/raid1/www/Hosts/bankrupt/TCR_Public/240401.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, April 1, 2024, Vol. 28, No. 91
Headlines
303 INVESTMENTS: Amends Collegiate Peak Banks Secured Claim Pay
407 HIGHLAND: Christine Brimm Named Subchapter V Trustee
AC FABRICATION: Seeks to Hire RHM Law LLP as Bankruptcy Counsel
ALANDALOUS PROPERTIES: Seeks to Tap Lewis W. Siegel as Attorney
ALGOMA STEEL: Fitch Assigns 'B' LongTerm IDR, Outlook Stable
ALLIED CORP: Santiago Ribero Quits as Director
ALLIED CORP: Transfers Headquarters to 460 Doyle Ave, Kelowna, BC
ALVARIA INC: Reportedly Has Restructuring Deal With Lenders
ASCEND PERFORMANCE: Moody's Cuts CFR to 'B1', Outlook Negative
ATRIX TRUCKING: Unsecureds to Get $50K Over 5 Years in Plan
BAYOU CITY SMILES: Tom Howley Named Subchapter V Trustee
BOWFLEX INC: Court OKs Bid Rules for Sale of Assets
BRIGANTI ENTERPRISE: Taps Michael Jay Berger as Bankruptcy Counsel
CACTUS LAND: Seeks Approval to Hire Cactus Land as Closing Agent
CAPITAL TACOS: Kathleen DiSanto Named Subchapter V Trustee
CAREPOINT HEALTH: Hires Insight for Help With Finances
CENERGY LLC: Hires Acquisition Realty & Development as Broker
CHAMP ACQUISITION: Moody's Affirms 'B2' CFR, Outlook Stable
CHARGE ENTERPRISES: Hires Berkeley Research as Financial Advisor
CHARGE ENTERPRISES: Hires Piper Sandler & Co. as Investment Banker
CHATEAU CREOLE: Voluntary Chapter 11 Case Summary
CLEAN & FRESH: Unsecureds Will Get 6% of Claims over 3 Years
CMG MEDIA: Moody's Lowers CFR to Caa1 & Alters Outlook to Negative
COGECO COMMUNICATIONS: DBRS Gives BB(high) Rating on Sr. Notes
CORNERSTONE PSYCHOLOGICAL: F. Schwieg Named Subchapter V Trustee
CRUSH WINE: Seeks to Hire Kutner Brinen Dickey as Legal Counsel
CUMULUS MEDIA: In Talks With Creditors Over Debt Deal
CURO GROUP: Gets $70 Million DIP Financing
D&S ENTERPRISES: Fine-Tunes Plan Documents
DAY ONE: Seeks to Hire Haselden Farrow as Bankruptcy Counsel
DISTRICT 9 BREWING: Voluntary Chapter 11 Case Summary
DYNASTY ACQUISITION: Moody's Affirms 'B3' CFR, Outlook Stable
ELEMENT CONSTRUCTION: Seeks to Sell Lainey Lane Property by Auction
EMERALD TECHNOLOGIES: BlackRock DLC Marks $195,123 Loan at 28% Off
ENDO INTERNATIONAL: Plan to Slash $5 Billion Debt Confirmed
ENGINEERED INVESTMENTS: Unsecureds to be Paid in Full in Plan
FARM CUP: Seeks to Hire RHM Law LLP as Bankruptcy Counsel
FIRSTENERGY CORP: Moody's Ups Rating on Unsecured Notes From Ba1
FIVE RIVERS: Examiner Taps Schuil Ag Real Estate as Broker
FTX GROUP: Fee Examiner Seeks to Give Sullivan $31-Mil. in Fees
FTX GROUP: Investors Dash to Buy Shares as Victims Recovery Seen
FTX GROUP: Luxury Jet Used by SBF, Associates Seized by Feds
FTX GROUP: Probe to Investigate Sullivan Tainted by Conflicts
FULLER AND FULLER: Taps Jason Ward Law as Bankruptcy Counsel
GAP INC: S&P Alters Outlook to Stable, Affirms 'BB' ICR
GBT JERSEYCO: S&P Places 'B+' ICR on Watch Positive on CWT Deal
GENESEE & WYOMING: S&P Downgrades ICR to 'BB' on Elevated Leverage
GOL LINHAS: Dechert LLP Updates List of Abra Noteholders
GRAY TELEVISION: S&P Alters Outlook to Negative, Affirms 'B+' ICR
GREAT NORTHERN: Hires Scouler Kirchhein as Financial Advisor
GREAT NORTHERN: Taps Sylvia & Kishfy as Legal Counsel
HAMMER FIBER: Posts $13K Net Income in Second Quarter
HIGH PLAINS RADIO: Files for Chapter 11 Bankruptcy
HORNBLOWER HOLDINGS: Seeks to Hire Guggenheim as Investment Banker
HUTCHINSON REGIONAL: Moody's Affirms 'Ba2' Revenue Bond Rating
IMPRIVATA INC: S&P Rates New $1.1BB First-Lien Term Loan B 'B-'
INGEVITY CORP: Moody's Alters Outlook on 'Ba2' CFR to Negative
INGRAM MICRO: Moody's Affirms 'Ba3' CFR, Outlook Stable
INSTANT BRANDS: Hughes Watters & Sternklar Disclose Claimants
ITTELLA INTERNATIONAL: Amends Plan; Confirmation Hearing May 8
JER INVESTORS: Amends Junior Subordinated Note Claims Pay
JM4 TACTICAL: Unsecureds to Get $1K per Month for 60 Months
KALO CLINICAL: Seeks to Hire Ordinary Course Contractors
KPM INVESTMENT: Voluntary Chapter 11 Case Summary
LATHAM POOL: Moody's Lowers CFR to B2 & Alters Outlook to Stable
LAXMI CAPITAL: Case Summary & 18 Unsecured Creditors
LIQUID TECH: Moody's Affirms 'B3' CFR & Alters Outlook to Positive
LIQUID TECH: S&P Alters Outlook to Positive, Affirms 'B-' ICR
LUXURY FLUSH: Seeks to Hire Fox Law Corporation as Legal Counsel
MAGNOLIA SENIOR LIVING: Seeks to Hire Jones & Walden as Counsel
MAGNOLIA SENIOR: Seeks to Hire Jones & Walden as Legal Counsel
MAGNOLIA SENIOR: Tamara Miles Ogier Named Subchapter V Trustee
MARTIN MIDSTREAM: S&P Upgrades ICR to 'B' on Decreasing Leverage
MATADOR RESOURCES: Fitch Rates New Unsecured Notes Due 2032 'BB-'
MGM RESORTS: Fitch Assigns 'BB-' LongTerm IDR, Outlook Stable
MISSOULA OVERSTOCK: Voluntary Chapter 11 Case Summary
MOJITO CLUB: Tarek Kiem of Kiem Law Named Subchapter V Trustee
NATIONAL MENTOR: Moody's Alters Outlook on 'Caa1' CFR to Positive
NICA REPAIRS: Jodi Dubose of Stitcher Named Subchapter V Trustee
OCEAN POWER: Secures $1.5M in Purchase Orders for WAM-V USV's
ORTHOCARE SOLUTIONS: Unsecureds Will Get 26% of Claims in Plan
OVERSTOCKED MATTRESS: Voluntary Chapter 11 Case Summary
PATTERN ENERGY: S&P Affirms 'BB-' ICR, Outlook Stable
PETAWATT PROPERTIES: Case Summary & 20 Largest Unsecured Creditors
POET TECHNOLOGIES: Incurs $20.3 Million Net Loss in 2023
PROMETHEUS INNOVATION: Hearing to Approve Bid Rules Set for April 2
RACKSPACE TECHNOLOGY: Amends Terms of Exchange Offer
RADNET MANAGEMENT: Moody's Ups CFR to B1 & 1st Lien Revolver to Ba3
RAOCORE TECHNOLOGY: Unsecureds Will Get 100% over 60 Months
RAPSYS INC: William Avellone Named Subchapter V Trustee
RODGERS COMPANIES: Case Summary & Six Unsecured Creditors
ROYALE ENERGY: Delays Filing of 2023 Annual Report
SCRIPPS (E.W.): Moody's Cuts CFR to B3 & Senior Secured Debt to B2
SOLFIRE CONTRACT: Taps Burt Blee Dixon as Bankruptcy Counsel
SONIDA SENIOR: Incurs $21.1 Million Net Loss in 2023
SONOMA PHARMACEUTICALS: Gets Extension to Regain Nasdaq Compliance
SPD II MAKAIWA: Secured Lender Files Plan and Disclosure Statement
SRS DISTRIBUTION: Moody's Reviews 'B3' CFR Amid Home Depot Deal
STALWART PLASTICS: Case Summary & 20 Largest Unsecured Creditors
SUNPOWER CORP: Gets Nasdaq Notice for Delayed Form 10-K Filing
TEGNA INC: S&P Affirms 'BB+' Issuer Credit Rating, Outlook Stable
TLC TRAVEL STAFF: Hits Chapter 11 Bankruptcy Protection
TPT GLOBAL: Delays Filing of 2023 Annual Report
TPT GLOBAL: Forges Strategic Marketing Partnership With Legacy Team
TRIPLE 7: Seeks to Hire Sasser Law Firm as Bankruptcy Counsel
TURKEY LEG HUT: Owners File for Chapter 11 Bankruptcy Protection
UNITED NATURAL: Moody's Lowers CFR to B3 & Unsecured Notes to Caa2
UPHEALTH INC:Releases Corporate Update, 2023 Financial Results
WALLAROO'S FURNITURE: Voluntary Chapter 11 Case Summary
WALLAROO'S FURNITURE: Voluntary Chapter 11 Case Summary
WASTE PRO: Moody's Affirms 'B3' CFR & Alters Outlook to Positive
[*] Commercial Chapter 11 Filings Rise 118% in February 2024
[^] BOND PRICING: For the Week from March 25 to 29, 2024
*********
303 INVESTMENTS: Amends Collegiate Peak Banks Secured Claim Pay
---------------------------------------------------------------
303 Investments, Inc., submitted a Third Amended Subchapter V Plan
of Reorganization dated March 25, 2024.
The Debtor's bankruptcy case was filed because creditor MS Man Debt
("MMD"), LLC filed a lis pendens on all of its real property
holdings, bringing property development and sales and the Debtor's
cash flow to a halt.
On July 10, 2023, the Debtor filed its Motion to Approve
Stipulation with MMD. One creditor, Collegiate Peaks Bank ("CPB"),
has objected to the proposed settlement. The Debtor and MMD have
revised the settlement as a part of an effort to reach a consensual
plan of reorganization. The settlement, as revised, with MMD has an
impact upon the bankruptcy estate, its creditors and the assets of
the estate.
The pertinent terms of the settlement are as follows:
* The Debtor shall transfer seven Debtor properties, Lots 1,
10, 11, 22, 23, 24, and 25 (the "303 Transferred Lots"), to MMD.
The 303 Transferred Lots shall be transferred subject to all liens,
claims, and encumbrances.
* At the closing of the sale of a Lots 8, 9, 26, and 30 from
the Debtor to a third party, the Debtor shall pay MMD $10,000.00
from the proceeds of each sale, ultimately providing for the
payment of $40,000.00. The Debtor consents to the $40,000.00 being
deemed a judgment lien against Lots 8, 9, 26 and 30, collectively,
via the confirmed Amended Plan. The $10,000.00 shall be paid to MMD
immediately following the payment of all secured interests on Lots
8, 9, 26 and 30, and prior to any equity being disbursed to Debtor
and/or Myers. If the proceeds from the sale of any one of the
Debtor Retained Lots are insufficient to cover the $10,000.00
payment in whole or in part, the deficiency shall be added to the
amount to be paid from the Debtor Retained Lots 8, 9, 26 or 30,
until MMD is paid the entirety of the $40,000.00. If the secured
creditor for lot 26 becomes the owner of the property before its
sale by the Debtor or MMD is paid $10,000 on account of lot 26,
then the Debtor shall pay $13,333.33 per lot from the sale of Lots
8, 9, and 30.
* The Debtor has already, pursuant to Bankruptcy Court order
sold lot 2 (5208 Freddy's Trail), and MMD, though its counsel, is
holding in trust $45,000, which $45,000 MMD shall retain and shall
not be credited against the $40,000.
* Of the seven building permits remaining with respect to the
303 Transferred Lots and the 303 Sold Lots, MMD shall be entitled
to all seven. The Debtor shall not be liable if the County issues
any of the seven Building Permits to a party other than MMD or if
the county refuses to issue a Building Permit.
* The Debtor and MMD are granting each other general mutual
releases.
Class 3(b) consists of the Claim of Collegiate Peak Banks or its
successors and assigns (5424 Freddy's Trail). The Class 3(b)
Allowed Secured Claim shall be treated under this Plan as follows:
The Class 3(b) Secured Claim shall be allowed in the full amount
due and owing under the Note, Deed of Trust and other loan and
security document with respect to the property located at 5424
Freddy's Trail.
* Pursuant to Section 506 of the Bankruptcy Code, the Class
3(b) Claim is secured up to the value of the collateral and is
unsecured as to the balance which balance shall be treated as a
Class 8(b) unsecured claim.
* The Class 3(b) Allowed Secured Claim shall be satisfied from
the Sale Proceeds from the sale of the 5424 Freddy's Trail property
in the order of its priority and to the extent sale proceeds
exist.
* The Class 3(b) Allowed Secured Claim shall accrue interest
at the non-default rate under the applicable loan documents, costs
and fees.
* The Class 3(b) claimant is enjoined and barred from taking
any action to collect upon its Claim and shall not take action
against the 5424 Freddy's Trail property for a period of twelve
months from the Effective Date of the Plan. If the Class 3(b)
claimant does not receive the Sale Proceeds from the 5424 Freddy's
Trail property within the twelve-month period then it can take
action only against the property to satisfy its Allowed Secured
Claim.
Like in the prior iteration of the Plan, Class 8(a) consists of the
general unsecured creditors of the Debtor who hold Allowed Claims
arising from personal guaranties made by the Debtor which
obligations are secured by property of the Debtor. Class 8(a)
claimants shall receive a distribution from the Sale Proceeds from
the property or properties in which the Class 8(a) claimant has a
lien. To the extent there is insufficient Sale Proceeds to satisfy
the Class 8(a) claimant in full, the balance shall be treated as a
Class 8(b) Claim.
Class 8(b) consists of the general unsecured creditors of the
Debtor who hold Allowed Claims not arising from personal guaranties
of the Debtor that is secured by property of the Debtor. Class 8(b)
Allowed Claims shall share on a Pro Rata basis in the Net Sale
Proceeds after the satisfaction of Allowed Administrative Claims.
Upon the Effective Date of the Plan, the Debtor shall take all
steps necessary to generate Sale Proceeds/Net Sale Proceeds and
commence completion of construction and sale of the Debtors' real
property assets. The Debtor may retain such professionals,
contractors, subcontractors and employees as it deems necessary to
generate the Sale Proceeds/Net Sale Proceeds, including real estate
professionals and attorneys.
The Debtor, as a part of generating the Sale Proceeds/Net Sale
Proceeds, can borrow monies and encumber such assets as the Debtor
determines is necessary to develop and/or improve the properties
for sale. The Debtor may not encumber the assets of the Debtor for
any other purpose except the development and improvement of the
properties. The Debtor shall not encumber any property with a lien
except to take a secured loan for which the proceeds will be used
to improve such property. The Debtor shall only sell a property
through the listing by a broker negotiated at arm's length.
A full-text copy of the Third Amended Plan dated March 25, 2024 is
available at https://urlcurt.com/u?l=AIrEBU from PacerMonitor.com
at no charge.
Attorneys for Debtor:
Aaron A. Garber, Esq.
Wadsworth Garber Warner Conrardy, P.C.
2580 West Main Street, Suite 200
Littleton, CO 80120
Telephone: (303) 296-1999
Telecopy: (303) 296-7600
Email: agarber@wgwc-law.com
About 303 Investments
303 Investments, Inc., a company in Parker, Colo., filed a petition
under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. D.
Colo. Case No. 22-14267) on Nov. 1, 2022, with $10 million to $50
million in assets and $500,000 to $1 million in liabilities. Alison
Goldenberg has been appointed as Subchapter V trustee.
Judge Joseph G. Rosania, Jr., oversees the case.
The Debtor is represented by Aaron A. Garber, Esq., at Wadsworth
Garber Warner Conrardy, P.C.
407 HIGHLAND: Christine Brimm Named Subchapter V Trustee
--------------------------------------------------------
Gerard Vetter, Acting U.S. Trustee for Region 4, appointed
Christine Brimm, Esq., as Subchapter V trustee for 407 Highland Dr,
LLC.
Ms. Brimm, a practicing attorney in Myrtle Beach, S.C., will be
paid an hourly fee of $350 for her services as Subchapter V trustee
and an hourly fee of $150 for paralegal services. In addition, the
Subchapter V trustee will receive reimbursement for work-related
expenses incurred.
Ms. Brimm declared that she is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Christine E. Brimm
P.O. Box 14805
Myrtle Beach, SC 29587
Telephone: 803-256-6582
Email: cbrimm@bartonbrimm.com
About 407 Highland Drive
407 Highland Drive, LLC filed a petition under Chapter 11,
Subchapter V of the Bankruptcy Code (Bankr. D. S.C. Case No.
24-00982) on March 18, 2024, with up to $50,000 in assets and up to
$500,000 in liabilities.
Judge Elisabetta Gm Gasparini presides over the case.
AC FABRICATION: Seeks to Hire RHM Law LLP as Bankruptcy Counsel
---------------------------------------------------------------
AC Fabrication, Inc. seeks approval from the U.S. Bankruptcy Court
for the Central District of California to employ RHM Law LLP as its
general bankruptcy counsel.
The firm's services include:
a. advise and assist regarding compliance with the
requirements of the United States Trustee;
b. advise regarding matters of bankruptcy law, including the
rights and remedies of the Debtor with respect to its assets and
the claims of creditors;
c. advise regarding cash collateral matters;
d. examine witnesses, claimants or adverse parties and prepare
reports, accounts and pleadings;
e. advise concerning the requirements of the Bankruptcy Code
and applicable rules;
f. negotiate, formulate and implement a Chapter 11 plan of
reorganization; and
g. make any appearances in the Bankruptcy Court on behalf of
the Debtor; and to take such other action and to perform such other
services as the Debtor may require.
The firm will be paid at these rates:
Partners $600 to $650 per hour
Associates $400 per hour
Paralegals $135 per hour
In addition, the firm will receive reimbursement for out-of-pocket
expenses incurred.
The retainer fee is $21,738.
Roksana Moradi-Brovia, Esq., a partner at RHM Law, disclosed in a
court filing that the firm is a "disinterested person" pursuant to
Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Roksana D. Moradi-Brovia, Esq.
Matthew D. Resnik, Esq.
RHM LAW, LLP
17609 Ventura Blvd., Suite 314
Encino, CA 91316
Tel: (818) 285-0100
Fax: (818) 855-7013
Email: roksana@RHMFirm.com
matt@RHMFirm.com
About AC Fabrication, Inc.
AC Fabrication, Inc. is a machine shop in Simi Valley, California.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. C.D. Cal. Case No. 24-10191) on February
22, 2024. In the petition signed by Anthony Chaghlassian, chief
executive officer, the Debtor disclosed up to $1 million in assets
and up to $10 million in liabilities.
Judge Ronald A Clifford III oversees the case.
Matthew D. Resnik, Esq., at RHM LAW, LLP, represents the Debtor as
legal counsel.
ALANDALOUS PROPERTIES: Seeks to Tap Lewis W. Siegel as Attorney
---------------------------------------------------------------
Alandalous Properties Corp. seeks approval from the U.S. Bankruptcy
Court for the Eastern District of New York to employ Lewis W.
Siegel, Esq., an attorney serving White Plains, NY.
The firm will render these services:
(a) provide legal advice with respect to its duties and powers
under Chapter 11;
(b) prepare and file documents required by the Bankruptcy Code
and this Court, including, the Schedules and Statement of Financial
Affairs required under Bankruptcy Code Sec. 521, and a plan of
reorganization pursuant to Chapter 11;
(c) provide such other legal services as may be required by
Debtor to comply with its responsibilities under the Bankruptcy
Code and such requests as may be made by the Trustee for the case,
including, the negotiation with creditors on the terms of a plan of
reorganization.
Mr. Siegel's billing rate is $550 per hour.
Mr. Siegel received a retainer of $10,000 plus the $1,738 filing
fee.
Mr. Siegel assured the court that he represents no interest
actually adverse to the estate in the matters upon which he is to
be engaged.
Mr. Siegel can be reached at:
Lewis W. Siegel, Esq.
60 East 42nd Street - Suite 4000
New York, NY 10165
Telephone: (212) 286-0010
FaCsimile: (212) 884-9586
Email: Info@LWSEsq.com
About Alandalous Properties Corp.
Alandalous Properties is primarily engaged in renting and leasing
real estate properties. The Debtor owns Condo Unit C-1, 24 located
at West 45 Street, NY 10036 - estimated value $2,500,000.
Alandalous Properties Corp. filed its voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.Y. Case No.
24-40623) on February 9, 2024, listing $2,500,500 in assets and
$2,819,145 in liabilities. The petition was signed by Alami Binani
as president.
Judge Elizabeth S. Stong presides over the case.
Lewis W. Siegel, Esq. at LEWIS W. SIEGEL represents the Debtor as
counsel.
ALGOMA STEEL: Fitch Assigns 'B' LongTerm IDR, Outlook Stable
------------------------------------------------------------
Fitch Ratings has assigned Algoma Steel Group Inc. and Algoma Steel
Inc. first-time 'B' Long-Term Issuer Default Ratings (IDRs). The
Rating Outlook is Stable. Fitch has also assigned 'BB'/'RR1'
ratings to Algoma Steel Inc.'s 1st lien secured ABL credit facility
and 'BB-'/'RR2' ratings to its new USD350 million 2nd lien senior
secured notes due 2029.
The ratings reflect Algoma's relatively small size and the
heightened operational risk of operating a single blast furnace
facility. This is offset by the company's strategy of transitioning
to an electric arc furnace (EAF) facility which lowers costs and
capital intensity. The ratings also reflect Fitch's expectation for
adequate liquidity, low financial leverage and minimal execution
risk to complete the project and fund associated capex for the new
EAF.
KEY RATING DRIVERS
EAF Transition Positive: Fitch views Algoma's strategy of
transitioning to an electric arc furnace facility (EAF) from a
blast furnace facility as positive. EAFs have a highly variable
cost structure, are less capital intensive, and are often lower
cost than blast furnaces. The new EAF project is comprised of two
facilities, which reduces operational risk from a single facility
operation.
The company is approximately CAD510 million through its project
budget of approximately USD788 million for the new EAF facility.
Fitch views liquidity as adequate to complete the project and views
execution risk as minimal as the company has most contracts for the
associated capex on fixed price terms.
Single Facility Producer: Algoma is a relatively small steel
producer with around 2.8 million tons of annual capacity. The
company has one operational blast furnace facility and ships
primarily sheet steel to customers in the U.S. and in Canada.
Flat-rolled sheet products accounted for 91% of FY23 total sales.
Fitch views Algoma's product concentration as partially offset by
the company's plate mill modernization project, which will increase
plate capacity and improve product diversification.
Iron ore is the primary raw material for blast furnace steel
production. Algoma relies entirely on third parties for its iron
ore requirements, where as other North American steel producers
tend to own a proportion of their primary raw material
requirements. This is partially offset by the company's agreement
with U. S. Steel (BB/Rating Watch Positive), which provides a
surety of supply of iron ore pellets through FY26. Algoma has an
option to extend the agreement to FY27 at its discretion.
The company also has in place an agreement to supply scrap
requirements for its new EAF as it transitions from its blast
furnace operations to an EAF facility where the primary raw
material is scrap.
Conservative Leverage Profile: Fitch forecasts Algoma's EBITDA
leverage, 0.3x as of March 31, 2023, to be sustained below 2.5x
through FY27. This is supported by Algoma's target net leverage
ratio of 1.5x (excluding outstanding ABL debt and government loans)
through the cycle and relatively low outstanding debt. Fitch views
Algoma's moderate financial leverage as prudent given the
heightened operational risk of operating a single blast furnace
facility.
Plate Mill Modernization Positive: Algoma is in the process of
completing a plate mill modernization project that will increase
plate capacity to 700,000 tons from 350,000 tons. Fitch views the
increase in product diversification as positive to the company's
business profile. The investment is expected to be complete in
FY24. Fitch notes that plate products have commanded a premium to
hot rolled coil (HRC) over the past few years, which increases
projected cash flow and provides some product diversification.
DERIVATION SUMMARY
Algoma is significantly smaller, has less product diversification,
and higher operational risk compared with majority blast furnace
producers United States Steel Corporation (BB/Rating Watch
Positive) and Cleveland-Cliffs Inc. (BB-/Stable). Algoma is also
significantly smaller and has less favorable leverage metrics
compared with EAF steel producer Commercial Metals Company
(BB+/Positive Outlook); however, has relatively low financial
leverage.
KEY ASSUMPTIONS
- Relatively flat steel price environment;
- Annual shipments average around 2.3-2.4 million tons from
FY25-FY27;
- EAF begins production in FY25;
- Algoma operates both its blast furnace facility and EAF facility
in FY25 and FY26 as the new EAF is ramping up;
- Blast furnace production ceases in FY27;
- Capex of CAD370 million in FY25, trending toward CAD110 million
in FY27;
- No share repurchases or acquisitions.
RECOVERY ANALYSIS
The recovery analysis assumes that Algoma would be organized as a
going-concern in a bankruptcy rather than liquidated. Fitch has
assumed a 10% administrative claim. Fitch has also assumed a
bankruptcy exit GC EBITDA of CAD200 million. The GC EBITDA estimate
reflects a mid-cycle sustainable EBITDA level upon which the agency
bases the enterprise valuation.
A bankruptcy scenario could occur from some combination of a period
of sustained low steel prices and/or weak demand which results in
low capacity utilization over a sustained period of time and drains
FCF.
Fitch generally applies EBITDA multiples that range from 4.0x-6.0x
for metals and mining issuers, given the cyclical nature of
commodity prices. Fitch applied a 5.0x multiple to the GC EBITDA
estimate to calculate a post-reorganization enterprise value of
CAD900 million after an assumed 10% administrative claim.
The valuation compares with Algoma Steel Inc.'s purchase of
substantially all of the operating assets and select liabilities of
Essar Steel Algoma Inc. for CAD890.7 million.
The allocation of value in the liability waterfall results in a
recovery rating of 'RR1' for the 1st lien secured ABL credit
facility resulting in a 'BB' rating and a recovery rating of 'RR2'
for the 2nd lien secured notes resulting in a 'BB-' rating.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Increase in size resulting in reduced operational risk;
- Increase in product diversification;
- EBITDA leverage sustained below 3.0x;
- Sustained positive FCF.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- EBITDA leverage sustained above 4.0x;
- EBITDA margins sustained below 8%;
- Sustained negative FCF
- Deteriorating liquidity position.
LIQUIDITY AND DEBT STRUCTURE
Sufficient Liquidity: As of Dec. 31, 2023, Algoma had cash and cash
equivalents of CAD94.7 million and CAD331.9 million available under
its USD300 million ABL credit facility due May 2028. The company
had CAD57.3 million of outstanding letters of credit as of Dec. 31,
2023.
ISSUER PROFILE
Algoma Steel Inc. is an integrated blast furnace steel producer of
sheet and plate steel with a single facility located in Sault Ste.
Marie, Ontario, Canada. The company has annual capacity of
approximately 2.8 million tons and is currently in construction of
two new EAFs.
DATE OF RELEVANT COMMITTEE
22 March 2024
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
----------- ------ --------
Algoma Steel Inc. LT IDR B New Rating
senior secured LT BB New Rating RR1
Senior Secured
2nd Lien LT BB- New Rating RR2
Algoma Steel
Group Inc. LT IDR B New Rating
ALLIED CORP: Santiago Ribero Quits as Director
----------------------------------------------
Allied Corp. disclosed in a Form 8-K filed with the Securities and
Exchange Commission that Santiago Ribero resigned as a director of
the Company effective March 20, 2024.
Mr. Ribero has moved to the United States and has taken a position
in the banking industry but will continue to have an active role
with the Company.
About Allied Corp
Headquartered in Kelowna, BC Canada, Allied Corp. is an
international cannabis company with its main production center in
Colombia and is one of the few companies that has exported from
Colombia internationally and was the first company to export
commercial cannabis flower from Colombia.
Houston, TX-based M&K CPAS, PLLC, the Company's auditor since 2022,
issued a "going concern" qualification in its report dated Dec. 14,
2023, citing that the Company has suffered net losses from
operations, has a net capital deficiency, and has minimal revenue
which raises substantial doubt about its ability to continue as a
going concern.
The Company incurred a net loss for the three months ended November
30, 2023 of $836,673, has generated minimal revenue and as at
November 30, 2023 has a working capital deficit of $8,699,414.
These factors raise substantial doubt regarding the Company's
ability to continue as a going concern. The consolidated financial
statements of the Company do not include any adjustments relating
to the recoverability and classification of recorded assets, or the
amounts and classifications of liabilities that might be necessary
should the Company be unable to continue as a going concern. The
Company's ability to continue as a going concern is dependent upon
the Company's ability to raise sufficient financing to acquire or
develop a profitable business. Management intends on financing its
operations and future development activities largely from the sale
of equity securities with some additional funding from other
traditional financing sources, including related party loans until
such time that funds provided by future planned operations are
sufficient to fund working capital requirements.
ALLIED CORP: Transfers Headquarters to 460 Doyle Ave, Kelowna, BC
-----------------------------------------------------------------
Allied Corp. disclosed in a Form 8-K filed with the Securities and
Exchange Commission that effective March 24, 2024, the Company
moved its headquarters to Suite 200 - 460 Doyle Ave Kelowna, BC,
Canada V1Y OC2.
The Company’s telephone number remains the same, phone:
877-255-4337.
About Allied Corp
Headquartered in Kelowna, BC Canada, Allied Corp. is an
international cannabis company with its main production center in
Colombia and is one of the few companies that has exported from
Colombia internationally and was the first company to export
commercial cannabis flower from Colombia.
Houston, TX-based M&K CPAS, PLLC, the Company's auditor since 2022,
issued a "going concern" qualification in its report dated Dec. 14,
2023, citing that the Company has suffered net losses from
operations, has a net capital deficiency, and has minimal revenue
which raises substantial doubt about its ability to continue as a
going concern.
The Company incurred a net loss for the three months ended November
30, 2023 of $836,673, has generated minimal revenue and as at
November 30, 2023 has a working capital deficit of $8,699,414.
These factors raise substantial doubt regarding the Company's
ability to continue as a going concern. The consolidated financial
statements of the Company do not include any adjustments relating
to the recoverability and classification of recorded assets, or the
amounts and classifications of liabilities that might be necessary
should the Company be unable to continue as a going concern. The
Company's ability to continue as a going concern is dependent upon
the Company's ability to raise sufficient financing to acquire or
develop a profitable business. Management intends on financing its
operations and future development activities largely from the sale
of equity securities with some additional funding from other
traditional financing sources, including related party loans until
such time that funds provided by future planned operations are
sufficient to fund working capital requirements.
ALVARIA INC: Reportedly Has Restructuring Deal With Lenders
-----------------------------------------------------------
Reshmi Basu and Eliza Ronalds-Hanno of Bloomberg News report that
Alvaria Inc., a provider of software to call centers, struck a deal
with lenders to raise fresh cash and restructure existing debt,
according to people with knowledge of the agreement.
A group of lenders will provide $78 million in new debt to the Abry
Partners-backed firm, said the people, who asked not to identified
discussing a private matter.
Some of the restructured debt will receive interest that is paid
in-kind instead of cash.
About Alvaria Inc.
Alvaria, Inc., is a business software company with its principal
place of business in Westford, Massachusetts.
ASCEND PERFORMANCE: Moody's Cuts CFR to 'B1', Outlook Negative
--------------------------------------------------------------
Moody's Ratings has downgraded the Corporate Family Rating of
Ascend Performance Materials Operations LLC to B1 from Ba3,
Probability of Default Rating to B1-PD from Ba3-PD. Moody's also
downgraded the rating on the company's backed senior secured term
loan to B1 from Ba3. The outlook remains negative.
"The rating downgrade reflects Ascend's weak credit metrics, with a
leverage ratio of more than 12x over the last twelve months ended
September 2023, driven by significantly lower earnings and modestly
higher debt. While Moody's expect the company's business and
financial performance will improve from the trough level in 2023,
its leverage will remain elevated over the next 12-18 months, which
will no longer support the Ba3 CFR," says Jin Wu, a Moody's Vice
President and Senior Analyst. "The negative outlook reflects the
company's weak credit metrics and the uncertainties on the pace of
its deleveraging, which will hinge on the company's effective cost
reduction and the demand recovery for its Nylon 6,6 chain," adds
Jin.
RATINGS RATIONALE
Ascend's B1 CFR reflects its leading market position in the Nylon
6,6 industry, its vertically integrated production with high entry
barriers particularly for ADN, the key intermediate for Nylon 6,6,
the good growth prospects of its key end markets including growing
application of Nylon 6,6 in EV and electrification.
Such credit strengths are counterbalanced by the company's high
concentration and reliance on the cyclical Nylon 6,6 chain, weak
credit metrics, and the increasing new Nylon chain production
capacities that may lead to direct and product substitutions
risks.
Ascend experienced significant earnings deterioration during 2023,
driven by the substantial customer destocking leading to lower
volume and prices. Moody's estimate its Moody's adjusted EBITDA in
the first three quarters of 2023 fell by more than 60% YOY from the
comparable period in 2022. The company's free cash flow turned
negative with its weak earnings and ongoing CapEx spending that has
led to modestly higher debt. Ascend's leverage, as measured by
Moody's-adjusted debt/EBITDA, rose sharply to more than 12.0x as of
the LTM period ended September 2023, compared with less than 5x in
2022 by Moodys' estimate.
Moody's expects Ascend's business and financial performance will
improve from the 2023 trough level. There has been increasing sales
volume sequentially in late 2023 and early 2024 which suggests the
significant destocking may have ended. The company has also taken
measures in cost cutting and CapEx rationalization which will
support its earning improvement and cash flow recovery. With the
effective execution of its business plan and the modest volume
recovery from the key end markets of its Nylon 6,6 chain, Moody's
expects Ascend will be able to lower its leverage to below 6.0x
with modest positive free cash flow in next 12-18 months. Such
credit metrics will be consistent with the B1 CFR.
Ascend's rating incorporates Moody's expectation that the company
will maintain adequate liquidity. As of September 30, 2023, Ascend
had $176 million of liquidity, including $43 million in cash and
$133 million available under its $500 million asset-based revolving
credit facility with a borrowing base of $415 million, which will
be due on the earlier of 91 days before the term loan maturity
(August 2026) or October 2027. The revolver contains a springing
fixed charge coverage ratio set at 1.00x, which will only be tested
if the availability under the revolver falls below 10% of the
borrowing base. Moody's expects the company to comply with the
covenant. Moody's expects that Ascend's cash on hand, available
revolver and operational cash flows will be sufficient to cover its
cash needs including short term debts and CapEx.
The B1 rating on the company's $1.1 billion senior secured term
loan is in line with the company's B1 CFR, reflecting the
preponderance of the debt in its capital structure, despite its
effective subordination to the $500 million asset-based revolving
credit facility. Moody's ranks the revolver ahead of the term loan
in Moody's Loss-Given Default framework based on its access to more
liquid collateral in a default scenario compared to the Term Loan.
The ABL has a first priority lien on current assets and a second
priority lien on fixed assets. The Term Loan has a first priority
lien on fixed assets and a second priority lien on current assets.
The negative outlook reflects Ascend's weak credit metrics and the
uncertainties around the execution of its deleveraging plan.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Moody's will downgrade the rating if (1) Ascend fails to generate
historical levels of annual EBITDA of around $300 million over the
next 12-18 months, (2) its free cash flow remains negative, (3) its
adjusted leverage ratio (debt/EBITDA) is sustained above 6.0x, or
(4) its liquidity profile materially weakens.
Alternatively, an upgrade of the ratings is unlikely in the near
term but could occur if (1) Ascend consistently generates positive
free cash flow of at least $50 million a year, (2) sustains an
adjusted leverage ratio below 4.0x, and (3) maintains an adequate
liquidity profile.
ESG CONSIDERATIONS
Environmental, social, and governance factors are important factors
influencing Ascend's credit quality, but not a driver of the
actions. Ascend's (CIS-4) score indicates that the rating is lower
than it would have been if ESG risk exposures did not exist. The
score mainly reflects the risks associated with Ascend's elevated
debt level, opportunistic dividends, and investments needed to
improve safety and reliability as well as to reduce air emissions,
waste and pollution from its energy-intensive chemical production
in order to comply with environmental regulations, reduce downtime
and meet customer demands.
Ascend Performance Materials Operations LLC ("Ascend") is an
integrated propylene based producer of Nylon 6,6. SK Titan Holdings
LLC bought the company from Solutia Inc. in 2009 and a small
remaining equity interest in 2011. Headquartered in Houston, Texas,
Ascend generated about $2.5 billion of revenues in the trailing
twelve months ended September 2023.
The principal methodology used in these ratings was Chemicals
published in October 2023.
ATRIX TRUCKING: Unsecureds to Get $50K Over 5 Years in Plan
-----------------------------------------------------------
Atrix Trucking Corp submitted a Second Amended Plan of
Reorganization.
The Debtor is a long-haul over the road and regional trucking
company. The Debtor provides freight hauling throughout the lower
48 states both under its own motor carrier authority and underneath
other motor carriers. As of the date of the Petition Date, the
Debtor operates from 130 Birchwood Drive, Maitland, Florida 32751
which is owned by its principal, Charles E. Joseph.
The Plan under Chapter 11 of the Bankruptcy Code proposes to pay
creditors of the Debtor from the Debtor's current and future
earnings. Unsecured creditors holding allowed claims will receive a
pro-rata share of their allowed claim payable over five years.
Under the Plan, Class 8 consists of General Unsecured Creditors.
The Debtor will pay its projected net disposable income for the
period described in s 1191(c)(2) to pay claimants in this class
with allowed claims. The Debtor presently projects this amount to
be approximately $50,000. Creditors in this class will receive a
pro rata distribution of their claim, without interest, in 20 equal
quarterly distributions, with payments commencing on the start of
the calendar quarter immediately following the Effective Date of
Confirmation and continuing for a total of twenty consecutive
quarters. In the event that this quarter starts less than 30 days
after the entry of the Confirmation Order, payment shall not
commence until the following quarter. Class 8 is impaired.
Current equity will continue to manage the Debtor
post-confirmation. The Plan will be funded by the partial
liquidation of the Debtor's assets as well as the continued
operations of the Debtor.
Attorney for the Debtor:
Buddy D. Ford, Esq.
Jonathan A. Semach, Esq.
Heather M. Reel, Esq.
BUDDY D. FORD, P.A.,
9301 West Hillsborough Avenue
Tampa, FL 33615-3008
Tel: (813) 877-4669
Office Email: All@tampaesq.com
E-mail: Buddy@tampaesq.com
Jonathan@tampaesq.com
Heather@tampaesq.com
A copy of the Disclosure Statement dated Mar.8, 2024, is available
at https://tinyurl.ph/lOUGH from PacerMonitor.com.
About Atrix Trucking Corp.
Atrix Trucking Corp., a company in Maitland, Fla., filed its
voluntary petition for Chapter 11 protection (Bankr. M.D. Fla. Case
No. 23-01540) on April 25, 2023, with $500,000 to $1 million in
assets and $1 million to $10 million in liabilities. Charles E.
Joseph, president of Atrix Trucking, signed the petition.
Judge Grace E. Robson oversees the case.
Buddy D. Ford, P.A., serves as the Debtor's legal counsel.
BAYOU CITY SMILES: Tom Howley Named Subchapter V Trustee
--------------------------------------------------------
The U.S. Trustee for Region 7 appointed Tom Howley, Esq., at Howley
Law, PLLC as Subchapter V trustee for Bayou City Smiles, PC.
Mr. Howley will be paid an hourly fee of $550 for his services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. Howley declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Tom Howley, Esq.
Howley Law, PLLC
711 Louisiana Street, Suite 1850
Houston, TX 77002
Telephone: (713) 333-9120
Email: tom@howley-law.com
About Bayou City Smiles
Bayou City Smiles, PC filed a petition under Chapter 11, Subchapter
V of the Bankruptcy Code (Bankr. S.D. Texas Case No. 24-31145) on
March 14, 2024, with $1 million to $10 million in both assets and
liabilities.
Judge Jeffrey P. Norman presides over the case.
Vicky M. Fealy, Esq., at The Fealy Law Firm, PC represents the
Debtor as bankruptcy counsel.
BOWFLEX INC: Court OKs Bid Rules for Sale of Assets
---------------------------------------------------
BowFlex Inc. and BowFlex New Jersey, LLC received approval from the
U.S. Bankruptcy Court for the District of New Jersey to solicit
bids for substantially all of their assets.
Under the court-approved bid procedures, the deadline for potential
buyers to place their bids on the assets is on April 5, at 12:00
p.m. (prevailing Eastern Time). Potential buyers are required to
provide a cash deposit equal to 10% of the purchase price to be
paid.
An auction will be conducted on April 8, at 10:00 a.m. (prevailing
Eastern Time) if the companies receive offers by the bid deadline
while a sale hearing will be held on April 15, at 1:00 p.m.
(prevailing Eastern Time).
The companies are selling most of their assets to Johnson Health
Tech Retail, Inc. or to another buyer who will emerge as the
winning bidder at the April 8 auction.
Johnson, the court-approved stalking horse bidder, offered to pay
the companies $37.5 million in cash and assume some of their
liabilities.
In the event it is not selected as the winning bidder at the
auction, Johnson will receive a break-up fee of 3.5% of its
proposed purchase price and expense reimbursement of up to
$600,000.
About Bowflex Inc.
BowFlex, Inc., together with its affiliates, is an international
developer, distributor, and manufacturer of health and fitness
products sold under several marquee fitness brands across
international markets. The company is headquartered in Vancouver,
Wash.
BowFlex and BowFlex New Jersey, LLC concurrently filed voluntary
petitions for relief under Chapter 11 of the Bankruptcy Code
(Bankr. D.N.J. Lead Case No. 24-12364) on March 4, 2024. Jim Barr,
chief executive officer, signed the petitions.
At the time of the filing, BowFlex reported $50 million to $100
million in both assets and liabilities while BowFlex New Jersey
reported as much as $50,000 in both assets and liabilities.
Judge Andrew B Altenburg Jr. presides over the cases.
The Debtors tapped Fox Rothschild, LLP and Sidley Austin, LLP as
bankruptcy counsels, and Epiq Corporate Restructuring, LLC as
claims 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 is represented by James S. Carr, Esq.
BRIGANTI ENTERPRISE: Taps Michael Jay Berger as Bankruptcy Counsel
------------------------------------------------------------------
Briganti Enterprise, Inc. dba Mattress Central dba Briganti Home
dba Soy Crafters seeks approval from the U.S. Bankruptcy Court for
the Central District of California to hire the Law Offices of
Michael Jay Berger as counsel.
The firm's services include:
(a) communicate with creditors of the Debtor;
(b) review the Debtor's Chapter 11 bankruptcy petition and all
supporting schedules;
(c) advise the Debtor of its legal rights and obligations in a
bankruptcy proceeding;
(d) work to bring the Debtor into full compliance with
reporting requirements of the Office of the United States Trustee;
(e) prepare status reports as required by the court;
(f) respond to any motions filed in the Debtor's bankruptcy
proceedings; and
(g) prepare a Chapter 11 Plan of Reorganization for the
Debtor.
The hourly rates of the firm's counsel and staff are as follows:
Michael Jay Berger $595
Sofya Davtyan, Partner $545
Robert Poteete $435
Senior Paralegals and Law Clerks $250
Paralegals $200
The firm received a retainer of $25,000.
Michael Jay Berger, Esq., a partner at Law Offices of Michael Jay
Berger, disclosed in a court filing that the firm is a
"disinterested person" as the term is defined in Section 101(14) of
the Bankruptcy Code.
The firm can be reached through:
Michael Jay Berger, Esq.
Law Offices of Michael Jay Berger
9454 Wilshire Boulevard, 6th Floor
Beverly Hills, CA 90212
Telephone: (310) 271-6223
Facsimile: (310) 271-9805
Email: michael.berger@bankruptcypower.com
About Briganti Enterprise, Inc.
Briganti Enterprise, Inc. serves as a mattress outlet in Los
Angeles, California.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. C.D. Cal. Case No. 24-12006) on March 15,
2024. In the petition signed by Vahe Vince Delakyan, president, the
Debtor disclosed $171,649 in assets and $1,318,798 in liabilities.
Judge Neil W Bason oversees the case.
Michael Jay Berger, Esq., at LAW OFFICES OF MICHAEL JAY BERGER,
represents the Debtor as legal counsel.
CACTUS LAND: Seeks Approval to Hire Cactus Land as Closing Agent
----------------------------------------------------------------
Cactus Land Holdings, Inc. seeks approval from the U.S. Bankruptcy
Court for the Southern District of Florida to employ Preferred
Title, Inc. to serve as its closing agent.
Preferred Title will act as the closing agent in connection with
the sales of its real estate assets, including obtaining
preliminary title commitments, final title reports, and acting as
the escrow and closing agent for the transaction.
Preferred Title is disinterested as required by Section 327(a),
according to court filings.
The firm can be reached through:
Michael B. Shapiro
Preferred Title, Inc.
225 W Broadway St
Monticello, MN 55362
Phone: (763) 295-6140
About Cactus Land Holdings
Cactus Land Holdings, Inc. is a resident-owned manufactured home
community in Florida.
The Debtor filed Chapter 11 petition (Bankr. S.D. Fla. Case No.
23-19135) on Nov. 6, 2023, with $4,478,161 in assets and $1,887,404
in liabilities. Jack "Jay" Rust, Jr., president, signed the
petition.
Judge Peter D. Russin oversees the case.
Matthew S. Kish, Esq., at Shapiro Blasi Wasserman & Hermann PA,
represents the Debtor as legal counsel.
CAPITAL TACOS: Kathleen DiSanto Named Subchapter V Trustee
----------------------------------------------------------
The U.S. Trustee for Region 21 appointed Kathleen DiSanto, Esq., at
Bush Ross, P.A., as Subchapter V trustee for Capital Tacos
Holdings, LLC.
Ms. DiSanto will be paid an hourly fee of $350 for her services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Ms. DiSanto declared that she is a disinterested person according
to Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Kathleen L. DiSanto, Esq.
Bush Ross, P.A.
P.O. Box 3913
Tampa, FL 33601-3913
Phone: (813) 224-9255
Fax: (813) 223-9620
Email: disanto.trustee@bushross.com
About Capital Tacos Holdings
Capital Tacos Holdings, LLC, a company in Tampa, Fla., sought
protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr.
M.D. Fla. Case No. 24-01363) on March 15, 2024, with up to $500,000
in assets and up to $10 million in liabilities. James Marcus,
manager, signed the petition.
Edward J. Peterson, Esq., at Johnson, Pope, Bokor, Ruppel & Burns,
LLP, represents the Debtor as legal counsel.
CAREPOINT HEALTH: Hires Insight for Help With Finances
------------------------------------------------------
Lauren Coleman-Lochner of Bloomberg News reports that a Michigan
company that rescued a bankrupt Chicago hospital has stepped in to
run operations at CarePoint Health, the long-troubled system across
the river from Manhattan.
Insight, based in Flint, Michigan, is working with current
management to financially stabilize CarePoint's three hospitals.
CarePoint operates the 261-bed Bayonne Medical Center,along with
Hoboken University Medical Center and Christ Hospital in Jersey
City, each with about 350 beds.
Insight eventually plans to rebrand them under its banner, said one
person familiar with the situation, who declined to be identified
because the process isn't public.
About CarePoint Health
CarePoint operates the 261-bed Bayonne Medical Center,along with
Hoboken University Medical Center and Christ Hospital in Jersey
City, each with about 350 beds.
CENERGY LLC: Hires Acquisition Realty & Development as Broker
-------------------------------------------------------------
Cenergy, LLC seeks approval from the U.S. Bankruptcy Court for the
Western District of Wisconsin to employ Acquisition Realty &
Development, LLC as its commercial real estate broker.
The broker will render these services:
a. list and market for sale the commercial real estate
identified in the listing contracts; and
b. communicate and negotiate on behalf of the Debtors with
prospective buyers regarding inquiries, offers, and terms of any
proposed sale of the real estate.
The broker will earn a commission equal to 6 percent of listing
price.
The firm is a "disinterested person" within the meaning of 11
U.S.C. Sec. 101(14), according to court filings.
The firm can be reached through:
Dean Larsen
Acquisition Realty & Development
3610 Oakwood Hills Parkway #3
Eau Claire, WI 54701
Phone: (715) 495-2785
About Cenergy, LLC
Cenergy, LLC sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. W.D. Wisc. Case No. 23-11558) on September
1, 2023. In the petition signed by K. Michael Buck, authorized
individual, the Debtor disclosed up to $10 million in both assets
and liabilities.
Judge Catherine J. Furay oversees the case.
Craig E. Stevenson, Esq., at Dewitt LLP, represents the Debtor as
legal counsel.
CHAMP ACQUISITION: Moody's Affirms 'B2' CFR, Outlook Stable
-----------------------------------------------------------
Moody's Ratings affirmed Champ Acquisition Corporation's B2
Corporate Family Rating and B2-PD Probability of Default Rating.
