/raid1/www/Hosts/bankrupt/TCR_Public/240501.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Wednesday, May 1, 2024, Vol. 28, No. 121
Headlines
3628 GEORGIA: Case Summary & Three Unsecured Creditors
72ND AVENUE PROPERTY: Case Summary & 11 Unsecured Creditors
751 ST. NICHOLAS: Amends Unsecureds & Mortgagee Secured Claims Pay
ANCHORED CARE: Case Summary & Five Unsecured Creditors
ARC OF LIFE: Voluntary Chapter 11 Case Summary
ARNOLD BROTHERS: Case Summary & 10 Unsecured Creditors
ATHLETICA TRAINING: Case Summary & Seven Unsecured Creditors
BELFOR HOLDINGS: Lowers ICR to 'B-' on Preferred Equity Issuance
BIRD GLOBAL: Unsecureds Will Get 1% of Claims in Liquidating Plan
CELSIUS NETWORK: Needs to Arbitrate Rig Developer Dispute
CENTURY ALUMINUM: Moody's Alters Outlook on 'B3' CFR to Positive
CENTURYLINK INC: Invesco Exchange Marks $74.8MM Loan at 27% Off
CHARITY PRIME: Case Summary & Two Unsecured Creditors
CHARLES RIVER: Moody's Affirms 'Ba1' CFR, Outlook Remains Stable
CORNERSTONE BUILDING: Assigns 'B' Rating on New Term Loan B
CORNERSTONE BUILDING: Moody's Alters Outlook on B2 CFR to Negative
CREEKWOOD LEGACY: Unsecureds to Get $30K Dividend over 5 Years
DIGITAL MEDIA: Lowers ICR to 'SD' on Distressed Debt Restructuring
FIRST BRANDS: Moody's Affirms 'B2' CFR & Alters Outlook to Stable
FIRSTBANK PUERTO RICO: Affirms 'BB+' Long-Term ICR, Outlook Stable
FIVEFOLD HOLDINGS: Case Summary & Three Unsecured Creditors
FL RHW ERIE: Unsecureds to Get Share of Income for 5 Years
FORTRESS INTERMEDIATE: Moody's Assigns 'B2' CFR, Outlook Stable
FRIENDS OF DOLPHINS: Splash Car Wash Starts Subchapter V Bankruptcy
FTX GROUP: Auctions More Solana Tokens
FTX TRADING: Plan Exclusivity Period Extended to June 27
HARBOR CUSTOM: Plan Exclusivity Period Extended to July 8
HARVEST MIDSTREAM I: Moody's Rates New Senior Unsecured Notes 'B1'
HARVEST MIDSTREAM: Rates New $500MM Senior Unsecured Notes 'BB-'
INCLAN PAINTING: Unsecureds Will Get 75% of Claims over 60 Months
INFOW LLC: Co. Owes PQPR Holdings Another $6.3 Million
INVITAE CORP: DOJ Opposes Bid to Tap Kirkland & Ellis
JAMBYS INC: Case Summary & 20 Largest Unsecured Creditors
LAMAR ADVERTISING: Moody's Affirms Ba2 CFR, Outlook Remains Stable
LIKEWIZE CORP: Alters Outlook to Stable, Affirms 'B-' ICR
LP PROPERTIES: Starts Subchapter V Bankruptcy Proceeding
LUMEN TECHNOLOGIES: Wants to Slash Its Workforce by Less Than 7%
MAGNOLIA SENIOR: Continued Operations & Sale Proceeds to Fund Plan
MANCHESTER HOUSING: Moody's Ups Rating on Series 2000 Bonds to Ba1
MASDAC LLC: Case Summary & 20 Largest Unsecured Creditors
MCAFEE ENTERPRISE: Invesco Exchange Marks $65.7MM Loan at 40% Off
MOUNTAIN VIEW: Plan Exclusivity Period Extended to July 17
NANOSTRING TECHNOLOGIES: Sold to Bruker at Chapter 11 Auction
NFP HOLDINGS: Withdraws 'B' ICR on Acquisition by Aon PLC
ORION ADVISOR: Affirms 'B-' Issuer Credit Rating, Outlook Stable
PARKCLIFFE DEVELOPMENT: Case Summary & Seven Unsecured Creditors
PARKWAY TRUCKING: Hits Chapter 11 Bankruptcy
PHYSICIAN PARTNERS: Downgrades ICR to 'B-', On Watch Negative
PIZZA PALS: Case Summary & 11 Unsecured Creditors
PUNTO OTTICO: Commences Subchapter V Bankruptcy Proceeding
PURDUE PHARMA: Gets Court Okay for $7.2 Million 5th KEIP
QUEST SOFTWARE: Invesco Exchange Marks $56.1MM Loan at 20% Off
RADIATE HOLDCO: Invesco Exchange Marks $72.2MM Loan at 18% Off
RESIDENTIAL ADVERSITIES: Case Summary & Three Unsecured Creditors
RESTIERI HEALTHCARE: Revenue & Sale Proceeds to Fund Plan
RITE AID: Delays Key Bankruptcy Exit Hearing, Deal to Slash Debt
ROCKVILLE DIOCESE: Claims Rep. Warns of Danger If Ch.11 Tossed
SS&C TECHNOLOGIES: Rates New $2.775BB Senior Secured Loan 'BB+'
STONEX GROUP: Alters Outlook to Positive, Affirms 'BB-' ICR
TEHUM CARE: Bankruptcy Brings Unique Obstacles to Inmates
TERRAFORM LABS: Founder Owes $5.3 Billion After Fraud Verdict
THRASIO HOLDINGS: Unsecureds Will Get 0.06% of Claims in Plan
U.S. ACUTE CARE: Affirms 'B-' ICR on Refinancing, Outlook Stable
UNITI GROUP: Nears $15 Billion Combination Talks With Windstream
US ACUTE CARE: Moody's Rates New $800MM Senior Secured Notes 'B3'
VALEANT PHARMA: Invesco Exchange Marks $45MM Loan at 20% Off
VERICAST CORP: Faces Digital, Print Marketing Unit Sale Pushback
VERMILLION AND SPEAR: Case Summary & Two Unsecured Creditors
VVI HOLDINGS: Case Summary & Three Unsecured Creditors
WEWORK INC: Creditors Seek Negotiations With Possible Buyers
XPLORE INC: Downgrades ICR to 'D' on Missed Interest Payments
YELLOW CORP: Creditor Committee Supports Pension Fund Fight
ZUNIGA 23732: Voluntary Chapter 11 Case Summary
[*] Small-Business Bankruptcy Law Helps Creditors
*********
3628 GEORGIA: Case Summary & Three Unsecured Creditors
------------------------------------------------------
Debtor: 3628 Georgia NW LLC
6108 Neilwood Dr.
Rockville MD 20852
Case No.: 24-00147
Business Description: 3628 Georgia NW LLC is primarily engaged in
renting and leasing real estate properties.
Chapter 11 Petition Date: April 30, 2024
Court: United States Bankruptcy Court
District of Columbia
Judge: Hon. Elizabeth L Gunn
Debtor's Counsel: Daniel Press, Esq.
CHUNG & PRESS, P.C.
6718 Whittier Ave Ste 200
McLean VA 22101
Tel: 703-734-3800
Email: dpress@chung-press.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Richard Balles as managing member.
A full-text copy of the petition containing, among other items, a
list of the Debtor's three unsecured creditors is available for
free at PacerMonitor.com at:
https://www.pacermonitor.com/view/4WI6U4I/3628_Georgia_NW_LLC__dcbke-24-00147__0001.0.pdf?mcid=tGE4TAMA
72ND AVENUE PROPERTY: Case Summary & 11 Unsecured Creditors
-----------------------------------------------------------
Debtor: 72nd Avenue Property, LLC
11740 SW 72nd Avenue
Tigard, OR 97223
Case No.: 24-31211
Business Description: The Debtor owns new luxury apartments
located at 11740 SW 72nd Avenue, Tigard, OR
97223. The subject property is a five-story
mixed-use building located on a 25,634-quare
foot site. The Property has an appraised
value of $17.8 million.
Chapter 11 Petition Date: April 30, 2024
Court: United States Bankruptcy Court
District of Oregon
Judge: Hon. Peter C. Mckittrick
Debtor's Counsel: Theodore J. Piteo, Esq.
MICHAEL D. O'BRIEN & ASSOCIATES, P.C.
12909 SW 68th Parkway, Suite 160
Portland, OR 97223
Tel: 503-786-3800
Fax: 503-272-7796
Email: enc@pdxlegal.com
Total Assets: $17,800,382
Total Liabilities: $14,626,199
The petition was signed by Richard Cassinelli as managing member.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/RMIBDUI/72nd_Avenue_Property_LLC__orbke-24-31211__0001.0.pdf?mcid=tGE4TAMA
List of Debtor's 11 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
1. Hill Architects, P.C. $420,000
c/o President Lloyd Hill
1750 Blankenship
Road, Suite 400
West Linn, OR 97068
2. Commercial Center Secured $143,000
519 SW Park Promissory
Avenue, Suite 217 Note
Portland, OR 97205 Mortgage
Broker Fee
3. Capifi Funding Business Debt $24,000
3323 NE 163rd Street
Suite 401
North Miami Beach,
FL 33160
4. United First, LLC Business Debt $19,000
c/o Manager Boris Musheyev
29999 NE 191st Street
Unit 901
Miami, FL 33180
5. City of Tigard Utility Services $13,390
Utility Billing
13125 SW Hall Blvd
Tigard, OR 97223
6. Dunn Carney Business Debt $6,841
851 SW 6th Avenue,
Suite 1500
Portland, OR 97204
7. Apartments, LLC Business Debt $3,078
1331 L Street, NW
Washington, DC
20005
8. Schindler Elevator Business Debt $2,057
Corporation
13122 Northeast
David Circle, #400
Portland, OR
97230-1706
9. PGE Utility Services $431
7895 SW Mohawk Street
Tualatin, OR 97062
10. Jack's Overhead Business Debt $395
Door, Inc.
PO Box 230368
Tigard, OR
97281-0368
11. Wave Broadband Utility Services $208
Attn: Business Solutions RE
Bankruptcy
3700 Monte Villa Parkway
Bothell, WA 98021
751 ST. NICHOLAS: Amends Unsecureds & Mortgagee Secured Claims Pay
------------------------------------------------------------------
751 St. Nicholas Avenue Realty Corp. submitted a First Amended Plan
of Reorganization.
The Debtor shall undertake to conduct the Sale of the Beck Street
Property.
The Plan proposes to sell the real property located at 767 Beck
Street, Bronx, New York (in which the Debtor holds a 65% interest)
(the "Beck Street Property") and use the proceeds to pay on a
waterfall basis, (1) after payment of the Closing costs and
expenses, the allowed Beck Street Mortgage, including any allowed
real estate taxes and other liens, (2) the Chapter 11
administrative expenses (3) allowed real estate taxes and water and
sewer charges due with respect to the Debtor's other 2 properties
located 751 St. Nicholas Avenue, New York, New York (the "Real
Property") and 109-29 Liverpool, Jamaica, New York (the "Liverpool
Property"), and (4) the balance to be paid to the allowed joint
mortgage claims held by Sanzo et. al. (the "Mortgagee") holding a
first mortgage on the Debtor's Real Property and the Liverpool
Property plus the payment (i) of $7,500 per month at an, in cash
collateral payments, from March 1, 2024 up until the Effective
Date, and (ii) commencing on the Effective Date, $7,500 per month,
on the balance of the allowed mortgage loan, accruing interest at
the rate of 7.75% per annum and becoming due 3 years from the
Effective Date in a balloon installment payment (the "Balloon
Installment Date").
In the event payment is not made in full on Balloon Installment
Date the Debtor shall sell or refinance the Liverpool Property to
pay the balance of the allowed mortgage claim after crediting the
payment in full.
Class 4 consists of the Secured Claim Mortgagee of the Real
Property and the Liverpool Property. Representing the allowed
claims of the Mortgagee of the St. Nicholas Real Property and the
Liverpool Property (Sanzo et. al). The balance to be paid to the
allowed joint mortgage claims held by Sanzo et. al. (the
"Mortgagee") holding a first mortgage on the Debtor's Real Property
and to the Liverpool Property by the payment, (i) of $7,500 per
month in cash collateral payments, from March 1, 2024 up until the
Effective Date, and (ii) commencing on the Effective Date, $7,500
per month, with the allowed mortgage loan, accruing interest at the
rate of 7.75% per annum, and becoming due 3 years from the
Effective Date in a balloon installment payment (the "Balloon
Installment Date"). In the event payment, is not made in full on
Balloon Installment Date the Debtor shall sell or refinance, the
Liverpool Property to pay the balance of the allowed mortgage claim
after crediting the payment in full.
Class 5 consists of Unsecured Claims. Representing the Allowed
claims of the unsecured creditors. The Debtor is not aware of any
unsecured creditors, to the extent that such creditors exist, such
creditor shall, at their election, to be made before Confirmation,
be paid an amount equal to 50% of the principal amount of such
Allowed unsecured claims, on the Effective Date or 100% of their
claims by payment of one tenth of their claims each year for 10
years.
The Plan provides for the Debtor to sell the Beck Street Property,
free and clear of claims which shall attach to the proceeds. The
Purchaser may obtain financing pursuant to a mortgage contingency
subject, in all respects, to the Debtor's agreement, with the
Debtor having full discretion.
A full-text copy of the First Amended Plan dated April 18, 2024 is
available at https://urlcurt.com/u?l=bCmBM4 from PacerMonitor.com
at no charge.
Counsel for the Debtor:
Leo Fox, Esq.
630 Third Avenue – 18th Floor
New York, NY 10017
Tel: (212) 867-9595
Fax: (212) 949-1857
E-mail: leo@leofoxlaw.com
About 751 St. Nicholas Avenue Realty
751 St. Nicholas Avenue Realty Corp. is a New York-based company
primarily engaged in renting and leasing real estate properties.
The Debtor owns (a) a mixed-use property consisting of seven
residential units and one commercial unit at 751 St. Nicholas
Avenue, New York, New York 10031, (b) a three-family property
located at 109-29 Liverpool Street, Jamaica, New York, and (c) a
65% ownership interest in a two-family property located at 767 Beck
Street, Bronx, New York.
751 St. Nicholas filed a Chapter 11 petition (Bankr. S.D.N.Y. Case
No. 23-11688) on Oct. 23, 2023, with $1 million to $10 million in
both assets and liabilities. David Hill, president, signed the
petition.
Judge David S. Jones presides over the case.
Leo Fox, Esq., is the Debtor's legal counsel.
ANCHORED CARE: Case Summary & Five Unsecured Creditors
------------------------------------------------------
Debtor: Anchored Care Residential Services, LLC
1800 N. Meridian Street
Suite 401
Indianapolis IN 46202
Case No.: 24-02245
Business Description: The Debtor is a provider of home health
care services.
Chapter 11 Petition Date: April 30, 2024
Court: United States Bankruptcy Court
Southern District of Indiana
Judge: Hon.James M. Carr
Debtor's Counsel: David Krebs, Esq.
HESTER BAKER KREBS LLC
One Indiana Sq Suite 1330
Indianapolis IN 46204
Tel: 317-833-3030
E-mail: dkrebs@hbkfirm.com
Estimated Assets: $0 to $50,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Delisa Savage a owner/member.
A full-text copy of the petition containing, among other items, a
list of the Debtor's five unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/BVBYSCI/Anchored_Care_Residential_Services__insbke-24-02245__0001.0.pdf?mcid=tGE4TAMA
ARC OF LIFE: Voluntary Chapter 11 Case Summary
----------------------------------------------
Debtor: Arc of Life Family Spinal Care, LLC
26731 Dublin Woods Circle, Suite 2
Bonita Springs, FL 34135
Case No.: 24-00611
Business Description: The Debtor operates a health care business.
Chapter 11 Petition Date: April 30, 2024
Court: United States Bankruptcy Court
Middle District of Florida
Judge: Hon. Caryl E. Delano
Debtor's Counsel: Scott A. Stichter, Esq.
STICHTER, RIEDEL, BLAIN & POSTLER, P.A.
110 E. Madison St.
Suite 200
Tampa, FL 33602
Tel: (813) 229-0144
Email: sstichter@srbp.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $500,000 to $1 million
The petition was signed by Drew-Montez Clark as 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/QS3XBZA/Arc_of_Life_Family_Spinal_Care__flmbke-24-00611__0001.0.pdf?mcid=tGE4TAMA
ARNOLD BROTHERS: Case Summary & 10 Unsecured Creditors
------------------------------------------------------
Debtor: Arnold Brothers Forest Products, Inc.
1586 N. 4060 Rd
Boswell, OK 74727
Case No.: 24-80318
Chapter 11 Petition Date: April 30, 2024
Court: United States Bankruptcy Court
Eastern District of Oklahoma
Judge: Hon. Paul R. Thomas
Debtor's Counsel: Jeffery Barclay Potts, Esq.
JEFF POTTS
1320 N Mill
Muskogee, OK 74401
Tel: (918) 687-7755
Fax: (918) 681-3939
Email: jeffpottslawoffice@yahoo.com
Estimated Assets: $0 to $50,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by James Belcher as president.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 10 unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/R3TMBRI/Arnold_Brothers_Forest_Products__okebke-24-80318__0001.0.pdf?mcid=tGE4TAMA
ATHLETICA TRAINING: Case Summary & Seven Unsecured Creditors
------------------------------------------------------------
Debtor: Athletica Training Limited Liability Company
DBA Altus-HPO
808 Liberty Ave., Suite 3
Pittsburgh, PA 15222
Chapter 11 Petition Date: April 29, 2024
Court: United States Bankruptcy Court
Western District of Pennsylvania
Case No.: 24-21032
Debtor's Counsel: David Z. Valencik, Esq.
CALAIARO VALENCIK
938 Penn Avenue, 5th Fl.
Suite 501
Pittsburgh, PA 15222
Tel: 412-232-0930
Fax: 412-232-3858
Email: dvalencik@c-vlaw.com
Estimated Assets: $100,000 to $500,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by John Rossmiller as authorized
representative of the Debtor.
A full-text copy of the petition containing, among other items, a
list of the Debtor's seven unsecured creditors is available for
free at PacerMonitor.com at:
https://www.pacermonitor.com/view/FKQRJVY/Athletica_Training_Limited_Liability__pawbke-24-21032__0001.0.pdf?mcid=tGE4TAMA
BELFOR HOLDINGS: Lowers ICR to 'B-' on Preferred Equity Issuance
----------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on Birmingham,
Mich.-based disaster recovery services provider Belfor Holdings
Inc. (Belfor) to 'B-' from 'B'. S&P also lowered its issue-level
ratings on the company's first-lien debt to 'B-' from 'B'. The
recovery ratings are unchanged.
The stable outlook reflects our expectation of steady organic
growth augmented by tuck-in acquisitions and stable EBITDA margins
in the low-double-digit percent area. We forecast Belfor's leverage
will be in the 9x area in 2024 and 2025.
Belfor's parent issued $600 million of senior nonconvertible
preferred equity to a third-party investor.
S&P said, "The downgrade reflects very high leverage as a result of
new preferred equity that we view as a debt-like obligation.
Belfor's parent company issued $600 million of senior
nonconvertible preferred equity to fund a dividend to its financial
sponsor owner American Securities. We include the hybrid instrument
as part of our adjusted-debt calculation because, in our view, the
security lacks permanence given the effective maturity date derived
from mandatory put rights on the seventh anniversary of the
investment, the accrual of a high coupon rate discourages deferral,
the presence of material step-up clauses, and the optional
redemption rights all point to the issuer's intent to replace the
instrument in the long term."
Simultaneously, Belfor reduced its outstanding $1.5 billion term
loan by $75 million using cash on the balance sheet.
S&P said, "Pro forma for the transaction, we forecast S&P Global
Ratings-adjusted debt to EBITDA of 9.2x in 2024, (6.5x excluding
the preferred equity) from 5.5x as of Dec. 31, 2023. We estimate
Belfor's future pace of deleveraging may slow down because of the
payment-in-kind (PIK) coupon feature of the preferred equity
instrument which will result in elevated adjusted debt balances.
"Belfor's operating trends remain stable despite our expectations
for revenue to decline in 2024. The company benefitted from
outsized, weather-related revenue in 2023(largely tied to multiple
hurricanes in 2021 and 2022) with top line growth of nearly 25% and
EBITDA margin expansion of nearly 140 basis points (bps) year over
year given the elevated high-margin business. This coincided with
higher working capital needs, which muted free operating cash flow
(FOCF) generation during completion of its projects.
"Previously, we did not include hurricane-related revenue in our
forecasts because it depends on the frequency and magnitude of
unpredictable weather. However, for the last several years, the
company has generated nearly 5%-15% of EBITDA from hurricane
damage. As a result, we now include some hurricane revenue in our
forecast. Nevertheless, there is volatility year to year. As such,
we forecast a sizeable decline in one-time related revenue in 2024
and expect the core business to expand in the low-single digits
through higher job counts and favorable pricing trends. This
results in a mid-single-digit decline in revenue for 2024 and
low-single-digit growth in 2025. We also anticipate a meaningful
unwind of working capital in 2024 from the investments in the prior
year, which will result in FOCF/debt improving to the
mid-single-digit area in 2024, declining to the normalized,
low-single-digit area in 2025.
"The stable outlook reflects our expectation of steady organic
growth augmented by tuck-in acquisitions and stable EBITDA margins
in the low-double-digit percent area over the next two years. We
forecast Belfor's leverage will be in the 9x area in 2024 and
2025."
BIRD GLOBAL: Unsecureds Will Get 1% of Claims in Liquidating Plan
-----------------------------------------------------------------
Bird Global, Inc., and its affiliates filed with the U.S.
Bankruptcy Court for the Southern District of Florida a Disclosure
Statement for Joint Chapter 11 Plan of Liquidation dated April 18,
2024.
Prior to the sale of substantially all of the Debtors' assets, the
Debtors were a micromobility company that was committed to
providing affordable, environmentally friendly on-demand
transportation solutions to communities across the world.
The Debtors are defendants in over 100 lawsuits, most of which
relate to personal injury claims relating to riders' accidents
while riding Bird scooters. Due to the filing of the Debtors'
Chapter 11 Cases, the extension of the automatic stay and issuance
of preliminary injunctive relief issued by the Bankruptcy Court in
a related adversary proceeding commenced by the Debtors, these
litigation expenses have been significantly reduced, but not
eliminated.
On March 8, 2024, the Bankrupt Court entered the Order (I)
Authorizing and Approving (A) The Sale of Substantially All of The
Debtors' Assets Free And Clear of All Liens, Claims, And
Encumbrances and (B) The Assumption And Assignment of Certain
Executory Contracts And Unexpired Leases In Connection Therewith,
And (II) Granting Related Relief (the "Sale Order") authorizing the
sale of substantially all of the Debtors' assets to Bird Rides
Acquisition Corp. and its designee(s) (the "Purchaser"). The
transactions contemplated by the Sale Order and the Stalking Horse
Bid Agreement closed on March 22, 2024 and the Debtors have
discontinued substantially all of their operations.
In general, the Plan provides for the appointment of a Liquidating
Trustee and the Tort Claims Trustee (solely for purposes of
administering the Tort Claims Trust) from and after the Effective
Date. The Liquidating Trustee will carry out and implement the
provisions of the Plan that do not address, classify or treat Class
6 Tort Claims.
The Plan also provides for: (1) the Settling Insurers and the
Purchaser to contribute the Insurance Settlement Proceeds to Tort
Claims Trust for the benefit of Tort Claimants; (2) the appointment
of the Tort Claims Trustee, as well as a Tort Claims Administrator
who will administer and analyze, assign relative values to, and
allocate Trust Assets to Holders of Tort Claims pursuant to the
Tort Claim ADR Procedures. The Debtors believe that the Plan will
allow for a prompt resolution of the Debtors' Chapter 11 Cases and
will achieve the best possible result for all creditors and holders
of interests, including all Holders of General Unsecured Claims and
Tort Claims.
Class 5 consists of General Unsecured Claims. Except to the extent
that a holder of an Allowed General Unsecured Claim has been paid
by the Debtors prior to the Effective Date or agrees to a less
favorable classification or treatment of such claim, each holder of
an Allowed General Unsecured Claim shall receive subject to and in
accordance with the Distribution Waterfall (x) 50% of the Talon
Proceeds, if any, until the Allowed Senior DIP Deficiency Claim is
paid in full, then 100% of any additional Talon Proceeds, plus (y)
its Pro Rata share of the proceeds of remaining Liquidating Trust
Assets (net of expenses) other than Talon Proceeds.
The distributions shall be made on the later of (i) the Effective
Date or as soon as practicable thereafter, (ii) the date such
General Unsecured Claim becomes Allowed or as soon as practicable
thereafter, and (iii) the date such Allowed General Unsecured Claim
is payable under applicable nonbankruptcy law; provided, however,
that neither the Debtors nor the Liquidating Trustee shall pay any
premium, interest or penalty in connection with such Allowed
General Unsecured Claim. The allowed unsecured claims total
$600,535,813.83. This Class will receive a distribution of 1% or
greater depending upon the results of claims reconciliation and
monetization of Excluded Assets.
