/raid1/www/Hosts/bankrupt/TCR_Public/231108.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Wednesday, November 8, 2023, Vol. 27, No. 311
Headlines
25 JAY STREET: Case Summary & Four Unsecured Creditors
ACE INSULATION: Court OKs Cash Collateral Access Thru April 2024
ACE INSULATION: Hires Finestone Hayes LLP as Counsel
AEROTECH MIAMI: Plan Contemplates Two Scenarios
AGS PRO: Court OKs Cash Collateral Access on a Final Basis
AI AQUA: Moody's Rates New $950MM Incremental First Lien Loan 'B3'
ALPHA METALLURGICAL: Moody's Rates New Secured ABL Loans 'B1'
AMERICAN PHYSICIAN: Hires Bass Berry & Sims as Counsel
AMERICAN PHYSICIAN: Unsecureds Will Get 0.4% of Claims in Plan
ANA HOLDINGS: Egan-Jones Hikes Senior Unsecured Ratings to CCC+
ARAGORN PARENT: Moody's Assigns B2 CFR & Rates First Lien Loans B2
ARCHKEY HOLDINGS: Moody's Rates New $100MM Incremental Loan 'B2'
ART OF GRANITE: Seeks Cash Collateral Access
ASHFORD HOSPITALITY: Inks New Franchise Deal with Marriott
ATI INC: Egan-Jones Retains B Senior Unsecured Ratings
ATTASHIAN ENTERPRISES: Seeks Cash Collateral Access
AUDACY INC: Moody's Lowers CFR to Ca, Outlook Remains Negative
AVIENT CORP: Egan-Jones Retains BB- Senior Unsecured Ratings
BCR PINEWOOD: Unsecured Creditors Unimpaired in Plan
BH&G HOLDINGS: Lenders Seek to Prohibit Cash Collateral Access
BIG VALLEY: Amy Mitchell Named Subchapter V Trustee
BIOMARIN PHARMACEUTICAL: Egan-Jones Hikes Sr. Unsec. Ratings to BB
BITNILE METAVERSE: Changes Name to RiskOn International
BLACKBERRY LTD: Chen Steps Down as Executive Chair and CEO
BLOCK INC: Fitch Hikes LongTerm IDR to 'BB+', Outlook Positive
BOMBARDIER INC: Moody's Rates New Unsec. Notes Due 2030 'B2'
BRINKER INTERNATIONAL: Egan-Jones Retains B Sr. Unsecured Ratings
BROOKDALE SENIOR: Egan-Jones Retains CC Senior Unsecured Ratings
BUCKEYE TECHNOLOGIES: Egan-Jones Withdraws BB- Sr. Unsec. Ratings
BURDOCK AND ASSOCIATES: Hires Karen A. Hurney CPA as Accountant
C.W. KELLER: Gets OK to Sell Assets to CWK for $2.1MM
CAPSTONE GREEN: Plan Approval Hearing Moved to Nov. 13
CAST & CREW: Moody's Affirms 'B2' CFR & Alters Outlook to Negative
CEDAR FAIR: Moody's Puts 'B2' CFR on Review for Upgrade
CENTERPOINT RADIATION: No Patient Care Concern, 1st PCO Report Says
CENTRAL LOAN: Brian Foltyn Named Subchapter V Trustee
CENTRAL OKLAHOMA: U.S. Trustee Appoints Cori Loomis as PCO
CHESANING MFG: Hires CMM & Associates as Financial Advisor
CHESANING MFG: Hires Winegarden Haley as Legal Counsel
CM WIND: Egan-Jones Retains CCC+ Senior Unsecured Ratings
COEUR MINING: Egan-Jones Retains B+ Senior Unsecured Ratings
COMMUNITY HEALTH: Egan-Jones Retains CCC+ Senior Unsecured Ratings
CONSOLIDATED COMMUNICATIONS: Egan-Jones Retains B- Unsec. Ratings
CONTOUR PROPCO: No Resident Care Concern, PCO Report Says
CORUS ENTERTAINMENT: S&P Cuts ICR to 'B+' on Ad Revenue Pressure
COVENANT SURGICAL: S&P Downgrades ICR to 'CCC+', Outlook Negative
DENN-OHIO LLC: Wins Interim Cash Collateral Access
EMBECTA CORP: Moody's Affirms Ba3 CFR & Alters Outlook to Negative
EQUALTOX LLC: Court OKs Cash Collateral Access Thru Dec 13
EQUESTRIAN EVENTS: Trustee Hires Keller Williams as Broker
ESSY QUALITY: Amends IRS Claims Pay Details
EXPEDIA GROUP: Egan-Jones Hikes Senior Unsecured Ratings to BB
GOODLIFE PHYSICAL: No Change in Patient Care, 4th PCO Report Says
GREEN PLAINS: Egan-Jones Retains B- Senior Unsecured Ratings
GREENWAY HEALTH: Moody's Ups CFR to B3 & Alters Outlook to Stable
GRUPO HIMA: Gets OK to Sell Assets to Eastern Health for $5.3MM
HELLO ALBEMARLE: Hires Cam Property as Property Manager
HEYWOOD HEALTHCARE: Court OKs Cash Collateral Access Thru Dec 10
HEYWOOD HEALTHCARE: U.S. Trustee Appoints Joseph Tomaino as PCO
HILTON GRAND: Moody's Affirms Ba3 CFR & Cuts Secured Debt to Ba2
HILTON GRAND: S&P Places 'BB' ICR on CreditWatch Negative
IGIT LOGISTICS: Unsecured Creditors Will Get 100% of Claims in Plan
IMMANUEL SOBRIETY: Unsecureds' Recovery Hiked to 10.64% in Plan
INDIANA FINANCE: Moody's Rates 2023A/B Education Bonds 'Ba2'
IONIS PHARMACEUTICALS: Egan-Jones Retains B Sr. Unsecured Ratings
IVCINYA COMPANY: Has Deal on Cash Collateral Access
JETBLUE AIRWAYS: Egan-Jones Retains B- Senior Unsecured Ratings
JUICE ROLL UPZ: Wins Cash Collateral Access Thru Dec 6
KAI 786: Court OKs Cash Collateral Access Thru Jan 2024
LETS TALK INTERACTIVE: Hires Essex Richards as Local Counsel
LETS TALK INTERACTIVE: Hires Ward Damon P.L. as Counsel
LINCOLN NATIONAL: Egan-Jones Retains BB+ Senior Unsecured Ratings
LOCAL 8 INTERNATIONAL: Amy Mitchell Named Subchapter V Trustee
LOCAL 8 INTERNATIONAL: Hires Sussman Shank as Legal Counsel
LORDSTOWN MOTORS: $10.2M Sale to LandX Motors to Fund Plan
LUMEN TECHNOLOGIES: Egan-Jones Retains B Senior Unsecured Ratings
MARIO THE BAKER: Tarek Kiem of Kiem Law Named Subchapter V Trustee
MAXLINEAR INC: S&P Lowers ICR to 'BB-' on Revenue Volatility
MAYA J ATX: Seeks Cash Collateral Access
MERIDIAN RESTAURANTS: Hires Reinsman Consulting as Consultant
MORAN FOODS: Moody's Cuts CFR & Secured 1st Lien Term Loan to Caa2
MOUNT JOY BAPTIST: Hires Bray Financial as Loan Broker
MOUNT JOY BAPTIST: Hires NAI The Michael as Real Estate Broker
MOZ CORP: Cameron McCord Named Subchapter V Trustee
MP PPH LLC: Hires Raddatz & Associates LLC as Special Counsel
MUSCLEPHARM CORP: Seeks to Extend Exclusive Solicitation to Nov. 13
NAVIGANT DEVELOPMENT: Public Sale Set for Dec. 7
NEWELL BRANDS: Egan-Jones Retains BB- Senior Unsecured Ratings
NEWPARK RESOURCES: Egan-Jones Retains B- Senior Unsecured Ratings
OIL STATES: Releases Third Quarter 2023 Results
OILFIELD EQUIPMENT: Hires Moriah Real Estate as Real Estate Agent
OUTFRONT MEDIA: Egan-Jones Retains CCC Senior Unsecured Ratings
P2 OAKLAND: Hires Tang & Associates as Legal Counsel
PACKAGING COORDINATORS: Moody's Alters Outlook on 'B3' CFR to Pos.
PALACE CAFE: Hires Latter & Blum as Real Estate Broker
PAO BAY INVESTMENT: Hires Harbor Realty as Real Estate Broker
PGX HOLDINGS: Seeks to Extend Plan Exclusivity to January 2, 2024
PILL CLUB: Court Extends Solicitation to Nov. 30
POLLO FELIZ: Hires Edith Aimee Chavez as Bookkeeper
POMONA VALLEY: No Patient Complaints, 3rd PCO Report Says
PPWC ENTERPRISES: Court OKs Cash Collateral Access Thru Dec 8
PROASSURANCE CORP: Moody's Cuts Rating on Unsecured Notes to Ba1
PURE BIOSCIENCE: Raises Going Concern Doubt
PURE BIOSCIENCE: Reports Fiscal 2023 Financial Results
QUEBEC PARMENTIER: Canadian Court Issues CCAA Stay Order
QURATE RETAIL: Posts $12 Million Net Earnings in Third Quarter
R&J CLEANING: Hires Spiro & Browne PLC as Counsel
RALPH LAUREN: Egan-Jones Retains BB+ Senior Unsecured Ratings
RAM TELECOM: Nov. 30, 2023 Claims Filing Deadline Set
REVOLUTION ACADEMY: S&P Rates Education Rev. Refunding Bonds 'BB'
RIALTO BIOENERGY: Exclusivity Period Extended to December 21
ROCKPOINT GAS: Fitch Affirms and Withdraws 'B-' LongTerm IDR
SBA COMMUNICATIONS: Egan-Jones Retains B+ Senior Unsecured Ratings
SCOTTS MIRACLE-GRO: Egan-Jones Hikes Sr. Unsecured Ratings to B+
SIGNATURE BANK: Egan-Jones Retains B Senior Unsecured Ratings
SILGAN HOLDINGS: Egan-Jones Retains BB Senior Unsecured Ratings
SIX FLAGS: Egan-Jones Retains CCC+ Senior Unsecured Ratings
SIX FLAGS: Moody's Puts 'B2' CFR on Review for Upgrade
SLYNC: DSI to Conduct Auction Sale of Intellectual Property
SMILEDIRECTCLUB INC: Plan Contemplates Two Scenarios
SMYRNA READY: Moody's Affirms Ba3 CFR & Rates New Secured Notes Ba3
SMYRNA READY: S&P Rates New $1.1BB Senior Secured Notes 'BB-'
SONAVATION INC: Equity Sale Proceeds to Fund Plan
SONIC AUTOMOTIVE: Egan-Jones Retains BB Senior Unsecured Ratings
SOUTHWESTERN ENERGY: Egan-Jones Retains B+ Sr. Unsecured Ratings
SPECIALTY DENTAL: Quality of Care Maintained, 2nd PCO Reports
STONERIDGE INC: S&P Alters Outlook to Stable, Affirms 'B' ICR
STONY POINT: Seeks Court Nod to Sell NY Property for $499,999
TEAM HEALTH: Moody's Lowers CFR to 'Ca', Outlook Stable
TELEPHONE AND DATA: Egan-Jones Retains B+ Senior Unsecured Ratings
TNT INDUSTRIES: Court OKs Interim Cash Collateral Access
TUFFSTUFF FITNESS: Hires Levene Neale Bender as Counsel
ULTIMATE JETCHARTERS: Court OKs Interim Cash Collateral Access
UNDER ARMOUR: Egan-Jones Retains BB Senior Unsecured Ratings
VARSITY BRANDS: Moody's Rates New Secured First Lien Notes 'B2'
VELSICOL CHEMICAL: Taps GlassRatner Advisory as Financial Advisor
VERDE PURCHASER: Moody's Assigns First Time B1 Corp. Family Rating
WEATHERFORD INTERNATIONAL: S&P Ups ICR to 'B+' on Debt Repayment
WEWORK INC: Files Chapter 11 to Facilitate Restructuring
WILLIAMSBURG BOUTIQUE: Unsecureds Will Get 100% of Claims in Plan
WILLOWS AT THE LAKES: Seeks 90-Day Extension to Plan Exclusivity
WOLVERINE WORLD: Egan-Jones Retains B Senior Unsecured Ratings
YI LLC: Moody's Lowers CFR to Caa1 & Alters Outlook to Negative
ZEP INC: Moody's Withdraws 'Caa2' CFR Following Debt Repayment
ZYMERGEN INC: ARE-East River Appointed to Creditors' Committee
[*] Forshey Prostok Named in 2024 Edition of Best Law Firms List
[*] Sklar Kirsh LLP Named Best Law Firm by Best Lawyers
*********
25 JAY STREET: Case Summary & Four Unsecured Creditors
------------------------------------------------------
Debtor: 25 Jay Street LLC
77 Box Street
Brooklyn, NY 11222
Business Description: 25 Jay Street is a Single Asset Real Estate
debtor (as defined in 11 U.S.C. Section
101(51B)).
Chapter 11 Petition Date: November 7, 2023
Court: United States Bankruptcy Court
Eastern District of New York
Case No.: 23-44083
Judge: Hon. Elizabeth S. Stong
Debtor's Counsel: Joel M. Shafferman, Esq.
KUCKER MARINO WINIARSKY & BITTENS, LLP
747 Third Avenue
New York, NY 10017
Tel: 212-869-5030
Fax: 212 944-5818
Email: jshafferman@kuckermarino.com
Estimated Assets: $10 million to $50 million
Estimated Liabilities: $10 million to $50 million
The petition was signed by Joseph Torres, Jr. as managing member.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/G4F7CWI/25_Jay_Street_LLC__nyebke-23-44083__0001.0.pdf?mcid=tGE4TAMA
List of Debtor's Four Unsecured Creditors:
Entity Nature of Claim Claim Amount
1. Scarano Architects Services Rendered $26,600
156 East 83rd Street #A
New York, NY 10028
2. Solomon Rosenzweig Services Rendered $9,023
1465 East 16th Street
Brooklyn, NY 11230
3. US Small Business Admin $1,699,999
Office of General Counsel
409 Third Street, SW
Washington, DC 20416
4. Wellls Fargo Unknown
2001 Clayton Road
Concord, CA 94520
ACE INSULATION: Court OKs Cash Collateral Access Thru April 2024
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of California,
Santa Rosa Division, authorized Ace Insulation, Inc. to use cash
collateral on a final basis in accordance with the budget, through
April 30, 2024.
As adequate protection, the Internal Revenue Service will receive a
post-petition replacement lien on all cash collateral generated
postpetition to the same extent, validity and priority as the held
as of the petition date. The Debtor is authorized to make adequate
protection payments to the IRS as provided for in the Motion.
A copy of the court's order and the Debtor's budget is available at
https://urlcurt.com/u?l=XsYzCf from PacerMonitor.com.
The Debtor projects $1,344,910 in total income and $215,706 in
total expenses for November 2023.
About Ace Insulation, Inc.
Ace Insulation, Inc. is a locally owned and operated home
improvement company and spray insulation contractor.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Cal. Case No. 23-10495) on October 4,
2023. In the petition signed by Dwaine McCoy, president, the Debtor
disclosed $2,789,026 in total assets and $7,383,101 in total
liabilities.
Judge Charles Novack oversees the case.
Stephen D. Finestone, Esq., at Finestone Hayes, LLP, represents the
Debtor as legal counsel.
ACE INSULATION: Hires Finestone Hayes LLP as Counsel
----------------------------------------------------
Ace Insulation, Inc. seeks approval from the U.S. Bankruptcy Court
for the Northern District of California to employ Finestone Hayes
LLP as its general bankruptcy counsel.
The firm will render these services:
a. advise and represent the Debtor as to all matters and
proceedings within this Chapter 11 case, other than those
particular areas that may be assigned to special counsel;
b. assist, advise, and represent the Debtor in any manner
relevant to a review of its debts, obligations, maximization of its
assets and where appropriate, disposition thereof;
c. assist, advise, and represent the Debtor in the operation
of its business;
d. assist, advise, and represent the Debtor in the performance
of all of its duties and powers under the Bankruptcy Code and
Bankruptcy Rules, and in the performance of such other services as
are in the interests of the estate;
e. assist, advise, and represent the Debtor in dealing with
its creditors and other constituencies, analyzing the claims in
this case, and formulating and seeking approval of a plan of
reorganization.
The firm's hourly rate for partners is $610 and its rates for
associates and contract attorneys range from $400-$600.
The firm received a pre-petition retainer of $25,000 on May 19,
2023, and a second pre-petition retainer of $75,000 on September
12, 2013. As of the petition date, the firm was paid $40,814,17
from the retainer, leaving a retainer balance as of that date of
$59,185.83.
Stephen D. Finestone, Esq., a partner at Finestone Hayes 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 through:
Stephen D. Finestone, Esq.
Ryan A. Witthans, Esq.
Finestone Hayes LLP
456 Montgomery Street, Floor 20
San Francisco, CA 94104
Tel: (415) 421-2624
Fax: (415) 398-2820
Email: sfinestone@fhlawllp.com
rwitthans@fhlawllp.com
About Ace Insulation, Inc.
Ace Insulation, Inc. is a locally owned and operated home
improvement company and spray insulation contractor.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Cal. Case No. 23-10495) on October 4,
2023. In the petition signed by Dwaine McCoy, president, the Debtor
disclosed $2,789,026 in total assets and $7,383,101 in total
liabilities.
Stephen D. Finestone, Esq., at Finestone Hayes, LLP, represents the
Debtor as legal counsel.
AEROTECH MIAMI: Plan Contemplates Two Scenarios
-----------------------------------------------
Aerotech Miami Inc. d/b/a iAero Tech and its affiliates filed with
the U.S. Bankruptcy Court for the Southern District of Florida a
Disclosure Statement for Joint Plan of Reorganization dated October
30, 2023.
Founded in 1997 in Phoenix, Arizona by a prior owner, the "Swift
Air" business has evolved from a single corporate aircraft to a
full-service aviation enterprise, consisting of a fleet of
primarily 737 passenger and cargo aircraft.
As of the Petition Date, iAero Airways comprises the Debtors'
largest revenue-generating business segment. iAero Airways does not
own any real property, but leases corporate office space in
Greensboro, North Carolina, a hangar at the Piedmont Triad
International Airport in Greensboro, North Carolina as well as
terminal space at Miami International Airport. iAero Tech is
headquartered in and has historically operated primarily out of a
leased hangar and office space at Miami International Airport.
The primary goal of the Chapter 11 Cases is to significantly
deleverage the Debtors' balance sheets, continue to stabilize the
businesses and reject burdensome contracts in order to maximize the
value of the Debtors' estates for the benefit of their constituents
and preserve a viable going-concern operation through a
Restructuring Transaction consummated through a chapter 11 plan of
reorganization or a sale of some or all of the Debtors' assets
pursuant to section 363 of the Bankruptcy Code.
The Debtors and the Prepetition Secured Lenders engaged in a series
of arm's-length negotiations to come to an agreement on the
go-forward process for the Chapter 11 Cases. To implement a
comprehensive Restructuring Transaction, the Debtors and each of
the Prepetition Secured Lenders executed the Restructuring Support
Agreement, and negotiated the DIP Facility to provide cash to
administer the Chapter 11 Cases, fund the businesses and marketing
process, and allow the Debtors the ability to maintain their
optionality to either pursue a Sale Scenario or a Stakeholder
Reorganization Scenario, in either case, for the benefit of the
Debtors, their estates, their creditors and all other parties in
interest.
The Restructuring Support Agreement contemplates that the Debtors,
through the Chapter 11 Cases, shall proceed with a dual-track
process whereby the Debtors will simultaneously pursue (a) the
Stakeholder Reorganization Scenario, pursuant to which the Debtors
will seek to confirm a plan of reorganization under which certain
Consenting Stakeholders will (i) exchange a portion of their debt
for equity in the Reorganized Debtors and (ii) receive new secured
claims, or, alternatively, (b) the Sale Scenario, pursuant to which
the Debtors will run a marketing process to sell all or
substantially all of the Debtors' assets in accordance with certain
milestones and other terms set forth therein.
Class 8 consists of General Unsecured Claims. Holders of General
Unsecured Claims shall not receive or retain any property under the
Plan.
The Debtors' unsecured obligations primarily consist of trade debt.
As of the Petition Date, the Debtors estimate that their
outstanding trade payables aggregate approximately $36 million.
On the Effective Date, all Existing Equity Interests shall be
cancelled, released, and extinguished without any distribution.
The Debtors shall fund distributions under the Plan with: (a) Cash
on hand; (b) the Synovus 1L Exit Facility; (c) the BXC 2L Exit
Facility; (d) the New Equity Interests, and to the extent
applicable, the New Warrants; and (e) to the extent applicable,
Sale Proceeds.
A full-text copy of the Disclosure Statement dated October 30, 2023
is available at https://urlcurt.com/u?l=Gcsg0Q from Kroll
Restructuring Administration LLC, claims agent.
About Aerotech Miami Inc. d/b/a iAero Tech
AeroTech Miami Inc. sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Fla. Lead Case No. 23-17503) on
September 19, 2023. In the petition signed by Kevin Nystrom,
interim chief executive officer, the Debtor disclosed up to $50,000
in assets and up to $1 billion.
Judge Robert A. Mark oversees the case.
The Debtors tapped King & Spalding LLP as general bankruptcy
counsel, Berger Singerman LLP as co-counsel, AP Services, LLC as
restructuring services provider, Jefferies LLC as investment
banker, and Kroll Restructuring Administration LLC as notice and
claims agent.
AGS PRO: Court OKs Cash Collateral Access on a Final Basis
----------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California,
Los Angeles Division, authorized AGS Pro, Inc. to use cash
collateral on a final basis in accordance with the budget, through
the close of business on October 26, 2023.
As previously reported by the Troubled Company Reporter, the Debtor
needs to continue to use cash on hand, and monies generated from
its services, to preserve its assets and ongoing business
operations.
The Debtor believes the following parties have or may have security
interests in cash collateral: The Lee Andrews Living Trust, the
Jake Andrews Living Trust, and the Randy Andrews Living Trust and
Glacial Holdings, LLC.
Although the Debtor believes the Andrews Trusts and Glacial are
adequately protected by the continued operation of the Debtor's
business, the Debtor is proposing to grant the Secured Parties a
replacement lien on all of the estate's assets, excluding avoiding
power claims and recoveries, to the extent that the Debtor's use of
cash collateral results in a decrease in value of the Secured
Parties' interest, if any, in the Debtor's assets; provided,
however, that such replacement liens will only attach to the same
extent, validity, and priority of the Secured Parties' prepetition
liens against the Debtor's assets, and will not apply in the event
that any such prepetition liens ultimately are avoided.
The court said the Debtor will not be using cash collateral beyond
October 26, 2023, due to the order approving the "Stipulation to
Avoid Liens".
A copy of the order is available at https://urlcurt.com/u?l=ISRGbS
from PacerMonitor.com.
About AGS Pro, Inc.
AGS Pro, Inc. provides security services throughout the U.S. and
internationally with strategic alliance partnerships. Although
founded in 2017, the Debtor's team has been trusted in the security
industry by businesses across the country and around the world for
decades. The Debtor's services include commercial security, estate
security and special events. The Debtor's headquarters is located
at 6133 Bristol Parkway, Suites 175 and 280, Culver City,
California 90230.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. C. D. Cal. Case No. 23-12236) on April 13,
2023. In the petition signed by Lee Andrews, chief executive
officer, the Debtor disclosed up to $10 million in assets and up to
$50 million in liabilities.
Judge Deborah J. Saltzman oversees the case.
Aaron E. de Leest, Esq., at Danning, Gill, Israel & Krasnoff, LLP,
represents the Debtor as legal counsel.
AI AQUA: Moody's Rates New $950MM Incremental First Lien Loan 'B3'
------------------------------------------------------------------
Moody's Investors Service assigned a B3 rating to AI Aqua Merger
Sub, Inc.'s ("Culligan") proposed $950 million incremental senior
secured first lien term loan. All other ratings, including the
company's B3 Corporate Family Rating, B3-PD Probability of Default
Rating, and the B3 rating on the existing senior secured first lien
term loan due 2028 are unchanged. The stable outlook is not
affected.
Proceeds from the incremental term loan will be used to fund the
planned acquisition of a significant portion of Primo Water
Corporation's ("Primo") assets in continental Europe for $575
million ("Primo Europe"). The remaining proceeds will be used to
repay the outstanding balance on the $455 million revolving credit
facility that expires in July 2026, add excess cash to the balance
sheet, and pay transaction related expenses.
Primo announced on November 2, 2023 that it entered into a
definitive agreement whereby Culligan will acquire a significant
portion of Primo's international businesses. The transaction
excludes Primo's Aimia Foods, United Kingdom, Portugal, and Israel
businesses. The transaction is expected to close by December 31,
2023.
The transaction is initially credit negative because the
incremental debt will temporarily increase Culligan's debt/EBITDA
leverage from 6.6x (on a Moody's adjusted basis and as of the 12
months ended June 2023 estimated and pro-forma to include a full
year's earnings from the October 2022 Waterlogic acquisition) to
approximately 7.3x (as of the 12 months ended June 2023 pro forma
to include the proposed transactions and a full year's earnings
from the October 2022 Waterlogic acquisition). Moody's projects
debt/EBITDA leverage will fall to 6.4x by the end of 2023 (pro
forma for the Primo Europe acquisition) and that debt/EBITDA will
remain within the 6.0x to 7.5x range that Moody's expects for the
B3 CFR given the company's business and operating profile. Moody's
anticipates that integration risks will remain high as the company
continues to pursue aggressive growth through tuck-in acquisitions.
The financing transaction will improve liquidity as it will add
excess cash to the balance sheet and the revolver repayment will
give Culligan full availability on the revolving credit facility.
There is risk that excess cash could be used for dividends, though
Moody's does not expect this to be the case.
The acquisition will benefit the company as it brings greater
scale, recurring revenue and geographic diversification. Culligan
currently has significant operations in Europe and the acquisition
will increase density in existing regions. Moody's also expect the
company to generate cost synergies from the acquisition over the
next three years that will improve the overall margin.
RATINGS RATIONALE
Culligan's B3 CFR broadly reflects financial risks associated with
high financial leverage and an aggressive growth through
acquisition strategy. The company has a relatively short history of
operating at its current scope with revenue increasing about 5x-6x
since 2017. Culligan also has an aggressive growth strategy through
acquisitions that pressures free cash flow generation, and results
in weak quality of earnings, most recently acquiring Waterlogic
Group Holdings in October 2022 and now planning to acquire Primo
Europe. As the company grows in scale, a reduction in future
acquisition related costs relative to the earnings base should
support the company generating cash in 2025. Higher interest rates
are a cash flow headwind with approximately 40% of the company's
debt having floating interest rates, though Moody's anticipate
rising EBITDA will lead to modestly positive free cash flow in
2025. Offsetting these credit challenges is the company's large and
growing scale, strong market position, good segment
diversification, and high level of recurring revenue. The company's
good geographic and product diversification helps to mitigate
revenue and earnings volatility. Culligan also benefits from strong
market positions in the residential and commercial drinking water
markets with favorable long-term consumer demand trends driven by
increased consumer focus on health and safety through clean water,
the aging infrastructure, and sustainability including reducing
plastic waste. The company also occasionally receives support from
its financial sponsor through meaningful equity funding of
acquisitions.
Culligan's good liquidity is supported by full availability on the
$455 million revolver as well as excess cash of more than $200
million as of the quarter ended June 2023, pro forma for the
aforementioned transactions. Moody's assumes the excess cash
balance will be used to fund normal business operations and that
the rest is available to fund the cash flow deficit, term loan
amortization and acquisitions. Negative projected free cash flow of
approximately $170 million in the second half of 2023 and $45
million in 2024 is a liquidity weakness and will require the
company to utilize the excess cash and revolver to fund the deficit
and the approximate $43 million of required annual term loan
amortization. Liquidity will weaken if the company's acquisition
activity continues and is funded with cash on hand or the
revolver.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
The stable outlook is based on the expectation that Culligan will
continue to profitably grow its revenue scale and will maintain
adequate liquidity over the next 12-18 months to fund the higher
cash interest costs and growth investments. The stable outlook also
reflects Moody's view that the company will become free cash flow
positive in 2025 and continue to execute its acquisition strategy
prudently with minimal disruption both operationally and to credit
metrics while improving on its liquidity.
A rating downgrade could occur if the company's operating results
weaken, the company fails to generate positive free cash flow,
debt/EBTIDA is sustained above 7.5x, liquidity deteriorates for any
reason, or financial policies become more aggressive.
A rating upgrade could occur if the company sustainably achieves
organic revenue and EBITDA growth with a narrowing gap between
reported US GAAP and management-adjusted results (particularly
EBITDA). A ratings upgrade will also require consistent and
comfortably positive free cash flow generation, maintenance of good
liquidity, debt/EBITDA sustained below 6.0x, and financial
strategies that support credit metrics at those levels.
PRINCIPAL METHODOLOGY
The principal methodology used in this rating was Business and
Consumer Services published in November 2021.
COMPANY PROFILE
Headquartered in Rosemont, Illinois, AI Aqua Merger Sub, Inc. (dba
Culligan) through its subsidiaries operates as a global producer
and distributor of consumer water products and services to
household, commercial drinking water, and commercial solutions
end-markets. Since 2021, the company is majority owned by BDT & MSD
Partners, and it does not publicly disclose its financial
information. Culligan's revenue for the fiscal year 2023 is
estimated at approximately $3.0 billion, pro forma for acquisitions
and including Primo Europe.
ALPHA METALLURGICAL: Moody's Rates New Secured ABL Loans 'B1'
-------------------------------------------------------------
Moody's Investors Service assigned a B1 rating to Alpha
Metallurgical Resources, Inc.'s new senior secured ABL credit
facility. Moody's also simultaneously withdrew the B1 rating on
Alpha's prior senior secured ABL credit facility.
Alpha's B1 Corporate Family Rating, and probability of default
rating of B1-PD are unchanged. The company's Speculative Grade
Liquidity Rating ("SGL") of SGL-2 is unchanged. The rating outlook
remains stable.
RATINGS RATIONALE
Alpha's B1 CFR is constrained by the inherent volatility in the
metallurgical coal industry, and a relatively higher cost structure
vs. met coal peers. The rating also reflects ongoing regulatory
pressures on the coal mining industry in the United States,
inherent geological and operational risks associated with mining,
and heightened environmental and social risks associated with the
coal industry – including meaningful legacy liabilities, such as
asset retirement obligations related to the impact of coal mining
on the environment, black lung liabilities related to negative
health impacts on mining employees, and adverse policy risks in the
context of national decarbonization objectives.
The rating benefits from moderate operating diversity, meaningful
coal reserves, access to multiple transportation options, good
liquidity, and limited balance sheet leverage following
deleveraging over the past two years. The rating recognizes the
potential for strong earnings, cash flow generation, and credit
metrics when met coal prices are above mid-cycle levels. Continued
progress on reducing cash costs, together with reduction of legacy
liabilities creates the potential for much better resilience in
future commodity and/or economic downturns. Alpha experienced
substantial earnings compression and erosion of liquidity following
the global outbreak of Coronavirus in early 2020.
The B1 rating on the company's new senior secured asset-based
revolving credit facility reflects the first lien on substantially
all assets of the company and guarantees from all of Alpha's direct
and indirect subsidiaries. The new $155 million ABL, which has an
October 2027 maturity date, is governed by a borrowing base and is
subject to a $75 million minimum liquidity covenant.
The SGL-2 rating reflects good liquidity to support operations over
the next 12-15 months. As of Sep. 30, 2023, Alpha had $390 million
of available liquidity, comprised of $296 million of balance sheet
cash and $94 million availability under the old ABL facility. Pro
forma liquidity is similar, given the same size for the new and old
ABL facilities.
Moody's believes that investor concerns about the coal industry's
ESG profile are still intensifying and coal producers will be
increasingly challenged by access to capital issues. An increasing
portion of the global investment community is reducing or
eliminating exposure to the coal industry with greater emphasis on
moving away from thermal coal. A clear shift toward metallurgical
coal, compared to a legacy position more focused on thermal coal,
is a positive development for Alpha from an ESG standpoint.
However, debt capital could become more expensive, especially if
investors do not differentiate meaningfully between thermal and met
coal, and other business requirements, such as surety bonds, which
together will lead to much more focus on individual coal producers'
ability to fund their operations and articulate clearly their
approach to addressing environmental, social, and governance
considerations.
The stable outlook reflects Moody's expectation for stable
operational performance, little to no unadjusted debt, and positive
free cash flow generation under a range of met coal price
scenarios.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
Moody's could upgrade the rating with a sustained strength in met
coal pricing, and any material reduction in non-debt liabilities.
However, the magnitude of rating upside remains constrained by the
ESG and funding challenges faced by the sector over the long-run.
Moody's could downgrade the rating with expectations for adjusted
financial leverage above 2.0x, negative free cash flow, substantive
deterioration in liquidity, or further intensification of ESG
concerns that call into question the company's ability to handle
financing requirements or access capital markets on economic
terms.
Headquartered in Tennessee, USA, Alpha operates 21 metallurgical
coal mines and 8 coal preparation plants. The company also owns 65%
of Dominion Terminal Associates coal port in Newport News,
Virginia. Alpha's met coal production mix is comprised of Low-Vol,
Mid-Vol, High Vol A, and High Vol B coals. The company also
produces byproduct coal sold into thermal markets. Alpha generated
$3.3 billion of revenue for the twelve months ended Sep. 30, 2023.
The principal methodology used in this rating was Mining published
in October 2021.
AMERICAN PHYSICIAN: Hires Bass Berry & Sims as Counsel
------------------------------------------------------
American Physician Partners, LLC and its affiliates seek approval
from the U.S. Bankruptcy Court for the District of Delaware to
employ Bass, Berry & Sims PLC as special counsel.
The firm's services include:
(i) matters related to the sale of certain healthcare accounts
receivables of the Debtors in one or a series of transactions
conducted pursuant to section 363 of the Bankruptcy Code, including
assisting Pachulski Stang Ziehl & Jones LLP with negotiating and
drafting an asset purchase agreement, assisting with the closing of
a sale, as requested, and other related sale matters, as
requested;
(ii) matters related to U.S. Attorney request for documents and
information relative to certain Debtor entities operating in
Mississippi;
(iii) various employee plan issues including with regard to a
401(k) plan and a deferred compensation plan;
(iv) various litigation and how those claims are adjudicated as
part of these Cases;
(v) regulatory issues with regard to healthcare related
records;
(vi) regulatory and healthcare issues related to the transition
of healthcare providers;
(vii) various on-going contractual issues with the Debtors'
primary billing vendor; and
(viii) other matters incidental to the foregoing.
The firm will be paid at these rates:
Partners $600 to $1,100 per hour
Associates/Of counsel $325 to 650 per hour
Paralegals $225 to $400 per hour
As of the Petition Date, the Debtors owed Bass Berry $252,558.50
for fees and expenses. Bass Berry held $49,197.04 in retainer
funds.
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: Bass, Berry represented the client during the 12-
month period prepetition. The material financial
terms for the prepetition engagement remained the
same, as the engagement was hourly-based subject to
economic adjustment. The billing rates and material
financial terms for the postpetition period remain
the same as the prepetition period subject to an
annual economic adjustment. The standard hourly
rates of Bass, Berry are subject to periodic
adjustment in accordance with the Firm's practice.
Question: Has your client approved your prospective budget
and staffing plan, and, if so for what budget
period?
Response: The Debtors and Bass, Berry expect to develop a
prospective budget and staffing plan to comply with
the U.S. Trustee's requests for information and
additional disclosures, recognizing that in the
course of these large Chapter 11 Cases there may be
unforeseeable fees and expenses that will need to
be addressed by the Debtors and Bass, Berry.
Paul G. Jennings, Esq., a partner at Bass Berry & Sims PL,
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:
Paul G. Jennings, Esq.
Bass Berry & Sims PLC
150 Third Avenue South
Nashville TN 37201
Tel: (615) 742-6200
About American Physician Partners, LLC
American Physician Partners, LLC, is an emergency medicine
management company in Brentwood, Tenn.
American Physician Partners and its affiliates sought protection
under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead
Case No. 23-11469) on Sept. 18, 2023. In the petition signed by
its chief restructuring officer, John DiDonato, American Physician
Partners disclosed $100 million to $500 million in assets and $500
million to $1 billion in liabilities.
Judge Brendan L. Shannon oversees the cases.
Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, is
the Debtor's legal counsel.
AMERICAN PHYSICIAN: Unsecureds Will Get 0.4% of Claims in Plan
--------------------------------------------------------------
American Physician Partners, LLC, and its Affiliated Debtors
submitted an Amended Combined Disclosure Statement and Plan of
Liquidation dated October 30, 2023.
During the Chapter 11 Cases, the Debtors will sell, liquidate or
otherwise dispose of their remaining assets (primarily patient
receivables), and pursuant to the proposed Plan, the Debtors will
complete the orderly liquidation and wind-down of their business,
address pending claims, including litigation claims, and make
distributions to Creditors as efficiently as possible through the
liquidating Plan.
The Plan provides for, as of the Effective Date, a Liquidating
Trust to liquidate, collect, sell, or otherwise dispose of the
remaining assets of the Debtors' estates (the "Estates")
(including, without limitation, certain causes of action), if and
to the extent such assets were not previously monetized to Cash or
otherwise transferred or disposed of by the Debtors prior to the
Effective Date, and to distribute all net proceeds to Creditors
generally in accordance with the priority scheme under the
Bankruptcy Code other than the GUC Fund which shall be for the
benefit of general unsecured creditors subject to the terms of the
Plan and Liquidating Trust Agreement. There will be no
distributions to Holders of Interests.
As of the Effective Date, the Liquidating Trust will be funded with
all the remaining assets of the Debtors (referred to herein as
Distributable Assets) (except for certain carveouts including the
Professional Fee Reserve). In particular, under the Plan, there
will be a $250,000 GUC Fund, to be used solely to fund
Distributions to general unsecured creditors. In a Chapter 7
proceeding, absent such consent, general unsecured creditors would
likely receive no distribution on account of their claims. The Plan
further provides for the limited substantive consolidation of the
Debtors' Estates for the purposes of voting on the Plan by the
Holders of Claims and making Distributions to Holders of Claims.
Class 4 consists of Unsecured Claims. The allowed unsecured claims
total $50,000,000 to $82,000,000. This Class will receive a
distribution of 0.4%, plus any net value generated from certain
litigation. Holders of Class 4 Claims shall receive a Pro Rata
share of the Liquidating Trust Interests in exchange for their
Allowed Claims, which entitle the Beneficiaries thereof to a Pro
Rata share of the GUC Fund and a Pro Rata Share of any net proceeds
of the remaining Liquidating Trust Assets.
Unsecured Claims are subject to all statutory, equitable, and
contractual subordination claims, rights, and grounds available to
the Debtors, the Estates, and pursuant to the Plan, except as may
be expressly provided otherwise, the Liquidating Trustee, which
subordination claims, rights, and grounds are fully enforceable
prior to, on, and after the Effective Date. On account of the
Prepetition Lenders Deficiency Claim, the Holders of Class 2 Claims
also shall participate in recoveries from the Liquidating Trust of
the net proceeds of the Liquidating Trust Assets excluding the GUC
Fund.
There shall be no Distribution on account of Class 7 Interests.
Upon the Effective Date, all Interests will be deemed cancelled and
will cease to exist.
On or prior to the Effective Date, the Debtors shall open, or cause
to be opened, the Liquidating Trust Assets Account, the Liquidating
Trust Expense Reserve, the Professional Fee Escrow, and the
Administrative/Priority/Other Distributions Reserve, and a separate
account for the GUC Fund, and fund said accounts or reserves with
Available Cash on the Effective Date, all of which accounts and
reserves shall constitute Liquidating Trust Assets.
The GUC Fund may be used by the Liquidating Trustee solely to make
distributions to Holders of Allowed Class 4 Claims, excluding the
Prepetition Lenders Deficiency Claim, in accordance with the Plan
and Liquidating Trust Agreement.
On the Effective Date, the Liquidating Trust shall be established
pursuant to the Liquidating Trust Agreement for the purpose of,
inter alia, (a) administering the Liquidating Trust Assets, (b)
prosecuting and/or resolving all Disputed Unsecured Claims, (c)
investigating and pursuing any Causes of Action that constitute
Liquidating Trust Assets, and (d) making all Distributions to the
Beneficiaries provided for under the Plan.
A full-text copy of the Amended Combined Disclosure Statement and
Plan dated October 30, 2023 is available at
https://urlcurt.com/u?l=PG7YB4 from PacerMonitor.com at no charge.
Proposed Counsel for Debtors:
Laura Davis Jones, Esq.
David M. Bertenthal, Esq.
Timothy P. Cairns, Esq.
PACHULSKI STANG ZIEHL & JONES LLP
919 North Market Street, 17th Floor
P.O. Box 8705
Wilmington, Delaware 19899-8705
(Courier 19801)
Tel: 302-652-4100
Fax: 302-652-4400
E-mail: ljones@pszjlaw.com
dbertenthal@pszjlaw.com
tcairns@pszjlaw.com
About American Physician Partners
Headquartered in Brentwood, Tennessee, American Physician Partners
was founded in 2015 to provide a better alternative to hospitals
and healthcare systems for their clinical outsourcing needs. Since
its inception, the company grew to more than 160 practice sites and
became a recognized leader in the provision of exceptional
emergency medicine, hospital medicine, and critical care management
services to hospitals and healthcare systems nationwide. APP earned
its extensive growth by remaining true to its mission to support
its providers and hospital partners in providing safe,
compassionate, and efficient care to every patient, every time.
ANA HOLDINGS: Egan-Jones Hikes Senior Unsecured Ratings to CCC+
---------------------------------------------------------------
Egan-Jones Ratings Company on October 20, 2023, upgraded the
foreign currency and local currency senior unsecured ratings on
debt issued by Ana Holdings Inc. to CCC+ from CCC. EJR also
withdrew its 'B' rating on commercial paper issued by the Company.
Headquartered in Tokyo, Japan, Ana Holdings Inc. provides a variety
of air transportation-related services.
ARAGORN PARENT: Moody's Assigns B2 CFR & Rates First Lien Loans B2
------------------------------------------------------------------
Moody's Investors Service assigned to Aragorn Parent Corporation
(dba OverDrive) a B2 Corporate Family Rating, a B2-PD Probability
of Default Rating and B2 ratings to the existing backed senior
secured first lien credit facilities consisting of a $70 million
revolving credit facility due February 2025 and a $597 million term
loan B due August 2025. The outlook is stable.
Concurrently, Moody's withdrew all of Recorded Books Inc.'s (dba
RBmedia) ratings including its B3 CFR, B3-PD PDR and B3 ratings on
the senior secured first lien credit facilities in which the
co-borrowers were Recorded Books Inc., a direct wholly-owned
subsidiary of Gimli Holdings and Aragorn Parent Corporation, a
direct wholly-owned subsidiary of Aragorn Holding Corporation. The
outlook was changed to rating withdrawn from stable. The withdrawal
of the credit ratings follows KKR's sale of RBmedia to H.I.G
Capital which closed in August 2023.
Governance risks, including moderately aggressive financial
policies, were material to the rating action and remain a key
consideration to the ratings.
RATINGS RATIONALE
Aragorn Parent Corporation's (dba OverDrive) credit profile
reflects moderate operating scale, narrow product focus, and
elevated financial leverage under private equity ownership. While
the company serves a diverse client segment, public libraries
account for over 80% of total revenue. Uncertainty around public
libraries' funding levels and their ability to continue spending on
digital content could weigh on operating performance. This is
partially mitigated by 1 to 5-year contracts with the public
libraries allowing some earnings visibility. In addition, leverage
has remained elevated at above 6x due to debt-funded acquisition
and investments in the workforce, data governance and data
analytics. Moody's adjusted debt to cash EBITDA (adding back
amortization of product development costs and deducting cash paid
on product development costs) was 6.2x as of the last twelve months
ending June 2023. Moody's expects leverage to decline to 6.0x in
2023 and improve further to 5.6x in 2024 driven by growth in the
education and corporation segments.
OverDrive benefits from its solid market position in global
business-to-business digital content distribution, large customer
network of over 88,000 public libraries and schools, and broad
content catalog of more than 2 million ebooks, audiobooks, and
videos from more than 100,000 distinct publishers and imprints.
OverDrive's growth prospects are supported by the continuing shift
to digital content consumption, providing opportunities for the
company to expand its customer base and improve its services.
Moody's expects OverDrive to maintain good liquidity over the next
12-18 months supported by $57 million of cash holdings as of June
2023, $20-$30 million in annual free cash flow and access to an
undrawn $70 million revolving credit facility expiring in February
2025. These sources of cash will provide sufficient coverage for
basic cash needs, including annual interest expense of $55-$60
million, capital investments including product development costs of
$10-$13 million and working capital needs. Moody's does not expect
OverDrive to draw on the revolver over the next 12-18 months given
its cash flow generation.
OverDrive has a $70 million revolving facility that expires in
February 2025 and $597 million first lien term loan B due August
2025. There are no financial covenants under the term loan, and the
revolving credit facility has a springing net first lien leverage
covenant when 35% of the revolver is drawn. The covenant is set
wide, at 8.5x net first lien leverage with no step-downs, providing
significant cushion to the 4.9x leverage ratio as of the last
twelve months ending June 2023.
The B2 ratings on the first lien senior secured credit facilities
reflects the probability of default of the company, as reflected in
the B2-PD Probability of Default Rating and an average expected
family recovery rate of 50% at default given an all-bank debt
structure with a springing financial covenant that is only
applicable to the revolver.
OverDrive's ESG Credit Impact Score of CIS-4 indicates the rating
is lower than it would have been if ESG risk exposures did not
exist and that the negative impact is more pronounced than for
issuers scored CIS-3. While environmental and social risks are
limited, governance risk is the main driver due to an acquisitive
track record, a moderately aggressive financial strategy under its
private equity sponsor ownership and limited independent members of
the board.