Champ is the parent company of Jostens, Inc. Moody's also affirmed
the B1 rating on the company's senior secured first lien credit
facilities, consisting of a $115 million first lien revolving
credit facility due 2025 and a $775 million first lien original
principal term loan due 2025, and also affirmed the Caa1 rating for
the company's $150 million senior secured second lien term loan due
2026. The outlook is stable.
The rating affirmation and stable outlook reflect Champ's strong
market position in the niche school achievement categories, stable
profitability, and good liquidity and free cash flow. New account
wins and stable demand for the school achievement products will
drive steady low single digit revenue growth and modest EBITDA
margin expansion. Yearbooks, graduation regalia, and other school
achievement products continue to hold significant meaning to the
education experience and support the revenue base and partially
offset secular pressures that are adversely impacting demand in the
jewelry business. Additionally, moderating cost inflation will help
drive incremental improvement in the EBITDA margins as will
resolving the manufacturing challenges that increased costs in
2023. Moody's anticipates that debt-to-EBITDA leverage will decline
below 4.0x over the next 12 months from 4.0x (Moody's adjusted) for
the 12 months ended December 2023. Moody's also expects good
liquidity including free cash flow of around $75-80 million in
2024.
Champ's revolving credit facility expires in September 2025 and the
first lien term loan will mature in December 2025. Moody's expects
the company to refinance these instruments before their maturities
at a cash interest cost that does not materially reduce free cash
flow.
RATINGS RATIONALE
Champ Acquisitions' B2 CFR reflects its narrow product focus in
school related affinity products and its moderate exposure to
cyclical downturns. Champ's financial leverage is high considering
the seasonality of earnings and cash flow, and secular demand
pressure in the products such as printed materials and jewelry.
Moody's expects that debt-to-EBITDA will decline below 4.0x over
the next 12 months from 4.0x as of the fiscal year end December 31,
2023. Champ continues to gain market share through market
penetration and new account wins, partly because of stronger
operating performance in relation to peers. However, high interest
rates and inflation could put pressure on the discretionary nature
of a material portion of Champ's portfolio. Financial policy
includes use of high leverage given the business profile though
acquisitions and dividends have been limited since the 2018
leveraged buyout. Further, the company's interest burden remains
high relative to profitability and is a material use of cash that
reduces flexibility to manage a slowdown in consumer demand.
Governance factors primarily relate to the company's aggressive
financial policies under private equity ownership, including its
high financial leverage and concentrated control that could lead to
activities such as acquisitions and shareholder distributions.
Champ's ratings also account for the company's breadth of product
and service capabilities, including a high degree of
personalization and strong sales support and customer service. The
company benefits from long-standing relationships with individual
schools and colleges through its large network of independent sales
representatives. Liquidity is good. Moody's projects free cash flow
of around $75-$80 million over the next 12 months and continued
access to the company's undrawn $115 million revolver expiring
September 2025. The revolver is sufficient to fund seasonal working
capital borrowings and payment of $39 million of annual debt
amortization. Moody's anticipates revolver borrowings will trigger
the springing financial maintenance covenant during peak seasonal
working capital periods but that the company will maintain good
cushion within the covenant.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The stable outlook reflects Moody's expectation that Champ's
revenue and earnings will remain stable led by healthy demand
across the majority of the company's achievement products that
offsets weakness in the jewelry business. The EBITDA margin is also
expected to improve on moderating input costs and lower cost
overages due to better manufacturing execution. Risks remain to
consumer spending due to inflationary pressures and high interest
rates that could impact demand for the company's more discretionary
products. The stable outlook also reflects Moody's expectation that
liquidity will remain good with annual free cash flow of around
$75-80 million and that the company will proactively address the
2025 and 2026 debt maturities at a cash interest cost that
preserves solid free cash flow.
The ratings could be upgraded if the company is able to
consistently grow its revenue organically and expand its operating
margin. An upgrade would also require the company to maintain a
financial policy that keeps the debt/EBITDA leverage below 4.0x.
Champ would also need to generate strong free cash flow, at a high
single-digit percentage relative to debt, and maintain at least
good liquidity including addressing the debt maturities.
The ratings could be downgraded if the company's operating results
deteriorate through weaker demand or market share losses, pricing
pressure or increased costs. The ratings could also be downgraded
if debt-to-EBITDA is sustained above 5.5x, free cash flow declines,
or liquidity deteriorates including failure to proactively address
the 2025 and 2026 debt maturities or an increase in revolvers is
drawings beyond normal seasonal needs. A shift towards more
aggressive financial policies including actions such as a large
debt-financed acquisition or a dividend distribution could also
lead to a downgrade.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE CONSIDERATIONS
Champ's CIS-4 ESG credit impact score indicates the rating is lower
than it would have been if ESG risk exposures did not exist. The
CIS score primarily reflects governance risks stemming from
concentrated control and decision making and use of high leverage
under majority private equity ownership.
The principal methodology used in these ratings was Consumer
Durables published in September 2021.
Headquartered in Minneapolis, MN, Champ Acquisition Corporation
owns Jostens, which is a manufacturer and seller of yearbooks,
publications, jewelry, and other school-related affinity products
that serve the K--12 educational, college, and professional sports
segments. The company was acquired by private equity firm Platinum
Equity in December 2018 from Newell Brands for approximately $1.1
billion, and revenue in fiscal year end December 31, 2023 was $898
million.
CHARGE ENTERPRISES: Hires Berkeley Research as Financial Advisor
----------------------------------------------------------------
Charge Enterprises, Inc. seeks approval from the U.S. Bankruptcy
Court for the District of Delaware to hire Berkeley Research Group,
LLC as its financial advisor.
The firm will render these services:
(a) support the development of restructuring plans, financing,
and strategic alternatives for maximizing the enterprise value of
the Debtor;
(b) prepare various financial analyses to support
restructuring alternatives including liquidity forecast,
profitability improvements, backlog, expense levels and others as
necessary;
(c) advise the Debtor relative to negotiating with existing
lenders, potential buyers and stakeholders;
(d) provide the advice to management on cash conservation
measures and liquidity forecasting after analyzing and stress
testing weekly cash flows under various scenarios;
(e) assist the Debtor with the communications and negotiations
with various third parties to support restructuring alternatives;
(f)other services as requested or directed by the CEO and CFO,
the board of directors of the Debtor or other Debtor personnel as
authorized by the foregoing and agreed to by BRG; and
(g) if a Chapter 11 bankruptcy became necessary, assist the
Debtor and counsel with activities relating to such bankruptcy,
including preparation for filing and post-filing reporting and
support.
The firm will render these additional services:
(a) oversee the activities of the Debtor in consultation with
other advisors and the management team to effectuate the
pre-packaged Chapter 11 filing pursuant to the filed Plan;
(b) assist the Debtor and its management in continuing to
prepare cash flow forecasts, including updated DIP Budgets and
other cash flow reporting required pursuant to the DIP Term Sheet;
(c) assist the Debtor in operating in Chapter 11, including
negotiations with stakeholders;
(d) assist the Debtor and its other professionals with all
required Chapter 11 reporting;
(e) assist the Debtor and its other professionals regarding
the implementation of the Debtor's proposed KERP plan;
(f) to the extent reasonably requested by the Debtor, offer
testimony before the Court and participate in depositions,
including by providing deposition testimony related thereto; and
(g) provide such other services as mutually agreed upon by BRG
and the Debtor.
The firm will be paid as follows:
Managing Directors $1,095 to $1,325
Associate Directors & Directors $865 to $1,050
Professional Staff $420 to $850
Support Staff $175 to $375
The firm received a retainer in the amount of $250,000.
Joseph Vizzini, a managing director at Berkeley Research Group,
LLC, disclosed in a court filing that the firm is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
The firm can be reached at:
Joseph A. Vizzini
Berkeley Research Group, LLC
250 Pehle Avenue, Suite 301
Saddle Brook, NJ 07663
Telephone: (201) 587-7100
Facsimile: (201) 587-7102
Email: jvizzini@thinkbrg.com
About Charge Enterprises
Charge Enterprises, Inc. is an electrical, broadband, and electric
vehicle charging infrastructure Debtor that provides clients with
end-to-end project management services, from advising, designing,
engineering, acquiring, and installing equipment, to monitoring,
servicing, and maintenance.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Del. Case No. 24-10349) on March 7,
2024, with $114,368,349 in assets and $48,718,180 in liabilities.
Craig Harper-Denson, authorized officer, signed the petition.
The Debtor tapped Ian J. Bambrick, Esq. at FAEGRE DRINKER BIDDLE &
REATH LLP as bankruptcy counsel; BERKELEY RESEARCH GROUP, LLC as
financial restructuring adviser; and SQUIRE PATTON BOGGS (US) LLP
as special litigation counsel.
CHARGE ENTERPRISES: Hires Piper Sandler & Co. as Investment Banker
------------------------------------------------------------------
Charge Enterprises, Inc. seeks approval from the U.S. Bankruptcy
Court for the District of Delaware to hire Piper Sandler & Co. as
its investment banker.
The firm will render these services:
(a) review and analyze the Debtor's assets and liabilities and
the operating and financial strategies of the Debtor;
(b) review and analyze the business plans and financial
projections prepared by the Debtor;
(c) evaluate the Debtor's debt capacity in light of its
projected cash flows and assist in the determination of an
appropriate capital structure for the Debtor;
(d) evaluate the Debtor's liquidity, including financing
alternatives;
(e) determine a range of values for the Debtor and any
securities that the Debtor offers or proposes to offer in
connection with a Restructuring;
(f) assist the Debtor in raising debt or equity financing,
including developing marketing materials, creating and maintaining
a data room and contact log, initiating contact with potential
capital providers and running the process for a New Capital Raise;
(g) assist the Debtor in planning for dialogue and
negotiations with creditors for a potential Restructuring,
including with respect to the creditor due diligence process and
negotiations with the various creditor constituencies;
(h) assist the Debtor and its other professionals in reviewing
the terms of any proposed Restructuring and/or New Capital Raise
(whether proposed by the Debtor or a third party), in responding
thereto and, if directed, in evaluating alternative proposals for a
Restructuring and/or New Capital Raise as applicable;
(i) assist or participate in negotiations with the parties in
interest, including, without limitation, any current or prospective
creditors of, holders of equity in, or claimants against the Debtor
and/or their respective representatives in connection with a
Restructuring;
(j) advise the Debtor with respect to, and attend, meetings of
the Debtor's board of directors, creditor groups and other
interested parties, as reasonably requested;
(k) in the event the Debtor becomes subject to a bankruptcy
proceeding commenced under any applicable statute, and if requested
by the Debtor, participate in hearings before the court in which
such bankruptcy proceeding is commenced and provide relevant
testimony with respect to the matters described herein and issues
arising in connection with the Plan; and
(l) render such other financial advisory and investment
banking services as may be agreed upon by Piper Sandler and the
Debtor.
Piper Sandler will receive compensation as follows:
(a) Monthly Fee. Commencing as of the date of the Engagement
Agreement, a monthly advisory fee of $150,000 per month, regardless
of whether a Restructuring is proposed or consummated, payable by
the Company in advance on the first day of each month.
(b) Completion Fee. A fee of $2,875,000, payable upon the
consummation of any Restructuring.
(c) New Capital Fee. A fee equal to (i) one percent of the
face amount of any senior secured Financing raised, including
without limitation, any senior secured debtor-in-possession
financing raised; (ii) three percent of the face amount of any
junior secured or senior or subordinated unsecured Financing raised
and (iii) five percent in the case of any other Financing,
including, without limitation, equity or equity-linked Financing,
capital convertible into equity or hybrid capital raised,
including, without limitation, equity underlying any warrants,
purchase rights or similar contingent equity securities (each, a
"New Capital Raise"). The New Capital Fee shall be earned and
payable upon the earlier of execution of a commitment letter or
execution of a definitive agreement with respect to such Financing.
For the avoidance of doubt, (x) there may be multiple New Capital
Fees if there are multiple transactions by which the new capital is
committed, (y) the term "raised" shall include the amount committed
or otherwise made available to the Company whether or not such
amount (or any portion thereof) is drawn down at closing or is ever
drawn down and whether or not such amount (or any portion thereof)
is used to refinance existing obligations of the Company and (z),
the New Capital Fee relating to any warrants, purchase rights or
similar contingent equity securities shall be due and payable upon
the closing of the transaction by which such instruments are issued
and shall be calculated as if all such instruments are exercised in
full (and the full exercise price is paid in cash) on the date of
such closing, whether or not all or any portion of such instruments
are vested and whether or not such instruments are actually so
exercised.
(d) The Company shall reimburse Piper Sandler for its
reasonable expenses incurred in connection with the performance of
its engagement under the Engagement Agreement and the preparation,
modification, amendment, and enforcement of the Engagement
Agreement, including without limitation, the reasonable fees,
disbursements and other charges of Piper Sandler's counsel.
Reasonable expenses shall also include, but not be limited to,
expenses incurred in connection with travel and lodging, research,
data processing and communication charges, and regulatory and
courier services and fees.
As disclosed in court filings, Piper Sandler & Co. is a
"disinterested person" pursuant to Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
Joel S. Karotkin
Piper Sandler & Co.
800 Nicollet Mall, Suite 900
Minneapolis, MN 55402
Phone: (800) 333-6000
About Charge Enterprises
Charge Enterprises, Inc. is an electrical, broadband, and electric
vehicle charging infrastructure Debtor that provides clients with
end-to-end project management services, from advising, designing,
engineering, acquiring, and installing equipment, to monitoring,
servicing, and maintenance.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Del. Case No. 24-10349) on March 7,
2024, with $114,368,349 in assets and $48,718,180 in liabilities.
Craig Harper-Denson, authorized officer, signed the petition.
The Debtor tapped Ian J. Bambrick, Esq. at FAEGRE DRINKER BIDDLE &
REATH LLP as bankruptcy counsel; BERKELEY RESEARCH GROUP, LLC as
financial restructuring adviser; and SQUIRE PATTON BOGGS (US) LLP
as special litigation counsel.
CHATEAU CREOLE: Voluntary Chapter 11 Case Summary
-------------------------------------------------
Debtor: Chateau Creole Apartments, LLC
273 Monarch Drive
Houma, LA 70364
Business Description: The Debtor is primarily engaged in renting
and leasing real estate properties.
Chapter 11 Petition Date: March 29, 2024
Court: United States Bankruptcy Court
Eastern District of Louisiana
Case No.: 24-10608
Judge: Hon. Meredith S Grabill
Debtor's Counsel: Ryan J. Richmond, Esq.
STERNBERG, NACCARI & WHITE, LLC
450 Laurel Street
Suite 1450
Baton Rouge, LA 70801
Tel: (225) 412-3667
Email: ryan@snw.law
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $10 million to $50 million
The petition was signed by Damon J. Baldone as manager.
A copy of the Debtor's list of 20 largest unsecured creditors is
now available for download at PacerMonitor.com.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/XA2RDSI/Chateau_Creole_Apartments_LLC__laebke-24-10608__0001.0.pdf?mcid=tGE4TAMA
CLEAN & FRESH: Unsecureds Will Get 6% of Claims over 3 Years
------------------------------------------------------------
Clean & Fresh Cleaning Service, LLC, filed with the U.S. Bankruptcy
Court for the Eastern District of North Carolina a Disclosure
Statement describing Chapter 11 Plan dated March 21, 2024.
The Debtor is a North Carolina limited liability company owned by
Randolfo S. Godoy and Diana Medina Barahona.
The company was formed in 2016 and has operated since its inception
providing commercial office and apartment cleaning service in the
Raleigh, North Carolina and surrounding areas.
Class 3 consists of General Unsecured Claims. The Debtor believes
that Allowed General Unsecured Claims total $496,454.40, including
the bifurcated amount of the SBA Class 1A claim. The Debtor
proposes to satisfy this class by paying a total of $30,000.00.
This amount will pay Allowed General Unsecured Claims approximately
6% of each claim. Said payments shall be made in equal quarterly
installments of $2,500.00, over three years, on a pro rata basis,
with the first quarterly installment due on July 1, 2024 and the
final quarterly installment due on April 1, 2027.
Class 4 consists of Randolfo S. Godoy and Diana Medina Barahona's
membership interests in the Estate. Title to and ownership of all
property of the estate will vest in the Debtor upon Confirmation of
the Plan, subject to all valid liens of Secured Creditors under the
Confirmed Plan. Liens of bifurcated Claims will be valid only to
the extent of the Allowed Secured Amount of the Claim.
To the extent that Class 3 does not accept the Plan, Randolfo S.
Godoy and Diana Medina Barahona will offer $1,500.00 each of New
Value for the purchase of their equity interests in the estate.
The Debtor proposes to make the payments proposed in its Plan from
its continuing operations in providing commercial office and
apartment cleaning service in the Raleigh, North Carolina and
surrounding areas.
A full-text copy of the Disclosure Statement dated March 21, 2024
is available at https://urlcurt.com/u?l=9Pe91o from
PacerMonitor.com at no charge.
About Clean & Fresh Cleaning Service
Clean & Fresh Cleaning Service, LLC has operated since 2016 as a
commercial office and apartment cleaning service in the Raleigh,
North Carolina and surrounding areas. The company is owned by
Rondolfo S. Godoy and Diana Medina Barahona. Ms. Barahona is the
company representative in this bankruptcy proceeding.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D.N.C. Case No. 24-00926-5-PWM) on March
20, 2024. In the petition signed by Diana Medina Barahona, member,
the Debtor disclosed up to $100,000 in assets and up to $1 million
in liabilities.
CMG MEDIA: Moody's Lowers CFR to Caa1 & Alters Outlook to Negative
------------------------------------------------------------------
Moody's Ratings downgraded CMG Media Corporation's (d/b/a "Cox
Media Group", "CMG" or the "company") Corporate Family Rating to
Caa1 from B2 and Probability of Default Rating to Caa1-PD from
B2-PD. Concurrently, Moody's downgraded CMG's senior secured bank
credit facilities to B3 from B1 and senior unsecured notes to Caa3
from Caa1. The outlook was changed to negative from stable.
RATINGS RATIONALE
Structural and secular pressures in CMG's business were a key
driver of the ratings downgrade and reflects Moody's medium to
long-term expectation for continued pressure on retransmission
revenue growth due to the increasing pace of subscriber losses
arising from secular cord-cutting trends, as well as ongoing
declines in linear TV core advertising. Moody's also factored in
CMG's carriage dispute with DISH Network, the fifth largest pay-TV
operator, which has lasted more than a year. Moody's expects
financial leverage, as measured by total debt to two-year average
EBITDA, will remain in the 6x-7x range (Moody's adjusted) over the
rating horizon. The downgrade also incorporates Moody's expectation
of a likely balance sheet restructuring given the untenable debt
capital structure. This would include CMG's continued open market
purchases of its deeply discounted senior notes with expanding FCF
during the current election year to reduce the high interest
burden. In addition, a potential debt exchange could occur via a
negotiated maturity extension of the $2.1 billion term loan due
December 2026 with existing lenders, especially if refinancing in
the capital markets is precluded. Either transaction could be
deemed a distressed exchange default by Moody's. Hence, the
downgrade also reflects governance risks owing to the debt-heavy
balance sheet coupled with negative operating trends, which will
weigh on CMG's future operating performance leading to debt
protection measures that are more consistent with Caa1 CFR peers.
The negative outlook reflects continuing pressures in CMG's
business and Moody's view that the company's credit metrics are
weakly positioned within the Caa1 CFR. Moody's estimates CMG's
gross leverage at FYE 2023 was around 6.2x. While political
advertising revenue in the 2024 presidential election will boost
EBITDA, leverage will remain above 6x due to stalled growth in core
advertising and retransmission revenue, as well as absence of
EBITDA from divested assets. In 2025, as political revenue recedes,
core ad revenue remains pressured and retransmission revenue
contracts, Moody's expects leverage will rise near the 7x region
(all metrics are Moody's adjusted on a two-year average EBITDA
basis). Given the operating challenges in the TV broadcast industry
and low growth in CMG's core revenue, lower-than-expected EBITDA
would lead to downside risk to Moody's leverage forecast. Hence,
the negative outlook considers the risk of higher-than-expected
leverage as well as the possibility of a balance sheet
restructuring.
Moody's estimates CMG's historic average annual retransmission
organic revenue growth was resilient in the 10%-12% range in recent
years. Retransmission fees tend to be revised materially upwards at
the time of contract renewal and benefit from annual escalators.
However, with traditional multichannel video programming
distributors (MVPDs) continuing to experience pressure from greater
subscriber declines, it will become more difficult to realize
offsetting rate increases over the medium to long-term. Traditional
MVPD year-over-year (yoy) industrywide subscriber losses are
currently around -12% and Moody's expects that CMG's traditional
subscriber base will continue to erode, rising to the mid-teens
percentage range over the rating horizon.
Retransmission revenue typically declines as a percentage of
revenue in election years (e.g., 38% in 2022) when political ad
revenue increases, and increases in non-election years (e.g., 43%
in 2021) as political revenue recedes. However, YTD through
September 30, 2023, retransmission represented 41% of revenue, the
same proportion in the comparable year ago period, an election
year. This anomaly was due to a -19% decline in CMG's
retransmission revenue, chiefly influenced by the divestiture of 12
television stations in August 2022 and blackout of its stations by
DISH Network since November 2022, as well as lower subscribers
across its traditional MVPDs. Pro forma for the divested assets,
Moody's estimates CMG's retransmission revenue decreased -14%
mostly due to the extended blackout. The company recently renewed
its distribution agreement with DIRECTV, the third largest pay-TV
operator, after that distributor blacked out its stations in early
February. As other contracts come up for renewal over the next
12-24 months, the company will have limited negotiating leverage
for material fee increases due to its smaller local TV presence
relative to its larger broadcast peers. Moody's expects CMG's
organic retransmission revenue will decline in the low-to-mid
single digit percentage region (on average, excluding protracted
blackouts) as consumers continue to cancel their cable and
satellite TV subscriptions at an accelerating pace. Moody's
forecast does not include a new contract with DISH in 2024.
Somewhat minimizing the impact of the expected erosion is CMG's
lower percentage of retransmission revenue relative to rated
broadcast peers.
However, compared to rated peers, CMG has a higher exposure to
cyclical advertising revenue. YTD through September 30, 2023, a
non-election year, ad revenue accounted for around 56% of total
revenue, but can increase to 60%-65% in an election year. CMG's
core advertising revenue will experience greater volatility arising
from the underlying and ongoing structural pressures in linear TV
core advertising. The company's radio advertising revenue accounts
for about 20% of total revenue and is not a material driver of the
credit profile. Nonetheless, because radio is facing similar
challenges as linear TV, with advertisers transitioning to digital
formats, Moody's expects flat to low-single percentage declines in
core ad revenue in CMG's radio unit. Moody's projects CMG's total
core ad revenue (TV and radio) will decline at an annual run-rate
in the low-to-mid single digit percentage range, chiefly driven by
linear TV. Through September, the company's core advertising
revenue declined -9%, impacted by the 2022 asset sales as well as
macroeconomic weakness pressuring advertising demand in larger
Designated Market Areas (DMAs). Pro forma for the divested assets,
Moody's estimates CMG's core advertising decreased -3% to -4%.
While the company's total ad revenue likely declined -15% to -20%
in 2023 (pro forma for asset sales), due to meaningfully lower
political ad revenue in a non-election year, Moody's expects
political advertising spend to boost revenue and profits in 2024.
CMG's Caa1 CFR reflects the company's small scale (i.e., 13 local
TV stations reaching around 11% of US households) and aggressive
financial policy, characterized by a tolerance for high financial
leverage (6.2x total debt to two-year average EBITDA Moody's
adjusted at LTM September 30, 2023) and shareholder-friendly
activities demonstrated by the sizable $233 million dividend paid
to the equity sponsor in Q2 2023. Following the station
divestitures, CMG's footprint is smaller and less diversified. The
company's revenue model benefits from a mix of recurring
retransmission fees that historically helped to offset the inherent
volatility of traditional advertising revenue. Over the next
several years, Moody's expects retransmission revenue growth will
remain challenged as the rate of subscriber losses outpaces annual
fee increases, which constrains the rating. In even numbered years,
revenue benefits from material political advertising spend,
especially during presidential election years, which can mask
pressure in retransmission revenue, but also boosts EBITDA. During
election years, CMG generates good free cash flow (FCF), which
declines during non-election years.
The Caa1 CFR is supported by CMG's solid market position driven by
stations in attractive markets, a strong local news presence (80%
of newscasts ranked #1 or #2 in ratings) and diversified network
affiliations. However, the credit profile is constrained by the
ongoing structural decline in linear TV core advertising as
non-political TV advertising budgets continue to erode in favor of
digital media. Moody's expects CMG's linear TV core ad revenue will
continue to be pressured, which could worsen during periods of weak
CPM (cost per thousand impressions) pricing and/or deteriorating
macroeconomic conditions. To offset these challenges, the company
has invested in digital media (around 10% of revenue), however this
burdens cash flows in the short-term until these assets become
profitable and contribute meaningfully to EBITDA.
Over the next 12-18 months, Moody's expects CMG will maintain
adequate liquidity. At LTM September 30, 2023, FCF (defined by
Moody's as cash flow from operations less capex less dividends)
totaled -$228 million (Moody's adjusted), cash and cash equivalents
were approximately $378.5 million and the $325 million revolving
credit facility (RCF) due December 2024 was undrawn and is current.
Excluding the $233 million special dividend paid to the sponsor in
Q2 2023, FCF was $5 million, which was pressured due to contraction
in both core advertising and retransmission revenue, and absence of
political ad revenue in a non-election year. Moody's expects that
CMG will generate FCF of around $50 million to $75 million in 2024
(presidential election year) and maintain solid cash balances.
ESG CONSIDERATIONS
CMG's ESG credit impact score was changed to CIS-5 from CIS-4,
chiefly driven by governance risks. CIS-5 indicates the rating is
lower than it would have been if ESG risk exposures did not exist
and that the negative impact is more pronounced than for issuers
scored CIS-4. The credit impact score reflects increasing exposure
to governance risk, chiefly influenced by financial strategy and
risk management given the aggressive financial policies
characterized by a tolerance for high leverage and sizable
dividends paid to its private equity sponsor. The likelihood that
CMG will continue repurchasing more of its substantially discounted
senior notes or execute a negotiated exchange of its term loan is
also factored in governance risk. Management credibility and track
record, compliance and reporting subfactors and board structure and
policies add further governance pressures. Elevated social risks
include demographic and societal trends associated with changes in
consumers' video consumption.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The outlook could be revised to stable if CMG experiences sustained
organic growth in core advertising and retransmission revenue such
that leverage is sustained near 6x on a two-year average EBTIDA
basis (Moody's adjusted) and successfully refinances its term loan
and senior notes well before their maturity dates without resorting
to a balance sheet restructuring, which would include discounted
debt buybacks or debt exchanges and/or maturity extensions with
existing lenders.
Though unlikely near-term, ratings could be upgraded if CMG's
leverage is sustained well below 5.5x on a two-year average EBTIDA
basis and two-year average FCF to debt is sustained above 3%
(Moody's adjusted). CMG would also need to: (i) exhibit organic
revenue growth and stable-to-improving EBITDA margins on a two-year
average basis; (ii) adhere to conservative financial policies; and
(iii) maintain at least good liquidity to be considered for an
upgrade. Ratings could be downgraded if leverage was sustained
above 7x on a two-year average EBITDA basis (Moody's adjusted) as a
result of weak operating performance or more aggressive financial
policies. A downgrade could also arise if two-year average FCF is
negative on a sustained basis (Moody's adjusted) or CMG experienced
deterioration in liquidity or covenant compliance weakness. Ratings
could also be downgraded if Moody's expects CMG will pursue a
balance sheet restructuring.
Headquartered in Atlanta, Georgia, CMG Media Corporation (d/b/a
"Cox Media Group") is principally a television broadcasting
business (around 77% of LTM September 30, 2023 revenue) with
complementary radio assets (23%) that diversify the company's
portfolio of high quality television stations in large, attractive
media markets. CMG owns or operates 13 local network affiliated
television stations across nine markets and 50 radio stations in
ten markets. The company is an indirect wholly-owned subsidiary of
CMG Holdings, Inc., which is majority owned by affiliates of Apollo
Global Management, Inc. ("Apollo"). Revenue totaled approximately
$1.2 billion at LTM September 30, 2023.
The principal methodology used in these ratings was Media published
in June 2021.
COGECO COMMUNICATIONS: DBRS Gives BB(high) Rating on Sr. Notes
--------------------------------------------------------------
DBRS Limited assigned a credit rating of BB (high) with a recovery
rating of RR4 and a Stable trend to Cogeco Communications Inc.'s
(Cogeco or the Company) $275 million 6.125% Senior Unsecured Notes
due 2029. The recovery rating of RR4 suggests a recovery of 30% to
60% in a default scenario for the Senior Unsecured Notes. There is
no change to the Company's Issuer Rating of BB (high), Stable
trend, or its Senior Secured Notes & Debentures rating of BBB
(low), Stable trend.
The Senior Unsecured Notes are direct and unsubordinated unsecured
obligations of the Company and rank equally in right of payment
(pari passu), without discrimination, preference, or priority, with
all of the Company's existing and future unsecured senior
indebtedness. The Senior Unsecured Notes are effectively junior in
right of payment to all of the Company's existing and future
secured senior indebtedness (including indebtedness under the
Company's syndicated credit agreement and the existing senior
secured notes), to the extent of the value of the assets securing
such senior indebtedness. The Senior Unsecured Notes are guaranteed
by the designated subsidiaries consisting of all of Cogeco's wholly
owned Canadian subsidiaries (the Guarantors).
Morningstar DBRS expects the net proceeds of the Senior Unsecured
Notes issuance will be used by Cogeco to repay existing
indebtedness (including the syndicated credit agreement) and for
other general corporate purposes.
BUSINESS RISK ASSESSMENT (BRA) AND FINANCIAL RISK ASSESSMENT (FRA)
(1) Weighting of BRA Factors
In the analysis of Cogeco, the relative weighting of the BRA
factors was approximately equal.
(2) Weighting of FRA Factors
In the analysis of Cogeco, the relative weighting of the FRA
factors was approximately equal.
(3) Weighting of the BRA and the FRA
In the analysis of Cogeco, the BRA and the FRA carry approximately
equal weight.
Notes: All figures are in Canadian dollars unless otherwise noted.
CORNERSTONE PSYCHOLOGICAL: F. Schwieg Named Subchapter V Trustee
----------------------------------------------------------------
The U.S. Trustee for Regions 3 and 9 appointed Frederic Schwieg,
Esq., at Schwieg Law, as Subchapter V trustee for Cornerstone
Psychological & Counseling Services of Northeast Ohio, LLC.
Mr. Schwieg 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. Schwieg declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Frederic P. Schwieg, Esq.
Schwieg Law
2705 Gibson Drive
Rocky River, OH 44116-1815
Phone: (440) 499-4506
Email: fschwieg@schwieglaw.com
About Cornerstone Psychological & Counseling
Cornerstone Psychological & Counseling Services of Northeast Ohio,
LLC filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. N.D. Ohio Case No. 24-60311) on March 14,
2024, with up to $50,000 in assets and up to $10 million in
liabilities. Kenneth A. Filbert, president and sole member, signed
the petition.
Judge Alan M. Koschik presides over the case.
Peter Tsarnas, Esq. at Gerts and Rosen, Ltd. represents the Debtor
as legal counsel.
CRUSH WINE: Seeks to Hire Kutner Brinen Dickey as Legal Counsel
---------------------------------------------------------------
Crush Wine, LLC seeks approval from the U.S. Bankruptcy Court for
the District of Colorado to hire Kutner Brinen Dickey Riley, P.C.
as its attorneys.
The firm will render these services:
(a) advise the Debtor with respect to its powers and duties;
(b) aid the Debtor in the development of a plan of
reorganization under Chapter 11;
(c) file the necessary petitions, pleadings, reports, and
actions that may be required in the continued administration of the
Debtor's property under Chapter 11;
(d) take necessary actions to enjoin and stay until a final
decree the continuation of pending proceedings and to enjoin and
stay until a final decree the commencement of lien foreclosure
proceedings and all matters as may be provided under 11 U.S.C. Sec.
362; and
(e) perform all other legal services for the Debtor that may
be necessary.
The hourly rates of the firm's counsel and staff are as follows:
Jeffrey S. Brinen $515
Jenny Fujii $410
Jonathan M. Dickey $375
Keri L. Riley $375
Paralegal $100
The firm received a retainer in the amount of $15,000 from the
Debtor.
Jonathan Dickey, Esq., an attorney at Kutner Brinen Dickey Riley,
disclosed in a court filing that the firm is a "disinterested
person" as defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Jonathan M. Dickey, Esq.
Kutner Brinen Dickey Riley, PC
1660 Lincoln Street, Suite 1720
Denver, CO 80264
Telephone: (303) 832-2400
Email: klr@kutnerlaw.com
About Crush Wine, LLC
Crush Wine is a local and family-owned wine bar & restaurant.
Crush Wine, LLC filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. D. Colo, Case No.
24-11198) on March 19, 2024, listing $62,222 in assets and
$1,047,097 in liabilities. The petition was signed by James Lewis
as president.
Judge Kimberley H Tyson presides over the case.
Jonathan M. Dickey, Esq. at KUTNER BRINEN DICKEY RILEY PC
represents the Debtor as counsel.
CUMULUS MEDIA: In Talks With Creditors Over Debt Deal
-----------------------------------------------------
Reshmi Basu of Bloomberg News reports that Cumulus Media Inc. and
some of its creditors have entered into discussions regarding the
company's proposed distressed exchange, according to people with
knowledge of the situation.
The struggling radio broadcaster in February asked holders of its
first-lien bonds and term loan, both due in 2026, to swap into new,
longer-dated debt at a discount of about 20 cents on the dollar.
Under the plan non-participating creditors would have their
collateral stripped -- diminishing the value of their debt.
Cumulus and its creditors are in agreement on the need to length
the company's maturities, said the people, who asked not to be
mentioned.
About Cumulus Media
Cumulus Media Inc. is an audio-first media company delivering
premium content and engages listeners with high-quality local
programming through 403 owned-and-operated radio stations across 85
markets, delivers nationally-syndicated sports, news, talk, and
entertainment programming from iconic brands.
CURO GROUP: Gets $70 Million DIP Financing
------------------------------------------
Nataly Pak of Bloomberg Law reports that consumer lending
conglomerate Curo Group Holdings Corp. and affiliates filed for
bankruptcy after failing to outrun a heavy debt load.
The company entered court protection with a plan, supported by the
majority of its debtholders, to reduce about $1 billion in debt and
save $75 million in annual interest payments, according to a
statement. Restructuring talks on the part of creditors were led by
funds including Oaktree Capital Management and Caspian Capital.
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 Holdings Corp. sought relief under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 24-90165) on
March 25, 2024.
In the petition signed by Douglas Clark, as chief executive
officer, the Debtor reported total assets of $1,777,476,000 and
total debt of $2,230,687,000 as of January 1, 2024.
The Honorable Bankruptcy Judge Marvin Isgur oversees the case.
The Debtors tapped AKIN GUMP STRAUSS HAUER & FELD LLP as bankruptcy
counsel; KING & SPALDING LLP as co-counsel; OPPENHEIMER & CO. INC.,
as investment banker. EPIQ CORPORATE RESRUCTURING, LLC, is the
claims agent. CASSELS BROCK & BLACKWELL LLP is the Canadian legal
counsel of the Debtors, and FTI CONSULTING CANADA INC., is the
information officer.
D&S ENTERPRISES: Fine-Tunes Plan Documents
------------------------------------------
D&S Enterprises, Inc., submitted a Second Amended Plan of
Liquidation dated March 19, 2024.
The Proponent submits this Second Amended Plan which proposes:
* Subject to the United States Bankruptcy Court for the
Eastern District of Pennsylvania (the "Court") approval, the
Proponent seeks to sell the real property located at 136 Campsite
Road, Bernville, Pennsylvania (the "Property"). Proponent will sell
the Property and any other assets owned by the Debtor
(collectively, the "Project") and satisfy all the claims as
provided for hereunder. If Proponent sells the Project it would be
to the Stalking Horse Purchaser described hereinafter, subject to
higher and better bids at a sale under Section 363 of the
Bankruptcy Code.
* If the Project is not sold under the provisions of Section
363 of the Bankruptcy Code, then, in the alternative, and with the
approval of this Court, the Proponent will auction the Project for
sale and satisfy all the claims provided for hereunder on or before
the Auction Date.
The Effective Date of the proposed Second Amended Plan is 30 days
after the Confirmation Order becomes a Final Order.
Proponent's Second Amended Plan would pay all Claims and Class of
Creditors in full based upon the estimated value of the Property.
Class 1 consists of Priority Tax and Administrative Claims. Class 1
is not impaired. The treatment and consideration to be received by
Class 1 shall be in full settlement, satisfaction, release and
discharge of its respective Claims and Liens. Class 1 Priority
Claims shall receive 100% percent of their Claim. Post-confirmation
interest at the statutory rate will be paid on the principal
portion of the Claim. In the event a sale of the Property occurs,
any amounts remaining due to the holder of the Class 1 Claim will
be paid in accordance with and subject to the approval of the
Court. Payment of the Office of the United States Trustee fees
shall be considered a Class 1 Claim.
Class 2 consists of Secured First Mortgage Claim of Hopkins. The
Class 2 Claim is unliquidated and undisputed. Based on available
information, the Debtor assumes that Class 2 will assert a Secured
Claim of $2,778,836.97 as of November 2, 2023 based on a judgment
confessed by Hopkins against Debtor. The Debtor shall pay all
current and post-petition real estate taxes, maintain, and insure
the Property. Debtor will provide Hopkins with proof of payment of
real estate taxes within five business days of payment. Debtor
shall list Hopkins as a loss payee on its insurance covering the
Property.
The Debtor asserts that the fair market value of the Property, as
evidenced by the Stalking Horse Agreement, which is the value of
the collateral for the Hopkins loan significantly exceeds the
amount of Hopkins' Claim and therefore the Claim of Hopkins should
be treated as a fully-secured Claim. Debtor asserts that even if
the Property must be sold through an auction the liquidation value
of the Property would exceed $4,000,000.00 which is sufficient to
pay in full Hopkins and all other Allowed Claims.
As a result of the planned liquidation of the Property by Section
363 sale or by sale to Stalking Horse Purchaser through a Section
363 sale to the Stalking Horse Purchaser, there will be proceeds
available for Distribution hereunder to Administrative Claims,
Priority Tax Claims/Class 1 , Class 2 Claims, Class 3 Claims and
Class 4 Claims that would not be available if Hopkins proceeded to
execute upon its confessed judgment and took possession of the
Project by credit bid at a subsequent sheriffs sale (as expected if
Debtor's Case does not proceed).
Concurrent with the sale of the Property, which sale must be
approved by the Court, Debtor shall pay in full Hopkins' Claim as
of the Petition Date in the amount of $2,778,836.97, and any Post
Petition charges or fees that have either been approved by the
Court or which are not objected to by Debtor. Upon payment of
Hopkins' Claim, and any Post-Petition charges or fees, Hopkins
shall withdraw its confessed judgment and dismiss all related
litigation with respect thereto.
Class 3 consists of General Secured Claims. Each holder of an
Allowed Secured Claim in Class 3 shall receive payment from the
proceeds of the sale of the Property. Debtor believes that the
Second Amended Plan will result in payment in full of Allowed Class
3 Claims. The treatment and consideration to be received by holders
of Class 3 Allowed Claims shall be in full settlement,
satisfactions, release and discharge of their respective Claims and
Liens.
Notwithstanding the foregoing, nothing herein shall modify, affect,
or impair that certain Promissory Note and Security Agreement
(Contract No. 001-801159473) ("Security Agreement") by and between
Caterpillar Financial Services Corporation ("CAT Financial") and
the Debtor and the liens of CAT Financial relating to a 2018
Caterpillar 259D Compact Track Loader (S/N FTL17024) (the "CAT
Equipment") granted thereunder. The Debtor shall continue to make
monthly payments at amounts set forth in the Security Agreement (1)
prior to confirmation of the plan as adequate protection to CAT
Financial and (2) following confirmation of the plan until CAT
Financial's claim, together with post-petition interest fees and
costs to the extent available under 11 U.S.C. 506(b), is paid full
from the sale of the Property.
Notwithstanding anything to the contrary in this Second Amended
Plan, Debtor shall not seek to sell the CAT Equipment absent the
agreement of CAT Financial or further order of Court. Should Debtor
fail to make monthly payments to CAT Financial required hereunder
and such failure continues for 7 days following notice to Debtor's
counsel, CAT Financial can immediately file an action in the
Bankruptcy Court to have the bankruptcy stay lifted as to its
claim.
Like in the prior iteration of the Plan, each holder of an Allowed
Unsecured Claim shall receive payment from the proceeds of the sale
of the Property. The treatment and consideration to be received by
holders of Class 4 Allowed Claims shall be in full settlement,
satisfactions, release and discharge of their respective Claims and
Liens.
The Second Amended Plan shall be funded by the sale of the Project
pursuant to Sections 363(b) and (f) of the Bankruptcy Code, subject
to the Stalking Horse Agreement. Alternatively, if the Section 363
sale does not occur, then Debtor will proceed to auction the
Property for sale with a floor sale price of $4,000,000.00. Debtor
believes this funding of the Second Amended Plan will maximize
proceeds available for distribution by allowing for an orderly sale
of the Property.
A full-text copy of the Second Amended Liquidating Plan dated March
19, 2024 is available at https://urlcurt.com/u?l=wn6bta from
PacerMonitor.com at no charge.
Attorney for the Debtor:
Mark S. Haltzman, Esq.
Eric B. Freedman, Esq.
SILVERANG, ROSENZWEIG & HALTZMAN, LLC
900 East Eighth Avenue, Suite 300
King of Prussia, PA 19406
Tel: (610) 263-0115
E-mail: MHaltzman@sanddlawyers.com
About D&S Enterprises
D&S Enterprises, Inc., a company in Bernville, Pa., filed Chapter
11 petition (Bankr. E.D. Pa. Case No. 23-13318) on Nov. 2, 2023,
with $1 million to $10 million in both assets and liabilities. Scot
Powell, president, signed the petition.
Judge Patricia M. Mayer oversees the case.
Mark S. Haltzman, Esq., at Silverang Rosendzweig & Haltzman, LLC
serves as the Debtor's legal counsel.
DAY ONE: Seeks to Hire Haselden Farrow as Bankruptcy Counsel
------------------------------------------------------------
Day One Distribution LLC and Zero Day Nutrition Company f/k/a GB
Nutrition Company seeks approval from the U.S. Bankruptcy Court for
the Southern District of Texas to hire Haselden Farrow PLLC as its
counsel.
The firm will render these services:
a. assist, advise and represent Debtors relative to the
administration of these Chapter 11 cases;
b. assist, advise and represent Debtors in analyzing its
assets and liabilities, investigating the extent and validity of
liens, and participating in and reviewing any proposed asset sales
or dispositions;
c. attend meetings and negotiate with the representatives of
creditors;
d. assist Debtors in the preparation, analysis and negotiation
of any Chapter 11 plan;
e. take all necessary action to protect and preserve the
interests of the Debtors;
f. appear, as appropriate, before this Court, the Appellate
Courts, Harris County District Courts and other Courts in which
matters may be heard and to protect the interests of the Debtors
before said Courts and the United States Trustee;
g. handle litigation that arises regarding claims asserted
against Debtors or each of its respective assets, and
h. perform all other necessary legal services in these cases.
The firm will be paid at these rates:
Melissa A. Haselden $550 hour
Elyse M. Farrow $425 hour
Associates/Contract Attorneys $400 to $500 hour
Legal Assistants/Paralegals/Law Clerks $135 to $210 hour
In aggregate, Haselden received $50,000 as retainer, plus $3,476 in
filing fees.
The firm will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Melissa A. Haselden, Esq., a partner at Haselden Farrow, PLLC,
disclosed in a court filing that the firm is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
The firm can be reached through:
Melissa A. Haselden, Esq.
HASELDEN FARROW PLLC
700 Milan, Site 1300
Houston, TX 77002
Tel: (832) 819-1149
About Day One Distribution LLC
Day One Distribution LLC is engaged in the manufacturing and sale
of sports nutrition and dietary supplements.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Tex. Case No. 24-31133) on March 14,
2024. In the petition signed by Michael Bischoff, as CEO of Zero
Day Nutrition Company, Managing Member, the Debtor disclosed up to
$10 million in both assets and liabilities.
Judge Eduardo V. Rodriguez oversees the case.
Melissa A. Haselden, Esq., at Haselden Farrow PLLC, represents the
Debtor as legal counsel.
DISTRICT 9 BREWING: Voluntary Chapter 11 Case Summary
-----------------------------------------------------
Debtor: District 9 Brewing Company, LLC
DBA Bevana Partners
DBA Community Brewing Ventures, LLC
DBA D9 Brewing Company
11138 Treynorth Dr., Unit A
Cornelius, NC 28031
Chapter 11 Petition Date: March 29, 2024
Court: United States Bankruptcy Court
Western District of North Carolina
Case No.: 24-30289
Judge: Hon. J. Craig Whitley
Debtor's Counsel: John C. Woodman, Esq.
ESSEX RICHARDS, P.A.
1701 South Blvd.
Charlotte, NC 28203
Tel: 704-377-4300
Fax: 704-372-1357
Email: jwoodman@essexrichards.com
Estimated Assets: $100,000 to $500,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Andrew Durstewitz as member 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/AVQH32I/District_9_Brewing_Company_LLC__ncwbke-24-30289__0001.0.pdf?mcid=tGE4TAMA
DYNASTY ACQUISITION: Moody's Affirms 'B3' CFR, Outlook Stable
-------------------------------------------------------------
Moody's Ratings affirmed Dynasty Acquisition Co., Inc.
("StandardAero") B3 corporate family rating, B3-PD probability of
default rating and B3 senior secured and backed senior secured
first lien bank credit facilities rating. Concurrently, Moody's
assigned a B3 rating to Standard Aero Limited's new senior secured
first lien term loan. Proceeds from the new term loan will be used
to refinance the company's existing term loan and partially repay a
portion of the company's existing 10% senior unsecured notes due
2027. Ratings on the existing term loan will be withdrawn upon
close of other transaction. Moody's also assigned a stable outlook
to Standard Aero Limited and affirmed its B3 senior secured first
lien bank credit facility rating. The outlook for StandardAero is
maintained stable.
"The ratings affirmation reflects StandardAero's position as a
leading provider of aftermarket engine maintenance, repair and
overhaul (MRO) services for aerospace and defense markets. The
affirmation also reflects Moody's expectation of healthy demand for
engine MRO work across StandardAero's various end-markets.
This will translate to modest earnings growth and a gradual
improvement in credit metrics," said Eoin Roche, Moody's Vice
President Senior Credit Officer.
RATINGS RATIONALE
The B3 CFR reflects high financial leverage and Moody's
expectations of limited free cash generation during 2024 and 2025.
Debt-to-EBITDA of around 6.5x as of September 2023 is elevated and
limits near-term financial flexibility. The rating also considers
the diversity and scale of StandardAero's engine MRO network which
operates across commercial, business aviation and military end
markets. Moody's recognizes StandardAero's position on a
diversified portfolio of engine platforms, including important
programs such as the CFM-56, PT6A, CF-34 and LEAP. Moody's
anticipates high single-digit sales growth and mid-single digit
earnings growth during 2024.
The stable outlook reflects Moody's expectations of continued
demand for engine MRO work across StandardAero's end-markets. This
will translate to modest earnings growth and gradual deleveraging.
Moody's views StandardAero's liquidity to be adequate. The company
has two revolving credit facilities, including a $400 million ABL
due May 2028 and a $150 million revolver also due May 2028. As of
December 2023, there were no drawings on either facility. Moody's
expects StandardAero to actively use its ABL throughout the year in
order to fund working capital needs and to finance occasional
tuck-in acquisitions. Maintenance covenants only apply when
borrowing availability thresholds under the revolvers are crossed
and test activation seems unlikely in the near-term. Moody's
expects StandardAero to be roughly free cash flow neutral during
2024 and 2025 in the face of a high interest burden, elevated
capital expenditures, and on-going working capital investments.
The B3 rating on the first lien credit facility is the same as the
CFR, reflecting the presence of the effectively senior asset-based
revolving credit facility and the effectively junior unsecured
notes.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Ratings could be upgraded if debt-to-EBITDA is sustained below 6x
with free cash flow-to-debt approaching the mid-single digits.
Ratings could be downgraded if debt-to-EBITDA is above 7.5x.
Sustained negative free cash flow, weakening liquidity or
EBITA/Interest sustained below 1x could also result in a
downgrade.
Dynasty Acquisition Co., Inc. is the acquisition vehicle through
which entities of The Carlyle Group acquired StandardAero Aviation
Holdings, Inc. in 2019.
StandardAero, headquartered in Scottsdale, Arizona, is a leading
provider of aircraft engine MRO and aircraft completion and
modification services to the commercial, business, military and
general aviation industries. Reported revenue for the twelve months
ended December 2023 was $4.6 billion.
The principal methodology used in these ratings was Aerospace and
Defense published in October 2021.
ELEMENT CONSTRUCTION: Seeks to Sell Lainey Lane Property by Auction
-------------------------------------------------------------------
Element Construction Corporation asked the U.S. Bankruptcy Court
for the District of Idaho for approval to auction its real property
located at 204 Lainey Lane, Idaho City, Idaho.
The company plans to sell the property through a public auction on
April 5, at 9:00 a.m. (Mountain Time) via telephone.
Element Construction had earlier accepted an offer from an
interested buyer whose bid of $475,000 will be the opening bid
price at the April 5 auction.
