/raid1/www/Hosts/bankrupt/TCR_Public/231113.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Monday, November 13, 2023, Vol. 27, No. 316
Headlines
13111 WESTHEIMER: Voluntary Chapter 11 Case Summary
1600 E BUTLER AVE: Case Summary & 11 Unsecured Creditors
40 & HOLDING: Court OKs Interim Cash Collateral Access
5200 SAMPLE: Court OKs Interim Cash Collateral Access
AAD LOCKER: Case Summary & 13 Unsecured Creditors
ABS NETWORK: Case Summary & 20 Largest Unsecured Creditors
ALPHA ENTERTAINMENT: McMahon Settles Fight With Ex-Chief Over Pay
ALROD LOGISTICS: Unsecureds Will Get 1% of Claims over 60 Months
AMERIFIRST FINANCIAL: Comm. Taps IslandDundon as Financial Advisor
AMMACORE INC: Court OKs Cash Collateral Access Thru Dec 1
AN GLOBAL: $22.7MM DIP Loan from Blue Torch Has Interim OK
ANAGRAM HOLDINGS: Gets Court Okay to Tap $10 Mil. of DIP Financing
ANN ARBOR SAND: Property Sale Proceeds to Fund Plan
ANTHOLOGY INC: Taps PJT Partners to Help on Rising Debt
APPLIED DNA: Signs Deal With Maxim to Sell $6.4M Common Shares
AQUABOUNTY TECHNOLOGIES: Posts $6.1 Million Net Loss in 3rd Quarter
ARCHBISHOP OF BALTIMORE: Wins Interim Cash Collateral Access
ARCHDIOCESE OF BALTIMORE: Victims Want Suit vs. Schools, Parishes
ASK FOR COOL: Linda Leali Named Subchapter V Trustee
B AND C BROTHERS: Further Fine-Tunes Plan Documents
BARRETTS MINERALS: Hires David Gordon of DJG Services as CRO
BARRETTS MINERALS: Seeks to Hire Jefferies as Investment Banker
BARRETTS MINERALS: Seeks to Hire M3 Advisory as Financial Advisor
BARRETTS MINERALS: Seeks to Hire Ordinary Course Professionals
BARRETTS MINERALS: Seeks to Hire Porter Hedges as Co-Counsel
BARRETTS MINERALS: Taps Latham & Watkins as Bankruptcy Co-Counsel
BASIC WATER: Court Approves Disclosures, Sale to Precision
BELA FLOR: Bid to Obtain DIP Loan Denied
BENITAGO INC: Committee Taps Dechert LLP as Bankruptcy Counsel
BENITAGO INC: Committee Taps Province LLC as Financial Advisor
BIOTRICITY INC: Issues $1 Million Unsecured Note to Investor
BITTREX INC: Gets Court Okay for Chapter 11 Plan
BLUEKEY CONSTRUCTION: Continued Operation to Fund Plan
CANO HEALTH: Plans to Ask Lenders to Wave Going-Concern Provision
CELSIUS NETWORK: Gets Court Clearance to Exit Bankruptcy
CLOUD VENTURES: Extends Plan Approval Deadline to Dec. 28
CNA EQUITY: Court OKs Cash Collateral Access Thru Jan 2024
COX OPERATING: Allows Creditors to Submit Bankruptcy Plan Proposals
CURO GROUP: Closes Two Non-Recourse Facilities and Flexiti Escrow
CWT TRAVEL: S&P Downgrades ICR to 'SD' on Debt to Equity Exchange
DENN-OHIO LLC: Denny's Franchisee Files for Chapter 11
DIAMOND SPORTS: Considers MLB Contract Demand Premature
DIEBOLD NIXDORF: Moody's Assigns 'Caa1' CFR, Outlook Positive
DIEBOLD NIXDORF: S&P Assigns 'B' ICR Post-Chapter 11 Emergence
DIOCESE OF CAMDEN: Insurers Slam New Chapter 11 Plan
DIRECT TEXTILE: Areya Holder Aurzada Named Subchapter V Trustee
DLOUX PROPERTIES: Files Amended Plan; Confirmation Hearing Dec. 13
EDGEWOOD FOOD MART: Case Summary & 20 Largest Unsecured Creditors
EMINENCE CORPORATION: Case Summary & Five Unsecured Creditors
ENVIVA PARTNERS: Bonds Dip Amid Steep Losses, Going-Concern Warning
ESCHER GROUP: Court OKs Cash Collateral Access Thru Jan 2024
EVERYTHING BLOCKCHAIN: Closes Sale of Mercury Inc. for $216,583
FIRSTENERGY CORP: Moody's Puts 'Ba1' CFR Under Review for Upgrade
FREIGHT MASTER: Robert Handler Named Subchapter V Trustee
GEMINI HDPE: S&P Affirms 'BB' Debt Rating, Alters Outlook to Neg.
GIGA-TRONICS INC: Issues $1 Million New Note to Ault Lending
GLOBAL PROCESSING: Selling Kanawha Facility for $2.9MM
GRIES & ASSOCIATES: Court OKs Interim Cash Collateral Access
GUR MEAT: Gets Extension to File Plan & Disclosures Until Dec. 1
HA STEWART: Court OKs Cash Collateral Access on Final Basis
HALF LION BREWING: Case Summary & 14 Unsecured Creditors
HALF LION: Case Summary & 14 Unsecured Creditors
HAWKEYE ENTERTAINMENT: Has Deal on Cash Collateral Access
HEYWOOD HEALTHCARE: Hires Flick Law Group as Conflicts Counsel
HEYWOOD HEALTHCARE: Hires Huron as Restructuring Support Advisor
HIGH VALLEY INVESTMENTS: Court OKs $3.5MM DIP Loan from DJL
IAFFORD NY: Jolene Wee of JW Infinity Named Subchapter V Trustee
IMEDIA BRANDS: Unsecureds to Recover Up to 2% in Liquidating Plan
INSPIREMD INC: Incurs $5.2 Million Net Loss in Third Quarter
INSULATED WALL: Court OKs Cash Access, DIP Loan from XYiP
INSULET CORP: S&P Raises ICR to 'B+', Outlook Stable
IYS VENTURES: Court OKs Cash Collateral Access Thru Dec 16
JAG CONTRACTORS: Seeks Cash Collateral Access
JAM PIZZA: May Use Cash Collateral Thru Nov 30
JAMES PINE: Seeks to Tap Kasen & Kasen as Bankruptcy Counsel
JETBLUE AIRWAYS: Moody's Cuts CFR to B1 & Sr. Secured Debt to Ba2
KINGDOM CONCEPTS: Selling Assets to Beautiful American Trust
KLAUSNER LUMBER: Trustee Seeks $6M Settlement Payout Okay
LAKEPORT CF: Deadline to File Amended Disclosures Nov. 13
LIVIE & LUCA: Court OKs Cash Collateral Access on Final Basis
LUXURY AUTO: Unsecureds to Get Share of Trailer Sale Proceeds
LVL TECHNOLOGIES: Michael Markham Named Subchapter V Trustee
M AND J: Court OKs Cash Collateral Access Thru Nov 16
MARIO THE BAKER: Court OKs Cash Collateral Access Thru Nov 14
MATTRESS DIRECT: Stephen Coffin Named Subchapter V Trustee
MCCONNELL SAND: Unsecureds Owed $1.1M to Get $100K
MEGA SUNSET: Wins Interim Cash Collateral Access
MERCY HOSPITAL: Wins Interim Cash Collateral Access
MIRACLE HILL: Court OKs Cash Collateral Access Thru Nov 29
MOUNTAINEER BRAND: Court OKs Interim Cash Collateral Access
MOVIA ROBOTICS: Amends Webster & Priority Unsecured Claims Pay
MSS INC: Court OKs Cash Collateral Access Thru Dec 13
MVK FARMCO: Seeks to Hire Ordinary Course Professionals
MYOMO INC: CMS Posts Proposed Medicare Fee Schedule Rate for MyoPro
MYOMO INC: Incurs $2 Million Net Loss in Third Quarter
NABORS INDUSTRIES: Releases Third Quarter 2023 Results
NB COMMONS: Wins Cash Collateral Access on Final Basis
NEPHROS INC: Judy Krandel Appointed as Chief Financial Officer
NORTHSTAR GROUP: Moody's Rates New Secured 1st Lien Term Loan 'B2'
NORTHWEST FOUNDATION: Claims Will be Paid from Property Refinance
NOTOX TECHNOLOGIES: Chief Financial Officer Dies
NOVA CHEMICALS: Fitch Assigns 'BB-' IDR, Outlook Stable
OCEAN POWER: Board Schedules Annual Meeting for Jan. 31
OKAYSOU CORP: Court OKs Cash Collateral Access Thru Nov 28
ORIGINAL MONTANA: Club Hits Chapter 11 Bankruptcy
OWENS & MINOR: Incurs $6.43MM Net Loss in Third Quarter
PACKERS HOLDINGS: Moody's Cuts CFR to Caa2 & 1st Lien Debt to Caa1
PB MICHIGAN: Court OKs Cash Collateral Access on a Final Basis
PERSIMMON HOLLOW: Voluntary Chapter 11 Case Summary
PHUNWARE INC: Winds Down Lyte Technology's Operations
PLUG POWER INC: Issues Going-Concern Warning
POLARIS OPERATING: Wins Cash Collateral Access on Final Basis
PORTER'S PENINSULA: Unsecureds Will Get 26% in Subchapter V Plan
PROTERRA INC: Volvo Group Buys Battery Business for $210 Million
QST INGREDIENTS: Unsecureds to Get 0.61 Cents on Dollar in Plan
QUALITY IRON: Case Summary & Largest Unsecured Creditors
RISE DEVELOPMENT: Case Summary & 20 Largest Unsecured Creditors
ROCKPORT COMPANY: Court OKs Cash Collateral Access Thru Nov 14
ROOF HEROES: Court OKs Interim Cash Collateral Access
RYZE RENEWABLES: Unsecured Creditors to Get 0% in Sale Plan
SADIE ROSE: Seeks Cash Collateral Access
SENIOR CARE: Bid to Use Cash Collateral Denied as Moot
SINCLAIR BROADCAST: Reports Third Quarter 2023 Financial Results
SINTX TECHNOLOGIES: Enters Long-Term Supply Deal for Jet Components
SMILEDIRECTCLUB INC: Court OKs $80MM DIP Loan from Cluster Holdco
SMILEDIRECTCLUB INC: Hires Kirkland & Ellis as Bankruptcy Counsel
SOFT SURROUNDINGS: Unsecureds to Get Nothing in Liquidating Plan
SPROUT MORTGAGE: Trustee Taps Westerman Ball as Litigation Counsel
STONERIDGE INC: S&P Alters Outlook to Stable, Affirms 'B' ICR
STROOCK & STROOCK: To Cut Nearly 140 Workers After Collapse
SUNLIGHT FINANCIAL: Proposes Immaterial Modifications to Plan
SUREFUNDING LLC: Taps Snell & Wilmer as Special Litigation Counsel
TASEKO MINES: Fitch Affirms 'B-' LongTerm IDR, Outlook Stable
TEAM HEALTH: S&P Downgrades ICR to 'CCC' on Refinancing Risk
TESORINA LLC: Wins Cash Collateral Access on a Final Basis
TGC SYSTEMS: Jeanette McPherson Named Subchapter V Trustee
TRINSEO PLC: Closes Manufacturing Operations in Netherlands
TRINSEO PLC: Incurs $38.4 Million Net Loss in Third Quarter
TRIUMPH GROUP: Incurs $1.3 Million Net Loss in Second Quarter
UPHEALTH HOLDINGS: Hires Omni Agent as Administrative Agent
UPHEALTH HOLDINGS: Seeks to Hire Ordinary Course Professionals
UPHEALTH HOLDINGS: Taps Morrison & Foerster as Litigation Counsel
VENTURE INC: Court OKs Cash Collateral Access Thru Nov 20
VISTAGEN THERAPEUTICS: Receives $1.5M Payment From Fuji Pharma
VMR CONTRACTORS: Wins Interim Cash Collateral Access
WC CONCRETE: Hires Lefkovitz & Lefkovitz as Bankruptcy Counsel
WESTERN DIGITAL: Fitch Cuts LongTerm IDR to BB+, On Watch Negative
WEWORK COMPANIES: Fitch Lowers LongTerm IDR to D Following Chap. 11
WEWORK INC: Seeks Cash Collateral Access
WEWORK INC: SoftBank, 3 Others Hold 73.5% of Class A Shares
YOUNG POULTRY: Robert Byrd Named Subchapter V Trustee
*********
13111 WESTHEIMER: Voluntary Chapter 11 Case Summary
---------------------------------------------------
Debtor: 13111 Westheimer, LLC
13111 Westheimer Rd.
Houston, TX 77077
Chapter 11 Petition Date: November 9, 2023
Court: United States Bankruptcy Court
Southern District of Texas
Case No.: 23-34448
Debtor's Counsel: Susan Tran Adams, Esq.
TRAN SINGH, LLP
2502 La Branch St.
Houston, TX 77004
Email: stran@ts-llp.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Nik Lavrinoff as managing member of End
Litigation Advisors, LLC.
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/Q76EWZY/13111_Westheimer_LLC__txsbke-23-34448__0001.0.pdf?mcid=tGE4TAMA
1600 E BUTLER AVE: Case Summary & 11 Unsecured Creditors
--------------------------------------------------------
Debtor: 1600 E Butler Ave, LLC
1600 E Butler Ave
Flagstaff, AZ
Business Description: 1600 E Butler Ave is a Single Asset Real
Estate debtor (as defined in 11 U.S.C.
Section 101(51B)).
Chapter 11 Petition Date: November 10, 2023
Court: United States Bankruptcy Court
District of Arizona
Case No.: 23-08129
Debtor's Counsel: Carolyn J. Johnsen, Esq.
DICKINSON WRIGHT PLLC
1850 N. Central Ave. Ste. 1400
Phonex, AZ 85004
Tel: 602-285-5000
Email: cjjohnsen@dickinsonwright.com
Total Assets: $8,483,336
Total Liabilities: $6,172,068
The petition was signed by Adam Reich as manager.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 11 unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/VHITGXY/1600_E_Butler_Ave_LLC__azbke-23-08129__0001.0.pdf?mcid=tGE4TAMA
40 & HOLDING: Court OKs Interim Cash Collateral Access
------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of North
Carolina, Raleigh Division, authorized 40 & Holding LLC, d/b/a/ The
London Bridge Pub, to use cash collateral on an interim basis in
accordance with the budget, with a 10% variance.
The Debtor needs to use the funds in the bank account to continue
normal operations and to maintain its going concern value.
The Debtor has represented that a UCC search at the North Carolina
Secretary of State's web portal revealed the following UCC-1
filings which may reflect perfected liens on cash collateral:
a. File # 20180090175E recorded August 30, 2018, in favor of
CresCom Bank, ATTN: Loan Processing, 220 Creekside Drive,
Washington, NC 27889;
b. File # 20200012154J recorded February 4, 2020, in favor of
U.S. Foods, Inc., 1500 NC Highway 39, Zebulon, NC 27597;
c. File # 20200050796B recorded May 6, 2020, in favor of U.S.
Small Business Administration, 2 North Street, Suite 320,
Birmingham, AL 35203;
d. File # 20220140275G recorded October 15, 2022, in favor of
Financial Agent Services, P.O. Box 2576, Springfield, IL 62708;
and
e. File # 20230068402J recorded against 40 & HOLDING LLC on
May 30, 2023, in favor of CT Corporation System, as representative,
330 N Brand Blvd, Suite 700, ATTN: SPRS, Glendale, CA 91203.
As adequate protection, and to the extent that cash collateral is
used, the Potential Secured Creditors will receive a post-petition
lien on the Debtor's cash and inventory to the extent of the use
and to the extent that the pre-petition lien in the same type of
collateral was valid, perfected, enforceable, and non-avoidable as
of the petition date.
The next hearing on the matter is November 29, 2023 at 2:30 a.m.
A copy of the court's order and the Debtor's budget is available at
https://urlcurt.com/u?l=IL2qdt from PacerMonitor.com.
The Debtor projects $65,000 in total income and $69,909 in total
expenses for 30 days.
About 40 & Holding LLC
40 & Holding LLC is a pub serving food, beverages, and alcoholic
beverages, located in downtown Raleigh. London Bridge also hosts
special events in the pub, such as open mic nights, DJ
performances, karaoke, and broadcasts soccer games for its
clientele.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D.N.C. Case No. 23-01637) on June 13,
2023. In the petition signed by Michael A. Ruiz, owner/member, the
Debtor disclosed up to $50,000 in assets and up to $1 million in
liabilities.
Judge Joseph N. Callaway oversees the case.
Kathleen O'Malley, Esq., at Stevens Martin Vaughn & Tadych, PLLC,
represents the Debtor as legal counsel.
5200 SAMPLE: Court OKs Interim Cash Collateral Access
-----------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Florida,
West Palm Beach Division, authorized 5200 Sample Road, LLC to use
cash collateral on an interim basis in accordance with the budget,
with a 10% variance.
The Debtor is a party to a UCC-1 with ODK Capital, LLC in which ODK
may purport to have a security interest in the secured assets
including any and all assets of the Debtor whether now owned or
hereafter acquired or arising. In support of the agreement and as
perfection of the purported lien thereunder, the Court finds that a
UCC-1 Financing Statement was filed on July 9, 2022, in which ODK
claims a security interest in the collateral.
The Debtor is a party to a UCC-1 with IOU Funding, LLC in which IOU
may purport to have a security interest in the secured assets
including any and all assets of the debtor whether now owned or
hereafter acquired or arising.
The Debtor is a party to a UCC-1 with Fundamental Capital, LLC in
which Fundamental may purport to have a security interest in
accounts and accounts receivable of the Debtor. In support of the
agreement and as perfection of the purported lien thereunder, the
Court finds that a UCC-1 Financing Statement was filed on October
26, 2022, in which Fundamental claims a security interest in the
collateral.
The Debtor is a party to a UCC-1 with the U.S. Small Business
Administration in which the SBA may purport to have a security
interest secured assets including accounts, receivables, and
deposit accounts of Debtor. In support of the foregoing agreement
and as perfection of the purported lien thereunder, the Court finds
that a UCC-1 Financing Statement was filed on August 20, 2020, in
which the SBA claims a security interest in the collateral.
During the pendency of the bankruptcy and until further Court
Order, all pre-petition and post-petition income will be turned
over and paid to the Debtor for deposit into the Debtor in
Possession bank accounts.
As adequate protection for and to the extent of the Debtor's use of
"cash collateral" pursuant to the Order, ODK, IOU, Fundamental and
SBA, are granted, as of the Petition Date, a replacement lien to
the same extent as any pre-petition lien, pursuant to 11 U.S.C.
section 361(2) on the property set forth in its security
agreements, on an interim basis, without any prejudice to any
rights of the Debtor to seek to void the lien as to the extent,
validity, or priority of said liens.
A further interim hearing on the matter is set for January 30, 2024
at 2:30 p.m.
A copy of the court's order and the Debtor's budget is available at
https://urlcurt.com/u?l=dzScmn from PacerMonitor.com.
The Debtor projects total expenses, on a monthly basis, as
follows:
$42,036 for November 2023;
$42,036 for December 2023; and
$42,236 for January 2024.
About 5200 Sample Road, LLC
5200 Sample Road, LLC sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. S.D. Cal. Case No. 23-13723) on May
12, 2023.
In the petition signed by Mark Alsentzer, manager, the Debtor
disclosed up to $100,000 in assets and up to $50,000 in
liabilities.
Judge Mindy A. Mora oversees the case.
Craig I. Kelley, Esq., at Kelley, Fulton & Kaplan, P.L., represents
the Debtor as legal counsel.
AAD LOCKER: Case Summary & 13 Unsecured Creditors
-------------------------------------------------
Debtor: AAD Locker LLC
DBA US Heating & Air Conditioning
1016 East Orange Rd.
Lewis Center, OH 43035
Business Description: AAD Locker is an HVAC service provider.
Chapter 11 Petition Date: November 10, 2023
Court: United States Bankruptcy Court
Southern District of Ohio
Case No.: 23-53940
Debtor's Counsel: John W. Kennedy, Esq.
STRIP HOPPERS LEITHART MCGRATH & TERLECKY CO.,
LPA
575 S. Third St
Columbus, OH 43215
Tel: 614-228-6345
Fax: 614-228-6369
Estimated Assets: $100,000 to $500,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Anthony D. Locker as president.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 13 unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/QTNEYMA/AAD_Locker_LLC__ohsbke-23-53940__0001.0.pdf?mcid=tGE4TAMA
ABS NETWORK: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: ABS Network LLC
53 Knightsbridge Road
Suite 220
Piscataway, NJ 08854
Chapter 11 Petition Date: November 10, 2023
Court: United States Bankruptcy Court
District of New Jersey
Case No.: 23-20525
Debtor's Counsel: Brett Silverman, Esq.
SILVERMAN LAW PLLC
4 Terry Terrace
Livingston NJ 07039
Tel: 646-779-7210
Email: bsilverman@silvermanpllc.com
Total Assets: $161,856
Total Liabilities: $5,631,710
The petition was signed by Yaver Durrani as manager.
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/SLBW6OA/ABS_Network_LLC__njbke-23-20525__0001.0.pdf?mcid=tGE4TAMA
ALPHA ENTERTAINMENT: McMahon Settles Fight With Ex-Chief Over Pay
-----------------------------------------------------------------
Brian Steele of Law360 reports that sports entertainment mogul
Vince McMahon and the former head of one of his companies, the
football league XFL, have settled an $11.1 million legal feud in
Connecticut federal court that sprang from the league's allegedly
poor leadership ahead of its 2020 bankruptcy.
About Alpha Entertainment
Alpha Entertainment LLC, which does business as the "Xtreme
Football League" -- https://www.alphaentllc.com/ -- is a
professional American football league. The XFL kicked off with
games beginning in February 2020. The XFL offered fast-paced,
three-hour games with fewer play stoppages and simpler rules. The
XFL featured eight teams, 46-man active rosters, and a 10-week
regular season schedule, with a postseason consisting of two
semifinal playoff games and a championship game. The eight XFL
teams were the DC Defenders, the Dallas Renegades, the Houston
Roughnecks, the Los Angeles Wildcats, the New York Guardians, the
St. Louis BattleHawks, the Seattle Dragons, and the Tampa Bay
Vipers.
Alpha Entertainment, based in Stamford, CT, filed a Chapter 11
petition (Bankr. D. Del. Case No. 20-10940) on April 13, 2020. The
Hon. Laurie Selber Silverstein oversees the case. In its petition,
the Debtor was estimated to have $10 million to $50 million in both
assets and liabilities. The petition was signed by John Brecker,
independent manager.
The Debtor hired Young Conaway Stargatt & Taylor, LLP, as counsel.
Donlin Recano & Company, Inc., is the claims agent and
administrative advisor.
ALROD LOGISTICS: Unsecureds Will Get 1% of Claims over 60 Months
----------------------------------------------------------------
Alrod Logistics, Inc., filed with the U.S. Bankruptcy Court for the
Middle District of Florida a Subchapter V Plan of Reorganization
dated October 31, 2023.
The Debtor is the operator of a UV Lining pipe repair business
which operates in Jacksonville, FL. The business was started in
2007 by Alejandro "Alex" Echeverria and has continuously operated
since that time.
The Debtor attempted to maintain it's financial health with an SBA
loan of $88,000.00 in 2020. Unfortunately, the attempt to maintain
the debt servicing failed and the Debtor was sued by multiple
vendors and lenders during 2022 and 2023. This Chapter 11 followed
in order to restructure the existing secured and unsecured debt.
This Plan of Reorganization proposes to pay unsecured creditors of
the Debtor all disposable income during months 1 to 60 from future
income of the Debtor derived from income generated from the
business that the Debtor owns in order to obtain a discharge
pursuant to Section 1192 of the Bankruptcy Code.
This Plan provides for 18 class(es) of secured claims, 2 Classes of
Priority Claims and 1 class of unsecured claims. Unsecured
creditors holding allowed claims will receive distributions which
the proponent of this Plan has valued at approximately 1 cents on
the dollar based upon current projections of disposable income.
This Plan also provides for the payment of administrative and
priority claims either upon the effective date of the Plan or as
allowed under the Bankruptcy Code.
Class 20 consists of All General Unsecured Claims, including any
wholly unsecured second mortgage claims. To the extent that
unsecured claims are filed and allowed, the Debtor shall pay the
total amount of unsecured claims at the rate of $500.00 during
months 1 to 60 of the plan of reorganization for 1% repayment of
all unsecured claims.
The Debtor's plan proposed to reduce the secured claims of the
vehicle finance companies and several other large secured lenders
to the valuation amount in order to maintain positive cash flow
each month during the term of the proposed plan.
A full-text copy of the Subchapter V Plan dated October 31, 2023 is
available at https://urlcurt.com/u?l=mXOBIc from PacerMonitor.com
at no charge.
Attorneys for Debtor:
Bryan K. Mickler, Esq.
Law Offices of Mickler & Mickler, LLP
5452 Arlington Expy.
Jacksonville, FL 32211
Telephone: (904) 725-0822
Facsimile: (904) 725-0855
Email: bkmickler@planlaw.com
About Alrod Logistics
Alrod Logistics, Inc., offers pipe lining services. The Debtor
sought protection under Chapter 11 of the U.S. Bankruptcy Code
(Bankr. M.D. Fla. Case No. 23-01820) on August 3, 2023. In the
petition signed by Alejandro Echeverria, president, the Debtor
disclosed $922,927 in assets and $3,732,863 in liabilities.
Judge Jason A. Burgess oversees the case.
Bryan K. Mickler, Esq., at Law Offices of Mickler & Mickler, LLP,
is the Debtor's legal counsel.
AMERIFIRST FINANCIAL: Comm. Taps IslandDundon as Financial Advisor
------------------------------------------------------------------
The official committee of unsecured creditors of Amerifirst
Financial, Inc. and its affiliates seeks approval from the U.S.
Bankruptcy Court for the District of Delaware to employ
IslandDundon LLC as its financial advisor.
The firm will provide these services:
a. assist in the analysis, review, and monitoring of the
restructuring process, including, but not limited to, an assessment
of the unsecured claims pool and potential recoveries for unsecured
creditors;
b. develop a complete understanding of the Debtors' businesses
and their valuations;
c. determine whether there are viable alternative paths for
the disposition of the Debtors' assets from those currently or in
the future proposed by any Debtor;
d. monitor and, to the extent appropriate, assist the Debtors
in efforts to develop and solicit transactions that would support
unsecured creditor recovery;
e. assist the Committee in identifying, valuing, and pursuing
estate causes of action, including, but not limited to, relating to
prepetition transactions, control person liability, and lender
liability;
f. assist the Committee to analyze, classify and address
claims against the Debtors and to participate effectively in any
effort in these chapter 11 cases to estimate, in any formal or
informal sense, contingent, unliquidated, and disputed claims;
g. assist the Committee to identify, preserve, value, and
monetize tax assets of the Debtors, if any;
h. advise the Committee in negotiations with the Debtors,
certain of the Debtors' lenders, and third parties;
i. assist the Committee in reviewing the Debtors' financial
reports;
j. assist the Committee in reviewing the Debtors' cost/benefit
analysis with respect to the assumption or rejection of various
executory contracts and leases;
k. review and provide analysis of the present and any
subsequently proposed debtor-in-possession financing or use of cash
collateral;
l. assist the Committee in evaluating and analyzing avoidance
actions, including fraudulent conveyances and preferential
transfers;
m. assist the Committee in investigating alleged encumbrances
upon assets;
n. review and provide analysis of any proposed disclosure
statement and chapter 11 plan and, if appropriate, assist the
Committee in developing an alternative chapter 11 plan;
o. attend meetings and assist in discussions with the
Committee, the Debtors, the secured lenders, the U.S. Trustee and
other parties in interest and professionals;
p. present at meetings of the Committee, as well as meetings
with other key stakeholders and parties;
q. perform such other advisory services for the Committee as
may be necessary or proper in these proceedings, subject to the
aforementioned scope; and
r. provide testimony on behalf of the Committee as and when
may be deemed appropriate.
The firm will be paid at these rates:
Principal $890 per hour
Managing Director and Senior Adviser $790 per hour
Senior Director $700 per hour
Director $650 per hour
Associate Director $550 per hour
Senior Associate $475 per hour
Associate $350 per hour
The firm will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Matthew Dundon, a principal at Dundon Advisers, disclosed in a
court filing that his firm is a "disinterested person" pursuant to
Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Matthew Dundon
Dundon Advisers, LLC
Ten Bank Street, Suite 1100
White Plains, NY 10606
Telephone: (917) 838-1930
Email: md@dundon.com
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.
AMMACORE INC: Court OKs Cash Collateral Access Thru Dec 1
---------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Georgia,
Atlanta Division, authorized Ammacore Inc. to use cash collateral
on an interim basis in accordance with the budget, through the date
of the continued hearing set for December 1, 2023 at 10:30 a.m.
The Debtor requires the use of cash collateral to pay operating
expenses including insurance, taxes and compensation for its work
force.
Advance Financial Corporation, the U.S. Small Business
Administration, and Corporation Service Company for National
Funding, Inc. may assert a security interest in the Debtor's cash,
the proceeds generated from the Debtor's Business operations,
and/or certain portions of the Debtor's operating revenues which
would constitute cash collateral within the meaning of 11 U.S.C.
Section 363.
As adequate protection, the Lenders will be granted valid,
attached, choate, enforceable, perfected and continuing security
interest in, and liens upon all post-petition assets of the
Debtor.
The Debtor will pay AFC $9,167 so that it is received in an account
designated by AFC on or before November 21, 2023, and every four
weeks thereafter, as outlined in the Approved Budget.
The events that constitute an "Event of Default" include:
(a.) The Debtor's failure to deliver to AFC any Weekly Report that
contains all of the Reporting Requirements. The Debtor will have
two business days to cure a Reporting Default;
(b.) The Debtor's failure to deliver to AFC any Adequate Protection
Payment. The Debtor will have three business days to cure an
Adequate Protection Payment Default; and
(c.) The Debtor fails to pay WorkMarket, and the amount due to be
paid to WorkMarket remains unpaid for more than three business days
after the initial due date for payment of the same.
A copy of the order is available at https://urlcurt.com/u?l=rNap4P
from PacerMonitor.com.
About Ammacore Inc.
Ammacore Inc. is a national onsite technology service company for
resellers, VARs, manufacturers, distributors, and software vendors.
Ammacore partners with its clients to thoroughly understand the
technology and service challenges of their customers and employ its
proprietary Scope of Service and Event Management Process to
identify the very best resources for their customers' needs.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Ga. Case No. 23-59671) on October 2,
2023. In the petition signed by Chris C. Gaffney, CEO, the Debtor
disclosed up to $50,000 in assets and up to $10 million in
liabilities.
Judge Barbara Ellis-Monro oversees the case.
Cameron M. McCord, Esq., at Jones & Walden, LLC, represents the
Debtor as legal counsel.
AN GLOBAL: $22.7MM DIP Loan from Blue Torch Has Interim OK
----------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized
AN Global LLC, AgileThought, Inc., and their debtor-affiliates to
continue using cash collateral and borrowing under a postpetition
senior secured facility from Blue Torch Finance LLC, on an interim
basis.
AN Global obtained postpetition financing, comprising a
superpriority senior secured multiple-draw term loan facility in an
aggregate principal amount of not less than $22.7 million, which
consists of a new money multi-draw term loan facility in an
aggregate principal amount of $22.7 million.
Blue Torch is the administrative agent and collateral agent under
the DIP Agreement. It is also the administrative agent and
collateral agent under a prepetition first lien facility.
AN Global is permitted to obtain up to an aggregate principal
amount of $19.7 million in Term Loans -- plus an amount equal to
the Closing Fee and Agency Fee, plus interest, fees, indemnities,
and other expenses and other amounts provided for in the DIP Credit
Agreement -- comprising (i) $11.2 million in Term Loans approved
pursuant to the First Interim Order, (ii) $2.4 million in
additional Second Interim Term Loans approved pursuant to the
Second Interim Order, (iii) $2.6 million in additional Term Loans
approved pursuant to the Fourth Interim Order; and $3.6 million in
additional Term Loans approved pursuant to the Fifth Interim
Order.
All obligations under the DIP Loan Documents will be due and
payable in full in cash on the earliest of:
(a) November 27, 2023 or if such day is not a Business Day,
the preceding Business Day;
(b) the effective date of a Plan of Reorganization that has
been confirmed by a Bankruptcy Court order;
(c) 56 days after the Bankruptcy Court's entry of the Interim
Order (subject to Bankruptcy Court availability), unless, on or
before such day, the Final Order will have been entered by the
Bankruptcy Court;
(d) the date the Bankruptcy Court converts any of the Chapter
11 Cases to a case under Chapter 7 of the Bankruptcy Code;
(e) the date the Bankruptcy Court dismisses any of the Chapter
11 Cases;
(f) the date of substantial consummation of a sale of all or
substantially all of the assets (and, to the extent applicable, the
equity) of the Loan Parties as set forth in and pursuant to the
Asset Purchase Agreement or another acquisition agreement approved
by the Bankruptcy Court in its Sale Order; and
(g) such earlier date on which the Obligations will become due
and payable by acceleration or otherwise in accordance with the
terms of the Agreement and the other Loan Documents.
The Debtors are required to comply with these milestones:
1. No later than 3 business days after the Petition Date, the
Bankruptcy Court will have entered the Interim Order;
2. No later than 50 days after the Petition Date, the
Bankruptcy Court will have entered the Final Order;
3. No later than 50 days after the Petition Date, the
Bankruptcy Court will have entered an order confirming a plan of
reorganization that is in form and substance reasonably acceptable
to the Required DIP Lenders and approving the related disclosure
statement; provided that the Plan will constitute an Acceptable
Plan; and
4. No later than 90 days after the Petition Date, the
effective date of the Acceptable Plan will have occurred.
As of the Petition Date, the Debtors have approximately $112
million of secured indebtedness. This includes not less than
$97.182 million in prepetition first lien obligations that include
not less than $95.937 million in principal amounts of term loans
advanced under the Prepetition 1L Credit Agreement along with fees
and premiums, plus no less than $1.244 million on account of
accrued and unpaid interest thereon prior to the Petition Date,
plus all other fees, costs, expenses, indemnification obligations,
reimbursement obligations, charges, premiums, if any, additional
interest, any other "Obligations."
The Debtors also owe $13 million in outstanding amount under a
prepetition second lien credit facility with a lending syndicate
led by GLAS Americas LLC as collateral agent and GLAS USA LLC, as
administrative agent. This amount includes $10 million under a
Tranche B facility held by Nexxus Capital Private Equity Fund VI,
L.P.
Prior to the commencement of the Chapter 11 Cases, the Prepetition
1L Agent and the GLAS entities entered into an Intercreditor
Agreement dated as of May 27, 2022, which sets forth the respective
rights, obligations and priorities of the liens and security
interests of Prepetition 1L Agent and the Prepetition 1L Lenders on
the one hand, and the Prepetition 2L Collateral Agent and
Prepetition 2L Lenders, on the other hand, with respect to the
Collateral and the obligations of Borrower and Guarantors party
thereto due to the Prepetition 1L Agent and the Prepetition 1L
Lenders, on the one hand, and the Prepetition 2L Collateral Agent
and Prepetition 2L Lenders, on the other hand.
The Debtors have an immediate need to obtain the DIP Facility and
to use the cash collateral in each case on an interim basis to,
among other things:
(i) permit the orderly continuation of their respective
businesses;
(ii) maintain business relationships with their vendors,
suppliers, customers, and other parties;
(iii) make payroll and honor other obligations to employees;
(iv) make capital expenditures;
(v) make adequate protection payments; and
(vi) pay the costs of the administration of the Chapter 11
Cases and satisfy other working capital and general corporate
purposes of the Debtors.
As adequate protection of their interests in the Prepetition
Collateral, the Prepetition 1L Agent, for the benefit of themselves
and the Prepetition 1L Lenders are granted automatically perfected
postpetition security interests in, and liens on, as of the date of
the Interim Order.
As further adequate protection, and to the extent provided by 11
U.S.C. sections 503(b) and 507(b), an allowed administrative
expense claim in the Chapter 11 Cases to the extent of any
postpetition Diminution in Value ahead of and senior to any and all
other administrative expense claims in such Chapter 11 Cases,
except the Carve Out and the DIP Superpriority Claims.
The "Carve Out" means the sum of:
(i) all fees required to be paid to the Clerk of the Court and
to the Office of the U.S. Trustee under 28 U.S.C. section 1930(a)
plus interest at the statutory rate;
(ii) all reasonable fees and expenses up to $25,000 incurred by
a trustee under Bankruptcy Code section 726(b); and
(iii) to the extent allowed, all unpaid fees and expenses
incurred by bankruptcy professionals retained in the cases.
The Debtors' authorization to use cash collateral and the proceeds
of the DIP Facility will automatically terminate, and the DIP
Obligations will become due and payable, without further notice or
action by the Bankruptcy Court following the earliest to occur of
any of the following:
(a) The occurrence of an Event of Default;
(b) The Debtors' failure to (i) comply with any provision of
the Interim Order, (ii) comply with any other covenant or agreement
specified in the Interim Order or the DIP Credit Agreement (which
covenants and agreements, together with any applicable grace
periods, are explicitly incorporated by reference into the Interim
Order), or (iii) comply with any of the milestones set forth in
Schedule 7.01(x) of the DIP Credit Agreement; or
(c) the occurrence of the Maturity Date.
A final hearing on the matter is set for November 16, 2023 at 11
a.m.
A copy of the order is available at https://urlcurt.com/u?l=jSdIUA
from PacerMonitor.com.
About AN Global LLC
AN Global LLC and affiliates are global providers of agile-first,
end-to-end digital transformation services in the North American
market using on-shore and near-shore delivery. The Company's
solution architects, developers, data 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 the
transition to digital platforms across business processes.
The Debtors sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Del. Lead Case No. 23-11294) on August
28, 2023. In the petition signed by James S. Feltman, chief
restructuring officer, the Debtor disclosed up to $500 million in
both assets and liabilities.
Judge J. Kate Stickles oversees the case.
The Debtors tapped Potter Anderson & Corroon LLP and Hughes Hubbard
& Reed LLP as co-general bankruptcy counsel.
Garrigues Mexico, S.C. is the general Mexican restructuring
counsel, Teneo Capital LLC as financial advisor, Guggenheim
Securities, LLC as investment banker, and Kurtzman Carson
Consultants LLC as claims, noticing and balloting agent.
Blue Torch Finance LLC is the administrative agent and collateral
agent under the DIP Agreement. It is also the administrative agent
and collateral agent under a prepetition first lien facility. Ropes
& Gray, LLP and Chipman Brown Cicero & Cole, LLP serve as counsel
to the Prepetition 1L Agent.
ANAGRAM HOLDINGS: Gets Court Okay to Tap $10 Mil. of DIP Financing
------------------------------------------------------------------
Emily Lever of Law360 reports that foil balloon company Anagram
Holdings won approval to tap $10 million of $37 million its DIP
financing in Chapter 11. A Texas bankruptcy judge Thursday,
November 9, 2023, gave provisional approval to Anagram Holdings
LLC's debtor-in-possession financing package from its secured
lenders, overruling objections from a second-lien lender that the
debtor was trying to move too fast toward a sale.
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 Adrian
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.
ANN ARBOR SAND: Property Sale Proceeds to Fund Plan
---------------------------------------------------
Ann Arbor Sand Dollar Realty Group, LLC, filed with the U.S.
Bankruptcy Court for the Eastern District of New York a Disclosure
Statement describing Chapter 11 Plan dated November 2, 2023.
The Debtor is a limited liability company incorporated under the
laws of the State of New York in or about April 4, 2018 for the
purpose of purchasing, selling, mortgaging, and rehabilitating
residences in the Metropolitan New York, Nassau, and Suffolk
Counties.
The Debtor owns certain real property known as 1768 Majors Path,
Southampton, New York (the "Southampton Property"). A first
mortgage (the "Wilmington Savings Fund Mortgage") of Wilmington
Savings Fund Society, FSB, not in its individual capacity but
solely as Owner Trustee for Verus Securitization Trust, 2020- NPL1
("Wilmington Savings Fund") exists against the Southampton
Property.
The Debtor has filed a Motion with the Court seeking a
determination that: (i) the value the Southampton Property is
$740,000; (ii) reclassifying the Wilmington Savings Fund Mortgage
from wholly secured to a secured claim up to the value of the
Southampton Property with the remaining balance reclassified as a
general unsecured claim; and (iii) reclassifying the four junior
liens from secured claims to general unsecured claims. The Debtor
proposes for the sale of the Southampton Property, which will
result in payment of the secured portion of the Wilmington Savings
Fund Claim in full.
Additionally, in addition to the Sale of the Southampton Property,
the Purchaser will enter. into a construction contract with Sand
Dollar Development Corp. ("SDDC") with respect to the Southampton
Property, and contingent upon (i) Confirmation of the Debtor's
Chapter 11 Plan; and (ii) the granting of the Shareholder Release
set forth in this Plan, the buyer of the Southampton Property will
advance additional funds in the amount of $200,000 to fund the Plan
(the "Advanced Funds").
As consideration for the Advanced Funds and the Shareholder
Release; Shareholder, through Shareholder's separate entity, SDDC
will do certain construction/renovation work for the purchaser of
the Southampton Property pursuant to the construction contract,
and, as additional consideration, SDDC will transfer certain
approved Permits and Plans that SDDC holds with respect to the
Property to the Purchaser. The Advanced Funds will be used to fund
the Plan and will be distributed in accordance with the terms of
the Plan.
Class 3 consists of Enhanced Unsecured Claims. Class 3 claims
consist of the following: Solomon Hedaya/Sarah Dahba Trust
($176341.09); Allan Reichman ($124,900); Eric Goldfine as Trustee
of the Eric Goldfine, Self Employed Retirement Plan and Trust
($175,000); and Steve Eckhaus ($200,000). Class 3 Claims will be
paid a pro rata share of distributions to unsecured creditors under
the Plan. Class 3 Claims are Impaired.
Class 4 consists of allowed general unsecured claims against the
Debtor. Class 4 consists of the claim of Planet Home Lending, LLC,
as Servicer for Wilmington Savings Fund Society FSB, not in its
individual capacity but solely as owner trustee for Verus
Securitization Trust 2020 NPL-1 in the amount of $1,215,286.19.
Class 4 Claims will be paid a pro rata share of distributions to
unsecured creditors under the Plan. Class 4 Claims are Impaired.
On the Effective Date, all class 5 Equity Interests shall be
canceled without any distribution on account of such Equity
Interests, and new interests in the Reorganized Debtor will be
issued 100% to Richard Gherardi. In return, Richard Gherardi will
manage the Debtor and manage the Debtor post confirmation
(hereinafter the "Reorganized Debtor").
The Plan shall be implemented under the direction of the Debtor and
shall be funded by the proceeds of the Sale of the Southampton
Property, and by additional amounts paid by the buyer of the
Southampton Property (the "Advanced Funds") pursuant to a building
contract between the purchaser of the Southampton Property and SDDC
with respect to which SDDC will do certain
Construction/Rehabilitation work with respect to the Southampton
Property and in return for approved permits and plans owned by
SDDC.
A full-text copy of the Disclosure Statement dated November 2, 2023
is available at https://urlcurt.com/u?l=qK0RtW from
PacerMonitor.com at no charge.
Debtor's Counsel:
Charles Higgs, Esq.
THE LAW OFFICES OF CHARLES A. HIGGS
2 Depot Plaza First Floor, Office 4
Bedford Hills, NY 10507
Tel: (917) 673-3768
E-mail: charles@freshstartesq.com
About Ann Arbor Sand
Ann Arbor Sand Dollar Realty Group, LLC is engaged in activities
related to real estate.
The Debtor filed Chapter 11 Petition (Bankr. E.D.N.Y. Case No.
23-72088) on June 9, 2023, with $715,000 in assets and $2,438,653
in liabilities. Richard Gherardi, managing member, signed the
petition.
Judge Louis A. Scarcella oversees the case.
Charles Higgs, Esq. of THE LAW OFFICES OF CHARLES A. HIGGS
represents the Debtor as legal counsel.
ANTHOLOGY INC: Taps PJT Partners to Help on Rising Debt
-------------------------------------------------------
Reshmi Basu and Eliza Ronalds-Hannon of Bloomberg News reports that
Anthology Inc. named PJT Partners to advise the higher education
software provider on its rising debt costs, according to people
familiar with the situation, who asked not to be identified
discussing a private matter.
Veritas Capital Fund Management, the private equity backer of
Anthology, in late 2021 placed a $140 million revolver that comes
due in 2026, a $1.3 billion first lien loan maturing in 2028 and a
$500 million second lien loan due 2029 to back a merger of
Anthology with competitor Blackboard.
About Anthology Inc.
Anthology, Inc., operates as a software company. The Company offers
solution that help students, faculty, and administrators build
better strategies for their institution. Anthology serves customers
worldwide.
APPLIED DNA: Signs Deal With Maxim to Sell $6.4M Common Shares
--------------------------------------------------------------
Applied DNA Sciences, Inc. disclosed in a Current Report on Form
8-K filed with the Securities and Exchange Commission that it
entered into an Equity Distribution Agreement with Maxim Group LLC,
as sales agent, pursuant to which the Company may, from time to
time, issue and sell shares of its common stock, par value $0.001
per share, in an aggregate offering price of up to $6,397,939
through the Agent.
The offer and sales of the Shares made pursuant to the Agreement,
if any, will be made under the Company's effective "shelf"
registration statement on Form S-3 (File No. 333-272267) dated May
30, 2023, the base prospectus contained therein, and a prospectus
supplement related to the offering of the Shares dated Nov. 7,
2023.
Under the terms of the Agreement, the Agent may sell the Shares at
market prices by any method that is deemed to be an "at the market
offering" as defined in Rule 415 under the Securities Act of 1933,
as amended.
Subject to the terms and conditions of the Agreement, the Agent
will use its commercially reasonable efforts to sell the Shares
from time to time, based upon the Company's instructions. The
Company has no obligation to sell any of the Shares, and may at any
time suspend sales under the Agreement or terminate the Agreement
in accordance with its terms. The Company has provided the Agent
with customary indemnification rights, and the Agent will be
entitled to a fixed commission of 3.0% of the aggregate gross
proceeds from the Shares sold. The Agreement contains customary
representations and warranties, and the Company is required to
deliver customary closing documents and certificates in connection
with sales of the Shares. The Company has agreed to reimburse the
Agent for the fees and disbursements of its counsel, payable upon
execution of the Agreement, in an amount not to exceed $40,000 in
connection with the establishment of this at-the-market offering
program, in addition to certain ongoing fees of its legal counsel.
About Applied DNA
Applied DNA Sciences, Inc. -- http//www.adnas.com -- is a
biotechnology company developing technologies to produce and
detect deoxyribonucleic acid ("DNA"). Using the polymerase chain
reaction ("PCR") to enable both the production and detection of
DNA, the Company operates in three primary business markets: (i)
the manufacture of synthetic DNA for use in nucleic acid-based
therapeutics; (ii) the detection of DNA in molecular diagnostics
testing services; and (iii) the manufacture and detection of DNA
for industrial supply chain security services.
Applied DNA reported a net loss of $8.27 million for the year ended
Sept. 30, 2022, a net loss of $14.28 million for the year ended
Sept. 30, 2021, and a net loss of $13.03 million for the year ended
Sept. 30, 2020.
"We have recurring net losses, which have resulted in an
accumulated deficit of $298,854,883 as of June 30, 2023. We have
incurred a net loss of $3,114,195 for the nine-month period ended
June 30, 2023. At June 30, 2023, we had cash and cash equivalents
of $10,756,235. We have concluded that these factors raise
substantial doubt about our ability to continue as a going concern
for one year from the issuance of the financial statements. We
will continue to seek to raise additional working capital through
public equity, private equity or debt financings. If we fail to
raise additional working capital, or do so on commercially
unfavorable terms, it would materially and adversely affect our
business, prospects, financial condition and results of operations,
and we may be unable to continue as a going concern. If we seek
additional financing to fund our business activities in the future
and there remains substantial doubt about our ability to continue
as a going concern, investors or other financing sources may be
unwilling to provide additional funding to us on commercially
reasonable terms, if at all," said Applied DNA in its Quarterly
Report on Form 10-Q for the period ended June 30, 2023.
AQUABOUNTY TECHNOLOGIES: Posts $6.1 Million Net Loss in 3rd Quarter
-------------------------------------------------------------------
AquaBounty Technologies, Inc. filed with the Securities and
Exchange Commission its Quarterly Report on Form 10-Q disclosing a
net loss of $6.14 million on $733,133 of revenues for the three
months ended Sept. 30, 2023, compared to a net loss of $5.44
million on $653,432 of revenues for the three months ended Sept.
30, 2022.
For the nine months ended Sept. 30, 2023, the Company reported a
net loss of $19.13 million on $1.92 million of revenues compared to
a net loss of $16.08 million on $2.68 million of revenues for the
nine months ended Sept. 30, 2022.
As of Sept. 30, 2023, the Company had $192.55 million in total
assets, $19.36 million in total liabilities, and $173.19 million in
total stockholders' equity.
AquaBounty said, "Since inception, the Company has incurred
cumulative operating losses and negative cash flows from operations
and expects that this will continue for the foreseeable future. As
of September 30, 2023, the Company has $17.8 million in cash and
cash equivalents, and restricted cash, a significant portion of
which is required to fund its current liabilities and other
contractual obligations.
"The Company's ability to continue as a going concern is dependent
upon its ability to raise additional capital and there can be no
assurance that such capital will be available in sufficient amounts
or on terms acceptable to the Company. This raises substantial
doubt about the Company's ability to continue as a going concern
within one year after the date that the accompanying condensed
consolidated financial statements are issued."
Management Commentary
"Our third quarter results were impacted by a decline in market
prices for Atlantic salmon that began during the second quarter,
even though our Indiana farm exceeded its planned output," said
Sylvia Wulf, Board Chair and chief executive officer of AquaBounty.
"However, we continue to be encouraged by the demand for our fish.
"We announced in August that the Company was evaluating both the
cost estimate and our options for moving forward with the
completion of construction of our Ohio farm. We selected Gilbane
Building Company ("Gilbane") as our new construction firm for the
project and they have been working for the past several months with
the subcontractors on the project to estimate the remaining cost to
finish construction of the facility. That work has been completed
and the new estimate for the total project cost is now in the range
of $485 - $495 million, of which approximately $140 million has
been spent to date. We recognize this is substantially higher than
previous ranges, but the updated estimates incorporate the highly
inflationary environment for labor and materials, particularly
concrete and piping, that have impacted construction projects over
the last three years. Consistent with our commitment to
environmental stewardship, the estimate includes a water/wastewater
treatment facility to return water used in the farm to the local
environment in an "as clean" condition as when it was withdrawn,
and in a manner that meets or exceeds applicable local and federal
EPA standards, before it returns to the river. We are negotiating
elements of the estimated costs with Gilbane, and once complete,
will finalize the Guaranteed Maximum Price that would provide a
contractual cap on the total expenditure to complete the farm.
"We are continuing our collaboration with Wells Fargo Corporate and
Investment Banking on our plans to place a mix of taxable and
tax-exempt bonds through the Toledo-Lucas County Port Authority in
an amount up to $425 million, and we are exploring a wide range of
alternatives with Oppenheimer & Co. to complete the additional
capital requirements to allow construction to resume on the Ohio
farm. Though there are significant steps and risks remaining to
complete this process, we are excited to be working with our team
of collaborators.
"Finally, we continue to make progress on leveraging and expanding
our operational expertise internationally. AquaBounty has entered
into a non-binding memorandum of understanding with Noble Salmon, a
company formed to build and operate a Recirculating Aquaculture
System ("RAS") salmon farm in the Republic of Georgia. Noble
Salmon was formed by the Benish Group, whose CEO Meni Benish is
also a co-founder of Archi, a major engineering and real estate
development firm in the Republic of Georgia. Benish is also the
Chairman of the Israel-Georgia Chamber of Commerce. Benish Group
will contribute expertise in engineering, material sourcing and
permitting to the project, while AquaBounty will provide its
experience successfully operating RAS farms through rigorous
operating procedures and incorporating the latest technologies into
the design of those farms. The combination of capabilities of the
two companies benefits the construction and operation of a planned
state-of-the-art RAS farm focused on producing Atlantic salmon for
sale in nearby markets. This project will be the first instance of
AquaBounty executing its strategy to enter additional salmon
markets through local partnerships in a capital-lite structure.
"As always, I look forward to providing my fellow shareholders with
an update in the near future," concluded Wulf.
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1603978/000160397823000060/aqb-20230930x10q.htm
About AquaBounty
Headquartered in Maynard, Massachusetts, AquaBounty Technologies,
Inc. (NASDAQ: AQB) -- www.aquabounty.com -- is a land-based
sustainable aquaculture company that provides fresh Atlantic salmon
to nearby markets by raising its fish in carefully monitored
land-based fish farms through a safe, secure and sustainable
process. The Company's land-based Recirculating Aquaculture System
("RAS") farms, including a grow-out farm located in Indiana, United
States and a broodstock and egg production farm located on Prince
Edward Island, Canada, are close to key consumption markets and are
designed to prevent disease and to include multiple levels of fish
containment to protect wild fish populations. AquaBounty is
raising nutritious salmon that is free of antibiotics and
contaminants and provides a solution resulting in a reduced carbon
footprint and no risk of pollution to marine ecosystems as compared
to traditional sea-cage farming.
Aquabounty reported a net loss of $22.16 million in 2022 following
a net loss of $22.32 million in 2021.
ARCHBISHOP OF BALTIMORE: Wins Interim Cash Collateral Access
------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Maryland authorized
Roman Catholic Archbishop of Baltimore to use cash collateral on an
interim basis in accordance with the budget.
The authority will expire if a final order is not entered by
December 21, 2023.
As previously reported by the Troubled Company Reporter, the Debtor
requires the use of cash collateral to provide compensation for
unresolved claims of survivors of abuse and preserve the ability of
the Debtor to continue providing essential ministries and services
within the Archdiocese of Baltimore.
Pursuant to a variety of lending transactions, certain financial
instruments, and Treasury Management Services Agreement, the Debtor
is indebted to PNC Bank, National Association, which indebtedness
is secured by, among other things, the Debtor's deposit and
investment accounts maintained at PNC.
Pursuant to the Indenture of Trust dated as of June 1, 2007,
Maryland Health and Higher Educational Facilities Authority issued
$24.165 million in the aggregate principal amount of its Maryland
Health and Higher Educational Facilities Authority Revenue Bonds,
Archdiocese of Baltimore Schools Issue, Series 2007, the proceeds
of which were loaned by the Issuer to the Debtor pursuant to a
certain Loan Agreement, dated as of June 1, 2007, by and between
the Issuer and Debtor, in order to finance and refinance the costs
of certain non-collegiate educational projects.
As of the Petition Date, the aggregate principal amount outstanding
under the Bond Loan Agreement was approximately $21.675 million,
plus accrued interest and other fees due and owing under the Bond
Loan Agreement and PNC is the sole holder of the Bonds.
Pursuant to the Third Amended and Restated Letter Agreement -- Term
Loan dated as of May 16, 2014 by and between PNC and the Debtor,
PNC provided a term loan facility in the aggregate principal amount
of $14.7 million.
As of the Petition Date, the aggregate principal amount outstanding
under the PNC Loan Agreement was approximately $4.1 million, plus
accrued interest and other fees due and owing under the PNC Loan
Agreement.
In addition to the PNC Obligations, the Debtor is obligated as a
guarantor in connection with the Guaranty and Suretyship Agreement,
dated as of May 20, 2016, pursuant to which the Debtor guaranteed
all obligations of Church of the Nativity of Our Lord Jesus Christ
Roman Catholic Congregation, Incorporated, including, without
limitation, a Standby and Commercial Letter of Credit.
The Debtor is also obligated under certain swap agreements with
PNC.
As of September 25, 2023, the mark-to-market value of the Swap
Obligations is approximately $856,000 that would be owing by the
Debtor. In addition, if the Swap Agreements were terminated, the
Debtor would incur significant increased interest expense in
connection with the Bond Obligations and PNC Obligations.
The court ruled that as adequate protection, PNC is granted
replacement security interests in and liens on the Debtor's
postpetition property.
PNC is also granted an an allowed superpriority administrative
expense claim as provided for in 11 U.S.C. Section 507(b). The
507(b) Claims will have priority over any and all administrative
expenses, adequate protection claims and other claims against the
Debtor.
A final hearing on the matter is set for December 4, 2023 at 10
a.m.
A copy of the order is available at https://urlcurt.com/u?l=RkqPBK
from PacerMonitor.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 up to $500 million in assets and up to $1 billion
in liabilities.
Judge Michelle M. Harner oversees the case.
YVS LAW, LLC and HOLLAND & KNIGHT LLP represent the Debtor as legal
counsel.
KEEGAN LINSCOTT & ASSOCIATES, PC is the financial and restructuring
advisor and EPIQ CORPORATE RESTRUCTURING LLC is the claims,
noticing, and balloting agent.
ARCHDIOCESE OF BALTIMORE: Victims Want Suit vs. Schools, Parishes
-----------------------------------------------------------------
Lee O. Sanderlin of Baltimore Sun reports a committee representing
clergy abuse survivors is asking a federal bankruptcy judge to
reconsider her order barring lawsuits against Catholic schools and
parishes as part of the Archdiocese of Baltimore’s Chapter 11
bankruptcy.
Parishes and schools are technically not assets of the archdiocese,
despite Archbishop William E. Lori having control over whether they
can be bought or sold, but were granted protection from lawsuits
because the archdiocese insures them.
In early October 2023, U.S. Bankruptcy Judge Michelle Harner issued
an interim injunction on lawsuits against entities covered by
archdiocesan insurance policies (known as covered parties). Harner
determined those policies are assets of the corporation that makes
up the archdiocese, meaning any lawsuit would inevitably draw down
on insurance monies in order to pay legal fees and settlements.
Whenever any entity files for bankruptcy it is automatically
protected from lawsuits so its assets can be preserved to pay
creditors. Sometimes those protections can be extended to third
parties, which in this case has largely meant parishes and
schools.
An unsecured creditor’s committee — a group of seven abuse
victims who represent all victims who will bring claims against the
archdiocese in the bankruptcy process — is asking Harner to
reconsider her decision ahead of a hearing Monday, November 6,
2023, where she could extend the injunction indefinitely until the
bankruptcy case is resolved, which may last several years.
"If an injunction is issued, not only will the waiting and denial
of justice continue against the Debtor, it will prevent Survivors
from see" attorneys for the survivors' committee wrote in a court
filing. "The likelihood that Survivors will die without exercising
their rights will materially increase, their rights to a jury trial
will be impaired, and their cases will be weakened from an
evidentiary perspective."