The stable rating outlook reflects Moody's view that OverDrive will
expand revenue and EBITDA in the low-to-mid single digits over the
next 12-18 months driven by its strong position within the digital
media distribution business and steady demand for digital content.
Moody's further expects the company to reduce its leverage
primarily through EBITDA growth and refinance its senior secured
credit facilities well in advance of the 2025 maturities.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if OverDrive is able to diversify its
client segments to mitigate the significant reliance on the public
library end market and deliver consistent revenue and EBITDA growth
resulting in Moody's adjusted debt to cash EBITDA sustained below
4.0x and free cash flow to debt above 10%. Also, the company would
need to maintain a good liquidity position and exhibit prudent
financial policies.
The ratings could be downgraded if operating performance
deteriorates materially resulting from market share erosion or a
decrease in demand for digital content including ebooks and
audiobooks such that debt to cash EBITDA is sustained above 6.0x. A
shift to more aggressive financial policies including debt-funded
acquisitions or a deterioration in liquidity could also pressure
the ratings.
OverDrive is a digital content distribution platform primarily used
by public libraries, schools and corporations. The platform enables
customers to provide ebooks, audiobooks, streaming video, magazines
and other digital content to their patrons, students and employees
through the company's applications, including Libby, Sora and
Kanopy. In July 2021, OverDrive acquired Kanopy, a streaming video
platform for academic and public libraries that offers movies,
documentaries, foreign films, classic cinema, independent films and
educational videos. Revenue was $547 million for the last twelve
months ending June 2023. The company is majority-owned by
affiliates of Kohlberg Kravis Roberts & Co LP (KKR).
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
ARCHKEY HOLDINGS: Moody's Rates New $100MM Incremental Loan 'B2'
----------------------------------------------------------------
Moody's Investors Service assigned a B2 rating to ArchKey Holdings,
Inc.'s $100 million incremental senior secured first lien delayed
draw term loan, in line with the current rating for its first lien
credit facilities. ArchKey intends to use proceeds from the
issuance to fund a shareholder dividend.
ArchKey's B2 corporate family rating, B2-PD probability of default
rating and the B2 rating on its senior secured first lien credit
facilities are unchanged. The rating outlook remains unchanged at
stable.
RATINGS RATIONALE
Moody's expects ArchKey's credit metrics to remain commensurate
with the B2 rating even after accounting for the planned debt raise
and dividend payment. ArchKey's Moody's adjusted leverage was 3.5x
as of June 30, 2023, which is expected to increase by nearly 1.0x
proforma for the incremental term loan issuance. However, owing to
expected EBITDA growth over the next 18 months, leverage should
return to closer to current levels by year-end 2024. Moody's also
expects ArchKey to use a portion of its free cash flow generated
over the next 12-18 months for gross deleveraging, absent any
meaningful growth investment opportunities.
ArchKey's credit profile reflects its business concentration on
electrical infrastructure services and competition against large
contractors, potential volatility in earnings and cash flows due to
its undertaking of large projects, as well as the potential
acquisitions under its private equity ownership. ArchKey more than
doubled its revenues base and beefed up its capability to undertake
more complex electrical infrastructure projects nationwide, after
the acquisition of several regional electrical service companies
from 2018 to 2020. The company operates in the competitive
electrical contracting business with larger players. The
competitive bidding of large fixed-price electrical infrastructure
projects elevates the risk of cost overruns for smaller contractors
such as ArchKey. Its undertaking of large projects could also lead
to large swings in working capital, making cash flow generation
less predictable. In addition, satisfactory performance on large
projects is critical to stemming contingent liabilities associated
with performance bonds. Moody's expect the company will continue to
take on large projects alongside recurring service business and
augment its growth through acquisitions under the private equity
ownership.
ArchKey's credit profile is supported by the recurring demand from
maintaining, repairing and upgrading existing electrical
infrastructure, which together with small-ticket projects make up
nearly 60% of its gross profit. The company also benefits from
building new electrical infrastructure for data center, e-commerce
warehouse, commercial and industrial projects, which help mitigate
the decline in other commercial construction projects as a result
of the pandemic. Its operating performance has been in line with
expectation since the initial rating assignment in June 2021. Order
backlog of $1.8 billion as of September 30, 2023 offers sales
visibility over the next two years. Cost structure is highly
variable with a limited amount of fixed costs given the backlog
driven nature of its business. The company is able to generate
ample free cash flows given its low capital expenditure and
moderate debt burden, if it completes large projects on time and on
budget.
The stable outlook reflects Moody's expectation that ArchKey's
large order backlog and recurring maintenance and upgrade projects
will support its sales and earnings in the next 12-18 months.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
Factors that could lead to an upgrade
ArchKey's upside ratings potential is limited by its moderate scale
and limited diversity, but its ratings could be upgraded if it
demonstrates a track record of solid earnings growth and
strengthens its cash generating ability, as evidenced by FFO/debt
sustained above 20%, while maintaining good margins and a leverage
ratio (debt/EBITDA) below 4.0x.
Factors that could lead to a downgrade
A downgrade could occur if deteriorating operating results,
debt-financed acquisitions or shareholder distributions result in
the company's leverage ratio being sustained above 5.5x, or
FFO/debt sustained below 15%. A weakening of its liquidity profile
could also result in downward pressure.
ArchKey Holdings, Inc. headquartered in St. Louis, MO, is an
electrical services and technologies provider in the US. It has
amalgamated several regional electrical service companies and
technology providers since 2018. The company maintains
long-standing relationships with general contractors and undertakes
electrical services and installation projects for commercial &
industrial, data centers, health care, education, logistics &
distribution, and government customers. Its revenues amounted to
about $1.3 billion for the LTM period ended September 30, 2023. The
company is owned by One Rock Capital Partners LLC.
The principal methodology used in this rating was Construction
published in September 2021.
ART OF GRANITE: Seeks Cash Collateral Access
--------------------------------------------
Art of Granite Countertops, Inc. asks the U.S Bankruptcy Court for
the Middle District of Florida, Jacksonville Division, for
authority to use cash collateral nunc pro tunc to the commencement
of the case.
The Debtor believes White Road Capital, LLC d/b/a GFE Holdings may
allege an interest in cash collateral.
The Debtor believes the U.S. Small Business Administration may
allege an interest in the cash collateral despite its UCC-1 lien
filing possibly being defective for failing to properly identity
the Debtor's exact business corporate name in its filing.
The collateral securing payment to GFE and the SBA has a value of
around $9,200.
The Debtor has and will keep throughout this case all insurance
necessary and appropriate to protect the collateral which is
required in the ordinary course of the Debtor's business.
A copy of the motion is available at https://urlcurt.com/u?l=socDwX
from PacerMonitor.com.
About Art of Granite Countertops, Inc.
Art of Granite Countertops, Inc. provides countertops to various
contractors- for residential and commercial purposes. The Debtor
also provides services for de-fabricating existing countertops and
installing the newly ordered product.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. M.D. Fla. Case No. 3:23-bk-02706) on
November 2, 2023. In the petition signed by Marco Damas, president,
the Debtor disclosed up to $500,000 in assets and up to $1 million
in liabilities.
Donald M. DuFresne, Esq., at Parker & DuFresne, P.A., represents
the Debtor as legal counsel.
ASHFORD HOSPITALITY: Inks New Franchise Deal with Marriott
----------------------------------------------------------
Ashford Hospitality Trust, Inc. disclosed in a Form 8-K report that
the Company has entered into a new franchise agreement with
Marriott International to convert its Le Pavillon Hotel in New
Orleans, Louisiana, to a Tribute Portfolio property.
Marriott's Tribute Portfolio is a growing global family of
characterful, independent hotels drawn together by their passion
for captivating design and their drive to create vibrant social
scenes for guests and locals alike.
The agreement with Marriott calls for the Hotel to be converted to
a Tribute Portfolio property in the first quarter of 2024. The
inspirational theme Turning History on its Head will drive the
redesign and will bring this iconic historic hotel, with its rich
history in the NOLA culture, into the present-day. This vision will
be reflected throughout the redesigned property including extensive
exterior work upgrading the restaurant, guestrooms, guest
bathrooms, corridors as well as reimagining the hotel lobby bar.
Every element of the new Sazz Bar will draw inspiration from the
deep amber color of the New Orleans staple cocktail -- the Sazerac
-- to create a moody, modern bar drenched in hues of red and
orange. A lenticular art piece depicting two sides of a common
French icon -- a 'serious' and a 'spirited' Napoleon -- will fill
the back bar, serving as a reminder of the Hotel and the city's
historic ties to French culture and a symbol of the playful side of
NOLA.
This planned conversion will create a distinctive theme and style
for the luxury Hotel that is commensurate with the distinctive
premium brand Tribute Portfolio product. The Company believes that
post-conversion, the new Tribute Portfolio property should realize
a 10% to 20% RevPAR premium compared to a stabilized pre-conversion
basis. Remington Hospitality will continue to be the property
manager.
Located in the heart of downtown New Orleans on historic Poydras
Street, the 226-room Le Pavillon Hotel is known as the "Belle of
New Orleans." It sits adjacent to the historic French Quarter, is
located only four blocks from the celebrated music clubs of Bourbon
Street and is close to the famous restaurants and antique shops of
Royal Street. Originally the site of one of the area's first great
plantation homes, the Le Pavillon Hotel was built in 1907 and is a
member of Historic Hotels of America.
"With its prime location and proximity to major demand generators
in downtown New Orleans, the transformation of this landmark hotel
to a Tribute property is expected to elevate the hotel into a
desirable niche in the very attractive New Orleans market,"
commented Rob Hays, Ashford Trust's President and Chief Executive
Officer. "We remain focused on maximizing the value of our assets
and look forward to realizing an enhanced financial performance
from this property post conversion."
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.
As of September 30, 2023, the Trust had $3.7 billion in total
assets against $3.9 billion in total liabilities.
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.
ATI INC: Egan-Jones Retains B Senior Unsecured Ratings
------------------------------------------------------
Egan-Jones Ratings Company on October 17, 2023, maintained its 'B'
foreign currency and local currency senior unsecured ratings on
debt issued by ATI Inc. EJR also withdrew the rating on commercial
paper issued by the Company.
Headquartered in Dallas, Texas, ATI Inc. produces specialty
materials.
ATTASHIAN ENTERPRISES: Seeks Cash Collateral Access
---------------------------------------------------
Attashian Enterprises, LLC asks the U.S. Bankruptcy Court for the
District of Nevada for authority to use the cash collateral of U.S.
Small Business Association and Idea 247, Inc. and provide adequate
protection.
The Debtor requires the use of cash collateral to maintain and
operate its business.
The Debtor owes SBA approximately $514,000 and owes Idea
approximately $138,000.
The SBA lien is in first priority position and the Idea lien is in
second priority.
At the time the case was filed, the Debtor's personal property was
valued at $109,190, which includes cash and cash equivalents of
$22,222, Equipment valued at $70,468, inventory valued at $10,000
and other miscellaneous assets valued at $6,500.
The Debtor is willing to grant SBA and Idea a replacement lien
against all cash received by the Debtor post-petition.
A copy of the motion is available at https://urlcurt.com/u?l=lMjDE9
from PacerMonitor.com.
About Attashian Enterprises, LLC
Attashian Enterprises, LLC operates a transmission and auto repair
business in Reno, Nevada.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Nev. Case No. 23-50818) on November 1,
2023. In the petition signed by Pezant Peter Attashian, managing
member, the Debtor disclosed up to $500,000 in assets and up to $1
million in liabilities.
Kevin A. Darby, Esq., at Darby Law Practice, represents the Debtor
as legal counsel.
AUDACY INC: Moody's Lowers CFR to Ca, Outlook Remains Negative
--------------------------------------------------------------
Moody's Investors Service downgraded Audacy, Inc.'s (Audacy)
Corporate Family Rating to Ca from Caa2 and its Probability of
Default Rating to Ca-PD/LD from Caa2-PD. Moody's has appended the
limited default (/LD) designation to Audacy's PDR and will remove
the /LD designation in a few business days. Concurrently, the
ratings on the first lien credit facility and senior secured second
lien notes of Audacy Capital Corp. (a subsidiary of Audacy) were
downgraded to Ca and C from B2 and Caa3, respectively. The SGL-4
Speculative Grade Liquidity Rating remains unchanged. The outlook
remains negative.
The limited default designation reflects the extension of the
30-day grace period for the payment of interest on the 6.75% senior
secured second lien notes due March 2029, which Moody's considers a
distressed exchange, a default under Moody's definition. In
addition, Audacy disclosed that it intends to utilize the 30-day
grace period for the interest payment on its 6.5% senior secured
second lien notes due May 2027 and a 3-day grace period on its
senior secured credit facility due 2024. The downgrade of the CFR
reflects the high likelihood of further defaults and Moody's
expectation for below average recovery for the debt capitalization
at default.
Governance risks, including aggressive financial policies reflected
in the unsustainable capital structure, were material to the rating
action and remain a key consideration to the ratings.
RATINGS RATIONALE
Audacy's Ca CFR reflects a high probability of a debt restructuring
as the company continues to negotiate with lenders to pursue a more
sustainable capital structure and Moody's expectation for a lower
than average recovery for the debt capitalization at default. The
rating also reflects Audacy's extremely high financial leverage of
25.0x (excluding Moody's standard lease adjustments) as of the
twelve months ended June 2023 impacted by a pullback in radio
advertising spend amid a challenging macroeconomic environment.
Audacy's SGL-4 rating reflects near term debt maturities which will
likely result in a restructuring of the capital structure. The
company has $75 million accounts receivable facility due July 2024,
$227.3 million revolving credit facility due August 2024 and $632
million term loan B2 due November 2024. The availability under the
revolver was $0.9 million net of $219 million outstanding and $7.5
million in letters of credit as of June 2023. Audacy had $80.7
million of cash on the balance sheet with negative free cash flow
of $132 million in the LTM period.
The senior secured first lien bank debt is rated Ca. The second
lien notes are rated C, one notch below the CFR due to the
seniority of the first lien debt in the debt structure.
Audacy's ESG Credit Impact Score is of CIS-5 is driven by the
company's financial policy that tolerates very high financial
leverage and approaching debt maturities.
The negative outlook reflects weak liquidity, very high risk of
debt restructuring and the risk that recovery could be weaker than
Moody's expectation.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be downgraded if Moody's lowers its view on
expected recoveries.
The ratings could be upgraded if the company reduces debt
sufficiently to achieve a tenable capital structure with improved
liquidity, a lower probability of default and an expectation for a
stronger recovery at default.
Audacy, Inc. (fka Entercom Communications Corp.), headquartered in
Philadelphia, PA, is the second largest US radio broadcaster based
on revenue. The company was founded in 1968 by Joseph M. Field and
is focused on radio broadcasting with radio stations in large and
mid-sized markets as well as podcasting, digital initiatives, and
live events. In November 2017, the company completed the merger of
CBS Radio. Joseph M. Field and David J. Field (President /CEO and
son of the founder) have a significant minority voting interest in
the company. As of last twelve months ended June 2023, revenue
totaled $1.2 billion.
The principal methodology used in these ratings was Media published
in June 2021.
AVIENT CORP: Egan-Jones Retains BB- Senior Unsecured Ratings
------------------------------------------------------------
Egan-Jones Ratings Company on October 24, 2023, maintained its
'BB-' foreign currency and local currency senior unsecured ratings
on debt issued by Avient Corporation. EJR also withdrew the rating
on commercial paper issued by the Company.
Headquartered in Avon Lake, Ohio, Avient Corporation is an
international polymer services company with operations in North
America, Europe, Asia, Australia, and South America.
BCR PINEWOOD: Unsecured Creditors Unimpaired in Plan
----------------------------------------------------
BCR Pinewood Realty LLC filed with the U.S. Bankruptcy Court for
the Southern District of New York a Combined Chapter 11 Plan of
Reorganization and Disclosure Statement dated October 29, 2023.
The Debtor is a Delaware limited liability company formed on
February 18, 2011 and solely owned by BCR Lakewood Holdings LLC
("Holdco").
The Debtor is the fee simple and title owner of the Property. The
Debtor purchased the Property in May 2011 from the David Ringel
Revocable Trust and the Klara Ringel Revocable Trust in a
structured transaction for $8 million in cash and annuity payments
to Klara Ringel for life. Benjamin Ringel and Chana Ringel act as
Co-Managing Members of both the Debtor and Holdco.
On the Petition Date, the Debtor commenced the Chapter 11 Case for
the purpose of maximizing the value of the Debtor's sole asset and
expeditiously consummating a sale of the Property, either via the
Stalking Horse Purchase Agreement and consummation of the sale to
Rushmore as the Stalking Horse Purchaser, or via the marketing of
the Property and the sale to another Purchaser. To that end, the
Debtor has begun having discussions with JLL to market the Property
and effectuate a sale pursuant to Section 363 of the Bankruptcy
Code.
The Plan contemplates a sale or other disposition of the Property
in accordance with the Sale Procedures upon either (i) the
consummation of the previously agreed upon sale of the Property to
Rushmore Capital, LLC as the Stalking Horse Purchaser or (ii) the
completion of a marketing process in accordance with the Sale
Procedures and pursuant to the terms of a Purchase and Sale
Agreement between the Debtor and a Purchaser, the proceeds of which
would be used to satisfy all Allowed Claims and Allowed Interests
in full.
Class 3 consists of all General Unsecured Claims. Except to the
extent that a Holder of a General Unsecured Claim has agreed with
the Debtor to a different treatment of such Claim, each such Holder
shall receive, in full satisfaction of such Allowed General
Unsecured Claim, Cash in an amount equal to such Allowed General
Unsecured Claim, on or as soon as reasonably practicable after the
later of (i) the Effective Date; and (ii) the date the General
Unsecured Claim becomes an Allowed Claim, including if such General
Unsecured Claim becomes Allowed after the Effective Date. Class 3
is Unimpaired under the Plan.
Class 4 consists of all Holders of Interests in the Debtor. On the
Effective Date, each Holder of an Interest in the Debtor shall
receive interests in the Reorganized Debtor in the same number,
proportion or percentage, as applicable, and with identical rights
with respect to the Reorganized Debtor as the Interests such holder
held in the Debtor as of the Effective Date. Class 4 is Unimpaired
under the Plan.
The Debtor shall fund distributions and satisfy applicable Allowed
Claims and Allowed Interests under the Plan with respect to the
Sale Transaction using Cash on hand and the Asset Sale Proceeds.
A full-text copy of the Combined Plan and Disclosure Statement
dated October 29, 2023 is available at
https://urlcurt.com/u?l=R2uY9m from PacerMonitor.com at no charge.
Counsel to the Debtor:
Andrew K. Glenn, Esq.
GLENN AGRE BERGMAN & FUENTES, LLP
55 Hudson Yards, 20th Floor
New York, NY 10001
Telephone: (212) 358-5600
Email: aglenn@glennagre.com
About BCR Pinewood Realty
BCR Pinewood Realty is a real estate lessor in New Jersey.
BCR Pinewood Realty LLC filed its voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y. Case No.
23-22655) on Sep. 7, 2023. The petition was signed by Benjamin
Ringel as co-managing member of the Debtor. At the time of filing,
the Debtor estimated $10 million to $50 million in both assets and
liabilities.
Andrew K. Glenn, Esq. at GLENN AGRE BERGMAN & FUENTES LLP
represents the Debtor as counsel.
BH&G HOLDINGS: Lenders Seek to Prohibit Cash Collateral Access
--------------------------------------------------------------
Trez Capital Funding II, LLC and Trez Capital Winston, LP ask the
U.S. Bankruptcy Court for the District of Nevada to prohibit BH&G
Holdings, LLC from using their cash collateral.
Trez's interest in the Property and claim in this Case are based on
a Loan Agreement and Promissory Note dated July 21, 2021 executed
by the Debtor in favor of Trez in the amount of $64.560 million.
The Note is secured by a properly perfected senior Deed of Trust,
Security Agreement and Fixture Filing with Assignment of Rents and
Leases on the Property, and recorded at instrument no.
20210721-0003296 in Clark County, Nevada on July 21, 2021.
Additionally, on November 5, 2021, as Assignment of Note, Loan
Agreement, Deed of Trust, Liens and Other Loan Documents was made
by Trez Capital (2015) Corporation and Trez Capital Funding II, LLC
to Trez Capital Winston LP and recorded in Clark County, Nevada,
instrument no. 20211105-0000991. As of July 12, 2023, the Debtor
was indebted to Trez for no less than $26.395 million plus
additional interest and fees that have accrued since. No payments
have been made by Borrower to Trez since July 2022.
The Debtor failed to make the payments due in July of 2022, among
other defaults and in August and September 2022, the project came
to a halt when the general contractor walked off the Property. On
August 11, 2022, Trez recorded a notice of a default and election
to sell under its Deed of Trust. Prior to its scheduled January 10,
2023, foreclosure sale, the MGP Parties filed suit in Nevada state
court and obtained a TRO preventing the foreclosure. Ultimately,
after 4 days of trial, the state court denied the MGP Parties'
motion to convert the TRO into a preliminary injunction. Upon
request for a stay of its ruling, the state court then granted a
stay to the MGP Parties through October 31, 2023, provided they
posted a bond of $1.334 million. Rather than posting the bond, on
the day before the scheduled August 10, 2023 foreclosure, the MGP
Parties filed an involuntary case against BH&G when they were not
able to attain required consent of a member of the BH&G to do file
a voluntary bankruptcy case.
Trez does not consent to use of its cash collateral by BH&G under
the Funds Disbursement Services Agreement dated March 8, 2022 or
any related document. Trez does not believe that BH&G had authority
to enter into the Participation Agreement, the CMD Agreement or the
construction contract attached to the Declaration of Greg Arnold.
BH&G (and the MGP Parties) have ignored Trez's Power of Attorney
and they have generally made it clear that they will not review and
allow Trez to participate in the disbursement of funds (or any
other matter) related to the Water Arch Culvert Project.
Trez does not consent to the use of its cash collateral and asks
that the Court to prohibit the use of any funds under the FDSA and
related agreements.
Alternatively, Trez asks that the Court grant Trez adequate
protection in the form of recognition that Trez can exercise its
Power of Attorney and step into the shoes of BH&G in all respects
regarding the FDSA.
A copy of the motion is available at https://urlcurt.com/u?l=5BLopF
from PacerMonitor.com.
About BH&G Holdings, LLC
BH&G Holdings, LLC is a Single Asset Real Estate as defined in 11
U.S.C. ection 101(51B).
MGP Apex 582 Multifamily LLC, MGP Apex 582 Guaranty, LLC, and MGP
Apex582 Development, LLC filed an involuntary Chapter 11 case
against the Debtor (Bankr. D. Nev. Case No. 23-13321) on August 9,
2023.
Blakeley E. Griffith, Esq., at Snell & Wilmer, LLP, represents the
Debtor as legal counsel.
BIG VALLEY: Amy Mitchell Named Subchapter V Trustee
---------------------------------------------------
The Acting U.S. Trustee for Region 18 appointed Amy Mitchell of
Comcast Corp. as Subchapter V trustee for Big Valley Builders,
Inc.
Ms. Mitchell will be paid an hourly fee of $425 for her services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Ms. Mitchell declared that she is a disinterested person according
to Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Amy Mitchell
P.O. Box 2289
Lake Oswego, OR 97035
Phone: (503) 675-9955
Fax: (503) 675-9977
Email: mitchelltrustee@comcast.net
About Big Valley Builders
Big Valley Builders, Inc. is part of the residential building
construction industry.
Big Valley Builders, Inc. filed its voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bankr. D. Ore. Case No.
23-61913) on Oct. 18, 2023. At the time of filing, the Debtor
reported $5,980,581 in assets and $5,169,520 in liabilities.
Judge Thomas M. Renn oversees the case.
Loren S. Scott, Esq. at The Scott Law Group represents the Debtor
as counsel.
BIOMARIN PHARMACEUTICAL: Egan-Jones Hikes Sr. Unsec. Ratings to BB
------------------------------------------------------------------
Egan-Jones Ratings Company on October 23, 2023, upgraded the
foreign currency and local currency senior unsecured ratings on
debt issued by BioMarin Pharmaceutical Inc. to BB from BB-. EJR
also withdrew the rating on commercial paper issued by the
Company.
Headquartered in Novato, California, BioMarin Pharmaceutical Inc.
develops and commercializes therapeutic enzyme products.
BITNILE METAVERSE: Changes Name to RiskOn International
-------------------------------------------------------
BitNile Metaverse, Inc. disclosed in Form 8-K Report filed with the
Securities and Exchange Commission that on October 30, 2023, the
Company, filed an amendment to its Articles of Incorporation with
the State of Nevada to change its name to RiskOn International,
Inc., effective November 1, 2023. In accordance with Section 78.390
of the Nevada Revised States, the articles of incorporation may be
amended to change the name of a corporation with only the approval
of the board of directors, and without the approval of the
stockholders.
The Company's common stock continues to be quoted on The Nasdaq
Capital Market, but beginning with the opening of trading on
November 1, 2023, trading was under the new symbol "ROI". Following
the Name Change, existing stock certificates, which reflect the
Company's prior corporate name, will continue to be valid.
Certificates reflecting the new corporate name will be issued in
due course as old stock certificates are tendered for exchange or
transfer to the Company's transfer agent.
The change in both name and ticker are underscored by the Company's
commitment to developing a vertically integrated community while
creating a seamless and enriched user experience.
About BitNile Metaverse
Founded in 2011, BitNile Metaverse (formerly Ecoark Holdings, Inc.)
-- is a holding company, incorporated in the State of Nevada on
November 19, 2007. The Company's principal subsidiaries consisted
of (a) BitNile.com, Inc., a Nevada corporation which includes the
platform BitNile.com and that was acquired by the Company on March
6, 2023, which transaction has been reflected as an asset purchase,
and (b) Ecoark, Inc., a Delaware corporation that is the parent of
Zest Labs and Agora.
BitNile Metaverse reported a net loss of $87.36 million on zero
revenue for the year ended March 31, 2023, compared to a net loss
of $10.55 million on $27,182 of revenues for the year ended March
31, 2022. As of March 31, 2023, the Company had $23.77 million in
total assets, $37.72 million in total liabilities, and a total
stockholders' deficit of $13.94 million.
New York, New York-based RBSM LLP, the Company's auditor since
2019, issued a "going concern" qualification in its report dated
July 14, 2023, citing that the Company has suffered recurring
losses from operations and had an accumulated deficit that raises
substantial doubt about its ability to continue as a going
concern.
BLACKBERRY LTD: Chen Steps Down as Executive Chair and CEO
----------------------------------------------------------
John Chen, Executive Chair and CEO of BlackBerry Limited, has
retired from the Company effective November 4, 2023. This aligns
with the terms of Chen's contract and follows the conclusion of the
Project Imperium evaluation. Richard (Dick) Lynch has succeeded
Chen as Board Chair and will also serve as Interim Chief Executive
Officer while BlackBerry completes its search for a permanent CEO.
"The BlackBerry Board of Directors would like to express its
gratitude to John for his decade of strong leadership. His
achievement of saving BlackBerry and repositioning it as a software
company with leading Cybersecurity and IoT technologies has been
remarkable," said Prem Watsa, Lead Director of the BlackBerry
Board.
"It has been an honor to lead and transform this iconic company
over the past decade. I'm proud to have been able to establish
BlackBerry's vision of a trusted, software-defined world and to
position the company to unlock value through the separation of our
core business units into two separate operating companies," said
Chen. "I want to thank everyone across the BlackBerry community --
the Board, employees, customers, partners, and more – for your
support during my tenure and wish the company every success in the
future."
"I have known John Chen for almost two decades and have always been
impressed with his focus and leadership. I want to thank John for
his accomplishments and dedication to BlackBerry during a critical
era for the Company," said Mike Daniels, Chair of the Compensation,
Nomination and Governance Committee of the BlackBerry Board.
"The Board has determined that it is in the best interests of the
company to appoint interim executive management to provide
continued stability and continuity for BlackBerry as we work
through the transition to a new permanent CEO," said Watsa. "With
his deep industry experience and strong leadership track record,
Dick is well-positioned to continue advancing our strategy with the
Board's ongoing support and insight."
Lynch joined the BlackBerry Board in 2013 and serves as a member of
its Compensation, Nomination and Governance Committee. He
previously served as Executive Vice-President and Chief Technology
Officer of Verizon Communications and Verizon Wireless. He is a
director of Cohere Technologies and Iconectiv and has served as
Chairman of Ribbon Communications and as a director of Ruckus
Wireless.
About BlackBerry
Headquartered in Waterloo, Ontario, BlackBerry Limited (NYSE: BB;
TSX: BB) provides intelligent security software and services to
enterprises and governments around the world.
As of Aug. 31, 2023, the Company had $1.613 billion in total assets
against $784 million in total liabilities.
In September 2023, Egan-Jones Ratings Company maintained its 'CCC'
foreign currency and local currency senior unsecured ratings on
debt issued by BlackBerry Limited.
BLOCK INC: Fitch Hikes LongTerm IDR to 'BB+', Outlook Positive
--------------------------------------------------------------
Fitch Ratings has upgraded the Long-Term Issuer Default Rating
(IDR) for Block, Inc. to 'BB+' from 'BB'. The Rating Outlook is
Positive, reflecting Fitch's expectation for continued robust
earnings growth and lower leverage in the next few years that could
position the company much more strongly versus its historic
financial profile. The ratings impact approximately $5.0 billion of
debt outstanding at September 2023, not including undrawn capacity
on the company's $775 million senior unsecured revolver.
Fitch views Block as a market leader in fintech, with significant
growth potential in its home market in the U.S. and abroad. It
executed well historically in scaling its two core segments, Square
and Cash App, but the company still remains a reasonably small
player in the U.S. payments processing and financial services
markets.
KEY RATING DRIVERS
Growth Profile: Fitch believes Block is well positioned to
capitalize on secular growth areas in payments and consumer
financial services. It is among the U.S. market leaders in small
business point of sale (POS) hardware-software solutions and has
quickly become one of the U.S. leaders in peer-to-peer payments and
crypto trading. Block witnessed tremendous growth over the past
decade, with gross profit approaching more than $7.0 billion versus
$370 million in 2015. Gross profit is a key metric to focus on
given that the bitcoin trading business has grown significantly
since 2018 and skews reported revenue, with bitcoin transactions
reported on a gross basis.
Improved Leverage: EBITDA leverage improved materially to mid-3.0x
as profitability improved over the past year, driven by solid
revenue growth and a tighter focus on operating expenses. Leverage
could trend below 3.0x via a combination of EBITDA growth and
potentially lower debt in the future. However, the rapidly growing
lending business (both Square Loans and buy now, pay later [BNPL])
will affect financing needs and leverage over time. BNPL is
financed via cash flow and warehouse funding facilities currently.
Block also operates with net cash although this could change over
time.
Strong Financial Flexibility: Block benefits from: (i) positive FCF
generation since 2017 (high EBITDA conversion), (ii) $6.7 billion
of cash and investments, and (iii) $2.5 billion of revolver and
warehouse facilities. However, the acquired Afterpay business and
newer banking services require higher funding than Block's Square
business and will necessitate more funding needs over time. Block
also had $308 million of bitcoin and equity securities as of
September 2023.
Beneficiary of Secular Payments Shift: Block benefits from an
industry shift away from cash to electronic forms of payment, which
Fitch believes will provide a continued revenue tailwind in the
coming years. According to the Nilson Report, card usage is
approaching 80% of U.S. payments volumes and will continue to grow
as a portion of overall spending. Block serves the physical and
omni-channel retail POS markets as well as digital app-based
payments that continue to benefit from a broader adoption of
digital and mobile-based payments.
Profitability Below Peers: Fitch views Block's profitability as a
limiting factor for the IDR, as the company continues to invest
heavily to grow its Square and Cash App businesses and Fitch is
uncertain of the investment outlook over the medium term. Fitch
believes Cash App is less profitable at the EBITDA level than
Square but is scaling meaningfully. However, high incremental
margins typical for payments businesses could improve profit
generation materially over time and EBITDA could approach mid-$2.0
billion in 2024, or materially above near-break-even levels as
recently as 2015-2016. Similar to other high-growth technology
companies, share-based compensation is very high as a percentage of
revenue and leads to low GAAP EBIT and net income profitability.
Block is focused on achieving the 'Rule of 40' in 2026, which is a
metric used in the software space and is defined as a combination
of growth (Block defines as yoy gross profit growth) and adjusted
operating margins (as a percentage of GP). The metric is used among
high-growth software companies and is meant to reflect on both a
company's revenue growth, or GP in Block's case, and profitability.
Block sees itself achieving the Rule of 40 in 2026 via a
combination of mid-teens GP growth and mid-20% operating margins.
Management is focused on headcount reduction in 2024 to drive
margin improvement.
Competitive, Fragmented End Markets: Block's end markets are large
and fragmented but also highly competitive. The Square payments
business continues to evolve as more U.S. merchants, particularly
smaller ones that were Square's core customers, historically, adopt
card and electronic forms of payment. The Square business faces
competition from newer, software-centric POS providers, such as
Toast, Clover and others, but also from legacy merchant acquirers
and hardware POS providers, and ecommerce providers, such as PayPal
and Stripe. Its Cash App segment is also very competitive, with
Block vying for share from banks, large tech providers, among
others.
Afterpay Acquisition: Fitch views the January 2022 Afterpay
acquisition ($15 billion, including assumed debt) as credit
neutral, as the all-equity financing did not change the leverage
profile and bolstered growth, but risks remain particularly related
to consumer financing. Consumer financing risk is elevated in the
near term given macro uncertainty and BNPL's untested business
model across the cycle. Fitch believes the deal fits in Block's
strategy and adds value to both its merchant and consumer
customers. Afterpay nearly doubled its revenue in each of the two
fiscal years prior to acquisition and generated $811 million of
revenue in 2022.
Ownership Concentration: Fitch views founder and Chairman/CEO Jack
Dorsey's ownership and control position, with roughly 42% of voting
power, as meaningful to the rating. The company has a very
successful track record, but the voting control is an important
credit consideration for investors. There is also key-person risk
if Mr. Dorsey were to leave or be removed from the company.
DERIVATION SUMMARY
Block's ratings reflect its strong market position in each of its
segments, historic growth profile, positive FCF generation in
recent years, significant cash on the balance sheet (net cash) and
secular growth in each of its main businesses. Offsetting
attributes include lower margins versus FinTech industry peers and
gross leverage that is higher versus industry leaders. Block's
EBITDA scale and more limited diversification versus certain higher
rated peers are also limiting rating considerations.
PayPal Holdings, Inc. (A-/Stable); Fidelity National Information
Services, Inc. (BBB/Stable); and Global Payments, Inc. (BBB/Stable)
are among the leading U.S. and global FinTech issuers and each
operates with lower leverage, materially higher EBITDA and margins,
and a track record of strong, growing FCF. PayPal also has a
stronger market position in its core e-commerce payment solutions
business. NCR Corporation (BB-/Stable) is smaller than Block and is
expected to have higher EBITDA leverage in the future, while Block
also has a materially stronger growth profile and net cash.
Relative to these issuers and other FinTech, payments and
software-oriented peers rated by Fitch, the agency believes the IDR
is well positioned at the 'BB+' category.
KEY ASSUMPTIONS
-- Revenue grows in the low-teens beyond 2023, with strong growth
in Cash App and more modest growth in the Square business;
-- EBITDA margins projected to expand 100 to 200 basis points per
year, benefiting from cost saving initiatives through 2024,
monetization of new services and operating leverage on revenue
growth. Reported margins are also skewed lower due to the material
scale of bitcoin revenue, which is reported on a gross transaction
value basis;
-- Fitch assumes Block will utilize some excess cash for share
repurchases, while also building cash in the absence of material
acquisitions;
-- Fitch assumes debt is refinanced in the future while leverage
declines through 2026 as the company realizes material EBITDA
growth.
RATING SENSITIVITIES
-- Fitch believes management will sustain capital and financial
policies the agency deems appropriate for investment grade;
-- Continued execution in scaling EBITDA and/or FCF profitability
in Cash App as well as the Square business; or increased
diversification of revenue via new services;
-- EBITDA leverage expected to be sustained below 3.0x.
Factors that Could, Individually or Collectively, Lead to
Stabilizing the Rating
-- EBITDA leverage sustained above 4.0x;
-- (CFO-capex)/debt expected to be sustained at 8% or below;
-- Significant fundamental shifts in the business that negatively
affect revenue, EBITDA and/or FCF;
-- Materially decreased financial flexibility.
LIQUIDITY AND DEBT STRUCTURE
Robust Liquidity: Block has strong and stable access to liquidity
in various forms, particularly given its net cash position. Fitch
expects its liquidity will improve in the coming years as the
business further scales and margins and FCF improve over time. As
of September 2023, the company had the following key sources of
liquidity: (i) $6.7 billion of cash and investments; (ii) an
undrawn $775 million senior unsecured revolver facility; (iii)
positive FCF generation that averaged $339 million from 2019-2022
($799 million YTD); and (iv) undrawn capacity available under its
$1.7 billion warehouse funding facilities. The company also has
investments that could be monetized if needed but that Fitch has
not included in its readily available cash or net leverage
calculations.
Debt Structure: Since its IPO, Block relied on the convertible debt
market for most of its external capital needs. The company had
roughly $2.15 billion of convertible note issuances outstanding at
September 2023, which are currently out of the money. The company
also has an undrawn $775 million senior unsecured revolver (June
2028 expiration) and $2 billion of senior unsecured notes that
mature in 2026 and 2031.
In addition to its revolver and convertible notes, Block also
assumed warehouse funding facilities with its Afterpay acquisition
that are used to finance the BNPL business. The company has
financing agreements (secured against consumer receivables) with
financial institutions in Australia, New Zealand, the U.S. and the
U.K. These facilities have maturities ranging from December 2023 to
June 2026, with $1.7 billion of revolving capacity at September
2023, of which $0.9 billion was drawn. Pricing on the facilities is
variable.
ISSUER PROFILE
Block is one of the largest and fastest growing U.S. fintech
companies, with various payments and app-based digital money
solutions offered to both consumers and merchants. The company was
founded in 2009 and trades on the NYSE under the ticker SQ.
ESG CONSIDERATIONS
Block has an ESG Relevance Score of '4' for Governance Structure
due to its significant control and ownership by CEO and Chairman
Jack Dorsey. Mr. Dorsey has been a key force behind the company's
success historically and will likely remain so in the years ahead,
which presents both key-person risk as well as risks of misaligned
incentives between shareholder and debt holder interests. This
factor was a consideration, in conjunction with other factors, used
in Fitch's rating analysis that could have a negative impact over
time to the overall IDR. 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
----------- ------ -------- -----
Block, Inc. LT IDR BB+ Upgrade BB
senior
unsecured LT BB+ Upgrade RR4 BB
BOMBARDIER INC: Moody's Rates New Unsec. Notes Due 2030 'B2'
------------------------------------------------------------
Moody's Investors Service assigned a B2 rating to Bombardier Inc.'s
proposed senior unsecured notes due 2030. Proceeds will be used to
finance the company's redemption of all of its outstanding notes
due 2025 and to finance the tender offer for its notes due in 2026
and 2027. The company's B2 corporate family rating, B2 senior
unsecured rating, and stable outlook remain unchanged.
RATINGS RATIONALE
Bombardier is constrained by: 1) leverage above 5x; 2) high fixed
charges of over $700 million per year (interest and capital
expenditures) that constrain the company's free cash flow; and 3)
its participation in the cyclical business jet market which has a
number of strong competitors. Bombardier benefits from: 1) good
liquidity over the next year; 2) significant scale; 3) a strong
market position within the business jet market; and 4) a $14.7
billion backlog.
Bombardier has good liquidity over the next year (SGL-2), with
about $1.7 billion of available liquidity sources versus about $200
million of uses. Sources are cash of $987 million at Q3/23, $262
million available on its secured revolving credit facility ($300
million ABL facility that expires in 2027), and about $400 million
in free cash flow through to the end of 2024. Uses are about $200
million of financial liabilities (excluding term debt but including
items such as lease liabilities, liabilities related to various
divestitures and government refundable advances). Bombardier has no
maturities over the next 12 months.
The stable outlook reflects Moody's expectation that Bombardier
will continue to generate free cash flow and improve its operating
performance and financial leverage in 2023 and 2024.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
The ratings could be upgraded if adjusted debt to EBITDA is below
5x and the company continues to generate free cash flow.
The ratings could be downgraded if Bombardier sees a deterioration
in its operating performance or there are problems with its ability
to deliver aircraft in line with its guidance. The rating could
also be downgrade if adjusted debt to EBITDA approaches 7x or EBIT
to Interest falls below 1x.
The principal methodology used in this rating was Aerospace and
Defense published in October 2021.
Headquartered in Montreal, Quebec, Canada, Bombardier Inc. is a
manufacturer of business jets.
BRINKER INTERNATIONAL: Egan-Jones Retains B Sr. Unsecured Ratings
-----------------------------------------------------------------
Egan-Jones Ratings Company on October 17, 2023, maintained its 'B'
foreign currency and local currency senior unsecured ratings on
debt issued by Brinker International, Inc. EJR also withdrew the
rating on commercial paper issued by the Company.
Headquartered in Dallas, Texas, Brinker International, Inc.
operates as a casual dining restaurant company.
BROOKDALE SENIOR: Egan-Jones Retains CC Senior Unsecured Ratings
----------------------------------------------------------------
Egan-Jones Ratings Company on October 26, 2023, maintained its 'CC'
foreign currency and local currency senior unsecured ratings on
debt issued by Brookdale Senior Living Inc. EJR also withdrew the
rating on commercial paper issued by the Company.
Headquartered in Brentwood, Tennessee, Brookdale Senior Living Inc.
operates senior living facilities in the United States.
BUCKEYE TECHNOLOGIES: Egan-Jones Withdraws BB- Sr. Unsec. Ratings
-----------------------------------------------------------------
Egan-Jones Ratings Company on October 20, 2023, withdrew its 'BB-'
foreign currency and local currency senior unsecured ratings on
debt issued by Buckeye Technologies Inc. EJR also withdrew the
rating on commercial paper issued by the Company.
Headquartered in Memphis, Tennessee, Buckeye Technologies Inc.
manufactures and markets specialty cellulose and absorbent
products.
BURDOCK AND ASSOCIATES: Hires Karen A. Hurney CPA as Accountant
---------------------------------------------------------------
Burdock and Associates, Inc. seeks approval from the U.S.
Bankruptcy Court for the Middle District of Florida to employ Karen
A. Hurney CPA P.A. as accountant.
The firm's services include:
a) assistance in preparation of the bankruptcy schedules;
b) monthly financials;
c) general ledger audits;
d) onsite and remote consultation; and
e) general accounting advice as needed.
The firm will be paid at the rate of $125 per hour. The firm
received from the Debtor an advance fee of $2,500.
The firm will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Karen A. Hurney, a partner at Karen A. Hurney CPA PA, 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:
Karen A. Hurney
Karen A. Hurney CPA PA
7436 Tufts Court
Orlando, FL 32807
Tel: (407) 234-6016
Fax: (407) 673-3323
Email: khurncpa@gmail.com
About Burdock and Associates, Inc.
Burdock and Associates, Inc. in Orlando, FL, filed its voluntary
petition for Chapter 11 protection (Bankr. M.D. Fla. Case No.
23-04165) on October 6, 2023, listing $500,000 to $1 million in
assets and $1 million to $10 million in liabilities. George A.
Burdock as president, signed the petition.
SHUKER & DORRIS, P.A. serve as the Debtor's legal counsel.
C.W. KELLER: Gets OK to Sell Assets to CWK for $2.1MM
-----------------------------------------------------
C.W. Keller & Associates, LLC received approval from the U.S.
Bankruptcy Court for the District of Massachusetts to sell its
assets to CWK Associates, LLC for $2.1 million.
The assets include equipment, furniture, inventory, and other
properties, which the company used to operate its business.
CWK will acquire the assets "free and clear" of liens, claims,
encumbrances and interests.
As part of the sale, C.W. Keller & Associates will assume certain
agreements, leases and licenses and then assign them to the buyer.
The company will use the sale proceeds to cure all sums due under
the assumed contracts.
About C.W. Keller & Associates
C.W. Keller & Associates, LLC is a fabrication and design
engineering firm in Newburyport, Mass., specializing in custom
millwork, composites and concrete form systems.
C.W. Keller & Associates and C.W. Keller Holding Company, Inc.
filed Chapter 11 petitions (Bankr. D. Mass. Lead Case No. 23-11357)
on Aug. 24, 2023. At the time of the filing, C.W. Keller &
Associates reported $1 million to $10 million in assets and $10
million to $50 million in liabilities while C.W. Keller Holding
Company, Inc. reported as much as $50,000 in assets and $1 million
to $10 million in liabilities.
Judge Christopher J. Panos oversees the case.
David B. Madoff, Esq., at Madoff & Khoury LLP, represents the
Debtors as legal counsel.
CAPSTONE GREEN: Plan Approval Hearing Moved to Nov. 13
------------------------------------------------------
Upon filing for Chapter 11 protection, Capstone Green Energy
Corporation and unit Capstone Turbine International (i) entered
into a Transaction Support Agreement with Goldman Sachs Specialty
Lending Group, L.P., in its capacity as collateral agent under that
certain Amended and Restated Note Purchase Agreement, dated as of
October 1, 2020, and Broad Street Credit Holdings LLC, an affiliate
of the Collateral Agent, in its capacity as purchaser under the
Note Purchase Agreement and (ii) filed with the Bankruptcy Court a
joint prepackaged chapter 11 plan of reorganization.