In order to participate at the public auction, competing bidders
must submit certified funds in the amount of $5,000 at least prior
to the start of the auction.
Under the proposed bid procedures, any competing bid must start at
$480,000. Meanwhile, the minimum bid increment is $5,000 although
interested buyers can bid in increments of more than $5,000 if
desired.
Following the auction, a hearing to approve the sale to the winning
bidder will be held on April 8, at 1:30 p.m. (Mountain Time) via
telephone.
The sale is expected to generate net proceeds of $437,000 after
payment of realtor's commission, property taxes and closing costs.
About Element Construction Corp
Based in Meridian, Idaho, Element Construction Corporation filed
voluntary Chapter 11 petition (Bankr. D. Id. Case No. 23-00602) on
Nov. 9, 2023, with up to $50,000 in assets and $1 million to $10
million in liabilities. Gary L. Rainsdon serves as Subchapter V
trustee.
Judge Noah G. Hillen oversees the case.
Foley Freeman, PLLC is the Debtor's legal counsel.
EMERALD TECHNOLOGIES: BlackRock DLC Marks $195,123 Loan at 28% Off
------------------------------------------------------------------
BlackRock Direct Lending Corp has marked its $195,123 loan extended
to Emerald Technologies (U.S.) AcquisitionCo, Inc to market at
$160,036 or 82% of the outstanding amount, as of December 31, 2023,
according to a disclosure contained in BlackRock DLC's Form 10-K
for the Fiscal year ended December 31, 2023, filed with the
Securities and Exchange Commission.
BlackRock DLC is a participant in a Senior Secured Revolver to
Emerald Technologies (U.S.) AcquisitionCo, Inc. The loan accrues
interest at a rate of 11.46% (SOFR (M) + 6.1%, 1% Floor) per annum.
The loan matures on December 29, 2026.
BlackRock Direct Lending Corp. is a Delaware corporation formed on
October 12, 2020 as an externally managed, closed-end,
non-diversified management investment company. The Company elected
to be regulated as a business development company under the
Investment Company Act of 1940, as amended. The Company invests
primarily in middle-market companies headquartered in North
America. The Company commenced operations on November 30, 2020.
Emerald Technologies AcquisitionCo., Inc. -- Emerald EMS --
headquartered in Salem, New Hampshire, is a tier-3 EMS provider of
high mix, low volume (HMLV) design, prototyping, assembly, and
lifecycle support services (supply chain management, order
fulfilment, and reverse logistics) for original equipment
manufacturer (OEM) customers in "non-traditional" end markets
including semiconductor equipment, industrial controls, A&D,
utility infrastructure, and medical. Emerald specializes in
high-complexity electronic assemblies, specifically printed circuit
boards (PCBA) and box builds/systems integrations, for
customer-specific products with significant design variations.
ENDO INTERNATIONAL: Plan to Slash $5 Billion Debt Confirmed
-----------------------------------------------------------
Drugmaker Endo International obtained a New York bankruptcy judge's
approval for its Chapter 11 plan that aims to cut more than $5
billion in debt and hand over ownership to its lenders.
According to Bloomberg, Judge James L. Garrity Jr. said Tuesday,
March 19, 2024, he'll approve Endo's restructuring plan and related
opioid pacts, a ruling that will effectively end the company's
bankruptcy, which began in August 2022.
Law360 notes that the Plan was confirmed roughly a month after the
Debtor finalized a $465 million deal to resolve criminal and civil
opioid claims.
Endo will be taken over by its lenders and said in December it
anticipates exiting Chapter 11 in the second quarter of 2024.
About Endo International
Endo International plc (OTC: ENDPQ) is a generics and branded
pharmaceutical company. It develops, manufactures, and sells
branded and generic products to customers in a wide range of
medical fields, including endocrinology, orthopedics, urology,
oncology, neurology, and other specialty areas. On the Web:
http://www.endo.com/
On Aug. 16, 2022, Endo International and certain of its
subsidiaries initiated voluntary prearranged Chapter 11 proceedings
(Bankr. S.D.N.Y. Lead Case No. 22-22549).
On May 25, 2023, Operand Pharmaceuticals Holdco II Limited and
Operand Pharmaceuticals Holdco III Limited each filed a voluntary
Chapter 11 petition also in the U.S. Bankruptcy Court for the
Southern District of New York. On May 31, 2023, Operand
Pharmaceuticals II Limited and Operand Pharmaceuticals III Limited
each filed a voluntary Chapter 11 petition also in the Southern
District of New York.
The Company's cases are jointly administered before the Honorable
James L. Garrity, Jr.
Endo initiated the financial restructuring process after reaching
an agreement with a group of its senior debtholders on a
transaction that would substantially reduce outstanding debt,
address remaining opioid and other litigation-related claims, and
best position Endo for the future. This would allow the Company to
advance its ongoing business transformation from a strengthened
financial position to create compelling value for its stakeholders
over the long term.
Endo's India-based entities are not part of the Chapter 11
proceedings. The Company has filed recognition proceedings in
Canada and expects to file similar proceedings in the United
Kingdom and Australia.
The Debtors tapped Skadden, Arps, Slate, Meagher & Flom, LLP as
legal counsel; PJT Partners, LP as investment banker; and Alvarez &
Marsal North America, LLC as financial advisor. Kroll Restructuring
Administration, LLC, is the claims agent and administrative
advisor. A Web site dedicated to the restructuring is at
http://www.endotomorrow.com/
Roger Frankel, the legal representative for future claimants in the
Chapter 11 cases, tapped Frankel Wyron LLP and Young Conaway
Stargatt & Taylor, LLP, as legal counsels, and Ducera Partners,
LLC, as investment banker.
ENGINEERED INVESTMENTS: Unsecureds to be Paid in Full in Plan
-------------------------------------------------------------
Engineered Investments LLC, filed with the U.S. Bankruptcy Court
for the Northern District of Georgia a Disclosure Statement with
regard to Plan of Reorganization dated March 21, 2024.
The Debtor was formed under the laws of the laws of the State of
Georgia on March 19, 2004 for the purpose of owing and managing
residential rental property. Jarred Reddick is the sole owner and
managing member.
The Debtor owns the residential properties at 21, Burbank Drive, 25
Burbank Drive, 590 English Avenue, 1762 Plymouth Ave, 755 Meldrum
St N.W and 1445 Westboro Dr. S.W, all in the City of Atlanta,
Georgia. Debtor's tenants are a mixture of singles families and
college students.
This petition was filed to prevent foreclosure by of NewRez, LLC
D/B/A Shellpoint Mortgage Servicing as Servicer for the Bank on New
York Mellon; FKA the Bank of New York, As Trustee for the
Certificate Holders of CW ALT, Inc., Alternative Loan Trust 2007
15CB, Mortgage Pass-Through Certificates, Series 2007-15CB.
("NewRez") on Debtor's residential property at 1762 Plymouth, Rd.
NW, Atlanta, GA.
Prior to initiating foreclosure proceeding NewRez, returned 5
payments to Debtor and refused to accept further payments. Debtor
request an explanation from NewRez. Debtor and NewRez could not
come to a resolution of the disputed balance due and the fees and
charges levied against the debtor. Debtor initiated this Chapter 11
Case on June 4, 2023.
The Chapter 11 filing has afforded the Debtor with breathing space
within which to stabilize its affairs and to reorganize
financially. Since the filing of this case Debtor has paid all
property taxes, maintained insurance on its properties and has kept
the properties in good repair. Additionally, Debtor tendered all
mortgage payments to its mortgagors.
Class 3 consists of the unsecured claim of Schloesgerg & Nembhardt
Capital Management LLC. The $6,500.00 unsecured claim of
Schloesgerg & Nembhardt Capital Management LLC. The claim of
Schloesgerg & Nembhardt Capital Management LLC shall be paid in
full with 90 days of the effective date of the plan.
Class 4 consists of equity claims. Jarrad Reddick is the only
equity security holder. Jarrad will retain his interest in the
organized debtor. The equity security holder will not be paid a
dividend so long as any unsecured creditors, claim herein remains
unpaid as provided for under this plan.
The Debtor will fund the Plan with the income it receives from its
rental properties. The currently provides $1,814.00 income per
month. Beginning, June 2024 when all of its properties are rented
Debtor's income expects its income to increase to $5,500.00
monthly.
A full-text copy of the Disclosure Statement dated March 21, 2024
is available at https://urlcurt.com/u?l=7qL712 from
PacerMonitor.com at no charge.
Attorney for the Debtor:
GIDDENS, MITCHELL & ASSOCIATES P.C.
Ken Mitchell, Esq.
3951 Snapfinger Parkway
Suite 555
Decatur, Georgia 30035
770-987-7007
E-mail: gmapclaw1@gmail.com
About Engineered Investments
Engineered Investments LLC was formed under the laws of the laws of
the State of Georgia on March 19, 2004 for the purpose of owing and
managing residential rental property.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Ga. Case No. 23-55094) on June 1,
2023.
Kenneth Mitchell, at GIDDENS, MITCHELL & ASSOCIATES P.C., is the
Debtor's legal counsel.
FARM CUP: Seeks to Hire RHM Law LLP as Bankruptcy Counsel
---------------------------------------------------------
Farm Cup Coffee LLC seeks approval from the U.S. Bankruptcy Court
for the Central District of California to hire RHM Law LLP as its
general bankruptcy counsel.
The firm's services include:
a. advise and assist regarding compliance with the
requirements of the United States Trustee;
b. advise regarding matters of bankruptcy law, including the
rights and remedies of the Debtor with respect to its assets and
the claims of creditors;
c. advise regarding cash collateral matters;
d. examine witnesses, claimants or adverse parties and prepare
reports, accounts and pleadings;
e. advise concerning the requirements of the Bankruptcy Code
and applicable rules;
f. negotiate, formulate and implement a Chapter 11 plan of
reorganization; and
g. make any appearances in the Bankruptcy Court on behalf of
the Debtor; and to take such other action and to perform such other
services as the Debtor may require.
The firm will be paid at these rates:
Partners $600 to $650 per hour
Associates $400 per hour
Paralegals $135 per hour
In addition, the firm will receive reimbursement for out-of-pocket
expenses incurred.
The retainer fee is $20,000.
Roksana Moradi-Brovia, Esq., a partner at RHM Law, disclosed in a
court filing that the firm is a "disinterested person" pursuant to
Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Roksana D. Moradi-Brovia, Esq.
Matthew D. Resnik, Esq.
RHM LAW, LLP
17609 Ventura Blvd., Suite 314
Encino, CA 91316
Tel: (818) 285-0100
Fax: (818) 855-7013
Email: roksana@RHMFirm.com
matt@RHMFirm.com
About Farm Cup Coffee LLC
Farm Cup Coffee LLC filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No.
24-11687) on March 5, 2024, listing up to $50,000 in assets and
$500,001 to $1 million in liabilities.
Judge Vincent P Zurzolo presides over the case.
Matthew D. Resnik, Esq. at Rhm Law LLP represents the Debtor as
counsel.
FIRSTENERGY CORP: Moody's Ups Rating on Unsecured Notes From Ba1
----------------------------------------------------------------
Moody's Ratings upgraded the senior unsecured rating of FirstEnergy
Corp. to Baa3 from Ba1. Simultaneously, Moody's assigned a Baa3
Issuer rating to FirstEnergy and withdrew its Ba1 corporate family
rating, Ba1-PD probability of default rating and SGL-1 Speculative
Grade Liquidity rating. The outlook is stable. Previously, the
rating was on review for upgrade.
This action concludes the review of FirstEnergy's ratings which
began on November 9, 2023.
FirstEnergy completed the sale of additional equity stake in
subsidiary FirstEnergy Transmission (FET, Baa2 stable) on March 25,
2024, raising approximately $3.5 billion. A large portion of the
proceeds will be used to improve its balance sheet. As a result,
FirstEnergy's credit metrics will improve significantly, with its
cash flow from operations before changes in working capital (CFO
pre-WC) to debt ratio increasing from around 9% at the end of 2023,
including non-recurring items, to nearly 14% after $2.3 billion of
proceeds are used to reduce its leverage, and with the assumption
that there are continued supportive regulatory outcomes at its
utilities.
FirstEnergy's ESG factors were a key consideration, specifically
governance, driving this rating action.
RATINGS RATIONALE
"The upgrade of FirstEnergy reflects the company's stronger
financial profile and Moody's expectation that this improvement
will be sustained for at least the next two to three years," stated
Jairo Chung, Moody's Vice President – Senior Credit Officer. Over
the last few years, FirstEnergy has taken actions to reduce
leverage at the parent level and to enhance its financial
flexibility to support its regulated utility subsidiaries' growing
capital investment needs. Over the same period, the company also
addressed weaknesses in its corporate governance, improving its
internal control and reporting structure, hiring new key senior
management team members and replacing board members.
FirstEnergy's Baa3 rating incorporates its position as a utility
holding company with diverse, regulated electric utility operations
that are mostly wires-only across six jurisdictions. Moody's expect
the company to produce stronger CFO pre-WC to debt ratio well above
11%, supportive of its Baa3 rating considering the relatively low
risk nature of transmission and distribution utilities. All of
these subsidiaries operate in a credit supportive regulatory
environments and Moody's expect them to remain stable and
predictable.
Over the last three years, FirstEnergy has raised approximately $7
billion of equity and used the proceeds both to improve its balance
sheet and to fund rate base growth. Not only has FirstEnergy
reduced the aggregate parent debt level, it also improved its
underfunded pension obligation position, which has helped to
increase coverage metrics.
As part of the governance changes at the company, FirstEnergy
reorganized its operations to both increase efficiencies and
further separate its regulated utility subsidiaries from the parent
company. For example, FirstEnergy successfully executed a
consolidation of its Pennsylvania utility operation under one
entity, FirstEnergy Pennsylvania Electric Company (FE PA, A3
stable), last year. In addition, FirstEnergy and its subsidiaries
amended their credit agreements such that the parent and
subsidiaries have separate credit facilities.
Rating outlook
The stable outlook reflects Moody's expectation that FirstEnergy
will maintain its recently improved credit profile on a sustained
basis with its CFO pre-WC to debt ratio remaining above 11%. It
also incorporates Moody's view that the regulatory environments in
which its utility subsidiaries operate will remain supportive.
Moody's has decided to withdraw the ratings for its own business
reasons.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Factors that could lead to an upgrade
A rating upgrade could be considered if FirstEnergy further
improves its credit profile such that its CFO pre-WC to debt is
sustained above 13%. Any rating upgrade would be predicated on
continued regulatory support in its key Jurisdictions, such as
Ohio, Pennsylvania and New Jersey, resulting in timely investment
cost recovery and credit supportive regulatory outcomes.
Factors that could lead to a downgrade
A rating downgrade could be considered if FirstEnergy's financial
profile deteriorates again such that its CFO pre-WC to debt falls
below 11% on a sustained basis. Furthermore, if any of its key
regulatory environments become adversarial, adversely impacting
FirstEnergy's cost recovery provisions or regulatory outcomes, a
rating downgrade could be possible.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) CONSIDERATONS
FirstEnergy's overall credit impact score is changed to CIS-3 from
CIS-4 which reflects the company's improved corporate governance as
it has addressed its previously weak internal control and reporting
structure. FirstEnergy also made changes to its key senior
management positions and board members. As a result, FirstEnergy's
governance Issuer Profile Score (IPS) was updated to G-3 from G-4.
Its environmental IPS and social IPS remain unchanged at E-3 and
S-3, respectively.
LIST OF AFFECTED RATINGS
Issuer: FirstEnergy Corp.
Upgrades:
Senior Unsecured Bank Credit Facility, Upgraded to Baa3 from Ba1
Senior Unsecured Regular Bond/Debenture, Upgraded to Baa3 from
Ba1
Senior Unsecured Shelf, Upgraded to (P)Baa3 from (P)Ba1
Withdrawals:
Corporate Family Rating, Withdrawn, previously rated Ba1
Probability of Default Rating, Withdrawn, previously rated Ba1-PD
Speculative Grade Liquidity Rating, Withdrawn, previously rated
SGL-1
Outlook Actions:
Outlook, Changed To Stable From Rating Under Review
The principal methodology used in these ratings was Regulated
Electric and Gas Utilities published in June 2017.
Headquartered in Akron, Ohio, FirstEnergy is a utility holding
company projected too have approximately $29 billion of rate base
in 2024, serving more than six million customers in five states.
FIVE RIVERS: Examiner Taps Schuil Ag Real Estate as Broker
----------------------------------------------------------
Scott M. Sackett, examiner of the estate of Five Rivers Land
Company, LLC, seeks approval from the U.S. Bankruptcy Court for the
Central District of California to employ Schuil Ag Real Estate as
his brokers.
The broker's services include:
a. ordering, analyzing, and preparing documentation necessary
to market the properties for sale;
b. listing the properties for sale on appropriate listing
services based on the nature of the properties, responding to
purchase inquiries, and soliciting reasonable offers for the
properties, or any part of the properties;
c. conveying all reasonable purchase offers to the Examiner,
advising the Examiner concerning those offers, and, subject to the
Examiner's approval, confirming acceptance of offers; and
d. on behalf of the Examiner, preparing any and all documents
required to consummate the sale(s) of all or part of the
properties.
The brokers will receive a total commission of 5 percent of the
gross sale price for the properties. if the buyer who purchases the
properties or any portion thereof, does not have a broker, the
commission to the brokers shall be reduced to 4 percent.
As disclosed in the court filings, the brokers are disinterested
and do not hold an adverse interest to the bankruptcy estate with
respect to the matter for which the Brokers are to be employed.
The brokers can be reached through:
Marc Schuil
Schuil Ag Real Estate
5020 W Mineral King Ave
Visalia, CA 93291
Telephone: (559) 734-1700
Facsimile: (559) 734-7848
About Five Rivers Land Company
Five Rivers Land Company, LLC is engaged in fruit and tree nut
farming in Newport Beach, Calif.
Five Rivers Land Company filed Chapter 11 petition (Bankr. C.D.
Calif. Case No. 23-11167) on June 6, 2023, with $10 million to $50
million in both assets and liabilities. Judge Theodor Albert
oversees the case.
The Debtor tapped Garrick A. Hollander, Esq., at Winthrop Golubow
Hollander, LLP as bankruptcy counsel and Katten Muchin Rosenman,
LLP as special litigation counsel.
FTX GROUP: Fee Examiner Seeks to Give Sullivan $31-Mil. in Fees
---------------------------------------------------------------
Emlyn Cameron of Law360 reports that a Delaware bankruptcy judge
should give Sullivan & Cromwell LLP about $31 million in fees for
its work in FTX Trading Ltd.'s case from August through October
2023, the Chapter 11 fee examiner said.
On Dec. 15, 2023, Sullivan & Cromwell filed its Fourth Interim Fee
Application for the period from Aug. 1, 2023 through Oct. 31, 2023,
seeking $31,759,526 in fees and $64,897 in expenses.
During the Fourth Interim Fee Period, S&C advised the Debtors on a
wide variety of complex matters, including investigating customer
claims; work on tax matters and asset security; global regulatory
matters; continued work on Joint Provisional Liquidator matters in
Australia and The Bahamas; continued development of a document
depository to centralize responses to and requests from government
and regulatory authorities; continued work on asset recovery;
pursuit of claims in other cryptocurrency Chapter 11 cases; and
continuing to pursue asset sales, among other things.
The Fee Examiner again identified a number of areas of concern,
including possible overstaffing, apparently excessive meeting and
hearing attendance, and various technical and procedural
deficiencies with respect to some time entries (including vague and
lumped entries). The Fee Examiner also identified arguably
unnecessary time spent monitoring and attending the Sam
Bankman-Fried criminal proceedings and time spent reading the book
Going Infinite. After an extensive exchange of information and
discussion, the stipulated adjustments to fees and expenses are
sufficient to address the Fee Examiner’s concerns, with two
continuing Reserved Issues: (1) fees incurred to prepare interim
reports and (2) fees devoted to the investigation and prosecution
of avoidance actions that may not have been described with
sufficient detail to allow for a determination of which avoidance
matters they relate to. With those express reservations, the Fee
Examiner now recommends Court approval of the S&C Fourth Fee
Application.
About FTX Group
FTX was the world's second-largest cryptocurrency firm. FTX is a
cryptocurrency exchange built by traders, for traders. FTX offered
various products, including industry-first derivatives, options,
volatility products and leveraged tokens.
Then CEO and co-founder Sam Bankman-Fried said Nov. 10, 2022, that
FTX paused customer withdrawals after it was hit with roughly $5
billion worth of withdrawal requests.
Faced with liquidity issues, FTX on Nov. 9 struck a deal to sell
itself to its giant rival Binance, but Binance walked away from the
deal amid reports on FTX regarding mishandled customer funds and
alleged US agency investigations.
At 4:30 a.m. on Nov. 11, Bankman-Fried ultimately agreed to step
aside, and restructuring vet John J. Ray III was quickly named new
CEO.
FTX Trading Ltd (d/b/a FTX.com), West Realm Shires Services Inc.
(d/b/a FTX US), Alameda Research Ltd. and certain affiliated
companies then commenced Chapter 11 proceedings (Bankr. D. Del.
Lead Case No. 22-11068) on an emergency basis on Nov. 11, 2022.
Additional entities sought Chapter 11 protection on Nov. 14, 2022.
FTX Trading and its affiliates each listed $10 billion to $50
billion in assets and liabilities, making FTX the biggest
bankruptcy filer in the US this year.
According to Reuters, SBF shared a document with investors on Nov.
10, 2022, showing FTX had $13.86 billion in liabilities and $14.6
billion in assets. However, only $900 million of those assets were
liquid, leading to the cash crunch that ended with the company
filing for bankruptcy.
The Hon. John T. Dorsey is the case judge.
The Debtors tapped Sullivan & Cromwell, LLP as bankruptcy counsel;
Landis Rath & Cobb, LLP as local counsel; and Alvarez & Marsal
North America, LLC as financial advisor. Kroll is the claims agent,
maintaining the page https://cases.ra.kroll.com/FTX/Home-Index
The Official Committee of Unsecured Creditors tapped Paul Hastings
as counsel, FTI Consulting, Inc., as financial advisor, and
Jefferies LLC as the investment banker. Young Conaway Stargatt &
Taylor LLP is the Committee's Delaware and conflicts counsel.
Montgomery McCracken Walker & Rhoads LLP, led by partners Gregory
T. Donilon, Edward L. Schnitzer, and David M. Banker, is
representing Sam Bankman-Fried in the Chapter 11 cases.
White-collar crime specialist Mark S. Cohen has reportedly been
hired to represent SBF in litigation. Lawyers at Paul Weiss
previously represented SBF but later renounced representing the
entrepreneur due to a conflict of interest.
FTX GROUP: Investors Dash to Buy Shares as Victims Recovery Seen
----------------------------------------------------------------
Lucca de Paoli, Steven Church and Jonathan Randles of Bloomberg
News report that FTX Group's growing cash pile while liquidating in
Chapter 11 is sparking a dash for shares in the defunct firm.
Investors are trying to buy up shares of defunct crypto exchange
FTX on the off chance that equity holders could see a recovery if
victims who lost billions are made whole. Funds holding creditor
claims -- which FTX looks more and more likely to repay in full --
have also sought to buy preferred shares in the closely held
company in recent months, according to people with knowledge of the
matter.
About FTX Group
FTX was the world's second-largest cryptocurrency firm. FTX is a
cryptocurrency exchange built by traders, for traders. FTX offered
various products, including industry-first derivatives, options,
volatility products and leveraged tokens.
Then CEO and co-founder Sam Bankman-Fried said Nov. 10, 2022, that
FTX paused customer withdrawals after it was hit with roughly $5
billion worth of withdrawal requests.
Faced with liquidity issues, FTX on Nov. 9 struck a deal to sell
itself to its giant rival Binance, but Binance walked away from the
deal amid reports on FTX regarding mishandled customer funds and
alleged US agency investigations.
At 4:30 a.m. on Nov. 11, Bankman-Fried ultimately agreed to step
aside, and restructuring vet John J. Ray III was quickly named new
CEO.
FTX Trading Ltd (d/b/a FTX.com), West Realm Shires Services Inc.
(d/b/a FTX US), Alameda Research Ltd. and certain affiliated
companies then commenced Chapter 11 proceedings (Bankr. D. Del.
Lead Case No. 22-11068) on an emergency basis on Nov. 11, 2022.
Additional entities sought Chapter 11 protection on Nov. 14, 2022.
FTX Trading and its affiliates each listed $10 billion to $50
billion in assets and liabilities, making FTX the biggest
bankruptcy filer in the US this year.
According to Reuters, SBF shared a document with investors on Nov.
10, 2022, showing FTX had $13.86 billion in liabilities and $14.6
billion in assets. However, only $900 million of those assets were
liquid, leading to the cash crunch that ended with the company
filing for bankruptcy.
The Hon. John T. Dorsey is the case judge.
The Debtors tapped Sullivan & Cromwell, LLP as bankruptcy counsel;
Landis Rath & Cobb, LLP as local counsel; and Alvarez & Marsal
North America, LLC as financial advisor. Kroll is the claims agent,
maintaining the page https://cases.ra.kroll.com/FTX/Home-Index
The Official Committee of Unsecured Creditors tapped Paul Hastings
as counsel, FTI Consulting, Inc., as financial advisor, and
Jefferies LLC as the investment banker. Young Conaway Stargatt &
Taylor LLP is the Committee's Delaware and conflicts counsel.
Montgomery McCracken Walker & Rhoads LLP, led by partners Gregory
T. Donilon, Edward L. Schnitzer, and David M. Banker, is
representing Sam Bankman-Fried in the Chapter 11 cases.
White-collar crime specialist Mark S. Cohen has reportedly been
hired to represent SBF in litigation. Lawyers at Paul Weiss
previously represented SBF but later renounced representing the
entrepreneur due to a conflict of interest.
FTX GROUP: Luxury Jet Used by SBF, Associates Seized by Feds
------------------------------------------------------------
Jonathan Randles of Bloomberg News reports a luxury jet that was
intended to ferry FTX co-founder Sam Bankman-Fried and other
executives to-and-from the Bahamas before the crypto platform went
bankrupt is being turned over to US authorities.
The jet, an Embraer Legacy EMB-135BJ, is being flown from the
Bahamas to Florida where it will be surrendered to law enforcement,
according to papers filed Friday, March 23, 2024, by federal
prosecutors. US Marshals have already seized a second jet that also
was meant to be used by FTX. Authorities are seeking court
permission to sell both aircraft.
About FTX Group
FTX was the world's second-largest cryptocurrency firm. FTX is a
cryptocurrency exchange built by traders, for traders. FTX offered
various products, including industry-first derivatives, options,
volatility products and leveraged tokens.
Then CEO and co-founder Sam Bankman-Fried said Nov. 10, 2022, that
FTX paused customer withdrawals after it was hit with roughly $5
billion worth of withdrawal requests.
Faced with liquidity issues, FTX on Nov. 9 struck a deal to sell
itself to its giant rival Binance, but Binance walked away from the
deal amid reports on FTX regarding mishandled customer funds and
alleged US agency investigations.
At 4:30 a.m. on Nov. 11, Bankman-Fried ultimately agreed to step
aside, and restructuring vet John J. Ray III was quickly named new
CEO.
FTX Trading Ltd (d/b/a FTX.com), West Realm Shires Services Inc.
(d/b/a FTX US), Alameda Research Ltd. and certain affiliated
companies then commenced Chapter 11 proceedings (Bankr. D. Del.
Lead Case No. 22-11068) on an emergency basis on Nov. 11, 2022.
Additional entities sought Chapter 11 protection on Nov. 14, 2022.
FTX Trading and its affiliates each listed $10 billion to $50
billion in assets and liabilities, making FTX the biggest
bankruptcy filer in the US this year.
According to Reuters, SBF shared a document with investors on Nov.
10, 2022, showing FTX had $13.86 billion in liabilities and $14.6
billion in assets. However, only $900 million of those assets were
liquid, leading to the cash crunch that ended with the company
filing for bankruptcy.
The Hon. John T. Dorsey is the case judge.
The Debtors tapped Sullivan & Cromwell, LLP as bankruptcy counsel;
Landis Rath & Cobb, LLP as local counsel; and Alvarez & Marsal
North America, LLC as financial advisor. Kroll is the claims agent,
maintaining the page https://cases.ra.kroll.com/FTX/Home-Index
The Official Committee of Unsecured Creditors tapped Paul Hastings
as counsel, FTI Consulting, Inc., as financial advisor, and
Jefferies LLC as the investment banker. Young Conaway Stargatt &
Taylor LLP is the Committee's Delaware and conflicts counsel.
Montgomery McCracken Walker & Rhoads LLP, led by partners Gregory
T. Donilon, Edward L. Schnitzer, and David M. Banker, is
representing Sam Bankman-Fried in the Chapter 11 cases.
White-collar crime specialist Mark S. Cohen has reportedly been
hired to represent SBF in litigation. Lawyers at Paul Weiss
previously represented SBF but later renounced representing the
entrepreneur due to a conflict of interest.
FTX GROUP: Probe to Investigate Sullivan Tainted by Conflicts
-------------------------------------------------------------
Justin Wise of Bloomberg Law reports that FTX probe to test whether
law giant, Sullivan & Cromwell, is tainted by conflicts.
A judge's approval Wednesday, March 20, 2024, of an investigation
into Sullivan & Cromwell's relationship with FTX will test the
elite Wall Street firm's assertion that its pre-bankruptcy
connections with the crypto exchange were limited.
US Bankruptcy Judge John Dorsey cleared former Unabomber prosecutor
Robert Cleary to examine whether the law firm's work for FTX and
its former leader Sam Bankman-Fried created any conflicts of
interest when it began leading the exchange through Chapter 11
proceedings. The firm has since billed more than $170 million to
the FTX estate during the bankruptcy.
"A lawyer is obligated to provide the beneficiary of the work with
undivided loyalty and disinterested advice," said Georgetown Law
ethics counsel Michael Frisch. "Did the lawyer have some interest
either disclosed or not that impairs the ability to provide that
disinterested advice? That is really the overarching question."
Cleary's investigation adds to scrutiny Sullivan & Cromwell faces
due to its FTX work. A February investor lawsuit accuses the firm
of aiding FTX schemes ahead of the crypto exchange's collapse, and
a pair of law professors in a paper last week questions Sullivan &
Cromwell statements in the days ahead of the bankruptcy.
The firm may have used "deceptive tactics" to seize control of FTX
from Bankman-Fried, Temple University law professor Jonathan Lipson
and University of Pennsylvania law professor David Skeel claim in
the paper, which draws on emails produced by Bankman-Fried in his
criminal case.
Sullivan & Cromwell declined to comment on Wednesday, March 20,
2024. The firm said in January 2023 that it never served as primary
outside counsel to any FTX entity. "The firm had a limited and
largely transactional relationship with FTX and certain affiliates
prior to the bankruptcy," Sullivan & Cromwell said in a statement
then.
FTX and more than a hundred of its affiliates filed for bankruptcy
in November 2022, listing at least $10 billion in assets and
liabilities. A jury in Manhattan convicted Bankman-Fried a year
later of seven charges, including wire fraud and conspiracy. US
District Judge Lewis A. Kaplan in New York is scheduled to sentence
Bankman-Fried on March 28, 2024.
Cleary's Investigation
Dorsey, the bankruptcy judge, said Wednesday he will enter an order
"as soon as possible" allowing Cleary, a New York-based litigator
at Patterson Belknap, to conduct his investigation. Cleary will be
required to submit a report summarizing aspects of the
investigation within two months.
The US Trustee, an arm of the Justice Department that monitors
corporate bankruptcies, has pushed for the outside probe since the
onset of the bankruptcy. Dorsey originally rejected the request,
saying such a probe would likely cost creditors more than $100
million. However, the Third Circuit reversed the ruling in an
opinion that cited some of the conflicts questions raised by
Sullivan & Cromwell's role.
The Trustee later tapped Cleary to conduct the probe. Cleary served
as the US Attorney for both the District of New Jersey and the
Southern District of Illinois and was lead prosecutor of Ted
Kaczynski, known as the Unabomber, who killed three people and
injured 23 with bombs across 17 years last century.
Cleary's investigation will examine whether there are conflicts of
interest involving Sullivan & Cromwell "which were not adequately
addressed" when the firm applied to be lead counsel, according to a
proposed Justice Department order. A central feature of the review
will likely be whether the firm intentionally or recklessly omitted
things about its FTX relationship, Frisch said.
The Trustee has also asked Cleary to look at past investigations by
FTX's new management team, its creditors and government regulators,
and to scrutinize if additional employees of Bankman-Fried' failed
crypto exchange were involved in fraudulent activity before its
collapse in November 2022. Cleary will also review any
investigations conducted around FTX’s use of its native token,
FTT, to inflate its value, and make recommendations if further
inquiries are needed.
Sullivan & Cromwell's Work
Sullivan & Cromwell has acknowledged beginning to work for FTX
after a former partner, Ryne Miller, joined FTX US as its general
counsel. The firm earned over $8 million for work on 20 FTX matters
in the 16 months before its downfall.
The firm has said in prior filings that Bankman-Fried handed over
control of the company to restructuring expert John Ray after
consulting with his father, the Stanford law professor Joseph
Bankman, and three personal lawyers.
Judge Dorsey previously dismissed attacks from Bankman-Fried and
others against the firm as "hearsay and rumors." "There is no
evidence of any actual conflict here," Dorsey said during a January
2023 hearing approving the firm's role.
Sullivan & Cromwell has defended the high fees since taking FTX
into Chapter 11, arguing the costs will be modest compared to the
recoveries. Andy Dietderich, the firm's bankruptcy practice leader,
said in a January hearing that customers and creditors who can
prove their losses will likely get back all of their money.
Sullivan & Cromwell and the Silicon Valley law firm Fenwick & West
are among several institutions with an FTX link that have been hit
with a lawsuit from a proposed class of investors. Sullivan &
Cromwell, represented by Hunton Andrews Kurth managing partner
Samuel Danon, is due to file its first response in the case by May
13, 2024.
About FTX Group
FTX was the world's second-largest cryptocurrency firm. FTX is a
cryptocurrency exchange built by traders, for traders. FTX offered
various products, including industry-first derivatives, options,
volatility products and leveraged tokens.
Then CEO and co-founder Sam Bankman-Fried said Nov. 10, 2022, that
FTX paused customer withdrawals after it was hit with roughly $5
billion worth of withdrawal requests.
Faced with liquidity issues, FTX on Nov. 9 struck a deal to sell
itself to its giant rival Binance, but Binance walked away from the
deal amid reports on FTX regarding mishandled customer funds and
alleged US agency investigations.
At 4:30 a.m. on Nov. 11, Bankman-Fried ultimately agreed to step
aside, and restructuring vet John J. Ray III was quickly named new
CEO.
FTX Trading Ltd (d/b/a FTX.com), West Realm Shires Services Inc.
(d/b/a FTX US), Alameda Research Ltd. and certain affiliated
companies then commenced Chapter 11 proceedings (Bankr. D. Del.
Lead Case No. 22-11068) on an emergency basis on Nov. 11, 2022.
Additional entities sought Chapter 11 protection on Nov. 14, 2022.
FTX Trading and its affiliates each listed $10 billion to $50
billion in assets and liabilities, making FTX the biggest
bankruptcy filer in the US this year.
According to Reuters, SBF shared a document with investors on Nov.
10, 2022, showing FTX had $13.86 billion in liabilities and $14.6
billion in assets. However, only $900 million of those assets were
liquid, leading to the cash crunch that ended with the company
filing for bankruptcy.
The Hon. John T. Dorsey is the case judge.
The Debtors tapped Sullivan & Cromwell, LLP as bankruptcy counsel;
Landis Rath & Cobb, LLP as local counsel; and Alvarez & Marsal
North America, LLC as financial advisor. Kroll is the claims agent,
maintaining the page https://cases.ra.kroll.com/FTX/Home-Index
The Official Committee of Unsecured Creditors tapped Paul Hastings
as counsel, FTI Consulting, Inc., as financial advisor, and
Jefferies LLC as the investment banker. Young Conaway Stargatt &
Taylor LLP is the Committee's Delaware and conflicts counsel.
Montgomery McCracken Walker & Rhoads LLP, led by partners Gregory
T. Donilon, Edward L. Schnitzer, and David M. Banker, is
representing Sam Bankman-Fried in the Chapter 11 cases.
White-collar crime specialist Mark S. Cohen has reportedly been
hired to represent SBF in litigation. Lawyers at Paul Weiss
previously represented SBF but later renounced representing the
entrepreneur due to a conflict of interest.
FULLER AND FULLER: Taps Jason Ward Law as Bankruptcy Counsel
------------------------------------------------------------
Fuller and Fuller Enterprises LLC seeks approval from the U.S.
Bankruptcy Court for the District of South Carolina to hire Jason
Ward Law, LLC as its bankruptcy counsel.
Jason Ward Law will provide legal services which may be necessary
in the administration of the Debtor's Chapter 11 case, including
the preparation or amendment of schedules, representation in
contested matters, preparation of a plan of reorganization and
disclosure statement, and other matters which may arise during the
administration of the case.
The firm will be paid at these hourly rates:
Jason Ward $325
Paralegals and support staff $125
The firm has agreed to accept a pre-bankruptcy retainer in the
amount of $5,000.
Jason Ward Law is a disinterested person as that term is defined in
11 U.S.C. Sec. 101(14), according to court filings.
The firm can be reached through:
Jason M. Ward, Esq.
Jason Ward Law, LLC
311 Pettigru St.
Greenville, SC 29601
Phone: (864) 239-0007
Emai: Jason@wardlawsc.com
About Fuller and Fuller Enterprises
Fuller and Fuller Enterprises, LLC is primarily engaged in renting
and leasing real estate properties.
Fuller and Fuller Enterprises filed a petition for relief under
Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. D.S.C.
Case No. 23-00640) on March 6, 2023. In the petition filed by Keith
Eric Fuller, as owner, the Debtor reported assets between $1
million and $10 million and liabilities between $500,000 and $1
million.
The Debtor is represented by Jason M. Ward, Esq., at Jason Ward
Law, LLC.
GAP INC: S&P Alters Outlook to Stable, Affirms 'BB' ICR
-------------------------------------------------------
S&P Global Ratings revised its outlook on San Francisco-based
specialty apparel retailer The Gap Inc. to stable from negative and
affirmed all ratings on the company, including its 'BB' issuer
credit and issue-level ratings its senior unsecured notes.
S&P said, "The stable outlook reflects our expectation that the
company's consolidated operating performance will continue to
incrementally improve off recent results over the next 12 months.
We believe Gap Inc. will use its good free operating cash flow
(FOCF) and meaningful cash balances to maintain credit metrics at
recent levels, including S&P Global Ratings-adjusted debt to EBITDA
of 1.9x."
The outlook revision reflects Gap Inc.'s improving operating
performance--particularly at its two largest banners--amid a
challenging macroeconomic backdrop. Comparable sales at Old Navy
and Gap brands maintained or improved sequentially over the last
three quarters of fiscal 2023, leading to Old Navy comps down 1%
and Gap brand comps up 1% for the year. Banana Republic and Athleta
experienced more pronounced negative comps throughout 2023. Banana
Republic comp was down 8% in each of the first three quarters and
Athleta comp was down in the double-digit percent area in three of
the four quarters. However, this improved in the fourth quarter,
resulting in annual comps of negative 7% and negative 12% for
Banana Republic and Athleta, respectively.
Despite more progress needed at the Banana Republic and Athleta
banners, improvements at Old Navy and Gap brand—including market
share gains for each in 2023—are significant because those
banners represent more than 75% of the company's overall sales. S&P
believes continuing momentum across the company's brands will lead
to relatively flat sales in fiscal 2024.
Gap Inc.'s credit metrics strengthened as margins improved and debt
eased in 2023. The company's S&P Global Ratings-adjusted leverage
rose to 3.7x as of the end of fiscal 2022. During that year, its
S&P Global Ratings-adjusted EBITDA fell below $1.4 billion and S&P
Global Ratings-adjusted debt neared $5 billion as revolver
outstandings were $350 million (compared with $0 currently) and
cash was $1.2 billion (compared with almost $1.9 billion
currently). Since then, in the most recent fiscal year ended
February 2024, its S&P Global Ratings-adjusted EBITDA approached $2
billion (a level not seen in two years) and S&P Global
Ratings-adjusted debt fell more than $1 billion to $3.8 billion,
resulting in leverage of 1.9x. As a result of the company's
improved leverage, we revised the financial risk profile to
intermediate from significant.
The Gap Inc.'s S&P Global Ratings-adjusted EBITDA margins improved
to 13.4% from 8.6% over the last two fiscal years. This improvement
was driven by more effective sourcing strategies, lower commodity
costs, reduced promotion, leaner inventories, and better
assortments. S&P expects margins to further improve in fiscal 2024
and for leverage to hold near 2x for this and next fiscal year.
A prolonged turnaround at Banana Republic and Athleta that hampers
Gap Inc.'s overall execution is a risk. The company's goal of
reestablishing the Banana Republic brand and reversing missteps at
Athleta provide it the opportunity to exit the next 12-24 months
with four banners exhibiting strong growth and margin potential.
However, it will take considerable time to execute on brand revival
and wean customers off of what was previously a highly promotional
environment. An inability to execute on these initiatives would be
a headwind for the overall company's prospects and devote
additional resources to address.
S&P said, "While we expect performance at the two brands to improve
over the next two years, we ascribe a degree of risk to plan
execution. We also view Gap Inc.'s recent volatile margins and
leverage as a risk to the rating, which could reemerge following
potential operational missteps. As a result, we apply a negative
comparable ratings modifier to the rating.
"The stable outlook reflects our expectation that Gap Inc.'s
consolidated operating performance will continue to incrementally
improve off recent results over the next 12 months. We believe the
company will use its good FOCF and meaningful cash balances to
maintain credit metrics at recent levels, including S&P Global
Ratings-adjusted debt to EBITDA of 1.9x.
"We could lower our rating on Gap Inc. if we expect profitability
or cash flow to deteriorate, potentially due to significant
execution setbacks at Banana Republic or Athleta, heightened
inventory markdowns, or strong negative macroeconomic trends. Under
this scenario, the company's performance turnaround could slow or
reverse, and loss of market share would cause us to assess its
business less favorably. This would likely coincide with reduced
profitability leading to leverage being sustained above 3x on a
sustained basis."
S&P could raise its rating on Gap Inc. if S&P views its recent
operating performance as sustainable while maintaining leverage
near current levels over the long term. This could occur if:
-- It achieves performance milestones relating to the turnaround
of Banana Republic and Athleta; and
-- It maintains S&P Global Ratings-adjusted EBITDA margins of no
less than its current 14% level.
GBT JERSEYCO: S&P Places 'B+' ICR on Watch Positive on CWT Deal
---------------------------------------------------------------
S&P Global Ratings placed all its ratings on GBT JerseyCo Ltd.
(American Express Global Business Travel or Amex GBT), including
its 'B+' issuer credit rating on CreditWatch with positive
implications. At the same time, S&P assigned its 'B+' rating to
Global Business Travel Group Inc. (GBTG), the ultimate parent of
borrower and operating subsidiary GBT JerseyCo, and also placed it
on CreditWatch positive.
S&P said, "The CreditWatch positive placement reflects our view
that the potential transaction can result in a stronger credit
profile for the group than that of stand-alone Amex GBT. This is
due to the expected increase in global presence and potential
synergies from the combination. We could raise ratings if the deal
receives regulatory and other approvals.
"The CreditWatch positive reflects Amex GBT's continued
deleveraging on an organic basis and our view that we expect the
combined company could have stronger creditworthiness than
stand-alone Amex GBT. On March 25, 2024, Amex GBT announced a
cash-and-stock deal to acquire CWT, which we expect to close in the
second half of 2024. Amex GBT will benefit from increased global
presence of an additional 4,000 customers and total transaction
value growth of approximately 45%. The combined company will also
benefit from a more diverse set of customers, including CWT's
global multinational, military, and government clients and within
Amex GBT's customer base of small to midsize enterprises.
Furthermore, we believe the company will benefit from increased
choice and volume by its customer base on software platforms if the
deal passes regulatory scrutiny; which could mitigate potential
EBITDA volatility caused by business travel downturns. The company
has also identified run-rate synergy opportunities of approximately
$155 million within the first three years."
Offsetting these factors is the execution risk and high cost of
integrating the two platforms. However, Amex GBT has a track record
of delivering significant synergies from its previous acquisitions
of HRG in July 2018 and Egencia in November 2021.
For the full year 2023, Amex GBT's revenue increased 24% from the
same period in 2022, driven by higher total transaction value from
the business travel recovery, market share gains, and strong
revenue yields. S&P said, "We expect the company to organically
increase revenue in 2024 in the high-single-digit percent area. We
also project EBITDA margins to expand this year, stemming from
realization of synergies from Egencia, absence of roughly $30
million of integration costs incurred in 2023, and benefits from
reorganization. As such, we expect Amex GBT to improve S&P Global
Ratings-adjusted leverage to approach 3.5x in 2024 from 6.0x in
2023 on an organic basis."
S&P said, "Pro forma for its proposed acquisition of CWT, we expect
the company to increase revenue in 2024 about 35%-40% and further
reduce leverage below our 3.5x upgrade trigger for the 'B+' rating.
We expect CWT to contribute roughly $50 million of reported EBITDA
on an annualized basis, excluding synergies, and most of the
transaction to be funded with an equity raise.
Inflationary pressures and heightened interest rates affecting
business travel volumes pose risks to Amex GBT. Although global air
passenger traffic has been relatively resilient despite recent
macroeconomic headwinds, we believe demand will likely slow in 2024
from a strong 2023. If the economy slows, companies likely will
scale back on nonessential business travel, especially with the
increased prevalence of virtual meetings. This is offset by the
company's recent new business wins. While our base-case forecast
incorporates good revenue and EBITDA growth next year, we believe
higher interest rates and market volatility could create risk to
the company's deleveraging path and cash generation.
"We expect to address the CreditWatch once we are confident the
proposed transaction can achieve regulatory and other approvals to
close in the second half of 2024. We will assess the combined
company's business position, synergy opportunities, and pro forma
credit metrics as more information becomes available. The
CreditWatch for the issue-level ratings assumes Amex GBT will raise
no debt to finance the acquisition.
"If the deal does not proceed, we will review our ratings on Amex
GBT and likely remove them from CreditWatch."
Amex GBT is the largest global business travel management company,
offering business travel and related services to corporate clients
globally. The company manages business travel, meetings, and events
with a presence across six continents.
GENESEE & WYOMING: S&P Downgrades ICR to 'BB' on Elevated Leverage
------------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on Darien,
Conn.-based short-line railroad company Genesee & Wyoming Inc.
(G&W) to 'BB' from 'BB+'. At the same time, S&P lowered its
issue-level rating on its existing senior secured debt to 'BB' from
'BB+'. The '3' recovery rating is unchanged.
Additionally, S&P assigned its 'BB' issue-level rating and '3'
recovery rating to the company's proposed senior secured credit
facilities.
The stable outlook reflects that, given the wide range of
commodities it hauls and the geographic diversity of its
operations, S&P expects the demand for G&W's services will remain
steady over the next year, leading to stable free operating cash
flow (FOCF) generation.
S&P said, "The dividend recapitalization will weaken the company's
credit metrics beyond our downgrade threshold. G&W is issuing $3.43
billion of senior secured debt to refinance the $2.45 billion
outstanding on its existing term loan B (originally due 2026) and
$50 million outstanding on its revolving credit facility.
Additionally, it will use the remaining proceeds to fund a $761
million dividend to its parent. This transaction will increase the
company's reported debt burden by about $920 million, which we
expect will cause its pro forma S&P Global Ratings-adjusted
leverage to rise to 5.5x (above our 4.5x downgrade threshold) and
reduce its FFO to debt to 10.0% (below our 13% downgrade
threshold). These metrics incorporate the loss of $40 million-$45
million of reported EBITDA from G&W's U.K. and European operations
due to the carve out.
"Following the transaction, we expect G&W's pro forma revenue will
expand by the low- to mid-single digit percent range due to
increasing carload volumes--supported by the U.S.' ongoing economic
growth--rising volumes from new projects, and inflation-adjusted
improvements in its revenue per carload. We expect the company's
pro forma S&P Global Ratings-adjusted EBITDA will rise at a
slightly higher pace than its revenue because the increased volumes
on its existing network will slightly improve its operating
leverage. Moreover, we also expect G&W will generate modest annual
reported FOCF of $40 million-$75 million despite the increase in
its annual cash interest expense (to about $225 million) due to the
incremental debt and its maintenance and growth capital expenditure
(capex; excluding the one-time impact of transaction costs of about
$35 million and catch-up maintenance capex of about $25 million in
2024). Coupled with the company's scheduled debt amortization, we
believe these factors will cause its leverage to improve to 5.3x by
the end of fiscal year 2024 and 4.9x by the end of fiscal year
2025, with its FFO to debt improving to 10.5% and 12.5%,
respectively, over the same periods. We view these metrics as
commensurate with our revised rating.
"We believe the carve out of G&W's U.K. and European operations
will reduce its overall volatility and improve its
profitability.Prior to the carve out, the company operated in two
distinct geographies: North America, which is largely focused on
carrying bulk and industrial commodities; and U.K. & Europe, which
largely carries intermodal loads. G&W's carve out of its U.K. and
European operations will enable it to become a bulk
commodity-focused rail freight transporter with a presence across
North America that has limited exposure to intermodal loads.
Intermodal loads are subject to more volatility than bulk and
industrial goods and are also more susceptible to substitution by
trucks, especially for shorter hauls. Therefore, we believe that
the company's remaining operations will be more resilient to
underlying economic conditions.
