/raid1/www/Hosts/bankrupt/TCR_Public/231026.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Thursday, October 26, 2023, Vol. 27, No. 298
Headlines
17841 PALORA: Trustee Hires Compass as Real Estate Broker
279 NW 54 LLC: Hires Dsouza & Walton Law Group as Counsel
365 S4 ST LLC: Seeks to Hire Sobers Law PLLC as Counsel
ACCO BRANDS: Egan-Jones Retains B+ Senior Unsecured Ratings
ADVANCE INTERNATIONAL: Hits Chapter 11 Bankruptcy Protection
AIR CANADA: Egan-Jones Retains CCC- Senior Unsecured Ratings
AKUMIN INC: Reaches Deal With Stonepeak to Become Private Company
AKUMIN INC: S&P Downgrades ICR to 'D' on Bankruptcy Filing
ALAMANCE COMMUNITY: Moody's Rates New 2023A/B Revenue Bonds 'Ba2'
ALLEGHANY CORP: Egan-Jones Withdraws Senior Unsecured Ratings
ALLEGIANT TRAVEL: Egan-Jones Retains B Senior Unsecured Ratings
ALPINE SUMMIT: Public Sale Auction Slated for November 6
AMERIFIRST FINANCIAL: Hires Phoenix Capital as Marketer, Advisor
AMERIFIRST FINANCIAL: Hires Weiner Brodsky as Special Counsel
AMNEAL PHARMACEUTICALS: Moody's Rates New 1st Lien Term Loan 'B2'
AMNEAL PHARMACEUTICALS: S&P Rates New $2.55BB Term Loan 'B'
ANAGRAM INT'L: Fitch Hikes Rating on 1st Lien Secured Notes to CCC
ASHFORD HOSPITALITY: Declares Q4 2023 Preferred Dividends
ASHLAND LLC: Egan-Jones Retains BB+ Senior Unsecured Ratings
AULT ALLIANCE: Declares Monthly Cash Dividend of $0.2708333 Apiece
AVALON MOBILE: Case Summary & Six Unsecured Creditors
AVAMERE NPS: Hires McNamee Hosea P.A. as Counsel
AVIS BUDGET: Egan-Jones Retains BB Senior Unsecured Ratings
B & J INTERIORS: Case Summary & Seven Unsecured Creditors
BADGER MUTUAL: A.M. Best Cuts Fin. Strength Rating to C++(Marginal)
BALL CORP: Egan-Jones Retains BB+ Senior Unsecured Ratings
BELDEN INC: Egan-Jones Retains BB- Senior Unsecured Ratings
BENITAGO INC: Seeks to Hire Ordinary Course Professionals
BRIGHT MOUNTAIN: Appoints Ethan Rudin as CFO
BROOKDALE SENIOR: Reports September 2023 Occupancy
CAESARS ENTERTAINMENT: Egan-Jones Retains CCC Sr. Unsec. Ratings
CERTIFIED 360: Hires Big Game Real Estate as Real Estate Broker
CHESAPEAKE ENERGY: Egan-Jones Retains BB+ Senior Unsecured Ratings
CHICAGO EDUCATION BOARD: Fitch Affirms BB+ on $600MM ULTGO Bonds
CITY OF LVIV: Fitch Affirms 'CC/CCC-' LongTerm IDRs
CLEAN ENERGY: Taps Roth Capital for $25M Common Stock Offering
CMS ENERGY: Egan-Jones Retains BB+ Senior Unsecured Ratings
CNA EQUITY: Gina Klump Named Subchapter V Trustee
CONTINENTAL AMERICAN: Hires Morris Laing Evans as Special Counsel
CROSBY US: Moody's Affirms 'B3' CFR & Alters Outlook to Positive
CROWN HOLDINGS: Egan-Jones Retains BB Senior Unsecured Ratings
CSE GROUP: A.M. Best Cuts Fin. Strength Rating to B(Fair)
CSG SYSTEMS: Egan-Jones Retains BB+ Senior Unsecured Ratings
CYXTERA TECHNOLOGIES: Seeks to Extend Plan Exclusivity to Jan. 30
DAVITA INC: Egan-Jones Retains BB Senior Unsecured Ratings
DIAMOND CREEK: UST Appoints Janina Hoskins as Chapter 11 Trustee
DIOCESE OF OGDENSBURG: Court OKs Cash Access on Final Basis
DOMAN BUILDING: Fitch Hikes LongTerm IDR to 'B+', Outlook Stable
DOMINO'S PIZZA: Egan-Jones Retains BB- Senior Unsecured Ratings
DRAIN SERVICES: May Use $60,000 of Cash Collateral
EMPIRE TODAY: Moody's Cuts CFR to 'Caa1', Outlook Remains Negative
EMPLOYBRIDGE HOLDING: Fitch Lowers LongTerm IDR to 'B', Outlook Neg
EP GLOBAL: Moody's Affirms 'B2' CFR & Alters Outlook to Negative
ESCHER GROUP: Seeks Cash Collateral Access
FARADAY FUTURE: Completes Sale-Leaseback of California Facility
FRANK STOLLER: Seeks to Hire Conway Olejniczak as Counsel
FREIGHT MASTER: Voluntary Chapter 11 Case Summary
FTX GROUP: Caroline Ellison Is the Focal Point in SBF Trial
GOODYEAR TIRE: Egan-Jones Retains BB- Senior Unsecured Ratings
HALLIBURTON CO: Egan-Jones Hikes Senior Unsecured Ratings to BB+
HARTMAN SPE: Committee Hires Fox Rothschild LLP as Counsel
HASBRO INC: Egan-Jones Retains BB Senior Unsecured Ratings
HELMERICH & PAYNE: Egan-Jones Hikes Sr. Unsecured Ratings to BB+
HERBALIFE LTD: Egan-Jones Retains BB- Senior Unsecured Ratings
HESS MIDSTREAM: S&P Places 'BB+' ICR on CreditWatch Positive
HOWMET AEROSPACE: Egan-Jones Withdraws BB Senior Unsecured Ratings
HUDSON & MCKEE: Starts Subchapter V Bankruptcy Process
HWC BURBS: Court OKs Interim Cash Collateral Access
INDIEV INC: Hires Law Offices of Michael Jay Berger as Counsel
JOURNEY PERSONAL: Moody's Ups CFR to B3 & Alters Outlook to Stable
JUICE ROLL: Mark Sharf Named Subchapter V Trustee
KEMPER CORP: Egan-Jones Retains BB+ Senior Unsecured Ratings
KIRBY CONSTRUCTION: Wins Interim Cash Collateral Access
KRISTI'S GROOMING: Seeks Cash Collateral Access Thru Feb 2024
MALLINCKRODT PLC: Hires KPMG LLP as Tax Service Provider
MALLINCKRODT PLC: Unsecureds Unimpaired in Prepack Plan
MARIOTT INT'L: Egan-Jones Retains BB+ Sr. Unsecured Ratings
MATTEL INC: Egan-Jones Retains BB+ Senior Unsecured Ratings
MBIA INC: Egan-Jones Retains CCC- Senior Unsecured Ratings
MERIDIAN RESTAURANTS: Selling Restaurants for $125,000
MIRACLE MILE: Case Summary & Five Unsecured Creditors
MOZ CORP: Files Emergency Bid to Use Cash Collateral
MURPHY OIL: Egan-Jones Retains BB+ Senior Unsecured Ratings
MXP OPERATING: Hires Charles Davis as Special Counsel
MXP OPERATING: Seeks to Hire Tina Hoefler as Oil & Gas Auditor
NCR VOYIX: Egan-Jones Retains B- Senior Unsecured Ratings
NORTHWOODS PETS: Amends Kapitus Secured Claim Pay Details
NU STYLE LANDSCAPE: Hires SLBiggs as Financial Advisor
NUASIN NEXT: Moody's Affirms 'Ba1' Rating on 2017A Revenue Bonds
OFFICE DEPOT: Egan-Jones Retains B+ Senior Unsecured Ratings
ONH AFC CS: Hires Epiq Corporate Administrative Advisor
OUTPOST PINES: Unsecureds Owed $1.5M to get $8,200
PAYNE'S ENVIRONMENTAL: Kathleen DiSanto Named Subchapter V Trustee
PB MICHIGAN: Hires Steinberg Shapiro as Legal Counsel
PBF ENERGY: Egan-Jones Retains BB- Senior Unsecured Ratings
PEGASUS HOME: Gets Court's Nod for Oct. 27 Auction
PG&E CORP: Egan-Jones Retains BB- Senior Unsecured Debt Ratings
PHILLIP HIMMELFARB: Case Summary & Three Unsecured Creditors
PIKE CORP: S&P Alters Outlook to Positive, Affirms 'B' ICR
PIVOT3 INC: Public Sale Auction Set for December 15
PRECISION CASTPARTS: Egan-Jones Retains B- Sr. Unsecured Ratings
PREMIER KINGS: Case Summary & 40 Largest Unsecured Creditors
PROS HOLDINGS: Egan-Jones Retains CCC- Senior Unsecured Ratings
PSG MORTGAGE: Seeks to Extend Plan Exclusivity to October 30
PUERTO RICO AQUEDUCT: Fitch Hikes Issuer Default Rating to 'CCC'
R&J CLEANING: Peter Barrett Named Subchapter V Trustee
RAPID7 INC: Egan-Jones Retains CC Senior Unsecured Ratings
REEF GLOBAL: Moody's Lowers CFR to B3, Placed on Further Review
REPLICEL LIFE: Loses Arbitration Case Against Shiseido Co.
REVITALID PHARMA: Nov. 20 Combined Hearing on Disclosure & Plan
REVLON INC: Egan-Jones Withdraws CC Senior Unsecured Ratings
RISING TIDE: S&P Raises ICR to 'CCC+', Outlook Negative
RITE AID: Can Be Delisted by the New York Stock Exchange
RITE AID: To Test MedImpact's $575MM Bid at Nov. 20 Auction
ROYAL CARIBBEAN: Egan-Jones Retains B- Senior Unsecured Ratings
RWDY INC: Unsecured Creditors Will Get 100% of Claims in Plan
RYAN LLC: Moody's Assigns 'B2' CFR & Rates New 1st Lien Loans 'B2'
RYAN LLC: S&P Assigns 'B+' Issuer Credit Rating, Outlook Stable
S2P ACQUISITION: Moody's Cuts 1st Lien Loans to B3, Outlook Stable
SANDY HOOK INVESTMENTS: Wins Cash Collateral Access Thru Nov 22
SEVEN KITCHEN: Wins Cash Collateral Access on Final Basis
SIRIUS XM: Egan-Jones Retains BB+ Senior Unsecured Ratings
SORRENTO THERAPEUTICS: Unsecureds Will Get 56.9% of Claims in Plan
SOUTHERN DRILL: Seeks Cash Collateral Access
SOUTHWESTERN ENERGY: Egan-Jones Retains B+ Sr. Unsecured Ratings
SPECIALTY DENTAL: Trustee Taps Precision Financial as Accountant
ST. MARGARET'S HEALTH: Committee Hires Levenfeld as Counsel
STRUCTURLAM MASS: Unsecureds Owed $99.8M to Recover 21.1% in Plan
SUMMIT PACIFIC: S&P Assigns 'BB+' Rating on Hospital Revenue Bonds
T-MOBILE USA: Egan-Jones Retains B+ Senior Unsecured Ratings
TEHUM CARE: Seeks Conditional Approval of Disclosure Statement
TEHUM CARE: Updates Personal & Non-Personal Injury Claims Pay
TENET HEALTHCARE: Egan-Jones Retains B+ Senior Unsecured Ratings
THAI KITCHEN: Seeks to Tap Mullin Hoard & Brown as Legal Counsel
TIEL TRUST I FBO: Voluntary Chapter 11 Case Summary
TONAWANDA COKE: Unsecureds to get Share of Unsecured Carveout
TRIMONT ENERGY (GIB): Voluntary Chapter 11 Case Summary
TRIMONT ENERGY (NOW): Voluntary Chapter 11 Case Summary
TW AUTOMATION: Court OKs Interim Cash Collateral Access
TW AUTOMATION: Seeks to Hire Krigel & Krigel P.C. as Counsel
UNIFI INC: Egan-Jones Lowers Senior Unsecured Ratings to BB-
UNITI GROUP: Fitch Affirms 'B+' LongTerm IDR, Outlook Stable
URP MAIDEN LANE: Case Summary & Six Unsecured Creditors
VERINT SYSTEMS: Egan-Jones Retains BB Senior Unsecured Ratings
VISTA OUTDOOR: Moody's Confirms 'Ba3' CFR, Outlook Negative
WASHINGTON MEDICAL: Class 4 Unsecureds to get 75% of Their Claims
WEBER INC: S&P Affirms 'CCC+' Issuer Credit Rating, Outlook Neg.
WESTCHESTER HEALTH CARE: Moody's Cuts Ratings to Ba1, Outlook Neg
WESTLAKE SURGICAL: Hires Donlin Recano as Claims Agent
WESTLAKE SURGICAL: Hires Hayward PLLC as Counsel
WINDSOR TERRACE: Hires Stretto as Claims and Noticing Agent
YC RIVERGOLD: Class 7 Unsecureds Owed $1.9M to get Full Payment
ZELIS PAYMENTS: Moody's Affirms B2 CFR & Alters Outlook to Positive
[^] Recent Small-Dollar & Individual Chapter 11 Filings
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17841 PALORA: Trustee Hires Compass as Real Estate Broker
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A. Cisneros, the Trustee of 17841 Palora Manor LLC, seeks approval
from the U.S. Bankruptcy Court for the Central District of
California to employ Kristin Neithercut of Compass as real estate
broker.
The firm will market and sell the Debtor's real property located at
14520 Greenleaf St., Sherman Oaks, CA 91403.
The firm will be paid a commission of 4 percent of the sales
price.
As disclosed in a court filing that the firm is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
The firm can be reached at:
Kristin Neithercut
Compass
10154 Riverside Dr.
Toluca Lake, CA 91602-2532
Email: kristin@kristinneithercut.com
About 17841 Palora Manor LLC
17841 Palora Manor LLC is a real estate lessor.
The Debtor filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. C.D. Calif. Case No. 23-15519) on Aug. 28,
2023, with $1 million to $10 million in both assets and
liabilities. Mark Abbey Slotkin, manager, signed the petition.
Judge Sheri Bluebond oversees the case.
Jon H. Freis, Esq., at the Law Offices of Jon H. Freis represents
the Debtor as legal counsel.
279 NW 54 LLC: Hires Dsouza & Walton Law Group as Counsel
---------------------------------------------------------
279 NW 54 LLC seeks approval from the U.S. Bankruptcy Court for the
Southern District of Florida to employ Dsouza & Walton Law Group as
counsel.
The firm will provide these services:
(a) give advice to the Debtor with respect to its powers and
duties as a Debtor in Possession and the continued management of
its business operations;
(b) advise the Debtor with respect to its responsibilities in
complying with the U.S. trustee's Operating Guidelines and
Reporting Requirements and with the rules of the court;
(c) prepare motions, pleadings, orders, applications, adversary
proceedings, and other legal documents necessary in the
administration of the case;
(d) protect the interest of the Debtor in all matters pending
before the court; and
(e) represent the Debtor in negotiation with its creditors in
the preparation of a plan.
The firm will be paid at these rates:
Elias Leonard Dsouza, Esq. $400 per hour
Associate Attorneys $250 per hour
Law Clerks $150 per hour
Paralegals/Assistants $75 per hour
The Debtor paid the firm a retainer of $4,000.
The firm will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Elias Leonard Dsouza, Esq., a partner at Dsouza & Walton Law Group,
disclosed in a court filing that the firm is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
The firm can be reached at:
Elias Leonard Dsouza, Esq.
DSOUZA & WALTON LAW GROUP
8751 W. Broward Blvd, Suite 301
Plantation, FL 33324
Telephone: (954) 358-5911
Facsimile: (954) 357-2267
Email: Elias@DsouzaLegal.com
About 279 NW 54 LLC
279 NW 54 LLC, filed a Chapter 11 bankruptcy petition (Bankr. S.D.
Fla. Case No. 23-17304-PDR) on September 12, 2023.
The Debtor hires Dsouza & Walton Law Group as counsel.
365 S4 ST LLC: Seeks to Hire Sobers Law PLLC as Counsel
-------------------------------------------------------
365 S4 ST LLC seeks approval from the U.S. Bankruptcy Court for the
Eastern District of New York to employ Sobers Law, PLLC as
counsel.
The firm will render these services:
(a) attend meetings and negotiate with representatives of
creditors and other parties-in-interest;
(b) prepare and prosecute on behalf of the Debtor all legal
papers;
(c) negotiate and prepare on the Debtor's behalf Chapter 11
plan(s), disclosure statement(s) and all related agreements and
documents;
(d) advise the Debtor with respect to any sale of assets and
negotiate and prepare on the Debtor's behalf all agreements related
thereto; and
(e) appear before the court, and protect the interests of the
Debtors' estate before such courts; and perform all other legal
services in connection with the Chapter 11 case.
The firm will be paid at the rate of $450 per hour.
Vivian Sobers, Esq., an attorney at Sobers Law, 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:
Vivian Sobers, Esq.
SOBERS LAW, PLLC
11 Broadway, Suite 615
New York, NY 10004
Telephone: (917) 225-4501
Email: vsobers@soberslaw.com
About 365 S4 ST LLC
365 S4 ST LLC in Brooklyn, NY, filed its voluntary petition for
Chapter 11 protection (Bankr. E.D.N.Y. Case No. 23-43396) on
September 21, 2023, listing as much as $1 million to $10 million in
both assets and liabilities. Zalmen Wagschal as managing member,
signed the petition.
SOBERS LAW PLLC serve as the Debtor's legal counsel.
ACCO BRANDS: Egan-Jones Retains B+ Senior Unsecured Ratings
-----------------------------------------------------------
Egan-Jones Ratings Company on October 6, 2023, maintained its 'B+'
foreign currency and local currency senior unsecured ratings on
debt issued by Acco Brands Corporation. EJR also withdraws rating
on commercial paper issued by the Company.
Headquartered in Lake Zurich, Illinois, Acco Brands Corporation
manufactures office products.
ADVANCE INTERNATIONAL: Hits Chapter 11 Bankruptcy Protection
------------------------------------------------------------
Advance International Inc. filed for chapter 11 protection in the
Northern District of California. According to court documents, the
Debtor reports between $10 million and $50 million owed to 1 and 49
creditors. The petition states funds will be available to unsecured
creditors.
A tele/videoconference meeting of creditors under 11 U.S.C. Section
341(a) is slated for October 30, 2023, at 1:00 PM.
About Advance International
Advance International Inc. operates as a wholesaler.
Advance International Inc. sought relief under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. N.D. Cal. Case No. 23-41268) on Oct.
1, 2023. In the petition filed by Shahmard Ghorbani, as CEO, the
Debtor reports estimated assets and liabilities between $10
million and $50 million each.
The Honorable Bankruptcy Judge William J Lafferty handles the case.
The Debtor is represented by:
Marc Voisenat, Esq.
Law Offices of Marc Voisenat
174 Lawrence Drive, Suite J
Livermore, CA 94551
Tel: 510-263-8755
Fax: 510-272-9158
Email: voisenat@gmail.com
AIR CANADA: Egan-Jones Retains CCC- Senior Unsecured Ratings
------------------------------------------------------------
Egan-Jones Ratings Company on September 28, 2023, maintained its
'CCC-' foreign currency and local currency senior unsecured ratings
on debt issued by Air Canada. EJR also withdraws rating on
commercial paper issued by the Company.
Headquartered in Montreal, Canada, Air Canada provides domestic and
international carrier service.
AKUMIN INC: Reaches Deal With Stonepeak to Become Private Company
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Akumin Inc. announced it has reached an agreement with Stonepeak,
an alternative investment firm specializing in infrastructure and
real assets, and the Company's stakeholders on the terms of a
financial restructuring that will substantially improve the
Company's balance sheet and provide ample liquidity to position
Akumin for future success. The contemplated transaction will
result in Akumin no longer being publicly listed.
To effect the transaction in a timely and efficient manner, the
Company and certain of its subsidiaries will commence prepackaged
chapter 11 cases in the Southern District of Texas. The Company
expects to obtain court approval of the transaction within the next
45 days and complete the transaction after receiving certain
regulatory approvals. Throughout the process, Akumin's operations
are expected to continue as normal. The Company expects to
continue to pay trade creditors, employees, and other partners in
the ordinary course of business.
"Today's announcement marks the successful culmination of a
thorough strategic review process to ensure we have the right
capital structure in place to support our long-term success. As a
result of this transaction, Akumin will move forward as a private
company with increased financial flexibility and a strengthened
balance sheet, better positioned to execute on our strategic plan
to become the outpatient partner of choice for hospitals and health
systems," said Riadh Zine, chairman and chief executive officer of
Akumin. "We are pleased to enter this agreement with Stonepeak,
which we believe will enable us to maximize the value of our
business and create the best path forward for all of our
stakeholders."
He continued, "The overwhelming support of our financial partners
for this transaction is a testament to the strength of the
foundation we have built and their confidence in our future.
Akumin has significant scale, extensive and long-standing
relationships with hospitals and health systems, a unique service
offering, technological expertise in autonomous workflow for
healthcare service delivery and a deep bench of talent. We thank
our customers, partners, vendors and team members for their
continued support of Akumin in its commitment to enhancing patient
experiences and outcomes."
"Stonepeak is committed to working closely with Akumin as it moves
through this process," said James Wyper, senior managing director
at Stonepeak. "The critical nature of the services Akumin provides
to health systems, hospitals, physician groups, and patients all
across the country gives us confidence in the inherent value of the
business, and we believe that this path forward will fortify the
Company's balance sheet as it looks towards its next phase of
growth."
Transaction Details
The contemplated transaction will result in the existing Stonepeak
Note, totaling approximately $470 million, being cancelled and
converted into Common Shares of the Company. In addition,
Stonepeak will invest $130 million in new money into the Company as
a capital contribution.
To facilitate the transaction, the Company and Stonepeak have
executed a Restructuring Support Agreement with over one-third of
the Company's common equity, a supermajority of the Company's
bondholders, and all of the Company's revolving lenders. The
Restructuring Support Agreement provides that, other than those
notes which are exchanged for cash via the reverse Dutch election
opportunity described below, the Company's senior secured notes due
2025 will be exchanged for new senior secured notes with a maturity
of Aug. 1, 2027 and an increased interest rate, among other changes
in terms. Additionally, the Company's senior secured notes due
2028 will be exchanged for new senior secured notes with the same
maturity date but an increased interest rate, among other changes
in terms.
As part of the transaction, Akumin's existing common stockholders
will receive a total of $25 million in cash as well as certain
contingent value rights ("CVRs") for their shares.
The transaction will be implemented through a court-supervised
process and as such, the Company and certain of its subsidiaries
will commence prepackaged chapter 11 cases in the Southern District
of Texas. In the event Stonepeak provides debtor-in-possession
(DIP) financing or any other new money contributions at or prior to
the closing of the transaction, such DIP facilities and new money
will convert to equity at closing and reduce the $130 million
investment amount on a dollar-for-dollar basis. Stonepeak will
also make $60 million of the proceeds from its investment available
for a reverse Dutch election opportunity for the Company's notes
due 2025 and the notes due 2028.
About Akumin
Akumin Inc. -- www.akumin.com -- provides comprehensive radiology
and oncology services and solutions to approximately 1,000
hospitals and health systems across 48 states, and offers
fixed-site outpatient diagnostic imaging through a network of owned
and/or operated facilities. The Company's radiology procedures
include MRI, CT, PET/CT, ultrasound, 3D mammography, X-ray, and
other interventional procedures; its oncology services include a
full suite of radiation therapy and related offerings.
Akumin reported a net loss of $151.58 million for the year ended
Dec. 31, 2022, compared to a net loss of $34.81 million for the
year ended Dec. 31, 2021.
* * *
As reported by the TCR on Aug. 22, 2023, S&P Global Ratings lowered
all of its ratings on Akumin Inc., including its issuer credit
rating on the company to 'CCC' from 'B-'. S&P said the negative
outlook reflects the risk that, absent a significant operating
improvement, the Company's debt might not be sustainable.
AKUMIN INC: S&P Downgrades ICR to 'D' on Bankruptcy Filing
----------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on U.S.
diagnostic imaging operator Akumin Inc. to 'D' from 'CCC'. At the
same time, S&P lowered its issue-level ratings on the company's
revolving credit facility, senior notes due in 2025, and senior
notes due in 2028 to 'D' from 'CCC'.
S&P said, "We downgraded Akumin after it filed for bankruptcy under
Chapter 11 of the U.S. Bankruptcy Code. This follows a lengthy
period of operating challenges including stagnant revenue for
several years, coupled with a very high interest burden (especially
following the end of the payment-in-kind period for the unrated
subordinated debt). We expect to reassess our ratings on the
company and its new capital structure when it emerges from
bankruptcy."
ALAMANCE COMMUNITY: Moody's Rates New 2023A/B Revenue Bonds 'Ba2'
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Moody's Investors Service has assigned an initial Ba2 rating to
Alamance Community School, NC's proposed $7.4 million Charter
School Revenue Bonds (Alamance Community School Project), Series
2023A and $305,000 Charter School Revenue Bonds (Alamance Community
School Project), Series 2023B (Taxable) issued through the Public
Finance Authority, WI. Following the sale, the school will have
approximately $21 million in revenue debt outstanding, of which
$7.8 million is rated. The outlook is stable.
RATINGS RATIONALE
The initial Ba2 revenue bond rating balances Alamance Community
School's elevated leverage with its sound enrollment and operating
performance trends. Following the issuance of the Series 2023
bonds, the school's high financial leverage from debt will be the
school's primary credit weakness with cash to pro forma debt at
just 6%. Favorably, Alamance's management credibility has been
demonstrated by positive operating performance and strong
enrollment growth, nearly doubling since the school opened in the
2020-21 school year. Academic performance is favorable to the local
district and continued engagement with the local community will aid
student demand. The school contracts with Charter Success Partners,
a service provider to charter schools in North Carolina, to
proactively monitor operational and financial performance.
Continued enrollment growth will be required to support the
school's new debt service, with fiscal 2023 cash flow to pro forma
MADS coverage of 0.9x. Alamance's participation in a state-managed
pension plan adds to its fixed cost burden, which inclusive of
annual debt service and current pension contribution was equivalent
to 14% of fiscal 2023 operating revenue.
Governance considerations are key drivers of initial rating actions
and include the school's board composition coupled with a good
relationship with its authorizer. Alamance is currently in
compliance with all provisions of its charter contract with the
North Carolina State Board of Education, which supports the
school's prospects for renewal when the contract expires in 2025.
RATING OUTLOOK
The stable outlook reflects Moody's expectations of continued
enrollment growth and increasing cash flow from operations to
support of growing debt service commitments. The stable outlook
also reflects Moody's expectation of favorable academic performance
and conditions that will continue to support strong prospects for
charter renewal in 2025.
FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATINGS
-- Material reduction in leverage
-- Sustained revenue growth combined with gains in total cash
and investments
FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATINGS
-- Reduced liquidity and debt service coverage driven by
either structural imbalance or inability to complete capital
project within budget
-- Weakened competitive profile driven by enrollment loss or
lack of student demand
LEGAL SECURITY
The Series 2023 bonds are payable by lease payments, which will be
paid from gross revenues derived from the operations of the
Alamance Community School. The Series 2023 bonds are secured by a
Deed of Trust that includes the school's campus.
Bond covenants include a 40 days' cash on hand requirement and a
minimum of 1.1x annual debt service coverage beginning in fiscal
2023. Bondholders additionally benefit from a fully funded debt
service reserve fund. The Additional Bonds Test for the issuance of
the Series 2021 bonds was met with fiscal 2023 net revenues
sufficient to provide 1.1x annual debt service coverage and a
projection of at least 1.2x maximum annual debt service in fiscal
2026, the year following completion of the additional school
facilities.
USE OF PROCEEDS
The proceeds of the Series 2023 bonds will provide funds to
refinance an outstanding loan that was used to acquire a modular
classroom building, and finance the construction of a second
modular classroom building, a new gymnasium and improvements to the
school's parking lot.
PROFILE
Alamance Community School, NC is a self-managed and single site
charter school located in Haw River, NC, which is between
Greensboro, NC and Durham, NC along Interstate 40. Alamance's
curriculum focuses on Project Based Learning and Responsive
Classroom. The school currently serves 631 students in grades K-6,
but will expand to serves students in grades K-8 by the 2025-2026
school year. Alamance does not currently have plans to expand into
high school and has entered into an articulation agreement with
West Triangle High School, a project based learning high school,
beginning in the 2026-2027.
In 2020, Alamance was granted its initial charter contract by the
North Carolina State Board of Education for a five year term,
expiring on June 30, 2025. Alamance will begin working on it
charter renewal in early 2024 and based on conversations with its
authorizer Alamance remains in compliance with all terms of its
current charter contract, which supports the prospect for a renewal
in 2025.
METHODOLOGY
The principal methodology used in these ratings was US Charter
Schools published in September 2016.
ALLEGHANY CORP: Egan-Jones Withdraws Senior Unsecured Ratings
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Egan-Jones Ratings Company on September 27, 2023, withdraws foreign
currency and local currency senior unsecured ratings on debt issued
by Alleghany Corporation.
Headquartered in New York, Alleghany Corporation, through
subsidiaries and investments, operates primarily in property and
casualty reinsurance and insurance.
ALLEGIANT TRAVEL: Egan-Jones Retains B Senior Unsecured Ratings
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Egan-Jones Ratings Company on October 2, 2023, maintained its 'B'
foreign currency and local currency senior unsecured ratings on
debt issued by Allegiant Travel Company. EJR also withdraws rating
on commercial paper issued by the Company.
Headquartered in Las Vegas, Nevada, Allegiant Travel Company
operates as a leisure travel company.
ALPINE SUMMIT: Public Sale Auction Slated for November 6
--------------------------------------------------------
Pursuant to (a) Section 9-610 of the Uniform Commercial Code
adopted in the State of New York, (b) the amended and restated
indenture agreement dated Sept. 12, 2022, by and among Alpine
Summit Funding LLC ("ASF"), and UMB Bank NA, as indenture trustee,
paying agents and securities intermediary relating to ASF's (1)
Series 2022-1 Floating Rate Oil & Gas Asset-Backed Notes and (2)
Series 2022-2 Floating Rate Oil & Gas Assets-Backed Notes issued to
certain noteholders ("noteholders"), (c) the guaranty agreement
dated April 29, 2022, by Alpine Summit Funding Holdings LLC
("ASFH") in favor of the indenture trustee, and (d) the pledge
agreement dated as of April 29, 2022 by and among ASFH, the
indenture trustee, and ASF, the indenture trustee, for the benefit
of the noteholders, will offer for sale on Nov. 6, 2023, at 10:00
a.m. ([prevailing Eastern Time) at Orrick Herrington & Sutcliffe
LLP, 51 West 52nd Street, New York, New York 10019, to the public
the pledged collateral, which includes all right, title and
interest of, in and to (i) 100% of the equity in ASF, which is
owned by ASFH, and (ii) certain assets and rights related to the
pledged shares.
All inquiries concerning the sale and terms and conditions of the
sale must be made to: Orrick Herrington & Sutcliffe LLP,
attention:
Raniero D'Aversa, Esq.
Tel: (212) 506-3715
Email: rdaversa@orrick.com
Michael Trentin, Esq.
Tel: (212) 506-5393
Email: mtrentin@orrick.com.
Any person making any inquiry or request must (i) disclose the
person or entity on whose behalf such information is being sought,
(ii) execute a confidentiality agreement, and (iii) maintain
confidentiality of the information provided.
AMERIFIRST FINANCIAL: Hires Phoenix Capital as Marketer, Advisor
-----------------------------------------------------------------
Amerifirst Financial, Inc. and its affiliates seek approval from
the U.S. Bankruptcy Court for the District of Delaware to employ
Phoenix Capital, Inc. as marketer and advisor.
The firm's services include:
a. analysis for sale selection and development of product
profile;
b. discussion of pricing expectations;
c. preparation of marketing material;
d. comprehensive bid analysis;
e. bid letter negotiation, including pricing and terms;
f. purchase & Sale Agreement negotiation, including pricing
and terms;
g. completion of sale process: (i) Guidance with operational
aspects of transaction documents; (ii) Preparation of detailed
timetables and responsibility outlines; (iii) Generation of trial
balance reports; and (iv) Assistance in resolving issues arising
from due diligence where possible;
h. analysis of production throughout term of the Purchase and
Sale Agreement as necessary; and
i. preparation of settlement statement(s) (i.e., initial
funding statement, sale date UPB statement, and sale date UPB
statement adjusted for prepayments).
The firm will be paid at a fixed fee of $50,000.
Garrett Jimenez, a partner at Phoenix Capital, Inc., disclosed in a
court filing that the firm is a "disinterested person" as the term
is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Garrett Jimenez
Phoenix Capital, Inc.
1999 Broadway, Suite 4350
Denver, CO 80202
Tel: (303) 892-7070
About AmeriFirst Financial
AmeriFirst Financial, Inc., a mid-sized independent mortgage
company, and its affiliate Phoenix 1040, LLC filed Chapter 11
petitions (Bankr. D. Del. Lead Case No. 23-11240) on Aug. 24, 2023.
In the petitions signed by T. Scott Avila, chief restructuring
officer, each Debtor disclosed between $50 million and $100 million
in both assets and liabilities.
Judge Thomas M. Horan oversees the cases.
The Debtors tapped Laura Davis Jones, Esq., at Pachulski Stang
Ziehl & Jones, LLP as bankruptcy counsel; Paladin Management Group,
LLC as restructuring advisor; and Omni Agent Solutions, Inc. as
claims, noticing and administrative agent.
AMERIFIRST FINANCIAL: Hires Weiner Brodsky as Special Counsel
-------------------------------------------------------------
Amerifirst Financial, Inc., seek and its affiliates approval from
the U.S. Bankruptcy Court for the District of Delaware to employ
Weiner Brodsky Kider PC as special counsel.
The firm will assist the Debtors with matters related to the sale
of the Debtors' mortgage servicing rights (MSRs), including,
negotiating and drafting an asset purchase agreement, assisting
with the closing of a sale, as requested, and other and related
MSRs sale matters.
The firm will be paid at these rates:
Mitchel H. Kider $930 per hour
Don J. Halpern $835 per hour
Attorneys and staff $290 to $835 per hour
The firm will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Mitchel H. Kider, a partner at Weiner Brodsky Kider PC, disclosed
in a court filing that the firm is a "disinterested person" as the
term is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Mitchel H. Kider, Esq.
Weiner Brodsky Kider PC
1300 19th Street NW, 5th Floor
Washington, DC 20036
Tel: (202) 628-2000
About AmeriFirst Financial
AmeriFirst Financial, Inc., a mid-sized independent mortgage
company, and its affiliate Phoenix 1040, LLC filed Chapter 11
petitions (Bankr. D. Del. Lead Case No. 23-11240) on Aug. 24, 2023.
In the petitions signed by T. Scott Avila, chief restructuring
officer, each Debtor disclosed between $50 million and $100 million
in both assets and liabilities.
Judge Thomas M. Horan oversees the cases.
The Debtors tapped Laura Davis Jones, Esq., at Pachulski Stang
Ziehl & Jones, LLP as bankruptcy counsel; Paladin Management Group,
LLC as restructuring advisor; and Omni Agent Solutions, Inc. as
claims, noticing and administrative agent.
AMNEAL PHARMACEUTICALS: Moody's Rates New 1st Lien Term Loan 'B2'
-----------------------------------------------------------------
Moody's Investors Service assigned B2 rating to Amneal
Pharmaceuticals, LLC's proposed senior secured first lien term loan
due May 2028. Concurrently, Moody's affirmed the company's
corporate family rating at B2, and probability of default rating at
B2-PD. The company's Speculative Grade Liquidity rating was lowered
to SGL-2 from SGL-1. The outlook remains stable.
The net proceeds from the company's new $2.55 billion senior
secured first lien term loan and roughly $109 million of borrowings
under its asset based revolver will be used to repay the $2.55
billion aggregate principal amount outstanding under the term loan
due May 2025 and pay related fees and expenses. The proposed
transaction extends maturities of Amneal's senior secured first
lien term loan by three years, while also upsizing its asset based
revolver (unrated) due 2027, to $600 million from $350 million. The
B2 rating on the company's existing senior secured term loan is
unaffected and will be withdrawn once the refinancing transaction
is completed.
Moody's views the proposed bank debt refinancing transaction as
modestly credit positive because it extends the company's debt
maturity profile and provides additional revolver capacity to
support the company's liquidity needs.
RATINGS RATIONALE
Amneal's B2 Corporate Family Rating reflects its moderate size and
scale by revenue compared to generic pharmaceutical peers, and its
moderately high pro forma financial leverage which was 5.7x as of
June 30, 2023, on Moody's adjusted basis (pro forma for
refinancing). Amneal has significant concentration in the US where
it faces earnings volatility in its generics business due to
pricing pressure on its base of existing products. Having said
that, Amneal generates nearly 50% of operating profit from its
specialty branded drugs. In addition, the Avkare distribution
business and expected contribution from three biosimilar launches
will help mitigate the volatility in its generics business.
Amneal's rating also reflects its significant manufacturing
capacity in the US and India, as well as its advancing complex drug
development and in-house active pharmaceutical ingredient (API)
production.
The SGL-2 speculative grade liquidity rating reflects Moody's
expectation that Amneal will maintain good liquidity over the next
12-18 months. Amneal's unrestricted cash at the close of
transaction will be roughly $115 million. Moody's expects Amneal
will generate free cash flow of over $100 million, over the next 12
months, which includes Opana ER litigation payout. Moody's expects
$60-$70 million of capital expenditures and roughly $26 million of
term loan amortization, over the said period. The liquidity will
also be tempered by the remaining $50 million settlement payout
related to Opana, due in Q1, 2024. Amneal liquidity is bolstered by
access to a $600 million (upsized from $350 million) asset-based
revolver that expires in 2027. There will be roughly $209 million
drawn on the revolver at the close of the transaction. However,
Moody's expects Amneal will steadily repay these borrowings.
Amneal's senior secured first lien term loan does not have
financial maintenance covenants. There is a springing minimum fixed
charge coverage ratio of 1.0x that is tested only if more than 90%
of the revolver is drawn. Moody's does not believe the covenant
will be tested over the next twelve months.
As proposed, the new credit facilities are expected to provide
covenant flexibility that if utilized could negatively impact
creditors. Notable terms include the following:
Incremental debt capacity up to 50% of closing date EBITDA , plus
unlimited amounts subject to 4.20x FLNLR (if pari passu secured).
No portion of the incremental may be incurred with an earlier
maturity than the initial term loans. The credit agreement permits
the transfer of assets to unrestricted subsidiaries, up to the
carve-out capacities, subject to "blocker" provisions which
restrict the transfer of intellectual property that is material to
the company, taken as a whole (as determined by the company in good
faith), to unrestricted subsidiaries.
Non-wholly-owned subsidiaries are not required to provide
guarantees; dividends or transfers resulting in partial ownership
of subsidiary guarantors could jeopardize guarantees, subject to
protective provisions which only permit guarantee releases if they
result from bona fide transactions, which are not undertaken for
the primary purpose of releasing the guarantee. The credit
agreement is expected to provide some limitations on up-tiering
transactions including the requirement that each directly and
adversely affected lender consents to the subordination of liens
with respect to all or substantially all of the value of
collateral, unless such senior debt is offered on a pro rata
basis.
The proposed terms and the final terms of the credit agreement may
be materially different
The B2 rating assigned to the proposed $2.55 billion senior secured
term loan due 2028 is the same as the B2 CFR. The rating reflects
term loan's priority first lien on all assets of the borrower,
except short term assets such as inventory and receivables on which
it has a second lien behind the unrated $600 million ABL revolver.
There will be roughly $209 million drawn on the revolver at the
close of the transaction. However, Moody's expects Amneal will
steadily repay these borrowings, over the next 12-18 months.
Amneal's CIS-3 score indicates that ESG considerations have a
limited impact on the current credit rating with potential for
greater negative impact over time. Amneal's social risk
considerations (S-3) include industry-wide risk exposures related
to policy and regulatory risk, and high manufacturing compliance
standards. In addition, material percentage of Amneal's revenue is
generated in the US, with high exposure to government payors and
legislative efforts aimed at reducing drug pricing, such as the
recently passed US Inflation Reduction Act. Responsible production
considerations include product safety risk, which leads to
continued litigation exposures, including antitrust litigation
related to Opana ER and alleged generic drug price-fixing matters.
Amneal's governance risk considerations (G-4) reflect the company's
aggressive financial policies and high financial leverage.
Additionally, despite being public, Amneal's co-CEOs are founders
and own a sizable portion of the company.
The stable outlook reflects Moody's expectations that financial
leverage will improve through earnings growth, while liquidity will
remain at least good, over the next 12-18 months.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
The rating could be upgraded if the company demonstrates consistent
organic revenue and EBITDA growth, and maintains debt/EBITDA below
5.0x. A rating upgrade would also require Moody's expectations of
financial policies that support the above credit metrics, and
maintenance of at least good liquidity, with robust free cash
flows.
The rating could be downgraded if the company's operating
performance materially deteriorates, or if there are negative
developments in the commercialization of company's pipeline.
Ratings could be downgraded should organic revenue or profit margin
weaken, or if debt/EBITDA is sustained above 6.0x. Deterioration of
liquidity highlighted by weakening in free cash flow generation, or
increased reliance of the revolver facility could also lead to a
downgrade.
The principal methodology used in these rating was Pharmaceuticals
published in November 2021.
Headquartered in Bridgewater, New Jersey, Amneal Pharmaceuticals,
LLC, is a generic pharmaceutical manufacturer with facilities in
New York, New Jersey, and India. The company generates most of its
revenue in the US, with some presence internationally. Amneal
Pharmaceuticals, LLC generated $2.3 billion in revenue for the
twelve months ended June 30, 2023.
AMNEAL PHARMACEUTICALS: S&P Rates New $2.55BB Term Loan 'B'
-----------------------------------------------------------
S&P Global Ratings assigned its 'B' issue-level rating and '4'
recovery rating to Amneal Pharmaceuticals LLC's proposed $2.55
billion term loan due 2028. The '4' recovery rating indicates S&P's
expectation for meaningful (50%-70%; rounded estimate: 45%)
recovery in the event of a payment default. The company plans to
use the net proceeds from this loan, along with borrowings from its
asset-based lending (ABL) facility, to repay its existing $2.55
billion term loan and pay associated fees and expenses. At the same
time, Amneal is upsizing its ABL credit facility (not rated) to
$600 million from $350 million.
S&P said, "Our ratings on Amneal reflect its participation in the
competitive generics pharmaceutical market and mid-tier size
relative to its much-larger competitors, such as Teva
Pharmaceutical Industries Ltd. and Viatris Inc. It also reflects
our expectation that the company's leverage will remain high (S&P
Global Ratings-adjusted debt to EBITDA of 5.7x as of June 30,
2023). We expect Amneal will expand its revenue and EBITDA margin
supported by its continued shift toward more-complex products and
improved operating leverage. We anticipate this shift will also
support an increase in its EBITDA. Although we expect the company's
leverage will remain high, we anticipate it will reduce its
leverage to the mid-5x area in 2023 and to the low-5x area in
2024."
ISSUE RATINGS--RECOVERY ANALYSIS
Key analytical factors
-- Amneal's debt structure comprises a $600 million ABL credit
facility due 2027 (assumed 60% drawn at default) and a $2.55
billion senior secured term loan B due 2028. The new term loan will
benefit from the pledge of Amneal's equity interest in AvKARE, of
which it owns 65% (although the AvKARE subsidiaries will not be
obligors).
-- AvKARE will continue to have a stand-alone debt structure that
comprises a $30 million senior secured revolving credit facility, a
$38 million senior secured term loan, and $44 million of unsecured
seller's notes. AvKARE does not guarantee or pledge its assets to
the obligations of Amneal's parent or subsidiaries.
-- In S&P's recovery analysis, it contemplates a default in 2026.
-- S&P expects Amneal to reorganize in a default scenario given
its portfolio of abbreviated new drug applications (ANDAs),
research and development and manufacturing capabilities, and
customer relationships.
-- S&P assumes Amneal's consolidated results represent an
obligor/nonobligor split of 72%/7%. The remaining 21% of EBITDA in
our analysis is attributable to AvKARE's separate credit group.
Simulated default assumptions
-- Year of default: 2026
-- Emergence EBITDA: $300 million
-- EBITDA multiple: 6x
-- Gross enterprise value (EV): $1.80 billion
Simplified waterfall
-- Net EV waterfall after administrative expenses (5%): $1.71
billion
-- Valuation split (obligors/nonobligors/AvKARE): 72%/7%/21%
-- Net EV AvKARE: $359 million
-- Estimated claims at AvKARE: $88 million
-- AvKARE minority equity holder share (35%): $95 million
-- AvKARE residual equity vale (collateral): $176 million
-- Net EV other nonobligors (collateral/unpledged): $120 million
($78 million/$42 million)
-- Net EV obligors: $1.23 billion
-- Priority claims (ABL): $367 million
-- Net EV of obligors: $863 million
-- Total value available to secured creditors (collateral and
unpledged value): $1.16 billion
-- Estimated senior secured claims: $2.57 billion
--Recovery expectations: 30%-50% (rounded estimate: 45%)
Note: All estimated debt claims include about six months of accrued
but unpaid interest outstanding at default.
ANAGRAM INT'L: Fitch Hikes Rating on 1st Lien Secured Notes to CCC
------------------------------------------------------------------
Fitch Ratings identified an error in its recovery analysis of
Anagram Holdings, LLC and Anagram International Inc.'s (Anagram)
that incorrectly led the first lien secured notes to be rated
'CCC-'/'RR1'. Correcting the error using the most recent recovery
tool led to a one notch upgrade for the first lien secured notes to
'CCC'/'RR1'. Anagram's Issuer Default Rating (IDR) remains 'RD' and
its second lien notes debt rating is unchanged at 'C'/'RR6'.
KEY RATING DRIVERS
Anagram's 'RD' IDR is based on the following factors, which are
unaffected by the correction described above:
Uncured Missed Interest Payment: Anagram initially skipped an
interest payment on its $125 million first lien secured notes on
Aug. 14, 2023, and entered into a 30-day grace period and an
indenture forbearance agreement. On Sept. 21, 2023, the company
announced that it had not cured the skipped interest payment, and
that the indenture forbearance agreement had terminated leading to
an event of default under the Anagram first lien notes.
Fitch views the failure to cure the missed interest payment within
the original grace period as a restricted default as per its
ratings definitions. The event of default on the first lien notes
triggered cross-defaults on Anagram's other debts, including its
ABL facility and its second lien notes, and the company has stated
it is in active dialogue with the holders of its debt to address
the events of default.
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 modestly 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.
DERIVATION SUMMARY
Anagram's 'RD' IDR reflects the company's failure to cure its
missed interest payment after the expiry of the original 30-day
cure period/forbearance agreement following the non-payment of
interest on its approximately $130 million first lien secured notes
on Aug. 14, 2023.
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.
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.
RECOVERY ANALYSIS
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 to
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 5-7x 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
$129 million first lien secured notes, the latter of which is rated
'CCC'/'RR1'. The second lien secured notes (around $110 million
outstanding) would be expected to have poor recovery prospects
(0%-10%), and are thus rated 'C'/'RR6'.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to a
positive rating action/upgrade:
- Fitch will reassess the company's credit profile if there is a
successful resolution to the current restricted default.
Factors that could, individually or collectively, lead to a
negative rating action/downgrade:
- The IDR will be downgraded to 'D' if a bankruptcy or
restructuring occurs.
LIQUIDITY AND DEBT STRUCTURE
Limited Liquidity: Anagram's liquidity is comprised of cash on
hand, after the uncured missed interest payment on its first lien
notes led to an event of default on under its ABL credit agreement
($15 million ABL facility which 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 $130 million in first-lien secured
notes due August 2025 and around $110 million in second-lien
secured notes due August 2026.
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.
senior secured LT CCC Upgrade RR1 CCC-
Anagram Holdings, LLC
senior secured LT CCC Upgrade RR1 CCC-
ASHFORD HOSPITALITY: Declares Q4 2023 Preferred Dividends
---------------------------------------------------------
Ashford Hospitality Trust, Inc. disclosed that its board of
directors has:
a) declared a dividend for the fourth quarter ending December
31, 2023, of $0.5281 per diluted share, for the Company's 8.45%
Series D Cumulative Preferred Stock. This dividend is on payable
January 16, 2024, to stockholders of record as of December 29,
2023;
b) declared a dividend for the fourth quarter ending December
31, 2023, of $0.4609 per diluted share, for the Company's 7.375%
Series F Cumulative Preferred Stock. This dividend is payable on
January 16, 2024, to stockholders of record as of December 29,
2023;
c) declared a dividend for the fourth quarter ending December
31, 2023, of $0.4609 per diluted share, for the Company's 7.375%
Series G Cumulative Preferred Stock. This dividend is on payable
January 16, 2024, to stockholders of record as of December 29,
2023;
d) declared a dividend for the fourth quarter ending December
31, 2023, of $0.46875 per diluted share, for the Company's 7.50%
Series H Cumulative Preferred Stock. This dividend is on payable
January 16, 2024, to stockholders of record as of December 29,
2023;
e) declared a dividend for the fourth quarter ending December
31, 2023, of $0.46875 per diluted share, for the Company's 7.50%
Series I Cumulative Preferred Stock. This dividend is on payable
January 16, 2024, to stockholders of record as of December 29,
2023;
f) declared a monthly cash dividend for the Company's Series J
Redeemable Preferred Stock equal to a quarterly rate of $0.50 per
share, payable as follows: $0.16667 per share will be paid on
November 15, 2023 to stockholders of record as of October 31, 2023;
$0.16667 per share will be paid on December 15, 2023 to
stockholders of record as of November 30, 2023; and $0.16667 per
share will be paid on January 16, 2024, to stockholders of record
as of December 29, 2023;
g) declared a monthly cash dividend for CUSIP 04410D867 of the
Company's Series K Redeemable Preferred Stock equal to a quarterly
rate of $0.51875 per share, payable as follows: $0.17292 per share
will be paid on November 15, 2023 to stockholders of record as of
October 31, 2023; $0.17292 per share will be paid on December 15,
2023 to stockholders of record as of November 30, 2023; and
$0.17292 per share will be paid on January 16, 2024, to
stockholders of record as of December 29, 2023; and
h) declared a monthly cash dividend for CUSIPs 04410D792,
04410D727, 04410D651 and 04410D578 of the Company's Series K
Redeemable Preferred Stock equal to a quarterly rate of $0.51250
per share, payable as follows: $0.17083 per share will be paid on
November 15, 2023 to stockholders of record as of October 31, 2023;
$0.17083 per share will be paid on December 15, 2023 to
stockholders of record as of November 30, 2023; and $0.17083 per
share will be paid on January 16, 2024, to stockholders of record
as of December 29, 2023.
As of September 30, 2023, there were 2,628,792 shares of the
Company's Series J Redeemable Preferred Stock and 154,233 shares of
the Company's Series K Redeemable Preferred Stock issued and
outstanding.
About Ashford Hospitality
Headquartered in Dallas, Texas, Ashford Hospitality Trust, Inc.
operates as a self-advised real estate investment trust focusing on
the lodging industry.
Egan-Jones Ratings Company on May 5, 2023, maintained its 'CCC+'
foreign currency and local currency senior unsecured ratings on
debt issued by Ashford Hospitality Trust, Inc. EJR also withdraws
'B' rating on commercial paper issued by the Company.
ASHLAND LLC: Egan-Jones Retains BB+ Senior Unsecured Ratings
------------------------------------------------------------
Egan-Jones Ratings Company on October 9, 2023, maintained its 'BB+'
foreign currency and local currency senior unsecured ratings on
debt issued by Ashland LLC.
Headquartered in Wilmington, Delaware, Ashland LLC operates as a
specialty chemical company.
AULT ALLIANCE: Declares Monthly Cash Dividend of $0.2708333 Apiece
------------------------------------------------------------------
Ault Alliance, Inc. announced that its Board of Directors has
declared a monthly cash dividend of $0.2708333 per share of the
Company's outstanding 13.00% Series D Cumulative Redeemable
Perpetual Preferred Stock. The record date for this dividend is
Oct. 31, 2023, and the payment date is Monday, Nov. 13, 2023.
Link to NYSE quote for the Company's 13.00% Series D Cumulative
Redeemable Perpetual Preferred Stock:
https://www.nyse.com/quote/XASE:AULTpD
About Ault Alliance Inc.
Ault Alliance, Inc. (formerly, BitNile Holdings, Inc.) is a
diversified holding company pursuing growth by acquiring
undervalued businesses and disruptive technologies with a global
impact. Through its wholly- and majority-owned subsidiaries and
strategic investments, the Company owns and operates a data center
at which the Company mines Bitcoin, and provides mission-critical
products that support a diverse range of industries, including
crane services, oil exploration, defense/aerospace, industrial,
automotive, medical/biopharma, consumer electronics, hotel
operations and textiles. In addition, the Company extends credit
to select entrepreneurial businesses through a licensed lending
subsidiary.
Ault Alliance reported a net loss of $189.83 million for the year
ended Dec. 31, 2022, compared to a net loss of $23.04 million for
the year ended Dec. 31, 2021. As of March 31, 2023, the Company
had $526.91 million in total assets, $336.56 million in total
liabilities, and $190.34 million in total stockholders' equity.
New York, New York-based Marcum LLP, the Company's auditor since
2016, issued a "going concern" qualification in its report dated
April 17, 2023, citing that the Company has a working capital
deficiency, has incurred net losses and needs to raise additional
funds to meet its obligations and sustain its operations. These
conditions raise substantial doubt about the Company's ability to
continue as a going concern.
AVALON MOBILE: Case Summary & Six Unsecured Creditors
-----------------------------------------------------
Debtor: Avalon Mobile Home Park Partnership LLLP
6225 Tara Blvd.
Jonesboro, GA 30236
Business Description: Avalon Mobile is primarily engaged in
renting and leasing real estate properties.
Chapter 11 Petition Date: October 25, 2023
Court: United States Bankruptcy Court
Northern District of Georgia
Case No.: 23-60521
Debtor's Counsel: J. Robert Williamson, Esq.
SCROGGINS & WILLIAMSON, P.C.
4401 Northside Parkway
Suite 450
Atlanta, GA 30327
Tel: 404-893-3880
Email: rwilliamson@swlawfirm.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $10 million to $50 million
The petition was signed by Kathryn C. Taylor as general partner.
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/HGXONGY/Avalon_Mobile_Home_Park_Partnership__ganbke-23-60521__0001.0.pdf?mcid=tGE4TAMA
AVAMERE NPS: Hires McNamee Hosea P.A. as Counsel
------------------------------------------------
Avamere NPS Stables, LLC and its affiliate seek approval from the
U.S. Bankruptcy Court for the District of Columbia to employ
McNamee Hosea, P.A. as counsel.