Class 6 consists of the Tort Claims. The Plan establishes the Tort
Claims Trust for the benefit of Holders of Allowed Tort Claims,
which claims are and shall be channeled to the Tort Claims Trust
pursuant to Section 13.6 of the Plan. Each holder of a Tort Claim
shall receive, in full satisfaction, settlement, release and
discharge of and in exchange for its claim against the Debtors or
any of the Released Parties, a Distribution of the Tort Claims
Trust Assets by the Tort Claims Trustee, in accordance with the
Plan, the Tort Claims Trust Agreement and the Tort Claim ADR
Procedures.
The Holders of Equity Interest shall not receive nor retain any
property under the Plan. Class 8 Equity Interests shall be
extinguished as of the Effective Date of the Plan.
The Plan is a joint chapter 11 plan for each of the Debtors, with
the Plan for each Debtor being non-severable and mutually dependent
on the Plan for each other Debtor. In consideration for the
classification, Distributions, releases, and other benefits
provided under the Plan, on the Effective Date, the provisions of
the Plan shall constitute a good-faith compromise and settlement of
all Claims, Interests, Causes of Action and controversies resolved
pursuant to the Plan.
The Plan will be implemented through receipt of (a) the Plan Cash
which shall be used by the Liquidating Trustee to begin the
administration of the Plan; (b) the Priority Claims Reserve which
shall be used to make Distributions to the holders of Allowed
Priority Claims; (c) the remaining Additional DIP Funding; (d)
proceeds of the Talon Claim and Excluded Assets which shall be used
to make Distributions to the Holders of Allowed Claims in Classes
2, 3, 4, 5 and 7, as provided in the Plan; and (e) proceeds of the
Insurance Settlement Agreement which shall be used to fund the Tort
Claims Trust for the benefit of Holders of Allowed Claims in Class
6.
A full-text copy of the Disclosure Statement dated April 18, 2024
is available at https://urlcurt.com/u?l=fz9H04 from
PacerMonitor.com at no charge.
The Debtors' Counsel:
Paul Steven Singerman, Esq.
Jordi Guso, Esq.
Clay B. Roberts, Esq.
BERGER SINGERMAN LLP
1450 Brickell Avenue, Ste. 1900
Miami, FL 33131
Tel: (305) 755-9500
Fax: (305) 714-4340
Email: singerman@bergersingerman.com
jguso@bergersingerman.com
croberts@bergersingerman.com
About Bird Global
Bird Global, Inc., a micro-mobility operator, is an electric
vehicle company dedicated to bringing affordable, environmentally
friendly transportation solutions such as e-scooters and e-bikes to
communities across the world. The company is based in Miami, Fla.
Bird Global and its affiliates sought protection under Chapter 11
of the U.S. Bankruptcy Code (Bankr. S.D. Fla. Lead Case No.
23-20514) on December 20, 2023. In the petition signed by its chief
restructuring officer, Christopher Rankin, Bird Global disclosed up
to $500 million in both assets and liabilities.
Judge Laurel M. Isicoff oversees the cases.
Paul Steven Singerman, Esq., Jordi Guso, Esq., and Clay B. Roberts,
Esq., at Berger Singerman LLP, represent the Debtors as legal
counsel. Teneo Capital LLC is the Debtors' restructuring advisor.
Epiq Corporate Restructuring, LLC serves as notice and claims
agent.
The Senior DIP Parties and Prepetition First Lien Parties, led by
MidCap Financial Trust, are represented by Latham & Watkins LLP
(James Ktsanes; John Lister; Hugh Murtagh).
Covington & Burling LLP (Ronald A. Hewitt) represents the Junior
DIP Agent, U.S. Bank. Venable LLP (Paul J. Battista) advises the
Junior DIP Lenders and Participating Second Lien Parties.
On January 5, 2024, the U.S. Trustee for Region 21 appointed an
official committee of unsecured creditors in these Chapter 11
cases. The committee tapped Fox Rothschild, LLP as legal counsel
and Berkeley Research Group, LLC as financial advisor.
CELSIUS NETWORK: Needs to Arbitrate Rig Developer Dispute
---------------------------------------------------------
Evan Ochsner of Bloomberg Law reports that Celsius Mining must
arbitrate a dispute with a crypto mining facility rather than
litigate the issue through its bankruptcy, a district court ruled.
Judge Colleen McMahon of the US District Court for the Southern
District of New York paused Celsius' suit against mining developer
Luna Squares LLC as the parties take part in arbitration. Her
Monday, April 22, 2024, ruling vacated a February opinion from
Chief Judge Martin Glenn of the US Bankruptcy Court for the
Southern District of New York. Glenn ordered the parties to
arbitrate only some claims.
About Celsius Network
Celsius Network LLC -- http://www.celsius.network/-- is a
financial services company that generates revenue through
cryptocurrency trading, lending, and borrowing, as well as by
engaging in proprietary trading.
Crypto lenders such as Celsius boomed during the COVID-19
pandemic,
drawing depositors with high interest rates and easy access to
loans rarely offered by traditional banks. But the lenders'
business model came under scrutiny after a sharp sell-off in the
crypto market spurred by the collapse of major tokens terraUSD and
luna in May 2022.
New Jersey-based Celsius froze withdrawals in June 2022, citing
"extreme" market conditions, cutting off access to savings for
individual investors and sending tremors through the crypto
market.
The list of major crypto firms that have filed for bankruptcy
protection in 2022 now includes Celsius Network, Three Arrows
Capital and Voyager Digital.
Celsius Network, LLC and its subsidiaries sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Lead Case
No. 22-10964) on July 14, 2022. In the petition filed by CEO Alex
Mashinsky, the Debtors estimated assets and liabilities between $1
billion and $10 billion.
The Debtors tapped Kirkland & Ellis, LLP as bankruptcy counsel;
Fischer (FBC & Co.) as special counsel; Centerview Partners, LLC
as
investment banker; and Alvarez & Marsal North America, LLC, as
financial advisor. Stretto is the claims agent and administrative
advisor.
On July 27, 2022, the U.S. Trustee appointed an official committee
of unsecured creditors. The committee tapped White & Case, LLP, as
its bankruptcy counsel; Elementus Inc. as its blockchain forensics
advisor; M3 Advisory Partners, LP as its financial advisor; and
Perella Weinberg Partners, LP as its investment banker.
Shoba Pillay, Esq., is the examiner appointed in the Debtors'
Chapter 11 cases. Jenner & Block, LLP, and Huron Consulting
Services, LLC, serve as the examiner's legal counsel and financial
advisor, respectively.
CENTURY ALUMINUM: Moody's Alters Outlook on 'B3' CFR to Positive
----------------------------------------------------------------
Moody's Ratings changed Century Aluminum Company's outlook to
positive from stable and affirmed all ratings including the
company's B3 corporate family rating, B3-PD probability of default
rating and the Caa1 rating on the senior secured notes. Moody's
upgraded the company's Speculative Grade Liquidity Rating to SGL-2
from SGL-3.
"The outlook change to positive reflects Moody's expectation that
Century Aluminum's operating performance, cash flows and credit
metrics will materially strengthen over the next 12-18 months
driven by the benefit of tax credits, improved product pricing and
lower energy and raw material costs," said Michael Corelli, Senior
Vice President at Moody's.
RATINGS RATIONALE
Century Aluminum's B3 corporate family rating reflects its modest
scale versus other global aluminum producers, its relatively
high-cost position and exposure to volatile global aluminum prices
and market fundamentals. The high sensitivity of Century's earnings
and cash flows to incremental changes in aluminum prices, along
with periodic operational issues, have led to wide fluctuations in
its operating performance, cash flows and credit metrics. The
credit profile also considers the stability of the company's
offtake arrangements, with most of its volumes under contract with
Glencore plc (Baa1, positive), which owns 42.9% of Century's
outstanding common stock. The credit profile also reflects the ESG
risks faced by primary aluminum producers. These risk exposures are
somewhat tempered by the growing share of low-carbon aluminum
products in the company's portfolio and aluminum's role in
lightweighting and carbon transition investments such as electric
vehicles and renewable energy infrastructure.
Century's operating performance materially improved in 2023 due to
the recognition of a $59.3 million tax credit which was established
for domestic producers of critical minerals and renewable energy
components under Section 45x of the Inflation Reduction Act. This
more than offset relatively weak demand and product pricing as
adjusted EBITDA rose to $132 million from $84 million in 2022.
Century's 2024 operating performance will be aided by the
completion of the Iceland casthouse project and the subsequent
reduction in capital spending. The new 150kt capacity Grundartangi
casthouse will produce low-carbon aluminum and expand primary
foundry alloy capacity by 60kt and will enable the company to
replace standard-grade ingot production with higher value-added
green aluminum products. The company will also continue to benefit
from this tax credit in 2024 along with lower energy and raw
material costs and higher aluminum prices, which have firmed due to
somewhat improved aluminum demand along with the announcement of
new sanctions on Russian aluminum. These sanctions include banning
US imports of Russian aluminum, prohibiting any US person from
providing warranting services for that metal on a global exchange
and providing services to acquire covered Russian metal as part of
the physical settlement of a derivative contract. The UK government
introduced similar sanctions on Russian metal leading the London
Metal Exchange to impose an immediate ban on the warranting of
Russian-origin metals and suspending placement of Russian metal
produced on or after April 13 in LME-listed warehouses globally. It
is possible that a portion of the recent price surge is not
sustained as Russian metal is sold to other regions and leads to
modified trade flows, but not less global aluminum supply.
Nevertheless, Moody's anticipates Century's operating results will
materially strengthen beginning in 2H24 and full year adjusted
EBITDA should easily exceed the $132 million generated in 2023 as
the company's product prices rise on a lagged basis. This
projection assumes an LME price of about $2,500 per metric ton for
the remainder of this year, relatively stable regional premiums,
lower energy and raw material costs and no operational issues.
Operating results will remain volatile as each $100 per metric ton
change in the LME price impacts full year adjusted EBITDA by about
$46 million. It is possible that operating earnings could increase
by an additional $50 million - $55 million if the US Treasury
determines that direct costs including raw material purchases
qualify for the 45x tax credit in addition to the currently
approved indirect costs.
Century is expected to produce its strongest level of free cash
flow in the past decade. Moody's anticipates the company will use a
portion of that cash to pay off its $23.7 million of revolver
borrowings. This will result in credit metrics that are somewhat
strong for the rating. If the company produces adjusted EBITDA of
$180 million then its adjusted leverage ratio (debt/EBITDA) will
decline to about 3.0x and interest coverage (EBIT/Interest) will
rise to around 1.5x. The company may also build up its cash balance
in case it decides to pursue an investment in a domestic aluminum
smelter. The company was selected by the US Department of Energy
Office of Clean Energy Demonstrations to begin award negotiations
for up to $500 million in Bipartisan Infrastructure Law and
Inflation Reduction Act funding to build a new green aluminum
smelter as part of the Industrial Demonstrations Program. The
government grant will only cover a portion of this potential
investment. Moody's will evaluate the impact of this project on the
company's credit profile when/if it announces that it is definitely
moving forward and how it will be funded.
Century's SGL-2 speculative grade liquidity rating considers the
company's good liquidity of about $312 million supported by a cash
balance of $88.8 million as of December 2023 and availability of
about $223 million under several credit facilities, including about
$143.7 million available in aggregate under the US and Iceland
revolving credit facilities and $80 million on the $90 million
Vlissingen credit facility with Glencore. Additionally, Century has
a $130 million facility to fund the casthouse project at
Grundartangi with $104.3 million outstanding as of December 2023.
This facility will mature in 2029 and is secured by a $430 million
general bond, collateralized by the Iceland smelter PP&E. Quarterly
payments equivalent to 1.739% of the principal amount will commence
in July 2024. The $250 million U.S. ABL facility has a springing
financial covenant that requires the company to maintain a fixed
charge coverage ratio of at least 1x when availability is less than
or equal to $25 million or 10% of the borrowing base but not less
than $17.85 million ($43.7 million available as of December 2023).
The Casthouse facility is subject to covenants that include a
minimum equity ratio requirement. Century was in compliance with
all covenants as of 2023 year-end.
The Caa1 rating on the $250 million senior secured notes reflects
their weaker position in the capital structure behind the company's
$250 million US and $100 million Iceland revolving credit
facilities (both unrated). The secured notes benefit from a second
priority lien on all domestic assets, stock of domestic
subsidiaries, and 100% of stock of foreign subsidiaries. Because
the company does not currently have domestic first lien funded debt
other than the ABL, the secured notes effectively have a first lien
claim on the domestic assets not pledged to the ABL. The Company
also has $86.3 million of convertible notes (not rated) due 2028
that are effectively junior to the secured debt. The notes are not
redeemable until after May 6, 2025.
The positive ratings outlook reflects Moody's expectation for
improved operating results and cash flows that will result in near
term metrics that are somewhat strong for the rating.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
An upgrade of Century's ratings could be considered if the company
reduces its debt level so that it can better withstand volatility
in aluminum prices during economic downturns, or if it sustains an
improved level of earnings and cash flows and demonstrates
operational consistency, and provides more clarity on the potential
green smelter investment. Quantitatively, the ratings could be
upgraded if the company sustains through various aluminum price
cycles an EBIT margin of at least 6%, interest coverage
(EBIT/interest) of 3.0x and a leverage ratio (debt/EBITDA) below
4.5x.
The ratings could be downgraded if EBIT margins are sustained below
2%, interest coverage at less than 1.5x and leverage above 5.5x, or
if liquidity meaningfully deteriorates.
Headquartered in Chicago, Illinois, Century is a primary aluminum
producer in North America and Iceland with ownership interests in
four aluminum production facilities. The company also produces
carbon anodes at its Century Vlissingen facility in the Netherlands
and has a 55% ownership interest in a joint venture that owns the
Jamalco bauxite mining operation and alumina refinery in Jamaica.
Revenues for the twelve months ended December 31, 2023, were about
$2.2 billion. Glencore plc and its affiliates own 42.9% of
Century's outstanding common stock.
The principal methodology used in these ratings was Steel published
in November 2021.
CENTURYLINK INC: Invesco Exchange Marks $74.8MM Loan at 27% Off
---------------------------------------------------------------
Invesco Exchange-Traded Fund Trust II has marked its $74,805,000
loan extended to CenturyLink, Inc to market at $54,782,851 or 73%
of the outstanding amount, as of February 29, 2024, according to a
disclosure contained in Invesco Exchange's Form N-CSR for the
Fiscal year ended February 29, 2024, filed with the Securities and
Exchange Commission on April 25, 2024.
Invesco Exchange is a participant in a Term Loan B to CenturyLink,
Inc. The loan accrues interest at a rate of 7.69% (1 mo. SOFR +
2.36%) per annum. The loan matures on March 15, 2027.
Invesco Exchange was organized as a Massachusetts business trust
and is authorized to have multiple series of portfolios, an
open-end management investment company registered under the
Investment Company Act of 1940, as amended.
Invesco Exchange's fiscal year end August 31.
Invesco Exchange is led by Brian Hartigan, President; and Kelli
Gallegos, Treasurer. The fund can be reach through:
Invesco Exchange-Traded Fund Trust II
3500 Lacey Road
Downers Grove, IL 60515
Tel: (800) 983-0903
CenturyLink, Inc, headquartered in Monroe, Louisiana, is an
integrated communications company that provides an array of
communications services to residential, business, governmental and
wholesale customers.
CHARITY PRIME: Case Summary & Two Unsecured Creditors
-----------------------------------------------------
Debtor: Charity Prime Realty, Inc.
1130 S Norton Ave
Los Angeles, CA 90019-3302
Case No.: 24-13284
Business Description: The Debtor owns four rental properties all
located in California having a total
comparable sale value of $6.8 million.
Chapter 11 Petition Date: April 29, 2024
Court: United States Bankruptcy Court
Central District of California
Judge: Hon. Sandra R. Klein
Debtor's Counsel: Onyinye N. Anyama, Esq.
ANYAMA LAW FIRM, APC
18000 Studebaker Rd.
Suite 325
Cerritos, CA 90703
Tel: (562) 645-4500
Fax: (562) 645-4494
Email: info@anyamalaw.com
Total Assets: $6,800,000
Total Liabilities: $4,422,000
The petition was signed by Jenero Jefferson as manager.
A full-text copy of the petition containing, among other items, a
list of the Debtor's two unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/6LNPRDI/Charity_Prime_Realty_Inc__cacbke-24-13284__0001.0.pdf?mcid=tGE4TAMA
CHARLES RIVER: Moody's Affirms 'Ba1' CFR, Outlook Remains Stable
----------------------------------------------------------------
Moody's Ratings affirmed the ratings of Charles River Laboratories
International Inc. The affirmed ratings include the Ba1 Corporate
Family Rating, the Ba1-PD Probability of Default Rating, as well as
the Baa3 senior secured ratings, and the Ba2 senior unsecured
ratings. There is no change to Charles River's SGL-1 Speculative
Grade Liquidity Rating. The outlook remains stable.
The affirmation of the ratings reflects Moody's expectations that
Charles River will benefit from ongoing cost saving efficiencies,
as well as pricing initiatives which lay path to strengthening
profitability margins in 2024. The ratings affirmation also
reflects the company's strong credit metrics bolstered by
meaningful and consistent free cash flows.
The stable outlook reflects Moody's expectation for low
single-digit revenue growth, along with moderate financial leverage
and strong cash flow generation over the next 12-18 months.
RATINGS RATIONALE
Charles River's Ba1 corporate family rating reflects its
competitive position as one of the largest preclinical contract
research organizations (CROs), and its good business diversity
across geography and clients. Charles River generates strong and
stable free cash and generally maintains moderate financial
leverage which was approximately 3.2x as of December 31, 2023 (on
Moody's adjusted basis). Despite strong operating performance, the
rating is constrained by Moody's expectation that Charles River
will be acquisitive, a governance risk consideration. In addition,
Charles River is vulnerable to reduced R&D budgets of its clients.
For example, a reduction in availability of funding for academic or
biotech research would have a negative impact on Charles River.
Charles River's CIS-3 score indicates that ESG considerations have
a limited impact on the current credit rating with potential for
greater negative impact over time. The credit impact score reflects
social risks (S-4) driven primarily by exposure to demographic and
societal trends, as well as responsible production associated with
adverse attention related to research activities with animals.
Additionally, Charles River has exposure to human capital,
reflecting risks from availability of highly skilled workforce, as
well as the potential impact of any legislation to curb drug price
inflation at its pharmaceutical customer base. Governance risks
reflect the company's moderately aggressive financial policies,
including acquisitive posture, which resulted in increased
financial leverage from time to time.
The SGL-1 Speculative Grade Liquidity Rating reflects Moody's
expectation that Charles River will maintain very good liquidity
over the next 12-18 months. Liquidity is supported by cash of
approximately $277 million as of December 31, 2023, as well as
Moody's expectation that Charles River will generate meaningful
free cash flow of approximately $400 million over the next 12
months. Moody's expects the company's capital expenditures of
approximately $300 million, over the next 12 months. Charles
River's liquidity is further supported by $3 billion revolver that
expires in April 2026. Charles River had roughly $1.1 billion drawn
under the facility as of December 31, 2023.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Moody's could upgrade the ratings if Charles River demonstrates a
commitment to a capital structure reflective of investment grade
profile. Sustained organic revenue growth, consistent positive
earnings along with debt/EBITDA sustained below 3.5 times would
also support a ratings upgrade.
Factors that could lead to a downgrade include slow revenue growth
due to competitive dynamics or pricing pressure, incremental debt,
or prolonged negative earnings and cash flow. Aggressive financial
policy such that debt/EBITDA is sustained above 4.5 times, could
also result in a downgrade.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
Charles River Laboratories International, Inc., ("Charles River")
headquartered in Wilmington, MA, is a preclinical contract research
organization ("CRO"). The company provides discovery and safety
assessment services used in early-stage drug development, as well
as research models (e.g. rodents) for use in scientific research,
and manufacturing support products and services. The company
reported revenue of approximately $4.1 billion for the twelve
months ended December 31, 2023.
CORNERSTONE BUILDING: Assigns 'B' Rating on New Term Loan B
-----------------------------------------------------------
S&P Global Ratings assigned its 'B' issue-level rating and '3'
recovery rating to U.S. building materials provider Cornerstone
Building Brands Inc.'s proposed term loan B due 2028. The '3'
recovery rating indicates its expectation for meaningful (50%-70%;
rounded estimate: 60%) recovery in the event of a payment default.
CORNERSTONE BUILDING: Moody's Alters Outlook on B2 CFR to Negative
------------------------------------------------------------------
Moody's Ratings changed the outlook of Cornerstone Building Brands,
Inc. to negative from stable. Moody's also affirmed Cornerstone's
B2 corporate family rating, B2-PD probability of default rating, B2
senior secured credit facility rating, B2 senior secured notes
rating and the Caa1 senior unsecured notes rating. Concurrently,
Moody's assigned a B2 rating to Cornerstone's proposed $500 million
senior secured term loan B.
The new $500 million term loan will be used to repay outstanding
borrowings on the company's ABL facility (unrated), which was drawn
in the second quarter to finance the acquisition of Harvey Building
Products Corp. (Harvey), a manufacturer of high performing windows
and doors. The new term loan will be pari passu with the company's
existing senior secured debt and will have a springing maturity of
April 2028 (stated maturity of 2031), concurrent with the existing
term loan B. Pro forma for the Harvey financing as well as other
recent acquisitions adjusted debt-to-EBITDA will increase to 5.5x
from 5.3x for the twelve months ended March 31, 2024. Positively,
the company will be extending the maturities on its ABL and cash
flow facilities by five years.
"The outlook change reflects Moody's expectation of increased
leverage and continued weak interest coverage through the end of
2024 as a result of lower volumes within the company's Apertures
and Shelter segments," said Griselda Bisono, Moody's Vice President
– Senior Analyst. Moody's expects adjusted debt to EBITDA will
rise to 5.7x and adjusted EBITA to interest expense will remain
around 1.0x by year-end 2024.
RATINGS RATIONALE
Cornerstone's B2 CFR reflects the company's position as a leading
manufacturer of windows and siding, with a national presence and
expansive portfolio of products and brands in North America.
Moody's expects EBITA margins will decline to about 8% by the end
of 2024 from about 9% at the end of 2023 and then improve to about
10% by the end of 2025. In addition to the previously mentioned
volume assumptions, Moody's forecasts considers the continued
implementation of initiatives to improve operational efficiency and
reduce costs in manufacturing overhead, SG&A and procurement. These
positive factors are offset by exposure to cyclical end markets,
and in particular new construction, as well as the highly
competitive landscape in which Cornerstone operates, which can
result in reduced pricing power.
Moody's expects the company to maintain good liquidity over the
next 18 months, despite negative free cash flow 2024 due to higher
working capital needs and a shareholder distribution of about $230
million made in the first quarter. Moody's assessment of
Cornerstone's liquidity incorporates ample availability on the
company's $1.037 billion ABL and cash flow facilities, no near-term
maturities and plenty of cushion on financial covenants.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if total debt-to-EBITDA approaches
4.75x, adjusted EBITA-to-interest expense is above 3.5x, the
company improves its free cash flow and maintains good liquidity.
An upgrade would also require a demonstrated commitment to modest
leverage.
The ratings could be downgraded if total debt-to-EBITDA is
maintained above 5.75x, adjusted EBITA-to-interest expense is below
2.5x, and the company's operating performance and liquidity
deteriorate.
The principal methodology used in these ratings was Manufacturing
published in September 2021.
Headquartered in Cary, North Carolina, Cornerstone Building Brands,
Inc., is the largest manufacturer of exterior building products for
residential and low-rise non-residential buildings in North
America. Following the going private transaction, Cornerstone
became a privately owned business by Clayton, Dubilier and Rice.
CREEKWOOD LEGACY: Unsecureds to Get $30K Dividend over 5 Years
--------------------------------------------------------------
Creekwood Legacy, Inc., filed with the U.S. Bankruptcy Court for
the Eastern District of Texas a Plan of Reorganization dated April
18, 2024.
The Debtor is a small construction business that faced a decline in
revenue coupled with a large obligation dues and owing to the Texas
State Comptroller. Those events prompted the filing of this
bankruptcy case with the hopes being able to resolve its issues
with the Texas State Comptroller.
The Plan provides for a reorganization and restructuring of the
Debtor's financial obligations.
The Plan provides for a distribution to Creditors in accordance
with the terms of the Plan from the Debtor over the course of 5
years from the Debtor's continued business operations.
Class 3 consists of Non-priority unsecured Claims. Class 3 shall be
deemed to include those Creditor(s) holding an alleged Secured
Claim against Debtor, for which: (y) no collateral exists to secure
the alleged Secured Claim; and/or (z) liens, security interests, or
other encumbrances that are senior in priority to the alleged
Secured Claim exceed the fair market value of the collateral
securing such alleged Secured Claims as of the Petition Date.
Each holder of an Allowed Unsecured Claim in Class 3 shall be paid
by Reorganized Debtor from an unsecured creditor pool, which pool
shall be funded at the rate of $500 per month. Payments from the
unsecured creditor pool shall be paid quarterly, for a period not
to exceed 5 years (20 quarterly payments) and the first quarterly
payment will be due on the 20th day of the first full calendar
month following the last day of the first quarter. The Debtor
estimates the aggregate of all Allowed Class 3 Claims is less than
$1,310,000 based upon Debtor's review of the Court's claim
register, Debtor's bankruptcy schedules, and anticipated Claim
objections.