"G&W's remaining operations will benefit from a better margin
profile than the combined company because carrying bulk and
industrial goods generates higher revenue per carload. The
company's U.K. and European operations accounted for about a third
of its consolidated revenue, though they only contributed about 7%
to its reported EBITDA. We expect G&W will lose about $40
million-$45 million of reported EBITDA associated with this
divestiture, though we believe its remaining business will maintain
adequate operational scale and diversity. We estimate that the
company's S&P Global Ratings-adjusted EBITDA margins will improve
by 600 basis points (bps)–700 bps to the 38%-39% range following
the divestiture.
"We believe G&W remains moderately strategic for Brookfield
Infrastructure Partners L.P. (BIP).Despite losing a third of its
revenue through the proposed carve out, we believe the company will
continue to remain moderately strategic to its parent, BIP. G&W is
still one of its parent's largest investments and we believe it
aligns with BIP's strategy of investing in infrastructure assets.
Therefore, we believe BIP would provide some support to G&W under
certain circumstances--such as during periods of financial
distress--and view the railroad as important to its parent's
long-term strategy, given the scale of the investment. Therefore,
our issuer credit rating on G&W incorporates one notch of uplift to
our stand-alone credit profile.
"The stable outlook reflects that, given the wide range of
commodities its hauls and the geographic diversity of its
operations, we expect the demand for G&W's services will remain
steady over the next year, leading to stable FOCF generation. We
expect the company will remain disciplined in using excess cash
flow for shareholder distributions while maintaining its debt
levels."
S&P could lower its rating on G&W over the next 12 months if its
FFO to debt declines below 9% or its debt to EBITDA increases above
5.5x. This could occur if:
-- The company pursues additional debt-funded shareholder
distributions or acquisitions; or
-- Macroeconomic conditions weaken beyond S&P's current
expectations.
-- S&P could also lower its rating if S&P revise its assessment of
G&W's importance to BIP.
S&P could raise its rating on G&W over the next 12 months if its
credit metrics improve, including its FFO to debt increasing
comfortably above 13% while its debt to EBITDA declines firmly
below the 4.5x area on a sustained basis. This could occur if:
-- The company repays its debt;
-- Its earnings and cash flow improve on better-than-expected
volumes; or
-- Its pricing increases by more than we currently expect.
S&P would also need to believe management's financial policies will
support its maintenance of these improved metrics before raising
its rating.
GOL LINHAS: Dechert LLP Updates List of Abra Noteholders
--------------------------------------------------------
In the Chapter 11 cases of GOL Linhas Aereas Inteligentes S.A., et
al., the Ad Hoc Group of Abra Noteholders filed a third verified
statement pursuant to Rule 2019 of the Federal Rules of Bankruptcy
Procedure.
Starting in December 2023, members of the Ad Hoc Group retained
attorneys with the firm of Dechert LLP to represent them as counsel
in connection with their Abra Notes which benefit from security
interests in certain of the assets of the Debtors.
The Ad Hoc Group submits this Third Verified Statement to update
the Ad Hoc Group's holdings of disclosable economic interest
currently held by its members, as of March 19, 2024, including that
of certain new members who have joined the Ad Hoc Group since the
filing of the Second Verified Statement.
As of March 19, 2024, the members of the Ad Hoc Group beneficially
own or manage (or are the investment advisors or managers for funds
or accounts that beneficially own or manage) approximately $1
billion in principal amount of Abra Notes, including $722 million
in principal amount of SSNs and $282.8 million in principal amount
of SSENs.
Dechert does not undertake to represent the interests of any
creditor, party in interest, or other entity other than the Ad Hoc
Group. No member of the Ad Hoc Group represents or purports to
represent any other member in connection with the Debtors' chapter
11 cases. In addition, each member of the Ad Hoc Group (a) does not
assume any fiduciary or other duties to any other member of the Ad
Hoc Group and (b) does not purport to act or speak on behalf of any
other member of the Ad Hoc Group in connection with these chapter
11 cases.
The names and addresses of each of the members of the Ad Hoc Group
of Abra Noteholders, together with the nature and amount of the
disclosable economic interests held by each of them in relation to
the Debtors, are as follows:
1. Certain funds and accounts managed or advised by
AMUNDI ASSET MANAGEMENT US, INC.
60 State Street
Boston, MA 02109
* Senior Secured Notes due 2028 ($73,385,949)
* Senior Secured Exchangeable Notes due 2028 ($898,385)
2. AMUNDI IRELAND LIMITED, acting solely in its capacity
as investment manager for and on behalf of the funds it
manages that hold the Abra Notes
c/o Amundi (UK) Limited
77 Coleman Street
London, EC2R 5BJ United Kingdom
* Senior Secured Notes due 2028 ($2,389,870)
3. AMUNDI (UK) LIMITED, acting solely in its capacity as
investment manager for and on behalf of certain funds
it manages that hold Abra Notes
77 Coleman Street
London, EC2R 5BJ United Kingdom
* Senior Secured Notes due 2028 ($5,849,429)
4. Certain funds and accounts managed or advised by
BLACKROCK FINANCIAL MANAGEMENT, INC.-FIXED INCOME
GROUP
50 Hudson Yards
New York, NY 10001
* Senior Secured Notes due 2028 ($14,156,471)
5. Certain funds and accounts managed or advised by
CARRONADE CAPITAL MANAGEMENT, LP
17 Old Kings Highway South, Suite 140
Darien, CT 06820
* Senior Secured Notes due 2028 ($9,858,131)
* Senior Secured Exchange Notes due 2028 ($42,105,764)
* Abra Common Shares (13,547,889 shares)
6. Certain funds and accounts managed by CORBIN CAPITAL
PARTNERS, L.P.
575 Madison Avenue, 21st Floor
New York, NY 10022
* Senior Secured Notes due 2028 ($18,116,412)
7. Certain funds and accounts managed or advised by DSC
MERIDIAN CAPITAL LP
888 Seventh Ave, 16th Floor
New York, NY 10106
* Abra Senior Secured Notes due 2028 ($38,353,604)
8. Certain funds and accounts managed or advised by
FORTRESS INVESTMENT GROUP LLC
1345 Avenue of the Americas 26th Floor
New York, NY 10105
* Senior Secured Exchangeable Notes due 2028
($46,303,017)
* Abra Common Shares (24,750,013 shares)
9. Certain funds and accounts managed by GLENDON CAPITAL
MANAGEMENT L.P.
2425 Olympic Blvd.
Suite 500E
Santa Monica, CA 90404
* Senior Secured Notes due 2028 ($99,436,639)
* Senior Secured Exchangeable Notes due 2028
($6,871,042)
* GOL Notes due 2026 ($5,000,000)
10. Certain funds and accounts managed or advised by GLG
PARTNERS LIMITED, in its capacity as investment manager
or sub-investment manager (as applicable), on behalf of
certain funds
Riverbank House, 2 Swan Lane
London EC4R 3AD, United Kingdom
* Senior Secured Notes due 2028 ($1,437,396)
* Senior Secured Exchangeable Notes due 2028
($73,523,020)
11. Certain funds and accounts managed or advised by
GROSVENOR CAPITAL MANAGEMENT, L.P.
900 North Michigan Avenue Suite 1110
Chicago, Illinois, 60611
* Senior Secured Notes due 2028 ($11,500,000)
12. Certain funds and accounts managed or advised by KING
STREET CAPITAL MANAGEMENT
299 Park Avenue, 40th Floor
New York, NY 10171
* Senior Secured Notes due 2028 ($67,161,194)
13. MOORE GLOBAL INVESTMENTS, LLC
11 Times Square
New York, NY 10036
* Abra Senior Secured Notes due 2028 ($9,931,143)
* Senior Secured Exchangeable Notes due 2028
($5,785,897)
* Short-GOL Shares (ADS) (484,165 shares)
14. Certain funds and accounts managed or advised by NUT
TREE CAPITAL MANAGEMENT, LP
55 Hudson Yards
New York, NY 10001
* Abra Senior Secured Notes due 2028 ($85,064,098)
15. Certain funds and accounts managed or advised by
OAKTREE CAPITAL MANAGEMENT, L.P.
333 S. Grand Ave., 28th Floor
Los Angeles, CA 90071
* Senior Secured Notes due 2028 ($20,504,000)
16. Certain funds and accounts managed or advised by
OLYMPUS PEAK ASSET MANAGEMENT LP
177 West Putnam Ave Suite 2622-S1
Greenwich, CT 06831
* Abra Senior Secured Notes due 2028 ($9,016,861)
* Senior Secured Exchangeable Notes due 2028
($17,667,732)
* Abra Common Shares (ADS) (2,722,276 shares)
17. Certain funds and accounts of SUNRISE PARTNERS LIMITED
PARNERSHIP managed or advised by PALOMA PARTNERS
MANAGEMENT COMPANY
Two American Lane
Greenwich, CT 06831
* Senior Secured Notes due 2028 ($31,315,229)
18. Certain funds and accounts managed or advised by
READYSTATE ASSET MANAGEMENT, LP
936 West Fulton Market Suite 200
Chicago, IL 60607
* Abra Senior Secured Notes due 2028 ($35,707,655)
19. Certain funds and accounts managed or advised by
REDWOOD CAPITAL MANAGEMENT, LLC
250 West 55th Street, Floor 26
New York, NY 10019
* Abra Senior Secured Notes due 2028 ($82,842,737)
20. Certain funds and accounts managed or advised by
CAPITAL VENTURES INTERNATIONAL C/O SUSQUEHANNA ADVISORS
GROUP, INC.
401 City Avenue, Suite 220
Bala Cynwyd, PA 19004
* Senior Secured Exchangeable Notes due 2028
($62,971,097)
21. VR GLOBAL PARTNERS, L.P.
One Nexus Way, Camana Bay
Grand Cayman, KY1-9005, Cayman Islands
c/o VR Advisory Services (USA) LLC,
601 Lexington Avenue 59th Floor
New York, NY 10022
* Abra Senior Secured Notes due 2028 ($77,279,972)
* Senior Secured Exchangeable Notes due 2028
($26,651,961)
* Abra Common Shares (1,272,329 shares)
* GOL Notes due 2026 ($28,588,000)
22. Certain funds and accounts managed or advised by
WHITEBOX ADVISORS LLC
3033 Excelsior Boulevard, Suite 500
Minneapolis, MN 55416
* Senior Secured Notes due 2028 ($28,709,013)
* GOL Bonds due 2024 ($25,077,000)
* Short - GOL Shares (ADS) (23,638 shares)
Counsel to the Ad Hoc Group of Abra Noteholders:
Allan S. Brilliant, Esq.
DECHERT LLP
1095 Avenue of the Americas
New York, NY 10036-6797
Email: allan.brilliant@dechert.com
Tel: (212) 698-3500
Fax: (212) 698-3599
About Gol GOLL4.SA
GOL Linhas Aereas Inteligentes S.A. provides scheduled and
non-scheduled air transportation services for passengers and cargo;
and maintenance services for aircrafts and components in Brazil and
internationally. The company offers Smiles, a frequent-flyer
programs to approximately 20.5 million members, allowing clients to
accumulate and redeem miles. It operates a fleet of 146 Boeing 737
aircraft with 674 daily flights. The company was founded in 2000
and is headquartered in Sao Paulo, Brazil.
GOL Linhas Aereas Inteligentes S.A. and its affiliates and its
subsidiaries voluntarily filed for Chapter 11 protection (Bankr.
S.D.N.Y. Lead Case No. 24-10118) on Jan. 25, 2024.
GOL Linhas estimated $1 billion to $10 billion in assets as of the
bankruptcy filing.
The Debtors tapped MILBANK LLP as counsel, SEABURY SECURITIES LLC
as restructuring advisor, financial advisor and investment banker,
ALIXPARTNERS, LLP, as financial advisor, and HUGHES HUBBARD & REED
LLP as aviation related counsel. KROLL RESTRUCTURING
ADMINISTRATION LLC is the claims agent.
GRAY TELEVISION: S&P Alters Outlook to Negative, Affirms 'B+' ICR
-----------------------------------------------------------------
S&P Global Ratings revised its outlook to negative given
uncertainty about Gray Television Inc.'s ability to reduce leverage
below 6x over the next year. At the same time, S&P affirmed its
'B+' issuer credit rating on Gray.
S&P said, "We also affirmed our 'BB' issue-level rating on the
company's senior secured debt. Our recovery rating on this debt
remains '1'. We also lowered our issue-level rating on its senior
unsecured debt to 'B-' from 'B' and revised the recovery rating to
'6' from '5'."
The negative outlook reflects Gray's currently elevated S&P Global
Ratings-adjusted net leverage above 6x with little room for
underperformance over the next couple of quarters. S&P believes the
company is reliant on favorable political revenue and growth in
core advertising to reduce leverage over the next year.
S&P said, "Local TV broadcasters face increasing risk as the media
landscape continues to evolve and consumers navigate away from
pay-TV. After several years of healthy growth, we expect Gray's
gross retransmission revenue (nearly 45% of total revenue) will be
flat to up 1% in 2024 and decline 1% in 2025 as more moderate price
increases during contract renewals are insufficient to offset
elevated subscriber churn. Gray renewed approximately 40% of its
subscriber base in 2023, with the remaining 60% of its subscriber
base up for renewal in 2024. Despite the large cadence of renewals,
we believe it will be increasingly difficult for Gray to increase
price given the already high cost of pay-TV, declining TV
audiences, weaker broadcast network content, and less exclusive
broadcast network content (as the parent companies of the broadcast
networks prioritize their owned streaming platforms versus their
owned broadcast networks). At the same time, we expect total pay-TV
subscribers (including both legacy and virtual pay-TV subscribers)
will decline between 6.5%-7% in 2024 and 2025 as consumers continue
moving to streaming video alternatives. Still, we expect declines
in gross retransmission revenue will be manageable and no higher
than in the low single-digit percent area over the next few years.
"Local TV broadcasters primarily remain a distributor of content
rather than a creator or owner, which we believe makes it more
difficult for them to adapt to the evolving media landscape. While
Gray's TV station portfolio reaches 36% of U.S. TV households, this
is notably lower than Nexstar who reaches 70% of households. Given
the combination of these factors along with our reduced
expectations for retransmission revenue growth, we revised our
business risk to fair from satisfactory.
"Despite increasing risks to broadcast TV, we still view it more
favorably than other TV subsectors. We view broadcast TV more
favorably than other TV subsectors (such as general entertainment)
given its focus on local news and sports, which is more exclusive
to TV and overwhelmingly watched live. Broadcast TV also has the
broadcast rights for key sports leagues, including the National
Football League (NFL), which will remain on broadcast TV through
the 2033-2034 season. As a result, we expect it will remain a key
component of pay-TV distributors' video offerings. Gray has
recently expanded its sports rights, signing deals to distribute
full-season local games for the Phoenix Suns, Phoenix Mercury,
Atlanta Dream, and Las Vegas Aces. Gray has also signed five- to
ten-game package deals with other sports teams across the National
Basketball Association (NBA), including the New Orleans Pelicans
and Atlanta Hawks, among others. We believe this could potentially
result in incremental advertising revenue (we assume core
advertising revenue growth of 1%-3% over the next two years),
although we do not expect incremental sports rights to drive higher
retransmission revenues.
"We believe Gray's leverage could remain above 6x over the next 12
months absent outperformance, likely from higher-than-expected
political advertising revenue. Gray's S&P Global Ratings-adjusted
net leverage (calculated on an average trailing-eight-quarter
basis) was 6.5x at the end of 2023 (our adjustments add 0.9x to the
company's calculated leverage). We currently expect the company's
leverage will remain elevated above 6x over the next year, with the
company ending the year at about 6.3x.
"We expect the company will generate reported free operating cash
flow of about $550 million in 2024. We expect Gray to pay out about
$30 million in common dividends and $52 million of preferred
dividends, leaving it around $470 million in cash for debt
reduction in 2024. The company also received $110 million of gross
proceeds from the sale of its equity stake in Broadcast Music Inc.
(BMI) in February ($81 million after taxes), of which it already
used $50 million to reduce the outstanding balance on its revolving
credit facility.
"We believe Gray has a path, albeit narrow, to reducing leverage to
6x over the next year, but it will need political, and core
advertising growth higher than our expectations in order to
deleverage back to 6x and below."
Elevated expenditures tied to Assembly Studios has delayed
deleveraging. Gray's investment to build out its Assembly Studios
has been a large use of cash the past few years. The company
estimates total spending net of reimbursement proceeds of $570
million. Although the project has not been funded with debt, it has
been a large drag on cash that has slowed the company's pace of
deleveraging. Based on the guidance provided on Gray's fourth
quarter 2023 earnings call, we expect the EBITDA contribution of
the studios to be $20 million-$30 million in 2024 providing little
cash benefit. S&P notes, the company is still ramping up operations
at the studios, and is in the process of securing tenants for its
space. Beyond 2024, this could lead to a significant jump in
EBITDA. However, there is limited visibility into the timing and
magnitude of the future EBITDA and cash flow that the studios will
provide.
S&P said, "We expect political advertising will remain a relatively
stable source of cash flow, despite our expectation for lower
political advertising revenue in 2024 than in 2020. Political
advertising revenue is the largest contributor to the company's
cash flow and subsequently its ability to reduce leverage. We
previously thought the company's political revenue would be around
$600 million in 2024. However, we have revised our estimate
downward to about $520 million primarily due to the cadence of
competitive races within Gray's geographic footprint. That said, we
expect the local TV industry in aggregate will maintain its share
of political advertising dollars. We continue to believe TV is more
attractive than other forms of media for political advertisers
given its significant reach and ability to target voters in select
districts and expect the local TV industry in aggregate will
maintain its share of political advertising dollars.
"The negative outlook reflects Gray's currently elevated leverage
above 6x with little room for underperformance over the next couple
of quarters. We believe the company is reliant on favorable
political revenue and growth in core advertising to reduce leverage
over the next year.
"We could lower our rating on Gray if there is underperformance
relative to our base case forecast over the next couple of
quarters. This would likely result in leverage remaining above 6x
for a prolonged period and increased uncertainty around the cost of
refinancing upcoming maturities in 2026." This could occur if:
-- The current low-growth macroeconomic environment is sustained
and political and core advertising does not outperform our
expectations;
-- Its subscriber declines accelerate, causing its net
retransmission revenue to decline; or
-- The company uses most of its cash for shareholder returns or
investments that are not accretive to earnings.
S&P could return its outlook to stable if:
-- The company is able reduce and sustain leverage at 6x or below
over the next 12 months; and
-- S&P expects its financial policy regarding debt repayment,
shareholder returns, acquisitions, and internal investments would
support its ability to sustain leverage below this level.
ESG factors have no material influence on S&P's credit rating
analysis of Gray.
GREAT NORTHERN: Hires Scouler Kirchhein as Financial Advisor
------------------------------------------------------------
Great Northern Products, Ltd. seeks approval from the U.S.
Bankruptcy Court for the District of Rhode Island to hire Scouler
Kirchhein, LLC as its financial advisor.
The firm will render these services:
a. work with the Debtor's management to perform financial
reviews of the Debtor, including, but not limited to, a review and
assessment of financial information and the reliability of the
underlying financial systems, including, without limitation, the
Debtors' liquidity and projected short and long-term cash flows;
b. evaluate the Debtor's business plan and forecasted
financial statements;
c. develop possible sale and marketing procedures and lead any
sale process, including seeking for the Debtor pursuant to a
Bankruptcy Code section 363 asset sale;
d. prepare financial forecasts, engaging in liquidity
planning, and identifying ways to potentially reduce costs and
develop other strategies to maximize value for the Debtor's
creditors and other stakeholders;
e. assess the potential benefit to the creditors and other
parties in interest of the Debtor proposing and consummating a
Subchapter V plan of reorganization;
f. conduct ongoing, routine communications with the Debtor's
lenders and other creditors including periodic reviews of the
Debtor's performance and progress towards achieving its strategic
objections; and
g. prepare financial statements and reports for the U.S.
Trustee's Office, the Bank and others, and perform such other
services relating to the Debtor's chapter 11 case as may be
reasonably requested by the Debtor, its President, and its
attorneys.
Scouler was paid an advance payment retainer of $25,000.
The billing rates for professionals are as follows:
Daniel Scouler $595/Hour
Daniel Scouler Jr. $400/Hour
David Scouler $400/Hour
Staff $350/Hour
As disclosed in the court filings, Scouler Kirchhein and its
principals and employees are otherwise "disinterested persons" with
respect to the Debtor, as that term is defined in the Bankruptcy
Code.
The firm can be reached through:
Daniel Scouler
Scouler Kirchhein, LLC
230 Park Ave, 3rd Floor
New York, NY 10169
Phone: (646) 859-8914
About Great Northern Products, Ltd.
Great Northern Products, Ltd. owns and operates a commercial
seafood business from leased premises and offices at 2700
Plainfield Pike, Cranston, Rhode Island. It specializes in
purchasing, importing, selling, marketing, distributing and
exporting a variety of seafood that is harvested and processed by
its partner plants in Canada, the US and South America. Great
Northern's products include natural and wild-caught crab, shrimp,
lobster, scallops, ground fish, salmon and some shellfish.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. R.I. Case No. 1:24-bk-10112) on February
28, 2024. In the petition signed by George A. Nolan, president and
chief executive officer, the Debtor disclosed up to $10 million in
both assets and liabilities.
Matthew J. McGowan, Esq., at Sylvia Kishfy, LLC, represents the
Debtor as legal counsel.
GREAT NORTHERN: Taps Sylvia & Kishfy as Legal Counsel
-----------------------------------------------------
Great Northern Products, Ltd. seeks approval from the U.S.
Bankruptcy Court for the District of Rhode Island to hire Sylvia &
Kishfy LLC as its bankruptcy counsel.
The firm's services include:
a. advising the Debtor with respect to its rights, powers and
duties as a debtor-in-possession in the continued operation and
management of its businesses and assets;
b. representing the Debtor at all hearings and matters
pertaining to its affairs as debtor and debtor-in-possession;
c. preparing on the Debtor's behalf all necessary and
appropriate applications, motions, objections, answers, orders,
reports, and other papers and documents, and review of all
financial and other reports filed in this chapter 11 case;
d. advising the Debtor with respect to, and assisting in the
negotiation and documentation of, financing agreements and related
transactions;
e. reviewing and analyzing the nature and validity of any
liens asserted against the Debtor's property and advising the
Debtor concerning the enforceability of such liens;
f. advising the Debtor regarding its ability to recover
property for the benefit of its estate;
g. advising and assisting the Debtor in connection with the
potential sale of the Debtor's assets and preparing documents and
related papers concerning the same;
h. advising the Debtor concerning executory contract and
unexpired lease assumptions, lease assignments, rejections,
restructurings and recharacterization of contracts and leases;
i. reviewing and analyzing the claims of the Debtor's
creditors, the treatment of such claims and the preparation, filing
or prosecution of any objections to claims;
j. preparing, on the Debtor's behalf, and advising the Debtor
with respect to any Subchapter V plan of reorganization or
liquidation and all papers and documents related thereto;
k. commencing and conducting any and all litigation necessary
or appropriate to assert claims and rights held by the Debtor, and
to protect assets of the Debtor' s chapter 11 estate, and otherwise
to further the goal of effectuating the Debtor's reorganization;
and
l. performing all other legal services and providing all other
necessary legal advice to the Debtor as debtor-in-possession which
may be necessary in the Debtor' s bankruptcy case.
Sylvia & Kishfy was paid $20,000, a portion of which was for
pre-petition legal services, and the remainder of which is being
held as a retainer.
The billing rates for professionals are as follows:
Matthew J. McGowan $395/Hour
Paralegal Assistants $135/Hour
As disclosed in the court filings, Sylvia & Kishfy and its
principals and employees are otherwise "disinterested persons" with
respect to the Debtor, as that term is defined in the Bankruptcy
Code.
The firm can be reached through:
Matthew J. McGowan, Esq.
Sylvia & Kishfy LLC
56 Exchange Ter
Providence, RI 02903
Phone: (401) 205-0061
Email: mmcgowan@sklawri.com
About Great Northern Products, Ltd.
Great Northern Products, Ltd. owns and operates a commercial
seafood business from leased premises and offices at 2700
Plainfield Pike, Cranston, Rhode Island. It specializes in
purchasing, importing, selling, marketing, distributing and
exporting a variety of seafood that is harvested and processed by
its partner plants in Canada, the US and South America. Great
Northern's products include natural and wild-caught crab, shrimp,
lobster, scallops, ground fish, salmon and some shellfish.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. R.I. Case No. 1:24-bk-10112) on February
28, 2024. In the petition signed by George A. Nolan, president and
chief executive officer, the Debtor disclosed up to $10 million in
both assets and liabilities.
Matthew J. McGowan, Esq., at Sylvia Kishfy, LLC, represents the
Debtor as legal counsel.
HAMMER FIBER: Posts $13K Net Income in Second Quarter
-----------------------------------------------------
Hammer Fiber Optics Holdings Corp. filed with the Securities and
Exchange Commission its Quarterly Report on Form 10-Q reporting net
income of $12,661 on $826,602 of revenues for the three months
ended Jan. 31, 2024, compared to a net loss of $338,553 on $744,051
of revenues for the three months ended Jan. 31, 2023.
For the six months ended Jan. 31, 2024, the Company reported a net
loss of $77,197 on $1.74 million of revenues, compared to a net
loss of $423,225 on $1.54 million of revenues for the six months
ended Jan. 31, 2023.
As of Jan. 31, 2024, the Company had $7.89 million in total assets,
$3.70 million in total liabilities, and $4.19 million in total
stockholders' equity.
Hammer Fiber said, "The Company has consistently sustained losses
since its inception. These factors, among others, raise
substantial doubt about the ability of the Company to continue as a
going concern for a period of one year from the issuance of these
financial statements. The Company's continuation as a going
concern is dependent upon, among other things, its ability to
increase revenues, adequately control operating expenses and
receive debt and/or equity capital from third parties. No
assurance can be given that the Company will be successful in these
efforts.
"The financial statements do not include any adjustments relating
to the recoverability and classification of recorded asset amounts
or the amounts and classification of liabilities that might be
necessary should the Company be unable to continue as a going
concern.
"The Company intends to continue to address this condition by
seeking to raise additional capital through the issuance of debt
and/or the sale of equity until such time that ongoing revenues can
sustain the business, at which time capitalization may be
considered through other means."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1539680/000106299324007181/form10q.htm
About Hammer Fiber
Hammer Fiber Optics Holdings Corp. is now an alternative
telecommunications carrier that is poised to position itself as a
premier provider of diversified dark fiber networking solutions as
well as high-capacity broadband wireless access networks in the
United States and abroad.
HIGH PLAINS RADIO: Files for Chapter 11 Bankruptcy
--------------------------------------------------
Daniel Kline of The Street reports that another major radio chain,
Hight Plains Radio Network LLC, has filed for Chapter 11
bankruptcy.
The rise of satellite radio, podcasts and the internet has slowly
eroded local radio. You no longer need a radio station to tell you
whether school has been canceled as that information is readily
available on the internet.
Local radio has suffered from death by 1,000 paper cuts. Services
like Yelp, for example, make it easier to discover local
restaurants and businesses. Podcasts and streaming music have given
people more choices when it comes to what they listen to in the
car.
Nobody needs to put on the radio to hear their favorite music or
talk show. People now have the option to listen to whatever they
want to pretty much whenever they want to, and that has devastated
local radio.
IHeartRadio, the largest radio chain in the U.S., filed for Chapter
11 bankruptcy in 2018. The company survived that process by giving
most of the equity in the company to its debtholders in exchange
for forgiveness of about $10 billion in debt.
Since emerging from bankruptcy in 2019, IHeartRadio has struggled
and recently had another round of layoffs. There's simply less
demand for local radio and that has created challenges that have
affected other radio chains as well.
High Plains Radio Network, a company that operates stations in
Texas, Arkansas and New Mexico, has filed for Chapter 11
bankruptcy. The company, which filed its petition in the Northern
District of Texas, reported $1 million to $10 million in debt with
the same range of assets.
The company said in its filing that funds would be available for
unsecured creditors. High Plains Radio Network has not outlined a
financing plan for its bankruptcy or any plans for how it intends
to move forward.
Radio network was built for this market
High Plains Radio Network Founder Monte Spearman has more than 30
years of broadcast experience working in small markets. He said
that while local radio remains essential, especially in smaller
markets, the operating conditions have become challenging.
"The rules of radio ownership have changed, retail has changed, and
digital competitors have changed advertising," he posted on the
HPRN website.
"Don't get me wrong, research confirms that 90% of Americans still
listen to broadcast radio every week. Even with new audio
competitors, the magic of providing local information, news, and
entertainment on local radio still works for listeners and for
advertisers."
Spearman built his company with a lower cost structure than local
radio stations traditionally have.
"The goal for me was to stay local, but to significantly reduce
operating costs," he said. "Many of my friends in the radio
business told me I could do one or the other, but not both! I was
not convinced! I knew a large part of the answer for increased
efficiency and cost reduction was in the better and more creative
use of existing technology. Through trial and error and helpful
employees, that has proven to be true for our HPR Network."
He was successful in doing that, but that was not enough to operate
profitability.
"The largest operating cost in radio has always been personnel;
usually around two-thirds of a station's total operating cost. I
decided I could do more with fewer people, and still be local, so I
focused all my efforts on making that happen," Spearman wrote.
"And today, we have succeeded. We have great people working at
HPRN, but because of the use of modern technology, our personnel
costs are only 25 rather than the usual 65%, and the HPR stations
still provide relevant local programming."
That sounds like a recipe for success, but the failure of the model
suggests that local radio may not have a future, or will at least
continue to contract.
About High Plains Radio Network
High Plains Radio Network is in the radio broadcasting business.
High Plains Radio Network sought relief under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. N.D. Tex. Case No. 24-70089) on March
26, 2024. In the petition signed by Monte L. Spearman, as manager,
the Debtor reports estimated assets and liabilities between: $1
million and $10 million.
Honorable Bankruptcy Judge Scott W. Everett handles the case.
The Debtor is represented by:
Jeff Carruth, Esq.
WEYCER, KAPLAN, PULASKI & ZUBER, P.C.
2608 HIbernia St., Suite 105
Dallas, TX 75204-2514
Tel: (713) 341-1158
E-mail: jcarruth@wkpz.com
HORNBLOWER HOLDINGS: Seeks to Hire Guggenheim as Investment Banker
------------------------------------------------------------------
Hornblower Holdings LLC and its affiliates seek approval from the
U.S. Bankruptcy Court for the Southern District of Texas to employ
Guggenheim Securities, LLC as its investment banker.
The firm will render these services:
(a) review and analysis of the business, financial condition
and prospects of the Debtors;
(b) evaluate the liabilities of the Debtors, its debt capacity
and its strategic and financial alternatives;
(c) In connection with any Transaction:
(i) evaluate financial and capital markets point of view of
alternative structures and strategies for implementing the
Transaction;
(ii) prepare offering, marketing or other transaction
materials concerning the Debtors and the Transaction for
distribution and presentation to the relevant Transaction
Counterparties;
(iii) develop and implement a marketing plan with respect to
such Transaction;
(iv) identify and solicit of, and review of proposals
received from, the Investors and other prospective Transaction
Counterparties; and
(v) negotiate the Transaction.
(d) If the Debtors determines to pursue or effect any
Transaction in connection with a Bankruptcy Case, evaluation, from
a financial point of view, of alternative strategies for
implementing any such Transaction; and
(e) provide such other matters as may be agreed upon by
Guggenheim Securities and the Debtors in writing during the term of
Guggenheim Securities' engagement.
The firm will be paid as follows:
a. Monthly Fees.
i. The Company will pay Guggenheim Securities a
non-refundable cash fee of $175,000 per month (each, a "Monthly
Fee"), which fee, commencing as of November 1, 2023, will be due
and paid by the Company in advance, with respect to each calendar
month (commencing with November 2023) occurring during the period
of Guggenheim Securities' engagement under the Engagement Letter,
promptly on the first day of each such calendar month, in each
case, whether or not any Transaction is consummated.
ii. With respect to (and solely with respect to) the first
through the sixth full Monthly Fees actually paid under the
Engagement Letter, an amount equal to 50 percent of such Monthly
Fees shall be credited against any Transaction Fee that thereafter
becomes payable pursuant to Sections 4(b), 4(c) and 4(d) of the
Engagement Letter (it being understood that, once credited against
any one of the foregoing fees, any such amount of the Monthly Fee
so credited cannot be credited again against any other fee payable
under the Engagement Letter).
b. Restructuring Transaction Fee.
i. If any Restructuring Transaction is consummated, then, in
each case, the Company will pay Guggenheim Securities a cash fee
(each, a "Restructuring Transaction Fee") in an amount equal to
0.90 percent of the Aggregate Affected Liabilities relating to such
Restructuring Transaction; provided, that, with respect to any
Restructuring Transaction contemplated to be consummated as of
and/or at any time following the commencement of a Bankruptcy Case
(an "In-Court Restructuring"), the Restructuring Transaction Fee
shall equal $9,000,000 (an "In- Court Restructuring Fee").
ii. Any such Restructuring Transaction Fee will be payable
promptly upon the consummation of any Restructuring Transaction;
provided, however, that the Restructuring Transaction Fee in
connection with any Restructuring Transaction that is contemplated
to be effectuated pursuant to Section 3(a)(9) of the Securities Act
of 1933, as amended (the "Securities Act"), will be fully earned
and payable on the date that definitive offer documents for the
related exchange offer under Section 3(a)(9) of the Securities Act
are first distributed to creditors whose claims would be affected
thereby, without regard to the results of such exchange offer or
any other contingency. For the avoidance of doubt, with respect to
(and solely with respect to) any Restructuring Transaction
effectuated pursuant to Section 3(a)(9) of the Securities Act, the
only Restructuring Transaction Fee payable under the Engagement
Letter on account of each such Restructuring Transaction shall be
the fee payable pursuant to the proviso clause in the immediately
preceding sentence.
c. Financing Fee(s).
i. If any Financing Transaction is consummated, then, in
each case, the Company will pay Guggenheim Securities one or more
cash fees (each, a "Financing Fee") in an amount equal to the sum
of: (A)200 basis points (2.00 percent) of the aggregate face amount
of any new money debt obligations to be issued or raised by the
Company (including the face amount of any related commitments) in
any Debt Financing, plus (B) 350 basis points (3.50 percent) of the
aggregate amount of gross proceeds raised by the Company in any
Equity Financing (including the face amount of any related
commitments):
ii. Notwithstanding the foregoing,
1. to the extent that any portion of the debt obligations
or equity underlying any Financing Transaction is issued to or
raised from an Existing Stakeholder (each such portion of debt
obligations or equity (including related commitments), as the case
may be, to be issued to or raised from an Existing Stakeholder, the
"Existing Stakeholder Debt/Equity"), then, with respect to (and
solely with respect to) such Existing Stakeholder Debt/Equity, no
Financing Fee will be required to be paid thereon by the Company
pursuant to Section 4(c)(i) of the Engagement Letter unless the
parties thereto shall otherwise agree; provided, that, for the
avoidance of doubt, it is understood that 100 percent of the
Financing Fees set forth in Section 4(c)(i) of the Engagement
Letter shall be due and payable by the Company on account of any
and all other debt obligations and/or equity (including related
commitments) to be issued to or raised from any Transaction
Counterparty (not constituting an Existing Stakeholder) involved in
any such Financing Transaction;
2. to the extent that any portion of the new money debt
obligations underlying any Debt Financing is issued to or raised
from any Existing Lender (each such portion of new money debt
obligations (including related commitments) to be issued to or
raised from any Existing Lender, the "Existing Lender Debt"), then,
with respect to (and solely with respect to) such Existing Lender
Debt, the Financing Fee required to be paid thereon by the Company
shall equal 100 basis points (1.00 percent) of the aggregate face
amount of any such Existing Lender Debt to be issued or raised by
the Company in such Debt Financing; provided, that, for the
avoidance of doubt, it is understood that 100 percent of the
Financing Fees set forth in Section 4(c)(i)(A) of the Engagement
Letter shall be due and payable by the Company on account of any
and all other new money debt obligations (including related
commitments) to be issued to or raised from any Transaction
Counterparty (not constituting an Existing Lender) involved in any
such Debt Financing; and
3. $627,682 of the $1,100,000 Financing Fee paid to
Guggenheim Securities on account of the December 2023 extension and
upsize of the Incremental Superpriority Facility, as defined and
described more fully in the First Day Declaration, shall be
credited against (and solely against) any such Financing Fee that
may become payable to Guggenheim Securities on account of that
certain Financing Transaction referred to as the "DIP Facilities"
in the Debtors' Emergency Motion for Entry of Interim and Final
Orders (I) Authorizing the Debtors to (A) Obtain Senior Secured
Postpetition Financing and (B) Use Cash Collateral, (II) Granting
Adequate Protection to Certain Prepetition Secured Parties, (III)
Scheduling a Final Hearing, and (IV) Granting Related Relief
[Docket No. 35] (the "DIP Motion") upon this Court's final approval
thereof (it being understood that such amount can only be credited
once against such Financing Fee and cannot be credited against any
other fee payable under the Engagement Letter).
iii. Financing Fees for any Financing Transaction will be
payable upon the consummation of the related Financing
Transaction.
iv. For the avoidance of doubt, with respect to any Debt
Financing constituting a "debtor-in-possession" financing or "exit
financing" entered into by the Company in connection with a
Bankruptcy Case, no Financing Fees shall be required to be paid
under the Engagement Letter pursuant to the provisions of Section
4(c) of the Engagement Letter solely on account of any portion of
debt obligations thereunder that consists of debt obligations
"rolled over" from, respectively, any of the Company's prepetition
financing facilities (in connection with a "debtor-in-possession"
financing) or any court-approved "debtor-in-possession" financing
facility (in connection with an "exit financing"); provided, that,
for the avoidance of doubt, 100 percent of the Financing Fees set
forth in Sections 4(c)(i) and 4(c)(ii) of the Engagement Letter
shall be due and payable by the Company on account of all other
(non-"rolled over") debt obligations (and any related commitments)
to be issued or raised by the Company in connection with any such a
"debtor-in-possession" financing or "exit financing." With respect
to any Debt Financing constituting an "exit financing" entered into
by the Company in connection with a Bankruptcy Case, no Financing
Fees shall be required to be paid under the Engagement Letter
pursuant to the provisions of Section 4(c) of the Engagement Letter
solely on account of any portion of debt obligations thereunder of
which the proceeds received by the Company in respect thereof are
required to be used (and are used) to repay debt obligations
underlying the Senior DIP Facility; provided, that, for the
avoidance of doubt, 100 percent of the Financing Fees set forth in
Sections 4(c)(i) and 4(c)(ii) of the Engagement Letter shall be due
and payable by the Company on account of all other debt obligations
(and any related commitments) to be issued or raised by the Company
in connection with any such "exit financing."
d. Sale Transaction Fees(s).
i. If any Sale Transaction is consummated, then in each
case, the Company will pay Guggenheim Securities a cash fee (each,
a "Sale Transaction Fee") in an amount equal to the sum of: (x)
with respect to the first $1,000,000,000 of Aggregate Sale
Consideration involved in such Sale Transaction, 1.00 percent of
said Aggregate Sale Consideration, plus (y) with respect to any
additional amount of Aggregate Sale Consideration involved in such
Sale Transaction (i.e., with respect to such layer of Aggregate
Sale Consideration pertaining to such Sale Transaction in excess of
$1,000,000,000), 1.50 percent of said Aggregate Sale Consideration;
provided, that, with respect to any Sale of Control Transaction,
the Sale Transaction Fee payable on account thereof (a "Sale of
Control Fee") shall equal the greater of (A) the value of the sum
determined on account of such Sale of Control Transaction in
accordance with the foregoing clauses (x) and (y) or (B)
$9,000,000.
ii. Any such Sale Transaction Fee will be payable promptly
upon the consummation of any Sale Transaction.
iii. The Company expressly acknowledges and agrees that a
separate Sale Transaction Fee will be payable to Guggenheim
Securities with respect to each Sale Transaction in the event that
more than one Sale Transaction is effected or occurs; provided,
that, the full amount of any Sale Transaction Fee actually paid to
Guggenheim Securities under the Engagement Letter on account of
(and solely on account of) any Sale Transaction not constituting a
Sale of Control Transaction (each such fee, a "Discrete Sale Fee")
shall be credited against any Sale of Control Fee that thereafter
becomes payable pursuant to Section 4(d)(i) of the Engagement
Letter (it being understood that any such amount of such Discrete
Sale Fee can only be credited once against such Sale of Control Fee
and cannot be credited against any other fee payable under the
Engagement Letter).
e. Expense Reimbursement. In addition to any fees payable by
the Company to Guggenheim Securities under the Engagement Letter,
the Company will, whether or not any Transaction contemplated by
the Engagement Letter will be proposed or consummated, promptly
reimburse Guggenheim Securities, upon request, for its travel and
all other reasonable and documented out-of-pocket expenses incurred
in connection with or arising out of the Engagement Letter,
including Guggenheim Securities' entering into the Engagement
Letter, Guggenheim Securities' activities under or contemplated by
the Engagement Letter or Guggenheim Securities' enforcing its
rights under the Engagement Letter, including all fees,
disbursements and other charges of any legal counsel retained by
Guggenheim Securities and any other consultants and advisors
retained by Guggenheim Securities.
Matthew Schneiderman, managing director at Guggenheim Securities,
assured the court that his firm is a "disinterested person" as that
term is defined in section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Matthew F. Schneiderman
Guggenheim Securities LLC
330 Madison Avenue
New York, NY 10017
Phone: (212) 518-9200
About Hornblower Holdings
Hornblower Holdings, LLC and its affiliates filed Chapter 11
petitions (Bankr. S.D. Texas Lead Case No. 24-90061) on Feb. 21,
2024. At the time of the filing, Hornblower reported $500 million
to $1 billion in assets and $1 billion to $10 billion in
liabilities.
Judge Marvin Isgur oversees the cases.
The Debtors tapped Porter Hedges, LLP and Paul, Weiss, Rifkind,
Wharton & Garrison, LLP as bankruptcy counsels; Borden Ladner
Gervais, LLP as Canadian counsel; Guggenheim Securities, LLC as
investment banker; and Alvarez & Marsal North America, LLC as
restructuring advisor. Omni Agent Solutions, Inc. is the Debtor's
notice and claims agent and administrative advisor.
HUTCHINSON REGIONAL: Moody's Affirms 'Ba2' Revenue Bond Rating
--------------------------------------------------------------
Moody's Ratings has affirmed Hutchinson Regional Medical Center,
Inc. (HRMC), KS's Ba2 revenue bond rating. The outlook remains
negative. The system had approximately $32 million of debt
outstanding at fiscal year-end 2023.
The affirmation reflects the system's lower, but still strong
unrestricted cash reserves and comparatively low leverage which
will provide a cushion as the organization endeavors to produce
breakeven cash flow.
RATINGS RATIONALE
The Ba2 rating favorably incorporates HRMC's market essentiality,
strong liquidity, and moderate leverage. These strengths are offset
by its modest scale with under $185 million in operating revenue as
of fiscal 2023, comparatively weak demographics in its core service
area limiting revenue growth, and deficit operating performance
that will continue at least through 2025. A multi-year trend of
unexpected executive team turnover has negatively impacted
management credibility and track record. However, current
management has articulated a reasonable plan that should stem
operating losses, with the potential to achieve break-even
operating performance in fiscal 2024 and a return to positive
operating performance in fiscal 2025.
The system's market essentiality is bolstered by its role as a
Medicare-designated Sole Community Provider with steady demand for
services given HRMC's full inpatient service array. Liquidity,
providing 259 days cash on hand (as of FY23) will remain strong
despite recent moderation driven by weak operating performance. Low
leverage is a key credit strength with total debt to revenue of 18%
in FY23. While HRMC did not meet its debt service coverage covenant
of 1.20 times in fiscal 2023 and has asked bondholders for a
forbearance agreement, strong 4.5 times cash coverage of total debt
is a favorable mitigation to acceleration risk. To date, HRMC has
not received bondholder agreement to waive acceleration.
RATING OUTLOOK
The negative outlook reflects the possibility of further credit
deterioration should management be unable sustain recent
improvements in operating performance, with further cash drain.
While management has articulated both revenue initiatives and
expense reduction plans to close the over 11% operating cash flow
deficit in 2023, the healthcare operating environment continues to
be volatile.
FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATING
-- Significant and sustained improvement in operating performance,
with operating cash flow margins returning to levels that would
sustainably fund debt service above 1.2 times
FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATING
-- Inability to significantly stabilize and improve operating
performance toward break-even operating cash flow in the latter
half of fiscal 2024 and early fiscal 2025
-- Material decline in days cash on hand or additional financial
leverage that dilutes metrics
-- Failure to manage potential financial covenant breach as a
result of weak performance
LEGAL SECURITY
The bonds are secured by a pledge of gross revenues; no mortgages
are given. Additional indebtedness is permitted under certain
conditions. Legal covenants include 60 days cash on hand and 1.20
times debt service coverage ratio measured annually.
PROFILE
Hutchinson Regional Health System is a 501 (c)(3), which includes
Hutchinson Regional Medical Center, a 190-licensed bed hospital
located in Hutchinson, Kansas. The hospital offers an array of
healthcare services, including Level 3 Trauma, cardiology services,
oncology and cancer services, labor and delivery, wound care, and
sleep services.
METHODOLOGY
The principal methodology used in this rating was US Not-for-profit
Healthcare published in February 2024.
IMPRIVATA INC: S&P Rates New $1.1BB First-Lien Term Loan B 'B-'
---------------------------------------------------------------
S&P Global Ratings assigned its 'B-' issue-level rating and '3'
recovery rating to Imprivata Inc.'s proposed $1.1 billion
first-lien term loan B due 2027. The '3' recovery rating indicates
S&P's expectation for meaningful (50%-70%; rounded estimate: 60%)
recovery in the event of a payment default.
The company will use the proposed term loan to consolidate and
replace its two existing first-lien term loans, which feature
similar terms but different interest margins. The transaction will
likely reduce Imprivata's interest expense due to the lower margin
on the proposed loan. S&P's 'B-' issuer credit rating and stable
outlook on the company are unchanged.
S&P views the proposed transaction as leverage neutral.
ISSUE RATINGS--RECOVERY ANALYSIS
Key analytical factors
-- S&P rates the company's first-lien term loan 'B-' with a '3'
recovery rating.
-- S&P values Imprivata on a going-concern basis using a 6.5x
multiple of its projected distressed EBITDA, which reflects its
growth prospects and high profitability relative to its peers in
the software and services industry.
-- S&P's simulated default scenario considers a default in 2026
due to a significant decline in revenue from increasing competition
in the information technology security market and a failure to
maintain technological leadership.
-- S&P estimates approximately 25% of Imprivata's recovery value
would lie with its unrestricted foreign subsidiaries in a default
scenario.
Simulated default assumptions
-- Simulated year of default: 2026
-- EBITDA multiple: 6.5x
-- EBITDA at emergence: $128 million
-- Jurisdiction: U.S.
Simplified waterfall
-- Net enterprise value at default (after 5% administrative
costs): $793 million
-- Valuation split (obligors/nonobligors): 75%/25%
-- Collateral value available to first-lien secured creditors:
About $724 million
-- First-lien secured debt claims: About $1.2 billion
--Recovery expectations: 50%-70% (rounded estimate: 60%)
Note: All debt amounts include six months of prepetition interest.
INGEVITY CORP: Moody's Alters Outlook on 'Ba2' CFR to Negative
--------------------------------------------------------------
Moody's Ratings has affirmed Ingevity Corporation's Ba2 corporate
family rating, Probability of Default Rating of Ba2-PD and the Ba3
rating on its senior unsecured notes. Ingevity's speculative grade
liquidity rating remains at SGL-2, but the outlook was changed to
negative from stable.
Governance considerations are a key driver of this rating action.
Moody's revised Ingevity's Governance Issuer Profile Score (G-IPS)
to G-3 from G-2 to indicate that Moody's believes that credit
metrics will not reach management's targeted leverage in the next
12-18 months and that leverage will be more commensurate with the
"Ba" rating over that timeframe.
"Ingevity's main business, Performance Materials, continued to
generate solid earnings growth despite a difficult macroeconomic
environment in 2023; however profitability in its Performance
Chemicals business declined significantly due to weak demand and
increases in CTO prices; the net effect has been a material
weakening of credit metrics," stated John Rogers, Senior Vice
President at Moody's and lead analyst on Ingevity. "Despite the
company's swift action to restructure the Performance Chemicals
operations and reduce corporate costs, credit metrics are likely to
remain weak in 2024," the analyst added.
RATINGS RATIONALE
Ingevity Corporation's Ba2 CFR reflects the company's leading
market position in activated carbon systems for gasoline vapor
control, adoption of increasingly stringent auto vapor emissions
standards, consistent free cash flow generation and management's
targeted net leverage ratio of 3.0x. The rating is tempered by the
sizable drop in its Performance Chemicals EBITDA and the weakening
of its credit metrics in 2023, which is expected to continue into
2024. The company's third business, Advanced Polymer Technologies
("APT"), is a relatively small but growing business that should add
to the company's credit profile over time. Although APT's
profitability increased in 2023 despite lower volumes, 4Q23
performance was materially weaker than the prior year.
As of December 31, 2023, Ingevity's leverage metric was below
Moody's triggers for a downgrade with adjusted Debt/EBITDA of 4.5x.
Given the company's guidance on its yearend earnings call, leverage
is expected to decline to, or go modestly below, 4.0x in 2024,
still above Moody's trigger for a downgrade. Despite the required
spending on the closure of the DeRidder plant, the company should
remain free cash flow positive and will be able to reduce debt by
$50-75 in 2024.