The firm's services include:
a. prepare and file all necessary bankruptcy pleadings on behalf
of the Debtor;
b. negotiate with creditors;
c. representation with respect to Adversary and other
proceedings in connection with the Bankruptcy;
d. prepare the Debtor's disclosure statement and plan of
reorganization; and
e. any other matters related to the Bankruptcy and the Debtor's
reorganization.
The firm will be paid at these rates:
Craig M. Palik $425 per hour;
Justin P. Fasano $400 per hour;
Associates $300 to $350.00 per hour
Paralegal $135 per hour
The firm will also be reimbursed for reasonable out-of-pocket
expenses incurred.
The firm received a retainer of $11,738, paid by Benucci Capital,
an affiliate of B&L Funding, LLC, a secured creditor of the
Debtor.
Craig M. Palik, Esq., a partner at McNamee Hosea, P.A., disclosed
in a court filing that the firm is a "disinterested person" as the
term is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Craig M. Palik, Esq.
Justin P. Fasano, Esq.
MCNAMEE HOSEA, P.A.
6404 Ivy Lane, Suite 820
Greenbelt, MD 20770
Tel: (301) 441-2420
Fax: (301) 982-9450
Email: cpalik@mhlawyers.com
jfasano@mhlawyers.com
About Avamere NPS Stables, LLC
Avamere NPS Stables LLC in Ashburn, VA, and affiliate filed its
voluntary petition for Chapter 11 protection (Bankr. D. Colo. Case
No. 23-00285) on October 5, 2023, listing as much as $1 million to
$10 million in both assets and liabilities. James Smith as managing
member, signed the petition.
Judge Elizabeth L. Gunn oversees the case.
MCNAMEE HOSEA, P.A. serve as the Debtor's legal counsel.
AVIS BUDGET: Egan-Jones Retains BB Senior Unsecured Ratings
-----------------------------------------------------------
Egan-Jones Ratings Company on September 28, 2023, maintained its
'BB' foreign currency and local currency senior unsecured ratings
on debt issued by Avis Budget Group, Inc. EJR also withdraws rating
on commercial paper issued by the Company.
Headquartered in Parsippany-Troy Hills, New Jersey, Avis Budget
Group, Inc. operates as a vehicle rental and mobility solution
service provider.
B & J INTERIORS: Case Summary & Seven Unsecured Creditors
---------------------------------------------------------
Debtor: B & J Interiors, Inc.
221 W Kimbrough Street
Mesquite, TX 75149
Chapter 11 Petition Date: October 25, 2023
Court: United States Bankruptcy Court
Northern District of Texas
Case No.: 23-32435
Debtor's Counsel: Eric A. Liepins, Esq.
ERIC A. LIEPINS, P.C.
12770 Coit Road
Suite 1100
Dallas, TX 75251
Tel: (972) 991-5591
Fax: (972) 991-5788
Email: eric@ealpc.com
Estimated Assets: $0 to $50,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Bill Fisher as president.
A full-text copy of the petition containing, among other items, a
list of the Debtor's seven unsecured creditors is available for
free at PacerMonitor.com at:
https://www.pacermonitor.com/view/KW5Y3CQ/B__J_Interiors_Inc__txnbke-23-32435__0001.0.pdf?mcid=tGE4TAMA
BADGER MUTUAL: A.M. Best Cuts Fin. Strength Rating to C++(Marginal)
-------------------------------------------------------------------
AM Best has downgraded the Financial Strength Rating to C++
(Marginal) from B+ (Good) and the Long-Term Issuer Credit Rating
(Long-Term ICR) to "b+" (Marginal) from "bbb-" (Good) of Badger
Mutual Insurance Company (Badger) (Milwaukee, WI). The outlook of
the FSR has been revised to stable from negative, while the outlook
of the Long-Term ICR is negative.
The Credit Ratings (ratings) reflect Badger's balance sheet
strength, which AM Best assesses as weak, as well as its marginal
operating performance, limited business profile and marginal
enterprise risk management (ERM).
The rating downgrades reflect material erosion in Badger's capital
position, elevated leverage metrics and recent adverse loss
development. The significant decline in surplus considerably
reduced the company's risk-adjusted capitalization, as measured by
Best's Capital Adequacy Ratio (BCAR), from last year and AM Best
expects the position to erode further in 2023. Collectively these
factors weakened the overall balance sheet strength of Badger
leading to the current assessment of weak. Capital erosion is
primarily attributed to outsized volatility in underwriting results
in recent periods contributing to significantly negative operating
earnings, which was materially impacted by weather-related losses
and inflationary pressures. Management responded with rate
increases, deductible changes, as well as strategic de-risking of
the company's portfolio to improve performance and reduce pressure
on the balance sheet. While these efforts are expected to generate
positive results in the medium term, the initiatives have yet to
gain traction. Furthermore, the rating downgrades reflect Badger's
business profile's susceptibility to weather losses, given the
property component of the book.
The negative outlook on the Long-Term ICR reflects the negative
trends in Badger's capital position, which continues to challenge
overall balance sheet strength. Elevated frequency and severity of
net retained losses has the potential to strain prospective capital
levels, as well as operating performance and subsequently
risk-adjusted capitalization.
BALL CORP: Egan-Jones Retains BB+ Senior Unsecured Ratings
----------------------------------------------------------
Egan-Jones Ratings Company on October 12, 2023, maintained its
'BB+' foreign currency and local currency senior unsecured ratings
on debt issued by Ball Corporation.
Headquartered in Westminster, Colorado, Ball Corporation provides
metal packaging for beverages, foods, and household products.
BELDEN INC: Egan-Jones Retains BB- Senior Unsecured Ratings
-----------------------------------------------------------
Egan-Jones Ratings Company on September 29, 2023, maintained its
'BB-' foreign currency and local currency senior unsecured ratings
on debt issued by Belden Inc. EJR also withdraws rating on
commercial paper issued by the Company.
Headquartered in St. Louis, Missouri, Belden Inc. designs,
manufactures, and markets cable, connectivity, and networking
products.
BENITAGO INC: Seeks to Hire Ordinary Course Professionals
---------------------------------------------------------
Benitago Inc. and its affiliates seek approval from the U.S.
Bankruptcy Court for the Southern District of New York to employ
ordinary course professionals.
The following are the ordinary course professionals the services
rendered:
Ordinary Course Professional Service Provided
AEGIS LAW Buy-side transaction and US
trademark support
Becker, Glynn, Muffly, Corporate Tax
Chassin & Hosinski LLP
Breuer Lehman Rechtanswalte International trademark support
Brown Immigration Law Employee(s) VISA/immigration
support
Canero Fadul Immigration Employee(s) immigration support
DJM Solicitors UK litigation
Gunderson Dettmer Stough Corporate governance and
Villeneuve Franklin & transaction counsel
Hachigian LLP
Kolken Law VISA immigration support
Legal Scale LLP Corporate finance
LTL Attorneys LLP Corporate litigation
Stanton IP Law Firm, P.A. IP support
Wolf, Greenfield & IP support
Sacks, P.C.
Total fees, excluding costs and disbursements, of each Ordinary
Course Professional shall not exceed $25,000 per month, and
$150,000 in the aggregate.
About Benitago Inc.
Benitago Inc. operates an e-commerce aggregator platform intended
to create, acquire and grow businesses.
Benitago Inc. sought relief under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. S.D.N.Y. Lead Case No. 23-11394) on August 30, 2023.
In the petition filed by Thomas Studebaker, as chief restructuring
officer, the Debtor reports estimated assets and liabilities (on a
consolidated basis) between $50 million and $100 million.
Benitago Inc. is a New York-based company, which operates an
e-commerce aggregator platform intended to create, acquire and grow
businesses.
Benitago and affiliates sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. S.D. N.Y. Lead Case No. 23-11394) on
Aug. 30, 2023. In the petition signed by its chief restructuring
officer, Thomas Studebaker, Benitago disclosed $50 million to $100
million in both assets and liabilities.
Judge Sean H. Lane oversees the cases.
Kyle J. Ortiz, Esq., at Togut Segal & Segal LLP, is the Debtors'
legal counsel. The Debtors tapped Portage Point Partners as
financial advisor and Stretto Inc. as notice, claims, and balloting
agent.
BRIGHT MOUNTAIN: Appoints Ethan Rudin as CFO
--------------------------------------------
Bright Mountain Media, Inc. announced that Ethan Rudin has been
appointed as chief financial officer, effective Oct. 18, 2023.
Mr. Rudin, age 49, served as the chief financial officer of
Boundless Network, a private equity-backed promotional products
distribution platform, since November 2022. Mr. Rudin previously
served as the chief financial officer of BuildDirect Technologies,
an online building materials retailer, from January 2021 to
September 2022. Prior to joining BuildDirect Technologies, Mr.
Rudin served as the chief financial officer of Greenlane Holdings
Inc., a distribution platform for premium vaporization products,
from Feb 2019 to August 2020. Prior to joining Greenlane Holdings
Inc., Mr. Rudin served in various roles at Napster/Rhapsody
International Inc., an online music streaming platform, from August
2013 to December 2017, including as a special advisor to the chief
executive officer and as the chief financial officer, Global Head
of Label Relations & Business Development. Mr. Rudin earned his
Bachelor of Arts in Economics from Tufts University in 1996 and his
Masters of Business Administration from Columbia University
Business School in 2002.
Mr. Rudin's early career began in public accounting at KPMG LLP and
then later in global investment banking at Citi, JPMorgan and Banc
of America Securities, advising on large capital raising mandates
and mergers and acquisitions.
"This is an incredible time for Bright Mountain Media and I am
excited to join the team at this point in the company's evolution,"
stated Mr. Rudin. "The company has the potential for significant
growth in the coming years and I am looking forward to working with
the team to execute on the company's strategic vision, accelerate
growth, and enhance value for our shareholders."
Matt Drinkwater, chief executive officer of Bright Mountain Media
commented, "We are pleased to welcome Ethan to the team. Ethan
brings a wealth of public company knowledge and business experience
and will play a key role as the company continues to execute an
aggressive growth strategy."
Pursuant to an employment agreement with the Company dated Oct. 4,
2023, Mr. Rudin will receive an annual base salary of $325,000 and
will be eligible for an annual bonus of up to 25% of his base
salary based on his performance. In addition to his base salary
and bonus, Mr. Rudin will be eligible to participate in all of the
Company's benefit plans offered to employees of the Company from
time to time, subject to satisfying eligibility requirements.
On Oct. 13, 2023, Bright Mountain announced that Miriam Martinez
will be transitioning from the chief financial officer of the
Company to the principal financial officer of the Company,
effective immediately. Ms. Martinez will continue to serve as the
Company's principal financial officer for a period of 60 days
following the Effective Date, followed by which Ms. Martinez will
be taking a leave of absence from the Company.
About Bright Mountain
Based in Boca Raton, Fla., Bright Mountain Media, Inc. --
www.brightmountainmedia.com -- is engaged in operating a
proprietary, end-to-end digital media and advertising services
platform designed to connect brand advertisers with
demographically-targeted consumers -- both large audiences and more
granular segments -- across digital, social and connected
television publishing formats. The Company defines "end-to-end" as
its process for taking ad buying from beginning to end, delivering
a complete functional solution, usually without requiring any
involvement from a third party.
Bright Mountain reported a net loss of $8.13 million for the year
ended Dec. 31, 2022, compared to a net loss of $12 million for the
year ended Dec. 31, 2021. For the three months ended Dec. 31,
2022,
the Company reported a net loss of $2.32 million. As of Dec. 31,
2022, the Company had $29.20 million in total assets, $43.27
million in total liabilities, and a total stockholders' deficit of
$14.07 million.
East Brunswick, New Jersey-based WithumSmith+Brown, PC, the
Company's auditor since 2021, issued a "going concern"
qualification in its report dated March 28, 2023, citing that the
Company has suffered recurring losses from operations and has a net
capital deficiency that raise substantial doubt about its ability
to continue as a going concern.
BROOKDALE SENIOR: Reports September 2023 Occupancy
--------------------------------------------------
Brookdale Senior Living Inc. has announced its consolidated
occupancy for September 2023 and certain other information
regarding the quarter ended September 30, 2023.
In September 2023, the Company observed that:
* September 2023's weighted average occupancy increased 60
basis points sequentially, from 77.6% in August 2023 to 78.2% in
September 2023.
* Supported by a 130 basis point increase over 2022, September
represented 23 consecutive months of year-over-year weighted
average occupancy growth.
* Weighted average occupancy increased sequentially each month
within the quarter and the third quarter weighted average occupancy
of 77.6% represented 110 basis points of sequential growth compared
to the second quarter of 2023.
A full-text copy of Brookdale's Report is available at
https://tinyurl.com/48fujek6
About Brookdale Senior
Headquartered in Brentwood, Tennessee, Brookdale Senior Living Inc.
operates senior living facilities in the United States.
Egan-Jones Ratings Company on July 27, 2023, maintained its 'CC'
foreign currency and local currency senior unsecured ratings on
debt issued by Brookdale Senior Living Inc. EJR also withdraws
rating on commercial paper issued by the Company.
CAESARS ENTERTAINMENT: Egan-Jones Retains CCC Sr. Unsec. Ratings
----------------------------------------------------------------
Egan-Jones Ratings Company on October 12, 2023, maintained its
'CCC' foreign currency and local currency senior unsecured ratings
on debt issued by Caesars Entertainment, Inc.
Headquartered in Reno, Nevada, Caesars Entertainment, Inc. is a
gaming company operating casino resorts.
CERTIFIED 360: Hires Big Game Real Estate as Real Estate Broker
---------------------------------------------------------------
Certified 360, LLC seeks approval from the U.S. Bankruptcy Court
for the Middle District of Florida to employ Big Game Real Estate,
LLC as real estate broker.
The firm will market and sell the Debtor's real property located at
2025 and 2043 Art Museum Dr., Jacksonville, FL.
The firm will be paid a commission of 5 percent of the purchase
price, due upon the closing of a sale of the Property.
Chad Petree, a partner at Big Game Real Estate, LLC, disclosed in a
court filing that the firm is a "disinterested person" as the term
is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Chad Petree
Big Game Real Estate, LLC
630 Kingsley Ave
Orange Park, FL 32073
Telephone: (904) 521-7072
Email: chadpetree@gmail.com
About Certified 360, LLC
Certified 360, LLC is part of the construction industry. The Debtor
sought protection under Chapter 11 of the U.S. Bankruptcy Code
(Bankr. M.D. Fla. Case No. 23-01002) on May 4, 2023. In the
petition signed by Ashley Downing, managing member, the Debtor
disclosed $528,466 in assets and $1,598,966 in liabilities.
Judge Jacob A. Brown oversees the case.
Bryan K. Mickler, Esq., at Law Offices of Mickler & Mickler, LLP,
represents the Debtor as legal counsel.
CHESAPEAKE ENERGY: Egan-Jones Retains BB+ Senior Unsecured Ratings
------------------------------------------------------------------
Egan-Jones Ratings Company on September 29, 2023, maintained its
'BB+' foreign currency and local currency senior unsecured ratings
on debt issued by Chesapeake Energy Corporation. EJR also withdraws
rating on commercial paper issued by the Company.
Headquartered in Oklahoma City, Oklahoma, Chesapeake Energy
Corporation produces oil and natural gas.
CHICAGO EDUCATION BOARD: Fitch Affirms BB+ on $600MM ULTGO Bonds
----------------------------------------------------------------
Fitch Ratings has assigned a 'BB+' rating on the Chicago Board of
Education, Illinois (CBOE) $600,000,000 unlimited tax general
obligation bonds (ULTGOs) series 2023A.
The bonds are scheduled to price as early as October 23 via
negotiation. Proceeds will finance the cost of construction and
equipping of new school buildings and additions and renovations to
existing school buildings, among other uses.
In addition, Fitch Ratings has affirmed the following CBOE
ratings:
- Issuer Default Rating (IDR) at 'BB+';
- Outstanding unlimited tax general obligation bonds (ULTGOs) at
'BB+';
- Outstanding dedicated capital improvement tax (CIT) bonds at
'A'.
The Rating Outlook is Stable.
Entity/Debt Rating Prior
----------- ------ -----
Chicago Board of
Education (IL) LT IDR BB+ Affirmed BB+
Chicago Board
of Education
(IL) /General
Obligation –
Unlimited
Tax/1 LT LT BB+ Affirmed BB+
Chicago Board
of Education
(IL) /Limited
Ad Valorem Tax
Revenues/1 LT LT A Affirmed A
SECURITY
The ULTGO bonds of the CBOE are payable from dedicated CBOE
revenues in the first instance and also payable from unlimited ad
valorem taxes levied against all taxable property within the
district, which is coterminous with the city of Chicago.
The CIT bonds are secured by a first priority lien on CIT revenues,
which constitute a property tax levied by the CBOE on all taxable
property within the district. The CIT bonds are also backed by a
debt service reserve fund (DSRF) equal to 14% of maximum annual
debt service (MADS).
IDR ANALYTICAL CONCLUSION
The 'BB+' IDR and ULTGO rating reflect CBOE's adequate levels of
reserves and liquidity and inflationary revenue growth. Credit
risks center on CBOE's elevated long-term liability burden, driven
by a rising net pension liability (NPL), and limited budgetary
tools to address future cyclical downturns. An often-contentious
relationship with the Chicago Teacher's Union (CTU) places
additional strain on the district's expense management and
flexibility.
DEDICATED TAX ANALYTICAL CONCLUSION
The CIT rating of 'A' reflects the strength of the pre-determined
multi-year property tax levy equivalent to 1.10x annual debt
service on the bonds and CBOE's strong property tax collection
history. CIT structural elements and security interests are
sufficiently strong to warrant a maximum five-notch rating
distinction between the CIT rating and the district's IDR pursuant
to Fitch's "U.S. Public Finance Tax-Supported Rating Criteria."
Economic Summary
Chicago acts as the economic engine for the Midwestern region of
the U.S. and offers abundant and diverse employment opportunities.
The city also benefits from an extensive infrastructure network
which supports expectations for long-term economic growth and
resilience. All major sectors are represented in the employment
base including trade, professional and business services and
financial sectors, with no one sector dominating. Socioeconomic
indicators are mixed as is typical for an urbanized area, with
above-average per capita income and educational levels but also
elevated individual poverty rates.
IDR KEY RATING DRIVERS
Revenue Framework: 'bbb'
Fitch expects natural revenue growth, absent policy action, to keep
pace with historical inflation based on slow growth within property
tax levy limitations and relatively flat state aid. CBOE's revenue
outlook is sensitive to changes in the financial position of the
state of Illinois (IDR BBB+/Positive), which has materially
improved in recent years but has a long record of structural
imbalance. The district rating is not formulaically linked to the
state rating but reflects state credit trends via their impact on
school funding decisions.
Expenditure Framework: 'bbb'
Recurring demands from collectively bargained salary increases,
health care and amortization of the NPL necessitate ongoing
management of operations to closely align costs with available
resources. The large proportion of fixed and essential spending
commitments and the intense labor environment may constrain the
district's ability to achieve meaningful expenditure savings in
response to an unexpected decline in revenue.
Long-Term Liability Burden: 'a'
Long-term liabilities are elevated but moderate in relation the
district's expansive economic resource base. CBOE's very slowly
amortizing NPL and direct debt, together with planned capital
investments, could put upward pressure on the burden, absent
commensurate economic growth.
Operating Performance: 'bb'
The district's reserves and financial resilience have improved
considerably but remain sensitive to abrupt changes in its
operating environment and revenue outlook given minimal offsetting
budget balancing tools.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- For the IDR and ULTGO, the ability to achieve structural balance
after the depletion of stimulus funds combined with fund balance
growth;
- For the CIT bonds, an upgrade is not anticipated based on
expected coverage levels from the statutory property tax levy.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- For the IDR and ULTGO, a return to structural imbalance and
weakening of liquidity and reserves;
- For the IDR and ULTGO, a reversal of recent improvement in the
state funding commitment for operations and pensions, absent a
sufficient offsetting policy response from the district;
- For the CIT bonds, a downgrade of the district's IDR and/or
decline in property tax collection rates below historical levels.
CURRENT DEVELOPMENTS
CBOE Financial Results Remain Positive
The district is expected to report its sixth consecutive general
fund surplus in fiscal 2023 (June 30 year-end) totaling
approximately $200 million or 2.5% of an estimated $7.99 billion
total spending. The surplus will improve upon the $999 million or
13.5% of spending of unrestricted fund balance at fiscal year-end
2022.
Budget Challenges Center on Stimulus Depletion and Rising Pension
Payments
Fitch will continue to assess the district's financial performance
in relation to its ability to align spending with recurring revenue
as remaining stimulus funds are depleted over the next two years.
Fiscal 2023 results incorporate approximately $586 million in
federal stimulus spending. The fiscal 2024 budget appropriates an
additional $670 million in stimulus to support school-level
instructional and operational funding, in addition to various
academic recovery and school community investments.
The district is expected to phase-out its remaining pandemic
stimulus over fiscal 2025 ($300 million). The district will need to
solve for large projected budgetary gaps starting in fiscal 2026
due to the unwinding of federal stimulus in the face of a potential
economic downturn, political pressure and other factors could
complicate decisions to scale back from or eliminate stimulus
supported instructional and operational supports.
In addition, CBOE continues to contend with rising pension
contributions budgeted at approximately $1.02 billion (12.7% of
spending) inclusive of the $175 million payment to the Municipal
Employees' Annuity and Benefit Fund (MEABF) of the city of Chicago
for participating CBOE employees. MEABF pension payments are the
legal obligation of the city, but the CBOE has agreed to cover a
portion of the costs since fiscal 2020's inaugural payment of $60
million.
CBOE estimates the fiscal 2024 payment at approximately 66% of the
contribution requirement for district employees. The additional
funding required to reach the full contribution amount for CBOE
employees adds to other budgetary pressures, principally the
depletion of federal stimulus
The fiscal 2024 budget totals $8.5 billion, which is equivalent to
a year-over-year increase of $496 million or 6.2%. New spending is
largely driven by increases in personnel costs including $242
million in additional required contributions to the Chicago
Teachers Pension Fund and growth in CBOE's spending on repair,
custodial, and engineering costs. Revenue growth reflects the
aforementioned appropriation of federal stimulus, in addition to
the extension of ad valorem taxes governed by the Property Tax
Extension Limitation Law (PTELL) and state funding allocated to
CBOE through Evidence-Based Funding (EBF).
Ad valorem taxes and EBF collectively account for approximately 70%
of the total operating budget. The district budgeted fiscal 2024
personal property replacement tax (PPRT) revenues in line with
fiscal 2023 collections, which came in approximately $200 million
over budget. According to the district, expenditures are generally
tracking according to budget. The budget does not appropriate
existing reserves. Although the MEABF payment was not included in
the fiscal 2024 budget, the district plans to make the fiscal 2024
payment using TIF surplus monies from the city, so there will be
zero net impact upon CBOE's budget.
CIT Analysis
CIT revenues are subject to a multi-year levy established by
resolution at the time of bond issuance. No policy action is
required to adjust the tax levy to offset changes in assessed
value. CBOE is authorized to levy the CIT subject to a statutory
cap for each levy year established based on the amount of the CIT
for the preceding tax levy year increased by annual growth in the
CPI, which supports an 'a' growth prospect assessment.
Debt service was structured to provide a minimum of 1.1x coverage
of annual debt service, without assuming inflationary increases.
This leaves only the risk of diminishing collection rates, which
historically have been well within the norm for U.S.
municipalities.
To evaluate the sensitivity of the dedicated revenue stream to
cyclical decline, Fitch considers the revenue sensitivity results
via FAST (a 1.2% decline) and the largest actual property tax
collection delinquency rate (4.3%) during the period covered by the
revenue sensitivity analysis. Since the CIT revenue history is
insufficient to conduct this analysis, Fitch uses a proxy of CBOE's
overall property tax collection rates, which it believes
approximates future risk to CIT revenue sufficiency.
Given the minimum 1.1x coverage ratio, pledged revenues could
withstand a 9.1% decline before coverage of annual debt service is
less than 1.0x. The 9.1% revenue cushion is equivalent to 7.5x the
FAST result, or 2.1x the largest actual delinquency rate. Fitch
believes the revenue cushion inherent in the dedicated tax
structure and history of collection rates support a resilience
assessment of 'a'.
Fitch's sensitivity analysis also factors in additional liquidity
within the CIT structure via the DSRF, which has been funded from
prior bond proceeds equal to 14% of the MADS requirement. The DSRF
provides additional protection against risk to delinquency rates
outside of historical norms, as does an allowance for uncollectible
amounts at 3.5% added to the gross levy.
CIT Exposure to CBOE Risk
Fitch has identified a number of structural elements considered
sufficient to reduce the incentive to challenge the special revenue
status given the definitions outlined in the bankruptcy code, which
allows for the CIT bonds to be rated up to a maximum of five
notches above the district's IDR according to the criteria. These
elements include a limitation under state law with respect to the
permitted uses of CIT revenues to fund construction, acquisition
and equipping of school and administrative buildings, and site
improvements and the identification of specific capital projects in
the bond resolution that may be funded either by bond proceeds or
by residual CIT revenues. Any amendments to the list of permitted
uses must be for projects approved by the board as part of its
capital plan.
Furthermore, the revenues legally cannot be used for general
operations of the board and bondholders do not have a claim on the
general revenues of the district and CBOE has directed the county
collectors of Cook and DuPage Counties to transmit the CIT revenues
directly to an escrow agent. The escrow agent transfers revenues
needed for payment of debt service to the bond trustee daily.
Revenues in excess of those required to meet annual debt service
may be available to reimburse the district for authorized capital
expenditures. The board covenants not to revoke the direction to
the county collectors as long as the bonds are outstanding. Based
upon review of bond counsel opinions Fitch believes that any future
attempt to revoke the direction to the county collectors would be
contrary to state statute.
ECONOMIC RESOURCE BASE
The CBOE provides pre-K through 12 education through the operation
of 522 individual campuses and 798 school facilities. The district
ranks amongst the largest school districts in the U.S. with a
fiscal 2023 enrollment of 323,251 compared to 322,106 in fiscal
2022. Fiscal 2023 enrollment marks the first year in over a decade
that enrollment has not decreased year over year. The district
serves a high proportion of English learners, students of color and
low-income students. Enrollment trends stabilized in 2023, after
over a decade of declines.
Future enrollment is expected to reflect demographic trends across
the city and student migration to private schools and other public
districts. CBOE's taxing jurisdiction is coterminous with the city
of Chicago.
IDR CREDIT PROFILE
Revenue Framework
Property taxes account for $3.8 billion or 45% of the $8.5 billion
fiscal 2023 general fund budget. Property taxes, which are the
largest single component of the general fund budget, are subject to
the PTELL which limits the rate of annual levy growth to the lesser
of 5% or the change in the Consumer Price Index (CPI), excluding
new construction and development. State and federal aid are
budgeted at $2.5 billion and $1.7 billion, respectively. Federal
aid remains well above historical levels due to the appropriation
of $670 million of ESSER III funds to support various academic and
school community recovery efforts.
Fitch anticipates revenue growth will approximate the level of
inflation, considering PTELL limitations and expectations for
modest state aid increases over time. The $130.7 million yoy
increase in the property tax levy reflects an inflation factor
equal to the 5% maximum. State evidence-based funding (EBF) is down
$11.4 million compared to the fiscal 2023 budget.
The stability of the district's revenue base improved considerably
following the implementation of the EBF model in 2017. The EBF
establishes a minimum state funding level based on the prior year's
EBF allocation, which effectively eliminates risk to state aid loss
from enrollment declines that have long plagued the district. CBOE
is also positioned to receive a large share of any new state
funding investment in the EBF based on established adequacy
targets.
Independent legal ability to raise revenues is limited, as it is
for many school districts in the U.S. As noted earlier, annual
growth in the property tax levy for operations is limited by PTELL.
The property tax levy dedicated to pension contributions ($557
million or nearly 15% of the total fiscal 2024 levy) is not
constrained by PTELL.
Expenditure Framework
Employee salaries and benefits are budgeted at $5.6 billion or
approximately 66% of the fiscal 2024 general fund budget. Contract
payments, including transportation and charter school tuition,
accounts for approximately 20% of the budget. Contingencies remain
well above historical levels primarily due to the large amount of
federal aid that had not been allocated to specific purposes at the
time of budget adoption.
Spending pressures center on the burden associated with the
district's high NPL and outstanding direct debt, rising healthcare
costs, negotiated wage increases and a multi-year commitment to
increase staffing levels in compliance with the 2020-2024 CTU
collective bargaining agreement. Budgeted salaries and benefits are
up $470.8 million or 9.1% above the fiscal 2023 budget, exceeding
the rate of growth in local and state operating revenue.
Actuarial contributions to the CTPF are budgeted at $860.3 million
and the district plans to pay an additional $175 million to the
Municipal Employees' Annuity and Benefit Fund (MEABF) of the city
of Chicago for participating CBOE employees, which is not included
in the fiscal 2024 budget. The total budgeted pension contribution
of $1.02 billion (12.7% of spending) has risen substantially from
less than $200 million a decade earlier.
Pension costs are high but much more tenable following the 2017
reinstitution of a dedicated property tax levy for pensions ($557.1
million in fiscal 2024) and the transfer of funding responsibility
for the normal cost for pensions to the state ($308.1 million).
These two measures will fully cover the district's payments to the
CTPF in fiscal 2024 but they may not cover the full incremental
pension cost forecast over the long-term. Revenue generated from
the pension property tax levy is sensitive to changes in equalized
assessed value, and the normal cost covered by the state is
expected to gradually decline as lower tiered employees account for
a larger share of the workforce.
Expenditure flexibility largely resides in the district's ability
to control headcount. However, the district remains committed to
increasing staffing levels across critical support roles including
nurses, social workers and case managers. Staff reductions, if
necessary due to an unforeseen budgetary challenge, would likely be
met with considerable pushback from the CTU and other CPS
constituents. Fitch views the district's labor relations as a
constraint on overall budget flexibility based on the history of
organized work stoppages. As CBOE has received increased state
funding, the district has added back some previously cut services,
providing an incremental margin of spending flexibility.
Fixed carrying costs for debt service, actuarially-determined
contributions (ADC) for pension and other post-employment benefits
(OPEBs) measured 25% of governmental spending in fiscal 2022.
Fiscal 2022 actual pension contributions based on the statutory
formula were equal to roughly 50% of the ADC, which is likely to
weigh against funding progress and drive the ADC higher over time,
even if plan assumptions are met.
Long-Term Liability Burden
Fitch estimates CBOE's long-term liability burden at an elevated
but still moderate 20% of personal income. The Fitch-adjusted NPL
is the largest single component at more than 9% of personal income
with a slightly lower amount attributed to debt of overlapping
governments (primarily the city of Chicago). While the state
commits to payments equal to the normal cost of pensions, it does
not assume any of the liability, so the entirety of the liability
resides with the district.
Pension benefits for teachers are provided through the CTPF, a
cost-sharing multi-employer defined benefit plan in which the
district is the major contributor. Unlike schools in the rest of
the state, the state does not assume the liability associated with
Chicago teacher pensions.
Under GASB 67 reporting, the CTPF reported a low 47.6% asset to
liability ratio as of June 30, 2021 based on a blended discount
rate of 6.37% (reflecting the actuary's forecast of eventual asset
depletion in 2078). Fitch estimates a modestly lower ratio
incorporating its standard 6.0% return assumption. The NPL
continues to rise notwithstanding improved pension funding
practices instituted in fiscal 2014 to comply with a state law
requiring payments sufficient to reach a 90% actuarial funding
level by 2059.
As noted, pension benefits for other personnel are provided through
the MEABF, a cost-sharing multi-employer defined benefit plan whose
major contributor is the city of Chicago. CBOE has no liability for
the plan and did not contribute to the plan until fiscal 2020.
Contribution amounts are set forth within an intergovernmental
agreement (IGA) with Chicago, subject to annual renewal.
The IGA was revised to increase CPS's payment to $175 million in
fiscal 2023 and 2024, up from $100 million in fiscal 2022 and a
$110 million increase from the originally agreed upon payment. CBOE
estimates the fiscal 2023 payment at approximately 66% of the
contribution requirement for district employees. The additional
funding required to reach the full contribution amount for CBOE
employees adds to other budgetary pressures, principally the
depletion of federal stimulus.
Direct debt, which is estimated at 5% of personal income, amortizes
at a very slow pace (34% of debt is scheduled for retirement in 10
years). Capital investments projected from fiscal 2023-2026
approximate $550 million per annum, which is consistent with recent
years' capital spending. CPS has an expansive inventory of school
facilities with an average age of over 80 years. CPS reports its
total facility needs at over $3 billion, which is equivalent to
roughly 2% of personal income, a manageable level within the
context of the current economic resource base and long-term
liability burden.
Operating Performance
The strength and consistency of CBOE's reserves is a key credit
factor given the limited nature of its revenue and expenditure
tools. As noted earlier, the district's unrestricted general fund
balance has improved considerably since fiscal 2018 coinciding with
the implementation of the new funding framework and significantly
more support for its pension payments. The Fitch Analytical Stress
Test (FAST) model relates historical revenue volatility to GDP to
support the assessment of operating performance under Fitch's
criteria. FAST yields a moderate initial year revenue decline of
2.5% under the standard -1% U.S. GDP scenario.
Most of the district's historical revenue volatility was
attributable to state funding cuts that pre-date the EBF. The state
has added new tier funding to the EBF in each year since its
inception with the exception of fiscal 2021, which was held flat.
The durability of the new education funding framework has not been
subject to a rigorous test to date, as the combination of federal
stimulus and stronger than expected state revenue performance have
helped improve the state's fiscal outlook post-pandemic. While
Fitch believes the state is committed to increasing school funding,
the district will remain vulnerable to state policy decisions in
periods of fiscal stress.
The EBF funding framework established a path to structural balance
for CPS and the elimination of unsustainable budget practices
including appropriated reserves, scoop and toss restructurings,
optimistic budgeting of revenues and lengthening the accrual period
for property tax collections. The fiscal 2024 budget is does not
appropriate any portion of the district's existing fund balance,
and projects that fiscal 2024 TANs will be paid down by the end of
the year-end.
The district's TAN's borrowing history reflected its weak balance
sheet position and the timing mismatch between large cash outflows
for debt service and pensions and the receipt of property tax
revenues. CPS continues to demonstrate consistent access to
external sources of liquidity, even during recent periods of
economic uncertainty.
DEDICATED TAX KEY RATING DRIVERS
Statutory Levy Stability: The multi-year CIT levy is established by
state law to produce a minimum 1.10x annual debt service coverage
ratio. Historical property tax collection rates exhibit very low
volatility, supporting an 'a' level of financial resilience when
considered within the context of the 1.10x coverage cushion and
additional liquidity via the cash-funded DSRF.
Inflationary Growth Permissible: CBOE is authorized to levy the CIT
subject to a statutory cap for each levy year established based on
the amount of the CIT for the preceding tax levy year increased by
annual growth in the CPI, which supports an 'a' growth prospect
assessment.
DEDICATED TAX CREDIT PROFILE
The CIT revenues are subject to a multi-year levy established by
resolution at the time of bond issuance. No policy action is
required to adjust the tax rate to offset changes in assessed
value. CBOE is authorized to levy the CIT subject to a statutory
cap for each levy year established based on the amount of the CIT
for the preceding tax levy year increased by annual growth in the
CPI, which supports an 'a' growth prospect assessment.
Debt service was structured to provide a minimum of 1.1x coverage
of annual debt service, without assuming inflationary increases.
This leaves only the risk of diminishing collection rates, which
historically have been well within the norm for U.S. municipalities
and stable since the onset of the pandemic.
To evaluate the sensitivity of the dedicated revenue stream to
cyclical decline, Fitch considers the revenue sensitivity results
via FAST (a 1.2% decline) and the largest actual delinquency rate
(4.3%) during the period covered by the revenue sensitivity
analysis. Since the CIT revenue history is insufficient to conduct
this analysis, Fitch uses a proxy of CBOE's overall property tax
collection rates, which it believes approximates future risk to CIT
revenue sufficiency.
Given the minimum 1.1x coverage ratio, pledged revenues could
withstand a 9.1% decline before coverage of annual debt service is
less than 1.0x. The 9.1% revenue cushion is equivalent to 7.5x the
FAST result, or 2.1x the largest actual delinquency rate. Fitch
believes the revenue cushion inherent in the dedicated tax
structure and history of collection rates support a resilience
assessment of 'a'.
Fitch's sensitivity analysis also factors in additional liquidity
within the CIT structure via the DSRF, which has been funded from
prior bond proceeds equal to 14% of the MADS requirement. The DSRF
provides additional protection against risk to delinquency rates
outside of historical norms, as does an allowance for uncollectible
amounts at 3.5% added to the gross levy.
ESG CONSIDERATIONS
Chicago Board of Education (IL) has an ESG Relevance Score of '4'
for Labor Relations & Practices, which reflect a history of labor
related spending pressures and, in Fitch's opinion, a contentious
relationship with its teaching professionals, which staged an
11-day strike in 2019.
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.
CITY OF LVIV: Fitch Affirms 'CC/CCC-' LongTerm IDRs
---------------------------------------------------
Fitch Ratings has affirmed the Ukrainian City of Lviv's Long-Term
Foreign-Currency Issuer Default Ratings (IDR) at 'CC' and Long-Term
Local-Currency IDR at 'CCC-'. Ratings at this level typically do
not carry Outlooks due to their high volatility.
The affirmation reflects Fitch's view that the risk of a
deterioration in liquidity and in Lviv's ability to service its new
debt and to support its indebted municipal companies remains
elevated.
Lviv's National Ratings have been revised down due to the
recalibration of Fitch's Ukrainian National Ratings Equivalency
Table. Lviv's National Ratings are driven by its 'CCC-' Long-Term
Local-Currency IDR, which maps to 'A+(ukr)' in the Ukrainian
National Rating Correspondence Table based on national peer
comparison.
KEY RATING DRIVERS
Risk Profile: 'Vulnerable'
This assessment reflects Fitch's view of very high risk relative to
international peers that the issuer may see its ability to cover
debt service by the operating balance weaken unexpectedly over the
forecast horizon, either because of lower-than-expected revenue or
expenditure overshooting expectations, or because of an
unanticipated rise in liabilities or debt-service requirements.
Revenue Robustness: 'Weaker'
The Ukraine government and its institutions (central government,
tax collection, banking system) are still largely intact. However,
the damage to critical municipal and social infrastructure -
housing, schools and kindergartens, hospitals, roads, municipal
building and work establishments - and the displacement of a large
number of citizens to other places in Ukraine or abroad, restrict
local governments' (LG) revenue robustness and adjustability.
Revenue Adjustability: 'Weaker'
Nationally-collected income taxes, LGs' main revenue source,
increased by 29% on average (Fitch-rated cities) in 2022, while
transfers from the state budget (another major revenue source)
decreased by 14% on average. The scope of changes in the revenue
composition and 2022/2021 change, was dependent on the impact of
the war on the individual city.
Expenditure Sustainability: 'Weaker'
Fitch assumes spending pressure will increase strongly, with rising
inflation, broken supply chains driving prices for goods and
services high and large reconstruction efforts. Additionally,
municipal companies performing municipal services (transportation,
heating, solid waste, water and sewage) are largely not
self-supporting, and will increasingly rely on subsidies, capital
injections and direct debt repayments made by Lviv, which will only
add to its own difficulties.
Expenditure Adjustability: 'Weaker'
Fitch assesses the city's ability to curb spending in response to
shrinking revenue as weak due to the high rigidity of operating
expenditure and overall low per capita spending compared with
international peers. Operating expenditure is dominated by staff
costs, current transfers made and spending on goods and services.
Liabilities & Liquidity Robustness: 'Weaker'
In its view, Lviv is facing increasing material risk for its
current and its future debt due to greater uncertainty about market
access, cost of debt and FX exchange rates. This is despite the
supportive policy of the National Bank of Ukraine and positive
attitude towards LGs of existing domestic and international
lenders. Ukrainian cities' and their companies' funding comes from
capital markets, local commercial banks and institutional lenders,
is of short to medium term and often in FX (US dollars or euros).
Fitch focuses on Fitch-adjusted debt, as it reclassifies contingent
debt of not self-supporting companies.
Liabilities & Liquidity Flexibility: 'Weaker'
Fitch assumes that cities may start to take on new debt to finance
crucial investments into infrastructure and public transport, which
could not be performed due to the war. New indebtedness has already
started to be incurred in 2023, as there is a large necessity to
resume investments. Funding could be provided by domestic banks and
IFIs, which have already declared readiness to support the
reconstruction of Ukrainian cities.
Debt Sustainability: 'b category'
Fitch has maintained Lviv's debt sustainability assessment at 'b'
to reflect that the city's overall performance has been negatively
affected by the war-related large negative shock to the national
economy and the damage to critical infrastructure. The risk of a
deterioration in liquidity and in Lviv's ability to service its
current or new debt and to support its indebted municipal companies
is elevated. In addition, there is uncertainty about the pace of a
future economic recovery, capital market access and the cost of
debt after the war ends.
Lviv's financial situation did not deteriorate in 2022. The
operating balance was positive and Fitch assumes the same for 2023.
The city's direct debt decreased in 2022 in line with repayments.
In 2023, Lviv incurred EUR25 million new debt at European Bank for
Reconstruction and Development (EBRD). The municipal companies'
debt increased in 2022 and in 1H23.
ESG - Political Stability and Rights: The invasion by Russia and
ongoing war has severely compromised the city's political stability
and security outlook. The war has resulted in the death of
inhabitants of the city and extensive damage to property, with the
aim of changing the city's government and occupying its territory.
ESG - Creditor Rights: The protracted war has weakened the city's
ability and willingness to service and repay debt. The city's
liquidity is deteriorating and the Ukrainian sovereign's
willingness to allow the use of foreign-currency reserves for debt
service in foreign currency is diminishing, while the costs of
preserving urban and communal functions for the city are rising.
DERIVATION SUMMARY
Lviv remains institutionally strongly linked to the credit quality
of the Ukrainian sovereign (CC/CCC-), which is severely affected by
the Russian-Ukrainian war. Fitch based its rating derivation for
Lviv on the agency's rating definition and the 'ccc' Standalone
Credit Profile reflects Fitch's view that a default on current and
new debt that might be taken in the short term is a real
possibility. Consequently, Lviv could have significant refinancing
needs and high liquidity risk accompanied by weak debt coverage
metrics. The 'CC'/'CCC-' IDRs are capped by the sovereign rating.
KEY ASSUMPTIONS
Risk Profile: 'Vulnerable'
Revenue Robustness: 'Weaker'
Revenue Adjustability: 'Weaker'
Expenditure Sustainability: 'Weaker'
Expenditure Adjustability: 'Weaker'
Liabilities and Liquidity Robustness: 'Weaker'
Liabilities and Liquidity Flexibility: 'Weaker'
Debt sustainability: 'b'
Support (Budget Loans): 'N/A'
Support (Ad Hoc): 'N/A'
Asymmetric Risk: 'N/A'
Rating Cap (LT IDR): 'CC'
Rating Cap (LT LC IDR) 'CCC-'
Rating Floor: 'N/A'
Quantitative assumptions - Issuer Specific
Fitch's rating case scenario is irrelevant for ratings that are
based on rating definitions, instead it is an assumption of the
issuer's capability (liquidity) and willingness to service it. The
assumption applies to all rated Ukrainian cities, irrespective of
whether direct debt exist currently as Fitch assumes that a need
for debt may arise in the short term or debt servicing resulting
from the guarantees issued as collateral for the debt of municipal
companies may materialise in the short term.
Liquidity and Debt Structure
Based on the information provided by Lviv, the city is current on
all financial commitments. Liquidity improved significantly in 2022
and in 1H23. The city's direct debt increased in 1H23. Lviv's
overall debt - i.e. direct debt including municipal companies' debt
and the interest-free treasury loans contracted prior to 2014 and
to be written off by the state - had increased in 1H23 to
UAH7,466.3 million (at end-2022: UAH7,160.6 million; in 2021:
UAH6,969.8 million).
Issuer Profile
Lviv is the capital of the Lviv Region and had a population of
about 700,000 in 2021 (last available public data). The city's
economy is diversified across manufacturing and services.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
Downgrade of Ukraine sovereign ratings or weakened liquidity that
could pressurise the ability to service debt.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
An upgrade of Ukraine's IDRs would lead to an upgrade of the city's
IDRs, provided the city's debt sustainability remains in the 'b'
category.
ESG CONSIDERATIONS
Lviv of has an ESG Relevance Score of '5' for Political Stability
and Rights to reflect the invasion by Russia and ongoing full-scale
war, which has severely compromised the city's political stability
and the security outlook. This has a negative impact on the credit
profile and is highly relevant to the ratings. The war is resulting
in the death of city inhabitants and extensive property damage,
with the aim of changing the city's government and/or occupying its
territory.
Lviv of has an ESG Relevance Score of '5' for Creditor Rights to
reflect the weakened ability and willingness of the city to service
and repay debt. This has a negative impact on the credit profile
and is highly relevant to the ratings. The protracted war is
resulting in depletion of liquidity and diminishing Ukrainian
sovereign's willingness to allow the use of foreign currency
reserves for debt service in foreign currency, while costs of
preserving the urban and communal functions for the city are
rising.
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.
DISCUSSION NOTE
Committee date: 17 October 2023
There was an appropriate quorum at the committee and the members
confirmed that they were free from recusal. It was agreed that the
data was sufficiently robust relative to its materiality. During
the committee no material issues were raised that were not in the
original committee package. The main rating factors under the
relevant criteria were discussed by the committee members. The
rating decision as discussed in this rating action commentary
reflects the committee discussion.
PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS
Lviv's ratings are linked to the sovereign ratings.
Entity/Debt Rating Prior
----------- ------ -----
City of Lviv LT IDR CC Affirmed CC
LC LT IDR CCC- Affirmed CCC-
Natl LT A+(ukr) Revision Rating AA-(ukr)
CLEAN ENERGY: Taps Roth Capital for $25M Common Stock Offering
--------------------------------------------------------------
Clean Energy Technologies, Inc. disclosed in a Form 8-K Report
filed with the Securities and Exchange Commission that the Company
has entered into a Sales Agreement with Roth Capital Partners, LLC,
as a sales agent.
The Sales Agreement is pursuant to which the Company may offer and
sell from time to time up to $25,000,000 of shares of the Company's
common stock, par value $0.001 per share, through Roth. The offer
and sale of the Shares will be made pursuant to a prospectus
supplement to the Company's base shelf prospectus to be filed under
the Securities Act of 1933, as amended.
The Sales of the Shares, if any, pursuant to the Sales Agreement,
may be made in sales deemed to be an "at the market offering" as
defined in Rule 415(a)(4) promulgated under the Securities Act,
including sales made directly on or through the Nasdaq Capital
Market or on any other existing trading market for the Company's
Shares. The Shares may only be offered and sold by means of a
prospectus, including a prospectus supplement, forming part of the
effective registration statement.
The Company has no obligation to sell any of the Shares under the
Sales Agreement. It may at any time suspend or terminate the
offering of its common stock pursuant to the Sales Agreement upon
notice and subject to other conditions. Roth will act as sales
agent and will use commercially reasonable efforts to sell on the
Company's behalf all of the Shares requested to be sold by the
Company, consistent with Roth's normal trading and sales practices,
on mutually agreed terms between Roth and the Company.
Under the terms of the Sales Agreement, the Company will pay Roth a
commission of up to an aggregate 3.0% of the gross proceeds of the
Shares sold through them under the Sales Agreement. The Sales
Agreement contains customary representations, warranties, and
agreements by the Company, customary indemnification obligations of
the Company and Roth against certain liabilities, including for
liabilities under the Securities Act, and termination provisions.
A full-text copy of Clean Energy's Report is available at:
https://tinyurl.com/mtnyfv64
About Clean Energy
Headquartered in Costa Mesa, California, Clean Energy Technologies,
Inc. -- http://www.cetyinc.com-- designs, produces and markets
clean energy products and integrated solutions focused on energy
efficiency and renewables. The Company provides waste heat
recovery solutions, waste to energy solutions, and engineering,
consulting and project management solutions.
Spokane, Washington-based Fruci & Associates II, PLLC, the
Company's auditor since 2015, issued a "going concern"
qualification in its report dated April 17, 2023, citing that the
Company has an accumulated deficit, a working capital deficit and
negative cash flows from operations. These factors, among others,
raise substantial doubt about the Company's ability to continue as
a going concern.
CMS ENERGY: Egan-Jones Retains BB+ Senior Unsecured Ratings
-----------------------------------------------------------
Egan-Jones Ratings Company on September 28, 2023, maintained its
'BB+' foreign currency and local currency senior unsecured ratings
on debt issued by CMS Energy Corporation. EJR also withdraws rating
on commercial paper issued by the Company.
Headquartered in Jackson, Michigan, CMS Energy Corporation is an
energy company.
CNA EQUITY: Gina Klump Named Subchapter V Trustee
-------------------------------------------------
The U.S. Trustee for Region 17 appointed Gina Klump, Esq., at the
Law Office of Gina R. Klump, as Subchapter V trustee for CNA Equity
Group, Inc.
Ms. Klump will be paid an hourly fee of $485 for her services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Ms. Klump declared that she is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Gina Klump, Esq.
Law Office of Gina R. Klump
11 5th Street, Suite 102
Petaluma, CA 94952
Phone: (707) 778-0111
Email: gklump@klumplaw.net
About CNA Equity
CNA Equity Group, Inc., doing business as Platinum One Realty and
Mortgage, is a full-service mortgage company servicing Northern and
Southern California.
The Debtor filed Chapter 11 petition (Bankr. N.D. Calif. Case No.
23-41294) on Oct. 6, 2023, with $1,661,089 in assets and $2,102,967
in liabilities. Michael Mulry, president, signed the petition.
Chris Kuhner, Esq., at Kornfield, Nyberg, Bendes, Kuhner & Little,
P.C. represents the Debtor as legal counsel.
CONTINENTAL AMERICAN: Hires Morris Laing Evans as Special Counsel
-----------------------------------------------------------------
Continental American Corporation and its affiliates seek approval
from the U.S. Bankruptcy Court for the District of Kansas to employ
Morris, Laing, Evans, Brock & Kennedy, Chartered as special
counsel.
The firm will provide legal services in connection with litigation,
general contract matters, and corporate legal matters.
The firm will be paid at these rates:
Robert W. Coykendall $420 per hour
Karl R. Swartz $340 per hour
Paralegals $150 per hour
The firm will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Robert W. Coykendal, Esq., a partner at Morris, Laing, Evans, Brock
& Kennedy, Chartered, disclosed in a court filing that the firm is
a "disinterested person" as the term is defined in Section 101(14)
of the Bankruptcy Code.
The firm can be reached at:
Robert W. Coykendal, Esq.
MORRIS, LAING, EVANS, BROCK &
KENNEDY, CHARTERED
300 N. Mead Suite 200
Wichita, KS 67202-2745
Tel: (316) 262-2671
About Continental American Corporation
Continental American Corporation operates a balloon manufacturing
business in Wichita, Kan.
Continental American and its affiliate, Pioneer National Latex,
Inc., filed Chapter 11 petitions (Bankr. D. Kan. Lead Case No.
23-10938) on Sept. 22, 2023. Judge Mitchell L. Herren oversees the
cases.
At the time of the filing, Continental American reported $50
million to $100 million in assets and $10 million to $50 million in
liabilities while Pioneer National Latex reported $1 million to $10
million in assets and $10 million to $50 million in liabilities.
David Prelle Eron, Esq., at Prelle Eron & Bailey, P.A. represents
the Debtors as legal counsel.
CROSBY US: Moody's Affirms 'B3' CFR & Alters Outlook to Positive
----------------------------------------------------------------
Moody's Investors Service affirmed the B3 corporate family rating
and B3-PD probability of default rating of Crosby US Acquisition
Corp. Concurrently, Moody's downgraded the ratings on Crosby's
existing backed senior secured first lien credit facilities,
inclusive of the company's proposed $205 million first lien term
loan add-on, to B3 from B2. The outlook was changed to positive
from stable. Moody's took no action on the Caa2 rating on the
company's backed senior secured second lien term loan.
Proceeds from the incremental first lien term loan will be used to
repay the $200 million senior secured second lien term loan. Upon
repayment, the senior secured second lien term loan rating of Caa2
will be withdrawn. The downgrade of the first lien term loan
rating, reflects the elimination of the loss absorption within the
capital structure that had been provided by the second lien term
loan. The first lien term loan now represents the preponderance of
the obligations in the capital structure.
The change in outlook to positive reflects the progress made
to-date in integrating the Kito Corporation, which was acquired in
January 2023. Moody's also expects EBITDA margin to improve to
about 20% and free cash flow in excess of $40 million over the next
12 to 18 months. This will allow the company to reduce
debt-to-EBITDA to below 5.0x over this period.
RATINGS RATIONALE
The rating reflects Crosby's leading position as a manufacturer of
specialized and mission critical engineered products used for
rigging and lifting applications. The company benefits from a long
history, with brands that are well-recognized and that represent a
small portion of the overall equipment cost to its customers, while
remaining essential components to customer operations. Moody's view
of Crosby's credit profile also reflects the high financial
leverage for the company's business risk that includes exposure to
highly cyclical and capital intensive end markets and a competitive
operating landscape. With the acquisition of Kito Corporation,
Crosby doubled its revenue, while greatly diversifying its
geographic concentration. Moody's believes the larger scale will
mitigate the impact of regional economic slowdowns as well as
reduce its exposure to cyclical end-markets such as oil and gas and
mining. The transaction was funded with a significant cash
component provided through an equity contribution from Crosby's
private equity owner. As such, Moody's expects debt-to-EBITDA
(Moody's standard adjustments) to end 2023 at about 4.7x.
Crosby is expected to maintain good liquidity. As of June 30, 2023,
the company had full availability under its $120 million revolver
and cash of $164 million (pro forma for the second lien paydown).
Moody's estimates Crosby will have free cash flow of over $25
million in 2023 and have a cash balance of approximately $160
million at year-end 2023.
The positive outlook reflects expectations of at least low-single
digit revenue growth and margin expansion over the next year,
supported by positive end market demand fundamentals that should
continue into 2024. Moody's further expects the integration of Kito
Corporation will continue without any significant disruption to
operations.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded should market conditions improve
along with the broader macroeconomic environment. Over time, the
ratings could be upgraded with sustained improvement in operating
performance such that Moody's expects debt-to-EBITDA to be
sustained below 5.0x and EBITA-to-interest above 1.5x. Further,
Moody's would expect maintenance of good liquidity, including free
cash flow to debt in the high single-digit range, for a rating
upgrade.
The ratings could be downgraded with deteriorating liquidity,
including weaker than expected free cash flow or a reliance on
revolver borrowings. The ratings could also be downgraded with
business conditions worsening that lead to deterioration in credit
metrics. A more aggressive financial policy, including debt funded
shareholder distributions or acquisitions that increase leverage,
could also result in a downgrade.
The principal methodology used in these ratings was Manufacturing
published in September 2021.
