/raid1/www/Hosts/bankrupt/TCR_Public/231110.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Friday, November 10, 2023, Vol. 27, No. 313
Headlines
1157 MYRTLE: Voluntary Chapter 11 Case Summary
1290 RIVER ROAD: Case Summary & Three Unsecured Creditors
3071 RIVER ROAD: Case Summary & Three Unsecured Creditors
34 INNISBROOK: Case Summary & Four Unsecured Creditors
560 SEVENTH: Taps Goldberg Weprin Finkel Goldstein as Counsel
8400 RIVER ROAD: Case Summary & Two Unsecured Creditors
ABERDEEN ENTERPRISES: Taps Goldberg Weprin Finkel as Legal Counsel
ACJK INC: Fine-Tunes Plan Documents
AEROCISION PARENT: Gets $40.2M Bid from Cadence in Ch. 11 Auction
AGILETHOUGHT: Bidder Intends to Take on Debt of Mexican Unit
ALLIED HEALTHCARE: Unsecureds to Recover 45% to 50% in Plan
ALTAGAS LTD: Fitch Assigns 'BB+' Rating on Series 3 Sub. Notes
ALTISOURCE PORTFOLIO: CEO, CFO Temporarily Modify Compensation
ALTISOURCE PORTFOLIO: Top Execs OK Temporary Salary Adjustment
AMERIFIRST FINANCIAL: Court Orders Mediation With Creditors
ANAGRAM HOLDINGS: Hits Chapter 11 Bankruptcy Protection
ARCHBISHOP OF BALTIMORE: Taps Gallagher Evelius & Jones as Counsel
ARCHDIOCESE OF BALTIMORE: Gets More Time to Settle with Victims
ASK FOR COOL: Seeks to Hire Lorium PLLC as Legal Counsel
ASTRA SPACE INC: Closes Additional $13.4 Million Debt Financing
AUDACY INC: S&P Downgrades ICR to 'D' on Missed Interest Payments
AVALON MOBILE: Seeks to Hire Scroggins & Williamson as Attorney
AXALTA COATING: Moody's Alters Outlook on 'Ba3' CFR to Positive
B & M REALTY: Unsecureds to be Paid in Full in Plan
BAY PITA: Case Summary & One Unsecured Creditor
BEASLEY BROADCAST: Swings to $67.5MM Net Loss in 2023 Q3
BLACKBRUSH OIL: S&P Withdraws 'CCC+' Issuer Credit Rating
BLUE DOLPHIN: Veritex Agrees to Extend Forbearance Until Dec. 29
BUCKEYE PARTNERS: Moody's Rates New $1BB 1st Lien Term Loan 'Ba1'
CACTUS LAND: Seeks Cash Collateral Access, $75,000 DIP Loan
CINEMARK HOLDINGS: Reports Third Quarter 2023 Results
CLEAN ENERGY: Designates 3.5M Shares as Series E Preferred Stock
CLOVER FOOD LAB: Boston Eatery Hits Chapter 11 Bankruptcy
COLPITTS SUNSET: Case Summary & 30 Largest Unsecured Creditors
COMMUNITY HEALTH: Reports $91MM Net Loss in 2023 Q3
CYXTERA TECHNOLOGIES: Selling All Assets to Brookfield for $775MM
DIAMOND SPORTS: Reaches Chapter 11 NBA Coverage Deal
DIOCESE OF BUFFALO: Committee Taps Burns Bair as Insurance Counsel
DIOCESE OF SAN FRANCISCO: Comm. Taps Berkeley as Financial Advisor
DRW HOLDINGS: Moody's Affirms Ba2 CFR & Alters Outlook to Negative
EAGLE MECHANICAL: Taps Dentons Bingham Greenebaum as Mediator
EAST CENTRAL VERMONT: S&P Assigns 'BB' Rating on 2023A Bonds
ELEMENT CONSTRUCTION: Case Summary & 20 Top Unsecured Creditors
FREDDIE MAC: Announces Tender Offer for STACR Notes
FTX GROUP: DOJ Says Bankruptcy Examiner Needed to Probe Collapse
FTX TRADING: Acaena, GGC Int'l. Step Down as Committee Members
GLOBALSTAR INC: Incurs $6.2 Million Net Loss in Third Quarter
GRUN PROPERTIES: Voluntary Chapter 11 Case Summary
HALMAR LLC: Unsecureds to be Paid in Full over 60 Months
HARBOUR GRACE: Commences CCAA Proceedings
HAWK LOGISTICS: U.S. Trustee Unable to Appoint Committee
HEYWOOD HEALTHCARE: Foley & Lardner as Bankruptcy Counsel
JSCO ENTERPRISES: Case Summary & Seven Unsecured Creditors
JUSTHAM CUSTOM: Bankr. Administrator Unable to Appoint Committee
LAKEVILLE FARMS: Gets OK to Hire Freeman & Goldberg as Accountant
LEXARIA BIOSCIENCE: To Raise $444,865 From Warrant Exercise
LORDSTOWN MOTORS: Agrees to Include Investors in Suit vs. Foxconn
LTL MANAGEMENT: Talc Claimant Attorneys Get Reduced Fees
LUMEN TECHNOLOGIES: To Permit Creditors in Restructuring Plan
MALLINCKRODT PLC: Receives Controlled Substances-Related Subpoena
MBIA INC: Posts $185 Million Net Loss in Third Quarter
MELLON BUILDING: Voluntary Chapter 11 Case Summary
MV REALTY PBC: Gets OK to Hire Seese P.A. as Legal Counsel
NORTHSTAR GROUP: S&P Rates New $710MM Sec. 1st-Lien Term Loan 'B+'
NOVA CHEMICALS: Moody's Rates New $400MM First Lien Notes 'Ba1'
NOVA CHEMICALS: S&P Rates New US$400MM Senior Secured Notes 'BB+'
NUZEE INC: Masateru Higashida Has 12.2% Stake as of Oct. 20
PAD SILVERTHORNE: U.S. Trustee Appoints Creditors' Committee
PANTHEON GASTRONOMY: Gets OK to Tap Joseph Ray Delaney as Appraiser
PATHWAYS TO GROWTH: Taps Moon Wright & Houston as Legal Counsel
PREDICTIVE TECHNOLOGY: Voluntary Chapter 11 Case Summary
PREMIER KINGS: Bankruptcy Administrator Appoints Creditors' Panel
PREMIER KINGS: Seeks to Hire Kurtzman Carson as Claims Agent
PROMEDICA HEALTH: Fitch Affirms 'BB-' IDR, Outlook Stable
PROPERTY ADVOCATES: Bast Amron Represents AG-EREP & Prisa Ponce
QUANERGY SYSTEMS: Chapter 11 Plan Approved After Merger Deal
QURATE RETAIL: Chairman Maffei Holds 1.3% of Class A Common Shares
R&D TRANSPORT: Voluntary Chapter 11 Case Summary
RITE AID: CDS Auction Gives Swaps Holders 98% Payout
ROY BLACKWELL: Seeks to Hire Luxman Law Firm as Legal Counsel
SEALED AIR: Moody's Rates New Senior Unsecured Notes 'Ba2'
SEALED AIR: S&P Rates New Senior Unsecured Notes Due 2031 'BB+'
SERVICE PROPERTIES: Moody's Rates New Secured 1st Lien Notes 'B1'
SERVICE PROPERTIES: S&P Assigns Prelim 'BB' Rating on Sec. Notes
SHIFT TECHNOLOGIES: Hires Keller Benvenutti as Bankruptcy Counsel
SHIFT TECHNOLOGIES: Seeks to Hire Omni as Administrative Agent
SHIFT TECHNOLOGIES: Taps Bendis Cos. as Auctioneer
SHIFT TECHNOLOGIES: U.S. Trustee Appoints Creditors' Committee
SIGNIA LTD: Seeks to Hire Perlman & Perlman as Special Counsel
SIGNIA LTD: Seeks to Tap Copilevitz Lam & Raney as Special Counsel
SIGNIA LTD: Taps Brownstein Hyatt Farber Schreck as Special Counsel
SLEEP GALLERIA: Seeks to Hire Lamberth Cifelli as Legal Counsel
SMILEDIRECTCLUB INC: Hires FTI Consulting as Financial Advisor
SMILEDIRECTCLUB INC: Hires Jackson Walker as Conflicts Counsel
SMILEDIRECTCLUB INC: Rival Align Objects to Insiders' Financing
SMILEDIRECTCLUB INC: Taps Centerview Partners as Investment Banker
SMILEDIRECTCLUB INC: Taps PricewaterhouseCoopers as Tax Accountant
SONOMA PHARMACEUTICALS: May Sell $51.3M Worth of Securities
SPIRIT AEROSYSTEMS: Moody's Rates New $1.2BB 2nd Lien Notes 'B3'
SPIRIT AEROSYSTEMS: S&P Affirms 'B' ICR on Weak Cash Flow
STILLPOINT INC: Seeks to Tap Kaplan Johnson Abate & Bird as Counsel
STORNOWAY DIAMONDS: Liquidity Woes Prompt CCAA Re-filing
SUNLIGHT FINANCIAL: Unsecureds Will Get 100% in Prepackaged Plan
T&J OF BROOKSVILLE: Case Summary & 10 Unsecured Creditors
TEHUM CARE: Wants to Redo Mediation After Exit of Bankruptcy Judge
THREE GUYS: Seeks to Hire Brian K. McMahon as Bankruptcy Counsel
TIMOTHY HILL: Seeks Approval to Hire Berger Fischoff as Attorney
TRANSPORT SERVICE: Voluntary Chapter 11 Case Summary
TRI-STATE PAPER: Seeks Approval to Hire an Accountant
TRI-STATE PAPER: Seeks to Hire Cibik Law as Bankruptcy Counsel
TURNING POINT: Moody's Alters Outlook on 'B2' CFR to Positive
U STREET: Seeks to Hire Gabriel Liberman as Bankruptcy Counsel
UPHEALTH HOLDINGS: Seeks Bonuses Retention in Chapter 11
USEFUL TAXI: Seeks to Hire Thomas Farinella as Bankruptcy Counsel
VESTTOO LTD: Committee Taps Alvarez & Marsal as Financial Advisor
WATER GREMLIN: U.S. Trustee Appoints Creditors' Committee
WEBSTER UNIVERSITY: Moody's Lowers Issuer & Debt Ratings to Ba3
WEWORK INC: Intends to Terminate Leases of At Least 69 Properties
WEWORK INC: Nov. 13 Deadline for Panel Questionnaires
WH INTERMEDIATE: Moody's Affirms 'B2' CFR, Outlook Remains Stable
WHOLE COFFEE: Case Summary & 20 Largest Unsecured Creditors
YI GROUP: S&P Downgrades ICR to 'CCC' on Near-Term Debt Maturities
[^] BOOK REVIEW: Oil Business in Latin America: The Early Years
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1157 MYRTLE: Voluntary Chapter 11 Case Summary
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Debtor: 1157 Myrtle LLC
199 Lee Avenue, #693
Brooklyn, NY 11211
Business Description: 1157 Myrtle is engaged in activities related
to real estate.
Chapter 11 Petition Date: November 9, 2023
Court: United States Bankruptcy Court
Eastern District of New York
Case No.: 23-44111
Debtor's Counsel: Isaac Nutovic, Esq.
LAW OFFICES OF ISAAC NUTOVIC
261 Madison Avenue, 26th Floor
New York NY 10016
Tel: 917-922-7963
Email: inutovic@nutovic.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Ephraim Diamond as Manager of 1157
Myrtle Holdings LLC, Manager of the Debtor.
The Debtor failed to include in the petition a list of its 20
largest unsecured creditors.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/G6SEHLI/1147_Myrtle_LLC__nyebke-23-44111__0001.0.pdf?mcid=tGE4TAMA
1290 RIVER ROAD: Case Summary & Three Unsecured Creditors
---------------------------------------------------------
Debtor: 1290 River Road PS LLC, a Series of RRED HC, LLC
8511 River Rd
New Braunfels, TX 78132-3127
Chapter 11 Petition Date: November 6, 2023
Court: United States Bankruptcy Court
Western District of Texas
Case No.: 23-51534
Judge: Hon. Craig A. Gargotta
Debtor's Counsel: Ronald Smeberg, Esq.
THE SMEBERG LAW FIRM
4 Imperial Oaks
San Antonio TX 78248-1609
Tel: (210) 695-6684
Email: ron@smeberg.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Robert Kane as manager.
A full-text copy of the petition containing, among other items, a
list of the Debtor's three unsecured creditors is available for
free at PacerMonitor.com at:
https://www.pacermonitor.com/view/5QOOFWI/1290_River_Road_PS_LLC_a_Series__txwbke-23-51534__0001.0.pdf?mcid=tGE4TAMA
3071 RIVER ROAD: Case Summary & Three Unsecured Creditors
---------------------------------------------------------
Debtor: 3071 River Road PS, LLC a Series of RRED HC, LLC
8511 River Rd
New Braunfels, TX 78132-3127
Chapter 11 Petition Date: November 6, 2023
Court: United States Bankruptcy Court
Western District of Texas
Case No.: 23-51536
Judge: Hon. Craig A. Gargotta
Debtor's Counsel: Ronald Smeberg, Esq.
THE SMEBERG LAW FIRM
4 Imperial Oaks
San Antonio TX 78248-1609
Tel: (210) 695-6684
Email: ron@smeberg.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Robert Kane as manager.
A full-text copy of the petition containing, among other items, a
list of the Debtor's three unsecured creditors is available for
free at PacerMonitor.com at:
https://www.pacermonitor.com/view/XJFPYCY/3071_River_Road_PS_LLC_a_Series__txwbke-23-51536__0001.0.pdf?mcid=tGE4TAMA
34 INNISBROOK: Case Summary & Four Unsecured Creditors
------------------------------------------------------
Debtor: 34 Innisbrook, LLC
900 S. Las Vegas Blvd., #810
Las Vegas, NV 89101
Business Description: The Debtor owns a rental property located at
34 Innisbrook Avenue, Las Vegas, NV, valued
at $3.2 million.
Chapter 11 Petition Date: November 6, 2023
Court: United States Bankruptcy Court
District of Nevada
Case No.: 23-14929
Judge: Hon. Hilary L. Barnes
Debtor's Counsel: Roger P. Croteau, Esq.
ROGER P. CROTEAU & ASSOCIATES LTD.
2810 W. Charleston Blvd., Ste. 67
Las Vegas, NV 89102
Tel: (702) 254-7775
Fax: (702) 228-7719
Email: croteaulaw@croteaulaw.com
Total Assets: $3,178,809
Total Liabilities: $7,717,534
The petition was signed by Iyad Haddad as Mgr, Resource Group,
LLC., Manager of Debtor.
A full-text copy of the petition containing, among other items, a
list of the Debtor's four unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/IGUBPKA/34_INNISBROOK_LLC__nvbke-23-14929__0001.0.pdf?mcid=tGE4TAMA
560 SEVENTH: Taps Goldberg Weprin Finkel Goldstein as Counsel
-------------------------------------------------------------
560 Seventh Avenue Owner Secondary LLC and 560 Seventh Avenue Owner
Primary LLC seek approval from the U.S. Bankruptcy Court for the
Southern District of New York to hire Goldberg Weprin Finkel
Goldstein LLP as their bankruptcy counsel.
The Debtor requires legal counsel to:
a. provide the Debtor with all necessary representation in
connection with this Chapter 11 case, as well as the Debtor's
responsibilities as debtor-in-possession;
b. represent the Debtor in all proceedings before the U.S.
Bankruptcy Court and the Office of the U.S. Trustee;
c. review, prepare and file all necessary legal papers,
applications, motions, objections, adversary proceedings, and
reports on the Debtor's behalf; and
d. render all other legal services required by the Debtor in
negotiating a mortgage restructuring the secured debt and achieving
confirmation of a plan of reorganization.
The firm will be paid at these rates:
Partners $685 per hour
Associates $275 to $500 per hour
In addition, the firm will receive reimbursement for out-of-pocket
expenses incurred.
The firm received a retainer of $25,000.
Kevin Nash, Esq., a partner at Goldberg, 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:
Kevin J. Nash, Esq.
GOLDBERG WEPRIN FINKEL GOLDSTEIN, LLP
1501 Broadway, 22nd Floor
New York, NY 10036
Telephone: (212) 221-5700
Email: knash@gwfglaw.com
About 560 Seventh Avenue Owner Primary
560 Seventh Avenue Owner Primary LLC owns and operates the
Margaritaville Resort Times Square Hotel located at 560 Seventh
Avenue, New York, NY. The Debtor sought protection under Chapter 11
of the U.S. Bankruptcy Code (Bankr. S.D. N.Y. Case No. 23-11289) on
August 12, 2023. In the petition signed by Stehian Pomerantz,
president, the Debtor disclosed up to $500 million in both assets
and liabilities.
Judge Philip Bentley oversees the case.
Kevin J. Nash, Esq., at GOLDBERG WEPRIN FINKEL GOLDSTEIN LLP,
represents the Debtor as legal counsel.
8400 RIVER ROAD: Case Summary & Two Unsecured Creditors
-------------------------------------------------------
Debtor: 8400 River Road PS LLC, a Series of RRED HC, LLC
8511 River Rd
New Braunfels, TX 78132-3127
Chapter 11 Petition Date: November 6, 2023
Court: United States Bankruptcy Court
Western District of Texas
Case No.: 23-51537
Judge: Hon. Craig A. Gargotta
Debtor's Counsel: Ronald Smeberg, Esq.
THE SMEBERG LAW FIRM
4 Imperial Oaks
San Antonio TX 78248-1609
Tel: (210) 695-6684
Email: ron@smeberg.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Robert Kane as manager.
A full-text copy of the petition containing, among other items, a
list of the Debtor's two unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/XXZLSAI/8400_River_Road_PS_LLC_a_Series__txwbke-23-51537__0001.0.pdf?mcid=tGE4TAMA
ABERDEEN ENTERPRISES: Taps Goldberg Weprin Finkel as Legal Counsel
------------------------------------------------------------------
Aberdeen Enterprises, Inc. and Brickchurch Enterprises, Inc. seek
approval from the U.S. Bankruptcy Court for the Eastern District of
New York to employ Goldberg Weprin Finkel Goldstein LLP as its
bankruptcy counsel.
The Debtor requires legal counsel to:
a. provide the Debtor with all necessary representation in
connection with this Chapter 11 case, as well as the Debtor's
responsibilities as debtor-in-possession;
b. represent the Debtor in all proceedings before the U.S.
Bankruptcy Court and the Office of the U.S. Trustee;
c. review, prepare and file all necessary legal papers,
applications, motions, objections, adversary proceedings, and
reports on the Debtor's behalf; and
d. render all other legal services required by the Aberdeen
Debtor in connection with pursuit a sale of the 366 Property.
The firm will be paid at these rates:
Partners $685 per hour
Associates $275 to $500 per hour
In addition, the firm will receive reimbursement for out-of-pocket
expenses incurred.
The firm received a retainer of $10,000.
Kevin Nash, Esq., a partner at Goldberg, 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:
Kevin J. Nash, Esq.
GOLDBERG WEPRIN FINKEL GOLDSTEIN, LLP
1501 Broadway, 22nd Floor
New York, NY 10036
Telephone: (212) 221-5700
Email: knash@gwfglaw.com
About Aberdeen Enterprises and
Brickchurch Enterprises
Brickchurch Enterprises, Inc. filed a petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.Y. Case No.
22-70914) on April 30, 2022, with $50 million to $100 million in
both assets and liabilities. On Aug. 2, 2023, Aberdeen Enterprises,
Inc. filed Chapter 11 petition (Bankr. E.D.N.Y. Case No. 23-72834),
with $50 million to $100 million in both assets and liabilities.
The cases are jointly administered under Case No. 23-72834.
Judge Alan S. Trust oversees the cases.
Kevin J. Nash, Esq., at Goldberg Weprin Finkel Goldstein, LLP and
Camisha L. Simmons, Esq. at Simmons Legal, PLLC serve as attorneys
for Aberdeen and Brickchurch, respectively.
ACJK INC: Fine-Tunes Plan Documents
-----------------------------------
ACJK, Inc., submitted a Second Amended Disclosure Statement in
support of Liquidating Plan of Reorganization dated October 31,
2023.
Debtor operated on a profitable basis from 1999 through 2015.
However, Debtor's profits began to decline in 2016 for no apparent
reason.
Debtor ultimately discovered the answer: the amount of money
deducted by pharmaceutical middlemen had increased dramatically
after Debtor terminated its franchise agreement with Medicap,
increasing from $83,610 in 2018 to $302,282 in 2021.
In response to Debtor's adversary complaint, Cardinal turned over
$126,338 in frozen and/or intercepted pre-petition accounts
receivable. As of August 31, 2023, Debtor has collected $210,278.64
in accounts receivable.
Debtor's plan provides for (1) collection of installments from the
inventory purchaser totaling $82,500, (2) collection of accounts
receivable in the ordinary course of business up to $325,021, and
(3) liquidation of any fixtures and/or equipment for $6,866. This
money will be paid to the holders of allowed Secured Claims in
priority and amount to be determined by the Bankruptcy Court, after
deduction of $10,000 to satisfy Debtor's fiduciary obligations (the
Fiduciary Fund), a $10,000 retainer paid to special counsel for the
Rapid Finance litigation, and $50,000 to fund administration of the
Estate and litigation of Debtor's causes of action (the Litigation
Fund).
Debtor's plan provides for the surrender of the Computer Equipment
to Huntington Bank and Home Trust Bank in satisfaction of their
secured claims. Subsequent to termination of business operations,
Debtor's principal has personally handled everything for the
corporation without reimbursement, compensation, or payment of
post-petition rent from Debtor.
Without the recovery of substantial net proceeds from its causes of
action, Debtor anticipates there will be no money to pay
undersecured and unsecured creditors because the projected proceeds
of liquidation of Debtor's assets would not satisfy two of the
three creditors competing for the top lien priority (FC $205,794,
SBA $708,135, Rapid Finance $56,723). The Litigation Fund is the
only means to maximize the value of Debtor's assets and the
recovery to holders of undersecured and unsecured claims.
Like in the prior iteration of the Plan, holders of Class 4 General
Unsecured Claims shall share in the Unsecured Claim Fund on a pro
rata basis.
Means for Plan Implementation
Liquidation of Assets:
* The Debtor owns Inventory, Equipment, Accounts Receivable,
and pre-petition Causes of Action against Rapid, Cardinal, and the
PBM's.
* Debtor liquidated the Inventory.
* Debtor's interest in the Computer Equipment was abandoned to
the Class 2E and 2F Creditors.
* Debtor shall liquidate and/or dispose of the Equipment in
the most economical means available.
* Debtor shall collect Accounts Receivable.
* Debtor shall litigate and/or settle its Causes of Action for
the benefit of the Creditors.
Litigation Fund:
* Debtor has pre-petition Causes of Action against Rapid
Finance, Cardinal, and the PBM's.
* Debtor employed special counsel to litigate and/or settle
its cause of action against Rapid Finance. On August 11, 2023,
Debtor filed an application to Employ Eric Carlson, Christopher
Petri, and the law firm of Byron Carlson Petri & Kalb, LLC as
special counsel to pursue Debtor's cause of action against Rapid
Finance. The court approved the application and Debtor paid a
$10,000 retainer to secure payment of costs and fees.
* Debtor shall reserve $50,000.00 from the Chapter 11 estate
for payment of costs and attorney’s fees required to litigate
and/or settle Debtor's Causes of Action and to pay
post-confirmation expenses required to administer the Plan (the
Litigation Fund).
* From the Litigation Fund, Debtor shall pay necessary legal
expenses and attorney's fees incurred and to be incurred in the
litigation of Debtor's causes of action and to administer the
Plan.
* Debtor shall employ such professionals and incur such legal
expenses as are necessary to litigate and/or settle Debtor's pre
petition causes of action, subject to approval of the Court. Debtor
shall request Court approval of special counsel to represent it in
the pre-petition causes of action on a contingency basis. If Debtor
is unable to secure competent counsel on a contingency basis, then
Debtor shall request Court approval of such other fee agreement as
is required to effectively prosecute Debtor’s Causes of Action.
* Any net proceeds attributable to Debtor's Causes of Action
shall be paid into the Litigation Fund. If Debtor recovers more
than $100,000 in net proceeds from one or more of its Causes of
action, then Debtor shall pay $50,000 of those proceeds to the
creditor(s) holding allowed Secured Claims. The purpose of this
$50,000 payment is to reimburse the lienholders for the $50,000
litigation fund.
* After recovery and payment of $50,000 for the benefit of the
lienholders, and payment of allowed post-confirmation expenses and
Deferred Administrative Priority Claims, any net proceeds
attributable to Debtor's causes of action shall be paid to the
holders of undersecured and unsecured claims on a pro rata basis as
provided for in Part V of this Plan, subject to available funds.
* Upon final resolution of all Debtor's Causes of Action, if
Debtor does not recover more than $100,000 in net proceeds from one
or more of its Causes of Action, then (a) Debtor shall pay all
post-confirmation expenses and professional fees from the
Litigation Fund on a pro rata basis, subject to available funds.
(b) The balance remaining after payment of allowed post
confirmation expenses, if any, shall be paid to the holders of
allowed Secured Claims on a pro rata basis, subject to available
funds. The creditors holding allowed Secured Claims shall have no
recourse against Debtor if it fails to reimburse the lienholders
for the $50,000 Litigation Fund.
* Debtor shall administer disbursements from the Litigation
Fund, including payment of post-confirmation legal fees and
expenses and, to the extent of available funds, deferred
administrative expenses. Debtor's bankruptcy attorney, Steven T.
Stanton, shall defer payment of 50% of all approved pre
confirmation attorney's fees unless and until Debtor has recovered
sufficient proceeds from its causes of action to pay such expenses
from the Litigation Fund.
* All pre-confirmation claims for deferred administrative
expenses must be filed and approved by the Court. Unless and until
Debtor reimburses $50,000 to the lienholders from the Litigation
Fund, Debtor shall submit to the holders of Allowed Secured Claims
(1) monthly reports itemizing any amounts paid from Litigation Fund
the previous month, and (2) at least fifteen days prior to payment
of post-confirmation claims for professional fees, an itemized
statement to the holders of Allowed Secured Claims.
* Payment of allowed claims for deferred administrative
expenses shall be contingent upon Debtor's recovery of more than
$50,000 from its causes of action and reimbursement of $50,000 to
the creditors holding Allowed Secured Claims. Allowed claims for
deferred administrative expenses shall have priority over allowed
undersecured and unsecured claims. In the event the Litigation Fund
is insufficient to pay all allowed claims for deferred
administrative expenses, then the holders of such claims shall
share the remaining proceeds on a pro rata basis. The holders of
allowed claims for deferred administrative expenses shall waive
their right to payment of any amounts that remain unpaid after the
Litigation Fund has been exhausted.
Fiduciary Fund:
* Debtor has a continuing fiduciary duty to maintain and
protect customer files and private information.
* Debtor shall reserve $10,000.00 from the Chapter 11 estate
for payment of necessary expenses associated with the maintenance
and protection of customer files and private information (the
Fiduciary Fund).
* Debtor shall pay such expenses as are reasonably required to
maintain and protect Debtor's customer files and private
information.
Unsecured Claim Fund:
* The Unsecured Claim Fund shall consist of the net proceeds
generated from the litigation and/or settlement of Debtor's pre
petition causes of action after deduction of litigation costs,
including the $50,000 litigation fund.
* The first $50,000 of the net proceeds generated from
Debtor's pre-petition causes of action, if any, shall be paid to
the Creditor(s) holding allowed Secured Claims.
A full-text copy of the Second Amended Disclosure Statement dated
October 31, 2023 is available at https://urlcurt.com/u?l=Pne6vY
from PacerMonitor.com at no charge.
About ACJK Inc.
ACJK Inc., d/b/a Medicap Pharmacy --
https://granitecity.medicap.com/ -- is a local pharmacy that offers
services such as immunizations, medication therapy management,
multi-dose packaging, medication synchronization, important health
screenings, and expert care.
ACJK Inc. filed a petition for relief under Chapter 11 of the
Bankruptcy Code (Bankr. S.D. Ill. Case No. 23-30045) on Jan. 30,
2023. In the petition filed by Mark Allen, manager, the Debtor
reported between $1 million and $10 million in both assets and
liabilities.
Judge Laura K. Grandy oversees the case.
The Debtor is represented by Michael J. Benson, Esq., at A
Bankruptcy Law Firm, LLC.
AEROCISION PARENT: Gets $40.2M Bid from Cadence in Ch. 11 Auction
-----------------------------------------------------------------
Alex Wittenberg of Law360 reports that airplane parts supplier
AeroCision said Wednesday, November 8, 2023, that it selected a
$40. 2 million cash offer for its assets from aerospace company
Cadence-Southwick Inc. after the California-based bidder beat out
AeroCision's stalking horse bidder in a Chapter 11 auction.
About AeroCision Parent
AeroCision Parent, LLC and affiliates are are part of an
organization known as Bromford Group, a global manufacturing
business in the aerospace, defense, and power generation industry
that was founded in the United Kingdom in 1973. Bromford supplies
turbine engine and related components to all major OEM's, including
many of the industry's most prominent manufacturers, like General
Electric Aviation, Pratt & Whitney, and Rolls Royce, among others.
The manufacturers use Bromford's components to manufacture engines
for aircraft and other vehicles.
The Debtors sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. D. Del. Lead Case No. 23-11032) on July 31, 2023. In
the petition signed by David Nolletti, chief restructuring officer,
the Debtor disclosed up to $500 million in both assets and
liabilities.
Judge Karen B. Owens oversees the case.
Young Conaway Stargatt & Taylor, LLP represents the Debtors as
legal counsel, Riveron Consulting, LLC as restructuring advisor,
Jefferies LLC as investment banker, and Epiq Corporate
Restructuring, LLC as notice, claims, solicitation and balloting
agent and administrative advisor.
AGILETHOUGHT: Bidder Intends to Take on Debt of Mexican Unit
------------------------------------------------------------
Rick Archer of Law360 reports that the stalking horse bidder for
AgileThought Inc. told a Delaware bankruptcy judge Monday that it's
lowering its offer by $25 million in exchange for taking on the
liabilities for the technology company's Mexican affiliates that
scuttled the company's pre-Chapter 11 sale plans.
About AgileThought
AgileThought is a pure play leading provider of agile software
development at scale, end-to-end digital transformation and
technology consulting services with diversity across markets and
industries. For years, Fortune 1000 companies have trusted
AgileThought to solve their digital challenges and optimize
mission-critical systems to drive business value. AgileThought's
solution architects, cloud specialists, data & AI scientists,
engineers, transformation consultants, automation specialists, and
other experts located across the United States and across Latin
America deliver next-generation software solutions that accelerate
digitization across the enterprise.
AgileThought Inc. sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Del. Case No. 23-11305) on Aug. 28,
2023. In the petition filed by James S. Feltman, as chief
restructuring officer, the Debtor reported assets and liabilities
between $100 million and $500 million.
The Honorable Bankruptcy Judge J. Kate Stickles oversees the case.
The Debtor tapped POTTER ANDERSON & CORROON LLP and HUGHES HUBBARD
& REED LLP as bankruptcy counsel. The Debtor also engaged as
GARRIGUES MEXICO, S.C. as Mexican restructuring counsel, TENEO
CAPITAL LLC as financial advisor, and GUGGENHEIM SECURITIES, LLC,
as investment banker. KURTZMAN CARSON CONSULTANTS LLC is the
claims agent.
ALLIED HEALTHCARE: Unsecureds to Recover 45% to 50% in Plan
-----------------------------------------------------------
Allied Healthcare Products, Inc., filed with the U.S. Bankruptcy
Court for the Eastern District of Missouri a First Amended
Disclosure Statement describing First Amended Plan of Liquidation
dated October 31, 2023.
The Debtor is a Delaware corporation that historically operated as
a manufacturer and provider of healthcare equipment. Its products
were sold under a variety of brand names including Chemetron by
Allied, Shuco by Allied, Gomco by Allied, Timeter by Allied, B&F
Medical by Allied, Life Support Products by Allied, Lif-O-Gen,
Litholime and Carbolime.
The products Allied has historically manufactured, sold, and
distributed include, among other things, stationary and portable
ventilators, carbon dioxide absorbent, suction regulators and
aspirators, patient care devices primarily associated with medical
gas delivery, suction systems, home healthcare, and emergency
products.
Through the Debtor's efforts and its ability to achieve going
concern sales of its business assets, amounts estimated to be
available for distribution to unsecured creditors have
approximately doubled since the Petition Date.
This is a liquidating plan pursuant to which all of the Debtor's
assets shall be distributed to its creditors and the Debtor will
cease any remaining business operations. The Debtor has
administrative and priority creditors who will be paid in full on
the Effective Date unless they agree to different treatment. There
will be 4 classes of creditors to be paid under the Plan, as it may
be amended from time to time. Debtor has assets consisting
primarily of cash generated through the sales of its New York and
St. Louis businesses, as well as other cash generated through
operations, recovered as refunds, and other matters.
On June 30, 2023, the Court approved the sale of substantially all
of the assets of the Debtor pursuant to two going concern sales,
one of the Debtor's St. Louis business assets and another of the
Debtor's New York business assets. The combined purchase prices for
the two going concern sales totaled $8,988,974.
Class 1 consists of General Unsecured Creditors. Unsecured creditor
Claims either on file with the Court or scheduled by the Debtor as
liquidated, non-contingent, and which are not disputed are
estimated to total roughly $4.5 million, excepting a Claim asserted
for unfunded pension liability in the original amount of
$17,500,000, and which was later amended to reflect a claim amount
of $9,249,240 ("Union Claim"). The Debtor has recently reached an
agreement with the Union and has filed with the Court a motion for
approval of that agreement. If approved by the Court, the Union
Claim would be further reduced to the Allowed amount of
$5,005,865.
The Debtor estimates there will be not less than $4.6 million in
cash remaining in the estate from which a distribution to Class 1
can be made. Upon Court approval of the resolution the Debtor has
reached regarding the Union Claim, the Debtor estimates that it
will be in position to make pro rata distributions to Class 1 of
approximately 45% to 50% of general unsecured Allowed Claims.
Payments and distributions under the Plan will be funded by the
distribution of the Debtor's cash currently on hand, or in the
future to be collected. There are no remaining real or personal
property assets to be liquidated, and the Debtor does not, at
present, contemplate the initiation of litigation likely to yield
significant net recoveries for creditors.
As of September 25, 2023, the Debtor had an available cash balance
of $5,397,115 in the Allied DIP Account. As of the date of this
Disclosure Statement, there are fee applications filed and pending
for various estate professionals seeking allowance and payment of
fees and reimbursement of expenses in the total combined amount of
$435,222.95. Of this amount, and pursuant to the interim
compensation procedures approved by the Court, $378,350.65 has
already been paid leaving $86,883.30 remaining to be paid.
A full-text copy of the First Amended Disclosure Statement dated
October 31, 2023 is available at https://urlcurt.com/u?l=ccaWt8
from PacerMonitor.com at no charge.
Attorneys for Debtor:
SPENCER FANE, LLP
Eric C. Peterson, Esq.
Email: epeterson@spencerfane.com
1 N. Brentwood Blvd, Suite 1200
Saint Louis, MO 63105
Phone: (314) 863-7733
Fax: (816) 862-4656
About Allied Healthcare Products
Allied Healthcare Products Inc. is a manufacturer of AHP300
transport ventilator, carbon dioxide absorbent, suction regulators
and aspirators, ventilators, emergency products, and medical gas
systems. The company is based in Saint Louis, Mo.
Allied Healthcare Products filed a petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. E.D. Mo. Case No.
23-41607) on May 8, 2023, with $10 million to $50 million in both
assets and liabilities. Akash Amin, president and chief
restructuring officer, signed the petition.
Judge Brian C. Walsh oversees the case.
The Debtor tapped Spencer Fane LLP as bankruptcy counsel; McMahon
Berger, P.C. as labor counsel; MorrisAnderson & Associates, Ltd. As
restructuring management and financial advisor; and Ravinia
Capital, LLC as broker and investment banker.
ALTAGAS LTD: Fitch Assigns 'BB+' Rating on Series 3 Sub. Notes
--------------------------------------------------------------
Fitch Ratings has assigned a 'BB+' rating to AltaGas Ltd.'s
subordinated notes series 3. AltaGas' current Long-Term Issuer
Default Rating (IDR) is 'BBB'. The Rating Outlook is Stable.
AltaGas plans to use the net proceeds from this issuance to pay off
series E preferred shares with a conversion option date of Dec. 31,
2023.
The notes are eligible for 50% equity credit based on Fitch's
hybrid methodology "Corporates Hybrids Treatment and Notching
Criteria," dated Nov. 12, 2020 and available at
www.fitchratings.com. Features supporting the equity categorization
of these notes include their subordinate priority, the option to
defer interest payments on a cumulative basis for up to five-years
on each occasion and a 60-year maturity.
KEY RATING DRIVERS
Strategic U.S. Utility/Canadian Midstream Focus: Since its
acquisition of WGL Holdings, Inc. (WGLH) in July 2018, the company
has implemented a strategy focused on measured expansion of its
core U.S. gas utility and Canadian midstream business in the
Montney shale, while divesting noncore midstream, power and utility
assets. Proforma for the acquisition, Fitch expects the midstream
segment will account for around 50% of the EBITDA, which is weak
for the ratings.
Over the long term, more stable utility operations will contribute
around 55%-60% of the cashflows, with the remainder largely coming
from increasingly contracted midstream operations. Fitch expects
corporate strategy and priorities to follow a similar path under
the leadership of Vern Yu, who took over as CEO on July 1, 2023.
Pipestone Acquisition Bolsters Midstream Segment: AltaGas' proposed
acquisition of the Pipestone assets adds two gas processing plants
totalling 11,500 Bbl/day of LPG supply and 105 Bcf of gas storage
capacity to AltaGas' midstream segment. The Pipestone I gas
processing plants and Dimsdale storage facilities are already
operational, generating around CAD60 million of EBITDA annually.
Once Pipestone II is constructed Fitch expects midstream EBITDA to
be in the CAD120 million - CAD 140 million range, an increase of
approximately 15% from YE2022. The company expects to fund the
construction of Pipestone II with internally generated funds and
cash. Permits for constructions are largely in place, which lower's
development risk. Over 90% of the EBITDA from the Pipestone assets
is contracted under 10-year take-or-pay or fixed fee contracts with
established producers in the region including Ovintiv, Pipestone,
Kelt, Tamarack and Advantage.
Improving Leverage Expected: In 2022, FFO leverage was 7.4x, higher
than expected, largely due to higher gas purchase costs, delayed
late fee collections and slightly higher O&M costs than expected.
Financial performance is expected to improve over the next two
years largely from debt reduction, but also from improving
cashflows. Future utility growth is expected to be driven by
customer growth of approximately 1% and significant infrastructure
investment. Fitch also expects midstream EBITDA to be relatively
flat in 2023.
AltaGas recently sold utility and utility-related operations in
Alaska with the resulting proceeds of approximately CAD1.1 billion
applied toward debt reduction. Fitch also expects the potential
sale of AltaGas' share of non-core assets such as the Mountain
Valley Pipeline will be used to lower debt. Fitch expects
deleveraging from these transactions will result in meaningful
improvement in FFO leverage, averaging 5.3x in the 2023-2026
timeframe, below Fitch's downgrade threshold of 5.5x.
Elevated Midstream Capex: Projected capex over the next three years
is expected to approximate CAD1.3 billion/year, not including the
initial purchase price for the Pipestone acquisition. Management
has delayed or eliminated some non-essential capex from 2023-2024
budget in order to manage the company's financing needs. Over the
near term, approximately one-third of capex will be allocated
towards the ongoing and planned midstream projects, including
construction of Pipestone II facility for an estimated CAD355
million and continued optimization and expansion of the RIPET
export facility.
AltaGas is also considering a potential investment in REEF, a 50/50
joint venture with Royal Vopak (NR), which would include a
large-scale LPG and bulk liquids terminal and marine infrastructure
development on Ridley Island. Expected to be developed over the
next four years, the costs associated with this project would range
around CAD450 million. Once completed, REEF would further develop
AltaGas' existing Asia focused LPG export strategy.
Fitch expects that AltaGas will prioritize balance sheet
improvements, and the capex associated additional midstream asset
development including REEF and Pipestone II will be made in a
credit supportive manner such that leverage is maintained below
Fitch's downgrade sensitivities.
Variability in Midstream Revenue Likely: Approximately, 78% of
midstream EBITDA is derived from investment grade counterparties
lending stability to the cashflows. Contractual structure is strong
with 31% of expected 2023 EBITDA derived from take or pay contracts
and 18% from fixed-fee contracts. Approximately 68% of expected
global export volumes for the remainder of 2023 are hedged
including tolling agreements and financial hedges.
However, from year-to-year, cashflows are exposed to the pricing
differentials between the U.S. and Asia. Failure to lock-in this
differential in 3Q22 squeezed butane margins, adversely impacting
midstream EBITDA. Going forward, management has modified its
hedging strategy locking-in a higher percentage of firmly committed
and merchant volumes in a timely manner, and managing the
propane-butane product mix, improving margin realization. Future
episodes of inefficient hedging or increasing exposure to market
risk can result in a negative rating action.
Additional Regulatory Risks: AltaGas' diversified group of
relatively low-risk U.S. gas distribution utilities serve 1.5
million customers in parts of Maryland, Virginia, District of
Columbia (D.C.), and Michigan under generally credit-supportive
economic regulation. Fitch believes the regulatory compacts in
Maryland and Virginia remain balanced from a credit perspective
noting that election changes in Maryland has injected a measure of
uncertainty. Significant, unexpected deterioration in rate
regulation could result in future credit rating downgrades.
Parent Subsidiary Rating Linkage: Fitch has analyzed
parent-subsidiary rating linkage between AltaGas and intermediate
holding company subsidiary WGL Holdings (WGLH) utilizing the strong
subsidiary path laid out in Fitch's "Parent and Subsidiary Linkage
Rating Criteria." Legal ring-fencing and access and control are
each evaluated as open, resulting in a consolidated rating for
AltaGas with WGLH.
DERIVATION SUMMARY
AltaGas Ltd., is somewhat weakly positioned at its 'BBB' rating.
With operating EBITDA of approximately CAD1.4 billion at YE 2022,
it is smaller than Emera Incorporated (Emera; BBB/Stable), but
larger than Algonquin Power & Utilities Corp. (APUC; BBB/Stable).
By way of comparison, Emera and APUC had operating EBITDA of
approximately CAD1.8 billion and CAD1.0 billion, respectively, at
YE 2022. Fitch estimates AltaGas' FFO leverage will average 5.3x
during 2023-2025, comparable with APUC's around 5.5x and better
than Emera's at 6.5x over the same period.
Canadian utility holding company APUC benefits from regulatory
diversification but owns utilities that operate in somewhat less
constructive regulatory environments, in Fitch's view, with APUC's
largest utility operating in Missouri. Utility operations are
expected to account for approximately 75% of consolidated APUC
EBITDA. Emera in recent years has deemphasized unregulated
investment to focus on utility operations in the U.S., Canada and
the Caribbean.
