/raid1/www/Hosts/bankrupt/TCR_Public/240607.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Friday, June 7, 2024, Vol. 28, No. 158
Headlines
185 BAINBRIDGE: Samuel Dawidowicz Named Subchapter V Trustee
22ND CENTURY: Reports $5.7MM Net Loss in Q1 2024
25 JAY STREET: Wins Interim Cash Collateral Access
8-10 LEEDS: Case Summary & Three Unsecured Creditors
8434 ROCHESTER: Court OKs Cash Collateral Access on Final Basis
ACCELERATE DIAGNOSTICS: Back in Compliance With Nasdaq Listing Rule
ACROSS INC: Hires Madden Consulting and Valuation as Bookkeeper
ACTION ENVIRONMENTAL: Moody's Rates New $100MM 1st Lien Loan 'B2'
ALPINE 4 HOLDINGS: Widens Net Loss to $40.96 Million in Q3 2023
ALVEERU INC: Voluntary Chapter 11 Case Summary
AMBRI INC: Seeks to Hire Epiq Corporate Restructuring as Advisor
AMC ENTERTAINMENT: S&P Upgrades ICR to 'CCC+', Outlook Negative
AMERICAN DENTAL: Court OKs Interim Cash Collateral Access
AMERICAN TIRE: S&P Lowers ICR to 'CCC+', Outlook Negative
AMYNTA AGENCY: Moody's Affirms B3 CFR & Cuts First Lien Loan to B
ANS NEWCO: Case Summary & 12 Unsecured Creditors
ARCHDIOCESE OF BALTIMORE: Hundreds File Sex Abuse Claims
ARIEL LLC: Bid to Use Cash Collateral Denied
ATLANTIC NEUROSURGICAL: Case Summary & 20 Top Unsecured Creditors
AULT ALLIANCE: Enters Into $20MM Credit Pact With OREE & Helios
AURA SYSTEMS: Incurs $4.22 Million Net Loss in FY Ended Feb. 29
AVALON GLOBOCARE: Issues $2.85MM 13% Convertible Note to Mast Hill
BAR 13: Gerard Luckman of Forchelli Named Subchapter V Trustee
BEST BUILD 1: Voluntary Chapter 11 Case Summary
BION ENVIRONMENTAL: Accepts Resignation of O'Neill as CEO, Director
BION ENVIRONMENTAL: Reports Net Loss of $538,145 in Fiscal Q3
BLUE STAR: Bid Price Rule Compliance Deadline Extended by Nasdaq
BRIDGE DIAGNOSTICS: Hires Crown Medical Collections as Counsel
BULLDOG PURCHASER: Moody's Ups CFR to B3 on Refinancing Transaction
CALSELECT INSURANCE: Seeks Interim Cash Collateral Access
CAREERBUILDER LLC: Moody's Lowers CFR & First Lien Term Loan to Ca
CFN ENTERPRISES: Posts $647,571 Net Loss in Q1 2024
CHAMPION DEVELOPMENT: Hires Munsch Hardt Kopf & Harr as Counsel
CIBUS INC: All Three Proposals Passed at Annual Meeting
CITIZENEX LLC: Nathan Smith Named Subchapter V Trustee
COALINGA, CA: S&P Affirms 'BB+' Rating on Water and Sewer Bond
COASTAL CONSTRUCTION: Seeks Chapter 11 Bankruptcy Protection
COGENT COMMUNICATIONS: Moody's Rates New $300MM Unsec. Notes 'B3'
COGENT COMMUNICATIONS: S&P Rates New Senior Unsecured Notes 'B+'
COLEGIO OTOQUI: Case Summary & Eight Unsecured Creditors
CONVERGEONE HOLDINGS: Creditors Slam Chapter 11 Plan
COPA LLC: Court OKs Cash Collateral Access Thru June 20
CRAFTWORK CARPENTRY: Wins Interim Cash Collateral Access
CXOSYNC LLC: Case Summary & 20 Largest Unsecured Creditors
DIVERSIFIED HEALTHCARE: All 3 Proposals Passed at Annual Meeting
DS ADMIRAL: Moody's Assigns First Time 'B3' Corp. Family Rating
DTH 215 VENTURE: Case Summary & 20 Largest Unsecured Creditors
DUSOBOX CORPORATION: Seeks to Extend Plan Exclusivity to June 11
EIGER BIOPHARMACEUTICAL: Lender Challenges Court's Venue Decision
EL DORADO GAS: Trustee to Sell Property by Auction, Direct Sale
EPIC! CREATIONS: Involuntary Chapter 11 Case Summary
EUROASIA PRODUCTS: Wins Cash Collateral Access Thru June 27
EXPRESS INC: Creditors Oppose Lead Bidder's Fees
EXTERIOR CONSTRUCTION: Unsecureds to Get Nothing in Plan
FOCUS UNIVERSAL: Reports $1.3MM Net Loss in Q1 2024
FORTREA HOLDINGS: Moody's Cuts CFR to B1 & Alters Outlook to Neg.
GATHERING PLACE: Unsecureds to be Paid in Full in Sale Plan
GFH LTD: Files Emergency Bid to Use Cash Collateral
GLENDA SWARTZ: James Coutinho Named Subchapter V Trustee
GLUCKO TRACK: Reports Net Loss of $2.9MM in Q1 2024
GOL LINHAS: In Talks With Shareholder for Stock Deal
GRAND FUSION: Behrooz Vida Named Subchapter V Trustee
HEBNER DIESEL: William Harris Named Subchapter V Trustee
HELIUS MEDICAL: Regains Compliance With Nasdaq Listing Requirement
HUTCHENS PERRY: Beverly Brister Named Subchapter V Trustee
IHEARTMEDIA INC: Hires Advisers After Revenue Dips
INFINITE PROPERTIES: Starts Subchapter V Bankruptcy Process
INSIGHT LIDAR: Case Summary & 12 Unsecured Creditors
INSIGHT PHOTONIC: Case Summary & 20 Largest Unsecured Creditors
INTERSTATE WASTE: S&P Rates First-Lien Delayed-Draw Term Loan 'B'
INTRUSION INC: Swaps 339 Series A Shares for 243,725 Common Shares
J.H. LLC: Voluntary Chapter 11 Case Summary
JUN ENTERPRISES: Ruby's Academy Seeks Subchapter V Bankruptcy
KIDWELL GROUP: Court OKs Cash Collateral Access Thru July 2
KULR TECHNOLOGY: Reports Net Loss of $5MM in Q1 2024
LA HACIENDA: Orrick & Klehr Represent Trails End United for Change
LADDER CAPITAL: Fitch Affirms 'BB+' LongTerm IDR, Outlook Stable
LADRX CORP: Posts $186,735 Net Income in Q1 2024
LEWISBERRY PARTNERS: U.S. Trustee Unable to Appoint Committee
LINCOLN PLACE: Case Summary & Two Unsecured Creditors
LOCAL GYM: Court OKs Interim Cash Collateral Access
LTL MANAGEMENT: J&J Accuses Beasley of 'Gamesmanship'
M AND J: Court OKs Cash Collateral Access Thru Aug 8
M&G TRANSPORTATION: Court OKs Cash Collateral Access on Final Basis
MASONITE INT'L: Moody's Withdraws 'Ba1' CFR on Acquisition Closing
MEDLINE BORROWER: Fitch Affirms 'B+' LongTerm IDR, Outlook Stable
MICCARTAR LAND: Voluntary Chapter 11 Case Summary
MIST HOLDINGS: Seeks to Extend Plan Exclusivity to August 12
MMA LAW FIRM: Court OKs Cash Collateral Access Thru July 31
MRRC HOLD CO: Rubio's Case Summary & 30 Top Unsecured Creditors
NATIONAL RIFLE: Former CFO Reaches Deal With NY AG Prior Trial
NB PARK: Seeks Court Nod to Transfer Interest in Provo Property
NEVER SLIP: Court OKs Sale of Assets to SFC Acquisition
NEWRUE 21: Intends to Close All Its Stores in Chapter 11
NEXTDECADE CORP: All Four Proposals Approved at Annual Meeting
NIDA PROPERTY: Voluntary Chapter 11 Case Summary
NITRO FLUIDS: Cokinos Young Represents Cummins & Proppant
NORTH GEORGIA NURSING: Wins Cash Collateral Access on Final Basis
NORWOOD RESTAURANTS: Case Summary & 13 Unsecured Creditors
NXT ENERGY: MCAPM LP Acquires US$2 Million Convertible Debenture
OECONNECTION LLC: S&P Withdraws 'B-' Issuer Credit Rating
ONEDIGITAL BORROWER: S&P Rates New $2.07BB 1st-Lien Term Loan 'B'
ORTHOCARE SOLUTIONS: Wins Cash Collateral Access Thru Aug 31
OSHKOSH REFURB: Amends Plan to Include Great America Claims Details
PARK RIVER: Fitch Affirms 'B' LongTerm IDR, Outlook Stable
PIGEON FREIGHT: Voluntary Chapter 11 Case Summary
PRIMARY PRODUCTS: Fitch Affirms 'BB' LongTerm IDR, Outlook Stable
PSN REALTY: Voluntary Chapter 11 Case Summary
PUBLIC CRAFT: Lakefront Brewery Intends to Buy Biz. in Chapter 11
PW KRAV 2018: Unsecureds Will Get 1.17% of Claims over 60 Months
REECE GREEN: Court OKs Interim Cash Collateral Access
RENO CITY CENTER: Unsecureds to be Paid in Full in Plan
RJQ COMPANIES: Unsecureds Will Get 6% of Claims over 5 Years
ROMANCE WRITERS: Files for Chapter 11 Bankruptcy
RWC GROUP: Court OKs $1MM DIP Loan From Edge Group
SAM ASH: Closes 100-Year Old Store in Philadelphia, Pennsylvania
SCIENTIFIC GAMES: S&P Rates New Repriced Secured Term Loan B 'B'
SHAMROCK INDUSTRIES: Unsecureds to Get $2,400/Month for 60 Months
SIR TAJ: Court OKs Deal on Cash Collateral Access
SOUTH HILLS: Hearing on Bid Rules Set for June 13
SPIRIT AIRLINES: S&P Lowers ICR to 'CCC' on Approaching Maturities
SPLASH BEVERAGE: Reports $4.7MM Net Loss in Q1 2024
ST. CLAIR COUNTY SD: Moody's Affirms 'Ba1' Issuer & GOULT Ratings
STARCO BRANDS: Reports $4.3MM Net Loss in Q1 2024
STEWARD HEALTH: Meland Budwick Advises Personal Injury Claimants
SUNMEADOWS LLC: U.S. Trustee Appoints Creditors' Committee
SUPPLY SOURCE: U.S. Trustee Appoints Creditors' Committee
SYNAPSE FINANCIAL: Judge Barash Appoints Independent Ch. 11 Trustee
TAKEOFF TECHNOLOGIES: Hits Chapter 11 Bankruptcy Protection
TOWNSQUARE MEDIA: S&P Raises ICR to 'B+', Outlook Stable
TRP BRANDS: Seeks to Extend Plan Exclusivity to Sept. 29
UNDERGROUND SOLUTIONS: Wins Cash Collateral Access Thru July 9
UPHEALTH INC: Posts $25.42 Milion Net Income in First Quarter
US NEUROSURGICAL: Posts $312,000 Net Loss in Q1 2024
VALLEY PROPERTY: Seeks Court Nod to Sell Palm Springs Property
VENUS CONCEPT: Regains Compliance With Nasdaq's Equity Rule
VILLAGE OAKS SENIOR: Seeks Chapter 11 Bankruptcy Protection
VIVO TECHNOLOGIES: Reaches Stipulation with McCormick; Amends Plan
WATER GREMLIN: Seeks to Extend Plan Exclusivity to Sept. 21
WYTHE BERRY: Chapter 11 Plans Confirmed by Judge
ZACHRY HOLDINGS: U.S. Trustee Appoints Creditors' Committee
[*] Corporate Bankruptcies Trend Up in April 2024
[^] BOOK REVIEW: The Heroic Enterprise
*********
185 BAINBRIDGE: Samuel Dawidowicz Named Subchapter V Trustee
------------------------------------------------------------
The U.S. Trustee for Region 2 appointed Samuel Dawidowicz as
Subchapter V trustee for 185 Bainbridge Street, LLC.
Mr. Dawidowicz will be paid an hourly fee of $525 for his services
as Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. Dawidowicz declared that he is a disinterested person according
to Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Samuel Dawidowicz
215 East 68th Street
New York, NY 10065
Phone: (917) 679-0382
About 185 Bainbridge Street
185 Bainbridge Street, LLC sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. E.D.N.Y. Case No. 24-42074) on May
16, 2024, with $1 million to $10 million in both assets and
liabilities. Jacintha Tucker, member, signed the petition.
Judge Nancy Hershey Lord presides over the case.
Roger V. Archibald, Esq., at Roger Victor Archibald, PLLC
represents the Debtor as legal counsel.
22ND CENTURY: Reports $5.7MM Net Loss in Q1 2024
------------------------------------------------
22nd Century Group, Inc. filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q reporting a net loss
of $5.7 million on $6.5 million of revenue for the three months
ended March 31, 2024, compared to a net loss of $18.2 million on
$8.9 million of revenue for the three months ended March 31, 2023.
The Company had negative cash flow from operations of $2.3 million
and $17.5 million for the three months ended March 31, 2024 and
2023, respectively, and an accumulated deficit of $384.4 million
and $378.7 million as of March 31, 2024 and December 31, 2023,
respectively. As of March 31, 2024, the Company had cash and cash
equivalents of $1.5 million. The Company has raised additional
capital during April 2024.
Given the Company's projected operating requirements and its
existing cash and cash equivalents, there is substantial doubt
about the Company's ability to continue as a going concern.
In response to these conditions, management is currently evaluating
different strategies for reducing expenses, as well as pursuing
financing strategies which include raising additional funds through
the issuance of securities, asset sales, and through arrangements
with strategic partners. The Company has engaged a financial
advisor to assist it in identifying strategic partners and
financing to fund operations and to take actions to maximize the
Company's liquidity. If capital is not available to the Company
when, and in the amounts needed, it could be required to liquidate
inventory, cease or curtail operations, or seek protection under
applicable bankruptcy laws or similar state proceedings. There can
be no assurance that the Company will be able to raise the capital
it needs to continue operations. Management's plans do not
alleviate substantial doubt about the Company's ability to continue
as a going concern through the next 12 months.
As of March 31, 2024, the Company has $24.6 million in total
assets, $36.2 million in total liabilities, and $11.6 million in
total shareholders' deficit.
A full-text copy of the Company's Form 10-Q is available at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1347858/000155837024008199/xxii-20240331x10q.htm
About 22nd Century Group
Mocksville, N.C.-based 22nd Century Group, Inc. is a tobacco
products company with sales and distribution of its own proprietary
new reduced nicotine tobacco products authorized as Modified Risk
Tobacco Products by the FDA. Additionally, it provides contract
manufacturing services for conventional combustible tobacco
products for third-party brands.
For the year ended December 31, 2023, the Company reported a net
loss of $140.8 million compared to a net loss of $59.8 million in
2022. As of December 31, 2023, the Company had $27.5 million in
total assets, $35.9 million in total liabilities, and $8.4 million
in total shareholders' deficit.
Buffalo, N.Y.-based Freed Maxick, CPAs, PC., the Company's auditor
since 2011, issued a "going concern" qualification in its report
dated March 28, 2024, citing that the Company has incurred
significant losses and negative cash flows from operations since
inception and expects to incur additional losses until such time
that it can generate significant revenue and profit in its tobacco
business. Further, the Company has negative working capital and a
shareholders' deficit as of December 31, 2023. This raises
substantial doubt about the Company's ability to continue as a
going concern.
25 JAY STREET: Wins Interim Cash Collateral Access
--------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of New York
authorized 25 Jay Street LLC to use cash collateral, on an interim
basis, in accordance with the budget.
Wells Fargo Bank, National Association, as Trustee for the benefit
of the registered holders of Benchmark 2020-B17, Commercial
Mortgage Pass-Through Certificates, Series 2020-B17, acting by and
through its special servicer, Midland Loan Services, a division of
PNC Bank, National Association has an interest in the Debtor's cash
collateral.
As of the petition date of the Bankruptcy, the Debtor was a party
to the Consolidated Mortgage dated January 29, 2020, in the
principal sum of $18.5 million which mortgage was assigned to
Lender by an Assignment of Mortgage as of dated June 23, 2020.
On February 14, 2023, Lender commenced a foreclosure action,
pending in the U.S. District Court for the Eastern District of New
York.
As adequate protection, the Lender is granted valid and
automatically perfected first-priority replacement liens on and
replacement security interests in and upon the Property and all
personal property which constituted the Lender's Collateral as of
the Petition Date.
On or before the 10th day of each month, the Debtor will pay the
amount of $60,000 to the Lender. In addition, if after making the
required $60,000 monthly payment to Lender the Debtor will have
cash on hand in excess of $75,000, the Debtor will pay all cash in
excess of $75,000 to the Lender by the 15th day of each month.
To the extent such adequate protection is insufficient to
adequately protect the Lender from any diminution of its interest,
the Lender is granted a superpriority administrative expense claim
against all of the Debtor's assets and all of the other benefits
and protections allowable under 11 U.S.C. Sections 503(b) and
507(b).
A final hearing on the matter is set for June 21, 2024 at 10:30
a.m.
A copy of the order is available at https://urlcurt.com/u?l=zCJmBq
from PacerMonitor.com.
About 25 Jay Street LLC
25 Jay Street LLC is a New York limited liability company with its
principal place of business at 77 Box Street, Brooklyn, New York
which owns a mixed-use apartment building located at 25 Jay Street,
Brooklyn, NY 11222. The Property, which is in the DUMBO
neighborhood of Brooklyn, New York and was built in 1920, has 5
stories, consisting of 37 residential units and 4 retail spaces on
the ground floor, and has a monthly rental income of approximately
$158,000.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D. N.Y. Case No. 23-44083) on November 7,
2023. In the petition signed by Joseph Torres, Jr., managing
member, the Debtor disclosed up to $50 million in both assets and
liabilities.
Judge Elizabeth S. Stong oversees the case.
Joel M. Shafferman, Esq., at Kucker Marino Winiarsky & BIttens,
LLP, represents the Debtor as legal counsel.
8-10 LEEDS: Case Summary & Three Unsecured Creditors
----------------------------------------------------
Debtor: 8-10 Leeds LLC
5 Whitney Street
Saugus, MA 01906
Chapter 11 Petition Date: June 5, 2024
Court: United States Bankruptcy Court
District of Massachusetts
Case No.: 24-11126
Judge: Hon. Janet E. Bostwick
Debtor's Counsel: Michael Van Dam, Esq.
VAN DAM LAW LLP
233 Needham Street
Suite 540
Newton, MA 02464
Tel: 617-969-2900
Fax: 617-964-4631
Email: mvandam@vandamlawllp.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Kevin Chiles as manager.
A full-text copy of the petition containing, among other items, a
list of the Debtor's three unsecured creditors is available for
free at PacerMonitor.com at:
https://www.pacermonitor.com/view/M4SGWDY/8-10_Leeds_LLC__mabke-24-11126__0001.0.pdf?mcid=tGE4TAMA
8434 ROCHESTER: Court OKs Cash Collateral Access on Final Basis
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California,
Santa Ana Division, authorized 8434 Rochester Ave RE, LLC, a
California limited liability company, and affiliates, to use cash
collateral, on a final basis, in accordance with the budget.
Specifically, the Debtors are permitted to use any and all
post-petition cash collateral of Preferred Bank, a California
banking corporation including any and all post-petition cash
collateral consisting of rents and accounts receivable and any cash
on hand generated from the Debtors' real property assets, to pay
any and all real property taxes owed on the Properties, the
post-petition management fee due property manager KNL Group, any
insurance related to the Properties, all utilities related to the
Properties, and any other regular maintenance items, including but
not limited to gardener and pest control, on the Properties.
The Debtors' authorization to use cash collateral will terminate
upon the Termination Date. The date on which any of the following
events occurs will be referred to as the "Termination Date."
a. Entry of a Court order converting or dismissing any of the
Debtor's bankruptcy cases;
b. Entry of a Court order appointing a Chapter 11 trustee or
Chapter 7 trustee in the any of the Debtor's bankruptcy cases;
c. Entry of a Court order confirming a Chapter 11 plan; or
d. The date the jointly administered bankruptcy cases are
dismissed.
About 8434 Rochester Ave, RE, LLC
8434 Rochester Ave is a Single Asset Real Estate debtor (as defined
in 11 U.S.C. Section 101(51B)).
8434 Rochester Ave RE LLC in Newport Beach, CA, filed its voluntary
petition for Chapter 11 protection (Bankr. C.D. Cal. Case No.
24-10729) on March 26, 2024, listing as much as $10 million to $50
million in both assets and liabilities. Gustavo W. Theisen as
manager, signed the petition.
Judge Scott C. Clarkson oversees the case.
SHULMAN BASTIAN FRIEDMAN & BUI LLP serve as the Debtor's legal
counsel.
ACCELERATE DIAGNOSTICS: Back in Compliance With Nasdaq Listing Rule
-------------------------------------------------------------------
Accelerate Diagnostics, Inc. reported in a Form 8-K filed with the
Securities and Exchange Commission that on June 5, 2024, the
Company received written notice from the Listing Qualifications
Staff of The Nasdaq Stock Market LLC notifying the Company that it
had regained compliance with the minimum $1.00 per share bid price
requirement for continued listing on The Nasdaq Capital Market
pursuant to Nasdaq Listing Rule 5550(a)(2) as a result of
maintaining a closing bid price for the Company's common stock of
at least $1.00 per share or greater for ten consecutive business
days. Accordingly, Nasdaq considers the matter relating to the
Company's prior Minimum Bid Price Requirement deficiency, as a
previously reported in the Company's Current Report on Form 8-K
filed with the SEC on April 30, 2024, now closed.
About Accelerate Diagnostics
Tucson, Ariz.-based Accelerate Diagnostics, Inc. is an in vitro
diagnostics company dedicated to providing solutions that improve
patient outcomes and lower healthcare costs through the rapid
diagnosis of serious infections.
Phoenix, Arizona-based Ernst & Young LLP, the Company's auditor
since 2013, issued a "going concern" qualification in its report
dated March 29, 2024, citing that the Company has suffered
recurring losses and negative cash flows from operations and has
stated that substantial doubt exists about the Company's ability to
continue as a going concern.
ACROSS INC: Hires Madden Consulting and Valuation as Bookkeeper
---------------------------------------------------------------
Across, Inc. seeks approval from the U.S. Bankruptcy Court for the
Northern District of Georgia to employ Madden Consulting and
Valuation as bookkeeper and professional for accounting and tax
preparation.
The firm will provide the Debtor's accounting needs, including
financial and tax accounting.
Britt Madden, Jr., a member at Madden Consulting and Valuation,
will be paid at his hourly rate of $125.
Mr. Madden, Jr. disclosed in a court filing that the firm is a
"disinterested person" as the term is defined in Section 101(14) of
the Bankruptcy Code.
The firm can be reached through:
Britt Madden, Jr.
Madden Consulting and Valuation
1065 Adams Rd.
Cedartown, GA 30125
Telephone: (770) 748-3485
About Across Inc.
Across, Inc. filed its voluntary petition for relief under Chapter
11 of the Bankruptcy Code (Bankr. D.N.J. Case No. 24-10639) on May
13, 2024, listing up to $50,000 in assets and $100,001 to $500,000
in liabilities.
Judge Paul Baisier oversees the case.
The Debtor tapped Leslie M. Pineyro, Esq., at Jones And Walden, LLC
as counsel and Britt Madden, Jr., at Madden Consulting and
Valuation as bookkeeper and professional for accounting and tax
preparation.