In response to the substantial decline in profitability of the
Performance Chemicals business, management stopped the processing
of crude tall oil ("CTO") at its Crossett, AK facility and
converted the facility to utilize plant-based oils to product fatty
acids. It also announced the closure of its DeRidder, LA facility
including its CTO refinery and derivatives operations. Through
these actions, management has diversified its raw material
feedstocks and focused its Performance Chemicals business on more
profitable Road Technology products and other specialized
industrial applications. New regulations and mandates have created
the incentive for oil companies to utilize CTO to produce biofuels
increasing the demand for, and price of, CTO and making it
uncompetitive as a feedstock for certain applications. Increased
production of biofuels has raised the price of CTO and other
natural feedstocks and could further impair the profitability of
this business.
Ingevity's SGL-2 rating is supported by $96 million of balance
sheet cash, the expectation of $50-$75 million of free cash flow
generation in 2024 and $260 million availability under its
revolving credit facility. Its $1 billion revolving credit facility
(unrated), which had an outstanding balance of $738 million at the
end of 2023, will mature in June 2027. The revolving credit
facility has two financial covenants--a maximum total net leverage
ratio covenant of 4.0x (up to 4.5x allowed after permitted
acquisition) and a minimum interest coverage covenant of 3.0x.
Moody's expects the company to remain in compliance with these
covenants.
Ingevity's negative outlook reflects the expectation that credit
metrics will remain weak in 2024 and that any further headwinds in
the Performance Chemical business could stress credit metrics for a
sustained period and cause Moody's to consider the appropriateness
of a lower rating.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Moody's could downgrade Ingevity's rating, if the company's
performance deteriorates further or it undertakes any action that
would materially increase balance sheet debt such that its
Debt/EBITDA ratio rises above 3.5x and RCF/Debt declines to
mid-teens for a sustained period of time. While an upgrade at the
current time is unlikely due to the company's weak credit metrics,
Moody's could consider an upgrade if Debt/EBITDA falls below 3
times and RCF/Debt over 20%, for a sustained period.
ESG CONSIDERATIONS
Ingevity's CIS-3 indicates that ESG considerations have a limited
impact on the current credit rating with potential for greater
negative impact over time, as increasing expenses and capital are
required to reduce emissions and address increasingly stringent
environmental regulations. Environmental risks are significant for
chemical companies due to the amount of waste and pollution
generated on an annual basis relative to most other industries, as
well as the limited supply of CTO from pulp and paper companies.
Social risks are lower, especially given the regulatory
requirements to install gasoline vapor emission control equipment,
which continue to drive sales and earnings growth of its
Performance Materials business. Additionally, the company maintains
a prudent financial policy, but credit metrics are likely to remain
above management's target leverage given the decline in the
Performance Chemicals business.
Headquartered in North Charleston, SC, Ingevity Corporation is a
manufacturer of high performance carbon materials (Performance
Materials segment) are used in gasoline vapor emission control
systems for fuel tanks, as well as for the purification of water,
food, beverages and chemicals. It is also a global manufacturer of
natural based chemicals (Performance Chemicals segment) used in
pavement technologies and other industrial applications and
caprolactone based engineered polymers (Advanced Polymer
Technologies) used in plastics, coatings and adhesives. In 2023,
the company generated revenues of $1.7 billion.
The principal methodology used in these ratings was Chemicals
published in October 2023.
INGRAM MICRO: Moody's Affirms 'Ba3' CFR, Outlook Stable
-------------------------------------------------------
Moody's Ratings affirmed Ingram Micro Inc.'s Ba3 Corporate Family
Rating, Ba3-PD Probability of Default Rating, and B1 ratings on the
senior secured notes and senior secured term loan. The outlook is
stable.
RATINGS RATIONALE
Ingram Micro's Ba3 CFR reflects the company's leading position and
significant scale as a global IT wholesale distributor providing
sales, marketing, and supply chain solutions. Ingram Micro benefits
from multi-year investments in technology and experience developing
capabilities to deliver cloud offerings and solutions to customers,
notably through its Ingram Cloud marketplace, Xvantage Platform and
CloudBlue software.
At the same time, Ingram Micro's revenue is highly correlated with
macroeconomic trends and global IT demand. In 2023, weak IT
spending amid a softer macroeconomic environment led to a 5%
organic net revenue decline for Ingram Micro. A 9% decrease in the
revenues of the consumer and commercial segment (PC, tablet,
printers), representing over a half of the company's business, was
partially offset by a 3% growth in advanced solutions (servers and
storage, networking) and an 18% increase in cloud solutions. For
2024, Moody's expects a slow rebound in the consumer and commercial
segment, while advanced solutions segment remains largely stable,
resulting in overall low single digit revenue growth for Ingram
Micro.
Ingram Micro's operating margins stayed flat at 2% (Moody's
adjusted) supported by mix shift to higher margin products and
tight cost controls. Moody's expects the operating margins to
remain at similar levels in 2024 as Ingram Micro exercises good
price discipline, cost controls and focuses on growing advanced
solutions and cloud business. During 2023, Ingram Micro repaid $560
million of the term loan and the overall outstanding debt balance
decreased by $460 million. As a result, leverage remained unchanged
at 3.6x debt/EBITDA despite the drop in earnings.
Ingram Micro's liquidity is very good with $948 million of balance
sheet cash as of December 31, 2023 and a $3.5 billion ABL revolver
facility due July 2026 ($30 million outstanding as of December 31,
2023), with the borrowing base capacity of 100%.
The B1 rating for the senior secured term loan and senior secured
notes is one notch below the CFR reflecting the debt's size and
position behind the ABL revolver (unrated). Instrument ratings
reflect the overall probability of default of the company given the
PDR of Ba3-PD and Moody's expectation for an average family
recovery in a default scenario. In addition to a first lien on
working capital assets, the ABL revolver has a second lien on fixed
assets. The senior secured debt instruments come with a first lien
on fixed assets and a second lien on working capital assets.
Typical for the IT distribution sector, the majority of
non-intangible assets of Ingram Micro are working capital assets
with limited fixed assets providing first lien collateral for the
senior secured debt instruments.
The stable outlook reflects Moody's expectation that Ingram Micro
will maintain very good liquidity, stable operating margins, and
debt/EBITDA in the mid 3x level over the next 12 months. Moody's
expects the company will continue to repay debt with excess cash to
sustain leverage should the industry downturn prolong.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Ratings could be upgraded if Ingram Micro demonstrates commitment
to prudent financial policies, maintains debt/EBITDA in the low 3x
range (Moody's adjusted) and very good liquidity.
Ratings could be downgraded if Ingram Micro adopts more aggressive
financial policies, debt/EBITDA is sustained above 3.75x, or
liquidity were to weaken. Increased competition from distributors
and vendors/OEMs that causes meaningful market share losses,
pricing pressures, or margin erosion could also lead to a
downgrade.
Headquartered in Irvine, California, Ingram Micro is one of the
largest global information technology wholesale distributors
providing sales, marketing, and supply chain solutions. Owned by
private equity sponsor, Platinum Equity, the company generated
$48.1 billion of revenue in 2023.
The principal methodology used in these ratings was Distribution
and Supply Chain Services published in February 2023.
INSTANT BRANDS: Hughes Watters & Sternklar Disclose Claimants
-------------------------------------------------------------
In the Chapter 11 cases of Instant Brands Acquisition Holdings Inc.
and certain of its affiliates, Hughes Watters & Askanase, LLC
("HWA") and Jeffrey D. Sternklar, LLC filed a verified statement
pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure
to disclose that it is representing Claimants.
HWA is a law firm located at 1201 Louisiana St., 28th Floor,
Houston, TX 77002. Sternklar is a law firm located at 101 Federal
Street, 19th Floor, Boston, MA 02110. HWA and Sternklar have been
retained in the case on behalf of the Claimants.
The Claimants do not hold any disclosable economic interests (as
defined in Fed. R. Bankr. P. 2019(a)(1)) in relation to the
Debtors.
Counsel do not represent the Claimants as a "committee" (as such
term is used in the Bankruptcy Code and the Bankruptcy Rules) and
do not undertake to represent the interests of, and is not a
fiduciary for, any creditor, party in interest, or other entity
that has not signed a retention agreement with Counsel. No Claimant
represents or purports to represent any other Claimant in
connection with the Debtors' chapter 11 cases.
In addition, each Claimant (a) does not assume any fiduciary or
other duties to any other Claimant and (b) does not purport to act
or speak on behalf of any other Claimant in connection with these
chapter 11 cases.
The names of all the Claimants are: 1.) Seth Berrios; 2.) Unique
Lee; 3.) Amber Anenberg; 4.) Jayton Bray; 5.) Jeffrey M. Banks; 6.)
Catherine Berrios; 7.) Valery Capuchino; 8.) Benjamin Dotson; 9.)
Samantha Ginesin; 10.) Blaze Harms; 11.) Benjamin Johnson; 12.)
Rocana Lefleur; 13.) Courtney Markt; 14.) Lindsey Russell; and 15.)
Mollie Williams.
Attorneys for Claimants:
Wayne Kitchens, Esq.
Heather H. McIntyre, Esq.
Hughes Watters Askanase, LLP
1201 Louisiana, 28th Floor
Houston, Texas 77002
Telephone: (713) 759-0818
Facsimile: (713) 759-6834
-AND-
Jeffrey D. Sternklar, Esq.
Jeffrey D. Sternklar, LLC
101 Federal Street, 19th Floor
Boston, MA 02110
Telephone: (617) 207-7800
Facsimile: (617) 507-6530
About Instant Brands
Instant Brands designs, manufactures and markets a global portfolio
of innovative and iconic consumer lifestyle brands: Instant, Pyrex,
Corelle, Corningware, Snapware, Chicago Cutlery, ZOID and Visions.
Instant Brands Holdings Inc. and Instant Brands Inc., and their
affiliates sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 23-90716) on June
12, 2023. In the petition signed by Adam Hollerbach, chief
restructuring officer, the Debtors disclosed up to $1 billion in
both assets and liabilities. Judge David R. Jones oversees the
case.
Davis Polk & Wardwell LLP's Brian M. Resnick, Steven Z. Szanzer and
Joanna McDonald serve as counsel to the Debtors. The Debtors also
tapped Haynes and Boone, LLP as Texas counsel, Stikeman Elliott LLP
as Canadian counsel, AlixPartners, LLP as financial advisor,
Guggenheim Securities LLC as investment banker, and Epiq Corporate
Restructuring, LLC as claims, noticing, agent, solicitation and
administrative advisor.
DLA Piper LLP (US) serves as counsel to the Official Committee of
Unsecured Creditors.
Ropes & Gray LLP serves as counsel to the DIP Lenders, and Moelis &
Company LLC and Ankura Consulting Group, LLC act as advisors to the
Term DIP Secured Parties.
Skadden, Arps, Slate, Meagher & Flom LLP and Norton Rose Fulbright
and Norton Rose Fulbright Canada LLP serve as counsel and FTI
Consulting as financial advisor to the ABL DIP Secured Parties.
Kramer Levin Naftalis & Frankel LLP serves as counsel to Cornell
Capital.
ITTELLA INTERNATIONAL: Amends Plan; Confirmation Hearing May 8
--------------------------------------------------------------
Ittella International, LLC, and its Debtor Affiliates submitted
First Amended Disclosure Statement describing First Amended Joint
Chapter 11 Liquidating Plan.
As a result of the Asset Sales, together with the rejection of
various executory contracts and unexpired leases and the
abandonment of inventory that could not be sold, the Debtors'
primary remaining Assets are currently comprised of (1) Cash
(including any unused portion of the GE Letter of Credit Account),
(2) accounts receivable that were not sold, (3) Estate Causes of
Action, (4) proceeds of insurance and insurance policies, and (5)
any value that may be obtained for TCI's public shell.
Each of the Debtors, other than Ittella, would be administratively
insolvent if they each had to independently satisfy the UMB
obligations and pay administrative claims owed to Ittella for other
post-Petition Date Intercompany Transactions, the Plan effectuates
the following compromise among the Debtors and their Estates (the
"Intercompany Compromise") whereby (1) all intercompany claims (the
"Intercompany Claims") will be disallowed and (2) the Debtors'
Cash, including any that is on hand on the Effective Date or
recovered thereafter, will be consolidated into Ittella, provided
that (3) Ittella shall pay each Debtor funds sufficient to pay (a)
in full, the Allowed Secured Claims, Allowed Administrative Claims,
Allowed Priority Tax Claims, and Allowed Other Priority Claims and
(b) up to a 5% distribution to the Holders of Allowed General
Unsecured Claims.
The Confirmation Order shall approve the Intercompany Compromise
whereby (1) all Intercompany Claims, other than Ittella's claim
against NMFD, will be disallowed and (2) the Debtors' Cash,
including any that is on hand on the Effective Date or recovered
thereafter, will be consolidated into Ittella, provided that (3)
Ittella shall pay each other Debtor funds sufficient to pay (a) in
full, the Allowed Secured Claims, Allowed Administrative Claims,
Allowed Priority Tax Claims, and Allowed Other Priority Claims of
the other Debtors and (b) other than NMFD, up to a 5% distribution
to the Holders of Allowed General Unsecured Claims against the
Other Debtors.
Holders of Allowed General Unsecured Claims of Ittella and NMFD
shall share Pro Rata in all remaining distributions, provided,
however, that Ittella's claim against NMFD shall be Allowed in all
respects, such that Ittella shall receive 90% of all distributions
to Holders of Allowed General Unsecured Claims of NMFD (the "NMFD
Split"). To the extent all Allowed Claims against Ittella are paid
in full, plus interest, the Liquidating Trustee shall make further
prorata distributions to the Holders of Allowed General Unsecured
Claims of each other Debtor until all such claims are paid in full,
plus interest.
Unless otherwise expressly provided under the Plan, on the
Effective Date, the Debtors' Assets, including, without limitation,
all Estate Causes of Action, will vest in the Liquidating Trust
free and clear of all claims, liens, encumbrances, charges and
other interests, subject to the provisions of the Plan. On and
after the Effective Date, the transfer of the Debtors' Assets from
the Estates to the Liquidating Trust will be deemed final and
irrevocable and Distributions may be made from the Liquidating
Trust.
The Liquidating Trust shall be entitled to incur, and to be
reimbursed for, Post-Effective Plan Expenses in performing its
duties and obligations under the Plan and Liquidating Trust
Agreement. All Post-Effective Date Plan Expenses shall be expenses
of the Liquidating Trust. The Liquidating Trustee shall have no
personal liability for any Post-Effective Date Plan Expenses. The
Liquidating Trustee shall disburse funds from the Liquidating Trust
Assets for the purpose of funding the Post-Effective Date Plan
Expenses.
The Confirmation Hearing has been scheduled for May 8, 2024 at 9:00
a.m. Ballots must be physically received by no later than April 12,
2024 at 3:00 p.m. to be counted as votes.
Objections to the Confirmation of the Plan must be filed with the
Bankruptcy Court, and served no later than April 23, 2024 at 3:00
p.m.
A full-text copy of the First Amended Disclosure Statement dated
March 21, 2024 is available at https://urlcurt.com/u?l=xSUPU8 from
Stretto, the claims agent.
Attorneys for Debtors:
David L. Neale, Esq.
Todd M. Arnold, Esq.
John-Patrick M. Fritz, Esq.
Robert M. Carrasco, Esq.
Levene, Neale, Bender, Yoo & Golubchik, LLP
2818 La Cienega Avenue
Los Angeles, CA 90034
Tel: (310) 229-1234
Fax: (310) 229-1244
Email: dln@lnbyg.com
tma@lnbyg.com
jpf@lnbyg.com
rmc@lnbyg.com
About Ittella International LLC
Ittella International, LLC, is a supplier of plant-based products
based in Paramount, Calif.
Ittella International and seven affiliates sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. C.D. Cal. Lead Case
No. 23-14154) on July 2, 2023. In the petition signed by its chief
executive officer, Salvatore Galletti, Ittella International
reported $10 million to $50 million in both assets and
liabilities.
Judge Sandra R. Klein oversees the cases.
The Debtors tapped David L. Neale, Esq., at Levene, Neale, Bender,
Yoo and Golubchik, LLP as bankruptcy counsel; Rutan and Tucker, LLP
as their special corporate and SEC counsel; SC&H Group, Inc. as
investment banker; and Grant Thornton, LLP as accountant.
The U.S. Trustee for Region 16 appointed two separate committees to
represent unsecured creditors of Ittella International and its
affiliate, New Mexico Food Distributors, Inc. The committee of New
Mexico Food Distributors tapped Brinkman Law Group, PC as counsel.
JER INVESTORS: Amends Junior Subordinated Note Claims Pay
---------------------------------------------------------
JER Investors Trust Inc., et al., submitted a Modified Combined
Disclosure Statement and Chapter 11 Plan dated March 21, 2024.
Pursuant to the Plan, the Debtors seek resolution of outstanding
Claims against, and Interests in, the Debtors, and the liquidation
of the Debtors' remaining assets.
While the Debtors' available cash will provide a substantial
recovery for unsecured creditors, those funds will not be
sufficient to pay creditors in full. Given the absence of any
prospect for a full recovery for the Debtors' creditors, or any
recovery at all for JERIT's shareholders, the Debtors determined
that it would be in their interest to wind down and distribute this
cash, less wind-down costs, to their creditors.
The Debtors considered various options to effectuate the wind down.
Considering, among other things, that JERIT remains a public
company with widely-dispersed shareholders, and that there has been
no quorum at any annual shareholder meeting since at least 2011,
the Debtors determined that a wind-down under state law would not
be practicable. Instead, the Debtors concluded the most efficient
way to effect creditor distributions and wind-down is through these
Chapter 11 Cases.
This Plan provides for the substantive consolidation of the assets
and liabilities of the Debtors. All of the assets and liabilities
of the Debtors are treated, for all purposes under the Plan, as the
assets and liabilities of a single consolidated entity. Claims
filed against more than one of the Debtors and seeking recovery of
the same debt shall be treated as one non-aggregated Claim against
the consolidated Estates to the extent that such Claim is an
Allowed Claim.
Like in the prior iteration of the Plan, each holder of an Allowed
General Unsecured Claim shall receive in full satisfaction,
settlement, and release of, and in exchange for such Allowed
General Unsecured Claim such holder's Pro Rata Share of the Plan
Distributable Cash.
Class 4 consists of all Junior Subordinated Note Claims against the
Debtors. The Indenture Trustee, for the ratable benefit of the
holders of the Junior Subordinated Notes and itself, shall receive
in full satisfaction, settlement, and release of all Allowed Junior
Subordinated Note Claims the Pro Rata Share of the Plan
Distributable Cash for such Allowed Claims. As no "Senior Debt"
(within the meaning of that term given by the Junior Subordinated
Indenture) in favor of which the Junior Subordinated Notes are by
such indenture's terms subordinated, is presently outstanding, the
Junior Subordinated Notes Claims are pari passu with General
Unsecured Claims. For the avoidance of doubt, amounts received by
the Indenture Trustee on account of the Allowed Junior Subordinated
Note Claims will be subject to the Indenture Trustee's charging
lien and priority of payment rights under the Junior Subordinated
Indenture Agreement.
The Debtors commenced these Chapter 11 Cases to allow for an
efficient and orderly wind down process and will not be conducting
any business operations after the Effective Date. Thus, provided
that the Combined Plan and Disclosure Statement is confirmed and
consummated, the Estates will not be subject to future
reorganization or liquidation. The Debtors therefore believe that
the Plan is feasible and meets the requirements of section
1129(a)(11) of the Bankruptcy Code.
Except as otherwise provided herein, upon the Effective Date all
property of the Debtors' Estates shall vest in the Reorganized
Debtor. The Plan shall be funded by Available Cash and Non-Cash
Assets.
A full-text copy of the Modified Combined Disclosure Statement and
Plan dated March 21, 2024 is available at
https://urlcurt.com/u?l=Wn2eaf from PacerMonitor.com at no charge.
Counsel to the Debtors:
David M. Fournier, Esq.
Kenneth A. Listwak, Esq.
Tori L. Remington, Esq.
TROUTMAN PEPPER HAMILTON SANDERS LLP
Hercules Plaza, Suite 5100
1313 N. Market St.
Wilmington, DE 19801
Tel: (302) 777-6500
E-mail: david.fournier@troutman.com
kenneth.listwak@troutman.com
tori.remington@troutman.com
-and-
Deborah Kovsky-Apap, Esq.
TROUTMAN PEPPER HAMILTON SANDERS LLP
875 Third Ave.
New York, NY 10022
Tel: (212) 704-6000
E-mail: deborah.kovsky@troutman.com
About JER Investors Trust
JER Investors Trust Inc. is a specialty finance company quoted on
the Pink Sheets that manages a portfolio of commercial real estate
structured finance products. Its investments include commercial
mortgage backed securities, mezzanine loans and participations in
mortgage loans, and an interest in the US Debt Fund. JER Investors
Trust Inc. is organized and conducts its operations so as to
qualify as a real estate investment trust ("REIT") for federal
income tax purposes. On the Web:
http://www.jerinvestorstrust.com/.
JERIT Non-CDO CMBS 1 LLC and affiliate JER Investors Trust Inc.
sought Chapter 11 protection (Bankr. D. Del. Case No. (23-12108 and
23-12109) on Dec. 29, 2023.
The Hon. Thomas M. Horan is the case judge.
The Debtors tapped TROUTMAN PEPPER HAMILTON SANDERS LLP as counsel;
and DUNDON ADVISERS as financial advisor.
JER Investors estimated assets of $10 million to $50 million and
debt of $100 million to $500 million. JERIT Non-CDO estimated
assets of $10 million to $50 million and debt of just under
$50,000.
JM4 TACTICAL: Unsecureds to Get $1K per Month for 60 Months
-----------------------------------------------------------
JM4 Tactical LLC filed with the U.S. Bankruptcy Court for the
Northern District of Texas a Chapter 11 Plan of Reorganization
dated March 25, 2024.
Founded in 2016, the Debtor is a family owned and operated, gun
holster manufacturing company. Specifically, the Debtor
manufactures magnetic retention conceal carry gun holsters that
provide unmatched comfort, versatility, and quality to its users.
The Debtor is currently owned by James Chad Myers and Shawndalyn
Myers with each owning 50% of the Debtor. After confirmation, Mr.
and Mrs. Myers will remain the owners of the Debtor.
Due to cash flow issues resulting from a drop in revenue in the
year 2023, the Debtor was unable meet its monthly debt obligations.
Making matters worse, the Debtor was unable to secure additional
capital to fund operations. The net effect was that the Debtor did
not have sufficient liquidity to continue its business outside the
protection of the Bankruptcy Court and was forced to seek relief
pursuant to Chapter 11 of the Bankruptcy Code.
This Plan constitutes a chapter 11 reorganization plan for the
Debtor. In summary, the Plan provides for the Debtor to restructure
its debts by reducing its monthly payments to the amount of the
Debtor's Disposable Income. The Debtor believes that the Plan will
ensure Holders of Allowed Claims will receive greater distributions
under the Plan than they would if the Debtor's Chapter 11 Case was
converted to Chapter 7 and the Debtor's Assets liquidated by a
Chapter 7 Trustee.
It is anticipated that after confirmation, the Debtor will continue
in business. Based upon the projections, the Debtor believes it can
service the debt to creditors.
Class 4 consists of Allowed Unsecured Claims. The Debtor shall make
60 consecutive monthly payments commencing 30 days after the
Effective Date of $1,128.18. The Holders of Allowed Unsecured
Claims shall receive their pro rata share of the monthly payment.
The Class 4 Claimants are impaired.
The allowed unsecured claims total $644,297.95.
Class 5 consists of Current Owners. The current owners will receive
no payments under the Plan; however, they will be allowed to retain
their ownership in the Debtor. The Class 5 Claimants are
unimpaired.
From and after the Effective Date, the Debtor will continue to
exist as a Reorganized Debtor. By reducing the Debtor's monthly
obligations to creditors to the Reorganized Debtor's Disposable
Income, the Reorganized Debtor will have sufficient cash to
maintain operations and will allow the Reorganized Debtor to
successfully operate following the Effective Date of the Plan.
A full-text copy of the Plan of Reorganization dated March 25, 2024
is available at https://urlcurt.com/u?l=Ul86Ab from
PacerMonitor.com at no charge.
Counsel to the Debtor:
Brandon J. Tittle, Esq.
TITTLE LAW GROUP, PLLC
5465 Legacy Dr., Ste. 650
Plano, TX 75024
Telephone: (972) 731-2590
Email: btittle@tittlelawgroup.com
About JM4 Tactical
JM4 Tactical, LLC, is a manufacturer of gun holster products in
Abilene, Texas.
JM4 Tactical filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. N.D. Texas Case No. 24-10026) on Feb. 16,
2024, with up to $50,000 in assets and $1 million to $10 million in
liabilities. Shawndalyn Myers, managing member, signed the
petition.
Brandon John Tittle, Esq., at Tittle Law Group, PLLC represents the
Debtor as bankruptcy counsel.
KALO CLINICAL: Seeks to Hire Ordinary Course Contractors
--------------------------------------------------------
Kalo Clinical Research, LLC seeks approval from the U.S. Bankruptcy
Court for the District of Utah to employ ordinary course
contractors.
The contractors include:
a. Eiko Madsen is a bookkeeper and assists the Debtor with its
bookkeeping and general accounting within the Integrated Accounting
Solutions firm. In exchange for her services, the Debtor pays
Madsen $250 per month.
b. Jeff Lunt is a web and online content developer and assists
the Debtor with its automation of business development and customer
relations management within Small Business To Go. In exchange for
his services, the Debtor pays Lunt $447 per month.
c. Christian Burns is a business development professional and
assists the Debtor with finding new clinical trials to execute
within Populace Health. In exchange for his services, the Debtor
pays Burns $2,500 per month.
d. Chris Singer, NP is a nurse practitioner and assists the
Debtor in performing safety assessments for study participants as
they enroll, continue and complete clinical trials, primarily for
the creation and/or improvement of medicine. Singer provides
services as needed as a 1099 contractor at the rate of $75/hour or
1.5 percent of the Medicare reimbursement rate for study procedures
performed.
e. Jesse Jensen, DO is a dermatologist and assists the Debtor
in overseeing clinical trials primarily for the creation and/or
improvement of medicine. Jensen provides services as needed as a
1099 contractor at the rate of $125/hour or 1.5 percent of the
Medicare reimbursement rate for study procedures performed.
f. Cuper Martinez, MD is an internal medicine physician and
assists the Debtor in overseeing clinical trials primarily for the
creation and/or improvement of medicine. CMartinez provides
services as needed as a 1099 contractor at the rate of $150/hour or
1.5 percent of the Medicare reimbursement rate for study procedures
performed.
g. Mark Martinez, MD is a pulmonologist and assists the Debtor
in overseeing clinical trials primarily for the creation and/or
improvement of medicine. MMartinez provides services as needed as a
1099 contractor at the rate of $150.00/hour or 1.5 percent of the
Medicare reimbursement rate for study procedures performed.
h. Namealani Hekekia, MD is a family practice physician and
assists the Debtor in overseeing clinical trials primarily for the
creation and/or improvement of medicine. Hekekia provides services
as needed as a 1099 contractor at the rate of $150/hour or 1.5
percent of the Medicare reimbursement rate for study procedures
performed.
The Debtor does not believe that any of the ordinary course
professionals have an interest materially adverse to it, its
estates, creditors, or other parties in interest in connection with
the matter upon which they are to be engaged.
About Kalo Clinical Research, LLC
Kalo Clinical Research is a clinical research site local to the
greater Salt Lake area in Utah, providing people with the
opportunity to contribute to the development/advancement of
medicine that future generations will rely on.
Kalo Clinical Research, LLC filed its voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bankr. D. Utah Case No.
24-21124) on March 18, 2024, listing $634,599 in assets and
$1,059,526 in liabilities. The petition was signed by Isabella M.
Johnson as member, chief executive officer.
Judge Peggy Hunt presides over the case.
George B. Hofmann, Esq. at COHNE KINGHORN, P.C. represents the
Debtor as counsel.
KPM INVESTMENT: Voluntary Chapter 11 Case Summary
-------------------------------------------------
Debtor: KPM Investment B, LLC
6370 Shannon Parkway
Union City GA 30291
Business Description: The Debtor is engaged in activities related
to real estate.
Chapter 11 Petition Date: March 28, 2024
Court: United States Bankruptcy Court
Northern District of Georgia
Case No.: 24-53226
Debtor's Counsel: William Rountree, Esq.
ROUNTREE, LEITMAN, KLEIN & GEER, LLC
2987 Clairmont Road Suite 350
Atlanta GA 30329
Tel: 404-584-1238
Email: wrountree@rlkglaw.com
Estimated Assets: $0 to $50,000
Estimated Liabilities: $10 million to $50 million
The petition was signed by Isaac Perlmutter as authorized
representative.
The Debtor filed an empty 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/OC2NUIQ/KPM_Investment_B_LLC__ganbke-24-53226__0001.0.pdf?mcid=tGE4TAMA
LATHAM POOL: Moody's Lowers CFR to B2 & Alters Outlook to Stable
----------------------------------------------------------------
Moody's Ratings downgraded Latham Pool Products, Inc.'s ratings
including the Corporate Family Rating to B2 from B1, Probability of
Default Rating to B2-PD from B1-PD, and the rating on the company's
senior secured first lien credit facility to B2 from B1. The first
lien credit facility consists of a $75 million first lien revolver
due 2027 and $325 million original principal amount first lien term
loan due 2029. The outlook changed to stable from negative and the
company's speculative grade liquidity was upgraded to SGL-1 from
SGL-2.
"The ratings downgrade reflects Latham's high financial leverage
and Moody's expectation that leverage will remain high amid a
challenging operating environment over the next 12 months," stated
Oliver Alcantara Vice President – Senior Analyst at Moody's
Ratings. "The pools market is experiencing a multi-year cyclical
downturn, however, the company's very good liquidity supported by a
healthy cash balance provides financial flexibility to manage
through demand challenges over the next 12-18 months."
Pressures on consumer discretionary spending continues to
meaningfully affect demand for pools with significant ongoing
declines in pool starts. Latham reported a year-over-year revenue
decline of 18.6% in the fiscal 2023 period ending December 31,
2023, with in-ground pools revenue declining around 23%. The
company's profitability decline was more pronounced with
company-adjusted EBITDA lower by 38.6% over the same period. As a
result, Latham's financial leverage is high with debt/EBITDA (all
ratios are Moody's-adjusted unless otherwise stated) at around 5.0x
as of fiscal 2023.
Despite these challenges, Latham generated good free cash flow of
$83.2 million in fiscal 2023, in part supported by inventory
reduction, and increased its cash balance to $103 million. The
company's speculative grade liquidity SGL-1 reflects Latham's very
good liquidity supported by its healthy cash balance and access to
an undrawn $75 million revolving credit facility due 2027 as of
December 31, 2023, and Moody's expectation for continued positive
annual free cash flow over the next 12 months.
Still, risks to Latham's business remain high due to its exposure
to discretionary consumer spending and the cyclical housing market.
US existing home sales remain well below pre-pandemic levels and
higher borrowing costs and inflationary pressures are negatively
affecting discretionary spending, particularly for high priced
discretionary goods such as pools. Latham's financial guidance for
fiscal 2024 anticipates revenue of $490 million to $520 million,
relative to $566.5 million reported in fiscal 2023. The company
also expects to report company-adjusted EBITDA of $60-$70 million
in fiscal 2024, or a year-over-year decline of 32% to 21%
respectively. Moody's projects that Latham's debt/EBITDA leverage
will remain high above 5.0x over the next 12 months. Moody's also
projects free cash flow of at least $15 million in fiscal 2024.
Latham's healthy cash balance and anticipated free cash flow
provides financial flexibility to fund business seasonality, help
manage a difficult operating environment, and repay debt over the
next 12 months. Latham repaid $18 million of its term loan during
1Q-2024 using balance sheet cash.
RATINGS RATIONALE
Latham's B2 CFR broadly reflects its solid market position in its
core pool product categories, particularly in the company's biggest
and high margin fiberglass category, which continues to grow its
share of the US market. The company's EBITDA margin in the
low-teens percentage range supports positive annual free cash flow,
and its large manufacturing network across North America is a
competitive advantage. Latham's very good liquidity is supported by
its healthy cash balance of $103 million and access to an undrawn
$75 million revolver as of December 31, 2023, which provides
financial flexibility to fund business seasonality over the next 12
months.
Latham's credit profile also reflects its small scale and narrow
product focus in the highly discretionary swimming pool and pool
equipment categories, and its exposure to the inherent cyclicality
and high seasonality of the residential pool industry due to
reliance on discretionary consumer spending and weather. The
ongoing pool industry downturn due to inflationary pressures on
consumer discretionary spending and weaker housing market trends is
negatively impacting the company's profitability and weakening
credit metrics. Latham's debt/EBITDA leverage is high at around
5.0x as of fiscal 2023. Moody's anticipates demand pressures will
persist in 2024 and that consumer demand for pools will continue to
moderate, and projects that debt/EBITDA will remain high at over
5.0x, and gradually improve towards 4.5x in 2025 as industry
volumes stabilize. Governance risk factors primarily relate to
Latham's high ownership concentration and acquisition strategy.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The stable outlook reflects Moody's expectations that Latham will
maintain very good liquidity over the next 12-18 months supported
by continued positive annual free cash flow generation. The
anticipated free cash flow combined with the company's healthy cash
balance of over $100 million at the end of fiscal 2023 provides
significant cushion to fund business seasonality and capital
expenditures, and provides financial flexibility to navigate the
ongoing industry demand headwinds.
The ratings could be upgraded if the company increases its revenue
scale and demonstrates consistent organic revenue growth with
EBITDA margin expanding to the mid-to-high teens percentage range,
and debt/EBITDA is sustained below 3.5x. A ratings upgrade would
also require the company maintaining at least good liquidity
supported by healthy free cash flows and revolver availability, as
well as Moody's expectations of financial policies that support
credit metrics at the above level.
The ratings could be downgraded if the company's operating
performance is weaker than Moody's expectations highlighted by
meaningful sustained organic declines in revenue, if profitability
deteriorates such that debt/EBITDA is sustained above 4.5x, or if
free cash flow generation is modest or negative. The ratings could
also be downgraded if liquidity deteriorates including by large
revolver borrowings, or if the company completes a large
debt-financed acquisition or shareholder distribution that
increases leverage or reduces its financial flexibility.
The principal methodology used in these ratings was Consumer
Durables published in September 2021.
Headquartered in Latham, New York, Latham Pool Products, Inc. is a
manufacturer of in-ground residential swimming pools and components
in North America, Australia, and New Zealand. Latham reported
revenue of around $566.49 million for the last twelve months ending
December 31, 2023. The company is majority owned and controlled by
financial sponsors Pamplona Capital Management and Wynnchurch,
which collectively own approximately 58.2% of Latham's shares.
Latham Group, Inc. is the indirect parent of Latham Pool Products,
Inc. and its shares are listed on the Nasdaq stock exchange under
the ticker symbol "SWIM".
LAXMI CAPITAL: Case Summary & 18 Unsecured Creditors
----------------------------------------------------
Debtor: Laxmi Capital, LLC
21781 Ventura Blvd 666
Woodland Hills, CA 91364
Chapter 11 Petition Date: March 28, 2024
Court: United States Bankruptcy Court
Central District of California
Case No.: 24-10503
Debtor's Counsel: Sandford L. Frey, Esq.
LEECH TISHMAN FUSCALDO & LAMPL, INC.
200 S. Los Robles Avenue, Suite 300
Pasadena, CA 91101
Tel: (626) 796-4000
Email: sfrey@leechtishman.com
Estimated Assets: $0 to $50,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Dean Matthew as 100% Member and Manager
of Laxmi Capital, LLC.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 18 unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/MB6EHQA/LAXMI_CAPITAL_LLC__cacbke-24-10503__0001.0.pdf?mcid=tGE4TAMA
LIQUID TECH: Moody's Affirms 'B3' CFR & Alters Outlook to Positive
------------------------------------------------------------------
Moody's Ratings changed the outlook for Liquid Tech Solutions
Holdings, LLC to positive from stable. Moody's also affirmed the
company's B3 corporate family rating, the B3-PD probability of
default rating and the B3 rating on the senior secured first lien
credit facilities.
The positive outlook reflects Moody's expectation that Liquid
Tech's credit metrics will continue to strengthen and its good
liquidity will be sustained. Moody's further expects that the
company will continue to diversify its geographic footprint while
maintaining a financial policy that balances the pursuit of
acquisitive growth with modest impact on leverage. Moody's further
expects strong demand in the company's end markets that will
continue to improve as freight volumes are expected to pick up in
the second half of 2024.
RATINGS RATIONALE
The ratings reflect Liquid Tech's small scale, with net revenue of
about $300 million in 2023, in a highly fragmented mobile
(truck-to-truck) refueling market. The company has a national
footprint serving a variety of end-markets and operating in over 45
states in the US. Softness in the highly cyclical transportation
sector has negatively impacted volumes for Liquid Tech's customers
resulting in slower organic growth. Liquid Tech has a disciplined
strategy of growth through acquisitions which are mostly small
tuck-ins with limited integration challenges. Furthermore, efforts
to drive cost efficiencies, including automating tasks with
technology have improved profitability. Moody's expects Liquid Tech
to sustain EBITDA margin around 5%. Moody's expects debt-to-EBITDA
to modestly improve to around 4.5x in the next 12-18 months from
4.8x at year-end 2023.
Liquid Tech's good liquidity is supported by $28 million of cash
and full availability under its $100 million revolving credit
facility as of December 31, 2023. Moody's expects that free cash
flow will be sufficient to fund necessary capital expenditures and
tuck-in acquisitions. However, the timing of some acquisitions may
require periodic draws on the revolving credit facility.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded with sustained earnings growth that
results in stronger credit metrics, including maintaining
debt-to-EBITDA below 5.0x and EBITDA margin of around 5%. Upward
rating pressure could also result from a prudent acquisition
strategy, improvements in the company's end markets driving demand
growth and sustained positive free cash flow.
The ratings could be downgraded with meaningful debt financed
acquisitions or shareholder distributions that result in
debt-to-EBITDA sustained above 6.5x or if the company has problems
arising from integrating acquisitions. A material deterioration in
business conditions or liquidity, including increased reliance on
the revolver or negative free cash flow could also result in a
downgrade.
The principal methodology used in these ratings was Surface
Transportation and Logistics published in December 2021.
Liquid Tech Solutions Holdings, LLC, is a provider of
truck-to-truck mobile refueling solutions to customers in a variety
of end markets in the United States. Net revenue for the recently
ended 2023 fiscal year was $298 million. The company is majority
owned by Lindsay Goldberg, a private equity firm.
LIQUID TECH: S&P Alters Outlook to Positive, Affirms 'B-' ICR
-------------------------------------------------------------
S&P Global Ratings revised the outlook to positive from stable. S&P
also affirmed all ratings, including its 'B-' issuer credit
rating.
The positive outlook reflects the potential that S&P will raise its
rating on LTS over the next year if it maintains leverage
comfortably beneath 5x with a cushion for potential business
volatility.
S&P said, "The outlook revision reflects our expectation LTS will
improve leverage comfortably below 5x due to moderate top-line and
earnings growth. We forecast low-single-digit percent revenue
growth in 2024. This comes from increases in volumes from recent
acquisitions, which improved LTS' national service footprint and
customer site growth. Favorable industry tailwinds combined with
labor and pricing efficiencies enable the company to support the
rising demand of fuel-delivery services. We expect the continued
growth momentum to support earnings improvement and leverage
reduction to low-4x in 2024 and 2025. However, volatility in fuel
prices could weigh on our cash flow forecast.
"Although we forecast sufficient cash flow generation, volatile
working capital from exposure to commoditized products could hurt
it. In fourth-quarter 2023, LTS improved its collection cycle
through close monitoring of key customer accounts and incentivizing
its sales force. These working capital efficiencies resulted in the
company generating positive operating cash flow. However, we are
monitoring the sustainability of improved cash conversion cycle
especially during challenging economic conditions. LTS' top line is
fairly insulated from commodity prices as it passes most of these
on to customers, but its working capital remains volatile due to
diesel price fluctuations.
"We view LTS' revenues as largely transactional in nature, which
limits longer-term revenue visibility. The company's narrow
business focus in the highly fragmented truck-to-truck (T2T)
refueling market constrains our assessment. Despite being one of
the leading service providers in the market, the scale of the
company's operations is relatively small, and it competes against
smaller, regional service providers. Offsetting these factors are
the company's long tenured relationships and diverse customer base
with limited customer churn.
"While we believe the company's financial policy will likely focus
more on growth initiatives as has been the case historically, LTS
may prioritize shareholder returns as the company is
majority-sponsor owned. LTS aims to acquire small-sized companies
and we believe acquisitions will remain modest for the near term.
We think tuck-in acquisitions are important for the company to
achieve density in trucking routes and improve operating
efficiencies. Historically, the company has not paid dividends
(excluding tax-related distributions) and we do not anticipate the
company will pay a dividend if acquisitions become more pronounced
going forward.
"The positive outlook reflects the potential that we will raise our
rating on LTS over the next 12 months if it maintains leverage
comfortably beneath 5x and cash flow trends prevail."
Governance is a moderately negative consideration, as it is for
most rated entities owned by private-equity sponsors. We believe
the company's highly leveraged financial risk profile points to
corporate decision-making that prioritizes the interests of the
controlling owners. This also reflects private-equity sponsors'
generally finite holding periods and focus on maximizing
shareholder returns.
LUXURY FLUSH: Seeks to Hire Fox Law Corporation as Legal Counsel
----------------------------------------------------------------
Luxury Flush, LLC asks the U.S. Bankruptcy Court for the Central
District of California to employ The Fox Law Corporation, Inc. as
its general bankruptcy counsel.
The firm will render these services:
(a) advise the Debtor of its powers and duties;
(b) negotiate, formulate, draft, and confirm a plan of
reorganization and to attend hearings before this court in
connection with any proposed disclosure statements and plans of
reorganization;
(c) examine all claims filed in these proceedings to determine
their nature, extent, validity, and priority;
(d) advise and assist the Debtor in connection with the
collection of assets, the sale of assets, or the refinancing of
same to implement any plan of reorganization which might be
confirmed in these proceedings;
(e) take such actions as may be necessary to protect the
properties of this estate from seizure or other proceedings,
pending confirmation and consummation of the plan of reorganization
in this case;
(f) advise the Debtor with respect to the rejection or
assumption of executory contracts and/or leases;
(g) advise and assist the Debtor in fulfilling its obligations
as fiduciaries of the Chapter 11 estate;
(h) prepare all necessary pleadings pertaining to matters of
bankruptcy law before the court;
(i) advise the Debtor on a limited basis with respect to tax
obligations and their payment;
(j) prepare such applications and reports as are necessary and
for which the services of an attorney are required; and
(k) render other necessary legal services for the Debtor.
Prior to the petition date, the firm received a retainer of $50,000
from the Debtor.
The hourly rates of the firm's counsel and staff are as follows:
Steven R. Fox $600
Associates $550
Law Clerk/Paralegal $150
Steven Fox, Esq., an attorney at The Fox Law Corporation, disclosed
in a court filing that the firm is a "disinterested person" as
defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Steven R. Fox, Exq.
THE FOX LAW CORPORATION, INC.
17835 Ventura Blvd., Suite 306
Encino, CA 91316
Telephone: (818) 774-3545
Facsimile: (818) 774-3707
Email: srfox@foxlaw.com
About Luxury Flush, LLC
Luxury Flush, LLC provides a variety of luxury porta potty restroom
rentals, perfect for weddings, corporate events, home remodels,
production and film, construction, and more.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. C.D. Cal. Case No. 24-10426) on March 18,
2024. In the petition signed by Natalie Downey, managing member,
the Debtor disclosed $5,939,856 in assets and $3,097,630 in
liabilities.
Judge Martin R Barash oversees the case.
Steven R. Fox, Esq., at THE FOX LAW CORPORATION INC., represents
the Debtor as legal counsel.
MAGNOLIA SENIOR LIVING: Seeks to Hire Jones & Walden as Counsel
---------------------------------------------------------------
Magnolia Senior Living @SugarHill LLC seeks approval from the U.S.
Bankruptcy Court for the Northern District of Georgia to employ
Jones & Walden LLC as counsel.
The firm's services include:
(a) preparing pleadings and applications;
(b) conducting examination;
(c) advising the Debtor of its rights, duties and
obligations;
(d) consulting with and representing the Debtor with respect
to a Chapter 11 plan;
(e) performing legal services incidental and necessary to the
day-to-day operations of the Debtor's business; and
(f) taking all other actions incident to the proper
preservation and administration of the Debtor's estate and
business.
The firm's current fee rates are $300 to $475 per hour for
attorneys and $110 to $200 per hour for paralegals and law clerks.
The firm received from the Debtors a retainer of $25,000.
The firm will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Cameron McCord, Esq., a partner at Jones & Walden, disclosed in a
court filing that the firm is a "disinterested person" pursuant to
Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Cameron M. McCord, Esq.
Jones & Walden LLC
699 Piedmont Ave. NE
Atlanta, GA 30308
Phone: (404) 564-9300
Email: cmccord@joneswalden.com
About Magnolia Senior Living @SugarHill LLC
Magnolia Senior Living @SugarHill LLC filed its voluntary petition
for relief under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ga.
Case No. 24-52814) on March 18, 2024, listing up to $50,000 in
assets and $1 million to $10 million in liabilities. The petition
was signed by Zhicong Chen as authorized agent.
Cameron M. McCord, Esq. at JONES & WALDEN, LLC represents the
Debtor as counsel.
MAGNOLIA SENIOR: Seeks to Hire Jones & Walden as Legal Counsel
--------------------------------------------------------------
Magnolia Senior Living LLC seeks approval from the U.S. Bankruptcy
Court for the Northern District of Georgia to employ Jones & Walden
LLC as counsel.
The firm's services include:
(a) preparing pleadings and applications;
(b) conducting examination;
(c) advising the Debtor of its rights, duties and
obligations;
(d) consulting with and representing the Debtor with respect
to a Chapter 11 plan;
(e) performing legal services incidental and necessary to the
day-to-day operations of the Debtor's business; and
(f) taking all other actions incident to the proper
preservation and administration of the Debtor's estate and
business.
The firm's current fee rates are $300 to $475 per hour for
attorneys and $110 to $200 per hour for paralegals and law clerks.
The firm received from the Debtors a retainer of $25,000.
The firm will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Cameron McCord, Esq., a partner at Jones & Walden, disclosed in a
court filing that the firm is a "disinterested person" pursuant to
Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Cameron M. McCord, Esq.
Jones & Walden LLC
699 Piedmont Ave. NE
Atlanta, GA 30308
Phone: (404) 564-9300
Email: cmccord@joneswalden.com
About Magnolia Senior Living LLC
Magnolia Senior Living LLC filed its voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ga. Case No.
24-52830) on March 19, 2024, listing $1 million to $10 million in
both assets and liabilities. The petition was signed by Zhicong
Chen as authorized agent.
Judge Wendy L. Hagenau presides over the case.
Cameron M. McCord, Esq. at JONES & WALDEN, LLC represents the
Debtor as counsel.
MAGNOLIA SENIOR: Tamara Miles Ogier Named Subchapter V Trustee
--------------------------------------------------------------
The U.S. Trustee for Region 21 appointed Tamara Miles Ogier, Esq.,
at Ogier, Rothschild & Rosenfeld, PC as Subchapter V trustee for
Magnolia Senior Living @SugarHill, LLC.
Ms. Ogier 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. Ogier declared that she is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Tamara Miles Ogier, Esq.
Ogier, Rothschild & Rosenfeld, PC
P.O. Box 1547
Decatur, GA 30031
Phone: (404) 525-4000
About Magnolia Senior Living
Magnolia Senior Living @SugarHill, LLC filed a petition under
Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. N.D. Ga.
Case No. 24-52814) on March 18, 2024, with up to $50,000 in assets
and up to $10 million in liabilities. Zhicong Chen, authorized
representative, signed the petition.
Cameron M. McCord, Esq., at Jones & Walden, LLC represents the
Debtor as legal counsel.
MARTIN MIDSTREAM: S&P Upgrades ICR to 'B' on Decreasing Leverage
----------------------------------------------------------------
S&P Global Ratings raised its issuer credit rating on Martin
Midstream Partners L.P., a Texas-based master limited partnership,
to 'B' from 'B-'.
As the same time, S&P raised its issue-level ratings on its
second-lien notes to 'B+'. The '2' recovery rating is unchanged,
indicating its expectation for significant recovery prospects
(70%-90%; rounded estimate: 70%).
The stable outlook on Martin reflects S&P's expectation that the
partnership will maintain leverage of 3.5x-4.0x through 2025.
Martin's S&P Global Ratings-adjusted EBITDA improved to $132
million in 2023 from $113 million in 2022 on its exit from butane
and higher volumes in its Terminalling and Storage segment. As a
result of the company's exit of its butane business and inventory
reduction, it repaid $130 million of debt under its revolving
credit facility in fiscal year 2023. As a result, leverage improved
to 3.7x in 2023 from 4.9x in 2022. S&P expects its leverage remain
in the 3.5x-4.0x area and interest coverage to remain in the
2.3x-2.6x area through 2025.
The exit of the butane business will reduce the volatility of cash
flows from Martin's margin-based businesses, increasing fee-based
contracts to approximately 70% of EBITDA going forward. It also
reduces the requirement for working capital for its margin-based
businesses, lowering average credit facility drawings over the
long-term. While the company still has other margin-based
businesses in its portfolio, such as its sulfur and lubricants
businesses, we believe the diversification in operating segments,
most of which are fee-based, will offset cash flow volatility going
forward.