The Plan provides for a $30,000 dividend to all unsecured creditors
over a period of 5 years, which sum is sufficient to pay all
allowed unsecured claims in full. Debtor contends the Plan provides
for a greater dividend to all creditors than would a liquidation of
assets under chapter 7.
Class 4 consists of the holders of Allowed Interests in the Debtor.
The holder of an Allowed Class 4 Interest shall retain their
interests in the Reorganized Debtor.
A full-text copy of the Plan of Reorganization dated April 18, 2024
is available at https://urlcurt.com/u?l=RFlDyU from
PacerMonitor.com at no charge.
Attorneys for the Debtor:
Robert T. DeMarco, Esq.
Michael S. Mitchell, Esq.
DEMARCO MITCHELL, PLLC
1255 W. 15th Street, 805
Plano, TX 75075
Tel: (972) 578-1400
Fax: (972) 346-6791
Email: robert@demarcomitchell.com
mike@demarcomitchell.com
About Creekwood Legacy, Inc.
Creekwood Legacy, Inc. is a small construction business.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D. Tex. Case No. 24-40133) on January 19,
2024. In the petition signed by Steven Ball, president, the Debtor
disclosed $389,209 in assets and $1,574,935 in liabilities.
Judge Brenda T. Rhoades oversees the case.
Robert T DeMarco, Esq., at DeMarco Mitchell, PLLC, represents the
Debtor as legal counsel.
DIGITAL MEDIA: Lowers ICR to 'SD' on Distressed Debt Restructuring
------------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on Digital
Media Solutions Inc. to 'SD' (selective default) from 'CCC'. At the
same time, S&P lowered its issue-level ratings on its senior
secured revolver and term loan to 'D' from 'CCC'.
Digital Media entered into a second amendment to its credit
agreement, extending the option for the company to convert its cash
interest to payment in kind (PIK) through the first quarter of
2025.
The amendment also created a new incremental $22 million senior
secured tranche A term loan commitment and exchanged $66 million of
original debt principal into a new senior secured tranche B term
loan. It is S&P's understanding that the tranche A and B term loans
will rank ahead in priority over the company's other senior secured
obligations.
S&P said, "We lowered our issuer credit rating on DMS following the
execution of its second amendment to its credit agreement. DMS
announced that the amendment extends the PIK toggle period for its
cash interest payments to March 31, 2025, from June 30, 2024. DMS
has already elected to pay its past two quarters of interest as
PIK, rather than cash. We do not expect the company can meet its
upcoming cash interest obligations and will elect to convert its
remaining 2024 interest payment and first-quarter 2025 interest
payment as PIK given our expectations for negative EBITDA
generation over the next 12 months. We consider this a distressed
debt restructuring and tantamount to default under our criteria
because the timing of cash payments will slow, which we view as
investors receiving less value than originally promised."
The amendment also created a new incremental $22 million senior
secured tranche A term loan commitment and exchanged $66 million of
original debt principal ($44 million of initial term loan principal
and $12 million of revolver principal) held by the tranche A
lenders into a new senior secured tranche B term loan. S&P said,
"We also view the credit amendment as a distressed debt
restructuring, as based on our understanding of the terms, the
initial term loan and revolver lenders now rank junior in priority
to the newly created $22 million tranche A term loan, and the $66
million tranche B Term loan. We do not believe lenders have
received adequate compensation for the terms of the credit
amendment given the company's debt is trading at about 12 cents and
the commitment fee paid for the amendment will be payment in
kind."
S&P said, "We expect to raise the rating back to 'CCC-' in the
coming days. While the credit amendment provides DMS with near-term
financial relief and an ability to conserve cash, we expect DMS'
performance will remain challenged through the rest of 2024 due to
weak macroeconomic conditions driving lower ad spending on its
platform. We also believe the company could enter near-term
liquidation proceedings as, under the terms of the second
amendment, it agreed to promptly commence a strategic review and
marketing process for a sale of all or substantially all of its
assets, subject to certain milestones. We will update our issuer
credit rating on the company and our issue-level ratings on the
affected debt to an appropriate level after we have further
reviewed the capital structure and cash flow prospects for the
company following its recent credit amendment."
FIRST BRANDS: Moody's Affirms 'B2' CFR & Alters Outlook to Stable
-----------------------------------------------------------------
Moody's Ratings affirmed the ratings of First Brands Group, LLC,
including its corporate family rating at B2, probability of default
rating at B2-PD, senior secured first lien debt rating at B1 and
senior secured second lien debt rating at Caa1. The rating outlook
has been changed to stable from positive.
The stable outlook reflects Moody's view that First Brands' will
generate steady revenue and earnings growth, but will maintain an
aggressive financial policy favoring debt funded acquisitions. As a
result, Moody's expects leverage to remain elevated and interest
coverage to be constrained given the company's high debt load.
First Brands has significantly increased its debt burden over the
past year and a half with total funded debt up over 60% to about $5
billion as of March 2024. With all of First Brands' debt exposed to
floating rates, the company's interest coverage (EBITA to interest
expense) is expected to remain below 2x in 2024.
RATINGS RATIONALE
First Brands' ratings reflect its sizeable scale as a predominately
automotive aftermarket parts supplier, good profit margins and
history of fully debt funded acquisitions. First Brands' scale has
been achieved predominately through acquisitions. Several of the
company's acquisitions have been of underperforming assets for
which First Brands undertakes significant cost savings to improve
profitability. Cost savings are typically achieved through
facilities consolidation, product insourcing and procurement
efficiencies. First Brands has a consistent track record
implementing this acquisition strategy, but Moody's believes
integration risks persist as the company expands its product and
geographic scope. In addition, there are recurring, upfront costs
First Brands incurs to enact these ongoing cost saving
initiatives.
Despite First Brands' proclivity for acquisitions, Moody's
favorably views the company's exposure to stable growth in the
automotive aftermarket. First Brands offers several well-known
products, including wipers, filters and brake parts, for routine
repair and maintenance vehicle work. The stability of this product
portfolio supports Moody's expectations the company will generate
at least low single digit organic revenue growth annually.
Inclusive of First Brands' most recent debt raise of $525 million
in March 2024, Moody's estimates pro forma debt/EBITDA to be over
5x as of December 31, 2023. The pro forma leverage calculation
includes various adjustments (such as acquired EBITDA), but does
not give credit for restructuring charges or unrealized cost
savings to First Brands' earnings. Moody's expects debt/EBITDA to
decrease, but likely remain above 4.5x over the next year. The use
of excess cash to fund acquisitions should contribute to some
deleveraging and improved interest coverage into 2025.
First Brands maintains good liquidity supported by a healthy cash
balance. However, the current cash balance is largely the result of
incremental debt raises, and, as previously mentioned, Moody's
believes the company will likely use the balance to fund additional
acquisitions. Further, First Brands' free cash flow is
unpredictable based on ongoing restructuring costs and volatile
working capital swings. Moody's expects First Brands to generate
moderately positive free cash over the next couple of years, which
should comfortably cover the company's required debt amortization.
First Brands finances a portion of its working capital (both
receivables and payables) through off-balance sheet factoring
arrangements. Moody's considers the liquidity risks around these
factored amounts as the company would either need to renegotiate
terms or seek alternative financings in the event its factoring
programs are disrupted.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if First Brands maintains a less
aggressive financial policy of debt funded acquisitions. Further,
the ratings could be upgraded if debt/EBITDA is expected to be
maintained near 4x and EBITA/interest expense exceeds 2.5x. The
ratings could also be upgraded if good liquidity is maintained with
free cash flow to debt in the high single digit range.
The ratings could be downgraded if Moody's anticipates that the
company will not be able to maintain realized cost savings and
expects a material deterioration in EBITA margin. The rating could
also be downgraded if free cash flow approaches breakeven or
debt/EBITDA is sustained above 6x.
The principal methodology used in these ratings was Automotive
Suppliers published in May 2021.
First Brands Group, LLC, headquartered in Cleveland, OH, is a
leading manufacturer and distributor of primarily aftermarket
component parts for the automotive and other industrial equipment
markets. The company's products include wipers, air and oil
filters, water and fuel pumps, brake drums and rotors, spark plugs,
towing and trailering equipment and gas springs.
FIRSTBANK PUERTO RICO: Affirms 'BB+' Long-Term ICR, Outlook Stable
------------------------------------------------------------------
S&P Global Ratings affirmed its 'BB+' long-term issuer credit
rating on FirstBank Puerto Rico. The outlook on the long-term
rating remains stable.
S&P said, "The rating affirmation primarily reflects our view that
FirstBank has maintained relatively stable financial performance
amid tough conditions for regional banks. The bank has maintained
strong capital ratios, better-than-average funding metrics,
consistent profitability, and solid liquidity in recent years. We
expect earnings to remain solid, but upside is limited near term
because we expect some net interest margin pressures as deposits
likely continue to reprice. We also expect higher loan loss
provisions given that nonperforming assets continue to exceed most
other U.S. rated banks'. However, we believe FirstBank is better
reserved compared with most U.S. rated banks, which we view
favorably.
"We believe FirstBank has improved its competitive position and
demonstrated relative business stability and a more conservative
risk appetite. FirstBank is the second-largest bank based in Puerto
Rico, aided by its 2020 acquisition of Banco Santander Puerto Rico
and its holding company, Santander BanCorp., which boosted its
market share across its product segments, particularly
middle-market commercial and small business banking."
However, the bank competes with much larger banks, including the
largest bank in Puerto Rico and has only a modest domestic U.S.
market share.
In addition, revenue diversification still lags peers. The
proportion of noninterest income to total revenue was about 15% in
2023, below the median of 25% for rated U.S. banks.
S&P said, "We expect that the Puerto Rican economy will continue to
benefit from fiscal stimulus, as well as from residual
disbursements of private insurance payments and federal aid related
to Hurricane Maria. However, we view FirstBank's concentration in
Puerto Rico negatively given the U.S. territory's weak economic
growth over the past decade, which has lagged economic growth in
mainland U.S.
"We expect the bank to maintain strong capital and earnings despite
large payouts in recent years,.FirstBank's regulatory capital
ratios are much higher than those of most rated U.S. banks. Parent
holding company First BanCorp.'s common equity Tier 1, Tier 1, and
total risk-based capital ratios were 15.90%, 15.90%, and 18.36%,
respectively, as of March 31, 2024. However, the total payout ratio
has been about 100% or above the last three years, and
risk-weighted capital ratios have declined by over 100 basis points
since year-end 2021. We expect risk-weighted capital ratios to
decline gradually over the next few years on continued capital
returns and moderate loan growth.
"In first-quarter 2024, First BanCorp. repurchased $50 million in
common shares and raised its common-stock dividend by 14% to 16
cents per share. We expect earnings to remain solid, aided by a
relatively high net interest margin and continued expense
discipline.
"We also consider the bank's large unrealized losses on investment
securities and First BanCorp.'s tangible common equity ratio, which
is not meaningfully above the median of U.S. rated banks. That
ratio decreased to 7.59% on March 31, 2024, from 11.54% on Dec. 31,
2020, largely because of unrealized losses on its
available-for-sale securities. The company's investment securities
(approximately $5.5 billion as of March 31, 2024) have low credit
risk, in our opinion, and were primarily invested in
mortgage-backed securities issued by the U.S. government and
government-sponsored enterprises.
"Funding and liquidity ratios remain better than pre-pandemic
levels and stronger than those of most rated U.S. banks. FirstBank
has a diversified deposit franchise, including retail and
commercial customers. Also, as the banking industry in Puerto Rico
has consolidated, the bank has reduced its reliance on wholesale
funding over the past decade, which we view favorably. Excluding
fully collateralized government deposits and FDIC-insured deposits,
uninsured deposits were roughly 28% of total deposits and its
retail-oriented deposit base has very low average account
balances.
"We expect funding ratios to moderate somewhat over the next few
years owing to loan growth, but they should remain better than the
median ratios of rated U.S. banks.
"The stable outlook incorporates our view that in the next 12
months, notwithstanding large payouts, FirstBank will maintain
strong capital ratios. We also expect the bank to remain firmly
profitable and capital ratios to decline modestly over the next few
years.
"We expect nonperforming assets and credit losses will exceed most
mainland U.S. peers'. However, we don't expect FirstBank to
experience a meaningful deterioration in asset quality, absent a
significant economic slowdown, which is not in our base case.
"We could lower the rating in the next 12 months if asset quality
deteriorates more than we expect, if profitability declines
materially, or if funding ratios weaken substantially--none of
which we currently expect. An unexpected change in risk
appetite--for example, a large acquisition, which we think is
unlikely, could also be viewed negatively.
"We could raise the rating if financial performance improves to
levels that we view as consistent with higher-rated U.S. banks.
More specifically, we would view favorably stable funding and
liquidity metrics, and the maintenance of high risk-weighted
capital ratios--including a RAC ratio well above 15%. To consider
an upgrade, we would also assess the company's asset quality
performance and tangible capital position."
FIVEFOLD HOLDINGS: Case Summary & Three Unsecured Creditors
-----------------------------------------------------------
Debtor: Fivefold Holdings LLC
1001 S. Main Street #4513
Kalispell, MT 59901
Business Description: Fivefold Holdings is a Single Asset Real
Estate debtor (as defined in 11 U.S.C.
Section 101(51B)).
Chapter 11 Petition Date: April 29, 2024
Court: United States Bankruptcy Court
District of Montana
Case No.: 24-90082
Debtor's Counsel: Matt Shimanek, Esq.
SHIMANEK LAW PLLC
317 East Spruce Street
Missoula, MT 59802
Tel: 406-544-8049
Email: matt@shimaneklaw.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Jennifer Leonard as managing member.
A full-text copy of the petition containing, among other items, a
list of the Debtor's three unsecured creditors is available for
free at PacerMonitor.com at:
https://www.pacermonitor.com/view/PZGKQQY/FIVEFOLD_HOLDINGS_LLC__mtbke-24-90082__0001.0.pdf?mcid=tGE4TAMA
FL RHW ERIE: Unsecureds to Get Share of Income for 5 Years
----------------------------------------------------------
FL RHW Erie, LLC filed with the U.S. Bankruptcy Court for the
District of Colorado a Subchapter V Plan of Reorganization dated
April 18, 2024.
The Debtor owns and operates Restore Hyper Wellness franchises in
Erie, Colorado and Cherry Hills, Colorado.
The bankruptcy filing was prompted by insufficient revenue to pay
all of the Debtor's operating obligations. During the Chapter 11
Case, the Debtor has continued operations.
Unsecured Claims in the Chapter 11 Case total $1,482,147.30,
although this amount could change if claim objections are filed.
The Plan proposes to pay creditors from operations.
Class 3 consists of the Allowed Claims of unsecured creditors.
Class 3 shall receive all of the Debtor's actual disposable income
for five years after the effective date or until such claims are
paid in full; provided, however, if the Debtor's actual Disposable
Income is less than the following annual Projected Disposable
Income amounts, the Debtor shall distribute a sufficient amount to
the holders of Allowed Class 3 Claims to ensure the claimants
receive not less than the annual Projected Disposable Income:
Year 1: $6,660
Year 2: $34,160
Year 3: $106,928
Year 4: $219,341
Year 5: $263,110
Class 4 consists of the Interests in the Debtor. Upon confirmation
of the Plan, all Interest holders will retain their identical
ownership interests in the Debtor.
A full-text copy of the Subchapter V Plan dated April 18, 2024 is
available at https://urlcurt.com/u?l=jFiJW1 from PacerMonitor.com
at no charge.
Attorneys for the Debtor:
David V. Wadsworth, Esq.
Wadsworth Garber Warner Conrardy, PC
2580 West Main Street, Suite 200
Littleton, CO 80120
Telephone: (303) 296-1999
Facsimile: (303) 296-7600
Email: dwadsworth@wgwc-law.com
About FL RHW Erie
FL RHW Erie, LLC, filed a petition under Chapter 11, Subchapter V
of the Bankruptcy Code (Bankr. D. Colo. Lead Case No. 24-10251) on
Jan. 19, 2024, with $430,984 in assets and $2,162,897 in
liabilities. Daniel Franklin, manager, signed the petition.
Judge Joseph G. Rosania Jr. oversees the case.
David V. Wadsworth, Esq., at Wadsworth Garber Warner Conrardy, PC
serves as the Debtor's legal counsel.
FORTRESS INTERMEDIATE: Moody's Assigns 'B2' CFR, Outlook Stable
---------------------------------------------------------------
Moody's Ratings assigned a B2 Corporate Family Rating and a B2-PD
Probability of Default Rating to Fortress Intermediate 3, Inc.
("Presidio"). Concurrently, Moody's assigned a B2 rating to the
company's proposed senior secured 1st lien term loan B and senior
secured 1st lien revolving credit facility. Net proceeds from the
new issuances, along with new equity, will be used to fund the
purchase of a majority ownership position in Presidio by Clayton
Dubilier & Rice, LLC ("CD&R") from BC Partners LLP (who will retain
a minority stake). The outlook is stable.
Moody's expects additional new secured instruments will be raised
in the near term to completely facilitate the transaction's
financing. The assigned ratings are subject to review of final
documentation and no material change in the terms and conditions as
advised to Moody's. Ratings for the old Presidio Holdings Inc. will
be withdrawn when the rated debt is repaid.
Moody's views the transaction as credit negative, with leverage
(Moody's adjusted) expected to rise by around 200bps from 3.9x in
the December 2023 LTM period to an estimated 5.9x in the fiscal
year ended June 2024 (and from 4.5x to near 6.5x in the same
timeframe if adding estimated outstanding floor plan facility
amount to debt). However, Moody's expects Presidio to de-lever
toward the mid 5x range in the next 12-18 months (although to
around 6x if adding estimated outstanding floor plan facility
amount to debt). This de-leveraging will be supported by a
combination of sales growth driven by rising IT spend and profit
margin expansion driven by mix-shift toward software and services.
RATINGS RATIONALE
Presidio's B2 CFR reflects the company's small scale relative to
competing IT value-added resellers and managed services providers
as well as the challenges of keeping up with evolving requirements
of IT deployments for enterprises. The expectation for Presidio to
remain acquisitive comes with event risk while controlled ownership
continues to constrain the credit profile.
The CFR benefits from favorable industry dynamics including good
demand for IT offerings related to security and ongoing digital
transformations across various industry verticals. Growth has been
supported by good demand from both existing as well as new
customers, and operating performance has shown resilience in prior
recessions. Although leverage will be elevated following the new
LBO, Presidio has a history of deleveraging after debt-funded
transactions. The company has good liquidity despite high interest
expenses given modest capital expenditures and access to $450
million under its revolving credit facility.
Governance is a key driver of the ratings. Presidio's ESG Credit
Impact Score is CIS-4, reflecting primarily its heightened exposure
to governance risk related to its financial strategy & risk
management.
Moody's views Presidio's financial policy to be aggressive
characterized by high financial leverage and private-equity
ownership which will often lead to debt financed acquisitions or
distributions to enhance equity returns. This financial strategy is
most recently evidenced by the debt-funded LBO by CD&R. Lack of
public financial disclosure and the absence of board independence
also contribute to the company's governance profile.
Presidio has good liquidity, supported by around $50 million of
cash at close of the new LBO, full availability under a proposed
$450 million 5-year revolving credit facility and Moody's
expectation of more than $100 million of free cash flow over the
next 12 months (roughly 5% of adjusted debt balances).
Ratings for Presidio's debt instruments reflect the B2-PD
probability of default and an average recovery expectation at
default. The senior secured debt is rated B2, the same as the CFR,
reflecting the proposed all first lien senior secured debt
structure.
The stable outlook reflects Moody's expectation that Presidio will
maintain its market position serving mid-sized business customers,
generate mid-single digit percentage revenue and profit growth, and
balance the allocation of free cash flow among business
investments, acquisitions, and debt repayment. The outlook does not
include debt financed transactions.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Presidio's ratings could be upgraded if the company sustains
debt-to-EBITDA below 4.5x (excluding floor plan facility from
debt), achieves organic revenue growth rates consistent with
industry growth rates, maintains operating margins at current
levels, and sustains free cash flow-to-debt (FCF/debt) above 7.5%.
Presidio's ratings could be downgraded if the company is unable to
grow revenue or EBITDA on an organic basis, debt-to-EBITDA exceeds
6x (excluding floor plan facility from debt) for an extended
period, liquidity weakens, FCF/debt is sustained below 3%, or the
relationship with key suppliers deteriorates.
Fortress Intermediate 3, Inc., headquartered in New York, NY, is a
provider of information technology (IT) solutions focused on
digital infrastructure, cloud, and security for commercial and
public sector clients primarily within North America. The company
also provides professional and managed support services. The
majority of the company's roughly 6,600 clients are mid-size firms
within the health care, government, financial services, education,
and professional services industries. As a result of the
transaction, Presidio will be majority-owned by private equity firm
Clayton Dubilier & Rice LLC.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
FRIENDS OF DOLPHINS: Splash Car Wash Starts Subchapter V Bankruptcy
-------------------------------------------------------------------
Friends of Dolphins Inc. filed for Subchapter V bankruptcy
protection in the Middle District of Florida.
According to court filing, the Debtor reports estimated assets and
liabilities between $1 million and $10 million each owed to 1 and
49 creditors. The petition states funds will be available to
unsecured creditors.
A meeting of creditors under 11 U.S.C. Section 341(a) is slated
for
May 15, 2024, at 10:00 AM at UST-LA3, TELEPHONIC MEETING.
CONFERENCE LINE:866-910-0293, PARTICIPANT CODE:7560574.
About Friends of Dolphins
Friends of Dolphins Inc., doing business as Splash Car Wash, sought
relief under Subchapter V of Chapter 11 of the U.S. Bankruptcy Code
(Bankr. M.D. Fla. Case No. 24-02130) on April 1877, 2024. In the
petition signed by Tazine Roshandli Jaffer, as director, the Debtor
reports estimated assets and liabilities between $1 million and $10
million each.
The Honorable Bankruptcy Judge Roberta A Colton oversees the case.
The Debtor is represented by:
Michael A. Stavros, Esq.
Jennis Morse
113 South Valrico Road
Valrico, FL 33594
FTX GROUP: Auctions More Solana Tokens
--------------------------------------
Olga Kharif of Bloomberg News reports that the bankruptcy estate of
the failed FTX cryptocurrency exchange plans to auction off another
unspecified amount of Solana tokens, according to people familiar
with the sale.
A "blind auction" will be held for the next batch of SOL, according
to two people familiar with the process who asked to remain
anonymous. The auction has a Wednesday deadline and the results
will be announced on Thursday, April 25, 2024, one of the people
said. In a recent monthly operating report, FTX disclosed it sold
about $307.6 million of SOL and ZBC tokens in March. April sales
results haven’t been released yet.
About FTX Group
FTX is the world's second-largest cryptocurrency firm. FTX is a
cryptocurrency exchange built by traders, for traders. FTX offers
innovative products including industry-first derivatives, options,
volatility products and leveraged tokens.
Then CEO and co-founder Sam Bankman-Fried said Nov. 10, 2022, that
FTX paused customer withdrawals after it was hit with roughly $5
billion worth of withdrawal requests.
Faced with liquidity issues, FTX on Nov. 9, 2022, 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. Bankman-Fried 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 TRADING: Plan Exclusivity Period Extended to June 27
--------------------------------------------------------
Judge John T. Dorsey of the U.S. Bankruptcy Court for the District
of Delaware extended Emergent Fidelity Technologies Ltd.'s
exclusive periods to file a chapter 11 plan and solicit acceptances
thereof to June 27 and August 26, 2024, respectively.
As shared by Troubled Company Reporter, the Emergent Debtor is the
owner and was the record holder of approximately 55 million shares
of Robinhood Markets, Inc. that have now been converted to cash
(the "Assets") and are being held by the DOJ pending further
adjudication regarding their ownership and potential claims against
them.
The Emergent Chapter 11 Case continues to require coordination with
many constituencies, not only before this Court, but in several
other chapter 11 and foreign insolvency proceedings. The pace of
the Emergent Debtor's progress is inevitably impacted by the need
to coordinate with, and be responsive to, governmental authorities,
especially in view of the upcoming forfeiture proceedings involving
the Assets.
The Emergent Debtor claims that it continues to investigate,
secure, and recover assets for distribution; this will lead to a
necessary determination of whether reorganization or liquidation is
in the best interests of creditors. Notwithstanding the substantial
progress made to date, the Emergent Debtor continues to develop
information necessary to prepare a disclosure statement and to
consider and propose a chapter 11 plan.
Emergent Fidelity Technologies Ltd., is represented by:
MORGAN, LEWIS & BOCKIUS LLP
Jody C. Barillare, Esq.
1201 N. Market Street, Suite 2201
Wilmington, DE 19801
Telephone: (302) 574-3000
Email: jody.barillare@morganlewis.com
- and -
John C. Goodchild, III, Esq.
Matthew C. Ziegler, Esq.
2222 Market Street
Philadelphia, PA 19103
Telephone: (215) 963-5000
Email: john.goodchild@morganlewis.com
Email: matthew.ziegler@morganlewis.com
- and -
Craig A. Wolfe, Esq.
Joshua Dorchak, Esq.
David K. Shim, Esq.
101 Park Avenue
New York, NY 10178
Telephone: (212) 309-6000
Email: craig.wolfe@morganlewis.com
Email: joshua.dorchak@morganlewis.com
Email: david.shim@morganlewis.com
About FTX
FTX is the world's second-largest cryptocurrency firm. FTX is a
cryptocurrency exchange built by traders, for traders. FTX offers
innovative products including industry-first derivatives, options,
volatility products and leveraged tokens.
