/raid1/www/Hosts/bankrupt/TCR_Public/230825.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Friday, August 25, 2023, Vol. 27, No. 236
Headlines
1651 SOUTH: Seeks to Hire Joyce W. Lindauer as Bankruptcy Counsel
36TH STREET: Seeks to Hire Hilco Real Estate as Co-Broker
3D & COMPANY: Seeks to Hire The Brannen Firm as Bankruptcy Counsel
463 CLASSON AVENUE: Seeks to Tap Integrated Concepts, Appoint CRO
5200 SAMPLE: Seeks to Hire Tranzon Driggers as Auctioneer
ADAMS DELAWARE: Seeks to Tap Konstantine Sparagis as Legal Counsel
ALECTO HEALTHCARE: Opposes Bid to Appoint Creditors Committee
ALPINE SUMMIT: Court OKs $15.5MM New Money DIP Loan from Bank7
ALPINE SUMMIT: Seeks to Hire Huron Consulting Services, Appoint CRO
AMERICAN EAGLE: L. Todd Budgen Named Subchapter V Trustee
AMERIFIRST FINANCIAL: Case Summary & 30 Top Unsecured Creditors
ANAGRAM HOLDINGS: Fitch Lowers LongTerm Issuer Default Rating to C
BIG BOY TOYS: Robert Matson Named Subchapter V Trustee
BLACKLIGHT DETAIL: Chris Quinn Named Subchapter V Trustee
C.W. KELLER: Case Summary & 20 Largest Unsecured Creditors
CALCEUS ACQUISITION: S&P Rates $340MM Senior Secured Term Loan 'B'
CENTURY AIR: Court OKs Cash Collateral Access Thru Sept 25
CHESANING MFG: Richardo Kilpatrick Named Subchapter V Trustee
CHOSHEN ISRAEL: Seeks to Hire the Tirelli Law Group as Counsel
DELTA AIR: S&P Upgrades ICR to 'BB+', Outlook Positive
DIAMANTE ENTERPRISES: Seeks to Tap Keller Williams Philly as Broker
DISCOUNT FOOD: Geron Yann Named Subchapter V Trustee
DUCKWORTH LLC: Crystal Thornton-Illar Named Subchapter V Trustee
EARTHSTONE ENERGY: Fitch Puts 'B+' LongTerm IDR on Watch Positive
EDGEWATER CONSTRUCTION: Court OKs Cash Access on Final Basis
ELESSAR PROPERTIES: Case Summary & Five Unsecured Creditors
ELITE HOME: Aaron Cohen Named Subchapter V Trustee
FORT WAYNE COLD: Douglas Adelsperger Named Subchapter V Trustee
FROGGY FLATS: Gets OK to Hire Deschenes & Associates as Counsel
FULTON MERCER: Seeks Approval to Hire Ray CPA as Accountant
GENEVER HOLDINGS: Taps O'Sullivan McCormack as Insurance Counsel
GREENWAY HEALTH: Guggenheim SOF Marks $949,622 Loan at 18% Off
GRUPO HIMA: Court OKs Cash Use, Rejects DIP Loan Request
HALMAR LLC: Susan Seflin Named Subchapter V Trustee
HENDERSON INTERNATIONAL: Taps Fox Rothschild as Legal Counsel
I&A DEVELOPMENT: Taps MYC & Associates as Real Estate Broker
IHEARTMEDIA INC: S&P Lowers ICR to 'B', Outlook Negative
IMEDIA BRANDS: Committee Taps AlixPartners as Financial Advisor
IMEDIA BRANDS: Committee Taps McDermott Will & Emery as Counsel
INTELIGLAS CORPORATION: Jami Nimeroff Named Subchapter V Trustee
IRVIN AUTOMOTIVE: Taps Law Offices of Craig M. Geno as Counsel
KAI 786: Gets OK to Hire Hacker Law Firm as Counsel
LEMONKIND LLC: Court OKs Interim Cash Collateral Access
LINDELL LLC: Court OKs Cash Collateral Access Thru Sept 6
LITTLE ROAD: Gets OK to Hire CJC Management Services as Accountant
LONE WOLF: Chris Quinn Named Subchapter V Trustee
LORDSTOWN MOTORS: Inks $40-Mil. Deal in Karma Automotive Case
MLK BRYANT: Taps Motschenbacher & Blattner as Legal Counsel
MLK BRYANT: U.S. Trustee Unable to Appoint Committee
MONICATTI AUTO: Case Summary & 20 Largest Unsecured Creditors
NOVAN INC: Court Approves Ligand-Led Auction on Aug. 31
ORBITAL INFRASTRUCTURE: Case Summary & 30 Top Unsecured Creditors
PENNSYLVANIA ECONOMIC: Fitch Affirms BB- Rating on Parking Bonds
PERMIAN RESOURCES: Fitch Puts 'BB-' LongTerm IDR on Watch Positive
PROFUNDITY LLC: Case Summary & Six Unsecured Creditors
PURE FISHING: S&P Upgrades ICR to 'CCC', Outlook Negative
R L BURNS: Wins Cash Collateral Access Thru Sept 12
REGIONAL HOUSING: Taps Crexi as Real Estate Marketing Platform
RESERVE TECH: Robert Goe Named Subchapter V Trustee
RJT FOOD: Trustee Gets OK to Hire Joseph A. Broderick as Accountant
ROCKPORT COMPANY: Sept. 14 Claims Filing Deadline Set
SHERMAN/GRAYSON HOSPITAL: Committee Taps Potter Anderson as Counsel
SHERMAN/GRAYSON: Committee Taps RK Consultants as Financial Advisor
SKILLSOFT CORP: S&P Affirms 'B-' ICR, Outlook Stable
SKIN LOGIC: Case Summary & Five Unsecured Creditors
SOUND INPATIENT: S&P Downgrades ICR to 'CCC', Outlook Negative
STAGE LIGHTING: Court OKs Interim Cash Collateral Access
STEVE'S LAWNMOWER: Has Deal on Cash Collateral Access
SURGE TRANSPORTATION: U.S. Trustee Appoints Creditors' Committee
SUSTAITA ENTERPRISES: Seeks Cash Collateral Access
UNITED ENGINEERS: Files Emergency Bid to Use Cash Collateral
UP ASBESTOS: Ind-Ra Affirms BB+ LT Issuer Rating, Outlook Stable
VECTOR ESCAPES: Nathan Smith Named Subchapter V Trustee
WAFRA CAPITAL: JLL to Hold Public Auction on September 9
WATERBRIDGE MIDSTREAM: Fitch Hikes IDR to 'B', Outlook Stable
WESTERN GLOBAL: U.S. Trustee Appoints Creditors' Committee
*********
1651 SOUTH: Seeks to Hire Joyce W. Lindauer as Bankruptcy Counsel
-----------------------------------------------------------------
1651 South Stemmons, LLC seeks approval from the U.S. Bankruptcy
Court for the Eastern District of Texas to employ Joyce W. Lindauer
Attorney, PLLC as its counsel.
The Debtor desires to hire the firm to effectuate a reorganization,
propose a plan of reorganization, and effectively move forward in
its bankruptcy proceeding.
The hourly rates of the firm's counsel and staff are as follows:
Joyce W. Lindauer, Esq. $475
Sydney Ollar, Associate Attorney $250
Laurance Boyd, Associate Attorney $235
Dian Gwinnup, Paralegal $210
Other Paralegals/Legal Assistants $65 - $210
In addition, the firm will seek reimbursement for out-of-pocket
expenses incurred.
The firm received a retainer of $21,000 from the Debtor.
Joyce Lindauer, Esq., the owner of the firm, disclosed in a court
filing that the firm is a "disinterested person" as defined in
Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Joyce W. Lindauer, Esq.
Joyce W. Lindauer Attorney, PLLC
1412 Main Street, Suite 500
Dallas, TX 75202
Telephone: (972) 503-4033
Facsimile: (972) 503-4034
Email: joyce@joycelindauer.com
About 1651 South Stemmons
1651 South Stemmons, LLC filed a petition under Chapter 11,
Subchapter V of the Bankruptcy Code (Bankr. E.D. Tex. Case No.
23-41381) on July 31, 2023, listing up to $10 million in both
assets and liabilities.
Joyce W. Lindauer, Esq., at Joyce W. Lindauer Attorney, PLLC is the
Debtor's counsel.
36TH STREET: Seeks to Hire Hilco Real Estate as Co-Broker
---------------------------------------------------------
36th Street Property Inc. and HR 442 Corp. seek approval from the
U.S. Bankruptcy Court for the Eastern District of New York to
employ Hilco Real Estate, LLC as co-broker.
Hilco will provide these consulting and real estate services:
(a) develop a sales strategy;
(b) solicit interested parties for the sale of the assets and
marketing of the property; and
(c) conduct negotiations for the sale of the assets and the
potential assumption of the loan by the purchaser.
Hilco will receive compensation as follows:
(a) $25,000 if purchase price is between $15 and $16 million;
(b) 0.875 percent if purchase price is between $16 and $18
million; or
(c) 1.5 percent if purchase price is over $18 million.
In addition, Hilco will seek reimbursement for reasonable
out-of-pocket expenses incurred.
Sarah Baker, a managing member at Hilco Real Estate, disclosed in a
court filing that the firm is a "disinterested person" as that term
is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Sarah Baker
Hilco Real Estate, LLC
5 Revere Dr., Suite 206
Northbrook, IL 60062
Telephone: (855) 755-2300
Email: sbaker@hilcoglobal.com
About 36th Street Property and HR 442 Corp.
36th Street Property Inc. is primarily engaged in renting and
leasing real estate properties. Its affiliate, HR 442 Corp.,
operates in the traveler accommodation industry.
36th Street Property and HR 442 sought protection under Chapter 11
of the U.S. Bankruptcy Code (Bankr. E.D.N.Y. Lead Case No.
22-40563) on March 22, 2022, with up to $50,000 in assets and up to
$50 million in liabilities. Ae Sook Choi, president, signed the
petition.
Judge Jil Mazer-Marino oversees the cases.
Lawrence Morrison, Esq., at Morrison Tenenbaum, PLLC is the
Debtors' counsel.
3D & COMPANY: Seeks to Hire The Brannen Firm as Bankruptcy Counsel
------------------------------------------------------------------
3D & Company seeks approval from the U.S. Bankruptcy Court for the
Northern District of Georgia to employ The Brannen Firm, LLC as its
counsel.
The firm will render these services:
(a) advise the Debtor with respect to its rights, powers,
duties, and obligations in the administration of its case,
operation of its business and management of its property;
(b) prepare pleadings, applications, and conduct examinations
incidental to administration;
(c) advise and represent the Debtor in connection with all
applications, motions, or complaints for reclamation, adequate
protection, sequestration, relief from stays, appointment of a
trustee or examiner, and all other similar matters;
(d) develop the relationship of the status of the Debtor to
the claims of creditors in these proceedings;
(e) advise and assist the Debtor in the formulation and
presentation of a plan pursuant to Chapter 11 of the Bankruptcy
Code and concerning any and all matters relating thereto; and
(f) perform any and all other legal services for the Debtor.
The hourly rates of the firm's counsel and staff are as follows:
Joseph Chad Brannon $350
Paralegal/Support Staff $150
Joseph Chad Brannon, Esq., an attorney at The Brannen Firm,
disclosed in a court filing that the firm is a "disinterested
person" as defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Joseph Chad Brannon, Esq.
The Brannen Firm, LLC
7147 Jonesboro Road, Ste. G
Morrow, GA 30260
Telephone: (770) 474-0847
About 3D & Company
3D & Company filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. N.D. Ga. Case No. 23-57343) on Aug. 1,
2023, with $500,001 to $1 million in assets and $100,001 to
$500,000 in liabilities.
Judge Paul W. Bonapfel oversees the case.
Joseph Chad Brannen, Esq., at Brannen Firm, LLC represents the
Debtor as legal counsel.
463 CLASSON AVENUE: Seeks to Tap Integrated Concepts, Appoint CRO
-----------------------------------------------------------------
463 Classon Avenue HDFC seeks approval from the U.S. Bankruptcy
Court for the Eastern District of New York to employ Integrated
Concepts Housing Solutions to provide restructuring services and
designate Ira Heppard as chief restructuring officer.
Integrated Concepts has been retained to assist the Debtor in
selling or refinancing the Debtor's real property located at 463
Classon Avenue, Brooklyn, N.Y., or the individual apartments in the
property.
Mr. Heppard is entitled to a fee equal to (a) 10 percent of the net
proceeds from any judgment sale; (b) 10 percent of the building's
fair market value upon mortgage financing, (c) 10 percent of the
sale proceeds on a sale, or (d) 10 percent of the proceeds of sale
of any individual apartment units.
Mr. Heppard, president of Integrated Concepts Housing Solutions,
disclosed in a court filing that his firm is a "disinterested
person" pursuant to Section 101(14) of the Bankruptcy Code.
The CRO can be reached at:
Ira Heppard
Integrated Concepts Housing Solutions
200 W. 136th Street, Suite 2B
New York, NY 10030
About 463 Classon Avenue HDFC
463 Classon Ave HDFC Block 1985/Lot 05, filed a Chapter 11
bankruptcy petition (Bankr. E.D.N.Y. Case No. 23-41767) on May 19,
2023, with as much as $1 million in both assets and liabilities.
Judge Jil Mazer-Marino oversees the case.
The Debtor tapped Backenroth Frankel & Krinsky, LLP as legal
counsel.
5200 SAMPLE: Seeks to Hire Tranzon Driggers as Auctioneer
---------------------------------------------------------
5200 Sample Road, LLC seeks approval from the U.S. Bankruptcy Court
for the Southern District of Florida to employ Soldnow, LLC, doing
business as Tranzon Driggers, as auctioneer.
The Debtor desires to employ the firm to assist in the sale or
auction of its assets in the fuel station and convenience store
located at 5200 W. Sample Road, Margate, Florida.
Tranzon will provide its services subject to a $3,000 marketing
expense and buyer's premium of 10 percent, which will be paid by
the buyer at the closing on the sale.
Jon Barber, an auction advisor at Tranzon Driggers, disclosed in a
court filing that the firm is a "disinterested person" as that term
is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Jon K. Barber
Tranzon Driggers
101 E. Silver Springs Blvd., Suite 206,
Ocala, FL 34470
Telephone: (352) 812-2093
Email: jbarber@tranzon.com
About 5200 Sample Road
5200 Sample Road, LLC sought protection for relief under Chapter 11
of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 23-13723) on May
12, 2023, with $50,001 to $100,000 in assets and as much as $50,000
in liabilities.
Judge Mindy A. Mora presides over the case.
Craig I. Kelley, Esq., at Kelley Fulton Kaplan & Eller, P.L. and
The Law Firm of Moffa Sutton & Donnini, P.A. serve as the Debtor's
bankruptcy counsel and special counsel, respectively.
ADAMS DELAWARE: Seeks to Tap Konstantine Sparagis as Legal Counsel
------------------------------------------------------------------
Adams Delaware Owner, LLC seeks approval from the U.S. Bankruptcy
Court for the Northern District of Illinois to employ the Law
Offices of Konstantine Sparagis, PC as its counsel.
The firm will render these services:
(a) advise the Debtor with respect to its powers and duties in
the continued management and operation of its business and
properties;
(b) attend meetings and negotiate with representatives of
creditors and other parties in interest;
(c) take all necessary action to protect and preserve the
Debtor's estate;
(d) prepare all legal papers necessary to administer the
Debtor's estate;
(e) take any action necessary on behalf of the Debtor to
obtain approval of a disclosure statement and its plan of
reorganization;
(f) represent the Debtor in connection with the obtaining
post-petition financing, if required;
(g) advise the Debtor in connection with any potential sale of
assets; and
(h) perform all other necessary legal services and provide all
other necessary legal advice to the Debtor in connection with the
Chapter 11 case.
The hourly rates of the firm's counsel and staff are as follows:
Konstantine Sparagis, Esq. $350
Paraprofessionals $75
The Debtor has paid a pre-petition retainer to the firm in the
amount of $12,500.
Mr. Sparagis disclosed in a court filing that his firm is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
The firm can be reached through:
Konstantine T. Sparagis, Esq.
Law Offices of Konstantine Sparagis, P.C.
900 W. Jackson Blvd., Ste. 4E
Chicago, IL 60607
Telephone: (312) 753-6956
E-mail: gus@konstantinelaw.com
About Adams Delaware Owner
Adams Delaware Owner, LLC sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. N.D. Ill. Case No. 23-09967) on July
31, 2023. In the petition signed by Musa Tadors, manager, the
Debtor disclosed up to $50,000 in assets and up to $50 million in
liabilities.
Judge Jacqueline P. Cox oversees the case.
The Law Offices of Konstantine Sparagis, PC represents the Debtor
as legal counsel.
ALECTO HEALTHCARE: Opposes Bid to Appoint Creditors Committee
-------------------------------------------------------------
Alecto Healthcare Services, LLC asked the U.S. Bankruptcy Court for
the District of Delaware to deny the motion filed by a group of
creditors to appoint an official committee of unsecured creditors
in its Chapter 11 case.
The group represented by Sullivan Hazeltine Allinson, LLC has
sought the appointment of a committee following information of
Alecto's "regular and ongoing transfers" to Sherman/Grayson
Hospital, LLC. The committee, the group argued, could ensure that
no further transfers are made.
The group also expressed concern about potential conflicts between
Alecto and Sherman/Grayson, which share the same management and
which are represented by the same law firms.
Jeffrey Waxman, Esq., Alecto's attorney, said that since the motion
was filed, the company has retained an independent director and
replaced its counsel, Shulman Bastian Friedman & Bui LLP, with
Morris James, LLP to address potential conflicts.
"Both the independent director and counsel are disinterested and
are fully authorized to represent [Alecto's interest], including
investigating any potential causes of action against [Alecto's]
affiliates and insiders," said Mr. Waxman, a partner at Morris
James.
The U.S. Trustee for Regions 3 and 9 and the official committee
representing Sherman/Grayson's unsecured creditors also opposed the
appointment of a committee.
"Given that steps have been taken to address the conflicts
possessed by management and counsel, at present it will be
difficult to overcome the statutory presumption against committee
appointment," U.S. Trustee Andrew Vara said in court papers.
About Alecto Healthcare Services
Alecto Healthcare Services, LLC is a provider of healthcare
infrastructure services based in Glendale Calif.
Alecto Healthcare Services filed Chapter 11 petition (Bankr. D.
Del. Case No. 23-10787) on June 16, 2023, with $1 million to $10
million in assets and $50 million to $100 million in liabilities.
Jami Nimeroff, Esq., at Brown McGarry Nimeroff, LLC has been
appointed as Subchapter V trustee.
Judge Kate Stickles oversees the case.
Jeffrey R. Waxman, Esq., and Brya M. Keilson, Esq., at Morris
James, LLP are the Debtor's bankruptcy attorneys.
ALPINE SUMMIT: Court OKs $15.5MM New Money DIP Loan from Bank7
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Texas,
Houston Division, authorized Alpine Summit Energy Partners, Inc.
and its debtor-affiliates to use cash collateral and obtain
post-petition financing from a lending consortium consisting of
Bank7, an Oklahoma banking corporation, for itself and CommerceOne
Bank, Amarillo National Bank, and American Bank, N.A., on an
interim basis.
The Debtors have obtained a priming, senior secured, superpriority
debtor-in-possession credit facility consisting of:
(i) a multiple-draw delayed draw term loan facility in the
aggregate maximum principal amount of up to $15.5 million; and
(ii) upon entry of the Final Order, conversion of $31 million
of prepetition loans to loans under the DIP Facility. Upon the
conversion of the Roll-Up Loans pursuant to the Final Order, $31
million of the Prepetition Loans will cease to be indebtedness
under the Prepetition Credit Agreement and will be deemed DIP
Obligations and DIP Facility Loans in all respects.
The New Money Loans and the Roll-Up Loans will accrue interest at
Prime Rate + 2% per annum, with a default interest rate of 15% per
annum, each of which will be payable monthly in kind and added to
the principal balance of the DIP Facility.
The DIP Facility will provide for a closing fee of 1% of the DIP
Facility Commitment, which will be added to the principal balance
of the DIP Facility on the Closing Date.
The Debtors are required to comply with these milestones:
1. The Bankruptcy Court will have entered the Interim Order by
the date that is no later than five days after the Petition Date.
2. The Bankruptcy Court will have entered the Final Order by
the date that is no later than 35 days after the Petition Date.
3. The Debtor will file, by the date that is no late than 7
days after the Petition Date, a motion to sell the following: (a)
all or substantially all of the Debtor's assets, including but not
limited to all of the Debtor's wells, proved reserves (whether
classified as proved developed producing, proved developed
non-producing, proved developed behind pipe, proved developed shut
in, proved undeveloped, probable and possible reserves, or any
other reserve category), leasehold interests, mineral and fee
interests, equipment and other assets of any kind, excluding the
Debtor's assets commonly referred to as the "Giddings Interests",
and (b) the Giddings Interests through sales pursuant to 11 U.S.C.
section 363 in form and substance reasonably acceptable to the DIP
Lender, through sales pursuant to section 363 of the Bankruptcy
Code in form and substance reasonably acceptable to the DIP
Lender.
4. The Bankruptcy Court will have entered an order approving
the bidding procedures of the sales contemplated by the Sale by the
date that is no later than 40 days after the Petition Date.
5. The Bankruptcy Court will have entered (a) an order
approving the Main Sale by the date that is no later than 90 days
after the Petition Date and (b) an order approving the Giddings
Sale by the date that is no later than100 days after the Petition
Date.
6. The Main Sale will be consummated by the date that is no
later than 105 days after the Petition Date, and the Giddings Sale
will be consummated by the date that is no later than 115 days
after the Petition Date.
7. If the Main Sale is to be accomplished through a
liquidating chapter 11 plan, the plan will be consummated by the
date that is no later than 105 days after the Petition Date. If the
Giddings Sale is to be accomplished through a liquidating chapter
11 plan, such plan will be consummated by the date that is no later
than 115 days after the Petition Date.
8. The extension of any Milestone is subject to the written
consent of the DIP Lender at its sole discretion.
The DIP Facility and the Debtor's right to use cash collateral will
automatically terminate without further notice or court proceedings
on the earliest to occur of:
i. 115 days after the Petition Date;
ii. The effective date of a plan of reorganization or
liquidation for the Debtor confirmed in the Case;
iii. [Reserved];
iv. The date of termination of the commitments under the DIP
Facility and/or acceleration of any outstanding borrowings under
the DIP Facility, in each case, by the DIP Lender following the
occurrence of an Event of Default and upon the delivery of a
Termination Notice to the Remedies Notice Parties, in each case,
subject to the Debtor's right to use cash collateral during the
Remedies Notice Period, and pending the outcome of the Stay Relief
Hearing;
v. The first business day on which the Interim Order expires
by its terms or is terminated, unless the Final Order has been
entered and become effective prior thereto;
vi. The conversion of the Case to a case under chapter 7 of the
Bankruptcy Code unless otherwise consented to in writing by the DIP
Lender;
vii. The dismissal of the Case, unless otherwise consented to in
writing by the DIP Lender; and viii. the repayment in full in cash
of all obligations and termination of all commitments under the DIP
Facility, unless extended, with the DIP Lender's prior written
consent.
As of the Petition Date, the Debtors' primary traditional debt
obligations consisted of about $54.5 million under a prepetition
revolving credit facility with Bank7. As of the Petition Date, the
Debtors estimate that various trade vendors and suppliers may
assert roughly $90.7 million of outstanding accounts payable
against the Debtors, with some vendors and suppliers asserting
liens. The Debtors dispute a significant portion of this number and
are in the process of evaluating both the validity of the vendor
and supplier claims as well as any liens asserted.
Additionally, Alpine Summit Funding LLC (SPV), a wholly owned
subsidiary of HB2 Origination, LLC and a non-debtor, issued two
tranches of notes, initially in an aggregate principal amount of
$135 million, under an asset-backed securitization facility with
affiliates of Kuvare Insurance Services LP. The ABS Facility is
secured by substantially all of the SPV's assets -- as well as a
pledge by Alpine Summing Funding Holdings LLC (another wholly owned
subsidiary of HB2 that is not a debtor) of the equity interests of
the SPV -- which assets are not part of the Bank7 collateral. UMB
Bank, N.A. serves as the Indenture Trustee under the ABS Facility.
Debtor HB2 Origination, LLC provided a limited guaranty of the ABS
Facility. On March 23, 2023, the SPV obtained a waiver of any
covenant breaches through July 1, 2023 and obtained an extension of
the initial maturity date of the first tranche under the ABS
Facility until July 1.
Pursuant to the Court's Interim Order, the Debtors are authorized
to use the proceeds of the Interim Advance and cash collateral
solely for the purposes set forth on the Approved Budget.
The Debtors are authorized to pay from the Interim Advance $510,363
to the DIP Lender in satisfaction of outstanding interest owed to
the DIP Lender as of July 5, 2023.
Subject in all cases to a carve-out for clerk of court fees, U.S.
Trustee fees and approved bankruptcy professional fees, the
Prepetition Lender will receive adequate protection in the form of
payment in kind (monthly) and added to the principal balance of the
DIP Facility for the Debtor's use of the collateral securing the
Prepetition Loans, including, but not limited to:
1. with respect to Prepetition Debt that is not converted to
Roll-Up Loans, payment of all interest accruing thereon under the
Prepetition Loan Documents at the Floating Rate as and when due
pursuant to the Prepetition Loan Documents; and
2. replacement liens and security interests in DIP Collateral
and superpriority administrative expense claims under 11 U.S.C.
sections 503 and 507, in each case junior only to the DIP Liens,
Permitted Prior Liens, DIP Obligations, and the Carve-Out, to the
extent of any diminution in the value of the Prepetition Lender's
interest in any cash collateral or other collateral securing the
Prepetition Debt.
A final hearing on the matter is set for September 13, 2023 at 9
a.m.
A copy of the order is available at https://urlcurt.com/u?l=XWnIxZ
from PacerMonitor.com.
About Alpine Summit Energy Partners
Alpine Summit Energy Partners Inc. and its affiliates develop, own,
and operate oil and gas properties in several formations in Texas.
Alpine Summit Energy Partners and its affiliates, including HB2
Origination, LLC, sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 23-90739) on July
5, 2023. In the petition filed by Craig Perry, CEO and Chairman of
Alpine Summit Energy Partners' Board of Directors, Alpine Summit
Energy Partners estimated assets up to $50,000 and liabilities
between $500,000 and $1 million.
Affiliate Ageron Energy II, LLC estimated $100 million to $500
million in assets and $1 million to $10 million in liabilities.
Affiliate HB2 Origination, LLC estimated $100 million to $500
million in assets and $50 million to $100 million in liabilities.
The Honorable Bankruptcy Judge David R. Jones oversees the cases.
The Debtors tapped PORTER HEDGES LLP as counsel; HOULIHAN LOKEY
CAPITAL, INC., as investment banker; and HURON CONSULTING SERVICES
LLC as financial advisor. KROLL RESTRUCTURING ADMINISTRATION LLC
is the claims agent.
ALPINE SUMMIT: Seeks to Hire Huron Consulting Services, Appoint CRO
-------------------------------------------------------------------
Alpine Summit Energy Partners, Inc. and its affiliates seek
approval from the U.S. Bankruptcy Court for the Southern District
of Texas to hire Huron Consulting Services, LLC and designate Ryan
Bouley as chief restructuring officer.
Huron and the CRO will render these services:
a. Overseeing the daily management and operational affairs of
the Debtors in accordance with the Debtors' by-laws and in
compliance with applicable laws;
b. Reporting to the board of directors or restructuring
committee and, together with the Debtors' existing management,
being responsible for:
i. assisting management and the Board, as requested, in
addressing internal process matters, such as accounting system
cut-offs, and other matters relating to the proposed restructuring;
ii. assisting in obtaining and presenting information
required by internal or external parties in interest, including the
Court, the Office of the United States Trustee, and any official
committees appointed in the Chapter 11 Cases, if any;
iii. assisting in the preparation of schedules of assets and
liabilities, statements of financial affairs, monthly operating
reports, and other financial reporting requirements related to the
restructuring;
iv. preparing wind down liquidation analyses as requested to
facilitate the filing of a disclosure statement and plan of
reorganization or liquidation;
v. preparing the cash flow budget, managing liquidity and
cash flow forecasting, and modeling go-forward financial forecasts
and projections;
vi. facilitating information flow related to the refinancing
or sale process with the Debtors' advisors;
vii. collaborating and coordinating with all the Debtors'
advisors;
viii. providing additional services as may be requested from
time to time subject to a written agreement as to scope and fees;
and
ix. performing other work, as authorized by the Board,
acceptable to Huron.
