/raid1/www/Hosts/bankrupt/TCR_Public/230814.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Monday, August 14, 2023, Vol. 27, No. 225
Headlines
111-121 E. CONGRESS: Unsecureds Will Get 50% of Claims in 60 Months
22 ELM RYE: Amends Secured Claims Pay Details
2ND CHANCE: Files Amendment to Disclosure Statement
A T MABRY: Seeks to Hire Motleys Industrial as Auctioneer
ACPRODUCTS HOLDINGS: $1.40BB Bank Debt Trades at 16% Discount
AGWAY FARM: Unsecureds Will Get 10% to 18% in Liquidating Plan
ALVOGEN PHARMA: S&P Affirms 'B-' ICR, Off CreditWatch Negative
AMC ENTERTAINMENT: $2BB Bank Debt Trades at 22% Discount
AMERICAN AIRLINES: Moody's Hikes CFR to B1, Outlook Remains Stable
AMERICAN SCREENING: Unsecureds to be Paid in Full in 12 Months
AMYRIS INC: Files Chapter 11 to Facilitate Restructuring
APPLOVIN CORP: Moody's Rates New $1.5BB First Lien Term Loan 'Ba3'
APPLOVIN CORP: S&P Rates New $1.5BB Term Loan B Due 2030 'BB-'
ATHENA MEDICAL: Trustee Gets OK to Hire Medical Billing Expert
ATLANTIC RADIO: Gets OK to Hire Seese P.A. as Legal Counsel
ATLAS CUSTOM: Amended Plan Confirmed by Judge
ATOM HOLDINGS: Chapter 15 Case Summary
BLUE RIBBON: $368MM Bank Debt Trades at 20% Discount
BOUQUET RESTAURANT: Wins Cash Collateral Access Thru Oct 3
BRON MEDIA: Chapter 15 Case Summary
BUFFALO NIAGARA: U.S. Trustee Unable to Appoint Committee
CANADA GOOSE: S&P Upgrades ICR to 'BB-' on Forecasted Revenue
CAPITAL REGION MEDICAL: Moody's Raises Revenue Bond Rating to Ba1
CELL-NIQUE CORPORATION: Voluntary Chapter 11 Case Summary
CENTERPOINT PRODUCTIONS: Case Summary & 20 Top Unsecured Creditors
CENTERPOINTE HOTELS: Unsecureds' Recovery "Unknown" in Plan
CHAPIN CENTER: September 14 Bid Deadline for Nursing Facility
CLAROS MORTGAGE: S&P Downgrades ICR to 'B' on Decline in Liquidity
CLUBHOUSE MEDIA: Incurs $360K Net Loss in Second Quarter
COLONY DONKEY: Court OKs Cash Collateral Access on Final Basis
CONDOR INVERSIONES: Voluntary Chapter 11 Case Summary
CONVERGINT TECHNOLOGY: S&P Cuts Sec. 1st-Lien Debt Rating to 'B-'
CREATING SCHOLARS: Case Summary & 20 Largest Unsecured Creditors
CS LEE: Court OKs Interim Cash Collateral Access
CYXTERA DC: $100MM Bank Debt Trades at 42% Discount
CYXTERA TECHNOLOGIES: Taps Deloitte as Tax Services Provider
DIEBOLD NIXDORF DUTCH: Chapter 15 Case Summary
DIFFUSION PHARMACEUTICALS: Incurs $2.1M Net Loss in Second Quarter
DREAM FINDERS: Fitch Assigns First Time 'BB-' LongTerm IDR
DYNAMIC TECHNOLOGIES: Chapter 15 Case Summary
EARL FREDDY INVEST: Case Summary & Two Unsecured Creditors
ELEVATE TEXTILES: S&P Assigns 'B-' ICR, Outlook Negative
ENERGY PLUS: Unsecureds Will Get 100% of Claims in 60 Months
ESJ TOWERS: Florence Cohen Steps Down as Committee Member
EXIGENT LANDSCAPING: Seeks Cash Collateral Access
FINTHRIVE SOFTWARE: $460MM Bank Debt Trades at 33% Discount
GEOTEL INVESTMENTS: Seeks to Hire Holmes Lawyer as Counsel
GLDEX LLC: Voluntary Chapter 11 Case Summary
GOLYAN ENTERPRISES: Files Amendment to Disclosure Statement
GOTO GROUP: $2.25BB Bank Debt Trades at 34% Discount
GUARDIAN FUND: Andronico Steps Down as Committee Member
HARD ROCK NORTHERN: Fitch Affirms 'B' IDR, Outlook Stable
HEART O'GOLD: Court OKs Cash Collateral Access Thru Sept 1
HICKAM HARBOR: Case Summary & 16 Unsecured Creditors
HORNBLOWER SUB: $349.4MM Bank Debt Trades at 48% Discount
HOWARD HUGHES: S&P Cuts ICR to 'B' on Deteriorating Credit Metrics
HUGHES SATELLITE: Moody's Puts 'Ba3' CFR on Review for Downgrade
I.C. ELECTRIC: Case Summary & 20 Largest Unsecured Creditors
IMV INC: Chapter 15 Case Summary
INMET MINING: Taps Dean Dorton Allen Ford as Accountant
INSPIREMD INC: Incurs $5.1 Million Net Loss in Second Quarter
INVENERGY THERMAL: S&P Rates $325MM Term Loan B 'BB-'
ION CORPORATE: S&P Affirms 'B' ICR, Outlook Stable
IQOR US INC: $300MM Bank Debt Trades at 31% Discount
JLK CONSTRUCTION: Seeks Cash Collateral Access Thru April 2024
JOHNSON'S ALL-SCAPES: Seeks to Hire Tyler as Accountant
KOSMOS ENERGY: S&P Alters Outlook to Stable, Affirms 'B' ICR
LERETA LLC: $250MM Bank Debt Trades at 18% Discount
LIGHT AND WONDER: Moody's Rates New $550MM Unsecured Notes 'B3'
LIGHTHOUSE IMMERSIVE: Chapter 15 Case Summary
LIVIE AND LUCA: Case Summary & 20 Largest Unsecured Creditors
LUMEN TECHNOLOGIES: $5BB Bank Debt Trades at 27% Discount
MARINER HEALTH: Unsecureds Will Get 80% or 5% in Joint Plan
MEDIAMATH HOLDINGS: Court OKs Interim Cash Collateral Access
MERCY HOSPITAL: Court OKs Interim Cash Collateral Access
MERIDIAN RESTAURANTS: Gets OK to Expand Scope of Keen's Services
MICHAEL KORS: Moody's Puts 'Ba1' CFR on Review for Upgrade
MONROE GARDENS: Amends Peoples Bank & Sanitary Board Secured Claims
MXP OPERATING: Case Summary & 20 Largest Unsecured Creditors
NANTASKET MANAGEMENT: Case Summary & Three Unsecured Creditors
NEXTPOINT FINANCIAL: Chapter 15 Case Summary
ONE CALL CORP: $700MM Bank Debt Trades at 21% Discount
OPEN COURT: Files Emergency Bid to Use Cash Collateral
ORIGINAL TRADERS: Chapter 15 Case Summary
RAP OPERATING: Unsecureds Will Get $100 per Month for 60 Months
RAW INDULGENCE: Unsecureds Will Get 6.6% of Claims over 3 Years
RECESS HOLDINGS: Moody's Affirms B2 CFR & Rates New Term Loan B2
RESHAPE LIFESCIENCES: Incurs $3.5 Million Net Loss in 2nd Quarter
RINGCENTRAL INC: Moody's Assigns First Time Ba3 Corp Family Rating
SA HOSPITAL: Case Summary & 20 Largest Unsecured Creditors
SALEM MEDIA: Posts $7.1 Million Net Loss in Second Quarter
SAN BENITO HEALTH: Chapter 9 Case Summary & 20 Unsecured Creditors
SAVESOLAR CORP: CohnReznick Capital Advises on Asset Sale
SHERLOCK STORAGE: Files Emergency Bid to Use Cash Collateral
SIKES CONCRETE: Voluntary Chapter 11 Case Summary
SINCLAIR TELEVISION: $740MM Bank Debt Trades at 21% Discount
SINCLAIR TELEVISION: $750MM Bank Debt Trades at 25% Discount
SINTX TECHNOLOGIES: Incurs $2.5 Million Net Loss in Second Quarter
TALLGRASS ENERGY: Fitch Affirms 'BB-' LongTerm IDR, Outlook Stable
TAP ROCK: Moody's Withdraws 'B2' CFR Following Debt Repayment
TEAM HEALTH: $1.59BB Bank Debt Trades at 28% Discount
TECHNICAL COMMUNICATIONS: Posts $466K Net Loss in Third Quarter
TECHNICOLOR CREATIVE: $42.1MM Bank Debt Trades at 16% Discount
TRANSDIGM INC: Moody's Rates New Senior Secured Notes 'Ba3'
TRIPADVISOR INC: Moody's Affirms 'Ba3' CFR, Outlook Stable
UNIVERSAL DOOR: Amends Plan to Include Priority Tax Claims Pay
VALARIS LTD: Fitch Lowers 2030 2nd Lien Secured Notes to 'B+'
VANTAGE TRAVEL: Two Creditors Out as Committee Members
VIRGIN PULSE: $185MM Bank Debt Trades at 16% Discount
WWEX UNI TOPCO: $150MM Bank Debt Trades at 17% Discount
WWMAJ SYSTEMS: Seeks to Hire Amy L. Taylor as Accountant
YELLOW CORP: Seeks $142.5MM New Money DIP Loan from Alter Domus
ZAYO GROUP: $4.96BB Bank Debt Trades at 20% Discount
ZAYO GROUP: $750MM Bank Debt Trades at 19% Discount
[^] BOND PRICING: For the Week from August 7 to 11, 2023
[^] HEARTLAND TRI-STATE: FDIC Named as Receiver
*********
111-121 E. CONGRESS: Unsecureds Will Get 50% of Claims in 60 Months
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111-121 E. Congress, LLC, filed with the U.S. Bankruptcy Court for
the District of Arizona a Disclosure Statement for Plan of
Reorganization.
The Debtor is an Arizona limited liability company in existence
since 2000. Its principal business is the ownership of two
commercial properties: (Pima County tax ID 117- 12-1240 and Pima
County tax ID 117-12-1250) in downtown Tucson used to operate a
nightclub.
A judgment in favor of Debtor's prior tenant, Congress Street
Clubs, LLC ("Congress Street Clubs"), in the amount of
$2,170,641.02, entered on or about August 11, 2022, in the Arizona
Superior Court in Pima County under Case No. C20204097 (the
"Judgment"), regarding an incomplete force majeure clause is what
ultimately led to the bankruptcy filing.
The Judgment is currently on appeal to the Arizona Court of
Appeals, Case No. 2 CACV 2023-0007 (the "Appeal"). However, Debtor
was unable to post a supersedeas bond in order to obtain a stay
pending appeal and filed this instant bankruptcy case prior to a
scheduled sheriff's sale of Debtor's real property that was set to
occur in May, 2023. The Appeal is currently pending and briefing is
expected to be completed in late October 2023.
This is a reorganization plan. In other words, the Proponent seeks
to accomplish payments under the Plan by using its post
confirmation earnings from its rental property.
General unsecured claims are uncollateralized claims not entitled
to priority under Code Section 507(a). Debtor's general unsecured
claims include Udall Law Firm in the amount of $66,029.98 and
Professional Credit Service in the amount of $288.23. Debtor will
pay 50% of claim amount over 60 months. This Class is impaired.
Equity interest holder David Nichols shall retain his interest,
The Plan will be funded by post-confirmation revenue of the Debtor,
cash on hand, and capital contributions.
A full-text copy of the Disclosure Statement dated August 6, 2023
is available at https://urlcurt.com/u?l=Yynt9p from
PacerMonitor.com at no charge.
Attorneys for Debtor:
Jody A. Corrales, Esq.
DeConcini McDonald Yetwin & Lacy, PC
2525 East Broadway Blvd., Suite 200
Tucson, AZ 85716
Telephone: (520) 322-5000
Facsimile: (520) 322-5585
Email: jcorrales@dmyl.com
About 111-121 E Congress
111-121 E. Congress, LLC, owns real estate located at 111-121 E.
Congress Street, Tucson, Arizona. It filed a voluntary petition
for Chapter 11 protection (Bankr. D. Ariz. Case No. 23-02230) on
April 7, 2023, with up to $10 million in both assets and
liabilities.
The Debtor asserted it was eligible to file a subchapter V
bankruptcy case. On May 9, 2023, the Bankruptcy Court held a
hearing to determine whether the Debtor was single asset real
estate as defined in 11 U.S.C. section 101(51B). The Court
determined that the Debtor is single asset real estate, and unable
to proceed under Subchapter V or as a small business debtor.
Judge Scott H. Gan oversees the case.
Jody A. Corrales, Esq., at DeConcini McDonald Yetwin & Lacy, P.C.
and Shein Phanse Adkins, P.C. serve as the Debtor's bankruptcy
counsel and special counsel, respectively.
22 ELM RYE: Amends Secured Claims Pay Details
---------------------------------------------
22 Elm Rye, Inc., a/k/a Meso Restaurant, and Dane Asermely
submitted an Amended Disclosure Statement accompanying Joint
Amended Plan of Reorganization dated August 7, 2023.
The Plan is designed as a mechanism for the reorganization of
Debtor. The Debtor offers Mediterranean cuisine for its customers
in its 5,100 square foot, upscale location in Rye, New York (the
"Restaurant").
On August 16, 2022, the Debtor filed a chapter 11 petition, which
stayed landlord action to evict Debtor and all other creditor
action to collect debts from Debtor.
In the month of July, Alan Schoening, the president and a director
of the Debtor resigned leaving Dane Asermely as the only officer of
the Debtor. Asermely has joined the Debtor to file a Joint Plan as
a proponent of the Plan.
Class 2 consists of Allowed Secured Claims. There are two secured
claims with one based upon a DTF tax warrant and the other for the
purchase of the POS System. The DTF Allowed Secured Claim shall be
paid over a period of approximately 48 months from the Effective
Date beginning on or about the Effective Date. Tax claims of this
nature must be paid within five years of the Petition Date. DTF has
agreed to lower the statutory tax rate from 14.5% to 9% on the
Allowed Secured Claim and has agreed that all penalties will be
treated as Class 3 general unsecured claims. The Allowed Secured
Claim of Micros/Shift 4 will be paid over 60 months from the
effective date at 6% interest. Any amounts due and owing at the end
of the payment term, shall be payable at that time.
DTF will retain its liens to the same extent and priority as
existed on the Petition Date. Failure by the Reorganized Debtor to
make a payment pursuant to this Plan shall be an Event of Default.
If the Reorganized Debtor fails to cure an Event of Default within
14 days of written notice to the Reorganized Debtor pursuant to
Article VII 9 of the Plan, then DTF may take action in accordance
with non-bankruptcy law to collect the balance of its claim without
further order of the bankruptcy court. All payments required to be
made to DTF pursuant to this Plan shall be sent to counsel for DTF
at the following Address: Enid Nagler Stuart, Assistant Attorney
General, 28 Liberty Street, 17th Floor, New York, NY 10005.
Like in the prior iteration of the Plan, Allowed Class 3 Unsecured
Claims shall be paid at the dividend rate of 10% over a period of
five years in equal monthly payments without interest.
On the Effective Date, all class 4 Equity Interests shall be
cancelled without any distribution on account of such Equity
Interests, and new interests in the Reorganized Debtor will be
issued 100% to Lucid Hospitality Group LLC formed by Dane Asermely,
the Joint Proponent of the Plan, which will contribute $150,000 to
the Debtor and manage the Debtor post confirmation (hereinafter the
"New Management Group").
A full-text copy of the Amended Disclosure Statement dated August
7, 2023 is available at https://urlcurt.com/u?l=0eYoQk from
PacerMonitor.com at no charge.
Attorneys for Debtor:
H. Bruce Bronson, Esq.
Bronson Law Offices, P.C.
480 Mamaroneck Ave.
Harrison, NY 10528
Tel: (914) 269-2530
Fax: )888) 908-6906
Email: hbbronson@bronsonlaw.net
Counsel for Dane Asermely:
LAW OFFICE OF CHARLES A. HIGGS
Charles A. Higgs, Esq.
2 Depot Plaza, Ste. 4
Bedford Hills, NY 10507
917-673-3768 (tel.)
Email: Charles@FreshStartesq.com
About 22 Elm Rye Inc.
22 Elm Rye Inc. is a restaurant operator specializing in
Mediterranean cuisine. The Debtor sought protection under Chapter
11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 22-22544)
on August 16, 2022. In the petition signed by Alan Schoening,
president, the Debtor disclosed $1,318,000 in total assets and
$2,938,497 in total liabilities.
Judge Sean H. Lane oversees the case.
H. Bruce Bronson, Esq., at Bronson Law Office, P.C. is the Debtor's
counsel.
2ND CHANCE: Files Amendment to Disclosure Statement
---------------------------------------------------
2nd Chance Investment Group, LLC, submitted a First Amended
Disclosure Statement describing Chapter 11 Liquidating Plan dated
August 8, 2023.
The Debtor is liquidating all real property of the Estate that will
generate a return.
An order employing Bewley, Lassleben & Miller to aid the Debtor in
handling tenancy issues was entered on June 12, 2023. Bewley's
current focus is the tenancy at 37472 Yorkshire Dr., Palmdale, CA
93550 in what is expected to be an agreed upon stipulation for
entry of judgment and possession whereby the occupant vacates the
property. The tenants of 37472 Yorkshire Dr., Palmdale, CA 93550
agreed in principle to vacate on or before Sept. 5, 2023. If the
tenant moves out as agreed, the Debtor will abate the past due rent
and holdover damages of approximately $9,000.
The Debtor is preparing sale motions for four parcels of real
property, including 37472 Yorkshire Dr., Palmdale, CA 93550; 3025
Glenview Avenue, San Bernardino, CA 92407, 8607 Custer Road SW,
Lakewood, WA 98499, and 3122 Emery Lane, Robbins, IL, 60472. The
sale of 3025 Glenview Avenue, San Bernardino, CA 92407 will resolve
the pending objection filed by Forethought Life Insurance Company
dated May 18, 2023. To the extent that 3025 Glenview Avenue, San
Bernardino, CA 92407 is not sold prior to Plan confirmation, then
the Debtor proposes to incorporate Exhibit 8 to treat Forethought
Life Insurance Company's claim.
This Plan is a liquidating Plan. On the Effective Date, the Debtor
shall create and enter into a liquidating trust (the "Liquidating
Trust") for the benefit of creditors, as set forth in the Plan. The
Liquidating Trust shall be a creditors' liquidating trust for all
purposes, including Treasury Regulations Section 301.77701 4(d),
and is intended to be treated as a grantor trust for federal income
tax purposes.
The Liquidating Trust will be organized for the purpose of
collecting, distributing, liquidating, and otherwise disposing of
all of the funds, property, claims, rights, and causes of action of
the Debtor and its Estate, which is assigned to the Liquidating
Trustee and the Committee. After the Liquidating Trust is created
and takes ownership and assignment of all funds, property, claims,
rights, and causes of action of the Debtor and its Estate, the
Debtor shall dissolve or otherwise wind down pursuant to applicable
law and shall not conduct any further business or activities.
Class 4 consists of General Unsecured Claims. General Unsecured
Claims have been estimated at $10,824,685.55. The exact amount of
Class 4 Allowed Claims will not be known until the claims process
has been completed.
Each holder of an allowed Class 4 claim will receive a pro rata
share of the unencumbered cash remaining in the Liquidating Trust
after the payment of all other Allowed Claims such as
administrative claims (including the fees and costs of the
Liquidating Trust), and all allowed priority claims, which are not
classified, including priority tax claims. The Debtor projects that
General Unsecured Claims will be paid in 2023-2026 from funds
received the sale of real property and assets of the bankruptcy
estate.
The Debtor characterizes Claims 26, 27, 28, 29, 30, 31, 32, 33, 34,
35, 36, 37, 33, 35, and 49 as insider claims because of the
sufficiently close relationship that the claimants had with the
Debtor and the degree of control that the insiders held over the
Debtor. Specifically, wire transfers to the insiders occurred due
to the pressure, influence, and control that they had over the
Debtor. The parties listed as insiders are either members of
Precision Realty Fund LLC or have a sufficiently close relationship
with Precision Realty Fund LLC and the Debtor to improperly
influence the Debtor.
The Debtor may bring forth an adversary proceeding against
Precision Realty Fund, LLC, based upon undisputed pre-petition
transfers of $375,000 to Precision Realty Fund LLC and $100,000 to
Schorr Law Group. Pre petition wire transfers from the Debtor to
Precision Realty Fund LLC are listed on the Statement of Financial
Affairs on July 7, 2022, July 21, 2022, and August 19, 2022. There
is also another transfer listed on the Statement of Financial
Affairs, question 13, to Schorr Law Group, who represents Precision
Realty Fund LLC in pre-petition state court litigation. Additional
funds were transmitted by the Debtor to Precision Realty Fund LLC.
The Debtor's bankruptcy petition was filed on December 21, 2022,
meaning that the transfers are subject to Section 547 of the
Bankruptcy Code if they are determined to be insider claims.
Sajan Bhakta and Ram Bhakta filed an objection to the Debtor's
original disclosure statement, representing and arguing that they
were not insiders of the debtor and that the Debtor had not
presented evidence that they are insiders. The general argument by
Sajan Bhakta and Ram Bhakta that they are not insiders is that the
payments to them were not based on any affinity between the Debtor
and them, but rather regular transactions occurring in the ordinary
course of business.
On the Effective Date, a Liquidating Trust Agreement in a form
approved by the Bankruptcy Court at the Plan Confirmation Hearing
shall be executed, and all other necessary steps shall be taken to
establish a Liquidating Trust and the beneficial interests therein,
which shall be for the benefit of all creditors entitled to receive
distributions under the Plan from the Liquidating Trust.
The Liquidating Trust simplifies the Debtor's liquidation efforts
and maximizes a return to all creditors. The Committee will
maintain its power, secured creditors will be paid from the sale of
escrow, and unsecured creditors will be paid per the terms of Class
4 in the Plan. The administrative fees are vastly reduced, whereby
David M. Goodrich is employed at half of his normal rate, while
attorneys for the Debtor in Possession are employed at a
significantly lower than market rate for similarly situated
professionals in in the area.
A full-text copy of the First Amended Disclosure Statement dated
August 8, 2023 is available at https://urlcurt.com/u?l=cecIMJ from
PacerMonitor.com at no charge.
Attorneys for the Debtor:
Andy C. Warshaw, Esq.
FINANCIAL RELIEF LAW CENTER, APC
1200 Main St., Suite C
Irvine, CA 92614
Tel: (714) 442-3319
Fax: (714) 361-5380
E-mail: awarshaw@bwlawcenter.com
About 2ND Chance Investment Group
2ND Chance Investment Group, LLC owns in fee simple title 13 real
properties located in various locations in California and
Washington having an aggregate value of $7.02 million.
2ND Chance Investment Group sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. C.D. Calif. Case No. 22-12142) on
Dec. 21, 2022. In the petition signed by its managing member,
Rayshon A. Foster, the Debtor disclosed $7,221,261 in assets and
$11,002,949 in liabilities.
Judge Scott C. Clarkson oversees the case.
Amanda G. Billyard, Esq., at Financial Relief Law Center, APC and
Grobstein Teeple, LLP serve as the Debtor's legal counsel and
financial advisor, respectively.
The U.S. Trustee for Region 16 appointed an official committee to
represent unsecured creditors in the Debtor's Chapter 11 case. The
committee is represented by Goe Forsythe & Hodges, LLP.
A T MABRY: Seeks to Hire Motleys Industrial as Auctioneer
---------------------------------------------------------
A T Mabry Trucking, Inc., seeks approval from the U.S. Bankruptcy
Court for the Eastern District of Virginia to hire Motleys
Industrial, a division of Motley's Auctions, Inc.
The Debtor requires the services of the firm to sell at auction or
otherwise its personal property. The property includes vehicles,
which the Debtor uses to operate its business.
As disclosed in court filings, Motleys is a "disinterested person"
pursuant to Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Motleys Industrial
dba Motleys Asset Disposition Group
3600 Deepwater Terminal Road
Richmond, VA 23234
Phone: (804) 232-3300
Fax: (804) 232-3301
Email: info@motleys.com
About A T Mabry
A T Mabry Trucking, Inc., hauls municipal refuse using specialized
trailers as a subcontractor for businesses that have the primary
contracts with municipalities.
A T Mabry sought protection for relief under Chapter 11 of the
Bankruptcy Code (Bankr. E.D. Va. Case No. 22-33248) on Nov. 14,
2022, with $100,001 to $500,000 in both assets and liabilities.
Jennifer M. McLemore, Esq., at Williams Mullen has been appointed
as Subchapter V trustee.
Judge Keith L. Phillips oversees the case.
Brett Alexander Zwerdling, Esq., at Zwerdling, Oppleman & Adams, is
the Debtor's legal counsel.
ACPRODUCTS HOLDINGS: $1.40BB Bank Debt Trades at 16% Discount
-------------------------------------------------------------
Participations in a syndicated loan under which ACProducts Holdings
Inc is a borrower were trading in the secondary market around 84.4
cents-on-the-dollar during the week ended Friday, August 11, 2023,
according to Bloomberg's Evaluated Pricing service data.
The $1.40 billion facility is a Term loan that is scheduled to
mature on May 17, 2028. The amount is fully drawn and
outstanding.
ACProducts Holdings, Inc. manufactures cabinets. The Company offers
single and multi-family home builders, distributors, home centers,
cabinetry, and other related products.
AGWAY FARM: Unsecureds Will Get 10% to 18% in Liquidating Plan
--------------------------------------------------------------
Agway Farm & Home Supply, LLC, and the Official Committee of
Unsecured Creditors filed with the U.S. Bankruptcy Court for the
District of Delaware a Combined Disclosure Statement and Joint Plan
of Liquidation dated August 7, 2023.
Prepetition, the Debtor operated as a wholesale product
distribution company across six different major categories: (1)
seasonal home & hardware; (2) farm products; (3) lawn & garden; (4)
bird food & supplies; (5) pet food & supplies; and (6) animal
health needs.
The Debtor also licensed the right for dealers to utilize the
"Agway" brand and produced revenue from freight costs. With its
headquarters in Richmond, Virginia and two warehouses and
distribution centers in Cloverdale, Virginia and Westfield,
Massachusetts, the Debtor distributed products to a broad network
of independent retail stores along the east coast.
The Debtor's goals in the chapter 11 case have been to sell
substantially all of its assets, complete the wind-down of its
business, collect on outstanding receivables, address pending
claims, including litigation claims, and make distributions to
creditors as efficiently as possible through the liquidating Plan.
The Committee, the co-proponent of the Plan with the Debtor,
supports the confirmation of the Plan.
The Plan provides for a Plan Administrator to liquidate, collect,
sell, or otherwise dispose of the remaining assets of the Debtor's
bankruptcy estate (the "Estate") (including, without limitation,
certain causes of action), if and to the extent such assets were
not previously monetized to Cash or otherwise transferred or
disposed of by the Debtor prior to the Effective Date, and then to
distribute all net proceeds to creditors generally in accordance
with the priority scheme under the Bankruptcy Code, subject to the
terms of the Plan. In a Chapter 7 proceeding, absent such consent,
the recovery of general unsecured creditors would be diminished.
Following the various sales of its assets, the Debtor focused
principally on efficiently winding down its businesses, preserving
Cash held in the Estate, and monetizing its remaining Assets. The
remaining Assets include, among other things, Cash, certain
deposits, prepayments, credits and refunds, insurance policies or
rights to proceeds thereof, and certain Causes of Action.
This Combined Plan and Disclosure Statement provides for the
Assets, to the extent not already liquidated, to be liquidated over
time and the proceeds thereof to be distributed to Holders of
Allowed Claims in accordance with the terms of the Plan and the
treatment of Allowed Claims. The Plan Administrator will effect
such liquidation and distributions. The Post-Effective Date Debtor
will be dissolved as soon as practicable after the Effective Date.
Class 3 consists of Unsecured Claims. In exchange for full and
final satisfaction of each Allowed Unsecured Claim, each Holder of
an Allowed Unsecured Claim in Class 3 shall receive a Pro Rata
share of Available Cash after the payment of Professional Fee
Claims, Administrative Claims, Priority Tax Claims, Priority
Non-Tax Claims, Other Secured Claims, and expenses related to the
wind down of the Debtor, as determined by the Plan Administrator.
The allowed unsecured claims total $46 million. This Class will
receive a distribution of 10% to 18% of their allowed claims. This
Class is impaired.
There shall be no Distribution on account of Class 4 Interests.
Upon the Effective Date, all Interests will be deemed cancelled and
will cease to exist.
Available Cash shall be used to fund distributions to Creditors
(including holders of Allowed Administrative Claims, Priority Tax
Claims, Priority Non-Tax Claims, Other Secured Claims and Unsecured
Claims) or other payments to be made pursuant to or otherwise
consistent with the Plan. On the Effective Date, the Debtor expects
to have approximately $6 million Cash on hand.
A full-text copy of the Combined Disclosure Statement and Plan
dated August 7, 2023 is available at https://urlcurt.com/u?l=lk3jbh
from Stretto, Inc., claims agent.
Counsel for the Debtor:
Jeffrey R. Waxman, Esq.
Brya M. Keilson, Esq.
Morris James, LLP
500 Delaware Avenue, Suite 1500
Wilmington, DE 19801
Telephone: (302) 888-6800
Facsimile: (302) 571-1750
Email: jwaxman@morris.james.com
bkeilson@morrisjames.com
-and-
Alan J. Friedman, Esq.
Shulman Bastian Friedman & Bui LLP
100 Spectrum Center Drive, Suite 600
Irvine, CA 92618
Tel: (949) 427-1654
Fax: (949) 340-3000
Email: afriedman@shulmanbastian.com
About Agway Farm & Home Supply
Agway Farm & Home Supply LLC -- https://www.agway.com/ -- is a
one-stop shop for lawn, garden, bird, pet and farm products. It is
based in Richmond, Va.
Agway Farm & Home Supply sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. D. Del. Case No. 22-10602) on July 6,
2022, listing $10 million to $50 million in both assets and
liabilities. Jay Quickel, president and chief executive officer of
Agway Farm & Home Supply, signed the petition.
Judge J. Kate Stickles oversees the case.
The Debtor tapped Shulman Bastian Friedman & Bui, LLP as lead
bankruptcy counsel; Morris James, LLP as local Delaware counsel;
Wilson Elser Moskowitz Edelman & Dicker LLP as special litigation
counsel; and Focus Management Group USA, Inc. as financial advisor.
Stretto, Inc. is the claims and noticing agent and administrative
advisor.
The official committee of unsecured creditors appointed in the case
selected Pachulski Stang Ziehl & Jones as legal counsel; FTI
Consulting, Inc. as financial advisor; and Hilco IP Services, LLC
as intellectual property marketing agent.
ALVOGEN PHARMA: S&P Affirms 'B-' ICR, Off CreditWatch Negative
--------------------------------------------------------------
S&P Global Ratings affirmed its 'B-' issuer and issue-level ratings
on generic and branded drug company Alvogen Pharma US Inc. S&P also
removed all ratings from CreditWatch with negative implications,
where S&P placed them June 9, 2023.
The negative outlook reflects Alvogen's still elevated refinancing
risk, with high debt leverage (about 8x including preferred equity,
which S&P considers debt-like, as of June 30, 2023) and most of the
company's debt maturing in the first half of 2025, leaving little
room for underperformance relative to its base-case scenario.
S&P said, "With the extension of the ABL, we expect the company
will have sufficient liquidity through the end of 2024.The company
has about $164 million drawn on the ABL and additional borrowing
capacity of about $47 million, so the extension of the ABL maturity
from January 2024 to January 2025 significantly eases the company's
near-term liquidity position. We believe the company will be able
to meet its debt obligations for the $78 million owed in upcoming
principal payments on the nonextended portion of its term loan,
which matures in December 2023, even absent FDA approval of
rifaximin or a significant oseltamivir purchase for the Strategic
National Stockpile.
"Despite its improved financial performance in the first half of
2023, we continue to see elevated refinancing risks for Alvogen
given the still high debt leverage (about 8x) and uncertainty
regarding its pipeline. With the company's ABL and most of the
remaining $790 million extended term loan both maturing in the
first half of 2025, we view financing risk as still elevated.
"While the company is benefitting substantially from lenalidomide
(generic Revlimid) sales, we expect those to peak in 2025 and drop
significantly in 2026 when the agreements with Bristol Myers Squibb
end and the market opens fully to generic competition. Accordingly,
we believe refinancing risk in 2025 remains elevated."
Additionally, the company is attempting to gain approval to launch
a generic rifaximin for the single IBS-D indication through the
federal courts system and lawsuits against the FDA. If successful,
this would significantly improve financial performance over the
next few years, reducing debt leverage and refinancing concerns.
Conversely, unfavorable outcomes, particularly ones that could
delay a rifaximin launch until as late as 2029, would increase the
risk that its capital structure is unsustainable, and lenders could
be forced to accept terms less favorable than they were initially
promised.
Lenders have been supportive and optimistic about the company's
prospects, enabling the company to successfully extend its ABL
twice, extend over 90% of its term loan, and receive cash through a
preferred equity issuance over the last 18 months. However, we see
refinancing risk as elevated due to volatile credit markets,
uncertainty with Alvogen's pipeline, and a relatively narrow window
with which to access capital markets given about $1 billion of debt
maturing within the next two years.
The negative outlook reflects elevated refinancing risk given
Alvogen's high leverage, significant uncertainty around the
company's pipeline, and all the company's debt maturing within two
years, leaving little room for underperformance relative to our
base-case scenario.
S&P said, "We could lower our rating within the next 12 months if
the company's operational performance deteriorates or the prospects
of key pipeline products diminish to a point that we believe there
is a significant likelihood that the capital structure is
unsustainable.
"We could revise our outlook to stable over the next year if the
company receives approval for additional pipeline products,
including rifaximin, that generate significant improvement in
financial performance, supporting our expectation for sustained
generation of free cash flow."
AMC ENTERTAINMENT: $2BB Bank Debt Trades at 22% Discount
--------------------------------------------------------
Participations in a syndicated loan under which AMC Entertainment
Holdings Inc is a borrower were trading in the secondary market
around 78.3 cents-on-the-dollar during the week ended Friday,
August 11, 2023, according to Bloomberg's Evaluated Pricing service
data.
The $2 billion facility is a Term loan that is scheduled to mature
on April 22, 2026. About $1.92 billion of the loan is withdrawn
and outstanding.
AMC Entertainment Holdings, Inc. operates as a holding company. The
Company, through its subsidiaries, provides theatrical exhibition,
movie screening, food distribution, online ticket booking, and
other related services.
AMERICAN AIRLINES: Moody's Hikes CFR to B1, Outlook Remains Stable
------------------------------------------------------------------
Moody's Investors Service upgraded its ratings of American Airlines
Group Inc. ("Parent") and American Airlines, Inc. ("American"):
corporate family rating to B1 from B2, probability of default
rating to B1-PD from B2-PD, senior secured to Ba2 from Ba3 and
senior unsecured to B3 from Caa1. Moody's upgraded the senior
secured rating assigned to the term loan and notes issued by
AAdvantage Loyalty IP Ltd, to Ba1 from Ba2. All but four of the
ratings on the company's enhanced equipment trust certificates
("EETCs") were also upgraded. The speculative grade liquidity
rating was changed to SGL-1 from SGL-2. The rating outlook is
stable.
Upgrades:
Issuer: American Airlines Group Inc.
Corporate Family Rating, Upgraded to B1 from B2
Probability of Default Rating, Upgraded to B1-PD from B2-PD
Speculative Grade Liquidity Rating, Upgraded to SGL-1 from SGL-2
Backed Senior Unsecured Global Notes, Upgraded to B3 from Caa1
Issuer: AAdvantage Loyalty IP Ltd.
Backed Senior Secured 1st Lien Term Loan, Upgraded to Ba1 from
Ba2
Backed Senior Secured Global Notes, Upgraded to Ba1 from Ba2
Issuer: Pennsylvania Economic Dev. Fin. Auth.
Senior Unsecured Revenue Bonds, Upgraded to B3 from Caa1
Issuer: American Airlines, Inc.
Backed Senior Secured Term Loan B, Upgraded to Ba2 from Ba3
Backed Senior Secured Revolving Credit Facility, Upgraded to Ba2
from Ba3
Senior Secured Enhanced Equipment Trust Ser. 2016-3 Cl B, Upgraded
to Ba1 from Ba2
Senior Secured Enhanced Equipment Trust Ser. 2017-1 Cl B, Upgraded
to Ba1 from Ba2
Senior Secured Enhanced Equipment Trust Ser. 2016-1 Cl AA,
Upgraded to A3 from Baa1
Senior Secured Enhanced Equipment Trust Ser. 2019-1 Cl AA,
Upgraded to A3 from Baa1
Senior Secured Enhanced Equipment Trust Ser. 2019-1 Cl A, Upgraded
to Baa2 from Baa3
Senior Secured Enhanced Equipment Trust Ser. 2016-1 Cl B, Upgraded
to Ba2 from Ba3
Senior Secured Enhanced Equipment Trust Ser. 2017-2 Cl AA,
Upgraded to A3 from Baa1
Senior Secured Enhanced Equipment Trust Ser. 2016-2 Cl AA,
Upgraded to A3 from Baa1
Senior Secured Enhanced Equipment Trust Ser. 2017-2 Cl B, Upgraded
to Ba1 from Ba2
Senior Secured Enhanced Equipment Trust Ser. 2015-2 Cl AA,
Upgraded to A3 from Baa1
Senior Secured Enhanced Equipment Trust Ser. 2015-2 Cl B, Upgraded
to Ba2 from Ba3
Senior Secured Enhanced Equipment Trust Ser. 2016-3 Cl AA,
Upgraded to A3 from Baa1
Senior Secured Enhanced Equipment Trust Ser. 2017-1 Cl AA,
Upgraded to A3 from Baa1
Senior Secured Enhanced Equipment Trust Ser. 2021-1 Cl A, Upgraded
to A3 from Baa1
Senior Secured Enhanced Equipment Trust Ser. 2016-2 Cl B, Upgraded
to Ba2 from Ba3
Senior Secured Enhanced Equipment Trust Ser. 2017-2 Cl A, Upgraded
to Baa2 from Baa3
Senior Secured Enhanced Equipment Trust Ser. 2016-3 Cl A, Upgraded
to Baa2 from Baa3
Senior Secured Enhanced Equipment Trust Ser. 2017-1 Cl A, Upgraded
to Baa2 from Baa3
Senior Secured Enhanced Equipment Trust Ser. 2021-1 Cl B, Upgraded
to Baa2 from Baa3
Backed Senior Secured Global Notes, Upgraded to Ba2 from Ba3
Issuer: US Airways, Inc.
Senior Secured Enhanced Equipment Trust Ser. 2011 Cl A, Upgraded
to Ba1 from Ba2
Senior Secured Enhanced Equipment Trust Ser. 2012-2 Cl A, Upgraded
to Ba1 from Ba2
Senior Secured Enhanced Equipment Trust Ser. 2013-1 Cl A, Upgraded
to Baa3 from Ba1
Senior Secured Enhanced Equipment Trust Ser. 2012-1 Cl A, Upgraded
to Baa3 from Ba1
Affirmations:
Issuer: American Airlines, Inc.
Senior Secured Enhanced Equipment Trust Ser. 2019-1 Cl B, Affirmed
Ba2
Senior Secured Enhanced Equipment Trust Ser. 2016-1 Cl A, Affirmed
Baa3
Senior Secured Enhanced Equipment Trust Ser. 2015-2 Cl A, Affirmed
Baa3
Senior Secured Enhanced Equipment Trust Ser. 2016-2 Cl A, Affirmed
Baa3
Outlook Actions:
Issuer: AAdvantage Loyalty IP Ltd.
Outlook, Remains Stable
Issuer: American Airlines Group Inc.
Outlook, Remains Stable
Issuer: American Airlines, Inc.
Outlook, Remains Stable
The upgrade of the CFR and PDR reflect the company's improved
operating performance. Moody's projects a 300 basis point
improvement in operating margin to 8.0% in 2023 as travel demand
completes its recovery from the coronavirus pandemic. Moody's
expects credit metrics to strengthen, with debt/EBITDA near the
mid-five times at the end of 2023 and near 5x or lower by the end
of 2024. Moody's expects FFO + interest / interest of near 3x at
the end of 2023 and near 4x at the end of 2024. The upgrades
reflect Moody's assumption that demand and fares will be sufficient
for American to at least sustain its operating margin at 8% in 2024
and 2025. This level of operating margin would demonstrate the
ability to cover cost inflation, particularly for the higher pilot
labor expense embedded in the recently revised tentative agreement
between the company and its pilots' union, the Allied Pilots
Association.
The upgrades also reflect Moody's belief that American will reduce
reported debt by at least $5 billion between the end of 2022 and
the end of 2024 and by at least $3.5 billion in 2025. Debt
maturities in 2025 are currently $7.5 billion, including the
company's $1 billion of 6.5% convertible notes, which could be
settled for shares rather than retired with cash.
The upgrades of the senior secured and senior unsecured ratings
result from applying Moody's Loss Given Default rating methodology
using the B1 CFR. The Ba1 rating on the loyalty financing includes
a one-notch override of the LGD model. Moody's believes that the
probability of default of the loyalty program financing is lower
than other senior secured obligations, resulting in a lower
expected loss than that output by the LGD model. The upgrades of
the EETCs reflect the one notch higher starting point (the B1 CFR)
when applying Moody's EETC methodology for which upnotching is
correlated with the extent of the equity cushion (1 minus the
loan-to-value) for each tranche. The affirmations of the remaining
four EETCs reflect declines in their respective equity cushions.
The SGL-1 liquidity rating reflects Moody's expectation of very
good liquidity. Projected annual free cash flow of at least $2
billion in 2023 and 2024, at least $8 billion of cash on hand
during the Q4 seasonal trough in ticket sales, and $2.8 billion of
fully available revolving credit facilities support the liquidity
assessment.
The stable outlook reflects Moody's expectation for continued
improvement in operating performance and deleveraging through
2024.
RATINGS RATIONALE
The B1 CFR reflects American's strong business profile, supported
by its expansive domestic and international networks, improving
airline operations, Moody's expectations that credit metrics will
strengthen through 2024 and the company's very good liquidity.
Projected free cash flow of at least $2 billion annually will be
essential for achieving the debt reduction Moody's expects. The
durability of air travel demand, in volume and pricing, will
ultimately determine whether the company can afford the significant
increases in labor expense that American's – and the industry's
-- unions are extracting in current contract negotiations. This is
a key risk for American to sustain annual operating cash flow well
in excess of its expected $2.5 billion (2023) and $3.0 - $3.5
billion (2024) of annual capital investment to produce strong
amounts of free cash flow.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
The ratings could be upgraded if Moody's expects debt/EBITDA will
be sustained below 5x and funds from operations plus
interest-to-interest approaches 4x. The ratings could be downgraded
if Moody's expects cash plus revolver availability to fall below $8
billion, debt/EBITDA to be sustained above 6x or EBIT margin to be
sustained below 7%.
The principal methodology used in American Airlines Group Inc. and
AAdvantage Loyalty IP Ltd. was Passenger Airlines published in
August 2021.
American Airlines Group Inc. is the holding company for American
Airlines, Inc. and regional subsidiaries, Envoy, PSA and Piedmont.
Revenue was $49 billion in 2022.
AMERICAN SCREENING: Unsecureds to be Paid in Full in 12 Months
--------------------------------------------------------------
American Screening, LLC, filed with the U.S. Bankruptcy Court for
the Western District of Louisiana a Disclosure Statement in support
of Plan of Reorganization dated August 6, 2023.
The Debtor is a Louisiana limited liability company. The Debtor was
founded January 7, 2004, in Shreveport, Louisiana by Ronald
Kilgarlin, Jr. in his parent's 150 square foot sunroom.
Debtor's corporate office is located at 9742 St. Vincent Ave, Ste
100, Shreveport, LA 71106. Debtor is an ISO 13485 Certified
distributor of rapid drug and alcohol tests, infectious disease
tests, and cardiac tests, and supplies to the United States, South
America, Asia, Africa, Europe, and Australia. ASC leases its
corporate office and warehouse space from an affiliated nondebtor,
Kilgarlin Holdings, LLC.
This Bankruptcy Case was filed on April 7, 2023 to address the
impact upon the Debtor's business of a final order and judgment for
permanent injunction and monetary relief entered in favor of the
Federal Trade Commission against Debtor, Kilgarlin, and Kilgarlin's
wife (Shawn Kilgarlin) relating to product sourcing problems that
plagued Debtor during the global COVID-19 pandemic (the "FTC
Judgment").
Class 9 consists of Allowed General Unsecured Claims of Vendors and
Suppliers. Holders of the Allowed General Unsecured Claims of
Vendors and Suppliers will be paid in full by the Reorganized
Debtor through 12 regular Monthly Plan Payments commencing on the
Effective Date and continuing on the first business day of each
month thereafter until such Allowed General Unsecured Vendor and
Supplier Claims are paid in full. Class 9 is impaired under the
Plan.
Class 10 consists of the United States Federal Trade Commission and
Allowed Claims of FTC Redress Claimants. The Monetary Relief
awarded to the FTC in the FTC Final Judgment shall be satisfied and
paid in full through the following procedures and payments.
Pursuant to the FTC Final Judgment, judgment in the amount of
$14,651,185.23 (the "Redress Fund") was entered in favor of the FTC
against Debtor, Kilgarlin, and Shawn Kilgarlin, jointly and
severally (the "Monetary Relief"). The FTC Final Judgment
proscribes a Redress Program to redress consumers (the "Redress
Claimants") from the Redress Fund who purchased goods from the
Debtor, Kilgarlin, and Shawn Kilgarlin.
The elements of that Redress Program include, under certain
conditions: (1) Redress Claimants must request a refund to be
reimbursed; (2) All Redress Claimants shall have 120 days from the
date of a notification to request a refund (the "120-Day Notice
Period"); (3) Any Redress Claimant that fails to submit a request
for a refund within the 120-Day Notice Period shall have no right
to a refund for redress from the FTC; (4) after the conclusion of
such 120-Day Notice Period, the FTC shall have a reasonable time to
determine the amount of unclaimed funds in the Redress Fund and
costs of administering the Redress Fund (the "Post-Notice
Administration Period"); (5) the FTC shall return to Defendants any
amount of money in the Redress Fund (less costs of administering
the Redress Fund) that remains at the conclusion of the Post-Notice
Administration Period.
The Debtor, Kilgarlin, and Shawn Kilgarlin have not tendered the
full Redress Fund to the FTC and do not have the financial ability
to do so. Moreover, the amounts payable to Redress Claimants is
unliquidated. Accordingly, given the mandatory refund provisions of
the FTC Final Judgment of amounts in excess of claims submitted by
Redress Claimants less costs of administering the Redress Fund),
the Plan provides the following procedures and payments to the FTC
and holders of Allowed Redress Claims.