Fitch believes regulation in Emera's two largest jurisdictions,
Florida and Nova Scotia, are balanced from a credit perspective.
Emera derives around 95% of its earnings from regulated operations.
By comparison, AltaGas generates only 57% of its cash flows from
regulated utility operations.
Like Emera and APUC, AltaGas' operations include significant, low
risk, utility operations. AltaGas, through WGL, provides gas
utility services to affluent populations in parts of Virginia,
Maryland and D.C. with prospective customer growth estimated at 1%
per year. AltaGas also provides gas distribution service to parts
on Michigan. Collectively, AltaGas' U.S. utilities have experienced
customer growth of 1%, and approximately 70% of its customers are
residential. Emera and APUC, unlike AltaGas, also have meaningful
electric utility operations.
KEY ASSUMPTIONS
- Continued reasonable economic regulation across AltaGas'
jurisdictional service territory;
- One percent annual customer growth at AltaGas' U.S. gas utility
segment on average;
- Maintaining normalized annual sales at WGL in 2023-2024;
- Midstream export volumes increasing 5%-10% over the next three
years, while increasing the proportion of export volumes from the
facility to take or pay contracts from merchant;
- Current business mix between regulated entities and midstream
segment is sustained;
- Additional asset sales in 2024 with proceeds used for reducing
parent-level debt;
- Capex averages CAD1.3 billion per annum during 2023-2025;
- Incremental midstream capex executed in a credit supportive
manner.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Credit supportive regulatory trends and better than expected
final decisions at AltaGas' and WGLH's U.S. utility subsidiaries
compared with Fitch's rating case;
- Stronger than expected performance at AltaGas' midstream
businesses;
- Sustained FFO Leverage of 4.5x or better on a consistent basis.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- FFO leverage above 5.5x post 2024, and on a sustained basis
thereafter;
- Significant deterioration across AltaGas' regulatory compact;
- Additional debt-financed midstream capex resulting in higher
leverage;
- Failure to raise adequate and timely financing from assets sales
or other sources, if required to lower leverage.
LIQUIDITY AND DEBT STRUCTURE
Adequate Liquidity: Fitch believes liquidity is adequate at AltaGas
and WGL. AltaGas has negotiated consolidated credit facilities with
total borrowing capacity of CAD3.5 billion. As of Sept. 30, 2023,
AltaGas had drawn CAD708 million and had remaining borrowing
capacity of about CAD2.8 billion. AltaGas had cash and cash
equivalents of CAD43 million on its balance sheet as of Sept. 30,
2023.
Maturities in 2024 include senior notes totaling CAD550 million and
CAD450 million term loan in 2024, and CAD800 million due in 2025.
As of Sept. 30, 2023, WGL's USD450 million credit facility was
fully drawn. The revolving credit facility expires July 17, 2026.
Fitch expects WGL to be cash flow negative 2023-2025 owing to the
utility's large capex program, with external funding provided
through a balanced mix of equity and debt. The maturities are
manageable with USD294 million maturing over the next five years.
ISSUER PROFILE
AltaGas is a Canada-based energy infrastructure company with
operations in the U.S. and Canada with CAD20 billion of total
assets. The company has two primary business segments: Utilities
and Midstream.
ESG CONSIDERATIONS
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating
----------- ------
AltaGas Ltd.
Subordinated LT BB+ New Rating
ALTISOURCE PORTFOLIO: CEO, CFO Temporarily Modify Compensation
--------------------------------------------------------------
Altisource Portfolio Solutions S.A. disclosed in a Form 8-K Report
filed with the Securities and Exchange Commission that its Chairman
and Chief Executive Officer and Chief Financial Officer volunteered
to temporarily modify their compensation effective November 1,
2023, by providing the Company with the option to replace up to 30%
of their base compensation with a grant of unrestricted Altisource
common stock.
Beginning on the effective date of the Adjustment, the base salary
paid to the CEO and CFO will be reduced by 30%. On December 31,
2023, and at the end of each subsequent calendar quarter so long as
the Adjustment is in place, the Company will determine the portion
of the Reduced Amount to be paid in cash and Altisource common
stock for each employee and make the payment and transfer of shares
as applicable to each such employee. To the extent the Company opts
to pay a portion of the Reduced Amount in cash, the amount paid
will be increased to include interest on the amount based on the
average 3-month U.S. Treasury rate in effect for such Period in a
manner to make such executive whole with respect to such amount. To
the extent that the Company opts to pay any portion of the Reduced
Amount in Altisource common stock, such stock grant will occur on
the last day of the Period and vest immediately, with the amount of
common stock granted being determined based on the lower of the
average closing stock price for such Period and the closing stock
price on the day immediately preceding the date of such grant. The
Company and each employee may reduce the amount of or terminate the
Adjustment upon written notice, with such modification becoming
effective at the beginning of the Period immediately following such
notice. The changes in compensation will not impact the calculation
of incentive or termination payments to such individuals, as may be
applicable.
The Company believes it is on track to achieve its company-wide
cost reduction plan with September 2023 adjusted compensation costs
approximately $0.9 million ($10.5 million annualized) lower than
the average second quarter 2023 costs.
In July 2023, the Company began to implement a company-wide cost
reduction plan that the Company estimates will reduce annual cash
operating expenses by $13.5 million on an annualized basis compared
to the average second quarter 2023 costs.
About Altisource
Headquartered in Luxembourg, Altisource Portfolio Solutions S.A. --
https://www.Altisource.com/ -- is an integrated service provider
and marketplace for the real estate and mortgage industries.
Combining operational excellence with a suite of innovative
services and technologies, Altisource helps solve the demands of
the ever-changing markets it serves.
As reported by the TCR on Feb. 28, 2023, S&P Global Ratings raised
its issuer credit rating on Altisource Portfolio Solutions S.A. to
'CCC+' from 'SD'. The outlook is stable. S&P said, "The stable
outlook on Altisource reflects our view that over the next 12
months, while the company will continue to generate negative cash
flow from operations due to low residential mortgage delinquencies
and foreclosures, it could also benefit from deteriorating
macroeconomic conditions. The stable outlook also incorporates our
expectation that Altisource will have adequate liquidity to
maintain operations and service its debt over the next 12 months."
ALTISOURCE PORTFOLIO: Top Execs OK Temporary Salary Adjustment
--------------------------------------------------------------
Altisource Portfolio Solutions S.A. disclosed in Current Report on
Form 8-K filed with the Securities and Exchange Commission that the
Company's chairman and chief executive officer and its chief
financial officer volunteered to temporarily modify their
compensation effective Nov. 1, 2023 by providing the Company with
the option to replace up to 30% of their base compensation with a
grant of unrestricted Altisource common stock.
In July 2023, Altisource began to implement a company-wide cost
reduction plan that the Company estimates will reduce annual cash
operating expenses by $13.5 million on an annualized basis compared
to the average second quarter 2023 costs.
Beginning on the effective date of the Adjustment, the base salary
paid to the subject employees will be reduced by 30%. On Dec. 31,
2023 and at the end of each subsequent calendar quarter so long as
the Adjustment is in place, the Company will determine the portion
of the Reduced Amount to be paid in cash and Altisource common
stock for each employee and make the payment and transfer of shares
as applicable to each such employee. To the extent the Company
opts to pay a portion of the Reduced Amount in cash, such amount
paid will be increased to include interest on such amount based on
the average 3-month U.S. Treasury rate in effect for such Period in
a manner to make such executive whole with respect to such amount.
To the extent that the Company opts to pay any portion of the
Reduced Amount in Altisource common stock, such stock grant will
occur on the last day of the Period and vest immediately, with the
amount of common stock granted being determined based on the lower
of the average closing stock price for such Period and the closing
stock price on the day immediately preceding the date of such
grant. The Company and each employee may reduce the amount of or
terminate the Adjustment upon written notice, with such
modification becoming effective at the beginning of the Period
immediately following such notice. The changes in compensation
will not impact the calculation of incentive or termination
payments to such individuals, as may be applicable.
The Company believes it is on track to achieve its company-wide
cost reduction plan with September 2023 adjusted compensation costs
approximately $0.9 million ($10.5 million annualized) lower than
the average second quarter 2023 costs.
About Altisource
Headquartered in Luxembourg, Altisource Portfolio Solutions S.A. --
www.Altisource.com -- is an integrated service provider and
marketplace for the real estate and mortgage industries. Combining
operational excellence with a suite of innovative services and
technologies, Altisource helps solve the demands of the
ever-changing markets it serves.
Altisource reported a net loss of $52.83 million for the year ended
Dec. 31, 2022. The Company incurred a net loss of $31.7 million
for the six months ended June 30, 2023. For the nine months ended
Sept. 30, 2023, the Company reported a net loss of $42.98 million.
As of Sept. 30, 2023, the Company had $162.64 million in total
assets, $36.63 million in total current liabilities, $211.98
million in long-term debt, $8.72 million in deferred tax
liabilities, $18.23 million in other non-current liabilities, and a
total deficit of $112.93 million.
* * *
As reported by the TCR on Feb. 28, 2023, S&P Global Ratings raised
its issuer credit rating on Altisource Portfolio Solutions S.A. to
'CCC+' from 'SD'. The outlook is stable. S&P said, "The stable
outlook on Altisource reflects our view that over the next 12
months, while the company will continue to generate negative cash
flow from operations due to low residential mortgage delinquencies
and foreclosures, it could also benefit from deteriorating
macroeconomic conditions. The stable outlook also incorporates our
expectation that Altisource will have adequate liquidity to
maintain operations and service its debt over the next 12 months."
AMERIFIRST FINANCIAL: Court Orders Mediation With Creditors
-----------------------------------------------------------
Alex Wittenberg of Law360 reports that a Delaware bankruptcy judge
on Monday, November 6, 2023, instructed mortgage lender AmeriFirst
Financial and its creditors to engage in mediation this week to try
to hash out an agreement over a financing order that the creditors
say would prevent them from challenging releases of claims against
the company's Chapter 11 lender.
About AmeriFirst Financial
AmeriFirst Financial, Inc., a mid-sized independent mortgage
company, and its affiliate Phoenix 1040, LLC filed Chapter 11
petitions (Bankr. D. Del. Lead Case No. 23-11240) on Aug. 24, 2023.
In the petitions signed by T. Scott Avila, chief restructuring
officer, each Debtor disclosed between $50 million and $100 million
in both assets and liabilities.
Judge Thomas M. Horan oversees the cases.
The Debtors tapped Laura Davis Jones, Esq., at Pachulski Stang
Ziehl & Jones, LLP as bankruptcy counsel; Paladin Management Group,
LLC as restructuring advisor; and Omni Agent Solutions, Inc., as
claims, noticing and administrative agent.
ANAGRAM HOLDINGS: Hits Chapter 11 Bankruptcy Protection
-------------------------------------------------------
Reshmi Basu of Bloomberg News reports that Anagram Holdings, Party
City Holdco Inc.'s balloon manufacturing affiliate, filed for
bankruptcy with plans to sell itself.
Anagram listed assets and liabilities of as much as $500 million
each in a Chapter 11 petition filed in Texas. The filing protects
the company from creditors while it works out a way to repay them.
A group of Anagram's secured lenders has agreed to take over the
company, according to a statement. That proposal, which needs
bankruptcy court approval, sets the floor for further offers.
About Anagram Holdings
Anagram Holdings LLC is a manufacturer of foil balloons and
inflated decor, distributing and selling its products both
domestically and internationally. Anagram's customers include party
supply specialty stores, grocers, mass marketers, parks, drugstores
and discount variety stores.
Anagram Holdings LLC and two affiliates sought relief under Chapter
11 of the U.S. Bankruptcy Code (Bankr. S.D. Tex. Lead Case No.
23-90901) on Nov. 8, 2023. In the petition signed by drian
Frankum, as chief restructuring officer, Anagram Holdings reported
assets and liabilities between $100 million and $500 million.
The Honorable Bankruptcy Judge Marvin Isgur oversees the cases.
The Debtors tapped HOWLEY LAW PLLC, and SIMPSON THACHER & BARTLETT
LLP as attorneys, ANKURA CONSULTING GROUP, LLC, as restructuring
advisor; and ROBERT W. BAIRD & CO. as investment banker. KURTZMAN
CARSON CONSULTANTS LLC is the claims agent.
ARCHBISHOP OF BALTIMORE: Taps Gallagher Evelius & Jones as Counsel
------------------------------------------------------------------
The Roman Catholic Archbishop of Baltimore seeks approval from the
U.S. Bankruptcy Court for the District of Maryland to employ
Gallagher Evelius & Jones, LLP as special counsel.
The firm will provide legal services to the Debtor, including in
areas of real estate, contract review, employment, education,
charitable giving, finance, corporate, risk management, claim
response, and child protection.
Prior to filing this Chapter 11 case, YVS Law received a retainer
payment of $20,000 from Debtor.
The hourly rates of the firm's counsel and staff are as follows:
Partners $380 - $700
Counsel $270 - $700
Associates $270 - $380
Paralegals $230 - $320
In addition, the firm will seek reimbursement for expenses
incurred.
David Kinkopf, Esq., an attorney at Gallagher Evelius & Jones,
disclosed in a court filing that his firm is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
David W. Kinkopf, Esq
Gallagher Evelius & Jones, LLP
218 North Charles Street, Suite 400
Baltimore, MD 21201
Telephone: (410) 727-7702
Facsimile: (410) 468-2786
Email: dkinkopf@gejlaw.com
About Roman Catholic Archbishop of Baltimore
Roman Catholic Archbishop of Baltimore is a non-profit religious
institution that maintains its principal place of business at 320
Cathedral Street, Baltimore, Maryland 21201. Consistent with Canon
Law and Maryland law, the RCAB holds property, including real
property, as a corporation sole for the purposes of erecting
churches, parsonages, burial grounds, or schools according to the
discipline and government of the Roman Catholic Church, with all
such property to be used only for such purposes.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Md. Case No. 23-16969) on September 29,
2023. In the petition signed by William E. Lori, archbishop, the
Debtor disclosed $100 million to $500 million in assets and $500
million to $1 billion in liabilities.
Judge Michelle M. Harner oversees the case.
The Debtor tapped YVS Law, LLC and Holland & Knight LLP as legal
counsel; Keegan Linscott & Associates, PC as financial and
restructuring advisor; and Gallagher Evelius & Jones LLP as special
counsel. Epiq Corporate Restructuring LLC is the claims, noticing,
and balloting agent.
ARCHDIOCESE OF BALTIMORE: Gets More Time to Settle with Victims
---------------------------------------------------------------
David Collins of WBALTV reports that a federal judge granted
lawyers some time to work out differences over the Archdiocese of
Baltimore's bankruptcy filing before heading back to court.
Abuse survivors want to extend the deadline to file a claim and
they want to know what church entities are covered by insurance.
They're also seeking more information regarding church assets.
"They shouldn't be allowed to define how people recover. They have
defined what we had to bear for years. It's our turn to say to
them, 'This is what we want you to bear,'" said Frank Schindler, a
church sex abuse survivor.
Church sex abuse survivors left Monday's bankruptcy court hearing
feeling encouraged that negotiations will continue over motions
they consider unfair that were filed by the archdiocese, especially
the Feb. 24 deadline that survivors must file a claim. Survivors
seek a two-year deadline.
"Maybe this is the beginning of the end," Schindler said.
"There are a lot of survivors out there who have not yet come
forward, and we don't want to put pressure on them. That's why the
Child Victims Act took away the statute of limitations to give them
time to come forward," said Teresa Lancaster, a church sex abuse
survivor.
Last October 2023, a federal bankruptcy judge issued an interim
injunction on lawsuits against entities that are covered by
archdiocese insurance plans. On Monday, survivors learned
discussions are still underway to lift the veil of secrecy of who's
covered and how much assets they have.
"We expect this to be a significant point. Now, the archdiocese
says they will agree to provide all of the information on the
property transfers," Lancaster said. "There have been property
transfers within the parishes and the churches. Technically, they
didn't file for bankruptcy. They've got them set up as LLCs. They
want to separate them from the archdiocese, and they want to
protect them. It's just not right because they are part of the
archdiocese."
Archdiocese lawyers previously told the court that if schools and
parishes want that protection, they will have to contribute to
settlement funds.
Another point of contention surrounds the archdiocese's attempts to
bar survivors who have previously settled claims.
"To ban these claims to such survivors is ludicrous. These
settlements were based on deception and misrepresentation,"
Lancaster said.
The judge said she wants abuse survivors to be heard in court.
David Lorenz, the director of the Survivors Network of those Abused
by Priests, is demanding Archbishop William Lori be ordered to sit
in the courtroom and listen.
"He has to hear those stories, not in his private office, where you
go up there intimidated by the trappings of the archbishop, where
you come to a courtroom and Archbishop Lori has to hear the
stories," Lorenz said. "If a survivor wants Archbishop Lori in that
courtroom, he should have to be there, or some church official."
Through court testimony, the archdiocese claimed those on its abuse
list are no longer on the payroll. Abuse survivors point out the
attorney general's report has a longer list.
"What I want to know is are those other 30-40 people, plus the five
officials who enabled, are they being paid? And, are they being
paid from the money that should be going to survivors?" Lorenz
said.
Archdiocese lawyers told the judge they have made 5,000 pages of
insurance coverage information available, dating back to the
1960s.
The Archdiocese of Baltimore sent a statement to 11 News late
Monday afternoon, saying: "Today's court hearing indicates that all
the parties involved want this process to proceed in a timely
manner, with transparency and collaboration. All of us want to
ensure that victim-survivors can be compensated, and we sincerely
hope that can be done."
The judge said if a problem arises in the discussions, she will
call a status hearing. Otherwise, the next court date is December
4, 2023.
About the Archdiocese of Baltimore
Archdiocese of Baltimore operates as a non-profit religious
organization. The Organization provides catholic charities,
chancery, pastoral council, policies, presbyteral council, and
child and youth protection.
Archdiocese of Baltimore sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Md. Case No. 23-16969) on Sept. 29,
2023. In the petition filed by Archbishop William E. Lori, the
Debtor estimated assets between $100 million and $500 million and
liabilities between $500 million and $1 billion.
The Debtor is represented by:
Catherine Keller Hopkin, Esq.
YVS Law, LLC
320 Cathedral Street
Baltimore, MD 21201
ASK FOR COOL: Seeks to Hire Lorium PLLC as Legal Counsel
--------------------------------------------------------
Ask For Cool Air Conditioning, Inc. seeks approval from the U.S.
Bankruptcy Court for the Southern District of Florida to hire
Lorium PLLC as its counsel.
Lorium will render these services:
(a) advise the Debtor with respect to its powers and duties;
(b) advise the Debtor with respect to its responsibilities in
complying with the U.S. Trustee's Operating Guidelines and
Reporting Requirements and with the rules of the Court;
(c) prepare legal papers;
(d) protect the interests of the Debtor in all matters pending
before the court; and
(e) represent the Debtor in negotiations with its creditors in
the preparation of a plan.
Lorium requires a retainer of $10,000.
Joe Grant, Esq., an attorney at Lorium, disclosed in a court filing
that the firm is a "disinterested person" as that term is defined
in Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Joe M. Grant, Esq.
Lorium PLLC
197 South Federal Highway, Suite 200
Boca Raton, FL 33432
Telephone: (561) 361-1000
Facsimile: (561) 672-7581
Email: jgrant@loriumlaw.com
About Ask For Cool Air Conditioning, Inc.
Ask For Cool Air Conditioning, Inc. sought protection for relief
under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No.
23-18752) on Oct. 25, 2023, listing $500,001 to $1 million in both
assets and liabilities.
Judge Peter D Russin presides over the case.
Joe M. Grant, Esq. at Lorium Law PLLC represents the Debtor as
counsel.
ASTRA SPACE INC: Closes Additional $13.4 Million Debt Financing
---------------------------------------------------------------
Astra Space, Inc.(Nasdaq: ASTR) announced Nov. 6, 2023, that it has
closed an initial financing with JMCM Holdings LLC and Sherpa
Venture Funds II, LLP (together, the "Investors"), affiliates of
two early investors in Astra, for a total investment amount of
approximately $13.4 million (the "Initial Financing") pursuant to a
reaffirmation agreement and omnibus amendment agreement dated
November 6, 2023. This Initial Financing is connected to Astra's
announcement in a report on Form 8-K filed with the Securities and
Exchange Commission on October 23, 2023 of the execution of a
non-binding term sheet (the "Term Sheet"). The Term Sheet
contemplates a financing of at least $15.0 million, from the
Investors and other potential investors, and up to $25.0 million
(the "Proposed Financing").
The Initial Financing includes (1) a purchase by the Investors of
the remaining $8.0 million aggregate principal amount of senior
secured notes (the “Existing Notes”) and associated warrants
(the "Existing Warrants") to purchase up to 1.5 million
post-reverse stock split shares of Astra's Class A common stock,
par value $0.0001 per share (the "Class A Common Stock") issued on
August 4, 2023 from the Astra's senior secured creditor, pursuant
to which Astra was in default under as of October 30, 2023, (2) a
loan by the Investors to Astra and its subsidiaries in the
aggregate principal amount of approximately $3.05 million evidenced
by senior secured bridge notes (the "Bridge Notes") that will come
due on November 17, 2023, that will rank equally as to payment and
lien priority with the Existing Notes that will be secured by the
same collateral as the Existing Note and that will be guaranteed by
all of the subsidiaries of Astra, and (3) a sale to the Investors
of warrants (the "Warrants") to purchase up to 5,314,201 shares of
Astra’s Class A Common Stock at a purchase price of $0.125 per
Warrant for an aggregate purchase price of approximately $664,275
that are immediately exercisable at an exercise price of $0.808 per
share of Class A Common Stock, subject to certain adjustments and
that expire on August 4, 2028.
Pursuant to the Initial Financing Agreement, the Investors have
agreed to waive certain existing and prospective defaults and
events of default under the Existing Notes, including the events of
default under the Existing Notes described in the Astra's Form 8-K
filed with the SEC on November 3, 2023, and the requirement for
Astra to comply with the minimum liquidity financial covenant in
the Existing Notes until November 17, 2023 to provide Astra with
time to raise additional liquidity through various capital raising
and cost cutting initiatives and strategic transactions (the
"Strategic Plan").
Astra is in continuing discussions concerning the Proposed
Financing with the Investors. The funding contemplated by the Term
Sheet is conditioned upon execution of final definitive
documentation among the Company and the Investors; however there
can be no assurance that the Company and the Investors will be able
to negotiate definitive documentation on the terms specified in the
Term Sheet or to consummate the Proposed Financing at all.
The Bridge Notes and the warrants have not been and will not be,
and any securities issued in connection with the Proposed Financing
will not be, registered under the Securities Act of 1933, as
amended (the "Securities Act") or the securities laws of any other
jurisdiction. The Bridge Notes, the Warrants and any securities
issued in connection with the Proposed Financing may not be offered
or sold in the United States absent registration or an applicable
exemption from the registration requirements. This press release
does not constitute an offer to sell any security, including the
Bridge Notes, the Warrants or any securities that may be issued in
the Proposed Financing, nor a solicitation for an offer to purchase
any security, including the Bridge Notes, the Warrants or any
securities that may be issued in the Proposed Financing, nor shall
there be any sale of the securities in any jurisdiction in which
such offer, solicitation, or sale would be unlawful prior to
registration, qualification, or exemption under the securities laws
of any such jurisdiction.
About Astra Space
Astra's mission is to improve life on Earth from space by creating
a healthier and more connected planet. Today, Astra offers one of
the lowest cost-per-launch dedicated orbital launch services, and
one of the industry’s leading flight-proven electric propulsion
systems for satellites, Astra Spacecraft Engine. Visit astra.com to
learn more about Astra.
AUDACY INC: S&P Downgrades ICR to 'D' on Missed Interest Payments
-----------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on Audacy Inc.
to 'D' from 'CCC-'. At the same time, S&P lowered its issue-level
rating on Audacy's senior secured first-lien term loan to 'D' from
'CCC' and issue-level rating on its senior secured second-lien
notes to 'D' from 'C'.
Audacy has not made the interest payments on its senior secured
first-lien revolving credit facility and term loan both due 2024
($17 million due Oct. 31, 2023), senior secured second-lien notes
due 2027 ($15 million due Nov. 1, 2023), or senior secured
second-lien notes due 2029 ($18 million due Sept. 30, 2023). In
addition, S&P does not expect that the company will complete the
interest payments in the stated grace periods to preserve its
financial flexibility. Audacy has been discussing strategies to
manage its liabilities with its lenders, which we believe will lead
to a comprehensive debt restructuring or bankruptcy filing.
S&P expects to withdraw its ratings on Audacy in 30 days.
AVALON MOBILE: Seeks to Hire Scroggins & Williamson as Attorney
---------------------------------------------------------------
Avalon Mobile Home Park Partnership LLLP seeks approval from the
U.S. Bankruptcy Court for the Northern District of Georgia to hire
Scroggins & Williamson, P.C. as its attorneys.
The firm's services include:
(a) preparing pleadings and applications;
(b) conducting examinations;
(c) advising the Debtors of their rights, duties and
obligations as debtors-in-possession;
(d) consulting with the Debtors and representing the Debtors
with respect to a chapter 11 plan and/or a sale of the Debtors'
assets;
(e) performing legal services incidental and necessary to the
day-to-day operation of the Debtors' affairs, including, but not
limited to, institution and prosecution of necessary legal
proceedings, and general business and corporate legal advice and
assistance; and
(f) taking any and all other action incidental to the proper
preservation and administration of the Debtors' estates.
The firm will be paid at these rates:
Attorneys $535 - $595
Paralegals $135 - $195
The firm received a retainer in the amount of $31,297.50.
J. Robert Williamson, a partner of Scroggins & Williamson, assured
the court that the firm is disinterested, as that term is defined
in 11 U.S.C. Sec. 101(14).
The firm can be reached through:
J. Robert Williamson, Esq.
SCROGGINS & WILLIAMSON, P.C.
4401 Northside Parkway, Suite 450
Atlanta, GA 30327
Tel: (404) 893-3880
Email: aray@swlawfirm.com
About Avalon Mobile Home
Park Partnership LLLP
Avalon Mobile is primarily engaged in renting and leasing real
estate properties.
Avalon Mobile Home Park Partnership LLLP filed its voluntary
petition for relief under Chapter 11 of the Bankruptcy Code (Bankr.
N.D. Ga. Case No. 23-60521) on Oct. 25, 2023. The petition was
signed by Kathryn C. Taylor as general partner. At the time of
filing, the Debtor estimated $1 million to $10 million in assets
and $10 million to $50 million in liabilities.
Judge Barbara Ellis-Monro presides over the case.
J. Robert Williamson, Esq. at Scroggins & Williamson, P.C.
represents the Debtor as counsel.
AXALTA COATING: Moody's Alters Outlook on 'Ba3' CFR to Positive
---------------------------------------------------------------
Moody's Investors Service affirmed Axalta Coating Systems Ltd.'s
("Axalta") Ba3 Corporate Family Rating and Ba3-PD Probability of
Default Rating. Moody's also affirmed the Ba1 ratings on the senior
secured first lien revolver, the senior secured first lien term
loan B5 and the B1 rating on the backed Euro senior unsecured notes
of Axalta's wholly owned subsidiary -- Axalta Coating Systems Dutch
Holding B B.V. Also affirmed the B1 rating on the USD senior
unsecured notes issued at wholly owned subsidiary Axalta Coating
Systems, LLC. Moody's assigned a B1 rating to the new USD backed
senior unsecured notes to be issued by Axalta Coating Systems Dutch
Holding B B.V., Proceeds from the new notes will be used to fund
the repayment of its Euro senior unsecured notes maturing January
2025. The rating on the 2025 notes will be withdrawn once the debt
has been repaid. Axalta's Speculative Grade Liquidity Rating (SGL)
remains unchanged at SGL-1. The outlook of Axalta and subsidiaries
have been changed to positive from stable.
"Axalta's credit metrics have improved in 2023 as price increase
have been passed through and raw materials prices have decline, so
profits are up despite a decline in volumes due to destocking and a
relatively soft macroeconomic environment," said John Rogers,
Moody's Senior Vice President and lead analyst for Axalta. The
analyst added, "On the third quarter call, the company announce a
new lower leverage target, which will result in meaningful
reduction in its term loan debt over the next 2 years."
RATINGS RATIONALE
The outlook revision reflects: (i) meaningful recovery in operating
margins in 2023 despite destocking and a soft macroeconomic
environment; (ii) free cash flow generation of upwards of $400
million in 2023 and closer to $500 million in 2024; (ii) expected
debt reduction over the next two years; and (iii) management's more
conservative financial targets, including a net leverage target of
2,0-2.5x (Net Debt/adjusted EBITDA; management's calculation).
Moody's adjusted Debt/EBITDA was 4.5x as of 30 September 2023 with
Net Debt/EBITDA of 3.8x, and Retained Cash Flow/Debt ("RCF/Debt")
of 17% with RCF/Net Debt of 20%. Credit metrics are expected to
remain meaningfully stronger on a net basis in light of the
company's elevated cash position. The cash position provides
meaningful financial flexibility to accelerate debt reduction or
fund strategic bolt-on acquisitions.
Axalta's Ba3 CFR is supported by its leading global position in
coatings for transportation vehicles, especially automotive
refinish, significant market positions in industrial coatings, low
capital intensity, strong free cash flow generation and a
management team that is seeking to reduce leverage over time. The
rating has been constrained by elevated financial leverage and
delays in reducing leverage in 2021 and 2022. The rating is
supported by a very good liquidity position and excellent market
position as a coatings producer that generates cash through
economic cycles. The rating also takes into consideration recent
financial policy statements related to lower leverage targets and
pursuit of investment-grade ratings over time -- an important
indicator of management's intent.
Axalta's coatings business model is capable of supporting higher
ratings given the company's strong market position in automotive
refinish, EBITDA margins usually closer to 20%, and roughly $500
million of free cash flow annually through economic cycles. The
company was successful at handling rising commodity prices (e.g.,
oil-based resins, titanium dioxide) in 2021 and the first half of
2022 and selling price actions have materially improved margins in
2023. Axalta is generating EBITDA in the range of $1 billion on a
normalized basis.
LIQUIDITY
The SGL-1 Speculative Grade Liquidity rating is supported by a
substantial cash balance with $606 million of cash on hand at 30
September 2023 and an undrawn $550 million revolving credit
facility due 2026 with only modest letters of credit ($530 million
available). The credit agreement governing the revolver includes a
maximum first lien leverage ratio test set at 5.5x that is only
tested if revolver borrowings exceed 30% of capacity at the end of
the fiscal quarter.
ESG CONSIDERATIONS
Environmental, social, and governance factors are important factors
influencing Axalta's credit quality but not driver of the actions.
Axalta' ESG Credit Impact Score (CIS-3) indicates that ESG
considerations have a limited impact on the current credit rating
with potential for greater negative impact over time, as increasing
expenses and capital are required to reduce emissions and address
increasingly stringent environmental regulations. Environmental
risks are significant for chemical companies but Axalta's E-3
rating reflects the fact that it is largely a formulator of
coatings and its emissions are lower than most other chemical
companies. Similarly, Axalta's social risk score is S-3 reflecting
its lower exposure to Health & Safety and Responsible Production
risks than most chemical companies. Axalta's governance risk score
is G-3 reflecting management tolerance for leverage. This score
could go lower as leverage comes down and management gets close to
its targeted leverage metric. The company has a long-term net
leverage target of 2.0-2.5x and has expressed its intention to
pursue investment grade ratings over time.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The positive outlook signals expectations for stronger credit
metrics and a higher likelihood of a rating upgrade over the next
12-18 months.
Moody's could consider an upgrade with expectations for: (i)
adjusted financial leverage near 4.0x; (ii) retained cash flow to
debt sustained above 15%; and (iii) free cash flow to debt
sustained above 10% (FCF/Debt).
Moody's could consider a downgrade with expectations for (i)
adjusted financial leverage sustained above 5.0x; (ii) retained
cash flow-to debt sustained below 10%; or (iii) substantive
deterioration in end market conditions. Significant erosion in the
company's liquidity position or adoption of more aggressive
financial policies could also have negative rating implications.
The principal methodology used in these ratings was Chemicals
published in October 2023.
B & M REALTY: Unsecureds to be Paid in Full in Plan
---------------------------------------------------
B & M Realty, LLC filed with the U.S. Bankruptcy Court for the
Eastern District of North Carolina a Second Amended Disclosure
Statement describing Chapter 11 Plan dated October 31, 2023.
The Debtor is the North Carolina limited liability company. The
company's purpose is as a holding company for real property and to
hold that property out for rent. At the time of the filing, the
Debtor held properties in Vance, Durham, Halifax and Granville
Counties.
The principal of B & M Realty is Maria Brown-Lindsey. All of the
property currently owned by the Debtor was formerly owned by its
principal, Maria Brown-Lindsey. Ms. Lindsey inherited this property
from her father and at the time of her father's passing, the only
lien on property was the debt owed to US Bank Trust Association for
$46,474.41.
The Debtor filed for Chapter 11 protection due to pending
foreclosures of its real property. The Debtor believes that the
circumstances by which it came to be in such financial distress is
relevant to the Court's and creditors' understanding of the case.
Faced with forced liquidation, the Debtor immediately engaged a
realtor to market its properties. In the months that followed, the
Debtor liquidated property for the benefit of its creditors and
negotiated surrender of its properties where it was determined
there was no equity. The Debtor has returned some $417,000 in cash
proceeds and surrendered an additional $180,000 in property to
creditors. However, the Debtor still faced the threat of
foreclosure and liquidation.
Therefore, on July 24, 2023, the Debtor moved the Court to set
aside dismissal of the case so that it could attempt to reorganize.
The Debtor's plan is its best effort to reorganize the debts so
that it can make a good faith effort to pay the creditors the value
of the equity over time in satisfaction of the creditors' claims.
Under the Debtor's proposed Plan, there is a full payment of the
value of the secured debt and priority unsecured debt, as well as
repayment to unsecured creditors in full.
The Plan calls for all priority unsecured claims to be paid in full
with interest at the statutory rate within 5 years of the Petition
Date in equal quarterly payments. However, these claims have also
been paid in full and only remaining taxes due are current year
taxes.
The Plan calls for unsecured claims to be paid in full through
equal monthly payments within one year of the Effective Date.
However, the Debtor will expedite these payments based upon any
recovery from litigation.
Administrative claims shall be paid in full on the Effective Date
through the issuance of a promissory note secured by a deed of
trust on property. The only known administrative claims at this
time are attorney's fees.
The Plan calls for all creditors to be paid in excess of the
trustee's liquidation value of the estate and it has committed its
income and equity to the Plan.
A full-text copy of the Second Amended Disclosure Statement dated
October 31, 2023 is available at https://urlcurt.com/u?l=TDQPbz
from PacerMonitor.com at no charge.
Debtor's Counsel:
J.M. Cook, P.A.
J.M. Cook
5886 Faringdon Place
Suite 100
Raleigh, NC 27609
Tel: 919.675.2411
Fax: 919.882.1719
Email: J.M.Cook@jmcookesq.com
About B & M Realty
B & M Realty, LLC is a holding company for real property and to
hold that property out for rent.
The Debtor filed a petition for Chapter 11 protection (Bankr.
E.D.N.C. Case No. 21-01955) on Sept. 1, 2021, with up to $1 million
in assets and up to $500,000 in liabilities. Judge David M. Warren
oversees the case.
J.M. Cook, P.A. is the Debtor's legal counsel.
BAY PITA: Case Summary & One Unsecured Creditor
-----------------------------------------------
Debtor: Bay Pita LLC
1419 Coney Island Avenue
Brooklyn NY 11230
Business Description: Bay Pita is engaged in activities related to
real estate.
Chapter 11 Petition Date: November 9, 2023
Court: United States Bankruptcy Court
Eastern District of New York
Case No.: 23-44114
Debtor's Counsel: Brett Silverman, Esq.
SILVERMAN LAW PLLC
4 Terry Terrace
Livingston NJ 07039
Tel: 636-779-7210
Email: bsilverman@silvermanpllc.com
Total Assets: $2,002,011
Total Liabilities: $1,942,505
The petition was signed by Steve Rosenberg as CRO.
The Debtor listed Shaye Lieberman located at 1419 Coney Island
Avenue, Brooklyn, NY, as its sole unsecured creditor holding a
claim of $200,000 for monies loaned/advanced.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/6H6IKUQ/Bay_Pita_LLC__nyebke-23-44114__0001.0.pdf?mcid=tGE4TAMA
BEASLEY BROADCAST: Swings to $67.5MM Net Loss in 2023 Q3
--------------------------------------------------------
Beasley Broadcast Group, Inc. filed with the Securities and
Exchange Commission its Quarterly Report on Form 10-Q disclosing a
net loss of $67.5 million for the three months ended September 30,
2023, from a net income of $498,068 for the three months ended
September 30, 2022,
It reported a net loss of $81.5 million for the nine months ended
September 30, 2023, compared to a net loss of $17.5 million for the
nine months ended September 30, 2022.
As of Sept. 30, 2023, Beasley Broadcast has $594,381,187 in total
assets and $451,932,828 in total liabilities.
On October 5, 2023, the Company completed the sale of substantially
all of the assets used in the operations of WJBR-FM in Wilmington,
Del. to a third party for $5.0 million in cash. During the second
quarter of 2023, due to the potential sale of these assets, the
Company recorded an impairment loss of $10.0 million related to the
FCC license. The Company no longer has operations in the
Wilmington, DE market after completion of the disposition. However,
management determined that the disposition did not represent a
strategic shift that would have a significant effect on the
Company's operation and financial results, therefore the operations
in the Wilmington, DE market have not been reported as discontinued
operations.
On September 11, 2023, the Company completed the sale of
substantially all of the assets used in the operations of WWWE-AM
in Atlanta, GA to a third party for $250,000 in cash.
A full-text copy of the Company's 10-Q Report is available at
https://tinyurl.com/4jmehju4
About Beasley
Naples, Florida-based Beasley Broadcast Group, Inc. was founded in
1961 and owns 61 AM and FM stations in 14 large- and mid-size
markets in the United States. Beasley reaches approximately 29
million unique consumers weekly over the air, online, and on
smartphones and tablets, and millions regularly engage with the
Company's brands and personalities through digital platforms such
as Facebook, Twitter, text, apps, and email.
As of September 30, 2023, the Company had $594,381,000 in total
assets and $451,932,000 in total liabilities, including
$283,612,000 in long-term debt.
In November 2022, S&P Global Ratings lowered its issuer credit
rating on Beasley Broadcast Group Inc. and Beasley Mezzanine
Holdings LLC to 'CCC+' from 'B-'. At the same time, S&P lowered
its rating on Beasley Mezzanine Holdings LLC's $290 million
(outstanding) senior secured notes to 'CCC+' from 'B-'.
S&P said, "The negative outlook reflects our expectations for a
shallow recession in the first half of 2023 that leads to a 15%
decline in Beasley's 2023 broadcast advertising revenue, resulting
in negative free operating cash flow and leverage of about 11.5x in
2023; the outlook also reflects the potential for a more severe
recession than in our current base case.
"We expect a shallow recession in the first half of 2023, leading
to a 15% decline in broadcast industry revenue. Broadcast radio
advertising revenue is highly correlated to GDP growth because
expectations for consumer spending drive advertising budgets. Radio
advertising also has very short lead times and is one of the first
advertising mediums to decline when the economy slows. Multiple
radio broadcasters have publicly indicated that national
advertising is advertisers are likely concerned about the economic
outlook, which could be the beginning of a broader pullback in
radio advertising.
The firm also noted that Beasley's senior secured notes are trading
at distressed levels, increasing the likelihood of a subpar debt
exchange.
BLACKBRUSH OIL: S&P Withdraws 'CCC+' Issuer Credit Rating
---------------------------------------------------------
S&P Global Ratings withdrew its 'CCC+' issuer credit rating on
BlackBrush Oil & Gas L.P. and its 'B' issue-level rating on the
company's term loan at the issuer's request. At the time of the
withdrawal, S&P's outlook on BlackBrush was stable.
BLUE DOLPHIN: Veritex Agrees to Extend Forbearance Until Dec. 29
----------------------------------------------------------------
Blue Dolphin Energy Company disclosed in a Current Report on Form
8-K filed with the Securities and Exchange Commission that the
Lazarus Parties, together with Veritex Community Bank, entered into
a first amendment to the Forbearance Agreement effective Sept. 30,
2023.
Under the First Amended Forbearance Agreement, Veritex agreed to
forbear from exercising any of its remedies under the Loan
Agreements in connection with existing defaults beginning on the
Effective Date through and including Dec. 29, 2023. Unless sooner
terminated as stipulated under the First Amended Forbearance
Agreement, Veritex also agreed to forbear from testing the
Borrowers' compliance with financial covenants and taking any
action to exercise its rights and/or remedies with respect to
Borrowers' compliance or non-compliance with financial covenants
from the Effective Date through the Forbearance Termination Date.
Effective Nov. 18, 2022, Lazarus Energy LLC, Lazarus Refining &
Marketing LLC, Blue Dolphin Energy Company, Lazarus Energy Holdings
LLC, and Jonathan Carroll (the "Lazarus Parties") entered into a
Forbearance Agreement with Veritex, relating to amounts owed by the
Lazarus Parties to Veritex under the June 22, 2015 and Dec. 4, 2015
loan agreements among the Lazarus Parties and Veritex. The
Forbearance Agreement was set to terminate on Sept. 30, 2023.
Carroll serves as chief executive officer and president of the
Company. He also serves as president and is a majority owner of
LEH. Together, Carroll and LEH owned approximately 83% of Blue
Dolphin's common stock as of Nov. 3, 2023.
About Blue Dolphin
Headquartered in Houston, Texas, Blue Dolphin Energy Company --
http://www.blue-dolphin-energy.com-- is an independent downstream
energy company operating in the Gulf Coast region of the United
States. The Company's subsidiaries operate a light sweet-crude,
15,000-bpd crude distillation tower with approximately 1.2 million
bbls of petroleum storage tank capacity in Nixon, Texas. Blue
Dolphin was formed in 1986 as a Delaware corporation and is traded
on the OTCQX under the ticker symbol "BDCO."
Sterling Heights, Michigan-based UHY LLP, the Company's auditor
since 2002, issued a "going concern" qualification in its report
dated April 3, 2023, citing that the Company is in default under
secured and related party loan agreements and has a net working
capital deficiency. These conditions raise substantial doubt about
the Company's ability to continue as a going concern.
BUCKEYE PARTNERS: Moody's Rates New $1BB 1st Lien Term Loan 'Ba1'
-----------------------------------------------------------------
Moody's Investors Service assigned a Ba1 rating to Buckeye
Partners, L.P.'s proposed new $1.0 billion senior secured first
lien Term Loan B due 2030 and Ba1 rating on its extended $1.2
billion senior secured first lien revolving credit facility due
2028. The company's Ba3 Corporate Family Rating and stable rating
outlook are unaffected. The existing RCF due 2024 will be
withdrawn.
RATINGS RATIONALE
The new senior secured Term Loan B is rated Ba1, two notches higher
than the Ba3 CFR and the same as the company's extended first lien
secured revolving credit facility, and reflects the instruments'
priority position in the capital structure and the benefit of the
loss absorption provided by the unsecured debt below them.
