a first lien net leverage ratio of 7.1x
if the sum of revolver draws and letters of credit exceed $10
million. If the total leverage ratio is equal to or less than 6.5x,
the revolver will only be subject to the first lien net leverage
ratio when greater than 35% is drawn. As of Q1'23, Clear Channel
was in compliance (around 35% buffer), as their First Lien Leverage
Ratio was 5.25x. Moody's projects Clear Channel will remain in
compliance with first lien net leverage ratio over the next twelve
months.
The negative outlook reflects Moody's expectation that leverage
levels will improve to under the 10x range towards the end of 2023
and beginning of 2024 as political advertising spend increases and
travel and other advertising spend recovers. Moody's expects Clear
Channel will have adequate liquidity, despite negative flow
persisting until fiscal year 2024, with ample access to external
funding.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
A ratings upgrade is not expected in the near term for Clear
Channel given the very high leverage levels. However, an upgrade
could occur if leverage decreased below 7x with a positive free
cash flow to debt ratio in the mid-single digits and an EBITDA
minus capex to interest coverage ratio of over 1.5x. An adequate
liquidity profile with a sufficient cushion of compliance with
financial covenants would also be required.
The ratings could be downgraded if leverage exceeds 10x for an
extended period of time or if the liquidity position deteriorated
such that there was an increased possibility of default or a
distressed exchange. An EBITDA minus capex to interest coverage
ratio sustained below 1x or inability to obtain an amendment on its
financial covenant applicable to its revolver if needed in the
future would also lead to a downgrade.
Clear Channel Outdoor Holdings, Inc. (CCO), headquartered in San
Antonio, Texas, is a leading global outdoor advertising company
focused in North America and Europe that generated revenue of about
$2.5 billion as of LTM Q1 2023. iHeartCommunications, Inc. (iHeart)
previously owned 89% of CCO and former iHeart debtholders obtained
a substantial portion of CCO's equity following iHeart's exit from
bankruptcy in Q2 2019.
The principal methodology used in this rating was Media published
in June 2021.
CONGREGATION COFFEE: Taps Lugenbuhl as Legal Counsel
----------------------------------------------------
Congregation Coffee, LLC seeks approval from the U.S. Bankruptcy
Court for the Eastern District of Lousiana to hire Lugenbuhl,
Wheaton, Peck, Rankin & Hubbard as its legal counsel.
The firm will advice the Debtor with respect to its business and
management of its property and to perform all legal services for
the debtor-in-possession which may be necessary.
The firm will be paid at these rates:
Stewart F. Peck $450/hour
Christopher T. Caplinger $450/hour
James W. Thurman $285/hour
Coleman L. Torrans $285/hour
Other associates $225/hour
Paralegals $100/hour
Lugenbuhl Wheaton is a disinterested person according to Section
101(14) of the Bankruptcy Code, according to court filings.
The firm can be reached through:
Christopher T. Caplinger, Esq.
Lugenbuhl, Wheaton, Peck, Rankin & Hubbard
601 Poydras St., Suite 2775
New Orleans, LA 70130
Phone: 504-568-1990
Email: ccaplinger@lawla.com
About Congregation Coffee
Congregation Coffee, LLC filed a petition under Chapter 11,
Subchapter V of the Bankruptcy Code (Bankr. E.D. La. Case No.
23-10879) on June 6, 2023, with $100,001 to $500,000 in assets and
$500,001 to $1 million in liabilities. Judge Meredith S. Grabill
oversees the case.
The Debtor is represented by Stewart Peck, Esq., at Lugenbuhl
Wheaton Peck Rankin & Hubbard.
CORNER OYSTER: Seeks Cash Collateral Access
-------------------------------------------
Corner Oyster House, LLC asks the U.S. Bankruptcy Court for the
Middle District of Georgia for authority to use cash collateral and
provide adequate protection.
Corporation Service Company, as representative, Vend Lease Company,
Inc., TimePayment Corp. Funding Metrics, LLC, and U.S. Small
Business Administration may claim an interest in restaurant
revenues.
The restaurant revenues are derive from a service provided and,
therefore, such revenues are not cash collateral, as defined in 11
U.S.C. Section 363. However, revenues are derived, in part, from
inventory used. If the restaurant revenues, or any part thereof,
are deemed cash collateral, then pursuant to 11 U.S.C. Section 552,
the restaurant revenues will be limited to the inventory used,
based on the equities of the case. The value of inventory at any
one time would be approximately $6,000.
Prior to the filing of the petition for relief, the Debtor was
permitted by creditors to use such revenues from collateral for
payment of expenses necessary for the operation of its business.
The Debtor proposes to use the revenues of operations to pay
operating expenses incurred in the normal course of its business.
As adequate protection, the Debtor proposes to grant creditors a
post-petition security interest in post-petition inventory and
proceeds to the same extent and priority that it held a prepetition
security interest in such inventory and proceeds, and to provide
adequate protection payments to creditors in exchange for the
Debtor's continued use of cash collateral postpetition.
A copy of the motion is available at https://urlcurt.com/u?l=MPuQN2
from PacerMonitor.com.
A copy of the budget is available at https://urlcurt.com/u?l=7pnDM9
from PacerMonitor.com.
The Debtor projects total expenses, on a monthly basis, as
follows:
-35,689 for August 2023;
-36,873 for September 2023;
-38,057 for October 2023;
-40,241 for November 2023; and
-51,912 for December 2023.
About Corner Oyster House, LLC
Corner Oyster House, LLC owns and operates a restaurant known as
Oyster House. The Debtor sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. M.D. Ga. Case No. 23-40452) on August
4, 2023. In the petition signed by Peter Brochu, the Debtor
disclosed up to $100,000 in assets and up to $1 million in
liabilities.
Fife M Whiteside, Esq., at Fife M. Whiteside PC, represents the
Debtor as legal counsel.
CSR WORLDWIDE: Seeks to Hire Hinkle Law as Bankruptcy Co-Counsel
----------------------------------------------------------------
CSR Worldwide OK, Inc. seeks approval from the U.S. Bankruptcy
Court for the Eastern District of Oklahoma to employ Hinkle Law
Firm LLC as its bankruptcy co-counsel.
Hinkle Law Firm will render these services:
(a) advise the Debtor of its rights, powers, and duties in the
operation and management or liquidation of its business and
property;
(b) advise the Debtor concerning and assist in the negotiation
and documentation of financing agreements, cash collateral orders
(if any) and related transactions;
(c) investigate into the nature and validity of liens asserted
against the property of the Debtor, and advise the Debtor
concerning the enforceability of those liens;
(d) investigate and advise the Debtor concerning and take such
action as may be necessary to collect income and assets in
accordance with applicable law and recover property for the benefit
of the Debtor's estate;
(e) prepare legal papers;
(f) advise the Debtor concerning and prepare responses to
applications, motions, pleadings, notices, and other documents
which may be filed and served;
(g) counsel the Debtor in connection with the formulation,
negotiation, and promulgation of plan and related documents; and
(h) perform such other necessary legal services.
The hourly rates of the firm's counsel and staff are as follows:
Nicholas R. Grillot $300
Associates $225
Legal Assistants $130
In addition, the firm will seek reimbursement for expenses
incurred.
Hinkle Law Firm has received a general retainer from the Debtor in
the sum of $35,000 for services to be rendered in connection with
this Chapter 11 case.
Nicholas Grillot, Esq., an attorney at Hinkle Law Firm, 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:
Nicholas R. Grillot, Esq.
Hinkle Law Firm LLC
1617 N. Waterfront Parkway, Ste. 400
Wichita, KS 67206
Telephone: (316) 660-6211
Facsimile: (316) 660-6523
Email: ngrillot@hinklaw.com
About CSR Worldwide OK
CSR Worldwide OK, Inc. filed a petition under Chapter 11,
Subchapter V of the Bankruptcy Code (Bankr. E.D. Okla. Case No.
23-80391) on June 6, 2023, with $7,099,094 in assets and $7,130,915
in liabilities. CSR CEO Troy Don Burgess signed the petition.
The Debtor tapped Brown Law Firm, PC as counsel and D. R. Payne &
Associates, Inc. as its chief restructuring officer.
CSR-OK WORLDWIDE: Seeks to Tap Hinkle Law as Bankruptcy Co-Counsel
------------------------------------------------------------------
CSR-OK Real Estate Holding Company, LLC seeks approval from the
U.S. Bankruptcy Court for the Eastern District of Oklahoma to hire
Hinkle Law Firm LLC as its bankruptcy co-counsel.
Hinkle Law Firm will render these services:
(a) advise the Debtor of its rights, powers, and duties in the
operation and management or liquidation of its business and
property;
(b) advise the Debtor concerning and assist in the negotiation
and documentation of financing agreements, cash collateral orders
(if any) and related transactions;
(c) investigate into the nature and validity of liens asserted
against the property of the Debtor, and advise the Debtor
concerning the enforceability of those liens;
(d) investigate and advise the Debtor concerning and take such
action as may be necessary to collect income and assets in
accordance with applicable law and recover property for the benefit
of the Debtor's estate;
(e) prepare legal papers;
(f) advise the Debtor concerning and prepare responses to
applications, motions, pleadings, notices, and other documents
which may be filed and served;
(g) counsel the Debtor in connection with the formulation,
negotiation, and promulgation of plan and related documents; and
(h) perform such other necessary legal services.
The hourly rates of the firm's counsel and staff are as follows:
Nicholas R. Grillot $300
Associates $225
Legal Assistants $130
In addition, the firm will seek reimbursement for expenses
incurred.
Hinkle Law Firm has received a general retainer from the Debtor in
the sum of $35,000 for services to be rendered in connection with
this Chapter 11 case.
Nicholas Grillot, Esq., an attorney at Hinkle Law Firm, 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:
Nicholas R. Grillot, Esq.
Hinkle Law Firm LLC
1617 N. Waterfront Parkway, Ste. 400
Wichita, KS 67206
Telephone: (316) 660-6211
Facsimile: (316) 660-6523
Email: ngrillot@hinklaw.com
About CSR-OK Real Estate
CSR-OK Real Estate Holding Company owns real estate located at
473617 E 610 Rd Watts, Oklahoma valued at $3.7 million.
CSR-OK Real Estate Holding Company, LLC filed its voluntary
petition for relief under Chapter 11 of the Bankruptcy Code (Bankr.
E.D. Okla. Case No. 23-80390) on June 6, 2023. The petition was
signed by Troy Don Burgess as chief executive officer. At the time
of filing, the Debtor estimated $9,517,036 in assets and
$12,767,298 in liabilities.
Ron Brown, Esq. and R. Gavin Fouts, Esq. at Brown Law Firm, PC
represent the Debtor as counsel.
DAHLIA MEDITERRANEAN: Taps Bolger Law Firm as Bankruptcy Counsel
----------------------------------------------------------------
Dahlia Mediterranean LLC seeks approval from the U.S. Bankruptcy
Court for the Eastern District of Virginia to hire Bolger Law Firm,
PLLC as its bankruptcy counsel.
The firm will render these services:
a) assist and advise Debtor relative to the administration of
this proceeding;
b) advise Debtor with respect to its powers and duties as
debtor-in-possession in the continued management and operation of
its business and property;
c) represent the Debtor before the Bankruptcy Court and advise
the Debtor on pending litigation, hearings, motions, and decisions
of the Bankruptcy Court;
d) review and advise the Debtor regarding applications,
orders, and motions filed with the Bankruptcy Court by third
parties in this proceeding;
e) attend meetings conducted pursuant to section 341(a) of the
Bankruptcy Code and represent Debtor at all examinations;
f) communicate with creditors and other parties in interest;
g) assist Debtor in preparing all motions, applications,
answers, orders, reports, and papers necessary to the
administration of the estate;
h) confer with other professionals retained by Debtor and
other parties in interest;
i) negotiate and prepare Debtor's chapter 11 plan, related
disclosure statement, and all related agreements and documents and
take any necessary actions on Debtor's behalf to obtain
confirmation of the plan; and
j) perform all other necessary legal services and provide all
other necessary legal advice to Debtor in connection with this
chapter 11 case.
The hourly rates for Bolger Law Firm attorneys and paralegals is
$450 for Richard Owen Bolger and $150 for paralegals.
Bolger Law Firm does not hold or represent an interest adverse to
Debtor's estate with respect to the matters for which the firm is
to be employed and is a "disinterested person," as that term is
defined in section 101(14) of the Bankruptcy Code and modified by
section 1107(b), according to court filings.
The firm can be reached through:
Richard O Bolger, Esq.
Bolger Law Firm, PLLC
10347 Democracy Lane
Fairfax, VA 22030-2505
Phone: (703) 383-9595
Email: richard@bolgerlaw.com
About Dahlia Mediterranean
Dahlia Mediterranean, LLC sought relief under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. E.D. Va. Case No. 23-11029) on June
21, 2023. In the petition filed by Abdalla Hashish, as co-owner,
the Debtor reported assets between $1 million and $10 million and
estimated liabilities between $500,000 and $1 million.
The Debtor is represented by Richard Owen Bolger, Esq. at Bolger
Law Firm, PLLC.
DIVERSITY FREIGHT: James Fellin Named Subchapter V Trustee
----------------------------------------------------------
The U.S. Trustee for Regions 3 and 9 appointed James Fellin, a
certified public accountant at The Nottingham Group, LLC, as
Subchapter V trustee for Diversity Freight Lines Inc.
Mr. Fellin will be paid an hourly fee of $375 for his services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. Fellin declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
James S. Fellin, CPA, CFE
The Nottingham Group, LLC
One Gateway Center, Suite 700
Pittsburgh, PA 15222
Phone: (412) 288-9948
Email: jfellin@nottinghamgroup.com
About Diversity Freight
Diversity Freight Lines, Inc., a trucking company in Pennsylvania,
filed a petition under Chapter 11, Subchapter V of the Bankruptcy
Code (Bankr. W.D. Pa. Case No. 23-21584) on July 27, 2023, with $1
million to $10 million in both assets and liabilities. Kanatbek
Nurmamatov, president, signed the petition.
Christopher M. Frye, Esq., at Steidl & Steiberg, P.C. represents
the Debtor as legal counsel.
EBERHARDT PARTNERSHIP: Unsecureds to Get 10 Cents on Dollar in Plan
-------------------------------------------------------------------
Eberhardt Partnership filed with the U.S. Bankruptcy Court for the
Northern District of California a Plan of Reorganization for Small
Business dated August 3, 2023.
The Debtor is a general partnership whose partners are Ian
Eberhardt and Fran Eberhard, husband and wife. It does business as
Acme Saw Sales and Service, selling saw blades to cabinet shops,
carpenters and other businesses and sharpening various types of saw
blades.
With the onset of the Pandemic, cabinet shops shuttered operations
which had a detrimental impact on Debtor's business. After shops
re-opened, supply shortages prevented shops from completing orders
resulting in a continued detrimental impact of Debtor's operations.
With supply chain issues eased, Debtor's business has now
stabilized allowing Debtor to propose the Plan.
The Debtor's financial projections show that the Debtor will have
projected disposable income of $325,410. The final payment is
projected to be on or about November 2028.
This Plan of Reorganization proposes to pay creditors solely from
the revenue generated by the business.
Non-priority unsecured creditors holding allowed claims will
receive a pro-rata distribution of $10,500 which the proponent of
this Plan has valued at approximately 10 cents on the dollar. This
Plan also provides for the payment of administrative and priority
claims.
Class 6 consists of General Unsecured Creditors. The allowed
claims of general unsecured creditors shall be paid a fund totaling
$10,500. A pro-rata disbursement of $250 per month commencing the
19th month after the Effective Date for 42 consecutive months.
Pro-rata means the entire amount of the claim divided by the entire
amount owed to creditors with allowed claims in this class. For
any general unsecured claimant whose distribution is less than
$50.00, the Debtor may accrue the distribution and disburse once
the accrual reaches $50.00. This Class is impaired.
Class 7 consists of General Unsecured (insider claims). The
insider claims of Ian Eberhardt and Fran Eberhardt shall not
receive any distributions under the Plan.
Ian Eberhardt and Fran Eberhardt shall retain their partnership
interest in the Debtor.
The Debtor anticipates that it will continue operations. The Plan
uses the mean gross revenue in the most recent 2 months. It
similarly uses the mean expenses for the last two months. Fran's
partnership draw remains at $5,600 per month. Ian Eberhardt is
working full-time at $1,500 per month to promote plan feasibility.
A full-text copy of the Plan of Reorganization dated August 3, 2023
is available at https://urlcurt.com/u?l=jxbqfD from
PacerMonitor.com at no charge.
Attorney for Debtor:
Lars T. Fuller, Esq.
Sam Taherian, Esq.
Joyce K. Lau, Esq.
The Fuller Law Firm, P.C.
60 No. Keeble Ave.
San Jose, CA 95126
Telephone: (408) 295-5595
Facsimile: (408) 295-9852
Email: admin@fullerlawfirm.net
About Eberhardt Partnership
Eberhardt Partnership sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bakr. N.D. Cal. Case No. 22-50291) on April
6, 2022. In the petition filed by Franes Eberhardt, general
partner, the Debtor disclosed up to $500,000 in assets and up to $1
million in liabilities.
Judge Stephen L. Johnson oversees the case.
Lars Fuller, Esq., at The Fuller Law Firm, PC, is the Debtor's
counsel.
ECL ENTERTAINMENT: Moody's Rates New $380MM First Lien Loan 'B2'
----------------------------------------------------------------
Moody's Investors Service assigned a B2 rating to ECL
Entertainment, LLC's proposed $380 million senior secured 1st lien
term loan B and a B2 rating to its proposed $50 million senior
secured revolving credit facility. In the same rating action,
Moody's affirmed ECL's ratings, including its B2 Corporate Family
Rating and B2-PD Probability of Default Rating. ECL's Ba2 rating on
the existing $20 million priority senior secured revolving credit
facility and its B2 rating on the existing $370 million senior
secured 1st lien term loan B remain unchanged and will be withdrawn
upon the closing of the refinancing transaction. The outlook
remains stable.
Proceeds from the company's proposed senior secured credit facility
will be used to refinance the existing senior secured credit
facility. The proposed 1st lien term loan B will be ranked pari
passu with the proposed senior secured revolving credit facility.
The ratings affirmation reflects Moody's expectation that the
refinancing will reduce ECL's funding cost and extend its debt
maturity. These credit positives offset its small size, an appetite
for development risks, and private ownership. Moody's expects that
ECL will generate positive free cash flow to cover all debt
services and maintain a financial policy that will sustain Moody's
leverage (debt/EBITDA) between 4.0x and 4.5x in the next twelve to
eighteen months. This expectation was incorporated into the stable
outlook.
Assignments:
Issuer: ECL Entertainment, LLC
Senior Secured 1st Lien Bank Credit Facility, Assigned B2
Outlook Actions:
Issuer: ECL Entertainment, LLC
Outlook, Remains Stable
Affirmations:
Issuer: ECL Entertainment, LLC
Corporate Family Rating, Affirmed B2
Probability of Default Rating, Affirmed B2-PD
RATINGS RATIONALE
ECL's B2 ratings reflect its favorable earnings prospects of
expansion and development projects. Those include a satellite 450
HHR machine location in Williamsburg, Kentucky (ECL Corbin, LLC),
the 5,000 SF convention space at Kentucky Downs, a 134-room
Springhill Suites hotel at The Mint Gaming Hall at Kentucky Downs,
and a 5/8th mile standardbred track in Corbin, Kentucky. Kentucky
Downs is the closest gaming facility to Nashville, TN, a major
metropolitan area. The density of the market in terms of customer
population is expected to support the expansion.
Credit concerns include the relatively small size of ECL in terms
of revenue and very concentrated revenue in their properties along
the Kentucky-Tennessee border. Moody's projected that ECL's total
revenues (net of all statutory expenses, royalties, and leasing
fees) will increase with the completion of the expansion projects,
but it will still be very small, at about $200 million for 2023.
Additionally, a lower-than-expected initial ramp up and longer-term
return-on-investment performance can unfavorably alter leverage and
free cash flow expectations.
ECL's proposed senior secured 1st lien term loan B and its proposed
senior secured revolving credit facility will be part of same
credit agreement and are secured by a first priority lien on
substantially all the tangible and intangible assets of the
borrowers and guarantors, including all outstanding equity
interests directly held by the borrowers and guarantors, subject to
certain limited exceptions.
ECL's liquidity is supported by its $66 million of unrestricted
cash at June 30, 2023 (pro forma) and the full availability of the
proposed $50 million senior secured revolving credit facility
maturing in August 2028. Besides the proposed revolver, the company
has no maturities over the next few years until its proposed $380
million senior secured 1st lien term loan B comes due in August
2030.
The stable outlook reflects Moody's expectation that ECL will
generate positive free cash flow to cover all debt services and
maintain a financial policy that will sustain Moody's leverage
(debt/EBITDA) between 4.0x and 4.5x in the next twelve to eighteen
months.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Ratings could be upgraded if the company expands in size and scale
commensurate with higher rated peers while maintaining its
financial policy of operating comfortably below 4.0x debt/EBITDA.
Ratings upgrade would also require that ECL generates consistent
positive free cash flow.
Ratings could be downgraded if there is a decline in EBITDA
performance from factors such as volume pressures or higher
operating costs, liquidity deteriorates, or the company is unable
to sustain debt-to-EBITDA on an LTM basis below 5.0x.
The principal methodology used in these ratings was Gaming
published in June 2021.
ECL is a privately-owned, regional gaming company focused on the
Nashville, Knoxville and Southern Kentucky markets. ECL was formed
in March 2019 by an investor group led by Marc Falcone and Ron
Winchell. The company owns and operates Kentucky Downs, LLC (a/k/a
the "Mint at Kentucky Downs"), an existing thorough-bred horse
racetrack with 1,078 Historical Horse Racing machines ("HHR")
facility with 6 food and beverage options on the border of
Tennessee and Kentucky and the closest gaming facility to
Nashville, TN. In addition, the Company owns and operates Bowling
Green, a 450 machine HHR facility with 3 food and beverage outlets
in Bowling Green, Kentucky, Cumberland Run Mint, a 450 HHR machine
facility with 2 food and beverage outlets in Williamsburg, KY,
Cumberland Run, a standard-bred track with 51 HHR machines in
Corbin, KY and a 134-room Springhill Suites Hotel at Kentucky
Downs. Its total net revenue for YE 2022 was about $141.1 million,
which is net of all statutory expenses, royalties, and leasing
fees.
EMERGENT BIOSOLUTIONS: Cuts 400 Jobs, Eliminates COO Role
---------------------------------------------------------
Emergent BioSolutions (NYSE: EBS) on Aug. 8, 2023, announced it is
reducing investment in and de-emphasizing focus on growth in its
CDMO services business. As a result, Emergent is reducing
operations at its Bayview facility in Baltimore, Maryland.
Additionally, Emergent will reduce operations at its facility in
Canton, Massachusetts, in response to changes in the volume of U.S.
government procurements of medical countermeasures. This action
will also result in a small reduction in operations at the
company's Rockville, Maryland, drug product facility.
Going forward, Emergent will focus on its core products business --
medical countermeasures and NARCAN(R) Nasal Spray -- and on
delivering for its existing customers, including the U.S. and
allied governments. Emergent will maintain a level of operations
at both Bayview and Canton to ramp up production in response to new
demand.
"The actions we are taking will further strengthen our core
products business and financial foundation," said Emergent interim
Chief Executive Officer Haywood Miller. "This will better align
Emergent's businesses with a focus on our core products and
delivering for the needs of our customers. It will provide us with
flexibility to respond to future customer demand while responsibly
maintaining manufacturing infrastructure deemed critical to respond
to public health threats."
Paul Williams, senior vice president, products, added, "Our focus
is in the areas in which we are uniquely equipped to have a
positive impact. We remain committed to partnering with the U.S.
and allied governments to help address public health threats
including anthrax, smallpox, and Ebola while also successfully
increasing access to NARCAN Nasal Spray as an over-the-counter
treatment to help address America's opioid overdose epidemic and
give people in crisis a second chance."
These strategic actions will lead to a reduction of approximately
400 employees across all areas of the company. In combination with
other cost reduction initiatives, these actions are expected to
result in annualized savings of over $100 million when fully
implemented. The costs associated with these actions are estimated
to be approximately $19 million - $21 million and are expected to
be incurred in the third quarter of 2023.
As a result of the strategic shift away from Emergent's services
business, the company is eliminating the chief operating officer
(COO) role. As such, Adam Havey, executive vice president and
current COO, will be leaving the company on Sept. 30, 2023. Bill
Hartzel, senior vice president and head of bioservices, will assume
responsibility for manufacturing operations and will join the
executive management team reporting to the interim CEO.
"Changes like these are never easy as they impact many of our
colleagues," said Miller. "I want to thank Adam for his more than
20 years of service to Emergent, and all those who are affected by
these actions for their dedication and contributions. Emergent is
committed to working with impacted employees to help transition
them to new opportunities."
Since the beginning of 2023, Emergent has successfully completed
several key strategic milestones, including:
* Securing contracts with the U.S. government to procure
ACAM2000, Emergent’s smallpox vaccine, as well as BAT, VIGIV and
RSDL.
* FDA approval to make NARCAN Nasal Spray the first opioid
overdose reversal agent available over-the-counter. The launch of
OTC NARCAN Nasal Spray is still on track for later this summer.
* Final approval of the biologics license application for
CYFENDUS, Emergent's second anthrax vaccine previously known as
AV7909.
* A new contract with BARDA valued at up to $704 million for
advanced development, manufacturing scale-up, and procurement of
Ebanga(TM), an FDA licensed treatment for Ebola virus disease.