The Archdiocese of Baltimore filed for bankruptcy two days before a
new state law, the Child Victims Act, went into effect. The filing
was a sort of end-run around the act, which lifted the statute of
limitations on childhood sexual abuse lawsuits and allowed people
whose claims were previously blocked because too much time had
elapsed from when their abuse happened to also bring cases. Church
officials had likely been planning for bankruptcy for some time,
having spent more than $750,000 on attorneys and consultants before
filing, according to court records.
Passage of the Child Victims Act and the bankruptcy filing followed
the release of a Maryland Attorney General's Office report that
detailed eight decades of sexual abuse in the archdiocese,
identifying 156 clergy and lay people who are alleged to have
abused at least 600 children and young adults. The report also
revealed the extent church leaders worked to cover up abuse and, in
some cases, enable it.
Attorneys for the archdiocese argued in court October 3, 2023 that
an injunction for parishes and schools would help preserve assets
for victims when the time comes to reach a final settlement. The
archdiocese has significant assets, including jewels, gold, oil
paintings and property. Altogether, its total assets are listed at
more than $200 million, which is still likely an undercount.
When bankruptcy is resolved, the debtor, which in this case is the
archdiocese, is freed from future liability arising from previous
misconduct. In order for that protection to extend to parishes and
schools, they will have to contribute significant funds to the
settlement, something diocesan lawyers indicated in court last
month would be the case.
Bankruptcy proceedings in other Catholic dioceses — there have
been more than 30 to seek Chapter 11 protections — have largely
followed a similar path.
However, the committee’s filing pointed to two other cases, the
bankruptcies in Rockville Centre and Rochester, New York, where
judges declined to extend the injunction given to the diocese there
to parishes and schools.
Those judges found the dioceses had not proven the insurance trusts
were actually at risk, and, even if they were, the threat of
lawsuits did not mean the entire trust would be depleted. The
committee also argued that the Archdiocese of Baltimore had not
sufficiently identified which insurance policies it was hoping to
protect.
Even if the injunction were to remain, it would not necessarily
prohibit all lawsuits against parishes and schools. If a person was
abused at a parish in a year where the insurance may have lapsed,
or at a Catholic facility that isn’t covered by the larger
diocesan policy, those lawsuits can proceed because they won't
impact the asset pool that will ultimately be used to settle the
bankruptcy claims.
For example, the high-profile Gallagher lawsuit, brought by one of
Baltimore's oldest Catholic families against St. Mary's Seminary
and the Society of the Priests of Saint Sulpice, can continue. That
suit, filed in July 2023, alleges negligence from the archdiocese,
the seminary and the order led to the abuse of Frank Gallagher Jr.,
which later drove him to drug and sex addiction before he overdosed
and died in 2022.
About the Archdiocese of Baltimore
The 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.
The 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: Linda Leali Named Subchapter V Trustee
----------------------------------------------------
The U.S. Trustee for Region 21 appointed Linda Leali, Esq., as
Subchapter V trustee for Ask For Cool Air Conditioning, Inc.
Ms. Leali will be paid an hourly fee of $450 for her services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Ms. Leali declared that she is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Linda M. Leali
Linda M. Leali, P.A.
2525 Ponce De Leon Blvd., Suite 300
Coral Gables, FL 33134
Phone: (305) 341-0671, ext. 1
Fax: (786) 294-6671
Email: leali@lealilaw.com
About Ask For Cool
Ask For Cool Air Conditioning, Inc. filed Chapter 11 Petition
(Bankr. S.D. Fla. Case No. 23-18752) on Oct. 25, 2023, with
$500,001 to $1 million in both assets and liabilities.
Judge Peter D. Russin oversees the case.
Joe M. Grant, Esq., at Lorium Law, PLLC represents the Debtor as
bankruptcy counsel.
B AND C BROTHERS: Further Fine-Tunes Plan Documents
---------------------------------------------------
B and C Bros., LLC, submitted a Third Amended Plan of
Reorganization under Subchapter V dated October 31, 2023.
The Debtor shows that it will have enough cash over the life of the
Plan to make the required Plan payments and operate the debtor's
business.
The final Plan payment is expected to be paid in 2028.
This Plan of Reorganization proposes to pay creditors of the Debtor
from cash flow operations.
Valley Bank is the only secured creditor and did not file a Proof
of Claim. Valley Bank will be paid in full through the plan. Non
priority unsecured creditors holding allowed claims will receive
distributions, which the proponent of this Plan has valued at
approximately 5%. This Plan also provides for the payment of
administrative and priority claims.
Class 3 Non-priority unsecured creditors shall be paid 5% in each
unsecured claim. This Class is impaired.
Class 4 Equity security holders Bill and Chad Davies to retain
their interest in the Reorganized Debtor.
Debtor will fund the Plan from the income from its regular business
operations.
A full-text copy of the Third Amended Subchapter V Plan dated
October 31, 2023 is available at https://urlcurt.com/u?l=3BVsyG
from PacerMonitor.com at no charge.
About B and C Bros.
B and C Bros., LLC, is in the business of operating a commercial
plumbing and heating business with its assets in Bucks County,
Pennsylvania.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D. Pa. Case No. 23-10986-amc) on April
12, 2023. In the petition signed by Bill Davies, managing member,
the Debtor disclosed up to $50,000 in both assets and liabilities.
Attorney for the Debtor:
Maggie S. Soboleski, Esq.
Center City Law Offices, LLC
2705 Bainbridge Street
Philadelphia, PA 19107
BARRETTS MINERALS: Hires David Gordon of DJG Services as CRO
------------------------------------------------------------
Barretts Minerals Inc. seeks approval from the U.S. Bankruptcy
Court for the Southern District of Texas to employ DJG Services,
LLC and appoint David J. Gordon as chief restructuring officer.
Mr. Gordon will render these services:
i. assist in (a) identifying, developing, and implementing
potential strategic alternatives to address the Debtors’ legacy
liabilities, and (b) the development and conduct of one or more
additional business lines;
ii. performing duties typically performed by chief
restructuring officers, including making final decisions as to the
acquisition of any additional properties to be added to the
Debtors’ real estate portfolio business; and
iii. evaluating and implementing strategic alternatives for the
Debtors developed and proposed by the Debtors’ advisors and
assuming responsibility for the overall management thereof.
DJG Services will be paid a fixed monthly fee of $25,000.
DJG Services will also be reimbursed for reasonable out-of-pocket
expenses incurred.
David Gordon, partner of DJG Services, LLC, assured the Court that
the firm is a "disinterested person" as the term is defined in
Section 101(14) of the Bankruptcy Code and does not represent any
interest adverse to the Debtor and its estates.
DJG Services can be reached at:
David J. Gordon
DJG SERVICES, LLC
21 Saint Maxime
Laguna Niguel, CA 92677
Tel: (415) 738-8282
E-mail: dgordon@djoservicesllc.com
About Barretts Minerals
Barretts Minerals Inc. current operations are focused on the
mining, beneficiating, processing, and sale of industrial talc. BMI
historically supplied a relatively minor percentage of its sales
into cosmetic applications. BMI's talc is sold to distributors and
third-party manufacturers for use in such parties' products, which
are then incorporated into downstream products eventually sold to
consumers.
The Debtors sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 23-90794) on Oct.
2, 2023. In the petition signed by David J. Gordon, chief
restructuring officer, the Debtor disclosed up to $100 million in
assets and up to $50 million in liabilities.
Judge David R. Jones oversees the case.
The Debtors tapped Porter Hedges LLP and Latham& Watkins LLP as
legal counsel, M3 Partners, LP as financial advisor, Jefferies LLC
as investment banker, and Stretto, Inc., as claims, noticing, and
solicitation agent and administrative advisor.
BARRETTS MINERALS: Seeks to Hire Jefferies as Investment Banker
---------------------------------------------------------------
Barretts Minerals Inc. seeks approval from the U.S. Bankruptcy
Court for the Southern District of Texas to employ Jefferies LLC as
their investment banker.
The firm will render these services:
(a) Sale Transaction. The Debtors retain and authorize
Jefferies to act as sole and exclusive financial advisor in
connection with a possible sale, disposition or other business
transaction or series of transactions involving all or a material
portion of the equity or assets of the Debtors, whether directly or
indirectly and through any form of transaction, including, without
limitation, merger, reverse merger, liquidation, stock sale, asset
sale, asset swap, recapitalization, reorganization, consolidation,
amalgamation, spin-off, split-off, joint venture, strategic
partnership, license, a sale under section 363 of the Bankruptcy
Code (including any "credit bid" made pursuant to section 363(k) of
the Bankruptcy Code and including under a prepackaged or
pre-negotiated plan of reorganization or other plan pursuant to the
Bankruptcy Code) or other transaction; and
(b) Financing. The Debtors retain and authorize Jefferies,
during the term of this engagement to act as sole and exclusive
financial advisor in connection with any debtor in possession
financing.
The firm will be compensated as follows:
(a) Monthly Fee. A monthly fee equal to $75,000 per month
until the termination of the Engagement Letter. The first Monthly
Fee shall be payable as of the date of the Prior Engagement Letter
(i.e., January 19, 2023), and each subsequent Monthly Fee shall be
payable in advance on each monthly anniversary thereafter.
Additionally, after the payment of three (3) full Monthly Fees to
Jefferies, $75,000 of any Monthly Fee paid to Jefferies thereafter
shall be credited once, without duplication, against any
Transaction Fee subsequently payable to Jefferies. To the extent
the Debtors become subject to any proceedings under the Bankruptcy
Code, any Monthly Fee payable to Jefferies subsequent to the
initiation of any such proceedings shall be equal to $125,000 and
$75,000 of each such Monthly Fee shall be credited once, without
duplication, against any Transaction Fee.
(b) M&A Transaction Fee. Promptly upon the closing of an M&A
Transaction, a fee equal to an amount to be determined according to
the following schedule:
i. 2.00 percent of that portion of the Transaction Value
of such Transaction up to $50 million; plus
ii. An additional 2.75 percent of that portion of the
Transaction Value of such M&A Transaction greater than $50
million.
It is expressly understood that a separate M&A Transaction Fee
shall be payable in respect of each M&A Transaction in the event
that more than one M&A Transaction shall occur. Additionally, any
and all M&A Transaction Fees payable under the Engagement Letter
shall be immediately paid from the proceeds of any such M&A
Transactions in connection with the closing of such M&A
Transactions.
(c) Financing Fee. A fee equal to the greater of $350,000 and
1.25% of any debtor in possession financing raised. The Financing
Fee shall be payable upon the consummation of such Financing. For
the avoidance of doubt, the amount raised in any Financing shall
include all amounts committed, whether or not drawn or funded, in
connection with such Financing.
(d) Additional Fee. If, upon termination of the Engagement
Letter, one or more M&A Transactions have been consummated but the
fees payable on account of such M&A Transactions are less than
$3,500,000, then the Debtors shall pay Jefferies, promptly upon
termination of the Engagement Letter, a fee equal to the difference
between $3,500,000 and M&A Transaction Fees previously paid to
Jefferies on account of such Transactions .
(e) Expenses. In addition to any fees that may be paid to
Jefferies under the Engagement Letter, whether or not any
Transaction occurs, the Debtors will reimburse Jefferies, promptly
upon receipt of an invoice therefor, for all reasonable and
documented out-of-pocket expenses (including (i) reasonable fees
and documented out-of-pocket expenses of its counsel and (ii) the
reasonable fees and documented out-of-pocket expenses of any other
independent experts retained by Jefferies with the consent of the
Debtors (such consent to not be unreasonably withheld or delayed))
incurred by Jefferies and its designated affiliates in connection
with the engagement contemplated under the Engagement Letter.
Leon Szlezinger, a managing director at Jefferies, 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:
Leon Szlezinger
JEFFERIES LLC
520 Madison Avenue
New York, NY 10022
Telephone: (212) 284-2300
About Barretts Minerals
Barretts Minerals Inc. current operations are focused on the
mining, beneficiating, processing, and sale of industrial talc. BMI
historically supplied a relatively minor percentage of its sales
into cosmetic applications. BMI's talc is sold to distributors and
third-party manufacturers for use in such parties' products, which
are then incorporated into downstream products eventually sold to
consumers.
The Debtors sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 23-90794) on Oct.
2, 2023. In the petition signed by David J. Gordon, chief
restructuring officer, the Debtor disclosed up to $100 million in
assets and up to $50 million in liabilities.
Judge David R. Jones oversees the case.
The Debtors tapped Porter Hedges LLP and Latham& Watkins LLP as
legal counsel, M3 Partners, LP as financial advisor, Jefferies LLC
as investment banker, and Stretto, Inc., as claims, noticing, and
solicitation agent and administrative advisor.
BARRETTS MINERALS: Seeks to Hire M3 Advisory as Financial Advisor
-----------------------------------------------------------------
Barretts Minerals Inc. seeks approval from the U.S. Bankruptcy
Court for the Southern District of Texas to employ M3 Advisory
Partners, LP as financial advisor.
The firm will render these services:
a) supervise, and if necessary, assist the Debtors in the
development and administration of their short-term cash flow
forecasting and related methodologies, as well as their cash
management planning;
b) provide such assistance as reasonably may be required by
management of the Debtors in connection with (i) development of
their business plan, (ii) any restructuring plans and strategic
alternatives intended to maximize the Debtors' enterprise value,
and (iii) any related forecasts that may be required by creditor
constituencies in connection with negotiations or by the Debtors
for other corporate purposes;
c) supervise, and if necessary, assist the professionals who
are representing the Debtors in the restructuring process or who
are working for the Debtors' various stakeholders to coordinate
their effort and individual work product in order to be consistent
with the Debtors' overall restructuring goals;
d) assist, if required, the Debtors in communications and
negotiations with their outside constituents, including creditors,
trade vendors, and their respective advisors; and
e) provide such other services as are reasonable and customary
in connection with an engagement of this nature or as M3 and the
Debtors shall otherwise agree in writing.
The firm will be paid at these rates:
Managing Partner $1,350 per hour
Senior Managing Director $1,245 per hour
Managing Director $1,025 to $1,150 per hour
Director $840 to $945 per hour
Vice President $750 per hour
Senior Associate $650 per hour
Associate $550 per hour
Analyst $450 per hour
The firm received an initial retainer in the amount of $300,000.
The firm will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Brian Griffith, managing director at M3 Advisory Partners, LP,
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:
Brian J. Griffith
M3 Advisory Partners, LP
1700 Broadway, 19th Floor
New York, NY 10019
Phone: (212) 202-2200
Email: bgriffith@m3-partners.com
About Barretts Minerals
Barretts Minerals Inc. current operations are focused on the
mining, beneficiating, processing, and sale of industrial talc. BMI
historically supplied a relatively minor percentage of its sales
into cosmetic applications. BMI's talc is sold to distributors and
third-party manufacturers for use in such parties' products, which
are then incorporated into downstream products eventually sold to
consumers.
The Debtors sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 23-90794) on Oct.
2, 2023. In the petition signed by David J. Gordon, chief
restructuring officer, the Debtor disclosed up to $100 million in
assets and up to $50 million in liabilities.
Judge David R. Jones oversees the case.
The Debtors tapped Porter Hedges LLP and Latham& Watkins LLP as
legal counsel, M3 Partners, LP as financial advisor, Jefferies LLC
as investment banker, and Stretto, Inc., as claims, noticing, and
solicitation agent and administrative advisor.
BARRETTS MINERALS: Seeks to Hire Ordinary Course Professionals
--------------------------------------------------------------
Barretts Minerals Inc. seeks approval from the U.S. Bankruptcy
Court for the Southern District of Texas to hire professionals
utilized in the ordinary course of business.
The OCPs provide services to the Debtors in a variety of matters
unrelated to the Chapter 11 Cases, including specialized legal
advice, accounting and tax services, and certain business advisory
and other consulting services.
The OCPs include:
-- Capes Sokol Goodman and Sarachan PC
Legal Counsel (Talc Litigation)
Monthly Cap: Monthly Cap: $100,000
-- Renzulli Law Firm LLP
Legal Counsel (Talc Litigation)
Monthly Cap: $75,000
-- Tucker Ellis LLP
Legal Counsel (Talc Litigation)
Monthly Cap: $75,000
-- Kirkland and Ellis LLP
Legal Counsel (Talc Litigation)
Monthly Cap: $70,000
-- The Levinson Group
Public Relations
Monthly Cap: $63,750
-- Buchalter a Professional Corporation
Legal Counsel (Talc Litigation)
Monthly Cap: $50,000
-- Richards Layton and Finger PA
Legal Counsel (Talc Related – General)
Monthly Cap: $30,000
-- Bradley Arant Boult Cummings LLP
Legal Counsel (Talc Litigation)
Monthly Cap: $30,000
-- Dorsey & Whitney LLP
Legal Counsel (Montana Local Counsel)
Monthly Cap: $30,000
-- Eckert Seamans Cherin & Mellott, LLC
Legal Counsel (Real Estate)
Monthly Cap: $30,000
-- Energy Laboratories Inc.
Environmental Consultant
Monthly Cap: $30,000
-- Manning Gross + Massenburg LLP
Legal Counsel (Talc Litigation)
Monthly Cap: $30,000
-- Mcelroy, Deutsch, Mulvaney and Carpenter, LLP
Legal Counsel (Talc Litigation)
Monthly Cap: $30,000
-- Meagher + Geer PLLP
Legal Counsel (Talc Litigation)
Monthly Cap: $30,000
-- Nelson Mullins Riley & Scarborough LLP
Legal Counsel (Talc Litigation)
Monthly Cap: $30,000
-- R and M Consulting LLC
Tax Advisory
Monthly Cap: $30,000
-- Water & Environmental Technologies
Environmental Consultant
Monthly Cap: $30,000
-- White Mountain Mining LLC
Mining Consultant
Monthly Cap: $30,000
-- Squire Patton Boggs
Legal Counsel (Employment)
Monthly Cap: $20,000
-- Adler, Cohen, Harvey, Wakeman and Guekguezian, LLP
Legal Counsel (Talc Litigation)
Monthly Cap: $15,000
-- Dinsmore & Shohl LLP
Legal Counsel (Talc Litigation)
Monthly Cap: $15,000
-- Eversheds Sutherland
Legal Counsel (Benefits)
Monthly Cap: $15,000
-- FTI Consulting
Consultant
Monthly Cap: $15,000
-- Hinkle Shanor LLP
Legal Counsel (Talc Litigation)
Monthly Cap: $15,000
-- Irwin Fritchie Urquhart Moore & Daniels LLC
Legal Counsel (Talc Litigation)
Monthly Cap: $15,000
-- Kelley Jasons McGowan Spinelli Hanna & Reber LLP
Legal Counsel (Talc Litigation)
Monthly Cap: $15,000
-- Larson King, LLP
Legal Counsel (Talc Litigation)
Monthly Cap: $15,000
-- Perkins Coie LLP
Legal Counsel (Regulatory)
Monthly Cap: $15,000
-- Redgrave LLP
Litigation Discovery
Monthly Cap: $15,000
-- Redgrave Strategic Data Solutions LLC
Litigation Discovery
Monthly Cap: $15,000
-- Stites & Harbison, PLLC
Legal Counsel (Talc Litigation)
Monthly Cap: $15,000
-- KPMG
Auditor
Shared Services Agreement
About Barretts Minerals
Barretts Minerals Inc. current operations are focused on the
mining, beneficiating, processing, and sale of industrial talc. BMI
historically supplied a relatively minor percentage of its sales
into cosmetic applications. BMI's talc is sold to distributors and
third-party manufacturers for use in such parties' products, which
are then incorporated into downstream products eventually sold to
consumers.
The Debtors sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 23-90794) on Oct.
2, 2023. In the petition signed by David J. Gordon, chief
restructuring officer, the Debtor disclosed up to $100 million in
assets and up to $50 million in liabilities.
Judge David R. Jones oversees the case.
The Debtors tapped Porter Hedges LLP and Latham& Watkins LLP as
legal counsel, M3 Partners, LP as financial advisor, Jefferies LLC
as investment banker, and Stretto, Inc., as claims, noticing, and
solicitation agent and administrative advisor.
BARRETTS MINERALS: Seeks to Hire Porter Hedges as Co-Counsel
------------------------------------------------------------
Barretts Minerals Inc. and its affiliates seek approval from the
U.S. Bankruptcy Court for the Southern District of Texas to hire
Porter Hedges LLP as co-counsel.
The firm will render these services:
a. provide legal advice and services regarding local rules,
practices, and procedures;
b. provide certain services in connection with administration
of the chapter 11 cases, including, without limitation, preparing
agendas, hearing notices and hearing binders of documents and
pleadings;
c. review and comment on proposed drafts of pleadings to be
filed with the Court as bankruptcy co-counsel to the Debtors;
d. provide legal advice with respect to the Debtors' rights
and duties as debtors in possession and continued business
operations;
e. assist, advise and represent the Debtors in analyzing the
Debtors' capital structure, investigating the extent and validity
of liens, cash collateral stipulations or contested matters;
f. assist, advise and represent the Debtors in any cash
collateral and/or postpetition financing transactions;
g. assist, advise and represent the Debtors in the preparation
of sale and bid procedures to auction the Debtors' assets;
h. assist, advise and represent the Debtors in any manner
relevant to preserving and protecting the Debtors' estates;
i. prepare on behalf of the Debtors all necessary
applications, motions, answers, orders, reports, and other legal
papers;
j. appear in Court and to protect the Debtors' interests
before the Court;
k. at the request of the Debtors, 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 co-counsel;
and
l. provide other legal advice and services, as requested by
the Debtors, from time to time.
The firm will be paid at these rates:
Partners $500 to $1,000 per hour
Counsels $475 to $900 per hour
Associates $395 to $775 per hour
Paraprofessionals $300 to $445 per hour
In addition, the firm will receive reimbursement for its
out-of-pocket expenses.
Porter Hedges received a retainer in the amount of $150,000.
The following is provided in response to the request for additional
information set forth in Paragraph D.1 of the Fee Guidelines:
Question: Did you agree to any variations from, or alternatives
to, your standard or customary billing arrangements for this
engagement?
Response: Except as otherwise set forth in the Engagement
Letter, the firm has not agreed to any variations from, or
alternatives to, its standard billing arrangements for this
engagement.
Question: Do any of the professionals included in this
engagement vary their rate based on the geographic location of the
bankruptcy case?
Response: No.
Question: If you represented the client in the 12 months
prepetition, disclose your billing rates and material financial
terms for the prepetition engagement, including any adjustments or
discounts offered during the 12 months prepetition. If your billing
rates and material financial terms have changed postpetition,
explain the difference and the reasons for the difference.
Response: Porter Higgins was retained in September 2023 and
there have been no postpetition changes in rates. The firm's rates
for timekeepers for its prepetition engagement on this matter were,
for the period of Sep. 19, 2023 to Oct. 2, 2023, from $500 to
$1,000 for partners, $475 to $900 for counsel, $395 to $775 for
associates and staff attorneys, and $300 to $445 for
paraprofessionals.
John Higgins, Esq., a partner at Porter Hedges, disclosed in a
court filing that his firm is a "disinterested person" as the term
is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
John F Higgins, IV, Esq.
Porter Hedges LLP
1000 Main St., 36th Floor
Houston, TX 77002
Telephone: (713) 226-6648
Facsimile: (713) 226-6248
Email: jhiggins@porterhedges.com
About Barretts Minerals
Barretts Minerals Inc. current operations are focused on the
mining, beneficiating, processing, and sale of industrial talc. BMI
historically supplied a relatively minor percentage of its sales
into cosmetic applications. BMI's talc is sold to distributors and
third-party manufacturers for use in such parties' products, which
are then incorporated into downstream products eventually sold to
consumers.
The Debtors sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 23-90794) on Oct.
2, 2023. In the petition signed by David J. Gordon, chief
restructuring officer, the Debtor disclosed up to $100 million in
assets and up to $50 million in liabilities.
Judge David R. Jones oversees the case.
The Debtors tapped Porter Hedges LLP and Latham& Watkins LLP as
legal counsel, M3 Partners, LP as financial advisor, Jefferies LLC
as investment banker, and Stretto, Inc., as claims, noticing, and
solicitation agent and administrative advisor.
BARRETTS MINERALS: Taps Latham & Watkins as Bankruptcy Co-Counsel
-----------------------------------------------------------------
Barretts Minerals Inc. seeks approval from the U.S. Bankruptcy
Court for the Southern District of Texas to employ Latham & Watkins
LLP as bankruptcy co-counsel.
The firm will render these services:
a. advise the Debtors in connection with their restructuring
activities regarding negotiations, litigation, and settlement with
creditors and other interested parties to the restructuring;
b. advise the Debtors with respect to finance and corporate
transactions (including one or more asset sales);
c. review of documents;
d. prepare agreements;
e. review and prepare pleadings;
f. court appearances; and
g. all other necessary legal services for the Debtors in
connection with the Chapter 11 Cases.
The firm will be paid at these rates:
Partners $1,360 to $2,230 per hour
Counsel $1,300 to $1,690 per hour
Associates $705 to $1,400 per hour
Professional Staff $210 to $1,050 per hour
Paralegals $300 to $660 per hour
The firm will also be reimbursed for reasonable out-of-pocket
expenses incurred.
The following is provided in response to the request for additional
information set forth in Paragraph D.1 of the U.S. Trustee
Guidelines:
a. Question: Did Latham & Watkins agree to any variations from,
or alternatives to, Latham & Watkins's standard billing
arrangements for this engagement?
Answer: No. The rate structure provided by Latham & Watkins
is appropriate and comparable to (a) the rates that Latham &
Watkins charges for this type of engagement and (b) the rates of
other comparably skilled professionals.
b. Question: Do any of the Latham & Watkins professionals in
this engagement vary their rate based on the geographic location of
the Debtors' Chapter 11 Cases?
Answer: No.
c. Question: If Latham & Watkins has represented the Debtors in
the 12 months prepetition, disclose Latham & Watkins's billing
rates and material financial terms for the prepetition engagement,
including any adjustments during the 12 months prepetition. If
Latham & Watkins's billing rates and material financial terms have
changed postpetition, explain the difference and the reasons for
the difference.
Answer: Latham & Watkins's current hourly rates for services
rendered on behalf of the Debtors are set forth above. These rates
have been used since July of this year. Latham & Watkins used the
following rates for services rendered in 2022 through June 2023:
$1,265 - $2,075 for partners; $1,210 - $1,720 for counsel; $655 -
$1,300 for associates; $270 - $600 for paraprofessionals. All
material financial terms have remained unchanged since the
prepetition period.
Jeffrey Bjork, Esq., a partner at Latham & Watkins 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:
Jeffrey E. Bjork, Esq.
Latham & Watkins LLP
355 South Grand Avenue, Suite 100
Los Angeles, CA 90071
Phone: (213) 485-1234
Email: jeff.bjork@lw.com
About Barretts Minerals
Barretts Minerals Inc. current operations are focused on the
mining, beneficiating, processing, and sale of industrial talc. BMI
historically supplied a relatively minor percentage of its sales
into cosmetic applications. BMI's talc is sold to distributors and
third-party manufacturers for use in such parties' products, which
are then incorporated into downstream products eventually sold to
consumers.
The Debtors sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 23-90794) on Oct.
2, 2023. In the petition signed by David J. Gordon, chief
restructuring officer, the Debtor disclosed up to $100 million in
assets and up to $50 million in liabilities.
Judge David R. Jones oversees the case.
The Debtors tapped Porter Hedges LLP and Latham& Watkins LLP as
legal counsel, M3 Partners, LP as financial advisor, Jefferies LLC
as investment banker, and Stretto, Inc., as claims, noticing, and
solicitation agent and administrative advisor.
BASIC WATER: Court Approves Disclosures, Sale to Precision
----------------------------------------------------------
Judge Mike K. Nakagawa on Oct. 20, 2023, entered an order that
pursuant to Section 1125 of the Bankruptcy Code, the Disclosure
Statement of Basic Water Company is approved on a final basis.
As part of the relief sought in the First Amended Joint Plan of
Reorganization dated August 25, 2023, the Court on Nov. 6, 2023,
entered an order approving the sale of the Debtors' assets to
Precision Castparts Corp. or its wholly owned designee, Henderson
WC, LLC.
Reorganization Plan
Basic Water Company and Basic Water Company SPE 1, LLC, filed with
the U.S. Bankruptcy Court for the District of Nevada a Disclosure
Statement for the Joint Plan of Reorganization dated July 10,
2023.
From the 1950s until shortly before the Petition Date, the Debtors
and their predecessors drew Colorado River water from Lake Mead and
transported it across approximately 16.6 miles of pipeline for
delivery, the City of Henderson, Nevada and certain industrial
plants in what is now known as the Black Mountain Industrial
Complex in eastern Henderson, Nevada.
The industrial plants (the "Industries") currently consist of
Titanium Metals Corporation ("TIMET"), a subsidiary of the Buyer,
EMD Acquisition LLC dba Borman Specialty Materials ("Borman"),
Lhoist North America of Arizona, Inc. ("Lhoist"), and Pioneer
Americas LLC dba Olin Chlor Alkali Products ("Olin").
Due to the unique and complex nature of the Debtors' assets and the
contracts involved in the operation of the Water System and
delivery of water, the Debtors have long sought to complete a sale
of their assets to a party seeking a comprehensive solution to the
Industries' water delivery problem. When those efforts did not bear
fruit during the first months of the Chapter 11 Cases, the Debtors
filed their motion for approval of bidding procedures and an
auction process without a stalking horse bid on December 16, 2022.
The Debtors negotiated with Precision Castparts Corp. (the "Buyer")
for the purchase and sale of all of the Debtors' assets. On May 25,
2023, the Debtors entered into the following purchase agreements
(collectively, the "Purchase Agreements") with the Buyer: (i)
Purchase and Sale Agreement & Escrow Instructions for the sale of
real property assets (as may be amended, supplemented, or modified,
the "Real Estate Purchase Agreement"); and (ii) Purchase and Sale
Agreement & Escrow Instructions for the sale of non-real property
assets (as may be amended, supplemented, or modified, the "Water
System Purchase Agreement").
The Purchase Agreements proposed to sell all of the Debtors' Assets
to the Buyer, including the Real Property and the Water System,
free and clear of all liens, claims, encumbrances and interests,
for a total purchase price of: (i) $8 million in cash; and (ii) the
Debtors' receiving releases of claims from the Industries under the
Industry Water Delivery Contracts (collectively, the "Purchase
Price"). In turn, the Buyer will be entering into new water
delivery contracts with the Industries.
On June 16, 2023, the Debtors filed their Motion to Approve Sale of
Assets Free and Clear of Liens, Claims, Interests and Encumbrances
and Assumption and Assignment of Executory Contracts (the "Sale
Motion") to obtain Court approval of the Purchase Agreements and
the sale of Assets to the Buyer. The Sale Motion is currently set
for hearing on July 17, 2023.
The Debtors focused on developing and executing a reorganization
strategy to: (a) maximize the value of their Estates; (b) address
the factors that led to the bankruptcy filing; and (c) allow the
Debtors to sell their Assets for the highest and best value in
order to maximize distributions to creditors and parties-in
interest. The Debtors believe the sale of the Assets to the Buyer
for the Purchase Price is the highest and best value, and will
distribute the resulting proceeds.
Class 3(a) consists of General Unsecured Claims Against BWC. On or
as soon as practicable following the Plan Effective Date, each
holder of an Allowed Class 3(a) General Unsecured Claim against BWC
shall receive its pro rata portion of the Net Sale Proceeds from
the Sale of the Debtors' Assets in full satisfaction of its Allowed
Class 3(a) General Unsecured Claim against BWC. The allowed
unsecured claims total $2,183,073.00. This Class is impaired.
Class 3(b) consists of General Unsecured Claims Against SPE. On or
as soon as practicable following the Plan Effective Date, each
holder of an Allowed Class 3(b) General Unsecured Claim against SPE
shall receive its pro rata portion of the Net Sale Proceeds from
the Sale of the Debtors' Assets in full satisfaction of its Allowed
Class 3(b) General Unsecured Claim against SPE The allowed
unsecured claims total $727,552.00. This Class is impaired.
All existing Equity Interests in BWC shall be retained and holders
of such Equity Interests in BWC shall receive their pro rata
portion of the New Equity Interests in the Reorganized BWC.
All existing Equity Interests in SPE shall be retained and holders
of such Equity Interests in SPE shall receive their pro rata
portion of the New Equity Interests in the Reorganized SPE.
As discussed in detail in Section III(E) of the Disclosure
Statement and as described in Article V, Section B pursuant to
sections 1123 and 1124 of the Bankruptcy Code and Bankruptcy Rule
9019, and in consideration for the classification, Distributions,
and other benefits provided under the Plan, and as a result of
arms' length negotiations among the Debtors and their creditors,
upon the Effective Date, the provisions of the Plan shall
constitute a good faith compromise and settlement of all Claims and
Equity Interests and controversies resolved pursuant to the Plan.
Solely to the extent otherwise necessary, Confirmation of the Plan
also cures defaults under all prepetition contracts paid or
maintained pursuant to this Plan, in accordance with section 1124
of the Bankruptcy Code.
A full-text copy of the Disclosure Statement dated July 10, 2023 is
available at https://urlcurt.com/u?l=QNPtrB from Stretto, Inc.,
claims agent.
Attorneys for the Debtors:
Samuel A. Schwartz, Esq.
Gabrielle A. Hamm, Esq.
Schwartz Law, PLLC
601 East Bridger Avenue
Las Vegas, NV 89101
Tel: 702-385-5544
Fax: 702-201-1330
Email: saschwartz@nvfirm.com
ghamm@nvfirm.com
About Basic Water Company
Basic Water Company, a water utility company in Nevada, and
affiliate Basic Water Company SPE 1, LLC sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Nev. Lead Case
No. 22-13252) on Sept. 10, 2022. In their petitions, Basic Water
Company listed $10 million to $50 million in assets and $1 million
to $10 million in liabilities while SPE 1 listed as much as $50
million in both assets and liabilities. Stephanne A. Zimmerman,
president, signed the petitions.
Judge Mike K. Nakagawa oversees the cases.
The Debtors tapped Samuel A. Schwartz, Esq. at Schwartz Law, PLLC,
as legal counsel, and Force 10 Partners, LLC as financial advisor.
Stretto, Inc., is the claims, noticing and solicitation agent.
BELA FLOR: Bid to Obtain DIP Loan Denied
----------------------------------------
The U.S. Bankruptcy Court for the Northern District of Texas, Fort
Worth Division, denied the second motion filed by Bela Flor
Nurseries, Inc. and affiliates for a final order authorizing entry
into a postpetition financing agreement.
The Court considered the pleadings and briefs filed by the Debtors,
the Official Committee of Unsecured Creditors, Serene Investment
Management, LLC, Agrifund, LLC, Guaranty Bank, Ag Credit,
Agricultural Credit Association, a/k/a/ Ag Credit, Capital Farm
Credit FLCA, and Texas Bank.
Pursuant to the Court's Findings of Fact and Conclusions of Law,
the Court found that the Second Motion should be denied.
The Debtors were previously permitted to obtain post-petition
financing of $1.5 million on an interim basis from Serene
Investment Management, LLC. The DIP lender has committed to provide
up to $5 million in loans on a final basis.
A copy of the order is available at https://urlcurt.com/u?l=zoCVcu
from PacerMonitor.com.
About Bela Flor Nurseries, Inc.
Bela Flor Nurseries, Inc. operates in the horticulture and retail
gardening industry. The Company currently grows from seed and
cutting annual flowers, vegetables, bulbs, and floral items for
wholesalers, landscapers and retailers.
Bela Flor Nurseries, Inc., and several affiliates sought protection
under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Tex. Lead
Case No. 23-42469) on August 22, 2023. In the petition signed by
Mark Shapiro, chief restructuring officer, Bela Flor disclosed up
to $50 million in both assets and liabilities.
Bela Flor Nurseries is the operating company and SMB Holdings, LLC,
is the primary real estate holding company. MFAF Holdings, LLC, and
CHIC Holdings, LLC are wholly owned subsidiaries of SMB Holding,
LLC. SMB Holdings, LLC, owns several greenhouses located in Austin,
Texas, Carthage, Missouri, and Jasper, Missouri; small lots in
Henderson, Texas; and two corporate houses in Harrisonville,
Missouri. MFAF Holdings, LLC, holds two parcels of land in
Harrisonville, Missouri. CHIC Holdings, LLC, holds parcels of land
located in Henderson, Texas. On the real property, the Debtors own
and operate several nurseries.
Judge Mark X. Mullin oversees the cases.
Buffey E. Klein, Esq., at Husch Blackwell, LLP, represents the
Debtor as legal counsel. B. Riley Advisory Services is the
Debtor's chief restructuring officer.
Serene Investment Management, LLC, as DIP Lender, is represented by
Vadim J. Rubinstein, Esq. at Loeb & Loeb LLP.
BENITAGO INC: Committee Taps Dechert LLP as Bankruptcy Counsel
--------------------------------------------------------------
The official committee of unsecured creditors of Benitago Inc.
seeks approval from the U.S. Bankruptcy Court for the Southern
District of New York to hire Dechert LLP as its counsel.
The Committee requires Dechert LLP to:
a) participate in in-person and telephonic meetings of the
Committee and subcommittees formed thereby, and otherwise advise
the Committee with respect to its rights, powers and duties in
these Chapter 11 Cases;
b) assist and advise the Committee in its meetings and
negotiations with the Debtors and other parties in interest
regarding the administration of these Chapter 11 Cases;
c) assist the Committee in analyzing claims asserted against,
and interests in, the Debtors, and in negotiating with the holders
of such claims and interests and bringing, or participating in,
objections or estimation proceedings with respect to such claims
and interests;
d) assist with the Committee's review of the Debtors'
Schedules of Assets and Liabilities, Statement of Financial Affairs
and other financial reports prepared by the Debtors, and the
Committee's investigation of the acts, conduct, assets, liabilities
and financial condition of the Debtors and their insiders and of
the historic and ongoing operation of their businesses;
e) assist the Committee in its analysis of, and negotiations
with the Debtors or any third party related to, financing, asset
disposition transactions, compromises of controversies, assumption
and rejection of executory contracts and unexpired leases;
f) assist the Committee in its analysis of, and negotiations
with the Debtors or any third party related to, the formulation,
confirmation and implementation of a chapter 11 plan(s) and all
documentation related thereto;
g) assist and advise the Committee with respect to its
communications with the general creditor body regarding significant
matters in these cases;
h) respond to inquiries from individual creditors as to the
status of, and developments in, these Chapter 11 Cases;
i) represent the Committee at hearings and other proceedings
before the Court and such other courts or tribunals, as
appropriate;
j) review and analyze complaints, motions, applications,
orders and other pleadings filed with the Court, and advise the
Committee with respect to its positions thereon and the filing of
any responses thereto;
k) assist the Committee in its review and analysis of, and
negotiations with the Debtors and non-Debtor affiliates related to,
intercompany transactions and claims;
l) review and analyze third party analyses or reports prepared
in connection with potential claims of the Debtors, advise the
Committee with respect to its positions thereon, and perform such
other diligence and independent analysis as may be requested by the
Committee;
m) assist the Committee in preparing pleadings and
applications, and pursuing or participating in adversary
proceedings, contested matters and administrative proceedings as
may be necessary or appropriate in furtherance of the Committee's
duties, interests, and objectives;
n) assist and advise the Committee with respect to applicable
foreign proceedings that may arise in the course of these Chapter
11 Cases; and
o) perform such other legal services as may be necessary or as
may be requested by the Committee in accordance with the
Committee's powers and duties as set forth in the Bankruptcy Code.
The hourly rates charged by Dechert are:
Partners $1,175 - $2,000
Counsel $1,175 - $1,375
Associates $680 - $1,210
Paraprofessionals $240 - $525
Douglas Mannal, partner of the law firm Dechert LLP, attests that
the firm is a "disinterested person" as that term is defined in
Bankruptcy Code section 101(14), and neither represents nor holds
an interest adverse to the interests of the Committee, the Debtors,
or their estates with respect to the matters on which it is to be
employed.
In accordance with Appendix B-Guidelines for Reviewing Applications
for Compensation and Reimbursement of Expenses Filed under 11
U.S.C. Sec. 330 for Attorneys in Larger Chapter 11 Cases, Mr.
Mannal disclosed that:
-- it has not agreed to any variations from, or alternatives
to, its standard or customary billing arrangements for this
engagement;
-- none of the professionals included in the engagement vary
their rate based on the geographic location of the bankruptcy
case;
-- the firm has not represented the Committee in the 12 months
prepetition; and
-- Dechert expects to work with the Committee to develop a
prospective budget and staffing plan.
The counsel can be reached through:
Douglas Mannal, Esq.
DECHERT LLP
Three Bryant Park
1095 Avenue of the Americas
New York, NY 10036-6797
Phone: +1 212 698 3832
Fax: +1 212 698 3599
Email: douglas.mannal@dechert.com
About Benitago Inc.
Benitago Inc. operates an e-commerce aggregator platform intended
to create, acquire and grow businesses.
Benitago Inc. sought relief under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. S.D.N.Y. Lead Case No. 23-11394) on August 30, 2023.
In the petition filed by Thomas Studebaker, as chief restructuring
officer, the Debtor reports estimated assets and liabilities (on a
consolidated basis) between $50 million and $100 million.
Benitago Inc. is a New York-based company, which operates an
e-commerce aggregator platform intended to create, acquire and grow
businesses.
Benitago and affiliates sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. S.D. N.Y. Lead Case No. 23-11394) on
Aug. 30, 2023. In the petition signed by its chief restructuring
officer, Thomas Studebaker, Benitago disclosed $50 million to $100
million in both assets and liabilities.
Judge Sean H. Lane oversees the cases.
Kyle J. Ortiz, Esq., at Togut Segal & Segal LLP, is the Debtors'
legal counsel. The Debtors tapped Portage Point Partners as
financial advisor and Stretto Inc. as notice, claims, and balloting
agent.
BENITAGO INC: Committee Taps Province LLC as Financial Advisor
--------------------------------------------------------------
The official committee of unsecured creditors of Benitago Inc.
seeks approval from the U.S. Bankruptcy Court for the Southern
District of New York to hire Province, LLC as its financial
advisor.
The firm's services include:
(a) becoming familiar with and analyzing the Debtors' budget,
assets and liabilities, and overall financial condition;
(b) reviewing financial and operational information furnished
by the Debtors;
(c) analyzing the Debtors' proposed retentions of
professionals and reporting to the Committee as necessary;
(d) analyzing the Debtors' proposed business plan and
developing alternative scenarios, if necessary;
(e) assessing the Debtors' various pleadings and proposed
treatment of unsecured creditor claims therefrom;
(f) preparing, or reviewing as applicable, avoidance action
and claim analyses;
(g) assisting the Committee in reviewing the Debtors'
financial reports, including, but not limited to, statements of
financial affairs, schedules of assets and liabilities, and monthly
operating reports;
(h) advising the Committee on the current state of these
chapter 11 cases;
(i) advising the Committee in negotiations with the Debtors
and third parties as necessary;
(j) if necessary, participating as a witness in hearings
before the Court with respect to matters upon which Province has
provided advice; and
(k) other activities as are approved by the Committee, the
Committee's counsel, and as agreed to by Province.
The firm will be paid at these rates:
Managing Directors and Principals $860 to $1,350 per hour
Vice Presidents, Directors,
and Senior Directors $580 to $950 per hour
Analysts, Associates, and
Senior Associates $300 to $650 per hour
Other/Para-Professional $220 to $300 per hour
The firm will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Sanjuro Kietlinski, a principal at Province, 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:
Sanjuro Kietlinski
Province, LLC
2360 Corporate Circle, Suite 340
Henderson, NV 89074
Telephone: (702) 685-5555
Email: skietlinski@provincefirm.com
About Benitago Inc.
Benitago Inc. operates an e-commerce aggregator platform intended
to create, acquire and grow businesses.
Benitago Inc. sought relief under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. S.D.N.Y. Lead Case No. 23-11394) on August 30, 2023.
In the petition filed by Thomas Studebaker, as chief restructuring
officer, the Debtor reports estimated assets and liabilities (on a
consolidated basis) between $50 million and $100 million.
Benitago Inc. is a New York-based company, which operates an
e-commerce aggregator platform intended to create, acquire and grow
businesses.
Benitago and affiliates sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. S.D. N.Y. Lead Case No. 23-11394) on
Aug. 30, 2023. In the petition signed by its chief restructuring
officer, Thomas Studebaker, Benitago disclosed $50 million to $100
million in both assets and liabilities.
Judge Sean H. Lane oversees the cases.
Kyle J. Ortiz, Esq., at Togut Segal & Segal LLP, is the Debtors'
legal counsel. The Debtors tapped Portage Point Partners as
financial advisor and Stretto Inc. as notice, claims, and balloting
agent.
BIOTRICITY INC: Issues $1 Million Unsecured Note to Investor
------------------------------------------------------------
Biotricity Inc. disclosed in a Current Report on Form 8-K filed
with the Securities and Exchange Commission that it entered into a
subscription agreement pursuant to which the Company issued an
unsecured convertible preferred note in the principal amount of
$1,000,000 to an investor. The Note bears interest at a rate of
12% per annum, paid in cash monthly. The Note matures on the
earlier of 18 months or there is more than one closing pursuant to
the subscription agreement by the Company, the 18 month anniversary
of the last closing date of the offering.
The Note and accrued interest may be prepaid by the Company in
whole or in part in cash or through a conversion by the Investor at
a price that is equal to a 15% discount to the 10-day VWAP. The
Investor may at its option, convert all of the outstanding balance
and accrued interest on the Note, at any time subsequent to a
Qualified Financing consumed through earlier of the Early Payout
Date or the Maturity Date, as such terms as defined in the Note, at
a conversion price equal to a 20% discount to the lesser of (i) the
actual price per securities issued in the Qualified Financing or
(ii) if there is no Qualified Financing as of the Maturity Date, by
mutual consent and election of the Company and the Investor, at a
15% discount to the average VWAP for 10 consecutive trading days
immediately prior to the Maturity Date.
The Note includes standard Events of Default, including, but not
limited to: (i) failure to issue and deliver shares upon
conversion, (ii) default in the payment of principal or interest,
when same is due, (iii) the entry of a decree or order adjudging
the Company as bankrupt or insolvent; or approving as properly
filed a petition seeking reorganization, arrangement, adjustment or
composition of or in respect of the Company, or appointing a
receiver, liquidator, assignee, trustee or sequestrator (or other
similar official) of the Company or of any substantial part of its
property, or ordering the winding-up or liquidation of its affairs,
and the continuance of any such decree or order unstayed and in
effect for a period of 60 days; or (iv) institution by the Company
of proceedings to be adjudicated as bankrupt or insolvent, or the
consent by it to the institution of bankruptcy or insolvency
proceedings against it, or the filing by it of a petition or answer
or consent seeking reorganization or relief under the Federal
Bankruptcy Code or any other applicable federal or state law.
The Note was issued and sold in reliance on exemption from
registration afforded by Section 4(a)(2) of the Securities Act of
1933, as amended.
About Biotricity
Headquartered in Redwood City, CA, Biotricity Inc. is a medical
technology company focused on biometric data monitoring and
diagnostic solutions. The Company's aim is to deliver remote
monitoring solutions to the medical, healthcare, and consumer
markets, with a focus on diagnostic and post-diagnostic solutions
for lifestyle and chronic illnesses.
Richmond Hill, Ontario, Canada-based SRCO Professional Corporation,
the Company's auditor since 2015, issued a "going concern"
qualification in its report dated June 29, 2023, citing that the
Company has incurred recurring losses from operations, has negative
cash flows from operating activities, working capital deficiency
and has an accumulated deficit that raise substantial doubt about
its ability to continue as a going concern.
BITTREX INC: Gets Court Okay for Chapter 11 Plan
------------------------------------------------
Investing.com reports that Bittrex, a cryptocurrency exchange, has
obtained court approval for its revised bankruptcy plan under
Chapter 11, enabling it to wind down its U.S. operations and settle
debts with creditors. The approval was granted by Judge Brendan
Shannon, following a charge from the Securities and Exchange
Commission (SEC) for operating an unregistered exchange. The issue
was resolved through a $24 million settlement in August 2023.
The SEC charge and subsequent settlement led to a significant
decrease in Bittrex's market share. According to data from The
Block, Bittrex commanded nearly 23% of USD support market share at
the start of 2018. However, by 2021, the company's market share had
fallen below 1%, with no signs of recovery.
Despite the challenges faced by Bittrex in the U.S., its
international operations continue under the banner of Bittrex
Global. Led by CEO Oliver Linch, Bittrex Global operates as a
non-U.S. regulated digital assets exchange, catering to clients
concerned about U.S. regulatory issues.
About Bittrex Inc.
Bittrex is a regulated digital assets exchange platform.
Desolation Holdings and three of its affiliates filed voluntary
petitions for relief under Chapter 11 of the Bankruptcy Code
(Bankr. D. Del., Lead Case No. 23-10597) on May 8, 2023. Desolation
Holdings' debtor affiliates are Bittrex, Inc., Bittrex Malta
Holdings Ltd. and Bittrex Malta Ltd.
At the time of filing, the Debtors estimated consolidated assets of
$500 million to $1 billion in assets and $500 million to $1 billion
in liabilities.
The Hon. Brendan Linehan Shannon presides over the cases.
Quinn Emanuel Urquhart & Sullivan, LLP, led by partner Patricia B.
Tomasco, is the Debtors' counsel. Berkeley Research Group, LLC, is
the Debtors' restructuring advisor. Omni Agent Solutions is the
claims agent.
BLUEKEY CONSTRUCTION: Continued Operation to Fund Plan
------------------------------------------------------
Bluekey Construction & Claims, LLC, filed with the U.S. Bankruptcy
Court for the Northern District of Georgia a Chapter 11 Plan of
Reorganization dated October 31, 2023.
Debtor was formed in November 2015 and began in 2016. Initially
Debtor's operations focused on obtaining and managing commercial
roofing repairs and replacements, using subcontractors to perform
the work under Debtor's supervision.
Lewgood remains the sole member and CEO of Debtor. Lewgood will
receive a net (after taxes) salary in the approximate amount of
$10,264 ($123,168 yearly). Lewgood's wife, Lydia Whitner, performs
most of the "back-office" and administrative works and will receive
a net (after taxes) salary in the approximate amount of $6,951
($83,412 yearly).
In 2020, Debtor was adversely impacted by the COVID-19 pandemic. In
2020, Debtor's gross revenue dropped to $1,356,100, with a gross
profit of $594,700, and a net income of $161,300. In 2022, Debtor's
gross revenue was approximately $2,840,000, with a gross profit of
$933,400 and a net profit of $226,800. Debtor's revenues fluctuate
throughout the year, with higher gross revenues in February, may,
and October of each year.
The Plan deals with all the property of Debtor and provides
treatment of all Allowed Claims against Debtor and its property.
Class 2 shall consist of FMBC on account of its General Unsecured
Claim, which is disputed but for which Debtor proposes payment as
provided herein to avoid litigation costs. Beginning on June 10,
2024, and continuing on a like day of each of the next 2 years
thereafter, FMBC shall receive Debtor’s projected disposable
income.
Class 3 shall consist of the Equity Holder, David Lewgood, who is
unimpaired and will retain his interests in Debtor.
All Classes are impaired and eligible to vote, except Class 3.
Funds for payments under the Plan will be from revenues generated
by the operation of Debtor's Business.
A full-text copy of the Plan of Reorganization dated October 31,
2023 is available at https://urlcurt.com/u?l=IBF5KS from
PacerMonitor.com at no charge.
Attorneys for Debtor:
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 BlueKey Construction & Claims
BlueKey Construction & Claims, LLC is a full-service insurance
claims and restoration company in Smyrna, Ga. It helps clients
navigate through the complex insurance claim and restoration
process using technically advanced thermal drone inspections and
infrared (IR) mapping.
BlueKey sought protection under Chapter 11 of the Bankruptcy Code
(Bankr. N.D. Ga. Case No. 23-57389) on Aug. 2, 2023, with
$2,033,030 in assets and $2,012,503 in liabilities. Tamara Miles
Ogier, Esq., at Ogier, Rothschild & Rosenfeld, PC, has been
appointed as Subchapter V trustee.
Judge Lisa Ritchey Craig oversees the case.
G. Frank Nason, IV, Esq., at Lamberth, Cifelli, Ellis & Nason,
P.A., is the Debtor's legal counsel.
CANO HEALTH: Plans to Ask Lenders to Wave Going-Concern Provision
-----------------------------------------------------------------
Rick Green of Bloomberg News reports that Cano Health said it
expects it will need to ask lenders to waive covenants that require
its annual report be free of any "going concern" statement.
Cano said in its earnings report that its Credit Suisse Credit
Agreement and 2023 Side-Car Credit Agreement require the 2023 Form
10-K to not contain any qualification or explanatory paragraph
about company's "going concern" status, with certain exceptions.
About Cano Health
Cano Health, Inc. (NYSE: CANO) -- canohealth.com -- is a primary
care-centric, technology-powered healthcare delivery and population
health management platform. Founded in 2009, with its headquarters
in Miami, Florida, Cano Health is transforming healthcare by
delivering primary care that measurably improves the health,
wellness, and quality of life of its patients and the communities
it serves through its primary care medical centers and supporting
affiliated providers.
Cano Health reported a net loss of $428.39 million in 2022, a net
loss of $116.74 million in 2021, a net loss of $71.06 million in
2020, and a net loss of $19.78 million in 2019.
Cano Health announced that on Sept. 5, 2023, it was notified by
NYSE Regulation Inc. that it is not in compliance with Section
802.01C of the NYSE Listed Company Manual because the average
closing stock price of a share of the Company's Class A common
stock was less than $1.00 per share over a consecutive 30
trading-day period.
* * *
As reported by the TCR on Aug. 17, 2023, S&P Global Ratings lowered
its issuer credit rating on Cano Health Inc. to 'CCC-' from 'B-'.
S&P said, "We based our negative outlook on our expectation for
continued weak operating performance and cash flow deficits. Given
the company's current liquidity position, we believe there is
heightened risk of a near-term default such as a bankruptcy filing,
debt restructuring, or missed interest payment."
CELSIUS NETWORK: Gets Court Clearance to Exit Bankruptcy
--------------------------------------------------------
Jonathan Randles of Bloomberg Law reports that failed crypto lender
Celsius Network LLC won bankruptcy court approval of its plan to
transform into a creditor-owned Bitcoin mining firm as part of a
broader proposal to repay customers whose accounts have been frozen
for more than a year.
US Bankruptcy Judge Martin Glenn said Thursday, November 9, 2023,
he would confirm Celsius' plan to repay customers through a
combination of cryptoassets and stock in the new, publicly listed
Bitcoin mining company. Celsius lawyers have said the platform
could start distributing assets early next 2024.
About Celsius Network
Celsius Network LLC -- http://www.celsius.network/-- is a
financial services company that generates revenue through
cryptocurrency trading, lending, and borrowing, as well as by
engaging in proprietary trading.
Celsius helps over a million customers worldwide to find the path
towards financial independence through a compounding yield service
and instant low-cost loans accessible via a web and mobile app.
Celsius has a blockchain-based fee-free platform where membership
provides access to curated financial services that are not
available through traditional financial institutions.
The Celsius Wallet claims to be one of the only online crypto
wallets designed to allow members to use coins as collateral to get
a loan in dollars, and in the future, to lend their crypto to earn
interest on deposited coins (when they're lent out).
Crypto lenders such as Celsius boomed during the COVID-19 pandemic,
drawing depositors with high interest rates and easy access to
loans rarely offered by traditional banks. But the lenders'
business model came under scrutiny after a sharp sell-off in the
crypto market spurred by the collapse of major tokens terraUSD and
luna in May 2022.
New Jersey-based Celsius froze withdrawals in June 2022, citing
"extreme" market conditions, cutting off access to savings for
individual investors and sending tremors through the crypto
market.
The list of major crypto firms that have filed for bankruptcy
protection in 2022 now includes Celsius Network, Three Arrows
Capital and Voyager Digital.
Celsius Network LLC and its subsidiaries sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No.
22-10964) on July 14, 2022. In the petition filed by CEO Alex
Mashinsky, the Debtor estimated assets and liabilities between $1
billion and $10 billion.
Judge Martin Glenn oversees the cases.
The Debtors tapped Kirkland & Ellis LLP as legal counsel;
Centerview Partners as financial advisor; Alvarez & Marsal as
restructuring advisor; and RSM US LLP as independent auditor.
Stretto is the claims agent.
On July 27, 2022, the U.S. Trustee appointed an official committee
of unsecured creditors. The committee tapped White & Case, LLP as
its bankruptcy counsel; Elementus Inc. as blockchain forensics
advisor; M3 Advisory Partners, LP as financial advisor; Perella
Weinberg Partners, LP as investment banker; and Gornitzky & Co. as
its Israeli counsel.
Shoba Pillay, Esq., is the examiner appointed in the Debtors'
Chapter 11 cases. Jenner & Block, LLP and Huron Consulting
Services, LLC, serve as the examiner's legal counsel and financial
advisor, respectively.
CLOUD VENTURES: Extends Plan Approval Deadline to Dec. 28
---------------------------------------------------------
Cloud Ventures 1, LLC d/b/a Pipeline Trenchers Group, filed a
motion to extend the deadlines for filing and confirming a Chapter
11 Plan.
The previous deadline for filing the small business case plan of
reorganization and disclosure statement is October 23, 2023, and to
confirm a plan by December 7, 2023.
The Debtor is currently clarifying that Chris Cloud is not
personally liable for the secured claim incurred with Lea County
State Bank.
Taking into account the recent activity in this case, counsel for
the United States Trustee is unopposed to setting the new deadline
to file a plan of reorganization and disclosure 21 days to November
13, 2023, and to confirm a plan by December 28, 2023.
Attorneys for Debtor(s):
Craig Douglas Davis, Esq.
DAVIS, ERMIS & ROBERTS, P.C.
1521 N. Cooper, Suite 860
Arlington, Texas 76011
Telephone: (817) 265-8832
Facsimile: (972) 262-3264
About Cloud Ventures 1
Cloud Ventures 1, LLC, doing business as Pipeline Trenchers Group,
filed a Chapter 11 bankruptcy petition (Bankr. N.D. Texas Case No.
23-40228) on Jan. 26, 2023, with as much as $1 million in both
assets and liabilities. Judge Mark X. Mullin oversees the case.
The Debtor tapped Davis Ermis & Roberts, P.C. as legal counsel and
Hagen Sharp & Company, PLLC as accountant.
CNA EQUITY: Court OKs Cash Collateral Access Thru Jan 2024
----------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of California
authorized CNA Equity Group, Inc. to use the cash collateral of the
U.S. Small Business Administration on an interim basis in
accordance with the budget, through January 12, 2024.
As of the petition date, the Debtor had approximately $187,252 in
its Bank of America bank accounts.
Pursuant to an pre-petition EIDL loan, Creditor is the Debtor's
sole secured creditor with a security interest in all of the
Debtor's assets pursuant to a promissory note, security agreement
and recorder UCC-1 Financing Statement. The current balance owed
Creditor is $2 million. There is a question as to whether the
Creditor's lien is properly perfected in the Debtor's bank
accounts.