The firm will charge these hourly fees:
Managing Director $975 to $1315
Senior Director $920 to $950
Director $700 to $800
Manager $600
Associate $500
Huron received a $150,000 retainer deposit on or about June 1, an
$83,816.39 retainer deposit on or about June 30, and a $100,000
retainer deposit on or about July 5. As of the petition date, the
balance of the Retainer was $216,521.24.
Ryan Bouley, a partner at Huron, disclosed in a court filing that
his firm is a "disinterested person" pursuant to Section 101(14) of
the Bankruptcy Code.
The CRO can be reached at:
Ryan Bouley
Huron Consulting Services, LLC
520 Ellicott Street, Suite 320
Buffalo, NY 14203
Phone: (312) 583-8700
About Alpine Summit Energy Partners
Alpine Summit Energy Partners Inc. and its affiliates develop, own,
and operate oil and gas properties in several formations in Texas.
Alpine Summit Energy Partners and its affiliates, including HB2
Origination, LLC, sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 23-90739) on July
5, 2023. In the petition filed by Craig Perry, CEO and Chairman of
Alpine Summit Energy Partners' Board of Directors, Alpine Summit
Energy Partners estimated assets up to $50,000 and liabilities
between $500,000 and $1 million. Affiliate Ageron Energy II, LLC
estimated $100 million to $500 million in assets and $1 million to
$10 million in liabilities. Affiliate HB2 Origination, LLC
estimated $100 million to $500 million in assets and $50 million to
$100 million in liabilities.
Judge David R. Jones oversees the cases.
The Debtors tapped Porter Hedges, LLP as counsel; Houlihan Lokey
Capital, Inc. as investment banker; and Huron Consulting Services,
LLC as financial advisor. Kroll Restructuring Administration, LLC
is the claims agent.
The U.S. Trustee for Region 7 appointed an official committee to
represent unsecured creditors in the Debtors' Chapter 11 cases. The
committee tapped Reed Smith, LLP as bankruptcy counsel and Huron
Consulting Services, LLC as restructuring advisor. Ryan Bouley of
Huron serves as chief restructuring officer.
AMERICAN EAGLE: L. Todd Budgen Named Subchapter V Trustee
---------------------------------------------------------
The U.S. Trustee for Region 21 appointed L. Todd Budgen, Esq., as
Subchapter V trustee for American Eagle Decorating, Inc.
Mr. Budgen will be paid an hourly fee of $400 for his services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. Budgen declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
L. Todd Budgen, Esq.
P.O. Box 520546
Longwood, FL 32752
Telephone Number: (407) 232-9118
Email: Todd@C11Trustee.com
About American Eagle
American Eagle Decorating, Inc. filed a petition under Chapter 11,
Subchapter V of the Bankruptcy Code (Bankr. M.D. Fla. Case No.
23-03213) on Aug. 9, 2023, with as much as $50,000 in assets and
$100,001 to $500,000 in liabilities.
Jeffrey Ainsworth, Esq., at Bransonlaw, PLLC represents the Debtor
as bankruptcy counsel.
AMERIFIRST FINANCIAL: Case Summary & 30 Top Unsecured Creditors
---------------------------------------------------------------
Two affiliates that concurrently filed voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code:
Debtor Case No.
------ --------
Phoenix 1040 LLC 23-11239
1550 McKelleps Road
Suite 117
Mesa, AZ 85203
AmeriFirst Financial, Inc. 23-11240
1550 McKelleps Road
Suite 117
Mesa, AZ 85203
Business Description: AmeriFirst is a mid-sized independent
mortgage company.
Chapter 11 Petition Date: August 24, 2023
Court: United States Bankruptcy Court
District of Delaware
Judge: Hon. Thomas M. Horan
Debtors' Counsel: Laura Davis Jones, Esq.
PACHULSKI STANG ZIEHL & JONES LLP
919 North Market Street
17th Floor
Wilmington, DE 19801
Tel: 302-652-4100
Email: ljones@pszjlaw.com
Each Debtor's
Estimated Assets: $50 million to $100 million
Each Debtor's
Estimated Liabilities: $50 million to $100 million
The petitions were signed by T. Scott Avila as chief restructuring
officer.
Fulll-text copies of the petitions are available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/PFKALEQ/Phoenix_1040_LLC__debke-23-11239__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/PDHAK3Q/AmeriFirst_Financial_Inc__debke-23-11240__0001.0.pdf?mcid=tGE4TAMA
Consolidated List of Debtors' 30 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
1. RCP Credit Bond Debt $17,900,893
Opportunities Fund
Loans SPV (Fund III), L.P.
590 Madison Ave.
Floor 29
New York, NY 10022
Peter Aberg
Email: Peter.aberg@reverencesapital.com
2. RCP Customized Credit Fund Bond Debt $5,966,964
(FUnd IV-A), L.P.
590 Madison Ave.
Floor 29
New York, NY 10022
Peter Aberg
Email: Peter.aberg@reverencesapital.com
3. Wells Fargo Bank, N.A. Trade Debt $1,086,315
420 Montgomery St.
San Francisco, CA 94104
4. US Bank Trade Debt $463,165
PO Box 1950
St. Paul, MN 55101
5. Lakeview Loan Trade Debt $431,045
Servicing, LLC
4425 Ponce De Leon
MS 5-251
Coral Gables, FL 33146
6. Farhang and Medcoff Professional $425,166
4201 N 24th St. Services
Phoenix, AZ 85016
7. Truist Bank Trade Debt $417,538
214 N Tryon St.
Suite 3
Charlotte, NC 28202
8. Paragon Micro Inc. Trade Debt $369,975
1711 W Green Greentree Dr.
Tempe, AZ 85284
9. JPMCB Trade Debt $339,942
270 Park Ave.
New York, NY 10017
10. Kasowitz Benson Professional $187,386
Torres LLP Services
1633 Broadway
New York, NY 10019
11. CIT Equipment Lease $167,689
75 N Fair Oaks Ave.
Suite C
Pasadena, CA 91103
12. Total Expert Trade Debt $166,264
1600 Utica Ave. S
Minneapolis, MN 55416
13. Quarles & Brady LLP Professional $142,077
2 N Central Ave. #3 Services
Phoenix, AZ 85004
14. United Healthcare Employee $103,454
9700 Health Care LN Benefits
Minnetonka, MN 55343
15. Tracy Kearns Profit Sharing $102,365
[Address Redacted]
16. Phoenix Arena Trade Debt $95,608
Development, LP
201 E Jefferson St.
Phoenix, AZ 85004
17. El Camino Real Building Real Property $93,000
Lease
18. The Law Office of Jeff Professional $85,463
A. George, APC Services
14071 Peyton Dr.
#2710
Chino Hills, CA 91709
19. DB Trust Co. Americas Trade Debt $76,530
1761 E St Andrew Place
Santa Ana, CA 92705
20. Optimal Blue, LLC Trade Debt $71,896
5340 Legacy Dr.
Bldg 2
2nd Floor
Plano, TX 75024
21. Arthur J. Gallagher Trade Debt $66,367
Risk Management Services
333 E Osborn Rd.
Suite 100, 270, and 300
Phoenix, AZ 85012
22. Assimilate Solutions Trade Debt $62,432
Tower 49
12 E 49th St.
34th Floor
New York, NY 10017
23. ARIVS Trade Debt $44,150
1930 N Arboleda Rd
Mesa, AZ 85213
24. Experian Trade Debt $40,677
25. Mourier Land Real Property $40,000
Investment Corporation Lease
1430 Blue Oaks Blvd.
Suite 190
Roseville, CA 95747
26. ClearCompany HRM Trade Debt $37,290
200 Clarendon St.
49th Floor
Boston, MA 02116
27. Cousins Fund II Real Property $33,347
Phoenix III, LLC Lease
3800 N Central Ave.
Suite 460
Phoenix, AZ 85012
28. Mortgage Coach Trade Debt $30,625
PO Box 112
Corona, CA 92878
29. Floify Trade Debt $30,601
1630A 30th St.
Suite 120
Boulder, CO 80301
30. Lane Powell Professional $30,047
1420 5th Ave. Services
Suite 4200
Seattle, WA 98101
ANAGRAM HOLDINGS: Fitch Lowers LongTerm Issuer Default Rating to C
------------------------------------------------------------------
Fitch Ratings has downgraded ratings for Anagram Holdings, LLC and
Anagram International Inc., including their Long-Term Issuer
Default Ratings (IDRs), which have been downgraded to 'C' from
'CCC' following the company's announcement that it has skipped its
August interest payment and entered a 30-day cure period. Fitch has
also removed Anagram's ratings from Rating Watch Evolving.
Anagram's ongoing credit profile reflects continued business
pressure, high leverage and growing refinancing risk, with its ABL
revolver maturing in May 2024 and its first and second lien notes
maturing in August 2025 and August 2026, respectively. The credit
profile also reflects ongoing uncertainty related to the timing
(and the impact) of bankruptcy emergence of Anagram's parent, Party
City Holdco Inc., as well as uncertainties around its capital
structure given upcoming maturities.
KEY RATING DRIVERS
Election of Non-Payment: In an 8-K filing on Aug. 21, 2023, Anagram
announced it had elected to skip its August 2023 interest payment
due on its $125 million first lien secured notes maturing August
2025. The company has entered into a 30-day grace period and a
forbearance agreement with a majority of its first and second lien
noteholders to negotiate potential transactions.
Anagram's credit profile has recently been pressured by continued
weak results and the overhang of its parent company Party City's
somewhat extended bankruptcy process. Consequently, the outcome of
the 30-day period could be a default, which could include a
distressed debt exchange (DDE).
Small Scale, Concentrated Customer Base: Anagram's scale is
relatively small, with a helium shortage and operating pressures at
its main customer (Party City) leading to sales potentially
declining to the mid $100 million range in 2023. This compares with
a peak of over $200 million in 2021 when pandemic restrictions
resulted in more stay-at-home gatherings. In addition to its small
scale, Anagram has customer concentration, with its parent company
(Party City) representing around 35%-40% of revenues.
Operating Challenges in 2023: A global helium shortage has reduced
demand for Anagram's products since 2022, leading to declining
sales and profitability. Anagram's EBITDA margins could be in the
low double-digit range in 2023 relative to the 20% range in 2020
and 2021, before improving to the mid to high teen range in 2024
and beyond, in line with improving helium supply, which could
support increased demand. Fitch projects Anagram could generate
negative FCF in 2023 driven primarily by the decline in EBITDA, and
the company will likely need to rely on the limited capacity on its
$15 million ABL revolver (which matures in May 2024) in order to
finance the liquidity shortfall.
High Leverage and Growing Refinancing Risk: Fitch expects Anagram's
EBITDA leverage could be around 15x in 2023 due to a continued
decline in EBITDA (from 2022 levels in the $30 million range)
before improving modesty to the low teen range in 2024, on some
EBITDA recovery. Anagram's ABL credit facility matures in May 2024,
with maturities of its first and second lien notes following in
2025 and 2026.
Given the ongoing bankruptcy proceeding at Anagram's parent, which
Fitch believes complicates the company's ability to refinance its
debts, and the rapidly approaching maturities at Anagram, there is
uncertainty around the structure of Anagram's near-term and
long-term capital structure. Fitch believes that unless there is a
material recovery in operations in the near term, there is a high
likelihood the company could engage in some form of distressed
exchange to address its maturities.
Parent Company in Bankruptcy: While a parent/subsidiary
relationship exists between Anagram and Party City, Anagram's IDR
is mainly based on its standalone credit profile. The analytical
overlay section of Fitch's criteria allows for wider notching
between parent and subsidiary during extreme situations such as
when a parent is in bankruptcy and the subsidiary continues to
operate outside of bankruptcy.
Assuming Party City emerges from bankruptcy and Anagram avoids a
near-term default, Fitch would re-evaluate the linkage
considerations for Party City and Anagram to determine the
relationship between the two entities. Party City's successful
emergence from bankruptcy could result in increased cash flow due
to reduced interest expense, enabling it to it to invest in growth.
While this could have a positive impact on Anagram, Party City's
operations have continued to face pressures in 2023.
DERIVATION SUMMARY
Anagram's 'C' ratings reflect the company's entry into a 30-day
cure period following the non-payment of its August interest
obligation for its first lien secured notes.
Anagram's ongoing credit profile reflects continued business
pressure, high leverage and growing refinancing risk, with its ABL
revolver maturing in May 2024 and its first and second lien notes
maturing in August 2025 and August 2026, respectively. The credit
profile also reflects ongoing uncertainty related to the timing
(and the impact) of bankruptcy emergence of Anagram's parent, Party
City Holdco Inc., as well as uncertainties around its capital
structure given upcoming maturities.
Anagram compares with similarly rated peer Rite Aid Corporation
(rated at Anagram's prior level of CCC), whose structure looks
increasingly unsustainable given ongoing operational challenges as
the company approaches its 2025 maturities. Unlike Anagram, Rite
Aid's ample liquidity of well over $1 billion under its revolver,
rich asset base of pharmaceutical inventory and prescription files,
somewhat mitigates the heightening refinancing risk.
KEY ASSUMPTIONS
- Fitch expects revenue declines in the high-teen to mid-to-low 20%
range in 2023 toward the mid-$100 million range, with inflationary
pressures and high helium prices and shortages driving the decline
in demand. Fitch expects Anagram's revenue could grow in the high
single digit to low double-digit range in 2024 and thereafter
driven by improving helium supply;
- Fitch expects EBITDA margins decline to the low double-digit
range in 2023 as a result of higher costs and declining demand,
from around 16% in 2022. Margins could improve to the mid to high
teen range in 2024 and thereafter driven by top line growth and
improving input and supply chain costs;
- Fitch expects FCF could be negative in 2023, driven primarily by
the decline in EBITDA. In 2024, FCF could be break-even, driven by
improving EBITDA.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to a
positive rating action/upgrade:
- An upgrade from the 'C' level would occur if Anagram satisfies
its interest obligations prior to completion of the grace period.
Factors that could, individually or collectively, lead to a
negative rating action/downgrade:
- The IDR will be downgraded to 'D' if a default or restructuring
occurs.
LIQUIDITY AND DEBT STRUCTURE
Limited Liquidity: Anagram's liquidity is comprised of minimal cash
on hand, and limited availability on its $15 million ABL facility
that matures in May 2024. Fitch expects the company could generate
negative FCF in 2023, driven primarily by the decline in EBITDA,
which the company should be able to finance with liquidity on hand.
Anagram's debt is composed of drawings on its revolver, around $125
million in first-lien secured notes due August 2025 and around $103
million in second-lien secured notes due August 2026.
Fitch's recovery analysis for Anagram is based on a going concern
value of approximately $150 million, versus approximately $60
million from an orderly liquidation of assets, which is comprised
of receivables, inventory and manufacturing assets. Post default
EBITDA is estimated at around $30 million, which compares with
approximately $38 million in EBITDA on around $200 million of
revenue through as of the LTM ending Sept. 30, 2022 (based on Party
City's public filings).
The $30 million going concern EBITDA represents the scenario of a
loss of revenue from some of Anagram's largest retail and
distributor customers, yielding around $150 million in revenue,
offset by some expense management to generate 20% EBITDA margin (in
line with historical levels). Fitch assumes Anagram could fetch a
5x multiple, at the low end of the 5x-7x exit multiples based on
Fitch's consumer products bankruptcy studies, recognizing the
business' strong market share and relatively stable category over
the long term, offset by its small scale and recent operating
challenges.
After deducting 10% for administrative claims, the remaining $135
million would lead to outstanding recovery prospects (91%-100%) for
the $15 million ABL (assumed $11 million drawn) and approximately
$125 million first lien secured notes, the latter of which is rated
'CCC'/'RR1'. The second lien secured notes (around $103 million
outstanding) would be expected to have poor recovery prospects
(0%-10%), and are thus rated 'C'/'RR6'.
ISSUER PROFILE
Anagram is a leader in the design and manufacturing of balloons and
party products. Anagram Holdings, LLC is a wholly owned subsidiary
of Party City Holdco, Inc. (the leading party-supply retailer in
the U.S), which generates around 35% to 40% of Anagram's revenues.
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.
Entity/Debt Rating Recovery Prior
----------- ------ -------- -----
Anagram
International Inc. LT IDR C Downgrade CCC
senior secured LT CCC Downgrade RR1 B
Senior Secured
2nd Lien LT C Downgrade RR6 CC
Anagram Holdings,
LLC LT IDR C Downgrade CCC
senior secured LT CCC Downgrade RR1 B
Senior Secured
2nd Lien LT C Downgrade RR6 CC
BIG BOY TOYS: Robert Matson Named Subchapter V Trustee
------------------------------------------------------
The U.S. Trustee for Region 21 appointed Robert Matson, Esq., at
Akin, Webster & Matson, PC, as Subchapter V trustee for Big Boy
Toys II, LLC.
Mr. Matson will be paid an hourly fee of $300 for his services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. Matson declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Robert M. Matson
P.O. Box 309
Macon, GA 31202
Phone: (478) 742-1889
Email: rmatson@akin-webster.com
About Big Boy Toys
Big Boy Toys II, LLC is the owner of real estate property located
at 3050 N. Columbia St., Milledgeville, Ga., valued at $275,000.
The Debtor filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. M.D. Ga. Case No. 23-51073) on Aug. 9,
2023, with $1,811,500 in assets and $1,743,250 in liabilities. John
T. Stevens, IV, sole member, signed the petition.
Judge James P. Smith oversees the case.
Daniel L. Wilder, Esq., at Emmett L Goodman Jr. LLC represents the
Debtor as legal counsel.
BLACKLIGHT DETAIL: Chris Quinn Named Subchapter V Trustee
---------------------------------------------------------
The U.S. Trustee for Region 7 appointed Chris Quinn as Subchapter V
trustee for Blacklight Detail, LLC.
Mr. Quinn will be paid an hourly fee of $400 for his services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. Quinn declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Chris Quinn
26414 Cottage Cypress Lane
Cypress, TX 77433
Phone: 713-498-8500
Email: chris.quinn2021@outlook.com
About Blacklight Detail
Blacklight Detail, LLC filed a petition under Chapter 11,
Subchapter V of the Bankruptcy Code (Bankr. S.D. Texas Case No.
23-33016) on Aug. 7, 2023, with $100,001 to $500,000 in both assets
and liabilities.
Judge Jeffrey P. Norman oversees the case.
Susan Tran Adams, Esq., at Tran Singh, LLP represents the Debtor as
legal counsel.
C.W. KELLER: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------
Two affiliates that concurrently filed voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code:
Debtor Case No.
------ --------
C.W. Keller & Associates, LLC 23-11357
29 Munroe Street
Newburyport, MA 01950
C.W. Keller Holding Company, Inc. 23-11358
29 Monroe Street
Newburyport, MA 01950
Business Description: CW Keller is a fabrication and design
engineering firm specializing in custom
millwork, composites and concrete form
systems.
Chapter 11 Petition Date: August 24, 2023
Court: United States Bankruptcy Court
District of Massachusetts
Judge: Hon. Christopher J. Panos
Debtors' Counsel: David B. Madoff, Esq.
MADOFF & KHOURY LLP
124 Washington Street, Suite 202
Foxborough, MA 02035
Tel: 508-543-0040
Fax: 508-543-0020
Email: alston@mandkllp.com
C.W. Keller & Associates'
Total Assets: $7,932,679
C.W. Keller & Associates'
Total Liabilities: $11,825,481
C.W. Keller Holding's
Total Assets: $0
C.W. Keller Holding's
Total Liabilities: $4,500,000
The petitions were signed by Shawn Keller as manager.
Full-text copies of the petitions containing, among other items,
lists of the Debtors' 20 largest unsecured creditors are available
for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/XKKOJTI/CW_Keller__Associates_LLC__mabke-23-11357__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/X7MHKWQ/CW_Keller_Holding_Company_Inc__mabke-23-11358__0001.0.pdf?mcid=tGE4TAMA
CALCEUS ACQUISITION: S&P Rates $340MM Senior Secured Term Loan 'B'
------------------------------------------------------------------
S&P Global Ratings assigned its 'B' issue-level rating to Calceus
Acquisition Inc.'s $340 million senior secured term loan due 2028.
The recovery rating is '4', reflecting S&P's expectation for
average (30%-50%; rounded estimate 45%) recovery in the event of a
payment default.
The company used the net proceeds from the term loan issuance to
repay the $290 million term loan B ($250 million outstanding) due
2025 and $75 million senior secured notes due 2025. The transaction
is roughly leverage neutral. Total debt outstanding pro forma at
the close of the transaction was about $340 million.
S&P said, "All of our existing ratings on the company, including
our 'B' issuer credit rating, are unchanged by the transaction. The
outlook is stable. The increase in consumer mobility including
returning to office, business travel, and social activities have
driven sales and EBITDA improvement."
The company has successfully introduced new products across dress,
sport, and casual styles to diversify its product portfolio and to
cater to consumer trends. Adjusted leverage at the end of fiscal
2023 improved to 3.6x. Free operating cash flow (FOCF) was below
our expectation and slightly negative for the same period.
S&P said, "We could take a negative rating action if operating
performance starts to deteriorate and FOCF remains negative. We
forecast leverage around 3.6x and EBITDA interest coverage around
2.5x at the end of fiscal 2024."
CENTURY AIR: Court OKs Cash Collateral Access Thru Sept 25
----------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Texas,
Houston Division, authorized Century Air Solutions, LLC to use cash
collateral on an interim basis in accordance with the budget, with
a 10% variance, through September 25, 2023.
A search in the Texas Secretary of State shows that allegedly
secured positions is held by Community Bank of Texas, N.A.
As adequate protection for the use of cash collateral, all
creditors are granted replacement liens on all post-petition cash
collateral and post-petition acquired property to the same extent
and priority they possessed as of the Petition Date.
A copy of the motion is available at https://urlcurt.com/u?l=XBNs9V
from PacerMonitor.com.
A copy of the budget is available at https://urlcurt.com/u?l=shtAPl
from PacerMonitor.com.
The Debtor projects $60,000 in cash receipts and $55,173 in cash
disbursements for 30 days.
About Century Air Solutions, LLC
Century Air Solutions, LLC provides heating, air condition
installation, repair and maintenance services.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Tex. Case No. 23-33123) on August 17,
2023. In the petition signed by Phat Bui, manager, the Debtor
disclosed $523,162 in assets and $1,119,313 in liabilities.
Judge Eduardo V. Rodriguez oversees the case.
Robert C. Lane, Esq., at THE LANE LAW FIRM, represents the Debtor
as legal counsel.
CHESANING MFG: Richardo Kilpatrick Named Subchapter V Trustee
-------------------------------------------------------------
The U.S. Trustee for Regions 3 and 9 appointed Richardo Kilpatrick,
Esq., at Kilpatrick & Associates, P.C. as Subchapter V trustee for
Chesaning Mfg. Co. Inc.
Mr. Kilpatrick will be paid an hourly fee of $375 for his services
as Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. Kilpatrick declared that he is a disinterested person according
to Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Richardo I. Kilpatrick, Esq.
Kilpatrick & Associates, P.C.
903 N. Opdyke Rd., Ste. C.
Auburn Hills, MI 48326
Phone: (248) 377-0700
Fax: (248) 377-0800
Email: rkilpatrick@kaalaw.com
About Chesaning Mfg. Co.
Chesaning Mfg. Co., Inc. is a custom machining, fabrication and
assembly partner that works with aerospace, defense, and niche
manufacturers. It is based in Chesaning, Mich.
Chesaning Mfg. filed a petition under Chapter 11, Subchapter V of
the Bankruptcy Code (Bankr. E.D. Mich. Case No. 23-20898) on Aug.
8, 2023, with up to $500,000 in assets and up to $10 million in
liabilities. Christophor M. Soule, sole shareholder and president,
signed the petition.
Judge Daniel S. Opperman oversees the case.
Zachary R. Tucker, Esq., at Winegarden, Haley, Lindholm, Tucker and
Himelhoch, PLC represents the Debtor as legal counsel.
CHOSHEN ISRAEL: Seeks to Hire the Tirelli Law Group as Counsel
--------------------------------------------------------------
Choshen Israel Group LLC seeks approval from the U.S. Bankruptcy
Court for the Southern District of New York to employ the Tirelli
Law Group as counsel.
The firm will render these services:
(a) advise the Debtor concerning the conduct of the
administration of this bankruptcy case;
(b) advise and prepare all necessary applications and motions
required to resolve the pending controversy concerning the assets
the Debtor lists on its Chapter 11 schedules;
(c) advise and prepare all necessary applications and motions
required to resolve the certain unsecured claims;
(d) prepare all necessary applications and motions as required
under the Bankruptcy Code, Federal Rules of Bankruptcy Procedure,
and Local Bankruptcy Rules;
(e) prepare a disclosure statement and plan of reorganization
or liquidation; and
(f) perform all other legal services that are necessary to the
administration of the case.
The hourly rates of the firm's counsel and staff are as follows:
Linda Tirelli, Partner $600
Associate attorneys $400
Paralegals $200
The firm received a retainer of $40,000 from a third party.
Linda Tirelli, Esq., an attorney at the Tirelli Law Group,
disclosed in a court filing that the firm is a "disinterested
person" as that term is defined in section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
Linda M. Tirelli, Esq.
Tirelli Law Group, LLC
50 Main Street, Suite 1265
White Plains, NY 10606
Telephone: (914) 732-3222
Facsimile: (914) 517-2696
Email: LTirelli@tirellilawgroup.com
About Choshen Israel Group
Choshen Israel Group, LLC sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 23-35636) on Aug. 2,
2023. In the petition signed by Lawrence Katz, member, the Debtor
disclosed up to $50,000 in assets and up to $10 million in
liabilities.
Judge Cecelia G. Morris oversees the case.
Linda M. Tirelli, Esq., at Tirelli Law Group, LLC serves as the
Debtor's as legal counsel.
DELTA AIR: S&P Upgrades ICR to 'BB+', Outlook Positive
------------------------------------------------------
S&P Global Ratings upgraded Delta Air Lines Inc. to 'BB+' from
'BB'. S&P also raised most of its issue-level ratings by one notch,
due to the upgrade of the company.
The positive outlook reflects the increased potential for an
upgrade within the next 12 months, as S&P believes Delta could
generate and sustain funds from operations (FFO) to debt firmly
above 30%.
S&P said, "We believe Delta is on track to meaningfully improve its
credit measures in 2023, with further strengthening anticipated in
2024.Our upgrade of Delta follows material improvement in the
company's operating results in the first half of 2023 and upward
revision to our estimated credit measures for 2023 and 2024. The
company, along with its mainline peers, has benefited from
continuing strong passenger airline demand and industrywide
capacity constraints that have led to full planes and high fares.
Delta is on pace to generate sharply higher earnings and cash flow
in 2023, led by capacity growth and steady operating margin
expansion. Higher-than-expected free cash flow is also assumed to
accelerate debt repayment through next year and contribute to
prospective credit measures that are strong for the current rating
and less sensitive to cash flow volatility.
"We estimate Delta will generate an FFO to debt ratio of about 30%
this year, which is well above our previous upside rating threshold
of over 20%. S&P Global Ratings-adjusted debt to EBITDA is expected
at around 3x. For 2024, we believe the company can achieve further
improvement in its core credit measures in a more normalized growth
environment from what has been experienced over the past few years.
These estimates are only modestly stronger than our previous
expectations, but we now have much greater conviction that they are
achievable. Specifically, S&P Global economists no longer forecast
a U.S. economic recession in 2023--which we viewed as a key source
of risk and uncertainty to our earnings and cash flow assumptions.