* Completing the sale of Emergent's travel health business.
* Amending and extending its debt obligations.
About Emergent Biolutions
Headquartered in Gaithersburg, Maryland, Emergent BioSolutions Inc.
is a life sciences company that provides pharmaceuticals, vaccines,
medical devices and contract manufacturing services related to
public health threats affecting civilian and military populations.
EMPLOYBRIDGE HOLDING: S&P Alters Outlook to Neg., Affirms 'B-' ICR
------------------------------------------------------------------
S&P Global Ratings revised its outlook to negative from stable and
affirmed its 'B-' issuer credit rating on Atlanta-based temporary
staffing provider EmployBridge Holding Co.
S&P said, "At the same time, we affirmed our 'B-' issue level
rating on the senior secured debt and revised the recovery rating
on this debt to '4' from '3'. The '4' recovery rating reflects our
expectation for average recovery (30%-50%) in the event of a
payment default.
"The negative outlook reflects that we could lower the ratings if
we believed the capital structure became unsustainable, or if the
company faced a severe liquidity shortfall.
"The outlook revision reflects our view that macroeconomic
headwinds will limit Employbridge's ability to generate cash flow
and cover fixed charges over the next 12 months.
"The company has been severely impacted by macroeconomic headwinds
as clients reduced demand and costs amid economic uncertainty and
inflationary pressures. We expect revenues to decrease by 13% in
2023 due to a decline in volume and hours billed. As a result, we
forecast S&P Global Ratings-adjusted EBITDA will decrease by 12% to
approximately $100 million this year. Combined with the increase in
debt from the acquisitions of Hire Dynamics and Bluecrew, this has
left minimal ratings cushion to absorb a weaker earnings cycle. As
a result, we expect leverage will increase to 10.8x in fiscal 2023
from 9.3x during the same period in 2022, and we expect the company
will generate negative free operating cash flow (FOCF) this year.
Although we expect leverage to modestly decrease due to EBITDA
growth in 2024, it will remain elevated in the mid 8x area.
Additionally, the EBITDA decline and rising interest rate
environment has caused the interest coverage to fall to 1.0x from
1.9x the year prior."
S&P expects the company's margins will remain pressured.
As of the 12 months ended March 31, 2023, S&P Global
Ratings-adjusted EBITDA margins was 2.7%, down from 4.4%
pre-pandemic in 2019. S&P said, "The lower margin reflects lower
demand, integration costs for the Higher Dynamics and Bluecrew
acquisitions, as well as roughly $23 million of transaction-related
costs from the company's leveraged buyout by Apollo (which we
expect to roll off by the end of this year). EmployBridge
implemented several cost-saving initiatives in an effort to improve
margins, which include synergies related to the Hire Dynamics and
Bluecrew acquisitions. We expect S&P Global Ratings-adjusted EBITDA
margins to expand between 50 basis points (bps)-100 bps in 2024 as
the one-time costs roll off and the company achieves acquisition
synergies. Nonetheless, we believe EmployBridge will continue to
face challenges in its expanding margins over the next several
years as bill-rate increases could become harder to achieve because
higher pay-rates could provide employers with less leverage in wage
negotiations."
Majority ownership by financial sponsor increases financial risk.
EmployBridge is financial sponsor-owned and has a history of
pursuing debt-funded acquisitions. In November 2021, the company
acquired Hire Dynamics, a commercial staffing and professional
recruitment services provider, funded by a mix of cash on hand,
equity, and a $200 million fungible add-on to its existing $725
million first-lien term loan due 2028. In November 2022, the
company acquired Bluecrew, which is an app-based workforce
management platform, funded by a mix of cash on hand and equity.
S&P believes Apollo's majority ownership and ability to dictate
EmployBridge's strategy could lead the company to adopt a more
aggressive financial policy, such as pursuing additional
debt-financed acquisitions or distributions, and result in a
deterioration in credit measures.
S&P said, "The negative outlook reflects our expectation that
macroeconomic headwinds will continue to impact the ability of
EmployBridge to grow their EBITDA base over the next 12 months,
which could pressure their ability to deleverage the business and
generate positive free cash flows.
"We could lower the rating if we believed the capital structure
became unsustainable or if the company faced a severe liquidity
shortfall. This would most likely occur due to a further
deterioration in operating performance resulting in significantly
wider cash flow deficits and sustained high debt leverage, or its
access to its asset-based lending (ABL) revolver becoming
constrained due to shrinking asset base."
A positive rating action over the next 12 months is unlikely and
depends on a substantial improvement in the operating performance
resulting in positive free cash flows and gross margins in line
with pre-pandemic levels.
ENVISION HEALTHCARE: Committee Seeks OK to Hire Investment Banker
-----------------------------------------------------------------
The official committee of unsecured creditors of Envision
Healthcare Corporation and affiliates seeks approval from the U.S.
Bankruptcy Court for the Southern District of Texas to employ Piper
Sandler & Co. as its investment banker.
The firm will render these services:
(a) review and analyze the Debtors' assets, liabilities,
business plans, and financial projections prepared by the Debtor;
(b) evaluate the Debtors' debt capacity in light of its
projected cash flows;
(c) assist the Committee in the determination of an
appropriate capital structure for the Debtor;
(d) assist the Committee in evaluating the Debtors' liquidity,
including seeking and considering financing alternatives;
(e) assist the Committee in valuing the Debtors' businesses
and creditors' recoveries under the Debtors' proposed, or any
alternative, plan of reorganization;
(f) assist the Committee in reviewing the terms of the
Debtors' proposed restructuring plan and restructuring support
agreement (or any proposed Transaction), in of all or a portion of
the Debtors' assets, or other M&A transaction;
(i) assist the Committee in identifying, assessing, and
valuing any unencumbered assets of the Debtors;
(j) assist the Committee or participate in negotiations with
the parties in interest, including the Debtors, any current or
prospective creditors of, holders of equity in, or claimants
against the Debtors, and/or their respective representatives in
connection with a Transaction;
(k) if requested by the Committee, participate in hearings in
the Cases and provide relevant testimony and issues arising in
connection with any proposed chapter 11 plan; and
(l) render such other financial advisory and investment
banking services as may be agreed upon by Piper Sandler and the
Committee.
The firm will be compensated as follows:
(a) Monthly Fee. An advisory fee of $175,000 per month. The
initial Monthly Fee shall be pro-rated based on the commencement of
services through to the end of the calendar month. Subject to
Bankruptcy Court approval, the initial Monthly Fee shall be earned
upon the execution of the Engagement Letter, and thereafter the
Monthly Fee shall be earned and payable in advance on the first day
of each month.
(b) Transaction Fee. A fee of $4,000,000, payable upon the
consummation of any Transaction. Only one Transaction Fee can be
earned by Piper Sandler pursuant to the Engagement Letter.
(c) After six full Monthly Fees have been earned (i.e.,
excluding the initial Monthly Fee, if such fee was for less than a
full calendar month), 50 percent of the Monthly Fees thereafter
shall be credited against any Transaction Fee; provided that the
Monthly Fee Credit shall not exceed the Transaction Fee.
(d) To the extent that the Committee requests that Piper
Sandler perform additional services not contemplated by the
Engagement Letter, such additional fees (if any) as shall be
mutually agreed upon by Piper Sandler and the Committee, in
writing, in advance.
Mike Genereux, a managing director of Piper Sandler & Co.,
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:
Mike Genereux
Piper Sandler & Co.
1251 Avenue of the Americas, Sixth Floor
New York, NY 10020
Telephone: (212) 284-9300
Email: mike.genereux@psc.com
About Envision Healthcare Corporation
Envision Healthcare Corporation -- http://www.EnvisionHealth.com/
-- is a national medical group that delivers physician and advanced
practice provider services, primarily in the areas of emergency and
hospitalist medicine, anesthesiology, radiology, teleradiology and
neonatology. As a leader in ambulatory surgical care, AMSURG holds
ownership in more than 250 surgery centers in 41 states and the
District of Columbia, with medical specialties ranging from
gastroenterology to ophthalmology and orthopedics. In total, the
medical group offers a differentiated suite of clinical solutions
on a national scale with a local understanding of communities,
creating value for health systems, payers, providers and patients.
On May 15, 2023, Envision and affiliates filed voluntary petitions
for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D.
Texas Lead Case No. 23-90342). Envision reported $1 billion to $10
billion in both assets and liabilities.
Judge Christopher M. Lopez oversees the cases.
The Debtors tapped Kirkland & Ellis, LLP and Kirkland & Ellis
International, LLP as bankruptcy counsels; Jackson Walker, LLP as
conflict counsel and co-counsel with Kirkland & Ellis; Alvarez &
Marsal North America, LLC as restructuring advisor; PJT Partners,
LP as investment banker; and KPMG, LLP as tax consultant. Kroll
Restructuring Administration, LLC is the claims, noticing and
solicitation 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 White & Case, LLP as legal counsel and Force Ten
Partners, LLC as financial advisor.
EPIC CRUDE: S&P Upgrades ICR to 'B-' on Improved Performance
------------------------------------------------------------
S&P Global Ratings raised its issuer credit rating on Epic Crude
Services L.P. to 'B-' from 'CCC+' and its issue-level rating on its
senior secured debt to 'B-' from 'CCC+'. The '3' recovery rating on
the debt is unchanged, indicating its expectation of meaningful
(50%-70%; rounded estimate: 55%) recovery in the event of a payment
default.
The stable outlook reflects S&P's expectation that the company's
credit metrics will improve throughout its outlook period, with S&P
Global Ratings-adjusted debt to EBITDA in the 7x area in 2023,
trending toward 6x in 2024.
Epic's credit metrics continue to improve driven by strengthening
asset utilization and an improving contract profile. As demand for
crude exports remains high and pipelines in Corpus Christi, Texas,
are trending full, Epic benefits from its strategic asset location.
The company has operated at about 90% of capacity, which is higher
year over year. S&P said, "Given strong demand pull, we believe
Epic has the ability to continue securing contracts at favorable
rates. We estimate about 60%-70% of contracted volumes are
underpinned by minimum volume commitments over 2023 and 2024,
improved from 2022. If Epic maintains utilization rates at current
levels while realizing improving tariffs, we believe it is well
positioned to continue leverage improvement over the next few
years. Year to date, the company has signed additional contracts at
higher rates. We now forecast S&P Global Ratings-adjusted debt to
EBITDA in the 7x area in 2023, trending toward the 6x area in
2024."
S&P said, "As leverage continues to improve, Epic's contract length
provides some level of uncertainty for outer years. On a
weighted-average basis, we view Epic's contracts duration as
relatively shorter in tenor compared to higher rated peers'. That
said, we believe management will continue seeking longer-term
contracts and can renew certain expiring contracts at higher market
rates.
"We expect Epic to continue to increase its cash position but
believe the fully drawn revolving credit facility (RCF) provides
limited financial flexibility to some extent. We believe the
company will largely depend on a combination of cash flow from
operations and external capital support to fund larger growth
projects.
"The stable outlook on Epic Crude reflects our expectation that its
credit measures will strengthen year over year as the company
maintains its elevated asset utilization while securing contracts
at favorable rates. We also expect the company's S&P Global
Ratings-adjusted debt to EBITDA will trend toward 6x in 2024.
"We could consider a positive rating action if Epic Crude sustains
S&P Global Ratings-adjusted debt to EBITDA below 6x while improving
its liquidity position."
S&P could consider a negative rating action on Epic Crude if it
views its capital structure as unsustainable. This could occur if
the company:
-- Generates significantly lower-than-expected EBITDA due to a
material decline in volumes or contracts restructured at lower
rates; or
-- Pursues a more aggressive financial policy.
FRANKLIN SOUTHERN: Court OKs Interim Cash Collateral Access
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida,
Jacksonville Division, authorized Franklin Southern Manufacturing,
LLC to use the cash collateral of Reibus International, Inc. on a
interim basis.
The Debtor requires the use of cash collateral to continue
operating the business and pay salaries.
As of the Petition Date, the Debtor was indebted to Reibus in the
approximate amount of $2.162 million. The Debtor's obligation is
evidenced by a Promissory Note, Security Agreement, Financing
Statement, and Chattel Mortgage executed on or about October 3,
2022 to the Lender, pursuant to which the lender provided funds to
the Debtor.
As additional adequate protection of the lender's interest and the
estate's interest in cash collateral, the lender is granted a
replacement lien to the same nature, priority, and extent that the
lender may have had immediately prior to the date that this case
was commenced nunc pro tunc to the Petition Date.
Further, the lender is granted a replacement lien and security
interest on property of the bankruptcy estate to the same extent
and priority as that which existed pre-petition on all of the cash
accounts, accounts receivable and other assets and property
acquired by the Debtor's estate or by the Debtor on or after the
Petition. The replacement lien in the Post-Petition Collateral will
be deemed effective, valid and perfected as of the Petition Date,
without the necessity of filing with any entity of any documents or
instruments otherwise required to be filed under applicable
non-bankruptcy law.
The Debtor is Ordered to pay Adequate Protection payments as
follows:
a. $3,500 per month to Reibus commencing June 1, 2023 and on
the 1st of the month thereafter or further Order of the Court;
b. No adequate protection is ordered to any other lender at
this time due to the value of the cash collateral being less than
the amount owed to Reibus.
As additional adequate protection of the lender's interest in the
cash collateral, the Debtor will (a) maintain all necessary
insurance coverage on the lender's collateral and under no
circumstances will the Debtor allow its insurance coverage to
lapse, (b) continue to pay such monthly insurance payment in a
timely manner, and (c) within two days of the request of the
lender, the Debtor will provide to the lender's counsel a written
statement supported by evidence of the Debtor's compliance with the
foregoing.
The Debtor's authority to use cash collateral will terminate
immediately and upon the earlier of (a) order of the Court; (b) the
conversion of the case to a Chapter 7 case or the appointment of a
Chapter 11 trustee without the consent of the lender; (c) the entry
of an Order that alters the validity or priority of the replacement
liens granted to the Bank; (d) the Debtor ceasing to operate all or
substantially all of its business; (e) the entry of an order
granting relief from the automatic stay that allows any entity to
proceed against any material assets of the Debtor that constitute
cash collateral; (f) the entry of an Order authorizing a security
interest under Section 364(c) or 364(d) of the Bankruptcy Code in
the collateral to secure any credit obtained or debt incurred that
would be senior to or equal to the replacement lien; or (g) the
dismissal of the Chapter 11 case. Occurrence of any of the
foregoing will constitute the "Expiration Date."
A continued hearing on the matter is set for September 13 at 2
p.m.
A copy of the order is available at https://urlcurt.com/u?l=5G5B9a
from PacerMonitor.com.
About Franklin Southern Manufacturing, LLC
Franklin Southern Manufacturing, LLC sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No.
23-00938) on April 27, 2023. In the petition signed by Billy
Sermons, president and CEO, the Debtor disclosed $473,665 in total
assets and $6,325,214 in total liabilities.
Judge Jacob A. Brown oversees the case.
Bryan K. Mickler, Esq., at the Law Offices of Mickler and Mickler,
LLP, represents the Debtor as legal counsel.
FREE SPEECH: Chapter 11 Judge Sets 3-Hour Early Win Bid Hearing
---------------------------------------------------------------
Vince Sullivan of Law360 reports that families of the 2012 Sandy
Hook school shooting who are seeking an early win in their bid to
prevent the discharge of $1.5 billion in defamation damage awards
against right-wing radio conspiracy theorist Alex Jones will need
to recalibrate their intended arguments, after a Texas bankruptcy
judge on Monday, August 7, 2023, imposed stricter time limits on
the parties' presentations the following week.
About Free Speech Systems
Free Speech Systems LLC is a broadcast media production and
distribution company that provides broadcasting aural programs by
radio to the public. Free Speech Systems is a family-run business
founded by Alex Jones.
FSS is presently engaged in the business of producing and
syndicating Jones' radio and video talk shows and selling products
targeted to Jones' loyal fan base via the Internet. Today, FSS
produces Alex Jones' syndicated news/talk show (The Alex Jones
Show) from Austin, Texas, which airs via the Genesis Communications
Network on over 100 radio stations across the United States and via
the internet through websites including Infowars.com.
Due to the content of Alex Jones' shows, Jones and FSS have faced
an all-out ban of Infowars from mainstream online spaces. Shunning
from financial institutions and banning Jones and FSS from major
tech companies began in 2018.
Conspiracy theorist Alex Jones has been sued by victims' family
members over Jones' lies that the 2012 Sandy Hook Elementary School
shooting was a hoax.
Jones' InfoW LLC and affiliates, IWHealth, LLC and Prison Planet
TV, LLC, filed petitions under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. S.D. Texas Lead Case No. 22-60020) on April
18, 2022.
The Debtors agreed to the dismissal of the Chapter 11 cases in June
2022 after the Sandy Hook victim families dismissed the three
bankrupt companies from their lawsuits.
Free Speech Systems filed a voluntary petition for relief under
Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex.
Case No. 22-60043) on July 29, 2022. In the petition filed by W.
Marc Schwartz, as chief restructuring officer, the Debtor reported
assets and liabilities between $50 million and $100 million.
Melissa A Haselden has been appointed as Subchapter V trustee.
Alexander E. Jones filed for personal bankruptcy under Chapter 11
of the Bankruptcy Code (Bankr. S.D. Tex. Case No. 22-60043) on Dec.
2, 2022, listing $1 million to $10 million in assets against
liabilities of $1 billion to $10 billion in liabilities.
Raymond William Battaglia, of Law Offices of Ray Battaglia, PLLC,
is FSS's counsel. Raymond W. Battaglia and Crowe & Dunlevy, P.C.,
led by Vickie L. Driver, Christina W. Stephenson, Shelby A. Jordan,
and Antonio Ortiz are representing Alex Jones.
GANNETT PEAK: Thomas Kapusta Named Subchapter V Trustee
-------------------------------------------------------
The Acting U.S. Trustee for Region 12 appointed Thomas Kapusta as
Subchapter V trustee for Gannett Peak, LLC.
Mr. Kapusta will be paid an hourly fee of $275 for his services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. Kapusta declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Thomas J. Kapusta
P.O. Box 90624
Sioux Falls, SD 57109
Email: tkapusta@aol.com
About Gannett Peak
Gannett Peak, LLC filed a petition under Chapter 11, Subchapter V
of the Bankruptcy Code (Bankr. D.N.D. Case No. 23-30248) on July
29, 2023, with as much as $1 million in both assets and
liabilities.
Judge Shon Hastings oversees the case.
Maurice B. VerStandig, Esq., at The Dakota Bankruptcy Firm serves
as the Debtor's counsel.
GARDNER AGENCY: Taps General Insurance Brokerage as Broker
----------------------------------------------------------
Gardner Agency of Texas, LLC seeks approval from the U.S.
Bankruptcy Court for the Southern District of Texas to employ
General Insurance Brokerage, LLC as its business broker.
As an exclusive broker, General Insurance Brokerage will assist the
Debtor in selling its Agency as a going concern to allow the Debtor
to ensure the agency is properly marketed.
The proposed compensation is 6 percent commission from the proceeds
of the sale.
As disclosed in the court filings, General Insurance Brokerage does
not hold or represent any interest adverse to the Debtor or the
estate.
The firm can be reached through:
Marc Greene
General Insurance Brokerage, LLC
6353 Mighty Eagle Way, 1st Floor
Sarasota, FL 34241
Tel: 941-870-3388
About Gardner Agency of Texas
Gardner Agency of Texas, LLC, an insurance agency in Woodlands,
Texas, sought protection under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. S.D. Texas Case No. 23-30883) on March 13, 2023. In
the petition signed by its managing member, Steven C. Gardner, the
Debtor disclosed $10,643 in assets and $1,909,966 in liabilities.
Judge Jeffrey P. Norman oversees the case.
Dean W. Greer, Esq., at West & West Attorneys at Law, P.C.,
represents the Debtor as legal counsel.
GENEVER HOLDINGS:Trustee Taps Bohonnon Law Firm as Special Counsel
------------------------------------------------------------------
Luc Despins, the trustee appointed in the Chapter 11 cases of
Genever Holdings LLC and its affiliates, seeks approval from the
U.S. Bankruptcy Court for the District of Connecticut to employ The
Bohonnon Law Firm, LLC as its special maritime closing counsel.
The firm will render these services:
a) review of the PSA;
b) review and preparation of responses to the Buyer's due
diligence requests;
c) review and provide comments on the Buyer's closing
documentation and prepare closing documentation for the Trustee;
and
d) prepare for and attendance at the closing of the sale of
the Lady May.
Bohonnon will render legal services to the Trustee at its usual and
customary hourly rate, ranging from $595 - $650 per hour.
David Bohonnon, a principal of the Bohonnon Law Firm, assured the
court the 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:
David Bohonnon, Esq.
Bohonnon Law Firm, LLC
15 Merrill Road
Clinton, CT 06413
Phone: (203)787-2151
Fax: (203)773-1427
About Genever Holdings
Genever Holdings LLC, Ho Wan Kwok, and its affiliates filed a
voluntary petition for relief under Chapter 11 of the Bankruptcy
Code (Bankr. D. Conn. Case No. 22-50073) on Feb. 15, 2022.
Judge Julie A. Manning oversees the cases.
The Debtors tapped Neubert Pepe & Monteith, PC as legal counsel and
Saxe Doernberger & Vita, PC as special insurance coverage counsel.
On July 8, 2022, Luc A. Despins was appointed as trustee in this
Chapter 11 case. Epiq Corporate Restructuring, LLC is the trustee's
claims and noticing agent.
GGG INVESTMENTS: Court OKs Cash Collateral Access Thru Aug 14
-------------------------------------------------------------
GGG Investments, Inc. sought and obtained entry of an order from
the U.S. Bankruptcy Court for the District of Puerto Rico
authorizing the use cash collateral on an interim basis, through
August 14, 2023.
Banco Popular de Puerto Rico assert an interest in the Debtor's
cash collateral pursuant to certain UCC filings. The Debtor owes
$173,000 to BPPR.
As adequate protection, BPPR will be granted a monthly payment of
$1,015, which is based on the original contractual terms over the
value of the collateral as detailed in the Budget.
To the extent there is a diminution in the value of the Secured
Creditor's interests in the Prepetition Collateral, the Secured
Creditor will be granted replacement liens in post petition
receivables, which Replacement Liens are valid, binding,
enforceable and fully perfected as of the Petition Date without the
necessity of the execution, filing or recording by the Debtor or
the Secured Creditor of security agreements, pledge agreements,
financing statements, or other agreements, and will be equivalent
to a lien granted under 11 U.S.C. Section 364(c), and which such
Replacement Liens will cover assets, interest, and proceeds of the
Debtor that are or would be collateral under the pre-petition liens
if not for 11 U.S.C. Section 552(a), and all cash and cash
equivalents.
The Secured Creditor will also be granted an allowed administrative
claim with respect to all Adequate Protection obligations, to the
extent that the Replacement Liens do not adequately protect the
diminution in the value of the Secured Creditor's interests in the
Collateral from the Petition Date.
A hearing on the matter is set for August 17 at 10 a.m.
A copy of the motion is available at https://urlcurt.com/u?l=SU1tmC
from PacerMonitor.com.
A copy of the order is available at https://urlcurt.com/u?l=H7CjDP
from PacerMonitor.com.
About GGG Investments, Inc.
GGG Investments, Inc. sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. D. P.R. Case No. 23-02407-11) on
August 4, 2023.
In the petition signed by William Rodriguez Garcia, president, the
Debtor disclosed up to $100 million in assets and up to $500
million in liabilities.
Judge Maria De Los Angeles Gonzalez oversees the case.
Alexis Fuentes-Hernandez, Esq., at Fuentes Law Offices, LLC,
represents the Debtor as legal counsel.
GULF COAST TRANS: Court OKs Cash Collateral Access Thru August 17
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida, Tampa
Division, has authorized Gulf Coast Transportation, Inc. to
continue using cash collateral on an interim basis in accordance
with the budget, with a 10% variance until August 17, 2023.
The Court will hold another hearing on the Debtor's continued
access that day.
The Debtor's primary secured creditor is the U.S. Small Business
Administration in the amount of $500,000 for an Economic Injury
Disaster Loan.
The Lender filed a UCC financing statement asserting a security
interest in, among other things, all accounts receivable.
As adequate protection, the SBA is granted a replacement lien to
the same extent, validity, and priority as existed on the Petition
Date.
The Debtor is entitled to collect money from parties with
outstanding accounts receivable to the Debtor and no creditor or
party in interest will interfere with the Debtor's collection
actions.
The Debtor will maintain insurance coverage for the collateral in
accordance with the obligations under the loan and security
documents.
A copy of the Court's order and the Debtor's budget is available at
https://urlcurt.com/u?l=Cofr3F from PacerMonitor.com.
The Debtor projects total operating expenses of $13,101 for the
week ending August 18, 2023.
About Gulf Coast Transportation, Inc.
Gulf Coast Transportation, Inc. sought protection under Chapter 11
of the U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No. 23-00872) on
March 8, 2023. In the petition signed by Justin Morgaman, vice
president, the Debtor disclosed up to $1 million in both assets and
liabilities.
Judge Roberta A. Colton oversees the case.
Edward J. Peterson, Esq., at Johnson, Pope, Bokor Ruppel & Burns,
LLP, represents the Debtor as legal counsel.
HERTZ CLEVELAND: Auction for Cleveland Property Owner on Sept. 29
-----------------------------------------------------------------
Secured party PFP Holding Company VI LLC will hold a public auction
on Sept. 29, 2023, at 10:00 a.m. (prevailing Eastern Time) to the
highest qualified bidder 100% of the membership interests in Hertz
Cleveland 600 Superior LLC, which is the owner of real property and
personal property, including the property located at 600 Superior
Avenue, Cleveland, Ohio 44114.