The Debtor has non-insider, unsecured debt in the approximate
amount of $47,459. The material unsecured creditors in this case
are the actual and potential litigation claimants asserting state
law claims against the Debtor relating to the wrongful acts of a
third party.
A continued hearing on the matter is set for January 10 at 10:30
a.m.
A copy of the motion is available at https://urlcurt.com/u?l=cODiuY
from PacerMonitor.com.
A copy of the order is available at https://urlcurt.com/u?l=JHL3Ot
from PacerMonitor.com.
About CNA Equity
CNA Equity Group, Inc., doing business as Platinum One Realty and
Mortgage, is a full-service mortgage company servicing Northern and
Southern California.
The Debtor filed Chapter 11 petition (Bankr. N.D. Calif. Case No.
23-41294) on Oct. 6, 2023, with $1,661,089 in assets and $2,102,967
in liabilities. Michael Mulry, president, signed the petition.
Judge William J. Lafferty, III oversees the case.
Chris Kuhner, Esq., at Kornfield, Nyberg, Bendes, Kuhner & Little,
P.C. represents the Debtor as legal counsel.
COX OPERATING: Allows Creditors to Submit Bankruptcy Plan Proposals
-------------------------------------------------------------------
James Nani of Bloomberg Law reports that oil producer Cox Operating
LLC will allow creditors, including BP Energy Co., to submit
Chapter 11 plans after a proposed $88.5 million asset sale fell
apart last October 2023.
Cox's decision means it's relinquishing some control over its
restructuring as a group of unsecured creditors and BP continue to
develop their own proposal, meet with potential replacement oil and
gas producers, and explore funding options, according to court
papers.
The Dallas-based company's statement was filed Monday, November 6,
2023, in the US Bankruptcy Court for the Southern District of
Texas. Cox, founded by oilman Brad Cox, filed the papers in
response to several objections.
About Cox Operating LLC
Cox Operating LLC provides offshore drilling services. The Company
extracts oil from wells from offshore Florida to Texas.
On May 12, 2023, certain trade creditors filed an involuntary
petition under chapter 7 of the Bankruptcy Code against debtor Cox
Operating (Bankr. E.D. La. Case No. 23-10734). The petitioning
creditors -- Keystone Chemical, LLC, et al. -- are represented by
the Slyvester Law Firm.
Cox Operating LLC along with affiliates M21K, LLC, EPL Oil & Gas,
LLC, Cox Oil Offshore, L.L.C., Energy XXI Gulf Coast, LLC, and
Energy XXI GOM, LLC, sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Tex. Case No. 23-90328) on May 14,
2023. The Debtors have sought joint administration of the cases
under In re MLCJR LLC (Bankr. S.D. Tex. Lead Case No. 23-90324).
The cases are overseen by Honorable Bankruptcy Judge Christopher M.
Lopez.
In its petition, Cox Operating estimated assets and liabilities
between $100 million and $500 million each.
The Debtors tapped the law firms of Latham & Watkins LLP and
Jackson Walker LLP as counsel; Alvarez & Marsal North America, LLC,
as financial advisor; and Moelis & Company LLC, as investment
banker.
CURO GROUP: Closes Two Non-Recourse Facilities and Flexiti Escrow
-----------------------------------------------------------------
CURO Group Holdings Corp. announced that Heights Financing II, LLC,
an indirect wholly-owned subsidiary of CURO, entered into a new
$140 million asset-backed warehouse facility to finance future
loans originated by Heights Finance and affiliated entities. The
capacity of this facility may be increased to $175 million upon
satisfaction of certain conditions following the closing date.
Also, on Nov. 6, 2023, CURO Canada Receivables II Limited
Partnership, an indirect wholly-owned subsidiary of CURO, entered
into an amendment to its existing Canadian revolving credit
facility to increase the commitments of the lenders thereof by C$40
million to finance future loans originated in Canada, thereby
increasing the borrowing capacity to C$150 million.
"With the closing of these facilities, we have continued to
demonstrate our ability to access capital needed to grow our
business," said Doug Clark, chief executive officer of CURO.
"These new facilities will allow us to prudently fund future growth
in our U.S. and Canadian portfolios and extend credit to meet
customer demand."
In addition, on Oct. 30, 2023, CURO received the final closing date
Flexiti tangible book value and agreed to the closing date
unrestricted cash amounts totaling approximately C$27 million from
Questrade, as part of the purchase price which was in the range
previously disclosed. No adjustments to the proceeds or loss on
sale of Flexiti calculation were required.
About Curo Group
Headquartered in Chicago, IL, Curo Group Holdings COrp. is a
tech-enabled, omni-channel consumer finance company serving a full
spectrum of non-prime, near-prime and prime consumers in portions
of the U.S. and Canada. CURO was founded over 25 years ago to meet
the growing needs of consumers looking for alternative access to
credit. The Company continuously updates its products and
technology platform to offer a variety of convenient, accessible
financial and loan services.
Curo Group reported a net loss of $185.48 million for the year
ended Dec. 31, 2022. As of Dec. 31, 2022, the Company had $2.79
billion in total assets, $2.84 billion in total liabilities, and a
total stockholders' deficit of $54.13 million.
* * *
As reported by the TCR on May 26, 2023, S&P Global Ratings raised
its issuer credit rating on Curo Group Holdings Corp. to 'CCC+'
from 'SD'. S&P said, "While the debt exchange improved Curo's
liquidity by over $100 million, we expect the company to continue
generating negative net income in 2023. We take a balanced view of
the company's debt restructuring. Curo was able to address its
liquidity needs, but it added debt with higher interest rates to
its capital structure."
Moody's Investors Service downgraded Curo Group Holdings Corp.'s
corporate family rating to Caa2 from Caa1, the TCR reported on May
24, 2023. Moody's said the downgrade of Curo's CFR to Caa2 from
Caa1 was driven by deterioration in the company's credit profile
over the past year following the acquisitions of Heights Finance
and First Heritage, two near prime installment businesses, and the
sale of its legacy US deep subprime lending business.
CWT TRAVEL: S&P Downgrades ICR to 'SD' on Debt to Equity Exchange
-----------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on CWT Travel
Group Inc. to 'SD' (selective default) from 'CCC+' and its
issue-level rating on its $625 million senior secured notes to 'D'
from 'CCC+'.
S&P plans to raise its issuer credit rating on the company once S&P
can clearly review all aspects of its debt structure and maturity
profile.
S&P said, "The downgrade follows CWT Travel Group's exchange of its
$625 million senior secured notes for equity, which we view as
tantamount to a default. On Nov. 9, 2023, CWT Travel Group
announced it had completed its debt recapitalization, which
involved exchanging its $625 million senior secured notes for
common stock. In our view, this represents a selective default
because the noteholders received less than they were originally
promised. The company also raised additional capital to fund its
liquidity needs. We will reevaluate our ratings on CWT based on our
assessment of its new capital structure, liquidity, and our updated
view of its operating performance. While the company reduced a
substantial portion of its debt load and improved its liquidity
position, we only expect to raise our rating to the 'CCC' category
reflecting our view that reduced business travel activity and
macroeconomic uncertainty will continue to pressure operating
performance and cash flow generation, and leverage will remain
elevated."
CWT Travel Group Inc. (renamed from Carlson Travel Inc. following
its restructuring its November 2021) is a Minnetonka, Minn.-based
business-to-business employee travel platform company that serves
clients in about 145 countries through its wholly owned operations,
several joint ventures, and a network of international contracted
partners. The company derives most of its revenue from North
America and Europe. It offers its services to travel buyers and
business travelers, as well as companies, government institutions,
and nongovernmental organizations worldwide. CWT also organizes and
manages business meetings and events for its clients. Its RoomIt
technology platform, launched in 2017, allows clients to make hotel
bookings and is one of its fastest growing services.
DENN-OHIO LLC: Denny's Franchisee Files for Chapter 11
------------------------------------------------------
Julie Littman of Restaurant Dive reports that Denny's franchisee
Denn-Ohio filed for bankruptcy on Oct. 31, according to court
documents. The company currently operates 10 Denny’s restaurants
in Michigan, Ohio and Kentucky.
The operator reported "substantial growth from 2009 to 2019," but
around 2020, it was hit by economic challenges related to the
COVID-19 pandemic and other ongoing negative conditions inherent to
the restaurant industry, the company's CFO, COO and co-founder
Thomas Pilbeam said in a court document.
Denn-Ohio joins a handful of other franchisees to file for
bankruptcy in 2023 following tough economic conditions during the
last few years.
Denn-Ohio was hit by increased labor, food and delivery costs that
hurt the company’s net operating income, Pilbeam said, adding
that required renovations and post-pandemic trends toward increased
delivery sales added to its financial troubles. Co-founder Jack
Thompson also passed away in 2019, adding to the company's
hardships. During 2022, the company had total receipts of $17.6
million, but a net business income of negative $1.3 million.
Following these economic hardships, the company closed nine
underperforming stores and expects to close two more locations. At
its height, the franchisee operated 27 restaurants. Pilbeam said
that its remaining eight stores will be positioned to provide
"sufficient sales to pay its ongoing reduced operating expenses and
successfully reorganize its pre-bankruptcy debt through its Chapter
11 proceeding."
Prior to declaring bankruptcy, Pilbeam contacted Denny's corporate,
other franchisees, commercial brokers, lenders and investors to see
if he could sell or refinance its restaurants, but discovered that
there was "extremely limited" demand for Denny's locations.
Denny's itself has been undergoing several operational changes,
including rolling out a new menu and updated loyalty program. The
company is also scaling a virtual brand, Banda Burrito, into 80
more restaurants, two years after it launched two virtual brands.
The company is moving toward new remodels and prototypes under
Modern American Diner, as well, which highlights the off-premise
channels with a designated pickup area that will be staffed by a
to-go specialist, Denny's CEO and President Kelli Valade said
during the company's October earnings call.
Off-premise sales made up 19% of sales during the third quarter,
which started to rise above 20% at the end of the quarter. Domestic
same-store sales were up by 1.8% during the quarter, which includes
a 2.1% increase from domestic franchised restaurants.
About Denn-Ohio LLC
Denn-Ohio LLC operates its Denny's franchises at ten leased
commercial properties in Michigan, Ohio, and Kentucky.
Denn-Ohio LLC sought relief under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. W.D. Mich. Case No. 23-02533) on Oct. 31, 2023. In
the petition filed by Thomas F. Pilbeam, as member, the Debtor
reports total assets of $1,860,816 and total liabilities of
$4,567,989.
The Debtor is represented by:
Steven M. Bylenga, Esq.
CBH ATTORNEYS & COUNSELORS, PLLC
Main Office
25 Division Avenue S., Suite 500
Grand Rapids, MI 49503
Tel: 616-608-3061
Fax: 616-719-3782
Email: nikki@chasebylenga.com
DIAMOND SPORTS: Considers MLB Contract Demand Premature
-------------------------------------------------------
Ben Zigterman of Law360 reports that the bankrupt owner of Bally
Sports-branded regional sports networks objected to Major League
Baseball's bid to force it to accept or reject television broadcast
rights deals for the 2024 season, arguing that it will make a
decision on which agreements to terminate by the end of the year.
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.
DIEBOLD NIXDORF: Moody's Assigns 'Caa1' CFR, Outlook Positive
-------------------------------------------------------------
Moody's Investors Service assigned a Caa1 Corporate Family Rating
and a Caa1-PD Probability of Default Rating to Diebold Nixdorf,
Inc. Moody's also assigned a Caa1 rating to the company's $1,250
million senior secured term loan, which enabled the company to exit
Chapter 11 proceedings in August 2023. The Speculative Grade
Liquidity (SGL) rating is SGL-3, and the outlook is positive.
The term loan proceeds were used to pay in full and provide a
make-whole premium to the company's lenders under a $400 million
super-priority term loan as well as the lenders under the
asset-based lending (ABL) facility upon the company's exit from
bankruptcy. The proceeds were also used to add $517 million of cash
on the balance sheet.
RATINGS RATIONALE
The Caa1 CFR reflects the company's historically seasonal cash
flows, significant amount of restructuring costs, as well as
difficulties achieving financial targets, balanced by an improved
liquidity position with about $630 million of expected overall
liquidity at year end 2023. The rating also considers a
constructive demand profile, tempered by a notable portion of
point-in-time sales that are subject to economic cycles. Lastly,
the leverage profile is a positive with debt-to-EBITDA (Moody's
adjusted) expected to be near 3x in the near term. Governance is a
driver of the rating action and is characterized by moderate
leverage post-bankruptcy but also a history of challenges in
achieving strategic and financial targets.
The company tends to consume cash during the first three quarters
of the year, while cash generation in the fourth quarter tends to
be strong. However, restructuring and other unusual costs have led
to negative free cash flows in 2020, 2022, and 2023. Working
capital management, unusual costs –especially in the face of
macroeconomic factors, such as the supply chain issues and material
cost inflation encountered in 2021 and 2022—remain a risk factor
for Diebold, especially since these can lead to pronounced cash
flow usage in certain quarters. Such factors eventually led to the
filing of chapter 11 in June 2022. That said, the liquidity and
working capital position has improved due to the debt restructuring
and other strategic actions.
The company benefits from strong market positions, such as a 27%
estimated global market share in the ATM business and a leading
position in retail Self-Checkout (SCO) and Electronic Point-of-Sale
(EPOS) systems in Europe. This together with a strong products
backlog of approximately $1.2 billion provides support for the
demand outlook, especially given that about 56% of the business is
based on multi-year services contracts. Somewhat offsetting these
benefits is revenue of about 40% that is based on point-in-time
sales that is more exposed to economic cycles.
Leverage is moderate at around 3x debt-to-EBITDA
(Moody's-adjusted). Nonetheless, the pricing on the $1,250 million
term loan (of SOFR plus 750 basis points) results in significant
interest costs, estimated at about $160 million in the next 12
months. That being said, these costs are still a substantial
reduction from the pre-Chapter 11 capital structure that entailed
nearly $250 million in cash interest.
The positive outlook reflects Moody's expectation of modest revenue
growth, annual positive free cash flow, and the maintenance of
adequate liquidity.
Liquidity is adequate as denoted by the SGL-3 rating. The company
is expected to enter FY 2024 with about $600 million of cash
balances, although a portion of this balance is needed for minimum
working cash. Moody's expects around $40 million of free cash flow
in 2024 although this amount can fluctuate materially based on
working capital changes. There are no near term debt maturities or
term loan amortization, and the term loan matures in 2028. At this
point in time, the company does not have a revolving credit
facility, but the credit agreement includes a provision that would
allow for a revolving credit facility of up to $200 million, upon
paying down of the term loan of the same amount as the revolver.
The term loan does not include financial maintenance covenants.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded with expectations of consistent
annual free cash flow generation, maintaining adequate liquidity
(well above minimum cash needs) each quarter, as well as a track
record of meeting forecasted results.
The ratings could be downgraded with sustained negative free cash
flow, weakening liquidity, or with sustained declines of revenue
and EBITDA.
STRUCTURAL CONSIDERATIONS
The Caa1 rating for the term loan reflects the Caa1-PD Probability
of Default Rating and a first priority security interest in
substantially all assets of the borrower.
Headquartered in Hudson, OH, Diebold is a leading global provider
of ATM and POS equipment, services and software to financial
institutions and enterprise retailers. Banking revenue represented
approximately 70% of 2022 revenue, with the remainder representing
sales to retail customers. Diebold acquired Wincor Nixdorf AG in
2016. Revenues in 2022 were approximately $3.5 billion and expected
2023 revenues are $3.9 billion.
The principal methodology used in these ratings was Diversified
Technology published in February 2022.
DIEBOLD NIXDORF: S&P Assigns 'B' ICR Post-Chapter 11 Emergence
--------------------------------------------------------------
S&P Global Ratings assigned its 'B' issuer credit rating to global
ATM, point-of-sale, and self-checkout terminal assembler and
distributor Diebold Nixdorf Inc., reflecting a significantly
lightened debt load and, improved liquidity profile.
S&P said, "At the same time, we assigned a 'B' issue-level rating
to the company's $1.25 billion exit term loan maturing in 2028. The
recovery rating on this debt is '3', indicating our expectation for
rounded estimated recovery of 60% (recovery range of 50%-70%).
"The stable outlook reflects our expectation for 1%-2% revenue
growth, improving profitability, and reported annual free operating
cash flow (FOCF) of about $65 million in 2024 as the company
rebounds from its bankruptcy filing with a much more manageable
capital structure. This should support pro forma debt to EBITDA of
about 3.7x by the end of 2024. The outlook also reflects our
expectation the company will manage its liquidity such that it can
better manage unexpected macroeconomic shocks and business
restructuring activities.
"The 'B' rating and stable outlook reflect our view of an improved
capital structure, and enhanced liquidity position. Emerging from
bankruptcy, Diebold has reduced its outstanding debt from $2.9
billion to $1.25 billion, a 55% total decrease. This will enable
the company to operate at much lower levels of leverage, which we
expect will be around 5x by the end of 2023 from over 20x at the
height of its supply chain issues with its previous capital
structure. The lower leverage, which we expect will continue to
decline with EBITDA growth and further debt paydown, allows the
company more operating flexibility to execute on its turnaround
strategy, which mainly focuses on optimizing its supply chain
footprint and addressing the long lead times and large working
capital swings that occurred during the height of component
shortages. We expect the company will focus on increasing
manufacturing closer to end markets, diversifying its supplier
base, and enhancing supply chain visibility. While these changes
are a step in the right direction to fixing some of the more
structural weaknesses inherent to Diebold's business, its history
of declining growth, high restructuring costs, and volatile cash
generation will likely limit rating upside until it establishes
more stable operating performance. While Diebold holds a leading
market share of the global ATM install base, the highly competitive
environment requires ongoing investments which may compete with
managements ability to fully stabilize the business.
"The ongoing secular changes in consumer behavior and mature
industry conditions limit significant growth opportunities. We
expect ATM transaction volume and cash use to face growth
challenges because of the proliferation of digital payments, as
with mobile apps that enable consumers to transact payments using
their bank accounts. Trends like e-commerce have been growing card
and mobile wallet usage, and financial inclusion initiatives to
serve unbanked and underbanked customers will also likely
contribute to digital payments and card usage growth. According to
RBR Data Services (RBR), the global ATM install base will continue
declining over the next few years (5% decrease over 2021-2027).
Diebold derives around 70% of its total revenue from banking
solutions, a market that we do not expect to have very high growth
potential over the long term. While the company's shipping data
shows that it likely took share from competitors through the first
nine months of 2023, we expect further growth in the banking
segment to come from price increases and increasing service revenue
rather than organic product growth. Although we don't expect
digital technologies will fully displace cash use, Diebold has high
dependence on ATM hardware growth to further grow its services,
which have a 95% attach rate with each new unit sold.
"We expect the company's main growth driver will stem from its
retail segment, which accounts for 30% of total revenue. Given
labor shortages coupled with increasing spend on automation by
large retailers, we believe Diebold is well positioned to benefit
from growing adoption of self-checkout kiosks as well as the
associated servicing of such hardware. We expect the company will
grow its revenue by 9.5% in 2023 and 2% in 2024 as price increases
and growth from flourishing areas such as self-checkout devices
will likely be offset by a secular decline in its ATM installed
base given the rise of digital payments and lower cash usage. Even
through its bankruptcy, the company has not lost any customers or
experienced any order cancellations as it works through its high
backlog. We also expect the company's S&P Global Ratings-adjusted
EBITDA margins to normalize closer around 7% in 2023 from 3.3% in
2022 at the height supply chain disruptions. While we expect the
company will continue to improve its cost structure and
profitability through decreasing restructuring, increasing
efficiencies, and cost savings, Diebold has below-average
profitability compared to other hardware peers such as NCR Atleos
Corp. and VeriFone Systems Inc., which have EBITDA margins of 17%
and 20%, respectively. Since 2018, Diebold has incurred around $600
million of restructuring and transformation costs, one of the main
reasons its profitability is low compared to peers. However, these
costs have trended down over the last several quarters and,
although we expect $50 million of such costs in 2023, we expect
them to have minimal impact by 2024. Still, there is risk of them
reoccurring if the company experiences higher than expected
declines in its business.
"Despite facing mature industry conditions, the stable outlook
reflects our expectation for 1%-2% revenue growth, improving
profitability, and reported annual FOCF of about $65 million in
2024 as the company rebounds from its bankruptcy filing with a much
more manageable capital structure. This should support deleveraging
to the high-3x area by the end of 2024. The outlook also reflects
our expectation the company will manage its liquidity such that it
can better manage unexpected macroeconomic shocks and business
restructuring activities."
S&P could lower the rating if the company experiences operational
challenges stemming from the business turnaround, or incurs
higher-than-expected transactions costs such that:
-- Adjusted leverage exceeds 5x;
-- S&P believes the company is unable to achieve and sustain FOCF
to debt above 5%; or
-- EBITDA interest coverage below 2x.
An upgrade is unlikely over the next 12 months given the company's
below-average margin profile and tough industry trends on the
banking side. S&P could raise the rating if:
-- S&P believed the company will sustain revenue growth and EBITDA
improvements without significant business disruptions;
-- Leverage were significantly below 4x on a sustained basis;
-- FOCF to debt were well above 10%; and
-- EBITDA/interest coverage was above 3X.
S&P said, "Social factors are a modestly negative consideration in
our credit rating analysis because we expect the role of physical
cash as a means of exchange to decline over time. Access to other
methods of payments, such as wire transfers and mobile-to-mobile
payments, is rising and we expect the need for ATM hardware will
decline as the use of alternative payments expands."
DIOCESE OF CAMDEN: Insurers Slam New Chapter 11 Plan
----------------------------------------------------
Yun Park of Law360 reports that a group of insurance companies
asked a New Jersey bankruptcy judge to reject the most recent
Chapter 11 plan filed by the Roman Catholic Diocese of Camden and
its official committee of tort claimant creditors, saying it
"doubles down" on the errors that caused the judge to reject the
diocese's first plan in August 2023.
Interstate Fire & Casualty Company, Century Indemnity Company, as
successor to CCI Insurance Company, as successor to Insurance
Company of North America, and Certain Underwriters at Lloyd's,
London, Catalina Worthin Insurance Ltd f/k/a HFPI (as Part VII
transferee of Excess Insurance Company Ltd. and London & Edinburgh
Insurance Company Ltd.), RiverStone Insurance (UK) Ltd. (as
successor in interest to Terra Nova Insurance Company Ltd), and
Sompo Japan Nipponkoa Insurance Company of Europe Limited (f/k/a
The Yasuda Fire & Marine Insurance Company of Europe Ltd.) filed an
objection to the First Modified Eighth Amended Plan of
Reorganization filed by the Diocese of Camden, New Jersey and the
Official Committee of Tort Claimant Creditors.
"Following nearly six months of briefing, discovery, and a 14-day
evidentiary hearing, this Court determined that the Debtor's Eighth
Amended Plan of Reorganization (the "Original Plan") "does not meet
all of the requirements of section 1129 of the Bankruptcy Code."
The Original
Plan and its trust distribution procedures instead were "too biased
for the Court to make a good faith finding;" failed in the
"protection of the Insurers rights;" would "allow compensation for
claims which are facially invalid or fraudulent," could
"artificially inflate the value of claims;" and allowed attorneys
to collect excessive contingency fees." Nonetheless, the Court in
its August 29, 2023, Memorandum Decision Denying Confirmation of
Eighth Amended Plan provided curative instructions to the Plan
Proponents – and with them, a roadmap to confirmation," the
Insurers tell the Court.
"But the Plan Proponents ignored the Court's directions. Rather
than repairing the flaws that doomed the Original Plan, the Plan
Proponents have doubled down on many of the same unforced errors.
The Insurers point out that for example:
* Where the Court instructed the Plan Proponents to bolster the
independence of the Neutral so that she would be "truly neutral,"
the Plan Proponents eliminated the position altogether and assigned
the associated duties to the Trust Administrator, Matthew Dundon,
who was hand-picked by the Tort Committee.
* Where the Court directed the Plan Proponents to provide greater
objectivity and discretion to the administrator of the "Abuse Claim
Value Assessment" contained within the Modified TDP, the Plan
Proponents instead eliminated those procedural safeguards that
previously existed to protect the rights of the Certain Insurers.
* Where the Court held that it would not confirm a plan that
lacked a mechanism for the review and denial of facially deficient
claims, the Plan Proponents added only a requirement for the
submission of declarations that parrot the attestations made when
signing proofs of claim.
* Where the Court instructed the Plan Proponents to defer
questions of state law relating to the Insurance Assignment to
other courts, the Plan Proponents shifted the burden to the Certain
Insurers to establish that the Insurance Assignment is invalid
under state law.
* Where the Court held that it could not exercise jurisdiction
over the assignment of non-debtor interests in the Insurance
Policies, the Plan Proponents continued to press for that outcome.
* Where the Court directed the Plan Proponents to consolidate,
clarify, and streamline the plan provisions governing the Certain
Insurers' rights and defenses (and to preserve the Certain
Insurers' rights and defenses), the Plan Proponents crafted
convoluted language that retains overbroad carveouts, impairs the
Certain Insurers' rights and defenses, and
raises more questions than it answers.
* Where the Court made specific remedial recommendations for
various defects identified in the Original Plan's exculpation
provision and judgment reduction clause, the Plan Proponents either
disregarded the Court’s suggestions or made the offending
language worse.
* Where the Court held that it would not allow attorneys to
collect contingency fees in excess of what is permitted under New
Jersey law, or in excess of what is reasonable for the work
required and risk taken, the Plan Proponents made the situation
worse by omitting any reasonableness requirement.
Because the Plan Proponents failed to redress these (and other)
deficiencies in the Modified Plan, the Modified Plan violates the
Memorandum Decision. To aid the Court, the Certain Insurers have
proposed modifications that, if adopted, would cure many of the
defects that render the Modified Plan noncompliant with the
directives of the Memorandum Decision.
About The Diocese of Camden, NJ
The Diocese of Camden, New Jersey is a nonprofit religious
corporation organized pursuant to Title 16 of the Revised Statutes
of New Jersey. The Diocese is the secular legal embodiment of the
Roman Catholic Diocese of Camden, a juridic person recognized under
Canon Law.
The Diocese of Camden sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D.N.J. Case No. 20-21257) on Oct. 1, 2020.
The petition was signed by Reverend Robert E. Hughes, vicar General
and vice president. At the time of the filing, the Debtor had
total assets of $53,575,365 and liabilities of $25,727,209. Judge
Jerrold N. Poslusny Jr. oversees the case. McManimon, Scotland &
Baumann, LLC, is the Debtor's legal counsel.
DIRECT TEXTILE: Areya Holder Aurzada Named Subchapter V Trustee
---------------------------------------------------------------
The U.S. Trustee for Region 6 appointed Areya Holder Aurzada, Esq.,
at Holder Law as Subchapter V trustee for Direct Textile Store,
LLC.
Ms. Aurzada will be paid an hourly fee of $495 for her services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Ms. Aurzada declared that she is a disinterested person according
to Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Areya Holder Aurzada, Esq.
Holder Law
901 Main Street, Ste. 5320
Dallas, TX 75202
Office: 972-438-8800
Mobile: 817-907-4140
About Direct Textile Store
Direct Textile Store, LLC is a wholesale supplier of bed linens,
towels, bed sheets, and textile supplies.
The Debtor filed Chapter 11 petition (Bankr. N.D. Texas Case No.
23-43225) on Oct. 24, 2023, with $165,587 in assets and $3,737,648
in liabilities. John Henry Lee III, president, signed the
petition.
Judge Edward L. Morris oversees the case.
Robert C. Lane, Esq., at The Lane Law Firm, represents the Debtor
as bankruptcy counsel.
DLOUX PROPERTIES: Files Amended Plan; Confirmation Hearing Dec. 13
------------------------------------------------------------------
Dloux Properties, LLC, submitted a Second Amended Disclosure
Statement describing Amended Plan of Reorganization dated November
2, 2023.
The Debtor is the owner of 74.5 acres of land in Gillespie County,
Texas. The members of the Debtor are Juan Iribarren, M.D. and Dloux
Properties Holding Trust. Steven Robinson is the Trustee.
The Plan proposes to pay all administrative claims, priority claims
and unsecured claims in full. The secured claim will be paid from
the remaining proceeds. Equity holders will not receive any monies
unless there are excess monies after payment of all creditors.
During the bankruptcy, the Debtor has prepared the Property for
market. This has included removal of remaining items
insider/outside the improvements, cleaning, and basic maintenance
of indoors and perimeter of the improvements. Except for preparing
the Property for market, the Debtor is not operating.
Class 3 consists of Unsecured Creditors. There are only two
unsecured creditors: Cavett, Turner & Wyble, LLC ($2,050.00) and
Keller Enterprises ($9,999.20). Dr. Iribarren has agreed to
subordinate his secured claim to ensure that priority,
administrative and unsecured creditors claim are paid in full.
Payments and distributions under the Plan will be funded from the
proceeds of the sale of the 74.5 acres. Debtor shall have one year
from the confirmation date to sell the 74.5 acres. If there is no
sale, Debtor shall file with the Bankruptcy Court notice that a
sale has not occurred. This notice shall be filed within 5 days of
the one-year anniversary of the effective date.
The deadline to file a written objection to confirmation of the
Plan is December 4, 2023 by 5:00 p.m. A hearing on whether to
confirm the Plan has been scheduled for December 13, 2023 at 1:30
p.m.
A full-text copy of the Second Amended Disclosure Statement dated
November 2, 2023 is available at https://urlcurt.com/u?l=qKWnxu
from PacerMonitor.com at no charge.
Attorney for the Debtor:
Dean W. Greer, Esq.
WEST & WEST ATTORNEYS AT LAW, P.C.
2929 Mossrock, Suite 204
San Antonio, TX 78230
Telephone: (210) 342-7100
Facsimile: (210) 342-3633
E-mail: dean@dwgreerlaw.com
About Dloux Properties
Dloux Properties, LLC, is a single asset real estate (as defined in
11 U.S.C. Section 101(51B)). The Debtor is the fee simple owner of
an improved property located at 4079 Salt Branch Loop, Gillespie
County, valued at $1.75 million.
Dloux Properties filed its voluntary petition for Chapter 11
protection (Bankr. W.D. Tex. Case No. 23-50568) on May 8, 2023,
listing $1,750,000 in assets and $1,275,555 in liabilities. Juan
Iribarren as managing member, signed the petition.
West & West Attorneys at Law, P.C., serves as the Debtor's legal
counsel.
EDGEWOOD FOOD MART: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: Edgewood Food Mart, Inc.
400 Edgewood Ave SE
Atlanta, GA 30312
Chapter 11 Petition Date: November 10, 2023
Court: United States Bankruptcy Court
Northern District of Georgia
Case No.: 23-61204
Debtor's Counsel: Tamara Ogier, Esq.
OGIER ROTHSCHILD ROSENFELD PC
PO Box 1574
Decatur, GA 30031
Tel: (404) 525-4000
Email: tmo@orratl.com
Estimated Assets: $100,000 to $500,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Amin Panjawani 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/BRFQ66Y/Edgewood_Food_Mart_Inc__ganbke-23-61204__0001.0.pdf?mcid=tGE4TAMA
EMINENCE CORPORATION: Case Summary & Five Unsecured Creditors
-------------------------------------------------------------
Debtor: Eminence Corporation
URB Ext Roosevelt
555 Calle Cabo H Alverio
San Juan, PR 00918
Chapter 11 Petition Date: November 10, 2023
Court: United States Bankruptcy Court
District of Puerto Rico
Case No.: 23-03714
Debtor's Counsel: Modesto Bigas Mendez, Esq.
MODESTO BIGAS LAW OFFICE
PO Box 7462
Ponce, PR 00732
Tel: (787) 844-1444
Fax: (787) 842-4090
Email: mbigasmendez@gmail.com
Total Assets: $1,777,391
Total Liabilities: $1,537,640
The petition was signed by Irmgard A. Pagan Rivera as president.
A full-text copy of the petition containing, among other items, a
list of the Debtor's five unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/3IHM6BI/EMINENCE_CORPORATION__prbke-23-03714__0001.0.pdf?mcid=tGE4TAMA
ENVIVA PARTNERS: Bonds Dip Amid Steep Losses, Going-Concern Warning
-------------------------------------------------------------------
Ethan M Steinberg of Bloomberg Law reports that a junk bond from
Enviva Partners LP tumbled Thursday, November 9, 2023, to its
lowest on record after the biomass company posted steep losses,
reshuffled its leadership and raised substantial doubt over its
ability to continue operating.
The Bethesda, Maryland-based company saw its 6.5% note maturing in
January 2026 fall 32.5 cents on the dollar to 31.75 cents, a
record-low, according to Trace data as of 11:23 a.m. New York
time.
Enviva suffered an $85.2 million loss in the third quarter and
posted net revenue that missed average analyst expectations by over
8%.
It raised "going concern" doubts in its earnings statement.
Enviva on Nov. 9, 2023, reported a net loss of $85.2 million for
third-quarter 2023, as compared to a net loss of $18.3 million for
third-quarter 2022; net loss for third-quarter 2023 included $21.2
million of asset impairments, $22.1 million of interest expense on
repurchase accounting, and $6.3 million of restructuring costs that
were not incurred during the same period last year.
"As previously disclosed, during the three months ended December
31, 2022, the Company entered into agreements with a customer to
purchase approximately 1.8 million MT of wood pellets between 2023
and 2025 (the "new purchase agreements"). The new purchase
agreements were priced at market prices in effect at the time of
the agreements. At that time, we entered into additional wood
pellet sales contracts that, together with the existing sales
contracts, totaled approximately 2.8 million MT with deliveries
between 2022 and 2026 (these new sales contracts, together with the
new purchase agreements, the "Q4 2022 Transactions"). As detailed
further in Enviva's quarterly report for third-quarter 2023 on Form
10-Q filed today with U.S. Securities and Exchange Commission, the
Q4 2022 Transactions have had a significant negative impact on the
Company's profitability, cash flows, and liquidity due to the
negative current spread between the sale and purchase prices of the
agreements and the anticipated loss on resale of those volumes
within an unfavorable pricing environment in the wood pellet spot
market. Absent a significant and near-term increase in wood pellet
market pricing, we expect the Q4 2022 Transactions will continue to
have a negative impact on our profitability, cash flows, and
liquidity through 2025. In addition, as a result of operational
challenges experienced at the Company's plants during the first and
second quarters of 2023 and a wood pellet market dynamic that has
largely held market prices at levels unsupportive of creating
margin through spot purchases or spot sales, the Company
anticipates that, absent a cure, it may be in breach of certain of
its covenants under its senior secured credit facility as early as
the reporting date for the measurement period ending December 31,
2023. These conditions and events in the aggregate raise
substantial doubt regarding the Company's ability to continue as a
going concern," according to the earnings release.
About Enviva Partners LP
Enviva Partners, LP produces and supplies utility-grade wood
pellets. It serves utilities and power generators in the United
Kingdom and other European markets. Enviva Partners GP, LLC
operates as the general partner of the company. Enviva Partners,
LP was founded in 2013 and is based in Bethesda, Maryland. Enviva
Partners, LP is a subsidiary of Enviva Holdings, LP.
ESCHER GROUP: Court OKs Cash Collateral Access Thru Jan 2024
------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Maryland, Baltimore
Division, authorized Escher Group, LLC and its affiliates to use
cash collateral on a final basis in accordance with the budget,
through January 27, 2024.
The Debtors have an immediate need to use cash collateral to permit
them to finance the administration of the Chapter 11 cases, pay the
lag payroll owed to the employees, and satisfy other working
capital and operational needs necessary to preserve the
going-concern value of the Debtors.
As previously reported by the Troubled Company Reporter, for the
year ending December 31, 2022, the Pharmacies had approximate sales
of $10.6 million, mainly attributable to Medicare and Medicaid
reimbursements. The operating pharmacies were originally acquired
in 2018 in a complex transaction funded primarily by a loan
originated under the U.S. Small Business Administration Section
7(a) loan program. Live Oak Bank was the lender having issued a
loan in the original principal amount of approximately $4.8
million.
After asserted defaults in the spring of 2020, and the Debtors'
operations having survived through the Covid-19 Pandemic, the SBA
"took back" the loan from Live Oak Bank, and assigned it to an
outside, private collection agency; the collection agency then
placed the LOB Loan back to the SBA, and then it was sent to the
Department of Treasury Cross Servicing Program. Despite years of
attempts by the undersigned counsel to negotiate a resolution to
the disputes surrounding the LOB Loan (beginning with Live Oak,
then the SBA, then its outside collection agency, then the DOTCSP),
no workout resolution was practical, and the Debtors' recently
ceased such efforts despite fruitful discussions with the U.S.
Department of Treasury Cross Servicing Program, the federal
government agency that collects debts for other federal agencies.
Although negotiations with the DOTCSP were fruitful, because of the
type and size of the LOB Loan, an out-of-court "offer and
compromise" process takes between 12-18 months and ultimately
requires the approval of the Department of Justice. And,
notwithstanding good faith negotiations, the DOTCSP must, and will
continue, to set-off all reimbursements due to the Pharmacies. In
the last months leading up to the filing of the cases, the DOTCSP
directed set-offs of all of the Debtors' reimbursements under any
federal program, including those administered by the Maryland
Medicare/Medicaid programs. The set-offs tragically preclude the
Debtors from being able to operate inasmuch as the bulk of the
Debtors' operating revenues is derived from these reimbursements.
Accordingly, to save the Debtors and restructure their debt, to
save employee jobs and to preserve the critically needed services
the Pharmacies provide in the community, these bankruptcy cases had
to be filed. Indeed, because so much of the Pharmacies' income is
attributable to reimbursements under federal programs, and the
DOTCSP must, by operation of federal law, set-off all such
payments, the Pharmacies were required to seek the protection of
the Court to be able to continue their operations.
The Debtors' assets are subject to the perfected security interests
of three entities. In the first priority position is the blanket
lien and security interest of SBA/DOTCSP (as successor to Live Oak
Bank) securing the LOB Loan in the original principal amount of
$4.8 Million. The LOB Loan is memorialized by a series of loan
documents including a: Loan Agreement, Note, Security Agreement,
and several Guarantees dated December 18, 2018. The DOTCSP asserts
that the current principal balance due is $4.1 million. In Second
priority position and subordinate to the claims of SBA/DOTSCP is
the blanket lien and security interest of McKesson Corporation
pursuant to the Customer Application and Terms and Conditions dated
November 30, 2018, which McKesson agreed to subordinate to LOB
pursuant to an Intercreditor Agreement with LOB. In third priority
position is the lien and security interest of Anda, Inc. pursuant
to Credit Agreement/Applications dated February 3, 2019 for York
Road.
McKesson is the Debtors' main wholesaler of pharmaceutical and
medical supplies. the Debtors were current with billings from
McKesson.
The court said that as adequate protection for the Pre-petition
Lenders' interests in any cash collateral so used, the Pre-petition
Lenders are granted a security interest of the same priority and to
the same extent as their pre-petition security interests in the LOB
Collateral, McKesson Collateral or Anda Collateral.
A copy of the order is available https://urlcurt.com/u?l=prw2E4
from PacerMonitor.com.
About Escher Group, LLC
Escher Group, LLC dba Glen Burnie is a community pharmacy offering
free prescription delivery, blister packaging, and immunizations.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Md. Case No. 23-17628) on October 23,
2023. In the petition signed by Andrew Michael Nye, II, manager,
the Debtor disclosed up to $10 million in both assets and
liabilities.
Judg Nancy V. Alquist oversees the case.
Richard M. Goldberg, Esq., at Shapiro Sher Guinot and Sandler, PA,
represents the Debtor as legal counsel.
Verity, LLC is the Debtor's financial advisor.
EVERYTHING BLOCKCHAIN: Closes Sale of Mercury Inc. for $216,583
---------------------------------------------------------------
Everything Blockchain, Inc. disclosed in a Current Report on Form
8-K filed with the Securities and Exchange Commission that on Oct.
31, 2023, the Board of Directors approved, and the Company
completed, the sale of Mercury, Inc. to Chris Carter, founder and
CEO of Mercury. The sales price consisted of 115,000 shares of
Company common stock and 60,000 shares of Company Series C
Preferred Stock, owned by Chris Carter, for a total sales price of
$216,583. The sales price was primarily based on estimated net
assets of Mercury.
About Everything Blockchain
Headquartered in Fleming Island, Florida, Everything Blockchain,
Inc. (fka OBITX, Inc.) is primarily engaged in the business of
consulting and developing blockchain and cybersecurity related
solutions. Everything Blockchain is a technology company that is
blending blockchain, zero-trust, and database management technology
to create a platform to solve real world, practical business
problems.
Mitzpe Netofa, Israel-based Elkana Amitai CPA, the Company's
auditor since 2022, issued a "going concern" qualification in its
report dated May 1, 2023, citing that the Company suffered losses
from operations in all years since inception, except for the year
ended Jan. 31, 2022. These and other factors raise substantial
doubt about the Company's ability to continue as a going concern.
FIRSTENERGY CORP: Moody's Puts 'Ba1' CFR Under Review for Upgrade
-----------------------------------------------------------------
Moody's Investors Service placed FirstEnergy Corp.'s ratings under
review for upgrade, including its Ba1 corporate family rating,
Ba1-PD probability of default rating, and Ba1 senior unsecured
ratings. FirstEnergy's SGL-1 speculative grade liquidity (SGL)
rating is unchanged. Previously, the outlook was positive.
RATINGS RATIONALE
"The review for upgrade will assess FirstEnergy's ability to
improve its financial metrics including maintaining a cash flow
from operations before changes in working capital (CFO pre-WC) to
debt ratio above 11% on a sustained basis", said Jairo Chung,
Moody's Vice President – Senior Credit Officer. FirstEnergy
expects to receive the majority of the proceeds from the sale of an
equity interest in subsidiary FirstEnergy Transmission (FET, Baa2
stable) in early 2024 and the remaining proceeds before year-end
2024. The company plans to use the proceeds to improve its balance
sheet by repaying some parent debt and avoiding additional debt
issuance. Furthermore, Moody's believes that FirstEnergy's previous
corporate governance issues have been mostly addressed as the
company has made meaningful progress in several respects, including
retaining new board members, executing on key senior management
placements and implementing a new internal control and reporting
structure.
The review will focus on the progress on the company's execution of
the FET sale transaction and will be concluded when the transaction
closes and the proceeds are used to repay some of the outstanding
parent level debt.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
A rating could be upgraded if the FET sale transaction closes,
proceeds are used to pay down debt and Moody's expect FirstEnergy's
financial metrics to improve such that CFO pre-WC to debt will be
above 11% on a sustained basis. Also, any rating upgrade would be
predicated on the regulatory environments in its jurisdictions
remaining stable; and no new, material, unexpected negative
developments associated with any of the remaining external
investigations.
Liquidity
FirstEnergy's Speculative Grade Liquidity (SGL) rating SGL-1 is
unchanged. It reflects Moody's expectation that FirstEnergy will be
able to cover its basic cash requirements from internal sources
over the next 12 months; will have little reliance on external
sources for liquidity needs and will remain comfortably in
compliance with its financial covenant. As discussed above,
FirstEnergy is expected to receive all $3.5 billion of proceeds
from the sale of the FET equity interest in 2024, which will
improve the company's liquidity over the next 12 months.
Headquartered in Akron Ohio, FirstEnergy is a utility holding
company with 13 regulated utility subsidiaries, servicing more than
six million customers in six jurisdictions. FirstEnergy's 2022
total rate base was approximately $26 billion with about $9 billion
related to its transmission assets.
LIST OF AFFECTED RATINGS
Issuer: FirstEnergy Corp.
On Review for Upgrade:
- Corporate Family Rating, Placed on Review for Upgrade, currently
Ba1
- Probability of Default Rating, Placed on Review for Upgrade,
currently Ba1-PD
- Senior Unsecured Regular Bond/Debenture, Placed on Review for
Upgrade, currently Ba1
- Senior Unsecured Shelf, Placed on Review for Upgrade, currently
(P)Ba1
- Senior Unsecured Bank Credit Facility, Placed on Review for
Upgrade, currently Ba1
Assignments:
- Senior Unsecured Bank Credit Facility, Assigned Ba1; Placed Under
Review for Upgrade
Outlook Actions:
- Outlook, Changed To Rating Under Review From Positive
Issuer: Ohio Edison Company
Assignments:
- Senior Unsecured Bank Credit Facility, Assigned Baa3
Outlook Actions:
- Outlook, Remains Stable
Issuer: West Penn Power Company
Assignments:
- Senior Unsecured Bank Credit Facility, Assigned Baa1
Outlook Actions:
- Outlook, Remains Stable
Issuer: Jersey Central Power & Light Company
Assignments:
- Senior Unsecured Bank Credit Facility, Assigned A3
Outlook Actions:
- Outlook, Remains Stable
Issuer: Monongahela Power Company
Assignments:
- Senior Unsecured Bank Credit Facility, Assigned Baa2
Outlook Actions:
- Outlook, Remains Stable
Issuer:American Transmission Systems, Incorporated
Assignments:
- Senior Unsecured Bank Credit Facility, Assigned A3
Outlook Actions:
- Outlook, Remains Stable
Issuer:FirstEnergy Transmission
Asssignments:
- Senior Unsecured Bank Credit Facility, Assigned Baa2
Outlook Actions:
- Outlook, Remains Stable
The principal methodology used in rating FirstEnergy Corp., Ohio
Edison Company, West Penn Power Company, Jersey Central Power &
Light Company, and Monongahela Power Company was Regulated Electric
and Gas Utilities published in June 2017.
FREIGHT MASTER: Robert Handler Named Subchapter V Trustee
---------------------------------------------------------
The U.S. Trustee for Region 11 appointed Robert Handler of
Commercial Recovery Associates, LLC as Subchapter V trustee for
Freight Master Trans, LLC.
Mr. Handler will be paid an hourly fee of $450 for his services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. Handler declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Robert P. Handler
Commercial Recovery Associates, LLC
205 West Wacker Drive, Suite 918
Chicago, IL 60606
Tel. (312) 845-5001 x221
Email: rhandler@com-rec.com
About Freight Master
Freight Master Trans LLC provides trucking services.
The Debtor filed Chapter 11 Petition (Bankr. N.D. Ill. Case No.
23-14323) on October 25, 2023, with $1 million to $10 million in
assets and liabilities. Spasoje Vrhovac, managing member, signed
the petition.
Saulius Modestas, Esq. of Modestas Law Offices, P.C. represents the
Debtor as legal counsel.
GEMINI HDPE: S&P Affirms 'BB' Debt Rating, Alters Outlook to Neg.
-----------------------------------------------------------------
S&P Global Ratings revised the outlook on its 'BB' issue-level
rating on Gemini HDPE LLC to negative from stable to reflect its
negative outlook on Ineos Group Holdings S.A. (INEOS), the parent
of revenue counterparty INEOS Gemini HDPE Holding Co. LLC (INEOS
HoldCo).
Gemini HDPE LLC is a high-density polyethylene (HDPE) facility
located in La Porte, Texas. Construction of the facility was
completed in 2017. Gemini produces a wide range of HDPE products
but primarily focuses on bimodal-grade HDPE, which has superior
properties allowing it to be used in applications that command a
price premium relative to commodity HDPE grades. The project mainly
sells its HDPE products to INEOS, who--in turn--sells the products
in the North American market.
Gemini has a long-term tolling agreement with INEOS HoldCo and
INEOS Gemini HDPE LLC (the subsidiaries), both of which are
indirect subsidiaries of INEOS, that insulates it from the varying
market demand for HDPE, fluctuating commodity prices, and
operational performance concerns. INEOS ultimately guarantees the
obligations of the subsidiaries under the tolling agreement. INEOS
is also the indirect sole owner of Gemini (as well as the guarantor
of the subsidiaries' tolling obligation). The tolling agreement
extends through 2035.
The long-term tolling agreement, guaranteed by INEOS, provides the
project with predictable cash flow regardless of commodity prices,
the entity's operational performance, or the market demand for HDPE
products. The tolling fee is structured to cover Gemini's fixed and
variable operating costs and mandatory debt service (even under
force majeure conditions).
S&P said, "Although the tolling agreement guarantee provided by
INEOS offers some lender support, we cap our rating on the
project's debt at our view of the creditworthiness of the
guarantor.
"We cap our rating and outlook on Gemini at the same levels as our
rating and outlook on the guarantor of the tolling obligation,
INEOS. On Oct. 30, 2023, we revised our outlook on INEOS to
negative from stable and affirmed our 'BB' rating. The negative
outlook reflects our expectation that weak industry conditions will
lead to increased leverage at a number of INEOS subsidiaries. It
also reflects that the timing of the recovery in the company's key
markets remains highly uncertain. Therefore, we took a similar
rating action on Gemini.
"The negative outlook reflects the link between our ratings on
Gemini and those on INEOS, which pays all of its debt service
components (principal, interests, and financing costs), variable
and fixed manufacturing costs, and other necessary operating costs.
We expect to move our rating on Gemini in lockstep with any changes
to our rating on INEOS.
"We could lower the rating on Gemini's term loan B if we take a
similar action on INEOS.
"We could revise our outlook on Gemini's term loan B to stable or
raise the rating if we take a similar action on INEOS."
GIGA-TRONICS INC: Issues $1 Million New Note to Ault Lending
------------------------------------------------------------
Giga-tronics Incorporated disclosed in a Current Report on Form 8-K
filed with the Securities and Exchange Commission that it issued
Ault Lending, LLC a $1,000,000 12% Senior Secured Subordinated
Promissory Note.
The New Ault Note is convertible on the same terms as the 10%
Senior Secured Convertible Promissory Note issued to Ault Lending
in Dec. 31, 2022, except with the principal amount owed equal to
the aggregate sums so borrowed, a maturity date of June 30, 2025
and an interest rate of 12% per annum.
As of Nov. 6, 2023 (the date of this Current Report on Form 8-K),
the Company has borrowed $766,405 (excluding interest) under the
New Ault Note.
The New Ault Note is secured and subordinated to all rights of the
Senior Creditors as defined by that certain Subordination Agreement
by and among Ault Alliance, Inc. and the Senior Creditors dated
Jan. 10, 2023.
About Giga-tronics Inc.
Headquartered in Dublin, California, Giga-Tronics Inc. is a
publicly held company, traded on the OTCQB Capital Market under the
symbol "GIGA". Giga-tronics -- http://www.gigatronics.com-- is a
provider of purpose-built electronic technology solutions for
defense and other mission critical applications. The Company
designs, manufactures, and distributes specialized precision
electronic solutions, automated test solutions, power electronics,
supply and distribution solutions, display solutions and radio,
microwave and millimeter wave communication systems and components
for a variety of applications with a focus on the global defense
industry for military airborne, sea and ground applications
including high fidelity signal simulation and recording solutions
for Electronic Warfare test and training applications.
Giga-Tronics reported a net loss of $18.42 million for the year
ended Dec. 31, 2022, compared to a net loss of $2.86 million for
the year ended Dec. 31, 2021.
New York, New York-based Marcum LLP, the Company's auditor since
2021, issued a "going concern" qualification in its report dated
May 11, 2023, citing that the Company has incurred significant
losses and needs to raise additional funds to meet its obligations
and sustain its operations. These conditions raise substantial
doubt about the Company's ability to continue as a going concern.
GLOBAL PROCESSING: Selling Kanawha Facility for $2.9MM
------------------------------------------------------
Global Processing, Inc. asked the U.S. Bankruptcy Court for the
Northern District of Iowa for authority to sell, and lease pending
sale, its properties in Kanawha, Iowa.
The properties include the company's grain processing facility and
personal properties used to operate its business.
Global Processing is selling the properties to Thriving Acre Seeds,
LLC, a Delaware limited liability company, for $2.9 million "free
and clear" of liens and encumbrances.
The liens of secured creditors will attach to the proceeds of the
sale, according to the companies' Oct. 23 agreements.
Under the deal, Thriving Acre Seeds agreed to assume immediate
possession and rent the Kanawha facility for $25,000 per month
during the term of the lease, which is set to terminate in seven
months or upon the closing of the sale, whichever occurs first.
The closing date for the sale is no later than May 15, 2024.
About Global Processing Inc.
Global Processing, Inc. -- http://www.globalprocessing.org/--
supplies customers around the world with value-added, quality,
farm-grown food products. The company is based in Kanawha, Iowa.
Global Processing filed a petition for relief under Chapter 11 of
the Bankruptcy Code (Bankr. N.D. Iowa Case No. 22-00669) on Oct.
24, 2022, with $10 million to $50 million in both assets and
liabilities. David M. Wilcox, president of Global Processing,
signed the petition.
Judge Thad J. Collins oversees the case.
The Debtor tapped Ronald C. Martin, Esq., at Day Rettig Martin, PC
as bankruptcy counsel; Nyemaster Goode, P.C. Law Firm as special
litigation counsel; Gregory DeWeese of DeWeese Consulting, LLC as
chief restructuring officer; and Oertli & Pleschourt, LLP as tax
accountant.
The U.S. Trustee for Region 12 appointed an official committee of
unsecured creditors on Dec. 1, 2022. The committee tapped Gislason
& Hunter, LLP as its counsel.
GRIES & ASSOCIATES: Court OKs Interim Cash Collateral Access
------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Texas,
Houston Division, authorized Gries & Associates, LLC to use cash
collateral on an interim basis in accordance with the budget.
The Debtor seeks to use the cash collateral for expenses set forth
in the budget and any other unforeseeable expenses that may arise
and pose a threat to the Debtor's continued operations.
A search in the Colorado Secretary of State shows that allegedly
secured positions in cash collateral are held by (1) CloudFund; (2)
Wynwood Capital; (3) Global Funding Experts; (4) Everest Business
Funding; (5) Smart Business; and (6) Ultra Funding.
As adequate protection for the use of cash collateral, all
creditors are credited replacement liens on all post-petition cash
collateral and post-petition acquired property to the same extent,
validity, and priority they possessed as of the Petition Date. The
Replacement Liens will be deemed automatically valid and perfected
with such priority as provided in the Order without any further
notice or act by any party that may otherwise be required under any
other law.
Other holders of allowed secured claims with a perfected security
interest in cash collateral will be entitled to a replacement lien
in postpetition accounts receivable, contract rights, and deposit
accounts to the same extent allowed and in the same priority as
those interests held as of the Petition Date.
The Debtor will maintain insurance on all tangible assets of the
estate and will provide written evidence of same to the United
States Trustee, no later than November 30, 2023.
The adequate protection liens in cash collateral are subject in all
respects to the carve out in an amount equal to the sum of (i) all
fees required to be paid Subchapter V Trustee, or the United States
Trustee under section 1930(a) of title 28 of the United States Code
plus interest at the statutory rate; (ii) all reasonable fees,
costs, and expenses incurred by a trustee under section 726(b) of
the Bankruptcy Code; and (iii) to the extent allowed by the Court
on an interim or final basis at any time, all unpaid fees, costs,
and expenses of the professionals retained by the Debtor under 11
U.S.C. section 327.
A continued hearing on the matter is set for November 20, 2023 at 9
a.m.
A copy of the motion is available at https://urlcurt.com/u?l=DDmWaL
from PacerMonitor.com.
A copy of the order is available at https://urlcurt.com/u?l=TvXzs8
from PacerMonitor.com.
A copy of the budget is available at https://urlcurt.com/u?l=z37Hdb
from PacerMonitor.com.
The Debtor projects $32,000 in cash receipts and $23,928 in cash
disbursements for 30 days.
About Gries & Associates, LLC
Gries & Associates, LLC sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. S.D. Tex. Case No. 23-34224) on
November 1, 2023. In the petition signed by Blaze Gries, owner, the
Debtor disclosed up to $500,000 in both assets and liabilities.
Judge Jeffrey P. Norman oversees the case.
Robert C Lane, Esq., at the Lane Law Firm, represents the Debtor as
legal counsel.
GUR MEAT: Gets Extension to File Plan & Disclosures Until Dec. 1
----------------------------------------------------------------
Gur Meat Inc. sought and obtained a 30-day extension, until Dec. 1,
2023, of the deadline to file a Chapter 11 Plan and a Disclosure
Statement.
The Debtor is still in the process of reconciling the data for the
preparation of the Plan and Disclosure Statement, reviewing the
proofs of claim filed in the case and assessing the feasibility of
the plan. In addition, negotiations with Banco Popular are ongoing
and the Debtor continues its pursuit of a consensual plan. As
such, the Debtor deems that additional time is warranted to
finalize such negotiation, and the reconciliation of claims to
propose a complete, viable and effective plan of reorganization.
The Debtor deems that an extension of time of 30 days will suffice
to comply with the order and finalize the terms to be included in
the Disclosure Statement and Plan.
GUR MEAT INC sought Chapter 11 protection (Bankr. D.P.R. Case No.
23-bk-01914) on June 23, 2023.
Counsel for the Debtor:
Javier Vilariño, Esq.
VILARIÑO & ASSOCIATES, LLC
P.O. Box 9022515
San Juan, PR 00902-2515
Tel. (787) 565-9894
E-mail: jvilarino@vilarinolaw.com
HA STEWART: Court OKs Cash Collateral Access on Final Basis
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of Pennsylvania
authorized H.A. Stewart Trucking LLC to use cash collateral on a
final basis in accordance with the budget, with a 10% variance.
The court said the pre-petition liens of any creditor with an
interest in cash collateral will continue post-petition but said
liens will not be greater post-petition than the value of their
lien at the inception of the Chapter 11 case.
The Debtor is directed to make monthly adequate protection payments
to the U.S. Small Business Administration in the amount of $731 per
month with first payment being due on or before November 5, 2023
and by the 5th of every month thereafter until further Order of the
Court.
A copy of the court's order and the Debtor's budget is available at
https://urlcurt.com/u?l=xBeNF6 from PacerMonitor.com.
The Debtor projects $65,000 in revenue and $63,857 in total
expenses.
About H.A. Stewart Trucking LLC
H.A. Stewart Trucking LLC sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. W.D. Pa. Case No. 23-22125) on
October 5, 2023. In the petition signed by Hussien Ali Stewart,
member, the Debtor disclosed up to $500,000 in assets and up to $1
million in liabilities.
Judge Jeffery A. Deller oversees the case.
Christopher M. Frye, Esq., at Steidl & Steinberg, P.C., represents
the Debtor as legal counsel.
HALF LION BREWING: Case Summary & 14 Unsecured Creditors
--------------------------------------------------------
Debtor: Half Lion Brewing Company, LLC
P.O. Box 1845
Sumner, WA 98390
Business Description: Half Lion is a beer manufacturing company.
Chapter 11 Petition Date: November 9, 2023
Court: United States Bankruptcy Court
Western District of Washington
Case No.: 23-41981
Judge: Hon. Mary Jo Heston
Debtor's Counsel: Steven Palmer, Esq.