Class 11 consists of Allowed PrePetition Membership Interest of
Kilgarlin. Kilgarlin, the holder of the Pre-Petition Membership
Interest in the Debtor, shall retain his membership interest in the
Debtor but shall receive no distributions or payments solely on
account of such membership interest unless and until all payments
required under the Plan are completed to holders of Allowed Claims
in Classes 9 and 10. Thereafter, so long as there is no material
default in existence as to Classes 1 through 8, Kilgarlin may
receive distributions or payments on account of his interest.
Except as otherwise provided in the Plan, on and after the
Effective Date, the Property of the Estate of the Debtor shall
revest in the Reorganized Debtor. Subject to the terms and
conditions of the Plan, the Reorganized Debtor may operate its
business and use, acquire, and disburse Property, including all
revenues generated by its operations, without supervision by the
Court and free of any restrictions of the Bankruptcy Code or the
Bankruptcy Rules.
Plan Payments shall be made from Cash on Hand on the Effective Date
and Earnings of the Debtor during the Plan Period. As of the
Effective Date, all Property of the Reorganized Debtor shall be
free and clear of all Claims, Liens, encumbrances and other
interests of Creditors, except as otherwise provided in the Plan.
In the event the Bankruptcy Case is converted to a chapter 7 case
before the Plan is substantially consummated and a final decree is
entered, the Property of the Estate of the Debtor shall revest in
the bankruptcy estate and be property of the chapter 7 bankruptcy
estate.
A full-text copy of the Disclosure Statement dated August 6, 2023
is available at https://urlcurt.com/u?l=HiYOaM from
PacerMonitor.com at no charge.
Attorney for Debtor:
Kell C. Mercer, Esq.
Kell C. Mercer, PC
901 S. Mopac Expy. Bldg. 1, Ste. 300
Austin, TX 78746
Telephone: (512) 627-3512
Facsimile: (512) 597-0767
Email: Kell.Mercer@mercer-law-pc.com
About American Screening
American Screening, LLC is an ISO 13485 Certified distributor of
rapid drug and alcohol tests, infectious disease tests, and cardiac
tests, and supplies to the United States, South America, Asia,
Africa, Europe, and Australia. ASC leases its corporate office and
warehouse space from an affiliated nondebtor, Kilgarlin Holdings,
LLC.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. W.D. La. Case No. 23-10350) on April 7,
2023. In the petition signed by Ronald Kilgarlin, Jr., managing
member, the Debtor disclosed up to $9,100,921 in assets and up to
$27,251,799 in liabilities.
Judge John S. Hodge oversees the case.
Kell C. Mercer, Esq., at Kell C. Mercer, P.C, represents the Debtor
as legal counsel.
AMYRIS INC: Files Chapter 11 to Facilitate Restructuring
--------------------------------------------------------
Amyris, Inc. (Nasdaq: AMRS), a leading synthetic biotechnology
company accelerating the world's transition to sustainable
consumption through its Lab-to-Market(TM) technology platform and
clean beauty consumer brands, on Aug. 9 disclosed that it is moving
forward with an operational and financial restructuring to further
advance its ongoing strategic transformation and position the
Company for long-term success.
The restructuring is intended to improve the Company's cost
structure, capital structure, and liquidity position while
streamlining Amyris' business portfolio to focus on its core
competencies in R&D and the scale-up, commercialization, and
applications development of its sustainable ingredients derived
through biofermentation.
To facilitate the restructuring, Amyris and certain of its domestic
subsidiaries commenced voluntary Chapter 11 proceedings in the U.S.
Bankruptcy Court for the District of Delaware (the "Court"). Its
entities outside the U.S. are not included in the proceedings.
In tandem, to advance the Company's restructuring goals and
maximize the value of its assets, Amyris is planning to exit its
consumer brands and will begin marketing them for sale, with a view
to having these brands continue to leverage Amyris' cutting-edge
science and technology while under new ownership. As the sale
process progresses, Amyris will continue to operate these brands,
including through retail partners and the brands' e-commerce
platforms.
Amyris has secured a commitment from an entity affiliated with
existing lender Foris Ventures for $190 million of
debtor-in-possession ("DIP") financing to support continued
day-to-day operations as the Company works with its key
stakeholders to negotiate a consensual go-forward plan centered on
Amyris' core capabilities. Subject to Court approval and the DIP
budget, this DIP financing will provide liquidity to help fulfill
commitments to the Company's valued employees, customers, partners,
and vendors during the process.
"Since its founding 20 years ago, Amyris has been a pioneer in the
development of ingredients made with synthetic biology and has
enjoyed great commercial success, particularly as a result of our
innovative Lab-to-Market(TM) technology platform, proven ability to
rapidly bring new products to market, and state-of-the-art science
and manufacturing infrastructure," said Han Kieftenbeld, Interim
Chief Executive Officer and Chief Financial Officer of Amyris.
"Over the past months, we have been hard at work on a strategic
transformation plan to reduce costs, improve operational
effectiveness, and achieve sustainable growth. We believe the step
forward our company has taken today puts us on the best path to
address our financial challenges and achieve a comprehensive
solution -- rooted in Amyris' ground-breaking science, formulation
capabilities, and technology."
Mr. Kieftenbeld added, "Our aspiration to become the most efficient
and productive biotechnology company in our industry has not
changed. We remain incredibly excited about Amyris' long-term
potential and our uniquely talented team's proven ability to
deliver on the promise of synthetic biology and continue to make a
lasting impact. At the end of this restructuring process, we
believe that Amyris will emerge as a financially stronger company
with a more focused business model and well-defined path to
profitability. In turn, we will be poised to grow sustainably
alongside our valued partners and make an even greater impact on
our world through clean chemistry."
To ensure a smooth transition into Chapter 11, the Company filed
with the Court a series of customary motions seeking to continue
operating as usual and uphold its commitments to its employees and
other valued stakeholders during the process. These "first day"
motions include requests to continue to pay wages and provide
benefits to employees as usual and maintain its customer programs
and policies. The Company intends to pay vendors in the ordinary
course for all goods received and services rendered after the
filing.
Additional Information
Court filings and other documents related to the Company's
restructuring are available at https://cases.stretto.com/Amyris.
Vendors with questions can call a dedicated hotline at (888)
855-0485 (toll-free) or +1 (303) 276-0309 (international) or email
TeamAmyris@stretto.com.
Pachulski Stang Ziehl & Jones LLP is serving as legal counsel,
PricewaterhouseCoopers LLP is serving as financial advisor, and
Intrepid Investment Bankers LLC is serving as investment banker to
the Company. Philip J. Gund of Ankura Consulting Group, LLC is
serving as the Company's Chief Restructuring Officer.
About Amyris
Amyris (Nasdaq: AMRS) -- http://www.amyris.com/-- is a leading
synthetic biotechnology company, transitioning the Clean Health &
Beauty and Flavors & Fragrances markets to sustainable ingredients
through fermentation and the company's proprietary
Lab-to-Market(TM) technology platform. This Amyris platform
leverages state-of-the-art machine learning, robotics and
artificial intelligence, enabling the company to rapidly bring new
innovation to market at commercial scale. Amyris ingredients are
included in over 20,000 products from the world's top brands,
reaching more than 300 million consumers. Amyris also owns and
operates a family of consumer brands that is constantly evolving to
meet the growing demand for sustainable, effective and accessible
products.
APPLOVIN CORP: Moody's Rates New $1.5BB First Lien Term Loan 'Ba3'
------------------------------------------------------------------
Moody's Investors Service assigned a Ba3 rating to AppLovin
Corporation's new $1.5 billion senior secured first-lien term loan
B-1 maturing August 2030. AppLovin's Ba3 Corporate Family Rating
and stable outlook remain unchanged.
Net proceeds from the new term loan together with cash-on-hand will
be used to fully repay the existing $1.75 billion term loan B-1
maturing August 2025 (the "2025 Term Loan"). The new term loan,
which will be priced off of SOFR rather than LIBOR, will be issued
by the same borrower, secured by the same collateral package,
guaranteed by the same guarantors and contain the same terms and
conditions as 2025 Term Loan.
Following is a summary of the rating action:
Assignments:
Issuer: AppLovin Corporation
$1.5 Billion Gtd Senior Secured First-Lien Term Loan due 2030,
Assigned Ba3
The assigned rating is subject to review of final documentation and
no material change in the size, terms and conditions of the
transaction as advised to Moody's. Upon transaction closing,
Moody's will withdraw the Ba3 rating on the 2025 Term Loan.
RATINGS RATIONALE
Moody's views the refinancing as credit neutral since there is
negligible pro forma reduction in AppLovin's financial leverage.
However, the term loan's maturity extension, combined with the
recent maturity extension and modest upsizing of the revolving
credit facility (RCF), enhances the company's financial flexibility
during a period of macroeconomic uncertainty.
AppLovin's Ba3 CFR reflects the company's scale and improving mix,
supporting its financial profile in a challenging macro
environment. The weak, albeit recovering, mobile gaming market and
AppLovin's earlier strategic shift to optimize its gaming studios
have resulted in slower-than-expected top-line revenue growth (when
adjusting for publisher bonuses associated with the company's
acquisition of MoPub). However, higher margin software platform
revenue now contributes a larger share of total revenue.
Additionally, improved apps segment margins as a result of
portfolio optimization has led to higher overall margins compared
with prior years. This enables the company to invest in talent and
technology while the overall market is muted, positioning AppLovin
to capture share when the ad market recovers. Moody's expects
AppLovin's margins to increase structurally over the medium-term.
AppLovin's Ba3 rating also considers that deleveraging following
the MoPub and Wurl acquisitions has been slower-than-expected due
to last year's growth slowdown in the mobile gaming space, which
resulted in AppLovin's debt to EBITDA rising temporarily above the
4x downgrade threshold (as calculated and adjusted by Moody's) in
the first half of fiscal 2022. However, leverage has recently
declined to the 4x area and Moody's expects continued improvement
over the rating horizon as EBITDA expands. Further, Moody's
continues to project solid free cash flow (FCF) generation given
AppLovin's high margins and relatively modest capital expenditures.
Liquidity is very good with cash balances just under $900 million
and full availability under the new $610 million RCF. With $107
million of remaining capacity available under the $750 million
authorized share repurchase program at the end of July 2023,
Moody's expects share buybacks to be more tempered in the
near-term. Barring a new purchase authorization, there is greater
flexibility to allocate FCF to debt repayment.
The stable outlook reflects Moody's expectation for relatively
stable-to-improving top-line revenue (when adjusting for publisher
bonuses) with Moody's adjusted EBITDA margins in the 25%-30% range.
The recent improvement in profit margins reflects higher
contribution from AppLovin's software platform and successful
efforts to optimize its apps portfolio. Moody's expects leverage as
measured by total debt to EBITDA to decrease below the 4x area (as
calculated and adjusted by Moody's) and adjusted FCF to debt to
remain in the 15%-20% range as profitability expands.
Over the next 12-18 months, Moody's expects AppLovin will maintain
very good liquidity as indicated by the SGL-1 Speculative Grade
Liquidity rating with cash balances of approximately $876 million
as of June 30, 2023 and access to the new (undrawn) $610 million
revolver maturing 2028. The company has a multi-year track record
for maintaining cash balances of at least $200 million with good
revolver availability, modest capital expenditures and working
capital, and positive FCF to debt in the mid-teens percentage
range.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
Ratings could be upgraded if revenue and profit growth lead to
adjusted debt to EBITDA sustained comfortably below 3x and AppLovin
demonstrates a commitment to conservative financial policies aided
by continued reduction in KKR ownership. The company would also
need to maintain very good liquidity with growing cash balances,
good conversion of EBITDA to free cash flow, and free cash flow to
debt consistently above 15% (all metrics as calculated and adjusted
by Moody's).
Ratings could be downgraded if Moody's expects AppLovin's adjusted
debt to EBITDA will be sustained above 4x (as calculated and
adjusted by Moody's) due to underperformance or debt financed
distributions, acquisitions or partnerships. Ratings could also be
downgraded if organic revenue growth slows consistently below the
mid-single digit percentage range reflecting underperformance
related to execution or competitive pressures. There could also be
downward pressure on ratings if liquidity deteriorates as evidenced
by reduced cash balances or revolver availability; adjusted free
cash flow to debt declining to the mid-single digit percentage
range; or Moody's expects more aggressive financial policies that
would result in higher financial leverage, cash distributions
and/or weakened adjusted free cash flow.
With headquarters in Palo Alto, CA, AppLovin Corporation provides a
software platform for mobile app developers to improve app
marketing and monetization. Founded in 2011, the company also owns
and operates a portfolio of free-to-play mobile games that it
develops through its own or partner studios. AppLovin is publicly
traded and a controlled company with two company executives and KKR
Denali Holdings, L.P. holding 84% voting control. Revenue for the
twelve months ended June 30, 2023 totaled approximately $2.9
billion.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
APPLOVIN CORP: S&P Rates New $1.5BB Term Loan B Due 2030 'BB-'
--------------------------------------------------------------
S&P Global Ratings assigned its 'BB-' issue-level rating and '3'
recovery rating to AppLovin Corp.'s proposed $1.5 billion term loan
B due 2030. The '3' recovery rating indicates its expectation for
meaningful (50%-70%; rounded estimate: 55%) recovery for lenders in
the event of a payment default. The company plans to use the
proceeds from this term loan, along with $249 million of cash from
its balance sheet, to repay the outstanding borrowings on its term
loan maturing in 2025 (approximately $1.75 billion outstanding) and
pay transaction-related fees. S&P's 'BB-' issuer credit rating and
stable outlook on AppLovin are unchanged because the proposed
transaction will not affect its net leverage.
ISSUE RATINGS—RECOVERY ANALYSIS
Key analytical factors
-- AppLovin's proposed capital structure comprises a $610 million
senior secured revolver maturing in 2028, a $1.5 billion senior
secured term loan maturing in 2030, and a $1.5 billion senior
secured term loan maturing in 2028. The revolver and term loans
rank pari passu.
-- The senior secured debt is secured by substantially all of the
company's assets and those of its domestic subsidiary guarantors.
Simulated default assumptions
-- S&P's simulated default scenario assumes a default occurring in
2027 because of increased competition from larger players and
decreased profitability from the content development business.
-- Other default assumptions include a 85% draw on the revolving
credit facility and all debt includes six months of prepetition
interest.
Simplified waterfall
-- EBITDA at emergence: $320 million
-- EBITA multiple: 6.5x
-- Gross recovery value: $2.1 billion
-- Net enterprise value (after 5% administrative costs): $2
billion
-- Obligor/nonobligor valuation split: 65%/35%
-- Estimated senior secured debt claims: $3.6 billion
--Recovery expectations: 50%-70% (rounded estimate: 55%)
ATHENA MEDICAL: Trustee Gets OK to Hire Medical Billing Expert
--------------------------------------------------------------
James Cross, the Subchapter V trustee for Athena Medical Group,
LLC, received approval from the U.S. Bankruptcy Court for the
District of Arizona to employ Healthcare Integrative, LLC, a
medical billing expert in Rio Rancho, N.M.
The Debtor requires a medical billing expert to review medical
billing practices and provide consulting services.
The firm will charge a flat fee of $30,000 for the initial
consulting services. For additional consulting services, the hourly
rates range from $225 to $425.
Eduardo Guimbarda, a partner at Healthcare Integrative, LLC,
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:
Eduardo J. Guimbarda
Healthcare Integrative, LLC
4011 Barbara LP Se Suite 203
Rio Rancho, NM 87124-1011
Tel: (505) 994-4503
Fax: (505) 891-1495
About Athena Medical Group
Athena Medical Group, LLC -- https://athenamedgroup.com/ --
provides primary care, transitional care, chronic care management,
remote patient monitoring, and telehealth services. The company is
based in Phoenix, Ariz.
Athena Medical Group filed a petition for relief under Subchapter V
of Chapter 11 of the Bankruptcy Code (Bankr. D. Ariz. Case No.
23-01635) on March 16, 2023, with total assets of $3,843,022 and
total liabilities of $12,707,798. James E. Cross has been appointed
as Subchapter V trustee.
Judge Brenda K. Martin oversees the case.
The Debtor tapped the Law Office of Mark J. Giunta as bankruptcy
counsel; and Ball, Santin & McLeran and Simmons & Gottfried, PLLC
as special counsels.
ATLANTIC RADIO: Gets OK to Hire Seese P.A. as Legal Counsel
-----------------------------------------------------------
Atlantic Radio Telephone, Inc., received approval from the U.S.
Bankruptcy Court for the Southern District of Florida to hire
Seese, P.A. as its legal counsel.
The Debtor requires legal counsel to:
a. Advise the Debtor generally regarding matters of bankruptcy
law in connection with its Chapter 11 case;
b. Advise the Debtor of the requirements of the Bankruptcy
Code, the Federal Rules of Bankruptcy Procedure, applicable
bankruptcy rules, including local rules pertaining to the
administration of the case, and the U.S. Trustee Guidelines related
to the daily operation of its business and administration of its
estate;
c. Prepare legal papers;
d. Negotiate with creditors, prepare and seek confirmation of
a plan of reorganization and related documents, and assist the
Debtor with the implementation of the plan;
e. Review executory contracts and unexpired leases;
f. Negotiate and document any debtor-in-possession financing
and exit financing; and
g. Render other necessary legal services.
Michael Seese, Esq., is the firm's attorney who will be handling
the case. He will be compensated at $525 per hour.
In addition, the attorney will receive reimbursement for
work-related expenses incurred.
Mr. Seese disclosed in a court filing that he and his firm are
"disinterested persons" pursuant to Section 101(14) of the
Bankruptcy Code.
Mr. Seese can be reached at:
Michael D. Seese, Esq.
Seese, P.A.
101 N.E. 3rd Avenue, Suite 1500
Ft. Lauderdale, FL 33301
Telephone: (954) 745-5897
Email: mseese@seeselaw.com
About Atlantic Radio
Atlantic Radio Telephone, Inc. provides communication and
navigation solutions to individuals and organizations who find
themselves "off the grid." With locations in Miami and Fort
Lauderdale, Fla., Atlantic Radio provides sales, support,
installation, integration and repair services to customers located
around the world in industries including maritime, military, first
responders, utilities, aviation, education, research, and travel
and tourism.
Atlantic Radio Telephone filed a petition under Chapter 11,
Subchapter V of the Bankruptcy Code (Bankr. S.D. Fla. Case No.
23-15483) on July 13, 2023, with $1 million to $10 million in
assets and liabilities. Maria Yip, a certified public accountant
and managing partner at Yip Associates, has been appointed as
Subchapter V trustee.
Judge Laurel M. Isicoff oversees the case.
Michael D. Seese, Esq., at Seese, P.A. is the Debtor's legal
counsel.
ATLAS CUSTOM: Amended Plan Confirmed by Judge
---------------------------------------------
Judge Mark X. Mullin has entered an order confirming the Amended
Plan of Reorganization of Atlas Custom Homes, Inc.
The Plan has been proposed in good faith and not by any means
forbidden by law. The Plan complies with the applicable provisions
of Title 11, and the Debtor, as the plan proponent, has complied
with the applicable provisions of Title 11.
The Plan is a liquidating plan. All payments made or promised to be
made by the Debtor or any other person for services or for costs
and expenses in, or in connection with, the Plan, and incident to
the case, have been disclosed to the Court and are reasonable or,
if to be fixed after Confirmation of the Plan, will be subject to
the approval of the Court.
The Plan does not affect any rate change of any regulatory
commission with jurisdiction over the rights of the Debtor. The
Plan is not likely to be followed by further need for
reorganization. All Section 1930 fees shall be paid by the Debtor
on or before the Effective Date of the Plan or as agreed to by the
Debtor and the United States Trustee.
A copy of the Plan Confirmation Order dated August 7, 2023 is
available at https://urlcurt.com/u?l=m5zvN9 from PacerMonitor.com
at no charge.
Attorneys 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 Atlas Custom Homes
Atlas Custom Homes, Inc., a company in Fort Worth, Texas, filed its
voluntary petition for relief under Chapter 11 of the Bankruptcy
Code (Bankr. N.D. Tex. Case No. 23-40023) on Jan. 3, 2023, with up
to $50,000 in assets and $1 million to $10 million in liabilities.
Douglas Haley, president of Atlas Custom Homes, signed the
petition.
Eric A. Liepins, Esq., at Eric A. Liepins, P.C., is the Debtor's
counsel.
ATOM HOLDINGS: Chapter 15 Case Summary
--------------------------------------
Three affiliates that concurrently filed voluntary petitions for
relief under Chapter 15 of the Bankruptcy Code:
Debtor Case No.
Atom Holdings (Lead Case) 23-14343
89 Nexus Way
Camana Bay, Grand Cayman
KY1-9009
Cayman Islands
AAX Asia Private Limited 23-14346
61 Robinson Road
#08-02
61 Robinson
Singapore (068893)
AAX Singapore Private Limited 23-14347
61 Robinson Road
#08-02
61 Robinson
Singapore (068893)
Business Description: The Debtors are part of a group that
engaged in the cryptocurrency business,
offering saving, spot, and futures
trading.
Chapter 15 Petition Date: June 2, 2023
Court: United States Bankruptcy Court
Southern District of Florida
Judge: Hon. Peter D. Russin
Atom Holdings'
Foreign Representatives: Angela Barkhouse and George
Kimberley Leck, as Joint Provisional
Liquidators
142 Seafarers Way, Suite N404
Flagship Building
George Town
Grand Cayman, Cayman Islands
AAX Asia & AAX Singapore's
Foreign Representative: Luke Furler, as Interim Judicial Manager
137 Amoy Street, #02-03
Far East Square
Singapore 049965
Atom Holdings'
Foreign Proceeding: Grand Court of the Cayman Islands
Financial Services Division
AAX Asia &
AAX Singapore's
Foreign
Proceeding: Interim Judicial Management under IRDA
94(3)
Foreign
Representatives'
Counsel: Gregory S. Grossman, Esq.
Juan J. Mendoza, Esq.
SEQUOR LAW, P.A.
1111 Brickell Ave., Ste. 1250
Miami, FL 33131
Tel: (305) 372-8282
Fax: (305) 372-8202
Email: ggrossman@sequorlaw.com
jmendoza@sequorlaw.com
mgonzalez@sequorlaw.com
Estimated Assets: Unknown
Estimated Debt: Unknown
Full-text copies of the Chapter 15 petitions are available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/ZDXZ6TY/Atom_Holdings__flsbke-23-14343__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/6IKXXQY/AAX_Asia_Private_Limited__flsbke-23-14346__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/6SBAHJQ/AAX_Singapore_Private_Limited__flsbke-23-14347__0001.0.pdf?mcid=tGE4TAMA
BLUE RIBBON: $368MM Bank Debt Trades at 20% Discount
----------------------------------------------------
Participations in a syndicated loan under which Blue Ribbon LLC is
a borrower were trading in the secondary market around 79.7
cents-on-the-dollar during the week ended Friday, August 11, 2023,
according to Bloomberg's Evaluated Pricing service data.
The $368 million facility is a Term loan that is scheduled to
mature on May 7, 2028. About $340.4 million of the loan is
withdrawn and outstanding.
Blue Ribbon, LLC, parent company of Pabst Brewing Company, is one
of the largest privately held independent brewers in the US, with
a portfolio of iconic American beer brands.
BOUQUET RESTAURANT: Wins Cash Collateral Access Thru Oct 3
----------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Kentucky,
Covington Division, authorized Bouquet Restaurant, LLC, to use cash
collateral on an interim basis in accordance with its agreement
with Newtek Small Business Finance, LLC, through October 3, 2023.
The Debtor's adequate protection payment to Newtek is currently
listed as $3,648 per month, per the terms of the Note. Said payment
is based on a variable interest rate of Prime plus 2.75%, as
provided in the Note executed by Debtor in favor of Newtek.
Accordingly, Debtor acknowledges and agrees, and the Court
therefore finds, that the amount of said monthly adequate
protection payment may increase if there is change in Prime Rate
during the period authorized by the Order. Therefore, in addition
to all other relief granted to Newtek to date, the Debtor is
further permitted and authorized to make an additional monthly
payment to Newtek, in excess of $3,648, should the Prime Rate
increase after June 1, 2023.
A copy of the Court's order and the Debtor's budget is available at
https://urlcurt.com/u?l=ssHvwV from PacerMonitor.com.
The Debtor projects total expenses, on a weekly basis, as follows:
$32,316 for the week ending August 17, 2023;
$28,668 for the week ending August 24, 2023;
$31,983 for the week ending September 1, 2023; and
$29,918 for the week ending September 8, 2023.
About Bouquet Restaurant, LLC
Bouquet Restaurant, LLC operates a restaurant in Covington, Ky.,
offering charcuterie, small plates, entrees, and desserts.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D. Ky. Case No. 23-20279) on April 19,
2023. In the petition signed by Stephen A. Williams, its member,
the Debtor disclosed $115,825 in assets and $1,613,837 in
liabilities.
Judge Tracey N. Wise oversees the case.
Michael B. Baker, Esq., at Baker Firm, PLLC, represents the Debtor
as legal counsel.
BRON MEDIA: Chapter 15 Case Summary
-----------------------------------
Lead Debtor: BRON Media Holdings USA Corp.
700-Park Place, 666 Burrard Street
Vancouver, British Columbia
Canada
Business Description: BRON, along with its affiliated
companies in Canada and the U.S.,
develops, produces and sells motion
pictures, series television, and digital
media content, which includes animation
and interactive gaming. To date, the
BRON Group has produced or executive
produced more than 125 productions.
Foreign Proceedings: IN THE SUPREME COURT OF BRITISH COLUMBIA
IN THE MATTER OF THE COMPANIES'
CREDITORS ARRANGEMENT ACT,
R.S.C. 1985, C. C-36, AS AMENDED
and
IN THE MATTER OF THE BUSINESS
CORPORATIONS ACT, S.B.C. 2002, c. 57, AS
AMENDED AND THE BUSINESS CORPORATIONS
ACT, R.S.O. 1990, C. B.16, AS AMENDED
and
IN THE MATTER OF A PLAN OF COMPROMISE OR
ARRANGEMENT OF BRON MEDIA CORP., ET AL
Chapter 15 Petition Date: July 19, 2023
Court: United States Bankruptcy Court
Northern District of Georgia
Twenty-seven affiliates that concurrently filed voluntary petitions
for relief under Chapter 15 of the Bankruptcy Code:
Debtor Case No.
------ --------
BRON Media Holdings USA Corp. (Lead Case) 23-56798
BRON Creative USA Corp 23-56799
BRON Digital USA, LLC 23-56801
BRON Life USA Inc. 23-56802
BRON Releasing USA Inc. 23-56803
BRON Studios USA Inc. 23-56804
BRON Studios USA Developments Inc. 23-56805
BRON Ventures 1 LLC 23-56806
Bakhorma, LLC 23-56807
Drunk Parents, LLC 23-56808
Fables Holdings USA, LLC 23-56809
Fables Productions USA INC. 23-56810
Gossamer Holdings USA, LLC 23-56811
Gossamer Productions USA, Inc. 23-56812
Harry Haft Productions, Inc. 23-56813
Heavyweight Holdings, LLC 23-56815
I am Pink Productions, LLC 23-56817
Lucite Desk, LLC 23-56818
National Anthem Holdings, LLC 23-56819
National Anthem ProdCo Inc. 23-56820
Oakland Pictures Holdings, LLC 23-56821
Pathway Productions, LLC 23-56823
Robin Hood Digital PC USA Inc. 23-56824
Robin Hood Digital USA, LLC 23-56825
Solitary Holdings USA, LLC 23-56826
Surrounded Holdings USA LLC 23-56827
Welcome to Me, LLC 23-56828
Foreign Representative: BRON Media Corp.
1700-Park Place, 666 Burrard Street,
Vancouver, British Columbia
Canada
Foreign Representative's
Counsel: Cameron M. McCord, Esq.
JONES & WALDEN, LLC
699 Piedmont Avenue NE
Atlanta, GA 30308
Tel: 404-564-9300
Fax: 404-564-9301
Email: info@joneswalden.com
cmccord@joneswalden.com
Estimated Assets: Unknown
Estimated Debt: Unknown
A full-text copy of the Lead Debtor's Chapter 15 petition is
available for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/XCC2POY/BRON_Media_Holdings_USA_Corp__ganbke-23-56798__0001.0.pdf?mcid=tGE4TAMA
BUFFALO NIAGARA: U.S. Trustee Unable to Appoint Committee
---------------------------------------------------------
The U.S. Trustee for Region 2 disclosed in a court filing that no
official committee of unsecured creditors has been appointed in the
Chapter 11 case of Buffalo Niagara Realty Group, Inc.
About Buffalo Niagara Realty Group
Buffalo Niagara Realty Group, Inc. sought protection under Chapter
11 of the Bankruptcy Code (Bankr. W.D. N.Y. Case No. 23-10609) on
June 27, 2023, with $100,001 to $500,000 in both assets and
liabilities.
Judge Carl L. Bucki oversees the case.
The Law Office of Matthew A. Lazroe is the Debtor's bankruptcy
counsel.
CANADA GOOSE: S&P Upgrades ICR to 'BB-' on Forecasted Revenue
-------------------------------------------------------------
S&P Global Ratings raised its issuer credit rating on Toronto-based
performance luxury apparel company Canada Goose Holdings Inc. to
'BB-' from 'B+' and its issue-level rating on the company's senior
secured term loan to 'BB+' from 'BB'. The '1' recovery rating on
the term loan, indicating its expectation for very high (90%-100%;
rounded estimate: 95%) recovery in a default scenario, is
unchanged.
The stable outlook reflects S&P's expectation that a growing DTC
network combined with cost efficiencies should lead to EBITDA
growth and stable leverage of about 3x for the next 12 months.
Revenue and EBITDA growth will be supported by expanding DTC
network and positive demand.
S&P said, "The upgrade reflects our projections that Canada Goose's
revenues and EBITDA will increase through fiscal 2025 (ending
April). Although the company's fiscal 2023 operations in mainland
China were soft following the lifting of pandemic-led closures
earlier this year, recent data indicates that consumer spending has
rebounded. Canada Goose's growth prospect is also attributable to
the company's presence in the higher-margin, DTC (mid-70% gross
margin) channel, constituting about 70% of total fiscal 2023
revenues (up from 60% two years ago) and its well-developed
e-commerce channels. We expect the company will continue to
increase sales through the DTC channel such that it generates
mid-to-high 70% of its 2024 revenues. Currently, Canada Goose
operates in a global e-commerce business and 54 stores (at the end
of first-quarter 2024), with plans to open 16 more stores in fiscal
2024. With a target to double its brick-and-mortar footprint in the
next five years, particularly in North America and mainland China
this year, Canada Goose will continue to drive customer penetration
and increase customer lifetime value from its expanding offerings.
As a result, we expect revenue and EBITDA growth, higher than the
luxury goods sector, over the next 12 months. In addition, the
continued favorable shift in increasing DTC and minimizing
wholesale will support higher gross margins."
Pricing actions continue to mitigate pressures from higher input
costs and expansion plans.
S&P said, "We forecast Canada Goose's average selling price will
rise due to a combination of increased pricing actions
(mid-single-digit percentage area) and the company reducing its
exposure to the lower-margin (mid-to-high 40% gross margin)
wholesale segment. The company's higher-income customer demographic
has also made it easier to take pricing actions without seeing a
decline in demand. Recovery in retail sales in China is also
supporting revenue growth. As a result, we expect the strong
revenue growth and expanding gross margin will more than offset
wage increases, higher costs to support new store openings, and
other strategic measures (IT, marketing) that will reduce
annualized operating expenses by C$150 million in the longer term.
Nevertheless, we believe the company will sustain EBITDA margins in
the low-20% area through fiscal 2024. With EBITDA growth, we expect
leverage will remain at about 3x through fiscal 2024."
Store expansion will increase capital expenditure and restrain free
operating cash flow.
S&P said, "We expect the company will continue to generate positive
free operating cash flow (FOCF), albeit similar to that of the
previous year. During fiscal 2023, Canada Goose had significant
working capital investments owing to inventory build-out, but also
curtailed its capital expenditures (capex) during the year. As a
result, the company exited fiscal 2023 with FOCF of about C$70
million. To fund its DTC and retail network expansion, the company
plans to increase capex in the C$70 million-C$80 million range to
build new stores. As a result, we expect FOCF will be modestly
higher than 2023. In addition, capital lease liabilities associated
with the new stores will limit any material improvement in leverage
for the next 12 months. However, considering cash on hand of C$48
million as of July 2, 2023, and C$517.5 million of borrowing
capacity (June 1-Nov. 30; C$467.5 million for the rest of year)
available under the revolving facility, we expect the company has
adequate financial flexibility to mitigate temporary headwinds."
A niche market, narrow product focus, and high seasonality and
geopolitical risks constrain the rating.
S&P said, "Still, we view Canada Goose's small-scale, limited
product and brand diversity, and the highly seasonal nature of the
business as factors that could lead to greater volatility in EBITDA
margins and credit measures. We believe that within the broader
global designer apparel and footwear market, the company has
created a niche position and has limited scale as a performance
luxury outerwear apparel manufacturer. However, we assess Canada
Goose's single brand and narrow product focus as key credit risks
to the company's business risk profile. The company has high
product concentration with most of its revenues generated from its
highly seasonal parka category (about 75% of revenues was generated
in July through December; target to reduce to 65%), which exposes
it to significant revenue volatility should seasonal sales weaken.
A small but growing portion of revenues is composed of non-parka
products such as apparel and cold weather accessories. The company
has recently launched footwear and plans to expand into travel
retail. We believe the company is still in the early stages of
product diversification and these efforts would only show material
benefit to its operating performance beyond the next 12 months.
Finally, although we assess geopolitical risk as low, it could
still limit the company's geographic expansion and revenue growth
outside of North America, particularly in Asia.
"The stable outlook reflects our expectation that a growing DTC
network combined with cost efficiencies should lead to EBITDA
growth and stable leverage of about 3x for the next 12 months. We
expect the company will exhibit resilience against macroeconomic
uncertainties and continue to execute its DTC strategy. Revenue
growth should be spurred by the growth in e-commerce channels, new
store openings, increased consumer penetration, and product
expansion."
S&P could lower the ratings if:
-- Canada Goose's operating performance shows unexpected
deterioration due to a weakening retail environment, operating
missteps, or increasing competitive pressures. This would
demonstrate a larger inherent volatility than we expected and we
would likely view the business less favorably; or
-- The company pursues a more aggressive financial policy, such as
debt-financed shareholder returns or acquisitions, with poor
prospects of improvement in subsequent years and leading to
leverage approaching 4x.
Although unlikely in the next 12 months, S&P could raise the
ratings if:
-- Revenue increases significantly and EBITDA margins trend to the
mid-20% area while the company pursues a disciplined financial
policy, including shareholder returns that support leverage
sustained below 2x; or
-- Greater scale reflecting the success of the company's DTC focus
and product diversity leading to a stronger business profile with
sustained growth and profitability.
CAPITAL REGION MEDICAL: Moody's Raises Revenue Bond Rating to Ba1
-----------------------------------------------------------------
Moody's Investors Service has upgraded Capital Region Medical
Center's (CRMC) (MO) revenue bond rating to Ba1 from Ba2.
Concurrently, the outlook has been revised to positive from
negative. The system has $42 million of outstanding debt as of
fiscal 2022.
RATINGS RATIONALE
The upgrade to Ba1 is driven by the successful attainment of a
forbearance agreement through January 2, 2024 and the execution of
a reorganization agreement with the University of Missouri. This
agreement will further strengthen the relationship between the two
systems, with the University of Missouri providing payor leverage,
the ability to access a vast network of clinical resources and full
oversight over operations. Offsetting considerations include weak
operating cash flow and days cash on hand at CRMC, which management
anticipates will incrementally improve over several years as
turnaround strategies gain traction.
RATING OUTLOOK
The positive outlook reflects the potential for credit improvement
as the relationship between CRMC and the University of Missouri
System (Aa1 stable) solidifies, including the potential to
integrate operations and/or transfer assets to the University of
Missouri.
FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATING
-- Successful execution of strategic partnership as a full
member of the University of Missouri or further strengthening of
the relationship
-- Materially improved and sustained operating performance,
which allows for increased liquidity and headroom to covenants
FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATING
-- Adverse changes to the relationship with the University of
Missouri
-- Inability to meet terms related to the bond covenant
forbearance agreement
LEGAL SECURITY
The 2020 bonds are an obligation of CRMC, secured by unrestricted
gross revenues pursuant to CRMC's Master Trust Indenture. While the
University of Missouri-Columbia Medical Alliance is the sole member
and controlling entity of CRMC, neither the University nor the
University of Missouri Health System are obligated on CRMC bonds.
The privately placed 2017 bonds (unrated) are also secured by
unrestricted gross revenues, pursuant to CRMC's Master Trust
Indenture.
PROFILE
Capital Region Medical Center is a 114 bed hospital, two campus
hospital system, located in Jefferson City, MO, the capital of
Missouri. The system operates numerous medical clinics and
outpatient facilities throughout the surrounding eight county
area.
METHODOLOGY
The principal methodology used in this rating was Not-For-Profit
Healthcare published in December 2018.
CELL-NIQUE CORPORATION: Voluntary Chapter 11 Case Summary
---------------------------------------------------------
Debtor: Cell-Nique Corporation
22 Hamilton Way
Castleton, NY 12033
Business Description: The Debtor is a grocery and related product
merchant wholesaler.
Chapter 11 Petition Date: August 10, 2023
Court: United States Bankruptcy Court
Northern District of New York
Case No.: 23-10815
Judge: Hon. Robert E. Littlefield Jr.
Debtor's Counsel: Peter A. Pastore, Esq.
O'CONNELL & ARONOWITZ, P.C.
54 State Street, 9th FL
Albany, NY 12207
Tel: 518-462-5601
Email: papastore@oalaw.com
Estimated Assets: $10 million to $50 million
Estimated Liabilities: $10 million to $50 million
The petition was signed by Daniel Ratner as president.
The Debtor failed to include in the petition a list of its 20
largest unsecured creditors.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/XWI4UVY/Cell-Nique_Corporation__nynbke-23-10815__0001.0.pdf?mcid=tGE4TAMA
CENTERPOINT PRODUCTIONS: Case Summary & 20 Top Unsecured Creditors
------------------------------------------------------------------
Debtor: CenterPoint Productions, Inc.
13445 S. Jupiter
Dallas, TX 75238
Chapter 11 Petition Date: August 10, 2023
Court: United States Bankruptcy Court
Northern District of Texas
Case No.: 23-31716
Debtor's Counsel: Eric A. Liepins, Esq.
ERIC A. LIEPINS
12770 Coit Road
Suite 850
Dallas, TX 75251
Tel: 972-991-5591
Fax: 972-991-5788
Email: eric@ealpc.com
Estimated Assets: $0 to $50,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by David Horowitz as president.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 20 largest unsecured creditors is available
for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/KCSDTJI/CenterPoint_Productions_Inc__txnbke-23-31716__0001.0.pdf?mcid=tGE4TAMA
CENTERPOINTE HOTELS: Unsecureds' Recovery "Unknown" in Plan
-----------------------------------------------------------
CenterPointe Hotels @ Texas II, LP, and CenterPointe Partners @
Texas, LLC d/b/a Hampton Inn I-10 East filed with the U.S.
Bankruptcy Court for the Southern District of Texas a Joint Plan of
Reorganization and Disclosure Statement dated August 7, 2023.
The Debtors were formed in 2013 in connection with a planned two
phase hotel development project, referred to as the "City East
Development," for the construction of four hotel properties in
total (two hotels per phase).
Debtor CP Partners was established as Texas limited liability
company, with its initial members being, Lou Ann Guillory ("L.
Guillory") and DCG Hotel Partners, LLC ("DCG Partners"), an
affiliated entity owned by L. Guillory, James Guillory, Sr.
("Guillory, Sr."), and James Guillory, Jr. ("Guillory, Jr.," and,
collectively with L. Guillory and Guillory, Sr., the "Guillorys"),
to act as general partner and manager of certain subsidiary
investment vehicle entities, including Debtor CP Hotels.
CP Hotels was established as Texas limited partnership, with CP
Partners being its General Partner, to acquire real property
located east of downtown Houston at 10505 East Freeway, Houston,
Texas 77029, and to construct and lease the initial hotel built in
phase one of the City East Development – the Hampton Inn Houston
I-10 East (the "Hotel").
The genesis of the litigation related to these Chapter 11 Cases is
the result of an inability of the Guillorys and the limited
partners to agree on to the implementation of certain terms related
to the management of the property as set forth in a Partnership
Interest Purchase Agreement ("PIP") dated July 26, 2022. The PIP
was executed by James O. Guillory, Jr., in his capacity as
President and manager of the respective Debtors, and included a
provision stating that CP Partners "misused partnership funds for
purposes other than the benefit of the Partnership[.]"
On March 23, 2023, the Court entered its Order for Mediation (the
"Mediation Order"). The Mediation was successful, and at the
conclusion of the of the Mediation, the Debtors, Lender, Lee
Parties and Guillory Parties executed that certain Mediated
Settlement Agreement which, among other things, provides for a
settlement of the ongoing disputes between the parties and also
provides the path for the Debtors to bring the Chapter 11 Case to
an efficient conclusion in accordance with this Plan. In accordance
with the Mediated Settlement Agreement, the Hotel will be managed
by the Independent Manager while the Independent Broker markets the
Hotel for sale and the Independent Auditor prepares a report to
determine any amounts that may be owed by the Guillory Parties or
the Lee Parties, as applicable.
While the marketing and sale process is conducted, the Debtors'
monthly cash flow will be applied in accordance with an agreed
waterfall set forth in the Mediated Settlement Agreement. During
this period, the ZSBNP Secured Claims will bear interest at their
non-default rate, and the Debtors will continue to pay ZSBNP the
amount of $37,500.00 per month on account of its Secured Claims.
Upon the sale of the Hotel, the Mediated Settlement Agreement also
provides for a waterfall for distribution of the sale proceeds.
Finally, the Mediated Settlement Agreement provides that the
parties will exchange certain mutual releases upon the Effective
Date of this Plan.
Class 5 shall consist of the Allowed General Unsecured Claims of
all of the Debtors' General Unsecured Creditors. Class 5 is
Impaired under the Plan. On the Effective Date, except to the
extent that a Holder of an Allowed Class 5 Claim agrees to a less
favorable treatment, Holders of Allowed Class 5 Claims shall
receive, in full and final satisfaction, compromise, settlement,
release, and discharge of and in exchange for each Class 5 Claim:
* Payment in the ordinary course of the Debtors' business,
subject to the sole discretion of the Independent Manager, and, to
the extent unpaid at the time of any sale of the Hotel Property;
* Pro-rata distributions of Sale Proceeds in accordance with
the waterfall set forth in the Mediated Settlement Agreement.
Class 6 shall consist of Allowed Insider Unsecured Claims of all
the Debtors' Insiders. Except to the extent that a Holder of an
Allowed Class 6 Claims agrees to a less favorable treatment,
Holders of Allowed Class 6 Claims shall be entitled to receive
distributions of Sale Proceeds in accordance with the waterfall set
forth in the Mediated Settlement Agreement. Class 6 is Impaired
under the Plan.
Class 8 shall consist of the Allowed Equity Interests in the
Debtors. On the Effective Date, the Equity Interests, including the
outstanding Partnership Interests in CP Hotels and outstanding
Membership Interests in CP Partners, shall be reinstated as New
Equity Interests; provided, however, that such authorized and
issued New Equity Interests in the Reorganized Debtors will not be
distributed to Allowed Equity Interest Holders until the Allowed
Claims in Classes 2, 3, 4, 5, 6, and 7 have been paid in full.
The Plan provides for payment of Allowed Claims, including
contingent, unliquidated and Disputed Claims to the extent they
become Allowed Claims, in the order of their priority, provided
however, it is unknown what recovery will be available to holders
of General Unsecured Claims. At the present time, the Debtors
believe that they will have sufficient funds, as of the Effective
Date, to pay in full the expected payments required under the Plan
to the Holders of Allowed Administrative Expense Claims and Allowed
Priority Non-Tax Claims in Class 1.
The post-Confirmation operations and marketing of the Hotel
Property shall be conducted in accordance with the Mediated
Settlement Agreement. The Independent Manager, the Independent
Auditor, and the Independent Broker will be contractually obligated
to accept instructions only if given in writing (i) jointly by the
Guillory Parties and the Lee Parties; or (ii) by order of the
Bankruptcy Court.
The Independent Broker will market the Hotel Property as provided
in the Mediated Settlement Agreement. If a sale is not concluded
and closed within 12 months, the automatic stay and discharge
injunction will terminate and ZSBNP may foreclose on the Hotel
Property under applicable non-bankruptcy law. In connection with
the marketing process, and subject to the limitations set forth in
the Mediated Settlement Agreement, the Guillory Parties may set the
asking price and make any adjustments to the asking price.
A full-text copy of the Joint Plan dated August 7, 2023 is
available at https://urlcurt.com/u?l=HXOFG5 from PacerMonitor.com
at no charge.
Attorneys for the Debtors:
Christopher Adams, Esq.
David L. Curry, Jr., Esq.
Ryan A. O'Connor, Esq.
Okin Adams Bartlett Curry LLP
1113 Vine St., Suite 240
Houston, TX 77002
Tel: 713-228-4100
Fax: 346-247-7158
Email: cadams@okinadams.com
Email: dcurry@okinadams.com
Email: roconnor@okinadams.com
About CenterPointe Hotels @ Texas II, LP
CenterPointe Hotels @ Texas II, LP is primarily engaged in renting
and leasing real estate properties.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Tex. Case No. 23-30023) on January 2,
2023. In the petition signed by James O. Guillory Jr., president,
the Debtor disclosed up to $50 million in assets and up to $10
million in liabilities.
Judge Jeffrey P. Norman oversees the case.
David L. Curry, Jr., Esq., at Okin Adams Bartlett Curry LLP,
represents the Debtor as counsel.
CHAPIN CENTER: September 14 Bid Deadline for Nursing Facility
-------------------------------------------------------------
Hilco Real Estate, LLC, announced September 14, 2023, as the
qualifying bid deadline for the bankruptcy sale of this previously
operating skilled nursing facility in Springfield, Mass.
The three-story building has been well-maintained and boasts 56
rooms, 110 parking spaces and was once licensed for 160 beds. It is
strategically located less than two miles from two highly regarded
hospitals: Baystate Medical Center and Mercy Medical Center. These
hospitals provide exceptional healthcare services and attract a
substantial patient population. This site offers a significant
capacity for providing comprehensive care to patients -- ensuring
the potential for a high-quality healthcare facility that meets the
needs of the community. Investing in a healthcare facility in
Springfield means joining a thriving medical community and tapping
into a network of collaboration and expertise.
Springfield thrives from its diverse economy -- specifically in
industries such as healthcare, education and manufacturing. The
city boasts an array of major employers, including MassMutual
Financial Group, TechSpring and Big Y Foods. Adding to its appeal,
Springfield benefits from excellent connectivity through Interstate
291, 90 and 91. These major highways provide convenient access to
nearby cities such as Hartford, Conn. (30 minutes), New Haven,
Conn. (60 minutes), and Boston, Mass. (90 minutes), further
enhancing the city's accessibility.