The extended revolving credit facility introduces stricter
financial covenants for Buckeye, including a new Total Net Leverage
Ratio of below 6.5x to be tested from the second quarter of 2024
and a First Lien Net Leverage Ratio tightened to below 3.75x.
Moody's expects the company to be in compliance with its financial
covenants through 2024.
Buckeye's Ba3 CFR reflects its significant scale with about $1
billion in EBITDA and a good asset profile with historically stable
refined product pipelines and complementary terminals that form the
majority of its assets and cash flow. The company's financial
profile has been hampered by high financial leverage since it was
taken private by IFM Global Infrastructure Fund (IFM, unrated), a
global, open-ended private infrastructure investment fund in
November 2019. Buckeye's financial strategy under IFM's ownership
has been aggressive as evidenced by higher leverage and the
introduction of secured debt in the capital structure. The credit
profile incorporates Moody's expectation that IFM will remain
restrained in taking distributions over the next few years and
exercise its control over Buckeye's parent company Buckeye Energy
Holdings LLC (BEH) to support Buckeye's deleveraging goals.
The stable outlook reflects Moody's expectation that Buckeye will
resume generating free cash flow in 2024 thanks to the full
contribution of FLIQ2's dividend distribution and the substantial
reduction of Buckeye's capital investment program. The stable
outlook also reflects Moody's expectation that Buckeye will reduce
debt and significantly lower its financial leverage to levels
supportive of its existing rating.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Moody's could downgrade the ratings if Buckeye's debt to EBITDA
remains sustained above 6x, if it does not execute on its plans to
reduce debt and improve its financial profile, or if the company's
liquidity deteriorates. Moody's could upgrade the ratings if
Buckeye generates meaningful positive organic growth, and leverage
is sustained below 5.5x.
Buckeye Partners L.P., is a midstream company based in Houston,
Texas. The company's core, legacy assets are its refined products
pipeline systems in the Northeast and Midwest, including
complementary terminals, which also extend to the Southeastern and
Gulf Coast regions of the United States. The company also has
wholesale fuel distribution and marketing and domestic and
international terminaling facilities. The company is owned by IFM
Global Infrastructure Fund (IFM), a private equity sponsor.
The principal methodology used in these ratings was Midstream
Energy published in February 2022.
CACTUS LAND: Seeks Cash Collateral Access, $75,000 DIP Loan
-----------------------------------------------------------
Cactus Land Holdings asks the U.S. Bankruptcy Court for the
Southern District of Florida for authority to use cash collateral
and obtain insider post-petition financing.
Although the appraised value of the Debtor's real estate holdings
far exceeds its total estimated debt service, the Debtor's
liquidity position has reached the point that further
deterioration, without near-term funding, would require the Debtor
to cease operating completely. The Debtor has determined, in its
business judgment, that the sale of substantially all its assets is
in the best interests of its creditors and estate.
However, the Debtor's ability to obtain the necessary liquidity to
operate while pursuing a sale is critical. As the Debtor has been
unable to obtain third-party financing, its owner, Jack "Jay" Rust,
JR., has agreed to fund the administration of the case pending the
Court's approval of the proposed sale, in the form of a
debtor-in-possession financing of up to $75,000. If approved, the
Debtor intends to use the DIP Facility and its continued access to
Cash Collateral to make adequate protection payments to Miles
Austin Forman and Hamilton Collins Forman, Jr. as Trustees of the
Hamilton C. Forman Grandchildren's Trust dated January 11, 2010,
the Prepetition Lender, and otherwise fund the Chapter 11 case
until its asserts are sold.
The DIP loan has an interest rate of 3% per annum.
The Debtor is 100% owned by Jay Rust, and its primary business
consists of building and/or renovating modular homes in the Meadows
of Astatula, a 55+ community in Lake County.
The Meadows of Astatula Homeowners' Association, Inc. (HOA) was
established under a Declaration, allowing the Developer to have
complete control until 90% or more of the lots have been conveyed
to third parties. However, in 2012, a group of lot owners took
control of the HOA, leading to a dispute between the Developer and
the HOA. The Debtor entered into a Settlement Agreement with the
HOA in 2014, acknowledging that the Debtor retained all developer
rights. The terms of the contract are ambiguous, leading to further
disputes between the Debtor and the HOA. The primary dispute
concerns the HOA's assertion that the Debtor breached the
Settlement Agreement by failing to complete a "Water System
Project." The HOA filed a counterclaim against the Debtor for
breach of contract and seeking to foreclose on a putative lien. The
Debtor filed another lawsuit in 2020 seeking to collect monies due
under a Promissory Note. The HOA recorded a Lis Pendens claiming to
be based upon a recorded instrument, preventing the Debtor from
selling or developing its Property.
On January 3, 2020, the Debtor obtained a loan from the Prepetition
Lender in the principal amount of $500,000, memorialized by the
Note and secured by a Mortgage and Security Agreement, recorded in
the Official Records of Lake County, Florida as Inst. No.
2020005476. Although the Debtor has been unable to make payments on
account of the Mortgage, the Debtor believes it remains on
relatively good terms with the Prepetition Lender. As of the
Petition Date, $667,405 remains due on account of the Prepetition
Loan Documents, including 18% default rate interest accrued to
date.
Pursuant to the Prepetition Loan Documents, the Prepetition Lender
has asserted a lien on substantially all of the Debtor's assets.
As adequate protection, the Debtor proposes that the Prepetition
Lender will retain post-petition security interest and liens (to
the same validity, extent, and priority of such pre-petition
security interests) in the Pre-Petition Collateral, any of its
goods, property, assets and interests in property in which said
secured creditors may have held a lien or security interest prior
to the Petition Date, and the proceeds from the disposition of any
of such Prepetition Collateral.
The Debtor will make monthly payments to the Prepetition Lender
during the course of the proceeding equal to the 18% default rate
interest due under the Prepetition Loan Documents -- to wit, $7,500
per month, which will be applied to reduction of principal and
interest.
A copy of the Debtor's request is available at
https://urlcurt.com/u?l=8IodTG from PacerMonitor.com.
About Cactus Land Holdings, Inc.
Cactus Land Holdings, Inc. is a resident-owned manufactured home
community in Florida. The Debtor sought protection under Chapter 11
of the U.S. Bankruptcy Code (Bankr. S.D. Fla. Case No. 23-19135) on
November 6, 2023. In the petition signed by Jack "Jay" Rust, Jr.,
its president, the Debtor disclosed $4,478,161 in assets and
$1,887,404 in liabilities.
Judge Peter D. Russin oversees the case.
Matthew S. Kish, Esq, at Shapiro Blasi Wasserman & Hermann PA,
represents the Debtor as legal counsel.
CINEMARK HOLDINGS: Reports Third Quarter 2023 Results
-----------------------------------------------------
Cinemark Holdings Inc. filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q, disclosing results
for the three and nine months ended September 30, 2023.
"Our third quarter results once again reflect the significant
impact of our team's dedication and skilled operating discipline,
as well as the meaningful advancements of our strategic
initiatives," stated Sean Gamble, Cinemark President and CEO. "As
we assess the fundamental drivers of our industry's and company's
long-term health and prosperity -- particularly consumer behavior
trends, key indicators for new release volume recovery over time,
and the significant range of incremental revenue and productivity
opportunities that are fully within our control -- we remain highly
optimistic about the future."
Cinemark Holdings Earnings Highlights included:
* Entertained nearly 62 million global moviegoers throughout
its U.S. and Latin American circuits.
* Delivered box office recovery that continued to surpass
industry results and remained the only major U.S. exhibitor to have
achieved a meaningful increase in market share since the pandemic.
* July was Cinemark's biggest domestic box office month of all
time.
* Achieved record third quarter revenue of $875 million, which
increased 35% versus 3Q22 and 6% versus 3Q19.
* Reported $91 million of net income with diluted earnings per
share of $0.61.
* $197 million of Adjusted EBITDA set a third quarter record,
doubling versus 3Q22 and growing 16% versus 3Q19; generated strong
22.5% Adjusted EBITDA margin.
* Further strengthened the balance sheet by generating $50
million of Free Cash Flow and increasing quarter-end cash balance
to $806 million.
Cinemark Holdings, Inc.'s total revenue for the three months ended
September 30, 2023 increased 34.5% to $874.8 million compared with
$650.4 million for the three months ended September 30, 2022. For
the three months ended September 30, 2023, admissions revenue
increased 36.7% to $443.8 million and concession revenue increased
34.0% to $339.8 million, driven by a 27.9% increase in attendance
to 61.9 million patrons. Worldwide average ticket price was $7.17
and concession revenue per patron was $5.49.
Net income attributable to Cinemark Holdings, Inc. for the three
months ended September 30, 2023 was $90.2 million compared with a
loss of $(24.5) million for the three months ended September 30,
2022. Diluted earnings per share for the three months ended
September 30, 2023 was $0.61 compared with a diluted loss per share
of $(0.20) for the three months ended September 30, 2022.
Adjusted EBITDA for the three months ended September 30, 2023 was
$196.8 million compared with $99.5 million for the three months
ended September 30, 2022.
Cinemark Holdings, Inc.'s total revenue for the nine months ended
September 30, 2023 increased 30.9% to $2,427.8 million compared
with $1,855.0 million for the nine months ended September 30, 2022.
For the nine months ended September 30, 2023, admissions revenue
increased 30.9% to $1,233.2 million and concession revenue
increased 33.2% to $949.0 million, driven by a 26.7% increase in
attendance to 169.2 million patrons. Worldwide average ticket
price was $7.29 and concession revenue per patron was $5.61.
Net income attributable to Cinemark Holdings, Inc. for the nine
months ended September 30, 2023 was $206.2 million compared with a
loss of $(171.9) million for the nine months ended September 30,
2022. Diluted earnings per share for the nine months ended
September 30, 2023 was $1.43 compared with a diluted loss per share
of $(1.43) for the nine months ended September 30, 2022.
Adjusted EBITDA for the nine months ended September 30, 2023 was
$514.5 million compared with $263.0 million for the nine months
ended September 30, 2022.
As of September 30, 2023, the Company's aggregate screen count was
5,765, and the Company had commitments to open four new theatres
and 41 screens over the next two years.
A full-text copy of the Company's report is available at
https://tinyurl.com/2p9wumvm
About Cinemark Holdings Inc.
Headquartered in Plano, Texas, Cinemark Holdings Inc. (NYSE: CNK)
-- https://ir.cinemark.com/ -- is one of the largest movie theatre
companies in the world. Its circuit, comprised of various brands
that also include Century, Tinseltown and Rave, as of September 30,
2023 operated 507 theatres with 5,765 screens in 42 states
domestically and 13 countries throughout South and Central
America.
As of September 30, 2023, the Company had $4.8 billion in total
assets and $2.4 billion in long-term debt.
Egan-Jones Ratings Company on August 3, 2023, maintained its 'CC'
foreign currency and local currency senior unsecured ratings on
debt issued by Cinemark Holdings Inc.
CLEAN ENERGY: Designates 3.5M Shares as Series E Preferred Stock
----------------------------------------------------------------
Clean Energy Technologies, Inc. disclosed in a Current Report on
Form 8-K filed with the Securities and Exchange Commission that on
Oct. 31, 2023, the Company filed with the Nevada Secretary of State
a certificate of designation designating 3,500,000 shares of the
undesignated and authorized preferred stock of the Company, par
value $0.001 per share, as the 15% Series E Convertible Preferred
Stock and setting forth the rights, preferences and limitations of
such Series E Preferred Stock.
The Series E Preferred Stock has a stated value of $1.00 per share.
Each holder of the Series E Preferred Stock is entitled to receive
dividends payable on the Stated Value of the Series E Preferred
Stock at a rate of 15% per annum. The Series E Preferred Stock is
convertible at the option of the holder thereof into such number of
common stocks of the Company, par value $0.001 per share, as is
determined by dividing the Stated Value per share plus accrued and
unpaid dividends thereon by the conversion price of $1.00, subject
to a 4.99% beneficial ownership limitation. Each holder of Series
E Preferred Stock also enjoys certain voting rights and preferences
upon liquidation.
About Clean Energy
Headquartered in Costa Mesa, California, Clean Energy Technologies,
Inc. -- http://www.cetyinc.com-- designs, produces and markets
clean energy products and integrated solutions focused on energy
efficiency and renewables. The Company provides waste heat
recovery solutions, waste to energy solutions, and engineering,
consulting and project management solutions.
Spokane, Washington-based Fruci & Associates II, PLLC, the
Company's auditor since 2015, issued a "going concern"
qualification in its report dated April 17, 2023, citing that the
Company has an accumulated deficit, a working capital deficit and
negative cash flows from operations. These factors, among others,
raise substantial doubt about the Company's ability to continue as
a going concern.
CLOVER FOOD LAB: Boston Eatery Hits Chapter 11 Bankruptcy
---------------------------------------------------------
Zeninjor Enwemeka of WBUR reports that Boston-based vegetarian fast
food chain Clover Food Lab filed for Chapter 11 bankruptcy
protection Friday, November 3, 2023, according to court records.
The company's filing in federal bankruptcy court in Delaware cited
low sales, high rent and lack of funding as reasons. According to
the filing, Clover Fast Food, Inc. is seeking relief under Chapter
11, so it can stabilize and restructure its business, which has not
had the post-pandemic resurgence the company hoped for.
"COVID changed everything for restaurants. The way people eat,
drink, work, and get together has shifted substantially," the
company told WBUR in a written statement about the bankruptcy,
adding "while we've seen a steady recovery in sales, they are still
below pre-pandemic levels."
Clover started as a food truck in 2008 and over the years expanded
to brick-and-mortar restaurants. The popular vegetable-focused
eatery is known for sourcing much of its ingredients locally.
Clover currently operates 12 restaurants, two kiosks within Whole
Foods markets, a catering business and meal box production and
delivery service.
During the pandemic, the company pivoted to selling meal boxes to
customers, and did get relief from government programs, Clover CEO
Julia Wrin Piper wrote in the filing.
"However, as we approach the end of 2023, restaurant traffic
remains lower than pre-pandemic levels at brick-and-mortar
locations, and all rental abatements and government assistance have
ceased," wrote Wrin Piper, who was recently named CEO.
The company had plans earlier this year to expand around New
England and into New York, and expected to raise capital for those
efforts. But those plans coincided with the failure of Silicon
Valley Bank and ensuing fallout, and Clover's funding efforts were
unsuccessful, according to the filing.
The company also faced challenges with the leases for three of its
restaurants , which have high rents and low sales. According to the
filing, the company tried to work with it landlords to find
solutions.
"Regrettably, these negotiations did not progress rapidly enough to
create long-term viability, which has led Clover to pursue relief
as a small business debtor under Subchapter V of Chapter 11 of the
Bankruptcy Code," Wrin Piper wrote in the filing.
Clover closed its Back Bay restaurant in August 2023, which was
losing $350,000 a year, after a legal challenge from its landlord
there. At the time, the company said it tried to find a solution
with its landlord, but that went nowhere.
According to its bankruptcy filing, Clover seeks to stabilize its
business by restructuring its operations and finances. In the
filing, the company said it will terminate the leases on its
locations that are underperforming and have above-market rent, sell
some of its delivery vehicles and restructure to focus on its most
profitable business lines.
"Clover is laser-focused on maintaining the high standard we’ve
always set for our food," the company's statement said.
"Customers’ continued support for Clover—eating in our
restaurants, ordering a home-delivered meal box—also benefits our
expansive network of local farmers and food producers, many of whom
rely on Clover's business."
About chain Clover Food Lab
Clover Food Lab -- https://www.cloverfoodlab.com --is a
Boston-based vegetarian fast food chain.
Clover Food Lab sought relief under Subchapter V of Chapter 11 of
the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 23-11812) on Nov.
3, 2023. In the petition filed by Julia Wrin Piper,chief executive
officer, the Debtor reports estimated assets and liabilities
between $1 million and $10 million each.
The Debtor is represented by:
Karen M. Grivner, Esq.
Clark Hill PLC
1075 Cambridge Street
Cambridge, MA 02139
COLPITTS SUNSET: Case Summary & 30 Largest Unsecured Creditors
--------------------------------------------------------------
Two affiliates that concurrently filed voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code:
Debtor Case No.
------ --------
Colpitts Sunset, LLC 23-01432
8939 Sepulveda Blvd., Ste. 110-223
Los Angeles, CA 90045
CS2 Real Estate Development LLC 23-01434
8939 Sepulveda Blvd., Ste. 110-223
Los Angeles, CA 90045
Business Description: The Debtors are engaged in activities
related to real estate.
Chapter 11 Petition Date: November 8, 2023
Court: United States Bankruptcy Court
Eastern District of Washington
Judge:
Debtors' Counsel: Dakota Pearce, Esq.
BUCHALTER, A PROFESSIONAL CORPORATION
1420 5th Ave., Suite 3100
Seattle WA 98101
Tel: (206) 319-7052
Email: dpearce@buchalter.com
Debtors'
Restructuring &
Financial
Advisor: PALADIN MANAGEMENT GROUP, LLC
Debtors'
Claims &
Noticing
Agent: BMC GROUP INC.
Estimated Assets: $50 million to $100 million
Estimated Liabilities: $100 million to $500 million
The petitions were signed by Lance Miller as manager of iCap
Pacific NW Management, LLC as the Manager of Colpitts Sunset, LLC.
Full-text copies of the petitions are available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/YHEQVAI/Colpitts_Sunset_LLC__waebke-23-01432__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/YNPCDJI/CS2_Real_Estate_Development_LLC__waebke-23-01434__0001.0.pdf?mcid=tGE4TAMA
List of Debtors' 30 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
1. Yongzhi Liang Money Loaned $10,543,746
103-2-1105, Bai Zi Wan Home,
Chaoyang District
Beijing, Beijing 100124
China
Email: bonniebinbin@126.com
2. Mingyi Hu Money Loaned $9,619,348
Room 2606, Qinzhou Mansion, No.6,
Lane 111, Qinzhou Road
Shanghai
China
Email: cansolh@gmail.com
3. CWN Holdings Limited Money Loaned $5,000,011
Trinity Chambers, PO Box 4301
Road Town, Tortola
British Virgin Island
Lin Lan Sun
Email: sun2015@vip.163.com
4. Devont Capital Limited Money Loaned $4,106,119
PO Box 4301, Road Town
Tortola, British Virgin Islands
British Virgin Islands
Lin Lan Sun
Email: sun2015@vip.163.com
5. Sinolite Industrial Co. Money Loaned $3,727,518
Bldg DEF, 19th Floor, Zhejiang Wuchan
Intl Plaza
No.445 Kaixuan Road, Jianggan District
Hangzhou
China
Zhanyun Zheng
Email: kassy@sinolite.net
6. Cooperativa De Seguros Multiples Money Loaned $2,765,640
PO Box 363846
San Juan, PR 00936
Ramon A. Rodriguez Rosa
Phone: 787-622-8585
Email: ramonr@segurosmultiples.com
7. Ruihua Ji Money Loaned $2,678,960
No. 11, Lane 688, Pingji Road, Minhang
District
Shangai, Shangai 201100
China
Email: jiruihua@gmail.com
8. Zheng Revocable Money Loaned $2,271,679
Foreign Grantor Trust
7307 N Division St. Suite 303
Spokane, WA 99208
Greg Bowman
Email: kassy@sinolite.net
aburgeson@nwtrustee.com
9. Chunying Tian Money Loaned $2,000,000
No. 102, 1st Floor, Unit 2, Building 11
No. 1999 Beichen Avenue, Weiyang
District
Xi'an, Shanxi
China
Email: wbyan1105@gmail.com
10. Universal Insurance Company Money Loaned $2,000,000
PO Box 71338
San Juan, PR 00936
Raul Ramirez
Phone: 787-706-7150
Email: raramirez@universalpr.com
11. Ruzhen Zhang Money Loaned $1,732,387
No.1904, Building 1, No. 1,
Shangdi Xinxi Road
Haidian District
Beijing, Beijing 100085
China
Email: reneeyangny@gmail.com
12. Qingxiao Jiang Money Loaned $1,616,716
Room 1201, Unit 2, BLD #8, Zhijing Yuan
Xixi Cheng Yuan, Xihu District
Hangzhou, Zhejiang 310000
China
Email: nickeyjiang@163.com
13. Tat Iu Money Loaned $1,422,689
Room 2301, Block A, Gaxaly Intl Building
167 Huancheng North Road
Hangzhou, Zhejiang 310005
China
Email: iutat@sina.com
14. Huimin Zhang Money Loaned $1,419,998
Xishan St, Building 1, Room 1-4-3
Dalian, Liaoning 116000
China
Email: dalianlfx@126.com
15. Kun Wang Money Loaned $1,315,140
No.144, Building 14, No.6
Crouching Tiger Bridge
Haidian District
Beijing, Beijing 100044
China
Email: mayandmay@sina.com
16. Zhuhua Li Money Loaned $1,296,196
17225 NE 126th Pl
Redmond, WA 98052
Email: springzhang66@gmail.com
17. Ping Zhang Money Loaned $1,258,981
Room 252, Unit 2, No. 67 East Orchard
Tongzhou District
Beijing, Beijing 101116
China
Email: joannaheart@163.com
18. Yunhua Liu Money Loaned $1,050,000
1155 Northeast 55th Street
Seattle, WA 98105
Phone: 443-256-8594
Email: 1669043402@qq.com
19. Robert W. Alfini Money Loaned $1,019,207
419 E. Orchard St.
Arlington Heights, IL 60005
Phone: 847-259-1871
Email: bobalfini@aol.com
20. Thomas and Jodi Temple Money Loaned $1,015,984
w/ rights of survivorship
21 Sycamore Ln.
Chester Springs, PA 19425
Thomas Temple
Phone: 484-467-3373
Email: tom_temple@me.com
21. Azure Blue Service Limited Money Loaned $1,000,002
Trinity Chambers, PO Box 4301, Road
Town
Tortola, British Virgin VG1110
United Kingdom
Xueqin Yang
Email: sun2015@vip.163.com
22. Peng Lyu and Li Tan Money Loaned $1,000,000
1124 E Lake Sammamish Pkwy NE
Sammamish, WA 98074
Peng Lyu
Email: lilian.tan@maxsolution.com.cn
23. Shiying Chen Money Loaned $946,390
1102, unit 1, building 5, Mingliyuan
Xixi Chengyuan, Xihu District
Hangzhou, Zhejiang 310012
China
Email: 8407046@qq.com
24. Ching-Ping Hu (Grace Shin) Money Loaned $942,299
3rd Flr, No. 143, Section 6
Nanjing East Road, Neihu District
Taipei City, Taiwan 114
Ching-Ping Hu
Email: jessica.cp.hu@gmail.com
25. Barry M. Abzug Revocable Trust Money Loaned $902,229
1949 Leonard Road Falls Church
Falls Church, VA 22043
Barry Abzug
Email: barry.abzug@verizon.net
26. Yi Xia Money Loaned $880,307
Building no.8, Lane 600
Fei Hong Road, Yangpu District
Shanghai, Shanghai
China
Email: xyi9458@gmail.com
27. Steven W. Shaw Money Loaned $793,689
11 River Park Drive
Cormwell, CT 06416
Phone: (860) 538-2347
Email: dr.shaw@shawchiropractic.com
28. Junming Chen Money Loaned $765,912
10-2-402 Zhichengyuan Xixichengyuan,
Xihu Dist.
Hangzhou, Zhejiang 310030
China
Email: jimmy@fsiheater.com
29. Elizabeth Plaza Money Loaned $750,000
1121 Parrotts Cove Rd
Greensboro, GA 30642
Email: eplaza@sconsultantsint.com
30. Yulan Ren Money Loaned $730,063
No. 5, Building 15, Meidu Huating
76 Lianhua North Road
Dujiangyan City, Sichuan Province 611800
China
Email: miloyezhu@gmail.com
COMMUNITY HEALTH: Reports $91MM Net Loss in 2023 Q3
---------------------------------------------------
Community Health Systems, Inc. has released its operating results
for the third quarter ended September 30, 2023.
The financial and operating highlights for the quarter include:
* Net operating revenues totaled $3.086 billion
* Net loss attributable to Community Health Systems, Inc.
stockholders was $91 million, or $0.69 per share (diluted),
compared to $42 million, or $0.32 per share (diluted), for the same
period in 2022. Excluding the adjusting items, the net loss
attributable to Community Health Systems, Inc. stockholders was
$0.33 per share (diluted), compared to $0.52 per share (diluted)
for the same period in 2022.
* Adjusted EBITDA was $360 million.
* Net cash provided by operating activities was $29 million
for the three months ended September 30, 2023, compared to $137
million for the same period in 2022.
* On a same-store basis, admissions increased 3.7 percent and
adjusted admissions increased 4.2 percent, compared to the same
period in 2022.
Commenting on the results, Tim L. Hingtgen, chief executive officer
of Community Health Systems, Inc., said, "Strong volume growth in
admissions, adjusted admissions, ER visits and clinic appointments
during the quarter reflect successful execution of many of our key
strategies, including investments in service lines, physician
recruitment, capacity optimization programs, and the maturity of
our transfer center services. Our local management teams are
focused on ensuring access to health services for their communities
and our healthcare workers continue to deliver high-quality care
for their patients."
The press release also includes the Company's 2023 updated annual
earnings guidance.
A full-text copy of the Company's report filed on Form 8-K with the
Securities and Exchange Commission is available at
https://tinyurl.com/4ffkmp9a
About Community Health Systems Inc.
Community Health Systems, Inc. -- http://www.chs.net-- is a
publicly traded hospital company and an operator of general acute
care hospitals in communities across the country. The Company's
affiliates are providers of healthcare services, developing and
operating healthcare delivery systems in 43 distinct markets across
15 states. As of Oct. 25, 2023, the Company's subsidiaries own or
lease 76 affiliated hospitals with over 12,000 beds and operate
more than 1,000 sites of care, including physician practices,
urgent care centers, freestanding emergency departments,
occupational medicine clinics, imaging centers, cancer centers and
ambulatory surgery centers.
* * *
As reported by the TCR on March 3, 2023, Moody's Investors Service
downgraded CHS/Community Health Systems, Inc.'s ("Community")
Corporate Family Rating to Caa1 from B3. Moody's said the
downgrade of Community's ratings reflects a significant increase in
the company's financial leverage and the uncertainty associated
with the company's ability to generate positive free cash flow
given the tough operating environment.
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.
CYXTERA TECHNOLOGIES: Selling All Assets to Brookfield for $775MM
-----------------------------------------------------------------
Cyxtera Technologies Inc. has entered into an asset purchase
agreement under which Brookfield Infrastructure Partners L.P.
(NYSE: BIP, TSX: BIP.UN) and its institutional partners will
acquire substantially all of Cyxtera's assets for $775 million.
In connection with the asset purchase agreement and the
court-supervised process, Brookfield will purchase from several
landlords the real estate at which seven of Cyxtera's U.S. data
centers are located. These transactions will allow Cyxtera to
increase existing facility ownership, secure expansion
opportunities in support of robust customer demand, and strengthen
its data center platform by giving Cyxtera more control over its
cost structure.
"We are pleased to reach this agreement with Brookfield, which
represents a favorable path forward for our customers, partners,
and employees," said Nelson Fonseca, Cyxtera's Chief Executive
Officer. "Throughout our restructuring process, our business has
continued to perform well, a testament to our customers' confidence
in our team and our innovative data center platform. This agreement
and the changes to the data center portfolio, most importantly our
increased facility ownership, will enable us to build on our
business momentum and better position Cyxtera for the future."
Among the transactions made in connection with the APA is a
comprehensive agreement with Digital Realty Trust, Inc. (NYSE: DLR)
and Digital Core REIT (SI: DCRU) for Brookfield to acquire the real
estate supporting several of Cyxtera's U.S. data centers.
Separately, Cyxtera has entered into an agreement with its
landlord, Digital Realty, to amend the terms of its current leases
at three U.S. sites and three international sites, to allow Cyxtera
to exit those sites in 2024 while providing a seamless transition
for customers.
Lastly, Cyxtera has signed an agreement to sell its business in its
Montreal and Vancouver data centers to Cologix.
Fonseca added, "With Brookfield's deep global infrastructure
expertise, experienced team, and demonstrated track record, we will
move ahead with a partner that recognizes the strength of our
business and will provide the guidance and resources to drive our
next phase of growth. We remain firmly committed to making this
transition as seamless as possible for all our stakeholders and we
look forward to continuing to serve our customers with the
innovative services and high levels of support they have come to
expect from Cyxtera."
The full terms of the APA have been filed with the U.S. Bankruptcy
Court for the District of New Jersey. The hearing to approve the
Company's Chapter 11 plan and transaction with Brookfield is
scheduled for November 16, 2023. In addition to court approval, the
APA is subject to regulatory approval and customary closing
conditions. The transaction with Brookfield is expected to close in
the first quarter of 2024.
About Cyxtera Technologies
Headquartered in Coral Gables, Fla., Cyxtera Technologies, Inc. --
https://www.cyxtera.com/ -- is a global data center company
providing retail colocation and interconnection services. The
Company provides a suite of connected and automated infrastructure
and interconnection solutions to more than 2,300 enterprises,
service providers and government agencies around the world --
enabling them to scale faster, meet rising consumer expectations
and gain a competitive edge.
Cyxtera and its affiliates sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. D.N.J. Lead Case No. 23-14853) on
June 4, 2023. In the petition signed by Eric Koza, chief
restructuring officer, the Debtor disclosed up to $131 million in
assets and up to $2.679 billion in liabilities.
Judge John K. Sherwood oversees the case.
The Debtors tapped Kirkland and Ellis LLP and Kirkland and Ellis
International LLP as general bankruptcy counsel, Cole Schotz P.C.
as co-bankruptcy counsel, Guggenheim Securities, LLC as investment
banker, AlixPartners LLP as restructuring advisor, and Kurtzman
Carson Consultants LLC as noticing and claims agent.
An ad hoc group of first lien lenders is represented by Gibson,
Dunn & Crutcher LLP as legal counsel and Houlihan Lokey, Inc. as
financial advisor.
On June 20, 2023, the U.S. Trustee for Region 3 appointed an
official committee to represent unsecured creditors. The committee
tapped Pachulski Stang Ziehl & Jones, LLP, as its legal counsel and
Alvarez & Marsal North America, LLC, as financial advisor.
DIAMOND SPORTS: Reaches Chapter 11 NBA Coverage Deal
----------------------------------------------------
Vince Sullivan of Law360 reports that Diamond Sports Group, the
bankrupt owner of 19 Bally Sports-branded regional sports networks,
told a Texas judge Monday, November 6, 2023, that it has reached
terms with the NBA that enables the debtor to continue broadcasting
games for the remainder of the 2023-24 season as the company
pursues a Chapter 11 plan.
About Diamond Sports Group
Diamond Sports Group, LLC and its affiliates own and/or operate the
Bally Sports Regional Sports Networks, making them the nation's
leading provider of local sports programming. DSG's 19 Bally Sports
RSNs serve as the home for 42 MLB, NHL, and NBA teams. DSG also
holds joint venture interests in Marquee, the home of the Chicago
Cubs, and the YES Network, the local destination for the New York
Yankees and Brooklyn Nets. The RSNs produce about 4,500 live local
professional telecasts each year in addition to a wide variety of
locally produced sports events and programs. DSG is an
unconsolidated and independently run subsidiary of Sinclair
Broadcast Group.
Diamond Sports Group and 29 of its affiliates sought relief under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Texas Lead Case
No. 23-90116) on March 14, 2023. In the petition filed by David F.
DeVoe, Jr., as chief financial officer and chief operating officer,
Diamond Sports Group listed $1 billion to $10 billion in both
assets and liabilities.
Judge Christopher M. Lopez oversees the cases.
The Debtors tapped Paul, Weiss, Rifkind, Wharton & Garrison, LLP
and Porter Hedges, LLP as bankruptcy counsel; Wilmer Cutler
Pickering Hale, Dorr, LLP and Quinn Emanuel Urquhart & Sullivan,
LLP as special counsel; AlixPartners, LLP as financial advisor;
Moelis& Company, LLC and LionTree Advisors, LLC as investment
bankers; Deloitte Tax, LLP as tax advisor; Deloitte Financial
Advisory Services, LLP as accountant; and Deloitte Consulting, LLP
as consultant. Kroll Restructuring Administration, LLC is the
claims agent.
The U.S. Trustee for Region 7 appointed an official committee to
represent unsecured creditors in the Debtors' Chapter 11 cases.
The committee tapped Akin Gump Strauss Hauer& Feld LLP as counsel;
FTI Consulting, Inc., as financial advisor; and Houlihan Lokey
Capital, Inc. as investment banker.
DIOCESE OF BUFFALO: Committee Taps Burns Bair as Insurance Counsel
------------------------------------------------------------------
The official committee of unsecured creditors appointed in the
Chapter 11 case of The Diocese of Buffalo, N.Y. seeks approval from
the U.S. Bankruptcy Court for the Western District of New York to
employ Burns Bair, LLP.
The committee requires a special insurance counsel to:
(a) analyze, investigate, and assess the availability of
coverage under the Debtor's insurances policies;
(b) represent the committee in the adversary proceedings by
and between the Debtor and its insurers, pending court approval;
(c) engage in potential mediation or other resolution of the
claims, demands, and lawsuits related to the Debtor's insurance
policies;
(d) advise, negotiate, and advocate on behalf of the committee
with respect to the Debtor's insurance policies; and
(e) provide related advice and assistance to the committee as
necessary.
The hourly rates of the firm's professionals are as follows:
Partners $900 - $1,120
Associates $550
Paraprofessionals $360
In addition, the firm will seek reimbursement for expenses
incurred.
Timothy Burns, Esq., a partner at Burns Bair, disclosed in a court
filing that his firm is a "disinterested person" as that term is
defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Timothy W. Burns, Esq.
Burns Bair, LLP
10 E. Doty Street, Suite 600
Madison, WI 53703
Telephone: (608) 286-2302
Email: tburns@burnsbair.com
About The Diocese of Buffalo N.Y.
The Diocese of Buffalo, N.Y., is home to nearly 600,000 Catholics
in eight counties in Western New York. The territory of the diocese
is co-extensive with the counties of Erie, Niagara, Genesee,
Orleans, Chautauqua, Wyoming, Cattaraugus, and Allegany in New York
State, comprising 161 parishes. There are 144 diocesan priests and
84 religious priests who reside in the Diocese.
The diocese through its central administrative offices (a) provides
operational support to the Catholic parishes, schools, and certain
other Catholic entities that operate within the territory of the
Diocese "OCE"; (b) conducts school operations through which it
provides parish schools with financial and educational support; (c)
provides comprehensive risk management services to the OCEs; (d)
administers a lay pension trust and a priest pension trust for the
benefit of certain employees and priests of the OCEs; and (e)
provides administrative support for St. Joseph Investment Fund,
Inc.
Dealing with sexual abuse claims, the Diocese of Buffalo sought
Chapter 11 protection (Bankr. W.D.N.Y. Case No. 20-10322) on Feb.
28, 2020. The diocese was estimated to have $10 million to $50
million in assets and $50 million to $100 million in liabilities as
of the bankruptcy filing.
The Honorable Carl L. Bucki is the case judge.
Bond, Schoeneck & King, PLLC, led by Stephen A. Donato, Esq., is
the diocese's counsel; Connors LLP and Lippes Mathias Wexler
Friedman LLP are its special litigation counsel; and Phoenix
Management Services, LLC is its financial advisor. Stretto is the
claims agent, maintaining the page:
https://case.stretto.com/dioceseofbuffalo/docket
The U.S. Trustee for Region 2 appointed a committee of unsecured
creditors on March 12, 2020. The committee tapped Pachulski Stang
Ziehl & Jones, LLP and Gleichenhaus, Marchese & Weishaar, PC as
bankruptcy counsel, and Burns Bair LLP as special insurance
counsel.
DIOCESE OF SAN FRANCISCO: Comm. Taps Berkeley as Financial Advisor
------------------------------------------------------------------
The official committee of unsecured creditors appointed in the
Chapter 11 case of the Roman Catholic Archbishop of San Francisco
seeks approval from the U.S. Bankruptcy Court for the Northern
District of California to employ Berkeley Research Group, LLC as
its financial advisor.
The firm's services include:
a. assisting the Committee in investigating the assets,
liabilities and financial condition of the Debtor or the Debtor's
operations and the desirability of the continuance of any portion
of those operations, including a review of any donor restrictions
on the Debtor's assets;
b. assisting the Committee in the review of financial related
disclosures required by the Court and/or Bankruptcy Code, including
the Schedules of Assets and Liabilities, the Statement of Financial
Affairs, and Monthly Operating Reports;
c. analyzing the Debtor's accounting reports and financial
statements to assess the reasonableness of the Debtor's financial
disclosures;
d. providing forensic accounting and investigations with
respect to transfers of the Debtor's assets and recovery of
property of the estate;
e. assisting the Committee in evaluating the Debtor's
ownership interests of property alleged to be held in trust by the
Debtor for the benefit of third parties and/or property alleged to
be owned by non-debtor entities;
f. assisting the Committee in reviewing and evaluating any
proposed asset sales and/or and other asset dispositions;
g. assisting the Committee in the evaluation of the Debtors'
organizational structure, including its relationship with the
related Catholic non-debtor organizations and parishes that may
hold or have received property of the estate;
h. assisting the Committee in evaluating the Debtor's cash
management system, including unrestricted and restricted funds,
deposit and loan programs, and pooled income or investment funds;
i. assisting the Committee in the review of financial
information that the Debtor may distribute to creditors and others,
including, but not limited to, cash flow projections and budgets,
cash receipt and disbursement analyses, analyses of various asset
and liability accounts, and analyses of proposed transactions for
which Court approval is sought;
j. attendance at meetings and assistance in discussions with
the Debtor, the Committee, the U.S. Trustee, and other parties in
interest and professionals hired by the above-noted parties as
requested;
k. assisting in the review and/or preparation of information
and analyses necessary for the confirmation of a plan, or for the
objection to any plan filed in this Case which the Committee
opposes;
l. assisting the Committee in its evaluation of the Debtor's
solvency;
m. assisting the Committee with the evaluation and analysis of
claims, and on any litigation matters, including, but not limited
to, avoidance actions for fraudulent conveyances and preferential
transfers, and declaratory relief actions concerning the property
of the Debtor's estate;
n. analyzing the flow of funds in and out of accounts the
Debtor contends contain assets held in trust for others, to
determine whether the funds were commingled with non-trust funds
and lost their character as trust funds, under applicable legal and
accounting principles; and
o. assisting the Committee with respect to any adversary
proceedings that may be filed in the Debtor's Case and providing
such other services to the Committee as may be necessary in this
Case.
The firm's current hourly rates are as follows:
Matthew Babcock $725
Ray Strong $780
Paul Shields $815
Managing Director $725 to $1,130
Director & Associate Director $450 to $725
Professional Staff $225 to $450
Support Staff $150 to $225
As disclosed in the court filings, Berkeley is a "disinterested"
person within the meaning of Sec. 101(14) of the Bankruptcy Code,
does not hold or represent an interest adverse to the Debtor or
other parties in interest in the Case.
The firm can be reached through:
Matthew K. Babcock
Berkeley Research Group, LLC
201 S. Main, Suite 450
Salt Lake City, UT 84111
Phone: (801) 321 0076
Email: mbabcock@thinkbrg.com
About The Roman Catholic Archbishop
of San Francisco
The Roman Catholic Archbishop of San Francisco filed Chapter 11
petition (Bankr. N.D. Cal. Case No. 23-30564) on Aug. 21, 2023,
with $100 million to $500 million in both assets and liabilities.
Judge Dennis Montali oversees the case.
The Debtor tapped Felderstein Fitzgerald Willoughby Pascuzzi &
Rios, LLP and Sheppard, Mullin, Richter & Hampton LLP as counsel.
Weintraub Tobin Chediak Coleman & Grodin as special litigation
counsel. Weinstein & Numbers, LLP as special insurance counsel.
GlassRatner Advisory & Capital Group LLC d/b/a B. Riley Advisory
Services as financial advisor. Omni Agent Solutions, Inc. as
administrative agent.
On September 1, 2023, the United States Trustee appointed an
official committee of unsecured creditors in this Chapter 11 case.
The committee tapped Pachulski Stang Ziehl & Jones LLP as its
counsel.
DRW HOLDINGS: Moody's Affirms Ba2 CFR & Alters Outlook to Negative
------------------------------------------------------------------
Moody's Investors Service has affirmed DRW Holdings, LLC's
Corporate Family Rating at Ba2, as well as its long-term Issuer
Rating and the rating of its senior secured first lien term loan at
Ba3, and changed the outlook to negative from stable.
RATINGS RATIONALE
The affirmation of the Ba2 CFR reflects DRW's solid financial
performance in 2023 to date and its position and track record as a
technology-driven trading organization that commands strong market
shares in numerous futures and options contracts. DRW is
diversified by trading strategy, asset class and venue, which
provides some cushion against shifting trading environments. In
addition, DRW's stable and experienced management team has
demonstrated an ability to nimbly respond to changing market
conditions, which has benefitted trading revenues.
The change in DRW's outlook to negative from stable reflects a
challenging environment for commercial real estate (CRE) and DRW
maintains a portfolio of CRE investments, that are substantially
illiquid compared with its trading assets. Since 2019, DRW has
reduced its equity capital committed to CRE, leaving a greater
proportion of the firm's retained tangible equity available to
support trading strategies. The CRE portfolio is generally
diversified by property type and by geography. All commercial real
estate investments are non-recourse to DRW and only a small portion
of properties face loan maturities in 2024. The portfolio also
generates a stream of cash flows to the group, which are generally
uncorrelated to DRW's trading businesses. DRW intends to continue
to reduce its CRE portfolio in the next two to three years.
Notwithstanding these positive features of DRW's CRE activities,
the CRE sector itself is undergoing a period of uncertainty and
challenges, that could adversely affect DRW should there be a
sustained period of declining CRE values and sectoral strains.
Generally, DRW has been able to liquidate CRE holdings at levels
very close to their respective fair market valuations and
continuing reduction in these positions at levels close to their
book values will be an important factor in returning the rating
outlook to stable.
The Ba2 CFR also reflects DRW's limited diversification into less
capital-intensive businesses and the inherently high level of
operational risk of its trading activities. The inherent
operational risk underlying its activities could result in rapid
and severe losses and a deterioration in liquidity and funding in
the event of a severe risk management failure. DRW's trading
approach creates some reliance on prime brokers and the firm has
been managing this risk by adding and diversifying brokers. The
firm also maintains a liquidity reserve, held in readily available
cash and liquid instruments, which covers observed historical
liquidity requirements measured at a high confidence level.
DRW's trading often involves arbitraging closely related risk
positions across cash and derivatives markets and across venues
with many counterparties. This can result in relatively large
balances of risk, financing and settlement related positions.
Although the market risk of these positions are closely related and
offset, these strategies can generate high levels of reported
leverage. DRW carefully controls this risk through its emphasis on
liquid instruments, diversification of funding counterparties and
by shrinking the balance sheet when market opportunities recede.
DRW also maintains a smaller portfolio of less liquid venture
capital investments. The venture capital portfolio generally
focuses on applied technologies to enhance DRW's trading
capabilities or opportunities and Moody's expects these investments
to continue.