CURTIS, CASTEEL & PALMER, PLLC
3400 188th St. SW, Ste 565 565
Lynwood WA 98037
Email: spalmer@curtislaw-pllc.com
Total Assets: $261,946
Total Liabilities: $1,308,426
The petition was signed by Jason Nelson as managing member.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 14 largest unsecured creditors is available
for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/4RT6PUQ/Half_Lion_Brewing_Company_LLC__wawbke-23-41981__0001.0.pdf?mcid=tGE4TAMA
HALF LION: Case Summary & 14 Unsecured Creditors
------------------------------------------------
Debtor: Half Lion Public House LLC
2019 West Meekr St
Kent, WA 98032
Business Description: The Debtor owns and operates a
restaurant/bar.
Chapter 11 Petition Date: November 9, 2023
Court: United States Bankruptcy Court
Western District of Washington
Case No.: 23-12195
Judge: Hon. Timothy W. Dore
Debtor's Counsel: Steven Palmer, Esq.
CURTIS, CASTEEL & PALMER, PLLC
3400 188th St., SW Ste 565 565
Lynwood WA 98037
Phone: (425) 409-2745
Email: spalmer@curtislaw-pllc.com
Total Assets: $180,637
Total Liabilities: $1,133,209
The petition was signed by Jason Nelson as managing member.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 14 unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/4GA3EQI/Half_Lion_Public_House_LLC__wawbke-23-12195__0001.0.pdf?mcid=tGE4TAMA
HAWKEYE ENTERTAINMENT: Has Deal on Cash Collateral Access
---------------------------------------------------------
Hawkeye Entertainment, LLC asks the U.S. Bankruptcy Court for the
Central District of California, San Fernando Valley Division, for
authority to use cash collateral in accordance with its agreement
with the U.S. Small Business Administration.
The parties agreed that the Debtor may use cash collateral, subject
to the SBA receiving a replacement lien in the Debtor's assets with
the same extent, priority and validity as the SBA's pre-petition
secured claim.
W.E.R.M Investments, LLC operates a successful nightclub and
entertainment venue, Exchange LA, ranked among the top 10 music
venues globally.
The sub-tenancy was approved under a lease with Smart Capital
Investments, which has been engaged in a campaign to terminate the
lease for over a decade. Michael Chang, the principal of Smart
Capital, has filed a Chapter 11 case to stay the termination of the
lease, resulting in numerous appeals and millions of dollars in
professional fees and costs.
The Debtor filed two prior Chapter 11 cases, each of which were
triggered by actions taken by the landlord in attempts to terminate
the Lease and the Debtor's right to possession of the Property, as
follows:
(1) In re Hawkeye Entertainment, LLC, Case No. 1:13-bk-16307-MT,
U.S. Bankruptcy Court, Central District of California, San Fernando
Valley Division, Chapter 11 filed September 30, 2013, assigned to
the Honorable Maureen Tighe. The plan in the First Case was
confirmed June 20, 2016.
(2) In re Hawkeye Entertainment, LLC, Case No. 1:19-bk-12102-MT,
U.S. Bankruptcy Court, Central District of California, San Fernando
Valley Division, Chapter 11 filed August 21, 2019, assigned to the
Honorable Maureen Tighe. The plan in the Second Case was confirmed
by order entered on August 6, 2021. The confirmation order in the
Second Case is a final order. The effective date of the plan in the
Second Case occurred on October 20, 2021.
In the Second Case, the Debtor obtained Court approval to obtain
post-petition financing in the form of a secured credit facility in
the amount of $150,000 from the SBA by order entered September 23,
2020. The SBA Loan is secured by all collateral of the Debtor as
defined in the SBA Security Agreement dated August 1, 2020 and as
perfected by the UCC-1 Financing Statement filed with the
California Secretary of State on August 10, 2020. The outstanding
balance of the SBA Loan is approximately $151,200.
A copy of the motion is available at https://urlcurt.com/u?l=pcPjhW
from PacerMonitor.com.
About Hawkeye Entertainment, LLC
Hawkeye Entertainment, LLC sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. C.D. Cal. Case No. 23-11501) on
October 18, 2023. In the petition signed by Adi McAbian, president
of Saybian Gourmet, Inc., member of Hawkeye, the Debtor disclosed
up to $10 million in both assets and liabilities.
Judge Martin R. Barash oversees the case.
Sandford L. Frey, Esq., at Leech Tishman Fuscaldo & Lampl, LLC,
represents the Debtor as legal counsel.
HEYWOOD HEALTHCARE: Hires Flick Law Group as Conflicts Counsel
--------------------------------------------------------------
Heywood Healthcare, Inc. and affiliates seek approval from the U.S.
Bankruptcy Court for the District of Massachusetts to hire Flick
Law Group, P.C. as their local and conflicts counsel.
The firm's services include:
a. providing legal advice regarding Massachusetts local rules,
practices, precedents, and procedures and providing substantive and
strategic advice on how to accomplish the Debtors' goals in
connection with prosecution of this case, in all aspects of each
bankruptcy proceeding;
b. handling inquiries and calls from various creditors and
counsel to interested parties regarding pending matters and the
general status of these Chapter 11 Cases;
c. appearing in this court and any appellate courts to
represent and protect the interests of the Debtor and their
estates;
d. attending meetings including any meeting of creditors and
negotiating with representatives of creditors and other
parties-in-interest; and
e. performing all other necessary legal services.
The firm currently holds a retainer in the amount of $122,326.21.
The firm will be paid at these rates:
John M. Flick, Senior Counsel $350 per hour
Stephanie Orlow, Paralegal $135 per hour
As disclosed in the court filings, Flick Law is a "disinterested
person," as that phrase is defined in Sec. 101(14) of the
Bankruptcy Code.
The firm can be reached through:
John M. Flick, Esq.
Flick Law Group, P.C.
144 Central St #201
Gardner, MA 01440
Phone: (978) 632-7948
Email: jflick@flicklawgroup.com
About Heywood Healthcare, Inc.
Heywood Healthcare, Inc. is a non-profit community-owned hospital
licensed for 134 bed hospital, located in Gardner, Massachusetts.
The Debtors sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Mass. Lead Case No. 23-40817) on October
1, 2023. In the petition signed by Thomas Sullivan, co-chief
executive officer, the Debtor disclosed up to $500,000 in both
assets and liabilities.
Judge Elizabeth D. Katz oversees the case.
John M. Flick, Esq., at Flick Law Group, PC, represents the Debtor
as legal counsel.
HEYWOOD HEALTHCARE: Hires Huron as Restructuring Support Advisor
----------------------------------------------------------------
Heywood Healthcare, Inc. and affiliates seek approval from the U.S.
Bankruptcy Court for the District of Massachusetts to hire Huron
Consulting Services LLC and its personnel as their restructuring
support advisor.
The firm's services include:
(a) providing assistance in the preparation of or review of
reports or filings as required by the Bankruptcy Court or the
Office of the United States Trustee, including, but not limited to,
initial US Trustee Package, schedules of assets and liabilities,
statements of financial affairs and monthly operating reports;
(b) providing assistance in the preparation of or review of
the Debtors' financial information, including, but not limited to,
analyses of cash receipts and disbursements, a 13-week cash flow
statement, or other financial statement items and proposed
transactions for which Bankruptcy Court approval is sought;
(c) providing assistance with the coordination with incumbent
lenders to gain access to cash collateral and/or arrangement of DIP
financing with incumbent or new lenders if needed;
(d) developing and implementing of cash management strategy to
address liquidity issues, if needed;
(e) providing assistance with the analysis, tracking and
reporting regarding cash collateral and any debtor-in-possession
financing arrangements and budgets;
(f) providing assistance with the implementation of bankruptcy
accounting procedures as may be required by the Bankruptcy Code and
generally accepted accounting principles., including, but not
limited to, Accounting Standards Codification Topic
852-Reorganizations;
(g) developing and evaluating potential employee incentive,
retention and severance plans, if needed;
(h) providing assistance with supplier / vendor management
process and procedures, including implementation of supplier
accounts payable controls;
(i) providing assistance with the preparation of 503(b)(9)
claim analysis;
(j) providing analysis of assumption and rejection issues
regarding executory contracts and leases and preparation of related
rejection damage analyses;
(k) providing assistance in the preparation and review of
proposed business plans and the business and financial condition of
the Debtors generally;
(l) providng other such functions as requested by the Debtors
or their counsel to assist the Debtors in these Chapter 11 cases.
The firm will be paid at these hourly rates:
Managing Director $950 to $1,315
Senior Director $825 to $950
Director $690 to $750
Manager $575 to $650
Associate $450 to $550
Analyst $325 to $500
The firm will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Stephen Darr, managing director at Huron, disclosed in a court
filing that his firm is a "disinterested person" as the term is
defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Stephen Darr
Huron Consulting Services, LLC
1166 Avenue of the Americans
3rd Floor, NY 10036
Tel: (212) 785-1900
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.
HIGH VALLEY INVESTMENTS: Court OKs $3.5MM DIP Loan from DJL
-----------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized
High Valley Investments, LLC and affiliates to use cash collateral
and obtain postpetition financing, on a further interim basis.
The Debtor obtained postpetition secured financing in an aggregate
principal amount not to exceed $3.5 million from DJL Investments,
LLC.
The Debtors are authorized to draw an amount not to exceed $2.2
million in the aggregate during the Interim Period.
The maturity date of the DIP Agreement will be no later than April
1, 2025.
The Debtor is also permitted to enter into A Promissory Note and
Deed of Trust with DJL Investments LLC as lender.
The Debtors are parties to a Loan Agreement dated November 25, 2019
with Bank of America, N.A., as the original lender, with Wells
Fargo Bank, N.A., as the master servicer thereunder, Wilmington
Trust, National Association, as trustee for the benefit of the
registered holders of BANK 2020-BNK25, Commercial Mortgage
Pass-Through Certificates, Series 2020-BNK25, as the current
holder, beneficiary, secured party and/or assignee under all of the
Prepetition Loan Documents, and its special servicer, CWCapital
Asset Management LLC.
An immediate need exists for the Debtors to obtain funds pursuant
to borrowings under the DIP Facility to continue operations, fund
operating expenses, and administer and preserve the value of their
estates pending the Final Hearing.
To secure the DIP Obligations, the DIP Lender is granted valid,
enforceable, and fully perfected senior priming liens in and on
those certain parcels of real property known collectively as
"Kimberly Gardens," 14802–14894 36th Avenue Court East, Tacoma,
Washington 98446, owned by Debtor Kimberly Gardens, LLC, which will
be senior to any liens existing pursuant to those deeds of trust
recorded on August 18, 2017 and January 25, 2022.
The DIP Liens are deemed fully perfected liens and security
interests, effective and perfected upon the date of the Interim
Order, without the necessity of execution by the Debtors of
mortgages, security agreements, pledge agreements, financing
agreements, financing statements, account control agreements, or
any other agreements, filings, or instruments.
As adequate protection for the use of cash collateral, the
Prepetition Lenders are granted valid, perfected, postpetition
security interests and liens in and on the Prepetition Cash
Collateral and a superiority administrative claim against the
Prepetition Borrowers' estates, as and to the extent provided in 11
U.S.C. section 507(b).
In addition, the debt service payment, made in the amount of
$60,959 on October 2, 2023 to the Prepetition Lenders, is
approved.
These events constituTe an "Event of Default":
(a) The occurrence of an "Event of Default" by the Debtors
pursuant to the DIP Agreement;
(b) Conversion of any of the Chapter 11 Cases to a case under
chapter 7 of the Bankruptcy Code; and
(c) Failure to pay any fees due and payable pursuant to 28
U.S.C. section 1930.
A final hearing on the matter is set for December 4, 2023 at 1
p.m.
A copy of the order is available at https://urlcurt.com/u?l=dBB2Mx
from PacerMonitor.com.
About High Valley Investments
High Valley Investments, LLC and its affiliates sought relief under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No.
23-11616) on Sept. 27, 2023. In the petitions signed by John P.
Madden, chief restructuring officer, High Valley disclosed up to
$100,000 in estimated assets and up to $50 million in estimated
liabilities.
Judge Thomas M. Horan oversees the cases.
The Debtors tapped Young Conaway Stargatt & Taylor, LLP as legal
counsel; Gibson, Dunn & Crutcher LLP as special counsel; and
Emerald Capital Advisors Corp. to provide a chief restructuring
officer (CRO) and additional personnel. Stretto, Inc. is the
administrative advisor.
IAFFORD NY: Jolene Wee of JW Infinity Named Subchapter V Trustee
----------------------------------------------------------------
The U.S. Trustee for Region 2 appointed Jolene Wee of JW Infinity
Consulting, LLC as Subchapter V trustee for iAfford NY, LLC.
Ms. Wee will be paid an hourly fee of $595 for her services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Ms. Wee declared that she is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Jolene E. Wee
JW Infinity Consulting, LLC
447 Broadway 2nd Fl #502
New York, NY 10013
Email: jwee@jw-infinity.com
Phone: (929) 502-7715
Fax: (646) 810-3989
Email: jwee@jw-infinity.com
About iAfford NY
iAfford NY, LLC, filed Chapter 11 petition (Bankr. E.D.N.Y. Case
No. 23-43825) on Oct. 20, 2023, with $50,001 to $100,000 in assets
and $1 million to $10 million in liabilities.
Judge Jil Mazer-Marino oversees the case.
John D. Giampolo, Esq., at Rosenberg & Estis, P.C. represents the
Debtor as legal counsel.
IMEDIA BRANDS: Unsecureds to Recover Up to 2% in Liquidating Plan
-----------------------------------------------------------------
Legacy IMBDS, Inc. (f/k/a iMedia Brands, Inc.) and its debtor
Affiliates, filed with the U.S. Bankruptcy Court for the District
of Delaware a Combined Joint Chapter 11 Plan of Liquidation and
Disclosure Statement dated November 2, 2023.
As of the Petition Date, the Company was a leading interactive
media company capitalizing on the convergence of entertainment,
ecommerce, and advertising.
Prior to the closing of the Sale, the Company operated and reported
three operating business segments: (i) entertainment; (ii) consumer
brands; and (iii) media commerce services, and employed
approximately 700 employees in the United States, Canada, and
Germany between the Debtors and their non-Debtor subsidiaries,
including approximately 600 individuals employed by the Debtors.
As a result of this continued postpetition outreach, the Debtors
received 12 additional proposals to purchase some or substantially
all of the Debtors' assets, including indications of interest from
Kinbow IM Holdings, Inc., Apparel Solutions Inc., and the Buyer.
Following the status conference held on July 27, 2023 in respect of
the proposed sale and additional proposals received by the Debtors
for the acquisition of some or all of their assets, on July 28,
2023, the Debtors filed the Bidding Procedures Motion. On August 3,
2023, the Bankruptcy Court entered the Bidding Procedures Order
approving the Bidding Procedures
Following the conclusion of the Auction, the Debtors continued to
work diligently with the Buyer to finalize the Purchase Agreement
and obtain approval of the Sale. In connection therewith, the
Bankruptcy Court held a hearing on August 14, 2023, to, among other
things, consider the Sale and entered the Sale Order approving the
same on August 15, 2023.
"Buyer" means IV Media, LLC, together with its successors and
permitted assigns.
This Plan is a joint plan for each of the Debtors and presents
together Classes of Claims against, and Interests in, the Debtors.
The Plan does not provide for the substantive consolidation of the
Debtors.
Class 4 consists of the Unsecured Claims, including any Claim held
by Synacor or C&B Newco, LLC against any Debtor. Each Holder of an
Allowed Unsecured Claim shall receive a beneficial interest in the
Liquidating Trust entitling such Holder to such Holder's Pro Rata
share (calculated based on the total aggregate amount of Allowed
Claims in Class 4) of the Unsecured Claims Distribution Proceeds,
if any. Class 4 is Impaired under the Plan. This Class will receive
a distribution of 0% to 2% of their allowed claims.
Interests in Legacy IMBDS will be canceled, released, and
extinguished as of the Effective Date, and will be of no further
force or effect, and Holders of Interests in Legacy IMBDS will not
receive any distribution on account of such Interests in Legacy
IMBDS.
The Liquidating Trust Assets shall be used to fund the
distributions to Holders of Allowed Claims against the Debtors in
accordance with the treatment of such Claims provided pursuant to
the Plan and subject to the terms provided herein.
On or prior to the Effective Date, the Debtors, on their own behalf
and on behalf of the Beneficiaries, will execute the Liquidating
Trust Agreement and will take all other steps necessary to
establish the Liquidating Trust pursuant to the Liquidating Trust
Agreement. On the Effective Date, and in accordance with and
pursuant to the terms of the Plan, the Debtors will transfer to the
Liquidating Trust all of their rights, title, and interests in all
of the Liquidating Trust Assets.
A full-text copy of the Combined Plan and Disclosure Statement
dated November 2, 2023 is available at
https://urlcurt.com/u?l=3bSw0L from Stretto Inc., claims agent.
Counsel for Debtors:
Ryan Preston Dahl, Esq.
Cristine Pirro Schwarzman, Esq.
Ropes & Gray LLP
1211 Avenue of the Americas
New York, NY 10036
Telephone: (212) 596-9000
Facsimile: (212) 596-9090
Email: ryan.dahl@ropesgray.com
cristine.schwarzman@ropesgray.com
- and -
ROPES & GRAY LLP
Stephen L. Iacov, Esq.
Jeramy D. Webb, Esq.
191 North Wacker Drive, 32nd Floor
Chicago, Illinois 60606
Telephone: (312) 845-1200
Facsimile: (312) 845-5500
E-mail: stephen.iacovo@ropesgray.com
jeramy.webb@ropesgray.com
PACHULSKI STANG ZIEHL & JONES LLP
Laura Davis Jones, Esq.
Timothy P. Cairns, Esq.
919 North Market Street, 17th Floor
P.O. Box 8705
Wilmington, Delaware 19899-8705 (Courier 19801)
Telephone: (302) 652-4100
Facsimile: (302) 652-4400
E-mail: ljones@pszjlaw.com
tcairns@pszjlaw.com
About iMedia Brands
iMedia Brands, Inc., is an interactive, global media company that
offers, manages, and markets merchandise, including men's and
women's accessories and apparel, under owned and third-party brands
through various entertainment, e-commerce, and digital service
platforms.
iMedia Brands and 11 of its affiliates filed for bankruptcy
protection on June 28, 2023 (Bankr. D. Del., Lead Case No.
23-10852). The petitions were signed by James Alt as chief
transformation officer.
The Debtors reported as of April 29, 2023, total assets of
$272,596,462 and total liabilities of $373,713,748.
Judge Karen B. Owens oversees the case.
The Debtors tapped Ropes & Gray, LLP and Pachulski Stang Ziehl &
Jones, LLP as bankruptcy counsels; Huron Consulting Services, LLC
as financial advisor; Lincoln Partners Advisors, LLC as investment
banker; and Stretto, Inc. as notice, claims and administrative
agent.
The U.S. Trustee for Regions 3 and 9 appointed an official
committee to represent unsecured creditors in the Debtors' Chapter
11 cases. The committee tapped McDermott Will & Emery, LLP as legal
counsel and AlixPartners, LLP as financial advisor.
INSPIREMD INC: Incurs $5.2 Million Net Loss in Third Quarter
------------------------------------------------------------
InspireMD, Inc. filed with the Securities and Exchange Commission
its Quarterly Report on Form 10-Q disclosing a net loss of $5.18
million on $1.56 million of revenues for the three months ended
Sept. 30, 2023, compared to a net loss of $4.53 million on $1.43
million of revenues for the three months ended Sept. 30, 2022.
For the nine months ended Sept. 30, 2023, the Company reported a
net loss of $14.51 million on $4.44 million of revenues compared to
a net loss of $13.65 million on $4.14 million of revenues for the
same period in 2022.
As of Sept. 30, 2023, the Company had $50.02 million in total
assets, $6.76 million in total liabilities, and $43.26 million in
total equity.
As of Sept. 30, 2023, cash, cash equivalents and short-term
investments and bank deposits were $43.0 million compared to $17.8
million as of Dec. 31, 2022.
InspireMD said, "As of September 30, 2023, we have the ability to
fund our planned operations for at least the next 12 months from
issuance date of the financial statement. However, we expect to
continue incurring losses and negative cash flows from operations
until our products (primarily CGuard EPS) reach commercial
profitability. Therefore, in order to fund our operations until
such time that we can generate substantial revenues, we may need to
raise additional funds.
"Our plans include continued commercialization of our products and
raising capital through sale of additional equity securities, debt
or capital inflows from strategic partnerships. There are no
assurances, however, that we will be successful in obtaining the
level of financing needed for our operations. If we are
unsuccessful in commercializing our products or raising capital, we
may need to reduce activities, curtail or cease operations."
CEO Comments
Marvin Slosman, CEO of InspireMD, commented: "During the third
quarter, we continued to grow revenue in our served markets outside
the U.S., generating nearly 9% year-over-year revenue growth, while
continuing our post-enrollment work toward a potential approval and
launch of CGuard EPS in the U.S. in the first half of 2025.
"As previously announced, we were pleased to have presented very
compelling 30-day safety data from C-GUARDIANS at VIVA23, one of
the most important gatherings of endovascular specialists in the
world. The results are consistent with eight previously completed
clinical studies demonstrating extremely low rates of complications
– death, stroke or myocardial infarction - as compared to
historical data on competing first generation stents as well as
conventional surgery (carotid endarterectomy, or CEA). The data
emerging from C-GUARDIANS adds to the vast and growing body of
evidence demonstrating the outstanding short- and long-term patient
outcomes facilitated by CGuard EPS, which remains the cornerstone
of our business.
"Subsequent to the end of the quarter, CMS issued its final
National Coverage Determination (NCD), expanding coverage of CAS to
include both asymptomatic and standard risk patients, significantly
expanding the U.S. CAS addressable market. As we are focused on
developing products for both CAS and TCAR approaches, we view this
as very positive for our company, and a change that we believe will
accelerate the ongoing shift toward an endovascular 'stent first'
approach for all carotid interventions from the current more
invasive surgery standard of care.
"I am extremely pleased by our continued execution against our 2023
objectives and the transformational tailwind provided by the CMS
coverage determination that will catalyze a stent-first approach to
the treatment of carotid disease, a market we have invested to
transform."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1433607/000149315223039519/form10-q.htm
About InspireMD
Headquartered in Tel Aviv, Israel, InspireMD, Inc. --
http://www.inspiremd.com-- is a medical device company focusing on
the development and commercialization of its proprietary MicroNet
stent platform technology for the treatment of complex vascular and
coronary disease. A stent is an expandable "scaffold-like" device,
usually constructed of a metallic material, that is inserted into
an artery to expand the inside passage and improve blood flow. Its
MicroNet, a micron mesh sleeve, is wrapped over a stent to provide
embolic protection in stenting procedures.
InspireMD reported a net loss of $18.49 million for the year ended
Dec. 31, 2022, compared to a net loss of $14.92 million for the
year ended Dec. 31, 2021. As of Dec. 31, 2022, the Company had
$24.65 million in total assets, $7.26 million in total liabilities,
and $17.39 million in total equity.
Tel-Aviv, Israel-based Kesselman&Kesselman, the Company's auditor
since 2010, issued a "going concern" qualification in its report
dated March 30, 2023, citing that the Company has suffered
recurring losses from operations and cash outflows from operating
activities that raise substantial doubt about its ability to
continue as a going concern.
INSULATED WALL: Court OKs Cash Access, DIP Loan from XYiP
---------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Wisconsin
authorized Insulated Wall Holdings, LLC to, among other things, use
cash collateral and obtain postpetition financing, on an interim
basis.
The Debtor is permitted to borrow from XYiP Acquisitions, LLC, up
to the aggregate principal amount outstanding at any one time of
$50,000. If the aggregate of the Revolving Loans exceeds $50,000,
the Debtor will immediately, without request, prepay Revolving
Loans to reduce their aggregate balance to $50,000 or less.
As consideration for the DIP Financing Agreement and financial
accommodations under it, the Debtor agrees to pay interest at 8.5%
per annum.
The DIP Financing Agreement will terminate upon the earlier of any
of the following to occur:
1. An Event of Default occurring;
2. The effective date of any plan of reorganization being
confirmed in the Bankruptcy Case; or
3. March 15, 2024.
These events constitute an "Event of Default":
(a) The Debtor fails to pay any principal or interest when due
thereunder;
(b) The Debtor fails in the performance or observance of any
covenant, condition, provision or term contained therein;
(c) The balance due on the Revolving Line of Credit exceeds
$50,000;
(d) The DIP Financing Agreement, or any document required
under it will, at any time after their respective execution and
delivery, and for any reason, cease to be in full force and effect
or will be declared null and void, or be revoked or terminated, or
the validity or enforceability thereof or hereof shall be contested
by the Debtor, or the Debtor will deny that it has any or further
liability or obligation, as the case may be; and
(e) The Bankruptcy Court denies a motion to assign customer
contracts that was approved by the Lender.
First American Bank Corporation, SouthStar, the U.S. Department of
the Treasury - Internal Revenue Service, the State of Wisconsin
Department of Workforce Development, the State of Wisconsin
Department of Revenue and Transcon Steel of Texas, Inc. may have an
interest in the cash collateral.
As adequate protection, the Debtor will grant all creditors with an
interest in cash collateral replacement liens of the same priority
to the same extent in the cash collateral as existed immediately
before the Petition Date.
The Replacement Liens are deemed automatically perfected upon entry
of the order without the necessity of a secured creditor taking
possession, filing financing statements, mortgages, or other
documents.
The Debtor must maintain general property and liability coverage
consistent with the coverage maintained before the petition date
and as required by its lending agreements with First American and
SouthStar.
A copy of the Court's order and the Debtor's budget is available at
https://urlcurt.com/u?l=X1kptk from PacerMonitor.com.
The Debtor projects total expenses, on a weekly basis, as follows:
$24,488 for the week ending November 11, 2023;
$39,776 for the week ending November 18, 2023; and
$28,026 for the week ending November 25, 2023.
About Insulated Wall Holdings, LLC
Insulated Wall Holdings, LLC manufacturers insulated walls that are
sold to builders. It operates under the tradename, Wally Walls. It
changed its business model from supplying insulated walls for
commercial business construction to supplying residential
construction.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D. Wisc. Case No. 23-24709-gmh) on
October 16, 2023. In the petition signed by David T. Wallach, chief
executive officer, the Debtor disclosed up to $10 million in both
assets and liabilities.
Judge G. Michael Halfenger oversees the case.
Evan P. Schmit, Esq., at Kerkman & Dunn, represents the Debtor as
legal counsel.
INSULET CORP: S&P Raises ICR to 'B+', Outlook Stable
----------------------------------------------------
S&P Global Ratings raised its issuer credit rating on Acton,
Mass.-based insulin delivery device manufacturer Insulet Corp. to
'B+' from 'B'. S&P also raised its issue-level rating on the
company's $500 million senior secured term loan B due 2028 and $300
million revolving credit facility to 'BB-' from 'B+'.
The stable rating outlook on Insulet reflects S&P's expectation
that the company will maintain its improved operating performance,
with adjusted debt to EBITDA at or below 5x and free cash flow to
debt above 5% in 2024.
Strong growth and margin expansion support deleveraging and
improved cash generation. Insulet's revenue grew 27% in the first
nine months of 2023 compared with the same period in 2022, driven
by continuous expansion of its global customer base and the fast
adoption of its new generation product--Omnipod 5--which is
designed to provide enhanced connectivity and automation features
such as integration with continuous glucose monitoring devices and
insulin management from a smartphone device.
Following its Omnipod 5 launch in the U.S. (during the third
quarter of 2022), U.S. Omnipod sales increased 41% in the first
nine months of 2023. In the International Omnipod segment, the
company obtained a CE Mark approval for Omnipod 5 under the
European Medical Device Regulation in September 2022 and launched
the product in U.K. and Germany in 2023, with a wider international
release planned in 2024. S&P said, "We project that continuous
transition from insulin injections to Insulet's injection pumps,
combined with a continued increase in type 2 patients, will support
the company's performance in the coming years. Our forecast assumes
the company's overall revenue increases 26%-27% in 2023 and 15%-20%
in 2024."
Insulet's S&P Global Ratings-adjusted EBITDA margin improved by 100
basis points to about 17.5% in the last 12 months ended Sept. 30,
2023, compared with 16.5% in fiscal 2022. S&P expects its EBITDA
margin will be about 17.5% in 2023, improving to about 18% in 2024
as inflationary pressures abate and the company gains economies of
scale.
Ongoing innovation results in favorable competitive positioning. In
addition to the launch of Omnipod 5 in Germany, during the third
quarter of 2023, the company achieved several other business
development milestones that will enable it to expand its
addressable populations and further improve its technological
advantage:
-- It launched a U.S. commercial pilot program for Omnipod GO, the
company's basal-only Pod, that when launched will expand its
addressable populations to basal only insulin users; and
-- It received the U.S. Food and Drug Administration's (FDA)
510(k) clearance for the Omnipod 5 iOS App, and it announced that
it is planning a limited market release in the U.S. of both the iOS
App and Omnipod 5 integrated with Dexcom's G7 sensor in early
2024.
S&P said, "We believe that Insulet's products offer significant
technological advantages (i.e., its small size and tubeless insulin
delivery) and position it favorably versus traditional insulin
injections and tube-based pumps. We also view the company's
business model in the U.S. marketplace as favorable. It enables the
company to distribute Omnipod via the pharmacy channel, based on
its Medicare Part D classification as a disposable device rather
than the durable medical equipment (DME) classification of its
competitors. The Part D classification eliminates a large up-front
payment required under the DME classification, which we believe is
more attractive to payors. We believe it should also make
direct-to-patient marketing campaigns more effective."
S&P said, "While we believe GLP-1s could potentially limit
Insulet's total addressable market longer-term, biological and
behavioral obstacles to the efficacy of GLP-1s and relatively low
penetration of injection pumps globally support its growth
prospects over the coming years. The use of glucagon-like peptide-1
agonists, commonly referred to as GLP-1s, to treat type 2 diabetes
was approved by the FDA in 2005. Since their introduction, studies
have shown that while GLP-1s can delay the time to progression to
insulin therapy for type 2 patients, they do not stop the
underlying biological condition (beta cell decline) and have not
changed the population prevalence of advanced disease. In type 1
diabetes, GLP-1s are not indicated for use because they have not
been shown sufficient efficacy. Thus, we believe that within the
population already diagnosed with diabetes and requiring insulin
injections (an estimated 64 million patients worldwide in 2022, 11
million of them in the markets Insulet operates, comprising
approximately 5 million of type 1 and 6 million of type 2) these
drugs will have only limited impact, consistent with the historical
evidence."
However, off-label demand for GLP-1s has recently skyrocketed in
the U.S. and Europe mainly due to their weight loss benefits (about
15% weight loss on average), and some manufacturers are seeking
fast-track approval from the FDA for a weight-loss indication.
Given the robust demand, S&P believes several more weight-loss
medications are likely to arrive to the market in the coming
years.
S&P said, "We believe that if taken by a larger percentage of the
pre-diabetes population, GLP-1s could potentially reduce obesity
levels globally, and thus somewhat reduce, over the long-term, the
total addressable market for insulin injections. At the same time,
we believe there are biological, behavioral, and economic obstacles
that would limit this effect. The studies are not yet available to
answer to what extent treatment of obesity by GLP-1s reduces risk
for diabetes at later stages in life. According to studies among
type 2 diabetes patients, GLP-1 treatment benefits with regard to
diabetes indicators wane over time. In addition, there is evidence
that patients gain weight relatively quickly after stopping GLP-1
treatments, pointing to adherence challenges that could limit
long-term effectiveness. Typically, patients need to make other
changes to their lifestyle (i.e. physical activity, blood glucose
monitoring, etc.) to gain better results. Also, most of the GLP-1s
(except one, Wegovy) are currently not approved for weight loss and
have only limited coverage by health insurance plans, with about
two-thirds of the payments for these medications in the U.S. made
out-of-pocket, averaging about $1,000 per month. We believe these
factors present meaningful barriers that would limit the overall
effectiveness of GLP-1s over time in changing the progression of
type 2 diabetes.
"We also believe that the current addressable market, estimated at
about 11 million global insulin users, the majority of whom use
multiple daily injections, compared with our estimate of approx.
400,000 users the company is currently serving, provides it with
ample opportunities to expand its injection pump business in the
coming years.
"The company's large cash balance provides cushions for unexpected
headwinds. Although we do not net cash in our leverage
calculations, we acknowledge the company's large cash and
short-term investments balance ($685.4 million) as of Sept. 30,
2023, which should ensure funding for needed research and
development and capital investments. We also believe it provides
cushion against unforeseen headwinds and support for tuck-in
acquisitions.
"The stable outlook on Insulet reflects our expectation that the
company will maintain its improved operating performance, with
adjusted debt to EBITDA at or below 5x and free cash flow to debt
above 5% in 2024."
S&P could lower the ratings over the next 24 months if the
company's operating performance deteriorated materially or if its
financial policy became more aggressive such that:
-- It appeared likely FOCF to debt would remain below 5%, and
-- Debt to EBITDA increased materially above 5x on a sustained
basis.
This could materialize if Insulet faced operating headwinds that
pressured its operating margin or if it adopted a more aggressive
expansion strategy, resulting in higher leverage. In addition, it
could materialize if the company refinanced its convertible debt in
full at a significantly higher interest rate while simultaneously
depleting its cash balance.
S&P said, "Although unlikely over the next 12 months, we could
raise the issuer credit rating by one notch to 'BB-' if we believed
that Insulet's business diversification and competitive position
had improved, along with solid revenue growth trajectory and EBITDA
margin expansion. Alternatively, we could raise the rating if the
company adopted more conservative financial policies with leverage
sustained below 4x and FOCF to debt over 10%."
IYS VENTURES: Court OKs Cash Collateral Access Thru Dec 16
----------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Illinois,
Eastern Division, granted IYS Ventures, LLC authority to use cash
collateral, on an interim basis through December 16, 2023.
As previously reported by the Troubled Company Reporter, the Debtor
seeks cash collateral access to fund the payment of rent and
gasoline and the various management companies which pay the
necessary expenses associated with the operation of its business.
These creditors may assert a security interest in and to the
Collateral: Byzfunder NY LLC, Fox Capital Group, Inc., Itria
Ventures, Samson Funding, and The Huntington National Bank.
Investigation into the priority and security of the Lien Claimants
is ongoing, however, the following represents the approximate claim
and basis for the secured liens:
a. Byzfunder may assert a security interest in the Collateral
pursuant to a Revenue Purchase Agreement and Security Agreement
dated October 25, 2022. Byzfunder's scheduled claim is in the
amount of $153,986.
b. Fox may assert a security interest in the Collateral
pursuant to a Future Receivables Sale and Purchase Agreement dated
November 23, 2022. Fox's scheduled claim is in the amount of
$444,005.
c. Itria asserts a security interest in the Collateral
pursuant to an agreement. Itria's scheduled claim is in the amount
of $1,492,109, which is disputed in part by the Debtor.
d. Samson may assert a security interest in the Collateral by
virtue of multiple Revenue Purchase Agreement and Security
Agreement dated, inter alia, April 8, 2022, November 21, 2022,
December 2, 2022, December 23, 2022, and March 2, 2023. Samson's
scheduled claim is in the amount of $4,091,514.
e. Huntington asserts a security interest in the Collateral by
virtue of an Order on Motion for Prejudgment Attachment dated March
16, 2023, in the case more commonly known as The Huntington
National Bank v. IYS Ventures, LLC, et al., Case No. 23- CV-01368
pending in the United States District Court for the Northern
District of Illinois.
The court ruled that as partial adequate protection to the Lien
Claimants and any other entity claiming a security interest in the
Collateral, for the use of collateral, which includes the Debtor's
equipment, fixtures, inventory, accounts, instruments, chattel
paper, general intangibles, now owned and hereafter acquired
together with all replacements, accessions, proceeds and products
and all proceeds of the Collateral, including cash and cash
equivalent pursuant to the terms of the interim Cash Collateral
Order, the Lien Claimants are granted and will have replacement
liens in and to the Collateral which will have the same validity,
perfection, and enforceability as the pre petition liens held by
the Lien Claimants without any further action by the Debtor or the
Lien Claimants and without executing or recording any financing
statements, security agreements, or other documents.
A continued hearing on the matter is set for December 13, 2023 at
10:30 a.m.
A copy of the court's order is available at
https://urlcurt.com/u?l=1Xmwq3 from PacerMonitor.com.
About IYS Ventures
IYS Ventures LLC leases, owns and operates gas stations located in
Illinois, Minnesota, Michigan, Indiana, Ohio, South Dakota,
Virginia, Wisconsin, and Louisiana.
The Debtor filed a petition for relief under Chapter 11 of the
Bankruptcy Code (Bankr. N.D. Ill. Case No. 23-06782) on May 23,
2023. In the petition filed by Muwafak Rizek, as manager and
member, the Debtor reported assets between $1 million and $10
million and liabilities between $10 million and $50 million.
Honorable Bankruptcy Judge David D. Cleary oversees the case.
The Debtor is represented by Gregory K Stern, Esq. at Gregory K.
Stern, P.C., represents the Debtor as legal counsel.
JAG CONTRACTORS: Seeks Cash Collateral Access
---------------------------------------------
JAG Contractors, Inc. asks the U.S. Bankruptcy Court for the
Eastern District of Virginia, Alexandria Division, for authority to
use cash collateral in accordance with its agreement with the U.S.
Internal Revenue Service.
The Debtor requires the use of cash collateral to pay its direct
operating expenses.
Prior to the filing of the Debtor's bankruptcy petition, the IRS
filled several tax liens against the Debtor totaling $224,846.
The obligations owing to IRS thereunder are secured by several
successive Notice(s) of Liens properly filed with the Office of the
Clerk, Virginia State Corporation Commission which encumber all
property, or rights to property belonging to the Debtor.
The Debtor has been using IRS's cash collateral from the Petition
Date through the date of the Order without the consent of SBA or
the authorization of the Court.
The Debtor recently entered negotiations with IRS seeking its
consent to the use of cash collateral, to which, the SBA
consented.
The Debtor stipulates and agrees that (i) the Debtor's cash on hand
as of the Petition Date was at least $161,504; (ii) the Debtor's
collectible accounts receivable as of the Petition Date were at
least $365,004.
Funds and cash equivalents of the Debtor are cash collateral of IRS
within the meaning of 11 U.S.C. section 363(a).
The Debtor will cease to be authorized to use the IRS Cash
Collateral on the earlier to occur of one of the following:
(i) the entry of an order authorizing the Debtor to incur
post-petition indebtedness;
(ii) non-compliance by the Debtor with any term, covenant or
provision in the Budget or the Order, after having received written
notice of the non-compliance and given 10 days to cure such
noncompliance, except the IRS’ Cash Collateral may be used solely
up to the amounts stated for in any line item in the Budget, plus
10% for each line item, during the respective monthly periods and
for the purposes identified in the Budget;
(iii) the appointment of a trustee or of an examiner for the
Debtor or the property of the estates of the Debtor (other than the
continued appointment of the Subchapter V Trustee);
(iv) the entry of a final order authorizing the Debtor’s use
of cash collateral that is not identical with respect to material
terms, conditions and provisions contained in the Order;
(v) the entry of an order staying, vacating, amending,
supplementing or modifying this Order or otherwise affecting the
validity, priority, extent, or enforceability of any of the liens
or claims granted herein; and/or
(vi) conversion or dismissal of the Debtor’s Chapter 11 Case.
As partial adequate protection for the Debtor’s use and
consumption of the Prepetition Collateral and IRS Cash Collateral
from and after the Petition Date, all prepetition liens and
security interests of IRS are reaffirmed to the same extent and
priority as such liens and security interests existed immediately
prior to the Petition Date and to further secure the IRS’
Prepetition Secured Claim, IRS will be granted and conveyed a fully
perfected security interest in and replacement lien upon all of the
Debtor's now owned or hereafter acquired equipment, inventory,
accounts, general intangibles, chattel paper, contracts, customer
agreements and fixtures, and all other assets of the Debtor.
As additional partial adequate protection to the IRS, IRS will be
granted a super priority claim in the Debtor’s chapter 11 case as
provided for in 11 U.S.C. section 507(b) with priority over any and
all other administrative expenses in the Debtor’s chapter 11 case
of any kind payable or allowed pursuant to any provision of the
Bankruptcy Code.
As additional partial adequate protection to SBA, the Debtor will
make monthly payments to the IRS of $4,863 on the 25th day of each
successive month starting November 25, 2023, until the occurrence
of a Termination Event.
A copy of the motion is available at https://urlcurt.com/u?l=USc4CP
from PacerMonitor.com.
About JAG Contractors
JAG Contractors, Inc., a company in Alexandria, Va., filed Chapter
11 petition (Bankr. E.D. Va. Case No. 23-11650) on Oct. 12, 2023,
with $1 million to $10 million in both assets and liabilities.
Josue Guzman, president, signed the petition.
Richard G. Hall Esq., represents the Debtor as legal counsel.
JAM PIZZA: May Use Cash Collateral Thru Nov 30
----------------------------------------------
The U.S. Bankruptcy Court for the Northern District of New York
authorized Jam Pizza, Inc. to use cash collateral on an interim
basis in accordance with the budget, through November 30, 2023.
The Debtor intends to reorganize and make a distribution to pay
secured creditors the full amount of the value of their collateral
and to pay a portion of the claims of general unsecured creditors.
Key Bank National Association asserts an interest in the Debtor's
cash collateral.
As adequate protection, the Secured Creditor is granted valid,
binding, enforceable and perfected enforceable and perfected
continuing replacement, rollover liens and security interests in
all collateral in which the creditor hold security interests
pursuant to their existing loan documents with the Debtor.
A copy of the motion is available at https://urlcurt.com/u?l=Xc3OAk
from PacerMonitor.com.
A copy of the order is available at https://urlcurt.com/u?l=7NaSUk
from PacerMonitor.com.
About Jam Pizza
Jam Pizza, Inc., doing business as The Dough Boys Gourmet Pizzeria,
filed a petition under Chapter 11, Subchapter V of the Bankruptcy
Code (Bankr. N.D.N.Y. Case No. 23-30747) on Oct. 18, 2023. At the
time of the filing, the Debtor reported up to $50,000 in assets and
$100,001 to $500,000 in liabilities.
Judge Wendy A. Kinsella oversees the case.
Zachary DeCurtis McDonald, Esq., at Orville & Mcdonald Law, PC
represents the Debtor as legal counsel.
JAMES PINE: Seeks to Tap Kasen & Kasen as Bankruptcy Counsel
------------------------------------------------------------
James Pine & Son Trucking LLC seeks approval from the U.S.
Bankruptcy Court for the District of New Jersey to hire Kasen &
Kasen, P.C. to handle its Chapter 11 case.
The hourly rates of the firm's attorneys are as follows:
David A. Kasen, Esq. $500
Jenny R. Kasen, Esq. $400
David Kasen, Esq., an attorney at Kasen & Kasen, 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:
David A. Kasen, Esq.
Kasen & Kasen, PC
Society Hill Office Park
1874 E. Marlton Pike, Suite 3
Cherry Hill, NJ 08003
Telephone (856) 424-4144
Facsimile (856) 424-7565
Email: dkasen@kasenlaw.com
About James Pine & Son Trucking LLC
James Pine & Son Trucking LLC sought protection for relief under
Chapter 11 of the Bankruptcy Code (Bankr. D.N.J. Case No. 23-19461)
on Oct. 26, 2023, listing under $1 million in both assets and
liabilities. Judge Jerrold N Poslusny Jr oversees the case.
David A. Kasen, Esq. at Kasen & Kasen represents the Debtor as
counsel.
JETBLUE AIRWAYS: Moody's Cuts CFR to B1 & Sr. Secured Debt to Ba2
-----------------------------------------------------------------
Moody's Investors Service downgraded its ratings of JetBlue Airways
Corp., including the corporate family rating to B1 RUR-Down from
Ba2 and probability of default rating to B1-PD RUR-Down from
Ba2-PD. Moody's also downgraded the rating on the company's senior
secured revolving credit facility to Ba2 RUR-Down from Baa3. Each
of the company's Enhanced Equipment Trust Certificate ("EETC")
ratings were downgraded by one notch as follows: Pass-Through Ctfs.
Ser. 2019-1 Cl. AA to A3 RUR-Down from A2, Pass-Through Ctfs. Ser.
2020 Cl. A to A3 RUR-Down from A2, Pass-Through Ctfs. Ser. 2019-1
Cl. A to Baa3 RUR-Down from Baa2, Pass-Through Ctfs. Ser. 2020 Cl.
B to Baa3 RUR-Down from Baa2 and Pass-Through Ctfs. Ser. 2019-1B to
Ba1 RUR-Down from Baa3. Previously, the outlook was stable. Moody's
downgraded the speculative grade liquidity rating to SGL-3 from
SGL-1.
The downgrade of the corporate family rating reflects the sharp
decline in Moody's expectations for the company's financial results
for 2023 and 2024. Moody's had expected earnings and operating cash
flow to strengthen in the second half of 2023, leading to improving
credit metrics and a solid foundation heading into 2024. However,
the imbalance of capacity and demand in the US domestic market in
the third quarter pushed down JetBlue's average fare to $201.73
from $229.95 in the prior year quarter. Operating cash flow for the
third quarter missed Moody's projection by $300 million. Passenger
revenue trailed Moody's projection by $200 million and that in the
2022 3rd quarter by $314 million.
Planned capacity management and reductions by US operators should
lead to sequential improvements in industry fundamentals, restoring
some pricing for the airlines in upcoming quarters. However, these
efforts are not likely to materially improve financial results
during the next six months. Higher costs, particularly from the
current round of new labor agreements, inefficiencies that remain
in the supply chain and higher oil prices will slow the recovery of
profits in upcoming quarters, including for JetBlue.
The review for downgrade reflects that Moody's will further
downgrade JetBlue's ratings if the acquisition of Spirit Airlines,
Inc. proceeds as planned. The completion of the acquisition awaits
the resolution of the bench trial currently underway. The US
Department of Justice sued to block the transaction. Moody's has no
opinion of how the judge will rule. The proceedings are scheduled
to wrap up by December 5. Moody's believes that the ruling could be
issued sometime during the six to ten weeks thereafter.
The downgrades of the EETC ratings reflect the application of
Moody's Enhanced Equipment Trust and Equipment Trust Certificates
("EETC") rating methodology. The lowering of each rating by one
notch while the corporate family rating was downgraded by two
notches reflects the importance of the A321 aircraft to JetBlue's
operations and fleet strategy and the respective loan-to-value of
each tranche. The weight applied to the collateral generally
increases as corporate credit quality declines in the suggested
notching grid included in the EETC methodology.
RATINGS RATIONALE
The B1 corporate family rating ("CFR") reflects JetBlue's good
competitive position in its US East Coast and transcontinental
routes, anchored in its focus cities of New York (JFK International
Airport), Boston, Fort Lauderdale, Los Angeles, Orlando and San
Juan. However, having a large proportion of the flight schedule
subject to operational delays because of the more acute shortage of
air traffic controllers on the East Coast creates inefficiencies in
the operations. The B1 rating reflects the current weak credit
metrics, with EBIT margins below 5% and debt/EBITDA near 9x. The
pace at which the industry curtails capacity to restore balance
with what appears to be the normalization of demand patterns
following the coronavirus pandemic will be key to JetBlue improving
operating profit and cash flow. Moody's believes this industry
effort will run well into 2024. The downgrade in the rating also
reflects Moody's lowering its governance Issuer Profile Score to
G-4 from the prior G-2. JetBlue was historically conservative with
its financial policies, managing debt/EBITDA below 3.0x. The
company will be challenged to materially lower its leverage before
2026. Cost inflation, particularly for labor, uncertainty of the
relationship of capacity and demand and $3.9 billion of scheduled
investment in new aircraft across 2024 and 2025 will weigh on
earnings generation and increase debt. Financing the acquisition of
Spirit Airlines, Inc. with debt as planned will compound the
financial pressure Moody's expect JetBlue to face in the next 12 to
18 months. Moody's projects leverage to fall to near 6x at the end
of 2025, excluding the acquisition. This assumes operating profit
on a reported basis reaches $400 million in 2025, which would
compare to $800 million the company achieved in 2019. Free cash
flow will reach upwards of negative $1 billion in 2023 and compound
to about negative $2 billion in 2024 before falling to negative $1
billion in 2025. Deferrals of deliveries from the current schedule
with Airbus would make free cash flow less negative and reduce the
amount of new debt.
Liquidity has deteriorated to adequate because of the weak
operating environment which has sapped operating cash flow
generation. Cash balances (including short-term investments) were
at $2.1 billion on September 30, 2022 and stood at $1.4 billion at
September 30, 2023. Moody's projections indicate that JetBlue will
need to debt-fund a majority of the investment in new aircraft to
sustain cash above its targeted minimum level, which Moody's
assumes is $750 million. The company has a $600 million revolver
and a substantial pool of unencumbered assets, excluding its
loyalty program, which could bring in $2 billion or more of
additional funding, if needed. The revolver remains undrawn.
The EETC ratings reflect the credit quality of JetBlue; the typical
benefits of EETCs, including the applicability of Section 1110 of
the US Bankruptcy Code, cross-default and cross-collateralization
of the equipment notes; 18-month liquidity facilities and
cross-subordination pursuant to the respective Intercreditor
Agreements of each transaction. These ratings also reflect Moody's
opinion that the A321 aircraft will remain important to JetBlue's
network and fleet strategy, which increases the likelihood of the
company affirming each transaction under a reorganization scenario.
There are 25 A321ceos in the 2019-1 transaction and 24 A321s in the
2020-1 transaction, including seven neos. The average ages of the
aircraft in each transaction are 6.5 and 7.5 years, respectively.
Relatively young for aircraft. JetBlue's current fleet includes 63
A321ceos and 21 A321neos. The young age of the aircraft and the
large proportion relative to the total A321 fleet informs Moody's
opinion that JetBlue would affirm these transactions in a
reorganization. Moody's current estimates of the peak LTVs before
priority claims for repossession and remarketing costs and of
liquidity providers for the Class AA, Class A and Class B of 2019-1
are about 67%, 79%, and 88%, respectively. The peak LTVs for the
2020-1 transaction are 61% and 75% for the Class A and Class B,
respectively.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be downgraded if JetBlue completes the
acquisition of Spirit Airlines, Inc. as planned using all debt. The
lack of improvement in industry fundamentals, whereby capacity
remains above demand resulting in weak fares could also lead to a
downgrade. On a stand-alone basis, debt/EBITDA remaining above 5x
or EBIT margin remaining below 5% could result in a downgrade.
Weakening of the liquidity profile could also result in a
downgrade. There will be no upwards rating pressure until the
company de-levers it capital structure. This will be a multi-year
process. Debt/EBITDA would need to fall below 4.5x and EBIT margin
increase above 8% for there to be upwards rating pressure. A
dramatic inflection in free cash flow would also be required for an
upgrade.
Changes in EETC ratings can result from any combination of changes
in the underlying credit quality or ratings of JetBlue, Moody's
opinion of the importance of aircraft models to the airline's
network, or Moody's estimates of aircraft market values, which will
affect estimates of loan-to-value.
The methodologies used in these ratings were Passenger Airlines
published in August 2021.
JetBlue Airways Corp., based in Long Island City, New York, is a
leading carrier in New York, Boston, Fort Lauderdale-Hollywood, Los
Angeles, Orlando, and San Juan. JetBlue serves more than 100
destinations throughout the United States, Latin America, the
Caribbean, Canada and Europe. Revenue was $9.16 billion in 2022.
KINGDOM CONCEPTS: Selling Assets to Beautiful American Trust
------------------------------------------------------------
Kingdom Concepts, LLC asked the U.S. Bankruptcy Court for the
Northern District of Texas for approval to sell assets to Beautiful
American Trust.
The buyer offered $325,000 for the assets that were used to operate
Kingdom Concepts' Turkey Leg King restaurant in Cedar Hill, Texas.
These assets include equipment, inventory, packaging, books and
records, trademarks, trade names, and goodwill.
The assets are being sold "free and clear" of liens, claims and
encumbrances.
As part of the sale, Kingdom Concepts agreed to assume its lease
for the premises with Prep Hillside Real Estate, LLC and assign the
lease to the buyer.
The deadline for filing objections to the proposed sale is Nov.
20.
About Kingdom Concepts
Kingdom Concepts, LLC filed Chapter 11 petition (Bankr. N.D. Texas
Case No. 23-31895) on August 31, 2023, with $100,001 to $500,000 in
both assets and liabilities. Cedric Brown, manager, signed the
petition.
Judge Scott W. Everett oversees the case.
Joyce W. Lindauer, Esq., at Joyce W. Lindauer Attorney, PLLC,
represents the Debtor as legal counsel.
KLAUSNER LUMBER: Trustee Seeks $6M Settlement Payout Okay
---------------------------------------------------------
Emlyn Cameron of Law360 reports that the liquidating trustee in
Klausner Lumber Two LLC's Chapter 11 bankruptcy case agreed to
settle an unsecured claim of more than $18.8 million from two
claimants that were new market tax credit lenders to the sawmill
for almost $6 million in cash, the trustee has told a Delaware
bankruptcy judge.
About Klausner Lumber Two
Klausner Lumber Two, LLC, a sawmill company in Enfield, N.C.,
sought protection under Chapter 11 of the Bankruptcy Code (Bankr.
D. Del. Case No. 20-11518) on June 10, 2020. Robert Prusak, chief
restructuring officer, signed the petition. At the time of the
filing, the Debtor had estimated assets of between $10 million and
$50 million and liabilities of between $100 million and $500
million.
Judge Karen B. Owens oversees the case.
The Debtor has tapped Westerman Ball Ederer Miller Zucker &
Sharfstein, LLP and Morris, Nichols, Arsht & Tunnell, LLP as its
bankruptcy counsel; Fallace & Larkin, L.C. as litigation counsel;
Asgaard Capital LLC as restructuring advisor; and Cypress Holdings
LLC as investment banker.
The U.S. Trustee for Region 3 appointed a committee of unsecured
creditors in the Debtor's Chapter 11 case on June 25, 2020.
Armstrong Teasdale, LLP and EisnerAmper, LLP, serve as the
committee's legal counsel and financial advisor, respectively.
LAKEPORT CF: Deadline to File Amended Disclosures Nov. 13
---------------------------------------------------------
Lakeport CF, LLC, filed a motion seeking a 30-day extension, up to
and including Nov. 11, 2023, of the deadline to file an amended
disclosure statement. The Court granted the Debtor until Nov. 13,
2023 to file its amended disclosure statement.
At the preliminary hearing on the Debtor's first Motion Authorizing
Postpetition Financing, the Court noted that it would not consider
the adequacy of the Disclosure Statement or Plan confirmation until
after adjudication of River Bend Corporation's motion to dismiss.
Since that time, the Debtor's relationship with its largest
creditors has changed. On Feb. 24, 2023, the Debtor, River Bend
Corporation, and Pinetree Financial Corporation resolved the
principal disputes between them, resulting in the submission and
approval of a settlement agreement. Related to that settlement, the
Debtor sought, and the Court approved on March 23, 2023, a modified
financing arrangement that would fund the settlement.
In addition, on October 11, 2023 the Debtor dismissed Adversary
Proceeding No. 22-1304-MER, styled Lakeport CF, LLC v. VAMFP Hunt,
LLC, and on September 29, 2023, the Court entered an order holding
in abeyance Adversary Proceeding No. 22-10252-MER, Lakeport CF, LLC
v. Deaderick SSB LLC, et al., and denied Deaderick SSB, LLC's
motion to dismiss that case.
These events materially changed the Debtor's Plan of
Reorganization. These changes will require substantial revision to
Debtor's Disclosure Statement so Debtor can provide complete and
accurate information to creditors and parties-in-interest
concerning the Second Amended Plan.
The Debtor is in presently drafting its amended Disclosure
Statement. However, the undersigned chief scrivener is in the midst
of trial preparation in Weinman v. Schemmel, Adversary Proceeding
No. 22-1151-MER, which is set for trial on October 31, 2023. In
addition, the undersigned is litigating hotly contested matters in
In re: Lebsock, Case No. 22-10322-TBM, including (without
limitation) a preliminary hearing on October 24, 2023, concerning a
motion to convert that Chapter 11 case to a Chapter 7 proceeding.
If the Court in that case finds contested factual matters warrant
an evidentiary hearing, the hearing will be set in the near future
and be subject to expedited discovery. The same case is currently
set for a three-day trial on December 4-6, 2023, which trial
concerns plan confirmation and a motion for relief from stay, and
which is midway through expedited discovery related to the same.
The Debtor submitted the requested extension is warranted and will
not unduly delay the administration of this case or prejudice any
parties-in-interest. The extension will greatly assist Debtor in
its efforts to reorganize under Chapter 11 and to prepare an
amended Disclosure Statement providing adequate information for all
parties-in-interest.
ATTORNEYS FOR LAKEPORT CF, LLC:
Jeffrey A. Weinman, Esq.
Michael T. Gilbert, Esq.
Patrick Vellone, Esq.
Brenton L. Gragg, Esq.
ALLEN VELLONE WOLF HELFRICH & FACTOR P.C.
1600 Stout Street, Ste. 1900
Denver, Colorado 80202
303-534-4499
E-mail: JWeinman@allen-vellone.com
MGilbert@allen-vellone.com
PVellone@allen-vellone.com
BGragg@allen-vellone.com
About Lakeport CF
Lakeport CF, LLC, a company in Elbert County, Colo., filed Chapter
11 petition (Bankr. D. Colo. Case No. 22-11941) on May 31, 2022,
with $10 million to $50 million in both assets and liabilities.
Judge Michael E. Romero oversees the case.
Jeffrey A. Weinman, Esq., at Allen Vellone Wolf Helfrich & Factor,
PC and Fairfield and Woods P.C. serve as the Debtor's bankruptcy
counsel and special counsel, respectively.
LIVIE & LUCA: Court OKs Cash Collateral Access on Final Basis
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of California,
Oakland Division, authorized Livie and Luca LLC to use cash
collateral on a final basis in accordance with the budget, through
January 31, 2024, or confirmation of the Debtor's plan of
reorganization.
In consideration for the use of the cash collateral, the Secured
Parties (Heritage Bank of Commerce, the U.S. Small Business
Administration and Bedabox, LLC dba ShipMonk) will each receive as
adequate protection a post-petition replacement lien on all cash
collateral generated post-petition and all inventory purchased with
funds from the post-petition financing from Wolverine Ventures, LLC
to the same extent, validity and priority as they respectively held
as of the Petition Date, and the payments set forth in the Budget,
as amended, in addition to any other adequate protection granted in
any other order.
A copy of the order is available at https://urlcurt.com/u?l=C9Ee9y
from PacerMonitor.com.
About Livie and Luca LLC
Livie and Luca LLC sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Cal. case No. 23-40991) on August 10,
2023. In the petition signed by Mitzi Rivas, chief executive
officer, the Debtor disclosed up to $10 million in both assets and
liabilties.
William J. Lafferty, III, oversees the case.
Stephen D. Finestone, Esq., at Finestone Hayes LLP, represents the
Debtor as legal counsel.