Then CEO and co-founder Sam Bankman-Fried said Nov. 10, 2022, that
FTX paused customer withdrawals after it was hit with roughly $5
billion worth of withdrawal requests.
Faced with liquidity issues, FTX on Nov. 9 struck a deal to sell
itself to its giant rival Binance, but Binance walked away from the
deal amid reports on FTX regarding mishandled customer funds and
alleged US agency investigations.
At 4:30 a.m. on Nov. 11, Bankman-Fried ultimately agreed to step
aside, and restructuring vet John J. Ray III was quickly named new
CEO.
FTX Trading Ltd (doing business as FTX.com), West Realm Shires
Services Inc. (doing business as 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. More entities sought Chapter 11 protection on Nov.
14, 2022.
FTX Trading and its affiliates each listed $10 billion to $50
million in assets and liabilities, making FTX the biggest
bankruptcy filer in the US this year. According to Reuters, SBF
shared a document with investors on Nov. 10 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/HomeIndex
The official committee of unsecured creditors tapped Paul Hastings,
LLP as bankruptcy 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.
HARBOR CUSTOM: Plan Exclusivity Period Extended to July 8
---------------------------------------------------------
Judge Mary Jo Heston of the U.S. Bankruptcy Court for the Western
District of Washington extended Harbor Custom Development, Inc.,
and affiliates' exclusive periods to file a plan of reorganization
and obtain acceptance thereof to July 8 and September 9, 2024,
respectively.
As shared by Troubled Company Reporter, the Debtors and its
advisors have expended significant efforts to stabilize and
maintain the Debtors' relationships with their creditor
constituencies, and to respond to their requests for information.
The Debtors' efforts to collaborate with these numerous creditors
necessarily increases the complexity of the case and the time
required to achieve agreement when disputes arise.
The Debtors assert that they have made progress in its negotiations
with creditors, and continue to involve its secured creditors on
matters of common interest, such as the marketing and sales of the
Properties. The Debtors recognize that lien priorities and values
will be an important consideration for secured creditors as they
decide whether to support a sale. The Debtors are also working
closely with their financial advisors and accounting personnel to
maintain the accuracy of the Debtors' financial records, which will
further bolster the prospects of a sale.
The Debtors further assert that the substance of a plan will depend
on their ability to maximize the value of their Properties, and due
to the number of constituents and their desire to achieve consensus
where possible, the Debtors realize that plan negotiations will
likely take additional focus. The Debtors are optimistic that the
process for the competitive sale of the Multi-Family Properties
will take place soon, and the Debtors intend, with the help of its
advisors, to execute its viable Chapter 11 plan.
Attorneys for the Debtors:
Aditi Paranjpye, Esq.
Binah B. Yeung, Esq.
Cairncross & Hempelmann, P.S.
524 2nd Ave, Suite 500
Seattle, WA 98104
Tel: (206) 587-0700
Fax: (206) 587-2308
E-mail: aparanjpye@cairncross.com
E-mail: byeung@cairncross.com
About Harbor Custom Development
Harbor Custom Development, Inc. is a real estate development
company involved in all aspects of the land development cycle,
including land acquisition, entitlement, development, construction
of project infrastructure, home and apartment building
construction, marketing, and sales of various residential projects.
The company is based in Tacoma, Wash.
Harbor Custom Development filed a Chapter 11 petition (Bankr. W.D.
Wash. Case No. 23-42180) on Dec. 11, 2023, with $223,981,000 in
assets and $172,528,500 in liabilities. Shelly Crocker, chief
restructuring officer, signed the petition.
Judge Mary Jo Heston oversees the case.
The Debtor tapped Aditi Paranjpye, Esq., at Cairncross &
Hempelmann, P.S. as bankruptcy counsel; FitzGerald Kreditor Bolduc
Risbrough, LLP as special counsel; Levene, Neale, Bender, Yoo &
Golubchik, LLP and Polsinelli, PC as conflicts counsels;
TurningPointe, LLC as financial advisor; Rosenberg Rich Baker
Berman, P.A. as auditor; Keen-Summit Capital Partners, LLC as real
estate advisor; and VPTax, Inc. as tax accountant.
HARVEST MIDSTREAM I: Moody's Rates New Senior Unsecured Notes 'B1'
------------------------------------------------------------------
Moody's Ratings assigned a B1 rating to Harvest Midstream I, L.P.'s
(Harvest Midstream or the partnership) proposed offering of senior
unsecured notes. Harvest Midstream's existing ratings, including
its Ba3 Corporate Family Rating, Ba3-PD Probability of Default
Rating, existing B1 senior unsecured notes rating, and stable
outlook are unchanged.
The net proceeds from the proposed notes offering are expected to
be primarily used to repay a portion of the outstanding borrowings
under Harvest Midstream's revolver and term loan.
"Harvest Midstream's notes issuance is opportunistically
refinancing existing debt to extend maturities," commented Amol
Joshi, Moody's Vice President – Senior Credit Officer.
RATINGS RATIONALE
The B1 rating on the proposed senior unsecured notes is in line
with Harvest Midstream's existing senior unsecured notes rating.
The new notes will rank equally with its existing notes. The
unsecured notes are rated one notch below the Ba3 CFR reflecting
their junior position in the capital structure to the unrated
secured revolving credit facility and term loan.
Harvest Midstream's Ba3 CFR reflects its moderate scale and
diversified asset portfolio, including its established midstream
operating platform in the San Juan Basin of New Mexico and
Colorado, gathering and transportation operations in Alaska as well
as midstream assets in Louisiana, Texas and North Dakota. The
company generates a largely stable earnings stream, with over 85%
fixed-fee and cost of service revenues, providing a high degree of
certainty to cash flow available for debt service. Harvest
Midstream is expected to fund its capital spending requirements and
distribution payouts through 2024 with operating cash flow. The
company has elevated debt balances since debt-funding its Paradigm
Midstream, LLC acquisition in the second quarter of 2023. However
the company has solid leverage metrics and is expected to gradually
reduce debt with free cash flow over time.
Harvest Midstream is owned and controlled by Hildebrand Enterprises
LP (Hildebrand, unrated). The singular control Mr. Jeffery
Hildebrand has over Hildebrand, including Harvest Midstream, is
also considered in the partnership's credit profile. However,
Harvest Midstream has prospered under Hildebrand's control and
leadership, limiting its use of excessive debt financing. Under the
common ownership of Hildebrand, Harvest Midstream has a strategic
relationship with its affiliate Hilcorp Energy I, L.P. (Hilcorp,
Ba1 stable) for whom it provides midstream services primarily in
support of its Alaska and Four Corners production.
Moody's regards Harvest Midstream as having good liquidity. Harvest
Midstream is expected to continue to generate significant operating
cash flow in 2024 to fully fund its capital expenditures and
distributions. Its $700 million secured revolving credit facility
matures in September 2027 and had $460 million of outstanding
borrowings at December 31. Concurrent with the notes offering,
Harvest Midstream is expected to amend its credit agreement to
increase its revolver to $850 million and reduce the aggregate
remaining principal amount of its outstanding term loan to not more
than $100 million. Moody's expects the partnership to utilize a
portion of its free cash flow to gradually reduce debt balances
over time. The next debt maturity is in September 2026 when its
term loan matures.
The outlook is stable reflecting Moody's expectation that Harvest
Midstream will maintain solid leverage metrics and at least
adequate liquidity while growing its earnings.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
Harvest Midstream rating could be upgraded if debt/EBITDA is
sustained below 3.5x and EBITDA exceeds $500 million with no
additional exposure to commodity price or volume risk. Harvest
Midstream rating could be downgraded if debt/EBITDA exceeds 4.5x,
contract structure erodes materially or Hilcorp is downgraded below
Ba3 CFR.
The principal methodology used in this rating was Midstream Energy
published in February 2022.
Harvest Midstream I, L.P. is engaged in the business of gathering,
processing, treating, transporting, purchasing and selling natural
gas, crude oil and natural gas liquids, whose assets are operated
by its general partner, Harvest Midstream Company, headquartered in
Houston, Texas.
HARVEST MIDSTREAM: Rates New $500MM Senior Unsecured Notes 'BB-'
----------------------------------------------------------------
S&P Global Ratings affirmed its 'BB-' issuer credit rating on
Harvest Midstream I L.P. (Harvest) and assigned its 'BB-'
issue-level rating to its proposed senior unsecured notes with a
recovery rating of '3'. The '3' recovery rating indicates S&P's
expectation of meaningful (50%-70%; rounded estimate: 55%) recovery
in the event of a default.
The stable outlook reflects S&P's expectation that Harvest will
maintain stable volumes across its systems. S&P also expects its
S&P Global Ratings-adjusted debt-to-EBITDA will remain in the
3.75x-4.00x range in 2024.
Harvest intends to issue $500 million senior unsecured notes due
2032 to repay a portion of its existing term loan A (TLA) and
revolving credit facility (RCF). Concurrently, Harvest will upsize
its RCF to $850 million from $700 million. At close, it will have
approximately $745 million of availability on its RCF and
approximately $100 million TLA outstanding.
The proposed transaction extends Harvest's debt maturity profile
and bolsters its liquidity. The partial repayment of the TLA due
2026 and RCF due 2027 will mitigate Harvest's refinancing risk. At
close of the proposed transaction, Harvest will have a longer
weighted average debt maturity with the majority of its debt due in
2028 and 2032. S&P forecasts the company will generate positive
free operating cash flow (FOCF) over the next several years. The
additional RCF availability, coupled with the positive FOCF, will
provide extra financial flexibility for growth initiatives and
upcoming debt maturities.
S&P said, "Our view of Harvest's financial risk is unchanged.
Following the acquisition of Paradigm in May 2023, Harvest's S&P
Global Ratings-adjusted leverage was elevated to around 4x. In our
base-case scenario, we do not expect it will fund additional growth
initiatives through incremental debt or debt-like instruments that
would deteriorate Harvest's credit metrics. We project its S&P
Global Ratings-adjusted leverage will remain below 4x over the next
several years if the company remains disciplined with its capital
spending.
"The stable outlook reflects our expectation that Harvest will
maintain stable volumes across its systems and remain disciplined
with its capital spending. We expect its S&P Global
Ratings-adjusted debt-to-EBITDA to be in the 3.75x-4.00x range in
2024.
"We could consider a negative rating action on Harvest if we
anticipate S&P Global Ratings-adjusted debt-to-EBITDA will approach
4.5x." This could occur if:
-- Harvest generates lower-than-expected volumes and EBITDA;
-- Harvest pursues a more aggressive financial policy than S&P's
current expectations such that it funds growth initiatives through
incremental debt or debt-like instruments; or
-- Hilcorp Energy I L.P. is materially downgraded, given Harvest's
high exposure to its volumes.
S&P could raise its rating on Harvest if S&P anticipates it will
maintain adjusted debt-to-EBITDA below 3.0x.
S&P said, "Environmental factors are a negative consideration in
our credit rating analysis of Harvest. Its gathering and processing
business may face multiple risks related to climate change,
including volume declines and the general energy transition
pressures. While we believe the business concentration in Alaska
and the Four Corners region has its upside, producers are
demonstrating greater capital discipline and could re-allocate
capital to more prolific basins, adversely affecting its underlying
business."
INCLAN PAINTING: Unsecureds Will Get 75% of Claims over 60 Months
-----------------------------------------------------------------
Inclan Painting and Waterproofing Corp. filed with the U.S.
Bankruptcy Court for the Southern District of Florida a Plan of
Reorganization under Subchapter V.
The Debtor is a commercial painter and waterproofing doing
established and business throughout South Florida for more than 20
years.
The Debtor's Plan contemplates payment in full to all creditors
over time. In addition to the resumption of its collection of
accounts receivables the Debtor has begun to obtain new work and
will be able to fund the payments contemplated to its creditors by
this Plan of Reorganization.
This Plan of Reorganization proposes to pay creditors of the Debtor
from its cash flow from operations.
Class 2 consists of creditors that are participants agreed to
accept proceeds of insurance policies applicable to each claim in
this class. This class is unimpaired.
Class 3 consists of Unsecured Creditors. Creditors in this class
will be paid 75% of allowed claims by 60 monthly installments. This
Class is impaired.
Class 4 consists of unsecured administrative convenience claim.
These creditors will receive payment in full in two payments the
first on confirmation of the Plan of Reorganization and a second
payment 90 days thereafter.
Equity security holders will retain their interest in the Debtor.
A full-text copy of the Plan of Reorganization dated April 18, 2024
is available at https://urlcurt.com/u?l=jYTaBd from
PacerMonitor.com at no charge.
Attorney for the Plan Proponent:
Richard Siegmeister, Esq.
RICHARD SIEGMEISTER, PA
3850 Bird Rd, Floor 10
Miami, FL 33146-1501
Tel: (305) 859-7376
Email: rspa111@att.net
About Inclan Painting and Waterproofing
Inclan Painting and Waterproofing Corp. filed a petition under
Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. S.D. Fla.
Case No. 24-10488) on January 19, 2024, with up to $50,000 in
assets and $1 million to $10 million in liabilities. Luis Inclan,
president, signed the petition.
Judge Laurel M. Isicoff oversees the case.
Richard Siegmeister, Esq., at Richard Siegmeister, PA represents
the Debtor as legal counsel.
INFOW LLC: Co. Owes PQPR Holdings Another $6.3 Million
------------------------------------------------------
Randi Love of Bloomberg Law reports that an Alex Jones-related
company that sold dietary supplements he promoted to his Infowars
audience asked a bankruptcy court for a judgment saying that $6.3
million in debt is secured and can't be voided via bankruptcy.
PQPR Holdings Limited LLC on April 19, 2024 sought a partial
summary judgment ruling on the disputed debt from the US Bankruptcy
Court for the Southern District of Texas. The filing comes as
Infowars' parent company, Free Speech Systems LLC, tries to lock in
a bankruptcy exit plan after years of litigation with families of
Sandy Hook Elementary School shooting victims.
About Free Speech Systems
Free Speech Systems LLC is a broadcast media production and
distribution company that provides broadcasting aural programs by
radio to the public. Free Speech Systems is a family-run business
founded by Alex Jones.
FSS is presently engaged in the business of producing and
syndicating Jones' radio and video talk shows and selling products
targeted to Jones' loyal fan base via the Internet. Today, FSS
produces Alex Jones' syndicated news/talk show (The Alex Jones
Show) from Austin, Texas, which airs via the Genesis
Communications
Network on over 100 radio stations across the United States and
via
the internet through websites including Infowars.com.
Due to the content of Alex Jones' shows, Jones and FSS have faced
an all-out ban of Infowars from mainstream online spaces.
Shunning
from financial institutions and banning Jones and FSS from major
tech companies began in 2018.
Conspiracy theorist Alex Jones has been sued by victims' family
members over Jones' lies that the 2012 Sandy Hook Elementary
School
shooting was a hoax.
Jones' InfoW LLC and affiliates, IWHealth, LLC and Prison Planet
TV, LLC, filed petitions under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. S.D. Texas Lead Case No. 22-60020) on
April
18, 2022.
The Debtors agreed to the dismissal of the Chapter 11 cases in
June
2022 after the Sandy Hook victim families dismissed the three
bankrupt companies from their lawsuits.
Free Speech Systems filed a voluntary petition for relief under
Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. S.D.
Tex.
Case No. 22-60043) on July 29, 2022. In the petition filed by W.
Marc Schwartz, as chief restructuring officer, the Debtor reported
assets and liabilities between $50 million and $100 million.
Melissa A Haselden has been appointed as Subchapter V trustee.
Alexander E. Jones filed for personal bankruptcy under Chapter 11
of the Bankruptcy Code (Bankr. S.D. Tex. Case No. 4:22-bk-60043)
on
Dec. 2, 2022, listing $1 million to $10 million in assets against
liabilities of $1 billion to $10 billion in liabilities.
Raymond William Battaglia, of Law Offices of Ray Battaglia, PLLC,
is FSS's counsel. Raymond W. Battaglia and Crowe & Dunlevy, P.C.,
led by Vickie L. Driver, Christina W. Stephenson, Shelby A.
Jordan,
and Antonio Ortiz are representing Alex Jones.
INVITAE CORP: DOJ Opposes Bid to Tap Kirkland & Ellis
-----------------------------------------------------
Evan Ochsner of Bloomberg Law reports that Kirkland & Ellis LLP
can't represent genetic testing company Invitae Corp. in its
Chapter 11 case because the law firm has a significant conflict of
interest, the Justice Department’s bankruptcy watchdog said.
Kirkland represents Invitae's largest secured creditor, Deerfield
Management Company, which holds nearly 80% of Invitae's 2028 senior
secured notes, outside of Invitae’s bankruptcy. Even though
Kirkland represents Deerfield in matters unrelated to Invitae's
case, it's still a conflict of interest, the US Trustee said in a
Monday, April 15, 2024, filing in the US Bankruptcy Court for the
District of New Jersey.
"It appears that K&E is not disinterested and holds an adverse
interest against the estate," the US Trustee said.
Softbank-backed Invitae filed for bankruptcy earlier this year,
2024, as the DNA testing industry struggles to regain investor
interest following a pandemic-era boom. Invitae's market
capitalization rose to more than $10 billion during the Covid-19
pandemic, but it kept losing money.
The US Trustee's objection to Kirkland's employment follows similar
opposition from Invitae's unsecured creditors, who earlier this
month objected to Invitae's proposed employment of Kirkland, the
world's largest law firm by revenue.
The creditors' opposition, as well as the US Trustee's, both
highlight a 2023 transaction that creditors say allowed Deerfield
to vault ahead of others in the bankruptcy repayment order.
"Deerfield appears to be the main beneficiary" of that transaction,
the US Trustee said.
The case is Invitae Corporation, Bankr. D.N.J., No. 24-11362-MBK,
4/15/24.
About Invitae Corp.
Invitae Corporation is a medical genetics company that is in the
business of delivering genetic testing services, digital health
solutions, and health data services that support a lifetime of
patient care and improved outcomes.
Invitae Corp. and five of its affiliates sought relief under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. D.N.J. Lead Case
No.
24-11362) on Feb. 13, 2024. In the petition filed by Ana Schrank,
chief financial officer, disclosed $535,115,000 in assets against
$1,618,519,000 in debt.
Judge Michael B. Kaplan oversees the case.
Kirkland & Ellis LLP and Kirkland & Ellis International LLP are
the
Debtors' bankruptcy counsel and Cole Schotz, P.C. is the Debtors'
co-bankruptcy counsel. Moelis & Company LLC is the Debtors'
investment banker. FTI Consulting Inc is the Debtors'
restructuring
advisor. Kurtzman Carson Consultants LLC is the Debtors's notice
and claims agent. Deloitte Touche Tohmatsu Limited serves as the
Debtors' tax advisor.
JAMBYS INC: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------
Two affiliates that concurrently filed voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code:
Debtor Case No.
Jambys, Inc. (Lead Case) 24-10913
228 Park Avenue South
PMB 49630
New York NY 10003
Jambys NYC Inc. 24-10914
228 Park Avenue South
PMB 49630
New York NY 10003
Business Description: Jambys offers super-soft unisex apparel
designed for maximum comfort at home.
Chapter 11 Petition Date: April 30, 2024
Court: United States Bankruptcy Court
District of Delaware
Debtors' Counsel: Joseph C. Barsalona II, Esq.
PASHMAN STEIN WALDER HAYDEN, P.C.
1007 North Orange Street, 4th Floor, Suite #183
Wilmington DE 19801
Tel: 302-592-6497
Email: jbarsalona@pashmanstein.com
- and -
Amy M. Oden, Esq.
Katherine R. Beilin, Esq.
Court Plaza South, East Wing
21 Main Street, Suite 200
Hackensack, NJ 07601
Tel: (201) 488-8200
Email: aoden@pashmanstein.com
kbeilin@pashmanstein.com
Jambys, Inc.'s Total Assets as of March 31, 2024: $1,217,218
Jambys, Inc.'s Total Liabilities as of March 31, 2024: $6,826,170
Jambys NYC's Estimated Assets: $0 to $50,000
Jambys NYC's Estimated Liabilities: $1 million to $10 million
The petitions were signed by John Ambrose as president and Co-CEO.
Full-text copies of the petitions are available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/7AG6QTI/Jambys_NYC_Inc__debke-24-10914__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/Z7ZKKTQ/Jambys_Inc__debke-24-10913__0001.0.pdf?mcid=tGE4TAMA
LAMAR ADVERTISING: Moody's Affirms Ba2 CFR, Outlook Remains Stable
------------------------------------------------------------------
Moody's Ratings affirmed the ratings of Lamar Advertising Company
(Lamar) and their subsidiary Lamar Media Corporation, including its
Ba2 Corporate Family Rating, Ba2-PD Probability of Default Rating,
Baa2 Senior Secured Term Loan A, Baa2 Senior Secured Term Loan B,
Baa2 Senior Secured Revolving Credit Facility, as well as the Ba3
Senior Unsecured Notes. The outlook remains stable.
RATINGS RATIONALE
Lamar's Ba2 CFR reflects its market position as one of the largest
outdoor advertising companies in the US, the moderate leverage
level (3.4x without Moody's operating lease adjustments as of
FYE'23), and very high margin business model with strong cash flow
generation prior to dividend payments ($784 million in cash flow
from operating activities as of FYE'23). The ability to convert
traditional static billboards to digital provides ongoing growth
opportunities over the next several years. Lamar owns and operates
around 160 thousand billboards in 45 states and in Canada. The
company also owns and operates approximately 4,750 thousand digital
billboards in 43 states and Canada which contribute around 30% of
the company's revenues. As a pure play outdoor advertising company,
Lamar provides mainly local advertising and derives revenues from a
diversified customer base, with no single customer accounting for
more than 2% of billboard advertising net revenue in 2023.
Services, Health Care, and Restaurants accounted for 37% of net
revenues from Billboard Advertising during 2023.
Moody's expects Lamar will continue to grow EBITDA through small
tuck in acquisitions as well as organically. Over the next few
quarters, Moody's expects the company to pay off their Term Loan A
which matures in February 2025 through a combination of cash flow
and revolver borrowings. This will lead to leverage declining
towards the low 3x, although Moody's believes that Lamar would
increase leverage to about 4x if a larger strategic acquisition
opportunity arises. The company has a geographically diversified
market position with lower levels of transit exposure than its US
peers. Lamar has a greater presence in small and mid-sized
markets, with less focus on major metropolitan areas that are more
exposed to volatile national advertising. Compared to other
traditional media outlets, the outdoor advertising industry is not
likely to suffer from disintermediation and benefits from
restrictions on the supply of billboards which help support
advertising rates and high asset valuations going forward.
Moody's speculative grade liquidity (SGL) rating of SGL-2 reflects
expectations that Lamar will maintain a good liquidity position
over the next year. The cash balance was $42 million with $671
million of availability on the $750 million revolver due 2028 as of
FYE'23. Lamar also has a $250 million A/R securitization (due in
July 2025) that is fully drawn as of FYE'23. Moody's believes that
Lamar will look to extend the maturity of the AR facility within
the current fiscal year. Lamar is expected to payout a substantial
amount of their Cash Flow from Operations as dividends, due to
their REIT status (around 90% of REIT taxable income). Moody's
expects that the amount in dividends will be around $515 million
for 2024.Moody's expects capital expenditures (of which
approximately 35 – 40% of is considered maintenance) to decline
to $125 million dollars in 2024 from $178 million in 2023.
Free cash flow as a percentage of debt was 2.8% as of FYE'23.
Moody's expects that free cash flow to debt will be higher in FY'24
compared to FY'23 due to the reduction in capex spending. Moody's
anticipate that free cash flow to debt will continue to be under 5%
beyond 2024 as the increase in cash flow going forward will be
offset by higher dividend payments. There is no required
amortization payment on the term loan B and operating cash flow
will likely be used for dividends, capex, and acquisitions. Lamar
has an At-the-Market (ATM) offering program which could be used to
boost liquidity or help finance acquisitions, although, the company
has not used the program since its origination. Assets sales of
outdoor billboards that typically trade at very high valuations
could also be a source of liquidity if needed.
The required secured net debt covenant ratio is a maximum of 4.5x,
the company was in compliance at 1.0x as of Q4'23. The covenant is
applicable to the revolving credit facility only. The term loan B
is covenant lite. Moody's projects that Lamar will maintain a
significant cushion of compliance.
The stable outlook reflects Moody's expectation that leverage will
remain strongly positioned for the Ba2 rating which provides
cushion for opportunistic M&A. Moody's expect leverage in the near
term will decline from 3.4x to around 3.2x in FY'24 and to around
3.0x for FY'25 assuming there is no material debt-financed M&A. The
slight decline in leverage is due to the impact of higher EBITDA
because of increased advertising demand in 2024, return on
investment for converted digital signage, tuck in M&A, along with
debt reduction on the Term Loan A that is due in 2025. Moody's
expects leverage will decline but leverage levels could be impacted
by the company using their revolver to fund a portion of their Term
Loan A payoff.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The required distribution of 90% of taxable income from a REIT
qualified subsidiary limits additional upward rating pressure.
However, an upgrade could occur if leverage was maintained in the
low 3x range on a sustained basis (excluding Moody's standard lease
adjustment) with confidence that the board of directors intended to
maintain leverage at or below this level. Also required would be a
balanced financial policy between debt and equity holders, free
cash flow after distributions of about 5% of debt, and a good
liquidity position.