ACTION ENVIRONMENTAL: Moody's Rates New $100MM 1st Lien Loan 'B2'
-----------------------------------------------------------------
Moody's Ratings assigned B2 rating to The Action Environmental
Group, Inc.'s, planned $100 million backed senior secured first
lien delayed drawn term loan (DDTL). The Action Environmental
Group, Inc. is a subsidiary of Interstate Waste Services, Inc.
(collectively "IWS"). The company's other ratings, including its B2
corporate family rating, B2-PD probability of default rating and B2
backed senior secured ratings, which includes a proposed $50
million add-on to the existing senior secured first lien term loan
B, are unaffected. The outlook is stable.
Proceeds from the $50 million incremental add-on and a drawdown of
the company's existing $75 million DDTL will be used to fund the
acquisition of a NY state based waste collection business and three
smaller tuck-in acquisitions, add cash to the balance sheet and
fund fees and expenses. At least $25 million of the cash will be
invested in capital expenditures. The new $100 million DDTL (not
funded at close) and a planned upsize of the company's existing
revolving credit facility to $180 million from $150 million will
provide additional liquidity that will likely be used for
subsequent acquisitions.
Moody's views the transaction as a credit negative because it will
increase IWS' pro forma debt-to-LTM EBITDA to about 6.3 times from
6.0 times at March 30, 2024. Although the acquisition involves
integration risks, it increases IWS' waste collection territory and
geographic density in New York State. Moody's expects IWS to
deleverage and increase profitability as a new gondola and
materials recycling facilities (MRF) that the company is developing
become fully operational.
RATINGS RATIONALE
IWS' ratings reflect the company's position as a leading provider
of commercial, municipal, and to a lesser extent residential and
other waste and recycling services in New York, New Jersey, and
Connecticut. IWS has a recession resistant and sticky recurring
revenue stream with pricing power supported by declining disposal
capacity in the Northeast US. The company is also well diversified
by customer and has a competitive advantage resulting from its
vertically integrated waste-by-rail model and an owned landfill
located in a lower cost region (Ohio).
However, IWS is regionally concentrated and relatively small with
under $800 million of revenue for the twelve months ended March 30,
2024. In addition, free cash flow will be constrained in the near
term due to ongoing growth initiatives. Moody's expects that IWS
will continue to be acquisitive and that its financial policy will
remain aggressive under existing private equity ownership.
The stable outlook reflects Moody's expectation for 3-5% topline
growth over the next year driven by pricing actions. Debt-to-EBITDA
is expected to improve to below 6.0 times by the end of 2024.
Moody's expects IWS' liquidity will be adequate over the next year.
Free cash flow will be negative through 2024 as the company begins
operations in a new gondola offloading facility and MRF. However,
at the close of the transaction, the company will have full
availability on the $180 million revolving credit facility expiring
2028 and $67.5 million of cash. The term loan has no financial
maintenance covenants.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
The ratings could be upgraded if the company is able to increase
its size and scale while sustaining debt-to-EBITDA below 5.0 times
and maintaining EBIT margin above 8%. Improved liquidity, including
sustained positive free cash flow, ample revolver availability and
reduced reliance on external funding sources, would also be a
prerequisite for an upgrade.
The ratings could be downgraded if Moody's expects declining
organic revenue growth, EBIT margin sustained below 4%, or if
debt-to-EBITDA does not trend toward 5.5 times. In addition, if the
company engages in a large debt financed transaction that favors
shareholders over creditors, or if the company is unable to
complete growth capex projects with existing liquidity, the ratings
could be downgraded.
The principal methodology used in this rating was Environmental
Services and Waste Management published in May 2023.
The Action Environmental Group, Inc., a wholly-owned subsidiary of
Interstate Waste Services, Inc. or "IWS", is a
vertically-integrated provider of waste and recycling services. The
company is owned and controlled by PE firms Ares and Littlejohn &
Co.
ALPINE 4 HOLDINGS: Widens Net Loss to $40.96 Million in Q3 2023
---------------------------------------------------------------
Alpine 4 Holdings, Inc. filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q reporting a net loss
of $40.96 million on $25.60 million of net revenues for the three
months ended Sept. 30, 2023, compared to a net loss of $4.76
million on $27.49 million of net revenues for the three months
ended Sept. 30, 2022.
For the nine months ended Sept. 30, 2023, the Company reported a
net loss of $51.28 million on $77.98 million of net revenues,
compared to a net loss of $7.22 million on $78.35 million of net
revenues for the nine months ended Sept. 30, 2022.
As of Sept. 30, 2023, the Company had $104.50 million in total
assets, $83.91 million in total liabilities, and $20.59 million in
total equity.
As of Sept. 30, 2023, the Company had negative working capital of
$7.2 million, which was a decrease of $22.8 million compared to
Dec. 31, 2022. The Company has bank financing totaling $35.0
million ($35.0 million in lines of credit including $0.4 million in
capital expenditures lines of credit) of which $3.1 million was
available and unused as of Sept. 30, 2023. There are four lines of
credit that are set to mature during the next twelve months. These
four lines of credit total $34.0 million, of which $11.1 million
was used as of Sept. 30, 2023, and are shown as a current liability
on the condensed consolidated balance sheet. According to the
Company, these factors raise substantial doubt about its ability to
continue as a going concern.
Alpine 4 said, "The Company plans to continue to generate
additional revenue, improve cash flows from operations, and improve
gross profit performance across all of its subsidiaries. The
Company also may raise funds through debt financing, securing
additional lines of credit, and the sale of shares in public or
private offerings.
As noted above, the Company has negative working capital and has
continued to experience operating losses, which causes doubt as to
the ability of the Company to continue. The Company's ability to
raise additional capital through the future issuances of common
stock is unknown. The obtainment of additional financing, the
successful development of the Company's plan of operations, and its
ultimate transition to profitable operations are necessary for the
Company to continue. The uncertainty that exists with these
factors raises substantial doubt about the Company's ability to
continue as a going concern. The financial statements of the
Company do not include any adjustments that may result from the
outcome of these aforementioned uncertainties."
Management Comments
Kent Wilson, Alpine 4 CEO, had this to say: "Our 2023 Q3
performance reflects both challenges and our steadfast commitment
to innovation and quality. Despite a 7% decrease in revenue in the
third quarter of 2023, our 2023 year-to-date revenues remained
consistent, demonstrating resilience. Our focus on R&D in 2023,
with significant investments of $3.1 million, continues to drive
product development and quality improvements. While we faced
non-cash impairment charges of $33 million in 2023, our gross
margin held steady at 21%. Further, as we proceed with our
divestment plan for non-performing subsidiaries, we expect our
margins to increase in Q3 and Q4 2024. Finally, the filing of this
quarterly report is the first step toward getting the Company back
on track and current, and we expect subsequent filings to follow
relatively quickly."
Chris Meinerz, CFO of Alpine 4, had this to say, "During the third
quarter of 2023, the Company considered the sustained decrease in
the Company's publicly quoted share price and market
capitalization; adverse impacts from macroeconomic conditions such
as inflationary pressures and capital markets accessibility, the
war in Ukraine and the war in the Middle East; and unfavorable
short-term changes in the investment and operating plans of our
primary customers; and as a result of these events concluded that a
triggering event occurred which required the Company to perform an
interim quantitative impairment test as of September 30, 2023.
This assessment involved comparing the estimated fair value of each
of its reporting units to the reporting unit's carrying value,
inclusive of the goodwill balance allocated to the reporting unit.
Based upon the results of the impairment test, the Company
concluded that the carrying value of certain reporting units
exceeded their estimated fair value, resulting in a goodwill and
long-lived intangible assets impairment charge. This impairment
charge will not impact the Company's cash flow."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1606698/000162828024026953/alpp-20230930.htm
About Alpine 4
Alpine 4 Holdings, Inc (formerly Alpine 4 Technologies, Ltd) is a
Nasdaq traded Holding Company (trading symbol: ALPP) that acquires
business, wholly, that fit under one of several portfolios:
Aerospace, Defense Services, Technology, Manufacturing or
Construction Services as either a Driver, Stabilizer or Facilitator
from Alpine 4's disruptive DSF business model.
Alpine 4 Holdings reported a net loss of $12.87 million for the
year ended Dec. 31, 2022, compared to a net loss of $19.48 million
for the year ended Dec. 31, 2021. As of Dec. 31, 2022, the Company
had $145.63 million in total assets, $75.64 million in total
liabilities, and $69.99 million in total stockholders' equity.
Phoenix, Arizona-based RSM US LLP, the Company's auditor since
2022, issued a "going concern" qualification in its report dated
May 5, 2023, citing that the Company has suffered recurring losses
from operations and recurring negative cash flows from operations.
This raises substantial doubt about the Company's ability to
continue as a going concern.
The Company has not yet filed its Annual Report on Form 10-K for
the year ended Dec. 31, 2023, and Quarterly Report for the Quarter
Ended March 31, 2024.
ALVEERU INC: Voluntary Chapter 11 Case Summary
----------------------------------------------
Debtor: Alveeru Inc.
1909 New York Avenue
Brooklyn NY 11210
Chapter 11 Petition Date: June 6, 2024
Court: United States Bankruptcy Court
Eastern District of New York
Case No.: 24-42417
Judge: Hon. Elizabeth S. Stong
Debtor's Counsel: Moshe K. Silver, Esq.
LAW OFFICE OF MOSHE K. SILVER
347 Fifth Avenue Suite 1402-703
New York NY 10016
Tel: 212-444-9972
E-mail: msilverlaw@gmail.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $100,000 to $500,000
The petition was signed by Ahron Berlin as officer.
The Debtor failed to attach 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/FQVOETI/Alveeru_Inc__nyebke-24-42417__0001.0.pdf?mcid=tGE4TAMA
AMBRI INC: Seeks to Hire Epiq Corporate Restructuring as Advisor
----------------------------------------------------------------
Ambri Inc. seeks approval from the U.S. Bankruptcy Court for the
District of Delaware to employ Epiq Corporate Restructuring, LLC as
administrative advisor.
The firm's services include:
(a) assist with, among other things, solicitation, balloting
and tabulation of votes, and prepare any related reports, as
required in support of confirmation of a Chapter 11 plan;
(b) prepare an official ballot certification and, if
necessary, testify in support of the ballot tabulation results;
(c) assist with the preparation of the Debtor's schedules of
assets and liabilities and statements of financial affairs and
gather data in conjunction therewith;
(d) provide a confidential data room, if requested;
(e) manage and coordinate any distributions pursuant to a
Chapter 11 plan; and
(f) provide such other processing, solicitation, balloting and
other administrative services described in the engagement
agreement.
The hourly rates of the firm's professionals are as follows:
IT / Programming $65 - $90
Case Managers $85 - $165
Project Managers/Consultants/ Directors $170 - $190
Solicitation Consultant $190
Executive Vice President, Solicitation $195
In addition, the firm will seek reimbursement for expenses
incurred.
Prior to the petition date, the firm received a retainer in the
amount of $25,000 from the Debtor.
Alex Warso, a consulting director at Epiq, disclosed in a court
filing that the firm is a "disinterested person" as the term is
defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Alex Warso
Epiq Corporate Restructuring, LLC
311 S. Wacker Drive, Suite 350
Chicago, IL 60606
Telephone: (212) 225-9200
About Ambri Inc.
Ambri Inc. specializes in the development of an advanced energy
storage solution through its patented "Liquid MetalTM battery"
technology. Ambri is a pre-revenue Liquid MetalTM battery
technology company working to become a leading global provider of
long-duration, grid-scale, energy storage that can solve the most
critical issues facing today's electricity grid and enable
widespread adoption of intermittent renewable energy as a 24-7
power source. The company is developing batteries that are expected
to be low-cost, highly reliable, extremely safe, degrade only
minimally over their lifespan, and can shift fundamentally how
power grids operate and source their power, thereby contributing to
the goal of a cleaner energy future.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Del. Case No. 24-10952) on May 5, 2024,
with $50 million to $100 million in assets and liabilities. Nora
Murphy, chief financial officer, signed the petition.
Judge Laurie Selber Silverstein presides over the case.
The Debtor tapped Potter Anderson Coroon LLP as counsel and Goodwin
Procter LLP as co-bankruptcy counsel. Epiq Corporate Restructuring,
LLC is the Debtor's administrative advisor.
AMC ENTERTAINMENT: S&P Upgrades ICR to 'CCC+', Outlook Negative
---------------------------------------------------------------
S&P Global Ratings raised its issuer credit rating on AMC
Entertainment Holdings Inc. to 'CCC+' from 'SD' (selective
default). S&P also raised its issue-level rating on the second-lien
notes to 'CCC-' from 'D'.
The negative outlook reflects S&P' expectation that AMC's revenue
will decline 4%-5% in 2024 due to a limited theatrical release
slate, resulting in negative free operating cash flow (FOCF) and
leverage in the low-7x area.
S&P said, "Though it is marginally improved, we continue to view
AMC's capital structure as unsustainable due to its substantial
debt burden. AMC completed its debt-for-equity swap, exchanging
$164 million of its second-lien notes due in 2026 for common
equity. The impact of this exchange is marginally positive and will
reduce the company's cash interest costs by roughly $16 million per
year. However, AMC maintains a heavy debt load, with roughly $4.3
billion in reported debt pro forma for the recent exchange. Much of
this debt bears high interest rates, which will likely lead to
total reported debt interest costs of about $375 million in 2024.
These interest costs will likely prevent AMC from generating
positive FOCF. We believe the company is reliant on favorable
economic and business conditions to meet its debt obligations over
the next few years, specifically the coming maturity wall in
2026."
AMC's operating performance will decline over the next 12 months as
theater attendance weakens in 2024. The domestic box office reached
about $8.9 billion in 2023, driven by tent-pole films' strong
performance. However, S&P expects domestic box office revenue of
about $8.25 billion, or a decline of 7%-8%, in 2024. S&P's forecast
incorporates a significant disruption to the theatrical release
slate in 2024 as a result of the Writers Guild of America (WGA) and
Screen Actors Guild-American Federation of Television and Radio
Artists (SAG-AFTRA) strikes that occurred in 2023.
Ongoing macroeconomic risks could also affect AMC's performance
over the next 12 months. The uncertain economic outlook poses a
potential risk to theatrical revenue. Historically, cinema
attendance has been relatively resilient during economic downturns
due to the relative affordability of this out-of-home entertainment
option.
S&P said, "While we expect this trend to hold in general, the
current state of the industry represents a unique set of
challenges: average ticket prices are at an all-time high and
consumers have never had more options for how to consume video
content in the home. In the event of an economic recession,
consumers will likely be increasingly sensitive to discretionary
spending and may choose lower-cost, in-home viewing options.
Consequently, it may prompt exhibitors to adjust their pricing
tactics for tickets and concessions such that total revenue is less
than currently planned.
"The negative outlook reflects our expectation that AMC's revenue
will decline 4%-5% in 2024 due to a limited theatrical release
slate, resulting in negative FOCF and leverage in the low-7x area.
The outlook also reflects the risk that AMC could pursue additional
subpar debt exchanges within the next 12 months."
S&P could lower the rating if its expected AMC would default within
the next 12 months. This could occur if:
-- The industry experienced further headwinds such that AMC's cash
burn worsened and its liquidity position weakened, or
-- The company pursued further subpar debt exchanges or any other
notable form of debt restructuring.
S&P could revise the outlook to stable if:
-- S&P expected the release slate to stabilize in the second half
of 2024, and
-- S&P no longer believed there were a risk that AMC would pursue
additional subpar debt exchanges.
AMERICAN DENTAL: Court OKs Interim Cash Collateral Access
---------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Georgia,
Albany Division, authorized American Dental of Fitzgerald, LLC and
affiliates to use cash collateral, on an interim basis, in
accordance with the budget.
As previously reported by the Troubled Company Reporter, the
Debtors require the use of cash collateral to (a) maintain their
operations and (b) to pay disbursements more fully described in the
Budget.
A substantial number of parties appear to claim an interest in the
Debtors' assets including, among other things, the "cash
collateral" of one or more of Debtors in the form of accounts,
inventory, and receivables.
The parties that assert an interest in the Debtor's cash collateral
are First Corporate Solutions as representative, CT Corporation
System as representative, MNR Capital Group LLC, Advantage Platform
Services, Inc., National Funding, Inc., North State Bank,
Corporation Services Company, E Advance Services, LLC, Seamless
Capital Group, LLC, Proventure Capital, LLC, PW Funding, LLC, PW
Funding II, LLC, Avanza Group, LLC, SouthEast Bank, and Clearview
Funding Solutions, LLC.
As adequate protection, all pre-petition liens of Respondents and
any other parties with an interest in cash collateral will, subject
to any limitations in the Bankruptcy Code, continue through and
including the Final Hearing, and Respondents will have
post-petition liens in such Cash Collateral to the same extent,
validity, and priority as the pre-petition liens, if any.
The Debtors are directed to maintain property insurance on the
properties collateralizing Respondents' secured claims.
A final hearing on the matter is set for July 17, 2024 at 11 a.m.
A copy of the court's order and the Debtor's budget is available at
https://urlcurt.com/u?l=CumgB9 from PacerMonitor.com.
The Debtor projects total operating expenses, on a monthly basis,
as follows:
$48,644 for June 2024;
$50,144 for July 2024; and
$50,644 for August 2024.
About American Dental of Fitzgerald, LLC
American Dental of Fitzgerald, LLC and affiliates provide general
dentistry services.
The Debtors sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. M.D. Ga. Case No. 24-10482) on May 24,
2024. In the petition signed by Michael Knight, manager, the Debtor
disclosed up to $500,000 in both assets and liabilities.
Judge Robert M. Matson oversees the case.
Matthew S. Cathey, Esq., at Stone & Baxter, LLP, represents the
Debtor as legal counsel.
AMERICAN TIRE: S&P Lowers ICR to 'CCC+', Outlook Negative
---------------------------------------------------------
S&P Global Ratings downgraded American Tire Distributors Inc. (ATD)
to 'CCC+' from 'B-'. S&P's '4' recovery rating on the company's
first-lien term loan is unchanged, indicating its expectation for
average (30%-50%; rounded estimate: 30%) recovery in the event of a
default.
The negative outlook on ATD reflects the risk that S&P could lower
its rating over the next 12 months if operating performance does
not meaningfully improve, which could further erode its
increasingly tight liquidity position.
The downgrade and negative outlook reflect ATD's persistently weak
margins, volatile free cash flow, and unsustainable capital
structure. ATD's S&P Global Ratings-adjusted EBITDA margins fell
below 2% during 2023 from above 4.5%-5% before 2022 and have not
recovered. S&P said, "We attribute the decline to a combination of
the shift into lower-margin accounts/channels, consumers trading
down to lower-tier products, and more intense competition with tire
makers that are attempting to sell directly to ATD's traditional
customer base. With lower forecast margins, we now expect leverage
will remain above 10x in 2024."
The company has been selectively shifting its commercial strategy
over the past several quarters to expand its fixed-margin offering.
This has weighed on ATD's margins since volumes within these
accounts have been slower to ramp up as consumers trade down to
cheaper tires, weakening the margin mix. S&P believes this strategy
will take time to execute and likely continue to weigh on
profitability over the near term.
S&P said, "While we forecast weak performance through the balance
of 2024, we expect top-line and margin results to gradually improve
as unit volumes with ATD's core customer base scale up and it
achieves better economics under its evolving commercial strategy.
However, this will depend on ATD improving margins and mix in its
sales channels, likely by increasing prices to larger customers and
reducing its cost structure. Given our expectation that consumer
spending remains weak, it may be challenging to quickly improve
margins."
ATD's liquidity eroded in the first quarter, and there is a risk of
further deterioration if margins do not recover and working capital
outflow does not reverse. In the first quarter, cash outflow was
over $100 million, including substantial working capital intensity
due to an inventory build. This was a function of general
seasonality in ATD's business along with ramping up new programs
with specific suppliers and customers, which required incremental
investment. While S&P expecst working capital to reverse and be a
source of funds for the rest of 2024, if sales are weaker than the
company forecasts, it may be difficult to unwind inventory, which
would further strain liquidity.
The company increasingly relies on its asset-based lending (ABL)
revolver to fund operations and service debt given its limited
balance sheet cash. Even though ATD has avoided testing of its
springing covenant to date, greater utilization of its revolving
credit facility could lead to it breaching defined thresholds under
the ABL credit agreement. S&P does not believe ATD would be
compliant with its minimum 1x fixed-charge coverage covenant given
its low profitability in the last 12 months. In this situation, ABL
availability could be limited. While ATD had $185 million available
at the end of the first quarter, this could fall to $97.7 million
if burdened for the springing excess availability threshold based
on the latest borrowing base certificate.
The negative outlook on ATD reflects the risk that S&P could lower
its rating over the next 12 months if operating performance does
not meaningfully improve, which could further erode its
increasingly tight liquidity position.
S&P said, "Governance factors are a moderately negative
consideration in our credit rating analysis of ATD. Our assessment
of the company's financial risk profile as highly leveraged
reflects that its corporate decision-making prioritizes the
interests of its controlling owners, in line with our view of most
rated entities owned by private-equity sponsors. Our assessment
also reflects private-equity owners' generally finite holding
periods and focus on maximizing shareholder returns."
AMYNTA AGENCY: Moody's Affirms B3 CFR & Cuts First Lien Loan to B
-----------------------------------------------------------------
Moody's Ratings has affirmed the B3 corporate family rating and
B3-PD probability of default rating of Amynta Agency Borrower, Inc.
following the company's announcement that it plans to reprice its
$1.1 billion senior secured first-lien term loan due in 2028 and
raise a $325 million add-on to this loan, using most of the
proceeds to fully repay its second-lien term loan (unrated).
Moody's downgraded Amynta's senior secured first-lien term loan and
revolving credit facility ratings to B3 from B2 as a result of the
change in the funding mix. The rating outlook for Amynta is
stable.
RATINGS RATIONALE
According to Moody's, Amynta's ratings reflect its growing managing
general agency business and specialty risk services operations, as
well as its good market presence in US warranty products,
particularly vehicle service contracts. The company has increased
revenue both organically and through acquisitions over the past
several years, while improving EBITDA margins. Amynta continues to
focus on controlling costs, streamlining systems and enhancing data
and analytics capabilities. The company provides a wide range of
coverages and services to the insurance and warranty markets.
These strengths are offset by the company's high debt load, modest
interest coverage and low free-cash-flow-to-debt ratio. Other
credit challenges include the company's limited size and the still
significant, but declining, concentration of its insurance
placements with AmTrust Financial Services, Inc. Amynta also faces
a challenging operating environment in its warranty business, which
continues to be affected by higher interest rates and the slowing
US economy.
Giving effect to the proposed refinancing, Moody's estimates that
Amynta's pro forma debt-to-EBITDA ratio is around 7.5x, with
(EBITDA - capex) coverage of interest of 1.2x- 1.5x and a
free-cash-flow-to-debt ratio in the low-single digits. These
metrics incorporate Moody's standard accounting adjustments for
operating leases, run-rate EBITDA from acquisitions, and certain
non-recurring costs and other items.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The following factors could lead to an upgrade of Amynta's ratings:
debt-to-EBITDA ratio below 6.5x; (EBITDA - capex) coverage of
interest exceeding 2x; free-cash-flow-to-debt ratio exceeding 5%;
and ability to place business with a range of carriers.
The following factors could lead to a downgrade of Amynta's
ratings: debt-to-EBITDA ratio above 7.5x; (EBITDA - capex) coverage
of interest below 1.2x; or free-cash-flow-to-debt ratio below 2%.
The principal methodology used in these ratings was Insurance
Brokers and Service Companies published in February 2024.