The TSA and Plan contemplate Capstone Turbine International and the
Company effectuating certain transactions, pursuant to which, among
other things, the Company shall become a private company that shall
continue to own assets consisting of (i) all of the Company's
right, title, and interest in and to certain trademarks of the
Company and (ii) all assets owned by the Company relating to
distributor support service, and Capstone Turbine International
shall be re-named Capstone Green Energy Holdings, Inc. and expects
to be a successor to the Company for purposes of Securities and
Exchange Commission reporting following emergence. All liabilities
and assets other than those directly related to the Retained Assets
and otherwise described in the Plan will be transferred to a newly
formed subsidiary of Reorganized PublicCo, which shall be named
Capstone Green Energy LLC and shall be the primary operating
entity.
On October 24, 2023, in accordance with the TSA and the Plan, the
Company filed a supplement to the Plan with the Bankruptcy Court,
which includes, among other things, (a) a valuation of the
Reorganized Debtors, (b) a schedule of rejected executory contracts
and unexpired leases, (c) a schedule of assumed executory contracts
and unexpired leases, (d) a description of Retained Causes of
Action, and (e) identification of the officers and board members
for New Subsidiary and Reorganized PublicCo.
As of October 24, 2023, the Company and the Pre-Petition Secured
Parties have not finalized (i) a description of the Retained
Assets, (ii) the identification of the officers and board members
for Reorganized PrivateCo, and (iii) the organizational documents
of Reorganized PublicCo and New Subsidiary, including the limited
liability company agreement of New Subsidiary, and such documents
remain under negotiation by the applicable parties to the TSA and
will be filed with the Bankruptcy Court in a subsequent Plan
supplement once available.
A hearing to consider the adequacy of the Disclosure Statement and
confirmation of the Plan was initially set for November 7 before
the Honorable Laurie Selber Silverstein in Wilmington, Delaware.
The hearing has since been adjourned to November 13.
Valuation
KPMG has determined the fair value of Capstone Green's Business
Enterprise Value, with a mid-point valuation of $56.5 million as of
October 2, 2023, a low of $50.5 million and a high of $63.6
million. KPMG has determined the fair value of Capstone Green's
equity, with a mid-point of $33.8 million as of October 2, 2023, a
low of $27.8 million and a high of $40.9 million.
About Capstone Green Energy Corporation
Capstone Green Energy Corporation build microturbine energy systems
and battery storage systems that allow customers to produce power
on-site in parallel with the electric grid or stand-alone when no
utility grid is available. Capstone Green offers microturbines
designed for commercial, oil and gas, and other industrial
applications.
Capstone Green and its wholly owned subsidiaries, Capstone Turbine
International, Inc. and Capstone Turbine Financial Services, LLC,
sought protection under Chapter 11 of the U.S. Bankruptcy Code
(Bankr. D. Del. Lead Case No. 23-11634) on September 28, 2023. In
the petition signed by John Juric, chief financial officer, the
Debtor disclosed $104,000,000 in total assets and $111,000,000 in
total debt.
Judge Laurie Selber Silverstein oversees the case.
Katten Muchin Rosenman LLP represents the Debtors as legal counsel,
Young Conaway Stargatt & Tayloor LLP as co-counsel, Riveron RTS,
LLC as financial advisor, and Kroll Restructuring Administration
LLC as claims, noticing & solicitation agent and administrative
advisor.
CAST & CREW: Moody's Affirms 'B2' CFR & Alters Outlook to Negative
------------------------------------------------------------------
Moody's Investors Service affirmed Cast & Crew LLC's corporate
family rating at B2 and its probability of default rating at B2-PD.
Concurrently, Moody's affirmed the rating on the issuer's senior
secured first lien credit facilities at B1. The outlook was revised
to negative from stable. The company is a California-based provider
of technology-enabled payroll processing and related services to
the entertainment industry.
The outlook revision to negative from stable takes into account the
mounting negative impact of the ongoing SAG-AFTRA strike on Cast &
Crew's credit profile. Moody's expects the company's financial
leverage to continue to rise to elevated levels in FY24 (ending
June 2024) while the ongoing loss of revenue and profits from the
strike results in considerable cash flow deficits that increasingly
weigh on liquidity. Additionally, Moody's expects that following a
potential resolution to the strike, the company's operating
performance will remain pressured for an additional 1-2 months
while its clients in the entertainment industry gradually restore
production to pre-strike levels. While Moody's maintains its
positive view of Cast & Crew's long term operating prospects, it
recognizes that the company's ability to restore its credit metrics
and liquidity to levels that are consistent with comparable
services industry issuers also rated in the B2 CFR category, is
unclear.
In Moody's view, the extended nature of the current strike and Cast
& Crew's significant client exposure to collective bargaining
agreements between various guilds and unions evidences an increase
in the company's exposure to social risks, particularly with
respect to human capital, reflected in the social score change to
S-4 from S-3. The heightened risk assessment was a key driver of
the ratings action.
RATINGS RATIONALE
Cast & Crew's B2 CFR is principally constrained by the company's
high, and increasing, debt leverage, which Moody's expects to
continue to rise in the near term as the negative financial impact
of the strike is increasingly realized. Cast & Crew's credit
profile is also negatively affected by risks related to the
company's concentrated exposure to the media and entertainment
sector which has been impacted by recent work stoppages. Additional
credit risks stem from the company's ability to effectively manage
workers' compensation insurance claims, cybersecurity related risks
given the company's access to sensitive customer data, Cast &
Crew's concentrated private equity ownership, and the potential for
aggressive financial policies. These uncertainties are somewhat
mitigated by Cast & Crew's large scale and entrenched position
within its niche market, long term customer relationships, and
specialized industry expertise as a provider of payroll processing,
production accounting, and related services for media and
entertainment companies. The company's credit profile is also
supported by historically good topline growth trends as well as
Cast & Crew's strong profitability, which should fuel some recovery
in credit metrics once the strike is resolved.
Moody's considers Cast & Crew's liquidity profile to be adequate,
but notes the risk of deterioration should the strike remain
unresolved beyond the end of 2Q24 (December 2023). The company had
an unrestricted cash balance of $93.5 million as of June 30, 2023.
Moody's projects that the company will incur a free cash flow
deficit of $10 million-$20 million in FY24. Moody's expects Cast &
Crew will continue to utilize its revolving credit facilities ($27
million maturing in August 2025 and $123 million maturing in
November 2025) to fund negative cash flow as well as approximately
$14 million of annual required first lien term loan amortization
and estimates that the company presently has aggregate availability
of approximately $70 million. The company's first lien term loan is
not subject to a financial maintenance covenant. However, Cast &
Crew's revolving credit facilities are subject to a springing
covenant based on a maximum first lien net leverage ratio of 8.3x.
The company has obtained a waiver of this requirement for the next
four quarters, beginning with the quarter ended December 31, 2023
during which it will be subject to a minimum liquidity financial
covenant of $20 milion (all cash & cash equivalents and undrawn
revolver capacity) tested monthly with which it should be
comfortably in compliance with over the next 12-15 months.
The negative ratings outlook reflects Moody's expectation that Cast
& Crew's revenue and adjusted EBITDA will decline materially as a
result of the strike resulting in considerable cash flow deficits
that increasingly weigh on liquidity.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Given the negative outlook, a rating upgrade over the next 12-18
months is not considered likely. Over the longer term, the ratings
could be upgraded if Cast & Crew is able to sustain credit metrics
and liquidity measures which are materially superior to pre-strike
levels.
The ratings could be downgraded if the company experiences a
deterioration in liquidity, particularly if the strike remains
unresolved for an extended period, and is unable to restore credit
metrics and liquidity measures to pre-strike levels over the next
12-18 months.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
Cast & Crew, based in Burbank, California and owned by affiliates
of private equity sponsor EQT, is a provider of technology-enabled
payroll processing, production accounting software, workers'
compensation coverage, and related value-added services to clients
across the entertainment industry.
CEDAR FAIR: Moody's Puts 'B2' CFR on Review for Upgrade
-------------------------------------------------------
Moody's Investors Service placed Cedar Fair, L.P.'s B2 corporate
family rating, B2-PD probability of default rating, B3 senior
unsecured notes, and Ba2 senior secured notes on review for
upgrade. Previously, the outlook was stable. The review for upgrade
was prompted by the joint announcement by Six Flags Entertainment
Corporation's ("Six Flags", B2 CFR) and Cedar Fair that they have
entered into a definitive agreement to combine in a merger of
equals transaction. Governance is a key driver of the rating
action, as reducing financial risk through deleveraging is among
management's goals of the merger.
On November 2, 2023, Six Flags and Cedar Fair announced their
intentions to merge the two companies following approval by the
Boards of Directors of both companies. Cedar Fair unitholders will
receive one share of common stock in the new combined company for
each unit owned, and Six Flags shareholders will receive 0.5800
(the "Six Flags Exchange Ratio") shares of common stock in the new
combined company for each share owned. [1] Following the close of
the transaction, Cedar Fair unitholders will own approximately
51.2%, and Six Flags shareholders will own approximately 48.8%, of
the combined company's fully diluted share capital on a pro forma
basis. They also announced that one business day prior to the close
of the transaction, Six Flags will declare a special cash dividend
composed of: (i) a fixed amount of $1.00 per outstanding Six Flags
share, totaling approximately $85 million in the aggregate, plus,
(ii) an amount per outstanding Six Flags share equal to (a) the
aggregate per unit distributions declared or paid by Cedar Fair to
unitholders with a record date following the date and prior to the
close of the transaction, multiplied by (b) the Six Flags Exchange
Ratio, which special dividend will be payable to Six Flags
shareholders of record as of one business day prior to the close of
the transaction, contingent on the closing.
RATINGS RATIONALE / FACTORS THAT COULD LEAD TO AN UPGRADE OR
DOWNGRADE OF THE RATINGS
The combined company is expected to benefit from greater scale as
it will become the largest regional theme park operator in the US,
with a geographically more diversified portfolio of 27 amusement
parks, 15 water parks and 9 resort properties across 17 states in
the U.S., Canada, and Mexico. This diversification will partially
mitigate the impact of seasonality and reduce earnings volatility.
Management also anticipates that it will be able to achieve $120
million in cost synergies over two years and $80 million in new
revenue synergies within three years, resulting in greater
financial flexibility. The result along with increasing free cash
flow for park investment and debt reduction should lead to
deleveraging, a stated management goal.
"Moody's believe that merging two of the US's largest regional
theme park owners into a leading industry provider of out of home
entertainment will enable the combined company to capitalize on the
new found scale, and optimize revenue strategies and cost
efficiencies" stated Scott Van den Bosch, Moody's Vice President.
The review will focus on the benefits of greater scale, improved
diversification and seasonal and weather risk mitigation, cost and
revenue synergy opportunities, and financial policies in connection
with management's goal of reducing net debt to EBITDA leverage to
around 3.0x (before Moody's adjustments). The review will also
focus on meeting the regulatory hurdles for completion of the
acquisition and the specific plans and structure for each of the
two companies current outstanding debt which could impact notching.
Should the debt be structured such that the two silos are pari
passu with respect to the combined company's assets and cash flows,
Moody's would expect to equalize the ratings across each class.
Cedar Fair, L.P. (Cedar Fair), headquartered in Sandusky, Ohio, is
a publicly traded Delaware master limited partnership (MLP) formed
in 1987 that owns and operates amusement parks, water parks, and
hotels in the U.S. and Canada. Properties include its four largest
parks, Cedar Point (OH), Knott's Berry Farm (CA), Canada's
Wonderland (Toronto), and Kings Island (OH). In June 2006, Cedar
Fair acquired Paramount Parks, Inc. from CBS Corporation for a
purchase price of $1.24 billion. In 2019, Cedar Fair bought two
water parks in Texas for approximately $261 million. Revenue for
the LTM ending Q3 2023 was approximately $1.8 billion.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
CENTERPOINT RADIATION: No Patient Care Concern, 1st PCO Report Says
-------------------------------------------------------------------
Tamar Terzian, the court-appointed patient care ombudsman, filed
with the U.S. Bankruptcy Court for the Central District of
California a first interim report regarding the health care
facility operated by CenterPoint Radiation Oncology, LLC and
CenterPoint Radiation Oncology Inc.
In the report which covers the period August 18 to October 18, the
PCO noted that each patient's medical records are well maintained
and accessible for staff using an electronic medical record. The
medical records are kept for seven years after the patient has been
discharged.
The PCO reviewed a sampling of patient records during her site
visit. All medical records and reports were cited along with
complete course of care while admitted, and all consent forms were
executed. No concerns were noted.
Moreover, the PCO reviewed the latest stipulation for use of cash
collateral and agreement with the landlord. While the parties have
negotiated for the month of October, the PCO is highly concerned
that the default of rent will interrupt patient treatment. As of
the date of the report, approximately 10 patients need treatment
through November 15.
The PCO requested that existing patients continue treatment through
November and recommended that no new patients begin treatment until
there is an executed whereby CenterPoint can operate at this
location or another location if necessary. The PCO further
recommended that Dr. Morrell maintain all patient records in the
event patients transfer to a new clinic.
A copy of the ombudsman report is available for free at
https://urlcurt.com/u?l=LGJweE from PacerMonitor.com.
The ombudsman may be reached at:
Tamar Terzian, Esq.
Terzian Law Group
1122 E. Green Street
Pasadena, CA 91106
Telephone: (818) 242-1100
Facsimile: (818) 242-1012
Email: tamar@terzlaw.com
About CenterPoint Radiation
CenterPoint Radiation Oncology, LLC and CenterPoint Radiation
Oncology, Inc. filed petitions under Chapter 11, Subchapter V of
the Bankruptcy Code (Bankr. C.D. Calif. Lead Case No. 23-13448) on
June 2, 2023. Judge Sheri Bluebond oversees the cases.
At the time of the filing, CenterPoint Radiation Oncology, LLC
reported $100,000 to $500,000 in assets and $1 million to $10
million in liabilities while CenterPoint Radiation Oncology, Inc.
reported as much as $50,000 in assets and $100,001 to $500,000 in
liabilities.
John-Patrick M. Fritz, Esq., at Levene, Neale, Bender, Yoo &
Golubchik, LLP is the Debtors' counsel.
Tamar Terzian is the patient care ombudsman appointed in the
Debtors' Chapter 11 cases.
CENTRAL LOAN: Brian Foltyn Named Subchapter V Trustee
-----------------------------------------------------
The U.S. Trustee for Region 14 appointed Brian Foltyn of REDW as
Subchapter V trustee for Central Loan Company, LLC.
Mr. Foltyn will be paid an hourly fee of $390 for his services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. Foltyn declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Brian Foltyn
REDW
5353 N 16th Street, Suite 200
Phoenix, AZ 85016
Telephone: (602) 730-3672
Email: bfoltyn@redw.com
About Central Loan Company
Central Loan Company, LLC, a loan agency in Las Cruces, N.M., filed
Chapter 11 petition (Bankr. D. N.M. Case No. 23-10917) on Oct. 18,
2023, with $1 million to $10 million in both assets and
liabilities. Ruben Smith, managing partner, signed the petition.
Judge Robert H. Jacobvitz oversees the case.
Thomas D. Walker, Esq., at Walker & Associates, P.C. represents the
Debtor as legal counsel.
CENTRAL OKLAHOMA: U.S. Trustee Appoints Cori Loomis as PCO
----------------------------------------------------------
Ilene Lashinsky, the U.S. Trustee for Region 14, appointed Cori
Loomis of Christensen Law Group, PLLC as patient care ombudsman for
Central Oklahoma United Methodist Retirement Facility, Inc.
The appointment was made pursuant to the order from the U.S.
Bankruptcy Court for the Western District of Oklahoma on October
16.
In court papers, Ms. Loomis disclosed that she has no connections
with Central Oklahoma, creditors or any other party involved in
Central Oklahoma's Chapter 11 case.
The ombudsman may be reached at:
Cori H. Loomis
Christensen Law Group, PLLC
The Parkway Building
3401 N.W. 63rd Street, Suite 600
Oklahoma City, OK 73116
(405) 232-2020 Telephone
(405) 236-1012 Fax
Email: Cori@Christensenlawgroup.com
About Central Oklahoma United Methodist
Retirement Facility
Central Oklahoma United Methodist Retirement Facility, Inc. is a
locally owned not-for-profit Life Plan Community serving senior
adult singles and couples ages 55 and above.
The Debtor filed Chapter 11 petition (Bankr. W.D. Okla. Case No.
23-12607) on Sept. 29, 2023, with $10 million to $50 million in
assets and $50 million to $100 million in liabilities. Ron Kelly,
president and chief operating officer, signed the petition.
Judge Sarah A. Hall oversees the case.
The Debtor tapped Sidney K. Swinson, Esq., at Gable & Gotwals as
legal counsel and Raymond James & Associates, Inc. as investment
banker, underwriter and bond placement agent.
CHESANING MFG: Hires CMM & Associates as Financial Advisor
----------------------------------------------------------
Chesaning Mfg. Co., Inc. seeks approval from the U.S. Bankruptcy
Court for the Eastern District of Michigan to employ CMM &
Associates as its financial advisor.
The firm will provide assistance to gather and organize
information, assess available options, assist with preference
analysis, and to develop and support a plan of reorganization.
The firm will be paid at these rates:
Charles M. Mouraine $325 per hour
Charles Flint $250 per hour
The retainer fee is $10,000.
Charles Mouraine, a partner at CMM & Associates, disclosed in a
court filing that his firm is a "disinterested person" as the term
is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Charles M. Mouraine
CMM & Associates
43313 Woodward Ave # 1189
Telephone: (248) 767-9492
Facsimile: (248) 562-1959
Email: cmouraine@cmmengllc.com
About Chesaning Mfg. Co., Inc.
Chesaning Mfg. Co., Inc. is a custom machining, fabrication and
assembly partner that works with aerospace, defense, and niche
manufacturers.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D. Mich. Case No. 23-20898) on August 8,
2023. In the petition signed by Christophor M. Soule, sole
shareholder and president, the Debtor disclosed up to $500,000 in
assets and up to $10 million in liabilities.
Judge Daniel S. Opperman oversees the case.
Zachary R. Tucker, Esq., at Winegarden, Haley, Lindholm, Tucker and
Himelhoch PLC, represents the Debtor as legal counsel.
CHESANING MFG: Hires Winegarden Haley as Legal Counsel
------------------------------------------------------
Chesaning Mfg. Co., Inc. seeks approval from the U.S. Bankruptcy
Court for the Eastern District of Michigan to employ Winegarden,
Haley, Lindholm, Tucker & Himelhoch, P.L.C. to handle its Chapter
11 proceedings.
Zachary R. Tucker, Esq., the main attorney handling the Debtor's
Chapter 11 case, will be paid at the rate of $300 per hour.
The firm holds the sum of $11,262 as a retainer.
As disclosed in court filings, Tucker & Himelhoch is a
"disinterested person" as the term is defined in Section 101(14) of
the Bankruptcy Code.
The firm can be reached through:
Zachary R. Tucker, Esq.
Winegarden, Haley, Lindholm, Tucker & Himelhoch, P.L.C.
9460 S. Saginaw Rd, Suite A
Grand Blanc, MI 48439
Telephone: (810) 579-3600
Email: ztucker@winegarden-law.com
About Chesaning Mfg. Co., Inc.
Chesaning Mfg. Co., Inc. is a custom machining, fabrication and
assembly partner that works with aerospace, defense, and niche
manufacturers.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D. Mich. Case No. 23-20898) on August 8,
2023. In the petition signed by Christophor M. Soule, sole
shareholder and president, the Debtor disclosed up to $500,000 in
assets and up to $10 million in liabilities.
Judge Daniel S. Opperman oversees the case.
Zachary R. Tucker, Esq., at Winegarden, Haley, Lindholm, Tucker and
Himelhoch PLC, represents the Debtor as legal counsel.
CM WIND: Egan-Jones Retains CCC+ Senior Unsecured Ratings
---------------------------------------------------------
Egan-Jones Ratings Company on October 16, 2023, maintained its
'CCC+' foreign currency and local currency senior unsecured ratings
on debt issued by CM Wind Down Topco Inc. EJR also withdrew the
rating on commercial paper issued by the Company.
Headquartered in Atlanta, Georgia, CM Wind Down Topco Inc. operates
as a radio broadcasting company.
COEUR MINING: Egan-Jones Retains B+ Senior Unsecured Ratings
------------------------------------------------------------
Egan-Jones Ratings Company on October 24, 2023, maintained its 'B+'
foreign currency and local currency senior unsecured ratings on
debt issued by Coeur Mining, Inc. EJR also withdrew the rating on
commercial paper issued by the Company.
Headquartered in Chicago, Illinois, Coeur Mining, Inc. operats as a
mining company.
COMMUNITY HEALTH: Egan-Jones Retains CCC+ Senior Unsecured Ratings
------------------------------------------------------------------
Egan-Jones Ratings Company on October 25, 2023, maintained its
'CCC+' foreign currency and local currency senior unsecured ratings
on debt issued by Community Health Systems, Inc. EJR also withdrew
the rating on commercial paper issued by the Company.
Headquartered in Franklin, Tennessee, Community Health Systems,
Inc. owns, leases, and operates hospitals.
CONSOLIDATED COMMUNICATIONS: Egan-Jones Retains B- Unsec. Ratings
-----------------------------------------------------------------
Egan-Jones Ratings Company on October 24, 2023, maintained its 'B-'
foreign currency and local currency senior unsecured ratings on
debt issued by Consolidated Communications Holdings, Inc. EJR also
withdrew the rating on commercial paper issued by the Company.
Headquartered in Mattoon, Illinois, Consolidated Communications
Holdings, Inc. offers telecommunications services.
CONTOUR PROPCO: No Resident Care Concern, PCO Report Says
---------------------------------------------------------
Blanca Castro, patient care ombudsman for Contour Propco 1735 S
Mission, LLC and Contour Opco 1735 S Mission, LLC, filed a report
regarding the quality of patient care provided at Cogir of
Fallbrook.
The PCO found no major concerns currently as Cogir of Fallbrook is
managed well and residents and staff appear to be content,
according to the report.
The facility is clean, organized, safety-proofed, and well managed.
The staff are happy to be there, they appear to enjoy their jobs,
and the residents can feel the support from the staff. Moreover,
the food menu had a variety of choices for residents to choose.
A copy of the ombudsman report is available for free at
https://urlcurt.com/u?l=ezWb0Z from PacerMonitor.com.
About Contour Propco and Contour Opco
Contour Propco 1735 S Mission, LLC and Contour Opco 1735 S Mission,
LLC filed Chapter 11 petitions (Bankr. D. Nev. Lead Case No.
23-12081) on May 23, 2023, with $10 million to $50 million in both
assets and liabilities. Judge Mike K. Nakagawa oversees the cases.
Schwartz Law, PLLC represents the Debtors as bankruptcy counsel.
Blanca Castro is the patient care ombudsman appointed in the
Debtors' Chapter 11 cases.
CORUS ENTERTAINMENT: S&P Cuts ICR to 'B+' on Ad Revenue Pressure
----------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on
Toronto-based Corus Entertainment Inc. to 'B+' from 'BB-'. In
addition, S&P lowered its issue-level rating on the company's
secured debt to 'BB' from 'BB+' and its issue-level rating on the
unsecured debt to 'B+' from 'BB-'. The recovery ratings on the debt
are unchanged.
S&P said, "The stable outlook indicates our forecast that Corus'
leverage (S&P Global Ratings-adjusted gross debt to EBITDA) will
remain in the 4.0x-4.5x range by fiscal year-end 2024, reflecting
to some extent management's desire to continue reducing debt and
our expectation that depressed advertising revenue will recover as
macroeconomic conditions improve, likely by the second half of
2024.
"Our weak business risk profile assessment of Corus reflects a
permanent shift in advertising. Amid a secular decline in TV
subscriber numbers and traditional TV advertising, Corus faces
additional headwinds. S&P Global Economics forecasts subdued GDP
growth in 2023 and 2024 in Canada. A combination of
factors--macroeconomic weakness, a consumer shift to services from
goods, reduced consumer discretionary spending due to high
inflation, and rising interest rates--has resulted in a pullback in
TV advertising spend. In addition, a glut of premium digital ad
inventory from both free ad-supported TV (FAST) channels (such as
Pluto, Tubi), and ad-supported video on demand (AVOD) offerings
from streaming players (Netflix, Disney+) has increased competition
for Corus' digital advertising offerings. Although digital
advertising has shown growth, in the past two quarters Corus'
digital revenue growth fell to the low-single-digit percentage
area. In our view, the company's consolidated advertising
volatility is somewhat mitigated by the increased use of digitized
data-driven advertising technology. Nevertheless, we note that
digital advertising growth does not fully offset the secular
traditional advertising revenue losses at the company. As result,
we believe that under current conditions Corus' secular decline in
advertising losses could accelerate and some of the loss in
advertising revenue could become permanent."
The WGA and SAG-AFTRA strikes have disrupted advertising revenues
in the strongest quarter. The WGA strike (resolved mid-October) and
the ongoing SAG-AFTRA strike have disrupted Corus' fall schedule
with no new scripted U.S. content. As a result, the company's 2024
first quarter, which is seasonally Corus' strongest, could face a
15%-20% drop in TV ad revenue, on top of the 11% decline in
first-quarter 2023. Should the SAG-AFTRA strike resolve by U.S.
Thanksgiving, Corus might still be able to generate improved TV ad
revenue in its third quarter, which is seasonally its
second-strongest. During the strike, the company's amortization and
cash spending on film investments will reduce but is not sufficient
to offset the effect of lower advertising revenue. Should the
SAG-AFTRA strike be prolonged, the impact on TV ad revenue and
EBITDA could be significant. Given advertising revenues contribute
to higher margin and proportion of sales, S&P foresees EBITDA
margins to remain pressured and could remain at or below 2023
levels (about 24% compared with 31% in fiscal 2022).
Management's proactive steps to reduce balance-sheet debt should
keep leverage in the 4.0x-4.5x range through 2024. Management has
been proactive in reducing balance-sheet debt. In the fourth
quarter, Corus used C$141 million of net proceeds from its Toon
Boom sale to reduce balance-sheet debt leverage to 3.9x compared to
4.2x in the third quarter. Overall, the company repaid about C$170
million of its term loan A in fiscal 2023. In its fourth-quarter
earnings call, Corus announced it had suspended dividends, stating
that repaying debt was a priority. S&P said, "In addition,
management is focused on cost efficiency as it cuts shows and
headcount. As a result, we now forecast the company will keep
leverage at 4.0x-4.5x in fiscal 2024, which assumes a resolution to
the SAG AFTRA strike and recovery of advertising revenue in
third-quarter 2024. However, the risk remains that, despite a
conservative financial policy (2.5x net debt-to-EBITDA target),
Corus' leverage could prove to be weaker than our forecast if
macroeconomic and industry headwinds continue to affect the North
American media industry."
S&Ps aid, "The stable outlook reflects our view that, despite
macroeconomic headwinds and accelerated decline in traditional
advertising, Corus' leverage will stabilize in the 4.0x-4.5x range
in fiscal 2024, reflecting management's desire to continue reducing
debt and to some extent our expectation that depressed advertising
revenue will recover as macroeconomic conditions improve, likely by
the second half of 2024. The dividend suspension and use of free
cash flow and potential asset sales to pay down debt should support
leverage metrics as the company faces difficulties in the near
term.
"We could further lower the rating in the next 12 months if we
believe Corus' adjusted debt to EBITDA ratio is sustained above
4.5x with no expectation of improvement." S&P believes this
scenario could result from:
-- A steeper drop in advertising revenue through 2024 due to
macroeconomic softness, greater competitive intensity, a prolonged
strike, or increased cost of content following the strike
resolution; or
-- Sustained secular shifts in media consumption and an
accelerated movement of advertising away from traditional outlets
that could lead to significantly lower EBITDA and profitability.
S&P said, "Although highly unlikely in the next 12 months, we could
raise the rating if Corus is able to substantially improve its
competitive position through its various new initiatives, resulting
in improvements in its operating and financial performance, leading
to sustained adjusted debt to EBITDA in the low-3.0x area."
ESG factors have no material influence on S&P's credit rating
analysis of Corus.
COVENANT SURGICAL: S&P Downgrades ICR to 'CCC+', Outlook Negative
-----------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on ambulatory
surgical facilities operator Covenant Surgical Partners Inc.
(Covenant Surgical) to 'CCC+' from 'B-'. The outlook is negative.
At the same time, S&P lowered its issue-level ratings on the
company's first-lien senior secured debt to 'CCC+' from 'B-' to
reflect the lower issuer credit rating. The '3' recovery rating is
unchanged.
S&P also lowered its issue-level ratings on the company's
second-lien senior secured debt to 'CCC-' from 'CCC', the '6'
recovery rating is unchanged.
The negative outlook on Covenant Surgical reflects the risk that
any further deterioration in cash flow, combined with the
expiration of the company's revolver, could cause liquidity to
deteriorate and lead to a likely payment default within the next 12
months. It also reflects the risk that the company's debt trading
levels could incentivize it to pursue a subpar debt exchange.
S&P said, "The downgrade reflects our view that the company's
capital structure is unsustainable and it is dependent on favorable
economic and operating conditions to be able to improve its cash
flow deficits. We believe Covenant Surgical is dependent on
favorable conditions such as better operational efficiency, a
slowdown in rising labor costs, improvements in interest rates or
capital market conditions, and successful integration of physician
practices to meet its financial commitments over the next 12 to 24
months.
"Although we expect an improvement in fiscal 2023 EBITDA margin
driven by cost-saving measures, some moderation in wage inflation,
and better operational efficiency, we don't expect this to result
in positive discretionary cash flows in the near term. We believe
that prolonged wage inflation, higher-for-longer interest rates and
dividend payments to NCI will result in a discretionary cash flow
(DCF) deficit over next two to three years. Furthermore, we
anticipate the company's liquidity could become pressured if the
revolving credit facility that is due to expire in mid-2024 is not
renewed.
"Debt trading at distressed levels increases the likelihood of a
distressed debt exchange. Covenant Surgical's debt has traded down
over the last year. The company's first-lien and second-lien debt
and revolver are trading at around 80 cents on the dollar. We
believe this elevates the risk of a distressed exchange or below
par repurchase which results in the lenders receiving less than the
original promise, which we view to be akin to default.
"The negative outlook on Covenant Surgical reflects the risk that
any further deterioration in cash flow, combined with the
expiration of the company's revolver, could cause liquidity to
deteriorate and lead us to expect a payment default within the next
12 months. It also reflects the risk that the company's debt
trading levels could incentivize the company to pursue a subpar
debt exchange."
S&P could consider a downgrade if it expect the company to default
within the next 12 months. This could happen if:
-- Wage inflation re-accelerates or the company faces
reimbursement rate pressures that cause the company's discretionary
cash flow deficit to widen to the point where S&P sees a payment
default as likely;
-- The company draws on its revolver and S&P does not expect it
will have the capacity to fully repay the draw prior to expiration;
or
-- S&P expects the company will pursue a distressed debt exchange,
subpar repurchase, or other form of restructuring.
S&P could revise the outlook to stable within the next 12 months
if:
-- The company improves its cash flow generation and renews its
revolver such that we believe it has adequate sources of liquidity
to cover its cash flow deficits through the next two years; and
-- The company's debt trading values increase to a level where we
feel there is a reduced risk of a distressed exchange.
S&P said, "Although unlikely over the next 12 months, we could
raise the rating if we expect the company will be able to grow into
its capital structure and there is a clear path to the company
generating sustainably positive discretionary cash flows.
"Governance factors are a moderately negative consideration in our
credit rating analysis. Our assessment of the company's financial
risk profile as highly leveraged reflects corporate decision-making
that prioritizes the interests of the controlling owners, in line
with our view of the majority of rated entities owned by
private-equity sponsors. Our assessment also reflects the generally
finite holding periods and a focus on maximizing shareholder
returns.'
DENN-OHIO LLC: Wins Interim Cash Collateral Access
--------------------------------------------------
The U.S. Bankruptcy Court for the Western District of Michigan
authorized Denn-Ohio, LLC to use cash collateral on an interim
basis in accordance with the budget, with a 10% variance.
As of the Petition Date, in accordance with the loan documents
executed in favor of First Franchise Capital Corporation, the
Debtor was indebted to FFCC, secured by valid, enforceable and,
where applicable, properly perfected liens in the collateral.
In accordance with the credit application and purchase money
security agreement executed in favor of McLane Foodservice, Inc.,
the Debtor is indebted to McLane, for all goods delivered by McLane
prior to the Petition Date.
As adequate protection, the Debtor will pay McLane, as the first
priority secured creditor:
(a) all invoices as they become due, and (2) $30,876
(consisting of $30,062 relating to two Unauthorized Returned
payments from October 31, 2023, plus $80 in return fees, and
$133.98 in unearned discounts.
The Debtor will pay First Franchise Credit Corporation (i) monthly
adequate protection payments of $35,000 per month; and (ii)
$100,000 in a onetime lump-sum payment.
The respective security interests of the Represented Secured
Creditors in cash collateral are continued and re-granted, and the
Represented Secured Creditors will not be required to take any
other action to perfect the lien(s) re-granted to them thereunder.
The Represented Secured Creditors, in the same validity, extent,
and priority as immediately prior to the Petition Date, are granted
liens and security interests in the Debtor's inventory acquired
subsequent to the Petition Date, and in the Debtor's accounts
receivable, general intangibles and other revenues generated by the
operation of the Debtor's businesses subsequent to the Petition
Date.
The Debtor's authority to use the cash collateral will cease, after
notice and a hearing, upon the occurrence of one of the following:
(i) Debtor fails to comply with its promises of adequate assurance
in any fashion; (ii) the appointment of a Chapter 11 trustee, other
than the Subchapter V. Trustee; (iii) conversion of this Chapter 11
proceeding to a Chapter 7; (iv) the Chapter 11 proceeding is
dismissed without the consent of the Secured Creditors; or (v) a
material diminution in the amount of the Debtor's cash collateral.
A final hearing on the matter is set for December 13 at 9 a.m.
A copy of the order is available at https://urlcurt.com/u?l=d8KKqq
from PacerMonitor.com.
About Denn-Ohio, LLC
Denn-Ohio, LLC operates its Denny's franchises at ten leased
commercial properties in Michigan, Ohio, and Kentucky.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. W.D. Mich. Case No. 23-02533) on October
31, 2023. In the petition signed by Thomas F. Pilbeam, member, the
Debtor disclosed $1,860,816 in assets and $4,567,989 in
liabilities.
Judge John T. Gregg oversees the case.
Steven M. Bylenga, Esq., at CBH ATTORNEYS & COUNSELORS, PLLC,
represents the Debtor as legal counsel.
EMBECTA CORP: Moody's Affirms Ba3 CFR & Alters Outlook to Negative
------------------------------------------------------------------
Moody's Investors Service revised Embecta Corp's outlook to
negative from stable. At the same time, Moody's affirmed Embecta's
Ba3 Corporate Family Rating, Ba3-PD Probability of Default Rating,
and Ba3 instrument ratings on the senior secured first lien
revolving credit facility, senior secured first lien term loan and
senior secured global notes. Embecta's Speculative Grade Liquidity
(SGL) rating remains unchanged at SGL-1.
The revision of the outlook to negative reflects the increased
likelihood that Embecta will be unable to maintain credit metrics
consistent with the existing Ba3 CFR over the next 12-18 months.
Embecta's margin profile is trending below Moody's original
expectations, driven in part by persistent supply chain and
inflationary headwinds. While Embecta's profitability remains good
relative to its medical device peers, Moody's expects that
Embecta's margins will continue to trend lower over the next 12-18
months as it establishes additional standalone infrastructure and
pursues research and development initiatives. To that end, Moody's
expects EBITDA to decline over the same time period (with revenues
remaining approximately flat), driving an increase in debt to
EBITDA towards 5x on Moody's adjusted basis and reduced interest
coverage. Absent voluntary debt repayment or better than expected
earnings results, Moody's expects that Embecta's financial leverage
will remain elevated.
Moody's affirmation of the Ba3 CFR reflects the company's very good
liquidity, including Moody's expectation that Embecta will generate
solid free cash flow, notwithstanding higher cash interest expense
on its floating rate bank debt and its commitment to a small
dividend. While execution risk remains, Moody's expects that
Embecta will gradually wind-down expenses related to its ongoing
transition to a standalone entity from Becton, Dickinson, and
Company ("BD"; Baa2/Stable) over the next 12-18 months.
RATINGS RATIONALE
Embecta's Ba3 CFR is constrained by the company's modest growth
prospects, as adoption of new insulin management technologies will
continue to take share from Embecta's legacy injection products.
The rating also takes into consideration the company's lack of
diversification outside of diabetes care injections which may
expose it to high business risk, such as potential pricing
pressure, manufacturing issues, and product defects. In addition,
the rating accounts for continued execution risk related to the
spinoff of Embecta from BD.
Embecta's rating benefits from its top market position in diabetes
insulin injection devices globally. The company has long-standing
customer loyalty to its products, driving recurring revenue from
users and providers. The credit rating is further supported by the
scale of the company's manufacturing and distribution network,
which acts as a barrier to entry and allows for significant
operating leverage – driving good profit margins and free cash
flow generation.
The Speculative Grade Liquidity Rating of SGL-1 reflects Moody's
expectation that Embecta's liquidity will remain very good over the
next 12 to 18 months. Embecta's liquidity is supported by $317
million of cash as of June 30, 2023. Moody's estimates that Embecta
will generate at least $60 million of annual free cash flow over
the next 12 to 18 months. External liquidity is supported by a
5-year revolving credit facility that provides for borrowings of
$500 million, and was undrawn as of June 30, 2023. This revolving
credit facility has a Maximum First Lien Net Leverage covenant of
4.75x. The company tested comfortably below the covenant at 3.35x
at June 30, 2023, and Moody's expects that Embecta will maintain
good cushion over the next 12-18 months. Alternative sources of
liquidity are limited as substantially all assets are pledged.
Embecta's CIS-3 indicates that ESG considerations have a limited
impact on the current credit rating with potential for greater
negative impact over time. The score reflects ongoing exposure to
social risks as a manufacturer of insulin injection products -
notably to potential product safety litigation, recalls, and
ongoing pricing pressure on legacy products in developed markets.
Governance considerations incorporate Embecta's relatively moderate
financial policies as a public company, albeit with a limited track
record as a standalone entity.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Ratings could be downgraded if profit margins continue to decline
in FY2024, driving lower earnings. Ratings could also be downgraded
if the company is unable to successfully manage the transition to a
standalone entity, or if more rapid inroads from insulin management
technologies pressure earnings. Quantitatively, the ratings could
be downgraded if adjusted debt to EBITDA is sustained above 4.5x.
Ratings could be upgraded if Embecta is able to maintain stable
earnings from the core injection business, while effectively
managing its strategic initiatives under more conservative
financial policies. Quantitively, ratings could be upgraded if
debt/EBITDA is sustained below 3.5x while maintaining a very good
liquidity profile.
Embecta is a leading provider of Diabetes insulin injection
products and services, including pen needles, syringes, and related
safety products. Embecta generated revenue of approximately $1.1
billion in the last twelve months ended June 30, 2023.
The principal methodology used in these ratings was Medical
Products and Devices published in October 2023.
EQUALTOX LLC: Court OKs Cash Collateral Access Thru Dec 13
----------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California,
Santa Ana Division, authorized Equaltox, LLC to use cash collateral
on an interim basis in accordance with the budget, with a 15%
variance, through December 13, 2023.
The Debtor filed bankruptcy due to Anthem Blue Cross's judgment
collection actions, which are currently on appeal. The Debtor
claims juror misconduct and erroneous trial court decisions. The
Debtor is in financial distress due to Anthem's aggressive
collection efforts and lacks the financial means to pay a $7.682
million judgment. It plans to restructure their debts and propose a
plan to preserve their operations and business value for all
stakeholders. The Debtor intends to pursue its appeal and, if
successful, Anthem will not be the Debtor's creditor, but, rather,
will owe the Debtor millions. Either way, the Debtor will propose a
plan that allows it to restructure its debts whether it prevails on
its appeal or not.
The entities that assert, or may assert, an interest in all or a
portion of the Debtor's cash are Anthem, Sunwest Bank, and
California Statewide Certified Development Corporation.
The Debtor's annual revenue for 2022 was $13.990 million and its
revenue through October 27, 2023 was $5.458 million. The Debtor's
revenue for 2022 was higher due in large part to a contract with
San Bernadino County to provide it with COVID-19 testing.
The court said If and to the extent that, as of the October 27,
2023 petition date, Anthem, Sunwest and/or CSCDC hold a duly
perfected, enforceable, unavoidable, and valid lien in all, or a
portion of, the Debtor's cash as of the Petition Date, then such
entity will receive a replacement lien in the Debtor's
post-petition cash, to the same extent, validity, and priority up
to the amount of the cash collateral existing as of the Petition
Date, provided that no replacement lien will encumber or otherwise
attach to any causes of action of the bankruptcy estate under
Chapter 5 of the Bankruptcy Code or any proceeds of the causes of
action.
A hearing on the matter is set for December 13, 2023 at 10 a.m.
A copy of the motion is available at https://urlcurt.com/u?l=slOqUX
from PacerMonitor.com.
A copy of the order is available at https://urlcurt.com/u?l=RWt1gy
from PacerMonitor.com.
About Equaltox, LLC
Equaltox, LLC is a full service reference laboratory that can
provide almost any type of blood testing.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. C.D. Cal. Case No. 8:23-bk-12243) on
October 27, 2023. In the petition signed by Sulaiman Masood, member
and manager, the Debtor disclosed up to $10 million in both assets
and liabilities.
Robert S. Marticello, Esq., at Smiley Wang-Ekvall, LLP, represents
the Debtor as legal counsel.
EQUESTRIAN EVENTS: Trustee Hires Keller Williams as Broker
----------------------------------------------------------
EQUESTRIAN EVENTS, LLC seeks approval from the U.S. Bankruptcy
Court for the Northern District of Illinois to employ Keller
Williams as Broker.
The firm will market and sell the Debtor's real property located at
45 W 015 Welter Road, Maple Park, Illinois.
The firm will be paid a commission of 4 percent of the total sale
amount for the property.
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:
Paul Tomaszewski
Keller Williams
407 S 3rd St # 114
Geneva, IL 60134
Tel: (630) 262-9500
Email: Tomaswalkerteam@kw.com
About Equestrian Events
Equestrian Events, LLC operates a horse boarding business at
45W015-45W017 Welter Rd, Maple Park, Illinois. It has 100%
ownership interest in the property, which has a current value of
$2.10 million.
Equestrian Events filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ill. Case No. 20
21793) on Dec. 21, 2020. Brian Anderson, its manager, signed the
petition.
At the time of filing, the Debtor disclosed total assets of
$2,186,326 and total liabilities of $3,162,525.
Judge Timothy A. Barnes oversees the case.
Springer Larsen Greene, LLC serves as the Debtor's legal counsel.
Skyylight Services and Silver Bottom, LLC, as Lenders, are
represented by Mark A. Carter, Esq., Richard Polony, Esq., and
Daniel L. Morriss, Esq., at Hinshaw & Culbertson LLP as counsel.
ESSY QUALITY: Amends IRS Claims Pay Details
-------------------------------------------
ESSY Quality Health Care LLC submitted a Second Amended Proposed
Plan of Reorganization dated October 26, 2023.
The Debtor has time filed and fully paid its 941/940 taxes in each
quarter of 2022 and remains current on its payments through the
petition date and will continue to do so.
The IRS has amended its claim as of September 1, 2023 and in
response to the amendment, the Debtor is filing this Second Amended
Plan of Reorganization.
Class 3 consists of IRS Priority Claim. The IRS has filed an
unsecured priority claim in the amount of $1,037,192.97
($896,229.90 + $42,953.02 accrued interest). The total amount of
the IRS unsecured priority claim payable pursuant to the term of
the plan totals: $1,037,192.97, this will be paid over a term of 60
months at 7% per annum.
Class 4 consists of IRS Secured Claim. This claim totals $44,027.31
The debt secured by the lien is for unpaid 940/941 taxes from QI
2013, Q4 2014, and QI, 2015 in the amount of$40, 527.21 plus
penalty and interest totaling $3,500.01.
Class 5 consists of Unsecured Claims Less than $40,000. The IRS has
a general unsecured claim, not including penalty and interest in
the amount of $36,438.56 plus interest $4296.19 + $4653.30 from
2019. These amounts will be paid in full in 60 equal monthly
payments do be distributed pro rata. Concurrently, the SBA will be
paid $25,000.00 in equal monthly payments.
Class 6 consists of SBA Partially Secured Claim. The SBA' s proof
of claim totals $478,496.50. The secured portion of the SBA's
claim, ($237,031.29) will be reduced by the IRS' priming lien filed
in 2017 ($44,527.21) netting a total secured claim of $192,503.98,
and leaving an unsecured claim in the amount of $285,992.52 after
reduction for Class 5 payments, the SBA will have a $260,992.52
Class 7 claim which will be paid pari passu pro rata with the IRS
general unsecured Class 7.
The $192,503.98 secured portion of the SBA's loan will be paid per
the terms of the existing loan agreement which has a term of30
years and an interest rate of 3.75%. The unsecured claim will be
paid pari passu with the non-penalty portion of the IRS's unsecured
claim net of prepetition penalties.
Class 7 consists of IRS General Unsecured Claim. The IRS has a
general unsecured claim totaling $791,923.38 which is composed of
$531,442.60 in pre-petition penalties. The remainder of the
unsecured claim plus interest, totals $260,480.78. The remaining
claims consist of an unsecured priority claim for franchise taxes
payable to the State Comptroller in the amount of $2,204.48. The
debtor disputes this claim.
The Plan Proponent's financial projections show that the Debtor
will have projected disposable income between $23290.00 and
$25,209.00 per month.
The final Plan payment is expected to be paid 60 months from the
date the first plan payment is made.
The Plan will be funded from the Debtor's operations and the
disposable income generated after monthly expenses are deducted
from monthly income will be distributed to creditors as set forth
in the plan. Dozie Zogut Ony and Esther Ony will operate and manage
the Debtor's operations and make the distributions pursuant to the
confirmed plan.