Interested parties who would like additional information concerning
the items to be sold at the sale and the terms and conditions of
the sale, including the eligibility requirements to be a qualified
bidder, should contact Jonathan P. Cuticelli at 203-561-8737 or
Jcuticelli@hilcoglobak.com.
The membership interests are being offered as a single lot on an
"as-is, where-is" basis, with no express or implied warranties,
representations, statements or conditions or any kind made by the
secured party or any person acting for or on behalf of the secured
party, without any recourse whatsoever to the secured party or any
other person acting for or on behalf of the secured party.
HOLIDAY ERIN: Craig Geno Named Subchapter V Trustee
---------------------------------------------------
The Acting U.S. Trustee for Region 8 appointed Craig Geno, Esq., a
practicing attorney in Ridgeland, Miss., as Subchapter V trustee
for Holiday Erin, LLC.
Mr. Geno will be paid an hourly fee of $250 for his services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. Geno declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Craig M. Geno, Esq.
587 Highland Colony Parkway
Ridgeland, MS 39157
Phone: (601) 427-0048
Email: cmgeno@cmgenolaw.com
About Holiday Erin
Holiday Erin, LLC filed a petition under Chapter 11, Subchapter V
of the Bankruptcy Code (Bankr. W.D. Tenn. Case No. 23-23685) on
July 28, 2023, with as much as $50,000 in assets and $100,001 to
$500,000 in liabilities. Judge M. Ruthie Hagan oversees the case.
Toni Campbell Parker, Esq., at the Law Firm of Toni Campbell Parker
represents the Debtor as legal counsel.
HUGHES SATELLITE: S&P Places 'BB' ICR on Watch Negative
-------------------------------------------------------
S&P Global Ratings placed all of its ratings on Hughes Satellite
Systems Corp., including its 'BB' issuer credit rating, on
CreditWatch with negative implications.
The CreditWatch placement reflects the likelihood that S&P will
downgrade the company by multiple notches to 'CCC+' upon the
completion of the transaction.
Hughes Satellite Systems Corp. announced it plans to merge with
Dish Network Corp. in an all-stock transaction.
S&P said, "Hughes will become a wholly owned subsidiary of Dish
Network. Following the transaction, we believe Dish will likely
funnel Hughes' balance sheet cash and future cash flows to limit
its cash burn. We anticipate the combined entity's credit metrics
will also be materially worse than Hughes' metrics on a stand-alone
basis, with leverage of about 10x. Additionally, despite Hughes'
annual free cash flow generation of $250 million-$300 million, we
would still expect the combined entity to generate negative cash
flow.
"We would not view Hughes as an insulated subsidiary. Because we
believe Dish intends to use the company's balance sheet cash and
operational cash flows to partially offset its cash burn, we do not
anticipate its financial performance or funding will be highly
independent from the rest of the group. Therefore, Hughes does not
qualify as an insulated entity.
"We expect to resolve the CreditWatch at the close of the
transaction. At that time, we will likely downgrade Hughes by
multiple notches because we will cap our rating at the same level
as our rating on the combined entity. We expect our 'CCC+' issuer
credit rating on Dish will remain unchanged following the
transaction."
INSTANT BRANDS: Gets $30 Million Fresh Chapter 11 Financing
-----------------------------------------------------------
Amelia Pollard of Bloomberg Law reports that Instant Brands, maker
of the Instant Pot pressure cooker and Pyrex glassware, received
court approval on Tuesday, August 8, 2023, to borrow an additional
$30 million to fund itself through bankruptcy.
The company has been negotiating with vendors critical to the
production of its hallmark kitchen gadgets, and the talks made
clear that Instant Brands needed additional money, according to
company attorney Brian Resnick. The company has already spent
$132.5 million of bankruptcy financing secured at the start of its
Chapter 11 case, according to court papers.
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.
INTELIGLAS CORPORATION: Case Summary & 20 Top Unsecured Creditors
-----------------------------------------------------------------
Debtor: InteliGlas Corporation
540 El Dorado St Ste 201
Pasadena, CA 91101-2508
Business Description: InteliGlas is a secure AI cloud platform
that fully integrates all building systems,
provides sensory-capabilities, and puts all
the data into the artificial intelligence
system – inteliGlas AI.
Chapter 11 Petition Date: August 9, 2023
Court: United States Bankruptcy Court
District of Delaware
Case No.: 23-11124
Debtor's Counsel: Evan T. Miller, Esq.
BAYARD, P.A.
600 N King St Ste 400
Wilmington DE 19801-3779
Tel: (302) 429-4227
Email: EMiller@bayardlaw.com
Debtor's
Local
Delaware
Counsel: LAZARE POTTER GIACOVAS & MOYLE LLP
Total Assets as of August 7, 2023: $243,273
Total Liabilities as of August 7, 2023: $3,177,648
The petition was signed by R. Scott Martin as CEO.
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/IJ7NCDY/InteliGlas_Corporation__debke-23-11124__0001.0.pdf?mcid=tGE4TAMA
INVGRP3 LLC: Todd Hennings Named Subchapter V Trustee
-----------------------------------------------------
The U.S. Trustee for Region 21 appointed Todd Hennings, Esq., at
Macey, Wilensky & Hennings, LLP as Subchapter V trustee for INVGRP3
LLC.
Mr. Hennings will be paid an hourly fee of $450 for his services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. Hennings declared that he is a disinterested person according
to Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Todd E. Hennings, Esq.
Macey, Wilensky & Hennings, LLP
5500 Interstate North Parkway, Suite 435
Sandy Springs, GA 30328
Phone: (404) 584-1222
About INVGRP3 LLC
INVGRP3 LLC filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. N.D. Ga. Case No. 23-57355) on Aug. 1,
2023, with $100,001 to $500,000 in both assets and liabilities.
IYS VENTURES: Court OKs Cash Collateral Access Thru Aug 31
----------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Illinois,
Eastern Division, granted IYS Ventures, LLC authority to use cash
collateral, on an interim basis through August 31, 2023.
As previously reported by the Troubled Company Reporter, the Debtor
seeks cash collateral access to fund the payment of rent and
gasoline and the various management companies which pay the
necessary expenses associated with the operation of its business.
These creditors may assert a security interest in and to the
Collateral: Byzfunder NY LLC, Fox Capital Group, Inc., Itria
Ventures, Samson Funding, and The Huntington National Bank.
Investigation into the priority and security of the Lien Claimants
is ongoing, however, the following represents the approximate claim
and basis for the secured liens:
a. Byzfunder may assert a security interest in the Collateral
pursuant to a Revenue Purchase Agreement and Security Agreement
dated October 25, 2022. Byzfunder's scheduled claim is in the
amount of $153,986.
b. Fox may assert a security interest in the Collateral
pursuant to a Future Receivables Sale and Purchase Agreement dated
November 23, 2022. Fox's scheduled claim is in the amount of
$444,005.
c. Itria asserts a security interest in the Collateral
pursuant to an agreement. Itria's scheduled claim is in the amount
of $1,492,109, which is disputed in part by the Debtor.
d. Samson may assert a security interest in the Collateral by
virtue of multiple Revenue Purchase Agreement and Security
Agreement dated, inter alia, April 8, 2022, November 21, 2022,
December 2, 2022, December 23, 2022, and March 2, 2023. Samson's
scheduled claim is in the amount of $4,091,514.
e. Huntington asserts a security interest in the Collateral by
virtue of an Order on Motion for Prejudgment Attachment dated March
16, 2023, in the case more commonly known as The Huntington
National Bank v. IYS Ventures, LLC, et al., Case No. 23- CV-01368
pending in the United States District Court for the Northern
District of Illinois.
The court ruled that as partial adequate protection to the Lien
Claimants and any other entity claiming a security interest in the
Collateral, for the use of collateral, which includes the Debtor's
equipment, fixtures, inventory, accounts, instruments, chattel
paper, general intangibles, now owned and hereafter acquired
together with all replacements, accessions, proceeds and products
and all proceeds of the Collateral, including cash and cash
equivalent pursuant to the terms of the interim Cash Collateral
Order, the Lien Claimants are granted and will have replacement
liens in and to the Collateral which will have the same validity,
perfection, and enforceability as the pre petition liens held by
the Lien Claimants without any further action by the Debtor or the
Lien Claimants and without executing or recording any financing
statements, security agreements, or other documents.
A copy of the order is available at https://urlcurt.com/u?l=pGrWnR
from PacerMonitor.com.
About IYS Ventures
IYS Ventures LLC leases, owns and operates gas stations located in
Illinois, Minnesota, Michigan, Indiana, Ohio, South Dakota,
Virginia, Wisconsin, and Louisiana.
The Debtor filed a petition for relief under Chapter 11 of the
Bankruptcy Code (Bankr. N.D. Ill. Case No. 23-06782) on May 23,
2023. In the petition filed by Muwafak Rizek, as manager and
member, the Debtor reported assets between $1 million and $10
million and liabilities between $10 million and $50 million.
Honorable Bankruptcy Judge David D. Cleary oversees the case.
The Debtor is represented by Gregory K Stern, Esq. at Gregory K.
Stern, P.C., represents the Debtor as legal counsel.
J.A.R. CONCRETE: Seeks Approval to Hire Ryan LLC as Tax Consultant
------------------------------------------------------------------
J.A.R. Concrete, Inc. seeks approval from the U.S. Bankruptcy Court
for the Western District of Texas to employ Ryan, LLC as its tax
consultant.
The firm will render these services:
a. assist the Debtor in developing and implementing strategies
to minimize its property tax liabilities;
b. determine fair and equitable taxable values for the
Debtor's property and pursue all legal and prudent methods to
defend fair and equitable taxable values;
c. prepare and file all required personal property
renditions;
d. represent the Debtor at all appeal hearings;
e. identify and timely pursue corrections of any assessor's
clerical and administrative errors;
f. respond to all inquiries and requests concerning property
tax matters;
g. provide annual property tax estimates to the Debtor's
property tax accruals purposes;
h. verify and approve annual tax statements and forward same
to the Debtor for timely payment; and
i. maintain productive and cooperative relationships with
taxing authorities.
Ryan will charge $300 for compliance and consulting services. The
Debtor agrees to a fee of 30 percent of tax dollars saved for
each tax year.
John R. Ferrell, a principal at Ryan, disclosed in court filings
that the firm is a "disinterested person" within the meaning of
Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
John R. Ferrell
Ryan, LLC
221 North Kansas Street, Suite 2101
El Paso, TX 79901
Telephone: (915) 542-0026
Facsimile: (972) 542-0027
Email: john.ferrell@ryan.com
About J.A.R. Concrete
J.A.R. Concrete, Inc., a company in El Paso, Texas, filed its
voluntary petition for Chapter 11 protection (Bankr. W.D. Texas
Case No. 23-30242) on March 14, 2023, with as much as $1 million to
$10 million in both assets and liabilities. Joe A. Rosales, Jr.,
president, director and shareholder of J.A.R. Concrete, signed the
petition.
Judge: H Christopher Mott oversees the case.
E.P. Bud Kirk, Esq., a practicing attorney in El Paso, Texas, and
Griffith Davison, P.C. serve as the Debtor's bankruptcy counsel and
special counsel, respectively.
JAB OF ROCKLAND: Seeks to Hire Kirby Aisner as Bankruptcy Counsel
-----------------------------------------------------------------
JAB of Rockland, Inc. seeks authority from the U.S. Bankruptcy
Court for the Southern District of New York to employ Kirby Aisner
& Curley, LLP as its legal counsel.
The firm will render these services:
(a) advise the Debtor with respect to its powers, duties, and
responsibilities in the continued management of its property and
affairs;
(b) negotiate with creditors of the Debtor and work out a plan
of reorganization and take the necessary legal steps to effectuate
such a plan;
(c) prepare legal papers;
(d) appear before the Bankruptcy Court to protect the interest
of the Debtor and to represent the Debtor in all matters pending
before the court;
(e) attend meetings and negotiate with representatives of
creditors and other parties in interest;
(f) advise the Debtor in connection with any potential
refinancing of secured debt, if necessary, and any potential sale
of its assets;
(g) represent the Debtor in connection with obtaining
post-petition financing, if necessary;
(h) take any necessary action to obtain approval of a
disclosure statement and confirmation of a plan of reorganization;
and
(i) perform all other legal services for the Debtor.
The hourly rates of the firm's counsel and staff are as follows:
Attorneys $425 to $525
Paraprofessionals $150
In addition, the firm will seek reimbursement for expenses
incurred.
KAC has not received any retainer payments in connection with its
representation of the Debtor in this Chapter 11 Case.
Julie Cvek Curley, Esq., an attorney at Kirby Aisner & Curley,
disclosed in a court filing that the firm is a "disinterested
person" as defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Julie Cvek Curley, Esq.
Kirby Aisner & Curley LLP
700 Post Road, Suite 237
Scarsdale, NY 10583
Phone: (914) 401-9503
Email: jcurley@kacllp.com
About JAB of Rockland
JAB of Rockland, Inc., which conducts business under the name
David's Bagels, is a retail bagel bakery and store located in New
City, New York.
JAB of Rockland filed a Chapter 11 bankruptcy petition (Bankr.
S.D.N.Y. Case No. 19-23153) on June 11, 2019, disclosing under $1
million in both assets and liabilities. Judge Robert D. Drain
oversees the case. The Debtor is represented by Elizabeth A. Haas,
Esq., PLLC.
JAFFAN INTERNATIONAL: Taps Joel M. Aresty as Substitute Counsel
---------------------------------------------------------------
Jaffan International, LLC filed an amended application seeking
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. The counsel requested
post-petition retainer be allowed on a monthly basis due to the
circumstances of the case, $2,500 now and the $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.
JETASAP LLC: L. Todd Budgen Named Subchapter V Trustee
------------------------------------------------------
The U.S. Trustee for Region 21 appointed L. Todd Budgen, Esq., as
Subchapter V trustee for JetASAP, LLC.
Mr. Budgen will be paid an hourly fee of $400 for his services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. Budgen declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
L. Todd Budgen, Esq.
P.O. Box 520546
Longwood, FL 32752
Telephone Number: (407) 232-9118
Email: Todd@C11Trustee.com
About JetASAP LLC
JetASAP, LLC acts as a conduit between a charter customer and a
certificated air carrier. It provides subscribers a full suite of
services to manage every step of the searching and sourcing
process. These tools include the JetRATE intelligent pricing tool
that offers flyers insight into expected market pricing for any
trip; the ability to submit trip requests to over 700 charter
operators and receive live bookable quotes commission free;
exclusive partner services at discounted rates such as Charter
Flight Support's aircraft coverage and support when a booked
aircraft becomes unavailable due to a mechanical; innovative search
tools such as the JetSEARCH operator directory; and live operator
availability, including empty legs and one way flight deals.
JetASAP filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. M.D. Fla. Case No. 23-03019) on July 27,
2023, with $29,093 in assets and $3,498,814 in liabilities. Lisa
Sayer, chief executive officer, signed the petition.
Judge Grace E. Robson oversees the case.
Jeffrey S. Ainsworth, Esq., at BransonLaw, PLLC represents the
Debtor as legal counsel.
LIGHT & WONDER: S&P Rates New $550MM Senior Unsecured Notes 'B+'
----------------------------------------------------------------
S&P Global Ratings assigned its 'B+' issue-level rating and '5'
recovery rating to Light & Wonder Inc.'s proposed $550 million
senior unsecured notes due 2031. The '5' recovery rating indicates
our expectations for modest (10%-30%; rounded estimate: 10%)
recovery for noteholders in the event of a payment default. The
proposed notes will be issued by borrower subsidiary Light & Wonder
International Inc. The company intends to use the proceeds and cash
on the balance sheet to redeem its $550 million unsecured notes due
2025 and fund transaction expenses. The proposed transaction is
leverage neutral, and S&P expects interest expense will be
slightly, but not meaningfully, lower.
The company also announced its agreement with SciPlay to acquire
the remaining minority equity interest for approximately $500
million using cash from its balance sheet. S&P said, "Since we
consolidate SciPlay's financials in calculating Light & Wonder's
credit metrics, the transaction will increase S&P Global
Ratings-adjusted net leverage by about 0.5x when it closes. As of
June 30, 2023, Light & Wonder's S&P Global Ratings-adjusted net
debt leverage was approximately 3.5x. Therefore, on a pro forma
basis incorporating the SciPlay acquisition, we estimate leverage
would be approximately 4.0x, which still represents sufficient
cushion to our 4.5x net leverage downgrade threshold." This
acquisition will meet the requirement in Light & Wonder's secured
debt agreement to use the net proceeds from the sports betting
asset sale for reinvestment in the business through an accretive
acquisition, growth capital expenditures, or debt repayment. After
the transaction closes, approximately $400 million of cash that has
accumulated on SciPlay's balance sheet (already consolidated) will
be fully available to Light & Wonder.
Issue Ratings--Recovery Analysis
Key analytical factors
-- S&P assigned its 'B+' issue-level rating and '5' recovery
rating to Light & Wonder's proposed $550 million senior unsecured
notes due 2031. The '5' recovery rating indicates its expectation
for modest (10%-30%; rounded estimate: 10%) recovery for
noteholders in a payment default.
-- S&P's issue-level rating on Light & Wonder's $750 million
revolving credit facility (RCF) and $2.2 billion term loan remains
'BB'. The recovery rating is '2', indicating its expectation for
substantial (70%-90%; rounded estimate: 75%) recovery for lenders
in the event of a payment default.
Simulated default assumptions
-- In S&P's simulated default, it contemplates a default occurring
in 2027 due to a prolonged economic downturn that reduces consumer
spending on gaming, decreases the company's installed base, extends
the gaming equipment replacement cycle, and significantly cuts
spending on new equipment.
-- S&P said, "We assume Light & Wonder will reorganize under a
distressed scenario, and we use a 6x multiple to value the company,
which is modestly lower than the average multiple we use for the
leisure industry. The lower multiple reflects the highly volatile
nature of the company's product sales (due to its reliance on new
casino openings and the strength or weakness of the replacement
cycle), the sensitivity of consumer discretionary spending in
casinos to economic conditions, and the revenue mix shift to
digital gaming, which we view as more volatile and highly
competitive."
-- S&P assumes the $750 million RCF is 85% drawn at the time of
default.
-- S&P said, "In our analysis, we assume Light & Wonder's domestic
operating subsidiaries, which are guarantors of the credit
facility, generate about 68% of its total EBITDA and that foreign
subsidiaries generate about 32%. As a result, we attributed 68%
($1.6 billion) of the net available recovery value to domestic
operating entities and 32% ($0.7 billion) to foreign operating
entities."
-- Under our analysis, the senior secured debtholders have a
priority claim against substantially all the available domestic
value ($1.7 billion) and a priority claim against 65% ($0.5
billion) of the foreign value ($0.8 billion), which represents the
value we have attributed to the foreign stock pledge.
-- Total value attributable to senior secured claims is $2.1
billion. S&P said, "We estimated total first-lien senior secured
claims of $2.8 billion at default, leaving a first-lien unsecured
deficiency claim of about $0.7 billion. The first-lien senior
credit facilities' unsecured deficiency claim and the senior
unsecured notes' claim (which we estimate at about $1.8 billion at
default) would constitute pari passu unsecured claims against the
remaining $0.3 billion of recovery value, which represents the
value we attribute to the 35% unpledged foreign equity."
Simplified waterfall
-- Emergence EBITDA: $415 million
-- EBITDA multiple: 6.0x
-- Gross recovery value: $2.5 billion
-- Net recovery value (after 5% administrative expenses): $2.4
billion
-- Valuation split (obligor/nonobligor): 68%/32%
-- Estimated secured debt claims at default: $2.8 billion
-- Total value available to secured debt: $2.1 billion
--Recovery expectations: 70%-90% (rounded estimate: 75%)
-- Estimated senior unsecured claims and pari passu secured
deficiency claims: $2.5 billion
-- Value available to unsecured claims: $0.3 billion
--Recovery expectations: 10%-30% (rounded estimate: 10%)
MATEO ENTERPRISE: Lisa Holder Named Subchapter V Trustee
--------------------------------------------------------
The U.S. Trustee for Region 17 appointed Lisa Holder, Esq., a
practicing attorney in Bakersfield, Calif., as Subchapter V trustee
for Mateo Enterprise, Inc. d/b/a El Milagro Market.
Ms. Holder will be paid an hourly fee of $300 for her services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Ms. Holder declared that she is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Lisa Holder, Esq.
3710 Earnhardt Drive
Bakersfield, CA 93306
Phone: (661) 205-2385
Email: lholder@lnhpc.com
About Mateo Enterprise
Mateo Enterprise, Inc., doing business as El Milagro Market, filed
a petition under Chapter 11, Subchapter V of the Bankruptcy Code
(Bankr. E.D. Calif. Case No. 23-11623) on July 28, 2023, with
$249,375 in assets and $2,857,056 in liabilities. Salvador Carrera,
chief executive officer, signed the petition.
Judge Jennifer E. Niemann oversees the case.
Leonard K. Welsh, Esq., at the Law Office of Leonard K. Welsh
represents the Debtor as legal counsel.
MAZEL ON DEL: Case Summary & Four Unsecured Creditors
-----------------------------------------------------
Debtor: Mazel On Del LLC
PO Box 225
Woodbourne, NY 12788-0225
Business Description: Mazel On Del is a Single Asset Real Estate
(as defined in 11 U.S.C. Section 101(51B)).
Chapter 11 Petition Date: August 9, 2023
Court: United States Bankruptcy Court
Southern District of New York
Case No.: 23-35658
Debtor's Counsel: Allen A Kolber, Esq.
ALLEN KOLBER
134 Route 59 Ste A
Suffern, NY 10901-4917
Tel: (845) 918-1277
Email: akolber@kolberlegal.com
Estimated Assets: $0 to $50,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Benjamin Friedman as managing member.
A full-text copy of the petition containing, among other items, a
list of the Debtor's four unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/MP2THHI/Mazel_On_Del_LLC__nysbke-23-35658__0001.0.pdf?mcid=tGE4TAMA
MEDIAMATH HOLDINGS: Sale Process, Aug. 18 Auction Okayed
--------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware approved
bidding procedures for the sale of substantially all assets of
MediaMath Holdings Inc. and its debtor-affiliates. Objections to
the sale, if any, must be filed no later than 10:00 a.m.
(prevailing Eastern Time) on Aug. 14, 2023.
The deadline to submit a qualified bid is on Aug. 14, 2023, at 4:00
p.m. (prevailing Eastern Time). An auction will take place on Aug.
18, 2023, at 10:00 a.m. (prevailing Eastern Time) followed by sale
hearing on Aug. 22, 2023, at 3:00 p.m. (prevailing Eastern Time).
The Debtors said they commenced these Chapter 11 Cases to maximize
the value of the Debtors’ estates for the benefit of all
stakeholders. The Debtors added that they determined, in
consultation with their advisors, that an expedited Sale process
under chapter 11 of the Bankruptcy Code is the best path forward to
consummate a value-maximizing sale of the Assets for the benefit of
all stakeholders under the circumstances. For the reasons set
forth herein, a marketing and Sale process under section 363 of the
Bankruptcy Code provides the Debtors with certain advantages that
were not available to the Debtors during the prepetition marketing
process. Furthermore, the Debtors believe that certain parties
identified during their prepetition marketing efforts as well as
new parties will have interest in pursuing an acquisition of the
Debtors or their assets either in whole or part.
The Debtor stated that they file the Motion to approve the proposed
Bidding Procedures while they work to identify a Stalking Horse
Bidder for the sale of the Assets. A Stalking Horse Bidder, if one
can be identified, permits the Debtors to secure a bid that will
serve as a floor for all other potential bids. The Bidding
Procedures proposed by this Motion ensure that the Debtors'
postpetition marketing and Sale process builds upon the prepetition
process in a fair, open manner that encourages bidders to submit
proposals in a manner that maximizes asset value.
The Debtors believe that a prompt sale of the Assets through a
competitive sale process represents the best option available to
maximize value for all stakeholders in these Chapter 11 Cases.
About MediaMath Holdings
MediaMath Holdings, Inc., develops and delivers digital advertising
media and data management technology solutions to advertisers. The
company is based in New York.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Del. Lead Case No. 23-10882) on June 30,
2023. In the petition signed by Neil Nguyen, chief executive
officer, the Debtor disclosed up to $500 million in both assets and
liabilities. As of the petition date, the Debtor had about $95
million of first lien funded debt.
Judge Laurie Selber Silverstein oversees the case.
The Debtor tapped Young Conaway Stargatt & Taylor, LLP as legal
counsel; FTI Consulting, Inc. as financial advisor; and Epiq
Corporate Restructuring, LLC as claims and noticing agent and
administrative advisor.
MEGNA REAL ESTATE: John-Patrick Fritz Named Subchapter V Trustee
----------------------------------------------------------------
The U.S. Trustee for Region 16 appointed John-Patrick Fritz as
Subchapter V trustee for Megna Real Estate Management, Inc.
Mr. Fritz will be paid an hourly fee of $650 for his services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred. The compensation for his trustee administrators
(Jason Klassi, Linda Riess and Connie Ray) is $295 per hour.
Mr. Fritz declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
John-Patrick M. Fritz
2818 La Cienega Avenue
Los Angeles, CA 90034
About Megna Real Estate
Megna Real Estate Management, Inc. is a lessor of real estate. The
company is based in Northridge, Calif.
Megna Real Estate Management filed a petition under Chapter 11,
Subchapter V of the Bankruptcy Code (Bankr. C.D. Calif. Case No.