The one notch differential between the Ba2 CFR and the holding
company's Ba3 issuer and bank credit facility ratings recognizes
the holding company's structural subordination to DRW's operating
companies, where the preponderance of the group's debt and
debt-like obligations reside.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
As the outlook is currently negative, an upgrade is unlikely. In
the longer term, DRW's ratings could be upgraded if the firm
continues to successfully reduce its CRE investment portfolio and
if it significantly expands its market share while diversifying its
revenue through the development of lower risk and profitable
business activities; continue to reduce its trading capital
dedicated to less-liquid and higher risk assets; and further
bolster its capital and liquidity, while continuing to strengthen
and diversify its key prime brokerage and counterparty
relationships resulting in a more durable liquidity profile.
DRW's ratings could be downgraded should it increase its risk
appetite or suffer from a risk management or operational failure;
incur substantial losses on its CRE portfolio; sustain reduced
profitability from changes in the market or regulatory environment;
increase its capital distributions in a manner that is not
commensurate with its historic trends; increases its investments in
less liquid assets; or change its funding mix to a significantly
heavier weighting towards long-term debt and away from equity.
PRINCIPAL METHODOLOGY
The principal methodology used in these ratings was Securities
Industry Market Makers Methodology published in November 2019.
EAGLE MECHANICAL: Taps Dentons Bingham Greenebaum as Mediator
-------------------------------------------------------------
Eagle Mechanical Inc. seeks approval from the U.S. Bankruptcy Court
for the Southern District of Indiana to employ Thomas Scherer, a
partner at Dentons Bingham Greenebaum, as mediator.
The Debtor requires the services of Mr. Scherer to mediate the
issues concerning Plumbers Supply Co.'s application for allowance
and payment of administrative expense and First Merchants'
objection to the application.
Mr. Scherer will be paid at his standard hourly rate of $400.
In court filings, Mr. Scherer disclosed that he is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
Mr. Scherer can be reached at:
Thomas C. Scherer
Dentons Bingham Greenebaum LLP
2700 Market Tower
10 West Market Street
Indianapolis, IN 46204
Telephone: (317) 968-5407
About Eagle Mechanical
Eagle Mechanical Inc. filed Chapter 11 petition (Bankr. S.D. Ind.
Case No. 23-00291) on January 27, 2023. In the petition signed by
its chief executive officer, Rogelio Mancilla Jr., the Debtor
disclosed $7,751,209 in assets and $9,136,761 in liabilities.
Judge James M. Carr oversees the case.
Weston E. Overturf, Esq., at Kroger Gardis & Regas, LLP is the
Debtor's legal counsel.
EAST CENTRAL VERMONT: S&P Assigns 'BB' Rating on 2023A Bonds
------------------------------------------------------------
S&P Global Ratings assigned its 'BB' rating to the East Central
Vermont Telecommunications District's (the district) proposed $7.53
million series 2023A bonds. The outlook is stable.
The East Central Vermont Telecommunications District, formed in
2015, does business as ECFiber. The district provides internet and
voice over internet service to retail customers in 31 Vermont
municipalities. The district does not provide content.
"We could lower the rating if debt service coverage, liquidity, or
leverage metrics are weaker than projected because the district is
unable to secure grant money, realizes weaker than projected
customer growth, encounters higher than forecast system expansion
costs, or customers cancel service due to the district imposing
higher monthly charges or migrate to alternative providers'
offerings," said S&P Global Ratings credit analyst David Bodek.
"We do not expect to raise the rating within our two-year outlook
horizon without evidence that the district is achieving its
customer growth projections and produces consistently strong
financial metrics. In addition, we are monitoring the interplay
among system expansion costs, operating costs, and customers'
acceptance of monthly service charges and their effects on
financial performance.
"The stable outlook reflects our view that the district's 1.25x
rate covenant requirement obligates management to adjust monthly
user fees to address lower than projected customer additions."
ELEMENT CONSTRUCTION: Case Summary & 20 Top Unsecured Creditors
---------------------------------------------------------------
Debtor: Element Construction Corporation
182 W. Waukesha St.
Meridian, ID 83646
Business Description: The Debtor is a full-service custom builder.
Chapter 11 Petition Date: November 9, 2023
Court: United States Bankruptcy Court
District of Idaho
Case No.: 23-00602
Judge: Hon. Noah G Hillen
Debtor's Counsel: Patrick J. Geile, Esq.
FOLEY FREEMAN, PLLC
953 S. Industry Way
Meridian, ID 83642
Tel: (208) 888-9111
Email: pgeile@foleyfreeman.com
Estimated Assets: $0 to $50,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Justin Todd Hubble as president.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 20 largest unsecured creditors is available
for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/RGNHFJY/Element_Construction_Corporation__idbke-23-00602__0001.0.pdf?mcid=tGE4TAMA
FREDDIE MAC: Announces Tender Offer for STACR Notes
---------------------------------------------------
Freddie Mac disclosed in a Form 8-K Report filed with the
Securities and Exchange Commission that the Company has commenced a
fixed-price cash tender offer for the purchase of any and all of
the Structured Agency Credit Risk Notes beginning Friday, November
3, 2023. Certain of the classes of Notes subject to the Offer were
issued by the STACR Trust. Freddie Mac is the holder of the owner
certificate issued by each Trust and, as a result, the sole
beneficial owner of each Trust.
Freddie Mac has engaged Wells Fargo Securities, LLC and BofA
Securities, Inc. as lead dealer managers and Academy Securities,
Inc. as co-dealer manager for the Offer. Freddie Mac is offering to
purchase any and all of the Notes. The applicable Total
Consideration to be paid by Freddie Mac to holders that tender
Notes accepted for purchase pursuant to the Offer will be
calculated based on the original principal amount of such tendered
and accepted Notes, the applicable factor, and the applicable
Tender Offer Consideration, plus any accrued and unpaid interest
under the applicable Debt Agreement or Indenture upon the terms and
subject to the conditions set forth in the Offer to Purchase dated
November 3, 2023 and related Notice of Guaranteed Delivery dated
November 3.
The tender offer period commenced on Friday, November 3, 2023, and
expires on November 9, unless extended. Holders must validly tender
their Notes at or prior to the Expiration Time. Notes validly
tendered may be withdrawn at any time at or prior to November 9,
unless extended by Freddie Mac, but not thereafter.
Holders whose Notes are purchased in the Offer will receive accrued
and unpaid interest from the last interest payment date to, but not
including, the Settlement Date for the Notes. Freddie Mac expects
the Settlement Date to occur on November 14, 2023. Any Notes
tendered using the Notice of Guaranteed Delivery and accepted for
purchase are expected to be purchased on November 16, but payment
of accrued interest on such Notes will only be made to, but not
including, the Settlement Date.
A full-text of the report is available at
https://tinyurl.com/4esrabpt
About Freddie Mac
The Federal Home Loan Mortgage Corporation, commonly known as
Freddie Mac, is a GSE chartered by Congress in 1970. The McLean,
Va.-based Company's public mission is to provide liquidity,
stability, and affordability to the U.S. housing market. Freddie
Mac does this primarily by purchasing residential mortgage loans
originated by lenders. In most instances, it packages these loans
into guaranteed mortgage-related securities, which are sold in the
global capital markets and transfer interest-rate and liquidity
risks to third-party investors. In addition, the Company transfers
mortgage credit risk exposure to third-party investors through its
credit risk transfer programs, which include securities- and
insurance-based offerings. The Company also invests in mortgage
loans and mortgage-related securities. The Company does not
originate loans or lend money directly to mortgage borrowers.
Since September 2008, Freddie Mac has been operating under
conservatorship with FHFA as Conservator.
FTX GROUP: DOJ Says Bankruptcy Examiner Needed to Probe Collapse
----------------------------------------------------------------
Jennifer Kay of Bloomberg Law reports that a federal bankruptcy
court should have considered its ability to control the costs of an
independent investigation of FTX before refusing to appoint such an
examiner, according to an attorney for the US watchdog that
monitors corporate bankruptcies.
The FTX case meets statutory requirements for a mandatory
appointment of such an examiner, and the court has "significant
discretion to set the scope, duration, and cost of the ultimate
examination," Brian Springer of the US Department of Justice, an
attorney for the watchdog known as the US Trustee, said Wednesday,
November 8, 2023, in a hearing before a three-judge panel.
About FTX Group
FTX is the world's second-largest cryptocurrency firm. FTX is a
cryptocurrency exchange built by traders, for traders. FTX offers
innovative products including industry-first derivatives, options,
volatility products and leveraged tokens.
Then CEO and co-founder Sam Bankman-Fried said Nov. 10, 2022, that
FTX paused customer withdrawals after it was hit with roughly $5
billion worth of withdrawal requests.
Faced with liquidity issues, FTX on Nov. 9 struck a deal to sell
itself to its giant rival Binance, but Binance walked away from the
deal amid reports on FTX regarding mishandled customer funds and
alleged US agency investigations.
At 4:30 a.m. on Nov. 11, Bankman-Fried ultimately agreed to step
aside, and restructuring vet John J. Ray III was quickly named new
CEO.
FTX Trading Ltd (d/b/a FTX.com), West Realm Shires Services Inc.
(d/b/a FTX US), Alameda Research Ltd. and certain affiliated
companies then commenced Chapter 11 proceedings (Bankr. D. Del.
Lead Case No. 22-11068) on an emergency basis on Nov. 11, 2022.
Additional entities sought Chapter 11 protection on Nov. 14, 2022.
FTX Trading and its affiliates each listed $10 billion to $50
million in assets and liabilities, making FTX the biggest
bankruptcy filer in the US this year.
According to Reuters, SBF shared a document with investors on Nov.
10, 2022, showing FTX had $13.86 billion in liabilities and $14.6
billion in assets. However, only $900 million of those assets were
liquid, leading to the cash crunch that ended with the company
filing for bankruptcy.
The Hon. John T. Dorsey is the case judge.
The Debtors tapped Sullivan & Cromwell, LLP as bankruptcy counsel;
Landis Rath & Cobb, LLP as local counsel; and Alvarez & Marsal
North America, LLC as financial advisor. Kroll is the claims agent,
maintaining the page https://cases.ra.kroll.com/FTX/Home-Index
The Official Committee of Unsecured Creditors tapped Paul Hastings
as counsel, FTI Consulting, Inc., as financial advisor, and
Jefferies LLC as the investment banker. Young Conaway Stargatt &
Taylor LLP is the Committee's Delaware and conflicts counsel.
Montgomery McCracken Walker & Rhoads LLP, led by partners Gregory
T. Donilon, Edward L. Schnitzer, and David M. Banker, is
representing Sam Bankman-Fried in the Chapter 11 cases.
White-collar crime specialist Mark S. Cohen has reportedly been
hired to represent SBF in litigation. Lawyers at Paul Weiss
previously represented SBF but later renounced representing the
entrepreneur due to a conflict of interest.
FTX TRADING: Acaena, GGC Int'l. Step Down as Committee Members
--------------------------------------------------------------
The U.S. Trustee for Regions 3 and 9 announced in a court filing
the resignation of Acaena Amoros Romero and GGC International Ltd.
as members of the official committee of unsecured creditors in the
Chapter 11 cases of FTX Trading Ltd. and its affiliates.
The remaining members of the committee are:
1. Zachary Bruch, an individual creditor
Attn: Peter S. Partee, Sr., Esq.
Hunton Andrews Kurth LLP
200 Park Ave.
New York, NY 10166
Phone: (212) 309-1056
Email: ppartee@huntonAK.com
2. Coincident Capital International, Ltd.
c/o Sunil Shah
1805 N. Carson City St., Suite X-108
Carson City, NV 89701
Phone: (714) 586-7703
Email: ftxcc@coincidentcapital.com
3. Octopus Information Ltd.
OMC Chambers
Wickhams Cay 1, Road Town
Tortola, British Virgin Islands
Email: octopus_ftx@teamb.cn
4. Pulsar Global Ltd.
Attn: Michele Wan and Jacky Yip
Unit 903-905, K11 Atelier Victoria Dockside
18 Salisbury Road
Kowloon, Hong Kong
Phone: (+852 90176586)
Email: michele.wan@pulsar.com
jacky.yip@pulsar.com
5. Larry Qian, an individual creditor
6. Wincent Investment Fund PCC Ltd.
c/o Wincent Capital Management
Old Police Station, 120B Irish Town
Gibraltar, GX11 1AA
Email: legal@wincent.co
7. Wintermute Asia PTE. Ltd.
1 Ashley Road
Altrincham, Greater Manchester
United Kingdom, WA14 2DT
Email: legal@wintermute.com
About FTX Trading
FTX is the world's second-largest cryptocurrency firm. FTX is a
cryptocurrency exchange built by traders, for traders. FTX offers
innovative products including industry-first derivatives, options,
volatility products and leveraged tokens.
Then CEO and co-founder Sam Bankman-Fried said Nov. 10, 2022, that
FTX paused customer withdrawals after it was hit with roughly $5
billion worth of withdrawal requests.
Faced with liquidity issues, FTX on Nov. 9 struck a deal to sell
itself to its giant rival Binance, but Binance walked away from the
deal amid reports on FTX regarding mishandled customer funds and
alleged US agency investigations.
At 4:30 a.m. on Nov. 11, Bankman-Fried ultimately agreed to step
aside, and restructuring vet John J. Ray III was quickly named new
CEO.
FTX Trading Ltd (d/b/a FTX.com), West Realm Shires Services Inc.
(d/b/a FTX US), Alameda Research Ltd. and certain affiliated
companies then commenced Chapter 11 proceedings (Bankr. D. Del.
Lead Case No. 22-11068) on an emergency basis on Nov. 11, 2022.
Additional entities sought Chapter 11 protection on Nov. 14, 2022.
FTX Trading and its affiliates each listed $10 billion to $50
million in assets and liabilities, making FTX the biggest
bankruptcy filer in the US this year. According to Reuters, SBF
shared a document with investors on Nov. 10, 2022, showing FTX had
$13.86 billion in liabilities and $14.6 billion in assets. However,
only $900 million of those assets were liquid, leading to the cash
crunch that ended with the company filing for bankruptcy.
The Hon. John T. Dorsey is the case judge.
The Debtors tapped Sullivan & Cromwell, LLP as bankruptcy counsel;
Landis Rath & Cobb, LLP as local counsel; and Alvarez & Marsal
North America, LLC as financial advisor. Kroll is the claims
agent.
The official committee of unsecured creditors tapped Paul Hastings
as counsel, FTI Consulting, Inc., as financial advisor, and
Jefferies LLC as the investment banker. Young Conaway Stargatt &
Taylor LLP is the committee's Delaware and conflicts counsel.
Montgomery McCracken Walker & Rhoads LLP, led by partners Gregory
T. Donilon, Edward L. Schnitzer, and David M. Banker, is
representing Sam Bankman-Fried in the Chapter 11 cases.
White-collar crime specialist Mark S. Cohen has reportedly been
hired to represent SBF in litigation. Lawyers at Paul Weiss
previously represented SBF but later renounced representing the
entrepreneur due to a conflict of interest.
Katherine Stadler, the court-appointed fee examiner, is represented
by Godfrey & Kahn, SC.
White-collar crime specialist Mark S. Cohen has reportedly been
hired to represent SBF in litigation. Lawyers at Paul Weiss
previously represented SBF but later renounced representing the
entrepreneur due to a conflict of interest.
GLOBALSTAR INC: Incurs $6.2 Million Net Loss in Third Quarter
-------------------------------------------------------------
Globalstar, Inc. filed with the Securities and Exchange Commission
its Quarterly Report on Form 10-Q disclosing a net loss of $6.17
million on $57.68 million of total revenue for the three months
ended Sept. 30, 2023, compared to a net loss of $204.36 million on
$37.63 million of total revenue for the three months ended Sept.
30, 2022.
For the nine months ended Sept. 30, 2023, the Company reported a
net loss of $9.64 million on $171.40 million of total revenue
compared to a net loss of $251.58 million on $107.20 million of
total revenue for the nine months ended Sept. 30, 2022.
As of Sept. 30, 2023, the Company had $910.61 million in total
assets, $184.65 million in total current liabilities, $342.59
million in total non-current liabilities, and $383.37 million in
total stockholders' equity.
The principal amount of the Company's debt and vendor financing
outstanding was $375.4 million at Sept. 30, 2023, compared to
$202.8 million at Dec. 31, 2022.
As of Sept. 30, 2023, the Company held cash and cash equivalents of
$64.1 million, compared to $32.1 million as of Dec. 31, 2022. Over
the next twelve months, the Company's sources of cash are also
expected to include operating cash flows generated from the
business and payments under the 2023 Funding Agreement. These
sources of cash will be used to pay capital expenditures associated
with the new satellites and associated launch costs as well as debt
service costs.
Management Comments
"Globalstar continued to sustain its record growth this year, with
a significant improvement in profitability during the third quarter
driven by a 53% increase in total revenue. Given the high margin
nature of our revenue sources, Adjusted EBITDA increased 125% over
the third quarter of last year. We continued to see momentum build
outside of our wholesale services, reflecting new initiatives in
Commercial IoT," said Rebecca Clary, chief financial officer.
Clary continued, "As a result, we are increasing guidance for 2023
total revenue to a new range between $215 and $230 million."
Dr. Paul E. Jacobs, chief executive officer, said, "Twenty-five
years ago yesterday, my father made the first satellite phone call
on the Globalstar network to Bernard Schwarz, his partner at Loral.
Today, I'm excited to be leading Globalstar as we embark on a new
chapter that builds on their vision. New applications, services,
and network configurations are driving increased demand for
connectivity, on the ground and from space. Globalstar has the
technology and team to capitalize on these opportunities."
"My first sixty days were spent meeting with customers and partners
and reviewing our products and projects. I met with our teams
across the country, as well as with shareholders and industry
analysts. There is a lot of excitement about Globalstar's
potential."
Dr. Jacobs continued, "We can deliver solutions at scale across the
globe. As we position the Company for longer term growth, we are
evaluating significant opportunities, both satellite and
terrestrial. Furthermore, our new XCOMP technology, which enhances
wireless performance including spectral efficiency, opens an
entirely new revenue category for us going forward."
"The transformation over the last year and performance to date
reflects just the beginning of our efforts. We have new satellites
underway, an expanding Band 53-capable ecosystem, and the ability
to provide services to a large and ever increasing number of people
around the world. Our continuing goal is to leverage our unique
assets, our proprietary technologies and our team's industry
leadership to differentiate our products and services in the space
and terrestrial markets."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1366868/000136686823000141/gsat-20230930.htm
About Globalstar, Inc.
Headquartered in Covington, Louisiana, Globalstar Inc. provides
Mobile Satellite Services ("MSS") including voice and data
communications services globally via satellite. The Company offers
these services over its network of in-orbit satellites and its
active ground stations), which the Company refers to collectively
as the Globalstar System. In addition to supporting Internet of
Things ("IoT") data transmissions in a variety of applications, the
Company provides reliable connectivity in areas not served or
underserved by terrestrial wireless and wireline networks and in
circumstances where terrestrial networks are not operational due to
natural or man-made disasters.
Globalstar reported a net loss of $256.92 million in 2022, a net
loss of $112.62 million in 2022 following a net loss of $109.64
million in 2021.
* * *
Egan-Jones Ratings Company on August 9, 2023, maintained its 'CC'
foreign currency and local currency senior unsecured ratings on
debt issued by Globalstar, Inc.
GRUN PROPERTIES: Voluntary Chapter 11 Case Summary
--------------------------------------------------
Debtor: Grun Properties LLC
197 Gray Road
Cumberland Center, ME 04021
Business Description: Grun Properties is a single purpose LLC
engaged in the business leasing of a
commercial office building in Cumberland,
Maine.
Chapter 11 Petition Date: November 7, 2023
Court: United States Bankruptcy Court
District of Maine
Case No.: 23-20234
Judge: Hon. Peter G. Cary
Debtor's Counsel: George J. Marcus, Esd.q
MARCUS CLEGG
16 Middle Street Unit 501A
Portland, ME 04101
Tel: (207) 828-8000
Email: bankruptcy@marcusclegg.com
Total Assets as of October 31, 2023: $3,966,600
Total Debts as of October 31, 2023: $3,702,667
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Marlene Eaton as sole member and manager
of Grun Properties, LLC.
The Debtor said it has no unsecured creditors.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/DT2YTGI/Grun_Properties_LLC__mebke-23-20234__0001.0.pdf?mcid=tGE4TAMA
HALMAR LLC: Unsecureds to be Paid in Full over 60 Months
--------------------------------------------------------
Halmar, LLC, filed with the U.S. Bankruptcy Court for the Central
District of California an Original Disclosure Statement describing
Subchapter V Plan dated October 31, 2023.
The Debtor is the owner of three parcels of real property, on which
two distinct businesses operate.
The two adjacent parcels collectively as 320 High Street, in
Delano, California (the "High Street Property"), are home to the
historically significant Hal Mar Inn, which was built in the 1940s
and included a cocktail lounge and an upstairs card room known as
the Jack of Diamonds Casino, as well as a residence with a
connecting door to the hotel.
The Debtor's third parcel of land is commonly known as 13074
Zachary Avenue, in McFarland, California (the "Zachary Property")
which is an eight-acre industrial property on the triangular corner
of Famoso Porterville Highway, Zachary Avenue and Sherwood Avenue.
The COVID-19 Pandemic significantly delayed the Debtor's efforts to
complete the construction and rehabilitation of the High Street
Property and the Zachary Property resulting in the Debtor's
inability to service the loans from IMAGE. As a result, IMAGE
sought to foreclose on the properties. The Debtor filed the instant
chapter 11 case in order to provide breathing space to complete the
re-positioning of its properties and propose a plan to of
reorganization to that pays claims in accordance with the
provisions of the Bankruptcy Code.
The Debtor has employed Central Valley Commercial Broker to assist
in locating tenants. Mr. Sarbaz will make equity contributions to
fund the Plan to the extent rental income is not available or
sufficient to make the Plan payments.
Class 5 consists of General Unsecured Claims. This Class shall be
paid in full with no interest over 60 months. This Class shall
receive $1,000 per month commencing on the Effective Date for 59
months and the amount of $120,302.44 in month 60. The allowed
unsecured claims total $179,302.44. This Class is impaired.
Class 6 consists of membership interests of Amir Sarbaz. This Class
shall retain pre-Petition interests.
The Debtor will fund the plan via its business income as set forth
in the projections, to the extent rental income is insufficient the
Debtor's principal Amir Sarbaz will make equity contributions to
the Debtor to fund the Plan.
A full-text copy of the Disclosure Statement dated October 31, 2023
is available at https://urlcurt.com/u?l=kBzvQS from
PacerMonitor.com at no charge.
Attorneys for the Debtor:
Jeffrey S. Shinbrot, Esq.
JEFFREY S. SHINBROT, APLC
15260 Ventura Blvd., Suite 1200
Sherman Oaks, CA 91403
Telephone: (310) 659-5444
Facsimile: (310) 878-8304
Email: jeffrey@shinbrotfirm.com
About Halmar, LLC
Halmar, LLC is a real estate development firm in Los Angeles,
Calif.
The Debtor filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. C.D. Cal. Case No. 23-15032) on Aug. 5,
2023, with $4,300,000 in assets and $3,630,789 in liabilities. Amir
Sarbaz, managing member, signed the petition.
Judge Barry Russell oversees the case.
Jeffrey S. Shinbrot, Esq., at Jeffrey S. Shinbrot, APLC, is the
Debtor's legal counsel.
HARBOUR GRACE: Commences CCAA Proceedings
-----------------------------------------
Harbour Grace Ocean Enterprises Ltd. and Laurenceton Holdings Ltd.
("Companies") applied for and received an order ("Initial Order")
for creditor protection pursuant to the Companies' Creditors
Arrangement Act, as amended ("CCAA Proceedings") from the Supreme
Court of Newfoundland and Labrador in Bankruptcy and Insolvency
("Court"). The Initial Order, among other things:
a) Appointed PricewaterhouseCoopers Inc., LIT ("PwC") as monitor
of the Companies ("Monitor");
b) Approved a stay of proceedings up to and including Nov. 14,
2023 ("Stay Period"), which applies against the Applicants or the
Monitor, or the Companies' Property and Business, or against any of
the former, current or future directors or officers of the
Companies;
c) Authorized the Companies to continue to use the central cash
management system ("CMS") currently in place or replace it with
another substantially similar CMS; Granted a first ranking charge,
in the amount of $105,000 ("Administration Charge"), on the
Property of the Companies, as security for the professional fees
and disbursements of the Monitor, the Monitor's counsel and the
Companies' counsel, which charge shall rank in priority to all
other security interests, trusts, liens, charges and encumbrances,
claims of secured creditors, statutory or otherwise
("Encumbrances");
d) Authorized the Companies to borrow under a credit facility
from Gray Enterprises Ltd. ("DIP Lender") in order to finance the
Companies' working capital requirements and other general corporate
purposes and capital expenditures, provided that borrowings under
such credit facility shall not exceed $255,000 ("DIP Facility"),
unless permitted by further order of this Court;
e) Granted a second ranking charge in favour of the DIP Lender
over the Property of the Companies to a maximum amount of $255,000,
as security for the DIP Facility ("DIP Lender's Charge"), which
charge shall rank in priority to the Encumbrances; and
f) Granted a third ranking charge, in the amount of $150,000
("Directors' Charge"), on the Property of the Applicants, as
security for the indemnity granted to the Comnpanies' directors and
officers, which charge shall rank in priority to the Encumbrances.
In accordance with section 23 (1)(ii)(b) of the CCAA and the
Initial Order, on Nov. 8, 2023, a notice of the CCAA Proceedings
was sent to all of the Companies' creditors who are owed $1,000 or
more.
Copies of material documents pertaining to the CCAA Proceedings are
available on the monitor's website at
https://www.pwc.com/ca/habourgrace.
Harbour Grace Ocean Enterprises Ltd. operates a repair facility for
marine vessel, and a construction business in Eastern Canada.
HAWK LOGISTICS: U.S. Trustee Unable to Appoint Committee
--------------------------------------------------------
The U.S. Trustee for Region 21, until further notice, will not
appoint an official committee of unsecured creditors in the Chapter
11 case of Hawk Logistics, LLC, according to court dockets.
About Hawk Logistics
Hawk Logistics, LLC operates in the general freight trucking
industry. The company is based in North Bay Village, Fla.
Hawk Logistics filed a petition under Chapter 11, Subchapter V of
the Bankruptcy Code (Bankr. S.D. Fla. Case No. 23-18059) on Oct. 2,
2023, with $1 million to $10 million in both assets and
liabilities. Linda Leali, Esq., has been appointed as Subchapter V
trustee.
Judge Laurel M. Isicoff oversees the case.
Eric J. Silver, Esq., at Stearns Weaver Miller Weissler Alhadeff &
Sitterson, P.A. represents the Debtor as legal counsel.
HEYWOOD HEALTHCARE: Foley & Lardner as Bankruptcy Counsel
---------------------------------------------------------
Heywood Healthcare, Inc. and affiliates seek approval from the U.S.
Bankruptcy Court for the District of Massachusetts to employ Foley
& Lardner LLP as their general bankruptcy counsel.
The firm's services include:
-- preparing and filing on behalf of each Debtor all necessary
and appropriate petitions, applications, motions, pleadings, draft
orders, notices and other documents, including amendments thereto,
and reviewing all financial and other reports to be filed in these
Chapter 11 Cases;
-- analyzing, and advising the Debtors regarding the Debtors'
financial and legal issues;
-- analyzing, and advising the Debtors regarding all claims
filed against the Debtors in these Chapter 11 Cases;
-- assisting the Debtors with respect to any sales of assets
under Section 363 of the Bankruptcy Code;
-- advising the Debtors with respect to legal issues concerning
asset valuations, including without limitation real estate
valuations;
-- advising the Debtors concerning their powers and duties as
debtors-in-possession in their continued operations and management
of their property;
-- advising the Debtors concerning, and assisting in the
negotiation and documentation of, financing agreements, debt
restructurings, cash collateral arrangements and related
transactions, if necessary;
-- advising the Debtors with regard to their relationships with
secured and unsecured creditors and other stakeholders, negotiating
with those creditors and stakeholders, and their representatives
and legal counsel, as necessary, and taking such legal action or
actions as may be necessary or advisable in the best interests of
the Debtors;
-- reviewing the nature and validity of any liens asserted
against the property of the Debtors and advising the Debtors
concerning the enforceability of such liens;
-- negotiating and assisting in the drafting and preparation of
such contracts as may be in the best interests of the Debtors;
-- representing the Debtors at court hearings and at the meeting
of creditors under section 341 of the Bankruptcy Code;
-- advising the Debtors concerning the actions that it might
take to collect and to recover property for the benefit of the
Debtors' estate;
-- advising the Debtors with respect to the claims process,
including issues related to proper notification to creditors of the
requirement and deadlines to file proofs of claim in these Chapter
11 Cases;
-- assisting and counseling the Debtors in connection with any
plan of reorganization;
-- preparing, on behalf of the Debtors, a disclosure statement,
and assisting the Debtors in soliciting acceptances of the Plan;
-- advising the Debtors concerning, and preparing responses to,
applications, motions, pleadings, notices, and other papers that
other parties in interest may file in these Chapter 11 Cases;
-- representing the Debtors in adversary proceedings and other
contested matters, including state court litigation matters as
needed; and
-- performing all other legal services.
The hourly rates of the firm's attorneys and staff are as follows:
Partners $850
Bankruptcy Counsel $470 - $825
Paralegal $325
In addition, the firm will seek reimbursement for expenses
incurred.
Foley received retainers of $820,939.78, which were applied to
invoices of $804,733 in fees and $4,780.78 of expenses. As of the
Petition Date, Foley held a remaining retainer balance of $11,426.
The firm can be reached through:
Stephen A. McCartin, Esq.
Stephen A. Jones, Esq.
FOLEY & LARDNER LLP
2021 McKinney Avenue, Suite 1600
Dallas, TX 75201
Telephone: (214) 999-3000
Facsimile: (214) 999-4667
Email: smccartin@foley.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.
JSCO ENTERPRISES: Case Summary & Seven Unsecured Creditors
----------------------------------------------------------
Debtor: JSCo Enterprises, Inc.
2700 Post Oak Blvd
Suite 2100
Houston TX 77056
Business Description: JSCo aims to bring innovative products and
services to the market.
Chapter 11 Petition Date: November 9, 2023
Court: United States Bankruptcy Court
Eastern District of Texas
Case No.: 23-42151
Debtor's Counsel: Howard Marc Spector, Esq.
SPECTOR & COX, PLLC
12770 Coit Road
Suite 850
Dallas TX 75251
Tel: (214) 365-5377
Email: hms7@cornell.edu
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Eric Jia-Sobota as president.
A full-text copy of the petition containing, among other items, a
list of the Debtor's seven unsecured creditors is available for
free at PacerMonitor.com at:
https://www.pacermonitor.com/view/MLE2UFY/JSCo_Enterprises_Inc__txebke-23-42151__0001.0.pdf?mcid=tGE4TAMA
JUSTHAM CUSTOM: Bankr. Administrator Unable to Appoint Committee
----------------------------------------------------------------
The U.S. Bankruptcy Administrator for the Eastern District of North
Carolina disclosed in a filing that no official committee of
unsecured creditors has been appointed in the Chapter 11 case of
Justham Custom Homes, LLC.
About Justham Custom Homes
Justham Custom Homes, LLC sought protection for relief under
Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.C. Case No.
23-02858) on Oct. 3, 2023, with as much as $1 million in both
assets and liabilities.
Judge David M. Warren oversees the case.
Danny Bradford, Esq., at Bradford Law Offices represents the Debtor
as bankruptcy counsel.
LAKEVILLE FARMS: Gets OK to Hire Freeman & Goldberg as Accountant
-----------------------------------------------------------------
Lakeville Farms LLC received approval from the U.S. Bankruptcy
Court for the Eastern District of Michigan to hire Freeman &
Goldberg as its accountants.
The firm's services will include preparation of monthly operating
reports and related documents, federal tax returns with supporting
schedules, preparation of any state and/or local income tax
returns, sales, use and withholding and payroll returns,
preparation of any bookkeeping entries necessary in connection with
preparation of tax returns and preparation and posting of any
adjusting entries.
The accountant requests a maximum hourly rate of $300 per hour.
Freeman & Goldberg is a disinterested person within the meaning of
Sections 101(14) and 327 of the Bankruptcy Code, as disclosed in
the court filings.
The firm can be reached through:
Michael Goldberg
Freeman & Goldberg, CPAs
31150 Northwestern Hwy, Suite 200
Farmington Hills, MI 48334
Tel: (248) 626-2400
About Lakeville Farms, LLC
Lakeville Farms, LLC specializes in the manufacture and
distribution of kiln dried cooking wood and firewood.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D. Mich. Case No. 23-47202) on August 17,
2023. In the petition signed by Todd Jagiello, member, the Debtor
disclosed $538,000 in total assets and $1,893,064.
Judge Thomas J. Tucker oversees the case.
Aaron J. Scheinfield, Esq., at Goldstein Bershad & Fried PC,
represents the Debtor as legal counsel.
LEXARIA BIOSCIENCE: To Raise $444,865 From Warrant Exercise
-----------------------------------------------------------
Lexaria Bioscience Corp. disclosed in a Current Report on Form 8-K
filed with the Securities and Exchange Commission that since Oct.
24, 2023, the Company has received notices of warrant exercise for
the issuance of an aggregate 468,279 common shares at an exercise
price of $0.95 per Warrant Share resulting in gross proceeds of
$444,865.05 payable to the Company. The Warrant Shares have been
registered with the SEC under an S-1 Registration Statement under
file number 333-271096.
Pre-Funded Warrant Exercises
Pursuant to the Company's Registered Direct Financing that closed
on Oct. 3, 2023, the Company has received a request for the
exercise of 303,058 pre-funded warrants at an exercise price of
$0.0001 for gross proceeds of $30.31 payable to the Company. The
pre-funded warrant shares have been registered with the SEC under
an S-3 Registration Statement under file number 333-262402.
The Company currently has 9,752,259 common shares issued pursuant
to the noted warrant and pre-funded warrant exercises.
About Lexaria
Lexaria Bioscience Corp. -- http://www.lexariabioscience.com-- is
a biotechnology company developing the enhancement of the
bioavailability of a broad range of fat-soluble active molecules
and active pharmaceutical ingredients using its patented
DehydraTECH drug delivery technology. DehydraTECH combines
lipophilic molecules or APIs with specific long-chain fatty acids
and carrier compounds that improve the way they enter the
bloodstream, increasing their effectiveness and allowing for lower
overall dosing while promoting healthier oral ingestion methods.
Lexaria Bioscience reported a net loss and comprehensive loss of
$7.38 million for the year ended Aug. 31, 2022, a net loss and
comprehensive loss of $4.19 million for the year ended Aug. 31,
2021, a net loss and comprehensive loss of $4.08 million for the
year ended Aug. 31, 2020, and a net loss and comprehensive loss of
$4.16 million for the year ended Aug. 31, 2019.
Lexaria Bioscience disclosed in a Form 8-K filed with the
Securities and Exchange Commission that on October 17, 2023, it
received a letter from the listing qualifications department staff
of The Nasdaq Stock Market indicating that the Company is not in
compliance with the $1.00 minimum bid price requirement set forth
in Nasdaq Listing Rule 5550(a)(2) for continued listing on The
Nasdaq Capital Market. In accordance with Nasdaq listing rule
5810(c)(3)(A), the Company has 180 calendar days from the date of
the Bid Price Deficiency Notice, or until April 15, 2024, to regain
compliance with respect to the Bid Price Requirement.
LORDSTOWN MOTORS: Agrees to Include Investors in Suit vs. Foxconn
-----------------------------------------------------------------
Ben Zigterman of Law360 reports that bankrupt electric vehicle
maker Lordstown Motors has reached an agreement to allow the
official committee of equity holders in its Chapter 11 case to
participate in an adversary suit against Foxconn alleging Foxconn
breached its contractual investment obligations.
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.
LTL MANAGEMENT: Talc Claimant Attorneys Get Reduced Fees
--------------------------------------------------------
Rick Archer of Law360 reports that a New Jersey bankruptcy judge
has said firms representing talc injury claimants can get paid for
work they did in the early days of the second Chapter 11 case of
Johnson & Johnson's talc spinoff, but cut their $1.3 million
request by nearly a third.
About LTL Management
LTL Management, LLC, is a subsidiary of Johnson & Johnson (J&J),
which was formed to manage and defend thousands of talc-related
claims and oversee the operations of Royalty A&M. Royalty A&M owns
a portfolio of royalty revenue streams, including royalty revenue
streams based on third-party sales of LACTAID, MYLANTA/MYLICON and
ROGAINE products.
LTL Management filed a petition for Chapter 11 protection (Bankr.
W.D.N.C. Case No. 21-30589) on Oct. 14, 2021. The case was
transferred to New Jersey (Bankr. D.N.J. Case No. 21-30589) on Nov.
16, 2021. The Hon. Michael B. Kaplan is the case judge. At the
time of the filing, the Debtor was estimated to have $1 billion to
$10 billion in both assets and liabilities.
The Debtor tapped Jones Day and Rayburn Cooper & Durham, P.A., as
bankruptcy counsel; King & Spalding, LLP and Shook, Hardy & Bacon
LLP as special counsel; McCarter & English, LLP as litigation
consultant; Bates White, LLC as financial consultant; and
AlixPartners, LLP as restructuring advisor. Epiq Corporate
Restructuring, LLC, is the claims agent.
An official committee of talc claimants was formed in the Debtor's
Chapter 11 case on Nov. 9, 2021. On Dec. 24, 2021, the U.S.
Trustee for Regions 3 and 9 reconstituted the talc claimants'
committee and appointed two separate committees: (i) the official
committee of talc claimants I, which represents ovarian cancer
claimants, and (ii) the official committee of talc claimants II,
which represents mesothelioma claimants.
The official committee of talc claimants I tapped Genova Burns LLC,
Brown Rudnick LLP, Otterbourg PC and Parkins Lee & Rubio LLP as its
legal counsel. Meanwhile, the official committee of talc claimants
II is represented by the law firms of Cooley LLP, Bailey Glasser
LLP, Waldrep Wall Babcock & Bailey PLLC, Massey & Gail LLP, and
Sherman Silverstein Kohl Rose & Podolsky P.A.
Re-Filing of Chapter 11 Petition
On Jan. 30, 2023, a panel of the Third Circuit issued an opinion
directing the Court to dismiss the 2021 Chapter 11 Case on the
basis that it was not filed in good faith. Although the Third
Circuit panel recognized that the Debtor "inherited massive
liabilities" and faced "thousands" of future claims, it concluded
that the Debtor was not in financial distress before the filing.
On March 22, 2023, the Third Circuit entered an order denying the
Debtor's petition for rehearing. The Third Circuit entered an
order denying LTL's stay motion on March 31, 2023, and, on the same
day, issued its mandate directing the Bankruptcy Court to dismiss
the 2021 Chapter 11 Case.
The Bankruptcy Court entered an order dismissing the 2021 Case on
April 4, 2023.
Johnson & Johnson on April 4, 2023, announced that its subsidiary
LTL Management LLC (LTL) has re-filed for voluntary Chapter 11
bankruptcy protection (Bankr. D.N.J. Case No. 23-12825) to obtain
approval of a reorganization plan that will equitably and
efficiently resolve all claims arising from cosmetic talc
litigation against the Company and its affiliates in North
America.
In the new filing, J&J said it has agreed to contribute up to a
present value of $8.9 billion, payable over 25 years, to resolve
all the current and future talc claims, which is an increase of
$6.9 billion over the $2 billion previously committed in connection
with LTL's initial bankruptcy filing in October 2021. LTL also has
secured commitments from over 60,000 current claimants to support a
global resolution on these terms.
LUMEN TECHNOLOGIES: To Permit Creditors in Restructuring Plan
-------------------------------------------------------------
Reshmi Basu of Bloomberg News reports that struggling
telecommunications company Lumen Technologies Inc. told some
secured lenders to its Level 3 unit that it intends to allow more
creditors to participate in a sweeping restructuring plan announced
last week, according to people with knowledge of the matter.
Lumen made the disclosure on Monday, November 6, 2023, after
drawing ire from creditors who had been left out of the proposed
deal to restructure its debt, said the people, who asked not to be
identified discussing a private transaction.
The proposal combined several controversial debt moves, including a
new loan that would have effectively pushed left-behind creditors
back in order of repayment.
About Lumen Technologies
Headquartered in Monroe, Louisiana, Lumen Technologies, Inc. is an
international facilities-based technology and communications
company focused on providing its business and mass markets
customers with a broad array of integrated products and services
necessary to fully participate in its ever-evolving digital world.
The Company's platform empowers its customers to swiftly adjust
digital programs to meet immediate demands, create efficiencies,
accelerate market access and reduce costs - allowing customers to
rapidly evolve their IT programs to address dynamic changes.
Lumen reported a net loss of $1.55 billion in 2022.
* * *
As reported by the TCR on Aug. 24, 2023, Moody's Investors Service
downgraded Lumen Technologies, Inc.'s corporate family rating to
Caa1 from B2. Moody's said the downgrade reflects the Company's
increasing financial risks and continued weak operating
performance.
S&P Global Ratings lowered its issuer credit rating on U.S.-based
telecommunications service provider Lumen Technologies Inc. to two
notches to 'CCC+' from 'B', the TCR reported on Aug. 18, 2023. S&P
said "The two-notch downgrade reflects our view that Lumen's
capital structure is unsustainable longer term. We expect the
company's operating and financial performance will remain
challenged for the next couple of years as its turnaround plan
faces significant challenges."
MALLINCKRODT PLC: Receives Controlled Substances-Related Subpoena
-----------------------------------------------------------------
Rick Green of Bloomberg News reports that Mallinckrodt plc, the
drug company driven into bankruptcy by opioid litigation, received
a second grand jury subpoena tied to a US probe.
The first subpoena on August 22, 2023 which was previously
disclosed, sought information from July 2017 to the present on
"reporting of suspicious orders for controlled substances,
chargebacks and other transactions, and communications between the
company and the U.S. Drug Enforcement Administration."
The second subpoena on September 27, 2023 by the US Attorney's
Office for the Western District of Virginia seeks "documents
pertaining to financial accounts related to the prior requests,"
according to the company's latest 10-Q filing.
About Mallinckrodt plc
Mallinckrodt plc is global business consisting of multiple wholly
owned subsidiaries that develop, manufacture, market and distribute
specialty pharmaceutical products and therapies. Areas of focus
include autoimmune and rare diseases in specialty areas like
neurology, rheumatology, nephrology, pulmonology and ophthalmology;
immunotherapy and neonatal respiratory critical care therapies;
analgesics and gastrointestinal products.
Mallinckrodt plc and certain of its affiliates sought Chapter 11
protection (Bankr. D. Del. Lead Case No. 23-11258) on August 28,
2023.
Mallinckrodt plc disclosed $5,106,900,000 in assets and
$3,512,000,000 in liabilities as of June 30, 2023. Bryan M.
Reasons, authorized signatory, signed the petition.
Judge John T. Dorsey oversees the cases.