S&P said, "We believe Martin's contract concentration with its
parent, Martin Resource Management Corp. (MRMC), could be a
limiting credit factor. In our view, MRMC's operating performance
affects Martin's credit profile. Due to their substantial business
interactions, we link our issuer credit rating on Martin to MRMC's
credit quality. However, Martin benefits from structural
protections that allow its credit quality to be stronger. Martin is
severable from MRMC, has independent financial prospects, and holds
itself out as a separate entity. At this time, MRMC's
creditworthiness does not constrain our issuer credit rating on
Martin; however, should the quality of MRMC weaken, it could impact
the rating.
"The stable outlook reflects our view that Martin will maintain
leverage of 3.5x-4.0x in 2024 and 2025 and interest coverage of
2.3x-2.6x.
"We could consider a negative rating action if Martin's
lower-than-expected EBITDA leads to sustained leverage above 5.0x
or sustained interest coverage below 2.0x or MRMC's credit quality
deteriorates."
While unlikely in the near term, S&P could consider a positive
rating action if:
-- S&P expects the company to maintain leverage below 4.0x on a
sustained basis;
-- Its interest coverage improves;
-- It increases its scale and scope of operations; and
-- MRMC's credit quality at improves.
MATADOR RESOURCES: Fitch Rates New Unsecured Notes Due 2032 'BB-'
-----------------------------------------------------------------
Fitch Ratings has assigned a 'BB-'/'RR4' rating to Matador
Resources Company's proposed senior unsecured notes due 2032.
Matador intends to use the proceeds to redeem its existing 5.875%
senior notes due 2026 via a tender offer, pay the tender premium
and associated transaction fees and for general corporate
purposes.
Matador's ratings and Positive Rating Outlook reflect Fitch's
expectation of increasing production size, improving financial
flexibility and leverage following reduction of the RBL and strong
FCF generation throughout the forecast. Matador's production size
and proved reserves are nearing 'BB' category thresholds and Fitch
will look to resolve the Outlook in the next 12 months following
continued production growth and reduction of the RBL borrowings.
KEY RATING DRIVERS
Credit-Conscious, Opportunistic Transactions: Fitch believes that
Matador's proposed senior unsecured note offering and tender offer
for its 5.875% notes will meaningfully extend the maturity profile
and provide ample runway to generate FCF, repay the RBL and execute
on growth initiatives. Fitch projects the transaction will have
minimal impact on Matador's leverage metrics and annual interest
expense. RBL repayment could also be accelerated via net proceeds
from the company's announced public offering of 5.25 million shares
of its common stock, estimated at around $345 million.
Eight-Rig Drilling Program: Fitch believes Matador's eight-rig
drilling program will result in production averaging
153mboepd-159mboepd in 2024, about 18% higher than full-year 2023
production of 132 mboepd. Production averaged 154mboepd in 4Q23,
exceeding original expectations of 145mboepd. Management continues
to target the Wolfcamp A and lower Bone Spring intervals, but has
also seen strong well results in the Avalon and upper Bone Spring
across the acreage position. The company has also demonstrated
operational efficiency improvements and per-foot cost reduction
from its U-turn wells which should continue in 2024.
Fitch expects Matador's production size will sustainably reach 'BB'
category thresholds in 2H24 if high single-digit production growth
rates are maintained in the near term.
Strong FCF Generation; Measured Distributions: Fitch forecasts
pre-dividend FCF of over $400 million in 2024 at Fitch's $75/bbl
oil price assumption. Fitch expects the company will maintain its
$0.80/share dividend with potential for measured increases in the
near and medium term. Fitch does not expect management to initiate
a share repurchase program and believes excess cash will be
prioritized toward RBL reduction and then toward increases to the
dividend, additional investment into the upstream and midstream
assets and potential bolt-on M&A activity.
Near-Term RBL Reduction: Fitch expects the majority of
post-dividend FCF will be allocated toward reduction of the RBL in
the near-term. At YE 2023, there was $500 million of borrowings
outstanding under the company's RBL which Fitch expects management
will continue to reduce in 2024 and could be accelerated if
currently strong strip prices continue. Pro forma the proposed
transaction, Fitch projects Matador's leverage profile will be
maintained below 1.0x at its mid-cycle $57/bbl oil price following
reduction of the RBL.
Supportive Midstream Assets: Matador's midstream joint venture
assets at San Mateo provide both operational benefits through
overall reduced transportation costs and lower marketing fees in
addition to performance incentives from partner Five Point Energy
LLC. The San Mateo assets offer 460mmcf/d of gas processing
capacity, 475mbbl/d of water disposal capacity and oil gathering
and transportation systems, which covers nearly all of Matador's
Delaware acreage. The company completed the connection of the
Pronto Midstream assets to San Mateo's Eddy County, NM assets and
continues to move forward with the 200mmcf/d expansion of its
Marlan Processing Plant which is expected to be completed in 1H25.
Weak Hedging Program: Matador's lack of oil and gas production
hedges increases cash flow volatility and exposes the company to
downside pricing pressures. The company is currently hedging a
minimal amount of WAHA natural gas basis volumes for 2024 and 2025
and aims to maintain upside to the currently supportive oil prices.
The lack of hedge coverage is partially offset by the company's
improving financial flexibility via RBL reduction, sub-1.0x
leverage, strong forecast FCF generation and peer-leading cash
netbacks.
DERIVATION SUMMARY
Matador's 4Q23 production averaged 154mboepd (58% oil) which is
similar to Permian peers CrownRock, L.P. (BB-/RWP; 153mboepd in
3Q23) and SM Energy Company (BB-/Stable; 152mboepd in 2023).
Matador remains smaller than peers Civitas Resources, Inc.
(BB/Positive; 279 Mboepd in 4Q23) and Permian Resources Corporation
(BB/Positive; 285mboepd in 4Q23) following their recent M&A
transactions.
The company's continued cost reduction efforts and high oil mix
have led to peer-leading Fitch-calculated unhedged netbacks of
$37.8/boe in full-year 2023. This compares favorably to SM Energy
($29.3/boe), primarily driven by SM's lower oil cut, and is higher
than Civitas ($29.7/boe) and Permian Resources ($30.3/boe) in
2023.
Strong FCF generation in 2024 should support further reductions of
the RBL borrowings and mid-cycle leverage metrics at or below 1.0x,
which is generally consistent with leverage profiles across the
Permian peer group.
KEY ASSUMPTIONS
- West Texas Intermediate of $75/bbl in 2024, $65/bbl in 2025,
$60/bbl in 2026 and $57/bbl thereafter;
- Henry Hub of $2.50 per thousand cubic feet (mcf) in 2024,
$3.00/mcf in 2025, $3.00/mcf in 2026 and $2.75/mcf thereafter;
- Average production of 155mboepd in 2024 with low to
mid-single-digit growth thereafter;
- Total capex of $1.4 billion in 2024, following growth-linked
spending thereafter;
- Prioritization of FCF toward reduction of the RBL;
- Measured increases in the fixed dividend.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Continued progress toward gross debt reduction and production
growth resulting in average daily production approaching
150mboepd;
- Maintenance of economic inventory life and continued de-risking
of longer-term unit economics;
- Mid-cycle EBITDA leverage sustained below 2.0x.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Loss of operational momentum resulting in average production
sustained below 100mboepd;
- Inability to extend economic inventory life that leads to
expectations for weakened unit economics;
- Material reduction in liquidity;
- Mid-cycle EBITDA leverage sustained above 2.5x.
LIQUIDITY AND DEBT STRUCTURE
Improving Liquidity Profile: As of YE 2023, Matador had $53 million
cash on hand and $500 million outstanding under its RBL credit
facility. The company successfully amended its credit facility to
increase the elected commitment from $1.325 billion to $1.5
billion, increase the maximum facility amount from $2.0 billion to
$3.5 billion and extended the maturity date by three years to 2029
which Fitch views favorably.
Fitch expects the company will allocate the majority of
post-dividend FCF and could potentially use proceeds from its
recent common stock offering to reduce RBL borrowings in 2024 which
should improve the liquidity profile. Liquidity is further
supported by Fitch's expectation of strong FCF throughout the
forecast.
ISSUER PROFILE
Matador Resources Company is an independent exploration and
production (E&P) company primarily focused in the Delaware Basin in
Southwest New Mexico and West Texas.
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
----------- ------ --------
Matador Resources Company
senior unsecured LT BB- New Rating RR4
MGM RESORTS: Fitch Assigns 'BB-' LongTerm IDR, Outlook Stable
-------------------------------------------------------------
Fitch Ratings has assigned a 'BB-' Long-Term Issuer Default Rating
(IDR) to MGM Resorts International and MGM China Holdings Limited
(together, MGM). Fitch also has assigned a 'BB+'/'RR1' rating to
MGM International's senior secured revolver, a 'BB-'/'RR4' rating
to its senior unsecured notes, and a 'BB-'/'RR4' rating to MGM
China's unsecured revolvers and senior unsecured notes.
The rating reflects MGM's mid-5x EBITDAR leverage that is
commensurate with the rating, conservative financial policy, and
robust liquidity position. It also considers the company's scale,
strong competitive position and diversification in its Las Vegas
and regional markets. The continued rebound in Macau for both MGM
properties should support further near-term growth. These positive
factors are offset by the company's active development plan,
earnings volatility from high-end play in both Las Vegas and Macau,
increasing cost pressure, and lack of ownership of its properties,
which could affect financial flexibility during weaker economic
conditions.
The Stable Outlook reflects Fitch's expectation that MGM's leverage
will remain stable and that liquidity is sufficient to fund future
growth opportunities.
KEY RATING DRIVERS
Strong Reduction in Leverage: MGM has reduced EBITDAR leverage from
8.4x in 2021 to 5.5x in 2023. EBITDA leverage, which excludes
leases from debt, improved from 8.6x to 2.8x over the same period
through the application of FCF and asset sales proceeds to debt
reduction. Fitch does not expect further material debt reduction
over the forecast horizon and projects EBITDAR leverage in the
5.0x-5.5x range. Future FCF generation and excess cash should allow
for funding of future growth opportunities and share repurchases.
Conservative Financial Policy: MGM maintains a financial policy of
net EBITDAR leverage below 4.5x. The company calculates current
EBITDAR leverage at 3.8x. This differs from Fitch's calculation in
that MGM capitalizes only cash lease payments (Fitch uses total
cash and non-cash lease expense) and nets cash against debt, while
Fitch uses gross leverage. The company also has a stated policy of
maintaining $3 billion of liquidity through a combination of
availability under its revolver and cash (excluding $500 million of
cage cash). Any cash in excess of the $3 billion level is available
for growth projects and shareholder returns.
MGM has monetized all of its meaningful wholly owned assets,
resulting in a material increase in lease-equivalent debt somewhat
offset by a reduction in traditional debt. EBITDA coverage is
adequate despite the higher fixed costs and weaker FCF generation,
but the lack of owned real estate could limit financial flexibility
in a stress scenario. MGM guarantees the two mortgages for the
Bellagio and MGM Grand/Mandalay Bay joint ventures, respectively,
which is another negative liquidity consideration, albeit a
manageable one, given that both are collection guarantees. MGM's
run-rate triple-net leases (including non-cash lease expense) are
expected to annualize to roughly $2.3 billion in 2024.
Macau Recovery Takes Hold: The recovery in Macau has been strong
following the removal of strict coronavirus policies in late 2022.
Mass market baccarat was 109% of 2019 levels in 4Q23, while the
overall market was at 75%. The lower overall percentage is due to
changes in VIP regulations that have caused a material, and
potentially permanent, change in the level of gaming revenues from
that customer segment. However, MGM focuses primarily on mass
market as opposed to VIP, and its market share has grown to over
15% in 2023 from 9%, as it benefits from receiving approximately
200 new tables under the concession and the continued ramp up of
MGM Cotai. Customer reinvestment rates increased in 2023 as more
operators focused on the mass market given the decline in the VIP
market, but MGM China's EBITDAR margins have not seen a material
impact.
Las Vegas at Crossroads: MGM is the largest operator of Las Vegas
Strip properties and has benefited from the strong rebound in
gaming revenue and visitation. Fitch expects gaming revenue growth
to abate and potentially even decline, although the market still
has not seen the return of high-value international customers,
while a strong sports and concert event calendar should drive
further visitations. Offsetting the risk of potentially lower
gaming revenues is the expected growth in group and convention
visitation given the current calendar, which should drive higher
room rates and food and beverage revenues. Higher labor costs from
a new union contract will have a full year impact in 2024, but
Fitch does not expect a material impact on overall margins.
Favorable Asset Mix: MGM has good geographic diversification, which
includes its Las Vegas Strip properties, diverse regional gaming
portfolio, and Macau assets. MGM's portfolio has many high-quality
assets in the Strip, and its regional assets are typically market
leaders. The regional portfolio's diversification partially offsets
the more cyclical nature of Las Vegas Strip properties. MGM's two
properties in Macau provide global diversification benefits and
exposure to a market with favorable long-term growth trends. Future
global diversification should come from the Osaka resort project in
Japan, which is expected to open in 2030, its Dubai Porto Island
development, and a potential license in the New York City market.
These projects have high development costs, which could result in
temporary elevated leverage.
Upside in Digital Presence: MGM has exposure to iGaming and sports
betting through its joint venture participation in BetMGM. MGM's
sports betting and iGaming platforms provides diversification
benefits and potential upstream distributions longer-term but are
currently not a material credit driver. BetMGM had its first
profitable quarter in 3Q23 but lost some market share in recent
months. Fitch expects the 50% proportional EBITDA of BetMGM to be
an immaterial portion of total MGM property EBITDAR in 2024 as the
company reinvests in customers and its product offering. MGM has
made other investments in its iGaming platform, and Fitch expects
tack-on acquisitions to be likely over the next few years. An
acquisition of its joint venture partner, Entain plc (BB/Stable),
is unlikely at this point, but MGM may consider additional
investments in its BetMGM interest.
Strong PSL Linkage: Fitch views MGM on a consolidated basis because
the linkage between the parent, MGM Resorts International, and the
operating subsidiaries is strong. MGM Resorts International is the
primary debt-issuing entity in the U.S., and is considered a
stronger parent relative to the weaker Macau subsidiaries, given it
benefits from ownership in the operations of all US domestic
casinos and its 56% equity interest in MGM China. As a result,
Fitch applied the strong parent/weak subsidiary approach under its
Parent and Subsidiary Linkage Rating Criteria. The linkage is
strong because of perceived high strategic and operational
incentive, as the subsidiaries share brands and customers across
the system.
DERIVATION SUMMARY
MGM is a large, diversified operator of casinos on the Las Vegas
Strip, in regional U.S. gaming markets, and in Macau. The company
has sold and leased-backed all of its U.S. casino operations and
has primarily used the cash to repay debt and expand operations.
The company operates high quality assets and is the largest
operator of assets on the Las Vegas Strip. Regional gaming
operations and the Macau operations are somewhat protected from new
competition due to limited licenses. MGM has a conservative
financial policy and operates with relatively strong liquidity.
Wynn Resorts, Limited (BB-/Stable) is smaller in scale but has
strong relative market share in Las Vegas and Macau. Wynn also has
high-quality assets and operates in attractive regulatory regimes.
Wynn maintains strong liquidity, although its debt will temporarily
increase during periods of large development projects.
Las Vegas Sands Corp. (BBB-/Stable) is the largest operator of
casino resorts in Macau. The company also has a presence as being
only one of the two operators of casino resorts in Singapore.
Leverage is relatively low given the scale of the company's
operations. The company has a strong commitment to a conservative
financial policy and also maintains very strong liquidity.
KEY ASSUMPTIONS
- Total revenues are expected to increase by 4% in 2024 with the
expectation of flat growth in Las Vegas, low single-digit decline
in the Regional markets, and high-teen growth in Macau as that
segment continues to benefit from the removal of COVID
restrictions. Overall growth is expected to be in the low single
digit throughout the remainder of the forecast horizon;
- EBITDAR margins are forecasted in the 28% range over the forecast
horizon;
- Total rent of $2.3B in 2024, which is straight-line across the
forecast horizon;
- Capex is $1.2 billion per year with no major growth capex
assumed. Fitch incorporates $200 million of capex in Macau
annually, in-line with the required new concession. Fitch expects
the company to spend $900 million in 2025, inclusive of the license
in New York and its anticipated $400 million annual Japan
development spend, which will commence this year.
- Assume no dividend policy for domestic entity or MGM China;
- Assume $500 million of share repurchases over the forecast
horizon;
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Increased scale and diversification while meeting stated credit
metric sensitivities;
- EBITDAR Leverage sustaining below 5.0x;
- EBITDAR Fixed Charge Coverage approaching 2.0x.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- EBITDAR Leverage sustaining above 6.0x, either through a more
prolonged disruption to global gaming demand or adoption of a more
aggressive financial policy;
- A reduction in overall liquidity (low cash and revolver
availability, heightened covenant risk or increased FCF burn) as a
result of weaker economic conditions or a more aggressive financial
policy.
LIQUIDITY AND DEBT STRUCTURE
Satisfactory Liquidity: As of Dec. 31, 2023, MGM had cash on hand
of $2.93 billion, including $542 million of cash on hand at MGM
China. The company also has an additional $420 million of
investments in marketable debt securities. Of the total cash
amount, approximately $500 million is considered cage cash, which
is available to only fund property working capital, and the company
has a stated financial policy of holding a minimum cash amount of
$700 million. The U.S. domestic revolver was undrawn with
availability of $2.3 billion (following February 2024 amendment),
and the two Macau revolving credit facilities had availability of
$1.46 billion. The next domestic maturity consists of $1.425
billion in two notes due 2025. In Macau, $750MM of notes mature in
2024. Fitch expects the Macau notes to be refinanced given the
rapid recovery in Macau, access to capital markets, and strong
banking support.
In November 2023, the company announced that its board had
authorized a new $2 billion share repurchase plan, which is in
addition to the approximately $166 million remaining on the
existing February 2023 plan. Fitch believes that FCF is sufficient
to allow for stock repurchases, capex plans, and refinancing of
upcoming maturities.
ISSUER PROFILE
MGM operates nine casinos on the Las Vegas Strip and seven others
in regional markets, including in Michigan, Mississippi, Maryland,
New Jersey, New York, Massachusetts and Ohio. MGM has a 56% stake
in MGM China, which operates two casinos in Macau SAR. MGM also has
a 50% ownership in BetMGM, a large digital gaming operator in the
U.S.
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
----------- ------ -------- -----
MGM Resorts
International LT IDR BB- New Rating WD
senior unsecured LT BB- New Rating RR4
senior secured LT BB+ New Rating RR1
MGM China Holdings
Limited LT IDR BB- New Rating WD
senior unsecured LT BB- New Rating RR4
MISSOULA OVERSTOCK: Voluntary Chapter 11 Case Summary
-----------------------------------------------------
Debtor: Missoula Overstock LLC
2230 North Reserve St., #400
Missoula, MT 59808
Chapter 11 Petition Date: March 29, 2024
Court: United States Bankruptcy Court
District of Utah
Case No.: 24-21396
Judge: Hon. Joel T. Marker
Debtor's Counsel: Geoffrey L. Chesnut, Esq.
RED ROCK LEGAL SERVICES, PLLC
PO Box 1948
Cedar City, UT 84721
Tel: (435) 634-1000
Email: courtmailrr@expresslaw.com
Estimated Assets: $0 to $50,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Nathan Chetrit as managing member.
The Debtor failed to include in the petition a list of its 20
largest unsecured creditors.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/ZE2EI5A/MIssoula_Overstock_LLC__utbke-24-21396__0001.0.pdf?mcid=tGE4TAMA
MOJITO CLUB: Tarek Kiem of Kiem Law Named Subchapter V Trustee
--------------------------------------------------------------
The U.S. Trustee for Region 21 appointed Tarek Kiem, Esq., at Kiem
Law, PLLC as Subchapter V trustee for Mojito Club Sawgrass, LLC.
Mr. Kiem will be paid an hourly fee of $300 for his services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. Kiem declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Tarek Kiem, Esq.
Kiem Law, PLLC
8461 Lake Worth Road, Suite 114
Lake Worth, FL 33467
Tel: (561) 600-0406
Email: tarek@kiemlaw.com
About Mojito Club Sawgrass
Mojito Club Sawgrass, LLC is a restaurant in Fort Lauderdale, Fla.,
which features a high-energy atmosphere, indoor and outdoor seating
and fresh squeezed mojitos in an assortment of flavors.
The Debtor filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. S.D. Fla. Case No. 24-12552) on March 18,
2024, with $311,330 in assets and $1,683,011 in liabilities. Henry
Leace, managing member, signed the petition.
Judge Scott M. Grossman oversees the case.
Patricia A. Redmond, Esq., at Stearns Weaver Miller Weissler
Alhadeff & Sitterson, P.A., represents the Debtor as legal counsel.
NATIONAL MENTOR: Moody's Alters Outlook on 'Caa1' CFR to Positive
-----------------------------------------------------------------
Moody's Ratings affirmed the ratings of National MENTOR Holdings
Inc. (d/b/a "Sevita") including the Caa1 Corporate Family Rating,
Caa1-PD Probability of Default Rating, Caa1 rating on the senior
secured first lien bank credit facilities, and Caa3 rating on the
senior secured second lien term loan. Concurrently, Moody's revised
the outlook to positive from stable.
The rating affirmation reflects Sevita's high but improving
financial leverage, driven by a steady recovery in operating
performance as labor issues slowly improved supported by
reimbursement rate increases. Moody's expects that Sevita will
continue on its trajectory of improving operating performance such
that Moody's adjusted debt-to-EBITDA will approach 6 times from the
mid 6 times range in the last twelve month period ending December
31, 2023.
The positive outlook incorporates Moody's expectation of continuous
improvements of Sevita's credit metrics in the next 12 to 18
months. Moody's forecasts mid single-digit revenue and earnings
growth, with financial leverage approaching 6 times and interest
coverage (defined as EBITA/Interest Expense) approaching 1 times,
over the next 12 to 18 months. In addition, the positive outlook
includes Moody's expectation that Sevita will avoid returning to
very aggressive financial policies, inclusive of elevated M&A
transactions volume, which could impact Sevita's liquidity
profile.
RATINGS RATIONALE
Sevita's Caa1 CFR reflects the company's high regulatory and
reimbursement risk given its reliance on government payors,
specifically Medicaid, and its exposure to state budgets, which may
come under pressure during weak economic periods. Rising labor
costs due to a tighter labor market, moderately high geographic
concentration, and an aggressive expansion strategy also constrain
the company's rating. Moody's expects financial leverage will
remain high but decline to approximately 6 times over the next 12
to 18 months driven by mid single-digit earnings growth.
Supporting Sevita's Caa1 rating is the company's position as one of
the leading providers of home and community-based services to
individuals with intellectual and developmental disabilities (I/DD)
and catastrophic injuries. Industry trends are moving towards
placing I/DD individuals in smaller, lower-cost community settings
(such as those operated by Sevita) instead of large state operated
institutions. The current reimbursement outlook is stable to
slightly positive, with rate increases realized or expected in
several states, though the majority of such increases are passed
through directly to employee wages in order to improve labor
pressures.
Moody's expects Sevita to maintain adequate liquidity over the next
12 months. As of December 31, 2023, the company had approximately
$10 million of cash on the balance sheet. Moody's expects Sevita to
generate positive free cash flow of approximately $20 million in
the next 12 months. Sevita has access to about $150 million of its
$160 million revolving credit facility and $30 million of its $125
million accounts receivables (AR) securitization facility, as of
December 31, 2023. The revolving credit facility expires in March
2026 and the AR securitization facility expires in December 2025.
Moody's anticipates the company to have sufficient cushion under
its springing first lien net leverage covenant of 8.5 times on the
revolver, which is tested if revolver usage exceeds 35% or $56
million.
ESG CONSIDERATIONS
Sevita's CIS-5 score indicates that the rating is lower than it
would have been if ESG risk exposures did not exist and that the
negative impact is more pronounced than for issuers scored CIS-4.
Primary drivers of the CIS-5 include governance risks, driven by
the company's aggressive financial policies and high financial
leverage. The score also reflects exposure to social risks, most
notably as a provider of services to a highly vulnerable patient
population, mainly individuals with disabilities. Sevita must
provide high quality service and care to these individuals so as to
avoid scrutiny, financial penalties, and reimbursement cuts by
payors and regulators. The company relies heavily on Medicaid,
which exposes it to potential reimbursement changes, though this is
offset by the diversity of the company's state payors. The company
is also exposed to labor pressures including wage inflation given
its large workforce of low wage workers.
Sevita's senior secured first lien credit facility, comprised of a
$160 million revolving credit facility expiring 2026, $1.7 billion
term loan B due 2028, $165 million delayed draw term loan (of which
$90 million was drawn) due 2028, and $50 million term loan C due
2028, is rated Caa1, at the same level as the Caa1 Corporate Family
Rating. This reflects the fact that the first lien credit
facilities comprise a preponderance of debt in the capital
structure. The $180 million second lien term loan due 2029 is rated
Caa3.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be downgraded if Sevita experiences any further
operating setbacks that materially weaken the company's earnings
and cash flows. This could include reimbursement pressure due to
growing state budgetary constraints or continued rising labor
costs. A downgrade could also occur if the company's liquidity
further weakens or the company pursues another shareholder dividend
or large debt funded acquisitions.
The ratings could be upgraded if Sevita adopts less aggressive
financial policies such that debt to EBITDA is sustained below 7.0
times based on Moody's calculations. Ratings could be upgraded if
EBITA/Interest Expense was sustained above 1.0 times. Improved
liquidity, evidenced by consistent positive free cash flow
generation, could also result in a ratings upgrade.
National MENTOR Holdings Inc. (Sevita) provides home and
community-based services to individuals with intellectual or
developmental disabilities, persons with acquired brain and other
catastrophic injuries, at-risk youth, and the elderly. Revenues are
approximately $2.9 billion for the last twelve month period ending
December 31, 2023. Sevita is owned by Centerbridge Partners LP, The
Vistria Group and Madison Dearborn Partners, LLC.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
NICA REPAIRS: Jodi Dubose of Stitcher Named Subchapter V Trustee
----------------------------------------------------------------
The U.S. Trustee for Region 21 appointed Jodi Daniel Dubose, Esq.,
at Stichter, Riedel, Blain & Postler P.A. as Subchapter V trustee
for Nica Repairs, LLC.
Ms. Dubose will be paid an hourly fee of $350 for her services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Ms. Dubose declared that she is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Jodi Daniel Dubose, Esq.
Stichter, Riedel, Blain & Postler P.A.
41 N. Jefferson Street, Suite 111
Pensacola, FL 32502
Phone: (850) 637-1836
Email: jdubose@srbp.com
About Nica Repairs
Nica Repairs, LLC filed a petition under Chapter 11, Subchapter V
of the Bankruptcy Code (Bankr. N.D. Fla. Case No. 24-10059) on
March 14, 2024, with up to $50,000 in assets and up to $1 million
in liabilities. Karan Bhathija, managing member, signed the
petition.
Judge Karen K. Specie oversees the case.
Lisa Caryl Cohen, Esq., at Ruff & Cohen PA, represents the Debtor
as legal counsel.
OCEAN POWER: Secures $1.5M in Purchase Orders for WAM-V USV's
-------------------------------------------------------------
Ocean Power Technologies, Inc. announced the largest quantity order
in the company's history, marking a significant commercial
milestone. A valued customer engaged in the offshore energy
service industry in Latin America has placed purchase orders for
multiple WAM-V USV's, representing a substantial investment
totaling over $1.5 million and highlighting OPT's continued
expansion in the region.
The WAM-V's, renowned for their cutting-edge technology and
versatility, will be deployed in hydrographic applications and by
utilizing their adaptability and reliability will provide the
Company's customer with an unrivaled versatile multi-application
solution. This landmark order not only underscores the growing
demand for OPT's innovative solutions but also solidifies the
company's position as a leader in the marine robotics industry.
Commenting on this significant achievement, Philipp Stratmann,
president, and CEO of Ocean Power Technologies, expressed his
enthusiasm, stating, "We are thrilled to see the growing interest
and confidence in our technologies, particularly from our strategic
partners in Latin America. This order marks a pivotal moment for
OPT, highlighting our continued commitment to delivering
unparalleled solutions to the region that redefine possibilities in
marine robotics."
With a proven history of delivering state-of-the-art solutions
tailored to meet the evolving needs of diverse industries, OPT
remains at the forefront of innovation in the maritime sector. The
company's dedication to excellence and customer satisfaction
continues to drive its success, enabling it to forge strategic
partnerships and expand its global footprint.
About Ocean Power Technologies
Headquartered in Monroe Township, New Jersey, OPT --
www.OceanPowerTechnologies.com. -- provides intelligent maritime
solutions and services that enable safer, cleaner, and more
productive ocean operations for the defense and security, oil and
gas, science and research, and offshore wind markets. The Company's
PowerBuoy platforms provide clean and reliable electric power and
real-time data communications for remote maritime and subsea
applications. The Company also provides WAM-V autonomous surface
vessels (ASVs) and marine robotics services.
For the nine months ended Jan. 31, 2024 and through the date of
filing of this Form 10-Q (March 13, 2024), management has not
obtained any material additional capital financing. Management
believes the Company's current cash balance at Jan. 31, 2024 of
$4.9 million and short term investments balance of $4.4 million may
not be sufficient to fund its planned expenditures through at least
March 2025. Ocean Power said these conditions raise substantial
doubt about the Company's ability to continue as a going concern.
The ability to continue as a going concern is dependent upon the
Company's operations in the future and/or obtaining the necessary
financing to meet its obligations and repay its liabilities arising
from normal business operations when they become due.
ORTHOCARE SOLUTIONS: Unsecureds Will Get 26% of Claims in Plan
--------------------------------------------------------------
Orthocare Solutions, Inc., filed with the U.S. Bankruptcy Court for
the District of Maryland a Plan of Reorganization.
The Debtor operates a business that sells customized orthotics and
prosthetics and has a principal business address of Orthocare
Solutions, Inc., 5850 Waterloo Road, Columbia MD.
The decrease in revenues is attributed to a number of factors
including the adverse impacts of COIVID-19, the sole shareholder,
David Fred, being diagnosed with a severe illness for which he has
been undergoing rigorous treatments detracting from his ability to
devote his full efforts to the company and, most recently, a
payment delay issue with the Debtor's account with the State of
Maryland.
The Debtor, in an attempt to satisfy its cash flow shortfalls and
to remain operational, borrowed money from the Small Business
Administration, M&T Bank and several merchant cash advance lenders
(the "MCA Lenders"). Payment defaults ensued thereafter. Despite
diligent efforts, the debtor ultimately reached a point where it
was unable to fund its monthly debt service, causing the Debtor to
file this case.
The Debtor has approximately $1,900,000.00 in general unsecured
Claims not subject to cure through assumption. Debtor reserves all
rights to object to any disputed Unsecured Claims.
The Debtor has provided total projected disposable information
which reflect projected net income of approximately $1,053,034.79
that will be utilized to the fund the Plan over a three-year
period. To the extent that there are any recoveries pursuant to
avoidance actions (none known at the present time), these amounts
will also be contributed to the Plan in accordance with the
priorities established by the Bankruptcy Code and as more
specifically set forth therein.
Class 4 consists of all General Unsecured Claims. Provided that an
Allowed Class 4 Claim has not been paid prior to the Effective
Date, or pursuant to a cure payment to be paid to assume an
executory contract, and except to the extent that a holder of a
Class 4 Claim agrees to a different and lesser treatment, each
holder of an Allowed Class 4 Claim shall receive from the Debtor,
in full and complete settlement, satisfaction and discharge of its
Allowed Class 4 Claim, a pro rata portion of the monthly payments
and Monthly Avoidance Action Proceeds. Otherwise, General Unsecured
Claims shall be paid monthly pro rata commencing on the Effective
Date in accordance with the Debtor's Financial Projections, but
after the payment in full of Tax Priority Claims, Non-Tax Priority
Claims and Administrative Tax Claims.
The total minimum amount allocated under the Plan for the payment
of Allowed General Unsecured Claims is estimated to be $500,000.00,
or roughly a 26% distribution on estimated Allowed General
Unsecured Claims. On a monthly basis, the amount to be disbursed to
Allowed General Unsecured Claims on a pro rata basis is estimated
to be $13,888.00. This estimation assumes that no Class 4 Claim
will be deemed to be a NonDischarageable Claim.
In the event that any Class 4 Claim is deemed to be a Non
Dischargeable Claim, the amount available for distribution to Class
4 Claims on a pro rata basis will be reduced to the extent of the
amount of any such Claim deemed to be Non-Dischargeable. Monthly
Avoidance Action Proceeds shall also be used to fund payments upon
Allowed General Unsecured Claims after the payment of
Administrative Claims Priority Non-Tax Claims and Priority Tax
Claims with higher priority, if any. Class 4 is impaired under this
Plan and, therefore, Holders of Class 4 Claims are entitled to vote
to accept or reject this Plan.
Class 5 consists of the equity interests in the Debtor. The holders
of the equity interest in the Debtor, David Fred shall retain his
100% equity interest the Debtor. Holders of equity interests in the
Debtor are unimpaired and not entitled to vote on the Plan.
All property of the Estate shall revest in the Debtor on the
Effective Date, free and clear of all other liens, Claims,
interests and encumbrances, except for the liens specifically
preserved or created by this Plan.
A full-text copy of the Plan of Reorganization dated March 19, 2024
is available at https://urlcurt.com/u?l=7YveGL from
PacerMonitor.com at no charge.
Attorneys for the Debtor:
Craig M. Palik, Esq.
Justin P. Fasano, Esq.
MCNAMEE HOSEA, P.A.
6404 Ivy Lane, Suite 820
Greenbelt, MD 20770
Tel: (301) 441-2420
Fax: (301) 982-9450
Email: cpalik@mhlawyers.com
jfasano@mhlawyers.com
About Orthocare Solutions
Orthocare Solutions is a veteran-owned small business serving the
Washington, DC and Baltimore metro areas. Four separate locations
offer customized orthotics, prosthetics, and medical equipment to
patients of all ages.
Orthocare Solutions, Inc. filed its voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bankr. D. Md. Case No.
23-19191) on Dec. 18, 2023. The petition was signed by David Fred
as owner. At the time of filing, the Debtor estimated up to $50,000
in assets and $1 million to $10 million in liabilities.
Judge Maria Elena Chavez-Ruark oversees the case.
Craig M. Palik, Esq. at MCNAMEE HOSEA, P.A., is the Debtor's legal
counsel.
OVERSTOCKED MATTRESS: Voluntary Chapter 11 Case Summary
-------------------------------------------------------
Debtor: Overstocked Mattress and Furniture LLC
5804 West Fairview Ave.
Boise, ID 83704
Business Description: The Debtor specializes in offering a wide
selection of high-end furniture and
mattresses.
Chapter 11 Petition Date: March 29, 2024
Court: United States Bankruptcy Court
District of Utah
Case No.: 24-21397
Judge: Hon. Kevin R. Anderson
Debtor's Counsel: Geoffrey L. Chesnut, Esq.
RED ROCK LEGAL SERVICES, PLLC
PO Box 1948
Cedar City, UT 84721
Tel: (435) 634-1000
Email: courtmailrr@expresslaw.com
Estimated Assets: $0 to $50,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Nathan Chetrit as managing member.
The Debtor failed to include in the petition a list of its 20
largest unsecured creditors.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/ZWMXC3Q/Overstocked_Mattress_and_Furniture__utbke-24-21397__0001.0.pdf?mcid=tGE4TAMA
PATTERN ENERGY: S&P Affirms 'BB-' ICR, Outlook Stable
-----------------------------------------------------
S&P Global Ratings affirmed its issuer credit rating on Pattern
Energy Operations L.P. (PEO L.P.) at 'BB-' and its issue-level
rating on the project developer's $639 million outstanding
unsecured notes at 'BB-'. The recovery rating is '3', indicating
meaningful (50%-70%, rounded estimate: 65%) recovery in the event
of a hypothetical default.
S&P said, "The stable outlook reflects our view that the developer
will generate predictable cash flows over the next 12 months based
on contracted revenue with mostly investment-grade counterparties.
We expect the FFO-to-debt ratio will temporarily drop below 13% and
leverage will increase slightly above 5x in 2024 due to a
combination of lower expected distributions and higher cash
interest. We expect FFO to debt will improve to 14%-15% and debt to
EBITDA will decline to the 4x-5x range in 2025.
"We expect lower distributions coupled with a temporary increase in
debt service to worsen credit metrics in 2024.
"We expect distributions to Pattern will decline about 35%-37% in
2024, following peak distribution receipts in 2023 of approximately
$274 million. The decline is due to unusually high merchant pricing
that some assets, including Western Spirit, Grady, and Lanfine,
benefited from in the first half of 2023. For example, Western
Spirit Wind, which accounted for nearly 40% of distributions in
2023 and is exposed to merchant sales for 20% of its capacity,
benefited from robust power prices in 2022, that were realized in
2023, in California independent system operator (CAISO), which we
anticipate will decline in 2024 based on the forward curve prices.
The on-peak price for the western CAISO region reached about $250
per megawatt hour (MWh) in late in 2022 and averaged about $90/MWh
for the year (and about $60/MWh in 2023), whereas the forward curve
indicates a price of about $50/MWh for 2024. In addition to lower
expected power prices in 2024, we expect other material assets in
the portfolio will incur higher operating expenses, lower budgeted
generation, and higher taxes in 2024, which leads to our forecast
FFO to debt of 12.6% (debt to EBITDA of 5.1x) and EBITDA to
interest coverage of 2.8x.
"As part of SunZia construction financing, Pattern US Finance Co.
and Pattern Canada Finance Co., wholly owned subsidiaries of PEO
L.P., issued a $250 million bridge loan due in August 2026, which
is pari passu with PEO L.P.'s corporate revolving credit facility
and letter of credit (LOC) facility. Under our base case, we expect
the bridge loan will be outstanding temporarily and do not include
it in our forecast debt leverage calculation. However, we include
the bridge loan interest cost of about $9 million in 2024, which
contributes to the lower interest coverage ratios. In 2025, we
expect metrics to improve modestly due to distributions growth and
a stable debt balance. Western Spirit, Amazon, Grady, South Kent,
and Henvey Inlet are the biggest contributors to our assumption of
about 5% growth in distributions in 2025. We expect EBITDA and FFO
interest coverage to improve to 4.8x in 2025 and FFO to debt to
increase to about 14.8%, which is in line with our financial ratios
expectations."
Pattern's business risk assessment is underpinned by its highly
contracted asset base with mostly investment grade counterparties,
partially offset by a lack of resource diversification, asset
concentration, and cash flow interruption risk.
Pattern is one of the largest renewable power project developers in
North America, with approximately 3.6 gigawatts (GW) of net
generating capacity. However, its almost entire generation is wind,
which we believe is more susceptible to resource risk than other
sources of renewable power such as solar or hydroelectric, and
because of that, the business risk profile is relatively weaker
than other rated project developers. S&P said, "Consequently, we
use a more conservative estimate for energy production and
distributions in our base case for assets with limited operating
history like Western Spirit and Lanfine (in which we forecast a
P-90 production) and less conservative assumption for assets with
longer operating history that have consistently performed close to
the long-term average generation (in which we forecast a generation
in line with P-75 or P-50 production)."
S&P said, "Pattern's renewable electricity is sold under long-term
contracts with an average remaining life of 12 years that cover
about 90% of the portfolio capacity, which we view as a credit
strength. The offtake agreements are with a diverse group of mostly
investment-grade utilities where the largest counterparty accounts
for about 15% of cash flows in 2024 and 20% of gross capacity,
which we do not consider a weakness. Some assets have small
merchant exposure that could provide upside or mitigate the
resource risk under the power purchase agreement (PPA). For
example, Western Spirit, whose capacity is about 20% merchant,
doubled its distributions in 2023 due to unusually high power
prices in the CAISO region in late 2022. Based on the forward power
curve in 2024 and company estimates, we anticipate distributions
will drop by more than 50% in 2024. About 25% of the portfolio cash
flows in 2023 was exposed to merchant pricing, which could result
in cash flow volatility given historical swings in power prices in
CAISO and the Electric Reliability Council of Texas (ERCOT)
regions, where the asset also sells electricity when prices are
favorable.
"We also incorporate into Pattern's business risk profile of fair
the cash flow interruption risk arising from tax equity structures
at the project level. Eleven of the 26 operating assets, including
our largest contributors, Western Spirit, Grady, and Amazon have
tax equity partnerships in place. Pattern could receive lower
distributions in the future if the tax equity investor does not
achieve target IRR (internal rate of return) percentages under the
agreement or if the project fails to achieve certain defined
minimum performance levels. In addition, 15 of the 26 operating
assets are encumbered with a total project debt of $2.8 billion as
of the third quarter of 2023, which also serves as a hurdle to
distributions to the developer. We note that all key contributing
assets exceeded their debt service coverage distribution tests in
2023 with sizable cushion."
Western Spirit will account for nearly 30% of portfolio cash flows
over the next 12-24 months, creating concentration risk. The
facility has a total capacity of 1.05 GW and includes four onshore
wind farms in New Mexico that supply electricity to various
California utilities under long-term contracts. Western Spirit has
available capacity to sell electricity into the ERCOT market when
prices are favorable. S&P views the uncontracted capacity as a
mitigant to the PPA generation requirement and an upside potential
to the contracted revenue.
The SunZia project could be transformational for Pattern, but it is
still two years away from substantial completion and potential
distributions.
The SunZia project, a multibillion development project to move
electricity from the premier wind zone in New Mexico to Arizona and
California markets that have scarce night-time capacity via a
transmission line, could increase Pattern's net capacity by 50%
once complete by mid-2026. Further, distributions from SunZia could
materially improve the financial risk of the developer after 2026.
S&P notes that this timeframe is outside of its outlook horizon and
consideration for debt leverage and interest coverage calculations.
Therefore, an improvement in the rating or outlook on Pattern would
depend on significant construction progress being made over the
next 12-24 months and clarity on the debt structure considering
SunZia's share of distributions.
Pattern closed on $11 billion of construction financing for SunZia
in December 2023. The financing is structured outside of Pattern
Energy Operations L.P. and its other issuing subsidiaries, Pattern
US Finance Co. and Pattern Canada Finance Co. The SunZia project
borrower, SunZia Finco LLC and its subsidiary guarantors, do not
sit under PEO L.P. and no subsidiaries under PEO L.P. guarantee
SunZia debt.
SunZia's value proposition is to move electricity from the premier
wind zone in New Mexico to Arizona and California markets that have
scarce night-time capacity via a transmission line. SunZia Wind
will have 3.5 GW of generating capacity through 1,000 wind turbines
built out across Torrance, Lincoln, and San Miguel counties in New
Mexico, making it the largest wind project in the western
hemisphere. SunZia Transmission is a 550-mile ±525 kilovolt (kV)
high-voltage direct current (HVDC) transmission line between
central New Mexico and south-central Arizona with the capacity to
transport 3,000 MW of greenhouse gas-free electricity across
western states.
S&P said, "The stable outlook reflects our view that Pattern Energy
Operations L.P.'s assets will generate predictable cash flows over
the next 12 months to support the corporate debt and credit
facilities based on long-term contracts with mostly
investment-grade facilities. We expect material assets in the
portfolio will incur higher operating expenses, lower budgeted
generation, and higher taxes in 2024, which leads to our forecast
FFO to debt of 12.6% and debt to EBITDA of about 5x. Further, we
expect higher debt service in 2024 due to the bridge loan interest
cost, which we include in our interest coverage calculation. We
assume the bridge loan will be repaid in 2024 and distributions
will increase modestly in 2025, resulting in our expectation of FFO
to debt of 14%-15% and debt to EBITDA of 4x-5x range.
"We could lower our rating if the consolidated FFO-to-debt ratio
trended below 13% and debt to EBITDA above 5x and remained there
for a prolonged period. This could occur due to significant
operational encumbrances that stymie upstream distributions or
distributions that are substantially less than our base case
expectations."
S&P could raise the rating on Pattern if its consolidated
FFO-to-debt ratio improved and remained above 20% and debt to
EBITDA below 4x on sustained basis. This could happen if:
-- Distributions from operating assets increased materially on
sustained basis;
-- The SunZia project neared completion and were expected to
generate material stable cash flows supported by long-term off-take
contracts;
-- Pattern did not increase its debt after SunZia was completed,
offsetting the increase in cash flows from SunZia distributions.
PETAWATT PROPERTIES: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------------
Debtor: Petawatt Properties, LLC
695 West End Avenue
Carthage, NY 13619
Business Description: Petawatt PetaWatt is a vertically integrated
energy, facilities & service provider to
high demand energy consumers, such as
blockchain crypto-miners, hydroponic
operators, and data centers.
Chapter 11 Petition Date: March 29, 2024
Court: United States Bankruptcy Court
Northern District of New York
Case No.: 24-30234
Judge: Wendy A. Kinsella
Debtor's Counsel: Melodye Hannes, Esq.
LEGAL STRUCTURE CONSULTING GROUP
6839 Wire Road
Zephyrhills, FL 33542
Tel: (305) 896-9099
Email: melodyesue@gmail.com
Total Assets: $0
Total Liabilities: $5,835,372
The petition was signed by James Kucharski as managing director.
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/V3Q7RBA/Petawatt_Properties_LLC__nynbke-24-30234__0001.0.pdf?mcid=tGE4TAMA
POET TECHNOLOGIES: Incurs $20.3 Million Net Loss in 2023
--------------------------------------------------------
POET Technologies Inc. filed with the Securities and Exchange
Commission its Annual Report on Form 20-F reporting a net loss of
$20.27 million on $465,777 of revenue for the year ended Dec. 31,
2023, compared to a net loss of $21.04 million on $552,748 of
revenue for the year ended Dec. 31, 2022.
As of Dec. 31, 2023, the Company had $8.78 million in total assets,
$3.85 million in total liabilities, and $4.93 million in
shareholders' equity.
Hartford, CT-based Marcum LLP, the Company's auditor since 2009,
issued a "going concern" qualification in its report dated March
15, 2024, citing that the Company has a incurred significant losses
over the past few years and needs to raise additional funds to meet
its future obligations and sustain its operations. These
conditions raise substantial doubt about the Company's ability to
continue as a going concern.
A full-text copy of the Form 20-F is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/0001437424/000149315224011806/form20-f.htm
About POET Technologies
POET Technologies is a design and development company offering
photonic integrated packaging solutions based on the POET Optical
Interposer, a novel platform that allows the seamless integration
of electronic and photonic devices onto a single chip using
advanced wafer-level semiconductor manufacturing techniques. The
semiconductor industry has adopted the term "Wafer-Level Chip-Scale
Packaging" to describe similar approaches within the semiconductor
industry. POET's Optical Interposer eliminates costly components
and labor-intensive assembly, alignment, and testing methods
employed in conventional photonics.
PROMETHEUS INNOVATION: Hearing to Approve Bid Rules Set for April 2
-------------------------------------------------------------------
The U.S. Bankruptcy Court for the District of New Jersey is set to
hold a hearing on April 2 to consider approval of the bid rules
proposed by Prometheus Innovation Corporation in connection with
the sale of its Ridgewood franchise location.
Prometheus is a franchisee of and operates two Huntington Learning
Centers, one of which is in Ridgewood, N.J.
Under the bid procedures, the deadline for potential buyers to
place their bids on the Ridgewood franchise is on April 10, at 4:00
p.m. (Eastern Time). Potential buyers are required to provide a
deposit equal to 10% of the purchase price.
An auction will be conducted on April 12, at 11:00 a.m. (Eastern
Time) if Prometheus receives offers by the bid deadline.
Bidding starts at 1.5% above the $686,000 bid Prometheus received
from Trara Group, LLC, which will serve as the stalking horse
bidder at the auction. Qualified bidders may submit successive bids
in increments of at least $5,000.
In the event it is not selected as the winning bidder at the
auction, Trara Group will receive expense reimbursement of up to
1.5% of the purchase price.
About Prometheus Innovation
Prometheus Innovation Corporation sought protection under Chapter
11 of the U.S. Bankruptcy Code (Bankr. D. N.J. Case No. 23-21813)
on Dec. 22, 2023, with $1 million to $10 million in both assets and
liabilities. Nancy Isaacson, Esq., at Greenbaum, Rowe, Smith &
Davis, LP, is the Subchapter V trustee.
Judge John K. Sherwood oversees the case.
Eric H. Horn, Esq., at A.Y. Strauss, LLC represents the Debtor as
legal counsel.
RACKSPACE TECHNOLOGY: Amends Terms of Exchange Offer
----------------------------------------------------
Rackspace Technology (NASDAQ: RXT), a leading end-to-end hybrid,
multicloud, and AI technology solutions company, on March 29, 2024,
announced that its indirect subsidiary Rackspace Finance, LLC (the
"New Issuer") is amending the terms of its previously announced
offer (the "Amendment") to eligible holders in respect of any and
all of the 3.50% First-Priority Senior Secured Notes due 2028 (the
"Existing Secured Notes") issued by Rackspace's indirect subsidiary
Rackspace Technology Global, Inc., to (i) (A) exchange certain of
those Existing Secured Notes for new 3.50% FLSO Senior Secured
Notes due 2028 (the "Exchange Notes") issued by the New Issuer and
(B) have purchased for cancellation certain of those Existing
Secured Notes by the New Issuer for cash (collectively, the
"Exchange Offer"), and (ii) fund (the "Funding Offer" and, together
with the Exchange Offer, the "Offers") new senior secured first
lien first out term loans (the "New FLFO Term Loans") of the New
Issuer, in each case, subject to the terms and conditions of the
offering memorandum dated March 14, 2024 (the "Offering
Memorandum").