23-11061) on July 31, 2023, with $1 million to $10 million in
assets and liabilities. Judge Victoria S Kaufman oversees the
case.
Mark T. Young, Esq., at Donahoe Young & Williams, LLP is the
Debtor's counsel.
MESQUITE ENERGY: Junior Creditors Get $70% Ownership After Ch. 11
-----------------------------------------------------------------
Dietrich Knauth of Reuters reports that a U.S. bankruptcy judge has
awarded junior creditors a 70% ownership stake in the
post-bankruptcy oil producer Mesquite Energy, handing a defeat to
senior lenders who argued they should own the entire business.
Thursday's, August 3, 2023, ruling by U.S. Bankruptcy Judge Marvin
Isgur in Houston settles an ownership dispute that has lingered
since Mesquite's 2020 emergence from Chapter 11 by setting a $200
million value for litigation claims pursued by junior creditors and
awarding them a majority of the company's equity and a seat on its
board.
"We are very grateful for the court's thorough and well reasoned
opinion and the work that the court has put in in administering the
bankruptcy estate," unsecured creditors' attorney Benjamin
Finestone of Quinn Emanuel Uquhart & Sullivan said on Friday.
The senior lenders, Fidelity and Apollo Global Management,
increased their stake in the business to 30% from 20% on account of
the loan they extended to Sanchez at the start of its bankruptcy.
Mesquite, then known as Sanchez Energy, filed for bankruptcy in
2019 with $2.3 billion in debt and emerged a year later through a
reorganization plan that gave its top lenders 20% of the
reorganized equity and set aside the rest for senior and junior
creditors to fight over.
The unusual arrangement allowed the company to emerge from
bankruptcy without first resolving contentious disputes about the
validity of the secured creditors' pre-bankruptcy liens on valuable
oil and gas assets.
Mesquite's exit from Chapter 11 allowed it to avoid expensive
bankruptcy fees and preserve its limited funds at a time when the
COVID pandemic was causing oil and gas prices to plummet.
The secured lenders, Fidelity and Apollo, had argued that the loans
they extended to Sanchez before and during its bankruptcy meant
that they should own the post-bankruptcy company.
Isgur, the judge, disagreed, finding that errors in documenting the
loans' collateral meant some of Sanchez Energy's most valuable
property was not included in the lenders' collateral and could be
distributed to other creditors. The disputed liens covered three
oil and gas leases that span 110,000 acres, according to court
documents.
Isgur said the lenders' attempts to correct the lien documents came
too late to stave off the inter-creditor litigation.
The corrections could be reversed because they were made 46 days
before Sanchez's bankruptcy filing, well within a 90-day window in
which a bankrupt company can reverse property transfers that
benefit one creditor at others' expense, Judge Isgur ruled.
For the senior creditors: Bruce Bennett of Jones Day; Dennis
Jenkins and Brett Miller of Willkie Farr & Gallagher.
For the unsecured noteholders: Benjamin Finestone, Kate Scherling,
Patricia Tomasco, Christopher Porter, Devin van der Hahn, K. John
Shaffer and Matthew Scheck of Quinn Emanuel
About Mesquite Energy
Mesquite Energy, formerly Sanchez Energy Corporation and its
affiliates, -- https://sanchezenergycorp.com/ -- are independent
exploration and production companies focused on the acquisition and
development of U.S. onshore oil and natural gas resources. Sanchez
Energy is currently focused on the development of significant
resource potential from the Eagle Ford Shale in South Texas, and
holds other producing properties and undeveloped acreage, including
in the Tuscaloosa Marine Shale (TMS) in Mississippi and Louisiana.
As of Dec. 31, 2018, the companies had approximately 325,000 net
acres of oil and natural gas properties with proved reserves of
approximately 380 million barrels of oil equivalent and interests
in approximately 2,400 gross producing wells.
Sanchez Energy and 10 affiliates sought protection under Chapter 11
of the Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 19-34508) on
Aug. 11, 2019. As of June 30, 2019, the companies disclosed
$2,159,915,332 in assets and $2,854,673,930 in liabilities. The
cases were assigned to Judge Marvin Isgur.
Sanchez tapped Akin Gump Strauss Hauer & Feld LLP and Jackson
Walker L.L.P. as
bankruptcy counsel; Moelis & Company LLC as financial advisor;
Alvarez & Marsal North America LLC as restructuring advisor; and
Prime Clerk LLC as notice and claims agent. The Official Committee
of Unsecured Creditors tapped Milbank LLP and Locke Lord LLP as its
co-counsel.
Sanchez Energy emerged from Chapter 11 bankruptcy protection with a
new name: Mesquite Energy Inc., according to a June 30, 2020 press
release. The company's financial restructuring eliminated
substantially all of its $2.3 billion in debt.
MOUNTAIN EXPRESS: Mediation Ordered in Chapter 11 Mess
------------------------------------------------------
Emily Lever of Law360 reports that a Texas bankruptcy judge sent
bankrupt oil company Mountain Express Oil Co. and its
debtor-in-possession lenders to mediation, calling the case a
"mess" after its sale process failed.
Judge David R. Jones ordered the parties o mediate all issues
discussed on the record during a hearing on Aug. 7, 2023.
According to the order, U.S. Bankruptcy Judge Marvin Isgur is
appointed as a mediator. At all times in the performance of his
mediation duties, Judge Isgur will be acting in his official
capacity as a United States Bankruptcy Judge, with all of the
privileges and immunities of a United States Bankruptcy Judge.
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 and Akerman,
LLP as special counsels. 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.
NEW HAVEN TRUCK: Taps Balletto Shariff & Associates as Accountant
-----------------------------------------------------------------
New Haven Truck and Auto Body, Inc. seeks approval from the U.S.
Bankruptcy Court for the District of Connecticut to hire Balletto,
Shariff & Associates, LLC as its accountant.
Balletto will prepare all state and federal tax returns, quarterly
returns, operating reports, and financial statements. The firm will
also review and calculate any amounts claimed owed by the Debtor to
the Internal Revenue Service of the State of Connecticut Department
of Revenue Services.
The firm will be paid at these hourly rates:
Dominic F. Balletto, Jr. $250
Associates $250
Bookkeeper Assistants $100
As disclosed in the court filings, Balletto, Shariff & Associates
represents no interest adverse to the Debtor or the estate and in a
disinterested party as defined in 11 U.S.C. 101(14).
The firm can be reached through:
Dominic F. Balletto, Jr.
Balletto, Shariff & Associates, LLC
65 High St 1st Floor
East Haven, CT 06512
Phone: +1 203-782-1040
About New Haven Truck and Auto Body
New Haven Truck and Auto Body, Inc. is a complete vehicle collision
and body repair shop in East Haven, Conn.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Conn. Case No. 23-30298) on April 28,
2023, with up to $10 million in both assets and liabilities.
William S. Snow, Jr., president of New Haven Truck, signed the
petition.
Judge Ann M. Nevins oversees the case.
Stuart H. Caplan, Esq., at the Law Offices of Neil Crane, LLC,
represents the Debtor as legal counsel.
NOBLE HEALTH II: Seeks to Hire Integra Realty as Appraiser
----------------------------------------------------------
Noble Health Real Estate II LLC seeks approval from the U.S.
Bankruptcy Court for the Western District of Missouri to employ
Victor D. Cremeens, MAI, principal owner of Integra Realty
Resources, Inc. -- Healthcare & Senior Housing to appraise its real
estate holdings.
Mr. Cremeens will bill $7,500 for his appraisal.
As disclosed in the court filings, neither Mr. Cremeens, nor
Integra Realty Resources, Inc. -– Healthcare & Senior Housing
holds or represents any interest adverse to the captioned estate,
and they are disinterested persons as that terin is used pursuant
to Code Secs. 101 (14) and 327.
The firm can be reached through:
Victor D. Cremeens, MAI
Integra Realty Resources, Inc.
Healthcare & Senior Housing
16759 Main Street, Suite 209
St. Louis, MO 63040
Phone: (636) 527-0541
About Noble Health Real Estate II
Noble Health Real Estate II, LLC is engaged in activities related
to real estate. The Debtor is based in Fulton, Mo.
Noble Health Real Estate II filed its voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Mo. Case No.
23-20100) on March 3, 2023. In the petition signed by Zev M.
Reisman, general manager and corporate secretary, the Debtor
disclosed up to $50,000 in assets and up to $50 million in
liabilities.
Judge Dennis R. Dow presides over the case.
The Debtor tapped Berman, DeLeve, Kuchan & Chapman, LLC as
bankruptcy counsel and CFGI as restructuring advisor. Joseph Baum,
a partner at CFGI, serves as the Debtor's chief restructuring
officer.
NORTH VILLAGE SNOW: William Avellone Named Subchapter V Trustee
---------------------------------------------------------------
The U.S. Trustee for Region 11 appointed William Avellone of
Chartered Management as Subchapter V trustee for North Village Snow
Management Corp.
Mr. Avellone will be paid an hourly fee of $375 for his services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. Avellone declared that he is a disinterested person according
to Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
William B. Avellone
10 South Riverside Plaza, Suite 875
Chicago, IL 60606
Tel. (312) 273-4004
Email: bill.avellone@charteredmgt.com
About North Village Snow Management
North Village Snow Management Corp. offers basement waterproofing
services and snow management services for commercial and
residential customers. The company is based in Elk Grove Village,
Ill.
North Village Snow Management filed a petition under Chapter 11,
Subchapter V of the Bankruptcy Code (Bankr. N.D. Ill. Case No.
23-09789) on July 27, 2023, with $500,001 to $1 million in assets
and $1 million to $10 million in liabilities. Judge Janet S. Baer
oversees the case.
David K. Welch, Esq., at Burke, Warren, Mackay & Serritella, P.C.,
represents the Debtor as legal counsel.
NORTH VILLAGE: Court OKs Cash Collateral Access Thru Sept 15
------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Illinois
authorized North Village Snow Management Corp. d/b/a North Village
Group to use cash collateral on an interim basis in accordance
with the budget, with a 10% variance during the period July 27,
2023 through September 15, 2023.
In return for the Debtor's continued interim use of cash
collateral, the U.S. Small Business Administration is granted the
following adequate protection for its purported secured interests
in property of the Debtor:
1. The Debtor will permit the SBA to inspect, upon reasonable
notice, within reasonable hours, the Debtor's books and records;
2. The Debtor will maintain and pay premiums for insurance to
cover all of its assets from fire, theft, and water damage;
3. The Debtor will, upon reasonable request, make available
to the SBA evidence of that which constitutes its collateral or
proceeds;
4. The Debtor will properly maintain its assets in good
repair and properly manage its business; and
5. The SBA will be granted valid, perfected, enforceable
security interests in and to the Debtor's post-petition assets,
including all proceeds and products which are now or hereafter
become property of this estate, to the extent and priority of its
alleged pre-petition liens, if valid, but only to the extent of any
diminution in the value of such assets during the period from the
commencement of the Debtor's chapter 11 case through September 15,
2023.
A hearing on the matter is set for August 30 at 10 a.m.
A copy of the order is available at https://urlcurt.com/u?l=X3CW6I
from PacerMonitor.com.
About North Village Snow Management Corp.
North Village Snow Management Corp. offers basement waterproofing
services and snow management services for commercial and
residential customers.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Ill. Case No. 23-09789) on July 27,
2023.
Judge Janet S. Baer oversees the case.
David K. Welch, Esq., at Burke, Warren, Mackay & Serritella, P.C.,
represents the Debtor as legal counsel.
NS FOA: Seeks Approval to Hire Haley Ward as Engineer
-----------------------------------------------------
NS FOA LLC seeks approval from the U.S. Bankruptcy Court for the
Southern District of Florida to employ Brian Milisci and Haley
Ward, Inc. as its engineers.
The firm will develop and implement site plans necessary to cure
existing non-monetary defaults.
Mr. Milisci has agreed to accept compensation in the amount of
$5,000 for engineering work provided to the Debtor.
Brian Milisci, a land development director at Haley Ward, assured
the court that he and his firm are "disinterested persons" as such
term is defined in Bankruptcy Code Sec 101(14).
The firm can be reached through:
Brian Milisci
Haley Ward, Inc.
203 Anderson Street #2
Portland, ME 04101
Tel: 207-805-8786
Email: bmilisci@haleyward.com
About NS FOA
NS FOA LLC owns the largest covered shrimp farm in the United
States, supplying fresh-frozen shrimp year round. The Company
distributes products, including fresh-frozen ballyhoo (rigged and
unrigged), bonita strips and more.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Fla. Case No. 23-11183) on February
14, 2023. In the petition signed by Congwei "Allan" Xu as managing
member, the Debtor disclosed $1,180,942 in assets and $931,850 in
liabilities.
Judge Mindy A. Mora oversees the case.
The Debtor tapped Aaron A. Wernick, Esq., at Wernick Law, PLLC as
legal counsel and Helen Yin, CPA as accountant.
OPEN COURT SPORTS: Brendon Singh Named Subchapter V Trustee
-----------------------------------------------------------
The U.S. Trustee for Region 7 appointed Brendon Singh, Esq., at
Tran Singh, LLP, as Subchapter V trustee for Open Court Sports
Complex, LLC.
Mr. Singh will be paid an hourly fee of $500 for his services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. Singh declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Brendon Singh, Esq.
Tran Singh, LLP
2502 LA Branch Street
Houston, TX 77004
Phone: 832-975-7300
Fax: 832-975-7301
Email: bsingh@ts-llp.com
About Open Court Sports Complex
Open Court Sports Complex, LLC is an indoor basketball, volleyball,
pickleball, and floor sports facility in Katy, Texas.
The Debtor filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. S.D. Texas Case No. 23-32826) on July 28,
2023, with $8,281,574 in assets and $6,208,520 in liabilities.
Angela Smith-Duncan, manager, signed the petition.
Judge Jeffrey P. Norman oversees the case.
Kimberly A. Bartley, Esq., at Waldron & Schneider, LLP represents
the Debtor as legal counsel.
ORION TECHNOLOGIES: Court OKs Cash Collateral Access Thru Aug 16
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida
authorized Orion Technologies LLC to use cash collateral on an
interim basis in accordance with the budget, with a 10% variance,
pending a further hearing set for August 16, 2023 at 10 a.m.
The Debtor is authorized to provide adequate protection to Penta
Orion, LLC, Seth Ellis, and Phoenix Mecano, Inc. pursuant to the
terms and conditions of the Interim Order.
As adequate protection with respect to the Alleged Secured Parties'
alleged interests in the cash collateral, the Alleged Secured
Parties are granted a replacement lien in and upon all of the
categories and types of collateral in which they allegedly held a
security interest and lien as of the Petition Date to the same
extent, validity, and priority that they allegedly held as of the
Petition Date.
The Debtor will maintain insurance coverage for the Collateral.
A copy of the Court's order and the Debtor's budget is available at
https://urlcurt.com/u?l=XNqQd1 from PacerMonitor.com.
The Debtor projects $636,030 in total revenue and $563,211 in total
expenses for August 2023.
About Orion Technologies
Orion Technologies, LLC sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. M.D. Fla. Case No. 23-01867) on May 17,
2023, with $2,047,840 in assets and $20,342,885 in liabilities.
Judge Tiffany P. Geyer oversees the case.
James C. Moon, Esq., at Melano Budwick, P.A. is the Debtor's legal
counsel.
PARADOX RESOURCES: Taps CAMS Midstream Services as Consultant
-------------------------------------------------------------
Paradox Resources, LLC and its affiliates seek approval from the
U.S. Bankruptcy Court for the Southern District of Texas to employ
CAMS Midstream Services, LLC as their operational and asset
management consultant.
The services anticipated to be provided by CAMS include, but are
not limited to, obtaining operational background data and
information on the Lisbon Plant in order to develop a comprehensive
shutdown plan, including the required processes and procedures.
The hourly rates for CAMS's personnel are:
Colin Harper - Sr. Vice President $300
Ricky Lay - VP- Midstream $300
Brady Anderson - VP- Operations $250
Ben Vodila - VP Health & Safety $250
Derek Furstenwerth - VP Environmental $250
Jamie Kilpatrick - Dir. Engineering $225
Phil Anderson - Engineering $200
Brian Gafford - Engineering $200
TBD - H&S Associate $175
TBD - Environmental Associate $175
Yulia Furikova - Midstream Associate $125
Melinda Zoleta - Executive $100
Colin Harper, senior vice president at CAMS, assured the court that
he and his firm do not hold or represent an interest adverse to the
estate and that are "disinterested persons," as that term is
defined in section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Colin Harper
CAMS Midstream Services, LLC
910 Louisiana Street, Suite 2400
Houston, TX 77002
Phone: 713-358-9700
About Paradox Resources
Paradox Resources, LLC is a Houston-based integrated energy company
that now owns multiple producing oil and gas fields.
Paradox Resources sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Texsa Lead Case No. 23-90558) on May
22, 2023. In the petition signed by its chief executive officer,
Todd A. Brooks, the Debtor disclosed $50 million to $100 million in
both assets and liabilities.
Judge David R. Jones oversees the case.
The Debtor tapped Okin Adams Bartlett Curry, LLP as legal counsel;
Stout Risius Ross, LLC as restructuring advisor; and Evercore
Group, LLC as investment banker. Donlin, Recano & Co., Inc. is the
notice, claims and balloting agent.
PARAMETRIC SOLUTIONS: Files Emergency Bid to Use Cash Collateral
----------------------------------------------------------------
Parametric Solutions, Inc. asks the U.S. Bankruptcy Court for the
Southern District of Florida, West Palm Beach Division, for
authority to use cash collateral to fund their operations on an
ongoing basis in accordance with the budget, with a 10% variance.
The Debtor needs to be able to pay its regular business expenses,
as well as its administrative expenses as they become due, to
continue operating as a going concern, and to maintain compliance
with the guidelines of the Office of the U.S. Trustee.
Bank of America, N.A. may have a lien on the cash collateral of the
of the Debtor by virtue of several UCC-1 financing statements in
the Florida Secured Transaction Registry.
MUFG Union Bank, N.A. may have a lien on the cash collateral of the
Debtor by virtue of a UUC-1 filed on July 27, 2020 (Instrument No.
202003706087), as amended by a UCC Financing Statement Amendment
filed on February 25, 2022 (Instrument No. 202200625005); as
amended by a UCC Financing Statement Amendment filed on January 25,
2023 (Instrument No. 202300229542) in the Florida Secured
Transaction Registry. Pursuant to the MUFG Liens, MUFG has a
security interest in accounts and accounts receivable of the
Debtor.
As adequate protection, the Debtor will grant a replacement lien
to BANA and MUFG to the same extent as any pre-petition lien,
pursuant to 11 U.S.C. Section 361(2) on and in all property set
forth in the respective security agreements and related lien
documents on an interim basis through and including the interim
hearing in this matter, without any waiver by the Debtor as to the
extent, validity, or priority of said liens.
A copy of the motion is available at https://urlcurt.com/u?l=M28kW2
from PacerMonitor.com.
About Parametric Solutions, Inc.
Parametric Solutions, Inc. provides architectural, engineering, and
related services. The Debtor sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. S.D. Fla. Case No. 23-16141) on
August 3, 2023. In the petition signed by David Cusano, director,
the Debtor disclosed $6,147,086i in assets and $5,597,168 in
liabilities.
Judge Mindy A. Mora oversees the case.
Craig I. Kelley, Esq., at Kelley, Fulton and Kaplan, PL, represents
the Debtor as legal counsel.
PETRI ENTERPRISES: Thomas Kapusta Named Subchapter V Trustee
------------------------------------------------------------
The Acting U.S. Trustee for Region 12 appointed Thomas Kapusta as
Subchapter V trustee for Petri Enterprises, LLC.
Mr. Kapusta will be paid an hourly fee of $275 for his services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. Kapusta declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Thomas J. Kapusta
P.O. Box 90624
Sioux Falls, SD 57109
Email: tkapusta@aol.com
About Petri Enterprises
Petri Enterprises, LLC filed a petition under Chapter 11,
Subchapter V of the Bankruptcy Code (Bankr. D.N.D. Case No.
23-30247) on July 29, 2023, with as much as $50,000 in assets and
$100,001 to $500,000 in liabilities.
Judge Shon Hastings oversees the case.
Maurice VerStandig, Esq., at Dakota Bankruptcy Firm represents the
Debtor as legal counsel.
PGX HOLDINGS: $19MM New Money DIP Loan Wins Final OK
----------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized
PGX Holdings, Inc. and affiliates to use cash collateral and obtain
postpetition financing, on a final basis, pursuant to the terms and
conditions of the Interim Order, the Final Order and the
Superpriority Secured Debtor-in-Possession Financing Agreement, by
and among Progrexion Holdings, Inc., a Delaware corporation,
Credit.com, Inc., a Delaware corporation, eFolks Holdings, Inc., a
Delaware corporation, and Creditrepair.com Holdings, Inc., a
Delaware corporation, John C. Heath, Attorney At Law PC (d/b/a
Lexington Law) and the other guarantors party thereto, the lenders
party thereto from time to time, and Blue Torch Finance LLC, as
administrative agent.
The Debtors are permitted to receive senior secured postpetition
financing on a superpriority basis in the form of a senior secured,
superpriority multiple draw term loan facility. The DIP Lenders
agreed to extend $19.925 million in new money loans, consisting of,
subject to the DIP Loan Agreement:
(i) upon entry of the Interim Order, one or more draws in an
aggregate principal amount not exceeding $12 million; and
(ii) upon entry of the Final Order, additional draws in an
aggregate principal amount that will not, when combined with
amounts advanced prior to such date, exceed the remaining unfunded
New Money DIP Loans.
The DIP Loans also include the roll up of:
(i) subject to the entry of the Interim Order, the DIP
Lenders' ratable share of Prepetition First Lien Obligations in the
amount of $2.9 million equal to the Prepetition First Lien
Obligations advanced to the Loan Parties pursuant to the Collateral
Agent Advance Letter, dated as of May 31, 2023, by and among the
Prepetition First Lien Agent, Prepetition First Lien Lenders and
Loan Parties, which amounts represent emergency financing that was
necessary to allow the Debtors to operate prior to and transition
smoothly into Chapter 11; and
(ii) subject to entry of the Final Order, the DIP Lenders'
ratable share of Prepetition First Lien Obligations in the amount
of $39.850 million.
The Debtors are required to comply with these milestones:
a. No later than two business days after the Petition Date,
the Debtors will file an appropriate motion with the Court for the
sale of any of the Debtors' assets pursuant to 11 U.S.C. section
363, and the bid procedures that establishes a date that is no
later than 60 calendar days after the Petition Date as the deadline
for the submission of binding bids with respect to their assets;
b. No later than four business days after the Petition Date,
the Court will have entered the Interim Order;
c. No later than 61 calendar days after the Petition Date, the
Court will have entered the Final Order, subject to the
availability of the Court to conduct a Final Hearing on the DIP
Facility;
d. No later than 61 calendar days after the Petition Date, the
Court will have entered an order approving the Bid Procedures,
which order will be in form and substance acceptable to the DIP
Agent at the direction of the Required DIP Lenders;
e. No later than 72 calendar days after the Petition Date, the
Debtors will commence an auction for the Acquired Assets, in
accordance with the Bid Procedures Order; provided that if there is
no higher or better offer submitted in comparison to the stalking
horse bid(s), no auction will be held;
f. No later than 85 calendar days after the Petition Date, the
Court will have entered one or more sale order(s) approving each of
the winning bid(s) resulting from such sale(s); and
g. Consummation of the sale and transactions contemplated
thereby will occur no later than the date that is 105 calendar days
after the Petition Date.
Prior to the Petition Date and pursuant to the Prepetition
Financing Agreements, the Prepetition Secured Obligors were
indebted and liable to the Prepetition Secured Lenders (a) with
respect to the outstanding obligations under the Prepetition First
Lien Financing Agreement, for term loans in the aggregate principal
amount of $243.447 million, which amounts are inclusive of the
Emergency Bridge, and (b) with respect to the outstanding
obligations under the Prepetition Second Lien Financing Agreement,
for term loans in the aggregate principal amount of $179.986
million.
The Prepetition First Lien Agent and the Prepetition Second Lien
Agent entered into the Intercreditor Agreement, dated as of July
21, 2021, which governs certain rights, interests, obligations,
priorities and positions as between the Prepetition First Lien
Lenders and the Prepetition Second Lien Lenders with respect to the
assets and properties of the Debtors and the Prepetition Secured
Obligors.
The Debtors' borrowings under the DIP Facility will be used in a
manner consistent with the terms and conditions of the applicable
DIP Documents and the Final Order for:
(a) working capital and other general corporate purposes of
the Debtors solely in accordance with the Approved Budget, subject
to Permitted Variances;
(b) payment of amounts due under the DIP Facility, including
interest and fees payable thereunder, in accordance with the
Approved Budget, subject to Permitted Variances;
(c) payment of the costs of administering the Chapter 11
Cases;
(d) funding of a wind-down budget in form and substance
acceptable to the Required DIP Lenders in an amount not less than
$2.625 million, to be held in escrow by the DIP Agent and to be
released only upon the closing of the Sale Transaction, which will
automatically be increased on a dollar-for-dollar basis to the
extent, as of the date of the consummation of the Sale Transaction,
the Loan Parties have capital in excess of the amount set forth in
the then Approved Budget; provided, however, such that in no event
shall the wind-down budget exceed $3 million; and
(e) making any other payments consistent with the
then-applicable Approved Budget, subject to Permitted Variances.
As adequate protection, the Prepetition Secured Lenders are granted
a valid, binding, enforceable, non-avoidable and automatically and
properly perfected replacement security interest in and lien upon
all of the DIP Collateral.