Crosby US Acquisition Corp, based in Richardson, Texas, a
subsidiary of Crosby Worldwide Ltd, is a manufacturer of highly
engineered lifting and rigging equipment, as well as customized
material handling solutions. Proforma revenue was about $1.1
billion for the LTM period ended June 30, 2023. Crosby is owned by
affiliates of Kohlberg Kravis Roberts & Co. L.P. (KKR).
CROWN HOLDINGS: Egan-Jones Retains BB Senior Unsecured Ratings
--------------------------------------------------------------
Egan-Jones Ratings Company on September 28, 2023, maintained its
'BB' foreign currency and local currency senior unsecured ratings
on debt issued by Crown Holdings, Inc. EJR also withdraws rating on
commercial paper issued by the Company.
Headquartered in Philadelphia, Pennsylvania, Crown Holdings, Inc.
designs, manufactures, and sells packaging products for consumer
goods through plants located in countries around the world.
CSE GROUP: A.M. Best Cuts Fin. Strength Rating to B(Fair)
---------------------------------------------------------
AM Best has downgraded the Financial Strength Rating to B (Fair)
from B+ (Good) and the Long-Term Issuer Credit Ratings to "bb"
(Fair) from "bbb-" (Good) of Civil Service Employees Insurance
Company and CSE Safeguard Insurance Company, which together
comprise CSE Insurance Group (CSE Group) (Walnut Creek, CA). The
outlook of these Credit Ratings (ratings) is negative.
Concurrently, AM Best has withdrawn the ratings as CSE Group has
requested to no longer participate in AM Best's interactive rating
process.
The ratings reflect CSE Group's balance sheet strength, which AM
Best assesses as adequate, as well as its marginal operating
performance, very limited business profile and marginal enterprise
risk management (ERM).
The rating downgrades reflect changes to CSE Group's business
profile and balance sheet strength assessment following the
notification that it has been effectively placed into run-off.
Following CSE Group's decision to exit the market and no longer
write new business as of October 9, 2023, as well as non-renew
existing business over the next 12 months, the group's business
profile is assessed as very limited based on material changes in
business strategy, product offerings and earnings capacity.
Although the group currently maintains the strongest level of
risk-adjusted capitalization, as measured by Best's Capital
Adequacy Ratio (BCAR), policyholders' surplus has continued to
decline, down 25% through the first six months of 2023, due to
significant underwriting losses. In addition, the balance sheet
strength assessment also reflects inconsistent loss reserve
development, negative operating cash flow and declining admitted
assets to fund operational needs.
The negative outlooks reflect AM Best's concerns that CSE Group's
overall balance sheet strength could materially deteriorate driven
by further surplus, liquidity and reserve adequacy declines, given
the material changes in its business profile.
CSG SYSTEMS: Egan-Jones Retains BB+ Senior Unsecured Ratings
------------------------------------------------------------
Egan-Jones Ratings Company on October 13, 2023, maintained its
'BB+' foreign currency and local currency senior unsecured ratings
on debt issued by CSG Systems International, Inc.
Headquartered in Englewood, Colorado, CSG Systems International,
Inc. provides customer care and billing solutions for cable
television providers, direct broadcast satellite providers, on-line
services markets, and telephony providers.
CYXTERA TECHNOLOGIES: Seeks to Extend Plan Exclusivity to Jan. 30
-----------------------------------------------------------------
Cyxtera Technologies, Inc. and its affiliates ask the U.S.
Bankruptcy Court for the District of New Jersey to extend their
exclusive periods to file a chapter 11 plan and solicit
acceptances thereof to January 30, 2024 and April 1, 2024,
respectively.
Unless extended, the exclusive filing period and exclusive
solicitation period expires on October 2, 2023 and December 1,
2023, respectively.
The chapter 11 cases involve 16 Debtor entities which operate a
global data center platform that provides speed, scale, and
agility for its customers' business demands by offering a
complete suite of space, power, interconnection, bare metal, and
remote management solutions. The Debtors maintain one of the
industry's largest global data center platforms, with operations
in 23 large metropolitan areas in North America, Europe, and
Asia, comprising 33 distinct markets.
The Debtors claim that during their chapter 11 cases, they have
been engaged in a comprehensive review of their lease portfolio,
including an analysis of each of their data center locations and
the associated revenues and expenses. The Debtors assert that
the scale of their operational restructuring is undoubtedly
complex and weighs in favor of extending the exclusivity periods.
The Debtors also claim that they have made significant progress
in negotiating with their stakeholders and administering their
chapter 11 cases. The Debtors stated that they have already
satisfied several key milestones in their chapter 11 cases,
including filing the plan, the disclosure statement, gaining
approval for their DIP financing facility, and bidding
procedures, actively engaging in a comprehensive marketing
process, which produced multiple bids.
The Debtors further stated that they have engaged in good faith
negotiations and shared information with the official committee
of unsecured creditors since its formation.
The Debtors stated that they have already taken significant steps
toward resolving their chapter 11 cases, including by filing a
chapter 11 plan to restructure their balance sheet through either
a sale transaction or a standalone recapitalization transaction,
depending on whichever path will ultimately maximize value for
the Debtors' estates.
Cyxtera Technologies, Inc. and its affiliates are represented by:
Edward O. Sassower, Esq.
Christopher Marcus, Esq.
Derek I. Hunter, Esq.
KIRKLAND & ELLIS LLP
KIRKLAND & ELLIS INTERNATIONAL LLP
601 Lexington Avenue
New York, NY 10022
Tel: (212) 446-4800
Email: edward.sassower@kirkland.com
christopher.marcus@kirkland.com
derek.hunter@kirkland.com
- and -
Michael D. Sirota, Esq.
Warren A. Usatine, Esq.
Felice R. Yudkin, Esq.
COLE SCHOTZ P.C.
Court Plaza North, 25 Main Street
Hackensack, NJ 07601
Tel: (201) 489-3000
Email: msirota@coleschotz.com
wusatine@coleschotz.com
fyudkin@coleschotz.com
About Cyxtera Technologies
Headquartered in Coral Gables, Fla., Cyxtera Technologies, Inc.
-- https://www.cyxtera.com/ -- is a global data center company
providing retail colocation and interconnection services. The
Company provides a suite of connected and automated
infrastructure and interconnection solutions to more than 2,300
enterprises, service providers and government agencies around the
world -- enabling them to scale faster, meet rising consumer
expectations and gain a competitive edge.
Cyxtera and its affiliates sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. D.N.J. Lead Case No. 23-14853)
on June 4, 2023. In the petition signed by Eric Koza, chief
restructuring officer, the Debtor disclosed up to $131 million in
assets and up to $2.679 billion in liabilities.
Judge John K. Sherwood oversees the case.
The Debtors tapped Kirkland and Ellis LLP and Kirkland and Ellis
International LLP as general bankruptcy counsel, Cole Schotz P.C.
as co-bankruptcy counsel, Guggenheim Securities, LLC as
investment banker, AlixPartners LLP as restructuring advisor, and
Kurtzman Carson Consultants LLC as noticing and claims agent.
An ad hoc group of first lien lenders is represented by Gibson,
Dunn & Crutcher LLP as legal counsel and Houlihan Lokey, Inc. as
financial advisor.
On June 20, 2023, the U.S. Trustee for Region 3 appointed an
official committee to represent unsecured creditors. The
committee tapped Pachulski Stang Ziehl & Jones, LLP as its legal
counsel and Alvarez & Marsal North America, LLC, as financial
advisor.
DAVITA INC: Egan-Jones Retains BB Senior Unsecured Ratings
----------------------------------------------------------
Egan-Jones Ratings Company on October 13, 2023, maintained its 'BB'
foreign currency and local currency senior unsecured ratings on
debt issued by DaVita Inc. EJR also withdraws rating on commercial
paper issued by the Company.
Headquartered in Denver, Colorado, DaVita Inc. provides a variety
of health care services.
DIAMOND CREEK: UST Appoints Janina Hoskins as Chapter 11 Trustee
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of California
approved the appointment of Janina Hoskins as Chapter 11 trustee
for Diamond Creek Villa, LLC.
Ms. Hoskins was appointed on Oct. 12 by the U.S. Trustee for Region
17, the Justice Department's bankruptcy watchdog overseeing Diamond
Creek's Chapter 11 case.
Ms. Hoskins disclosed in a court filing that she is a
"disinterested person" pursuant to Section 101(14) of the
Bankruptcy Code.
About Diamond Creek Villa
Diamond Creek Villa, LLC, a company in Cupertino, Calif., filed
Chapter 11 petition (Bankr. N.D. Calif. Case No. 22-51125) on Dec.
14, 2022, with $10 million to $50 million in both assets and
liabilities. Mark Allen, manager, signed the petition.
Judge M. Elaine Hammond oversees the case.
The Debtor is represented by Macdonald Fernandez, LLP.
DIOCESE OF OGDENSBURG: Court OKs Cash Access on Final Basis
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of New York
authorized the Roman Catholic Diocese of Ogdensburg, New York to
use cash collateral on a final basis.
As previously reported by the Troubled Company Reporter, the Debtor
requires the use of cash collateral to pay employee wages and other
operating and administrative expenses incurred in the Chapter 11
Case, as well as other payments as may be authorized by the Court
by separate order.
NBT Bank, National Association, asserts an interest in the cash
collateral.
As of the Petition Date, the Diocese is indebted to NBT pursuant to
these transactions and documents:
(i) Letter of Credit Application and Agreement, together dated
as of November 9, 2020, pursuant to which NBT made available to the
Diocese a $1.95 million Letter of Credit issued by NBT to the New
York State Worker's Compensation Board to secure the Diocese's
obligations under its self-insured worker's compensation program;
and
(ii) Specific Security Agreement (Pledged Account) dated as of
November 9, 2020, pursuant to which the Diocese pledged all of its
property in the possession of, or subject to the control of NBT
including, without limitation, its interest in approximately $2.3
million of securities held in a blocked investment account at NBT,
to secure its obligations to repay NBT for any amounts drawn on the
NBT Letter of Credit.
The court said as adequate protection, NBT will receive perfected
replacement security interests in, and valid, binding, enforceable
and perfected liens, on all of the Diocese's cash, deposit
accounts, and investment property and related proceeds. However,
the Postpetition Collateral will not include, and the NBT Rollover
Liens will not attach to, any funds or property held by the Diocese
(i) for the purpose of administering its insurance programs, (ii)
in trust for the benefit of parishes or other Catholic entities
within the Diocese, (iii) which represent trust fund taxes or
employee payroll deductions, or (iv) which are endowed funds or
subject to donor restrictions on use.
A copy of the court's order is available at
https://urlcurt.com/u?l=Kfezym from PacerMonitor.com.
About The Roman Catholic Diocese of Ogdensburg
The Roman Catholic Diocese of Ogdensburg is a religious
organization in Ogdensburg, New York.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D.N.Y. Case No. 23-60507) on July 17,
2023. In the petition signed by Mark Mashaw, diocesan fiscal
officer, the Debtor disclosed up to $50 million in both assets and
liabilities.
Judge Patrick G. Radel oversees the case.
Charles J. Sullivan, Esq., at Bond, Schoeneck and King, PLLC,
represents the Debtor as legal counsel. Stretto, Inc. is the
Debtor's noticing and claims agent.
DOMAN BUILDING: Fitch Hikes LongTerm IDR to 'B+', Outlook Stable
----------------------------------------------------------------
Fitch Ratings has upgraded the ratings of Doman Building Materials
Group Ltd. (DBM or Doman), including the company's Long-Term Issuer
Default Rating (IDR), to 'B+' from 'B'. Fitch has also upgraded the
unsecured notes rating to 'BB-'/'RR3' from 'B'/'RR4'. The Rating
Outlook is Stable.
The upgraded IDR reflects Fitch's expectation that Doman's EBITDA
leverage will be sustained below 4.0x, EBITDA margins will remain
stable and the company will generate FCF margin in the low-single
digits even amidst a weaker demand environment. The company has
maintained modest leverage levels and fairly stable margins despite
a meaningful decline in revenues due to a weak construction and
volatile lumber price environment. The IDR also considers Doman's
relatively commoditized product offering and thin, although stable,
EBITDA margins inherent to the two-step building products
distribution sector.
The cyclicality of the residential housing market and the company's
susceptibility to swings in lumber prices are also factored into
the rating. DBM's scale and position as one of the top North
American pressure treated lumber manufacturers and distributors
along with its sufficient liquidity position are reflected in the
'B+' IDR.
KEY RATING DRIVERS
Moderate Leverage: Fitch expects EBITDA leverage to be around or
slightly above 3.0x at YE 2023 and settle between 2.5x-3.0x in
2024. Fitch had previously expected margins to compress
meaningfully and for leverage to increase in 2023 and remain at
elevated levels through 2024. DBM repaid CAD60 million of its notes
due in October 2023 and its non-revolving term loan during 2Q23
with FCF and borrowings under its revolver. The company has reduced
debt by almost CAD250 million since the Hixson acquisition in 2021.
Fitch's rating case forecast assumes that EBITDA margins remain
relatively stable, and further deleveraging will be driven by debt
reduction in the coming years.
Low but Stable EBITDA Margins: DBM's profitability metrics are weak
relative to similar- and higher-rated peers, but are commensurate
with its 'B'-category IDR. The company has reported relatively
stable EBITDA margins during the last year despite meaningful
declines in lumber prices as well as lower volumes.
Fitch-adjusted EBITDA margin (including capitalized lease costs as
operating expenses) was 5.8% during 2022 and is expected to be
between 5.5%-6.5% during the rating horizon, below the 7%-8% levels
in 2020 and 2021 when the company reported higher volumes and
elevated lumber prices.
Stable FCF Margins: Fitch expects the company will generate FCF
margins (after dividends) of 1.5%-2.5% during the next few years,
compared to more volatile FCF generation before the Hixson
acquisition when the company was smaller and applied most of its
FCF towards dividends. Capital intensity is low at about 0.5% of
revenues. Fitch's rating case forecast assumes annual dividends of
about CAD50 million.
Capital Allocation: DBM has demonstrated a disciplined capital
allocation strategy, reducing debt meaningfully and lowering
leverage since the completion of the Hixson acquisition in 2021.
Absent acquisition opportunities, Fitch expects DBM to apply modest
amounts of FCF towards debt reduction during the rating horizon,
which is consistent with management's strategy of maintaining a
flexible balance sheet and relatively conservative credit metrics.
The company has also demonstrated willingness in the past to
protect credit metrics via equity issuances and dividend reductions
opportunistically and during periods of uncertainty.
Susceptibility to Lumber Volatility: Doman's revenues are highly
concentrated towards the sale of lumber. The company estimates
about 58% of 2Q23 sales are from pressure treated lumber. The
remaining 42% of sales are from the company's building products
distribution sales, which also includes some sale of lumber. The
company's high lumber exposure weighs negatively on the rating due
to the commoditized nature of the product offering and volatility
of pricing, particularly in recent years. Fitch's rating case
forecast assumes that lumber prices settle between USD475 to USD500
per thousand board feet during the next few years.
Competitive Position: DBM's competitive position is weaker than
more highly rated building products manufacturers in Fitch's
coverage due to its position as a two-step distributor in the
building products supply chain, its relatively low brand equity and
mostly commoditized product offerings. However, company's scale and
position as the number two pressure treated wood manufacturer in
North America position it well within the two-step distribution
subsector. Fitch believes this scale and manufacturing capacity
provide modest competitive advantages relative to distributors with
only local presences and niche product offerings
Cyclical End-Market Exposure: Fitch expects housing and repair and
remodel demand to remain weak during the balance of 2023 and into
2024. The majority of DBM's sales are directed to the Canadian and
United States residential real estate markets. Management estimates
that about half of the company's distribution sales are exposed to
residential new housing and the other half exposed to repair and
remodel demand, which is less cyclical. The company's wood pressure
sales have modest exposure to agricultural and industrial
end-markets. DBM's pressure treated wood sales are highly exposed
to decking and fencing demand, which Fitch believes experienced a
pull forward in demand during the pandemic.
DERIVATION SUMMARY
DBM credit metrics are modestly stronger than its closest
Fitch-rated peers, LBM Acquisition, LLC (B/Stable) and Park River
Holdings, Inc. (B-/Stable). Fitch view's LBM's business profile as
stronger than Doman's due to LBM's significantly lower exposure to
the volatile lumber market, its greater scale and higher EBITDA and
FCF margins. LBM's highly aggressive capital allocation strategy
weighs negatively on its credit profile when compared to DBM. Park
River has a stronger margin profile and less commoditized product
offering than DBM, but maintains much higher leverage levels.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer
- Revenues decline 15% in 2023 and increase low-single digits % in
2024;
- EBITDA margin of 5.5%-6.5% in 2023 and 2024;
- FCF margin of 1.5%-2.5% in 2023 and 2024;
- EBITDA leverage of 2.5x-3.5x in 2023 and 2024, absent any
meaningful acquisitions.
RECOVERY ANALYSIS ASSUMPTIONS
- The recovery analysis assumes that DBM would be considered a
going-concern rather than liquidated in a recovery scenario;
- Fitch has assumed a 10% administrative claim;
- Fitch has assumed an EV multiple of 5.5x;
- Going concern EBITDA of CAD105 million.
Going Concern EBITDA Approach
Fitch's GC EBITDA estimate of CAD105 million projects a
post-restructuring sustainable cash flow, which assumes both
depletion of the current position to reflect the distress that
provoked a default, and a level of corrective action that Fitch
assumes would occur during restructuring. This is about 35% below
Fitch calculated LTM EBITDA and 33% below forecasted FY23 levels.
Fitch assumes that a default would occur from a meaningful and
continued decline in the residential housing market combined with
lumber prices sustained at below average levels. Fitch estimates
revenues of about CAD2 billion (about 24% below 6/30/23 LTM levels
and 22% below forecasted 2023 levels) and EBITDA margins of about
5.3% would result in the CAD105 million GC EBITDA, which would
capture the lower revenue base of the company after emerging from
the downturn in a lower lumber price environment than 2020-2022,
plus a sustainable margin profile after right sizing.
Fitch applied a 5.5x enterprise value (EV) multiple to calculate
the GC EV in a recovery scenario. The company purchased Hixson
Lumber Sales in June 2021 for 5.0x Fitch-calculated FY20 EBITDA and
10.9x FY19 EBITDA. The 5.5x GC EBITDA multiple is below the 6.0x
multiple applied in the recovery analysis of LBM Acquisition, LLC
and Park River Holdings, mainly due to Doman's relatively smaller
scale, less diversified business and slightly lower margins when
compared to LBM.
The ABL revolver has priority claim over the unsecured notes. Fitch
assumed that the ABL revolving credit facility is fully drawn at a
borrowing base less than the maximum borrowing availability of
CAD500 million. Fitch assumes the ABL revolver has CAD350 million
outstanding (70% of maximum borrowing) at the time of recovery,
which accounts for potential shrinkage in the available borrowing
base during a period of deflating lumber prices and contracting
volumes that causes a default. Remaining claims are recovered by
the unsecured debt holders, resulting in a recovery corresponding
to an 'RR3' for DBM's 2026 unsecured notes.
Fitch's previous recovery analysis assigned an 'RR4' rating to the
company's unsecured notes. DBM repaid its non-revolving term loan
as well as its CAD60 million unsecured notes due 2023 during 2Q23,
resulting in improved recovery prospects for the remaining
unsecured notes.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- The company significantly lowers its proportion of sales from
lumber or reduces exposure to the cyclical new home construction
market in order to reduce earnings and credit metric volatility
through lumber and housing cycles;
- Fitch's expectation that EBITDA leverage will be sustained below
3.0x;
- EBITDA margin sustained in the high-single digits;
- FCF margin consistently in the mid-single digits.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Fitch's expectation that EBITDA leverage will be sustained above
4.0x;
- EBITDA interest coverage consistently below 3.5x;
- Fitch's expectation that FCF generation (after dividends)
sustained at neutral or negative levels.
LIQUIDITY AND DEBT STRUCTURE
Adequate Liquidity: DBM has adequate liquidity with about CAD178
million of borrowing availability under its CAD500 million ABL
revolver (CAD260.3 million outstanding) as of June 30, 2023 and
CAD3.0 million of cash. Fitch believes current liquidity is
adequate to fund fixed charges and seasonal working capital
investments.
Debt Maturities: DBM has reduced debt by utilizing FCF and
borrowings under the revolving loan facility to redeem its CAD60
million unsecured notes due 2023 and repay the CAD14.1 million
balance on non-revolving term loan during 2Q23. DBM's next debt
maturities are in 2024 when its revolver comes due and 2026 when
CAD325 million unsecured notes mature. Fitch expects the company
will renew its revolver ahead of its scheduled maturity.
ISSUER PROFILE
Doman Building Materials Group Ltd. (DBM or Doman) Is a
manufacturer and distributor of lumber products and building
materials in the U.S. and Canada. With distribution facilities,
wood treatment plants, specialty sawmills, planning mills, and post
peeling facilities across North America, as well as timber
ownership and management of private timberlands, Doman is a diverse
building materials and forest products company.
SUMMARY OF FINANCIAL ADJUSTMENTS
Fitch deducts lease amortization and lease interest expense from
EBITDA. Fitch's calculation of total debt includes the 2026
unsecured bonds, ABL borrowings outstanding, and bank overdrafts.
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
----------- ------ -------- -----
Doman Building Materials
Group Ltd. LT IDR B+ Upgrade B
senior
unsecured LT BB- Upgrade RR3 B
DOMINO'S PIZZA: Egan-Jones Retains BB- Senior Unsecured Ratings
---------------------------------------------------------------
Egan-Jones Ratings Company on September 29, 2023, maintained its
'BB-' foreign currency and local currency senior unsecured ratings
on debt issued by Domino's Pizza, Inc. EJR also withdraws rating on
commercial paper issued by the Company.
Headquartered in Ann Arbor, Michigan, Domino's Pizza, Inc. operates
a network of company-owned and franchise Domino's Pizza stores,
located throughout the United States and in other countries.
DRAIN SERVICES: May Use $60,000 of Cash Collateral
--------------------------------------------------
The U.S. Bankruptcy Court for the District of North Dakota
authorized Drain Services Inc. to use not more than $60,000 in cash
collateral on an interim basis in the accordance with the budget
from October 17 to 31, 2023.
As adequate protection for Debtor's use of cash collateral, the
Court finds that equity in the Debtor's property serves as adequate
protection for the limited use of cash collateral. Additionally,
the Debtor agreed to grant Choice Financial Group, the Small
Business Administration and the Internal Revenue Service
replacement liens on cash generated by Debtor during the course of
its Chapter 11 case up to the full sum of the cash collateral
Debtor uses. The liens and security interests granted will be
effective and perfected without further act by any party.
In addition to, and not in lieu of, the said adequate protection,
the Debtor agreed to pay to Choice Financial Group (i) the sum of
$25,000, by the close of business on Friday, October 20, 2023; and
(ii) the sum of $10,000 on or before the 15th day of each
successive calendar month until a plan of reorganization is
confirmed; these payments will not count against the cash
collateral limit.
A final hearing on the matter is set for October 31, 2023 at 1 pm.
A copy of the order is available at https://urlcurt.com/u?l=WkOxqx
from PacerMonitor.com.
About Drain Services
Drain Services Inc. offers residential, commercial, industrial, and
municipal pipe laying and lining to Minnesota, North Dakota, and
South Dakota customers. The company is based in West Fargo, N.D.
Drain Services filed Chapter 11 petition (Bankr. D.N.D. Case No.
23-30352) on Oct. 2, 2023, with up to $10 million in assets and up
to $1 million in liabilities. Kevin Cameron, vice president, signed
the petition.
Judge Shon Hastings oversees the case.
Maurice B. VerStandig, Esq., at The Dakota Bankruptcy Firm serves
as the Debtor's counsel.
EMPIRE TODAY: Moody's Cuts CFR to 'Caa1', Outlook Remains Negative
------------------------------------------------------------------
Moody's Investors Service downgraded Empire Today, LLC's corporate
family rating to Caa1 from B3, its probability of default rating to
Caa1-PD from B3-PD and its senior secured revolving credit facility
and senior secured term loan ratings to Caa1 from B3. The outlook
remains negative.
The downgrade of the CFR to Caa1 reflects Empire's weaker than
expected operating performance and very high leverage with Moody's
adjusted debt/EBITDA above 8x for the LTM period ended June 30,
2023. Empire is also contending with higher interest rates and
EBITA/interest is anticipated to weaken from 1.0x to approximately
0.8x by year-end 2023.
Empire almost tripled its funded debt in 2021 following the
debt-financed dividend under its former ownership and additional
debt raised to facilitate the company's sale to Charlesbank Capital
Partners. At the time, Empire was benefitting from strong demand in
the home category. However, over the course of 2022 and 2023, the
uncertain economic environment and higher inflation has negatively
impacted financial performance. While pricing actions have offset
higher inventory costs and lower volumes to some extent, operating
costs have risen which has been a drag on EBITDA margins. The
increase in operating costs is due in part to higher advertising
spend which helps combat declining sales leads.
However, there is risk that this increased spend does not lead to
expected volume growth given weak consumer spending trends
(particularly for the discretionary type of product Empire sells)
which could cause further margin compression.
The negative outlook reflects that credit metrics will likely
remain weak over the next 12-18 months as the company navigates a
challenging discretionary spending and competitive environment.
RATINGS RATIONALE
Empire's Caa1 CFR credit profile reflects its very high leverage,
weak interest coverage and its small scale in a highly competitive
business environment with large and well capitalized competitors.
It also reflects the discretionary nature of the company's
products, as well as its high susceptibility to macroeconomic
factors. Governance is a key rating factor particularly Empire's
financial strategies under private equity ownership which has
resulted in a high debt load. The company's direct to consumer
asset light business model makes its cost structure quite flexible
but an increase in advertising costs to combat slowing demand could
continue to negatively impact margins. Because of the company's
small scale, even small declines in EBITDA can impact credit
metrics significantly. The credit profile also reflects the
company's adequate liquidity supported by positive free cash flow
in 2023 and 2024, an undrawn $60 million senior secured revolving
credit facility and lack of near-term maturities. Ratings are also
supported by the market position Empire has established in the
highly fragmented floor covering market, and in the direct to
consumer segment of that market in particular.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Ratings could be upgraded if there is a sustained improvement in
operating performance and Empire maintains good liquidity.
Specifically, an upgrade would require debt/EBITDA to be sustained
below 6.5 times and EBITA/interest expense sustained above 1.25
times.
The ratings could be downgraded if liquidity deteriorates for any
reason. The ratings could also be downgraded should probability of
default increase for any reason including the inability to reduce
leverage to a more sustainable level.
Headquartered in Northlake, IL, Empire Today, LLC is a specialty
retailer of carpet, hard floor, and window treatments. The company
offers shop-at-home sales in the largest metropolitan markets in
the U.S. Revenue is about $860 million for the LTM ended June 30,
2023.
The principal methodology used in these ratings was Retail
published in November 2021.
EMPLOYBRIDGE HOLDING: Fitch Lowers LongTerm IDR to 'B', Outlook Neg
-------------------------------------------------------------------
Fitch Ratings has downgraded the Long-Term Issuer Default Rating
(IDR) of EmployBridge Holding Company (EmployBridge) to 'B' from
'B+'. Fitch also downgraded the company's senior secured term loan
to 'B+'/'RR3' from 'BB-'/'RR3'. The Rating Outlook is Negative.
Fitch assigned an IDR of 'B' with a Negative Rating Outlook to QEB
Intermediate Inc., which is the financial filer.
The downgrade reflects a reset of Fitch's medium-term growth
expectations given the sharp decline in staffing services demand
particularly for manufacturing and logistics. The company's EBITDA
generation will be lower than previously anticipated resulting in
higher leverage than the 4x-5x range that was expected for
EmployBridge's 'B+' IDR.
The Negative Outlook reflects uncertainty surrounding the company's
ability to navigate the industry downturn while capitalizing on its
cost reduction opportunities in a manner that allows for meaningful
deleveraging. The higher interest rate environment, combined with
weak staffing demand, has limited the company's financial
flexibility as FCF will be lower, and is an additional source of
deleveraging uncertainty.
KEY RATING DRIVERS
High Leverage: The company's leverage should remain elevated
relative to the 'B' IDR, at least over the next 12-18 months. Fitch
calculates gross debt/EBITDA will be around 8x at YE 2023. This is
a sharp increase from leverage of 5.1x in 2022. Fitch expects
leverage to trend lower to 6.5x in 2024 and below 6.0x in 2025 as
the company consolidates its digital strategy, executes expense
reduction initiatives and demand recovers to some degree.
Industry Cyclicality: The highly cyclical nature of the staffing
industry is a key credit consideration. The industry is
experiencing a sharp reduction in staffing demand for manufacturing
and logistics. The downturn follows a period of abnormally high
demand that accelerated hiring in those sectors during 2021 and a
part of 2022. Peers in the staffing space have experienced similar
year-to-date revenue declines in the high teens. Their stronger
financial position gives them a better ability to weather the
downturn.
Low EBITDA Margins, Neutral FCF: Fitch views the company's low
margins as a constraining factor for the rating in the 'B'
category. Fitch calculates EBITDA in the 3% to 5% range in recent
years, and it is unlikely that this margin profile will change
materially in the next several years. EBITDA margins are below
those of certain peer Fitch reviews in the business services area.
FCF is expected to be relatively neutral over the next couple of
years. Positive FCF generation was a credit positive consideration
as it allowed for funding the company's inorganic growth strategy
to a degree.
End Market Concentration, Customer Diversification: Fitch considers
EmployBridge's product concentration a limiting factor for the IDR
in the 'B' category. The company generates nearly all of its
revenue from U.S. staffing solutions for the light industrial
market (e.g., warehouses, distribution centers, e-commerce
fulfilment centers). The focus on these areas leaves it exposed to
higher risk versus other more-diversified services companies.
Customer concentration positively factors in the rating, as there
is material diversification with no customer representing more than
3% of revenue.
Fragmented Industry: EmployBridge has meaningful scale among
staffing companies, with approximately $3.5 billion in revenue,
roughly 17,000 customers and around 450,000 people placed annually.
However, the U.S. staffing industry is highly fragmented and
competitive, which Fitch believes is reflected in the company's
low- to mid-single digit percentage EBITDA margins. EmployBridge
only competes in the industrial component of the market and is
among the largest competitors, but still has less than 15% market
share.
DERIVATION SUMMARY
Fitch's ratings and Outlook for EmployBridge are supported by the
company's sizable presence in the U.S. industrial staffing market
and its asset-light business model that enables strong FCF
flow-through from EBITDA. Fitch compares the company with a variety
of high-yield business services issuers. Relative to other business
services companies Fitch reviews, EmployBridge relies more heavily
on transactional revenues and does not have a meaningful mix of
contractual sales.
Similar to other staffing companies, EmployBridge operates a
low-margin business with higher risk that coincides with beginning
periods of macro weakness. Gross leverage is projected to be in the
7x-8x range in the near term, which is high, reflecting the current
industry downturn. Fitch expects a degree of deleveraging to 6x or
below in the intermediate term. Staffing peers are significantly
stronger financially with much lower leverage, which positions them
well in light of the industry's cyclicality. Low margins and small
scale constrain EmployBridge's IDR to the 'B' rating category.
KEY ASSUMPTIONS
- Revenue recovers in the mid to low-single digits in 2024-2025
from an expected decline of more than 15% in 2023;
- EBITDA margins trend back to historical levels of 4.5%-5.0% in
2024-2025;
- Capex to revenue of around 1% per year;
- Gross leverage of around 6.5x in 2024 and at 6x in 2025;
- Benchmark interest rates average around 5% in 2024 and around 4%
in 2025;
- No acquisitions modelled.
RECOVERY ANALYSIS
For entities rated 'B+' and below, where default is closer and
recovery prospects are more meaningful to investors, Fitch
undertakes a tailored, or bespoke, analysis of recovery upon
default for each issuance. The resulting debt instrument rating
includes a Recovery Rating or published 'RR' (graded from 'RR1' to
'RR6'), and is notched from the Issuer Default Rating accordingly.
In this analysis, there are three steps: (i) estimating the
distressed enterprise value (EV); (ii) estimating creditor claims;
and (iii) distribution of value.
Fitch assumes EmployBridge would emerge from a default scenario
under the going concern approach versus liquidation. Key
assumptions used in the recovery analysis are as follows:
- Fitch assumes EmployBridge's GC EBITDA to be around $160 million.
This estimate reflects Fitch's view of a sustainable,
post-reorganization EBITDA level upon which Fitch bases the
enterprise valuation. The GC EBITDA assumes a degree of recovery in
operating performance relative to 2023, which is seen as a trough
year;
- An EBITDA multiple of 6.0x is used to calculate a
post-reorganization valuation, which is validated by comparable
trading multiples in the staffing industry (current and
historical), past M&A transactions in the space and reorganization
multiples Fitch has seen historically;
- Fitch assumed a 10% administrative claim;
- Fitch assumes a partially drawn ABL revolver and ABL letters of
credit in its recovery analysis for a total of $350 million. This
is a conservative estimate of a partial draw equivalent to roughly
70% of receivables, which have typically ranged between $450
million and $550 million. Fitch does not rate these facilities, but
they are senior to the term loan and therefore required in the
recovery analysis.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Fitch-calculated gross leverage, or total debt with EBITDA
Leverage, sustained below 4.5x;
- (CFO-capex)/total debt sustained above 7.5%;
- Fitch could also reassess the rating with a material increase in
EBITDA scale.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- A prolonged period of weak staffing demand;
- Fitch-calculated gross leverage, or total debt with equity
credit/EBITDA, expected to be sustained above 5.5x;
- EBITDA/interest coverage sustaining below 2x;
- (CFO-capex)/total debt with equity credit sustained below 2.5%;
- Sustained EBITDA margin at around 3% or below could also lead to
a negative rating action
LIQUIDITY AND DEBT STRUCTURE
Adequate Liquidity: The company faces only minimal debt
amortizations of $9 million until 2027 and 2028 when the ABL
facility and term loan mature and its largely variable cost
structure should provide some buffer in the current downturn. Fitch
projects Employbridge's FCF to be relatively neutral over the next
two years as EBITDA recovery will likely be offset by working
capital while interest rates remain high. The company had $161
million of unused borrowing capacity available under its ABL
facility and cash of $35 million as of the second quarter of 2023.
Debt Structure: EmployBridge has a relatively simple debt capital
structure, with a $911 million term loan and $20 million drawn on a
$360 million ABL revolving facility. The ABL facility expires in
2027 and the term loan matures in 2028. All of the company's debt
is floating rate.
ISSUER PROFILE
EmployBridge is one of the largest flexible workforce providers in
the U.S., with a focus on light industrial supply chain jobs
including skilled manufacturing, forklift operators, pickers and
material handlers, assemblers, technicians and other manufacturing
and logistics type roles.
Entity/Debt Rating Recovery Prior
----------- ------ -------- -----
EmployBridge Holding Co LT IDR B Downgrade B+
senior secured LT B+ Downgrade RR3 BB-
QEB Intermediate, Inc. LT IDR B New Rating
EP GLOBAL: Moody's Affirms 'B2' CFR & Alters Outlook to Negative
----------------------------------------------------------------
Moody's Investors Service affirmed EP Global Production Solutions,
LLC's ("Entertainment Partners") corporate family rating at B2 and
probability of default rating at B2-PD. Moody's also affirmed its
subsidiary EP Purchaser, LLC's senior secured first lien term loan
and revolving credit facility ratings at B1. The outlook for both
issuers has been changed to negative from stable.
The outlook change to negative takes into account the potential
negative effects to credit metrics and the liquidity profile as a
result of the ongoing SAG-AFTRA strike and the writers guild
strike. Moody's expects financial leverage will increase this year
to well over 10x because of the increase in debt from the
incremental term loan draw in June and loss in revenue and profits
from the strike. Moody's anticipates that the company will continue
to deplete liquidity until there is a resolution on the SAG-AFTRA
strike and production volumes can ramp back up. While Moody's
expects that Entertainment Partners will be able to resume business
shortly after an agreement is reached, timing of a settlement
remains uncertain and it could take months to reach full pre-strike
production levels, and longer for a full recovery in credit metrics
and liquidity strength to levels consistent with the B2 CFR.
The company is heavily exposed to collective bargaining agreements
between various guilds and unions and work stoppages such as the
current one can have a significant detrimental effect on the
company's ability to generate earnings. This exposure is a factor
in the ratings action.
RATINGS RATIONALE
The affirmation of the CFR at B2 reflects Entertainment Partners'
high financial leverage at 6.9x debt/EBITDA, Moody's adjusted as of
end of June 2023 that Moody's anticipates will decline to below 6x
once revenue and business activity resume. Revenue for 2023 will be
affected by the loss in gross wages as a result of the
since-settled writers guild strike that started in May and the
ongoing SAG-AFTRA strike that started in July. Moody's expects that
it will be four to six weeks after any agreement is reached with
SAG-AFTRA to allow for a gradual ramp up in production as schedules
are determined. Although some gross wages have recovered since the
writers guild strike came to a resolution, full production cannot
start until the actors resume work. In addition, the timing of a
resolution remains uncertain. Once an agreement is reached,
production can resume; however, there will be a ramp period when
schedules will be set. As a result, full pre-strike level
production volumes will not be reached for several weeks and
earnings, credit metrics and liquidity may not reach pre-strike
levels for some time.
The B2 CFR also reflects the narrow scope of the company's
services, which is concentrated solely in the content production
industry within the entertainment sector. There is some customer
concentration and revenue is highly concentrated within a few large
media and entertainment companies with approximately 50% of
billings coming from four customers. However, given the numerous
production companies within each large studio that ultimately
engages the services of the company, there is some diversification
from that structure. Earnings in its largest segment, Payroll
Services, are dependent on the number of people that are employed
by the company's clients as well as the overall volume of gross
wages. The large proportion of employees whose payroll the company
processes that belong to a union or guild exposes the company to
work stoppages and is a human capital risk. This risk of stalled
work related to contract renegotiations will be a recurring issue
given the nature of the media industry. Thus, Moody's considers the
social risk for the company to be very high.
The rating is supported by Entertainment Partners' position in the
market and strong track record and relationships with the largest
content producers in the entertainment sector. The company provides
services to the largest studios and over-the-top producers of
on-demand content. Entertainment Partners is one of the two largest
payroll and ancillary service providers in the industry. The
company's strong position in the sector is supported by the
complexity of labor arrangements that characterizes the media
production industry, reporting and compliance requirements across
jurisdictions and the management of scheduling and accounting needs
of different studios. Entertainment Partners' proprietary software
platforms are integrated at the studio level and are thus
entrenched into the processes of the projects, which makes
switching onerous for customers.
Entertainment Partners' first lien bank credit facilities
(consisting of a $110 million revolver expiring in 2026 and $1,000
million term loan due 2028) are rated B1, one notch higher than the
B2 CFR, reflecting a two class debt structure with the first lien
facilities receiving first-loss support from unrated $200 million
senior secured second lien term loan due 2029. The rated debts are
secured by first priority (subject to certain exceptions) liens and
security interests in substantially all assets of the borrower and
guarantors. The guarantors include all current and future direct
and indirect domestic restricted subsidiaries of the borrower and
the immediate parent of the borrower.
Moody's views Entertainment Partners' liquidity to be adequate.
Moody's expects the company to be able to meet cash needs over the
next 12-15 months using cash on hand and assuming cash flow returns
to pre-strike levels quickly once the strikes are resolved.
Entertainment Partners had $286 million of cash on hand as of the
end of June 2023. Moody's expects this cash balance to decline
significantly by the end of 2023 as cash will be used to fund
operations while gross wages are depressed as a result of the
strikes. Entertainment Partners has been able to generate cash in a
normalized environment with free cash flow to debt in the low to
mid-single digit area. Working capital is expected to be a use of
cash this year as accrued payroll liabilities decline and this will
be reversed once activity ramps up and gross wages increase.
Liquidity is also supported by a $110 million revolving credit
facility that was undrawn as of the end of June 2023. If production
is unable to restart by the end of this year, Moody's expects that
the company will have to draw on the revolver to fund operations
and liquidity will weaken meaningfully, which would pressure the
ratings.
The negative outlook reflects Moody's concerns that earnings and
liquidity will continue to be pressured even after the ongoing
SAG-AFTRA strike is resolved.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Given the negative outlook, an upgrade in the near term is not
considered likely. Over the longer term, the ratings could be
upgraded if (i) the company exhibits sustained revenue growth that
leads to increased scale, closer to higher-rated peers, and
maintaining strong profitability, (ii) the company maintains
conservative financial policies such that Moody's-adjusted
debt-to-EBITDA is sustained around 5.0x and (iii) free cash flow
generation, as measured on a percentage of debt basis, is sustained
above 10.0%.
A ratings downgrade could result if: (i) revenue or EBITDA
contracts materially from current level due to loss of customers or
market share, (ii) Moody's expects free cash flow to debt to be
sustained below 3%, (iii) debt-to-EBITDA is sustained above 7.0x or
(iv) liquidity declines significantly. Undertaking a more
aggressive financial policy, through debt-funded acquisitions or
other steps, could also pressure the ratings.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
Headquartered in Burbank, California and controlled by affiliates
of financial sponsor TPG Capital Partners since 2019, Entertainment
Partners provides production and workforce management solutions to
producers of content in the entertainment industry. Entertainment
Partners generated revenue of around $450 million in 2022.
ESCHER GROUP: Seeks Cash Collateral Access
------------------------------------------
Escher Group, LLC and its affiliates ask the U.S. Bankruptcy Court
for the District of Maryland, Baltimore Division, for authority to
use cash collateral and provide adequate protection.
The Debtors have an immediate need to use cash collateral to permit
them to finance the administration of the Chapter 11 cases, pay the
lag payroll owed to the employees, and satisfy other working
capital and operational needs necessary to preserve the
going-concern value of the Debtors.
For the year ending December 31, 2022, the Pharmacies had
approximate sales of $10.6 million, mainly attributable to Medicare
and Medicaid reimbursements. The operating pharmacies were
originally acquired in 2018 in a complex transaction funded
primarily by a loan originated under the U.S. Small Business
Administration Section 7(a) loan program. Live Oak Bank was the
lender having issued a loan in the original principal amount of
approximately $4.8 million.
After asserted defaults in the spring of 2020, and the Debtors'
operations having survived through the Covid-19 Pandemic, the SBA
"took back" the loan from Live Oak Bank, and assigned it to an
outside, private collection agency; the collection agency then
placed the LOB Loan back to the SBA, and then it was sent to the
Department of Treasury Cross Servicing Program. Despite years of
attempts by the undersigned counsel to negotiate a resolution to
the disputes surrounding the LOB Loan (beginning with Live Oak,
then the SBA, then its outside collection agency, then the DOTCSP),
no workout resolution was practical, and the Debtors' recently
ceased such efforts despite fruitful discussions with the U.S.
Department of Treasury Cross Servicing Program, the federal
government agency that collects debts for other federal agencies.
Although negotiations with the DOTCSP were fruitful, because of the
type and size of the LOB Loan, an out-of-court "offer and
compromise" process takes between 12-18 months and ultimately
requires the approval of the Department of Justice. And,
notwithstanding good faith negotiations, the DOTCSP must, and will
continue, to set-off all reimbursements due to the Pharmacies. In
the last months leading up to the filing of the cases, the DOTCSP
directed set-offs of all of the Debtors' reimbursements under any
federal program, including those administered by the Maryland
Medicare/Medicaid programs. The set-offs tragically preclude the
Debtors from being able to operate inasmuch as the bulk of the
Debtors' operating revenues is derived from these reimbursements.
Accordingly, to save the Debtors and restructure their debt, to
save employee jobs and to preserve the critically needed services
the Pharmacies provide in the community, these bankruptcy cases had
to be filed. Indeed, because so much of the Pharmacies' income is
attributable to reimbursements under federal programs, and the
DOTCSP must, by operation of federal law, set-off all such
payments, the Pharmacies were required to seek the protection of
the Court to be able to continue their operations.
The Debtors' assets are subject to the perfected security interests
of three entities. In the first priority position is the blanket
lien and security interest of SBA/DOTCSP (as successor to Live Oak
Bank) securing the LOB Loan in the original principal amount of
$4.8 Million. The LOB Loan is memorialized by a series of loan
documents including a: Loan Agreement, Note, Security Agreement,
and several Guarantees dated December 18, 2018. The DOTCSP asserts
that the current principal balance due is $4.1 million. In second
priority position and subordinate to the claims of SBA/DOTSCP is
the blanket lien and security interest of McKesson Corporation
pursuant to the Customer Application and Terms and Conditions dated
November 30, 2018, which McKesson agreed to subordinate to LOB
pursuant to an Intercreditor Agreement with LOB. In third priority
position is the lien and security interest of Anda, Inc. pursuant
to Credit Agreement/Applications dated February 3, 2019 for York
Road.
McKesson is the Debtors' main wholesaler of pharmaceutical and
medical supplies. the Debtors were current with billings from
McKesson.
As adequate protection, the Pre-Petition Lenders will be granted a
security interest of the same priority and to the same extent as
their respective pre-petition security interests in the LOB
Collateral, McKesson Collateral, or Anda Collateral, as the case
may be, and any profits, offspring and proceeds thereof hereafter
acquired, to the extent of the Debtors' use of such cash
collateral.
A copy of the motion is available https://urlcurt.com/u?l=XOYJRo
from PacerMonitor.com.
About Escher Group, LLC
Escher Group, LLC dba Glen Burnie is a community pharmacy offering
free prescription delivery, blister packaging, and immunizations.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Md. Case No. 23-17628) on October 23,
2023. In the petition signed by Andrew Michael Nye, II, manager,
the Debtor disclosed up to $10 million in both assets and
liabilities.
Richard M. Goldberg, Esq., at Shapiro Sher Guinot and Sandler, PA,
represents the Debtor as legal counsel.
Verity, LLC is the Debtor's financial advisor.
FARADAY FUTURE: Completes Sale-Leaseback of California Facility
---------------------------------------------------------------
Faraday Future Intelligent Electric Inc. announced that it has
exercised its option to purchase its Hanford, California
manufacturing facility and simultaneously completed a sale
leaseback. This transaction is expected to generate up to $12
million of non-dilutive capital that can be used toward the
completion of plant improvements and infrastructure enhancements to
facilitate FF 91 2.0 Futurist Alliance production ramp-up.
The Hanford manufacturing plant, officially called 'FF ieFactory
California' is a one million square foot state-of-the-art facility
that uses highly skilled craftsmanship and leading-edge automated
production. The facility, where the Ultimate AI TechLuxury FF 91
2.0 Futurist Alliance is currently produced, is situated between
technology-focused Silicon Valley and FF's Global HQ in Los
Angeles. It is expected that the plant, upon completion of the
factory build-out, will have the capacity to produce approximately
10,000 vehicles per year. FF announced the start of production and
completion of its first production build vehicle coming off its
production line at FF ieFactory California earlier this year.
"Our Hanford manufacturing facility is an integral part of our
overall operations and has been manufacturing production series
models of our FF 91 2.0 Futurist Alliance since earlier this year,"
said Matthias Aydt, Global CEO of FF. "This agreement will help us
make the necessary continued investments and improvements to the
Hanford plant that will facilitate increased production and
deliveries of the FF 91 2.0 Futurist Alliance."
The Company recently announced the continuation of its Co-Creation
program and preliminary upcoming FF 91 2.0 Futurist Alliance
deliveries for October as part of its ongoing 'Delivery Co-Creation
Day' plans. Specifically, the Company recently delivered the FF 91
2.0 Futurist Alliance to its founder YT Jia and expects to deliver
to global superstar and entrepreneur Chris Brown, and world
champion race car driver Justin Bell next. Large-scale deliveries
remain one of the Company's top strategic goals.
About Faraday Future
Los Angeles, CA-based Faraday Future (NASDAQ: FFIE) --
http://www.ff.com-- designs and engineers next-generation
intelligent, connected, electric vehicles. FF intends to start
manufacturing vehicles at its production facility in Hanford,
California, with additional future production capacity needs
addressed through a contract manufacturing partner in South Korea.
FF is also exploring other potential contract manufacturing options
in addition to the contract manufacturer in South Korea. The
Company has additional engineering, sales, and operational
capabilities in China and is exploring opportunities for potential
manufacturing capabilities in China through a joint venture or
other arrangement.
Faraday Future reported a net loss of $552.07 million for the year
ended Dec. 31, 2022, a net loss of $516.50 million for the year
ended Dec. 31, 2021, compared to a net loss of $147.08 million for
the year ended Dec. 31, 2020.
New York, NY-based Mazars USA LLP, the Company's auditor since
2022, issued a "going concern" qualification in its report dated
March 9, 2023, citing that the Company has incurred operating
losses since inception, has continued cash outflows from operating
activities, and has an accumulated deficit. These conditions raise
substantial doubt about its ability to continue as a going concern.
FRANK STOLLER: Seeks to Hire Conway Olejniczak as Counsel
---------------------------------------------------------
Frank Stoller Construction, Inc. seeks approval from the U.S.
Bankruptcy Court for the Eastern District of Wisconsin to employ
Conway Olejniczak & Jerry, S.C. as counsel.
The firm will assist the Debtor in resolving the tax dispute with
the Wisconsin Department of Revenue and complete tax returns.
The firm will be paid at these rates:
John M. Calewarts, Attorney $335 per hour
Paraprofessionals $195 to $390 per hour
The firm received from the Debtor an advance payment of $5,000.
The firm will also be reimbursed for reasonable out-of-pocket
expenses incurred.
John M. Calewarts, Esq., a partner at Conway Olejniczak & Jerry,
S.C., disclosed in a court filing that the firm is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
The firm can be reached at:
John M. Calewarts, Esq.
CONWAY OLEJNICZAK & JERRY, S.C.
231 South Adams Street
Green Bay, WI 54301
Tel: (920) 437-0476
About Frank Stoller Construction, Inc.
Frank Stoller Construction is an excavating contractor in Algoma,
Wisconsin.
Frank Stoller Construction, Inc. filed its voluntary petition for
relief under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Wis.
Case No. 23-24505) on Oct. 3, 2023. The petition was signed by
Russell L. Stoller as president. The Debtor estimated $1 million to
$10 million in both assets and liabilities.
Virginia E. George, Esq. at SWANSON SWEET LLP represents the Debtor
as counsel.
FREIGHT MASTER: Voluntary Chapter 11 Case Summary
-------------------------------------------------
Debtor: Freight Master Trans LLC
850 Elmhurst Road, Ste. 102
Elk Grove Village, IL 60007
Business Description: The Debtor provides trucking services.
Chapter 11 Petition Date: October 25, 2023
Court: United States Bankruptcy Court
Northern District of Illinois
Case No.: 23-14323
Debtor's Counsel: Saulius Modestas, Esq.
MODESTAS LAW OFFICES, P.C.
401 S. Frontage Rd.
Ste. C
Burr Ridge, IL 60527-7115
Tel: 312-251-4460
Fax: 312-277-2586
Email: smodestas@modestaslaw.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Spasoje Vrhovac as managing member.
The Debtor failed to include in the petition a list of its 20
largest unsecured creditors.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/UQPF6DY/Freight_Master_Trans_LLC__ilnbke-23-14323__0001.0.pdf?mcid=tGE4TAMA
FTX GROUP: Caroline Ellison Is the Focal Point in SBF Trial
-----------------------------------------------------------
Ava Benny-Morrison, Yueqi Yang and Bob Van Voris of Bloomberg News
report that Caroline Ellison, the former chief executive officer of
Alameda Research and Sam Bankman-Fried's former girlfriend, quickly
became the focal point of the FTX founder's fraud trial in New
York.
Prosecutors said Bankman-Fried told her and his closest friends the
truth about taking customer funds, even as he "lied to the world"
about the safety of his crypto platform. Defense lawyers,
meanwhile, said Bankman-Fried relied on Ellison to run Alameda and
when he asked her to hedge Alameda amid market uncertainty last
year, she didn't do it.
About FTX Group
FTX is the world's second-largest cryptocurrency firm. FTX is a
cryptocurrency exchange built by traders, for traders. FTX offers
innovative products including industry-first derivatives, options,
volatility products and leveraged tokens.
Then CEO and co-founder Sam Bankman-Fried said Nov. 10, 2022, that
FTX paused customer withdrawals after it was hit with roughly $5
billion worth of withdrawal requests.
Faced with liquidity issues, FTX on Nov. 9 struck a deal to sell
itself to its giant rival Binance, but Binance walked away from the
deal amid reports on FTX regarding mishandled customer funds and
alleged US agency investigations.
At 4:30 a.m. on Nov. 11, Bankman-Fried ultimately agreed to step
aside, and restructuring vet John J. Ray III was quickly named new
CEO.
FTX Trading Ltd (d/b/a FTX.com), West Realm Shires Services Inc.
(d/b/a FTX US), Alameda Research Ltd. and certain affiliated
companies then commenced Chapter 11 proceedings (Bankr. D. Del.
Lead Case No. 22-11068) on an emergency basis on Nov. 11, 2022.
Additional entities sought Chapter 11 protection on Nov. 14, 2022.
FTX Trading and its affiliates each listed $10 billion to $50
million in assets and liabilities, making FTX the biggest
bankruptcy filer in the US this year.
According to Reuters, SBF shared a document with investors on Nov.
10, 2022, showing FTX had $13.86 billion in liabilities and $14.6
billion in assets. However, only $900 million of those assets were
liquid, leading to the cash crunch that ended with the company
filing for bankruptcy.
The Hon. John T. Dorsey is the case judge.
The Debtors tapped Sullivan & Cromwell, LLP as bankruptcy counsel;
Landis Rath & Cobb, LLP as local counsel; and Alvarez & Marsal
North America, LLC as financial advisor. Kroll is the claims agent,
maintaining the page
https://cases.ra.kroll.com/FTX/Home-Index
The Official Committee of Unsecured Creditors tapped Paul Hastings
as counsel, FTI Consulting, Inc., as financial advisor, and
Jefferies LLC as the investment banker. Young Conaway Stargatt &
Taylor LLP is the Committee's Delaware and conflicts counsel.
Montgomery McCracken Walker & Rhoads LLP, led by partners Gregory
T. Donilon, Edward L. Schnitzer, and David M. Banker, is
representing Sam Bankman-Fried in the Chapter 11 cases.
White-collar crime specialist Mark S. Cohen has reportedly been
hired to represent SBF in litigation. Lawyers at Paul Weiss
previously represented SBF but later renounced representing the
entrepreneur due to a conflict of interest.
GOODYEAR TIRE: Egan-Jones Retains BB- Senior Unsecured Ratings
--------------------------------------------------------------
Egan-Jones Ratings Company on October 3, 2023, maintained its 'BB-'
foreign currency and local currency senior unsecured ratings on
debt issued by Goodyear Tire & Rubber Company. EJR also withdraws
rating on commercial paper issued by the Company.
Headquartered in Akron, Ohio, Goodyear Tire & Rubber Company
develops, distributes, and sells tires.