LUXURY AUTO: Unsecureds to Get Share of Trailer Sale Proceeds
-------------------------------------------------------------
Luxury Auto Carriers, Inc., filed with the U.S. Bankruptcy Court
for the Middle District of Florida a Subchapter V Plan of
Reorganization dated October 31, 2023.
Luxury was originally organized in 2012 by Roberto J. Soto Serrano,
the Debtor's President and sole driver currently on staff. Debtor
provides automobile transport throughout the United States for
auction houses and private individuals seeking to relocate their
vehicles.
Luxury conducts its business from the single-family home owned by
Mr. Serrano located at 130 Samuel Street, Davenport, Florida 33897,
and the Debtor's trucks and equipment are stored at 11355 Rocket
Blvd., Orlando, Florida 32824.
In the current economic climate, Luxury is experiencing an increase
in operating expenses which are leading to a reduction in income
available for hiring and growth of the Debtor's operation. Luxury
was also blindsided by J.P. Morgan Chase Bank which froze an
account held by the Debtor without explanation causing an
interruption to the Debtor's business and accessibility to its cash
funds. Prior to filing, Luxury also received a demand notice from
National Funding in connection with a small business loan in the
amount of approximately $40,000.00.
With an operating account frozen without cause, a creditor issuing
demand notices, and assets which the Debtor is incapable of using
due to slim profit margins, Luxury elected to pursue Chapter 11
relief for the purpose of restructuring creditor claims,
liquidating assets which are no longer utilized in Debtor's current
operation, and recovering funds from its frozen account with
Chase.
Class 4 consists of all Allowed General Unsecured Claims against
the Debtor. In full satisfaction of the Allowed Class 4 General
Unsecured Claims, Holders of Class 4 Claims shall receive a pro
rata share of the sale proceeds received by the Debtor from the
sale of the Trailer Equipment after the Class 1, 2 and 3 Claims
have been satisfied in full. The maximum Distribution to Class 4
Claimholders shall be equal to the total amount of all Allowed
Class 4 General Unsecured Claims. Class 4 is Impaired.
Class 5 consists of all equity interests in Luxury Auto Carriers,
Inc. Class 5 Interest Holder shall retain his respective Interest
in Luxury Auto Carriers, Inc. in the same proportion such Interest
were held as of the Petition Date (i.e., 100.00% Interest retained
by Roberto J. Soto Serrano). Class 5 is Unimpaired.
The Plan contemplates the Debtor will continue to manage and
operate its business in the ordinary course, but with restructured
debt obligations. It is anticipated the Debtor's postconfirmation
business will mainly involve continued operation of its auto
carrier business throughout the United States, the income from
which will be committed to make the Plan Payments to the extent
necessary.
In addition, Debtor anticipates selling its Trailer Equipment and
expects to receive approximately $60,000.00 (gross sale proceeds)
from such sales, which proceeds the Debtor will utilize for
distributions to the Class 1, 2, 3, and 4 Claimholders.
Funds generated from the Debtor's operations through the Effective
Date will be used for Plan Payments; however, the Debtor's cash on
hand as of Confirmation will be available for payment of
Administrative Expenses.
A full-text copy of the Subchapter V Plan dated October 31, 2023 is
available at https://urlcurt.com/u?l=rTaOT5 from PacerMonitor.com
at no charge.
Counsel for Debtor:
Daniel A. Velasquez, Esq.
Latham, Luna, Eden & Beaudine, LLP
201 S. Orange Ave., Suite 1400
Orlando, FL 32801
Telephone: (407) 481-5800
Facsimile: (407) 481-5801
Email: dvelasquez@lathamluna.com
About Luxury Auto Carriers
Luxury Auto Carriers, Inc. provides automobile transport throughout
the United States for auction houses and private individuals
seeking to relocate their vehicles.
The Debtor filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. M.D. Fla. Case No. 23-03803) on Sept. 14,
2023, with up to $1 million in both assets and liabilities. Roberto
J. Soto Serrano, shareholder, signed the petition.
Judge Tiffany P. Geyer oversees the case.
Daniel A, Velasquez, Esq., at Latham Luna Eden & Beaudine, LLP,
represents the Debtor as legal counsel.
LVL TECHNOLOGIES: Michael Markham Named Subchapter V Trustee
------------------------------------------------------------
The U.S. Trustee for Region 21 appointed Michael Markham, Esq., as
Subchapter V trustee for LVL Technologies USA Inc.
Mr. Markham, a partner at Johnson Pope Bokor Ruppel & Burns, LLP,
will be paid an hourly fee of $350 for his services as Subchapter V
trustee and will be reimbursed for work-related expenses incurred.
Mr. Markham declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Michael C. Markham, Esq.
Johnson Pope Bokor Ruppel & Burns, LLP
401 E. Jackson Street, Suite 3100
Tampa, FL 33602
Phone: (727) 480-5118
Email: Mikem@jpfirm.com
About LVL Technologies USA
LVL Technologies USA Inc. filed a voluntary petition for Chapter 11
protection (Bankr. M.D. Fla. Case No. 23-04652) on Oct. 18, 2023,
with as much as $1 million in both assets and liabilities.
Judge Roberta A. Colton oversees the case.
Erik Johanson PLLC represents the Debtor as legal counsel.
M AND J: Court OKs Cash Collateral Access Thru Nov 16
-----------------------------------------------------
The U.S. Bankruptcy Court for the District of Massachusetts
authorized M & J Home Improvement, Inc. to use cash collateral on
an interim basis in accordance with the budget, with a 10%
variance, through November 16, 2023.
As Adequate Protection to IOU Central, Inc., d/b/a IOU Financial,
Inc. and Santander Bank, N.A., the Debtor will grant to IOU and
Santander continuing replacement liens and security interests in
the post-petition assets of the Debtor to the same validity, extent
and priority that IOU and Santander would have had in the absence
of the bankruptcy filing.
On the first of each month, the Debtor will make Adequate
Protection payments to IOU in the amount of $867 and Santander in
an amount equal to $78 per week. For each such payment, time is of
the essence.
A further hearing on the matter is set for November 16 at 11:30
a.m.
A copy of the order is available at https://urlcurt.com/u?l=FMr8ZW
from PacerMonitor.com.
About M & J Home Improvement, Inc.
M & J Home Improvement, Inc.sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. D. Mass. Case No. 23-40874) on
October 20, 2023. In the petition signed by Matthew Sullivan,
manager, the Debtor disclosed up to $500,000 in assets and up to $1
million in liabilities.
Christopher L. Murray, Esq., at Murray Law Firm, P.C., represents
the Debtor as legal counsel.
MARIO THE BAKER: Court OKs Cash Collateral Access Thru Nov 14
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Florida,
Miami Division, authorized Mario the Baker Downtown, Inc. to use
cash collateral on an interim basis in accordance with the budget,
with a 10% variance.
Specifically, the Debtor is permitted to use cash collateral on a
pro rata basis pending the Final Hearing on the Motion set for
November 14, 2023 at 9:30 a.m.
As adequate protection, the U.S. Small Business Association will
have a replacement lien on the cash used by the Debtor and all
other assets which comprise of its secured claim to the same
extent, validity and priority that existed prior to the
commencement of this case. The SBA, as the first lienholder, will
also receive adequate protection payments of $771 per month.
All other parties and/or Alleged Secured Creditors, including
Moneywell GRP, LLC; C2 Advance, LLC; QFS Capital, LLC; GFS Funding;
Equita Advance LLC and Nova Equities, LLC, appear to be unsecured
based on the amount of the indebtedness owed to the SBA. However,
to the extent such parties and/or alleged Secured Creditors claim a
lien interest to attach to the Debtor's assets and seek a
replacement lien, the parties will assert interest and basis
therefor in writing and at the Final Hearing on the Motion.
A copy of the order and the Debtor's budget is available at
https://urlcurt.com/u?l=cRAMtf from PacerMonitor.com.
The Debtor projects $80,000 in income and $79,731 in total
expenses.
About Mario the Baker Downtown
Mario the Baker Downtown, Inc. filed Chapter 11 petition (Bankr.
S.D. Fla. Case No. 23-18594) on Oct. 20, 2023, with up to $50,000
in assets and $100,001 to $500,000 in liabilities.
Judge Laurel M. Isicoff oversees the case.
Thomas L. Abrams, Esq., represents the Debtor as legal counsel.
MATTRESS DIRECT: Stephen Coffin Named Subchapter V Trustee
----------------------------------------------------------
The Acting U.S. Trustee for Region 13 appointed Stephen Coffin,
Esq., attorney at The Small Business Law Center, as Subchapter V
trustee for Mattress Direct Inc.
Mr. Coffin will be paid an hourly fee of $285 for his services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. Coffin declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Stephen D. Coffin, Esq.
Attorney at Law, MBA
The Small Business Law Center
2705 St. Peters-Howell Rd, Suite A
St. Peters, MO 63376
Phone: (636) 244-5252
Fax: (636) 486-1788
Email: scoffin@tsblc.com
About Mattress Direct
Mattress Direct, Inc., a company in Saint Peters, Mo., and its
affiliates DeliverPRO, LLC and Campbell Sleep, LLC filed Chapter 11
petitions (Bankr. E.D. Mo. Lead Case No. 23-43817) on Oct. 23,
2023. At the time of the filing, Mattress Direct reported
$1,000,001 to $10 million in both assets and liabilities.
Judge Bonnie L. Clair oversees the cases.
Thomas H Riske, Esq. at Carmody Macdonald P.C. represents the
Debtors as counsel.
MCCONNELL SAND: Unsecureds Owed $1.1M to Get $100K
--------------------------------------------------
McConnell Sand & Stone LLC submitted a First Amended Chapter 11
Subchapter V Plan of Reorganization.
The Debtor is an LLC that provides sand, stone and aggregate
removal services for various companies in Michigan and Ohio. To
conduct its work the Debtor operates cranes and draglines. These
cranes and draglines operate on real property owned by the Debtor's
customers. The Debtor owns 11 crane and dragline machines and
usually has 7-10 in operation at any given time. The Debtor uses
these cranes and draglines to remove stone, sand and other
aggregate. These cranes and dragline machines are very old (often
between 40 and 50 years old) and frequently need repair. New
machines are cost prohibitive to purchase and Debtor's sole owner
Richard Jackson is an expert in repairing the machines. The Debtor
operates year-round but does slow down during the winter months.
Because of this slow down it is not unusual for the Debtor to lay
off a few employees during this period. Having said that, the
Debtor is always looking for employees as employee turnover occurs
from time to time. At any given time, the Debtor's employs between
9 and 14 employees and usually has 12 people on payroll. These
employees are separated into crane operators, helpers, and
repairmen.
Under the Plan, Class 8 Unsecured Creditors total $1,165,742. This
Class shall be paid the sum of $100,000 over the life of the Plan.
These creditors will receive their plan payments in 3 annual
installments with the first yearly installment in the amount of
$33,333.34 due 3 years from the date of confirmation. Class 8 is
impaired.
The Debtor's financial projections show that the Debtor will have
projected disposable income (as defined by Sec. 1191(d) of the
Bankruptcy Code) in an amount sufficient to meet the requirements
of this Plan. Again, the Debtor submits that should it be
liquidated there would be no distribution to unsecured creditors.
Counsel for Debtor:
George E. Jacobs, Esq.
2425 8S. Linden Rd., Ste. C
Flint, MI 48532
(810) 720-4333
E-mail: george@bklawoffice.com
A copy of the Plan of Reorganization dated October 20, 2023, is
available at https://tinyurl.ph/kgiMl from PacerMonitor.com.
About McConnell Sand and Stone
McConnell Sand and Stone, LLC, is an LLC that provides sand and
stone removal services for various companies in Michigan and Ohio.
The Debtor filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. W.D. Mich. Case No. 23-90058) on June 19,
2023, with as much as $50,000 in assets and $500,001 to $1 million
in liabilities. Thomas Richardson, Esq., at Lewis Reed and Allen,
has been appointed as Subchapter V trustee.
Judge Scott W. Dales oversees the case.
The Debtor is represented by George E. Jacobs, Esq., at Bankruptcy
Law Offices.
MEGA SUNSET: Wins Interim Cash Collateral Access
------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California,
Los Angeles Division, authorized Mega Sunset, LLC to use cash
collateral on an interim basis in accordance with the budget, with
a 10% variance.
Laveta Sunset, LLC and MBM Acquisitions, Inc. claim or may claim to
have a lien.
As adequate protection, Sunset Laveta and MBM Acquisitions will
have additional and replacement valid, binding, enforceable,
non-avoidable, and automatically perfected, effective as of August
29, 2023, postpetition security interests in and liens on the
Debtor's property.
The Debtor will maintain insurance coverage for the commercial real
property located at 1539 West Sunset Boulevard, Los Angeles,
California 90069 [APN 5419-028- 033] in a dollar amount at least
equal to the Debtor's good faith estimate of the value of Sunset
Laveta's and MBM Acquisitions' alleged interest in the Sunset
Boulevard that is typically insured, and such insurance will name
Sunset Laveta and MBM Acquisitions as additional insureds.
A copy of the order is available at https://urlcurt.com/u?l=DSnPZN
from PacerMonitor.com.
About Mega Sunset, LLC
Mega Sunset, LLC is the owner of the commercial real property
located at 1539 West Sunset Boulevard, Los Angeles, California
90069.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. C.D. Cal. Case No. 23-15583) on August 29,
2023. In the petition signed by Ted Hsu, manager, the Debtor
disclosed up to $10 million in both assets and liabilities.
Judge Neil W. Bason oversees the case.
Raymond H. Aver, Esq., at Law Offices of Raymond H. Aver, A
Professional Corporation, represents the Debtor as legal counsel.
MERCY HOSPITAL: Wins Interim Cash Collateral Access
---------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Iowa
authorized Mercy Hospital, Iowa City, Iowa and affiliates to use
cash collateral on an interim basis in accordance with the budget,
with a 10% variance.
The Debtor requires the use of cash collateral to maintain the
Mercy Hospital facilities, pay employee compensation, payroll
taxes, overhead and other expenses.
Mercy Hospital is indebted to the pre-petition secured lender,
through Computershare Trust Company N.A., as Master Trustee, and
Preston Hollow Community Capital, Inc., as Bondholder Trustee with
respect to those certain Health Facilities Revenue Bonds, Series
2011 and the Health Facilities Revenue Bonds, Series 2018.
The 2011 Bonds were issued by the City of Hills, Iowa pursuant to
the Trust Indenture dated as of November 1, 2011, between the
Issuer and Wells Fargo Bank, National Association, as predecessor
Trustee and the proceeds of the 2011 Bonds were loaned to Mercy
Hospital pursuant to that certain Loan Agreement dated as of
November 1, 2011, between the Issuer and Mercy Hospital. Under the
2011 Trust Indenture, the Issuer assigned and pledged to the 2011
Bond Trustee substantially all of its rights under the 2011 Loan
Agreement, including its rights in and to the "Obligation" securing
the 2011 Bonds, the amounts payable thereon and the amounts payable
to the Issuer under the 2011 Loan Agreement.
The 2018 Bonds were issued by the Issuer pursuant to the Trust
Indenture dated as of May 1, 2018, between the Issuer and Wells
Fargo Bank, National Association, as predecessor Trustee and the
proceeds of the 2018 Bonds were loaned to Mercy Hospital pursuant
to the Loan Agreement dated as of May 1, 2018, between the Issuer
and Mercy Hospital.
Computershare Trust Company, N.A., is the successor 2011 Bond
Trustee, 2018 Bond Trustee, and Master Trustee.
As of the Petition Date, the aggregate indebtedness under the Bonds
was not less than the sum of (A) $58.5 million in unpaid principal
on the Bonds was, consisting of $24.270 million in principal amount
of Series 2011 Bonds and $34.3 million in principal amount of
Series 2018 Bonds, (B) accrued but unpaid interest on the Bonds in
the aggregate amount of $1.2 million, consisting of $570,037 in
accrued interest on the 2011 Bonds and $466,721 in accrued interest
on the 2018 Bonds, and (C) other amounts, including accrued and
unpaid fees and expenses of the Trustee and its professionals
incurred through the Petition Date, that are reimbursable under the
Bond Documents in accordance with their terms.
On November 22, 2016, Mercy Services submitted a customer
application to McKesson Corporation and its affiliates for the
purchase of pharmaceutical and medical-surgical products. McKesson
holds a valid and enforceable first priority lien and security
interest in substantially all of Mercy Services' personal property
as set forth in, and subject to the terms of, the McKesson Security
Agreement and any related documents or filings.
On October 16, 2023, McKesson submitted its proof of claim in the
base amount of $267,932, together with any additional charges,
attorneys' fees and costs.
In exchange for their use of cash collateral, the Debtors will
provide weekly financial reporting and grant the following adequate
protection to the Master Trustee, solely to the extent of the
postpetition diminution in value:
(a) Replacement liens on all of Mercy Hospital's postpetition
property which, but for the commencement of the Chapter 11 Cases,
would constitute Prepetition Collateral subject to validly
perfected, non-avoidable Prepetition Liens as of the Petition Date;
and
(b) Allowed superpriority administrative expense claims
against Mercy Hospital.
The Interim Order provides a "Carve-Out" of certain statutory fees
and professional fees of the Debtors and any statutory committee of
unsecured creditors appointed pursuant to Bankruptcy Code section
1103. The reasonable fees and expenses incurred by a trustee under
Bankruptcy Code section 726(b) are capped at $50,000.
A copy of the order is available at https://urlcurt.com/u?l=MtLbUm
from Epiq, the claims agent.
About Mercy Hospital, Iowa City, Iowa
Mercy Hospital, Iowa City, Iowa is a Catholic-based Iowa nonprofit
corporation and a tax-exempt organization described in Section
501(c)(3) of the Internal Revenue Code of 1986 (as amended) that
operates an acute care community hospital and clinics located in
Iowa City, Iowa and surrounding communities.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Iowa Lead Case No. 23-00623) on August
7, 2023. In the petition signed by Mark E. Toney, chief
restructuring officer, the Debtor disclosed up to $500 million in
both assets and liabilities.
Judge Thad J. Collins oversees the case.
The Debtors tapped NYEMASTER GOODE, P.C and MCDERMOTT WILL & EMERY
LLP as bankruptcy co-counsel, TONEYKORF PARTNERS, LLC as provider
of interim management services, H2C SECURITIES INC. as investment
banker, and EPIQ CORPORATE RESTRUCTURING, LLC as notice and claims
agent.
MIRACLE HILL: Court OKs Cash Collateral Access Thru Nov 29
----------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Florida,
Tallahassee Division, authorized Miracle Hill Nursing and
Rehabilitation Center, Inc. to use cash collateral on an interim
basis in accordance with the budget, with a 10% variance, through
November 29, 2023.
As of October 12, 2023, the Debtor was indebted and liable to
KeyBank National Association, as successor by merger to KeyCorp
Real Estate Capital Markets, Inc. under the terms of a Note dated
as of November 28, 2006, evidencing a mortgage loan.
The Note has been endorsed for insurance by the U.S. Department of
Housing and Urban Development under Section 221(d)(4) of the
National Housing Act (12 U.S.C. section 17151). This endorsement by
HUD did not constitute an assignment of the Note or the loan
evidenced thereby, which continue to be held and serviced by
KeyBank. The Debtor and the Secretary of HUD are parties to the
Regulatory Agreement for Multifamily Housing Projects dated as of
November 28, 2006. The HUD Regulatory Agreement is one of the Loan
Documents and is incorporated into the Mortgage. The HUD Regulatory
Agreement imposes on the Debtor various obligations and
restrictions with respect to the skilled nursing and rehabilitation
facility commonly known as Miracle Hill and the Medicare and
Medicaid receivables, rents, and other receipts generated therefrom
and other obligations.
Pursuant to the terms of a Mortgage dated November 28, 2006, and as
modified from time to time, the Debtor granted to KeyBank a
first-priority lien and security interest in all of the certain
pieces, parcels, and/or tracts of land of which the Debtor is now
seized and possessed and in actual possession, situated in
Tallassee, the County of Leon, and the State of Florida.
The Debtor is aware of at least three other parties who assert an
interest in the Debtor's cash collateral, including: (i) the U.S.
Small Business Association; (ii) Synovus Bank; and (iii) 1329
Abraham Street Holdings, LLC.
The Debtor has an immediate need to use the cash collateral to
permit, among other things, the orderly continuation of the
operation of its Nursing Center business, to maintain business
relationships with employees, patients, residents, vendors, and
suppliers, to make payroll, to make capital expenditures, and to
provide for other working capital and operational needs in
accordance with the HUD Regulatory Agreement.
As adequate protection, the Lenders are granted valid, binding,
continuing, enforceable, unavoidable and fully perfected,
postpetition Liens on all of the Debtor's rights in tangible and
intangible assets.
KeyBank and HUD are granted, an allowed valid, continuing,
enforceable, unavoidable, and fully perfected first priority liens
and security interests, priming the liens (if any) of any other
Secured Party (to the extent any Secured Party has a lien senior in
priority to KeyBank), in all cash and cash deposits of the Debtor
held at Synovus, Capital City Bank, and any other depository bank
used by the Debtor as of the Petition Date or established after the
Petition Date.
KeyBank and HUD are granted, solely to the extent of any Diminution
in Value, an allowed superpriority administrative expense claim
against Debtor under 11 U.S.C. section 507(b) in respect of the
Adequate Protection Obligations with priority in payment over any
and all administrative expenses of the kind specified or ordered
pursuant to any provision of the Bankruptcy Code.
As additional adequate protection, the Debtor will make monthly
adequate protection payments to KeyBank and the SBA.
The Debtor's right to use cash collateral pursuant will
automatically terminate on the earliest to occur of:
a. the effective date of a confirmed chapter 11 plan for Debtor;
b. the date on which the Court enters an order dismissing the
Chapter 11 Case;
c. the date on which the Court enters an order converting the
Chapter 11 Case to a case under chapter 7 of the Bankruptcy Code;
d. the date on which the Court enters an order appointing a chapter
11 trustee or any examiner with expanded powers relating to the
operation of the businesses in the Chapter 11 Case;
e. a filing by Debtor of any motion, pleading, application or
adversary proceeding challenging the (i) validity, extent,
enforceability, perfection or priority of the KeyBank Liens or
asserting any other cause of action, claim or defense against
and/or with respect to the Note, the Mortgage, or any of the other
Loan Documents; or (ii) the validity or enforceability of any of
the Obligations (or the filing by Debtor of any such motion,
pleading, application or statement in support of any motion,
pleading, application or adversary proceeding commenced by any
third party with respect to the matters referenced in clause (i) or
(ii) above);
f. the date on which the Court enters any order approving the sale
of all or substantially all of the assets of Debtor that does not
provide for the repayment in full in cash of all Obligations and
Adequate Protection Obligations granted to KeyBank and/or HUD(upon
the consummation thereof);
g. Debtor's filing of a motion seeking any financing under section
364(d) of the Bankruptcy Code secured by any of the Collateral that
does not require the payment in full of all Obligations and
Adequate Protection Obligations granted to KeyBank and/or HUD; and
h. At the option of KeyBank or HUD, Debtor violating the HUD
Regulatory Agreement to the extent that such violation (i) occurred
after the Petition Date; or (ii) relates to a prepetition violation
of the HUD Regulatory Agreement to the extent such violation has
not been cured within 30 days following entry of the Interim Order.
The events that constitute an "Event of Default" include:
a. the occurrence of the date that is five business days after
written notice by counsel to KeyBank and/or HUD or SBA to counsel
for Debtor that Debtor has failed to make any Adequate Protection
Payment required by the Interim Order when due and the outstanding
payment is not made within such five business days;
b. the occurrence of the date that is five business days after
written notice by counsel to KeyBank and/or HUD or SBA to counsel
for Debtor that a Budget Variance Report shows a variance that is a
Prohibited Variance;
c. the occurrence of the date that is three business days after
written notice by counsel to KeyBank and/or HUD or SBA to counsel
for Debtor that Debtor has failed to comply with any other material
term of the Interim Order, and such failure is not remedied by
Debtor within three business days after such written notice of
noncompliance;
d. the Court will not have entered the Final Order within 60 days
after the entry of the Interim Order, which order will be in form
and substance reasonably acceptable to KeyBank and HUD; and
e. the Interim Order ceases to be in full force and effect for any
reason other than as a result of entry of the Final Order
superseding the Interim Order.
A final hearing on the matter is set for November 29, 2023 at 1:30
p.m.
A copy of the order is available at https://urlcurt.com/u?l=Wf4n8a
from PacerMonitor.com
About Miracle Hill Nursing and Rehabilitation Center, Inc.
Miracle Hill Nursing and Rehabilitation Center, Inc. owns and
operates a nursing home in Tallahasse, Florida.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Fla. Case No. 23-40398) on October 12,
2023. In the petition signed by Chris A. Burney, president, the
Debtor disclosed up to $10 million in both assets and liabilities.
Judge Karen K. Specie oversees the case.
Scott A. Stichter, Esq., at STICHTER, RIEDEL, BLAIN & POSTER, P.A.,
represents the Debtor as legal counsel.
MOUNTAINEER BRAND: Court OKs Interim Cash Collateral Access
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of West
Virginia authorized Mountaineer Brand, LLC to use cash collateral
on an interim basis in accordance with the budget.
On October 6, 2017, the Debtor executed and delivered to First Bank
and Trust Company the U.S Small Business Administration Note,
wherein the Debtor promised to pay to the order of First Bank the
principal sum of $1 million, plus interest thereon, with accrued
interest only monthly payments and repayment of the outstanding
principal balance to be made on demand.
To secure the repayment of Note 1309, the Debtor executed the
Commercial Security Agreement, dated October 6, 2017, wherein the
Debtor granted First Bank a security interest in and to certain
personal property.
The lien created by Security Agreement 1309 was perfected on April
4, 2018 upon the due recordation of a UCC-1 Financing Statement
with the West Virginia Secretary of State as Instrument Number
2018E040400048, as continued by the due recordation of a UCC-3
Financing Statement with the West Virginia Secretary of State on
October 6, 2022.
The Financing Statement 1309 is a validly perfected security
interest in and to the Collateral 1309.
The Debtor has defaulted in payments due and owing to First Bank
pursuant to the terms of Note 1309. As of the Petition Date, the
total amount due and owing by Debtor to First Bank under Loan 1309
is $959,942, constituting $949,707 in unpaid principal, $9,601 in
accrued interest, and $633 in pre-petition legal fees. Interest
continues to accrue at a per diem rate of $117.087, subject to any
limits on collectability under 11 U.S.C. section 506.
On September 25, 2018, the Debtor executed and delivered to First
Bank the U.S Small Business Administration Note, wherein the Debtor
promised to pay to the order of First Bank the principal sum of
$180,000, plus interest thereon, with accrued interest only monthly
payments and repayment of the outstanding principal balance to be
made on demand.
To secure the repayment of Note 1233, the Debtor executed the
Security Agreement, dated September 14, 2018, effective September
25, 2018, wherein the Debtor granted First Bank a security interest
in and to certain personal property.
The lien created by Security Agreement 1233 was perfected on
September 25, 2018 upon the due recordation of a UCC-1 Financing
Statement with the West Virginia Secretary of State as Instrument
Number 2018E092500027, as continued by the due recordation of a
UCC-3 Financing Statement with the West Virginia Secretary of State
on June 5, 2023.
The Financing Statement 1233 is a validly perfected security
interest in and to the Collateral 1233.
The Debtor has defaulted in payments due and owing to First Bank
pursuant to the terms of Note 1233. As of the Petition Date, the
total amount due and owing by Debtor to First Bank under Loan 1233
is $72,006, constituting $71,066 in unpaid principal and $941 in
accrued interest.
The court said beginning on November 15, 2023, and continuing on
the same day of each month thereafter, the Debtor will make monthly
adequate protection payments to First Bank in the amount of $2,000.
In addition to the Threshold Adequate Protection Payment, Debtor
will also remit to First Bank an amount equal to 10.0% of gross
sales above $44,000 for the prior month as established by the
Monthly Cash Collateral Report.
As adequate protection, First Bank is granted a valid and perfected
first priority replacement lien in and to all post-Petition Cash
Collateral, without the necessity of filing any documents with the
West Virginia Secretary of State.
A copy of the court's order and the Debtor's budget is available at
https://urlcurt.com/u?l=pgPJXL from PacerMonitor.com.
The Debtor projects total expenses, on a monthly basis, as
follows:
$54,100 for November 2023; and
$63,700 for December 2023.
About Mountaineer Brand, LLC
Mountaineer Brand, LLC manufactures and sells all natural men's
grooming products.
The Debtor filed Chapter 11 petition (Bankr. N.D. W.Va. Case No.
23-00396) on Aug. 18, 2023, with $63,500 in assets and $2,481,721
in liabilities. Eric Young, chief executive officer, signed the
petition.
Judge David L. Bissett oversees the case.
Martin P. Sheehan, Esq., at Sheehan & Associates, P.L.L.C
represents the Debtor as legal counsel.
MOVIA ROBOTICS: Amends Webster & Priority Unsecured Claims Pay
--------------------------------------------------------------
Movia Robotics, Inc. n/k/a Old M. Robotics, Inc., submitted a First
Amended (Proposed) Disclosure Statement describing Chapter 11 Plan
dated November 2, 2023.
The Plan constitutes a chapter 11 plan for the Debtor and provides
for distribution of the proceeds of the Debtor's bankruptcy court
approved asset sale of all its assets.
Prior to the commencement of this bankruptcy case, the Debtor
exhausted its working capital and was no longer able to service its
debt. Moreover, the Connecticut Superior Court entered an order
granting a prejudgment remedy against, essentially, all the
Debtor's assets in favor of J.P. Bolat and The Bolat Group, LLC in
a case styled Jean-Pierre Bolat, et al. v. Movia Robotics, Inc., et
al., HHB-CV22-5032323-S (the "Bolat Action"), a civil action
pending in the Superior Court for the State of Connecticut at New
Britain, Connecticut.
In the Bolat Action, the plaintiffs alleged causes of action for
(i) breach of agreement, (ii) unjust enrichment, (iii) bad faith,
(iv) failure to pay wages, (v) violations of Conn. Gen. Stat.,
Section 31-71c, (vi) breach of loan agreement, (viii) unjust
enrichment, and (ix) fraudulent and deceitful inducement.
Generally, the claims of the plaintiff related to the period during
which Jean Pierre Bolat was an officer of the Debtor and to the
business dealings between the Debtor and Jean-Pierre Bolat and his
company, The Bolat Group, LLC.
With this litigation pending, the Debtor's largest pre-petition
secured creditor was unwilling to continue lending funds to the
Debtor. Prior to the filing of the Debtor's bankruptcy petition,
the Debtor had continuous operating losses, which losses consumed
its working capital. Immediately before the filing of its
bankruptcy petition, the Debtor was unable to operate its business.
The Debtor's largest secured creditor agreed to provide financial
assistance if the Debtor sought relief under the United States
Bankruptcy Code.
As a result, on January 18, 2023, the Debtor sought relief under
Chapter 11 of the United States Bankruptcy Code.
The Bankruptcy Estate has approximately nine priority unsecured
creditors. Three of these priority claims are for taxes, and six of
these priority claims are for unpaid wages. The nine priority
unsecured claims total approximately $65,000. The Bankruptcy
Estate has approximately 52 general unsecured creditors. The
general unsecured claims total approximately $370,000.
Class 2 consists of the Secured Claim of Webster Bank. Webster
Bank will be paid the Remaining Sale Proceeds on the Effective Date
of the Plan in full and final satisfaction of all its claims, both
secured and unsecured. Upon payment, Webster Bank will release its
lien on any property currently or formerly owned by the Debtor.
Class 2 is impaired and is entitled to vote on the Plan.
Class 3 consists of the Priority Unsecured Claims. In the event
that the Remaining Sale Proceeds are sufficient to pay the holder
of the Class 2 Claim in full with interest, Net Sale Proceeds
available after payment in full to the holder of the Class 2 Claims
will be distributed to holders of Allowed Priority Unsecured Claims
on a pro rata basis on the later of (i) the Effective Date, or (ii)
the date of Allowance of the Priority Unsecured Claim if such claim
is Disputed on the Effective Date. Class 3 is impaired and is
entitled to vote on the Plan.
On the Effective Date, the Debtor will distribute the proceeds of
the sale of its assets to the entity now known as Movia, Inc.,
along with all its other available cash.
While the Debtor will continue to exist as a corporate entity after
the consummation of the Plan, the Debtor does not anticipate any
future operations.
A full-text copy of the First Amended Disclosure Statement dated
November 2, 2023 is available at https://urlcurt.com/u?l=ccOJ1l
from PacerMonitor.com at no charge.
Counsel to the Debtor:
Timothy D. Miltenberger, Esq.
COHN BIRNBAUM & SHEA P.C.
CityPlace II, 15th Floor, 185 Asylum Street
Hartford, CT 06103
E-mail: Tmiltenberger@cbshealaw.com
About Movia Robotics
Movia Robotics, Inc., was a collaborative robotics company building
systems and software to help children on the autism spectrum learn
and grow using robotic technology.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Conn. Case No. 23-20024) on Jan. 18,
2023, with up to $10 million in both assets and liabilities.
Timothy Gifford, president of Movia Robotics, signed the petition.
Judge James J. Tancredi oversees the case.
The Debtor tapped Timothy D. Miltenberger, Esq., at Cohn Birnbaum &
Shea, P.C. as legal counsel; Supporting Strategies as bookkeeper;
and Koos & Company, P.C. as accountant.
MSS INC: Court OKs Cash Collateral Access Thru Dec 13
-----------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of North
Carolina, Raleigh Division, authorized SS. Inc. d/b/a MSS-Ortiz
Electrical Services to use cash collateral on an interim basis, in
accordance with the budget, with a 10% variance, thru December 13,
2023.
Prepetition, the Debtor incurred the following indebtedness in
connection with the financing of its business operations:
A. Truist Loan (Loan No. 0497). The Debtor, on February 23, 2018,
executed and delivered to SUNTRUST BANK, predecessor-in-interest to
TRUIST BANK a Promissory Note in the original principal amount of
$150,000. The security interest in the Truist Collateral was
perfected by the filing of a UCC-1 Financing Statement with the
North Carolina Secretary of State, File No. 2018 00174966A. The
Debtor paid, in full, the outstanding balance owed to Truist under
the Truist Loan, from the proceeds generated by the FNB Loan. As a
result, and on the Petition Date, there were no amounts due and
owing by the Debtor pursuant to the Truist Loan.
B. First National Loan (Loan No. 2786). Prepetition, the Debtor and
other coobligors, executed and delivered to FIRST NATIONAL BANK OF
PENNSYLVANIA, a Promissory Note dated July 26, 2023, in the
original principal amount of $450,000, the principal amount of
which was due and payable on January 26, 2025, with regularly
monthly payments of accrued interest, at a rate equal to 8.25% per
annum, and payable monthly commencing on August 26, 2023. Repayment
and performance of the FNB Note was secured by a security interest,
granted under a Security Agreement.
The security interest of FNB, in the FNB Collateral, was perfected
by the UCC Financing Statement filed with the North Carolina
Secretary of State on August 15, 2023, File No. 20230102499C. The
outstanding balance of the FNB Loan, as of August 14, 2023, was
$431,504.
C. McCorkle Loan. The Debtor executed and delivered to TOMMY JOE
MCCORKLE, a Promissory Note dated March 8, 2023, in the original
principal amount of $500,000, with interest accruing thereon at a
rate equal to 2% per annum and payable on demand. Repayment of the
McCorkle Note was secured by a Security Agreement, which granted
McCorkle a security interest in personal property collateral. The
security interest in the McCorkle Loan Collateral was perfected by
the filing of a UCC Financing Statement with the North Carolina
Secretary of State.
The Debtor will pay, as adequate protection, $50,000 to First
National Bank of Pennsylvania in exchange for the interim use of
cash collateral under the Order.
It will be a default thereunder for any one or more of the
following to occur:
(a) the Debtor fails to comply with any terms or conditions of the
Order; or
(b) the Debtor uses cash collateral other than as permitted in the
Order.
A further hearing on the matter is set for December 6, 2023 at 1:30
p.m.
A copy of the court's order and the Debtor's budget is available at
https://urlcurt.com/u?l=VlfwE9 from PacerMonitor.com.
The Debtor projects $150,000 in total income and $141,287 in total
operating expenses for the period from November 13 to December 13,
2023.
About MSS Inc.
MSS. Inc. sought protection under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. E.D. N.C. Case No. 23-02487) on August 28, 2023. In
the petition signed by Matthew Filzen, vice president/chief
operations officer, the Debtor disclosed up to $10 million in both
assets and liabilities.
Judge Joseph N. Callaway oversees the case.
Joseph Z. Frost, Esq., at Buckmiller, Boyette & Frost, PLLC,
represents the Debtor as legal counsel.
MVK FARMCO: Seeks to Hire Ordinary Course Professionals
-------------------------------------------------------
MVK FarmCo LLC seeks approval from the U.S. Bankruptcy Court for
the District of Delaware to hire professionals utilized in the
ordinary course of business.
The OCPs include:
Tier 1 OCP
BARSAMIAN & MOODY
1141 W. Shaw Ave, Suite 104
Fresno CA 93711-3704
General Counsel - Legal Matters
SHEPPARD MULLIN
Richter & Hampton
333 S. Hope St, 43rd Floor
Los Angeles CA 90071-1422
General Counsel - Legal Matters
Tier 2 OCP
BLATT & SORELL TAX GROUP, INC
140 South Lake Ave Ste 349
Pasadena CA 91101
Tax Consulting Services - Property and other tax
BROWNSTEIN HYATT FARBER SCHRECK LLP
410 17th St 22nd Floor
Denver CO 80202
General Counsel - Legal Matters (Farm Ops)
CARLSON, QUINN & ASSOCIATES
2000 Powell Street, Suite 1600
Emeryville CA 94608-1861
Strategic Retirement Consultants
CSC
PO Box 7410023
Chicago IL 60674-5023
Business filings and administration
FENNEMORE DOWLING AARON
8080 N Palm Ave Third Floor
Fresno CA 93711
General Counsel - Legal Matters
FRESHFIELDS BRUKHAUS DERINGER
601 Lexington Ave, 58th Floor
New York NY 10022
Legal fees - Equipment financing agreement
GEORGE NIKOLICH CONSULTING INC
1567 E Granada Ave
Fresno CA 93720
Farm Operations - Consulting Services
GREENBERG TRAURIG, LLP
PO Box 936769
Atlanta GA 31193-6769
Legal fees - Equipment financing agreement
JOELE FRANK
622 Third Avenue, Floor 36
New York NY 10017
Communication Advisor
MALITZLAW INC
1295 Scott Street
San Diego CA 92106
General Counsel - Legal Matters
MOSS ADAMS LLP
PO Box 101822
Pasadena CA 91189-1822
401(K) Plan Audit
POTTER ANDERSON CORROON LLP
PO Box 951
Wilmington DE 19899-0951
General Counsel - Legal Matters
REED SMITH LLP
599 Lexington Avenue
New York NY 10022
General Counsel - Legal Matters
RINALDI AG SERVICES, INC
12557 Avenue 396
Cutler CA 93615
Farm Management Services
SAGEVIEW ADVISORY GROUP LLC
4000 Macarthur Blvd Suite 1050
Newport Beach CA 92660
Retirement Plan Consulting
SMITH, ANDERSON, BLOUNT, DORSETT,
MITCHELL & JERNIGAN LLP
PO Box 2611
Raleigh NC 27602-2611
General Councel - Legal Matters
About MVK FarmCo
MVK FarmCo, LLC and its affiliates are providers of stone fruit,
operating an integrated network of farms, ranches and packaging
facilities. Founded in 1999 and headquartered in Fresno, Calif.,
the Debtors cultivate approximately 18,000 acres of land nestled
throughout the San Joaquin Valley.
The Debtors filed Chapter 11 petitions (Bankr. D. Del. Lead Case
No. 23-11721) on Oct. 13, 2023. John Boken, chief executive
officer, signed the petitions.
At the time of the filing, the Debtors reported consolidated assets
of $500 million to $1 billion and consolidated liabilities of $1
billion to $10 billion.
Judge Laurie Selber Silverstein oversees the cases.
The Debtors tapped Kirkland & Ellis, LLP and Kirkland & Ellis
International, LLP as bankruptcy counsel; Young Conaway Stargatt &
Taylor, LLP as local counsel; Houlihan Lokey as investment banker;
and Stretto, Inc. as claims and noticing agent. AP Services, LLC
provides interim management and restructuring support services to
the Debtors.
MYOMO INC: CMS Posts Proposed Medicare Fee Schedule Rate for MyoPro
-------------------------------------------------------------------
Myomo, Inc. announced that the Centers for Medicare & Medicaid
Services (CMS) posted a proposed Medicare Durable Medical
Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) fee
schedule payment rate for the MyoPro to be discussed at CMS'
bi-annual Healthcare Common Procedure Coding System (HCPCS) Public
Meeting, scheduled for Nov. 29, 2023.
CMS has proposed fee schedule rates for the two HCPCS codes
describing the MyoPro, L8701, which is the Company's Motion W
device, and L8702, which is its Motion G device, of $31,745.42 and
$62,457.28, respectively. On Nov. 1, 2023, CMS published its final
rule that classifies the MyoPro as a brace and will enable
reimbursement on a lump sum basis once the rule becomes effective
on Jan. 1, 2024.
"We're pleased to see the process moving forward to determine a
national fee schedule rate from CMS for the MyoPro," stated Paul R.
Gudonis, Myomo's Chairman and CEO. "This is an important milestone
for the Company and an important step in facilitating access to the
MyoPro for qualified Medicare Part B beneficiaries with long-term
muscular weakness or partial paralysis."
The preliminary payment determinations published by CMS for
discussion at the public meeting are only proposed fee schedule
rates. The Company cannot provide any assurance that these rates
will be finalized and published in their current amounts, or at
all.
About Myomo
Headquartered in Cambridge, Massachusetts, Myomo, Inc. --
http://www.myomo.com-- is a wearable medical robotics company that
offers expanded mobility for those suffering from
neurologicaldisorders and upper limb paralysis. Myomo develops and
markets the MyoPro product line. MyoPro is a powered upper limb
orthosis designed to support the arm and restore function to the
weakened or paralyzed arms of patients suffering from CVA stroke,
brachial plexus injury, traumatic brain or spinal cord injury, ALS
or other neuromuscular disease or injury.
Myomo reported a net loss of $10.72 million for the year ended Dec.
31, 2022, compared to a net loss of $10.37 million for the year
ended Dec. 31, 2021. As of March 31, 2023, the Company had $13.74
million in total assets, $4.10 million in total liabilities, and
$9.63 million in total stockholders' equity.
New York, NY-based Marcum LLP, the Company's auditor since 2016,
issued a "going concern" qualification in its report dated March
13, 2023, citing that the Company has incurred significant losses
and needs to raise additional funds to meet its obligations and
sustain its operations. These conditions raise substantial doubt
about the Company's ability to continue as a going concern.
MYOMO INC: Incurs $2 Million Net Loss in Third Quarter
------------------------------------------------------
Myomo, Inc. filed with the Securities and Exchange Commission its
Quarterly Report on Form 10-Q disclosing a net loss of $2.03
million on $5.08 million of revenue for the three months ended
Sept. 30, 2023, compared to a net loss of $2.83 million on $3.97
million of revenue for the three months ended Sept. 30, 2022.
For the nine months ended Sept. 30, 2023, the Company reported a
net loss of $5.69 million on $14.48 million of revenue compared to
a net loss of $8.55 million on $11.51 million of revenue for the
nine months ended Sept. 30, 2022.
As of Sept. 30, 2023, the Company had $17.05 million in total
assets, $6.03 million in total liabilities, and $11.02 million in
total stockholders' equity.
Cash, cash equivalents and short-term investments as of Sept. 30,
2023 were $11.1 million, Cash used in operating activities was $1.7
million for the third quarter of 2023, compared with $2.8 million
for the third quarter of 2022.
Myomo stated, "The Company has historically funded its operations
through financing activities, including raising equity and debt.
On August 29, 2023, The Company completed a public equity
offering, selling 5,413,334 shares of common stock and 1,920,000
pre-funded warrants at $0.60 per share, or at $0.5999 per
pre-funded warrant, generating proceeds after fees and expenses of
approximately $3.9 million. On January 17, 2023, the Company
completed a public equity offering, selling 13,169,074 shares of
common stock and 6,830,926 pre-funded warrants at $0.325 per share
or at $0.3249 per warrant, generating proceeds after fees and
expenses of approximately $5.7 million...Financing activities, such
as the recent public equity offerings, are enabling the Company to
sustain its operations. Considering the Company's cash balance as
of September 30, 2023, cash used from operations over the last
twelve months, expected cash requirements over the next twelve
months, and uncertainty of reimbursement, particularly from the
Centers for Medicare and Medicaid Services ("CMS") for Medicare
Part B beneficiaries, management believes there is substantial
doubt regarding its ability to continue as a going concern."
Management Commentary
"We are pleased to deliver record quarterly product revenue that
exceeded $5 million for the first time, driven by a record number
of orders and insurance authorizations, including authorizations we
were able to convert into revenue in the quarter," stated Paul R.
Gudonis, Myomo's chairman and chief executive officer. "Our focus
for the rest of the year is to continue executing to our business
plan while managing our operating expenses, and working to ensure
successful outcomes for our patients, including Medicare Part B
beneficiaries. We look forward to working with appropriately
screened and medically necessary Medicare Part B patients in
anticipation of being able to fit them with their own MyoPro."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/0001369290/000095017023060417/myo-20230930.htm
About Myomo
Headquartered in Cambridge, Massachusetts, Myomo, Inc. --
http://www.myomo.com-- is a wearable medical robotics company that
offers expanded mobility for those suffering from
neurologicaldisorders and upper limb paralysis. Myomo develops and
markets the MyoPro product line. MyoPro is a powered upper limb
orthosis designed to support the arm and restore function to the
weakened or paralyzed arms of patients suffering from CVA stroke,
brachial plexus injury, traumatic brain or spinal cord injury, ALS
or other neuromuscular disease or injury.
Myomo reported a net loss of $10.72 million for the year ended Dec.
31, 2022, compared to a net loss of $10.37 million for the year
ended Dec. 31, 2021. As of March 31, 2023, the Company had $13.74
million in total assets, $4.10 million in total liabilities, and
$9.63 million in total stockholders' equity.
New York, NY-based Marcum LLP, the Company's auditor since 2016,
issued a "going concern" qualification in its report dated March
13, 2023, citing that the Company has incurred significant losses
and needs to raise additional funds to meet its obligations and
sustain its operations. These conditions raise substantial doubt
about the Company's ability to continue as a going concern.
NABORS INDUSTRIES: Releases Third Quarter 2023 Results
------------------------------------------------------
Nabors Industries Ltd. reported third quarter 2023 operating
revenues of $734 million, compared to operating revenues of $767
million in the second quarter.
Nabors said the net loss attributable to shareholders for the
quarter was $49 million, compared to net income of $5 million in
the second quarter. This equates to a loss of $6.26 per diluted
share, compared to a loss per diluted share of $0.31 in the second
quarter. The third quarter results included a charge, related to
mark-to-market treatment of Nabors warrants, of $8 million, or
$0.86 per diluted share, compared to a gain of $18 million, or
$1.95 per diluted share, in the second quarter. Third quarter
adjusted EBITDA was $210 million, compared to $235 million in the
previous quarter.
Anthony G. Petrello, Nabors Chairman, CEO and President, commented,
"Drilling activity across our markets generally met our
expectations. As we had anticipated in the Lower 48, rig count
decreased in the third quarter but it appears to have bottomed,
while leading-edge pricing also seems to have stabilized. The
reduced drilling activity in the U.S. did impact our Nabors
Drilling Solutions and Rig Technologies results somewhat more than
we expected. In line with our forecasts, international markets have
continued to expand with higher pricing.
"During the quarter we experienced challenges with our newbuild
rigs and some of their critical components in Saudi Arabia, which
resulted in deployment delays and significant downtime. We are
currently addressing the quality assurance issues on these assets
delivered by our third-party supplier. We expect our supplier's
performance to improve rapidly as its local manufacturing
experience increases.
"On the positive side, margins in our Lower 48 operation remained
at higher levels than in any prior upcycle. During the third
quarter we saw the early signs of the expected market upturn. In
preparation, we have 14 warm stacked rigs ready to return to work
immediately at minimum cost, as soon as drilling activity turns
around.
Adjusted free cash flow was negative $5 million in the third
quarter. Capital expenditures totaled $157 million, which included
$52 million for the newbuilds in Saudi Arabia. This compares to
$152 million in the second quarter, including $66 million
supporting the newbuilds in Saudi Arabia.
At the end of the third quarter, net debt was $2.1 billion.
William Restrepo, Nabors CFO, stated, "The results delivered by our
operating rigs were encouraging. Our rig count in the Lower 48 held
up well in the third quarter despite total market rig count landing
a bit below expectations. In addition, our revenue per day and
daily gross margin remained near the record high levels set the
prior quarter. We remain well positioned to take advantage of any
recovery in U.S. drilling activity. Internationally we continued to
deploy rigs at attractive pricing, offsetting the contract
expirations in Colombia and Kuwait. In the fourth quarter we expect
rig count increases in the U.S. as well as in international
markets, as compared to the current levels. And we expect Nabors
Drilling Solutions to resume its growth trajectory.
"During the quarter, on top of the $5 million EBITDA shortfall on
our new builds in Saudi Arabia, we faced several unexpected items
that negatively affected our adjusted free cash flow. Most of these
were one-offs or timing shifts across quarters. Capital
expenditures were the largest of these items as they exceeded our
forecast by $33 million. This increase was driven by higher capital
spending in Saudi Arabia and by the $9.5 million purchase of our
operating base in Vaca Muerta, Argentina. We had been attempting
without success to lock in this critical facility over the last
couple of years and had the opportunity to do so during the third
quarter. We expect capital spending to fall materially in the
fourth quarter as these items should not repeat. In addition, our
accounts receivable and other working capital items were
approximately $40 million higher than we had forecast at the end of
last quarter. We expect this impact to reverse in the fourth
quarter.
"Mainly as a result of higher capital expenditures, an EBITDA
shortfall in Saudi Arabia of $11 million in the second half, and
lower NDS and Rig Technologies EBITDA of about $13 million combined
in the second half, our full year free cash flow is now expected to
total $225 to $250 million, as compared to our prior forecast at
the end of the second quarter of $300 to $350 million. The impact
from higher capital expenditures during the second half, an
increment of approximately $40 million, comes from the acceleration
of deployments in Algeria, which will shift $20 million in capital
expenditures from early 2024 into the fourth quarter of 2023, from
capital spending in Saudi Arabia which is expected to be some $10
million higher than forecast earlier, and from the acquisition of
the Vaca Muerta base, which was not part of our prior forecast.
"We are now beginning the forecasting process for 2024. Although we
are not yet ready to discuss these projections, we do expect
meaningful year over year increases in both EBITDA and free cash
flow."
Outlook
Nabors expects the following metrics for the fourth quarter 2023:
U.S. Drilling
* Lower 48 average rig count of 72 - 74 rigs
* Lower 48 adjusted gross margin per day of $15,000 - $15,200
* Alaska and Gulf of Mexico adjusted EBITDA up by $1.5
million
International
* Rig count up by one to two rigs versus the third quarter
average
* Adjusted gross margin per day of approximately $16,200 -
$16,300
Drilling Solutions
* Adjusted EBITDA up by approximately 10% vs the third
quarter
Rig Technologies
* Adjusted EBITDA up by approximately 20% vs the third
quarter
Capital Expenditures
* Capital expenditures of $95 million, with approximately $35
million for the newbuilds in Saudi Arabia
Adjusted Free Cash Flow
* Adjusted free cash flow for the fourth quarter of $165 to
$190 million and for the full year 2023 of $225 to $250 million
Petrello concluded, "As we look to the fourth quarter, we expect
improvements in our financial results, especially in free cash
flow. With the international expansion already in hand, and the
indications we have seen for growth in the U.S., we are positioned
for meaningful improvement in 2024. The momentum we are now
generating with our Energy Transition initiatives gives us
additional confidence in this positive outlook."
A full-text copy of the Company's report is available at
https://tinyurl.com/mwyccfxt
About Nabors
Nabors Industries Ltd. (NYSE: NBR) owns and operates land-based
drilling rig fleets and provides offshore platform rigs in the
United States and several international markets. Nabors also
provides directional drilling services, tubular services,
performance software, and innovative technologies for its own rig
fleet and those of third parties.
Nabors Industries reported a net loss of $307.22 million in 2022, a
net loss $543.69 million in 2021, a net loss of $762.85 million in
2020, a net loss of $680.51 million in 2019, a net loss of $612.73
million in 2018, and a net loss of $540.63 million in 2017.
* * *
Egan-Jones Ratings Company, on May 19, 2023, maintained its 'CCC-'
foreign currency and local currency senior unsecured ratings on
debt issued by Nabors Industries Ltd.
NB COMMONS: Wins Cash Collateral Access on Final Basis
------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Washington
authorized NB Commons, LLC to use the cash collateral of Greyhawk
SSOF Ruckus Lender, LLC on a final basis in accordance with the
budget, with a 10% variance.
The Debtor requires the use of cash collateral to preserve,
maintain and operate its property that produces cash collateral in
the form of monthly rent payments; timely and fully pay its
property management team, utilities, taxes, and other operating
expenses so as to permit it to continue its ordinary course
operations and to maintain its ongoing business for the benefit of
its estate and creditors.
Pursuant to (i) the Promissory Note, dated as of October 14, 2020,
executed by the Debtor, as borrower and (ii) the Loan Agreement,
dated as of October 14, 2020, by and between the Debtor, as
borrower, and U.S. Real Estate Credit Holdings III-A, LP, as
lender, the Prepetition Secured Party agreed to make a loan in the
aggregate principal amount of $40.950 million to the Debtor.
As of the Petition Date, the Debtor was indebted to the Prepetition
Secured Party pursuant to the Loan Documents in the aggregate
amount of not less than $42.5 million plus additional amounts
allowable under or in connection with the Loan Documents.
As adequate protection, Greyhawk is granted valid, binding,
continuing, enforceable, fully-perfected, first-priority senior
replacement security interests in and liens on the Prepetition
Collateral and all tangible and intangible post-petition property
of the same type and classification as the Prepetition Collateral.
The Adequate Protection Liens will be valid, binding and
enforceable against any trustee or other estate representative
appointed in any case, upon the conversion of the Chapter 11 Case
to a case under chapter 7 of the Bankruptcy Code and/or upon the
dismissal of the Chapter 11 Case or Successor Case.
Authorization to use cash collateral will automatically terminate
without further order from the Court on the earlier of (x) January
31, 2023, unless extended by agreement of the Debtor and
Prepetition Secured Party, or order of the Court and (y) if an
Event of Default occurs and remains uncured for more than seven
business days following the delivery to counsel to the Debtor and
the filing with the Court of written notice declaring that the
Debtor's right to use cash collateral has been terminated by the
Prepetition Secured Party.
The events constitute an "Event of Default" include:
(a) The failure by the Debtor to perform or comply in any material
respect with any term or provision of the Interim Order;
(b) The conversion to a Chapter 7 case or dismissal of the Chapter
11 Case without the consent of the Prepetition Secured Party; and
(c) The entry of an order reversing, staying, vacating, or
otherwise modifying in any material respect this Interim Order
without the consent of the Prepetition Secured Party, unless such
order provides otherwise.
A continued hearing on the matter is set for January 31, 2023 at 1
p.m.
A copy of the court's order is available at
https://urlcurt.com/u?l=6joN8d from PacerMonitor.com.
About NB Commons, LLC
NB Commons, LLC dba The Ruckus Student Living is a housing
community in Pullman with an outdoor pool and indoor pool and spa
that are open 24/7.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D. Wash. Case No. 23-01053) on August 23,
2023.
Judge Frederick P. Corbit oversees the case.
John D. Munding, Esq., at Munding, P.S. represents the Debtor as
legal counsel.
NEPHROS INC: Judy Krandel Appointed as Chief Financial Officer
--------------------------------------------------------------
Nephros, Inc. announced the appointment of Judy Krandel as chief
financial officer, effective Nov. 1, 2023. In this role, Ms.
Krandel will be responsible for directing the company's finances
and working closely with the chief executive officer and Board of
Directors to develop and execute Nephros's long-term strategy.
Ms. Krandel joins the company with an impressive track record in
financial leadership and strategic planning. She brings more than
20 years of experience in asset management, investment, operations,
financial reporting and oversight, as well as formal accounting
expertise.
"We are thrilled to welcome Judy to our team. She has an extensive
history leading companies large and small to financial excellence
as an officer, a director, and an investor. I am confident in
Judy's ability to lead and oversee our financial operations," said
Robert Banks, president and chief executive officer.
Retiring Chief Financial Officer Andy Astor commented, "With her
background as both an investor and an executive, Judy is a superb
choice for Nephros. I am delighted to welcome her as my successor,
and I believe she will effectively lead Nephros to continued growth
and prosperity."
Regarding her new role, Ms. Krandel shared, "I am honored to come
aboard at this exciting time, as Nephros enjoys positive cash flows
and growing revenue momentum. I look forward to being a part of
the Nephros team and contributing to the shared success of the
entire organization, while helping to further the company mission
of better water for all." She continued, "Having tackled some of
the most complex financial, regulatory, and governance issues for
the companies with which I have been involved, I am well-positioned
to add significant value for investors and stakeholders, and drive
effective financial strategies."
Prior to joining Nephros, Ms. Krandel served as the chief financial
officer of Recruiter.com, where she worked closely with the CEO to
leverage AI and new technology to drive company growth while also
building public market capitalization and enterprise value.
Additionally, Ms. Krandel was responsible for developing strategies
for capital allocation, internal growth, and M&A while at Paltalk,
Inc.
Ms. Krandel holds a Bachelor of Science in Finance from the Wharton
School and a Master of Business Administration from the University
of Chicago Booth School of Business. In addition to previous roles
as chief financial officer for two other publicly traded companies,
Ms. Krandel has been simultaneously active in multiple corporate
and advisory boards.
Ms. Krandel's employment with the Company is subject to the terms
of a letter agreement dated July 28, 2023. In accordance with the
Employment Agreement, Ms. Krandel will receive an initial base
salary of $140,000 and will be eligible for an annual performance
bonus targeted at 25% of her annualized base salary, based
primarily on Company performance and other performance objectives
established by the Board of Directors.
Inducement Stock Option Grant
Nephros has approved the issuance of an inducement grant to Ms.