The Prepetition Secured Lenders are also granted an allowed
superpriority administrative expense claim in each of the Chapter
11 Cases and any Successor Cases as provided for in 11 U.S.C
section 507(b).
A copy of the Final Order is available at
https://urlcurt.com/u?l=ctDPLY from PacerMonitor.com.
About PGX Holdings, Inc.
PGX Holdings, Inc. and affiliates are credit repair service
providers, helping customers repair their credit and achieve their
credit goals. PGX Holdings help consumers access and understand the
information contained in their credit reports, ensure that the
information contained in those reports is fair, accurate, and
complete, and address other factors that may negatively impact
their credit scores.
The Debtors sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Del. Lead Case No. 23-10718) on June 4,
2023. In the petition signed by Chad Wallace, chief executive
officer and president, the Debtor disclosed up to $500 million in
assets and up to $10 billion in liabilities.
Judge Craig T. Goldblatt oversees the case.
Kirkland and Ellis LLP, Kirkland and Ellis International LLP, and
300 North LaSalle represents the Debtor as bankruptcy counsel.
The Debtors also tapped Klehr Harrison Harvey Branzburg LLP as
local bankruptcy counsel, Alvarez & Marsal North America, LLC as
financial advisor, Greenhill and Co., LLC as investment banker,
Kurtzman Carson Consultants LLC as notice and claims agent, and
Landis Rath and Cobb as conflicts counsel.
King & Spalding, LLP, and Morris, Nichols, Arsht & Tunnell LLP,
serve as counsel to Blue Torch Finance LLC, as DIP Agent and
Prepetition First Lien Agent, and the Prepetition First Lien
Lenders. Clyde & Co US LLP, serves as special counsel to the DIP
Agent, the Prepetition First Lien Agent, and the Prepetition First
Lien Lenders.
Proskauer Rose LLP, is counsel to Prospect Capital Corporation, in
its capacity as DIP Lender and lender under the Prepetition First
Lien Credit Agreement. Morris, Nichols, Arsht & Tunnell LLP, is
local counsel to Prospect Capital.
PREMIER CONSTRUCTION: Andrew Levin Named Subchapter V Trustee
-------------------------------------------------------------
The U.S. Trustee for Region 16 appointed Andrew Levin of Fairpoint
Solutions, LLC as Subchapter V trustee for Premier Construction and
Investment.
Mr. Levin will be paid an hourly fee of $350 for his services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. Levin declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Andrew W. Levin
3946 Stone Canyon Ave., Ste. 1400
Sherman Oaks, CA 91403
Phone: (818) 817-6310
Email: andy@fairpointllc.com
About Premier Construction
Premier Construction and Investment filed a petition under Chapter
11, Subchapter V of the Bankruptcy Code (Bankr. C.D. Calif. Case
No. 23-14675) on July 25, 2023, with $500,001 to $1 million in both
assets and liabilities. Judge Sheri Bluebond oversees the case.
Ilbert A. Phillips, Esq., at the Law Offices of Ilbert Phillips
represents the Debtor as legal counsel.
PURDUE PHARMA: Victims Struggle With Settlement's High Bar
----------------------------------------------------------
Cici Yongshi Yu of Bloomberg Law reports that as part of OxyContin
manufacturer Purdue Pharmaceuticals' proposed bankruptcy
settlement, qualified individual victims or families can receive
payments ranging from approximately $3,500 to $48,000, based on
factors like length of opioid use, addiction, overdose, and death
caused by opioids.
But to get a share of the $750 million payment pool for
individuals, victims must show they were prescribed Purdue-branded
OxyContin.
According to the report, relatives of opioid overdose victims say
the stringent documentation requirements effectively lock them out
of making claims against Purdue, especially if their loved ones
died a number of years ago.
Some states require pharmacy records to be destroyed after a
certain period of time for privacy reasons. Relatives face even
more barriers in obtaining records of someone who died. Those who
acquired opioids illegally wouldn't generate any pharmacy paperwork
at all. And physicians are only required to hold medical records
for a certain number of years, varying by state.
Taylor Wall of Andrews & Thornton, an attorney representing opioid
victims in the Purdue bankruptcy, said Purdue's trust distribution
procedures are more complicated than those of Mallinckrodt
Pharmaceuticals, a generic drug company that filed for bankruptcy
in 2020, though they impose similar qualifications on proving the
use of a qualified opioid.
"The height of the opioid epidemic was at least somewhere between
2000 to 2010, depending on what state you may have lived in where
the opioid epidemic really rose, so that makes obtaining records
for a lot of individuals very difficult," Wall said.
A full-text copy of the Bloombergr report is available at
https://news.bloomberglaw.com/health-law-and-business/opioid-victims-struggle-with-purdue-pharma-settlements-high-bar
About Purdue Pharma LP
Purdue Pharma L.P. and its subsidiaries --
http://www.purduepharma.com/-- develop and provide prescription
medicines and consumer products that meet the evolving needs of
healthcare professionals, patients, consumers and caregivers.
Purdue's subsidiaries include Adlon Therapeutics L.P., focused on
treatment for Attention-Deficit/Hyperactivity Disorder (ADHD) and
related disorders; Avrio Health L.P., a consumer health products
company that champions an improved quality of life for people in
the United States through the reimagining of innovative product
solutions; Imbrium Therapeutics L.P., established to further
advance the emerging portfolio and develop the pipeline in the
areas of CNS, non-opioid pain medicines, and select oncology
through internal research, strategic collaborations and
partnerships; and Greenfield Bioventures L.P., an investment
vehicle focused on value-inflection in early stages of clinical
development.
Opioid makers in the U.S. are facing pressure from a crackdown on
the addictive drug in the wake of the opioid crisis and as state
attorneys general file lawsuits against manufacturers. More than
2,000 states, counties, municipalities and Native American
governments have sued Purdue Pharma and other pharmaceutical
companies for their role in the opioid crisis in the U.S., which
has contributed to the more than 700,000 drug overdose deaths in
the U.S. since 1999.
OxyContin, Purdue Pharma's most prominent pain medication, has been
the target of over 2,600 civil actions pending in various state and
federal courts and other fora across the United States and its
territories.
On Sept. 15 and 16, 2019, Purdue Pharma L.P. and 23 affiliated
debtors each filed a voluntary petition for relief under Chapter 11
of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No.
19-23649), after reaching terms of a preliminary agreement for
settling the massive opioid litigation. The Debtors' consolidated
balance sheet as of Aug. 31, 2019, showed $1.972 billion in assets
and $562 million in liabilities.
U.S. Bankruptcy Judge Robert Drain oversees the cases.
The Debtors tapped Davis Polk & Wardwell, LLP and Dechert, LLP, as
legal counsels; PJT Partners as investment banker; AlixPartners as
financial advisor; and Grant Thornton, LLP as tax structuring
consultant. Prime Clerk, LLC, is the claims agent.
Akin Gump Strauss Hauer & Feld LLP and Bayard, P.A., represent the
official committee of unsecured creditors appointed in the Debtors'
bankruptcy cases.
David M. Klauder, Esq., is the fee examiner appointed in the
Debtors' cases. The fee examiner is represented by Bielli &
Klauder, LLC.
* * *
U.S. Bankruptcy Judge Robert Drain in early September 2021 approved
a plan to turn Purdue into a new company (Knoa Pharma LLC) no
longer owned by members of the Sackler family, with its profits
going to fight the opioid epidemic. The Sackler family agreed to
pay $4.3 billion over nine years to the states and private
plaintiffs and in exchange for a lifetime legal immunity. The
deal
resolves some 3,000 lawsuits filed by state and local governments,
Native American tribes, unions, hospitals and others who claimed
the company's marketing of prescription opioids helped spark and
continue an overdose epidemic.
Separate appeals to approval of the Plan have already been filed by
the U.S. Bankruptcy Trustee, California, Connecticut, the District
of Columbia, Maryland, Rhode Island and Washington state, plus some
Canadian local governments and other Canadian entities.
In early March 2022, Purdue Pharma reached a nationwide settlement
over its role in the opioid crisis, with the Sackler family members
boosting their cash contribution to as much as $6 billion. The
settlement was hammered out with attorneys general from the eight
states -- California, Connecticut, Delaware, Maryland, Oregon,
Rhode Island, Vermont and Washington -- and D.C. who had opposed
the previous settlement.
REVOLVE CONSTRUCTION: Mark Dennis Named Subchapter V Trustee
------------------------------------------------------------
The U.S. Trustee for Region 11 appointed Mark Dennis, a certified
public accountant at SL Biggs, as Subchapter V trustee for Revolve
Construction, Inc.
Mr. Dennis will be paid an hourly fee of $400 for his services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. Dennis declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Mark D. Dennis, CPA
SL Biggs, A Division of SingerLewak, LLP
2000 S. Colorado Blvd., Tower 2, Ste. 200
Denver, CO 80222
Phone: 303-226-5471
Email: mdennis@slbiggs.com
About Revolve Construction
Revolve Construction, Inc. is part of the residential building
construction industry. Its services include: 3D rendering,
architectural design, architectural drawings, custom home,
energy-efficient homes, green building, log home construction, new
home construction, project management, sustainable design,
design-build.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Colo. Case No. 23-13369) on July 28,
2023, with $475,249 in total assets and $2,482,339 in total
liabilities. Jared Phifer, owner and president, signed the
petition.
Judge Michael E Romero oversees the case.
Keri L. Riley, Esq., at Kutner Brinen Dickey Riley, PC, represents
the Debtor as legal counsel.
RINGCENTRAL INC: S&P Assigns 'BB' ICR, Outlook Stable
-----------------------------------------------------
S&P Global Ratings assigned its 'BB' issuer credit rating to
U.S.-based provider of cloud-based unified communications and
contact center software, RingCentral Inc. and 'BB' issue-level
rating to its proposed $400 million guaranteed senior unsecured
notes; the company plans to use the net proceeds to refinance
existing debt.
S&P said, "The stable outlook reflects our expectation that
RingCentral will continue to expand its user base and increase its
contact center software penetration helped by its partnerships and
product innovation, such that revenue grows about 10% in 2023. We
also expect recent cost reductions to support an increase in EBITDA
margins to the high-teens percent area. As a result, we expect
leverage to decrease to the mid-3x area in 2023 with the prospect
for further deleveraging in 2024.
"We expect RingCentral's good market position, competitive cloud
offering and partner ecosystem to support continued above-market
revenue growth, albeit at lower than historical rates.
"We consider RingCentral to maintain a strong competitive offering
recognized by Gartner as one of the leading unified
communications-as-a-service (UCaaS) platforms especially in areas
like cloud telephony and reliability, and integrations into
customers' key workflow platforms like Salesforce and ServiceNow.
Nonetheless, we consider the UCaaS market to be quite fragmented
and we note the company competes with players like Microsoft and
Zoom with greater financial resources that may choose to invest
considerable funds to gain market share.
"The company's diverse and growing number of partners facilitates
its ability to reach large enterprise and international customers
looking to transition to a cloud solution and at potentially lower
customer acquisition costs. These include on-premises unified
communications providers, global telecoms service providers, and
value-added resellers. In addition to product innovation and
cross-selling an integrated contact center-as-a-service (CCaaS)
platform supported by NICE Systems, we believe the company has
sufficient vectors to maintain at least 10% revenue growth over the
next 12 months. This compares to a compound annual growth rate
(CAGR) of about 7% from 2021 to 2026 for the UCaaS market
forecasted by the International Data Corp.
"We expect cost and working capital efficiencies and operating
leverage gains to support strong EBITDA and FOCF growth, resulting
in rapid deleveraging in 2023.
"Following years of considerable investments in both its direct and
indirect sales motions to bolster revenue growth (CAGR of just
above 30% from 2013 to 2022), RingCentral has recently decided to
improve its profitability by reducing headcount, rationalizing
vendors, and taking other actions. In addition to operating
leverage gains, we expect this to drive an EBITDA margin expansion
to just below 20% in 2023 from about 12% in 2022, resulting in
leverage falling to the mid-3x area from almost 7x (including the
$200 million series A convertible preferred equity, which we treat
as debt). Furthermore, we expect EBITDA growth, as well as better
working capital management and an asset-light operating model, to
support an increase in FOCF to $270 million-$280 million in 2023
from about $125 million in 2022.
"Assuming the company can maintain this focus around cost and cash
flow efficiencies while still achieving above-market revenue
growth, we believe it may achieve further FOCF growth and a
leverage reduction to well below 3x in 2024. However, there could
be significant execution risks from this strategic pivot. We
believe that long-term deleveraging could also depend on how the
company chooses to invest a potentially growing cash balance to
bolster its competitive position and above-market revenue growth,
especially given the competitive nature of the UCaaS industry and
recent key senior management changes."
RingCentral's subscription revenues and low customer concentration
support good revenue visibility.
S&P said, "We believe the company's predominantly
subscription-based revenue model and low customer concentration
help provide good revenue visibility. However, we also note the
geographical concentration of revenues in North America (about 90%
of total revenues) and significant exposure to the small and
midsize business segment, which may generally mean more exposure to
domestic macroeconomic cycles than larger, more diversified
software peers.
"The stable outlook reflects our expectation that, despite ongoing
macroeconomic uncertainty lengthening sales cycles and reducing
upselling activity, RingCentral will continue to expand its UCaaS
user base and increase its CCaaS penetration, with support from
product innovation and its partnerships, such that revenues grow
about 10% in 2023. We also expect recent cost reductions and
operating-efficiency initiatives to support higher EBITDA margins
in the high-teens percent area. As a result, we expect leverage to
decrease to mid-3x in 2023 with the prospect for further
deleveraging in 2024 due to additional EBITDA margin expansion and
an expected conservative financial policy based around tuck-in
acquisitions and modest share repurchases."
S&P could lower its rating if:
-- Macroeconomic uncertainty, increased competition, or
operational missteps lead to a weakened market position or a
sustained revenue decline;
-- Execution errors around cost-reduction initiatives or outside
restructuring activity lead to EBITDA margins maintained well below
the high-teens percent area; or
-- S&P expects leverage to remain above 4x and FOCF to debt below
10% due to weaker-than-expected operating performance. This could
also be driven by the adoption of a more aggressive financial
policy around acquisitions or shareholder distributions.
S&P could raise its rating if:
-- The company can at least maintain its market position and
above-UCaaS market growth rates while achieving further cost
efficiencies and operating leverage gains. S&P would expect this to
support EBITDA margins maintained well above 20% and strong FOCF
generation; and
-- It continues to maintain a conservative financial policy that
does not prioritize large acquisitions and shareholder
distributions, resulting in leverage approaching mid-2x.
ROBS BAR: Jarrod Martin Named Subchapter V Trustee
--------------------------------------------------
The U.S. Trustee for Region 7 appointed Jarrod Martin, Esq., a
practicing attorney in Houston, as Subchapter V trustee for Robs
Bar & Grill, LLC.
Mr. Martin will be paid an hourly fee of $550 for his services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. Martin declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Jarrod B. Martin, Esq.
1200 Smith Street, Suite 1400
Houston, TX 77002
Phone: 713-356-1280
Email: JBM.Trustee@chamberlainlaw.com
About Robs Bar & Grill
Robs Bar & Grill, LLC filed a petition under Chapter 11, Subchapter
V of the Bankruptcy Code (Bankr. S.D. Texas Case No. 23-32814) on
July 28, 2023, with as much as $50,000 in assets and $100,001 to
$500,000 in liabilities. Judge Jeffrey P. Norman oversees the
case.
Robert Chamless Lane, Esq., at the Lane Law Firm represents the
Debtor as legal counsel.
ROCKPORT COMPANY: Committee Taps Cole Schotz as Legal Counsel
-------------------------------------------------------------
The official committee of unsecured creditors of The Rockport
Company, LLC and its affiliates seeks approval from the U.S.
Bankruptcy Court for the District of Delaware to employ Cole Schotz
P.C. as its counsel.
The firm will render these services:
a. providing legal advice with respect to the Committee's
powers, rights, duties, and obligations in the Chapter 11 Cases;
b. assisting and advising the Committee in its consultations
with the Debtors regarding the administration of the Chapter 11
Cases;
c. assisting the Committee in reviewing and negotiating terms
for unsecured creditors with respect to (i) the execution of a
debtor-in-possession financing facility and the use of cash
collateral, (ii) the sale of the Debtors' assets, including
negotiating bid procedures and proposed asset purchase agreements,
(iii) the confirmation of a chapter 11 plan of reorganization or
liquidation, and (iv) other requests for relief which would impact
unsecured creditors;
d. investigating the liens asserted by the Debtors' lenders
and any potential causes of action against the Debtors' lenders;
e. advising the Committee on the corporate aspects of the
Debtors' reorganization or liquidation and the plan(s) or other
means to effect reorganization or liquidation that may be proposed
in connection therewith, and participation in the formulation of
any such plan(s) or means of implementing reorganization or
liquidation, as necessary;
f. taking all necessary actions to protect and preserve the
estates of the Debtors for the benefit of creditors, including the
investigation of the acts, conduct, assets, liabilities, and
financial condition of the Debtors, the investigation of the prior
operation of the Debtors' businesses and the investigation and
prosecution of estate claims, causes of action, and any other
matters relevant to the Chapter 11 Cases;
g. preparing on behalf of the Committee all necessary motions,
applications, complaints, answers, orders, reports, papers and
other pleadings and filings in connection with the Committee's
duties in the Chapter 11 Cases;
h. advising and representing the Committee in hearings and
other judicial proceedings in connection with all necessary
motions, applications, objections and other pleadings, and
otherwise protecting the interests of those represented by the
Committee; and
i. performing all other necessary legal services as may be
required and authorized by the Committee that are in the best
interests of general unsecured creditors.
The firm will be paid at these rates:
Members $485 to $1200 per hour
Associates and Special Counsel $325 to $730 per hour
Law Clerks $325 to $350 per hour
Paralegals $245 to $410 per hour
Litigation Support Specialists $380 to $405 per hour
Seth Van Aalten, Esq., a partner at Cole Schotz, 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.
In accordance with Appendix B-Guidelines for reviewing fee
applications filed by attorneys in larger Chapter 11 cases, Cole
Schotz disclosed the following:
Question: Did you agree to any variations from, or alternatives
to, your standard or customary billing arrangements for this
engagement?
Response: No.
Question: Do any of the professionals included in this
engagement vary their rate based on the geographic location of the
bankruptcy case?
Response: No.
Question: If you represented the client in the 12 months
prepetition, disclose your billing rates and material financial
terms for the prepetition engagement, including any adjustments
during the 12 months prepetition. If your billing rates and
material financial terms have changed postpetition, explain the
difference and the reasons for the difference.
Response: Not applicable.
Question: Has your client approved your prospective budget and
staffing plan, and, if so for what budget period?
Response: Cole Schotz is in the process of formulating the
budget and staffing plan, which has not yet been approved by the
committee. The firm will provide a copy to the committee and seek
approval of the budget and staffing plan from the committee soon.
The firm can be reached at:
Seth Van Aalten, Esq.
Cole Schotz P.C.
1325 Avenue of the Americas, 19th Floor
New York, NY 10019
Tel: (212) 752-8000
Fax: (212) 752-8393
Email: svanaalten@coleschotz.com
About Rockport Co. LLC
The Rockport Company, LLC -- https://www.rockport.com/ -- offers a
collection of men's and women's brands that provide comfortable
shoes for every occasion. The company and its subsidiaries are
global designers, distributors and retailers of comfort footwear in
more than 50 markets worldwide.
Rockport Company and its affiliates first sought Chapter 11
bankruptcy protection (Bankr. D. Del. Lead Case No. 18-11145) on
May 14, 2018. The business was taken out of bankruptcy after the
court approved the sale of substantially all of Rockport Company's
assets to an affiliate of Charlesbank Equity Fund IX, LP.
Rockport Company and its affiliates again sought relief under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case
No. 23-10774) on June 15, 2023. In the petition filed by its chief
restructuring officer, Joseph Marchese, Rockport Company reported
$50 million to $100 million in both assets and liabilities.
In the new Chapter 11 cases, the Debtors tapped Potter Anderson &
Corroon, LLP as legal counsel; Miller Buckfire & Co., LLC as
financial advisor and investment banker; and PKF Clear Thinking as
personnel provider. Epiq Corporate Restructuring, LLC is the claims
and noticing agent and administrative advisor.
The U.S. Trustee for Region 3 appointed an official committee to
represent unsecured creditors in the Debtors' Chapter 11 cases. The
committee is represented by Cole Schotz, P.C.
ROCKPORT COMPANY: Committee Taps Province LLC as Financial Advisor
------------------------------------------------------------------
The official committee of unsecured creditors of The Rockport
Company, LLC and its affiliates seeks approval from the U.S.
Bankruptcy Court for the District of Delaware to employ Province,
LLC as its financial advisor.
Province will render these services:
(a) become familiar with and analyze the Debtors' financial
condition;
(b) review financial and operational information furnished by
the Debtors;
(c) monitor the sale process, review bidding procedures, stalk
horse bids, asset purchase agreements, interface with the Debtors'
professionals, and advise the committee regarding the process;
(d) scrutinize the economic terms of various agreements;
(e) assess the Debtors' various pleadings and proposed
treatment of unsecured creditor claims therefrom;
(f) prepare, or review as applicable, avoidance action and
claim analyses;
(g) assist the committee in reviewing the Debtors' financial
reports;
(h) advise the committee on the current state of these Chapter
11 cases;
(i) advise the committee in negotiations with the Debtors and
third parties as necessary;
(j) if necessary, participate as a witness in hearings before
the court with respect to matters upon which Province has provided
advice; and
(k) perform other activities as are approved by the committee,
its counsel, and as agreed to by Province.
The hourly rates of Province's professionals are as follows:
Managing Directors and Principals $860 - $1,350
Vice Presidents, Directors, and Senior Directors $580 - $950
Analysts, Associates, and Senior Associates $300 - $650
Paraprofessionals $220 - $300
In addition, Province will seek reimbursement for expenses
incurred.
Sanjuro Kietlinski, a principal at Province, 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:
Sanjuro Kietlinski
Province, LLC
2360 Corporate Circle, Suite 340
Henderson, NV 89074
Telephone: (702) 685-5555
Email: skietlinski@provincefirm.com
About Rockport Co. LLC
The Rockport Company, LLC -- https://www.rockport.com/ -- offers a
collection of men's and women's brands that provide comfortable
shoes for every occasion. The company and its subsidiaries are
global designers, distributors and retailers of comfort footwear in
more than 50 markets worldwide.
Rockport Company and its affiliates first sought Chapter 11
bankruptcy protection (Bankr. D. Del. Lead Case No. 18-11145) on
May 14, 2018. The business was taken out of bankruptcy after the
court approved the sale of substantially all of Rockport Company's
assets to an affiliate of Charlesbank Equity Fund IX, LP.
Rockport Company and its affiliates again sought relief under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case
No. 23-10774) on June 15, 2023. In the petition filed by its chief
restructuring officer, Joseph Marchese, Rockport Company reported
$50 million to $100 million in both assets and liabilities.
In the new Chapter 11 cases, the Debtors tapped Potter Anderson &
Corroon, LLP as legal counsel; Miller Buckfire & Co., LLC as
financial advisor and investment banker; and PKF Clear Thinking as
personnel provider. Epiq Corporate Restructuring, LLC is the claims
and noticing agent and administrative advisor.
The U.S. Trustee for Region 3 appointed an official committee to
represent unsecured creditors in the Debtors' Chapter 11 cases. The
committee is represented by Cole Schotz, P.C.
RUTHERFORD ENTERPRISES: Seeks Cash Collateral Access
----------------------------------------------------
Rutherford Enterprises 1, LLC d/b/a Marco's Pizza asks the U.S.
Bankruptcy Court for the Norther District of Florida, Tallahassee
Division, for authority to use cash collateral and provide adequate
protection.
Customers Bank is the holder of a loan the Debtor obtained in
accordance with a U. S. Small Business Administration program, and
claims an interest in the cash collateral pursuant to UCC-1
Financing Statement filed on September 28, 2020. Customers Bank has
a lien on all assets of the Debtor, including all accounts of the
Debtor.
Marco's Franchising, LLC may claim an interest in the cash
collateral pursuant to a UCC-1 Financing Statement filed on January
2, 2020, but the Debtor does not believe it is indebted to Marco's.
Mulligan Funding, LLC may claim an interest in the cash collateral
pursuant to a UCC-1 Financing Statement filed on June 6, 2023,
however, the Debtor has not yet been able to substantiate that
Mulligan Funding, LLC is the entity for which the UCC-1 has been
filed, nor would it have priority over Customers Bank.
The Debtor believes it owes Customers Bank approximately $450,000,
and that Customers Bank has the first position security interest
pursuant to the UCC-1 Financing Statement.
The general terms that the Debtor and Customers Bank have agreed to
in order to allow for the Debtor's use of the cash collateral are
as follows:
a. The Debtor will pay Customers Bank $3,000 per month prior to
confirmation. The payments are due on or before the 22nd of each
month prior to confirmation beginning in August 2023.
b. In the event the Debtor misses any required payment and fails to
cure such default within seven days after electronic notice to the
Debtor's counsel, then Customers Bank will immediately be entitled
to relief from the automatic stay.
c. Customers Bank will have appropriate replacement liens on the
cash collateral as outlined in the proposed order.
d. The Debtor will not cause any further liens or security
interests to attach to the cash collateral, unless otherwise
approved by Customers Bank.
A copy of the motion is available at https://urlcurt.com/u?l=OJnSDn
from PacerMonitor.com.