With the site being at the end of a cul-de-sac in a residential
area and featuring a versatile layout with ample parking spaces, it
presents an opportunity for creative repurposing. Developers can
consider converting the building into multifamily apartments or
dormitories due to Springfield's thriving student population. The
city has 15 universities in the surrounding area and four colleges
directly within its borders. Investors have an excellent
opportunity to possibly adapt the property to cater to this
lucrative market segment, capitalizing on the city's educational
landscape and allow for a steady stream of rental income.
Terry Rochford, senior vice president of business development at
Hilco Real Estate, stated, "Whether you envision transforming it
into a cutting-edge healthcare facility, creating a vibrant living
space, or contributing to the growing student housing demand, this
property allows you to play a part in shaping the future. The
adaptability of this property offers a range of possibilities to
meet market demand and maximize returns on investment."
Jonathan Cuticelli, vice president at Hilco Real Estate, added,
"Embracing this opportunity holds immense potential. Investing in
this property is not just about the physical space; it's about
investing in the well-being of individuals, the growth of a city,
and the potential for positive change."
The sale is being conducted by Order of the U.S. Bankruptcy Court
District of Massachusetts (Springfield) Bankruptcy Petition No.
23-30136, In re: Chapin Center RE LLC. Bids must be received on or
before the deadline of September 14, 2023, at 5:00 p.m. (ET) and
must be submitted on the Purchase and Sale Agreement available for
review and download from Hilco Real Estate's website.
Interested buyers should review the bid procedures for requirements
to participate in the bankruptcy sale process available on Hilco
Real Estate's website. For further information, please contact
Jonathan Cuticelli at (203) 561-8737 or jcuticelli@hilcoglobal.com
and Adam Zimmerman, MAI, at (847) 917-9323 or
azimmerman@hilcoglobal.com.
For further information on the property, sale process and terms or
to obtain access to due diligence documents, please visit
HilcoRealEstate.com or call (855) 755-2300.
About Hilco Real Estate
Hilco Real Estate ("HRE"), a Hilco Global company
(HilcoGlobal.com), is headquartered in Northbrook, Illinois (USA).
HRE is a national provider of strategic real estate disposition
services. Acting as an agent or principal, HRE uses its experience
to advise and execute strategies to assist clients in deriving the
maximum value from their real estate assets. By leveraging
multi-faceted sales strategies and techniques, aggressive
repositioning and restructuring experience, a vast and motivated
network of buyers and sellers, and substantial access to capital,
HRE exceeds expectations even in the most complex transactions.
CLAROS MORTGAGE: S&P Downgrades ICR to 'B' on Decline in Liquidity
------------------------------------------------------------------
S&P Global Ratings lowered its issuer credit and senior secured
debt ratings on Claros Mortgage Trust Inc. (CMTG) to 'B' from 'B+'.
The outlook is stable.
The downgrade reflects CMTG's declining liquidity, which could be
pressurized if it receives margin calls on it repurchase
facilities. As of July 31, 2023, CMTG's total available liquidity
had declined to $329 million ($157 million in cash on the balance
sheet and $173 million in undrawn credit capacity). Total available
liquidity was $407 million on June 30, 2023, and $555 million on
March 31, 2023.
CMTG primarily relies on repurchase facilities to fund its
originations, and that exposes the company to potential margin
calls. The outstanding financing principal balance was $5.9 billion
as of June 30, 2023, and $4.0 billion of that was financed through
repurchase facilities and subject to margin calls that could be
triggered by collateral-specific events or adverse changes in the
market, including fluctuations in interest rates and credit
spreads. CMTG has about 32% weighted average recourse on these
facilities. The liquidity position could worsen if CMTG needs to
post additional cash to meet margin call requirements upon the
occurrence of credit events at the properties and/or if credit
spreads widen. As of June 30, 2023, CMTG had $404 million in
unencumbered loans and one unencumbered real estate owned (REO)
asset of $144 million, which it could potentially use to shore up
liquidity.
Another potential liquidity demand is funding unfunded commitments
that are subject to borrowers meeting conditions outlined in each
loan agreement. As of June 30, 2023, the company had $1.5 billion
of future financing commitments, of which $933 million is expected
to be funded within a year. CMTG has $759 million of expected or
in-place financings to fund its loan commitments.
S&P said, "We expect the company to hoard liquidity by scaling back
originations. Given the macroeconomic headwinds affecting CRE
markets, we expect that CMTG will likely prioritize maintaining
liquidity over new originations. While CMTG's floating-rate
portfolio will benefit from higher interest rates, we expect the
credit quality of some loans to deteriorate as borrowers have
difficulty making interest payments or repaying maturing loans. We
expect that the lagged effects of rising interest rates will
further reduce the cushion to the 1.4x interest-coverage
requirement, but we also expect CMTG to remain covenant-compliant.
"Challenging CRE market conditions could further strain CMTG's
asset quality. CMTG's CRE portfolio of higher-risk transitional
loans--including construction, land, and operating
properties--exposes it to credit and market risks, in our view." A
deterioration in prices or confidence in CRE markets could lead to
loan losses and stress the earnings of CRE lenders. As of June 30,
2023, CMTG's $7.5 billion loan book had 41% exposure to
multifamily, 20% exposure to hospitality, and 15% exposure to
office. The weakening in asset quality is predominantly because of
the underperforming loans across all three sectors. CMTG's six
loans on nonaccruals made up about $472.9 million in principal
balance, or about 6.3% of loans at principal.
During the quarter ended June 30, 2023, the company's asset quality
further weakened as loans with an internal risk rating of 4 or
higher increased to 18% from 16% the prior quarter and 17% at
year-end 2022. This led to an increase in its credit reserves, to
$118 million ($38 million for specific underperforming loans) from
$73 million ($0.1 million for specific loans) a year before.
Additionally, the company recorded a $66.9 million charge-off after
it acquired the legal title of a mixed-use property in New York
through an assignment in lieu of foreclosure on June 30, 2023.
Of the $1.4 billion in total exposure to loans with a risk rating
of 4 or higher, an outstanding principal balance of $143 million
(1.9% of the portfolio's total outstanding principal) corresponds
to three loans with a risk rating of 5. And a principal balance of
around $1.3 billion (17.2% of the portfolio's total outstanding
principal) corresponds to 13 loans with a risk rating of 4.
S&P said, "We expect CMTG to operate with leverage of 2.0x-2.75x.As
of June 30, 2023, CMTG's leverage (as measured by debt to adjusted
total equity) was 2.3x, within our expectations. CMTG is required
to distribute at least 90% of taxable income annually as a REIT,
limiting its ability to build equity through retained earnings.
"The stable outlook reflects our expectation that CMTG will
maintain leverage and liquidity near current levels and originate a
minimum amount of new loans as it copes with difficult conditions
in CRE markets.
"We could lower the rating over the next 12 months if asset quality
meaningfully deteriorates, liquidity worsens, or leverage rises
above 2.75x.
"We could raise the rating over the next 12 months if CMTG
continues to operate with leverage below 2.75x, if asset quality
stabilizes, and if the company, in our view, maintains sufficient
liquidity and covenant cushion."
CLUBHOUSE MEDIA: Incurs $360K Net Loss in Second Quarter
--------------------------------------------------------
Clubhouse Media Group, Inc. filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing a net loss
of $359,766 on $786,489 of net total revenue for the three months
ended June 30, 2023, compared to a net loss of $4.93 million on
$1.90 million of net total revenue for the three months ended June
30, 2022.
For the six months ended June 30, 2023, the Company reported a net
loss of $2.44 million on $2.14 million of net total revenue
compared to a net loss of $8.42 million on $2.71 million of net
total revenue for the six months ended June 30, 2022.
As of June 30, 2023, the Company had $1.14 million in total assets,
$11 million in total liabilities, and a total stockholders' deficit
of $9.86 million.
The Company had a net loss for the six months ended June 30, 2023,
negative working capital of $(10,665,527) as of June 30, 2023, and
stockholder's deficit of $(9,864,589). The Company said these
factors among others raise substantial doubt about its ability to
continue as a going concern.
Clubhouse stated, "While the Company is attempting to generate
additional revenues, the Company's cash position may not be
significant enough to support the Company's daily operations.
Management intends to raise additional funds by way of a public or
private offering. Management believes that the actions presently
being taken to further implement its business plan and generate
revenues provide the opportunity for the Company to continue as a
going concern. While the Company believes in the viability of its
strategy to generate revenues and in its ability to raise
additional funds, there can be no assurances to that effect. The
ability of the Company to continue as a going concern is dependent
upon the Company's ability to further implement its business plan
and generate revenues."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1389518/000149315223027109/form10-q.htm
About Clubhouse Media
Las Vegas, Nevada-based Clubhouse Media Group, Inc. is an
influencer-based social media firm and digital talent management
agency. The Company offers management, production and deal-making
services to its handpicked influencers. The Company's management
team consists of successful entrepreneurs with financial, legal,
marketing, and digital content creation expertise.
Clubhouse Media reported a net loss of $7.53 million for the year
ended Dec. 31, 2022, compared to a net loss of $22.24 million for
the year ended Dec. 31, 2021. As of Dec. 31, 2022, the Company had
$1.24 million in total assets, $8.92 million in total liabilities,
and a total stockholders' deficit of $7.68 million.
Spokane, Washington-based Fruci & Associates II, PLLC, the
Company's auditor since 2020, issued a "going concern"
qualification in its report dated March 30, 2023, citing that the
Company has stockholder's deficit, net losses, and negative working
capital. These factors raise substantial doubt about the Company's
ability to continue as a going concern.
COLONY DONKEY: Court OKs Cash Collateral Access on Final Basis
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Texas,
Sherman Division, authorized Colony Donkey, LLC to use cash
collateral on a final basis in accordance with the budget.
Pearl Capital, Rewards Network, and the Texas Comptroller of Public
Accounts may assert liens on the Debtor's operations. The secured
creditors assert liens on, among other things, the inventory
generated by the Debtor.
As adequate protection Pearl Funding, Rewards Network, and Texas
Comptroller are granted replacement liens under 11 U.S.C. section
552, to the extent of any diminishment in the value of One World
Bank or the Texas Comptroller's interest in such cash collateral,
in accordance with their existing priority.
Neither Texas sales tax nor Texas mixed beverage sales tax
collected by the Debtors are part of the Debtors' cash, proceeds or
accounts receivable; they do not form a part of any other secured
creditor's collateral; and they may not be used by the Debtors in
their operations. The Debtors will not utilize Trust Funds Sales
Taxes for any purpose other than remittance to the Texas
Comptroller.
The State Tax Liens will continue, and the Texas Comptroller will
be granted replacement liens on all of the Debtors property. All
liens will attach in the same order of priority as existed on the
Petition Date.
Beginning on August 15, 2023, and continuing monthly thereafter,
the Debtor will remit adequate protection payments in the amount of
$3,000 to the Comptroller toward the pre-petition Trust Funds Sales
Taxes ($1,000 to Colony Donkey Sales Tax; $1,000 to Colony Donkey
Mixed Beverage Sales Tax; and, $1,000 to Lewisville Donkey Sales
Tax). The payments must be remitted so as to be received by the
Texas Comptroller no later than the 15th day of each month
beginning August 15, 2023 (or 14 days after entry of this Order).
Each $3,000 payment will be applied first to the oldest period of
liability until paid in full. The payments will be make to the
Comptroller, c/o Kimberly Walsh, P.O. Box 12548, Austin, Texas
78711-2548. The payments are for adequate protection and the Court
reserves the right to make any determination as to the validity of
the claims of the Comptroller and the application of these payments
to any allowed claim of the Comptroller. The Debtor is authorized
to make the payment 14 days after the entry of the order, unless
any party objects to the payment within the 14 day time frame.
In addition, Texas sales taxes and Texas mixed beverage sales taxes
collected by Debtors post-petition are not property of the estate,
but instead remain property of the Texas Comptroller until paid.
Payment of the post-petition taxes is mandatory under 28 U.S.C.
section 959(b) and 960. The Texas Comptroller does not consent to
the use of its post-petition Sales Tax Trust Funds for any purpose
other than remitting to the Texas Comptroller.
Pursuant to 11 U.S.C. section 363(e), the Texas Comptroller
requests adequate protection for its post-petition Sales Tax Trust
Funds by having all sales taxes and mixed beverage sales taxes
collected post-petition segregated from funds of the Debtor and
remitted to the Texas Comptroller.
A copy of the order and the Debtor's budget is available at
https://urlcurt.com/u?l=QgOXJ9 from PacerMonitor.com.
The Debtor projects total expenses, on a monthly basis, as
follows:
$97,258 for August 2023;
$98,585 for September 2023; and
$97,258 for October 2023.
About Colony Donkey, LLC
Colony Donkey, LLC owns and operates a restaurant in The Colony,
Texas.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D. Tex. Case No. 23-41174) on July 3,
2023. In the petition signed by Jessica Putnam, managing member,
the Debtor disclosed up to $50,000 in assets and up to $500,000 in
liabilities.
Judge Brenda T. Rhoades oversees the case.
Eric A. Liepins, Esq., represents the Debtor as legal counsel.
CONDOR INVERSIONES: Voluntary Chapter 11 Case Summary
-----------------------------------------------------
Three affiliates that concurrently filed voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code:
Debtor Case No.
Condor Inversiones SpA 23-90761
Avenida Apoquindo 4800
Torre Dos Piso 15, 1501-A
Las Condes, Santiago, XIII Region
Metropolitana, Chile, 7560973
Condor II, LLC 23-90760
700 Milam Street
Suite 1300
Houston, Texas 77002
Huemul Inversiones SpA 23-90762
Avenida Apoquindo 4800
Torre Dos Piso 15, 1501-A
Las Condes, Santiago,
XIII Region Metropolitana, Chile, 7560973
Business Description: The Debtors are in the business of
electric power generation, transmission, and
distribution.
Chapter 11 Petition Date: August 11, 2023
Court: United States Bankruptcy Court
Southern District of Texas
Debtors' Counsel: Matthew D. Cavenaugh, Esq.
Kristhy M. Peguero, Esq.
J. Machir Stull, Esq.
William T. Farmer, Esq.
JACKSON WALKER LLP
1401 McKinney Street, Suite 1900
Houston, Texas 77010
Tel: (713) 752-4200
(713) 752-4284
Fax: (713) 752-4221
Email: mcavenaugh@jw.com
kpeguero@jw.com
mstull@jw.com
wfarmer@jw.com
- and -
Heather Lennox, Esq.
Benjamin Rosenblum, Esq.
JONES DAY
250 Vesey Street
New York, New York 10281
Tel: (212) 326-3939
Fax: (212) 755-7306
Email: hlennox@jonesday.com
brosenblum@jonesday.com
- and -
Matthew C. Corcoran, Esq.
JONES DAY
325 John H. McConnell Boulevard, Suite 600
Columbus, Ohio 43215
Tel: (614) 469-3939
Fax: (614) 461-4198
Email: mccorcoran@jonesday.com
Estimated Assets
(on a consolidated basis): $100 million to $500 million
Estimated Liabilities
(on a consolidated basis): $100 million to $500 million
The petitions were signed by Mark A. McDermott as administrator.
The Debtors stated they have no known unsecured creditors.
Full-text copies of the petitions are available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/GYSZIBA/Condor_Inversiones_SpA__txsbke-23-90761__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/GPVVU2Q/Condor_II_LLC_Jointly_Administered__txsbke-23-90760__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/GJDJZ6I/Huemul_Inversiones_SpA_Jointly__txsbke-23-90762__0001.0.pdf?mcid=tGE4TAMA
CONVERGINT TECHNOLOGY: S&P Cuts Sec. 1st-Lien Debt Rating to 'B-'
-----------------------------------------------------------------
S&P Global Ratings lowered its issue-level rating on Convergint
Technology Group Holdings LLC's senior secured first-lien debt to
'B-' from 'B' and revised its recovery rating to '3' from '2' on
the company's proposed $175 million incremental first-lien term
loan. The new issue will be fungible with Convergint's existing
$327 million incremental debt. The '3' recovery rating indicates
its expectation for meaningful recovery (50%-70%; rounded estimate:
65%) on the combined $1.8 billion first-lien term loan.
S&P said, "We revised our recovery rating on the company's
first-lien debt to reflect the lower recovery prospects for its
lenders in our simulated default scenario due to the increased
amount of priority debt in its capital structure following the
proposed transaction. Our '6' recovery rating on Convergint's
second-lien debt is unchanged, indicating our expectation for
negligible (0%-10%; rounded estimate: 0%) recovery for unsecured
lenders in the event of a payment default.
"The company will use the proceeds from the proposed term loan to
pay down $99 million of the outstanding borrowings on its existing
$200 million revolver, fund ongoing and future acquisitions, and
for general corporate purposes. We anticipate Convergint will use
some of the cash to fund an acquisition that will contribute to an
increase in its Asia-Pacific (APAC) EBITDA, which we currently view
as credit neutral.
"Our B- issuer credit rating with the stable outlook is unchanged.
We expect the company's 2023 operating performance will remain
roughly in line with our base-case forecast, though its EBITDA came
in slightly lower than we assumed in February. Convergint's EBITDA
margins declined in the first half of the year on elevated selling,
general, and administrative (SG&A) expenses due to one-time
operational challenges in Latin America and Europe that we believe
it is addressing. We expect the company will improve its margins
sequentially through 2024. The supply chain issues that stalled the
conversion of its backlog to revenue through 2022 have alleviated
substantially. Therefore, we expect the company will convert its
over $2 billion backlog into increased revenue in the back half of
the year, which will also support improved EBITDA margins closer to
our forecast level.
"We forecast Convergint's free operating cash flow (FOCF) will be
negligible in fiscal year 2023 because of the added interest
burden. We expect the company's FOCF will improve the following
year as its strong growth trajectory, backlog, and acquisitions
expand its EBITDA."
ISSUE RATINGS--RECOVERY ANALYSIS
Key analytical factors
-- S&P's simulated default scenario assume a default occurring due
to a prolonged economic recession, a material decline in service
quality, or increased competitive pressures that lead to high
customer attrition and a substantial EBITDA decline.
-- S&P estimates that under a bankruptcy restructuring, Convergint
would operate as a going concern. As such, S&P used an enterprise
value (EV) methodology to gauge its recovery prospects and applied
a 6x multiple to our projected emergence EBITDA. S&P bases its
assessment on the company's limited history of operating at its
current scale and high proportion of transaction-based revenue.
-- DG Investment Intermediate Holdings 2 Inc. is the borrower of
the funded debt. The first-lien and second-lien credit facilities
are guaranteed by Convergint Technology Group Holdings LLC and each
existing and future wholly owned U.S. domestic subsidiary of the
borrower. The debt will also be secured by all tangible and
intangible assets of the borrower, with the first-lien debt having
a priority claim over the second-lien debt.
Simulated default assumptions
-- Simulated year of default: 2025
-- EBITDA at emergence: About $220 million
-- Implied enterprise value multiple: 6x
Simplified waterfall
-- Net EV (after 5% admin. costs): About $1.3 billion
-- Valuation split (obligor/nonobligor): 95%/5%
-- Collateral for secured creditors: About $1.3 billion
-- First-lien claims: $1.9 billion
--First-lien recovery expectations: 50%-70% (rounded estimate:
65%)
-- Second-lien claims: $293 million
--Second lien recovery expectations: 0%-10% (rounded estimate:
0%)
CREATING SCHOLARS: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Creating Scholars Through Therapy Corporation
FKA Creating Scholars Through Therapy, LLC
3321 W Mercury Blvd., Suite D
Hampton, VA 23666
Business Description: The Debtor is a community based behavioral
health provider dedicated to reshaping
individuals' mental state through mental
health services in the form of individual,
group, family, and outpatient counseling.
Chapter 11 Petition Date: August 10, 2023
Court: United States Bankruptcy Court
Eastern District of Virginia
Case No.: 23-50562
Debtor's Counsel: Paul Driscoll, Esq.
ZEMANIAN LAW GROUP
223 East City Hall Ave.
Norfolk, VA 23510
Tel:(757) 622-0090
Email: paul@zemanianlaw.com
Estimated Assets: $100,000 to $500,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Nabila S. White as president and chief
executive officer.
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/X3ZAOEY/Creating_Scholars_Through_Therapy__vaebke-23-50562__0001.0.pdf?mcid=tGE4TAMA
CS LEE: Court OKs Interim Cash Collateral Access
------------------------------------------------
The U.S. Bankruptcy Court for the District of Massachusetts
authorized CS Lee, DMD, MMSC, PLLC to use cash collateral on an
interim basis in accordance with the budget, with a 10% variance.
The Debtor is permitted to collect and use prepetition assets in
which Funding Circle claims a security interest.
The Debtor is authorized to make monthly adequate protection
payments to Funding Circle in the amount of $1,973.
If it is later determined that Funding Circle does not possess a
fully secured claim, such claim is not properly perfected, or its
lien is avoidable, the Court may enter an order requiring the
adequate protection payments be applied to principal or be subject
to disgorgement.
A further hearing on the matter is set for August 24, 2023 at 2:30
p.m. Objections are due August 22.
A copy of the court's order and the Debtor's budget is available at
https://urlcurt.com/u?l=SWsaHH from PacerMonitor.com.
The Debtor projects total expenses, on a monthly basis, as
follows:
$10,473 for August 2023;
$11,204 for September 2023; and
$10,473 for October 2023.
About CS Lee, DMD, MMSC, PLLC
CS Lee, DMD, MMSC, PLLC is a Massachusetts limited liability
company that owns and operates a dental office, located in
Bridgewater, Massachusetts. The Debtor's dental office is situated
on the property owned by 555 Bedford Street, LLC, which is managed
by the Debtor's principal. The Debtor's principal, Chong Lee, is
the sole dentist at the office and employees three part time
employees.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Mass. Case No. 23-11184) on July 26,
2023. In the petition signed by Lee, the Debtor disclosed up to
$50,000 in assets and up to $500,000 in liabilities.
Judge Christopher J. Panos oversees the case.
Peter M. Daigle, Esq., at Daigle Law Office, represents the Debtor
as legal counsel.
CYXTERA DC: $100MM Bank Debt Trades at 42% Discount
---------------------------------------------------
Participations in a syndicated loan under which Cyxtera DC Holdings
Inc is a borrower were trading in the secondary market around 58.5
cents-on-the-dollar during the week ended Friday, August 11, 2023,
according to Bloomberg's Evaluated Pricing service data.
The $100 million facility is a Term loan that is scheduled to
mature on May 1, 2024. About $97.5 million of the loan is
withdrawn and outstanding.
Cyxtera DC Holdings, Inc. provides data center services.
CYXTERA TECHNOLOGIES: Taps Deloitte as Tax Services Provider
------------------------------------------------------------
Cyxtera Technologies, Inc., and its affiliates received approval
from the U.S. Bankruptcy Court for the District of New Jersey to
hire Deloitte Tax, LLP.
The firm's services include tax advisory services relating to the
Debtors' restructuring. The hourly rates charged by the firm for
such services are as follows:
Partner/Principal/Managing Director $960 per hour
Senior Manager $815 per hour
Manager $700 per hour
Senior Consultant/Senior Staff $545 per hour
Consultant/Staff $445 per hour
Deloitte will also provide advice on federal, foreign, state and
local income tax matters. The hourly rates for such services are
as follows:
Partner/Managing Director $750 per hour
Senior Manager $660 per hour
Manager $570 per hour
Senior $450 per hour
Staff $360 per hour
The Debtors agreed to reimburse the firm for work-related expenses
incurred.
Jeffrey van Gelder, a partner at Deloitte, disclosed in a court
filing that his firm is a "disinterested person" pursuant to
Section 101(14) of the Bankruptcy Code.
Deloitte can be reached at:
Jeffrey van Gelder
Deloitte Tax, LLP
Brickell World Plaza
600 Brickell Avenue, Suite 3700
Miami, FL, 33131-3090
Tel: +1 305 372 3100
About Cyxtera Technologies
Headquartered in Coral Gables, Fla., Cyxtera Technologies, Inc. --
https://www.cyxtera.com -- is a global data center company
providing retail colocation and interconnection services. It
provides a suite of connected and automated infrastructure and
interconnection solutions to more than 2,300 enterprises, service
providers and government agencies around the world, enabling them
to scale faster, meet rising consumer expectations and gain a
competitive edge.
Cyxtera and its affiliates sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. D.N.J. Lead Case No. 23-14853) on
June 4, 2023. Eric Koza, chief restructuring officer, signed the
petition.
Cyxtera reported $131 million in assets and $2.679 billion in
liabilities as of Dec. 31, 2022.
Judge John K. Sherwood oversees the case.
The Debtors tapped Kirkland and Ellis, LLP, Kirkland and Ellis
International, LLP and Cole Schotz P.C. as bankruptcy counsels;
Guggenheim Securities, LLC as investment banker; AlixPartners, LLP
as restructuring advisor; and Deloitte Tax, LLP as tax services
provider. Kurtzman Carson Consultants, LLC is the noticing and
claims agent.
An ad hoc group of first lien lenders is represented by Gibson,
Dunn & Crutcher LLP as legal counsel and Houlihan Lokey, Inc. as
financial advisor.
On June 20, 2023, the U.S. Trustee for Region 3 appointed an
official committee to represent unsecured creditors in these cases.
Pachulski Stang Ziehl & Jones, LLP and Alvarez & Marsal North
America, LLC serve as the committee's legal counsel and financial
advisor, respectively.
DIEBOLD NIXDORF DUTCH: Chapter 15 Case Summary
----------------------------------------------
Chapter 15 Debtor: Diebold Nixdorf Dutch Holding B.V.
Papendorpseweg 100
3528 BJ Utrecht
The Netherlands
Business Description: The Debtor operates a global software
development center that markets and
sells software to multinational banks.
Chapter 15 Petition Date: June 12, 2023
Court: United States Bankruptcy Court
Southern District of Texas
Case No.: 23-90729
Judge: Hon. David R Jones
Foreign Representative: Carlin Adrianopoli
227 West Monroe Street Suite 900
Chicago, IL 60606
United States
Foreign Proceeding: Dutch Scheme Proceeding of Diebold
Nixdorf Dutch Holding B.V. (C/13/23/132)
Foreign
Representative's
Counsel: Matthew D. Cavenaugh, Esq.
JACKSON WALKER LLP
1401 McKinney Street, Suite 1900
Houston TX 77010
Tel: (713) 572-4200
Email: mcavenaugh@jw.com
Estimated Assets: Unknown
Estimated Debt: Unknown
A full-text copy of the Chapter 15 petition is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/4VXIYEA/Diebold_Nixdorf_Dutch_Holding__txsbke-23-90729__0001.0.pdf?mcid=tGE4TAMA
DIFFUSION PHARMACEUTICALS: Incurs $2.1M Net Loss in Second Quarter
------------------------------------------------------------------
Diffusion Pharmaceuticals Inc. filed with the Securities and
Exchange Commission its Quarterly Report on Form 10-Q disclosing a
net loss of $2.11 million for the three months ended June 30, 2023,
compared to a net loss of $4.19 million for the three months ended
June 30, 2022.
For the six months ended June 30, 2023, the Company reported a net
loss of $6.21 million compared to a net loss of $8.72 million for
the six months ended June 30, 2022.
As of June 30, 2023, the Company had $15.69 million in total
assets, $1.46 million in total liabilities, and $14.23 million in
total stockholders' equity.
As of June 30, 2023, the Company had $15.0 million in cash and cash
equivalents, working capital of $14.2 million and an accumulated
deficit of $151.8 million.
Diffusion said, "We expect to continue to incur net losses for the
foreseeable future. We intend to use our existing cash and cash
equivalents to fund our working capital, cover expenditures related
to the Merger, and, subject to the completion and outcome of our
strategic review process, research and development of our product
candidates."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/0001053691/000143774923022535/dffn20230630_10q.htm
About Diffusion Pharmaceuticals
Diffusion Pharmaceuticals Inc. is a biopharmaceutical company
developing novel therapies that enhance the body's ability to
deliver oxygen to the areas where it is needed most. The Company's
lead product candidate, TSC, is being developed to enhance the
diffusion of oxygen to tissues with low oxygen levels, also known
as hypoxia, a serious complication of many of medicine's most
intractable and difficult-to-treat conditions.
Diffusion reported a net loss of $15.59 million in 2022, a net loss
of $24.10 million in 2021, a net loss of $14.18 million in 2020,
and a net loss of $11.80 million in 2019.
DREAM FINDERS: Fitch Assigns First Time 'BB-' LongTerm IDR
----------------------------------------------------------
Fitch Ratings has assigned a Long-Term Issuer Default Rating (IDR)
of 'BB-' to Dream Finders Homes, Inc. (NYSE: DFH). Fitch has also
assigned a 'BB-'/'RR4' rating to the company's senior unsecured
revolving credit facility and its proposed offering of senior
unsecured notes and a 'B'/'RR6' rating to its convertible preferred
stock. The senior unsecured notes will rank pari passu with the
unsecured revolving credit facility. Proceeds from the notes
issuance will be used to repay borrowings under the revolver. The
Rating Outlook is Stable.
The 'BB-' IDR reflects the company's modest leverage, its
conservative operating model of acquiring land almost exclusively
through option contracts, and an expectation of positive cash flow
from operations (CFO) during most periods in a housing cycle. The
ratings also reflect the company's limited geographic and product
diversification, historically aggressive growth strategy, and
concentrated ownership structure.
KEY RATING DRIVERS
Limited Geographic and Product Diversification: The company is
meaningfully less geographically diversified compared with most of
the U.S. homebuilders in Fitch's coverage. DFH operates 220
communities across eight states, but has meaningful concentration
in Jacksonville and Orlando, FL, and the state of Texas, with these
markets accounting for 68.5% of 2022 revenues. This leaves the
company exposed to an outsized impact during regional downturns.
The company's core focus is on entry-level and first-time move-up
homebuyers, but also provides offerings for second move-up buyers.
Modest Leverage: Fitch-calculated net debt to capitalization
(excluding $50 million of cash classified by Fitch as not readily
available for working capital and including convertible preferred
stock as debt) was 51.5% as of June 30, 2023. The company has
minimal headroom under the net debt to capitalization negative
sensitivity of 55% for the 'BB-' IDR, but Fitch expects the cushion
to expand by year-end 2023 as the company retains its earnings.
Fitch expects the company's net debt to capitalization to approach
45% at year-end 2023 and between 35%-45% at the end of 2024.
EBITDA leverage was 2.1x for the June 30, 2023 LTM period and Fitch
expects this ratio will be between 2.0x-3.0x in 2023 and 2024,
providing sufficient rating headroom relative to the leverage
negative sensitivity of 4.0x.
Land-Light Strategy: DFH operates an asset-light lot acquisition
strategy primarily through finished lot option contracts and land
bank option contracts. The company owns a one-year supply of lots,
81% of which are homes in backlog. The company controls an
additional 4.7 years of land through option contracts. Fitch views
DFH's land strategy positively, as write-downs and impairments
should primarily be limited to forfeiture of option deposits during
cyclical downturns.
Option deposits totaled $247.9 million as of 2Q23 and construction
in process and finished homes accounted for 85.6% of owned real
estate inventory.
Cash Flow: Fitch expects the company will generate positive CFO
during most periods in a housing cycle due to its land-light
strategy. Fitch expects DFH to report CFO of $100 million-$150
million in 2023 and 3.5%-4.5% of homebuilding revenues in 2024. The
company generated negative CFO in 2022 due to elongated cycle times
and higher investments in quick move-in homes. Construction in
process and finished homes of $1.2 billion is about 1.4x its
construction line debt.
Stable Margins: Fitch expects DFH to report relatively stable
margins during the next few years despite weak order activity
during the second half of 2022 and into 1Q23. Net orders improved
16% during 2Q23. Fitch expects revenues will grow 3%-5% this year
and decline 1%-3% in 2024. Fitch expects EBITDA margins will expand
50-70 bps in 2023 but will fall 25-75 bps in 2024 due to elevated
incentives and price adjustments to drive demand.
Financial Flexibility: DFH has sufficient liquidity in terms of
cash, revolver availability and funds from operations (FFO) to
sustain its operations, replenish its existing inventory and grow
modestly. However, Fitch views the company's financial flexibility
as a limiting factor given its reliance on its revolving credit
facility, which had $218 million of availability as of June 30,
2023 and expires in July 2026. The proposed notes issuance, which
will be used to repay revolver borrowings, provides the company
with a longer-term maturity and additional capacity under the
revolver should it grow its operations and inventory.
Aggressive Growth Strategy: DFH has grown meaningfully since its
inception in 2009 and is now the 14th largest homebuilder in the
U.S. by 2022 deliveries. Although internal growth has been
substantial, a meaningful portion of its growth has been from
acquisitions - both large and small. In 2021, the company acquired
McGuyer Homebuilders, Inc. for $471 million. This acquisition
increased the company's presence in the Austin metro market and
expanded its operations into the Texas markets of Houston, Dallas
and San Antonio. The company issued $150 million of convertible
preferred stock and borrowings under its revolving credit facility
to fund the purchase price. Fitch expects the company will continue
to evaluate acquisitions, but will likely focus on internal growth
opportunities or bolt-on acquisitions to enter new markets or
enhance its presence in existing markets.
Ownership Structure: DFH is a public company but with concentrated
ownership. Mr. Zalupski, DFH's founder, President, CEO and
Chairman, exerts significant influence on the company given the 85%
combined voting power of DFH's Class A and Class B common stock.
The company has so far been disciplined with its capital allocation
strategy, including investing all of the earnings back into the
business.
DERIVATION SUMMARY
DFH's closest peers are M/I Homes, Inc. (BB/Positive), Meritage
Homes Corporation (BB+/Stable) and M.D.C. Holdings, Inc.
(BBB-/Stable). DFH was the 14th largest U.S. homebuilder in 2022
and delivered 7,221 homes during the LTM ending June 30, 2023. By
comparison, M/I Homes (13th largest) delivered 8,407 homes, MDC
(11th largest) delivered 8,801 homes, and Meritage (5th largest)
delivered 14,414 homes during that period.
DFH's net debt to capitalization and EBITDA leverage are higher and
EBITDA margins are lower than these peers. The company employs a
more conservative land-light strategy and its owned-lot position is
meaningfully lower than these higher-rated peers. Fitch expects the
company will generate more consistent CFO than these peers over the
long term.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within The Rating Case for the Issuer:
-- Single-family housing starts decline 15%-20% in 2023 and
improve slightly in 2024;
-- Homebuilding revenues increase 3%-5% in 2023 and decline 1%-3%
in 2024;
-- EBITDA margins of 13%-14% in 2023 and 12.5%-13.5% in 2024;
-- CFO of $100 million to $150 million in 2023 and 3.5%-4.5% of
homebuilding revenues in 2024;
-- Net debt to capitalization of 45%-50% in 2023 and 35%-45% in
2024;
-- EBITDA leverage between 2.0x-3.0x in 2023 and 2024.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- The company further enhances its geographic diversification and
local market leadership positions;
-- Fitch's expectation that net debt to capitalization will
sustain below 45%;
-- Fitch's expectation that EBITDA leverage will consistently be
below 3.5x.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Net debt to capitalization sustained above 55%
-- EBITDA leverage consistently above 4.0x;
-- EBITDA interest coverage ratio falls below 2.5x;
-- Deterioration in the company's liquidity profile, including
consistently negative CFO and limited availability under its
revolving credit facility.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Non-Financial Corporate
issuers have a best-case rating upgrade scenario (defined as the
99th percentile of rating transitions, measured in a positive
direction) of three notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of four notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are
based on historical performance.
LIQUIDITY AND DEBT STRUCTURE
Sufficient Liquidity: DFH has sufficient liquidity with $292.5
million of cash as of June 30, 2023 and about $218 million of
borrowing availability under its $1.125 billion revolving credit
facility. In July 2023, the company amended the credit facility,
which increased the commitment to $1.24 billion and extended the
maturity date to July 2026 ($155 million of the commitments did not
extend and will mature in June 2025).
Manageable Debt Maturity Schedule: The company has no near-term
debt maturities beyond its revolver. Holders of the company's
convertible preferred stock can convert these securities into Class
A common stock after the fifth anniversary of its issuance (Sept.
1, 2026). The company also has the option to call these securities
during the fourth year following its issuance.
ISSUER PROFILE
Dream Finders Homes, Inc. is the 14th largest homebuilder in the
U.S., delivering 6,878 homes during 2022. The company began
operations in 2009 and operates 220 active communities across 8
states. It offers a range of single-family homes with a core focus
on entry-level and first-time move-up homebuyers, but also provide
offerings for second move-up buyers.
SUMMARY OF FINANCIAL ADJUSTMENTS
Historical and projected EBITDA is adjusted to add back non-cash
stock-based compensation and interest expense included in cost of
sales and also excludes impairment charges and land option
abandonment costs. Fitch also excludes lot option fees/deposits
from interest incurred.
-- Fitch assigned 0% equity credit to the company's $150 million
convertible preferred stock.
-- Fitch classifies $50 million of unrestricted cash as not
readily available for working capital purposes.
ESG CONSIDERATIONS
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
DYNAMIC TECHNOLOGIES: Chapter 15 Case Summary
---------------------------------------------
Lead Debtor: Dynamic Technologies Group Inc
2100-222 3rd Avenue S.W.
Calgary, Alberta T2P0B4
Canada
Business Description: Dynamic is engaged in the design
engineering, production, and
commissioning of iconic, media-based
attractions and ride systems for the
global theme park industry and popular
tourist destinations.
Foreign Proceeding: 2301-03179 Court of King's Bench Alberta
Judicial Centre Calgary
Chapter 15 Petition Date: May 17, 2023
Court: United States Bankruptcy Court
Northern District of Texas
Five affiliates that concurrently filed voluntary petitions for
relief under Chapter 15 of the Bankruptcy Code:
Debtor Case No.
------ --------
Dynamic Technologies Group Inc (Lead Case) 23-41416
Dynamic Attractions Inc 23-41417
Dynamic Attractions Ltd 23-41418
Dynamic Entertainment Group Ltd 23-41419
Dynamic Structures Ltd 23-41421
Judge: Hon. Edward L. Morris
Foreign Representative: Dynamic Technologies Group Inc.
2100-222 3rd Avenue S.W.
Calgary Alberta T2P0B4
Canada
Allan Francis
Foreign Representative's
Counsel: Adam Swick, Esq.
AKERMAN LLP
500 West 5th Street, Suite 1201
Austin, Texas 78701
Tel: (737) 999-7100
Fax: (512) 623-6701
Email: adam.swick@akerman.com
- and -
David W. Parham, Esq.
Laura M. Taveras, Esq.
2001 Ross Avenue, Suite 3600
Dallas, TX 75201
Tel: (214) 720-4300
Fax: (214) 981-9339
Email: david.parham@akerman.com
laura.taveras@akerman.com
Estimated Assets: Unknown
Estimated Debt: Unknown
A full-text copy of the Lead Debtor's petition is available for
free at PacerMonitor.com at:
https://www.pacermonitor.com/view/YR7ZGOA/Dynamic_Technologies_Group_Inc__txnbke-23-41416__0001.0.pdf?mcid=tGE4TAMA
EARL FREDDY INVEST: Case Summary & Two Unsecured Creditors
----------------------------------------------------------
Debtor: Earl Freddy Invest C, LLC
6619 Foothill Blvd
Oakland, CA 94605
Chapter 11 Petition Date: August 10, 2023
Court: United States Bankruptcy Court
Northern District of California
Case No.: 23-40987
Judge: Hon. William J. Lafferty
Debtor's Counsel: E. Vincent Wood, Esq.
THE LAW OFFICES OF E. VINCENT WOOD
2950 Buskirk Ave., #300
Walnut Creek, CA 94597
Tel: (925) 278-6680
Fax: (925) 955-1655
Email: vince@woodbk.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Desmond Gumbs as managing director.
A full-text copy of the petition containing, among other items, a
list of the Debtor's two unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/6MLLXII/Earl_Freddy_Invest_C_LLC__canbke-23-40987__0001.0.pdf?mcid=tGE4TAMA
ELEVATE TEXTILES: S&P Assigns 'B-' ICR, Outlook Negative
--------------------------------------------------------
S&P Global Ratings assigned its 'B-' issuer credit rating to
U.S.-based Elevate Textiles Holding Corp. At the same time, S&P
assigned its 'B+' issue-level rating to the company's $104.5
million first-out term loan. The recovery rating is '1', indicating
its expectation of very high (90%-100%; rounded estimate: 95%)
recovery. S&P assigned its 'B-' issue-level rating to the company's
$249.6 million last-out term loan. The recovery rating is '4',
indicating its expectation of average (30%-50%; rounded estimate:
40%) recovery.
The negative outlook reflects the potential for a lower rating
within the next 12 months if profitability and free operating cash
flow (FOCF) continue to decline, such that adjusted EBITDA interest
coverage falls below 1.5x, FOCF is negative, and S&P believes the
capital structure is unsustainable.
The debt recapitalization transaction decreased adjusted leverage,
but S&P's negative outlook reflects the potential for a lower
rating within the next 12 months if profitability and cash flow
continue to decline.
Elevate recently completed a debt recapitalization transaction,
which resulted in a change of control, with the company now owned
by a group of investment firms that were its previous lending
group. The previous financial sponsor Platinum Equity now owns 2%
of the company's equity, and no single holder has more than 10%
equity ownership. The owner group will also appoint an independent
board of directors to provide oversight to the company's leadership
team. The former first-lien term loan and second-lien term loan
lenders contributed about $100 million in a new money first-lien
first-out term loan. The former $644 million in first-lien and
second-lien debt was partially converted into a $249.6 million
first-lien last-out term loan and the remainder was converted into
common equity. The recap transaction also extended the maturities
on the asset-based lending (ABL) facility and term loans to 2027.
S&P said, "We estimate pro forma adjusted leverage in the mid-4x
area and adjusted EBITDA interest coverage of mid-1x at the close
of the transaction. We expect Elevate's sales to decline by the
high single-digit percentage and adjusted EBITDA to decline by
high-teens percentage in 2023, driven by lower product volume due
to eroding consumer spending and weakening demand for discretionary
products, which will lead to leverage increasing to the low-5x area
and slightly lower EBITDA interest coverage."
The recently closed transaction provided Elevate with additional
liquidity.
The recapitalization provided the company with new money of $100
million. S&P said, "The company has about $ 191.5 million of
liquidity at the close of the transaction, including about $94.5
million cash and $97 million revolver availability at close, which
we expect will support its operations and meet its obligations over
the near term. We do not expect the company to face near-term
liquidity constraints given its liquidity position and lack of
near-term debt maturities. We expect FOCF cash flow to be negative
in 2023 due to lower sales volume and increase in inventory
level."
S&P's ratings reflect the company's participation in the highly
competitive and fragmented global textile industry, narrow product
focus, and raw material cost volatility.
Elevate has about $1.3 billion in revenue, but is still a
relatively small niche player in the global textile market. The
company participates in a highly competitive and fragmented global
textile industry and has a narrow product focus in the fabric and
threads industry. Elevate is also exposed to raw material cost
volatility, primarily cotton and oil. Fluctuations in cotton and
oil prices can hurt the company's margins if it cannot successfully
pass those costs to customers. Cotton and petroleum-based materials
comprise 70% of the company's total raw material cost, which expose
the company to commodity price risks. Approximately 65%-70% of the
company's sales are premium products, and the rest are private
label.
Nevertheless, Elevate provides premier textile solutions including
premium threads, denim, and technical fabrics. Apparel, denim, and
industrial account for about 70% of its revenue, and the rest comes
from other end markets such as the automotive and military sectors.
The company's A&E and Gutermann brand has the No. 1 position in
North America and No. 2 position in premium threads market
globally. The thread market is less fragmented than fabric with the
top two players holding 48% of the market share. The company has an
entrenched position in technical fabric and sells to various end
markets including fire services, military, and performance apparel.
S&P considers the company's manufacturing facilities to be
strategically located near its customers' manufacturing sites and
have the flexibility to replicate consistent quality across its
sites. The company generates approximately 35% of its revenue in
the U.S. and the rest from Asia, Latin America, and Europe. The
technical fabrics business is more diversified and sold to various
end markets while threads products are mainly sold to the apparel
end markets.
The negative outlook reflects the potential for a lower rating
within the next 12 months if Elevate's profitability and cash flow
continue to decline, such that adjusted EBITDA interest coverage
falls below 1.5x, FOCF is negative, and we believe the capital
structure is unsustainable.
S&P could take a negative rating action if it believes the capital
structure is unsustainable.
This could happen if:
-- Consumer demand remains weak as a recession hampers the
consumer's ability to spend, and the sales and profitability
deteriorate, such that its EBITDA interest coverage falls below
1.5x.
-- S&P expects deeper and protracted levels of negative FOCF.
S&P could revise its outlook to stable if:
-- The demand environment improves and the company increases sales
and profitability, such that its EBITDA interest coverage is
approaching 2x.
-- The company generates positive FOCF and comfortably exceeds
debt service requirements.
ENERGY PLUS: Unsecureds Will Get 100% of Claims in 60 Months
------------------------------------------------------------
Energy Plus Solar Inc., filed with the U.S. Bankruptcy Court for
the Central District of California a Plan of Reorganization for
Small Business dated August 7, 2023.
The Debtor is a corporation. Since its incorporation in May 2007,
the Debtor has been in the business of providing solar panel
installation for residential and commercial clients.
The Plan Proponent's financial projections show that the Debtor
will have projected disposable income of $274.37/month based on
year #1 average net income. The final Plan payment is expected to
be paid on December 1, 2028.
Distribution to creditors under this Plan will be funded from the
Debtor's cash on hand and the continued operation of Debtor's
business.
Non-priority unsecured creditors holding allowed claims will
receive distributions, which the proponent of this Plan has valued
at approximately 100 cents on the dollar. This Plan also provides
for the payment of administrative and priority claims.
Class 3 consists of Non-priority unsecured creditors. The holders
of allowed general unsecured claims will receive a 100% pro-rata
distribution for each of their allowed claims through this Plan
without an interest. The distribution will be made monthly, with
the first payment of $2,473.96 due on the effective date, followed
by 59 consecutive payments thereafter, each in the amount of
$2,448.96, until each holder of allowed general unsecured claim
receives its 100% pro-rata distribution.
Class 4 consists of Equity security holders of the Debtor. Eric
Wedell is the CEO of the Debtor and a 50% shareholder. Mr. Wedell
does not hold a pre-petition claim against the Debtor. Mr. Wedell
will retain his 50% interest in the Debtor after the plan
confirmation. Kate Wedell is the Officer of the Debtor and a 50%
shareholder. Mrs. Wedell does not hold a pre-petition claim against
the Debtor. Mrs. Wedell will retain her 50% interest in the Debtor
after the plan confirmation.
Distribution to creditors under this Plan will be funded primarily
from the following sources: (a) the Debtor's cash on hand on the
Effective Date and (b) the net income derived from the continued
operation of the Debtor's business.
A full-text copy of the Plan of Reorganization dated August 7, 2023
is available at https://urlcurt.com/u?l=5wF2qR from
PacerMonitor.com at no charge.