A ratings downgrade would occur if leverage was sustained above
4.5x (excluding Moody's standard lease adjustment) due to a debt
financed acquisition or a material decline in advertising spend.
Failure to maintain an adequate liquidity position could also lead
to negative rating pressure.
Lamar Advertising Company (Lamar), with its headquarters in Baton
Rouge, Louisiana, is one of the leading owner and operators of
advertising structures in the U.S. and Canada. Lamar is publicly
traded, but the Reilly family has voting control of the company.
Lamar generated revenues of approximately $2.1 billion for the year
ended 2023.
The principal methodology used in these ratings was Media published
in June 2021.
LIKEWIZE CORP: Alters Outlook to Stable, Affirms 'B-' ICR
---------------------------------------------------------
S&P Global Ratings revised its outlook to stable from positive and
affirmed its 'B-' issuer and issue-level ratings on Likewize Corp.
(Likewize).
S&P said, "The stable outlook reflects our forecast that Likewize
will return to revenue growth in 2024, with continued EBITDA
expansion and material cash flow improvement as the company takes
steps to reduce working capital volatility. In addition, we expect
that liquidity will remain adequate and the company will
successfully refinance its senior notes before they become current
in October 2024. However, we are unlikely to upgrade until we see
more consistent and predictable cash flows.
"S&P Global Ratings' outlook revision to stable reflects cash flow
and leverage misses relative to our expectations. Likewize ended
2023 with S&P Global Ratings-adjusted free operating cash flow
(FOCF) to debt of roughly 0%, materially below our expectations for
FOCF to debt in the high single-digits. The company's S&P Global
Ratings-adjusted leverage was 5.3x for 2023; this was better than
the previous year, but slightly elevated relative to our
expectations for leverage below 5x. The company's performance miss,
particularly with respect to cash flows, stems largely from its
upgrade segment." Specifically, the company experienced
higher-than-expected working capital outflows because of atypically
high trade-in volumes during the fourth quarter in 2023, resulting
in significantly higher inventory levels. In addition, profits in
the segment were negatively affected by pricing pressure in the
secondary markets because of excess inventory. The company's
reported debt also increased by about $75 million, or 15%,
sequentially in the fourth quarter (and 12% for the full year),
primarily driven by trade payable facilities it used for the first
time toward the end of 2023.
Notwithstanding the miss relative to expectations, the company has
continued to grow earnings considerably and execute on its
transformation strategies. Although total revenue declined in 2023
by more than 20% from 2022, this reflects the company's ongoing
business rationalization program, under which it has been
intentionally unwinding lower-margin supply chain and distribution
businesses and exiting unprofitable geographies. Further, Likewize
has been shifting its business mix to include more of the
higher-margin device protection business, which has driven
meaningful improvements to gross profit and EBITDA. Year-over-year
S&P-adjusted EBITDA growth was robust at nearly 50% (10% per
management-calculated EBITDA), attributable to new business wins,
expansion with existing clients in device protection, and
materially reduced restructuring and acquisition costs. The
company's device protection segment now accounts for 60% of
management-adjusted gross profit mix, up significantly from 42% in
2021, as the company enters the final stages of repositioning
itself as a tech protection and support provider.
S&P said, "We expect positive performance momentum in 2024, but
will need to see a greater track record of consistency for an
upgrade. Our base case expectations for 2024 call for a return to
revenue growth and continued EBITDA expansion. We also expect
material cash flow improvement as the company settles excess
inventory levels in 2024 and takes steps to reduce future
volatility (such as reducing concentration with its key OEM partner
in the upgrade segment). However, execution risks remain,
particularly as Likewize has missed our expectations on performance
and credit metrics each year since we first revised our outlook on
the company to positive in late 2021."
Likewize has had success in carving out a niche in the device
protection space and has been attracting customers through its high
touch service quality (as reflected by high net promoter scores),
its nimble operating structure with omnichannel capabilities, and
its positioning as a lower-cost provider. However, the company is a
disruptor in the industry relative to significantly larger
companies that offer similar services (such as Asurion and
Assurant, who hold contracts with the three major U.S. wireless
carriers: Verizon, AT&T, and T-Mobile). This competitive dynamic,
combined with a still ongoing strategic repositioning and recent
cash flow volatility, heightens execution risk relative to S&P's
base case forecasts.
S&P said, "The stable outlook reflects our view that Likewize will
sustain and further develop its competitive positioning, as
reflected by a return to revenue growth in 2024, continued EBITDA
expansion, and material cash flow improvement as the company takes
steps to reduce working capital volatility. We expect that
liquidity will remain adequate and the company will successfully
refinance its senior notes before they become current in October
2024.
"Though unlikely, we would consider a downgrade if the company's
liquidity were to weaken, as reflected by further cash flow
declines or an inability to refinance its fall 2025 maturity. We
could also consider a downgrade if credit metrics weaken to levels
such that we believe the company's capital structure is
unsustainable." This could result from:
-- Organic revenue declines due to weak demand for device
protection services;
-- Higher-than-expected liquidity needs related to its
restructuring efforts, working capital usage, or foreign operating
needs; or
--Margin pressure from operating missteps or intensified
competition.
S&P said, "We would consider an upgrade if the company demonstrates
solid revenue and margin growth, supported by efficient working
capital management and prudent financial policy decisions.
Importantly, we would also like to see a track record of
consistency in meeting our performance expectations." Under this
scenario, S&P would expect:
-- Successful refinancing of debt maturing in 2025;
-- Adjusted leverage sustained below 5x; and
-- FOCF to debt in the mid-single-digit percent range or higher.
S&P said, "Governance is a moderately negative consideration, as it
is for most rated entities owned by private-equity sponsors. We
believe the company's 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."
LP PROPERTIES: Starts Subchapter V Bankruptcy Proceeding
--------------------------------------------------------
On April 18, 2024 LP Properties LLC filed for chapter 11 protection
in the District of Maryland without stating the reason.
According to court filing, the Debtor reports estimated assets
between $100,000 and $500,000 and estimated liabilities between
$500,000 and $1 million.
About LP Properties LLC
LP Properties LLC provides homeowners fast cash for your home. It
works with homeowners who want to sell their home in the Bexar
County and surrounding areas.
LP Properties LLC sought relief under Subchapter V of Chapter 11 of
the U.S. Bankruptcy Code (Bankr. D. Md. Case No. 24-13256) on April
18, 2024. In the petition signed by Kamose Tao, as managing member
and sole owner, the Debtor reports the Debtor reports estimated
assets between $100,000 and $500,000 and estimated liabilities
between $500,000 and $1 million.
Honorable Bankruptcy Judge Nancy V Alquist oversees the case.
The Debtor is represented by:
Kim D. Parker, Esq.
Law Offices of Kim Parker, PA
114 South Stricker Street
Baltimore, MD 21223
LUMEN TECHNOLOGIES: Wants to Slash Its Workforce by Less Than 7%
----------------------------------------------------------------
Lin Cheng of Bloomberg Law reports that Lumen Technologies says it
plans to reduce workforce by less than 7% through a combination of
involuntary and voluntary separations.
It expects severance & related costs of $90m-$100m; expects to
record in 2Q.
It doesn't expect to incur any material impairments. It also
expects to complete the initiatives by end of 2Q.
About Lumen Technologies
Headquartered in Monroe, Louisiana, Lumen Technologies, Inc. is an
international facilities-based technology and communications
company focused on providing its business and mass markets
customers with a broad array of integrated products and services
necessary to fully participate in its ever-evolving digital world.
The Company's platform empowers its customers to swiftly adjust
digital programs to meet immediate demands, create efficiencies,
accelerate market access and reduce costs -- allowing customers to
rapidly evolve their IT programs to address dynamic changes.
* * *
As reported by the TCR on March 26, 2024, S&P Global ratings
lowered its issuer credit rating (ICR) on U.S.-based
telecommunications service provider Lumen Technologies Inc. to
'SD'
from 'CC'. S&P also lowered the issue-level ratings on the
affected
issues to 'D'. The 'B' issue-level rating on operating subsidiary
Qwest Corp.'s senior unsecured debt and the 'B-' issue-level
rating
on Qwest Capital Funding Inc.'s senior unsecured debt remain on
CreditWatch, where S&P placed them with negative implications on
Jan. 30, 2024. S&P said, "The downgrade follows the completion of
the debt restructuring, which we view as tantamount to default.
The
company exchanged a portion of the outstanding senior secured and
unsecured debt at Lumen and wholly owned subsidiary Level 3
Financing Inc. for new debt with a senior ranking, higher coupons,
fees, and tighter covenants. In addition, the company paid down a
portion of this debt at par from the issuance of $1.325 billion of
new secured debt at Level 3 and around $1.8 billion of gross
proceeds from the sale of its Europe, Middle East, and Africa
(EMEA) operations. Even though this debt was exchanged at par, we
do not view the difference in terms as sufficient to offset the
extension of maturities to 2029 and 2030." S&P views the following
exchanges as distressed and therefore, lowered the ratings to 'D',
given its view that investors are not receiving adequate
offsetting
compensation and that the company would ultimately default absent
the transaction:
As reported by the TCR on Feb. 22, 2024, Moody's Investors Service
downgraded Lumen Technologies, Inc.'s corporate family rating to
Caa2 from Caa1 and its probability of default rating to Caa2-PD
from Caa1-PD. The CFR downgrade reflects Lumen's continued weak
operating performance and medium to longer term refinancing risks.
MAGNOLIA SENIOR: Continued Operations & Sale Proceeds to Fund Plan
------------------------------------------------------------------
Magnolia Senior Living LLC filed with the U.S. Bankruptcy Court for
the Northern District of Georgia a Disclosure Statement for Plan of
Reorganization dated April 18, 2024.
The Debtor is a Georgia limited liability company which owns and
operates an assisted living facility in Loganville, GA. The Debtor
operates from its facility located at 89 Ozora Road, Loganville, GA
30052.
The Debtor also holds an ownership interest in the following
affiliates: (i) 95% ownership of Magnolia Senior Living @Sugarhill
LLC, (ii) 50% ownership of Magnolia Senior Living @Sharpsburg LLC,
(iii) 50% ownership of Magnolia Senior Living @Canton, LLC, (iv)
46% ownership of Magnolia Senior Living @Dawsonville, LLC, and (v)
50% ownership of Magnolia Senior Living @Warner Robins LLC.
The Debtor had the following assets as of the Filing Date: (i) Real
Property with a Fair Market Value of approximately $12,000,000.00,
(ii) Bank Accounts with a value of $55,000.00, (iii) Accounts
Receivable with a value of $21,000.00, (iv) interests in affiliates
with an approximate value of $24,000,000.00, (v) Machinery,
Equipment and Vehicles with an unknown current value, and (v)
Office Furniture, Computers and Paintings with an unknown current
value.
The Debtor has liabilities consisting of (i) secured claims in the
approximate amount of $12,004,822.00, (ii) unsecured claims in the
amount of $149,900 and (iii) unsecured affiliated claims in an
unknown amount.
The Plan contemplates the reorganization and ongoing business
operations of Debtor and the resolution of the outstanding Claims
against and Interests in Debtor pursuant to sections 1129(b) and
1123 of the Bankruptcy Code.
Class 10 consists of the Unsecured Claim of Magnolia Senior Living
@Hiawassee LLC. Debtor scheduled Hiawassee as holding an unsecured
claim consisting of a loan, in an amount to be reconciled, to
Debtor (the "Class 10 Unsecured Claim"). Debtor will pay the Class
10 Unsecured Claim in full by the second anniversary of the
Effective Date. The Holder of the Class 10 claim is Impaired and is
entitled to vote to accept or reject the Plan.
Class 11 consists of the Unsecured Claim of Magnolia Senior Living
@Dawsonville LLC. Debtor scheduled Dawsonville as holding an
unsecured claim consisting of a loan, in an amount to be
reconciled, to Debtor (the "Class 11 Unsecured Claim"). Debtor will
pay the Class 11 Unsecured Claim in full by the second anniversary
of the Effective Date. The Holder of the Class 11 claim is Impaired
and is entitled to vote to accept or reject the Plan.
Class 12 consists of the Unsecured Claim of Magnolia Senior Living
@Sharpsburg LLC. Debtor scheduled Sharpsburg as holding an
unsecured claim consisting of a loan, in an amount to be
reconciled, to Debtor (the "Class 12 Unsecured Claim"). Debtor will
pay the Class 12 Unsecured Claim in full by the second anniversary
of the Effective Date. The Holder of the Class 12 claim is Impaired
and is entitled to vote to accept or reject the Plan.
Class 13 consists of the Unsecured Claim of Magnolia Senior Living
@Warner Robins LLC. Debtor scheduled Warner Robins as holding an
unsecured claim consisting of a loan, in an amount to be
reconciled, to Debtor (the "Class 13 Unsecured Claim"). Debtor will
pay the Class 13 Unsecured Claim in full by the second anniversary
of the Effective Date. The Holder of the Class 13 claim is Impaired
and is entitled to vote to accept or reject the Plan.
Class 14 consists of general unsecured claims not otherwise
specifically classified in the Plan, including deficiency claims
and any Allowed rejection damages. Debtor is not aware of any
potential Holders of Class 14 General Unsecured Claims. In the
event there are Allowed Holders of Class 14 General Unsecured
Claims, Debtor shall pay such Allowed Class 14 General Unsecured
Claims in full on the Effective Date.
Class 15 consists of the Interest Claims. Zhicong Chen shall retain
a 60% interest in the Debtor and Qiong Yao shall retain a 40%
interest in the Debtor. The Holders of the Class 15 claim are
Unimpaired and not entitled to vote to accept or reject the Plan.
Upon confirmation, Debtor will retain all of the property of the
estate free and clear of liens, claims, and encumbrances not
expressly retained by Creditors under the Plan. Debtor will have
the rights and powers to assert any and all Causes of Action
(defined as all causes of action, choses in action, claims, rights,
suits, accounts or remedies belonging to or enforceable by Debtor,
including Avoidance Actions, whether or not matured or unmatured,
liquidated or unliquidated, contingent or noncontingent, known or
unknown, or whether in law or in equity, and whether or not
specifically identified in Debtor's schedules). The Disclosure
Statement and Plan are filed with a full reservation of rights.
The source of funds for will be from the Debtor's post-petition
operations and the net proceeds the Debtor will receive from the
sale of its interest in Magnolia Senior Living @Sharpsburg, LLC.
Debtor anticipates this sale to close on April 19, 2024 and to
receive net funds in the amount of $1,750,000.00 after payment of
its estimated tax distribution.
A full-text copy of the Disclosure Statement dated April 18, 2024
is available at https://urlcurt.com/u?l=g4wIUC from
PacerMonitor.com at no charge.
Attorneys for the Debtor:
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
Magnolia Senior Living, LLC is a Georgia limited liability company
which owns and operates an assisted living facility in Loganville,
GA.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Ga. Case No. 24-52830) on March 19,
2024, with $1 million to $10 million in both assets and
liabilities. Zhicong Chen, authorized agent, signed the petition.
Judge Wendy L. Hagenau presides over the case.
Cameron M. McCord, Esq., at Jones & Walden, LLC represents the
Debtor as legal counsel.
MANCHESTER HOUSING: Moody's Ups Rating on Series 2000 Bonds to Ba1
------------------------------------------------------------------
Moody's Ratings has upgraded to Ba1 from Ba3 the rating on
Manchester Housing and Redevelopment Authority, NH's Revenue Bonds,
Series 2000. There is approximately $36 million outstanding on the
Series 2000 bonds. The outlook has been removed.
The upgrade reflects the healthy trend in the state's meals and
room tax (MRT) revenue collections and the distributions allocated
to municipalities based on population which includes the City of
Manchester's portion that secures the authority's bonds.
RATINGS RATIONALE
The upgrade to Ba1 reflects the healthy trend in the state's meals
and room tax (MRT) revenue collections and the distributions
allocated to municipalities which includes the City of Manchester's
portion that secures the authority's bonds. The rating also
balances the long history of volatility in the state's distribution
of the revenue that led to a large draw down of the debt service
reserve fund (DSRF). The rating also considers the appropriation
risk by the city under the financing agreement and lack of monthly
segregation of the tax distributions. The 2023 annual tax revenue
distribution is the largest to date and provided for coverage of
over 2x annual debt service. Since 2022 the DSRF balance has been
restored to the annual requirement equal to maximum annual debt
service (MADS). Current legislation commits the state to
distributing 30% of total MRT collections to municipalities.
Absence of any change to MRT legislation the stable population of
Manchester and state distribution ratio is expected to provide
healthy annual debt service coverage going forward.
RATING OUTLOOK
Outlooks are not assigned to local governments with this amount of
debt outstanding.
FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATING
-- 2024 MRT revenue allocation equal to at least 1.5x annual debt
service coverage
-- Economic and legislative trends that contribute to stable or
increasing MRT revenue and municipal distributions
FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATING
-- Reduction or delay in the state's MRT distribution to the City
of Manchester
-- Material reduction in Manchester's proportional share of the
state's total population
LEGAL SECURITY
The bonds are secured solely by the City of Manchester's allocation
of state meals and rooms taxes received in excess of $454,927. The
meals and rooms tax is a statewide 8.5% levy on prepared meals and
rooms that is remitted monthly to the New Hampshire Department of
Revenue. The state distributes a portion of the tax to cities and
towns annually in December based on their proportionate share of
state population.
PROFILE
In 2000 the Manchester Housing and Redevelopment Authority (MHRA)
issued the bonds to fund a 12,000 seat arena, secured by state MRT
distributions passed through the City of Manchester (Aa3 stable)
via appropriation. The debt is non-recourse to either Manchester or
the authority. The city owns both the site and Civic Center itself.
The Civic Center is not a component unit of the city or authority
and does not appear in their respective audited financials. The
city's annual comprehensive financial report does include a civic
center special revenue fund that is aggregated in the non-major
governmental fund. The restricted funds in the special revenue
fund are a capital reserve.
Manchester has a population of 116,163 and is the largest city in
New Hampshire. The city is located on the Merrimack River in south
central part of the state, approximately 58 miles north of Boston
(Aaa stable), MA.
METHODOLOGY
The principal methodology used in these ratings was US Public
Finance Special Tax Methodology published in January 2021.
MASDAC LLC: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: MASDAC, LLC
DBA Larsen & Ruggiero Mechanical
DBA L&R Mechanical
12 Cross Street
Staten Island, NY 10304
Case No.: 24-41830
Business Description: MASDAC is part of the building equipment
contractor industry.
Chapter 11 Petition Date: April 30, 2024
Court: United States Bankruptcy Court
Eastern District of New York
Judge: Hon. Elizabeth S Stong
Debtor's Counsel: Heath S. Berger, Esq.
BERGER, FISCHOFF, SHUMER, WEXLER & GOODMAN, LLP
6901 Jericho Turnpike
Suite 230
Syosset, NY 11791
Tel: 516-747-1136
Email: hberger@bfslawfirm.com/
gfischoff@bfslawfirm.com
Total Assets: $822,341
Total Liabilities: $1,227,301
The petition was signed by Alain Holtz as managing member.
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/ASHDAMQ/MASDAC_LLC__nyebke-24-41830__0001.0.pdf?mcid=tGE4TAMA
MCAFEE ENTERPRISE: Invesco Exchange Marks $65.7MM Loan at 40% Off
-----------------------------------------------------------------
Invesco Exchange-Traded Fund Trust II has marked its $65,778,000
loan extended to McAfee Enterprise to market at $39,777,559 or 60%
of the outstanding amount, as of February 29, 2024, according to a
disclosure contained in Invesco Exchange's Form N-CSR for the
Fiscal year ended February 29, 2024, filed with the Securities and
Exchange Commission on April 25, 2024.
Invesco Exchange is a participant in a First Lien Term Loan to
McAfee Enterprise. The loan accrues interest at a rate of 10.67% (3
mo. SOFR + 5.26%) per annum. The loan matures on July 27, 2028.
Invesco Exchange was organized as a Massachusetts business trust
and is authorized to have multiple series of portfolios; an
open-end management investment company registered under the
Investment Company Act of 1940, as amended.
Invesco Exchange's fiscal year end August 31.
Invesco Exchange is led by Brian Hartigan, President; and Kelli
Gallegos, Treasurer. The fund can be reach through:
Invesco Exchange-Traded Fund Trust II
3500 Lacey Road
Downers Grove, IL 60515
Tel: (800) 983-0903
McAfee Enterprise LLC operates as a cybersecurity company. The
Company offers technology, cloud security, and other related
services. McAfee Enterprise serves clients worldwide.
MOUNTAIN VIEW: Plan Exclusivity Period Extended to July 17
----------------------------------------------------------
Judge Nancy V. Alquist of the U.S. Bankruptcy Court for the
District of Maryland extended Mountain View Orchard, Inc.'s
exclusive periods to file a plan of reorganization and obtain
acceptance thereof to July 17 and September 15, 2024, respectively.
As shared by Troubled Company Reporter, Yellow Breeches Capital
LLC, (the "Lender"), asserts a secured claim of approximately
$3,505,865.45 (the "Secured Debt") against the Debtor's assets by
way of, inter alia, the Debtor's obligations under three loans as
borrower or guarantor, and which are respectively secured by the
security interests (altogether, the "Security Interests").
Prior to the commencement of this case, the Debtor was declared to
be in default of the Secured Debt and, thereafter, subject to
foreclosure. Following unsuccessful negotiations to reinstate or
resolve the loan, the Debtor was forced to commence this
proceeding.
The Debtor anticipates that the ongoing sale and/or reorganization
efforts of its affiliates, the two entities identified and others,
will satisfy the majority of the balance owed on the Secured Debt.
Mountain View Orchard, Inc. is represented by:
Joseph M. Selba, Esq.
TYDINGS & ROSENBERG, LLP
1 E. Pratt Street, Suite 901
Baltimore, MD 21202
Telephone: (410) 752-9700
Email: jselba@tydingslaw.com
About Mountain View Orchard
Mountain View Orchard, Inc., is in the business of fruit and tree
nut farming.
Mountain View Orchard, Inc., filed its voluntary petition for
relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Md. Case
No. 23-15149) on July 23, 2023. The petition was signed by Anthony
C.Y. Cheng as president. At the time of filing, the Debtor
estimated $500,000 to $1 million in assets and $1 million to $10
million in liabilities.
Judge Nancy V. Alquist oversees the case.
Joseph M. Selba, Esq., at Tydings & Rosenberg LLP, represents the
Debtor as counsel.
NANOSTRING TECHNOLOGIES: Sold to Bruker at Chapter 11 Auction
-------------------------------------------------------------
Clara Geoghegan of Law360 reports that scientific instrument maker
Bruker Corp. is set to acquire insolvent biotechnology company
NanoString for roughly $393 million in cash that would be used to
repay creditors under the debtor's recently proposed Chapter 11
plan, a notice filed in Delaware's bankruptcy court shows.
About NanoString Technologies
NanoString Technologies, Inc., offers an ecosystem of innovative
discovery and translational research solutions and empowers its
customers to map the universe of biology.
NanoString and affiliates sought protection under Chapter 11 of
the
U.S. Bankruptcy Code (Bankr. D. Del. Lead Case No. 24-10160) on
Feb. 4, 2024. In the petition signed by R. Bradley Gray,
president
and chief executive officer, NanoString disclosed $100 million to
$500 million in both assets and liabilities.
The Debtors tapped Willkie Farr & Gallagher, LLP and Young Conaway
Stargatt & Taylor, LLP as legal counsels; AlixPartners, LLP as
financial advisor; Weil, Gotshal & Manges LLP as special patent
counsel; and Perella Weinberg Partners LP as investment banker.
Kroll Restructuring Administration LLC is the Debtors'
administrative advisor.
Gibson Dunn & Crutcher, LLP, and Sullivan & Cromwell, LLP, serve
as
counsels to certain DIP lenders. Richards, Layton & Finger and
Houlihan Lokey Capital, Inc., act as Delaware bankruptcy counsel
and financial advisor to the DIP lenders. Meanwhile, Alston &
Bird
and Potter Anderson serve as bankruptcy counsel and Delaware
counsel, respectively, to the DIP agent.
NFP HOLDINGS: Withdraws 'B' ICR on Acquisition by Aon PLC
---------------------------------------------------------
S&P Global Ratings withdrew its 'B' issuer credit ratings on NFP
Holdings LLC and subsidiary NFP Corp. This follows NFP's
acquisition by Aon PLC (A-/Negative/A-2), which was completed on
April 25, 2024.
At the same time, S&P discontinued its 'B' and 'CCC+' issue ratings
on NFP's senior secured and senior unsecured debt, respectively,
since all of the company's rated debt facilities have been fully
repaid.
S&P's ratings on NFP Holdings LLC and NFP Corp. were on CreditWatch
with positive implications at the time of withdrawal.
ORION ADVISOR: Affirms 'B-' Issuer Credit Rating, Outlook Stable
----------------------------------------------------------------
S&P Global Ratings affirmed its ratings on Orion Advisor Solutions
Inc., including its 'B-' issuer credit rating and 'B' issue-level
ratings.
S&P said, "The stable outlook reflects our expectation of EBITDA
expansion and FOCF generation from price increases, cost cuts,
continued robust technology revenue and account growth, better
retention in the wealth management business, and incremental
flexibility from the second-lien PIK feature. This should allow the
company to repay revolver borrowings by generating $20 million-$30
million of annual FOCF over the next two years, and we expect it
will generate enough cash flow to cover all fixed charges after the
second-lien term loan becomes mandatory cash pay."