Based in New York City, Amynta is an insurance services company
operating through three segments including managing general
agencies, warranty including coverages for autos and other consumer
products, and specialty risk services. Amynta serves leading
insurance carriers, wholesalers, retail agencies, auto dealers and
other parties throughout the US and Canada. The company generated
total GAAP revenue of approximately $1.3 billion during the 12
months through March 2024.
ANS NEWCO: Case Summary & 12 Unsecured Creditors
------------------------------------------------
Debtor: ANS Newco, LLC
d/b/a Altair Health
60A Columbia Road
Morristown, NJ 07960
Business Description: The Debtor is a healthcare services
provider.
Chapter 11 Petition Date: June 5, 2024
Court: United States Bankruptcy Court
District of New Jersey
Case No.: 24-15727
Debtor's Counsel: David L. Bruck, Esq.
GREENBAUM, ROWE, SMITH & DAVIS LLP
99 Wood Avenue South
Iselin, NJ 08830
Tel: (732) 549-5600
Fax: (732) 549-1881
Email: bankruptcy@greenbaumlaw.com
Total Assets: $1,869,761
Total Liabilities: $48,839,592
The petition was signed by Ronald Benitez as president.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 12 unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/VR2SIAQ/ANS_Newco_LLC__njbke-24-15727__0001.0.pdf?mcid=tGE4TAMA
ARCHDIOCESE OF BALTIMORE: Hundreds File Sex Abuse Claims
--------------------------------------------------------
The Baltimore Sun reports that hundreds of people who were sexually
abused as children by employees of the Catholic Archdiocese of
Baltimore filed in the church's bankruptcy case ahead of the May
31, 2024 deadline for claims, but the exact figure remains
unclear.
"Right now there are over 700, but the claims that were uploaded on
Friday are still being counted," Paul Jan Zdunek, chair of the
committee of abuse survivors representing all victims in the
bankruptcy case, told The Baltimore Sun on Monday. "It's taking
time. There was a rush at the end."
Zdunek said that figure "will probably go up." While it also
includes non-abuse-related claims filed by insurers and other
entities who did business with the archdiocese, "the majority will
be abuse cases," he added.
It could take awhile to determine the exact number of sex abuse
claims filed in the case, said attorney Jonathan Schochor, who
represents victims in the case, including a member of the
survivors' committee.
"It'll be at least two weeks because each firm who filed on behalf
of survivors has to one, tally, and, two, look for duplicates,"
said Schochor, adding that survivors sometimes submit claims
independently of those filed for them by attorneys.
Although there may be limited opportunities for survivors to submit
claims later if they meet a certain legal criteria, the vast
majority of victims of clergy abuse had until midnight Friday to
file in the archdiocese's bankruptcy to be considered for
compensation later in the case.
MTA rider 'still processing' his Saturday ride as Baltimore Police
investigate fetuses found on bus
The deadline marked a milestone in the case, coming and going
against the backdrop of another important development: Last week,
the archdiocese and the survivors' committee jointly asked to go
into mediation to determine how much money the church and its
insurers will contribute to compensate victims.
U.S. Bankruptcy Judge Michelle M. Harner has yet to approve that
request.
The archdiocese declared bankruptcy Sept. 29, two days before a new
state law took effect that eliminated time limits for people abused
as children to sue the perpetrators and the institutions that
enabled their torment.
Lawmakers enacted the Child Victims Act after Maryland’s attorney
general released a report examining abuse in the archdiocese. The
report detailed the torment of more than 600 children and young
adults at the hands of 156 clergy and other church officials,
dating to the 1940s and spanning Baltimore and the nine counties in
Central and Western Maryland that make up the diocese’s
jurisdiction.
Anticipating hundreds of lawsuits under the new law, the church
sought to protect its assets and limit its liability through
bankruptcy. Diocesan officials also said bankruptcy would ensure
the church compensated more survivors, rather than providing
immense sums of money to a few, while continuing its mission.
The church's decision meant survivors' potential lawsuits had to be
reconfigured into proof-of-claim forms and supporting documents.
Harner set the deadline for such claims, ordering the archdiocese
to advertise on news platforms and put the word out in its
parishes.
Archbishop William Lori attended two hearings "to hear directly
from the survivors" of abuse.
In a statement Thursday, Archbishop William Lori said the
approaching deadline served as "a stark reminder that behind each
abuse-claim lies a personal and painful story."
"Our goals in filing for Chapter 11," Lori continued, "include
compensating those individuals with the aim of helping to provide a
possible path toward healing. ... We can never undo the harm that
was done to many, nor can we lessen the evil of what has happened,
we can however continue to walk with those who have been harmed and
do all we can to contribute to their healing."
As survivors prepared and submitted claims, attorneys in the case
sought to figure out how much money the archdiocese and its
insurers would have to cough up to eventually compensate victims.
Tensions between the archdiocese and the insurance companies it
retained over the years remain, as evidenced by an ongoing lawsuit
by the church against several of its insurers alleging breach of
contract, but the case is now likely heading to confidential
mediation. Zdunek and Schochor expect mediation to begin over the
summer.
"That mediation will involve the back and forth between the
archdiocese, the insurers and the creditors committee in an attempt
to arrive at what the creditors' committee believes is a fair
dollar amount to compensate survivors," Schochor said.
The committee and archdiocese suggested Harner appoint as mediators
Robert J. Faris, chief judge of the U.S. Bankruptcy Court in
Hawaii, and attorney Brian J. Nash, who says on his LinkedIn page
that he’s focused his practice on mediation for more than two
decades.
Zdunek touted the joint request as an important step toward an
eventual resolution.
"It's huge," Zdunek said. "It shows that we are working together to
resolve this as fair and justly as possible."
Once the church, its insurers and survivors agree to a sum to
settle all the claims, it falls to Harner to approve the dollar
amount.
After that, the survivors' committee will come up with criteria for
how to categorize abuse claims. Experts will be brought in to
evaluate the claims and place them into tiers for compensation.
About the Archdiocese of Baltimore
The Archdiocese of Baltimore operates as a non-profit religious
organization. The organization provides catholic charities,
chancery, pastoral council, policies, presbyteral council, and
child and youth protection.
The Archdiocese of Baltimore sought relief under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. D. Md. Case No. 23-16969) on Sept. 29,
2023. In the petition filed by Archbishop William E. Lori, the
Debtor estimated assets between $100 million and $500 million and
liabilities between $500 million and $1 billion.
The Debtor is represented by:
Catherine Keller Hopkin, Esq.
YVS Law, LLC
320 Cathedral Street
Baltimore, MD 21201
ARIEL LLC: Bid to Use Cash Collateral Denied
--------------------------------------------
The U.S. Bankruptcy Court for the District of Massachusetts,
Western Division, denied the motion to use cash collateral filed by
Ariel LLC without prejudice.
As previously reported by the Troubled Company Reporter, the Debtor
needs to use the cash collateral assets generated by the rentals to
continue to maintain rentals, including paying repairs,
maintenance, insurance, real estate taxes, renovations, and related
items.
The following creditors claim security interests in the Debtor's
properties, including the rents (which constitute cash collateral
under 11 U.S.C. Section 363) as follows:
(i) 230 Merrimack Street, Methuen, Massachusetts: ESTIMATED
VALUE: $375,000; MORTGAGE HOLDER: EF Mortgage, LLC, CLAIM AMOUNT:
$405,000 (with a principal address of 53 Forest Avenue, Old
Greenwich, CT)
(ii) 151 Hampshire Street, Lawrence, Massachusetts: ESTIMATED
VALUE: $460,000; MORTGAGE HOLDER: Harvest Now, LLC, CLAIM AMOUNT:
$490,000 (with a principal address of c/o Rich May, P.C., 176
Federal Street, Boston, MA)
(iii) 80 Howe Street, Lawrence, Massachusetts: ESTIMATED VALUE:
Unknown; MORTGAGE HOLDERS: RD Advisor, LLC (with a principal
address of 516 East Second, Street, Unit 39, Boston, MA); and
Reunion Capital, LLC (Second Mortgage)(with a principal address of
153 Sevilla Avenue, Miami, FL), CLAIM AMOUNT: $200,000
(iv) 12 Dewey Street, Lawrence, Massachusetts: ESTIMATED VALUE:
$380,000; MORTGAGE HOLDERS: Constructive Loans, LLC (First
Mortgage) (with a principal address of 425 S. Financial P., Ste
2000, Chicago, IL), CLAIM AMOUNT: $285,000; and Reunion Capital,
LLC (Second Mortgage)(with a principal address of 153 Sevilla
Avenue, Miami, FL).
A copy of the order is available at https://urlcurt.com/u?l=CbWfsW
from PacerMonitor.com.
About Ariel LLC
Ariel LLC is primarily engaged in renting and leasing real estate
properties.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Mass. Case No. 24-40213) on March 5,
2024, with $1,216,000 in assets and $1,940,000 in liabilities.
Miguel B. Aguilo, manager, signed the petition.
Judge Elizabeth D. Katz oversees the case.
Louis S. Robin, Esq., at the Law Offices of Louis S. Robin
represents the Debtor as bankruptcy counsel.
ATLANTIC NEUROSURGICAL: Case Summary & 20 Top Unsecured Creditors
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Debtor: Atlantic Neurosurgical Specialists, P.A.
d/b/a Atlantic Neurosurgical Specialists
d/b/a Altair Health
60 Columbia Road, Bldg A
Morristown, NJ 07960
Business Description: Atlantic NeuroSurgical Specialists is a
neurosurgical practice in New Jersey that
treats the full spectrum of brain tumors,
neurovascular disorders and spine
disorders.
Chapter 11 Petition Date: June 5, 2024
Court: United States Bankruptcy Court
District of New Jersey
Case No.: 24-15726
Debtor's Counsel: David L. Bruck, Esq.
GREENBAUM, ROWE, SMITH & DAVIS LLP
99 Wood Avenue South
Iselin, NJ 08830
Tel: (732) 549-5600
Fax: (732) 549-1881
Email: bankruptcy@greenbaumlaw.com
Total Assets: $9,110,175
Total Liabilities: $48,596,586
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $10 million to $50 million
The petition was signed by Dr. Ron Benitez as president Executive
Committee.
A copy of the Debtor's list of 20 largest unsecured creditors is
available for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/ORXLACQ/Atlantic_Neurosurgical_Specialists__njbke-24-15726__0001.0.pdf?mcid=tGE4TAMA
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/PZ3WXFQ/Atlantic_Neurosurgical_Specialists__njbke-24-15726__0002.0.pdf?mcid=tGE4TAMA
AULT ALLIANCE: Enters Into $20MM Credit Pact With OREE & Helios
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Ault Alliance, Inc. disclosed in a Form 8-K filed with the
Securities and Exchange Commission that on June 4, 2024, it entered
into a loan agreement with OREE Lending Company, LLC and Helios
Funds LLC, as lenders. The Credit Agreement provides for an
unsecured, non-revolving credit facility in an aggregate principal
amount of up to $20,000,000, provided, however, that at no point
will the Company be allowed to have outstanding Advances in a
principal amount received of more than $2,000,000.
All loans under the Credit Agreement shall be evidenced by a
promissory note. The Lender made an Advance to the Company of
$1,500,000 on the Execution Date. The Advances are due Dec. 4,
2024, provided, however, that if on such date, the Company has
executed an equity line of credit agreement relating to the sale of
shares of the Company's 13.00% Series D Cumulative Redeemable
Perpetual Preferred Stock, has an effective registration statement
relating thereto and is not currently in default under such
agreement, then the Maturity Date shall be automatically extended
until June 4, 2025. The Lender is not obligated to make any
further Advances under the Credit Agreement after the Maturity
Date. Advances under the Credit Agreement will include the addition
of an original issuance discount of 20% to the amount of each
Advance and all Advances will bear interest at the rate of 15.0%
per annum and may be repaid at any time without penalty or
premium.
The obligations of the Company under the Credit Agreement are
secured by a guaranty provided by Milton C. Ault, the Executive
Chairman of the Company.
About Ault Alliance
Ault Alliance, Inc. -- http://www.Ault.com-- is a diversified
holding company pursuing growth by acquiring undervalued businesses
and disruptive technologies with a global impact. Through its
wholly and majority-owned subsidiaries and strategic investments,
Ault Alliance owns and operates a data center at which it mines
Bitcoin and offers colocation and hosting services for the emerging
artificial intelligence ecosystems and other industries, and
provides mission-critical products that support a diverse range of
industries, including metaverse platform, oil exploration, crane
services, defense/aerospace, industrial, automotive,
medical/biopharma, consumer electronics, hotel operations and
textiles. In addition, Ault Alliance extends credit to select
entrepreneurial businesses through a licensed lending subsidiary.
Ault Alliance's headquarters are located at 11411 Southern
Highlands Parkway, Suite 240, Las Vegas, NV 89141.
New York, New York-based Marcum LLP, the Company's auditor since
2016, issued a "going concern" qualification in its report dated
April 16, 2024, citing that the Company has a working capital
deficiency, has incurred net losses and needs to raise additional
funds to meet its obligations and sustain its operations. These
conditions raise substantial doubt about the Company's ability to
continue as a going concern.
AURA SYSTEMS: Incurs $4.22 Million Net Loss in FY Ended Feb. 29
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Aura Systems, Inc. filed with the Securities and Exchange
Commission its Annual Report on Form 10-K reporting a net loss of
$4.22 million on $56,000 of net revenue for the fiscal year ended
Feb. 29, 2024, compared to a net loss of $3.41 million on $71,000
of net revenue for the fiscal year ended Feb. 28, 2023.
As of Feb. 29, 2024, the Company had $1.46 million in total assets,
$22.98 million in total liabilities, and a total shareholders'
deficit of $21.52 million.
Los Angeles, California-based Weinberg & Company, P.A., the
Company's auditor since 2022, issued a "going concern"
qualification in its report dated June 4, 2024, citing that during
the year ended Feb. 29, 2024, the Company incurred a net loss of
$4.2 million, used cash in operations of $3 million, and at Feb.
29, 2024, had a stockholders' deficit of $21.5 million. In
addition, at Feb. 29, 2024, notes payable and related accrued
interest with an aggregate balance of $6.7 million have reached
maturity and are past due. These matters raise substantial doubt
about the Company's ability to continue as a going concern.
"Our ability to continue as a going concern is dependent upon our
ability to increase revenues, obtain additional financing, drive
further operating efficiencies, reduce expenditures, and
ultimately, create profitable operations. In the event that the
Company does not generate sufficient cash flows from operations and
is unable to obtain funding, the Company will be forced to delay,
reduce, or eliminate some or all of its discretionary spending,
which could adversely affect the Company's business prospects,
ability to meet long-term liquidity needs or ability to continue
operations. The Company does not have any sufficient committed
sources of capital and does not know whether additional financing
will be available when needed on terms that are acceptable, if at
all. This going concern statement from our independent public
accounting firm may discourage some investors from purchasing our
stock or providing alternative capital financing. The failure to
satisfy our capital requirements will adversely affect our
business, financial condition, results of operations and
prospects," said Aura Systems in the SEC filing.
A full-text copy of the Form 10-K is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/826253/000121390024049745/ea0207082-10k_aurasystems.htm
About Aura Systems
Aura Systems Inc. is a Delaware corporation founded in 1987. The
Company innovated and commercialized the technology for Axial Flux
Induction electric motors and generators. Aura's axial flux
induction motor technology ("AAFIM") provides an industrial
solution that does not use any permanent magnets, no rare earth
elements, is smaller and lighter, uses significant less materials
(just copper and steel), very high efficiency, significantly less
copper, highly reliably, very robust, and no scheduled maintenance.
AVALON GLOBOCARE: Issues $2.85MM 13% Convertible Note to Mast Hill
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Avalon Globocare Corp. reported in a Form 8-K filed with the
Securities and Exchange Commission that on June 5, 2024, it entered
into securities purchase agreements with Mast Hill Fund, L.P. for
the issuance of 13% senior secured promissory notes in the
aggregate principal amount of $2,845,000.00 convertible into shares
of common stock, par value $0.0001 per share, of the Company, as
well as the issuance of up to 402,000 shares of common stock as a
commitment fee and warrants for the purchase of up to 2,200,000
shares of Common Stock of the Company. The Company and its
subsidiaries have entered into that certain security agreements,
creating a security interest in certain property of the Company and
its subsidiaries to secure the prompt payment, performance and
discharge in full of all of the Company's obligations under the
Notes. The transaction closed on June 5, 2024.
Mast Hill acquired the Notes with principal amount of $2,845,000.00
and paid the purchase price of $2,702,750.00 after an original
issue discount of $142,250.00, with a conversion price of $0.75,
subject to adjustment as provided in Notes. On the same Closing
Date, the Company issued (i) a warrant to purchase 1,000,000 shares
of common stock with an exercise price of $0.65 exercisable until
the five-year anniversary of the Closing Date, (ii) a warrant to
purchase 1,200,000 shares of common stock with an exercise price of
$0.50 exercisable until the five-year anniversary of the Closing
Date, which warrant shall be cancelled and extinguished against
payment of the Notes, and (iii) 402,000 shares of common stock to
Mast Hill as additional consideration for the purchase of the Note,
which were earned in full as of the Closing Date. On the Closing
Date, the Company delivered such duly executed Notes, warrants and
common stock to Mast Hill against delivery of such purchase price.
The Company will use the proceeds from the Convertible Note
Financing to pay off all previously issued convertible notes to
Mast Hill and Firstfire Global Opportunities Fund, LLC, as
disclosed in the previously filed 8-K.
On June 5, 2024, the Company also entered into a Mortgage and
Security Agreement with Mast Hill to secure the payment,
performance, and obligations under the above-mentioned Convertible
Note Financing. The Company is indebted to Mast Hill in the
combined principal sum of $2,845,000.00.
The Securities Purchase Agreements contains customary
representations and warranties and agreements and obligations of
the parties. The proceeds of this Note financing will be used for
general corporate purposes.
Avalon Globocare
Headquartered in Freehold, New Jersey, Avalon Globocare --
www.avalon-globocare.com -- is dedicated to developing and
delivering innovative, transformative, precision diagnostics and
clinical laboratory services. The Company's main strategy is to
acquire ownership or license rights in precision diagnostic assets,
genetic testing and clinical laboratory companies through joint
ventures, share ownership structures or distribution rights. The
Company also provides laboratory services, offering a broad
portfolio of diagnostic tests including drug testing, toxicology,
and a broad array of test services, from general bloodwork to
anatomic pathology, and urine toxicology.
New York, NY-based Marcum LLP, the Company's auditor since 2019,
issued a "going concern" qualification in its report dated April
15, 2024, citing that the Company has a significant working capital
deficiency, has incurred significant losses and needs to raise
additional funds to meet its obligations and sustain its
operations. These conditions raise substantial doubt about the
Company's ability to continue as a going concern.
BAR 13: Gerard Luckman of Forchelli Named Subchapter V Trustee
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The U.S. Trustee for Region 2 appointed Gerard Luckman, Esq., at
Forchelli Deegan Terrana, LLP as Subchapter V trustee for Bar 13
Inc.
Mr. Luckman will be paid an hourly fee of $695 for his services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. Luckman declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Gerard R. Luckman, Esq.
Forchelli Deegan Terrana, LLP
333 Earle Ovington Blvd., Suite 1010
Uniondale, NY 11553
Tel: (516) 812-6291
Email: gluckman@ForchelliLaw.com
About Bar 13 Inc.
Bar 13 Inc. is a New York Corporation engaged in a bar and
restaurant business located at 35 East 13th St., New York.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. N.Y. Case No. 24-10854) on May 17,
2024. In the petition signed by Thomas Sullivan, sole shareholder,
the Debtor disclosed up to $50,000 in both assets and liabilities.
John Lehr, Esq., at John Lehr, P.C., represents the Debtor as legal
counsel.
BEST BUILD 1: Voluntary Chapter 11 Case Summary
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Debtor: Best Build 1 LLC
776 East 8th Street, Unit 1
Brooklyn, NY 11230
Chapter 11 Petition Date: June 5, 2024
Court: United States Bankruptcy Court
Eastern District of New York
Case No.: 24-42405
Judge: Hon. Nancy Hershey Lord
Debtor's Counsel: Vivian Sobers, Esq.
SOBERS LAW PLLC
11 Broadway Suite 615
New York, NY 10004
Tel: (917) 225-4501
Email: vsobers@soberslaw.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Isaac Stern as sole member.
The Debtor failed to attach 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/VILBOQA/Best_Build_1_LLC__nyebke-24-42405__0001.0.pdf?mcid=tGE4TAMA
BION ENVIRONMENTAL: Accepts Resignation of O'Neill as CEO, Director
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Bion Environmental Technologies, Inc. announced it has accepted the
resignation of Bill O'Neill, its chief executive officer, which
became effective on June 1. Mr. O'Neill is departing to pursue
other interests. He will work with Bion management through the end
of June to help ensure a smooth transition. Mr. O'Neill's
resignation from Bion's Board of Directors was also accepted.
Greg Schoener has assumed the role of chief operating officer on an
interim basis, effective June 1. He has also joined Bion's Board
of Directors. Mr. Schoener is a successful business owner and
operator, serving the construction industry in Houston, Texas. He
brings broad business management experience, with an emphasis on
mission-focused execution and accountability. Greg has been a Bion
shareholder since late-2020.
Craig Scott has joined the Company's Board of Directors, effective
June 1. Craig has served Bion in several senior positions, dating
back to 1996. Along with his current duties, Mr. Scott will assume
a broader management role for Bion, including business
development.
Mark Smith, Chairman of the Board of Directors and Bion's president
and counsel, was slated to retire at the end of June 2024. Mr.
Smith has agreed to continue to perform his duties for the time
being to assist Bion in its transition. The remainder of Bion's
Board members, Bill Rupp, Salvatore Zizza, Ed Schafer, and Jon
Northrop will also continue in their roles. More additions to the
team and Board can be expected.
Bion is focused on its capital needs and completing third-party
engineering of the Ammonia Recovery System at Fair Oaks. Bion
continues to pursue its sustainable beef opportunity and expects to
identify and commence a project in the near term. Bion believes
the ARS can provide cost-effective 'standalone' ammonia control for
anaerobic digestion (AD) of concentrated industrial organic waste
streams. The Company is especially focused on meat
packing/slaughter waste, which is similar to the animal manure
waste stream for which the technology was developed. US EPA has
proposed tougher discharge standards for the packing/slaughter
industry.
Craig Scott stated, "We welcome Greg and his experience to the
team. We think his strong and thoughtful leadership, along with his
perspective as a major shareholder, are just what we need to
navigate the challenges we face today and the opportunities in
front of us."
Greg Schoener stated, "I'm excited by the challenge and the
opportunity to help Bion live up to its enormous potential. We're
going to start by establishing a culture of budget and fiscal
responsibility, execution, and accountability. We're not changing
direction, just our path. We're getting back on the one that made
sense to me when I invested in 2020: focus on development of the
first project. Worry about the next one, or multiple projects,
once we've accomplished that."
About Bion
Bion's third generation technology-based platform ("Gen3Tech
Platform") provides comprehensive environmental treatment for
large-scale livestock waste streams (and other organic waste
streams), while simultaneously recovering resources that have
traditionally been wasted or underutilized. Bion's platform
performs the dual benefits of improving profitability of production
by upcycling those resources into value-added byproducts, while
preventing their release to the environment, where they contribute
to surface- and groundwater and air pollution, climate change, and
other air quality issues. Bion's patented core technology
captures, stabilizes, and upcycles ammonia produced during the
anaerobic digestion of organic waste streams to produce Renewable
Natural Gas. The ammonia recovery system produces clean water and
high-value organic and low-carbon precision fertilizers from the
waste stream. For more, see Bion's website at
https://bionenviro.com.
Salt Lake City, Utah-based Haynie & Company, the Company's auditor
since 2023, issued a "going concern" qualification in its report
dated Sept. 28, 2023, citing that the Company has yet to generate
any revenue and has suffered recurring losses from operations.