HALLIBURTON CO: Egan-Jones Hikes Senior Unsecured Ratings to BB+
----------------------------------------------------------------
Egan-Jones Ratings Company on September 27, 2023, upgraded the
foreign currency and local currency senior unsecured ratings on
debt issued by Halliburton Company to BB+ from BB.
Headquartered in Houston, Texas, Halliburton Company provides
energy and engineering and construction services, as well as
manufactures products for the energy industry.
HARTMAN SPE: Committee Hires Fox Rothschild LLP as Counsel
----------------------------------------------------------
The official committee of unsecured creditors of Hartman SPE, LLC
seeks approval from the U.S. Bankruptcy Court for the District of
Delaware to employ Fox Rothschild LLP as counsel.
The firm's services include:
(a) advising the Committee with respect to its rights, duties,
and powers in this Chapter 11 Case;
(b) assisting and advising the Committee in its consultations
with the Debtor relative to the administration of this Chapter 11
Case;
(c) assisting the Committee in analyzing the claims of the
Debtor's creditors and the Debtor's capital structure and in
negotiating with holders of claims and equity interests;
(d) assisting the Committee in its investigation of the acts,
conduct, assets, liabilities, and financial condition of the Debtor
and of the operation of the Debtor's business;
(e) assisting the Committee in analyzing (i) the Debtor's
pre-petition financing, and (ii) proposed use of cash collateral,
the terms and conditions of the proposed use of cash collateral and
the adequacy of the budget;
(f) assisting the Committee in its investigation of the liens
and claims of the holders of the Debtor's pre-petition debt and the
prosecution of any claims or causes of action revealed by such
investigation;
(g) assisting the Committee in its analysis of, and negotiations
with, the Debtor or any third party concerning matters related to,
among other things, the assumption or rejection of certain leases
of nonresidential real property and executory contracts, asset
dispositions, sale of assets, financing of other transactions and
the terms of one or more plans of reorganization for the Debtor and
accompanying disclosure statements and related plan documents;
(h) assisting and advising the Committee as to its
communications to unsecured creditors regarding significant matters
in this Chapter 11 Case;
(i) representing the Committee at hearings and other
proceedings;
(j) reviewing and analyzing applications, orders, statements of
operations, and schedules filed with the Court and advising the
Committee as to their propriety;
(k) assisting the Committee in preparing pleadings and
applications as may be necessary in furtherance of the Committee's
interests and objectives in this Chapter 11 Case, including without
limitation, the preparation of retention papers and fee
applications for the Committee's professionals, including Fox;
(l) preparing, on behalf of the Committee, any pleadings,
including without limitation, motions, memoranda, complaints,
adversary complaints, objections, or comments in connection with
any of the foregoing; and
(m) performing such other legal services as may be required or
are otherwise deemed to be in the interests of the Committee in
accordance with the Committee's powers and duties as set forth in
the Bankruptcy Code, Bankruptcy Rules, or other applicable law.
The firm will be paid at these rates:
Michael G. Menkowitz, Partner $1,075 per hour
Jesse M. Harris, Associate $490 per hour
Stephanie S. Ward, Associate $455 per hour
Robin I. Solomon, Paralegal $460 per hour
Attorneys $385 to $1,075 per hour
Associates $385 to $620 per hour
Paraprofessionals $145 to $460 per hour
The firm will also be reimbursed for reasonable out-of-pocket
expenses incurred.
In accordance with Appendix B-Guidelines for Reviewing Applications
for Compensation and Reimbursement of Expenses Filed under 11
U.S.C. Sec. 330 for Attorneys in Larger Chapter 11 Cases, the
following is provided in response to the request for additional
information:
Question: Did you agree to any variations from, or
alternatives to, your standard or customary billing
arrangements for this engagement?
Response: No.
Question: Do any of the professionals included in this
engagement vary their rate based on the geographic
location of the bankruptcy case?
Response: No.
Question: If you represented the client in the 12 months
prepetition, disclose your billing rates and
material financial terms for the prepetition
engagement, including any adjustments during the 12
months prepetition. If your billing rates and
material financial terms have changed postpetition,
explain the difference and the reasons for the
difference.
Response: Not applicable.
Question: Has your client approved your prospective budget
and staffing plan, and, if so for what budget
period?
Response: Fox Rothschild expects to develop a budget and
staffing plan to reasonably comply with the U.S.
Trustee's request for information and additional
disclosures, as to which Fox Rothschild reserves
all rights. The Committee has approved Fox
Rothschild's proposed hourly billing rates.
Michael G. Menkowitz, Esq., a partner at Fox Rothschild LLP,
disclosed in a court filing that the firm is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
The firm can be reached at:
Michael G. Menkowitz, Esq.
Jesse M. Harris, Esq.
FOX ROTHSCHILD LLP
2000 Market Street, 20th Floor
Philadelphia, PA 19103
Tel: (215) 299-2000
Fax: (215) 299-2150
Email: mmenkowitz@foxrothschild.com
jesseharris@foxrothschild.com
About Hartman SPE, LLC
Hartman SPE, LLC is a lessor of nonresidential buildings based in
Houston, Texas.
Hartman SPE filed a voluntary Chapter 11 petition (Bankr. D. Del.
Lead Case No. 23-11452) on Sept. 13, 2023, with $100 million to
$500 million in both assets and liabilities. David Wheeler,
president, signed the petition.
Judge Mary F. Walrath oversees the case.
The Debtor tapped Katten Muchin Rosenman, LLP as bankruptcy
counsel; Chipman Brown Cicero & Cole, LLP as Delaware counsel; and
Epiq Corporate Restructuring, LLC as administrative advisor.
HASBRO INC: Egan-Jones Retains BB Senior Unsecured Ratings
----------------------------------------------------------
Egan-Jones Ratings Company on October 2, 2023, maintained its 'BB'
foreign currency and local currency senior unsecured ratings on
debt issued by Hasbro, Inc. EJR also withdraws rating on commercial
paper issued by the Company.
Headquartered in Pawtucket, Rhode Island, Hasbro, Inc. designs,
manufactures, and markets toys, games, interactive software,
puzzles, and infant products.
HELMERICH & PAYNE: Egan-Jones Hikes Sr. Unsecured Ratings to BB+
----------------------------------------------------------------
Egan-Jones Ratings Company on September 27, 2023, upgraded the
foreign currency and local currency senior unsecured ratings on
debt issued by Helmerich & Payne, Inc. to BB+ from BB.
Headquartered in Tulsa, Oklahoma, Helmerich & Payne, Inc. provides
contract drilling of oil and gas wells in the Gulf of Mexico and
South America.
HERBALIFE LTD: Egan-Jones Retains BB- Senior Unsecured Ratings
--------------------------------------------------------------
Egan-Jones Ratings Company on October 3, 2023, maintained its 'BB-'
foreign currency and local currency senior unsecured ratings on
debt issued by Herbalife Ltd. EJR also withdraws rating on
commercial paper issued by the Company.
Headquartered in Los Angeles, California, Herbalife Ltd. Herbalife
Ltd operates as a nutrition company.
HESS MIDSTREAM: S&P Places 'BB+' ICR on CreditWatch Positive
------------------------------------------------------------
S&P Global Ratings placed its 'BB+' issuer credit rating on Hess
Midstream Operations L.P. (HESM), 'BB+' issue-level rating on its
senior unsecured debt and 'BBB-' issue-level rating on its senior
secured debt on CreditWatch with positive implications.
On Oct. 23, 2023, Chevron Corp. announced that it entered into a
definitive agreement to acquire all of the outstanding shares in
Hess Corp., the parent company of Hess Midstream Operations L.P.
(HESM). The shares are valued at approximately $53 billion.
S&P said, "We placed our ratings on HESM and its debt on
CreditWatch with positive implications. This reflects the
likelihood that we will raise our ratings after the acquisition of
parent company Hess Corp. by Chevron Corp. closes. The final rating
will depend on how strategic we deem HESM is to Chevron at the
close of the transaction."
HOWMET AEROSPACE: Egan-Jones Withdraws BB Senior Unsecured Ratings
------------------------------------------------------------------
Egan-Jones Ratings Company on September 28, 2023, withdrew its 'BB'
foreign currency and local currency senior unsecured ratings on
debt issued by Howmet Aerospace Inc. EJR also withdraws rating on
commercial paper issued by the Company.
Headquartered in Pittsburgh, Pennsylvania, Howmet Aerospace Inc.
provides engineered metal products.
HUDSON & MCKEE: Starts Subchapter V Bankruptcy Process
------------------------------------------------------
Hudson & McKee Real Estate LLC filed for chapter 11 protection in
the Eastern District of Missouri. According to court filing, the
Debtor reports between $1 million and and $10 million owed to 1 and
49 creditors. The petition states funds will be available to
unsecured creditors.
About Hudson & McKee Real Estate
Hudson & McKee Real Estate LLC is a limited liability company in
Missouri.
Hudson & McKee Real Estate LLC sought relief under Subchapter V of
Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D. Miss. Case No.
23-43539) on October 1, 2023. In the petition filed by Raymond
McKee, as manager, the Debtor reports estimated assets and
liabilities between $1 million and $10 million each.
The Debtor is represented by:
Spencer P. Desai, Esq.
The Desai Law Firm, LLC
3155 Brantner Place
Saint Louis, MO 63106
HWC BURBS: Court OKs Interim Cash Collateral Access
---------------------------------------------------
The U.S. Bankruptcy Court for the Western District of Washington
authorized HWC Burbs Burgers, LLC to use cash collateral on an
interim basis in accordance with the budget, with a 15% variance.
Specifically, the Debtor is permitted to use cash collateral to
satisfy pre-petition payroll obligations and associated payroll
taxes and insurance for the Debtor's employees due October 23,
2023, for the period of October 4, 2023, through October 18, 2023.
As adequate protection for the Debtor's use of the cash collateral,
the Court grants the secured parties with an interest in cash
collateral replacement liens in the Debtor's post-petition cash,
accounts receivable and inventory, and the proceeds of each of the
foregoing, to the same extent and priority as any duly perfected
and unavoidable liens in cash collateral held by the secured
creditors as of the petition date, to the extent that any cash
collateral of the secured creditors are actually used by the
Debtor.
A final hearing on the matter is set for December 7, 2023 at 9:30
a.m.
A copy of the order is available at https://urlcurt.com/u?l=XVpML5
from PacerMonitor.com.
About HWC Burbs Burgers, LLC
HWC Burbs Burgers, LLC sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. W.D. Wash. Case No. 23-11919) on
October 9, 2023. In the petition signed by Joshua Henderson,
member, the Debtor disclosed up to $500,000 in assets and up to $10
million in liabilities.
Judge Marc L. Barreca oversees the case.
Thomas D. Neelem, Esq., at Neeleman Law Group, P.C., represents the
Debtor as legal counsel.
INDIEV INC: Hires Law Offices of Michael Jay Berger as Counsel
--------------------------------------------------------------
Indiev, Inc. seeks approval from the U.S. Bankruptcy Court for the
Central District of California to employ Law Offices of Michael Jay
Berger as counsel.
The firm's services include:
a. communicating with creditors of the debtors;
b. reviewing the Debtor's Chapter 11 bankruptcy petition and
all supporting schedules;
c. advising the Debtor of its legal rights and obligations in a
bankruptcy proceedings;
d. working to bring the Debtor into full compliance with
reporting requirements of the Office of the United States Trustee;
e. preparing status reports as required by the Court;
f. responding to any motions filed in the Debtor's bankruptcy
proceedings; and
g. preparing a Chapter 11 Plan of Reorganization for the
Debtor.
The firm will be paid at these rates:
Michael Jay Berger $595 per hour
Sofya Davtyan, Partner $545 per hour
Carolyn M. Afari/Robert Poteete $435 per hour
Senior Paralegals and Law Clerks $250 per hour
Paralegals $200 per hour
The retainer is $45,000.
The firm will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Michael Jay Berger, a partner at Law Offices of Michael Jay Berger,
disclosed in a court filing that the firm is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
The firm can be reached at:
Michael Jay Berger, Esq.
LAW OFFICES OF MICHAEL JAY BERGER
9454 Wilshire Boulevard, 6th Floor,
Beverly Hills, CA 90212
Tel: (310) 271-6223
Fax: (310) 271-9805
Email: michael.berger@bankruptcypower.com
About Indiev, Inc.
Indiev Inc. filed Chapter 11 petition (Bankr. C.D. Calif. Case No.
23-12036) on Oct. 2, 2023, with $1 million to $10 million in assets
and $10 million to $50 million in liabilities.
Judge Scott C. Clarkson oversees the case.
Michael Jay Berger, Esq., at the Law Offices of Michael Jay Berger
is the Debtor's bankruptcy counsel.
JOURNEY PERSONAL: Moody's Ups CFR to B3 & Alters Outlook to Stable
------------------------------------------------------------------
Moody's Investors Service upgraded the ratings of Journey Personal
Care Corp. including the Corporate Family Rating to B3 from Caa2,
Probability of Default Rating to B3-PD from Caa2-PD, and the
existing senior secured first lien term loan rating to B3 from
Caa2. The outlook changed to stable from positive.
The ratings upgrade reflects Journey's improving profitability over
the last three quarters benefitting from pricing initiatives,
improvement in ocean freight, lower utilities costs in Europe, and
channel and product mix. Moody's expects that continued EBITDA
growth over the next 12 months will support further de-leveraging
and positive free cash flow. Moody's projects demand for personal
care adult incontinence and baby diapering products in North
America and Europe to remain stable and that low single digit
revenue growth and margin expansion will continue to lift earnings.
Moody's now expects that Journey will reduce debt-to-EBITDA
leverage to about 5.5x - 6x on a Moody's adjusted basis by the end
of 2024 from 11.6x as of June 2023 through continued improving
earnings and tight cost controls.
ESG considerations were not material to the rating action. However,
the improvement in the company's free cash flow is reducing
distressed exchange risk. This led to an improvement in the
financial strategy & risk management score to 4 from 5, the
governance IPS to G-4 from G-5 and the credit impact score to CIS-4
from CIS-5.
RATINGS RATIONALE
Journey's B3 CFR reflects Moody's projection that still elevated
debt-to-EBITDA leverage of 11.6x as of the last 12 months ended
June 2023 will decline over the next year due to improving volumes,
higher prices, and lower commodity costs. Moody's projects that
debt-to-EBITDA leverage will decline to about 5.5x – 6x by the
end of 2024. Journey's ability to raise prices across the
healthcare segment of its product portfolio, which accounts for
about half of revenue, is more limited. Specifically, a portion of
the company's healthcare business are contracts that are reimbursed
under healthcare tenders, and negotiations outside of the
contracted terms are unusual. Pricing actions in the retail
segment, which accounts for the remaining 50% of revenue, have been
effective. Journey's efforts to negotiate higher prices for
contracts that are up for renewal have been successful and are
expected to keep gross profit margins stable going forward.
Management estimates that approximately 10% to 15% of the
healthcare contracts do not yet reflect the updated pricing
structure. Moody's forecasts Journey's EBITDA margin will improve
by about 400 basis points over the next 12 months because of
declining raw material and freight costs and the revenue lift from
previously implemented price increases. Moody's projects positive
free cash flow of $10 to $15 million in 2024, dependent on interest
rate environment stabilizing and modest capital investment.
The ratings are supported by the company's good market position in
branded and private label products, which are sold in its
healthcare/institutional, retail and direct to consumer segments.
Demand for the products is stable and recurring given the essential
nature. Journey will focus on increasing penetration in the adult
incontinence category as a source of growth given the aging
population. The company is well diversified geographically with
revenue roughly split 50/50 between North America and Europe.
Moody's expects Journey will maintain good liquidity in 2024,
supported by cash on the balance sheet, unused revolver capacity,
and positive free cash flow generation. As of June 2023, the
company had $13 million of cash and $92 million available under its
$125 million asset-based lending revolving facility ("ABL").
Moody's projects positive free cash flow in the range of $10 to $15
million in 2024. Moody's also anticipates that the company may need
to return to higher capital spending over the next 24 months and
this will limit free cash flow. These cash sources provide good
coverage for the required term loan amortization of approximately
$6.7 million per year and operational needs. There are no term loan
financial maintenance covenants and Moody's does not expect
revolver availability to fall below level that would trigger the
minimum 1.0x fixed charge coverage ratio ("FCCR"). The FCCR
covenant is triggered if revolver availability is less than 10% of
the greater of the commitment and the borrowing base. The maturity
profile is good with the ABL revolver expiring in 2026, the US
secured term loan maturing in 2028 and unsecured Euro term loan
maturing in 2027.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The stable outlook reflects Moody's expectation that increased
volume and moderating raw material costs will drive higher EBITDA
that results in de-leveraging into 2024. The stable outlook also
reflects Moody's expectations that Journey will maintain good
liquidity and generate at least $10 million of free cash flow
annually.
The ratings could be upgraded if Journey is able to grow volumes
and revenue consistently through new business wins and increased
business at existing customers and manage costs such that the
EBITDA margin continues to improve. Journey would also need to
sustain debt-to-EBITDA below 5.5x, increase
EBITDA-less-capital-spending-to-interest above 2.0x, and generate
consistently positive free cash flow exceeding 5% of debt while
maintaining healthy capital spending to be considered for an
upgrade.
The ratings could be downgraded if Journey's financial performance
deteriorates due to reduced volumes, a decline in selling prices or
cost increases. EBITDA-less-capital-spending-to-interest below
1.25x, negative free cash flow or a deterioration in liquidity
could also lead to a downgrade.
Journey Personal Care Corp. (dba Attindas Hygiene Partners,
headquartered in Raleigh, North Carolina) designs, manufactures and
sells a range of branded and partner-branded adult incontinence
products including protective underwear, briefs, underpads, and
pads as well as diapers and training pants for babies throughout
North America and Europe. Journey generated approximately $1
billion in annual revenue for the last 12 months ending June 30,
2023 and was acquired by private equity firm American Industrial
Partners in a March 2021 leveraged buyout.
The principal methodology used in these ratings was Consumer
Packaged Goods published in June 2022.
JUICE ROLL: Mark Sharf Named Subchapter V Trustee
-------------------------------------------------
The U.S. Trustee for Region 16 appointed Mark Sharf, Esq., a
practicing attorney in Los Angeles, as Subchapter V trustee for
Juice Roll Upz, Inc.
Mr. Sharf will charge $660 per hour for his services as Subchapter
V trustee, $150 per hour for his Trustee administrator's services,
and will seek reimbursement for work-related expenses incurred.
Mr. Sharf declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Mark Sharf, Esq.
6080 Center Drive, 6th Floor
Los Angeles, CA 90045
Telephone: (323) 612-0202
Email: mark@sharflaw.com
About Juice Roll Upz
Juice Roll Upz, Inc. is a manufacturer of e-liquids and vape juices
based in Fullerton, Calif.
The Debtor filed Chapter 11 petition (Bankr. C.D. Calif. Case No.
23-12077) on October 10, 2023, with $497,964 in assets and
$3,103,919 in liabilities. Joshua Tongco, president, signed the
petition.
Judge Theodor Albert oversees the case.
Anerio Ventura Altman, Esq., at Lake Forest Bankruptcy, represents
the Debtor as legal counsel.
KEMPER CORP: Egan-Jones Retains BB+ Senior Unsecured Ratings
------------------------------------------------------------
Egan-Jones Ratings Company on September 28, 2023, maintained its
'BB+' foreign currency and local currency senior unsecured ratings
on debt issued by Kemper Corporation. EJR also withdraws rating on
commercial paper issued by the Company.
Headquartered in Chicago, Illinois, Kemper Corporation is a
financial services provider.
KIRBY CONSTRUCTION: Wins Interim Cash Collateral Access
-------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Georgia,
Atlanta Division, authorized Kirby Construction Group, LLC to use
cash collateral on an interim basis in accordance with the budget,
with a 10% variance.
The Debtor requires the use of cash collateral to pay operational
and administrative expenses.
First Electronic Bank and United States Small Business
Administration may assert interest in the Debtor's cash
collateral.
First Electronic Bank asserts a claim against the Debtor in
connection with a Master Revolving Credit Agreement with an
effective date of on or about June 18, 2020 pursuant to which First
Electronic Bank established a revolving credit facility in favor of
the Debtor. The balance due as of September 19, 20023 is $42,049.
SBA asserts a secured claim in the amount of $400,000. Payments of
$2,002 are due every month beginning 24 months from the date of the
note.
As adequate protection, First Electronic and SBA are granted a
replacement lien on all property of the kind and in the same
priority as their respective liens.
These events constitute an "Event of Default":
(i) the conversion or dismissal of the case; or
(ii) the appointment of a trustee or an examiner with expanded
powers in the case; and
(iii) the Debtor's failure to comply with the Interim Order.
A copy of the Debtor's motion and budget is available at
https://urlcurt.com/u?l=XJafOJ from PacerMonitor.com.
The Debtor projects total expenses, on a monthly basis, as
follows:
$14,797 for October 2023;
$11,169 for November 2023; and
$11,884 for December 2023.
About Kirby Construction Group, LLC
Kirby Construction Group, LLC provides restoration, renovation, and
remodel of interior building finishes, predominantly focused on
nonstructural residential interiors. Building finishes include
dry wall, painting, flooring, set-up, cabinets, countertops, etc.
The Debtor subcontracts the work out to third party subcontractors
on a job-by-job basis. Andrew C. Kirby, Jr. is the Debtor's sole
W-2 employee. The Debtor leases its office and warehouse location
having an address of 5365 Dividend Drive, Suite F, Decatur, Georgia
30035.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Ga. Case No. 23-58909) on September
13, 2023. In the petition signed by Andrew C. Kirby, Jr. manager,
the Debtor disclosed up to $100,000 in assets and up to $1 million
in liabilities.
Judge Lisa Ritchey Craig oversees the case.
Paul Reece Marr GA, Esq., at Paul Reece Marr, PC, represents the
Debtor as legal counsel.
KRISTI'S GROOMING: Seeks Cash Collateral Access Thru Feb 2024
-------------------------------------------------------------
Kristi's Grooming, LLC asks the U.S. Bankruptcy Court for the
Western District of Washington for authority to use cash collateral
and pay pre-petition wages.
The Debtor requires the use of cash collateral for payment of all
other ongoing operating expenses of the Debtor including future
payroll expenses from the petition date through February 28, 2024,
or until the effective date of the Plan.
In March 2020 for reasons incident to the COVID pandemic, the
Debtor ceased operations for roughly 10 weeks. Upon reopening, the
Debtor's operation continued to be impacted due to Covid protocols
and the affects of Covid on both customers and employees.
When the Covid restrictions were lifted, the Debtor experienced a
surge in business as individuals who had adopted dogs in record
numbers as companions during Covid sought grooming services for
their previously housebound dogs.
During this period, the Debtor was forced to turn away new due to
the small facility and lack of staff to accommodate the new
customers without negatively affecting current clientele. For the
next two years the store struggled to maintain profitability due to
the small facility and lack of staff.
In 2022, in order to service the growing customer base, the
Debtor's principle decided to re-locate the Bothell store to a
space that was double the space of the original store to service
the customer demand the original store was unable to service.
The cost of the new space was half the square foot cost of the
original space and was one block north of the original location
which was convenient for current clientele.
As the Debtor was unable to qualify for conventional or Small
Business Administration financing, with a $30,000 gift from a
friend, the Debtor proceeded with the build-out of the new space.
As the build-out progressed, in order to address unforeseen
problems associated with construction and after being presented
with a demand from its prior landlord for damages associated with
breaking the previous lease, the Debtor sought and obtained
financing at less than favorable interest rates with payments
higher than the Debtor could afford.
On August 1, 2023, the Debtor moved into the new location and began
servicing customers. The space is large enough for the Debtor's
principal to move around in her wheelchair and resume her duties as
an on-the-job owner which she was unable to do in the smaller store
and can accommodate the Debtor's growing customer base with
sufficient space and staff.
The Debtor disburses payroll bi-weekly, and paid payroll on October
20, 2023, which included payment for pre-petition hours worked from
October 1, 2023, through October 14, 2023. That Debtor seeks
retroactive authorization for payment of the October 20, 2023. The
Debtor also seeks authorization to pay the November 3, 2023,
payroll for hours worked from October 15, 2023 through October 28,
2023. The shop was closed on October 15, 2023 and October 16, 2023
and no hours will be included for these dates.
Based on a review of loan documents and a search of the Washington
State Department of Licensing, performed on September 27, 2023, the
Debtor has identified 1 filer of UCC-1 financing statements, more
specifically Elevation Capital Group, LLC.
The Declaration sets forth that, as of the petition date, the
Debtor's deposit accounts had a balance of $8,245. Accordingly, on
the date of the petition, the Debtor's cash collateral was
estimated to be valued at $8,245.
As adequate protection and for the Debtor's use of the cash
collateral, the Secured Creditor will be granted replacement liens
in the Debtor's post-petition cash, accounts receivables, and the
proceeds of each of the foregoing, to the same extent and priority
as any duly perfected and unavoidable liens in cash collateral held
by the Secured Creditor as of the Petition Date, limited to the
amount of any cash collateral of the Secured Creditor as of the
petition date, to the extent that any cash collateral of the
Secured Creditor is actually used by the Debtor.
A copy of the motion is available at https://urlcurt.com/u?l=3rG8RV
from PacerMonitor.com.
About Kristi's Grooming, LLC
Kristi's Grooming, LLC operates a specialty dog grooming
establishment in Bothell Washington.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. W.D. Wash. Case No. 23-11990-CMA) on
October 17, 2023. In the petition signed by Kristi Mann, managing
member, the Debtor disclosed up to $50,000 in assets and up to
$100,000 in liabilities.
Thomas D. Neeleman, Esq., at Neeleman Law Group, P.C., represents
the Debtor as legal counsel.
MALLINCKRODT PLC: Hires KPMG LLP as Tax Service Provider
--------------------------------------------------------
Mallinckrodt PLC and its affiliates seek approval from the U.S.
Bankruptcy Court for the District of Delaware to employ KPMG LLP to
provide tax consulting and advisory services.
The firm's services include:
I. Tax Consulting Services:
A. Debt Restructuring Services. KPMG will analyze U.S.
federal, state, local, and international tax implications of the
Debtors' potential restructuring of debt and/or capital structure
(the "Potential Restructuring"). Services may include, but are not
limited to, analyses of:
i. Applicability of Section 162(f) of the Internal Revenue
Code ("IRC") and issues, if any, related to amounts paid by the
Debtors in connection with its opioid settlement;
ii. IRC Section 382 issues related to potential restructuring
alternatives, including a sensitivity analysis to reflect the IRC
Section 382 impact of the proposed and/or hypothetical equity
transactions;
iii. Net unrealized built-in gains and losses and IRS Notice
2003-65 as applied to the ownership change, if any, resulting from
or in connection with the Potential Restructuring;
iv. Debtors' tax attributes, including net operating losses,
tax basis in assets, and tax basis in subsidiaries' stock as
relevant to the Potential Restructuring;
v. Cancellation of debt income, including the application of
Section 108 and consolidated tax return regulations relating to the
restructuring of non-intercompany debt and the completed
capitalization/settlement of intercompany debt;
vi. Application of the attribute reduction rules under IRC
Section 108(b) and Treasury Regulation Section 1.1502-28, including
a benefit analysis of IRC Sections 108(b)(5) and 1017(b)(3)(D)
elections as related to the Potential Restructuring;
vii. Relevant tax elections available and filing of any
necessary election statements;
viii. Tax implications of any internal reorganizations and
restructuring alternatives;
ix. Cash tax modeling of the tax benefits or tax costs of
restructuring alternatives; and
x. Tax implications of any dispositions of assets and/or
subsidiary stock pursuant to the Potential Restructuring;
xi. Potential bad debt, worthless stock, and retirement tax
losses associated with the Potential Restructuring;
xii. Tax treatment of restructuring related costs; and
xiii. Proof of claims from tax authorities.
B. 7874 Tax Opinion
i. KPMG will provide tax consulting services and issue a tax
opinion regarding the potential application of IRC Section 7874 to
the Debtors' expected restructuring transactions and certain
related issues.
II. Advisory Services:
A. KPMG will provide advisory support as requested by the
Debtors including, but not limited to, the following:
i. Advising the Debtors with respect to governance issues
relating to the Stefanini outsourcing agreement; and
ii. Review monthly and quarterly governance meeting materials
and attend monthly and quarterly governance committee meetings and
provide feedback.
The firm will be paid at these rates:
Partners/Principal $1,120 to $1,208 per hour
Managing Director $1,050 to $1,120 per hour
Director/Senior Manager $963 per hour
Manager $875 per hour
Senior Associate $665 per hour
Associate $403 per hour
The firm will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Olayinka Kukoyi, a partner at KPMG, disclosed in a court filing
that the firm is a "disinterested person" pursuant to Section
101(14) of the Bankruptcy Code.
The firm can be reached at:
Olayinka Kukoyi, CPA
KPMG LLP
811 Main Street, Suite 4500
Houston, TX 77002
Tel: (713) 319-2000
About Mallinckrodt PLC
Mallinckrodt (OTCMKTS: MNKTQ) -- http://www.mallinckrodt.com/-- is
a global business consisting of multiple wholly-owned subsidiaries
that develop, manufacture, market and distribute specialty
pharmaceutical products and therapies. The company's Specialty
Brands reportable segment's areas of focus include autoimmune and
rare diseases in specialty areas like neurology, rheumatology,
nephrology, pulmonology and ophthalmology; immunotherapy and
neonatal respiratory critical care therapies; analgesics; and
gastrointestinal products. Its Specialty Generics reportable
segment includes specialty generic drugs and active pharmaceutical
ingredients.
On Oct. 12, 2020, Mallinckrodt plc and certain of its affiliates
sought Chapter 11 protection in Delaware (Bankr. D. Del. Lead Case
No. 20-12522) to seek approval of a restructuring that would reduce
total debt by $1.3 billion and resolve opioid-related claims
against them. Mallinckrodt in mid-June 2022 successfully completed
its reorganization process, emerged from Chapter 11 and completed
the Irish Examinership proceedings.
Mallinckrodt Plc said in a regulatory filing in early June 2023
that it was considering a second bankruptcy filing and other
options after its lenders raised concerns over an upcoming $200
million payment related to opioid-related litigation.
Mallinckrodt plc and certain of its affiliates again sought Chapter
11 protection (Bankr. D. Del. Lead Case No. 23-11258) on Aug. 28,
2023.
Mallinckrodt plc disclosed $5,106,900,000 in assets and
$3,512,000,000 in liabilities as of June 30, 2023.
Judge John T. Dorsey oversees the new cases.
In the prior Chapter 11 cases, the Debtors tapped Latham & Watkins,
LLP and Richards, Layton & Finger, P.A. as their bankruptcy
counsel; Arthur Cox and Wachtell, Lipton, Rosen & Katz as corporate
and finance counsel; Ropes & Gray, LLP as litigation counsel;
Torys, LLP as CCAA counsel; Guggenheim Securities, LLC as
investment banker; and AlixPartners, LLP, as restructuring
advisor.
In the new Chapter 11 cases, The Debtors tapped Latham & Watkins,
LLP and Richards, Layton & Finger, P.A., as their bankruptcy
counsel; Arthur Cox and Wachtell, Lipton, Rosen & Katz as corporate
and finance counsel; Guggenheim Securities, LLC as investment
banker; and AlixPartners, LLP, as restructuring advisor. Kroll is
the claims agent.
MALLINCKRODT PLC: Unsecureds Unimpaired in Prepack Plan
-------------------------------------------------------
Mallinckrodt PLC, et al., submitted a First Amended Prepackaged
Joint Plan of Reorganization.
Except to the extent that a Holder of an Allowed DIP Claim and the
Debtor(s) against which such Allowed DIP Claim is asserted agree to
a less favorable treatment of its Allowed Claim, in exchange for
full satisfaction, settlement, discharge and release of, and in
exchange for its Allowed DIP Claims, on the Effective Date, each
Allowed DIP Claim shall receive, up to the Allowed amount of such
DIP Claim, Cash from (i) if the DIP Cash Sweep Trigger occurs, the
DIP Cash Sweep, and/or (ii) the Syndicated Exit Financing, if any,
provided that, to the extent that the net proceeds of the
Syndicated Exit Financing and the DIP Cash Sweep are collectively
less than the amount of the Allowed DIP Claims, the remaining DIP
Claims will be converted on a dollar-for-dollar basis into New
First Priority Takeback Term Loans in the amount of such
shortfall.
Under the Plan, Class 4 consists of all General Unsecured Claims.
Each Holder of an Allowed General Unsecured Claim against a Debtor
will receive payment in full in Cash in accordance with applicable
law and the terms and conditions of the particular transaction
giving rise to, or the agreement that governs, such Allowed General
Unsecured Claim on the later of (i) the date due in the ordinary
course of business or (ii) the Effective Date; provided, however,
that no Holder of an Allowed General Unsecured Claim shall receive
any distribution for any Claim that has previously been satisfied
pursuant to a Final Order of the Bankruptcy Court. Class 4 is
unimpaired.
The Debtors will fund Cash distributions under the Plan with Cash
on hand, including Cash from operations, and the proceeds of the
Syndicated Exit Financing (if any) and the Exit A/R Facility (if
any). Cash payments to be made pursuant to the Plan will be made by
the Reorganized Debtors in accordance with Article VI. Subject to
any applicable limitations set forth in any post-Effective Date
agreement (including the New Governance Documents), the Reorganized
Debtors will be entitled to transfer funds between and among
themselves as they determine to be necessary or appropriate to
enable the Reorganized Debtors to satisfy their obligations under
the Plan. Except as set forth herein, any changes in intercompany
account balances resulting from such transfers will be accounted
for and settled in accordance with the Debtors' historical
intercompany account settlement practices and will not violate the
terms of the Plan.
From and after the Effective Date, the Reorganized Debtors, subject
to any applicable limitations set forth in any post-Effective Date
agreement (including the New Governance Documents, the Syndicated
Exit Documentation, the New Takeback Debt Documentation, and the
Exit A/R Documents), shall have the right and authority without
further order of the Bankruptcy Court to raise additional capital
and obtain additional financing in accordance with, and subject to,
applicable law.
Proposed Counsel to the Debtors:
Mark D. Collins, Esq.
Michael J. Merchant, Esq.
Amanda R. Steele, Esq.
Brendan J. Schlauch, Esq.
RICHARDS, LAYTON & FINGER, P.A.
One Rodney Square
920 N. King Street
Wilmington, Delaware 19801
Telephone: (302) 651-7700
Facsimile: (302) 651-7701
Email: collins@rlf.com
merchant@rlf.com
steele@rlf.com
schlauch@rlf.com
George A. Davis, Esq.
Anupama Yerramalli, Esq.
Adam Ravin, Esq.
LATHAM & WATKINS LLP
1271 Avenue of the Americas
New York, New York 10020
Telephone: (212) 906-1200
Facsimile: (212) 751-4864
Email: george.davis@lw.com
anu.yerramalli@lw.com
adam.ravin@lw.com
- and -
Jason B. Gott, Esq.
LATHAM & WATKINS LLP
330 North Wabash Avenue, Suite 2800
Chicago, Illinois 60611
Telephone: (312) 876-7700
Facsimile: (312) 993-9767
Email: jason.gott@lw.com
A copy of the Plan of Reorganization dated September 29, 2023, is
available at https://tinyurl.ph/cgZcQ from PacerMonitor.com.
About Mallinckrodt plc
Mallinckrodt plc is global business consisting of multiple wholly
owned subsidiaries that develop, manufacture, market and distribute
specialty pharmaceutical products and therapies. Areas of focus
include autoimmune and rare diseases in specialty areas like
neurology, rheumatology, nephrology, pulmonology and ophthalmology;
immunotherapy and neonatal respiratory critical care therapies;
analgesics and gastrointestinal products.
Mallinckrodt plc and certain of its affiliates sought Chapter 11
protection (Bankr. D. Del. Lead Case No. 23-11258) on August 28,
2023.
Mallinckrodt plc disclosed $5,106,900,000 in assets and
$3,512,000,000 in liabilities as of June 30, 2023. Bryan M.
Reasons, authorized signatory, signed the petition.
Judge John T. Dorsey oversees the cases.
The Debtors tapped Latham & Watkins, LLP and Richards, Layton &
Finger, P.A. as their bankruptcy counsel; Arthur Cox and Wachtell,
Lipton, Rosen & Katz as corporate and finance counsel; Guggenheim
Securities, LLC as investment banker; and AlixPartners, LLP, as
restructuring advisor.
MARIOTT INT'L: Egan-Jones Retains BB+ Sr. Unsecured Ratings
-----------------------------------------------------------
Egan-Jones Ratings Company on October 6, 2023, maintained its 'BB+'
foreign currency and local currency senior unsecured ratings on
debt issued by Marriott International, Inc. EJR also withdraws
rating on commercial paper issued by the Company.
Headquartered in Bethesda, Maryland, Marriott International, Inc.
of Maryland operates as a hotel.
MATTEL INC: Egan-Jones Retains BB+ Senior Unsecured Ratings
-----------------------------------------------------------
Egan-Jones Ratings Company on October 2, 2023, maintained its 'BB+'
foreign currency and local currency senior unsecured ratings on
debt issued by Mattel, Inc.
Headquartered in El Segundo, California, Mattel, Inc. designs,
manufactures, and markets a broad variety of children's toy
products on a worldwide basis.
MBIA INC: Egan-Jones Retains CCC- Senior Unsecured Ratings
----------------------------------------------------------
Egan-Jones Ratings Company on September 28, 2023, maintained its
'CCC-' foreign currency and local currency senior unsecured ratings
on debt issued by MBIA Inc. EJR also withdraws rating on commercial
paper issued by the Company.
Headquartered in Purchase, Harrison, New York, MBIA Inc. provides
financial guarantee insurance and other forms of credit protection.
MERIDIAN RESTAURANTS: Selling Restaurants for $125,000
------------------------------------------------------
Meridian Restaurants Unlimited, L.C. and NDM Restaurants, L.C.
asked the U.S. Bankruptcy Court for the District of Utah for
approval to sell three of their remaining restaurants.
Michael Knoop, the buyer, offered $125,000 for the restaurants
identified in court filings as restaurant numbers 4167, 8196, and
10203. In addition, the buyer agreed to assume certain liabilities,
including 2023 real estate taxes.
The restaurants are being sold "free and clear" of liens, claims,
rights, encumbrances, and other interests.
As part of the sale, the companies will assume and assign to the
buyer executory contracts and leases related to the operation of
the restaurants.
The companies previously ran a sale process but nobody made an
offer for the three restaurants, according to their attorney,
Michael Johnson, Esq., at Ray Quinney & Nebeker, P.C.
At the auction held on Sept. 19, the companies received bids only
for the purchase of 67 restaurants. Three more were subsequently
added to the restaurants purchased by Burger King Company after the
auction. As of Oct. 16, the companies have 21 remaining
restaurants, including the three restaurants Mr. Knoop is
acquiring.
"The sale of the ancillary restaurants will provide for additional
recovery for the estate, which would otherwise be unavailable," the
attorney said in a motion filed in court.
About Meridian Restaurants Unlimited
Meridian Restaurants Unlimited, LC, owner and operator of
restaurants in Utah, and its affiliates filed Chapter 11 petitions
(Bankr. D. Utah Lead Case No. 23-20731) on March 2, 2023. At the
time of the filing, Meridian Restaurants Unlimited reported $10
million to $50 million in both assets and liabilities.
Judge Kevin R. Anderson oversees the cases.
The Debtors tapped Markus Williams Young & Hunsicker, LLC, as
bankruptcy counsel; Ray Quinney & Nebeker P.C. as local and
litigation counsel; Peak Franchise Capital, LLC as financial
advisor; Hilco Corporate Finance, LLC as investment banker; and
Keen-Summit Capital Partners, LLC as real estate advisor. BMC
Group, Inc. is the noticing agent.
The U.S. Trustee for Region 19 appointed an official committee to
represent unsecured creditors in the Debtors' Chapter 11 cases. The
committee is represented by Foley & Lardner, LLP.
MIRACLE MILE: Case Summary & Five Unsecured Creditors
-----------------------------------------------------
Debtor: Miracle Mile Properties 2, LLC
287 Northern Boulevard
Suite 108
Great Neck, NY 11021
Business Description: Miracle Mile is a Single Asset Real Estate
debtor (as defined in 11 U.S.C. Section
101(51B)).
Chapter 11 Petition Date: October 25, 2023
Court: United States Bankruptcy Court
Eastern District of New York
Case No.: 23-73979
Judge: Hon. Alan S. Trust
Debtor's Counsel: Heath S. Berger, Esq.
BERGER, FISCHOFF, SHUMER, WEXLER & GOODMAN, LLP
6901 Jericho Turnpike
Suite 230
Syosset, NY 11791
Tel: 516-747-1136
Email: hberger@bfslawfirm.com/
gfischoff@bfslawfirm.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Pari Golian as authorized
representative.
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/D42VFJQ/Miracle_Mile_Properties_2_LLC__nyebke-23-73979__0001.0.pdf?mcid=tGE4TAMA
MOZ CORP: Files Emergency Bid to Use Cash Collateral
----------------------------------------------------
Moz Corp dba Moz Corp Logistics asks the U.S. Bankruptcy Court for
the Northern District of Georgia, Atlanta Division, for authority
to use cash collateral and provide adequate protection.
The Debtor requires the use of cash collateral to maintain
insurance, pay utilities, pay its employees, and maintain the
property needed in the operation of its business.
The Debtor generates approximately $115,000 - $140,000 per month in
income which is deposited in an account with Bank of America and
subsequent DIP accounts.
IncredibleBank, which is owed approximately $2 million, has a first
priority security interest in cash collateral pursuant to its UCC-1
filed on October 1, 2021 (007-2021-058231).
As adequate protection, the Lender will be granted replacement
liens, to the same extent and validity of those liens that
presently exist in the same order of priority as existed
pre-petition for the lender.
A copy of the Debtor's motion and budget is available at
https://urlcurt.com/u?l=0MccnE from PacerMonitor.com.
The Debtor projects total expenses, on a monthly basis, as
follows:
$113,826 for October 2023;
$124,726 for November 2023; and
$136,326 for December 2023.
About Moz Corp dba Moz Corp Logistics
Moz Corp dba Moz Corp Logistics is part of the general freight
trucking industry. The Debtor sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. N.D. Ga. Case No. 23-60332) on
October 19, 2023. In the petition signed by Mursel Ozkan,
president, the Debtor disclosed $519,671 in assets and $2,632,303
in total liabilities.
Judge Barbara Ellis-Monro oversees the case.
Ian Falcone, Esq., at The Falcone Law Firm, PC, represents the
Debtor as legal counsel.
MURPHY OIL: Egan-Jones Retains BB+ Senior Unsecured Ratings
-----------------------------------------------------------
Egan-Jones Ratings Company on October 6, 2023, maintained its 'BB+'
foreign currency and local currency senior unsecured ratings on
debt issued by Murphy Oil Corporation.
Headquartered in El Dorado, Arkansas, Murphy Oil Corporation is an
independent exploration and production company that conducts its
business through various operating subsidiaries.
MXP OPERATING: Hires Charles Davis as Special Counsel
-----------------------------------------------------
MXP Operating LLC seeks approval from the U.S. Bankruptcy Court for
the Eastern District of Texas to employ Charles Davis as special
counsel.
The firm will provide legal assistance to the Debtor, specifically
in the areas in oil and gas compliance and enforcement under a
Joint Operating Agreement.
The firm will be paid at the rates:
Charles Davis $350 per hour
Assistant $150 per hour
The firm will be paid a retainer in the amount of $20,000.
The firm will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Charles Davis, Esq., a partner at Law Office of Charles Davis,
disclosed in a court filing that the firm is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
The firm can be reached at:
Charles Davis, Esq.
LAW OFFICE OF CHARLES DAVIS
755 Baywood Drive, Second Floor
Petaluma, CA 94954
Tel: (415) 898-6475
Fax: (415) 898-4227
About MXP Operating, LLC
MXP Operating, LLC operates a company providing operating services
for Oil and Gas wells in Texas and Oklahoma.
The Debtor filed its voluntary petition for relief under Chapter 11
of the Bankruptcy Code (Bankr. E.D. Tex. Case No. 23-41446) on
August 11, 2023. The petition was signed by Rachel T. Patman, Esq.
as managing member. At the time of filing, the Debtor estimated
$2,732,000 in assets and $8,603,928 in liabilities.
Judge Brenda T. Rhoades oversees the case.
Eric A. Liepins, Esq. at Eric A. Liepins, P.C. represents the
Debtor as counsel.
MXP OPERATING: Seeks to Hire Tina Hoefler as Oil & Gas Auditor
--------------------------------------------------------------
MXP Operating LLC seeks approval from the U.S. Bankruptcy Court for
the Eastern District of Texas to employ Tina Hoefler as oil & gas
auditor.
The firm will provide accounting assistance to the Debtor,
specifically the Debtor billing and accounting requirements under
its joint operating agreement.
The firm will be paid a flat fee of $5,000, and will be paid a
retainer of $5,000.
As disclosed in a court filing that the firm is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
About MXP Operating, LLC
MXP Operating, LLC operates a company providing operating services
for Oil and Gas wells in Texas and Oklahoma.
The Debtor filed its voluntary petition for relief under Chapter 11
of the Bankruptcy Code (Bankr. E.D. Tex. Case No. 23-41446) on
August 11, 2023. The petition was signed by Rachel T. Patman, Esq.
as managing member. At the time of filing, the Debtor estimated
$2,732,000 in assets and $8,603,928 in liabilities.
Judge Brenda T. Rhoades oversees the case.
Eric A. Liepins, Esq. at Eric A. Liepins, P.C. represents the
Debtor as counsel.
NCR VOYIX: Egan-Jones Retains B- Senior Unsecured Ratings
---------------------------------------------------------
Egan-Jones Ratings Company on September 28, 2023, maintained its
'B-' foreign currency and local currency senior unsecured ratings
on debt issued by NCR Voyix Corporation. EJR also withdraws rating
on commercial paper issued by the Company.
Headquartered in Atlanta, Georgia, NCR Voyix Corporation provides
transaction management systems.
NORTHWOODS PETS: Amends Kapitus Secured Claim Pay Details
---------------------------------------------------------
Northwoods Pets, LLC, submitted a Modified Plan of Reorganization
dated October 17, 2023.
The Debtor filed this bankruptcy case in order to reorganize and
save the store from liquidation and closure.
In a chapter 7 liquidation context, which would likely be a
distressed sale or auction situation, the Debtor believes that the
inventory would be worth significantly less than its retail value,
and would likely be worth significantly less than even its cost
basis. There is a very limited market for pet store inventory sold
at auction, and even if a buyer could be found that would buy
everything, the Debtor believes the price reduction would likely be
about 50% off of the cost basis.
In light of the limited market available in a liquidation sale of
this type, and the resulting discount in price, the Debtor does not
believe a Chapter 7 Trustee would attempt to sell any of the
Debtor's assets in a Chapter 7 conversion, and instead the secured
creditors would recover them to conduct the forced sale. In other
words, the increased value of the inventory as reflected in the
recently filed operating report does not change the analysis that
in a Chapter 7 liquidation, the general unsecured creditors would
receive nothing on their claims.
The final Plan payment is expected to be paid on November 30, 2028.
This will be a 60-month plan, with the first plan month expected in
December 2023. However, any time after the 36th plan month, upon
completion of all payments to the administrative and priority
unsecured claims, and payment of the classified claims as set forth
in Article IV, the Plan will be deemed complete and the Debtor will
be entitled to obtain its order of discharge, subject to its
continuing obligation to complete payment of all longer term
secured debt obligations.
This Plan of Reorganization proposes to pay creditors of the Debtor
from future revenue generated by the Debtor through continued
operation of the pet store.
Class 2 consists of the Secured claim of Kapitus Servicing, Inc.
This secured claim will accrue interest at the contractual
non-default rate of interest at 10.00% per annum, less any adequate
protection payments made, through confirmation, and the outstanding
balance at confirmation shall be reamortized over 60 months at an
interest rate of 9.50% per annum, and paid via monthly installment
payments, estimated to be $3,393.52 per month.
All payments by the Debtor to Kapitus shall be remitted via ACH
payment. The Debtor authorizes Kapitus to ACH debit from the
account set forth on the voided check to be provided by the Debtor
at least 5 business days in advance of the due date of the first
payment due to Kapitus under the Plan. Debtor shall be charged and
liable for $75.00 for each rejected ACH debit incurred by Kapitus,
and such fees shall be due and payable by Debtor as they accrue.
Kapitus's claim shall continue to be secured by all of the Debtor's
collateral, whether acquired by the Debtor pre- or post-petition,
as provided under the Loan Agreement, Security Agreement and
Kapitus' UCC-1 Financing Statement filed with the Wisconsin
Department of Financial Institutions on July 9, 2021 as Filing
Number 20210709000537-0 (the "Financing Statement"). Kapitus'
security interest shall be deemed to continue to be perfected as of
the date of entry of the Confirmation Order without the need for
Kapitus to file or execute any document as may otherwise be
required under applicable non-bankruptcy law. Kapitus is
authorized, but not required, to file a new post-confirmation UCC
financing statement to continue the perfection of its prepetition
security interest described in the Financing Statement.
The Debtor will implement and fund the Plan by continuing to
operate the pet store and generate income. Marshall shall remain as
owner and manager, and the Debtor shall make all disbursements
called for by the Plan.
A full-text copy of the Modified Plan dated October 17, 2023 is
available at https://urlcurt.com/u?l=MxxtOc from PacerMonitor.com
at no charge.
Attorney for the Debtor:
John W. Menn, Esq.
Steinhilber Swanson, LLP
107 Church Avenue
Oshkosh, WI 54901
Telephone: (920) 235-6690
Facsimile: (920) 426-5530
Email: jmenn@steinhilberswanson.com
About Northwoods Pets LLC
Northwoods Pets, LLC, is a limited liability company operating a
pet store in Rhinelander, WI.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. W.D. Wisc. Case No. 1-23-10800) on May 1,
2023. In the petition signed by Jennifer L. Marshall, sole member,
the Debtor disclosed up to $500,000 in both assets and
liabilities.
Judge Thomas M. Lynch oversees the case.
John W. Menn, Esq., at Steinhilber Swanson LLP, is the Debtor's
legal counsel.
NU STYLE LANDSCAPE: Hires SLBiggs as Financial Advisor
------------------------------------------------------
NU Style Landscape & Development, LLC seeks approval from the U.S.
Bankruptcy Court for the District of Colorado to employ SLBiggs as
financial advisor.
The firm will provide these services:
-- evaluate the Debtor's financial affairs;
-- advise on bookkeeping entries and approaches; and
-- assist in account reconciliation, payroll, tax return
preparation and other bankruptcy specific financial matters
including monthly budgets, monthly reports, liquidation analyses
and financial projections.
The firm will be paid at the rate of $435 per hour.
The firm will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Mark Dennis, partner of SLBiggs, assured the Court that the firm is
a "disinterested person" as the term is defined in Section 101(14)
of the Bankruptcy Code and does not represent any interest adverse
to the Debtor and its estates.
The firm can be reached at:
Mark Dennis
SLBiggs
10960 Wilshire Boulevard, 7th Floor
Los Angeles, CA 90024
Tel: (310) 477-3924
About NU Style Landscape & Development, LLC
Nu Style Landscape & Development, LLC filed its voluntary petition
under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. D.
Colo. Case Nos. 23-14475) on Oct. 2, 2023. In the petition signed
by Michael Moilanen, managing member, the Debtor disclosed $1
million to $10 million in both assets and liabilities.
Judge Thomas B. McNamara oversees the case.
Allen Vellone Wolf Helfrich & Factor PC serves as the Debtor's
counsel.
NUASIN NEXT: Moody's Affirms 'Ba1' Rating on 2017A Revenue Bonds
----------------------------------------------------------------
Moody's Investors Service has affirmed the Ba1 rating for Nuasin
Next Generation Charter School, NY's Revenue Bonds (Metropolitan
Lighthouse Charter School Project), Tax-Exempt Series 2017A, issued
through the Build NYC Resource Corporation. The outlook has been
revised to positive from stable. The affirmation affects roughly
$25 million of outstanding debt.
RATINGS RATIONALE
Nuasin Next Generation Charter School's Ba1 rating reflects its
strong financial position, bolstered by high per-student funding
and rental assistance. Despite its small size, Nuasin boasts a
healthy $8.3 million in cash reserves, or 209 days of cash, higher
than its peers, and a solid 1.83x debt service coverage, affording
both operating and debt service flexibility. The school's deep
waitlist, solid retention rates, and competitive academic profile
also strengthen its credit profile. The Ba1 rating also
incorporates the school's future growth plans, including a
potential 50-80 thousand square foot facility expansion to
accommodate seven-year enrollment growth to 1,200 students from 680
students currently. The expansion will present financial
challenges; although the school has a history of moderately strong
EBIDA margins, these are expected to decline with expansion costs,
and as federal coronavirus support winds down. Forward-looking
budgets include slight deficits and depend on untested fundraising.
The revenue bonds are backed by a long-term non-contingent lease
between Nuasin Next Generation Charter School and Metropolitan
Support Organization, and its sole membership in 180 W. 165th
Street LLC, ensuring repayment of debt service.
RATING OUTLOOK
The positive outlook hinges on two potential scenarios. If the
school retains its current financial, demand, and academic
strengths without expanding and controls expenditures as ESSER
revenue winds down, a positive shift in its credit profile will be
recognized in the rating.
The positive outlook also acknowledges the potential for
implementation of the school's growth strategy, considering its
current financial resources and enrollment profile. As the school
progresses, if financial metrics stay in line with current levels,
expansion costs are reasonably expected to be met with recurring
revenue growth, and leverage remains manageable, positive rating
movement is also possible.
FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATING
-- Consistent maintenance of strong coverage levels, preferably
above 1.5x, along with enhanced liquidity exceeding 185 days.
-- Sustained growth in enrollment and successful execution of
expansion plans, leading to increased revenue and financial
stability.
-- Successful and sustained fundraising efforts contributing to
diversified revenue growth and solid EBIDA margins.
-- Continued robust academic performance enhancing the school's
reputation and attracting more students.
FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATING
-- A weakened financial capacity relative to peer institutions,
indicating potential fiscal vulnerability.
-- A significant decline in demand and academic profile, signaling
a possible erosion of the institution's standing and appeal.
-- Unsustainable levels of debt or the need for excessive support
to maintain capital facilities, suggesting financial instability.
LEGAL SECURITY
The issuer's debt is secured by a loan agreement with the
Institution, MetLCS being the Institution's initial sole member.
The loan agreement payments come from lease payments made by
MetLCS, who has pledged all school revenues, excluding categorical
education funds and restricted gifts, for lease payments. These are
defined as School Pledged Revenues. The Bank of New York acts as
both custodian and trustee, transferring funds for debt service
payments on a bimonthly basis.
The funds are deposited into the Revenue Fund and then flow through
a series of funds, starting with the Bond Fund. The Bonds are
secured by the Debt Service Reserve Fund, funded by the Charter
School Finance Partnership, and a mortgage interest in the financed
school.