In addition, Delta's FFO to debt was 25% at the end of
second-quarter 2023 (trailing 12 months), booking trends remain
strong into the fall, and the company publicly revised its guidance
positively for various financial measures for the full year.
"The outlook for U.S. network airline market conditions remains
positive. We expect travel demand to remain favorable, led by
long-haul international traffic growth in 2023 that lagged the
domestic recovery due to travel restrictions. We continue to
believe pent-up demand for passenger travel remains following the
pandemic that has yet to be realized by the company (and its U.S.
mainline peers). In addition, industry supply constraints (namely a
shortage of trained pilots, but also air traffic control,
maintenance capacity, and new aircraft delivery delays) are likely
to persist through 2024. Limitations on airline capacity expansion
should support continuing high fares this year, but also temper
potential downside to profitability in the event of unexpected
future weakening in demand.
"The positive outlook reflects our expectation for Delta to
generate further improvement in its credit measures through 2024,
including FFO to debt of at least 30%. We believe the company will
generate sharply higher earnings and cash flow in 2023, led by a
meaningful increase in its passenger capacity and margin expansion.
In addition, we assume annual free cash flow will be allocated
toward further material debt reduction.
"We could raise our rating within the next 12 months if we expect
Delta to generate FFO to debt firmly above 30% on a sustained
basis. In this scenario, we would expect the company to improve its
margins at least in line with our estimates and allocate most of
its free cash flow toward debt reduction through 2024. We believe
lower gross debt levels would reduce the sensitivity of its credit
measures to future earnings volatility and contribute to credit
measures close to the average achieved in the years just prior to
the start of the pandemic.
"We could revise the outlook to stable if, over the next 12 months,
we expect Delta will generate FFO to debt below 20% in 2023 and
2024. This might occur from higher-than-expected costs and the
effects of a weaker-than-expected U.S. economy that limit growth in
its capacity, revenues, and margins. In this scenario, we believe
Delta would also generate reduced free cash flow available for debt
repayment, which could stall improvement in its financial risk
profile."
DIAMANTE ENTERPRISES: Seeks to Tap Keller Williams Philly as Broker
-------------------------------------------------------------------
Diamante Enterprises LLC seeks approval from the U.S. Bankruptcy
Court for the Southern District of Florida to employ Keller
Williams Philly as its real estate broker.
The Debtor needs a broker to assist in the sale of its real
property located at 2943 W. Master Street, Philadelphia,
Pennsylvania.
Keller Williams will receive 3 percent of the gross purchase price
and $495 in connection with the sale of the property.
Chardae Taylor, a real estate agent at Keller Williams Philly,
disclosed in a court filing that the firm is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
Chardae Taylor
Keller Williams Philly
728 S. Broad Street, 3rd Floor
Philadelphia, PA 19146
Telephone: (215) 607-6007
Email: chardae@phillyliving.com
About Diamante Enterprises
Diamante Enterprises, LLC, a company in Weston, Fla., filed its
voluntary petition for Chapter 11 protection (Bankr. S.D. Fla. Case
No. 23-14383) on June 5, 2023, with $100,000 to $500,000 in assets
and $1 million to $10 million in liabilities. Danielle Parker,
president, signed the petition.
Judge Scott M. Grossman oversees the case.
Chad T. Van Horn, Esq., at Van Horn Law Group, P.A. serves as the
Debtor's bankruptcy counsel.
DISCOUNT FOOD: Geron Yann Named Subchapter V Trustee
----------------------------------------------------
The U.S. Trustee for Region 2 appointed Geron Yann, Esq., at Geron
Legal Advisors, LLC as Subchapter V trustee for Discount Food
Center, LLC.
Mr. Yann will be paid an hourly fee of $825 for his services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. Yann declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Geron Yann, Esq
Subchapter V Trustee
c/o Geron Legal Advisors LLC
370 Lexington Avenue, Suite 1101
New York, NY 10017
Phone: (646) 560-3224
Email: ygeron@geronlegaladvisors.com
About Discount Food Center
Discount Food Center, LLC filed a petition under Chapter 11,
Subchapter V of the Bankruptcy Code (Bankr. S.D.N.Y. Case No.
23-11272) on Aug. 10, 2023, with $50,001 to $100,000 in assets and
up to $50,000 in liabilities.
Judge John P. Mastando III oversees the case.
Thomas A. Farinella, Esq., at the Law Offices of Thomas A.
Farinella, PC represents the Debtor as bankruptcy counsel.
DUCKWORTH LLC: Crystal Thornton-Illar Named Subchapter V Trustee
----------------------------------------------------------------
The U.S. Trustee for Regions 3 and 9 appointed Crystal
Thornton-Illar, Esq., at LeechTishman as Subchapter V trustee for
Duckworth LLC.
Ms. Thornton-Illar will be paid an hourly fee of $385 for her
services as Subchapter V trustee and will be reimbursed for work
related expenses incurred.
Ms. Thornton-Illar declared that she is a disinterested person
according to Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Crystal H. Thornton-Illar, Esq.
LeechTishman
525 William Penn Place, 28th Floor
Pittsburgh, PA 15219
Phone: 412.261.1600
Email: cthornton-Illar@leechtishman.com
About Duckworth LLC
Duckworth LLC is an S-corporation that does business as a Minuteman
Press franchise in Western Pennsylvania.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. W.D. Pa. Case No. 23-21692) on Aug. 9,
2023, with up to $50,000 in assets and $100,001 to $500,000 in
liabilities. Steven E. Duckworth, president, signed the petition.
Christopher M. Frye, Esq., at Steidl & Steinberg, P.C., represents
the Debtor as legal counsel.
EARTHSTONE ENERGY: Fitch Puts 'B+' LongTerm IDR on Watch Positive
-----------------------------------------------------------------
Fitch Ratings has placed the Long-Term Issuer Default Ratings
(IDRs) and all issue-level ratings of Earthstone Energy, Inc. and
Earthstone Energy Holdings, LLC (collectively ESTE) on Rating Watch
Positive (RWP).
The placement on RWP follows the announcement that Permian
Resources Corporation (PR, 'BB-'/RWP) has entered into a definitive
agreement to acquire Earthstone Energy, Inc. in an all-stock
transaction valued at approximately $4.5 billion, including the
assumption of ESTE's debt. The combined company will be one of the
largest producers in the Permian with 400,000 total net acres split
between the Delaware and Midland basins and total production of
approximately 300 Mboepd (46% oil). The transaction is also
expected to materially enhance FCF generation, overall returns and
generate approximately $175 million of identified synergies.
Fitch expects to resolve the Rating Watch upon closing of the
transaction, which is currently expected by year-end 2023. Although
unlikely, Fitch the closing of the transaction and resolution of
the RWP could take longer than six months.
KEY RATING DRIVERS
Credit-Friendly Acquisition: Fitch views the proposed $4.5 billion
transaction favorably given the stock-for-stock exchange between PR
and ESTE at a fixed exchange ratio of 1.446 shares, representing an
8% premium based on the 20-day weighted average share prices. Both
companies' balance sheets are fairly conservative, resulting in
Fitch forecasted pro forma 2024 leverage of 1.1x, which is
consistent with similar-sized peers. The improved pro forma FCF
profile will also allow for continued debt reduction and
accelerated shareholder returns.
Enhanced Permian Footprint: The proposed acquisition will
materially enhance PR's size and scale with pro forma Permian net
acres of approximately 400,000, primarily in the Delaware, total
production of approximately 300 Mboepd (46% oil) and adds
significant core acreage in the Delaware basin which immediately
competes for capital. PR will retain its status as a pure-play
Permian producer which should drive operational improvements,
including improved drilling and completion efficiencies, lower
operating costs and G&A benefits, which should improve overall
returns.
Synergy Potential; Strong FCF: Fitch believes synergies associated
with the deal are modest but achievable by year-end 2024.
Management has identified approximately $175 million of estimated
annual synergies, including $115 million stemming from operational
efficiencies and cost savings, $30 million in G&A synergies and $30
million in cost of capital savings via refinancing opportunities
for ESTE's notes once callable. Fitch estimates that the reduced
cost structure should improve post-base dividend FCF generation to
over $500 million in 2024 at its $70/bbl WTI price assumption.
Standalone Sub-1.5x Leverage; FCF Generation: Fitch's base case
forecasts standalone ESTE 2023 leverage of 1.3x and 2026 leverage
(using its mid-cycle $50/bbl WTI price and $2.75/mcf natural gas
price) also at 1.3x. This allows the company to maintain ample
headroom under Fitch's positive EBITDA leverage sensitivity of
2.0x. Fitch projects approximately $400 million-$450 million of
annual standalone FCF generation in 2023 and 2024, which supports
the reduction of RBL borrowings and total gross debt below $1.5
billion over the next 12 to 18 months. ESTE's FCF benefits from it
not paying a dividend and its nearly zero organic growth capital
spending, which is expected to continue post-close. An inability to
repay RBL borrowings in a timely manner and/or a reduction in the
forecast FCF profile could result in the assignment of a Stable
Outlook.
Adequate Standalone Hedging Profile: Additional FCF visibility is
provided by ESTE's standalone hedging program. Pro forma the Novo
transaction, the program includes approximately 40%-45% of oil
volumes hedged through the remainder of 2023 at an average price of
$78 WTI. The company is also hedging roughly 35% of natural gas
production at an average price of approximately $3.50. Fitch
expects ESTE to layer in additional hedges for 2024 to protect cash
flows, thereby supporting gross debt reduction and the liquidity
profile.
DERIVATION SUMMARY
Standalone ESTE: Pro forma the Novo transaction, ESTE is expected
to produce approximately 130 Mboepd on a standalone basis. This is
slightly larger than Permian peer Callon Petroleum (B+/Stable; pro
forma production of approximately 120 Mboepd) but smaller than
Matador Resources Company (BB-/Stable; 140-145 Mboepd pro forma the
Advanced Energy Partners transaction) and SM Energy Company
(BB-/Stable; 154 Mboepd in 2Q23).
ESTE's 2Q23 Fitch-calculated unhedged cash netback of $22.6/boe
compares favorably across Fitch's aggregate E&P portfolio, which is
consistent with its position in the highly economic Permian Basin.
Compared to similarly sized Permian peers Callon ($27.8/boe),
Matador ($34.3/boe), and SM ($25.7/boe), ESTE's netback are towards
the lower end of the group primarily given its lower oil mix.
Mid-cycle EBITDA leverage profiles among each of these peers are
relatively consistent at around 1.5x.
KEY ASSUMPTIONS
- WTI (USD/bbl) of $75 in 2023, $70 in 2024, $65 in 2025 and $60 in
2026 and $57 thereafter;
- Henry Hub (USD/mcf) of $3.00 in 2023, $3.50 in 2024, $3.00 in
2025 and $2.75 thereafter;
- Base interest rates applicable to the company's outstanding
variable rate debt obligations reflects current SOFR forward
curve;
- Proposed acquisition closes as contemplated at the start of
2024;
- Single-digit production growth throughout the forecast;
- Growth-linked capital expenditures throughout the rating case.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Fitch expects to resolve the RWP upon completion of the
contemplated transactions under proposed terms and favorable
treatment of ESTE debt;
- FCF generation that results in a reduction of RBL borrowings,
improved liquidity and total gross debt at or below $1.5 billion;
- Continued de-risking and operational momentum in the Permian
basin that results in material increase of PDP reserves, inventory
and oil weighting;
- Organic and/or M&A growth increasing production approaching
125Mboped while maintaining unit costs;
- Mid-cycle EBITDA Leverage sustained below 2.0x.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- A shift to negative FCF contributing to diminished liquidity or
utilization of revolver commitment sustained above 65%;
- Failure to maintain a clear, conservative financial and
operational policy;
- Mid-cycle EBITDA Leverage sustained above 2.5x.
LIQUIDITY AND DEBT STRUCTURE
Reduced Standalone Post-Close Liquidity: At 2Q23, ESTE had full
availability under its credit facility and $50 million of cash on
hand. Fitch expects post-close liquidity will decrease as the $1.0
billion purchase price of Novo is expected to be funded with the
company's recently issued 2031 notes and RBL borrowings. Fitch
believes the liquidity profile will improve thereafter due to
reduction of RBL borrowings via FCF generation. The company has
secured $250 million of incremental commitments from its lenders,
which will bring the total elected commitments from $1.45 billion
to $1.75 billion.
ESTE's liquidity profile is further supported by positive annual
FCF through Fitch's forecast period, the company's financial
policy, which does not include dividends; and a lack of maturities
until 2027.
ISSUER PROFILE
Earthstone Energy, Inc. is an independent oil and gas energy
exploration and production company with operations primarily in the
Midland Basin of west Texas and Delaware Basin in New Mexico.
ESG CONSIDERATIONS
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.
Entity/Debt Rating Recovery Prior
----------- ------ -------- -----
Earthstone Energy, Inc. LT IDR B+ Rating Watch On B+
Earthstone Energy
Holdings, LLC LT IDR B+ Rating Watch On B+
senior unsecured LT B+ Rating Watch On RR4 B+
senior secured LT BB+ Rating Watch On RR1 BB+
EDGEWATER CONSTRUCTION: Court OKs Cash Access on Final Basis
------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Florida,
Miami Division, authorized Edgewater Construction Group, Inc. to
use cash collateral on a final basis in accordance with the budget,
with a 10% variance.
As previously reported by the Troubled Company Reporter, on
February 25, 2022, the Debtor and Banesco USA entered into a loan
transaction wherein Banesco provided a $500,000 revolving line of
credit to the Debtor as evidenced by a revolving promissory note
executed by the Debtor in favor of Banesco on even date.
As security for the Banesco Loan, the Debtor granted a blanket lien
upon substantially all of the Debtor's assets as evidenced by the
UCC-1 Financing Statement 202201078862. In addition to the Debtor's
assets, Edgewater 6962 LLC (an entity owned by Ulysses and Dulce
Vazquez) granted Banesco a mortgage and assignment of rents in
certain real property located at 6962 SW 47th Street, Miami, FL
33155.
The Debtor is not aware of the exact current balance on the Banesco
Loan as of the Petition Date but believes it to be approximately
$500,000.
On June 28, 2020, the Debtor obtained a COVID-19 Economic Injury
Disaster Loan from the U.S. Small Business Administration in the
principal amount of $150,000. The EIDL Loan provides for a 30-year
term from the date of the promissory note and bears interest at a
rate of 3.75% per annum.
In connection with the closing of the EIDL Loan, the SBA filed a
form UCC-1 Financing Statement with the Florida Secured Transaction
Registry under File No. 202002560925, which indicates that the SBA
has a perfected interest on all of the Debtor's assets.
The Debtor is not aware of the exact current balance on the EIDL
Loan as of the Petition Date but believes it to be approximately
$155,250.
The Court ruled as adequate protection for the extent of the
Debtor's use of cash collateral, the SBA will have effective as of
the Petition Date: (i) a replacement lien pursuant to 11 U.S.C.
Section 361(2) on and in all property acquired or generated
post-petition by the Debtor to the same extent and priority and of
the same kind and nature as the secured the SBA's prepetition liens
and security interests in the cash collateral. In addition to the
foregoing, the Debtor will continue to pay the monthly payments
included in the Budget to the SBA.
The term of the Budget is from September 1, 2023 through and
including September 30, 2023. Notwithstanding the foregoing, the
Debtor, with the express consent of the SBA and the Subchapter V
Trustee, may extend the term thereof without necessity of further
order of the Court.
A copy of the court's order and the Debtor's budget is available at
https://urlcurt.com/u?l=IdZggn from PacerMonitor.com.
The Debtor projects $322,993 in total expenses for September 2023.
Edgewater Construction Group
Edgewater Construction Group, Inc. is a Miami-based company that
provides general contractor services. The company has been in
business since February 1999.
Edgewater filed its voluntary petition for relief under Chapter 11
of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 23-12217) on
March 22, 2023, with up to $50,000 in assets and $1 million to $10
million in liabilities. Ulysses Vazquez, II, president of
Edgewater, signed the petition.
Judge Laurel M. Isicoff presides over the case.
The Debtor tapped Jacqueline Calderin, Esq., at Agentis, PLLC as
bankruptcy counsel and Touron Law as special construction counsel.
ELESSAR PROPERTIES: Case Summary & Five Unsecured Creditors
-----------------------------------------------------------
Debtor: Elessar Properties, LLC
181 Devine Street
San Jose, CA 95110
Business Description: Elessar is a Single Asset Real Estate
debtor (as defined in 11 U.S.C. Section
101(51B)).
Chapter 11 Petition Date: August 24, 2023
Court: United States Bankruptcy Court
Northern District of California
Case No.: 23-50934
Debtor's Counsel: Stephen L. Burton, Esq.
STEPHEN L. BURTON
16133 Ventura Boulevard, 7th Floor
Encino, CA 91436
Tel: 818-501-5055
Email: steveburtonlaw@aol.com
Estimated Assets: $10 million to $50 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Lynne Bui as manager.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/CEFVF7I/Elessar_Properties_LLC__canbke-23-50934__0001.0.pdf?mcid=tGE4TAMA
List of Debtor's Five Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
1. Icorn Mechanical HVAC Repair $4,430
477 Burke Street
San Jose, CA 95112
Tel: 408-228-1913
2. Liberty Mutual Insurance $1,383
175 Berkeley Street
Boston, MA 02116
Tel: 800-290-8206
3. PG&E Utilities $76,373
Box 997300
Sacramento, CA
95899
4. Recology South Valley Waste Management $7,618
1351 Pacheco Pass Hwy
Gilroy, CA 95020
Tel: 408-842-3358
5. United Mechanical In HVAC $3,500
2185 Oakland Rd
San Jose, CA 95131
Tel: 408-228-1913
ELITE HOME: Aaron Cohen Named Subchapter V Trustee
--------------------------------------------------
The U.S. Trustee for Region 21 appointed Aaron Cohen, Esq., a
practicing attorney in Jacksonville, Fla., as Subchapter V trustee
for Elite Home Health, LLC.
Mr. Cohen will be paid an hourly fee of $300 for his services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. Cohen declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Aaron R. Cohen, Esq.
P.O. Box 4218
Jacksonville, FL 32201
Tel: (904) 389-7277
Email: aaron@arcohenlaw.com
About Elite Home
Elite Home Health, LLC is a provider of home health care services
in Jacksonville, Fla.
The Debtor filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. M.D. Fla. Case No. 23-01863) on Aug. 8,
2023, with $417,800 in assets and $3,686,831 in liabilities.
Brandon Groover, president, signed the petition.
Rehan N. Khawaja, Esq., at the Bankruptcy Law Offices of Rehan N.
Khawaja represents the Debtor as legal counsel.
FORT WAYNE COLD: Douglas Adelsperger Named Subchapter V Trustee
---------------------------------------------------------------
The U.S. Trustee for Region 10 appointed Douglas Adelsperger, Esq.,
as Subchapter V trustee for Fort Wayne Cold Storage, LLC.
Mr. Adelsperger will be paid an hourly fee of $375 for his services
as Subchapter V trustee and will be reimbursed for work related
expenses incurred.
Mr. Adelsperger declared that he is a disinterested person
according to Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Douglas R. Adelsperger, Trustee
1251 N. Eddy St., Suite 200
South Bend, IN 46617
Tel: (260) 407-0909
Email: trustee@adelspergerlawoffices.com
About Fort Wayne
Fort Wayne Cold Storage, LLC filed a petition under Chapter 11,
Subchapter V of the Bankruptcy Code (Bankr. N.D. Ind. Case No.
23-11010) on Aug. 8, 2023, with $100,001 to $500,000 in assets and
$1,000,001 to $10 million in liabilities.
HallerColvin, PC represents the Debtor as legal counsel.
FROGGY FLATS: Gets OK to Hire Deschenes & Associates as Counsel
---------------------------------------------------------------
Froggy Flats, LLC received approval from the U.S. Bankruptcy Court
for the District of Montana to employ Deschenes & Associates Law
Offices as counsel.
The firm will render general counseling and local representation of
the Debtor before the bankruptcy court in connection with this
Chapter 11 case.
The hourly rates of the firm's counsel and staff are as follows:
Gary S. Deschenes, Attorney $400
Paralegals $155
In addition, the firm will seek reimbursement for expenses
incurred.
The firm received a general retainer in the amount of $4,829 from
East Glacier Motel Management, LLC.
Mr. Deschenes disclosed in a court filing that his firm is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
The firm can be reached through:
Gary S. Deschenes, Esq.
Deschenes & Associates Law Offices
309 First Avenue North
P.O. Box 3466
Great Falls, MT 59403
Telephone: (406) 761-6112
Email: gsd@dalawmt.com
About Froggy Flats
Froggy Flats, LLC sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Mont. Lead Case No. 23-40050) on July
18, 2023. In the petition signed by William H. Stewart, member, the
Debtor disclosed up to $1 million in both assets and liabilities.
Judge Benjamin P. Hursh oversees the case.
Gary S. Deschenes, Esq., at Deschenes & Associates Law Offices
serves as the Debtor's counsel.
FULTON MERCER: Seeks Approval to Hire Ray CPA as Accountant
-----------------------------------------------------------
Fulton Mercer Corporation seeks approval from the U.S. Bankruptcy
Court for the Western District of Texas to employ Ray CPA as its
accountant.
The firm will render these services:
(a) organization and structuring of the Debtor's bookkeeping;
and
(b) filing of required statements and reports, tax documents
and the like.
The firm's standard hourly rate is $120 and staff is $96 per hour
for bookkeeping and tax, with a minimum fee of $1644 for tax
services.
In addition, the firm will seek reimbursement for expenses
incurred.
Joshua Ray, CPA, a member at Ray CPA, disclosed in a court filing
that the firm is a "disinterested person" within the meaning of
Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Joshua Ray, CPA
Ray CPA
3000 Joe DiMaggio Blvd., Suite 91
Round Rock, TX 78665
Telephone: (512) 786-2052
About Fulton Mercer Corporation
Fulton Mercer Corporation, a provider of death care services,
sought protection under Chapter 11 of the U.S. Bankruptcy Code
(Bankr. W.D. Tex. Case No. 23-10590) on Aug. 1, 2023. In the
petition signed by Jason Wayne Fulton, president, the Debtor
disclosed up to $10 million in both assets and liabilities.
The Debtors tapped Amy Wilburn, Esq., at Lincoln Goldfinch Law as
counsel and Joshua Ray, CPA, at Ray CPA as accountant.
GENEVER HOLDINGS: Taps O'Sullivan McCormack as Insurance Counsel
----------------------------------------------------------------
Genever Holdings LLC and its affiliates seek approval from the U.S.
Bankruptcy Court for the District of Connecticut to employ
O'Sullivan McCormack Jensen & Bliss PC as special insurance
coverage counsel.
The Debtors wish to retain O'Sullivan McCormack Jensen & Bliss in
place of Saxe Doernberger & Vita as Genever (US)'s special
insurance coverage counsel, effective as of July 27, 2023, to
represent Genever (US) with respect to insurance coverage disputes,
including with respect to Genever (US)'s pending litigation against
American International Group, Inc. (AIG) under Adv. Proc. No.
23-5007 (the AIG Action). In addition, as part of this Application,
Genever (US) requests that the Court approve the substitution of
SDV (i.e., Genever (US)'s current special insurance coverage
counsel) by OMJB, also effective as of July 27, 2023.
At present, the hourly rates for O'Sullivan personnel range from
$125 per hour for paralegal time, $300 per hour for counsel work,
and $350 to $450 for shareholder work.
O'Sullivan provides the following response to the request for
information set forth in Paragraph D.1. of the Larger Case
Guidelines:
Question: Did you agree to any variations from, or alternatives
to, your standard or customary billing arrangements for this
engagement?
Answer: No.
Question: Do any of the professionals included in this
engagement vary their rate based on the geographic location of the
bankruptcy case?
Answer: No.
Question: If you represented the client in the 12 months
prepetition, disclose your billing rates and material financial
terms for the prepetition engagement, including any adjustments
during the 12 months prepetition. If your billing rates and
material financial terms have changed postpetition, explain the
difference and the reasons for the difference.
Answer: Not applicable. O'Sullivan has not previously
represented Genever (US).
Question: Has your client approved your prospective budget and
staffing plan, and, if so, for what budget period?
Answer: Not applicable.
O'Sullivan McCormack Jensen & Bliss is a "disinterested person"
within the meaning of section 101(14) of the Bankruptcy Code, as
modified by section 1107(b), as disclosed in the court filings.
The firm can be reached through:
Michael T. McCormack, Esq.
O'Sullivan McCormack Jensen & Bliss PC
180 Glasonbury Boulevard, Suite 210
Glastonbury, CT 06033
Phone: 860-258-1993
Fax: 860-258-1991
Email: mmccormack@omjblaw.com
About Genever Holdings
Genever Holdings LLC, Ho Wan Kwok, and its affiliates filed a
voluntary petition for relief under Chapter 11 of the Bankruptcy
Code (Bankr. D. Conn. Case No. 22-50073) on Feb. 15, 2022.
Judge Julie A. Manning oversees the cases.
The Debtors tapped Neubert Pepe & Monteith, PC as legal counsel and
Saxe Doernberger & Vita, PC as special insurance coverage counsel.
On July 8, 2022, Luc A. Despins was appointed as trustee in this
Chapter 11 case. The trustee tapped Paul Hastings LLP as legal
counsel and Epiq Corporate Restructuring, LLC as claims and
noticing agent.
GREENWAY HEALTH: Guggenheim SOF Marks $949,622 Loan at 18% Off
--------------------------------------------------------------
Guggenheim Strategic Opportunities Fund has marked its $949,622
loan extended to Greenway Health LLC to market at $697,023 or 73%
of the outstanding amount, as of May 31, 2023, according to
Guggenheim SOF's semi-annual report on Form N-CSR for the period
from December 1, 2022 to May 31, 2023, filed with the Securities
and Exchange Commission.
Guggenheim SOF is a participant in a Bank Loan to Greenway Health
LLC. The loan accrues interes t at a rate of 8.96% (3 Month USD
LIBOR + 3.75%, Rate Floor: 4.75%) per annum. The loan matures on
February 16, 2024.
Guggenheim Strategic Opportunities Fund was organized as a Delaware
statutory trust on November 13, 2006. Guggenheim SOF is registered
as a diversified, closed-end management investment company under
the Investment Company Act of 1940, as amended.
Greenway Health provides ambulatory solutions and services for
electronic health records, practice management, electronic data
interchange, practice analytics, population health, and revenue
cycle management. โ
GRUPO HIMA: Court OKs Cash Use, Rejects DIP Loan Request
--------------------------------------------------------
The United States Bankruptcy Court for the District of Puerto Rico
authorized Grupo HIMA San Pablo, Inc., and its debtor-affiliates to
continue using cash collateral on a limited basis, initially
through the end of August. The Court denied the Debtors' request
to obtain postpetition financing.
The Court said the Debtors may continue using cash collateral on
seven-day intervals but not to exceed 28 days, but must file a
weekly budget of expenses needed, and must include insurance
premiums of current policies as they may become due, and a report
of expenses paid.
On August 16, Grupo HIMA San Pablo and its affiliated entities
filed a motion for post-petition credit and to use cash collateral.
The request was opposed by the Municipal Revenue Collection Center
and the Puerto Rico Fiscal Agency and Financial Advisory.
On August 17, the Debtors filed an emergency motion to use cash
collateral. The CRIM again objected to the request, and so did
Island Healthcare, LLC, the lender.
Although not specifically scheduled to be heard at the August 18
emergency hearing, the parties argued their respective positions.
The Debtors informed that, considering the matters discussed at the
August 18 hearing, an amended request for authorization to use cash
collateral would be filed because the Debtor will be forced to
close operations if the cash collateral request is not approved.
The Court stated at the hearing that it was fully conscious that
the HIMA San Pablo Cases carry public policy considerations as
there may be an effect on providing quality healthcare to the
people of Puerto Rico. The Court also stated that its duty and
responsibility is to apply the law, particularly the Bankruptcy
Code and Rules, to the facts, as they are presented to the court.