The Debtors tapped Latham & Watkins, LLP and Richards, Layton &
Finger, P.A. as their bankruptcy counsel; Arthur Cox and Wachtell,
Lipton, Rosen & Katz as corporate and finance counsel; Guggenheim
Securities, LLC as investment banker; and AlixPartners, LLP, as
restructuring advisor.
MBIA INC: Posts $185 Million Net Loss in Third Quarter
------------------------------------------------------
MBIA Inc. filed with the Securities and Exchange Commission its
Quarterly Report on Form 10-Q disclosing a net loss attributable to
the company of $185 million on $8 million of total revenues for the
three months ended Sept. 30, 2023, compared to a net loss
attributable to the company of $34 million on $17 million of total
revenues for the three months ended Sept. 30, 2022.
For the nine months ended Sept. 30, 2023, the Company reported a
net loss attributable to the company of $353 million on $38 million
of total revenues compared to a net loss attributable to the
company of $143 million on $97 million of total revenues for the
nine months ended Sept. 30, 2022.
As of Sept. 30, 2023, the Company had $2.99 billion in total
assets, $4.22 billion in total liabilities, and a total deficit of
$1.23 billion.
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/814585/000095017023058243/mbi-20230930.htm
About MBIA
MBIA Inc., together with its consolidated subsidiaries, operates
within the financial guarantee insurance industry. MBIA manages
its business within three operating segments: 1) United States
public finance insurance; 2) corporate; and 3) international and
structured finance insurance. The Company's U.S. public finance
insurance portfolio is managed through National Public Finance
Guarantee Corporation, its corporate segment is managed through
MBIA Inc. and several of its subsidiaries, including our service
company, MBIA Services Corporation, and its international and
structured finance insurance business is primarily managed through
MBIA Insurance Corporation and its subsidiaries.
MBIA reported a net loss attributable to the Company of $195
million in 2022, a net loss attributable to the Company of $445
million in 2021, and a net loss attributable to the Company of $578
million in 2020.
MELLON BUILDING: Voluntary Chapter 11 Case Summary
--------------------------------------------------
Debtor: Mellon Building Apartments, LLC
355 North 21st St
Camp Hill, PA 17011
Business Description: Mellon Building is a Single Asset Real
Estate debtor (as defined in 11 U.S.C.
Section 101(51B)).
Chapter 11 Petition Date: November 8, 2023
Court: United States Bankruptcy Court
Middle District of Pennsylvania
Case No.: 23-02559
Judge: Hon. Henry W. Van Eck
Debtor's Counsel: Jeffrey Rockman, Esq.
515 Gibson Ave.
Kingston PA 18704
Tel: 570-479-3113
Email: jeffrockman@aol.com
Estimated Assets: $500,000 to $1 million
Estimated Liabilities: $1 million to $10 million
The Debtor failed to include in the petition a list of its 20
largest unsecuredc creditors.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/4524CGY/Mellon_Building_Apartments_LLC__pambke-23-02559__0001.0.pdf?mcid=tGE4TAMA
MV REALTY PBC: Gets OK to Hire Seese P.A. as Legal Counsel
----------------------------------------------------------
MV Realty PBC, LLC, and its affiliates received approval from the
U.S. Bankruptcy Court for the Southern District of Florida to hire
the law firm of Seese, P.A.
The Debtors require legal counsel to:
a. Give advice regarding matters of bankruptcy law in
connection with the Debtors' Chapter 11 cases;
b. Advise the Debtors of the requirements of the Bankruptcy
Code, the Federal Rules of Bankruptcy Procedure, applicable
bankruptcy rules, and U.S. Trustee Guidelines related to the daily
operation of their business and administration of the estates;
c. Prepare legal papers;
d. Negotiate with creditors, prepare and seek confirmation of
a plan of reorganization and related documents, and assist the
Debtors with implementation of the plan;
e. Review executory contracts and unexpired leases;
f. Negotiate and document any debtor-in-possession financing
and exit financing; and
g. Render such other services as the Debtors may require in
their Chapter 11 cases.
Michael Seese, Esq., is the firm's attorney who will be handling
the cases. He will be compensated at $525 per hour and will be
reimbursed for work-related expenses incurred.
The retainer fee is $100,000.
Mr. Seese disclosed in a court filing that he and his firm are
"disinterested persons" pursuant to Section 101(14) of the
Bankruptcy Code.
The firm can be reached at:
Michael D. Seese, Esq.
Seese, P.A.
101 N.E. 3rd Avenue, Suite 1500
Ft. Lauderdale, FL 33301
Tel: (954) 745-5897
Email: mseese@seeselaw.com
About MV Realty
MV Realty PBC, LLC, is a real estate brokerage firm based in Boca
Raton, Fla.
MV Realty and its affiliates filed Chapter 11 petitions (Bankr.
Lead Case No. 23-17590) on Sept. 22, 2023. In the petition signed
by Antony Mitchell, authorized party, MV Realty disclosed $10
million to $50 million in assets and $50 million to $100 million in
liabilities.
Judge Erik P. Kimball oversees the cases.
Michael D. Seese, Esq., at Seese, PA, is the Debtors' legal
counsel.
NORTHSTAR GROUP: S&P Rates New $710MM Sec. 1st-Lien Term Loan 'B+'
------------------------------------------------------------------
S&P Global Ratings assigned its 'B+' issue rating to nuclear
decommissioning and commercial building deconstruction services
provider NorthStar Group Services Inc.'s proposed $710 million
senior secured first-lien term loan due 2028. The recovery rating
is '2', reflecting our expectation of above average recovery
prospects (70%-90%; rounded estimate: 75%). S&P will not rate the
proposed $125 million asset-based lending (ABL) facility due 2027.
There is no change to its 'B' issuer credit rating.
S&P expects the company will use proceeds to refinance its existing
credit facilities and pay for transaction fees and expenses.
S&P said, "NorthStar continues to perform in line with our
expectations as contributions from the environmental and nuclear
services units partially offset the contraction from the roll-off
of large industrial D&D and other projects. The company continues
to make progress on integrating the Trans Ash acquisition from
January 2023. Its hard backlog of roughly $1.6 billion at the end
of August 2023 rose 5.5% from the year-end figure. It also had
another $1.8 billion of soft backlog, which includes time and
materials-based projects, large jobs that have been awarded and are
in the contracting process, and other items.
"This provides the opportunity for the company to maintain modest
growth during the next few years. We expect the company's adjusted
debt-to-EBITDA ratio will remain either better than or within the
4.5x-6.5x range we see as appropriate for the current ratings. Our
base-case scenario also incorporates EBITDA interest coverage
remaining well above 1.5x with liquidity remaining adequate."
ISSUE RATINGS - RECOVERY ANALYSIS
Key analytical factors
-- S&P has assigned its 'B+' issue-level rating and '2' recovery
rating to NorthStar Group Services Inc.'s $710 million first-lien
term loan. The '2' recovery rating reflects its expectation for
substantial (70%-90%; rounded estimate: 75%) recovery prospects in
the event of a payment default.
-- S&P does not rate the proposed $125 million ABL.
-- S&P values the company on a going-concern basis using a 6.0x
multiple of its emergence EBITDA. This multiple is in line with
that used for similarly rated companies and reflects NorthStar's
high barriers to entry as one of a few private companies licensed
to intake class A, B, and C radioactive material and to perform
large-scale nuclear decommissioning projects, its good market
positions in demolition, decommissioning, and other environmental
services, and its customer relationships.
-- S&P's simulated default scenario contemplates a default in 2026
during a recessionary macroeconomic environment, as the appetite
for commercial demolition and nuclear plant decommissioning
contracts meaningfully. It assumes NorthStar's volumes and revenue
would decrease and margins compress as a result, likely turning
earnings negative.
-- Thus, the company would fund operating losses and debt service
with available cash and, if available, revolver borrowings.
Eventually, its liquidity and capital resources become strained to
the point it cannot continue to operate absent a bankruptcy
filing.
-- S&P assesses recovery prospects based on a gross reorganization
value for the company of approximately $664 million, reflecting
about $111 million of emergence EBITDA and a 6.0x multiple.
Simulated default assumptions
-- Year of default: 2026
-- Emergence EBITDA: $113 million
-- EBITDA multiple: 6.0x
-- Gross recovery value: $680 million
Simplified waterfall
-- Net recovery value for waterfall after administrative expenses
(5%): $646 million
-- Estimated priority claims (ABL): $78 million
-- Total value available to secured claims: $568 million
-- Estimated first-lien secured claims*: $722 million
--Recovery expectation: 70%-90%; rounded estimate: 75%
*The estimated senior secured term loan claim reflects payment of
scheduled amortization. The term loans' amortization increases
yearly. All estimated debt claims include about six months of
accrued but unpaid interest outstanding at default.
NOVA CHEMICALS: Moody's Rates New $400MM First Lien Notes 'Ba1'
---------------------------------------------------------------
Moody's Investors Service assigned a Ba1 rating to NOVA Chemicals
Corporation's proposed $400 million senior secured first lien notes
due 2028. At the same time, Moody's affirmed NOVA's Ba2 corporate
family rating, Ba2-PD probability of default rating and Ba3 senior
unsecured notes rating. The outlook is maintained at negative.
Proceeds from the new notes will be used to partially repay the
$1.05 billion in unsecured notes due June 2024 via a tender offer.
The remaining balance outstanding on the notes will be repaid with
a combination of proceeds from a new $500 million unsecured delayed
draw term loan and drawings under the company's committed revolving
credit facility.
"The ratings affirmation reflects improved liquidity, but the
outlook remains negative due to ongoing industry underperformance
and soft macro conditions in conjunction with recent operational
setbacks and delayed ramp up of AST2," said Whitney Leavens,
Moody's analyst. "While near-term refinancing risks are resolved,
NOVA still needs to address a large maturity wall in 2025 and faces
potential additional litigation charges."
RATINGS RATIONALE
NOVA's Ba2 CFR reflects its: 1) large scale within the ethylene and
polyethylene markets; 2) competitive manufacturing assets in North
America with access to cost-advantaged ethane; and 3) strong
ownership profile with a history of flexible dividend payments and
track record of liquidity support. The rating is constrained by: 1)
high exposure to inherent cyclicality of prices and input costs
leading to volatile margins and cash flows given limited product
and geographic diversity; 2) high financial leverage (over 10x at
Q2-23), with debt to EBITDA still close to 5x in 2024 under Moody's
forecast; and 3) lack of forward integration at Geismar which
weighs on profitability; and 4) recent track record of tight
liquidity management and operational challenges.
NOVA has adequate liquidity. As of Q3-23 sources total about $700
million, consisting of cash on hand of $66 million, Moody's
forecast for around $150 million of free cash flow through year end
2024 and availability of $480 million under the $1.5 billion
revolving credit facility pro-forma for the new issuance, but
availability increasing to around $865 million by Q4-23 (bringing
total sources to over $1 billion). NOVA does not currently have any
drawings under the revolver (expiring April 2026), but availability
is based on a permitted net secured debt ratio no greater than 3.5x
consolidated LTM cash flow and Moody's expects improving cash flows
into 2024 to ease restrictions on availability under the revolver.
NOVA plans to draw $150 million in May 2024 to partially repay its
unsecured notes. NOVA also has access to two accounts receivable
securitization facilities, with $188 million drawn as of Q2-23
under the program consisting of $100 million expiring December 2025
and $175 expiring January 2026. Uses of cash include about $30
million in debt amortizations from Q4-23 through year end 2024.
Debt maturities in 2025 total $1.025 billion, including $500
million in unsecured notes due May 2025 and the $500 million
unsecured delayed draw term loan which Moody's expect the company
to draw in May 2024. While the range of potential outcomes is
wide, the company may also potentially be subject to additional
litigation charges requiring payments to Dow. Moody's expects NOVA
to remain in compliance with its financial covenants. The company
has some flexibility to raise alternate liquidity through asset
sales.
NOVA's senior unsecured debt is rated Ba3, one notch below the Ba2
CFR, reflecting subordination to the $425M term loan A, $1.5
billion secured revolving credit facility (expiring April 2026) and
the proposed $400 million senior secured notes. The senior secured
notes are rated one notch above the CFR at Ba1, reflecting the
significant amount of priority first lien debt ahead of NOVA's
unsecured debt. The proposed senior secured notes are pari passu
to NOVA's senior secured revolver and term loan.
The negative outlook reflects NOVA's exposure to industry weakness
and soft macroeconomic conditions heading into 2024, with credit
risks heightened by recent operational challenges and high
leverage.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be downgraded if liquidity weakens or debt to
EBITDA is likely to be sustained above 5.5x, or the company
generates sustained negative free cash flow.
The ratings could be upgraded if NOVA sustains debt to EBITDA under
3.5x and successfully executes on the full ramp-up of AST2. An
upgrade would also require a more conservative financial policy and
proactive management of refinancing needs.
NOVA Chemicals Corporation is privately-owned by Mubadala
Investment Company, and is a Calgary, Alberta-headquartered
producer of ethylene and polyethylene products.
The principal methodology used in these ratings was Chemicals
published in October 2023.
NOVA CHEMICALS: S&P Rates New US$400MM Senior Secured Notes 'BB+'
-----------------------------------------------------------------
S&P Global Ratings assigned a 'BB+' issue-level rating and '1'
recovery rating to Nova Chemicals Corp.'s proposed US$400 million
senior secured notes issuance. The '1' recovery rating indicates
S&P's expectation of very high (90%-100%; rounded estimate: 95%)
recovery under a hypothetical default scenario.
S&P said, "At the same time, we lowered our issue-level on the
senior unsecured notes to 'B+' from 'BB-' and revised the recovery
rating to '5' from '4'. This reflects our view that the addition of
senior secured debt within the company's capital structure reduces
recovery prospects for unsecured noteholders in our hypothetical
default scenario. The '5' recovery rating reflects modest recovery
(10%-30%, 25% rounded estimate) in our simulated default scenario.
"We expect the company to use proceeds from the proposed issuance,
along with the recently announced $500 million unsecured term loan
facility from banks in Abu Dhabi and expected drawings under the
$1.5 billion credit facility (currently undrawn), to fully redeem
the $1.05 billion of senior unsecured notes due June 2024. The $500
million term loan facility is available for 12 months, with two
six-month extensions allowed at Nova's discretion and can only be
used to refinance the 2024 notes. The company has also received
commitment from its banking syndicate to extend the maturity on its
$425 million term loan due December 2024 to April 2026 subject to
the successful completion of the secured notes issuance.
"While the transactions alleviate near-term refinancing risk, our
'BB-' issuer credit rating and negative outlook on Nova are
unchanged. The negative outlook reflects the challenging operating
conditions and risk of weaker-than-expected economic conditions
such that funds from operations to debt does not improve above 12%
on a sustained basis."
Key analytical factors
-- S&P has updated its recovery assumptions to reflect the
proposed $400 million of senior secured notes and the $500 million
of delayed draw term loan.
-- S&P assigned a 'BB+' issue-level rating to the proposed senior
secured notes with a '1' recovery rating, reflecting very high
recovery (90%-100%, 95% rounded estimate).
-- S&P lowered the issue-level rating on the remaining senior
unsecured notes to 'B+' from 'BB-' and revised the recovery rating
to '5' from '4' to reflect the increased secured debt in the
company's capital structure, which reduces prospects for unsecured
noteholders in its hypothetical default scenario. The '5' recovery
rating reflects modest recovery (10%-30%, 25% rounded estimate) in
the event of a default.
-- S&P has valued NOVA on a going-concern basis using a 5.5x
multiple of its estimate of the company's fixed charges in the
default year.
-- S&P estimates that, for NOVA to default, EBITDA would need to
decline significantly, representing a material deterioration in
olefins and polyethylene prices.
-- S&P assumes the company's corporate revolver of US$1.5 billion
is 85% drawn. It also estimates a 100% draw on NOVA's accounts
receivable securitization programs.
-- S&P assumes the $425 million term loan A and $400 million of
proposed senior secured notes rank pari passu with the credit
facility. The security and guarantors on the secured notes is same
as existing credit facilities.
-- S&P assumes the $500 million unsecured delayed draw term loan
is fully drawn by June 2024 and ranks pari passu with the senior
unsecured notes.
Simulated default assumptions
-- Simulated year of default: 2027
-- Emergence EBITDA after recovery adjustments: $600 million
-- EBITDA multiple: 5.5x
Simplified waterfall
-- Net enterprise value (after 5% administrative expenses): $3.1
billion
-- Valuation split in % (obligors/non-obligors): 100/0
-- Secured debt claims: $2.4 billion
-- Collateral value available to secured claims: $3.1 billion
--Recovery expectations: 90%-10% (rounded estimate: 95%)
-- Collateral value available to unsecured claims: $770 million
-- Senior unsecured debt claims: $2.7 billion
--Recovery expectations: 10%-30% (rounded estimate 25%)
All debt amounts include six months of prepetition interest.
NUZEE INC: Masateru Higashida Has 12.2% Stake as of Oct. 20
-----------------------------------------------------------
Masateru Higashida disclosed in a Schedule 13D/A filed with the
Securities and Exchange Commission that as of Oct. 20, 2023, he
beneficially owned 147,941 shares of common stock of NuZee, Inc.,
representing 12.2 percent of the shares outstanding. The
percentage was based on 1,207,739 shares of Common Stock
outstanding as of
Oct. 25, 2023, which includes the 425,000 shares issued in the
Issuer's recent offering, and gives effect to the Reverse Stock
Split.
The Amendment No. 3 was filed with the SEC to update the percentage
of shares beneficially owned by the Reporting Person as a result of
dilution due to the Issuer's recent offering of 425,000 shares of
Common Stock.
A full-text copy of the regulatory filing is available for free
at:
https://www.sec.gov/Archives/edgar/data/1527613/000149315223038588/formsc13-da.htm
About NuZee
NuZee, Inc. (d/b/a Coffee Blenders) is a co-packing company for
single serve coffee formats that partners with companies to help
them develop within the single serve and private label coffee
category.
Nuzee reported a net loss of $11.80 million for the year ended
Sept. 30, 2022, a net loss of $18.55 million for the year ended
Sept. 30, 2021, a net loss of $9.52 million for the year ended
Sept. 30, 2020, and a net loss of $12.21 million for the year ended
Sept. 30, 2019.
Houston, Texas-based MaloneBailey, LLP, the Company's auditor since
2013, issued a "going concern" qualification in its report dated
Dec. 23, 2022, citing that the Company has suffered recurring
losses and negative cash flows from operations that raises
substantial doubt about its ability to continue as a going concern.
PAD SILVERTHORNE: U.S. Trustee Appoints Creditors' Committee
------------------------------------------------------------
The U.S. Trustee for Region 19 appointed an official committee to
represent unsecured creditors in the Chapter 11 case of The Pad
Silverthorne, LLC.
The committee members are:
1. Tracy Nagy
P.O. Box 405
Silverthorne, CO 80498
Phone: 412-874-5321
2. Stephanie Strauss
P.O. Box 251
Silverthorne, CO 80498
Phone: 303-990-4915
Official creditors' committees serve as fiduciaries to the general
population of creditors they represent. They may investigate the
debtor's business and financial affairs. Committees have the right
to employ legal counsel, accountants and financial advisors at a
debtor's expense.
About The Pad Silverthorne
The Pad Silverthorne, LLC owns an improved real property located at
491 Rainbow Drive, Silverthorne, Colo., valued at $20.25 million.
Pad Silverthorne filed Chapter 11 petition (Bankr. D. Colo. Case
No. 23-14516) on Oct. 4, 2023, with $21,085,885 in assets and
$16,652,147 in liabilities. Robert Baer, manager, signed the
petition.
Judge Joseph G. Rosania Jr. oversees the case.
Kutner Brinen Dickey Riley, PC serves as the Debtor's legal
counsel.
PANTHEON GASTRONOMY: Gets OK to Tap Joseph Ray Delaney as Appraiser
-------------------------------------------------------------------
Pantheon Gastronomy, LLC received approval from the U.S. Bankruptcy
Court for the Southern District of Georgia to employ Joseph Ray
Delaney as its appraiser.
Mr. Delaney will prepare an appraisal of the market value of
certain kitchen equipment located at 401 West Restaurant.
The Debtor desires to employ Mr. Delaney for a flat fee of $485 to
paid as a retainer.
Mr. Delaney can be reached at:
Joseph Ray Delaney
183 Rice Mill St.
Simons Island, GA 31522
About Pantheon Gastronomy
Pantheon Gastronomy, LLC sought protection for relief under Chapter
11 of the Bankruptcy Code (Bankr. S.D. Ga. Case No. 23-20137) on
April 4, 2023, with as much as $50,000 in assets and $100,001 to
$500,000 in liabilities. Judge Michele J. Kim presides over the
case.
The Debtor tapped Paul A. Schofield, Esq., at The Williams
Litigation Group, PC as legal counsel and Lane Gorman Trubitt, LLC
as financial advisor.
PATHWAYS TO GROWTH: Taps Moon Wright & Houston as Legal Counsel
---------------------------------------------------------------
Pathways to Growth Counseling, PLLC seeks approval from the U.S.
Bankruptcy Court for the Western District of North Carolina to hire
Moon Wright & Houston, PLLC as its bankruptcy counsel.
The firm will render these legal services:
(a) advise the Debtor regarding its powers and duties in the
continued operation of its business affairs and management of its
properties;
(b) negotiate, prepare, and pursue confirmation of a Chapter
11 plan and approval of a disclosure statement (if applicable), and
all related reorganization agreements and/or documents;
(c) prepare legal papers;
(d) represent the Debtor in litigation arising from or
relating to the bankruptcy estate;
(e) appear in court to protect the interests of the Debtor;
and
(f) perform all other legal services for the Debtor that may
be necessary and proper in the Chapter 11 proceeding.
The hourly rates of the firm's counsel and staff are as follows:
Richard S. Wright $575
Andrew T. Houston $550
Caleb Brown $375
Shannon L. Myers, Paralegal $185
Jaime Schaedler, Assistant $150
In addition, the firm will seek reimbursement for expenses
incurred.
Richard Wright, Esq., an attorney at Moon Wright & Houston,
disclosed in a court filing that the firm is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
Richard S. Wright, Esq.
Moon Wright & Houston, PLLC
212 N. McDowell Street, Suite 200
Charlotte, NC 28204
Telephone: (704) 944-6560
Facsimile: (704) 944-0380
Email: rwright@mwhattorneys.com
About Pathways to Growth Counseling
Pathways to Growth Counseling, PLLC sought protection for relief
under Chapter 11 of the Bankruptcy Code (Bankr. W.D.N.C. Case No.
23-30729) on Oct. 19, 2023, listing up to $50,000 in assets and
liabilities.
Judge Laura T Beyer presides over the case.
Richard S. Wright, Esq. at Moon Wright & Houston, PLLC represents
the Debtor as counsel.
PREDICTIVE TECHNOLOGY: Voluntary Chapter 11 Case Summary
--------------------------------------------------------
Debtor: Predictive Technology Group, Inc.
240 N East Promontory
Farmington Utah 84025
Business Description: Predictive Technology develops and
commercializes discoveries and technologies
involved in novel molecular diagnostic,
therapeutic, and Human Cellular and Tissue-
Based Products. The Company uses this
information as the cornerstone in the
development of new diagnostics that assess a
person's risk of disease and develop
pharmaceutical therapeutics and HCT/Ps for
use by healthcare professionals to improve
outcomes in their patients. The Company's
corporate headquarters are in Salt Lake
City, Utah.
Chapter 11 Petition Date: November 9, 2023
Court: United States Bankruptcy Court
District of Utah
Case No.: 23-25147
Judge: Hon. Peggy Hunt
Debtor's Counsel: T. Edward Cundick, Esq.
WORKMAN NYDEGGER
60 E. South Temple, Ste. 1000
Salt Lake City, UT 84111
Tel: 801-321-8873
Email: tcundick@wnlaw.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Bradley C. Robinson as CEO and
president.
The Debtor failed to include in the petition a list of its 20
largest unsecured creditors.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/IFXZAAY/Predictive_Technology_Group_Inc__utbke-23-25147__0001.0.pdf?mcid=tGE4TAMA
PREMIER KINGS: Bankruptcy Administrator Appoints Creditors' Panel
-----------------------------------------------------------------
The U.S. Bankruptcy Administrator for the Northern District of
Alabama appointed an official committee to represent unsecured
creditors in the Chapter 11 case of Premier Kings, Inc.
The committee members are:
1. Playland Maintenance Service Inc.
3935 Tamiami Trail
Cumming, GA 30041
2. M D Homes Alabama LLC
P.O. Box 6415
East Brunswick, NJ 08816
3. BK Collinsville LLC
4615 University Drive
Coral Gables, FL 33146
4. GAJ Realty Group Inc.
8 Rosewood Drive
North Massapequa, NY 11758
5. Hudson Construction Company
1425 Market Blvd
Suite 530 318
Roswell, GA 30076
6. Brinks Incorporated
P.O. Box 101031
Atlanta, GA 30392
7. TK&K Unlimited Inc
8014 Cumming Hwy
Suite 403 332
Canton, GA 30115
8. E.S.S., Inc.
203 McMillin St
Nashville, TN 37203-2912
9. Hemphill Services Inc
P.O. Box 1234
Trussville, AL 35173
Official creditors' committees serve as fiduciaries to the general
population of creditors they represent. They may investigate the
debtor's business and financial affairs. Committees have the right
to employ legal counsel, accountants and financial advisors at a
debtor's expense.
About Premier Kings
Premier Kings, Inc. and affiliates are the owners and operators of
174 operating Burger King franchise locations.
The Debtors sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Ala. Lead Case No. 23-02871) on Oct.
25, 2023. At the time of the filing, Premier Kings reported $10
million to $50 million in assets and $50 million to $100 million in
liabilities.
Judge Tamara O. Mitchell oversees the cases.
The Debtors tapped Cole Schotz, PC as the lead counsel; Holland &
Knight, LLP as local bankruptcy counsel; Raymond James &
Associates, Inc. as investment banker; and Kurtzman Carson
Consultants, LLC as noticing and claims agent.
PREMIER KINGS: Seeks to Hire Kurtzman Carson as Claims Agent
------------------------------------------------------------
Premier Kings, Inc., and its debtor affiliates seeks approval from
the U.S. Bankruptcy Court for the Northern District of Alabama to
hire Kurtzman Carson Consultants LLC as claims, noticing, and
solicitation agent.
The firm will oversee the distribution of notices and will assist
in the maintenance, processing and docketing of proofs of claim
filed in the Debtors' Chapter 11 cases.
Prior to the petition date, the Debtor provided the firm a retainer
in the amount of $25,000.
The firm will bill the Debtor monthly and the Debtors agreed to pay
out-of-pocket expenses incurred by the firm.
Evan Gershbein, executive vice president of Kurtzman's Corporate
Restructuring Services, disclosed in a court filing that his firm
is a "disinterested person" as that term is defined in Section
101(14) of the Bankruptcy Code.
The firm can be reached through:
Evan Gershbein
Kurtzman Carson Consultants, LLC
222 N. Pacific Coast Highway, 3rd Floor
El Segundo, CA 90245
Telephone: (310) 823-9000
Facsimile: (310) 823-9133
Email: egershbein@kccllc.com
About Premier Kings, Inc.
Premier Kings, Inc. and affiliates are the owners and operators of
174 operating Burger King franchise locations.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Ala. Case No. 23-02871) on October 25,
2023. In the petition signed by Lawrence Hirsh, as Board Chairman,
the Debtor disclosed up to $50 million in assets and up to $100
million in liabilities.
Judge Tamara O. Mitchell oversees the case.
The Debtors tapped COLE S CHOTZ PC as the lead restructuring
counsel, Holland & Knight LLP as local bankruptcy counsel, Raymond
James & Associates, Inc. as investment banker, and Kurtzman Carson
Consultants LLC as noticing & claims agent.
PROMEDICA HEALTH: Fitch Affirms 'BB-' IDR, Outlook Stable
---------------------------------------------------------
Fitch Ratings has affirmed ProMedica Health System, Inc. OH's
(ProMedica) Issuer Default Rating (IDR) at 'BB-'. In addition,
Fitch has affirmed its 'BB-' rating on approximately $1.8 billion
in bonds (series 2015A, 2015B, 2018A and 2018B) issued by various
issuers on behalf of or by ProMedica. The bonds have been removed
from Rating Watch Negative. The Rating Outlook is Stable.
Entity/Debt Rating Prior
----------- ------ -----
ProMedica Health
System, Inc. (OH) LT IDR BB- Affirmed BB-
ProMedica Health
System, Inc.
(OH) /General
Revenues/1 LT LT BB- Affirmed BB-
The removal of Rating Watch Negative reflects the completion of
ProMedica's sale of its home health, hospice and palliative care
business (4H) to Gentiva Health Services on Nov. 1, 2023 and
subsequent repayment of $453 million of direct placement debt for
which ProMedica violated its debt-to-capital ratio covenant in
2022. The lenders for this debt executed a suspension of the
covenant, which provided ProMedica with the time required to close
the hospice sale and pay off the debt.
The affirmation of the 'BB-' rating and Stable Outlook reflects
stabilization of liquidity in the third quarter of fiscal 2023 with
$753 million of unrestricted cash and investments, which is down
from fiscal year end 2022 but up slightly from the end of the
second quarter. Additionally, Fitch expects a cash infusion related
to the sale of 4H, which after repayment of debt and other
transactional commitments should result in a fiscal year end
unrestricted cash and investment balance of $870 million.
While liquidity has stabilized, system wide operations remained
challenged, driven by continued pressure on expenses including
salaries and benefits and higher supply and drug cost. The provider
division experienced modest revenue growth but remains challenged
by expenses while the retained senior care assets continued to
struggle generating negative cash flow driven by similar challenges
but also occupancy levels that while improved, have not returned to
pre-pandemic levels. The insurance division YTD results are
positive; however, this was supported by a one-time payment related
to the Anthem transition fee revenue.
Fitch is of the opinion that operating performance should stabilize
beginning in 2024 when the transition of the remaining Welltower
skilled nursing facilities are expected to be completed and
ProMedica will no longer be responsible for funding those losses.
Moreover, with the 4H sale completed Fitch believes that management
will be able to increase its focus on the organizations core assets
and future vision. Fitch also believes that ProMedica will continue
to look for ways to optimize performance, including the continued
evaluation of business lines, partnerships and real estate.
SECURITY
The bonds are secured by a joint and several assignments of, and
security interest in, the gross revenues of each member of the
Obligated Group. Obligated members include: The Toledo Hospital,
Bay Park Community Hospital, Defiance Hospital, Inc., Fostoria
Hospital Association, Memorial Hospital, ProMedica Continuing Care
Services Corporation, Emma L. Bixby Medical Center, and Mercy
Memorial Hospital Corporation.
Obligated issuers are covenanted to cause group affiliates, which
are directly or indirectly controlled by the obligated issuers, to
make monies available to the obligated issuer. In addition, there
is a 1.10x debt service ratio covenant and a cash on hand covenant
of 45 days. Breach of either of these two financial covenants
requires a consultant call in. The obligated group is expected to
meet its covenants in 2023.
KEY RATING DRIVERS
Revenue Defensibility - 'bbb'
Strong Inpatient Market Share
ProMedica benefits from its leading inpatient market share in its
primary service area of Toledo, OH, which is supported by its
growing provider base and outpatient and ambulatory care networks.
Across its 12 hospitals, ProMedica retains approximately 32% share,
followed by Mercy Health with 22% share. ProMedica's acute care
footprint expands beyond Ohio, with hospitals located in Southeast
Michigan. ProMedica employs around 1,200 physicians and providers
and operates over 350 access points across the 28 counties it
serves in northwest Ohio and southeast Michigan.
Fitch's revenue defensibility assessment is supported by the
insurance division where it currently covers approximately 308,000
dental members and just under 77,000 health members and through its
senior division where it continues to operate 59 assisted living
facilities (ALFs) and one joint venture skilled nursing facility
(SNF). This provides the organization with additional revenue
diversity, though Fitch notes diversity has narrowed due to
divestitures and ProMedica's exit from the Medicaid market.
The payor mix within the provider division is in line with Fitch's
midrange assessment with about 20% of gross revenue coming from
Medicaid and Self-pay.
ProMedica's overall service area has generally weak demographics
that are characterized by weak population growth and median
household income and an unemployment rate that exceeds national
averages. However, Fitch does not expect any immediate payor mix
deterioration and its payor mix has been fairly stable.
Operating Risk - 'b'
Continued Significant Operational Losses with a Slow Recovery
Expected
ProMedica's operating risk assessment is 'very weak' based on
several years of negative operating income levels. Performance has
been severely impacted over the last five years, which can be
attributed to the initial integration difficulties of the HCR
ManorCare facilities acquired from Welltower through the impact of
the coronavirus pandemic, and to volume and staffing challenges
that continue to hinder the organization's ability to meaningfully
improve operations.
The divestitures of the Welltower SNFs and 4H business should
contribute to systemwide improvement, however, performance through
the third quarter of fiscal 2023 ended Sept. 30 remains pressured
with slightly negative cash flow when accounting for several
one-time items both revenue and expense related, including the
anthem runoff payment, restructuring charges and losses from
discontinued operations for the Welltower and non-Welltower SNFs
that ProMedica continues to wind down. When one-time items are
removed, ProMedica would be cash flow positive with an operating
EBITDA margin of approximately 1%.
Looking ahead, ProMedica is expecting continued improvement in the
provider division, which is expected to be achieved through, a
reduction in agency usage, growth in its physician group, and
numerous costs saving initiatives. These benefits are expected to
be diluted by the operating challenges in the senior care division
and some pressure within in the insurance division, albeit to a
lesser extent than prior years. Management has indicated that
occupancy has improved across the 59 ALFs and that it has increased
monthly rates, which should help offset expense pressures. Fitch
expects that results should begin to stabilize in 2024, however, a
longer-term track record of operating performance needs to be
established in order to asses stability.
ProMedica's historical capital spending has been healthy as
evidenced by its capex averaging 107% of depreciation from fiscal
years 2018-2022. Capex spending declined significantly in FY20 and
has remained well below depreciation the last two years in order to
preserve liquidity. Management continues to assess the capital
needs of the organization but believes that capital spending will
run approximately 70% of depreciation over the long-term with no
major capital needs.
Financial Profile - 'bb'
Stabilizing Liquidity
ProMedica's leverage and liquidity position are expected to remain
weak despite the reduction in debt and the cash infusion related to
the 4H sale. As of Sept. 30, 2023, ProMedica, had $753 million of
unrestricted reserves equal to 28% of debt and 82 days on hand
which is up slightly from the $740 million reported at the of the
second quarter. However, when compared to fiscal year-end 2022
unrestricted reserves are down significantly from $922 million or
33% of debt and 84 days cash on hand. Fitch's total debt numbers
include $516 million of lease liabilities. On a pro forma basis,
when factoring in the paydown of the direct placement debt and
increases in cash, cash to adjusted debt would increase to just
under 40%.
Fitch's forward-looking scenario analysis indicates that
ProMedica's key liquidity and leverage metrics will remain
pressured with cash-to-adjusted debt hovering just under 50% as the
system continues to face various challenges that continue to
disrupt operations. Near-term improvement in the financial profile
will be limited and dependent on consistent improvement in cash
flow.
Asymmetric Additional Risk Considerations
There are no asymmetric risk factors associated for this rating.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Failure to begin improvement such that ProMedica is on a
trajectory to realize a 5%-6% operating EBITDA margin, could result
in further rating pressure.
- Balance sheet dilution, such that cash-to-adjusted debt drops
below current levels.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Stabilization in operating performance with operating EBITDA
margin settling at 6% or better combined with incremental
improvement in cash to adjust debt.
PROFILE
Headquartered in Toledo, OH, ProMedica operates 11 hospitals in two
states (and one joint venture hospital), a health plan, and
continues to operate 59 assisted living and memory care
facilities.
In 2022, ProMedica announced plans to exit the SNF business
beginning with the transfer of 147 properties formerly subject to a
lease between Well PM Properties, LLC and HCR ManorCare, Inc. The
transfer closed on Dec. 22, 2022. At closing, ProMedica funded an
operating reserve for the transferred SNFs in consideration for
being relieved from all further obligations (with the exception of
seven post-closing transferred facilities) and the termination of
the lease obligations.
Health plan coverage was reduced significantly in 2022 as the Ohio
Department of Medicaid informed ProMedica in 2021 that it was not
selected as a future managed care plan provider within the state
beginning in June 2022.
On Nov. 1, ProMedica closed on the sale of its Hospice and Homecare
division.
Sources of Information
In addition to the sources of information identified in Fitch's
applicable criteria specified below, this action was informed by
information from Lumesis.
ESG CONSIDERATIONS
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
PROPERTY ADVOCATES: Bast Amron Represents AG-EREP & Prisa Ponce
---------------------------------------------------------------
The law firm Bast Amron LLP filed a verified statement pursuant to
Rule 2019 of the Federal Rules of Bankruptcy Procedure to disclose
that in the Chapter 11 case of Property Advocates, P.A., the firm
represents creditors AG-EREP East Kennedy Owner, LLC and Prisa
Ponce de Leon, LLC.
The Creditors all are owed money from debtor in relation to leases
between each of the Creditors and PA.
Between September 26, 2023 and September 28, 2023, Bast Amron began
representing the Creditors in connection with this case. Each party
comprising the Creditors, in his, her, or its capacity as such, is
aware of, has requested and consented to Bast Amron's
representation of the Creditors.
The Creditors' address and the nature and amount of disclosable
economic interests held in relation to the Debtors are:
1. AG-EREP East Kennedy Owner, LLC n/k/a Fairwat East Kennedy
Owner, LLC
800 N. Magnolia Avenue,
Suite 1625
Orlando, FL 32803-3258
c/o Michael S. Hel
Jackson Walker LLP
2323 Ross Ave., Suite 600
Dallas, Texas 75201
* $96,958.63
2. Prisa Ponce de Leon, LLC
655 Broad Street, 14th floor
Newark, NJ 07102
c/o Craig Reimer, Esq.
71 S. Wacker Drive
Chicago, IL 60606
* $3,742.47
The law firm can be reached at:
BAST AMRON LLP
Jeffrey P. Bast, Esq.
Jaime B. Leggett, Esq.
One Southeast Third Avenue, Suite 2410
Miami, FL 33131
Telephone: 305.379.7904
Facsimile: 786.206.8740
Email: jbast@bastamron.com
Email: jleggett@bastamron.com
About The Property Advocates
The Property Advocates, P.A., sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. S.D. Fla. Case No. 23-16797-RAM)
on Aug. 25, 2023. In the petition signed by Hunter Patterson,
president, the Debtor disclosed up to $10 million in assets and up
to $50 million in liabilities.
Judge Robert A. Mark oversees the case.
Paul N. Mascia, Esq., at Nardella & Nardella, PLLC, is the Debtor's
legal counsel.
QUANERGY SYSTEMS: Chapter 11 Plan Approved After Merger Deal
------------------------------------------------------------
Hilary Russ of Law 360 reports that a Delaware federal judge
approved Quanergy Systems Inc. 's Chapter 11 liquidation plan
Wednesday after the 3D mapping company said it had agreed to a
short-form merger with a nondebtor subsidiary, paving the way for a
10% recovery for general unsecured creditors.
About Quanergy Systems
Quanergy Systems, Inc., designs, develops and markets Light
Detection and Ranging (LiDAR) sensors and 3D perception software
solutions that enable intelligent, real-time detection, tracking
and classification of objects such as people and vehicles in
mission-critical markets such as security, smart cities and
industrial automation. The company is based in Sunnyvale, Calif.
Quanergy Systems sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. Delaware Case No. 22-11305) on Dec. 13,
2022, with $10 million to $50 million in both assets and
liabilities. Larry Perkins, chief restructuring officer of
Quanergy Systems, signed the petition.
The Debtor tapped Young Conaway Stargatt & Taylor, LLP and Cooley,
LLP as bankruptcy counsels; Seward & Kissel, LLP as special
counsel; SierraConstellation Partners as restructuring advisor; FTI
Consulting, Inc. as financial Advisor; and Raymond James Financial,
Inc. as investment Banker. Bankruptcy Management Solutions, Inc.,
doing business as Stretto, Inc., is the claims, noticing and
solicitation agent.
QURATE RETAIL: Chairman Maffei Holds 1.3% of Class A Common Shares
------------------------------------------------------------------
Gregory B. Maffei disclosed in a Schedule 13D/A filed with the
Securities and Exchange Commission that as of Nov. 1, 2023, he
beneficially owned 4,834,623 Series A Common Stock and 8,434,184
Series B Common Stock of Qurate Retail, Inc., representing 1.3% and
89.5% of the outstanding Series A and Series B Shares,
respectively.
For purposes of calculating Mr. Maffei's beneficial ownership, the
total number of shares of Series A Common Stock outstanding was
384,922,634 and the total number of shares of Series B Common Stock
outstanding was 9,423,118, based, in each case, on the number of
shares outstanding as of July 31, 2023, as reported by the Issuer
in its Quarterly Report on Form 10-Q for the fiscal quarter ended
June 30, 2023, filed with the SEC on Aug. 4, 2023, and as
calculated in accordance with Rule 13d-3 under the Securities
Exchange Act of 1934, as amended, after adjustment for the assumed
exercise of all options and other rights to acquire shares of
Series A Common Stock or Series B Common Stock held by Mr. Maffei
and exercisable as of, or within 60 days of, Nov. 1, 2023.
On Nov. 1, 2023, Mr. Maffei acquired beneficial ownership of an
additional 4,422,819 shares of Series A Common Stock as a result of
the vesting of an option award on Dec. 31, 2023. The option award
was granted to Mr. Maffei on Dec. 15, 2019 pursuant to the terms of
the employment agreement between Mr. Maffei and Liberty Media
Corporation, a Delaware corporation, and relates to 4,422,819
shares of Series A Common Stock at an exercise price of $3.98 per
share.
Mr. Maffei is Chairman of the Board of Directors of the Issuer.
A full-text copy of the regulatory filing is available for free
at:
https://www.sec.gov/Archives/edgar/data/1099636/000110465923113407/tm2329411d1_sc13da.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&D TRANSPORT: Voluntary Chapter 11 Case Summary
------------------------------------------------
Debtor: R&D Transport Inc.
10863 E. 300 N
Indianapolis IN 46234
Business Description: R&D Transport is a general freight trucking
company.
Chapter 11 Petition Date: November 8, 2023
Court: United States Bankruptcy Court
Southern District of Indiana
Case No.: 23-04973
Judge: Hon. James M. Carr
Debtor's Counsel: David Krebs, Esq.
HESTER BAKER KREBS LLC
One Indiana Sq Suite 1330
Indianapolis IN 46204
Tel: 317-833-3030
Email: dkrebs@hbkfirm.com
Estimated Assets: $50,000 to $100,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Cathy Reed as president.
The Debtor failed to include in the petition a list of its 20
largest unsecured creditors.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/62ZMFKI/RD_Transport_Inc__insbke-23-04973__0001.0.pdf?mcid=tGE4TAMA
RITE AID: CDS Auction Gives Swaps Holders 98% Payout
----------------------------------------------------
Michael Tobin of Bloomberg News reports that debt issued by Rite
Aid Corp. was valued at 2 cents on the dollar at an auction
Wednesday, November 8, 2023, according to Creditex and Markit,
handing a 98% payout to holders of credit default swaps.