Covenants are weak, with debt service coverage only sum sufficient
if the school has at least 90 days cash. If liquidity is below this
level, coverage must be 1.1x. Violation of these conditions
requires hiring a consultant but is not an event of default.
The additional bonds test equals 1.0x MADs by the most recent
audited fiscal year and a consultant's report showing 1.25x
coverage of debt service following project completion. MetLCS can
incur long-term and short-term indebtedness under certain
conditions. Events of default include nonpayment and failure of the
issuer to perform any covenant under the Indenture, which may lead
to bond acceleration.
PROFILE
Nuasin Next Generation Charter School, a public charter entity for
K-12 grades, started in 2010. Located in Highbridge, Bronx, New
York City, NY, it had 680 students by FY2023. The school
consistently performs better than others in the 9th school
district. The current charter, authorized by the New York City
Department of Education, Chancellor of Education, expires on June
30, 2027. In New York, charters have a maximum term of 5 years. The
school aims to expand to another facility and increase its student
count to around 1,200 by 2030.
METHODOLOGY
The principal methodology used in this rating was US Charter
Schools published in September 2016.
OFFICE DEPOT: Egan-Jones Retains B+ Senior Unsecured Ratings
------------------------------------------------------------
Egan-Jones Ratings Company on September 29, 2023, maintained its
'B+' foreign currency and local currency senior unsecured ratings
on debt issued by Office Depot, Inc.
Headquartered in Boca Raton, Florida, Office Depot, Inc. operates a
chain of office product warehouse stores in North America, Europe,
Asia, and Central America.
ONH AFC CS: Hires Epiq Corporate Administrative Advisor
-------------------------------------------------------
ONH AFC CS Investors LLC and its affiliates seek approval from the
U.S. Bankruptcy Court for the District of Delaware to employ Epiq
Corporate Restructuring, LLC as administrative advisor.
The firm will provide these services:
a. assist with, among other things, solicitation, balloting
and tabulation of votes, and prepare any related reports, as
required in support of confirmation of a Chapter 11 plan, and in
connection with such services, process requests for documents from
parties in interest, including, if applicable, brokerage firms,
bank back-offices and institutional holders;
b. prepare an official ballot certification and, if necessary,
testify in support of the ballot tabulation results;
c. assist with the preparation of the Debtors' schedules of
assets and liabilities and statements of financial affairs and
gather data in conjunction therewith;
d. provide a confidential data room, if requested;
e. manage and coordinate any distributions pursuant to a
chapter 11 plan; and
f. provide such other processing, solicitation, balloting and
other administrative services described in the Engagement
Agreement, but not included in the Section 156(c) Application, as
may be requested from time to time by the Debtors, the Court or the
Office of the Clerk of the Bankruptcy Court (the "Clerk").
The firm will be paid at these rates:
IT/Programming $35 to $80 per hour
Project Managers/Consultants/
Directors $65 to $175 per hour
Solicitation Consultant $175 per hour
Executives No Charge
The Debtor paid the firm a retainer in the amount of $15,000.
The firm will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Kate Mailloux,, a partner at Epiq Corporate Restructuring, LLC,
disclosed in a court filing that the firm is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
The firm can be reached at:
Kate Mailloux
Epiq Corporate Restructuring, LLC
777 Third Avenue, 12th Floor
New York, NY 10017
Tel: (646) 282-2532
Email: kmailloux@epiqglobal.com
About ONH AFC CS Investors LLC
ONH AFC CS Investors, LLC and ONH 1601 CS Investors, LLC filed
their petitions under Chapter 11, Subchapter V of the Bankruptcy
Code (Bankr. D. Del. Lead Case No. 23-10931) on July 14, 2023. At
the time of the filing, ONH AFC reported $100,001 to $500,000 in
both assets and liabilities while ONH 1601 reported up to $50,000
in assets and $100,001 to $500,000 in liabilities.
Judge Craig T. Goldblatt oversees the cases.
The Debtors tapped Jorian L. Rose, Esq., at Baker & Hostetler, LLP
and Matthew B. McGuire, Esq., at Landis Rath & Cobb, LLP as legal
counsel. GlassRatner Advisory & Capital Group, LLC, doing business
as B. Riley Advisory Services, is the Debtors' restructuring
advisor.
OUTPOST PINES: Unsecureds Owed $1.5M to get $8,200
--------------------------------------------------
Outpost Pines LLC submitted an Amended Plan of Reorganization.
Under the Plan, Class 5 General Unsecured Claims total $1,557,421.
Unless a particular creditor agrees to defer payment, payment in
full in Cash plus interest through the payment date in two
installments, with the first installment due three months after the
Effective Date, and the second payment due six months after the
Effective Date. Insiders holding a $1,549,221 Claim have agreed to
defer payment until maturity or satisfaction of the Mortgagee's
Loan. An Affidavit evidencing that agreement shall be submitted to
the Court before the Confirmation Hearing. Thus, the General
Unsecured Claims to be paid in Cash under the Plan total $8,200.
Class 5 is impaired.
Effective Date Plan payments will be paid from cash on hand. Post
Effective Date Plan payments will be paid pursuant to the
Settlement Agreement annexed to the Plan as Exhibit B.
Counsel for Debtor:
Mark Frankel, Esq.
Backenroth Frankel & Krinsky, LLP
488 Madison Avenue, Floor 23
New York, New York 10022
Tel: (212) 593-1100
A copy of the Plan of Reorganization dated September 29, 2023, is
available at https://tinyurl.ph/WvisJ from PacerMonitor.com.
About Outpost Pines
Outpost Pines, LLC is engaged in activities related to real estate.
It owns in fee simple title properties located in Sayville, N.Y.,
valued at $13.5 million. The company is based in Fire Island Pines,
N.Y.
Outpost Pines sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr, E.D.N.Y. Case No. 23-70617) on Feb. 23,
2023. In the petition signed by Patrick J. McAteer, authorized
signatory, the Debtor disclosed $13,979,967 in assets and
$11,815,019 in liabilities.
Judge Robert E. Grossman oversees the case.
The Debtor tapped Mark Frankel, Esq., at Backenroth Frankel and
Krinsky, LLP as bankruptcy counsel and Cohen &Gresser, LLP as
special real estate, corporate and litigation counsel.
PAYNE'S ENVIRONMENTAL: Kathleen DiSanto Named Subchapter V Trustee
------------------------------------------------------------------
The U.S. Trustee for Region 21 appointed Kathleen DiSanto, Esq., at
Bush Ross, P.A., as Subchapter V trustee for Payne's Environmental
Services, LLC.
Ms. DiSanto will be paid an hourly fee of $350 for her services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Ms. DiSanto declared that she is a disinterested person according
to Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Kathleen L. DiSanto, Esq.
Bush Ross, P.A.
P.O. Box 3913
Tampa, FL 33601-3913
Phone: (813) 224-9255
Fax: (813) 223-9620
Email: disanto.trustee@bushross.com
About Payne's Environmental
Payne's Environmental Services, LLC offers a variety of tree
services to residential and commercial customers. It offers tree
trimming, tree removal, and stump grinding and removal services.
The company is based in Tampa, Fla.
Payne's filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code Bankr. M.D. Fla. Case No. 23-04522) on Oct. 11,
2023, with $4,294,839 in assets and $4,785,378 in liabilities.
Terry Payne, manager, signed the petition.
Judge Roberta A. Colton oversees the case.
Buddy D. Ford, Esq., at Buddy D. Ford, P.A. represents the Debtor
as legal counsel.
PB MICHIGAN: Hires Steinberg Shapiro as Legal Counsel
-----------------------------------------------------
PB Michigan, LLC seeks approval from the U.S. Bankruptcy Court for
the Eastern District of Michigan to employ Steinberg Shapiro &
Clark as counsel to handle its Chapter 11 case.
The firm will be paid at these rates:
Mark H. Shapiro $400 per hour
Tracy M. Clark $375 per hour
The retainer is $15,000.
The firm will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Mark H. Shapiro, Esq., a partner at Steinberg Shapiro & Clark,
disclosed in a court filing that the firm is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
The firm can be reached at:
Mark H. Shapiro, Esq.
STEINBERG SHAPIRO & CLARK
25925 Telegraph Road, Suite 203
Southfield, MI 48033
Tel: (248) 352-4700
Email: shapiro@steinbergshapiro.com
About PB Michigan, LLC
PB Michigan, LLC filed a petition under Chapter 11, Subchapter V of
the Bankruptcy Code (Bankr. E.D. Mich. Case No. 23-48504) on Sept.
28, 2023, with up to $50,000 in assets and up to $10 million in
liabilities. Allison LeMay, member and manager, signed the
petition.
Judge Lisa S. Gretchko oversees the case.
Mark H. Shapiro, Esq., at Steinberg Shapiro & Clark, represents the
Debtor as legal counsel.
PBF ENERGY: Egan-Jones Retains BB- Senior Unsecured Ratings
-----------------------------------------------------------
Egan-Jones Ratings Company on October 2, 2023, maintained its 'BB-'
foreign currency and local currency senior unsecured ratings on
debt issued by PBF Energy Inc. EJR also withdraws rating on
commercial paper issued by the Company.
Headquartered in Parsippany-Troy Hills, New Jersey, PBF Energy Inc.
operates as an independent petroleum refiner and supplier.
PEGASUS HOME: Gets Court's Nod for Oct. 27 Auction
--------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware approved the
bidding procedures for the sale of substantially all assets of
Pegasus Home Fashions Inc and its debtor-affiliates.
The Debtors said that they have a clear strategy for the Chapter 11
Cases for the benefit of all stakeholders, including their
employees, customers, and vendors-- the sale of all or
substantially all of their Assets. Among other things, the Sale
Process will provide a transparent and comprehensive avenue through
which the Debtors will seek bids for the Assets. In connection
with the Sale Process, the Stalking Horse Bidder has submitted a
binding bid for the Assets in the form of the Stalking Horse
Agreement. To enable the Debtors to fund the administration of the
Chapter 11 Cases and pursue the Sale Process, the Debtors have also
negotiated and obtained post-petition financing from Webster Bank,
N.A. ("Webster") and Blue Torch Finance, LLC ("DIP Lenders") in the
form of (i) a secured asset-based revolving credit facility in an
aggregate principal amount of $20.0 million, and (ii) a secured
term loan that will provide approximately $5.0 million in new money
for the Debtors’ estates and access to necessary cash collateral.
The Debtors noted they will administer the Chapter 11 Cases
consistent with the milestones agreed upon with the DIP Lenders and
the Stalking Horse Bidder ("Milestones").
The Debtors said they have entered into an asset purchase agreement
("Stalking Horse Agreement") with a special purpose entity
controlled by Blue Torch Finance, LLC -- as administrative agent
and collateral agent for the DIP Term Loan Lenders and Prepetition
Term Loan Lenders -- formed for the purpose of the transactions
contemplated thereby, will serve as a stalking horse bidder for
substantially all of the Debtors' Assets, as more specifically
identified in the Stalking Horse Agreement ("Stalking Horse
Bidder").
To participate in the bidding process or otherwise be considered
for any purpose under these Bidding Procedures, a person or entity
(other than the Stalking Horse Bidder) interested in consummating a
Sale ("Potential Bidder") must deliver or have previously
delivered:
i) an executed confidentiality agreement on terms
acceptable to the Debtors ("Confidentiality
Agreement"); and
ii) information demonstrating (in the Debtors'
reasonable business judgment in consultation with
the Consultation Parties (defined herein)) that the
Potential Bidder has the financial capability to
consummate the applicable Sale, which may include,
but is not limited to, the most current audited
and latest unaudited financial statements of the
Potential Bidder (or such other form of financial
disclosure acceptable to the Debtors in their
discretion in consultation with the Consultation
Parties) (or, if the Potential Bidder is an entity
formed for the purpose of acquiring the Assets,
Financials of the equity holder(s) of the Potential
Bidder or such other form of financial disclosure
as is acceptable to the Debtors, in consultation
with: (a) the Prepetition ABL Agent and DIP Revolver
Administrative Agent, (b) the Prepetition Term Loan
Agent and the DIP Term Agent, and (c) the advisors
to the Committee (collectively, "Consultation
Parties"), and
iii) any other evidence the Debtors, in consultation with
the Consultation Parties, may reasonably request to
evaluate such Potential Bidder’s fitness, interest
or motives for participating in the bidding process.
The Minimum Bid is an amount of cash or other consideration offered
that exceeds the aggregate sum of the following:
-- the Purchase Price, as that term is defined in the
Stalking Horse Agreement; plus
-- the amount of the Expense Reimbursement; plus
-- the $200,000 minimum bid increment.
Each Bid (other than the Stalking Horse Bid) must be accompanied by
a cash deposit in the amount equal to 10% of the Purchase Price of
the Bid, to be held in an account to be identified and established
by the Debtors ("Deposit"). The Debtors reserve the right to
increase the Deposit requirement in consultation with the
Consultation Parties.
The bid deadline was Oct. 24, 2023 at 5:00 p.m. (Prevailing Eastern
Time). The auction will commence on Oct, 27, 2023 at 10:00 a.m.
(Prevailing Eastern Time). The sale hearing will be conducted on
Nov. 2, 2023 at 10:00 a.m. (Prevailing Eastern Time).
Closing of the Sale as to any Asset related to a Bid by a Qualified
Bidder must be reasonably likely (based on availability of
financing, antitrust, or other regulatory issues, experience, and
other considerations) to be consummated, if selected as the
Successful Bid, on or before Nov. 13, 2023.
All due diligence requests must be directed to SSG Capital
Advisors, LLC, 300 Barr Harbor Drive, Suite 420, West Conshohocken,
PA 19428, Attn: J. Scott Victor (jsvictor@ssgca.com) and Teresa
Kohl (tkohl@ssgca.com).
About Pegasus Home Fashions
Pegasus Home Fashions Inc. manufactures house furnishing products.
The Company offers pillows, memory foam, quilts, bedspreads,
blankets, throws, sheet sets, pet beds, furniture protectors, and
mattress pads. Pegasus Home Fashions serves customers in the United
States.
Pegasus Home Fashions sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Del. Case No. 23-11236) on August 24,
2023. In the petition filed by Timothy Boates, as chief executive
officer, the Debtor reports estimated assets and liabilities
between $100 million and $500 million each.
The Debtor is represented by Michael R. Nestor, Esq., at Young
Conaway Stargatt & Taylor.
On Sep 12, 2023, the Office of the United States Trustee for the
District of Delaware appointed the Committee pursuant to section
1102(a)(1) of the Bankruptcy Code. The Committee is comprised of
two members: (a) International Paper, and (b) Stein Fibers, Ltd.
The Committee selected LowensteinSandler LLP as its counsel and
Morris James LLP as its Delaware counsel.
PG&E CORP: Egan-Jones Retains BB- Senior Unsecured Debt Ratings
---------------------------------------------------------------
Egan-Jones Ratings Company on October 3, 2023, maintained its 'BB-'
foreign currency and local currency senior unsecured ratings on
debt issued by PG&E Corporation. EJR also withdraws rating on
commercial paper issued by the Company.
Headquartered in San Francisco, California, PG&E Corporation is a
holding company that holds interests in energy based businesses.
PHILLIP HIMMELFARB: Case Summary & Three Unsecured Creditors
------------------------------------------------------------
Debtor: Phillip Himmelfarb Testamentary Trust FBO J Bauer
8630 Allenwood Road
Los Angeles CA 90046
Business Description: The Debtor is Single Asset Real Estate (as
defined in 11 U.S.C. Section 101(51B)).
Chapter 11 Petition Date: October 25, 2023
Court: United States Bankruptcy Court
Central District of California
Case No.: 23-17022
Debtor's Counsel: Leslie Cohen, Esq.
J'aime Williams Kerper, Esq.
LESLIE COHEN LAW PC
1615-A Montana Avenue
Santa Monica CA 90403
Tel: 310-394-5900
Fax: 310-394-9280
Email: leslie@lesliecohenlaw.com
jaime@lesliecohenlaw.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $10 million to $50 million
The petition was signed by Robert Bauer as trustee.
A full-text copy of the petition containing, among other items, a
list of the Debtor's three unsecured creditors is available for
free at PacerMonitor.com at:
https://www.pacermonitor.com/view/HZCIFOI/Phillip_Himmelfarb_Testamentary__cacbke-23-17022__0001.0.pdf?mcid=tGE4TAMA
PIKE CORP: S&P Alters Outlook to Positive, Affirms 'B' ICR
----------------------------------------------------------
S&P Global Ratings revised the rating outlook on Pike Corp. to
positive from stable and affirmed its 'B' issuer credit rating on
Utility and telecom construction, repair, and engineering services
provider Pike Corp.
S&P said, "We affirmed our 'B' issue-level rating on the company's
existing first-lien term loans and revolver. The recovery rating
remains '3', indicating our expectation of meaningful recovery in
the 50%-70% range (rounded estimate: 60%).
"We also affirmed our 'CCC+' issue-level rating on the company's
existing senior unsecured notes, with a '6' recovery rating.
The positive outlook on Pike reflects our expectation that the
company will show healthy revenue growth and above-average
operating margins that will support improving credit metrics with
S&P Global Ratings-adjusted debt to EBITDA trending below 5.0x and
free operating cash flow (FOCF) to debt above 5%.
"We expect Pike's credit measures will improve over the next 12-24
months, supported by earning's growth. Despite the continued
inflationary pressures, Pike's adjusted EBITDA margins remained
relatively stable through 2023 benefiting from profitability mix of
its core services revenue and contribution from acquisitions. We
expect its top line and gross margin will grow at a more moderate
pace in the first half of 2024 given our expectation for lower
spending by utilities due to higher interest rates. However, the
increased outsourcing of distribution operations and utilities
investments in their regulated delivery systems to address grid
modernization drives long-term growth for Pike's business.
Additionally, about 90% of Pike's revenue is composed of system
maintenance and upgrades, which is recurring and cannot be deferred
for long periods. We expect the demand for outsourced core services
from its utility's customers and some higher-margin storm work will
enable the company to maintain adjusted EBITDA margins above its
industry peers in the high teens over the next few years. We
project its leverage will remain at about 5.0x through 2024 from
5.2x for the last twelve-months as of June 30, 2023. The company
has expressed its goal to use excess cash to lower its debt burden
which could accelerate improvement of its credit metrics.
"We project Pike will generate good FOCF over the next two years
and will have ample liquidity. Under our base case, we have assumed
about $50 million of working capital usage annually to account for
its intrayear working capital swings. While we believe Pike has a
relatively flexible cost structure, which allows it to flex down
its spending to preserve cash, we believe it can experience some
working capital swings as it completes the work depending on
project timing and mix. Pike's cash flows will likely benefit from
its relatively low capital intensity given its maintenance capital
expenditure (capex) requirements of about 1% of revenue. Our base
case reflects our expectation for no dividend distributions
following the change in ownership structure in 2022, which we
believe could support debt repayments. We project Pike will
generate about $96 million of reported FOCF in 2023 indicating
7%-8% of adjusted FOCF/debt.
"With about $184 million availability excluding letters of credit
under the revolver, Pike has ample liquidity to cover any potential
working capital swings. We expect Pike will address its revolver
maturity before it becomes current in July 2024.
"We expect Pike's scale of operations and leading position in
energy infrastructure services will allow it to capture positive
tailwinds. Pike is one of the largest providers of energy
infrastructure solutions in the U.S. Although at a smaller scale
compared to peers such as Quanta Services Inc., the company has
consistently grown at double digits over the past five years. Pike
revenues exceeded $2 billion in 2022, reflecting both organic
growth and contribution from acquisition of Burford's Construction,
which was completed in August 2022. This acquisition also enabled
Pike to expand its capabilities in vegetation management to
electric transmission and distribution utilities in Southern and
Midwestern U.S.
"We expect utilities will continue to spend on their capital
expansion projects to address future grid resiliency and changing
energy supply and distribution. Additionally, we expect increasing
demand for electricity will further increase capital expenditures
by utilities, despite some near term pressure from a higher funding
cost. We believe Pike's established position and favorable
reputation in its core service offering will likely enable it to
benefit from these tailwinds and sustain expanding revenue base."
In addition, Pike's ability to quickly relocate crews to
storm-affected areas and track record positions it favorably to
address customer's storm restoration, which has higher margin
compared to its core services. This work can strengthen its
customer relationships and provide opportunities to build new ones.
Nevertheless, this revenue stream can also be volatile due to the
unpredictable nature of weather-related events; thus, S&P has not
incorporated significant contribution from storm work (3% of
revenue in 2023).
The positive outlook on Pike reflects S&P's expectation that the
company will show healthy revenue growth and above average
operating margins that will support improving credit metrics with
S&P Global Ratings-adjusted debt to EBITDA trending below 5.0x and
FOCF to debt above 5%.
S&P could revise the rating outlook on Pike during the next 12
months if:
-- Its adjusted debt leverage remains above 5x on a sustained
basis; or
-- Its FOCF to adjusted debt declines below 5% range.
S&P could raise its rating on Pike if:
-- Its adjusted debt leverage declines to below 5.0x on a
sustained basis while its FOCF to adjusted debt remains above 5%.
This could occur if the company's EBITDA margin remains above 17%
and allocates excess cash flow for debt repayment; and
-- For an upgrade the company should address its revolver maturity
before it becomes current.
PIVOT3 INC: Public Sale Auction Set for December 15
---------------------------------------------------
Runway Growth Finance Corp. ("secured party") will conduct a public
sale that will take place on Dec. 15, 2023, at 12:00 p.m. (Pacific
Time) at the offices of Sidle Austin LLP, 1001 Page Mill Road,
Building 1, Palo Alto, California 94, for the sale of substantially
all assets of Pivot3 Inc., Pivot3 Holdings Inc., Nexgen Storage
Inc., PV3 (an Abc) LLC, and assignee in accordance with Section
9-610 of the New York UCC and other applicable law.
Runway Grown will hold a sale to enforce its rights as collateral
agent pursuant to that certain loan and security agreement dated as
of May 13, 2019. Pivot3, Holding and Nexgen ("loan parties")
granted the agent a security interest in the sale assets to secured
loans made pursuant to the loan agreement. Certain of the sale
assets were transferred to assignee subject to secured party's
security interest. The outstanding principal balance under the
loan agreement as of Oct. 19, 2023, is not less than
$23,582,368.83, plus accrued interest, fees and expenses.
Access by videoconference may be made available upon request.
Any inquiries regarding the sale of the sale assets must be
directed to Avisha Khubani at ak@runwaygrowth.com no later than
12:00 p.m. (Pacific Time) on Dec. 14, 2023.
Pivot3 Inc. develop and sell hyperconverged infrastructure and
video surveillance systems.
PRECISION CASTPARTS: Egan-Jones Retains B- Sr. Unsecured Ratings
----------------------------------------------------------------
Egan-Jones Ratings Company on October 12, 2023, maintained its 'B-'
foreign currency and local currency senior unsecured ratings on
debt issued by Precision Castparts Corp. EJR also withdraws rating
on commercial paper issued by the Company.
Headquartered in Portland, Oregon, Precision Castparts Corp
manufactures and sells metal components.
PREMIER KINGS: Case Summary & 40 Largest Unsecured Creditors
------------------------------------------------------------
Lead Debtor: Premier Kings, Inc.
7078 Peachtree Industrial Blvd., Suite 800
Peachtree Corners, GA 30071
Business Description: The Debtors are the owners and operators of
174 operating Burger King franchise
locations.
Chapter 11 Petition Date: October 25, 2023
Court: United States Bankruptcy Court
Northern District of Alabama
Three affiliates that concurrently filed voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code:
Debtor Case No.
------ --------
Premier Kings, Inc. 23-02871
Premier Kings of North Alabama, LLC 23-02873
Premier Kings of Georgia, Inc. 23-02874
Judge: Hon. Tamara O. Mitchell
Debtors'
Lead
Restructuring
Counsel: Gary H. Leibowitz, Esq.
Irving E. Walker, Esq.
H.C. Jones III, Esq.
J. Michael Pardoe, Esq.
COLE S CHOTZ PC
1201 Wills Street, Suite 320
Baltimore, MD 21231
Tel: (410) 230-0660
Fax: (410) 230-0667
Email: gleibowitz@coleschotz.com
iwalker@coleschotz.com
hjones@coleschotz.com
mpardoe@coleschotz.com
Debtors'
Local
Bankruptcy
Counsel: Jesse S. Vogtle, Jr., Esq.
Eric T. Ray
HOLLAND & KNIGHT LLP
1901 Sixth Avenue North, Suite 1400
Birmingham, Alabama 35203
Tel: (205) 226-5700
Fax: (205) 214-8787
Email: jesse.vogtle@hklaw.com
etray@hklaw.com
Debtors'
Investment
Banker: RAYMOND JAMES & ASSOCIATES, INC.
Debtors'
Noticing &
Claims
Agent: KURTZMAN CARSON CONSULTANTS LLC
Each Debtor's
Estimated Assets: $10 million to $50 million
Each Debtor's
Estimated Liabilities: $50 million to $100 million
The petitions were signed by Lawrence Hirsh as Board Chairman
(Restructuring & Sale Process Directors.
Full-text copies of the petitions are available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/K4RJQQA/Premier_Kings_Inc__alnbke-23-02871__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/LPNNJNQ/Premier_Kings_of_North_Alabama__alnbke-23-02873__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/ZUM2CFI/Premier_Kings_of_Georgia_Inc__alnbke-23-02874__0001.0.pdf?mcid=tGE4TAMA
Consolidated List of Debtors' 40 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
1. Burger King Corporation $4,627,651
5505 Blue Lagoon Dr
7th Floor
Miami, FL 33126
2. Rave Enterprises LLC $1,000,000
c/o Ashok Mehta
14125 Robert Paris Ct
Chantilly, VA 20151
3. Sicom Systems Inc $601,032
PO BOX 930157
Atlanta, GA 31193-0157
4. Hudson Construction Company $431,729
1425 Market Blvd
Suite 530 318
Roswell, GA 30076
5. Axis Construction LLC $415,000
125 Laser Court
Hauppauge, NY 11788
6. IPFS Corporation $315,317
PO Box 730223
Dallas, TX 75373-0223
7. Alex Salgueiro $222,286
10 Mall Court Suite A
Savannah, GA 31411
8. Franke Foodservice Systems $131,752
8007 Innovation Way
Chicago, IL 60682-0080
9. Brinks Incorporated $112,032
PO Box 101031
Atlanta, GA 30392
10. TK&K Unlimited Inc $72,913
8014 Cumming Hwy
Suite 403 332
Canton, GA 30115
11. E.S.S., Inc. $59,109
203 McMillin St
Nashville, TN 37203-2912
12. South Coast Enterprises LLC $49,608
14125 Robert Paris Ct
Chantilly, VA 30151
13. Kemco Facilities Services LLC $44,748
5750 Bell Circle
Montgomery, AL 36116
14. Hemphill Services Inc $41,762
PO Box 1234
Trussville, AL 35173
15. ARC CAFEUSA001 LLC $40,262
PO BOX 29650
Phoenix, AZ 85038-9650
16. Viking Cloud Inc. $28,853
PO Box 771994
Detroit, MI 48277
17. American Arbitration Association $21,750
13727 Noel Road
Suite 1025
Dallas, TX 75240
18. Parts Town $20,550
27787 Network Place
Chicago, IL 60673-1277
19. IPI Rincon $18,988
201 N Columbia Ave
Rincon, GA 31326
20. Jackson Thornton $17,350
PO Box 96200
Commerce St
Montgomery, AL 36101-0096
21. Ecolab Food Safety $17,271
PO Box 32027
New York, NY 10087
22. Marlin Outdoor Advertising $15,750
PO Drawer 6567
Hilton Head Island, SC 29938
23. Playland Maintenance Service Inc. $14,699
3935 Tamiami Trail
Cumming, GA 30041
24. Florida Logos Inc $13,660
3764 New Tampa Hwy
Lakeland, FL 33815
25. Traymore Properties LLC $13,117
co Jean Templeton
4012A Dunsmore Street
Huntsville, AL 35802
26. M D Homes Alabama LLC $12,695
Attn Mendel Bohm
PO Box 6415
East Brunswick, NJ 08816
27. Grant Realty Corporation $12,541
1982 Ashley Hall Rd
Charleston, SC 29407
28. ECOLAB Pest Elimination $12,144
26252 Network Place
Chicago, IL 60673-1262
29. 108 Charlton Street Realty $11,808
48 31 Van Dam Street
Long Island City, NY
11101
30. Chetan and Manisha Holdings LLC $11,316
PO Box 113
Colonia, NJ 07067
31. Hecht Family LP $11,040
co Teresa Oakland
607 Foothill Blvd Ste
1605
La Canada, VA 91011
32. Georgia Power $10,921
PO Box 105090
Atlanta, GA 30348
33. JP Premier Enterprises LLC $10,500
3300 Eastern Blvd
Montgomery, AL 36116
34. BK Collinsville LLC $10,350
4615 University Drive
Coral Gables, FL 33146
35. GAJ Realty Group Inc $10,000
8 Rosewood Drive
North Massapequa, NY
11758
36. A R T Investments LLC $9,921
9705 Collins Avenue
Suite 1602N
Ball Harbor, FL 33154
37. Genea Property LLC $9,442
3344 Peachtree Road NE
Unit 3205
Atlanta, GA 30326-4805
38. A Plus Maintenance & Remodeling $9,400
1446 Fairview Rd
Stockbridge, GA 30281
39. Pat DeSanti $9,258
PO Box 3377
Fresno, CA 9365
40. College Street Station LLC $8,991
7370 Hodgson Memorial
Drive Suite D10
Savannah, GA 31406
PROS HOLDINGS: Egan-Jones Retains CCC- Senior Unsecured Ratings
---------------------------------------------------------------
Egan-Jones Ratings Company on October 9, 2023, maintained its
'CCC-' foreign currency and local currency senior unsecured ratings
on debt issued by PROS Holdings, Inc. EJR also withdraws rating on
commercial paper issued by the Company.
Headquartered in Houston, Texas, PROS Holdings, Inc. operates as a
holding company.
PSG MORTGAGE: Seeks to Extend Plan Exclusivity to October 30
------------------------------------------------------------
PSG Mortgage Lending Corp. asks the U.S. Bankruptcy Court for the
Northern District of California to extend its exclusive periods
for filing a plan of reorganization and obtaining acceptances
thereof by approximately 60 days each, to October 30, 2023 and
December 29, 2023, respectively.
The Debtor explained that given the complexity of the transaction
terms involving a viable sale of its vacant residential real
property located at 224 Sea Cliff 26 Avenue, San Francisco, CA,
any premature effort at a plan proposal, prior to the completion
of the Debtor's finalization of proposed sale terms and related
negotiations with all secured creditors, could only result in
confusion, disruption and unnecessary expense.
The Debtor also pointed out that ending exclusivity would also
have a very disruptive impact on the proposed sale of the Sea
Cliff Avenue Property. The Debtor explained that the candor and
openness of negotiations with lienholders would be threatened,
and it would instead be compelled to focus its attention on
proposing and promoting its own plan without time for further
collaboration with the secured creditors. This would necessarily
obstruct the cooperative process intended in this case.
PSG Mortgage Lending Corp. is represented by:
Matthew D. Metzger, Esq.
BELVEDERE LEGAL, PC
1777 Borel Place, Suite 314
San Mateo, CA 94402
Tel: (415) 513-5980
Email: mmetzger@belvederelegal.com
About PSG Mortgage Lending Corp.
Irvine, Calif.-based PSG Mortgage Lending Corp. filed a petition
for Chapter 11 protection (Bankr. N.D. Calif. Case No. 21-30592)
on Aug. 25, 2021, listing as much as $50 million in both assets
and liabilities. Philip Fusco, chief executive officer of PSG,
signed the petition. Judge Dennis Montali oversees the case.
The Law Office of Julian Bach is the Debtor's legal counsel.
PUERTO RICO AQUEDUCT: Fitch Hikes Issuer Default Rating to 'CCC'
----------------------------------------------------------------
Fitch Ratings has upgraded Puerto Rico Aqueduct and Sewer
Authority's (PRASA) Issuer Default Rating (IDR) to 'CCC' from
'RD'.
Additionally, Fitch has affirmed the 'CCC' rating on the
authority's approximately $23.8 million revenue bonds, series A
(senior lien).
The Rating Outlook is Stable.
Entity/Debt Rating Prior
----------- ------ -----
Puerto Rico Aqueduct
& Sewer Authority
(PR) [General
Government] LT IDR CCC Upgrade RD
Puerto Rico
Aqueduct &
Sewer Authority
(PR) /Issuer
Default Rating –
General Government/
1 LT LT CCC Upgrade RD
Puerto Rico
Aqueduct & Sewer
Authority (PR)
/Water & Sewer
Revenues/1 LT LT CCC Affirmed CCC
The upgrade of the IDR to 'CCC' from 'RD' reflects the resolution
of PRASA's obligation related to certain Public Financing
Corporation (PFC) commonwealth appropriation bonds (the PFC
obligations). PRASA had previously failed to make timely payment on
the PFC obligations. These bonds were payable from appropriations,
and the legislature had not made the required appropriations.
However, non-payment on the PFC obligations was not considered an
event of default under the master agreement of trust (MAT) that
authorized the revenue bonds, series A so only the IDR reflected
the prior 'RD' rating. PRASA's obligation on the PFC obligations
has been formally extinguished through an approved qualifying
modification, driving the upgrade of the IDR.
While PRASA has reduced its forecast deficits as reflected in its
latest certified financial plan (CFP) dated May 20, 2023, Fitch
believes that default remains a real possibility.
PRASA's revenue defensibility and operating risk assessments,
assessed at 'bb' and 'bbb' respectively, support the financial
profile assessment of 'bb' (Fitch's lowest assessment level). The
financial profile is characterized by elevated leverage (measured
as net adjusted debt to adjusted funds available for debt service)
with a neutral liquidity profile. Leverage has been variable, but
generally declining, moving from 16.3x in fiscal 2016 (FYE June 30)
to 12.8x in fiscal 2021 (most recent available audited
information).
The revenue defensibility assessment reflects the system's
monopolistic service provision and flexibility to raise rates
within certain constraints but also considers weak service area
demographics and rates that are high for almost 60% of the service
area population. The operating risk profile is hampered by the
system's elevated investment needs and extremely weak capital
investment, even while considering the very low operating cost
burden based on volume of flows treated.
The 2023 CFP identifies significant financial needs over the next
several fiscal years (through fiscal 2028) to balance operations
and achieve the capital plan, although the identified gap has
narrowed from over $1.8 billion in the August 2018 revised
certified financial plan (the 2018 CFP) to the gap of approximately
$1.2 billion in the current CFP. This gap encompasses all
expenditure categories, including capital and required deposits.
Identified initiatives could address the gap in its entirety,
although not all actions are entirely within PRASA's control. In
the current CFP, actions identified to close the gap include
additional federal funding ($623.9 million), ongoing rate
adjustments ($327.3 million), and operating
improvements/expenditure reductions ($220.1 million).
Even if PRASA is able to achieve all the initiatives to address the
overall deficit included in the current CFP, Fitch expects leverage
to remain elevated in the context of the current business risk
profile. Assuming 100% execution of the capital plan, leverage may
rise to 18.0x over the next five years. The liquidity profile is
anticipated to remain neutral to the assessment.
SECURITY
The revenue bonds (senior lien) are secured by a gross lien of all
authority revenues related to PRASA's system, as defined in the
MAT, on parity with loans from federal lenders and senior to other
debt and expenses of PRASA.
KEY RATING DRIVERS
Revenue Defensibility - 'bb'
Monopolistic Service Provision; Weaker Service Area Demographics
Revenues are derived from PRASA's exclusive right to provide water
and sewer service to the island. PRASA's revised rate plan, enacted
for fiscal 2023, allows for annual increases between 2% and 5%
without external approval unless/until the cumulative rate increase
reaches 30%. The service area reflects weaker demographics, with a
median household income (MHI) that is 32% of the nation and an
unemployment rate that, while improving since 2016, was a still
weak 167% of the nation in 2022. Rates are unaffordable for about
58% of the service area population, assuming Fitch's standard
monthly usage of 7,500 gallons of water and 6,000 gallons of sewer.
Usage is reportedly significantly lower than Fitch's standard usage
metrics which alleviates some affordability pressure.
Operating Risk - 'bbb'
Very Low Operating Costs, Elevated Capital Needs
The system's operating cost burden is very low at approximately
$3,320 per million gallons (mg) of flows. Even when adjusting for
the system's high level of non-revenue water (estimated at nearly
65%), the operating cost burden is still very low.
Capital spending relative to depreciation has been weak, averaging
just 24% from fiscal 2017 through fiscal 2021, exacerbated in
recent years by weather events and the pandemic. Consequently, the
system's life cycle ratio has been rising, from 38% to 50% over the
same five-year period.
The current CFP outlines an approximate $6.5 billion capital
improvement plan (CIP) for fiscal 2023 through 2028. Approximately
80% of the CIP is focused on reconstruction and recovery,
compliance and mitigation and resiliency. Approximately 80% of
funding is anticipated to come from federal sources; operating
revenues and existing cash balances comprise the remainder.
Financial Profile - 'bb'
Elevated Leverage, Neutral Liquidity
System leverage remains high; historical leverage has trended
downward, approximating 12.7x in fiscal 2020 and 2021. Liquidity
has been improving and is neutral to the assessment, with current
cash on hand approximating 180 days and coverage of full
obligations of 1.6x (which does not account for all required
deposits under the MAT). PRASA has indicated it has made all
required deposits for fiscal 2023.
The FAST considers the potential trend of key ratios in a base case
and stress case over a five-year period. The stress case is
designed to impose capital costs 10% above expected base case
levels and evaluate potential variability in projected key ratios.
The FAST incorporates publicly available and/or management provided
information, primarily from the current CFP. Fitch incorporated
initiatives to address funding shortfalls as outlined in the
current CFP into the FAST.
In the base case, leverage is expected to increase to 17.2x in
fiscal 2025, then decline modestly to 16.0x in fiscal 2026. In the
stress case, the leverage is anticipated to rise to 18.0x by fiscal
2025, moderating to 16.9x in fiscal 2026. Should actions to close
the gap not be achieved, leverage could be materially higher.
Liquidity is expected to remain neutral to the assessment over the
five-year horizon.
Asymmetric Additional Risk Considerations
Information Quality: Audited financial results have been delayed
for a number of years. Although other public disclosures provide
transparency, the absence of recent audited financials is an
asymmetric risk consideration.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Expanding forecasted shortfalls in PRASA's financial
projections;
- Failure to meet obligations under the MAT.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Actual and projected leverage approximating 5.0x on a sustained
basis in Fitch's base and stress case, assuming stability in the
revenue defensibility and operating risk assessments;
- An upward revision in the operating risk assessment driven by
improved capital execution (relative to depreciation) and declining
life cycle ratio;
- Sustained improvement to the service area characteristics could
lead to an upward revision of the revenue defensibility
assessment.
PROFILE
PRASA provides water service to almost the entirety of the
commonwealth but provides sewer service to only around 60% of the
population. The service area population is approximately 3.3
million residents, and PRASA also serves a significant number of
annual visitors to the island. Due to the size and topography, the
island is divided into five service territories, each of which is
managed by an executive director.
PRASA operates a fragmented and largely localized supply of water
sources, treatment plants, and collection and delivery systems that
have been developed on a community level and with irregular funding
over the decades. Illustrating the complexity of system assets,
which is much greater than other comparable U.S. utilities of its
size, PRASA owns and operates over 110 water treatment plants, over
50 wastewater treatment plants, over 3,700 ancillary facilities
(i.e. storage tanks, pump stations and wells), eight regulated dams
and over 20,000 miles of pipelines.
System operations are subject to federal regulatory laws
administered by the U.S. Environmental Protection Agency (EPA) as
well as local statutes administered by various commonwealth
agencies. Infrastructure needs reflect the costs associated with
reconstruction and recovery costs associated with severe weather
events. Additionally, PRASA is subject to various compliance
requirements, including a 2015 consent decree and a 2006 drinking
water settlement agreement, which continue to influence capital
planning.
ESG CONSIDERATIONS
The ESG Relevance Score for Group Structure has been revised to '3'
from '4'. The revision reflects Fitch's view that the Oversight
Board lends transparency to the governance structure and limits the
influence of other governmental entities.
PRASA has an ESG Relevance Score of '4' for Water & Wastewater
Management due to the high level of non-revenue water that
significantly exceeds industry standards and presents challenges to
operations and financial performance, which has a negative impact
on the credit profile, and is relevant to the ratings in
conjunction with other factors.
PRASA has an ESG Relevance Score of '4' for Exposure to
Environmental Impacts given its exposure due to hurricane and
severe storms, which have affected operations and financial
performance, which has a negative impact on the credit profile, and
is relevant to the ratings in conjunction with other factors.
PRASA has an ESG Relevance Score of '4' for Access & Affordability
due to the high percentage of the service area population for whom
the month bill is unaffordable, which has a negative impact on the
credit profile, and is relevant to the ratings in conjunction with
other factors.
PRASA has an ESG Relevance Score of '4' for Financial Transparency
due to its delay in annual audited financial information, which has
a negative impact on the credit profile, and is relevant to the
ratings in conjunction with other factors.
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
R&J CLEANING: Peter Barrett Named Subchapter V Trustee
------------------------------------------------------
The Acting U.S. Trustee for Region 4 appointed Peter Barrett, Esq.,
at Kutak Rock, LLP as Subchapter V trustee for R&J Cleaning
Service, Inc.
Mr. Barrett will charge $480 per hour for his services as
Subchapter V trustee and will seek reimbursement for work-related
expenses incurred.
Mr. Barrett declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Peter J. Barrett, Esq.
Kutak Rock LLP
901 East Byrd St., Ste. 1000
Richmond, VA 23219
Phone: (804) 644-1700
Email: Peter.barrett@kutakrock.com
About R&J Cleaning
R&J Cleaning Service, Inc. filed Chapter 11 petition (Bankr. E.D.
Va. Case No. 23-33476) on Oct. 9, 2023, with $100,001 to $500,000
in assets and $500,001 to $1 million in liabilities.
David Spiro, Esq., at Spiro & Browne, PLC represents the Debtor as
legal counsel.
RAPID7 INC: Egan-Jones Retains CC Senior Unsecured Ratings
----------------------------------------------------------
Egan-Jones Ratings Company on October 10, 2023, maintained its 'CC'
foreign currency and local currency senior unsecured ratings on
debt issued by Rapid7, Inc. EJR also withdraws rating on commercial
paper issued by the Company.
Headquartered in Boston, Massachusetts, Rapid7, Inc. provides
security data and analytic software solutions.
REEF GLOBAL: Moody's Lowers CFR to B3, Placed on Further Review
---------------------------------------------------------------
Moody's Investors Service downgraded and placed under review for
further downgrade REEF Global Midco LLC's corporate family rating
and backed senior secured first lien bank credit facility ratings
to B3 from B1, and its probability of default rating to B3-PD from
B1-PD. Previously, the outlook was stable. The rating action
reflects deterioration in the company's operating and financial
metrics, weak liquidity, and reduced financial flexibility given
limited cushion relative to its interest coverage and minimum cash
balance covenants in its credit agreement.
The downgrade of REEF's ratings reflects deteriorating customer
retention in a mature and competitive business, a significant shift
in strategy that included the spin-off of a business that the
company previously expected to grow rapidly, and the consequent
impact of these factors on its financial metrics. At the end of the
second quarter of 2023, the company's debt to EBITDA for the last
twelve months was high at 7.6x, and EBITA/interest was weak at
0.3x, excluding the one-time restructuring-related adjustments.
Moody's changed the company's ESG credit impact score to CIS-5 from
CIS-4 due to the significant and sudden shift in business and
financial strategy. The likely deterioration of REEF's interest
coverage ratio relative to the covenant compliance requirement as
defined in the credit agreement is another meaningful governance
weakness.
The ratings were placed under review for further downgrade due to
the heightened risk of covenant breach (particularly the interest
coverage covenant), which would limit the company's future
financial flexibility. In addition, Moody's have limited visibility
on the company's liquidity because of the negative funds from
operation and a modest cash balance, while the company works to
turn around its operations.
RATINGS RATIONALE
REEF's B3 corporate family rating reflects its relatively small
size despite being a leading player in the mature parking industry,
high leverage, and weak coverage ratios in part due to the changing
operating strategy, weak liquidity, constrained financial
flexibility, and a concentrated ownership structure.
The company operates 3400 parking sites in the US and Canada,
primarily on a managed contract basis where the company receives a
fee for operating the facility and is reimbursed the expenses. REEF
also leases and operates some facilities, accounting for about 20%
of aggregate gross profit, and offers staffing services for a few
clients. The company's tenant retention rate was solid but has
declined in 2023 with new contract wins materially outweighed by
the contract losses, in part due to under-management of the
platform. Operating margins in the parking business are modest,
close to 10% after SG&A, and the largest 50 clients generate close
to 27% of gross profit.
Until earlier this year, REEF owned a ghost kitchen and local
logistics platform that the company expected to grow significantly.
The profitability in the segment was below expectations and the
company spun off that business earlier this year, and cancelled the
delayed draw term loan. Post restructuring, the company is a
parking-focused operation, with a new management team. The
ownership structure has also changed in the interim, with new
capital invested by existing and new shareholders.
REEF's ability to maintain covenant compliance, reverse the
negative cash flow trend, and execute an operational strategy that
will lead to good growth in income over the next 4-6 quarters would
be the primary factors considered in the resolution of the review.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
A ratings upgrade is unlikely given the direction of the review.
Inability to make progress on covenant compliance at current levels
or lack of improvement in operating trends and liquidity could
result in a downgrade.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
Headquartered in New York, REEF Global Midco LLC, provides a
comprehensive suite of parking service, parking management, and
ground transportation services. The company is a wholly owned
subsidiary of the parent entity, REEF Technology Inc., a privately
owned company. At the end of Q2 2023, REEF had total assets of $1.0
billion.
REPLICEL LIFE: Loses Arbitration Case Against Shiseido Co.
----------------------------------------------------------
RepliCel Life Sciences Inc. announced receipt of a final award
related to its ongoing arbitration proceedings with Shiseido Co.
Ltd. The Tribunal dismissed RepliCel's claims finding that
Shiseido validly terminated the Collaboration and Technology
Transfer Agreement dated effective as of July 9, 2013. Management
is currently considering the impact of the decision and assessing
its options.
About Replicel
RepliCel Life Sciences Inc. is a regenerative medicine company
focused on developing autologous cell therapies that treat
functional cellular deficits. The diseases currently being
addressed are chronic tendinosis, skin aging, and androgenetic
alopecia (pattern baldness).
Vancouver, Canada-based Mao & Ying LLP, the Company's auditor since
2022, issued a "going concern" qualification in its report dated
May 1, 2023, citing that the Company has accumulated losses of
$42,974,870 since its inception and incurred a loss of $743,288
during the year ended Dec. 31, 2022. These events or conditions,
along with other matters, indicate that a material uncertainty
exists that may cast substantial doubt about its ability to
continue as a going concern.
REVITALID PHARMA: Nov. 20 Combined Hearing on Disclosure & Plan
---------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware will hold a
combine hearing on Nov. 20, 2023, at 10:30 a.m. (Eastern Time) to
consider the adequacy of the disclosure statement explaining the
joint prepackaged Chapter 11 plan filed by Revitalid Pharmaceutical
Corp. and its debtor-affiliates, and confirm the Debtors' joint
prepackaged Chapter 11 plan. Objection to the approval of the
Debtors' disclosure statement and confirmation of their joint
prepackaged Chapter 11 plan, if any, must be filed no later than
4:00 p.m. (Eastern Time) on Nov. 20, 2023.
The deadline for submission of votes to accept or reject the
Debtors' joint prepackaged Chapter 11 plan will be Nov. 13, 2023,
at 5:00 p.m. (Eastern Time).
According to the Troubled Company Reporter on Oct. 20, 2023,
RevitaLid Pharmaceutical Corp., et al., filed with the U.S.
Bankruptcy Court for the District of Delaware a Disclosure
Statement for Joint Prepackaged Chapter 11 Plan dated Oct. 12,
2023.
The Debtors, together with their non-Debtor affiliates (the
"Company"), are a specialty pharmaceutical company focused on the
development and commercialization of products that target markets
with underserved patient populations in the ocular medicine and
medical aesthetics therapeutic areas.
In light of these challenges and difficulties with volatility in
the stock market (particularly with regard to pharmaceutical
stocks), and facing both interest payment and covenant defaults,
the Debtors and their advisors promptly initiated negotiations with
their stakeholders commenced negotiations with their stakeholders,
including the Secured Noteholders. Those negotiations resulted in
the Plan for which the Debtors filed these Chapter 11 Cases and
seek to implement. Upon consummation of the Plan, the Debtors'
business will continue as a going concern with a significantly
deleveraged capital structure.
The Plan implements a prepackaged restructuring agreed to among the
Debtors and the Debtors' major stakeholders, including the Secured
Noteholders and Holders of SPA Rejection Unsecured Claims. The
restructuring will result in the emergence of the Debtors as a
going concern (the "Reorganized Debtors") with a significantly
deleveraged capital structure.
The anticipated benefits of the prepackaged restructuring,
including the Plan, include, without limitation, the following:
* An equitization of approximately $80.1 million of the
Debtors' secured debt;
* Continuing as a going concern, preserving approximately 100
existing jobs, comprised of all full-time employees, independent
contractors, and temporary workers providing services to the
Debtors;
* Obtaining an infusion of approximately $25.0 million of new
money, comprised of $17.5 million of debtor in possession financing
and $7.5 million of committed exit financing;
* Assuming nearly all executory contracts and unexpired leases
of the Debtors, and continuing performance and payment thereunder
in the ordinary course;
* Paying in full or reinstating substantially all general
unsecured trade claims against the Debtors; and
* Prompt emergence of the Debtors from chapter 11.
The Plan provides for a comprehensive restructuring of the Debtors'
prepetition obligations, preserves the going-concern value of the
Debtors' businesses, maximizes all creditor recoveries, and
protects the jobs of the Debtors' invaluable employees, including
Management.
Class 4 consists of General Unsecured Claims. On the Effective
Date, each Holder of a General Unsecured Claim, as determined by
the Debtors or the Reorganized Debtors, as applicable, with the
consent of the DIP Lender and the Secured Noteholders, shall
receive: (i) Payment in full in Cash; (ii) Reinstatement of its
General Unsecured Claim; or (iii) such other treatment rendering
such General Unsecured Claim unimpaired in accordance with section
1124 of the Bankruptcy Code. This Class is unimpaired.
Class 5 consists of SPA Rejection Unsecured Claims. On the
Effective Date, each Holder of an Allowed SPA Rejection Unsecured
Claim will receive, pursuant to the Restructuring Transactions, its
Pro Rata share of the SPA Rejection Unsecured Claims Recovery,
subject to dilution by the Management Incentive Plan.
On the Effective Date, subject to the New Common Equity Election,
as specified in the Restructuring Transactions Exhibit, Allowed
Equity Interests shall either (x) be cancelled, released and
extinguished without further action of the Debtors, and shall have
no further force or effect or (y) be Reinstated.
The Reorganized Debtors shall use Cash on hand (including proceeds
of the DIP Facility) to fund distributions to certain holders of
Claims entitled to receive Cash.
On the Effective Date, the applicable Reorganized Debtors will
enter into the Exit Facility, the terms of which will be set forth
in the Exit Facility Documents, which shall be in form and
substance acceptable to the Debtors, the DIP Lender and the Secured
Noteholders.
A full-text copy of the Disclosure Statement dated October 12, 2023
is available at https://urlcurt.com/u?l=VnrNQu from
PacerMonitor.com at no charge.
About RevitaLid Pharmaceutical
RevitaLid Pharmaceutical Corp. is a specialty pharmaceutical
company focused on developing and commercializing eyecare and
medical aesthetics products.
The Debtor filed a Chapter 11 bankruptcy petition (Bankr. D. Del.
Lead Case No. 23-11704) on Oct. 12, 2023, with $100 million to $500
million in assets and liabilities. Brian Markison, chief executive
officer, signed the petitions.
RICHARDS, LAYTON & FINGER, P.A. and ROPES & GRAY LLP are the
Debtors' legal counsel.
REVLON INC: Egan-Jones Withdraws CC Senior Unsecured Ratings
------------------------------------------------------------
Egan-Jones Ratings Company on September 27, 2023, withdrew its 'CC'
foreign currency and local currency senior unsecured ratings on
debt issued by Revlon, Inc. EJR also withdrew its 'C' rating on
commercial paper issued by the Company.
Headquartered in New York, Revlon, Inc. manufactures, markets, and
sells beauty and personal care products.
RISING TIDE: S&P Raises ICR to 'CCC+', Outlook Negative
-------------------------------------------------------
S&P Global Ratings raised its issuer credit rating on U.S.-based
marine aftermarket retailer Rising Tide Holdings Inc. (d/b/a West
Marine) to 'CCC+' from 'SD' (selective default). S&P's outlook is
negative.
The 'CCC+' rating reflects S&P's view that continued operational
and management risks render the capital structure potentially
unsustainable.
The negative outlook reflects the risk that Rising Tide could face
default--selective or conventional--over the long term absent
sustained traction in operating performance amid a slowing economy,
operational uncertainty, and high management turnover.
S&P's ratings reflect Rising Tide's significantly reduced debt and
interest burden following the completed out-of-court
restructuring.
Rising Tide reduced its debt burden by more than $590 million, to
$177 million from nearly $770 million. This includes the exchange
of all 1A, 1B, and 2A term loan facilities for equity, equity
warrants, and additional funding rights. Moreover, the company
achieved new funding by reducing asset-backed lending revolver
borrowings and a new first-lien $137.5 million term loan. The new
term loan matures in 2028, providing time to execute turnaround
initiatives. In addition, the company has the option, for the first
18 months, of payment-in-kind (PIK) interest with pricing of SOFR
plus 100 basis points (bps) in cash and SOFR plus 700 bps in PIK.
Rising Tide could alternatively elect to pay interest in cash-only
at a rate of SOFR plus 600 bps if turnaround efforts rapidly
materialize. S&P expects the new capital structure to provide
significant interest savings and time for management and the
financial sponsors to improve performance.
S&P continues to view the capital structure as potentially
unsustainable over the long term because of expected performance
challenges in the near term, as well as weak credit metrics.
S&P said, "We project S&P Global Ratings-adjusted credit metrics to
remain elevated following the restructuring and still see
meaningful operational and financial risks. This includes S&P
Global Ratings-adjusted leverage of more than 6x and adjusted
interest coverage of less than 2x through the end of 2024. Rising
Tide's ability to generate significant sales growth and
profitability remain uncertain amid our expectation for weak
economic activity and persistent--though softening--inflation over
the next 12 months. Sluggish economic activity would likely reduce
consumer spending on boating products while persistent inflation
could cause customers to divert spending toward more essential
items. Moreover, we see heightened risks because of the business'
seasonality and relatively short window to generate meaningful
sales and cash flow, largely during the summer months when boating
increases."
Riding Tide's turnaround initiatives carry significant risk, and a
path to sustainable performance may remain elusive.