These statements reflect "the inherent struggle between the goals
and policies of health care and bankruptcy law that arises when a
health care provider files for bankruptcy protection," citing 1999
Ann. Surv. of Bankr. Law, Norton Annual Survey of Bankruptcy Law,
1999 Edition. Admittedly, "the public policy aspects of health
care may affect the resolution of a health care bankruptcy case,"
the Court said, citing Health L. Prac. Guide ยง 34.22 (2023). There
must be a balancing act between bankruptcy and health care
principles, citing Collier Bankruptcy Practice Guide par.
130.03[7].
According to the Court, "the statements and arguments presented at
the August 18 hearing show that the Debtors do not have the cash to
continue operations and obtain the sale of the assets as an ongoing
business in an orderly manner. If the Court does not authorize the
use of cash collateral or grants the post-petition financing
proposed by the Lender, the hospital facilities must close
operations. However, the closing of a hospital requires careful
planning as there are unique factors which affect a health care
bankruptcy. Clearly, if a health care entity cannot secure
financing or find a potential buyer, closing the business may be
necessary."
On August 20, the Debtors filed an urgent motion requesting the
scheduling of a hearing for August 23 to consider the DIP Financing
and use of cash collateral. The request was granted.
The cases came before the Court on August 23, 2023, to consider the
Urgent Motion of Debtors for Entry of Interim and Final Orders (i)
Authorizing the Debtors to Obtain Postpetition Financing, (ii)
Authorizing the Debtors to Use Cash Collateral, (iii) Granting
Liens and Providing Superpriority Administrative Expense Claims
(iv) Granting Adequate Protection to Prepetition Secured Parties,
(v) Modifying the Automatic Stay, (vi) Scheduling a Final Hearing,
and (vii) Granting Related Relief (hereafter the "DIP and Cash
Collateral Motion") as supplemented and amended on August 21.
Considering health care principles, the Debtors' commitment to
continue operations as a going concern to allow a prompt and
orderly disposition of the health care facilities without
interruption to reduce the loss to or diminution of the estate and
secured Lender's interest in the property, and to continue
providing health services, the Court is moved to exercise its
discretion and authorize the Debtors to use cash collateral on an
interim basis, and for a limited purpose and time. The Court
explained the continued operations of the debtor-health units will
prevent the loss of value of the collateral, lenders' interests,
and will support healthcare public policy for a limited period.
Specifically, the cash collateral used during the interim period
will be equal to a billing of $3,908,000 with operating expenses of
$3,842,000, of which:
-- $2,677,000 are salaries and related to employees,
-- $750,000 are related to physicians,
-- $265,000 are medical supplies, and
-- $150,000 are contract services.
The Debtors are further authorized to use additional cash
collateral funds solely for the payment of insurance premiums and
related expenses, to the extent necessary.
The Court said its Order will not serve as a finding that the
Prepetition Secured Parties are adequately protected and
Prepetition Secured Parties' right to object to the continued use
of cash collateral on any basis or to bring or assert any claim or
defense or seek any other relief in this case or otherwise shall be
fully preserved and will not be waived, impaired, or prejudiced in
any way as a result of this Order.
To the extent of any diminution in the value of the Prepetition
Secured Parties' respective interests in their property collateral
from the Petition Date arising from the use, sale, or lease of such
collateral or the imposition of the automatic stay, that
Prepetition Secured Party is granted a superpriority claim against
the Debtors pursuant to Section 507(b) of the Bankruptcy Code, in
each case, subject to the priorities set forth in the Intercreditor
Agreement. The Court's Order will not constitute a finding as to
the validity or perfection of any pre-petition lien. For all
adequate protection and stay relief purposes throughout the HIMA
San Pablo Cases, the prepetition secured parties shall be deemed to
have requested relief from the automatic stay and adequate
protection as of the Petition Date.
* * *
The Debtors had obtained interim court approval to use cash
collateral and obtain postpetition financing through August 23
hearing.
The Debtors obtained senior secured postpetition financing on a
superpriority basis in the aggregate principal amount of $6
million, pursuant to the terms and conditions of the
Debtor-in-Possession Credit Agreement by and among Grupo HIMA, HIMA
San Pablo Properties, Inc., Centro Mรฉdico Del Turabo, Inc., Jocar
Enterprises, Inc., I.A. Developers Corp., Jerusalen Home Ambulance,
Inc., Host Security Services, Inc., General Contracting Services,
Inc., and CMT Development, LLC, as borrowers, Portal de Caguas,
Inc. and Sabiamed, Inc., as guarantors, Alter Domus (US) LLC, as
administrative agent and collateral agent, and the lenders party
thereto from time to time. $4 million of the DIP facility will be
made available upon the entry of an interim order.
The DIP facility was due and payable six months from the execution
of the DIP Credit Agreement.
The DIP Facility contemplates that the Prepetition First Lien
Obligations (other than Superpriority Term Loans) of each DIP
Lender will be rolled up, and converted into DIP Obligations by
means of a "cashless roll" by each such DIP Lender on a 5:1 basis
based on (i) the amount of DIP Loans actually funded into the DIP
Funding Account (and on such day as the DIP Loans are actually
funded into the DIP Funding Account) plus (ii) the Commitment Fee
due and payable to such DIP Lender under the Closing Date Fee
Letter.
The events of default includes:
(a) The failure to pay principal, interest and other amounts
when and as required by the DIP Credit Agreement;
(b) a Debtor files a motion, without the consent of the
Required Lenders, seeking additional financing under 11 U.S.C.
section 364(d) that is not permitted by section 7.03 of the Credit
Agreement and does not provide for the repayment of the DIP
Facility in full and in cash;
(c) The withdrawal or termination of any stalking horse
agreement, without the consent of the Required Lenders;
(d) The binding, definitive documentation with CRIM with
respect to the CRIM Settlement is (A) amended without the consent
of each Lender or (B) terminated or no longer in force and effect;
and
(e) The failure of the Borrower to satisfy the milestones on
or before the dates specified in the DIP Credit Agreement.
The Debtors require liquidity to cover its payroll obligations, pay
professionals, finance this process and to address any unforeseen
contingencies should they occur.
The Debtors believe that it is in the public interest to preserve
the healthcare services provided by the Debtors to their
communities in Puerto Rico, and the more than three thousand jobs
that provide income for families in Puerto Rico. These Chapter 11
Cases are currently the only option available to the Debtors to
avoid closure of their operations, preserve existing jobs, ensure
that critical healthcare services provided by the Company will not
be interrupted overnight and allow for a long-term solution that
will ultimately preserve healthcare services to the affected
communities in Puerto Rico. To achieve these goals, the Debtors
seek to effectuate a sale of the Company's operations as a going
concern for each of its hospitals and all assets and related
businesses, pursuant to an open and competitive bidding process
aimed to maximize value for their stakeholders and inure to the
benefit of all parties in interest.
The Debtors have an urgent liquidity need, as evidenced by the fact
that the Debtors were unable to cover payroll for the week ending
on August 11, 2023. And, while the Debtors anticipate these Chapter
11 Cases will be brief in duration, liquidity is necessary to
retain their employees and medical professionals and operate their
business as a going concern, which will preserve jobs and maximize
value of the Debtors' assets and address any unforeseen
contingencies should they occur during these Chapter 11 Cases.
As of the Petition Date, the Debtors have outstanding funded debt
obligations in the aggregate principal amount of approximately $248
million, which amount consists of (i) approximately $162 million of
principal amount of Prepetition First Lien Loans; and (ii)
approximately $86 million of principal amount of Prepetition Second
Lien Loans.
Pursuant to the First Lien Credit Agreement, dated as of January
29, 2013, with the Lenders party thereto and the Administrative
Agent, the Loan Parties, Alter Domus (US) LLC, as administrative
agent and collateral agent, and the lenders party thereto from time
to time, the Lenders provided, as applicable, term loans, revolving
loans, swing loans, and letters of credit to the Prepetition
Borrower.
Prior to the Petition Date, pursuant to the Prepetition First Lien
Credit Agreement and the other Prepetition First Lien Loan
Documents, the Prepetition First Lien Lenders made available to the
Co-Borrowers, (a) Term Loans in an aggregate principal amount not
in excess of $149 million, and (b) Revolving Loans in an aggregate
principal amount at any time outstanding not in excess of $14
million.
Pursuant to the Second Lien Credit Agreement, dated as of January
29, 2013 and any other agreements and documents executed or
delivered in connection therewith, among the Loan Parties,
Wilmington Trust, National Association as administrative agent and
collateral agent, and the lenders party thereto, the Prepetition
Second Lien Lenders provided term loans to the Prepetition
Borrower.
Prior to the Petition Date, pursuant to the Prepetition Second Lien
Credit Agreement and the other Prepetition Second Lien Loan
Documents, the Prepetition Second Lien Lenders made available to
the Co-Borrowers, a term loan in the principal amount of $86
million.
The court ruled that the cash collateral used during the Interim
Period will be equal to a billing of $3.908 million with operating
expenses of $3.842 million of which $2.677 million are salaries and
related for employees, $750,000 are related to physicians, $265,000
are medical supplies, and $150,000 are contract services. Every
dollar of such cash collateral used by the Debtors will result in a
dollar-for-dollar adequate protection claim for the benefit of the
Prepetition First Lien Secured Parties.
To the extent of any diminution in the value of the Prepetition
Secured Parties' respective interests in their collateral
(including cash collateral) from the Petition Date arising from the
use, sale, or lease of such collateral or the imposition of the
automatic stay, the Prepetition Secured Party is granted (i) senior
replacement liens in all assets of the Debtors, which Replacement
Liens will be senior to any prepetition statutory liens in favor of
CRIM and (ii) to the extent such Replacement Liens do not provide
sufficient protection of the Prepetition Secured Parties'
interests, a superpriority claim against the Debtors pursuant to 11
U.S.C. section 507(b), in each case, subject to the priorities set
forth in the Intercreditor Agreement dated January 31, 2013. The
Replacement Liens will be deemed duly valid and perfected upon
entry of this Order without the need for further action by any
party or further Court Order.
A copy of the motion is available at https://urlcurt.com/u?l=XMe6U4
from PacerMonitor.com.
A copy of the order is available at https://urlcurt.com/u?l=lek1ka
from PacerMonitor.com.
A copy of the budget is available at https://urlcurt.com/u?l=6gLdz7
from PacerMonitor.com.
The Debtor projects $29,061 in total receipts and $33,387 in total
payroll and operating expenses for the six weeks ending September
22, 2023.
About Grupo HIMA San Pablo, Inc.
Grupo HIMA San Pablo, Inc. serves as a diversified healthcare
services holding company pursuant to a corporate reorganization of
several businesses related by common ownership. Through its
subsidiaries and affiliates, the Company primarily owns and
operates hospital facilities and other healthcare related
businesses. As of August 2023, the HIMA GROUP operates four
hospitals, with over 1,200 licensed beds, including an Oncological
Hospital, a multi-specialty physician practice management company,
Home Care Service (including infusion therapies and wound care), a
free-standing Ambulatory Center and a 16-Ambulance Service
Company.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. P.R. Case No. 23-02510-EAG11) on August
15, 2023. In the petition signed by Armando J. Rodriguez-Benitez,
chief executive officer, the Debtor disclosed up to $1 billion in
assets and up to $500,000 in liabilities.
Judge Enrique S. Lamoutte Inclan oversees the case.
Wigberto Lugo Mender, Esq., at Lugo Mender Group, LLC, represents
the Debtor as legal counsel.
HALMAR LLC: Susan Seflin Named Subchapter V Trustee
---------------------------------------------------
The U.S. Trustee for Region 16 appointed Susan Seflin, Esq., a
partner at BG Law, as Subchapter V trustee for Halmar, LLC.
Ms. Seflin will be paid an hourly fee of $625 for her services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred. The compensation for her trustee administrators
is $250 per hour.
Ms. Seflin declared that she is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Susan K. Seflin, Esq.
BG Law
21650 Oxnard St, Suite 500
Woodland Hills, CA 91367
Tel: (818) 827-9000
Email: sseflin@bg.law
About Halmar LLC
Halmar, LLC is a real estate development firm in Los Angeles,
Calif.
The Debtor filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. C.D. Calif. Case No. 23-15032) on Aug. 5,
2023, with $4,300,000 in assets and $3,630,789 in liabilities. Amir
Sarbaz, managing member, signed the petition.
Judge Barry Russell oversees the case.
Jeffrey S. Shinbrot, Esq., at Jeffrey S. Shinbrot, APLC represents
the Debtor as legal counsel.
HENDERSON INTERNATIONAL: Taps Fox Rothschild as Legal Counsel
-------------------------------------------------------------
Henderson International Land, LLC and its affiliates seek approval
from the U.S. Bankruptcy Court for the District of Nevada to hire
the law firm of Fox Rothschild, LLP as their counsel.
The firm's services include:
a. advising the Debtors of their rights and obligations and
performance of their duties during administration of these Chapter
11 Cases;
b. attending meetings and negotiations with other parties in
interest on Debtors' behalf in these Chapter 11 Cases;
c. taking all necessary actions to protect and preserve
Debtors' estates including: the prosecution of actions, the defense
of any actions taken against Debtors, negotiations concerning all
litigation in which Debtors are involved, and objecting to claims
filed against the estates which are believed to be inaccurate;
d. seeking this Court's approval and confirmation of a plan of
reorganization, the accompanying disclosure statement, and all
papers and pleadings related thereto and in support thereof and
attending court hearings related thereto;
e. seeking this Court's approval and confirmation for the sale
of the Debtors' assets, and preparing all necessary legal and
transactional documents, motions, and supporting pleadings related
thereto;
f. representing the Debtors in all proceedings before this
Court or other courts of jurisdiction in connection with these
Chapter 11 cases, including preparing or reviewing all motions,
answers and orders necessary to protect the Debtors' interests;
g. assisting Debtors in developing legal positions and
strategies with respect to all facets of this proceeding;
h. preparing on Debtors' behalf necessary applications,
motions, answers, orders and other documents; and
i. performing all other legal services.
The firm will be paid at these rates:
Partners $310 to $1450
Counsel $245 to $850
Associates $240 to $585
Legal Assistants/Paralegals $60 to $425
In addition, the firm will receive reimbursement for out-of-pocket
expenses incurred.
Brett Axelrod, Esq., a partner at Fox Rothschild, 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:
Brett A. Axelrod, Esq.
Mark J. Connot, Esq.
Fox Rothschild, LLP
1980 Festival Plaza Drive, Suite 700
Las Vegas, NV 89135
Telephone: 702-699-5901
Facsimile: 702-597-5503
Email: baxelrod@foxrothschild.com
About Henderson International Land
Henderson International Land, LLC filed its voluntary petition for
relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Nev. Case
No. 23-12852) on July 13, 2023, listing $10 million to $50 million
in both assets and liabilities. The petition was signed by Fredrick
Waid as manager.
Judge Hilary L. Barnes presides over the case.
Fox Rothschild, LLP represents the Debtor as legal counsel.
I&A DEVELOPMENT: Taps MYC & Associates as Real Estate Broker
------------------------------------------------------------
I&A Development LLC and ISF Properties LLC seek approval from the
U.S. Bankruptcy Court for the Eastern District of New York to
employ MYC & Associates, Inc. as real estate broker.
The Debtors need a broker to assist in the sale and disposition of
their real commercial properties located at 343 Sand Lane, Staten
Island, New York and 351 Sand Lane, Staten Island, New York.
The firm will receive 6 percent of the properties' sale price as
compensation for its services.
Marc Yaverbaum, a principal shareholder at MYC & Associates,
disclosed in a court filing that his firm is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
Marc P. Yaverbaum
MYC & Associates, Inc.
1110 South Avenue, Suite 22
Staten Island, NY 10314
Telephone: (347) 273-1258
About I&A Development
I&A Development, LLC, a company in Staten Island, N.Y., filed a
petition for relief under Chapter 11 of the Bankruptcy Code (Bankr.
E.D.N.Y. Case No. 22-42953) on Nov. 29, 2022, with $1 million to
$10 million in both assets and liabilities. Greg Fleyshmakher,
president of I&A Development, signed the petition.
Judge Jil Mazer-Marino oversees the case.
Alla Kachan, Esq., at the Law Offices of Alla Kachan P.C. and
Wisdom Professional Services, Inc., serve as the Debtor's legal
counsel and accountant, respectively.
IHEARTMEDIA INC: S&P Lowers ICR to 'B', Outlook Negative
--------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on iHeartMedia
Inc. to 'B' from 'B+'.
The negative outlook reflects limited visibility into the pace and
magnitude of a recovery in radio advertising amid both
macroeconomic and secular challenges that could affect the
company's ability to maintain its healthy cash flow generation and
reduce leverage over time.
S&P said, "We expect a slower recovery in advertising and continued
high interest rates will continue to weigh on iHeartMedia's credit
measures. iHeartMedia's S&P Global Ratings-adjusted net leverage is
currently elevated at 7x for the last 12 months ended June 30,
2023. Although we believe leverage could improve slightly below
5.5x in 2024, due to a recovery in advertising revenue and the
benefit of political advertising revenue, we now believe it is
uncertain whether the company can sustain this level in 2025 (a
year without political revenue) depending on future interest rates
and how aggressively it voluntarily repays debt."
The pace and magnitude of a recovery in radio advertising is
uncertain. S&P said, "iHeartMedia has about $3.1 billion of debt
maturing on May 1, 2026, which we believe it will likely seek to
refinance in 2025. We believe the ultimate recovery in radio
advertising and the rates at which it can refinance its debt will
ultimately determine the company's ability to maintain its healthy
cash flow generation and reduce leverage over time." Radio
advertising has some of the shortest lead times in media, giving us
very little insight into future performance. Radio advertising also
faces secular challenges given the shift toward digital media.
The company has a multiyear liquidity runway, with no debt
maturities until 2026. iHeartMedia had about $165 million of cash
as of June 30, 2023, and about $420 million available under its
asset-based lending (ABL) revolving credit facility. S&P said,
"Despite our expectations for a challenging operating environment
in 2023, we still expect the company to generate about $185 million
of reported free operating cash flow (FOCF). We expect reported
FOCF will improve to about $285 million in 2024 due to a recovery
in advertising and the benefit from political advertising
revenue."
iHeartMedia's scale provides a competitive advantage over other
radio companies. iHeartMedia's size significantly surpasses its
peers. S&P said, "While this results in greater exposure to
national advertising, which has experienced steeper declines than
local advertising this year (as companies have pulled back more on
brand advertising than direct response advertising), we believe the
company's market-leading position will continue to support its
outperformance relative to peers." Its size also provides customer
diversity, with no single advertiser contributing more than 2% of
revenue and no single advertising category contributing more than
5%. iHeartMedia also generates significantly more revenue from
digital offerings than its peers, which has had strong double-digit
percentage growth over the past few years and reduces the company's
reliance on broadcast radio advertising revenue. Given the scale of
iHeartMedia's digital audio business, its digital audio segment has
healthy EBITDA margins in the low-30% area.
The negative outlook reflects limited visibility into the pace and
magnitude of a recovery in radio advertising amid both
macroeconomic and secular challenges that could affect the
company's ability to maintain its healthy cash flow generation and
reduce leverage over time.
S&P could lower the rating if we expected FOCF to debt to remain
below 5% (over a political cycle) on a sustained basis. This could
occur if:
-- A recovery in radio advertising in 2024 were weaker or more
prolonged than S&P expected;
-- S&P expected the company to refinance its sizable debt load at
higher rates such that FOCF to debt would be between 0%-5%; or
-- The company used its cash for sizable acquisitions that were
not immediately accretive rather than paying down debt.
S&P could revise the outlook to stable if it expected the company
to generate FOCF to debt of more than 5% on a sustained basis. S&P
believes this would likely entail:
-- A recovery in radio advertising to over 80% of pre-pandemic
levels in 2024;
-- The company using substantially all of its FOCF for voluntary
debt repayment; and
-- A better line of sight on the potential cost of refinancing,
which S&P believes is unlikely until later in 2024.
ESG factors have no material influence on S&P's credit rating
analysis of iHeartMedia.
IMEDIA BRANDS: Committee Taps AlixPartners as Financial Advisor
---------------------------------------------------------------
The official committee of unsecured creditors of iMedia Brands,
Inc. and its affiliates seeks approval from the U.S. Bankruptcy
Court for the District of Delaware to employ AlixPartners, LLP as
its financial advisor.
The committee requires a financial advisor to:
a. review and evaluate the Debtor's current financial
condition, business plans and cash and financial forecasts, and
periodically report to the committee;
b. review the Debtor's cash management, tax sharing and
intercompany accounting systems, practices and procedures;
c. evaluate any proposed sale process and related bids and
participate in any meetings with bidders or auction, as required;
d. review and investigate (i) related party transactions,
including those between the Debtor and non-debtor subsidiaries or
affiliates, including, but not limited to, shared services expenses
and tax allocations, and (ii) selected other pre-bankruptcy
transactions;
e. identify and review potential preference payments,
fraudulent conveyances and other causes of action that the Debtor's
estate may hold against third parties;
f. analyze the Debtor's assets and claims, and assess
potential recoveries to the various creditor constituencies under
different scenarios;
g. assist in the development and review of the Debtor's plan
of reorganization and disclosure statement;
h. review and evaluate court motions filed or to be filed by
the Debtor or any other parties involved in the Debtor's Chapter 11
case, as appropriate;
i. render expert testimony and litigation support services;
j. attend committee meetings and court hearings; and
k. assist with such other matters as may be requested that
fall within AlixPartners' expertise and that are mutually
agreeable.
The firm will be paid at these rates:
Managing Director $1,140 to $1,400 per hour
Partner $1,115 per hour
Director $880 to $1,070 per hour
Senior Vice President $735 to $860 per hour
Vice President $585 to $725 per hour
Consultant $215 to $565 per hour
Paraprofessional $360 to 380 per hour
David MacGreevey, managing partner at AlixPartners, disclosed in a
court filing that his firm is a "disinterested person" as the term
is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
David MacGreevey
AlixPartners, LLP
909 Third Avenue, Floor 30
New York, NY 10022
Tel: (212) 490-2500
Email: dmacgreevey@alixpartners.com
About iMedia Brands
iMedia Brands, Inc. is an interactive, global media company that
offers, manages, and markets merchandise, including men's and
women's accessories and apparel, under owned and third-party brands
through various entertainment, e-commerce, and digital service
platforms.
iMedia Brands and 11 of its affiliates filed for bankruptcy
protection on June 28, 2023 (Bankr. D. Del., Lead Case No.
23-10852). The petitions were signed by James Alt as chief
transformation officer.
The Debtors reported as of April 29, 2023, total assets of
$272,596,462 and total liabilities of $373,713,748.
Judge Karen B. Owens oversees the case.
The Debtors tapped Ropes & Gray, LLP and Pachulski Stang Ziehl &
Jones, LLP as bankruptcy counsels; Huron Consulting Services, LLC
as financial advisor; Lincoln Partners Advisors, LLC as investment
banker; and Stretto, Inc. as notice, claims and administrative
agent.
The U.S. Trustee for Regions 3 and 9 appointed an official
committee to represent unsecured creditors in the Debtors' Chapter
11 cases. The committee tapped McDermott Will & Emery, LLP as legal
counsel and AlixPartners, LLP as financial advisor.
IMEDIA BRANDS: Committee Taps McDermott Will & Emery as Counsel
---------------------------------------------------------------
The official committee of unsecured creditors of iMedia Brands,
Inc. and its affiliates seeks approval from the U.S. Bankruptcy
Court for the District of Delaware to employ McDermott Will & Emery
LLP as its counsel.
The firm will render these services:
(a) advise the committee with respect to its rights, powers,
and duties in these Chapter 11 cases;
(b) assist and advise the committee in its meetings and
negotiations with the Debtors and other parties in interest
regarding the Chapter 11 cases;
(c) solicit information from and provide information to the
Debtors' unsecured creditors as a group;
(d) assist the committee in analyzing claims asserted against,
and interests in, the Debtors, and in negotiating with the holders
of such claims and interests and bringing, or participating in,
objections or estimation proceedings with respect to such claims
and interests;
(e) assist the Committee in its investigation of the acts,
conduct, assets, liabilities, and financial condition of the
Debtors and their insiders and of the operation of the Debtors'
businesses;
(f) assist the Committee in its analysis of, and negotiations
with the Debtors and other parties concerning, matters related to,
among other things, the assumption or rejection of executory
contracts and unexpired leases, the sale or other disposition of
property of the Debtors' estates, the financing of other
transactions, and the terms of one or more plans of reorganization
or liquidation for the Debtors and accompanying disclosure
statements and related plan documents;
(g) assist and advise the Committee on its communications with
the Debtors' unsecured creditors as a group regarding significant
matters in the Chapter 11 Cases;
(h) represent the Committee at all hearings and other
proceedings before the Court;
(i) review and analyze applications, orders, statements of
operations, and schedules filed with the Court and advise the
Committee as to their propriety and, to the extent deemed
appropriate by the Committee, support, join, or object thereto;
(j) advise and assist the Committee with respect to any
legislative, regulatory, or governmental activities;
(k) assist the Committee in its review and analysis of the
Debtors' various agreements;
(l) prepare, on behalf of the Committee, any pleadings,
including, without limitation, motions, memoranda, complaints,
objections, or comments in connection with any matter related to
the Debtors or the Chapter 11 Cases;
(m) investigate and analyze any claims belonging to the
Debtors' estates; and
(n) perform such other legal services.
The hourly rates of the firm's counsel and staff are as follows:
Partners $1,170 to $2,330
Senior Counsel $895 to $1,820
Employee Counsel $900 to $1,685
Associates $655 to $1,125
Paraprofessionals $240 to $675
In addition, the firm will seek reimbursement for expenses
incurred.
McDermott provided the following in response to the request for
additional information set forth in D.1 of the Appendix B
Guidelines:
(a) McDermott has not agreed to a variation of its standard or
customary billing arrangements for this engagement;
(b) none of McDermott's professionals included in this
engagement have varied their rates based on the geographic location
of the Chapter 11 Cases;
(c) McDermott did not represent the Committee before the
Petition Date; and
(d) McDermott expects to develop a prospective budget and
staffing plan to comply with the U.S. Trustee's requests for
information and additional disclosures, and any orders of the
Court. Recognizing that unforeseeable fees and expenses may arise
in large chapter 11 cases, McDermott may need to amend the budget
as necessary to reflect changed circumstances or unanticipated
developments.
Kristin Going, Esq., a partner at McDermott Will & Emery, disclosed
in a court filing that the firm is a "disinterested person" as that
term is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Kristin K. Going, Esq.
McDermott Will & Emery LLP
One Vanderbilt Avenue
New York, NY 10017-3852
Tel: + 1 212 547 5400
Fax: + 1 212 547 5444
Email: kgoing@mwe.com
About iMedia Brands
iMedia Brands, Inc. is an interactive, global media company that
offers, manages, and markets merchandise, including men's and
women's accessories and apparel, under owned and third-party brands
through various entertainment, e-commerce, and digital service
platforms.
iMedia Brands and 11 of its affiliates filed for bankruptcy
protection on June 28, 2023 (Bankr. D. Del., Lead Case No.
23-10852). The petitions were signed by James Alt as chief
transformation officer.
The Debtors reported as of April 29, 2023, total assets of
$272,596,462 and total liabilities of $373,713,748.
Judge Karen B. Owens oversees the case.
The Debtors tapped Ropes & Gray, LLP and Pachulski Stang Ziehl &
Jones, LLP as bankruptcy counsels; Huron Consulting Services, LLC
as financial advisor; Lincoln Partners Advisors, LLC as investment
banker; and Stretto, Inc. as notice, claims and administrative
agent.
The U.S. Trustee for Regions 3 and 9 appointed an official
committee to represent unsecured creditors in the Debtors' Chapter
11 cases. The committee tapped McDermott Will & Emery, LLP as legal
counsel and AlixPartners, LLP as financial advisor.
INTELIGLAS CORPORATION: Jami Nimeroff Named Subchapter V Trustee
----------------------------------------------------------------
The U.S. Trustee for Regions 3 and 9 appointed Jami Nimeroff, Esq.,
at Brown McGarry Nimeroff, LLC as Subchapter V trustee for
InteliGlas Corporation.
Mr. Nimeroff will be paid an hourly fee of $400 for his services as
Subchapter V trustee while paralegals will be compensated at $185
per hour.
Mr. Nimeroff declared that he is a disinterested person according
to Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Jami Nimeroff, Esq.