About Rutherford Enterprises 1, LLC
Rutherford Enterprises 1, LLC, a company in Tallahassee, Fla.,
filed a petition under Chapter 11, Subchapter V of the Bankruptcy
Code (Bankr. N.D. Fla. Case No. 23-40217) on June 16, 2023, with
$100,000 to $500,000 in assets and $1 million to $10 million in
liabilities. Charles M Rutherford, Sr., manager, signed the
petition.
Byron W. Wright III, Esq., at Bruner Wright, P.A. is the Debtor's
legal counsel.
SABRE GLBL: Moody's Assigns B3 Rating to New Senior Secured Notes
-----------------------------------------------------------------
Moody's Investors Service assigned a B3 rating to new Senior
Secured Notes, to be issued at Sabre Holdings Corporation's (Sabre
or the Company) wholly owned subsidiary Sabre GLBL Inc. Sabre's B3
Corporate Family Rating, B3-PD Probability of Default Rating, and
all instrument ratings are unaffected by the proposed transaction.
The stable outlook and SGL-2 speculative grade liquidity are
unchanged.
Assignments:
Issuer: Sabre GLBL Inc.
Backed Senior Secured Regular Bond/Debenture, Assigned B3
Sabre intends to exchange, on a par-for-par basis, most if not all
of the 2025 senior secured notes including the 7.375% and 9.25%
note obligations with principal outstanding amounts of $850 million
and $105 million, respectively. Moody's expects the terms and
conditions of the newly issued obligations to be materially the
same as for the existing instruments. To encourage participation,
the company will offer a premium of 5-7 basis points to discounted
trading prices plus up to $129 million in cash (from the balance
sheet) to incentivize participation and pay transaction fees and
expenses. If all of the notes are exchanged, only $333 million in
maturities will remain outstanding in 2025, with the remaining debt
obligations due in and after 2027.The transaction will improve the
debt maturity profile and increase the company's financial
flexibility, will be essentially leverage-neutral, and will not
materially increase interest expense or change the proportional mix
or priority of claims in the capital structure.
RATINGS RATIONALE
Sabre's B3 CFR reflects an extraordinarily long period of weak
revenue and profitability relative to pre-pandemic levels, with
revenues near 70% of 2019 levels. As a result of the pandemic, the
Company continues to face a range of significant challenges,
including some that could be more permanent structural constraints
including the ultimate recovery of corporate travel which was
nearly 50% of its revenue mix pre-pandemic. Leverage is very high
and EBITDA and free cash flows are negative on an LTM basis and
there is a significant distance in returning to pre-pandemic
levels. Competition in travel services is also high and rising with
a wide range of companies angling for more market share, requiring
significant ongoing technology costs (in the mid 40% range of
revenue), as well as sales and marketing expenditures. These costs
will remain a drag on profitability.
Despite the challenges, the Company has a strong and established
market position as the number two provider of Global Distribution
System (GDS) services globally, long operating history, and
moderate scale ($2.8 billion revenue). The Company has a stated
financial policy of returning credit metrics to pre-pandemic
levels, including net leverage (management adjusted debt to EBITDA)
targeted at between 2.5x-3.5x, which will take time to achieve. The
asset-lite business model requires limited capital intensity and
produces good profitability, with EBITDA margins that should return
to at least the low 20% range on a normalized basis.
Liquidity is good (SGL-2), supported by a large cash balance of
approximately $588 million at the end of the last quarter end and
pro forma for the transaction, which is more than sufficient to
cover all basic obligations over the next 12 months. The company
pays limited preferred stock dividends, has suspended share
repurchases, and its nearest debt maturities are in 2025. Moody's
expects negative free cash flows in 2023 which will erode the cash
balance (but excludes management's $100 million working capital
optimization target). The company is not subject to financial
leverage maintenance covenants, but term loans are subject to a
minimum asset coverage test of 75% (e.g., subsidiary guarantors
must hold at least 75% of total gross consolidated assets) and the
guarantors and their subsidiaries are subject to a minimum
liquidity covenant of at least $100 million. The company has no
revolving credit facility. Alternate liquidity is limited given the
largely secured capital structure and very thin market
capitalization.
The senior secured loans and notes, issued at Sabre GLBL Inc.,
Sabre Holdings Corporation's wholly owned direct subsidiary, are
rated B3, equal to Sabre's Corporate Family Rating (CFR) given the
predominance of this debt class in the capital structure. Security
for the existing senior secured lenders includes the assets of all
domestic subsidiaries and a 2/3 stock pledge of the stock of
foreign subsidiaries. The notes are guaranteed by Sabre Holdings
Corporation and each of Sabre GLBL's existing and future
subsidiaries that are borrowers or guarantors of the senior secured
credit facilities. The senior secured term loan issued at Sabre
Financial Borrower, LLC (a subsidiary of Sabre Holdings
Corporation) is rated B2, one notch above the existing senior
secured lenders, because they have a priority claim over the
existing secured claims with a guarantee from the majority of
Sabre's foreign assets limited to $400 million. The credit ratings
on senior secured debt also reflects support provided by
subordinate and unrated exchangeable notes and Moody's expectation
for an average family recovery in a default scenario.
The stable outlook reflects Moody's forecast for travel demand to
continue recovering, driving above normal growth in bookings
producing revenue near $3.3 - $3.4 billion by the end of 2024.
EBITDA margins could approach 20%, generating close to $600 million
of EBITDA lifted by significant cost actions which could save close
to $400 million. Free cash flows will likely be positive in 2024,
following negative free cash flows in 2023 despite management's
intention to realize up to $100 million in working capital by
optimizing related activities. Moody's forecast assumes the company
repays more than $300 million in debt through 2024 and more than
$800 million through 2025 and maintains cash balances that average
between $400-$650 million.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
Ratings could be upgraded if debt to EBITDA (Moody's adjusted) is
sustained below 5.5x (Moody's adjusted) and free cash flow to debt
is sustained in the mid-single digits. A positive rating action
could also be conditional on successfully refinancing upcoming
maturities well in advance, operating performance is consistent
with management's plan, liquidity improves, and there are no
material unfavorable changes in the company's market position,
scale, diversity, or operating performance including organic growth
and profitability.
Ratings could be downgraded if debt to EBITDA (Moody's adjusted) is
expected to be sustained above 6.5x or negative free cash flow is
expected to be sustained. A negative rating action could also be
considered if operating performance deviates from the company's
plan, liquidity declines, the 2025 debt maturities are not
successfully refinanced well in advance, or there are material
unfavorable and sustained changes in the company's market position,
scale, diversity, or operating performance including organic growth
and profitability.
Based in Southlake, TX, Sabre Holdings Corporation's business is
organized in two segments. The Travel Solutions segment includes
revenues from Global Distribution System (GDS) services (a
software-based passenger reservation system) as well as from
commercial and operations offerings to the airline industry. The
Hospitality Solutions segment includes distribution, operations,
and marketing offerings for the hotel industry. Revenue for the
last twelve months ended June 30, 2023 was approximately $2.8
billion.
The principal methodology used in this rating was Business and
Consumer Services published in November 2021.
SIMPLETECH REPAIR: Seeks Cash Collateral Access
-----------------------------------------------
Simpletech Repair LLC asks the U.S. Bankruptcy Court for the
Northern District of New York for authority to use cash collateral
and provide adequate protection.
The Debtor requires the use of cash collateral to pay employee
wages and other ordinary course operating expenses as well as
administrative expenses incurred in the Chapter 11 cases.
The prepetition secured lender who has an interest in the cash
collateral are Lyons National Bank, Stor RB One Limited, and UCC
Rep.
On October 2, 2017 the Debtor and Lyons entered into a secured line
of credit of which allegedly has $100,000 due and owing as of which
is secured by the Debtor's interest inventory, chattel, paper,
accounts, equipment and general intangibles.
On May 22, 2023 the Debtor and Stor RB One entered into secured
agreement which was filed on May 22, 2023 and the UCC statement is
not available to ensure what this obligation is secured by, but the
Debtor assumes that this secured creditor has a security in the
same collateral as Lyons.
On June 30, 2023 the Debtor and UCC Rep entered into a secured
agreement which was filed on June 30 2023 and the UCC statement is
not available to ensure which this obligation is secured by, but
the Debtor also assumes that this secured creditor has the security
in the same collateral as Lyons.
The Debtor hopes to work with these creditors to provide a
temporary adequate protection payment which should protect these
secured creditors' collateral pending confirmation of the Debtor's
plan of reorganization.
Under the circumstances, the Debtor believes he will be able to
reach an understanding on an amount of adequate protection provided
which is reasonable and sufficient to protect the interest of these
alleged secured lenders. These alleged secured lenders are also
adequately protected by the Collateral set forth on the UCC-1
financing statement.
The lien and security interest to be granted to these alleged
secured lenders in the anticipated Cash Collateral Order should be
granted priority and be subject only to any validly perfected liens
which may remain senior to the lien and security interest granted
to them in the Interim Order and the Final Order.
The Debtor also requests the court to schedule a preliminary and
final hearing on the matter on August 30, 2023.
A copy of the motion is available at https://urlcurt.com/u?l=qPdu0X
from PacerMonitor.com.
About Simpletech Repair LLC
Simpletech Repair LLC sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. N.D. N.Y. Case No. 23-30542-5-wak) on
August 4, 2023. In the petition signed by Jeffrey VanDusen, sole
and controlling member, the Debtor disclosed up to $500,000 in
assets and up to $1 million in liabilities.
Maxsen D. Champion, Esq. represents the Debtor as legal counsel.
SORRENTO THERAPEUTICS: New $100 Million Chapter 11 DIP Loan Okayed
------------------------------------------------------------------
Jeff Montgomery of Law360 reports that bankrupt drug developer
Sorrento Therapeutics secured a Texas judge's approval Monday,
August 7, 2023, for a $100 million emergency replacement of an
expired debtor-in-possession loan from Oramed Pharmaceuticals,
after the Debtor set aside a proposed $200 million offer for stock
in non-debtor affiliate Scilex Holding Co.
About Sorrento Therapeutics
Sorrento Therapeutics, Inc. -- http://www.sorrentotherapeutics.com/
-- is a clinical and commercial stage biopharmaceutical company
developing new therapies to treat cancer, pain (non-opioid
treatments), autoimmune disease and COVID-19. Sorrento's
multimodal, multipronged approach to fighting cancer is made
possible by its extensive immuno-oncology platforms, including key
assets such as next-generation tyrosine kinase inhibitors ("TKIs"),
fully human antibodies ("G-MAB(TM) library"), immuno-cellular
therapies ("DAR-T(TM)"), antibody-drug conjugates ("ADCs"), and
oncolytic virus ("Seprehvec(TM)"). Sorrento is also developing
potential antiviral therapies and vaccines against coronaviruses,
including STI-1558, COVISHIELD(TM) and COVIDROPS(TM), COVI-MSCTM;
and diagnostic test solutions, including COVIMARK(TM).
Sorrento Therapeutics, Inc., and Scintilla Pharmaceuticals, Inc.,
sought Chapter 11 protection (Bankr. S.D. Tex. Lead Case No.
23-90085) on Feb. 13, 2023. Sorrento disclosed assets in excess of
$1 billion and liabilities of about $235 million as of Feb. 10,
2023.
Judge David R. Jones oversees the cases.
The Debtors tapped Latham & Watkins, LLP as bankruptcy counsel;
Jackson Walker, LLP as local counsel; Tran Singh, LLP as conflicts
counsel; and M3 Advisory Partners, LP as financial advisor. Mohsin
Y. Meghji, managing partner at M3, serves as the Debtors' chief
restructuring officer. Stretto Inc. is the claims, noticing and
solicitation agent.
Norton Rose Fulbright US, LLP and Milbank, LLP represent the
official committee of unsecured creditors appointed in the Debtors'
Chapter 11 cases.
On April 10, 2023, the U.S. Trustee for Region 7 appointed an
official committee to represent the Debtors' equity security
holders.
On April 10, 2023, the U.S. Trustee for Region 7 appointed an
official committee to represent the Debtors' equity security
holders. Glenn Agre Bergman & Fuentes, LLP and Greenberg Traurig,
LLP serve as the equity committee's bankruptcy counsel.
TAMPA BAY PLUMBERS: Court OKs Interim Cash Collateral Access
------------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida, Tampa
Division, authorized Tampa Bay Plumbers, LLC to use cash collateral
on an interim basis in accordance with the budget, retroactive to
July 10, 2023.
The creditors that may assert blanket liens against the Debtor's
assets are Corporation Service Company, as representative, American
Express National Bank, U.S. Small Business Administration, Western
Equipment Finance, Inc., Alliance Funding Group, Pawnee Leasing
Corporation, Dedicated Funding, LLC/First Foundation Bank, Wells
Fargo Bank, N.A., ASSN Company, American Bank, N.A, First Horizon
Bank, and UCC Filer 2.
The Debtor estimates that the Secured Creditors' collective claims
are secured by $451,891. The Secured Creditor Assets include
$349,891 in cash and accounts receivable.
The Debtor is permitted to use cash collateral to pay: (a) amounts
expressly authorized by the Court; (b) one quarter of the current
and necessary expenses set forth in the budget, plus an amount not
to exceed 10% for each line item; and (c) such additional amounts
as may be expressly approved in writing by the Secured Creditors.
As adequate protection for the use of cash collateral, the Secured
Creditors will have perfected post-petition liens against cash
collateral to the same extent and with the same validity and
priority as their prepetition liens, without the need to file or
execute any document as may otherwise be required under applicable
non bankruptcy law.
The Debtor will maintain insurance coverage for its property in
accordance with the obligations under the loan and security
documents with the Secured Creditors.
A continued hearing on the matter is set for August 31 at 2 p.m.
A copy of the order is available at https://urlcurt.com/u?l=JIwqQX
from PacerMonitor.com.
About Tampa Bay Plumbers, LLC
Tampa Bay Plumbers, LLC sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No. 23-02904) on July
10, 2023. In the petition signed by Ryan J. Pelky, its manager, the
Debtor disclosed $1,781,764 in assets and $4,418,145 in
liabilities.
Judge Catherine Peek McEwen oversees the case.
Buddy D. Ford, Esq., represents the Debtor as legal counsel.
TENNECO INC: Moody's Affirms B2 CFR & Rates Sr. Unsecured Debt Caa1
-------------------------------------------------------------------
Moody's Investors Service affirmed Tenneco Inc.'s B2 corporate
family rating and B2-PD probability of default rating. Moody's also
downgraded the senior secured term loan A, term loan B and secured
notes ratings to B1 from Ba3. At the same time, Moody's assigned a
Caa1 rating to Tenneco's senior unsecured bridge credit facility
and withdrew the Caa1 rating on the senior unsecured notes. The
outlook is stable.
The affirmation of the B2 CFR reflects the company's very high
leverage (debt-to-EBITDA near 7x), which Moody's expects will fall
below 6.5x by the end of 2023 as global light vehicle production
increases and raw material costs ease. Returns should improve over
the next couple of years with more stable original equipment
manufacturer (OEM) production runs and management's strategy to
aggressively reduce costs. However, continued friction from
volatile raw material inputs and elevated labor and energy costs
will temper more pronounced margin improvement.
The downgrade of the senior secured ratings reflects the placement
of a $1.2 billion unrated asset-based revolving credit facility
(ABL) that has a first priority interest in substantially all
current assets. The term loans and secured notes have a second
priority interest on the current assets with a first priority
interest on all other assets.
The assignment of the Caa1 rating on the senior unsecured bridge
credit facility, which was put in place in lieu of the originally
contemplated unsecured notes offering, reflects contractual
subordination with only a residual claim on assets behind a
significant amount of secured debt obligations.
Downgrades:
Issuer: Tenneco Inc.
Backed Senior Secured Bank Credit Facility, Downgraded to B1 from
Ba3
Senior Secured Regular Bond/Debenture, Downgraded to B1 from Ba3
Assignments:
Issuer: Tenneco Inc.
Senior Unsecured Bridge Credit Facility, Assigned Caa1
Affirmations:
Issuer: Tenneco Inc.
Corporate Family Rating, Affirmed B2
Probability of Default Rating, Affirmed B2-PD
Withdrawals:
Issuer: Tenneco Inc.
Senior Unsecured Regular Bond/Debenture, Withdrawn, previously
rated Caa1
Outlook Actions:
Issuer: Tenneco Inc.
Outlook, Remains Stable
RATINGS RATIONALE
The ratings reflect Tenneco's good scale, diverse operating model
(end markets, geographic regions, products, customers) and strong
market positions that enable the company to capitalize on key
automotive industry trends such as enhanced vehicle safety and
handling and stricter emissions regulations. Slower
electrification adoption within the off-highway and commercial
truck markets also present growth opportunities. However, roughly
one-third of revenue is vulnerable to the industry's transition to
alternative propulsion platforms which will likely require
additional investments/acquisitions to fill this gap. Favorably the
company is demonstrating improving penetration, and comparable
content per vehicle, on hybrid electric vehicles. The higher
margin DriV business (aftermarket repair parts), at approximately
20% of value-add revenues (net of substrate sales within the Clean
Air segment), provides a stable offset to volatility in light
vehicle production.
The stable outlook reflects Moody's expectations for debt-to-EBITDA
to fall and margins to modestly improve as OEM production levels
continue to recover and savings are realized from planned cost
reduction initiatives through 2024. The outlook also reflects
Tenneco's adequate liquidity, supported by Moody's expectation of
significant steps towards generating positive free cash flow,
boosted by continued cost recovery mechanisms with customers.
Tenneco's liquidity is supported by Moody's expectations for a
sustained cash balance of at least $500 million, significant
availability under the $1.075 billion revolving tranche of the ABL,
set to expire in 2028 (approximately $830 million available at June
30, 2023), and sustainable progress towards generating positive
free cash flow. The ABL has a springing minimum Fixed Charge
Coverage Ratio (FCCR) of 1x if availability falls below a specific
threshold. Moody's expects the company to maintain ample headroom
in complying with this requirement. The term loans and secured
notes do not have any financial maintenance covenants.
Tenneco utilizes accounts receivable factoring/securitization
facilities as a source of financing (included in Moody's adjusted
debt calculations). If unable to maintain and extend these
programs, additional borrowings under the revolving credit facility
would be required to meet liquidity needs.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded with annual free cash flow eclipsing
$150 million that enables accelerated debt repayment.
Demonstrating margin expansion even during lower and erratic
vehicle production environments and continued progress on achieving
targeted cost savings would also be viewed favorably.
More specifically, EBITA-to-interest exceeding 2.5x, debt-to-EBITDA
trending towards 4x and an EBITA margin approaching 7% could result
in a rating upgrade. Maintenance of solid liquidity would also be a
precursor to upgrading the ratings.
Ratings could be downgraded if the company is unable to improve
margins or sustain positive free cash flow. Debt-to-EBITDA
remaining near 6x, EBITA-to-interest below 1.5x or annual free cash
flow falling towards breakeven or worse could also result in
negative rating action. The inability to realize anticipated
savings from targeted cost reduction initiatives by the end of 2024
or a meaningful deterioration in liquidity could also result in a
downgrade.
The principal methodology used in these ratings was Automotive
Suppliers published in May 2021.
Tenneco Inc. is a leading automotive supplier of clean air,
powertrain, performance solutions and brand name aftermarket
products for automotive OEMs and automotive repair and replacement
parts customers. Value-add revenue for the twelve months ended June
30, 2023 was approximately $14.6 billion.
TGL CAPITAL: Seeks Approval to Hire Legal Counsel
--------------------------------------------------
TGL Capital Holdings, LLC seeks approval from the U.S. Bankruptcy
Court for the Northern District of Illinois to hire The Golding Law
Offices, P.C. and the Law Offices of David P. Leibowitz, LLC to
serve as legal counsels in its Chapter 11 case.
The firms' services include:
a. advising the Debtor regarding its rights, powers and
duties;
b. assisting in the negotiation and formulation of a plan of
reorganization;
c. examining and investigating claims against the Debtor;
d. taking necessary actions with reference to the claims
asserted against the Debtor;
e. taking necessary actions to collect, recover or sell
property of the Debtor;
f. preparing legal papers;
g. assisting in obtaining refinancing of the Debtor's secured
debt;
h. assisting the Debtor in resolving issues with unions
impairing its reorganization; and
i. performing other necessary legal services for the Debtor.
The hourly rates of the firms' counsel and staff are as follows:
David P. Leibowitz $800
Richard N. Golding $750
Other Attorneys $500
Paralegals $190
In addition, the firms will seek reimbursement for expenses
incurred.
As disclosed in court filings, the firm and its attorneys are
"disinterested" pursuant to Section 101(14) of the Bankruptcy
Code.
The firm can be reached through:
Richard N. Golding, Esq.
The Golding Law Offices, PC
500 N. Dearborn Street, 2nd Fl.
Chicago, IL 60610
Telephone: (312) 832-7892
Facsimile: (312) 755-5720
Email: rgolding@goldinglaw.net
David P. Leibowitz, Esq.
Law Offices of David P. Leibowitz, LLC
3478 N. Broadway, Unit 234
Chicago, IL 60657-6968
Phone: (312) 662-5750
Email: dleibowitz@lakelaw.com
About TGL Capital
TGL Capital Holdings, LLC is the fee simple owner of a condominium
apartment building located at 2212 W. Lawrence Ave., Chicago, Ill.
The property is valued at $6.7 million.
The Debtor filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. N.D. Ill. Case No. 23-09284) on July 18,
2023, with $6,701,000 in assets and $5,789,339 in liabilities. Joe
Zivkovic, manager, signed the petition.
Judge Jacqueline P. Cox oversees the case.
David P. Leibowitz, Esq., at the Law Offices of David P. Leibowitz,
LLC is the Debtor's bankruptcy counsel.
UNITED FURNITURE: Trustee Taps Dallas, Rawlings as Special Counsel
------------------------------------------------------------------
Derek Henderson, the Chapter 11 trustee for United Furniture
Industries, Inc. and its affiliates, seeks approval from the U.S.
Bankruptcy Court for the Northern District of Mississippi to employ
Dallas, Anthony & Jeffords, PLLC and Rawlings & MacInis, P.A. as
its special counsels for ERTC Matters.
The firms will be gathering application information and conduct the
analysis necessary to calculate the Employee Retention Tax Credit
(ERTC) as well as delivery of the necessary documents to the
Internal Revenue Service to apply for such federal tax credits on
behalf of the Debtor.
The firms shall received a 20 percent contingency fee on the actual
amount received for tax credits.
As disclosed in a court filing, Dallas Anthony & Jeffords, PLLC and
Rawlings & MacInnis, P.A. are "disinterested persons" as that term
is defined in Section 101(14) of the Bankruptcy Code.
The firms can be reached at:
Dustin R. Jeffords, Esq.
Dallas Anthony & Jeffords, PLLC
601 Crescent Boulevard, Suite 102
Ridgeland, MI 39157
Phone: (601) 944-4290
Email: Contact@DAJTaxLaw.com
Jeff Rawlings, Esq.
Rawlings & MacInnis, P.A.
PO Box 1789
Madison, MS 39130
Office: 601-898-1180
Email: jeff@rawlingsmacinnis.net
About United Furniture Industries
United Furniture Industries, Inc. manufactures and sells
upholstery. It offers bonded leather and upholstery fabric
recliners, reclining sofas and loveseats, sectionals, and sofa
sleepers, as well as stationary sofas, loveseats, chairs, and
ottomans.
United Furniture Industries was subject to an involuntary Chapter 7
bankruptcy petition (Bankr. N.D. Miss. Case No. 22-13422) filed on
Dec. 30, 2022. The petition was signed by alleged creditors Wells
Fargo Bank, National Association, Security Associates of
Mississippi Alabama LLC, and V & B International, Inc. On Jan. 18,
2023, the court entered the order for relief, thereby, converting
the case to one under Chapter 11.
On Jan. 31, 2023, eight affiliates of United Furniture Industries
filed for Chapter 11 protection in the U.S. Bankruptcy Court for
the Northern District of Mississippi. The affiliates are LS
Logistics, LLC, Furniture Wood, Inc., UFI Transportation, LLC,
United Wood Products, Inc., Associated Bunk Bed Company, FW
Acquisition, LLC, UFI Royal Development, LLC, and UFI Exporter,
Inc. Their Chapter 11 cases are jointly administered under Case No.
22-13422.
Judge Selene D. Maddox oversees the cases.
Wells Fargo is represented by R. Spencer Clift, III, Esq., while
Security Associates is represented by Andrew C. Allen, Esq., at The
Law Offices of Andrew C. Allen.
Derek Henderson is the trustee appointed in the Debtors' Chapter 11
cases. The trustee hired McCraney, Montagnet, Quin, Noble, PLLC as
bankruptcy counsel; King & Spencer, PLLC, NC Eminent Domain Law
Firm and Mullin Hoard & Brown, LLP as special counsels; Harper
Rains Knight & Company as financial advisor; and B. Riley Real
Estate, LLC as real estate advisor.
UNITY ELECTRICAL: Melissa Haselden Named Subchapter V Trustee
-------------------------------------------------------------
The U.S. Trustee for Region 7 appointed Melissa Haselden, Esq., at
Haselden Farrow, PLLC as Subchapter V trustee for Unity Electrical
Services, LLC.
Ms. Haselden will be paid an hourly fee of $500 for her services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Ms. Haselden declared that she is a disinterested person according
to Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Melissa A. Haselden, Esq.
Haselden Farrow, PLLC
700 Milam, Suite 1300
Pennzoil Place
Houston, TX 77002
Telephone: (832) 819-1149
Facsimile: (866) 405-6038
Email: mhaselden@haseldenfarrow.com
About Unity Electrical Services
Unity Electrical Services, LLC is a one-stop solution for
electrical needs in Cypress, Woodlands, Tomball and Houston area.