Attorney for the Plan Proponent:
Michael Jay Berger, Esq.
Law Offices of Michael Jay Berger
9454 Wilshire Blvd., 6th Floor
Beverly Hills, CA 90212-2929
Telephone: (310) 271-6223
Facsimile: (310) 271-9805
Email: michael.berger@bankruptcypower.com
Energy Plus
Energy Plus Solar Inc. has been in the business of providing solar
panel installation for residential and commercial clients since May
2007.
The Debtor filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. C.D. Calif. Case No. 23-12863) on May 9,
2023, with as much as $50,000 in assets and $100,001 to $500,000 in
liabilities. John-Patrick Fritz has been appointed as Subchapter V
trustee.
Judge Neil W. Bason oversees the case.
The Debtor is represented by the Law Offices of Michael Jay Berger.
ESJ TOWERS: Florence Cohen Steps Down as Committee Member
---------------------------------------------------------
The U.S. Trustee for Region 21 disclosed in a court filing that
Florence Paley Cohen has been removed from the official committee
of unsecured creditors in the Chapter 11 case of ESJ Towers, Inc.
The remaining members of the committee are:
1. Homeowners Association of ESJ Towers
Chana Cohen, President, Board of Directors
P.O. Box 79878
Carolina, PR 00984
Tel: (787) 529-5539
Email: rentwithchana@yahoo.com
External Counsel: Monique Diaz Mayoral
Tel: (754) 755-5508
Email: m@diazmayorallaw.com
2. Frank Luccarelli
Deeded Timeshare Owner and Vacation Club Member
32 Lynncliff Road
Hampton Bays, NY 11946
Cell: (631) 745-1622
Tel: (631) 728-6735
Email: islandcl@yahoo.com
3. Steven Vega, Vacation Club Member
140 Donizetti Pl #13G
Bronx, NY 10475
Tel: (212) 942-8645
Email: steven_vega@live.com
About ESJ Towers
ESJ Towers, Inc. owns the ESJ Towers in Carolina, P.R. The luxury
apartments and condo units at ESJ Towers have direct access to Isla
Verde Beach, widely considered one of the best in Puerto Rico.
ESJ sought protection under Chapter 11 of the U.S. Bankruptcy Code
(Bankr. D.P.R. Case No. 22-01676) on June 10, 2022, with as much as
50 million in both assets and liabilities. ESJ President Keith St.
Clair signed the petition.
Judge Enrique S. Lamoutte Inclan oversees the case.
The Debtor tapped Charles A. Cuprill, Esq., at Charles A. Cuprill,
PSC Law Offices as bankruptcy counsel; Ramon Luis Nieves, Esq., at
RL Legal Consulting Services, LLC and Luis Daniel Muniz, Esq., as
special counsels; Dage Consulting CPAS, PSC as financial advisor;
CPA Luis R. Carrasquillo & Co., P.S.C. as financial consultant; and
De Angel & Compania, PA, LLC as auditor.
The U.S. Trustee for Region 21 appointed an official committee of
unsecured creditors on Sept. 12, 2022. MRO Attorneys at Law, LLC
and Dage Consulting CPAS, PSC serve as the committee's legal
counsel and financial advisor, respectively.
EXIGENT LANDSCAPING: Seeks Cash Collateral Access
-------------------------------------------------
Exigent Landscaping, LLC asks the U.S. Bankruptcy Court for the
Eastern District of Michigan, Southern Division, Detroit, for
authority to use cash collateral in accordance with the budget,
with a 10% variance, and provide adequate protection.
In 2022, the Debtor was involved in contentious legal proceedings
with former customers. Also, during that time Covid made it
difficult for the Debtor to get material to finish existing jobs,
and it was more expensive when the material was available. Though
the Debtor spent considerable time and effort prior the Petition
Date attempting to remedy such matters, a reorganization of the
business through a Subchapter V bankruptcy became necessary.
The majority of the Debtor's value arises from its ongoing
operations and ability to continue to provide goods and services to
its customers. Without authority to use cash collateral, the Debtor
will suffer irreparable harm because it will be forced to
immediately shut down.
During the first 13 weeks of the case, the Debtor projects that it
will need to spend $275,214 to avoid immediate and irreparable
harm.
On July 23, 2020, U.S. Small Business Administration filed a UCC-1
financing statement against certain of the Debtor's assets,
including its cash collateral. The Debtor anticipates SBA will
assert a security interest in the Debtor's cash collateral. The
Debtor further anticipates that SBA will assert that its security
interest and liens have first priority over all other security
interests and liens asserted against the Debtor in the estimated
amount of $500,000.
On November 17, 2021, SCP Distributors LLC filed a UCC-1 financing
statement against certain of the Debtor's assets, including its
cash collateral. The Debtor anticipates SCP will assert a security
interest in the Debtor's cash collateral. The Debtor further
anticipates that SCP will assert that its security interest and
liens have a priority over all other security interests and liens
asserted against the Debtor in the estimated amount of $60,000.
On July 25, 2022, Citizens Bank, N.A filed a UCC-1 financing
statement against certain of the Debtor's assets, including its
cash collateral. The Debtor anticipates Citizens will assert a
security interest in the Debtor's cash collateral. The Debtor
further anticipates that Citizens will assert that its security
interest and liens have priority over all other security interests
and liens asserted against the Debtor in the estimated amount of
$66,000.
On October 31, 2022, V Cap filed a UCC-1 financing statement
against certain of the Debtor's assets, including its cash
collateral. The Debtor anticipates V Cap will assert a security
interest in the Debtor's cash collateral. The Debtor further
anticipates that V Cap will assert that its security interest and
liens have priority over all other security interests and liens
asserted against the Debtor in the estimated amount of $183,000.
On December 2, 2022, Diwi filed a UCC-1 financing statement against
certain of the Debtor's assets, including its cash collateral. The
Debtor anticipates Diwi will assert a security interest in the
Debtor's cash collateral. The Debtor further anticipates that Diwi
will assert that its security interest and liens have priority over
all other security interests and liens asserted against the Debtor
in the estimated amount of $106,000.
As adequate protection, the Debtor offers Creditors replacement
liens in its personal property, now owned or hereafter acquired and
the proceeds and products thereof to the same extent that such
liens existed prior to the Petition Date.
The Debtor proposes that the Creditors be granted the Replacement
Liens as adequate protection to the extent of any diminution in
value of the pre-petition cash collateral. The Replacement Liens
will be liens on the Debtor's assets which arc created, acquired,
or arise after the Petition Date, but limited to only those types
and descriptions of collateral in which the Creditors held a
pre-petition lien or security interest. The Replacement Liens will
have the same priority and validity as Creditors's pre-petition
security interests and liens.
A copy of the motion is available at https://urlcurt.com/u?l=reJkL1
from PacerMonitor.com.
About Exigent Landscaping, LLC
Exigent Landscaping, LLC is a full service design and build outdoor
construction company specializing 3D designs, pools, hardscaping,
landscaping, patios, pergolas, and outdoor kitchens.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D. Mich. Case No. 23-46912) on August 7,
2023. In the petition filed by Brandon Heitman, president and sole
member, the Debtor disclosed up to $1 million in assets and up to
$10 million in liabilities.
Judge Thomas J. Tucker oversees the case.
Ernest M. Hassan, Esq., at STEVENSON & BULLOCK, P.L.C., represents
the Debtor as legal counsel.
FINTHRIVE SOFTWARE: $460MM Bank Debt Trades at 33% Discount
-----------------------------------------------------------
Participations in a syndicated loan under which FinThrive Software
Intermediate Holdings Inc is a borrower were trading in the
secondary market around 67.4 cents-on-the-dollar during the week
ended Friday, August 11, 2023, according to Bloomberg's Evaluated
Pricing service data.
The $460 million facility is a Term loan that is scheduled to
mature on December 17, 2029. The amount is fully drawn and
outstanding.
FinThrive is a provider of revenue cycle management software
solutions to the healthcare sector.
GEOTEL INVESTMENTS: Seeks to Hire Holmes Lawyer as Counsel
----------------------------------------------------------
Geotel Investments, LLC, seeks approval from the U.S. Bankruptcy
Court for the Eastern District of Texas to hire Holmes Lawyer, PLLC
as its counsel.
The Debtor requires legal counsel to:
a. Give advice with respect to all matters and proceedings in
the Debtor's Chapter 11 case;
b. Advise and consult with the Debtor concerning questions
arising in the administration of the estate and concerning the
Debtor's rights and remedies with respect to the estate's assets
and the claims of creditors and other parties involved in the
Chapter 11 case;
c. Assist in all bankruptcy issues, which may arise in the
administration of the Debtor's affairs, including representation at
the first meeting of creditors, evaluation of assets, negotiations,
verification of claims, and asset disposition;
d. Assist in the preparation of and confirmation of a plan of
reorganization;
e. Appear for, prosecute, defend and represent the Debtor's
interest in suits arising in or related to the case;
f. Assist the Debtor in the preparation of legal papers;
g. Assist the Debtor in selling assets of the estate;
h. Evaluate and file any necessary objection to claims; and
i. Perform all other necessary legal services.
Robert Holmes, Esq., is the firm's attorney who will be handling
the Debtor's bankruptcy case. He will seek compensation based upon
normal and usual fee schedules in the Eastern District of Texas.
Mr. Holmes disclosed in a court filing that his firm neither
represents nor holds any interest adverse to the Debtor and its
estate.
Holmes Lawyer can be reached at:
Robert H. Holmes, Esq.
Holmes Lawyer, PLLC
19 St. Laurent Pl.
Dallas, TX 75225
Phone: 214-9384-3182
Email: rhholmes@swbell.net
About Geotel Investments
Geotel Investments, LLC filed Chapter 11 petition (Bankr. E.D. Tex.
Case No. 23-41032) on June 12, 2023, with $500,001 to $1 million in
both assets and liabilities. Judge Brenda T. Rhoades oversees the
case. Robert H. Holmes, Esq., at Holmes Lawyer, PLLC is the
Debtor's bankruptcy counsel.
GLDEX LLC: Voluntary Chapter 11 Case Summary
--------------------------------------------
Debtor: GLDEX, LLC
3110 Main Street, Building C
Santa Monica, CA 90405
Business Description: GLDEX is engaged in activities related to
real estate.
Chapter 11 Petition Date: August 10, 2023
Court: United States Bankruptcy Court
Central District of California
Case No.: 23-15124
Debtor's Counsel: Rhonda Walker, Esq.
ATTORNEY AT LAW
440 E. Huntington Blvd., Ste. 300
Arcadia, CA 91006
Tel: 626-577-7322
Fax: 626-628-3210
Email: rwalker_law@yahoo.com
Total Assets: $7,012,000
Total Liabilities: $5,039,091
The petition was signed by Bartlett Hanford as managing member.
The Debtor failed to include in the petition a list of its 20
largest unsecured creditors.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/YUI7JSQ/GLDEX_LLC__cacbke-23-15124__0001.0.pdf?mcid=tGE4TAMA
GOLYAN ENTERPRISES: Files Amendment to Disclosure Statement
-----------------------------------------------------------
Golyan Enterprises LLC submitted an Amended Disclosure Statement
describing Amended Plan of Liquidation dated August 7, 2023.
The Plan is a liquidating plan as all assets of the Debtor will be
liquidated to pay Allowed Claims against the Estate. This will be
accomplished by both the sale of various assets, and the litigation
and monetization of causes of action.
As emphasized throughout the Plan, the Debtor's primary goal is to
market and sell the Debtor's real property commonly known as 99-44
62nd Avenue, Rego Park, New York 11374, in the Borough of Queens,
Block: 2107, Lot 24 (the "Premises"). The Premises is improved by a
six story elevatored residential apartment building containing 62
apartments and a parking garage. The Premises have been under the
control of the Receiver since at least September of 2020.
The Plan shall be funded through a combination of: (i) sale
proceeds from the sale of the Premises; (ii) rent and other amounts
that might be collected during the Bankruptcy Case, and (iii)
proceeds recovered from any causes of action.
The Amended Disclosure Statement does not alter the proposed
treatment for unsecured creditors and the equity holder:
* Class 2 of the Plan consists of General Unsecured Claims.
The Debtor anticipates that General Unsecured Claims, when and if
to the extent Allowed, shall receive a pro rata distribution of the
Net Sale Proceeds from the sale of the Premises after payment of
all Allowed Administrative, Priority and Secured Claims to be paid
by the Debtor within 60 days after the Effective Date, with
interest at the federal judgment rate in effect on the Confirmation
Date, if the Claims are paid in full.
* In the event there are sufficient Sale Proceeds to pay all
prior classes in full, Class 3 Claimants shall retain all existing
pre-petition Equity Interests in the Debtor effective as of the
Effective Date. In the event that there are insufficient funds for
same, Class 3 claimants shall not retain their interests and are
deemed to reject the Plan. If there are sufficient assets left
after the payments of the Sale Proceeds.
The Plan shall be funded through a combination of: (i) sale
proceeds from the sale of the Premises; (ii) rents and other
amounts that may be collected during the Bankruptcy Case, and (iii)
proceeds recovered from any causes of action. The Plan will be
implemented as follows:
* The Court enters the Confirmation Order, that Order becomes
a Final Order, and the Plan shall go "effective" (Effective Date);
* The Debtor's duly retained broker, MYC & Associates, Inc.,
will conduct an auction either with, or without, a stalking horse
bidder on October 17, 2023 pursuant to the Bidding Procedures set
forth in the Bid Procedures Order;
* Until the closing of the Premises occurs, the Debtor's
Managing Agent shall continue to manage the Premises and be
entitled to its management fee pursuant to the Management
Agreement;
* The Debtor will continue to investigate the claims of the
Receiver and pursue any and all causes of action against parties,
if appropriate and recoverable under statute or case law, for
damages and harm to the Premises, including, but not limited to
objecting to any Claims as deemed appropriate by the Debtor;
* Prior to the filing date, the Founding Members had commenced
litigation, each asserting claims against the other, relating in
part to the Debtor. Some of the claims asserted by the Founding
Members may be derivative in nature, and inure to the benefit of
the estate (the "Founding Members' Litigation").
A full-text copy of the Amended Disclosure Statement dated August
7, 2023 is available at https://urlcurt.com/u?l=HP4tA7 from
PacerMonitor.com at no charge.
Counsel to the Debtor:
Nico G. Pizzo, Esq.
Avrum J. Rosen, Esq.
The Law Offices of Avrum J. Rosen, PLLC
38 New Street
Huntington, NY 11743
Telephone: (631) 423-8527
Email: npizzo@ajrlawny.com
arosen@ajrlawny.com
About Golyan Enterprises
Golyan Enterprises, LLC owns a residential apartment building
located at 99-44 62nd Ave., Rego Park, N.Y. The property is valued
at $12 million.
Golyan Enterprises filed its voluntary petition for Chapter 11
protection (Bankr. E.D.N.Y. Case No. 23-41647) on May 11, 2023,
with $12,000,500 in assets and $10,472,736 in liabilities.
Faraidoon Golyan, co-managing member, signed the petition.
Judge Nancy Hershey Lord oversees the case.
The Law Offices of Avrum J. Rosen, PLLC, serves as the Debtor's
bankruptcy counsel.
GOTO GROUP: $2.25BB Bank Debt Trades at 34% Discount
----------------------------------------------------
Participations in a syndicated loan under which GoTo Group Inc is a
borrower were trading in the secondary market around 65.8
cents-on-the-dollar during the week ended Friday, August 11, 2023,
according to Bloomberg's Evaluated Pricing service data.
The $2.25 billion facility is a Term loan that is scheduled to
mature on August 31, 2027. The amount is fully drawn and
outstanding.
GoTo, formerly LogMeIn Inc., is a flexible-work provider of
software as a service and cloud-based remote work tools for
collaboration and IT management.
GUARDIAN FUND: Andronico Steps Down as Committee Member
-------------------------------------------------------
The U.S. Trustee for Region 17 disclosed in a court filing the
resignation of Andronico Family Partnership, L.P. from the official
committee of unsecured creditors in the Chapter 11 case of Guardian
Fund, LLC.
The bankruptcy watchdog also disclosed the appointment of Joseph
Hansen to the committee. Mr. Hansen is co-trustee of the Joseph and
Lisa Hansen Living Trust.
As of Aug. 8, the members of the committee are:
1. Roger and Sherry Iveson
Trustees of the 1982 Iveson Trust
Attn: Roger Iveson
4270 Honeywood Ct.
Reno, NV 89509
Phone: (775) 827-6037
Email: roiveson@icloud.com
2. Kirk and Roberta Johnson
Trustees of The Kiro Family Trust
Attn: Kirk C. Johnson, Esq.
50 West Liberty Street, Suite 600
Reno, NV 89511
Phone: (775) 329-5600
Email: kirk@nvlawyers.com
3. The Amp'd Group, LLC
Attn: Justin Trimble & Lebo Newman
3705 Barron Way
Reno, NV 89511
Phone: (775) 745-3791
Email: lebo@libertyonly.com
Counsel:
Jeff Hartman
Hartman & Hartman
510 West Plumb Lane, Suite B
Reno, NV 89509
Phone: (775) 324-2800
Email: jlh@bankruptcyreno.com
4. Kathy Gibson, Horizon Trust FBO
Attn: Kathryn Ann Gibson
14372 Rain Dr.
New Caney, TX 77357
Phone: (832) 654-0129
Email: kagkag1950@gmail.com
5. Joseph Hansen
Co-Trustee of the Joseph and Lisa Hansen Living Trust
Attn: Joseph Hansen
860 Mackey Court
Reno, NV 89512
Phone: (775) 232-1775
Email: hansencreative@sbcglobal.net
About Guardian Fund
The WendellLa and Nancy King Family Trust and several other
creditors represented by Jeffrey L. Hartman filed a Chapter 7
involuntary petition (Bankr. D. Nev. Case No. 23-50117) against
Guardian Fund, LLC, a company in Reno, Nev., on March 17, 2023.
On April 11, 2023, Guardian Fund filed a Chapter 11 voluntary
petition (Bankr. D. Nev. Case No. 23-50233). At the time of the
filing, Guardian Fund reported $10 million to $50 million in assets
and $50 million to $100 million in liabilities.
On April 27, 2023, the Nevada bankruptcy court approved the
stipulation filed in both cases by Guardian Fund and the
petitioning creditors. The order directed the consolidation of the
two cases, with Case No. 23-50177 as the lead case, and set the
Chapter 11 petition date to March 17, 2023. Judge Natalie M. Cox
oversees the case.
The Debtor tapped Harris Law Practice, LLC and Excelsis Accounting
Group as legal counsel and accountant, respectively.
On May 10, 2023, the U.S. Trustee for Region 17 appointed an
official committee to represent unsecured creditors. Sallie B.
Armstrong, Esq., at McDonald Carano, LLP serves as the committee's
legal counsel.
Jeffrey Golden, Esq., is the examiner appointed in the Debtor's
Chapter 11 case.
HARD ROCK NORTHERN: Fitch Affirms 'B' IDR, Outlook Stable
---------------------------------------------------------
Fitch Ratings has affirmed Hard Rock Northern Indiana Holdings,
LLC's (HRNI) Issuer Default Rating at 'B' and its secured term loan
B at 'B+'/'RR3'. The Rating Outlook is Stable.
HRNI's IDR reflects its 'B-' Standalone Credit Profile (SCP) with a
one-notch uplift related to its relationship with Seminole Hard
Rock Entertainment, Inc. (BBB/Stable) and Seminole Hard Rock
International, LLC (BBB/Stable), collectively SHRE. HRNI's SCP
reflects its single-site nature and conservative gross leverage.
Fitch expects gross EBITDA leverage to increase to about 4.3x in
the outer years of Fitch forecast period due to multiple
competitive openings in the Chicagoland market.
The one-notch uplift to the IDR from HRNI's SCP is pursuant to
Fitch's Parent and Subsidiary Linkage Rating Criteria and reflects
the entity's linkage to SHRE, which Fitch considers to be a
stronger parent. SHRE indirectly owns 76% of HRNI.
KEY RATING DRIVERS
Moderate Leverage to Increase: Gross EBITDA leverage was 4.2x as of
Dec. 31, 2022 and Fitch expects HRNI to deleverage to 3.5x in the
near term given solid current performance at the property and term
loan amortization. This is strong in the context of the SCP, but
will increase in the medium term due to cannibalization from nearby
competitive openings. Fitch expects HRNI to generate strong FCF in
the near term due to good EBITDA generation, manageable interest
expense and minimal required maintenance capex. This should also
help near-term delevering.
Competitive Pressure: HRNI will be subject to multiple new
competitive properties, including a casino in Chicago's south
suburban area estimated by 2025 and in downtown Chicago estimated
by 2026. Both proposals are being completed by well-capitalized and
established operators - PCI Gaming Authority (BBB-/Stable) and
Bally's Corp. (B+/Negative). The additional supply will affect
existing properties in Chicagoland, including HRNI, given the close
proximity to Gary, IN.
Fitch expects the south suburban and downtown licenses to
negatively impact HRNI's cash flow and leverage, although this
should be manageable, and Fitch base case does not contemplate
meaningful growth to the overall addressable market thereby
assuming significant cannibalization from all Chicagoland casinos.
Fitch forecasts a high-teen percentage revenue decline in 2025 and
2026 following the opening of the south suburban and downtown
casinos. Fitch's base case does not forecast this casino to
meaningfully expand the total addressable gaming market due to
Chicagoland's existing casinos and video lottery terminals.
Projected leverage is likely to approach 4.3x, assuming a
flow-through to EBITDA, which is more consistent with a 'B-' SCP
for the standalone property.
Lack of Diversification: HRNI operates a single property in a
competitive market that is subject to new supply risk, limiting
rating upside as future cash flow generation will be challenged.
Most single-site operators are rated in the single 'B' category
unless there are unique end-market dynamics. These include
monopolistic positions, being a clear market leader, or having a
conservative balance sheet. HRNI's geographic concentration offsets
decent leverage and credit metrics.
Strong Market Position: The property opened in May 2021 and has
taken incremental market share away from nearby competitors in
addition to the legacy Majestic Star share. HRNI had a roughly
21.5% market share YTD 2023 compared with 5% relative share the
prior Majestic Star licenses commanded in 2019. Hard Rock is the
newest property opening in nearly a decade and has benefited from
its proximity to the highway, brand recognition, and favorable
regional gaming trends. Current win-per-day metrics are trending
above area averages, at over $500 and $4,000 for slots and tables,
respectively.
Tepid Regional Gaming Outlook: Fitch anticipates a potential for a
pullback in broader regional gaming demand in 2024, due both to
tough yoy comparisons from an exceptionally strong 2022 and 2023
and concerns on the current macroeconomic backdrop. The impressive
gaming performance in domestic markets seen in 2021 and 2022 should
subside, especially as levels of discretionary spend become more
pressured amid the current inflationary environment.
While Indiana's total state-wide casino wins in 2022 were up by
about $400 million yoy to $2.5 billion, fueled largely by the HRNI
opening in the northern market, the state's gambling industry,
which comprises of 11 commercial casinos, one tribal casino and two
racinos, has witnessed a 4% yoy decline YTD June 2023 according to
Indiana Gaming Commission, likely due to competition from
neighboring Ohio and Kentucky, which legalized sports betting
earlier this year. However, considering YTD June 2023 HRNI revenues
still continue to outpace its competitors and have in fact grown by
about 4% yoy, any further declines will generally be manageable.
The strong and sustained level of profitability post-pandemic is
expected to help offset top-line declines for regional gaming
operators across the board.
SHRE Relationship Positive: Fitch believes HRNI's association with
SHRE warrants a one-notch uplift from HRNI's SCP due to management
and brand overlap. Fitch considers SHRE as a stronger parent based
on its underlying SCP, which is consistent with 'B+' pro forma for
SHRE's purchase of the Mirage from MGM Resorts. SHRE's 'BBB' IDR is
attributed to the guarantee of its debt by Seminole Tribe of
Florida (STOF; BBB/Stable). Fitch believes SHRE has weak legal and
strategic incentives to support HRNI, as there is no downstream
guarantee and HRNI make a low financial contribution relative to
SHRE's broader complex.
Fitch's assessment of moderate operational incentives recognizes
that HRNI shares common executive management with SHRE, is part of
SHRE's broader 'Unity' player rewards program, and that its
property is part of SHRE's regional gaming expansion strategy. SHRE
owns 76% of HRNI and controls a majority of its board of directors.
SHRE has also supported the entity through equity injections in
2021 when it took majority control following the prior majority
owner's (Spectacle Entertainment Group) licensing issues with state
regulators.
DERIVATION SUMMARY
HRNI's SCP is consistent with most other single-site gaming
operators, including Empire Resorts Inc. (B/Stable; SCP: CCC+).
HRNI has similar end-market dynamics as Empire, including
competitive operating environments with new supply risk,
single-site properties, and similar cash flow generation. HRNI is
exposed to new competition through the pending casino openings in
Chicagoland through 2026.
HRNI is considered weaker than its larger, more geographically
diversified regional gaming peers, including Bally's Corporation
(B+/Negative) and Great Canadian Gaming Corporation (B+/Stable).
These peers have similar-to-slightly higher leverage profiles, but
much stronger FCF generation and are well diversified.
KEY ASSUMPTIONS
-- Fitch assumes an ~3% increase in total revenues in 2023 (based
on YTD results slightly offset by the impact of the temporary
Chicago casino), a modest 4% decline in 2024 as there is a
potential for a pullback in broader regional gaming demand,
followed by a 12%-13% decline in each of 2025 (due to the Wind
Creek casino in South urban Chicago coming online on January 1) and
2026 (from cannibalization by Bally's permanent downtown Chicago
casino starting early 2026);
-- EBITDA margin is expected to slightly expand by ~100bps from
2022 to ~24.5% in 2023 and decline over the forecast period as
revenue contractions from the aforementioned factors flow-through;
-- Annual capex is estimated to be $12 million in 2023, followed
by 2.5% of revenues thereafter;
-- Deleveraging ahead of the competitive openings to be driven
through amortization (10% this year, then 5% thereafter) and some
degree of voluntary debt paydown (potentially through an excess
cash flow sweep);
-- No shareholder distributions or acquisitions assumed.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Greater degree of confidence that EBITDA leverage will remain
below 5.0x and the FCF margin will exceed 10% amid the competitive
pressures in the greater Chicago area;
-- An increase in rating linkage with SHRE;
-- Geographical diversification away from the Chicagoland market.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- FCF approaching breakeven;
-- Decrease in rating linkage with SHRE or weakening of SHRE's
SCP;
-- EBITDA leverage sustaining above 7.0x.
LIQUIDITY AND DEBT STRUCTURE
Liquidity is adequate between operational cash and $25 million in
availability on its $35 million revolver. Cash flow generation is
sufficient to cover debt service and a small amount of maintenance
capex annually. Fitch expects FCF margins to be in the mid-teen
range in 2023 and 2024, prior to the competitive openings, and to
fall to a single-digit percent longer term.
ISSUER PROFILE
HRNI Holdings, LLC (fka, Spectacle Gary Holdings, LLC) is the owner
and operator of the Hard Rock Casino Northern Indiana (HRNI), a
casino development located in Gary, Indiana and catering to the
greater Chicagoland & northern Indiana gaming markets.
ESG CONSIDERATIONS
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
HEART O'GOLD: Court OKs Cash Collateral Access Thru Sept 1
----------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Ohio,
Eastern Division, Canton, authorized Heart O'Gold Home Care, LLC to
use up to $39,000 of cash collateral on an interim basis in
accordance with the budget, through September 1, 2023.
The Debtor requires the use of cash collateral to continue its
business operations and to pay its regular daily expenses including
employees' wages, utilities, and its other costs of doing
business.
Prior to the commencement of the Debtor's chapter 11 case, the
McKesson Corporation and Huntington National Bank made loans and
advances to the Debtor, pursuant to the terms of certain credit,
loan agreement and promissory notes.
The Debtor has stated that it desires to pursue a financial
restructuring in cooperation with the Lenders and that the Debtor
believes that the best method to effectuate such a financial
restructuring is by means of a chapter 11 case for the Debtor.
As adequate protection, the Lenders are granted: (i) valid,
binding, enforceable and perfected postpetition replacement liens
in the same validity, order of priority and extent (if any) as the
Lenders' prepetition security interests in all of the Debtor's
assets.
A further hearing on the matter is set for August 29 at 11 a.m.
A copy of the court's order and budget is available at
https://urlcurt.com/u?l=u0vD8w from PacerMonitor.com.
The Debtor projects total expenses, on a weekly basis, as follows:
$3,075 for the week ending August 9, 2023;
$29,741 for the week ending August 16, 2023;
$745 for the week ending August 23, 2023;
$36,455 for the week ending August 30, 2023′
$3,070 for the week ending September 6, 2023;
$29,796 for the week ending September 13, 2023
$3,385 for the week ending September 20, 2023;
$36,456 For the week ending September 27, 2023;
$3,070 For the week ending October 4, 2023; and
$29,796 For the week ending October 11, 2023;
About Heart O'Gold Home Care, LLC
Heart O'Gold Home Care, LLC is a provider of home health care
services.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Ohio Case No. 23-60917-tnap) on August
2, 2023. In the petition signed by Heidi Nussbaum Frenz, managing
member, the Debtor disclosed up to $50,000 in assets and up to $1
million in liabilities.
Judge Tiiara N.A. Patton oversees the case.
Anthony J. DeGirolamo, Esq. represents the Debtor as legal counsel.
HICKAM HARBOR: Case Summary & 16 Unsecured Creditors
----------------------------------------------------
Debtor: Hickam Harbor LLC
3465 Mamala Bay Dr
Honolulu, HI 96818
Business Description: The Debtor is a restaurant in Hawaii
specializing on signature craft burgers,
local style cuisines, and American food.
Chapter 11 Petition Date: August 10, 2023
Court: United States Bankruptcy Court
Central District of California
Case No.: 23-15131
Judge: Hon. Julia W. Brand
Debtor's Counsel: James E. Till, Esq.
TILL LAW GROUP
120 Newport Center Dr
Newport Beach, CA 92660
Tel: (949) 524-4999
Email: james.till@till-lawgroup.com
Estimated Assets: $0 to $50,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Edmund Cutting as sole shareholder.
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/UEL42ZI/Hickam_Harbor_LLC__cacbke-23-15131__0001.0.pdf?mcid=tGE4TAMA
HORNBLOWER SUB: $349.4MM Bank Debt Trades at 48% Discount
---------------------------------------------------------
Participations in a syndicated loan under which Hornblower Sub LLC
is a borrower were trading in the secondary market around 51.9
cents-on-the-dollar during the week ended Friday, August 11, 2023,
according to Bloomberg's Evaluated Pricing service data.
The $349.4 million facility is a payment-in-kind Term loan that is
scheduled to mature on April 27, 2025. The amount is fully drawn
and outstanding.
Hornblower Sub, LLC is a charter yacht and public dining cruise
operator.
HOWARD HUGHES: S&P Cuts ICR to 'B' on Deteriorating Credit Metrics
------------------------------------------------------------------
S&P Global Ratings lowered the issuer credit rating to 'B' from
'B+' on The Howard Hughes Corp. (HHC). The outlook is stable. S&P
also lowered the senior unsecured notes to 'B+' from 'BB-'. The
recovery rating on the senior unsecured notes remain at '2'.
The stable outlook reflects S&P's expectation that modest recovery
in the master planned communities (MPC) segment and higher
deliveries of condos in 2024 will result in improving cash flow,
while maintaining adequate liquidity.
Weaker earnings in 2023 and higher debt levels to support HHC's
sizable development pipeline will result in weaker credit metrics.
MPC earnings before taxes (EBT) decreased 23% to $71.3 million in
the quarter ended June 30, 2023. This was largely driven by a 50%
decline in land sales revenue, primarily related to the timing of
land sales in Summerland, Calif. S&P said, "For 2023, we expect
lower land sales due to softness in housing demand, which will
pressure earnings in the MPC segment, causing segment EBT to
contract moderately up to 10%. While we expect some recovery in
land sales later in 2023 and into 2024, as consumers adjust to
higher mortgage rates and homebuilders gain market share while the
supply of existing homes remains tight, the improvement in cash
flow will not cause credit metrics to sufficiently recover." This
is due to lower condo deliveries in 2023 while the Seaport segment
remains unprofitable.
S&P said, "We expect revenue for the strategic development segment
to drop significantly, with 2023 revenue declining to about $40
million compared to $680 million in 2022. In 2024, we anticipate a
recovery, including the delivery of Victoria Place in Honolulu,
which is 100% pre-sold.
"Given weaker earnings and higher borrowings to fund development
projects, we expect debt to EBITDA to reach about 13x in fiscal
2023 compared to 8.8x in the 12 months ended June 30, 2023, while
EBITDA interest coverage declines to 1.4x from 2.2x for the same
periods. While we expect some recovery in credit metrics as cash
flow improves in fiscal 2024, debt leverage remains elevated at
about 10x and EBITDA interest coverage approaches about 1.7x, both
in line with the 'B' rating."
Stability in the operating assets (OA) segment mitigates volatility
in others. HHC reported 5.2% net operating income (NOI) growth in
the second quarter ended June 30, 2023. Solid rent growth at its
multifamily assets, free rent abatement expirations, and lease
termination fees at its office assets segment supported the recent
performance. HHC now expects NOI growth of 1%-4% in fiscal 2023,
and we believe this portfolio of stabilized assets will continue to
provide a stable cash flow base that will mitigate the volatility
in performance in other segments at HHC. Still, the operating
environment for office real estate remains challenging, and
longer-term secular headwinds from remote working could pressure
occupancy and rent growth while higher concessions and capital
expenditure (capex) could constrain margins.
The stable outlook reflects S&P's expectations for modest recovery
in the MPC segment and higher deliveries of condos in 2024. These
result in improving cash flow while maintaining adequate
liquidity.
S&P could lower the ratings if:
-- A lack of cash flow recovery in fiscal 2024 results in thinning
EBITDA interest coverage of less than 1.5x;
-- Debt to EBITDA remains above 10x; or
-- HHC's liquidity profile weakens.
While an upgrade is unlikely in the next 12 months, S&P could raise
the rating if the HHC's operating performs significantly above its
expectations. This could include a stronger recovery at MPC such
that total debt to EBITDA declines below 8x and EBITDA interest
coverage sustains above 2x.
HUGHES SATELLITE: Moody's Puts 'Ba3' CFR on Review for Downgrade
----------------------------------------------------------------
Moody's Investors Service placed Hughes Satellite Systems
Corporation's Ba3 corporate family rating, Ba3-PD probability of
default rating, Ba1 senior secured notes rating, and B2 senior
unsecured notes rating on review for downgrade. The company's
speculative grade liquidity rating was unchanged at SGL-1. The
rating action follows Hughes' parent, EchoStar Corporation's
(unrated) announced merger with Dish Network Corporation (Dish,
Caa1 negative)[1].
"Hughes' ratings have been put on review for downgrade because its
parent is merging with Dish, a company that has a weaker credit
profile", said Peter Adu, Moody's Vice President and Senior Credit
Officer.
On Review for Downgrade:
Issuer: Hughes Satellite Systems Corporation
Corporate Family Rating, Placed on Review for Downgrade, currently
Ba3
Probability of Default Rating, Placed on Review for Downgrade,
currently Ba3-PD
Senior Secured Regular Bond/Debenture, Placed on Review for
Downgrade, currently Ba1
Senior Unsecured Regular Bond/Debenture, Placed on Review for
Downgrade, currently B2
Outlook Actions:
Issuer: Hughes Satellite Systems Corporation
Outlook, Changed To Rating Under Review From Stable
RATINGS RATIONALE / FACTORS THAT COULD LEAD TO AN UPGRADE OR
DOWNGRADE OF THE RATINGS
The review will focus on the ultimate capital structure, impact on
liquidity, integration risks, potential synergies, competitive
dynamics, deleveraging potential, and growth strategy for the
combined company. Moody's expects to conclude the review at or near
to transaction close (year-end 2023).
The principal methodology used in these ratings was Communications
Infrastructure published in February 2022.
Hughes Satellite Systems Corporation, a wholly-owned subsidiary of
EchoStar Corporation and headquartered in Englewood, Colorado,
provides satellite-based broadband internet to consumers and small
to medium sized businesses. Hughes also manufactures and provides
satellite network technologies and services to corporations and
governments.
I.C. ELECTRIC: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: I.C. Electric
110 East High Street
Sharpsville, PA 16150
Chapter 11 Petition Date: August 10, 2023
Court: United States Bankruptcy Court
Western District of Pennsylvania
Case No.: 23-10414
Judge: Hon. John C. Melaragno
Debtor's Counsel: Crystal H. Thornton-Illar, Esq.
LEECH TISHMAN FUSCALDO & LAMPL, LLC
525 William Penn Place
28th Floor
Pittsburgh, PA 15219
Tel: 412-261-1600
Fax: 412-227-5551
Email: cthornton-illar@leechtishman.com
Estimated Assets: $0
Estimated Liabilities: $1 million to $10 million
The petition was signed by Jerry Zreliak as president.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 20 largest unsecured creditors is available
for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/RKHU2XQ/IC_Electric__pawbke-23-10414__0001.0.pdf?mcid=tGE4TAMA
IMV INC: Chapter 15 Case Summary
--------------------------------
Lead Debtor: IMV Inc.
130 Eileen Stubbs Avenue, Suite 19
Dartmouth, Nova Scotia B3B 2C4
Canada
Business Description: IMV is a clinical-stage biopharmaceutical
company developing a novel class of
cancer vaccines based on DPX, its immune-
educating technology platform.
Chapter 15 Petition Date: May 8, 2023
Court: United States Bankruptcy Court
District of Delaware
Three affiliates that concurrently filed voluntary petitions for
relief under Chapter 15 of the Bankruptcy Code:
Debtor Case No.
------ --------
IMV Inc. (Lead Case) 23-10589
Immunovaccine Technologies Inc. 23-10590
IMV USA Inc. 23-10591
Judge: Hon. Karen B. Owens
Foreign Proceeding: Proceeding under the Companies'
Creditors Arrangement Act, R.S.C. 1985,
c. C-36 (as amended) before the Supreme
Court of Nova Scotia, Hfx No. 523334
Foreign Representative: IMV Inc.
130 Eileen Stubbs Avenue, Suite 19
Dartmouth, Nova Scotia B3B 2C4
Foreign Representative's
Counsel: David M. Fournier, Esq.
Kenneth A. Listwak, Esq.
TROUTMAN PEPPER HAMILTON SANDERS LLP
Hercules Plaza, Suite 5100
1313 N. Market Street, Suite 5100
Wilmington, DE 19801
Tel: (302) 777-6500
(302) 777-6565
Fax: (302) 421-8390
Email: david.fournier@troutman.com
kenneth.listwak@troutman.com
Estimated Assets: Unknown
Estimated Debt: Unknown
A full-text copy of the Lead Debtor's Chapter 15 petition is
available for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/CYAMBBQ/IMV_Inc_and_IMV_Inc__debke-23-10589__0001.0.pdf?mcid=tGE4TAMA
INMET MINING: Taps Dean Dorton Allen Ford as Accountant
-------------------------------------------------------
Inmet Mining, LLC received approval from the U.S. Bankruptcy Court
for the Eastern District of Kentucky to employ Dean Dorton Allen
Ford, PLLC as accountant.
The firm's services include:
a. advising the Debtor regarding its financial reporting
obligations and various corporate, finance and tax matters;
b. performing forensic analyses and audits of the Debtor's
pre-bankruptcy books and records; and
c. performing all other necessary accounting services for the
Debtor in connection with this Chapter 11 case.
The firm will be paid at these rates:
Director $285 to $550 per hour
Manager $175 to $275 per hour
Staff Accountant $100 to $175 per hour
Administrative $90 to $130 per hour
Elizabeth Woodward, a partner at Dean Dorton Allen Ford, disclosed
in a court filing that her firm is a "disinterested person"
pursuant to Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Elizabeth Z. Woodward
Dean Dorton Allen Ford, PLLC
250 W. Main St., Suite1400
Lexington, KY 40507
Tel: (859) 255-2341
Fax: (859) 255-0125
About Inmet Mining
Inmet Mining, LLC is a company in Knoxville, Tenn., which operates
in the coal mining industry.
Inmet Mining sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. E.D. Ky. Case No. 23-70113) on April 5, 2023, with $50
million to $100 million in assets and $100 million to $500 million
in liabilities. Jeffrey Strobel, chief restructuring officer,
signed the petition.
Judge Gregory R. Schaaf oversees the case.
The Debtor tapped Jeffrey Phillips, Esq., at Steptoe & Johnson,
PLLC as legal counsel and Dean Dorton Allen Ford, PLLC as
accountant. Stretto, Inc. is the Debtor's claims, noticing and
solicitation agent and administrative advisor.
Paul Randolph, Acting U.S. Trustee for Region 8, appointed an
official committee to represent unsecured creditors in the Debtor's
Chapter 11 case. The committee tapped Dentons Bingham Greenebaum,
LLP and Whiteford, Taylor & Preston, LLP as legal counsels; and BDO
Consulting Group, LLC as financial advisor.
INSPIREMD INC: Incurs $5.1 Million Net Loss in Second Quarter
-------------------------------------------------------------
InspireMD, Inc. filed with the Securities and Exchange Commission
its Quarterly Report on Form 10-Q disclosing a net loss of $5.08
million on $1.65 million of revenues for the three months ended
June 30, 2023, compared to a net loss of $4.64 million on $1.53
million of revenues for the three months ended June 30, 2022.
For the six months ended June 30, 2023, the Company reported a net
loss of $9.33 million on $2.89 million of revenues compared to a
net loss of $9.12 million on $2.71 million of revenues for the six
months ended June 30, 2022.
As of June 30, 2023, the Company had $53.64 million in total
assets, $6.82 million in total liabilities, and $46.81 million in
total equity.
InspireMd said, "As of June 30, 2023, we have the ability to fund
our planned operations for at least the next 12 months from
issuance date of the financial statement. However, we expect to
continue incurring losses and negative cash flows from operations
until our products (primarily CGuard EPS) reach commercial
profitability. Therefore, in order to fund our operations until
such time that we can generate substantial revenues, we may need to
raise additional funds.
"Our plans include continued commercialization of our products and
raising capital through sale of additional equity securities, debt
or capital inflows from strategic partnerships. There are no
assurances, however, that we will be successful in obtaining the
level of financing needed for our operations. If we are
unsuccessful in commercializing our products or raising capital, we
may need to reduce activities, curtail or cease operations."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1433607/000149315223027060/form10-q.htm
About InspireMD
Headquartered in Tel Aviv, Israel, InspireMD, Inc. --
http://www.inspiremd.com-- is a medical device company focusing
on the development and commercialization of its proprietary
MicroNet stent platform technology for the treatment of complex
vascular and coronary disease. A stent is an expandable
"scaffold-like" device, usually constructed of a metallic material,
that is inserted into an artery to expand the inside passage and
improve blood flow. Its MicroNet, a micron mesh sleeve, is wrapped
over a stent to provide embolic protection in stenting procedures.
InspireMD reported a net loss of $18.49 million for the year ended
Dec. 31, 2022, compared to a net loss of $14.92 million for the
year ended Dec. 31, 2021. As of Dec. 31, 2022, the Company had
$24.65 million in total assets, $7.26 million in total liabilities,
and $17.39 million in total equity.
Tel-Aviv, Israel-based Kesselman&Kesselman, the Company's auditor
since 2010, issued a "going concern" qualification in its report
dated March 30, 2023, citing that the Company has suffered
recurring losses from operations and cash outflows from operating
activities that raise substantial doubt about its ability to
continue as a going concern.
INVENERGY THERMAL: S&P Rates $325MM Term Loan B 'BB-'
-----------------------------------------------------
S&P Global Ratings assigned its 'BB-' rating to Invenergy Thermal
Operating I LLC's (ITOI) $325 million term loan B due in 2029 and
$25 million term loan C due in 2029. We do not rate the $150
million revolving credit facility due in 2028.
The '2' recovery rating indicates our expectation for substantial
(70%-90%; rounded estimate: 75%) recovery in a default scenario.
ITOI will use the proceeds to refinance its existing term loan B
($234 million outstanding), repay debt used to fund the
construction of the now operational Nelson Expansion (NEX) project
(about $52 million), cash fund about $25 million of letters of
credit, and pay a distribution of about $37 million to sponsors
Invenergy Clean Power LLC and Infrabridge's Global Infrastructure
Fund Platform.
Under the current structure, Invenergy will own a 2.22-gigawatt
(GW; net capacity) portfolio of four operating gas-fired
electricity power plants, each in different North American Electric
Reliability Corp. regions. The portfolio comprises:
-- Grays Harbor Energy LLC, a merchant 650-megawatt (MW)
combined-cycle gas turbine (CCGT) in Washington (Mid-Columbia, NWPP
region), has two heat rate call options totaling 200 MW that run
through December 2024. Grays Harbor is 100% owned by ITOI, and we
expect it to account for more than 50% of ITOI's cash flow over the
next few years.
-- Nelson, a mostly merchant 609 MW CCGT in Illinois (Commonwealth
Edison [COMED] zone, Pennsylvania-New Jersey-Maryland
Interconnection region), has a power purchase contract with WPPI
Energy for 15.6% of project's capacity until June 2037. Nelson is
100% owned by ITOI, and S&P expects it to account for about 30% of
ITOI's cash flow over the next few years.
-- Nelson Expansion, co-tenant of Nelson, is a mostly merchant 380
MW dual-fueled simple-cycle gas turbine with 951,780 gallons of
fuel storage on site. NEX has capacity contracts with Hoosier and
NRG and has sold about 140 MW capacity to PJM. As a result, about
90% of NEX capacity is contracted through May 2024. NEX is 100%
owned by ITOI, and S&P expects it to account for less than 10% of
ITOI's cash flow over the next few years.
-- St. Clair Power L.P., a fully contracted 584 MW CCGT in the
Canadian province of Ontario, with a power purchase agreement
(contract for differences) that ITOI extended to 2035, subject to
an advanced gas path upgrade in 2025. St. Clair is 100% owned by
ITOI, and S&P expects it to account for less than 10% of ITOI's
cash flow over the next few years.
S&P said, "We assigned a rating of 'BB-', which compares to the
prior term loan B rated 'BB' that will be refinanced, reflecting
increased portfolio risk of mostly merchant assets (Grays Harbor,
Nelson, and NEX) and higher reliance on Grays Harbor to deliver
expected profitability over the next 12-24 months.
"The proposed transaction, priced at SOFR + 450 basis points (bps),
removed from the portfolio three fully contracted assets subject to
no market risk (totaling 527 MW, adjusted for partial ownership),
which collectively generated about $9 million in annual
distributions to ITOI. We removed our one-notch negative adjustment
on the previous transaction because of a structural subordination
in the collateral package. However, we note that the current
portfolio is fully exposed to cash flow volatility due to its
mostly uncontracted nature. Additionally, ITOI adds a 380 MW
peaking unit (NEX), a largely uncontracted merchant plant after
2024, and we expect it will generate $3 million-$5 million in
annual cash flow over the next two to three years."