Pursuant to the Amendment, holders who validly tender (and do not
validly withdraw) their Existing Secured Notes at or prior to the
Expiration Time will be eligible to receive the "Late Exchange
Consideration" summarized in the table below, which reflects an
increase from the Late Exchange Consideration set forth in the
Offering Memorandum. Pursuant to the Amendment, the Expiration
Time will now be 5:00 p.m., New York City time, on April 12, 2024.
The Final Settlement Date is expected to occur on April 16, 2024
(the second business day after the Expiration Time). Other than as
set forth in this paragraph, all other terms and conditions of the
Exchange Offer remain as set forth in the Offering Memorandum.
Early Exchange Consideration for each $1,000 Principal Amount of
Existing Secured Notes Tendered on or Prior to the Early
Participation Time
With respect to $700 With respect to $300
Principal Amount Principal Amount
---------------- ----------------
$700 of Exchange Notes $0.7875 in cash
Late Exchange Consideration for each $1,000 Principal Amount of
Existing Secured Notes Tendered After the Early Participation
Time:
With respect to $700 With respect to $300
Principal Amount Principal Amount
---------------- ----------------
$700 of Exchange Notes $0.7875 in cash
Holders of Existing Secured Notes that are accepted for exchange
pursuant to the Exchange Offer will be entitled to receive accrued
and unpaid interest in cash on the Existing Secured Notes exchanged
for Exchange Notes up to, but excluding, March 12, 2024. Interest
on the Exchange Notes will accrue from March 12, 2024, with the
first interest payment occurring on August 15, 2024.
No additional payment will be made for accrued and unpaid interest
on Existing Secured Notes purchased and cancelled for the Early
Payment Amount or the Late Payment Amount (together with the Early
Payment Amount, the "Payment Amounts"), as applicable.
Consummation of the Exchange Offer is conditioned upon the
satisfaction or waiver of the conditions set forth in the Offering
Memorandum.
The Exchange Offer is only being made, and the Exchange Notes are
only being offered and issued to holders of Existing Secured Notes
who are (x) reasonably believed to be "qualified institutional
buyers" as defined in Rule 144A under the Securities Act of 1933,
as amended (the "Securities Act") or (y) not "U.S. persons" as
defined in Rule 902 under the Securities Act and in compliance with
Regulation S under the Securities Act. The holders of Existing
Secured Notes who are eligible to participate in the Exchange Offer
pursuant to at least one of the foregoing conditions are referred
to as "eligible holders."
The New Issuer is making the Offers only to eligible holders
through, and pursuant to, the terms of the Offering Memorandum. The
complete terms and conditions of the Offers are set forth in the
Offering Memorandum. None of Rackspace, the New Issuer, the
Guarantors (as defined in the Offering Memorandum), the Transaction
Agent, the Fronting Lender, or any other person takes any position
or makes any recommendation as to whether or not eligible holders
should participate in the Offers.
Only eligible holders may receive a copy of the Offering Memorandum
and participate in the Offers. We have retained Epiq to act as
transaction agent for the Offers and Jefferies Capital Services,
LLC to act as the fronting lender for the Funding Offer (the
"Fronting Lender"). Holders of Existing Secured Notes wishing to
certify that they are eligible holders in order to be eligible to
receive a copy of the Offering Memorandum should complete the
eligibility letter and return it to Epiq as directed therein.
Holders of Existing Secured Notes may complete the eligibility
letter on-line at https://epiqworkflow.com/cases/RackspaceEL or
obtain a PDF copy of the eligibility letter by requesting a copy
from tabulation@epiqglobal.com and referencing "Rackspace" in the
subject line. The eligibility letter can be returned via the online
portal or by emailing a scan of both pages of the fully completed
letter to Epiq at Tabulation@epiqglobal.com and referencing
"Rackspace" in the subject line. Once your response has been
reviewed and cleared by Epiq, you will receive the Offering
Memorandum from Epiq by email.
About Rackspace Technology
Rackspace Technology is a leading end-to-end hybrid, multicloud,
and AI solutions company. It designs, builds, and operates its
customers' cloud environments across all major technology
platforms, irrespective of technology stack or deployment model.
It partners with customers at every stage of their cloud journey,
enabling them to modernize applications, build new products, and
adopt innovative technologies.
RADNET MANAGEMENT: Moody's Ups CFR to B1 & 1st Lien Revolver to Ba3
-------------------------------------------------------------------
Moody's Ratings upgraded RadNet Management, Inc.'s Corporate Family
Rating to B1 from B2, Probability of Default Rating to B1-PD from
B2-PD, and the ratings on the senior secured credit facility,
including the senior secured first lien term loan and senior
secured first lien revolving credit facility, to Ba3 from B1. The
outlook remains stable.
The ratings upgrade reflects RadNet's shift to more
creditor-friendly financial policies, healthy organic growth
supported by favorable industry trends, and very good liquidity
profile. Over the last twelve months, RadNet has raised
approximately $460mm of equity to fund tuck-in acquisitions,
support de novo growth, bolster its cash balance, and repay
approximately $30 million of debt. Moody's expects deployment of
the company's large cash balance to aid in the deleveraging
process. Moody's expects debt to EBITDA to fall from 4.4x at
December 31, 2023 into the high 3x range over the next 12-18
months.
Moody's thinks RadNet is well positioned to experience above market
growth rates due to the continued shift in care setting from
hospitals to outpatient facilities, the aging U.S. population, a
fragmented imaging center landscape, and continued development of
the company's Digital Health segment.
Governance risk considerations are material to the ratings action,
reflecting RadNet's more creditor friendly policies, including two
equity raises to fund growth over the last year.
RATINGS RATIONALE
RadNet's B1 CFR is constrained by its geographic concentration in
seven states with most of its facilities located in California, New
York and Maryland. Moody's estimates that the company's financial
leverage was approximately 4.4x at the end of December 2023 on a
Moody's adjusted basis. The rating is also constrained by the
company's high fixed costs, including significant capital
expenditures and sizeable interest expense after adjusting for
operating lease expense.
The company's rating benefits from its strong competitive position
in its primary markets. The rating also benefits from the long-term
trend of imaging volumes migrating away from hospitals to lower
cost settings as well as the diversification of revenues through
the multi-modality capabilities (including X-rays, CT scans, MRI,
ultrasound and mammography) of RadNet's sites. The company's payor
diversity is good with 56% of revenues sourced from commercial
payors that offer higher reimbursement rates than government
payors.
The stable outlook reflects Moody's expectation that the company's
debt/EBITDA will remain between 3.5x and 4.5x over the next 12-18
months. The outlook also reflects Moody's expectation that RadNet
will maintain very good liquidity.
Moody's expects RadNet's liquidity to remain very good (SGL-1),
supported by Moody's expectation of $60-80 million in annual free
cash flow over the next 12 to 18 months and approximately $525
million in cash (including the cash of New Jersey Imaging Network)
pro forma the March 2024 equity raise. RadNet had approximately
$187 million available to draw under its $195 million revolver and
no balance on the $50 million revolving credit facility at the
company's New Jersey Imaging Network subsidiary as of December 31,
2023. The company has modest mandatory annual amortization of its
loans ($15 million) although its capital expenditure requirements
are material given the need to maintain expensive diagnostic
equipment.
The Ba3 rating on Radnet's senior secured revolving credit facility
and term loan is one notch higher than the company's B1 CFR. The
senior secured credit facilities benefit from the cushion provided
by the existence of a significant amount of unsecured trade
payables and lease rejection claims. The revolver and the term loan
are secured by a first lien on substantially all of RadNet's
assets.
ESG CONSIDERATIONS
RadNet's CIS-4 indicates the rating is lower than it would have
been if ESG risk exposure did not exist. RadNet has exposure to
both social risks (S-4) and governance considerations (G-3,
previously G-4). As a healthcare service provider, the company is
expected to perform in compliance with industry regulations. From a
governance perspective, the company is opportunistic with its M&A
strategy, occasionally taking higher risks.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The company's ratings could be upgraded if it increases the scale
and geographic diversification. Additionally, Moody's would
consider an upgrade if the company's adjusted debt/EBITDA is
sustained below 3.5x. Furthermore, a disciplined growth strategy
and a stable reimbursement environment are needed for an upgrade.
The ratings could be downgraded if the company's operating
performance and/or liquidity position weaken. Quantitatively,
Moody's could downgrade the rating if debt/EBITDA is sustained
above 4.5x.
RadNet Management, Inc. (a wholly-owned subsidiary of publicly
traded RadNet, Inc.) is a provider of freestanding, fixed-site
outpatient diagnostic imaging services in the United States. The
company has a network of 377 owned and/or operated outpatient
imaging centers located in Arizona, California, Delaware, Florida,
Maryland, New Jersey, New York, and Texas. The company's services
include magnetic resonance imaging (MRI), computed tomography (CT),
positron emission tomography (PET), nuclear medicine, mammography,
ultrasound, diagnostic radiology (X-ray), fluoroscopy and other
related procedures. Annual revenues are approximately $1.6
billion.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
RAOCORE TECHNOLOGY: Unsecureds Will Get 100% over 60 Months
-----------------------------------------------------------
Raocore Technology, LLC, filed with the U.S. Bankruptcy Court for
the District of Columbia a Plan of Reorganization for Small
Business dated March 19, 2024.
The Debtor was formed in 2012 in Virginia. It served
telecommunications needs and was dormant then until 2023. At or
about that time, Brian Boone, the then majority owner with Mr. Ray
Odom agreed to sell the Debtor to Ray Odom for $1.00.
The Debtor has two present construction contracts; namely, Capital
Paving and Ft. Myers. These contracts are to be summarized in a pro
forma exhibit which provides a projection on same with two further
contracts that are in the expectancy for engagement going forward
with two additional companies for the revenue statements.
There is a further contract anticipated from Capital Paving
forthcoming. These contracts will fund both the present company
operating needs including payroll which is a large component of the
Debtor's operations, the expense of the assumption of both Sunbelt
equipment and leases and TRL equipment and leases which are
proceeding by consent Orders, and a 100% plan to allowed claims
over no more than 5 years with substantial free cash flow (NOI).
The debtor's financial projections show that the debtor will have
projected disposable income of $244,738.00 over the next five
years. This does not incorporate lease payments that are subsumed
into expense operations and leaves substantial projected NOI or
free cash flow which can be used to payoff the Plan balance early
in advance of 5 years assuming the Debtor's projections are
correct.
The final payment is expected to be paid 60 months after
confirmation from the Effective Date.
This plan proposed to pay creditors of the debtor from the general
cash flow of the debtor.
Class 3 consists of all Allowed General Unsecured Claims against
the Debtor that have filed claims to date or that have been
scheduled by the Debtor without dispute, unliquidated status or
contingency. This class of creditors shall be paid monthly over no
more than 60 months from the Effective Date, with final Cash
Distributions taking place in month 60, and shall be paid 100% of
their Allowed Amount of Claims with interest pursuant to Section
1961 of Title 28 on the allowed amount of such claims over the
course of 5 years. The Debtor can pre-pay the Plan by advancement
of the Cash Distributions contemplated herein, to the extent that
Class 1 is paid in full before any pre-payment of Class 3. This
Class is impaired.
The Class 4 of Disputed Claims consisting of White Oak Commercial
Finance, LLC and JJB D.C., LLC by and through the Chapter 11
Trustee, Lawrence Katz shall receive no Cash Distributions nor
shall they become Allowed Claims herein under this Plan, except to
the extent they become Allowed Claims, they shall be treated to the
extent of available cash flow arising after the Cash Distributions
allocable to Class 3 and paid only to that extent of free cash flow
then existing and extinguished and discharged thereafter at the end
of the 60-month Plan term.
Class 5 consists of equity interest in the Debtor. Mr. Ray Odom
will retain his equity interest in the Debtor and receive or retain
equity draws.
The means for implementing this plan will be the debtor's continued
operation of its business. The debtor has a strong historical
profit margin when it is not consumed with costly litigation and,
through the bankruptcy process has been able to identify areas of
strategic belt-tightening that should permit increased profit
margins in the years ahead sufficient to make predictable plan
payments in years one through five.
The $244,738.00 in cash distributions that Debtor is proposing
under this Plan to its allowed claims is based on Debtor's
projected disposable income during the five-year pendency of this
plan for 100% return to Allowed Claims. The Debtor is projecting
that each year it will have modest increases in its disposable
income.
A full-text copy of the Plan of Reorganization dated March 19, 2024
is available at https://urlcurt.com/u?l=urUELW from
PacerMonitor.com at no charge.
Counsel to the Debtor:
John D. Burns, Esq.
THE BURNS LAW FIRM, LLC
6303 Ivy Lane, Suite 102
Greenbelt, MD 20770
Tel: (301) 441-8780
Email: info@burnsbankruptcyfirm.com
About Raocore Technology
Raocore Technology, LLC was formed in 2012 in Virginia, and served
telecommunications needs.
sought protection under Chapter 11 of the U.S. Bankruptcy Code
(Bankr. E.D. Va. Case No. 23-12080) on December 20, 2023. At the
time of the filing, the Debtor reported $100,001 to $500,000 in
both assets and liabilities.
RAPSYS INC: William Avellone Named Subchapter V Trustee
-------------------------------------------------------
The U.S. Trustee for Region 11 appointed William Avellone of
Chartered Management as Subchapter V trustee for Rapsys Inc.
Mr. Avellone will be paid an hourly fee of $375 for his services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. Avellone declared that he is a disinterested person according
to Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
William B. Avellone
Chartered Management
10 South Riverside Plaza, Suite 875
Chicago, IL 60606
Tel: (312) 273-4004
Email: bill.avellone@charteredmgt.com
About Rapsys Inc.
Rapsys, Inc. sought protection under Chapter 11 of the U.S.
Bankruptcy Code Bankr. N.D. Ill. Case No. 24-03481) on March 11,
2024, with up to $50,000 in assets and up to $1 million in
liabilities.
Scott R. Clar, Esq., at Crane, Simon, Clar & Goodman represents the
Debtor as legal counsel.
RODGERS COMPANIES: Case Summary & Six Unsecured Creditors
---------------------------------------------------------
Debtor: Rodgers Companies, LLC
1908 Yorkstown Drive
Ennis, TX 75119
Business Description: The Debtor is the owner of a real property
located at 707 Chester Court, Ennis; 703
Chester Court, Ennis, 2920 FM 1446
Waxahacie, and 1753 FM 66, Waxahachie, Texas
valued at $1.59 million.
Chapter 11 Petition Date: March 29, 2024
Court: United States Bankruptcy Court
Northern District of Texas
Case No.: 24-30898
Debtor's Counsel: Robert T. DeMarco, III, Esq.
DEMARCO MITCHELL, PLLC
2770 Coit Road, Ste. 850
Suite 1100
Dallas, TX 75251
E-mail: robert@demarcomitchell.com
Total Assets: $1,589,200
Total Liabilities: $1,551,079
The petition was signed by Tim Rogers as authorized
representative.
A full-text copy of the petition containing, among other items, a
list of the Debtor's six unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/2XKATFA/Rodgers_Companies_LLC__txnbke-24-30898__0001.0.pdf?mcid=tGE4TAMA
ROYALE ENERGY: Delays Filing of 2023 Annual Report
--------------------------------------------------
Royale Energy, Inc. filed a Form 12b-25 with the Securities and
Exchange Commission with respect to the delay in the filing of its
Annual Report on Form 10-K for the period ended Dec. 31, 2023.
The Company said its accounting and administrative staff all live
within the San Diego County area impacted by severe storms and
subject to an Emergency Proclamation, impacting the ability to
complete tasks and responsibilities in a timely manner.
Accordingly, the Company will be unable to file its Annual Report
on Form 10-K for the year ended Dec. 31, 2023 within the prescribed
period. The Company will file its Form 10-K as soon as
practicable, but does not anticipate that it will be filed until
after the prescribed due date.
About Royale
El Cajon, CA-based Royale Energy, Inc. -- http://www.royl.com-- is
an independent exploration and production company based in San
Diego, California, focused on the acquisition, development, and
marketing of oil and natural gas. The Company has its primary
operations in California's Los Angeles Basin and Texas's Permian
Basin.
Royale Energy reported a net loss of $145,594 for the year ended
Dec. 31, 2022, compared to a net loss of $3.60 million for the year
ended Dec. 31, 2021. As of Dec. 31, 2022, the Company had $11.78
million in total assets, $21.30 million in total liabilities,
$23.61 million in mezzanine equity, and a total stockholders'
deficit of $33.14 million.
Ridgeland, Mississippi-based HORNE LLP, the Company's auditor since
2023, issued a "going concern" qualification in its report dated
May 19, 2023, citing that the Company has suffered recurring losses
from operations and its total liabilities exceed its total assets.
This raises substantial doubt about the Company's ability to
continue as a going concern.
SCRIPPS (E.W.): Moody's Cuts CFR to B3 & Senior Secured Debt to B2
------------------------------------------------------------------
Moody's Ratings downgraded The Scripps (E.W.) Company's ("Scripps"
or the "company") Corporate Family Rating to B3 from B1 and
Probability of Default Rating to B3-PD from B1-PD. Concurrently,
Moody's downgraded Scripps' senior secured credit facilities and
senior secured first-lien notes to B2 from Ba3 and senior unsecured
notes to Caa2 from B3. The company's Speculative Grade Liquidity
rating was lowered to SGL-3 from SGL-1. The outlook is stable.
RATINGS RATIONALE
Governance risks at Scripps were a key driver of the ratings
downgrade and reflects Moody's medium to long-term expectation for
continued pressure on retransmission revenue growth due to the
increasing pace of subscriber losses arising from secular
cord-cutting trends, as well as ongoing declines in linear TV core
advertising. These trends will weigh on Scripps' future operating
performance leading to debt protection measures that are more
consistent with B3 CFR peers. Moody's expects financial leverage,
as measured by total debt to two-year average EBITDA, will be in
the 5.5x-6.5x range (Moody's adjusted) over the rating horizon.
Given the operating challenges in the TV broadcast industry and low
growth in Scripps' core revenue, lower-than-expected EBITDA would
lead to downside risk to Moody's leverage forecast. The downgrade
also considers the risk of higher-than-expected leverage if
refinancing of the $728.8 million outstanding term loan due 2026 is
precluded in the capital markets, which could lead to a negotiated
maturity extension with existing lenders and delay full repayment
of outstanding revolver borrowings. Risk of higher-than-anticipated
leverage would also occur if there is a potential refinancing of
the $600 million preferred shares with debt when they become
redeemable in January 2026 (at the company's option). Scripps opted
to pay-in-kind (PIK) the Q1 2024 dividend on the preferred shares.
The stable outlook reflects the structural and secular pressures in
Scripps' business and Moody's view that the company's credit
metrics are appropriately positioned within the B3 CFR. At FYE
2023, gross leverage was 6.3x. The stable outlook also incorporates
Moody's expectation that Scripps is committed to repaying debt this
year and next with excess cash flow and proceeds from potential
asset sales. While Moody's expects leverage will increase slightly
to the 6.5x region by the end of 2024 even as political advertising
revenue in a presidential election year boosts EBITDA, we expect
leverage will decrease to the 5.75x-6x region in 2025 (all metrics
are Moody's adjusted on a two-year average EBITDA basis). This
improvement will be aided by continued debt reduction, even though
political revenue will recede, core ad revenue will remain
pressured and retransmission revenue will exhibit low-single digit
percentage growth.
Moody's estimates Scripps' historic average annual total organic
retransmission revenue growth was resilient at roughly 20% in
recent years. Retransmission fees tend to be revised materially
upwards at the time of contract renewal and benefit from annual
escalators. However, with traditional multichannel video
programming distributors (MVPDs) continuing to experience pressure
from greater subscriber declines, offsetting rate increases will
likely become more difficult to negotiate in the medium to
long-term. Traditional MVPD year-over-year (yoy) industrywide
subscriber losses are currently around -12% and Moody's expects
that Scripps' traditional subscriber base will continue to erode,
rising to the mid-teens percentage range over the rating horizon.
Total retransmission revenue accounted for about 34% of the
company's total revenue in 2023 (non-election year) and roughly 27%
in 2022 (election year). Scripps' local retransmission revenue
increased 15% in 2023 (total retransmission revenue was up 18%)
primarily due to MVPD carriage agreement renewals covering 75% of
its legacy pay-TV subscriber base. With only 25% of retransmission
contracts up for renewal in 2024-25, Moody's expects total organic
retransmission revenue growth in the low-single digit percentage
region, on average, as consumers continue to cancel their cable and
satellite TV subscriptions at an accelerating pace. Somewhat
minimizing the impact of the expected erosion is Scripps' lower
percentage of retransmission revenue relative to rated broadcast
peers and rate increases (albeit lesser than historical) when
distribution contracts renew.
However, compared to rated peers, Scripps has a higher exposure to
cyclical advertising revenue, which ranged from a low of 64% in
2023 (non-political year) to a high of 72% in 2022 (political
year). Scripps' core advertising revenue will experience greater
volatility arising from the underlying and ongoing structural
pressures in linear TV core advertising, which Moody's projects
will decline at an annual run-rate in the low-to-mid single digit
percentage range for the broadcast industry. Last year, Scripps'
core ad revenue declined -7% following a -3% decrease in 2022. The
company's 2023 performance was slightly better than the -8% decline
for linear networks in aggregate, but worse than the industry's
mid-single digit percentage decline in local TV. This was driven by
national advertising pressures in Scripps Networks (national and
multicast networks unit) and verticals experiencing declining ad
spend such as Insurance (owing to higher-than-expected claims
arising from increasing frequency and severity of risks) and
Consumer Finance (attributable to reduced demand for new mortgages
and refinancings because of higher interest rates). While the
company's total ad revenue declined roughly -16% in 2023, due to
meaningfully lower political ad revenue in a non-election year,
Moody's expects political advertising spend to boost revenue and
profits in 2024.
Scripps' B3 CFR is supported by the company's scale and market
reach with local television stations broadcasting to 36% of US
households (25% excluding local ION affiliates). Scripps is one of
the largest US broadcasters with 61 local TV stations across 42
markets and 44 ION stations across 8 national networks providing
informative, engaging and vital content on stations affiliated with
the Big Four broadcast networks. The company's revenue model
benefits from a mix of recurring retransmission fees that
historically helped to offset the inherent volatility of
traditional advertising revenue. Over the next several years,
Moody's expects retransmission revenue growth will remain
challenged as the rate of subscriber losses outpaces annual fee
increases, which constrains the rating. In even numbered years,
revenue benefits from material political advertising spend,
especially during presidential election years, which can mask
pressure in retransmission revenue, but also boosts EBITDA. During
election years, Scripps generates solid free cash flow (FCF), which
declines during non-election years.
The B3 CFR is constrained by the ongoing structural decline in
linear TV core advertising as non-political TV advertising budgets
continue to erode in favor of digital media. Moody's expects
Scripps' linear TV core ad revenue will continue to be pressured,
which could worsen during periods of weak CPM (cost per thousand
impressions) pricing and/or deteriorating macroeconomic conditions.
To offset these challenges and diversify its operations, the
company has invested in new technologies (i.e., Connected TV and
Tablo Over-the-Air subscription-free TV) and businesses (i.e.,
Scripps Sports), however this burdens cash flows and creates
operational risk in the short-term until these assets become
profitable and contribute meaningfully to EBITDA. The rating also
reflects governance risks characterized by a somewhat aggressive
financial policy and tolerance for high financial leverage.
Over the next 12-18 months, Moody's expects Scripps will maintain
adequate liquidity as reflected in the SGL-3 Speculative Grade
Liquidity rating. In 2023, FCF (defined by Moody's as cash flow
from operations less capex less dividends) totaled roughly $5
million (Moody's adjusted), cash and cash equivalents were
approximately $35 million and $248 million was available under the
$585 million revolving credit facility (RCF) due January 2026. FCF
was pressured last year due to contraction in core advertising
revenue and absence of political ad revenue in a non-election year.
Also, Scripps paid preferred cash distributions totaling $48
million and increased capex 30% to $60 million, further restraining
FCF. Moody's expects that Scripps will generate FCF of around $200
million to $250 million in 2024 (presidential election year) and
maintain solid cash balances. The company is prevented from paying
common dividends or engaging in share repurchases while the
preferred shares remain outstanding.
Scripps recently suspended the Q1 2024 cash dividend payment on the
preferred shares. Moody's anticipates that the dividend will remain
suspended this year and be redirected, together with the bulk of
FCF, to debt repayments/repurchases. Under the preferred terms,
however, the deferral causes the annual dividend to increase at a
9% PIK rate from 8% cash-pay, which will accrue to the principal
balance resulting in a higher repayment obligation and annualized
rate because the dividends compound quarterly.
ESG CONSIDERATIONS
Scripps' ESG credit impact score was changed to CIS-4 from CIS-3,
chiefly driven by governance and social risks. CIS-4 indicates the
rating is lower than it would have been if ESG risk exposures did
not exist. The credit impact score reflects increasing exposure to
governance risk, chiefly influenced by financial strategy and risk
management given the somewhat aggressive financial policies
characterized by a tolerance for high leverage and large
debt-financed acquisitions. This is offset by good FCF generation
in election years, historical debt repayments and cash preservation
due to restrictions on common dividends and share repurchases
imposed by the terms of the outstanding preferred shares. However,
the preferred obligation's PIK dividend weighs on the governance
score as well as the company's dual class shareholding structure,
which allows the Scripps family to elect two thirds of board
members and control 93% of common voting rights. Elevated social
risks include demographic and societal trends associated with
changes in consumers' video consumption.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Though unlikely near-term, ratings could be upgraded if Scripps'
leverage is sustained well below 5.5x on a two-year average EBTIDA
basis and two-year average FCF to debt is sustained above 6%
(Moody's adjusted). Scripps would also need to: (i) exhibit organic
revenue growth and stable-to-improving EBITDA margins on a two-year
average basis; (ii) adhere to conservative financial policies; and
(iii) maintain at least good liquidity to be considered for an
upgrade. Importantly, for upward ratings pressure to occur, Scripps
would need to successfully refinance its 2026 term loan and 2027
notes well before their maturity dates without resorting to a
balance sheet restructuring, which would include discounted debt
buybacks or debt exchanges and/or maturity extensions with existing
lenders. The company would also need to address redemption of the
preferred shares' growing principal balance without negatively
impacting leverage.
Ratings could be downgraded if leverage was sustained above 6.5x on
a two-year average EBITDA basis (Moody's adjusted) as a result of
weak operating performance or more aggressive financial policies. A
downgrade could also arise if two-year average FCF to debt was
sustained below 2% (Moody's adjusted), Scripps experienced
deterioration in liquidity or covenant compliance weakness or
Moody's expects CMG will pursue a balance sheet restructuring.
Headquartered in Cincinnati, OH and founded in 1878, The Scripps
(E.W.) Company owns and operates 61 local television stations in 42
markets and 44 ION stations across 8 national networks that
collectively reach about 36% of US households (25% excluding local
ION affiliates). The Local Media segment includes the company's
local TV stations and their related digital operations, while the
Scripps Networks unit comprises eight national entertainment and
news networks - ION, Bounce, Court TV, Defy TV, Grit, ION Mystery,
Laff and Scripps News - each reaching well over 90% of US
television households over-the-air. The company is publicly traded
with the Scripps family controlling effectively all common voting
rights (93%) and an estimated 28% economic interest, with remaining
shares widely held. Revenue for the fiscal year ended December 31,
2023 totaled approximately $2.3 billion.
The principal methodology used in these ratings was Media published
in June 2021.
SOLFIRE CONTRACT: Taps Burt Blee Dixon as Bankruptcy Counsel
------------------------------------------------------------
Solfire Contract Manufacturing, Inc. seeks approval from the U.S.
Bankruptcy Court for the Northern District of Indiana to employ
Burt, Blee, Dixon, Sutton & Bloom LLP to handle its Chapter 11
proceedings.
Burt Blee received payment from the Debtor of $16,738.
As disclosed in the court filings, Burt Blee is a disinterested
person as defined in section 101(14) of the Bankrutpcy Code.
The firm can be reached through:
Wesley N. Steury, Esq.
BURT, BLEE, DIXON, SUTTON & BLOOM, LLP
200 East Main Street, Suite 1000
Fort Wayne, IN 46802
Tel: (260) 426-1300
Fax: (260) 422-3750
Email: wsteury@burtblee.com
About Solfire Contract Manufacturing, Inc.
Solfire is a manufacturer of industrial components and assemblies
with locations in Fort Wayne, IN and Aguascalientes Mexico.
Solfire Contract Manufacturing, Inc. filed its voluntary petition
for relief under Chapter 11 of the Bankruptcy Code (Bankr. N.D.
Ind. Case No. 24-10271) on March 18, 2024, listing up to $50,000 in
assets and $1 million to $10 million in liabilities. The petition
was signed by Othoniel Solis as chief operating officer.
Wesley N. Steury, Esq. at Burt, Blee, Dixon, Sutton & Bloom LLP
represents the Debtor as counsel.
SONIDA SENIOR: Incurs $21.1 Million Net Loss in 2023
----------------------------------------------------
Sonida Senior Living, Inc. filed with the Securities and Exchange
Commission its Annual Report on Form 10-K reporting a net loss of
$21.11 million on $255.32 million of total revenues for the year
ended Dec. 31, 2023, compared to a net loss of $54.40 million on
$238.43 million in total revenues for the year ended Dec. 31,
2022.
As of Dec. 31, 2023, the Company had $621.46 million in total
assets, $688.01 million in total liabilities, $48.54 million in
series A convertible preferred stock, and a total shareholders'
deficit of $115.09 million.
Management Comments
"2023 was a transformational year for Sonida. We achieved
significant performance milestones while accomplishing key
strategic objectives and delivering industry-leading care and
services to our residents. These achievements included balance
sheet optimization through the comprehensive restructuring of our
debt culminating in the $47.8 million equity private placement that
closed in the first quarter of 2024. The operational developments
and greatly strengthened balance sheet establish Sonida as a
differentiated operator, owner, and investor in Senior Living and
position the Company to capitalize on near-term dislocation, which
will drive the next chapter of value creation for our
shareholders," said Brandon Ribar, president and CEO.
Liquidity
At the beginning of 2023, the Company's liquidity conditions,
including operating losses and net working capital deficits, raised
substantial doubt about the Company's ability to continue as a
going concern. As a result of increases in occupancy and rates
occurring throughout 2023 and into the first quarter of 2024,
annually scheduled rental rate increases in March 2024 and in
connection with the 2024 private placement transaction and
Protective Life loan purchase, the Company has substantially
improved its liquidity position. Based on these events, the
Company concluded it has adequate cash to meet its obligations as
they become due for the 12-month period following the date the
December 31, 2023 financial statements are issued.
A full-text copy of the Form 10-K is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/0001043000/000162828024013376/snda-20231231.htm
About Sonida
Sonida Senior Living, Inc., (formerly known as Capital Senior
Living Corporation), is an owner-operator of independent living,
assisted living and memory care communities and services for senior
adults. The Company provides compassionate, resident-centric
services and care as well as engaging programming operating 71
senior housing communities in 18 states with an aggregate capacity
of approximately 8,000 residents, including 61 communities which
the Company owns and 10 communities that the Company third-party
manages.
SONOMA PHARMACEUTICALS: Gets Extension to Regain Nasdaq Compliance
------------------------------------------------------------------
Sonoma Pharmaceuticals, Inc. disclosed in a Form 8-K Report filed
with the U.S. Securities and Exchange Commission that it received a
notice from the Listing Qualifications Department of The Nasdaq
Stock Market LLC informing that Nasdaq granted the Company an
additional 180 calendar days, or until September 16, 2024, to
regain compliance with the minimum closing bid price requirement
for continued listing on The Nasdaq Capital Market under Nasdaq
Marketplace Rule 5550(a)(2). The Extension Notice has no immediate
effect on the listing of the Company's common stock.
As previously disclosed in the Current Report on Form 8-K filed on
September 28, 2023 with the Securities and Exchange Commission, the
Company received a notice from Nasdaq on September 22, 2023
informing the Company that because the closing bid price for the
Company's common stock listed on Nasdaq was below $1.00 per share
for 30 consecutive business days, the Company did not comply with
the minimum closing bid price requirement for continued listing on
The Nasdaq Capital Market under the Rule. That notification had no
immediate effect on the listing of the Company's common stock. The
Company initially had a period of 180 calendar days, or until March
20, 2024, to regain compliance with the Rule. The Company did not
regain compliance with the Rule by such date and proactively
notified Nasdaq of its intent to cure the deficiency and requested
an additional 180 calendar day period to regain compliance with the
Rule.
If at any time before September 16, 2024, the closing bid price of
the Company's common stock is at least $1.00 per share for a
minimum of 10 consecutive business days, Nasdaq will provide
written confirmation that the Company has achieved compliance with
the Rule, unless Nasdaq exercises its discretion to extend this
10-day period pursuant to Nasdaq Listing Rule 5810(c)(3).
If compliance with the Rule cannot be demonstrated to Nasdaq's
satisfaction by September 16, 2024, Nasdaq will provide written
notification that the Company's common stock will be delisted. At
that time, the Company may appeal Nasdaq's delisting determination
to a Nasdaq Hearings Panel.
The Company intends to continue actively monitoring the bid price
for its common stock between now and September 16, 2024, and will
consider available options to resolve the deficiency and regain
compliance with the Rule. These options include effecting a reverse
stock split, if necessary. There is no assurance, however, that the
Company will regain compliance with the Rule or that the Company's
common stock will not be delisted from Nasdaq.
About Sonoma Pharmaceuticals
Sonoma Pharmaceuticals, Inc. (NASDAQ: SNOA) --
http://www.sonomapharma.com/-- is a global healthcare company
developing and producing stabilized hypochlorous acid, or HOCl,
products for a wide range of applications, including wound care,
eye care, oral care, dermatological conditions, podiatry, animal
health care and non-toxic disinfectants. The Company's products
reduce infections, itch, pain, scarring, and harmful inflammatory
responses in a safe and effective manner. In-vitro and clinical
studies of HOCl show it to have impressive antipruritic,
antimicrobial, antiviral, and anti-inflammatory properties. The
Company's stabilized HOCl immediately relieves itch and pain, kills
pathogens and breaks down biofilm, does not sting or irritate the
skin, and oxygenates the cells in the area treated, assisting the
body in its natural healing process. The Company sells its products
either directly or via partners in 55 countries worldwide.
Sonoma Pharmaceuticals reported a net loss of $5.15 million for the
year ended March 31, 2023, compared to a net loss of $5.08 million
for the year ended March 31, 2022. As of March 31, 2023, the
Company had $16.23 million in total assets, $8.25 million in total
liabilities, and $7.98 million in total stockholders' equity.
Atlanta, Georgia-based Frazier & Deeter, LLC, the Company's auditor
since 2021, issued a "going concern" qualification in its report
dated June 21, 2023, citing that the Company has incurred
significant losses and negative operating cash flows and needs to
raise additional funds to meet its obligations and sustain its
operations. These conditions raise substantial doubt about its
ability to continue as a going concern.
SPD II MAKAIWA: Secured Lender Files Plan and Disclosure Statement
------------------------------------------------------------------
Secured lender Corban Kauai Chicago Lender, LLC, filed a Chapter 11
Plan of Liquidation and a Disclosure Statement in the Chapter 11
case of SPD II Makaiwa Resort Developments, LLC.
As of the Petition Date, the Debtor was a single asset real estate
development project located in a 20 acre resort site in Aleka Loop,
Kauai County, Kauai, Hawaii (the "Site"). The Site is located in
the Coconut Coast resort area which is a master-planned, mixed-use
community well suited for resort use, which expansive ocean views
to the east and a mauka backdrop of the Mount Wai'ale'ale. To the
north of the Site is the Courtyard by Marriott Kauai Coconut Beach
with a 307 guest, 10.38 acre site. To the South of the Site is the
Wyndham Kauai Coast Resort at the Beachboy, a mix of one- and
two-bedroom condominium units. The Site fronts directly on to the
beach.
The Site currently sits vacant as the Debtor is unable to develop
the Site into a resort and unable to secure funding to complete its
Bankruptcy Case or otherwise progress the case. The purpose of the
Plan and Disclosure Statement is to provide for an orderly
wind-down of the Debtor's Estate and to distribute the remaining
proceeds of the sale and any other cash, property, or interests
that the Debtor retained following consummation of the sale to the
holders of Allowed Claims in accordance with the terms of the Plan
and Disclosure Statement and the claims priority provisions of the
Bankruptcy Code.
Class 5 consists of General Unsecured Claims. The plan proponent
expects allowed claims in Class 5 to receive 5% to 10% recovery.
Each holder of an Allowed General Unsecured Claim shall be paid pro
rata from the Creditor Carve Out after the distribution of amounts
due to Non-Real Estate Tax Priority Claims, up to the full amount
of their Allowed Claims. Class 5 may be impaired.
Section 1129(a)(11) of the Bankruptcy Code requires that
confirmation of a plan not be likely to be followed by the
liquidation, or the need for further financial reorganization, of
the Debtor or any successor to the Debtor (unless such liquidation
or reorganization is proposed in the Plan). Because the Plan
proposes a liquidation of all of the Debtor's assets, for purposes
of this test, the Plan Proponent has analyzed the ability of the
Debtor to meet its obligations under the Plan. Based on this
analysis, the estate will have sufficient assets to accomplish its
tasks under the Plan. Therefore, the Plan Proponent believes that
the liquidation pursuant to the Plan will meet the feasibility
requirements of the Bankruptcy Code.
The Secured Lender proposes these dates and deadlines in connection
with the solicitation of votes and confirmation of the Plan:
* Voting Record Date will be on April 4, 2024.
* Solicitation Commences will be on April 5, 2024
* Voting Deadline will be on May 8, 2024, at 4:00 p.m.
(Central).
* Plan Objection Deadline will be on May 8, 2024, at 4:00 p.m.
(Central)
* Deadline to File any Replies, Confirmation Brief and Other
Evidence Supporting the Plan will be on May 13, 2024, at 4:00 p.m.
(Central)
* Deadline to File Voting Certification will be on May 13,
2024.
* Confirmation Hearing will be on May 15, 2024, at 11:00 a.m.
(Central).
Counsel for Plan Proponent Corban Kauai Chicago Lender, LLC:
Ann E. Pille, Esq.
REED SMITH LLP
10 S. Wacker Drive, Suite 4000
Chicago, IL 60606
Tel: (312) 207-1000
Fax: (312) 207-6400
E-Mail: apille@reedsmith.com
A copy of the Disclosure Statement dated Mar.6, 2024, is available
at https://tinyurl.ph/rGxTC from PacerMonitor.com.
SPD II Makaiwa Resort Development
SPD II Makaiwa Resort Development, LLC sought protection for relief
under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ill. Case No.
23-07153) on May 31, 2023, with as much as $1 million in both
assets and liabilities.
Judge David D. Cleary oversees the case.
Laxmi P. Sarathy, Esq., and David R. Herzog, Esq., serve as the
Debtor's bankruptcy attorneys.
SRS DISTRIBUTION: Moody's Reviews 'B3' CFR Amid Home Depot Deal
---------------------------------------------------------------
Moody's Ratings placed the ratings of SRS Distribution Inc. on
review for upgrade, including the B3 corporate family rating, B3-PD
probability of default rating, B3 backed senior secured term loan B
rating, B3 backed senior secured notes rating and Caa2 backed
senior unsecured notes rating. Previously, the outlook was stable.
This action follows the announcement on March 28, 2024 that The
Home Depot, Inc. (A2 stable) had reached an agreement to acquire
SRS Distribution for $18.25 billion. The transaction is targeted to
close by the end of The Home Depot's fiscal 2024, ending January
2025, and is subject to regulatory approval.
The review for upgrade reflects governance considerations related
to the change in SRS' ownership that will result from this
transaction, as well as The Home Depot's stronger credit profile
and its larger size and scale.
RATINGS RATIONALE / FACTORS THAT COULD LEAD TO AN UPGRADE OR
DOWNGRADE OF THE RATINGS
Moody's review will consider the ultimate fate of SRS's senior
secured term loan, senior secured notes and senior unsecured notes
upon the close of the acquisition by The Home Depot. If SRS's debt
is retired, Moody's will withdraw SRS' ratings upon repayment. If
SRS's debt is not retired following the close of the acquisition,
Moody's ability to maintain the company's ratings will consider
where in the corporate structure SRS's debt will reside, any
guarantees of SRS's debt by The Home Depot, and the financial and
operational disclosures available with respect to SRS.
Absent the acquisition by The Home Depot, the ratings could be
upgraded if end markets remain supportive of organic growth and the
company delevers such that adjusted debt-to-EBITDA is trending
towards 5.5x. Also, preservation of at least good liquidity would
support upwards rating movement.
Given the rating under review for upgrade, a negative rating action
is not considered likely in the near term. However, absent the
acquisition by The Home Depot the ratings could be downgraded if
SRS's adjusted debt-to-EBITDA is above 6.5x and EBITA-to-interest
expense is trending towards 1.0x. A deterioration in liquidity or
material shareholder return activity could result in downward
rating pressure as well.
The principal methodology used in these ratings was Distribution
and Supply Chain Services published in February 2023.
SRS Distribution Inc., headquartered in McKinney, Texas, is a
national distributor of roofing supplies and related building
materials, and landscaping and pool-related products throughout the
United States. Leonard Green & Partners, L.P., through its
affiliates, is the majority owner of SRS followed by Berkshire
Partners LLC, through its affiliates.
STALWART PLASTICS: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Stalwart Plastics, Inc.
7701 Chattsworth Rd.
Midland, GA 31820
Chapter 11 Petition Date: March 29, 2024
Court: United States Bankruptcy Court
Middle District of Georgia
Case No.: 24-40194
Debtor's Counsel: David L. Bury, Jr., Esq.
STONE & BAXTER, LLP
577 Third Street
Macon, GA 31201
E-mail: dbury@stoneandbaxter.com
Estimated Assets: $10 million to $50 million
Estimated Liabilities: $10 million to $50 million
The petition was signed by Angelina Valero as chief financial
officer.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/BFPCVHI/Stalwart_Plastics_Inc__gambke-24-40194__0001.0.pdf?mcid=tGE4TAMA
List of Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
1. ABZAC Cores $175,805
815 Moulin 333320
d'Abzac Eysines France
2. American Express Credit Card $125,632
P.O. Box 981535
El Paso, TX
79998-1535
3. Arrive Logistics Freights $20,976
7701 Metropolis Drive
Building 15
Austin, TX 78744
4. Cigna Health Insurance Health Insurance $23,769
P.O. Box 747102
Pittsburgh, PA
15274-7102
5. Clearwater Plumbing Maintenance $53,300
1402 46th Street
Phenix City, AL
36867-1928
6. Empaques Poliplasticos Resin and $249,855
Avenida Spare Parts
Panamericana 1
Independencia
Pedro Esobedo
Queretaro 76700
Mexico
7. Estes Express Lines Freights $57,915
P.O. Box 105160
Atlanta, GA
30348-5160
8. Exxon Mobil Resin $505,245
P.O. Box 74007278
Chicago, IL 6067
9. Georgia Power Utilities $49,202
96 Annex
Atlanta, GA 30396
10. GREIF Cores $65,467
3082 Hmphries Hill Road
Plant #1
Austell, GA 30106
11. Industrial Contracting Maintenance $59,622
Services & Maint
120 Gateway Court
Columbus, GA
31909
12. Metro Power Services $30,637
1443 6th Avenue
Columbus, GA
31901
13. Nova Chemicals, Inc. Resin $105,833
1555 Coraopolos
Heights Road
Coraopolis, PA 15108
14. Sace Insurance Insurance $2,319,005
P.O. Box 1842
Knoxville, TN 37901
15. Saia Motor Freight Maintenance $85,738
Line, LLC
P.O. Box 730532
Dallas, TX 75373
16. Schneider National, Inc. Freights $36,992
P.O. Box 281496
Atlanta, GA 30384
17. Shell Polymers Resin $261,327
150 N. Dairy Ashford
Woodcreek
Floor 8
Houston, TX 77079
18. Sunflower Bank, N.A. Alleged Guaranty $2,743,192
c/o Scott V. Sipe
7047 E. Greenway
Parkway - Suite 140
Scottsdale, AZ
85254
19. Truist Bank Credit Card $725,821
c/o Lisa Allen, SVP
2520 Northwinds
Parkway - Suite 400
Alpharetta, GA
30009
20. Yancey Bros. Co. Services $26,774
2946 Smith Road
Fortson, GA 31808
SUNPOWER CORP: Gets Nasdaq Notice for Delayed Form 10-K Filing
--------------------------------------------------------------
SunPower Corp received on March 20, 2024, a notice from The Nasdaq
Stock Market LLC indicating that the Company is not in compliance
with Nasdaq Listing Rule 5250(c)(1), which requires timely filing
of all required periodic financial reports with the SEC, as a
result of not having timely filed the Form 10-K with the SEC, as
described more fully in the Company's Notification of Late Filing
on Form 12b-25 filed with the SEC on February 29, 2024.
The Notice has no immediate effect on the listing or trading of the
Company's common stock on the Nasdaq.
The Notice indicated that the Company must submit a plan to regain
compliance with the Listing Rule within 60 calendar days and,
following receipt of such plan, Nasdaq may grant an extension of up
to 180 calendar days from the Form 10-K due date, or until
September 11, 2024, for the Company to regain compliance.
While the Company can provide no assurances as to timing, the
Company is working diligently to finalize the Form 10-K and plans
to file the Form 10-K as soon as practicable to regain compliance
with the Listing Rule.
About SunPower
Headquartered in Richmond, California, SunPower (NASDAQ: SPWR) --
https://www.sunpower.com/ -- is a residential solar, storage and
energy services provider in North America. SunPower offers solar +
storage solutions that give customers control over electricity
consumption and resiliency during power outages while providing
cost savings to homeowners.
SunPower Corporation said in its Form 10-Q Report filed with the
U.S. Securities and Exchange Commission for the quarterly period
ended October 1, 2023, that there is substantial doubt exists about
its ability to continue as a going concern.
According to the Company, for the three and nine months ended
October 1, 2023, it had recurring operating losses and, as of
October 1, it breached a financial covenant and a reporting
covenant of its Credit Agreement, dated as of September 12, 2022.
The breaches created events of default thereunder, which enables
the requisite lenders under the Credit Agreement to demand
immediate payment or exercise other remedies. Such events raise
substantial doubt about the Company's ability to continue as a
going concern.
TEGNA INC: S&P Affirms 'BB+' Issuer Credit Rating, Outlook Stable
-----------------------------------------------------------------
S&P Global Ratings affirmed its 'BB+' issuer credit rating on TEGNA
Inc.
The stable outlook reflects S&P's expectation that TEGNA's S&P
Global Ratings-adjusted net leverage will remain between 2.8x-3.0x
over the next year, with more than half of its free operating cash
flow (FOCF) going to shareholders through share repurchases and
dividends.
Local TV broadcasters face increasing risk as the media landscape
continues to evolve and consumers navigate away from pay-TV. S&P
ssid, "After several years of healthy growth, we expect TEGNA's
gross retransmission revenue (nearly 50% of total revenue) will
decline nearly 3% in 2024 and about 1% in 2025 as more moderate
price increases during contract renewals are insufficient to offset
elevated subscriber churn. We believe it will be increasingly
difficult for TEGNA to increase price given the already high cost
of pay-TV, declining TV audiences, weaker broadcast network
content, and less exclusive broadcast network content (as the
parent companies of the broadcast networks prioritize their owned
streaming platforms versus their owned broadcast networks). At the
same time, we expect total pay-TV subscribers (including both
legacy and virtual pay-TV subscribers) will decline between 6.5%-7%
in 2024 and 2025 as consumers continue moving to streaming video
alternatives. TEGNA renewed approximately 30% of its subscriber
base at the end of 2023 and an additional 20% of its subscriber
base will be up for renewal at the end of 2024. Local TV
broadcasters primarily remain a distributor of content rather than
a creator or owner, which we believe makes it more difficult for
them to adapt to the evolving media landscape. Furthermore, while
TEGNA's TV station portfolio reaches 39% of U.S. TV households,
this is notably lower than Nexstar Media Group Inc., which reaches
approximately 70% of households. Given the combination of these
factors, we revised our business risk to fair from satisfactory."
Despite increasing risks to broadcast TV, we still view it more
favorably than other TV subsectors. S&P expects declines in gross
retransmission revenue will be manageable and no higher than in the
low single-digit percent area over the next few years. In addition,
TEGNA recently announced that the majority of its reverse
retransmission agreements with the broadcast networks are now
variable (based on subscriber counts) rather than fixed, which
should provide the company with downside protection. Following
recent affiliate renewals with ABC and NBC, the company does not
have any material affiliate renewals until late 2026.
S&P said, "We continue to view broadcast TV more favorably than
other TV subsectors (such as general entertainment) given its focus
on local news and sports, which is more exclusive to TV and
overwhelmingly watched live. Broadcast TV has the broadcast rights
for key sports leagues, including the National Football League,
which will remain on broadcast TV through the 2033-2034 season. As
a result, we expect it will remain a key component of pay-TV
distributors' video offerings. We also believe there is a base of
pay-TV subscribers (primarily sports enthusiasts and families with
a variety of viewing preferences), and the pace of pay-TV
subscriber losses could moderate (though we do not expect this to
happen for a few years).
"TEGNA has a net leverage target below 3x. TEGNA's S&P Global
Ratings-adjusted net leverage (calculated on an average
trailing-eight-quarter basis) was 2.9x at the end of 2023 (our
adjustments add 0.1x to the company's calculated leverage). We
expect the company's leverage will remain in the 2.8x-3.0x range
over the next two years as it returns around half of its FOCF to
shareholders over a political cycle. The company recently announced
it expects to return 40%-60% of FOCF generated in 2024-2025 to
shareholders through share repurchases and dividends (with a $350
million commitment in 2024). The company also received $153 million
of gross proceeds from the sale of its equity stake in Broadcast
Music Inc. (BMI) in February, which we expect will also be returned
to shareholders. We expect TEGNA will generate FOCF of about $620
million in 2024 and about $340 million in 2025. We estimate share
repurchases of about $380 million in 2024 and about $70 million in
2025, with dividend payments of about $80 million per year.