It provides a full list of services for residential and commercial
applications.
Unity Electrical Services filed a petition under Chapter 11,
Subchapter V of the Bankruptcy Code (Bankr. S.D. Texas Case No.
23-32844) on July 28, 2023, with up to $500,000 in assets and up to
$1 million in liabilities. Andrea Clara, managing member, signed
the petition.
Judge Jeffrey P. Norman oversees the case.
Susan Tran Adams, Esq., at Tran Singh, LLP, represents the Debtor
as legal counsel.
UPTOWN 240: Gets OK to Hire Level Engineering & Inspection
----------------------------------------------------------
Uptown 240, LLC received approval from the U.S. Bankruptcy Court
for the District of Colorado to employ Level Engineering &
Inspection to provide professional engineering services.
The Debtor seeks to hire Engineer to provide professional
engineering services, including providing recommendations regarding
testing, performing any recommended testing, and, to the extent
necessary, testifying in any court proceedings.
Liberty Janson will be in charge of the Debtor's account in
addition to being the primary person providing services to the
Debtor. Ms. Janson will bill at a a rate of $220 per hour, and
$350 per hour testify at a hearing. Other architects and engineers
will provide services at a rate of $175 per hour.
Ms. Janson 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:
Liberty Janson
Level Engineering & Inspection
320 Cleveland Ave.
Loveland, CO 80537H
Phone: (720) 408-0119
Email: admin@levelinspectionsco.com
About Uptown 240
Uptown 240, LLC owns and operates a condominium complex in Dillon,
Colo. The residences are an exclusive collection of 80-luxury
mountain and lakeview condominiums.
Uptown 240 filed its voluntary petition for relief under Chapter 11
of the Bankruptcy Code (Bankr. D. Colo. Case No. 23-10617) on Feb.
23, 2023, with $10 million to $50 million in both assets and
liabilities. Danilo A. Ottoborgo, president of Uptown 240, signed
the petition.
Judge Thomas B. Mcnamara presides over the case.
The Debtor tapped Keri L. Riley, Esq., at Kutner Brinen Dickey
Riley, PC as legal counsel and Eide Bailly, LLP as accountant.
On April 21, 2023, the Office of the U.S. Trustee appointed an
official committee of unsecured creditors in this Chapter 11 case.
Onsager Fletcher Johnson Palmer, LLC serves as the committee's
counsel.
VERICAST CORP: S&P Affirms 'CCC' Issuer Credit Rating, Outlook Neg
------------------------------------------------------------------
S&P Global Ratings affirmed all its ratings, including its 'CCC'
issuer credit rating on Vericast Corp.
The negative outlook on Vericast reflects the potential that it
will undertake a distressed debt exchange or debt restructuring
over the next 12 months.
Vericast extended the maturity of its asset-based lending (ABL)
revolver to 2026 reducing near term liquidity pressure. On August
4, 2023, Vericast extended the maturity of its $250 million ABL
revolver to April 2026 from April 2024. The extension of its ABL
revolver now pushes all its debt maturities out to 2026 and 2027.
As a result, S&P now expects Vericast will have sufficient
liquidity to meet its cash uses over the next year.
S&P said, "We continue to believe Vericast's capital structure is
unsustainable. Even as near-term liquidity pressure has eased, the
company still has a significant debt base of more than $2.9 billion
and exposure to rising interest rates. We expect Vericast's total
annual interest burden to increase over the next two years and
exceed $350 million in 2023. This will easily exceed two-thirds of
the company's expected EBITDA generation over the next year. We
expect the company will struggle to significantly reduce leverage
through organic growth due to our expectation for negative free
operating cash flow (FOCF) and continued challenges in its print
advertising businesses, which will limit substantial EBITDA
expansion. We forecast leverage will remain very high in the mid-
to high-7x area in 2023 after declining from the low-9x area in
2022.
"We expect continued secular pressure in Vericast's print
advertising and check products segments, which contribute to more
than 75% of its total revenue, but expect EBITDA to improve in 2023
due to cost efficiency measures. The company's print-based
advertising sales to its consumer packaged goods and grocery
clients have been hampered by pullbacks in client spending,
inflation concerns and budget constraints. Additionally, Vericast's
strong EBITDA generating check products segment continues to suffer
from organic volume declines because of a consumer shift to other
forms of payment processing, such as digital. Vericast is
mitigating these challenges through price increases, but we believe
it will be difficult to offset volume declines through price
increases and that revenue pressure will continue. Due to these
challenges in print-based advertising and check products, we expect
total revenue to decline in 2023."
Despite the continued revenue pressure, Vericast is starting to see
improvement in EBITDA due to cost efficiency measures that it has
implemented. These efforts resulted in improvements in gross margin
and lower overhead costs that improved EBITDA margin by 360 basis
points (bps) in Q1 and we expect continued margin improvement
throughout 2023.
The negative outlook on Vericast reflects the potential that it
will undertake a distressed debt exchange or debt restructuring
over the next 12 months.
S&P could lower its rating on Vericast if:
-- It announces a debt exchange or debt restructuring; or
-- S&P anticipates a payment default in the next six months.
S&P could raise its rating on Vericast if:
-- S&P no longer views a distressed exchange or debt restructuring
as likely over the next 12 months; and
-- The company's operating performance improves substantially such
that S&P anticipates cash generation will comfortably cover
operating costs and debt fixed charges over the next 12 months.
VIEWRAY INC: Hires B. Riley Securities as Investment Banker
-----------------------------------------------------------
ViewRay, Inc. and ViewRay Technologies, Inc. seek approval from the
U.S. Bankruptcy Court for the District of Delaware to hire B. Riley
Securities, Inc. as their investment banker.
B. Riley will render these services:
a. review and analyze, from a financial perspective, the
general business, operations, financial condition and prospects of
the Debtors, and formulate and review with the Debtors a strategic
plan involving a Financing Transaction, a Sale Transaction, or a
Restructuring Transaction or a combination thereof, including
timelines and milestones;
b. assist the Debtors in their preparation of an updated
Confidential Descriptive Memorandum describing the Debtors, the
Securities and/or Transactions;
c. coordinate with the Debtors' prior investment bankers with
respect to their processes to contact relevant parties;
d. review with the Debtors a schedule of the investors to whom
the Memorandum will be provided and contact potential new
investors;
e. assist the Debtors, as requested, with other schedules,
analyses and communications relating to a Transaction;
f. provide testimony, if applicable, with respect with to B.
Riley's work; and
g. participate, under the Debtors' direction and guidance, in
negotiations regarding a Transaction with prospective investors and
interested parties.
B. Riley will be compensated as follows:
a. Initial Fee. In addition to the other fees provided for in
the Engagement Letter, an initial nonrefundable fee of $50,000 due
immediately upon the signing of the Engagement Letter, which was
earned upon B. Riley’s receipt in consideration of B. Riley
accepting the engagement.
b. Monthly Fees. A monthly fee of $50,000, payable on every
monthly anniversary of the effective date of the Engagement Letter
(i.e., July 5, 2023) during the Term. Both the Initial Fee and the
Monthly Fees shall be credited 100 percent against any Transaction
Fee.
c. Transaction Fee(s). In addition to the other fees provided
in the Engagement Letter, the Debtors shall pay B. Riley the
following transaction fees:
i. Sale Transaction Fee. Upon the consummation of a Sale
Transaction, B. Riley shall earn, and the Debtors shall promptly
pay to B. Riley, a cash fee equal to the greater of (i) $1,000,000
and (ii) 1.5 percent of the Aggregate Transaction Value of any such
Sale Transaction;
ii. Restructuring Transaction Fee. If a Sale Transaction
does not occur and in the event the Debtors consummate a
Restructuring, a fee equal to $1,000,000 payable upon the earlier
of: (a) the completion of any Restructuring as set forth in more
detail in the Engagement Letter or (b) the closing of any
Restructuring Transaction; and
iii. Financing Transaction Fee. Upon the consummation of
each Financing Transaction, B. Riley shall earn, and the Debtors
shall thereupon pay immediately and directly from the gross
proceeds of such Financing Transaction, as a cost of such Financing
Transaction, a cash fee equal to 2 percent of the gross proceeds of
any such Financing Transaction placed or committed, with Financing
issued with original issue discount valued at the face amount
thereof.
d. If a Transaction closes any time during the period of 12
months following the effective date of termination of the Term (the
Tail Period) or the Debtors send or receive a proposal or enter
into an agreement with respect to a potential Transaction during
the Tail Period and such Transaction is subsequently consummated,
then the Debtors shall pay to B. Riley the fees at the closing of
the Transaction in an amount equal to the fees that would otherwise
have been paid to B. Riley with respect to that Transaction, in
cash in full upon the closing of any Transaction (subject to any
required Court approval), irrespective of whether B. Riley has
provided services relating to such Transaction.
Perry Mandarino, a senior managing director at B. Riley Securities,
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:
Perry M. Mandarino
B. Riley Securities, Inc.
11100 Santa Monica Blvd., Suite 800
Los Angeles, CA 90025
Telephone: (310) 966-1444
Email: pmandarino@brileyfin.com
About ViewRay
ViewRay, Inc. designs, manufactures, and markets the MRIdian
MRI-guided Radiation Therapy System. MRIdian is built upon a
proprietary high-definition magnetic resonance imaging system
designed from the ground up to address the unique challenges, and
clinical workflow for advanced radiation oncology. The MRIdian
MRI-guided Radiation Therapy System integrates diagnostic-quality
MR imaging with radiation therapy delivery to enable on-table
adaptive treatments with real-time tissue tracking and automatic
beam gating.
ViewRay, Inc. and its affiliate ViewRay Technologies, Inc. sought
protection under the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case
No. 23-10935) on July 16, 2023. In the petition signed by Paul
Zieglerm chief executive officer, the Debtors disclosed $233
million assets and $75 million in liabilities.
The Debtors tapped Cravath, Swane and Moore LLP as special
corporate counsel, Berkeley Research Group, LLC as restructuring
advisor, and B. Riley Securities, Inc. as investment banker.
Stretto, Inc. is the notice, claims, balloting and administrative
agent.
VIEWRAY INC: Seeks to Hire Faegre Drinker as Bankruptcy Counsel
---------------------------------------------------------------
ViewRay, Inc. and ViewRay Technologies, Inc. seek approval from the
U.S. Bankruptcy Court for the District of Delaware to hire Faegre
Drinker Biddle & Reath LLP as their counsel.
The firm's services include:
a. advising the Debtors with respect to their powers and
duties in the continued management and operation of their
businesses and properties;
b. advising and consulting on the conduct of the Debtors'
Chapter 11 cases, including all of the legal and administrative
requirements of operating in Chapter 11;
c. attending meetings and negotiating with representatives of
creditors and other parties in interest;
d. taking all necessary actions to protect and preserve the
Debtors' estates, including prosecuting actions on the Debtors'
behalf, defending any action commenced against the Debtors, and
representing the Debtors in negotiations concerning litigation in
which they are involved, including objections to claims filed
against the estates;
e. preparing pleadings;
f. representing the Debtors in connection with obtaining
authority to continue using cash collateral and post-petition
financing;
g. advising the Debtors in connection with any potential sale
of assets;
h. appearing before the bankruptcy court and any appellate
courts to represent the interests of the Debtors' estates;
i. taking any necessary action to negotiate, prepare, and
obtain confirmation of a Chapter 11 plan and related documents; and
j. other necessary legal services.
Faegre will be paid at these rates:
Partner $920 to $1,095 per hour
Associates $580 to $735 per hour
Paralegals $460 per hour
As disclosed in court filings, Faegre is a "disinterested person"
within the meaning of Section 101(14) of the Bankruptcy Code.
The firm received from the Debtors a retainer of $450,000.
Michael Pompeo, Esq., a partner at Faegre, 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:
Michael P. Pompeo, Esq.
Faegre Drinker Biddle & Reath, LLP
1177 Avenue of the Americas, 41st Floor
New York, NY 10036
Tel: 212 248 3184
Fax: 212 248 3141
Email: michael.pompeo@faegredrinker.com
About ViewRay
ViewRay, Inc. designs, manufactures, and markets the MRIdian
MRI-guided Radiation Therapy System. MRIdian is built upon a
proprietary high-definition magnetic resonance imaging system
designed from the ground up to address the unique challenges, and
clinical workflow for advanced radiation oncology. The MRIdian
MRI-guided Radiation Therapy System integrates diagnostic-quality
MR imaging with radiation therapy delivery to enable on-table
adaptive treatments with real-time tissue tracking and automatic
beam gating.
ViewRay, Inc. and its affiliate ViewRay Technologies, Inc. sought
protection under the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case
No. 23-10935) on July 16, 2023. In the petition signed by Paul
Zieglerm chief executive officer, the Debtors disclosed $233
million assets and $75 million in liabilities.
The Debtors tapped Cravath, Swane and Moore LLP as special
corporate counsel, Berkeley Research Group, LLC as restructuring
advisor, and B. Riley Securities, Inc. as investment banker.
Stretto, Inc. is the notice, claims, balloting and administrative
agent.
VIEWRAY INC: Seeks to Hire Stretto Inc as Administrative Advisor
----------------------------------------------------------------
ViewRay, Inc. and its affiliate ViewRay Technologies, Inc. seeks
approval from the U.S. Bankruptcy Court for the District of
Delaware to hire Stretto, Inc. as its administrative advisor.
The Debtor requires an administrative advisor to:
a. assist with, among other things, solicitation, balloting
and tabulation of votes, and prepare any related reports in support
of confirmation of a Chapter 11 plan;
b. prepare an official ballot certification and, if necessary,
testify in support of the ballot tabulation results;
c. assist with the preparation of the Debtor's schedules of
assets and liabilities and statements of financial affairs and
gather data in conjunction therewith;
d. provide a confidential data room;
e. manage and coordinate any distributions pursuant to a
Chapter 11 plan if designated as distribution agent under such
plan; and
f. provide claims analysis and reconciliation, case research,
depository management, treasury services, confidential online
workspaces or data rooms, and any related services otherwise
required by applicable law, governmental regulations, or court
rules or orders in connection with the Debtor's Chapter 11 case.
The firm received an advance retainer in the amount of $10,000.
Sheryl Betance, a senior managing director at Stretto, disclosed in
a court filing that her firm is a "disinterested person" pursuant
to Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Sheryl Betance
Stretto, Inc.
410 Exchange, Ste. 100
Irvine, CA 92602
Tel: (714) 716-1872
Email: sheryl.betance@stretto.com
About ViewRay Inc.
ViewRay, Inc. designs, manufactures, and markets the MRIdian
MRI-guided Radiation Therapy System. MRIdian is built upon a
proprietary high-definition magnetic resonance imaging system
designed from the ground up to address the unique challenges, and
clinical workflow for advanced radiation oncology. The MRIdian
MRI-guided Radiation Therapy System integrates diagnostic-quality
MR imaging with radiation therapy delivery to enable on-table
adaptive treatments with real-time tissue tracking and automatic
beam gating.
ViewRay, Inc. and its affiliate ViewRay Technologies, Inc. sought
protection under the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case
No. 23-10935) on July 16, 2023. In the petition signed by Paul
Zieglerm chief executive officer, the Debtors disclosed $233
million assets and $75 million in liabilities.
The Debtors tapped Cravath, Swane and Moore LLP as special
corporate counsel, Berkeley Research Group, LLC as restructuring
advisor, and B. Riley Securities, Inc. as investment banker.
Stretto, Inc. is the notice, claims, balloting and administrative
agent.
VIEWRAY INC: Taps Berkeley Research Group as Financial Advisor
--------------------------------------------------------------
ViewRay, Inc. and ViewRay Technologies, Inc. seek approval from the
U.S. Bankruptcy Court for the District of Delaware to hire Berkeley
Research Group, LLC as their financial advisor.
The firm will render these services:
(a) support the development of restructuring plans, financing,
and strategic alternatives for maximizing the enterprise value of
the Debtor;
(b) prepare various financial analyses to support
restructuring alternatives including liquidity forecast,
profitability improvements, backlog, expense levels and others as
necessary;
(c) advise the Debtor relative to negotiating with existing
lenders, potential buyers and stakeholders;
(d) provide advice to management on cash conservation measures
and liquidity forecasting after analyzing and stress testing weekly
cash flows under various scenarios;
(e) assist the Debtor with the communications and negotiations
with various third parties to support restructuring alternatives;
(f) other services as requested or directed by the CFO and
CEO, the board of directors of the Debtor or other Debtor personnel
as authorized by the foregoing and agreed to by BRG; and
(g) if a Chapter 11 bankruptcy were to become necessary,
assist the Debtor with activities relating to such bankruptcy
including, as appropriate, testimony if requested.
The firm will be paid at these hourly rates:
Managing Directors $1,050 to $1,250
Associate Directors & Directors $810 to $990
Professional Staff $395 to $795
Support Staff $175 to $350
During the 90-day period prior to the Petition Date, the Debtors
paid the firm $150,000 in aggregate for professional services
performed and expenses incurred.
The firm will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Robert Butler, a managing director at Berkeley Research Group, LLC,
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:
Robert Butler
Berkeley Research Group, LLC
3350 Riverwood Parkway, Suite 2105
Atlanta, GA 30339
Phone: 678-224-5274
Fax: 510-654-7857
Email: bbutler@thinkbrg.com
About ViewRay
ViewRay, Inc. designs, manufactures, and markets the MRIdian
MRI-guided Radiation Therapy System. MRIdian is built upon a
proprietary high-definition magnetic resonance imaging system
designed from the ground up to address the unique challenges, and
clinical workflow for advanced radiation oncology. The MRIdian
MRI-guided Radiation Therapy System integrates diagnostic-quality
MR imaging with radiation therapy delivery to enable on-table
adaptive treatments with real-time tissue tracking and automatic
beam gating.
ViewRay, Inc. and its affiliate ViewRay Technologies, Inc. sought
protection under the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case
No. 23-10935) on July 16, 2023. In the petition signed by Paul
Zieglerm chief executive officer, the Debtors disclosed $233
million assets and $75 million in liabilities.
The Debtors tapped Cravath, Swane and Moore LLP as special
corporate counsel, Berkeley Research Group, LLC as restructuring
advisor, and B. Riley Securities, Inc. as investment banker.
Stretto, Inc. is the notice, claims, balloting and administrative
agent.
VIPER ENERGY: Moody's Ups CFR to Ba2 & Sr. Unsecured Notes to Ba3
-----------------------------------------------------------------
Moody's Investors Service upgraded Viper Energy Partners LP's
(Viper) corporate family rating to Ba2 from Ba3, probability of
default rating to Ba2-PD from Ba3-PD, and senior unsecured notes to
Ba3 from B1. The SGL-2 speculative grade liquidity (SGL) rating was
unchanged. The rating outlook remains stable.
"Viper has successfully grown its scale and asset coverage of debt
over time while reducing its financial leverage and prudently
balancing its acquisition spending and shareholder distributions,"
said Sajjad Alam, Moody's Vice President.
Ratings upgraded:
Issuer: Viper Energy Partners LP
Corporate Family Rating, Upgraded to Ba2 from Ba3
Probability of Default Rating, upgraded to Ba2-PD from Ba3-PD
Backed Senior Unsecured Regular Bond/Debenture, Upgraded to Ba3
from B1
Outlook Actions:
Issuer: Viper Energy Partners LP
Outlook, Remains Stable
RATINGS RATIONALE
The Ba2 CFR reflects Viper's strong margins and cash flow from
mineral and royalty interests in the Permian Basin that require
zero capital expenditures and minimal operating expenses;
oil-weighted reserves that are operated and developed by
financially strong E&P companies; and proven track record of steady
growth. The rating also reflects management's demonstrated history
of conservative financial policies, including maintaining low debt
level, adjusting shareholder distributions when needed, and
deleveraging after debt-funded acquisitions. The rating also
incorporates significant uplift from Viper's operating and
strategic importance to Diamondback Energy, Inc. (Baa2 stable),
which controls and manages Viper but does not guarantee Viper's
debt. Diamondback operated roughly 58% of Viper's net royalty
acreage, and owned 100% of Viper's general partner and 56% of
Viper's publicly traded units as of June 30, 2023.
Viper's rating is constrained by its much smaller production and
cash flow base relative to similarly rated E&Ps; reliance on E&P
operators for its non-operated passive ownership interests with no
control over drilling and development decisions; the need to make
periodic acquisitions to replace production and reserves and the
related valuation and financing risks associated with it; and high
distribution business model that may lead to debt-funded
distributions in times of rapid oil price declines.
The 5.375% senior notes due 2027 are rated Ba3, one notch below the
Ba2 CFR given their unsecured claim to the company's assets, as
well as their subordinated position to the secured borrowing base
revolving credit facility that has a first-lien claim on
substantially all of Viper's assets.
Viper should maintain good liquidity through 2024, which is
reflected in the SGL-2 rating. Moody's expects solid cash flow
generation and a steady reduction in its outstanding revolver debt
balance in a supportive oil price environment. Viper normally holds
very little cash and distributes substantially all its operating
cash flow as required under the partnership agreement. As of June
30, 2023, the company had $13 million of cash and a $750 million
committed secured revolving credit facility with a borrowing base
of $1 billion. The revolver had $224 million in borrowings on June
30, 2023, leaving $526 million in available borrowing capacity. The
revolver expires on June 2, 2025. There is ample headroom under the
three financial covenants governing the revolver that should
provide unfettered access through 2024.
Given the strong linkage between Viper and Diamondback, and a
demonstrated track record of aligned financial policies and
acquisition strategy, Viper's governance risk Issuer Profile Score
(IPS) score has been changed to G-2 from G-3, consistent with
Diamondback's G-2 IPS score.
The stable outlook reflects Moody's expectation of solid free cash
flow generation and modest deleveraging through 2024.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Increased scale and free cash flow generation while sustaining low
financial leverage will likely be the primary drivers for a
potential upgrade. Viper sustaining the Debt/Average Daily
Production ratio below $14,000 per boe and the Debt/PD Reserves
ratio below $6 per boe while meaningfully increasing production and
reserves could lead to a ratings upgrade. A downgrade in the rating
could occur if average daily production falls materially, or if
large debt funded acquisitions occur without significant follow-on
deleveraging, or the company executes debt funded distributions or
unit repurchases. The Debt/Average Daily Production ratio sustained
above $25,000 per boe and the Debt/PD Reserves above $9 per boe
would pressure ratings.
Viper Energy Partners LP is a publicly traded partnership based out
of Midland, Texas, that is engaged in owning and acquiring mineral
and royalty interests in oil and natural gas properties. The
company's assets are primarily in the Permian Basin. Viper was
formed by Diamondback Energy, Inc., which controls Viper through
its 100% ownership of Viper's general partner and 56% ownership of
Viper's Class B units outstanding.
The principal methodology used in these ratings was Independent
Exploration and Production published in December 2022.
VIVO TECHNOLOGIES: Unsecureds Will Get 9 to 32 Cents on Dollar
--------------------------------------------------------------
Vivo Technologies, LLC, filed with the U.S. Bankruptcy Court for
the District of Arizona a Plan of Reorganization for Small Business
dated August 3, 2023.
The Debtor is a technology company founded in 2018. The Debtor
generates revenue through equipment sales and consulting, design,
and support services which help businesses implement conference
room audiovisual innovations and interoffice/outside communication
platforms.
In addition, the Debtor owed sales taxes to various state taxing
authorities in excess of $655,731. The various sales tax
obligations and Lender's secured claim make up the overwhelming
majority of the Debtor's outstanding liabilities. This was the main
impetus for the filing of Debtor's voluntary Chapter 11 petition.
The Plan Proponent's financial projections show that the Debtor
will have projected disposable income of $1,590,900.00. The Plan
will continue for a total of 60 months with a final payment
expected to be made on September 1, 2028.
This Plan of Reorganization proposes to pay creditors of the Debtor
from future income.
Non-priority unsecured creditors holding allowed claims will
receive distributions, which the proponent of this Plan has valued
at approximately 9-32 cents on the dollar. This Plan also provides
for the payment of administrative and priority claims.
Class 3 consists of non-priority unsecured creditors. After payment
of all allowed administrative and priority claims, including the
unclassified priority tax claims, the Class 3 general unsecured
creditors will share pro rata from the monthly payments contributed
by the Debtor for funding of the Plan. Debtor estimates that it
will begin making distributions to Class 3 Claimants around month
55 of the Plan. Class 3 is impaired and entitled to vote.
Class 4 consists of Equity Security Holders of the Debtor. Class 4
Claimants shall retain their equity interests in the Debtor. Class
4 is unimpaired and deemed to have accepted the Plan.
This Plan will be funded from the Debtor's monthly disposable
income from its business operations over the life of the Plan. The
Debtor may choose to fund the payments required under the Plan
through financing or otherwise choose to make all required
disbursements in fewer than the 5 years contemplated by the Plan.
Debtor believes it will generate sufficient funds from its ongoing
business operations to repay all administrative, priority, and
secured claims in full and also make a meaningful distribution to
Class 3 General Unsecured Creditors.
A full-text copy of the Plan of Reorganization dated August 3, 2023
is available at https://urlcurt.com/u?l=rDmegV from
PacerMonitor.com at no charge.
Attorney for Debtor:
M. Preston Gardner, Esq.
Davis Miles McGuire Gardner, PLLC
40 E. Rio Salado Pkwy., Suite 425
Tempe, AZ 85281
Telephone: (480) 733-6800
Facsimile: (480) 733-3748
Email: efile.dockets@davismiles.com
About Vivo Technologies
Vivo Technologies, LLC, is a modern and holistic unified
communications and collaboration (UCC) solutions provider. Vivo
has evolved the process for designing, deploying, and supporting
UCC solutions.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Ariz. Case No. 23-02964) on May 5, 2023.