ITOI is highly dependent on two productive assets, Grays Harbor and
Nelson, which account for about 85% of cash flow during the term
loan B period. They are merchant plants exposed to market risk such
as power demand, commodity prices, Pacific Northwest carbon prices
(Grays Harbor), and PJM-COMED capacity price volatility (Nelson).
S&P views the cash flow volatility as relatively higher than our
previous assessment because it expects favorable power market
conditions in the Pacific Northwest will normalize and revert to
the mean over the next two to three years.
S&P said, "Cash flow sweeps are key for the project to maintain or
improve our rating. We estimate annual $35 million-$40 million in
cash flow sweeps over the next two to three years, which depends on
Grays Harbor's ability to materialize our expected generation and
relatively high spark spreads, as well as Nelson's performance on
the merchant market. We note that for comparison, ITOI swept $19
million-$21 million annually between 2020 and 2022. Recently, Grays
Harbor's spark spreads have increased from an annual average of
about $22 per MWh in 2021 to about $35/MWh in the first half of
2023 (including new carbon costs) as a result of coal retirements
in the region creating a shortage of generation. We think this
favorable market should continue over the next 12-24 months. We
expect Grays Harbor to bridge the capacity shortage during the
energy transition period and realize higher generation. Further,
ITOI has hedged in favorable spark spreads for August and September
2023, as well as expected generation for 2024 that we think should
result in a sizable cash flow sweep of about $40 million in the
second half of 2023 and $37 million in 2024.
"We expect Grays Harbor will benefit from higher spark spreads and
strong generation over the next 12-24 months due to regional
shortage of generation pushing power prices up.
"We project Grays Harbor will increase its contribution to CFADS,
accounting for more than 50% in the next few years. We expect the
project will generate about 2,000 GWh in the second half of 2023
and about 4,000 GWh in 2024 and 2025 compared with 3,100 GWh in
2022 and 3,500 GWh in 2021. Further, we estimate Grays Harbor's
clean spark spreads will peak at about $33-$34/MWh in the second
half of 2023, reflecting strong forward energy prices in the
Pacific Northwest and favorable hedges locked for 2023. We forecast
the spark spreads will decline to about $20/MWh in 2024, before
normalizing to $13-$14/MWh for the rest of the asset life."
In terms of spark spread hedges, the project hedged all of its
available capacity for the third quarter this year at an average
clean spark spread of about $61/MWh; about 20% of its available
capacity in the fourth quarter of 2023 at an average clean spark
spread of about $29/MWh; and about 10% of its available capacity
for the third quarter of 2024 at an average clean spark spread of
about $128/MWh.
Grays Harbor is in Washington state, which has strong renewable and
climate policy requiring utilities to transition their electricity
supply to greenhouse gas neutral by the end of 2030 and remove
coal-fired generation cost from electricity costs by 2025. S&P
said, "We anticipate the adoption of this policy could lead to
scarcity of generation as coal generation is retired in the near
term and renewable additions take time to come online. Further,
sustained drought conditions in Washington, which is highly reliant
on hydro-generation (58% of the resource mix), position Grays
Harbor and other efficient CCGTs to bridge the capacity shortage
during the energy transition and provide reliable generation during
this period. Following the restructuring of the energy mix in the
region and the entry of renewable generation, we expect Grays
Harbor's generation to decline to about 1,600 GWh and clean spark
spreads to $13-$14/MWh between 2027 and 2030."
S&P said, "We expect Nelson will continue to contribute a
substantial share of ITOI cash flow, but NEX could offer a
potential upside during peak demand in PJM-COMED.
"We expect Nelson to generate approximately 1,700 GWh for the
second half of 2023 and about 3,000 GWh in 2024, in line with
historical ranges. We expect the project's spark spreads will range
$13-$14/MWh over the next 12-24 months, reflecting normalizing
power and natural gas prices from last year's highs. We expect
Nelson to generate about 30% of the cash flow for ITOI during the
term loan B period. However, we expect Nelson's generation to
gradually decline to about 1,800 GWh after 2026 from 3,000 GWh in
the near term, with the entry of renewable generation and the asset
being called during a smaller window of hours. We project Nelson
will offset declining energy margin with increased capacity revenue
as we assume PJM capacity prices will increase to $80/MW-day in the
2027/2028 auction period (thereafter increasing with inflation)
from $45/MWd for 2025/2026. We believe this could support stable
cash flow contributions."
ITOI completed the NEX project, which began operations in the first
half of 2023. NEX is a 380 MW combustion turbine with about 10.8
Btu/MWh heat conversion rate. As a peaking generation plant, we
expect NEX to account for about 6% of ITOI cash flow due to its
inherently high variability of production and high risk of minimal
or no generation. NEX could provide a potential upside in cash flow
during peak demand, as the plant could capture higher spark spreads
than Nelson, given its dual-fuel operation and 32 hours of storage
capacity. Similar to Nelson, S&P expects NEX to support its cash
flow generation with capacity revenues in line with its
expectations of improving capacity prices in PJM-COMED to about
$80/MWd in 2027/2028 auction period from $28.90/MWd cleared for the
2024-2025 auction period.
The St. Clair plant is the only encumbered asset in the portfolio
subject to refinancing risk, partially mitigated by its long-term
contract with the Ontario Power Authority.
S&P expects St. Clair, in southern Ontario Independent Electricity
System Operator's (IESO) west region, will account for less than
10% of ITOI cash flow. St. Clair is an encumbered asset with C$175
million in project-level debt outstanding as of June 30, 2023, and
it distributes cash to ITOI only after servicing its debt. St.
Clair has a long-term contract for differences with Ontario Power
Authority until 2035, subject to an advanced gas path upgrade
financed with debt in 2024. S&P said, "We forecast St. Clair's
generation over the next 12 months will be close to 2022 historical
generation of about 1,900 GWh due to scheduled nuclear retirements,
which have created an uptick in demand. However, we expect St.
Clair's generation will decline steadily to about 1,000-1,200 GWh
by 2027 given Ontario's commitment to maintain the nuclear fleet by
refurbishing nuclear plants (Bruce, Darlington, and Pickering)
along with the entry of low-marginal-cost renewable generation."
IESO relies heavily on hydro and nuclear generation for 60% of the
reliability mix. While St. Clair is a relatively efficient CCGT
(average 2022 heat rate of 7,400 Btu/KWh), it sits higher on the
dispatch curve given the region's large composition of non-thermal
generation.
S&P said, "The stable outlook reflects our view that ITOI will
generate robust cash flow over the next 12-24 months because of
increased profitability and higher generation of the Grays Harbor
plant. We expect a DSCR of about 2.1x over the next 12 months and
decline to 2.04x in September 2024, our minimum due to high capital
spending in this period. We expect the project will sweep
approximately $40 million toward term loan B repayment in the
second half of 2023 due to our expectations of strong performance
of Grays Harbor. After 2023, we project cash flow sweeps will
moderate year over year with an annual average of $25 million in
2024-2029, leading to an outstanding term loan B balance at
maturity (third quarter of 2029) of approximately $114 million."
S&P could lower its rating on ITOI's debt if a combination of the
following factors reduces minimum DSCRs to less than 1.5x on a
sustained basis:
-- Weaker than expected cash flow sweeps in the upcoming 12-24
months.
-- Lower than expected realized spark spreads and higher than
expected carbon price of Grays Harbor, generating over 50% of ITOI
cash flow over the next few years.
-- Lower than expected capacity prices in PJM and lower than
expected spark spreads, affecting the Nelson project, which
accounts for about 30% of ITOI cash flow.
-- Lower than expected demand for Grays Harbor and Nelson
reflected in weaker generation.
The rating is also capped by the credit profile of St. Clair, where
a bankruptcy filing would cause a cross-default and potential
acceleration of the ITOI debt. S&P assesses St. Clair's credit
profile annually. Meaningful deterioration could prompt us to lower
the rating on the holding company even with compensating
improvements in other assets in the portfolio. At the moment, S&P's
credit estimate on St. Clair does not limit the debt rating on
ITOI.
S&P could upgrade ITOI's senior secured debt if:
-- Cash flow sweeps in the next 12-24 months materially exceed
S&P's expectations; and
-- S&P does not expect a potential offsetting releveraging
transaction to materially deteriorate the creditworthiness of
ITOI.
ION CORPORATE: S&P Affirms 'B' ICR, Outlook Stable
--------------------------------------------------
S&P Global Ratings affirmed all its ratings, including its 'B'
issuer credit rating, on financial technology and risk management
software provider ION Corporate Solutions Finance Ltd. (ION
Corporates).
S&P affirmed its 'B' issue-level rating to the $500 million
first-lien term loan. The recovery rating remains at '4'.
S&P said, "The stable outlook reflects our expectation for good
recurring revenue growth and expanding profitability over the next
12 months. While adjusted leverage is near our downgrade trigger of
7.5x, we expect business growth will support improving leverage
toward 7x over the next three quarters.
"ION Corporates recently launched term loan was upsized by $100
million for a total of $500 million, which we do not believe
affects its credit quality. The company will use proceeds to
refinance $250 million of the issuer's U.S.-dollar first-lien term
loan, to fund a $200 million distribution and to provide $50
million for general corporate purposes. With the added debt, ION
Corporates' leverage will rise to 7.6x at close and about 7.3x by
the end of 2023 due to continued revenue expansion and strong
profitability. We believe ION Corporates' recurring revenue streams
are outpacing overall growth and demonstrate strong profitability,
supporting good free operating cash flow (FOCF) to debt of 6%-8% in
2023. ION Corporates is executing growth strategies and has
consolidated businesses to expand its recurring revenue base, which
now accounts for about 80% of revenues (up from below 70% in 2018).
While macroeconomic uncertainties and the high interest rate
environment will challenge operations over the next 12 months, the
company has multiyear contracted revenues and high client retention
due to good market positions in core areas (e.g., essential
processes in treasury and commodities management). We believe these
factors provide good business visibility and may help reduce
foreign currency and cash flow volatility. The company's strong
profitability and minimal capital expenditure (capex) contribute to
high FOCF conversion and FOCF to debt relative to similarly rated
software peers, even when accounting for the incremental annual
interest expense of about $20 million. While the company's good
FOCF allows it to manage higher leverage, its aggressive financial
policy stance is an offset. It has diverted most of its FOCF after
debt service to fund distributions, supporting liquidity and
investments in other ION Group companies.
"We reassessed our view of the company's ownership structure as a
non-financial sponsor controlled. While we no longer view the
company as a private equity portfolio company, the group's owner
has operated the entities at high leverage levels ION Group is the
parent entity of ION Corporates, which also owns sister entities
such as ION Markets, ION Analytics, Cedacri Group, and Cerved. We
no longer treat the ION Group as a financial sponsor company given
that Mr. Andrea Pignataro owns close to 100% of all these entities.
In addition, the ION Investment Group has an infinite investment
horizon and has never sold any of the entities under management,
supporting the notion that it is not a financial sponsor, which
traditionally buys companies and tries to unlock value through
efficiencies and cost cuts with the purpose of selling them at a
higher multiple. That being said, we believe that ION Group will
continue to operate the entities under management with high
leverage while engaging in dividend recapitalizations. None of the
rated entities owned by the ION Group has an issuer credit rating
higher than 'B', reflecting the aggressive complexion of the entire
group.
"While ION Corporates has a track history of improving leverage, it
has exhibited aggressive actions through debt-funded acquisitions
and ongoing distributions to fund liquidity and investments to
other companies within the ION Group. Historically, periods of
lowering leverage are followed by increased debt levels. This is
because of dividend distributions that we consider more aggressive
and may increase higher risk tolerance over time. While the company
has returned to growth and maintained strong profitability
following its merger of Wall Street Systems, OpenLink, Triple
Point, and Allegro in 2019, we believe the company will uphold its
dividend and acquisition strategies, preventing any sustained
credit metric improvements and rating upside potential over the
next 12 months.
"The relationship between ION Corporates and the other ION Group
companies influence our view of the group's overall
creditworthiness. While all the businesses owned by the ION Group
cater to the financial markets, each company either serves a
different part of the industry, or offers a distinct solution.
However, the sharing of the ION brand name, co-mingling of
representation across the board of directors at the portfolio
companies, and long-term buy-and-hold philosophy with a
concentrated founder ownership at the parent level, lead us to
believe ION Corporates' creditworthiness would be influenced by the
entire group. We believe the parent entity would likely provide
extraordinary support in most circumstances if ION Corporates
encountered financial distress. The close relationships among the
group companies, shared branding, and cash pooling mechanism
influence our view the group's overall creditworthiness.
Deterioration or strengthening of any individual company could have
implications for our rating on ION Corporates.
"The stable outlook reflects our expectation that ION Corporates
will achieve consistent organic growth of about 7% in fiscal 2023
as it executes its unified sales strategy with the several brands
under management. We anticipate further support from annual
contract volume expansion and new product developments as the
company enters new verticals. We expect the stable revenue growth
and high EBITDA margin above 50% will enable it to reduce its
adjusted leverage to 7x by the end of 2023 and to 6.5x by the end
of 2024. The outlook also reflects our expectation for FOCF to debt
of 6%-8% over the next 12 months and annual FOCF of $145
million-$155 million in 2023."
IQOR US INC: $300MM Bank Debt Trades at 31% Discount
----------------------------------------------------
Participations in a syndicated loan under which iQor US Inc is a
borrower were trading in the secondary market around 68.9
cents-on-the-dollar during the week ended Friday, August 11, 2023,
according to Bloomberg's Evaluated Pricing service data.
The $300 million facility is a payment-in-kind Term loan that is
scheduled to mature on November 19, 2025. The amount is fully
drawn and outstanding.
iQor is a global provider of customer engagement and technology
enable business process outsourcing solutions. Solutions include
customer service, third-party collections and accounts receivable
management to world's largest brands. The company uses integrated
digital capabilities and proprietary technology and analytics to
enhance the customer experience lifecycle.
JLK CONSTRUCTION: Seeks Cash Collateral Access Thru April 2024
--------------------------------------------------------------
JLK Construction, LLC asks the U.S. Bankruptcy Court for the
Western District of Missouri for authority to use cash collateral
on a final basis.
Three entities assert interests in the cash collateral: Nodaway
Valley Bank, Newtek Small Business Finance, LLC and M&T Equipment
Finance Corporation.
During the proposed period from September 2, 2023, through April
27, 2024, the Debtor projects that its total receipts will be $2.9
million, its total disbursements including costs of goods sold and
expenses will be $2.7 million and its projected net income will be
$143,352. The value of the Debtor's monies and receivables in the
aggregate will not decline.
JLK's present financial circumstances can be traced to a few
difficulties:
1. Prior to May, 2022, bills and payroll were generally paid on
time though JLK had taken out some hard money loans and was paying
them back.
2. JLK was told it had been awarded a $5 million contract in May,
2022. JLK borrowed $5 million from NewTek. JLK bulked up on
machinery, equipment and vehicles. In anticipation of this
contract. The work did not come through, the product has not yet
broken ground and JLK was stuck with a loan it could not afford to
repay.
3. To fill the gap of the $5 million job and to keep employees, JLK
took out hard money loans which are difficult to repay. The loans
crimped cash flow. JLK took smaller jobs to keep employees working
but this did not replace the $5 million job. The margins on these
smaller jobs were not as good as the one on the $5 million job.
4. The hard money lenders were demanding payments. JLK could not
pay them.
5. The hard money lenders were seizing monies from JLKs account,
this impacted cash flow. It was hard to pay vendors union benefits,
equipment payments, etc.
The Lenders' security interests are protected for at least the
following reasons:
a. The value of the Debtor's assets;
b. JLK will continue to operate the business and maintain its
assets. As theprojection reflects, the value of cash collateral
will not decline;
c. Operating the business creates additional revenues;
d. All assets are properly insured;
e. Providing replacements lien to the Lenders to the extent their
prepetition liens attached to property prepetition and with the
same validity, priority, and description. If a defect exists in a
prepetition granted security interest, that defect may be
challenged; and
f. The adequate protection payments to the Lenders.
A copy of the motion is available at https://urlcurt.com/u?l=0PwbPN
from PacerMonitor.com.
About JLK Construction, LLC
JLK Construction, LLC moves dirt, excavates dirt and does basic
concrete flatwork. It is a union shop.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. W.D. Mo. Case No. 23-50034) on February 13,
2023. In the petition signed by Jesse L. Kagarice, managing member,
the Debtor disclosed up to $10 million in both assets and
liabilities.
Judge Brian T. Fenimore oversees the case.
Colin N. Gotham, Esq., at Evans and Mullinix, P.A., and Steven R.
Fox, Esq., at The Fox Law Corp., Inc., represent the Debtor as
legal counsel.
Newtek Small Business Finance, LLC, as lender, is represented by
Jonathan A. Margolies, Esq.
JOHNSON'S ALL-SCAPES: Seeks to Hire Tyler as Accountant
-------------------------------------------------------
Johnson's All-scapes, LLC, seeks approval from the U.S. Bankruptcy
Court for the District of Maryland to hire Tyler Accounting & Tax
Services, LLC.
The Debtor requires an accountant to prepare and file tax returns
and comply with the reporting requirements of the Office of the
U.S. Trustee.
Tyler will be compensated at $50 per hour for bookkeeping and
accounting services and for services related to the assistance with
Chapter 11 bankruptcy filings. Meanwhile, the firm will be paid a
fixed fee of $300 per month for the preparation of payroll and a
fee of $50 per quarter for quarterly payroll report filings.
In addition, the firm will receive reimbursement for work-related
expenses incurred.
Lindsay Willing-Tyler, the firm's accountant who will be providing
the services, disclosed in a court filing that she and her
associates do not hold or represent any interest adverse to the
Debtor's estate.
The firm can be reached at:
Lindsay Willing-Tyler
Tyler Accounting & Tax Services, LLC
P.O. Box 336
Westover, MD 21871
Phone: (443) 783-8003
Email: Lwtyler21@gmail.com
About Johnson's All-scapes
Johnson's All-scapes, LLC builds pools and patios and offers
landscaping and fencing services. The company is based in
Fruitland, Md.
Johnson's All-scapes filed a petition under Chapter 11, Subchapter
V of the Bankruptcy Code (Bankr. D. Md. Case No. 23-13911) on June
2, 2023, with $1 million to $10 million in both assets and
liabilities. Thomas E. Johnson, Jr., managing member, signed the
petition.
Judge David E. Rice oversees the case.
The Debtor tapped George R. Roles, Esq., at RLC Lawyers &
Consultants, LLC as bankruptcy counsel and Tyler Accounting & Tax
Services, LLC as accountant.
KOSMOS ENERGY: S&P Alters Outlook to Stable, Affirms 'B' ICR
------------------------------------------------------------
S&P Global Ratings affirmed its 'B' issuer credit rating on
Dallas-based oil and gas exploration and production (E&P) company
Kosmos Energy Ltd. and revised its rating outlook to stable from
negative. Given the company's material exposure to Ghana, S&P
continues to cap its issuer credit rating (ICR) at two notches
above our T&C assessment on Ghana.
S&P said, "At the same time, we affirmed our 'B' issue-level rating
on Kosmos' unsecured debt. Our recovery rating on the debt remains
'3', indicating our expectation of meaningful (50%-70%; rounded
estimate: 50%) recovery of principal to creditors in the event of a
payment default.
'The stable outlook reflects our view that we expect Ghana to
continue to make progress on its debt restructuring over the next
12 months. Additionally, it reflects our expectations that the
company's funds from operations (FFO) to debt will average 50%-55%,
with debt/EBITDA below 1.5x, over the next two years.
"The outlook revision on Kosmos reflects our view that the
government of Ghana will not implement extensively tighter capital
or foreign-exchange controls, given its commitments under its IMF
Extended Credit Facility Program. Ghana's commitments include
measures to regain access to international markets, to attract
foreign direct investment, and to improve the business environment.
Ghana remains a midsize and open economy, with a significant stock
of inbound investment capital, and considerable reliance on export
earnings from gold, cocoa, and hydrocarbons. In light of upcoming
2024 parliamentary elections, we do not anticipate a change in
government to have an adverse impact on E&P operators in Ghana.
"Nevertheless, we cap our ICR on Kosmos at 'B', which is two
notches above our T&C assessment on Ghana. While Kosmos' exposure
to Ghana, based on its production and EBITDA, is significant at
about 60%, the company exports all of its Ghanaian oil production
and receives the proceeds from its oil sales in U.S. dollars, which
it deposits directly into offshore bank accounts. Nevertheless, the
potential that Ghana could enact stricter capital or foreign
currency controls on exporters remains a risk, and thus we cap our
ICR on Kosmos at two notches above Ghana's T&C assessment.
"We expect the startup of three key development projects will drive
production growth in 2024. In the second quarter of 2023, Kosmos'
daily production averaged around 58,000 barrels of oil equivalent
(boe) per day. Given the recent start-up of the Jubilee South East
development offshore Ghana, and the expected completion of the
Tortue Phase 1 project offshore Mauritania and Senegal and first
oil at the Winterfell project in the U.S. Gulf of Mexico in the
first quarter of 2024, we forecast average daily production to
increase to about 90,000 boe per day next year.
"The 'b+' stand-alone credit profile (SACP) on Kosmos reflects its
growing scale and strong credit metrics. The increased production
combined with lower capital spending should enable the company to
generate significant free cash flow in 2024, strengthening its
underlying credit metrics. Based on our current oil and natural gas
price deck assumptions, we forecast average FFO to debt of about
50%-55% and debt to EBITDA below 1.5x over the next 12 months.
"We expect the company to improve its liquidity profile in 2024. As
of June 30, 2023, Kosmos had around $775 million of outstanding
borrowings on its reserve-based lending (RBL) facility with a
borrowing base of $1.15 billion. Combined with the $85.7 million of
cash on its balance sheet and its undrawn $250 million corporate
revolver due 2024, the company had more than $700 million of total
liquidity as of second quarter of 2023. Over the next 12-18 months,
we anticipate the company will generate a significant amount of
positive free operating cash flow (FOCF), underpinned by higher
production and lower capital spending requirements, which we expect
it will use for debt paydown, including amounts drawn on the RBL
facility and its $137.5 million Gulf of Mexico term loan due 2025.
"Our stable outlook on Kosmos Energy reflects our expectation that
the government of Ghana will not implement extensively tighter
capital or foreign-exchange controls, given its commitments under
its IMF Extended Credit Facility Program. Additionally, we estimate
the company's FFO/debt to average 50%-55%, with debt/EBITDA below
1.5x over the next 12-24 months.
"We could lower the rating on the company if financial ratios
weaken such that FFO to debt approaches 20% while debt to EBITDA
rises above 4.0x for a sustained period, or if liquidity weakened.
Alternatively, while contrary to our expectations, we could lower
the rating on the company if we lowered our T&C assessment on Ghana
and the company still had more than 50% exposure to the country.
"We could upgrade Kosmos if it diversified away from Ghana,
bringing its total exposure to less than 50% for a sustained
period. Alternatively, we could raise the rating if we revised
upward our T&C assessment on Ghana. We would also require the
company to maintain FFO to debt comfortably above 45% and
significantly reduce the outstanding borrowings under its RBL.
"Environmental factors remain a negative consideration in our
rating analysis of Kosmos because the E&P industry is contending
with the accelerating energy transition and adoption of renewable
energy sources. We believe falling demand for fossil fuels will
lead to declining profitability and returns for the industry as it
fights to retain and regain investors that seek higher return
investments. Given its material deepwater exposure relative to its
overall assets, Kosmos Energy faces higher environmental risks than
onshore producers due to the susceptibility of the deepwater assets
to interruption."
Additionally, social factors are moderately negative because its
offshore operations are more likely to experience fatal accidents
given the inherent risks of operating oil rigs, which involve air
and water transportation of personnel, among other activities that
could be life-threatening without proper care.
S&P views its governance factors as a negative consideration in its
credit rating analysis. The ongoing debt restructuring by Ghana
highlights the potential financial risks stemming from Kosmos'
exposure to the country, which accounts for more than 50% of its
total production and EBITDA. The company also faces additional
governance risks related to its operating focus on large-scale,
deepwater projects located in offshore West Africa (Ghana,
Equatorial Guinea, Mauritania, and Senegal).
LERETA LLC: $250MM Bank Debt Trades at 18% Discount
---------------------------------------------------
Participations in a syndicated loan under which Lereta LLC is a
borrower were trading in the secondary market around 81.8
cents-on-the-dollar during the week ended Friday, August 11, 2023,
according to Bloomberg's Evaluated Pricing service data.
The $250 million facility is a Term loan that is scheduled to
mature on August 6, 2028. The amount is fully drawn and
outstanding.
Lereta LLC provides financial services. The Company offers real
estate tax services and flood determination products.
LIGHT AND WONDER: Moody's Rates New $550MM Unsecured Notes 'B3'
---------------------------------------------------------------
Moody's Investors Service assigned a B3 rating to Light and Wonder
International, Inc.'s proposed $550 million senior unsecured notes
due 2031. The company's B1 Corporate Family Rating and B1-PD
Probability of Default Rating remain unchanged. The company's $750
million senior secured first lien revolver and $2.2 billion first
lien term loan B remain unchanged at Ba3. The company's existing B3
rated 7.0% senior unsecured notes due 2028, B3 rated 7.25% senior
unsecured notes due 2029, and B3 rated 8.625% senior unsecured
notes due 2025 remain unchanged. The company's Speculative Grade
Liquidity rating remains SGL-1 and the outlook remains positive.
Proceeds from the proposed $550 million senior unsecured notes
along with cash on hand, will be used to refinance the company's
existing 8.625% senior unsecured notes due 2025 and pay related
fees and expenses. Moody's expects to subsequently withdraw the B3
rating on the 8.625% senior unsecured notes once fully redeemed.
The proposed refinancing is a modest credit positive, improving the
company's maturity profile in a leverage neutral transaction and
reducing total interest expense.
Assignments:
Issuer: Light and Wonder International, Inc.
Backed Senior Unsecured Notes, Assigned B3
RATINGS RATIONALE
Light and Wonder International, Inc.'s' B1 CFR reflects the
meaningful reduction in debt following the sale of the company's
lottery and sports betting businesses. Leverage is expected to
continue to improve from the current level in the low 4x range.
Positive consideration is given to the company's high level of
annual recurring revenue at over 70% as of June 30, 2023, with a
growing digital mix which the company is expecting to grow to 50%
over time. The company is also well positioned to benefit from the
growth of digital gaming products, as the market continue to expand
and mature, including in iGaming and in casual games with SciPlay.
The company currently owns a large portfolio of complementary
gaming products and services, both digital and non-digital, that it
can utilize and cross-sell globally among its various distribution
platforms. Key credit concerns include exposure to replacement
cycles for slot machines, with the company's new games and cabinets
looking to help drive performance in the Gaming operating segment.
Revenues are largely tied to the volume of gaming machine play and
gaming machine sales, and there is risk as gaming is cyclical and
dependent on discretionary consumer spending. The company can
reduce spending on game development and capital expenditures when
revenue weakens, but the need to retain a skilled workforce to
maintain competitive technology contributes to high operating
leverage.
The company's speculative grade liquidity rating of SGL-1 reflects
very good liquidity and sizable cash balance built in part through
continued positive free cash flow. As of June 30, 2023, the company
had cash and cash equivalents of $909 million and full availability
on its $750 million revolving credit facility. Moody's anticipates
the company will generate positive free cash flow over the next
twelve months. The company's $750 million revolver is to be subject
to a net first lien leverage ratio of 4.0x to be tested if revolver
utilization is 30%. The company is not subject to financial
maintenance covenants under the term loan given current level of
utilization. Moody's believe the company will maintain compliance
with its covenants and that the revolver covenant will not be
sprung or tested.
The positive outlook considers Moody's expectation that the
recovery in the company's business exhibited in 2022 will continue
over the next twelve months, with revenue growth and margin
expansion. The positive outlook also incorporates the company's
good liquidity and Moody's expectation for debt-to-EBITDA leverage
will continue to decline from current levels.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
Ratings could be downgraded if liquidity deteriorates, if Moody's
anticipates the company's revenue or earnings to decline or there
are reductions in discretionary consumer spending. Debt-to-EBITDA
leverage sustained over 5.0x could result in a downgrade.
The ratings could be upgraded if debt-to-EBITDA is sustained below
4.0x, with solid top line revenue growth, good liquidity, and a
commitment to maintaining a conservative financial policy with low
leverage levels. Consistent and meaningfully positive free cash
flow while maintaining good reinvestment levels that generate solid
returns would also be required for an upgrade.
The principal methodology used in this rating was Gaming published
in June 2021.
Light and Wonder International, Inc. is a developer of
technology-based products and services and associated content for
worldwide gaming, social and digital gaming markets. Light &
Wonder, Inc. is the publicly traded parent company of Light and
Wonder International, Inc., the direct borrower of over $3.9
billion of rated debt. Consolidated revenue for the latest 12-month
period ended June 30, 2023 was $2.7 billion.
LIGHTHOUSE IMMERSIVE: Chapter 15 Case Summary
---------------------------------------------
Two affiliates that concurrently filed voluntary petitions for
relief under Chapter 15 of the Bankruptcy Code:
Debtor Case No.
Lighthouse Immersive Inc. (Lead Case) 23-11021
640 Briar Hill Avenue
Toronto Ontario M5N 1N2
Canada
Lighthouse Immersive USA Inc 23-11022
Business Description: The Debtors are in the business of
producing immersive show exhibits in
Canada, the United States, and various
cities around the world, through their
multiple affiliated entities and
subsidiaries.
Court: United States Bankruptcy Court
District of Delaware
Chapter 15 Petition Date: July 27, 2023
Judge: Hon. Laurie Selber Silverstein
Foreign Proceeding: Proceeding under the Companies'
Creditors Arrangement Act, pending
before the Superior Court, Commercial
Division, in and for the Judicial
District of Toronto, Canada (Court File
No. CV-23-00703509-00CL)
Foreign Representative: Lighthouse Immersive Inc.
640 Briar Hill Avenue
Toronto Ontario M5N 1N2
Foreign Representative's
Counsel: Derek C. Abbott, Esq.
MORRIS NICHOLS ARSHT & TUNNELL LLP
1201 North Market Street, 15th Floor
Wilmington DE 19801
Tel: (302) 658-9200
Email: dabbott@morrisnichols.com
Estimated Assets: Unknown
Estimated Debt: Unknown
A full-text copy of the Chapter 15 petition is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/MLCYI7I/Lighthouse_Immersive_Inc_and_Lighthouse__debke-23-11021__0001.0.pdf?mcid=tGE4TAMA
LIVIE AND LUCA: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Livie and Luca LLC
1423 Broadway, Ste. 170
Oakland, CA 94612
Business Description: Livie and Luca manufactures and sells shoes
for girls and toddlers.
Chapter 11 Petition Date: August 10, 2023
Court: United States Bankruptcy Court
Northern District of California
Case No.: 23-40991
Judge: Hon. William J Lafferty
Debtor's Counsel: Stephen D. Finestone, Esq.
FINESTONE HAYES LLP
456 Montgomery St., 20th Floor
San Francisco, CA 94104
Tel: 415-421-2624
Fax: 415 398-2820
Email: sfinestone@fhlawllp.com
Total Assets: $2,570,000
Total Liabilities: $2,786,995
The petition was signed by Mitzi Rivas 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/NQOD7YI/Livie_and_Luca_LLC__canbke-23-40991__0001.0.pdf?mcid=tGE4TAMA
LUMEN TECHNOLOGIES: $5BB Bank Debt Trades at 27% Discount
---------------------------------------------------------
Participations in a syndicated loan under which Lumen Technologies
Inc is a borrower were trading in the secondary market around 73.1
cents-on-the-dollar during the week ended Friday, August 11, 2023,
according to Bloomberg's Evaluated Pricing service data.
The $5 billion facility is a Term loan that is scheduled to mature
on March 15, 2027. About $3.92 billion of the loan is withdrawn
and outstanding.
Lumen Technologies, Inc., headquartered in Monroe, Louisiana, is an
integrated communications company that provides an array of
communications services to large enterprise, mid-market enterprise,
government and wholesale customers in its larger Business segment.
The company's smaller Mass Markets segment primarily provides
broadband services to its residential and small business customer
base.
MARINER HEALTH: Unsecureds Will Get 80% or 5% in Joint Plan
-----------------------------------------------------------
Mariner Health Central, Inc., et al., filed with the U.S.
Bankruptcy Court for the Northern District of California a
Disclosure Statement for Joint Plan of Reorganization dated August
8, 2023.
The three Debtors, Mariner Central, Parkview Holdco and Parkview,
are part of the Mariner Health Care group of healthcare services
providers, consultants and holding companies (collectively, the
"Mariner Companies").
The Debtors were clear about their liquidity constraints and the
need for a streamlined process of these Cases. The nature of the
allegations and potential claims that the Independent Director was
charged with investigating under a jointly developed protocol with
the Committee (agreed to by the Debtors), however, warranted
extensive analysis of the Debtors' (and Non-Debtor Affiliates' and
certain third parties') prepetition conduct.
Following months of discovery, delayed in part by the Debtors'
reluctance to provide certain information to the Independent
Director and a protracted dispute with Fundamental Administrative
Services, LLC, the conclusion of material portions of the
Independent Director's Investigation, followed by negotiations
among key creditors, including participating in mediation, the
parties could not reach agreement on the valuation of Parkview or
on a global resolution of claims identified through the Independent
Director's Investigation for the consensual conclusion of these
Cases and the Debtors were compelled to commence a process to sell
the Parkview Facility.
On May 30, 2023, the Bankruptcy Court approved the sale of the
Parkview Facility, and the sale closed on June 15, 2023. Also, due
to, among other things, the litigious stance of certain parties in
these Cases, and the delays and investigation, Professional Fees
have accrued far in excess of amounts originally anticipated,
thereby reducing funds that would have been available to unsecured
creditors under a plan in a streamlined process (unless a portion
of such amount is reduced by the Court, consent or gifted by such
Professional(s) to other Creditor(s)).
The Plan proposes a Cash-Out Option that contemplates substantial
contributions by Non-Debtor Affiliates and payments to Creditors
based on proposed settlements of various claims and causes of
actions. While the Debtors, to date, have been unable to reach a
resolution with certain creditors, they have reached agreements in
principle with a sufficient number of creditors regarding the
proposed treatment of their claims and the Debtors expect such
creditors will support the Plan. The Debtors intend to continue
negotiations with any remaining parties who wish to continue
discussions to try to achieve a fully consensual plan of
reorganization.
The Plan Proponents believe that the Plan's Cash-Out Option
maximizes values to these Estates by (a) settling certain Claims
asserted against the Estates, (b) settling certain Estate Causes of
Action against Non-Debtor Affiliates, Officers and Directors, and
related NonDebtor Released Parties resulting in substantial
financial contributions to the Plan for Distribution to Creditors
(as defined in the Plan, the "Affiliate Settlement") and (c)
establishing a mechanism to provide Creditors with near-term Cash
recoveries without the risk of lengthy and speculative litigation
that could ultimately result in lesser recoveries.
In addition to the distribution to Creditors of the approximately
$6.6 million representing a higher range of estimated value of the
Debtors (exclusive of potential litigation assets), the Affiliate
Settlement provides for contributions from the Non-Debtor
Affiliates to the Estates up to an amount in excess of $9.3
million, enabling the Debtors to have approximately $10 million
available for Distribution on the Effective Date, and in excess of
$6 million for Distribution under the Plan over a period of time to
Creditors with Allowed Claims that vote to accept the Plan and
release the Non-Debtor Affiliates of Claims arising prior to the
Petition Date, pursuant to the terms and conditions set forth in
the Plan.
As a result, over $16 million will be Distributed to Creditors
under the Plan's Cash-Out Option. Under the Cash-Out Option,
Creditors can decline to consent to the Third-Party Releases and
choose not to receive the Affiliate Cash contributions but instead
seek to pursue recoveries against the Non-Debtor Affiliates through
further litigation outside the Chapter 11 Cases. For Creditors that
do not consent to the Third-Party Releases, a contribution of 5% of
the proposed Cash-Out Payment to such Creditor will be made to the
MHC Fund or the Parkview Fund (or divided evenly between those
funds) and all parties' rights will be reserved to dispute the
related claims under the Plan.
As a result, Distributions under the Plan will be funded, in the
Debtors' and Reorganized Debtors' discretion consistent with the
terms of the Plan, with one or more of the following, as
applicable: (i) the Debtors' Cash on Hand (if any); (ii) accounts
receivable and other de minimis assets of the Debtors (if any),
(iii) proceeds from the sale of the Parkview Facility; (iv)
contributions from the Non-Debtor Affiliates pursuant to the
Affiliate Settlement; and (v) proceeds from future operations of
Reorganized Debtor MHC and Non-Debtor Affiliates. Holders of Equity
Interests will receive no distribution under the Plan on account of
their Equity Interests in one or more of the Debtors.
Class 3A, 3B, 3C consists of General Unsecured Claims. The allowed
unsecured claims total $111,000 to $1.03 million. Each Holder of an
Allowed Claim in 3A, 3B, and 3C shall receive, in full, final and
complete satisfaction, settlement, release, and discharge of such
Claim, either:
* if such Holder submits an Accepting Ballot and consents to
releases of the Released Parties, a payment in Cash equal to 80% of
the Allowed amount of such Claim, with such payment to be made on,
or as soon as practicable after, the later of the Initial
Distribution Date or the date that any such Claim becomes Allowed;
provided however, in the event that the total General Unsecured
Claims in Classes 3A, 3B and 3C exceeds $400,000, Holders of Claims
under this subsection (i) shall receive their Pro Rata Share of a
$400,000 Distribution; or
* alternatively, if such Holder does not consent to releases
of the Released Parties, a payment in Cash equal to 5% of the
amount of the Allowed amount of such Claim, with such payment to be
made on, or as soon as practicable after, the later of the Initial
Distribution Date or the date that any such Claim becomes Allowed;
provided however, in the event that the total Allowed amount of
General Unsecured Claims in Classes 3A, 3B and 3C exceeds $400,000,
Holders of Claims under this subsection (ii) shall receive a
payment in Cash equal to 5% of their otherwise Pro Rata Share of a
400,000 Distribution.
Under the Plan Cash-Out Option, Mariner Central will continue to
operate in the ordinary course of business after the Effective Date
of the Plan with Allowed Claims being handled in accordance with
the provisions of the Plan. Parkview sold its Facility and the Plan
provides that Parkview will continue as a going concern for the
limited purposes of meeting its obligations under the Parkview
Facility sale agreement and the Management and Operations Transfer
Agreement (and Parkview GP will continue for purposes of holding an
interest (of no value) in Parkview). In the event the Cash-Out
Option is not confirmed, the Debtors' businesses will cease and
assets will be liquidated through a Litigation Trust.
A full-text copy of the Disclosure Statement dated August 8, 2023
is available at https://urlcurt.com/u?l=ZEViCR from Kurtzman Carson
Consultants LLC, claims agent.
Counsel for Debtors:
Maxim B. Litvak, Esq.
PACHULSKI STANG ZIEHL & JONES LLP
One Sansome Street, Suite 3430
San Francisco, CA 94104
Telephone: 415.263.7000
Email: mlitvak@pszjlaw.com
Hamid R. Rafatjoo, Esq.
Carollynn H.G. Callari, Esq.
David S. Forsh, Esq.
RAINES FELDMAN LLP
1350 Avenue of the Americas, 22nd Floor
New York, NY 10019-4801
Tel: (917) 790-7100
Email: hrafatjoo@raineslaw.com
ccallari@raineslaw.com
dforsh@raineslaw.com
About Mariner Health Central
Atlanta-based Mariner Health Central, Inc. provides administrative,
clinic and operational support services to skilled nursing
facilities, including the 121-bed facility operated by Parkview
Operating Company, LP.
Mariner and its affiliates, Parkview Operating Company and Parkview
Holding Company GP, LLC, sought Chapter 11 bankruptcy protection
(Bankr. D. Del. Lead Case No. 22-10877) on Sept. 19, 2022. The
cases were transferred to the U.S. Bankruptcy Court for the
Northern District of California (Bankr. D. Del. Lead Case No. 22
41079) on Oct. 25, 2022.
The Debtors estimated assets of $1 million to $10 million and
liabilities of $10 million to $50 million as of the bankruptcy
filing.
Judge William J. Lafferty oversees the cases.
The Debtors tapped Raines Feldman, LLP as general bankruptcy
counsel; Pachulski Stang Ziehl & Jones, LLP as local Delaware
counsel; and SierraConstellation Partners, LLC as restructuring
advisor. Lawrence Perkins, chief executive officer of
SierraConstellation, serves as the Debtors' chief restructuring
officer. Kurtzman Carson Consultants, LLC is the claims and
noticing agent and administrative advisor.
The U.S. Trustee for Region 3 appointed an official committee to
represent unsecured creditors in the Debtors' Chapter 11 cases. The
committee is represented by Robinson & Cole, LLP.
Blanca E. Castro is the patient care ombudsman appointed in the
Debtors' bankruptcy case.
MEDIAMATH HOLDINGS: Court OKs Interim Cash Collateral Access
------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized
MediaMath Holdings, Inc. and affiliates to use cash collateral on
an interim basis in accordance with the budget.
Goldman Sachs Specialty Lending Group, L.P. is the administrative
agent and collateral agent for the lenders party from time to time
to the Credit Agreement and the other Prepetition Secured Parties.
As of the Filing Date, Applicable Debtors are each liable for the
payment and performance of the Prepetition Debt, and the
Prepetition Debt is an allowed claim in an amount not less than $95
million, exclusive of accrued and accruing Allowable 506(b)
Amounts, and is an allowed secured claim in an amount not less than
$64.8 million.
The Applicable Debtors are directed to remit to Prepetition Agent,
on not less than a weekly basis, all cash collateral in excess of
$5 million.
As adequate protection, the Prepetition Agent is granted the
Replacement Liens, for the benefit of itself and the Prepetition
Secured Parties, as security for the complete payment and
performance of the Prepetition Debt, as and for any diminution from
and after the Petition Date.
The Replacement Liens: (1) are in addition to the Prepetition
Liens; (2) are properly perfected, valid, and enforceable liens
without any other or further action by Applicable Debtors or
Prepetition Agent, and without the execution, filing, or
recordation of any financing statement, security agreement, control
agreement, mortgage, title notation, or any other agreement,
document, or instrument; and (3) will remain in full force and
effect notwithstanding any subsequent conversion or dismissal of
any Case.
A copy of the court's order and the Debtor's budget is available at
https://urlcurt.com/u?l=P0k4BN from PacerMonitor.com.
The Debtor projects total operating disbursements, on a weekly
basis, as follows:
$1,027,000 for the week ending August 18, 2023;
$626,000 for the week ending August 25, 2023;
$1,944,000 for the week ending September 1, 2023;
$506,000 for the week ending September 8, 2023;
$801,000 for the week ending September 15, 2023;
$92,000 for the week ending September 22, 2023;
$736,000 for the week ending September 29, 2023;
$923,000 for the week ending October 6, 2023;
$300,000 for the week ending October 13, 2023; and
$2,251,000 for the week ending October 20, 2023;
About MediaMath Holdings, Inc.
MediaMath Holdings, Inc. develops and delivers digital advertising
media and data management technology solutions to advertisers.
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 Debtors had about $95
million of first lien funded debt.
Judge Laurie Selber Silverstein oversees the case.
The Debtors tapped YOUNG CONAWAY STARGATT & TAYLOR, LLP as legal
counsel, FTI CONSULTING, INC. as financial advisor, and EPIQ
CORPORATE RESTRUCTURING, LLC as claims and restructuring agent.
MERCY HOSPITAL: Court OKs Interim Cash Collateral Access
--------------------------------------------------------
Mercy Hospital, Iowa City, Iowa and affiliates sought and obtained
entry of an order from the U.S. Bankruptcy Court for the Northern
District of Iowa to use cash collateral on an interim basis in
accordance with the budget, with a 10% variance.
The impetus for the filing of the Chapter 11 Cases was the actions
of the Debtors' pre-petition secured lender, through Computershare
Trust Company N.A., as Master Trustee, and Preston Hollow Community
Capital, Inc., as Bondholder Trustee. The filing of the
Receivership Action, only two weeks ago, had a dramatic and
immediate impact on the operations of Mercy Hospital, a nonprofit,
Catholic-based, community hospital located in Iowa City, Iowa.
These actions undoubtedly have jeopardized the ability of Mercy
Hospital to (a) continue to provide continuity of care to its
patients, (b) reassure its employees of Mercy Hospital's continuing
viability, (c) satisfy its ongoing liabilities to vendors, which
ultimately inures to the benefit of all stakeholders, and (d)
fulfill its ongoing mission to the community.
The Debtors require use of cash collateral on a non-consensual
basis to allow Mercy Hospital to continue operations, pay its
employees, care for its patients, and administer the Chapter 11
Cases for the benefit of all creditors, including the Master
Trustee.
Pursuant to a Trust Indenture dated as of November 1, 2011 by and
between the City of Hills, Iowa and Wells Fargo Bank, N.A., as
Trustee and Master Trustee, the Issuer issued $44.615 million in
the aggregate principal amount of its Health Facilities Revenue
Bonds, Series 2011.
The Issuer loaned the proceeds of the 2011 Bonds to Mercy Hospital
pursuant to the Loan Agreement, dated as of November 1, 2011
between the Issuer and Mercy Hospital. To evidence Mercy Hospital's
obligations under the 2011 Loan Agreement, Mercy Hospital executed
and delivered to the Master Trustee the Direct Note Obligation,
Series 2011, dated as of November 1, 2011.
As of the Petition Date, the aggregate principal amount outstanding
under the 2011 Loan Agreement was approximately $24.270 million.
Pursuant to a Trust Indenture dated as of May 1, 2018 by and
between the Issuer and the Master Trustee, the Issuer issued
$41.760 million in the aggregate principal amount of its Health
Facilities Revenue Bonds, Series 2018.
The Issuer loaned the proceeds of the 2018 Bonds to Mercy Hospital
pursuant to the Loan Agreement dated as of May 1, 2018 between the
Issuer and Mercy Hospital.
As of July 31, 2023, the aggregate principal amount outstanding
under the 2018 Loan Agreement is approximately $37.875 million.
On August 3, 2023, the Master Trustee noticed its intent to setoff
the aggregate amount of $3.8 million from monies on deposit in
reserve accounts controlled by the Master Trustee to principal and
interest. The aggregate principal value of the 2018 Bonds, to the
extent such amounts were appropriately setoff prior to the Petition
Date, is approximately $34.3 million.
Mercy Hospital issued the 2011 Notes and the 2018 Notes,
respectively, to the Master Trustee as trustee for the bondholders
of the 2011 Bonds and the 2018 Bonds, respectively pursuant to the
Master Trust Indenture, dated as of June 1, 1998.
The 2011 Obligations and the 2018 Obligations are pari passu in
right of payment. To the Debtors' knowledge, Preston Hollow is the
beneficial holder of all of the 2018 Bonds, but none of the 2011
Bonds. Pursuant to the Bond Documents, because Preston Hollow owns
more than 25% of the aggregate bonds issued under the Master Trust
Indenture, Preston Hollow has the ability to direct the Master
Trustee for certain actions taken under the Master Trust
Indenture.