Krandel, effective upon the commencement of her appointment as
chief financial officer, consisting of a 10-year non-qualified
stock option to purchase 122,524 shares of the Company's common
stock. The grant was unanimously approved by the Company's board
of directors, including all of its independent directors and was a
material inducement to Ms. Krandel's acceptance of employment with
Nephros in accordance with Nasdaq Listing Rule 5635(c)(4) as a
component of her employment compensation. The stock option will be
equal to the closing sale price of the Company's common stock as of
the close of regular trading on Nov. 1, 2023. The inducement grant
will vest over a four-year period, with 25% of the shares vesting
on Nov. 1, 2024, and the remaining shares thereafter vesting in 12
equal quarterly installments, subject to her continued employment
with Nephros through the applicable vesting dates. The inducement
grant is subject to the terms and conditions of a stand-alone stock
option agreement entered into outside of the Company's 2015 Equity
Incentive Plan.
About Nephros
South Orange, New Jersey-based Nephros, Inc. -- www.nephros.com --
provides innovative water filtration products and services, along
with water-quality education, as part of an integrated approach to
water safety.
Nephros Inc. reported a net loss of $7.11 million for the year
ended Dec. 31, 2022, a net loss of $3.87 million for the year ended
Dec. 31, 2021, a net loss of $4.53 million for the year ended Dec.
31, 2020, a net loss of $3.18 million for the year ended Dec. 31,
2019, and a net loss of $3.32 million for the year ended Dec. 31,
2018. As of Dec. 31, 2022, the Company had $11 million in total
assets, $2.12 million in total liabilities, and $8.88 million in
total stockholders' equity.
NORTHSTAR GROUP: Moody's Rates New Secured 1st Lien Term Loan 'B2'
------------------------------------------------------------------
Moody's Investors Service assigned a B2 rating to NorthStar Group
Services, Inc.'s proposed backed senior secured first lien term
loan. All other ratings for NorthStar, including the B2 corporate
family rating, B2-PD probability of default rating and B2 rating on
its existing backed senior secured first lien term loans maturing
in 2026 are unchanged. The outlook is stable.
Proceeds from the proposed $710 million term loan due 2028 will be
used primarily to repay about $683 million outstanding on the
company's existing term loans due 2026 and about $11 million drawn
on its existing $100 million ABL expiring in 2025, as well as pay
transaction fees and expenses. Concurrently, NorthStar plans to
raise a $125 million ABL revolver expiring in 2027 to replace the
existing facility, with $5 million expected to be drawn at
transaction close. Moody's will withdraw the B2 rating on the 2026
term loans once this debt is repaid. The transaction will increase
financial leverage, with Moody's expectation of pro forma adjusted
debt-to-LTM EBITDA of about 4.3x at September 30, 2023. However,
the company is also extending debt maturities and expects to reduce
annual debt amortization requirements to 1% compared to the current
level of 2.5% on the existing term debt, which would step up to 5%
in 2024.
RATINGS RATIONALE
NorthStar's ratings reflect its diverse operating model, good
technical capabilities in its specialty areas, which include the
handling and disposal of hazardous waste, and unique high-value
disposal facility that enables vertical integration. These factors
make the company well-positioned to capture future opportunities in
the nuclear plant deconstruction and decommissioning (D&D) market
and significant projects in its other niches, including commercial
and industrial deconstruction (C&I) and environmental coal ash
remediation. Demand for services is partly driven by the compliance
needs of customers to meet increasingly stringent environmental
regulations. The contractual nature of services, especially for
large multi-year projects that are underpinned by longstanding
customer relationships, provides revenue visibility.
However, the company is facing revenue and margin pressures from
its construction and industrial deconstruction business as certain
customers defer or cancel projects amid higher interest rates and
weaker industrial activity. Revenue and cash flow will fluctuate
due to the volatility of project work, including variable timing of
NorthStar's large volume of small projects and the irregularity of
large scale weather events in its emergency response and
restoration business. Nuclear D&D projects also have variable
timing around potential plant shutdowns and event driven work from
limited at-risk nuclear reactors. These projects take long to plan
and are vulnerable to delays or disruptions, which places
importance on having multiple projects going simultaneously and
maintaining good liquidity. The nature of the D&D business poses
considerable operational risk with sizeable projects in a headline
risk industry. Bidding for projects is competitive. A ramp in
activity from contracted large projects and business wins should
support higher earnings and strengthen credit metrics over the next
12-18 months. Event risk is high with private equity control, also
considering NorthStar's history of debt funded dividends.
The stable outlook reflects Moody's expectation of moderate organic
revenue growth to support positive free cash flow from the
contracted book of business over the next year, aided by recent
acquisition synergies. The company is well positioned to capitalize
on potential upcoming D&D projects and future large projects in its
commercial and industrial deconstruction business. Moody's expect
these factors to support deleveraging from EBITDA growth and modest
debt reduction over the next 12 to 18 months. The stable outlook
incorporates expectations that the company will maintain adequate
liquidity.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
The ratings could be downgraded with deteriorating liquidity,
including weakening free cash flow and/or diminishing revolver
availability. A significant disruption in the performance on any
major contract or delay in the company's large, contracted projects
or failure to capture a good portion of upcoming D&D or
commercial/industrial deconstruction awards could also drive a
negative rating action. The ratings could also be downgraded with
expectations of weakening operating performance, including
sustained margin erosion, debt-to-EBITDA remaining above 5x or
EBIT-to-interest expense below 2.5x. A major accident related to
the handling of radioactive or hazardous material could also lead
to a downgrade, as could debt funded dividends or acquisitions that
weaken the metrics or liquidity.
The ratings could be upgraded with accelerated and consistent
growth in margins and free cash flow, driven by an increase in
contract wins on upcoming nuclear plant D&D projects and commercial
deconstruction projects, such that debt-to-EBITDA is expected to
remain below 4x. A more conservative financial policy and the
maintenance of good liquidity would also be prerequisites to an
upgrade.
The principal methodology used in this rating was Environmental
Services and Waste Management published in May 2023.
NorthStar Group Services, Inc. provides a range of services,
including commercial and industrial deconstruction; nuclear
decommissioning, deconstruction and waste disposal; property damage
response and restoration; and environmental coal ash remediation
and soil stabilization services. The company has a disposal
facility operated under Waste Control Specialists, LLC (WCS) in
West Texas that processes, treats, stores and disposes of
radioactive and hazardous waste. NorthStar acquired Trans Ash,
Inc., a provider of coal ash remediation services, in January 2023.
Revenue for the twelve months ended June 30, 2023, was
approximately $973 million.
NORTHWEST FOUNDATION: Claims Will be Paid from Property Refinance
-----------------------------------------------------------------
Northwest Foundation for A Course in Miracles filed with the U.S.
Bankruptcy Court for the Western District of Washington a
Disclosure Statement describing Plan of Reorganization dated
October 31, 2023.
The Debtor was established in 1982 as a non-profit foundation for
religious studies and prayer. It has an informal roster of members
who participate in Debtor's workshops and study groups, as well as
make donations to Debtor.
The Debtor's sole substantial income is receiving donations made by
its members. From those donations, the Debtor is able to conduct
its business. Besides the housekeeping matters, the Debtor holds
workshops and study groups, both in-person and virtually.
In August 2010, Debtor purchased the property at 37918 Vista Key Dr
NE, Hansville, WA 98340 ("Vista Key"). In connection with the
purchase, Debtor took a loan secured by a deed of trust from
Charles Bundschu (aka Charles C. Bundschu III Trust). The note
provided specifically that Debtor would sell another property,
located at 5977 Cliffside Rd NE, Kingston, WA 98346 ("Cliffside")
within 1 year, and that Debtor would pay off the note within 2
years.
Debtor could not pay off the note by the ascribed date. As such, on
or about April 24, 2023, Bundschu recorded and effected a Notice of
Trustee's Sale, setting the sale date for July 28, 2023.
Principally to stall this sale, Debtor filed the instant case on
July 27, 2023.
The outline of the Plan is to have the Debtor refinance the Vista
Key property. If it cannot refinance successfully on its own, it
will transfer the property to Paul Tuttle, is vice president, with
the express purpose of having him refinance the property. Mr.
Tuttle would either hold the property for the benefit of the Debtor
or he will transfer the property back to the Debtor, after the
refinancing is set.
Distributions shall be made from funds available at refinancing of
the Vista Key property.
The plan will pay all creditors in full no later than 12 months
after confirmation, to be paid upon funds becoming available from
the refinancing. Each class will get a different rate of interest
as deemed appropriate by the Debtor. Specifically, consensual
agreements will be paid at the interest rate therein provided,
which was 12% in regard to the Bundschu note. Tax claims will be
paid at 9% interest, and general unsecured claims will be paid at
3% interest.
A full-text copy of the Disclosure Statement dated October 31, 2023
is available at https://urlcurt.com/u?l=SGM3tR from
PacerMonitor.com at no charge.
Debtor's Counsel:
Lance L. Lee, Esq.
LAW OFFICES OF LANCE L. LEE
1700 7th Ave Ste 2100
Seattle WA 98101
Tel: (206) 332-9841
E-mail: lance@lancelee.com
About Northwest Foundation
Northwest Foundation for A Course in Miracles sought relief under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. W.D. Wash. Case No.
23-11368) on July 27, 2023. In the petition filed by Paul N.
Tuttle, vice president, the Debtor disclosed $2,021,195 in total
assets and $711,603 in total liabilities.
Judge Marc Barreca oversees the case.
The Law Offices of Lance L. Lee serves as the Debtor's bankruptcy
counsel.
NOTOX TECHNOLOGIES: Chief Financial Officer Dies
------------------------------------------------
Notox Technologies Corp. disclosed in a Current Report on Form 8-K
filed with the Securities and Exchange Commission of the unexpected
death of John Marmora, the president, chief financial officer,
secretary, treasurer and a director of the Company. Mr. Marmora
had served as a director and officer of the Company since June 28,
2013.
The Company's board of directors now consists of one member, Zoran
Konevic, who has temporarily agreed to act as the president,
secretary and treasurer of the Company in the wake of Mr. Marmora's
passing. Mr. Konevic is also the Company's chief executive
officer.
The Company will begin to search for a new chief financial officer
as circumstances allow.
About Notox Technologies
Headquartered in Ontario, Canada, Notox Technologies Corp. is a
company in the business of developing and commercializing
innovative technologies. Through Notox, the Company owns 100% of
the right, title and interest in and to the License Agreement with
the Clinic formerly held by ZHC. The License Agreement grants the
Company the exclusive license to certain patented intellectual
property of the Clinic relating to the treatment of a neuromuscular
defect developed by Dr. Frank Papay, MD, FACS Chairman Dermatology
and Plastic Surgery Institute, Cleveland Clinic, and in particular,
the ability to produce, sell, improve and modernize products that
incorporate such intellectual property in the fields of aesthetics,
drug free pain management, body contouring and perspiration
control. The Company plans to develop this intellectual property
into the world's first credible and healthier non-toxic alternative
to Botox, which is a commercial form of the botulinum toxin protein
used primarily for medical and cosmetic purposes.
Vancouver, Canada-based Davidson & Company LLP, the Company's
auditor since 2019, issued a "going concern" qualification in its
report dated Nov. 29, 2019, citing that the Company has suffered
recurring losses from operations and has a net capital deficiency
that raise substantial doubt about its ability to continue as a
going concern.
The Company was unable to complete the preparation of its Form 10-K
for the period ended Aug. 31, 2020 in a timely manner due to delays
in obtaining certain inventory balances associated with its
Xthetica Canada Inc. subsidiary, and related issues.
NOVA CHEMICALS: Fitch Assigns 'BB-' IDR, Outlook Stable
-------------------------------------------------------
Fitch Ratings has assigned an Issuer Default Rating (IDR) of 'BB-'
to NOVA Chemicals Corporation. Fitch has also assigned a rating of
'BB+'/'RR2' to NOVA's senior secured revolver, term loan, and its
newly announced senior secured notes and a rating of 'BB-/'RR4' to
NOVA's senior unsecured notes and delayed draw term loan. The
Rating Outlook is Stable.
The rating reflects NOVA's position as a low-cost ethylene and
polyethylene producer globally, sufficient liquidity, and
relatively moderate maintenance capital requirements, offset by an
elevated debt burden, aggressive dividend and capital spending
history, and exposure to commodity prices at a weak point in the
cycle.
The Stable Outlook reflects Fitch's expectation of EBITDA
growth-driven leverage reduction following the cessation of outages
at NOVA's Corunna facility and the completion of capacity
expansions at that same site, leading to EBITDA Leverage durably
below 5.5x.
KEY RATING DRIVERS
Aggressive Capital Deployment Activity: NOVA and its
petrochemical-oriented peers enjoyed record earnings and cash flow
generation in 2021 and the first half of 2022, leading to EBITDA
leverage of 1.6x in 2021. In the context of this strong financial
performance and EBITDA-driven deleveraging, NOVA made distributions
of $1 billion in 2021 and $200 million in 2022 to its ultimate
parent, Mubadala Investment Company, and continued a $3 billion
capacity expansion in Ontario, Canada. These actions limited NOVA's
ability to meaningfully reduce debt during this time, and the
company now faces roughly $1.5 billion in maturities in 2024 at a
time when the macroeconomic environment is much weaker, which
stresses the credit profile.
Elevated Leverage, Improving Operations: A weakening macroeconomic
environment, including a period of sharp destocking starting in the
second half of 2022, has put pressure on NOVA's earnings and cash
flow generation. Fitch believes that this period of destocking is
coming to an end but that any recovery is likely to be sluggish
rather than sharp. Additionally, NOVA suffered two unplanned
outages at its Corunna ethylene production facility due to a
mechanical issue within a third-party proprietary technology. The
Corunna cracker is the sole source of ethylene feedstock for its
three polyethylene-producing assets in Ontario, and the outage
alongside macroeconomic headwinds have led to expectations for 2023
to be the company's worst performance in years, with Fitch
forecasting YE'23 EBITDA leverage around 7.0x.
Issues with the Corunna cracker have largely been resolved and the
company's Ontario buildout is nearly complete. These factors should
spur EBITDA-driven deleveraging throughout the ratings horizon,
particularly as the olefin and polyolefin markets improve.
Nevertheless, muted cash generation and a lack of near-term
financial flexibility will likely continue to drag on the credit
profile.
Ongoing Refinancing Efforts: In conjunction with the issuance of
$400 million in senior secured debt to repay its 2024 notes, NOVA
has secured commitments for a delayed draw $500 million unsecured
term loan that has a 12-month maturity with two six-month
extensions at NOVA's discretion. NOVA intends to use a $150 million
revolver draw to repay the remaining unsecured note maturities in
May of 2024. The company also has $500 million in unsecured note
maturities in 2025.
Fitch believes NOVA will be able to extend its secured term loan
maturities until 2026, when its revolver expires. Fitch expects
that the company will be successful in its multi-year refinancing
effort. However, changes in market access or the operating
environment that impede NOVA's ability to improve the maturity
profile in a timely manner may lead to negative ratings pressure.
Sustained Low-Cost Position: NOVA benefits from low-cost feedstock
at its Geismar, Louisiana, Joffre, Alberta and Corunna, Ontario
sites. Assets have access to some of the most prolific shale oil &
gas basins and the Joffre assets are near Canadian oil sands
operations and integrated into the Alberta Ethane Gathering System.
Fitch expects North American ethylene production to remain cost
advantaged despite low global operating rates.
Increased Focus on Sustainability. Fitch believes that NOVA's new
Circular Solutions business line, which focuses on producing
lower-emission, recycled solutions, will remain a key target for
investment during periods of greater cash flow and financial
access. The company is in the process of constructing a recycling
plant in Connersville, Indiana, and is targeting a 30% mix of
recycled polyethylene by 2030. Fitch believes that polyethylene
producers who are successfully able to secure both supply and
demand commitments in North America will be able to enjoy premium
pricing on recycled products.
DERIVATION SUMMARY
NOVA and Westlake Chemical Corporation (BBB/Positive) are both
regional producers concentrated in ethylene and polyethylene
production, but Westlake benefits from greater scale and product
diversification. Both producers have globally competitive cost
bases and have some specialized characteristics resulting in some
margin uplift from pure commodity chemical producers.
Though NOVA and Westlake's North American asset bases do provide
the companies with a relative cost advantage, the companies lack
the scale and geographic diversification of Dow Chemical
(BBB+/Stable) and LyondellBasell (BBB/Positive). These three peers
have demonstrated a greater degree of capital discipline than NOVA,
each electing to repay debt during a period of record margins and
cash flow in 2021 and early 2022 while NOVA paid $1.2 billion in
sponsor dividends. NOVA therefore operates with EBITDA leverage far
higher than that of its peers, with YE'22 leverage of 3.9x compared
to LyondellBasell at 1.7x. This leverage is comparable to that of
H.B. Fuller (BB/Stable) at 3.7x.
KEY ASSUMPTIONS
- Revenue decline of approximately 23% in 2023 due to a mixture of
macroeconomic softness and the Corunna outages. Overall macro
softness continues into 2024 with a modest recovery thereafter,
partially mitigated by the completion of Ontario asset buildout;
- Fitch-calculated EBITDA margins contract sharply in 2023, slowly
recovering to 2019 levels in 2025-2026;
- Capex approximately in line with D&A;
- No additional M&A or sponsor dividends modeled in the forecast,
though Nova may elect to pursue one or both of these options to the
extent that Free Cash Flow generation is strong;
- Limited debt repayment beyond successful execution of the
company's articulated plan for the 2024 maturities. 2025 maturities
refinanced on an unsecured basis
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Demonstrated commitment to operating with EBITDA Leverage durably
below 4.5x, including voluntary debt repayment;
- FCF expected to be generally neutral to positive through the
cycle.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- EBITDA Leverage durably above 5.5x, potentially driven by
persistently low utilization rates;
- Failure to improve the maturity profile in a timely manner;
- FCF expected to be generally negative through the cycle,
straining liquidity;
- Continued aggressive capital deployment via ongoing dividends or
elevated capital spending
LIQUIDITY AND DEBT STRUCTURE
Sufficient Liquidity: At June 30, 2023, NOVA had total liquidity of
roughly $1.1 billion, consisting of $85 million in readily
available cash and just over $1.0 billion in revolver availability.
The company also maintained two accounts receivable securitization
programs, with total funding availability of $275 million and $188
million sold.
The company presently faces $1.475 billion in maturities in 2024,
$400 million of which will be addressed by the newly issued 1st
Lien secured notes, $500 million by the unsecured delayed draw term
loan, and $150 million with a revolver draw. The other $425 million
relates to the secured bank term loan will be extended to April
2026. NOVA intends to address these maturities, as well as $500
million in maturities in 2025, incrementally over the next two
years.
ISSUER PROFILE
NOVA produces and sells ethylene, polyethylene and co-products as
well as expandable polystyrene and advanced foam resins. These
products are used in a wide variety of downstream applications.
ESG CONSIDERATIONS
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Recovery Prior
----------- ------ -------- -----
NOVA Chemicals
Corporation LT IDR BB- New Rating WD
senior
unsecured LT BB- New Rating RR4
senior secured LT BB+ New Rating RR2
OCEAN POWER: Board Schedules Annual Meeting for Jan. 31
-------------------------------------------------------
Ocean Power Technologies, Inc. disclosed in a Current Report on
Form 8-K filed with the Securities and Exchange Commission that the
Board of Directors of the Company scheduled OPT's 2023 Annual
Meeting of Stockholders to occur on Jan. 31, 2024 at 10:00 a.m.
Eastern Time. This date is consistent with the representation that
OPT made to the Delaware Court of Chancery in connection with
ongoing litigation between OPT and Paragon Technologies, Inc. that
OPT would not schedule the 2023 Annual Meeting for a date that is
earlier than Jan. 24, 2024.
For stockholders' reference, OPT first convened its 2022 Annual
Meeting of Stockholders on Dec. 14, 2022, but due to the lack of a
quorum, adjourned it to Jan. 13, 2023 at which time a quorum was
present and stockholders voted on the actions properly brought
before the 2022 Annual Meeting, including the election of
directors.
As previously announced, the OPT Board of Directors has fixed the
close of business on Dec. 4, 2023 as the record date for
determining stockholders entitled to notice of, and to vote at, the
2023 Annual Meeting.
About Ocean Power Technologies
Headquartered in Monroe Township, New Jersey, Ocean Power
Technologies, Inc. -- http://www.oceanpowertechnologies.com--
provides ocean data collection and reporting, marine power,
offshore communications, and Maritime Domain Awareness ("MDA")
products and consulting services. The Company offers its products
and services to a wide-range of customers, including those in
government and offshore energy, oil and gas, construction, wind
power and other industries. The Company is involved in the entire
life cycle of product development, from product design through
manufacturing, testing, deployment, maintenance and upgrades,
working closely with partners across its supply chain.
Ocean Power reported a net loss of $26.33 million for the fiscal
year ended April 30, 2023, a net loss of $18.87 million on $1.76
million for fiscal year ended April 30, 2022, a net loss of $14.76
million for the 12 months ended April 30, 2021, a net loss of
$10.35 million for the 12 months ended April 30, 2020, and a net
loss of $12.25 million for the 12 months ended April 30, 2019.
OKAYSOU CORP: Court OKs Cash Collateral Access Thru Nov 28
----------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California,
Riverside Division, authorized Okaysou Corporation to use cash
collateral in accordance with its agreement with Amazon Capital
Services, Inc., through November 28, 2023.
As previously reported by the Troubled Company Reporter, the cash
collateral consists of the Debtor's assets, receivables, and any
other property of the Debtor. There is a security interest on the
Property held by ACS by virtue of a secured loan agreement in the
original amount of $900,000.
Prior to the bankruptcy Debtor was facing the risk of its funds
being misappropriated and transferred to China, where the court of
U.S. agencies will have no enforcement authority.
The court said the Debtor is authorized to immediately use any cash
collateral that is in its Debtor-in-possession accounts. In
addition, the Debtor is authorized to use any cash collateral
including funds from proceeds of sales of merchandise through
sources other that the Debtor's Amazon Seller's Account.
To the extent that cash sales proceeds are received in the Debtor's
Amazon Seller Account, and the Debtor will be allowed to withdraw
from its seller account and deposit into its debtor-in-possession
accounts up to $41,475 per month from its sale proceeds to cover
its operating expenses, administrative fees and other costs.
As adequate protection to ACS, pursuant to 11 U.S.C. sections 361,
363, and 552(b), to the extent the Debtor uses cash collateral,
Amazon is granted valid, attached, choate, enforceable, perfected,
and continuing security interests in, and liens upon, all
postpetition assets of the Debtor of the same character and type,
to the same nature, extent, and validity as the items and
encumbrances of Amazon attached to the Debtor's assets prior to the
petition date. Amazon's security interests in, and liens upon, the
Post-Petition Collateral will have the same validity as existed
between Amazon, the Debtor, and all other creditors or claimants
against the Debtor's estate on the Petition Date.
The Debtor will be entitled to receive the first $41,475 per month
from proceeds of sale to fund its operational budget. Thereafter,
monthly sales proceeds may be used by ACS to deduct up to $80,381
as adequate protection payments for its loan from the proceeds of
sales conducted through Amazon.
Any sales proceeds in excess of the $80,381 paid to ACS as adequate
protection and the $41,475 distributed to the Debtor for
operational expenses will be paid to the Debtor by ACS and
otherwise segregated by the Debtor, subject to ACS's security
interest, liens and adequate protection liens with any distribution
of such funds subsequent to further Court order.
If the Debtor proposes further use of cash collateral, a hearing on
the motion will be held on November 28, 2023 at 2:00PM. The
Debtor's motion and supporting documents will be filed no later
than November 7, 2023. Any opposition is due on or before November
16, 2023, and replies are due by November 22, 2023.
A copy of the order is available at https://urlcurt.com/u?l=xBo6C4
from PacerMonitor.com.
About Okaysou Corporation
Okaysou Corporation is engaged in e-commerce sale of air purifiers
and accessories. Most of Okaysou's sales are through Amazon.com and
its websites that are managed though Shopify.com.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. C.D. Cal. Case No. 23-11535) on April 17,
2023. In the petition signed by Chief Executive Officer Hao Ma, the
Debtor disclosed up to $1 million in assets and up to $10 million
in liabilities.
Judge Mark Houle oversees the case.
Vahe Khojayan, Esq., at YK LAW, LLP, represents the Debtor as legal
counsel.
ORIGINAL MONTANA: Club Hits Chapter 11 Bankruptcy
-------------------------------------------------
Phil Drake of Independent Record reports that the Original Montana
Club Cooperative Association has filed a Chapter 11 bankruptcy
voluntary petition, a move that members said will buy them time to
deal with financial challenges, reorganize and allow the longtime
iconic downtown social and dining establishment to remain open.
The petition, commonly called a "reorganization bankruptcy," was
filed Wednesday, November 1, 2023, in U.S. Bankruptcy Court for the
District of Montana in Butte. According to USCourts.gov, debtors
usually "propose a plan of reorganization to keep its business
alive and pay creditors over time."
The club cooperative has said earlier it would be taking such
action and paid $1,738 to file for Chapter 11. The club has
retained attorneys James A. Patten, Molly S. Considine and the
Patten, Peterman, Bekkedahl & Green PLLC Law Firm of Billings.
Ramon Mercado, secretary of the cooperative association, told
members of Hometown Helena, a grassroots group of residents, about
the filing early Thursday, November 2, 2023, at a meeting on the
sixth floor of the club at 24 W. 6th Ave.
He described the move as a good step forward that allows the club
to stay open and come up with a debt restructuring plan. He said it
also puts a stay on pending litigation.
The cooperative has been sued by the Montana Club Building
Condominium Owners Association – which owns portions of the
31,381-square-foot building – for nearly $500,000 in unpaid
assessments and interest, which comes to about $700,000.
The 76-page lawsuit was filed Oct. 7, 2022, against the cooperative
and others, seeking foreclosure. It claims the defendants failed to
pay regular monthly dues and assessments for the condo's minimum
expenses. It asks, among many allegations, for the court to
foreclose a lien for common expenses and find the cooperative in
breach of contract.
Charles Robison, the cooperative's board president, said seeking
bankruptcy protection was to avoid a sheriff's sale of the building
that the lawsuit may have prompted.
"The bankruptcy filing was to find the right kind of buyer and
resolution that is best for the building," he said. "We're still
operating and still open, employees are being paid and vendors are
being paid."
According to the filing, the club has 49 creditors or fewer, assets
ranging from $1-10 million and $500,000-$1 million in debt.
The bankruptcy court docket states more financial information must
be filed by Nov. 15. A telephone meeting for creditors was listed
for 10 a.m. December 5, 2023, a status hearing for December 12,
2023 and proof of claims due by January 10, 2024.
On October 4, 2023, shareholders of the cooperative gave the board
authorization to sell all assets of the club. The cooperative owns
the Rathskeller, the second, third and sixth floors and an office
on the first floor of the seven-story building.
Earlier, the cooperative shareholders approved selling the
Rathskeller in the basement for $600,000, putting approval of the
sale to the discretion of the board.
The Montana Club was founded in 1885 as local business people did
not want outsiders to think of Helena as a mining camp.
In 1903, a fire started on the sixth floor and the building burned
to the ground, along with its valuable art collection. Members
vowed to rebuild and the new building went up in 1905.
The Original Montana Club sold portions of the building and formed
the condominium association in 1980. The fourth and fifth floors,
and portions of the first floor, each belong to a separate owner.
In 2018, the Montana Club announced it would become a community
cooperative and dissolve as a members-only social club. Board
members have said there has been an increase of members of the
public dining at the club.
The club is now open to the public for dining 4-9 p.m. Wednesday
and Thursday and 4-10 p.m. Friday and Saturday. It is also open for
other events.
About Original Montana Club
The Original Montana Club Cooperative Association is a co-operative
association opened to the public in June 2018 for a la carte
dining, private dining, weddings, celebrations and business
meetings.
Original Montana Club Cooperative Association sought relief under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Mon. Case No.
23-20145) on November 1, 2023. In the petition filed by Charles
Robison, as president, the Debtor reports estimated assets between
$1 million and $10 million and estimated liabilities between
$500,000 and $1 million.
Honorable Bankruptcy Judge Benjamin P. Hursh handles the case.
The Debtor is represented by:
James A. Patten, Esq.
PATTEN PETERMAN BEKKEDAHL & GREEN
2817 2nd Avenue N, Ste 300
Billings, MT 59101
Tel: 406-252-8500
Email: apatten@ppbglaw.com
OWENS & MINOR: Incurs $6.43MM Net Loss in Third Quarter
-------------------------------------------------------
Owens & Minor, Inc. filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing a net loss
of $6.43 million for the three months ended September 30, 2023,
compared to a net income of $12.5 million for the same billing
period in 2022.
"Our performance in the third quarter is another strong indication
that our business strategy and execution are working, and that we
are beginning to realize the benefits of the Operating Model
Realignment Program. Patient Direct continues to outperform the
market, demonstrating the enduring strength of our go-to-market
strategies and service offerings. Our Medical Distribution division
again produced mid-single digit growth and continues to win new
business. While the volatility of demand and pricing for PPE
appears to be diminishing, we remain cautious on the long-term
trajectory. The Operating Model Realignment Program not only
continued to deliver economic benefits, but also enabled us to
reassess how we do business every day. We are well on our way to
achieving the objectives established when we launched this
initiative in the first quarter," said Edward A. Pesicka, President
& Chief Executive Officer of Owens & Minor.
Pesicka continued, "Building on the progress we made in the first
half of the year, the work we've done in the third quarter resulted
in significant cash flow, enabling us to further reduce debt and
increase our financial flexibility. We continue to align our
balance sheet with our corporate strategy to support further
investment in high growth categories and technology."
Results and Business Highlights:
* Consolidated revenue of $2.59 billion in the third quarter
of 2023, an increase of 3.8% as compared to the third quarter of
2022
* Patient Direct revenue of $648 million, up 9.1% compared to
the third quarter of 2022
* Products & Healthcare Services revenue of $1.94 billion, up
2% versus the prior year period with growth in the Medical
Distribution division of 5% partially offset by a decline in Global
Products
* Third quarter 2023 operating income of $24 million and
Adjusted Operating Income of $84 million
* Adjusted Operating Income essentially flat with the third
quarter of 2022
* Both Patient Direct and Products & Healthcare Services
delivered increases in Segment Income sequentially from the second
quarter to the third quarter of 2023
* Generated $157 million of operating cash flow in the third
quarter, and $629 million year to date
* Driven by strong working capital improvement and
profitability
* Favorable resolution of the FDA review of facial protection
products, clearing the resumption of sales of Halyard face masks
and respirators
The Company narrowed its outlook for 2023:
* Revenue for 2023 to be in a range of $10.3 billion to $10.4
billion
* Adjusted EBITDA for 2023 to be in a range of $535 million to
$555 million
* Adjusted EPS for 2023 to be in a range of $1.30 to $1.40
As of September 30, 2023, Owens & Minor, Inc. has $5.12 billion in
total assets and $4.24 billion in total liabilities.
A full-text copy of the Company's press release providing Third
Quarter Key Highlights, Results and Business Highlights, and 2023
Financial Outlook, is available at https://tinyurl.com/3hbfzs5b
About Owens & Minor
Headquartered in Virginia, Owens & Minor, Inc. distributes medical
and surgical supplies throughout the United States.
In 2019, Fitch Ratings downgraded Owens & Minor, Inc.'s Long-Term
Issuer Default Rating to 'CCC+' from 'B-'/Outlook Negative and its
senior secured debt ratings to 'B-' from 'B'. The recovery ratings
on the debt issues remain 'RR3'. Fitch explained the rating
downgrade reflects the rising level of uncertainty surrounding
customer retention levels and revenue stability, the cash
conversion cycle and the increasing dependence on the company's
revolving credit facility for liquidity. These risks combined with
the significant amount of debt service requirements were
constraining the company's financial flexibility.
In March 2020, Fitch affirmed OMI's Long-Term Issuer Default Rating
at 'CCC+' and OMI's senior secured debt and recovery rating at
'B-'/'RR3', saying the rating affirmation reflected OMI's limited
financial flexibility as a result of customer losses, heightened
competition, accelerating pricing pressure, and significantly
reduced earnings relative to debt levels.
Fitch has sinced hiked OMI's ratings and in April 2023, affirmed
OMI's Long-Term Issuer Default Ratings and its subsidiaries at
'BB-'. Fitch also affirmed the long-term secured debt ratings of
OMI and its subsidiaries at 'BB+'/'RR2' and the long-term senior
unsecured debt ratings of OMI at 'BB-'/'RR4'. Fitch explained the
affirmation of the OMI's ratings reflects its solid position as a
global healthcare solutions company serving acute care providers to
patients in their homes. Fitch said the addition of Apria Inc. as
of March 2022 complements OMI's existing Patient Direct business by
creating the potential for a higher-margin, growth platform
compared with medical distribution. Those benefits are somewhat
offset by the continued uncertainty surrounding the effects of the
COVID-19 pandemic on hospital demand for products, cost inflation
and supply chain disruption along with the incremental financial
risk of the Apria acquisition.
Also in March 2020, Egan Joes Ratings Company downgraded the
foreign currency and local currency senior unsecured ratings on
debt issued by OMI to CCC+ from B-. EJR also downgraded the rating
on commercial paper issued by the Company to C from B. The ratings
firm has since raised OMI's ratings and in August 2023, maintained
its 'BB-' foreign currency and local currency senior unsecured
ratings on debt issued by OMI.
PACKERS HOLDINGS: Moody's Cuts CFR to Caa2 & 1st Lien Debt to Caa1
------------------------------------------------------------------
Moody's Investors Service downgraded Packers Holdings, LLC's
("PSSI") ratings, including its corporate family rating to Caa2
from Caa1 and its probability of default rating to Caa2-PD from
Caa1-PD. At the same time, Moody's downgraded the company's senior
secured first lien credit facilities to Caa1 from B3, with a stable
outlook. Previously, the ratings were on review for downgrade. PSSI
is a Wisconsin-based, provider of contract sanitation services to
the food processing industry in the U.S. and Canada. The rating
action concludes the review for downgrade on the ratings for PSSI,
which was initiated on May 10, 2023.
The downgrade of the corporate family rating and probability of
default rating reflect PSSI's sustained high leverage, with
debt-to-EBITDA that Moody's expects to remain above 10x through
2024. Moody's believes this increases the likelihood of default if
the outstanding mezzanine loan due December 2025 cannot be
adequately refinanced. Moreover, Moody's expects that the company's
ability to achieve sufficient earnings growth over the next 12
months in order to refinance the mezzanine loan on reasonable
economic terms before becoming current will prove challenging. The
company's adequate liquidity provisions support the stable
outlook.
Governance, specifically risk management was a key consideration in
the ratings action. The ability to manage compliance and labor
related risk has implications on the company's earnings as
evidenced by the recent Department of Labor findings. PSSI is
investing in labor monitoring and compliance since the findings.
RATINGS RATIONALE
PSSI's Caa2 CFR reflects the company's very high debt-to-EBITDA
leverage, which Moody's estimates to be over 10x (on Moody's
adjusted basis) for the 12-month period ended September 2023. The
US Department of Labor investigation and financial fine earlier
this year affected PSSI's operations significantly and as a result
of lost contracts, revenue declined in the past few quarters. PSSI
has been experiencing a declining plant count over the past few
years but has been able to increase revenue due to price increases
and by expanding the service scope at plants. However, recent rises
in service pricing have also led to a loss in plants, as customers
seek less expensive alternatives. In addition, there has been
consolidation of plants by customers in the protein industry as
they seek efficiencies. The company is focused on compliance and
monitoring and driving plant count higher. As a result of costs
pressures related to wages and chemicals as well as higher
compliance costs Moody's expects margins to be in the 10% area,
which is lower than historical levels that were in the low
double-digit area.
Refinancing risk is high given the springing maturities on the
revolver and first lien term loan. Under the current terms the
maturities of these credit facilities will be brought forward to
June 4, 2025 for the revolver and September 4, 2025 for the term
loan if more than $100 million of the mezzanine loan due December
2025 remains outstanding as of these dates. The mezzanine notes
have payment-in-kind interest and thus the balance rises each year,
which increases total debt to be refinanced.
The ratings favorably reflect the recurring nature of the company's
revenues given the non-discretionary need for the daily sanitation
services it provides to protein and other food manufacturers, and
the strict regulatory environment in the food processing industry.
Other supportive factors include PSSI's long-term relationships
with large food processing customers in North America, and industry
trends towards increased outsourcing of sanitation services.
PSSI's liquidity is adequate and is supported by $56 million of
nonrestricted cash as of the end of September 30, 2023. The
company's $54 million revolver currently has around $16 million of
availability after accounting for letters of credit. Moody's
expects free cash flow to debt to be in the low single digits
during the next 12 months and is sufficient to cover the
approximately $15 million of annual mandatory amortization on the
term loan. The company is subject to a maximum consolidated first
lien net leverage ratio of 9.1x if the revolver is more than 40%
drawn (net of letters of credit). Moody's does not expect the
company to draw on the revolver and the revolver will be used
mainly to support letters of credit and thus the covenant is not
expected to be tested over the next 18 months.
The individual debt instrument ratings are based on PSSI's
probability of default, as reflected in the Caa2-PD rating, and the
loss given default expectations of the individual debt instruments.
The Caa1 rating on the first-lien senior secured credit facilities,
including the $54 million revolver due 2026 and $1,240 million term
loan due 2028, reflect their senior position in the capital
structure and loss absorption support provided by the $250 million
unsecured mezzanine note (unrated).
The stable outlook reflects Moody's expectations for adequate
liquidity during the next 12 to 18 months. The outlook also
incorporates Moody's view that further declines in plant count will
be contained as a result of better monitoring and compliance by
PSSI as well a focus on winning new plants. The stable outlook also
reflects Moody's expectation that revenue grows slightly in 2024
although margins will be lower because of higher costs.
Deleveraging is possible once margins stabilize, and revenue growth
continues.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded through a substantial improvement in
operating performance, allowing the company to de-lever more
quickly than anticipated. The company's ability to address its
near-term maturities would also support a ratings upgrade.
The ratings could be downgraded if liquidity erodes through greater
than expected cash flow burn, covenant violations, or if the
Moody's expects a high probability of a distressed exchange.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
Packers Holdings, LLC (known as "PSSI"), founded in 1972 and
headquartered in Kieler, Wisconsin, is a provider of contract
sanitation services to the food processing industry in the U.S. and
Canada. In May 2018 PSSI was acquired by Blackstone Group L.P. PSSI
generated approximately $1.2 billion in revenue in for the last
twelve months ending September 2023.
PB MICHIGAN: Court OKs Cash Collateral Access on a Final Basis
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Michigan,
Southern Division, authorized PB Michigan, LLC to use cash
collateral on a final basis in accordance with the budget, through
January 7, 2024.
As adequate protection for the use of cash collateral, Pendulum
Finance, the U.S. Small Business Administration, and any other
secured creditors that may claim an interest in the cash collateral
are granted replacement liens, with the same priority that each
said secured creditor had pre-petition, in all types and
descriptions of collateral that were secured by the applicable
pre-petition loan documents.
A copy of the order is available at https://urlcurt.com/u?l=EJBSRa
from PacerMonitor.com.
About PB Michigan, LLC
PB Michigan, LLC sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D. Mich. Case No. 23-48504) on September
28, 2023. In the petition signed by Allison LeMay, member/manager,
the Debtor disclosed up to $50,000 in assets and up to $10 million
in liabilities.
Judge Lisa S. Gretchko oversees the case.
Mark H. Shapiro, Esq., at Steinberg Shapiro & Clark, represents the
Debtor as legal counsel.
PERSIMMON HOLLOW: Voluntary Chapter 11 Case Summary
---------------------------------------------------
Debtor: Persimmon Hollow Brewing Company, LLC
111 W. Georgia Avenue
DeLand, FL 32720
Business Description: The Debtor owns and operates a brewery and
taproom in DeLand, FL.
Chapter 11 Petition Date: November 10, 2023
Court: United States Bankruptcy Court
Middle District of Florida
Case No.: 23-04742
Debtor's Counsel: Richard R. Thames, Esq.
THAMES | MARKEY
50 North Laura Street
Suite 1600
Jacksonville, FL 32202
Tel: 904-358-4000
Email: rrt@thamesmarkey.law
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Robert Burnette as president and chief
manager.
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/MUD2VXA/Persimmon_Hollow_Brewing_Company__flmbke-23-04742__0001.0.pdf?mcid=tGE4TAMA
PHUNWARE INC: Winds Down Lyte Technology's Operations
-----------------------------------------------------
Phunware, Inc. announced the wind-down of operations of its PC
manufacturing assembly business, Lyte Technology, commencing
immediately, as part of its recent corporate announcement.
As previously communicated, the decision to wind down the
operations of Lyte now follows an extensive and comprehensive
assessment of various strategic alternatives available and may be
followed by the disposition of remaining Lyte assets via a sale or
otherwise.
"The choice to wind down Lyte operations follows an assessment of
that business in the context of Phunware's future direction," said
CEO Mike Snavely. "This transition is both a good financial
decision in that it eliminates inventory carrying costs and
operational staff expenses, reducing our cash burn by about $2MM
annually. It's also a demonstration that we're fully invested in
our enterprise software business, which has been the cornerstone of
the company's operational success. As I've previously indicated,
our senior leadership team remains keen on elevating Phunware's
corporate profile by ensuring our resources are primarily utilized
toward driving the ubiquitous adoption of Phunware technologies,
both via direct and channel sales and via other strategies to
monetize our IP." Snavely concluded, "We thank Caleb Borgstrom and
the Lyte Technologies team for their work over the past couple of
years."
About Phunware
Headquartered in Austin, Texas, Phunware, Inc. --
http://www.phunware.com-- offers a fully integrated software
platform that equips companies with the products, solutions and
services necessary to engage, manage and monetize their mobile
application portfolios globally at scale.
Phunware reported a net loss of $50.89 million for the year ended
Dec. 31, 2022, compared to a net loss of $53.52 million for the
year ended Dec. 31, 2021. As of March 31, 2023, the Company had
$45.46 million in total assets, $23.55 million in total
liabilities, and $21.90 million in total stockholders' equity.
Houston, Texas-based Marcum LLP, Phunware Inc.'s auditor since
2018, issued a "going concern" qualification in its report dated
March 31, 2023, citing that the Company has a significant working
capital deficiency, has incurred significant losses and needs to
raise additional funds to meet its obligations and sustain its
operations. These conditions raise substantial doubt about the
Company's ability to continue as a going concern.
PLUG POWER INC: Issues Going-Concern Warning
--------------------------------------------
David R. Baker and Michelle Ma of Bloomberg News report that Plug
Power Inc., which makes machines that produce hydrogen and use it
as a fuel, said a dearth of cash on hand raises "substantial doubt
about the company's ability to continue as a going concern."
Plug' shares fell more than 16% in late trading Thursday after the
warning. The company, which has pushed heavily into production of
the clean-burning gas, said in a filing that it's projecting its
"existing cash and available for sale and equity securities will
not be sufficient to fund its operations" through the next 12
months.
About Plug Power Inc.
Plug Power Inc. is into hydrogen and fuel cell solutions and
develops commercially-viable hydrogen and fuel cell product
solutions.
POLARIS OPERATING: Wins Cash Collateral Access on Final Basis
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Texas,
Houston Division, authorized Polaris Operating, LLC and affiliates
to use cash collateral on a final basis in accordance with the
budget.
The Debtors have an immediate and critical need to use the cash
collateral to continue the Debtors' ordinary course business
operations and to maintain the value of the bankruptcy estates.
Pursuant to the Loan Agreement, dated September 2, 2020, as
amended, by and between CCCB Energy Partners, LLC, as borrower,
Vista Bank, as lender, and the other guarantors from time to time a
party thereto, the Prepetition Lender agreed to lend CCCB up to $29
million pursuant to the Main Street Lending Program. As part of the
Main Street Lending Program, Vista Bank's funding was contingent on
its receipt of a Commitment Letter from the Federal Reserve Bank of
Boston in which the Federal Reserve would purchase a participation
interest in the principal amount of Vista Bank's loan in an amount
equal to 95%. CCCB's obligations are guaranteed by each of CCCB's
direct and indirect subsidiaries that are Debtors in addition to
Michael L. Chiste and Christopher T. Czuppon. The Loan Agreement
provides for a senior secured loan secured by a blanket all-asset
lien.
As of the Petition Date, CCCB and the Guarantors were indebted and
liable to the Prepetition Lender in the amount of not less than
$30.2 million.
As adequate protection, the Secured Lenders are granted valid,
automatically perfected and enforceable additional adequate
protection replacement liens in accordance with the priority of the
applicable Secured Lenders' prepetition security interests and
liens and subject to the Carve-Out and only in collateral of the
same type as such Secured Lender has a valid prepetition lien.
To the extent of any Diminution in Value, each Secured Lender, is
granted valid, automatically perfected and enforceable additional
adequate protection replacement liens, in accordance with the
priority of the applicable Secured Lender's prepetition security
interests and liens and subject to the Carve-Out and only in
collateral of the same type as such Secured Lender has a valid
prepetition lien.
Subject to the Carve-Out, and to the extent of any Diminution in
Value, the Secured Lenders are further granted an allowed
superpriority administrative expense claim as provided and to the
full extent allowed by 11 U.S.C. Sections 503(b) and 507(b), with
priority over all administrative expense claims and unsecured
claims against the Debtor and its estate, now existing or hereafter
arising, of any kind or nature whatsoever.
A copy of the court's order and the Debtor's budget is available at
https://urlcurt.com/u?l=5kVcRC from PacerMonitor.com.
The Debtor projects total expenses, on a weekly basis, as follows:
$429,972 for the week ending November 17, 2023;
$429,972 for the week ending November 24, 2023; and
$429,972 for the week ending December 1, 2023.
About Polaris Operating, LLC
Polaris Operating, LLC and affiliates are privately held
independent oil and gas companies focused on acquiring, optimizing
and developing conventional oil and gas properties with
re-development and new development opportunities. The Debtors' core
area of operations is in the Texas Panhandle, specifically in
Moore, Potter and Roberts counties, where they own and operate
hundreds of shallow oil and gas wells with a significant amount
infrastructure including gathering systems, power lines, disposal
wells, workover rigs and water trucks.
The Debtors sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 23-32810) on July
28, 2023. In the petition signed by Christopher Czuppon, chief
executive officer, the Debtor disclosed up to $50 million in both
assets and liabilities.
Judge Christopher M. Lopez oversees the case.
OKIN ADAMS BARTLETT CURRY LLP represents the Debtor as counsel.
DONLIN, RECANO & COMPANY, INC. is the notice, claims and balloting
agent.
PORTER'S PENINSULA: Unsecureds Will Get 26% in Subchapter V Plan
----------------------------------------------------------------
Porter's Peninsula Logging, LLC, filed with the U.S. Bankruptcy
Court for the Eastern District of Michigan an Amended Chapter 11
Plan of Reorganization under Subchapter V dated October 31, 2023.
Debtor commenced this limited liability company on November 3,
2016. Todd Porter formed this LLC and has continued to operate
under that LLC to date. The Debtor's primary business is cutting
lumber and selling lumber and related wood products to companies
such as Weyerhaeuser, Georgia Pacific and various other companies.
The Debtor continued to operate successfully through early 2023. In
July of 2021, the LLC purchased a new XT430-5 Feller Buncher
("Harvester") from Komatsu Financial Limited Partnership. This,
combined with a downturn in business, led to a loan with B2B
Financing which is an internet financer that deducted payments on a
daily basis of approximately $400.00 per day, for a monthly payment
in excess of $12,000.00, per month.
All of these events led to a cash flow issue which resulted in the
Debtor not being able to generate significant funds for payments to
Komatsu and Komatsu was preparing to repossess the Harvester. The
Harvester is the heart of the Debtor's business and without that
piece of equipment, he is unable to operate the business. As a
result, Debtor filed for protection under Chapter 11 of the
Bankruptcy Code on or about May 19, 2023.
Holders of Class 6 General Unsecured Claims will receive Pro Rata
distributions, which the Debtor has valued as approximately $.26
cents on the dollar. Holders of Interests shall retain their
Interests in the Debtor. The Plan Term is five years commencing on
the Effective Date.
Any net proceeds which are recovered from litigation against Roland
Machinery Company, will also be utilized to pay Class 2 and Class 6
creditors. The Debtor will satisfy Allowed Claims under the Plan
with Cash derived from ongoing business operations, and Cash
derived from its Projected Disposable Income during the term of the
Plan.
Class 6 consists of Holders of General Unsecured Claims. Commencing
on the end of the first quarter following the Effective Date and
concluding no later than the fifth-year anniversary of the
Effective Date, the Debtor shall distribute Cash to each Holder of
a pro rata portion of $1,000.00 per quarter for the first 12
quarters and a pro rata portion in the amount of $2,000.00 per
quarter for the following 8 quarters of the Plan. These creditors
will receive approximately 26% of their claims. Payments will
commence at the end of the first quarter following the Effective
Date of the Plan.
After Class 2 creditors are paid in full, to the extent there is
any recovery in the litigation against Roland Machinery Company,
which cause of action is preserved herein, the remaining net
proceeds of that recovery will be paid to Class 6 creditors until
they are paid in full. This Class is impaired.
If Class 6 votes to reject the Plan, Holders of Class 6 Allowed
General Unsecured Claims shall receive the treatment set forth
above and shall additionally be entitled to exercise the remedies
set forth in Article VIII.HH. The Debtor submits that such
treatment satisfies the requirements of section 1191(b).
On the Effective Date, each Holder shall retain their Interests in
the Debtor in the same proportions that existed on the Petition
Date.
The Debtor shall use Cash on hand, working capital, and Cash from
ongoing business operations to fund distributions to certain
Holders of Allowed Claims, consistent with the terms of the Plan.
Pursuant to section 1190(2) of the Bankruptcy Code, the Plan
provides for the submission of all or such portion of the future
earnings of the Debtor as is necessary for the execution of the
Plan.
A full-text copy of the Amended Subchapter V Plan dated October 31,
2023 is available at https://urlcurt.com/u?l=V45fSc from
PacerMonitor.com at no charge.
Counsel to the Debtor:
Rozanne M. Giunta, Esq.
Warner Norcross + Judd, LLP
715 E. Main Street, Suite 110
Midland, MI 48640-5382
Tel: 989-698-3759
Fax: 989-486-6159
Email: giunta@wnj.com
About Porter's Peninsula Logging
Porter's Peninsula Logging, LLC, is a logging company in Atlanta,
Mich.
Porter's Peninsula Logging sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. E.D. Mich. Case No. 23-20563) on
May 19, 2023, with up to $500,000 in assets and up to $10 million
in liabilities. Todd M. Porter, sole member, signed the petition.
Judge Daniel S. Oppermanbaycity oversees the case.
Rozanne M. Giunta, Esq., at Warner Norcross + Judd, LLP, is the
Debtor's legal counsel.
PROTERRA INC: Volvo Group Buys Battery Business for $210 Million
----------------------------------------------------------------
Volvo Group has been selected as the winning bidder in an auction
for the business and assets of the Proterra Powered business unit
at a purchase price of $210 million, according to a statement.
Proterra Inc. and Proterra Operating Company Inc. are in a
voluntary Chapter 11 bankruptcy process in the US.
The transaction between Proterra Inc. and Proterra Operating
Company as sellers and Volvo is subject to approval by the
bankruptcy court in the US.
In addition, closing of the transaction, which is expected early
2024, will be subject to merger clearance and certain other
conditions.
The assets to be acquired include a development center for battery
modules and packs in California and an assembly factory in South
Carolina. With this acquisition, Volvo Group will complement the
current, and accelerate its future, battery-electric road map.
The transaction has no material impact on the Volvo Group financial
performance.
About Proterra Inc.
Proterra Inc.' business involves designing, manufacturing, and
selling electric transit buses and components, batteries, and
electric drive trains, and providing and selling related products
and services.
Proterra Inc. and Proterra Operating Company, Inc., sought relief
under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead
Case No. 23-11120) on August 7, 2023. In the petition filed by
Gareth T. Joyce, as chief executive officer, the Debtor reported
total assets as of June 30, 2023 amounting to $818,773,679 and
total debt as of June 30, 2023 of $609,498,207.
The Honorable Bankruptcy Judge Brendan Linehan Shannon handles the
case.
The Debtors tapped YOUNG CONAWAY STARGATT & TAYLOR, LLP, and PAUL,
WEISS, RIFKIND, WHARTON & GARRISON LLP, as counsel; FTI CONSULTING,
INC., as financial advisor; and MOELIS & COMPANY, LLC, as
investment banker. KURTZMAN CARSON CONSULTANTS LLC as claims agent.
QST INGREDIENTS: Unsecureds to Get 0.61 Cents on Dollar in Plan
---------------------------------------------------------------
QST Ingredients and Packaging Inc. submitted an Amended Plan of
Reorganization for Small Business dated October 31, 2023.
The Plan Proponent's financial projections show that the Debtor
will have projected disposable income of $2,974,811, over the next
five years.
The Debtor anticipates making its first quarterly plan payment on
or about February 15, 2024, assuming the Plan is confirmed and goes
effective by January 10, 2024. Thereafter, the Debtor will make
payments quarterly, with such regular payments commencing on April
15, 2024, and being made on January 15, April 15, June 15, and
September 15 of each respective year.
The final Plan payment is expected to be paid in September of 2028,
assuming the Plan is confirmed and goes effective in January of
2024. The Debtor's projections are pro forma projections and are
premised on what it submits are reasonable assumptions arrived at
by reference to historic data concerning the Debtor's operations.
This Plan proposes to pay creditors of QST from cash flow from
operations and future income of the Debtor.
Non-priority general unsecured creditors in Class 4 holding allowed
claims will receive distributions, which the proponent of this Plan
has valued at approximately 0.606 cents on the dollar, with
interest to the Effective Date. This Plan also provides for the
payment of administrative and priority claims.
Class 4 consists of General Unsecured Claims. After payment of all
unclassified claims and after the quarterly payments required to
Class 1, Class 2, and Class 3 claims, each holder of an Allowed
Class 4 unsecured claim shall participate pro rata with each other
holder of an Allowed unsecured claim and shall receive, its pro
rata share of projected quarterly disposable income of the Debtor.
Class 4 is impaired and is entitled to vote to accept or reject the
Plan.
The Plan will be funded through cash flow generated by the future
operations of the Debtor, and, with respect to the Class 5 Claim
only, and only to the extent necessary, through future financing or
a sale of assets and operations.
A full-text copy of the Amended Plan dated October 30, 2023 is
available at https://urlcurt.com/u?l=WnPbhP from PacerMonitor.com
at no charge.
Debtor's Counsel:
Ryan A. Andersen, Esq.
Valerie Y. Zaidenberg, Esq.
Andersen Law Firm, Ltd.
3199 E Warm Springs Road, Suite 400
Las Vegas, NV 89120
Tel: (702) 522-1992
Fax: (702) 825-2824
Email: ryan@vegaslawfirm.legal
valerie@vegaslawfirm.legal
About QST Ingredients and Packaging
QST Ingredients and Packaging, Inc., owns and operates a smoke
flavoring manufacturing business in Cookeville, Tenn.
QST Ingredients and Packaging sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. D. Nev. Case No. 22-13383) on
Sept. 21, 2022. In the petition signed by its chief executive
officer, Marc Rinehart, Sr., the Debtor disclosed as much as $10
million in both assets and liabilities.
Judge Mike K. Nakagawa oversees the case.
Ryan Andersen, Esq., at Andersen Law Firm, Ltd. and Butler Snow,
LLP serve as the Debtor's bankruptcy counsel and special counsel,
respectively.
QUALITY IRON: Case Summary & Largest Unsecured Creditors
--------------------------------------------------------
Four affiliates that concurrently filed voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code:
Debtor Case No.
------ --------
Quality Iron Fabricators, LLC 23-25578
1255 Harbor Avenue
Memphis, TN 38113
Quality Iron of Louisiana, LLC 23-25581
1255 Harbor Avenue
Memphis, TN 38113
CoBuilt, LLC 23-25583
1255 Harbor Avenue
Memphis, TN 38113
Luna Properties, LLC 23-25584
1255 Harbor Avneue
Memphis, TN 38113
Business Description: The Debtors operate as steel products
manufacturers.
Chapter 11 Petition Date: November 10, 2023
Court: United States Bankruptcy Court
Western District of Tennessee
Judge: Hon. M. Ruthie Hagan (23-25578 and 23-25583)
Hon. Denise E Barnett (23-25581 and 23-25584)
Debtors' Counsel: James E. Bailey III, Esq.
BUTLER SNOW LLP
6075 Poplar Avenue
Suite 500
Memphis, TN 38119
Tel: 901-680-7200
Fax: 901-680-7201
Email: jeb.bailey@butlersnow.com
Quality Iron Fabricators'
Estimated Assets: $0 to $50,000
Quality Iron Fabricators'
Estimated Liabilities: $10 million to $50 million
Quality Iron of Louisiana's
Estimated Assets: $0 to $50,000
Quality Iron of Louisiana's
Estimated Liabilities: $10 million to $50 million
CoBuilt, LLC's
Estimated Assets: $1 million to $10 million
CoBuilt, LLC's
Estimated Liabilities: $10 million to $50 million
Luna Properties'
Estimated Assets: $1 million to $10 million
Luna Properties'
Estimated Liabilities: $10 million to $50 million
The petitions were signed by Gary M. Murphey as chief restructuring
officer.
Full-text copies of the petitions containing, among other items,
lists of the Debtors' largest unsecured creditors are available for
free at PacerMonitor.com at:
https://www.pacermonitor.com/view/SFVQRNY/Quality_Iron_Fabricators_LLC__tnwbke-23-25578__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/SINOKDI/Quality_Iron_of_Louisiana_LLC__tnwbke-23-25581__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/TGZ5GZY/CoBuilt_LLC__tnwbke-23-25583__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/TICVLQY/Luna_Properties_LLC__tnwbke-23-25584__0001.0.pdf?mcid=tGE4TAMA
RISE DEVELOPMENT: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Rise Development Partners, LLC
444 Coney Island Avenue
Brooklyn, NY 11218
Business Description: The Debtor is a full service construction
company, offering a wide range of services,
specializing in real estate development and
commercial and residential renovations.
Chapter 11 Petition Date: November 10, 2023
Court: United States Bankruptcy Court
Eastern District of New York
Case No.: 23-44119
Debtor's Counsel: Adam P. Wofse, Esq.
LAMONICA HERBST & MANISCALCO, LLP
3305 Jerusalem Avenue, Suite 201
Wantagh, NY 11793
Tel: 516-826-6500
Email: awofse@lhmlawfirm.com
Total Assets: $1,709,308
Total Liabilities: $6,302,176
The petition was signed by Lawrence Rafalovich 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/GGP332I/Rise_Development_Partners_LLC__nyebke-23-44119__0001.0.pdf?mcid=tGE4TAMA
ROCKPORT COMPANY: Court OKs Cash Collateral Access Thru Nov 14
--------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized
RP Co. Liquidating, LLC et al., affiliates of Rockport Company,
LLC, to use cash collateral on an interim basis in accordance with
the budget, through November 14, 2023.
Prior to the commencement of the cases, CB Footwear Services, LLC
issued promissory notes dated as of May 4, 2021 in the principal
amounts of (a) $16.389 million; and (b) $3.610 million pursuant to
the terms and conditions thereof. Charlesbank Equity Fund IX,
Limited Partnership serves as note agent under the Prepetition
Footwear Notes.