These factors raise substantial doubt about its ability to continue
as a going concern.
Bion Environmental said in its Quarterly Report for the period
ended March 31, 2024, that "The Company is not currently generating
any significant revenues. Further, the Company's anticipated
revenues, if any, from existing projects, JVs and proposed projects
will not be sufficient to meet the Company's anticipated
operational and capital expenditure needs for many years. As
previously noted, the Company is currently not generating
significant revenue and accordingly has not generated cash flows
from operations. The Company does not anticipate generating
sufficient revenues to offset operating and capital costs (for
Projects) for a minimum of two to five years. While there are no
assurances that the Company will be successful in its efforts to
develop and construct its Projects and market its Systems, it is
certain that the Company will require substantial funding from
external sources. Given the unsettled state of the current credit
and capital markets for companies such as Bion, there is no
assurance the Company will be able to raise the funds it needs on
reasonable terms. The aggregate effect of these factors raises
substantial doubt about the Company's ability to continue as a
going concern."
BION ENVIRONMENTAL: Reports Net Loss of $538,145 in Fiscal Q3
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Bion Environmental Technologies, Inc. filed with the Securities and
Exchange Commission its Quarterly Report on Form 10-Q reporting a
net loss of $538,145 for the three months ended March 31, 2024,
compared to a net loss of $857,884 for the three months ended March
31, 2023.
For the nine months ended March 31, 2024, the Company reported a
net loss of $2,002,281, compared to a net loss of $2,507,305 for
the same period in 2023.
At March 31, 2024, the Company has a working deficit and a
stockholders' equity of approximately $4,644,000 and $3,355,000,
respectively. The Company has never generated significant operating
revenues (even though it earned a net income of $8,291,000 for the
year ended June 30, 2022) and incurred a net loss of approximately
($3,189,000) during the year ended June 30, 2023. The net income
for the year ended June 30, 2022 was largely due to a one-time,
non-cash event of the dissolution of Bion PA-1, LLC resulting in a
gain of approximately $10,235,000 as well as a one-time gain of
$902,000 from the sale of the Company's 'biontech.com' domain
pursuant to a purchase agreement during the period. During the year
ended June 30, 2023 the Company had debt modifications that
resulted in a reduction of debt of $3,516,000 and an increase in
equity.
The Company is not currently generating any significant revenues.
Further, the Company's anticipated revenues, if any, from existing
projects, JVs and proposed projects will not be sufficient to meet
the Company's anticipated operational and capital expenditure needs
for many years. As previously noted, the Company is currently not
generating significant revenue and accordingly has not generated
cash flows from operations. The Company does not anticipate
generating sufficient revenues to offset operating and capital
costs (for Projects) for a minimum of two to five years. While
there are no assurances that the Company will be successful in its
efforts to develop and construct its Projects and market its
Systems, it is certain that the Company will require substantial
funding from external sources. Given the unsettled state of the
current credit and capital markets for companies such as Bion,
there is no assurance the Company will be able to raise the funds
it needs on reasonable terms. The aggregate effect of these factors
raises substantial doubt about the Company's ability to continue as
a going concern.
Current liabilities were approximately $4.5 million and $1.6
million at March 31, 2024 and 2023, respectively. There was an
increase of approximately $2.9 million (which was largely due to an
increase in 'accounts payable and accrued expenses' and an increase
in 'deferred compensation') as a result of the Company's limited
success in raising new financing (equity and/or debt) during the
recent period combined with continued expenses (including those
related to the Initial Project).
The Company continues to explore sources of additional financing to
satisfy its current operating requirements as it is not currently
generating any significant revenues. During fiscal years 2023 and
2022 (as a whole), the Company faced less difficulty in raising
equity funding (but was subject to substantial equity dilution from
the larger amounts of equity financing during the periods) than was
experienced in the prior 3 years. However, this positive trend did
not continue during the last quarter of the 2023 fiscal year and
the first three quarters of the current fiscal year (and the fourth
quarter through the date of this report). The Company raised very
limited equity funds during such periods to meet some of its
immediate needs, and therefore, the Company needs to raise
substantial additional funds in the upcoming periods. The Company
has faced substantial demand for capital and operating expenditures
for the fiscal year 2024 to date (and we anticipate such demands
will continue (or increase) during the remainder of the 2024 fiscal
year and periods thereafter) as it moves toward commercial
implementation of its 3G Tech and development of JVs (including
costs associated with additions of personnel to carry out the
business activities of the Company) and, therefore, is likely to
continue to face, significant cash flow management issues due to
limited capital resources and working capital constraints which had
only recently begun to be alleviated. As a result, the Company has
faced, and continues to face, significant cash flow management
challenges due to material working capital constraints. To
partially mitigate these working capital constraints, the Company's
core senior management and some key employees and consultants have
been deferring most of their cash compensation and/or are accepting
compensation in the form of securities of the Company and members
of the Company's senior management have from time-to-time made
loans to the Company in the past and may do so in future periods.
The Company continues to explore sources of additional financing
(including potential agreements with strategic partners – both
financial and ag-industry) to satisfy its current and future
operating and capital expenditure requirements as it is not
currently generating any significant revenues.
During the years ended June 30, 2023 and 2022, the Company received
gross proceeds of approximately $4,038,000 and $1,737,000,
respectively, from the sale of its debt and equity securities. The
Company paid commissions on the exercise of warrants in the amount
of $86,000 and $19,000 in 2023 and 2022, respectively.
During the nine months ended March 31, 2024 and 2023, the Company
received gross proceeds of approximately $611,000 and $3,266,000,
respectively, from the sale of its debt and equity securities. This
over 80% decrease in proceeds has created substantial difficulties
for the Company.
During the nine months ended March 31, 2024, the Company received
proceeds of $250,000 from a convertible bridge loan but the
provider of the bridge loan breached its contractual
obligation/binding subscription agreement to fund an additional
$1,250,000 to the Company during November 2023 (and on an ongoing
basis since such time), which breach (combined with management
stresses related to the final illness and passing of Dominic
Bassani, Bion's COO and former CEO, and required management
transitions) has created a substantial cash flow difficulties for
the Company which are ongoing.
The Company anticipates substantial demand for capital and
operating expenditures for the balance of fiscal year 2024 (and we
anticipate such demands will continue and increase during the 2025
fiscal year and periods thereafter) as it moves toward commercial
implementation of its 3G Tech and development of JVs (including
costs associated with additions of personnel to carry out the
business activities of the Company) and, therefore, is likely to
continue to face, significant cash flow management issues due to
limited capital resources and working capital constraints which had
only begun to be alleviated during the 2023 fiscal year. As a
result, the Company has faced, and continues to face, significant
cash flow management challenges due to material working capital
constraints. To partially mitigate these working capital
constraints, the Company's core senior management and some key
employees and consultants have been deferring most of their cash
compensation and/or are accepting compensation in the form of
securities of the Company and members of the Company's senior
management have from time-to-time made loans to the year ended June
30, 2018, senior management and certain core employees and
consultants agreed to a one-time extinguishment of liabilities owed
by the Company which in aggregate totaled $2,404,000. Additionally,
the Company made reductions in its personnel during the years ended
June 30, 2014 and 2015 and again during the year ended June 30,
2018. As set forth in detail elsewhere herein, during the year
ended June 30, 2023 senior management (and family members) who held
convertible obligations of the Company adjusted the terms of their
outstanding notes and agreed to debt modifications that reduced of
the Company's debt by $3,516,000 and increased shareholders equity
by the same amount.
The constraints on available resources have had, and continue to
have, negative effects on the pace and scope of the Company's
efforts to operate and develop its business. The Company has had to
delay payment of trade obligations and has had to economize in many
ways that have potentially negative consequences. If the Company is
able to raise needed funds during the remainder of the current
fiscal year (and subsequent periods), of which there is no
assurance, management will not need to consider deeper cuts
(including additional personnel cuts) and/or curtailment of ongoing
activities including research and development activities. The
Company will need to obtain additional capital to fund its
operations and technology development, to satisfy existing
creditors, to develop Projects (including the Initial Project, JV
Projects (including the Dalhart, Olson and DVG Projects), and the
Kreider 2 facility) and CAFO Retrofit waste remediation systems.
The Company anticipates that it will seek to raise from $20,000,000
to $80,000,000 or more debt and/or equity through joint ventures,
strategic partnerships and/or sale of its equity securities
(common, preferred and/or hybrid) and/or debt (including
convertible) securities, and/or through use of 'rights' and/or
warrants (new and/or existing) and/or through other means during
the next twelve months. However, there is no assurance, especially
in light of the difficulties the Company has experienced in many
recent years and the extremely unsettled capital markets that
presently exist for small pre-revenue companies like us, that the
Company will be able to obtain the funds that it needs to stay in
business, complete its technology development or to successfully
develop its business and Projects.
There is no realistic likelihood that funds required during the
next 12 months (or in the periods immediately thereafter) for the
Company's basic operations, the Initial Project and/or proposed JVs
and/or Projects will be generated from operations. Therefore, the
Company will need to raise sufficient funds from external sources
such as debt or equity financings or other potential sources. The
lack of sufficient additional capital resulting from the inability
to generate cash flow from operations and/or to raise capital from
external sources would force the Company to substantially curtail
or cease operations and would, therefore, have a material adverse
effect on its business. Further, there can be no assurance that any
such required funds, if available, will be available on attractive
terms or that they will not have a significantly dilutive effect on
the Company's existing shareholders. All of these factors have been
exacerbated by the extremely limited and unsettled credit and
capital markets presently existing for small companies like Bion.
As of March 31, 2024, the Company has $9,570,226 in total assets,
$6,177,784 in total liabilities, and $3,392,442 in total equity.
A full-text copy of the Company's Form 10-Q is available at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/875729/000107997324000724/bion_10q-033124.htm
About Bion Environmental Technologies
Old Bethpage, N.Y.-based Bion Environmental Technologies, Inc.
designs, markets, and manages waste, waste water, and storm water
treatment systems for the agricultural and food processing
industries. Bion also produces organic fertilizers, potting soils,
and soil amendments by mixing nutrient-rich livestock waste with
sand, peat moss, and pine bark.
As of December 31, 2023, the Company had $9.6 million in total
assets, $5.94 million in total liabilities, and $3.63 million in
total equity.
Bion cautioned in its Form 10-Q Report for the quarterly period
ended December 31, 2023, citing that the Company's lack of revenue
and/or operating profits, together with the low likelihood of
generating positive cash flow and/or net income during the next
12-24 months, raise substantial doubt about the Company's ability
to continue as a going concern.
BLUE STAR: Bid Price Rule Compliance Deadline Extended by Nasdaq
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Blue Star Foods Corp. reported in a Form 8-K filed with the
Securities and Exchange Commission that on May 30, 2024, the
Company received a letter from the Nasdaq Hearings Panel indicating
that the May 30, 2024 date to demonstrate compliance with Listing
Rule 5550(a)(2) had been extended to June 5, 2024.
As previously disclosed, on April 10, 2024, Blue Star received a
letter from the Panel indicating that the Company's request for
continued listing on Nasdaq was granted subject to the following:
(i) on or before April 1, 2024, the Company will file its Form 10-K
for the period ended Dec. 31, 2023 demonstrating compliance with
Listing Rule 5550(b)(1); (ii) on or before May 15, 2024, the
Company will file its Form 10-Q for the period ended March 31, 2024
demonstrating continued compliance with Listing Rule 5550(b)(1),
and (iii) on or before May 30, 2024, the Company shall have
demonstrated compliance with Listing Rule 5550(a)(2) by evidencing
a closing bid price of $1.00 or more per share for a minimum of 10
consecutive trading sessions, and evidence compliance with all
applicable criteria for continued listing.
The Company believes it has demonstrated compliance with Listing
Rule 5550(a)(2).
About Blue Star Foods Corp.
Blue Star Foods Corp., headquartered in Miami, Florida, is an
international seafood company based in Miami, Florida that imports,
packages and sells refrigerated pasteurized crab meat, and other
premium seafood products. The Company's current source of revenue
is from importing blue and red swimming crab meat primarily from
Indonesia, the Philippines and China and distributing it in the
United States and Canada under several brand names such as Blue
Star, Oceanica, Pacifika, Crab & Go, First Choice, Good Stuff and
Coastal Pride Fresh, and steelhead salmon and rainbow trout
fingerlings produced under the brand name Little Cedar Farms for
distribution in Canada. The Company sells primarily to food
service distributors. The Company also sells its products to
wholesalers, retail establishments and seafood distributors.
Houston, Texas-based MaloneBailey, LLP, the Company's auditor since
2014, issued a "going concern" qualification in its report dated
April 1, 2024, citing that the Company has suffered recurring
losses from operations and has a net capital deficiency that raises
substantial doubt about its ability to continue as a going concern.
BRIDGE DIAGNOSTICS: Hires Crown Medical Collections as Counsel
--------------------------------------------------------------
Bridge Diagnostics, LLC seeks approval from the U.S. Bankruptcy
Court for the Central District of California to employ Crown
Medical Collections, LLC as special counsel.
The firm's services include:
(a) contact and negotiate with third-parties health insurance
payers to collect outstanding accounts receivables (AR) for
COVID-19 testing on behalf of the Debtor;
(b) conduct discovery related to the outstanding AR for
COVID-19 testing on behalf of the Debtor pursuant to Federal Rules
of Civil Procedure 2004;
(c) advise or counsel the Debtor of its rights related to
collection of the outstanding AR for COVID-19 testing balances;
and
(d) perform all other services for and on behalf of Debtor
that may be necessary or appropriate in the collection of the
outstanding AR COVID-19 balances.
The firm will be paid on a contingent basis of 30 percent of the
total funds collected in accordance with the fee agreement.
In addition, the firm will seek reimbursement for expenses
incurred.
Richard Hersperger, Esq., a member at Crown Medical Collections,
disclosed in a court filing that the firm is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
The firm can be reached through:
Richard Hersperger, Esq.
Crown Medical Collections LLC
Telephone: (833) 205-4455
About Bridge Diagnostics
Bridge Diagnostic, LLC filed a petition under Chapter 11,
Subchapter V of the Bankruptcy Code (Bankr. C.D. Cal. Case No.
24-10803) on March 29, 2024, with $10,000,001 to $50 million in
both assets and liabilities.
Judge Theodor Albert presides over the case.
The Debtor tapped David Wood, Esq., at Marshack Hays Wood, LLP as
legal counsel, Richard Hersperger, Esq., at Crown Medical
Collections LLC as special counsel, and Stretto, Inc. as claims and
noticing agent.
BULLDOG PURCHASER: Moody's Ups CFR to B3 on Refinancing Transaction
-------------------------------------------------------------------
Moody's Ratings upgraded Bulldog Purchaser, Inc's (dba "Bay Club")
Corporate Family Rating to B3 from Caa1 and Probability of Default
Rating to B3-PD from Caa1-PD. Concurrently, Moody's assigned a B2
rating for its proposed new first lien credit facilities
(consisting of a 5-year $75 million revolver expiring in 2029 and a
7-year $600 million first lien term loan due 2031) and a Caa2
rating for the proposed new 8-year $200 million second lien term
loan due 2032. Moody's took no action on the company's existing
debt, and is expected to withdraw these ratings once the
refinancing transaction closes. Proceeds from the new term loans
will be used to refinance existing debt. The outlook remains
stable.
The upgrade of CFR to B3 reflects Moody's view that the proposed
refinancing will favorably improve Bay Club's liquidity by
addressing the upcoming maturity of its existing first lien term
loan in September 2025 and existing second lien term loan in
September 2026 and increasing the restricted group cash balance.
Moody's estimates that the slight increase in annual cash interest
expense of the borrower after the refinancing transaction (as a
result of folding in the SideCar indebtedness) will be offset by
EBITDA contribution to the restricted borrowing group of recently
acquired assets that are currently in unrestricted subsidiaries.
This contribution along with projected earnings improvement should
translate into modestly positive free cash flow in 2024. The
current unrestricted subsidiaries housing recently acquired assets
will become restricted subsidiaries with the assets pledged to the
proposed credit facility. Bay Club's B3 CFR reflects that the
improved liquidity will provide the company with more flexibility
to execute its growth strategies to increase new memberships and
retention and improve geographic diversity. The B3 CFR also
reflects Moody's view that the company will have adequate liquidity
over the next year. Pro forma for the transaction, the company will
have $53 million of cash as well as access to its newly upsized
revolver. For FY24, Moody's expects the company's earnings will be
able to cover its fixed charges (interest expense and planed capex)
and resulting in modestly positive free cash flow.
RATINGS RATIONALE
The B3 CFR reflects Bay Club's high financial leverage with LTM (as
of January 31, 2024) Moody's adjusted debt-to-EBITDA in the mid 8x
range (pro forma for the incremental earnings from acquisitions
closed in late 2023 and the proposed debt structure). Moody's
expect debt-to-EBITDA leverage will decline to the mid 6x over the
next 12 to 18 months through earnings growth. The rating is also
constrained by Bay Club's small scale with revenue of about $346
million for the fiscal year ended January 2024 (FY23) pro forma for
the acquired assets, high geographic concentration on the west
coast, especially in the state of California, as well as financial
policy risk due to an aggressive acquisition strategy funded with
incremental debt under private equity ownership. Additionally, the
aggressive acquisition strategy adds execution risk and the
potential for re-leveraging transactions from expected debt issued
to fund planned acquisitions.
However, the B3 CFR benefits from Bay Club's sizeable real estate
value for the clubs that it owns under the borrower group. The
rating also benefits from an affluent membership base and high
quality of its country club facilities and services. Bay Club
received equity injections in 2022 and 2023 from its sponsor KKR,
which shows support from the owner to bolster liquidity when
earnings and cash flow were weakened by membership reductions
during the pandemic.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The stable outlook reflects Moody's expectation that debt-to-EBITDA
leverage will decline to the mid 6x range through earnings growth
over the next 12 to 18 months, but that the company will likely
pursue acquisitions that periodically increase leverage. The stable
outlook also reflects Moody's view that Bay Club will have an
adequate liquidity profile over the next year.
The ratings could be upgraded if an increase in membership and
earnings results in materially lower leverage as well as sustained
and comfortably positive free cash flow generation. The company
would also need to increase scale and geographic diversity,
integrate acquisitions with no operational disruptions, maintain
good liquidity, sustain debt-to-EBITDA leverage at a level
approaching 4.5x or lower, and sustain EBITDA less capital spending
to interest above 2.0x.
Ratings could be downgraded if membership levels and earnings do
not improve, the company does not sustain good facility
reinvestment, free cash flow is negative, or EBITDA less capital
spending to interest is below 1.0x. A deterioration in liquidity or
debt-financed acquisitions that sustain high leverage could also
lead to a downgrade.
Marketing terms for the new credit facilities (final terms may
differ materially) include the following: Incremental pari passu
debt capacity up to the greater of $135 million and 100% of
consolidated EBITDA, plus unlimited amounts subject to 4.50x first
lien net leverage ratio. There is an inside maturity sub-limit up
to the greater of $135 million and 100% of consolidated EBITDA.
There are no "blocker" provisions which prohibit the transfer of
specified assets to unrestricted subsidiaries. There are no
protective provisions restricting an up-tiering transaction.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
Bay Club is a membership-based hospitality company. It operates
clubs on the west coast of the US (in the state of California,
Oregon and Washington). The company's clubs offer amenities that
combine the elements of fitness, sports, leisure, and hospitality.
Bay Clubs has been owned by private equity firm KKR since 2018.
FY23 revenue was roughly $346 million pro forma for acquisitions
that closed in late 2023.
CALSELECT INSURANCE: Seeks Interim Cash Collateral Access
---------------------------------------------------------
Calselect Insurance Services asks the U.S. Bankruptcy Court for the
Central District of California, Santa Ana Division, for authority
to use the cash collateral of secured creditor Wintrust Agent
Finance, a division of Lake Forest Bank and Trust Company, N.A,
from July 3, 2024, through October 31, 2024.
Calselect requires the continued use of its cash on hand and other
income generated from its operations and sale of insurance products
to maintain the day-to-day business operations and pay employees
and vendors on a timely basis.
As previously reported by the Troubled Company Reporter, Calselect
Insurance Services' is not in bankruptcy because of its lack of
profitability. The issue in this case, and the cause of the
bankruptcy filing, is that the Debtor is liable on co-debtor
obligations created by Sean and Heidi McMullin's purchase of pizza
parlor locations in a different company, Pizza Fuoco Inc., which
failed. Co-debtor obligations include liabilities to Secured
Creditor Wintrust and Mission Valley Bank which are the only
creditors in the case.
The Debtor entered into a Business Loan Agreement with Allstate
Finance Company, LLC on September 28, 2018. The principal loan
balance was $1.878 million, with an interest rate of 5.750%. The
Debtor was to pay 119 payments of $20,620 with an irregular last
payment of $20,620.
Allstate Finance filed a UCC Financing Statement securing the loan
on January 2, 2018. The Loan was sold to Wintrust on November 15,
2021.
Wintrust filed a UCC Financing Statement Amendment assigning the
lien to Wintrust. The Debtor refinanced the Loan on March 14, 2022,
to obtain a lower interest rate. Under the refinanced loan, the
principal amount is $1.375 million with an interest rate of
4.750%.
Calselect proposes to make adequate protection payments to Wintrust
consistently with its pre-petition contractual payment amount of
$20,086 per month, which is received by Wintrust rom All-State
before All-State transmits the balance of its monthly commission to
the Debtor.
Wintrust consents to the Debtor's use of its cash collateral on an
interim basis and Calselect's use of cash collateral is conditioned
upon adequate protection being provided to Wintrust with direct
payments from insurance commissions proceeds from Allstate.
Calselect will also grant replacement liens as adequate protection,
that is deemed valid, binding, enforceable, non-avoidable, and
automatically perfected, effective as of the Petition Date.
A copy of the motion is available at https://urlcurt.com/u?l=dZ4Ai9
from PacerMonitor.com.
About Calselect Insurance Services
Calselect Insurance Services is an Allstate insurance agency that
offers personal and commercial lines of insurance.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. C.D. Cal. Case No. 8:24-bk-10574-SC) on
March 8, 2024. In the petition signed by Sean McMullin, president
and secretary, the Debtor disclosed up to $10 million in both
assets and liabilities.
Judge Scott C. Clarkson oversees the case.
Andy C. Warshaw, Esq., at Financial Relief Law Center, APC,
represents the Debtor as legal counsel.
CAREERBUILDER LLC: Moody's Lowers CFR & First Lien Term Loan to Ca
------------------------------------------------------------------
Moody's Ratings downgraded CareerBuilder, LLC's corporate family
rating to Ca from Caa3 and senior secured first lien term loan
rating to Ca from Caa3. The probability of default rating was
affirmed at Ca-PD. The outlook is stable.
The downgrade of CareerBuilder's CFR to Ca reflects Moody's view of
a high likelihood of a debt restructuring in the next six months
given the company's limited liquidity and negative operating trends
that include declining revenue, negative free cash flow and a lack
of consolidated profits.
RATINGS RATIONALE
CareerBuilder's ratings, including its Ca corporate family rating
and stable outlook, reflect Moody's view that the capital structure
is currently unsustainable given the company's weak earnings
quality that will require the company to take meaningful actions to
optimize costs and grow new revenue streams. Earnings quality is
weak and the company would have minimal EBITDA without including
add-backs for restructuring charges and other items. For the twelve
months ended September 30, 2023, the company generated negative $22
million of free cash flow. Additionally, the company's cash balance
is low at $10 million as of September 30, 2023. Given the company's
free cash flow deficits and lack of a revolving credit facility,
the company will have to rely on its relatively low cash balance to
fund operations, which Moody's expects will be insufficient to
sustain operations during the next 12 months without a significant
improvement in revenue growth and profitability or an equity
infusion.