In the petition signed by Spencer Jones, manager, the Debtor
disclosed up to $10 million in both assets and liabilities.
M. Preston Gardner, Esq., at Davis Miles McGuire Gardner, PLLC, is
the Debtor's legal counsel.
WAWANESA GENERAL: A.M. Best Reviews C++(M) Fin. Strength Rating
---------------------------------------------------------------
AM Best has placed under review with positive implications the
Financial Strength Rating of C++ (Marginal) and the Long-Term
Issuer Credit Rating of "b+" (Marginal) of Wawanesa General
Insurance Company (Wawanesa General) (San Diego, CA).
The Credit Rating (ratings) of Wawanesa General have been placed
under review with positive implications following the announcement
that its parent company, The Wawanesa Mutual Insurance Company has
entered into a definitive agreement to sell its U.S. subsidiary,
Wawanesa General, to the Automobile Club of Southern California's
affiliated insurer, Interinsurance Exchange of the Automobile Club,
a member of Auto Club Enterprises Insurance Group (ACE). The
acquisition is subject to regulatory approval and other customary
closing conditions. The under review with positive implications
status reflects the expected benefits Wawanesa General will receive
from joining ACE and the greater financial strength of the
organization. The ratings will remain under review until the
acquisition is approved by the California Department of Insurance
and the transaction closes.
WEST 132ND: Seeks Approval to Hire Joel M. Aresty as Legal Counsel
------------------------------------------------------------------
West 132nd LLC (De) seeks approval from the U.S. Bankruptcy Court
for the Southern District of Florida to hire 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 firm requested a maximum of $11,000 for retainer plus $2,000
for costs. The Debtor has agreed to pay $5,000 up front.
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 West 132nd LLC (De)
West 132nd LLC (De) c/o Crosby Capital filed its voluntary petition
for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D.
Fla. Case No. 23-15587) on July 18, 2023. The petition was signed
by Joseph DeRuscio as CRO mgr. At the time of filing, the Debtor
estimated $1 million to $10 million in both assets and liabilities.
Judge Corali Lopez-Castro presides over the case.
Joel Aresty, Esq. at JOEL M. ARESTY PA represents the Debtor as
counsel.
WEWORK INC: Posts $397 Million Net Loss in Second Quarter
---------------------------------------------------------
Wework Inc. filed with the Securities and Exchange Commission its
Quarterly Report on Form 10-Q disclosing a net loss of $397 million
on $844 million of revenue for the three months ended June 30,
2023, compared to a net loss of $635 million on $815 million of
revenue for the three months ended June 30, 2022.
For the six months ended June 30, 2023, the Company reported a net
loss of $696 million on $1.69 billion of revenue compared to a net
loss of $1.14 billion on $1.58 billion of revenue for the six
months ended June 30, 2022.
As of June 30, 2023, the Company had $15.06 billion in total
assets, $18.65 billion in total liabilities, $33 million in
redeemable noncontrolling interests, and a total deficit of $3.56
billion.
As of June 30, 2023, the Company had $205 million in cash and cash
equivalents, including $46 million held at its consolidated VIEs,
and $475 million in delayed draw note commitments, resulting in
total liquidity of $680 million. The Company issued $175 million
of the delayed draw notes in July 2023.
WeWork said, "As a result of our losses and our projected cash
needs, which have been impacted by the recent increases in member
churn, combined with our current liquidity level, substantial doubt
exists about the Company's ability to continue as a going
concern."
Management Commentary
"In a difficult operating environment, we have delivered solid
year-over-year revenue growth and dramatic profitability
improvements," David Tolley, interim chief executive officer,
commented. "Excess supply in commercial real estate, increasing
competition in flexible space and macroeconomic volatility drove
higher member churn and softer demand than we anticipated,
resulting in a slight decline in memberships."
"We are confident in our ability to meet the evolving workplace
needs of businesses of all sizes across sectors and geographies,
and our long term company vision remains unchanged," continued
Tolley. "Although we have more work to do, the talent and energy of
the WeWork team is extraordinary and we are resolutely focused on
delivering for our members for the long term. The company's
transformation continues at pace, with a laser focus on member
retention and growth, doubling down on our real estate portfolio
optimization efforts, and maintaining a disciplined approach to
reducing operating costs."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/0001813756/000181375623000059/we-20230630.htm
About WeWork
New York, NY-based WeWork Inc. (NYSE: WE) -- wework.com -- is a
global flexible workspace provider, serving a membership base of
businesses large and small through its network of 779 Systemwide
Locations, including 622 Consolidated Locations as of December
2022.
WeWork reported a net loss of $2.29 billion for the year ended
Dec.31, 2022, a net loss of $4.63 billion for the year ended Dec.
31, 2021, a net loss of $3.83 billion in 2020, and a net loss of
$3.77 billion in 2019. As of Dec. 31, 2022, the Company had $17.86
billion in total assets, $21.31 billion in total liabilities, and a
total deficit of $3.43 billion.
WHITESTONE BREWERY: Unsecureds to Split $90K over 60 Months
-----------------------------------------------------------
Whitestone Brewery, LLC filed with the U.S. Bankruptcy Court for
the Western District of Texas a Subchapter V Plan of Reorganization
dated August 3, 2023.
Debtor is a Texas Limited Liability Company which operates a
brewery and two taprooms. The main production facility and tap room
is located at 601 E. Whitestone Blvd., Cedar Park, Texas 78613 (the
"Cedar Park location").
Due to the delays, increased costs and unexpected expenses, Debtor
began borrowing in August, 2022, which coincided with the start of
the new contractor commencing their work and continuing to
completion in March of 2023. Many of the loans required significant
daily or weekly draws which severely restricted the cash flow of
the business and directly led to Whitestone needing to file
bankruptcy to stem the cash flow losses.
Since filing for bankruptcy, the Debtor has continued to operate
its two locations. In order to help it reach plan confirmation, the
Debtor took on a DIP Loan in the amount of $27,000 from a potential
investor. The Debtor has received the entirety of the DIP Loan.
This Plan proposes to pay the Debtor's creditors from future
income.
General unsecured creditors holding allowed claims will receive
distributions. The Plan proposes to pay the general unsecured
creditors a pro-rata share of approximately $90,000 via monthly
payments beginning in month 28 of the plan and continuing through
month 63. This Plan also provides for the payment of certain
Secured Claims, Administrative Expense Claims and Priority Claims.
Class 6 consists of Priority Unsecured Claims. The Debtor currently
estimates this class to cosist of three claims totaling $7,988.47.
Priority Unsecured Claims shall be paid in accordance with Section
1129(a)(9)(c) with the first payment due and payable on October 1,
2023. The Reorganized Debtor, in its sole discretion, will either
pay such Claims: (i) on the Effective Date; or (ii) when such taxes
become due and payable under the laws of the applicable taxing
jurisdiction; or (iii) in accordance with the Plan payments. This
class is not impaired and not entitled to vote.
Class 8 consists of General Unsecured Creditors. Allowed General
Unsecured Claims, including deficiency claims, shall receive a
pro-rata share of $90,000, which amount shall be paid in monthly
payments beginning in Month 28 of the Plan and ending in Month 60
according to the projections listed in the Plan payments set forth
on Exhibit A. Class 8 is impaired and entitled to vote.
Class 9 consists of Allowed Equity Interests in the Debtor. The
equity interest holders in Whitestone Brewery, LLC will retain
their interests in the Reorganized Debtor.
The Debtor, as a reorganized debtor, will retain all property of
the Estate. The retained property shall be used and employed by the
Debtor in the continuance of its business. The operating Debtor
shall fund the Plan payments to Creditors from: 1) the recovery of
approximately $19,500 in tenant improvements from the landlord for
the Liberty Hill location; 2) disposable income derived from future
business operations; and 3) acquiring a subtenant for the Liberty
Hill location. Based upon the projection of profits from Debtor's
business operations, the Debtor will have sufficient funds to use
for payments to Creditors after Confirmation of the Debtor's plan.
A full-text copy of the Subchapter V Plan dated August 3, 2023 is
available at https://urlcurt.com/u?l=uEIB1w from PacerMonitor.com
at no charge.
Counsel for Debtor:
Todd Headden, Esq.
Hayward PLLC
901 MoPac Expressway South
Building 1, Suite 300
Austin, TX 78746
Phone: (737) 881-7100
Email: theadden@haywardfirm.com
About Whitestone Brewery
Whitestone Brewery, LLC, operates in the beverage manufacturing
industry. The company is based in Cedar Park, Texas.
Whitestone Brewery sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. W.D. Texas Case No. 23-10325) on May 5,
2023. In the petition signed by Ryan Anglen, owner, the Debtor
disclosed up to $1 million in assets and up to $10 million in
liabilities.
Charlie Shelton, Esq., at Hayward PLLC, represents the Debtor as
legal counsel.
WYCKOFF EQUITIES: Case Summary & 13 Unsecured Creditors
-------------------------------------------------------
Debtor: Wyckoff Equities LLC
4 Sycamore Avenue
Ho Ho Kus, NJ 07423
Business Description: The Debtor is part of the restaurant
industry.
Chapter 11 Petition Date: August 9, 2023
Court: United States Bankruptcy Court
District of New Jersey
Case No.: 23-16874
Debtor's Counsel: Daniel M. Eliades, Esq.
K&L GATES LLP
One Newark Center, 10th Floor
Newark, NJ 07102
Tel: 973-848-4018
Fax: 973-848-4001
Email: daniel.eliades@klgates.com
Estimated Assets: $100,000 to $500,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Albert Franco as managing member.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 13 unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/LBKOZFA/Wyckoff_Equities_LLC__njbke-23-16874__0001.0.pdf?mcid=tGE4TAMA
YELLOW CORP: Apollo Loan Carries 17% Interest Rate
--------------------------------------------------
Jonathan Randles of Bloomberg Law reports that Yellow Corp.'s
last-gasp loan from creditors led by Apollo Global Management Inc.
buys the company time to sell off its rigs and terminals -- but the
$142.5 million won't come cheap for the failed trucker.
The new bankruptcy financing will carry an interest rate of 17%,
reflecting the high risk of lending to a company that's already
collapsed under debts it can no longer pay. It also comes with a
$7 million fee, which could jump as high as $32 million if the
bankruptcy drags on for months.
The Debtors entered their chapter 11 cases with only $39 million of
liquidity on their balance sheet -- an amount insufficient to fund
the Debtors' wind-down efforts, sale process, and the limited
operations the Debtors must maintain to maximize the value of their
estates.
Accordingly, the Debtors have negotiated a secured super-priority
debtor-in-possession credit agreement in order to obtain ample
liquidity to administer a value-maximizing chapter 11 process.
The Debtors say the DIP facility from the Prepetition B-2 Lenders
represents the best possible debtor-in-possession financing
facility that the Debtors were able to obtain. The terms of the
DIP Facility leave open the possibility for third parties, if they
have not yet come forward but wish to, to present competing offers
for replacement postpetition financing.
The DIP Facility is a $142.5 million new-money senior secured
super-priority debtor-in-possession facility (or approximately $644
million factoring in the Roll-Up Amount) provided by certain of the
Debtors' prepetition term lenders (in their capacity as lenders
under the Prepetition B-2 Term Loan Credit Agreement), under that
certain Amended and Restated Credit Agreement, dated as of Sept.
11, 2019, and amended and restated on April 7, 2020, July 7, 2020,
and July 7, 2023 (but effective as of June 30, 2023) (the
"Prepetition B-2 Credit Agreement"), among Yellow Corporation and
certain of its subsidiaries, as guarantors, and Alter Domus
Products Corp. (f/k/a Cortland Products Corp.), as administrative
agent and collateral agent.
About Yellow Corporation
Yellow Corporation -- www.myyellow.com -- operates logistics and
less-than-truckload (LTL) networks in North America, providing
customers with regional, national, and international shipping
services throughout. Yellow's principal office is in Nashville,
Tenn., and is the holding company for a portfolio of LTL brands
including Holland, New Penn, Reddaway, and YRC Freight, as well as
the logistics company Yellow Logistics.
Yellow Corporation and 23 affiliates sought Chapter 11 protection
(Bankr. D. Del. Lead Case No. 23-11069) on Aug. 6, 2023.
Yellow Corp disclosed $2,152,200,000 in total assets against
$2,588,800,000 in total debt as of March 31, 2023.
The Hon. Craig T. Goldblatt is the case judge.
The Debtors tapped KIRKLAND & ELLIS LLP as bankruptcy counsel;
PACHULSLKI STANG ZIEHL JONES LLP as local bankruptcy counsel;
DUCERA PARTNERS LLC as investment banker; and ALVAREZ & MARSAL
NORTH AMERICA, LLC, as restructuring advisor. EPIQ BANKRUPTCY
SOLUTIONS LLC is the claims agent.
YELLOW CORP: Faces More Layoff Notice Claims After Chapter 11
-------------------------------------------------------------
Jennifer Bennett of Bloomberg Law reports that Yellow Corp. faces
new allegations that the mass layoff it undertook before filing a
Chapter 11 bankruptcy petition violated Illinois notice
requirements as well as federal employment law.
The trucking giant and its subsidiaries terminated approximately
30,000 workers without providing the 60 days of advance notice
required under the federal Worker Adjustment and Retraining
Notification Act or a similar Illinois law, according to the
complaint filed Monday, August 7, 2023.
The new suit's federal WARN Act allegations echo those included in
a complaint filed against Yellow and subsidiaries YRC Inc., USF
Holland LLC, New Penn Motor Express LLC, and USF Reddaway Inc. last
week. Yellow didn't immediately respond to a Tuesday, August 8,
2023, request for comment on the latest claims.
Yellow filed for bankruptcy August 6, 2023 and on Monday, August 7,
2023, announced plans to sell its warehouses and trucks in order
to repay creditors, including a pandemic-era loan of more than $700
million from the federal government.
The company blamed the International Brotherhood of Teamsters—the
representative for more than two thirds of the terminated Yellow
employees—for the bankruptcy. The union vehemently denied that
it's at fault and said workers "sacrificed billions" to keep the
company afloat in the face of a "dysfunctional, greedy C-suite."
Roger Keef worked for Yellow in Illinois for nearly 30 years until
losing his job as part of a mass layoff July 30,2023 according to
his would-be class suit. More than 100 other former Yellow
employees have also reached out to Sauder Schelkopf, one of the
firms representing Keef, the complaint says.
Keef says he learned through social media that July 30 would be his
last day with Yellow. The company didn't give him any written
notice of his impending termination before that day, the suit
says.
Approximately 400 other Yellow employees who worked at the same
Chicago facility as Keef lost their jobs at the same time, also
without the required 60-day notice, according to the complaint.
Wilmington, Del.-based Connor Bifferato also represents Keef.
Another group of former Yellow workers filed their own proposed
class action the same day as Keef in the same court. Their suit
alleges violations of the federal WARN Act only.
Margolis Edelstein, Gardner Firm PC, Lankenau & Miller LLP, and the
NLG Maurice and Jane Sugar Law Center for Economic and Social
Justice represent the workers in the second Monday suit.
The case is Keef v. Yellow Corp., Bankr. D. Del., No.
1:23-ap-50458, complaint filed 8/7/23.
About Yellow Corporation
Yellow Corporation -- www.myyellow.com -- operates logistics and
less-than-truckload (LTL) networks in North America, providing
customers with regional, national, and international shipping
services throughout. Yellow's principal office is in Nashville,
Tenn., and is the holding company for a portfolio of LTL brands
including Holland, New Penn, Reddaway, and YRC Freight, as well as
the logistics company Yellow Logistics.
Yellow Corporation and 23 affiliates sought Chapter 11 protection
(Bankr. D. Del. Lead Case No. 23-11069) on Aug. 6, 2023.
Yellow Corp disclosed $2,152,200,000 in total assets against
$2,588,800,000 in total debt as of March 31, 2023.
The Hon. Craig T. Goldblatt is the case judge.
The Debtors tapped KIRKLAND & ELLIS LLP as bankruptcy counsel;
PACHULSLKI STANG ZIEHL JONES LLP as local bankruptcy counsel;
DUCERA PARTNERS LLC as investment banker; and ALVAREZ & MARSAL
NORTH AMERICA, LLC, as restructuring advisor. EPIQ BANKRUPTCY
SOLUTIONS LLC is the claims agent.
YELLOW CORP: Moody's Cuts PDR to D-PD Following Bankruptcy Filing
-----------------------------------------------------------------
Moody's Investors Service downgraded Yellow Corporation's
Probability of Default Rating to D-PD from Ca-PD. Moody's affirmed
Yellow's Corporate Family Rating at Caa3 and senior secured term
loan rating at Caa1. The outlook remains negative. There was no
change to Yellow's SGL-4 Speculative Grade Liquidity Rating.
These actions follow the announcement that Yellow has filed a
petition for bankruptcy under Chapter 11 of the US Bankruptcy Code
on August 6, 2023. Subsequent to the actions, Moody's will withdraw
Yellow's ratings because of the company's bankruptcy filing.
Social and governance risks were key considerations in the rating
action. Social risks reflect Yellow's strained relationship with
the International Brotherhood of Teamsters union, which posed the
threat of a labor strike for a majority of Yellow's employees and
prevented the company from implementing planned restructuring
efforts. Further, governance factors include aggressive financial
strategy and risk management practices that resulted in high
financial leverage and the company's inability to address its 2024
debt maturities in a timely manner, which materially constrained
liquidity.
Affirmations:
Issuer: Yellow Corporation
Corporate Family Rating, Affirmed Caa3
Senior Secured 1st Lien Term Loan B-2, Affirmed Caa1
Downgrades:
Issuer: Yellow Corporation
Probability of Default Rating, Downgraded to D-PD from Ca-PD
Outlook Actions:
Issuer: Yellow Corporation
Outlook, Remains Negative
RATINGS RATIONALE
The downgrade of the PDR reflects Yellow's bankruptcy filing to
facilitate the company's planned operational wind-down. The Caa3
CFR and Caa1 rating on the senior secured B-2 term loan reflect
Moody's view for above average estimated recovery at default.
Yellow has received debtor-in-possession ("DIP") financing
commitments from certain of its B-2 term loan lenders. Proposed DIP
financing is to include approximately $142 million in new money
($60 million upfront) and a roll-up of outstanding B-2 term loan
commitments. The DIP financing is expected to provide Yellow with
necessary liquidity to facilitate an orderly sale of the company's
assets. Moody's estimates the value of the company's real estate
and equipment will provide material recovery value to secured
creditors. However, the liquidation of these assets will occur
during a weak freight environment, thus creating uncertainty around
potential value.
Yellow Corporation is a provider of over-the-road transportation
services and has one of the largest less-than-truckload ("LTL")
transportation networks in North America. It offers longer-haul LTL
shipments as well as regional, next-day and time-sensitive
services, with a total fleet of approximately 12,700 owned and
leased tractors.
The principal methodology used in these ratings was Surface
Transportation and Logistics published in December 2021.
[*] Commercial Ch. 11 Bankruptcy Filings Rose 71% Y/Y in July 2023
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Commercial Factor reports that there were 362 commercial Chapter 11
filings registered in July 2023, an increase of 71% from the 212
filings registered in July 2022, according to data provided by Epiq
Bankruptcy.
Overall commercial filings increased 21% to 1,961 in July, up from
the 1,621 commercial filings registered in July 2022. Small
business filings, captured as Subchapter V elections within Chapter
11, increased 61% to 153 in July 2023, up from 95 in July 2022.
There were 35,716 total bankruptcy filings in July 2023, a 15%
increase from the July 2022 total of 30,862. Individual bankruptcy
filings totaled 33,755 in July, registering a 16% increase from the
July 2022 filing total of 29,241. There were 19,476 Individual
Chapter 7 filings in July, a 17% increase vs. 16,645 in July 2022
and there were 14,229 individual Chapter 13 filings in July, a 13%
increase over the 12,547 filings in July 2022.
"The increase in commercial Chapter 11 filings in July 2023 is an
indication of the challenges businesses continue to face in these
dynamic times; however, the data also suggests the economic
recovery remains uneven and uncertain," Gregg Morin, vice president
of business development and revenue at Epiq Bankruptcy, said. "We
remain committed to sharing the evolving financial landscape's
impact on new bankruptcy filings and supporting the market with
bankruptcy data metrics."
The July 2023 filing totals registered a decrease when compared to
June. Commercial Chapter 11 filings registered the largest drop
from June, as the July total decreased 38% from the June Chapter 11
filing total of 582. The July commercial filing total represented
a 9% decrease from the June commercial filing total of 2,146.
Subchapter V elections within Chapter 11 decreased 22% from the 196
filed in June. July's total bankruptcy filings represented a 6%
decrease when compared to the 37,782 total filings recorded in
June. Total individual filings for July 2023 represented a 5%
decrease from the June filing total of 35,636. Both individual
Chapter 7 and Chapter 13 decreased 5% from June in July 2033.
"More distressed consumers and businesses are turning to the
financial lifeline of bankruptcy," Amy Quackenboss, executive
director of the American Bankruptcy Institute, said. "While
filings are still below levels seen prior to the pandemic, rising
interest rates, inflationary pricing and growing debt loads are
contributing to an increase in households and businesses seeking a
financial fresh start."
[^] BOOK REVIEW: Bailout: An Insider's Account of Bank Failures
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Bailout: An Insider's Account of Bank Failures and Rescues
Author: Irvine H. Sprague
Publisher: Beard Books
Soft cover: 321 pages
List Price: $34.95
Order your personal copy at
https://ecommerce.beardbooks.com/beardbooks/bailout.html
No one is more qualified to write a work on this subject of bank
bailouts. Holding the positions of chairman or director of the
Federal Deposit Insurance Corporation (FDIC) during the 1970s and
1980s, one of Sprague’s most important tasks was to close down
banks that were failing before they could cause wider damage. The
decades of the 1970s and ‘80s were times of high interest rates
for both depositors and borrowers. Rates for depositors at many
banks approached 10%, with rates for loans higher than that. The
fierce competition in the banking industry to offer the highest
rates to attract and keep depositors caused severe financial stress
to an unusually high number of banks. Having to pay out so much in
interest to stay competitive without taking in much greater
deposits was straining the cash and other assets of many banks.
The unprecedented high interest rates also had the effect of
reducing the number of loans banks were giving out. There were not
so many borrowers willing to take on loans with the high interest
rates. With the disruptions in their interrelated deposits and
loans, many banks began to engage in unprecedented and unfamiliar
financial activities, including investing in risky business
ventures. As well as having harmful effects on local economies,
the widely reported troubles of a number of well-known and
well-respected banks were having a harmful effect on the public’s
confidence in the entire banking industry.
Sprague along with other government and private-sector leaders in
the banking and financial field realized the problems with banks of
all sizes in all parts of the country had to be dealt with
decisively. Action had to be taken to restore public confidence,
as well as prevent widespread and long-lasting damage to the U. S.
economy. Sprague’s task was one of damage control largely on the
blind. The banking industry, the financial community, and the
government and the public had never faced such a large number of
bank failures at one time. The Home Loan Bank Board for the
savings-and-loans associations had allowed these institutions to
treat goodwill as an asset in an effort to shore up their
deteriorating financial situations with disastrous results for
their depositors and U. S. taxpayers. Such a desperate stratagem
only made the problems with the savings-and-loans worse. The banks
covered by the FDIC headed by Sprague were different from these
institutions. But the problems with their basic business of
deposits and loans were more or less the same. And the cause of the
problem was precisely the same: the high interest rates.
Faced with so many bank failures, Sprague and the government
officials, Congresspersons, and leaders he worked with realized
they could not deal effectively with every bank failure. So one of
their first tasks was to devise criteria for which failures they
would deal with. Their criteria formed what came to be known as
the “essentiality doctrine.” This was crucial for guidance in
dealing with the banking crisis, as well as for explanation and
justification to the public for the government agency’s decisions
and actions. Sprague’s tale is mainly a “chronicle [of] the
evolution of the essentiality doctrine, which derives from the
statutory authority for bank bailouts.” The doctrine was first
used in the bailout of the small Unity Bank of Boston and refined
in the bailouts of the Bank of the Commonwealth and First
Pennsylvania Bank. It then came into use for the multi-billion
dollar bailout of the Continental Illinois National Bank and Trust
Company in the early 1980s. Continental’s failure came about
almost overnight by the “lightening-fast removal of large
deposits from around the world by electronic transfer.” This was
another of the unprecedented causes for the bank failures Sprague
had to deal with in the new, high-interest, world of banking in the
‘70s and ‘80s. The main part of the book is how the
essentiality doctrine was applied in the case of each of these four
banks, with the especially high-stakes bailout of Continental
having a section of its own.
Although stability and reliability have returned to the banking
industry with the return of modest and low interest rates in
following decades, Sprague’s recounting of the momentous
activities for damage control of bank failures for whatever reasons
still holds lessons for today. For bank failures inevitably occur
in any economic conditions; and in dealing with these promptly and
effectively in the ways pioneered by Sprague, the unfavorable
economic effects will be contained, and public confidence in the
banking system maintained.
As chairman or director of the FDIC for more than 11 years, Irvine
H. Sprague (1921-2004) handled 374 bank failures. He was a special
assistant to President Johnson, and has worked on economic issues
with other high government officials.
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
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then-ending.
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*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
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Randy Antoni, Jhonas Dampog, Marites Claro, Joy Agravante,
Rousel Elaine Tumanda, Joel Anthony G. Lopez, Psyche A. Castillon,
Ivy B. Magdadaro, Carlo Fernandez, Christopher G. Patalinghug, and
Peter A. Chapman, Editors.
Copyright 2023. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
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*** End of Transmission ***