Orion's cash flow generation was lower than S&P expected in 2023,
driven by higher interest expense, lower working capital benefits,
and modestly lower EBITDA.
The opportunistic repricing of Orion's second-lien term loan and
the new PIK toggle feature reduces downside risk over upcoming
quarters. S&P said, "Orion's liquidity was lower than we expected
at the end of 2023 primarily due to higher interest expense and
working capital, and modestly lower EBITDA as price increases and
cost savings have taken longer than expected to fully implement.
The outstanding balance on the revolver was $27 million on Dec. 31,
2023, ahead of the high working capital need in the first quarter
due to the annual bonus payments. We expect the revolver balance
peaked at about $35 million-$40 million on March 31, 2024, but will
be paid down in subsequent quarters as the company generates
cash."
The company opportunistically repriced its second-lien term loan in
the first quarter of 2024 to provide some additional flexibility
and cash generation. Orion can now PIK the interest on the
second-lien term loan through the third quarter of 2025. Other
changes include the elimination of the SOFR credit spread
adjustment, the addition of a leverage-based pricing grid, and
resetting the call protection. This should allow the company to
generate more than $50 million in excess FOCF over the next six
quarters. This is a significant improvement that will accelerate
the company's effort to reduce the balance on its revolver, which
matures in September 2025. S&P assumes the company will
successfully extend the revolver before it becomes current.
S&P said, "We forecast EBITDA and cash flow will also improve
because of higher demand, continued price increases, and the
realization of cost savings. Despite some underperformance relative
to our expectations in the second half of the year, Orion
successfully reduced its leverage in each quarter of 2023, ending
the fourth quarter with leverage of 12x. We forecast leverage will
come down slightly but stay around 10x in 2024 and 2025 as the
company's EBITDA growth is partially offset by the growing debt
balances resulting from accumulating PIK interest on the
second-lien and preferred stock. The EBITDA growth we expect is
primarily due to continued robust growth in the technology
business, headcount reductions, and cost savings from 2023, the
benefit of price increases already implemented in 2023 and expected
in 2024, and better retention in the wealth management business."
Industry tailwinds are still favorable, but Orion needs to
stabilize retention in its wealth management segment. The company
has been experiencing outflows from some of its funds and declining
retention for the last several quarters. Retention dipped further
in the fourth quarter due to service issues caused by the
integration of clients from TD Ameritrade and Charles Schwab. S&P
said, "We view the latter as a one-time issue and it is unlikely to
affect future performance. We also believe retention will improve
because of new executive leadership, investments in the wealth
management sales team in late 2023, and changes to certain
underperforming funds to make them more competitive."
S&P said, "Despite the high leverage, we still view the capital
structure as sustainable given our expectation of EBITDA growth and
cash flow generation over the long term. EBITDA coverage of total
interest is relatively weak at about 1.1x. However, our rating
reflects cash interest coverage at a healthier 1.3x-1.4x over the
next two years, and our expectation that the company will continue
improving EBITDA and cash flow such that it has ample room to
generate cash in excess of all fixed charges by the end of 2025,
when the company must return to paying the second-lien interest in
cash. However, we would likely lower our rating on the company if
we lose confidence in its ability to generate cash in excess of
fixed charges.
"Our rating on Orion is vulnerable to the path of interest rates
and capital market prices. Orion's profitability is highly
correlated with capital market performance, and the wealth
management portion of its business has a beta of about 0.55 versus
the S&P 500 index. A significant and sustained drop in equity or
debt market prices would significantly hurt cash flow and could
cause us to lower our ratings on the company.
"The stable outlook reflects our expectation of EBITDA expansion
and FOCF generation from price increases, cost cuts, continued
robust technology revenue and account growth, and incremental
flexibility from the second-lien PIK feature. This should allow the
company to repay revolver borrowings and generate $20 million-$30
million of annual FOCF over the next two years, and we expect it
will generate enough cash flow to cover all fixed charges after the
second-lien term loan becomes mandatory cash pay."
PARKCLIFFE DEVELOPMENT: Case Summary & Seven Unsecured Creditors
----------------------------------------------------------------
Debtor: Parkcliffe Development LLC
4234 Parkcliffe Lane
Toledo, OH 43615
Case No.: 24-30814
Business Description: The Debtor owns 10 real properties, all
located in Ohio, having a total current
value of $2.96 million.
Chapter 11 Petition Date: April 30, 2024
Court: United States Bankruptcy Court
Northern District of Ohio
Judge: Hon. John P Gustafson
Debtor's Counsel: Steven L. Diller, Esq.
DILLER AND RICE, LLC
124 East Main Street
Van Wert, OH 45891
Tel: 419-238-5025
Fax: 419-238-4705
Email: Steven@drlawllc.com; Kim@drlawllc.com;
Eric@drlawllc.com
Total Assets: $3,672,259
Total Liabilities: $6,244,978
The petition was signed by Wayne H. Bucher as president.
A full-text copy of the petition containing, among other items, a
list of the Debtor's seven unsecured creditors is available for
free at PacerMonitor.com at:
https://www.pacermonitor.com/view/UZW44PQ/Parkcliffe_Development_LLC__ohnbke-24-30814__0001.0.pdf?mcid=tGE4TAMA
PARKWAY TRUCKING: Hits Chapter 11 Bankruptcy
--------------------------------------------
Parkway Trucking Inc. filed for chapter 11 protection in the
Eastern District of New York.
According to court filing, the Debtor reports estimated assets up
to $50,000 and estimated liabilities between $500,000 and $1
million owed to 1 and 49 unsecured creditors.
A meeting of creditors under 11 U.S.C. Section 341(a) is slated
for
May 17, 2024, at 12:00 PM at UST-LA3, TELEPHONIC MEETING.
CONFERENCE LINE: 1(866) 819-14981, PARTICIPANT CODE:476977.
About Parkway Trucking Inc.
Parkway Trucking Inc., doing business as Parkway Trucking, is a
Single Asset Real Estate (as defined in 11 U.S.C. § 101(51B)).
Parkway Trucking ING sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D.N.Y. Case No. 24-41666) on April 18,
2024. In the petition filed by Stacia Hewitt, as successor in
interest, the Debtor reports estimated assets up to $50,000 and
estimated liabilities between $500,000 and $1 million.
Honorable Bankruptcy Judge Nancy Hershey Lord oversees the case.
PHYSICIAN PARTNERS: Downgrades ICR to 'B-', On Watch Negative
-------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on Medicare
Advantage-focused primary care service provider Physician Partners
LLC to 'B-' from 'B+'.
S&P said, "We also lowered our issue-level rating on the company's
senior secured debt to 'B-' from 'B+'. The recovery rating remains
'3'. At the same time, we placed all our ratings on Physician
Partners on CreditWatch with negative implications.
"We expect to resolve the CreditWatch placement after obtaining
more information from management regarding the expected ramp up of
the de novo locations opened in 2023 and the financial impact of
Centers for Medicare & Medicaid Services (CMS) rate decision for
2025 and whether we expect the company can generate sustainably
positive free operating cash flows with its current capital
structure.
"Physician Partners severely underperformed our EBITDA expectations
in 2023; growth is expected to slow in 2024.EBITDA margin in 2023
was over 50% below our expectations at 6.7% due to
higher-than-expected operating costs. Operating costs increased in
2023 due to a higher utilization rate from an increase in elective
procedures and a higher medical cost ratio resulting from higher
overall patient care expenses. In addition, the company added about
70 de novo locations in 2023, incurring high start-up costs further
burdening the EBITDA. We believe EBITDA will continue to be
burdened through 2024 and 2025 because the de novo locations are
not expected to reach breakeven for at least 18 months. In
addition, we expect 2024 revenue growth rate to slow down to just
over 11% down from about 27% in 2023 due to a slower-than-expected
ramp up of the de novo locations. The continued strain on operating
costs and slower-than-expected growth is likely to severely affect
2024 EBITDA, which we expect to be roughly breakeven.
"We no longer expect the company to generate positive free
operating cash flows in the near term. We expect the company to be
in a free cash flow deficit in 2024 and 2025 because of slower
revenue growth and elevated operating costs. While the company
began 2024 with a strong liquidity position of a minimum of $220
million (assuming limited availability on the revolver due to a
springing covenant at 35% usage), we expect the company to burn
about $90 million of cash throughout 2024. Cash flow will improve
in 2025 due to the de novo centers beginning to approach break-even
profitability, but we expect the company's medical cost ratio to
remain high and cash flow to remain negative. We now do not expect
the company to generate break-even cash flows until 2026 at the
earliest." The company is dependent on a successful ramp up of its
de novo operations, a decline in interest rates, and improvements
in its medical cost ratio to return to positive cash flow. If there
are delays to any of these scenarios, the company may not have
sufficient liquidity to fund its operating losses and the capital
structure may become unsustainable.
CMS' recent rate announcement is expected to affect EBITDA in 2025.
CMS recently finalized its reimbursement rates for 2025. The new
rates are expected to have slightly negative overall impact on the
reimbursements received by the company's payors. This is likely
going to have a trickle-down effect on the per member per month
(PMPM) premiums received by Physician Partners and is likely to
further pressure its medical cost ratio.
Changes to the CMS-HCC Model V28 add further uncertainty in the
coming years. S&P believes the transition to CMS-HCC Model V28
could potentially result in lower PMPM premiums for patients with
added complications to certain conditions that were previously
categorized at a higher risk assessment. This adds further risk to
the company's operating model in the coming years.
S&P said, "We expect to resolve the CreditWatch placement after
obtaining more information from management regarding the expected
ramp up of the de novos opened in 2023 and the financial impact of
CMS' rate decision for 2025. We expect to receive this information
within the next 90 days.
"We could lower the rating by one notch to 'CCC+' if we expect that
the company will be unable to generate sustainably positive free
operating cash flow by 2026. We could also lower the rating if we
believe the company has insufficient liquidity to cover its cash
burn until the company is able to ramp up its de novo centers."
PIZZA PALS: Case Summary & 11 Unsecured Creditors
-------------------------------------------------
Debtor: Pizza Pals LP
11 Edge Hill Dr
Dallas, TX 75248-7916
Case No.: 24-31251
Business Description: The Debtor owns and operates an Italian
chain buffet.
Chapter 11 Petition Date: April 30, 2024
Court: United States Bankruptcy Court
Northern District of Texas
Judge: Hon. Scott W. Everett
Debtor's Counsel: Robert C. Lane, Esq.
THE LANE LAW FIRM
6200 Savoy Dr Ste 1150
Houston TX 77036-3369
Tel: (713) 595-8200
Fax: (713) 595-8201
Email: notifications@lanelaw.com
Total Assets: $41,144
Total Debts: $2,777,727
The petition was signed by Pat Williamson as partner.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 11 unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/FYKY2JI/Pizza_Pals_LP__txnbke-24-31251__0001.0.pdf?mcid=tGE4TAMA
PUNTO OTTICO: Commences Subchapter V Bankruptcy Proceeding
----------------------------------------------------------
On April 18, 2024 Punto Ottico USA LLC filed for chapter 11
protection in the Southern District of New York with disclosing the
reason.
According to court filing, the Debtor reports estimated assets
between $100,000 and $500,000 and estimated liabilities between $1
million and $10 million. The petition states funds will be
available to unsecured creditors.
A meeting 20, 2024, at 3:00 PM at Office of UST, TELECONFERENCE
MEETING.
About Punto Ottico USA LLC
Punto Ottico USA LLC, doing business as Punto Ottico Humaneyes, is
an Italian company that operates in the eyewear field since 1991.
Punto Ottico USA LLC sought relief under Subchapter V of Chapter 11
of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 24-10660) on
April 18, 2024. In the petition signed by Stefania Passatutto, as
manager, the Debtor reports estimated assets between $100,000 and
$500,000 and estimated liabilities between $1 million and $10
million.
The Honorable Bankruptcy Judge Philip Bentley handles the case.
The Debtor is represented by:
Joseph Pack, Esq.
Pack Law, P.A.
66 White Street
Suite 501
New York, NY 10013
PURDUE PHARMA: Gets Court Okay for $7.2 Million 5th KEIP
--------------------------------------------------------
Emily Lever of Law360 reports that a New York bankruptcy judge on
Wednesday, April 17, 2024, approved bankrupt drug manufacturer
Purdue Pharma LP's plan to pay out $7.2 million to three executives
and agreed to seal some of the specifics of how the executives'
performance would be measured.
About Purdue Pharma LP
Purdue Pharma L.P. and its subsidiaries --
http://www.purduepharma.com/-- develop and provide prescription
medicines and consumer products that meet the evolving needs of
healthcare professionals, patients, consumers and caregivers.
Purdue's subsidiaries include Adlon Therapeutics L.P., focused on
treatment for Attention-Deficit/Hyperactivity Disorder (ADHD) and
related disorders; Avrio Health L.P., a consumer health products
company that champions an improved quality of life for people in
the United States through the reimagining of innovative product
solutions; Imbrium Therapeutics L.P., established to further
advance the emerging portfolio and develop the pipeline in the
areas of CNS, non-opioid pain medicines, and select oncology
through internal research, strategic collaborations and
partnerships; and Greenfield Bioventures L.P., an investment
vehicle focused on value-inflection in early stages of clinical
development.
Opioid makers in the U.S. are facing pressure from a crackdown on
the addictive drug in the wake of the opioid crisis and as state
attorneys general file lawsuits against manufacturers. More than
2,000 states, counties, municipalities and Native American
governments have sued Purdue Pharma and other pharmaceutical
companies for their role in the opioid crisis in the U.S., which
has contributed to the more than 700,000 drug overdose deaths in
the U.S. since 1999.
OxyContin, Purdue Pharma's most prominent pain medication, has
been
the target of over 2,600 civil actions pending in various state
and
federal courts and other fora across the United States and its
territories.
On Sept. 15 and 16, 2019, Purdue Pharma L.P. and 23 affiliated
debtors each filed a voluntary petition for relief under Chapter
11
of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No.
19-23649), after reaching terms of a preliminary agreement for
settling the massive opioid litigation. The Debtors' consolidated
balance sheet as of Aug. 31, 2019, showed $1.972 billion in assets
and $562 million in liabilities.
U.S. Bankruptcy Judge Robert Drain oversees the cases.
The Debtors tapped Davis Polk & Wardwell, LLP and Dechert, LLP, as
legal counsels; PJT Partners as investment banker; AlixPartners as
financial advisor; and Grant Thornton, LLP as tax structuring
consultant. Prime Clerk, LLC, is the claims agent.
Akin Gump Strauss Hauer & Feld LLP and Bayard, P.A., represent the
official committee of unsecured creditors appointed in the
Debtors'
bankruptcy cases.
David M. Klauder, Esq., is the fee examiner appointed in the
Debtors' cases. The fee examiner is represented by Bielli &
Klauder, LLC.
* * *
U.S. Bankruptcy Judge Robert Drain in early September 2021
approved
a plan to turn Purdue into a new company (Knoa Pharma LLC) no
longer owned by members of the Sackler family, with its profits
going to fight the opioid epidemic. The Sackler family agreed to
pay $4.3 billion over nine years to the states and private
plaintiffs and in exchange for a lifetime legal immunity. The
deal
resolves some 3,000 lawsuits filed by state and local governments,
Native American tribes, unions, hospitals and others who claimed
the company's marketing of prescription opioids helped spark and
continue an overdose epidemic.
Separate appeals to approval of the Plan have already been filed
by
the U.S. Bankruptcy Trustee, California, Connecticut, the District
of Columbia, Maryland, Rhode Island and Washington state, plus
some
Canadian local governments and other Canadian entities.
In early March 2022, Purdue Pharma reached a nationwide settlement
over its role in the opioid crisis, with the Sackler family
members
boosting their cash contribution to as much as $6 billion. The
settlement was hammered out with attorneys general from the eight
states -- California, Connecticut, Delaware, Maryland, Oregon,
Rhode Island, Vermont and Washington -- and D.C. who had opposed
the previous settlement.
QUEST SOFTWARE: Invesco Exchange Marks $56.1MM Loan at 20% Off
--------------------------------------------------------------
Invesco Exchange-Traded Fund Trust II has marked its $56,134,000
loan extended to Quest Software US Holdings, Inc to market at
$44,704,004 or 80% of the outstanding amount, as of February 29,
2024, according to a disclosure contained in Invesco Exchange's
Form N-CSR for the Fiscal year ended February 29, 2024, filed with
the Securities and Exchange Commission on April 25, 2024.
Invesco Exchange is a participant in a First Lien Term Loan to
Quest Software US Holdings, Inc. The loan accrues interest at a
rate of 9.75% (3 mo. SOFR + 4.40%) per annum. The loan matures on
February 1, 2029.
Invesco Exchange was organized as a Massachusetts business trust
and is authorized to have multiple series of portfolios, an
open-end management investment company registered under the
Investment Company Act of 1940, as amended.
Invesco Exchange's fiscal year end August 31.
Invesco Exchange is led by Brian Hartigan, President; and Kelli
Gallegos, Treasurer. The fund can be reach through:
Invesco Exchange-Traded Fund Trust II
3500 Lacey Road
Downers Grove, IL 60515
Tel: (800) 983-0903
Quest Software provides software solutions. The Company offers
enterprise software that identities, users and data, streamlines IT
operations, and hardens cyber security from the inside out. Quest
Software serves customers in the United States.
RADIATE HOLDCO: Invesco Exchange Marks $72.2MM Loan at 18% Off
--------------------------------------------------------------
Invesco Exchange-Traded Fund Trust II has marked its $72,249,000
loan extended to Radiate Holdco LLC to market at $59,515,408 or 82%
of the outstanding amount, as of February 29, 2024, according to a
disclosure contained in Invesco Exchange's Form N-CSR for the
Fiscal year ended February 29, 2024, filed with the Securities and
Exchange Commission on April 25, 2024.
Invesco Exchange is a participant in a Term Loan B to Radiate
Holdco LLC. The loan accrues interest at a rate of 8.69% (1 mo.
SOFR + 3.36%) per annum. The loan matures on September 25, 2026.
Invesco Exchange was organized as a Massachusetts business trust
and is authorized to have multiple series of portfolios, an
open-end management investment company registered under the
Investment Company Act of 1940, as amended.
Invesco Exchange's fiscal year end August 31.
Invesco Exchange is led by Brian Hartigan, President; and Kelli
Gallegos, Treasurer. The fund can be reach through:
Invesco Exchange-Traded Fund Trust II
3500 Lacey Road
Downers Grove, IL 60515
Tel: (800) 983-0903
Radiate Holdco LLC, also known as Astound Broadband, and backed by
Stonepeak, is a broadband communications services provider and
cable operator doing business via regional providers RCN, Grande
Communications, Wave Broadband and enTouch Systems.
RESIDENTIAL ADVERSITIES: Case Summary & Three Unsecured Creditors
-----------------------------------------------------------------
Debtor: Residential Adversities LLC
5380 Somlerlane Trail
Atlanta, GA 30349
Case No.: 24-54366
Business Description: The Debtor is primarily engaged in leasing
buildings, dwellings, or other real estate
property to others. The Debtor owns three
properties, all located in Georgia, having
a total appraised value of $2.95 million.
Chapter 11 Petition Date: April 30, 2024
Court: United States Bankruptcy Court
Northern District of Georgia
Debtor's Counsel: Brad Fallon, Esq.
FALLON LAW PC
1201 W. Peachtree St. NW, Suite 2625
Atlanta, GA 30309
Tel: (404) 849-2199
Email: brad@fallonbusinesslaw.com
Total Assets: $2,980,000
Total Liabilities: $1,182,056
The petition was signed by Lacey Murry-Bullock as member.
A full-text copy of the petition containing, among other items, a
list of the Debtor's three unsecured creditors is available for
free at PacerMonitor.com at:
https://www.pacermonitor.com/view/ZFFIXGI/Residential_Adversities_LLC__ganbke-24-54366__0001.0.pdf?mcid=tGE4TAMA
RESTIERI HEALTHCARE: Revenue & Sale Proceeds to Fund Plan
---------------------------------------------------------
Restieri Healthcare Services, LLC filed with the U.S. Bankruptcy
Court for the Northern District of Florida a Plan of Reorganization
for Small Business.
The Debtor, a Florida limited liability company established in
2006, operates a private chiropractic practice in High Springs,
Florida. The Debtor provides regenerative therapy for joint pain
and other conditions.
The Debtor's operations are located at 18245 NW US Hwy 441, in High
Springs Florida (the "Premises"). The Debtor leases the Premises
from Dr. Lawrence T. Restieri, the Debtor's sole member and
manager. The rent paid for the Premises is paid on a pass through
basis to the mortgage holder on the real property.
This is the Debtor's second chapter 11 filing. The Debtor's first
case (the "Prior Case"), filed and confirmed in 2021, resulted from
a guaranty of an SBA loan given by CRF to an affiliate of the
Debtor, Villages Healthcare Services, LLC. Villages Healthcare also
filed a chapter 11 case in or around 2021, which was subsequently
converted to a chapter 7 liquidation. The Debtor's Prior Case
resulted in a consensual chapter 11 plan confirmed by the Debtor.
The Debtor has been unable to resolve its issues with CRF and other
creditors, and Dr. Restieri's health issues make the Debtor
continuing in operations increasingly difficult in the absence of a
resolution. In order to try and reach a resolution, consensually or
otherwise, and to protect the Debtor's ability to receive funding
from Dr. Restieri and his wife (together, the "Restieris") through
their separately owned assets, the Debtor filed this case.
As of the Petition Date, the Debtor values its assets at
approximately $48,500.00 consisting of cash ($6,000.00), accounts
receivable ($4,500.00 net of doubtful accounts), and furniture,
fixtures, equipment, and inventory ($38,000.00).
This Plan of Reorganization proposes to pay creditors of the Debtor
from its net disposable income.
Class 4 consists of all nonpriority unsecured claims. Class 4 is
impaired by the Plan. Holders of allowed non-priority unsecured
claims shall receive their pro-rata share of the Excess Cash
Distributions, if any.
Class 5 is comprised of the membership interests of Dr. Restieri as
the sole member in the Debtor. No distributions will be made to Dr.
Restieri on account of his Class 5 Equity Interest.
A full-text copy of the Plan of Reorganization dated April 18, 2024
is available at https://urlcurt.com/u?l=sYNk0z from
PacerMonitor.com at no charge.
The Debtor's Counsel:
Daniel R. Fogarty, Esq.
STICHTER, RIEDEL, BLAIN & POSTLER, P.A.
110 E. Madison St.
Suite 200
Tampa, FL 33602
Tel: (813) 229-0144
Email: dfogarty@srbp.com
About Restieri Healthcare Services, LLC
Restieri Healthcare Services, LLC provides regenerative therapy for
joint pain and other conditions which services the Gainesville,
Florida area. The Debtor sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No. 3:21-bk-01843) on
July 28, 2021. In the petition signed by Dr. Lawrence T. Restie,
manager, the Debtor disclosed up to $1 million in assets and up to
$10 million in liabilities.
Judge Karen K. Specie oversees the case.
Jason A. Burgess, Esq. at The Law Offices of Jason A. Burgess, LLC
is the Debtor's counsel.
RITE AID: Delays Key Bankruptcy Exit Hearing, Deal to Slash Debt
----------------------------------------------------------------
Steven Church of Bloomberg News reports that drug store chain Rite
Aid Corp. put off a key court hearing in order to complete a deal
that would cut $2 billion in debt, resolve lawsuits related to
opioid prescriptions and end the company's six-month-old
bankruptcy.
The company needs more time to put a series of agreements into
writing, company bankruptcy attorney Aparna Yenamandra said during
a brief court hearing Thursday. Rite Aid had been scheduled to ask
a federal judge next week to approve its reorganization plan, which
is built on a series of deals the company is now trying to
complete.
About Rite Aid Corp.
Rite Aid -- http://www.riteaid.com/-- is a full-service pharmacy
that improves health outcomes. Rite Aid is defining the modern
pharmacy by meeting customer needs with a wide range of vehicles
that offer convenience, including retail and delivery pharmacy, as
well as services offered through our wholly owned subsidiaries,
Elixir, Bartell Drugs and Health Dialog. Elixir, Rite Aid's
pharmacy benefits and services company, consists of accredited
mail
and specialty pharmacies, prescription discount programs and an
industry leading adjudication platform to offer superior member
experience and cost savings. Health Dialog provides healthcare
coaching and disease management services via live online and phone
health services. Regional chain Bartell Drugs has supported the
health and wellness needs in the Seattle area for more than 130
years. Rite Aid employs more than 6,100 pharmacists and operates
more than 2,100 retail pharmacy locations across 17 states.
The Debtors sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. D.N.J. Lead Case No. 23-18993) on Oct. 15, 2023. In
the petition signed by Jeffrey S. Stein, chief executive officer
and chief restructuring officer, Rite Aid disclosed $7,650,418,000
in total assets and $8,597,866,000 in total liabilities.
Judge Michael B. Kaplan oversees the cases.
The Debtors tapped Kirkland & Ellis LLP and Kirkland & Ellis
International LLP as general bankruptcy counsel, Cole Schotz,
P.C.,
as local bankruptcy counsel, Guggenheim Partners as investment
banker, and Alvarez & Marsal North America, LLC, as financial, tax
and restructuring advisor. Kroll Restructuring Administration is
the claims and noticing agent.