Brown McGarry Nimeroff, LLC
919 N. Market Street, Suite 420
Wilmington, DE 19801
Telephone: (302) 428-8142
Fax: (302) 351-2744
Email: jnimeroff@bmnlawyers.com
About InteliGlas Corporation
InteliGlas Corporation is a secure AI cloud platform that fully
integrates all building systems, provides sensory-capabilities, and
puts all the data into the artificial intelligence system
inteliGlas AI.
The Debtor filed Chapter 11 petition (Bankr. D. Del. Case No.
23-11124) on Aug. 9, 2023, with $243,273 in assets and $3,177,648
in liabilities. R. Scott Martin, chief executive officer, signed
the petition.
Evan T. Miller, Esq., at Bayard, P.A. represents the Debtor as
legal counsel.
IRVIN AUTOMOTIVE: Taps Law Offices of Craig M. Geno as Counsel
--------------------------------------------------------------
Irvin Automotive Parts, Inc. seeks approval from the U.S.
Bankruptcy Court for the Northern District of Mississippi to hire
the Law Offices of Craig M. Geno, PLLC as its counsel.
The firm's services include:
a. advising and consulting with the Debtor regarding questions
arising from certain contract negotiations during the operation of
the Debtor's business;
b. evaluating and objecting to claims of various creditors who
may assert security interests in the assets and who may seek to
disturb the continued operation of the business;
c. appearing in, prosecuting, or defending suits and
proceedings, and taking all necessary steps and other matters
involved in or connected with the affairs of the estate of the
Debtor;
d. representing the Debtor in court hearings and assisting in
the preparation of legal documents;
e. advising and consulting with the Debtor in connection with
any proposed Chapter 11 reorganization plan; and
f. other necessary legal services.
The Law Offices of Craig M. Geno will be paid at these rates:
Craig M. Geno $425 per hour
Associates $275 per hour
Paralegals $275 per hour
The firm received a retainer in the amount of $12,000, which
includes the filing fee of $1,738.
Craig Geno, Esq., an attorney at the Law Offices of Craig M. Geno,
disclosed in a court filing that his firm is a "disinterested
person" pursuant to Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Craig M. Geno, Esq.
Law Offices of Craig M. Geno, PLLC
587 Highland Colony Parkway
Ridgeland, MS 39157
Tel: 601-427-0048
Fax: 601-427-0050
Email: cmgeno@cmgenolaw.com
About Irvin Automotive
Irvin Automotive Parts, Inc., a company in Amory, Miss., filed a
petition under Chapter 11, Subchapter V of the Bankruptcy Code
(Bankr. N.D. Miss. Case No. 23-12234) on July 25, 2023, with $1
million to $10 million in both assets and liabilities. Joel Dean
Irvin, president, signed the petition.
Judge Selene D. Maddox oversees the case.
Craig M. Geno, Esq., at the Law Offices of Craig M. Geno, PLLC
represents the Debtor as legal counsel.
KAI 786: Gets OK to Hire Hacker Law Firm as Counsel
---------------------------------------------------
Kai 786, LLC received approval from the U.S. Bankruptcy Court for
the Western District of Texas to hire Hacker Law Firm, PLLC as its
legal counsel.
The firm's services include:
a. advising and consulting with the Debtor as to its powers
and duties in the continued operation of its business and
management of its properties during bankruptcy;
b. taking actions to preserve and protect the Debtor's
assets;
c. preparing legal documents; and
d. assisting the Debtor with its plan of reorganization and
disclosure statements.
The firm's hourly rates are as follows:
Paul S. Hacker, Esq. $375
Legal Assistants $125
As disclosed in court filings, Hacker Law Firm is a "disinterested
person" pursuant to Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Paul Steven Hacker, Esq.
Hacker Law Firm, PLLC
3355 Cherry Ridge Ste. 214
San Antonio, TX 78230
Tel: (210) 595-2045
Email: steve@hackerlawfirm.com
About Kai 786
Kai 786, LLC owns three apartment complexes in San Antonio, TX
valued at $3.76 million.
Kai 786, LLC filed its voluntary petition for relief under Chapter
11 of the Bankruptcy Code (Bankr. W.D. Texas Case No. 23-51004) on
July 31, 2023, listing $3,787,730 in assets and $2,375,156 in
liabilities. The petition was signed by Saajedul Kaiyom as managing
member.
Judge Michael M. Parker presides over the case.
Paul Steven Hacker, Esq. at Hacker Law Firm, PLLC, represents the
Debtor as counsel.
LEMONKIND LLC: Court OKs Interim Cash Collateral Access
-------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida, Fort
Myers Division, authorized LemonKind LLC to use cash collateral on
an interim basis in accordance with the budget, with a 10%
variance.
As previously reported by the Troubled Company Reporter, the Debtor
requires the use of cash collateral to (i) continue the orderly
operation of its business, avoiding an immediate total shutdown of
operations; (ii) meet its obligations for necessary ordinary course
expenditures, and other operating expenses; and (iii) make payments
authorized under other orders entered by the Court, thereby
avoiding immediate and irreparable harm to the Debtor's estate.
Several purported creditors have asserted security interests in all
money in which the Debtor has an interest via UCC-1 Financing
Statements filed either in the Florida Secured Transaction Registry
and as to creditor Amazon Capital Services, Inc., also with the
California Secretary of State. The Debtor disputes that some of the
Claimants or other creditors hold valid liens upon the cash
collateral.
The entities that assert an interest in the Debtor's cash
collateral are Amazon Capital Services, Inc., Bank of Southern
California, N.A., and Crown Credit Company - Crown Equipment
Corporation.
The court ruled that the Secured Creditors will have a perfected
post-petition lien against the Prepetition Collateral to the same
extent and with the same validity and priority as their alleged
prepetition lien, without the need to file or execute any document
as may otherwise be required under applicable non-bankruptcy law.
The Debtor will maintain insurance coverage for its property in
accordance with its obligations under the loan and security
documents with the Secured Creditors.
A continued hearing on the matter is set for August 28, 2023 at
1:30 p.m.
A copy of the court's order and the Debtor's budget is available at
https://urlcurt.com/u?l=Etldsx from PacerMonitor.com.
The Debtor projects, total uses, on a weekly basis, as follows:
$67,483 for the week starting August 28, 2023;
$53,346 for the week starting September 4, 2023;
$71,647 for the week starting September 11, 2023;
$66,256 for the week starting September 18, 2023;
$62,370 for the week starting September 25, 2023;
$42,911 for the week starting October 2, 2023;
$55,995 for the week starting October 9, 2023;
$46,256 for the week starting October 16, 2023;
$62,370 for the week starting October 23, 2023;
$36,694 for the week starting October 30, 2023; and
$56,995 for the week starting November 6, 2023.
About LemonKind LLC
LemonKind LLC manufactures and distributes a wide array of health
conscious functional beverages and other nutraceutical snacks and
foods.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. M.D. Fla. Case No. 23-00933) on August 14,
2023. In the petition signed by Irene Rojas Stanbury, CEO, the
Debtor disclosed up to $10 million in both assets and liabilities.
Judge Caryl E. Delano oversees the case.
Mike Dal Lago, Esq., at Dal Lago Law, represents the Debtor as
legal counsel.
LINDELL LLC: Court OKs Cash Collateral Access Thru Sept 6
---------------------------------------------------------
The U.S. Bankruptcy Court for the District of Massachusetts
authorized Lindell LLC to use cash collateral on an interim basis
in accordance with the budget, through the date of the continued
hearing set for September 6, 2023 at 1:30 p.m.
As previously reported by the Troubled Company Reporter, the piece
of real estate owned by the Debtor is located at 525 Lindell
Avenue, Leominster, Massachusetts. This property has a single
residential building on it.
The Debtor requires the use of cash collateral to fund ongoing
operations and business expenses.
Turner Investment Trust asserts that it is owed in excess of
$400,000 by Lindell LLC. Turner has a secured mortgage on the 525
Lindell Avenue property and may assert a cash collateral lien on
rents and proceeds from that property.
L & C Resources, Inc. may assert that it is owed approximately
$160,000 by Lindell LLC. L & C has a secured mortgage on the 525
Lindell Avenue property and may assert a cash collateral lien on
rents and proceeds from that property.
Steve Alfonsi may assert that he is owed approximately $45,000 by
Lindell LLC. Alfonsi has a secured mortgage on the 525 Lindell
Avenue property and may assert a cash collateral lien on rents and
proceeds from that property.
The court ruled the Debtor will use and expend only that amount of
asserted cash collateral as is necessary to avoid immediate and
irreparable harm to the Debtor's estate pending a further hearing
of the Court on the Motion and only in the amounts reflected in the
budget, as modified by oral motion of the Debtor on the record at
the Hearing to reflect that mortgage payments are $2,750 and that
the Debtor's principal will increase his contributions to account
for any shortfall in the budget resulting from the increased
payment amount.
A copy of the court's order is available at
https://urlcurt.com/u?l=qKqZch from PacerMonitor.com.
About Lindell LLC
Lindell LLC is a real estate holding company. The Debtor sought
protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D.
Mass. Case No. 23-40608 ) on February 27, 2023. In the petition
signed by David Murphy, manager, the Debtor disclosed up to
$500,000 in both assets and liabilities.
Judge Christopher J. Panos oversees the case.
James P. Ehrhard, Esq., at Ehrhard & Associates, P.C., represents
the Debtor as legal counsel.
LITTLE ROAD: Gets OK to Hire CJC Management Services as Accountant
------------------------------------------------------------------
Little Road Co., LLC received approval from the U.S. Bankruptcy
Court for the District of Utah to employ CJC Management Services,
LLC as its accountant.
CJC will advise the Debtor regarding all financial (non-tax)
accounting matters arising in its Chapter 11 case, at the hourly
rate of $165 per hour.
As disclosed in court filings, CJC is a "disinterested person"
pursuant to Section 101(14) of the Bankruptcy Code.
About Little Road Co.
Little Road Co. is an online apparel store in Draper, Utah, which
offers a range of clothing for kids.
Little Road Co. filed its voluntary petition for Chapter 11
protection (Bankr. D. Utah Case No. 23-22020) on May 18, 2023, with
$50,000 to $100,000 in assets and $1 million to $10 million in
liabilities. Sydni Sorensen, managing member, signed the petition.
Judge Joel T. Marker oversees the case.
The Debtor tapped T. Edward Cundick, Esq., at Workman Nydegger as
legal counsel and CJC Management Services, LLC as accountant.
LONE WOLF: Chris Quinn Named Subchapter V Trustee
-------------------------------------------------
The U.S. Trustee for Region 7 appointed Chris Quinn as Subchapter V
trustee for Lone Wolf Equipment Rental, LLC.
Mr. Quinn will be paid an hourly fee of $400 for his services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. Quinn declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Chris Quinn
26414 Cottage Cypress Lane
Cypress, TX 77433
Phone: 713-498-8500
Email: chris.quinn2021@outlook.com
About Lone Wolf
Lone Wolf Equipment Rental, LLC filed a petition under Chapter 11,
Subchapter V of the Bankruptcy Code (Bankr. S.D. Texas Case No.
23-33015) on Aug. 7, 2023, with $100,001 to $500,000 in both assets
and liabilities.
Judge Jeffrey P. Norman oversees the case.
Susan Tran Adams, Esq., at Tran Singh, LLP represents the Debtor as
legal counsel.
LORDSTOWN MOTORS: Inks $40-Mil. Deal in Karma Automotive Case
-------------------------------------------------------------
Bankrupt electric truck maker Lordstown Motors Corp. has reached a
$40 million deal to settle allegations that it stole technology and
employees from Karma Automotive, according to a motion filed
Tuesday, August 16, 2023, in Delaware.
About Lordstown Motors
Lordstown Motors Corp. -- http://www.lordstownmotors.com/-- is an
electric vehicle OEM developing innovative light duty commercial
fleet vehicles, with the Endurance all electric pickup truck as its
first vehicle. It has engineering, research and development
facilities in Farmington Hills, Michigan and Irvine, Calif.
On June 27, 2023, Lordstown Motors Corp. and two affiliated debtors
filed voluntary petitions for relief under Chapter 11 of the
Bankruptcy Code (Bankr. D. Del. Lead Case No. 23-10831). The cases
are pending before the Honorable Mary F. Walrath.
The Debtors tapped White & Case, LLP and Richards, Layton & Finger,
P.A., as legal counsels; Jefferies, LLC as investment banker; and
Silverman Consulting as restructuring advisor. Kurtzman Carson
Consultants, LLC is the Debtors' claims and noticing agent and
administrative advisor.
MLK BRYANT: Taps Motschenbacher & Blattner as Legal Counsel
-----------------------------------------------------------
MLK Bryant, LLC seeks approval from the U.S. Bankruptcy Court for
the District of Oregon to hire Motschenbacher & Blattner, LLP as
its bankruptcy counsel.
The firm's services include:
(a) consulting with the Debtor concerning the administration
of its Chapter 11 case;
(b) advising the Debtor with regard to its rights, powers and
duties;
(c) investigating and, if appropriate, prosecuting claims and
causes of action belonging to the estate;
(d) advising the Debtor concerning alternatives for
restructuring its debts and financial affairs pursuant to a Chapter
11 plan or, if appropriate, liquidating its assets; and
(e) preparing the bankruptcy schedules, statements and lists
required to be filed by the Debtor under the Bankruptcy Code and
applicable procedural rules.
The firm will charge these hourly fees:
Nicholas J. Henderson, Partner $495
Alex C. Trauman, Partner $425
Troy G. Sexton, Partner $375
Jeremy Tolchin, Associate $350
Sean Glinka, Associate $375
Ryan Ripp, Associate $275
Noah Maurer, Associate $275
Sharon Kuger, Paralegal $225
Legal Assistants $85
Nicholas Henderson, Esq., a partner at Motschenbacher & Blattner,
disclosed in a court filing that his firm is a "disinterested
person" pursuant to Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Nicholas J. Henderson, Esq.
Motschenbacher & Blattner, LLP
117 SW Taylor Street, Suite 300
Portland, OR 97204
Phone: 503-417-0500
Fax: 503-417-0501
Email: nhenderson@portlaw.com
About MLK Bryant
MLK Bryant, LLC, a real estate company based in Portland, Ore.,
filed Chapter 11 petition (Bankr. D. Ore. Case No. 23-31719) on
Aug. 4, 2023, with $2,100,000 in assets and $1,531,685 in
liabilities. Judge Peter C. Mckittrick oversees the case.
Nicholas J. Henderson, Esq., at Motschenbacher & Blattner, LLP is
the Debtor's legal counsel.
MLK BRYANT: U.S. Trustee Unable to Appoint Committee
----------------------------------------------------
The U.S. Trustee for Region 18 disclosed in a court filing that no
official committee of unsecured creditors has been appointed in the
Chapter 11 case of MLK Bryant, LLC.
About MLK Bryant
MLK Bryant, LLC, a real estate company based in Portland, Ore.,
filed Chapter 11 petition (Bankr. D. Ore. Case No. 23-31719) on
Aug. 4, 2023, with $2,100,000 in assets and $1,531,685 in
liabilities. Judge Peter C. Mckittrick oversees the case.
Nicholas J. Henderson, Esq., at Motschenbacher & Blattner, LLP is
the Debtor's legal counsel.
MONICATTI AUTO: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Monicatti Auto Sales, LLC
55800 New Haven Road
New Baltimore, MI 48051-3768
Business Description: The Debtor is a seller of pre-owned
vehicles.
Chapter 11 Petition Date: August 24, 2023
Court: United States Bankruptcy Court
Eastern District of Michigan
Case No.: 23-47427
Judge: Hon. Thomas J. Tucker
Debtor's Counsel: Elliot G. Crowder, Esq.
STEVENSON & BULLOCK, P.L.C.
26100 American Drive
Suite 500
Southfield, MI 48034
Tel: (248) 354-7906 Ext. 2254
Email: ecrowder@sbplclaw.com
Estimated Assets: $50 to $100,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Michael Monicatti as member.
A copy of the Debtor's list of 20 largest unsecured creditors is
avaiable for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/ILM7MLQ/Monicatti_Auto_Sales_LLC__miebke-23-47427__0003.0.pdf?mcid=tGE4TAMA
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/IDJY5KY/Monicatti_Auto_Sales_LLC__miebke-23-47427__0001.0.pdf?mcid=tGE4TAMA
NOVAN INC: Court Approves Ligand-Led Auction on Aug. 31
-------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware approved the
bidding procedures for the sale of substantially all assets of
Novan Inc. and its debtor-affiliates free and clear of all liens,
claims, interests, and encumbrances, and authorized Ligand
Pharmaceuticals Incorporated as the stalking horse bidder for all
of the Debtors' assets. Objection to the sale, if any, must be
filed no later than 4:00 p.m. (ET) on Aug. 28, 2023.
Any parties interested in submitting a bid for any of the Debtors'
asset should contact (a) the Debtors' investment banker, Raymond
James & Associates, Geoffrey Richards at
geoffrey.richards@raymondjames.com and Simon Wein at
simon.wein@rarmondjames.com, and (b) the Debtors' counsel, Morris,
Nichols, Arsht & Tunnell LLP.
Any qualified bidder that intends to participate in the auction
must submit a qualified bid on or before Aug. 28, 2023, at 5:00
p.m. (ET). An auction will take place on Aug. 31, 2023, at 5:00
p.m. (ET), at the offices of Raymond James & Associates Inc., 320
Park Avenue, Floor 12, New York New York 10022. A sale hearing to
approve the sale is set for Sept. 11, 2023, at 10:00 a.m. (ET),
before the Hon. Laurie Selber Silverstein in the U.S. Bankruptcy
Court fort the District of Delaware at 824 N. Market Street,
Wilmington, Delaware 19801.
Copies of the bidding procedures motion, the bidding procedures,
the bidding order, and all other documents filed with the Court may
be obtained free of charge at Kurtzman Carson Consultants LLC
website at https://www.kccllc.net/novan or can be requested by
calling at (888) 251-2954 (US/Canada) or (310) 751-2614
(International).
According to the Troubled Company Reporter on July 20, 2023, Ligand
Pharmaceuticals Incorporated (NASDAQ: LGND) on July 17, 2023,
disclosed that it has made an offer to acquire the assets of Novan,
Inc. ("Novan") for $15 million in cash and provide up to $15
million in DIP financing to Novan inclusive of a $3 million bridge
loan already funded. Novan announced earlier today that it has
filed for Chapter 11 reorganization and its entry into a stalking
horse acquisition offer with Ligand. The transaction is designed to
preserve and maximize the value of Novan's commercial business and
berdazimer gel development assets. Berdazimer gel is in development
for molluscum contagiosum infection, which has a filed new drug
application ("NDA") with the Food and Drug Administration ("FDA")
with an assigned PDUFA goal date of January 5, 2024. Ligand
acquired milestone and royalty rights to berdazimer gel in 2019. If
Ligand's bid is the successful bid in the anticipated bankruptcy
sale and auction process, Ligand will acquire the Novan assets and
consistent with Ligand's business model, will seek to out license
or sell the existing development programs and commercial business
assets of Novan.
The terms of the proposed transaction are outlined below:
-- Ligand has submitted a $15 million bid to acquire all the
assets of Novan, including berdazimer gel, all other programs in
development, the NITRICIL(TM) drug delivery technology, and the
commercial assets of its EPI health business.
-- Subject to court approval, Novan will be able to draw down
from the $15 million secured DIP loan during the bankruptcy cases
(which includes a $3 million bridge financing loan previously
extended by Ligand) and will be repaid through the sale of Novan's
assets.
-- The $15 million DIP loan will accrue interest at 12% interest
annually and will be subject to a 6% increase in interest should
Novan default on its loan agreement.
-- Should the court accept a bid for the assets of Novan from
another party, Ligand's DIP loan will be repaid, and Ligand expects
that its milestone and royalty rights will be preserved.
-- The transaction is expected to close in the third quarter of
2023. "In the first half of the year we have focused on fortifying
our business team, including a sharpening of our capabilities and
expertise in credit, reorganization and operations.
Birch Lake is acting as financial advisor and Morgan Lewis is
acting as legal advisor to Ligand for this transaction.
About Ligand Pharmaceuticals
Ligand -- http://www.ligand.com-- is a biopharmaceutical company
enabling scientific advancement through supporting the clinical
development of high-value medicines. Ligand does this by providing
financing, licensing its platform technologies or both. Its
business model generates value for stockholders by creating a
diversified portfolio of biotech and pharmaceutical product revenue
streams that are supported by an efficient and low corporate cost
structure. It has two primary platform technologies that are
available for outlicense -- Captisol and Pelican. It has
established multiple alliances, licenses and other business
relationships with the world's leading pharmaceutical companies
including Amgen, Merck, Pfizer, Jazz, Takeda, Gilead Sciences and
Baxter International.
About Novan Inc.
Based in Durham, North Carolina, Novan Inc. (Nasdaq: NOVN) is a
clinical development-stage biotechnology company focused on
leveraging nitric oxide's naturally occurring anti-viral,
anti-bacterial, anti-fungal and immunomodulatory mechanisms of
action to treat a range of diseases with significant unmet needs.
Nitric oxide plays a vital role in the natural immune system
response against microbial pathogens and is a critical regulator of
inflammation.
Novan Inc. and affiliate, EPI Health, LLC, sought relief under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case
No. 23-10937) on July 17, 2023. As of March 31, 2023, Novan
disclosed $79,793,000 in assets against $7,922,000 in liabilities.
Judge Laurie Selber Silverstein oversees the cases.
The Debtors tapped Morris, Nichols, Arsht & Tunnell, LLP as legal
counsel; Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan, LLP
as special counsel Sierra Constellation Partners, LLC as financial
advisor; and Raymond James and Associates as investment banker.
Kurtzman Carson Consultants, LLC is the claims agent.
ORBITAL INFRASTRUCTURE: Case Summary & 30 Top Unsecured Creditors
-----------------------------------------------------------------
Lead Debtor: Orbital Infrastructure Group, Inc.
5444 Westheimer Road, Suite 1650
Houston, TX 77056
Business Description: Orbital offers a comprehensive suite of
infrastructure solutions, providing
engineering, design, construction,
maintenance, and disaster recovery services
to electric power, telecommunications, and
renewable energy customers, of which
electric power and telecommunication
segments are still active.
Chapter 11 Petition Date: August 23, 2023
Court: United States Bankruptcy Court
Southern District of Texas
Five affiliates that concurrently filed voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code:
Debtor Case No.
------ --------
Orbital Infrastructure Group, Inc. (Lead Case) 23-90763
Orbital Gas Systems, North America, Inc. 23-90764
Orbital Power, Inc. 23-90765
Orbital Solar Services, LLC 23-90766
Eclipse Foundation Group, Inc. 23-90767
Judge: Hon. David R. Jones
Debtors' Counsel: Charles A. Beckham, Jr., Esq.
Arsalan Muhammad, Esq.
Kourtney Lyda, Esq.
David Trausch, Esq.
HAYNES AND BOONE, LLP
1221 McKinney Street, Suite 4000
Houston, TX 77010
Tel: (713) 547-2000
Fax: (713) 547-2600
Email: charles.beckham@haynesboone.com
Email: arsalan.muhammad@haynesboone.com
Email: kourtney.lyda@haynesboone.com
Email: david.trausch@haynesboone.com
- and -
Stephen M. Pezanosky, Esq.
Martha B. Wyrick, Esq.
HAYNES AND BOONE, LLP
2323 Victory Avenue, Suite 700
Dallas, TX 75219
Tel: (214) 651-5000
Fax: (214) 651-5940
Email: stephen.pezanosky@haynesboone.com
Email: martha.wyrick@haynesboone.com
Debtors'
Restructuring
Advisor: ALVAREZ & MARSAL NORTH AMERICA, LLC
540 W. Madison St., Suite 1800
Chicago, IL 60661
Debtors'
Investment
Banker: MOELIS & COMPANY
399 Park Avenue, 4th Floor
New York, New York 100222
Debtors'
Claims,
Noticing,
Solicitation &
Administrative
Agent: DONLIN, RECANO & COMPANY, INC.
6201 15th Avenue, 6201 15th Avenue
Brooklyn, New York 11219
Total Assets as of June 30, 2023: $24,185,668
Total Debts as of June 30, 2023: $225,850,276
The petitions were signed by James F. O'Neil III as chief executive
officer.
A full-text copy of the Lead Debtor's petition is available for
free at PacerMonitor.com at:
https://www.pacermonitor.com/view/DZCEEEY/Orbital_Infrastructure_Group_Inc__txsbke-23-90763__0001.0.pdf?mcid=tGE4TAMA
Consolidated List of Debtors' 30 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
1. Tidal Power Group LLC Unsecured Debt $44,686,661
Attn: Monty Janak
4211 Chance Lane
Rosharon, TX 77583
Tel: 979-299-9918
Email: monty.janak@tidalpowerservices.com
2. Jingoli Power Settlement $32,759,161
100 Lenox Drive, Suite 100 Agreement/
Lawrenceville, NJ 08648 Litigation
Attn: Karl Miller
Chief Executive Officer
Phone: 609-896-3111
Email: kmiller@jingolipower.com
3. HC Tradesmen Staffing, LLC Trade Payable & $5,243,733
1311 Chisholm Trail #404 Settlement
Round Rock, TX 78681 Agreement
Attn: Deanna Miller
President
Phone: 877-931-2416
Email: millerd@trademenstaffing.com
4. HCS Renewable Energy LLC Settlement $1,200,000
111 Congress Ave. Ste 900 Agreement
Austin, TX 78701-4043
Attn: Xuan Yong
Chairman and Chief Executive Officer
Phone: 281-864-9070
Email: xuan.yong@workwise.com
5. Hectate Energy West Contract $771,298
Newberry, LLC Termination
c/o Cahill Gordon & Reindell LLP
32 Old Slip
New York, NY 10005
Attn: Edward N. Moss
Attorney Representative
Phone: 212-701-3838
6. United Rentals Trade Payable $534,201
6125 Lakeview Rd
Charlotte, NC 28269
Attn: Matthew Flannery
President and Chief Executive Officer
Phone: 561-627-9658
Email: mflanner@ur.com
7. American Express Trade Payable $280,452
200 Vesey St
New York, NY 10285
Attn: Stephen Squeri
Chairman and Chief Executive Officer
Email: steve.squeri@aexp.com
8. Ford & Harrison LLP Trade Payable $246,273
1601 Elm Street, Suite 4450
Dallas, TX 75201
Attn: Buena Vista Lyons
Managing Director
Phone: 214-256-4705
Email: vlyons@fordharrison.com
9. White Cap, LP Trade Payable $219,112
6250 Brook Hollow Pkwy Ste 100
Norcross, CA 30071
Attn: John Stegeman
Chief Executive Officer
Phone: 770-932-0035
10. Wall Templeton Attorneys Trade Payable $203,368
1001 Wade Avenue, Suite 423
Raleigh, NC 27605
Attn: Keith E. Coltrain
Founding Partner
Phone: 919-865-9500
Email: keith.coltrian@walltempleton.com
11. Herc Rentals, Inc. Trade Payable $153,740
27500 Riverview Center Blvd, Ste 100
Bonita Springs, FL 34134
Attn: Lawrence H Silber
Chief Executive Officer
Email: larry.silber@hercrentals.com
12. Family Tree Services, Inc. Trade Payable $152,510
741 Main Street
Dighton, MA 02715
Attn: Greg Musgrave
Chief Executive Officer
Phone: 707-984-6629
13. Jones Power, LLC Trade Payable $150,707
16 Office Park Drive, Suite 5
Post Office Box 10937
Hattiesburg, MS 34902-6021
Attn: John Clark
Chief Executive Officer
Phone: 713-781-3100
Email: john.clark@jonespipeline.com
14. Sealar LLC Trade Payable $149,580
c/o The Cromeens Law Firm, PLLC
1345 Campbell Road, Suite 200
Houston, TX 77055
Attn: Kassandra Matias
Attorney Representative
Phone: 713-715-7334
Email: admin2@thecromeenslawfirm.com
15. Moss Adams LLP Trade Payable $133,900
999 Third Avenue, Suite 2800
Seattle, WA 98104
Attn: Eric Miles
Chief Executive Officer
Phone: 408-916-0571
Email: eric.miles@mossadams.com
16. Vermeer Heartland Inc. Trade Payable $101,221
2574 US Hwy 22 NW
Washington Court House, OH 43160
Attn: Stephen Farrens
Chief Executive Officer
Email: sfarrens@vermeerhl.com
17. LHH Recruitment Solutions Trade Payable $97,160
8655 Baypine Rd, 100 Business Center
Jacksonville, FL 32256
Attn: John Morgan
Chief Executive Officer
Phone: 212-254-2142
Email: john.morgan@lhh.com
18. The Cryor Group Trade Payable $90,000
22 Roland Green
Baltimore, MD 21210
Attn: Michael Cryor
Chief Executive Officer
Phone: 410-532-3549
Email: mcryor@cryorgroup.com
19. Premier Truck Rental LLC Trade Payable $88,204
9138 Bluffton Road
Fort Wayne, IN 46809
Attn: Bob Troxel
Chief Executive Officer
Phone: 260-824-6340
Email: rob@premiertruckrental.com
20. Johnson Pope Bokor Ruppel & Trade Payable $80,722
Burns LLP
311 Park Place Blvd #3100
Clearwater, FL 33759
Attn: Carol Hague
Chief Executive Officer
Phone: 727-461-1818
Email: carolh@jpfirm.com
21. Name on File Former Employee $70,000
Address on File
22. PR Newswire Trade Payable $64,456
Association LLC
200 Vesey St, Fl 19
New York, NY 10281
Attn: Abel Clark
Chief Executive Officer
Email: abel.clark@corsearch.com
23. Everwest Property Management Trade Payable $61,747
1099 18th Street, Ste 2900
Denver, CO 80202
Attn: Rick Stone
President and Chief Executive Officer
Phone: 303-957-5300
Email: rick.stone@everwest.com
24. Kamind IT Trade Payable $56,523
5200 Meadows Road, Ste 150
Lake Oswego, OR 97035
Attn: Matt A. Katzer
Chief Executive Officer
Phone: 503-291-1221
Email: mkatzer@kamind.com
25. MBP Carolina, Inc. Trade Payable $56,518
3040 Williams Drive, Suite 300
Fairfax, VA 22031
Attn: Christopher Payne
Chief Executive Officer
Phone: 703-641-9088
Email: cpayne@mbpce.com
26. Adaptive Insights Inc. Trade Payable $55,440
3350 West Bayshore Road
Palo Alto, CA 94303
Attn: Tom Bogan
Chief Executive Officer
Phone: 301-280-0809
Email: tom.bogan@workday.com
27. Broadridge Investor Trade Payable $50,721
Communications
51 Mercedes way
Edgewood, NY 11717
Attn: Kim Gokey
Chief Executive Officer
Phone: 816-932-4850
Email: tim.gokey@broadridge.com
28. Sullivan & Worcester LLP Trade Payable $50,000
1633 Broadway
New York, NY 10019
Attn: Ron Ben-Bassat, Partner
Phone: 212-660-5003
Email: rbenbassat@sullivanlaw.com
29. CS Disco, Inc. Trade Payable $42,663
111 Congress Ave
Suite 900
Austin, TX 78701
Attn: Kiwi Camara
Chief Executive Officer
Phone: 713-231-9100
Email: camara@csdisco.com
30. Key Solar, LLC Trade Payable Undetermined
24 Water Street
Hollison, MA 01746
Attn: Kevin Price
Managing Partner
Phone: 508-960-9891
Email: kprice@keysolarllc.com
PENNSYLVANIA ECONOMIC: Fitch Affirms BB- Rating on Parking Bonds
----------------------------------------------------------------
Fitch Ratings has affirmed Pennsylvania Economic Development
Financing Authority's (PEDFA) $124 million of outstanding senior
parking revenue bonds at 'BB-'. The Rating Outlook is Stable.