CareerBuilder has yet to demonstrate revenue and earnings growth
and the current macroeconomic environment will be a headwind to
volumes amid a slowing US labor market. The company benefits from a
well-known brand and a large database of resumes. The company faces
strong competition, including from larger, better-capitalized peers
such as Indeed.com owner Recruit Holdings Co., Ltd. (A3 stable) and
LinkedIn Corporation owner Microsoft Corporation (Aaa stable).
Moody's expects CareerBuilder's financial strategies will remain
aggressive under its private equity ownership and may include
additional distressed exchanges.
CareerBuilder's liquidity profile is considered weak. The company
will rely on its limited cash balance to fund operations. Cash as
of September 31 was $10 million. The company does not have a
revolving credit facility. Moody's expects the company will
generate negative $20 to $30 million of free cash flow on an annual
basis. There are no financial covenants on the first lien credit
facility following the expiration of the revolver.
The Ca rated senior secured $131 million term loan maturing in July
2026 reflects the overall probability of default, reflected in the
Ca-PD, and the loss given default assessment for the debt
instrument. The senior secured first lien term loan benefits from
secured guarantees from all existing and subsequently acquired
domestic subsidiaries and is in line with the Ca CFR, as there is
no other meaningful debt in the capital structure.
The stable outlook reflects Moody's recovery expectations in the
event of default, and Moody's view that the company's probably of
default, including the potential for a debt restructuring, will
remain at current levels as it executes its plan to address
upcoming debt maturities.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if the company can stabilize its debt
capital structure and if negative operating trends are resolved
with a recovery in earnings and liquidity.
The ratings could be downgraded should recovery prospects in the
event of default deteriorate further.
CareerBuilder, headquartered in Chicago, IL and controlled by
affiliates of private-equity sponsor Apollo Global Management, Inc.
operates an online job board and provides related services and
software.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
CFN ENTERPRISES: Posts $647,571 Net Loss in Q1 2024
---------------------------------------------------
CFN Enterprises Inc. filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q reporting a net loss
of $647,571 on $3,844,592 of net revenues for the three months
ended March 31, 2024, compared to a net loss of $551,222 on
$112,957 of net revenues for the three months ended March 31, 2023.
The Company had a working capital deficit of $14,842,360 and an
accumulated deficit of $75,130,432 as of March 31, 2024. As of
March 31, 2024, it had $153,044 in unrestricted cash and $7,369,729
in notes payable.
As of March 31, 2024, the Company has $6,063,561 in total assets,
$20,131,138 in total liabilities, and $14,067,577 in total
stockholders' deficit.
Management's plan to continue as a going concern includes raising
capital in the form of debt or equity, growing the CFN Business,
growing its existing business acquired under the Ranco Agreement,
managing and reducing operating and overhead costs and continuing
to pursue strategic transactions and opportunities including
launching an e-commerce network focused on the sale of general
wellness CBD products.
A full-text copy of the Company's Form 10-Q is available at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1352952/000109690624001151/cnfn-20240331.htm
About CFN Enterprises Inc.
CFN Enterprises Inc owns and operates as a media agency. The
Company offers creative and media network solutions for cannabis
industry. CFN Enterprises serves customers in the United States.
As of December 31, 2023, the Company had $5,459,232 in total
assets, $18,890,238 in total liabilities, and $13,431,006 in total
stockholders' deficit.
New York, N.Y.-based RBSM LLP, the Company's auditor since 2012,
issued a "going concern" qualification in its report dated April
11, 2024, citing that the Company has suffered recurring losses
from operations and will require additional capital to continue as
a going concern. This raises substantial doubt about the Company's
ability to continue as a going concern.
CHAMPION DEVELOPMENT: Hires Munsch Hardt Kopf & Harr as Counsel
---------------------------------------------------------------
Champion Development, Inc. seeks approval from the U.S. Bankruptcy
Court for the Western District of Texas to employ Munsch Hardt Kopf
& Harr, PC as its bankruptcy counsel.
The firm will render these services:
(a) serve as attorneys of record for the Debtor in all aspects
throughout the bankruptcy case;
(b) assist the Debtor in carrying out its duties under the
Bankruptcy Code;
(c) consult with the United States Trustee, any statutory
committee that may be formed, and all other creditors and
parties-in-interest concerning administration of the bankruptcy
case;
(d) assist in potential sales of the Debtor's assets;
(e) prepare on behalf of the Debtor all legal papers and
documents, and assist it in the preparation of schedules,
statements, and reports, and represent it;
(f) assist the Debtor in connection with formulating and
confirming a Chapter 11 plan;
(g) assist the Debtor in analyzing and appropriately treating
the claims of creditors, including objecting to claims and trying
claim objections;
(h) appear before this court and any appellate courts or other
courts having jurisdiction over any matter associated with the
bankruptcy case;
(i) perform all other legal services and provide all other legal
advice to the Debtor as may be required or deemed to be in the
interest of its estate in accordance with the its powers and duties
as set forth in the Bankruptcy Code; and
(j) defend the Debtor against any and all actions and claims
made against it and its property.
The hourly rates of the firm's counsel and staff are as follows:
Thomas Berghman, Shareholder $600
Conor White, Associate $370
Heather Valentine, Paralegal $215
The firm will also seek reimbursement for expenses incurred.
The firm received a retainer in the amount of $50,000 from the
Debtor.
Thomas Berghman, Esq., disclosed in a court filing that the firm is
a "disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
The firm can be reached through:
Thomas D. Berghman, Esq.
Munsch Hardt Kopf & Harr PC
500 N. Akard St., Ste. 4000
Dallas, TX 75201
Telephone: (214) 855-7554
Facsimile: (214) 978-4375
Email: tberghman@munsch.com
About Champion Development
Champion Development, Inc. sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. W.D. Tex. Case No. 24-10499) on
May 6, 2024. In the petition signed by Michael Chu, president, the
Debtor disclosed up to $500,000 in assets and up to $10 million in
liabilities.
Judge Shad Robinson oversees the case.
Thomas D. Berghman, Esq., at Munsch Hardt Kopf & Harr PC is the
Debtor's legal counsel.
CIBUS INC: All Three Proposals Passed at Annual Meeting
-------------------------------------------------------
Cibus, Inc. reported in a Form 8-K filed with the Securities and
Exchange Commission that on May 30, 2024, it held its 2024 Annual
Meeting of Stockholders at which the stockholders:
(1) elected Rory Riggs, Peter Beetham, Mark Finn, Jean-Pierre
Lehmann, Gerhard Prante, and Keith Walker to the Company's
Board of Directors, each to serve until the next annual
meeting of stockholders and until his successor has been
elected and qualified, or until his earlier death,
resignation, or removal;
(2) approved, on an advisory basis, the compensation of the
Company's named executive officers; and
(3) ratified the appointment by the Audit Committee of BDO USA,
P.C. as the Company's independent registered public
accounting firm for the year ending Dec. 31, 2024.
About Cibus
Headquartered in San Diego, CA, Cibus -- www.cibus.com -- is an
agricultural biotechnology company that uses proprietary gene
editing technologies to develop plant traits (or specific genetic
characteristics) in seeds. Its primary business is the development
of plant traits that help address specific productivity or yield
challenges in farming such as traits addressing plant agronomy,
disease, insects, weeds, nutrient-use, or the climate. These
traits are referred to as productivity traits and drive greater
farming profitability and efficiency. They do this in several
ways, including, but not limited to, making plants resistant to
diseases or pests or enabling plants to process nutrients more
efficiently. Certain of these traits lead to the reduction in the
use of chemicals like fungicides, insecticides, or the reduction of
fertilizer use, while others make crops more adaptable to their
environment or to climate change. The ability to develop
productivity traits in seeds that can increase farming productivity
and reduce the use of chemicals in farming is the promise of gene
editing technologies. In addition, Cibus is developing, through
partner-funded projects, certain alternative plant-based oils or
bio-based fermentation products to meet the functional needs of the
new sustainable ingredients industry to replace current ingredients
that are identified to raise environmental challenges, such as
ingredients derived from fossil fuels, materials that cause
deforestation, or materials that raise other sustainability
challenges.
San Diego, California-based BDO USA, P.C., the Company's auditor
since 2023, issued a "going concern" qualification in its report
dated March 21, 2024, citing that the Company has incurred
recurring losses from operations and negative cash flows from
operations.
CITIZENEX LLC: Nathan Smith Named Subchapter V Trustee
------------------------------------------------------
The U.S. Trustee for Region 17 appointed Nathan Smith, Esq., as
Subchapter V trustee for Citizenex LLC.
Mr. Smith, a partner at Malcolm & Cisneros, will be paid an hourly
fee of $550 for his services as Subchapter V trustee and will be
reimbursed for work-related expenses incurred.
Mr. Smith declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Nathan F. Smith, Esq.
Malcolm & Cisneros
2112 Business Center Drive
Irvine, CA 92612
Phone: (949) 252-9400
Email: nathan@mclaw.org
About Citizenex LLC
Citizenex LLC sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Nev. Case No. 24-12418) on May 16, 2024,
with up to $50,000 in assets and up to $500,000 in liabilities.
David A. Riggi, Esq., at Riggi Law Firm is the Debtor's legal
counsel.
COALINGA, CA: S&P Affirms 'BB+' Rating on Water and Sewer Bond
--------------------------------------------------------------
S&P Global Ratings revised the outlook to stable from negative and
affirmed its 'BB+' rating on Coalinga Public Finance Authority,
Calif.'s outstanding bonds issued for the city of Coalinga's water
and sewer enterprises.
"The outlook revision to stable reflects our view of the city's
progress toward achieving a more resilient water supply, due to its
collaboration with key regional water purveyors and critical
capital support from California's Department of Water Resources,"
said S&P Global Ratings credit analyst Chloe Weil. "We also note
that both the city's water supply conditions and cash reserves have
improved," Ms. Weil added.
As of June 30, 2023, the water system supported $16.5 million of
debt obligations and the sewer system supported about $2.3 million
of debt obligations.
For long-term water supply reliability, S&P believes the city may
need to add additional supply sources and expanded storage, which
could be cost prohibitive without additional state funding.
The city's service area is in Fresno County, which is part of
California's Central Valley.
COASTAL CONSTRUCTION: Seeks Chapter 11 Bankruptcy Protection
------------------------------------------------------------
On May 22, 2024 Coastal Construction Group LLC filed for chapter 11
protection in the District of New Jersey. According to court
filing, the Debtor reports between $100,000 and $500,000 in debt
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
June 20, 2024 at 2:00 p.m. in room telephonically.
About Coastal Construction
Coastal Construction Group LLC --
https://coastalconstructiongroupnj.com/ --is the Custom Home
Builder of choice for Home Buyers and contemporary New Jersey
Architects.
On May 22, 2024 Coastal Construction Group LLC filed for chapter 11
protection in the District of New Jersey (Case No. 24-15203). In
the petition signed by Dean Rado, as managing member, the Debtor
reports estimated assets between $100,000 and $500,000 and
estimated liabilities between $1 million and $10 million.
The Debtor is represented by:
Daniel E. Straffi, Esq.
Straffi & Straffi, LLC
235 Hickory LaneUnit B
Bayville, NJ 08721
COGENT COMMUNICATIONS: Moody's Rates New $300MM Unsec. Notes 'B3'
-----------------------------------------------------------------
Moody's Ratings assigned a B3 rating to the proposed $300 million
backed senior unsecured notes due 2027 of Cogent Communications
Group, LLC (Cogent or Cogent Communications Group), a multinational
Tier 1 internet service provider. A portion of the proceeds from
the proposed notes offering will be used to exercise a contractual
option to prepay an Indefeasible Right of Use (IRU) at a 12%
discount. The remaining proceeds will be used for general corporate
purposes and/or to make dividends to the parent company, Cogent
Communications Holdings, Inc. Moody's also upgraded the company's
backed senior secured rating to Ba2 from Ba3 and affirmed the B2
corporate family rating, B2-PD probability of default rating, and
B3 backed senior unsecured rating. The speculative grade liquidity
rating (SGL) remains unchanged at SGL-2. The outlook is maintained
at stable.
Debt to EBITDA for the LTM period ended March 31, 2024 was 8.3x
(3.4x when adding back Sprint acquisition costs and cash receipts
from IP Transit Services). Pro-forma for the notes offering and the
securitization transaction completed in May, Moody's expects debt
to EBITDA to increase to 10x (4.1x when adding back Sprint
acquisition costs and cash receipts from IP Transit Services).
Excluding debt and EBITDA from the securitized assets of Cogent
IPv4 Holdco LLC, Moody's expects debt to EBITDA to increase to
10.8x (4.3x when adding back Sprint acquisition costs and cash
receipts from IP Transit Services).
All financial metrics cited reflect Moody's standard adjustments
unless otherwise noted.
The B2 CFR affirmation reflects Moody's expectation that Cogent
will continue to successfully integrate Sprint's wireline assets
and that most of the integration and execution risks can be
substantially mitigated by T-Mobile USA, Inc.'s (T-Mobile)
contractual obligation payments for IP transit services from
Cogent. Moody's expects that debt to EBITDA (excluding debt and
EBITDA from securitized assets and adding back Sprint acquisition
costs and cash receipts from IP Transit Services) will approach the
high 5x range in 2024, above Moody's downgrade consideration of
debt to EBITDA sustained above 5.5x, and remain in that range for
2025. However, Moody's expects that network consolidation savings
from a successful integration, moving substantial amounts of
customers to on-net from off-net and discontinuing low-margin
non-core products will contribute to increased profitability over
the next few years. Moody's also expects mid-to-high single digit
percentage annual organic revenue growth in 2026. Wavelength and
data center capacity should drive incremental revenue, but Moody's
believes wavelength will not significantly contribute to
consolidated revenue until at least the second half of 2025
(wavelength only contributed to 1% of consolidated revenue for the
LTM period ended March 31, 2024). As such, Moody's expects revenue
growth and margin expansion will contribute to debt to EBITDA
(excluding debt and EBITDA from securitized assets and adding back
Sprint acquisition costs and cash receipts from IP Transit
Services) declining towards 4.5x by year-end 2026. Nonetheless, if
integration issues, operational missteps, or additional meaningful
debt raises contributing to a delayed path of Cogent reducing
financial leverage, a negative action may ensue, which may include
a downgrade of the CFR and/or an outlook change to negative.
The upgrade of the senior secured notes to Ba2 from Ba3 reflects
the additional debt cushion provided by the proposed senior notes
in a default scenario.
The assigned rating is subject to review of final documentation and
no material change to the size, terms and conditions of the
transaction as advised to Moody's.
RATINGS RATIONALE
Cogent's B2 CFR is constrained by high debt to EBITDA (excluding
debt and EBITDA from securitized assets and adding back Sprint
acquisition costs and cash receipts from IP Transit Services) that
Moody's expects will remain in the high 5x range in 2024 and 2025
largely driven by costs associated with Sprint's wireline business.
The rating is also constrained by Moody's expectation of continued
negative free cash flow generation resulting from Cogent's use of
targeted debt leverage to optimize shareholder returns largely
through its dividend policy. While liquidity currently offsets some
of the risks inherent in this financial policy, integration risks
associated with the Sprint wireline business, moderate but growing
scale and highly competitive end markets could also pressure the
company's future credit profile absent the balanced approach to
this policy that exists.
The rating is supported by its good liquidity profile, Moody's
expectations for at least mid-single-digit percentage organic
revenue growth in 2024 and 2025 due to robust internet traffic
growth and expansion of Cogent's products to include wavelength and
optical transport, solid EBITDA growth and margins, a growing and
diversified customer base and a sizable and productive sales force.
The company's low cost structure and targeted niche product sales
approach continue to make it a nimble and formidably persistent
competitor against larger companies burdened with more complex,
higher cost legacy structures.
The instrument ratings reflect both the probability of default of
Cogent, as reflected in the B2-PD probability of default rating, an
average expected family recovery rate of 50% at default given the
mix of secured and unsecured debt, and the loss given default
assessment of the debt instruments in the capital structure based
on a priority of claims. Cogent's senior secured notes are rated
Ba2, three notches above the B2 CFR reflecting their senior
position in the capital structure and the loss absorption provided
by the unsecured notes and operating lease and finance lease
payments. The senior secured notes are secured equally and ratably
by continuing first-priority security interests in substantially
all of the tangible and intangible assets of Cogent and its
subsidiary guarantors. The senior secured notes are guaranteed by
Cogent's domestic subsidiaries and secured by a pledge of stock of
100% of Cogent's US subsidiaries and 65% of the Company's non-US
subsidiaries. In addition, the senior secured notes are guaranteed
on a senior unsecured basis by Cogent Communications Holdings, Inc.
(Cogent Holdings), Cogent's public parent. However, Cogent Holdings
will not be subject to the covenants under the indenture governing
these secured notes as it is not a party to the Indenture and is
not governed by the indenture. Cogent's senior unsecured notes are
rated B3, reflecting their junior position to the senior secured
notes. The securitized debt (not rated) issued by Cogent IPv4 LLC,
a special-purpose, bankruptcy remote, indirect wholly owned
subsidiary of Cogent Infrastructure, LLC, is excluded from Moody's
LGD waterfall for Cogent.
Cogent's SGL-2 liquidity rating indicates good liquidity. As of
March 31, 2024, cash held on a consolidated basis at Cogent
Holdings totaled $118.4 million, with the bulk of that cash
remaining at Cogent, the operating entity. Cash balances will
improve from the unsecured notes transaction and the previous
securitization transaction completed in May 2024. Moody's expects
Cogent to generate negative free cash flow over the next 12 months,
but cash received from the IP Transit Services agreement will
support the maintenance of significant cash balances over the next
12 months despite the company's equity stakeholder returns. When
prudent, Moody's believe Cogent will likely supplement its regular
quarterly dividends with share buybacks and/or special dividends.
As of March 31, 2024, Cogent had $30.4 million available for stock
buybacks under its share repurchase program which is authorized
through December 31, 2024. Cogent does not have a revolving credit
facility. Moody's expect Cogent to maintain sufficient cash to run
the business prudently at all times. The company is not subject to
financial maintenance covenants.
The stable outlook is based on Moody's view that while Cogent's
earnings and cash flow will grow, equity stakeholder returns, in
the form of dividends and share buybacks, will increase in tandem.
Moody's expects the company will maintain sufficient liquidity
while debt levels remain relatively constant over the next 12
months. Cogent's low cost structure and niche sales approach, in
conjunction with its aggressive equity stakeholder return policy,
will prevent the company from generating meaningful positive free
cash flow for the near future.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Moody's could upgrade Cogent's ratings if the company maintains
good liquidity, operating performance improves, debt to EBITDA
(excluding debt and EBITDA from securitized assets and adding back
Sprint acquisition costs and cash receipts from IP Transit
Services) is sustained below 4x and free cash flow to debt improves
to the mid-single digits.
Moody's could downgrade Cogent's ratings if debt to EBITDA
(excluding debt and EBITDA from securitized assets and adding back
Sprint acquisition costs and cash receipts from IP Transit
Services) is sustained above 5.5x or if liquidity weakens.
Cogent Communications Holdings, Inc. (NASDAQ: CCOI), parent of
Cogent Communications Group, LLC with headquarters in Washington,
DC, is a multinational Tier 1 internet service provider. The
company offers dedicated internet access and data transport over
its fiber optic, IP network to corporate and net-centric customers.
Cogent is among the top five largest carriers of internet traffic
in the world.
The principal methodology used in these ratings was Communications
Infrastructure published in February 2022.
COGENT COMMUNICATIONS: S&P Rates New Senior Unsecured Notes 'B+'
----------------------------------------------------------------
S&P Global Ratings assigned its 'B+' issue-level rating and '4'
recovery rating to Cogent Communications Group LLC's proposed $300
million senior unsecured notes due 2027. The '4' recovery rating
indicates its expectation for average (30%-50%; rounded estimate:
40%) recovery for lenders in the event of a payment default.
The company plans to use the proceeds from the proposed senior
unsecured notes to prepay an existing $110 million indefeasible
right-of-use (IRU) agreement held by Cogent Infrastructure Inc. at
a 12% discount and add about $190 million of cash to the balance
sheet. At the same time, S&P revised its recovery rating on
Cogent's existing senior unsecured debt to '4' from '3' due to the
increase in unsecured debt, which reduces recovery prospects for
existing unsecured creditors. The 'B+' issue-level rating on the
unsecured debt and the 'BB' issue-level rating on the secured debt
are unchanged.
The 'B+' issuer credit rating and stable outlook are unchanged. S&P
said, "Our base-case forecast now assumes leverage increases to
4.8x in 2024 (a modest increase from our previous expectations)
from 4.3x in 2023 before declining to the mid-4x area in 2025,
despite a lower $100 million payment from T-Mobile. Further, we
expect more material leverage improvement in 2026 from organic
growth and synergies from the Sprint acquisition. While we assume
the Sprint assets to be dilutive to overall EBITDA in the near
term, Cogent will receive payments from T-Mobile of around $200
million in 2024, which will partially offset the negative EBITDA
contribution and increased debt from the proposed transaction."
ISSUE RATINGS--RECOVERY ANALYSIS
Key analytical factors
-- The proposed $300 million 7% senior unsecured notes due 2027
has the same terms and conditions as the existing $450 million of
existing 7% senior unsecured notes due 2027. Cogent Finance Inc.
and Cogent Communications Group LLC are co-issuers on both secured
and unsecured notes.
-- The secured notes have a first-lien security interest in
substantially all of the company's and the subsidiary guarantors'
assets.
-- S&P notes that all assets held at Cogent Infrastructure are
outside of the collateral group of restricted subsidiaries. Cogent
Communications LLC is wholly owned subsidiary of Cogent
Communications Group and was previously the sole operating
company.
Simulated default assumptions
-- S&P's hypothetical default scenario assumes a payment default
in 2028 and assumes that the integration of the Sprint business
acquisition takes much longer than expected while significant
competitive pressures and changing sector trends; rising office
vacancy rates; and a deep economic recession, including sustained
inflation, adversely affects the company's adequate cash flow
generation. S&P anticipates a payment default situation if cash
flow generation is insufficient to cover the company's lease
payments and its fixed-charge obligations while liquidity is fully
utilized.
Simplified waterfall
-- EBITDA at emergence: $193 million
-- EBITDA multiple: 5.5x
-- Gross recovery value: $1,064 million
-- Net recovery value (after 5% administrative costs and value
ascribed to securitized Internet Protocol version 4 [IPv4]
addresses): $856 million
-- Estimated senior secured debt claims: $509 million
--Recovery expectations: 90%-100% (rounded estimate: 95%)
-- Value available for senior unsecured debt claims: $347 million
-- Estimated senior unsecured debt claims: $809 million
--Recovery expectations: 30%-50% (rounded estimate: 40%)
COLEGIO OTOQUI: Case Summary & Eight Unsecured Creditors
--------------------------------------------------------
Debtor: Colegio Otoqui Inc.
URB. Los Dominicos E-7
Calle Santo Domingo De Guzman
Bayamon, PR 00957
Business Description: The Debtor owns and operates a bilingual
private school in Bayamon, PR.
Chapter 11 Petition Date: June 6, 2024
Court: United States Bankruptcy Court
District of Puerto Rico
Case No.: 24-02394
Debtor's Counsel: Jose F Cardona Jimenez, Esq.
CARDONA JIMENEZ LAW OFFICES, PSC
PO Box 9023593
San Juan, PR 00902-3593
Tel: (787) 724-1303
Fax: (787) 724-1369
Email: jf@cardonalaw.com
Total Assets: $224,554
Total Liabilities: $1,303,602
The petition was signed by Edward Rivera Ocasio as administrator.