The Debtors seek authority to use cash collateral to continue (a)
operating Mercy Hospital as a going concern, (b) providing
continuity of care to the Debtors' patients, pay employees and
other expenses incurred by Mercy Hospital and its ancillary
businesses, and (c) funding the administration of these Chapter 11
Cases. To be sure, the Debtors intend to negotiate with the Master
Trustee following the filing of the Chapter 11 Cases to determine
whether use of cash collateral can be obtained on a consensual
basis.
In exchange for their use of cash collateral, the Debtors will
provide weekly financial reporting and grant the following adequate
protection to the Master Trustee, solely to the extent of the
postpetition diminution in value:
(a) Replacement liens on all of Mercy Hospital's postpetition
property which, but for the commencement of the Chapter 11 Cases,
would constitute Prepetition Collateral subject to validly
perfected, non-avoidable Prepetition Liens as of the Petition Date;
and
(b) Allowed superpriority administrative expense claims
against Mercy Hospital.
The Interim Order provides a "Carve-Out" of certain statutory fees
and professional fees of the Debtors and any statutory committee of
unsecured creditors appointed pursuant to Bankruptcy Code section
1103. The reasonable fees and expenses incurred by a trustee under
Bankruptcy Code section 726(b) are capped at $50,000.
A copy of the motion is available at https://urlcurt.com/u?l=CgzM0Y
from PacerMonitor.com.
A copy of the order is available at https://urlcurt.com/u?l=7ebxwK
from PacerMonitor.com.
About Mercy Hospital, Iowa City, Iowa
Mercy Hospital, Iowa City, Iowa is a Catholic-based Iowa nonprofit
corporation and a tax-exempt organization described in Section
501(c)(3) of the Internal Revenue Code of 1986 (as amended) that
operates an acute care community hospital and clinics located in
Iowa City, Iowa and surrounding communities.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Iowa Lead Case No. 23-00623) on August
7, 2023. In the petition signed by Mark E. Toney, chief
restructuring officer, the Debtor disclosed up to $500 million in
both assets and liabilities.
Judge Thad J. Collins oversees the case.
The Debtors tapped NYEMASTER GOODE, P.C and MCDERMOTT WILL & EMERY
LLP as bankruptcy co-counsel, TONEYKORF PARTNERS, LLC as provider
of interim management services, H2C SECURITIES INC. as investment
banker, and EPIQ CORPORATE RESTRUCTURING, LLC as notice and claims
agent.
MERIDIAN RESTAURANTS: Gets OK to Expand Scope of Keen's Services
----------------------------------------------------------------
Meridian Restaurants Unlimited, LC and its affiliates obtained an
order from the U.S. Bankruptcy Court for the District of Utah
authorizing Keen-Summit Capital Partners, LLC to provide additional
real estate advisory services.
The services include negotiations with landlords for further
extensions of the deadline to assume or reject any of their lease
agreements with Burger King Corporation. The extensions would give
the Debtors and their chief restructuring officer enough time to
evaluate and market their restaurants for sale.
Keen-Summit will be paid $500 per extension agreement.
The firm can be reached at:
Matt Bordwin
Keen-Summit Capital Partners LLC
1 Huntington Quadrangle, Suite 2C04
Melville, NY 11747
Telephone: (646) 381-9202
Email: mbordwin@keen-summit.com
About Meridian Restaurants Unlimited
Meridian Restaurants Unlimited, LC, owner and operator of
restaurants in Utah, and its affiliates filed voluntary petitions
for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Utah
Case No. 23-20731) on March 2, 2023. At the time of the filing,
Meridian Restaurants Unlimited disclosed $10 million to $50 million
in both assets and liabilities.
Judge Kevin R. Anderson oversees the cases.
The Debtors tapped Markus Williams Young & Hunsicker, LLC as
bankruptcy counsel; Ray Quinney & Nebeker P.C. as local and
litigation counsel; Peak Franchise Capital, LLC as financial
advisor; and Keen-Summit Capital Partners, LLC as real estate
advisor. BMC Group, Inc. is the noticing agent.
The U.S. Trustee for Region 19 appointed an official committee to
represent unsecured creditors in the Debtors' Chapter 11 cases. The
committee is represented by Foley & Lardner, LLP.
MICHAEL KORS: Moody's Puts 'Ba1' CFR on Review for Upgrade
----------------------------------------------------------
Moody's Investors Service has placed Michael Kors (USA), Inc. Ba1
corporate family rating under review for upgrade. Moody's also
placed the Ba1-PD probability of default rating and Ba1 senior
unsecured global notes rating under review for upgrade. Michael
Kors' speculative grade liquidity rating (SGL) SGL-1 remains
unchanged. The outlook was changed to rating under review from
positive.
The review for upgrade reflects governance considerations which
includes Tapestry, Inc.'s (Tapestry) announcement [1] (Baa2 RUR
downgrade) that is has entered into a definitive agreement to
acquire Capri Holdings Limited (Capri), the parent of Michael Kors,
in an all cash deal valued at a total enterprise value of
approximately $8.5 billion. The boards of directors of Capri and
Tapestry have both unanimously approved the transaction. The deal
is expected to close in calendar year 2024 and is subject to
shareholder approvals as well as the receipt of regulatory
approvals and other customary closing conditions.
On Review for Upgrade:
Issuer: Michael Kors (USA), Inc.
Corporate Family Rating, Placed on Review for Upgrade, currently
Ba1
Probability of Default Rating, Placed on Review for Upgrade,
currently Ba1-PD
Backed Senior Unsecured Global Notes, Placed on Review for
Upgrade, currently Ba1
Outlook Actions:
Issuer: Michael Kors (USA), Inc.
Outlook, Changed To Rating Under Review From Positive
RATINGS RATIONALE / FACTORS THAT COULD LEAD TO AN UPGRADE OR
DOWNGRADE OF THE RATINGS
Moody's rating review of Michael Kors will focus on the likelihood
of obtaining regulatory and shareholder approval. The review will
also consider combined company's long-term financial strategy in
the context of the improvement in business profile of the combined
entity, and the likely pace of deleveraging post-closing as well as
its commitment to suspending share repurchases until it has reached
Tapestry's 2.5x net leverage target. In addition, Moody's will
assess the execution and integration risks associated with the
acquisition, future operating performance, growth and profitability
of the combined company and the amount and timing of synergies.
The review will consider the structure of the acquisition and what
support Tapestry will provide to any current rated debt obligations
of Michael Kors that remain outstanding. The deal, which is
expected to close during 2024, has committed financing and is
subject to customary closing conditions and the receipt of
regulatory approvals. Moody's expects that any potential upgrade
would be limited to one notch upon conclusion of the review.
Absent the successful closing of the acquistion by Tapestry,
Michael Kors' ratings could be upgraded over time if the company
has sustained positive organic revenue and operating income growth
with consistent growth at all of its brands while maintaining a
conservative financial policy and excellent liquidity. Quantitative
metrics include debt/EBITDA sustained below 2.5 times and interest
coverage above 5.5 times while maintaining an unsecured capital
structure.
Given the review for upgrade, a downgrade is unlikely at this time.
However, ratings could be downgraded to the extent organic sales
growth and operating income growth do not return to more stabilized
levels or liquidity deteriorates. Ratings could also be downgraded
if financial policies were to become more aggressive, such as
through acquisitions or share repurchases that are debt financed.
Quantitative metrics include debt/EBITDA sustained above 3.5 times
or EBIT/interest below 4.5 times.
Michael Kors (USA), Inc. is a wholly owned subsidiary of Capri
Holdings Limited, a global fashion luxury group. Its portfolio
consists of iconic brands, which include Michael Kors, Versace and
Jimmy Choo. Its brands cover the full spectrum of fashion luxury
categories including women's and men's accessories, footwear and
ready-to-wear as well as wearable technology, watches, jewelry,
eyewear and a full line of fragrance products. Revenue is about
$5.6 billion for the twelve months ended April 1, 2023.
Headquartered in New York, NY, Tapestry, Inc. is a global designer
and marketer of premium handbags, accessories, footwear and apparel
under the Coach, Kate Spade and Stuart Weitzman brands. Coach brand
revenue was $4.9 billion for the twelve months ending April 1,
2023, generated through nearly 1,000 stores, digital channels and
wholesale partners. Tapestry also owns the Kate Spade brand, with
approximately $1.5 billion in sales, and Stuart Weitzman, a luxury
footwear brand with approximately $290 million in sales.
The principal methodology used in these ratings was Retail
published in November 2021.
MONROE GARDENS: Amends Peoples Bank & Sanitary Board Secured Claims
-------------------------------------------------------------------
Monroe Gardens, LLC, submitted a Second Amended Small Business Plan
of Reorganization dated August 7, 2023.
This Plan proposes to pay creditors of the Debtor from cash flow
from operations and future income.
This Plan provides for three classes of secured claims, one class
of priority unsecured claims and one class of general unsecured
claims. Unsecured creditors holding allowed claims will receive
distributions, which the proponent of this Plan has valued 100% on
the dollar.
This Plan also provides for the payment of administrative and
priority claims to the extent permitted by the Code in
installments.
The Debtor has deferred ongoing maintenance on its properties that
have not been affordable due to the amount of the forbearance
agreement. One example is a new roof. The Debtor will embark on
capitol improvements upon confirmation of this plan. The Debtor has
received estimates of $48,940.20 for roof replacement. The Debtor
will need to save this amount over a $9,500.00 a month.
Class 2 consists of the Secured Claim of Peoples Bank. The Debtor
will pay Peoples Bank $425,000.00 at confirmation if the Court
approves the motion that has been filed by the Debtor to engage in
post-petition financing in the amount of $525,000.00.
Class 4 consists of the Secured Claim of the City of Beckley
Sanitary Board. Debtor has a statutory lien with the City of
Beckley Sanitary Board which is junior in priority to Peoples Bank.
Their claim, claim 2, is filed as a priority claim in the amount of
$23,064.43 for roof replacement. The Debtor will pay the Sanitary
Board $23,064.46 at confirmation as full and final payment on their
lien.
Class 5 consists of unsecured claims. All unsecured claims allowed
under Section 502 of the Code will be paid in full upon 100% the
sale of the Summers County property. The Debtor schedule estimated
that property to be worth $285,000.00. There were no unsecured
claims scheduled and there are no unsecured claims filed.
Debtor will commence making its payments under the Plan on the
fifteenth day of the calendar month that follows the effective date
of the plan. It will fund the plan payments from its income in the
ordinary course of its business.
The Debtor contemplates that both of the impaired secured creditors
will accept this plan and that there are no unsecured creditors.
The Debtor will continue to rent real property for a nursery to a
related entity and will sell its Talcott Summers County, West
Virginia real property. If necessary to fund this plan, the Debtor
will need to save this amount over an 18-month period out of the
rent of $9,500.00 a month. Jenifer Monroe will continue to operate
the Debtor's business without salary.
A full-text copy of the Second Amended Plan dated August 7, 2023 is
available at https://urlcurt.com/u?l=jYB7bw from PacerMonitor.com
at no charge.
Counsel for Debtor:
Pepper & Nason
Andrew S. Nason, Esq.
Emmett Pepper, Esq.
8 Hale Street
Charleston, WV 25301
About Monroe Gardens
Monroe Gardens, LLC owns three properties in Talcott, W.Va;
Roanoke, Va.; and Beckley, W.Va., having a total aggregate value of
$2.29 million.
Monroe Gardens filed a petition for relief under Subchapter V of
Chapter 11 of the Bankruptcy Code (Bankr. S.D. W.Va. Case No.
22-50094) on Dec. 23, 2022, with up to $500,000 in assets and up to
$10 million in liabilities. Joe Mark Supple has been appointed as
Subchapter V trustee.
Judge B. Mckay Mignault oversees the case.
Andrew S. Nason, Esq., at Pepper & Nason and Foti Flynn Lowen &
Co., P.C. serve as the Debtor's legal counsel and accountant,
respectively.
MXP OPERATING: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: MXP Operating, LLC
4757 W Park Blvd, Suite 113 #174
Plano, TX 75093
Chapter 11 Petition Date: August 11, 2023
Court: United States Bankruptcy Court
Eastern District of Texas
Case No.: 23-41446
Debtor's Counsel: Eric A. Liepins, Esq.
ERIC A. LIEPINS
12770 Coit Road
Suite 850
Dallas, TX 75251
Tel: 972-991-5591
Fax: 972-991-5788
Email: eric@ealpc.com
Total Assets: $2,732,000
Total Liabilities: $8,603,928
The petition was signed by Rachel T. Patman, Esq. as managing
member.
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/KJLSJNQ/MXP_Operating_LLC__txebke-23-41446__0001.0.pdf?mcid=tGE4TAMA
NANTASKET MANAGEMENT: Case Summary & Three Unsecured Creditors
--------------------------------------------------------------
Debtor: Nantasket Management, LLC
1153 Nantasket Avenue
Hull, MA 02045
Business Description: Nantasket owns six single family homes
(all in need of upgrades) located in
Massachusetts valued at $3,047,000 in the
aggregate.
Chapter 11 Petition Date: August 11, 2023
Court: United States Bankruptcy Court
District of Massachusetts
Case No.: 23-11272
Judge: Hon. Janet E. Bostwick
Debtor's Counsel: Barry R. Levine, Esq.
LAW OFFICES OF BARRY R. LEVINE
100 Cummings Center - Suite 327G
Beverly, MA 01915-6123
Tel: 978-922-8440
Fax: 978-998-4636
Email: barry@levineslaw.com
Total Assets: $3,119,500
Total Liabilities: $2,104,949
The petition was signed by Michael Kim as manager.
A full-text copy of the petition containing, among other items, a
list of the Debtor's three unsecured creditors is available for
free at PacerMonitor.com at:
https://www.pacermonitor.com/view/LV44NHQ/Nantasket_Management_LLC__mabke-23-11272__0001.0.pdf?mcid=tGE4TAMA
NEXTPOINT FINANCIAL: Chapter 15 Case Summary
--------------------------------------------
Lead Debtor: NextPoint Financial Inc.
1133 Melville St., Suite 2700
Vancouver BC V6E4E5
Business Description: NextPoint Financial is an all-inclusive
marketplace for financial services
empowering hardworking and underserved
consumers and small businesses to get to
the "NextPoint" in their financial
futures. NextPoint's primary business
units are Liberty Tax, a provider of tax
preparation services, and Community Tax,
an advocate for tax debt resolution on
behalf of customers.
Chapter 15 Petition Date: July 26, 2023
Court: United States Bankruptcy Court
District of Delaware
Thirty affiliates that concurrently filed voluntary petitions for
relief under Chapter 15 of the Bankruptcy Code:
Debtor Case No.
------ --------
NextPoint Financial Inc. (Lead Case) 23-10983
NPI Holdco LLC 23-10984
NPLM Holdco LLC 23-10985
LT Holdco, LLC 23-10986
MMS Servicing LLC 23-10987
LT Intermediate Holdco LLC 23-10988
LoanMe, LLC 23-10989
SiempreTax+ LLC 23-10990
JTH Tax LLC 23-10991
LoanMe Funding, LLC 23-10992
Liberty Tax Holding Corporation 23-10993
LM Retention Holdings, LLC 23-10994
LoanMe Trust Prime 2018-1 23-10995
LoanMe Trust SBL 2019-1 23-10996
LoanMe Stores, LLC 23-10997
InsightsLogic, LLC 33-10998
LM 2020 CM I SPE, LLC 23-10999
Liberty Tax Service Inc. 23-11000
JTH Financial, LLC 23-11001
JTH Properties 1632, LLC 23-11002
Liberty Credit Repair, LLC 23-11003
Wefile, LLC 23-11004
JTH Tax Office Properties, LLC 23-11005
LTS Software, LLC 23-11006
JTH Court Plaza, LLC 23-11007
360 Accounting Solutions, LLC 23-11008
LTS Properties, LLC 23-11009
CTAX Acquisition LLC 23-11010
Community Tax Puerto Rico LLC 23-11011
Community Tax LLC 23-11012
Judge: Hon. Thomas M. Horan
Foreign Representative: NextPoint Financial Inc.
1133 Melville St., Suite 2700
Vancouver BC V6E4E5
Canada
Peter Kravitz
Foreign Proceeding: Supreme Court of British of Columbia
Foreign Representative's
Counsel: R. Craig Martin, Esq.
DLA PIPER, LLP (US)
1201 North Market Street, Suite 2100
Wilmington DE 19801
Tel: (302) 468-5700
Email: craig.martin@us.dlapiper.com
Estimated Assets: Unknown
Estimated Debt: Unknown
A full-text copy of the Chapter 15 is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/M24CELI/NextPoint_Financial_Inc_and_NextPoint__debke-23-10983__0001.0.pdf?mcid=tGE4TAMA
ONE CALL CORP: $700MM Bank Debt Trades at 21% Discount
------------------------------------------------------
Participations in a syndicated loan under which One Call Corp is a
borrower were trading in the secondary market around 79.4
cents-on-the-dollar during the week ended Friday, August 11, 2023,
according to Bloomberg's Evaluated Pricing service data.
The $700 million facility is a Term loan that is scheduled to
mature on April 22, 2027. The amount is fully drawn and
outstanding.
One Call Corporation operates in providing health care services.
OPEN COURT: Files Emergency Bid to Use Cash Collateral
------------------------------------------------------
Open Court Sports Complex, LLC asks the U.S. Bankruptcy Court for
the Southern District of Texas, Houston Division, for authority to
use cash collateral.
The Debtor requires the use of the cash collateral and funds
generated from its operations to continue to operate its business,
to maintain a going concern value of the business, and to ensure
that adequate funds are available for normal and customary business
expenses and operating needs including utilities maintenance,
insurance, payroll, inventory purchases, and taxes.
This case was filed as a result of the Debtor's default on its loan
obligations with Susser Bank, N.A., successor in interest to
Affiliated Bank, and the US Small Business Administration. The
default arose as a result of COVID-19 related reduction in revenue
and the interest rate adjustments required by the underlying
promissory notes. The reduction in available cash impacted the
Debtor's ability to maintain its financial affairs.
On June 28, 2019, Susser Bank, N.A., successor in interest to
Affiliated Bank, N.S. made a loan to the Debtor in the $2.7 million
secured by both UCC-1 Financing Statement filed under Texas
Secretary of State's File No. 190023935698 and a Deed of Trust to
Garry Graham, Trustee for the benefit of Susser, recorded on July
1, 2019, under Fort Bend County Clerk's File No. 2019070770. The
Susser UCC-1 granted the bank a first lien on all accounts,
accounts receivable, inventory, fixtures, and general intangibles.
The Susser DOT granted the bank a first lien on the real property
located at 1808 Woodcreek Bend Lane, Katy, Texas 77494.
On September 20, 2019, Susser extended a second loan to the Debtor
in the original principal amount of $299,000. Susser Note 2 is
secured by a Deed of Trust to Garry Graham, Trustee for the benefit
of Susser, recorded on September 30, 2019, under Fort Bend County
Clerk's File No. 20191104715 confirming Susser's lien on the real
property located at 1808 Woodcreek Bend Lane, Katy, Texas 77494.
On July 6, 2020, Capital Certified Development Corporation, a
program under the US Small Business Administration, extended a loan
in the amount of $2 million to the Debtor. The CDC Note is secured
by both a UCC-1 Financing Statement filed under Texas Secretary of
State's File No. 200033605766 and a Deed of Trust to Rodney J.
Starkweather, Trustee for the benefit of CDC, recorded on August
25, 2020, under Fort Bend County Clerk's File No. 2020112912
against the Property. Contemporaneously, a Subordination Agreement
in favor of CDC was filed under Fort Bend County Clerk's File No.
2020112915 wherein Susser agreed to subordinate its first lien
position under the Susser DOT 2.
Despite the significant obligations owed under the Susser Note 1,
Susser Note 2, and Capital CDC Note, the Debtor believes it has
significant equity in the real property and current operations
which warrant the opportunity to effectively reorganizes its
obligations.
The Debtor's regular business operations and use of its real
property assets generates sales on a daily basis. The Debtor's
tangible and intangible assets, including funds derived from the
operation of its business, are subject to liens held by CDC and
Susser are cash collateral.
As adequate protection for the diminution in value of the
Pre-Petition Collateral or Replacement Collateral caused by the
Debtor's use of the cash collateral, the Debtor will (i) maintain
the value of its business as a going concern and (ii) provide CDC
and Susser replacement liens upon the Debtor's assets and proceeds
thereof including but not limited to post-petition accounts,
accounts receivable and cash.
A copy of the motion is available at
https://urlcurt.com/u?l=zZblwT from PacerMonitor.com.
A copy of the budget is available at https://urlcurt.com/u?l=ZB9aCO
from PacerMonitor.com.
The Debtor projects $32,268 in total deposits and $30,660 in total
expenses for the period from August 1 to 18, 2023.
About Open Court Sports Complex, LLC
Open Court Sports Complex, LLC is an indoor basketball, volleyball,
pickleball, and floor sports facility in Katy, Texas.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Tex. Case No. 23-32826) on July 8,
2023. In the petition signed by Angela Smith-Duncan, manager, the
Debtor disclosed $8,281,574 in assets and $6,208,520 in
liabilities.
Judge Jeffrey P. Norman oversees the case.
Kimberly A. Bartley, Esq., at WALDRON & SCHNEIDER, LLP, represents
the Debtor as legal counsel.
ORIGINAL TRADERS: Chapter 15 Case Summary
-----------------------------------------
Chapter 15 Debtor: Original Traders Energy Ltd.
7273 Indian Line Road
Wilsonville, Ontario N0 E1Z0
Canada
Type of Business: Original Traders Energy supplies and
distributes gasoline and diesel fuel
products exclusively to First Nations
across Canada.
Chapter 15 Petition Date: May 3, 2023
Court: United States Bankruptcy Court
Southern District of Florida
Case No.: 23-13519
Judge: Hon. Erik P. Kimball
Foreign Representative: KPMG Inc., in its capacity as the
Monitor of the OTE Group
333 Bay Street, Suite 4600
Toronto, ON, M5H 2S5
Canada
Paul van Eyk
Foreign Proceeding: Original Traders Energy Ltd. and 2496750
Ontario Inc. (Ontario, Canada)
Foreign
Representative's
Counsel: Peter H. Levitt, Esq.
Shutts & Bowen
200 S. Biscayne
Miami, FL 33131
Tel: 305-415-9447
Email: plevitt@shutts.com
Estimated Assets: Unknown
Estimated Debt: Unknown
A full-text copy of the Chapter 15 is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/ESXOYJQ/Original_Traders_Energy_Ltd__flsbke-23-13519__0001.0.pdf?mcid=tGE4TAMA
RAP OPERATING: Unsecureds Will Get $100 per Month for 60 Months
---------------------------------------------------------------
RAP Operating, LLC, filed with the U.S. Bankruptcy Court for the
Western District of Louisiana a Plan of Reorganization under
Subchapter V dated August 8, 2023.
Debtor was formed and registered with the Louisiana Secretary of
State on May 13, 2015, and has been in operation since that time.
Debtor is wholly owned by James E. Robbins and Elisa Robbins, who
are the sole members of the company.
The Debtor is engaged in the oilfield service industry in Central
Louisiana, and is in the operation and management of several oil
wells located in Matagorda County, Texas. The oil wells are no
longer operating and are shut in and have been since April 30,
2023.
The plan anticipates the payment of the claims in this case will be
made from current operating profits, with some funds received from
the disposition of the interest in the oil wells.
However, recent large increases in insurance costs throughout the
State of Louisiana have made precise predictions for further
operations difficult. Debtor believes it is still impacted by the
COVID-19 pandemic. So, any attempt at projecting income at this
point is purely speculative as a result of the current state of the
general economy of the United States. The downturn in the economy
as well as consumer concerns over the near economic future make
estimates as to income and expenses hard to determine with any
exactitude.
This Plan of Reorganization proposes to pay creditors of RAP
Operating from the sale of the oil wells and current profits from
current operations.
Class 4 consists of the Claim of the Unsecured Creditors. The total
amount of all unsecured claims is not known due to the pending sale
of the assets. After the payment of all administrative claims in
this case including attorney's fees and Chapter 11 Subchapter V
Trustee fees, General Unsecured Claims shall be paid $100.00 per
month for 60 months. Payments will begin after all Administrative
Expenses have been paid in full.
Class 5 consists of the Equity interests in the debtor. Unless
otherwise provided herein, title to property of the estate,
subjecting to existing liens found to be valid in bankruptcy, shall
vest in the debtor upon confirmation of this Plan. Equity Security
Holders will retain their ownership interest in the debtor.
The funds necessary for the satisfaction of the creditors' claims
shall be derived from net operating profits of the debtor as well
accounts receivable collected after the filing of the case.
A full-text copy of the Plan of Reorganization dated August 8, 2023
is available at https://urlcurt.com/u?l=hhMW7j from
PacerMonitor.com at no charge.
About Rap Operating
Rap Operating, LLC, is engaged in the oilfield service industry in
Central Louisiana, and is in the operation and management of
several oil wells located in Matagorda County, Texas.
The Debtor filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. W.D. La. Case No. 23-80316) on June 2,
2023, with $98,300 in assets and $1,609,309 in liabilities. James
E. Robbins, managing member, signed the petition.
Judge Stephen D. Wheelis oversees the case.
Thomas R. Willson, Esq., represents the Debtor as legal counsel.
RAW INDULGENCE: Unsecureds Will Get 6.6% of Claims over 3 Years
---------------------------------------------------------------
Raw Indulgence, Ltd., submitted a Subchapter V Plan of
Reorganization dated August 7, 2023.
The Debtor is a whole-sale retailer of vegan protein bars,
operating under the trade name "Raw Rev". The Debtor engages in
whole sale of its products via its online store.
Historically, the Debtor was owned and operated by Alice Benedetto
and her husband as 50-50 partners until their divorce, which
culminated in litigation and ultimately a settlement on October 4,
2021, whereby Benedetto remained as the sole owner and operator of
the Debtor.
Specifically, the Debtor has determined that $217,000.00 in
equipment and $565,708.00 in money were transferred to Benedetto's
ex-husband prior to the Chapter 11 case. The Debtor reserves the
right after further investigation to pursue any causes of action
related to these transfers.
The Debtor reserves the right to commence adversary proceedings
against the MCA creditors to determine the nature, extent, and
validity of their liens, as the Debtor believes their claims should
be disallowed due to their usurious and unconsciable agreements.
The proceeds recovered from these future actions will in part
support the funding of this Plan.
This Plan of Reorganization proposes to pay creditors from the
Debtor's cash on hand, net proceeds (after legal fees and costs)
recovered from litigation with Benedetto's ex-husband and the MCA
creditors, if any, and the Debtor's projected income for the next
three years.
Non-priority unsecured creditors holding allowed claims will
receive a 6.6% distribution on their allowed claims. This Plan also
provides for the payment of administrative and priority claims in
full on the Effective date.
Class 4 consists of General Unsecured Claims of the Debtor.
Impaired. Class 4 are the allowed general unsecured claims of the
Debtor in the approximate amount of $751,373 and all other
creditors asserting a lien in the Debtor's assets. Each holder of
an allowed Class 4 claim shall receive a 6.6% distribution on their
allowed claim over a period of three years after the Effective
Date, or in one lump sum at any time.
Class 5 represents the equity interest of the Debtor. Upon the
effective date of the Plan, the holder of equity interest in the
Debtor will retain her interests.
The Plan shall be funded from (a) the Debtor's cash on hand, (b)
proceeds recovered from litigation with Benedetto’s ex-husband
and the MCA creditors, if any, and (c) the Debtor's projected
income for the next three years.
A full-text copy of the Subchapter V Plan dated August 7, 2023 is
available at https://urlcurt.com/u?l=vov9YC from PacerMonitor.com
at no charge.
Attorney for Plan Proponent:
Robert L. Rattet, Esq.
Davidoff Hutcher & Citron, LLP
120 Bloomingdale Road, Suite 100
White Plains, NY 10605
Telephone: (212) 557-7200
Facsimile: (212) 286-1884
Email: rlr@dhclegal.com
About Raw Indulgence
Raw Indulgence is a protein bar manufacturer in Elmsford, NY.
Raw Indulgence sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D.N.Y. Case No. 23-22350) on May 8, 2023.
In the petition filed by Alice Benedetto, as chief executive
officer, the Debtor reported total assets of $708,412 and total
liabilities of $3,888,567.
The case is overseen by the Honorable Bankruptcy Judge Sean H.
Lane.
The Debtor is represented by Robert L. Rattet, Esq. at DAVIDOFF
HUTCHER & CITRON LLP.
RECESS HOLDINGS: Moody's Affirms B2 CFR & Rates New Term Loan B2
----------------------------------------------------------------
Moody's Investors Service affirmed Recess Holdings, Inc. B2
Corporate Family Rating and B2-PD Probability of Default Rating.
Moody's also affirmed the B1 rating on the existing first lien
senior secured term loan due 2024 and the Caa1 rating on the second
lien senior secured term loan. Moody's assigned a B2 rating to the
company's proposed first lien senior secured term loan due 2027.
The outlook is stable.
Recess is proposing to issue an upsized $640 million first lien
senior secured term loan and utilize the proceeds to repay the
existing $396 million first lien term loan and the roughly $145
million of debt outstanding on the second lien term loan. The
transaction will also provide $87 million of cash on the balance
sheet to fund future acquisitions. The maturity on the first lien
term loan will be March 2027, which is an extension from the
September 2024 maturity of the existing first lien term loan.
Recess is also increasing the commitment on its asset based lending
revolving credit facility to $125 million from $105 million
concurrently and extending the maturity by two years to September
2026.
The transaction is credit positive because it will provide
meaningful liquidity, position the company for further growth, and
address the 2024 maturities. The transaction will increase leverage
but to a range that remains modest for the rating. Moody's expects
debt to EBITDA will increase to around 3.3x pro forma for the
transaction from 2.8x (Moody's adjusted for the last 12 months
ended March 2023). Deployment of balance sheet cash towards
acquisitions would likely reduce leverage but the lack of clarity
on the assets the company might purchase creates uncertainty about
the overall business risk impact. Moody's expects Recess to target
acquisitions within its existing outdoor play and amenity
end-markets. Also, Moody's expects the company's strong operating
performance will sufficiently cover the step-up in interest expense
from the increase in total debt. A potential overall reduction in
the blended interest rate due to the retirement of the higher cost
second lien term loan would partially mitigate the cash interest
impact.
Moody's affirmed the CFR because of the increase in debt and
leverage, and the uncertainty regarding the business risk of
potential acquisitions. The affirmation also reflects the
company's end market concentration in schools and local
municipalities, narrow geographic footprint and sensitivity of its
discretionary products to changes in the economic cycle. The
company's moderate leverage and very good liquidity strongly
position the company within the rating and provides flexibility
within the rating to absorb an eventual end market downturn.
The B2 rating on the proposed first lien term loan is a notch lower
than the B1 rating on the existing first lien term loan due to the
change in the capital structure involving the repayment of second
lien term loan and increase in the size of the ABL. The first lien
term loan now represents the preponderance of the obligations in
the capital structure. Moody's believes the elimination of the loss
absorption cushion previously provided by the second lien term loan
in a default and the increase in the size of the first lien term
loan would reduce the recovery on the first term loan in the event
of a default. Moody's expects to withdraw the ratings on the
existing first and second lien term loans if the instruments are
retired as expected as part of the proposed refinancing.
Affirmations:
Issuer: Recess Holdings, Inc.
Corporate Family Rating, Affirmed B2
Probability of Default Rating, Affirmed B2-PD
Senior Secured 1st Lien Term Loan, Affirmed B1
Senior Secured 2nd Lien Term Loan, Affirmed Caa1
Assignments:
Issuer: Recess Holdings, Inc.
Senior Secured 1st Lien Term Loan, Assigned B2
Outlook Actions:
Issuer: Recess Holdings, Inc.
Outlook, Remains Stable
RATINGS RATIONALE
Recess' B2 CFR reflects the company's end market concentration in
schools and local municipalities, narrow geographic footprint and
sensitivity of its discretionary products to changes in the
economic cycle. The company's suite of outdoor and indoor
commercial recreational equipment and amenities are generally
high-cost with long life cycles that are deferrable during periods
when customers economize spending. Governance factors include the
company's aggressive financial policies under private equity
ownership including at times operating with high financial leverage
and a growth through acquisition strategy although the company has
at times utilized excess cash flow to minimize the acquisition
impact to leverage.
Recess is the leading manufacturer of commercial recreational and
outdoor amenities with meaningful scale compared to competitors in
this niche market although relatively small relative to the broader
consumer durables universe. Demand for the company's products
remains healthy and is supported by solid school and municipal
budgets, which continue to benefit from good tax revenue and
federal stimulus. An EBITDA margin in the mid-to-high teens,
positive free cash flow, and very good liquidity offers cushion to
absorb temporary periods of weak demand. Good demand for outdoor
recreational equipment and favorable reinvestment of free cash flow
through acquisitions that build scale and product diversity is
contributing to moderate 3.3x debt-to-EBITDA leverage pro forma for
the proposed refinancing. The leverage level strongly positions the
company within the B2 category and provides flexibility within the
rating to absorb an eventual end market downturn. Recess' very good
liquidity reflects Moody's expectations for continued positive free
cash flow of around $80 – $90 million over the next 12 months,
and its access to an undrawn $125 million asset based lending
revolving facility (ABL) due 2026, which provides financial
flexibility to fund working capital needs and acquisitions over the
next 12 months. Cash that will increase to roughly $135 million pro
forma for the transaction also supports liquidity though Moody's
anticipates the cash will be drawn down for acquisitions over the
next year.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The stable outlook reflects Moody's expectation that the company's
profitability will remain solid over the next 12 – 18 months and
that debt-to-EBITDA leverage will be sustained materially below
4.0x, providing capacity to absorb a decline in end-market demand
for outdoor recreation and amenity equipment. The outlook also
reflects Moody's expectation for free cash flow generation of
$80-90 million and at least good liquidity.
The rating may be upgraded if the company continues to generate
consistent organic revenue growth and a stable EBITDA margin and
sustains debt-to-EBITDA comfortably below 4.0x across economic
cycles that is backed by a financial policy that is commensurate
with these objectives. Moody's would also need greater comfort that
recent consumer demand can be sustained as municipal and school
budgets see funding levels moderate and as pandemic related
stimulus abates.
The rating could be downgraded if the company's revenue and
earnings deteriorate such that debt/EBITDA is sustained above 5.5x
or if liquidity weakens, including if free cash flow is modest to
negative. A large debt financed acquisition or shareholder
distribution that meaningfully increases leverage could also put
downward pressure on the rating.
ENVIRONMENTAL SOCIAL AND GOVERNANCE CONSIDERATIONS
Recess' CIS-4 indicates the rating is lower than it would have been
if ESG risk exposures did not exist. The CIS mainly reflects
governance risks stemming from concentrated decision making and at
times aggressive financial strategy under private equity ownership.
As with most consumer durables companies, Recess faces
environmental concerns largely reflecting the company's use of
natural capital for raw materials, primarily steel, as well as
carbon transition risks and waste and pollution. Recess also faces
social risks related to exposure to health and safety and
responsible production risks inherent in a manufacturing
environment.
The principal methodology used in these ratings was Consumer
Durables published in September 2021.
Headquartered in Chattanooga, TN, Recess Holdings manufactures
commercial playground equipment, adult outdoor fitness equipment,
bleachers, playground surfacing, shade products, and outdoor site
amenities such as benches, tables, and waste receptacles. It also
sells a variety of products including swimming pool hand rails,
life guard chairs, bike racks, and exercise equipment. The company
generated revenue of $965 million for the twelve months ending
March, 2023. Recess was acquired by private equity firm Court
Square Capital Partners in 2017.
RESHAPE LIFESCIENCES: Incurs $3.5 Million Net Loss in 2nd Quarter
-----------------------------------------------------------------
Reshape Lifesciences Inc. filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing a net loss
of $3.49 million on $2.25 million of revenue for the three months
ended June 30, 2023, compared to a net loss of $9.44 million on
$2.89 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 $6.15 million on $4.54 million of revenue compared to a net
loss of $17.56 million on $5.33 million of revenue for the six
months ended June 30, 2022.
As of June 30, 2023, the Company had $11.85 million in total
assets, $5.11 million in total liabilities, and $6.74 million in
total stockholders' equity.
ReShape said, "The Company currently does not generate revenue
sufficient to offset operating costs and anticipates such
shortfalls to continue as the Company has modified its strategy to
a metrics-driven approach through a sustainable and scalable
business model, via a digital lead generation and re-engagement
strategy. As of June 30, 2023, the Company had net working capital
of approximately $6.1 million, primarily due to cash and cash
equivalents and restricted cash of $4.7 million, and $2.0 million
of accounts receivable. The Company has raised gross proceeds of
$12.7 million between the public offerings that occurred on
February 8, 2023, and April 24, 2023. Based on its available cash
resources, the Company may not have sufficient cash on hand to fund
its current operations for more than twelve months from the date of
filing this Quarterly Report on Form 10-Q. This condition raises
substantial doubt about the Company's ability to continue as a
going concern."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1427570/000155837023013645/rsls-20230630x10q.htm
About ReShape Lifesciences
ReShape Lifesciences Inc. (Obalon Therapeurtics, Inc.) is a weight
loss and metabolic health-solutions company, offering an integrated
portfolio of proven products and services that manage and treat
obesity and metabolic disease.
Reshape Lifesciences reported a net loss of $46.21 million for the
year ended Dec. 31, 2022, compared to a net loss of $63.15 million
for the year ended Dec. 31, 2021. As of March 31, 2023, the
Company had $16.35 million in total assets, $8.59 million in total
liabilities, and $7.76 million in total stockholders' equity.
Irvine, California-based RSM US LLP, the Company's auditor since
2022, issued a "going concern" qualification in its report dated
April 17, 2023, citing that the Company has suffered recurring
losses and negative cash flows. The Company currently does not
generate revenue sufficient to offset operating costs and
anticipates such shortfalls to continue. This raises substantial
doubt about the Company's ability to continue as a going concern.
RINGCENTRAL INC: Moody's Assigns First Time Ba3 Corp Family Rating
------------------------------------------------------------------
Moody's Investors Service assigned a first time Ba3 corporate
family rating and Ba3-PD probability of default rating to
RingCentral, Inc. Moody's also assigned a B1 instrument rating to
the company's proposed senior unsecured notes. The outlook is
stable.
Net proceeds from the proposed senior unsecured notes will be used
for general corporate purposes including to repurchase or repay a
portion of the company's outstanding convertible senior notes.
Assignments:
Issuer: RingCentral, Inc.
Corporate Family Rating, Assigned Ba3
Probability of Default Rating, Assigned Ba3-PD
Speculative Grade Liquidity Rating, Assigned SGL-1
Senior Unsecured Regular Bond/Debenture, Assigned B1
Outlook Actions:
Issuer: RingCentral, Inc.
Outlook, Assigned Stable
RATINGS RATIONALE
The Ba3 CFR reflects RingCentral's scale, growth profile and market
position. RingCentral is among the largest unified communications &
collaboration as-a-service ("UCaaS") providers by revenue. Annual
recurring subscription revenue ("ARR") was in excess of $2.2
billion at June 30, 2023, having grown approximately 12% year over
year. ARR growth has averaged nearly 30% over the past 10 years.
Over 40% of ARR comes from small and medium businesses ("SMB"),
enabling RingCentral to maintain premium average revenue per user
("ARPU") in excess of $30 since 2019.
Overall industry UCaaS cloud penetration is below 10% while a large
share of businesses are planning or evaluating migration to benefit
from lower costs, greater reliability, and advanced features.
Migration of on-prem seats to the cloud will support at least mid-
to high-single digit UCaaS market growth over the next five years,
although overall UC endpoints will likely decline and ARPUs could
see pressure as companies realize operating efficiencies and
services become more commoditized. RingCentral differentiates its
UCaaS offerings through industry leading reliability, extensive
third-party integrations, and developer resources enabling
customization. RingCentral also prioritizes innovation, for
instance recently developing a push-to-talk feature for front-line
workers, an embedded offering in a single pane of glass for
Microsoft Teams as well as AI offerings.
Contact center as-a-service ("CCaaS") is expected to grow at
roughly three times the growth rate of the UCaaS market.
RingCentral had approximately $300 million in CCaaS ARR as of
December 31, 2022, about 15% of total. RingCentral has experienced
very strong CCaaS growth in the past two years, with triple digit
growth from customers with one hundred or more agents. RingCentral
relies on NICE inContact, Inc. for its CCaaS capabilities although
the company is launching a standalone offering, initially targeted
at smaller companies. Customers increasingly are seeking a single
vendor for an integrated UCaaS and CCaaS solution. RingCentral's AI
capabilities have significant application opportunities for CCaaS,
offering sophisticated sentiment analysis, dynamic agent prompting
and other features that help companies increase agent productivity
and drive revenue growth.
The credit profile is limited by RingCentral's high expense base
driven in part by sizable stock-based compensation expense, which
has resulted in breakeven to negative Moody's adjusted EBITDA
margins and non-meaningful leverage measures historically.
Operating expense inclusive of R&D has averaged in excess of 80%
while stock-based compensation expense was approximately $390
million in the LTM period ended June 30, 2023 or nearly 20% of
revenue. While not uncommon for a high growth technology company,
high levels of stock-based compensation are likely unsustainable on
a long-term basis. Moody's expects RingCentral's margin profile to
normalize as the company benefits from operating leverage on higher
revenue, a declining proportion of stock-based compensation expense
relative to revenue, and flow through from the restructuring
program announced at the end of 2022. Improved profitability
remains a key focus for RingCentral, and improved profitability
will support free cash flow relative to debt of at least low-teens
or higher, if the company executes successfully, although the
company will continue to invest in R&D to support product
innovation.
Additionally, while RingCentral has performed well, competitive
threats remain which also constrain the company's credit profile.
RingCentral competes with a range of providers given the sector has
attracted significant capital and new entrants, some of whom have
significantly larger scale and are very well capitalized such as
Cisco Systems, Inc., Microsoft Corporation, and Amazon.com, Inc.
Others like Zoom Video Communications, Inc. have grown very rapidly
and have a higher revenue base. Moody's expects both UCaaS and
CCaaS markets to remain intensely competitive, necessitating
RingCentral's continued execution and innovation.
Governance is a key consideration for the ratings. RingCentral's
founders and certain executive officers hold approximately 54% of
voting power via Class B shares which enjoy a ten-to-one voting
ratio versus Class A common stockholders. Governance risk is
partially offset by RingCentral's majority independent board of
directors and public listing. Additionally, governance risk is
balanced by the company's stated financial policy including a gross
leverage target of 3x in the near-term and below 2x over the medium
to long term.
The stable outlook reflects Moody's expectation that RingCentral's
revenues will grow low double digit over the next 12 to 18 months,
reflecting growth slightly above UCaaS market growth as the company
continues to take share while maintaining its pricing and
associated ARPU, as well as increasing contribution from the
company's CCaaS offerings. Moody's expects RingCentral will achieve
a positive adjusted EBITDA margin (while expensing stock-based
compensation and capitalized software development costs) over the
next 12 to 18 months while yielding at least low teens free cash
flow as a percentage of debt outstanding. Moody's does not
anticipate sizable leveraging acquisitions and assumes share
repurchase will be limited to offset stock-based compensation
issuance.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if RingCentral's operating
performance were to improve such that free cash flow was sustained
in excess of 15% of gross debt while the company also maintains
very good liquidity. The ratings could be downgraded if RingCentral
is not on track to generate normalized EBITDA margins
(Moody's-adjusted, expensing stock based compensation and
capitalized software development cost) of at least 5% and at least
10% FCF/debt over the next 12-18 months. There could also be
downward pressure on ratings if organic revenue growth decelerates
as a result of sustained competitive pressures, or if RingCentral
were to further increase debt balances before achieving normalized
profitability. An erosion of the company's liquidity position could
also lead to a downgrade.
The Speculative Grade Liquidity (SGL) rating of SGL-1 reflects very
good liquidity supported by pro forma cash of $250 million, and an
undrawn $200 million revolving credit facility terminating February
2028. The revolving credit facility has a springing maturity
feature 91 days prior to the final scheduled maturity date of the
convertible notes if an aggregate principal amount is outstanding
in excess of 50% of LTM EBITDA as set forth in the credit
agreement. Moody's expects RingCentral will generate approximately
$300 million in free cash flow over the next 12 to 18 months. The
company had approximately $125 million in remaining availability
under its $300 million share repurchase program as of June 30,
2023.
The B1 rating assigned to the proposed senior unsecured notes due
2030 reflects the assigned Ba3-PD Probability of Default rating and
an average family recovery assumption. The assigned instrument
rating is one notch below the CFR reflecting the debt's unsecured
position in the capital structure and is pari passu with the
unsecured convertible senior notes due 2025 and 2026. The proposed
notes will have guarantees from certain international subsidiaries
that the convertible notes do not benefit from but Moody's views
their limited value as not significant to warrant ranking ahead of
the convertible notes. The unrated credit agreement providing a
$200 million revolving loan facility and $400 million delayed draw
term loan facility are secured by substantially all the property of
the company and certain material domestic subsidiaries.
RingCentral, Inc., headquartered in Belmont, California is a
provider of cloud unified communications and contact center
software-as-a-service. Revenues were approximately $2.1 billion for
the LTM period ended June 30, 2023.
The principal methodology used in these ratings was Software
published in June 2022.
SA HOSPITAL: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: SA Hospital Acquisition Group, LLC
4308 Via Entrada
Newbury Park, CA 91320
Chapter 11 Petition Date: August 11, 2023
Court: United States Bankruptcy Court
Central District of California
Case No.: 23-10690
Debtor's Counsel: Michael Jay Berger, Esq.
LAW OFFICES OF MICHAEL JAY BERGER
9454 Wilshire Boulevard, 6th Floor
Beverly Hills, CA 90212
Tel: (310) 721-6223
Fax: (310) 271-9805
Email: michael.berger@bankruptcypower.com
Estimated Assets: $10 million to $50 million
Estimated Liabilities: $50 million to $100 million
The petition was signed by Jeffrey Ahlholm as co-managing member.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/WMYXA5Y/SA_Hospital_Acquisition_Group__cacbke-23-10690__0001.0.pdf?mcid=tGE4TAMA
List of Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
1. Allscripts Healthcare Vendor's Debt $684,195
24630 Network Place
Chicago, IL
60673-1246
2. AMN Healthcare Vendor's Debt $343,454
File 56157
Los Angeles, CA
90074-6157
3. Andrew Friedman Loan $250,000
124 N. La Brea Ave.
Ste V
Los Angeles, CA
90036
4. AYA Healthcare Vendor's Debt $349,312
PO Box 123519
Dallas, TX 75312
5. Aztec Leasing, Inc. Vendor $343,116
2215 Vista Rodeo Dr.
El Cajon, CA 92019
6. Cardinal Health Vendor's Debt $645,213
PO Box 70539
Chicago, IL
60673-0539
7. Comphealth Vendor's Debt $420,669
PO Box 972651
Dallas, TX
75397-2651
8. EASI Vendor $269,581
PO Box 198531
Atlanta, GA
30384-8531
9. IWC Innovations Vendor $268,304
704 S. State Road
135, Suite D348
Greenwood, IN
46143
10. Medline Vendor's Debt $1,113,379
Dept CH 1440
Palatine, IL
60055-4400
11. Medtronic USA Vendor's Debt $373,054
PO Box 848086
Dallas, TX
75284-8086
12. Missouri State Taxes State Taxes $292,105
PO Box 999
Jefferson City, MO
65108-0999
13. Modern HR Vendor $1,400,000
7590 N. Gelnoaks Blvd
Burbank, CA 91504
14. Nomad Nurses Vendor's Debt $1,670,268
PO Box 736670
Dallas, TX
75373-6670
15. Nursefinders Vendor's Debt $758,800
PO Box 910738
Dallas, tX
75391-0738
16. SA Hospital Jefferson LLC Loan $690,740
3535 South
Jefferson
Saint Louis, MO
63118
17. The Metropolitan St Judgment $263,432
Louis Sewer Dis
c/o Randall E. Gusdorf, Esq.