The final price was lower than the initial market midpoint of 3.375
cents.
Net open interest to sell was $20.279 million. Net notional
outstanding for CDS as of the week ending Oct. 6 was $226,149,278,
according to the Depository Trust & Clearing Corporation.
About Rite Aid Corp.
Rite Aid -- http://www.riteaid.com-- is a full-service pharmacy
that improves health outcomes. Rite Aid is defining the modern
pharmacy by meeting customer needs with a wide range of vehicles
that offer convenience, including retail and delivery pharmacy, as
well as services offered through our wholly owned subsidiaries,
Elixir, Bartell Drugs and Health Dialog. Elixir, Rite Aid's
pharmacy benefits and services company, consists of accredited mail
and specialty pharmacies, prescription discount programs and an
industry leading adjudication platform to offer superior member
experience and cost savings. Health Dialog provides healthcare
coaching and disease management services via live online and phone
health services. Regional chain Bartell Drugs has supported the
health and wellness needs in the Seattle area for more than 130
years. Rite Aid employs more than 6,100 pharmacists and operates
more than 2,100 retail pharmacy locations across 17 states.
The Debtors sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D.N.J. Lead Case No. 23-18993) on Oct. 15,
2023. In the petition signed by Jeffrey S. Stein, chief executive
officer and chief restructuring officer, Rite Aid disclosed
$7,650,418,000 in total assets and $8,597,866,000 in total
liabilities.
Judge Michael B. Kaplan oversees the cases.
The Debtors tapped Kirkland & Ellis LLP and Kirkland & Ellis
International LLP as general bankruptcy counsel, Cole Schotz, P.C.,
as local bankruptcy counsel, Guggenheim Partners as investment
banker, Alvarez & Marsal North America, LLC as financial, tax and
restructuring advisor, and Kroll Restructuring Administration as
claims and noticing agent.
ROY BLACKWELL: Seeks to Hire Luxman Law Firm as Legal Counsel
-------------------------------------------------------------
Roy Blackwell Enterprises, Inc. seeks approval from the U.S.
Bankruptcy Court for the Western District of Tennessee to hire
Luxman Law Firm as its counsel.
The firm's services include:
a. advising the Debtor with respect to its powers and duties
as Debtor-in-Possession in the management of its property;
b. assisting the Debtor in the preparation of its statement of
financial affairs, schedules, statement of executory contracts and
unexpired leases, and any papers or pleadings, or any amendments
thereto that the Debtor is required to file in this case;
c. representing the Debtor in any proceeding that is
instituted to reclaim property or obtain relief from the automatic
stay imposed by Section 362 of the Bankruptcy Code or that seeks
the turnover or recovery of property;
d. providing assistance, advice and representation concerning
the formulation, negotiation and confirmation of a Plan of
Reorganization (and accompanying ancillary documents);
e. providing assistance, advice and representation concerning
any investigation of the assets, liabilities and financial
condition of the Debtor that may be required;
f. representing Debtor at hearings or matters pertaining to
affairs as Debtor-In-Possession;
g. prosecuting and defending litigation matters and such other
matters that might arise during and related to this Chapter 11
case;
h. providing counseling and representation with respect to the
assumption or rejection of executory contracts and leases and other
bankruptcy-related matters;
i. representing the Debtor in matters that may arise in
connection with its business operations, its financial and legal
affairs, its dealings with creditors and other parties-in-interest
and any other matters, which may arise during the bankruptcy case;
j. rendering advice with respect to the myriad of general
corporate and litigation issues relating to this case, including,
but not limited to, health care, real estate, securities, corporate
finance, tax and commercial matters; and assisting Debtor in
connection with any necessary application, orders, reports or other
legal papers and to appear on behalf of the Debtor in proceedings
instituted by or against the Debtor; and
k. performing such other legal services as may be necessary
and appropriate for the efficient and economical administration of
these Chapter 11 cases.
The firm will be paid at these rates:
Bo Luxman $300 hourly
Paraprofessionals $100 hourly
The Debtor has agreed to provide Luxman a post-petition retainer of
$31,162.
Luxman is a "disinterested person" within the meaning of the
Section 101(14) of the Bankruptcy Code, according to court
filings.
The firm can be reached through:
Bo Luxman, Esq.
LUXMAN LAW FIRM
44 N. 2nd Street, Suite 1004
Memphis, TN 38103
Tel: (901) 526-7770
Fax: (901) 526-7957
Email: Bo@luxmanlaw.com
About Roy Blackwell
Roy Blackwell Enterprises, Inc. filed Chapter 11 Petition (Bankr.
W.D. Tenn. Case No. 23-24865) on October 2, 2023, with $1,120,661
in assets and $2,894,996 in liabilities. Larry Avist Jr.,
president, signed the petition.
Judge Jennie D. Latta oversees the case.
Bo Luxman, Esq., at Luxman Law Firm represents the Debtor as
bankruptcy counsel.
SEALED AIR: Moody's Rates New Senior Unsecured Notes 'Ba2'
----------------------------------------------------------
Moody's Investors Service assigned a Ba2 rating to the new senior
unsecured notes of Sealed Air Corp. The Ba1 corporate family
rating, the Ba1-PD probability of default rating, all other
instrument ratings, the SGL-3 speculative grade liquidity rating,
and the negative outlook for Sealed Air Corp. remain unchanged. The
instrument rating assigned to Sealed Air Limited, a subsidiary of
Sealed Air Corp., also remains unchanged.
The proceeds will be used to refinance the existing $425 million
senior unsecured notes maturing in December 2024, and, to the
extent the transaction is upsized, the additional proceeds will be
used to repay a portion of senior secured term loan maturing in
March 2027.
"Sealed Air's proposed refinancing transaction is credit neutral
since it will not change the amount of total debt," said Motoki
Yanase, VP - Senior Credit Officer at Moody's.
"The potential change in the composition of secured and unsecured
debt as a result of this transaction will not have material impact
to change the facility ratings," added Yanase.
The ratings are subject to the transaction closing as proposed and
receipt and review of the final documentation.
RATINGS RATIONALE
Sealed Air Corp.'s Ba1 CFR reflects the company's focus on
value-added products used for perishable foods and product
protection, which supports its high margins, steady demand from
food end markets, and growth in the e-commerce and industrial
markets. In addition, a meaningful installed base of automated
equipment on customers' premises drives recurring materials and
services sales.
These credit strengths are counterbalanced by credit weaknesses,
including the event risk associated with fresh foods such as meat
and the cyclicality in some of the company's end markets
(industrial and transportation) with weak demand during weaker
points in the economic cycle. Sealed Air is an innovative leader in
the markets it serves; yet, it operates in a fragmented and
competitive packaging industry that has many private competitors
and strong price competition, particularly in the protective
packaging side of the business.
The negative rating outlook reflects Moody's expectation that
Sealed Air's credit metrics will trend weakly against the range
assumed for the Ba1 CFR due to weak sales from its protective
segment and negative free cash flow Moody's expects for 2023.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
A ratings upgrade requires a commitment to an investment grade
financial profile including an unencumbered capital structure.
Additionally, an upgrade would require a sustainable improvement in
credit metrics. Specifically, the ratings could be upgraded if debt
to EBITDA is below 3.5x, EBITDA margin is above 22% and free cash
flow to debt is above 12%.
The ratings could be downgraded if there is deterioration in credit
metrics, the competitive environment or liquidity. Additionally, a
large, debt financed acquisition or shareholder return could lead
to a downgrade. Specifically, the ratings could be downgraded if
debt to EBITDA is above 4.25x, EBITDA margin is below 18% or FCF to
debt drops below 8%.
The principal methodology used in this rating was Packaging
Manufacturers: Metal, Glass and Plastic Containers published in
December 2021.
Headquartered in Charlotte, North Carolina, Sealed Air Corp. is a
global manufacturer of automated packaging equipment, services and
sustainable materials for various food, e-commerce and industrial
applications. Sealed Air reports in two segments, Food and
Protective, and recorded about $5.5 billion of revenue for the 12
months that ended September 2023.
SEALED AIR: S&P Rates New Senior Unsecured Notes Due 2031 'BB+'
---------------------------------------------------------------
S&P Global Ratings assigned its 'BB+' issue-level rating to Sealed
Air Corp.'s proposed senior unsecured notes due 2031. The recovery
rating is '4', indicating its expectation for average (rounded
estimate: 30%) recovery in the event of a payment default. S&P'
'BB+' issuer credit rating, as well as the 'BB+' issue-level rating
and '4' recovery rating on the company's existing unsecured debt,
are unchanged.
The company intends to use the proceeds to repay its $425 million
of senior notes due 2024, and to the extent the transaction is
upsized, the incremental amounts will be used to pay down
outstanding borrowings under its incremental term loan A. S&P said,
"We view the transaction as leverage neutral, although we expect
interest expense to tick up under current rates. Strong destocking
trends and a pull-back in demand have hurt Sealed Air, particularly
in its Protective segment. Although there has been modest
sequential volume improvement through the year, we expect our S&P
Global Ratings-adjusted EBITDA to be down in the high-single-digit
percent area in 2023, resulting in debt leverage of low- to mid-4x.
We anticipate Sealed Air to continue focusing on its cost take out
program to offset declines. We also expect demand to continue
recovering in 2024, resulting in an improved debt leverage
position."
SERVICE PROPERTIES: Moody's Rates New Secured 1st Lien Notes 'B1'
-----------------------------------------------------------------
Moody's Investors Service assigned a B1 rating to Service
Properties Trust's ("SVC") new senior secured first lien notes due
2031. At the same time, Moody's affirmed SVC's corporate family
rating at B2, its guaranteed and non-guaranteed senior unsecured
ratings at B1 and B2, respectively, and its senior unsecured shelf
rating at (P)B2. The speculative grade liquidity (SGL) rating
remains unchanged at SGL-4. The outlook remains negative.
SVC is using proceeds from the new $800 million first lien senior
secured notes due 2031 combined with existing liquidity, including
cash on hand, to repay outstanding maturities of $1.175 billion due
in 2024. Refinancing 2024 maturities improves liquidity in the
short-term, however the company will need to address almost $2
billion in additional debt that comes due over the next three years
amid a difficult financing environment for commercial real estate.
Furthermore, Moody's expects that the increase in interest cost
from the new notes and future refinancings will keep fixed charge
coverage below 2.0x over the next 12 to 24 months. SVC has been
successful in refinancing looming maturities, however this has been
in the form of higher cost of capital debt and secured debt through
the encumbrance of higher-quality assets.
The negative outlook reflects continued liquidity pressures related
to material debt maturities over the next 12 to 24 months despite
improving operating performance, with $1.15 billion due in 2025 and
$800 million due in 2026. Given challenging credit conditions,
Moody's expect SVC to manage its upcoming maturities through higher
cost of capital refinancings, encumbering properties and/or
additional asset sales.
The B1 rating on the new first lien senior secured notes reflects
the notes priority of claim on the equity of subsidiaries that own
certain TravelCenters of America "TA" assets. Moody's notes that
the B1 rating for the new first lien secured notes is the same as
the B1 rating for the guaranteed senior unsecured notes because the
collateral coverage (value of the assets relative to the debt) is
similar. Moody's rates Service Properties' guaranteed senior
unsecured debt B1, reflecting the notes' priority of claim due to
subsidiary guarantees and the modest amount of guaranteed debt
relative to the large size (though declining) of the unencumbered
asset pool.
RATINGS RATIONALE
SVC's B2 CFR reflects its high financial leverage and weak fixed
charge coverage and an operating environment that will make it
challenging for the company to meaningfully reduce leverage in the
near term. Moody's expects growth, particularly for SVC's hotel
portfolio, to moderate going forward due to recessionary pressures
stemming from inflationary headwinds and higher interest rates,
despite an improvement in operating performance year-over-year.
Further, the refinancing helps improve liquidity that had weakened
over the last several years, but the company still faces
significant liquidity pressures and minimal cushion related to
near-term debt maturities over the next 12 to 24 months, given
challenging capital market conditions. SVC encumbered some of its
highest-quality assets to manage its maturity wall, with the
issuance of net lease mortgage notes in January 2023, and the new
first lien secured notes collateralized by TA assets in November
2023. A further shift away from an unsecured funding strategy
through the issuance of additional secured debt to fund capital
needs could weaken SVC's unencumbered asset coverage and place
downward pressure on the B2 senior unsecured ratings.
Despite these challenges, SVC's ratings are supported by the
company's meaningful scale and portfolio of assets, including
hotels and net lease service and necessity-based retail properties,
which provide diversification to cash flows. The ratings also
reflect the value of its unencumbered asset pool, which the company
has leveraged successfully in recent transactions to manage its
capital needs. Pro forma for the new senior secured notes and
subsequent repayment of 2024 maturities, SVC will have over $7
billion in unencumbered assets at book value.
SVC's SGL-4 rating reflects a weak liquidity profile given expected
sources and uses over the next 12 to 24 month period. Pro forma
liquidity is supported by $43 million in cash on hand and full
availability under its $650 million secured credit facility due
June 2027, which was downsized from $800 million in its July 2023
refinancing. Debt maturities include $1.15 billion due in 2025 as
well as $800 million due in 2026 and $850 million due in 2027.
Moody's expect the company to manage its near-term maturities
primarily through additional secured debt funding and/or higher
cost of capital unsecured debt, though traditional refinancing will
be harder to come by due to difficult market conditions and the
company's large quantum of debt coming due in the short term. SVC
maintains a certain level of financial flexibility with a large,
unencumbered portfolio of about $7 billion but the size and quality
of this pool continues to diminish with the delivery of first lien
mortgages and equity interests on certain higher quality properties
to secure obligations.
The negative outlook reflects liquidity pressures related to
material debt maturities over the next 12 to 24 months. The outlook
also reflects weak financial credit metrics and an operating
environment that will make it challenging for SVC to meaningfully
reduce leverage in the near-term.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
A downgrade of SVC's ratings could occur should the company fail to
maintain sufficient liquidity related to near-term maturities or if
it continues to materially encumber more assets. Fixed charge
coverage below 1.5x, Net Debt/EBITDA above 11.5x, or a
deterioration in operating performance could also lead to a
downgrade.
SVC's ratings could be upgraded if the REIT were to maintain ample
long-term liquidity. A return to an unsecured funding strategy,
improving Net Debt/EBITDA below 8.5x and fixed charge coverage
closer to 2.0x, as well as demonstration of earnings stability on a
sustained basis, particularly in its hotel business, would also
support an upgrade.
The principal methodology used in these ratings was REITs and Other
Commercial Real Estate Firms published in September 2022.
SERVICE PROPERTIES: S&P Assigns Prelim 'BB' Rating on Sec. Notes
----------------------------------------------------------------
S&P Global Ratings assigned its preliminary 'BB' issue-level rating
and '1' recovery rating to Service Properties Trust's (SVC) $800
million senior secured notes. The '1' recovery rating indicates its
expectation for very high (90%-100%) recovery for the senior
secured noteholders in the event of a payment default.
The secured notes will have a first-priority lien on the equity
interests of SVC subsidiaries that own 70 travel center assets. The
assets are subject to two triple-net master leases that provide
annual rental income of $91 million, with increases of 2% per year
over the initial 10-year term of the lease, and include five
10-year extension options. BP Corp. North America Inc. guarantees
the payments under each of SVC's leases. Additionally, the secured
notes will have the same guarantees as the company's existing
guaranteed senior unsecured notes due 2025 and 2027.
S&P said, "The preliminary ratings reflect our view of the
transaction's strong collateral and legal structure, among other
factors. Furthermore, we expect SVC's net-lease portfolio will
perform relatively well, providing it with some earnings stability,
supplemented by its hotel portfolio which has largely recovered
from the effects of the coronavirus pandemic.
'The preliminary ratings are based on information as of Nov. 8,
2023, including the size and tenor of the offering. Upon the
successful execution of the transaction and our review of the final
terms, we will assign final ratings to the senior secured notes. We
could reassess our outlook and affirm the ratings following the
close of the proposed transaction, based on the final issuance
amount and our expectation for the company to refinance its
upcoming debt maturities. Moreover, we would not expect the pricing
on the notes to lead to a significant deterioration in the
company's fixed-charge coverage ratio. Subsequent information that
materially deviates from our expectations may lead us to assign
final ratings that differ from the preliminary ratings."
SHIFT TECHNOLOGIES: Hires Keller Benvenutti as Bankruptcy Counsel
-----------------------------------------------------------------
Shift Technologies, Inc. and its affiliates seek approval from the
U.S. Bankruptcy Court for the Northern District of California to
employ Keller Benvenutti Kim LLP as their general bankruptcy
counsel.
The firm's services include:
(a) advising the Debtors of their rights, powers, and duties
as debtors and debtors in possession continuing to operate and
manage its business and affairs under chapter 11 of the Bankruptcy
Code;
(b) preparing on behalf of the Debtors all necessary and
appropriate applications, motions, proposed orders, other
pleadings, notices, schedules, and other documents, and reviewing
all financial and other reports to be filed in these Chapter 11
Cases;
(c) advising the Debtors concerning, and preparing responses
to, applications, motions, other pleadings, notices, and other
papers that may be filed by other parties in these Chapter 11
Cases;
(d) advising the Debtors with respect to, and assisting in the
negotiation of, any financing agreements, sale agreements, and
related transactions that may be necessary in these Chapter 11
Cases;
(e) advising the Debtors regarding their ability to initiate
actions to collect and recover property for the benefit of their
estates;
(f) advising and assisting the Debtors in connection with any
asset dispositions;
(g) advising and representing the Debtors with respect to
employment related issues;
(h) advising and assisting the Debtors in negotiations with
the Debtors' stakeholders;
(i) advising the Debtors concerning executory contract and
unexpired lease assumptions, assignments and rejections;
(j) advising the Debtors in connection with the formulation,
negotiation, and promulgation of a plan or plans under the
Bankruptcy Code, and related transactional documents;
(k) assisting the Debtors in reviewing, estimating, and
resolving claims asserted against the Debtors' estates;
(l) commencing and conducting in this Court litigation that is
necessary and appropriate to assert rights held by the Debtors,
protect assets of the Debtors' estates, or otherwise further the
goal of completing the Debtors’ successful liquidation;
(m) providing non-bankruptcy services for the Debtors to the
extent requested by the Debtors, including, among other things,
advice related to corporate governance; and
(n) performing all other necessary and appropriate legal
services in connection with these Chapter 11 Cases for or on behalf
of the Debtors.
The hourly rates charged by the firm for its services are as
follows:
Tobias S. Keller Partner $950
Jane Kim Partner $850
Traci Shafroth Partner $750
George Kalikman Of Counsel $1,100
Thomas B. Rupp Senior Counsel $575
Gabrielle L. Albert Associate $650
Jullian Sekona Associate $390
Colin Mitsuoka Paralegal Trainee $175
In addition, the firm will seek reimbursement for its out-of-pocket
expenses.
On Sept. 8, 2023, the firm received payment in the amount of
$50,000 as a retainer. On Sept. 20 and Oct. 9, 2023, the Debtors
made additional payments of $200,000 and $250,000 respectively, as
a further retainer.
Tobias Keller, Esq., a partner at Keller Benvenutti Kim, 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:
Tobias S. Keller, Esq.
Keith Mcdaniels, Esq.
Danisha Brar, Esq.
KELLER BENVENUTTI KIM LLP
650 California Street, Suite 1900
San Francisco, CA 94108
Telephone: (415) 496-6723
Facsimile: (650) 636-9251
Email: tkeller@kbkllp.com
kmcdaniels@kbkllp.com
dbrar@kbkllp.com
About Shift Technologies
Shift Technologies, Inc. is a consumer-centric omnichannel used car
retailer. The Company operates the website www.shift.com and two
locations in Oakland and Pomona, California.
Shift Technologies and its affiliates sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Cal. Lead Case
No. 23-30687) on October 9, 2023. In the petitions signed by Jason
Curtis, chief financial officer, Shift Technologies disclosed up to
$50,000 in assets and up to $500,000 in liabilities.
Judge Hannah L. Blumenstiel oversees the cases.
The Debtor tapped Thomas B. Rupp, Esq., at Keller Benvenutti Kim
LLP as counsel and Omni Agent Solutions, Inc. as claims and
noticing agent.
SHIFT TECHNOLOGIES: Seeks to Hire Omni as Administrative Agent
--------------------------------------------------------------
Shift Technologies, Inc. and its affiliates seek approval from the
U.S. Bankruptcy Court for the Northern District of California to
employ Omni Agent Solutions as administrative agent.
The firm will render these services:
(a) assist with, among other things, any required
solicitation, balloting, and tabulation and calculation of votes,
as well as preparing any appropriate reports, as required in
furtherance of confirmation of chapter 11 plans;
(b) generate an official ballot certification and testifying,
if necessary, in support of the ballot tabulation results;
(c) handle requests for documents from parties in interest,
including, if applicable, brokerage firms and bank back-offices and
institutional holders in connection with the Balloting Services;
(d) gather data in conjunction with the preparation, and
assist with the preparation, of the Debtors' schedules of assets
and liabilities and statements of financial affairs;
(e) provide a confidential data room, if requested;
(f) manage and coordinate any distributions pursuant to a
confirmed chapter 11 plan; and
(g) provide such other claims processing, noticing,
solicitation, balloting, and administrative services described in
the Services Agreement, but not included in the Section 156(c)
Order, as may be requested by the Debtors from time to time.
The Debtors have agreed to pay Omni a retainer of $50,000.
The hourly rates of Omni's professionals are as follows:
Analyst $62 - $175
Consultants $180 - $228
Senior Consultants $200 - $225
Solicitation and Securities Services $250
Technology/Programming $85 - $155
In addition, the firm will seek reimbursement for expenses
incurred.
Brian Osborne, the president of Omni Agent Solutions, disclosed in
a court filing that the firm is a "disinterested person" as that
term is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Brian K. Osborne
Omni Agent Solutions
5955 De Soto Avenue, Suite 100
Woodland Hills, CA 91367
Telephone: (818) 906-8300
Email: Bosborne@omniagnt.com
About Shift Technologies
Shift Technologies, Inc. is a consumer-centric omnichannel used car
retailer. The Company operates the website www.shift.com and two
locations in Oakland and Pomona, California.
Shift Technologies and its affiliates sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Cal. Lead Case
No. 23-30687) on October 9, 2023. In the petitions signed by Jason
Curtis, chief financial officer, Shift Technologies disclosed up to
$50,000 in assets and up to $500,000 in liabilities.
Judge Hannah L. Blumenstiel oversees the cases.
The Debtor tapped Thomas B. Rupp, Esq., at Keller Benvenutti Kim
LLP as counsel and Omni Agent Solutions, Inc. as claims and
noticing agent.
SHIFT TECHNOLOGIES: Taps Bendis Cos. as Auctioneer
--------------------------------------------------
Shift Technologies, Inc. and its affiliates seek approval from the
U.S. Bankruptcy Court for the Northern District of California to
employ Bendis Companies, Inc. as auctioneer and appraiser.
The firm will render these services:
(a) catalog and appraise the assets;
(b) photograph the assets and upload those images to the
auctioneer's website;
(c) assist with, among other things, the solicitation of
potential buyers of the assets;
(d) marketing efforts related to the auction of the assets;
(e) in connection with the solicitation of potential buyers,
handle requests for information regarding the Debtors' equipment;
(f) manage and coordinate any distributions upon the asset
sales;
(g) manage and maintain the website and/or mobile application
for the purpose of managing the online auction; and
(h) provide such other auction services as may be requested by
the Debtors from time to time.
The auctioneer will be paid an 8 percent commission fee, which will
be paid from the auction proceeds. Additionally, online buyers will
pay a 15 percent premium.
The auctioneer will also be paid a flat appraisal fee of $6,000 per
location.
Diane Bendis, a member of Bendis Companies, Inc., disclosed in a
court filing that her firm is a "disinterested person" as that term
is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Diane Bendis
Bendis Companies, Inc.
780 NW Garden Valley Blvd., Suite 64
Roseburg, Oregon 97471
Telephone: (541) 247-9862
Email: Diane@bendiscompany.com
About Shift Technologies
Shift Technologies, Inc. is a consumer-centric omnichannel used car
retailer. It operates the website www.shift.com and two locations
in Oakland and Pomona, California.
Shift Technologies and its affiliates filed Chapter 11 petitions
(Bankr. N.D. Calif. Lead Case No. 23-30687) on Oct. 9, 2023. In the
petitions signed by its chief financial officer, Jason Curtis,
Shift Technologies disclosed up to $50,000 in assets and up to
$500,000 in liabilities.
Judge Hannah L. Blumenstiel oversees the cases.
The Debtors tapped Thomas B. Rupp, Esq., at Keller Benvenutti Kim
LLP as legal counsel; AlixPartners, LLC as financial advisor; and
Omni Agent Solutions, Inc. as claims and noticing agent.
SHIFT TECHNOLOGIES: U.S. Trustee Appoints Creditors' Committee
--------------------------------------------------------------
The U.S. Trustee for Region 17 appointed an official committee to
represent unsecured creditors in the Chapter 11 cases of Shift
Technologies, Inc. and its affiliates.
The committee members are Ali Nazir and Peter Vogelsang, Esq., who
is representing Oppenheimer & Co. Inc.
Official creditors' committees serve as fiduciaries to the general
population of creditors they represent. They may investigate the
debtor's business and financial affairs. Committees have the right
to employ legal counsel, accountants and financial advisors at a
debtor's expense.
About Shift Technologies
Shift Technologies, Inc. is a consumer-centric omnichannel used car
retailer. It operates the website www.shift.com and two locations
in Oakland and Pomona, California.
Shift Technologies and its affiliates filed Chapter 11 petitions
(Bankr. N.D. Calif. Lead Case No. 23-30687) on Oct. 9, 2023. In the
petitions signed by its chief financial officer, Jason Curtis,
Shift Technologies disclosed up to $50,000 in assets and up to
$500,000 in liabilities.
Judge Hannah L. Blumenstiel oversees the cases.
The Debtors tapped Thomas B. Rupp, Esq., at Keller Benvenutti Kim
LLP as legal counsel; AlixPartners, LLC as financial advisor; and
Omni Agent Solutions, Inc. as claims and noticing agent.
SIGNIA LTD: Seeks to Hire Perlman & Perlman as Special Counsel
--------------------------------------------------------------
Signia, Ltd. seeks approval from the U.S. Bankruptcy Court for the
District of Colorado to employ Perlman & Perlman, LLP as special
counsel.
Perlman will represent the Debtor in connection with its
fundraising and solicitation registrations and related business
activities.
Perlman charges $345 per filing for each state registration and
expects to file registrations in 37 states. The firm charges $175
per filing for each individual solicitor registration and
anticipates 27 such filings.
To the extent that Perlman is requested to provide legal services
related to nonprofit compliance and contract and campaign report
filings, these will be rendered by Tracy Boak, a partner at
Perlman, at her hourly rate of $650 and compliance paralegals at
their hourly rates ranging from $225 to $290.
Ms. Boak disclosed in a court filing that her firm is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
The firm can be reached through:
Tracy L. Boak, Esq.
Perlman & Perlman LLP
521 Fifth Avenue, 30th Floor
New York, NY 10175
Telephone: (212) 889-0575
Email: tracy@perlmanandperlman.com
About Signia Ltd.
Signia, Ltd., a company in Westminster, Colo., provides marketing
and customer services to targeted business and customer groups. It
provides both business-to-business and business-to-consumer sales
and marketing services, including outbound telephone calls. The
Debtor also uses its call centers (located in Greeley, Colorado and
Vienna, Virginia) to manage inbound customer service calls, as well
as outbound calls, to customers on behalf of third parties. Another
line of business is in the nonprofit sector: the Debtor provides
telefundraising services for a variety of well-known non-profit
organizations.
Signia filed a petition under Chapter 11, Subchapter V of the
Bankruptcy (Bankr. D. Colo. Case No. 23-14384) on Sept. 27, 2023,
with up to $500,000 in assets and up to $10 million in liabilities.
Jeffrey Fell, chief executive officer, signed the petition.
Judge Thomas B. Mcnamara oversees the case.
David V. Wadsworth, Esq., at Wadsworth Garber Warner Conrardy, PC
serves the Debtor as bankruptcy counsel. Brownstein Hyatt Farber
Schreck, LLP, Perlman & Perlman, LLP, and Copilevitz, Lam & Raney,
PC are tapped as special counsel.
SIGNIA LTD: Seeks to Tap Copilevitz Lam & Raney as Special Counsel
------------------------------------------------------------------
Signia, Ltd. seeks approval from the U.S. Bankruptcy Court for the
District of Colorado to employ Copilevitz, Lam & Raney, PC as
special counsel.
The firm will represent the Debtor in connection with compliance
and privacy issues.
The hourly rates of the firm's counsel and staff are as follows:
William E. Raney $435
Other Attorneys $415 - $360
Paralegals and Law Clerks $150
William Raney, Esq., a partner at Copilevitz, Lam & Raney,
disclosed in a court filing that his firm is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
William E. Raney, Esq.
Copilevitz, Lam & Raney, PC
310 W. 20th Street, Suite 300
Kansas City, MO 64108
Telephone: (816) 472-9000
Facsimile: (816) 472-5000
Email: braney@clrkc.com
About Signia Ltd.
Signia, Ltd., a company in Westminster, Colo., provides marketing
and customer services to targeted business and customer groups. It
provides both business-to-business and business-to-consumer sales
and marketing services, including outbound telephone calls. The
Debtor also uses its call centers (located in Greeley, Colorado and
Vienna, Virginia) to manage inbound customer service calls, as well
as outbound calls, to customers on behalf of third parties. Another
line of business is in the nonprofit sector: the Debtor provides
telefundraising services for a variety of well-known non-profit
organizations.
Signia filed a petition under Chapter 11, Subchapter V of the
Bankruptcy (Bankr. D. Colo. Case No. 23-14384) on Sept. 27, 2023,
with up to $500,000 in assets and up to $10 million in liabilities.
Jeffrey Fell, chief executive officer, signed the petition.
Judge Thomas B. Mcnamara oversees the case.
David V. Wadsworth, Esq., at Wadsworth Garber Warner Conrardy, PC
serves the Debtor as bankruptcy counsel. Brownstein Hyatt Farber
Schreck, LLP, Perlman & Perlman, LLP, and Copilevitz, Lam & Raney,
PC are tapped as special counsel.
SIGNIA LTD: Taps Brownstein Hyatt Farber Schreck as Special Counsel
-------------------------------------------------------------------
Signia, Ltd. seeks approval from the U.S. Bankruptcy Court for the
District of Colorado to employ Brownstein Hyatt Farber Schreck, LLP
as special counsel.
The Debtor desires to employ the firm as a substitute for Holland &
Hart LLC as its counsel in a Nevada district court contract dispute
case.
The hourly rates of the firm's counsel and staff are as follows:
Eric Walther, Esq. $510
Other Attorneys $400 - $745
Paralegals $295
Prior to the petition date, the firm was paid by the Debtor a
retainer in the amount of $60,000.
Eric Walther, Esq., an attorney at Brownstein Hyatt Farber Schreck,
disclosed in a court filing that his firm is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
Eric D. Walther, Esq.
Brownstein Hyatt Farber Schreck, LLP
100 North City Parkway, Suite 1600
Las Vegas, Nevada 89106
Telephone: (702) 464-7062
Email: ewalther@bhfs.com
About Signia Ltd.
Signia, Ltd., a company in Westminster, Colo., provides marketing
and customer services to targeted business and customer groups. It
provides both business-to-business and business-to-consumer sales
and marketing services, including outbound telephone calls. The
Debtor also uses its call centers (located in Greeley, Colorado and
Vienna, Virginia) to manage inbound customer service calls, as well
as outbound calls, to customers on behalf of third parties. Another
line of business is in the nonprofit sector: the Debtor provides
telefundraising services for a variety of well-known non-profit
organizations.
Signia filed a petition under Chapter 11, Subchapter V of the
Bankruptcy (Bankr. D. Colo. Case No. 23-14384) on Sept. 27, 2023,
with up to $500,000 in assets and up to $10 million in liabilities.
Jeffrey Fell, chief executive officer, signed the petition.
Judge Thomas B. Mcnamara oversees the case.
David V. Wadsworth, Esq., at Wadsworth Garber Warner Conrardy, PC
serves the Debtor as bankruptcy counsel. Brownstein Hyatt Farber
Schreck, LLP, Perlman & Perlman, LLP, and Copilevitz, Lam & Raney,
PC are tapped as special counsel.
SLEEP GALLERIA: Seeks to Hire Lamberth Cifelli as Legal Counsel
---------------------------------------------------------------
Sleep Galleria, LLC seeks approval from the U.S. Bankruptcy Court
for the Northern District of Georgia to hire Lamberth, Cifelli,
Ellis & Nason, P.A., as its attorneys.
The Debtor requires legal counsel to:
(a) advise, assist and represent Debtor with respect to its
rights, powers and duties in the administration of its Chapter 11
case, and the collection, preservation and administration of assets
of the Debtor's estate;
(b) advise, assist, and represent Debtor with regard to any
claims and causes of action which the estate may have against
various parties;
(c) advise, assist, and represent Debtor with regard to
investigation of the desirability and feasibility of the rejection
or assumption and potential assignment of any executory contracts
or unexpired leases, and to advise, assist, and represent Debtor
with regard to liens and encumbrances asserted against property of
the estate and potential avoidance actions;
(d) advise, assist, and represent Debtor in connection with
all applications, motions, or complaints concerning reclamation,
sequestration, relief from stays, disposition or other use of
assets of the estate, and all other similar matters;
(e) advise, assist, and represent Debtor with regard to the
preparation, drafting, and negotiation of a plan of reorganization
or liquidation or negotiation with other parties presenting a plan
of reorganization or liquidation;
(f) prepare legal papers;
(g) provide support and assistance to the Debtor with regard
to the proper receipt, disbursement, and accounting for funds and
property of the estate;
(h) provide support and assistance to the Debtor with regard
to the review of claims against Debtor, the investigation of
amounts properly allowable and the appropriate priority or
classification of same, and the filing and prosecution of
objections to claims as appropriate; and
(i) perform other legal services.
The firm will be paid at these rates:
Attorneys $425 to $525 per hour
Paralegals $75 to $225 per hour
In addition, the firm will receive reimbursement for out-of-pocket
expenses incurred.
The Debtor paid the firm a pre-bankruptcy retainer in the amount of
$20,000, plus $1,738 to pay the filing fee.
G. Frank Nason, IV, Esq., a partner at Lamberth, Cifelli, Ellis &
Nason, P.A., 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:
G. Frank Nason, IV, Esq.
LAMBERTH, CIFELLI, ELLIS & NASON, P.A.
6000 Lake Forrest Drive, N.W. Suite 435
Atlanta, GA 30328
Tel: (404) 262-7373
Email: fnason@lcenlaw.com
About Sleep Galleria, LLC
Sleep Galleria sells mattresses, massage chairs, recliners,
furniture, and beddings.
Sleep Galleria, LLC filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ga. Case No.
23-21211) on Oct. 27, 2023. The petition was signed by Stephen
Norris as member. At the time of filing, the Debtor estimated $1
million to $10 million in both assets and liabilities.
Judge James R. Sacca presides over the case.
G. Frank Nason, IV, Esq. at Lamberth, Cifelli, Ellis & Nason, P.A.,
represents the Debtor as counsel.
SMILEDIRECTCLUB INC: Hires FTI Consulting as Financial Advisor
--------------------------------------------------------------
SmileDirectClub, Inc. and its affiliates seek approval from the
U.S. Bankruptcy Court for the Southern District of Texas to hire
FTI Consulting, Inc. as their financial advisor.
The firm will render these services:
Contingency Planning
-- assist in preparing required financial and operating
information, assisting with operational readiness and due diligence
support for any new financing in connection with such contingency
plans;
-- assist in preparing all required documents and analyses to
prepare for an orderly chapter 11 filing by the Debtors, including
but not limited to the following:
-- assist in negotiating the cash collateral order and any
debtor-in-possession financing;
-- assist in the preparation of the chapter 11 petitions,
creditor matrix, list of top creditors, and declarations;
-- assist in the preparation of all first day motions and
applications;
-- assist in working with the creditor groups and their
counsel to prepare for the filing;
-- assist in the development of management and employee
incentive and/or retention plans;
-- assist with required cash management and cash reporting
for a chapter 11 process;
-- assist the Debtors with communications with trade and
other vendors and creditors as needed and requested by the
Debtors;
-- assist the Debtors, their counsel, and other professionals
with any other work necessary to prepare for the commencement of
chapter 11.
Strategic Communications
-- develop near-term communications strategy and collateral
around litigation inflection points, potential leaks, and required
market disclosures to protect reputation, push back on
mischaracterizations, build support amongst stakeholders, and
mitigate commercial and legal risk;
-- assess communications channels and stakeholder materials,
including digital and social media, to inform go-forward
communications strategies and recommendations around stakeholder
retention;
-- support media and investor relations strategic direction,
serving as company spokesperson if needed, and establish and
nurture relationships with targeted journalists for the Debtors'
near- and long-term benefit; and
-- build comprehensive communications strategy, rollout plan,
and collateral for contingency plans, including customers,
employees, suppliers, regulators, and other constituencies (e.g.,
press releases; social media strategy; stakeholder Q&A, talking
points and letters);
Liquidity and Business Plan Support
-- assess cash flow enhancement opportunities, working capital
efficiency, and cash conservation strategies and implement them as
practical;
-- understand and drive strategic initiatives implemented or
identified by management to improve liquidity;
-- refine the Debtors' 13-week cash forecast as required;
-- identify risks and opportunities in near and long-term
forecasts taking into consideration both recent performance and the
current state of the economy;
-- analyze the Debtors' strategic and operational initiatives to
improve profitability and growth;
-- review status of operations and relationships with critical
vendors;
-- assist in providing various analyses in support of the
Debtors' liquidity improvement and capital structure initiatives
and further assist in financing issues including assistance in
preparation of presentation materials, diligence, reports and as a
liaison with creditors; and
-- perform such other services and analyses relating to the
Debtors that are or become required, to the extent requested by on
behalf of the Debtors.
Postpetition Bankruptcy Services
-- assist with developing accounting and operating procedures to
segregate prepetition and post-petition business transactions;
-- assist with preparation of the Schedules of Assets and
Liabilities and Statements of Financial Affairs, Monthly Operating
Reports, and all other required reporting to the Court and the U.S.
Trustee;
-- assist in implementing all first day motions;
-- assist with cash management and reporting as required by
creditors, the Bankruptcy Code and Bankruptcy Rules, the U.S.
Trustee, and the Court;
-- assist in preparing required motions throughout the course of
the cases;
-- respond to all creditors groups throughout the restructuring
process, as directed by or on behalf of the Debtors;
-- assist in detailed analysis of restructuring plans,
development of required support for any plan of reorganization, and
assistance in implementation of such plans as determined by or on
behalf of the Debtors;
-- assist in negotiations of a plan of reorganization;
-- provide testimony and other litigation support requested by
or on behalf of the Debtors;
-- assist the Debtors in communications with trade and other
vendors and creditors; and
-- provide other services as requested by or on behalf of the
Debtors.
The firm will be paid at these rates:
Senior Managing Directors
Directors / Senior Directors $1095 to 1,495 per hour
Managing Directors $825 to 1,100 per hour
Consultants/Senior Consultants $450 to 790 per hour
Administrative / Paraprofessionals $185 to 370 per hour
The firm will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Daniel Wikel, a senior managing director at FTI Consulting, Inc.,
disclosed in a court filing that the firm is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
The firm can be reached at:
Daniel P. Wikel
FTI CONSULTING INC.
Tel: (212) 651-7169
Fax: (212) 841-9350
Email: mike.katzenstein@fticonsulting.com
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. SmileDirectClub's 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. Tex. Lead Case No.
23-90786) on September 29, 2023. In the petition signed by Troy
Crawford, chief financial officer, the Debtor disclosed up to
$498,712,000 in assets and up to $1,051,823,000 in liabilities.
Judge Christopher M. Lopez oversees the case.
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.
SMILEDIRECTCLUB INC: Hires Jackson Walker as Conflicts Counsel
--------------------------------------------------------------
SmileDirectClub, Inc. and its affiliates seek approval from the
U.S. Bankruptcy Court for the Southern District of Texas to hire
Jackson Walker LLP as their co-counsel and conflicts counsel.
The firm will render these services:
a. provide legal advice and services regarding local rules,
practices and procedures, including Fifth Circuit law;
b. provide certain services in connection with administration
of the chapter 11 cases, including, without limitation, preparing
agendas, hearing notices and witness and exhibit lists, and
coordinating with chambers;
c. review and comment on proposed drafts of pleadings to be
filed with the Court;
d. appear in Court and at any meeting with the U.S. Trustee
and any meeting of creditors at any given time on behalf of the
Debtors as their bankruptcy local and conflicts co-counsel;
e. perform all other services assigned by the Debtors to the
Firm as bankruptcy local and conflicts co-counsel; and
f. provide legal advice and services on any matter on which
Kirkland may have a conflict, including any conflict matters
arising in these chapter 11 cases, or as needed based on
specialization.
The firm's current hourly rates are as follows:
Partners $565 - 1,715
Sr. Counsel $385 - 1,050
Associates $515 - 850
Paraprofessionals $225 - 450
The firm received a retainer in the amount of $250,000.
Matthew Cavenaugh, Esq., a partner at Jackson Walker, provided the
following in response to the request for additional information set
forth in Paragraph D.1 of the U.S. Trustee Fee Guidelines.
Question: Did the firm agree to any variations from, or
alternatives to, the firm's standard billing arrangements for this
engagement?
Answer: No. The firm and the Debtors have not agreed to any
variations from, or alternatives to, the firm's standard billing
arrangements for this engagement. The rate structure provided by
the firm is appropriate and is not significantly different from (a)
the rates that the Debtors charge for other non-bankruptcy
representatives or (b) the rates of other comparably skilled
professionals.
Question: Do any of the firm professionals in this engagement
vary their rate based on the geographical location of the Debtors'
Chapter 11 cases?
Answer: No. The hourly rates used by the firm in representing the
Debtors are consistent with the rates that the firm charges other
comparable Chapter 11 clients, regardless of the location of the
Chapter 11 case.
Question: If the firm has represented the Debtors in the 12
months prepetition, disclose the firm's billing rates and material
financial terms for the prepetition engagement, including any
adjustments during the 12 months prepetition. If the firm's billing
rates and material financial terms have changed post-petition,
explain the difference and the reasons for the difference.
Answer: Mr. Cavenaugh's hourly rate is $1,150. The rates of other
attorneys in the firm range from $515 to $1,715 an hour and the
paraprofessional rates range from $225 to $450 per hour. The firm
represented the Debtors during the weeks immediately before the
Petition Date, using the foregoing hourly rates.
Question: Have the Debtors approved the firm's budget and
staffing plan, and if so, for what budget period?
Answer: The firm has not prepared a budget and staffing plan.
Mr. Cavenaugh disclosed in a court filing that his firm is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
The firm can be reached through:
Matthew D. Cavenaugh, Esq.