A full-text copy of the petition containing, among other items, a
list of the Debtor's eight unsecured creditors is available for
free at PacerMonitor.com at:
https://www.pacermonitor.com/view/2GQ2VZQ/COLEGIO_OTOQUI_INC__prbke-24-02394__0001.0.pdf?mcid=tGE4TAMA
CONVERGEONE HOLDINGS: Creditors Slam Chapter 11 Plan
----------------------------------------------------
Alex Wittenberg of Law360 reports that a group of ConvergeOne
lenders that claim the information technology company's
reorganization plan unfairly advantages rival creditors has
appealed a Texas bankruptcy judge's recent ruling approving the
Chapter 11 deal, asking a district court to stay the decision while
it challenges what it called an "exclusive" rights offering
underlying the plan.
About ConvergeOne Holdings
ConvergeOne Holdings, Inc., operates as a holding company. The
Company, through its subsidiaries, provides managed cloud, cyber
security, enterprises networking, data center, application and
software development, security infrastructure, and hosted
collaboration solutions.
ConvergeOne Holdings and its subsidiaries sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Tex. Lead Case
No. 24-90194) on April 4, 2024, with $1 billion to $10 billion in
assets and liabilities.
Judge Christopher M. Lopez presides over the cases.
White & Case LLP is the Debtors' legal counsel. Evercore Group LLC
is the Debtors' investment banker, and AlixPartners, LLP, is the
restructuring advisor. EPIQ Bankruptcy Solutions is the claims
agent.
Porter Hedges LLP and Gibson, Dunn & Crutcher LLP advise the first
lien lenders.
COPA LLC: Court OKs Cash Collateral Access Thru June 20
-------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of North
Carolina, Durham Division, authorized Copa, LLC to use cash
collateral, on an interim basis, in accordance with the budget,
with a 10% variance.
On December 21, 2017, the Debtor and Celtic Bank Corporation were
parties to a U.S. Small Business Administration Note in the amount
of $1.5 million. The Debtor believes the parties entered a Security
Agreement of even date. To perfect its lien, Celtic Bank filed a
UCC-1 against the Debtor on January 2, 2018 bearing file number
20180000411J. As of the Petition Date, Celtic Bank is believed to
be owed $1.5 million.
On June 4, 2020, the Debtor and the SBA were parties to a EIDL loan
in the amount of $200,000. To perfect its lien securing the EIDL
loan, the SBA filed a UCC-1 financing statement against the Debtor
on June 12, 2020, bearing File No. 20200077477H. As of the Petition
Date, the SBA is believed to be owed $200,000.
On January 9, 2024, the Debtor and WebBank were parties to a
Business Loan and Security Agreement in the amount of $37,500. To
perfect its lien, WebBank filed a UCC-1 financing statement against
the Debtor on February 29, 2024, bearing File No. 20240024382J. As
of the Petition Date, WebBank is believed to be owed $26,252.
It appears that the Debtor may have granted to Celtic Bank, the
SBA, and WebBank a security interest in, among other things, the
Debtor's inventory and general intangibles.
The court ruled that the Secured Parties' liens on the Collateral
securing their respective indebtedness will extend to the Debtor's
post-petition assets; provided, however, that nothing in the Order
will be deemed to grant the Secured Parties a post-petition lien on
assets, if any, in which they did not possess a valid, perfected,
enforceable, and otherwise non-avoidable pre-petition lien(s). The
postpetition liens and security interests provided for will survive
the term of the Order to the extent the pre-petition liens were
valid, perfected, enforceable, and non-avoidable as of the petition
date. The post-petition liens and security interests provided are
limited to the amount of the use or diminution of the pre-petition
collateral.
The Order will remain in full force and effect until the earlier of
the (a) June 20, 2024; (b) entry of an Order by the Court
terminating the Order for cause, including but not limited to
breach of his terms and conditions; or (c) upon filing of a notice
of default as provided in the Order.
A further hearing on the matter is set for June 20 at 2 p.m.
A copy of the order is available at https://urlcurt.com/u?l=S7p4sk
from PacerMonitor.com.
About Copa, LLC
Copa, LLC is a Latin bistro and bar in Downtown Durham offering
private events, craft cocktails, tapas, and food from Spain and the
Americas.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. M.D. N.C. Case No. 24-80126) on May 28,
2024. In the petition signed by Roberto Copa Matos, managing
member, the Debtor disclosed $3,089,083 in assets and $2,011,744 in
liabilities.
Judge Lena Mansori James oversees the case.
Rebecca F. Redwine, Esq., at HENDREN, REDWINE & MALONE, PLLC,
represents the Debtor as legal counsel.
CRAFTWORK CARPENTRY: Wins Interim Cash Collateral Access
--------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida,
Orlando Division, authorized Craftwork Carpentry and Millwork Inc.
to use cash collateral, on an interim basis, in accordance with the
budget, with a 10% variance, through June 18, 2024.
The Debtor is permitted to use the cash collateral with continuing
monthly adequate protection payments to the Newtek in the amount of
$1,238 per month on an interim basis.
Adequate protection payments to Newtek will commence on the first
day of the calendar month immediately following entry of an order
granting the Motion and continue until confirmation of the Debtor's
Chapter 11 plan of reorganization, at which time any payment to
Newtek will be pursuant to the plan.
Pawn Funding, Cedar, and Craftwork Inc. will receive no adequate
protections payment as a result of their claims being entirely
unsecured.
There will be a carve-out in the budget for the inclusion of fees
due the Clerk of Court and the U.S. Trustee pursuant to 28 U.S.C.
Section 1930, and to the extent not already included in the budget
for the adequate protection payments described in the Motion.
A final hearing on the matter is set for June 18 at 11 a.m.
A copy of the order is available at https://urlcurt.com/u?l=zpDnjZ
from PacerMonitor.com.
About Craftwork Carpentry and Millwork
Craftwork Carpentry and Millwork Inc. is a professional Millwork
company that has been in business since 1986. The Company
specializes in a variety of carpentry services and has the ability
to manage projects from start to finish.
Craftwork Carpentry and Millwork sought protection under Chapter 11
of the U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No. 24-00755) on
Feb. 16, 2024. In the petition signed by Jeffrey Struck,
chairman/president, the Debtor disclosed up to $100,000 in
estimated assets and up to $10 million in estimated liabilities.
Judge Tiffany P. Geyer oversees the case.
Chad Van Horn, Esq., at Van Horn Law Group PA serves as the
Debtor's counsel.
CXOSYNC LLC: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: CXOsync, LLC
1900 E. Golf Rd.
Suite 950
Schaumburg, IL 60173
Business Description: CXOsync is a corporate event planner which
presents events and workshops geared toward
CIOs, CISOs, CMOs, and CFOs of businesses.
CXOsync hosts live and virtual events to
gather CXOs from the world's largest
corporations and brands.
Chapter 11 Petition Date: June 5, 2024
Court: United States Bankruptcy Court
Northern District of Illinois
Case No.: 24-08351
Judge: Hon. Janet S Baer
Debtor's Counsel: Ben Schneider, Esq.
THE LAW OFFICES OF SCNEIDER AND STONE
8424 Skokie Blvd Suite 200
Skokie, IL 60077
Tel: (847) 933-0300
Email: ben@windycitylawgroup.com
Total Assets: $128,315
Total Liabilities: $6,030,532
The petition was signed by Rupen Patel 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/2JM7OAA/CXOsync_LLC__ilnbke-24-08351__0001.0.pdf?mcid=tGE4TAMA
DIVERSIFIED HEALTHCARE: All 3 Proposals Passed at Annual Meeting
----------------------------------------------------------------
At Diversified Healthcare Trust's annual meeting of shareholders
held on May 31, 2024, the Company's shareholders elected seven
Trustees to the Board each for a one year term of office continuing
until the Company's 2025 annual meeting of shareholders and until
her, his or their respective successor is duly elected and
qualifies, namely:
* Christopher J. Bilotto
* John L. Harrington
* Lisa Harris Jones
* Phyllis M. Hollis
* Dawn K. Neher
* Adam D. Portnoy
* Jeffrey P. Somers
The Company's shareholders also approved, on a non-binding advisory
resolution, the compensation paid to the Company's named executive
officers as disclosed pursuant to Item 402 of Regulation S-K in the
Company's proxy statement relating to the 2024 Annual Meeting and
ratified the appointment of Deloitte & Touche LLP as the Company's
independent auditors to serve for the 2024 fiscal year.
About Diversified Healthcare Trust
Diversified Healthcare Trust (Nasdaq: DHC) --
https://www.dhcreit.com/ -- is a REIT organized under Maryland law
that primarily owns medical office and life science properties,
senior living communities and other healthcare related properties
throughout the United States. As of Dec. 31, 2023, the Company
owned 371 properties located in 36 states and Washington, D.C.,
including one property classified as held for sale and three closed
senior living communities. At Dec. 31, 2023, the gross book value
of its real estate assets at cost plus certain acquisition costs,
before depreciation and purchase price allocations and less
impairment write downs, was $7.2 billion.
Diversified Healthcare reported a net loss of $293.57 million in
2023 compared to a net loss of $15.77 million in 2022.
* * *
As reported by the TCR on Jan. 24, 2024, Moody's Investors Service
upgraded Diversified Healthcare Trust's (DHC') Corporate Family
Rating to Caa3 from Ca. Moody's said the upgrade of the CFR to
Caa3 reflects some partial easing of Moody's concerns over DHC's
immediate capital needs as the new notes' proceeds have been used
to repay the company's 2024 maturities, namely $450 million under
its senior credit facility due 15 January 2024 and $250 million of
unsecured notes due May 1, 2024.
As reported by the TCR on Jan. 5, 2024, S&P Global Ratings raised
its issuer credit rating on Diversified Healthcare Trust (DHC) to
'CCC+' from 'CCC-'. S&P said, "The negative outlook reflects DHC's
ongoing liquidity pressure and the refinancing risk remaining with
material debt maturities in 2025 and 2026. The outlook also
reflects our expectation for a gradual recovery in the operating
performance of the company's senior housing operating property
(SHOP) portfolio, though the pace of this recovery remains
uncertain."
DS ADMIRAL: Moody's Assigns First Time 'B3' Corp. Family Rating
---------------------------------------------------------------
Moody's Ratings assigned first time ratings to DS Admiral Bidco,
LLC ("the company", dba "Taxwell"), including a B3 corporate family
rating and a B3-PD probability of default rating. Moody's also
assigned B3 instrument ratings to the proposed backed senior
secured first lien bank credit facilities issued by DS Admiral
Bidco, LLC and co-borrower Franklin Cedar Bidco, LLC, which include
a new $220 million senior secured revolving credit facility due
2029 and a new, approximately, $1.1 billion senior secured term
loan due 2031. The outlook is stable.
Proceeds from the proposed first-lien term loan will be used to pay
off roughly $951 million of existing debt, to finance a dividend
distribution and to pay transaction fees. Moody's considers the
company's financial policies, a key ESG governance consideration,
as aggressive given the sizeable pro forma debt load.
RATINGS RATIONALE
Taxwell's ratings are constrained by a hefty debt burden, around
$1.1 billion, that results in very high financial leverage and
limits free cash flow generation. Taxwell will rely on high
single-digit revenue growth and substantial profitability
improvements to reduce debt/EBITDA below 6.5x (Moody's adjusted)
and sustain positive free cash flow generation. Financial sponsor
Cinven recently created Taxwell as a combination of professional
tax software provider Drake Software, which it acquired in 2021,
and the TaxAct consumer tax software business of Blucora Inc.,
which it acquired in December 2022. Integration risks and a limited
track-record operating as the current going concern increase
uncertainty about Taxwell's ability to achieve its ambitious growth
and margin targets, such that operating cash flow can offset the
hefty interest expense burden. Small scale, with roughly $395
million of revenue in 2023, and a competitive industry exposed to
technological and regulatory risks also constrain the ratings.
Taxwell's do-it-yourself ("DIY") and professional segments compete
against industry giant Intuit Inc. (A3 stable), as well as H&R
Block, Inc. and other large players. The US Internal Revenue
Service's (IRS) free tax filing system is still in pilot stages and
only covers a limited amount of tax situations, but the agency's
plans to expand the service could pressure demand for Taxwell and
its peers.
The ratings benefit from a stable revenue base supported by sticky
software solutions with strong customer retention rates, around 94%
and 85% for the professional and consumer DIY segments in 2023,
respectively. The overall US tax services industry grows at a slow
low single-digit pace over time, linked to household formations,
but Taxwell believes it can generate high single-digit (or above)
revenue growth by implementing annual price increases, shifting its
customer base towards higher-income clients and introducing new
products, such as assisted DIY solutions. The secular shift over
time by consumers from assisted tax filing services towards
do-it-yourself (DIY) or hybrid alternatives will also benefit
long-term growth. Strong profitability rates and high operating
leverage also support the ratings. Moody's expects wider EBITDA
margins as Taxwell increases its scale and integration costs
abate.
The stable outlook reflects Moody's expectation for mid to high
single-digit reported revenue growth over the next 12-18 months and
improving profitability, with Moody's-adjusted EBITDA margin
exceeding 40% as the company gains scale and restructuring and
other one-time costs abate. Moody's also expects free cash
flow-to-debt will remain above 1.5% and debt/EBITDA will decline
towards 6.5x.
Moody's views Taxwell's liquidity as adequate, with a pro forma
cash balance of roughly $85 million as of March 31, 2024 and the
expectation for weak, but positive, free cash flow generation in
2024. Moody's expects free cash flow will be over 1.5% of total
debt in 2024. A new $220 million revolving credit facility (undrawn
at closing) also supports the company's liquidity profile and
mitigates the extremely seasonal nature of the company's revenue
and cash flow. In line with the tax filing calendar, the company's
cash from operations is strongly positive in the first half of the
calendar year, while the second half of the calendar year results
in cash flow deficits. The proposed revolver and term loan are
expected to be covenant-lite and Moody's anticipates the company
will maintain unimpeded access to the revolving credit facility.
The revolver includes a first-lien-leverage test, with no step
downs, set at a 40% cushion to Consolidated EBITDA set forth in the
Sponsor Model, applicable when 40% or more of the revolver capacity
is drawn. There are no covenants associated with the term loan.
The B3 instrument ratings on the proposed $220 million senior
secured first lien revolving credit facility due 2029 and the $1.1
billion (approximately) senior secured first lien term loan due
2031 are the same as the B3 CFR, reflecting the preponderance of
debt represented by the term loan and revolver. The term loan and
revolver are guaranteed by the borrower's wholly owned domestic
material restricted subsidiaries, as defined in the credit
agreement. The term loan and revolver also have a first priority
security interest in substantially all assets of the borrower and
guarantors, subject to certain exceptions per the credit
agreement.
Marketing terms for the new credit facilities (final terms may
differ materially) include the following:
Incremental pari passu debt capacity up to the greater of $220
million and 100% of Consolidated EBITDA, plus unlimited amounts
subject to a First Lien Leverage Ratio test of 4.75x. There is an
Inside Maturity Debt basket (to be defined in the final
documentation). The credit agreement is expected to include
"Chewy," "J. Crew", and "Serta" protections.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if the company sustains stable
revenue growth rates over time and expands its reported
profitability rates and cash flow generation capacity, reflecting a
strong competitive position. A ratings upgrade would also require
Moody's expectation that the company will employ more conservative
financial policies over time, such that debt/EBITDA will remain
below 5.5x and free cash flow-to-debt will be maintained above 5%.
The ratings could be downgraded if Taxwell does not achieve mid to
high single-digit reported revenue growth rates and does not
improve its margin profile. The ratings could also be downgraded if
liquidity deteriorates or Moody's anticipates the company will
generate negative free cash flow or debt/EBITDA will remain above
7.5x.
DS Admiral Bidco, LLC (dba Taxwell) is a North Carolina-based
provider of tax preparation software to professional tax preparers
and digital Do-It-Yourself (DIY) consumer and small business
customers. The company was formed in December 2022 as a result of
the Drake Software and TaxAct Inc. combination. The company is
owned and controlled by private equity sponsor Cinven. The company
reported $395 million of revenue in 2023.
The principal methodology used in these ratings was Software
published in June 2022.
DTH 215 VENTURE: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: DTH 215 Venture, LLC
718 W. Business Highway 60
Dexter, MO 63841
Business Description: DTH 215 Venture is the owner of certain real
property located at 215 S. Water Street,
Henderson, Nevada 89015-7226.
Chapter 11 Petition Date: June 5, 2024
Court: United States Bankruptcy Court
District of Nevada
Case No.: 24-12829
Judge: Hon. Natalie M Cox
Debtor's Counsel: Norma Guariglia, Esq.
HARRIS LAW PRACTICE LLC
850 E. Patriot Blvd.
Suite F
Reno, NV 89511
Tel: 775-786-7600
Fax: 775-786-7764
Email: norma@harrislawreno.com
Estimated Assets: $50 million to $100 million
Estimated Liabilities: $50 million to $100 million
The petition was signed by Natalie Riley as authorized agent.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/ISFONHI/DTH_215_VENTURE_LLC__nvbke-24-12829__0001.0.pdf?mcid=tGE4TAMA
List of Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
1. Academy Stone and Tile, Inc. Subcontractor $119,400
5925 W. Wigwam Avenue #2
Las Vegas, NV 59139
Brian Wojcik
Phone: 702-362-8453
Email: brian@astinclv.com
2. AKM Grading Subcontractor $157,326
7516 Maiden Run Avenue
Las Vegas, NV 89130
Anthony McGovern
Email: akmgrading@gmail.com
Phone: 702-858-2111
3. Brightview Landscape Subcontractor $152,179
Development, Inc.
1220 S. Commerce Street
Suite 120
Las Vegas, NV 89102
Vincent Whipkey
Email: vincent.whipkey@brightview.com
Phone: 702-597-2556
4. Concrete Accessories, Inc. Subcontractor $125,801
P.O. Box 27710
Las Vegas, NV 89126
5. Cragin & Pike Builder's Risk $133,682
10000 W. Charleston Blvd. Insurance
Suite 200
Las Vegas, NV 89135
Daniell Black
Phone: 702-877-1111
6. Finnco Services Inc. Subcontractor $61,761
c/o Northwest Registered Agent, LLC
401 Ryland Street
Ste. 200 A
Reno, NV 89502
Cynthia Finnerty
Email: admin@finncoservices.com
Phone: 909-355-0707
7. Focus Plumbing LLC Subcontractor $213,527
c/o CT Corporation System
701 S. Carson Street
Suite 200
Carson City, NV 89701
Sean Butler
Email: sbutler@lv61.com
Phone: 702-710-4420
8. Jones Lovelock Legal Fees $63,576
6600 Amelia Earhart Court
Suite A
Las Vegas, NV 89119
Donna DiMaggio
Phone: 702-805-8450
9. McIntosh Communications Inc. Subcontractor $92,640
c/o Kaempfer Cwowell, Ltd.
Reg. Agent
50 W. Liberty Street
Suite 1100
Reno, NV 89501
Patricia McIntosh
Email: pattym@mcintoshcomm.com
Phone: 702-253-5390
10. Nvision Glass, Inc. Subcontractor $164,667
c/o Maupin, Cox & Legoy, PC
Reg. Agent
4785 Caughlin Pkwy
Reno, NV 89519
Michelle Anderson
Email: michellea@nvisionglass.com
Phone: 775-336-2881
11. One Stop 4 Subcontractor $337,648
Flooring, LLC
2671 State Route
39 NW
Dover, OH 44622
Cindy Shinn
Email: dincy@onestop4flooring.com
Phone: 725-200-3000
12. PGS Westside II, Inc. - Subcontractor $128,010
Las Vegas
6460 Santa Margarita Street
Las Vegas, NV
89118-1802
David Johnson, Esq.,
Lanak & Hanna, PC
Phone: 714-620-2350
13. R.L. Cushing Millwork Subcontractor $113,949
555 Skeena Street
East Moosejaw,
Saskatchewan
Canada S6H 0A6
Mitchell Eritz
Email: mitchell@cushionmillwork.ca
Phone: 306-692-2396
14. Residential Fire Protection Subcontractor $65,395
DBA on Guard Fire Protection
6438 Arville Street
Las Vegas, NV 89118
15. Strada LV, LLC Professional $308,585
6970 S. Cimarron Road #220 Services
Las Vegas, NV 89113
16. Three Lock Box Overage Fees $78,279
2260 Corporate Circle Ste. 490
Henderson, NV
89074
17. Wayfair Additional $148,988
4 Copley Place Storage
Floor 7
Boston, MA 02116
Conor McBrierty
Email: cmcbrierty@wayfair.com
Phone: 857-306-3995
18. West Coast Wellness Equipment GYM Equipment $79,495
6969 Speedway Blvd.
Suite 108
Las Vegas, NV 89115
Rick Hoskins
Email: rick@wcwes.com
19. WestCorp Management Preleasing and $47,990
Group One, Inc. Marketing
6655 S. Eastern Avenue
Suite 200
Las Vegas, NV 89119
Robert Weidauer
Phone: 702-307-2881
20. Worth Group Architects Architect of $114,059
7535 E. Hampden Avenue Record
Suite 302
Denver, CO 80231
Travis Bryan
Tel: 702-869-9354
DUSOBOX CORPORATION: Seeks to Extend Plan Exclusivity to June 11
----------------------------------------------------------------
Dusobox Corporation asked the U.S. Bankruptcy Court for the Middle
District of Florida to extend its exclusivity period to file a plan
of reorganization to June 11, 2024.
The Debtor claims that this is its first request for an extension
of the Exclusive Filing Period. The Debtor has made good faith
progress toward reorganization by retaining the Financial Advisor
to assist in developing a viable chapter 11 plan, and the Debtor is
in the final stages of preparing a confirmable chapter 11 plan and
disclosure statement.
The Debtor anticipates that it will file a plan within 2 weeks of
the current expiration of the Exclusive Filing Period. The Debtor
is not seeking an extension to pressurize creditors, but rather to
work diligently with its professionals to propose a plan that will
be in the best interests of the estate and creditors.
Furthermore, the size and complexity of the Debtor's business
operations warrant the requested extension. As a large
manufacturing company, the Debtor has numerous secured interests in
various pieces of equipment that require particularized analysis
and treatment. The Debtor's professionals must carefully review
loan documents for encumbered equipment, analyze the relative
priority of the secured creditors' interests, and potentially
negotiate with these creditors to develop a viable plan of
reorganization.
The Debtor asserts that it has already demonstrated its ability to
successfully navigate complex issues in this case through
productive negotiations with parties in interest and the Debtor
anticipates continuing this momentum as it formulates and presents
its plan of reorganization.
Accordingly, the Debtor believes a two-week extension is warranted
and appropriate under the circumstances. The extension will not
prejudice the legitimate interests of creditors and other parties
in interest, will afford the Debtor a meaningful opportunity to
pursue a confirmable plan, and is in the best interests of the
estate.
Dusobox Corporation is represented by:
Michael A Nardella, Esq.
Jonathan M. Sykes, Esq.
LAW FIRM OF NARDELLA & NARDELLA, PLLC
135 W. Central Blvd., Suite 300
Orlando, FL 32801
Tel: (407) 966-2680
Email: mnardella@nardellalaw.com
jsykes@nardellalaw.com
About Dusobox Corporation
Dusobox Corporation is a designer, engineer and manufacturer of
custom corrugated display solutions and product packaging. It is
based in Orlando, Fla.
Dusobox filed Chapter 11 petition (Bankr. M.D. Fla. Case No.
24-00391) on Jan. 29, 2024, with $1 million to $10 million in
assets and $10 million to $50 million in liabilities.
Judge Tiffany P. Geyer oversees the case.
Michael A. Nardella, Esq., at Nardella & Nardella, PLLC is the
Debtor's legal counsel.