Entity/Debt Rating Prior
----------- ------ -----
Pennsylvania Economic
Development Financing
Authority (PA) [Parking]
Pennsylvania Economic
Development Financing
Authority (PA) /Parking
System Revenues/1 LT LT BB- Affirmed BB-
RATING RATIONALE
The rating reflects the system's underlying market and constrained
financial profile given the elevated aggregate leverage, which has
led to increased risk related to asset preservation should
cashflows prevent adequate levels of funding for capital and
maintenance needs. The system retains financial flexibility in the
form of its surety contracts to meet short-term financial
commitments. However, the system's financial capacity to meet all
future obligations, including reimbursements to Assured Guaranty
(AGM) and Dauphin County for draws on the debt service reserve fund
and the funding of necessary maintenance capex, is vulnerable to
adverse changes in the economic environment.
Although the parking system maintains healthy coverage on a senior
basis, coverage including subordinate debt obligations is
significantly lower and has not been in compliance with the rate
covenant for several years. The rating case reflects senior
coverage net of senior operating expenses averaging 2.4x through
maturity, while all-in coverage net of senior and subordinate
operating expenses averages 1.0x through 2053. Fitch expects
parking system cash flows and current fund balances to remain
narrow, providing limited internal resources for maintenance capex
due to the low priority in the payment waterfall of capital reserve
account replenishment.
KEY RATING DRIVERS
Revenue Risk - Volume - Weaker
Dominant Position, Lagging Performance: The system includes 11
parking facilities with a total of 7,694 spaces and 1,260 spaces of
on-street metered parking covering around 70% of public parking in
Harrisburg. Strong non-compete covenants are expected to provide
adequate market share protection. However, while the high degree of
government jobs in the area provide some degree of demand stability
by way of commonwealth parking contracts, the system still depends
on university enrollment and economic growth in the Harrisburg
area, and parking revenues are likely to mirror the tepid
historical performance. Rates currently remain competitive versus
the national average, which provides economic rate-making
flexibility if the authority pursues rate increases above the
inflation rate to address revenue underperformance and fund
lifecycle investments.
Revenue Risk - Price - Midrange
Moderate Price Flexibility: Contracted rate schedules provided for
large upward adjustments prior to 2017, and the current mechanism
allows for annual escalators broadly in line with inflation. The
approval procedures for rate adjustments above the annual
escalators could face political risks, which may serve to limit
rate-making flexibility, although the authority has a historical
precedent of implementing significant increases.
Infrastructure Dev. & Renewal - Weaker
Capital Plan Exhibits Risk: The weaker assessment reflects the
system's limited excess cash flows to pay-go fund major maintenance
costs as well as to replenish the capital reserve account at
appropriate levels. Repayments to draws on debt service reserves
tied to the junior obligations are prioritized higher than capital
reserves in the system's flow of funds. Funded with bond proceeds
at the original financing in 2013, a $9 million capital reserve has
been spent down to a current level of $1.6 million and remains at
risk of full depletion absent a source of infusion, as management
expects to spend $1.5 million through 2025. In addition,
inflationary pressures could cause capex costs to rise at a faster
rate than revenue causing further tightening of cash flow for
capital improvements. The continued deferral of maintenance also
pushes up costs as asset conditions deteriorate. Timing and capital
planning remain unclear since the next parking system condition
report has been moved to 2025 when the authority anticipates
additional revenues will be available for capital improvements.
Debt Structure - 1 - Midrange
Fixed-Rate, Weak Structural Features: The midrange assessment
reflects the senior ranking of the 2013A bonds in the project's
capital structure and the parking system's fixed rate and fully
amortizing debt profile. Senior tenor is long with a 30-year final
maturity. Debt service escalates through maturity due to a
combination of current interest and capital appreciation bonds.
Weak structural features include limited requirements for liquidity
and leverage protections, no established operating reserves, and
debt service reserves funded through surety policies instead of
cash.
Financial Profile
The parking system has a high aggregate leverage and an escalating
debt service profile, including capital appreciation structured
bonds, which requires significant revenue growth to cover
increasing capital needs. All-in coverage including subordinate
debt was 1.0x in 2022, falling below the rate covenant (two prong
test of 1.0x all obligations and 1.25x all debt service net of
current expenses) for the sixth time since 2013. In Fitch's rating
case senior-lien coverage averages 2.4x from 2023 through 2032 and
2.4x through debt maturity, based on a net revenue calculation
including senior operating expenses only. The 10-year average
coverage of total project costs, including subordinated debt
obligations and debt service reserve draw reimbursements, is less
than sum sufficient at 0.9x.
PEER GROUP
The closest publicly Fitch-rated peer is Miami Parking
(A/Positive). This parking credit represents a larger city system
in a very strong MSA. Miami Parking's higher rating reflects its
robust liquidity and stronger financial metrics of average Fitch
rating case debt service coverage ratio (DSCR) above 6.0x and
leverage of less than 1.0x.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Parking activity and revenue generation that fall below rating
case expectations;
- Deteriorating asset conditions causing a decline in demand;
- Continued periods of reserve draws for the subordinate
obligations and failure to adhere to the current reserve draw
reimbursements under agreements with both Dauphin County and
Assured Guaranty.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Positive rating action is not expected in the near term given the
constrained financial profile coupled with uncertain capital needs
and funding;
- Over the medium term, sustained total coverage in excess of the
1.25x covenanted levels in conjunction with the demonstrated
ability to build-up the capital reserve account and address
expected capital needs would be supportive of a positive rating
action.
CREDIT UPDATE
Net revenues for the parking system in 2022 reached 94% of
pre-pandemic levels in 2019 demonstrating continued revenue
recovery trends. As of June 2023, YTD revenues net of parking tax
are down 4% from pre-pandemic levels in 2019, and 3% above the same
period in 2022. Operating expenses are currently on budget, and
management forecasts that fiscal 2023 all-in DSCR net of senior
operating expenses for the series A, B, and C bonds will be
slightly above 1.0x.
The Commonwealth parking contract rates increased per the lease
terms in 2023. In addition, negotiations are taking place with the
City of Harrisburg regarding an increase in ticket rates. The
addition of meter spaces in the area around the new federal
courthouse is expected to provide additional revenues after opening
near the end of 2023.
On May 8, 2023, the authority's asset manager provided an updated
Corrective Action Plan (CAP) to repay debt service reserve draws of
$1.7 million in 2021 and $2.0 million in 2022 to Dauphin County and
AGM. Pursuant to the Series B guaranty, Dauphin County reimbursed
AGM for the 2021 Series B surety draw. PEDFA is responsible for
reimbursing Dauphin County and Assured Guaranty for the reserve
repayment within one year per the bond indenture. The CAP was
accepted by the Credit Enhancers, which extended the cure period
for the 2021 and 2022 reimbursement default to May 2024. The
current CAP expects full reimbursement of the draws to both Dauphin
County and Assured Guaranty by 2025. The timeline included in the
CAP suggests the willingness to provide an additional extension to
the cure period past the current May 2024 expiration.
Management does not expect further draws on the debt service
reserve contracts. Parking system cash flows and current fund
balances remain very narrow and provide limited internal resources
for maintenance capex as replenishment of the capital reserve
account is lower in priority than the debt service reserve
replenishments in the payment waterfall.
FINANCIAL ANALYSIS
Fitch's Base and Rating cases both incorporate reimbursements of
the draws on series B and C debt service in 2020 and 2021 with the
final reimbursement of debt service reserve draws in 2025. Fitch's
base case incorporates management's forecast for the next five
years. Revenues for 2023 are projected to exceed pre-pandemic
revenues in 2019. Total system revenues grow at a 10-year CAGR of
4.3%. Under this scenario, Fitch-calculated senior DSCR averages
2.6x through 2032, while all-in DSCR averages 1.1x, below the rate
covenant of 1.25x. Fitch's all-in DSCR calculation includes senior
expenses pursuant to the trust indenture's flow of funds, but does
not include subordinate expenses or capex needed to maintain the
system. With the additional subordinate expenses and capex, DSCR is
below sum sufficient, averaging slightly below 1.0x through 2032.
PEDFA's all-in leverage is projected to decrease to 16.9x in 2023
and steadily drop down to 12.9x by 2027.
Fitch's rating case assumes revenues for 2023 will recover to 97%
of 2019 levels and exceed pre-pandemic levels in 2024. Garage
revenues are expected to have a slower recovery reaching 2019
levels by 2025. Total system revenues grow at a 10-year CAGR of
3.3%. Fitch-calculated senior DSCR averages 2.4x throughout 2032,
while all-in DSCR net of senior opex only averages 1.0x, which is
below the rate covenant. The all-in average DSCR (net of
subordinate opex and capex) of 0.9x is less than sum sufficient.
PEDFA's total leverage is projected to decrease steadily from 17.9x
in 2023 to 14.2x in 2027.
SECURITY
The series 2013A senior bonds are secured by a senior in payment
gross pledge of the parking revenues (which are net of a 20%
off-street parking tax to the city) generated by the capitol region
parking system's facilities and meters.
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.
PERMIAN RESOURCES: Fitch Puts 'BB-' LongTerm IDR on Watch Positive
------------------------------------------------------------------
Fitch Ratings has placed the Long-Term Issuer Default Ratings (BB-)
and all Issue-level ratings of Permian Resources Corporation and
Permian Resources Operating, LLC (collectively Permian Resources or
PR) on Rating Watch Positive (RWP).
The Positive Rating Watch follows the announcement that PR has
entered into a definitive agreement to acquire Earthstone Energy,
Inc. (ESTE; 'B+'/RWP) and all related subsidiaries in an all-stock
transaction valued at approximately $4.5 billion, including the
assumption of all ESTE debt. The combined company will be one of
the largest producers in the Permian with 400,000 total net acres
split between the Delaware and Midland basins and total production
of approximately 300 Mboepd (46% oil). The transaction is also
expected to materially enhance FCF generation, improve overall
returns via drilling and completion efficiencies and create
approximately $175 million of identified synergies.
Fitch expects to resolve the Rating Watch upon closing of the
transaction, which is currently expected by YE 2023. Although
unlikely, Fitch recognizes that the closing of the transaction and
resolution of the RWP could take longer than six months.
KEY RATING DRIVERS
Credit-Friendly Acquisition: Fitch views the proposed $4.5 billion
transaction favorably given the stock-for-stock exchange between PR
and ESTE at a fixed exchange ratio of 1.446 shares, representing an
8% premium based on the 20-day volume weighted average share
prices. Both companies currently exhibit fairly conservative
balance sheets which leads to Fitch forecasted pro forma 2024
leverage of 1.1x, consistent with similar-sized peers. The improved
pro forma FCF profile will also allow for continued debt reduction
and accelerated shareholder returns.
Enhanced Permian Footprint: The proposed acquisition will
materially enhance PR's size and scale with pro forma Permian net
acres of approximately 400,000, primarily in the Delaware, total
production of approximately 300 Mboepd (46% oil) and adds
significant core inventory in the Delaware basin which immediately
competes for capital. PR will retain its status as a pure-play
Permian producer which should drive operational improvements,
including improved drilling and completion efficiencies, lower
operating costs and G&A benefits, which should improve overall
returns.
Synergy Potential; Strong FCF: Fitch believes synergies associated
with the deal are achievable by YE 2024. Management has identified
approximately $175 million of estimated annual synergies, including
$115 million stemming from operational efficiencies and cost
savings, $30 million in G&A synergies and $30 million in cost of
capital savings via refinancing opportunities for ESTE's notes once
callable. Fitch believes the reduced cost structure should improve
post-base dividend FCF generation, which Fitch currently estimates
at over $500 million in 2024 at its $70/bbl WTI price assumption.
Adequate Hedge Profile: Fitch believes PR's hedge book supports
further reductions of the RBL and provides adequate downside
protection for the company's dividend. PR is currently hedging
approximately 30% of its 2H23 oil production at a weighted average
floor price of $82 WTI in addition to approximately 30% of its
natural gas production. The company's 2024 hedge coverage is
currently minimal, but Fitch expect management to increase 2024
hedge coverage to approximately 30% by transaction close.
Balanced Shareholder Returns: Management remains committed to
returning at least 50% of its post-base dividend FCF to
shareholders via variable dividends and share repurchases.
Post-close, PR plans to increase its quarterly base dividend by 20%
to $0.06/share and Fitch expects sustainable dividend growth over
the medium to long term. Fitch believes the dividend program is
supported by the company's asset, hedging and FCF profiles and also
provides flexibility to further strengthen the balance sheet over
time.
DERIVATION SUMMARY
PR's pro forma production profile of approximately 300 Mboepd (46%
oil) compares similarly to Civitas Resources, Inc. (BB/Positive;
270-290 pro forma the Hibernia and Tap Rock transactions) and
Endeavor Energy Resources, L.P. (BBB-/Stable; 258 Mboepd in 2Q22),
is larger than Murphy Oil Corporation (BB+/Stable; 191 Mboepd as of
2Q23), but trails APA Corporation (BBB-/Stable; 399 Mboepd as of
2Q23). The company has historically maintained Fitch-calculated
unhedged cash netbacks around the Permian peer average, which
should improve following operational enhancements and execution on
synergies.
Fitch forecasts 2024 pro forma leverage of approximately 1.1x,
which is consistent with Fitch's E&P peer group and could further
improve following debt reduction.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Fitch expects to resolve the RWP upon completion of the
contemplated transactions under the proposed terms;
- Average daily production approaching 175Mboepd while maintaining
economic inventory and reserve life;
- Realization of operational savings that improves unit costs,
netbacks and enhances FCF generation;
- Mid-cycle EBITDA leverage sustained below 2.0x.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Inability to generate FCF and failure to reduce RBL borrowings
that materially erodes the liquidity profile;
- Loss of operational momentum leading to average daily production
approaching 125Mboepd;
- Deviation from stated conservative financial and capital
allocation policy;
- Mid-cycle EBITDA leverage sustained above 2.5x.
LIQUIDITY AND DEBT STRUCTURE
Adequate Liquidity: Fitch expects PR's pro forma liquidity profile
will remain adequate and is supported by strong FCF. At 2Q23, PR
had $18 million of cash on hand and $1.2 billion in available
borrowing capacity on its $1.5 billion reserve-based lending credit
facility (RBL). Management has secured an additional $500 million
of commitments from lenders which will increase the pro forma
aggregate commitment amount from $1.5 billion to $2.0 billion
post-close.
Fitch expects the company's credit facility will be less than 50%
drawn at close, with the expectation that FCF will be allocated to
further reduce borrowings. Fitch's forecast of over $500 million of
post-base dividend FCF in 2024 supports the liquidity profile and
reduction of the RBL balance going forward.
ISSUER PROFILE
Pro forma the announced Earthstone acquisition, PR will remain a
pure-play Permian basin operator with approximately 400,000 total
net acres and 300 Mboepd of oil-weighted production.
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.
Entity/Debt Rating Recovery Prior
----------- ------ -------- -----
Permian Resources
Operating, LLC LT IDR BB- Rating Watch On BB-
senior
unsecured LT BB- Rating Watch On RR4 BB-
senior secured LT BB+ Rating Watch On RR1 BB+
Permian Resources
Corporation LT IDR BB- Rating Watch On BB-
PROFUNDITY LLC: Case Summary & Six Unsecured Creditors
------------------------------------------------------
Debtor: Profundity LLC
7270 NW 12th ST.
Suite 760
Miami, FL 33126
Business Description: Profundity is engaged in the business of
commercial and industrial machinery and
equipment rental and leasing.
Chapter 11 Petition Date: August 23, 2023
Court: United States Bankruptcy Court
Southern District of Florida
Case No.: 23-16720
Debtor's Counsel: Brett D. Lieberman, Esq.
EDELBOIM LIEBERMAN REVAH PLLC
20200 W. Dixie Hwy
Suite 905
Miami, FL 33180
Tel: 305-768-9909
Email: brett@elrolaw.com
Total Assets: $3,813,041
Total Liabilities: $5,191,494
The petition was signed by Eugene Kesselman as CEO of Managing
Member.
A full-text copy of the petition containing, among other items, a
list of the Debtor's six unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/4QEG6EY/Profundity_LLC__flsbke-23-16720__0001.0.pdf?mcid=tGE4TAMA
PURE FISHING: S&P Upgrades ICR to 'CCC', Outlook Negative
---------------------------------------------------------
S&P Global Ratings raised its issuer credit rating on South
Carolina-based fishing equipment manufacturer Pure Fishing to 'CCC'
from 'SD' (selective default) and its issue-level rating on its
first-lien term loan to 'CCC' from 'D'.
The negative outlook reflects that Pure Fishing may default or
undertake another restructuring in the next 12 months and is
dependent on favorable business, financial, and economic conditions
to meet its financial commitments.
Sycamore Partners Management L.P., the financial sponsor of Pure
Fishing, recently repurchased the company's entire $255 million
second-lien term loan (not rated) at a significant discount to face
value. In addition, it is S&P's understanding the sponsor
repurchased about a quarter of Pure Fishing's first-lien term loan
at a deep discount to face value through a series of open-market
transactions over the past several months. S&P viewed these
repurchases as tantamount to a default because of the company's
ongoing cash burn and need for additional liquidity this year, as
well as its lenders' receipt of less than par value without
adequate offsetting compensation.
The 'CCC' rating reflects Pure Fishing's less-than-adequate
liquidity, minimal fixed charge coverage, and unsustainably high
leverage, which increase the likelihood of another restructuring or
default in the next 12 months. The company continues to struggle
because of retail customer de-stocking this year, which has
negatively affected the entire industry, and we expect very weak
credit metrics through 2024. S&P said, "We continue to view Pure
Fishing's capital structure as unsustainable because we expect very
high leverage through 2024, with no room for operating missteps or
unexpected headwinds. Despite our forecast for an approximate $100
million working capital benefit this year as the company clears
excess inventory, we expect the company's cash flow will be
insufficient to cover its fixed charges. In addition, Pure Fishing
would be unable to absorb low-probability adversities and will have
limited covenant headroom under its springing asset-based lending
(ABL) covenant, which increases the possibility of another
restructuring or a conventional default in the next 12 months. We
expect the company will burn cash through 2024, despite its
attempts to ramp-up its production and improve its operations
through various cost-savings measures and sales initiatives,
because it remains burdened by its significant interest expense due
to its sizable debt balances and predominantly floating-rate
capital structure. Heightened price promotions from competitors or
slower retailer re-stocking could hurt the company's operating
performance beyond our base-case assumptions, further eroding its
margins and straining its liquidity."
S&P said, "In our updated base case, we assume Pure Fishing's net
sales decline by the 5%-10% range in 2023 and increase by the low-
to mid-single digit percent area in 2024. At this level of revenue,
the company will begin to increase its reported EBITDA and likely
benefit from higher flow through to cash flow. However, we believe
it is unlikely that Pure Fishing will generate sufficient cash flow
to support its current fixed charges in 2023 and 2024 at these
revenue and EBITDA levels. Additionally, the company's $60 million
real estate-backed loan from financial-sponsor Sycamore matures in
October 2024. Based on our forecast, Pure Fishing may require
external financing or another restructuring to meet this
obligation."
Pure Fishing participates in a highly fragmented and competitive
industry amid an evolving retail landscape and is subject to
potential supply chain disruptions. The company competes with other
large global fishing equipment makers, such as Daiwa, Shimano Inc.,
Rather Outdoors, and Rapala, while the majority of its market is
controlled by regional players (with smaller product scope) and
private-label brands. S&P assumes that Pure Fishing will maintain
its market share over the next several years because of its good
brands and favorable consumer demographics, even though its market
share could shift in 2023 depending on the magnitude of its
competitors' promotional pricing actions. The company sources the
majority of its products from China and Southeast Asia, which
exposes it to potential supply chain disruptions.
The company's portfolio of quality brands may help it retain avid
customers over the long term despite its near-term liquidity risks.
Too much inventory at manufacturers and too little demand at
retailers led to significant revenue and cash flow volatility for
Pure Fishing in 2022. Despite this, the company offers a full suite
of fishing equipment products, including durables, consumables, and
accessories. The company's portfolio comprises iconic fishing
brands, such as Berkley, Abu Garcia, and Shakespeare, among others.
With 25 brands, Pure Fishing typically uses store-level data,
weather reports, and fishery reports to inform its retailer
assortments and optimize its shelf space. The company's broad
portfolio caters to consumers in multiple demographics, experience
levels, and price points. Pure Fishing's current customer base
skews more toward avid anglers, which we view favorably because
this will likely provide it with recurring revenue over most
economic cycles. Fishing as a pastime has a track record of
resilience during downturns, primarily because it is a low-cost
leisure activity with an enthusiastic consumer base. Furthermore,
we believe avid anglers tend to fish more during periods of reduced
employment. Therefore, in a downturn, we believe Pure Fishing's
sales mix will likely shift toward its consumables segment, which
benefit from higher margins and provide a recurring source of
revenue.
A significant portion of Pure Fishing's debt is held by its
financial sponsor, which may provide some optionality, though it
will still face refinancing challenges in 2025. Sycamore currently
owns 100% of the company's $255 million second-lien term loan due
December 2026, $60 million real estate-backed loan due October
2024, and $50 million promissory note due February 2027. In
addition, it holds 25% of Pure Fishing's $719 million first-lien
term loan due December 2025. This could provide the company with
the opportunity to convert some portion of the cash interest on its
debt to paid-in-kind interest if it encounters a near-term
liquidity crisis and needs to conserve cash. However, this would
only be a short-term solution due to the high interest rates on
this debt, which would likely lead to an even greater debt balance
at the time of its potential refinancing. A refinancing at
acceptable terms would be challenging and most likely require a
significant improvement in the company's operating performance.
Sycamore could also potentially convert some or all of its debt
holdings to equity if it supports a refinancing or restructuring in
some form.
The negative outlook reflects that Pure Fishing may default or
undertake another restructuring in the next 12 months and is
dependent on favorable business, financial, and economic conditions
to meet its financial commitments.
S&P could lower its rating on Pure Fishing by one or more notches
if its liquidity weakens and it believes a distressed debt
exchange, restructuring, or default is imminent.
S&P could raise its rating on Pure Fishing if it is certain it can
substantially improve its liquidity, achieve full coverage of fixed
charges, and demonstrate that it can reduce leverage to sustainable
levels.
R L BURNS: Wins Cash Collateral Access Thru Sept 12
---------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida,
Orlando Division, authorized R L Burns, Inc. to use cash collateral
on an interim basis through September 12, 2023.
The Debtor is authorized to use cash collateral to pay: (a) amounts
expressly authorized by the Court, including payments to the United
States Trustee for quarterly fees; (b) current and necessary
expenses set forth in the; and (c) additional amounts as may be
expressly approved in writing by Creditor within 48 hours of the
Debtor's request.
The U.S. Small Business Administration, Truist Bank, NA and
Guarantee Company of North America USA will have a perfected
post-petition lien against cash collateral to the same extent and
with the same validity and priority as the pre-petition lien,
without the need to file or execute any documents as may otherwise
be required under applicable non-bankruptcy law.
The Debtor will maintain insurance coverage for its property in
accordance with the obligations under the loan and security
documents with the SBA, Truist, and Guarantee.
A continued hearing on the matter is set for September 12 at 10:30
a.m.
A copy of the court's order and the Debtor's budget is available at
https://urlcurt.com/u?l=IBObz1 from PacerMonitor.com.
The Debtor projects total operating expenses, on a monthly basis,
as follows:
$79,180 for August 2023;
$79,180 for September 2023;
$79,180 for October 2023; and
$79,180 for November 2023.
About R L Burns, Inc.
R L Burns, Inc. is a full-service general contractor headquartered
in Downtown Orlando that has provided quality construction
solutions in the greater Central Florida area for more than 29
years. Its project history includes a wide variety of construction
projects, including community centers, parks, medical facilities,
education facilities, office buildings, and transportation
facilities.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. M.D. Fla. Case No. 23-02186) on June 2,
2023. In the petition signed by CEO Robert L. Burns Sr., the Debtor
disclosed $751,416 in assets and $3,997,262 in liabilities.
Judge Grace E. Robson oversees the case.
Jeffrey S. Ainsworth, Esq., at Bransonlaw, PLLC, represents the
Debtor as legal counsel.
REGIONAL HOUSING: Taps Crexi as Real Estate Marketing Platform
--------------------------------------------------------------
Regional Housing & Community Services Corp. and its affiliates seek
approval from the U.S. Bankruptcy Court for the Northern District
of Georgia to hire Commercial Real Estate Exchange, Inc. (Crexi) as
their real estate marketing platform.