ROCKVILLE DIOCESE: Claims Rep. Warns of Danger If Ch.11 Tossed
--------------------------------------------------------------
Emily Lever of Law360 reports that the future claims representative
for sex abuse victims in the bankruptcy case of the Roman Catholic
Diocese of Rockville Centre told a New York judge Friday, April 19,
2024, he could not "stand mute while this case barrels on toward
disaster," after the organization moved to dismiss its case earlier
this month.
About The Roman Catholic Diocese
of Rockville Centre, New York
The Roman Catholic Diocese of Rockville Centre, New York, is the
seat of the Roman Catholic Church on Long Island. The Diocese has
been under the leadership of Bishop John O. Barres since February
2017. The State of New York established the Diocese as a
religious corporation in 1958. The Diocese is one of eight
Catholic
dioceses in New York, including the Archdiocese of New York. The
Diocese's total Catholic population is approximately 1.4 million,
roughly half of Long Island's total population of 3.0 million. The
Diocese is the eighth largest diocese in the United States when
measured by the number of baptized Catholics.
To deal with sexual abuse claims, the Roman Catholic Diocese of
Rockville Centre, New York, filed a Chapter 11 petition (Bankr.
S.D.N.Y. Case No. 20-12345) on Sept. 30, 2020, listing as much as
$500 million in both assets and liabilities. Judge Martin Glenn
oversees the case.
The Diocese tapped Jones Day as legal counsel, Alvarez & Marsal
North America, LLC, as restructuring advisor, and Sitrick and
Company, Inc., as communications consultant. Epiq Corporate
Restructuring, LLC is the claims agent.
The U.S. Trustee for Region 2 appointed an official committee of
unsecured creditors in the Diocese's Chapter 11 case. The
committee tapped Pachulski Stang Ziehl & Jones, LLP and Ruskin
Moscou Faltischek, PC as its bankruptcy counsel and special real
estate counsel, respectively.
Robert E. Gerber, the legal representative for future claimants of
the Diocese, is represented by the law firm of Joseph Hage
Aaronson, LLC.
SS&C TECHNOLOGIES: Rates New $2.775BB Senior Secured Loan 'BB+'
---------------------------------------------------------------
S&P Global Ratings assigned its 'BB+' issue-level rating and '2'
recovery rating to the proposed $2.775 billion senior secured
first-lien term loan due 2029 issued by Connecticut-based SS&C
Technologies Holdings Inc.'s subsidiary, SS&C Technologies Inc. The
'2' recovery rating indicates S&P's expectation for substantial
(70%-90%; rounded estimate: 80%) recovery in the event of a
default.
S&P expects the company will use the net proceeds from this
offering, along with the proceeds from $750 million of proposed
other unsecured debt, to refinance its existing term loans maturing
in 2025.
STONEX GROUP: Alters Outlook to Positive, Affirms 'BB-' ICR
-----------------------------------------------------------
S&P Global Ratings revised the rating outlook on StoneX Group Inc.
to positive from stable and affirmed the 'BB-' issuer credit and
senior secured debt ratings.
S&P said, "The positive outlook reflects our view that StoneX's
capitalization has improved following good earnings generation and
retention. Since we first assigned a rating to StoneX in 2018, its
equity capital base has tripled, reaching $1.5 billion as of Dec.
31, 2023--up by more than $300 million from a year prior. This
increase boosted its risk-adjusted capital (RAC) ratio to 9.7% as
of Dec. 31, 2023, from 7.9% the previous year, despite continued
growth in the balance sheet and risk-weighted assets (RWAs). We
expect the company to maintain a RAC ratio close to 9% as higher
revenue increases operational RWAs and higher market volatility
increases market RWAs. Nevertheless, we expect management to
continue supporting solid capitalization with no dividends and with
stock buybacks that are limited to less than the dilution from
stock-based compensation, allowing the firm to build equity by
retaining earnings.
'We still think the firm has elevated risk exposure.It faces
operational risks from its physical commodities business, such as
the $47 million loss on coal demurrage in 2017, which represented
10% of equity (the loss was reduced to $35.6 million after
subsequent recoveries were finalized in 2019). It also faces market
risk arising from its clients' defaults on margin calls (i.e.,
StoneX may incur losses in excess of posted margins in the process
of liquidating defaulting clients' positions). These risks weigh on
our view of its risk-adjusted capitalization. However, growth in
capital and the higher RAC ratio, if maintained, could provide
sufficient capital to offset these risks. Moreover, StoneX's loss
history has improved, with bad debt expenses averaging close to
$14.6 million over the past four years, in line with management's
target of below 1% of operating revenue.
"We think StoneX has prudently managed its growth and acquisitive
strategy.While these factors increase risk, management has acquired
largely subscale businesses at reasonable prices that have
successfully diversified the franchise. For example, the firm's
2020 acquisition of Gain Capital, a U.K.-based retail broker
focused on foreign exchange contracts for differences and futures,
yielded benefits for StoneX both through expense reduction and by
moving Gain to a new platform that substantially grew revenue and
earnings by taking advantage of favorable market conditions."
StoneX's operating performance has been solid in recent years. Net
earnings have grown 34% on average annually since 2019, benefiting
from the more favorable commodities market, interest rates, and
StoneX's diverse mix of businesses with various drivers and cycles.
Since 2022, net interest income has surged as cash margins that
derivatives clients post to StoneX become more profitable. While
the earnings contribution of each business segment can be volatile,
these fluctuations largely offset one another, allowing
consolidated revenue and earnings to grow steadily.
The positive outlook also reflects peer relativities, including
with StoneX's closest rated peer, Marex. Marex Group PLC
(BBB-/Stable/A-3) has stronger capitalization (RAC ratio well above
10%) and lower operational risk (reflecting the absence of a
physical commodities business) than StoneX, and these remain key
reasons for the difference in ratings. That said, if StoneX
continued to improve its RAC ratio, maintained its recent solid
record on operational risk, and controlled bad debt expenses, the
gap in ratings could narrow, given StoneX's broader and more
diversified franchise.
S&P said, "Our issuer credit rating on StoneX ('BB-') is two
notches below the group credit profile ('bb+').This notching
reflects the firm's structural subordination as a nonoperating
holding company and the potential risk of regulatory interference
in dividends from its regulated subsidiaries. Although raising
StoneX's GCP to 'bbb-' would allow us to narrow the notching to one
notch (given the GCP is in the investment-grade category), we would
likely maintain the two-notch differential to reflect StoneX's high
double leverage (defined as holding company investments in
subsidiaries divided by holding company shareholders' equity),
which was 176% as of Dec. 31, 2023. StoneX uses its holding company
debt to downstream equity to its operating subsidiaries to maintain
strong regulatory capital. A ratio exceeding our 120% threshold
reflects higher risk due to increased dependence on subsidiaries'
liquidity.
"The positive outlook reflects recent improvements in StoneX's
capitalization, which, if sustained, could lead us to raise the
rating by one notch. It also reflects our expectation that the
firm's diversified businesses will continue to perform well, with
solid profitability and prudent management of risk exposures and
the acquisition strategy. We expect StoneX to maintain a RAC ratio
near 9%, a gross stable funding ratio above 100%, and a liquidity
coverage metric above 1x.
"In the next 12 months, we could raise our ratings if the company
maintains its recent record of lower risk while maintaining a RAC
ratio at or above 9% (versus 9.7% as of Dec. 31, 2023) and
continuing to demonstrate earnings resilience relative to peers."
Over the same time frame, S&P could revise the outlook to stable
if:
-- S&P expects the company's operating performance to deteriorate
or it sees evidence of increased risk appetite;
-- S&P expects the RAC ratio to fall close to 7%; or
-- S&P expects liquidity or funding to deteriorate.
TEHUM CARE: Bankruptcy Brings Unique Obstacles to Inmates
---------------------------------------------------------
Randi Love of Bloomberg Law reports that prison health company,
Tehum Care Services, bankruptcy poses unique hurdles to inmates.
A distressed prison health-care company is forcing complex
corporate bankruptcy machinations onto inmates, a group with
limited access to legal information.
Corizon Health Inc. isn't the first company to use the
controversial bankruptcy strategy known as the Texas Two-Step to
deal with its legal troubles. But it is the first to impose that
maneuver on prisoners, a population that faces more hurdles than
other types of litigants in reaching lawyers, experts, and court
filings needed to pursue a case.
If successful, the case could embolden other troubled prison
medical providers to also use the strategy to handle their
financial problems.
Hundreds of incarcerated people held personal injury claims against
Corizon when it spun off its liabilities into Tehum Care Services
Inc. and filed for bankruptcy in 2023. Now, those inmates or former
inmates, many without legal representation, must wait for Tehum's
next decision as to how it plans to resolve their claims—a
fraught task for any claimant, especially one behind bars.
"If they don't have information or can't access it or be informed
about it, they can't really do anything to protect their
interests," said Paul Wright, the founder of the Human Rights
Defense Center, a nonprofit advocating for incarcerated people's
civil rights.
A judge last week rejected Tehum's proposed $54 million settlement
of current and former prisoners' medical malpractice claims,
highlighting incarcerated people's lack of timely and reliable
access to court papers.
Judge Christopher M. Lopez of the US Bankruptcy Court for the
Southern District of Texas admonished the company and a committee
representing tort claimants for not confirming whether any
incarcerated people were "even aware that there is a settlement."
Tehum declined to comment for this story. The company still has the
chance to use bankruptcy to resolve litigation because Lopez denied
some tort claimants’ request to toss the case entirely.
Self-Representation
Approval of the settlement would have negated claimants' rights to
sue for more damages in state courts.
"If they approve a settlement, they are forcing people to take
whatever they give them, and that is not right," said 30-year-old
David Hall, a formerly incarcerated tort claimant. Hall injured his
wrist for life due to what he says was poor care behind bars in
2016. He had been in a Maryland jail for less than a year for
felony marijuana possession and a misdemeanor firearm charge.
Hall wants Tehum's bankruptcy dismissed so he and other tort
claimants can pursue their individual lawsuits.
Tehum has argued that pro se prisoners—or those representing
themselves—would be at a severe disadvantage without the
settlement because navigating the state court system is just as
complicated as dealing with the bankruptcy process.
But "that doesn't necessarily mean that a discriminatory and
coercive plan should be approved, only because the alternative is
that the civil court system is imperfect," said Jackie Aranda
Osorno, a senior attorney at Public Justice, a legal advocacy
nonprofit.
Finding Experts
Wright, of the Human Rights Defense Center, said prisoners
litigating in state courts must hire medical experts who can speak
to their injury to be able to recover damages. But many of the tort
claimants in Tehum's bankruptcy can’t afford a lawyer—let alone
experts, he said.
Hall, the Tehum tort claimant, was fortunate to get an outside
orthopedist to review his X-rays the Maryland jail took about two
months after his injury in 2016. The doctor saw his injury was a
severe fracture—not a slight one the jail had told him would
"self-heal," Hall said. Hall also found a medical expert to testify
at trial to confirm that he should have received prompt care.
Without that expert, Hall's chances of legal recovery would have
been minimal, his lawyer Chris Vasiliades of the Orshan Legal Group
said.
Hall won $770,000 from Corizon, and a Maryland appeals court
affirmed the judgment in February 2023—the day after Corizon
filed for bankruptcy. His claim is now among hundreds tied up in
the bankruptcy.
Getting Information
Prisoners' disadvantage in legal settings is compounded by the
complexity and speed of Tehum's bankruptcy, Public Justice's Aranda
Osorno said.
Prisoners must rely on the imperfect US mail system, and on a mail
room controlled by prison officers, to find out about lawsuits,
said Corene Kendrick, deputy director of the National Prison
Project at the American Civil Liberties Union.
Prisoners may receive filings weeks late—if they get them at
all.
In Tehum's case, claimant Arvant Kumar Tripati filed prison mail
logs last year that argued he received notice of two Tehum hearings
just one to two days before they happened, making attendance
impossible.
He is among several self-represented incarcerated claimants who
wrote to the court, with some saying they have little knowledge of
the case and asking the court to send them filings in prison.
Prison Health-Care Trouble
Tehum isn't the only prison health-care provider facing hundreds of
tort claims alleging poor medical care.
Armor Health Management LLC, another large prison health-care
provider, asked a Florida state court in October for permission to
assign its assets to an estate to be liquidated. Armor has about
$153 million in debt from wrongful death and medical malpractice
claims, as well as other claims to employees and attorneys.
"If you're dealing with services where there are claims of systemic
issues and harm, there is always a risk that new parties can be
harmed," said Samir Parikh, a professor at Lewis & Clark Law
School.
YesCare Corp., a Tehum affiliate that would also be freed from
litigation in the bankruptcy, got its contract to provide
health-care in the Maryland prison system extended last month
through the end of 2024, despite the Tehum bankruptcy. YesCare was
also awarded a three-year contract with the Lousiville Department
of Corrections last month.
"It's clear that pro se creditors are not being driven just by a
desire to seek justice for themselves, but also to hold Corizon
accountable more generally," Aranda Osorno of Public Justice said.
If successful, Tehum's case could provide "a blueprint for other
contractors to do the same thing," she said.
About Tehum Care Services
Tehum Care Services Inc., doing business as Corizon Health
Services
Inc., is a privately held prison healthcare contractor in the
United States. It is based in Brentwood, Tenn.
Tehum Care Services filed a petition for relief under Chapter 11
of
the Bankruptcy Code (Bankr. S.D. Tex. Case No. 23-90086) on Feb.
13, 2023. In the petition filed by Russell A. Perry, as chief
restructuring officer, the Debtor reported assets between $1
million and $10 million and liabilities between $10 million and
$50
million.
Judge Christopher M. Lopez oversees the case.
The Debtor tapped Gray Reed & McGraw, LLP as bankruptcy counsel;
Bradley Arant Boult Cummings, LLP, as special litigation counsel;
and Ankura Consulting Group, LLC, as financial advisor. Russell
A.
Perry, senior managing director at Ankura, serves as the Debtor's
chief restructuring officer. Kurtzman Carson Consultants, LLC, is
the claims, noticing and solicitation agent.
The U.S. Trustee for Region 7 appointed an official committee to
represent unsecured creditors in the Debtor's Chapter 11 case.
Stinson, LLP and Dundon Advisers, LLC, serve as the committee's
legal counsel and financial advisor, respectively.
TERRAFORM LABS: Founder Owes $5.3 Billion After Fraud Verdict
-------------------------------------------------------------
Elliot Weld of Law360 reports that the U.S. Securities and Exchange
Commission has asked a Manhattan federal judge to order bankrupt
cryptocurrency exchange Terraform Labs and its founder to pay
roughly $5.3 billion, weeks after a jury found them liable for a
massive fraud.
About Terraform Labs
Terraform Labs Pte. Ltd. -- https://www.terra.money -- is a
startup
that created Terra, a blockchain protocol and payment platform
used
for algorithmic stablecoins. It was co-founded by Do Kwon and
Daniel Shin in 2018 in Seoul, South Korea.
Terraform Labs introduced its first cryptocurrency token,
TerraUSD,
in 2019. Investment firms like Arrington Capital, Coinbase
Ventures, Galaxy Digital, and Lightspeed Venture Partners helped
Terraform Labs raise more than $200 million.
The collapse of the stablecoins TerraUSD (UST) and Luna in May
2022
caused the temporary suspension of the Terra network, wiping out
over $45 billion in market capitalization in a single week.
Both of Terra Form Labs' founders have encountered legal problems
as a result of the devaluation of the company's currency. In
September 2022, South Korean prosecutors filed a warrant for Do
Kwon's arrest. He was also added to Interpol's Red Notice list,
which urges other law enforcement to find and detain him.
Terraform Labs Pte. Ltd. sought relief under Chapter 11 of the
U.S.
Bankruptcy Code (Bankr. D. Del. Case No. 24-10070) on Jan. 22,
2024. In the petition filed by Chris Amani, as chief executive
officer, the Debtor estimated assets and liabilities between $100
million and $500 million each.
The Debtor is represented by:
Zachary I Shapiro, Esq.
Richards, Layton & Finger, P.A.
1 Wallich Street
#37-01
Guoco Tower 078881
THRASIO HOLDINGS: Unsecureds Will Get 0.06% of Claims in Plan
-------------------------------------------------------------
Thrasio Holdings, Inc., and its affiliates filed with the U.S.
Bankruptcy Court for the District of New Jersey a Second Amended
Disclosure Statement for the Joint Plan of Reorganization dated
April 18, 2024.
Founded in 2018, Thrasio evolved rapidly from a small start-up to
the largest aggregator of e-commerce brands, with more than 36
million custom orders in 2023 alone.
Headquartered in Walpole, Massachusetts, the Company has
approximately 415 employees in the United States, approximately 100
employees in China and 74 independent contractors across the world,
most of which work remotely. As of the Petition Date, the Debtors
have approximately $855.2 million in total funded debt
obligations.
Thrasio's operational turnaround significantly increased its
operational efficiency and margins, but did not address its balance
sheet or its liquidity needs. Servicing the Company's over-levered
capital structure continued to put pressure on the Company's
liquidity position and limit its growth opportunities, and the
Company needed an additional infusion of capital to implement the
next phase of its business plan. Consequently, in the spring of
2023, Thrasio engaged Centerview Partners LLC to advise on a
capital raise process targeting both third-party investors and the
Company's existing stakeholders. Around the same time, Thrasio also
engaged Kirkland & Ellis LLP as legal counsel to assist in
evaluating potential transactions.
Thrasio filed these Chapter 11 Cases to implement a comprehensive
financial and operational restructuring.
Prior to the Petition Date, Thrasio engaged in several months of
discussions with its stakeholders and investors on the terms of a
deleveraging transaction that would also provide growth capital to
support the next phase of the Company's operations. Those efforts
proved to be successful. On February 27, 2024, Thrasio entered into
a Restructuring Support Agreement with its lenders who,
collectively, hold approximately 81 percent of outstanding RCF
Loans and 88 percent of outstanding Term Loans and approximately
81.1 percent of the Company's total outstanding debt.
These Chapter 11 Cases, which are designed to expeditiously and
consensually address balance sheet issues, are the final step in
Thrasio's transformative efforts. The Debtors will continue their
efforts to garner additional support for the Plan in advance of
Confirmation.
The Debtors strongly believe that the Plan is in the best interests
of the Debtors' estates, and represents the best available
alternative at this time. Entering chapter 11 with strong consensus
and support will allow Thrasio to move swiftly through these cases,
maximize the value of its business, and ensure that its portfolio
of brands experiences minimal disruption. The Debtors are confident
that they can efficiently implement the restructuring set forth in
the Restructuring Support Agreement and emerge from these Chapter
11 Cases ready to resume their pre-restructuring business
activities in the ordinary course.
Class 4 consists of General Unsecured Claims. Except to the extent
that a Holder of a General Unsecured Claim agrees to a less
favorable treatment, in full and final satisfaction, settlement,
release, and discharge of and in exchange for each Allowed General
Unsecured Claim, each Holder of an Allowed General Unsecured Claim
shall receive its pro rata share of the GUC Recovery Pool. The
allowed unsecured claims total $421,932,974. This Class will
receive a distribution of 0.06% of their allowed claims.
Each Holder of an Allowed General Unsecured Claim will receive
their pro rata share of $250,000. The Debtors estimate that the
total amount of Allowed General Unsecured Claims will be
$421,932,974, which is comprised of (i) $66,732,974 of General
Unsecured Claims held by general unsecured creditors and (ii) an
estimated $355,200,000 of deficiency claims held by Holders of
First Lien Claims. 5 The final amount of General Unsecured Claims
(the "General Unsecured Claims Pool") shall be determined based on
the reconciliation of the Filed General Unsecured Claims after the
Bar Date, and likely after confirmation of the Plan.
Each Holder of an Allowed General Unsecured Claim will receive the
value of (i) the amount of such Holder's Allowed General Unsecured
Claim divided by the General Unsecured Claims Pool; multiplied by
(ii) $250,000. For example – a Holder of a $500,000 Allowed
General Unsecured Claim would calculate the value of such General
Unsecured Claim by (i) dividing $500,000 by $421,932,974 (equaling
$0.0012) and (ii) multiplying $0.0012 by $250,000, for a claim
value of $296.
The Reorganized Debtors will fund distributions under the Plan with
Cash on hand on the Effective Date, the revenues and proceeds of
all assets of the Debtors, the Exit Facilities, and the New Common
Stock.
A full-text copy of the Second Amended Disclosure Statement dated
April 18, 2024 is available at https://urlcurt.com/u?l=KhJdWH from
Kurtzman Carson Consultants, LLC, claims agent.
Proposed Co-Counsel to the Debtors:
Anup Sathy, P.C.
KIRKLAND & ELLIS LLP
KIRKLAND & ELLIS INTERNATIONAL LLP
300 North LaSalle Street
Chicago, Illinois 60654
Tel: (312) 862-2000
Fax: (312) 862-2200
E-mail: anup.sathy@kirkland.com
- and -
Matthew C. Fagen, P.C.
Francis Petrie, Esq.
Evan Swager, Esq.
601 Lexington Avenue
New York, New York 10022
Tel: (212) 446-4800
Fax: (212) 446-4900
E-mail: matthew.fagen@kirkland.com
francis.petrie@kirkland.com
evan.swager@kirkland.com
Proposed Co-Counsel to the Debtors:
Michael D. Sirota, Esq.
Warren A. Usatine, Esq.
Felice R. Yudkin, Esq.
Jacob S. Frumkin, Esq.
COLE SCHOTZ P.C.
Court Plaza North, 25 Main Street
Hackensack, New Jersey 07601
Tel: (201) 489-3000
E-mail: msirota@coleschotz.com
wusatine@coleschotz.com
fyudkin@coleschotz.com
jfrumkin@coleschotz.com
About Thrasio
Thrasio -- https://www.thrasio.com/ -- specializes in buying Amazon
third-party private label businesses. Its portfolio includes Angry
Orange pet odor eliminators and stain removers, Wise Owl Outfitters
camping and outdoor gear, and more than 200 other Amazon and
ecommerce brands. Thrasio was co-founded in 2018 by Joshua
Silberstein.
Thrasio has significant overseas operations and partnerships across
the world, including in the United Kingdom, Germany, and China.
Thrasio Holdings, Inc., and several affiliates sought protection
under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D.N.J. Lead
Case No. 24-11840) on Feb. 28, 2024, with $1 billion to $10 billion
in assets and $500 million to $1 billion in liabilities. Josh
Burke, the Debtors' chief financial officer, signed the petitions.
Judge Christine M. Gravelle oversees the cases.
The Debtors tapped Kirkland & Ellis, LLP, Kirkland & Ellis
International, LLP and Cole Schotz, P.C. as bankruptcy counsels;
Katten Muchin Rosenman LLP as special counsel; Centerview Partners,
LLC as investment banker; AlixPartners, LLP as financial advisor;
and KPMG LLP as tax consultant. Kurtzman Carson Consultants, LLC is
the Debtors' claims and noticing agent and administrative advisor.
An ad hoc group of first lien lenders retained Gibson, Dunn &
Crutcher, LLP as legal counsel and Sills Cummis & Gross PC as New
Jersey counsel.
ArentFox Schiff, LLP serves as counsel to Wilmington Savings Fund
Society, FSB, the DIP agent.
The prepetition first lien agent, Royal Bank of Canada, is
represented by Simpson Thacher & Bartlett, LLP.
On March 12, 2024, the Office of the United States Trustee for
Region 3 and Region 9 appointed an official committee of unsecured
creditors in these Chapter 11 cases. The committee tapped Morrison
& Foerster LLP and Kelley Drye & Warren LLP as counsel and
Province, LLC as financial advisor.
U.S. ACUTE CARE: Affirms 'B-' ICR on Refinancing, Outlook Stable
----------------------------------------------------------------
S&P Global Ratings affirmed its 'B-'issuer credit rating on U.S.
Acute Care Solutions LLC (USACS). At the same time, S&P assigned a
'B-' issue-level rating and '3' recovery rating (recovery
prospects: 30%-50%; rounded estimate: 50%) to the proposed revolver
and secured notes.
The stable outlook reflects S&P's expectation for a
low-single-digit percent increase in USACS' organic revenue, its
margin to improve compared with 2023, and free cash flow to debt to
remain below 4%.
USACS plans to issue $800 million secured notes and use the
proceeds mainly to repay its existing notes and revolver balance.
The transaction will modestly increase its S&P Global
Ratings-adjusted leverage.
The refinancing transaction will only modestly increase USACS' S&P
Global Ratings-adjusted leverage. USACS plans to issue $800 million
of senior secured notes maturing in 2029, the proceeds of which it
will use to repay $725 million of existing secured notes, the $40
million revolver balance, and $20 million of transaction fees, with
$15 million remaining for cash on balance sheet. The transaction
will modestly increase its S&P Global Ratings-adjusted leverage by
about half a turn and will delay the near-term maturities. S&P's
calculation of its debt of $1.6 billion for 2023 includes about
$800 million of preferred shares, which it treats as debt-like, and
we assume the company will make payment-in-kind (PIK) interest
payments on the preferred debt for 2024 and 2025.
USACS' improved operating performance will enable it to generate
modest discretionary cash flows after distributions to departing
employees. USACS experienced strong same-site volume growth of
about 3% in 2023, returning almost to pre-COVID-19 pandemic levels.