As of June 14, 2023, CB Footwear was indebted to the Prepetition
Footwear Notes Secured Parties under the Prepetition Footwear Notes
in an aggregate outstanding principal amount of not less than $20
million.
Prior to the commencement of the cases, Rockport U.S., as issuer,
CB Marathon Midco, LLC, Rockport IP Holdings, LLC, Rockport UK
Holdings Ltd., and non-debtor Rockport International Limited, each
as guarantors, Charlesbank Equity Fund IX, Limited Partnership in
its capacity as note agent, and Charlesbank Equity Fund IX, Limited
Partnership, Charlesbank Executives Fund IX, Limited Partnership,
Charlesbank Associates Fund IX, Limited Partnership, and CB
Footwear, each as purchasers, entered into the Fourth Amended and
Restated Subordinated Promissory Note dated as of April 15, 2022
issued by Rockport U.S.
As of the Petition Date, the Subordinated Note Obligors were
indebted to the Subordinated Secured Parties under the Subordinated
Debt Documents in an aggregate outstanding principal amount of not
less than $35.6 million plus interest.
To the extent entitled under applicable law, as adequate protection
for the Debtors' use of the Prepetition Collateral, the imposition
of the automatic stay and the subordination to the Carve Out
Expenses: (i) the Prepetition Footwear Note Agent is granted valid,
binding, enforceable, and perfected adequate protection liens upon
and security interests in all Collateral, including, without
limitation, all proceeds of Avoidance Actions and commercial tort
claims; and (ii) the Subordinated Note Agent is granted valid,
binding, enforceable, and perfected adequate protection liens upon
and security interests in all Collateral, including, without
limitation, all proceeds of Avoidance Actions and commercial tort
claims.
As adequate protection for the diminution in value of their
interests in the Prepetition Collateral, the Prepetition Footwear
Note Agent, is granted an allowed superpriority administrative
expense claim in each of the Chapter 11 Cases and any successor
cases.
The Debtors' right to use cash collateral will terminate on the
earlier to occur of the following: (x) 11:59 p.m., New York City
time, at the expiration of the Second Interim Period, unless (i) a
further interim order or final order granting the relief requested
in the Motion is entered by the Court extending the Debtors' right
to use cash collateral or (ii) the Debtors and the Remaining
Secured Parties agree in writing to extend the Debtors' right to
use cash collateral; (y) the date upon which the Court issues an
order following notice and a hearing providing for the termination
of the further use of cash collateral due to the failure by the
Debtors to comply with the material terms, covenants, or conditions
of the Second Interim Order or otherwise; and (z) the date upon
which the Committee files (1) a Standing Motion, (2) an Objection
to the Footwear Note Obligations or the Prepetition Subordinated
Obligations or the Remaining Secured Parties' prepetition liens or
security interests, (3) an objection to any claim filed by Reef
Lifestyle, LLC or any of its subsidiaries, or (4) any causes of
action against Reef Lifestyle, LLC or any of its subsidiaries.
A final hearing on the matter is set for November 14 at 11:30 a.m.
A copy of the order is available at https://urlcurt.com/u?l=QfGOOb
from PacerMonitor.com.
About Rockport Co. LLC
The Rockport Company, LLC -- https://www.rockport.com/ -- offers a
collection of men's and women's brands that provide comfortable
shoes for every occasion. The company and its subsidiaries are
global designers, distributors and retailers of comfort footwear in
more than 50 markets worldwide.
Rockport Company and its affiliates first sought Chapter 11
bankruptcy protection (Bankr. D. Del. Lead Case No. 18-11145) on
May 14, 2018. The business was taken out of bankruptcy after the
court approved the sale of substantially all of Rockport Company's
assets to an affiliate of Charlesbank Equity Fund IX, LP.
Rockport Company and its affiliates again sought relief under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case
No. 23-10774) on June 15, 2023. In the petition filed by its chief
restructuring officer, Joseph Marchese, Rockport Company reported
$50 million to $100 million in both assets and liabilities.
In the new Chapter 11 cases, the Debtors tapped Potter Anderson &
Corroon, LLP as legal counsel; Miller Buckfire & Co., LLC as
financial advisor and investment banker; and PKF Clear Thinking as
personnel provider. Epiq Corporate Restructuring, LLC is the claims
and noticing agent and administrative advisor.
The U.S. Trustee for Region 3 appointed an official committee to
represent unsecured creditors in the Debtors' Chapter 11 cases. The
committee is represented by Cole Schotz, P.C.
ROOF HEROES: Court OKs Interim Cash Collateral Access
-----------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida, Fort
Myers, authorized Roof Heroes LLC to use cash collateral on an
interim basis in accordance with the budget.
The Debtor requires the use of cash collateral to to fund their
post-petition operations in the ordinary course of business.
The Debtor's Lenders are:
Cucumber Capital LLC = $224,850
Everest Business Funding = $100,000
Velocity Capital Group = $84,000
As adequate protection for the use of cash collateral, the Lenders
are granted a replacement lien on the all post-petition property of
the Debtor that is of the same nature and type as Lenders'
pre-petition collateral.
A continued hearing on the matter is set for November 15, 2023 at
10:30 a.m.
A copy of the order is available at https://urlcurt.com/u?l=fmFAH4
from PacerMonitor.com.
About Roof Heroes
Roof Heroes, LLC filed a petition under Chapter 11, Subchapter V of
the Bankruptcy Code (Bankr. M.D. Fla. Case No. 23-01235) on Oct.
14, 2023, with up to $50,000 in assets and $100,001 to $500,000 in
liabilities.
Judge Caryl E. Delano oversees the case.
Joel M. Aresty, Esq., at Joel M. Aresty, P.A. represents the Debtor
as legal counsel.
RYZE RENEWABLES: Unsecured Creditors to Get 0% in Sale Plan
-----------------------------------------------------------
Ryze Renewables II, LLC and Ryze Renewables Las Vegas, LLC filed
with the U.S. Bankruptcy Court for the District of Delaware a
Combined Disclosure Statement and Joint Chapter 11 Plan dated
November 2, 2023.
The Debtors were formed in 2017 in connection with the planned
repurposing of an existing biofuels refinery (the "Refinery")
located in Las Vegas, Nevada.
To construct the Refinery, on January 23, 2018, Ryze Las Vegas
entered into the EPC Contract with MMC, pursuant to which MMC
agreed to provide engineering, design, draft, modeling,
procurement, construction, and technical support services with
respect to the Refinery in exchange for a fixed price of
approximately $151 million.
Approximately seven months after construction of the Refinery
commenced, the Debtors became aware of various engineering,
mechanical, pollution, and safety issues, among others, at another
refinery that used the Duke technology. The Refinery's pivot to an
alternative technology source resulted in substantial delays and
increased costs that vastly exceeded the Debtors' available
financing, and was a contributing factor in the Debtors' decision
to commence the Chapter 11 Cases.
As set forth in the First Day Declaration, the Debtors' paramount
goal in the Chapter 11 Cases was to maximize the value of the
Estates for the benefit of the Debtors' creditor constituencies and
other stakeholders through the sale (the "Sale") of substantially
all of their Assets, including the Refinery. On March 21, 2023, the
Debtors filed a motion (the "Bidding Procedures Motion") seeking
authority to proceed with a bidding and auction process to
consummate a sale or series of sales (the "Sale Process") to
generate maximum value for their Assets.
The Auction proceeded in multiple rounds of bidding, and, at the
conclusion of the Auction, the Debtors, in consultation with the
Prepetition Lender and DIP Agent, identified (i) the final bid
submitted by Edgewood, with a cash purchase price of $36,500,100
for substantially all of the Debtors' Assets as the successful bid,
and (ii) the final bid submitted by a consortium consisting of
Savage, Annevow, and Triten, with a combined cash purchase price of
$34,250,000 for substantially all of the Assets, as the
next-highest bid.
The Bankruptcy Court held a hearing and approved the Sale
Transaction on June 20, 2023, and entered the Sale Order on June
22, 2023 approving the Sale Transaction Documents and the sale to
Edgewood. The Sale Transaction closed on July 7, 2023 and, in
connection with the closing, all amounts owed by the Debtors to the
DIP Lenders in respect of the DIP Facility were satisfied in cash
in full from the proceeds of the Sale Transaction.
Since the closing of the Sale Transaction, the Debtors have focused
on efficiently winding down their businesses, preserving Cash held
in the Estates, analyzing Claims and Causes of Action, and
monetizing their remaining Assets. The remaining Assets currently
consist of, among other things, Cash, certain deposits,
prepayments, credits and refunds, insurance policies or rights to
proceeds thereof, accounts receivables, and Causes of Action.
This Combined Plan and Disclosure Statement provides for the Wind
Down Assets, to the extent not already liquidated, to be liquidated
over time and the proceeds thereof to be distributed to Holders of
Allowed Claims in accordance with the terms of the Plan and the
treatment of Allowed Claims described more fully herein. The Plan
Administrator will effect such liquidation and distributions.
Class 5 consists of General Unsecured Claims. On the effective
date, all General Unsecured Claims shall be cancelled, released,
and extinguished without distribution, and will be of no further
force or effect. The allowed unsecured claims total $7,928,616.
This Class will receive a distribution of 0% of their allowed
claims. This Class is impaired.
All consideration necessary to make all monetary payments in
accordance with the Plan shall be obtained from the remaining Cash
and cash equivalents of the Debtors and their Estates, or their
subsidiaries, including the remaining Cash proceeds from the Sale
Transaction, and the proceeds of Wind Down Assets to be monetized
by the Plan Administrator as part of the Wind Down.
A full-text copy of the Combined Disclosure Statement and Plan
dated November 2, 2023 is available at
https://urlcurt.com/u?l=NyWKut from PacerMonitor.com at no charge.
Counsel to Debtors:
Kelley A. Cornish, Esq.
Diane Meyers, Esq.
Kyle R. Satterfield, Esq.
Paul Weiss Rifkind Wharton & Garrison, LLP
1285 Avenue of the Americas
New York, NY 10019
Tel: +1-212-373-3493
Fax: +1-212-492-0493
Email: kcornish@paulweiss.com
Pauline K. Morgan, Esq.
Edmon L. Morton, Esq.
Matthew B. Lunn, Esq.
Elizabeth S. Justison, Esq.
Timothy R. Powell, Esq.
Young Conaway Stargatt& Taylor, LLP
Rodney Square
1000 N. King Street
Wilmington, DE 19801
Tel: (302) 571-6600
Emails: pmorgan@ycst.com
emorton@ycst.com
mlunn@ycst.com
ejustison@ycst.com
tpowell@ycst.com
About Ryze Renewables
Ryze Renewables II, LLC and Ryze Renewables Las Vegas, LLC were
formed in 2017 in connection with the planned repurposing of an
existing biofuels refinery located in Las Vegas, Nevada that, once
complete, will have the capacity to produce 7,500 barrels of
renewable diesel per day by converting non-edible renewable and
waste feedstocks to premium low-carbon fuels.
Debtors sought protection under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. D. Del. Lead Case No. 23-10289) on March 9, 2023. In
the petition signed by Klaus Gerber as chief restructuring officer,
the Debtor disclosed up to $100 million to $500 million in both
assets and liabilities.
Judge Mary F. Walrath oversees the case.
The Debtors tapped Young Conaway Stargatt & Taylor, LLP as legal
counsel; Paul, Weiss, Rifkind, Wharton, & Garrison LLP as
restructuring counsel, Stinson LLP as special construction counsel,
Alvarez & Marsal North America, LLC as CRO provider, Guggenheim
Partners, LLC as investment banker, and Stretto as notice, claims &
balloting agent and administrative advisor.
SADIE ROSE: Seeks Cash Collateral Access
----------------------------------------
Sadie Rose Baking Co. asks the U.S. Bankruptcy Court for the
Southern District of California for authority to use cash
collateral and provide adequate protection.
The Debtor requires the use of cash collateral to pay operating
expenses consistent with the Cash Budget, with a 15% variance.
Neighborhood National Bank and Colors Enterprises, Inc. hold liens
against Sadie Rose's cash collateral. While the U.S. Small Business
Administration, has filed a UCC statement with the California
Secretary of State asserting a lien against Sadie Rose's property,
Sadie Rose estimates on the Petition Date the SBA was wholly
unsecured.
Colors is owed: (1) approximately $252,103 on its Equipment Loan
and (2) approximately $87,795 on its Inventory Loan. Sadie Rose
also owes Colors 5% of gross revenue received from Colors'
customers, including $8,754 based on the $175,087 in receivables
owed from Colors' customers on the Petition Date. In total, Colors
was owed $339,898 on the Petition Date.
NNB is owed: (1) approximately $1.2 million on its Equipment Loan
and (2) approximately $108,332 on its Oven Loan. Sadie Rose is also
a co-borrower on the Temple Heights Loan with Sadie Rose's
landlord—the insider entity Temple Heights Properties, LLC.
Temple Heights is a debtor-in-possession in the United States
Bankruptcy Court for the Southern District of California Case No.
23-03479-11, filed concurrently with this case. On the Petition
Date, NNB was owed approximately $4.974 million on the Temple
Heights Loan. Sadie Rose has conservatively valued the Temple
Heights Property at $6.325 million. After costs of sale and the
payment of property taxes, Sadie Rose estimates there is currently
$752,081 in equity in the Temple Heights Property.
The SBA is owed approximately $534,681 on an Economic Injury
Disaster Loan secured by an interest in all of Sadie Rose's
tangible and intangible personal property. As of the date of
filing, Sadie Rose estimates that the SBA is wholly unsecured, as
the value of Sadie Rose's assets likely exceeds no more than $2.3
million. Because the SBA EIDL is wholly unsecured, it is not
entitled to adequate protection.
No adequate protection has been negotiated; however, Sadie Rose is
hopeful a stipulation can be reached during the interim period.
In the meantime, to the extent that Sadie Rose's use of cash
collateral results in a decrease in the value of the Secured
Creditors' interests in Sadie Rose's assets, Sadie Rose proposes
providing Colors and NNB full-replacement liens against Sadie
Rose's personal property acquired post-petition to the same extent,
validity, and priority as the Secured Creditor's held on the
Petition Date.
In addition, Sadie Rose proposes making the following adequate
protection payments:
a. Payments on the Colors Brand Loan as they come due;
b. Interest-only payments of $1,042 on the Colors Equipment Loan,
calculated at a 5% interest per annum on the principal balance of
$250,000;
c. Interest-only payments on Colors' Inventory Loan in the amount
of $732, calculated at the default of rate of 10% per annum on the
principal balance of $87,795;
d. Interest-only payments of $9,861 on NNB's Equipment Loan; and
e. Interest-only payments of $950 on NNB's Oven Loan.
A copy of the motion is available at https://urlcurt.com/u?l=2VsSuQ
from PacerMonitor.com.
About Sadie Rose Baking Co.
Sadie Rose Baking Co. makes handmade artisan and specialty bread,
rolls, sandwich buns and flatbreads.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Cal. Case No. 23-03478) on November 3,
2023. In the petition signed by Jennifer Curran, CEO, the Debtor
disclosed $2,212,893 in assets and $9,700,278 in liabilities.
Meredith King, Esq., at Franklin Soto Leeds LLP, represents the
Debtor as legal counsel.
SENIOR CARE: Bid to Use Cash Collateral Denied as Moot
------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida, Tampa
Division, denied as moot the motion to use cash collateral filed by
Senior Care Living VII, LLLC for the reasons stated orally and
recorded in open Court.
A copy of the order is available at https://urlcurt.com/u?l=jLe92h
from PacerMonitor.com.
About Senior Care Living VII
Senior Care Living VII, LLC sought Chapter 11 bankruptcy protection
(Bankr. M.D. Fla. Lead Case No. 22-00103) on Jan. 10, 2022, listing
up to $50 million in both assets and liabilities.
Judge Caryl E. Delano oversees the case.
Michael C. Markham, Esq., at Johnson Pope Bokor Ruppel & Burns,
LLP, is the Debtor's legal counsel while SC&H Group, Inc. serves as
the Debtor's financial advisor.
SINCLAIR BROADCAST: Reports Third Quarter 2023 Financial Results
----------------------------------------------------------------
Sinclair Broadcast Group, Inc. has released its financial results
for the three and nine months ended September 30, 2023.
Three Months Ended September 30, 2023 Consolidated Financial
Results:
* Total revenues decreased 9% to $767 million versus $843
million in the prior year period. Media revenues also decreased 9%
to $758 million versus $836 million in the prior year period.
* Total advertising revenues of $304 million decreased 19%
versus $374 million in the prior year period. Core advertising
revenues, which exclude political revenues, were up 2% in the third
quarter to $293 million versus $286 million in the prior year
period.
* Distribution revenues of $414 million decreased versus $425
million in the prior year period.
* Operating income of $37 million, including non-recurring
transaction and transition services, implementation, COVID, legal,
litigation and regulatory costs ("Adjustments") of $25 million and
an adjustment for the loss on deconsolidation of $10 million
("Deconsolidation Loss"), declined versus an operating income of
$154 million in the prior year period, which included Adjustments
of $4 million. Operating income, when excluding the Adjustments and
the Deconsolidation Loss, was $72 million compared to an operating
income, excluding the Adjustments, of $158 million in the prior
year period.
* Net loss attributable to the Company was $46 million versus
net income of $21 million in the prior year period. Excluding
Adjustments and the Deconsolidation Loss, the Company had net loss
of $19 million.
* Adjusted EBITDA decreased 29% to $141 million from $198
million in the prior year period.
* Diluted loss per common share was $0.74 as compared to
diluted earnings per common share of $0.32 in the prior year
period. On a per-diluted-share basis, the impact of Adjustments and
the Deconsolidation Loss was $(0.44), and the impact of Adjustments
in the prior year period was $(0.04).
Nine Months Ended September 30, 2023 Consolidated Financial
Results:
* Total revenues decreased 22% to $2,308 million versus $2,968
million in the prior year period. Media revenues decreased 22% to
$2,285 million versus $2,942 million in the prior year period.
Excluding DSG, total revenues decreased 8% from $2,512 million in
the prior year period and media revenues decreased 8% from $2,486
million in the prior year period.
* Total advertising revenues of $922 million decreased 17%
versus $1,111 million in the prior year period. Excluding DSG,
total advertising revenues decreased 14% from $1,067 million in the
prior year period. Core advertising revenues, which excludes
political revenues, of $902 million were down 5% versus $952
million in the prior year period. Excluding DSG, core advertising
revenues decreased less than 1% from $907 million in the prior year
period.
* Distribution revenues of $1,258 million decreased versus
$1,728 million in the prior year period. Excluding DSG,
distribution revenues decreased 3% from $1,295 million in the prior
year period.
* Operating income of $55 million, including $55 million of
Adjustments and the $10 million Deconsolidation Loss, declined
versus operating income of $3,727 million in the prior year period,
which included Adjustments of $23 million and a $3,357 million gain
related to the Deconsolidation. Operating income, when excluding
the Adjustments and the Deconsolidation Loss, was $120 million
compared to operating income of $393 million in the prior year
period. Excluding DSG, operating income excluding the Adjustments
and the Deconsolidation Loss decreased 70% from $395 million in the
prior year period.
* Net income attributable to the Company was $50 million
versus net income of $2,597 million in the prior year period.
Excluding Adjustments and the Deconsolidation Loss, the Company had
net income of $101 million. Net loss from DSG in the prior year
period was $94 million.
* Adjusted EBITDA decreased 42% to $368 million from $635
million in the prior year period. Adjusted EBITDA from DSG in the
first two months of 2022 was $54 million.
* Diluted earnings per common share was $0.75 as compared to
diluted earnings per common share of $36.59 in the prior year
period. On a per-diluted-share basis, the impact of Adjustments and
the Deconsolidation Loss was $(0.78) and the impact of Adjustments
and the Deconsolidation in the prior year period was $35.91.
Content and Distribution:
* In August, the Company agreed to expand and extend its
network affiliation agreement with The CW. Under the terms of the
comprehensive multiyear agreement, Sinclair will continue carrying
The CW’s entertainment and sports programming in 35 of its owned
and/or operated markets across the country. In addition, beginning
September 1, Sinclair launched The CW on two new affiliate
stations, KOMO-TV/KUNS-TV, in Seattle, Washington, and WPNT-TV in
Pittsburgh, Pennsylvania. The agreement is a landmark deal in that
it includes the right to negotiate carriage agreements directly
with virtual multi-channel video programming distributors.
Financial terms of the agreements were not disclosed.
* In September, DIRECTV, LLC extended its distribution
agreement with the Company.
* In October, the Company reached an agreement with Comcast to
renew and extend its carriage agreements for all Sinclair
television stations, Tennis Channel, Marquee Sports Network and YES
Network.
* In October, the Company and Paramount reached comprehensive,
multi-year distribution agreements across all 21 CBS network
affiliations for Sinclair stations, including six top-50 market
affiliates, KUTV in Salt Lake City, UT, KEYE in Austin, TX, WKRC in
Cincinnati, OH, WPEC in West Palm Beach, FL, WWMT in Grand Rapids,
MI and WHP in Harrisburg, PA. Additionally, Paramount reached an
agreement to renew the affiliations of WTVH in Syracuse, NY and
WGFL in Gainesville, FL, stations to which Sinclair provides
services.
* In September, Tennis Channel and the Carvana Professional
Pickleball Association (PPA Tour) announced a commercial joint
venture to further grow pickleball in the US and worldwide. The
partnership will see the vast majority of PPA Tour matches appear
live on Tennis Channel platforms, integrated advertising-sales
efforts for media and tournaments, and the recent launch of a
24-hour pickleball channel. Tennis Channel will produce all events
for the PPA Tour.
* In October, the Company launched The Nest, a new, free
over-the-air national broadcast TV network with programming
comprised of home-improvement, true-crime, factual reality series,
and celebrity driven family shows. The Nest joins Sinclair’s
lineup of national broadcast networks, Comet, CHARGE!, and TBD. It
replaces Stadium network on broadcast stations across the country.
At launch, the network was available in more than 50% of all US
television households including the major markets of New York, Los
Angeles, Philadelphia, Dallas - Ft. Worth, Boston, San Francisco -
Oakland - San Jose and Seattle-Tacoma.
* Tennis Channel, recorded a 31% year-over-year increase in
total viewers in the third quarter of 2023.
* Year-to-date, Sinclair's newsrooms have won a total of 260
journalism awards, including a RTDNA National Edward R. Murrow
award won by Sinclair's Seattle station, KOMO-TV, for Sports
Reporting/Large Market Television category.
Consolidated Balance Sheet and Cash Flow Highlights of the
Company:
* Total Company debt as of September 30, 2023 was $4.182
billion, of which $4.166 billion is SBG debt and $16 million is
Ventures debt.
* Since the beginning of June, the Company purchased
approximately $64 million of principal across multiple tranches of
debt, $30 million in the second quarter and $34 million in the
third quarter, in the open market for $49 million, representing a
weighted average discount of 24% to par and a weighted average
yield to maturity of 13%.
* Cash and cash equivalents for the Company as of September
30, 2023 was $643 million, of which $279 million is SBG cash and
$364 million is Ventures cash.
* As of September 30, 2023, 39.6 million Class A common shares
and 23.8 million Class B common shares were outstanding, for a
total of 63.4 million common shares.
* In September, the Company paid a quarterly cash dividend of
$0.25 per share.
* Capital expenditures for the third quarter of 2023 were $30
million.
"Sinclair reported a strong third quarter with revenues exceeding
the high-end of our guidance ranges and Adjusted EBITDA exceeding
the mid-point of our guidance for the quarter by 40%," said Chris
Ripley, Sinclair's President and Chief Executive Officer. "In
addition, we have repurchased $64 million in face value of our debt
through open-market repurchases since the beginning of June at a
24% average discount to par. Our priority remains to strengthen our
balance sheet while acting opportunistically when market conditions
permit. Year-to-date, political advertising is at record levels for
a non-election year, and we expect that trend to continue in the
fourth quarter as well as the 2024 Presidential election year. And
while we continue to deal with elevated linear subscriber churn
levels, Sinclair is well-positioned for the near- and long-term
with nearly all of our Big 4 network traditional subscribers up for
renewals by the end of 2024."
About Sinclair Broadcast
Headquartered in Hunt Valley, Cockeysville, Maryland, Sinclair
Broadcast Group, Inc. operates as a television broadcasting
company.
As of September 30, 2023, the Company had $6.083 billion in total
assets against $5.499 billion in total liabilities.
Egan-Jones Ratings Company on August 29, 2023, maintained its
'CCC+' foreign currency and local currency senior unsecured ratings
on debt issued by Sinclair Broadcast Group, Inc.
SINTX TECHNOLOGIES: Enters Long-Term Supply Deal for Jet Components
-------------------------------------------------------------------
SINTX Technologies, Inc. announced that it has entered a Long-Term
Agreement (LTA) to supply jet engine components made of its silicon
nitride. The agreement materialized after a rigorous two-year
qualification of the Company's Operational and Quality Management
Systems and manufacturing capabilities, and successful testing of
prototype components.
"To meet the challenge of making aerospace parts with complex
designs, SINTX had to innovate new manufacturing capabilities and
processes," said Dave O'Brien, executive vice president and chief
operating officer at SINTX. "This entailed going beyond our
expertise in producing medical implants into manufacturing strong
and durable jet engine components under an AS9100D certified
quality management system."
"This LTA is one example of the non-medical opportunities that
SINTX is targeting, as the Company seeks to expand its capabilities
beyond biomedical implants toward producing industrial and
aerospace products. SINTX's Maryland facility, for instance, is
making prototypes for several energy and defense applications,"
added Mr. O'Brien.
There are no minimum requirements under the LTA, and annual
revenues are projected to be less than $0.25 million. The LTA
allows SINTX to fulfill all of the customer's requirements for
silicon nitride aerospace components as long as SINTX meets
specified quality, delivery, and purchase order metrics. The LTA
extends to the end of 2026 with a customer option for renewal, and
with periodic demand forecasts guiding supply plan management and
revenues.
About SINTX Technologies
Headquartered in Salt Lake City, Utah, SINTX Technologies, Inc. --
https://ir.sintx.com -- is an advanced ceramics company that
develops and commercializes materials, components, and technologies
for biomedical, technical, and antipathogenic applications. The
core strength of SINTX Technologies is the manufacturing, research,
and development of advanced ceramics for external partners.
SINTX reported net loss of $12.04 million in 2022, a net loss of
$9.31 million in 2021, a net loss of $7.03 million in 2020, and a
net loss of $4.79 million in 2019. For the six months ended June
30, 2023, the Company reported a net loss of $2.75 million. As of
Dec. 31, 2022, the Company had $15.77 million in total assets,
$10.07 million in total liabilities, and $5.70 million in total
stockholders' equity.
SINTX disclosed in a Form 8-K filed with the Securities and
Exchange Commission that on Oct. 20, 2023, the Company received a
notice from Nasdaq Listing Qualifications department of the Nasdaq
Stock Market LLC stating that the bid price of the Company's common
stock for the 30 consecutive trading days prior to Oct. 20, 2023
had closed below the minimum $1.00 per share required for continued
listing under Listing Rule 5550(a)(2).
SMILEDIRECTCLUB INC: Court OKs $80MM DIP Loan from Cluster Holdco
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Texas,
Houston Division, authorized SmileDirectClub, Inc. and affiliates
to use cash collateral and obtain postpetition financing, on a
final basis.
The Debtors obtained senior secured postpetition obligations on a
superpriority basis in respect of a senior secured superpriority
new money delayed-draw term loan facility in the aggregate
principal amount of up $80 million, comprised of:
(a) upon entry of the Interim Order, up to $30 million of DIP
Loans, consisting of (i) $20 million of Initial Draw T-1 Loans,
made immediately available to the Debtors by the Initial DIP
Lenders, and (ii) up to $10 million of Accordion Loans; and
(b) upon entry of the Final Order, up to $50 million of
additional DIP Loans, consisting of (i) $30 million of Delayed Draw
T-2 Loans, made available to the Debtors by the Initial DIP Lenders
if the Delayed-Draw Condition is met, (ii) up to $15 million of
additional Accordion Loans, and (iii) a roll-up of $5 million of
the outstanding principal balance under a Prepetition Revolving
Credit Agreement.
Cluster Holdco LLC serves as administrative agent and collateral
agent under the Superpriority Senior Secured Delayed-Draw
Debtor-in-Possession Credit Agreement.
The DIP Facility is due and payable through the earliest to occur
of:
(a) December 29, 2023;
(b) The effective date of any chapter 11 plan of
reorganization, other than a Liquidation Plan;
(c) The date upon which the consummation of a sale or other
disposition of all or substantially all of the Debtors' assets
under 11 U.S.C. section 363 has occurred;
(d) The date of acceleration or termination of the DIP
Facility; and
(e) The date of the dismissal of any of the Chapter 11 Cases
or conversion of the Chapter 11 Cases to cases under chapter 7 of
the Bankruptcy Code; provided, however, that the Scheduled Maturity
Date will be extended automatically for an additional 90 days if
the Liquidation Plan has become effective.
The Debtors are required to comply with these milestones:
(a) The entry of the Interim Order no later than five days
after the Petition Date;
(b) The entry of the Final Order no later than 25 days after
the Petition Date;
(c) Establishment of a bid deadline no later than 55 days
after the Petition Date;
(d) Testing of the Delayed-Draw Condition no later than 60
days after the Petition Date;
(e) Confirmation of the Plan no later than 85 days after the
Petition Date; and
(f) achieving the Effective Date of the Plan no later than 90
days after the Petition Date.
Prior to the Petition Date, Debtors SmileDirect Club, LLC and SDC
Financial LLC, and non-Debtor SDC U.S. SmilePay SPV, on the one
hand, and HPS Investment Partners, LLC, in its capacity as
collateral agent and administrative agent under the Loan Agreement,
dated as of April 27, 2022, and the lenders under the SDC SPV Loan
Facility.
As of the Petition Date, the Debtors had approximately $891 million
in total principal outstanding under their funded debt
obligations.
As adequate protection for the use of cash collateral, the
Prepetition Revolving Lender is granted a valid, perfected
replacement security interest in and lien on the DIP Collateral.
The Adequate Protection Liens will be in addition to all valid and
enforceable liens and security interests now existing in favor of
the Prepetition Revolving Lender and not in substitution therefor.
The Prepetition Revolving Lender is granted, subject to the DIP
Superpriority Claims and the Carve Out, an allowed administrative
expense claim in each of the Chapter 11 Cases and any Successor
Cases as provided in 11 U.S.C. section 507(b) to the extent of any
Diminution in Value of its interest in the Prepetition Collateral
with, except as set forth in the Interim Order and this Final
Order, priority in payment over all other administrative claims in
the Chapter 11 Cases, which 507(b) Claim will have recourse to and
be payable from all of the DIP Collateral in accordance with the
priorities set forth herein, including, without limitation,
Specified Causes of Action Proceeds.
A copy of the order is available at https://urlcurt.com/u?l=NSpYNM
from PacerMonitor.com.
About SmileDirectClub
SmileDirectClub, Inc. (OTC Pink: SDCCQ)
--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.
The Debtors 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 Debtor 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 Kirkland & Ellis as Bankruptcy Counsel
-----------------------------------------------------------------
SmileDirectClub, Inc. and its affiliates seek approval from the
U.S. Bankruptcy Court for the Southern District of Texas to hire
Kirkland & Ellis LLP and Kirkland & Ellis International LLP as
their attorneys.
The firms' services include:
a. advising the Debtors with respect to their powers and
duties in the continued management and operation of their
businesses and properties;
b. advising and consulting on the conduct of the Debtors'
Chapter 11 cases, including all of the legal and administrative
requirements of operating in Chapter 11;
c. attending meetings and negotiating with representatives of
creditors and other parties involved in the Debtors' Chapter 11
cases;
d. taking all necessary actions to protect and preserve the
Debtors' estates, including prosecuting actions on the Debtors'
behalf, defending any action commenced against the Debtors, and
representing the Debtors in negotiations concerning litigation in
which they are involved, including objections to claims filed
against the estates;
e. preparing pleadings;
f. representing the Debtors in connection with obtaining
authority to continue using cash collateral and post-petition
financing;
g. advising the Debtors in connection with any potential sale
of assets;
h. appearing before the bankruptcy court and any appellate
courts;
i. advising the Debtors regarding tax matters;
j. taking any necessary action on behalf of the Debtors to
negotiate, prepare, and obtain approval of a disclosure statement
and confirmation of a Chapter 11 plan and all documents related
thereto;
k. assisting the Debtors, acting at the direction of the
special committee of the Board of Directors of SmileDirectClub,
Inc., with their investigation of potential claims and causes of
action held by the Debtors against related, non-Debtor parties;
and
l. performing all other necessary legal services for the
Debtors in connection with the prosecution of these Chapter 11
cases, including (i) analyzing the Debtors' leases and contracts
and the assumption and assignment or rejection thereof; (ii)
analyzing the validity of liens against the Debtors' assets; and
(iii) advising the Debtors on corporate and litigation matters.
The firm will be paid at these rates:
Partners $1,195 to $2,245 per hour
Of Counsel $820 to $2,125 per hour
Associates $685 to $1,395 per hour
Paraprofessionals $295 to $575 per hour
In addition, the firm will receive reimbursement for out-of-pocket
expenses incurred.
The firm received from the Debtors an advanced retainer in the
amount of $250,000.
Spencer Winters, Esq., a partner of Kirkland & Ellis, disclosed in
court filings that the firms are "disinterested" pursuant to
Section 101(14) of the Bankruptcy Code.
Kirkland & Ellis also disclosed the following in accordance with
Appendix B-Guidelines for reviewing fee applications:
Question: Did Kirkland agree to any variations from, or
alternatives to, Kirkland's standard billing arrangements for this
engagement?
Response: No.
Question: Do any of the Kirkland professionals in this
engagement vary their rate based on the geographic location of the
Debtors' Chapter 11 cases?
Response: No.
Question: If Kirkland has represented the Debtors in the 12
months prepetition, disclose Kirkland's billing rates and material
financial terms for the prepetition engagement, including any
adjustments during the 12 months prepetition. If Kirkland's
billing rates and material financial terms have changed
postpetition, explain the difference and the reasons for the
difference.
Response: Kirkland's current hourly rates for services rendered
on behalf of the Debtors range as follows: Partners, $1,195 to
$2,245 per hour; Of Counsel, $820 to $2,125 per hour; Associates
$685 to $1,395 per hour; Paraprofessionals $295 to $575 per hour.
Question: Have the Debtors approved Kirkland's budget and
staffing plan, and, if so, for what budget period?
Response: Yes, pursuant to the Interim DIP Order, professionals
proposed to be retained by the Debtors are required to provide
weekly estimates of fees and expenses incurred in these chapter 11
cases.
The firms can be reached through:
Spencer A. Winters, Esq.
Kirkland & Ellis LLP
300 North LaSalle
Chicago, IL 60654
Phone: +1 312 862 3800
Email: spencer.winters@kirkland.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.
SOFT SURROUNDINGS: Unsecureds to Get Nothing in Liquidating Plan
----------------------------------------------------------------
Soft Surroundings Holdings, LLC, and its Debtor Affiliates filed
with the U.S. Bankruptcy Court for the Southern District of Texas a
Combined Disclosure Statement and Joint Plan of Liquidation dated
November 2, 2023.
Operating under the Soft Surroundings(R) brand, the Debtors are a
leading direct-to-consumer nationwide company, selling women's
apparel, accessories, beauty products, and home goods.
The Debtors and SSG introduced their existing lender, 1903P, to
Coldwater Creek, a leading American catalog and online retailer of
women's apparel, accessories, shoes and home décor in the hopes
that a partnership could be forged to save the iconic Soft
Surroundings brand. The strategy was successful and, after weeks of
arm's-length negotiations, the parties developed a value maximizing
transaction to save the Soft Surroundings brand, which transaction
forms the foundation of the Restructuring Support Agreement entered
into on September 10, 2023.
The centerpiece of the transaction is the transfer of the Debtors'
direct to consumer business to an affiliate of Coldwater Creek and
a subsequent wind-down of the Debtors' brick and mortar locations
through this Plan. This transaction has the support of the Debtors'
existing equity sponsor, Brentwood, and 100% of the Debtors'
capital structure, all of which signed the Restructuring Support
Agreement. The Restructuring Support Agreement includes important
milestones, which will allow the Debtors to consummate the going
concern sale transaction prior to the revenue-driving holiday
season.
The Plan contemplates approval of the Sale Transaction, which shall
be approved pursuant to the Confirmation Order and the Sale Order.
The Sale Transaction is governed by the Asset Purchase Agreement
and the Agency Agreement, among other things.
Pursuant to the Sale Transaction, substantially all of the Debtors
assets will be transferred to 1903P through a combination of a
credit bid of the obligations under the DIP Facility and a cash
payment to the Company. 1903P will then designate the purchased
assets into two primary baskets, a group of assets that will be
designated for purchase by Coldwater Creek that will form the basis
of the go-forward Company (primarily the Company's direct to
consumer business) and a group of assets that will be designated
for orderly wind-down by an affiliate of 1903P, Gordon Brothers
Retail Partners, LLC (primarily the Company's brick and mortar
retail stores).
The Purchase Price under the Asset Purchase Agreement is
$20,075,000 plus the assumption of the Administrative Expense Claim
Backstop Amount. The Purchase Price includes a $10 million credit
bid with the balance to be paid in cash. A substantial portion of
the cash bid included in the Asset Purchase Agreement will be
utilized to repay the DIP Facility Claims in connection with
confirmation of the Plan, with the balance available to fund the
claims that are entitled to recovery under this Plan and the
Wind-Down Budget.
Unfortunately, the Purchase Price is not sufficient to satisfy the
Debtors' prepetition secured debt, which totals approximately $69
million. As a result, the Debtors' unsecured creditors will not be
entitled to a recovery from the Sale Proceeds.
As part of the Asset Purchase Agreement, the Debtors and 1903P
agreed that certain assets would be sold by GBRP pursuant to the
Agency Agreement, which appoints GBRP as the Debtors' and 1903P's
exclusive agent for the purpose of selling all of the Debtors'
inventory located in its retail store locations and certain
supplies held at the Debtors' third-party distribution center.
Sales at each of the Debtors' stores will commence upon the closing
of the Sale Transaction, and GBRP shall complete each sale and
vacate the premises of each store on or before February 28, 2024.
Class 5 consists of General Unsecured Claims. Except to the extent
that a holder of a Class 5 claim agrees to a less favorable
treatment, each holder of an Allowed General Unsecured Claim shall
receive its Pro Rata share of GUC Trust Interests. Claims in Class
5 are Impaired. The allowed unsecured claims total $29,000,000.
This Class will receive a distribution of 0% of their allowed
claims.
On the Plan Effective Date, all Interests in the Debtors shall be
cancelled, released, extinguished, and discharged and will be of no
further force or effect. Each holder of an Interest shall receive
no recovery or distribution on account of their Interests in the
Debtors.
On and after the Effective Date, the Wind-Down Debtors shall
continue in existence solely for purposes of (a) resolving Claims,
other than General Unsecured Claims, (b) making distributions on
account of Allowed Claims, other than General Unsecured Claims, (c)
establishing and funding the Disputed Claims Reserve, and any other
similar amounts in accordance with the terms of this Plan, (d)
filing appropriate Tax returns, (e) liquidating all Excluded Assets
of the Debtors and winding down the Estates, and (f) complying with
any applicable Bankruptcy Code provisions relevant to the
post-Effective Date Debtors.
A full-text copy of the Combined Disclosure Statement and Plan
dated November 2, 2023 is available at
https://urlcurt.com/u?l=6Yt0Hi from Stretto, Inc., the claims
agent.
Proposed Co-Counsel and Conflicts Counsel for the Debtors:
Elizabeth C. Freeman, Esq.
LAW OFFICE OF LIZ FREEMAN
P.O. Box 61209 700 Smith St.
Houston, TX 77208
Tel: (832) 779-3580
Email: liz@lizfreemanlaw.com
Cindi M. Giglio, Esq.
KATTEN MUCHIN ROSENMAN LLP
575 Madison Avenue
New York, NY 10022
Telephone: (212) 940-8800 / (212) 940-8700
Facsimile: (212) 940-8776
Email: cindi.giglio@kattenlaw.com
About Soft Surroundings
Operating under the Soft Surroundings brand, Soft Surroundings
Holdings and its subsidiaries are a direct-to-consumer nationwide
company, selling women's apparel, accessories, beauty products, and
home goods. The Debtors' brand is centered around a direct to
consumer business, which includes a robust e-commerce marketplace.
Soft Surroundings Holdings, LLC, and its 3 affiliates sought
Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 23-90769) on
Sept. 10, 2023, with $0 to $50,000 in assets and $50 million to
$100 million in liabilities. Curt Kroll, chief restructuring
officer, signed the petitions.
The Debtors tapped Katten Muchin Rosenman LLP as general bankruptcy
counsel; and Law Office Of Liz Freeman as local bankruptcy
counsel.
SSG Capital Partners, LLC, is the investment banker. Stretto,
Inc., is the claims agent.
SPROUT MORTGAGE: Trustee Taps Westerman Ball as Litigation Counsel
------------------------------------------------------------------
Allan B. Mendelsohn, the Chapter 11 trustee of Sprout Mortgage,
LLC, seeks approval from the U.S. Bankruptcy Court for the Eastern
District of New York to employ Westerman Ball Ederer Miller Zucker
& Sharfstein, LLP as his special litigation counsel.
The firm will assist the trustee in investigating and prosecuting
potential estate claims and causes of action, including potential
avoidance actions as may be necessary and/or appropriate and
provide such other related legal advice to the Trustee as needed
with respect to litigation matters.
Westerman Ball will be paid at these hourly rates:
Partners and Counsel $495-$750
Associates $275-$490
Paraprofessionals $275
Westerman Ball will also be reimbursed for reasonable out-of-pocket
expenses incurred.
John Westerman, Esq., co-managing partner of Westerman Ball,
assured the Court that the firm is a "disinterested person" as the
term is defined in Section 101(14) of the Bankruptcy Code and does
not represent any interest adverse to the Debtors and their
estates.
The firm can be reached through:
John E. Westerman, Esq.
William C. Heuer, Esq.
WESTERMAN BALL EDERER
MILLER ZUCKER & SHARFSTEIN, LLP
1201 RXR Plaza
Uniondale, NY 11556
Phone: (516) 622-9200
Email: jwesterman@westermanllp.com
wheuer@westermanllp.com
About Sprout Mortgage LLC
Sprout Mortgage LLC filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.Y. Case No.
23-72433) on July 5, 2023.
Judge Robert E Grossman oversees the case.
Avrum J Rosen, Esq. at the Law Offices Of Avrum J. Rosen, PLLC
represents the Debtor as counsel.
STONERIDGE INC: S&P Alters Outlook to Stable, Affirms 'B' ICR
-------------------------------------------------------------
S&P Global Ratings revised its outlook to stable from negative and
affirmed the 'B' issuer credit rating on Stoneridge Inc.
S&P said, "The stable outlook reflects our expectation that
Stoneridge should realize improved profitability over the next
couple of years, allowing free operating cash flow (FOCF) to
improve toward breakeven and increasing availability on its
revolving credit facility.
"We revised our outlook on Stoneridge to stable following its
revolver refinancing, which alleviated near-term liquidity
pressures and modestly extends the debt maturity profile. The
company completed a refinancing of its previous revolving credit
facility due June 2024 with a new $275 million cash flow revolver
due November 2026. The maturity extension of Stoneridge's revolving
credit facility enhanced our assessment of the company's liquidity,
despite revolver availability being constrained by the 3.50x
leverage covenant (3.11x actual at end of the third quarter) on a
trailing basis. Pro forma for the refinancing, the company had
$55.5 million of total liquidity as of Sept. 30, 2023, consisting
of $36.8 million of balance sheet cash and $18.5 million of net
revolver availability (constrained by 3.5x total leverage
covenant). We expect liquidity to improve as Stoneridge's EBITDA
expands and leverage trends lower over the next few quarters, which
should increase availability on the revolver. However, we view the
tenor of the facility as relatively short and that the company may
start to face refinancing risk one year from now when its weighted
average maturity is below two-years based on the current capital
structure.
"The stable outlook reflects our expectation that Stoneridge will
likely realize improved profitability within the next couple of
years, allowing FOCF to improve toward breakeven and increasing
availability on its revolving credit facility.
"We could lower our rating on Stoneridge if persistent negative
FOCF drains its liquidity sources, we believe the company could
breach its maintenance financial covenants, or if debt to EBITDA
approaches 5x. Weaker financial performance could be due to slower
original equipment manufacturing (OEM) production, inflationary
cost pressures, or ongoing supply chain disruptions affecting the
availability of critical components."
S&P could raise its rating or outlook on Stoneridge if:
-- Its sales volumes and EBITDA margins improve, allowing the
company to sustain FOCF to debt well above 5% and debt to EBITDA
less than 4x; and
-- The uncertainty about further refinancing risks are decreased
given the still relatively short duration of its capital
structure.
S&P said, "Environmental factors are a moderately negative
consideration in our credit analysis of Stoneridge because some
products in its control devices segment (20%-25% of sales) face
displacement risk from electrification. In addition, its ability to
offset potential losses in its fuel line business largely depends
on it expanding the volume of content per vehicle in its
electronics and MirrorEye connectivity segments. A
faster-than-expected transition to battery electric vehicles,
coupled with the slow adoption of the company's products,
represents a modest downside risk."
STROOCK & STROOCK: To Cut Nearly 140 Workers After Collapse
-----------------------------------------------------------
Meghan Tribe of Bloomberg Law reports that Stroock & Stroock &
Lavan will lay off nearly 140 employees in New York in the coming
months as the beleaguered law firm begins its wind-down
operations.
Manhattan-founded Stroock filed a "Warn Act" notice with the New
York Labor Department on November 1, 2023 indicating that it plans
to let go of 138 employees by Jan. 30, 2024. A Stroock spokesperson
did not immediately respond to a request for comment on the
employees impacted by this notice.
The notice comes as the 150-year old Stroock begins its final act
after partners voted in late October to dissolve the firm’s
business. Stroock’s collapse followed a bevy of partner
departures and a series of merger talks with the likes of Nixon
Peabody and Pillsbury Winthrop Shaw & Pittman, among others, proved
unsuccessful.
About Stroock & Stroock & Lavan
Stroock & Stroock & Lavan LLP -- http://www.stroock.com/-- is a
law firm providing transactional and litigation guidance to leading
multinational corporations, investment banks and private equity
firms in the U.S. and abroad. Stroock's practice areas include
capital markets/securities, commercial finance, mergers and
acquisitions and joint ventures, private equity, private funds,
derivatives and commodities, employment law and benefits, energy
and project finance, entertainment, environmental law, financial
restructuring, financial services litigation, insurance,
intellectual property, investment management, litigation, personal
client services, real estate, structured finance and tax.
SUNLIGHT FINANCIAL: Proposes Immaterial Modifications to Plan
-------------------------------------------------------------
Sunlight Financial Holdings Inc. and Its Affiliated Debtors
submitted an Amended Disclosure Statement describing Revised
Prepackaged Plan dated November 2, 2023.
The Debtors have made certain non-material revisions to the
Disclosure Statement consistent with the Plan Release Revisions out
of an abundance of caution and to eliminate any potential ambiguity
regarding the scope of the Third Party Release.
The releases of the Released Parties pursuant to section 10.7(a) of
the Plan (the "Debtor Releases") and the exculpation of the
Exculpated Parties pursuant to section 10.8 of the Plan are an
integral part of the Plan.
With respect to third-party releases, the Released Parties shall be
deemed conclusively, absolutely, unconditionally, irrevocably, and
forever released and discharged by the following parties
(collectively, the "Releasing Parties"):
* the Debtors;
* the Reorganized Debtors;
* the Consenting Creditor;
* the Consenting Equity Holders;
* the Plan Sponsor;
* the TRA Holders;
* with respect to each of the foregoing Persons in clauses (i)
through (vi), such Persons' Related Parties; provided, however,
that the Persons listed in the foregoing clause (viii) shall only
be Releasing Parties with respect to Claims that such Persons could
have legally asserted on behalf of the Persons in clauses
(i)-(vi).
The "Released Parties" are, collectively, and in each case, solely
in their capacities as such:
* the Sunlight Related Parties
* the Debtors;
* the Reorganized Debtors;
* the Consenting Creditor;
* the Consenting Equity Holders;
* the Plan Sponsor;
* the TRA Holders; and
* with respect to each of the foregoing Persons in clauses (i)
through (vii), such Persons' Related Parties.
Notwithstanding the foregoing, (i) solely with respect to the
Causes of Action listed in the Schedule of Retained Causes of
Action, any Person (other than the parties to the Restructuring
Support Agreement and the Sunlight Related Parties) that is subject
to any Cause of Action listed therein, shall not be a Released
Party, (ii) except to the extent that a Person is a Sunlight
Related Party, Related Parties of the Debtors and/or the
Reorganized Debtors shall not be Released Parties unless such
Person is also a Releasing Party, and (iii) a TRA Holder and its
Related Parties shall only be Released Parties if such TRA Holder
is also a Releasing Party.
Treatment of Prepetition Litigation
If the releases set forth in the Plan are approved by the
Bankruptcy Court, the Debtors believe that such releases will
impact some but not all of the prepetition litigation against the
Debtors and certain of their directors and officers. To the extent
that such litigation includes direct claims against the Debtors'
current and former directors and officers, those claims will not be
discharged by the Plan.
To the extent that such litigation includes direct claims against
the Debtors that rank pari passu with General Unsecured Claims,
such litigation and claims will not be impaired by the Plan, except
insofar as such litigation includes derivative claims being
released by the Debtors. To the extent that litigation claims
against the Debtors are subordinated pursuant to section 510(b) of
the Bankruptcy Code, such litigation claims are treated under the
Plan as ranking pari passu with Interests in the Debtors and will
be discharged under the Plan and receive no recovery; however, any
direct claims against non-Debtor third parties will not be impaired
by the Plan.
A full-text copy of the Amended Disclosure Statement dated November
2, 2023 is available at https://urlcurt.com/u?l=F8EL7t 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.
SUREFUNDING LLC: Taps Snell & Wilmer as Special Litigation Counsel
------------------------------------------------------------------
SureFunding, LLC seeks approval from the U.S. Bankruptcy Court for
the District of Delaware to employ Snell & Wilmer L.L.P. as special
litigation counsel.
Snell & Wilmer will litigate the appeal in the receivership action,
a lawsuit filed against the Debtor for breach of contract in the
matter of Brett Hatton, et al. v. Surefunding, LLC, as well as
matters ancillary thereto.
The firm will be paid at these hourly rates:
Kelly H. Dove, Partner $500 - $600
Erik Foley, Associate $400
Gil Kahn, Associate $395
Deborah Shuta, Paralegal $255
Kelly Dove, Esq., a partner at Snell & Wilmer LLP, assured the
court 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:
Kelly H. Dove, Esq.
SNELL & WILMER LLP
50 West Liberty Street #510
Reno, NV 89501
Phone: (775) 785-5407
Email: kdove@swlaw.com
About SureFunding LLC
Las Vegas-based SureFunding, LLC was founded by Jason and Justin
Abernathy in 2014 as a private investment vehicle. It opened in
2015 to outside investors, many of which were family, friends and
business acquaintances. Its investments are in short-term,
high-yield assets.
SureFunding sought Chapter 11 protection (Bankr. D. Del. Case No.
20-10953) on April 14, 2020, with $10 million to $50 million in
both assets and liabilities. Judge Laurie Selber Silverstein
oversees the case.
The Debtor tapped Carl N. Kunz, III, Esq., and Jeffrey R. Waxman,
Esq., at Morris James, LLP as bankruptcy attorneys; Carlyon Cica
Chtd. and Milligan Rona Duran & King, LLC as special litigation
counsels; and Ted Gavin of Gavin/Solmonese, LLC as chief
restructuring and liquidation officer.
Bayard, P.A. represents the ad hoc committee of SureFunding
noteholders.
TASEKO MINES: Fitch Affirms 'B-' LongTerm IDR, Outlook Stable
-------------------------------------------------------------
Fitch Ratings has affirmed Taseko Mines Limited's Long-Term Issuer
Default Rating at 'B-', senior secured second lien notes at
'B-'/'RR4', and senior secured revolver at 'BB-'/'RR1'. The Rating
Outlook is Stable.
The ratings reflect Taseko's limited scale, concentration on one
operation and cost position in the fourth quartile of the global
copper cost curve. The Gibraltar mine benefits from a stable
production profile, a favorable mining jurisdiction and a 23-year
mine life. The Stable Rating Outlook reflects Fitch's view that the
Florence Copper project will be developed and completed in 18
months and that Florence Copper debt will be limited to USD75
million.
KEY RATING DRIVERS
Limited Scale Business Profile: Taseko is relatively smaller and
less diversified by operation and metal than other metals and
mining rated issuers. While it owns 87.5% of one large-scale
operating copper mine in a favorable mining jurisdiction, its costs
are in the fourth quartile of CRU's cost curve (Gibraltar in
British Columbia, Canada). The company has a near-term development
copper project (Florence Copper in Arizona), which Fitch estimates
would reduce the company's overall cost position by about 15% and
increase production by about two-thirds once fully operational.
Modest Execution Risk: The project is now fully permitted and Fitch
believes that cash on hand, additional modest capital raises at the
Florence Copper level and FCF from Gibraltar will be sufficient to
support remaining development. The project is designed to use
in-situ copper recovery rather than conventional mining, and will
take about 18 months to construct and 18 months to ramp up.
Execution risk has been reduced by the 2018 construction and
subsequent operation of a production test facility. Detailed
engineering and design for the commercial production facility is
substantially complete and major processing equipment associated
with the SX/EW plant has been procured and delivered to the site.
Minimal Other Longer-Term Development: Fitch does not expect
material spending on other development until after Florence Copper
has ramped up. The company is evaluating the Yellowhead copper
project in British Columbia, and other early-stage projects
include: Aley (niobium), and New Prosperity (gold and copper) each
in British Columbia. Subsidiaries owning Yellowhead, Aley and New
Prosperity are unrestricted subsidiaries under Taseko's notes.
Copper Sensitivity: Taseko reports that a USD0.25/lb. increase in
copper prices increases annual cash flow by USD28 million. Fitch
notes that cash flow from operations after interest paid and lease
payments was CAD27 million and CAD34 million in 2022 and YTD Sept.
30, 2023, respectively. Fitch assumes the 2023 average copper price
will be about USD3.90/lb., decreasing to about USD3.63/lb. in 2024
and 2025. This compares with Taseko's YTD Sept. 30, 2023 average
realized copper price of USD3.86/lb. and current copper prices are
about USD3.70/lb.
Taseko enters into copper option contracts to reduce short-term
copper price volatility. As of Nov. 1, 2023, the company had
collars covering 21 million pounds of copper maturing in 4Q23 at a
USD3.75/lb. floor price and copper puts on 21 million pounds of
copper maturing 1Q24 at a USD3.25.lb. floor price. These volumes
compare with Taseko's share of 3Q23 Gibraltar copper sales volume
of 28 million pounds.
Deleveraging Capacity Longer Term: Fitch expects EBITDA leverage to
decline to below 3.0x in 2025 and 2026 from about 3.4x at Sept. 30,
2023 pro forma for the Florence Copper equipment financing and
revolver payment in October 2023 with production from Florence
Copper. However, EBITDA leverage could exceed 4.5x in 2024
depending on disruption from the crusher move and mill outages at
Gibraltar in 1Q24.
DERIVATION SUMMARY
Taseko is smaller, less diversified and less profitable than Hudbay
Minerals Inc. (BB-/Stable), Ero Copper Corp. (B/Stable) and First
Quantum Minerals Ltd. (B+/Stable). Taseko has higher leverage than
peers, but development of the low-cost Florence Copper project
would increase size, improve profitability and lower leverage.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer
Include:
- Taseko's interest in Gibraltar production is at the lower end of
guidance in 2023, reduced by the crusher move in 2024, and at 2023
levels thereafter;
- Copper prices incorporate hedges and Fitch assumptions of
USD8,600/tonne in 2023, in USD8,000/tonne in 2024 and 2025, and
USD7,500/tonne in 2026;
- Gibraltar operating expenses decline from USD2.66/lb. in 2023 and
2024 to USD2.20/lb. longer term;
- Taseko's share of Gibraltar capex at roughly CAD84 million in
2023, dropping to CAD65 million in 2024 and CAD56 million in each
of 2025 and 2026;
- The Florence Copper project goes forward roughly in line with the
technical report dated March 30, 2023;
- Other than announced transactions and potential transactions, no
other financing activities.
RECOVERY ANALYSIS
Key Recovery Rating Assumptions
The recovery analysis assumes that Taseko Mines Ltd. would be
reorganized as a going-concern in bankruptcy rather than
liquidated. Fitch notes that Florence Copper Inc. provides an
unsecured guarantee of the notes but may be partially financed on a
secured basis, take 18 months to construct and a further 18 months
to fully ramp-up.
Fitch has assumed a 10% administrative claim.
Going-Concern (GC) Approach
The residual value results in outstanding recovery for Taseko's
revolver assuming full utilization and average recovery
corresponding to the 'RR4' rating on Taseko's senior secured notes.
Unsecured guarantees of Florence Copper loans and Gibraltar stream
have no recovery under this scenario.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Visibility into completion of the Florence Copper project in line
with its assumptions;
- Financial policies in place resulting in EBITDA leverage
sustained below 3.5x.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- A weakening FCF outlook;
- Increased costs or material disruption at Gibraltar;
- Addition of senior secured debt that weakens recovery prospects
of the notes;
- EBITDA leverage sustained above 4.5x.
LIQUIDITY AND DEBT STRUCTURE
Supportive Liquidity: At Sept. 30, 2023, Taseko had CAD82 million
in cash and CAD67 million available under the USD80 million
revolving credit maturing on July 2, 2026. The Gibraltar JV also
has an uncommitted CAD7 million credit facility to provide LOCs to
Gibraltar suppliers to support trade finance and CAD3.75 million in
LOC were outstanding under the facility. Fitch expects FCF to be
modest from Gibraltar in 2023 and in the CAD30 million range in
2024.
ISSUER PROFILE
Taseko is a small mining company headquartered in Vancouver,
British Columbia that operates one large-scale, high-cost copper
mine in Canada (Gibraltar) and owns a pipeline of projects
including: Florence Copper (copper), Aley (niobium), Yellowhead
(copper) and New Prosperity (gold and copper). Taseko owns and
consolidates 87.5% of the Gibraltar mine.
ESG CONSIDERATIONS
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Recovery Prior
----------- ------ -------- -----
Taseko Mines
Limited LT IDR B- Affirmed B-
Senior Secured
2nd Lien LT B- Affirmed RR4 B-
senior secured LT BB- Affirmed RR1 BB-
TEAM HEALTH: S&P Downgrades ICR to 'CCC' on Refinancing Risk
------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on U.S.-based
physician staffing provider Team Health Holdings Inc. to 'CCC' from
'CCC+'. At the same time, S&P lowered the issue-level rating on the
remaining first-lien term loan due 2027 to 'CCC' from 'CCC+' and
lowered the rating on the unsecured notes to 'CC' from 'CCC-'. The
recovery rating on the existing term loan was revised to '4' from
'3' and the recovery rating on the unsecured debt remains '6'.