The services that Crexi will provide to the Debtors include, but
shall not be limited to, assistance in marketing the Montgomery II
Assets for sale, identification of potential buyers and negotiation
of terms for a sale transaction.
Crexi will receive a transaction fee of 5 percent of the winning
bid amount or $20,000, whichever is greater. This amount will be
added to the bidder's winning bid amount. As such, the transaction
fee will be paid by the winning bidder to Crexi at closing.
As disclosed in the court filings, Crexi is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
Eli Randel
Commercial Real Estate Exchange, Inc.
5510 Lincoln Blvd Suite 400
Los Angeles, CA 90094
Phone: 1 888 511 0598
Email: compliance@crexi.com
About Regional Housing & Community Services
Regional Housing & Community Services Corp. and its
debtor-affiliates filed a voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ga. Lead Case No.
21-41034) on Aug. 6, 2021. At the time of the filing, Regional
Housing & Community Services listed as much as $100,000 in both
assets and liabilities.
Judge Paul W. Bonapfel oversees the cases.
The Debtors tapped Scroggins & Williamson, P.C. as legal counsel;
GGG Partners, LLC as interim management services provider;
Gorefine, Schiller & Gardyn, P.A. as accountant; and SLIB II, Inc.,
doing business as Senior Living Investment Brokerage, as investment
banker. Kurtzman Carson Consultants, LLC is the claims, noticing
and balloting agent.
Greenberg Traurig, LLP serves as counsel for indenture trustee, UMB
Bank, N.A.
Melanie S. McNeil has been appointed as the patient care ombudsman
in the Debtors' cases.
RESERVE TECH: Robert Goe Named Subchapter V Trustee
---------------------------------------------------
The U.S. Trustee for Region 16 appointed Robert Goe, Esq., a
practicing attorney in Irvine, Calif., as Subchapter V trustee for
Reserve Tech Inc.
Mr. Goe will be paid an hourly fee of $545 for his services as
Subchapter V trustee while his case administrator, Arthur Johnston,
will be paid an hourly fee of $195. In addition, the Subchapter V
trustee will receive reimbursement for work-related expenses
incurred.
Mr. Goe declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Robert P. Goe, Esq.
17701 Cowan
Building D, Suite 210
Irvine, CA 92614
Telephone: (949) 798-2460
Facsimile: (949) 955-9437
Email: bktrustee@goeforlaw.com
About Reserve Tech
Reserve Tech Inc., doing business as AcquireCrowd, provides
advertising, public relations, and related services. It is based in
Newport Beach, Calif.
Reserve Tech filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. C.D. Calif. Case No. 23-11603) on Aug. 7,
2023, with $1,280,293 in assets and $2,688,692 in liabilities.
Wesley Eads, chief executive officer, signed the petition.
Judge Scott C. Clarkson oversees the case.
Caroline R. Djang, Esq., at Buchalter represents the Debtor as
legal counsel.
RJT FOOD: Trustee Gets OK to Hire Joseph A. Broderick as Accountant
-------------------------------------------------------------------
Salvatore LaMonica, Chapter 11 trustee for RJT Food & Restaurant,
LLC, received approval from the U.S. Bankruptcy Court for the
Eastern District of New York to hire Joseph A. Broderick, P.C. as
his accountant.
The firm's services include:
a. assisting the trustee in preparing monthly operating
reports and cash receipts and disbursement reports;
b. preparing tax returns;
c. reviewing and analyzing documents for potential causes of
action on behalf of the estate, including for preferential
transfers and fraudulent conveyances;
d. preparing any necessary reports detailing claims in
anticipation of litigation;
e. assisting the trustee in investigating the disposition of
funds prior to and subsequent to the petition date; and
f. assist the trustee with such other matters as the trustee
or his counsel may request from time to time.
The firm will charge these hourly fees:
Partners $350
Seniors $190
Staff $100
Joseph Broderick, a certified public accountant and sole owner of
the firm, disclosed in a court filing that his firm is a
"disinterested person" within the meaning of Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
Joseph A. Broderick, CPA
Joseph A. Broderick, PC
734 Walt Whitman Rd
Melville, NY 11747
Phone: +1 631-462-1779
About RJT Food & Restaurant
RJT Food & Restaurant, LLC filed its voluntary Chapter 11 petition
(Bankr. E.D.N.Y. Case No. 23-70447) on Feb. 8, 2023, with $1
million to $10 million in assets and up to $50,000 in liabilities.
Richard J. Bivona, president, signed the petition.
Judge Robert E. Grossman oversees the case.
Ronald D. Weiss, Esq., at Ronald D. Weiss, P.C. represents the
Debtor as counsel.
Salvatore LaMonica, the court-appointed Chapter 11 trustee, tapped
LaMonica Herbst & Maniscalco, LLP and Joseph A. Broderick, P.C. as
his legal counsel and accountant, respectively.
ROCKPORT COMPANY: Sept. 14 Claims Filing Deadline Set
-----------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware set Sept.
14, 2023, at 5:00 p.m. (ET) as the last date and time for persons
and entities to file their proofs of claim against The Rockport
Company LLC and its debtor-affiliates.
The Court also set Dec. 11, 2023, at 5:00 p.m. (ET) as the deadline
for all governmental units to file their claims against the
Debtors.
All claimants must submit -- by overnight mail, courier service,
hand delivery, regular mail or in person -- an original, written
Proof of Claim that substantially conforms to the Official
Bankruptcy Form No. B 410 or the enclosed Proof of Claim Form so as
to be actually received by Epiq by no later than 5:00 p.m.
(prevailing Eastern Time) on or before the applicable Bar Date at
the following address:
a) If by First-Class Mail:
The Rockport Company, LLC
Claims Processing Center
c/o Epiq Corporate Restructuring, LLC
P.O. Box 4419
Beaverton, OR 97076-4419
b) If by Hand Delivery or Overnight Mail:
The Rockport Company, LLC
Claims Processing Center
c/o Epiq Corporate Restructuring, LLC
10300 SW Allen Blvd.
Beaverton, OR 97005
Alternatively, claimants may submit a Proof of Claim electronically
through the electronic Claims filing system available at
https://dm.epiq11.com/rockport.
The proof of claim form and bar date order, and all other pleadings
are available free of charge on Epiq's website at
https://dm.epiq11.com/case/rockport
If you have questions concerning the filing process or processing
of claims, contact the Debtors' claims and noticing agent, Epiq, by
email at Rockport@epiqglobal.com or by telephone at (888) 565-0258
for U.S. Parties or +1 (503) 660-4989 for non-U.S. Parties.
About Rockport Co. LLC
The Rockport Company, LLC -- https://www.rockport.com/ -- offers a
collection of men's and women's brands that provide comfortable
shoes for every occasion. The company and its subsidiaries are
global designers, distributors and retailers of comfort footwear in
more than 50 markets worldwide.
Rockport Company and its affiliates first sought Chapter 11
bankruptcy protection (Bankr. D. Del. Lead Case No. 18-11145) on
May 14, 2018. The business was taken out of bankruptcy after the
court approved the sale of substantially all of Rockport Company's
assets to an affiliate of Charlesbank Equity Fund IX, LP.
Rockport Company and its affiliates again sought relief under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case
No. 23-10774) on June 15, 2023. In the petition filed by its chief
restructuring officer, Joseph Marchese, Rockport Company reported
$50 million to $100 million in both assets and liabilities.
In the new Chapter 11 cases, the Debtors tapped Potter Anderson &
Corroon, LLP as legal counsel; Miller Buckfire & Co., LLC as
financial advisor and investment banker; and PKF Clear Thinking as
personnel provider. Epiq Corporate Restructuring, LLC is the claims
and noticing agent and administrative advisor.
The U.S. Trustee for Region 3 appointed an official committee to
represent unsecured creditors in the Debtors' Chapter 11 cases. The
committee is represented by Cole Schotz, P.C.
SHERMAN/GRAYSON HOSPITAL: Committee Taps Potter Anderson as Counsel
-------------------------------------------------------------------
The official committee of unsecured creditors of Sherman/Grayson
Hospital, LLC seeks approval from the U.S. Bankruptcy Court for the
District of Delaware to employ Potter Anderson & Corroon, LLP as
its counsel.
The firm's services include:
a. advising the committee with respect to its rights, powers
and duties;
b. advising the committee in its consultations with the Debtor
relative to the administration of the Chapter 11 case;
c. advising the committee in analyzing the claims of the
Debtor's creditors and in negotiating with such creditors;
d. reviewing financial and operational information furnished
by the Debtor to the committee;
e. investigating, and advising the committee with respect
thereto, the acts, conduct, assets, liabilities, and financial
condition of the Debtor and/or insiders, the operations of the
Debtor's business and the desirability of the continuance of such
business, motions filed, assets of the estate and any other matters
relevant to the Chapter 11 Case or to the formulation of a plan
and/or exit strategy;
f. advising the committee with respect to the contemplated
sale of the Debtor's assets, and assisting, participating, and
attending any related auction and sale process;
g. assisting the committee in its analysis of, and
negotiations with, the Debtor or any third party concerning matters
related to, among other things, cash collateral usage and financing
to be obtained in the Chapter 11 Case and the terms of any plan of
reorganization or liquidation of the Debtor;
h. conferring with the Debtor's management and counsel and any
other retained professional;
i. conferring with the principals, counsel and advisors of the
Debtor's lenders and equity holders;
j. assisting and advising the committee with respect to its
communications with the general creditor body regarding significant
matters in the Chapter 11 Case;
k. representing the committee at hearings and other
proceedings;
l. attending the meetings of the committee;
m. reviewing and analyzing applications, orders, statements of
operations, and schedules filed with the Court and advising the
committee as to their propriety;
n. taking necessary actions to protect and preserve the
interests of the committee, including, but not limited to (i)
possible prosecution of actions on its behalf, (ii) if appropriate,
negotiations concerning all litigation in which the Debtor is
involved, and (iii) if appropriate, reviewing and analyzing claims
filed against the Debtor's estate;
o. appearing, as appropriate, before this Court and the
appellate courts, to protect the interests of the committee before
those courts;
p. assisting the committee in preparing and filing pleadings,
motions, applications, answers, orders, reports and papers as may
be necessary in furtherance of the committee's interests and
objections; and
q. performing such other legal services.
The firm will charge these hourly fees:
Partners $675 to $865
Counsel $705
Associates $515
Paraprofessionals $350
Christopher Samis, Esq., a member of Potter Anderson, disclosed in
a court filing that his firm is a "disinterested person" as that
term is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Christopher M. Samis, Esq.
Aaron H. Stulman, Esq.
Elizabeth R. Schlecker, Esq.
Potter Anderson & Corroon, LLP
1313 North Market Street, 6th Floor
Wilmington, DE 19801
Tel: (302) 984-6000
Fax: (302) 658-1192
Email: csamis@potteranderson.com
astulman@potteranderson.com
eschlecker@potteranderson.com
About Sherman/Grayson Hospital
Sherman/Grayson Hospital, LLC is the operator of Wilson N. Jones
Regional Medical Center, a 207-bed acute care hospital in Sherman,
Texas.
Sherman/Grayson Hospital sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. Del. Case No. 23-10810) on June 23,2023,
with $1 million to $10 million in assets and $50 million to$100
million in liabilities. Judge J. Kate Stickles oversees the case.
Leonard M. Shulman, Esq., at Shulman Bastian Friedman & Bui, LLP
and Rosner Law Group, LLC serve as the Debtor's bankruptcy counsel
and Delaware counsel, respectively.
The U.S. Trustee for Region 3 appointed an official committee to
represent unsecured creditors in the Debtor's Chapter 11 case. The
committee tapped Potter Anderson & Corroon, LLP and RK Consultants,
LLC as legal counsel and financial advisor.
SHERMAN/GRAYSON: Committee Taps RK Consultants as Financial Advisor
-------------------------------------------------------------------
The official committee of unsecured creditors of Sherman/Grayson
Hospital, LLC seeks approval from the U.S. Bankruptcy Court for the
District of Delaware to employ RK Consultants LLC as its financial
advisor.
The firm will render these services:
a) analyze the financial operations of the Debtor pre and
post-petition, as necessary;
b) analyze the financial ramifications of any proposed
transactions for which the Debtor seeks Bankruptcy Court approval
including, but not limited to, post-petition financing, sale of all
or a portion of the Debtor's assets, retention of management and/or
employee incentive and severance plans;
c) conduct any requested financial analysis including
verifying the material assets and liabilities of the Debtor, as
necessary, and their value;
d) assist the committee in its review of monthly financial
statements of operations submitted by the Debtor;
e) perform claims analysis for the committee;
f) assist the committee in its evaluation of cash flow and/or
other projections, including business plans prepared by the
Debtor;
g) scrutinize cash disbursements on an on-going basis for the
period subsequent to the commencement of the case;
h) perform forensic investigating services, as requested by
the committee and counsel, regarding pre-petition activities of the
Debtor in order to identify potential causes of action, including
improvements in position and fraudulent transfers;
i) analyze transactions with insiders, related and/or
affiliated companies;
j) analyze transactions with the Debtor's financial
institutions;
k) attending meetings and conferences calls with
representatives of the creditor groups and their counsel;
l) as needed, prepare alternative business projections
relating to the valuation of the Debtor's business enterprise;
m) monitor the Debtor's sale process, assist the committee in
evaluating sale proposals and alternatives and attend any auctions
of the Debtor's assets;
n) assist the committee in its review of the financial aspects
of a plan of reorganization or liquidation and perform any related
analyses, including liquidation and feasibility analyses and
evaluate best exit strategy; and
o) perform services necessary to preserve and maximize the
value of the assets of the Debtor's estate, as requested by the
committee.
The firm will be paid at these rates:
Brian R. Ryniker $450 per hour
Junior Professionals $200 per hour
Brian Ryniker, a partner at RK Consultants, disclosed in a court
filing that his firm is a "disinterested person" as the term is
defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Brian Ryniker
RK Consultants, LLC
1178 Broadway, 3rd Floor, Suite 1505
New York, NY 10001
Phone: 646-341-3926
Email: brian@rkc.llc
About Sherman/Grayson Hospital
Sherman/Grayson Hospital, LLC is the operator of Wilson N. Jones
Regional Medical Center, a 207-bed acute care hospital in Sherman,
Texas.
Sherman/Grayson Hospital sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. Del. Case No. 23-10810) on June 23,2023,
with $1 million to $10 million in assets and $50 million to$100
million in liabilities. Judge J. Kate Stickles oversees the case.
Leonard M. Shulman, Esq., at Shulman Bastian Friedman & Bui, LLP
and Rosner Law Group, LLC serve as the Debtor's bankruptcy counsel
and Delaware counsel, respectively.
The U.S. Trustee for Region 3 appointed an official committee to
represent unsecured creditors in the Debtor's Chapter 11 case. The
committee tapped Potter Anderson & Corroon, LLP and RK Consultants,
LLC as legal counsel and financial advisor.
SKILLSOFT CORP: S&P Affirms 'B-' ICR, Outlook Stable
----------------------------------------------------
S&P Global Ratings affirmed its 'B-' rating on Skillsoft Corp. The
outlook remains stable.
The stable outlook on Skillsoft reflects S&P's expectation that the
company will grow revenues a low-single-digit percent and generate
positive free cash flow in fiscal 2024.
S&P said, "We expect financial metrics to improve in fiscal
2024.Skillsoft reiterated its guidance of low-single-digit percent
improvements in bookings, revenues, and EBITDA margins in fiscal
2024. We now expect the company to generate about $20 million of
free cash flow in fiscal 2024. We also expect meaningful reductions
in one-time costs this year. The company also has adequate
liquidity of greater than $200 million as of first-quarter 2024
through its balance sheet cash and the AR facility. Despite
improving metrics, S&P Global Ratings-adjusted leverage will still
be above 7x through the current fiscal year."
Skillsoft product transition is mostly complete, but profitability
is below its peers. The company struggled in fiscal 2023, with
improvements in the content and platform segment offset by a
decline its instructor-led training (ILT) business. The customer
transition to its newer Percipio platform is mostly complete.
Skillsoft now derives 95% of its content segment's annualized
recurring revenue (ARR) from Percipio, with less than 5% of content
ARR coming from Skillport, its older platform. Retention and growth
metrics are better on its newer platform. Content and platform
dollar retention rate was 108% in first-quarter 2024 and improved
3% year over year to 101% on an last-12-months basis. Despite the
new platform traction, the company's ILT revenues have continued to
decline, driven by changes in two large partner subsidy programs in
first half of 2023. due to lingering salesforce challenges. Given
mergers and acquisitions (M&A) and restructuring costs over the
past two years, Skillsoft's profitability is below average for the
software and services industry.
The stable outlook on Skillsoft reflects S&P's expectation that the
company will grow revenue of a low-single-digit percent and
generate positive free cash flow in fiscal 2024.
S&P could downgrade its ratings on Skillsoft if its business
improvement and revenue growth stalls, and we expect its free
operating cash flow (FOCF) after debt service to remain negative,
such that S&P views the company's capital structure to be
unsustainable.
S&P could raise its rating on Skillsoft if the company:
-- Continues to grow revenue and EBITDA, with improving
profitability;
-- Maintains leverage of less than 5x; and
-- Improves its FOCF to debt to above 10% on a sustained basis.
Environmental, Social, And Governance
S&P said, "Governance factors are a moderately negative
consideration in our credit rating analysis of Skillsoft. The
company has historically had a poor track record of executing on
its strategy to quickly meet financial expectations, which
ultimately led it to file for chapter 11 bankruptcy in 2020. We
believe Skillsoft may continue to underperform relative to its
quickly expanding peers, given the challenging and very competitive
conditions in its industry."
SKIN LOGIC: Case Summary & Five Unsecured Creditors
---------------------------------------------------
Debtor: Skin Logic, LLC
d/b/a ARIA
d/b/a Aria Medi Spa
d/b/a Aria Skin Care SPA
d/b/a Aria Laser Skin Care Center
d/b/a Aria Medispa
2 Pidgeon Hill Drive
Sterling, VA 20165
Business Description: Skin Logic provides medical aesthetics and
skin enrichment medical services. The
Company offers consultations and clinical
treatments conducted by medical
aestheticians, massage therapists, aesthetic
nurse practitioners, plastic surgeons, and
other licensed professionals.
Chapter 11 Petition Date: August 24, 2023
Court: United States Bankruptcy Court
Eastern District of Virginia
Case No.: 23-11352
Debtor's Counsel: Maurice Verstandig, Esq.
THE BELMONT FIRM
1050 Connecticut NW
Suite 500
Washington, DC 20036
Email: mac@mbvesq.com
Total Assets: $2,475,296
Total Liabilities: $19,101,671
The petition was signed by Valeria Gunkova as managing member.
A full-text copy of the petition containing, among other items, a
list of the Debtor's five unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/3GKXIVI/Skin_Logic_LLC__vaebke-23-11352__0001.0.pdf?mcid=tGE4TAMA
SOUND INPATIENT: S&P Downgrades ICR to 'CCC', Outlook Negative
--------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on Sound
Inpatient Physicians Inc. to 'CCC' from 'B-' and its issue-level
ratings on its first-lien term loan to 'CCC' from 'B-', and its
issue-level rating on its second-lien term loan to 'CC' from
'CCC'.
The negative outlook reflects the elevated risk of a debt
restructuring that may include distressed exchanges within the next
half year or so.
S&P could lower the rating if it believes a distressed exchange, or
default is inevitable within six months.
S&P could revise the outlook to stable or consider a higher rating
if Sound's cash flow and liquidity improve, lessening the chance of
a distressed exchange or default.
Government factors are a moderately negative consideration in our
credit rating analysis. S&P said, "Our assessment of the company's
financial risk profile as highly leveraged reflects corporate
decision-making that prioritizes the interests of the controlling
owners, in line with our view of most rated entities owned by
private-equity sponsors. Our assessment also reflects the generally
finite holding periods and a focus on maximizing shareholder
returns."
S&P said, "We do not attribute a rating uplift to Sound from
Optum's minority interest because Optum does not have control and
we are not certain it would provide support, particularly in a
downside scenario. This reflects our view that Sound is not
critically important to Optum's business, and that Sound and Optum
operate in different lines of business without operational
integration and do not share management. If Optum's strategic
priorities change, it could easily separate from the asset much
like Fresenius divested Sound in 2018."
STAGE LIGHTING: Court OKs Interim Cash Collateral Access
--------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida,
Jacksonville Division, authorized Stage Lighting Store, LLC to use
cash collateral on an interim basis in accordance with the budget.
The Debtor is permitted to use cash collateral to pay:
(a) amounts expressly authorized by the Court, including
payments to the SubChapter V Trustee;
(b) the "bare necessities" for day-to-day operations;
(c) prepetition wages to employees who are retained by the
Debtor moving forward; and
(d) additional amounts as may be expressly approved in writing
by Fox Capital Group Inc. and Small Business Administration.
As previously reported by the Troubled Company Reporter, the Debtor
operates five Vystar business accounts (3 checking and 2 savings)
and one Chase business account. The Debtor generates cash on a
point-of-sale basis. Revenues and receivables are constantly being
deposited in the Debtor's operating accounts.
To ensure monies would not be offset by Vystar upon filing, the
Debtor has on hand $24,000 in cash. The Debtor has $2,261 in its
Chase account and $571 spread across its Vystar accounts.
The Debtor believes Fox may allege an interest in cash collateral
as it has levied on the Debtor's bank account. The collateral
securing payment to Fox has a value of around $26,832.
The Court said each creditor with a security interest in cash
collateral will have a perfected post-petition lien against cash
collateral to the same extent and with the same validity and
priority as the prepetition lien, without the need to file or
execute any document as may otherwise be required under applicable
non bankruptcy law.
The Debtor will maintain insurance coverage for its property in
accordance with the obligations under the loan and security
documents with the Secured Creditors.
As adequate protection, the Debtor will pay Fox 8% of its monthly
gross revenues during the pendency of the case until Fox is paid in
full.
The Debtor will pay the SBA adequate protection payments of $400
per month starting June 15, 2023.
A continued hearing on the matter is set for September 7, 2023 at 2
p.m.
A copy of the order is available at https://urlcurt.com/u?l=C4zud4
from PacerMonitor.com.
About Stage Lighting Store, LLC
Stage Lighting Store, LLC is a stage lighting equipment supplier
for school play, professional production, event venue, and church
service needs.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. M.D. Fla. Case No. 23-01061) on May 11,
2023. In the petition signed by its owner Russell Behrens, the
Debtor disclosed $226,028 in assets and $1,395,986 in liabilities.
Judge Jason A. Burgess oversees the case.
Donald M. DuFresne, Esq., at Parker & Dufresne, P.A., represents
the Debtor as legal counsel.
STEVE'S LAWNMOWER: Has Deal on Cash Collateral Access
-----------------------------------------------------
The U.S. Bankruptcy Court for the Western District of Pennsylvania
authorized Steve's Lawnmower Sales & Service, LLC to use cash
collateral on an interim basis in accordance with the budget and
its agreement with Red Iron Acceptance, LLC.
Red Iron is a secured creditor of the Debtor in the current
principal amount of $70,631 and alleges that it has a lien on
substantially all of the Debtor's assets.
The Debtor is permitted to use cash collateral to pay: (a) the
amounts expressly authorized by the Court, including payments to
the United States Trustee for quarterly fees and Subchapter V
Trustee fees; and (b) the current and necessary expenses of Debtor
in the ordinary course of its operations.
As adequate protection, Red Iron will have a perfected
post-petition lien against the property of the Debtor to the same
extent and with the same validity and priority as its prepetition
liens, if any, to the extent the Debtor's operating and use of the
Debtor's property results in a decrease in Red Iron's interest in
its collateral, without the need to file or execute any documents
as may otherwise be required under applicable non-bankruptcy law.
The Debtor will maintain insurance coverage for the Red
Iron Inventory in accordance with the obligations under the loan
and security documents with Red Iron.
These events constitute an "Event of Default":
a. The Debtor fails to comply with any requirement of the
Order (subject to a five day grace period);
b. An order is entered that provides for the conversion of the
Debtor's case to Chapter 7;
c. An order is entered that provides for the appointment of a
Chapter 11 trustee or examiner; however, this provision is subject
to a request for relief, or
d. The Debtor permits adequate loss insurance on the Red Iron
Inventory or the Post-Petition Collateral to lapse.
A copy of the order is available at https://urlcurt.com/u?l=kazW77
from PacerMonitor.com.
About Steve's Lawnmower Sales & Service
Steve's Lawnmower Sales & Service, LLC owns a lawn mower store in
St. Marys, Pa.
Steve's Lawnmower sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. W.D. Pa. Case No. 23-10282) on May 26,
2023, with $500,001 to $1 million in assets and $1 million to $10
million in liabilities.
Judge Taddonio oversees the case.
Fuchs Law Office, LLC is the Debtor's bankruptcy counsel.
SURGE TRANSPORTATION: U.S. Trustee Appoints Creditors' Committee
----------------------------------------------------------------
The U.S. Trustee for Region 21 appointed an official committee to
represent unsecured creditors in the Chapter 11 case of Surge
Transportation, Inc.
The committee members are:
1. FirstLine Funding Group
Attn: Lori Gustaf, President
P.O. Box 328
Madison, SD 57042
Phone: 605.427.4535
Email: lori.gustaf@bankeasy.com
2. Love's Solutions, LLC
Attn: John Akers, Senior Group Manager
10601 North Pennsylvania Street
Oklahoma City, OK 73120
Phone: 405.254.3409
Email: John.akers@loves.com
3. Valoroo, Inc.
Attn: Nick Schrock, CEO and Owner
9466 Black Mountain Road, Suite 125
San Diego, CA 92126
Phone: 618-719-6698
Email: nick@valoroo.com
4. E2Open/Blujay Solutions, LLC
Attn: Greg Pittman, VP & Associate General Counsel
9600 Great Hills Trail, Suite 300E
Austin, TX 78759
Phone: 918.770.5043
Email: greg.pittman@e2open.com
5. Compass Funding Solutions, LLC
Attn: Arleesia L. McDonald, General Counsel
115 55th Street, Attn: Legal Dept.
Clarendon Hills, IL 60514
Phone: 630.560.4890
Email: legal@compassholding.net
Official creditors' committees serve as fiduciaries to the general
population of creditors they represent. They may investigate the
debtor's business and financial affairs. Committees have the right
to employ legal counsel, accountants and financial advisors at a
debtor's expense.
About Surge Transportation
Founded in 2016 by Omar Singh, Surge Transportation, Inc. is a
Jacksonville-based trucking and freight broker licensed with the
U.S. Department of Transportation and the United States Federal
Motor Carrier Safety Administration. It specializes in sourcing
extra truckload capacity during peak seasons and other periods of
high demand. Surge Transportation maintains satellite offices in
Chicago, Ill. and Ashburn, Va.
Surge Transportation filed Chapter 11 petition (Bankr. M.D. Fla.
Case No. 23-01712) on July 24, 2023, with $10 million to $50
million in both assets and liabilities. Mr. Singh signed the
petition.
Judge Jacob A. Brown oversees the case.
Bradley R. Markey, Esq., at Thomas Markey is the Debtor's legal
counsel.
SUSTAITA ENTERPRISES: Seeks Cash Collateral Access
--------------------------------------------------
Sustaita Enterprises, LLC asks the U.S. Bankruptcy Court for the
Norther District of Texas, Dallas Division, for authority to use
cash collateral and provide adequate protection.
The Debtor requires the use of cash collateral to pay operational
expenses.
Market conditions plummeting service rates down by nearly 40% and
inconsistent payments by the Debtor's largest customers have
rendered the Debtor unable to operate its business outside the
protections of the Bankruptcy Code.
Prior to the Petition Date, Regions Financial Corporation, as
lender, and Sustaita, as borrower, entered into, among other
documents and agreements, the Promissory Note (Building Loan) in
the amount of $757,400 dated April 25, 2018. The Regions Note is
allegedly secured by all of the Debtor's real estate, accounts
receivables, inventory, instruments, equipment, intangibles,
accounts, chattel paper, good will, specific property and all
property of the Debtor.