"The company expects to use FOCF remaining after shareholder
returns for organic investments, bolt-on acquisitions, and
preparing for future debt retirement (the company has $550 million
of notes due in March 2026). We believe the company could
potentially make acquisitions to expand its digital offerings,
similar to its recent acquisition of Octillion Media (a demand side
platform focused on local connected TV and over the top
advertising). The company's TV station portfolio still has 9% of
available capacity (with the UHF discount) under the Federal
Communications Commission's 39% national ownership cap, although
management has said its focus is not on TV station M&A. We view
material broadcast transactions as unlikely within the existing
regulatory framework and view regulatory reform as unlikely over
the next couple of years, even if there is a change in
administration.
"We expect political advertising will remain a relatively stable
source of cash flow, despite our expectation for lower political
advertising revenue in 2024 than in 2020. TEGNA achieved record
political advertising revenue of about $446 million in 2020 (the
last presidential election year), about $50 million of which was
related to the Georgia Senate runoffs. We estimate political
advertising revenue of about $385 million in 2024, which we
attribute to fewer competitive Senate races in TEGNA's geographic
footprint compared with 2020. Our 2024 estimate for political
advertising revenue compares favorably to the $341 million of
political advertising revenue earned by the company in 2022 (the
last midterm election year). We continue to believe TV is more
attractive than other forms of media for political advertisers
given its significant reach and ability to target voters in select
districts and expect the local TV industry in aggregate will
maintain its share of political advertising dollars.
"The stable outlook reflects our expectation that TEGNA's S&P
Global Ratings-adjusted net leverage will remain between 2.8x-3.0x
over the next year, with more than half of its free operating cash
flow going to shareholders through share repurchases and
dividends."
S&P could lower the rating if leverage increases above 3.5x on a
sustained basis due to:
-- An acceleration in subscriber declines that causes net
retransmission revenue to decline;
-- Declines in core advertising revenue due to macroeconomic or
secular pressures; or
-- Shareholder returns or acquisitions.
While unlikely over the next year, S&P could raise the rating if:
-- The company reduces leverage comfortably below 2.5x and
publicly commits to a financial policy that would maintain leverage
below this level on a sustained basis; and
-- S&P believes EBITDA and FOCF will remain stable despite ongoing
pay-TV subscriber declines.
ESG factors have no material influence on S&P's credit rating
analysis of TEGNA.
TLC TRAVEL STAFF: Hits Chapter 11 Bankruptcy Protection
-------------------------------------------------------
Christina Georgacopoulos of Tampa Bay Business Journal reports that
Land O'Lakes-based travel nurse staffing agency TLC Travel Staff is
reorganizing in Chapter 11 bankruptcy.
The clinician-owned agency has $11.6 million in debt with its eight
top creditors and less than $50,000 in assets, according to a
petition filed in the Middle District court on March 23.
TLC staffs nurses for hospitals, nursing homes and clinics
throughout the U.S., according to its website. The agency had
hundreds of open positions advertised at the time it filed for
Chapter 11, but the total size and scope of its business are
unclear.
Labor shortages in health care drove record demand for travel
nurses during the pandemic, but the boom of higher-paying temporary
jobs was short-lived once relief funding dried up.
TLC isn't the only health care staffing agency to face financial
hardship. There were several high-profile bankruptcies in early
2023, including a $7.7 billion Chapter 11 reorganization by
physician staffing giant Envision Healthcare. Envision had employed
20,000 physicians at its height and was valued at $9.9 billion when
private equity firm KKR acquired the agency in 2018.
About TLC Travel Staff
TLC Travel Staff LLC specializes in medical staffing that provides
opportunities to professionals in hospitals, nursing homes, and
clinics.
TLC Travel Staff LLC sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. M.D. Fla. Case No. 24-01546) on March 23,
2024. In the petition filed by Steve Ludders, as president/managing
member, the Debtor reports estimated assets up to $50,000 and
estimated liabilities between $10 million and $50 million.
The Honorable Bankruptcy Judge Roberta A Colton oversees the case.
The Debtor is represented by:
Chad Van Horn, Esq.
VAN HORN LAW GROUP, P.A.
500 NE 4th Street, Suite 200
Fort Lauderdale, FL 33301
Tel: (954) 765-3166
E-mail: chad@cvhlawgroup.com
TPT GLOBAL: Delays Filing of 2023 Annual Report
-----------------------------------------------
TPT Global Tech, Inc. filed with the Securities and Exchange
Commission a Form 12b-25 notifying the delay in the filing of its
Annual Report on Form 10-K for the year ended Dec. 31, 2023.
TPT Global was unable without unreasonable effort and expense to
prepare its accounting records and schedules in sufficient time to
allow its accountants to complete their review of the Company's
financial statements for the year ended Dec. 31, 2023 before the
required filing date for the Annual Report on Form 10-K. The
Company intends to file the subject Annual Report on Form 10-K on
or before the fifteenth calendar day following the prescribed due
date.
About TPT Global Tech
TPT Global Tech Inc. (OTC:TPTW) based in San Diego, California, is
a technology holding company based in San Diego, California. The
Company operates in various sectors including media,
telecommunications, Smart City Real Estate Development, and the
launch of the first super App, VuMe technology platform. As a media
content delivery hub, TPT Global Tech utilizes its own proprietary
global digital media TV and telecommunications infrastructure
platform. TPT offers software as a service (SaaS), technology
platform as a service (PAAS), and cloud-based unified communication
as a service (UCaaS) solutions to businesses worldwide. Their
UCaaS services enable businesses of all sizes to access the latest
voice, data, media, and collaboration features.
TPT Global reported a net loss attributable to the Company's
shareholders of $61.50 million for the year ended Dec. 31, 2022,
compared to a net loss attributable to the Company's shareholders
of $4.02 million for the year ended Dec. 31, 2021. As of Dec. 31,
2022, the Company had $1.05 million in total assets, $34.02 million
in total liabilities, $58.25 million in mezzanine equity, and a
total stockholders' deficit of $91.21 million.
Draper, UT-based Sadler, Gibb & Associates, LLC, the Company's
auditor since 2016, issued a "going concern" qualification in its
report dated May 16, 2023, citing that the Company has suffered
recurring losses from operations and has a net capital deficiency
that raise substantial doubt about its ability to continue as a
going concern.
As of Sept. 30, 2023, the Company had an accumulated deficit
totaling $109,549,957. This raises substantial doubts about the
Company's ability to continue as a going concern, the Company said
in its Quarterly Report for the period ended Sept. 30, 2023.
TPT GLOBAL: Forges Strategic Marketing Partnership With Legacy Team
-------------------------------------------------------------------
TPT Global Tech, Inc. and its subsidiary, VuMe LLC, and Legacy Team
LLC. (LTL), a social influencer associate, announced a strategic
marketing and promotions agreement set to transform the landscape
of global e-commerce and digital marketing. This collaboration
will leverage the company's VuMe Super App's leading-edge
marketplace and its sophisticated live rooms and social media
functions to expand the visibility and sales of LTL's extensive
product range across 22 countries to over 650,000 members in LTL's
Global network.
A Strategic Move to Accelerate Growth and Value
A central element of this partnership is that once VuMe is launched
this collaboration is expected to surge VuMe app downloads, as the
agreement taps into LTL's vast network of over 650,000 individual
members worldwide, driving unprecedented adoption rates across 22
countries. With this surge in downloads, the company believes this
will enhance TPT Global Tech's valuation, offering benefits to
investors and shareholders by showcasing the company's robust
growth potential and expanding user base.
Fostering Innovation and Expanding Reach
Stephen J. Thomas III, CEO of TPT Global Tech, remarked, "This
marketing and promotions agreement with LTL is not just a
collaboration; it's a strategic move designed to accelerate our
growth, increase app downloads, and ultimately enhance our value to
shareholders. By integrating LTL's expansive network with our VuMe
platform, we are setting a new standard for what is possible in the
digital marketplace."
Echoing this sentiment, Mike Swilling www.michaelswilling.com,
President of Legacy Team LLC and Master Associate of CTFO (Changing
the Future Outcome) stated, "Our alliance with VuMe LLC represents
a pivotal moment in our quest to provide unparalleled opportunities
to our associates. This initiative will not only create more
efficient sales and marketing campaigns, but we believe
revolutionize our sales and marketing strategies and at the same
time significantly contribute to VuMe's global adoption, benefiting
all stakeholders involved."
A Catalyst for Growth and Opportunity
The agreement between the two companies is designed to mutually
benefit both entities by combining LTL's vast network and product
expertise with VuMe's technological prowess and digital platform.
This collaboration is expected to drive growth, enhance customer
engagement, and expand market reach, setting a new benchmark for
success in the multi-level marketing and e-commerce industries.
Creating Value for Investors and Customers
The partnership also aims to create a synergistic relationship that
drives growth for both companies, improves customer engagement, and
significantly expands market reach. By leveraging LTL's large
network and VuMe's technological capabilities, this collaboration
is poised to deliver value to TPT Global Tech's investors and
shareholders, highlighting the company's potential trajectory and
commitment to innovation. TPT Global Tech is also gearing up to
market CTFO's anti-aging nano technology Wellness product Gluta
Myst under the company's medical Division TPT MedTech
https://tptmedtech24.myctfo.com/.
About TPT Global Tech
TPT Global Tech Inc. (OTC:TPTW) based in San Diego, California, is
a technology holding company based in San Diego, California. The
Company operates in various sectors including media,
telecommunications, Smart City Real Estate Development, and the
launch of the first super App, VuMe technology platform. As a media
content delivery hub, TPT Global Tech utilizes its own proprietary
global digital media TV and telecommunications infrastructure
platform. TPT offers software as a service (SaaS), technology
platform as a service (PAAS), and cloud-based unified communication
as a service (UCaaS) solutions to businesses worldwide. Their UCaaS
services enable businesses of all sizes to access the latest voice,
data, media, and collaboration features.
TPT Global reported a net loss attributable to the Company's
shareholders of $61.50 million for the year ended Dec. 31, 2022,
compared to a net loss attributable to the Company's shareholders
of $4.02 million for the year ended Dec. 31, 2021. As of Dec. 31,
2022, the Company had $1.05 million in total assets, $34.02 million
in total liabilities, $58.25 million in mezzanine equity, and a
total stockholders' deficit of $91.21 million.
Draper, UT-based Sadler, Gibb & Associates, LLC, the Company's
auditor since 2016, issued a "going concern" qualification in its
report dated May 16, 2023, citing that the Company has suffered
recurring losses from operations and has a net capital deficiency
that raise substantial doubt about its ability to continue as a
going concern.
As of Sept. 30, 2023, the Company had an accumulated deficit
totaling $109,549,957. The Company said this raises substantial
doubts about its ability to continue as a going concern.
TRIPLE 7: Seeks to Hire Sasser Law Firm as Bankruptcy Counsel
-------------------------------------------------------------
Triple 7 Commodities Inc. seeks approval from the U.S. Bankruptcy
Court for the Middle District of North Carolina to employ Sasser
Law Firm as its bankruptcy counsel.
The Debtor requires legal counsel to:
(a) give advice with respect to the powers and duties of the
Debtor in the continued operation of its business and management of
its property;
(b) prepare and file monthly reports, Chapter 11 plan of
reorganization and disclosure statement;
(c) prepare legal papers;
(d) undertake necessary action to avoid liens against the
Debtor's property obtained by creditors and recover preferential
payments within 90 days of the Debtor's Chapter 11 filing;
(e) perform a search of the public records to locate liens and
assess validity; and
(f) represent the Debtor at hearings and any 2004 examination;
and
(g) perform all other legal services for the Debtor.
The firm received compensation in the amount of $7,500 from Todd
Neilsen, an investor of the Debtor.
Philip Sasser, an attorney at Sasser Law Firm, disclosed in a court
filing that his firm is a "disinterested person" as defined in
Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Philip Sasser, Esq.
SASSER LAW FIRM
2000 Regency Parkway, Suite 230
Cary, NC 27518
Telephone: (919) 319-7400
Facsimile: (919) 657-7400
Email: philip@sasserbankruptcy.com
About Triple 7 Commodities Inc.
Triple 7 Commodities Inc. sought protection for relief under
Chapter 11 of the Bankruptcy Code (Bankr. M.D.N.C. Case No.
24-50162), listing $10,000,001-$50 million in both assets and
liabilities. The petition was signed by Damian H. Caldwell as
president and CEO. Philip Sasser, Esq. at Sasser Law Firm
represents the Debtor as counsel.
TURKEY LEG HUT: Owners File for Chapter 11 Bankruptcy Protection
----------------------------------------------------------------
Terrance Harris of Defender reports that the Turkey Leg Hut owners
filed for Chapter 11 bankruptcy in the 127th Judicial District
Court in Harris County.
The filing, made on behalf of estranged couple Nakia Price and
Lyndell Price is specifically aimed at former co-owner Steve Rogers
and his $931,111.12 lawsuit against the Turkey Leg Hut owners for
failure to pay.
Under Section 362 of the bankruptcy code, all collections are
required to cease immediately. Read the filing that has been
obtained by the Defender.
Rogers filed his lawsuit earlier this year after the Prices failed
to continue paying the redemption fee as a result of his withdrawal
from the business. Rogers was to be paid $1,547,500, which was
agreed upon in September 2021.
Rogers said in court filings that the Prices made three of the five
agreed payments but stopped after that. Rogers was only paid
$616,388.88. A judge ruled earlier this year that Lynn Price and
the restaurant had to pay over $900,000 in the lawsuit brought by
Rogers.
The Turkey Leg Hut, which remains open for business, took to
Instagram to explain why it made the moves it did in court Tuesday,
March 26, 2024.
While this is the biggest hit for the embattled restaurant, it
hasn’t been the only issue over the years.
The Turkey Leg Hut faced legal issues from many of the homeowners
in the area over traffic, parking and smoke from the Turkey Leg.
Nakia and Lyndell Price also have gone through a messy split. And
earlier this year, Nakia fired Lyndell and several other workers.
About Turkey Leg Hut
Turkey Leg Hut is a Houston based restaurant specializing in turkey
legs.
Turkey Leg Hut sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Tex. Case No. 24-31275) on March 26,
2024. In the petition filed by Nakia Price, as managing member, the
Debtor estimated assets up to $50,000 and estimated liabilities
between $1 million and $10 million.
Honorable Bankruptcy Judge Eduardo V. Rodriguez oversees the case.
The Debtor is represented by:
James Q. Pope, Esq.
THE POPE LAW FIRM
6161 Savoy Drive 1125
Houston, TX 77036
Tel: (713) 449-4481
E-mail: jamesp@thepopelawfirm.com
UNITED NATURAL: Moody's Lowers CFR to B3 & Unsecured Notes to Caa2
------------------------------------------------------------------
Moody's Ratings downgraded the corporate family rating of United
Natural Foods, Inc ("UNFI") to B3 from B2 and its probability of
default rating to B3-PD from B2-PD. Concurrently, Moody's
downgraded the rating of the company's senior unsecured global
notes to Caa2 from Caa1. Moody's affirmed the B3 rating on UNFI's
senior secured term loan. The company's speculative grade
liquidity rating ("SGL") is unchanged at SGL-3. The outlook remains
stable.
The downgrade of the ratings reflects UNFI's weaker credit metrics
with high financial leverage, very weak interest coverage and
negative free cash flow. Moody's expects UNFI's debt to EBITDA to
be 5.8x and EBITA/interest at 1.0x over the next 12 months. The
company's profitability is expected to continue to be pressured by
elevated operating costs from supply chain disruptions, reduced
volumes from retail grocery customers, and high labor costs. The
affirmation of the B3 on the term loan reflects the sizable level
of asset coverage provided by the real estate pledged to the term
loan.
RATINGS RATIONALE
UNFI's B3 CFR reflects the company's weak credit metrics and
negative free cash flow. Debt to EBITDA increased to a high of
6.6x for the LTM Ended January 27, 2024 from 4.9x for the year
ended July 29, 2023 and EBITA to interest was at 0.8x from 1.4x.
Leverage includes an adjustment to debt for a $333 million
receivables monetization. Moody's expects debt to EBITDA to improve
to about 5.8x and EBITA to interest to remain weak at roughly 1.0x
over the next 12 months at a time when UNFI must invest significant
capital to improve its operations. Moody's expect free cash flow to
remain negative at about $(30) million to $(75) million over the
next 12-18 months.
The rating also reflects the mature nature of UNFI's low margin
fixed cost distribution business, where topline growth is important
to improve profitability. Moody's expects the business environment
will remain highly competitive especially for the independent food
retailers or small retail grocery chains. These customers are being
squeezed by larger, better capitalized traditional supermarkets,
such as The Kroger Co. and alternative food retailers, such as
Walmart Inc. thereby pressuring their growth and profitability. The
company's credit profile also reflects its roughly 20% sales
concentration with Whole Foods Market, Inc. Partially offsetting
these challenges are UNFI's formidable size in the supermarket
distribution industry, and its leadership position in the fast
growing natural, organic and specialty food business. Moody's
expects financial policies to focus on debt reduction as the
company works to stabilize its business, generate positive free
cash flow and refinance upcoming maturities.
The stable outlook reflects Moody's belief that UNFI can make
operational progress to return to EBITDA growth, improve credit
metrics and maintain adequate liquidity. The outlook also assumes
its supply chain optimization will be successfully executed.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Ratings could be upgraded if the company demonstrates sustained
growth in sales and profitability, maintains adequate liquidity and
generates modestly positive free cash flow. An upgrade would also
require UNFI to successfully refinance its upcoming maturities in a
timely manner. Quantitatively, ratings could be upgraded if
debt/EBITDA is sustained below 5.5x and EBITA/interest expense is
sustained above 1.5x.
Ratings could be downgraded if operating performance continues to
deteriorate. Ratings could also be downgraded if debt/EBITDA
remains above 6.0x or EBITA/interest remains below 1.0x or if the
company fails to generate consistently positive free cash flow,
liquidity deteriorates or if its financial strategies do not
prioritize debt reduction.
United Natural Foods, Inc is a leading distributor of natural,
organic, and specialty, produce, and conventional grocery foods and
non-food products, and provider of support services in the United
States and Canada. The company is publicly traded and has 55
distribution centers and generates about $30 billion in revenue.
The principal methodology used in these ratings was Distribution
and Supply Chain Services published in February 2023.
UPHEALTH INC:Releases Corporate Update, 2023 Financial Results
--------------------------------------------------------------
UpHealth, Inc. provided a corporate update and announced financial
results for the fourth quarter and full year ended December 31,
2023.
"In short, 2023 was a challenging, yet transformative, year for
UpHealth, as we continued to take steps to stabilize the business,"
said Martin Beck, Chief Executive Officer. "We have recently closed
the sale of our Cloudbreak Health, LLC ("Cloudbreak") business and
will use the proceeds to significantly de-lever our balance sheet,
giving us the financial flexibility to pursue a more simplified,
profitable strategy that focuses on our growing, cash flow
positive, behavioral health business, TTC Healthcare, Inc. ("TTC
Healthcare").
Beck continued, "I once again want to thank our stakeholders,
employees and constituents of UpHealth who continue on this path
with us. I can assure you that the UpHealth leadership team is more
dedicated and focused than ever on its newly defined and simplified
strategy to profitably scale TTC Healthcare."
As previously disclosed, the Company provided an update on the
arbitration brought by UpHealth Holdings, Inc., a wholly-owned
direct subsidiary of UpHealth, against Glocal Healthcare Systems
and several of Glocal's officers and shareholders. On March 18,
2024, the International Court of Arbitration of the International
Chamber of Commerce transmitted the Final Award to the parties. In
the Final Award, the arbitral tribunal found the Respondents liable
for breach of contract and directed them to pay Holdings up to
$110.2 million in damages, as well as most of the legal costs and
other expenses that Holdings incurred in the arbitration. The
$110.2 million damages are apportioned based on the shareholders
percentage of each of the Indian directors and shareholders of
Glocal: 34.38% to be paid by Dr. Syed Sabahat Azim, 34.38% by Richa
Sana Azim, 4.69% by Gautam Chowdhury, 22.54% by Meleveetil
Damodaran, and 4.02% by Kimberlite Social India Private Limited.
The dispute arose out of Holdings' acquisition of Glocal pursuant
to a Share Purchase Agreement dated October 30, 2020, and the
subsequent breach by Respondents of their contractual obligations
to relinquish control of Glocal to Holdings. In particular, the
Tribunal found that the Respondents "failed to give [Holdings]
control of [Glocal]" after the closing of the acquisition, despite
the payment in full of the acquisition consideration. The
Respondents were held personally liable.
The Company remains steadfast in its determination to hold fully
accountable the Respondents in the ICA proceeding, who sold us
Glocal and then refused to relinquish control of it, using
misleading and baseless claims, for their indefensible conduct and
the resulting harm caused to UpHealth and its stockholders. "We
appreciate the unanimous decision from the arbitrators and we thank
them for a thorough and impartial elaboration and ruling."
Cloudbreak Sale Transaction
On March 15, 2024, the Company completed the sale of its wholly
owned subsidiary Cloudbreak and its MarttiTM translation offering
to a newly formed entity controlled by GTCR LLC for $180 million in
gross cash proceeds.
The proceeds of the Cloudbreak sale, after transaction-related fees
and expenses, have been deposited into three escrow accounts: a
Notes escrow ($139 million), a Tax escrow ($27 million), and a
Working Capital escrow ($3 million). Funds in the Notes escrow will
be released on June 3, 2024, but no later than June 15, 2024, and
will be used to satisfy in full, plus accrued interest, the
Company's 2026 notes and to repurchase approximately $20 million of
the Company's 2025 Notes, plus accrued interest, leaving
approximately $37 million of 2025 Notes outstanding, which will
constitute the Company's entire long term debt. Funds in the Tax
escrow will be used to satisfy the Company's 2024 tax liability and
any funds not required for this purpose will be used to repurchase
additional 2025 Notes. Funds in the Working Capital escrow will be
used to satisfy any obligations of the Company resulting from a
difference between Cloudbreak's targeted and actual working capital
as of the closing of the transaction, and any funds not used for
this purpose will be used to repurchase additional 2025 Notes.
Fourth Quarter and Full Year 2023 Financial Highlights
As previously reported, Holdings filed for bankruptcy protection on
September 19, 2023, and its Thrasys, Inc. and Behavioral Health
Services subsidiaries filed for bankruptcy protection on October
20, 2023, in response to an unexpected judgment in favor of a
contract counterparty. These bankruptcy cases continue and the
operations of Thrasys and BHS have largely ceased. It is expected
that Holdings could emerge from bankruptcy protection in the second
half of 2024. It is important to note that the Company and TTC
Healthcare are not part of the bankruptcy proceedings.
As a result of the Company's previously announced deconsolidation
of Holdings and its subsidiaries, Thrasys, BHS, and TTC Healthcare,
the Company's GAAP revenues and earnings results for the fourth
quarter of 2023 only include results from UpHealth, Inc. and
Cloudbreak and its subsidiaries.
* Revenues totaled $17.3 million for the fourth quarter of
2023 and $130.0 million for the full year of 2023, compared to
$40.5 million for the fourth quarter of 2022 and $158.8 million for
the full year of 2022;
* Gross margin was 54% for both the fourth quarter and full
year of 2023: compared to 45% for the fourth quarter of 2022 and
44% for the full year of 2022;
* Net loss attributable to UpHealth was $10.0 million for the
fourth quarter of 2023 and $57.8 million for the full year of 2023,
compared to a net loss attributable to UpHealth of $27.4 million
for the fourth quarter of 2022 and $223.0 million for the full year
of 2022;
* Net loss per share attributable to UpHealth was $(0.54) for
the fourth quarter of 2023 and $(3.26) for the full year of 2023,
compared to a net loss per share attributable to UpHealth of
$(1.82) for the fourth quarter of 2022 and $(15.17) for the full
year of 2022;
* Adjusted EBITDA, which includes the performance of
Cloudbreak, was $2.3 million for the fourth quarter of 2023 and
$19.6 million for the full year of 2023, compared to $1.9 million
for the fourth quarter of 2022 and $3.2 million for the full year
of 2022.
* Proforma results, which include the results of all business
units, including Holdings and its subsidiaries, for the full year
of 2023, and Innovations Group, Inc. ("IGI") through the date of
its sale on May 11, 2023, are as follows:
* Proforma fourth quarter 2023 revenues were $38.6 million,
compared to $40.5 million in revenues for the fourth quarter of
2022. Growth in proforma revenues in the fourth quarter of 2023 was
driven by top line growth at TTC Healthcare and Cloudbreak and by
certain non-recurring revenues associated with the cessation of
operations at Thrasys;
* Proforma fourth quarter 2023 gross margins were 62%,
compared to 45% for the fourth quarter of 2022. Proforma margin
improvement in the fourth quarter was largely driven by an improved
payor mix at TTC Healthcare;
* Proforma fourth quarter 2023 Adjusted EBITDA was $11.1
million, compared with $1.9 million in the fourth quarter of 2022.
Proforma Adjusted EBITDA growth in the fourth quarter of 2023 was
driven by strong revenue growth and margin expansion coupled with
reduced corporate expenses;
* Proforma full-year 2023 revenues were $151.2 million,
compared to $158.8 million for the full year of 2022;
* Proforma full-year 2023 gross margins were 56%, compared to
44% for the full year of 2022; and
* Proforma full-year 2023 Adjusted EBITDA was $28.3 million,
compared to $3.2 million for the full year of 2022.
UpHealth Will Focus on Expanding Our Profitable TTC Healthcare
Business
* TTC Healthcare currently offers its patients a full
continuum of evidence-based mental health and substance use
disorder services in four facilities in Florida and continues to
show strong census growth, with an attractive payor mix, including
the U.S. Department of Veterans Affairs. TTC Healthcare's financial
results were previously reported as part of UpHealth's Services
segment.
* TTC Healthcare's revenues were $12.1 million, gross margins
were 60%, and adjusted EBITDA was $4.6 million, before the
allocation of corporate expenses for the fourth quarter of 2023,
compared to $7.9 million in revenues, gross margins of 43%, and
$1.3 million in adjusted EBITDA, before the allocation of corporate
expenses for the fourth quarter of 2022.
* TTC Healthcare's revenues were $44.1 million, gross margins
were 57%, and adjusted EBITDA was $15.9 million, before the
allocation of corporate expenses for the full year of 2023,
compared to $31.0 million in revenues, gross margins of 45%, and
$4.9 million in adjusted EBITDA, before the allocation of corporate
expenses for the full year of 2022.
* TTC Healthcare's performance in 2023, and in particular the
fourth quarter 2023, was driven by strong volumes and a
significantly improved payor mix. We expect future volumes to
remain robust and for gross margins to revert over the course of
2024 to historical norms in the range of 50%.
TTC Healthcare serves the large and growing market in the United
States for mental health and substance use disorder services. The
business is an excellent platform from which to drive future
growth. TTC Healthcare's core strengths of high-quality care,
strict regulatory compliance and efficient back-office operations
can be leveraged across a larger asset base and UpHealth will
aggressively pursue geographic and service line expansion of TTC
Healthcare via partnerships, joint ventures, acquisitions, and de
novo projects. TTC Healthcare has a demonstrated track record of
denovo growth, having opened a residential treatment facility near
Ocala, Florida in January 2021, which enabled the business to
increase its offering of mental health services, and a new facility
in Delray Beach, Florida in July 2021, which enabled the business
to increase its volumes under in-network contracts. The UpHealth
team is excited to focus its energies on growing TTC Healthcare and
looks forward to reporting its progress in the coming quarters.
About UpHealth
UpHealth -- https://uphealthinc.com/ -- is a global digital health
company that delivers digital-first technology, infrastructure, and
services to dramatically improve how healthcare is delivered and
managed. The UpHealth platform creates digitally enabled "care
communities" that improve access and achieve better patient
outcomes at lower cost, through digital health solutions and
interoperability tools that serve patients wherever they are, in
their native language. UpHealth's clients include health plans,
healthcare providers and community-based organizations.
WALLAROO'S FURNITURE: Voluntary Chapter 11 Case Summary
-------------------------------------------------------
Debtor: Wallaroo's Furniture and Mattresses LLC
3651 W Market Center Drive, #200
Salt Lake City, UT 84115
Business Description: The Debtor specializes in offering a wide
selection of high-end furniture and
mattresses.
Chapter 11 Petition Date: March 29, 2024
Court: United States Bankruptcy Court
District of Utah
Case No.: 24-21393
Judge: Hon. Joel T. Marker
Debtor's Counsel: Geoffrey L. Chesnut, Esq.
RED ROCK LEGAL SERVICES, PLLC
PO Box 1948
Cedar City, UT 84721
Tel: (435) 634-1000
E-mail: courtmailrr@expresslaw.com
Estimated Assets: $0 to $50,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Nathan Chetrit as managing member.
The Debtor failed to include in the petition a list of its 20
largest unsecured creditors.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/YOFUXXY/Wallaroos_Furniture_and_Mattresses__utbke-24-21393__0001.0.pdf?mcid=tGE4TAMA
WALLAROO'S FURNITURE: Voluntary Chapter 11 Case Summary
-------------------------------------------------------
Debtor: Wallaroo's Furniture and Mattresses LLC
1001 N Division Street
Spokane, WA 99202
Business Description: The Debtor specializes in offering a wide
selection of high-end furniture and
mattresses.
Chapter 11 Petition Date: March 29, 2024
Court: United States Bankruptcy Court
District of Utah
Case No.: 24-21395
Judge: Hon. Joel T. Marker
Debtor's Counsel: Geoffrey L. Chesnut, Esq.
RED ROCK LEGAL SERVICES, PLLC
PO Box 1948
Cedar City, UT 84721
Tel: (435) 634-1000
Email: courtmailrr@expresslaw.com
Estimated Assets: $0 to $50,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Nathan Chetrit as managing member.
The Debtor failed to include in the petition a list of its 20
largest unsecured creditors.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/YQ2VHDQ/Wallaroos_Furniture_and_Mattresses__utbke-24-21395__0001.0.pdf?mcid=tGE4TAMA
WASTE PRO: Moody's Affirms 'B3' CFR & Alters Outlook to Positive
----------------------------------------------------------------
Moody's Ratings affirmed the B3 corporate family rating, B3-PD
probability of default rating and Caa1 senior unsecured notes
rating of Waste Pro USA, Inc. At the same time, Moody's changed the
outlook to positive from stable.
The rating affirmations and positive outlook reflect Moody's
expectation for Waste Pro to build on the positive momentum over
the past year. Moody's expects that growing revenue and efficiency
improvements will drive stronger credit metrics, including
debt-to-EBITDA approaching 4.5x by the end of 2024. This will be
aided by pricing escalators on existing contracts, a focus on
restructuring lower margin contracts and continued momentum with
identifying customers willing to pay for the company's bespoke
(premium) collection service. Moody's also expects Waste Pro to
maintain adequate liquidity, including free cash flow turning
positive over the next 12 -18 months.
RATINGS RATIONALE
The ratings reflect Waste Pro's modest scale with a regional focus
and particular reliance on the state of Florida. The company
generates considerably lower margins relative to vertically
integrated industry peers due to its collection-focused operating
model (less than 5% of revenue from higher-margin
landfill/disposal). The company also has high leverage and free
cash flow that is constrained by the capital intensity of the
operating model, financial policies oriented toward growth, modest
margin and a high interest expense burden. However, free cash flow
could be positive if growth capital investments were meaningfully
reduced. Moody's anticipates that Waste Pro's growth strategy will
continue to require significant upfront capital investments.
However, Moody's expects higher earnings and continued focus on
cost efficiency will enable steady improvement in cash flow, with
free cash flow turning positive over the next year.
Waste Pro's business model benefits from the resiliency of the
solid waste industry, with industry-wide pricing discipline and the
non-discretionary nature of services. The company benefits from a
premium/personalized service offering tied to multi-year contracts
with built-in price escalators that provide good revenue
visibility. Waste Pro's strong presence in the Southeastern US, a
region of the country (particularly Florida) that continues to
experience greater economic and population growth than the US, will
support improving volumes and top line growth over the next year.
Waste Pro's liquidity is adequate despite a historically minimal
cash position and lack of a track record of generating positive
free cash flow. However, scaling back growth capital investments
closer to a maintenance spending level would allow for positive
free cash flow. Still, a majority of growth investments for 2024
are already underway and new opportunities could require additional
capital expenditures. Moody's expects free cash flow to improve
from earnings growth and turn positive over the next year. The $215
million ABL facility expiring in June 2026 had approximately $166
million available at December 31, 2023, net of borrowings and
posted letters of credit. The facility is subject to a first-lien
net leverage covenant of 2.0x and fixed charge coverage covenant
(FCCR) of 1.1x with FCCR calculations provided monthly to lenders
based on operating results for the preceding twelve months, as well
as a requirement to maintain excess availability of at least $20
million. Moody's expects the company to maintain covenant
compliance and ample availability on its ABL over the next year.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded with an acceleration of profitable
revenue growth and effective cost management that drive stronger
operating margins, such that Moody's expects debt-to-EBITDA to
remain below 5x. The maintenance of good liquidity, including
reduced reliance on the ABL revolving facility and consistent
positive free cash flow would also be important considerations for
a ratings upgrade. Lower geographic concentration with prudent
expansion beyond Florida would also be viewed favorably.
The ratings could be downgraded with contraction in revenue or
sustained deterioration in margins, including from a meaningful
drop in core pricing or a decline in volumes in conjunction with
competitive pressures. Ratings could also be pressured by
increasingly negative free cash flow and debt-to-EBITDA remaining
above 6x. Erosion in the liquidity position, including limited ABL
revolver availability and/or covenant compliance issues with the
ABL facility could also adversely affect the ratings.
The principal methodology used in these ratings was Environmental
Services and Waste Management published in May 2023.
Waste Pro USA, Inc. is a Southeast US regionally concentrated,
non-hazardous solid waste management company focused largely on
waste collection operations. The company also provides transfer,
disposal and recycling services. Net revenue for the year ended
December 31, 2023 was approximately $1.1 billion.
Waste Pro is owned by its founder and current board chairman.
[*] Commercial Chapter 11 Filings Rise 118% in February 2024
------------------------------------------------------------
Monitor Daily reports that commercial Chapter 11 bankruptcy filings
climbed 118% year over year in February 2024, with the 822 filings
during the month comparing to the 377 filings in February 2023,
according to Epiq Bankruptcy, a provider of U.S. bankruptcy filing
data. The sizable increase in commercial Chapter 11 filings in
February was spurred by a large number of related filings in two
large commercial Chapter 11 proceedings.
Total February commercial filings increased 48% to 2,546 from the
1,720 commercial filings in February 2023. Small business filings,
captured as Subchapter V elections within Chapter 11, increased 78%
to 213 in February 2024, up from 120 in February 2023.
There were 39,014 total bankruptcy filings in February, a 22%
increase from the February 2023 total of 31,909. February marks 19
consecutive months that total, individual and commercial bankruptcy
filings have registered monthly year-over-year increases.
Individual bankruptcy filings increased 21% in February to 36,468,
up from the February 2023 individual filing total of 30189. There
were 21,158 individual Chapter 7 filings in February, a 25%
increase over the 15,717 filings recorded in February 2023, and
there were 14,871 individual Chapter 13 filings in February, a 9%
increase over the 13,678 filings last February.
February's bankruptcy filing totals also registered an increase
over last month's filings. Commercial Chapter 11s increased 77%
from January's 464 filings. Overall commercial filings increased
20% from the 2,114 filings registered in January. Subchapter V
elections within Chapter 11 increased 22% from the 175 filings in
January. Total bankruptcies increased 7% over January’s 36,618
filings, and consumer bankruptcies edged up 6% over January’s
total of 34,504. Individual Chapter 7s increased 8%, and Chapter
13s increased 3% from January's filings.
"Once again, individual and commercial new bankruptcy filings
increased double digit percentages from both a monthly and annual
perspective," Michael Hunter, vice president of Epiq AACER, said.
"This underscores the continued and anticipated increase towards a
normalization of pre-pandemic volumes for those seeking bankruptcy
protection. We anticipate this momentum of filings to continue this
upward trend."
"Bankruptcy provides a proven path for struggling consumers and
businesses looking for a financial fresh start amid the challenging
economic terrain of inflation, elevated interest rates and tighter
lending terms," Amy Quackenboss, executive director of the American
Bankruptcy Institute, said. "Congressional consideration of
extending or permanently making the expanded eligibility limit of
small businesses electing to file for subchapter V under chapter 11
before it expires in June would maintain greater access to this
reliable path for small businesses to successfully restructure,
reduce liquidations and save jobs."
The debt eligibility limit of $7.5 million for small businesses
looking to elect Subchapter V reorganization under Chapter 11 is
due to sunset back to $2,725,625 in late June. The American
Bankruptcy Institute's Subchapter V task force will present its
final report and recommendations for the limit at the 2024 ABI
Annual Spring Meeting in Washington, D.C., in April. On Dec. 15,
2023, the task force transmitted its preliminary report on the
subject to Congress, with the findings supporting permanently
maintaining the eligibility limit of $7.5 million in aggregate
noncontingent, liquidated debt for small businesses looking to
reorganize under Subchapter V.
[^] BOND PRICING: For the Week from March 25 to 29, 2024
--------------------------------------------------------
Company Ticker Coupon Bid Price Maturity
------- ------ ------ --------- --------
2U Inc TWOU 2.250 47.000 5/1/2025
99 Escrow Issuer Inc NDN 7.500 33.498 1/15/2026
99 Escrow Issuer Inc NDN 7.500 33.498 1/15/2026
99 Escrow Issuer Inc NDN 7.500 33.498 1/15/2026
Acorda Therapeutics Inc ACOR 6.000 56.787 12/1/2024
Allen Media LLC / Allen
Media Co-Issuer Inc ALNMED 10.500 45.362 2/15/2028
Allen Media LLC / Allen
Media Co-Issuer Inc ALNMED 10.500 45.223 2/15/2028
Allen Media LLC / Allen
Media Co-Issuer Inc ALNMED 10.500 45.980 2/15/2028
Amyris Inc AMRS 1.500 3.500 11/15/2026
Anagram Holdings
LLC/Anagram
International Inc AIIAHL 10.000 1.250 8/15/2026
Anagram Holdings
LLC/Anagram
International Inc AIIAHL 10.000 1.250 8/15/2026
Anagram Holdings
LLC/Anagram
International Inc AIIAHL 10.000 1.250 8/15/2026
At Home Group Inc HOME 7.125 30.500 7/15/2029
At Home Group Inc HOME 7.125 29.021 7/15/2029
Audacy Capital Corp CBSR 6.500 3.750 5/1/2027
Audacy Capital Corp CBSR 6.750 3.750 3/31/2029
Audacy Capital Corp CBSR 6.750 3.750 3/31/2029
Azul Secured Finance LLP AZUBBZ 11.500 85.000 5/28/2029
BPZ Resources Inc BPZR 6.500 3.017 3/1/2049
Beasley Mezzanine
Holdings LLC BBGI 8.625 61.455 2/1/2026
Beasley Mezzanine
Holdings LLC BBGI 8.625 61.364 2/1/2026
Biora Therapeutics Inc BIOR 7.250 57.984 12/1/2025
Citigroup Global
Markets Holdings
Inc/United States C 8.300 N/A 5/25/2037
CommScope Inc COMM 8.250 46.490 3/1/2027
CommScope Inc COMM 8.250 46.277 3/1/2027
CommScope Technologies LLC COMM 5.000 38.079 3/15/2027
CommScope Technologies LLC COMM 5.000 38.099 3/15/2027
Cornerstone Chemical Co CRNRCH 10.250 31.000 9/1/2027
Curo Group Holdings Corp CURO 7.500 22.634 8/1/2028
Curo Group Holdings Corp CURO 7.500 27.776 8/1/2028
Curo Group Holdings Corp CURO 7.500 4.976 8/1/2028
Cutera Inc CUTR 2.250 23.750 6/1/2028
Cutera Inc CUTR 4.000 22.250 6/1/2029
Cutera Inc CUTR 2.250 37.362 3/15/2026
DIRECTV Holdings
LLC / DIRECTV
Financing Co Inc DTV 5.150 10.513 3/15/2042
DIRECTV Holdings
LLC / DIRECTV
Financing Co Inc DTV 6.000 12.004 8/15/2040
DIRECTV Holdings
LLC / DIRECTV
Financing Co Inc DTV 6.350 13.403 3/15/2040
DIRECTV Holdings
LLC / DIRECTV
Financing Co Inc DTV 5.150 10.513 3/15/2042
DIRECTV Holdings
LLC / DIRECTV
Financing Co Inc DTV 5.150 10.513 3/15/2042
Danimer Scientific Inc DNMR 3.250 7.250 12/15/2026
Diamond Sports Group LLC DSPORT 5.375 2.875 8/15/2026
Diamond Sports Group LLC DSPORT 6.625 3.000 8/15/2027
Diamond Sports Group LLC DSPORT 5.375 3.250 8/15/2026
Diamond Sports Group LLC DSPORT 5.375 2.875 8/15/2026
Diamond Sports Group LLC DSPORT 6.625 4.700 8/15/2027
Diamond Sports Group LLC DSPORT 5.375 6.000 8/15/2026
Diamond Sports Group LLC DSPORT 5.375 4.875 8/15/2026
Endo Finance LLC /
Endo Finco Inc ENDP 5.375 5.141 1/15/2023
Endo Finance LLC /
Endo Finco Inc ENDP 5.375 5.141 1/15/2023
Energy Conversion
Devices Inc ENER 3.000 0.762 6/15/2013
Enviva Partners LP EVA 6.500 43.500 1/15/2026
Enviva Partners LP EVA 6.500 43.411 1/15/2026
Exela Intermediate LLC
/ Exela Finance Inc EXLINT 11.500 27.500 7/15/2026
Exela Intermediate LLC
/ Exela Finance Inc EXLINT 11.500 13.743 7/15/2026
Federal Farm Credit
Banks Funding Corp FFCB 1.200 99.739 4/3/2024
Federal Home Loan Banks FHLB 4.625 99.802 4/3/2024
Federal Home Loan Banks FHLB 0.300 96.144 4/29/2024
Federal Home Loan Banks FHLB 5.150 58.864 6/28/2024
Federal Home Loan Banks FHLB 1.740 98.707 4/11/2024
First Republic Bank/CA FRCB 4.375 4.012 8/1/2046
First Republic Bank/CA FRCB 4.625 4.868 2/13/2047
FirstEnergy Corp FE 7.375 116.885 11/15/2031
Fisker Inc FSRN 2.500 0.875 9/15/2026
Flexion Therapeutics Inc FLXN 3.375 95.750 5/1/2024
GNC Holdings Inc GNC 1.500 0.841 8/15/2020
Gannett Media Corp GCI 4.750 96.625 4/15/2024
Goodman Networks Inc GOODNT 8.000 5.000 5/11/2022
Goodman Networks Inc GOODNT 8.000 1.000 5/31/2022
Gossamer Bio Inc GOSS 5.000 40.750 6/1/2027
H-Food Holdings
LLC / Hearthside
Finance Co Inc HEFOSO 8.500 3.750 6/1/2026
H-Food Holdings
LLC / Hearthside
Finance Co Inc HEFOSO 8.500 7.000 6/1/2026
Hallmark Financial
Services Inc HALL 6.250 19.382 8/15/2029
Homer City Generation LP HOMCTY 8.734 38.750 10/1/2026
Inseego Corp INSG 3.250 39.000 5/1/2025
Invacare Corp IVC 4.250 1.083 3/15/2026
JPMorgan Chase Bank NA JPM 2.000 87.599 9/10/2031
Jersey Central
Power & Light Co FE 4.700 99.701 4/1/2024
Karyopharm Therapeutics KPTI 3.000 52.900 10/15/2025
Ligado Networks LLC NEWLSQ 15.500 15.500 11/1/2023
Ligado Networks LLC NEWLSQ 15.500 18.250 11/1/2023
Luminar Technologies Inc LAZR 1.250 34.490 12/15/2026
MBIA Insurance Corp MBI 16.836 2.730 1/15/2033
MBIA Insurance Corp MBI 16.836 2.722 1/15/2033
Macy's Retail Holdings LLC M 6.700 94.046 7/15/2034
Macy's Retail Holdings LLC M 6.900 90.390 1/15/2032
Mashantucket Western
Pequot Tribe MASHTU 7.350 48.250 7/1/2026
Morgan Stanley MS 1.800 76.174 8/27/2036
OMX Timber Finance
Investments II LLC OMX 5.540 0.850 1/29/2020
Pacific Premier Bancorp PPBI 4.875 94.107 5/15/2029
Photo Holdings
Merger Sub Inc SFLY 8.500 45.875 10/1/2026
Photo Holdings
Merger Sub Inc SFLY 8.500 45.875 10/1/2026
Polar US Borrower
LLC / Schenectady
International Group SIGRP 6.750 24.000 5/15/2026
Polar US Borrower
LLC / Schenectady
International Group SIGRP 6.750 23.692 5/15/2026
Rackspace Technology
Global Inc RAX 3.500 30.209 2/15/2028
Rackspace Technology
Global Inc RAX 5.375 26.420 12/1/2028
Rackspace Technology
Global Inc RAX 3.500 32.120 2/15/2028
Rackspace Technology
Global Inc RAX 5.375 28.040 12/1/2028
Renco Metals Inc RENCO 11.500 24.875 7/1/2003
Rite Aid Corp RAD 7.500 69.080 7/1/2025
Rite Aid Corp RAD 7.700 3.536 2/15/2027
Rite Aid Corp RAD 7.500 64.371 7/1/2025
Rite Aid Corp RAD 6.875 5.078 12/15/2028
Rite Aid Corp RAD 6.875 5.078 12/15/2028
RumbleON Inc RMBL 6.750 55.997 1/1/2025
SVB Financial Group SIVB 4.000 1.750 N/A
SVB Financial Group SIVB 3.500 64.000 1/29/2025
SVB Financial Group SIVB 4.100 1.750 N/A
SVB Financial Group SIVB 4.250 1.750 N/A
SVB Financial Group SIVB 4.700 1.750 N/A
Shift Technologies Inc SFT 4.750 0.623 5/15/2026
Southern California Edison EIX 6.181 99.930 4/1/2024
Spanish Broadcasting
System Inc SBSAA 9.750 47.805 3/1/2026
Spanish Broadcasting
System Inc SBSAA 9.750 48.037 3/1/2026
Spirit Airlines Inc SAVE 1.000 48.000 5/15/2026
TD Ameritrade Holding LLC AMTD 3.750 99.968 4/1/2024
TerraVia Holdings Inc TVIA 5.000 4.644 10/1/2019
Tricida Inc TCDA 3.500 9.788 5/15/2027
United Bancorp Inc/OH UBCP 6.000 96.591 5/15/2029
United Bancorp Inc/OH UBCP 6.000 96.591 5/15/2029
Veritone Inc VERI 1.750 36.000 11/15/2026
Virgin Galactic Holdings SPCE 2.500 37.250 2/1/2027
Voyager Aviation
Holdings LLC VAHLLC 8.500 16.000 5/9/2026
Voyager Aviation
Holdings LLC VAHLLC 8.500 16.000 5/9/2026
Voyager Aviation
Holdings LLC VAHLLC 8.500 16.000 5/9/2026
WeWork Cos LLC /
WW Co-Obligor Inc WEWORK 5.000 3.000 7/10/2025
WeWork Cos LLC /
WW Co-Obligor Inc WEWORK 5.000 2.121 7/10/2025
WeWork Cos US LLC WEWORK 15.000 10.000 8/15/2027
WeWork Cos US LLC WEWORK 11.000 4.750 8/15/2027
WeWork Cos US LLC WEWORK 15.000 10.817 8/15/2027
WeWork Cos US LLC WEWORK 12.000 2.171 8/15/2027
WeWork Cos US LLC WEWORK 11.000 4.597 8/15/2027
Wesco Aircraft Holdings WAIR 9.000 24.348 11/15/2026
Wesco Aircraft Holdings WAIR 8.500 32.000 11/15/2024
Wesco Aircraft Holdings WAIR 13.125 3.000 11/15/2027
Wesco Aircraft Holdings WAIR 8.500 31.949 11/15/2024
Wesco Aircraft Holdings WAIR 9.000 24.348 11/15/2026
Wesco Aircraft Holdings WAIR 13.125 2.543 11/15/2027
Wheel Pros Inc WHLPRO 6.500 31.500 5/15/2029
Wheel Pros Inc WHLPRO 6.500 30.502 5/15/2029
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
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Each Tuesday edition of the TCR contains a list of companies with
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than a balance sheet solvency test.
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liabilities delivered to nation's bankruptcy courts. The list
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The Sunday TCR delivers securitization rating news from the week
then-ending.
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Point your Web browser to http://TCRresources.bankrupt.com/and use
the e-mail address to which your TCR is delivered to login.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
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Pennsylvania, USA, and Beard Group, Inc., Philadelphia, Pa., USA.
Randy Antoni, Jhonas Dampog, Marites Claro, Joy Agravante,
Rousel Elaine Tumanda, Joel Anthony G. Lopez, Psyche A. Castillon,
Ivy B. Magdadaro, Carlo Fernandez, Christopher G. Patalinghug, and
Peter A. Chapman, Editors.
Copyright 2024. All rights reserved. ISSN: 1520-9474.
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*** End of Transmission ***