The negative outlook reflects the possibility of another downgrade
if S&P believes Team Health is likely to consider a distressed
exchange offer, subpar debt repurchase, or bankruptcy within the
next six months.
The company's refinancing of its term loan only provides an
additional 12 months of runway until its springing maturity in
November 2024. The company issued $750 million of new 13.5%
first-lien notes due 2028 and a new $510 million accounts
receivable facility. Team Health will use the funds to refinance
its remaining $1.16 billion senior secured term loan due in
February 2024. Additionally, the company announced that it has
successfully extended its revolving credit facility until March 31,
2028. While this addresses the company's immediate maturity
concerns and improves the company's sources of liquidity, it only
provides about 12 months of additional time before the next
maturity wall. All of the company's secured debt contains a
springing maturity that will make the debt due either 90 or 91 days
ahead of the company's senior unsecured notes due in February 2025.
This springing maturity is in effect if more than $250 million of
the company's $714 million of 2025 notes are outstanding on that
day. S&P said, "We believe the company is dependent upon favorable
economic, operating, and market conditions to be able to refinance
its 2025 notes prior to November 2024. Even if it is able to
refinance its notes, we expect it will be at a much higher interest
rate, which would further burden the company's already negative
cash flow."
S&P said, "We expect the company will generate negative cash flow
in 2023 and 2024, likely no better than breakeven in 2025. The
combination of rising rates and declining profitability led to a
significant deterioration in cash flow generation in 2023. We
expect adjusted free operating cash flow will remain substantially
negative, at roughly negative 3% to negative 5% of adjusted debt.
The company experienced high premium labor costs in the first half
of the year and headwinds from new contracts that take time to ramp
up to profitability. While we expect profitability to improve over
the second half of 2023 and into 2024, we do not expect the company
to generate positive free operating cash flow in 2024 as long as
interest rates remain near current levels." The company is
dependent on meaningful improvements in reimbursement, labor costs,
and interest rates to achieve a path to sustainable free operating
cash flow generation with its current capital structure.
Debt trading at distressed levels increases the likelihood of a
distressed debt exchange. Team Health's debt continues to trade
below par. The company's term loan is trading in the low 70 cent
range and its 2025 bonds are trading around 80 cents with a yield
in the high 20% area. S&P believes this elevates the risk of a
distressed exchange or below par repurchase which results in the
lenders receiving less than the original promise, which it would
view to be akin to default.
Reimbursement rate pressure is likely to constrain growth and
profitability over the next few years. S&P said, "In our view,
payors will continue to seek ways to reduce emergency room
utilization. Reimbursement risk remains significant from all payors
as the industry continues to try and avoid very expensive emergency
room care where possible. We believe the pricing power of
government payors, combined with the desire to reduce health care
costs, should somewhat constrain long-term revenue growth and
profit margin expansion for Team Health." Large and powerful
private third-party payors will also continue to pressure emergency
room utilization and payment rates.
Team Health is one of the largest incumbents in the highly
fragmented and competitive physician staffing industry. Team Health
is one of the largest participants in the narrow health care
physician staffing industry, with significant market positions in
the emergency medicine (about 60% of net revenue in 2022),
hospitalist (about 20% of net revenues), and anesthesiology (about
12% of net revenues) staffing segments. The industry is highly
fragmented and competitive, with low barriers to entry. S&P said,
"Longer term, we expect low-single-digit percent organic revenue
growth as new contract wins and a modest increase in rates are
largely offset by emergency department volumes under existing
contracts that should be flat to down 1% per year. Our longer-term
outlook on emergency department volumes reflects our view that
barriers to entry within the industry are low and there are many
alternatives to emergency departments for lower acuity care,
including telehealth (which benefited from a flood of first-time
users during the pandemic), and the growing popularity of urgent
care sites and multicare facilities."
The negative outlook reflects the possibility of another downgrade
if S&P believes Team Health is likely to consider a distressed
exchange offer, subpar debt repurchase, or bankruptcy within the
next six months.
S&P could lower its rating on the company within the next 12 months
if:
-- S&P believes Team Health is likely to consider a distressed
exchange offer or subpar debt repurchase within the next six
months.
-- The company is unable to refinance its 2025 notes more than six
months prior to the springing maturity of its senior secured debt
in November 2024.
S&P could raise the rating to 'CCC+' if:
-- The company refinances its February 2025 notes; and
-- S&P sees a lower likelihood of a distressed exchange or subpar
debt repurchase within the next 12 months.
S&P said, "While refinancing its February 2025 notes would
alleviate near-term maturity concerns, we would likely still view
the capital structure as unsustainable and the issuer credit rating
would be no higher than 'CCC+' until we believe the company can
consistently generate positive FOCF/debt on a recurring basis.
"Social factors are a moderately negative consideration in our
credit rating analysis of Team Health Holdings. As one of the
largest players in the physician staffing industry, Team Health
generates a portion of its revenue from out-of-network services. In
our view, this could result in significant patient bills that may
be disputed and undergo lengthy negotiation with powerful payers.
Governance factors are a moderately negative consideration in our
credit rating analysis. Our assessment of the company's financial
risk profile as highly leveraged reflects corporate decision-making
that prioritizes the interests of the controlling owners, in line
with our view of the majority of rated entities owned by
private-equity sponsors. Our assessment also reflects the generally
finite holding periods and a focus on maximizing shareholder
returns."
TESORINA LLC: Wins Cash Collateral Access on a Final Basis
----------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of New York
authorized Tesorina, LLC to use cash collateral on a final basis in
accordance with the budget, through July 11, 2023.
The Debtor requires the use of cash collateral to fund payroll and
business operating expenses.
As previously reported by the Troubled Company Reporter, the
Debtor's lending arrangements are:
(i) a loan from M&T Bank in March 2017, originally for
$25,000. The debt to M&T Bank is secured by all assets of the
Debtor. The current amount owed is approximately $25,283;
(ii) an Economic Injury Disaster Loan (EIDL) from the U.S.
Small Business Administration in the amount of $80,000 on or about
July 10, 2020. The current amount owed is approximately $85,586;
(iii) a Rapid Finance Agreement dated July 6, 2022 with Small
Business Financial Solutions, LLC was a Merchant Cash Advance in
which Debtor purportedly pledged $18,200 of future receivables, and
a remittance of 5% or $69 daily from applicable accounts receivable
in repayment of the loan;
(iv) a Shopify Capital Agreement (undated, but from
approximately August 2, 2022) with Shopify Capital Inc. was a
Merchant Cash Advance in which the Debtor purportedly pledged
$32,770 of future receivables, and a remittance of 17% daily from
applicable accounts receivable in repayment of the loan;
(v) a Forward Financing Agreement dated September 26, 2022
with Forward Financing LLC was a Merchant Cash Advance in which the
Debtor purportedly pledged $32,660 of future receivables, and a
remittance of 15% or $204 daily from applicable accounts receivable
in repayment of the loan;
(vi) a Flexibility Capital Agreement dated December 30, 2022
with Flexibility Capital Inc. was a Merchant Cash Advance in which
the Debtor purportedly pledged $11,520 of future receivables, and a
remittance of 9% or $110 daily from applicable accounts receivable
in repayment of the loan.
The only Uniform Commercial Code Financing Statements on file with
the State of New York are:
(i) M&T Bank filed on March 23, 2017 and renewed on September
24, 2021, which is secured by all the Debtor's assets; and
(ii) US Small Business Administration filed on July 10, 2020,
which is secured by all the Debtor's personal property.
The court said that as adequate protection, the parties that assert
liens upon or other interests in the Debtor's assets as of the
Petition Date are granted rollover or replacement liens or
interests of the same kind, in the same assets, to the same extent,
and with the same priority as they had prepetition.
A copy of the Court's order and the Debtor's budget is available at
https://urlcurt.com/u?l=oxpQP1 from PacerMonitor.com.
The Debtor projects total cash paid out, on a monthly basis, as
follows:
$4,336 for November, 2023;
$6,791 for December, 2023; and
$3,466 for January 2024.
About Tesorina, LLC
Tesorina, LLC operates a clothing boutique selling women's clothing
and accessories on line and at a storefront at 17 Chenango St,
Binghamton, NY 13901.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D.N.Y. Case No. 23-60174) on March 17,
2023. In the petition signed by Desiree McCormick, its owner, the
Debtor disclosed up to $50,000 in assets and up to $10 million in
liabilities.
Judge Wendy A. Kinsella oversees the case.
Peter A. Orville, Esq., at Orville & McDonald Law, P.C., represents
the Debtor as legal counsel.
TGC SYSTEMS: Jeanette McPherson Named Subchapter V Trustee
----------------------------------------------------------
The U.S. Trustee for Region 17 appointed Jeanette McPherson, Esq.,
at Fox Rothschild, LLP, as Subchapter V trustee for TGC Systems,
LLC.
Ms. McPherson will be paid an hourly fee of $625 for her services
as Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Ms. McPherson declared that she is a disinterested person according
to Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Jeanette McPherson, Esq.
Fox Rothschild, LLP
1980 Festival Plaza Drive, Suite 700
Las Vegas, NV 89135
Phone: (702) 699-5923
Email: TrusteeJMcPherson@FoxRothschild.com
About TGC Systems
TGC Systems, LLC is a company in Incline Village, Nev., which
conducts business under the name Total Grow Control.
TGC Systems filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. D. Nev. Case No. 23-50783) on Oct. 23,
2023, with $100,000 to $500,000 in assets and $1 million to $10
million in liabilities. Derek Oxford, manager of TCG Investments,
signed the petition.
Kevin A. Darby, Esq., at Darby Law Practice represents the Debtor
as bankruptcy counsel.
TRINSEO PLC: Closes Manufacturing Operations in Netherlands
-----------------------------------------------------------
Trinseo announced its decision to discontinue operations at its
ethylbenzene styrene monomer (EBSM) manufacturing facility in
Terneuzen, the Netherlands. This decision was made following the
completion of joint negotiations with the Works Council in
Terneuzen. The plant is scheduled to officially cease operations
in November 2023. With the closure of the EBSM facility, the
company will purchase of all of its styrene needs from third party
suppliers to support its downstream businesses.
The Company also recently announced the closure of its PMMA sheet
operations in Bronderslev, Denmark, Belen, New Mexico, and Rho,
Italy, as well as cost saving measures including headcount and
other reductions. Materials produced at the closed PMMA sheet
plants will now be produced by other facilities within the global
network, primarily Saint-Avold, France, and Florence, Kentucky,
USA.
In aggregate, these initiatives are expected to result in annual
cost savings of approximately $75 million. The anticipated future
cash payments associated with these actions are approximately $50
million, with $35 million of this expected to be incurred in 2024.
"Decisions like this that impact the livelihoods of our colleagues
are never easy, and this decision in no way reflects on the
capabilities of our dedicated teammates in Terneuzen, or at other
operations that were part of this optimization effort," said CEO
Frank Bozich. "Given reduced European demand and global styrene
capacity additions, we believe that we will be able to support our
downstream business effectively through market purchases with lower
carbon, capital and energy intensity for the foreseeable future,"
added Bozich.
These latest restructuring actions, in combination with lower
natural gas hedge losses, are expected to result in a sequential
profitability improvement of $100 million in 2024.
About Trinseo
Trinseo (NYSE: TSE) (www.trinseo.com), a specialty material
solutions provider, partners with companies to bring ideas to life
in an imaginative, smart and sustainably focused manner by
combining its premier expertise, forward-looking innovations and
best-in-class materials to unlock value for companies and
consumers. From design to manufacturing, Trinseo taps into decades
of experience in diverse material solutions to address customers'
unique challenges in a wide range of industries, including building
and construction, consumer goods, medical and mobility.
Trinseo reported a net loss of $430.9 million in 2022.
* * *
As reported by the TCR on May 30, 2023, S&P Global Ratings lowered
its issuer credit rating on Trinseo PLC to 'CCC+' from 'B-'. S&P
said, "The downgrade reflects that Trinseo has not yet addressed
the upcoming maturity of its $661.7 million TLB, which becomes
current in September, and that we anticipate weak 2023 earnings."
TRINSEO PLC: Incurs $38.4 Million Net Loss in Third Quarter
-----------------------------------------------------------
Trinseo PLC filed with the Securities and Exchange Commission its
Quarterly Report on Form 10-Q disclosing a net loss of $38.4
million on $879 million of net sales for the three months ended
Sept. 30, 2023, compared to a net loss of $119.8 million on $1.18
billion of net sales for the three months ended Sept. 30, 2022.
For the nine months ended Sept. 30, 2023, the Company reported a
net loss of $436.3 million on $2.84 billion of net sales compared
to a net loss of $65.6 million on $3.99 billion of net sales for
the nine months ended Sept. 30, 2022.
As of Sept. 30, 2023, the Company had $3.27 billion in total
assets, $691.5 million in total current liabilities, $2.60 billion
in total noncurrent liabilities, and a total shareholders' deficit
of $21.4 million.
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/0001519061/000155837023017725/tse-20230930x10q.htm
About Trinseo
Trinseo (NYSE: TSE) (www.trinseo.com), a specialty material
solutions provider, partners with companies to bring ideas to life
in an imaginative, smart and sustainably focused manner by
combining its premier expertise, forward-looking innovations and
best-in-class materials to unlock value for companies and
consumers. From design to manufacturing, Trinseo taps into decades
of experience in diverse material solutions to address customers'
unique challenges in a wide range of industries, including building
and construction, consumer goods, medical and mobility.
Trinseo reported a net loss of $430.9 million in 2022.
* * *
As reported by the TCR on May 30, 2023, S&P Global Ratings lowered
its issuer credit rating on Trinseo PLC to 'CCC+' from 'B-'. S&P
said, "The downgrade reflects that Trinseo has not yet addressed
the upcoming maturity of its $661.7 million TLB, which becomes
current in September, and that we anticipate weak 2023 earnings."
TRIUMPH GROUP: Incurs $1.3 Million Net Loss in Second Quarter
-------------------------------------------------------------
Triumph Group, Inc. filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing a net loss
of $1.30 million on $354.06 million of net sales for the three
months ended Sept. 30, 2023, compared to net income of $106.53
million on $307.60 million of net sales for the three months ended
Sept. 30, 2022.
For the six months ended Sept. 30, 2023, the Company reported a net
loss of $19.46 million on $681.21 million of net sales compared to
net income of $96.18 million on $656.98 million of net sales for
the six months ended Sept. 30, 2022.
As of Sept. 30, 2023, the Company had $1.67 billion in total
assets, $314.63 million in total current liabilities, $1.65 billion
in long-term debt (less current portion), $307.84 million in
accrued pension and other postretirement benefits, $7.27 million in
deferred income taxes, $55.62 million in other noncurrent
liabilities, and a total stockholders' deficit of $668.22 million.
Management Commentary
"TRIUMPH generated its sixth consecutive quarter of year over year
organic sales growth driven by continued strong commercial
aftermarket demand," said Dan Crowley, TRIUMPH's chairman,
president, and chief executive officer. "Free cash use was in line
with our expectations. We continue to expect free cash flow to
improve over the course of the year, as the first half working
capital build supports our higher second half deliveries. Backlog
is at its highest level since March 2020 and TRIUMPH is well
positioned to continue to grow organically and improve
profitability, while also benefiting from the positive trends
across our end markets."
Mr. Crowley continued, "As TRIUMPH focuses on generating free cash
flow and deleveraging, we recently redeemed $45 million of our 2025
bonds reducing leverage and interest expense. TRIUMPH remains on
track to deliver profitable growth and we are raising our full year
guidance as we continue to execute on our financial and operational
goals."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/0001021162/000095017023060334/tgi-20230930.htm
About Triumph
Headquartered in Berwyn, Pennsylvania, Triumph Group, Inc. --
http://www.triumphgroup.com-- designs, engineers, manufactures,
repairs and overhauls a broad portfolio of aerospace and defense
systems, components and structures. The company serves the global
aviation industry, including original equipment manufacturers and
the full spectrum of military and commercial aircraft operators.
* * *
As reported by the TCR on Oct. 4, 2023, Moody's Investors Service
upgraded its ratings for Triumph Group, Inc.'s, including the
corporate family rating to Caa1 from Caa2. The ratings upgrades
reflects Moody's view that the ongoing recovery in commercial
aerospace markets will drive earnings growth, increased cash
generation, and a gradual improvement in Triumph's credit metrics.
S&P Global Ratings affirmed its 'CCC+' issuer credit rating on
Triumph Group Inc. and revised the outlook to stable from negative,
the TCR reported on March 1, 2023.
UPHEALTH HOLDINGS: Hires Omni Agent as Administrative Agent
-----------------------------------------------------------
UpHealth Holdings Inc. seeks approval from the U.S. Bankruptcy
Court for the District of Delaware to hire Omni Agent Solutions as
administrative agent.
The firm will render these services:
(a) assist with, among other things, solicitation, balloting
and tabulation of votes, and preparation of any related reports;
(b) prepare an official ballot certification and, if
necessary, testify in support of the ballot tabulation results;
(c) assist with the preparation of the Debtors' schedules of
assets and liabilities and statements of financial affairs and
gather data in conjunction therewith;
(d) provide a confidential data room, if requested;
(e) manage and coordinate any distributions pursuant to a
Chapter 11 plan; and
(f) provide such other processing, solicitation, balloting,
and administrative services described in the Engagement Agreement.
The hourly rates of Omni's professionals are as follows:
Analyst $45 - $75
Consultants $75 - $195
Senior Consultants $200 - $240
Solicitation and Securities Services $200 - $225
Director of Solicitation $250
Technology/Programming $85 - $155
In addition, the firm will seek reimbursement for expenses
incurred.
Paul Deutch, the executive vice 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:
Paul H. Deutch
Omni Agent Solutions
5955 De Soto Avenue, Suite 100
Woodland Hills, CA 91367
Telephone: (818) 906-8300
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 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.
UPHEALTH HOLDINGS: Seeks to Hire Ordinary Course Professionals
--------------------------------------------------------------
UpHealth Holdings Inc. seeks approval from the U.S. Bankruptcy
Court for the District of Delaware to retain, employ, and
compensate professionals utilized in the ordinary course of
business.
The OCPs include:
a. P&A Law Offices
Legal Services in India
Fees: $135,000
Expenses: $50,000
b. Michelman & Robinson, LLP
Legal Services
Monthly Cap: $15,000
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 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.
UPHEALTH HOLDINGS: Taps Morrison & Foerster as Litigation Counsel
-----------------------------------------------------------------
UpHealth Holdings Inc. seeks approval from the U.S. Bankruptcy
Court for the District of Delaware to hire Morrison & Foerster LLP
as its special litigation counsel.
The firm will represent the Debtors in connection with the appeal
of the adverse decision in Needham & Co., LLC v. UpHealth Holdings,
Inc. & UpHealth Services, Inc., and, if appropriate and desired by
the Debtors, any proceedings on remand to the New York Supreme
Court, or any adversarial proceedings on the same dispute in this
Court.
Morrison & Foerster's current hourly rates for matters related to
these Chapter 11 cases are:
Partners and Senior Of Counsel $1,200 to $2,050
Of Counsel $1,050 to $1,950
Associates $710 to $1,145
Paraprofessionals $340 to $560
In addition, the firm will seek reimbursement for expenses
incurred.
The Debtors intend to provide Morrison & Foerster with an advance
payment of $100,000 to establish a retainer.
The following information is provided in response to the request
for additional information set forth in the U.S. Trustee Fee
Guidelines in compliance with paragraph D, section 1, as follows:
Question 1: Did you agree to any variations from, or
alternatives to, your standard or customary billing arrangements
for this engagement?
Response: No.
Question 2: Do any of the professionals included in this
engagement vary their rate based on the geographic location of the
bankruptcy case?
Response: No.
Question 3: If you represented the client in the 12 months
prepetition, disclose your billing rates and material financial
terms for the prepetition engagement, including any adjustments
during the 12 months prepetition. If your billing rates and
material financial terms have changed post-petition, explain the
difference and the reasons for the difference.
Response: N/A.
Question: 4 Has your client approved your prospective budget and
staffing plan, and, if so for what budget period?
Response: The Debtors and Morrison & Foerster expect to develop
a budget and staffing plan for this matter.
Joseph Palmore, Esq., a partner at Morrison & Foerster, 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:
Joseph Palmore, Esq.
Morrison & Foerster LLP
2100 L Street, NW, Suite 900
Washington, D.C., 20037
Phone: (202) 887-6940
Email: jpalmore@mofo.com
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 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.
VENTURE INC: Court OKs Cash Collateral Access Thru Nov 20
---------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Mississippi
authorized Venture, Inc. and affiliates to use cash collateral on
an interim basis in accordance with the budget, with a 10%
variance, thru November 20, 2023.
Moran Foods, LLC, f/k/a Moran Foods, Inc., d/b/a Save-A- Lot, Ltd.
asserts an interest in the Debtor's cash collateral.
As adequate protection, the Lender is granted valid, perfected and
continuing, replacement security interests in, and liens on all of
the Debtors' rights, titles and interests in, to and under the
Collateral, in the same position and to the same extent as Lender's
Liens on the Prepetition Collateral.
The Lender is also granted superpriority claims, junior only to the
Carve-Out.
The Debtors will maintain insurance with respect to all Prepetition
Collateral and Post-petition Collateral, whether real or personal
property, for the benefit of the Lender, which will be named as
loss payees or co-insured.
A final hearing on the matter is set for November 16 at 1:30 p.m.
A copy of the order is available at https://urlcurt.com/u?l=dgV9bE
from PacerMonitor.com.
About Venture Inc.
Venture Inc. and its affiliates filed their voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Miss.
Lead Case No. 23-02186) on Sept. 22, 2023. In the petitions signed
by Daniel K. Myers, president, Venture Inc. disclosed up to $1
million in estimated assets and up to $10 million in total
liabilities.
Judge Jamie A. Wilson oversees the case.
The Debtors tapped Newman & Newman and the Law Offices of Craig M.
Geno, PLLC as counsel and Harper Rains Knight & Company, PA as
financial advisor.
VISTAGEN THERAPEUTICS: Receives $1.5M Payment From Fuji Pharma
--------------------------------------------------------------
Vistagen Therapeutics, Inc. disclosed in a Current Report on Form
8-K filed with the Securities and Exchange Commission that it
received a $1,500,000 payment from Fuji Pharma Co., Ltd., in
accordance with the Exclusive Negotiation Agreement entered into by
Company and Fuji Pharma on Sept. 1, 2023.
The Negotiation Agreement provides for a limited period of time
during which Fuji Pharma has the exclusive opportunity to negotiate
with the Company for a potential license to develop and
commercialize PH80, the Company's non-systemic, hormone-free
pherine nasal spray product candidate, in Japan for the acute
treatment of moderate to severe vasomotor symptoms (hot flashes)
due to menopause and potentially other indications.
The Purchase Price is not refundable, except upon a material breach
of the Negotiation Agreement by the Company. Should the Company
and Fuji Pharma enter into a definitive license agreement for the
development and commercialization of PH80 in Japan during the
exclusive negotiation period, the Purchase Price will be creditable
against the signing fee for such agreement. Neither the Company
nor Fuji Pharma is obligated to enter into the Potential Definitive
Agreement, and if the Company and Fuji Pharma have not entered into
the Potential Definitive Agreement on or before the end of the
exclusive negotiation period, either the Company or Fuji Pharma may
terminate any further negotiations.
About VistaGen
Headquartered in San Francisco, California, VistaGen Therapeutics,
Inc. -- http://www.vistagen.com-- is a late clinical-stage
biopharmaceutical company aiming to transform the treatment
landscape for individuals living with anxiety, depression and other
CNS disorders. The Company is advancing therapeutics with the
potential to be faster-acting, and with fewer side effects and
safety concerns, than those that are currently available for
treatment of anxiety, depression and multiple CNS disorders.
Vistagen reported a net loss and comprehensive loss of $59.25
million for the fiscal year ended March 31, 2023, compared to a net
loss and comprehensive loss of $47.76 million on $1.11 million of
total revenues for the year ended March 31, 2022. As of March 31,
2023, the Company had $21.09 million in total assets, $9.01 million
in total liabilities, and $12.08 million in total stockholders'
equity.
San Francisco, California-based WithumSmith+Brown, PC, the
Company's auditor since 2006, issued a "going concern"
qualification in its report dated June 28, 2023, citing that the
Company has suffered negative cash flows from operations and
recurring losses from operations since inception, resulting in an
accumulated deficit of $326.9 million as of March 31, 2023, that
raise substantial doubt about its ability to continue as a going
concern.
VMR CONTRACTORS: Wins Interim Cash Collateral Access
----------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Illinois,
Eastern Division, authorized VMR Contractors Inc. to use cash
collateral, in accordance with the terms of the Order entered March
1, 2023 and the budget.
As previously reported by the Troubled Company Reporter, several
entities may claim an interest in the Debtor's cash collateral.
Those potential claimants are:
1. The State of Illinois, which recorded state tax liens on
April 28 and June 14, 2022, in the total amount of $32,346.
2. The IRS, which recorded federal tax liens with the Illinois
Secretary of State, including a lien dated November 16, 2016, in
the amount of $424,956. Other tax liens also have been recorded;
the IRS has asserted it is owed $819,234. The Debtor disputes a
large portion of this amount, including an obligation from 2015 of
$560,027, which appears to be clearly erroneous because it is
wholly disproportionate to the Debtor's operations.
3. Old National Bank, whose predecessor, Bridgeview Bank
Group, filed on August 1, 2018, a financing statement with the
Illinois Secretary of State as document number 023614561. The
amount owed to Old National is approximately $160,633 in London,
England.
A further hearing on the matter is set for November 13 at 10 a.m.
A copy of the Court's order and the Debtor's budget is available at
https://urlcurt.com/u?l=WEUkL5 from PacerMonitor.com.
The Debtor projects $122,593 in total income and $121,916 in total
expenses for the period ending December 4, 2023.
About VMR Contractors
VMR Contractors supplies and installs rebar for road construction
projects. The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Ill. Case No. 22-14211) on December 8,
2022. In the petition signed by Vincent Roberson, its president,
the Debtor disclosed up to $1 million in assets and up to $10
million in liabilities.
Judge Benjamin Goldgar oversees the case.
William J. Factor, Esq., at Factor Law, is the Debtor's legal
counsel.
WC CONCRETE: Hires Lefkovitz & Lefkovitz as Bankruptcy Counsel
--------------------------------------------------------------
WC Concrete, Inc. seeks approval from the U.S. Bankruptcy Court for
the Middle District of Tennessee to hire Lefkovitz And Lefkovitz,
PLLC as its counsel.
The Debtor requires legal counsel to:
(a) give advice regarding the Debtor's rights, duties and
powers;
(b) prepare and file statements and schedules, plans, and
other documents and pleadings necessary to be filed by the Debtor
in this proceeding;
(c) represent the Debtor at all hearings, meetings of
creditors, conferences, trials, and any other proceedings in this
case; and
(d) perform such other legal services as may be necessary in
connection with this case.
The hourly rates of the firm's counsel and staff are as follows:
Steven L. Lefkovitz $600
Associate Attorneys $450
Paralegals $125
The firm received a retainer of $10,000.
Steven Lefkovitz, Esq., an attorney at Lefkovitz & Lefkovitz,
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:
Steven L. Lefkovitz, Esq.
Lefkovitz & Lefkovitz, PLLC
908 Harpeth Valley Place
Nashville, TN 37221
Telephone: (615) 256-8300
Facsimile: (615) 255-4516
Email: slefkovitz@lefkovitz.com
About WC Concrete, Inc.
WC Concrete, Inc. sought protection for relief under Chapter 11 of
the Bankruptcy Code (Bankr. M.D. Tenn. Case No. 23-03939) on Oct.
27, 2023, listing $100,001 to $500,000 in assets and $500,001 to $1
million in liabilities.
Judge Marian F Harrison oversees the case.
Steven L. Lefkovitz, Esq. at Lefkovitz And Lefkovitz, PLLC
represents the Debtor as counsel.
WESTERN DIGITAL: Fitch Cuts LongTerm IDR to BB+, On Watch Negative
------------------------------------------------------------------
Fitch Ratings has downgraded the Long-Term Issuer Default Rating
(IDR) for Western Digital Corp. to 'BB+' from 'BBB-' and the senior
unsecured ratings to 'BB+'/'RR4' from 'BBB-'. Fitch has also placed
all of Western Digital's ratings on Watch Negative (RWN) following
the company's announcement that it will spin-off its Flash
business. Western Digital's senior secured debt is rated
'BBB-'/'RR2'. Fitch plans to resolve the RWN once the company
finalizes post-separation capital structures and financial
policies, which Fitch does not anticipate until closer to the
second-half calendar 2024 target transaction date.
Fitch has also rated Western Digital's just priced $1.6 billion of
3.0% convertible senior notes maturing Nov. 15, 2028 'BB+'/'RR4'.
The 2028 convertible notes are pari passu with the company's senior
unsecured obligations, including the 2026 senior notes. Western
Digital used net proceeds from the convertible notes to enter into
a capped call transaction and fund privately negotiated repurchases
of $1.1 billion of 1.5% convertible senior notes maturing on Feb.
1, 2024. Fitch expects the company to use any remaining net
proceeds for debt reduction.
Finally, Fitch has rated Western Digital's $600 million senior
secured delayed-draw term loan due June 28, 2024 'BBB-'/'RR2'. This
term loan is secured on a first-lien basis and is pari passu with
borrowings under the company's amended credit agreements and 2029
and 2032 series of senior notes.
KEY RATING DRIVERS
More Opportunistic Financial Policies: Fitch expects Western
Digital to prioritize debt reduction until it approaches
management's 1.0x-3.25x EBITDA leverage target range but believes
the separation transaction will result in more opportunistic
financial policies, including more aggressive capital returns. The
Flash businesses' deeper downcycles and higher capital intensity
than for the hard disk drive (HDD) business has constrained share
repurchases and played a significant role in Western Digital's
decision to suspend its common dividend on April 20, 2020.
However, Fitch believes that activist investor, Elliott Capital
Management's, stake in Western Digital supports the case for a
long-term capital structure more in-line with direct HDD
competitor, Seagate Technology plc (BB+/Negative). Meanwhile, Fitch
does not anticipate that the Flash business will support an
aggressive capital structure or meaningful capital returns, likely
saddling the HDD business with the bulk of Western Digital's $7.7
billion of total debt.
Reduced Post Spinoff Diversification: The Flash business spin-off
reduces diversification for the HDD business by lowering its mix of
personal computers (PCs) and retail markets sales and eliminating
exposure to mobile handsets all together. Following the spin-off,
cloud markets will represent more than 75% and increasing share of
HDD's end market revenue mix with high concentration to large
service providers. This exposure should support secular exabyte
(EB) demand growth and premium gross profit margins but with higher
volatility associated with uneven datacenter (DC) deployments.
Slower, Less Cyclical Growth: Pro forma for the separation, Fitch
expects slower but less cyclical revenue growth for Western Digital
given the duopolistic HDD industry structure's stabilizing impact
on average selling prices. Fitch believes that the current severe
HDD downturn is an aberration and expects demand for mass capacity
drives (nearline) to support low-single digit average revenue
growth and shallower corrections for HDDs going forward. However,
Fitch expects more quarterly demand fluctuations as Western
Digital's cloud exposure increases.
Comparatively, average revenue growth for Flash should be in the
mid- to high-single digits but with more significant corrections,
given the industry's fragmented structure at both the solid-state
drive (SSD) and NAND supply levels. The current correction in flash
memory prices is less of an aberration but its length and depth are
the worst posted since the 2008 financial crisis.
Lower Investment Intensity: Fitch expects lower investment
intensity for Western Digital following the separation, although
the Flash business reduces cash investments by sharing in
development and capital spending with its joint venture (JV)
partner, Kioxia. Consolidated capital intensity is in the mid- to
high-single digits (excluding capital spending at Flash Ventures)
but Fitch believes it will likely decline to low- to mid-single
digits, in-line with standalone HDD peer, Seagate Technology plc.
Record High Leverage Metrics: Fitch expects leverage metrics to
begin improving calendar 2025 after troughing at historically high
levels in the just ended and next quarters that have resulted in
Western Digital amending its credit agreement for financial
covenant relief twice over the past year. Leverage metrics are not
meaningful due to negative LTM EBITDA and Fitch estimates
CFO-Capex/Total Debt was -21.5% for the LTM ended Sept. 30, 2023.
Fitch forecasts leverage metrics on the weaker side of its
leverage-based negative rating sensitivities for another 12-24
months.
Western Digital will accelerate deleveraging with debt reduction
from FCF beginning in fiscal 2025, including repaying borrowings
under the $600 million of delayed draw term loan and pro rata
payment against the $2.7 billion of term loan A-2 due Jan. 7, 2027.
Fitch expects future HDD downcycles to be less severe than the
current one, enabling the company to maintain leverage metrics
roughly in-line with its target. However, steep downcycles in the
Flash business are unlikely to moderate, particularly given
industry fragmentation and within the context of elevated
geo-political tensions and efforts to diversify electronics supply
chains.
Deeply Cyclical Profitability: The comparative stability of Western
Digital's HDD business remain insufficient to offset the deeply
cyclical profitability of its flash business, and flash providers
more broadly, given the commodity-like nature of flash products and
current industry structure. Secular bit demand for flash remains
robust but excess supply additions across a still unconsolidated
set of providers whether due to additional capacity to meet strong
demand signals, from which the industry is currently suffering, or
to facilitate production technology transitions, place significant
pressure on marginal prices.
In response, Western Digital has taken cost reduction measures
reducing operating expenses to roughly $600 million per quarter
through a combination of headcount reductions, footprint
optimization and cuts to variable spending. Fitch believes these
are partly structural, stemming from increased scrutiny around the
strategic review, and partly temporary, given investment
intensities among Western Digital's peer group.
Cyclically Pressured FCF: Fitch forecasts negative FCF for fiscal
2024, which includes cash payments against the company's tax
settlement with the IRS, which resulted in Western Digital
recognizing a liability for tax and interest of $753 million with
cash payments over fiscal 2024. Offsetting these cash outflows are
expectations for strengthening profitability, Western Digital's
inventory reduction efforts from historic high levels in both HDD
and Flash and lower capital spending. Over the longer term, Fitch
expects $250 million-$500 million of annual FCF for the disk drive
business and a wider range of negative $250 million-$750 million
for the Flash business.
Significant Technology Risk: Fitch expects technology risk will
remain significant, driven by areal density increases in HDDs and
technology transitions in manufacturing flash memory. Meaningful
new product introduction delays, driven by lagging technology,
would result in market share losses and significantly lower
profitability from average selling price reductions. The slowing of
Moore's Law reflects the industry approaching the limitations of
physics and economics under conventional manufacturing
methodologies, while the HDD industry has had to achieve stable
drives using energy assisted technologies to achieve density
increase roadmap through 2030.
Leading Market Positions: Western Digital and its competitor,
Seagate, have strong market positions, each accounting for roughly
half of all capacity drives sold to cloud customers and video
applications. Additionally, Western Digital has growing share in
enterprise flash drives and significant positions in retail
markets, personal computers and mobile handsets, enabled in part by
a bare NAND supply agreement with its Flash Ventures JV at
favorable economics. The JV itself is a NAND leader controlling
roughly 30% of the NAND market while benefitting from shared
investments in R&D and capital spending by both Western Digital and
Kioxia.
DERIVATION SUMMARY
Fitch believes Western Digital is positioned in-line with a mid- to
strong-'BB' rating currently and pro forma for the separation
transaction, depending upon the HDD business' ultimate capital
structure. Nonetheless, Fitch's expectation for the bulk of the
company's consolidated debt remaining with the disk drive business
point to structurally weaker but less cyclical leverage metrics
over the forecast period. Fitch expects financial policies to be
opportunistic given activist investors' ownership stakes in the
company, although the financial covenant suspensions and separation
transaction pressure for capital returns over the near term.
Fitch's expectations for less than robust recovery from this
current severe downturn that will constrain intermediate-term
profitability and FCF, pressuring credit metrics beyond a more
typical memory cycle duration. Western Digital's operating profile
hinges upon its strong market positions in both HDDs and flash,
significant barriers to entry from high investment intensity
required for meaningful participation in both markets and secular
demand for storage solutions supporting higher-than-global GDP
long-term revenue growth. However, near-term FCF usage and cash
payments associated with the tax settlement has weakened financial
flexibility and structure factors even as end market demand begins
recovering in the near term.
Fitch views Western Digital's operating profile as overall in-line
with that of HDD competitor, Seagate Technology plc. Together they
represent effectively all available capacity HDD supply, markets
benefitting from secular growth dynamics. However, Western
Digital's Flash business should benefit from higher long-term
growth prospects but greater cyclicality, given a less consolidated
industry structure and more commodity-like nature of flash
products. Investment intensity in HDDs is similar to that of
Seagate but Flash business intensity is higher despite Western
Digital sharing investment intensity with its JV partner.
Fitch treats the $900 million investment agreement that Western
Digital recently entered into with Apollo Global Management, Inc.
and Elliott Management Corp., which is incremental to Elliott's $1
billion stake disclosed in June 2022, as 100% debt. Under Fitch's
"Hybrid Securities Treatment" Criteria, the change of control
features contained in the agreement for the convertible preferred
stock preclude equity credit.
KEY ASSUMPTIONS
- Revenue down by more than 30% in fiscal 2023, driven by customer
inventory digestion and significant flash price declines;
- Revenue begins recovery in fiscal 2024 before moderating in
fiscal 2025-2026 in-line with long-term growth trends;
- Operating EBITDA margins trough in the low- to mid-single digits
in fiscal 2023 before expanding to mid- and then high-teens, driven
by higher revenue levels and gross profit, as well as actions taken
to lower operating expenses;
- Capex is just over $900 million in fiscal 2023 and resumes 6%-7%
long-term trend;
- Dividends and share repurchases remain suspended to prioritize
FCF for debt reduction until credit metrics return to being in-line
with the rating, implying that debt maturities are only partly
refinanced.
RECOVERY ANALYSIS
Fitch's recovery approach reflects generic assumptions about
recoveries rather than issuer-specific recoveries. Under this
approach, Fitch notches instruments against the IDR and assigns RRs
according to the 'Notching for BB Category Issuer' table.
Western Digital's first-lien senior secured debt includes fully
drawn amounts under the Amended and Restated Credit Agreement and
Amended Delayed Draw Term Loan, as well as the 2029 and 2032 senior
notes. Fitch believes the secured debt features two of the
limitations in category 2 on a current and projected basis and,
therefore, does not qualify for category 1 treatment, resulting in
'RR2'/'+1' notching.
On a current and projected basis, Fitch estimates that fully-drawn
secured gross leverage is excessive since it currently exceeds
5.25x, which is 50% higher than the 3.5x EBITDA leverage mid-point
for a 'BB'-category-rated U.S. technology issuer. Fitch recognizes
the impact of the current historic downturn is having on EBITDA but
the 5.25x threshold will be breached over the near-term and
potentially longer, depending on post-separation capitalization.
Fitch equalizes the senior unsecured debt instrument ratings with
the IDR and assigns 'RR4'/'0+' recovery ratings to the 2026 senior
unsecured notes and $1.4 billion of 3.0% convertible senior notes.
Fitch also does not rate the $900 million of preferred stock issued
earlier in January 2023, which Fitch treats as 100% debt.
RATING SENSITIVITIES
Fitch expects to resolve the RWN once Western Digital articulates
post-separation capital structure and financial policies for the
two entities.
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Average organic revenue growth in the low- to mid-single digits
and operating EBITDA margins averaging in the mid-20s through the
memory cycle.
- CFO-Capex/Total Debt averaging 20% through the cycle with EBITDA
leverage averaging below 2.5x through the cycle.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Sustained negative organic revenue growth from weaker than
expected capacity HDD growth.
- Fitch's expectations for CFO-Capex/Total Debt sustained below 15%
or EBITDA leverage sustained above 3.0x, on average.
LIQUIDITY AND DEBT STRUCTURE
Adequate Liquidity: Fitch views Western Digital's liquidity as
adequate and, as of Sept. 30, 2023, was supported by $2.0 billion
of cash and cash equivalents and an undrawn $2.25 billion RCF
expiring Jan. 7, 2027. Fitch expects negative FCF will be a
headwind for liquidity until the separation of the flash from the
disk drive business.
Beyond the $1.4 billion of unsecured convertible notes recently
issued to help address $1.1 billion of unsecured convertibles notes
maturing Feb. 1, 2024, Western Digital faces $600 million of
delayed draw term loans due on June 28, 2024 and mandatory
quarterly amortization under the $2.7 billion of term loan A-2.
ISSUER PROFILE
Western Digital Corp. is a leading provider of storage technologies
and solutions based upon hard disk-drives and flash memory drives,
for cloud, client and retail customers.
ESG CONSIDERATIONS
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Recovery Prior
----------- ------ -------- -----
Western Digital
Corp. LT IDR BB+ Downgrade BBB-
senior secured LT BBB- New Rating RR2
senior
unsecured LT BB+ New Rating RR4
senior
unsecured LT BB+ Downgrade RR4 BBB-
senior secured LT BBB- Rating Watch On RR2 BBB-
WEWORK COMPANIES: Fitch Lowers LongTerm IDR to D Following Chap. 11
-------------------------------------------------------------------
Fitch Ratings has downgraded WeWork Companies, LLC and WeWork
Inc.'s (collectively WeWork) Long-Term Issuer Default Rating (IDR)
to 'D' from 'RD' following the company's filing for Chapter 11
bankruptcy protection on Nov. 6, 2023. There was approximately $4.2
billion in total debt (including accrued interest) outstanding as
of the petition date. Fitch is also downgrading the first-lien debt
to 'C'/'RR4' from 'CC'/'RR3'. Fitch has affirmed the second-lien
and unsecured debt at 'C'/'RR6'.
The company filed with a restructuring support agreement in hand in
which WeWork and several key constituents, including SoftBank and
holders of WeWork's first and second-line notes, agreed to support
a restructuring process that will equitize the company's first and
second-lien debt and reduce funded debt by approximately $3
billion. Close to $490 million of third-lien and unsecured bond
debt are expected to be extinguished.
To address liquidity during the bankruptcy process, the company is
arranging a senior secured, debtor-in-possession cash
collateralized LOC facility in an aggregate amount not to exceed
$750 million. Any amount drawn on the LOC DIP facility in excess of
$100 million will be converted to equity. Amounts drawn up to $100
million will be rolled into a new first-lien exit facility upon the
company's emergence from bankruptcy. The terms of the DIP facility
are subject to judicial approval.
KEY RATING DRIVERS
Lease Negotiations: The company claims in its filing to be in
negotiations with more than 400 landlords to reduce its lease
obligations. It is also rejecting 69 leases, of which 40 are in New
York City, as part of the bankruptcy process. The company views a
successful reduction in its lease payments as essential to its
ability to exit bankruptcy with a viable business. This process is
a continuation of ongoing attempts to reduce its lease liabilities.
In its 2022 annual filing, WeWork noted that during the prior three
years, the company had successfully exited or reduced the
obligations associated with more than 700 leases. Current upheaval
in the commercial office space market benefits WeWork in these
negotiations, and the bankruptcy filing will add pressure on the
landlords.
The mismatch between the long-term nature of the company's leases
and the short-term agreements with its customers is a fundamental
flaw of the business model. WeWork has a few revenue sharing
agreements with landlords that protect it from lower demand for
office space. The benefit of this model for WeWork is obvious, but
it is not clear whether the company can shift its business model
completely.
Post Emergence Prospects: WeWork has a valuable brand, including
excellent name recognition. The company's revenue of more than $2.5
billion in 2021 and $3 billion in 2022 demonstrates considerable
demand. The customer list is diverse in terms of company sizes and
geographic distribution. All of these factors should result in a
viable business, but the company has never been profitable. It may
need even further reductions in its footprint, and Fitch envisions
a materially smaller company emerging from bankruptcy than the
rejection of 69 leases would suggest. WeWork has not committed to a
specific number of leases that will be rejected, because
negotiations with landlords are ongoing. However, in the 8-K
filing, specifically Exhibit 99.2, the company assumes that they
will exit 163 locations as part of a preliminary business plan.
DERIVATION SUMMARY
Fitch's downgrade of WeWork to 'D' follows WeWork's Nov. 6, 2023,
Chapter 11 bankruptcy filing. The filing follows years of operating
losses and cash burn. Given the challenging environment for
commercial office space, the company will have significant
negotiating leverage with its landlords; however, its co-working
peers have also struggled with underperformance.
KEY ASSUMPTIONS
Revenue: Fitch assumes challenging macro conditions will lead to
2023 revenue being flat and growth of only 2% in 2024. An important
driver of this will be WeWork's pricing power, which Fitch expects
to be an ongoing challenge especially if the broader economy
contracts.
EBITDA: With limited growth, Fitch believes WeWork will not be
EBITDA positive in the next 12 months to 18 months, although the
trend continues to improve, and renegotiation or rejection of
leases underlying unprofitable locations will further bolster this
improving trend.
RECOVERY ANALYSIS
KEY RECOVERY RATING ASSUMPTIONS
- The recovery analysis assumes that WeWork would be reorganized as
a going-concern (GC) in bankruptcy rather than liquidated;
- Fitch has assumed a 10% administrative claim.
Going Concern (GC) Approach
- The GC EBITDA estimate reflects Fitch's view of a sustainable,
post-reorganization EBITDA level upon which Fitch basesr the
valuation of the company;
- Fitch estimates WeWork's GC EBITDA by assuming a substantially
smaller footprint of continuing operations in line with the
assumptions regarding rejected leases. Fitch assumes 60% of current
domestic revenue and 40% of non-domestic revenue, resulting in
approximately $1.5 billion. Using a normalized 30% location gross
margin and an estimate of restructured overhead expense of
approximately $200 million results in an EBITDA margin of
approximately 16% or $250 million.
Enterprise Value (EV) Multiple Approach
An EV multiple of 5x is used to calculate a post-reorganization
valuation. The estimate considered the following factors:
- The historical bankruptcy exit multiple for companies WeWork's
sector ranged from 4x-7x, with a median reorganization multiple of
6x;
- Current EV multiples of public companies in the Business Services
sector trade well above the historical reorganization range. The
median forward EV multiple for this sector is about 10x. Historical
multiples ranged from 6x-12x;
- WeWork does have unique characteristics that would allow for a
higher multiple given its unique brand and stake in joint
ventures;
- However, uncertainty surrounding WeWork's business model and the
high degree of strategy and execution risk leads Fitch to utilize a
recovery multiple that is below the sector median.
RATING SENSITIVITIES
Rating sensitivities are not applicable given the company's Chapter
11 bankruptcy filing.
LIQUIDITY AND DEBT STRUCTURE
To address liquidity during the bankruptcy process, the company
arranged for a senior secured, debtor-in-possession (DIP) cash
collateralized LOC facility in an aggregate amount not to exceed
$750 million. Any amount drawn on the LC DIP facility in excess of
$100 million will be converted to equity. Amounts drawn up to $100
million will be rolled into a new first-lien exit facility upon the
company's emergence from bankruptcy. The terms of the DIP facility
are subject to judicial approval.
ISSUER PROFILE
WeWork provides space and amenities for today's hybrid and flexible
workforces. The company also markets technology for managing
workspace that can be used by landlords or tenants. WeWork has more
than 700 locations in 39 countries, which members access either on
an all-access basis or by a physical location.
ESG CONSIDERATIONS
WeWork has an ESG Relevance Score of '4' for Management Strategy
due to ongoing challenges to implement a strategy to achieve
sustainable profitability, which has a negative impact on the
credit profile, and is relevant to the rating[s] in conjunction
with other factors.
WeWork has an ESG Relevance Score of '4' for Governance Structure
due to SoftBank ownership concentration, which has a negative
impact on the credit profile, and is relevant to the rating[s] in
conjunction with other factors.
WeWork has an ESG Relevance Score of '4' for Group Structure due to
the complexity of its structure and related-party transactions with
SoftBank, which has a negative impact on the credit profile, and is
relevant to the rating[s] in conjunction with other factors.
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Recovery Prior
----------- ------ -------- -----
WeWork Inc. LT IDR D Downgrade RD
WeWork Companies
LLC LT IDR D Downgrade RD
senior
unsecured LT C Affirmed RR6 C
Senior Secured
2nd Lien LT C Affirmed RR6 C
senior secured LT C Downgrade RR4 CC
WEWORK INC: Seeks Cash Collateral Access
----------------------------------------
WeWork Inc. and affiliates ask the U.S. Bankruptcy Court for the
District of New Jersey for authority to use cash collateral and
provide adequate protection.
The Debtors require the use of cash collateral to satisfy payroll,
pay landlords and vendors, support member programs, meet overhead
obligations, and to make payments that are necessary for the
continued management, operation, and preservation of the Debtors’
business and international portfolio obligations.
WeWork, despite its growth and cost reduction, has faced challenges
due to rising interest rates, changing commercial real estate, a
slower return to the office, and customer attrition. In the second
half of 2023, the Debtors engaged professionals and stakeholders to
negotiate a comprehensive restructuring transaction to right-size
their balance sheet and position them for long-term success. The
Debtors and the Consenting Stakeholders reached agreements such as
a forbearance agreement, satisfaction letter, restructuring support
agreement, and terms for using cash collateral in chapter 11. These
agreements extend the Debtors' liquidity runway, provide a
comprehensive financial and operational restructuring, and allow
them to continue using cash collateral consensually. As of the
Petition Date, the Debtors have approximately $164 million of cash
on hand.
As of the Petition Date, the Debtors have approximately $4.2
billion in aggregate outstanding principal and accrued interest for
funded debt obligations.
LC Facility:
Goldman Sachs International Bank, OneIM Fund I LP, and other
financial institutions have issued letters of credit on behalf of
the Debtors pursuant to the Credit Agreement dated December 27,
2019, by and among the Issuing Banks, WeWork Companies U.S.LLC,
SoftBank Vision Fund II-2 L.P., Goldman as the administrative and
collateral agent for the senior tranche, Kroll Agency Services
Limited as the administrative agent for the junior tranche, and the
other parties from time to time thereto. The SVF Obligor is
subrogated to the Issuing Banks' and other secured parties' rights
against the WeWork LC Facility Obligor if the SVF Obligor pays,
reimburses, or cash collateralizes obligations under the LC
Facility. The obligations under the LC Facility and certain cash
management and swap/derivative obligations are secured by the
assets and equity interests of certain Debtor entities. The SVF
Obligor has also secured such obligations by collaterally assigning
its right to call up to approximately $2.5 billion in capital from
SoftBank.
As of the Petition Date, and in connection with the Satisfaction
Letter executed by the WeWork LC Facility Obligor, the SVF Obligor,
Goldman, Kroll, and certain of the Issuing Banks including Goldman
and OneIM, the SVF Obligor reimbursed approximately $179.5 million
for the senior tranche of the LC Facility and approximately $542.6
million for the junior tranche of the LC Facility, posted
approximately $808.8 million of cash collateral for the undrawn
senior tranche of the LC Facility, and paid approximately $50.6
million for various fees and expenses under the LC Facility Credit
Agreement. As of the Petition Date and pursuant to the Prepetition
Reimbursement Agreement, the WeWork LC Facility Obligor’s total
indebtedness to the SVF Obligor in its capacity as subrogee under
the LC Facility with respect to such reimbursement, cash
collateral, and other payments is not less than approximately $1.6
billion.
1L Notes:
Pursuant to the First Lien Senior Secured PIK Notes Indenture,
dated as of May 5, 2023, by and among WeWork Companies U.S. LLC and
WW Co-Obligor Inc. as the co-issuers, the guarantors party thereto,
and U.S. Bank Trust Company, National Association, as trustee and
collateral agent, the Company issued $1.1 in aggregate principal
amount of 1L Notes. As of the Petition Date, the Debtors are liable
for approximately $1.1 million in outstanding aggregate principal
amount of the 1L Notes, plus approximately $151.1 million on
account of accrued and unpaid interest plus all other fees and
expenses on account of the 1L Notes.
2L Notes:
Pursuant to the Second Lien Senior Secured PIK Notes Indenture,
dated as of May 5, 2023, by and among the Note Issuers, the Notes
Guarantors, and U.S. Bank Trust Company, National Association, as
trustee and collateral agent, the Company issued $687.212 million
in aggregate principal amount of 11% Second Lien Senior Secured PIK
Notes due 2027 to the New Money Participants in connection with the
Notes Exchange Transactions. As of the Petition Date, the Debtors
are liable for approximately $687.212 million in outstanding
aggregate principal amount of the 2L Notes, plus approximately
$45.8 million on account of accrued and unpaid interest plus all
other fees and expenses (including make-whole premiums) on account
of the 2L Notes.
2L Exchangeable Notes:
Pursuant to the Second Lien Exchangeable Senior Secured PIK Notes
Indenture, dated as of May 5, 2023, by and among the Note Issuers,
the Notes Guarantors, and U.S. Bank Trust Company, National
Association, as trustee and collateral agent, the Company issued
$187.5 million in aggregate principal amount of 11% Second Lien
Senior Secured PIK Exchangeable Notes due 2027 to an affiliate of
SoftBank in connection with the Notes Exchange Transactions. As of
the Petition Date, the Debtors are liable for approximately $187.5
million in outstanding aggregate principal amount, plus
approximately $12.5 million on account of accrued and unpaid
interest plus all other fees and expenses on account of the 2L
Exchangeable Notes.
3L Notes:
Pursuant to that certain Third Lien Senior Secured PIK Notes
Indenture, dated as of May 5, 2023, by and among the Note Issuers,
the Notes Guarantors, and U.S. Bank Trust Company, National
Association, as trustee and collateral agent, the Company issued
$22.7 million in aggregate principal amount of 12.00% Third Lien
Senior Secured PIK Notes due 2027 in connection with the Notes
Exchange Transactions. As of the Petition Date, the Debtors are
liable for approximately $22.7 million in outstanding aggregate
principal amount, plus approximately $1.6 million on account of
accrued and unpaid interest plus all other fees and expenses
(including make-whole premiums) on account of the 3L Notes.
3L Exchangeable Notes:
Pursuant to the Third Lien Exchangeable Senior Secured PIK Notes
Indenture, dated as of May 5, 2023, by and among the Note Issuers,
the Notes Guarantors, and U.S. Bank Trust Company, National
Association, as trustee and collateral agent, the Company issued
$269.625 million in aggregate principal amount of 12% Third Lien
Senior Secured PIK Exchangeable Notes due 2027 to an affiliate of
SoftBank in connection with the Notes Exchange Transactions. As of
the Petition Date, the Debtors are liable for approximately
$269.625 million in outstanding aggregate principal amount, plus
approximately $19.5 million on account of accrued and unpaid
interest plus all other fees and expenses on account of the 3L
Exchangeable Notes.
Unsecured Notes:
Holders of the 7.875% Senior Notes due 2025 and the 5.000% Senior
Notes due 2025, Series II who did not participate in the Notes
Exchange Transactions continue to hold Unsecured Notes. As of the
Petition Date, the Debtors are liable for approximately $164
million in outstanding aggregate principal amount, plus
approximately $6.6 million on account of accrued and unpaid
interest, plus all other fees and expenses on account of the 7.875%
Senior Notes, and approximately $9.3 million in outstanding
aggregate principal amount, plus approximately $123,000 on account
of accrued and unpaid interest, plus all other fees and expenses on
account of the 5.000% Senior Notes.
Equity:
WeWork Inc.'s certificate of incorporation authorizes the Board to
issue 4,874,958,334 shares of Class A common stock, par value
$0.0001 per share, 25,041,666 shares of Class C common stock, par
value $0.0001 per share, and 100 million shares of preferred stock.
Approximately 52.83 million Common Shares and approximately 497,000
shares of Class C common stock are outstanding as of the Petition
Date.
The Debtors propose to provide the Prepetition Secured Parties with
a variety of forms of adequate protection to protect against the
postpetition diminution in value of their Prepetition Collateral,
including cash collateral.
A copy of the motion is available at ttps://urlcurt.com/u?l=fso5nl
from PacerMonitor.com.
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: SoftBank, 3 Others Hold 73.5% of Class A Shares
-----------------------------------------------------------
In a Schedule 13D/A filed with the Securities and Exchange
Commission, these entities reported beneficial ownership of shares
of Class A common stock of WeWork Inc. as of Oct. 30, 2023:
Shares Percent
Beneficially of
Reporting Person Owned Class
SVF II WW Holdings (Cayman) Limited 36,553,696 68.3%
SVF II WW (DE) LLC 37,079,456 68.8%
SVF II Holdings (DE) LLC 37,079,456 68.8%
SVF II Aggregator (Jersey) L.P. 46,597,499 73.5%
SoftBank Vision Fund II-2 L.P. 46,597,499 73.5%
SB Global Advisers Limited 46,597,499 73.5%
SoftBank Group Corp. 46,597,499 73.5%
A full-text copy of the regulatory filing is available for free
at:
https://www.sec.gov/Archives/edgar/data/1813756/000119312523268245/d548655dsc13da.htm
About WeWork Inc.
New York, NY-based WeWork Inc. (NYSE: WE) -- wework.com -- is a
global flexible workspace provider, serving a membership base of
businesses large and small through its network of 779 Systemwide
Locations, including 622 Consolidated Locations as of December
2022.
WeWork reported a net loss of $2.29 billion for the year ended
Dec.31, 2022, a net loss of $4.63 billion for the year ended Dec.
31, 2021, a net loss of $3.83 billion in 2020, and a net loss of
$3.77 billion in 2019. As of Dec. 31, 2022, the Company had $17.86
billion in total assets, $21.31 billion in total liabilities, and a
total deficit of $3.43 billion.
YOUNG POULTRY: Robert Byrd Named Subchapter V Trustee
-----------------------------------------------------
David Asbach, Acting U.S. Trustee for Region 5, appointed Robert
Byrd, Esq., at Byrd & Wiser, as Subchapter V trustee for Young
Poultry Farm, LLC.
Mr. Byrd will be paid an hourly fee of $275 for his services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. Byrd declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Robert A. Byrd, Esq.
Byrd & Wiser
P.O. Drawer 1939
Biloxi, MS 39533
Phone: (228) 432-8123
Fax: (228) 432-7029
Email: rab@byrdwiser.com
About Young Poultry
Young Poultry Farm, LLC, a company in Collinsville, Miss., filed a
petition under Chapter 11, Subchapter V of the Bankruptcy Code
(Bankr. S.D. Miss. Case No. 23-02495), with $1 million to $10
million in both assets and liabilities. Louis Clay Young, member,
signed the petition.
Judge Jamie A. Wilson oversees the case.
Douglas M. Engell, Esq., at Doug Engll represents the Debtor as
legal counsel.
*********
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