A full-text copy of the Second Amended Plan dated October 26, 2023
is available at https://urlcurt.com/u?l=vwPQxd from
PacerMonitor.com at no charge.
Debtor's Counsel:
Michael J. O'Connor, Esq.
MICHAEL O'CONNOR ATTORNEY
The Spectrum Building
613 NW Loop 410, Ste 840
San Antonio TX 78216
Tel: (210) 729-6009
E-mail: oconnorlaw@gmail.com
About ESSY Quality Health Care
ESSY Quality Health Care, LLC, is a home health care services
provider.
ESSY Quality Health Care sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. W.D. Tex. Case No. 23-50442) on April
17, 2023. In the petition signed by Dozie Zogus Ony, managing
member, the Debtor disclosed up to $50,000 in assets and up to $10
million in liabilities.
Judge Craig A. Gargotta oversees the case.
Michael J. O'Connor, Esq., at Michael J. O'Connor Law Office, is
the Debtor's legal counsel.
EXPEDIA GROUP: Egan-Jones Hikes Senior Unsecured Ratings to BB
--------------------------------------------------------------
Egan-Jones Ratings Company on October 24, 2023, upgraded the
foreign currency and local currency senior unsecured ratings on
debt issued by Expedia Group, Inc. to BB from BB-. EJR also
withdraws the rating on commercial paper issued by the Company.
Headquartered in Seattle, Washington, Expedia Group, Inc. provides
online travel services for leisure and small business travelers.
GOODLIFE PHYSICAL: No Change in Patient Care, 4th PCO Report Says
-----------------------------------------------------------------
Tamar Terzian, the court-appointed patient care ombudsman, filed
with the U.S. Bankruptcy Court for the Central District of
California a fourth interim report regarding the quality of patient
care provided at Goodlife Physical Medicine Corp.'s health care
facilities.
In the report which covers the period August 17 to October 17,
2023, the PCO finds that all locations have adequate staff and
providers on site to meet the standard of care for each patient.
The PCO observed all medication (primarily consisting of lidocaine
and syringes) is properly stored and labeled and access is limited.
Goodlife does not have any controlled substances on site. The PCO
also noted that Goodlife has sufficient equipment to continue to
provide the quality of care for the patients. No patients or
employees have reported complaints or grievances for this location.
The PCO cited no changes to report currently in terms of the
quality of care and did not observe operational concerns as
contemplated by Section 333(b)(3) of the Bankruptcy Code with
potential patient safety implications.
A copy of the ombudsman report is available for free at
https://urlcurt.com/u?l=M7zthb from PacerMonitor.com.
The ombudsman may be reached at:
Tamar Terzian, Esq.
Terzian Law Group
1122 E. Green Street
Pasadena, CA 91106
Telephone: (818) 242-1100
Facsimile: (818) 242-1012
Email: tterzian@terzlaw.com
About Goodlife Physical Medicine Corp
Goodlife Physical Medicine Corp, a company in Redondo Beach,
Calif., filed a petition for relief under Chapter 11 of the
Bankruptcy Code (Bankr. C.D. Calif. Case No. 23-10340) on Jan. 23,
2023. At the time of the filing, the Debtor reported up to $50,000
in assets and $1 million to $10 million in liabilities.
Judge Sandra R. Klein oversees the case.
The Debtor is represented by Leslie A. Cohen, Esq., at Leslie Cohen
Law, PC.
Tamar Terzian, Esq., at Terzian Law Group is the patient care
ombudsman appointed in the Debtor's Chapter 11 case.
GREEN PLAINS: Egan-Jones Retains B- Senior Unsecured Ratings
------------------------------------------------------------
Egan-Jones Ratings Company on October 17, 2023, maintained its 'B-'
foreign currency and local currency senior unsecured ratings on
debt issued by Green Plains Inc. EJR also withdrew the rating on
commercial paper issued by the Company.
Headquartered in Omaha, Nebraska, Green Plains Inc. owns and
operates ethanol plants located in the Midwest U.S.
GREENWAY HEALTH: Moody's Ups CFR to B3 & Alters Outlook to Stable
-----------------------------------------------------------------
Moody's Investors Service upgraded Greenway Health, LLC's Corporate
Family Rating to B3 from Caa1 and Probability of Default Rating to
B3-PD from Caa1-PD. At the same time, Moody's assigned a B3 rating
to Greenway's proposed first lien senior secured bank credit
facility, consisting of a $375 million term loan and $30 million
revolving credit facility. The outlook changed to stable from
negative.
Net proceeds from the proposed term loan and $125 million of
preferred equity from the company's private equity sponsor, Vista,
will be used to repay Greenway's existing term loan due February
2024.
All ratings are subject to the execution of the transaction as
currently proposed and Moody's review of final documentation. The
instrument ratings are subject to change if the proposed capital
structure is modified. The Caa1 ratings on the company's existing
senior secured credit facilities (revolver and term loan) have not
been changed and will be withdrawn upon close of the transaction.
RATINGS RATIONALE
The upgrade of the CFR to B3 reflects Greenway's improved debt
capital structure, enhanced liquidity, and extension of debt
maturities that provide the company with additional runway to
continue to improve its operating performance. The $125 million
preferred equity investment, leading to a substantial debt
reduction and a pro forma leverage improvement to around 5x from
6.5x as of the LTM ended June 30, 2023 (Moody's adjusted, including
add-backs for non-recurring and restructuring expenses, excluding
these add-backs pro forma leverage can be viewed as 6.5x), is a key
positive financial strategy and governance consideration.
In the first nine months of fiscal 2023, Greenway's operating
performance showed signs of improvement with low single digit
revenue and double digit EBITDA growth. Revenue growth benefited
from stabilizing churn rates and price increases, while
profitability increased from implemented cost savings initiatives.
Moody's believes that Greenway's prior product issues and the need
to invest in compliance possibly at the expense of product
innovation, resulted in a weaker competitive position for Greenway.
The company's new bookings have been declining since 2019,
underscoring the challenges Greenway faces in expanding its
services to current customers and attracting new ones, which are
key to sustaining revenue growth. As a result, Moody's expects very
modest revenue growth in the low-single digits in fiscal 2024 and
2025, largely driven by stable retention rates and the expectation
for improving bookings. Continued innovation will be important to
maintain high levels of customer retention and fuel organic revenue
growth. Accordingly, with these ongoing investments, additional
margin expansion will likely be modest.
With the material reduction in debt and one-time expenses, free
cash flow will improve to about $15-$20 million in fiscal 2024.
Greenway benefits from its largely recurring revenue, diversified
customer base and highly embedded products and services that
support solid retention rates. The long term industry trends also
remain favorable, supported by ambulatory market growth and the
increasing demand for technology solutions that can help healthcare
providers become more efficient and lead to better patient
outcomes.
Moody's expects Greenway will maintain good liquidity, supported by
pro forma closing cash balance of $25 million and the expectation
for around $15-$20 million of free cash flow in fiscal 2024.
Liquidity will also be supported by an undrawn $30 million revolver
due December 2028.
The stable outlook reflects Moody's expectation that Greenway will
continue to improve its operating performance and credit metrics,
with leverage falling below 5x debt/EBITDA and free cash flow to
debt increasing to mid-single digits in 2024.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if Greenway demonstrates revenue
growth in the mid-single digit range while leverage is sustained
below 5x and free cash flow is maintained in the mid-single digit
percentage of adjusted debt. The ratings for Greenway could be
downgraded if operating performance tracks below Moody's
expectations with leverage approaching 7x or liquidity weakening
(e.g., negative free cash flow).
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 $90
million and 100% of consolidated EBITDA, plus an unlimited amount
subject to the greater of 4.5x first lien leverage ratio and the
first lien leverage ratio immediately prior to giving effect to
such transactions. Amounts up to $90 million along with
incremental facilities incurred in connection with acquisitions and
investments may have an earlier maturity than the initial term
loans. 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.
Available amounts under the general restricted payments basket may
be reallocated to incur debt.
Headquartered in Tampa, FL, Greenway provides ambulatory solutions
and services for electronic health records, practice management,
electronic data interchange, practice analytics, population health,
and revenue cycle management. Controlled by affiliates of Vista
Equity Partners, the company reported approximately $276 million of
revenue in the LTM ended June 30, 2023.
The principal methodology used in these ratings was Software
published in June 2022.
GRUPO HIMA: Gets OK to Sell Assets to Eastern Health for $5.3MM
---------------------------------------------------------------
Grupo Hima San Pablo, Inc. and its affiliates received court
approval to sell assets to Eastern Health, LLC.
In his order, Judge Enrique Lamoutte Inclan of the U.S. Bankruptcy
Court for the District of Puerto Rico held that Eastern Health is a
"good faith purchaser."
"The approval of the sale to Eastern Health through the asset
purchase agreement is considered to be deemed fair and reasonable
and in the best interests of [the companies'] estates," the
bankruptcy judge said.
Eastern Health made a $5.3 million offer for the assets, which
consist of real and personal properties associated with the
operation of the businesses of Grupo Hima San Pablo's affiliates
Centro Medico del Turabo, Inc. and Hima San Pablo Properties, Inc.
The assets include the Hima San Pablo Humacao Hospital, an acute
care general hospital in Humacao, P.R. They were sold to Eastern
Health "free and clear" of liens, claims and encumbrances.
The companies previously put the assets up for bidding and held an
auction on Oct. 2 where Eastern Health emerged as the winning
bidder. The next highest bidder is Caribbean Med, which offered
$5.2 million for the assets.
About Grupo Hima San Pablo
Grupo HIMA San Pablo, Inc. serves as a diversified healthcare
services holding company pursuant to a corporate reorganization of
several businesses related by common ownership. Through its
subsidiaries and affiliates, Grupo HIMA San Pablo primarily owns
and operates hospital facilities and other healthcare related
businesses. As of August 2023, the HIMA GROUP operates four
hospitals, with over 1,200 licensed beds, including an Oncological
Hospital, a multi-specialty physician practice management company,
Home Care Service (including infusion therapies and wound care), a
free-standing ambulatory center and a 16-ambulance service
company.
Grupo HIMA San Pablo and its affiliates filed Chapter 11 petitions
(Bankr. D. P.R. Lead Case No. 23-02510) on Aug. 15, 2023. In the
petition signed by its chief executive officer, Armando J.
Rodriguez-Benitez, Grupo HIMA San Pablo disclosed $500 million to
$1 billion in assets and $100 million to $500 million in
liabilities.
Judge Enrique S. Lamoutte Inclan oversees the cases.
Wigberto Lugo Mender, Esq., at Lugo Mender Group, LLC and
Pietrantoni Mendez & Alvarez, LLC serve as the Debtors' bankruptcy
counsel and special counsel, respectively.
The U.S. Trustee for Region 21 appointed an official committee of
unsecured creditors on Sept. 7, 2023. Porzio, Bromberg & Newman,
P.C. is the committee's legal counsel.
Edna Diaz De Jesus is the patient care ombudsman appointed in the
Debtors' Chapter 11 cases.
HELLO ALBEMARLE: Hires Cam Property as Property Manager
-------------------------------------------------------
Hello Albemarle LLC seeks approval from the U.S. Bankruptcy Court
for the Eastern District of New York to employ Cam Property
Management, LLC as property manager.
The firm's services include:
a. billing and collecting all rent and other charges payable
to the Debtor by tenants at the Property and, where necessary,
pursuing remedies to collect rent arrears;
b. processing applications for new leases and renewals of
existing leases for the units at the Property and preparing new
lease and renewal forms for execution;
c. coordinating with the Debtor on all applicable financial
recording and reporting requirements;
d. hiring and supervising all employees and contractors, as
agents of CAM and not the Debtor, necessary to properly maintain
and operate the Property;
e. ensuring compliance with all state and local laws and
regulations applicable to the Property; and
f. managing service requests and complaints from tenants at
the Property.
The firm will be paid a flat fee of $3,500 per month.
Joseph Cafiero, a partner at Cam Property Management, 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:
Joseph Cafiero
Cam Property Management, LLC
78 Delavan Street
Brooklyn, NY 11231
About Hello Albemarle LLC
The creditors of Hello Albemarle LLC in Brooklyn NY, filed an
involuntary petition for Chapter 11 protection (Bankr. E.D.N.Y.
Case No. 23-41326) on April 19, 2023.
Judge Nancy Hershey Lord oversees the case.
GOLDBERG WEPRIN FINKEL GOLDSTEIN LLP serve as the Debtor's legal
counsel.
HEYWOOD HEALTHCARE: Court OKs Cash Collateral Access Thru Dec 10
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Massachusetts,
Central Division, authorized Heywood Healthcare, Inc. and
affiliates to use cash collateral on an interim basis in accordance
with the budget, through December 10, 2023.
A further hearing on the matter is set for December 7 at 2 p.m.
As previously reported by the Troubled Company Reporter, the
Debtors require access to their cash collateral to fund the ongoing
operating expenses of the other Debtors during the Chapter 11
Cases.
Heywood's substantial investments to meet community needs and to
address increasing regional social and health detriments are
primarily supported through the acquisition of competitive grants
and philanthropic dollars, of which the Debtors have secured more
than $26 million over the past ten years. Recently, the Debtors
have endured numerous headwinds, as described in the Sullivan
Declaration. Historic operating margins averaging less than 1%,
largely due to Heywood Healthcare being one of the lowest
commercially reimbursed healthcare systems in the Commonwealth of
Massachusetts, have exacerbated the impacts of such headwinds.
The Debtors, the Massachusetts Development Finance Agency and U.S.
Bank Trust Company, National Association, as successor in interest
to U.S. Bank National Association, as trustee, are party to three
loan and trust agreements, each dated as of November 1,2019,
providing a bond facility, pursuant to which the Issuer issued the
following three series of bonds: (a) the Series 2019A Bonds in an
aggregate principal amount of $28.350 million, (b) the Series
2019B-1 Bonds in an aggregate principal amount of $10.525 million,
and (c) the Series 2019B-2 Bonds in an aggregate principal amount
of $11 million. Pursuant to the Prepetition LTAs, the Issuer loaned
the proceeds of the Series 2019 Bonds to the Debtors to, among
other things, refinance pre-existing bond debt obligations and
finance the construction, improvement, renovation and/or equipping
of the Debtors' health facilities. In connection with each of the
Series 2019 Bonds, the Debtors entered into a corresponding
continuing covenant agreement, each dated as of November 1, 2019
with Siemens Public, Inc., pursuant to which the Bondholder
purchased the applicable Series 2019 Bond and became the sole
registered and beneficial owner of such bond.
Separate from their bond debt obligations, the Debtors are also
party to the Loan Agreement, dated as of April 12, 2022 with
Siemens Financial Services, Inc., pursuant to which SFS provided
the Debtors with a term loan in the aggregate principal amount of
$10 million. The Prepetition Notes, together with the Prepetition
LTAs, the Series 2019 Bonds, the CCAs, the Master Indenture, the
Siemens Loan Agreement, and together with all other agreements,
documents, and instruments executed and/or delivered with, to or in
favor of the Prepetition Secured Parties,
The Debtors' obligations owing to the Bondholder and SFS are
evidenced and secured by the Debtors' obligations under the Master
Trust Indenture, dated as of November 1, 2019, by and among the
Debtors and U.S. Bank Trust Company, National Association,
successor in interest to U.S. Bank National Association.
U.S. Bank Trust Company, National Association, as Master Trustee,
Siemens Public, Inc., and Siemens Financial Services, Inc. assert a
potential interest in the cash collateral.
As of the Petition Date, the Debtors' prepetition secured
indebtedness includes approximately $71 million in funded debt held
by third-party lenders.
A copy of the order is available at https://urlcurt.com/u?l=zVkvuW
from PacerMonitor.com.
About Heywood Healthcare, Inc.
Heywood Healthcare, Inc. is a non-profit community-owned hospital
licensed for 134 bed hospital, located in Gardner, Massachusetts.
The Debtors sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Mass. Lead Case No. 23-40817) on October
1, 2023. In the petition signed by Thomas Sullivan, co-chief
executive officer, the Debtor disclosed up to $500,000 in both
assets and liabilities.
Judge Elizabeth D. Katz oversees the case.
John M. Flick, Esq., at Flick Law Group, PC, represents the Debtor
as legal counsel.
HEYWOOD HEALTHCARE: U.S. Trustee Appoints Joseph Tomaino as PCO
---------------------------------------------------------------
William Harrington, the U.S. Trustee for Region 1, appointed Joseph
Tomaino at Grassi Healthcare Advisors, LLC as patient care
ombudsman for Heywood Healthcare, Inc. and its affiliates.
Mr. Tomaino disclosed in a court filing that he has no connections
with Heywood Healthcare, creditors or any other party involved in
Heywood Healthcare's bankruptcy.
The ombudsman may be reached at:
Joseph J. Tomaino
Chief Executive Officer
Grassi Healthcare Advisors, LLC
750 Third Avenue
New York, NY 10017
Phone: 212-223-5020
Email: jtomaino@grassihealthcareadvisors.com
About Heywood Healthcare
Heywood Healthcare, Inc. is a non-profit community-owned hospital
in Gardner, Mass.
Heywood and affiliates filed Chapter 11 petitions (Bankr. D. Mass.
Lead Case No. 23-40817) on Oct. 1, 2023. In the petition filed by
its chief executive officer, Thomas Sullivan, Heywood reported
$100,000 to $500,000 in assets and up to $50,000 in liabilities.
Judge Elizabeth D. Katz oversees the cases.
John M. Flick, Esq., at Flick Law Group, P.C. is the Debtor's
bankruptcy counsel.
HILTON GRAND: Moody's Affirms Ba3 CFR & Cuts Secured Debt to Ba2
----------------------------------------------------------------
Moody's Investors Service downgraded the senior secured bank credit
facility rating of Hilton Grand Vacations Borrower LLC (HGV) to Ba2
from Ba1 after the company announced plans to issue $1.8 billion of
additional secured debt to acquire Bluegreen Vacations Holding
Corporation (BVH). At the same time, Moody's affirmed the other
ratings of HGV, including its corporate family rating at Ba3,
probability of default rating at Ba3-PD and senior unsecured rating
of B2. The planned secured notes and secured term loan are assigned
a Ba2 rating. The company's speculative grade liquidity rating is
unchanged at SGL-2. The outlook is stable.
"The affirmation reflects Moody's forecast that HGV will be able to
reduce pro forma debt/EBITDA of about 5.5x to below 4.5x within
two years of the acquisition close as well as the company's
improved scale in terms of revenue, managed properties and member
count," said Pete Trombetta, Moody's VP-Senior Analyst. The
affirmation is also driven by governance considerations as HGV has
shown the ability and willingness to reduce debt/EBITDA after a
debt financed acquisition previously. In 2021, HGV acquired Diamond
Resorts and reduced leverage to 4x from about 5.5x within two years
of the acquisition close. The downgrade to the secured rating
reflects the larger portion of secured debt in the company's
capital structure – more than 70% of total pro forma debt is
secured.
HGV plans to issue $1.8 billion of secured debt – a $900 million
7-year term loan B and $900 million of 8-year secured notes – to
fund the acquisition of BVH, repay existing BVH debt and pay fees
and expenses. The purchase price assumes $75 per share of BVH,
payable in cash. The acquisition is expected to close in the first
quarter of 2024. BVH is the largest unbranded timeshare company. It
maintains marketing agreements with brands such as Bass Pro Shops
and NASCAR.
RATINGS RATIONALE
HGV's Ba3 CFR reflects its well-recognized brand name and
relationship with Hilton Worldwide Holdings Inc. which allows HGV's
members to use their timeshare points to stay at hotel rooms within
the Hilton Worldwide system. As well, through the acquisition of
Diamond Resorts International and the planned acquisition of BVH,
HGV has improved diversification both by geography and product
offering while expanding scale and its presence in drive-to
markets. The ratings also reflect HGV's upscale focus on urban and
resort markets with high inherent demand. HGV's ratings reflect
risk associated with the integration of BVH while still digesting
the Diamond acquisition - while the integration of Diamond has
proceeded as planned, HGV still faces risks associated with
spending required to rebrand the properties. Moody's does not
expect significant deleveraging below 4x going forward, as cash
flow will be used for shareholder returns as the company remains in
its public net leverage ratio target of 2.0x-3.0x debt/EBITDA,
which translates to 3.5x-4.5x on a Moody's adjusted basis including
100% of non-recourse securitized debt.
The stable outlook reflects Moody's expectation that HGV will
successfully integrate the BVH acquisition and return debt/EBITDA
to around 4.5x by the end of 2025.
HGV has good liquidity with $227 million of unrestricted cash and
$866 million available under its $1.0 billion committed revolving
credit facility that expires in December 2026. Moody's expect these
cash balances will be sufficient to cover cash needs over the next
12-18 months. The company also has access to a $750 million ABS
warehouse facility which the company can borrow against until May
2024 with all amounts borrowed to be repaid in 2025. The company is
subject to a first lien net leverage covenant under which Moody's
expect the company will maintain adequate cushion.
The Ba2 rating on the senior secured bank credit facility, the same
as the CFR, reflects that secured debt makes up the preponderance
of the debt in the capital structure. The B2 rating on the
company's unsecured debt is two notches below the Ba3 corporate
family rating reflecting the debt's junior position in the capital
structure below the senior secured credit facility.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if the company successfully
integrates the BVH acquisition with debt/EBITDA, inclusive of
securitized debt, sustained below 4.5x and EBITA/interest expense
sustained around 4.5x. Higher ratings would also require the
company maintain a conservative financial strategy around share
repurchases and dividends as well as maintaining good liquidity.
Ratings could be downgraded if liquidity weakens or the company
takes a more aggressive stance on share repurchases or dividends
leading to higher leverage. Specifically if debt/EBITDA, inclusive
of securitized debt, is sustained above 5.25x with EBITA/interest
expense sustained below 3.0x, a downgrade could occur.
Headquartered in Orlando, Florida, Hilton Grand Vacations Borrower
LLC is a wholly owned subsidiary of Hilton Grand Vacations, Inc., a
public company listed on NYSE. Hilton Grand Vacations, Inc. is a
global timeshare company engaged in developing, marketing, selling
and managing timeshare resorts under the Hilton Grand Vacations
brand name. It also finances and services loans provided to
consumers for their timeshare purchases. The standalone company
manages over 150 located in the US, Europe, Mexico, the Caribbean,
Canada and Japan. Net revenue for the 12 months ended June 30, 2023
was about $3.7 billion.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
HILTON GRAND: S&P Places 'BB' ICR on CreditWatch Negative
---------------------------------------------------------
S&P Global Ratings placed its ratings on Hilton Grand Vacations
Inc. (HGV), including the 'BB' issuer credit rating and issue-level
ratings, on CreditWatch with negative implications.
S&P said, "We plan to resolve the CreditWatch over the next several
months after we review the terms of the financing plan, assess
business risks, opportunities, and cash flow characteristics of the
combined entity, and evaluate HGV's financial policy in light of
multiple large-scale and leveraging acquisitions in recent years.
If we lower ratings, we believe the downgrade would be limited to
one notch due to incremental leverage and demonstrated risk
appetite over the past few years.
"The CreditWatch negative placement reflects the probability that
we could lower the 'BB' issuer credit rating on HGV one notch due
to higher leverage anticipated from the acquisition of Bluegreen.
HGV intends to acquire Bluegreen at a total enterprise value of
approximately $1.5 billion, which it estimates is a purchase
multiple of about 10.5x 2024 adjusted EBITDA or 6x adjusted EBITDA
including revenue and cost synergy assumptions. HGV plans to fund
the acquisition and transaction expenses with approximately $1.8
billion of incremental debt. HGV will also consolidate
approximately $627 million of timeshare securitized debt issued by
Bluegreen, which we deconsolidate in our measure of
captive-adjusted leverage. We estimate Bluegreen will generate
approximately $60 million-$70 million of S&P Global
Ratings-captive-adjusted EBITDA in 2024. Our measure of adjusted
debt to EBITDA is more than 2x higher than HGV's stated pro forma
combined leverage of about 3.4x. This is primarily because of our
inclusion of transaction costs in 2024, assumption of realized cost
synergies and the cash costs to achieve them, and captive finance
adjustments to EBITDA. We estimate that pro forma for the
transaction, HGV's adjusted leverage could increase to about 6x,
well above our 4.5x downgrade threshold through 2024 as it
integrates Bluegreen into its portfolio. The company expects to
close the transaction in the first half of 2024."
Bluegreen will add scale and diversity while further shifting its
owner base toward lower-income households. Bluegreen will add
approximately 218,000 members to HGV's portfolio and increase its
reach into 14 new geographies, primarily the northeast and southern
U.S. Bluegreen also holds partnerships with Bass Pro Shops and
Choice Hotels that will diversify HGV's tour flow, which is
concentrated at its resorts. Bluegreen's ownership base is also
younger and newer than HGV's, and the company believes it can take
advantage of it by upgrading Bluegreen's owners into higher-price
vacation ownership interests. S&P said, "Nonetheless, we believe
the shift in HGV's ownership base toward consumers with lower
household incomes, due to the Diamond and Bluegreen acquisitions,
comes with added risk in a weaking macroeconomic environment. On
its third-quarter earnings call, HGV lowered guidance for adjusted
EBITDA partly due to inflation's impact and a softer consumer
macroeconomic environment. S&P Global Ratings economists recently
reported that the risk of recession over the next 12 months has
moderated, yet it remains elevated so we forecast a slowdown in
consumer spending growth. If consumers continue to moderate
spending, especially on discretionary items, we believe leverage
would remain elevated longer, absent changes in capital
allocation."
S&P said, "HGV's recent acquisitions of Bluegreen and Diamond
reflect a risk appetite to take on leverage above its publicly
stated 2x-3x net leverage target. While we believe that HGV may
reduce leverage over the long term toward its policy range, HGV has
demonstrated a risk appetite and a willingness to take on
substantial leverage for large-scale acquisitions that contrast
with its policy of 2x-3x. In resolving the CreditWatch, we plan to
assess the company's policy of sustaining leverage around its
policy range over the long term and its impact on the rating.
"We plan to resolve the CreditWatch over the next several months
after we review additional disclosures for the terms of the
financing plan, assess business risks, opportunities, and cash flow
characteristics of the combined entity, and evaluate HGV's
financial policy in light of multiple large-scale and leveraging
acquisitions in recent years. If we lower ratings, we believe HGV's
issuer credit rating downgrade would be limited to one notch. We
plan to resolve our CreditWatch of the issue-level ratings once we
review the financing terms."
IGIT LOGISTICS: Unsecured Creditors Will Get 100% of Claims in Plan
-------------------------------------------------------------------
IGIT Logistics, LLC, filed with the U.S. Bankruptcy Court for the
Central District of California a Disclosure Statement describing
Chapter 11 Plan dated October 30, 2023.
IGIT Logistics, LLC is an active California Limited Liability
Company established in 2018 as a transportation services company.
Debtor's liabilities include one unsecured loan with U.S. Small
Business Administration, Business loans and debts for unpaid goods
and services.
The debtor's income comes from a Transportation services agreement
with the United States Postal Service ("USPS"). Debtor receives
weekly direct deposits from "USPS" for its transportation services.
Prior to the filing of the bankruptcy, all the deposits were being
garnished by "SBA", consequently, making it impossible to continue
operating its business.
The Debtor has managed its business before the filing of this
Chapter 11 case and will continue to do so after the confirmation
of the Plan. The Debtor remains a Debtor In Possession. Debtors'
primary goal is to reorganize and restructure its debt.
The unsecured Priority claim of the Franchise Tax Board in the
amount of $3,452.31 shall be paid in equal quarterly instalments,
commencing on the effective Date of the Plan. The payment is
determined by multiplying the Amount of Priority allowed Claim by
an interest rate equal to the one-year constant maturity treasury
index amortized over 4 ½ years (paid 5 years from the petition
date).
Class 4a consists of General Unsecured Claims. The allowed
unsecured claims total $48,373.18. This Class will receive an
installment payment amount of $806.22 on the 1st Day of 1st Month
immediately after Effective Date. This Class will receive a
distribution of $48,373.18 or 100% of their allowed claims. This
Class is impaired.
Class 4b consists of the Unsecured Claim of the U.S. Small Business
Administration (SBA). The amount of claim in this Class total
$186,450.80. This Class will receive an installment payment of
$857.48 on the 1st Day of 1st Month immediately after Effective
Date until November 30, 2053. This Class will receive a
distribution of $205,795.20 or 100% of their allowed claims. This
Class is impaired.
The Debtor will retain ownership of the IGIT Logistics, LLC 's
property under the Plan.
The funding of the Plan will be by way of "available cash" on the
Effective Date of the Plan, "future disposable income" from revenue
generated by the Debtor and the Reorganized Debtor and thereafter
the Reorganized Debtor's cash flow from operations.
A full-text copy of the Disclosure Statement dated October 30, 2023
is available at https://urlcurt.com/u?l=RTDOGI from
PacerMonitor.com at no charge.
Counsel for the Debtor:
Onyinye Anyama Esq.
ANYAMA LAW FIRM | A PROFESSIONAL LAW CORPORATION
18000 Studebaker Road, Suite 325
Cerritos, CA 90703
Tel: (562) 645-4500
Fax: (562) 645-4494
E-mail: info@anyamalaw.com
About IGIT Logistics
IGIT Logistics, LLC is an active California Limited Liability
Company established in 2018 as a transportation services company.
The Debtor filed Chapter 11 Petition (Bankr. C.D. Cal. Case No.
23-11357) on June 30, 2023.
Onyinye N. Anyama, Esq. of ANYAMA LAW FIRM, APC represents the
Debtor as legal counsel.
IMMANUEL SOBRIETY: Unsecureds' Recovery Hiked to 10.64% in Plan
---------------------------------------------------------------
Immanuel Sobriety, Inc., submitted an Amended Chapter 11 Plan of
Reorganization dated October 26, 2023.
The Debtor's assets consist of cash on hand, furnishings in its
residential locations, office equipment and 6 motor vehicles
(primarily vans used to transport the Debtor's residents).
The Debtor believes its assets are worth approximately $528,000,
which consists primarily of cash on hand ($450,000). The Debtor's
remaining assets include its vehicles to operate its business and
miscellaneous office equipment and residential furniture ($78,000).
The Plan will be funded by the following sources based on available
capital: (1) the cash reserves the Debtor has accumulated during
the Bankruptcy Case and has on hand in the Debtor's possession on
the Effective Date, which the Debtor estimates will be
approximately $450,000, and (2) cash generated from the Debtor's
ongoing business operations.
Under the Plan, general unsecured creditors will receive a
distribution equal to at least 10.64% of each claim (a total
distribution of $66,504 paid to Class 6). In a Chapter 7 scenario,
general unsecured creditors would receive no payment.
Class 6 consists of General Unsecured Claims. Total amount of Class
6 claims is approximately $624,651.22. Allowed Class 6 claimants
will be paid a prorated distribution equal to 10.64% of their claim
paid. The first payment shall be made on the 10th day of the third
full month following the Effective Date and continue on the 1st day
of the month every 3 months thereafter until paid in full. This
Class will receive a distribution of $66,504. This Class is
impaired.
Interest holders are the parties who hold ownership interest (i.e.,
equity interest) in the Debtor. Such interest holders are
classified in bankruptcy plans, but not entitled to vote. However,
in this case, the Debtor is a nonprofit public benefit corporation.
Therefore, there are no interest holders classified in the Plan.
The Plan will be funded with the following sources:
* the cash reserves the Debtor has accumulated during the
Bankruptcy Case and has on hand in the Debtor's possession on the
Effective Date, which the Debtor estimates will be approximately
$450,000; and
* cash generated from the Debtor's ongoing business
operations.
A full-text copy of the Amended Plan dated October 26, 2023 is
available at https://urlcurt.com/u?l=uB71aL from PacerMonitor.com
at no charge.
General Bankruptcy Counsel for the Debtor:
Crystle J. Lindsey, Esq.
Law Offices of Crystle J. Lindsey
Keen-Summit Capital Partners LLC
453 S. Spring St., Suite 400
Los Angeles, CA 90013
Telephone: (310) 882-1863
Email: crystle27@icloud.com
About Immanuel Sobriety
Immanuel Sobriety Inc. provides drug and alcohol rehabilitation
programs and treatment services.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. C.D. Calif. Case No. 23-10806) on March 2,
2023. In the petition signed by its chief executive officer,
Elizabeth Reid, the Debtor disclosed up to $500,000 in assets and
up to $1 million in liabilities.
Judge Wayne Johnson oversees the case.
The Law Office of Crystle J. Lindsey is the Debtor's legal
counsel.
Tamar Terzian is the patient care ombudsman appointed in the
Debtor's Chapter 11 case.
INDIANA FINANCE: Moody's Rates 2023A/B Education Bonds 'Ba2'
------------------------------------------------------------
Moody's Investors Service has assigned an initial Ba2 rating to the
Indiana Finance Authority's Educational Facilities Revenue Bonds,
Series 2023A (Matchbook Learning Schools of Indiana, Inc. Project)
and Educational Facilities Revenue Bonds, Series 2023B (Taxable)
(Matchbook Learning Schools of Indiana, Inc. Project). The bonds
will be issued in the expected par amounts of $18.1 million and
$510,000, respectively. Following issuance, the Series 2023A/B
bonds will be the school's only outstanding debt. The outlook is
positive.
RATINGS RATIONALE
The initial Ba2 reflects the charter school's stable source of
demand over the long-term given its unusual position as a zoned
neighborhood school within the Indianapolis School District's
service area, which also supports the school's prospects for
continued charter renewal despite relatively poor academic
performance. Negative considerations include the charter school's
uneven financial performance in recent years, though liquidity is
adequate to support present operations and is projected to improve
in the coming years. The rating also considers the relatively high
leverage following this issuance and the need for growth to achieve
sum sufficient coverage of future debt service requirements.
Governance is a key driver of all initial rating actions. The
school's governance is a credit positive, especially when compared
to schools of a similar size, as Matchbook Learning is a nationwide
organization that specializes in school turnaround. The school's
broad and diverse board is led by the founder of the national
organization. Leadership has implemented a comprehensive,
data-driven academic program and formally adopted policies in areas
such as conflict of interest. Minor deficiencies were noted in the
school's most recent authorizer review, though the school remains
in good standing regarding its future authorization.
RATING OUTLOOK
The positive outlook reflects Moody's expectation that the school's
financial performance will improve in the near term following the
completion of various one-time expenses in fiscal 2022 and
operating revenue will rise as the planned expansion boosts
enrollment.
FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATINGS
-- Successful expansion into the high school grades that improves
coverage of projected debt service requirements
-- Stabilized and improved financial margins
FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATINGS
-- Loss of partnership with Indianapolis Public Schools that
provides geographic service area
-- Issues with meeting enrollment targets tied to high school
expansion
LEGAL SECURITY
The bonds are payable from payments received pursuant to a loan
agreement between Matchbook Learning Schools of Indiana and the
Indiana Finance Authority. The authority serves as the issuer of
the bonds. Under the loan agreement, the school has made a gross
revenue pledge. The revenues are primarily comprised of state
funding, though the agreement does also include any other revenues
derived from operation of the school. A first lien mortgage on the
financed facilities further backs the loan. Security features
include a trustee intercept of the school's state funding and a
debt service reserve fund.
USE OF PROCEEDS
Bond proceeds will be used to acquire and renovate a property that
will allow the organization to expand to serve grades 9-12.
PROFILE
Matchbook Learning Schools of Indiana is a single site charter
school located in Indianapolis. The organization presently serves
643 students in grades K-8, though it is in the process of
expanding by developing a second facility to serve grades 9-12.
METHODOLOGY
The principal methodology used in these ratings was US Charter
Schools published in September 2016.
IONIS PHARMACEUTICALS: Egan-Jones Retains B Sr. Unsecured Ratings
-----------------------------------------------------------------
Egan-Jones Ratings Company on October 30, 2023, maintained its 'B'
foreign currency and local currency senior unsecured ratings on
debt issued by Ionis Pharmaceuticals, Inc. EJR also withdrew the
rating on commercial paper issued by the Company.
Headquartered in Carlsbad, California, Ionis Pharmaceuticals, Inc.
operates as a biotechnology company.
IVCINYA COMPANY: Has Deal on Cash Collateral Access
---------------------------------------------------
Ivcinya Company, LLC and the U.S. Small Business Administration
have advised the U.S. Bankruptcy Court for the Central District of
California, Los Angeles that they have reached an agreement
regarding the Debtor's use of cash collateral and now desire to
memorialize the terms of this agreement into an agreed order.
The Debtor believes that Fora Financial Asset Securitization 2021
LLC and Forward Financing LLC filed UCC-1 Financing Statements
within 90 days of the petition date. As such, these liens are
subject to avoidance actions. Nonetheless, the claims of Fora
Financial and Forward Financing are all rendered unsecured due to
the value of the Debtor's assets and the amounts owed to senior
lienholders.
The Debtor is current with its adequate protection payments to the
SBA.
The Debtor provides trucking services throughout Southern
California. The Debtor has four drivers that are subcontractors;
that number fluctuates from time to time.
The parties agree that any and all of the Personal Property
Collateral constitutes the cash collateral of the SBA.
The Debtor may use cash collateral in accordance budget to pay
ordinary and necessary expenses, beginning November 1, 2023 through
confirmation of a Chapter 11 plan of reorganization, or until the
case is converted or dismissed, whichever first occurs.
The Debtor will remit adequate protection payments to the SBA in
the amounts and terms as set forth in the applicable SBA Loan
documents, and continuing until further order of the Court
regarding interim and/or final use of cash collateral, or the entry
of an order confirming the Debtor's plan of reorganization,
whichever occurs earlier.
The SBA will be entitled to a super-priority claim over the life of
the Debtor's bankruptcy case, pursuant to 11 U.S.C. Sections 503(b)
and 507(b), which claim will be limited to any diminution in the
value of SBA's collateral, pursuant to the SBA Loan, as a result of
Debtor's use of cash collateral on a post-petition basis.
As adequate protection, retroactive to the Petition Date, SBA will
receive a replacement lien on all postpetition revenues of the
Debtor to the same extent, priority and validity that its liens
attached to the cash collateral. The scope of the Replacement Lien
is limited to the amount (if any) that cash collateral diminishes
postpetition as a result of the postpetition use of cash collateral
by the Debtor. The Replacement Lien is valid, perfected and
enforceable and will not be subject to dispute, avoidance, or
subordination, and this Replacement Lien need not be subject to
additional recording.
The Debtor agrees to maintain insurance on the Personal Property
Collateral and to designate SBA as a loss payee or additional
insured in accordance with the SBA Loan and related loan documents
and agrees to provide proof of insurance within seven days upon
written request of the SBA.
A hearing on the matter is set for December 5, 2023 at 1 p.m.
A copy of the stipulation is available at
https://urlcurt.com/u?l=H2vhvG from PacerMonitor.com.
About Ivcinya Company, LLC
Ivcinya Company, LLC is a trucking company. The Debtor sought
protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr.
C.D. Cal. Case No. 23-14313) on July 11, 2023.
In the petition signed by Randy Johnson, managing member, the
Debtor disclosed up to $500,000 in assets and up to $1 million in
liabilities.
Judge Neil W. Bason oversees the case.
Matthew D. Resnik, Esq., at RHM LAW, LLP., represents the Debtor as
legal counsel.
JETBLUE AIRWAYS: Egan-Jones Retains B- Senior Unsecured Ratings
---------------------------------------------------------------
Egan-Jones Ratings Company on October 19, 2023, maintained its 'B-'
foreign currency and local currency senior unsecured ratings on
debt issued by JetBlue Airways Corporation. EJR also withdrew the
rating on commercial paper issued by the Company.
Headquartered in Long Island City, New York, JetBlue Airways
Corporation provides non-stop passenger flight services.
JUICE ROLL UPZ: Wins Cash Collateral Access Thru Dec 6
------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California,
Santa Ana Division, authorized Juice Roll Upz, Inc. to use cash
collateral on an interim basis in accordance with the budget,
through December 6, 2023.
As previously reported by the Troubled Company Reporter, the Debtor
requires the use of cash collateral to pay its reasonable expenses
it incurs during the ordinary course of its business of sell goods
to retail businesses.
The Debtor's income has dropped in the last year, and dropped from
the year before that. As of 2023, total income for the company
totaled $1.2 million with profit of $25,134. The Debtor continues
to have regular business and believes the market will begin to
increase again. To that extent they have reduced their staff to
increase profits.
The Debtor maintains a leasehold interest in 9674 Hermosa Avenue,
Rancho Cucamonga, California 91730. This lease has been renewed for
another three years prior to the filing of the petition.
The Debtor owns a total of approximately $139,965 split between
cash, various bank accounts and levied funds.
The Debtor deposited $25,000 with their landlord at the beginning
of the lease. This amount is subject to offset by the landlord.
The Debtor's debts consist of the following:
-- Small Business Administration: The totality of the Debtor's
assets are secured by the lien of the Small Business Administration
which, as of the filing of the petition, totals approximately $2.1
million. This is the senior lien secured on October 15th, 2021 and
is under-secured by the value of the corporation consisting of its
business goodwill, tangible and intangible assets.
-- MCA Lenders: The Debtor incurred several loans secured by the
receivables of the corporation by UCC-1 notices. The total of these
liens is $722,124.
The amounts and ages of the liens are as follows:
-- Blue Rock Capital Group, LLC. $232,500.
-- Forward Financial, LLC. $84,700.
-- Fundfi Merchant Funding, LLC. $189,894.
-- GBR Funding West, Inc. $161,000.
-- Bluevine, Inc. $54,030.
-- County of San Bernardino: The County of San Bernardino has
a claim, presumed to be secured of $5,462.
-- Toyota Financial Services: Toyota has a claim secured to
one of the vehicles.
-- Unsecured Obligations: The Debtor owes a total of $242,883
in other unsecured obligations.
The major events precipitating the Chapter 11 Bankruptcy Filing are
the acquisition and servicing requirements of the MCA Lenders and
two subsequent lawsuits that threaten the ability of the Debtor to
operate.
A continued hearing on the matter is set for December 6 at 10 a.m.
A copy of the order is available at https://urlcurt.com/u?l=7NZPhX
from PacerMonitor.com
About Juice Roll Upz, Inc.
Juice Roll Upz, Inc. is a manufacturer of e-liquids and vape
juices. The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. C.D. Cal. Case No. 23-12077) on October 10,
2023.
In the petiion signed by Joshua Tongco, president, the Debtor
disclosed $497,964 in assets and $3,103,919 in liabilities.
Judge Theodor Albert oversees the case.
Anerio Ventura Altman, Esq., at Lake Forest Bankruptcy, represents
the Debtor as legal cousel.
KAI 786: Court OKs Cash Collateral Access Thru Jan 2024
-------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of Texas, San
Antonio Division, authorized KAI 786, LLC to use cash collateral on
an interim basis in accordance with the budget, through January 10,
2024.
The Debtor requires the immediate use of the cash collateral to
fund operational and administrative expenses.
Federal Home Loan Mortgage Corporation and San Antonio Water System
assert an interest in the Debtor's cash collateral.
The Congress chartered the Secured Lender to facilitate the
nationwide secondary residential mortgage market. It also chartered
the Secured Lender to facilitate the nationwide secondary
residential mortgage market.
The Debtor's Properties are encumbered by a Mortgage Deed of Trust,
Assignment of Rents and Security Agreement and Fixture Filing to
secure repayment of a Multifamily Note dated February 13, 2019, in
the amount of $2.4 million by the Debtor in favor of the Secured
Lender. Prior to the Petition Date, the Note and Deed of Trust,
together with all other accompanying loan documents, was assigned
to the Secured Lender. On June 12, 2023, the Secured Lender sent
the Debtor a letter notifying the Debtor that the maturity date of
the Note had been accelerated making all sums secured by the
security instrument immediately due and payable as a consequence of
the Debtor's default on the Note.
The Debtor is directed to deposit all rent collections or any other
funds received in connection with the Properties in the Segregated
Account.
The Debtor will continue to make monthly, regular payments to the
Secured Lender in the amount of $24,050, or such other amount
approved by the Secured Lender, on the first day of each month with
funds from the Segregated Account; provided, however, that the
Debtor may use proceeds from any draws authorized under the Interim
DIP Order or any subsequent related order in the event funds in the
Segregated Account are insufficient to make the monthly, regular
payment to the Secured Lender.
As adequate protection, the Secured Lender is granted valid,
binding, enforceable, and unavoidable post-petition security
interests co-extensive with the Secured Lender's prepetition liens,
in all currently owned or hereafter acquired property and assets of
the Debtor.
As further partial adequate protection for the use by the Debtor of
the Secured Lender's cash collateral, the Secured Lender is granted
an allowed administrative expense under 11 U.S.C. Section 507(b) to
the extent to any diminution in the value of the Secured Lender's
interest in the cash collateral.
The Debtor will continue to maintain insurance in accordance with
the Loan Documents: (a) covering the Debtor's Properties required
in the prepetition loan documents between the Debtor and the
Secured Lender; and (b) naming the Secured Lender as the loss
payee. The Debtor will deliver to the Secured Lender evidence of
such insurance.
A final hearing on the matter is set for January 3, 2024 at 9:30
a.m.
A copy of the court's order is available at
https://urlcurt.com/u?l=4jBr2K from PacerMonitor.com.
About Kai 786, LLC
Kai 786, LLC owns three apartment complexes in San Antonio, TX
valued at $3.76 million.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. W.D. Tex. Case No. 23-51004) on July 31,
2023. In the petition signed by Saajedul Kaiyom, managing member,
the Debtor disclosed $3,787,730 up to total assets and $2,375,156
in total liabilities.
Judge Michael M. Parker oversees the case.
Paul Steven Hacker, Esq., at Hacker Law Firm, PLLC, represents the
Debtor as legal counsel.
LETS TALK INTERACTIVE: Hires Essex Richards as Local Counsel
------------------------------------------------------------
Lets Talk Interactive, Inc. seeks approval from the U.S. Bankruptcy
Court for the Western District of North Carolina to employ Essex
Richards, P.A. as local counsel.