EIGER BIOPHARMACEUTICAL: Lender Challenges Court's Venue Decision
-----------------------------------------------------------------
Randi Love of Bloomberg Law reports that an Eiger
Biopharmaceuticals Inc. lender is challenging a bankruptcy judge's
decision to keep the company's Chapter 11 in Dallas over a Justice
Department bid to transfer it to another state.
The company, which develops therapies for rare metabolic diseases,
defeated efforts by the DOJ's federal bankruptcy watchdog, the US
Trustee, in early May to transfer Eiger's Chapter 11 to Delaware,
where Eiger is incorporated, or California, where it has an
office.
About Eiger BioPharmaceuticals
Palo Alto, California-based Eiger BioPharmaceuticals, Inc., is a
commercial-stage biopharmaceutical company focused on the
development of innovative therapies for rare metabolic diseases.
The Company's shares traded on Nasdaq under the symbol "EIGR".
Eiger Biopharmaceuticals Inc. and its subsidiaries sought relief
under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Tex. Lead
Case No. 24-80040) on April 1,2024. In its petition, Eiger listed
$38.8 million in assets and $53.1 million in liabilities as of the
bankruptcy filing.
Eiger is represented by Sidley Austin LLP as its legal counsel,
Alvarez & Marsal as its financial advisor and SSG Capital Advisors,
LLC as its restructuring investment banker. Kurtzman Carson
Consultants LLC is the claims agent.
EL DORADO GAS: Trustee to Sell Property by Auction, Direct Sale
---------------------------------------------------------------
Dawn Ragan, the Chapter 11 trustee for El Dorado Gas & Oil, Inc.,
asked the U.S. Bankruptcy Court for the Southern District of
Mississippi to approve the sale of personal property owned by the
company and its affiliates.
The trustee intends to sell by auction or direct sale the
companies' equipment, machinery and other personal property used to
operate their businesses in over 37 different locations.
To facilitate the sale of the property by auction, Tiger Capital
Group, LLC will, among other things, provide 21 days' notice of
each auction and advertise the auction online and in print.
The notice contains the date, time and location of the auction, the
sale terms, and description of the property to be sold.
During the auction, the property may be offered for sale in lots.
The trustee, in consultation with lenders, will determine the
highest or best bids for the property. After auction, the trustee
may seek the entry of orders confirming the results of the
auctions.
After each auction, title to the property will be transferred to
the winning bidder.
Within 21 days following each auction, the trustee will file
reports of sale with the court and transmit a copy of the report to
the U.S. trustee, identifying the winning bidder, the property
sold, and the purchase price.
Meanwhile, the trustee may agree to a direct sale of equipment
after consultation with Tiger Capital and lenders.
Upon determination to sell one or more property by direct sale, the
trustee will provide seven days' notice with respect to a sale for
an amount of at least $250,000, but not more than $1 million; and a
10 days' notice with respect to a sale in an amount of more than $1
million. No notice is required with respect to a sale for an amount
of less than $250,000.
Any objection must be filed no later than seven days after the
filing of direct sale notice for sales between $250,000 and $1
million, and 10 days after the filing of notice for sales over $1
million.
First Service Bank and GrayStreet Credit, LLC, the companies'
lenders, have secured interests in substantially all of the
companies' personal property. Both have consented to the sale.
About El Dorado Gas & Oil and
Hugoton Operating Company
Hugoton Operating Company, Inc. filed a voluntary Chapter 11
petition (Bankr. S.D. Miss. Case No. 23-51139) on Aug. 14, 2023. El
Dorado Gas & Oil, Inc., a company in Gulfport, Miss., filed Chapter
11 petition (Bankr. S.D. Miss. Case No. 23-51715) on Dec. 22, 2023,
with $500 million to $1 billion in assets and $50 million to $100
million in liabilities. Thomas L. Swarek, president, signed the
petition.
On Feb. 22, 2024, Bluestone Natural Resources II - South Texas, LLC
and World Aircraft, Inc. filed separate Chapter 11 petitions
(Bankr. S.D. Miss. Case Nos. 24-50223 and 24-50224).
On Jan. 12, 2024, the Court entered an order directing the
appointment of a Chapter 11 trustee for Hugoton. On Jan. 22, 2024,
the Court approved Dawn Ragan as the Chapter 11 trustee for
Hugoton.
On Jan. 31, 2024, the Court ordered the appointment of a Chapter 11
trustee for El Dorado. On Feb. 2, 2024, the Court approved Ms.
Ragan as Chapter 11 trustee for El Dorado.
No official committee of unsecured creditors has been established
in any of the Debtor cases.
Hugoton and El Dorado are both Arkansas corporations engaged in the
exploration, production, and development of crude oil and natural
gas properties. El Dorado is a lease holder and operator of oil and
gas wells covering about 4,000 net acres in South Texas. El Dorado
also owns a substantial amount of oil field equipment and owns real
estate in multiple locations and states. Hugoton also owns oil and
gas interests and operates wells in South Texas.
Hugoton is 100% owned by El Dorado and El Dorado is 100% owned by
Thomas Swarek. Bluestone is 100% owned by Hugoton. Bluestone owns
oil and gas interests operated by the EDGO Debtors. World Aircraft
is 100% owned by EDGO. World Aircraft owns various aircraft and
equipment assets.
Judge Katharine M Samson oversees the cases.
Patrick Sheehan, Esq., at Sheehan & Ramsey, PLLC, is Debtors
Bluestone Natural Resources II-South Texas, LLC and World Aircraft,
Inc.
R. Michael Bolen, Esq., at Hood & Bolen, PLLC; and Nancy Ribaudo,
Esq., Katherine Hopkins, Esq., and Joseph Austin, Esq., at Kelly
Hart & Hallman LLP, serve as counsel to Dawn Ragan, Chapter 11
Trustee for El Dorado Gas & Oil, Inc. and Hugoton Operating
Company, Inc.
EPIC! CREATIONS: Involuntary Chapter 11 Case Summary
----------------------------------------------------
Certain groups of petitioning creditors filed an involuntary
petition for relief against each of the following Alleged Debtor
under Chapter 11 of the Bankruptcy Code:
Alleged Debtor Case No.
-------------- --------
Epic! Creations, Inc. (Main Case) 24-11161
702 Marshall Street
Suite #280
Redwood City CA 94063
Neuron Fuel, Inc. 24-11162
650B Fremont Avenue
#330
Los Altos CA 94024
Tangible Play, Inc. 24-11163
d/b/a Osmo
228 Hamilton Avenue
Floor 3
Palo Alto, CA 94301
Business Description: Epic! Creations, Inc. retails books online.
The Company offers digital library which
includes kids books, ebooks, and videos.
Tangible Play, doing business as Osmo, is a
developer of digital gaming products.
The Company offers mobile enabled math,
puzzles, coding, business, spelling, and
drawing products.
Neuron Fuel, Inc., doing business as Tynker,
provides software solution. The Company
develops educational programming platform to
help children learn coding skills, including
game design, web design, animation, and
robotics.
Involuntary Chapter
11 Petition Date: June 5, 2024
Court: United States Bankruptcy Court
District of Delaware
Judge: Hon. John T. Dorsey
Petitioners' Counsel: G. David Dean, Esq.
COLE SCHOTZ P.C.
500 Delaware Avenue, Suite 1410
Wilmington, DE 19801
Tel: (302) 652-3131
Email: ddean@coleschotz.com
Full-text copies of the Involuntary Petitions are available for
free at PacerMonitor.com at:
https://www.pacermonitor.com/view/DJHL3ZI/Epic_Creations_Inc__debke-24-11161__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/X7BMPAY/Neuron_Fuel_Inc__debke-24-11162__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/IGR6R7Q/Tangible_Play_Inc__debke-24-11163__0001.0.pdf?mcid=tGE4TAMA
Alleged creditors who signed the petitions:
Petitioning Creditor Group
1. HPS Petitioning Creditors:
HPS Investment Partners, LLC on behalf of the HPS Petitioning
Creditors
40 West 57th Street, Floor 33
New York NY 10019
a. Cardinal Fund, L.P.
b. Florida Power & Light Company Qualified
Decommissioning Trusts for Turkey Point
and St. Lucie Nuclear Plants
c. HPS Loan Management 10-2016, Ltd.
d. HPS Loan Management 11-2017, Ltd.
e. HPS Loan Management 12-2018, Ltd.
f. HPS Loan Management 13-2018, Ltd.
g. HPS Loan Management 14-2019, Ltd.
h. HPS Loan Management 15-2019, Ltd.
i. HPS Loan Management 2013-2, Ltd.
j. HPS Loan Management 2021-16, Ltd.
k. HPS Loan Management 3-2014, Ltd.
l. HPS Loan Management 4-2014, Ltd.
m. HPS Loan Management 5-2015, Ltd.
n. HPS Loan Management 6-2015, Ltd.
o. HPS Loan Management 8-2016, Ltd.
p. HPS Loan Management 9-2016, Ltd.
q. HPS Mauna Kea Fund, L.P.
r. Institutional Credit Fund Subsidiary, L.P.
s. Strata CLO I, Ltd.
t. Strata CLO II, Ltd.
u. ZALICO VL Series Account-2
2. TBK Bank, SSB
12700 Park Central Drive, Ste 1700
Dallas TX 75251
3. Redwood Petitioning Creditors:
Redwood Capital Management, LLC on behalf of the Redwood
Petitioning Creditors
250 West 55th Street, 26th Floor
New York NY 10019
a. Blue Hiawatha DD3 LLC
b. Blue Hiawatha LLC
c. Redwood Drawdown Master Fund III, L.P.
d. Redwood Master Fund, Ltd.
e. Redwood Opportunity Master Fund, Ltd.
f. White Granite LLC
4. Veritas Petitioning Creditors:
a. Veritas Capital Credit Opportunities Fund
II SPV, L.L.C.
b. Veritas Capital Credit Opportunities Fund
SPV, L.L.C.
9 West 57th Street, 32nd Floor
New York NY 10019
5. HGV BL LSPV, LLC
330 Madison Avenue, 21st FL
New York NY 10017
6. [Reserved]
7. Midtown Acquisitions L.P.
520 Madison Avenue, 30th Floor
New York NY 10022
8. Silver Point Petitioning Creditors:
Silver Point Capital, L.P. on behalf of the Silver Point
Petitioning Creditors
2 Greenwich Plaza
Greenwich, CT 06830
a. SPCP Group, LLC
b. SPCP Institutional Group LLC
9. Shawnee 2022-1 LLC
850 Library Avenue, Suite 204
Newark DE 19711
10. Sentinel Dome Petitioning Creditors:
Sentinel Dome Partners, LLC on behalf of the
Sentinel Dome Petitioning Creditors
1350 Bayshore Hwy, Ste 905
Burlingame CA 94010
a. NPB Manager Fund, SPC on behalf of and
for the account of Segregated Portfolio 103
b. SDP Flagship Master Fund LP
11. Stonehill Petitioning Creditors:
Stonehill Capital Management LLC, on behalf of the Stonehill
Petitioning Creditors
320 Park Ave., 26th Floor
New York, NY 10022
a. Stonehill Master Fund Ltd.
b. Stonehill Institutional Partners, L.P.
12. Diameter Petitioning Creditors:
Diameter Capital Partners LP on behalf of the Diameter
Petitioning Creditors
55 Hudson Yards, Suite 29B
New York NY 10001
a. Diameter Dislocation Master Fund LP
b. Diameter Dislocation Master Fund II LP
c. Diameter Master Fund LP
13. Ellington Petitioning Creditors:
a. Ellington CLO III, Ltd.
b. Ellington Special Relative Value Fund L.L.C.
53 Forest Avenue
Old Greenwich CT 06880
14. GLAS Trust Company LLC
3 Second Street, Suite 206
Jersey City NJ 07311
15. Continental Casualty Company
151 North Franklin Street, 15th Floor
Chicago, IL 60606
16. India Credit Solutions, L.P.
190 Elgin Avenue
George Town Grand Cayman KY1-9008
Petitioning Creditors Seek to File
Confidential Information Under Seal
The Petitioning Creditors seek authority to seal the amount of each
Petitioning Lender Creditor's claim against each Debtor, which is
equal to each Petitioning Lender Creditor's Term Loan holdings, the
economic terms of any transfers or acquisitions of certain
Petitioning Lender Creditors' claims, and certain of the exhibits
filed in support of the 303(f) Motion. According to the
Petitioning Creditors, the Confidential Information is commercially
sensitive, non-public information.
"Disclosure of the Confidential Information may harm the
Petitioning Lender Creditors by allowing other parties to monitor
the Petitioning Lender Creditors' debt positions (including the
aggregate amount of all their affiliates' Term Loan holdings) and
potentially interfere with their overarching investment strategies.
Additionally, with respect to the exhibits, the loan agreements,
bank statements, and notices contain sensitive information about:
(i) the parties' lending arrangement, including the specific terms
thereof, such as various covenants that one or more of the parties
owe and the terms of certain forbearances; (ii) non-public
financial information; and (iii) remedies exercised under the
parties' loan documents. Accordingly, the Confidential Information
should be sealed," the Petitioning Creditors argued.
In addition, the Petitioning Creditors request that the unredacted
versions of the Petitions and 303(f) Motion not be made available
to anyone other than the Court, the Alleged Debtors, and the Office
of the United States Trustee for the District of Delaware, except
as otherwise ordered by the Court.
EUROASIA PRODUCTS: Wins Cash Collateral Access Thru June 27
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida,
Orlando Division, authorized Euroasia Product, Inc. to use cash
collateral, on an interim basis, in accordance with the budget,
through June 27, 2024.
Specifically, the Debtor is authorized to use cash collateral to
pay:
(a) amounts expressly authorized by the Court, including payments
to the United States Trustee for quarterly fees;
(b) the current and necessary expenses set forth in the budget; and
(c) additional amounts as may be expressly approved in writing by
Creditor within 48 hours of the Debtor's request. The Debtor will
be entitled to prompt court hearings on any disputed proposed
expenditures.
As adequate protection, the Secured Creditors will have a perfected
post-petition lien against cash collateral to the same extent and
with the same validity and priority as the pre-petition lien,
without the need to file or execute any documents as may otherwise
be required under applicable non-bankruptcy law.
The Debtor will maintain insurance coverage for its property in
accordance with the obligations under the loan and security
documents with Secured Creditors.
A hearing on the matter is set for June 27 at 10:30 a.m.
A copy of the court's order and the Debtor's budget is available at
https://urlcurt.com/u?l=A03SM9 from PacerMonitor.com.
The Debtor projects total operating expenses, on a monthly basis,
as follows:
$780 for June 2024;
$780 for July 2024;
$1,923 for August 2024; and
$780 for September 2024.
About Euroasia Products
Euroasia Products, Inc. sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No. 24-01964) on April
22, 2024, with $0 to $50,000 in assets and $500,001 to $1 million
in liabilities.
Judge Tiffany P. Geyer presides over the case.
Jeffrey Ainsworth at Bransonlaw PLLC represents the Debtor as legal
counsel.
EXPRESS INC: Creditors Oppose Lead Bidder's Fees
------------------------------------------------
Randi Love of Bloomberg Law reports that Express Inc. creditors
challenged a potential fee and other protections for the distressed
retailer's lead bidder, saying they could chill competing offers to
buy the company out of bankruptcy.
ReStore Capital LLC, representing second lien lenders, said it
supports Express' efforts to turn its business around but isn't on
board with proposed payments the lead bidder—a consortium led by
Express' two largest landlords—is seeking as a condition of its
offer, according to a Sunday filing in the US Bankruptcy Court for
the District of Delaware.
About Express Inc.
Express, Inc., operates specialty retail apparel stores. The
Company offers apparel and accessories such as jeans, sweaters,
dresses, suits, and coats. Express serves customers in the United
States.
The Debtors sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Del. Lead Case No. 24-10831) on April
22, 2024. In the petition signed by Stewart Glendinning, chief
executive officer, the Debtor disclosed $1,298,055,000 in assets
and $1,199,781,226 in liabilities.
The Debtors tapped Kirkland & Ellis, LLP and Kirkland & Ellis
International, LLP as bankruptcy counsel; Klehr Harrison Harvey
Branzburg, LLP as local bankruptcy counsel; Moelis & Company, LLC
as investment banker; M3 Advisory Partners, LP as restructuring
advisor; and Stretto, Inc. as claims agent.
Stephen L. Iacovo, Esq., at Ropes & Gray, LLP serves as counsel to
ReStore Capital, LLC, agent to the FILO Lenders. ReStore is also
the agent under a second lien senior secured DIP single-draw term
facility. AlixPartners, LLP serves as advisor to the DIP agents.
Randall L. Klein, Eseq., Eva D. Gadzheva, Esq., and Dimitri G.
Karcazes, Esq., at Goldberg Kohn Ltd., serve as counsel to Wells
Fargo Bank, National Association, as first lien ABL agent. Wells
Fargo is also the agent under a first lien senior secured DIP
revolving credit facility.
EXTERIOR CONSTRUCTION: Unsecureds to Get Nothing in Plan
--------------------------------------------------------
Exterior Construction Services, Inc. filed with the U.S. Bankruptcy
Court for the District of Nebraska an Amended Plan of
Reorganization for Small Business Under Subchapter V dated May 16,
2024.
Exterior Construction operates a business primarily providing EIFS
and stucco installation services to commercial customers. Debtor
purchased the business in 2017 and experienced financial
difficulties as a result of the COVID-19 pandemic.
Brandt and Ronda Karstens (referred to collectively as "Debtor")
also own and operate Exterior Roofing and Siding LLC, a company
that primarily provides residential roofing and siding repair and
replacement services.
Wells Fargo has a lien on the Karstens' primary residence located
at 44 Ginger Woods Road, Valley, NE 68064 and a blanket lien on all
of Exterior Construction Services, Inc.'s personal property. The
Debtors have been unable to pay Wells Fargo based upon the terms of
the promissory note and filed for bankruptcy protection to
reorganize its debts from future net income of the business.
The Debtor's financial projections show that the Debtor will have
projected disposable income of approximately $405,742.52. The final
Plan payment is expected to be paid on or around July 15, 2029.
Non-priority unsecured creditors holding allowed claims will
receive no distributions, which the proponent of this Plan has
valued at approximately 0 cents on the dollar. This Plan also
provides for the payment of administrative and priority claims.
Class 3.1 consists of Allowed Unsecured Claims. Non-priority
unsecured creditors include: Small Business Administration (EIDL
Loan) ($492,820.02); Project Eco Holdings, Inc. f/k/a Exterior
Construction Inc. ($192,410.83); Wells Fargo (unsecured portion)
($761,582.29); and Brandt Karstens ($170,000.00). The allowed
unsecured claims of the Debtor shall receive no distributions. This
Class is impaired.
Class 4 consists of equity security holders of the Debtor. The
Debtor shall retain any and all equity upon plan confirmation.
Payments and distributions under the Plan will be funded by future
income of the business.
A full-text copy of the Amended Plan of Reorganization dated May
16, 2024 is available at https://urlcurt.com/u?l=FBrwDJ from
PacerMonitor.com at no charge.
Attorneys for the Debtor:
Patrick M. Patino, Esq.
Patino King, LLC
13815 FNB Parkway, Suite 440
Omaha, NE 68154-2584
Telephone: (402) 401-4050
Email: patrick@patinoking.com
About Exterior Construction
Exterior Construction Services, Inc. is a gutter, roofing, and
siding Company in Omaha, Neb.
The Debtor filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. D. Neb. Case No. 24-80090) on February 14,
2024, with $249,892 in assets and $1,800,145 in liabilities. Brandt
R. Karstens, president, signed the petition.
Judge Brian S. Kruse oversees the case.
Patrick Patino, Esq., at Patino King and Yost, L.L.C. represents
the Debtor as legal counsel.
FOCUS UNIVERSAL: Reports $1.3MM Net Loss in Q1 2024
---------------------------------------------------
Focus Universal Inc. filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q reporting a net loss
of $1,315,597 on $219,158 of revenue for the three months ended
March 31, 2024, compared to a net loss of $1,114,243 on $236,095 of
revenue for the three months ended March 31, 2023.
In addition, the Company had an accumulated deficit of $23,897,767
and $22,582,170 as of March 31, 2024 and December 31, 2023,
respectively, and negative cash flow from operating activities of
$892,089 and $838,535 for the three months ended March 31, 2024 and
2023, respectively.
The Company currently suffered recurring loss from operations,
generated negative cash flow from operating activities, has an
accumulated deficit and has not completed its efforts to establish
a stabilized source of revenues sufficient to cover operating costs
over an extended period of time.
At March 31, 2024, the Company had cash and cash equivalents, and
short-term investments, in the amount of $114,096. The ability to
continue as a going concern is dependent on the Company attaining
and maintaining profitable operations in the future and raising
additional capital to meet its obligations and repay its
liabilities arising from normal business operations when they come
due. Since inception, the Company has funded its operations
primarily through equity and debt financings, and it expects to
continue to rely on these sources of capital in the future. In
addition, subsequent to year-end, the Company has entered into a
letter of intent from a secondary buyer to potentially sell its
land and buildings which, upon completion, would provide additional
working capital to the Company. No assurance can be given that the
sale of the land and building will occur, or any future financing
will be available or, if available, that it will be on terms that
are satisfactory to the Company. Even if the Company is able to
obtain additional financing, it may contain undue restrictions on
its operations, in the case of debt financing, or cause substantial
dilution for its stockholders, in case of equity financing, or
grant unfavorable terms in future licensing agreements.
As of March 31, 2024, the Company has $4,965,198 in total assets,
$2,604,253 in total liabilities, and $2,360,945 in total
stockholders' equity.
A full-text copy of the Company's Form 10-Q is available at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1590418/000168316824003438/focus_i10q-033124.htm
About Focus Universal
Focus Universal Inc. (NASDAQ: FCUV) is a provider of patented
hardware and software design technologies for Internet of Things
(IoT) and 5G. The company has developed five disruptive patented
technology platforms with 28 patents and patents pending in various
phases and 8 trademarks pending in various phases to solve the
major problems facing hardware and software design and production
within the industry today. These technologies combined to have the
potential to reduce costs, product development timelines and energy
usage while increasing range, speed, efficiency, and security.
Focus currently trades on the Nasdaq Global Markets and is in the
Russell 2000 Index.
As of December 31, 2023, the Company had $5,334,124 in total
assets, $1,788,498 in total liabilities, and $3,545,626 in total
stockholders' equity.
Los Angeles, Calif.-based Weinberg & Company, P.A., the Company's
auditor since 2023, issued a "going concern" qualification in its
report dated April 1, 2024, citing that the Company has suffered
recurring losses from operations and has experienced negative cash
flows from operating activities that raise substantial doubt about
its ability to continue as a going concern.
FORTREA HOLDINGS: Moody's Cuts CFR to B1 & Alters Outlook to Neg.
-----------------------------------------------------------------
Moody's Ratings downgraded the ratings of Fortrea Holdings Inc
including the Corporate Family Rating to B1 from Ba3 and the
Probability of Default Rating to B1-PD from Ba3-PD. Concurrently,
Moody's downgraded the rating of the senior secured credit
facilities and notes to B1 from Ba3, as well as Speculative Grade
Liquidity rating (SGL) to SGL-3 from SGL-2. The outlook was changed
to negative from stable.
The ratings downgrade reflects meaningful deterioration in
Fortrea's credit metrics, including debt/EBITDA increasing to above
7.5 times as of March 31, 2024, on Moody's adjusted basis. The
decrease in Fortrea's profitability are the result of operational
headwinds related to softer demand and less favorable sales mix,
combined with elevated costs related to establishing stand-alone
operations following separation from Labcorp. The ratings downgrade
also reflects weakening in the company's liquidity, reflected by
negative free cash flow and Moody's expectation of Fortrea's
periodic reliance on its revolving credit facility for operational
needs.