Gusdorf Law Firm, LLC
9666 Olive Blvd. Ste 211
Saint Louis, MO
63132
18. TVT 2.0 LLC Loan $6,500,000
8 Hunters Ln
Roslyn, NY 11576
19. Twain GL XXV, LLC Delinquent Rent $850,000
2200 Washington Ave.
Saint Louis, MO
63103
20. Western Healthcare Vendor $346,162
13155 Noel Road
Suite 200
Dallas, tX 75240
SALEM MEDIA: Posts $7.1 Million Net Loss in Second Quarter
----------------------------------------------------------
Salem Media Group, Inc. filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing a net loss
of $7.09 million on $65.77 million of total net revenue for the
three months ended June 30, 2023, compared to net income of $9.12
million on $68.68 million of total net revenue for the three months
ended June 30, 2022.
For the six months ended June 30, 2023, the Company reported a net
loss of $12.25 million on $129.26 million of total net revenue
compared to net income of $10.86 million on $131.29 million of
total neet revenue for the six months ended June 30, 2022.
As of June 30, 2023, the Company had $507.25 million in total
assets, $343.93 million in total liabilities, and $163.32 million
in total stockholders' equity.
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1050606/000119312523206423/d524749d10q.htm
About Salem Media
Headquartered in Texas, Salem -- www.salemmedia.com -- is a
domestic multimedia company specializing in Christian and
conservative content, with media properties comprising radio
broadcasting, digital media, and publishing. Its content is
intended for audiences interested in Christian and family-themed
programming and conservative news talk.
* * *
As reported by the TCR on June 27, 2023, Moody's Investors Service
downgraded Salem Media Group, Inc.'s Corporate Family Rating to
Caa1 from B3. Moody's said the downgrade of the CFR to Caa1 and
negative outlook reflect Salem's weak operating performance
pressured by subdued radio advertising demand, high financial
leverage and a deteriorating liquidity profile.
In May 2023, S&P Global Ratings lowered its issuer credit rating on
Salem Media Group Inc. to 'CCC' from 'B-'. The negative outlook
reflects the potential for a default or debt restructuring over the
next 12 months.
SAN BENITO HEALTH: Chapter 9 Case Summary & 20 Unsecured Creditors
------------------------------------------------------------------
Debtor: San Benito Health Care District
d/b/a Hazel Hawkins Memorial Hospital
911 Sunset Drive, Hollister
Hollister, CA 95023
Business Description: Hazel Hawkins Memorial Hospital is a full-
service, public agency hospital delivering
modern medicine and care to the growing San
Benito County community. HHMH offers
hundreds of health services across multiple
locations, including top-tier specialists, a
modern Emergency Department, and a state-of-
the-art Women's Center.
Chapter 9 Petition Date: May 23, 2023
Court: United States Bankruptcy Court
Northern District of California
Case No.: 23-50544
Judge: Hon. Stephen L. Johnson
Debtor's Counsel: Michael A. Sweet, Esq.
FOX ROTHSCHILD LLP
345 California Street, Suite 200
San Francisco, CA 94104-2734
Tel: (415) 364-5540
Email: msweet@foxrothschild.com
Estimated Assets: $100 million to $500 million
Estimated Liabilities: $50 million to $100 million
The petition was signed by Mary Casillas as interim chief executive
officer.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/HRYO73A/San_Benito_Health_Care_District__canbke-23-50544__0001.0.pdf?mcid=tGE4TAMA
List of Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
1. Principal Custody Solutions Pension $14,706,676
Attn: Gus Bilotti
2355 E Camelback Rd
Phoenix, AZ 85016
Tel: 515-878-0373
Email: bilotti.gus@principal.com
2. Noridian Healthcare Solutions Governmental $2,934,993
Attn: Tina Deitemeyer
P.O. Box 6782
Fargo, ND 58108-6782
Tel: 855-609-9960
Email: tina.deitemeyer@noridian.com
3. Benefit & Risk Mngmnt Services Health Insurance $1,633,142
80 Iron Point Cir, Ste 200
Folsom, CA 95630
Tel: 916-467-1281
Fax: 916-467-1281
4. Dept of The Treasury, Internal Tax $1,143,961
Revenue Service
P.O. Box 9941
Stop 5500
Ogden, UT 844
5. California Dept of Governmental $261,577
Healthcare Services
Attn: Laura Rozanski
Overpayments Unit, Ms 4720
P.O. Box 997421
Sacramento, CA 95899-9916
Tel: 279-600-1830
Email: laura.rozanski@dhcs.ca.gov
6. Biomerieux, Inc Vendor $176,119
P.O. Box 500308
St Louis, MO 63150-0308
Tel: 800-682-2666
Fax: 800-654-4682
7. Pinehurst Hospitalist Medical Group, Vendor $143,366
Inc
Attn: COO
4535 Dressler Rd NW
Canton, OH 44718
Email: cherrye@usacs.com
8. Central California Vendor $122,666
Anesthesiology Solutions
2276 Ashcroft Ave
Clovis, CA 9361
Tel: 559-681-3980
9. Howmedica Osteonics Corp Vendor $97,989
dba Stryker Orthopaedics
P.O. Box 93213
Chicago, IL 60673
Fax: 650-345-0481
10. Siemens Healthcare Diagnostics Vendor $92,104
P.O. Box 121102
Dallas, TX 75312-1102
Tel: 800-352-8767
11. Mckesson Medical-Surgical Vendor $89,813
P.O. Box 51020
Los Angeles, CA 90051-5320
Tel: 833-343-2700
Email: Government.CustomerService@mckesson.com
12. Quality Comp, Inc Vendor $82,316
c/o Monument, LLC
7 Great Valley Pkwy, Ste 290
Malvern, PA 19355
Tel: 610-647-4466
Fax: 610-647-0662
13. Focus Administrative Services, Inc. Vendor $73,806
Attn: John L Ceglia
101 McCray St, Ste 108
Hollister, CA 95023
Email: jceglia@hazelhawkins.com
14. Your Medical Group Vendor $69,524
591 Mcray St, Ste 211
Hollister, CA 95023
Tel: 831-636-3116
Fax: 831-636-1204
15. Savista Vendor $61,333
200 N Point Ctr E, Ste 200
Alpharetta, GA 30022
Tel: 678-624-2000
16. Pediatrix Medical Group of CA Vendor $48,555
P.O. Box 281034
Atlanta, GA 30384-1034
Tel: 800-243-3839
Fax: 954-839-2564
Email: Subsidy_Contracts@Mednax.com
17. Russell Dedini, Md Inc Vendor $46,553
5725 Diamond Heights Blvd
San Francisco, CA 94131
Tel: 831-636-7950
Fax: 831-636-7952
18. Hologic Inc Vendor $46,352
24506 Network Pl
Chicago, IL 60673-1245
Tel: 781-999-7358
Fax: 954-827-2408
19. Beta Healthcare Group Vendor $43,930
1443 Danville Blvd
Alamo, CA 94507-1911
Tel: 925-838-6070
Email: sherry.untiedt@betahg.com
20. Park Place International, LLC Vendor $43,628
dba Cloudwave
8401 Chagrin Rd
Chagrin Fall, OH 44023
Tel: 877-991-1991
Fax: 800-829-5457
SAVESOLAR CORP: CohnReznick Capital Advises on Asset Sale
---------------------------------------------------------
Pursuant to an order on July 26, 2023, by the Hon. Elizabeth L.
Gunn, a newly formed joint venture, Edson Redball Devco LLC,
acquired the assets of SaveSolar Corporation and affiliates, free
and clear of all liens and encumbrances. In April, CohnReznick
Capital was appointed to act as the investment bank of the
Debtors.
Prior to the chapter 11 filing on February 2, 2023, SaveSolar
Corporation focused on developing and operating community solar
projects for low-to-moderate income housing areas and commercial
rooftops, ensuring residents receive the benefits of lowered
electricity costs. Edson Redball prevailed at an auction held in DC
on July 18.
Whiteford, Taylor & Preston LLP was Debtors' Counsel with a team
that included Bradford F. Englander, Stephen E. Luttrell, and
Alexandra G. DeSimone.
CohnReznick, LLP was the Debtors' Financial Advisor with a team
that included Kevin P. Clancy, Taylor Sherman, and Jean Almonte.
The SaveSolar team included Karl Unterlechner, Thomas "TJ" Cox, Sam
Goldstein, Bronson Bast, Carlos Huepa Bolivar, and Elicia Yoffee.
Edson Redball's team included Ben Edson of Edson Solar, plus
Nick Giannotti, Zach Axelrod, and Brian Gottlieb of Redball Energy
Co.
Edson Redball was represented by Counsel at Croke Fairchild Duarte
& Beres, Jessica Fairchild, Robert Isham, and Kyle Shires, and from
Brown Rudnick, Tristan G. Axelrod, Steven B. Levine, and Matthew A.
Sawyer.
Counsel representing the senior lender was from Nelson Mullins
Riley & Scarborough LLP with Peter J. Haley and Dylan Trache.
CohnReznick Capital thanks all the professionals that made this
transaction possible.
Contacts on Deal:
CohnReznick Capital
Jeffrey R. Manning, Sr.
Managing Director
(917) 549-0312
Iany Ianachkova
Director
(917) 752-3624
Ayanna Nibbs
Director of Marketing
(917) 594-0428
Joao Pedro Santos
Senior Associate
Philip Kittell
Analyst
Nicholas Crescione
Research Analyst
CohnReznick Capital Markets Securities LLC, a Maryland limited
liability company, is a member of FINRA and SIPC and is registered
as a broker dealer with the SEC - Qualified Institutional Investors
Only. Confidential & Not an Offer of Securities. For more
information, please visit http://www.cohnreznickcapital.com.
About SaveSolar Corporation
SaveSolar Corporation, Inc. and SaveSolar Alpha Holdco, LLC filed
their voluntary petitions for relief under Chapter 11, Subchapter V
of the Bankruptcy Code (Bankr. D.D.C. Lead Case No. 23-00045) on
Feb. 2, 2023. In the petitions signed by SaveSolar President Karl
Unterlechner, both Debtors disclosed up to $10 million in assets
and up to $50 million in liabilities.
Judge Elizabeth L. Gunn oversees the cases.
The Debtors tapped Bradford F. Englander, Esq., at Whiteford Taylor
& Preston, LLP as legal counsel; CohnReznick, LLP as financial
advisor; and CohnReznick Capital Markets Securities, LLC as
investment banker.
SHERLOCK STORAGE: Files Emergency Bid to Use Cash Collateral
------------------------------------------------------------
Sherlock Storage, LLC asks the U.S. Bankruptcy Court for the
District of Montana for authority to use cash collateral on an
emergency basis.
The source of funds being requested to be released are as follows:
monthly rents, issues, royalties, and profits in the approximate
amount of $166,200.
The Debtor has an immediate need for the release of funds of
approximately $7,425 to pay the expenses that are due within the
next 14 days.
The Debtor and creditor Holly M. Mohorcich, Trustee of the Mark
Mohorcich Irrevocable Trust filed a Stipulation that was approved
by the Court allowing use of cash collateral. In obvious
retaliation for the lawsuit Mr. Flynn filed against the Trust
personally, the Trust filed a Notice that it would no longer give
permission after August 4, 2023. The Trust does not have a UCC-1
Financing Statement filed with the State of Montana securing a lien
on the rents and profits. The Debtor disputes that creditor has a
lien on rents and profits.
The Debtor has a need for the additional release of funds in the
approximate amount of $153,560 through January 31, 2024, in which
the Trust may have a cash collateral position.
The secured creditor is over secured and there should be no need
for adequate protection. However, if the Court deems it necessary,
Debtor will grant secured creditor a lien on the rents, issues,
royalties, and profits for the amount of the cash collateral to
cover any diminution of value.
A copy of the motion is available at https://urlcurt.com/u?l=I37GkP
from PacerMonitor.com.
A copy of the budget is available at https://urlcurt.com/u?l=3XS3Ad
from PacerMonitor.com.
The Debtor projects total expenses, on a monthly basis, as
follows:
$13,385 for August 2023;
$17,135 for September 2023;
$17,135 for October 2023;
$14,635 for November 2023; and
$14,635 for December 2023.
About Sherlock Storage
Sherlock Storage, LLC, sought protection for relief under Chapter
11 of the Bankruptcy Code (Bankr. D. Mont. Case No. 22-90150) on
Oct. 4, 2022, with $1 million to $10 million in both assets and
liabilities.
Judge Benjamin P. Hursh oversees the case.
Gary S. Deschenes, Esq., at Deschenes & Associates Law Offices and
Cappis Consulting & Tax, LLC, serve as the Debtor's legal counsel
and accountant, respectively.
SIKES CONCRETE: Voluntary Chapter 11 Case Summary
-------------------------------------------------
Debtor: Sikes Concrete, Inc
11442 Hwy 77
Panama City, FL 32409
Business Description: Sikes is family owned and operated
commercial concrete contractor. In
addition, the Debtor also specializes in
sitework and underground utilities.
Chapter 11 Petition Date: August 11, 2023
Court: United States Bankruptcy Court
Northern District of Florida
Case No.: 23-50122
Debtor's Counsel: Michael A. Wynn, Esq.
BURG WYNN LAW FIRM
4436 Clinton Street
Marianna, FL 32447-0147
Tel: (850) 526-3520
Email: michael@wynnlaw-fl.com
Estimated Assets: $0 to $50,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Hubert Lamar Sikes, Jr. as owner and
president.
The Debtor failed to include in the petition a list of its 20
largest unsecured creditors.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/S3WCCNA/Sikes_Concrete_Inc__flnbke-23-50122__0001.0.pdf?mcid=tGE4TAMA
SINCLAIR TELEVISION: $740MM Bank Debt Trades at 21% Discount
------------------------------------------------------------
Participations in a syndicated loan under which Sinclair Television
Group Inc is a borrower were trading in the secondary market around
78.6 cents-on-the-dollar during the week ended Friday, August 11,
2023, according to Bloomberg's Evaluated Pricing service data.
The $740 million facility is a Term loan that is scheduled to
mature on April 1, 2028. About $725.5 million of the loan is
withdrawn and outstanding.
Sinclair Television Group, Inc. provides media broadcasting
services. The Company offers television broadcasting and
programming services.
SINCLAIR TELEVISION: $750MM Bank Debt Trades at 25% Discount
------------------------------------------------------------
Participations in a syndicated loan under which Sinclair Television
Group Inc is a borrower were trading in the secondary market around
75.1 cents-on-the-dollar during the week ended Friday, August 11,
2023, according to Bloomberg's Evaluated Pricing service data.
The $750 million facility is a Term loan that is scheduled to
mature on April 21, 2029. About $742.1 million of the loan is
withdrawn and outstanding.
Sinclair Television Group, Inc. provides media broadcasting
services. The Company offers television broadcasting and
programming services.
SINTX TECHNOLOGIES: Incurs $2.5 Million Net Loss in Second Quarter
------------------------------------------------------------------
SINTX Technologies, Inc. filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing a net loss
of $2.46 million on $508,000 of total revenue for the three months
ended June 30, 2023, compared to a net loss of $2.51 million on
$240,000 of total revenue for the three months ended June 30,
2022.
For the six months ended June 30, 2023, the Company reported a net
loss of $2.75 million on $1.05 million of total revenue compared to
a net loss of $5.36 million on $370,000 of total revenue for the
same period in 2022.
As of June 30, 2023, the Company had $19.10 million in total
assets, $5.28 million in total liabilities, and $13.81 million in
total stockholders' equity.
SINTX said, "If the Company seeks to obtain additional equity
and/or debt financing, such funding is not assured and may not be
available to the Company on favorable or acceptable terms and may
involve significant restrictive covenants. Any additional equity
financing is also not assured and, if available to the Company,
will most likely be dilutive to its current stockholders. If the
Company is not able to obtain additional debt or equity financing
on a timely basis, the impact on the Company will be material and
adverse.
"These uncertainties raise substantial doubt about our ability to
continue as a going concern."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/0001269026/000149315223027190/form10-q.htm
About SINTX Technologies
Headquartered in Salt Lake City, Utah, SINTX Technologies, Inc. --
https://ir.sintx.com -- is an advanced ceramics company that
develops and commercializes materials, components, and technologies
for medical and technical applications. SINTX is engaged in the
research, development, and manufacturing of silicon nitride, and
its products have been implanted in humans since 2008.
SINTX reported net loss of $12.04 million in 2022, a net loss of
$9.31 million in 2021, a net loss of $7.03 million in 2020, and a
net loss of $4.79 million in 2019. As of Dec. 31, 2022, the Company
had $15.77 million in total assets, $10.07 million in total
liabilities, and $5.70 million in total stockholders' equity.
TALLGRASS ENERGY: Fitch Affirms 'BB-' LongTerm IDR, Outlook Stable
------------------------------------------------------------------
Fitch Ratings has affirmed Tallgrass Energy Partners, L.P.'s
(Tallgrass) Long-Term Issued Default Rating (IDR) at 'BB-'. Fitch
has also affirmed the company's senior secured debt at 'BB+'/'RR1'
and senior unsecured debt at 'BB-'/'RR4'. The Rating Outlook is
Stable.
The ratings reflect Fitch's expectations that over 80% of
Tallgrass's run rate EBITDA will be derived from long-term volume
commitment type contracts, providing cash flow visibility and
stability; in-demand assets; intact and stable credit quality of
its top customers, which are expected to account for the majority
of cash flows; and the parent subsidiary relationship between
Tallgrass (subsidiary) and Tallgrass Energy, L.P. (parent with a
large term loan referred to as HoldCo).
The debt funded growth capital spend and contract cliff at Rockies
Express Pipeline, LLC (ROCKIE; 'BB+'/Stable) in mid-2024 are
expected to increase leverage in the medium-term, which is a
concern; until incremental cash flows from growth projects, when
placed in-service, start supporting debt and leverage reduction.
KEY RATING DRIVERS
Contracts Provide Cashflow Stability: Tallgrass is expected to
generate nearly 95% of its EBITDA from fee-based contracts, and
over 80% from long-term fee-based volume commitment type contracts.
Tallgrass's largest asset, ROCKIE, is expected to generate 95% of
its cash flows from take-or-pay contracts with a weighted average
(by volume) remaining life of nearly eight years. It's second
largest asset, Liberty Express Pipeline (LEP), is expected to
generate over 80% of cash flows from minimum volume commitment
contracts (MVC), and has a weighted average remaining life of
roughly four years. The two assets are expected to account for
roughly 65%-70% of the EBITDA. Tallgrass's other assets are also
fairly contracted, featuring long-term fee-based volume commitment
type contracts.
ROCKIE and LEP are highly utilized, and Tallgrass's other assets
are also fairly utilized, demonstrating demand for its asset base.
Long-term fee-based volume assurance type contracts along with high
asset utilization rate reduces re-contracting, volumetric, and
commodity price risks, providing a greater stability and visibility
of future cash flows.
Counterparty Credit Quality Intact: The majority of Tallgrass's
EBITDA is driven by its credit worthy top customers. Most of the
company's top customers are rated investment grade. Customer credit
profile at both ROCKIE and LEP largely remained intact in last 12
months despite softening of commodity prices. One of ROCKIE's top
customers was upgraded one-notch to an investment grade rating by
Fitch in the last 12 months and another was placed on Positive
Outlook. Fitch expects, Tallgrass's top customers will drive most
of the company's cash flows, and their credit quality will largely
remain intact in the near-term.
Medium-Term Leverage Increasing: ROCKIE has a contract cliff in
mid-2024, when its most remunerative contract along with some other
small contracts expires. Fitch expects most of the expiring
capacity will be re-contracted at rates consistent with recent
contract wins in the last 12 months. Therefore, the new contract
rates are expected to be at a significant discount from the current
rates, which will lead to a decline in revenue at ROCKIE,
thereafter reducing distributions to Tallgrass, and impacting
leverage. In addition, growth capital spend is also expected to
weigh on leverage. These are salient factors given the senior
unsecured debt maturities at Tallgrass and ROCKIE in 2025.
Fitch measures leverage at Tallgrass with HoldCo's debt imputed
which is expected to trend approximately in the mid-to-low 7.0x
range in 2024-2026. Fitch anticipates the management will prudently
address the debt maturities at Tallgrass and ROCKIE.
Growth Capital Spend: Tallgrass is in pursuit of some growth
projects in the near-to-medium term, which is expected to increase
capital expenditures. In January 2023, it acquired Ruby Pipeline,
LLC (Ruby), primarily using a revolver draw, which, Fitch deems
leverage neutral, however, it still leads to a higher debt balance.
In May 2022, it announced plans to convert the Trailblazer natural
gas pipeline into a CO2 transportation pipeline. The project
continues to pursue achievement of incremental milestones with a
target in-service date of 1H25. The project if successful is
expected to add incremental revenues at both Tallgrass and ROCKIE.
Fitch expects, Tallgrass will strategically fund growth projects,
and could use a combination of member contributions, free cash
flows, and debt, which will temporarily increase debt levels, until
incremental EBITDA from growth projects benefits leverage.
Parent Subsidiary Linkage: There is a parent subsidiary
relationship between HoldCo and Tallgrass. Fitch determines
HoldCo's standalone credit profile (SCP) to be based on
consolidated metrics and considers Tallgrass to have a stronger SCP
than HoldCo. Legal ring-fencing is considered to be open given lack
of regulatory ring-fencing and that only the revolving credit
facility has a limitation on dividends.
Effective control is deemed open since HoldCo controls the general
partner and the sole limited partner, effectively controlling major
transactions. Funding and cash management policy is deemed porous
due to Tallgrass's ability to obtain both internal and external
funding. Hence, access and control are deemed to be porous.
DERIVATION SUMMARY
There exists a parent subsidiary linkage (PSL) between HoldCo
(parent) and Tallgrass (subsidiary). Given the PSL outcome, The
Williams Companies, Inc. (WMB; BBB/Stable) is a close peer to
Tallgrass. Both WMB and Tallgrass have two FERC-regulated
long-distance pipelines at the core of their credit, along with a
gathering and processing business. WMB and Tallgrass both feature
highly contracted long-term revenue profile with credit worthy
customers. In addition, both have stronger subsidiaries, rated
higher than the parent.
WMB has much larger relative operating scale, with EBITDA in most
recent fiscal year at approximately $6.4 billion vs. Tallgrass's at
approximately $770 million. This is somewhat offset by WMB having a
much larger gathering and processing business, which is considered
riskier than FERC-regulated pipeline business. Fitch forecasts
WMB's 2023 leverage at approximately 3.8x, which is much lower
compared to the expectations for Tallgrass at approximately 6.2x in
2023, increasing to approximately low-to-mid 7.0x in the
medium-term. Tallgrass's significantly smaller scale and higher
leverage expectations are the primary factors for the difference in
IDRs between the two companies.
NuStar Energy (NuStar; BB-/Stable) which has FERC-regulated refined
products pipeline is another peer comparable to Tallgrass. Both the
companies have FERC-regulated pipelines, have the same PSL
relationship, and are comparable in size with EBITDA in the $700
million range in the latest fiscal. Both have a sizeable portion of
cash flows generated under long-term volume commitment type
contracts, though Tallgrass has a greater portion under such
contracts compared with NuStar; however, NuStar's exposure to the
Permian basin provides volume stability. Leverage at NuStar is
expected to be lower at approximately 5.5x in the medium-term
compared with Tallgrass. The lower expected leverage at NuStar is
offset by higher contract coverage at Tallgrass, leading to similar
IDRs.
KEY ASSUMPTIONS
-- Fitch's base case of Natural Gas at Henry Hub of $3/mcf,
$3.5/mcf, $3/mcf, $2.75/mcf in 2023, 2024, 2025, and 2026 and
mid-cycle, respectively;
-- Fitch's base case West Texas Intermediate (WTI) oil price of
$75, $70, $65, $60, and $57 in 2023, 2024, 2025, 2026, and
mid-cycle, respectively;
-- Oil and Gas activity levels in the regions where Tallgrass
operates consistent with Fitch's base case for oil and gas prices;
-- Base interest rate for the credit facility reflects Fitch's
Global Economic Outlook, e.g., 5.75%, 4.25%, and 3.25% for 2023,
2024, and 2025 respectively;
-- A probabilistic estimate of successful growth projects;
-- ROCKIE's EBITDA and distributions to Tallgrass consistent with
Fitch's expectations for ROCKIE, which among other things reflects
the re-contracting risks for 2024 contract cliff;
-- Liberty Express Pipeline (Pony Express) transport volumes
consistent with the prevailing volumes in recent months;
-- Distributions upstream consistent with the amounts required to
service the term loan at HoldCo.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Proportionate consolidated EBITDA leverage (measured at the
HoldCo level) that is expected to be below 7.0x for a sustained
period;
-- A decrease in business risk, such as might occur with ROCKIE
and/or Pony Express contracting a significant part of their
capacity in a long-term revenue-assured relationship with an
investment grade shipper.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Proportionate consolidated EBITDA leverage (measured at the
HoldCo level) that is expected to be above 8.0x for a sustained
period;
-- A large customer with a long-term take or pay (ROCKIE) contract
or MVC (Liberty Express) contract has a financial condition that is
consistent with a potential bankruptcy filing, and the current
market for Tallgrass's transportation service indicates the
potential for a contract rejection;
-- Inability to timely re-finance the upcoming debt maturities and
address the contract cliff at ROCKIE.
LIQUIDITY AND DEBT STRUCTURE
Adequate Liquidity: Tallgrass had a total liquidity of
approximately $1.13 billion as of March 31, 2023. Tallgrass had $36
million of cash on the balance sheet, and had approximately $1.1
billion available under its $1.5 billion first lien senior secured
revolving credit facility (net of $16 million in outstanding
letters of credit). The revolver matures on the earlier of Nov. 26,
2026, or July 1, 2025, if any of the $600 million 7.5% senior
unsecured notes due Oct. 1, 2025 remain outstanding on such date.
The covenants on the revolver requires Tallgrass to maintain a
maximum total leverage of 5.5x, senior secured leverage of 3.5x,
and a minimum interest coverage of 2.5x, as defined under the
credit agreement. As of March 31, 2023, Tallgrass was compliant
with the covenants and had a leverage ratio of 3.9x, senior secured
leverage of 0.43x, and interest coverage of 4.16x.
ISSUER PROFILE
Tallgrass owns and operates a variety of midstream assets primarily
long-distance interstate pipelines located in the United States.
SUMMARY OF FINANCIAL ADJUSTMENTS
Fitch measures leverage at Tallgrass with HoldCo's debt (Term Loan
at Prairie ECI Acquiror LP) imputed due to the PSL relationship.
ESG CONSIDERATIONS
Tallgrass Energy Partners, LP has an ESG Relevance Scores of '4'
for Group Structure due to the high number of entities in the
family. This has a negative impact on the credit profile and is
relevant to the ratings in conjunction with other factors.
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
TAP ROCK: Moody's Withdraws 'B2' CFR Following Debt Repayment
-------------------------------------------------------------
Moody's Investors Service withdrew all of Tap Rock Resources, LLC's
ratings, including its B2 Corporate Family Rating and B3 senior
unsecured notes rating. The outlook was changed to rating withdrawn
from stable. These withdrawals follow the repayment of its
outstanding debt in conjunction with the closing of the acquisition
of certain Tap Rock assets by Civitas Resources, Inc. (Civitas, Ba3
positive).
Withdrawals:
Issuer: Tap Rock Resources, LLC
Corporate Family Rating, Withdrawn, previously rated B2
Probability of Default Rating, Withdrawn, previously rated B2-PD
Senior Unsecured Regular Bond/Debenture, Withdrawn, previously
rated B3
Outlook Actions:
Issuer: Tap Rock Resources, LLC
Outlook, Changed To Rating Withdrawn From Stable
RATINGS RATIONALE
Tap Rock has fully repaid its outstanding senior secured revolver
(unrated) and senior unsecured notes using proceeds from the sale
of certain assets to Civitas. All of Tap Rock's ratings have been
withdrawn since its rated debt is no longer outstanding.
Tap Rock is a privately held, independent oil and natural gas
company headquartered in Golden, Colorado, engaged in the
acquisition, exploration and development of oil and natural gas
assets in the Northern Delaware Basin, with operations principally
focused in Lea and Eddy Counties, New Mexico. The company was
formed in 2016 with commitments from the private equity firm
Natural Gas Partners.
TEAM HEALTH: $1.59BB Bank Debt Trades at 28% Discount
-----------------------------------------------------
Participations in a syndicated loan under which Team Health
Holdings Inc is a borrower were trading in the secondary market
around 72.2 cents-on-the-dollar during the week ended Friday,
August 11, 2023, according to Bloomberg's Evaluated Pricing service
data.
The $1.59 billion facility is a Term loan that is scheduled to
mature on February 2, 2027. The amount is fully drawn and
outstanding.
Team Health Holdings, Inc. is a provider of physician staffing and
administrative services to hospitals and other healthcare providers
in the U.S.
TECHNICAL COMMUNICATIONS: Posts $466K Net Loss in Third Quarter
---------------------------------------------------------------
Technical Communications Corporation filed with the Securities and
Exchange Commission its Quarterly Report on Form 10-Q disclosing a
net loss of $465,992 on $34,972 of net revenue for the three months
ended June 24, 2023, compared to a net loss of $842,351 on $146,089
of net revenue for the three months ended June 25, 2022.
For the nine months ended June 24, 2023, the Company reported a net
loss of $1.94 million on $184,293 of net revenue compared to a net
loss of $1.98 million on $1.13 million of net revenue for the nine
months ended June 25, 2022.
As of June 24, 2023, the Company had $1.67 million in total assets,
$5.51 million in total liabilities, and a total stockholders'
deficit of $3.84 million.
For the nine months ended June 24, 2023, the Company generated a
net loss and for the fiscal years ended Sept. 24, 2022 and Sept.
25, 2021, the Company generated net losses of approximately
$2,331,000 and $1,088,000, respectively. The Company has
experienced declining revenues during the first nine months ended
June 24, 2023 and has an accumulated deficit of approximately
$8,428,725 at June 24, 2023. According to the Company, these
factors continue to raise substantial doubt about its ability to
continue as a going concern.
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/96699/000117184323005067/tcco20230622_10q.htm
About Technical Communications
Concord, Massachusetts-based Technical Communications Corporation
-- http://www.tccsecure.com-- specializes in secure communications
systems and customized solutions to protect highly sensitive voice,
data and video transmitted over a wide range of networks, serving
government entities, military agencies, and corporate enterprises.
Westborough, Massachusetts-based Stowe & Degon LLC, Technical
Communications Corporation's auditor since 2019, issued a "going
concern" qualification in its report dated Dec. 22, 2022, citing
that the Company has an accumulated deficit, has suffered
significant net losses and negative cash flows from operations and
has limited working capital that raise substantial doubt about its
ability to continue as a going concern.
TECHNICOLOR CREATIVE: $42.1MM Bank Debt Trades at 16% Discount
--------------------------------------------------------------
Participations in a syndicated loan under which Technicolor
Creative Services USA Inc is a borrower were trading in the
secondary market around 84 cents-on-the-dollar during the week
ended Friday, August 11, 2023, according to Bloomberg's Evaluated
Pricing service data.
The $42.1 million facility is a payment-in-kind Term loan that is
scheduled to mature on September 28, 2026. The amount is fully
drawn and outstanding.
Technicolor Creative Services USA, Inc. offers motion picture
services. The Company provides VFX, animation, sound, mastering,
versioning, digital distribution, device interconnection,
technology licensing, patent licensing, and brand licensing
services. Technicolor Creative Services USA serves customers
worldwide.
TRANSDIGM INC: Moody's Rates New Senior Secured Notes 'Ba3'
-----------------------------------------------------------
Moody's Investors Service assigned a Ba3 rating to TransDigm Inc.'s
new senior secured notes. All other ratings, including the B1
Corporate Family Rating, B1-PD Probability of Default Rating, Ba3
senior secured ratings, and B3 senior subordinated ratings are
unchanged. Proceeds from the new notes will be used to refinance
existing senior subordinated notes due 2026. This is a leverage
neutral transaction. Ratings on the existing notes due 2026 will be
withdrawn upon close. The outlook remains stable.
Assignments:
Issuer: TransDigm Inc.
Backed Senior Secured Regular Bond/Debenture, Assigned Ba3
RATINGS RATIONALE
The B1 CFR balances TransDigm's aggressive financial policy defined
by its persistently high funded debt and financial leverage and
recurring substantial distributions to shareholders, mitigated in
part by its strong business profile. TransDigm garners very strong
margins from its sole source provider position across a majority of
its products as well as its proprietary designs reflected in its
significant patent portfolio.
TransDigm's debt-to-EBITDA of around 7.1x as of March 31, 2023 is
high and is an outlier for the B1 CFR rating. That said, Moody's
recognizes the uniqueness of TransDigm's business model that has
enabled the company to maintain its industry-leading margins and
healthy cash generation. Moody's believes that demand in commercial
aerospace markets, after having troughed several quarters ago, will
continue to experience a sustained recovery. This will support
continued earnings growth and healthy levels of cash generation.
The stable outlook reflects Moody's expectations of positive
earnings growth, and a gradual strengthening of credit metrics as
commercial aerospace markets continue to recover.
The SGL-1 speculative grade liquidity rating denotes Moody's
expectations of very good liquidity over the next 12 months. As of
March 31, 2023, cash totaled $3.4 billion. Moody's expects
TransDigm to generate around $0.9 billion in free cash flow during
fiscal 2023 (ended September) with FCF-to-debt in the mid
single-digits. External liquidity is provided by an undrawn $810
million revolving credit facility that expires in 2026.
The Ba3 ratings for TransDigm's senior secured term loan and senior
secured bonds are one notch above the CFR. This reflects their
seniority and first lien security interest in substantially all
assets of the company on an aggregate basis. The B3 rating for the
company's senior subordinated notes is two notches below the CFR.
This reflects the subordination of this debt compared to the
aforementioned first lien debt. Both the bank credit facilities and
the subordinated notes are guaranteed by all of TransDigm's
existing and future domestic subsidiaries, as well as the company's
holding company parent TDG.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
Factors that could lead to a ratings downgrade include weakening
liquidity, free cash flow-to-debt sustained in the low
single-digits or debt-funded dividend distributions, particularly
prior to the business having substantially recovered.
Factors that could lead to an upgrade of the ratings include
debt-to-EBITDA sustained below 5.5x, maintenance of the company's
industry leading margins and a continuation of strong liquidity.
The principal methodology used in this rating was Aerospace and
Defense published in October 2021.
TransDigm Inc., headquartered in Cleveland, Ohio, is a manufacturer
of engineered aerospace components for commercial airlines,
aircraft maintenance facilities, original equipment manufacturers
and various agencies of the US Government. TransDigm Inc. is the
wholly-owned subsidiary of TransDigm Group Incorporated (TDG).
Revenues for the last twelve-month period ending March 31, 2023,
were $5.9 billion.
TRIPADVISOR INC: Moody's Affirms 'Ba3' CFR, Outlook Stable
----------------------------------------------------------
Moody's Investors Service affirmed Tripadvisor, Inc.'s (Trip,
Tripadvisor or the Company) Ba3 Corporate Family Rating and Ba3-PD
Probability of Default Rating as well as the B1 rating on the
guaranteed senior unsecured notes. The Speculative Grade Liquidity
(SGL) rating was upgraded to SGL-1 from SGL-2. The outlook is
stable.
The affirmation of the Ba3 CFR reflects a strong recovery from the
depths of the pandemic, with Q2 LTM revenue in excess of 2019 and
total revenue to grow in the low to mid-teens percent over the next
12-18 months despite a weak macroeconomic environment and high
competitive intensity. Top-line strength is being primarily driven
by Viator, the company's industry leading, very high-growth
experiences offering which will approach 40% of the consolidated
revenue mix by the end of 2024, up from less than just 10% in 2020.
TheFork, a high- growth restaurant reservation offering, is also
supportive despite its small scale. Tripadvisor Core (TA Core)
generates the majority of total revenue and will contribute some
incremental revenue with mid-single digit percent growth, despite a
declining hotel meta business which is under competitive pressure
and still recovering from the pandemic with Europe and Asia lagging
the U.S. Consolidated EBITDA and margins are under some pressure
with steady investments in sales and marketing to drive scale in
Viator and TheFork which remain loss businesses, and due to
compression in profitability in the TA Core segment. As a result,
Moody's expects leverage to remain elevated, in the low 4x to high
3x range. Regardless, the company has significant financial
flexibility with very good liquidity supported by high and rising
cash balances that could approach $1.4 billion by the end of 2024
(significantly exceeding debt). Free cash flows also remain strong,
which Moody's projects should average above $200 million.
Affirmations:
Issuer: Tripadvisor, Inc.
Corporate Family Rating, Affirmed Ba3
Probability of Default Rating, Affirmed Ba3-PD
Senior Unsecured Regular Bond/Debenture, Affirmed B1
Upgrades:
Issuer: Tripadvisor, Inc.
Speculative Grade Liquidity Rating, Upgraded to SGL-1 from SGL-2
Outlook Actions:
Issuer: Tripadvisor, Inc.
Outlook, Remains Stable
RATINGS RATIONALE
Tripadvisor's credit profile reflects the strength in its global
brand, small but established market position, and revenue diversity
with a good mix across geographies and balance across three travel
segments including lodging, dining, and experiences. The company is
a trusted source of over 1 billion reviews, highly valued by more
than 130 million members, attracting hundreds of millions of unique
visitors annually. The shift to booking travel online is also a
demand tailwind, creating opportunities to grow scale and market
share, especially in experiences and dining where the company is
well or better positioned than much larger competitors. Also
supporting the company is its track record of disciplined financial
policy that balances the interest of shareholders and creditors. In
particular, except for the pandemic years, the company has a long
history of maintaining cash balances in excess of debt obligations
or operating the business with no debt. Moody's expects the
company to maintain a very good liquidity profile, supported by
over $1.1 billion in cash.
The credit profile is constrained by the pressure on its largest
business, hotel meta inside TA Core. Revenues still haven't fully
recovered from the pandemic, with Europe and Asia still lagging the
full recovery in the U.S. Additionally, Moody's believes conversion
rates remain very low, customer concentration is high, and
competition is rising. Moody's expects these pressures to slow
revenue growth, which could fall on a sustained basis. As result,
and due to the unfavorable mix shift to the high-growth, but
sub-scale loss segments Viator and TheFork, the company has a
modest and declining EBITDA margin profile that will approach low
teens percent. Significant costs required to acquire and retain
customers (near mid 50% of revenue) as well as constant investment
to maintain and advance the company's technology (about mid-teens
percent of revenue) are a drag on better profitability. Its
relatively small scale (near $1.7 billion in Q2 LTM revenue) is
also a disadvantage to better operating leverage and in the highly
and increasingly competitive industry with hotel chains and other
suppliers of travel services working to establish their own direct
to consumer connections, and very large established tech players
edging into the market with competing offerings. Governance risk is
also a factor with highly concentrated ownership.
Liquidity is very good (SGL-1) supported primarily by significant
cash balances in excess of debt, an undrawn $500 million revolving
credit facility, very significant covenant headroom, and a largely
unsecured capital structure.
Moody's rates the senior unsecured notes (due 2025) B1, one notch
below CFR given its subordinate position to the senior secured
revolving credit facility (unrated). The instrument rating reflects
the probability of default of the company, as reflected in the
Ba3-PD Probability of Default Rating, an average expected family
recovery rate of 50% at default given the mixed capital structure,
and the instruments' ranking in the capital structure. The
revolving credit facility, convertible notes, and other claims are
unrated.
The stable outlook reflects Moody's expectation that Trip will
produce revenue, EBITDA and free cash flow that will range between
$1.7 to $1.9 billion, $225 to $245 million, and above $200 million,
respectively over the next 12-18 months. Moody's expects EBITDA
margins (including the cost of stock based compensation) to fall to
the low-teens percent range. Leverage should range in the low 4x to
high 3x range on debt that will remain steady near $930 million,
producing FCF to debt that should be in the low 20% range. Moody's
outlook assumes consolidated revenue growth of 15%-10%, with
Tripadvisor core revenue growth much slower (in the low single
digit percent range) than Viator and TheFork. Key assumptions
include continued losses in Viator and TheFork, on a combined
basis.
Note: all figures are Moody's adjusted over the next 12-18 months
unless otherwise noted.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Moody's could consider an upgrade if:
-- Leverage (Moody's adjusted gross debt to EBITDA) is sustained
below 3.0x, and
-- Consolidated revenue and EBITDA growth is strong, sustained at
least in line or above industry peers, and
An upgrade could also be considered if scale or diversity of the
company increased, or management's financial policies turn more
conservative.
Moody's could consider a downgrade if:
-- Gross leverage (Moody's adjusted gross debt to EBITDA) is
sustained above 4.25x, or net leverage (Moody's adjusted) is
sustained above 3.0x, or
-- Revenue growth slows, below industry peers or turns negative,
or
-- Sustained decline in profitability (Moody's adjusted EBITDA),
or
-- Robust liquidity profile is not maintained, or
-- Free cash flow to debt is sustained below 10%
Tripadvisor, Inc., founded in 2000 and based in Needham, MA, is a
leading online travel company that provides a global travel
platform connecting a large audience of prospective travelers with
travel partners through rich content, price comparison tools, and
online reservation as well as related services for destinations,
accommodations, travel activities & experiences, and restaurants.
At the end of 2022, the company reported it had over 1 billion
reviews and opinions on nearly 8 million experiences,
accommodations, restaurants, airlines, and cruises. Revenue for the
last twelve months ended June 30, 2023 was approximately $1.7
billion.
Tripadvisor is publicly traded but closely held by Liberty
Tripadvisor Holdings, Inc. ("LTRIP") which controls roughly 57% of
the voting share, which is in turn tightly controlled by one
shareholder (Greg Maffei) which owns approximately 43% of LTRIP.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
UNIVERSAL DOOR: Amends Plan to Include Priority Tax Claims Pay
--------------------------------------------------------------
Universal Door and Window Manufacture Inc. submitted a First
Amended Disclosure Statement describing Plan of Reorganization
dated August 8, 2023.
The Plan provides that only holders of Allowed Claims, that is,
holders of Claims not in dispute, not contingent, liquidated in
amount and not subject to objection or estimation are entitled to
receive distribution thereunder.
As a result of the filing by Debtor of its Chapter 11 petition,
Debtor received the benefits of Section 362(a) of the Bankruptcy
Code, which stays all collection actions and judicial proceedings
against Debtor, providing Debtor the opportunity to file the Plan
and Disclosure Statement, without the pressures that drove Debtor
into Chapter 11, as envisioned by the Bankruptcy Code.
Like in the prior iteration of the Plan, Class 3 General Unsecured
Claims shall be paid in full satisfaction of their claims their
pro-rata portion of 60 equal consecutive monthly installments of
$704.53 commencing on the Effective Date and continuing on the 30th
day of the subsequent 59 months.
Class 2 consists of the Secured Claim of USDT. Class 2 is impaired.
The Secured Portion of Class 2, estimated in $471,978, shall be
paid in monthly installments of $2,533.68, including principal and
interest at 5% per annum, commencing on the Effective Date until
the full payment of this claim. The unsecured portion of USDT's
claim (deficiency claim), estimated in $1,081,015.53, will be dealt
under Class 3.
It must be underscored that it is Debtor's contention that a motion
under Rule 3012(c) is not mandatory as the confirmation of Debtor's
Plan will comply with Section 1129 (b)(2)(A)(iii) by providing the
USDT with the indubitable equivalent of its liens. To prove this,
Debtor is attaching hereto as Exhibit K the relevant pages of the
latest appraisal of the subject property as well as the updated
cash flows and values. As it can be ascertained from said exhibit,
the secured portion of the USDT that is being paid in the Plan is
based on the latest appraisal and taking into consideration the
updated cash flows.
Class 5 consists of Priority Tax Claims. Holders of Allowed
Priority Tax Claims, secured and unsecured, including the allowed
claims of the Internal Revenue Service, Treasury Department of
Puerto Rico, and Centro de Recaudaciones de Ingresos Municipales,
shall be paid 100% of their claims, in 60 equal consecutive monthly
installments, commencing on the Effective Date and continuing on
the last day of the following 59 months, with monthly payments of
$5,841.82, including the allowed principal amounts of the claims
plus the statutory rate of interest prevailing during the month the
Plan is confirmed, estimated at 3.25% per annum. Class 5 is
impaired.
Debtor will make payments of Administrative Expense Claims,
Priority Tax Claims, Allowed Secured and General Unsecured Claims
in accordance with the payment plans set forth above from the cash
flows generated from its rental operations, the collection of its
accounts receivables, and the cash accumulated during the pendency
of the case. Initial payment to BPPR for $250,000 shall be made
from the sale of the parcels of land mentioned in the Stipulation
with BPPR.
Said sale will be a direct sale to Mr. Alexis Jesus Bosques
Acevedo, who has already submitted a formal written purchase offer.
Lastly, Debtor's insiders' monthly management fee of $3,500.00,
will be decreased to $2,500.00 on or about July 2023, and further
decreased to $2,000.00 on or about January 2026 to give feasibility
to the Plan.
A full-text copy of the First Amended Disclosure Statement dated
August 8, 2023 is available at https://urlcurt.com/u?l=9iPqVg from
PacerMonitor.com at no charge.
Debtor's Counsel:
Alexis Fuentes-Hernandez, Esq.
Fuentes Law Offices, LLC
P.O. Box 9022726
San Juan, PR 00902-2726
Tel: (787) 722-5215, 5216
Fax: (787) 722-5206
Email: alex@fuentes-law.com
About Universal Door
Universal Door and Window Manufacture, Inc., a company based in San
Sebastian, P.R., sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. P.R. Case No. 22-01961) on July 5, 2022,
disclosing $1.54 million in assets and $2.86 million in
liabilities. Judge Enrique S. Lamoutte oversees the case.
Alexis Fuentes-Hernandez, Esq., at Fuentes Law Offices, LLC and CPA
Luis R. Carrasquillo & Co., P.S.C. serve as the Debtor's legal
counsel and financial consultant, respectively.