The firm will render these services:
a. assist with providing legal advice concerning the
responsibilities as a Chapter 11 debtor-in-possession and the
continued management of its business;
b. assist primary counsel with negotiating, preparing, and
pursuing confirmation of a chapter 11 plan and approval of
disclosure statement and all related reorganization agreements and
documents;
c. file and assist with preparing all necessary motions,
applications, reports, orders, objections and the like associated
with prosecuting the Chapter 11 case;
d. prepare and appear in Bankruptcy Court to protect the
Debtor's best interest;
e. perform all other services for the Debtor which may become
necessary in the Chapter 11 case; and
f. prosecute and defend the Debtor in all adversary proceedings
related to the base case.
The firm will be paid at these rates:
John C. Woodman $400 per hour
David DiMatteo $300 per hour
Paralegals $135 per hour
Staffs $65 per hour
The firm received a retainer of $5,000.
The firm will also be reimbursed for reasonable out-of-pocket
expenses incurred.
John C. Woodman, Esq., a partner at Essex Richards, 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:
John C. Woodman, Esq.
Essex Richards, P.A.
1701 South Boulevard
Charlotte, NC 28203
Tel.: (704) 337-4300
Email: jwoodman@essexrichards.com
About Lets Talk Interactive, Inc.
Lets Talk Interactive, Inc., filed a Chapter 11 bankruptcy petition
(Bankr. W.D.N.C. Case No. 23-30655) on September 21, 2023.
The Debtor hires Ward Damon, P.L. as counsel, and Essex Richards,
P.A. as local counsel.
LETS TALK INTERACTIVE: Hires Ward Damon P.L. as Counsel
-------------------------------------------------------
Lets Talk Interactive, Inc. seeks approval from the U.S. Bankruptcy
Court for the Western District of North Carolina to employ Ward
Damon, P.L. as its attorneys.
The firm will render these services:
a. give advice to the Debtor with respect to its powers and
duties as debtor-in-possession in the continued management of its
business operations;
b. advice the debtor on 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;
d. protect the interest of the Debtor in all matters pending
before the court;
e. represent the Debtor in negotiation with its creditors in
the preparation of a plan.
The firm will be paid at these rates:
Steven E. Wallace, Esq. $450 per hour
Paralegals $135 per hour
Staffs $65 per hour
The firm received a retainer in the amount of $6,738.
Steven E. Wallace, Esq., a partner at Ward Damon P.L., 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 through:
Steven E. Wallace, Esq.
WARD DAMON P.L.
4420 Beacon Cir
West Palm Beach, FL 33407
Phone: (561) 220-0904
About Lets Talk Interactive, Inc.
Lets Talk Interactive, Inc., filed a Chapter 11 bankruptcy petition
(Bankr. W.D.N.C. Case No. 23-30655) on September 21, 2023.
The Debtor hires Ward Damon, P.L. as counsel, and Essex Richards,
P.A. as local counsel.
LINCOLN NATIONAL: Egan-Jones Retains BB+ Senior Unsecured Ratings
-----------------------------------------------------------------
Egan-Jones Ratings Company on October 31, 2023, maintained its
'BB+' foreign currency and local currency senior unsecured ratings
on debt issued by Lincoln National Corporation.
Headquartered in Radnor, Pennsylvania, Lincoln National Corporation
is a financial services company headquartered in Radnor, PA,
marketed as Lincoln Financial Group.
LOCAL 8 INTERNATIONAL: Amy Mitchell Named Subchapter V Trustee
--------------------------------------------------------------
The Acting U.S. Trustee for Region 18 appointed Amy Mitchell of
Comcast Corp. as Subchapter V trustee for Local 8, International
Longshoremen's and Warehousemen's Union.
Ms. Mitchell will be paid an hourly fee of $425 for her services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Ms. Mitchell declared that she is a disinterested person according
to Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Amy Mitchell
P.O. Box 2289
Lake Oswego, OR 97035
Phone: (503) 675-9955
Fax: (503) 675-9977
Email: mitchelltrustee@comcast.net
About Local 8 International
Local 8, International Longshoremen's and Warehousemen's Union is a
labor union which primarily represents dock workers.
The Debtor filed Chapter 11 petition (Bankr. D. Ore. Case No.
23-32366) on October 18, 2023, with $394,481 in assets and
$1,017,820 in liabilities. Troy L. Mosteller, secretary and
treasurer, signed the petition.
Judge Peter C. Mckittrick oversees the case.
Susan S. Ford, Esq. of Sussman Shank, LLP represents the Debtor as
legal counsel.
LOCAL 8 INTERNATIONAL: Hires Sussman Shank as Legal Counsel
-----------------------------------------------------------
Local 8, International Longshoremen's and Warehousemen's Union
seeks approval from the U.S. Bankruptcy Court for the District of
Oregon to employ Sussman Shank LLP as its general bankruptcy
counsel.
The firm will provide the Debtor with advice on its duties and
responsibilities as a debtor-in-possession, preparing and filing
schedules, defending motions for relief from stay, analysis and
objections to claims, formulation and approval of a plan of
reorganization under Subchapter V of Chapter 11 and information
statement, negotiations with creditors and other parties in
interest, and all other matters requiring legal representation of
the Debtor in its case.
The Debtor has provided Sussman Shank with a retainer of
$137,020.09 to be applied to post-petition fees and expenses
will be paid based upon its normal and usual hourly billing rates.
The firm will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Susan S. Ford, Esq., a partner at Sussman Shank, assured the court
that the firm is a "disinterested person" as the term is defined in
Section 101(14) of the Bankruptcy Code.
Sussman Shank can be reached at:
Susan S. Ford, Esq.
Thomas W. Stilley, Esq.
Joshua G. Flood, Esq.
Sussman Shank LLP
1000 SW Broadway, Suite 1400
Portland, OR 97205-3089
Telephone: (503) 227-1111
Facsimile: (503) 248-0130
Email: sford@sussmanshank.com
tstilley@sussmanshank.com
jflood@sussmanshank.com
About Local 8, International Longshoremen's
and Warehousemen's Union
Local 8, International Longshoremen's and Warehousemen's Union in
Portland, OR, filed its voluntary petition for Chapter 11
protection (Bankr. D. Or. Case No. 23-32366) on October 18, 2023,
listing $394,481 in assets and $1,017,820 in liabilities. Troy L.
Mosteller as secretary/treasurer, signed the petition.
Judge Peter C. Mckittrick oversees the case.
SUSSMAN SHANK LLP serve as the Debtor's legal counsel.
LORDSTOWN MOTORS: $10.2M Sale to LandX Motors to Fund Plan
----------------------------------------------------------
Lordstown Motors Corp., et al., submitted a Disclosure Statement
with respect to Modified First Amended Joint Chapter 11 Plan dated
October 30, 2023.
The Debtors' filed their Chapter 11 Cases to, among other things,
sell assets in an efficient and value maximizing manner,
consolidate the resolution of claims in a single forum, prosecute
their substantial claims against Foxconn and maximize Distributions
to Holders of Allowed Claims and Interests.
As a result, the Debtors undertook a process to market and sell
assets and have obtained Court approval to sell assets to LandX
Motors Inc. for an aggregate cash purchase price of $10,200,000;
established Bar Dates for parties to file Claims against the
Debtors and are working to resolve the material claims against
them. In addition, the Debtors filed a complaint against Foxconn in
the Bankruptcy Court on the Petition Date. The Plan is consistent
with these purposes.
It provides for the preservation and continuation of the litigation
against Foxconn and other causes of action of the Debtors, the
resolution of Claims against the Debtors, the preservation of the
Debtors' tax attributes, the prompt distribution of certain of the
Debtors' Cash to creditors and the preservation of the Debtors'
Interests (which are expected to benefit from existing Cash), the
future generation of litigation proceeds, and the preservation of
the Debtors' ability to conduct business and enter into one or more
transactions after the Effective Date to maximize value, including
transactions that could permit the Post-Effective Date Debtors to
make use of substantial tax attributes; all in a manner that is
superior to a liquidation.
Class 3 consists of General Unsecured Claims. The allowed unsecured
claims total $23,484,831 to $33,484,831. This Class will receive a
distribution of 100% of their allowed claims. Each Holder of an
Allowed General Unsecured Claim against a Debtor shall receive its
Pro Rata share of the Debtors' Cash (without regard to the
particular Debtor against which such Claim is Allowed and excluding
the Post-Effective Date Debtor Amount), after (i) the satisfaction
of the Allowed Administrative Claims, Allowed Priority Tax Claims,
Allowed Other Priority Claims, and Allowed Secured Claims, and (ii)
the Professional Fees Escrow Account is funded or all Professional
Fee Claims are satisfied.
Post-Petition Interest to Holders of Allowed General Unsecured
Claims shall be paid as follows: (A) to the extent that there is
sufficient Cash for Distribution to pay all Allowed General
Unsecured Claims in full after satisfaction of (i) and (ii) plus
Post-Petition Interest at the Federal Judgment Rate in full on such
Allowed General Unsecured Claims, then Holders of such Allowed
General Unsecured Claims shall be entitled to payment in full of
Post-Petition Interest at the Federal Judgment Rate; (B) to the
extent that there is sufficient Cash for Distribution to pay all
Allowed General Unsecured Claims in full after satisfaction of (i)
and (ii) and some, but not all, Post Petition Interest on such
Claims at the Federal Judgment Rate, then Holders of such Allowed
General Unsecured Claims shall be entitled to their Pro Rata share
of Post-Petition Interest at the Federal Judgment Rate.
Following the Effective Date, the Post-Effective Date Debtors shall
be authorized, in their sole discretion, to operate in the ordinary
course of business, including monetization of the Debtors' Retained
Causes of Action and other assets. The Post Effective Date Debtors
shall fund Distributions to Holders of Claims and Interests from
all Assets, which include, but are not limited to, (i) Cash on hand
as of the Effective Date, (ii) proceeds from the sale of the
Debtors' assets, (iii) proceeds from Retained Causes of Action and
(iv) insurance proceeds received by the Post-Effective Date
Debtors.
In addition, the Post-Effective Date Debtors shall be authorized to
reserve the Post-Effective Date Amount to fund the Post-Effective
Debtors. The Post-Effective Date Amount shall be used to pay the
costs of administering the Post-Effective Date Debtors and may be
increased consistent with the provisions set forth in Article V.E
of the Plan. The Post-Effective Date Debtor Cash may be used to
make Distributions (if any) to Holders of Foxconn Preferred Stock,
Holders of Common Stock Interests and Holders of Allowed Section
510(b) Claims, or to fund one or more post-Effective Date
transactions to optimize the tax efficiency of the Debtors, subject
to the terms and conditions of the New Organizational Documents and
the Certificate of Designation.
A copy of the Modified First Amended Plan dated October 30, 2023,
is available at https://urlcurt.com/u?l=oxAqtF from kccllc.net, the
claims agent.
Co-Counsel to the Debtors:
Thomas E Lauria, Esq.
Matthew C. Brown, Esq.
Fan B. He, Esq.
WHITE & CASE LLP
200 S. Biscayne Blvd.
Miami, FL 33131
Tel: (305) 371-2700
E-mail: tlauria@whitecase.com
mbrown@whitecase.com
fhe@whitecase.com
- and -
David M. Turetsky, Esq.
1221 Avenue of the Americas
New York, NY 10020
Tel: (212) 819-8200
E-mail: david.turetsky@whitecase.com
- and -
Jason N. Zakia, Esq.
111 South Wacker Drive
Chicago, IL 60606
Tel: (312) 881-5400
E-mail: jzakia@whitecase.com
- and -
Roberto Kampfner, Esq.
Doah Kim, Esq.
RJ Szuba, Esq.
555 South Flower Street, Suite 2700
Los Angeles, CA 90071
Tel: (213) 620-7700
E-mail: rkampfner@whitecase.com
doah.kim@whitecase.com
rj.szuba@whitecase.com
Proposed Co-Counsel to the Debtors:
Kevin Gross, Esq.
Daniel J. DeFranceschi, Esq.
Paul N. Heath, Esq.
Amanda R. Steele, Esq.
Jason M. Madron, Esq.
RICHARDS, LAYTON & FINGER, P.A.
One Rodney Square
920 N. King Street
Wilmington, DE 19801
Tel: (302) 651-7700
Fax: (302) 651-7701
E-mail: gross@rlf.com
defranceschi@rlf.com
heath@rlf.com
steele@rlf.com
madron@rlf.com
kandestin@rlf.com
About Lordstown Motors Corp.
Lordstown Motors Corp. -- http://www.lordstownmotors.com/-- is an
electric vehicle OEM developing innovative light duty commercial
fleet vehicles, with the Endurance all electric pickup truck as its
first vehicle. It has engineering, research and development
facilities in Farmington Hills, Mich. and Irvine, Calif.
On June 27, 2023, Lordstown Motors Corp. and two affiliated debtors
filed voluntary petitions for relief under Chapter 11 of the
Bankruptcy Code (Bankr. D. Del. Lead Case No. 23-10831). The cases
are pending before Judge Mary F. Walrath.
The Debtors tapped White & Case, LLP and Richards, Layton & Finger,
P.A. as bankruptcy counsels; Baker & Hostetler, LLP as special
counsel; Jefferies, LLC as investment banker; KPMG, LLP as auditor;
and Silverman Consulting as restructuring advisor. Kurtzman Carson
Consultants, LLC is the Debtors' claims and noticing agent and
administrative advisor.
The U.S. Trustee for Regions 3 and 9 appointed an official
committee to represent unsecured creditors in the Debtors' Chapter
11 cases. The committee tapped Troutman Pepper Hamilton Sanders,
LLP, as legal counsel and Huron Consulting Group Inc. as financial
advisor.
LUMEN TECHNOLOGIES: Egan-Jones Retains B Senior Unsecured Ratings
-----------------------------------------------------------------
Egan-Jones Ratings Company on October 18, 2023, maintained its 'B'
local currency senior unsecured ratings on debt issued by Lumen
Technologies, Inc.
Headquartered in Monroe, Louisiana, Lumen Technologies, Inc.
provides digital solutions for home and business premises.
MARIO THE BAKER: Tarek Kiem of Kiem Law Named Subchapter V Trustee
------------------------------------------------------------------
The U.S. Trustee for Region 21 appointed Tarek Kiem, Esq., at Kiem
Law, PLLC as Subchapter V trustee for Mario the Baker Downtown,
Inc.
Mr. Kiem will be paid an hourly fee of $300 for his services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. Kiem declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Tarek Kiem, Esq.
Kiem Law, PLLC
8461 Lake Worth Road, Suite 114
Lake Worth, FL 33467
Tel: (561) 600-0406
Email: tarek@kiemlaw.com
About Mario the Baker Downtown
Mario the Baker Downtown, Inc. filed Chapter 11 petition (Bankr.
S.D. Fla. Case No. 23-18594) on Oct. 20, 2023, with up to $50,000
in assets and $100,001 to $500,000 in liabilities.
Judge Laurel M. Isicoff oversees the case.
Thomas L. Abrams, Esq., represents the Debtor as legal counsel.
MAXLINEAR INC: S&P Lowers ICR to 'BB-' on Revenue Volatility
------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on U.S.-based
provider of radio frequency, analog, and mixed-signal integrated
circuits MaxLinear Inc. to 'BB-' from 'BB' and removed the ratings
from CreditWatch, where they were placed with negative implications
on May 12, 2022. S&P also lowered its issue-level rating on the
company's first-lien term loan to 'BB-' from 'BB' based on a
recovery rating of '3'.
S&P said, "The stable outlook reflects our expectation that the
downturn will stabilize and revert in the second half of 2024 such
that MaxLinear resumes meaningful revenue and EBITDA growth in
2025. We also expect the company will maintain sufficient liquidity
to cover any cash settlements or penalties and leverage will not
remain above 3x even if it draws on its revolver.
"The rapid revenue decline over 2023 and 2024 represents a greater
level of volatility than we previously expected for the rating.
MaxLinear's year-over-year quarterly revenue declines have
accelerated throughout 2023 to over 50% in the third quarter from
about 6% in the first quarter, with the Broadband and Connectivity
business segments now at their lowest points since the Intel Home
Gateway acquisition in July 2020. We expect Infrastructure will
remain the most robust segment, supported by demand for 5G wireless
backhaul products, storage accelerators, and high throughput (400
and 800 gigabit) optical data center products. We also believe the
company will benefit longer term, when the industry cycle improves,
from design win activity for new products related to Wi-Fi 7 and
high speed ethernet connectivity."
Nonetheless, with significantly slower capital spending by telecom
operators and the consumption of excess customer and channel
inventory built up over the last few years, S&P expects total
revenue in 2024 to be 45%-47% lower than the peak reached in 2022.
This represents a significantly greater level of volatility than
the 24.5% peak-to-trough revenue decline during the last downcycle
over 2017-2019.
S&P said, "Compared with its larger analog and communications
semiconductor peers like Broadcom Inc., we believe this volatility
reflects MaxLinear's relatively small scale and greater end-market
and product concentration. While we forecast the company will start
returning to growth in the second half of 2024, we note there is a
considerable lack of visibility in the current environment and the
downturn may be more prolonged.
"The stable outlook reflects our expectation that the cyclical
downturn will stabilize and revert in the second half of 2024 such
that MaxLinear returns to meaningful revenue and EBITDA growth in
2025. We also expect the company will maintain sufficient liquidity
to cover any cash settlements or penalties from the arbitration
process with Silicon Motion and leverage will not stay sustainably
above 3x even if the company draws on its revolver."
S&P could lower the rating if:
-- The ongoing weak demand environment or sales execution issues
leads to worse revenue and EBITDA declines than in S&P's base-case
forecast despite restructuring efforts or further delays before a
return to revenue and EBITDA growth; and
-- S&P expects leverage could exceed 3x or FOCF to debt could
decrease towards 10% at the trough of a cyclical market downturn.
This could also be due to increased borrowings to fund a
significant cash settlement or penalty from the Silicon Motion
arbitration.
S&P could raise the rating if:
-- S&P believes MaxLinear has reduced the volatility of its
operating performance by significantly increasing its revenue scale
and business and end-market diversification, while returning to
meaningful organic revenue growth; and
-- S&P expects leverage to stay below 1.5x and FOCF to debt above
25% on a sustained basis, even after accounting for acquisitions
and shareholder distributions. This could be driven by a relatively
favorable outcome for MaxLinear from the arbitration with Silicon
Motion, as well as a financial policy that deemphasizes
acquisitions and shareholder distributions.
MAYA J ATX: Seeks Cash Collateral Access
----------------------------------------
Maya J ATX, LLC, asks the U.S. Bankruptcy Court for the Western
District of Texas, for authority to use cash collateral in the
continuing operation of its business.
The Debtor requires the continued authority to use cash collateral
beyond the interim period in order to continue its business until a
plan of reorganization can be confirmed.
Magnolia BridgeCo, LLC and Cypress BridgeCo, LLC each hold deeds of
trust upon the Debtor’s real property including an Assignment of
Leases and Rents. Additionally, Magnolia BridgeCo, LLC filed a
UCC-1 financing statement covering all assets of the Debtor on May
13, 2022. Cypress BridgeCo, LLC filed a similar UCC-1 financing
statement on November 28, 2022.
The Debtor proposes to provide adequate protection to the parties
with an interest in cash collateral in the following manner:
a. The Debtor will provide all creditors with an interest in
cash collateral with a replacement lien upon assets obtained
post-petition to the same extent, priority and validity as their
pre-petition liens.
b. The Debtor will maintain insurance upon its assets.
c. The Debtor will provide adequate protection payments as
negotiated.
A copy of the Debtor's motion and budget is available at
https://urlcurt.com/u?l=vVmcT4 from PacerMonitor.com.
The Debtor projects total ending balance, on a monthly basis, as
follows:
$130,834 for November 2023;
$145,616 for December 2023; and
$160,148 for January 2024.
About Maya J ATX LLC
Maya J ATX LLC was formed as a Texas limited liability company on
March 31, 2022. It owns real estate located at 2513 and 2515 San
Gabriel Street and 2103 Nueces Street.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. W.D. Tex. Case No. 23-10737) on September
5, 2023. In the petition signed by Drew Dennett, manager, the
Debtor disclosed up to $50 million in both assets and liabilities.
Judge Shad Robinson oversees the case.
James Q. Pope, Esq., at The Pope Law Firm, represents the Debtor as
legal counsel.
MERIDIAN RESTAURANTS: Hires Reinsman Consulting as Consultant
-------------------------------------------------------------
Meridian Restaurants Unlimited and its affiliates seek approval
from the U.S. Bankruptcy Court for the District of Utah to employ
Reinsman Consulting, LLC as Employee Retention Credit (ERC)
consultant.
The firm will provide these services:
a. assist the Debtors in evaluating the estimated COVID-19
impact on Client's business, locations and people with respect to
the ERC;
b. assist in the analytics, calculation, capture, and
documentation of the Employee Retention Credit (ERC) and determine
employer eligibility and qualified wages paid in 2020 and 2021;
The firm will be paid at the rates 15 percent of gross refunds.
David Manges, president at Reinsman Consulting, 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:
David Manges
Reinsman Consulting, LLC
6160 Warren Pkwy Ste
Frisco, TX 75034-9415
About Meridian Restaurants Unlimited
Meridian Restaurants Unlimited, LC, owner and operator of
restaurants in Utah, and its affiliates filed voluntary petitions
for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Utah
Case No. 23-20731) on March 2, 2023. At the time of the filing,
Meridian Restaurants Unlimited disclosed $10 million to $50 million
in both assets and liabilities.
Judge Kevin R. Anderson oversees the cases.
The Debtors tapped Markus Williams Young & Hunsicker, LLC, as
bankruptcy counsel; Ray Quinney & Nebeker P.C. as local and
litigation counsel; Peak Franchise Capital, LLC as financial
advisor; 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.
MORAN FOODS: Moody's Cuts CFR & Secured 1st Lien Term Loan to Caa2
------------------------------------------------------------------
Moody's Investors Service downgraded Moran Foods LLC's corporate
family rating to Caa2 from Caa1 and its probability of default
rating to Caa2-PD from Caa1-PD and appended the PDR with the "/LD"
(limited default) designation. Moody's also downgraded the
company's backed senior secured first lien term loans to Caa2 from
Caa1 and its backed senior secured second lien term loans to Ca
from Caa3. Moody's will withdraw the ratings on the backed senior
secured first lien term loans in 1 business day given their
repayment in the debt exchange. Moody's affirmed Moran's backed
senior secured delayed draw term loan, super senior, at B3. Moody's
also assigned a Caa2 rating to the company's new backed first lien
first out ("FLFO") senior secured term loan and Caa3 rating to its
new backed first lien second out ("FLSO") senior secured term loan.
The outlook is negative. The ratings are subject to review of final
documentation.
Moran's completed an amendment to its first and second lien term
loans and super senior term loan which included an offer to
exchange its first lien term loans for new first lien first out
(FLFO) term loans and its second lien term loans for new first lien
second out (FLSO) loans. The new loans provide the option for
interest to be paid-in-kind (PIK). Lenders who consented for
interest to be PIK also received new equity from SAL Top, LLC
(indirect parent of Moran Foods, LLC). The amendment also included
an increase of the $70 million super senior at par to $90 million
and introduced the option for its interest to PIK. The amendment
allows Moran to re-borrow amounts that are repaid under the super
senior.
Moody's views the amendment whereby the company's first and second
lien debt and its super senior term loan allow for interest to PIK
to reduce its interest burden as a distressed exchange which is
limited default under Moody's definition. Moody's will remove the
/LD designation from the PDR in three business days.
The downgrade reflects Moody's belief that Moran's weak liquidity
and high financial leverage will not meaningfully improve over the
next 12 months. Moran's progress at improving operations has been
slow and its operating earnings and free cash flow have declined
significantly resulting in weak credit metrics. The company's
capital structure is unsustainable at its current level of earnings
which, when combined with its debt maturities in 2026, increases
the chances of a future debt restructurings that would be deemed a
distressed exchange. Any significant debt reduction at par will
largely depend on asset sales and cost reduction initiatives, which
carry higher execution risk. Debt to EBITDA reached a high of 9.6x
for the LTM ended July 1, 2023 from 6.7x in 2022 and EBIT to
interest dropped to 0.8x from 2.0x for the same period. Over the
next 12-18 months Moody's expects weak organic growth and for
leverage to remain high at over 10x. Moran's weak operating
performance, leading to negative free cash flow, will continue
given the challenging economic environment. The downgrade of the
senior secured first lien term loans reflects lower expected
recoveries given its weak performance.
The downgrade also reflects governance considerations particularly
Moran's aggressive financial policies. Moran's CIS score was
changed to CIS-5 from CIS-4 as its governance score was changed to
G-5 from G-4. The change in its governance score is related to both
its financial strategy and risk management as well as its
management credibility and track record, reflective of its very
high leverage, weak cash generation and completion of multiple
distressed exchanges.
The negative outlook reflects Moody's view that Moran's credit
metrics and liquidity will remain weak. Delays in realizing asset
sales and cost synergies could lead resulting in lower recoveries
and further downgrades.
RATINGS RATIONALE
Moran Foods' Caa2 CFR reflects its weak liquidity and credit
metrics with debt to EBITDA at nearly 10.0x and EBITA to interest
of about 0.8x, which assumes full payment of cash interest. High
leverage and low coverage reflect earnings and cash flow weakness
as the company's performance has taken longer than expected to
improve. Moody's expects leverage to remain in excess of 10x and
EBITA coverage of interest to remain weak at less than 1.0x. This
reflects the high execution risk associated with debt reduction,
which is highly contingent on asset sales, and cost reduction
initiatives to improve earnings. Moody's continues to believe that
the hard discount food retail sector is well positioned for growth
relative to other retail channels given its low price points and
relative resistance to economic cycles and e-commerce, albeit still
in a very highly competitive operating environment.
Moran's liquidity is weak. The company had $4 million of cash and
equivalents on the balance sheet on July 1, 2023. Moody's expects
the company to generate about $(20)-(30) million of negative free
cash flow in 2023. The company has a $180 million asset based
revolving credit facility ("ABL") that is used for seasonal
revolver borrowings and expires in February 2026. On July 1, 2023,
there was $70 million drawn under the ABL, leaving roughly $66
million available, which will be sufficient to repay $5.6 million
due in October 2024, however Moody's views remaining in covenant
compliance a risk over the next 12-18 months.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Ratings could be downgraded if the company's operating earnings,
cash flow and liquidity do not improve. Ratings could also be
downgraded if the likelihood of default increases for any reason or
should recovery rates erode.
Ratings could be upgraded if the company materially improves
operating earnings, cash flow and liquidity, such that leverage and
coverage improve to more sustainable levels and near term debt
obligations are be refinanced at par.
Moran Foods LLC is the parent of Save-A-Lot Holdings, LLC
("Save-A-Lot"). Moran Foods is a wholesaler to about 839 retail
partner licensed stores and 18 retail stores under the Save-A-Lot
banner. The company is majority owned by its lenders including JP
Morgan, Voya, CDPQ and Arbour Lane Capital and generates about $2.4
billion in annual revenue.
The principal methodology used in these ratings was Distribution
and Supply Chain Services published in February 2023.
MOUNT JOY BAPTIST: Hires Bray Financial as Loan Broker
------------------------------------------------------
Mount Joy Baptist Church of Washington DC seeks approval from the
U.S. Bankruptcy Court for the District of Maryland to employ Bray
Financial, Inc. as commercial loan broker.
The firm will assist the Debtor in obtaining a mortgage loan
commitment on its property located at 5410 Indian Head Highway;
Oxon Hill, MD 20745.
The firm will be paid $12,000 for obtaining the mortgage loan
commitment.
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:
Roderick Bray
Bray Financial, Inc.
1489 W Warm Springs Rd Suite 110
Henderson, NV
Tel: (702) 877-4004
About Mount Joy Baptist Church of Washington DC
Mount Joy Baptist Church of Washington, D.C. is a tax-exempt
religious organization.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Md. Case No. 23-16853) on September 26,
2023. In the petition signed by Bruce Mitchell, pastor/CEO, the
Debtor disclosed up to $10 million in both assets and liabilities.
Judge Lori S. Simpson oversees the case.
John D. Burns, Esq., at The Burns Law Firm, LLC, represents the
Debtor as legal counsel.
MOUNT JOY BAPTIST: Hires NAI The Michael as Real Estate Broker
--------------------------------------------------------------
Mount Joy Baptist Church of Washington DC seeks approval from the
U.S. Bankruptcy Court for the District of Maryland to employ NAI
The Michael Companies, Inc. as real estate broker.
The firm will assist in marketing and selling the Debtor's real
property located at 5410 Indian Head Highway; Oxon Hill, MD 20745.
The firm will be paid a commission of 3 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:
Gary Michael
NAI The Michael Companies, Inc.
10100 Business Parkway
Lanham, MD 20706
Tel: (301) 459-4400
About Mount Joy Baptist Church of Washington DC
Mount Joy Baptist Church of Washington, D.C. is a tax-exempt
religious organization.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Md. Case No. 23-16853) on September 26,
2023. In the petition signed by Bruce Mitchell, pastor/CEO, the
Debtor disclosed up to $10 million in both assets and liabilities.
Judge Lori S. Simpson oversees the case.
John D. Burns, Esq., at The Burns Law Firm, LLC, represents the
Debtor as legal counsel.
MOZ CORP: Cameron McCord Named Subchapter V Trustee
---------------------------------------------------
The U.S. Trustee for Region 21 appointed Cameron McCord, Esq., at
Jones & Walden, LLC, as Subchapter V trustee for Moz Corp, doing
business as Moz Corp Logistics.
Ms. McCord will be paid an hourly fee of $395 for her services as
Subchapter V trustee and will be reimbursed for work related
expenses incurred.
Ms. McCord declared that she is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Cameron McCord, Esq.
Jones & Walden, LLC
699 Piedmont Avenue, NE
Atlanta, GA 30308
Phone: (404) 564-9300
Fax: (404) 564-9301
Email: cmccord@joneswalden.com
About Moz Corp
Moz Corp, doing business as Moz Corp Logistics, operates in 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 Oct. 19,
2023, with $519,671 in assets and $2,632,303 in liabilities. Mursel
Ozkan, president, signed the petition.
Judge Barbara Ellis-Monro oversees the case.
Ian Falcone, Esq., at The Falcone Law Firm, PC serves as the
Debtor's bankruptcy counsel.
MP PPH LLC: Hires Raddatz & Associates LLC as Special Counsel
-------------------------------------------------------------
MP PPH LLC seeks approval from the U.S. Bankruptcy Court for the
District of Columbia to employ Raddatz & Associates, LLC as special
counsel.
The firm will handle landlord-tenant cases and issues for the
residential 674-unit apartment complex located in the 2300 block of
Good Hope Road SE, Washington, D.C. known as "Marbury Plaza".
The firm will be paid at the rate of $100 to $250 per hour.
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:
Mark R. Raddatz, Esq.
Raddatz & Associates, LLC
7921 Jones Branch Dr. Ste 200
Mc Lean, VI 22102
Tel: (703) 821-6700
About MP PPH LLC
MP PPH, LLC filed Chapter 11 petition (Bankr. D. D.C. Case No.
23-00246) on Aug. 31, 2023, with $100 million to $500 million in
assets and $50 million to $100 million in liabilities. Michael A.
Abreu, vice president of operations, signed the petition.
Judge: Elizabeth L Gunn oversees the case.
The Debtor tapped Marc E. Albert, Esq., at Stinson LLP as
bankruptcy counsel; Lewis Brisbois Bisgaard & Smith, LLP and Nixon
Peabody, LLP as special counsels; and Noble Realty Advisors, LLC as
property manager.
MUSCLEPHARM CORP: Seeks to Extend Exclusive Solicitation to Nov. 13
-------------------------------------------------------------------
MusclePharm Corporation asked the U.S. Bankruptcy Court for the
District of Nevada to extend its exclusive period to solicit
acceptances of its chapter 11 plan of reorganization from
September 12, 2023 to November 13, 2023.
The Debtor claimed that its chapter 11 case is unusually complex
due to, among other things, pre- and post-petition disputes among
its creditors and certain shareholders, the cessation of
operations prior to the petition date, leading to the need for
financing at the outset of the case, and the trustee motion.
The Debtor stated that it has gone to great lengths to preserve
the value of its bankruptcy estate and its reorganization
prospects, devoting its resources to successfully assuring a
smooth transition into Chapter 11, obtaining the necessary
financing, recommencing operations in order to maximize its value
as a going concern, and facilitating information gathering by the
Committee and creditors.
The Debtor also stated that as a result of these efforts, it has:
(i) reached a comprehensive settlement and, together with
the Committee, negotiated a consensual plan of
reorganization with key creditor constituencies;
(ii) obtained Court approval of the retention of investment
bankers to market substantially all of its assets;
(iii) obtained Court approval of bidding and auction
procedures for the sale of substantially all of its
assets;
(iv) obtained Court approval of the Disclosure Statement;
and
(v) received a stalking horse bid for its assets.
The Debtor will also participate in a settlement conference with
Drexler.
The Debtor explained that an extension of the exclusive
solicitation period is appropriate to allow it a fair opportunity
to solicit acceptances of the third plan and continue the
confirmation hearing if necessary.
MusclePharm Corporation is represented by:
Samuel A. Schwartz, Esq.
Gabrielle A. Hamm, Esq.
SCHWARTZ LAW, PLLC
601 East Bridger Avenue
Las Vegas, NV 89101
Tel: (702) 385-5544
Email: saschwartz@nvfirm.com
ghamm@nvfirm.com
About Musclepharm Corporation
Headquartered in Denver, Colorado, MusclePharm Corporation
(OTCQB: MSLP) http://www.musclepharm.com/and
http://www.musclepharmcorp.com/-- is a lifestyle company that
develops, manufactures, markets and distributes branded
nutritional supplements. It offers a broad range of
performance powders, capsules, tablets, gels and on-the-go ready
to eat snacks that satisfy the needs of enthusiasts and
professionals alike.
MusclePharm filed a petition for relief under Subchapter V of
Chapter 11 of the Bankruptcy Code (Bankr. D. Nev. Case No.
22-14422) on Dec. 15, 2022. In the petition filed by its chief
executive officer, Ryan Drexler, the Debtor reported assets and
liabilities between $10 million and $50 million.
The Honorable Natalie M. Cox is the case judge.
The Debtor tapped Samuel A. Schwartz, Esq., at Schwartz Law, PLLC
as legal counsel; Foley & Lardner, LLP as special securities
counsel; and Portage Point Partners, LLC as restructuring
advisor. Jeffrey Gasbarra of Portage Point Partners serves as the
Debtor's chief restructuring officer.
The U.S. Trustee for Region 17 appointed an official committee to
represent unsecured creditors in the Debtor's case. Pachulski
Stang Ziehl & Jones, LLP and Larson &Zirzow, LLC serve as the
committee's bankruptcy counsel and Nevada counsel, respectively.
NAVIGANT DEVELOPMENT: Public Sale Set for Dec. 7
------------------------------------------------
On Dec. 7, 2023, commencing at 10:00 a.m. Eastern Standard Time via
audio/video teleconference the details of which will be provided to
interested parties in advance of the sale date pursuant to the
terms of public sale, based upon the occurrence of one or more
events of default under certain documents including that certain
loan agreement dated as of Jan. 25, 2022, between Elizon DB
Transfer Agent LLC's predecessor in interest, as lender, and 1419
Partners LLC ("pledged entity"), as borrower, copies of which are
available for inspection as hereinafter described, Elizon DB
Transfer Agent LLC ("secured party") will, by public sale dispose
of the right, title and interest of Navigant Development LLC in and
to the following assets: pledgor's right, title and interest,
whether now owned or hereafter acquired, whether direct or
indirect, whether legal, beneficial or economic, whether fixed or
contingent, whether arising under the articles of organization or
operating agreement of pledged entity ("organizational documents"),
under any federal, state, county, municipal and other governmental
statutes, laws, rules, writs, orders, regulations, ordinances,
judgments, decrees and injunctions of governmental authorities
affecting pledged entity ("legal documents").
The public sale will be conducted y Mannion Auctions LLC by William
Mannion or Matthew D. Mannion, or such other auctioneer licensed in
the state of New York as selected by Secured Party in its sole and
absolute discretion.
The public sale of the collateral will be subject to the further
terms and conditions set forth in the "terms of public sale", which
are available online at https://rimarkmetplace.com/listing/48901
and by contacting:
Newmark
Attn: Brock Cannon
125 Park Avenue
New York, NY 10017
Tel: (212) 372-2066
Email: brock.cannon@nmrk.com
About Navigant Development
Navigant Development, LLC, a Chicago-based company engaged in
renting and leasing real estate properties, filed its voluntary
petition for Chapter 11 protection (Bankr. N.D. Ill. Case No.
21-10645) on Sept. 15, 2021, listing as much as $10 million in both
assets and liabilities. Anthony Tomaska, managing member, signed
the petition. Judge Jacqueline P. Cox presides over the case.
Allen J. Guon, Esq., at Cozen O'Connor, is the Debtor's legal
counsel.
NEWELL BRANDS: 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 Newell Brands, Inc. EJR also withdraws rating on
commercial paper issued by the Company.
Headquartered in Atlanta, Georgia, Newell Brands, Inc. retails
consumer products.
NEWPARK RESOURCES: Egan-Jones Retains B- Senior Unsecured Ratings
-----------------------------------------------------------------
Egan-Jones Ratings Company on October 27, 2023, maintained its 'B-'
local currency senior unsecured ratings on debt issued by Newpark
Resources, Inc.
Headquartered in The Woodlands, Texas, Newpark Resources, Inc.
provides environmental services to the oil and gas exploration and
production industry, primarily in the Gulf Coast market.
OIL STATES: Releases Third Quarter 2023 Results
-----------------------------------------------
Oil States International, Inc. has released its results of
operation and financial condition for the quarter ended September
30, 2023. The Company reported:
* Net income of $4.2 million, or $0.07 per diluted share,
reported for the quarter;
* Consolidated revenue of $194.3 million increased 6%
sequentially, boosted by higher offshore and international
activity;
* Adjusted EBITDA (a non-GAAP measure(1)) of $23.4 million
increased 23% sequentially;
* Offshore/Manufactured Products segment revenue increased 18%
sequentially to $111.0 million – the highest level reported since
the fourth quarter of 2016;
* Offshore/Manufactured Products segment's backlog increased
sequentially for a fifth consecutive quarter totaling $348 million
as of September 30, with a quarterly book-to-bill ratio of 1.2x;
* Third-quarter segment bookings were augmented by two
contract awards exceeding $15 million each
* Generated operating cash flow of $13.6 million in the
quarter; and
* Incurred facility consolidation charges of $1.6 million
($1.3 million after-tax, or $0.02 per share) associated with the
planned sales of certain manufacturing and service locations and
the relocation of related equipment.
Cash on-hand increased $10.5 million in the quarter, totaling $52.9
million at September 30, 2023. No borrowings were outstanding under
the Company's asset-based revolving credit facility at September
30, 2023. Liquidity (cash plus borrowing availability) totaled
$137.4 million at September 30, 2023, with amounts available to be
drawn under the ABL Facility totaling $84.5 million.
Oil States' President and Chief Executive Officer, Cindy B. Taylor,
stated: "Our third quarter results benefited from growth in
offshore and international spending, with significant sequential
and year-over-year increases in offshore-project activity and
backlog conversion. However, our quarterly performance was tempered
by an industry-wide decline in U.S. well completions which has been
ongoing since the start of 2023. We believe the U.S. activity
declines were triggered by weaker commodity prices in effect
earlier this year. With currently improved commodity pricing, we
expect U.S. activity to recover into 2024."
"Reported revenues in our Offshore/Manufactured Products segment
rose 18% sequentially and 16% year-over-year to $111 million in the
third quarter of 2023 -- the segment's highest revenue level since
the fourth quarter of 2016. Segment backlog increased for a fifth
consecutive quarter totaling $348 million as of September 30 --
benefiting from our customers' increased planned investments in
traditional and non-traditional offshore projects outside the
United States. We received two notable project awards in the third
quarter, including a production facility equipment order and a
contract for our Merlin(TM) Deepsea Mineral Riser System designed
for use in harvesting seabed minerals at extreme water depths.
These minerals are critical components for the development of
large-scale battery technology. The segment's bookings totaled $129
million, yielding a quarterly book-to-bill ratio of 1.2x.
"The receipt of another contract award for our Merlin Deepsea
Mineral Riser System this quarter demonstrates the industry's
recognition of our expertise and the technologies we have developed
to enable pathways toward a lower-carbon multi-source energy mix to
meet growing global energy demands. We are connecting the energy
future by leveraging our rich oil and gas heritage in the support
of additional energy sources while augmenting our core
technologies, setting the stage for longer-term growth.
"Our continued investments in technology and innovation were also
recently recognized by Gulf Energy, with our Active Seat Gate Valve
receiving the 2023 Gulf Energy Information Excellence Award for
Best Production Technology. This proprietary valve-technology
provides operators with exceptional sealing performance while
substantially reducing the amount of heavy grease used during valve
operations and personnel intervention at the wellhead.
"In the third quarter, we generated cash flow from operations of
$14 million and invested $2 million in net capital expenditures.
With no short-term debt outstanding, cash on-hand increased to $53
million during the period. We expect to enhance our liquidity
position and reduce our net debt in future quarters.
"We remain very encouraged by the continued up-cycle in offshore
and international activity, customer acceptance of our recent
technology introductions and growing backlog levels in our
Offshore/Manufactured Products segment coupled with an improving
commodity price environment."
A full-text copy of the Company's press release is available at
https://tinyurl.com/mwxsp4t4
About Oil States
Headquartered in Houston, Texas, Oil States International, Inc.
provides specialty products and services to oil and gas drilling
and production companies.
As of September 30, 2023, the Company had $1.048 billion in total
assets against $349.6 million in total liabilities.
Egan-Jones Ratings Company on September 19, 2023, maintained its
'CCC+' foreign currency and local currency senior unsecured ratings
on debt issued by Oil States International, Inc. EJR also withdraws
rating on commercial paper issued by the Company.
OILFIELD EQUIPMENT: Hires Moriah Real Estate as Real Estate Agent
-----------------------------------------------------------------
Oilfield Equipment Rental, LLC seeks approval from the U.S.
Bankruptcy Court for the Eastern District of Texas to employ Moriah
Real Estate Company as real estate agent.
The firm will market and sell the Debtor's real property known as
3800 S CR 1232, Midland, TX 79706.
The firm will be paid a commission of 4 percent of the first
$2,000,000 and 3 percent of the balance of the sale 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:
Wes Gotcher
Moriah Brokerage Services, LLC
303 W Wall Street Ste # 2400
Midland, TX 79701
Tel: (432) 682-2510
About Oilfield Equipment Rental, LLC
Oilfield Equipment Rental, LLC conducts business under the name
Rapid Flow Testing. The company is based in Midland, Texas.
Oilfield Equipment Rental filed a petition under Chapter 11,
Subchapter V of the Bankruptcy Code (Bankr. E.D. Texas Case No.
23-41325) on July 25, 2023, with $3,621,705 in assets and
$2,081,715 in liabilities. Mark Weisbart, Esq., at Hayward, PLLC
serves as Subchapter V trustee.
Howard Marc Spector, Esq., at Spector & Cox, PLLC represents the
Debtor as legal counsel.
OUTFRONT MEDIA: Egan-Jones Retains CCC Senior Unsecured Ratings
---------------------------------------------------------------
Egan-Jones Ratings Company on October 26, 2023, maintained its
'CCC' foreign currency and local currency senior unsecured ratings
on debt issued by OUTFRONT Media Inc. EJR also withdrew the rating
on commercial paper issued by the Company.
Headquartered in New York, OUTFRONT Media Inc. leases advertising
space on out-of-home advertising structures and sites.
P2 OAKLAND: Hires Tang & Associates as Legal Counsel
----------------------------------------------------
P2 Oakland CA, LLC dba East SF, LLC seeks approval from the U.S.
Bankruptcy Court for the Northern District of California to employ
Tang & Associates as general bankruptcy counsel.
The firm will provide these services:
(a) advise the Debtor on matters relating to administration of
the Estate, and on the Debtor's rights and remedies with regard to
the Estate's assets and the claims of secured and unsecured
creditors;
(b) appear for, prosecute, defend, and represent the applicant's
interest in suits arising in or related to this case, including any
adversary proceedings against the Debtor;
(c) assist in the preparation of such pleadings, applications,
schedules, orders, and other documents as are required for the
orderly administration of this estate; and
(d) represent the Debtor in any adversary proceeding to recover
property of the estate.
The firm will be paid at these rates:
Attorneys $400 per hour
Paralegals $200 per hour
The firm will received from the Debtor a retainer of $12,000 and
will also be reimbursed for reasonable out-of-pocket expenses
incurred.
Kevin Tang, Esq., a partner at Tang & Associates, 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:
Kevin Tang, Esq.
Tang & Associates
17011 Beach Blvd, Suite 900
Huntington Beach, CA 92647
Tel: (714) 594-7022
Fax: (714) 594-7024
Email: kevin@tang-associates.com
About P2 Oakland CA, LLC
P2 Oakland owns a single family residence located at 1434 34th Ave,
Oakland CA valued at $870,000. The Debtor also owns a soon to be
developed condominium property located at 1032-1034 Peralta St.,
Oakland, CA valued at $750,000.
P2 Oakland CA, LLC doing business as East SF, LLC in Oakland, CA,
filed its voluntary petition for Chapter 11 protection (Bankr. N.D.
Cal. Case No. 23-41186) on September 19, 2023, listing $1,620,002
in assets and $2,538,016 in liabilities. Bruce Edward Loughridge as
principal, signed the petition.
Judge William J. Lafferty oversees the case.
TANG & ASSOCIATES serve as the Debtor's legal counsel.
PACKAGING COORDINATORS: Moody's Alters Outlook on 'B3' CFR to Pos.