Overall, its revenue for 2023 increased about 8.5% (14% growth in
net patient service revenue). S&P expects revenue growth in the
mid-teens percent area for 2024, driven by organic growth in the
low-to-mid-single-digit precent area and the full-year impact of
acquisitions completed in 2023, as well as increased subsidies from
the hospitals. Its S&P Global Ratings-adjusted EBITDA margin for
2023 was 4.6%, significantly lower than our earlier forecast of
more than 9%. This is primarily due to onboarding of new hires
related to new sites and premium pay labor costs associated with
these sites, as well as a higher number of add-backs that we do not
consider in our EBITDA calculation.
USACS' performance has improved over the past two quarters due to
strong volume growth and improvements in its S&P Global
Ratings-adjusted EBITDA with some of the add-backs tapering off.
S&P expect its S&P Global Ratings-adjusted EBITDA margin will
improve at least 200 basis points (bps) for 2024 as
acquisition-related costs roll off, premium pay for new sites
decreases, labor situation eases, and non-recurring costs fades.
Pressure from increased physician compensation will somewhat offset
this.
S&P said, "We expect USACS' S&P Global Ratings-adjusted leverage
will remain high. Including the preferred debt in our calculation
of leverage as per our criteria, we estimate the company's S&P
Global Ratings-adjusted leverage will remain high at 13x-14x in
2024 and 2025 (6x-7x excluding preferred). Subject to the company's
restricted payment capacity, USACS has the option to redeem the
preferred shares at 5% premium before March 2025 and at par
thereafter. Apollo, the holder of the preferred shares, however,
has the right to request redemption of its investment beginning
March 5, 2026. USACS' Board, which is majority physician controlled
(Apollo has minority position) has 12 months to consider the
request. Apollo's preferred investment, however, does not have a
forced put right. If Apollo's preferred investment is not redeemed
by March 5, 2028, the distribution rate on the preferred will
increase in annual increments. We estimate the company's EBITDA
interest coverage (including PIK Interest) will remain below 1.5x
in 2024 and 2025."
Change Healthcare Cyber-attack. On Feb. 21, 2024, UnitedHealth
Group's Optum claims processing platform, Change Healthcare, was
hit by a cyber-attack. The event forced Change Healthcare to take
its systems offline for several weeks. Consequently, many health
care service providers, including USACS, were advised to disconnect
from Change Healthcare's information technology systems to avoid
the risk of a data breach. 28% of USACS' claims were processed
through Change, which have been redirected either to direct payor
connections or other clearing houses. S&P expects this to result in
delay in cash collections for a few quarters and impact working
capital, however, USACS has ample liquidity with cash on hand and
full availability under revolver after transaction close to pass
through this phase.
S&P said, "The stable outlook on USACS reflects our expectation for
continued low-single-digit percent organic growth, supplemented by
small tuck-in acquisitions and new sites growth. It also reflects
our projection that its EBITDA margin will improve with moderating
labor cost pressures and reduction of acquisition-related costs,
keeping its S&P Global Ratings-adjusted debt to EBITDA at 13x-14x
(6x-7x excluding preferred).
"Our credit measures include the company's preferred equity as
debt. We expect its discretionary cash flow will continue to be
burdened by distributions related to the redemption of common
equity held by departing employees and anticipate discretionary
cash flow to debt and EBITDA interest coverage will remain below 2%
and 1.5x, respectively.
"We could lower our rating on USACS if it experiences persistent
cash flow deficits that lead to constrained liquidity and an
unsustainable capital structure." This could occur if:
-- Its cash flows are continually burdened by increased staff
costs amid a tight labor market and higher-than-anticipated
acquisition and integration costs or other nonrecurring items;
-- It faces an unfavorable reimbursement environment due to
increased pressure from payors; or
-- It experiences unforeseen operational setbacks, such as the
loss of a major contract.
S&P said, "We could raise our rating on USACS if its debt to EBITDA
sustainably improves to below 8x and the company generates
sufficient free operating cash flow (FOCF) with FOCF/Debt greater
than 4% after covering its entire interest burden (including PIK
interest) and distributions to departing employees. This could
occur if the company demonstrates a sustainable improvement in its
operating margins, expanding its EBITDA margins and free cash flow
generation.
"Social factors are a negative consideration in our credit rating
analysis of USACS. Emergency rooms (ERs) have been slow to recover
from the effect of the COVID-19 pandemic. However, patient volumes
have trended stronger than expected over past 12 months post
pandemic. Given that the ER is a very high-cost site of care, in
longer term, we expect low growth in volumes as payors seek to move
volumes to lower-cost sites of care."
UNITI GROUP: Nears $15 Billion Combination Talks With Windstream
----------------------------------------------------------------
Ryan Gould and Gillian Tan of Bloomberg News reports that Uniti
Group Inc. is in advanced talks to reunite with telecommunications
provider Windstream in a merger that could be valued at up to $15
billion, including debt, according to people familiar with the
matter. Uniti rose as much as 13%.
The companies — whose separation a decade ago led to
Windstream’s bankruptcy — could announce a merger within a week
or so, said the people, who asked to not be identified because the
details aren’t public. Nothing has been finalized and it's
possible the timing could change or talks could fall through, the
people added.
About Uniti
Headquartered in Little Rock, Arkansas, Uniti --
http://www.uniti.com-- is an internally managed real estate
investment trust. It is engaged in the acquisition and
construction of mission critical communications infrastructure,
and
is a provider of wireless infrastructure solutions for the
communications industry. As of June 30, 2021, Uniti owns
approximately 123,000 fiber route miles, 7.1 million fiber strand
miles, and other communications real estate throughout the United
States.
Uniti Group reported a net loss of $718.81 million for the year
ended Dec. 31, 2020, compared to net income of $10.91 million for
the year ended Dec. 31, 2019. As of June 30, 2021, the Company
had
$4.75 billion in total assets, $6.88 billion in total liabilities,
and a total shareholders' deficit of $2.13 billion.
* * *
In March 2020, S&P Global Ratings placed all ratings on U.S.
telecom REIT Uniti Group Inc., including the 'CCC-' issuer credit
rating, on CreditWatch with positive implications. The
CreditWatch
placement follows the company's announcement it reached an
agreement in principle with its largest tenant Windstream Holdings
Inc. to resolve all legal claims it asserted against Uniti in the
context of Windstream's bankruptcy proceedings.
US ACUTE CARE: Moody's Rates New $800MM Senior Secured Notes 'B3'
-----------------------------------------------------------------
Moody's Ratings assigned a B3 rating to U.S. Acute Care Solutions,
LLC's ("USACS" or "the company") proposed $800 million offering of
senior secured notes due in 2029. USACS intends to use the net
proceeds from this offering to repay the existing senior secured
notes due 2026 and the outstanding balance on the first lien
secured revolving credit facility (not rated). Concurrent with the
proposed senior secured notes offering, the company also plans to
upsize existing revolver capacity from $125 million to $170 million
and extend the revolver maturity to 91 days before the maturity of
the proposed senior secured notes.
Moody's also affirmed USACS' B3 Corporate Family Rating, B3-PD
Probability of Default Rating and the outlook was maintained at
stable. The affirmation reflects reduced refinancing risk as the
proposed transaction will push debt maturities to 2029. Moody's
estimates that the company's financial leverage will remain in the
low-to-mid 5.0 times range after the proposed refinancing
transaction closes.
With the increase in interest rates, the difference between the
company's cost of preferred capital and senior secure debt will
narrow significantly when the company refinances its existing
senior secured notes. Given that the higher cost of preferred
capital financing is offset by flexibility of paying preferred
share dividend in-kind, Moody's believes that the company will not
have a compelling reason to replace its preferred capital with debt
in the near term (the company's preferred shares became callable by
USACS in March 2024). However, while the preferred shareholders do
not have a put right, Moody's notes the risk associated with the
preferred shareholders' option to increase dividend rate starting
from March 2028, which could incentivize USACS in the next 3-4
years to swap at least a portion of preferred capital with debt.
RATINGS RATIONALE
The B3 CFR reflects USACS' strong market position as an emergency
department physician staffing provider, moderately high financial
leverage, and aggressive financial policy including the execution
risk associated with an active debt-funded acquisition strategy.
Further, USACS has some geographic concentration with Texas,
Maryland and Ohio representing a significant portion of business
volumes.
The B3 CFR is supported by USACS' strong competitive position in
the markets where it operates. The company has relationships with a
majority of the top ten health systems in the US. USACS' rating
incorporates the benefits of more than 95% ownership by company's
physicians. Such ownership results in high alignment between the
interests of the company and its physician-owners. However, these
benefits are partially offset by the risk that the company (which
is a non-public company) will need to "buy out" physicians who seek
to retire or otherwise leave the organization, possibly by issuing
debt.
Moody's also incorporates the event risk posed by a sizeable
portion of preferred equity funding in the company's capital
structure. Apollo Global Management, Inc.'s Hybrid Value Fund is
the majority holder of the preferred investment in USACS. Apollo
has the right to request the redemption of its preferred investment
beginning March 5, 2026. However, with a minority position on the
USACS Board, Apollo cannot unilaterally force a sale or IPO of the
company. If Apollo's preferred investment is not redeemed by March
5, 2028, the distribution rate on the preferred investment will
increase. The callability of preferred shares, along with
provisions related to dividend escalation, makes it likely that the
company may replace its preferred shares, at least partially, with
debt in the next 3-4 years, thereby increasing financial leverage.
The rating also reflects the company's good liquidity profile. The
company had approximately $4.2 million in cash and $83 million
available under its $125 million revolver (unrated) at the end of
December 2023. Once the proposed refinancing transaction concludes,
the company's revolver size will expand to $170 million and it will
be fully available. Moody's estimate that the company will generate
approximately $50-$100 million operating cash flow in the next 12
months. While the company's capital expenditure requirements are
small (
VALEANT PHARMA: Invesco Exchange Marks $45MM Loan at 20% Off
------------------------------------------------------------
Invesco Exchange-Traded Fund Trust II has marked its $45,000,000
loan extended to Valeant Pharmaceuticals International, Inc to
market at $35,915,612 or 80% of the outstanding amount, as of
February 29, 2024, according to a disclosure contained in Invesco
Exchange's Form N-CSR for the Fiscal year ended February 29, 2024,
filed with the Securities and Exchange Commission on April 25,
2024.
Invesco Exchange is a participant in a Term Loan B (Canada) to
Valeant Pharmaceuticals International, Inc. The loan accrues
interest at a rate of 10.67% (1 mo. SOFR + 5.35%) per annum. The
loan matures on February 1, 2027.
Invesco Exchange was organized as a Massachusetts business trust
and is authorized to have multiple series of portfolios, an
open-end management investment company registered under the
Investment Company Act of 1940, as amended.
Invesco Exchange's fiscal year end August 31.
Invesco Exchange is led by Brian Hartigan, President; and Kelli
Gallegos, Treasurer. The fund can be reach through:
Invesco Exchange-Traded Fund Trust II
3500 Lacey Road
Downers Grove, IL 60515
Tel: (800) 983-0903
Headquartered in Laval, Quebec, Valeant Pharmaceuticals
International, Inc. is a global company that develops, manufactures
and markets a range of pharmaceutical, medical device and
over-the-counter products, primarily in the therapeutic areas of
eye health, gastroenterology and dermatology.
VERICAST CORP: Faces Digital, Print Marketing Unit Sale Pushback
----------------------------------------------------------------
Reshmi Basu of Bloomberg News reports that Perelman's Vericast
tussles with lenders over debt terms of sale.
Ronald Perelman's Vericast Corp. is facing pushback from lenders
over debt terms tied to plans to sell its digital and print
marketing division to R.R. Donnelley & Sons Co., according to
people with knowledge of the matter.
Lenders are asking for more protections in exchange for waiving a
covenant that would pave the way for the sale of one of the
company's most valuable assets, said the people, who asked not to
be identified because the discussions are private. The talks remain
active after more than a month, and a deal may still be reached,
they said.
About Vericast Corporation
Headquartered in San Antonio, TX, Vericast Corp. is a provider of
check and check related products, direct marketing services and
customized business and home office products. Its Valassis
division offers clients mass delivered and targeted programs to
reach consumers primarily consisting of shared mail, newspaper and
digital delivery in addition to coupon clearing and other
marketing
and analytical services. The company's 2020 annual revenue was
$2.6 billion. Vericast is owned by MacAndrews & Forbes Holdings,
Inc., a wholly owned entity controlled by Ronald O. Perelman.
VERMILLION AND SPEAR: Case Summary & Two Unsecured Creditors
------------------------------------------------------------
Debtor: Vermillion and Spear, LLC
1460 Ritchie Highway
Suite 205
Arnold, MD 21012
Business Description: The Debtor is the owner of a real property
located at 1254 Washington Drive, Annapolis,
MD having a current value of $1.3 million.
Chapter 11 Petition Date: April 30, 2024
Court: United States Bankruptcy Court
District of Maryland
Case No.: 24-13626
Judge: Hon. David E. Rice
Debtor's Counsel: Geri Lyons Chase, Esq.
LAW OFFICE OF GERI LYONS CHASE
2007 Tidewater Colony Drive
Suite 2B
Annapolis, MD 21401
Tel: 410-573-9004
Fax: 410-630-5767
Email: gchase@glchaselaw.com
Total Assets: $1,300,000
Total Liabilities: $1,000,850
The petition was signed by Frederick Vermillion as managing
member.
A full-text copy of the petition containing, among other items, a
list of the Debtor's two unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/PIZDGYY/Vermillion_and_Spear_LLC__mdbke-24-13626__0001.0.pdf?mcid=tGE4TAMA
VVI HOLDINGS: Case Summary & Three Unsecured Creditors
------------------------------------------------------
Debtor: VVI Holdings LLC
8067 Croom Road
Upper Marlboro, MD 20772
Business Description: VVI Holdings is the owner of three
properties, all located in Maryland, having
a total current value of $3.61 million.
Chapter 11 Petition Date: April 30, 2024
Court: United States Bankruptcy Court
District of Maryland
Case No.: 24-13627
Judge: Hon. Lori S. Simpson
Debtor's Counsel: Geri Lyons Chase, Esq.
LAW OFFICE OF GERI LYONS CHASE
2007 Tidewater Colony Drive
Suite 2B
Annapolis, MD 21401
Tel: 410-573-9004
Fax: 410-630-5767
Email: gchase@glchaselaw.com
Total Assets: $3,609,000
Total Liabilities: $2,222,795
The petition was signed by Frederick Vermillion as managing
member.
A full-text copy of the petition containing, among other items, a
list of the Debtor's three unsecured creditors is available for
free at PacerMonitor.com at:
https://www.pacermonitor.com/view/P5YXWPA/VVI_Holdings_LLC__mdbke-24-13627__0001.0.pdf?mcid=tGE4TAMA
WEWORK INC: Creditors Seek Negotiations With Possible Buyers
------------------------------------------------------------
Steven Church of Bloomberg News reports that coworking giant WeWork
Inc. should be forced to negotiate with potential buyers, possibly
including co-founder Adam Neumann, as well as given a 30-day
deadline to come up with a plan to exit bankruptcy, a panel of
lower-ranking creditors said in a court filing.
Squabbling among company managers, senior lenders and longtime
backer SoftBank Group Corp. has stalled the revitalization of
WeWork and its various units, lawyers for an official committee of
unsecured creditors told the judge overseeing the company’s
Chapter 11 bankruptcy.
About WeWork Inc.
New York, NY-based WeWork Inc. is a global flexible workspace
provider, serving a membership base of businesses large and small
through its network of 779 Systemwide Locations, including 622
Consolidated Locations as of December 2022.
WeWork Inc. and its affiliates sought relief under Chapter 11 of
the Bankruptcy Code (Bankr. D.N.J. Case No. 23-19865) on Nov. 6,
2023. In its petition, WeWork Inc. reported $19 billion of
liabilities and $15 billion of assets.
The Debtors tapped Kirkland & Ellis LLP and Kirkland & Ellis
International LLP, Cole Schotz PC, and Munger, Tolles & Olson LLP
as counsel; Alvarez & Marsal North America LLC and Province, LLC
as
financial advisors; PJT Partners LP as investment banker; and
McManimon, Scotland & Baumann, LLC as local counsel. Softbank is
represented by Weil Gotshal & Manges LLP and Wollmuth Maher &
Deutsch LLP as legal counsel and Houlihan Lokey Capital as
financial advisor.
The Ad Hoc Group of First Lien and Second Lien Lenders is
represented by Davis Polk & Wardwell LLP (Eli Vonnegut, Elliot
Moskowitz, Natasha Tsiouris, Jonah Peppiatt) and Greenberg Traurig
LLP (Alan Brody) as legal counsel and Ducera Partners LLC as
financial advisor.
XPLORE INC: Downgrades ICR to 'D' on Missed Interest Payments
-------------------------------------------------------------
S&P Global Ratings lowered all its ratings, including the 'CCC-'
issuer credit rating, on Canada-based rural broadband provider
Xplore Inc. to 'D'.
On April 1, 2024, Xplore amended its credit agreement with its
first- and second-lien debt lenders and obtained a grace period
till May 3, 2024, for its interest payments due in late-March 2024.
S&P said, "Based on our criteria, payments must be made within,
earlier of the stated grace period or 30 calendar days from the
last payment date. We believe 30 calendar days have now elapsed as
of April 26 2024. Therefore, under this scenario, in our view, the
lenders have received less than promised under terms of the
original obligation and the timing of payments are delayed. We view
this as tantamount to default and hence lowered the ratings to
'D'."
New Brunswick, Canada-based Xplore is Canada's largest
rural-focused broadband service provider. The company provides
broadband internet access, applications, and accessories to about
321,000 residential and commercial subscribers in rural markets
across Canada using wireless, satellite, and fiber technologies.
YELLOW CORP: Creditor Committee Supports Pension Fund Fight
-----------------------------------------------------------
Ben Zigterman of Law360 reports that the official committee of
unsecured creditors in Yellow Corp.'s Chapter 11 bankruptcy has
largely backed an objection from the debtor to several pension
plans' claims for retirement-fund withdrawal liability, while
saying it hopes the issues can be resolved quickly to reduce
costs.
About Yellow Corporation
Yellow Corporation -- http://www.myyellow.com/-- operates
logistics and less-than-truckload (LTL) networks in North America,
providing customers with regional, national, and international
shipping services throughout. Yellow's principal office is in
Nashville, Tenn., and is the holding company for a portfolio of
LTL
brands including Holland, New Penn, Reddaway, and YRC Freight, as
well as the logistics company Yellow Logistics.
Yellow Corporation and 23 affiliates concurrently filed voluntary
petitions for relief under Chapter 11 of the Bankruptcy Code
(Bankr. D. Del. Lead Case No. 23-11069) on August 6, 2023, before
the Hon. Craig T. Goldblatt. As of March 31, 2023, Yellow
Corporation had $2,152,200,000 in total assets against
$2,588,800,000 in total liabilities. The petitions were signed by
Matthew A. Doheny as chief restructuring officer.
The Debtors tapped Kirkland & Ellis, LLP as restructuring counsel;
Pachulski Stang Ziehl & Jones, LLP as Delaware local counsel;
Kasowitz, Benson and Torres, LLP as special litigation counsel;
Goodmans, LLP as special Canadian counsel; Ducera Partners, LLC,
as
investment banker; and Alvarez and Marsal as financial advisor.
Epiq Bankruptcy Solutions is the claims and noticing agent.
Milbank LLP serves as counsel to certain investment funds and
accounts managed by affiliates of Apollo Capital Management, L.P.
while White & Case, LLP and Arnold & Porter Kaye Scholer, LLP
serve
as counsels to Beal Bank USA and the U.S. Department of the
Treasury, respectively.
On Aug. 16, 2023, the U.S. Trustee for Region 3 appointed an
official committee of unsecured creditors in the Chapter 11 cases.
The committee tapped Akin Gump Strauss Hauer & Feld, LLP and
Benesch, Friedlander, Coplan & Aronoff, LLP as counsels; Miller
Buckfire as investment banker; and Huron Consulting Services, LLC,
as financial advisor.
ZUNIGA 23732: Voluntary Chapter 11 Case Summary
-----------------------------------------------
Debtor: Zuniga 23732, LLC
23679 Calabasas Rd.
Calabasas, CA 91302
Chapter 11 Petition Date: April 29, 2024
Court: United States Bankruptcy Court
Central District of California
Case No.: 24-10704
Debtor's Counsel: Thomas B. Ure, Esq.
URE LAW FIRM
8280 Florence Avenue, Suite 200
Downey, CA 90240
Tel: 213-202-6070
Fax: 213-202-6075
Email: tom@urelawfirm.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Roberta Koehl as managing member.
The Debtor stated it has no unsecured creditors.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/5MURZDA/Zuniga_23732_LLC__cacbke-24-10704__0001.0.pdf?mcid=tGE4TAMA
[*] Small-Business Bankruptcy Law Helps Creditors
-------------------------------------------------
Evan Ochsner of Bloomberg Law reports that a popular bankruptcy law
meant as a boon to small businesses is also helping their
creditors.
Congress created the program, known as Subchapter V, about five
years ago to make it easier and cheaper for small businesses to to
shed debt through bankruptcy—then keep their businesses open. But
critics of the law, including banking trade groups, have argued it
risks "severely curtailing" creditors' rights.
A task force at the American Bankruptcy Institute sought to study
how businesses and creditors have fared under the program, which
risks a drastic narrowing this summer if Congress fails to extend
certain pandemic-era modifications.
"The task force's study did not uncover any evidence indicating
that creditors are doing worse under the subchapter than they would
under any other scenario under bankruptcy law or state law,"
Alexandra Sickler, a bankruptcy law professor at the University of
North Dakota, said.
Bankruptcies filed under Subchapter V now make up about 44% of all
Chapter 11 filings last year, according to data analyzed by
University of Illinois Law professor Bob Lawless. And it has
achieved its goals of making it easier for small businesses to use
and emerge from bankruptcy, according to an April 19, 2024 report
from the task force.
Congress raised the debt cutoff to $7.5 million for businesses to
qualify for Subchapter V—but that debt cap will revert back to
$2.7 million this summer unless lawmakers extend it, meaning fewer
businesses would be eligible. Sen. Dick Durbin (D-Ill.) introduced
a bill (S. 4150) last week that would keep the higher limit for
another two years.
"The data show that confirmation in Subchapter V cases occurs more
often, more quickly, and at lower cost than in non-Subchapter V
small business cases and standard Chapter 11 cases, and that
creditors are receiving more money in Subchapter V," the report
said.
Bankers' Concerns
The program makes several changes to traditional bankruptcy
practices, like modifying the so-called absolute priority rule that
requires certain creditors, like banks, to be paid in full before
other, unsecured creditors.
The American Bankers Association and the Independent Community
Bankers of America have warned that the additional flexibility
given to debtors scales back creditors' rights.
"As noted by our members, the elimination of the absolute priority
rule and the right of creditors to vote on a plan of reorganization
removed key oversight and accountability mechanisms," the trade
groups said in a letter last fall.
Allowing the cost cap to remain at $7.5 million would likely lead
to higher borrowing costs for small businesses, the trade groups
said, arguing that the program’s expansion was meant to be
temporary in order to help small businesses during the pandemic.
The higher debt limit was extended again in 2022.
Averting Liquidation
One broad way that Subchapter V benefits creditors is by getting
more reorganization plans approved, thereby averting liquidation.
That ends up helping creditors, too, as liquidated companies
can’t pay their debts, said Megan Murray, a founder of firm
Underwood Murray PA, and a co-chair of ABI's task force.
For example, a business that survives for just a couple years
thanks to the program means "those creditors are receiving two and
a half years of payments as compared to zero," Murray, who has
experience representing debtors and creditors, said at an ABI press
conference about its report last week.
According to the ABI study, half of Subchapter V cases result in
confirmed plans, up from about a quarter prior to the program's
existence. The study focused on debtors with assets or liabilities
under $10 million for the period before Subchapter V existed.
And just under 70% of Subchapter V plans won consent from all
creditor groups, the study found.
Judge Michelle M. Harner of the US Bankruptcy Court for the
District of Maryland said creditors are still getting used to the
differences between traditional Chapter 11 cases and those filed
under Subchapter V, which include a faster timeline.
"All parties—debtors and creditors—are still figuring out how
the system works and might affect them," Harner said.
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
On Thursdays, the TCR delivers a list of recently filed
Chapter 11 cases involving less than $1,000,000 in assets and
liabilities delivered to nation's bankruptcy courts. The list
includes links to freely downloadable images of these small-dollar
petitions in Acrobat PDF format.
Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.
Monthly Operating Reports are summarized in every Saturday edition
of the TCR.
The Sunday TCR delivers securitization rating news from the week
then-ending.
TCR subscribers have free access to our on-line news archive.
Point your Web browser to http://TCRresources.bankrupt.com/and use
the e-mail address to which your TCR is delivered to login.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Philadelphia, Pa., USA.
Randy Antoni, Jhonas Dampog, Marites Claro, Joy Agravante,
Rousel Elaine Tumanda, Joel Anthony G. Lopez, Psyche A. Castillon,
Ivy B. Magdadaro, Carlo Fernandez, Christopher G. Patalinghug, and
Peter A. Chapman, Editors.
Copyright 2024. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers. Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.
The TCR subscription rate is $975 for 6 months delivered via
e-mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance thereof
are $25 each. For subscription information, contact Peter A.
Chapman at 215-945-7000.
*** End of Transmission ***