VALARIS LTD: Fitch Lowers 2030 2nd Lien Secured Notes to 'B+'
-------------------------------------------------------------
Fitch Ratings has affirmed Valaris Limited's (Valaris) Long-Term
Issuer Default Rating (IDR) at 'B+' and downgraded 2030 second lien
secured notes co-issued by Valaris and Valaris Finance Company LLC
to 'B+'/'RR4' from 'BB-'/'RR3' after the company decided to place a
tap issue. The tap issue is primarily needed to fund the purchase
options for two new drillships. The Rating Outlook is Stable.
Valaris' rating reflects an expected sharp decline in leverage in
2024, as the currently strong floating drilling rig day rates feed
into the company's next year contract prices. Valaris' credit
profile benefits from one of the largest fleets of offshore jackups
and floaters, short-term revenue visibility, due to the presence of
contracts with fixed prices and minimum volumes, and healthy
liquidity.
Valaris is weaker positioned within its rating after the tap
issuance. Its Fitch-projected midcycle EBITDA leverage of 2.8x is
close the downgrade sensitivity of 3.0x. The company's profile is
negatively affected by high volatility in day rates and rig
utilization, combined with an asset-heavy business model and high
operating leverage, which together result in considerable swings in
EBITDA, depending on the industry cycle.
KEY RATING DRIVERS
Bond Rating Downgrade: The proposed million tap issue of the second
lien notes will reduce their recovery rating to 'RR4' from 'RR3',
which will bring the notes rating on par with Valaris' IDR. The
incremental debt is mainly needed to fund the final payment for two
drillships before the end of 2023. Fitch previously expected
Valaris to fund the drillship payments with cash balance and FCF
over 2023-2025. Valaris does not have contracts for the drillships
at the moment.
Rebound in Floater Market: As long-term forward oil prices started
to increase in 2021, market day rates for floaters began growing at
a fast pace and almost doubled between YE 2020 and YE 2022. Floater
utilization has been improving and is currently at significant
levels. Fitch does not assume any significant growth in market day
rates for 2H23-2H24 and expects rates to decline in 2025 based on
Fitch oil price deck. The number of contracted floaters is largely
stagnant worldwide as of 2017-2022.
Fitch expects this number to increase in 2023-2024. Stacked floater
rigs peaked in early 2017 after oil prices collapsed in 2014. More
than half of stacked rigs, as of early 2017, exited the market by
YE 2022. Valaris has been gradually reactivating its rigs and just
three of its 16 floaters are currently stacked without future
contract. Valaris will need to stack the two new drillships it
receives in late 2023 if it does not finds contracts for them by
the time it takes delivery.
Backlog on Growth Trajectory: Valaris has recently secured a
2.5-year contract for one of its stacked drillships to work in west
Africa. Valaris estimates the contract value at $364 million. The
company had a $3.0 billion contract backlog, as of August 1, 2023,
up from $2.5 billion as of February 2023 and $1.0 billion at YE
2020. Valaris' Fitch-projected 2024 revenue was covered by the
existing backlog by 54%, while 2025 revenue is 40% covered.
Jackup Segment Under Pressure: Valaris' jackup business enhances
stability of cash flows because jackup day rates are not as
volatile as those for floating rigs and global jackup utilization
fell less dramatically than floaters utilization in 2017. The
higher resilience of the jackup market is underpinned by shorter
payback for shallower offshore upstream projects. Valaris generated
most of its EBITDA from the jackup segment in 2022.
Fitch expects this share will decline in 2023-2026 as the company's
floaters move away from lower legacy day rates and the harsh
environment jackup market goes through a period of muted demand by
North Sea producers. Valaris also benefits from the stability of
its other businesses, including bareboat charters to its joint
venture (JV) with the Saudi Arabian Oil Company (Saudi Aramco;
A+/Stable) and rig management services.
Envisaged Decline in Leverage: The rating is based on a sharp
reduction in gross leverage that Fitch forecasts in 2024. Valaris
exited Chapter 11 restructuring in April 2021, eliminating $7.1
billion of pre-petition debt and raising a $550 million bond.
However, EBITDA leverage was 6.7x at YE 2021 and 3.7x at YE 2022
due to subdued EBITDA generation driven by muted demand for
offshore drilling services over the last several years leading to
an oversupplied market.
Fitch projects Valaris' EBITDA to improve to nearly $200 million in
2023 from $147 million in 2022 and reach about $500 million in
2024, as Valaris starts realizing higher day rates on the 2023
contracts from rig reactivations and active rig contract rollovers.
EBITDA leverage is expected to jump to 5.7x in 2023 after the tap
issuance but decline to 2.1x in 2024 as EBITDA generation starts to
normalize. Fitch expect the company's EBITDA will start declining
in 2026 based on Fitch falling oil price assumptions.
Heavy Capex in 2023: Valaris will front-load 2023-2025 capex given
the investment in the two new drillships in 2023. Fitch forecast
2023 capex to approach $700 million but then quickly decline in
2024 and 2025 despite the capitalized portion of rig reactivation
costs. Valaris aims to reactivate floaters when it can secure a
contract that provides a sufficient return on reactivation. Larger
part of reactivation costs is reflected EBITDA, which weighs on the
company's leverage. Fitch forecasts FCF to turn positive after
2024, as a result of elevated capex and reactivation costs in
2023-2024.
No Dividends, Growing Buybacks: Fitch do not project any dividends
to be paid by Valaris in the medium term. The company has a $200
million share buyback target for 2023, up from $100 million that
Fitch expected when Fitch assigned the rating in April 2023. Fitch
assume that Valaris spends $100 million per annum on buybacks in
2024-2027 given Fitch positive FCF forecast. Fitch do not expect
Valaris to pay any significant dividends until its key markets
recover sustainably.
Major Player in Offshore Drilling: Valaris owns 16 floating rigs,
11 drillships and five semisubmersible rigs, and 35 jackups. The
offshore drilling fleet is the largest globally by number of rigs.
Valaris operates in all large offshore oil and gas basins, such as
the Gulf of Mexico, Brazil, the Middle East, West Africa, the North
Sea, Southeast Asia and Australia.
Growing JV with Saudi Aramco: Valaris has a 50% stake in an equity
method-accounted JV with Saudi Aramco called ARO Drilling. ARO is
an offshore drilling company that has contracts with Saudi Aramco.
Fitch expects ARO to be in an expansionary stage in 2023-2027 and
does not forecast any dividends from the JV. At the same time,
Fitch expect the company to fund capex through FCF generation and
standalone debt without any cash calls from the partners. Valaris
has $400 million notes receivable from ARO due in 2027 and 2028.
Fitch does not forecast the notes principal repayment in 2023-2027
but expects the company to receive annual interest.
DERIVATION SUMMARY
Valaris' peers include Noble Corporation plc (BB-/Stable) and
Seadrill Limited (B+/Stable). Valaris experiences lower 2023
margins due to its current contract structure, reactivation costs
and higher concentration of jackups. Noble is expected to generate
greater FCF than Valaris, given the recent recovery and higher
margin profile for floaters, especially in the near term. Seadrill
has better contract terms than Valaris for 2023 but Fitch expect
Valaris to sharply increase EBITDA generation in 2024-2025 as
higher day rates are reflected in its contracts.
Valaris has more gross debt and higher midcycle leverage than
peers. This makes it more vulnerable to a market downturn compared
to peers. Valaris had healthy liquidity at June 30, 2023.
KEY ASSUMPTIONS
-- Brent oil price of $80/b in 2023, $75/b in 2024, $70/b in 2025,
$65/b in 2026 and $60/b thereafter;
-- 16% revenue growth in 2023 and 31% in 2024 followed by revenue
decline in 2025-2027;
-- EBITDA margin growing to 11% in 2023, 21% in 2024, 23% in 2025
with a decrease to 18% by 2027;
-- Capex, including newbuilds, at $690 million in 2023 falling
from $300 million in 2024 toward $150 million in 2027;
-- No dividends;
-- $200 million share buyback in 2023 and $100 million
thereafter.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Sustainably stronger offshore drilling market fundamentals,
including high day rates, longer contracts and growing backlog and
rig utilization;
-- Track record of conservative financial policy that keeps gross
debt in check;
-- Midcycle EBITDA leverage below 2.0x.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Deteriorating market fundamentals such as decreasing day rates
and offshore rig utilization;
-- Significant increase in gross debt;
-- Weakening liquidity;
-- Midcycle EBITDA leverage above 3.0x.
LIQUIDITY AND DEBT STRUCTURE
Sufficient Liquidity: Valaris' debt is due 2030 but the company may
need liquidity to cover negative FCF in the medium term. The
combined negative FCF, including capex and working capital cash
outflows, will reach almost $300 million in 2023-2025, according to
Fitch latest projections. This can be covered by $805 million of
cash at June 30, 2023 and the $375 million undrawn long-term
committed RCF. Valaris should have sufficient liquidity if it
maintains a disciplined approach to discretionary cash spending.
ISSUER PROFILE
Valaris provides offshore drilling services to oil and gas
companies across the globe. It owns the world's largest fleet of
offshore rigs, including jackups and floaters. Valaris is
incorporated in Bermuda and headquartered in the U.S.
ESG CONSIDERATIONS
Valaris has an ESG Relevance Score of '4' for Waste & Hazardous
Materials Management; Ecological Impacts due to the risk that a
possible offshore oil spill may affect the drilling company. This
factor has a negative impact on the credit profile, and are
relevant to the ratings in conjunction with other factors.
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
VANTAGE TRAVEL: Two Creditors Out as Committee Members
------------------------------------------------------
The U.S. Trustee for Region 1 disclosed in a notice that as of Aug.
8, these creditors are the members of the official committee of
unsecured creditors in Vantage Travel Service, Inc.'s Chapter 11
case:
1. Anglo-Eastern Leisure Management, S.A.
Attn: Mr. Taylor Smith
4770 Biscayne Blvd., PH-D 15th Floor
Miami, FL 33137
Phone: (786) 522-7397
Email: smitht@angloeastern.com
2. Paul G. Quinn
721 Glencoe Drive
Denver, CO 80220
Phone: (720) 218-2001
Email: paulquinn3477@gmail.com
3. Harold C. Pritchett, Jr.
105 Curtis Drive
Athens, GA 30605
Phone: (706) 255-0481
Email: haroldpga@yahoo.com
4. Joe W. Wilson
743 Evans Way
The Villages, FL 32162
Phone: (256) 394-3300
Email: wrock12345@yahoo.com
5. Kenneth M. Schwartz
800 Troy-Schenectady Road, Suite 102
Latham, NY 12110
Phone: (518) 608-0987
Email: KSchwartz@pvslaw.com
Carla Craig and Joseph Wilson were previously identified as members
of the creditors committee. Their names no longer appear in the
new notice.
About Vantage Travel Service
Vantage Travel Service, Inc. is a travel agency providing deluxe
international tours. Its travel offerings include trips on river
and ocean-going vessels owned by affiliated, non-debtor entities,
as well as river, ocean-going and land-based tours booked with
third-party operators. The agency is based in Boston, Mass.
Vantage Travel Service sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. D. Mass. Case No. 23-11060) on June
29, 2023, with $1 million to $10 million in assets and $100 million
to $500 million in liabilities. Gregory DelGreco signed the
petition as the authorized officer.
Judge Janet E. Bostwick oversees the case.
The Debtor tapped Michael J. Goldberg, Esq., at Casner & Edwards,
LLP as legal counsel and Argus Management Corporation as financial
advisor. Stretto, Inc. is the Debtor's claims and noticing agent
and administrative advisor.
VIRGIN PULSE: $185MM Bank Debt Trades at 16% Discount
-----------------------------------------------------
Participations in a syndicated loan under which Virgin Pulse Inc is
a borrower were trading in the secondary market around 83.9
cents-on-the-dollar during the week ended Friday, August 11, 2023,
according to Bloomberg's Evaluated Pricing service data.
The $185 million facility is a Term loan that is scheduled to
mature on April 6, 2029. The amount is fully drawn and
outstanding.
Virgin Pulse, Inc. operates as a digital health, well being, and
engagement company. The Company focuses on engaging users every day
in building and sustaining healthy behaviors and driving measurable
outcomes for employees, employers, and health plans.
WWEX UNI TOPCO: $150MM Bank Debt Trades at 17% Discount
-------------------------------------------------------
Participations in a syndicated loan under which WWEX Uni Topco
Holdings LLC is a borrower were trading in the secondary market
around 82.8 cents-on-the-dollar during the week ended Friday,
August 11, 2023, according to Bloomberg's Evaluated Pricing service
data.
The $150 million facility is a Term loan that is scheduled to
mature on July 26, 2029. The amount is fully drawn and
outstanding.
WWEX UNI Topco Holdings, LLC is headquartered in Dallas, Texas, and
is a non-asset based third party logistics services provider to a
wide array of end-markets and customers. The company is owned by
private equity sponsors, CVC Capital Partners, Providence Equity
Partners, PSG, Ridgemont Equity Partners and management.
WWMAJ SYSTEMS: Seeks to Hire Amy L. Taylor as Accountant
--------------------------------------------------------
WWMAJ Systems, LLC, seeks approval from the U.S. Bankruptcy Court
for the District of Kansas to hire Amy L. Taylor, CPA, LLC.
The Debtor requires an accountant to assist in the preparation of
its monthly operating reports and financial statements and assist
in the maintenance of its financial records.
The firm will charge $92 for independent work by its accountants
and $76 for independent work by bookkeepers.
In court papers, Amy Taylor, a certified public accountant,
disclosed in a court filing that she is "disinterested" pursuant to
Section 101(14) of the Bankruptcy Code.
Ms. Taylor holds office at:
Amy L. Taylor, CPA
Amy L. Taylor, CPA, LLC
1070 N. Lincoln St.
Olathe, KS 66061
About WWMAJ Systems
WWMAJ Systems, LLC, is an online retailer with experience in the
beverage and grocery industries. The company conducts business
under the name LRB Superstore and is based in Overland Park,
Kansas.
WWMAJ Systems filed a petition under Chapter 11, Subchapter V of
the Bankruptcy Code (Bankr. D. Kan. Case No. 23-20536) on May 16,
2023, with $100,000 to $500,000 in assets and $1 million to $10
million in liabilities. G. Matt Barberich, Jr. of B. Riley
Advisory Services has been appointed as Subchapter V trustee.
Judge Dale L. Somers oversees the case.
The Debtor tapped Conroy Baran, LLC and Krigel & Krigel, P.C., as
bankruptcy counsel and Amy L. Taylor, CPA, LLC as accountant.
YELLOW CORP: Seeks $142.5MM New Money DIP Loan from Alter Domus
---------------------------------------------------------------
Yellow Corporation and affiliates ask the U.S. Bankruptcy Court for
the District of Delaware for authority to use cash collateral and
obtain postpetition financing.
Alter Domus Products Corp. serves as Administrative Agent and
Collateral Agent under the DIP Facility.
The DIP Facility is a $142.5 million new-money senior secured
super-priority debtor-in-possession facility. The DIP Facility
also includes the roll up of $501.584 million in prepetition term
debt under the Amended and Restated Credit Agreement, dated as of
September 11, 2019, and amended and restated on April 7, 2020, July
7, 2020, and July 7, 2023 (but effective as of June 30, 2023),
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.
The new money loan may be accessed over four draws:
$60,000,000 as initial draw immediately available to the
Debtors upon the Court's entry of the Interim
Order;
$37,500,000 upon the Court's entry of a final,
non-appealable order approving the Bidding
Procedures;
$20,000,000 upon the Debtors' receipt, pursuant to the
Bidding Procedures Order, of unique,
non-duplicative binding bids for the DIP
Priority Collateral that would, in the
aggregate, generate net cash proceeds equal to
at least $250 million; and
$25,000,000 upon the Debtors' receipt, pursuant to the
Bidding Procedures Order, of unique,
non-duplicative binding bids for the DIP
Priority Collateral that would, in the
aggregate, generate net cash proceeds equal to
at least $450 million.
The DIP Facility provides that the DIP Lenders' Prepetition B-2
Term Loans will be fully "rolled up" into the DIP Facility. The
proposed Roll-Up would convert into DIP Obligations, immediately
upon entry of the Interim Order, all outstanding obligations under
the Prepetition B-2 Credit Agreement held by the DIP Lenders or
their affiliates or their respective managed or related funds.
The Roll-Up constitutes a key component of the DIP Facility. The
DIP Lenders indicated to the Debtors that they would not agree to
provide the DIP Facility absent the Roll-Up and its being
effectuated upon entry of the Interim Order. The Roll-Up Amount
represents an approximately 3.5-to-1 conversion of the DIP Lenders'
Prepetition B-2 Obligations into DIP Obligations when accounting
for the $142.5 million of New Money DIP Term Loans under the DIP
Facility.
In addition to the New Money DIP Term Loans (up to $142.5 million),
the Prepetition ABL Agent has consented to the Debtors' use of
Available ABL Cash Collateral, and the Prepetition ABL Secured
Parties have agreed to the Debtors' use of their cash on hand as of
the Petition Date less $16.5 million, which amount will be used to
pay down (or cash collateralize, as applicable) the Prepetition ABL
Secured Parties at the outset of these cases. The available ABL
Cash Collateral is expected to be approximately $80 million over
the first 12 weeks of the chapter 11 cases.
The expected interest rate is 17% comprised of the current Prime
Rate of 8.5% plus the Applicable Margin.
The DIP facility is due and payable through the earliest to occur
of:
(i) 90 days following the Closing Date; provided that, if (x)
on or prior to the Initial Maturity Date the Borrower will have
received unique, non-duplicative binding cash bids pursuant to the
Bidding Procedures Order for DIP Priority Collateral equal to at
least 100% of the sum of the aggregate amount of Obligations
outstanding as of such date but will not have consummated such sale
of DIP Priority Collateral and (y) not later than 12 p.m. New York
City time one Business Day prior to the Initial Maturity Date, the
Lenders and the Administrative Agent will have received a
certificate signed by a Responsible Officer of the Borrower
certifying that the circumstances described in the foregoing clause
(x) above have occurred, the date in the clause (i) will be
extended to 105 days after the Closing Date;
(ii) The effective date or the date of the substantial
consummation of a Plan of Reorganization that has been confirmed by
an order of the Bankruptcy Court;
(iii) The date the Bankruptcy Court orders the conversion of the
Chapter 11 Case of any of the Loan Parties to a liquidation under
Chapter 7 of the Bankruptcy Code;
(iv) The date of consummation of a sale or other disposition of
all or substantially all of the assets of the Debtors under 11
U.S.C. section 363 or otherwise;
(v) The date the Bankruptcy Court orders the dismissal of the
Chapter 11 Case of any of the Loan Parties;
(vi) The date of acceleration of the Term Loans or early
termination of the Commitments thereunder, including as a result of
the occurrence and continuance of an Event of Default; and
(vii) The date that is 30 calendar days after the Petition Date
if the Final Order Entry Date will not have occurred by such date.
The Debtors are required the comply with these milestones:
(1) By no later than August 6, 2023, the Borrower and each
Guarantor will have commenced the Chapter 11 Cases.
(2) By no later than the Petition Date, the Debtors will have
filed the motion seeking entry of the DIP Order and the UST
Adequate Protection Order, in each case, in form and substance
satisfactory to the Required Lenders and the Agents.
(3) By no later than three calendar days after the Petition
Date, the Bankruptcy Court will have entered the Interim Order, in
form and substance satisfactory to the Required Lenders and the
Agents.
(4) By no later than 10 calendar days after the Petition Date,
the Bankruptcy Court will have entered the Bidding Procedures
Order, in form and substance reasonably satisfactory to the
Required Lenders and the Agents.
(5) By no later than 10 calendar days after the Petition Date,
Borrower, in its capacity as foreign representative on behalf of
the Debtors that are Canadian Subsidiaries, will have filed an
application with the Canadian Court to commence the Canadian
Recognition Proceedings and the Canadian Court will have issued the
Canadian Initial Recognition Order, the Canadian Supplemental Order
and the Canadian Interim DIP Recognition Order.
(6) By no later than 30 calendar days after the Petition Date,
the Bankruptcy Court will have entered the Final Order, in form and
substance satisfactory to the Required Lenders and the Agents.
(7) By no later than 40 calendar days after the Petition Date,
the Borrower, in its capacity as foreign representative on behalf
of the Debtors, will have filed a motion with the Canadian Court
for the recognition of, and the Canadian Court will have issued,
the Canadian Final DIP Recognition Order.
(8) By no later than 55 calendar days after the Petition Date,
the Debtors will have received unique, non-duplicative binding cash
bids for DIP Priority Collateral pursuant to the Bidding Procedures
Order that would generate, in the aggregate, Net Proceeds at least
equal to $250 million.
(9) By no later than 70 calendar days after the Petition Date,
the Debtors will have received unique, non-duplicative binding cash
bids pursuant to the Bidding Procedures Order which are not subject
to any financing contingencies for DIP Priority Collateral pursuant
to the Bidding Procedures Order that would generate, in the
aggregate, Net Proceeds at least equal to $450 million.
(10) By no later than 90 calendar days after the Petition Date,
the Debtors will have consummated Dispositions in accordance with
the Bidding Procedures Order that either (i) generated Net Proceeds
of DIP Priority Collateral equal to at least 100% of the sum of the
aggregate amount of Obligations outstanding as of such date or (ii)
is consummated through a credit bid of the outstanding Obligations
(and any other applicable obligations) in connection with sales of
DIP Priority Collateral.
The Debtors entered the chapter 11 cases with only approximately
$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.
The Debtors anticipate filing a bidding procedures motion in the
near term. The Debtors intend to market all of their assets to
interested purchasers, including the Debtors' former industry
competitors as well as other strategic and financial buyers and
investors, over an approximately three-month process led by the
Debtors' proposed investment banker, Ducera Partners LLC.
Concurrent with marketing their extensive portfolio of assets, the
Debtors will complete an orderly wind-down of their operations,
which was commenced prior to the Petition Date. Operations will
remain limited and solely to support sale and wind-down efforts,
including clearing remaining customer freight and collection of
associated accounts receivable, over an expedited period. Access to
cash collateral and the DIP Facility proceeds is essential to fund
the Debtors' sale process, an efficient wind-down, and these
limited operations.
The Debtors have approximately $1.2 billion in total funded debt
obligations. This amount consists of a $485.3 million senior
secured term loan, and approximately $737 million in US Treasury
term loans, and $0.9 million in borrowings under the ABL Facility.
In addition, the Debtors have approximately $359.3 million of
undrawn letters of credit issued under the ABL Facility.
On July 7, 2020, Yellow and certain of its subsidiaries, as
guarantors, entered into the UST Tranche A Term Loan Credit
Agreement with The Bank of New York Mellon, as administrative agent
and collateral agent and the UST Tranche B Term Loan Credit
Agreement with The Bank of New York Mellon, as administrative agent
and collateral agent, through which the United States Treasury
committed an aggregate principal amount of $700 million to the
Company pursuant to the CARES Act. The obligations of the Company
under the UST Credit Agreements are guaranteed by the Term
Guarantors.
The UST Credit Agreements have maturity dates of September 30,
2024, with a single payment at maturity of the outstanding balance.
The Tranche A UST Credit Agreement consists of a $300 million term
loan and bears interest at a rate of the Adjusted LIBO rate
(subject to a floor of 1.0%) plus a margin of 3.5% per annum,
consisting of 1.50% in cash and the remainder paid-in-kind.
Proceeds from the Tranche A UST Credit Agreement were used to meet
Yellow's contractual obligations, maintain working capital and
finance technology and infrastructure development. The Tranche B
UST Credit Agreement consists of a $400 million term loan and bears
interest at a rate of the Adjusted LIBO rate (subject to a floor of
1.0%) plus a margin of 3.5% per annum, paid in cash. Proceeds from
the Tranche B UST Credit Agreement were used predominantly for the
acquisition of tractors and trailers.
Obligations under the UST Credit Agreements are secured by a
perfected first priority security interest in the escrow or
controlled account supporting the respective UST Credit Facility,
certain tractors and trailers (solely in the case of the Tranche B
UST Credit Agreement) and a perfected junior priority security
interest (subject in each case to permitted liens) in substantially
all other assets of the Company and the Term Guarantors, subject to
certain exceptions.
On July 7, 2023, but effective as of June 30, 2023, the Company and
certain of its subsidiaries entered into a waiver agreement under
the UST Credit Agreements. The UST Credit Agreement Waiver provides
for a waiver of the minimum Consolidated EBITDA financial covenant
of $200 million LTM set forth in the UST Credit Agreements for the
covenant testing period that ended on June 30, 2023.
As of the Petition Date, approximately $337 million in borrowings
remain outstanding under the Tranche A UST Credit Agreement, and
approximately $400 million in borrowings remain outstanding under
the Tranche B UST Credit Agreement.
On September 11, 2019, Yellow and certain of its subsidiaries, as
guarantors, amended and restated the existing credit facilities
under the credit agreement dated February 13, 2014 and entered into
a $600 million term loan agreement with the Prepetition B-2
Lenders, and Alter Domus, as administrative agent and collateral
agent. Yellow's obligations under the Prepetition B-2 Credit
Agreement are guaranteed by the Term Guarantors.
The Prepetition B-2 Term Loan has a maturity date of June 30, 2024,
with a single payment due at maturity of the outstanding balance.
The Prepetition B-2 Term Loan initially bore interest at the
Adjusted LIBO rate (subject to a floor of 1%) plus a margin of 7.5%
per annum, payable at least quarterly in cash, subject to a 1.0%
margin step down in the event the Company achieves greater than
$400 million in trailing-twelve-month Adjusted EBITDA. Obligations
under the Prepetition B-2 Term Loan are secured by a perfected
first-priority security interest in (subject to permitted liens)
assets of the Company and the Term Guarantors, including but not
limited to all of the Company's wholly owned terminals, tractors
and trailers other than the tractors and trailers funded by the UST
Tranche B loan, subject to certain limited exceptions.
On April 7, 2020, the Company and certain of its subsidiaries
entered into Amendment No. 1 to the Prepetition B-2 Term Loan as a
result of expected future covenant and liquidity tightening due to
unprecedented economic deterioration. The First Term Loan Amendment
principally provided additional liquidity allowing the Company to
defer quarterly interest payments for the quarter ended March 31,
2020 and the quarter ending June 30, 2020 with almost all of such
interest to be paid-in-kind. The First Term Loan Amendment also
provided for a waiver with respect to the Adjusted EBITDA financial
covenant during each fiscal quarter during the fiscal year ending
December 31, 2020. The interest rate was retroactively reset to a
fixed 14% during the first six months of 2020.
In July 2023, the Company announced that it closed on the sale of
an obsolete terminal property in Compton, California, with a
third-party purchaser for a sale price of $80 million. In
accordance with the terms and conditions of the Third Term Loan
Amendment, the net proceeds of the sale, totaling approximately
$79.5 million, were applied to the outstanding principal balance of
the Prepetition B-2 Term Loan.
As of the Petition Date, approximately $485.3 million in borrowings
remain outstanding under the Prepetition B-2 Term Loan.
On February 13, 2014, Yellow entered into a $450 million
asset-based loan facility from a syndicate of banks arranged by
Citizens Business Capital, Merrill Lynch, Pierce, Fenner & Smith
and CIT Finance LLC. Yellow and its subsidiaries, YRC Freight,
Reddaway, Holland and New Penn are borrowers under the ABL
Facility, and certain of the Company's domestic subsidiaries are
guarantors thereunder. Availability under the ABL Facility is
derived by reducing the amount that may be advanced against
eligible receivables plus eligible borrowing base cash by certain
reserves imposed by the ABL Agent and the Company's outstanding
letters of credit and revolving loans. Eligible borrowing base cash
is cash that is deposited from time to time into a segregated
restricted account and is included in "Restricted amounts held in
escrow" in the accompanying consolidated balance sheet.
At Yellow's option, borrowings under the ABL Facility bear interest
at either: (i) the applicable USD LIBOR rate plus 2.25%, as
amended, or (ii) the base rate (as defined in the ABL Facility)
plus 1.25%, as amended. Letter of credit fees equal to the
applicable USD LIBOR margin in effect, 2.25% as amended, are
charged quarterly in arrears on the average daily stated amount of
all letters of credit outstanding during the quarter.
Unused line fees are charged quarterly in arrears (such unused line
fee percentage is equal to 0.375% per annum if the average revolver
usage is less than 50% or 0.25% per annum if the average revolver
usage is greater than 50%). The ABL Facility is secured by a
perfected first-priority security interest in accounts receivable,
cash, deposit accounts and other assets related to accounts
receivable of Yellow and the other loan parties and an additional
second priority security interest in substantially all remaining
assets of the borrowers and the guarantors.
On October 31, 2022, the Company and certain of its subsidiaries
entered into Amendment No. 7 in which the maturity date of the ABL
Facility was extended to January 9, 2026 and included a springing
maturity commencing 30 days prior to the maturity of any of the
Term Debt, the UST Tranche A Facility Indebtedness, or the UST
Tranche B Facility Indebtedness. The amended facility has an
increased capacity of $50 million up to $500 million and an
interest rate of SOFR plus 1.75% plus a credit spread adjustment of
.10%.
As of the Petition Date, $900,000 in borrowings remain outstanding
under the ABL Facility in addition to approximately $359.288
million of undrawn letters of credit.
Pursuant to the DIP Facility, the Debtors will provide adequate
protection to the Prepetition Secured Parties and the Prepetition
UST Secured Parties, consisting of replacement liens, payment of
professional fees, interest and fees payments, and information and
reporting rights.
Specifically, as security for the DIP Obligations, the Debtors will
grant the DIP Agent, for the benefit of the DIP Lenders, a first
lien on all previously unencumbered assets of the Debtors and a
priming lien on certain Prepetition Collateral, subject to the
Prepetition Secured Parties' collateral priority scheme as set
forth in the Prepetition Intercreditor Agreement. Further, the
Approved Budget (as defined in the Interim Order) will be subject
to the consultation rights of the Prepetition ABL Secured Parties
and consent rights of the Prepetition UST Secured Parties.
A copy of the motion is available at https://urlcurt.com/u?l=9WY8s4
from PacerMonitor.com.
About Yellow Corp
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 concurrently filed voluntary
petitions for relief under Chapter 11 of the Bankruptcy Code
(Bankr. D. Del. Lead Case No. 23-11069) on August 6, 2023, before
the Hon. Craig T. Goldblatt. As of March 31, 2023, Yellow Corp had
$2,152,200,000 in total assets against $2,588,800,000 in total
liabilities. The petitions were signed by Matthew A. Doheny as
chief restructuring officer.
Kirkland & Ellis LLP is serving as the Company's restructuring
counsel, Pachulski Stang Ziehl & Jones LLP is serving as the
Company's Delaware local counsel, Kasowitz, Benson and Torres LLP
is serving as special litigation counsel, Goodmans LLP is serving
as the Company's special Canadian counsel, Ducera Partners LLC is
serving as the Company's investment banker, and Alvarez and Marsal
is serving as the Company's financial advisor. Epiq Bankruptcy
Solutions serves as claims and noticing agent.
Milbank LLP, serves as counsel to certain investment funds and
accounts managed by affiliates of Apollo Capital Management, L.P.
White & Case LLP, serves as counsel to Beal Bank USA.
Arnold & Porter Kaye Scholer LLP, serves as counsel to the United
States Department of the Treasury.
The Administrative Agent to the DIP Lenders may be reached at:
Alter Domus Products Corp.
225 W. Washington Street, 9th Floor
Chicago, IL 60606
Attention: Legal Department - Agency
Emily Ergang Pappas
Chris Capezuti
Fax: 312-376-0751
Tel: 312-564-5100
E-mail: legal_agency@alterdomus.com
emily.ergangpappas@alterdomus.com
cpcagency@alterdomus.com
The DIP Agent is represented by:
Joshua M. Spencer, Esq.
Holland & Knight LLP
150 N. Riverside Plaza, Suite 2700
Chicago, IL 60606
Fax: 312-578-6666
Tel: 312-263-3600
E-mail: joshua.spencer@hklaw.com
alterdomus@hklaw.com
ZAYO GROUP: $4.96BB Bank Debt Trades at 20% Discount
----------------------------------------------------
Participations in a syndicated loan under which Zayo Group Holdings
Inc is a borrower were trading in the secondary market around 80.3
cents-on-the-dollar during the week ended Friday, August 11, 2023,
according to Bloomberg's Evaluated Pricing service data.
The $4.96 billion facility is a Term loan that is scheduled to
mature on March 9, 2027. The amount is fully drawn and
outstanding.
Zayo Group is a privately held company headquartered in Boulder,
Colorado, with European headquarters in London, England. The
company provides communications infrastructure services.
ZAYO GROUP: $750MM Bank Debt Trades at 19% Discount
---------------------------------------------------
Participations in a syndicated loan under which Zayo Group Holdings
Inc is a borrower were trading in the secondary market around 80.8
cents-on-the-dollar during the week ended Friday, August 11, 2023,
according to Bloomberg's Evaluated Pricing service data.
The $750 million facility is a Term loan that is scheduled to
mature on March 9, 2027. The amount is fully drawn and
outstanding.
Zayo Group is a privately held company headquartered in Boulder,
Colorado, with European headquarters in London, England. The
company provides communications infrastructure services.
[^] BOND PRICING: For the Week from August 7 to 11, 2023
--------------------------------------------------------
Company Ticker Coupon Bid Price Maturity
------- ------ ------ --------- --------
99 Escrow Issuer Inc NDN 7.500 38.724 1/15/2026
99 Escrow Issuer Inc NDN 7.500 39.038 1/15/2026
99 Escrow Issuer Inc NDN 7.500 39.074 1/15/2026
AMC Entertainment
Holdings Inc AMC 5.750 59.492 6/15/2025
AMC Entertainment
Holdings Inc AMC 5.875 40.201 11/15/2026
Acorda Therapeutics Inc ACOR 6.000 64.486 12/1/2024
Air Methods Corp AIRM 8.000 1.000 5/15/2025
Air Methods Corp AIRM 8.000 0.908 5/15/2025
Allstate Corp/The ALL 5.750 98.750 8/15/2053
AmTrust Financial
Services Inc AFSI 6.125 99.126 8/15/2023
Amyris Inc AMRS 1.500 7.816 11/15/2026
Audacy Capital Corp CBSR 6.750 2.061 3/31/2029
Audacy Capital Corp CBSR 6.500 1.741 5/1/2027
Audacy Capital Corp CBSR 6.750 1.943 3/31/2029
BPZ Resources Inc BPZR 6.500 3.017 3/1/2049
Bank of America Corp BAC 6.680 99.365 8/15/2023
Bank of America Corp BAC 5.150 99.888 8/15/2023
Bed Bath & Beyond Inc BBBY 5.165 1.260 8/1/2044
Bed Bath & Beyond Inc BBBY 4.915 1.214 8/1/2034
Biora Therapeutics Inc BIOR 7.250 54.615 12/1/2025
Boingo Wireless Inc WIFI 1.000 93.125 10/1/2023
Brixmor LLC BRX 6.900 9.875 2/15/2028
CalAtlantic Group LLC CAA 5.875 99.356 11/15/2024
Citigroup Global
Markets Holdings
Inc/United States C 6.050 95.445 9/28/2023
Citigroup Inc C 4.069 97.460 8/30/2023
Clovis Oncology Inc CLVS 1.250 11.191 5/1/2025
Clovis Oncology Inc CLVS 4.500 11.396 8/1/2024
Clovis Oncology Inc CLVS 4.500 9.923 8/1/2024
Consumers Energy Co CMS 3.375 99.608 8/15/2023
Curo Group Holdings Corp CURO 7.500 23.687 8/1/2028
Curo Group Holdings Corp CURO 7.500 24.064 8/1/2028
DIRECTV Holdings
LLC / DIRECTV
Financing Co Inc DTV 6.350 10.246 3/15/2040
Diamond Sports Group
LLC / Diamond
Sports Finance DSPORT 5.375 2.750 8/15/2026
Diamond Sports Group
LLC / Diamond
Sports Finance DSPORT 6.625 3.000 8/15/2027
Diamond Sports Group
LLC / Diamond
Sports Finance DSPORT 5.375 2.693 8/15/2026
Diamond Sports Group
LLC / Diamond
Sports Finance DSPORT 5.375 2.603 8/15/2026
Diamond Sports Group
LLC / Diamond
Sports Finance DSPORT 6.625 2.000 8/15/2027
Diamond Sports Group
LLC / Diamond
Sports Finance DSPORT 5.375 2.693 8/15/2026
Diamond Sports Group
LLC / Diamond
Sports Finance DSPORT 5.375 2.603 8/15/2026
Diebold Nixdorf Inc DBD 9.375 18.750 7/15/2025
Diebold Nixdorf Inc DBD 9.375 19.000 7/15/2025
Diebold Nixdorf Inc DBD 9.375 18.367 7/15/2025
Diebold Nixdorf Inc DBD 9.375 18.367 7/15/2025
Diebold Nixdorf Inc DBD 9.375 18.496 7/15/2025
Endo Finance LLC /
Endo Finco Inc ENDP 5.375 5.000 1/15/2023
Endo Finance LLC /
Endo Finco Inc ENDP 5.375 5.000 1/15/2023
Energy Conversion
Devices Inc ENER 3.000 0.551 6/15/2013
Envision Healthcare Corp EVHC 8.750 3.000 10/15/2026
Envision Healthcare Corp EVHC 8.750 3.034 10/15/2026
Eversource Energy ES 5.379 99.995 8/15/2023
Exela Intermediate LLC
/ Exela Finance Inc EXLINT 11.500 10.678 7/15/2026
Exela Intermediate LLC
/ Exela Finance Inc EXLINT 11.500 11.166 7/15/2026
Federal Farm Credit
Banks Funding Corp FFCB 0.200 99.835 8/15/2023
Federal Farm Credit
Banks Funding Corp FFCB 0.200 99.835 8/15/2023
Federal Farm Credit
Banks Funding Corp FFCB 0.280 99.836 8/15/2023
Federal Farm Credit
Banks Funding Corp FFCB 0.240 99.836 8/15/2023
Federal Farm Credit
Banks Funding Corp FFCB 0.260 99.736 8/15/2023
Federal Home Loan Banks FHLB 3.250 99.381 8/15/2023
Federal Home Loan Banks FHLB 2.083 99.911 8/15/2023
Federal Home Loan Banks FHLB 3.250 99.796 8/15/2023
Federal Home Loan Banks FHLB 3.400 99.370 8/17/2023
Federal Home Loan
Mortgage Corp FHLMC 0.270 99.874 8/15/2023
Federal Home Loan
Mortgage Corp FHLMC 0.230 99.874 8/15/2023
Federal Home Loan
Mortgage Corp FHLMC 0.240 99.874 8/15/2023
First Republic Bank/CA FRCB 4.375 0.578 8/1/2046
First Republic Bank/CA FRCB 4.625 0.993 2/13/2047
GNC Holdings Inc GNC 1.500 0.437 8/15/2020
Goodman Networks Inc GOODNT 8.000 1.000 5/31/2022
Groupon Inc GRPN 1.125 50.000 3/15/2026
H-Food Holdings LLC /
Hearthside
Finance Co Inc HEFOSO 8.500 39.685 6/1/2026
H-Food Holdings LLC /
Hearthside
Finance Co Inc HEFOSO 8.500 39.530 6/1/2026
Hallmark Financial
Services Inc HALL 6.250 22.383 8/15/2029
Huntington Ingalls
Industries Inc HII 0.670 99.803 8/16/2023
Inseego Corp INSG 3.250 40.699 5/1/2025
Invacare Corp IVC 5.000 83.125 11/15/2024
Invacare Corp IVC 4.250 4.077 3/15/2026
JPMorgan Chase & Co JPM 2.000 87.041 8/20/2031
JPMorgan Chase & Co JPM 4.087 96.778 8/30/2023
JPMorgan Chase & Co JPM 5.000 98.582 8/18/2023
JPMorgan Chase Bank NA JPM 3.100 100.000 8/16/2023
JPMorgan Chase Bank NA JPM 2.000 82.159 9/10/2031
Lightning eMotors Inc ZEV 7.500 43.997 5/15/2024
MBIA Insurance Corp MBI 16.830 3.004 1/15/2033
MBIA Insurance Corp MBI 16.886 3.004 1/15/2033
Macquarie Infrastructure
Holdings LLC MIC 2.000 97.499 10/1/2023
Macy's Retail Holdings M 6.900 85.664 1/15/2032
Macy's Retail Holdings M 7.875 94.941 3/1/2030
Macy's Retail Holdings M 7.875 94.941 3/1/2030
Mashantucket Western
Pequot Tribe MASHTU 7.350 41.250 7/1/2026
Morgan Stanley MS 6.930 99.315 8/12/2023
Morgan Stanley MS 1.800 71.883 8/27/2036
Morgan Stanley Finance MS 12.100 21.210 11/24/2023
NOA Bancorp Inc NOABAN 6.700 92.970 11/1/2028
NOA Bancorp Inc NOABAN 6.700 92.970 11/1/2028
National CineMedia LLC NATCIN 5.750 5.000 8/15/2026
OMX Timber Finance
Investments II LLC OMX 5.540 0.850 1/29/2020
PacifiCorp BRKHEC 7.240 100.000 8/16/2023
Party City Holdings Inc PRTY 8.750 14.750 2/15/2026
Party City Holdings Inc PRTY 10.821 13.672 7/15/2025
Party City Holdings Inc PRTY 8.750 14.500 2/15/2026
Party City Holdings Inc PRTY 6.625 0.744 8/1/2026
Party City Holdings Inc PRTY 6.625 0.744 8/1/2026
Party City Holdings Inc PRTY 10.821 13.672 7/15/2025
PeoplesBancorp MHC PEOPBC 5.375 90.430 11/15/2028
PeoplesBancorp MHC PEOPBC 5.375 90.430 11/15/2028
Photo Holdings
Merger Sub Inc SFLY 8.500 46.000 10/1/2026
Photo Holdings
Merger Sub Inc SFLY 8.500 47.666 10/1/2026
Radiology Partners Inc RADPAR 9.250 36.971 2/1/2028
Radiology Partners Inc RADPAR 9.250 37.566 2/1/2028
Renco Metals Inc RENCO 11.500 24.875 7/1/2003
Rite Aid Corp RAD 7.700 20.871 2/15/2027
Rite Aid Corp RAD 7.500 59.762 7/1/2025
Rite Aid Corp RAD 7.500 58.747 7/1/2025
Rite Aid Corp RAD 6.875 20.361 12/15/2028
Rite Aid Corp RAD 6.875 20.361 12/15/2028
RumbleON Inc RMBL 6.750 41.567 1/1/2025
SBL Holdings Inc SECBEN 7.000 60.000 N/A
SBL Holdings Inc SECBEN 7.000 62.625 N/A
SVB Financial Group SIVB 4.100 6.875 N/A
SVB Financial Group SIVB 4.000 6.875 N/A
SVB Financial Group SIVB 4.700 7.250 N/A
SVB Financial Group SIVB 4.250 6.875 N/A
Shift Technologies Inc SFT 4.750 10.106 5/15/2026
Signature Bank/
New York NY SBNY 4.000 2.250 10/15/2030
Signature Bank/
New York NY SBNY 4.125 2.125 11/1/2029
Spire Missouri Inc SR 3.400 99.813 8/15/2023
Talen Energy Supply LLC TLN 6.500 30.607 6/1/2025
Talen Energy Supply LLC TLN 10.500 34.750 1/15/2026
Talen Energy Supply LLC TLN 6.500 26.375 9/15/2024
Talen Energy Supply LLC TLN 6.500 26.375 9/15/2024
Talen Energy Supply LLC TLN 10.500 34.750 1/15/2026
Talen Energy Supply LLC TLN 7.000 26.375 10/15/2027
Talen Energy Supply LLC TLN 10.500 34.750 1/15/2026
Team Health Holdings Inc TMH 6.375 55.659 2/1/2025
Team Health Holdings Inc TMH 6.375 54.127 2/1/2025
TerraVia Holdings Inc TVIA 5.000 4.644 10/1/2019
Tricida Inc TCDA 3.500 10.179 5/15/2027
US Renal Care Inc USRENA 10.625 34.991 7/15/2027
US Renal Care Inc USRENA 10.625 37.750 7/15/2027
UpHealth Inc UPH 6.250 37.622 6/15/2026
Voya Holdings Inc INTNED 7.250 99.773 8/15/2023
WeWork Cos Inc WEWORK 7.875 19.632 5/1/2025
WeWork Cos Inc WEWORK 7.875 19.325 5/1/2025
WeWork Cos LLC /
WW Co-Obligor Inc WEWORK 5.000 40.500 7/10/2025
WeWork Cos LLC /
WW Co-Obligor Inc WEWORK 5.000 40.250 7/10/2025
Wesco Aircraft Holdings WAIR 9.000 9.500 11/15/2026
Wesco Aircraft Holdings WAIR 13.125 7.750 11/15/2027
Wesco Aircraft Holdings WAIR 8.500 4.000 11/15/2024
Wesco Aircraft Holdings WAIR 13.125 4.580 11/15/2027
Wesco Aircraft Holdings WAIR 9.000 10.690 11/15/2026
Wesco Aircraft Holdings WAIR 8.500 5.961 11/15/2024
Western Global Airlines WGALLC 10.375 0.625 8/15/2025
Western Global Airlines WGALLC 10.375 14.750 8/15/2025
Zions Bancorp NA ZION 7.200 84.000 N/A
[^] HEARTLAND TRI-STATE: FDIC Named as Receiver
-----------------------------------------------
Heartland Tri-State Bank of Elkhart, Kansas, was closed July 28 by
the Kansas Office of the State Bank Commissioner, which appointed
the Federal Deposit Insurance Corporation as receiver. To protect
depositors, the FDIC entered into a purchase and assumption
agreement with Dream First Bank, National Association, of Syracuse,
Kansas, to assume all of the deposits of Heartland Tri-State Bank.
The four branches of Heartland Tri-State Bank reopened as branches
of Dream First Bank, National Association, on July 31, under normal
business hours.
Depositors of Heartland Tri-State Bank became depositors of Dream
First Bank, National Association, so customers do not need to
change their banking relationship in order to retain their deposit
insurance coverage. Customers of Heartland Tri-State Bank should
continue to use their existing branch until they receive notice
from Dream First Bank, National Association, that it has completed
systems changes to allow its branch offices to process their
accounts as well.
As of March 31, 2023, Heartland Tri-State Bank had approximately
$139 million in total assets and $130 million in total deposits. In
addition to assuming all of the deposits, Dream First Bank,
National Association, agreed to purchase essentially all of the
failed bank's assets.
The FDIC and Dream First Bank, National Association, are also
entering into a commercial shared-loss agreement on the loans it
purchased of the former Heartland Tri-State Bank. The FDIC as
receiver and Dream First Bank, National Association, will share in
the losses and potential recoveries on the loans covered by the
shared-loss agreement, which is projected to maximize recoveries on
the assets by keeping them in the private sector. The agreement is
also expected to minimize disruptions for loan customers.
The FDIC estimates that the cost to the Deposit Insurance Fund
(DIF) will be $54.2 million. Compared to other alternatives, Dream
First Bank's acquisition was the least costly resolution for the
DIF, an insurance fund created by Congress in 1933 and managed by
the FDIC to protect the deposits at the nation's banks.
*********
Monday's edition of the TCR delivers a list of indicative prices
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*********
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