The out-of-court restructuring gives Rising Tide more than a year
to meaningfully improve sales, profitability, and cash flow. The
restructuring includes additional liquidity that we think will give
the strategic initiatives time to gain traction. That said,
significant management turnover over the last year heightens
uncertainty in the company's ability to execute on its operating
strategies. Sales and profitability have been weak over the last
two years, a trend we expect to continue over the near term. At the
same time, S&P Global Ratings-adjusted EBITDA margins were very
weak over the last two years, including 3.9% in 2021 and 3.2% last
year. S&P said, "(We expect adjusted margins of about 3% this
year.) While we project a meaningful rebound in sales and
profitability in our base case, we believe management's ability to
sustainably improve performance may be difficult as economic growth
and consumer confidence remains uncertain. We forecast minimal
reported free operating cash flow (FOCF) generation in our
base-case projections (flat in 2024) and believe a shortfall in
sales or EBITDA will increase the risk of continued liquidity
stress."
The negative outlook reflects the risk of a downgrade if sales
trends and profitability fail to stabilize, straining cash
generation and pressuring credit metrics, which could lead to a
default within the next 12 months.
S&P could lower its rating on Rising Tide if it envisions a
specific default scenario within the next 12 months. This could
occur if:
-- Sales declines persist;
-- Profitability remains in the low-single-digit percentage area;
and
-- Persistent negative FOCF and very weak S&P Global
Ratings-adjusted leverage.
S&P could raise its rating on Rising Tide if operating performance
improves meaningfully via sustained sales growth and profitability.
An upgrade would be predicated on:
-- Positive same-store sales and operating margin approaching
long-term average, leading to a rebound in EBITDA; and
-- Meaningful improvement in free cash flow generation that can
support the current capital structure.
This scenario would likely coincide with S&P Global
Ratings-adjusted leverage approaching 6x and interest coverage of
1x or more on a sustained basis.
RITE AID: Can Be Delisted by the New York Stock Exchange
--------------------------------------------------------
Cara Moffat of Bloomberg News reports that Rite Aid informed by the
NYSE that it is no longer in compliance with NYSE continued listing
standards.
Current noncompliance with the NYSE listing standards does not
affect Rite Aid's ongoing business operations or its U.S SEC
reporting requirements.
As previously disclosed, the Company has been engaged in reviewing
and continues to review strategic alternatives to recapitalize,
refinance or otherwise optimize its capital structure: statement.
About Rite Aid Corp.
Rite Aid -- http://www.riteaid.com-- is a full-service pharmacy
that improves health outcomes. Rite Aid is defining the modern
pharmacy by meeting customer needs with a wide range of vehicles
that offer convenience, including retail and delivery pharmacy, as
well as services offered through our wholly owned subsidiaries,
Elixir, Bartell Drugs and Health Dialog. Elixir, Rite Aid's
pharmacy benefits and services company, consists of accredited mail
and specialty pharmacies, prescription discount programs and an
industry leading adjudication platform to offer superior member
experience and cost savings. Health Dialog provides healthcare
coaching and disease management services via live online and phone
health services. Regional chain Bartell Drugs has supported the
health and wellness needs in the Seattle area for more than 130
years. Rite Aid employs more than 6,100 pharmacists and operates
more than 2,100 retail pharmacy locations across 17 states.
The Debtors sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D.N.J. Lead Case No. 23-18993) on Oct. 15,
2023. In the petition signed by Jeffrey S. Stein, chief executive
officer and chief restructuring officer, Rite Aid disclosed
$7,650,418,000 in total assets and $8,597,866,000 in total
liabilities.
Judge Michael B. Kaplan oversees the cases.
The Debtors tapped Kirkland & Ellis LLP and Kirkland & Ellis
International LLP as general bankruptcy counsel, Cole Schotz, P.C.,
as local bankruptcy counsel, Guggenheim Partners as investment
banker, Alvarez & Marsal North America, LLC as financial, tax and
restructuring advisor, and Kroll Restructuring Administration as
claims and noticing agent.
RITE AID: To Test MedImpact's $575MM Bid at Nov. 20 Auction
-----------------------------------------------------------
Rite Aid Corp. asked the U.S. Bankruptcy Court for the District of
New Jersey for authority to sell assets to MedImpact Healthcare
Systems, Inc. or to another buyer with a better offer.
The company received a cash offer of $575 million from MedImpact
following extensive marketing launched by its investment banker,
Guggenheim Securities, LLC, to sell the assets.
The assets consist of non-core pharmacy benefit manager business,
primarily owned by Rite Aid's affiliate, Hunter Lane LLC, and its
subsidiaries.
As part of the sale, MedImpact agreed to assume certain
liabilities, including "cure costs" in an amount not to exceed $1.4
million.
The assets will be put up for bidding to maximize their value,
according to Rite Aid's attorney, Michael Sirota, Esq., at Cole
Schotz, P.C.
The proposed bidding process, which is subject to court approval,
gives potential buyers until Nov. 16 to place their bids on the
assets.
MedImpact's $575 million offer will serve as the stalking horse bid
at the auction scheduled for Nov. 20. In the event it is not
selected as the winning bidder, MedImpact will receive a break-up
fee of $11.5 million and expense reimbursement of up to $8.625
million.
Judge Michael Kaplan is set to hold a hearing on Dec. 7 to consider
the sale of the assets to the winning bidder.
Rite Aid Retail Assets
Aside from the non-core pharmacy benefit manager business, Rite Aid
is also seeking approval to sell assets, which comprise the core
retail pharmacy business of the company and its affiliates.
The retail pharmacy business is the subject of the proposed
restructuring contemplated in the companies' Chapter 11
reorganization plan.
"The [companies] believe that the plan restructuring is the best
path forward to ensure the continued operation of their iconic
retail pharmacy business, to preserve the jobs of tens of thousands
of employees, and to maintain crucial relationships with
customers," Mr. Sirota said in court papers.
The companies also intend to put the retail assets up for bidding
to solicit "higher and better offers."
The bidding process set Nov. 30 as the deadline for submitting
bids; Dec. 4 as the date for the auction; and Nov. 20 as the
deadline for selecting a stalking horse bidder.
The hearing approving the sale to the winning bidder is scheduled
for Dec. 19.
About Rite Aid
Rite Aid -- http://www.riteaid.com-- is a full-service pharmacy
that improves health outcomes. Rite Aid is defining the modern
pharmacy by meeting customer needs with a wide range of vehicles
that offer convenience, including retail and delivery pharmacy, as
well as services offered through our wholly owned subsidiaries,
Elixir, Bartell Drugs and Health Dialog. Elixir, Rite Aid's
pharmacy benefits and services company, consists of accredited mail
and specialty pharmacies, prescription discount programs and an
industry leading adjudication platform to offer superior member
experience and cost savings. Health Dialog provides healthcare
coaching and disease management services via live online and phone
health services. Regional chain Bartell Drugs has supported the
health and wellness needs in the Seattle area for more than 130
years. Rite Aid employs more than 6,100 pharmacists and operates
more than 2,100 retail pharmacy locations across 17 states.
The Debtors sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D.N.J. Lead Case No. 23-18993) on October
15, 2023. In the petition signed by Jeffrey S. Stein, chief
executive officer and chief restructuring officer, Rite Aid
disclosed $7,650,418,000 in total assets and $8,597,866,000 in
total liabilities.
Judge Michael B. Kaplan oversees the cases.
The Debtors tapped Kirkland & Ellis LLP and Kirkland & Ellis
International LLP as general bankruptcy counsel, Cole Schotz, P.C.
as local bankruptcy counsel, Guggenheim Partners as investment
banker, Alvarez & Marsal North America, LLC as financial, tax and
restructuring advisor, and Kroll Restructuring Administration as
claims and noticing agent.
ROYAL CARIBBEAN: Egan-Jones Retains B- Senior Unsecured Ratings
---------------------------------------------------------------
Egan-Jones Ratings Company on October 12, 2023, maintained its 'B-'
foreign currency and local currency senior unsecured ratings on
debt issued by Royal Caribbean Cruises Ltd.
Headquartered in Miami, Florida, Royal Caribbean Cruises Ltd.
operates as a global cruise company operating a fleet of vessels in
the cruise vacation industries.
RWDY INC: Unsecured Creditors Will Get 100% of Claims in Plan
-------------------------------------------------------------
RWDY, Inc., filed with the U.S. Bankruptcy Court for the Western
District of Louisiana a Disclosure Statement in support of Plan of
Reorganization dated October 17, 2023.
The Debtor is in the business of providing consultant, management
and related services through employees and third parties.
In early March of 2020, overnight, the price of oil dropped from
$48 BBL to $29 BBL. All of this was exacerbated by COVID 19. The
final straw occurred when, in management's opinion, fraudulent
litigation was launched against RWDY Inc., which deployed
draconian, pre‐judgment seizure remedies that forced RWDY Inc.,
to seek relief under Chapter 11 of the Bankruptcy Code.
The Debtor entered into an agreement under which Seacoast Business
Funding, a Division of Seacoast National Bank, continues to
provide financing for the Debtor. The agreement was approved by a
final order of the Bankruptcy Court. The Bankruptcy Court's order
maintains the pre‐petition agreements with Seacoast Business
Funding in effect, along with the security interests, and liens of
Seacoast Business Funding.
The Plan separates Claims against the Debtor, the Estate and its
property into Unclassified Claims and Classified Claims.
Unclassified Claims are generally post‐petition Claims that must
be paid in full and which do not vote on the Plan, and may consist
of the following: (i) Allowed Administrative Claims; and (ii)
Allowed Priority Claims.
Class 8 shall consist of all other Allowed Unsecured Claims against
the Debtor not placed in any other class, and, without limiting the
foregoing, shall not include any Unsecured Claims of MCA Lenders
or any unsecured Claims of RWDY Distribution Trust Beneficiaries.
Creditors holding Allowed Class 8 General Unsecured Claims shall be
paid 100% of their Allowed Class 8 Claims. Each holder of an
Allowed Class 8 Claim shall be paid in full on or before the 5th
day of the first full calendar month after the Effective Date in
this Chapter 11 Case. The Class 8 General Unsecured Claims are
Impaired under the Plan.
Class 9 shall consist of the sole Equity Interest Holder, Kenneth
A. Lowery, who holds 100% of the issued and outstanding stock in
Debtor. The Class 9 Equity Interest Holder will retain all of the
issued and outstanding stock in Debtor. The Class 9 Equity Interest
Holder's vote will not count towards votes tabulated for purposes
of any possible cramdown under Section 1129(b). The Class 9 Equity
Interest Holder's Claim is Impaired under the Plan.
The Reorganized Debtor shall continue to operate its business
following the Effective Date. The Reorganized Debtor shall only be
required to timely fund and transfer to recipients authorized under
the proposed Plan the Debtor Distributions, Professional Fee
Claims, including, but not limited to, the Debtor's and
Reorganized Debtor's attorneys and other professionals, United
States Trustee quarterly fees incurred pursuant to Section
1930(a)(6) of the Bankruptcy Code, and the Monthly Distribution
Amounts required to be distributed to the RWDY Distribution Trust.
The Debtor has analyzed its anticipated future financial
performance and business operations, and believe that it will be
able to fund and pay all obligations required by the Plan,
including all future operational expenses, taxes and other ongoing
obligations.
A full-text copy of the Disclosure Statement dated October 17, 2023
is available at https://urlcurt.com/u?l=dDkVQE from
PacerMonitor.com at no charge.
Attorneys for the Debtor:
Robert W. Raley, Esq.
290 Benton Spur Road
Bossier City, LA 71111
Telephone: 318‐747‐2230
Email: bankruptcy@robertraleylaw.com
-and-
AYRES, SHELTON, WILLIAMS, BENSON & PAINE, LLC
Curtis R. Shelton, Esq.
Suite 1400, Regions Tower
333 Texas Street (71101)
P.O. Box 1764
Shreveport, LA 71166‐1764
Telephone: (318) 227‐3500
Facsimile: (318) 227‐3806
E‐mail: curtisshelton@awsw‐law.com
About RWDY Inc.
RWDY Inc. -- https://www.rwdyinc.com/ -- is an oil and energy
company based out of 1302 Dekort St, Copperas Cove, Texas.
RWDY filed a petition for relief under Chapter 11 of the Bankruptcy
Code (Bankr. W.D. La. Case No. 22-11308) on Dec. 21, 2022, with $10
million to $50 million in both assets and liabilities. Mark Allen,
manager, signed the petition.
Judge John S. Hodge oversees the case.
The Debtor tapped Robert W. Raley, Esq., at Ayres, Shelton,
Williams, Benson & Paine, LLC as legal counsel; Leland G. Horton,
Esq., at Bradley Murchison Kelly & Shea LLC as special counsel; and
Postlethwaite & Netterville, APAC as accountant.
RYAN LLC: Moody's Assigns 'B2' CFR & Rates New 1st Lien Loans 'B2'
------------------------------------------------------------------
Moody's Investors Service assigned to Ryan, LLC a B2 corporate
family rating and a B2-PD probability of default rating. Moody's
also assigned a B2 rating to Ryan's proposed senior secured first
lien credit facilities. The outlook is stable. Ryan provides tax
services and software.
The proceeds of the proposed $225 million revolver expiring 2028,
$950 million term loan maturing 2030 and $190 million delayed draw
term loan maturing 2030 will be used to refinance existing
indebtedness, add cash to the balance sheet, fund future
acquisitions and pay transaction-related fees and expenses. The
company expects to use about $95 million of cash to fund two
acquisitions for which it has submitted letters of intent to
purchase. The delayed draw term loan is available to fund
additional acquisitions.
Moody's anticipates aggressive financial strategies, notably
through the use of debt proceeds to complete multiple acquisitions
over the next several years. As such, governance considerations
were a key driver of the assigned ratings.
RATINGS RATIONALE
The B2 CFR reflects Ryan's short history of operating at its
currently-approaching $1 billion revenue size, its narrow service
offering and its aggressive financial strategies, including for
debt-funded acquisitions. The rating also reflects potential
revenue and earnings volatility due to the transactional nature of
Ryan's business model. According to the company, approximately 70%
of revenue is based on performance fees, and is the primary source
of revenue in Ryan's two largest segments: Transaction Tax and
Property Tax. Although Ryan operates outside North America, Moody's
anticipates that over 90% revenue will be derived in the US and
Canada. Although the company is larger than most competitors in the
corporate tax advisory services sector, it is modestly sized in
comparison to its key tax advisory competitors, notably the tax
departments of the "big four" accounting firms.
Moody's views favorably the company's relatively modest debt
levels, which result in credit metrics that are strong relative to
other services issuers also rated in the B2 category. Moody's
estimates debt to EBITDA, pro forma for recent and identified,
under letter of intent future acquisitions, of less than 5.0 times,
interest coverage as measured by EBITA to interest of roughly 2.0
times, and EBITDA margins approaching 20%. However, Moody's notes
that Ryan has not generated positive free cash flow in the last
three years due to acquisition related payments and expenses.
Moody's also expects that working capital and transaction costs
will continue to be a use of cash, reflecting Ryan's acquisition
growth strategy. These governance considerations weigh on the
rating profile.
The company's credit profile is enhanced by its strong position in
the specialty tax service industry, especially in the US, with a
diverse customer base that includes large, blue-chip companies that
service a variety of end markets. Moody's views positively Ryan's
size relative to other specialized corporate tax service providers,
which allows the company to provide comprehensive
multi-jurisdictional tax, litigation, and other related services
for clients. Moreover, Moody expects that the industry will
continue to grow as more companies move towards outsourcing tax
services as the required expertise can be significant and complex
stemming from changes in tax codes and regulatory requirements.
However, Ryan's growth will likely involve the pursuit of further
acquisitions, which entails on-going integration risk and
increasing use of debt.
The B2 ratings assigned to Ryan's proposed senior secured first
lien credit facilities are the same as the B2 CFR, reflecting the
predominance of the credit facilities in Ryan's debt capital
structure.
Moody's considers Ryan's liquidity profile as good, reflecting the
large and fully available proposed $225 million revolver. After
closing of the proposed facilities, Moody's expects the company
will have approximately $125 million of cash. Moody's expects that
acquisitions under letter of intent will be funded with most of
Ryan's pro forma cash balance. Moody's anticipates that the company
will generate about $50 million of free cash flow before
transaction-related uses in 2024. However, working capital
volatility associated with the uncertain timing of receipt of
performance-based fees could lead to negative cash flow in one or
more fiscal quarters. Fees and expenses associated with
acquisitions could reduce the amount of free cash flow available
for debt repayment and other uses. The term loans require 1.0%
annual principal amortization, or $9.5 million a year, paid
quarterly, assuming that the delayed draw term loan is not drawn.
There are no financial covenants applicable to the term loans.
Access to the revolver is conditioned upon compliance with a
maximum senior secured first lien net leverage ratio (to be defined
in the facility agreement) when revolver drawings exceed 37.5% of
the total revolver amount, or $84.375 million. Moody's anticipates
that Ryan would be well within compliance if the covenant is tested
over the next 12 to 15 months.
Marketing terms for the new credit facilities (final terms may
differ materially) include the following: incremental pari passu
debt capacity up to the greater of closing date adjusted EBITDA and
100% of pro forma adjusted LTM EBITDA, plus unused amounts under
the general debt basket and general restricted payments basket,
plus unlimited amounts subject to a first lien net leverage ratio
threshold to be agreed (or leverage neutral incurrence). There is
an inside maturity sublimit up to the greater of 100% of closing
date EBITDA and 100% of adjusted LTM EBITDA, along with any
incremental amounts incurred under ratio capacities. There are no
"blocker" provisions which prohibit the transfer of specified
assets to unrestricted subsidiaries. There are no protective
provisions restricting an up-tiering transaction.
The stable outlook reflects Moody's expectation that Ryan will
expand its revenue base both organically and through acquisitions,
while maintaining debt to EBITDA below 5.0 times, EBITDA less
capital expenditures to interest expense around 2.0 times and
substantial available liquidity to bridge revenue lumpiness due to
the timing of performance-based fee revenue. Moody's anticipates
acquisitions will be funded primarily through incremental debt.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if Moody's expects: 1) sustained
organic revenue growth and free cash flow; 2) a lower proportion of
success-fees to total revenue, evidencing greater revenue
predictability; 3) debt to EBITDA will be maintained below 4.0
times; 4) EBITDA less capital expenditures to interest expense will
stay solidly above 2.0 times; and 5) Ryan will maintain a good
liquidity profile.
The ratings could be downgraded if Moody's anticipates: 1) revenue
growth will slow or profitability rates will contract, evidencing a
loss of market share or growth in competition; 2) debt to EBITDA
will be sustained above 5.0 times; 3) EBITDA less capital
expenditures to interest expense will remain below 1.5 times; or 4)
liquidity deteriorates.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
Ryan, LLC, headquartered in Dallas, TX and controlled by management
and affiliates of financial sponsors Onex Partners and Ares Private
Equity Group, is a global provider of tax services and software
with its largest tax practice located in the United States. Moody's
expects 2024 revenue of over $1.0 billion.
RYAN LLC: S&P Assigns 'B+' Issuer Credit Rating, Outlook Stable
---------------------------------------------------------------
S&P Global Ratings assigned its 'B+' issuer credit rating to
Dallas-based tax services provider Ryan LLC.
At the same time, S&P assigned its 'B+' issue-level and '3'
recovery ratings to the company's proposed first-lien debt
instruments. The recovery rating indicates its expectation for
meaningful (50%-70%; rounded estimate: 55%) recovery in the event
of a default.
The stable outlook reflects S&P's expectation for ongoing organic
revenue growth in the mid- to high-single-digit percent area and
modest profit margin expansion over the next 12 to 24 months.
S&P's rating reflects Ryan's decades-long operating tenure and
track record of maintaining relatively consistent profitability,
offset by a competitive landscape with larger, well-capitalized
players. The company serves a diverse base of over 7,000 clients
including about 76% of Fortune 500 across 12 practice lines and has
demonstrated a good retention rate of about 95% over the past five
years. Ryan is the largest pure-play tax service provider in a
competitive and highly fragmented industry. The company competes
with larger multi-service entities, including accounting and
auditing firms that have larger tax services departments. However,
regulatory limitations applicable to large auditing companies with
tax service offerings limit the competitive threat to Ryan's
business.
The company generates about 70% of its revenue through
performance-based fees, and its value proposition is based on
utilizing its expertise to minimize clients' tax obligations. This
allows it to charge a premium relative to competitors while
maintaining a high customer retention rate, which S&P views
favorably. Ryan also benefits from a variable cost structure, with
its greatest expense item, labor, aligned with business
performance. This enables stable profitability and may provide some
cushion during a downturn.
Solid industry tailwinds and acquisitive growth strategy should
drive double-digit revenue growth during our forecasted period. S&P
said, "We expect the company to generate mid- to high-single-digit
percent organic growth resulting from industry expansion supported
by constantly changing regulations across numerous jurisdictions
and under-resourced internal corporate teams with lack of tax
expertise. Our organic growth estimate also assumes some market
share gains through competitive wins. Ryan has executed numerous
acquisitions in the past, which have enabled expanding scale and
scope of its services. The company's partnership with private
equity sponsor Onex since 2018 has allowed it to develop a playbook
for identifying, executing, and integrating acquisitions. Ryan
completed 12 acquisitions in 2022 and we expect an ongoing
acquisitive cadence. Our base-case forecast assumes the company
will fully utilize its delayed-draw term loan to fund acquisitions
in 2024 and 2025. We have contemplated a series of debt-funded
acquisitions that enable accelerated double-digit percent revenue
growth with limited EBITDA margin expansion and cash flow
generation."
S&P said, "We think the nascent stages of its software offerings
presents execution risk, but should improve its competitive
standing if it can successfully scale these practice lines.
Currently, its software-driven practice lines (Tax.com and Tax
Technology) represent less than 5% of total revenue, which are
currently unprofitable due to significant investments. In 2022,
private-equity firm Ares Management acquired a 28% stake in the
company. We believe this partnership enables better technology
expertise that could accelerate its growth and path to
profitability, perhaps through tech-based acquisitions. As the
company scales its technology offerings and improves profitability
in these practice lines over the next several years, the
consolidated entity should see modest margin enhancement. However,
we note that building up its tax software capabilities will be
challenging, especially with the advent of generative AI and
machine learning driving rapid changes in technology."
High-growth-related working capital needs limits cash flow. Since
about 70% of revenue is generated from performance-based fees, a
significant lag between the time the company recognizes revenue and
when it can collect fees from clients exists, leading to long
collection cycles, reflected in its accounts-receivable days
(including unbilled receivables) of 195 as of fiscal year-end Dec.
31, 2022. This presents a cash flow risk, as the company's revenue
growth typically drives working capital investments that limit cash
conversion. S&P said, "However, its receivables turnover metrics
have steadily improved over the past few years, and we anticipate
ongoing modest declines in receivable days. Our forecast for
double-digit annual revenue growth leads to working capital needs
of over $50 million annually in 2024 and 2025. A slowdown in
collections could weaken its cash flow metrics and lead to greater
reliance on revolver borrowings. Nevertheless, we think unwinding
working capital can provide a cash flow cushion during
revenue-driven performance downturns, somewhat offsetting liquidity
risk."
S&P said, "We believe management is committed to its financial
policy and maintaining leverage within its target range. Ryan's
financial policy is supportive of the current rating, and we view
its leverage profile and ability to generate cash flow favorably
compared to 'B' rated, financial sponsor-owned peers. We believe
the founder CEO's (Brint Ryan) controlling position somewhat
offsets the leveraging risk that is typical of financial
sponsor-owned issuers. The company intends to maintain management
calculated leverage in the 3.75x-4.5x area, with the possibility of
increasing to about 5x temporarily to accommodate acquisitions. S&P
Global Ratings-adjusted leverage is typically about 1x higher after
adjusting debt and EBITDA for lease liabilities, earnout
obligations, and capitalized software development costs. Based on
the company's financial policy and its track record of maintaining
a less highly leveraged capital structure (S&P Global
Ratings-adjusted leverage was in the mid-4x area in 2021 and 2022),
we do not expect the company to increase leverage materially beyond
5.5x on a sustained basis.
"Our base case assumes about $100 million of tuck-in acquisitions
annually at a 7x EBITDA multiple, about in line with its historical
transactions. We expect leverage in the mid-5x area in 2023 (about
5x after accounting for EBITDA contributions from its intended
acquisitions), gradually improving to the high-4x and mid-4x area
in 2024 and 2025, respectively.
"The stable outlook reflects our expectation for mid- to
high-single-digit organic revenue growth and modest profit margin
expansion enabling some deleveraging below 5x over the next 12 to
24 months. We anticipate an ongoing financial policy that favors
accretive acquisitions over debt-funded dividends, though we think
temporary increases in leverage above 5x are likely in the future
as the company pursues strategic transaction opportunities.
"ESG factors are an overall neutral consideration in our credit
analysis of Ryan. While governance is typically a moderately
negative consideration for rated entities owned by private-equity
sponsors, we believe the CEO's controlling position offsets some of
the governance risks that are characteristic of sponsor-owned
companies. For example, we do not anticipate a focus on maximizing
shareholder returns in the shorter term that prioritizes the
interest of controlling owners over other stakeholders."
S2P ACQUISITION: Moody's Cuts 1st Lien Loans to B3, Outlook Stable
------------------------------------------------------------------
Moody's Investors Service affirmed S2P Acquisition Borrower, Inc.'s
(dba "Jaggaer") ratings, including the B3 Corporate Family Rating
and B3-PD Probability of Default Rating. Concurrently, Moody's
downgraded ratings on the company's senior secured first lien
credit facilities comprising of $690 million term loan and $80
million revolving credit facility to B3 from B2. The outlook is
maintained at stable.
The downgrade of Jaggaer's senior secured first lien credit
facilities rating reflects the debt's relative size of the capital
structure following the repayment of the senior secured second lien
notes.
RATINGS RATIONALE
Jaggaer's B3 CFR reflects its high financial leverage and small
size compared to some larger and often better capitalized
competitors. For the twelve months ended June 30, 2023, leverage is
relatively high with Moody's adjusted debt/EBITDA of approximately
mid 6x (including adjustments for certain one-time expenses,
operating lease adjustment, and the treatment of capitalized
software as an expense). However, Moody's expects Jaggaer's free
cash flow to debt to be above 2% over the next 12 months, a level
that supports the current rating level. The demand for Jaggaer's
solutions will be partially offset by macroeconomic weakness,
particularly in Europe, which can cause companies to delay
additional IT spending in the near-term.
Jaggaer operates in a highly fragmented and competitive market for
enterprise spend management software solutions, which will likely
drive the need for the company to continue investing in new product
capabilities or add these capabilities through debt funded
acquisitions. Though Jaggaer has established market positions as a
provider of full suite spend management software, the company is
much smaller than its chief competitors such as SAP SE (Ariba),
Oracle Corporation, and Coupa. The competitive field is still
fragmented, likely leading to further consolidation. Moody's
expects the industry to grow in the long-term as customers embrace
the software platforms to reduce costs through greater deployments
of business process automation in their back-office functions.
Jaggaer benefits from its highly visible revenue base with
approximately 86% of the company's LTM June 2023 revenues recurring
in nature. The company has experienced consistent growth in its
revenue which has allowed it to delever since the LBO by Cinven in
August 2019, when leverage was over 9x. Jaggaer maintains over 90%
gross recurring revenue retention reflecting the multi-year tenor
of customer contracts as well as the benefits provided to customers
which include expense savings and time efficiencies. The company's
recent growth emphasizes the importance of its solutions amid
supply chain disruptions, changing regulatory landscape, and
growing corporate and compliance reporting challenges.
Moody's expects Jaggaer to maintain good liquidity supported by $44
million of unrestricted cash as of June 2023 and projected free
cash flow to debt of above 2% over the next 12 months. This
provides good coverage of required annual term loan amortization
and limited capital investments. Jaggaer also maintains an undrawn
$80 million revolving credit facility expiring in August 2026.
Liquidity benefits from interest rate hedges on a portion of the
company's first lien term loan debt. Moody's expect the company to
remain in compliance with its springing maximum first lien leverage
set at 8x, which applies to the revolver only when the outstanding
amount exceeds 35% of the commitment.
The stable outlook reflects Moody's expectation that Jaggaer will
grow revenue in the mid-single digit percentage and reduce leverage
toward 6x over the next 12-18 months.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be downgraded if Jaggaer's debt/EBITDA leverage
(Moody's adjusted) exceeds 8x, liquidity deteriorates or free cash
flow to debt falls below 1%, or long-term organic revenue growth or
profitability decline. The ratings could be upgraded if Jaggaer's
leverage is expected to remain below 6x and free cash flow to debt
expands to more than 5%.
Based in Morrisville, NC, Jaggaer is a leading provider of
eProcurement and eSourcing software solutions with over 1,500
customers and a vast supplier network in over 60 countries. As of
June 30, 2023 the company generated $286 million of trailing twelve
months revenue. Jaggaer is majority owned by funds affiliated with
Cinven.
The principal methodology used in these ratings was Software
published in June 2022.
SANDY HOOK INVESTMENTS: Wins Cash Collateral Access Thru Nov 22
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Florida,
Fort Lauderdale Division, authorized Sandy Hook Investments, LLC to
use cash collateral in accordance with the budget, with a 10%
variance, through November 22, 2023.
As previously reported by the Troubled Company Reporter, at the
time of the filing of the Motion, there were four individual
mortgages including a provision for Assignment of Leases and Rents
at Section 1.3, encumbering Debtor's properties, specifically as
follows:
a. 7614 NW 68th Way, Tamarac, FL 33321: Mortgage in favor of
Velocity Commercial Capital, LLC dated August 31, 2021, and
recorded on September 7, 2021, having Instrument Number 117563658,
in the Official Records of Broward County, Florida;
b. 7515 NW 41st Street, Coral Springs, FL 33065: Mortgage in favor
of Velocity Commercial Capital, LLC dated August 31, 2021, and
recorded on September 7, 2021, having Instrument Number 117563702,
in the Official Records of Broward County, Florida;
c. 433 NW Desoto Street, Lake City, FL 32055: Mortgage in favor of
Velocity Commercial Capital, LLC dated August 31, 2021, and
recorded on September 8, 2021, having Instrument Number
202112018026, at Book 1446, Page 1897, in the Official Records of
Columbia County, Florida;
d. 6600 Saint Jude Drive, Fairburn, GA 30213: Deed to Secure Debt,
Security Agreement and Assignment of Rents and Leases in favor of
Velocity Commercial Capital, LLC dated December 22, 2021, and
recorded on December 28, 2021 at Deed Book 65042, Page 24, in the
Fulton County, Georgia records.
All of the properties are rented and generate approximately $12,300
a month in rental income.
A continued hearing on the matter is set for November 2 at 1:30
p.m.
A copy of the order is available at https://urlcurt.com/u?l=HgWYqx
from PacerMonitor.com.
About Sandy Hook Investments, LLC
Sandy Hook Investments, LLC owns four real properties in Florida
having a total value of $1.05 million.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Fla. Case No. 23-18071) on October 2,
2023. In the petition signed by Cecelia Gail Ramos, managing
member, the Debtor disclosed $1,071,009 in assets and $804,000 in
liabilities.
Judge Peter D. Russin oversees the case.
Adam I. Skolnik, Esq., at Law Office of Adam I. Skolnik, PA,
represents the Debtor as legal counsel.
SEVEN KITCHEN: Wins Cash Collateral Access on Final Basis
---------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Texas, Fort
Worth Division, authorized Seven Kitchen & Cocktails, LLC to use
cash collateral on a final basis in accordance with the budget,
with a 10% variance.
The Debtor requires the use of cash collateral to continue its
ordinary course of business operations and to maintain the value of
its bankruptcy estate.
The Debtor's Secured Lenders are Blue Vine, Inc./Celtic Bank;
Everest Business Funding; Global Capital (East Hudson); Liquidibee
1, LLC; and Square Financial Services.
The court said the Debtor's use of cash collateral will be limited
to payment of the following post-petition expenses of operating the
business, including actual amounts due for rent, utilities,
management fee, payroll and related taxes, supplies, entertainment,
marketing/advertising, security and related operating expenses.
As adequate protection, the Secured Lenders are granted valid,
binding, enforceable and perfected liens co-extensive with the
Secured Lender's pre-petition liens in all currently owned or
hereafter acquired property and assets of the Debtor.
A copy of the court's order and the Debtor's budget is available at
https://urlcurt.com/u?l=I9OexM from PacerMonitor.com.
The Debtor projects $134,650 in total expenses for one month.
About Seven Kitchen & Cocktails, LLC
Seven Kitchen & Cocktails, LLC sought protection under Chapter 11
of the U.S. Bankruptcy Code (Bankr. N.D. Tex. Case No. 23-42714-11)
on September 8, 2023. In the petition signed by Cedric Powell,
managing power, the Debtor disclosed up to $50,000 in assets and up
to $500,000 in liabilities.
Marilyn D. Garner, Esq., at Law Office Of Marilyn D. Garner,
represents the Debtor as legal counsel.
SIRIUS XM: Egan-Jones Retains BB+ Senior Unsecured Ratings
----------------------------------------------------------
Egan-Jones Ratings Company on October 12, 2023, maintained its
'BB+' foreign currency and local currency senior unsecured ratings
on debt issued by Sirius XM Holdings Inc.
Headquartered in New York, Sirius XM Holdings Inc. broadcasts
various channels of audio from its satellites.
SORRENTO THERAPEUTICS: Unsecureds Will Get 56.9% of Claims in Plan
------------------------------------------------------------------
Sorrento Therapeutics, Inc., and Scintilla Pharmaceuticals, Inc.,
filed with the U.S. Bankruptcy Court for the Southern District of
Texas a Disclosure Statement for Joint Plan of Liquidation dated
October 17, 2023.
STI is a Delaware corporation and the ultimate parent entity of
Debtor Scintilla Pharmaceuticals, Inc. STI was founded in 2006 by
Dr. Henry H. Ji (its Chairman and CEO) as the San Diego Antibody
Company.
As of the Petition Date, the Debtors' assets consisted of, among
other things, equity interests in various majority and minority
owned subsidiaries (including Scilex, which was the Debtors' most
significant asset at the time), equipment, intellectual property,
cash and contingent litigation claims against the Nant Parties.
As of the Petition Date, the Debtors did not have any funded debt
obligations but had approximately $235 million in general unsecured
debt—primarily consisting of approximately $60 million in trade
payables and approximately $175 million on account of the Nant
Award.
The Debtors were subsequently preparing to close the Oramed Sale,
however, Oramed did not believe all closing conditions were or
would be satisfied (which the Debtors disputed). Following
negotiations between Oramed, the Debtors, and Scilex, the parties
ultimately agreed that STI would sell to Scilex substantially all
of STI's equity interests in Scilex (including common stock,
preferred stock, and warrants), for aggregate consideration
consisting of: (i) $110 million (comprised of cash payments of $10
million (in the aggregate) and the assumption by Scilex of the
approximately $100 million Replacement DIP Credit Facility; (ii)
the assumption by Scilex of certain legal fees and expenses of STI
in the amount of approximately $12.25 million; and (iii) a credit
bid of all amounts owed to Scilex under the Junior DIP Credit
Facility (collectively, the "Scilex Sale"). The Bankruptcy Court
approved the Scilex Sale on September 12, 2023 (the "Scilex Sale
Order"). The Scilex Sale closed on September 21, 2023.
The Debtors seek to maximize the value of their remaining assets
for the benefit of their creditors and other stakeholders through
an orderly conclusion of their Chapter 11 Cases. As of the
effective date of the Plan, all of the Debtors' assets, including
all causes of action, will be transferred to a liquidating trust
administered by a trustee chosen by general unsecured creditors.
The liquidating trustee will monetize the Debtors' assets by
marketing assets for sale and pursuing the Debtors' causes of
action, with recoveries to pay claims and interests (once the
claims are paid in full in cash) of the Debtors' stakeholders, as
applicable.
Class 3 consists of General Unsecured Claims. Except to the extent
that a Holder of an Allowed General Unsecured Claim and the Debtors
agree to less favorable treatment on account of such Claim, each
Holder of an Allowed General Unsecured Claim shall receive, in full
and final satisfaction, settlement, release and discharge of, and
in exchange for, such Allowed General Unsecured Claim, on or as
soon as practicable after the Effective Date or when such
obligation becomes due in the ordinary course of business in
accordance with applicable law or the terms of any agreement that
governs such Allowed General Unsecured Claim, whichever is later,
its Pro Rata share of the Liquidation Trust Recovery. This Class
will receive a distribution of 56.9% of their allowed claims.
No property will be distributed to the Holders of Scintilla Equity
Interests. All Scintilla Equity Interests shall remain effective
and outstanding on the Effective Date for administrative
convenience and shall be owned and held by the same applicable
Entity that held and/or owned such Scintilla Equity Interests
immediately prior to the Effective Date.
On the Effective Date, the Sorrento Equity Interests will be
canceled without further notice to, approval of, or action by any
Entity. Each Holder of a Sorrento Equity Interest shall receive, in
full and final satisfaction, settlement, release and discharge of,
and in exchange for, such Sorrento Equity Interest, its Pro Rata
share of the Liquidation Trust Recovery (subject to, for the
avoidance of doubt, Allowed General Unsecured Claims being paid in
full in Cash).
The Debtors are continuing to evaluate and negotiate the potential
sale of their other assets, in one or more potential transactions.
The Debtors and their advisors continue to try to monetize, the
following assets (among others): RTX, Sofusa, Ovydso, and Levena
(the "Other Assets"). In particular, the Debtors have been engaged
in conversations with (i) a potential buyer about the sale of
Sofusa and (ii) Scilex and a related entity about the sale of RTX,
Ovydso, and Levena, in each case in exchange for cash and other
consideration. Any consideration received by the Debtors in
connection with the sale of such or other assets prior to the
Effective Date will be used to make distributions contemplated
under the Plan or otherwise transferred to the Liquidation Trust.
A full-text copy of the Disclosure Statement dated October 17, 2023
is available at https://urlcurt.com/u?l=NBJH8A from Stretto Inc.,
claims agent.
Counsel for the Debtors:
JACKSON WALKER LLP
Matthew D. Cavenaugh, Esq.
Kristhy M. Peguero, Esq.
Genevieve M. Graham, Esq.
1401 McKinney Street, Suite 1900
Houston, TX 77010
Telephone: (713) 752-4200
LATHAM & WATKINS LLP
Caroline A. Reckler, Esq.
Ebba Gebisa, Esq.
Jonathan C. Gordon, Esq.
330 North Wabash Avenue, Suite 2800
Chicago, IL 60611
Telephone: (312) 876-7700
– and –
Jeffrey E. Bjork, Esq.
Kimberly A. Posin, Esq.
Isaac J. Ashworth, Esq.
335 South Grand Avenue, Suite 100
Los Angeles, CA 90071
Telephone: (213) 485-1234
About Sorrento Therapeutics
Sorrento Therapeutics, Inc. - http://www.sorrentotherapeutics.com/
-- is a clinical and commercial stage biopharmaceutical company
developing new therapies to treat cancer, pain (non-opioid
treatments), autoimmune disease and COVID-19. Sorrento's
multimodal, multipronged approach to fighting cancer is made
possible by its extensive immuno-oncology platforms, including key
assets such as next-generation tyrosine kinase inhibitors ("TKIs"),
fully human antibodies ("G-MAB(TM) library"), immuno-cellular
therapies ("DAR-T(TM)"), antibody-drug conjugates ("ADCs"), and
oncolytic virus ("Seprehvec(TM)"). Sorrento is also developing
potential antiviral therapies and vaccines against coronaviruses,
including STI-1558, COVISHIELD(TM) and COVIDROPS(TM), COVI-MSCTM;
and diagnostic test solutions, including COVIMARK(TM).
Sorrento Therapeutics, Inc., and Scintilla Pharmaceuticals, Inc.,
sought Chapter 11 protection (Bankr. S.D. Tex. Lead Case No.
23-90085) on Feb. 13, 2023. Sorrento disclosed assets in excess of
$1 billion and liabilities of about $235 million as of Feb. 10,
2023.
Judge David R. Jones oversees the cases.
The Debtors tapped Latham & Watkins, LLP as bankruptcy counsel;
Jackson Walker, LLP as local counsel; Tran Singh, LLP as conflicts
counsel; and M3 Advisory Partners, LP as financial advisor. Mohsin
Y. Meghji, managing partner at M3, serves as the Debtors' chief
restructuring officer. Stretto Inc. is the claims, noticing and
solicitation agent.
Norton Rose Fulbright US, LLP and Milbank, LLP represent the
official committee of unsecured creditors appointed in the Debtors'
Chapter 11 cases.
On April 10, 2023, the U.S. Trustee for Region 7 appointed an
official committee to represent the Debtors' equity security
holders.
On April 10, 2023, the U.S. Trustee for Region 7 appointed an
official committee to represent the Debtors' equity security
holders. Glenn Agre Bergman & Fuentes, LLP and Greenberg Traurig,
LLP serve as the equity committee's bankruptcy counsel.
SOUTHERN DRILL: Seeks Cash Collateral Access
--------------------------------------------
Southern Drill Supply - Acquisition, LLC asks the U.S. Bankruptcy
Court for the Northern District of Florida, Pensacola Division, for
authority to use cash collateral and provide adequate protection to
Red Iron Acceptance, LLC.
Pre-petition, the Debtor obtained secured financing from Red Iron
for inventory pursuant to an Inventory Security Agreement dated
July 1, 2019. Pursuant to the terms of the Security Agreement, in
order to secure the obligations of the Debtor to Red Iron, the
Debtor granted Red Iron a security interest in substantially all
business assets of the Debtor. Red Iron is perfected by the filing
of a UCC-1 financing statement.
Pursuant to the proposed order Red Iron will be paid for any units
of Red Iron Financed Inventory sold by the Debtor, with any excess
proceeds to be available to the Debtor for the use in its ongoing
business operations. This is consistent with pre-petition
practices, and the Debtor has paid for several sold units of Red
Iron Financed Inventory in this manner since the Petition Date.
In addition, Red Iron is provided with a replacement lien to the
same extent and priority as its pre-petition lien.
A copy of the motion is available at https://urlcurt.com/u?l=H7HpH7
from PacerMonitor.com.
About Southern Drill Supply-Acquisition
Southern Drill Supply-Acquisition LLC is a professional and
commercial equipment and supplies merchant wholesaler.
Southern Drill Supply-Acquisition sought relief under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. N.D. Fla.Case No. 23-30452) on
July 3, 2023. In the petition filed by William Shearer, as
managing member, the Debtor reported assets between $100,000 and
$500,000 and liabilities between $1 million and $10 million.
Todd M. LaDouceur, Esq. and Todd M. LaDouceur, P.A., at Galloway
Law Firm, represent the Debtor as counsel.
SOUTHWESTERN ENERGY: Egan-Jones Retains B+ Sr. Unsecured Ratings
----------------------------------------------------------------
Egan-Jones Ratings Company on September 29, 2023, maintained its
'B+' foreign currency and local currency senior unsecured ratings
on debt issued by Southwestern Energy Company.
Headquartered in Houston, Texas, Southwestern Energy Company is an
independent energy company.
SPECIALTY DENTAL: Trustee Taps Precision Financial as Accountant
----------------------------------------------------------------
Michael G. Colvard, the Trustee for Specialty Dental Holdings, LLC
and its affiliates, seeks approval from the U.S. Bankruptcy Court
for the Western District of Texas to employ Precision Financial
Insights as accountant.
The firm will provide these services:
a. examination of Debtors' records; and
b. review and examine Debtors' financial records.
The firm has been tapped as an accountant by the Trustee as it has
experience in accounting processes and software utilized within
dental practices.
The firm will be paid at the rate of $250 per hour.
The firm will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Michael Edwards, a partner at Precision Financial Insights,
disclosed in a court filing that the firm is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
The firm can be reached at:
Michael Edwards
Precision Financial Insights
103 County Road 180, Unit 18,
Cedar Park, Texas 78641
Telephone: (630) 240-2667
About Specialty Dental Holdings
Specialty Dental Holdings, LLC filed Chapter 11 petition (Bankr.
W.D. Texas Case No. 23-10498) on July 10, 2023, with as much as
$50,000 in assets and $500,001 to $1 million in liabilities.
Judge Shad Robinson oversees the case.
Stephen W. Sather, Esq., at Barron & Newburger, PC is the Debtor's
legal counsel. Holland and Knight, LLP as special counsel.
ST. MARGARET'S HEALTH: Committee Hires Levenfeld as Counsel
-----------------------------------------------------------
The official committee of unsecured creditors of St. Margaret's
Health - Peru and its affiliates seeks approval from the U.S.
Bankruptcy Court for the Northern District of Illinois to employ
Levenfeld Pearlstein, LLC as counsel.
The firm's services include:
(a) advising the Committee on its duties;
(b) attending meetings and negotiating with debtor
representatives and other parties in interest, and advising and
consulting on the conduct of the Cases;
(c) taking appropriate action to protect and preserve assets,
including conducting an investigation of potential claims and
causes of action and litigating such claims and causes of action;
(d) preparing motions, applications, answers, orders,
objections, reports, papers, and other pleadings necessary to carry
out the Committee's duties;
(e) appearing before the Bankruptcy Court or other courts to
assert or protect the interests of unsecured creditors; and
(f) performing other legal services for the Committee that may
be necessary and proper in connection with these Cases.
The firm will be paid at these rates:
Elizabeth B. Vandesteeg, Partner $700 per hour
John R. O'Connor, Partner $625 per hour
Heidi M. Hockberger, Associate $530 per hour
Mark A. Young, Paralegal $395 per hour
The firm will be paid a retainer in the amount of $100,000.
The firm will also be reimbursed for reasonable out-of-pocket
expenses incurred.
John R. "Jack" O'Connor, Esq., a partner at Levenfeld Pearlstein,
LLC, disclosed in a court filing that the firm is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
The firm can be reached at:
John R. "Jack" O'Connor, Esq.
Elizabeth B. Vandesteeg, Esq.
Heidi M. Hockberger, Esq.
LEVENFELD PEARLSTEIN, LLC
120 S. Riverside Plaza, Suite 1800
Chicago, IL 60606
Tel: (312) 346-8380
Email: evandesteeg@lplegal.com
joconnor@lplegal.com
hhockberger@lplegal.com
About St. Margaret's Health – Peru
St. Margaret's Health-Peru and St. Margaret's Health-Spring Valley
are providers of healthcare services.
The Debtors filed Chapter 11 petitions (Bankr. N.D. Ill. Lead Case
No. 23-11641) on Aug. 31, 2023. At the time of the filing, the
Debtors reported $10 million to $50 million in both assets and
liabilities.
Judge David D. Cleary oversees the cases.
Howard L. Adelman, Esq., at Adelman & Gettleman, Ltd. serves as the
Debtors' legal counsel. Hinshaw & Culbertson LLP as special
counsel. Huron Consulting Services LLC as financial advisor. Epiq
Corporate Restructuring, LLC as its noticing, claims, and balloting
agent.
STRUCTURLAM MASS: Unsecureds Owed $99.8M to Recover 21.1% in Plan
-----------------------------------------------------------------
Structurlam Mass Timber U.S., Inc., et al., filed with the U.S.
Bankruptcy Court for the District of Delaware a Combined Disclosure
Statement and Chapter 11 Plan of Liquidation dated October 17,
2023.
The Debtors were a leading manufacturer of mass timber solutions
and ground protection solutions used in construction and industrial
markets.
Promptly following its prepetition retention, Miller Buckfire
launched a process for the purpose of soliciting offers for the
sale or recapitalization of the Company (the "Marketing Process").
On April 21, 2023, the Debtors and the Stalking Horse Bidder,
Mercer International Inc., entered into that certain Asset Purchase
Agreement (the "Stalking Horse Purchase Agreement").
After several rounds of bidding between the Stalking Horse Bidder
and Weyerhaeuser during the Auction, the Debtors determined that:
(i) that the highest and best value for the Debtors' Estates was
offered by the Stalking Horse Bidder in the amount of $83.5 million
USD, representing a cash bid of $81.1 million USD and breakup fee
and expense reimbursement credits totaling $2.4 million USD; (ii)
the Stalking Horse Bidder's bid was the winning bid at the Auction;
and (iii) Weyerhaeuser Company, with a bid in the amount of $80
million USD, would be designated as the backup bidder and its bid
to acquire substantially all assets of the Debtors related to their
United States operations was the "Back-Up Bid" under the Bidding
Procedures Order.
After the Sale Hearing on May 30, 2023, the Bankruptcy Court
subsequently entered the Sale Order approving the sale of
substantially all of the Debtors' assets to Purchaser. The Sale to
Purchaser closed on June 15, 2023.
The Combined Disclosure Statement and Plan is a liquidating chapter
11 plan. The Combined Disclosure Statement and Plan provides that
upon the Effective Date: (i) Liquidating Trust Assets will be
transferred to the Liquidating Trust; and (ii) after completing all
of their fiduciary obligations, the Debtors will be dissolved.
Thereafter, the Liquidating Trust Assets will be administered and
distributed as soon as practicable pursuant to the terms of the
Combined Disclosure Statement and Plan and the Liquidating Trust
Agreement.
The Liquidating Trust Assets shall be comprised of certain accounts
receivable, the Estate Causes of Action and the Trust Funding,
which amounts will be the source of Distributions to Holders of
Allowed Claims in any of Class 3A, Class 3B, and Class 3C or
Holders of Allowed Interests in Class 4 (to the extent applicable).
Class 3A consists of SMTU General Unsecured Claims. Each Holder of
an Allowed SMTU General Unsecured Claim shall receive such Holder's
Pro Rata share of the SMTU Beneficial Interest in the Liquidating
Trust and as beneficiary of the Liquidating Trust shall receive, on
a Distribution date, its Pro Rata share of net Cash derived from
the SMTU Beneficial Interest available for Distribution from the
Liquidating Trust on each such Distribution date as provided under
the Combined Disclosure Statement and Plan and Liquidating Trust
Agreement, as full and complete satisfaction of the Claims against
the Liquidating Trust.
The asserted aggregate amount of SMTU General Unsecured Claims is
approximately $99,780,470, based on the Debtors' Schedules and
Claims asserted against the Estates. This Class will receive a
distribution of 21.1% of their allowed claims. Class 3A is Impaired
and is entitled to vote to accept or reject the Combined Disclosure
Statement and Plan.
Class 3B consists of SLP General Unsecured Claims. Each Holder of
an Allowed SLP General Unsecured Claim shall receive such Holder's
Pro Rata share of the SLP Beneficial Interest in the Liquidating
Trust and as beneficiary of the Liquidating Trust shall receive, on
a Distribution date, its Pro Rata share of net Cash derived from
the SLP Beneficial Interest available for Distribution from the
Liquidating Trust on each such distribution date as provided under
the Combined Disclosure Statement and Plan and Liquidating Trust
Agreement, as full and complete satisfaction of the Claims against
the Liquidating Trust.
The asserted aggregate amount of SLP General Unsecured Claims is
approximately $80,687,555, based on the Debtors' Schedules and
Claims asserted against the Estates. This Class will receive a
distribution of 0% of their allowed claims. Class 3B is Impaired
and is entitled to vote to accept or reject the Combined Disclosure
Statement and Plan.
Class 3C consists of SMTC General Unsecured Claims. Each Holder of
an Allowed SMTC General Unsecured Claim shall receive such Holder's
Pro Rata share of the SMTC Beneficial Interest in the Liquidating
Trust and as beneficiary of the Liquidating Trust shall receive, on
a Distribution date, its Pro Rata share of net Cash derived from
the SMTC Beneficial Interest available for Distribution from the
Liquidating Trust on each such distribution date as provided under
the Combined Disclosure Statement and Plan and Liquidating Trust
Agreement, as full and complete satisfaction of the Claims against
the Liquidating Trust.
The asserted aggregate amount of SMTC General Unsecured Claims is
approximately $19,010,126, based on the Debtors' Schedules and
Claims asserted against the Estates. This Class will receive a
distribution of 21.2% of their allowed claims. Class 3C is Impaired
and is entitled to vote to accept or reject the Combined Disclosure
Statement and Plan.
Holders of Interests in Class 4 are Impaired under the Combined
Disclosure Statement and Plan. Holders of Equity Interests will
receive beneficial interests in the Liquidating Trust in exchange
for their ownership interests under the Combined Disclosure
Statement and Plan and shall receive any assets remaining in the
Liquidating Trust after all Allowed General Unsecured Claims in
Class 3B have been paid in full.
On the Effective Date, the Liquidating Trust will be established
pursuant to the Liquidating Trust Agreement, which will be filed
with the Bankruptcy Court in the Plan Supplement. Upon
establishment of the Liquidating Trust, all Liquidating Trust
Assets shall be deemed transferred to the Liquidating Trust without
any further action of any of the Debtors, or any employees,
officers, directors, members, partners, shareholders, agents,
advisors, or representatives of the Debtors.
The Liquidating Trust shall be established for the purpose of
liquidating the Liquidating Trust Assets, prosecuting any Estate
Causes of Action transferred to the Liquidating Trust to maximize
recoveries for the benefit of the Liquidating Trust's
beneficiaries, and making Distributions in accordance with the
Combined Disclosure Statement and Plan to the Liquidating Trust's
beneficiaries, with no objective to continue or engage in the
conduct of a trade or business.
A full-text copy of the Combined Disclosure Statement and Plan
dated October 17, 2023 is available at
https://urlcurt.com/u?l=HlGZ4m from Kurtzman Carson Consultants,
LLC, claims agent.
Counsel to Debtors:
CHIPMAN BROWN CICERO & COLE, LLP
William E. Chipman, Jr., Esq.
Robert A. Weber, Esq.
Mark L. Desgrosseillier, Esq.
Mark D. Olivere, Esq.
Hercules Plaza
1313 North Market Street, Suite 5400
Wilmington, Delaware 19801
Telephone: (302) 295-0191
Email: chipman@chipmanbrown.com
weber@chipmanbrown.com
desgross@chipmanbrown.com
olivere@chipmanbrown.com
About Structurlam Mass Timber U.S.
Structurlam Mass Timber U.S., Inc. -- http://structurlam.com/--
is a North American provider of mass timber solutions for
construction and industrial markets in Canada and the U.S.
Established in 1962, Structurlam is based in Penticton, British
Columbia and has mass timber production facilities in Canada and
the U.S.
After reaching a deal with Mercer International Inc. to sell assets
in British Columbia and Arkansas for US$60 million, Structurlam and
certain of its affiliates sought Chapter 11 protection (Bankr. D.
Del. Lead Case No. 23-10497) on April 21, 2023. The Debtors also
have sought recognition of the Chapter 11 proceedings in the
Supreme Court of British Columbia.
Structurlam Mass Timber estimated assets and debt of $100 million
to $500 million as of the bankruptcy filing.
Judge Craig T. Goldblatt oversees the Debtors' Chapter 11 cases.
The Debtors tapped Chipman Brown Cicero & Cole, LLP and Potter
Anderson Corroon, LLP as bankruptcy counsels; Paul Hastings, LLP as
special counsel; Gowling WLG as Canadian counsel; Alvarez & Marsal
Canada, Inc. as financial advisor; and Stifel, Nicolaus & Company,
Incorporated and Miller Buckfire & Co., LLC as investment bankers.