------------------------------------------------------------------
Moody's Investors Service affirmed the ratings of Packaging
Coordinators Midco, Inc. ("PCI"), including its B3 Corporate Family
Rating, B3-PD Probability of Default Rating (BDR), B2 backed senior
secured first lien revolving credit facility and backed senior
secured first lien term loan ratings. The outlook is revised to
positive from stable.
The rating affirmation reflects PCI's elevated but improving
leverage at 6.9x and good liquidity. Growth in earnings and
profitability will be supported by key commercial customer
contracts including support for customers involved in the supply of
GLP-1 products. Deleveraging will be support by the company's
margin expansion initiatives that include procurement, value
pricing and business optimization initiatives.
The positive outlook incorporates Moody's expectation of continuous
improvements of PCI's credit metrics in the next 12-18 months.
Moody's forecasts mid double-digit earnings growth, and financial
leverage approaching 5.5 times, over the next 12-18 months.
RATINGS RATIONALE
PCI's B3 CFR rating reflects its elevated financial leverage of
about 6.9x as of June 30, 2023. Moody's forecasts for PCI's credit
metrics to improve, supported by mid double-digit earnings growth,
and financial leverage approaching 5.5 times, over the next 12-18
months. The rating also reflects PCI's risk of revenue losses due
to selective in-sourcing by customers and incorporates event and
financial policy risk due to the company's acquisitive nature and
associated integration risks. PCI's credit profile benefits from
its leading position among contract packaging services companies,
and a relatively well diversified customer base consisting largely
of blue-chip pharmaceutical clients. Moody's expects the company's
growth will continue to be supported by favorable industry
tailwinds, as the pharmaceutical industry will continue to increase
its reliance on outsourced service providers.
The company's good liquidity includes approximately $200 million,
including a cash balance of approximately $69 million as of June
30, 2023 and an undrawn $150 million backed senior secured first
lien revolving credit facility due in 2025. Moody's forecasts
positive annual free cash flow in 2025 despite elevated capital
expenditure spend to support infrastructure growth. PCI has
multiple interest rate swaps that shield its backed senior secured
first lien term loan from rising interest rates and that expire in
early 2025. The company also has approximately $14 million of
annual term loan amortization.
The borrower of the first and second lien credit facilities is
Packaging Coordinators Midco, Inc. The first lien senior secured
credit facility includes a $150 million backed senior secured first
lien revolver expiring in November 2025 and a $1,490 million backed
senior secured first lien term loan due November 2027. The backed
senior secured first lien facilities are rated B2, one notch above
the B3 Corporate Family Rating, reflecting the priority lien on
pledged assets and the benefit of a layer of loss absorption
provided by the $380 million second lien term loan due 2029
(unrated).
The credit facilities benefit from both upstream and downstream
guarantees and are secured by all the assets of the borrower as
well as the assets of the parent firm's US operating subsidiaries.
PCI's CIS 4 indicates the rating is lower than it would have been
if ESG risk exposures did not exist. The CIS 4 reflects social risk
(S-4) associated with government regulations surrounding the
operation of the company's specialized facilities and equipment,
and exposure to governance risks (G-4), most notably with
aggressive financial policies under private equity ownership.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Ratings could be downgraded if the company were to experience
operating disruptions or loss of a major contract or if financial
policies became more aggressive. A downgrade could also occur if
the company's liquidity profile were to erode, such that free cash
flow were to turn negative on a sustained basis, or interest
coverage falls below one times.
Ratings could be upgraded if the company can profitably grow in
scale and maintain good product and customer diversity.
Additionally, the company will need to maintain good liquidity,
reflected in consistently positive free cash flow, and debt/EBITDA
will need to be sustained below 6 times, for ratings to be
upgraded.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
Packaging Coordinators Midco, Inc. ("PCI Pharma") is a global
provider of outsourced pharmaceutical services that include
commercial and clinical packaging, clinical storage and
distribution services, Sterile Fill Finishe and Lyophilization
services, high potency drug manufacturing, and selected drug
development and analytical services. Packaging Coordinators Midco,
Inc. generated revenues of approximately $1.1 billion for the LTM
period ending June 30, 2023. Packaging Coordinators Midco, Inc.'s
parent firm and issuer of the audited financial statements, Pioneer
UK Midco 1 Limited (guarantor of the rated debt) is majority owned
by private equity firm Kohlberg & Company, along with minority
stakes by equity sponsor Partners Group, and Mubadala, and the
management team.
PALACE CAFE: Hires Latter & Blum as Real Estate Broker
------------------------------------------------------
Palace Cafe, Inc., seeks approval from the U.S. Bankruptcy Court
for the Western District of Louisiana to employ Latter & Blum as
real estate broker.
The firm will provide these services:
a. prepare all marketing materials, advertising and publicity
necessary to advertise and promote the sale of the Debtor's real
property located at 135 West Landry Street;
b. generate leads, to list the property for sale in the
applicable Multiple Listing Services, and to otherwise advertise
the property for sale;
c. utilize its experience and expertise to sell the property
in a professional manner in a effort to obtain the highest possible
price for the property; and
d. appear in the Bankruptcy Court and testify about the sale
or any related matter upon request.
The firm will be paid a commission of 6 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:
Dewitt David
Latter & Blum, Inc.
1700 City Farm Drive
Baton Rouge, LA 70806
Telephone: (225) 297-7874
About Palace Cafe
Palace Cafe, Inc. owned and operated a popular restaurant in
Opelousas, La., under the Doucas family.
Palace Cafe sought protection for relief under Chapter 11 of the
Bankruptcy Code (Bankr. W.D. La. Case No. 22-50478) on July 25,
2022, with $100,001 to $500,000 in both assets and liabilities.
Judge John W. Kolwe oversees the case.
D. Patrick Keating, Esq., at the Keating Firm, APLC represents the
Debtor as counsel.
PAO BAY INVESTMENT: Hires Harbor Realty as Real Estate Broker
-------------------------------------------------------------
PAO Bay Investment Corp. seeks approval from the U.S. Bankruptcy
Court for the Southern District of Florida to employ Harbor Realty
Investment Corp. as real estate broker.
The firm will market and sell the Debtor's real property located at
7600 Bayside Lane, Miami Beach, FL.
The firm will be paid a commission of 6 percent of the sales
price.
John Olsen, a sales associate at Harbor Realty Investment Corp.,
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 Olsen
Harbor Realty Investment Corp.
1900 Sunset Harbor Dr., The Annex 2nd Floor
Miami Beach, FL 33139
Tel: (305) 785-0127
About PAO Bay Investment Corp.
Pao Bay Investment Corp is engaged in activities related to real
estate. The company is based in Miami Beach, Fla.
Pao Bay Investment Corp filed Chapter 11 petition (Bankr. S.D. Fla.
Case No. 23-15800) on July 25, 2023, with $1 million to $10 million
in both assets and liabilities. Paola Oramas, president, signed the
petition.
Judge Robert A. Mark oversees the case.
Scott Alan Orth, Esq. at the Law Offices of Scott Alan Orth, PA
represents the Debtor as bankruptcy counsel.
PGX HOLDINGS: Seeks to Extend Plan Exclusivity to January 2, 2024
-----------------------------------------------------------------
PGX Holdings, Inc. and its affiliates asked the U.S. Bankruptcy
Court for the District of Delaware to extend their exclusive
periods to file a chapter 11 plan and solicit acceptances thereof
to January 2, 2024 and February 29, 2024, respectively.
Absent the requsted extension, the filing exclusivity period will
expires on October 2, 2023, and the solicitation exclusivity
period will expire on December 1, 2023.
The Debtors asserted that their chapter 11 cases are large and
complex, involving 13 Debtor-affiliate entities, which had, at
the outset of these cases, approximately 370 employees. The
Debtors stated that they continue to operate on their credit
repair business with approximately 130,000 individual clients.
The Debtors also added that they had approximately $423.5 million
in funded-debt obligations as of the petition date and were
forced to shut down a significant portion of their business
operations because of an adverse ruling on Count 1 of the CFPB
Action. Following hard-fought negotiations, the Debtors
concensually resolved all outstanding issues and the District
Court in Utah entered the CFPB Settlement Order on August 30,
2023.
Moreover, the Debtors stated that they have a wide variety of
parties in interest, from various vendors and contractual and
litigation counterparties to local, state, and federal agencies
—
many of whom have been active in these chapter 11 cases. The
Debtors also claim to have a myriad of reporting obligations with
respect to local, state, and federal taxing and regulatory
agencies that they have continued to comply with, to the extent
required by the Bankruptcy Code.
The Debtors, however, claim that they have made significant
progress in negotiating with their stakeholders and administering
their chapter 11 cases. The Debtors stated that in the weeks
ahead, they will continue to engage with their stakeholders to
consummate the sale transaction and plan.
PGX Holdings, Inc. and its affiliates are represented by:
Domenic E. Pacitti
Michael W. Yurkewicz
KLEHR HARRISON HARVEY BRANZBURG LLP
919 North Market Street, Suite 1000
Wilmington, DE 19801
Tel: (302) 426-1189
Email: dpacitti@klehr.com
myurkewicz@klehr.com
- and -
Morton R. Branzburg, Esq.
KLEHR HARRISON HARVEY BRANZBURG LLP
1835 Market Street, Suite 1400
Philadelphia, PA 19103
Tel: (215) 569-3007
Email: mbranzburg@klehr.com
- and -
Joshua A. Sussberg, Esq.
KIRKLAND & ELLIS LLP
KIRKLAND & ELLIS INTERNATIONAL LLP
601 Lexington Ave
New York, NY 10022
Tel: (212) 446-4800
Email: joshua.sussberg@kirkland.com
- and -
Spencer Winters, Esq.
Whitney C. Fogelberg, Esq.
Alison J. Wirtz, Esq.
KIRKLAND & ELLIS LLP
KIRKLAND & ELLIS INTERNATIONAL LLP
300 North LaSalle
Chicago, IL 60654
Tel: (312) 862-2000
Email: spencer.winters@kirkland.com
whitney.fogelberg@kirkland.com
alison.wirtz@kirkland.com
About PGX Holdings
PGX Holdings, Inc. and affiliates are credit repair service
providers, helping customers repair their credit and achieve
their credit goals. PGX Holdings help consumers access and
understand the information contained in their credit reports,
ensure that the information contained in those reports is fair,
accurate, and complete, and address other factors that may
negatively impact their credit scores.
The Debtors sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Del. Lead Case No. 23-10718) on June
4, 2023. In the petition signed by Chad Wallace, chief executive
officer and president, the Debtor disclosed up to $500 million in
assets and up to $10 billion in liabilities.
Judge Craig T. Goldblatt oversees the case.
Kirkland and Ellis LLP, Kirkland and Ellis International LLP, and
300 North LaSalle represents the Debtor as bankruptcy counsel.
The Debtors also tapped Klehr Harrison Harvey Branzburg LLP as
local bankruptcy counsel, Alvarez & Marsal North America, LLC as
financial advisor, Greenhill and Co., LLC as investment banker,
Kurtzman Carson Consultants LLC as notice and claims agent, and
Landis Rath and Cobb as conflicts counsel.
King & Spalding, LLP, and Morris, Nichols, Arsht & Tunnell LLP,
serve as counsel to Blue Torch Finance LLC, as DIP Agent and
Prepetition First Lien Agent, and the Prepetition First Lien
Lenders. Clyde & Co US LLP, serves as special counsel to the DIP
Agent, the Prepetition First Lien Agent, and the Prepetition
First Lien Lenders.
Proskauer Rose LLP, is counsel to Prospect Capital Corporation,
in its capacity as DIP Lender and lender under the Prepetition
First Lien Credit Agreement. Morris, Nichols, Arsht & Tunnell
LLP, is local counsel to Prospect Capital.
PILL CLUB: Court Extends Solicitation to Nov. 30
------------------------------------------------
Judge Edward L. Morris of the U.S. Bankruptcy Court for the
Northern District of Texas extended the exclusive period within
which Pill Club Pharmacy Holdings, LLC and its affiliates may
file a chapter 11 plan to October 1, 2023. The judge also
extended the Debtors exclusive period to solicit votes for a
chapter 11 plan to November 30, 2023.
Pill Club Pharmacy Holdings, LLC and its affiliates are
represented by:
Katherine A. Preston, Esq.
WINSTON & STRAWN LLP
800 Capitol St., Suite 2400
Houston, TX 77002
Tel: (713) 651-2600
Email: kpreston@winston.com
- and -
Timothy W. Walsh, Esq.
WINSTON & STRAWN LLP
200 Park Avenue
New York, NY 10166
Tel: (212) 294-6700
Email: twwalsh@winston.com
About The Pill Club Pharmacy Holdings
The Pill Club Pharmacy Holdings, LLC is a digital healthcare
platform. The company says it is "on a mission to empower women
and people who menstruate to lead their healthiest lives." It
combines telemedicine and direct-to-consumer pharmacy.
Pill Club Pharmacy Holdings and its affiliates sought protection
under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Texas
Lead Case No. 23-41090) on April 18, 2023. In the petition signed
by Elizabeth Meyerdirk, chief executive officer, the Debtors
disclosed up to $50,000 in assets and up to $50 million in
liabilities.
Judge Edward L. Morris oversees the cases.
The Debtors tapped Katherine A. Preston, Esq., at Winston and
Strawn, LLP as general bankruptcy counsel; Accordion Partners,
LLC as financial advisor; and BMC Group, Inc. as claims,
noticing, solicitation and administrative agent.
The U.S. Trustee for Region 6 appointed an official committee to
represent unsecured creditors in the Debtors' Chapter 11 cases.
The committee is represented by Akerman, LLP and Buchalter, A
Professional Corporation.
POLLO FELIZ: Hires Edith Aimee Chavez as Bookkeeper
---------------------------------------------------
Pollo Feliz, Inc. seeks approval from the U.S. Bankruptcy Court for
the Western District of Texas to employ Edith Aimee Chavez of El
Paso, Texas as bookkeeper.
Ms. Chavez will perform these services:
a. provide aid to the Debtor, as Debtor-in-Possession, that will
facilitate the preparation, maintenance and adjustment of a monthly
budget as needed by the circumstances;
b. prepare the Debtor's Monthly Operating Report, as required by
the bankruptcy code; and
c. perform any and all other financial services for the Debtor,
as Debtor-in-possession, that may become necessary in the
bankruptcy proceedings.
Ms. Chavez will be paid a monthly compensation of $300.
As disclosed in a court filing that the Ms. Chavez is a
"disinterested person" as the term is defined in Section 101(14) of
the Bankruptcy Code.
The firm can be reached at:
Edith Aimee Chavez
6006 N. Mesa Ste. 401
El Paso, TX 79912
Tel: (915) 544-0848
Email: dredithaimeechavez@gmail.com
About Pollo Feliz, Inc.
Pollo Feliz, Inc. sought protection (Bankr. W.D. Tex. Case No.
23-31051) on October 10, 2023, listing $50,000 to $100,000 in
assets and $1 million to $10 million in liabilities. Katana Chavez
as vice president, signed the petition.
MIRANDA & MALDONADO, PC serve as the Debtor's legal counsel.
POMONA VALLEY: No Patient Complaints, 3rd PCO Report Says
---------------------------------------------------------
Tamar Terzian, the court-appointed patient care ombudsman, filed
with the U.S. Bankruptcy Court for the Central District of
California her third report regarding the home health care facility
operated by Pomona Valley Home Care, Inc.
The PCO received no complaints from the patients visited and from
their families regarding the level of care provided by Pomona's
Licensed Vocational Nurse. The PCO's observation of the Licensed
Vocational Nurse in charge was positive as they are fully trained
by Pomona to assure the patients are safe and have proper
medication or medical equipment based on each patient's needs.
Through the efforts of the Licensed Vocational Nurse, patients
remain in good condition with the daily therapy received, the PCO
noted in her report, which covers the period August 21 to October
21.
The PCO also noted that Pomona provides great continued care as
more and more patients are now being discharged to home care from
hospitals and that it is well within the standard of care.
A copy of the ombudsman report is available for free at
https://urlcurt.com/u?l=LFJz82 from PacerMonitor.com.
The ombudsman may be reached at:
Tamar Terzian
Terzian Law Group, PC
1122 East Green St.
Pasadena, CA 91106
Phone (818) 242-1100
Email: tamar@terzlaw.com
About Pomona Valley
Pomona Valley Home Care, Inc. filed a petition under Chapter 11,
Subchapter V of the Bankruptcy Code (Bankr. C.D. Calif. Case No.
23-12116) on April 7, 2023, with $100,001 to $500,000 in both
assets and liabilities. Susan K. Seflin has been appointed as
Subchapter V trustee.
Judge Sheri Bluebond oversees the case.
The Debtor is represented by Thomas B. Ure, Esq., at Ure Law Firm.
Tamar Terzian is the patient care ombudsman appointed in the
Debtor's Chapter 11 case.
PPWC ENTERPRISES: Court OKs Cash Collateral Access Thru Dec 8
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Ohio,
Eastern Division, authorized PPWC Enterprises, Inc. to use cash
collateral on an interim basis, in accordance with the budget,
through December 8, 2023.
The Debtor has stated that it desires to pursue a financial
restructuring in cooperation with BHG and that the Debtor believes
that the best method to effectuate such a financial restructuring
is by means of a chapter 11 case.
BHG made a loan or loans to the Debtor, at which time, the Debtor
granted BHG a security interest in all its business assets.
As adequate protection, BHG is granted valid, binding, enforceable
and perfected postpetition replacement lien in the same order of
priority and in the same kinds of property as BHG’s prepetition
security interest.
A final hearing on the matter is set for December 5, 2023 at 10
a.m.
A copy of the order is available at https://urlcurt.com/u?l=MA4Ztr
from PacerMonitor.com.
About PPWC Enterprises, Inc.
PPWC Enterprises, Inc. sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. N.D. Ohio Case No. 23-51524-amk) on
November 1, 2023. In the petition signed by LaCora M.
Turner-Murphy, president, the Debtor disclosed up to $50,000 in
assets and up to $500,000 in liabilities.
Judge Alan M. Koschik oversees the case.
Steven J. Heimberger, Esq., at Roderick Linton Belfance LLP,
represents the Debtor as legal counsel.
PROASSURANCE CORP: Moody's Cuts Rating on Unsecured Notes to Ba1
----------------------------------------------------------------
Moody's Investors Service has downgraded the senior debt rating of
ProAssurance Corporation to Ba1 from Baa3 and the insurance
financial strength (IFS) ratings of its principal property and
casualty (P&C) insurance subsidiaries to Baa1 from A3. The rating
action reflects weak underwriting results and high operating
leverage. The outlook has changed to stable from negative.
RATINGS RATIONALE
According to Moody's, the downgrade of ProAssurance's ratings
reflect the company's weak net income, which has been driven by
challenging underwriting results in recent years. Although the
company has been re-underwriting its healthcare professional
liability (HCPL) business and implementing rate increases over
several years, Moody's expects underwriting profitability to face
headwinds over the medium term given pricing competition and
potential reserve volatility from social inflation. The company's
workers' compensation results have also deteriorated, reflecting
pricing competition and rising loss cost trends. ProAssurance's
operating leverage has increased in recent years, reflecting weak
earnings and accretive premiums and reserves from the 2021
acquisition of NORCAL Group.
For the first six months of 2023, ProAssurance reported net income
of $4.4 million, up from a net loss of $5.2 million in the prior
year period, driven primarily by higher investment income and net
realized gains. The combined ratio increased to 111.0% for the
first six months of 2023, up from 104.6% in the prior year period
reflecting lower favorable reserve development and higher severity
trends for the company's Specialty P&C segment, partially offset by
pricing increases. The higher combined ratio also reflected adverse
reserve development and higher expenses within the company's
Workers' Compensation segment, which generated a combined ratio of
107.6% for the first half of 2023.
ProAssurance's ratings reflect the group's solid competitive market
position as a specialist underwriter of US healthcare (medical)
professional liability insurance and workers' compensation, strong
claim handling capabilities and good asset quality. These strengths
are offset by the group's high product risk given that most of the
company's business is focused on HCPL, which has over time
exhibited significant volatility in underwriting results and
liability claim trends. Other challenges include weak
profitability, uncertainty around HCPL reserves, and relatively
high operating leverage given the firm's product mix.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The following factors could lead to a ratings upgrade: (i) improved
pretax operating results with combined ratios consistently below
102%; (ii) a return to consistently favorable reserve development;
(iii) gross underwriting leverage below 3x; (iv) adjusted financial
leverage below 25% with interest coverage above 4x.
The following factors could lead to a ratings downgrade: (i)
significant net losses or adverse reserve development; (ii)
reduction in shareholders' equity by more than 10% over a rolling
12-month period (excluding unrealized investment losses); (iii)
gross underwriting leverage consistently above 5x; or (iv) adjusted
financial leverage above 35% with interest coverage below 2x.
LIST OF AFFECTED RATINGS
Issuer: ProAssurance Corporation
Downgrades:
Senior unsecured notes, downgraded to Ba1 from Baa3
Senior unsecured shelf, downgraded to (P)Ba1 from (P)Baa3
Preferred shelf, downgraded to (P)Ba3 from (P)Ba2
Outlook Action:
Outlook changed to Stable from Negative
Issuer: Allied Eastern Indemnity Company
Downgrade:
Insurance financial strength, downgraded to Baa1 from A3
Outlook Action:
Outlook changed to Stable from Negative
Issuer: Eastern Alliance Insurance Company
Downgrade:
Insurance financial strength, downgraded to Baa1 from A3
Outlook Action:
Outlook changed to Stable from Negative
Issuer: ProAssurance Insurance Company of America
Downgrade:
Insurance financial strength, downgraded to Baa1 from A3
Outlook Action:
Outlook changed to Stable from Negative
Issuer: NORCAL Insurance Company
Downgrade:
Insurance financial strength, downgraded to Baa1 from A3
Outlook Action:
Outlook changed to Stable from Negative
Issuer: ProAssurance Casualty Company
Downgrade:
Insurance financial strength, downgraded to Baa1 from A3
Outlook Action:
Outlook changed to Stable from Negative
Issuer: ProAssurance Indemnity Company, Inc.
Downgrade:
Insurance financial strength, downgraded to Baa1 from A3
Outlook Action:
Outlook changed to Stable from Negative
ProAssurance Corporation is headquartered in Birmingham, Alabama,
and through its subsidiaries provides professional liability
insurance products primarily to physicians, other healthcare
providers, and healthcare facilities in the United States. It also
writes medical technology and life sciences product liability,
legal professional liability, as well as workers' compensation. The
company markets its products through both specialized independent
agents and direct marketing. For the first six months of 2023,
ProAssurance reported net earned premiums of $488 million and net
income of $4.4 million. As of June 30, 2023, shareholders' equity
was $1.1 billion.
The principal methodology used in these ratings was Property and
Casualty Insurers Methodology published in January 2023.
PURE BIOSCIENCE: Raises Going Concern Doubt
-------------------------------------------
PURE Bioscience, Inc. disclosed in a Form 10-Q Report filed with
the U.S. Securities and Exchange Commission for the fiscal year
ended July 31, 2023, that there is substantial doubt about the
Company's ability to continue as a going concern due to its
recurring operating losses, and negative cash flows from operating
activities.
As a result of the Company's historical lack of financial
liquidity, it does not currently have sufficient working capital to
fund its planned operations and may not be able to continue as a
going concern.
"We have a history of recurring losses, and as of July 31, 2023, we
have incurred a cumulative net loss of $133 million. During the
fiscal year ended July 31, we recorded a net loss of $4 million on
recorded net revenue of $1.9 million. In addition, during the year
ended July 31, we used $3.3 million in operating and investing
activities resulting in a cash balance of $1.1 million as of July
31. As a result, our existing cash resources are not sufficient to
meet our anticipated needs over the next twelve months from the
date hereof, and we will need to raise additional capital to
continue our operations and to implement our business plan, which
capital may not be available on acceptable terms or at all."
PURE Bioscience's capital requirements will depend on many factors,
including, among others:
* the market acceptance of, and demand for, its products;
* the timing and costs of executing its sales and marketing
strategies;
* its ability to successfully complete the in-plant validation
trials requested by potential customers and its ability to convert
these trials into customer orders for our products;
* the costs and time required to obtain the necessary regulatory
approvals for its products, including the required USDA approvals:
* the extent to which the Company invests in new testing and
product development, including in-plant optimization trials;
* the extent to which its customers continue to place product
orders as expected and expand their existing use of its products;
* the cost and time to satisfy unique customer requirements
regarding validation trials or to support the value proposition and
benefits of its products;
* the timing of vendor payments and the collection of receivables,
among other factors affecting the Company's working capital;
* its ability to control the timing and amount of its operating
expenses, including the costs to attract and retain personnel with
the skills required to implement its business plan; and
* the costs to file, prosecute and defend its intellectual property
rights.
These factors, along with the Company's history and near term
forecast of incurring net losses and negative operating cash flows,
raise substantial doubt about its ability to continue as a going
concern.
"If we do not obtain additional capital from external sources, we
will not have sufficient working capital to fund our planned
operations or be able to continue as a going concern. We cannot
assure you that additional financing will be available when needed
or that, if available, we can obtain financing on terms favorable
to us or to our stockholders. If we continue to raise additional
funds from the issuance of equity securities, substantial dilution
to our existing stockholders would likely continue to result. If we
raise additional funds by incurring debt financing, the terms of
the debt may involve significant cash payment obligations as well
as covenants and specific financial ratios that may restrict our
ability to operate our business. Further, any contracts or license
arrangements we enter into to raise funds may require us to
relinquish our rights to our products or technology, and we cannot
assure you that we will be able to enter into any such contracts or
license arrangements on acceptable terms, or at all. Having
insufficient funds may require us to delay or scale back our
marketing, distribution and other commercialization activities or
cease our operations altogether," the Company stated.
PURE Bioscience reported a net loss of $3,961,000 for the year
ended July 31, 2023, and $3,491,000 for the same period in 2022.
About PURE Bioscience Inc.
PURE Bioscience, Inc. -- www.purebio.com -- is focused on
developing and commercializing its proprietary antimicrobial
products primarily in the food safety arena. The Company provides
solutions to combat the health and environmental challenges of
pathogen and hygienic control. Its technology platform is based on
patented, stabilized ionic silver, and its initial products contain
silver dihydrogen citrate, better known as SDC. PURE is
headquartered in Rancho Cucamonga, California (San Bernardino
metropolitan area).
As of July 31, 2023, the Company has $1,825,000 in total assets and
$1,553,000 in total liabilities.
Los Angeles, California-based Weinberg and Company, P.A., the
Company's auditor since 2019, issued a "going concern"
qualification in its report dated Oct. 28, 2022, citing that the
Company has suffered recurring losses from operations and negative
cash flows from operating activities that raise substantial doubt
about its ability to continue as a going concern.
PURE BIOSCIENCE: Reports Fiscal 2023 Financial Results
------------------------------------------------------
PURE Bioscience, Inc. issued a press release announcing financial
results for the fiscal year ended July 30, 2023.
The Summary of Results for PURE Bioscience's Year-End Operations
shows that:
* Net product sales were $1,871,000 and $1,813,000 for the
fiscal year ended July 31, 2023, and 2022, respectively. The
increase of $58,000 was attributable to increased sales across our
end-user network servicing the food processing industry.
* Net loss for the fiscal year ended July 31, 2023 was $4
million, compared to $3.5 million for the fiscal year ended July
31, 2022.
* Net loss, excluding share-based compensation, for the fiscal
year ended July 31, 2023 was $3.6 million, compared to $2.9 million
for the fiscal year ended July 31, 2022.
* Net loss per share was $0.04 for the fiscal year ended July
31, 2023 and 2022.
* Net cash used in operations for the fiscal year ended July
31, 2023 was $3.3 million, compared to $2.5 million for the fiscal
year ended July 31, 2022.
The Company also provided information about its Business Updates
and All-remote Work Environment.
A full-text copy of PURE Bioscience's report is available at
https://tinyurl.com/yc4kmzeu
About PURE Bioscience Inc.
PURE Bioscience, Inc. -- www.purebio.com -- is focused on
developing and commercializing its proprietary antimicrobial
products primarily in the food safety arena. The Company provides
solutions to combat the health and environmental challenges of
pathogen and hygienic control. Its technology platform is based on
patented, stabilized ionic silver, and its initial products contain
silver dihydrogen citrate, better known as SDC. PURE is
headquartered in Rancho Cucamonga, California (San Bernardino
metropolitan area).
As of July 31, 2023, the Company has $1,825,000 in total assets and
$1,553,000 in total liabilities.
Los Angeles, California-based Weinberg and Company, P.A., the
Company's auditor since 2019, issued a "going concern"
qualification in its report dated Oct. 28, 2022, citing that the
Company has suffered recurring losses from operations and negative
cash flows from operating activities that raise substantial doubt
about its ability to continue as a going concern.
QUEBEC PARMENTIER: Canadian Court Issues CCAA Stay Order
--------------------------------------------------------
The Quebec Superior Court for the district of Quebec ("Court")
sitting as a court designated pursuant to the Companies' Creditors
Arrangement Act ("CCAA") issued an initial order ("Initial Order")
appointing MNP Ltd. as monitor ("Monitor") of Quebec Parmentier
Inc.; 9465-0850 Quebec Inc.; 9490-0388 Quebec Inc.; 9440-5818
Quebec Inc.; 9440-5776 Quebec Inc.; 9450-8405 Quebec Inc.; Propur
Inc.; Marketing SEQ Inc.; Gessam Inc.; Legupro Inc. ("Debtors"),
and providing the Companies with various protections as they
prepare a plan of reorganization in virtue of the CCAA.
Pursuant to Section 23 of the CCAA, a copy of the Initial Order,
the list of creditors and other material filed or related to the
CCAA proceedings are or will be available on the Monitor’s
website at the following address:
https://mnpdebt.ca/en/corporate/corporate-engagements/quebec-parmentier-inc.
During the CCAA proceedings, the Companies, with the assistance of
the Monitor, will continue to operate in the ordinary course of
business as they determine the steps to restructure their
operations, under the supervision of the Monitor and the Court.
Pursuant to the Initial Order, all proceedings against the
Companies, their directors and officers are stayed, and no such
proceedings may be commenced or continued without leave of the
Court ("Stay of Proceedings"). The Stay of Proceedings prohibits
any contractual parties from ceasing to perform their contract with
the Companies. In addition, except as provided for in the Initial
Order, all amounts owing by the Companies to their creditors for
the periods prior to the filing date are stayed and cannot be paid
at this time.
To date, no claims procedure has been approved by the Court,
therefore, creditors are not required to file a proof of claim at
this time.
The CCAA provides that various reports must be prepared by the
Monitor and filed with the Court. These reports include, among
other things, observations regarding the financial and other state
of affairs of the Debtors. The Monitor will publish these reports
on its website (unless the Court orders otherwise), when such
reports are filed with the Court. Creditors are advised to consult
the Monitor's website periodically to be kept abreast of
developments in this matter.
The monitor can be reached at:
MNP LTEE
Attn: M. Pierre Marchand
M. Guillaume Camirand
1155, boul. Rene-Lévesque Ouest,
23e etage
Montreal, Quebec H3B 2K2
Tel: 514-906-4645
Email: pierre.marchand@mnp.ca
guillaume.camirand@mnp.ca
Counsel for the Companies:
CAIN LAMARRE S.E.N.C.R.L.
Attn: Me Jean-Jacques Rancourt
Me Maxime Néron
190, rue Racine Est, bureau 300
Chicoutimi, Quebec G7H 1R9
Email: jean-jacques.rancourt@cainlamarre.ca
maxime.neron@cainlamarre.ca
Counsel for the Monitor:
LAVERY, DE BILLY S.E.N.C.R.L.
Attn: Me Jonathan Warin
Me Daphne Pomerleau-Normandin
1, place Ville-Marie, bureau 4000
Montreal, Quebec H3B 4M4
Email: jwarin@lavery.ca
dpomerleaunormandin@lavery.ca
Quebec Parmentier -- https://propur.com/ -- is a Quebec-based
potato distributor.
QURATE RETAIL: Posts $12 Million Net Earnings in Third Quarter
--------------------------------------------------------------
Qurate Retail, Inc. filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing net
earnings of $12 million on $2.48 billion of net total revenue for
the three months ended Sept. 30, 2023, compared to a net loss of
$2.74 billion on $2.74 billion of net total revenue for the three
months ended Sept. 30, 2022.
For the nine months ended Sept. 30, 2023, the Company reported net
earnings of $164 million on $7.77 billion of net total revenue
compared to a net loss of $2.50 billion on $8.58 billion of net
total revenue for the nine months ended Sept. 30, 2022.
As of Sept. 30, 2023, the Company had $11.44 billion in total
assets, $10.74 billion in total liabilities, and $693 million in
total equity.
Management Comments
"We are delivering on our Project Athens transformation as planned
and have made tangible progress toward building a materially
stronger profit and cash flow profile," said David Rawlinson,
president and CEO of Qurate Retail. "We produced strong Adjusted
OIBDA growth of over 50% as reported with increases at each of our
businesses, sustained gross margin gains in our core video commerce
businesses and grew free cash flow, all while moderating the
decline in revenue compared to the first half of the year.
"While we have meaningful work still ahead of us, our third quarter
results strengthen our confidence in our ability to navigate the
current challenged environment and to meet our Project Athens
objectives. We reiterate our expectations for a double-digit CAGR
on Adjusted OIBDA and free cash flow with stable revenues through
2024 compared to 2022."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/0001355096/000155837023017543/qrtea-20230930x10q.htm
About Qurate Retail
Headquartered in Englewood, Colorado, Qurate Retail, Inc. owns
controlling and non-controlling interests in a broad range of video
and online commerce companies. The Company's largest businesses
and reportable segments are QxH (QVC U.S. and HSN) and QVC
International. QVC, Inc., which includes QxH and QVC
International, markets and sells a wide variety of consumer
products in the United States and several foreign countries via
highly engaging video-rich, interactive shopping experiences.
Cornerstone Brands, Inc. consists of a portfolio of aspirational
home and apparel brands, and is a reportable segment. The
Company's "Corporate and other" category includes its consolidated
subsidiary Zulily, LLC, along with various cost and equity method
investments.
Qurate reported a net loss of $2.53 billion for the year ended Dec.
31, 2022.
Qurate Retail received on Sept. 14, 2023, written notice from The
Nasdaq Stock Market notifying the Company that, because the closing
bid price for the Company's Series A common stock, par value $0.01
per share ("QRTEA"), has fallen below $1.00 per share for 30
consecutive business days, the Company no longer complies with the
minimum bid price requirement for continued listing of QRTEA on the
Nasdaq Global Select Market.
* * *
As reported by the TCR on March 21, 2023, S&P Global Ratings
lowered its issuer credit rating on U.S.-based video commerce and
online retailer Qurate Retail Inc. to 'CCC+' from 'B-'. S&P said,
"We view the company's capital structure as potentially
unsustainable in a rising interest rate environment. We expect
Qurate's adjusted leverage to remain high, above the 6x area in
2023."
R&J CLEANING: Hires Spiro & Browne PLC as Counsel
-------------------------------------------------
R&J Cleaning Services, Inc. seeks approval from the U.S. Bankruptcy
Court for the Eastern District of Virginia to employ Spiro &
Browne, PLC as counsel.
Spiro & Browne will render general legal services to the Debtor.
The firm will be paid at these rates:
David K. Spiro, Partner $400
David G. Browne, Partner $400
Paralegal $150
The Debtor paid the firm an initial retainer of $25,000.
The firm will also be reimbursed for reasonable out-of-pocket
expenses incurred.
David K. Spiro, Esq., a partner at Spiro & Browne, 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 through:
David K. Spiro, Esq.
Spiro & Browne, PLLC
2400 Old Brick Road
Glen Allen, VA 23060
Tel: (804) 387-0186
Fax: (804) 836-1855
Email: dspiro@sblawva.com
About R&J Cleaning Services, Inc.
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.
RALPH LAUREN: Egan-Jones Retains BB+ Senior Unsecured Ratings
-------------------------------------------------------------
Egan-Jones Ratings Company on October 24, 2023, maintained its
'BB+' foreign currency and local currency senior unsecured ratings
on debt issued by Ralph Lauren Corporation. EJR also withdraws the
rating on commercial paper issued by the Company.
Headquartered in New York City, Ralph Lauren Corporation designs
clothing and accessories.
RAM TELECOM: Nov. 30, 2023 Claims Filing Deadline Set
-----------------------------------------------------
The Court of Chancery of the State of Delaware set Nov. 30, 2023,
at 5:00 p.m. (ET) as the last date and time to file any claims
against RAM Telecom International Inc. in order for a potential
creditor of the Company to share in any distribution of assets of
the receivership estate.
On Oct. 11, 2023, the Delaware Court of Chancery appointed Michael
Wyse as receiver of the Company's assets. The receiver is
authorized to sell or otherwise dispose of the assets of the
receivership estate to pay debts and generate proceeds for the
benefits of the creditors.
If you wish to file a claim against the Company, proof of claim
must be filed with all documentation supporting the claims, which
must be received at at the address listed on the claim form by the
bar date. To request a claim form, contact Andrew Matott by email
at matott@sewkis.com.
RAM Telecom International is an independent undersea cable owner
and provides large-scale network solutions across a wide variety of
industries, including cloud companies, network operators, regional
carriers, global enterprises, content providers, and institutions
for higher learning.
REVOLUTION ACADEMY: S&P Rates Education Rev. Refunding Bonds 'BB'
-----------------------------------------------------------------
S&P Global Ratings assigned its 'BB' long-term rating to the Public
Finance Authority, Wisc.'s series 2023A and 2023B education revenue
refunding bonds, to be issued for Revolution Academy (RA), N.C. The
outlook is stable.
The roughly $22.6 million in proceeds from the series 2023 bonds
will be used to refinance long-term debt obligations, including the
series 2020 privately placed bonds and a $1.56 million promissory
note outstanding. Proceeds will also fully fund a debt service
reserve fund and pay for costs of issuance.
"The rating reflects our view of RA's exceptional enrollment
growth, growing liquidity, and conservative growth planning," said
S&P Global Ratings credit analyst John Miceli.
S&P said, "The stable outlook reflects our opinion that RA will
maintain solid liquidity and generate lease-adjusted maximum annual
debt service (MADS) coverage above covenanted debt service coverage
(1.1x) despite the anticipated increase in pro forma lease-adjusted
MADS after issuance. We also expect the school to maintain stable
enrollment after experiencing rapid growth following its
founding."
RIALTO BIOENERGY: Exclusivity Period Extended to December 21
------------------------------------------------------------
Judge Christopher B. Latham of the U.S. Bankruptcy Court for the
Southern District of California extended Rialto Bioenergy
Facility, LLC's exclusive periods to file a plan and obtain
acceptance of the plan to December 21, 2023 and February 19,
2024, respectively.
Rialto Bioenergy Facility, LLC is represented by:
Ron Bender, Esq.
Monica Y. Kim, Esq.
Krikor J. Meshefejian, Esq.
LEVENE, NEALE, BENDER, YOO & GOLUBCHIK L.L.P.
2818 La Cienega Avenue
Los Angeles, CA 90034
Tel: (310) 229-1234
Email: RB@LNBYG.COM
MYK@LNBYG.COM;
KJM@LNBYG.COM
About Rialto Bioenergy Facility
Rialto Bioenergy Facility, LLC owns and operates a multi-
feedstock bioenergy facility in Rialto, Calif., which converts
organic waste, such as food waste, yard waste, and biosolids into
carbon-negative renewable natural gas, with capability to also
generate renewable electricity and soil amendment/fertilizer. The
facility, the largest in North America and valued at $196.6
million, utilizes anaerobic digestion technology to convert the
organic waste received from waste haulers into renewable natural
gas.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Calif. Case No. 23-01467) on May 25,
2023, with $100 million to $500 million in both assets and
liabilities. Yaniv Scherson, vice president, signed the petition.
Judge Christopher B. Latham oversees the case.
The Debtor tapped Ron Bender, Esq., at Levene, Neale, Bender, Yoo
and Golubchik, LLP as bankruptcy counsel; B. Riley Securities,
Inc. as financial advisor; and GlassRatner Advisory & Capital
Group, LLC as valuation consultant.
UMB Bank, N.A. as Indenture Trustee is represented by Nahal
Zarnighian, Esq., at Ballard Spahr, LLP.
The U.S. Trustee for Region 15 appointed an official committee to
represent unsecured creditors in the Debtor's Chapter 11 case.
The committee is represented by Brinkman Law Group, PC.
ROCKPOINT GAS: Fitch Affirms and Withdraws 'B-' LongTerm IDR
------------------------------------------------------------
Fitch Ratings has affirmed and withdrawn Rockpoint Gas Storage
Partners, LP's (ROCGAS) and Rockpoint Gas Storage Canada, Ltd.'s
(RGSCAN) (collectively referred as Rockpoint), Long-Term Issuer
Default Ratings (IDRs) of 'B-'. The Rating Outlook is Stable for
both entities.
Fitch has withdrawn Rockpoint's ratings for commercial reasons.
KEY RATING DRIVERS
Growing Contracted Revenues: Rockpoint's customers are increasingly
inclined to sign longer-term firm storage service (FSS) contracts,
particularly in California, due to supply constraints and robust
demand. In Alberta, customers continue securing short-term storage
service (STS) contracts, for a smaller portion of capacity compared
to California. Contracting dynamics in Alberta are consistent with
the broader trend of lower natural gas storage values across North
America witnessed in recent years. Fitch expects expansion of LNG
facilities across North America will spur demand for FSS and STS
contracts.
Over 80% of Rockpoint's FY24 revenue is expected to be driven by
fixed-fee FSS and STS contracts, with over 70% contracted capacity,
and weighted average remaining life of just under three years.
Fitch would view positively an increase in overall contracted
capacity and lengths to three years or more. The optimization
business offers opportunities to take advantage of near-term
pricing volatility and non-contracted capacity, however, it remains
a sizeable source of revenue and cash flow volatility.
Improved Debt Maturity Profile: On Aug. 17, 2023, Rockpoint issued
a new $450 million first-lien secured term loan due 2026. Proceeds
were used to repay the $200 million term loan of which $50 million
and $150 million were due in 2023 and 2024 respectively; most of
the remaining amount was distributed to Brookfield (the sponsor).
Rockpoint also extended the maturity of its first-lien secured
asset-based lending (ABL) facility to 2026. The team loan and ABL
facility both have built-in options for two one-year extensions.
These transactions have reduced Rockpoint's refinancing risks and
improved liquidity.
Minimal Impact of Asset Divestitures on Leverage: In April 2023,
the company sold its interests in Salt Plains and Tres Palacios,
for which it received cash considerations of approximately $37
million and $178 million respectively, and the proceeds were fully
distributed to the sponsor. Fitch expects the majority of proceeds
from any potential future asset sales will be distributed to the
sponsor. The increase in FSS and STS contracting is expected to
more than offset the lost EBITDA due to divestitures. Hence, Fitch
does not expect asset sales to have meaningful impact on leverage.
Fitch expects leverage to be approximately in the 4.5x range over
the forecast period.
Constructive Seasonal Spreads: The difference between natural gas
prices in summer versus winter months, i.e., time-spreads, is a key
driver of fees Rockpoint receives for its storage contracts.
Time-spreads are driven by regional market and nonmarket factors.
Rockpoint operates in two distinct regions of North America
including the AECO Hub in Alberta and PG&E Citygate in California.
During FY24 YTD, time-spreads at AECO and PG&E Citygate have
expanded relative to recent history. The spreads at AECO expanded
largely due to uncertainty around access to storage in summer, and
spreads at PG&E Citygate expanded primarily due to supply
constraints. Fitch expects spreads at both the locations to
moderate as the aforementioned temporary shocks ease.
Rating Linkages: A parent-subsidiary relationship exists between
ROCGAS (parent) and RGSCAN (subsidiary). Fitch determines ROCGAS'
standalone credit profile (SCP) based upon consolidated credit
metrics. Fitch considers RGSCAN to have a stronger SCP than ROCGAS.
As such, Fitch has followed the stronger subsidiary path.
Fitch views legal ring-fencing as open due to guarantees that flow
between the parent and the subsidiary. Fitch evaluates Access &
Control as open given ROCGAS' 100% ownership and control of RGSCAN,
as evidenced by the subsidiary's financial statements being
consolidated in the parent's group financial statements. This more
than offsets the mix of external and internal funding sources at
RGSCAN. Due to the aforementioned linkage considerations, Fitch
will rate both entities based on the consolidated credit profile
and assign the same IDRs.
DERIVATION SUMMARY
Rockpoint is somewhat unique in Fitch's rated midstream universe as
the only pure play natural gas storage business. The most direct
comparison available is TransMontaigne Partners LLC. (B/Stable).
Both companies derive a high percentage of revenue and EBITDA from
storing a commodity(s) for a negotiated fixed-fee over a period of
time. Rockpoint focuses on natural gas whereas TransMontaigne is a
terminaling company focusing on crude oil. Rockpoint operates in
the Canadian province of Alberta, and the U.S. state of California,
while TransMontaigne operates in 20 U.S. states.
Fitch views the business risk as lower at TransMontaigne, compared
to Rockpoint, due to a combination of longer relative contract
duration and TransMontaigne's essentially 100% fixed-fee business
mix, both of which provide better relative revenue assurance.
Rockpoint utilizes matched-booked proprietary storage positions to
increase returns/utilize unused storage capacity. TransMontaigne
also benefits from greater geographic diversification and larger
scale. Rockpoint generates roughly half the annual EBITDA compared
to TransMontaigne, in most years. Somewhat offsetting the perceived
higher relative business risk, Fitch has forecasted leverage at
Rockpoint to be approximately three turns lower than
TransMontaigne.
Fitch views the higher business risk, lower revenue assurance and
smaller relative size (as measured by annual EBITDA), partially
offset by lower leverage, as the main factors driving the one-notch
difference between the IDRs of TransMontaigne and Rockpoint.