As of the Petition Date, Sustaita allegedly owes Regions Bank
approximately $2 million on behalf of the Regions Note. Regions
Bank allegedly filed a UCC-1 Financing Statement against Sustaita
regarding the Regions Note Pre-Petition Collateral. As result,
Regions Bank alleges that pursuant to the Regions Note, it has a
first priority lien on all assets of Sustaita, including Sustaita's
cash.
Prior to the Petition Date, Mulligan Funding, as lender, and
Sustaita, as borrower, entered into, among other documents and
agreements, the Promissory Note in the amount of $75,000, and the
Promissory Note in the amount of $150,000. The Mulligan Funding
Notes were guaranteed by Carlos, Jesus and Juan Sustaita.
The Mulligan Funding Notes are allegedly secured by all of
Sustaita's cash, accounts receivables, inventory, instruments,
equipment, intangibles, accounts, chattel paper, specific property
and all property of the Debtor pursuant to the supplements to the
Security Agreement dated July 15,2022 and August 5, 2022.
As of the Petition Date, the Debtor allegedly owes Mulligan Funding
approximately $156,000 on behalf of the Mulligan Funding Notes.
Mulligan Funding allegedly filed a UCC-1 Financing Statement
against Sustaita regarding the Mulligan Funding Pre-Petition
Collateral.
Prior to the Petition Date, Vivian Capital Group, LLC, as lender,
and Sustaita, as borrower, entered into, among other documents and
agreements, the Cash Advance Agreement in the amount of $79,447 and
the Cash Advance Agreement in the amount of $149,000. The Vivian
Cash Advance Loans are guaranteed by Carlos Sustaita. The Vivian
Cash Advance Loans are allegedly secured by all of Sustaita's all
accounts.
As of the Petition Date, the Debtor allegedly owes Vivian Capital
approximately $200,000 on behalf of the Vivian Cash Advance Loans.
Vivian Capital allegedly filed a UCC-1 Financing Statement against
Sustaita regarding the Vivian Capital Pre-Petition Collateral.
As adequate protection, the Secured Creditors will be granted a
post-petition security interest in and replacement lien upon,
subject only to prior non-avoidable liens, the Debtor's assets and
property of every kind. The Replacement Lien will serve as adequate
protection for the use of the Collateral to the extent of any
diminution of the value of the Collateral.
The Secured Lenders will have a superpriority claim pursuant to 11
U.S.C. section 507(b) in the Debtor's Chapter 11 case and against
the Debtor's bankruptcy estate for the Debtor's use of cash
collateral to the extent of any diminution in the value of the
Debtor's interest in the Collateral and this administrative claim
will have priority over and above all other costs and expenses of
the kind specified in, or ordered pursuant to, 11 U.S.C. section
503(b) or ยง 507(a).
A copy of the motion is available at https://urlcurt.com/u?l=j24eoh
from PacerMonitor.com.
About Sustaita Enterprises, LLC
Sustaita Enterprises, LLC is part of the general freight trucking
industry. The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Tex. Case No. 23-31812) on August 21,
2023. In the petiton signed by Carlos Sustaita, president and
member, the Debtor disclosed $3,969,806 in assets and $3,589,563 in
liabilities.
Brandon Tittle, Esq., at Glast, Phillips & Murray, P.C., represents
the Debtor as legal counsel. Lane Gormatt Trubitt, LLC is the
financial advisor.
UNITED ENGINEERS: Files Emergency Bid to Use Cash Collateral
------------------------------------------------------------
United Engineers, Inc. asks the U.S. Bankruptcy Court for the
Southern District of Texas, Houston Division, for authority to use
cash collateral on an interim basis.
Plains Capital Bank, holds liens on substantially all of the
Debtor's assets, including accounts receivable and cash.
On December 3, 2022, UEI entered into a Business Loan Agreement and
related documents with Plains Capital Bank whereby Secured Lender
provides a line of credit up to $1.5 million.
The PCB Loan is secured by a lien on substantially all of the
Debtor's assets, including, but not limited to cash, accounts, and
accounts receivable. As of the Petition Date, the outstanding
balance owed with respect to PCB Loan is approximately $560,000.
In exchange for the use of cash collateral, as adequate protection,
the Debtor proposes to grant to the Secured Lender replacement
liens in the form of security interests and liens upon the same
types and kinds of assets upon which they held a prepetition lien,
subject only to valid, perfected, and enforceable prepetition liens
(if any) which are senior as of the Petition Date, as well as an
additional lien upon the Debtor's post-petition accounts and
accounts receivables. The grant of replacement liens will only
apply to the extent that the pre-petition collateral was encumbered
by valid and perfected liens and security interests.
A copy of the Debtor's motion and 14-day budget is available at
https://urlcurt.com/u?l=jovNJd from PacerMonitor.com.
The Debtor projects $226,415 in total cash flow from operations and
$202,690 in total expenses for the period from August 19 to
September 1, 2023.
About United Engineers, Inc.
United Engineers, Inc. provides architectural, engineering, and
related services.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Tex. Case No. 23-33166) on August 19,
2023. In the petition signed by Kefelegne Tesfaye, vice president,
the Debtor disclosed $2,356,290 in assets and $909,388 in
liabilities.
Melissa A. Haselden, Esq., at Haselden Farrow PLLC, represents the
Debtor as legal counsel.
UP ASBESTOS: Ind-Ra Affirms BB+ LT Issuer Rating, Outlook Stable
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed U.P. Asbestos
Limited's (UPAL) Long-Term Issuer Rating at 'IND BB+'. The Outlook
is Stable.
The instrument-wise rating actions are:
-- INR50 mil. (reduced from INR365 mil.) Fund-based limit
affirmed with IND BB+/Stable;
-- INR5 mil. (reduced from INR25.8 mil.) Non-fund-based limit*
affirmed with IND A4+ rating; and
-- INR721.39 mil. (increased from INR448.2 mil.) Term loan due on
March 2034 affirmed with IND BB+/Stable rating.
*Sub-limit of term loan, which is currently unutilized as
non-fund-based limit
Key Rating Drivers
The affirmation reflects UPAL's continued medium scale of
operations, despite a decrease in the revenue to INR1,751 million
in FY23 (FY22: INR1,797.5 million) due to a change in the business
line from manufacturing to trading of fiber sheets, cement sheets
and other raw materials, and leasing of a factory units, and plant
& machinery. UPAL generated revenue of INR187.37 million from lease
rental in FY23 (FY22: INR118.97 million). The company has leased
its Lucknow unit at Mohanlalganj to Navnidhi Continental Private
Limited, its Dadri unit to SMSN Continental Private Limited, and
commercial complex and storage unit in Lucknow to Ubuild Better
Private Ltd. In FY24, Ind-Ra expects the revenue to remain at
similar levels on account of the similar nature of the business.
Liquidity Indicator - Stretched: UPAL's average maximum utilization
of the fund-based and non-fund-based limits was 52.12% and 17.31%,
respectively, during the 12 months ended July 2023. The net working
capital cycle reduced but remained elongated at 115 days in FY23
(FY22: 120 days), despite a decline in the inventory holding period
to 45 days (112 days), due to the shift to trading from
manufacturing. The cash flow from operations decreased to INR149.86
million in FY23 (FY22: INR228.77 million) due to an increase in
trade receivables. Consequently, the free cash flow declined to
INR30.83 million in FY23 (FY22: INR148.11 million). The cash and
cash equivalents stood at INR308.63 million at FYE23 (FYE22:
INR323.84 million), including cheques in hand of INR282 million
(INR292.5 million). Moreover, UPAL does not have any capital market
exposure and relies on banks and financial institutions to meet its
funding requirements. UPAL has scheduled repayments of INR77.4
million in FY24 and INR88.3 million in FY25.
The ratings continue to reflect UPAL's modest credit metrics with
interest coverage (operating EBITDA/gross interest expense) of
1.51x in FY23 (FY22: 2.0x) and net leverage (adjusted net
debt/operating EBITDA) of 4.2x (4.2x). The deterioration in the
interest coverage was driven by a decrease in the absolute EBITDA
to INR174.46 million (INR179.61 million). However, the net adjusted
leverage remained stable because the decline in EBITDA was offset
by a decrease in net debt. The debt service coverage ratio was
1.08x in FY23 (FY22: 1.1x). Ind-Ra expects the credit metrics to
remain at similar levels in FY24 in the absence of any debt-led
capex plans.
The ratings factor in UPAL's continued modest EBITDA margins of
9.95% in FY23 (FY22: 9.99%) with a return of capital employed of
6.2% (6.8%). The margins declined slightly on account of an
increase in administration expenses. Ind-Ra expects the EBITDA
margins to remain at similar levels in the near term owing to the
trading nature of the business.
Ind-Ra also takes into consideration the decline in UPAL's
contingent liability to INR123.57 million in FY23 (FY22: INR252.78
million), which includes several tax-related cases that are pending
in court. Any unfavorable outcome will impact the liquidity and
profitability, and consequently, the credit metrics of the
company.
The ratings, however, remain supported by the promoter's experience
of more than three decades in the manufacturing and trading of
asbestos.
Rating Sensitivities
Negative: Any delay in the receipt of rental income, leading to
deterioration in the liquidity position or the credit metrics on a
sustained basis will be negative for the ratings.
Positive: A substantially higher-than-Ind-Ra-expected rental income
while diversifying the customer base, leading to a higher cash
generation and/or a substantial decline in the debt, leading to a
significant improvement in the debt service coverage ratio above
1.2x on a sustained basis will be positive for the ratings.
Company Profile
Incorporated in 1973 in Lucknow, Uttar Pradesh UPAL is engaged in
the trading of fiber sheets, cement sheets and other raw materials.
It also generates revenue from leasing of its factory and plant and
machinery.
VECTOR ESCAPES: Nathan Smith Named Subchapter V Trustee
-------------------------------------------------------
The U.S. Trustee for Region 17 appointed Nathan Smith, Esq., as
Subchapter V trustee for Vector Escapes, Inc.
Mr. Smith is a partner at Malcolm & Cisneros. He will be paid an
hourly fee of $505 for his services as Subchapter V trustee and
will be reimbursed for work-related expenses incurred.
Mr. Smith declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Nathan F. Smith, Esq.
Malcolm & Cisneros
2112 Business Center Drive
Irvine, CA 92612
Phone: (949) 252-9400
Email: nathan@mclaw.org
About Vector Escapes
Vector Escapes, Inc., filed a petition under Chapter 11, Subchapter
V of the Bankruptcy Code (Bankr. D. Nev. Case No. 23-50553) on Aug.
8, 2023, with $100,001 to $500,000 in assets and $500,001 to $1
million in liabilities.
Judge Hilary L. Barnes oversees the case.
Kevin A. Darby, Esq., at Darby Law Practice, Ltd., represents the
Debtor as bankruptcy counsel.
WAFRA CAPITAL: JLL to Hold Public Auction on September 9
--------------------------------------------------------
Jones Lang LaSalle Americas Inc., on behalf of 111 Wall Grand
Avenue Partners LLC ("secured party"), offers for sale at public
auction on Sept. 9, 2023, at 10:00 a.m. (New York Time) through
virtual attendance technology to be provided at a later date and at
the offices of Willkie, Farr & Gallagher LLP, 787 Seventh Avenue,
New York 10019, in connection with a Uniform Commercial Code sale,
100% of the limited liability company membership interests in 111
Wall Fee Holdco LLC, which is the holder of 100% of the limited
liability company membership interests in 111 Wall Fee Holdings
LLC, which is the sole owner of the property located at 111 Wall
Street, New York, New York 10005 ("Property").
The interests are owned by 111 Wall Sub 5 LLC having its principal
place of business at c/o Wafra Capital Partners Inc., 350 Park
Avenue, 16th Floor, New York, New York 10022 ("Debtor").
The secured party, as administrative agent, and certain other
lenders made a lone to the Debtor. In connection with the
mezzanine loan, the Debtor has granted to the secured party a first
priority lien on the interests pursuant to that certain pledge and
security agreement, dated as of June 10, 2021, by and between the
Debtor and the secured party. The secured party is offering the
interests for sale in connections and liabilities for the mortgage
borrower or otherwise affecting the property ("senior loan"), which
senior loan is also secured by a pledge by the mortgage borrower
holdco of its membership interests in the mortgage borrower.
All bids must be for cash, and the successful bidder must be
prepared to deliver immediately available good funds within 24
hours after sale and otherwise comply with the bidding
requirements.
Further information concerning the interests, the requirements for
obtaining information and bidding on the interests and terms of
sale can be found at http://www.111WallStUCCSale.com.
Jones Lang LaSalle can be reached at:
Brett Rosenberg
Jones Lang LaSalle Americas Inc
Tel: + 212-812-5926
Email: brett.rosenbergy@am.jll.com
WATERBRIDGE MIDSTREAM: Fitch Hikes IDR to 'B', Outlook Stable
-------------------------------------------------------------
Fitch Ratings has upgraded WaterBridge Midstream Operating LLC's
(WATOPE) Long-Term Issuer Default Rating (IDR) to 'B' from 'B-'.
The senior secured rating has also been upgraded to 'B+'/'RR3' from
'B'/'RR3'. The Rating Outlook is Stable.
The upgrade is driven by WATOPE's strong performance in 2022
continuing into 1H23 benefitting from continued strong producer
activity on WATOPE's acreage. As produced water volumes have grown,
WATOPE achieved EBITDA leverage below 7x at YE 2022 while
maintaining interest coverage above 2.0x. Additionally, WATOPE in
the spring of 2023 extended the expiration date of its revolving
credit facility to June 2025. Concerns include preferred issuances
above WATOPE which have terms which require, for credit maintaining
quality, management to be pro-active with liquidity toward the end
of the Outlook horizon, the company's small size, and concentration
within the Delaware Basin.
The Stable Outlook reflects Fitch's expectations of steady volume
performance in line with Fitch's price deck (which is constructive
compared to past price decks, yet features a contango more
pronounced than the forwards prices seen in the recent period).
KEY RATING DRIVERS
Improved Leverage and Coverage Metrics: WATOPE's performance
through 2Q23 has benefited from continued steady producer activity
on the company's dedicated acreage in the Southern Delaware Basin
and from the execution of new commercial agreements. Fitch
calculates WATOPE's LTM 2Q23 imputed EBITDA leverage (inclusive of
the preferred equity in the capital structure) is approximately
6.5x as WATOPE continues to generate positive FCF. Fitch
anticipates WATOPE's Delaware producer customers will continue
their drilling programs near current levels over the near-to-medium
term, supporting continued deleveraging into the low 6x range by
YE23.
Interest rates have continued to rise in 2023, but EBITDA interest
coverage has remained solid. Fitch calculates WATOPE's LTM 2Q23
EBITDA interest coverage to be approximately 2.3x. WATOPE does not
have interest rate hedges and is exposed to rising variable rates.
By YE23, EBITDA interest coverage is expected to continue to
decline closer to 2.0x if WATOPE does not use it's FCF to prepay a
portion of the term loan in an amount above the 1% required
amortization.
Near-Term Liquidity Issues Resolved: WATOPE has successfully taken
steps to address near-term liquidity overhangs. In June, WATOPE
successfully completed an amendment of the credit agreement to
extend the maturity of its revolver by one year to June 2025. Fitch
notes the revolver size was reduced earlier this year to $85
million, but does not anticipate the smaller revolver to be
restrictive to WATOPE's regular working capital or capex budget.
By exchanging the Series A-1 Preferred Units in 2022, the potential
for early expiration and maturity of the revolver and term loan
(respectively) in September 2023 has been resolved. Additionally,
the put right provision held by the owner of the new Series A-1
preferred units has been extended to mid-2025 presenting a
medium-term liquidity constraint to be addressed over the next 12
months-17 months.
Volumetric Risk: WATOPE is benefitting from the steady production
growth in the Delaware basin which has continued through 1H23 and
Fitch expects to continue in 2H23. While fixed-fee contracts
provide protection from direct commodity price exposure, volumes
have indirect price risk in the event drilling on WATOPE's
dedicated acreage becomes uneconomic and customers decide to move
rigs elsewhere.
Producer activity in the Delaware basin is primarily driven by the
price of WTI oil prices. Production in the Arkoma basin is driven
by natural gas prices which have fallen more sharply than WTI oil
prices, leading to the shut-in of 50 wells in the basin in 2Q23.
The majority of WATOPE's volumes and revenues are generated in the
Delaware basin with a smaller contribution from the Arkoma by
comparison.
WATOPE does not have a material amount of minimum volume
commitments (MVCs) that would protect cash flows in a case where
production moves off of WATOPE's acreage dedications. Fitch expects
the southern Delaware basin volume growth to remain robust through
2023, yet as recent history has shown us in 2020, producers can
quickly slow or stop production and WATOPE's volumes will be
impacted with little protection.
Expanding Delaware Basin Commercial Agreements: Despite the decline
of hydrocarbon pricing from robust 2022 levels, producers have
continued drilling plans in the Delaware basin. Through 1H23 WATOPE
was active in adding new and expanding existing commercial
agreements with producers in the Delaware basin including
Continental Resources Inc. (BBB/Stable). Most of the other recently
signed new agreements are with private equity owned exploration and
production companies not rated by Fitch. In addition to signing new
customers, WATOPE is in ongoing discussions to consolidate and
expand Chevron Corporation's (not rated) dedicated acreage in the
southern Delaware basin following recent M&A.
Customer Concentration: WATOPE has acreage dedications with several
large investment grade customers and is modestly diversified
compared to pure-play gathering peers. The company is exposed to
customer concentration as its three largest customers accounted for
approximately 48% of revenues in 2022. M&A activity has remained
active over the past few years which is an overall positive for
WATOPE's counterparty credit profile. Nearly all of WATOPE's
producer contracts are fixed fee with CPI escalators, an exception
being Trinity Operating (USG) LLC, (Trinity; NR but a subsidiary of
Nextra Energy, Inc. [A-/Stable]). WATOPE and Trinity have made
adjustments from time to time to seek win-win outcomes.
Limited Scale & Size: WATOPE is a water midstream/solutions
provider that operates predominantly in the southern Delaware
region of the Permian basin, with a small percentage of operations
in the Arkoma basin in Oklahoma. Given the predominant single basin
focus and lack of business line diversity, WATOPE possesses
outsized sensitivity to a slow-down in Delaware basin production as
materialized in 2020. Fitch expects WATOPE to generate annual
EBITDA less than $300 million over the forecast consistent with
issuers below the 'BB-' rating category.
DERIVATION SUMMARY
WATOPE is somewhat unique in the midstream sector in that it is a
pure play water solutions business. In terms of customer
concentration WATOPE has good diversification with a mix of
investment grade and non-investment grade producers. Fitch
acknowledges WATOPE has some basin diversity with operations in the
Arkoma basin in Oklahoma, but the majority of EBITDA is generated
from its operations in the Southern Delaware Basin.
Geographically similar to WATOPE, Medallion Midland Acquisition,
L.P (B+/Stable) is a Permian Basin focused midstream services
company. Medallion's operations focus on crude oil gathering and
transportation within Texas which differ from WATOPE's produced
water disposal activities. Like WATOPE, Medallion is also subject
to volumetric risk, although Medallion does not have any direct
commodity price exposure and has some MVCs. WATOPE also has some
exposure related to the sale of skim oil which has comparatively
higher direct commodity price exposure. Fitch regards WATOPE as
having higher business risk compared to Medallion.
Within the Permian basin Medallion operates in Midland sub-basin.
WATOPE only has operations in the Delaware basin with some
diversity to the Arkoma basin in Oklahoma. Fitch takes a more
constructive view on long-term volumes in the Midland than in
Oklahoma. Like WATOPE Medallion's ratings are limited by its
relatively small size with EBITDA generation below $300 million and
customer diversification is modest.
The driving force in one-notch the rating differences between the
two companies is the difference in financial metrics. Fitch expects
Medallion to achieve its leverage at or below 4.0x in 2023
comparing favorably to WATOPE's significantly higher leverage
profile.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer
- Fitch price deck, e.g., 2024 prices of West Texas Intermediate of
$70 per barrel, and Henry Hub of $3.50 per thousand cubic feet;
- Delaware produced water annual volume growth in the mid 20% range
for 2023, then tapering off in latter forecast years;
- Capex spending in line with management's expectations;
- Base interest rate applicable to the revolving credit facility
and term loan reflects the Fitch Global Economic Outlook, e.g.,
5.75% for 2023, 4.25% for 2024, and 3.25% in 2025 e.g.;
- Excess FCF used to pay down outstanding revolver borrowings in
2023 and partial term loan repayment beginning in 2024;
- The recovery analysis uses assumptions that cause WaterBridge to
be considered a going-concern in bankruptcy. Fitch has assumed a
10% administrative claim (standard). The going-concern EBITDA
estimate of around $135 million, reflects Fitch's view of a
sustainable, post-reorganization EBITDA level upon which Fitch
bases the valuation of the company. As per criteria, the going
concern EBITDA reflects some residual portion of the distress that
caused the default;
- Fitch used a 6.0x EBITDA multiple is in line with reorganization
multiples for the energy sector. There have been limited bankruptcy
and reorganizations within the midstream space but two
bankruptcies, Azure Midstream and Southcross Holdings LP (2016) had
multiples between 5.0x and 7.0x, ascertained by Fitch's best
efforts attempts at devising estimates.
More recently, yet away from the midstream sub-sector of Energy, in
its recent Bankruptcy Case Study Report, "Energy, Power and
Commodities Bankruptcies Enterprise Value and Creditor Recoveries"
published in September 2021, the median enterprise valuation exit
multiplies for 51 energy cases for which this data was available
was 5.3x, with a wide range of multiples observed.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- EBITDA leverage expected to be below 6.0x on a sustained basis;
- Improved circumstances concerning liquidity.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Lack of pro-active management of liquidity, including but not
limited extension/repayment of revolver set to mature in 2025 and
plan to address preferred equity put-right provision six months to
a year prior to June 2025;
- EBITDA leverage expected to be above 7.0x on a sustained basis;
- EBITDA interest coverage below 2.0x on a sustained basis;
- Volume declines (trailing quarterly) in WATOPE's Delaware basin
system, except if caused by one-off events;
- A significant event at a major customer that will probably impair
WATOPE's cash flow.
LIQUIDITY AND DEBT STRUCTURE
Adequate Near-Term Liquidity: Fitch views WATOPE's liquidity as
sufficient over the next 12 months-17 months. Mid-term liquidity
restrictions remain as the Series A-1 preferred units contain a
put-right provision the owner could exercise as early July 2025.
As of June 30, 2023, WATOPE had approximately $101 million of
liquidity consisting of available revolver borrowings and cash and
cash equivalents. The company has a super-senior revolving credit
facility, which was downsized to $85 million from $100 million in
1Q23, which is currently has approximately $10 million of
outstanding borrowings.
In June 2023, WATOPE successfully extended the revolver maturity to
June 2025. The revolving credit facility has a springing net
leverage covenant of 5.0x with any incremental draw above $45
million. As the net leverage covenant was below 5.0x at quarter
end, WATOPE's revolver borrowings are no longer limited to $45
million.
The term loan has a maturity date of June 2026 and requires a
standard mandatory amortization of 1% of original loan amount per
annum and compliance with a debt service coverage ratio covenant
threshold of 1.1x. The company was in compliance with its financial
covenants as of June 30, 2023. Fitch expects WATOPE to maintain
compliance with its covenants through the forecast period.
ISSUER PROFILE
WaterBridge Midstream Operating, LLC provides water services to oil
& gas producers in Texas and Oklahoma.
SUMMARY OF FINANCIAL ADJUSTMENTS
Owing to the change of control provision in the preferred units,
among other terms that tip the judgment the same way, the preferred
units receive zero equity credit (i.e., are treated like debt for
purposes of calculating leverage). WATOPE is deemed to have as
imputed debt-like instruments two series of preferred units. As to
calculations of coverage metrics, PIK distributions and future
value claims for deferred coupons are excluded.
ESG CONSIDERATIONS
WaterBridge Midstream Operating LLC has an ESG Relevance Score of
'4' for Group Structure due to related party transactions with
affiliate companies, which has a negative impact on the credit
profile, and is relevant to the rating[s] in conjunction with other
factors.
WaterBridge Midstream Operating LLC has an ESG Relevance Score of
'4' for Financial Transparency due to private equity ownership
resulting in less structural and financial disclosure transparency
than publicly traded issuers, which has a negative impact on the
credit profile, and is relevant to the rating[s] in conjunction
with other factors.
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.
Entity/Debt Rating Recovery Prior
----------- ------ -------- -----
WaterBridge
Midstream
Operating LLC LT IDR B Upgrade B-
senior secured LT B+ Upgrade RR3 B
WESTERN GLOBAL: U.S. Trustee Appoints Creditors' Committee
----------------------------------------------------------
The U.S. Trustee for Region 3 appointed an official committee to
represent unsecured creditors in the Chapter 11 cases of Western
Global Airlines Inc.
The committee members are:
1. Trans-Caribbean Cargo Corp.
Attn: Luis Soto
1951 NW 68 Ave., Bldg. 706, Suite 228
Miami, FL 33126
Phone: 786-713-3030
Email: lsoto@tccargo.us
2. Unical Aviation, Inc.
Attn: Dustin Vidrine Esq.
15132 W. Camelback Road
Glendale, AZ 85340
Phone: 480-263-2325
Email: dvidrine@mainsailcs.com
3. DBA Distribution Services, Inc.
Attn: Danny Montgomery
683 Atlanta South Pkwy
Atlanta, GA 30349
Phone: 404-915-4689
Email: dmontgomery@dbaco.com
Official creditors' committees serve as fiduciaries to the general
population of creditors they represent. They may investigate the
debtor's business and financial affairs. Committees have the right
to employ legal counsel, accountants and financial advisors at a
debtor's expense.
About Western Global Airlines
Western Global Airlines, Inc. provides contracted air cargo
transportation services ranging from ACMI (Aircraft, Crew,
Maintenance, and Insurance) to Full Service, on a global scale. WGA
is a high-tech air cargo platform serving customers in e-commerce,
express, freight forwarding, logistics, nonprofit, and governmental
organizations.
The Debtor and affiliates sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. D. Del. Lead Case No. 23-11093) on
August 7, 2023. In the petition signed by James K. Neff, chief
executive officer, the Debtor disclosed up to $500 million in
assets and up to $1 billion in liabilities.
Judge Karen B. Owens oversees the case.
The Debtors tapped Weil, Gotshal & Manges LLP as general bankruptcy
counsel, Richards, Layton & Finger, P.A. as local bankruptcy
counsel, Evercore Group L.L.C. as investment banker, FTI
Consulting, Inc. as provider of interim management and financial
advisory services. and Stretto, Inc. as claims, noticing, and
solicitation agent.
DKB Partners LLC, as DIP Lender and Prepetition Lender, is
represented by Young Conaway Stargatt & Taylor, LLP.
The Ad Hoc Group of DIP Lenders and Certain Creditors are
represented by Paul, Weiss, Rifkind, Wharton & Garrison, LLP and
Landis Rath & Cobb, LLP.
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
On Thursdays, the TCR delivers a list of recently filed
Chapter 11 cases involving less than $1,000,000 in assets and
liabilities delivered to nation's bankruptcy courts. The list
includes links to freely downloadable images of these small-dollar
petitions in Acrobat PDF format.
Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.
Monthly Operating Reports are summarized in every Saturday edition
of the TCR.
The Sunday TCR delivers securitization rating news from the week
then-ending.
TCR subscribers have free access to our on-line news archive.
Point your Web browser to http://TCRresources.bankrupt.com/and use
the e-mail address to which your TCR is delivered to login.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Philadelphia, Pa., USA.
Randy Antoni, Jhonas Dampog, Marites Claro, Joy Agravante,
Rousel Elaine Tumanda, Joel Anthony G. Lopez, Psyche A. Castillon,
Ivy B. Magdadaro, Carlo Fernandez, Christopher G. Patalinghug, and
Peter A. Chapman, Editors.
Copyright 2023. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers. Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.
The TCR subscription rate is $975 for 6 months delivered via
e-mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance thereof
are $25 each. For subscription information, contact Peter A.
Chapman at 215-945-7000.
*** End of Transmission ***