Kurtzman Carson Consultants, LLC is the claims and noticing agent
and administrative advisor.
The U.S. Trustee for Regions 3 and 9 appointed an official
committee of unsecured creditors in the Debtors' Chapter 11 cases.
The committee hired Buchalter, P.C. and Morris, Nichols, Arsht &
Tunnell, LLP as bankruptcy counsels; Goodmans, LLP as Canadian
counsel; and Dundon Advisers, LLC as financial advisor.
SUMMIT PACIFIC: S&P Assigns 'BB+' Rating on Hospital Revenue Bonds
------------------------------------------------------------------
S&P Global Ratings assigned its 'BB+' long-term rating to Grays
Harbor County Public Hospital District No. 1 (doing business as
Summit Pacific Medical Center or SPMC), Wash.'s anticipated $71.6
million series 2023 hospital revenue and revenue refunding bonds.
The outlook is stable.
"The rating reflects our view of SPMC's strong financial profile as
highlighted by its robust unrestricted reserves, growing revenue,
and favorable operating trends," said S&P Global Ratings credit
analyst Aamna Shah. "The rating also incorporates our view of
SPMC's vulnerable enterprise profile, underlined by its limited
business position in a very small primary service area
characterized by weak economic fundamentals," Ms. Shah added.
Proceeds from the series 2023 hospital revenue and revenue
refunding bonds will go toward SPMC's hospital expansion and
renovation project and the refinancing of its 2019 USDA Loan by
Dougherty, currently scheduled for a rate reset in 2024. Remaining
proceeds will go toward a debt service reserve fund and costs of
issuance.
SPMC is a critical access hospital that currently operates 10
acute-care beds and 10 emergency beds but is licensed to operate up
to 25 licensed beds.
T-MOBILE USA: Egan-Jones Retains B+ Senior Unsecured Ratings
------------------------------------------------------------
Egan-Jones Ratings Company on September 27, 2023, maintained its
'B+' foreign currency and local currency senior unsecured ratings
on debt issued by T-Mobile USA, Inc. EJR also withdraws rating on
commercial paper issued by the Company.
Headquartered in Bellevue, Washington, T-Mobile USA, Inc. provides
telecommunications services.
TEHUM CARE: Seeks Conditional Approval of Disclosure Statement
--------------------------------------------------------------
Tehum Care Services, Inc. and the Official Committee of Unsecured
Creditors submitted a Joint Emergency Motion for entry of an order
conditionally approving the adequacy of the disclosure Statement
and granting related relief
On May 22, 2023, the Court entered its Stipulation and Agreed Order
Regarding Appointment of a Mediator and Governing Related Mediation
Procedures (the "Mediation Order").
On August 21, 22, and 23, 2023, pursuant to the Mediation Order,
the Debtor and Committee attended a three-day mediation with the
Mediation Parties (as defined in the Mediation Order) before the
Honorable David R. Jones, United States Bankruptcy Judge for the
Southern District of Texas. As a result of the mediation, the
Debtor and Committee have reached a global settlement with the
Mediation Parties (the "Global Settlement"), the terms of which
are
incorporated into the Plan. The Movants chose to seek approval of
the Global Settlement via the Plan so that all provisions may be
put to a creditor vote and approved by the Court, after a full and
fair opportunity for parties in interest to review, object, and
cast their ballots for or against the Plan.
Establishing the following dates and deadlines with respect to
Confirmation, subject to modification as necessary (the
"Confirmation Timeline"):
Solicitation Deadline will be within 4 days of entry of the Order
conditionally approving the Disclosure Statement.
Publication Deadline for Combined Hearing Notice will be on October
23, 2023.
Deadline to File Plan Supplement will be 7 days prior to the
Objection Deadline.
Voting Deadline will be on December 22, 2023.
Objection Deadline will be on December 22, 2023.
Deadline to File Confirmation Brief and Reply to Objections will be
on January 2, 2024.
Deadline to File Voting Report will be on January 2, 2024.
Combined Hearing Date will be on the week of January 8, 2024.
The Plan incorporates the terms of the Global Settlement. Under the
Global Settlement, the Debtor will receive a total of $37 million
in cash, plus releases of certain claims made against the Debtor.
In exchange for the $37 million and release of claims, the Plan
provides releases in favor of the Released Parties listed in the
Plan.
The Disclosure Statement easily satisfies this "adequate
information" standard. Specifically, the Disclosure Statement
details the terms of the Global Settlement and discloses the issues
that were raised by the Committee and various creditor parties in
the months leading up to the three-day mediation. The Disclosure
Statement also contains the following categories of "adequate
information":
* Explanation of confirmation under chapter 11 of the Bankruptcy
Code.
* Voting instructions and explanation of the various options on
the Ballots.
* The Debtor's corporate history, structure, and business
overview, and prepetition capital structure.
* Events leading to the chapter 11 filing.
* Key events during the chapter 11 case.
* Detailed discussion of the Global Settlement, including the
terms of the Settlement Payments, as well as the specific parties
and the particular claims to be released under the Plan
* Summary of Claims filed against the Debtor.
* Summary of the Plan, including the treatment of Claims, the
Debtor and Third-Party Releases, Injunctions, Exculpations and
gatekeeping provisions.
* Summary of the Liquidation Trust and Personal Injury Trust,
including assets and claims administration process.
* Discussion of the various risk factors associated with
confirmation or denial of the Plan.
* Potential tax consequences associated with the Plan.
* The Committee and the Debtor's recommendations regarding the
Plan.
The Disclosure Statement complies with all aspects of section 1125
of the Bankruptcy Code and addresses the information set forth
above in a manner that provides adequate information to Holders of
Claims entitled to vote to accept or reject the Plan. Accordingly,
the Movants submit that the Disclosure Statement contains "adequate
information" and should be approved.
Counsel to the Debtor:
Jason S. Brookner, Esq.
Aaron M. Kaufman, Esq.
Lydia R. Webb, Esq.
Amber M. Carson, Esq.
GRAY REED
1300 Post Oak Boulevard, Suite 2000
Houston, Texas 77056
Telephone: (713) 986-7127
Facsimile: (713) 986-5966
Email: jbrookner@grayreed.com
akaufman@grayreed.com
lwebb@grayreed.com
acarson@grayreed.com
-and-
Counsel to the Committee:
Nicholas Zluticky, Esq.
Zachary Hemenway, Esq.
STINSON
1201 Walnut, Suite 2900
Kansas City, MO 64106
Telephone: (816) 842-8600
Email: nicholas.zluticky@stinson.com
zachary.hemenway@stinson.com
About Tehum Care Services
Tehum Care Services Inc., doing business as Corizon Health Services
Inc., is a privately held prison healthcare contractor in the
United States. It is based in Brentwood, Tenn.
Tehum Care Services filed a petition for relief under Chapter 11 of
the Bankruptcy Code (Bankr. S.D. Texas Case No. 23-90086) on Feb.
13, 2023. In the petition filed by Russell A. Perry, as chief
restructuring officer, the Debtor reported assets between $1
million and $10 million and liabilities between $10 million and $50
million.
Judge Christopher M. Lopez oversees the case.
The Debtor tapped Gray Reed & McGraw, LLP as bankruptcy counsel;
Bradley Arant Boult Cummings, LLP, as special litigation counsel;
and Ankura Consulting Group, LLC, as financial advisor. Russell A.
Perry, senior managing director at Ankura, serves as the Debtor's
chief restructuring officer. Kurtzman Carson Consultants, LLC, is
the claims, noticing and solicitation agent.
The U.S. Trustee for Region 7 appointed an official committee to
represent unsecured creditors in the Debtor's Chapter 11 case.
Stinson, LLP and Dundon Advisers, LLC, serve as the committee's
legal counsel and financial advisor, respectively.
TEHUM CARE: Updates Personal & Non-Personal Injury Claims Pay
-------------------------------------------------------------
Tehum Care Services, Inc., and its Official Committee of Unsecured
Creditors submitted a First Amended Disclosure Statement regarding
First Amended Joint Chapter 11 Plan dated October 17, 2023.
The primary source of payment to be made under the proposed Plan
will come from a $37 million settlement payment, which resulted
from a three-day mediation.
The three-day mediation focused on the Estate's potential lawsuits
against the Debtor's parent company, other entities it owns or
controls, and certain of its directors and officers. These claims
primarily include avoidance actions belonging to the Debtor's
Estate, such as claims for fraudulent transfer associated with
transfers of funds from the Debtor's accounts, claims for
fraudulent transfer associated with the Debtor's restructuring,
including the divisional merger with CHS TX, Inc., and preference
claims involving transfers to Debtor-related entities prior to
bankruptcy.
These claims are collectively the Debtor's largest asset, and if
they were not resolved via settlement, the Debtor (and by
extension, all creditors) would not receive any recovery from
claims unless and until the Estate was successful in obtaining
judgments and collecting funds from liable parties. The decision to
settle these potential claims involved careful consideration of the
strengths and weaknesses of such claims, including potential
hurdles to their successful prosecution and ability to recover
judgments against the liable entities or individuals. Absent a
settlement, any funds the Debtor's Estate received via successful
lawsuits against these parties would be further reduced by the
legal costs associated with the suits, which would be paid with
Estate assets.
Under the settlement, the Debtor will receive a total of $37
million in cash, plus releases of certain claims made against the
Debtor, including a release of the obligation to repay a loan
totaling $2.75 million made to the Debtor during this bankruptcy
case, release of a lien on tax refund proceeds that was granted as
part of that loan, and a release of over $24 million in unsecured
claims that would otherwise dilute the pool of unsecured creditors.
In exchange for the $37 million in cash payments, the loan
forgiveness, and the release of claims, the Plan provides broad
releases in favor of certain insider and related parties, including
YesCare, CHS TX, Geneva Consulting, M2 LoanCo, Perigrove, and other
related entities and individuals.
The Debtor and the Committee firmly believe that the Global
Settlement maximizes the value of the Estate for the benefit of all
creditors and that, as a result, they have a duty to continue to
pursue its inclusion and incorporation in the Plan, and its
approval as part of the Plan confirmation process. As set forth in
this Disclosure Statement, the Global Settlement is an outcome that
provides significant value to the Estate, avoids the risks of
litigation of the claims among the parties, and eliminates years of
protracted litigation which, even if successful, would
significantly reduce any recovery by the costs of such litigation.
Accordingly, the Debtor and the Committee strongly believe the
settlement incorporated into the Plan meets the standard of
reasonableness under Fed. R. Bankr. P. 9019(a) and should be
approved.
Brief overview of the Plan's proposed treatment:
* There are over 350 Personal Injury Claims filed in the
Bankruptcy Case (including Claims filed by third party
co-defendants in Debtor-related personal injury actions who allege
they are entitled to indemnification by the Debtor). The face
amount of those claims is over $1 billion. However, the Debtor and
Committee anticipate that those claim amounts will be reduced as
the amounts of Allowed Claims are determined by the claims
administration process. Because only a small number of those Claims
have been liquidated by a court, the Debtor and Committee cannot
definitively estimate how long it will take to resolve all of those
claims; however, the claims administration process will likely take
12 months or significantly longer depending on the case. The Debtor
and the Committee estimate that Holders of Personal Injury Claims
could receive 18.1% to 37.7% of their Allowed Claims under the Plan
from the funds provided hereunder, the Debtor's insurance policies,
and recoveries from non-Debtor co-defendants or their insurers.
* There are approximately 175 Non-Personal Injury Claims filed
in the Bankruptcy Case. The face amount of those claims totals
approximately $139 million in Non-Personal Injury Claims. The
Debtor and Committee anticipate that those claim amounts will be
reduced by the claims administration process. The Debtor and the
Committee estimate that Holders of Non-Personal Injury Claims could
receive 19.9% to 35.3% of their Allowed Claims under the Plan,
depending on the final amounts allowed for such claims. The Debtor
and the Committee anticipate that the funds provided hereunder will
likely be the sole source of recovery for Holders of Non-Personal
Injury Claims.
On the Effective Date, the Liquidation Trust will be funded with
all assets of the of the Debtor or its Estate existing on the
Effective Date (including all Retained Causes of Action) that are
not Personal Injury Trust Assets, after giving effect to all
distributions required to be made as of or prior to the Effective
Date. The Debtor reserves and, as of the Effective Date, assigns to
the applicable Trust the Causes of Action identified in the Plan
Supplement as Retained Causes of Action. On and after the Effective
Date, the Liquidation Trustee and Personal Injury Trustee, as
appropriate may pursue Retained Causes of Action on behalf of and
for the benefit of the applicable Trust beneficiaries.
With respect to the Global Settlement, the Liquidation Trust will
receive (i) 77% of the Cash from the $25 million Initial Settlement
Payment after payment of Allowed Administrative Claims and Allowed
Priority Tax Claims and (ii) 50% of the Cash from each Installment
Settlement Payment. The Debtor and the Committee estimate that the
Liquidation Trust will receive between $14.7 million and $16.5
million of the $37 million Settlement Payment.
A copy of the First Amended Disclosure Statement dated October 17,
2023, is available at https://urlcurt.com/u?l=WS54hB from
www.kccllc.net, the claims agent.
Counsel to the Debtor:
Jason S. Brookner, Esq.
Micheal W. Bishop, Esq.
Aaron M. Kaufman, Esq.
Lydia R. Webb, Esq.
Amber M. Carson, Esq.
GRAY REED
1300 Post Oak Boulevard, Suite 2000
Houston, Texas 77056
Telephone: (713) 986-7127
Facsimile: (713) 986-5966
Email: jbrookner@grayreed.com
mbishop@grayreed.com
akaufman@grayreed.com
lwebb@grayreed.com
acarson@grayreed.com
Counsel to the Official Committee of Unsecured Creditors:
Nicholas Zluticky, Esq.
Zachary Hemenway, Esq.
STINSON
1201 Walnut, Suite 2900
Kansas City, MO 64106
Telephone: (816) 842-8600
Facsimile: (816) 691-3495
Email: nicholas.zluticky@stinson.com
zachary.hemenway@stinson.com
About Tehum Care Services
Tehum Care Services Inc., doing business as Corizon Health Services
Inc., is a privately held prison healthcare contractor in the
United States. It is based in Brentwood, Tenn.
Tehum Care Services filed a petition for relief under Chapter 11 of
the Bankruptcy Code (Bankr. S.D. Texas Case No. 23-90086) on Feb.
13, 2023. In the petition filed by Russell A. Perry, as chief
restructuring officer, the Debtor reported assets between $1
million and $10 million and liabilities between $10 million and $50
million.
Judge Christopher M. Lopez oversees the case.
The Debtor tapped Gray Reed & McGraw, LLP as bankruptcy counsel;
Bradley Arant Boult Cummings, LLP, as special litigation counsel;
and Ankura Consulting Group, LLC, as financial advisor. Russell A.
Perry, senior managing director at Ankura, serves as the Debtor's
chief restructuring officer. Kurtzman Carson Consultants, LLC, is
the claims, noticing and solicitation agent.
The U.S. Trustee for Region 7 appointed an official committee to
represent unsecured creditors in the Debtor's Chapter 11 case.
Stinson, LLP and Dundon Advisers, LLC, serve as the committee's
legal counsel and financial advisor, respectively.
TENET HEALTHCARE: Egan-Jones Retains B+ Senior Unsecured Ratings
----------------------------------------------------------------
Egan-Jones Ratings Company on September 27, 2023, maintained its
'B+' foreign currency and local currency senior unsecured ratings
on debt issued by Tenet Healthcare Corporation. EJR also withdraws
rating on commercial paper issued by the Company.
Headquartered in Dallas, Texas, Tenet Healthcare Corporation,
through its subsidiaries, owns or operates general hospitals and
related health care facilities serving communities in the United
States.
THAI KITCHEN: Seeks to Tap Mullin Hoard & Brown as Legal Counsel
----------------------------------------------------------------
Thai Kitchen, LLC seeks approval from the U.S. Bankruptcy Court for
the Northern District of Texas to employ Mullin Hoard & Brown, LLP
to handle its Chapter 11 case.
The hourly rates of the firm's counsel and staff are as follows:
Partners/Associates $225 - $400
Paralegals $155 - $185
Law Clerks $110
In addition, the firm will seek reimbursement for expenses
incurred.
The firm requested a retainer of $35,000.
Brad Odell, Esq., a partner at Mullin Hoard & Brown, 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:
Brad W. Odell, Esq.
Mullin Hoard & Brown, LLP
P.O. Box 2585
Lubbock, TX 79408
Telephone: (806) 765-7491
Facsimile: (806) 765-0553
Email: bodell@mhba.com
About Thai Kitchen
Thai Kitchen, LLC operates a Thai food restaurant in West Texas.
The Debtor filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. N.D. Texas Case No. 23-50184) on Oct. 2,
2023, with up to $50,000 in assets and up to $1 million in
liabilities. Frances Smith, Esq., at Ross, Smith & Binford, PC, has
been appointed as Subchapter V trustee.
Judge Robert L. Jones oversees the case.
Brad W. Odell, Esq., at Mullin Hoard & Brown, LLP represents the
Debtor as legal counsel.
TIEL TRUST I FBO: Voluntary Chapter 11 Case Summary
---------------------------------------------------
Debtor: Tiel Trust I FBO Paula T. Douglass
24200 Highway 82
Aspen CO 81611
Business Description: Business Trust
Chapter 11 Petition Date: October 24, 2023
Court: United States Bankruptcy Court
District of Colorado
Case No.: 23-14888
Judge: Hon. Thomas B. Mcnamara
Debtor's Counsel: Joseph Pack, Esq.
PACK LAW
51 NE 24th Street, Suite 108
Miami, FL 33143
Tel: 305-916-4500
Email: joe@packlaw.com
Estimated Assets: $10 million to $50 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Paula T. Douglass as co-trustee.
The Debtor failed to include in the petition a list of its 20
largest unsecured creditors.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/KAJ3FNA/Tiel_Trust_I_FBO_Paula_T_Douglass__cobke-23-14888__0001.0.pdf?mcid=tGE4TAMA
TONAWANDA COKE: Unsecureds to get Share of Unsecured Carveout
-------------------------------------------------------------
Tonawanda Coke Corporation submitted a Disclosure Statement for
Plan of Liquidation.
The Plan is a plan of liquidation. Funds distributed under the Plan
will consist of funds accumulated by TCC as of the Effective Date
and distributions from the Debtor's captive insurance carrier
Affinity Insurance Ltd. Distribution of the Debtor's assets
pursuant to the Plan are contingent on confirmation of the Plan and
the affirmative vote of one-impared class of claimants. The Plan
provides a release to and exculpation for TCC and other parties for
actions taken during the course of the bankruptcy case, and limits
the liability of TCC related parties and the Plan Administrator for
actions taken in carrying out the Plan.
All Allowed Administrative Claims, including the EPA Supplemental
Administrative Claim and the DOL Supplemental Administrative Claim
shall be paid in full.
The EPA Supplemental Administrative Claim equals 83.7% of the
amount remaining in the Debtor's Estate after payment of: (i) all
Allowed Administrative Claims, including Professional Fees, other
than said EPA Supplemental Administrative Claim and the DOL
Supplemental Administrative Claim, and (ii) the General Unsecured
Claim Initial Carveout.
The DOL Supplemental Administrative Claim equals 6.3% of the amount
remaining in the Debtor's Estate after payment of: (i) all Allowed
Administrative Claims, including Professional Fees, other than said
DOL Supplemental Administrative Claim and the EPA Supplemental
Administrative Claims, and (iii) the General Unsecured Claim
Initial Carveout.
All creditors holding Allowed Priority Claims will be paid in full
under the Plan. TCC is aware of approximately $5,156.86 in Allowed
Priority Claims.
TCC does not believe there are any secured claims to be paid under
the Plan.
General Unsecured Claims and Tort Claims shall each receive pro
rata distributions from the General Unsecured Claim Initial
Carveout of $200,000.00 and the General Unsecured Claim
Supplemental Carveout (10% of the of the amount remaining in the
Debtor's Estate after payment of: (i) all Allowed Administrative
Claims, including Professional Fees, other than DOL
Supplemental Administrative Claim and the EPA Supplemental
Administrative Claims, and (iii) the General Unsecured Claim
Initial Carveout).
After the shutdown of its coke ovens, the Debtor determined that a
liquidation of its real and personal property could maximize the
potential recovery for creditors. Accordingly, on or about April
2019, TCC filed and served a motion seeking authority to retain PPL
as auctioneer and for the Bankruptcy Court's approval to conduct an
auction sale of substantially all of its personal property. By
order dated May 22, 2019, the Court granted the motion and approved
an on-line auction sale of the Debtor's personal property.
PPL conducted an on-line auction of the Debtor's personal property
which began on July 18, 2019 and concluded on August 12, 2019. The
auction resulted in net proceeds payable to the Debtor in the
amount of $599,988.48.
The Debtor obtained Court approval for the retention of Blackbird
for the sale of its real property and certain fixtures based on a
July 30, 2019 Retention Auction Agreement. Blackbird marketed the
Debtor's parcels of real property and prepared for a public auction
of the following real property:
3705 River Road (64.12-1-14) – 3.01 acres
3783 River Road (64.12-1-17) – 5.09 acres
3800 River Road (64.12-4-3) – 25.99 acres
3875 River Road (64.08-1-10) – 102.42 acres
4008 River Road (64.08-1-2) - 0.13 acres
On August 16, 2019 the Court approved bid procedures for the sale
of the real property and scheduled an auction for September 23,
2019. The Auction was conducted by the Court, no competing bids
were submitted and Riverview Innovation and Technology Campus, Inc.
("Riverview") was selected as the winning bidder. Riverview's
consideration for the purchase of the properties was payment of
approximately $193,000.00 in back taxes and satisfaction of the
mortgages and security interest of Honeywell in the principal
amount of $8,080,303.00. Riveview also purchased certain fixtures
for $75,000.00. The Court approved the sale by order dated
September 23, 2019.
The Debtor and Creditors' Committee entered into a Stipulation and
Order dated September 18, 2020 to provide the Committee standing to
pursue certain causes of action against statutory insiders and
affiliates of the Debtor. On October 15, 2020 the Committee filed
an adversary proceeding against Tamroy, Inc., James Crane as
executor of the estate of James Donald Crane, Robert A. Bloom,
Michael K. Durkin and Paul A. Saffrin (collectively, the
"Defendants"). The Complaint sought the recovery of certain
purported avoidable transfers received by one or more of the
Defendants. The Committee and the Defendants settled the litigation
pursuant to a stipulation approved by the Court on July 12, 2022.
The Settlement required the Defendants to
make a payment of $200,000.00 to the Debtor's estate and waive
their claims pursuant to Section 502(h) of the Bankruptcy Code. The
settlement proceeds are held in trust by Debtor's counsel.
Under the Plan, Class 2 consists of General Unsecured Claims. Class
2 Claims are impaired and entitled to vote to accept or reject the
Plan. Class 2 consists of General Unsecured Claims including the
EPA General Unsecured Claim but excluding all Tort Claims. Each
holder of an Allowed General Unsecured Claim will receive a Pro
Rata distribution of (i) the General Unsecured Claim Initial
Carveout and (ii) the General Unsecured Claim Supplemental
Carveout, in each case, minus the amount of Cash set aside for the
Tort Claims Reserve (the "Non-Tort Claim Assets").
General Unsecured Claim Supplemental Carveout. If after payment of
all amounts contemplated under this Plan to be paid or reserved on
or immediately after the Effective Date, there is Available Cash,
the Class 2 Creditors holding Allowed General Unsecured Claims
shall receive a Pro Rata distribution of ten (10%) of such
additional Available Cash, if any, from the Plan Administrator.
The filed and scheduled Class 2 Claims total approximately $16
million.
Counsel to Tonawanda Coke Corporation:
James C. Thoman, Esq.
Jessica P. Chue, Esq.
HODGSON RUSS LLP
The Guaranty Building
140 Pearl Street, Suite 100
Buffalo, New York 14202
Telephone: (716) 856-4000
Facsimile: (716) 849-0349
Email: jthoman@hodgsonruss.com
jchue@hodgsonruss.com
A copy of the Disclosure Statement dated September 27, 2023, is
available at https://tinyurl.ph/pVeqA from PacerMonitor.com.
About Tonawanda Coke Corp
Tonawanda Coke Corporation -- http://www.tonawandacoke.com/-- is
an ISO 9001 Registered merchant producer of high-performance
foundry coke to the U.S. and Canadian foundry, and insulation and
sugar beet industries. The company was founded in 1917 and is
headquartered in Tonawanda, N.Y.
Tonawanda Coke Corporation filed a voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bankr. W.D.N.Y. Case No.
18-12156) on Oct. 15, 2018. In the petition signed by Michael K.
Durkin, president, the Debtor estimated $10 million to $50 million
in both assets and liabilities. The case is assigned to Judge
Michael J. Kaplan. Garry M. Graber, Esq., at Hodgson Russ LLP,
represents the Debtor.
The Office of the U.S. Trustee appointed a committee of unsecured
creditors in the Debtor's case on July 15, 2019. The committee is
represented by Baumeister Denz LLP.
TRIMONT ENERGY (GIB): Voluntary Chapter 11 Case Summary
-------------------------------------------------------
Debtor: Trimont Energy (GIB) LLC
920 Memorial City Way Ste 200
Houston, TX 77024
Business Description: The Debtor is part of the oil and gas
extraction industry.
Chapter 11 Petition Date: October 25, 2023
Court: United States Bankruptcy Court
Eastern District of Louisiana
Case No.: 23-11869
Judge: Hon. Meredith S Grabill
Debtor's Counsel: Douglas S. Draper, Esq.
HELLER, DRAPER & HORN, LLC
650 Poydras Street
Suite 2500
New Orleans, LA 70130
Tel: 504-299-3300
Email: ddraper@hellerdraper.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Christopher O. Ryals as chief
restructuring officer.
The Debtor failed to include in the petition a list of its 20
largest unsecured creditors.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/J54TYKI/Trimont_Energy_GIB_LLC__laebke-23-11869__0001.0.pdf?mcid=tGE4TAMA
TRIMONT ENERGY (NOW): Voluntary Chapter 11 Case Summary
-------------------------------------------------------
Debtor: Trimont Energy (NOW) LLC
920 Memorial CIty Way Ste 200
Houston, TX 77024
Business Description: The Debtor is part of the oil and gas
extraction industry.
Chapter 11 Petition Date: October 25, 2023
Court: United States Bankruptcy Court
Eastern District of Louisiana
Case No.: 23-11868
Judge: Hon. Meredith S. Grabill
Debtor's Counsel: Douglas S. Draper, Esq.
HELLER, DRAPER & HORN, LLC
650 Poydras Street
Suite 2500
New Orleans, LA 70130
Tel: 504-299-3300
Email: ddraper@hellerdraper.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Christopher O. Ryals as chief
restructuring officer.
The Debtor failed to include in the petition a list of its 20
largest unsecured creditors.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/JJSVN2Q/Trimont_Energy_NOW_LLC__laebke-23-11868__0001.0.pdf?mcid=tGE4TAMA
TW AUTOMATION: Court OKs Interim Cash Collateral Access
-------------------------------------------------------
The U.S. Bankruptcy Court for the District of Kansas, Kansas City
Division, authorized TW Automation, LC to use cash collateral on an
interim basis in accordance with the budget, with a 15% variance.
As of the Petition Date, the Debtor was indebted to the Small
Business Administration in the approximate amount of $500,000. SBA
asserts a security interest in the Debtor's assets, which include
chattel paper, accounts and general intangibles.
The Debtor is directed to make an adequate protection payment to
SBA of $2,450 on or before November 15, 2023 and by the 15th day of
each month thereafter until modified by agreement, a court order or
a confirmed Plan.
The court said whatever pre-petition liens SBA has in the debtor's
pre-petition property will be retained. SBA will be granted a
replacement lien in the Cash Collateral and inventory and such lien
will be in the same priority as SBA's lien in the debtor's
pre-petition bank accounts, accounts receivable and inventory.
A copy of the order is available at https://urlcurt.com/u?l=RStNjy
from PacerMonitor.com.
About TW Automation
TW Automation, LC., is an automation company in Lenexa, Kansas.
The Debtor filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. D. Kan. Case No. 23-21184) on October 5,
2023, with $320,183 in assets and $1,473,191 in liabilities. Jason
Luzar, member, signed the petition.
Judge Robert D. Berger oversees the case.
Erlene W. Krigel, Esq., at Krigel & Krigel, PC represents the
Debtor as legal counsel.
TW AUTOMATION: Seeks to Hire Krigel & Krigel P.C. as Counsel
------------------------------------------------------------
TW Automation, LLC seeks approval from the U.S. Bankruptcy Court
for the District of Kansas to employ Krigel & Krigel, P.C. as
counsel.
The firm will provide these services:
a. advise the Debtor with respect to its powers and duties in
the continued management and operation of its business;
b. attend meetings and negotiating with representatives of
creditors and other parties in interest;
c. take all necessary action to protect and preserve the
Debtor's estate, including the prosecution of actions on its
behalf, the defense of any actions commenced against the estate,
and objections to claims filed against the estate;
d. prepare legal papers;
e. negotiate and prosecute all contracts for the sale of the
Debtor's assets, plan of reorganization, and all related documents,
and taking any action that is necessary for the Debtor to obtain
confirmation of the plan;
f. appear before the court, the Subchapter V trustee and the
Office of the U.S. Trustee; and
g. perform all other necessary legal services for the Debtor.
The firm will be paid at these rates:
Attorneys $300 to $350 per hour
Paralegals $100 per hour
The firm will also receive reimbursement for out-of-pocket expenses
incurred.
Erlene Krigel, Esq., a partner at Krigel & Krigel, disclosed in a
court filing that the firm is a "disinterested person" as the term
is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Erlene W. Krigel, Esq.
KRIGEL & KRIGEL, P.C.
4520 Main Street, Suite 700
Kansas City, MO 64111
Tel: (816) 756-5800
Fax: (816) 756-1999
Email: ekrigel@krigelandkrigel.com
About TW Automation, LLC
TW Automation, LC., is an automation company in Lenexa, Kansas.
The Debtor filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. D. Kan. Case No. 23-21184) on October 5,
2023, with $320,183 in assets and $1,473,191 in liabilities. Jason
Luzar, member, signed the petition.
Judge Robert D. Berger oversees the case.
Erlene W. Krigel, Esq., at Krigel & Krigel, PC represents the
Debtor as legal counsel.
UNIFI INC: Egan-Jones Lowers Senior Unsecured Ratings to BB-
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Egan-Jones Ratings Company on September 27, 2023, downgraded the
foreign currency and local currency senior unsecured ratings on
debt issued by Unifi, Inc. to BB- from BB. EJR also withdraws
rating on commercial paper issued by the Company.
Headquartered in Greensboro, North Carolina, Unifi, Inc. textures
polyester and nylon filament fiber to produce polyester and nylon,
dyed, and spandex yarns covered with nylon and polyester.
UNITI GROUP: Fitch Affirms 'B+' LongTerm IDR, Outlook Stable
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Fitch Ratings has affirmed the Long-Term Issuer Default Rating
(IDR) of Uniti Group Inc. and the IDRs of Uniti Group L.P. and
Uniti Fiber Holdings at 'B+'. In addition, Fitch has affirmed the
senior secured debt of Uniti Group L.P. at 'BB+'/'RR1' and the
senior unsecured debt of Uniti Group L.P. and Uniti Fiber Holdings
at 'B'/'RR5'. Fitch has also assigned a 'B'/'RR5' rating to Uniti
Group Inc.'s 7.5% unsecured convertible notes due in 2027. The
Rating Outlook is Stable.
The ratings reflect Uniti's stable revenue and EBITDA profile due
to the contractual nature of its revenue stream, including the
long-term lease payments from Windstream Services. This is balanced
against the company's high tenant concentration, with approximately
two-thirds of its revenues derived from Windstream and negative
FCF.
KEY RATING DRIVERS
Revenue and Cash Flow Stability: In addition to the stable
long-term lease payments from Windstream, Uniti's ratings
incorporate expectations for growth in its non-Windstream leasing
business as well as in its fiber segment. Fitch expects Uniti to
derive approximately 34% of revenue outside of the Windstream
leases in 2023 via leases to other telecommunications entities and
through contracts providing fiber capacity to wireless carriers,
enterprise and wholesale carriers and government entities.
The master leases with Windstream produced approximately $669
million in cash revenue in 2022, and will grow slightly due to
escalators over time. Returns on Uniti's funding of growth capital
improvements (GCIs) are incremental to this amount. Fitch assumes
Windstream will continue to honor its leases until the lease
expires on April 30, 2030. However, there is a risk of a rent
reduction prior to expiry of the lease as Fitch estimates
Windstream's rent coverage (EBITDAR-net capex)/rents) is slightly
below 1x as of June 30, 2023.
Elevated Leverage: Fitch expects net leverage (net debt/recurring
operating EBITDA) to approximate 6.1x at YE 2023, up from 5.9x in
2022. The last time net leverage crossed above 6.0x was in 2019
reaching 6.4x due to the effect of acquisitions. The company
managed to reduce leverage in subsequent years through asset sales.
Absent any material asset sales, Fitch expects leverage to remain
in 6.1x-6.2x range over the rating horizon. Fitch does not include
the Windstream settlement obligation as debt. As of June 30, 2023,
the remaining obligation was approximately $225.7 million.
Solid Liquidity: Liquidity at June 30, 2023 was approximately $452
million, consisting of cash of approximately $38 million and
revolver availability of approximately $414 million. The company
recently extended the maturity of its $500 million revolving
facility to September 2027 from December 2024. There are no
significant maturities until 2027 except for approximately $123
million of exchangeable notes due in 2024.
Near-term FCF Pressured: Windstream's 2020 emergence from
bankruptcy materially reduced Uniti's risk and improves prospects
for the company. However, Uniti's funding needs increased to fund
Windstream's GCIs per the terms of their settlement agreement.
Fitch expects FCF to remain negative over the rating horizon due to
high capex and increased interest burden from recent refinancing
and future borrowing. Fitch also expects REIT interest coverage to
decline to or near 2.0x.
Uniti's revenue growth prospects benefit from the secular tailwinds
for data consumption and broadband connectivity, both wireline and
wireless. Fitch believes Uniti's FCF profile will improve
significantly starting in 2026/2027 as the company's obligations on
Windstream's settlement payments go away (the last payment is
expected in 3Q25) and GCI funding commitments gradually step down
to $125 million annually from the current $225 million p.a.
Following the inflection point in FCF trajectory, Fitch expects the
company to maintain a balanced approach in increasing dividends and
reducing leverage.
Tenant Concentration: Windstream's master leases provide
approximately 67% of Uniti's revenue. At the time of the spinoff,
nearly all revenue was from Windstream. Improved diversification
is a positive for the company's credit profile, as major customer
verticals outside of Windstream consist of large wireless carriers,
national cable operators, government agencies and education.
Leased Assets' Importance to Windstream: Uniti's master-leased
assets are essential to Windstream's operations, and this has been
validated by the approval of the settlement agreement. In certain
markets, Windstream is a "carrier of last resort" from a regulatory
perspective, and would require permission from state public utility
commissions and the Federal Communications Commission to cease
providing service in those markets.
Geographic Diversification: The company's geographic
diversification is solid, given Windstream's geographically
diverse operations and the expanded footprint due to acquisitions
since the spinoff.
Parent Subsidiary Linkage: Fitch equalizes the IDRs of Uniti Group
Inc. and Uniti Group Fiber, using a stronger subsidiary/weaker
parent approach, based on open legal ring-fencing and open access
and control. The IDRs of Uniti Group Inc. and Uniti Group L.P. are
the same as the parent is typically rated at the level of the
consolidated group profile, including its subsidiary.
DERIVATION SUMMARY
As the only fiber-based telecommunications REIT, Uniti (B+/Stable)
currently has no direct peers. Uniti is a telecom REIT formed
through the spinoff of a significant portion of Windstream's
fiber optic and copper assets. Windstream retained the electronics
necessary to continue as a telecommunication services provider.
Uniti's operations are geographically diverse, as they are spread
across more than 30 states, while the assets under the master lease
with Windstream provide adequate scale.
Other close comparable telecommunications REITs are tower
companies, including American Tower Corporation (BBB+/Negative),
Crown Castle International Corp. (BBB+/Stable) and SBA
Communications Corporation (not rated). These companies lease space
on towers and ground space to wireless carriers, and are a key part
of the wireless industry infrastructure.
However, the primary difference is tower companies operate on a
shared infrastructure basis with multiple tenants, whereas a
substantial portion of Uniti's revenues are derived on an exclusive
basis under sale-leaseback transactions. Uniti's leverage is higher
than that of American Tower or Crown Castle, but lower than that of
SBA.
Uniti's network is one of the largest independent fiber providers
in the U.S., along with Zayo Group Holdings, Inc. The business
models of Uniti and Zayo are unlike the wireline business of
communications services providers, including AT&T Inc.
(BBB+/Stable), Verizon Communications Inc. (A-/Stable) or Lumen
Technologies (B-/Negative). Uniti and Zayo are providers of
infrastructure, which may be used by communications service
providers to provide retail services, including wireless, voice,
data and internet.
Crown Castle is an increasingly large participant in the fiber
infrastructure business through a series of acquisitions. The large
communications services providers self-provision, and they may use
a fiber infrastructure provider to augment their networks.
Uniti's fiber acquisitions since the spinoff are a key credit
consideration, as they reduced the concentration of revenues and
EBITDA from the Windstream master leases. Customers in the fiber
business include wireless carriers, enterprises and governments.
Aspects of Uniti's credit profile are similar to cases in the
gaming industry where there are single-tenant or concentrated
leases between operating companies and their respective REITs
(propcos). Both Uniti and gaming REITs benefit from triple net
leases. Fitch believes the propcos are better positioned, as rents
may continue uninterrupted through the tenant's bankruptcy because
such rents are an operating expense and unlikely to be rejected,
absent a renegotiation of the master lease.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within the Rating Case for the Issuer:
- Revenue growth in the low single digits over its forecast from
2023 to 2026;
- EBITDA margins in the 78%-79% range over the forecast;
- 2023 net success-based capital spending near $400 million, in
line with company's public net success-based capex guidance for
fiber and leasing.
- Fitch has reflected the terms of the settlement agreement with
Windstream, including the settlement obligations and the funding of
certain Windstream growth capital improvements;
- Dividend growth in the low single digits over the forecast;
- Fitch expects gross leverage to be in the low to mid 6x range in
the absence of material asset sales over the forecast.
RECOVERY ANALYSIS
- The recovery analysis assumes that Uniti would be considered a
going concern in a bankruptcy and that the company would be
reorganized rather than liquidated. Fitch has assumed a 10%
administrative claim. The revolver is assumed to be fully drawn.
- The going-concern EBITDA estimate reflects Fitch's view of a
sustainable, post-reorganization EBITDA level, upon which Fitch
bases the valuation of the company. This leads to a
post-reorganization EBITDA estimate of $750 million. The reduced
EBITDA could come about by a rent reset at Windstream (with no
immediate EBITDA generating benefits received by Uniti in return
for the reduction) and/or weakness in other lines of business as
fiber contracts are renewed at lower levels.
- Post-reorganization valuation uses a 6.0x enterprise value (EV)
multiple. The 6.0x multiple reflects the high margin, large
contractual backlog of revenues, and high asset value of the fiber
networks. Fitch uses this multiple for fiber-based infrastructure
companies, for which there have been historical transaction
multiples in the high single digit range.
- The multiple is in line with the range for telecom companies
published in Fitch's Telecom, Media and Technology Bankruptcy
Enterprise Values and Creditor Recoveries report. The most recent
report indicates a median of 5.4x.
- Other communications infrastructure companies, such as tower
operators, trade at EV multiples near 20x. The tower companies have
lower asset risk and higher growth prospects leading to multiples
in excess of 20x. Tower operators have low churn as switching costs
are high for customers (to avoid service disruptions).
- The recovery analysis produces a Recovery Rating of 'RR1' for the
secured debt, reflecting strong recovery prospects; and 'RR5' for
the senior unsecured debt, reflecting the lower recovery prospects
of the unsecured debt, given its position in the capital
structure.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Fitch's expectation that net debt/recurring operating EBITDA is
sustained below 5.5x, and REIT interest coverage is 2.3x or
higher;
- Demonstrated access to the common equity market to fund GCI,
other investments or acquisitions.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Fitch's expectation that net debt/recurring operating EBITDA is
sustained above 6.5x or REIT interest coverage is 2.0x or lower;
- If Windstream's rent coverage approaches 1.2x, a negative rating
action could occur. Rent coverage is measured as EBITDAR-net
capex/rents; however, Fitch will also consider Uniti's level of
revenue and EBITDA diversification at that time. In determining
net capex, Windstream's gross capex would be reduced by GCI funded
by Uniti.
LIQUIDITY AND DEBT STRUCTURE
Improved Liquidity: As of June 30, 2023, Uniti had approximately
$452 million of liquidity comprised of unrestricted cash of
approximately $38 million and revolver availability of $414
million. In March 2023, Uniti amended its revolving facility
agreement to extend revolver maturity to September 2027 from
December 2024. The revolver maturity was extended in July 2023
following receipt of regulatory approvals.
The principal financial covenants in the company's credit agreement
require Uniti to maintain a consolidated secured leverage ratio of
no more than 5x. The company can incur other debt such that pro
forma consolidated total leverage is no more than 6.5x, and if such
debt is secured, as long as the consolidated secured leverage ratio
does not exceed 4x on a pro forma basis. If the company incurs debt
on the RCF, or otherwise, such that total leverage exceeds 6.5x,
the RCF will impose material restrictions on Uniti's ability to pay
dividends.
Maturities: There are no major maturities until 2027, except for
$123 million of senior unsecured exchangeable notes maturing in
2024.
Uniti established an at-the-market common stock offering program in
June 2020 that allows for the issuance of up to $250 million of
common equity to keep the capital structure in balance when funding
capex, as well as to finance small transactions.
REIT-required distributions reduce Uniti's FCF, although the
company has been able to reduce the dividend to relatively low
levels to maintain financial flexibility. Capital intensity varies
by business unit. In the leasing business, capital intensity is
virtually non-existent, as capex is the responsibility of the
tenant. Intensity is high in the Fiber segment, as the company is
in the process of completing Fiber projects.
ISSUER PROFILE
Uniti, which operates as a REIT, was formed through a spinoff from
Windstream Holdings, Inc. in April 2015. On a consolidated basis,
the company has $7.2 billion of revenue under contract, with around
8.5 years of contract term remaining.
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.
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
----------- ------ -------- -----
Uniti Fiber
Holdings Inc. LT IDR B+ Affirmed B+
senior
unsecured LT B Affirmed RR5 B
Uniti Group LP LT IDR B+ Affirmed B+
senior secured LT BB+ Affirmed RR1 BB+
senior
unsecured LT B Affirmed RR5 B
Uniti Group Inc. LT IDR B+ Affirmed B+
senior
unsecured LT B New Rating RR5
URP MAIDEN LANE: Case Summary & Six Unsecured Creditors
-------------------------------------------------------
Debtor: URP Maiden Lane LLC
1177 Avenue of the Americas
5th Floor
New York, NY 10036
Business Description: The Debtor is engaged in activities related
to real estate.
Chapter 11 Petition Date: October 25, 2023
Court: United States Bankruptcy Court
Southern District of New York
Case No.: 23-11698
Debtor's Counsel: Scott S. Markowitz, Esq.
TARTER KRINSKY & DROGIN LLP
1350 Broadway
11th Floor
New York, NY 10018
Tel: (212) 216-8000
Email: smarkowitz@tarterkrinsky.com
Total Assets: $96 million
Total Liabilities: $155,710
The petition was signed by David Goldwasser as co-manager.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/KGK6SEI/URP_MAIDEN_LANE_LLC__nysbke-23-11698__0001.0.pdf?mcid=tGE4TAMA
List of Debtor's Six Unsecured Creditors:
Entity Nature of Claim Claim Amount
1. Goldberg Weprin Legal Services $125,000
Finkel Goldste
125 Park Avenue
12th Floor
New York, NY 10017
Andy W. Albstein
Phone: (212) 301-6970
Email: aalbstein@gwfglaw.com
2. Baron & Baron LLP Consulting & $18,000
108 West 39th Street Tax Planning
Suite 1306 Services
New York, NY 10018
3. Brown Harris Consulting $5,000
Stevens Developme Services
451 West Broadway
New York, NY 10012
4. Urban Atelier Group LLC Preconstruction $5,000
85 5th Avenue Services
New York, NY 10003
5. MGNY Consulting Corp. Tax Consulting $2,500
109 East 9th Street
Storefront
New York, NY 10003
6. United Corporate Filing Service $210
Services, Inc
838 Walker Rd.
Dover, DE 19904
VERINT SYSTEMS: Egan-Jones Retains BB Senior Unsecured Ratings
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Egan-Jones Ratings Company on October 10, 2023, maintained its 'BB'
foreign currency and local currency senior unsecured ratings on
debt issued by Verint Systems Inc. EJR also withdraws rating on
commercial paper issued by the Company.
Headquartered in Huntington, New York, Verint Systems Inc. provides
analytic solutions for communications, interception, digital video
security and surveillance, and enterprise business intelligence.
VISTA OUTDOOR: Moody's Confirms 'Ba3' CFR, Outlook Negative
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Moody's Investors Service confirmed the ratings of Vista Outdoor
Inc. ("Vista" or "Vista Outdoor") including the company's Ba3
Corporate Family Rating, the Ba3-PD Probability of Default Rating,
and the B1 senior unsecured notes rating. Moody's downgraded
Vista's Speculative Grade Liquidity Rating ("SGL") to SGL-2 from
SGL-1. The outlook is negative. Previously, the ratings were on
review for downgrade. The rating actions conclude the review for
downgrade that commenced on May 17, 2022 following the company's
announced plan to separate its Outdoor Products and Sporting
Products segments into two independent publicly-traded companies.
The confirmation of the Ba3 CFR reflects Moody's expectation that
all debt at Vista Outdoor will be repaid in conjunction with the
proposed acquisition of the company's Sporting Products business by
the Czechoslovak Group a.s.("CSG") for roughly $1.91 billion that
was announced on October 16, 2023. The Outdoor Products business,
to be rebranded as "Revelyst", will still be separated from Vista
Outdoors into a standalone publicly traded company. Shareholders of
Vista Outdoor will receive shares of Revelyst and approximately
$750 million of cash in aggregate in exchange for their Vista
shares. Vista intends to repay all outstanding debt with proceeds.
Remaining proceeds from the acquisition will remain on Revelyst's
balance sheet. CSG will issue new debt at the combined ammunition
subsidiary and has $1.11 billion of fully committed debt financing
in place. Vista will receive a $114.5 million termination fee if
the transaction does not receive regulatory approval. The
acquisition and Revelyst seperation are expected to close some time
in calendar 2024 subject to shareholder and regulatory approval.
Should the transaction close as proposed, Moody's expects to
withdraw its ratings because the rated debt will be repaid. The
confirmation also reflects Moody's anticipation that Vista
Outdoor's debt-to-EBITDA (incorporating Moody's standard
adjustments; 2.1x for the 12 months ended June 25, 2023) will
remain below 3.0x over the next 12 months. This is despite the
continued expected pressure on the company's earnings and the
EBITDA margin from lower sales volumes in both sporting and outdoor
products because of ongoing normalization from elevated purchase
levels during the pandemic and retailer inventory destocking.
Moody's also expects consumers economizing spending due to
challenging economic conditions will also continue to reduce Vista
Outdoor's revenue and earnings. Moody's nevertheless anticipates
that solid free cash flow and roughly $200 million of excess
availability on the asset back lending credit facility ("ABL") will
be sufficient to fund roughly $44 million of quarterly term loan
amortization and the final principal repayment on the secured term
loan that matures in August 2024. The term loan balance was $205
million as of the fiscal quarter ended June 25, 2023.
The downgrade to SGL-2 from SGL-1 accounts for the approaching $205
million secured term loan debt maturity in August 2024 and the
company's potential reliance on its revolving credit facility to
help partially fund the remaining term loan amortization and final
maturity. Vista's SGL-2 rating reflects good liquidity. Excess
capacity on the $600 million asset backed lending facility ("ABL")
has declined in recent years because Vista has borrowed on its
revolver to fund acquisitions. The company continues to generate
good free cash flow even as operating conditions have deteriorated.
Moody's anticipates that balance sheet cash of $63 million as of
June 2023, free cash flow exceeding $300 million over the next 12
months, and roughly $200 million of available capacity on the
revolver as of June 25, 2023 provide ample resources to address
seasonal working capital uses, $44 million of quarterly term
amortization, and the remaining principal on the term loan at the
August 2024 maturity.
RATINGS RATIONALE
Vista Outdoor's Ba3 CFR reflects its leading position as one of the
largest ammunition manufacturers in the US, its leading brands in
multiple niche outdoor product categories and favorable US outdoor
activity participation trends. The rating also reflects Vista's
conservative 1.0x-2.0x net debt-to-EBITDA target and healthy free
cash flow throughout ammunition industry cycles. Moody's
anticipates that Moody's-adjusted debt-to-EBITDA of 2.1x as of the
quarter ended June 25, 2023 will rise but remain below 3.0x over
the next 12 months. Moody's expects Vista Outdoor's earnings to
fall and leverage to rise over the next year due to ammunition and
outdoor products sales declines because consumers will continue to
economize spending in response to pressure to income from high
inflation and interest rates. Further, demand is normalizing from
pandemic highs when consumers had additional time to spend on
outdoor recreational activities and also invested in
guns/ammunition in response to a perceived danger from increasing
crime. Vista's credit profile is constrained by the volatility in
non-law-enforcement related ammunition demand and discretionary
nature of outdoor products, and high social risks related to the
sale of ammunition products. The company's acquisition strategy and
stated intention to split the company's Outdoor Products and
Sporting Products businesses create event risk. The ratings also
reflect that the company's planned $1.9 billion sale of its
Sporting Products to Czechoslovak Group a.s. would lead to
repayment of all of Vista Outdoor's existing debt in 2024.
Moody's believes social risk will remain a key credit risk for
Vista due to its participation in the gun ammunition industry. The
high social risk negatively affects Vista's rating and necessitates
stronger credit metrics than comparably rated companies in order
account for potential demand erosion from changing consumer
sentiment or to address escalating costs to address legal and
regulatory factors.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The negative outlook captures uncertainty and event risk around the
successful close of the Sporting Products sale to CSG that is
subject to shareholder and regulatory approval. Moody's sees an
elevated risk to lenders should the proposed transaction fail to
close and management were to reengage in a spin of the Outdoor
Products business into a standalone company while keeping the debt
with the ammunition business as originally planned. The exposure
of debt holders to the inherent volatility and cyclicality of the
ammunition business as well as its exposure social and legal risks
and loss of scale and product diversity would be magnified by a
spin-off of the Outdoor Products business. The outlook also factors
in financial policy uncertainty should the sale to CSG be
terminated. In Vista's original spin-off plan, the company intended
to pursue more shareholder friendly actions including dividends and
share repurchases while targeting leverage at a higher level over
time of up to 3.0x debt to EBITDA compared to the current 1.0x –
2.0x net leverage target (consolidated company net leverage was
1.7x as of June 2023 based on Vista's calculation).
Notwithstanding plans to split the company and sell the Sporting
Products business and based on the current asset profile, ratings
could be downgraded if the EBITDA margin deteriorates such that
debt/EBITDA is sustained above 3.0x. The rating could also be
downgraded if management adopts a more aggressive financial policy
or if adverse gun regulations lead to a structural decline in
operating profits. A downgrade could also occur if liquidity
deteriorates, free cash flow generation declines meaningfully, or
litigation risks lead to potential cash payments that would weaken
credit metrics. If the proposed sale of the Sporting Products
business does not occur, the ratings could be downgraded if the
company continues with a plan to spin-off the Outdoor Products
business while keeping the debt with the Sporting Products
business.
Ratings could be upgraded if Vista diversifies its product base
towards less cyclical businesses and reduces relative exposure of
the overall asset base to the social, litigation and regulatory
risk in the ammunition segment. The company would also need to
sustain organic revenue growth, improve the EBITDA margin in the
outdoor products business and realize better margin stability in
the ammunition business. Vista would also need to sustain average
debt to EBITDA below 1.5x after taking into consideration demand
volatility from its ammunition business and generate consistently
strong free cash flow to be upgraded.
Vista Outdoor Inc.'s credit impact score of CIS-3 indicates that
ESG considerations have a limited impact on the current credit
rating with potential for greater negative impact over time driven
mostly by social and governance. As with most consumer durables
companies, Vista has some exposure to environmental risks. However,
Vista's exposure to social risks present greater credit risk and
positions it weakly due to exposure to changing demographic and
societal trends and customer relations risk from its ammunition
business. Governance risks reflect that the company's planned
acquisition strategy will likely raise currently low leverage, as
well as the willingness to reshape the portfolio through a spin-off
that reduces the asset base.
The principal methodology used in these ratings was Consumer
Durables published in September 2021.
Vista Outdoor Inc., based in Anoka, Minnesota, is a manufacturer
and marketer of ammunition and outdoor sports and recreation
products. The publicly-traded company produces a broad product line
for the biking, winter sports, hunting, shooting sports, wildlife
watching, archery, and golf markets. Major brands include
Remington, Federal, Bushnell, CamelBak, Camp Chef Foresight. Sales
were approximately $3.0 billion for the last 12 months ending June
25, 2023.
WASHINGTON MEDICAL: Class 4 Unsecureds to get 75% of Their Claims
-----------------------------------------------------------------
Washington Medical Supplies, Inc., submitted a First Amended Plan
of Reorganization, dated September 25, 2023.
This Plan of Reorganization under Chapter 11 of the Bankruptcy Code
proposes to pay creditors of Washington Medical Supplies, Inc.,
from future income, sales of inventory, and charges for repairs to
durable medical equipment.
Under the Plan, Class 4 consists of creditors with allowed, timely
filed, unsecured, non-priority claims of more than $5,000.
Creditors with allowed Class 4 claims shall receive approximately
75% of the value of their claims, the first payment due 90 days
after the Effective Date. As of the date of this Plan, claim
payments to Class 5 creditors over the course of the Plan total
$153,213. Payments in the sum of $2600 per month with no prepayment
penalty, i.e. if operations are successful, the reorganized debtor
may make the payments early and complete the plan. Class 4 is
impaired.
Class 5 - Creditors with allowed, timely filed, unsecured,
non-priority claims of $5,000 or less Creditors with Class 5 claims
will receive a single payment in the amount of 50% of their claim
(as reduced if electing Class 5 treatment) by the first day of the
third month following the Effective Date. Any creditor electing
treatment under Class 5 will have its claim allowed at the lower of
$5,000 or the total amount of their claim and receive 50% of this
amount. For example, a creditor with a $4,000 will be allowed in
that amount and paid $2,000. A creditor reducing its claim to
$5,000 will have its claim allowed at $5,000 and be paid $2500.
Class 5 is impaired.