KEY ASSUMPTIONS
- Fitch's base case of Natural Gas at Henry Hub of $2.8/mcf,
$3.25/mcf, $3/mcf, and $2.75/mcf in 2023, 2024, 2025 and beyond,
respectively;
- Base interest rate for the credit facility and the term loan
reflects Fitch's Global Economic Outlook, e.g., 5.75%, 4.5%, and
3.25% for 2023, 2024, and 2025, respectively;
- A historically typical summer injection season along with the
maintenance of stronger relative time-spreads, compared to recent
history, allowing natural gas storage levels at the AECO HUB to
enter winter 2023/2024 at sufficient levels and Rockpoint to
modestly increase its fixed-fee storage capacity utilization;
- New contract and optimization revenue both reflect on a near-term
basis time-spreads near current levels, supported by natural gas
storage inventories in Alberta and California;
- Performance under existing contracts with third-parties produces
the cash flows management forecasts;
- The absolute level of Alberta prices, which is a driver of
asset-based credit facility usage, reflects a continued large
discount to NYMEX Henry Hub prices in the medium-term. In turn, the
Henry Hub prices reflect the Fitch price deck;
- Excess cash flow after cash interest and capex (consistent with
historical levels), is distributed to the sponsor, while
maintaining a modest cash balance.
RATING SENSITIVITIES
Rating Sensitivities are not applicable, as the ratings have been
withdrawn.
LIQUIDITY AND DEBT STRUCTURE
Sufficient Liquidity: As of June 30, 2023, the company had total
liquidity of approximately $75 million, which does not include the
unsecured revolving credit facility with Brookfield (Brookfield
facility). Rockpoint's new $450 million First-Lien Secured Term
Loan agreement requires it to maintain all of the $100 million
capacity available under the Brookfield facility. Rockpoint had
roughly $20 million in cash on the balance sheet and approx. $55
million available under its secured asset-based revolving credit
facility (ABL facility) (net of $41 million in letters of credit
and borrowing base limit). The $250 million ABL facility is subject
to a borrowing base, which was $116 million as of June 30, 2023.
Rockpoint's ABL facility matures on Aug. 17, 2026, and the
Brookfield facility matures 180 days after the ABL facility.
Rockpoint's earliest maturity is the $450 million Term Loan which
due to the springing maturity provision matures on May 18, 2026 (91
days before the maturity of the ABL facility). In the event no
springing maturity provision applies, the Term Loan is due on Aug.
17, 2026.
The ABL facility requires Rockpoint to maintain a minimum
fixed-charge coverage ratio of 1.1x. As of June 30, 2023, the
company was compliant with covenants on its credit facilities and
had a fixed-charge coverage ratio of 6.23x (as calculated under the
credit agreement). The Term Loan agreement requires the company to
maintain a leverage ratio of under 4.5x, stepping down to 4.0x on
Sept. 30, 2024, and 3.75x on Sept. 30, 2025; and EBITDA Interest
Coverage ratio of greater than 2.5x. Fitch expects Rockpoint to
remain compliant with all its debt covenants, at least in the
near-term.
ISSUER PROFILE
Rockpoint is the largest independent (i.e., not affiliated with a
natural gas pipeline) owner of natural gas storage facilities in
North America. Rockpoint owns or contracts for approx. 260 billion
cubic feet of working gas storage capacity in Alberta and
California.
SUMMARY OF FINANCIAL ADJUSTMENTS
Fitch's leverage metrics are based on financial data contained in
Rockpoint Gas Storage Partners, LP's audited combined consolidated
financial statements. These statements perform a combination of (a)
the consolidated results of Rockpoint Gas Storage Partners LP with
(b) affiliate entities that are not Rockpoint subsidiaries nor
Rockpoint investees. The key affiliate entities so combined is Lodi
Gas Storage, LLC
Fitch has applied 100% equity credit to subordinated indebtedness
provided by Rockpoint's sponsor, Brookfield.
ESG CONSIDERATIONS
Rockpoint Gas Storage Partners, L.P. has an ESG Relevance Score of
'4' for Group Structure. The score of '4' for Group Structure
reflects the complex group structure amongst ROCGAS, RGSCAN and the
ultimate Sponsor, Brookfield Asset Management, including material
interfamily/related party transactions with affiliate companies.
This has a negative impact on the credit profile, and is relevant
to the rating in conjunction with other factors.
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Prior
----------- ------ -----
Rockpoint Gas
Storage Partners,
L.P. LT IDR B- Affirmed B-
LT IDR WD Withdrawn B-
Rockpoint Gas
Storage Canada
Ltd. LT IDR B- Affirmed B-
LT IDR WD Withdrawn B-
SBA COMMUNICATIONS: Egan-Jones Retains B+ Senior Unsecured Ratings
------------------------------------------------------------------
Egan-Jones Ratings Company on October 16, 2023, maintained its 'B+'
foreign currency and local currency senior unsecured ratings on
debt issued by SBA Communications Corporation. EJR also withdrew
the rating on commercial paper issued by the Company.
Headquartered in Boca Raton, Florida, SBA Communications
Corporation owns and operates wireless communications
infrastructure in the United States.
SCOTTS MIRACLE-GRO: Egan-Jones Hikes Sr. Unsecured Ratings to B+
----------------------------------------------------------------
Egan-Jones Ratings Company on October 24, 2023, upgraded the
foreign currency and local currency senior unsecured ratings on
debt issued by Scotts Miracle-Gro Company to B+ from BB-. EJR also
withdrew the rating on commercial paper issued by the Company.
Headquartered in Marysville, Ohio, Scotts Miracle-Gro Company
markets branded consumer lawn and garden products, as well as a
full range of products for professional horticulture.
SIGNATURE BANK: Egan-Jones Retains B Senior Unsecured Ratings
-------------------------------------------------------------
Egan-Jones Ratings Company on October 19, 2023, maintained its 'B'
foreign currency and local currency senior unsecured ratings on
debt issued by Signature Bank/New York NY EJR also withdrew the
rating on commercial paper issued by the Company.
Headquartered in New York, Signature Bank/New York NY. Signature
Bank is a full service commercial bank that serves privately owned
business clients and their owners and senior managers.
SILGAN HOLDINGS: Egan-Jones Retains BB Senior Unsecured Ratings
---------------------------------------------------------------
Egan-Jones Ratings Company on October 18, 2023, maintained its 'BB'
foreign currency and local currency senior unsecured ratings on
debt issued by Silgan Holdings Inc. EJR also withdrew the rating on
commercial paper issued by the Company.
Headquartered in Stamford, Connecticut, Silgan Holdings Inc. and
its subsidiaries manufacture consumer goods packaging products.
SIX FLAGS: Egan-Jones Retains CCC+ Senior Unsecured Ratings
-----------------------------------------------------------
Egan-Jones Ratings Company on October 26, 2023, maintained its
'CCC+' foreign currency and local currency senior unsecured ratings
on debt issued by Six Flags Theme Parks Inc. EJR also withdrew the
rating on commercial paper issued by the Company.
Headquartered in Arlington, Texas, Six Flags Theme Parks Inc.
operates as an amusement park.
SIX FLAGS: Moody's Puts 'B2' CFR on Review for Upgrade
------------------------------------------------------
Moody's Investors Service placed Six Flags Entertainment
Corporation's ("Six Flags") B2 corporate family rating, B2-PD
probability of default rating, B3 senior unsecured notes, and Ba2
senior secured bank facilities and notes rating issued by
subsidiary, Six Flags Theme Parks Inc. on review for upgrade.
Previously, the outlook was stable. The review for upgrade was
prompted by the joint announcement by Six Flags and Cedar Fair,
L.P. ("Cedar Fair", B2 CFR) that they have entered into a
definitive agreement to combine in a merger of equals transaction.
Governance is a key driver of the rating action, as reducing
financial risk through deleveraging is among management's goals of
the merger.
On November 2, 2023, Six Flags and Cedar Fair announced their
intentions to merge the two companies following approval by the
Boards of Directors of both companies. Cedar Fair unitholders will
receive one share of common stock in the new combined company for
each unit owned, and Six Flags shareholders will receive 0.5800
(the "Six Flags Exchange Ratio") shares of common stock in the new
combined company for each share owned.[1] Following the close of
the transaction, Cedar Fair unitholders will own approximately
51.2%, and Six Flags shareholders will own approximately 48.8%, of
the combined company's fully diluted share capital on a pro forma
basis. They also announced that one business day prior to the close
of the transaction, Six Flags will declare a special cash dividend
composed of: (i) a fixed amount of $1.00 per outstanding Six Flags
share, totaling approximately $85 million in the aggregate, plus,
(ii) an amount per outstanding Six Flags share equal to (a) the
aggregate per unit distributions declared or paid by Cedar Fair to
unitholders with a record date following the date and prior to the
close of the transaction, multiplied by (b) the Six Flags Exchange
Ratio, which special dividend will be payable to Six Flags
shareholders of record as of one business day prior to the close of
the transaction, contingent on the closing.
RATINGS RATIONALE / FACTORS THAT COULD LEAD TO AN UPGRADE OR
DOWNGRADE OF THE RATINGS
The combined company is expected to benefit from greater scale as
it will become the largest regional theme park operator in the US,
with a geographically more diversified portfolio of 27 amusement
parks, 15 water parks and 9 resort properties across 17 states in
the U.S., Canada, and Mexico. This diversification will partially
mitigate the impact of seasonality and volatility. Management also
anticipates that it will be able to achieve $120 million in cost
synergies over two years and $80 million in new revenue synergies
within three years, resulting in greater financial flexibility. The
result along with increasing free cash flow for park investment and
debt reduction should lead to deleveraging, a stated management
goal.
"Moody's believe that merging two of the US's largest regional
theme park owners into a leading industry provider of out of home
entertainment will enable the combined company to capitalize on the
new found scale, and optimize revenue strategies and cost
efficiencies" stated Neil Begley, Moody's Senior Vice President.
The review will focus on the benefits of greater scale, improved
diversification and seasonal and weather risk mitigation, cost and
revenue synergy opportunities, and financial policies in connection
with management's goal of reducing net debt to EBITDA leverage to
around 3.0x (before Moody's adjustments). The review will also
focus on meeting the regulatory hurdles for completion of the
acquisition and the specific plans and structure for each of the
two companies current outstanding debt which could impact notching.
Should the debt be structured such that the two silos are pari
passu with respect to the combined company's assets and cash flows,
Moody's would expect to equalize the ratings across each class.
Six Flags Entertainment Corporation, with its headquarters in
Arlington, TX, is a regional amusement park company that currently
operates 27 North American theme and waterparks. The park portfolio
includes 24 wholly-owned facilities (including parks near New York
City, Chicago and Los Angeles) - as well as three consolidated
partnership parks - Six Flags over Texas (SFOT), Six Flags over
Georgia (SFOG), and White Water Atlanta. Six Flags currently owns
54.1% of SFOT and 31.5% of SFOG/White Water Atlanta. In addition,
the company has international licensing agreements in Saudi Arabia.
Revenue including full consolidation of the partnership parks was
approximately $1.41 billion as of the LTM period ended October 1,
2023.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
SLYNC: DSI to Conduct Auction Sale of Intellectual Property
-----------------------------------------------------------
On October 17, 2023, the Assignee filed its Verified Petition for
Assignment for the Benefit of Creditors (the "Petition"), attaching
the General Assignment for the Benefit of Creditors.
On October 18, 2023, the Court entered the Order on Petition for
Assignment for the Benefit of Creditors, asserting jurisdiction
over the Petition pursuant to 10 Del. C. Secs. 7381, et seq.
By way of background, the predecessor at Slync was a logistics
software development company that created efficiencies in
historically manual processes with their primary focus in freight
schedule management. Slync had a variety of successful products
and growing interest in both the ocean and air freight industries,
the company itself struggled to reach sustained profitability due
to lower revenue streams and unexpected legal expenses.
The Assignee is seeking a buyer for substantially all of the
Assignor's assets relating to Slync's platform, including the
Intelligent Carrier Management ("ICM"), Ocean Booking 360,
Inventory in Motion, and Air Freight Management, subject to a sales
process that includes the solicitation of higher and/or better
bids. The Assets will be sold free and clear of all liens, claims,
encumbrances, and interests. The Assignee is currently in
discussions with several interested parties and conducting due
diligence.
All interested parties wishing to make competitive offers for the
Assets will need to submit a qualified bid to the Assignee by no
later than 5:00 p.m. (prevailing Pacific time) on November 20,
2023, and contain the following: (i) information confirming that
the qualified bidder ("Bidder") has the financial capacity to
consummate a transaction if selected as the successful bidder
("Successful Bidder"), (ii) ability to expeditiously consummate the
transaction if selected as the Successful Bidder, (iii) a signed
Mutual Confidentiality and Non-Disclosure Agreement, and (iii)
ability to submit a deposit of no less than 10% of the bid.
Assignee intends to sell the Purchased Assets to pursuant to
execution of an acceptable Asset Purchase Agreement that embodies
the conditions agreed to in the Term Sheet. The Assignee reserves
the right to enter into an Asset Purchase Agreement ("APA") with
another party as the Assignee had determined to be valid.
Parties interested in the assets of Slync Inc. are requested to
contact Matthew Sorerson (MSorenson@DSIConsulting.com) at (213)
532-4549 or Steven Victor (Svictor@dsiconsulting.com) at (773)
230-4016, both of DSI Assignments.
The Assignee is represented by Klehr Harrison Harvey Branzburg LLP;
Richard Beck (RBeck@klehr.com) or Alyssa Radovanovich
(Aradovanovich@klehr.com) Telephone (302) 426-1189.
About DSI
Development Specialists, Inc. (DSI) -- http://www.dsiconsulting.com
-- is one of the leading providers of management consulting and
financial advisory services, including turnaround consulting,
financial restructuring, litigation support, fiduciary services and
forensic accounting. Our clients include business owners,
private-equity investors, corporate boards, financial institutions,
secured lenders, bondholders and unsecured creditors. For almost 40
years, DSI has been guided by a single objective: maximizing value
for all stakeholders. With our highly skilled and diverse team of
professionals, offices in the U.S. and international affiliates and
an unparalleled range of experience, DSI has built a solid
reputation as an industry leader.
SMILEDIRECTCLUB INC: Plan Contemplates Two Scenarios
----------------------------------------------------
SmileDirectClub Inc. and its Debtor Affiliates filed with the U.S.
Bankruptcy Court for the Southern District of Texas a Disclosure
Statement for the Joint Chapter 11 Plan dated October 30, 2023.
Originally headquartered in Detroit, Michigan, SmileDirect launched
operations in 2014 by purchasing and selling clear aligners and
retainers manufactured by third parties.
Pursuant to the Interim DIP Order and the HPS Forbearance
Agreement, the Debtors will pursue a chapter 11 plan of
reorganization that anticipates a sale of the equity in the
reorganized Debtors or all or a subset of the Debtors' assets to
the highest bidder. Following the Petition Date, the Debtors began
a 60-day marketing process for the sale of the Debtors' equity
under a plan of reorganization—or for any other restructuring
transactions that parties wish to propose—in partnership with the
founders or otherwise.
If the Debtors are unable to implement a transaction to preserve
the business as a going-concern, the Debtors will instead pursue an
orderly liquidation of their estates through a chapter 11 plan of
liquidation. The DIP Facility includes a $2.5 million minimum
liquidity covenant, which is intended to be reserved to fund a
wind-down budget (the "Wind-Down Budget") to facilitate an orderly
wind-down of the Company and implementation of the HPS Receivable
Liquidation Plan, if necessary
The Debtors have prepared and filed a chapter 11 plan concurrently
herewith which includes a toggle structure to provide flexibility
to implement a going-concern restructuring transaction or, if a
going-concern transaction cannot be achieved, an orderly wind
down.
The proposed Plan contemplates a "toggle" approach wherein the
Debtors' will pursue an expeditious chapter 11 sale process for
100% of the New Common Stock of Reorganized SDC or all or
substantially all of the Debtors' assets under the Restructuring.
The Restructuring is expressly conditioned upon satisfaction of the
Delayed-Draw Condition, which will be satisfied on the 60th day
after the Petition Date, if (a) there shall have been no greater
than a $7,000,000 reduction in net cash flow over the first 60 days
of the Chapter 11 Cases (as compared to the Initial DIP Budget (as
defined in the DIP Orders), and (b) a Successful Bid shall have
been received.
A Successful Bid is a bid received in connection with the Debtors'
postpetition marketing process that: (a) is determined by the
Special Committee to be higher or otherwise better than the
proceeds that would be generated by the Wind Down; (b) repays the
loans under the HPS Credit Facility in full (or is otherwise
acceptable to HPS); and (c) repays the DIP Claims in full (or is
otherwise acceptable to the DIP Lenders). If the Restructuring is
consummated, (a) Holders of General Unsecured Claims and Holders of
Convertible Notes Claims will receive their Pro Rata share of the
Unsecured Claim Recovery Pool and (b) Holders of HPS Guarantee
Claims will receive unsecured guarantees provided by SDC, LLC, SDC
Financial, LLC, or or one or more of the other Post-Effective Date
Debtors (or any respective successors), as applicable, guaranteeing
the obligations under the Amended HPS Credit Facility.
Class 4 consists of General Unsecured Claims. On the Effective
Date, except to the extent different treatment is agreed to by the
Post-Effective Date Debtors and any Holder of an Allowed General
Unsecured Claim, each Holder of an Allowed General Unsecured Claim
shall receive, in full and final satisfaction of such Claims:
* if the Restructuring occurs, its Pro Rata share of the Class
Allocable Share of the Unsecured Claim Recovery Pool; or
* if the Wind Down occurs, its Pro Rata share of the Class
Allocable Share of the Excess Distributable Cash.
On the Effective Date, all Interests shall be cancelled, released,
extinguished, and discharged and will be of no further force or
effect. Each Holder of an Interest shall receive no recovery or
distribution on account of their Interests.
The Post-Effective Debtors will fund distributions under the Plan
with: (i) Cash on hand on the Effective Date; (ii) Excess
Distributable Cash; and (iii) the revenues and proceeds of all
Wind-Down Assets of the Debtors, including proceeds from all Causes
of Action not settled, released, discharged, enjoined, or
exculpated under the Plan or otherwise on or prior to the Effective
Date.
If the Restructuring occurs, the Debtors shall fund or make
distributions under the Plan, as applicable, with: (i) the
guarantees provided pursuant to the Amended HPS Credit Facility,
(ii) the consideration provided in connection with a Successful
Bid, including the Unsecured Claim Recovery Pool; (iii) the New
Common Stock, and (iv) the Debtors' Cash on hand.
If the Wind Down occurs, the Post-Effective Debtors will fund
distributions under the Plan with: (i) Cash on hand on the
Effective Date; (ii) Excess Distributable Cash; and (iii) the
revenues and proceeds of all Wind-Down Assets of the Debtors,
including proceeds from all Causes of Action not settled, released,
discharged, enjoined, or exculpated under the Plan or otherwise on
or prior to the Effective Date.
A full-text copy of the Disclosure Statement dated October 30, 2023
is available at https://urlcurt.com/u?l=eQDQAn from
PacerMonitor.com at no charge.
About SmileDirectClub
SmileDirectClub Inc. (Nasdaq: SDC) --
http://www.SmileDirectClub.com/-- is an oral care company and
creator of the first medtech platform for teeth straightening.
Through its cutting-edge telehealth technology and vertically
integrated model, SmileDirectClub is revolutionizing the oral care
industry. Its mission is to democratize access to a smile each and
every person loves by making it affordable and convenient for
everyone. SmileDirectClub is headquartered in Nashville,
Tennessee.
SmileDirectClub and its affiliates sought protection under Chapter
11 of the U.S. Bankruptcy Code (Bankr. S.D. Texas Lead Case No.
23-90786) on Sept. 29, 2023. In the petition signed by its chief
financial officer, Troy Crawford, SmileDirectClub disclosed
$498,712,000 in assets and $1,051,823,000 in liabilities.
Judge Christopher M. Lopez oversees the cases.
The Debtors tapped Kirkland & Ellis LLP and Kirkland & Ellis
International, LLP as general bankruptcy counsel; Jackson Walker,
LLP as local bankruptcy counsel; Centerview Partners, LLC as
financial advisor and investment banker; FTI Consulting, Inc. as
restructuring advisor; and Kroll Restructuring Administration, LLC
as notice and claims agent.
SMYRNA READY: Moody's Affirms Ba3 CFR & Rates New Secured Notes Ba3
-------------------------------------------------------------------
Moody's Investors Service affirmed Smyrna Ready Mix Concrete, LLC's
Ba3 corporate family rating, Ba3-PD probability of default rating
and the Ba3 ratings assigned to the company's backed senior secured
term loan B due 2029 and backed senior secured notes due 2028.
Moody's also assigned a Ba3 rating to the proposed backed senior
secured notes, which are pari passu to the company's existing
secured debt. The outlook is maintained at stable.
Smyrna will use some of the note proceeds to acquire multiple
ready-mix concrete plants in Texas from Vulcan Materials Company
(Vulcan). The transaction with Vulcan along with Smyrna's current
Texas operations on a proforma basis will account for about 25% of
Smyrna's total. The balance of the proceeds will be used to term
out revolver borrowings, which were mostly used for small
acquisitions, and to repay about half of the company's existing
term loan. After these transactions are completed, around 80% of
the company's debt will have a fixed interest rate.
"Smyrna's operating performance will benefit from its expansion
into Texas, providing an offset to the additional debt used to
finance the purchase the large number of concrete plants,"
according to Peter Doyle, a Moody's VP-Senior Analyst.
RATINGS RATIONALE
Smyrna's Ba3 CFR reflects sound operating performance, with
adjusted EBITDA margin sustained in the range of 19% - 20%, which
is the company's greatest credit strength. As the largest ready-mix
concrete producer in the US, Smyrna is well positioned to take
advantage of the improving trends in both new single-family home
construction and certain segments of commercial construction,
including large manufacturing sites and warehouses. Construction
projects within the State of Texas account for around 12% of total
US nonresidential construction spending, creating a reliable source
of recurring revenue.
However, the company has a leveraged debt capital structure.
Moody's projects adjusted debt-to-EBITDA of 4.2x at year-end 2024,
despite the additional debt that is financing the purchase of the
ready-mix concrete plants. High cash interest payments, approaching
$210 million per year, and the need for ongoing investment in
working capital and capital expenditures inhibit meaningful free
cash flow and limit debt reduction beyond term loan amortization.
Further, a growth strategy characterized by debt-financed
acquisitions will increase Smyrna's fixed charges. Moody's forecast
adjusted free cash flow-to-debt barely positive, which is another
credit constraint. At the same time, Smyrna faces strong
competition where the industry is highly fragmented and very local.
Smyrna must contend with higher transportation and personnel costs
in addition to ongoing volatility in cement, the primary raw
material used in concrete, and energy costs. Higher input costs may
not readily be passed on to customers for an extended period.
Moody's projects Smyrna will maintain an adequate liquidity
profile, limited by the size of the company's $425 million asset
based revolving credit facility relative to the high cash interest
payments and required capital expenditures for the business.
The stable outlook reflects Moody's expectation that Smyrna will
continue to perform well. No material near-term debt maturities and
some improving end market dynamics that require ongoing demand for
concrete further support the stable outlook.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
An upgrade of Smyrna's ratings could ensue if end markets remain
supportive of organic growth such that adjusted debt-to-EBITDA is
below 3.5x. Upwards rating movement also requires improving free
cash flow, with adjusted free cash flow-to-debt staying above 7.5%,
a better liquidity profile and maintaining conservative financial
policies. A downgrade could occur if adjusted debt-to-EBITDA
remains above 4.5x, adjusted EBITDA margin is trending below 18%,
liquidity deteriorates or the company pursues a more aggressive
acquisition strategy.
The principal methodology used in these ratings was Building
Materials published in September 2021.
Smyrna, headquartered in Nashville, Tennessee, is the largest
ready-mix concrete producer in the United States. The Hollingshead
family owns Smyrna.
SMYRNA READY: S&P Rates New $1.1BB Senior Secured Notes 'BB-'
-------------------------------------------------------------
S&P Global Ratings assigned its 'BB-' issue-level rating and '3'
recovery rating to Smyrna Ready Mix Concrete's (SRM's) proposed
$1.1 billion senior secured notes due 2031. The '3' recovery rating
indicates our expectation for meaningful (50%-70%; rounded
estimate: 60%) recovery in the event of a payment default. The
company will use the proceeds for an acquisition and to partially
reduce existing term loan and asset-based lending (ABL) facility
debt.
S&P said, "We believe the company's leverage will elevate as a
result of the notes issuance despite the partial paydown of its
term loan. As of Sept. 30, 2023, SRM's S&P Global Ratings'-adjusted
debt to EBITDA was 4.6x. We expect SRM's adjusted debt leverage to
be in the 5.0x-5.5x range through the remainder of 2023 and into
the first half of 2024 before reducing to the 4.5x-5.0x range as
2024 progresses.
"SRM operates in a highly fragmented, highly competitive industry
subject to demand swings and intensified price competition in soft
construction cycles. Furthermore, we expect SRM to continue its
aggressive acquisition strategy in full-year 2024 and beyond. That
said, SRM has established a track record for the successful
integration of acquired companies as evidenced by the company's
above average EBITDA margins."
SONAVATION INC: Equity Sale Proceeds to Fund Plan
-------------------------------------------------
Sonavation, Inc., filed with the U.S Bankruptcy Court for the
Southern District of Florida a Disclosure Statement for Plan of
Liquidation dated October 30, 2023.
Sonavation designs and develops leading ultrasound biometric
fingerprint sensors for secure authentication into smartphones,
tablets, wearables, automotive and other connected devices.
The Debtor invested a great deal of money in research and
development for its technology. As a result, as is often the case
with a company of its type, it accumulated tax net operating losses
(NOLs) and credits. The NOLs accumulated by the Debtor is estimated
to be $150 million.
Sonavation's technology, while impressive and effective, has not
found a buyer for bringing production to the market or to scale.
Sonavation has insufficient liquidity to maintain operations or to
pay its debts as they come due or maintain its intellectual
property.
A chapter 11 bankruptcy case would ensure the orderly
reorganization or liquidation of its assets, while avoiding further
erosion of its intellectual property, and with the expectancy of
maximizing the value of its assets, through a sale or merger.
Sonavation has also acquired millions of dollars in net operating
losses, which, if preservable, may be preserved through chapter 11.
The Plan creates a Liquidating Trust to be administered by a
Liquidating Trustee to administer the proceeds from the liquidation
of the Bankruptcy Estate.
Under the Plan, the Debtor has arranged with a Hillandale Advisors
(the "Equity Broker") to make its Equity available for sale in a
manner consistent with 26 USC 382 (an IRC 382 Restructuring) and
make available the Debtor's net operating losses (NOLs) to a
buyer.
If there is not a successful Sale of Equity Interests, the Debtor
will proceed with a sale of the Debtor's Intangible Assets and
related causes of action. During the case, the Debtor has solicited
offers for the sale of the Intangible Assets. Toler Law Group, PC,
(the "Asset Stalking Horse") has made a bid consisting of a cash
component of $20,000 and a participation component of 60% of the
net proceeds from any litigation of the Causes of Action pertaining
to the Intangible Assets. A sale utilizing bid procedures approved
by the Court will be conducted approximately sixty days after the
Effective Date.
Class III is comprised of all Allowed Equity Interests. The Allowed
Equity Interests in the Debtor shall be either canceled as of the
Effective Date, or alternatively marketed for an Equity Sale by the
Equity Broker and then either conveyed pursuant to the Equity Sale,
or alternatively cancelled to the extent that any such Equity
Interests are not sold at an Equity Sale.
Class VI is comprised of all Allowed Unsecured Claims. The holders
of such Claims shall receive on account of such Claims a Pro Rata
Share of the proceeds of the Equity Sale. In the event of an Asset
Sale, they will receive proceeds of the Asset Sale after payment to
Classes IV and V.
Recoveries for creditors in this case will come from the potential
sale of the Equity Interests of the Debtor or Sale of the Debtor's
Assets by the Liquidating Trust.
The Plan provides for the creation of the Liquidating Trust,
responsible for the sale of the Debtor's Intangible Assets and the
potential sale of the Equity Interests in the Debtor. If the Equity
Interests in the Debtor do not sell through the Plan, then the
Equity Interests of the Debtor will be cancelled through the Plan.
Holders of Allowed Claims shall be beneficiaries of the Liquidating
Trust and entitled to distributions based on the priority and
timing set forth in the Plan. The Liquidating Trustee will control
the Liquidating Trust. The Liquidating Trust will be vested with
all the Debtor's Bankruptcy Estate.
A full-text copy of the Disclosure Statement dated October 30, 2023
is available at https://urlcurt.com/u?l=3ImOQS from
PacerMonitor.com at no charge.
Attorneys for Debtor:
Paul N. Mascia, Esq.
Michael A. Nardella, Esq.
Nardella & Nardella, PLLC
135 W. Central Blvd., Ste. 300
Orlando, FL 32801
Tel: (407) 966-2680
Fax: (407) 966-2681
Email: pmascia@nardellalaw.com
About Sonavation Inc.
Sonavation Inc. manufactures computer and peripheral equipment in
North Palm Beach, Fla.
Sonavation sought relief under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. S.D. Fla. Case No. 23-13960) on May 22, 2023. In the
petition signed by its chief executive officer, Lisa Rhoads, the
Debtor reported between $1 million and $10 million in both assets
and liabilities.
Judge Erik P. Kimball oversees the case.
The Debtor tapped Paul N. Mascia, Esq., at Nardella & Nardella,
PLLC as legal counsel and Ashcraft Business Advisors as accountant.
SONIC AUTOMOTIVE: Egan-Jones Retains BB Senior Unsecured Ratings
----------------------------------------------------------------
Egan-Jones Ratings Company on October 17, 2023, maintained its 'BB'
foreign currency and local currency senior unsecured ratings on
debt issued by Sonic Automotive Inc. EJR also withdrew the rating
on commercial paper issued by the Company.
Headquartered in Charlotte, North Carolina, Sonic Automotive sells
new and used cars and light trucks, as well as replacement parts.
SOUTHWESTERN ENERGY: Egan-Jones Retains B+ Sr. Unsecured Ratings
----------------------------------------------------------------
Egan-Jones Ratings Company on October 16, 2023, maintained its 'B+'
foreign currency and local currency senior unsecured ratings on
debt issued by Southwestern Energy Company. EJR also withdrew the
rating on commercial paper issued by the Company.
Headquartered in Houston, Texas, Southwestern Energy Company is an
independent energy company.
SPECIALTY DENTAL: Quality of Care Maintained, 2nd PCO Reports
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Thomas Mackey, the patient care ombudsman, filed with the U.S.
Bankruptcy Court for the Western District of Texas a second report
regarding the quality of patient care provided at the dental
practices of Specialty Dental Holdings, LLC.
The PCO, who visited the clinic on October 17 and 18, consistently
experienced cooperation and candor at all levels of Specialty
Dental's organization. The staff were knowledgeable about Specialty
Dental's Chapter 11 filing and provided sincere responses to
questions asked. They do not believe Specialty Dental's bankruptcy
has compromised patient quality or safety of care. The staff
verified requests for supplies, personnel, and operational hardware
are sufficient for operations. Equipment and supplies to deliver
patient care do not appear to be lacking because of Specialty
Dental's bankruptcy, the PCO noted in his report.
The PCO reported that Specialty Dental is preparing for a sale of
the practices. Specialty Dental, in consultation with an attorney,
has prepared a letter to give patients explaining the practice sale
and change of providers. The PCO does not believe there are any
issues of patient abandonment. Rather, great care and efforts have
gone into making the transition as smooth as possible and assuring
patient safety.
In his report, the PCO also noted that Specialty Dental continues
to provide sufficient resources to maintain or improve the quality
and safety of care.
A copy of the ombudsman report is available for free at
https://urlcurt.com/u?l=UCy0oW from PacerMonitor.com.
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.
Thomas Mackey is the patient care ombudsman appointed in the
Debtor's Chapter 11 case.
STONERIDGE INC: S&P Alters Outlook to Stable, Affirms 'B' ICR
-------------------------------------------------------------
S&P Global Ratings revised its outlook to stable from negative and
affirmed the 'B' issuer credit rating on Stoneridge Inc.
The stable outlook reflects S&P's expectation that Stoneridge
should realize improved profitability over the next couple of
years, allowing free operating cash flow (FOCF) to improve toward
breakeven and increasing availability on its revolving credit
facility.
S&P said, "We revised our outlook on Stoneridge to stable following
its revolver refinancing, which alleviated near-term liquidity
pressures and modestly extends the debt maturity profile. The
company completed a refinancing of its previous revolving credit
facility due June 2024 with a new $275 million cash flow revolver
due November 2026. The maturity extension of Stoneridge's revolving
credit facility enhanced our assessment of the company's liquidity,
despite revolver availability being constrained by the 3.50x
leverage covenant (3.11x actual at end of the third quarter) on a
trailing basis. Pro forma for the refinancing, the company had
$55.5 million of total liquidity as of Sept. 30, 2023, consisting
of $36.8 million of balance sheet cash and $18.5 million of net
revolver availability (constrained by 3.5x total leverage
covenant). We expect liquidity to improve as Stoneridge's EBITDA
expands and leverage trends lower over the next few quarters, which
should increase availability on the revolver. However, we view the
tenor of the facility as relatively short and that the company may
start to face refinancing risk one year from now when its weighted
average maturity is below two-years based on the current capital
structure.
"The stable outlook reflects our expectation that Stoneridge will
likely realize improved profitability within the next couple of
years, allowing FOCF to improve toward breakeven and increasing
availability on its revolving credit facility.
"We could lower our rating on Stoneridge if persistent negative
FOCF drains its liquidity sources, we believe the company could
breach its maintenance financial covenants, or if debt to EBITDA
approaches 5x. Weaker financial performance could be due to slower
original equipment manufacturing (OEM) production, inflationary
cost pressures, or ongoing supply chain disruptions affecting the
availability of critical components."
S&P could raise its rating or outlook on Stoneridge if:
-- Its sales volumes and EBITDA margins improve, allowing the
company to sustain FOCF to debt well above 5% and debt to EBITDA
less than 4x; and
-- The uncertainty about further refinancing risks are decreased
given the still relatively short duration of its capital
structure.
S&P said, "Environmental factors are a moderately negative
consideration in our credit analysis of Stoneridge because some
products in its control devices segment (20%-25% of sales) face
displacement risk from electrification. In addition, its ability to
offset potential losses in its fuel line business largely depends
on it expanding the volume of content per vehicle in its
electronics and MirrorEye connectivity segments. A
faster-than-expected transition to battery electric vehicles,
coupled with the slow adoption of the company's products,
represents a modest downside risk."
STONY POINT: Seeks Court Nod to Sell NY Property for $499,999
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Stony Point Ambulance Corps, Inc. asked the U.S. Bankruptcy Court
for the Southern District of New York for authority to sell in a
private deal its property in New York.
The company is selling an industrial property located at 6 Lee
Avenue, Stony Point, N.Y., from which it used to operate. Several
challenges including increasing regulatory mandates and rising
costs rendered the property unusable for operations.
Zachary Levin, the buyer, offered $499,999 for the property without
any contingencies. The property is being sold "free and clear" of
claims, liens, encumbrances and interests, according to the sale
contract between Stony Point and the buyer.
Stony Point will use the proceeds from the sale to pay JTS Capital
Realty 3, LLC after payment of the closing costs, broker's
commission and other fees.
Erica Aisner, Esq., the company's attorney, said the offer is the
"most favorable and represents the highest value" the company can
expect.
"Not only will the sale provide for a significant pay down of the
balance due to JTS Realty, it will avoid the continued carrying
costs of an asset, which provides zero income or benefit or
benefits to the estate," Ms. Aisner said in a motion filed in
court.
The sale motion is on the court's calendar for Dec. 7.
About Stony Point Ambulance Corps
Stony Point Ambulance Corps, Inc. -- https://www.spacems.org – is
the official ambulance service for the Town of Stony Point, N.Y. It
offers NYS EMT certification and provides personal growth and
career development opportunities.
Stony Point Ambulance filed Chapter 11 petition (Bankr. S.D.N.Y.
Case No. 23-22654) on Sept. 7, 2023, with $1 million to $10 million
in both assets and liabilities. Eric Huebscher Consulting has been
appointed as Subchapter V trustee.
Judge Sean H. Lane oversees the case.
The Debtor tapped Erica Aisner, Esq., at Kirby Aisner and Curley,
LLP as legal counsel.
TEAM HEALTH: Moody's Lowers CFR to 'Ca', Outlook Stable
-------------------------------------------------------
Moody's Investors Service downgraded Team Health Holdings, Inc.'s
Corporate Family Rating to Ca from Caa3, Probability of Default
Ratingto Ca-PD from Caa3-PD, senior secured revolving credit
facility and senior secured term loan B debt rating to Caa3 from
Caa2 and the rating of senior unsecured notes to C from Ca. The
outlook is maintained stable.
The downgrade of Team Health's ratings reflects deterioration of
the company's operating performance in recent quarters, very high
financial leverage, weak liquidity and significant refinancing
risk. Team Health disclosed in its quarterly report for Q2 of 2023
that it is working with lenders to address upcoming senior secured
revolving credit facility and senior secured term loan B maturities
(November 6, 2023 and February 6, 2024 respectively). Moody's
believes that even if the company is able to refinance according to
the terms disclosed in the second quarter disclosures the
transaction will incur significant one-time costs as well as high
ongoing interest cost. Moreover, lenders are unlikely to extend the
maturities of new debt past the due date of senior unsecured notes
(February 1, 2025) without including spring forward provisions
similar to that in the extended portion of senior secured term loan
B. Team Health needs to redeem at least $464 million of senior
unsecured notes before early November 2024 to avoid the maturity of
the extended portion of the senior term loan B from springing 91
days ahead of the maturity of senior unsecured notes.
Consequently, the risk of the company's entire debt capital
structure coming due in late 2024 is a material credit risk. Given
the company's weak operating performance and difficult market
conditions, the company may resort to a transaction which Moody's
considers to be a distressed exchange (and hence a default under
Moody's definition).
RATINGS RATIONALE
Team Health's Ca CFR reflects the company's very high refinancing
risk, weak liquidity, very high financial leverage and a
challenging operating environment. Team Health has experienced
less-than-full recovery of business volumes post-COVID. The company
continues to be in dispute with some commercial insurers and it is
exposed to unfavorable shift in payor mix. Moody's expects that
Team Health will operate with financial leverage in the 9x-11x
range in the next 12-18 months.
Team Health's liquidity is weak. Moody's expects that the company
will struggle to generate positive in free cash flow in the next 12
months. At the end of June 2023, Team Health had about $159 million
in cash and no borrowings (except -12 million letters of credit)
under its $300 million bank senior secured revolving credit
facility. The company's revolver is scheduled to expire on November
6, 2023. To prevent secured debt maturities to spring ahead of
unsecured debt maturity, Team Health will need to redeem at least
$464 million of senior unsecured notes before early November 2024.
The stable outlook reflects Moody's view that the default
probability is high and appropriately captured at the current.
The company's senior secured credit facilities (comprised of the
revolver and term loan B) are rated Caa3. The Caa3 instrument
rating reflects the senior secured credit facilities' priority
claim on assets and benefits from the cushion provided by the
unsecured notes which are rated C. The unsecured notes' C rating
reflects their junior position in the capital structure and the
fact that they would absorb losses ahead of the senior secured
credit facilities.
Team Health Holdings, Inc.'s CIS-5 score indicates that the
company's credit profile is weaker than it would have been if ESG
exposures did not exist, and the negative impact is more pronounced
than for issuers scored CIS-4. The CIS-5 score reflects governance
considerations including very high refinancing risk and social risk
exposures mainly stemming from human capital and responsible
production. Team Health Holdings, Inc.'s S-4 score represents the
company's is exposed to a scarcity of qualified human capital as it
relies heavily on specialized labor, which often requires extensive
licensing. The company could face liabilities related to patient
care if it becomes a target of medical malpractice litigations
and/or if it ends up violating industry regulations. The company is
also exposed to changes in reimbursement rates by its payors, which
include government payors, as well as a push towards reducing
overall healthcare costs. Team Health Holdings, Inc.'s G-5
governance score reflects its aggressive financial strategy. The
company faces heightened refinancing risks in the next 12 months
reflected in upcoming debt maturities and it has a concentrated
decision-making structure under private equity ownership.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be downgraded if the company's liquidity
deteriorates, free cash flow remains negative, or if the company
fails to address the refinancing risks in advance of scheduled
maturities. Ratings could also be downgraded if for whatever reason
the company's probability of default increases.
The ratings could be upgraded if Team Health addresses the
refinancing risk. Additionally, improved operating performance,
earnings growth and profitability could also support a rating
upgrade.
Team Health Holdings, Inc., headquartered in Knoxville, TN, is a
provider of physician staffing and administrative services to
hospitals and other healthcare providers in the U.S. The company is
affiliated with more than 15,000 healthcare professionals who
provide emergency medicine, hospital medicine, anesthesia, urgent
care, pediatric staffing and management services. The company also
provides a full range of healthcare management services to military
treatment facilities. Team Health Holdings, Inc. is owned by
private equity investor Blackstone Inc. and its fiscal year 2022
revenues were approximately $4.8 billion.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
TELEPHONE AND DATA: Egan-Jones Retains B+ Senior Unsecured Ratings
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Egan-Jones Ratings Company on October 25, 2023, maintained its 'B+'
foreign currency and local currency senior unsecured ratings on
debt issued by Telephone and Data Systems, Inc. EJR also withdrew
the rating on commercial paper issued by the Company.
Headquartered in Chicago, Illinois, Telephone and Data Systems,
Inc. is a diversified telecommunications company.
TNT INDUSTRIES: Court OKs Interim Cash Collateral Access
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The U.S. Bankruptcy Court for the District of Utah, Central
Division, authorized TNT Industries, LLC to use cash collateral on
an interim basis in accordance with the budget.
The Debtor requires the use of cash collateral to pay ongoing
operating expenses of the Debtor including employee salaries,
material purchases and other essential day-to-day expenses.
The Debtor's operations have been interrupted due to a series of
economic events and difficulties resulting from excessive
purchasing of materials during "COVID" supply chain difficulties
resulting in an extreme excess of materials in inventory in now
unusable materials, subcontractor work which substandard resulting
in unfinished contract jobs and cancellation of agreements with
long-time general contractors who had engaged the Debtor for years
and now no longer work with the Debtor and prior attempts at
expansion through underperforming salespersons on salary and not
bringing in expected customers, resulting in cash flow
difficulties.
The Debtor's focus historically has been exterior construction,
specifically roofing and siding. The Debtor sought to expand this
market and employed many salespersons and companies paying for
leads and sales which did not yield additional contracted work.
However, the payment of these expenses did not increase the
Debtor's revenue and the Debtor has employed debt in order to
address the shortages of revenue in order to continue to make
payroll and purchase materials.
More recently, the Debtor has been scaled back to its essential and
historic business model with less aggressive efforts to increase
business and revenues.
The combined effect of all of the above has resulted in
inconsistent cash flow and, at this time, the Debtor has been
unable to pay all of its current debts as they come due.
Based on a UCC search performed on July 10, 2023, the Debtor has
identified potentially four allegedly secured creditors with a
potential interest in personal property of the Debtor, more
specifically U.S. Small Business Administration, Advanced
Servicing, Inc., Cloudfund, LLC and Kapitus, LLC believed to be
represented by either C T Corporation System or Corporation Service
Company, as Representative. Based on the filing dates, SBA appears
to be the senior creditor. The Debtor proposed to make the ongoing
monthly payments to SBA and only as and when due in the ordinary
course of its business, and such payments constitute adequate
protection for the Debtor's use of SBA's cash collateral.
The Debtor did not propose to make adequate protection payments to
Advanced Servicing, Cloudfund and Kapitus or any other alleged
secured creditor as they are junior to SBA.
A final hearing on the matter is set for November 16, 2023 at 2:30
p.m.
A copy of the motion is available at https://urlcurt.com/u?l=EWE2wX
from PacerMonitor.com.
A copy of the court's order and the Debtor's budget is available at
https://urlcurt.com/u?l=TnXytG from PacerMonitor.com.
The Debtor projects $262,752 in total receipts and $232,576 in
total disbursements for November 2023.
About TNT Industries
TNT Industries, LLC sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Utah Case No. 23-24401) on Oct. 1, 2023.
In the petition signed by Gabriel Tilley, managing member, the
Debtor disclosed up to $1 million in both assets and liabilities.
Judge William T. Thurman oversees the case.
Geoffrey L. Chesnut, Esq., at Red Rock Legal Services, PLLC serves
as the Debtor's counsel.
TUFFSTUFF FITNESS: Hires Levene Neale Bender as Counsel
-------------------------------------------------------
Tuffstuff Fitness International, Inc. seeks approval from the U.S.
Bankruptcy Court for the Central District of California to employ
Levene, Neale, Bender, Yoo & Golubchik L.L.P. as general bankruptcy
counsel.
The firm's services include:
a. advising the Debtor with regard to the requirements of the
Bankruptcy Court, Bankruptcy Code, Bankruptcy Rules and the Office
of the United States Trustee as they pertain to the Debtor;
b. advising the Debtor with regard to certain rights and
remedies of its bankruptcy estate and the rights, claims, and
interests of creditors;
c. representing the Debtor in any proceeding or hearing in the
Bankruptcy Court involving its estate unless the Debtor is
represented in such proceeding or hearing by other special
counsel;
d. conducting examinations of witnesses, claimants or adverse
parties and representing the Debtor in any adversary proceeding
except to the extent that any such adversary proceeding is in an
area outside of LNBYG's expertise or which is beyond LNBYG's
staffing capabilities;
e. preparing and assisting the Debtor in the preparation of
reports, applications, pleadings and orders including, but not
limited to, applications to employ professionals, interim
statements and operating reports, initial filing requirements,
schedules and statement of financial affairs, lease pleadings, cash
collateral pleadings, financing pleadings, and pleadings with
respect to the Debtor's use, sale or lease of property outside the
ordinary course of business;
f. representing the Debtor with regard to obtaining use of
debtor-in-possession financing and/or cash collateral including but
not limited to, negotiating and seeking Bankruptcy Court approval
of any debtor-in-possession financing and/or cash collateral
pleading or stipulation and preparing any pleadings relating to
obtaining use of debtor-in-possession financing and/or cash
collateral;
g. assisting the Debtor in any asset sale process;
h. assisting the Debtor in negotiation, formulation, preparation
and confirmation of a plan of reorganization and the preparation
and approval of a disclosure statement in respect of the plan; and
i. performing any other services which may be appropriate in the
firm's representation of the Debtor during its bankruptcy case.