Jackson Walker LLP
1401 McKinney Street, Suite 1900
Houston, TX 77010
Telephone: (713) 752-4200
Facsimile: (713) 752-4221
Email: mcavenaugh@jw.com
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. SmileDirectClub's 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. Tex. Lead Case No.
23-90786) on September 29, 2023. In the petition signed by Troy
Crawford, chief financial officer, the Debtor disclosed up to
$498,712,000 in assets and up to $1,051,823,000 in liabilities.
Judge Christopher M. Lopez oversees the case.
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.
SMILEDIRECTCLUB INC: Rival Align Objects to Insiders' Financing
---------------------------------------------------------------
Invisalign maker Align Technology is objecting to final approval of
the debtor-in-possession financing in SmileDirectClub's Chapter 11
case in Texas bankruptcy court as a continuation of Align's
litigation campaign bent on destroying its competitor.
According to Align Technology, Inc., the Debtors commenced the
Chapter 11 cases to pursue a sale process (without a stalking horse
bid) that is purportedly meant to test whether SmileDirectClub
should continue to operate as a going concern or liquidate and wind
down.
"In reality, these chapter 11 cases are a transparent attempt to
allow the Debtors' insiders to use their proposed DIP Facility to
escape potentially hundreds of millions of dollars of liability
(under potential claims for breach of fiduciary duty, commercial
tort claims, and chapter 5 causes of action) for only $20 million
of guaranteed new money," Align tells the Court.
"The proposed DIP Facility seeks to pledge all of the Debtors'
assets to insiders or entities controlled by insiders David
Katzman, Jordan Katzman, and Alexander Fenkell (collectively, the
"Insider DIP Lenders"), including valuable claims and causes of
action against those same Insider DIP Lenders. The Insider DIP
Lenders may then credit bid those DIP claims in a sale process run
by the Debtors, who, Align believes have made little or no effort
to market those claims and causes of action, despite the fact that
those claims appear to have significant value. In other words,
absent the appearance of a "white knight" bidder, the Debtors'
insiders will likely retain ownership of and operational control
over SmileDirectClub."
Align notes that while certainly beneficial to the insiders, this
will leave unsecured creditors (such as Align) with next to
nothing. This Court, Align asserts, should not condone the Insider
DIP Lenders' efforts to use this process to whitewash claims
against themselves with zero assurance unsecured creditors will
receive any recovery. If the Insider DIP Lenders are unwilling to
exclude potential claims and causes of action against insiders
(including themselves) from the collateral package, Align asserts
that the Court should deny final approval of the DIP Facility.
"In any event, there is simply no reason to grant final approval of
the DIP Facility at this time. The initial $20 million available
under the DIP Facility has already been approved, and there is no
assurance the remainder of the DIP Facility will ever become
available. Another $30 million could become available upon the
satisfaction of certain conditions that will occur, at the
earliest, November 28, 2023. But the costs of approval at this
time, before the Debtors' marketing process plays out, would impose
significant costs to the estates. More specifically, granting
final approval of the DIP Facility now would permit the Insider DIP
Lenders to scoop up valuable estate claims and causes of action as
collateral. The Motion also proposes, upon final approval, to roll
up a prepetition $5 million note provided by the same Insider DIP
Lenders. And this proposed roll-up does not provide for a typical
challenge period with respect to the prepetition "debt" being
rolled up despite being provided by insiders. Therefore, if the DIP
Facility is to be approved (which it should not), it should only be
approved on a further interim basis while parties, including the
Official Committee of Unsecured Creditors, continue to investigate
potential claims against insiders," Align tells the Court.
Align Technology is the largest individual unsecured creditor of
the Debtors. Align invented the technology for using clear plastic
aligners to straighten teeth, disrupting the wires-and-brackets
paradigm through which doctors manually moved teeth and corrected
patients' bites with metal braces. In 2014, almost two decades
after Align first helped dentists and orthodontists straighten
teeth, Debtors SmileDirectClub LLC, SDC Financial LLC, and
SmileDirectClub, Inc., created a direct-to-consumer clear aligner
company to compete with the Invisalign system. Align invested in
SDC in July 2016, through three interrelated agreements. On August
27, 2020, Align initiated a confidential arbitration proceeding
against SDC before the American Arbitration Association, alleging
that SDC breached a strategic supply agreement between the parties
that was entered into in 2016. On May 18, 2023, the arbitrator
issued a final award, finding that SDC breached the supply
agreement, and the arbitrator also awarded Align the $63 million in
damages addressed by the interim award. On Sept. 12, 2023, the
California Superior Court entered a $63 million judgment on its
order granting Align's petition to confirm the arbitration award
and denying SDC's petition to vacate that award.
Counsel to Align Technology, Inc.:
WHITE & CASE LLP
Charles R. Koster
609 Main Street, Suite 2900
Houston, Texas 77002
Telephone: (713) 496-9700
Email: charles.koster@whitecase.com
– and –
Jason N. Zakia
Gregory F. Pesce
Erin Rosenberg
Laura E. Baccash
111 South Wacker Drive, Suite 5100
Chicago, Illinois 60606
Telephone: (312) 881-5400
E-mail: jzakia@whitecase.com
gregory.pesce@whitecase.com
erin.rosenberg@whitecase.com
laura.baccash@whitecase.com
– and –
Andrew Zatz
Barrett Lingle
1221 Avenue of the Americas
New York, New York 10020
Telephone: (212) 819-8200
E-mail: azatz@whitecase.com
barrett.lingle@whitecase.com
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. SmileDirectClub's 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. Tex. Lead Case No.
23-90786) on Sept. 29, 2023. In the petition signed by Troy
Crawford, chief financial officer, the Debtor disclosed up to
$498,712,000 in assets and up to $1,051,823,000 in liabilities.
Judge Christopher M. Lopez oversees the case.
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.
SMILEDIRECTCLUB INC: Taps Centerview Partners as Investment Banker
------------------------------------------------------------------
SmileDirectClub, Inc. and its affiliates seek approval from the
U.S. Bankruptcy Court for the Southern Disrict of Texas to hire
Centerview Partners LLC as their investment banker.
The firm will render these services:
a. General Financial Advisory and Investment Banking Services:
i. familiarize itself with the business, operations,
properties, financial condition and prospects of the Debtors;
ii. review the Debtors' financial condition and outlook;
iii. assist in the development of financial data and
presentations to the Debtors' Board of Directors, various creditors
and other parties;
iv. evaluate the Debtors' debt capacity and capital structures
alternatives;
v. participate in negotiations among the Debtors, and related
creditors, suppliers, lessors and other interested parties with
respect to any of the transactions contemplated by the Engagement
Letter; and
vi. perform such other financial advisory services as may be
specifically agreed upon in writing by the Debtors and Centerview.
b. Restructuring Services:
i. analyze various Restructuring6 scenarios and the potential
impact of these scenarios on the value of the Debtors; and the
recoveries of those stakeholders impacted by the Restructuring;
ii. provide financial and valuation advice and assistance to
the Debtors in developing and seeking approval of a Plan;
iii. provide financial advice and assistance to the Debtors in
structuring any new securities to be issued pursuant to the
Restructuring;
iv. assist the Debtors and/or participate in negotiations with
entities or groups affected by the Restructuring; and
v. if requested by the Debtors, participate in hearings
before the bankruptcy court with respect to matters upon which
Centerview has provided advice, including as relevant, coordinating
with the Debtors and their advisors with respect to testimony in
connection therewith.
c. Financing Services:
i. provide financial advice and assistance to the Debtors in
structuring and effecting a Financing,8 identifying potential
Investors, and, at the Debtors' request, contacting such Investors;
and
ii. assist in the arranging of a Financing, the due diligence
process, and negotiating the terms of any proposed Financing.
d. Sale Services:
i. provide financial advice and assistance to the Debtors in
connection with a Sale,9 identifying potential acquirors and, at
the Debtors' request, contacting such potential acquirors; and
ii. assist the Debtors and/or participate in negotiations with
potential acquirors.
The firm will be compensated as follows:
(a) A monthly financial advisory fee of $100,000, the first of
which was due and paid by the Debtors upon execution of that
certain letter agreement dated as of June 1, 2023 and on each
monthly anniversary thereof, then $150,000, the first of which was
due on the third monthly anniversary of the date of the Original
Agreement and each monthly anniversary thereafter during the term
of Centerview's engagement. The amount of any Monthly Advisory Fee
paid to Centerview will be 50 percent credited after three (3)
months (but only once) against any Transaction Fee payable to
Centerview subject to subparagraph 2(b) of the Engagement Letter.
(b) If at any time during the term of Centerview's engagement
or within the twelve full months following the termination of
Centerview's engagement, (1) the Debtors consummate any
Restructuring or Sale or (2) the Debtors enter into a binding
agreement in principle, definitive agreement or Plan to effect a
Restructuring or Sale, and at any time (including following the
expiration of the Fee Period), any Restructuring or Sale is
consummated, Centerview shall be entitled to receive a transaction
fee, contingent upon the consummation of a Restructuring or Sale
and payable at the closing thereof equal to $7,000,000 less any
credits from the Monthly Advisory Fee or the Financing Fee.
Notwithstanding anything to the contrary in subparagraph 2(b) of
the Engagement Letter, in connection with any Restructuring or Sale
that is intended to be effected, in whole or in part, as a
prepackaged plan of reorganization anticipated to involve the
solicitation of acceptances of such plan in compliance with the
Bankruptcy Code, by or on behalf of the Debtors, from holders of
any class of the Debtors' securities, indebtedness or obligations
the Transaction Fee shall be payable (x) 50 percent upon receipt of
votes from the Debtors' creditors necessary to confirm such
Prepackaged Plan and (y) the balance shall be payable upon
consummation of such Restructuring or Sale.
(c) If at any time during the Fee Period, (1) the Debtors
consummate any Financing or (2) the Debtors receive and accept
written commitments for one or more Financings (the execution by a
potential financing source and the Debtors of a commitment letter
or securities purchase agreement or other definitive documentation
shall be deemed to be the receipt and acceptance of such written
commitment), and at any time (including following the expiration of
the Fee Period) any Financing is consummated, the Debtors will pay
to Centerview the following:
i. 1.00 percent of the aggregate amount of financing
commitments of any indebtedness issued that is secured by a first
lien, including any DIP Financing;
ii. 2.00 percent of the aggregate amount of financing
commitments of any indebtedness issued that (x) is secured by a
second or junior lien, (y) is unsecured, and/or (z) is
subordinated; and
iii. 3.00 percent of the aggregate amount of financing
commitments of any equity or equity-linked securities or
obligations issued.
(d) The amount of any Financing Advisory Fee, excluding any
Financing Advisory Fee related to DIP Financing, paid to Centerview
will be 50% credited against any Transaction Fee payable to
Centerview pursuant to subparagraph 2(b) of the Engagement Letter.
For the avoidance of doubt, no Financing Advisory Fees will be due
relating to Financings (a) provided by the Debtors' founders or
management team or (b) relating to the portion of a conversion or
refinancing of a Financing procured by Centerview into another
Financing procured by Centerview (e.g., the conversion of a bridge
into an exit financing).
The firm received a retainer in the amount of $150,000.
As disclosed in the court filing, Centerview is "disinterested" as
such term is defined in section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Marc D. Puntus
Ryan Kielty
Centerview Partners LLC
31 West 52nd Street
New York, NY 10019
Telephone: (212) 380-2650
Facsimile: (212) 380-2651
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. SmileDirectClub's 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. Tex. Lead Case No.
23-90786) on September 29, 2023. In the petition signed by Troy
Crawford, chief financial officer, the Debtor disclosed up to
$498,712,000 in assets and up to $1,051,823,000 in liabilities.
Judge Christopher M. Lopez oversees the case.
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.
SMILEDIRECTCLUB INC: Taps PricewaterhouseCoopers as Tax Accountant
------------------------------------------------------------------
SmileDirectClub, Inc. and its affiliates seek approval from the
U.S. Bankruptcy Court for the Southern District of Texas to hire
PricewaterhouseCoopers LLP as tax compliance and tax restructuring
services provider.
The firm will render these services:
a. Tax Compliance Statement of Work (SOW): The Tax Compliance
SOW covers corporate and partnership tax compliance for
SmileDirectClub, Inc. (SDC, Inc.), SDC Financial, LLC (SDC
Financial) SmileDirectClub, LLC (SDC LLC), and SDC Holding, LLC
(SDC Holding) for the calendar year beginning January 1, 2022 and
ending Dec. 31, 2022.
Services to be provided by PwC LLP are as follows:
i. PwC LLP will prepare and sign as preparer the U.S.
Partnership Income Tax Return, Form 1065 for SDC Financial. PwC LLP
will also prepare and sign as preparer the required state
partnership income tax returns, as requested by SDC Financial for
itself and certain entities.
ii. PwC LLP will also prepare and sign as preparer the U.S.
Corporate Income Tax Return, Form 1120, for SDC Inc. and SDC
Holdings, Inc. & Subsidiaries. PwC LLP will also prepare and sign
as preparer the required state corporate income tax returns.
b. Tax Restructuring SOW: The Tax Restructuring SOW covers
assistance with SDC, Inc.'s and certain of its subsidiaries'
proposed debt restructuring. PwC LLP will assist SDC, Inc. with the
following related to its potential debt restructuring:
i. Analyze the U.S. federal income tax implications of the
debt restructuring proposed by SDC, Inc. and SDC, Inc.'s legal
counsel;
ii. Consider debt restructuring alternatives and the related
U.S. federal income tax implications; and
iii. If requested, model the U.S. federal income tax
implications to SDC Financial and SDC, Inc.
The firm will receive compensation as follows:
a. Tax Compliance SOW:
i. The Tax Compliance SOW is a fixed fee arrangement
whereby the Debtors have agreed to pay PwC LLP approximately
$870,000 for certain tax work, exclusive of expenses. Prior to the
Petition Date, the Debtors had paid PwC LLP $521,000 of such fixed
fee amount, of which $165,000 remains to be applied against
approved postpetition fees for such postpetition tax compliance
services and $0.00 of the agreed-upon fixed fee has not yet been
paid by the Debtors to PwC LLP.
b. Tax Restructuring SOW:
i. The Tax Restructuring SOW is an hourly fee arrangement
pursuant to the rates set forth below, exclusive of expenses. Prior
to the Petition Date, the Debtors paid PwC LLP a retainer of
$200,000, of which $188,000 amount remains as of the Petition Date
to be applied against tax restructuring services set forth in the
Tax Restructuring SOW.
Title Rates
WNTS Tax Partner $1,276
WNTS Tax Director $1,181
WNTS Tax Manager $1,013
WNTS Tax Associate $662
Tax Partner $750
In the 90 days prior to the Petition Date, the Debtors paid PwC LLP
approximately $2,655,817.59, $200,000 of which was on account of
prepetition retainers.
Michael V. Mulloy, a Federal Tax Services Partner at
PricewaterhouseCoopers LLP, assured the court that his firm is a
"disinterested person" within the meaning of section 101(14) of the
Bankruptcy Code, as modified by section 1107(b) of the Bankruptcy
Code, and as required by section 327(a) of the Bankruptcy Code.
The firm can be reached through:
Michael V. Mulloy
PricewaterhouseCoopers LLP
300 Madison Avenu
New York, NY 10017
Tel: (647) 471-3000
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. SmileDirectClub's 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. Tex. Lead Case No.
23-90786) on September 29, 2023. In the petition signed by Troy
Crawford, chief financial officer, the Debtor disclosed up to
$498,712,000 in assets and up to $1,051,823,000 in liabilities.
Judge Christopher M. Lopez oversees the case.
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.
SONOMA PHARMACEUTICALS: May Sell $51.3M Worth of Securities
-----------------------------------------------------------
Sonoma Pharmaceuticals, Inc. filed with the Securities and Exchange
Commission a registration statement on Form S-3 in connection with
the offer and sale of common stock, preferred stock, debt
securities or warrants, either separately or in units, in one or
more offerings. The preferred stock and warrants may be
convertible into or exercisable or exchangeable for common or
preferred stock. The Company will specify in the accompanying
prospectus supplement more specific information about any such
offering. The aggregate initial offering price of all securities
sold under this prospectus will not exceed $51,300,000, including
the U.S. dollar equivalent if the public offering of any such
securities is denominated in one or more foreign currencies,
foreign currency units or composite currencies.
The Company may offer these securities independently or together in
any combination for sale directly to investors or through
underwriters, dealers or agents. The Company will set forth the
names of any underwriters, dealers or agents and their compensation
in the accompanying prospectus supplement.
The Company's common stock is traded on the Nasdaq Capital Market
under the symbol "SNOA." On Oct. 30, 2023, the last reported sale
price for the Company's common stock was $0.18 per share. The
aggregate market value of its outstanding voting and non-voting
equity held by non-affiliates on October 30, 2023 was $2,417,832
based on a share price of $0.18. As of Nov. 3, 2023, during the
prior 12 calendar month period, the Company has offered $3,051,726
of securities pursuant to a previously filed Form S-3 pursuant to
General Instruction I.B.6.
A full-text copy of the prospectus is available for free at:
https://www.sec.gov/Archives/edgar/data/1367083/000168316823007624/sonoma_s3.htm
About Sonoma Pharmaceuticals
Sonoma Pharmaceuticals, Inc. (NASDAQ: SNOA) --
http://www.sonomapharma.com-- is a global healthcare company
developing and producing stabilized hypochlorous acid, or HOCl,
products for a wide range of applications, including wound care,
eye care, oral care, dermatological conditions, podiatry, animal
health care and non-toxic disinfectants. The Company's products
reduce infections, itch, pain, scarring, and harmful inflammatory
responses in a safe and effective manner. In-vitro and clinical
studies of HOCl show it to have impressive antipruritic,
antimicrobial, antiviral, and anti-inflammatory properties. The
Company's stabilized HOCl immediately relieves itch and pain, kills
pathogens and breaks down biofilm, does not sting or irritate the
skin, and oxygenates the cells in the area treated, assisting the
body in its natural healing process. The Company sells its
products either directly or via partners in 55 countries
worldwide.
Sonoma Pharmaceuticals reported a net loss of $5.15 million for the
year ended March 31, 2023, compared to a net loss of $5.08 million
for the year ended March 31, 2022. As of March 31, 2023, the
Company had $16.23 million in total assets, $8.25 million in total
liabilities, and $7.98 million in total stockholders' equity.
Atlanta, Georgia-based Frazier & Deeter, LLC, the Company's auditor
since 2021, issued a "going concern" qualification in its report
dated June 21, 2023, citing that the Company has incurred
significant losses and negative operating cash flows and needs to
raise additional funds to meet its obligations and sustain its
operations. These conditions raise substantial doubt about its
ability to continue as a going concern.
SPIRIT AEROSYSTEMS: Moody's Rates New $1.2BB 2nd Lien Notes 'B3'
----------------------------------------------------------------
Moody's Investors Service has assigned a B3 rating to the $1.2
billion of backed senior secured second lien notes of Spirit
AeroSystems, Inc. These notes will be due in November of 2030. The
proceeds of the new second lien notes will be used to refinance the
company's existing $1.2 billion of second lien notes with a
maturity date of April 15, 2025. The refinancing of the second lien
notes does not affect Moody's B2 corporate family rating or any
other of its ratings of Spirit or the current negative ratings
outlook.
On November 7, Spirit's parent, Spirit AeroSystems Holdings, Inc.
announced that it launched an underwritten offering of $200 million
of its Class A common stock. It also announced that Spirit launched
an offer for $200 million of exchangeable senior unsecured notes
that will mature in 2028. The proceeds of these two offerings will
bolster the company's liquidity and be available for general
corporate purposes.
RATINGS RATIONALE
The B2 corporate family rating ("CFR") reflects Spirit's weak
credit metrics, mixed track record of execution, and near-term
challenges relating to the ramp up in production of key aerospace
programs. The rating also reflects Moody's expectations of limited
cash generation through 2025. Debt-to-EBITDA remains very high at
more than 10x. However, Moody's expects leverage to decline
meaningfully to below 6x over the next 18 months as Spirit
continues to increase production on its most important program, the
737 MAX. The refinancing of the company's 2nd lien notes relieves
the refinancing risk that would have increased as the maturity of
these notes in April 2025 approached.
Moody's recognizes Spirit's considerable scale as a strategically
important supplier in the aerostructures market. The company
maintains a sustainable competitive position underpinned by its
life-of-program production agreements and long-term contracts on
key Boeing and Airbus platforms. The rating also reflects Spirit's
position as the largest independent supplier of aerostructures to
Boeing, and the company's role as the sole provider of the Boeing
737 fuselage and critical parts for other aircraft programs.
The negative outlook reflects heightened near-term execution risk
relating to the ramp up of the 737 MAX, as well as the risk that
supply chain issues or quality issues could delay planned increases
in production rates.
The SGL-3 speculative grade liquidity ("SGL") rating reflects
Moody's opinion that liquidity is adequate. Cash as of September
28, 2023 totaled $374 million. Moody's expects Spirit to have
negative free cash flow approaching $250 million in 2023, although
Moody's notes that this includes one-time benefits from the
termination of a pension plan as well as customer advances. The
equity and exchangeable debt offerings proceeds will significantly
increase cash on hand. The October 12, 2023 Memorandum of Agreement
with The Boeing Company provides favorable shipset pricing
adjustments on the 787 program and a cash infusion of $100 million
meant to cover investment in tooling and capital in support of
higher rate increases on these two programs. Moody's anticipates
improved cash generation during 2024, although free cash generation
will be limited with FCF-to-debt either flat or in the low
single-digits. Spirit does not have a revolving credit facility.
The Ba2 rating on Spirit's first lien senior secured debt is three
notches above the B2 CFR. This reflects the first lien security
interest in substantially all of the company's assets. The B3
rating on the second lien senior secured notes reflects their
junior claim in substantially all assets of the company. The Caa1
rating for the company's senior unsecured notes reflects their
first loss position and lack of security.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
Factors that could lead to a ratings upgrade include improved
execution across commercial programs, particularly the 737 MAX,
strengthened liquidity, and expectations of sustained earnings
growth.
Factors that could lead to a ratings downgrade include delays in
the ramp up of narrowbody aircraft production rates (particularly
the 737MAX). Expectations of weakening liquidity or a further
weakening of earnings could also result in downward rating
pressure.
Headquartered in Wichita, Kansas, Spirit AeroSystems, Inc. is a
subsidiary of publicly traded Spirit AeroSystems Holdings, Inc.
(NYSE: SPR). The company designs and manufactures aerostructures
for commercial aircraft. Components include fuselages, pylons,
struts, nacelles, thrust reversers and wing assemblies, principally
for Boeing but also for Airbus and others. Revenues for the twelve
months ended September 28, 2023 were approximately $5.5 billion.
The principal methodology used in this rating was Aerospace and
Defense published in October 2021.
SPIRIT AEROSYSTEMS: S&P Affirms 'B' ICR on Weak Cash Flow
---------------------------------------------------------
S&P Global Ratings affirmed its 'B' issuer credit rating on Spirit
AeroSystems Inc. S&P assigned a 'B-' issue-level rating with a '5'
recovery rating (rounded estimate recovery of 25%) to the company's
proposed $1,200 million senior secured second-lien notes. The
company will use proceeds from the proposed notes to repay the 7.5%
senior secured second-lien notes due 2025.
The negative outlook reflects S&P's expectation that credit
metrics, though improving, will remain weak in the near term. It
believes operating inefficiencies and higher interest expense will
be a drag on profitability and delay recovery in cash flows.
S&P said, "We expect negative free cash flow in 2023, improving
gradually into 2024. Spirit has seen strong revenue growth due to
strong demand for commercial aircraft. However, low volumes,
elevated labor costs, continued supply chain disruptions, and high
debt servicing costs have contributed to negative cash flow over
the last 24 months. We believe a memorandum of agreement (MOA) that
Spirit reached in October with Boeing, its largest customer, will
materially improve profitability. The deal provides Spirit with
increased pricing on the 787 platform and support on the tooling
needs for the MAX and 787 programs. It also lessens the burden of
repayment of Boeing cash advances and liabilities related to
vertical fin and bulkhead quality issues. We expect the Boeing MOA
to boost cash materially in the short term, allowing the company to
better absorb higher operating costs associated with production
increases. We expect modest margin expansion over the next 12 to 18
months due to improved pricing and the build rate hikes across all
platforms."
Spirit's capital markets transactions improve liquidity. The
company recently issued common equity and $200 million convertible
notes, in addition to its $374 million of cash on hand at the end
of the third quarter. Spirit has been burning cash at a high rate
over the past two years due largely to operational inefficiency and
supply chain pressures. S&P said, "While we expect free cash flow
to at least breakeven in 2024, we believe building cash is
important to fund working capital and absorb unexpected cash needs.
The company does not have a committed revolving credit facility. We
expect funds from the company's proposed $1,200 million senior
secured second-lien note transaction to satisfy the existing 7.5%
notes due 2025, giving the company a much more attractive debt
maturity schedule, with the next significant maturity being $300
million in 2026. The refinancing will increase interest expense,
however due to the higher expected coupon on the new notes. The
proposed convertible notes will also contribute to the elevated
debt service cost, creating a material drag on cash flows. We
expect FOCF to remain negative in 2023, with a cash burn of about
$350 million, reaching at least breakeven in 2024."
The negative outlook on Spirit reflects S&P's expectation that
credit metrics, though improving, will remain weak in the near
term. Demand remains robust and improved pricing will provide a
faster path to recovery. Operational pressures remain and will
continue to be a drag on the metrics until the company can improve
and sustain build rates.
S&P could lower its rating on Spirit if funds from operations (FFO)
remains below breakeven over the next 12 months with no clear path
to recovery. This would likely occur if:
-- Operating inefficiencies persist;
-- Supply chain disruptions cause meaningful delays in deliveries;
or
-- Higher than anticipated cash utilization.
S&P could raise its outlook on Spirit if FFO to debt improves
comfortably above breakeven and we expect it to remain at such
levels. This would likely occur if:
-- Production volumes on key platforms improve in line with
expectations; and
-- EBITDA margins improve as a result of better operating
efficiency.
STILLPOINT INC: Seeks to Tap Kaplan Johnson Abate & Bird as Counsel
-------------------------------------------------------------------
Stillpoint, Inc. seeks approval from the U.S. Bankruptcy Court for
the Western District of Kentucky to employ Kaplan Johnson Abate &
Bird, LLP.
The Debtor requires legal counsel to:
(a) give advice with respect of the powers and duties of the
Debtor in the continued management of its financial affairs and
estate assets;
(b) take all necessary action to protect and preserve the
estate;
(c) prepare legal papers; and
(d) perform any and all other legal services for the Debtor in
connection with this Chapter 11 case and the formulation and
implementation of its Chapter 11 plan.
The firm has received payments totaling $2,938 in the aggregate as
retainer on account of services rendered and to be rendered to the
Debtor in connection with this case.
Tyler Yeager, Esq., an attorney at Kaplan Johnson Abate & Bird,
disclosed in a court filing that the firm is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
Charity S. Bird, Esq.
Tyler R. Yeager, Esq.
Kaplan Johnson Abate & Bird LLP
710 W. Main St., 4th Floor
Louisville, KY 40202
Telephone: (502) 416-1630
Facsimile: (502) 540-8282
Email: cbird@kaplanjohnsonlaw.com
tyeager@kaplanjohnsonlaw.com
About Stillpoint Inc.
Stillpoint, Inc. filed Chapter 11 petition (Bankr. W.D. Ky. Case
No. 23-32419) on Oct. 16, 2023, with up to $50,000 in assets and
$100,001 to $500,000 in liabilities. Donald A. Taylor, Jr.,
president, signed the petition.
Tyler R. Yeager, Esq., at Kaplan Johnson Abate & Bird, LLP
represents the Debtor as legal counsel.
STORNOWAY DIAMONDS: Liquidity Woes Prompt CCAA Re-filing
--------------------------------------------------------
The Superior Court of Quebec (Commercial Division) ("Court")
rendered an initial order pursuant to the Companies' Creditors
Arrangement Act ("CCAA") in respect of 1172420 Canada Inc. and
Stornoway Diamonds (Canada) Inc. ("Stornoway"), and Deloitte
Restructuring Inc. was appointed to monitor the business and
financial affairs of Stornoway as an officer of the Court. Under
the Initial Order, the Court ordered a stay of any proceeding or
action against Stornoway or its property.'
According to the Debtors, after emerging from CCAA protection in
2019, they are once again experiencing serious liquidity issues, no
longer have the ability to meet their liabilities as they become
due and are insolvent.
Following a thorough review of their alternatives and in light of
their intention to conduct a thorough sale and investment
solicitation process ("SISP"), the Debtors seek creditor protection
under the CCAA in order to, inter alia, effect a comprehensive
restructuring in respect of their business and assets for the
greater benefit of their stakeholders.
The Debtor said they intend to finance the present CCAA proceedings
from the sale of their current inventory of diamonds, but may
return in front of this Court in order to approve and implement an
interim financing if necessary.
The Initial Order allows Stornoway to continue payments to
employees in the normal course of business, regardless of whether
the work took place before or after the commencement of the CCAA
proceedings.
A copy of the Initial Order and the Monitor’s report are
available on the Monitor's website at
https://www.insolvencies.deloitte.ca/stornoway. As appears from the
Initial Order, Stornoway has sufficient liquidity to meet its
financial obligations during the stay period granted pursuant to
the CCAA. If you are unable to access the Monitor’s website,
please communicate with us at 514-369-9666 or
Stornoway@deloitte.ca, leaving your name, telephone as well as your
email address or your postal address, depending on the manner in
which you wish to receive a copy of the Initial Order.
Monitor can be reached at:
Deloitte Restructuring Inc.
Attn: Benoit Clouatre
Jean-Francois Nadon
Jacob D. Dupuis
Chantal Leclerc
1190, avenue des Canadiens-de-Montreal
Suite 500
Montreal QC H3B 0M7
Tel.: 514-369-9666
Fax.: 514-390-4103
Email: bclouatre@deloitte.ca
jnadon@deloitte.ca
jdubedupuis@deloitte.ca
jeleclerc@deloitte.ca
stornoway@deloitte.ca
Attorneys for the Debtors:
Norton Rose Fulbright Canada LLP
Attn: Luc Morin
Guillaume Michaud
Arad Mojtahedi
Noah Zucker
Suite 2500 - 1 Place Ville Marie
Montreal, Quebec H3B 1R1
Tel.: 514-847-4860
514-847-4417
514-847-4582
514-847-6076
Fax.: 514-286-5474
Email: luc.morin@nortonrosefulbright.com
guillaume.michaud@nortonrosefulbright.com
arad.mojtahedi@nortonrosefulbright.com
noah.zucker@nortonrosefulbright.com
Attorneys for the Monitor:
Osler Hoskin Harcourt LLP
Attn: Sandra Abitan
Ilia Kravtsov
Julien Morissette
1000, rue De La Gauchetiere Ouest
Bureau 2100
Montreal QC H3B 4W5
Tel: 514-904-8100
Fax: 514-904-8101
Email: sabitan@osler.com
ikravtsov@osler.com
jmorissette@osler.com
Stornoway Diamonds (Canada) Inc. --
https://www.stornowaydiamonds.com/English/home/default.html -- owns
and operates 100% of the Renard Mine.
SUNLIGHT FINANCIAL: Unsecureds Will Get 100% in Prepackaged Plan
----------------------------------------------------------------
Sunlight Financial Holdings Inc., and its Affiliated Debtors filed
with the U.S. Bankruptcy Court for the District of Delaware a
Disclosure Statement for Joint Prepackaged Plan dated October 31,
2023.
The Company is a business-to-business-to-consumer, technology
enabled point-of-sale financing platform that partners with
contractors and lenders across the United States to offer
homeowners affordable loans for residential solar energy system
installation and other home upgrades.
The Debtors are commencing Solicitation to implement one of two
restructuring transactions embodied in the Plan (the "Restructuring
Transactions") and contemplated in the Restructuring Support
Agreement dated October 30, 2023 (as may be subsequently amended,
restated or supplement from time to time, the "Restructuring
Support Agreement") which resulted from significant arm's-length
negotiations between the Debtors, CRB, EDUH, and certain holders
(the "Consenting Equity Holders") of Holdings' Class A Common
Stock, par value $0.0001 per share (the "Common Stock").
The Plan contemplates a toggle between two possible Restructuring
Transactions, both of which provide 100% recoveries to holders of
General Unsecured Claims and ensure the Debtors can effectuate a
successful reorganization.
The EDUH Transaction
In connection with the EDUH Transaction, pursuant to the Investment
Agreement, EDUH committed to a $15,000,000 direct investment in the
Company in exchange for (i) Plan Sponsor New Equity in the amounts
prescribed by the Investment Agreement and the Capital Schedule,
subject to dilution by New Equity issued in connection with the
Management Incentive Plan and the conversion of any Convertible
Notes following the Effective Date (ii) the Reorganized Debtors'
and CRB's entry into the Amended CRB Agreements, (iii) CRB's
impairment of its CRB Claims, as set forth in the Plan, and (iv)
CRB's commitment to provide exit financing in the form of the
delayed-draw Convertible Notes convertible into New Equity in an
aggregate principal amount of up to $20,000,000, pursuant to the
Note Purchase Agreement.
If the Debtors consummate the EDUH Transaction, the Debtors will
also issue the Consenting Creditor New Equity to CRB in the
percentages set forth in the Capital Schedule. The Consenting
Creditor New Equity is also subject to dilution under substantially
the same terms as the Plan Sponsor New Equity. Together, CRB and
the Plan Sponsor will, on the Effective Date, collectively own 100%
of the New Equity, and accordingly, indirectly own all or
substantially all of the Reorganized Debtors' assets, including any
and all retained rights, claims, and causes of action.
The CRB Transaction
If the Debtors are unable to consummate the EDUH Transaction but
certain conditions under the Plan and Restructuring Support
Agreement are met, the Debtors will file a notice on the docket of
the Chapter 11 Cases designating CRB as the Plan Sponsor and, as
soon as practicable thereafter seek to consummate the CRB
Transaction. Except as set forth in the Investment Agreement, the
Escrow Agreement, and the Restructuring Support Agreement, the
Debtors shall be entitled to retain the Escrowed Funds of not less
than $7,500,000 if they are unable to consummate the EDUH
Transaction under certain termination events.
In connection with the CRB Transaction, CRB will, in exchange for
100% of the New Equity, (subject to dilution by New Equity issued
in connection with the Management Incentive Plan and the conversion
of any Convertible Notes following the Effective Date), a cash
payment of $4,391,415.34, and a cash payment of $850,000 on the
date that is the one year anniversary of the Effective Date, (i)
commit to a Direct Investment, (ii) enter into the Amended CRB
Agreements, (iii) impair its CRB Claims, as set forth in the Plan,
and (iv) provide exit financing in the form of delayed-draw
Convertible Notes convertible into New Equity in an aggregate
principal amount of up to $20,000,000, pursuant to the Note
Purchase Agreement. The Debtors shall only consummate the CRB
Transaction on the Effective Date if they are unable to consummate
an EDUH Transaction with EDUH under certain circumstances.
Upon consummating the CRB Transaction, on the Effective Date, CRB
will own 100% of the New Equity (subject to further dilution as
provided by the Management Incentive Plan and the conversion of the
Convertible Notes), and accordingly, indirectly own all or
substantially all of the Reorganized Debtors' assets, including
their claims and causes of action.
Class 4 consists of General Unsecured Claims. Except to the extent
that a holder of a General Unsecured Claim agrees to less favorable
treatment with the Debtors (and the Consenting Creditor) or the
Reorganized Debtors, as applicable, the General Unsecured Claims
shall be Reinstated, and the legal, equitable, and contractual
rights of the holders of any Allowed General Unsecured Claim shall
be unaltered by the Plan. On and after the Effective Date, the
Reorganized Debtors shall continue to satisfy, dispute, pursue, or
otherwise reconcile each General Unsecured Claim in the ordinary
course of business as if the Chapter 11 Cases had not been
commenced. This Class will receive a distribution of 100% of their
allowed claims. This Class is unimpaired.
On the Effective Date, all Existing Interests shall be canceled and
deemed to reject the Plan, and holders of Existing Interests issued
and outstanding as of the Effective Date shall neither receive nor
retain any property of the Debtors or interest in property of the
Debtors on account of such Existing Interests.
During the Chapter 11 Cases, the Debtors intend to operate their
business in the ordinary course and will seek authorization from
the Bankruptcy Court to make payment in full on a timely basis to
their contractors, capital providers, trade creditors, and
employees of amounts due prior to and during the Chapter 11 Cases.
A full-text copy of the Disclosure Statement dated October 31, 2023
is available at https://urlcurt.com/u?l=MXzCle from
PacerMonitor.com at no charge.
About Sunlight Financial Holdings
Sunlight Financial Holdings Inc. operates a
business-to-business-to-consumer, technology-enabled point-of-sale
financing platform. The Company provides solar and home
improvement contractors across the United States with the ability
to offer homeowners loans funded by the Company's capital
providers. The Company uses proprietary technology and deep credit
expertise to simplify the financing process for contractors and
installers, capital providers, and homeowners, successfully helping
over 125,000 homeowners install residential solar systems, reduce
their carbon footprint, and save money.
Sunlight Financial Holdings Inc. and its affiliates sought relief
under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead
Case No. 23-11794) on Oct. 30, 2023. In the petition filed by
Matthew R. Potere, as chief executive officer, the Debtor reported
total assets as of Aug. 31, 2023 amounting to $403,848,901 and
total debt of $173,943,096.
The Debtors tapped WEIL, GOTSHAL & MANGES LLP as bankruptcy
counsel; RICHARDS, LAYTON & FINGER, P.A., as local counsel; ALVAREZ
& MARSAL NORTH AMERICA, LLC, as financial advisor; and GUGGENHEIM
PARTNERS, LLC, as investment banker. OMNI AGENT SOLUTIONS, INC.,
is the claims agent.
T&J OF BROOKSVILLE: Case Summary & 10 Unsecured Creditors
---------------------------------------------------------
Debtor: T&J of Brooksville LLC
626 South Broad Street
Brooksville FL 34601
Business Description: The Debtor is a lessor of residential
buildings and dwellings. The Debtor is the
owner of real property located at 626 South
Broad St, Brooksville, FL 34601 valued at
$1.30 million.
Chapter 11 Petition Date: November 9, 2023
Court: United States Bankruptcy Court
Middle District of Florida
Case No.: 23-05076
Debtor's Counsel: Andrew Wit, Esq.
WIT LAW, PLLC
2102 W Cass St. 2nd FLoor
Tampa FL 33606
Tel: 813-344-0167
Email: awit@witlaw.com
Total Assets: $1,320,754
Total Liabilities: $3,735,057
The petition was signed by Tom May as authorized member.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 10 unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/ISAC3BI/TJ_of_Brooksville_LLC__flmbke-23-05076__0001.0.pdf?mcid=tGE4TAMA
TEHUM CARE: Wants to Redo Mediation After Exit of Bankruptcy Judge
------------------------------------------------------------------
James Nani of Bloomberg Law reports that a bankrupt prison
healthcare company will seek to redo mediation that led to a
creditor deal after the judge who brokered the talks admitted to a
romantic relationship with an attorney involved in the
negotiations.
Tehum Care Services Inc. and its unsecured creditors committee aim
to tap retired Delaware Bankruptcy Judge Christopher S. Sontchi to
oversee a second round of mediation related to prisoner malpractice
claims, according to a filing Wednesday, November 8, 2923, in the
US Bankruptcy Court for the Southern District of Texas.
About Tehum Care Services
Tehum Care Services Inc., doing business as Corizon Health Services
Inc., is a privately held prison healthcare contractor in the
United States. It is based in Brentwood, Tenn.
Tehum Care Services filed a petition for relief under Chapter 11 of
the Bankruptcy Code (Bankr. S.D. Texas Case No. 23-90086) on Feb.
13, 2023. In the petition filed by Russell A. Perry, as chief
restructuring officer, the Debtor reported assets between $1
million and $10 million and liabilities between $10 million and $50
million.
Judge Christopher M. Lopez oversees the case.
The Debtor tapped Gray Reed & McGraw, LLP as bankruptcy counsel;
Bradley Arant Boult Cummings, LLP, as special litigation counsel;
and Ankura Consulting Group, LLC, as financial advisor. Russell A.
Perry, senior managing director at Ankura, serves as the Debtor's
chief restructuring officer. Kurtzman Carson Consultants, LLC, is
the claims, noticing and solicitation agent.
The U.S. Trustee for Region 7 appointed an official committee to
represent unsecured creditors in the Debtor's Chapter 11 case.
Stinson, LLP and Dundon Advisers, LLC, serve as the committee's
legal counsel and financial advisor, respectively.
THREE GUYS: Seeks to Hire Brian K. McMahon as Bankruptcy Counsel
----------------------------------------------------------------
Three Guys Roofing, Inc. seeks approval from the U.S. Bankruptcy
Court for the Southern District of Florida to employ Brian K.
McMahon, Esq., an attorney at Brian K. McMahon, PA, to handle its
Chapter 11 case.
The firm's services include:
(a) advising the Debtor with respect to its powers and
duties;
(b) advising the Debtor with respect to its responsibilities
in complying with the U.S. Trustee's Operating Guidelines and
Reporting Requirements and with the rules of the court;
(c) preparing legal papers;
(d) protecting the interest of the Debtor in all matters
pending before the court; and
(e) representing the Debtor in negotiation with its creditors
in the preparation of a Chapter 11 plan.
The attorney agreed to accept $5,000 as retainer.
The Debtor will pay Mr. McMahon $400 per month.
Mr. McMahon disclosed in a court filing that he is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
Brian K. McMahon, Esq.
Brian K. McMahon, PA
1401 Forum Way, 6th Floor
West Palm Beach, FL 33401
Telephone: (561) 478-2500
Facsimile: (561) 478-3111
Email: brian@bkmbankruptcy.com
About Three Guys Roofing
Three Guys Roofing, Inc. filed a voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No.
23-18506) on Oct. 17, 2023, with as much as $1 million in both
assets and liabilities. Shawn Wolfe, president, signed the
petition.
Judge Mindy A. Mora oversees the case.
Brian K. McMahon, Esq., at Brian K. McMahon, PA serves as the
Debtor's legal counsel.
TIMOTHY HILL: Seeks Approval to Hire Berger Fischoff as Attorney
----------------------------------------------------------------
Timothy Hill Children's Ranch, Inc. seeks approval from the U.S.
Bankruptcy Court for the Eastern District of New York to hire
Berger, Fischoff, Shumer, Wexler & Goodman, LLP as its attorneys.
The firm's services include:
a. advising the Debtor with respect to its powers and duties
in the continued management of its business and property;
b. representing the Debtor at court hearings on matters
pertaining to its affairs;
c. assisting the Debtor in the preparation and negotiation of
a plan of reorganization with its creditors;
d. preparing legal papers; and
e. providing other legal services necessary to administer the
Debtor's Chapter 11 case.
The firm's hourly rates are as follows:
Partners $550 to $635 per hour
Associates $400 to $500 per hour
Paralegals $185 per hour
Berger Fischoff will be paid a retainer of $50,000, plus $1,738 for
the filing fee.
Heath S. Berger, Esq., a partner at Berger, Fischoff, Shumer,
Wexler & Goodman, 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:
Heath S. Berger, Esq.