The major source of the Debtor's income is from the continued
operation of the debtor's business, selling and repairing durable
medical equipment and medical consumables.
Attorney for Washington Medical Supplies, Inc.:
Marc S. Stern, Esq.
Attorney at Law
1825 NW 65TH Street
Seattle, WA 98117
Tel: (206) 448-7996
A copy of the Plan of Reorganization dated September 29, 2023, is
available at https://tinyurl.ph/WzVpi from PacerMonitor.com.
About Washington Medical Supplies
Washington Medical Supplies, Inc., filed a petition under Chapter
11, Subchapter V of the Bankruptcy Code (Bankr. E.D. Wash. Case No.
23-00734) on June 16, 2023, with $100,001 to $500,000 in both
assets and liabilities.
Judge Whitman L. Holt oversees the case.
The Debtor is represented by Marc S. Stern, Esq., at the Law Office
of Marc S. Stern.
WEBER INC: S&P Affirms 'CCC+' Issuer Credit Rating, Outlook Neg.
----------------------------------------------------------------
S&P Global Ratings affirmed all of its ratings on Weber Inc.,
including its 'CCC+' issuer credit rating.
S&P also revised its liquidity assessment to weak from less than
adequate, reflecting the company's need for additional sources of
liquidity to fund its inventory build for the 2024 selling season.
The negative outlook reflects S&P's expectation that the company's
operations will continue to be challenged, with uncertain prospects
for grill demand in a softening economy and the additional risk of
a liquidity crunch.
S&P said, "We expect Weber's operations will remain challenged, but
demand may stabilize and possibly rebound over the next several
quarters.
"We continue to expect that the company's operating performance
will be weak in 2023 with negative free operating cash flow (FOCF)
generation. However, we believe retailer inventory levels for
grills are in a better position after the 2023 summer selling
season following severe retailer destocking over the last 12-18
months. As such, reorder rates may begin increasing in preparation
for the 2024 selling season.
"We believe the overall demand environment will likely remain weak
and the company's revenues are not likely to return to pre-COVID-19
levels until well after 2024. However, we do expect improved
performance in 2024 to the extent the company can effectively fund
its inventory build for next year and benefit from better
anticipated retailer orders ahead of next year's summer selling
season.
"We believe Weber will need to secure additional source of
liquidity to fund the upcoming seasonal inventory build."
The company's operations are highly seasonal, with peak liquidity
needs in the first three months of the calendar year to build
inventory for the summer selling season. Given the company's
negative FOCF generation and limited access to its revolving credit
facility due to its currently weak operating performance, we do not
believe the company's current sources of liquidity will be
sufficient to cover its uses unless it obtains additional sources
of funding. Therefore, S&P is closely monitoring the company's
liquidity management leading up to its key sell-in season through
March 2024.
S&P views private-equity sponsors BDT Capital Partner's liquidity
injection in the form of preferred equity as debt-like.
A take-private transaction in late 2022 and Weber's
recapitalization with the $800 million preferred equity injection
from BDT averted a potential near-term liquidity crunch for the
company in early 2023. S&P said, "We view the $800 million
preferred equity as debt and include it in our calculation of
adjusted leverage, based on our view that preferred equity is not
likely to be permanent capital. Therefore, we adjust this capital
to debt when calculating adjusted debt in our credit metrics, which
are consolidated at the parent level. As such, our adjusted debt
for Weber as of the end of June 30, 2023, is approximately $2.2
billion."
The negative outlook reflects S&P's expectation that the company's
operations will remain challenged, with uncertain prospects for a
material rebound in grill demand amid a softening economy and the
risk of a liquidity crunch in the coming quarters absent additional
working capital financing.
S&P could lower its ratings on Weber in the coming quarters if a
specific default scenario becomes more apparent. This could occur
if:
-- S&P believes a liquidity crunch or distressed exchange of its
debt becomes more likely either because it fails to obtain
additional working capital financing or because its operating
performance unexpectedly further deteriorates;
-- S&P believes the private-equity sponsor is not likely to
continue to provide support to the company if additional liquidity
needs arise; or
-- Consumer demand remains very weak, hampering the consumer's
ability to spend on large-ticket discretionary items. This
precludes the company from selling its finished goods into
retailers at the start of calendar 2024, keeping cash flow and
profitability depressed.
S&P could take a positive action if Weber's liquidity position
improves, its operations stabilize, and it sees a path to positive
annual FOCF and an improvement in EBITDA cash interest coverage
closer to 1.5x. This could occur if:
-- The company secures sufficient liquidity to fund next season's
working capital requirements; and
-- Stabilizing consumer demand coupled with retailer restocking
and ongoing cost management are sufficient to restore profitability
and free cash flow generation.
WESTCHESTER HEALTH CARE: Moody's Cuts Ratings to Ba1, Outlook Neg
-----------------------------------------------------------------
Moody's Investors Service has downgraded Westchester County Health
Care Corporation's (WCHCC) (NY) and Charity Health System's (CHS)
(NY) ratings to Ba1 from Baa3. The outlook is negative. WCHCC had
$811 million and CHS had $129 million of debt at fiscal year end
2022.
A List of Affected Credit Ratings is available at
https://urlcurt.com/u?l=MkUU9G
RATINGS RATIONALE
The downgrade to Ba1 reflects lower than expected operating
performance and thin liquidity that will result in high operating
and balance sheet leverage for several years as WCHCC funds a large
project. Also, uneven state funding sources and equity
contributions toward the project will further strain cash. The
downgrade of CHS's rating to Ba1 is based on WCHCC's legal
guarantee to pay debt service on CHS's bonds.
The Ba1 rating reflects the system's strong market position as the
only tertiary and quaternary provider between New York City and
Albany with material and durable volume growth on the main campus.
While costly, the opening of a new tower in early 2026 will
alleviate capacity constraints, improve efficiencies, and support a
continuation of solid margins at the flagship. Supplemental
Medicaid payments and a sizable bank line will help stabilize
liquidity. The rating reflects limited balance sheet flexibility
with thin and highly variable liquidity and low cash-to-debt. Labor
costs and slow volume recovery at CHS and the HealthAlliance will
prolong margin improvement. Performance at these locations will
also be constrained by high Medicare and Medicaid.
RATING OUTLOOK
The negative outlook reflects the potential for even weaker
liquidity and cash-to-debt if the system is unable to fundraise to
cover equity contributions needed for the project or if project
costs exceed the current estimate. The outlook also reflects
challenges to improving cashflow to levels that support higher debt
service and routine capital.
FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATINGS
-- Material growth in liquidity
-- Significant increase in cash-to-debt and reduction in
debt-to-cashflow
-- Sustained higher operating cashflow margins for the
consolidated system including CHS
-- Demonstrated financial support from Westchester County
-- For Charity Health System, upgrade of Westchester County
Health Care Corp.
FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATINGS
-- Decline in system cash on hand to below 40 days or
cash-to-debt below 25%
-- Inability to maintain 4-5% operating cashflow margin for
the system
-- Higher project cost and equity contribution than current
estimate
-- Meaningful increase in pension contributions
-- For Charity Health System, downgrade of Westchester County
Health Care Corp.
LEGAL SECURITY
The sole obligated group member is WCHCC, which includes the
Westchester Medical Center Valhalla and MidHudson campuses. The
obligated group does not include HealthAlliance, CHS and certain
other subsidiaries of WCHCC. The bonds have a pledge of gross
receipts of the obligated group and mortgages, which consist of
leasehold interests in the Valhalla and MidHudson campuses.
WCHCC provides an irrevocable and unconditional guarantee covering
full and timely payment of all scheduled payments of principal and
interest on CHS's bonds. The guarantee is evidenced through a
supplemental indenture to WCHCC's master trust indenture, putting
CHS's bonds on parity with WCHCC's other MTI obligations. While the
guarantee does not extend to accelerated bonds, the indenture does
not allow for acceleration of principal and interest on CHS's
bonds. Additionally, CHS's bonds are not subject to mandatory
redemptions. CHS's bonds are secured by gross receivables of its
obligated group, which includes the hospitals but excludes
physician-related entities.
PROFILE
The Westchester County Health Care Corporation (WCHCC), a New York
Public Benefit Corporation, operates the Westchester Medical Center
including operations at the Valhalla campus and the MidHudson
Regional Hospital in Poughkeepsie, New York. WCHCC is also the
majority corporate member (60%) of Bon Secours Charity Health
System with hospitals in Rockland and Orange Counties, and the sole
member of HealthAlliance with hospitals in Ulster and Delaware
Counties. The Valhalla campus is leased from Westchester County,
although WCHCC has not been required to pay rent under the
conditions of the lease agreement.
METHODOLOGY
The principal methodology used in rating Westchester County Health
Care Corporation, NY was Not-For-Profit Healthcare published in
December 2018.
WESTLAKE SURGICAL: Hires Donlin Recano as Claims Agent
------------------------------------------------------
Westlake Surgical, LP d/b/a The Hospital at Westlake Medical Center
seeks approval from the U.S. Bankruptcy Court for the Western
District of Texas to employ Donlin Recano & Company, Inc. as
claims, noticing, and solicitation agent.
The firm will provide these services:
a. assist the Debtor with the preparation and distribution of
all required notices in this Chapter 11 case, including: (i) notice
of any claims bar date; (ii) notices of objections to claims and
objections to transfers of claims; (iii) notices of any hearings on
a disclosure statement and confirmation of any plan of
reorganization, including under Bankruptcy Rule 3017(d); (iv)
notice of the effective date of any plan of reorganization, and (v)
all other notices, orders, pleadings, publications, and other
documents as the Debtor, the Court, and/or the Clerk may deem
necessary or appropriate to administer this Chapter 11 Case in a
prudent manner, including through email or other electronic means;
b. assist the Debtor with all solicitation-related matters,
including: (i) balloting services; (ii) distribution of applicable
solicitation materials; (iii) tabulation and calculation of votes;
(iv) determining with respect to each ballot cast, its timeliness
and its compliance with the Bankruptcy Code, Bankruptcy Rules, and
procedures promulgated by this Court, and (v) generating an
official ballot certification and testifying, if necessary, in
support of the ballot tabulation results;
c. maintain a list of all potential creditors, equity holders,
and other parties in interest and a "core" mailing list consisting
of all parties described in Bankruptcy Rule 2002(i)-(k) and those
parties that have filed a notice of appearance pursuant to
Bankruptcy Rule 9010 and update and make such lists available upon
request by a party in interest or the Clerk, as applicable;
d. furnish a notice to all potential creditors of the last date
for the filing of proofs of claim and a form for the filing of a
proof of claim, after such notice and form are approved by this
Court, and notify said potential creditors of the existence, amount
and classification of their respective claims as set forth in the
Schedules, which may be effected by inclusion of such information
(or the lack thereof, in cases where the Schedules indicate no debt
due to the subject party) on a customized proof of claim form
provided to potential creditor;
e. maintain a post office box for the purpose of receiving
copies of claims and returned mail, and process all mail received;
f. for all notices, motions, orders or other pleadings or
documents served, prepare and file or cause to be filed with the
Clerk an affidavit or certificate of service no later than the next
business day after service that includes (i) the docket number and
title of any pleading served during such period; (ii) a list of
persons or entities, as applicable, to whom it was mailed (in
alphabetical order) with their addresses; (iii) the manner of
service, and (iv) the date served;
g. review and verify copies of all proofs of claim received by
the Clerk for accuracy and maintain any original proofs of claim
received in a secure area;
h. maintain an official claims register (the "Claims Register")
fully accessible via DRC's website, which register shall include
copies of each proof of claim filed and specify therein the
following information for each proof of claim: (i) the number
assigned to any such proof of claim; (ii) the date received; (iii)
the name and address of the claimant and agent, if applicable, who
filed the proof of claim; (iv) the applicable Debtor; (v) the
amount asserted; (vi) the asserted priority of the claim, and (vii)
any disposition of the claim;
i. implement reasonable security measures designed to ensure the
completeness and integrity of the Claims Register and the
safekeeping of any proofs of claim;
j. record all transfers of claims and provide any notices of
such transfers as required by Bankruptcy Rule 3001(e);
k. relocate, by messenger or overnight delivery, all of the
Clerk-filed proofs of claim to the offices of DRC not less than
weekly;
l. identify and correct any incomplete or incorrect addresses in
any mailing or service lists;
m. upon completion of the docketing process for all claims
received to date for each case, turn over to the Clerk copies of
the claims register for the Clerk's review (upon the Clerk's
request);
n. monitor the Court's docket for all notices of appearance,
address changes, and claims-related pleadings and orders filed and
make necessary notations on and/or changes to the claims register;
o. assist in the dissemination of information to the public and
respond to requests for administrative information regarding this
Chapter 11Case as directed by the Debtor or the Court, including
through the use of a case website and/or call center;
p. comply with applicable federal, state, municipal, and local
statutes, ordinances, rules, regulations, orders, and other
requirements in connection with the services rendered pursuant to
the Engagement Agreement;
q. if this Chapter 11 Case is converted to a case under Chapter
7 of the Bankruptcy Code, contact the Clerk's office within three
days of notice to DRC of entry of the order converting the case;
r. thirty (30) days prior to the close of this Chapter 11 Case,
to the extent practicable, request that the Debtor submit to the
Court a proposed order dismissing DRC in its capacity as the Claims
and Noticing Agent and terminating its services in such capacity
upon completion of its duties and responsibilities and upon the
closing of this Chapter 11 Case;
s. within seven days of notice to DRC of entry of an order
closing this Chapter 11 Case, provide to the Court the final
version of the Claims Register as of the date immediately before
the close of this Chapter 11 Case;
t. at the close of this Chapter 11 Case, (i) box and transport
all original documents, in proper format, as provided by the
Clerk's office, to (A) the Federal Archives Records Administration,
located at Central Plains Region, 200 Space Center Drive, Lee's
Summit, Missouri 64064 or (B) any other location requested by the
Clerk's office, and (ii) docket a completed SF-135 Form indicating
the accession and location numbers of the archived claims;
u. assist with, among other things, solicitation, balloting, and
tabulation of votes, and prepare any related reports, as required
in support of confirmation of a Chapter 11 plan, and in connection
with such services, process requests for documents from parties in
interest, including, if applicable, brokerage firms, bank
back-offices, and institutional holders;
v. prepare an official ballot certification and, if necessary,
testify in support of the ballot tabulation results;
w. if requested, assist with the preparation of the Debtor'
schedules of assets and liabilities and statements of financial
affairs and gather data in conjunction therewith;
x. provide a confidential data room, if requested;
y. coordinate publication of certain notices in periodicals and
other media;
z. manage and coordinate any distributions pursuant to a Chapter
11 plan; and
aa. provide such other processing, solicitation, balloting, and
other administrative services described in the Engagement Agreement
that may be requested from time to time by the Debtor, the Court,
or the Clerk.
The firm will be paid at these rates:
Senior Bankruptcy Consultant $167 to $203 per hour
Case Manager $153 to $167 per hour
Consultant/Analyst $126 to $149 per hour
Technology/Programming Consultant $86 to $122 per hour
Clerical $40 to $50 per hour
The firm will be paid a retainer in the amount of $20,000.
The firm will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Lisa Terry, a senior legal director at Donlin, Recano & Company,
Inc., disclosed in a court filing that the firm is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
The firm can be reached at:
Lisa Terry
Donlin, Recano & Company, Inc.
6201 15th Avenue
Brooklyn, NY 11219
Tel: (212) 481-1411
About Westlake Surgical, LP
d/b/a The Hospital at Westlake Medical Center
The Hospital at Westlake Medical Center is a physician-owned
boutique hospital in Westlake Hills, Texas, a suburb of Austin.
Guided by an unwavering commitment to delivering quality healthcare
services in a comfortable setting, its core service areas include
surgical procedures, outpatient radiology, and a 24/7 emergency
room.
Westlake Surgical, L.P., doing business as The Hospital at Westlake
Medical Center, sought Chapter 11 protection (Bankr. W.D. Texas
Case No. 23-10747) on Sept. 8, 2023.
The Honorable Shad Robinson is the case judge.
The Debtor tapped Hayward PLLC as counsel. Donlin, Recano &
Company, Inc., is the claims agent.
eCapital Healthcare Corp., the DIP lender, is represented by Foley
& Lardner, LLP.
WESTLAKE SURGICAL: Hires Hayward PLLC as Counsel
------------------------------------------------
Westlake Surgical, LP d/b/a The Hospital at Westlake Medical Center
seeks approval from the U.S. Bankruptcy Court for the Western
District of Texas to employ Hayward PLLC as counsel.
The firm will provide these services:
a. giving the Debtor legal advice with respect to its powers and
duties as Debtor as Debtor-in-Possession in the continued operation
of its business and management of its property;
b. advising the Debtor of its responsibilities under the
Bankruptcy Code and assist with such;
c. preparing and filing of the Voluntary Petition, DIP Loan
Financing, and other paperwork necessary to commence this
proceeding;
d. assisting the Debtor in preparing and filing the required
Schedules, Statement of Affairs, Monthly Financial Reports, and any
amendments thereto;
e. assisting the Debtor in preparing the Initial Debtor's Report
and other documents required by the Bankruptcy Code, the Federal
Rules of Bankruptcy Procedure, the Local Rules of this Court and
the administrative procedures of the Office of the United States
Trustee;
f. representing the Debtor in connection with adversary
proceedings and other contested and uncontested matters, both in
this Court and in other courts of competent jurisdiction,
concerning any and all matters related to these bankruptcy
proceedings and the financial affairs of the Debtor; and
g. representing the Debtor in the negotiation and documentation
of any sales or refinancing of property of the Chapter 11 Case, and
in obtaining the necessary approvals of such sales or refinancing
by this Court; and
h. assisting the Debtor in the formulation of, among other
things, a plan of reorganization and disclosure statement, and in
taking the necessary steps in this Court to obtain approval of such
disclosure statement and confirmation of such plan of
reorganization.
The firm will be paid at these rates:
Charlie Shelton $400 per hour
Ruth Van Meter $500 per hour
Other attorneys $300 to $500 per hour
Paralegals $150 to $195 per hour
Legal Assistant $95 per hour
The Debtors paid the firm a retainer of $120,000.
The firm will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Herbert Charles Shelton II, Esq., a partner at Hayward PLLC,
disclosed in a court filing that the firm is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
The firm can be reached at:
Herbert Charles Shelton II, Esq.
HAYWARD PLLC
7600 Burnet Road, Suite 530
Austin, TX 78757
Tel: (737) 881-7101
Email: cshelton@haywardfirm.com
About Westlake Surgical, LP
d/b/a The Hospital at Westlake Medical Center
The Hospital at Westlake Medical Center is a physician-owned
boutique hospital in Westlake Hills, Texas, a suburb of Austin.
Guided by an unwavering commitment to delivering quality healthcare
services in a comfortable setting, its core service areas include
surgical procedures, outpatient radiology, and a 24/7 emergency
room.
Westlake Surgical, L.P., doing business as The Hospital at Westlake
Medical Center, sought Chapter 11 protection (Bankr. W.D. Texas
Case No. 23-10747) on Sept. 8, 2023.
The Honorable Shad Robinson is the case judge.
The Debtor tapped Hayward PLLC as counsel. Donlin, Recano &
Company, Inc., is the claims agent.
eCapital Healthcare Corp., the DIP lender, is represented by Foley
& Lardner, LLP.
WINDSOR TERRACE: Hires Stretto as Claims and Noticing Agent
-----------------------------------------------------------
Windsor Terrace Healthcare, LLC and its affiliates seek approval
from the U.S. Bankruptcy Court for the Central District of
California to employ Stretto, Inc. as claims, noticing, and
solicitation agent.
The firm will provide these services:
a. assist the New Windsor Debtors with the preparation and
distribution of all required notices and documents in accordance
with the Bankruptcy Code and the Bankruptcy Rules in the form and
manner directed by the New Windsor Debtors and/or the Court,
including: (i) notice of the commencement of these Chapter 11 cases
and the initial meeting of creditors under Bankruptcy Code Section
341(a); (ii) notice of any claims bar date; (iii) notice of any
proposed sale of the New Windsor Debtors' assets; (iv) notices of
objections to claims and objections to transfers of claims; (v)
notices of any hearings on a disclosure statement and confirmation
of any plan or plans of reorganization, including under Bankruptcy
Rule 3017(d); (vi) notice of the effective date of any plan; and
(vii) all other notices, orders, pleadings, publications and other
documents as the New Windsor Debtors, Court, or Clerk may deem
necessary or appropriate for an orderly administration of these
Chapter 11 cases;
b. maintain an official copy of the New Windsor Debtors'
Schedules, listing the New Windsor Debtors' known creditors and the
amounts owed thereto;
c. maintain (i) a list of all potential creditors, equity
holders and other parties-in-interest and (ii) a "core" mailing
list consisting of all parties described in Bankruptcy Rule
2002(i), (j), and (k) and those parties that have filed a notice of
appearance pursuant to Bankruptcy Rule 9010, and update and make
said lists available upon request by a party-in-interest or the
Clerk;
d. to the extent applicable, furnish a notice to all potential
creditors of the last date for filing proofs of claim and a form
for filing a proof of claim, after such notice and form are
approved by the Court, and notify said potential creditors of the
existence, amount and classification of their respective claims as
set forth in the Schedules, which may be effected by inclusion of
such information (or the lack thereof, in cases where the Schedules
indicate no debt due to the subject party) on a customized proof of
claim form provided to potential creditors;
e. maintain a post office box or address for receiving claims
and returned mail, and process all mail received;
f. for all notices, motions, orders or other pleadings or
documents served, prepare and file or cause to be filed with the
Clerk an affidavit or certificate of service no more frequently
than every 7 days that includes: (i) either a copy of the notice
served or the docket number(s) and title(s) of the pleading(s)
served; (ii) a list of persons to whom it was mailed (in
alphabetical order) with their addresses; (iii) the manner of
service; and (iv) the date served;
g. receive and process all proofs of claim, including those
received by the Clerk, check said processing for accuracy and
maintain the original proofs of claim in a secure location other
than where originals are maintained;
h. provide an electronic interface for filing proofs of
claim;
i. maintain the official claims register for the New Windsor
Debtors (the "Claims Register") on behalf of the Clerk; upon the
Clerk's request, provide the Clerk with certified, duplicate
unofficial Claims Register; and specify in the Claims Register the
following information for each claim docketed:(i) the claim number
assigned; (ii) the date received; (iii) the name and address of the
claimant and agent, if applicable, who filed the claim; (iv)
address for payment, if different from the notice
address; (v) the amount asserted; (vi) the asserted
classification(s) of the claim (e.g., secured, unsecured, priority,
etc.); (vii) the applicable New Windsor Debtor; and (viii) any
disposition of the claim;
j. provide public access to the Claims Register, including
complete proofs of claim with attachments, if any, without charge,
during regular business hours in a viewing area at the following
address: 410 Exchange, Suite 100, Irvine, California 92602 and on a
case-specific website maintained by Stretto;
k. allow the Clerk to inspect Stretto's premises at any time
during regular business hours;
l. Periodically audit the claims information to assure the
Clerk that the claims information is being appropriately and
accurately recorded in the official claims register;
m. Allow the Clerk to independently audit the claims
information during regular business hours;
n. record all transfers of claims and provide any notices of
such transfers as required by Bankruptcy Rule 3001(e);
o. implement reasonable security measures designed to ensure
the completeness and integrity of the Claims Register and the
safekeeping of any proofs of claim;
p. transmit to the Clerk a copy of the claims register on a
weekly basis or at such other times as the Clerk may direct;
q. relocate, by messenger or overnight delivery, all of the
court-filed proofs of claim to the offices of Stretto not less than
weekly;
r. monitor the Court's docket for all notices of appearance,
address changes, and claims-related pleadings and orders filed and
make necessary notations on and/or changes to the claims register
and any service or mailing lists, including to identify and
eliminate duplicative names and addresses from such lists;
s. identify and correct any incomplete or incorrect addresses
in any mailing or service lists (to the extent such information is
available);
t. assist in the dissemination of information to the public
and respond to requests for administrative information regarding
these chapter 11 cases as directed by the New Windsor Debtors or
the Court, including through the use of a case website and/or call
center;
u. provide docket updates via email to parties who subscribe
for such service on the New Windsor Debtors' case website;
v. comply with applicable federal, state, municipal, and local
statutes, ordinances, rules, regulations, orders, and other
requirements in connection with the Services rendered pursuant to
the Engagement Agreement;
w. if these Chapter 11 cases are converted to cases under
Chapter 7 of the Bankruptcy Code, contact the Clerk within 3 days
of notice to Stretto of entry of the order converting the cases;
x. 30 days prior to the close of these Chapter 11 cases, to
the extent practicable, request that the New Windsor Debtors submit
to the Court a proposed order dismissing Stretto as claims,
noticing, and solicitation agent and terminating its services in
such capacity upon completion of its duties and responsibilities
and upon the closing of these Chapter 11 cases;
y. within 7 days of notice to Stretto of entry of an order
closing these Chapter 11 cases, provide to the Court the final
version of the Claims Registers as of the date immediately before
the close of the cases;
z. at the close of these Chapter 11 cases: (i) box and
transport all original documents, in proper format, as provided by
the Clerk, to (A) the Federal Archives Record Administration, or
(B) any other location requested by the Clerk; and (ii) docket a
completed SF-135 Form indicating the accession and location numbers
of the archived claims;
aa. assist the New Windsor Debtors with, among other things,
plan-solicitation services including: (i) balloting; (ii)
distribution of applicable solicitation materials; (iii) tabulation
and calculation of votes; (iv) determining with respect to each
ballot cast, its timeliness and its compliance with the Bankruptcy
Code, Bankruptcy Rules, and procedures ordered by this Court; (v)
preparing an official ballot certification and testifying, if
necessary, in support of the ballot tabulation results; and (vi) in
connection with the foregoing services, process requests for
documents from parties in interest, including, if applicable,
brokerage firms, bank back-offices and institutional holders;
bb. if requested, assist with the preparation of the New
Windsor Debtors' Schedules and gather data in conjunction
therewith;
cc. provide a confidential data room, if requested;
dd. coordinate publication of certain notices in periodicals
and other media;
ee. manage and coordinate any distributions pursuant to a
Chapter 11 plan; and
ff. provide such other claims, noticing, processing,
solicitation, balloting, and other administrative services
described in the Engagement Agreement, that may be requested from
time to time by theNew Windsor Debtors, the Court, or the Clerk.
The firm received from the Debtors an advance retainer in the
amount of $10,000.
The firm will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Sheryl Betance, a partner at Stretto, Inc., disclosed in a court
filing that the firm is a "disinterested person" as the term is
defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Sheryl Betance
Stretto, Inc.
410 Exchange, Ste. 100
Irvine, CA 92602
Telephone: (714) 716-1872
Email: sheryl.betance@stretto.com
About Windsor Terrace Healthcare, LLC
Windsor Terrace Healthcare, LLC are primarily engaged in the
businesses of owning and operating skilled nursing facilities
throughout the State of California. Collectively, the Debtors own
and operate 16 skilled nursing facilities, which provide 24 hour, 7
days a week and 365 days a year care to patients who reside at
those facilities. In addition to the 16 skilled nursing
facilities, the Debtors own and operate one assisted living
facility (which is Windsor Court Assisted Living, LLC), one home
health care center (which is S&F Home Health Opco I, LLC), and one
hospice care center (which is S&F Hospice Opco I, LLC). The
Debtors do not own any of the real property upon which the
facilities are located.
The Debtors sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. C.D. Cal. Lead Case No. 23-11200) on Aug.
23, 2023. Windsor Sacramento Estates, LLC and Windsor Hayward
Estates, LLC filed Chapter 11 petitions on Sept. 29.
In the petitions signed by Avrohom Tress, manager, the Debtors
disclosed up to $10 million in both assets and liabilities.
Judge Victoria S. Kaufman oversees the case.
Ron Bender, Esq., Monica Y. Kim, Esq., and Juliet Y. Oh, Esq. at
Levene, Neale, Bender, Yoo, and Golubchik LLP, represent the Debtor
as legal counsel. Stretto, Inc. is the Debtor's claims, noticing
and solicitation agent.
YC RIVERGOLD: Class 7 Unsecureds Owed $1.9M to get Full Payment
---------------------------------------------------------------
YC Rivergold Hotel LLC submitted a Disclosure Statement for Plan of
Reorganization dated Sept. 29, 2023.
The Debtor is solvent and profitable, and the estate contains far
more than enough value to pay all Claims in full even if several
"worst case" scenarios come to pass. Accordingly, the Debtor
intends to move quickly to confirmation of the Plan and payment of
trade creditors as soon as possible. The Debtor vigorously disputes
the claims asserted by or imputed to the mortgage lender (Wells
Fargo) and/or the special servicer of that mortgage loan (Rialto),
but to expedite payment of trade creditors it intends to postpone
all substantive litigation concerning those claims until after
confirmation of the Plan.
Rivergold's sole line of business is owning and operating the Four
Points and the real property it occupies, and all its assets are
related to that business. For example, the Four Points property
contains a combined bar/restaurant, but that space is leased out to
an unaffiliated entity that operates it as a separate business.
Rivergold also has a small lease to a telecom company that has had
a cell phone tower on the premises since before it purchased the
hotel, but the Debtor itself does not have any involvement in the
telecom industry.
More specifically, Rivergold's assets consisted of the following,
with all values reflecting the Debtor's opinion of value of as of
the Petition Date per the Schedules and totaling $44,054,814:
* Cash and Deposits: $1,234,405
* Accounts Receivable: $3,455,1083
* Prepaid Insurance: $70,526
* Hotel – Personal Property: $430,000
* Hotel – Real Property: $24,070,000
* Franchise Agreement: Value Unknown
* Notes Receivable (including claims against affiliates):
$14,753,701
* Reserves under the CMBS Loan: $41,074
The Claims asserted against the Debtor as of the Petition Date fall
into several categories and for purposes of the Plan Budget
(defined below) are estimated to total approximately $24 million
(the Debtor does not believe that claims will be finally allowed in
an amount this high). The summaries of claims below reflect amounts
that were scheduled, as well as amounts alleged in properly-filed
Proofs of Claim, all stated as of the Petition Date.
The Debtor scheduled unsecured claims of less than $250,000 in a
total amount of $203,575.96. Properly filed proofs of claim were
received for certain of these claims, increasing the amount of
claims filed or schedule to a total of $206,487.40 (i.e.
approximately three thousand dollars more than scheduled).
The Debtor scheduled unsecured claims of $250,000 or more in a
total amount of $1,920,620.19, consisting entirely of claims owed
to insiders, including the $1,632,734.46 claim of Latrobe. A
properly filed proof of claim was received for Latrobe's claim,
duplicating the amount scheduled.
Under the Plan, Class 5 includes the Allowed Unsecured
Administrative Convenience Class and is comprised of all unsecured
Claims less than ($2,500, the "Convenience Claim Threshold") and
holders of Class 6 Claims that elect to be included in Class 5 by
reducing their Claims to the Convenience Class Threshold. Class 5
is estimated to total approximately $18,147 as of the Effective
Date (including holders of Allowed Unsecured Claims in Class 6 who
are projected to elect to be included in Class 5) (collectively,
the "Class 5 Unsecured Claims"). Holders of Allowed Unsecured
Claims in Class 6 may elect to be included in Class 5. Allowed
Class 5 Unsecured Claims shall be paid in full within 14 days after
the later of (i) the Effective Date and (ii) the date of allowance
of such claims, which date of payment shall be deemed to be the
Effective Date with respect to any such Claims. The amount paid
shall be the lesser of (i) the amount of each holder's Allowed
Unsecured Claim and (ii) the Convenience Claim Threshold. Each
holder of an Allowed Unsecured Claim in Class 6 (whose alleged
Claim exceeds the Convenience Class Threshold) who elects to be
included in Class 5 in lieu of receiving the treatments provided in
Class 6 agrees, as a condition of electing to be included in Class
5, that such holder's payment under Class 5, like the other payment
recipients in Class 5, shall be in full satisfaction of all Claims
of the holder against Debtor and the Reorganized Debtor. The Class
5 Unsecured Claims may be prepaid in whole or part at any time,
without penalty. Class 5 is impaired.
Class 6 consists of Allowed General Unsecured Claims other than
Allowed Unsecured Claims included in Classes 5 and 7, and is
estimated to total $187,932 as of the Effective Date (exclusive of,
and after deducting from Class 6, the holders of Allowed Unsecured
Claims in Class 6 who are projected to elect to be included in
Class 5) (collectively, the "Class 6 Unsecured Claims").
Holders of Allowed Class 6 Unsecured Claims may elect to be
included in Class 5. The Reorganized Debtor shall pay each of the
holders of an Allowed Class 6 Unsecured Claim in full by making
two quarterly payments of principal and interest (at the Plan
Interest Rate, (Unsecured)) to each such Holder, which quarterly
payments shall begin on the fifth day of the second full month
following the Effective Date and repeat on the three month
anniversary of such date, with the second such payment paying any
remaining amount of each such Holder's Class 6 Unsecured Claim.
The Class 6 Unsecured Claims may be pre-paid in whole or part at
any time, without penalty, provided that any prepayments shall be
made pro rata to the members of the Class. Class 6 is impaired.
Class 7 consists of Large Unsecured Claims, and shall be comprised
of all Unsecured Claims that are allowed in an amount in excess of
$250,000) (the "Class 7 Large Unsecured Claims") and is estimated
to total approximately ($1,920,620.19) as of the Effective Date.
For purposes of the Plan, the portion of Latrobe's cure claim under
the Management Agreement which
accrued prior to the Petition Date shall be treated as a Class 7
Large Unsecured Claim, and this claim is included in the foregoing
estimate.
The Reorganized Debtor shall pay the Class 7 Large Unsecured Claims
in full by making 72 equal monthly payments of principal (which
payments shall begin on the fifth day of the first full month
following the Effective Date and continue on the fifth day of each
month thereafter).
The Large Unsecured Claims shall not accrue or be entitled to
interest.
The Class 7 Large Unsecured Claims may be prepaid in whole or in
part at any time, without penalty, provided that (i) any
prepayments shall be made pro rata to the members of the Class, and
(ii) no prepayments of the Class 7 Large Unsecured Claims shall be
made unless all Claims in Classes 5 and 6 have been paid or (in the
case of Disputed Claims) provided for. Class 7 is impaired.
The Plan is a reorganizing Chapter 11 plan. The funds required for
implementation of the Plan and the distributions under the Plan
shall be provided from (i) revenues from the regular operation of
the Debtor and the Reorganized Debtor; (ii) repayment of
obligations owing to Reorganized Debtor under the Intercompany
Loans (if any and as necessary), and (iii) deferral or accrual of
Plan payments otherwise due to insiders and/or affiliates under the
first two years of the Plan pursuant to Section 6.9 of the Plan.
Nothing in the Plan prohibits the Reorganized Debtor from
satisfying its obligations hereunder through other means, such as a
sale of its assets, a refinancing transaction or the like.
Counsel to YC Rivergold Hotel LLC
as Debtor and Debtor in Possession:
Austin K. Barron, Esq.
STEP TWO LAW
3300 Arctic Blvd. Ste. 201-1090
Anchorage, Alaska 99503
Tel: (877) 478-3789
E-mail: abarron@steptwolaw.com
A copy of the Disclosure Statement dated September 29, 2023, is
available at https://tinyurl.ph/XuKaj from PacerMonitor.com.
About YC Rivergold Hotel LLC
YC Rivergold Hotel LLC is part of the traveler accommodation
industry. The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Alaska Case No. 23-00072) on April 29,
2023. In the petition signed by Baldev Johal, special bankruptcy
officer of YC Rivergold Holtel, LLC and managing member of YC
Rivergold Hotel MM, LLC, the Debtor disclosed up to $50 million in
both assets and liabilities.
Judge Gary Spraker oversees the case.
Austin K. Barron, Esq., at Step Two Law, represents the Debtor as
legal counsel.
Wells Fargo, as lender, is represented by LANE POWELL LLC,
POLSINELLI PC, and Agentis PLLC.
ZELIS PAYMENTS: Moody's Affirms B2 CFR & Alters Outlook to Positive
-------------------------------------------------------------------
Moody's Investors Service revised Zelis Payments Buyer, Inc.'s
outlook to positive from stable. At the same time, Moody's affirmed
Zelis' B2 Corporate Family Rating, B2-PD Probability of Default
Rating, and B2 ratings of the backed senior secured first lien
revolving credit facility and backed senior secured first lien term
loan B.
The revision of the outlook from stable to positive reflects
significant deleveraging in recent quarters and Moody's expectation
that momentum will continue based on the company's current
pipeline. Moody's expects debt to EBITDA, which was 4.8x at June
30, 2023, to trend toward 4.0x over the next 12 to 18 months
barring additional debt funded acquisitions. The outlook also
reflects Moody's expectation that liquidity will remain very good,
with continued strong free cash flow generation.
The affirmation of the B2 CFR reflects Zelis' leading position
across numerous health care cost containment and payment services
markets, and track record of strong revenue and earnings growth.
RATINGS RATIONALE
Zelis' B2 CFR reflects moderate financial leverage, with Moody's
adjusted debt/EBITDA of 4.8x as of June 30, 2023. Moody's expects
the company's robust pipeline of new business, measured by new
bookings, will support continued deleveraging with debt to EBITDA
approaching 4.0x over the next 12 to 18 months. Further deployment
of the company's large cash balance into tuck in acquisitions could
be an additional tailwind on this front. Moody's believes that
demographic trends, medical cost inflation, and an increasingly
complex U.S. healthcare system will support continued demand for
the company's services. The rating is also supported by the
company's very good liquidity. Tempering these strengths, the
company has modest scale relative to its customers and competitors.
While recent acquisitions have been funded solely with internally
generated cash, Moody's believes Zelis may continue to pursue
larger debt-funded acquisitions if the opportunity arises, which
could lead to temporary increases in leverage.
Moody's anticipates that Zelis will maintain very good liquidity
over the next 12 to 18 months. This reflects cash on hand of $364
million, full availability on the company's $200 million revolver
at June 30, 2023, and Moody's expectation for more than $180
million of annual free cash flow over the next 12-18 months. There
are no material debt maturities until June 2026.
Zelis' backed senior secured first-lien debt (term loan and
revolver) is rated B2, the same as the CFR, as they represent the
preponderance of debt in the company's capital structure. The
co-borrowers under the credit facilities are Zelis Payments Buyer,
Inc. and Zelis Cost Management Buyer, Inc. Guarantors include
operating subsidiaries of both entities, as well as the
intermediate holding companies Zelis Payments Intermediate II, Inc.
and Zelis Cost Management Intermediate II, Inc. Security consists
of a first priority lien on all assets and pledge of the stock of
the borrowers and their subsidiaries.
Zelis's CIS-4 indicates the rating is lower than it would have been
if ESG risk exposure did not exist. Zelis has exposure to both
social risks (S-4) and governance considerations (G-4). The social
risk largely reflects the risk of potential legislative changes
that would reduce the demand for some of Zelis' services as a cost
and payment services manager. Zelis' exposure to governance
considerations reflects the company's aggressive financial policy
under private equity ownership evidenced by the company's history
of debt funded acquisitions. This is partly mitigated by
management's track record of consistently exceeding budget.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Ratings could be upgraded if Zelis maintains very good liquidity,
including strong free cash flow generation, while demonstrating
conservative financial policies, including leverage reduction.
Specifically, the ratings could be upgraded if adjusted debt to
EBITDA is sustained below 5.0x. The rating could also be upgraded
if Zelis successfully increases scale and diversity of its service
offerings.
Ratings could be downgraded if the company's operating performance
suffers due to customer losses, new competitive entrants, or
failure to effectively manage its rapid growth, including
integration-related setbacks. The ratings could also be downgraded
if the company undertakes significant debt-financed dividends or
acquisitions that materially increase leverage. Specifically, the
ratings could be downgraded if adjusted debt to EBITDA is sustained
over 6.0x or if liquidity were to erode.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
Zelis Payments Buyer, Inc. provides health care cost management and
payment services via contract arrangements between health insurance
companies, national and regional health plans and third party
administrators. The company offers cost management, pricing
guidelines and payment services. Zelis Payments Buyer, Inc. is
owned by Parthenon Capital, Bain Capital, founders and management.
Zelis Payments Buyer, Inc. generated approximately $1.3 billion of
revenues over the twelve months ended June 30, 2023.
[^] Recent Small-Dollar & Individual Chapter 11 Filings
-------------------------------------------------------
In re Clark Edward Parker
Bankr. C.D. Cal. Case No. 23-16758
Chapter 11 Petition filed October 16, 2023
represented by: Leslie Cohen, Esq.
In re Pirk Manhattan LLC
Bankr. E.D.N.Y. Case No. 23-43737
Chapter 11 Petition filed October 16, 2023
See
https://www.pacermonitor.com/view/KVCQQ7Q/Pirk_Manhattan_LLC__nyebke-23-43737__0001.0.pdf?mcid=tGE4TAMA
represented by: Lawrence Morrison, Esq.
MORRISON TENENBAUM PLLC
E-mail: lmorrison@m-t-law.com
In re Seth Haldane Casden
Bankr. C.D. Cal. Case No. 23-10953
Chapter 11 Petition filed October 17, 2023
represented by: John Tedford, Esq.
In re BAZD MEG LLC
Bankr. M.D. Fla. Case No. 23-04321
Chapter 11 Petition filed October 17, 2023
See
https://www.pacermonitor.com/view/4FBZQMQ/BAZD_MEG_LLC__flmbke-23-04321__0001.0.pdf?mcid=tGE4TAMA
Filed Pro Se
In re Eqramul Islam Chowdhury
Bankr. S.D. Fla. Case No. 23-18476
Chapter 11 Petition filed October 17, 2023
represented by: Magali Ferere, Esq.
In re Three Guys Roofing, Inc.
Bankr. S.D. Fla. Case No. 23-18506
Chapter 11 Petition filed October 17, 2023
See
https://www.pacermonitor.com/view/DUKR4IY/Three_Guys_Roofing_Inc__flsbke-23-18506__0001.0.pdf?mcid=tGE4TAMA
represented by: Brian K. McMahon, Esq.
BRIAN K. MCMAHON, PA
E-mail: briankmcmahon@gmail.com
In re Zenaida Pattugalan Estaris
Bankr. E.D.N.Y. Case No. 23-43755
Chapter 11 Petition filed October 17, 2023
In re Equity Trust Company Custodia FBO for Z1527507
Bankr. W.D.N.Y. Case No. 23-11038
Chapter 11 Petition filed October 17, 2023
See
https://www.pacermonitor.com/view/4JGORGA/Equity_Trust_Company_Custodia__nywbke-23-11038__0001.0.pdf?mcid=tGE4TAMA
represented by: Harry Konst, Esq.
KONST LAW
E-mail: konstlaw@gmail.com
In re Academia Santa Teresita De Naranjito, Inc.
Bankr. D.P.R. Case No. 23-03352
Chapter 11 Petition filed October 17, 2023
See
https://www.pacermonitor.com/view/5LDIY4Q/ACADEMIA_SANTA_TERESITA_DE_NARANJITO__prbke-23-03352__0001.0.pdf?mcid=tGE4TAMA
represented by: Carlos Alberto Ruiz, Esq.
LCDO. CARLOS ALBERTO RUIZ, CSP
E-mail:
carlosalbertoruizquiebras@gmail.com
In re Kristi's Grooming, LLC
Bankr. W.D. Wash. Case No. 23-11990
Chapter 11 Petition filed October 17, 2023
See
https://www.pacermonitor.com/view/4A6H4HQ/Kristis_Grooming_LLC__wawbke-23-11990__0001.0.pdf?mcid=tGE4TAMA
represented by: Thomas D. Neeleman, Esq.
NEELEMAN LAW GROUP, P.C.
E-mail: courtmail@expresslaw.com
In re LVL Technologies USA Inc.
Bankr. M.D. Fla. Case No. 23-04652
Chapter 11 Petition filed October 18, 2023
See
https://www.pacermonitor.com/view/OXQO7LA/LVL_Technologies_USA_Inc__flmbke-23-04652__0001.0.pdf?mcid=tGE4TAMA
represented by: Erik Johanson, Esq.
ERIK JOHANSON PLLC
E-mail: erik@johanson.law
In re Drilling Company, LLC
Bankr. M.D. Ga. Case No. 23-71060
Chapter 11 Petition filed October 18, 2023
See
https://www.pacermonitor.com/view/XP6KVKI/Drilling_Company_LLC__gambke-23-71060__0001.0.pdf?mcid=tGE4TAMA
represented by: Byron W. Wright III, Esq.
BRUNER WRIGHT, P.A.
E-mail: twright@brunerwright.com
In re Dean Welch and April Welch
Bankr. E.D. Mich. Case No. 23-31685
Chapter 11 Petition filed October 18, 2023
represented by: George Jacobs, Esq.
In re Stephen David Samost
Bankr. D.N.J. Case No. 23-19257
Chapter 11 Petition filed October 18, 2023
represented by: Douglas Leney, Esq.
In re Juan P. Lopez
Bankr. E.D.N.Y. Case No. 23-43776
Chapter 11 Petition filed October 18, 2023
represented by: Kevin Nash, Esq.
In re Soni Holdings LLC
Bankr. E.D.N.Y. Case No. 23-73863
Chapter 11 Petition filed October 18, 2023
See
https://www.pacermonitor.com/view/YGSWL6I/Soni_Holdings_LLC__nyebke-23-73863__0001.0.pdf?mcid=tGE4TAMA
represented by: Marc A. Pergament, Esq.
WEINBERG, GROSS & PERGAMENT LLP
E-mail: mpergament@wgplaw.com
In re Jam Pizza, Inc.
Bankr. N.D.N.Y. Case No. 23-30747
Chapter 11 Petition filed October 18, 2023
See
https://www.pacermonitor.com/view/MESI7XA/Jam_Pizza_Inc__nynbke-23-30747__0001.0.pdf?mcid=tGE4TAMA
represented by: Zachary D. McDonald, Esq.
ORVILLE & MCDONALD LAW, P.C.
In re KOFC Ltd.
Bankr. W.D. Tex. Case No. 23-51414
Chapter 11 Petition filed October 18, 2023
See
https://www.pacermonitor.com/view/GLCQEDA/KOFC_LTD__txwbke-23-51414__0001.0.pdf?mcid=tGE4TAMA
represented by: Morris E. "Trey" White III, Esq.
VILLA & WHITE LLP
E-mail: treywhite@villawhite.com
In re Joan Bauer
Bankr. C.D. Cal. Case No. 23-16872
Chapter 11 Petition filed October 19, 2023
represented by: Leslie Cohen, Esq.
In re Red Roof Inc.
Bankr. C.D. Cal. Case No. 23-16844
Chapter 11 Petition filed October 19, 2023
See
https://www.pacermonitor.com/view/NBAEKMI/Red_Roof_Inc__cacbke-23-16844__0001.0.pdf?mcid=tGE4TAMA
represented by: Kevin Tang, Esq.
TANG & ASSOCIATES
E-mail: kevin@tang-associates.com
In re Lake Spofford Cabins, Inc.
Bankr. D.N.H. Case No. 23-10569
Chapter 11 Petition filed October 19, 2023
See
https://www.pacermonitor.com/view/HRPDPNY/Lake_Spofford_Cabins_Inc__nhbke-23-10569__0001.0.pdf?mcid=tGE4TAMA
represented by: William J. Amann, Esq.
AMANN BURNETT PLLC
E-mail: wamann@amburlaw.com
In re Aracena Auto Center, LLC
Bankr. D.N.J. Case No. 23-19303
Chapter 11 Petition filed October 19, 2023
See
https://www.pacermonitor.com/view/WPVAMMA/Aracena_Auto_Center_LLC__njbke-23-19303__0001.0.pdf?mcid=tGE4TAMA
represented by: Carol L. Knowlton, Esq.
GORSKI & KNOWLTON PC
E-mail: cknowlton@gorskiknowlton.com
In re Fraleg Jefferson Corp
Bankr. E.D.N.Y. Case No. 23-43807
Chapter 11 Petition filed October 19, 2023
See
https://www.pacermonitor.com/view/SY2YKEY/Fraleg_Jefferson_Corp__nyebke-23-43807__0001.0.pdf?mcid=tGE4TAMA
Filed Pro Se
In re Pathways to Growth Counseling, PLLC
Bankr. W.D.N.C. Case No. 23-30729
Chapter 11 Petition filed October 19, 2023
See
https://www.pacermonitor.com/view/Y3GKACI/Pathways_to_Growth_Counseling__ncwbke-23-30729__0001.0.pdf?mcid=tGE4TAMA
represented by: Richard S. Wright, Esq.
MOON WRIGHT & HOUSTON, PLLC
E-mail: rwright@mwhattorneys.com
In re 1117 Chestnut Street LLC
Bankr. E.D. Pa. Case No. 23-13149
Chapter 11 Petition filed October 19, 2023
See
https://www.pacermonitor.com/view/AO5SOPQ/1117_Chestnut_Street_LLC__paebke-23-13149__0001.0.pdf?mcid=tGE4TAMA
represented by: Andre Dover, Esq.
KASHKASHIAN, DOVER & ASSOCIATES
E-mail: kashlaw@aol.com
In re Treeium Inc.
Bankr. C.D. Cal. Case No. 23-11515
Chapter 11 Petition filed October 20, 2023
See
https://www.pacermonitor.com/view/JWNMIIQ/Treeium_Inc__cacbke-23-11515__0001.0.pdf?mcid=tGE4TAMA
represented by: Michael Jay Berger, Esq.
LAW OFFICES OF MICHAEL JAY BERGER
E-mail:
michael.berger@bankruptcypower.com
In re Mario The Baker Downtown, Inc.
Bankr. S.D. Fla. Case No. 23-18594
Chapter 11 Petition filed October 20, 203
See
https://www.pacermonitor.com/view/O5SXEUA/MARIO_THE_BAKER_DOWNTOWN_INC__flsbke-23-18594__0001.0.pdf?mcid=tGE4TAMA
represented by: Thomas L. Abrams, Esq.
THOMAS L ABRAMS PA
E-mail: tabrams@tabramslaw.com
In re Keley Noel
Bankr. N.D. Ga. Case No. 23-60365
Chapter 11 Petition filed October 20, 2023
In re M AND J Home Improvement, Inc.
Bankr. D. Mass. Case No. 23-40874
Chapter 11 Petition filed October 20, 2023
See
https://www.pacermonitor.com/view/MOGVMJA/M_AND_J_Home_Improvement_Inc__mabke-23-40874__0001.0.pdf?mcid=tGE4TAMA
represented by: Christopher L. Murray, Esq.
MURRAY LAW FIRM, P.C.
E-mail: chris@danielmurraylaw.com
In re Trelorenz Stephens
Bankr. N.D. Miss. Case No. 23-13248
Chapter 11 Petition filed October 20, 2023
In re T and N Main Street Corp
Bankr. S.D.N.Y. Case No. 23-22774
Chapter 11 Petition filed October 20, 2023
See
https://www.pacermonitor.com/view/CNKGITI/T_and_N_Main_Street_Corp__nysbke-23-22774__0001.0.pdf?mcid=tGE4TAMA
Filed Pro Se
In re E. W. Grading Inc.
Bankr. E.D.N.C. Case No. 23-03027
Chapter 11 Petition filed October 20, 2023
See
https://www.pacermonitor.com/view/W5OU5ZI/E_W_Grading_Inc__ncebke-23-03027__0001.0.pdf?mcid=tGE4TAMA
represented by: David J. Haidt, Esq.
AYERS & HAIDT, PA
E-mail: david@ayershaidt.com
In re William Louis Carlton Holmes
Bankr. S.D. Tex. Case No. 23-34063
Chapter 11 Petition filed October 20, 2023
represented by: Terri Hanniable, Esq.
In re Leighton Joseph Wood and Cameron Page White-Wood
Bankr. D.S.C. Case No. 23-03188
Chapter 11 Petition filed October 21, 2023
represented by: Robert Pohl, Esq.
In re Richard M Curry
Bankr. M.D. Fla. Case No. 23-02420
Chapter 11 Petition filed October 23, 2023
represented by: Robert Chernicoff, Esq.
In re 21st Century Construction Technologies, LLC
Bankr. S.D. Fla. Case No. 23-18657
Chapter 11 Petition filed October 23, 2023
See
https://www.pacermonitor.com/view/DYDRH3I/21st_Century_Construction_Technologies__flsbke-23-18657__0001.0.pdf?mcid=tGE4TAMA
represented by: Robert A Gusrae, Esq.
THE LAW OFFICES OF ROBERT A GUSRAE
E-mail: gusraelaw@gmail.com
In re Adams Equity Partners LLC
Bankr. N.D. Ga. Case No. 23-60428
Chapter 11 Petition filed October 23, 2023
See
https://www.pacermonitor.com/view/DRQCUEI/Adams_Equity_Partners_LLC__ganbke-23-60428__0001.0.pdf?mcid=tGE4TAMA
Filed Pro Se
In re Andrew Michael Nye, II
Bankr. D. Md. Case No. 23-17643
Chapter 11 Petition filed October 23, 2023
represented by: Alan Eisler, Esq.
In re Campbell Sleep LLC
Bankr. E.D. Mo. Case No. 23-43819
Chapter 11 Petition filed October 23, 2023
See
https://www.pacermonitor.com/view/Y2SM6XY/Campbell_Sleep_LLC__moebke-23-43819__0001.0.pdf?mcid=tGE4TAMA
represented by: Thomas H. Riske, Esq.
CARMODY MACDONALD P.C.
E-mail: thr@carmodymacdonald.com
In re DeliverPRO LLC
Bankr. E.D. Mo. Case No. 23-43821
Chapter 11 Petition filed October 23, 2023
See
https://www.pacermonitor.com/view/ZN5YY4I/DeliverPRO_LLC__moebke-23-43821__0001.0.pdf?mcid=tGE4TAMA
represented by: Thomas H. Riske, Esq.
CARMODY MACDONALD P.C.
E-mail: thr@carmodymacdonald.com
In re Kim Evette Tolbert
Bankr. D. Nev. Case No. 23-14677
Chapter 11 Petition filed October 23, 2023
In re Freedom Labs and Diagnostics, LLC
Bankr. D. Nev. Case No. 23-14668
Chapter 11 Petition filed October 23, 2023
See
https://www.pacermonitor.com/view/WR64XLI/FREEDOM_LAB_AND_DIAGNOSTICS_LLC__nvbke-23-14668__0001.0.pdf?mcid=tGE4TAMA
represented by: David Riggi, Esq.
RIGGI LAW
E-mail: riggilaw@gmail.com
In re Affordable Logistics Inc.
Bankr. S.D.N.Y. Case No. 23-22782
Chapter 11 Petition filed October 23, 2023
See
https://www.pacermonitor.com/view/55UI6EY/Affordable_Logistics_Inc__nysbke-23-22782__0001.0.pdf?mcid=tGE4TAMA
represented by: Dawn Kirby, Esq.
KIRBY AISNER & CURLEY LLP
E-mail: dkirby@kacllp.com
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
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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
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The TCR subscription rate is $975 for 6 months delivered via
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Chapman at 215-945-7000.
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