The firm will be paid at these rates:
Attorneys $450 to $690 per hour
Paraprofessionals $295 per hour
In addition, the firm will receive reimbursement for out-of-pocket
expenses incurred.
The firm received from the Debtor a retainer of $40,000.
John-Patrick M. Fritz, Esq., a partner at Levene, disclosed in a
court filing that his firm is a "disinterested person" pursuant to
Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
John-Patrick M. Fritz, Esq.
Levene, Neale, Bender, Yoo & Golubchik, LLP
2818 La Cienega Avenue
Los Angeles, CA 90034
Tel: (310) 229-1234
Fax: (310) 229-1244
Email: jpf@lnbyg.com
About Tuffstuff Fitness International, Inc.
Tuffstuff Fitness International, Inc., is a manufacturer of
consumer and commercial strength products.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Court (Bankr. C.D. Cal. Case No. 23-11905) on Sept. 18,
2023. In the petition signed by Richard M. Reyes, Jr., chairman
and CEO, the Debtor disclosed up to $10 million in both assets and
liabilities.
The case is represented by Honorable Bankruptcy Judge Theodor
Albert.
The Debtor is represented by Levene, Neale, Bender, Yoo & Golubchik
L.L.P.
ULTIMATE JETCHARTERS: Court OKs Interim Cash Collateral Access
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The U.S. Bankruptcy Court for the Northern District of Ohio,
Eastern Division, authorized Ultimate Jetcharters, LLC to use cash
collateral on an interim basis in accordance with the budget.
The Debtor requires the use of cash collateral for normal business
purposes.
Prior to the commencement of the case, UJC entered into business
loan agreements on April 26, 2017 with The Farmer National Bank of
Canfield in the principal amount of $2.475 million which were sold,
assigned and conveyed to Nations Consulting Group, LLC on May 12,
2022.
The Debtor asserts at the time of the filing of the Petition, UJC
was indebted to NCG in the amount of $7.148 million on the NCG
Indebtedness.
The Debtor asserts that the NCG Indebtedness is secured by a valid
and perfected senior security interest in substantially all of the
Debtor's general intangibles, chattel paper, documents, inventory,
furniture, fixtures and equipment, the proceeds of the same, and a
senior perfected security interest in the accounts held at Premier
Bank and Fifth Third Bank, which funds are currently being held by
the Summit County Clerk of Courts.
Prior to the Petition Date, NCG, as the borrower, entered into the
Credit and Security Agreement, dated as of February 10, 2023,
between NCG and CIBC Bank, as the lender. Pursuant to the Credit
Agreement, CIBC Bank granted certain loans and other financial
accommodations to NCG.
The Debtor is indebted to CIBC Bank in connection with the CIBC
Loan Documents in the amount of $7.6 million as of the Petition
Date.
As adequate protection, the Secured Creditors are granted
automatically perfected and enforceable adequate protection
Replacement Liens, in accordance with the priority of the
applicable Secured Creditors' prepetition security interests and
liens, in collateral of the same type as such Secured Creditor has
a valid prepetition lien. The Replacement Liens will have the same
validity, priority, and extent as the liens on that existed at the
time of the commencement of the above-captioned bankruptcy cases.
A further hearing on the matter is set for January 23, 2024 at 10
a.m.
A copy of the order is available at https://urlcurt.com/u?l=RH89GC
from PacerMonitor.com.
About Ultimate Jetcharters, LLC
Ultimate Jetcharters, LLC is a private aviation company.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Ohio Case No. 23-51404) on October 10,
2023.
In the petition signed by William S. Rudner, chief financial
officer, the Debtor disclosed up to $1 million in assets and up to
$50 million in liabilities.
Peter Tsarnas, Esq., at Gertsz and Rosen, Ltd., represents the
Debtor as legal counsel.
UNDER ARMOUR: Egan-Jones Retains BB Senior Unsecured Ratings
------------------------------------------------------------
Egan-Jones Ratings Company on October 24, 2023, maintained its 'BB'
foreign currency and local currency senior unsecured ratings on
debt issued by Under Armour, Inc.
Headquartered in Baltimore, Maryland, Under Armour, Inc. develops,
markets, and distributes branded athletic performance apparel,
footwear, and accessories.
VARSITY BRANDS: Moody's Rates New Secured First Lien Notes 'B2'
---------------------------------------------------------------
Moody's Investors Service assigned a B2 rating to Varsity Brands
Holding Co., Inc.'s new senior secured first lien notes due
December 2026. Moody's took no action on Varsity Brands' B3
Corporate Family Rating, B3-PD Probability of Default Rating, or B2
rating on the senior secured first lien term loan due December
2026. Moody's withdrew the B2 instrument ratings on the senior
secured first lien term loan due 2024 and senior secured first lien
notes due December 2024 because the debts were repaid. The outlook
is stable.
The refinancing of the remaining 2024 maturities is credit positive
because it improves liquidity. This transaction addresses all
remaining debt that was not extended as part of the amend and
extend transaction in February 2023. The transaction has no
immediate effect on Varsity's B3 Corporate Family Rating ("CFR"),
the B2 rating on the first lien term loan due 2026 or stable
outlook because the refinancing of this debt and increase to
interest expense was already factored in to Moody's projections.
Moody's continues to expect the company will generate positive free
cash flow in 2024.
Varsity Brands is utilizing proceeds from new $450 million first
lien senior secured notes due 2026 to repay remaining borrowing on
the roughly $305 million non-extended first lien senior secured
term loan due 2024 and $44 million senior secured notes due 2024.
The company will also use approximately $95 million of proceeds
from the new notes to partially repay borrowings on its revolving
credit facility. Extending the maturities and increasing revolver
capacity improves liquidity and reduces risk of a default and debt
restructuring over the next year. The refinancing will nevertheless
put pressure on free cash flow due to the step up in interest
expense. Moody's anticipates that a step-up of approximately $13
million of interest from the new notes is manageable and that the
company will generate roughly $20 million of free cash flow in
2024. Additionally, Varsity is benefiting from material interest
hedges that expire in 2024 and could meaningfully increase interest
expense if the company does not pay down debt. Still, Moody's
believes that improvement in the EBITDA margin, a reduction in
working capital and lower legal fees will drive better free cash
flow in 2024. The company continues to benefit from strong
operating performance at BSN and Varsity Spirit and the recent
divestment of the Herff Jones Graduation Business will reduce
working capital needs.
The revolver paydown from the refinancing and projected free cash
flow in the second half of 2023 will increase revolver capacity,
leaving adequate availability to cover highly seasonal cash needs.
The company had $245 million drawn on its $350 million revolver as
of July 1, 2023.
The B2 rating on the new first lien senior secured notes reflects
that the notes are pari passu to the existing first lien senior
secured term loan due 2026 and are secured by a common pool of
collateral and are subject to the same guarantees.
RATINGS RATIONALE
Varsity Brands' B3 CFR reflects its high financial leverage and
weak free cash flow. The refinancing helps improve liquidity that
had weakened over the last year. Varsity has drawn heavily on its
revolver to fund working capital, interest expense, and financing
fees and expenses stemming from its February 2023 amend and extend
transaction. Varsity Brands has high governance risks primarily
related to its aggressive financial strategy under private equity
ownership, including operating with high leverage and use of debt
to fund acquisitions.
Despite these challenges, Varsity's ratings are supported by the
company's strong position within niche school apparel, athletic and
achievement markets and decent diversification across its segments.
Moody's expects BSN and Varsity Spirit will continue to see
mid-to-high single digit revenue growth because the company
continues to expand distribution into new schools and organizations
and improvement to the EBITDA margin will also benefit from further
moderation in input cost and realized efficiencies in supply chain
investments. Additionally, the sale of the Herff Jones Graduation
Business, which closed on October 2, 2023, will help reduce
seasonality and improve the EBITDA margin by disposing of the
discretionary and low profit jewelry and fine paper products
business. Varsity retained the yearbook business. The remaining
product portfolio in BSN Sports and Varsity Spirit is more
resilient to changes in economic conditions due to the product
utilization in sporting and cheer events. Moody's sees
debt-to-EBITDA leverage declining to 6.7x by the year-end 2024 from
6.9x for the last 12 months ended July 1, 2023. Moody's also expect
free cash flow will improve to around $20 million in 2024 from
around negative $5 million for the full-year in 2023. Higher
earnings, lower working capital usage and a reduction in legal fees
will improve free cash flow despite the increase in interest
expense.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
The stable outlook reflects Moody's expectation that demand for the
company's products over the next 12-18 months will remain strong
due to the high levels of in-person school activities, sporting and
cheer events, and cheer camps, resulting in stable revenue and
earnings. The stable outlook also reflects Moody's expectation of
stronger positive free cash flow of around $20 million and
improving liquidity.
The ratings could be upgraded if Varsity demonstrates consistent
organic revenue growth with EBITDA margin expansion, generates
positive free cash flow on an annual basis, and sustains
debt/EBITDA below 6.5x. An upgrade would also require Varsity to
maintain at least good liquidity with less reliance on revolver
borrowings, and maintain financial policies that support credit
metrics sustained at the aforementioned levels.
The ratings could be downgraded if the company's operating
performance deteriorates, such as sustained organic revenue
declines or EBITDA margin contraction, EBITDA-CAPEX/interest is
sustained below 1.25x, or there is a deterioration in liquidity for
any reason including continued negative free cash flow, or large
revolver borrowings. The rating may also be downgraded if financial
policies become more aggressive or the company completes a large
shareholder dividend or an acquisition that increases financial
leverage.
ENVIRONMENTAL, SOCIAL, AND GOVERNANCE FACTORS
Varsity Brands' CIS-4 indicates that the rating is lower than it
would have been if ESG risk exposures did not exist. The score
primarily reflects governance risks due to aggressive financial
policies and concentrated decision making under the majority
ownership by private equity sponsors. Like other consumer durables
companies, Varsity is exposed to environmental risks inherent in
the manufacturing of its products. Varsity also faces social
challenges due to the secular headwinds that is affecting
achievement products and the overall brand faces customer relations
risk from its various pending legal cases.
The principal methodology used in this rating was Consumer Durables
published in September 2021.
Headquartered in Farmers Branch, Texas, Varsity Brands Holding Co.,
Inc. ("Varsity"), through its affiliates, is a provider of sports,
cheerleading and achievement related products to schools, colleges
and youth organizations in the US. The company operates through two
complementary businesses: BSN Sports, providing sports apparel and
equipment to schools and consumers; and Varsity Spirit, offering
cheerleading uniforms and apparel and hosting cheerleading camps
and competitions. Varsity Spirit also includes the Herff Jones
Yearbook business. Bain Capital acquired the company in 2018 in an
LBO transaction for a total implied enterprise value of
approximately $2.9 billion, with prior PE owners Charlesbank
Capital Partners and some co-investors retaining a minority stake
in the entity. The company reported revenue of $2.7 billion for the
twelve months period ending July 1, 2023. On October 2, 2023 the
company divested its Herff Jones' Graduation Business to Atlas
Holdings for an undisclosed amount. Varsity consolidated the
retained yearbook business under the Varsity Spirit segment.
VELSICOL CHEMICAL: Taps GlassRatner Advisory as Financial Advisor
-----------------------------------------------------------------
Velsicol Chemical LLC and its affiliate seek approval from the U.S.
Bankruptcy Court for the Northern District of Illinois to employ
GlassRatner Advisory & Capital Group, LLC d/b/a B. Riley Advisory
Services as financial advisors.
The firm will provide these services:
a. assist the Debtors in a review of its strategic options;
b. assist the Debtors in developing financial projections and
liquidity projections;
c. assist the Debtors with negotiations with various
stakeholders;
d. if a chapter 11 bankruptcy filing or similar insolvency
proceeding is necessary:
i. assist the Debtors with First Day Order data collection;
ii. assist with financial reporting;
iii. assist in preparation of the statutory reporting
requirements during the chapter 11 proceedings, including the
statements of financial affairs and associated schedules and,
during the pendency of the case, the Monthly Operating Reports
(MORs);
iv. assist with the preparation of reports for, and
communications with, the Bankruptcy Court, creditors, and any other
constituents;
v. review, evaluate and analyze the financial ramifications of
proposed transactions for which the Debtors may seek Bankruptcy
Court approval;
vi. provide financial advice and assistance to the Debtors in
connection with asset sale transactions;
vii. assist the Debtors in developing and supporting a
proposed Plan of Reorganization;
viii. render Bankruptcy Court testimony in connection with the
foregoing, as required, on behalf of the Debtors; and
ix. render any other duty or task which falls within the
normal responsibilities of a Financial Advisor at the direction of
Management and/or Board.
The firm will be paid at these rates:
Senior Managing Director $750 per hour
Paraprofessional $225 per hour
Prior to the Petition Date, the Debtors paid B. Riley a total of
$231,248.77 for services rendered. As of the petition date, the
amount of unused advance payment retainers was $58,925.
The firm will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Mr. Pegnia disclosed in a court filing that his firm is a
"disinterested person" as the term is defined in Section 101(14) of
the Bankruptcy Code.
The firm can be reached at:
Joseph V. Pegnia
GlassRatner Capital & Advisory Group, LLC
d/b/a B. Riley Advisory Services
3445 Peachtree Road Suite 1225
Atlanta, GA 30326
Tel: (470) 346-6833
Fax: (404) 483-8422
Email: jpegnia@brileyfin.com
About Velsicol Chemical LLC
Velsicol is a technology company in the industrial intermediate
chemicals industry serving the global polymer additives as well as
flame retardant markets.
Velsicol Chemical LLC and its affiliates files their voluntary
petition for relief under Chapter 11 of the Bankrutpcy Code (Bankr.
N.D. Ill. Lead Case No. 23-12544) on Sep. 21, 2023. The petitions
were signed by Timothy Horn as authorized representative of the
Debtors. At the time of filing, the Debtor estimated $1 million to
$10 million in assets and $10 million to $50 million in
liabilities.
Judge David D. Cleary oversees the case.
Jeffrey M. Schwartz, Esq. at MUCH SHELIST PC represents the Debtors
as counsel.
VERDE PURCHASER: Moody's Assigns First Time B1 Corp. Family Rating
------------------------------------------------------------------
Moody's Investors Service assigned a first time B1 corporate family
rating and B1-PD probability of default rating to Verde Purchaser,
LLC (d/b/a Veritiv Corporation "Veritiv"). Moody's also assigned B2
ratings to the new backed senior secured first lien term loan B and
backed senior secured notes at Verde Purchaser, LLC. The rating
outlook is stable.
The proceeds from the new first lien term loan and senior secured
notes, together with borrowings from a new asset-based revolver
(unrated), and $1.0 billion in equity, will be used to finance the
purchase of Veritiv by Clayton Dubilier & Rice (CD&R). The purchase
price represents a 5.2x EBITDA multiple based on last twelve months
EBITDA ending June 30, 2023.
"The B1 CFR considers Veritiv's scale, moderate debt leverage pro
forma for the acquisition by CD&R, free cash flow generation, and
limited cyclicality of end markets. Good liquidity and moderate
debt leverage provide a buffer to the financial impact of secular
declines in the print business," said Scott Manduca, Vice President
at Moody's.
RATINGS RATIONALE
Veritiv's B1 CFR is supported by its scale, asset-lite business
model, and moderate debt leverage. The company's broad North
American footprint is beneficial in efficiently serving over ten
thousand regional and national customers across diverse end
markets, through their packaging, print, and facility solutions
business segments. Veritiv's highly variable cost structure and
minimal capital expenditure requirements support the ability to
consistently generate free cash flow.
While Veritiv's management team has displayed a track record in
taking necessary actions to improve margins since 2019, execution
risk is elevated because there is more to do. The management team
expects print to naturally become a smaller portion of the
portfolio as packaging and facility solutions grow, and the print
industry remains in secular decline. In addition, the company is
in the midst of a multi-year plan to implement operating efficiency
initiatives to support margins and create a convenient customer
experience. CD&R's ownership experience in the distribution space
may support successful and timely execution of these actions.
However, concentrated ownership by private equity is a constraint
to the rating.
Moody's expects Veritiv to have good liquidity over the next twelve
months supported by availability of $700 million at closing on its
$825 million asset-based revolving credit facility expiring in 2028
and free cash flow. Moody's expect the asset-based revolving credit
facility to have a springing fixed charge covenant of 1.0x, which
applies during any period when availability falls below the greater
of 10% of the commitment or $82.5 million. Moody's expect the
company to maintain a good cushion under the financial covenant
over the next twelve to eighteen months. There are no financial
maintenance covenants on the secured term loan. Most assets are
encumbered by the secured credit facilities.
The B2 rating on the pari passu first lien senior secured term loan
and senior secured notes reflects their subordination to the
asset-based revolver, which is secured by the most liquid assets,
accounts receivable and inventory. The borrower is Verde Purchaser,
LLC, which is where the audited financial statements will be issued
going forward. The facilities are guaranteed on a first lien senior
secured basis on substantially all tangible and intangible assets
of the borrower and each guarantor, and a second lien on the ABL
revolver collateral. Moody's expect the term loan to have an excess
cash flow sweep of 50%, which steps down to 0% at 3.35x first lien
net leverage.
The stable outlook reflects moderate leverage, consistent free cash
flow generation, and expected benefits from efficiency and
portfolio optimization initiatives.
ENVIRONMENTAL, SOCIAL, GOVERNANCE CONSIDERATIONS
Governance is the key consideration among environmental, social,
and governance (ESG) factors. Within the governance category,
financial strategy and risk management is elevated due to the
private, concentrated ownership of Veritiv and the growth through
acquisition strategy of the company. Also reflected in this
category is the risk of debt financed distributions.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Moody's could upgrade the ratings if debt-to-EBITDA is below 4.0x.
Other upgrade considerations are the preservation of good
liquidity, a sustainable improvement in operating margins, and a
reduction in private equity ownership and influence, including
predictable financial policies regarding capital deployment, and
evidence that its end markets remain supportive of organic growth.
Moody's could downgrade the ratings if debt-to-EBITDA remains above
5.0x and EBITA-to-interest expense is trending toward 1.5x. Other
considerations include a deteriorating liquidity profile and
aggressive acquisitions or shareholder return initiatives.
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 pari passu debt capacity up to the greater of $400
million and 100% of EBITDA for the trailing twelve months, plus
unlimited amounts subject to either 3.85x total first lien leverage
ratio or leverage neutral.
-- Amounts up to the greater of $800 million and 200% of EBITDA,
along with any debt incurred in connection with an acquisition or
investment may be incurred with an earlier maturity date than the
initial term loans.
-- There are no express "blocker" provisions which prohibit the
transfer of specified assets to unrestricted subsidiaries; such
transfers are permitted subject to carve-out capacity and other
conditions.
-- Non-wholly-owned subsidiaries are not required to provide
guarantees; dividends or transfers resulting in partial ownership
of subsidiary guarantors could jeopardize guarantees, with no
explicit protective provisions limiting such guarantee releases.
-- There are no express protective provisions prohibiting an
up-tiering transaction.
The proposed terms and the final terms of the credit agreement may
be materially different.
Headquartered in Atlanta, Georgia, Verde Purchaser, LLC (d/b/a
Veritiv Corporation) is a leading North American B2B distributor of
packaging, facility solutions, and print products and services.
The principal methodology used in these ratings was Distribution
and Supply Chain Services published in February 2023.
WEATHERFORD INTERNATIONAL: S&P Ups ICR to 'B+' on Debt Repayment
----------------------------------------------------------------
S&P Global Ratings raised its issuer credit rating on oilfield
services and equipment provider Weatherford International PLC to
'B+' from 'B'.
S&Ps aid, "At the same time, we raised our issue-level ratings on
the company's senior secured debt to 'BB' from 'BB-' and on its
unsecured debt to 'B+' from 'B'. The recovery ratings are
unchanged.
"The positive outlook reflects our expectation that the company's
credit metrics will continue to improve over the next 12 months
amid supportive market conditions and further debt repayment.
"We expect Weatherford's credit metrics will improve over the next
12 months amid improved cash flows and additional debt repayment.
Weatherford has continued to reduce its outstanding debt through
open market repurchases of its secured debt. Through the end of
October 2023, Weatherford fully repaid $125 million of its 11%
senior secured notes due 2024 and repaid about $244 million of its
6.5% senior secured notes due 2028 (through a combination of
repurchases and redemptions). Our base case scenario assumes the
company will repay an additional $125 million next year through
additional repurchases of its 2028 notes. As a result, we expect
S&P Global Ratings-adjusted cash interest expense will decline to
about $170 million in 2024, down from $236 million in 2022.
Together with our expectation for sustained improvement in
profitability through 2024, we now expect the company's funds from
operations (FFO, which we define as EBITDA minus cash interest and
cash taxes) will improve significantly, leading to FFO to debt of
about 40% in 2023 and 47% in 2024. However, we still view these
metrics as somewhat weaker than higher-rated peers.
"We believe Weatherford's operating performance will benefit from
its internal efficiency initiatives, as well as the continued
recovery in exploration and production (E&P) capital spending.
Following the appointment of its current CEO in late 2020,
Weatherford has implemented several initiatives aimed at improving
operating efficiency and reducing costs. For example, it has exited
underperforming operations, including factories and maintenance
facilities, and has evaluated its supply chains to source goods
from lower-cost regions. Profitability also benefitted in the
beginning of 2023 from stronger pricing and a favorable mix of
products and services. We expect pricing gains will abate somewhat
in 2024 amid cooling inflation, but demand should stay supportive
(especially outside of North America, where the company generates
about 75% of its revenue). However, we believe the company's
operating initiatives will allow it to sustain its EBITDA margin
improvement. Therefore, we forecast S&P Global Ratings-adjusted
EBITDA margins will improve to about 24% in 2023 and 2024, up from
19.5% in 2022. We also forecast revenue will increase about 15% in
2023 and 5% in 2024.
"We anticipate the company's financial policy will remain
supportive of a higher rating. On Oct. 24, Weatherford amended its
credit facility, which among other items provides a $300 million
cash flow revolving credit facility (unrated). In our view, this
will enhance the company's liquidity and demonstrates continued
support from its lenders. The facility's amended terms also permit
the company to pay dividends to shareholders provided that maximum
net leverage ratio is below 2x and total liquidity exceeds $400
million. The facility also includes similar provisions for
acquisitions. With our expectation that debt to EBITDA will remain
below 2x over the next year, we assume the company will return some
cash to shareholders starting in 2024, well within its free
operating cash flow (FOCF) generation. Nevertheless, our positive
outlook reflects our expectation that management will prioritize
debt repayment over shareholder rewards or large acquisitions.
"The positive outlook reflects our expectation that Weatherford's
credit metrics will continue to improve over the next 12 months as
the company repays additional debt and benefits from supportive E&P
activity, particularly internationally. We forecast FFO to debt
will increase to the high-40% area and debt to EBITDA will decrease
to about 1.5x in 2024, from about 40% and 1.75x, respectively, in
2023."
S&P could revise its outlook to stable over the next 12 months if
it no longer expected credit metrics to improve further, with FFO
to debt remaining at about 45% and debt to EBITDA above 1.5x. This
could occur if:
-- Demand for the company's services declined due to lower E&P
spending; or
-- The company's financial policy shifted, prioritizing
shareholder rewards or acquisitions over debt repayment.
S&P could raise its ratings over the next 12 months if credit
metrics continued to improve, with FFO to debt above 50% and debt
to EBITDA of about 1.5x. This could occur if:
-- The company continued to prepay debt, or
-- Operating initiatives supported greater-than-expected gains in
profitability.
S&P said, "Environmental factors are a negative consideration in
our credit rating analysis on Weatherford International PLC due to
our expectation that the energy transition will result in lower
demand for services and equipment as accelerating adoption of
renewable energy sources lowers demand for fossil fuels. In
addition, the industry faces an increasingly challenging regulatory
environment, both domestically and internationally, that has
included limits on fracking activity in certain jurisdictions, as
well as the pace of new and existing well permits. Finally, we
believe Weatherford's new management team has made significant
progress in addressing various issues that led to its 2019
bankruptcy, and we expect improvement to continue, as evidenced by
lower charges and improving cash flows that have bolstered
financial performance."
WEWORK INC: Files Chapter 11 to Facilitate Restructuring
--------------------------------------------------------
WeWork Inc. (NYSE: WE), the leading global flexible space provider,
on Nov. 6 disclosed that it has commenced a comprehensive
reorganization to strengthen its capital structure and financial
performance and best position the Company for future success. The
Company maintains the strong support of its key financial
stakeholders and has entered into a Restructuring Support Agreement
("RSA") with holders representing approximately 92% of its secured
notes to drastically reduce the Company's existing funded debt and
expedite the restructuring process. During this period, WeWork will
further rationalize its commercial office lease portfolio while
focusing on business continuity and delivering best-in-class
services to its members, as global operations are expected to
continue as usual.
To successfully achieve its goals, WeWork Inc. and certain of its
entities filed for protection under Chapter 11 of the U.S.
Bankruptcy Code, and intend to file recognition proceedings in
Canada under Part IV of the Companies' Creditors Arrangement Act
(the "CCAA Recognition Proceedings"). WeWork's locations outside of
the U.S. and Canada are not part of this process. WeWork's
franchisees around the world are similarly not affected by these
proceedings.
WeWork has a deliberate and value maximizing lease rejection plan
that is expected to position the company for operational and
financial success. As part of Monday's filing, WeWork is requesting
the ability to reject the leases of certain locations, which are
largely non-operational and all affected members have received
advanced notice.
David Tolley, CEO of WeWork said, "It is the WeWork community that
makes us successful. Our more than half-million members around the
world turn to us for the best-in-class spaces, hospitality, and
technology that our 2,500 dedicated employees and valued partners
provide. WeWork has a strong foundation, a dynamic business, and a
bright future."
"Now is the time for us to pull the future forward by aggressively
addressing our legacy leases and dramatically improving our balance
sheet," Mr. Tolley continued. "We defined a new category of
working, and these steps will enable us to remain the global leader
in flexible work. I am deeply grateful for the support of our
financial stakeholders as we work together to strengthen our
capital structure and expedite this process through the
Restructuring Support Agreement. We remain committed to investing
in our products, services, and world-class team of employees to
support our community."
WeWork is filing with the Court a series of customary "First Day
Motions" to facilitate a smooth transition into the process and to
support operations throughout its cases, which it expects to be
approved in short order. The Company will continue servicing its
existing members, vendors, partners, and other stakeholders in the
ordinary course of business. WeWork expects to have the financial
liquidity to execute these proceedings and continue business in the
ordinary course.
Additional information regarding the Company's Chapter 11 process
is available at https://dm.epiq11.com/WeWork. Stakeholders with
questions may call the Company's Claims Agent, Epiq at (877)
959-5845 or (503) 852-9067 if calling from outside the U.S. or
Canada, or email WeWorkInfo@epiqglobal.com.
Advisors
Kirkland & Ellis LLP and Cole Schotz P.C. are serving as legal
counsel, PJT Partners LP is serving as investment banker, Alvarez &
Marsal North America, LLC is serving as financial and restructuring
advisor, Goodmans LLP is serving as Canadian legal counsel, C
Street Advisory Group is serving as strategic communications
advisor, and Epiq Corporate Restructuring, LLC is serving as claims
and noticing agent to the Company. WeWork has retained Hilco Real
Estate to assist with lease renegotiations.
About WeWork Inc.
New York, NY-based WeWork Inc. (NYSE: WE) -- wework.com -- is a
global flexible workspace provider, serving a membership base of
businesses large and small through its network of 779 Systemwide
Locations, including 622 Consolidated Locations as of December
2022.
WeWork reported a net loss of $2.29 billion for the year ended
Dec.31, 2022, a net loss of $4.63 billion for the year ended Dec.
31, 2021, a net loss of $3.83 billion in 2020, and a net loss of
$3.77 billion in 2019. As of Dec. 31, 2022, the Company had $17.86
billion in total assets, $21.31 billion in total liabilities, and a
total deficit of $3.43 billion.
WILLIAMSBURG BOUTIQUE: Unsecureds Will Get 100% of Claims in Plan
-----------------------------------------------------------------
Williamsburg Boutique LLC filed with the U.S. Bankruptcy Court for
the Southern District of New York a Disclosure Statement describing
Plan of Reorganization dated October 30, 2023.
In 2014, the Debtor was formed to acquire title to the development
real property located at 80 Ainslie Street, Brooklyn, New York (the
"Property").
The Debtor acquired the Property for $6,000,000. The acquisition
was funded in part by two of the Debtor's members, Juda Klein and
Simon Tyrnauer, who each own a 45% membership interest in the
Debtor and in part from financing obtained from Bankwell Bank, LLC,
who also advanced funds for the construction and development of the
Property, and holds a perfected first priority mortgage thereon.
Unfortunately, the Debtor ran out of working capital before the
building and construction project was completed. The building is
currently 70-80% complete and still requires approximately $3.5
million to complete. Although the Debtor obtained a construction
loan facility sufficient to complete the project other than any
unexpected cost overruns, Bankwell improperly ceased funding in
August 2019, leaving the Debtor with no ability to complete the
construction.
During the Chapter 11 Case, the Debtor has been seeking out various
sources of capital as well as talking to potential brokers and
purchasers to either refinance or sell the Property. The Debtor has
agreed to retain a licensed real estate broker, subject to Court
approval, to refinance or sell and liquidate the Property for the
highest and best price on or before February 29, 2024. Upon
closing, the proceeds of refinance or sale shall be distributed to
holders of Claims and Interests in the same manner as provided for
in the Plan.
The Plan will be funded with the net proceeds from (a) the sale or
refinance of the Property. The sale or refinance of the Property,
as applicable, following Confirmation of the Plan, shall not be
subject to any stamp or similar transfer or mortgage recording tax
pursuant to section 1146(a) of the Code because they be refinanced
or sold under the Plan and after the Confirmation Date.
Class 4 consists of the Allowed General Unsecured Claims. The
holders of Allowed Class 4 General Unsecured Claims in the
approximate aggregate amount of $3,000,000, shall each be paid up
to 100% of its Allowed Claim based on the results of the
Sale/Auction, in Cash, from the Distribution Fund upon the earlier
of a post Effective Date refinance or the Sale/Auction Closing
Date. Class 4 is impaired and entitled to vote on the Plan.
The holders of Class 5 interests shall continue to retain their
interests in the Debtor after the Effective Date and shall receive
any net proceeds after payment in full to all Allowed classified
and unclassified Claims. Class 5 interests are unimpaired under the
Plan and are deemed to accept the Plan.
The Debtor shall continue through a licensed real estate broker, to
market the Property in order to refinance or sell and liquidate the
Property for the highest and best price on or before February 29,
2024. Upon Closing, the proceeds of refinance or sale shall be
distributed to holders of Claims and Interests.
In the event that the Debtor has not previously refinanced the
Property or sold by a private sale, Debtor shall conduct a public
auction of the Property on or before February 29, 2024.
A full-text copy of the Disclosure Statement dated October 30, 2023
is available at https://urlcurt.com/u?l=TbR966 from
PacerMonitor.com at no charge.
Attorneys for the Debtor:
Jonathan S. Pasternak, Esq.
Robert L. Rattet, Esq.
Davidoff Hutcher & Citron LLP
120 Bloomingdale Road, Suite 100
White Plains, NY 10605
Tel: (914) 381-7400
About Williamsburg Boutique
The Debtor is a Single Asset Real Estate (as defined in 11 U.S.C.
Section 101(51B)). The Debtor owns real property located at 80
Ainslie Street, Brooklyn, NY valued at $15.7 million.
Williamsburg Boutique LLC in Bedford Hills, NY, filed its voluntary
petition for Chapter 11 protection (Bankr. S.D. Tex. Case No.
23-22587) on August 7, 2023, listing $15,700,000 in assets and
$18,227,723 in liabilities. Juda Klein as manager, signed the
petition.
Judge Sean H. Lane oversees the case.
DAVIDOFF HUTCHER & CIRTON LLP serves as the Debtor's legal counsel.
WILLOWS AT THE LAKES: Seeks 90-Day Extension to Plan Exclusivity
----------------------------------------------------------------
Willows at the Lakes - Townhomes, LLC asked the U.S. Bankruptcy
Court for the Western District of Tennessee to extend its
exclusivity period for an additional 90 days.
The Debtor was previously required to file its disclosure
statement and plan of reorganization on or before September 13,
2023.
The Debtor explained that although it has diligently attempted to
gather the information necessary to complete these documents and
file them in a timely manner, they have not been able to do so
because of the extent of the information involved.
In addition, the Debtor stated that it has entered into an
agreement with its major secured creditor to pay that creditor,
in full, within 120 days from the entry of the agreed order, so
that a disclosure statement and plan filing at this juncture is
premature.
Willows at the Lakes - Townhomes, LLC is represented by:
Craig M. Geno, Esq.
LAW OFFICES OF CRAIG M. GENO, PLLC
587 Highland Colony Parkway
Ridgeland, MS 39157
Tel: (601) 427-0048
Email: cmgeno@cmgenolaw.com
- and -
Jerome C. Payne, Esq.
PAYNE LAW FIRM
3525 Ridge Meadow Parkway, Suite 100
Memphis, TN 38115
Tel: (901) 794-0884
Email: jerpaynelaw@gmail.com
About Willows at the Lakes - Townhomes
Willows at the Lakes - Townhomes, LLC, a company in Woodland
Hills, Cal., filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. W.D. Tenn. Case No.
23-22385) on May 16, 2023, with $1 million to $10 million in both
assets and liabilities. Yehuda Netanel, managing member, signed
the petition.
Judge M. Ruthie Hagan presides over the case.
The Debtor tapped Craig M. Geno, Esq., at the Law Offices of
Craig M. Geno, PLLC and Jerome C. Payne, Esq., at Payne Law Firm
as counsel.
WOLVERINE WORLD: Egan-Jones Retains B Senior Unsecured Ratings
--------------------------------------------------------------
Egan-Jones Ratings Company on October 24, 2023, maintained its 'B'
foreign currency and local currency senior unsecured ratings on
debt issued by Wolverine World Wide, Inc. EJR also withdrew the
rating on commercial paper issued by the Company.
Headquartered in Rockford, Michigan, Wolverine World Wide, Inc.
manufactures and markets branded footwear and performance
leathers.
YI LLC: Moody's Lowers CFR to Caa1 & Alters Outlook to Negative
---------------------------------------------------------------
Moody's Investors Service downgraded YI, LLC's ("Young Innovation")
ratings, including the Corporate Family Rating to Caa1 from B3 and
the Probability of Default Rating to Caa1-PD from B3-PD. Moody's
also downgraded the ratings of the company's senior secured first
lien revolving credit facility, senior secured first lien term loan
and senior secured first lien delayed draw term loan to B3 from B2.
The outlook was revised to negative from stable.
The ratings downgrade reflects increasing refinancing risk due to
upcoming debt maturities. The senior secured first lien term loans
mature in November 2024 and the senior secured first lien revolving
credit facility expires in August 2024. Moody's calculates Young
Innovation's debt-to-EBITDA to be in the low 8 times range as of
June 30, 2023. Moody's expects leverage to remain elevated over the
next 12 to 18 months, despite expectations of modest earnings
growth in 2024. Moody's believes that the company's high leverage
and volatile refinancing conditions may challenge the company's
ability to address its refinancing needs.
Governance risk considerations are material to the rating action.
Young Innovation has aggressive financial policies including
operating with high financial leverage and a track record of
acquisitions.
RATINGS RATIONALE
Young Innovations Caa1 Corporate Family Rating is constrained by
its high financial leverage, modest size and narrow product focus
within the dental consumables segment. The rating is also
constrained by aggressive financial policies reflected in high debt
levels and elevated refinancing risk with the majority of the
company's debt coming due in about a year.
The company benefits from a stable end market and a high level of
recurring revenue with about 90% of sales derived from consumable
products. The company's products are generally used for routine
dental care, such as regular cleaning exams, and are somewhat less
susceptible to an economic downturn.
Moody's expects Young Innovation to maintain weak liquidity over
the next 12 to 18 months. Cash on balance sheet was $7 million as
of June 30, 2023; Moody's expects modest positive free cashflow
over the next 12 to 18 months. The $50 million revolving credit
facility, currently with $5 million drawn, expires in August 2024
and the first lien term loans mature in November, 2024.
In revising the outlook to negative, Moody's expects that leverage
will remain high as the company faces a maturity wall, increasing
the risk of a default.
The first lien senior secured credit facilities are rated B3, one
notch above the Caa1 Corporate Family Rating. This reflects their
first priority position in the capital structure and the benefit of
loss absorption provided by the second lien term loan, which is
unrated.
ESG CONSIDERATIONS
Young Innovation's CIS-5 (previously CIS-4) indicates that the
rating is lower than it would have been if ESG risk exposures did
not exist and that the negative impact is more pronounced than for
issuers scored CIS-4. This reflects governance risks G-5
(previously G-4) including highly aggressive financial strategy, a
track record of acquisitions, and sustained high leverage. The
company, similar to other medical device peers, also has exposure
to social risks associated with responsible production which
includes compliance with regulatory/safety requirements and
potential reputational risks arising from product recalls.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if Young Innovation successfully
refinances its capital structure and the company continues to
demonstrate earnings growth with good liquidity.
Young Innovation's ratings could be downgraded if the company's
liquidity weakens, evident with negative free cash flow. Ratings
could be downgraded if the company's operating performance
deteriorates. Lastly, ratings could also be downgraded if the
prospects for a transaction that Moody's would deem a distressed
exchange or a default were to increase.
The principal methodology used in these ratings was Medical
Products and Devices published in October 2023.
ZEP INC: Moody's Withdraws 'Caa2' CFR Following Debt Repayment
--------------------------------------------------------------
Moody's Investors Service has withdrawn Zep Inc.'s ratings
including the company's Caa2 Corporate Family Rating, the Caa2-PD
Probability of Default Rating, the B3 ratings on the company's
first-lien senior secured debt, consisting of a revolver and first
lien term loans, and the Caa3 rating on its senior secured second
lien term loan. The rating outlook was negative previously and has
also been withdrawn. The rating action follows Zep's full repayment
of its previously rated senior secured debt.
RATINGS RATIONALE
Moody's has withdrawn the ratings because Zep's debt previously
rated by Moody's has been fully repaid.
Headquartered in Atlanta, Georgia, Zep Inc. produces chemical-based
products including cleaners, degreasers, deodorizers,
disinfectants, floor finishes and sanitizers, primarily for
business and industrial use. Revenue for the 12-months ending May
31, 2023 was $669 million. Zep has been owned by private equity
firm New Mountain Capital, LLC since 2015.
ZYMERGEN INC: ARE-East River Appointed to Creditors' Committee
--------------------------------------------------------------
The U.S. Trustee for Regions 3 and 9 appointed ARE-East River
Science Park, LLC to the official committee of unsecured creditors
in the Chapter 11 cases of Zymergen, Inc. and its affiliates.
As of Nov. 1, the members of the committee are:
1. BRE-BMR 5300 Chiron, LP
Attn: Marie Lewis
4570 Executive Drive, Suite 400
San Diego, CA 92121
Phone: (858) 207-5967
Email: marie.lewis@biomedrealty.com
2. GreenLight Biosciences, Inc.
Attn: Nina Thayer
29 Hartwell Ave.
Lexington, MA 02421
Email: nina.thayer@greenlightbio.com
3. ARE-East River Science Park, LLC
c/o Alexandria Real Estate Equities, Inc.
26 N. Euclid Ave.
Pasadena, CA 91101
Phone: (626) 578-0777
Fax: (626) 578-0770
About Zymergen Inc.
Zymergen, Inc., which was founded in April 2013, is a science and
material innovation company focused on designing, developing and
commercializing bio-based products for use in a variety of
industries. It is based in Emeryville, Calif.
Zymergen and its affiliates filed Chapter 11 petitions (Bankr. D.
Del. Lead Case No. 23-11661) on Oct. 3, 2023. At the time of the
filing, Zymergen reported $100 million to $500 million in both
assets and liabilities.
Judge Karen B. Owens oversees the cases.
The Debtors tapped Morris, Nichols, Arsht & Tunnell, LLP as
bankruptcy counsel; Chilmark Partners, LLC as financial advisor;
and Intrepid Investment Bankers, LLC as investment banker. Epiq
Corporate Restructuring, LLC is the Debtors' claims and noticing
agent and administrative advisor.
The U.S. Trustee for Regions 3 and 9 appointed an official
committee to represent unsecured creditors in the Debtors' Chapter
11 cases. Andrew L Magaziner, Esq., at Young Conaway Stargatt &
Taylor, LLP is the committee's legal counsel.
[*] Forshey Prostok Named in 2024 Edition of Best Law Firms List
----------------------------------------------------------------
Forshey Prostok, LLP, a Fort Worth-based bankruptcy boutique, and
its attorneys swept a prestigious array of national accolades in
2023.
In addition to the firm's ranking earlier this year by the
prestigious Chambers & Partners, the firm recently secured a
coveted place in the 2024 edition of Best Law Firms, an exclusive
listing of the nation's most highly regarded law firms. The firm
was ranked in Tier 1 for Bankruptcy and Creditor Debtor
Rights/Insolvency and Reorganization Law and Bankruptcy Litigation
in the Dallas/Fort Worth area. It was also recognized for the same
practice areas in Houston.
Best Law Firms rankings are reserved for firms with at least one
attorney featured on the corresponding Best Lawyers in America list
for the same year -- an honor claimed by four Forshey Prostok
attorneys: name partners and veteran bankruptcy specialists J.
Robert Forshey and Jeff Prostok, partner Suzanne K. Rosen, and of
counsel Deirdre Carey Brown. All were recognized for their work in
Bankruptcy and Creditor Debtor Rights/Insolvency and Reorganization
Law, and Bankruptcy Litigation.
The prestigious Best Lawyers in America list combines independent
research with peer feedback to identify the nation's top-rated
attorneys in various practice areas.
In addition to their Best Lawyers honors, Mr. Forshey, Mr. Prostok,
and Ms. Brown were included in the 2023 list of Texas Super Lawyers
published by Thomson Reuters. Each year, no more than 5% of
attorneys in each state are selected by Super Lawyers.
In addition to the firm's Best Lawyers ranking, both Mr. Forshey
and Mr. Prostok were once again recognized by Chambers in 2023 for
their expertise on behalf of debtors and creditors. This is the
firm's 16th consecutive year on the Chambers list and the only Fort
Worth-based bankruptcy firm on the list.
"We never set out to win awards," Mr. Prostok said. "Our only goal
is to provide our clients with wise counsel and steadfast advocacy,
whether they're on the creditor or the debtor side of the ledger.
But we certainly appreciate the recognition."
Forshey Prostok LLP -- http://www.forsheyprostok.com-- provides
extensive experience in all areas of bankruptcy law from its
offices in Fort Worth, Dallas, and Houston. The firm's scope of
representation includes handling complex business reorganizations,
enforcing creditor's rights, leading commercial and
bankruptcy-related litigation, overseeing creditors' committees,
directing workouts, and closing bankruptcy acquisitions. Forshey
Prostok is ranked by the Chambers USA legal guide and received a
Tier 1 ranking from Best Law Firms for bankruptcy and
creditor/debtor rights.
[*] Sklar Kirsh LLP Named Best Law Firm by Best Lawyers
-------------------------------------------------------
California law firm Sklar Kirsh LLP on Nov. 6 disclosed that it has
been recognized by Best Lawyers(R) Best Law Firms(R) among the
nation's elite law firms for 2024. This list is compiled annually
by U.S. News & World Report and Best Lawyers(R).
"Rankings by Best Law Firms(R) are some of the most trusted
nationwide classifications available for law firms," states the
publisher. "Firms recognized in Best Law Firms are identified for
their professional excellence with consistently positive feedback
from clients and peers. Only 4% of firms in the United States are
considered for a Best Law Firms ranking, highlighting each award's
prestige."
Sklar Kirsh's practices include corporate, real estate,
entertainment, litigation and bankruptcy law founded by attorneys
from nationally and internationally recognized firms who provide
top-tier legal services in an entrepreneurial, sophisticated and
focused manner.
Sklar Kirsh LLP -- http://www.SklarKirsh.com-- is a boutique law
firm that provides sophisticated and expert advice in the areas of
corporate, real estate, bankruptcy, and entertainment law as well
as commercial, real estate and entertainment litigation.
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
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public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
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assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
On Thursdays, the TCR delivers a list of recently filed
Chapter 11 cases involving less than $1,000,000 in assets and
liabilities delivered to nation's bankruptcy courts. The list
includes links to freely downloadable images of these small-dollar
petitions in Acrobat PDF format.
Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.
Monthly Operating Reports are summarized in every Saturday edition
of the TCR.
The Sunday TCR delivers securitization rating news from the week
then-ending.
TCR subscribers have free access to our on-line news archive.
Point your Web browser to http://TCRresources.bankrupt.com/and use
the e-mail address to which your TCR is delivered to login.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Philadelphia, Pa., USA.
Randy Antoni, Jhonas Dampog, Marites Claro, Joy Agravante,
Rousel Elaine Tumanda, Joel Anthony G. Lopez, Psyche A. Castillon,
Ivy B. Magdadaro, Carlo Fernandez, Christopher G. Patalinghug, and
Peter A. Chapman, Editors.
Copyright 2023. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
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re-mailing and photocopying) is strictly prohibited without prior
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*** End of Transmission ***