BERGER FISCHOFF SHUMER WEXLER & GOODMAN LLP
6901 Jericho Turnpike #230
Syosset, NY 1179
Phone: (800) 806-1136
Email: hberger@bfslawfirm.com
About Timothy Hill Children's Ranch, Inc.
Timothy Hill Children's Ranch, Inc. owns and operates transitional
housing programs for troubled teens and young adults.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D. N.Y. Case No. 23-73821) on October 16,
2023. In the petition signed by Thaddaeis Hill, executive director,
the Debtor disclosed $13,637,708 in assets and $4,841,336 in
liabilities.
Judge Louis A. Scarcella oversees the case.
Heath S. Berger, Esq., at Berger, Fischoff, Shumer, Wexler &
Goodman, LLP, represents the Debtor as legal counsel.
TRANSPORT SERVICE: Voluntary Chapter 11 Case Summary
----------------------------------------------------
Debtor: Transport Service of Central Indiana Inc.
9195 East U.S. 136
Brownsburg, IN 46112
Business Description: The Debtor is a general freight trucking
company.
Chapter 11 Petition Date: November 8, 2023
Court: United States Bankruptcy Court
Southern District of Indiana
Case No.: 23-04975
Judge: Hon. James M. Carr
Debtor's Counsel: David Krebs, Esq.
HESTER BAKER KREBS LLC
One Indiana Sq Suite 1330
Indianapolis IN 46204
Tel: 317-833-3030
Email: dkrebs@hbkfirm.com
Estimated Assets: $0 to $50,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Cathy Reed as president.
The Debtor failed to include in the petition a list of its 20
largest unsecured creditors.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/7WTGTYY/Transport_Service_of_Central_Indiana__insbke-23-04975__0001.0.pdf?mcid=tGE4TAMA
TRI-STATE PAPER: Seeks Approval to Hire an Accountant
-----------------------------------------------------
Tri-State Paper, Inc. seeks approval from the U.S. Bankruptcy Court
for the Eastern District of Pennsylvania to employ Joseph M. Grey
CPA, EA, to serve as its accountant.
Mr. Grey will render these services:
(a) prepare the Debtor's 2022 federal, state, and local tax
returns;
(b) prepare the monthly operating reports required by the
bankruptcy code; and
(c) provide assistance in developing a plan of reorganization.
Mr. Grey will charge the Debtor a flat rate of $7,000 for
completion of its 2022 federal, state, and local tax returns,
inclusive of returns for Pennsylvania, New Jersey, and Delaware.
For all other services, he will bill the Debtor at an hourly rate
of $250.
Mr. Grey assured the court that he does not represent or hold any
interest adverse to the debtor or the estate with respect to the
matter for which he will be retained under 11 U.S.C. Sec. 327(a).
The accountant can be reached at:
Joseph M. Grey CPA, EA
1834 Tomlinson Road
Philadelphia, PA 19116-3850
About Tri-State Paper
Tri-State Paper is a merchant wholesaler of paper and paper
products.
Tri-State Paper, Inc. filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. E.D. PA Case No.
23-13237) on Oct. 27, 2023. The petition was signed by John
Petaccio as president. At the time of filing, the Debtor estimated
$1 million to $10 million in both assets and liabilities.
Judge Patricia M. Mayer presides over the case.
Michael A. Cibik, Esq. at CIBIK LAW, P.C. represents the Debtor as
counsel.
TRI-STATE PAPER: Seeks to Hire Cibik Law as Bankruptcy Counsel
--------------------------------------------------------------
Tri-State Paper, Inc. seeks approval from the U.S. Bankruptcy Court
for the Eastern District of Pennsylvania to employ Cibik Law, P.C.
to serve as its counsel.
The Debtor requires legal counsel to:
(a) give advice regarding the rights and obligations of the
Debtor under the Bankruptcy Code;
(b) assist the Debtor in the preparation of schedules and
other required pleadings;
(c) represent the Debtor at the meeting of creditors and other
examinations;
(d) prepare all necessary legal papers; and
(e) assist the Debtor in the formulation and prosecution of
confirmation of a reorganization plan.
The hourly rates of the firm's counsel and staff are as follows:
Partner Attorneys $550
Associate Attorneys $350
Paralegals $125
Michael Cibik, Esq., a principal at Cibik Law, disclosed in a court
filing that the firm is a "disinterested person" pursuant to
Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Michael A. Cibik, Esq.
CIBIK LAW, PC
1500 Walnut Street Suite 900
Philadelphia, PA 19102
Telephone: (215) 735-1060
Email: mail@cibiklaw.com
About Tri-State Paper
Tri-State Paper is a merchant wholesaler of paper and paper
products.
Tri-State Paper, Inc. filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. E.D. PA Case No.
23-13237) on Oct. 27, 2023. The petition was signed by John
Petaccio as president. At the time of filing, the Debtor estimated
$1 million to $10 million in both assets and liabilities.
Judge Patricia M. Mayer presides over the case.
Michael A. Cibik, Esq. at CIBIK LAW, P.C. represents the Debtor as
counsel.
TURNING POINT: Moody's Alters Outlook on 'B2' CFR to Positive
-------------------------------------------------------------
Moody's Investors Service affirmed the ratings of Turning Point
Brands, Inc. including its B2 Corporate Family Rating and B2-PD
Probability of Default Rating. Moody's also downgraded the rating
of Turning Point's senior secured notes due 2026 to B1 from Ba3 and
downgraded the speculative grade liquidity ("SGL") rating to SGL-2
from SGL-1. The rating outlook was changed to positive from stable.
Moody's affirmed Turning Point's B2 CFR and changed the outlook to
positive from stable to reflect the company's focus on repaying
debt and reducing leverage. Moody's also views Turning Point's
shift in strategic focus under CEO Graham Purdy away from
acquisition-focused growth and towards operational execution and
expanding the consumer reach of Turning Point's products and
distribution platforms will deliver more stable earnings and free
cash flow. Management plans to operate the business with lower
leverage after repaying its convertible unsecured notes that mature
July 2024. Management indicated it intends to operate towards the
lower-end of its gross debt-to-EBITDA 2.5x-3.5x target (based on
company calculation; 3.9x for the 12 months ended September 30,
2023). Moody's anticipates that Turning Point will repay the
remaining $118.5 million of convertible notes with $96.1 million of
cash on hand, free cash flow and potentially a modest revolver
draw, resulting in Moody's adjusted gross debt-to-EBITDA leverage
declining below 3.0x by year-end 2024 from an estimated 4.1x as of
September 30, 2023.
Expansion of the Zig-Zag portfolio into alternative distribution
channels such as dispensaries and head shops, increasing
consumption of cannabis in US markets, relatively steady demand for
Stoker's value oriented smokeless tobacco products, and the scaling
of new distribution agreements and approved products will promote
improvement to the EBITDA margin despite challenging economic
conditions. Further, Turning Point's restructuring of its Creative
Distribution Solutions ("CDS") distribution business has stabilized
profitability albeit at a low margin.
Nevertheless, consumers economizing spending and retailer
destocking is likely to continue to pressure sales across
traditional channels. Stokers has benefited from consumers trading
down to its value offering but the broader chewing and moist snuff
tobacco categories face long-term secular declines as consumers
continue to reduce tobacco usage. Pricing actions and scaling of
Turning Point's tobacco-free smokeless nicotine product will help
to partially offset this decline. The company in recent years has
turned to debt funded acquisitions and share repurchases to grow
and drive equity valuations but the company is shifting toward a
greater focus on operating execution of existing assets and
reducing debt.
Moody's downgraded the speculative grade liquidity rating to SGL-2
from SGL-1 accounting for the material debt maturity that is now
current. Turning Point's SLG-2 rating denotes good liquidity.
Moody's believes that $96.1 million of cash on hand, and free cash
flow of around $35 to $45 million after dividends (Moody's
estimates), and unused borrowing capacity on its new $75 million
Asset Backed Lending facility will be sufficient to address
seasonal working capital needs, reinvestment into business
objectives and repayment of the company's remaining $118.5 million
of convertible notes due July 2024. Moody's anticipates that
Turning Point will subsequently repay any revolver borrowings used
to retire the convertible notes. Turning Point entered a new
unrated $75 million asset backed lending facility on November 7,
2023 increasing its access to revolver borrowing meaningfully from
its previous $25 million cash revolver. The ABL expires in November
2027 and is subject to a minimum 1.0x fixed charge covenant ratio
(FCCR), which is triggered when excess availability falls below the
greater of 12.5% or $9.375 million. Moody's expects the company to
maintain good cushion within the FCCR but does not expect the
covenant will be tested.
The downgrade of the senior secured notes to B1 from Ba3 reflects
the introduction of the new ABL that has a priority claim on
inventory as well as the decline in the amount of the unsecured
convertible notes due to continued repayments. These capital
structure shifts increase the expected loss on the secured notes in
the event of a default.
RATINGS RATIONALE
Turning Point's B2 CFR reflects the company's moderate to high
financial leverage, relatively small size, and growth challenges
related to tobacco product categories that are facing declining
volumes. The company has also historically faced material execution
risk associated with pursuing an acquisition-focused growth
strategy particularly into new-generation products. Turning Point
competes against significantly larger, better resourced, and
well-known branded tobacco manufacturers, as well as a variety of
smaller companies focused on niche market segments. Regulatory
risks are high given the regulated nature of its products and focus
by the The Food and Drug Administration (FDA) on the e-vapor and
non-tobacco nicotine categories. Turning Point's credit profile
benefits from good market share and position in niche tobacco
categories, positive free cash flow generation, and minimal capital
spending requirements in its asset-light model where most
production is outsourced aside from moist snuff. The company's good
liquidity provides flexibility to execute its operational
improvement strategies over the next year. Moody's believes that
balance sheet cash of $96.1 million, an anticipated $35-$45 million
in annual free cash flow and unused revolver capacity is sufficient
to repay the remaining $118.5 million convertible senior notes that
come due on July 15, 2024. The company replaced its existing $25
million cash revolver with an upsized $75 million ABL on November
7, 2023. Following the appointment of Graham Purdy to CEO in
October 2022, the company's strategy has moved away from M&A and
towards improving operational execution and expanding the consumer
reach of Turning Point's products and distribution platforms. The
change is at least partly in response to the challenging
macroeconomic environment. The shift in emphasis is a credit
positive but a track record of conservatism around M&A and a
prioritization of debt repayment and financial flexibility over
shareholder distributions is necessary to ensure the focus is
sustained.
Moody's expects debt-to-EBITDA (incorporating Moody's adjustments)
will decline to below 3.0x over the next 12-18 months from an
estimated 4.1x as of September 2023 largely due to the repayment of
its convertible senior notes. Stoker's less cyclical and value
oriented moist snuff products are benefiting from consumers trading
down and should fare well during periods of economic weakness. The
scaling of new distribution agreements and approved products,
expansion of Zig-Zag products into alternative channels and
diversification into cannabis is helping to stabilize earnings.
Restructuring in the vape and synthetic tobacco distribution
business is also supporting more consistent performance though at a
very low EBITDA margin. Still, macro pressures on consumer spending
in traditional channels present earnings risk over the next year.
While share repurchases were aggressive over the last couple of
years, Moody's expects the company to refrain from share buybacks
aside from offsetting dilution related to stock compensation over
the next year. The company is focused on maintaining liquidity
while earnings are under pressure, and to help address the 2024
note maturity and reduced leverage to the lower end of its gross
debt-to-EBITDA 2.5x-3.5x target (based on company calculation; 3.9x
for the 12 months ended September 30, 2023).
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The positive outlook captures Moody's expectation that
debt-to-EBITDA leverage will improve over the next 12 months to
below 3.0x after Turning Point repays its convertible notes. The
positive outlook also reflects an expectation that management will
operate with a more conservative financial policy including
refraining for acquisitions and maintaining leverage at the lower
end of its gross debt-to-EBITDA target of 2.5x – 3.5x. The
outlook also reflects Moody's expectations that Turning Point
Brands will sustain a solid EBITDA margin and good liquidity
including annual free cash flow of at least $35 million. Moody's
expects Turning Point will continue to moderate share repurchases
as needed to maintain liquidity and address 2024 maturities without
meaningfully impairing financial flexibility.
Moody's may upgrade the ratings if Turning Point is able to
increase scale, reduce debt-to-EBITDA below 3.0x and maintain
growth across its businesses with a stable to higher EBITDA margin.
An upgrade would also require very good liquidity, consistent solid
free cash flow generation and maintenance of a more conservative
financial strategy.
Moody's may downgrade the ratings if operating performance
deteriorates, liquidity weakens for any reason, product
distribution is reduced or halted due to regulatory actions.
Moody's may also downgrade the ratings if the company pursues
debt-financed acquisitions or shareholder distributions, or debt-
to-EBITDA is maintained above 5.0x.
ENVIRONMENTAL SOCIAL AND GOVERNANCE CONSIDERATIONS
Turning Point's CIS-5 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 a CIS-4.
The score primarily reflects the company's very high exposure to
social risks related to customer relations and demographic and
societal pressures exemplified by the high regulatory restrictions
on sales and marketing of nicotine products and general risks from
consumers shifting away from nicotine and tobacco given the overall
consumer trends towards health and wellness. Regulatory frameworks
are likely to continue to evolve to promote a steady reduction in
nicotine usage although smokeless nicotine products are likely to
have longer staying power than their inhalant forms. The score also
reflects environmental risks stemming from use of water and
governance risks driven by an aggressive financial policy given the
company's operating profile. The company's redesignation of the
subsidiary housing CDS as an unrestricted subsidiary also evidences
governance risk because it unfavorably moves CDS' asset value away
from creditors.
The principal methodology used in these ratings was Consumer
Packaged Goods published in June 2022.
Turning Point Brands, Inc. manufactures and sells smokeless tobacco
products, smoking products, and new-generation (NewGen) products.
The company's three focus segments are led by Zig-Zag, Stoker's and
Creative Distribution Solutions. Smokeless products include loose
leaf chewing tobacco, moist snuff, moist snuff pouches, and snus.
Smoking products consist of cigarette papers, large cigars,
make-your-own (MYO) cigar wraps, MYO cigar smoking tobacco, MYO
cigarette smoking tobacco and traditional pipe tobacco. Creative
Distribution Solutions is mainly a distribution business for items
such as liquid vapor products, tobacco vaporizer products, a range
of non-tobacco products, and other non-nicotine products. Annual
revenues for the publicly-traded company are approximately $412
million for the last twelve-month period ending June 2023.
U STREET: Seeks to Hire Gabriel Liberman as Bankruptcy Counsel
--------------------------------------------------------------
U Street, LLC seeks approval from the U.S. Bankruptcy Court for the
Eastern District of California to employ the Law Offices of Gabriel
Liberman, APC to handle its Chapter 11 case.
The firm received $26,738 for pre-bankruptcy services rendered in
connection with its restructuring, including the filing fee and
pre-bankruptcy costs and fees.
The hourly rates of the firm's counsel and staff are as follows:
Gabriel E. Liberman $350
Paraprofessionals $150
In addition, the firm will seek reimbursement for expenses
incurred.
Gabriel Liberman, Esq., an attorney at the Law Offices of Gabriel
Liberman, disclosed in a court filing that his firm is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
The firm can be reached through:
Gabriel E. Liberman, Esq.
Law Offices of Gabriel Liberman, APC
1545 River Park Drive, Suite 530
Sacramento, CA 95815
Telephone: (916) 485-1111
Facsimile: (916) 485-1111
Email: Gabe@4851111.com
About U Street LLC
U Street, LLC filed Chapter 11 petition (Bankr. E.D. Cal. Case No.
23-23504) on Oct. 4, 2023. In the petition signed by Allen W.
Warren, managing member, the Debtor disclosed $2,524,784 in total
assets and $1,640,000 in total liabilities.
Judge Christopher D. Jaime oversees the case.
The Law Offices of Gabriel Liberman, APC represents the Debtor as
legal counsel.
UPHEALTH HOLDINGS: Seeks Bonuses Retention in Chapter 11
--------------------------------------------------------
Clara Geoghegan of Law360 reports that bankrupt telehealth company
UpHealth has asked a Delaware bankruptcy court to allow $1.3
million in retention payments for employees of its health care
management software subsidiary Thrasys to keep its products running
amid asset sale talks.
A hearing on the Debtor's Motion to implement a Key Employee
Retention Plan is slated for Nov. 17, 2023, at 10:00 AM at US
Bankruptcy Court, 824 Market St., 6th Fl., Courtroom #2,
Wilmington, Delaware. Objections are due by Nov. 10, 2023.
About UpHealth Holdings
UpHealth Holdings Inc. is a global digital health company
delivering technology platforms, infrastructure and services to
modernize care delivery and health management.
UpHealth Holdings Inc. sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Del. Case No. 23-11476) on Sept. 19,
2023. In the petition filed by Samuel J. Meckey, as chief
executive officer, the Debtor reports estimated assets and
liabilities between $100 million and $500 million each.
Stuart M. Brown, Esq., at DLA PIPER LLP (US), is the Debtor's
counsel.
USEFUL TAXI: Seeks to Hire Thomas Farinella as Bankruptcy Counsel
-----------------------------------------------------------------
Useful Taxi, LLC seeks approval from the U.S. Bankruptcy Court for
the Eastern District of New York to hire the Law Office of Thomas
A. Farinella, P.C. as its attorney.
The firm will render these services:
(a) assist the Debtor in administering this case;
(b) make such motions or take such action as may be
appropriate or necessary under the Bankruptcy Code;
(c) represent the Debtor in prosecuting adversary proceedings
to collect assets of the estate and such other actions as it deems
appropriate;
(d) take such steps as may be necessary for the Debtor to
marshal and protect the estate's assets;
(e) negotiate with the Debtor's creditors in formulating a
plan of reorganization for it in this case.
(f) draft and prosecute the confirmation of the Debtor's plan
of reorganization in this case; and
(g) render such additional services as the Debtor may require
in this case.
The hourly rates of the firm's counsel and staff are as follows:
Attorneys $500
Clerks and Paraprofessionals $200
The firm received an initial retainer of $8,500 plus the filing fee
of $1,738.
Thomas Farinella, Esq., a member of the Law Office of Thomas A.
Farinella, disclosed in a court filing that the firm is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
The firm can be reached through:
Thomas A. Farinella, Esq.
LAW OFFICE OF THOMAS A. FARINELLA, PC
260 Madison Avenue, 8th Floor
New York, NY 10016
Telephone: (917) 319-8579
Email: tf@lawtaf.com
About Useful Taxi, LLC
Useful Taxi, LLC sought protection for relief under Chapter 11 of
the Bankruptcy Code (Bankr. E.D.N.Y. Case No. 23-40110) on Jan. 13,
2023. At the time of filing, the Debtor estimated $100,001 to
$500,000 in assets and $500,001 to $1 million in liabilities.
Judge Nancy Hershey Lord presides over the case.
Thomas A Farinella, Esq. at the Law Offices Of Thomas A. Farinella,
PC represents the Debtor as counsel.
VESTTOO LTD: Committee Taps Alvarez & Marsal as Financial Advisor
-----------------------------------------------------------------
The official committee of unsecured creditors appointed in the
Chapter 11 cases of Vesttoo Ltd. and affiliates seeks approval from
the U.S. Bankruptcy Court for the District of Delaware to employ
Alvarez & Marsal North America, LLC.
The committee requires a financial advisor to:
(a) assist in the assessment and monitoring of cash flow
budgets, liquidity and operating results;
(b) assist in the review of court disclosures;
(c) assist in the review of the Debtors' cost/benefit
evaluations with respect to the assumption or rejection of
executory contracts and/or unexpired leases;
(d) assist in the analysis of any assets and liabilities and
any proposed transactions for which court approval is sought;
(e) assist in the review of the Debtors' proposed key employee
retention plan and key employee incentive plan, if required;
(f) attend meetings with the Debtors, their lenders and
creditors, potential investors, the committee, and any other
official committees organized in these Chapter 11 cases, the U.S.
Trustee, other parties in interest, and professionals hired by the
same, as requested;
(g) assist in the review of any tax issues;
(h) assist in the investigation and pursuit of causes of
actions;
(i) assist in tracing and pursuing assets;
(j) assist in the review of the claims reconciliation and
estimation process;
(k) assist in the review of the Debtors' business plan;
(l) assist in the review of the sales or dispositions of the
Debtors' assets;
(m) assist in the valuation of the Debtors' intellectual
property, if required;
(n) assist in the review and/or preparation of information and
analysis necessary for the confirmation of a plan in these Chapter
11 cases; and
(o) render such other general business consulting or such
other assistance as the committee or its counsel may deem
necessary, consistent with the role of a financial advisor and not
duplicative of services provided by other professionals in these
Chapter 11 cases.
The hourly rates of the firm's professionals are as follows:
Managing Directors $1,025 - $1,375
Directors $775 - $975
Associates $575 - $775
Analysts $425 - $550
In addition, the firm will seek reimbursement for expenses
incurred.
Richard Newman, Esq., a managing director at Alvarez & Marsal North
America, disclosed in a court filing that his firm is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
The firm can be reached through:
Richard Newman, Esq.
Alvarez & Marsal North America, LLC
540 West Madison Street, Suite 1800
Chicago, IL 60661
Telephone: (312) 601-4220
Facsimile: (312) 332-4599
Email: rnewman@alvarezandmarsal.com
About Vesttoo Ltd.
Vesttoo Ltd. is a technology-driven collateralized reinsurance
provider in Tel Aviv, Israel. It connects the insurance industry
with the capital markets by combining AI-powered technology with
expertise in data science, insurance and finance.
Vesttoo and its affiliates sought relief under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. D. Del. (Lead Case No. 23-11160) on
August 14 and 15, 2023.
The Honorable Bankruptcy Judge Mary F. Walrath oversees the case.
The Debtors tapped DLA Piper, LLP (US) as legal counsel and Kroll,
LLC as financial advisor. Epiq Corporate Restructuring, LLC is the
claims and administrative agent.
The U.S. Trustee for Region 3 appointed an official committee to
represent unsecured creditors in the Debtor's Chapter 11 case. The
committee tapped Greenberg Traurig, LLP as legal counsel and
Alvarez & Marsal North America, LLC as financial advisor.
WATER GREMLIN: U.S. Trustee Appoints Creditors' Committee
---------------------------------------------------------
The U.S. Trustee for Region 3 appointed an official committee to
represent unsecured creditors in the Chapter 11 cases of Water
Gremlin Company and its affiliates.
The committee members are:
1. Gopher Resource, LLC
Attn: Livingston Haskell
2900 Lone Oak Parkway, Suite 140A
Eagen, MN 55121
Email: livingston.haskell@gopherresource.com
Phone: 804-339-9966
2. Dana Erickson, Individually and as Trustee
for the Next-of-Kin Leilani Lee Erickson, Deceased
c/o Dean M. Salita, Esq.
Schmidt & Salita Law Team
13911 Ridgedale Drive, Suite 325
Minnetonka, MN 55305
Email: dsalita@mnlawteam.com
Phone: 952-473-4530
3. Page O. Stevens
c/o Dean M. Salita, Esq.
Schmidt & Salita Law Team
13911 Ridgedale Drive, Suite 325
Minnetonka, MN 55305
Email: dsalita@mnlawteam.com
Phone: 952-473-4530
4. Tori M. Stebbing
c/o Dean M. Salita, Esq.
Schmidt & Salita Law Team
13911 Ridgedale Drive, Suite 325
Minnetonka, MN 55305
Email: dsalita@mnlawteam.com
Phone: 952-473-4530
5. Emily L. Swoboda
c/o Dean M. Salita, Esq.
Schmidt & Salita Law Team
13911 Ridgedale Drive, Suite 325
Minnetonka, MN 55305
Email: dsalita@mnlawteam.com
Phone: 952-473-4530
6. Steven R. Kappes
c/o Dean M. Salita, Esq.
Schmidt & Salita Law Team
13911 Ridgedale Drive, Suite 325
Minnetonka, MN 55305
Email: dsalita@mnlawteam.com
Phone: 952-473-4530
7. David F. Strong, Individually and as Trustee
for the Next-of-Kin Louise J. Bestow, Deceased
c/o Dean M. Salita, Esq.
Schmidt & Salita Law Team
13911 Ridgedale Drive, Suite 325
Minnetonka, MN 55305
Email: dsalita@mnlawteam.com
Phone: 952-473-4530
Official creditors' committees serve as fiduciaries to the general
population of creditors they represent. They may investigate the
debtor's business and financial affairs. Committees have the right
to employ legal counsel, accountants and financial advisors at a
debtor's expense.
About Water Gremlin
Water Gremlin Company is the world's technological and market
leader in battery terminals. It was founded in 1949 as a
manufacturer of recreational fishing products. In 1970, the
company expanded to battery terminal production. Water Gremlin uses
custom engineering, design, and automation to deliver consistent
quality solutions for industries like automotive, agriculture,
commercial trucking, marine, telecommunications, recreation, and
military and government operations.
Water Gremlin and its affiliates filed Chapter 11 petitions (Bankr.
D. Del. Lead Case No. 23-11775) on Oct. 27, 2023. At the time of
the filing, Water Gremlin reported $10 million to $50 million in
both assets and liabilities.
Judge Laurie Selber Silverstein oversees the cases.
The Debtors tapped Alessandra Glorioso, Esq., at Dorsey & Whitney
(Delaware) LLP as bankruptcy counsel; Intrepid Investment Bankers,
LLC as investment banker; Riveron RTS, LLC as financial advisor.
Kekst CNC and Padilla provide public relations services to the
Debtors.
WEBSTER UNIVERSITY: Moody's Lowers Issuer & Debt Ratings to Ba3
---------------------------------------------------------------
Moody's Investors Service has downgraded Webster University's (MO)
issuer and debt ratings to Ba3 from Ba1. The outlook remains
negative. The university had total outstanding debt of
approximately $125 million at fiscal end 2023.
RATINGS RATIONALE
The downgrade of Webster University's issuer rating to Ba3 was
largely driven by further erosion in the university's financial
position driven by a continuation of deeply imbalanced operations.
The increased capital spending combined with the fourth consecutive
year of double-digit operating deficits resulted in the further
depletion to the university's already very thin liquidity in fiscal
2023. While significant enrollment gains will drive a sizable
increase in revenue growth, the university will again generate an
operating deficit in fiscal 2024, leading to further spend down of
liquid reserves. Along with the use of reserves, the university has
collateral posting requirements on its outstanding lines of credit,
leaving essentially no available liquidity under Moody's
calculation. Aside from the budget pressures, the university has
elevated debt relative to both wealth and scale, and elevated debt
structure risks that introduce additional credit risk. Both
demographic and societal trend risks, as well as financial strategy
considerations were drivers of the rating action, reflected in the
ESG credit impact score of 5.
Webster University's Ba3 issuer rating incorporates its good scale
and wealth. The university continues to implement a multifaceted
strategy to improve student demand following a period of steep and
sustained enrollment declines through fall 2021. These measures
contributed to significant enrollment gains in both fall 2022 and
fall 2023, translating to a substantial forecasted increase in net
tuition revenue in fiscal 2024. Sustaining strong net tuition
revenue growth beyond the current fiscal year is critical to
stabilizing operating results and liquidity. The university will
rely on additional revenue growth to meet its articulated goal of
restoring positive cash flow by fiscal 2025, though achieving this
will prove difficult absent further expense reductions.
The university's Ba3 revenue bond rating is based on the issuer
rating and the general obligation characteristics of the debt.
RATING OUTLOOK
The negative outlook continues to reflect the downside risks of the
university's deep operating deficits and diminishing financial
reserve balance.
FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATINGS
-- Significant and sustained improvement in operating performance
driven by a restoration in net tuition revenue growth and the
implementation of material expense reductions
-- Marked growth in wealth and liquidity, providing materially
stronger coverage of debt and expenses
FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATINGS
-- Inability to restore positive operating cash flow in fiscal
2025 and make steady progress towards achieving fiscal balance on a
GAAP basis thereafter
-- Failure to stabilize liquidity balances (cash and cash
equivalents plus quasi-endowment funds) beginning in fiscal 2025
LEGAL SECURITY
Rated bonds are unconditional obligations of the university with a
lien on general revenue.
PROFILE
Originally founded in 1915, Webster is a private university with
its main residential campus just outside of St. Louis, multiple
metropolitan and military base campuses scattered through the
United States, as well as international locations across nine
countries and three continents (Europe, Asia and Africa). Webster
offers a diverse mix of undergraduate, graduate, and certificate
programs and has extensive online programming. It enrolled about
10,000 full-time equivalent students in fall 2023 and generated
$125 million in operating revenue in fiscal 2022.
METHODOLOGY
The principal methodology used in these ratings was Higher
Education Methodology published in August 2021.
WEWORK INC: Intends to Terminate Leases of At Least 69 Properties
-----------------------------------------------------------------
John Gittelsohn and Immanual John Milton of Bloomberg News report
that WeWork Inc.'s plan to terminate leases on at least 69
properties will add to the mortgage bonds affected by the coworking
company shuttering locations, raising that total to $2.5 billion.
And much more debt is potentially at risk.
WeWork, once valued at $47 billion, needs to slash costs and shore
up its finances as it tries to continue operating. Filing for
bankruptcy positions the company to break leases, exposing property
owners to more empty space at a time US office markets are already
reeling from rising vacancies and struggling to repay debt.
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 Inc. and its affiliates sought relief under Chapter 11 of
the Bankruptcy Code (Bankr. D.N.J. Case No. 23-19865) on Nov. 6,
2023. In its petition, WeWork Inc. reported $19 billion of
liabilities and $15 billion of assets.
The Debtors are represented by Kirkland & Ellis LLP (Edward
Sassower, Joshua Sussberg, Steven Serrejeddini, Ciara Foster,
Oliver Pare, Josh Greenblatt, Jimmy Ryan, Connor Casas, William
Arnault) and Cole Schotz PC (Michael Sirota, Warren Usatine, Felice
Yudkin, Ryan Jareck) as legal counsel, Alvarez & Marsal North
America LLC (Justin Schmaltz) as financial advisor, and PJT
Partners LP (Paul Sheaffer) as investment banker.
Softbank is represented by Weil Gotshal & Manges LLP (Gary Holtzer,
Gabriel Morgan, Kevin Bostel, Eric Einhorn) and Wollmuth Maher &
Deutsch LLP (Paul DeFilippo, James Lawlor, Steven Fitzgerald,
Joseph Pacelli) as legal counsel and Houlihan Lokey Capital as
financial advisor.
The Ad Hoc Group of First Lien and Second Lien Lenders is
represented by Davis Polk & Wardwell LLP (Eli Vonnegut, Elliot
Moskowitz, Natasha Tsiouris, Jonah Peppiatt) and Greenberg Traurig
LLP (Alan Brody) as legal counsel and Ducera Partners LLC as
financial advisor.
WEWORK INC: Nov. 13 Deadline for Panel Questionnaires
-----------------------------------------------------
The United States Trustee is soliciting members for committee of
unsecured creditors in the bankruptcy cases of WeWork Inc., et al.
If a party wishes to be considered for membership on any official
committee that is appointed, it must complete a questionnaire
available at https://tinyurl.com/4unspw35 and return by email it to
Tina.L.Oppelt@usdoj.gov - at the Office of the United States
Trustee so that it is received no later than 12:00 p.m., Nov. 13,
2023.
If the U.S. Trustee receives sufficient creditor interest in the
solicitation, it may schedule a meeting or telephone conference for
the purpose of forming a committee.
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 Inc. and its affiliates sought relief under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. D.N.J. Case No. 23-19865) on
November 6, 2023. In its petition, WeWork Inc. reported $19
billion of liabilities and $15 billion of assets.
The Hon. Judge John K. Sherwood oversees the cases.
The Debtors are represented by Kirkland & Ellis LLP (Edward
Sassower, Joshua Sussberg, Steven Serrejeddini, Ciara Foster,
Oliver Pare, Josh Greenblatt, Jimmy Ryan, Connor Casas, William
Arnault) and Cole Schotz PC (Michael Sirota, Warren Usatine, Felice
Yudkin, Ryan Jareck) as legal counsel; Alvarez & Marsal North
America LLC (Justin Schmaltz) as financial advisor; and PJT
Partners LP (Paul Sheaffer) as investment banker.
The Debtors tapped Epiq Corporate Restructuring, LLC as claims and
noticing agent; Deloitte Tax LLP as tax advisor. Munger, Tolles &
Olson LLP is the Debtors' legal counsel and Province LLC also acts
as financial advisor.
Softbank is represented by Weil Gotshal & Manges LLP (Gary Holtzer,
Gabriel Morgan, Kevin Bostel, Eric Einhorn) and Wollmuth Maher &
Deutsch LLP (Paul DeFilippo, James Lawlor, Steven Fitzgerald,
Joseph Pacelli) as legal counsel and Houlihan Lokey Capital as
financial advisor.
The Ad Hoc Group of First Lien and Second Lien Lenders is
represented by Davis Polk & Wardwell LLP (Eli Vonnegut, Elliot
Moskowitz, Natasha Tsiouris, Jonah Peppiatt) and Greenberg Traurig
LLP (Alan Brody) as legal counsel and Ducera Partners LLC as
financial advisor.
WH INTERMEDIATE: Moody's Affirms 'B2' CFR, Outlook Remains Stable
-----------------------------------------------------------------
Moody's Investors Service affirmed WH Intermediate, LLC's ("WH
Intermediate") ratings, including its B2 corporate family rating,
B2-PD probability of default rating, and B2 ratings on the senior
secured first lien credit facilities issued by WH's subsidiary, WH
Borrower, LLC ("WH Borrower", together "WHP"). The outlooks remain
stable.
The affirmation of the B2 CFR reflects governance considerations,
including majority private equity ownership and an acquisitive
growth strategy that will likely lead to the company maintaining
high financial leverage. The pending acquisition of a majority
interest in European denim fashion brand G-Star Raw ("G-Star")
comes on the heels of the January 25, 2023 Express transaction.
Moody's expects the acquisition will likely lead to increased debt
and leverage as WHP has previously relied on debt to finance
acquisitions; although, residual parent company cash remains
available to help fund investments. The affirmation reflects that
pro-forma leverage following the acquisition will remain well
within tolerance levels for the B2 rating. The affirmation also
reflects the strategic benefits of the proposed acquisition, such
as increased brand diversity through the addition of a European
apparel brand and opportunities for expansion in the US.
RATINGS RATIONALE
WHP's B2 CFR considers governance considerations including high pro
forma leverage, majority private equity ownership, and
debt-financed acquisitive growth strategy. Moody's adjusted
debt/EBITDA will likely remain at over 5 times over the next twelve
to eighteen months. Also, while many of its brands have a long
operating history, the rating reflects WHP's relatively short track
record having been founded in 2019, as well as integration risks
associated with having completed several material acquisitions in
the past few years and, despite expansion, meaningful brand and
licensee concentrations as a percentage of pro forma revenue. The
rating is supported by the relatively stable and predictable
revenue and cash flow streams derived from royalty payments
received from licensees, which include significant guaranteed
minimum amounts, with upside from license overage receipts being
accretive to earnings and cash flow as it leverages the existing
cost base. Further, the licensor business model is asset light with
low capital costs, which typically supports robust operating
margins and positive free cash flow. Moody's expects WHP to
maintain good liquidity over the next 12 months, supported by
balance sheet cash, modest positive free cash flow and ample
revolver availability.
The stable outlook reflects Moody's expectation for consistent
operating performance over the next 12-18 months, as the company
integrates recent sizable acquisitions and onboards new license
contracts while maintaining high margins, modest positive free cash
flow and debt/EBITDA around 5 times on average.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be downgraded if the company experiences weaker
than anticipated operating performance resulting from challenges in
integrating acquired brands, the non-renewal of licenses, or
renewals of its licenses at materially lower revenue streams.
Ratings could also be downgraded should WHP's financial policies
become more aggressive or liquidity materially declines such as an
inability to generate solid positive free cash flow after
dividends. Specific metrics include debt-to-EBITDA sustained above
6 times or EBITA-to-interest sustained below 2.0 times.
A ratings upgrade is unlikely over the near-to-intermediate term
given the company's short track record, small scale, and Moody's
expectation that cash flow will likely support acquisition
activity. Over time, ratings could be upgraded if the company
maintains its operating performance and more conservative financial
policies through a demonstrated willingness to sustain
debt-to-EBITDA below 4.5 times and EBITA-to-interest expense above
3 times.
Headquartered in New York, NY, WHP Global is a brand management
company with a portfolio of brands that include Anne Klein, Joseph
Abboud, Joe's Jeans, Bonobos, Isaac Mizrahi, Lotto, Toys "R" Us,
Babies "R" Us, and a 60% interest in the EXPRESS(R) brand, among
others. The company is majority owned by private equity firms and
other co-investors; although no one firm has majority control.
Funds managed by Oaktree Capital Management, L.P. and Ares
Management Corporation are the largest shareholders, with the
remaining equity owned by management and others. WH Borrower, LLC
is the borrowing entity in the credit group, and WH Intermediate,
LLC is its direct parent, guarantor and financial reporting entity.
WHP Global is privately owned and does not publicly disclose its
financial information. Pro forma annual revenue exceeds $230
million.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
WHOLE COFFEE: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: The Whole Coffee Company
1130 NW 159th Drive
Miami, FL 33169
Business Description: The Debtor is a coffee wholesaler in Miami,
Florida.
Chapter 11 Petition Date: November 9, 2023
Court: United States Bankruptcy Court
Southern District of Florida
Case No.: 23-19263
Debtor's Counsel: Jacqueline Calderin, Esq.
AGENTIS PLLC
45 Almeria Avenue
Coral Gables, FL 33134
Tel: 305-722-2002
Email: jc@agentislaw.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Michelle Armbrustmacher as CEO.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 20 largest unsecured creditors is available
for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/PNO4KVY/The_Whole_Coffee_Company__flsbke-23-19263__0001.0.pdf?mcid=tGE4TAMA
YI GROUP: S&P Downgrades ICR to 'CCC' on Near-Term Debt Maturities
------------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on dental
consumables manufacturer YI Group Holdings LLC to 'CCC' from 'B-'
based on a higher risk of default over the next 12 months. S&P also
lowered its issue-level rating on its first-lien debt to 'CCC' from
'B-'.
The negative outlook reflects the significant risk of a distressed
exchange or default within the next 12 months absent favorable
market conditions or an equity injection from its sponsor.
S&P said, "The downgrade reflects our view of heightened
refinancing risk given YI's near-term maturities in 2024.YI's
capital structure consists of a $50 million revolver due August
2024 ($5 million outstanding as of June 30, 2023), $390 million
outstanding out of its $407.5 million of first-lien term loans due
November 2024, and an $85 million second-lien term loan due 2025
(not rated). We do not expect the company will have sufficient
liquidity to repay the $390 million in aggregate of first-lien term
loans given its cash balance of under $7 million as of June 30,
2023, and projected free operating cash flow (FOCF) deficit this
year.
"While we expect YI to pursue refinancing before the maturity date,
it is highly uncertain if the company will succeed given its weak
financial metrics and challenging capital market conditions.
Therefore, absent a maturity extension or equity infusion from its
sponsor, YI may not meet its debt obligations over the next 12
months."
The negative outlook reflects the significant risk of a distressed
exchange or default within the next 12 months absent favorable
market conditions or an equity injection from its sponsor.
S&P could lower its rating on YI if we believe a default or
distressed exchange is likely within the next six months.
S&P could lower the rating by more than one notch if the company
initiates or voices its intention to execute a debt exchange or
other restructuring transaction that we view as distressed.
S&P could raise the rating if:
-- YI successfully refinances its near-term debt maturities in a
manner that S&P considers consistent with its original terms; and
-- The company's liquidity position improves, sufficiently
covering its fixed charges over the next 12 months.
S&P said, "Governance factors are a moderately negative
consideration in our credit rating analysis. Our highly leveraged
assessment of the company's financial risk profile reflects its
corporate decision-making that prioritizes the interests of its
controlling owners, in line with our view of the majority of rated
entities owned by private-equity sponsors. Our assessment also
reflects private-equity owners' generally finite holding periods
and focus on maximizing shareholder returns."
[^] BOOK REVIEW: Oil Business in Latin America: The Early Years
---------------------------------------------------------------
Author: John D. Wirth Ed.
Publisher: Beard Books
Softcover: 282 pages
List price: $34.95
Review by Gail Owens Hoelscher
Buy a copy for yourself and one for a colleague on-line at
http://is.gd/DvFouR
This book grew out of a 1981 meeting of the American Historical
Society. It highlights the origin and evolution of the state-owned
petroleum companies in Argentina, Mexico, Brazil, and Venezuela.
Argentina was the first country ever to nationalize its petroleum
industry, and soon it was the norm worldwide, with the notable
exception of the United States. John Wirth calls this phenomenon
"perhaps in our century the oldest and most celebrated of
confrontations between powerful private entities and the state."
The book consists of five case studies and a conclusion, as
follows:
* Jersey Standard and the Politics of Latin American Oil
Production, 1911-30 (Jonathan C. Brown)
* YPF: The Formative Years of Latin America's Pioneer State
Oil Company, 1922-39 (Carl E. Solberg)
* Setting the Brazilian Agenda, 1936-39 (John Wirth)
* Pemex: The Trajectory of National Oil Policy (Esperanza
Duran)
* The Politics of Energy in Venezuela (Edwin Lieuwen)
* The State Companies: A Public Policy Perspective (Alfred
H. Saulniers)
The authors assess the conditions at the time they were writing,
and relate them back to the critical formative years for each of
the companies under review. They also examine the four
interconnecting roles of a state-run oil industry and distinguish
them from those of a private company. First, is the entrepreneurial
role of control, management, and exploitation of a nation's oil
resources. Second, is production for the private industrial sector
at attractive prices. Third, is the integration of plans for
military, financial, and development programs into the overall
industrial policy planning process. Finally, in some countries is
the promotion of social development by subsidizing energy for
consumers and by promoting the government's ideas of social and
labor policy and labor relations.
The author's approach is "conceptual and policy oriented rather
than narrative," but they provide a fascinating look at the
politics and development of the region. Mr. Brown provides a
concise history of the early years of the Standard Oil group and
the effects of its 1911 dissolution on its Latin American
operations, as well as power struggles with competitors and
governments that eventually nationalized most of its activities.
Mr. Solberg covers the many years of internal conflict over oil
policy in Argentina and YPF's lack of monopoly control over all
sectors of the oil industry. Mr. Wirth describes the politics and
individuals behind the privatization of Brazil's oil industry
leading to the creation of Petrobras in 1953. Mr. Duran notes the
wrangling between provinces and central government in the evolution
of Pemex, and in other Latin American countries. Mr. Lieuwin
discusses the mixed blessing that oil has proven for Venezuela,
creating a lopsided economy dependent on the ups and downs of
international markets. Mr. Saunders concludes that many of the
then-current problems of the state oil companies were rooted in
their early and checkered histories." Indeed, he says, "the
problems of the past have endured not because the public petroleum
companies behaved like the public enterprises they are; they have
endured because governments, as public owners, have abdicated their
responsibilities to the companies."
John D. Wirth was Gildred Professor of Latin American Studies at
Stanford University. He died in June 2002 in Toronto.
*********
Monday's edition of the TCR delivers a list of indicative prices
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