The negative outlook reflects Moody's expectation for ongoing
headwinds related to earnings pressure. As a result, Moody's
expects that Fortrea may be challenged to reduce leverage and
improve profitability to levels appropriate for the B1 rating.
Governance risk factors are material to the rating action.
Governance risk considerations are driven by the company's
execution risk and management's track record reflected in
significantly higher financial leverage and weaker liquidity, than
initially anticipated. Mitigating factors include Moody's
expectation of management's commitment to the reduction of
outstanding debt. This is partially reflected in Fortrea's
prioritizing the use of net proceeds from an announced divestiture
for debt paydown.
RATINGS RATIONALE
Fortrea's B1 Corporate Family Rating reflects the company's high
financial leverage with Moody's adjusted debt/EBITDA of 7.7x, for
the twelve month period ended March 31, 2024 (prior to expected
debt paydown with proceeds from announced divestitures). The rating
also reflects ongoing headwinds in profitability underpinned by
margin compression due to softer demand and less favorable sales
mix. Fortrea's rating also encompasses the risks inherent in the
pharmaceutical services industry, including project delays and
cancellations. The company benefits from its considerable size,
geographic footprint, and established market position as a
pharmaceutical contract research organization (CRO). The ratings
also reflect Moody's expectation that Fortrea will meaningfully
reduce its currently elevated financial leverage through voluntary
debt repayment along with earnings growth.
Fortrea's SGL-3 Speculative Grade Liquidity rating reflects Moody's
view that liquidity will be adequate over the next 12-15 months.
Fortrea reported cash and cash equivalents of approximately $93
million as of March 31, 2024. Over the next 12 months, Moody's
anticipates that Fortrea will be modestly cash flow consumptive,
partially due to elevated capital expenditures as company continues
to establish stand-alone operations and executes on its cost saving
initiatives. Fortrea's liquidity is supported by a $450 million
revolving credit facility expiring in 2028. There was roughly $29
million drawn under the facility as of March 31, 2024. The revolver
contains a total leverage covenant, and an EBITDA-based interest
coverage covenant. Moody's expects Fortrea to maintain sufficient
cushion under the covenants, following its securing an amendment in
May 2024, which created additional covenant headroom through June
2025.
The B1 instrument ratings, which are in line with the Corporate
Family Rating, reflect the presence of only one class of debt
within the capital structure.
ESG CONSIDERATIONS
Fortrea's CIS-4 (previously CIS-3) ESG credit impact score
indicates that the rating is lower than it would have been if ESG
risk exposures did not exist. Social risk (S-3) considerations
relate to pharmaceutical drug pricing, which could have both
positive and negative effects for Fortrea. Legislation that reduces
drug prices such as the recently passed US Inflation Reduction Act
could have a negative impact on Fortrea if pharmaceutical customers
look to trim expenses or reduce the scope of existing projects.
Additionally, large mergers could result in customer consolidation
and pricing pressure. However, drug pricing pressure in the US may
spur the need for Fortrea's customers to invest more heavily in
R&D, which would be a benefit. Among governance risk (G-4,
previously G-3) considerations are management's track record
reflected in significantly weaker operating performance, higher
financial leverage, and weaker liquidity than management initially
projected and Moody's anticipated. Mitigating factors include
Fortrea's public net leverage target of 2.5-3.0x over the medium
term, and commitment to use excess cash flow to reduce outstanding
debt.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if the company is able to deliver
sustained profitable growth with an improvement in liquidity
underpinned by strong free cash flow. Furthermore, for the ratings
to be upgraded Fortrea would need to successfully manage its
strategic initiatives and external growth opportunities (i.e.,
acquisitions), under conservative financial policies.
Quantitatively, debt/EBITDA sustained below 4.5 times on Moody's
adjusted basis would support an upgrade.
The ratings could be downgraded if Fortrea is unable to improve
operating margins or faces additional disruptions as it implements
changes to its operating model. Additionally, lack of material
improvement in liquidity or if financial policies become more
aggressive, ratings could be downgraded. Quantitatively,
debt/EBITDA sustained above 5.5 times on Moody's adjusted basis
could result in a downgrade.
Fortrea Holdings Inc - headquartered in Durham, NC - is a leading
global contract research organization ("CRO") providing
comprehensive phase I through IV biopharmaceutical product and
medical device services, patient access solutions and other
enabling services to pharmaceutical, biotechnology and medical
device organizations. Fortrea Holdings Inc. was spun off from
Labcorp in June 2023. Revenue for the twelve months ended March 31,
2024, pro forma for divestitures of Endpoint Clinical and Patient
Access was approximately $2.8 billion.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
GATHERING PLACE: Unsecureds to be Paid in Full in Sale Plan
-----------------------------------------------------------
The Gathering Place Outreach, Inc., filed with the U.S. Bankruptcy
Court for the Western District of Tennessee a Plan of
Reorganization under Subchapter V dated May 16, 2024.
The Debtor is a not-for-profit corporation company organized under
the laws of the State of Tennessee with its principal place of
business at 26 Edwards Drive, Jackson, Madison County, Tennessee
38301.
The Debtor began as a community bible study in Madison County,
Tennessee in 2016. It was originally known as The Word Outreach
which was later incorporated in 2018. On August 6, 2020, Dr. Gerald
Thomas and others changed the name to The Gathering Place Outreach,
Inc. in Jackson, Tennessee. Pinnacle Bank loaned the Church
$800,000 to enable it to purchase the current Church Property.
The Debtor operated its church and outreach with approximately 115
members at its peak. There was a split, however, in the
congregation leaving approximately 40 remaining members.
Collections suffered as a result and the church could not pay its
obligations as they came due. Pinnacle Bank went unpaid for
approximately and the case was filed just before a scheduled
foreclosure was conducted.
There is only one creditor in this case, Pinnacle Bank. Pinnacle
Bank holds two secured claims [Claims 2 and 3] and one unsecured
claim [Claim 1].
The Debtor's assets include its cash on hand, furniture, fixtures
and equipment, goodwill, and its real estate. Liquidation of the
non-cash assets is speculation, at best. The Debtor estimates that
the liquidation would result in no more than $25,000 with the
exception of the “goodwill” of the Debtor, which is near
impossible to quantify.
Class 4 consists of Allowed Non-Priority Unsecured Claims. The
non-priority unsecured claim of Pinnacle Bank will be paid in full
at the closing of the sale of the Church Property.
The Debtor is non-for-profit corporation so it has no equity
holders. Any remaining funds from the sale of the Church Property
will be distributed to the Reorganized Debtor.
The payments required to be distributed under the Plan shall be
provided by the sale of the Debtor's Church Property.
A full-text copy of the Plan of Reorganization dated May 16, 2024
is available at https://urlcurt.com/u?l=6tGCqC from
PacerMonitor.com at no charge.
Counsel to the Debtor:
Steven N. Douglass, Esq.
Harris Shelton Hanover Walsh, PLLC
40 S. Main Street, Suite 2210
Memphis, TN 38103-2555
Phone: (901) 525-1455
Email: snd@harrisshelton.com
About The Gathering Place Outreach, Inc.
The Gathering Place Ourtreach, Inc. is a not-for-profit corporation
company with its principal place of business at 26 Edwards Drive,
Jackson, Madison County, Tennessee 38301.
The Debtor filed its voluntary petition for Chapter 11 protection
(Bankr. W.D. Tenn. Case No. 24-10198) on Feb. 16, 2024, listing $1
million to $10 million in assets and $500,000 to $1 million in
liabilities. Dr. Gerald F. Thomas, Sr. as authorized representative
of the Debtor, signed the petition.
Judge Jimmy L Croom oversees the case.
HARRIS SHELTON, PLLC serve as the Debtor's legal counsel.
GFH LTD: Files Emergency Bid to Use Cash Collateral
---------------------------------------------------
GFH Ltd. and affiliates ask the U.S. Bankruptcy Court for the
Southern District of Texas, Victoria Division, for authority to use
cash collateral and provide adequate protection.
The Debtors require the use of cash collateral to pay employees,
order inventory and supplies, and otherwise conduct their regular
business operations.
SL Funding 5 LLC, part of Williams Capital Partners, acquired four
loans from Veritex Community Bank for a deep discount. After
acquiring the loans, SL Funding demanded payment from the Debtors
and Guarantors, leading to a lawsuit in the 61st District Court. SL
Funding obtained a summary judgment against the Debtors and
Guarantors, and then appointed Seth Kretzer as the turnover
receiver. However, after 11 months, the Receiver failed to resolve
the debtors' financial problems or pay any significant amount of
the SL Funding Judgment. Prosperity Bank intervened in the
Receivership and sought leave to foreclosure on its collateral. The
Debtors and Guarantors filed six Chapter 11 proceedings to
reorganize their affairs under Subchapter V of Chapter 11.
Prosperity Bank is the holder of six promissory notes executed in
its favor.
As adequate protection and in the same priority and to the same
extent and validity as existed prepetition, Prosperity Bank will be
granted: (a) automatic perfected replacement liens on all Real
Property, accounts receivable, and cash that is now owned or
hereafter acquired by Debtors; and, (b) superpriority
administrative claims pursuant to Sections 361(2), 363(c)(2),
364(c)(1), 364(c)(2), 503(b)(1), 507(a)(2), and 507(b) of the
Bankruptcy Code, subordinate only to:
(i) quarterly fees due to the United States Trustee pursuant
to 28 U.S.C. section 1930(a)(6); and,
(ii) reasonable and necessary fees and expenses incurred by the
Subchapter V Trustee and professionals retained by the Debtors
and/or any Committee(s), but only insofar as such Estate
Professional Fees have been allowed pursuant to a final order
entered by the Bankruptcy Court, and provided further that the
Superpriority Claims will only be subordinated to the first
$250,000 of Allowed Estate Professional Fees. The Replacement Liens
granted will not attach to any Chapter 5 causes of action under the
Bankruptcy Code.
The Replacement Liens and the Superpriority Claims will be granted
solely to the extent that the Debtors' use of cash collateral
results in a diminution in value of the cash collateral balances as
of the Filing Date and will constitute legal, valid, binding, fully
perfected, and non-avoidable obligations of the Debtors,
enforceable against the Debtors' estates and their respective
successors and assigns.
As additional partial adequate protection for use of cash
collateral, the Debtors will make monthly payments to Prosperity
Bank in the aggregate amount of approximately $8,775, which will be
applied to post-petition, judgment interest on the Judgment
Indebtedness; which will be due and payable on the 15th day of
every month after the Filing Date.
The Debtors' right to use cash collateral will expire and the
Debtors will immediately cease using cash collateral upon the
earlier of: (a) the occurrence of an uncured or incurable
Termination Event that is not otherwise timely cured by the Debtors
or waived in writing by Prosperity Bank.
These events constitute a Termination Event:
a. any Debtor violates any term of the Interim Order entered
pursuant to the Motion;
b. the Debtors fail to file a Chapter 11 Plan, as required by 11
U.S.C. section 1189, by August 29, 2024;
c. the Court has not entered an order confirming a Chapter 11 Plan,
in the Bankruptcy Cases by October 28, 2024;
d. the CRO is removed or resigns; or
e. the entry of an order by the Bankruptcy Court:
1. converting any of the Debtors’ Bankruptcy Cases to a case
under chapter 7 of the Bankruptcy Code;
2. dismissing any of the Debtors' Bankruptcy Cases;
3. removing a Debtor as Debtor-in-Possession under 11 U.S.C.
section 1185, in any of the Debtors' Bankruptcy Cases.
A copy of the motion is available at https://urlcurt.com/u?l=S6VEZm
from PacerMonitor.com.
About GFH Ltd.
GFH Ltd. is a provider of death care services.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Tex. Case No. 24-60025) on May 31,
2024. In the petition signed by Charles Hauboldt III, Managing
Member of GFH 1 LLC, General Partner, the Debtor disclosed up to
$10 million in both assets and liabilities.
Judge Christopher M. Lopez oversees the case.
Leonard Simon, Esq., at PENDERGRAFT & SIMON LLP, represents the
Debtor as legal counsel.
GLENDA SWARTZ: James Coutinho Named Subchapter V Trustee
--------------------------------------------------------
The U.S. Trustee for Regions 3 and 9 appointed James Coutinho,
Esq., at Allen Stovall Neuman & Ashton, LLP as Subchapter V trustee
for Glenda Swartz Mulch, LLC.
Mr. Coutinho will be paid an hourly fee of $375 for his services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. Coutinho declared that he is a disinterested person according
to Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
James A. Coutinho, Esq.
Allen Stovall Neuman & Ashton, LLP
10 N. Broad Street, Ste. 2400
Columbus, OH 43215
Email: coutinho@asnalaw.com
Telephone: (614) 221-8500
About Glenda Swartz Mulch
Glenda Swartz Mulch, LLC is engaged in the business of mulch
manufacturing and sales.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Ohio Case No. 24-30946) on May 18,
2024. In the petition signed by Glenda M. Swartz, sole member, the
Debtor disclosed $1,855,478 in assets and $2,149,979 in
liabilities.
Judge Guy R. Humphrey oversees the case.
Dustin R. Hurley, Esq., at Hurley Law, LLC, represents the Debtor
as bankruptcy counsel.
GLUCKO TRACK: Reports Net Loss of $2.9MM in Q1 2024
---------------------------------------------------
GlucoTrack, Inc. filed with the Securities and Exchange Commission
its Quarterly Report on Form 10-Q reporting a net loss of $2.9
million for the three months ended March 31, 2024, compared to a
net loss of $1.3 million for the three months ended March 31,
2023.
As of March 31, 2024, the Company had an accumulated deficit of
approximately $112.8 million. It expects to continue to incur
significant and increasing losses and do not expect positive cash
flows from operations for the foreseeable future, and its net
losses may fluctuate significantly from period to period depending
on the timing of and expenditures on its research and development
activities.
As of March 31, 2024, the Company has $2.1 million in total assets,
$1.7 million in total liabilities, and $376,000 in total
stockholders' equity.
Based on the Company's operating plans, it does not expect that its
current cash and cash equivalents as of March 31, 2024, will be
sufficient to fund its operating, investing, and financing cash
flow needs for at least the next 12 months, assuming its programs
advance as currently contemplated.
GlucoTrack said, "We have and believe we will continue to be able
to raise additional capital through debt financing, private or
public equity financings, license agreements, collaborative
agreements or other arrangements with other companies, or other
sources of financing. However, there can be no assurances that such
financing will be available or will be at terms acceptable to us,
or at all."
A full-text copy of the Company's Form 10-Q is available at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1506983/000149315224019999/form10-q.htm
About GlucoTrack Inc.
Rutherford, N.J.-based GlucoTrack, Inc. is focused on the design,
development, and commercialization of novel technologies for people
with diabetes. The Company is currently developing a long-term
implantable continuous glucose monitoring system for people living
with diabetes.
As of December 31, 2023, the Company had $4.91 million in total
assets, $1.71 million in total liabilities, and $3.2 million in
total stockholders' equity.
Tel-Aviv, Israel-based Fahn Kanne & Co., the Company's auditor
since 2010, issued a "going concern" qualification in its report
dated March 28, 2024, citing that the Company has incurred net
losses and negative cash flows from its operations and
comprehensive loss since its inception and as of December 31, 2023,
there is an accumulated deficit of $109,853. These conditions,
along with other matters, raise substantial doubt about the
Company's ability to continue as a going concern.
GOL LINHAS: In Talks With Shareholder for Stock Deal
----------------------------------------------------
Bloomberg News reports that Azul SA's pursuit of a merger with Gol
Linhas Aereas Inteligentes SA has gained momentum, with talks
underway for a deal with the controlling shareholder of the rival
Brazilian airline, according to people familiar with the matter.
In one scenario under consideration, holding company Abra Group
Ltd. would contribute its Gol shares to Azul in exchange for a
stake in the combined airline, one of the people said, asking not
to be identified because discussions are still private. That type
of transaction could appeal to Azul because it wouldn't have to
commit much cash, if any, another person said.
Abra would retain full ownership of its stake in another Latin
American airline, Avianca Holdings SA, in that scenario. Any deal
would need to be approved by the companies' controllers, creditors
and shareholders, along with regulators.
Bloomberg reported in March that Azul had hired Citigroup Inc. and
Guggenheim Partners to explore a deal for Gol, which has been
restructuring after struggling to cope with debt payments and fuel
costs. The idea of the potential transaction with Abra Group has
gained traction in recent weeks as discussions between the
companies heated up, one of the people said.
Azul and Gol are part of a trio of carriers -- including
Santiago-based Latam Airlines Group SA -- that dominate air travel
in Brazil, Latin America's largest market. While both airlines
service some heavily trafficked routes, Gol is more concentrated on
flights between Sao Paulo, Rio de Janeiro and Brasilia, while
Azul's network to other cities is wider.
Regulators in Brazil and other countries would need to sign off on
a deal. While merging Azul and Gol would reduce the number of major
local carriers to two from three, Azul is optimistic that it could
win approval, the people said.
Sao Paulo-based Gol filed for Chapter 11 bankruptcy protection
after grappling with $2.7 billion in near-term liabilities and
carrying out a dozen debt exchanges. Under the process, it has
managed to increase its debtor-in-possession financing to $1
billion from $950 million.
Avianca, which filed for Chapter 11 in 2021, is in a better
position. The company's bonds have handed investors a return of
26% in the past year, compared with an average of 6.6% for Latin
American corporates during that period, according to a Bloomberg
gauge.
About Gol GOLL4.SA
GOL Linhas Aereas Inteligentes S.A. provides scheduled and
non-scheduled air transportation services for passengers and cargo;
and maintenance services for aircraft and components in Brazil and
internationally. The company offers Smiles, a frequent-flyer
program to approximately 20.5 million members, allowing clients to
accumulate and redeem miles. It operates a fleet of 146 Boeing 737
aircraft with 674 daily flights. The company was founded in 2000
and is headquartered in Sao Paulo, Brazil.
GOL Linhas Aereas Inteligentes S.A. and its affiliates and its
subsidiaries voluntarily filed for Chapter 11 protection (Bankr.
S.D.N.Y. Lead Case No. 24-10118) on Jan. 25, 2024.
GOL Linhas estimated $1 billion to $10 billion in assets as of the
bankruptcy filing.
The Debtors tapped Milbank Llp as counsel, Seabury Securities Llc
as restructuring advisor, financial advisor and investment banker,
Alixpartners, LLP, as financial advisor, and HUGHES Hubbard & Reed
LLP as aviation related counsel. Kroll Restructuring Administration
LLC is the claims agent.
GRAND FUSION: Behrooz Vida Named Subchapter V Trustee
-----------------------------------------------------
The U.S. Trustee for Region 6 appointed Behrooz Vida, Esq., at the
Vida Law Firm, PLLC as Subchapter V trustee for Grand Fusion
Housewares, LLC.
Mr. Vida will be paid an hourly fee of $450 for his services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. Vida declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Behrooz P. Vida, Esq.
The Vida Law Firm, PLLC
3000 Central Drive
Bedford, TX 76021
Telephone: (817) 358-9977
Facsimile: (817) 358-9988
Email: behrooz@vidalawfirm.com
About Grand Fusion Housewares
Grand Fusion Housewares, LLC is engaged in the retail sales of home
accessories.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Texas Case No. 24-41694) on May 16,
2024. In the petition signed by Brendan Bauer, authorized
representative, the Debtor disclosed $469,526 in assets and
$3,134,245 in liabilities.
Judge Mark X. Mullin oversees the case.
Bryan C. Assink, Esq., at Bonds Ellis Eppich Schafer Jones, LLP,
represents the Debtor as legal counsel.
HEBNER DIESEL: William Harris Named Subchapter V Trustee
--------------------------------------------------------
The U.S. Bankruptcy Administrator for the Southern District of
Alabama appointed William Harris as Subchapter V Trustee for Hebner
Diesel Performance, Inc.
About Hebner Diesel Performance
Hebner Diesel Performance, Inc., doing business as Hurricane,
sought protection under Chapter 11 of the U.S. Bankruptcy Code
(Bankr. S.D. Ala. Case No. 24-11168) on May 13, 2024, with up to
$50,000 in assets and up to $1 million in liabilities.
Judge Henry A. Callaway presides over the case.
J. Willis Garrett, III, Esq., at Galloway, Wettermark & Rutens, LLP
represents the Debtor as legal counsel.
HELIUS MEDICAL: Regains Compliance With Nasdaq Listing Requirement
------------------------------------------------------------------
Helius Medical Technologies, Inc. reported in a Form 8-K filed with
the Securities and Exchange Commission that on May 31, 2024, it
received formal notification from The Nasdaq Stock Market LLC
confirming that, following the consummation of a previously
disclosed financing consummated on May 9, 2024, the Company has
regained compliance with Nasdaq Listing Rule 5550(b)(1), which
requires issuers listed on The Nasdaq Capital Market to maintain
stockholders' equity of at least $2.5 million, and that the Company
satisfies all other applicable criteria for continued listing on
The Nasdaq Capital Market. As a result of the determination, the
listing matter is now closed.
About Helius Medical
Helius Medical Technologies, Inc. -- http://www.heliusmedical.com/
-- is a neurotechnology company focused on neurological wellness.
Its purpose is to develop, license or acquire non-implantable
technologies targeted at reducing symptoms of neurological disease
or trauma.
Minneapolis, Minnesota-based Baker Tilly US, LLP, the Company's
auditor since 2022, issued a "going concern" qualification in its
report dated March 28, 2024, citing that the Company has recurring
losses from operations, an accumulated deficit, expects to incur
losses for the foreseeable future and requires additional working
capital. These are the reasons that raise substantial doubt about
its ability to continue as a going concern.
HUTCHENS PERRY: Beverly Brister Named Subchapter V Trustee
----------------------------------------------------------
The Acting U.S. Trustee for Region 13 appointed Beverly Brister,
Esq., a practicing attorney in Benton, Ark., as Subchapter V
trustee for Hutchens Perry Enterprises Inc.
Ms. Brister will be paid an hourly fee of $300 for her services as
Subchapter V trustee. Should travel be required outside of Saline
or Pulaski Counties, the Subchapter V trustee will seek a
compensation rate of $100 per hour for actual travel time
incurred.
Ms. Brister declared that she is a disinterested person according
to Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Beverly I. Brister, Esq.
Attorney at Law
212 W. Sevier
Benton, AR 72015
Phone: 501-778-2100
Email: bibristerlaw@gmail.com
About Hutchens Perry Enterprises
Hutchens Perry Enterprises, Inc. sought protection under Chapter 11
of the U.S. Bankruptcy Code (Bankr. W.D. Ark. Case No. 24-70811) on
May 16, 2024, with $100,001 to $500,000 in assets and $500,001 to
$1 million in liabilities.
Judge Bianca M. Rucker presides over the case.
Stanley V. Bond, Esq., at Bond Law Office represents the Debtor as
bankruptcy counsel.
IHEARTMEDIA INC: Hires Advisers After Revenue Dips
--------------------------------------------------
Reshmi Basu of Bloomberg News reports that iHeart some creditors to
iHeartMedia Inc., including Pacific Investment Management Co., have
retained financial and legal advisers as they eye a drop in revenue
at a time when other indebted media companies are pushing ahead
with debt restructurings.
The radio broadcaster and podcasting platform’s lenders are
working with financial adviser Evercore and law firm Milbank,
according to people with knowledge of the matter, who asked not to
be identified discussing a private matter. Their holdings are
weighted toward term loan debt that comes due in 2026, they said.
IHeart shares fell to a record low earlier this month, May 2024.
About iHeart Media Inc.
iHeartmedia, Inc. develops, owns, and operates the iHeart.com
website, which includes a broad selection of video content posted
along with their stories.
INFINITE PROPERTIES: Starts Subchapter V Bankruptcy Process
-----------------------------------------------------------
Infinite Properties LLC filed for chapter 11 protection in the
Northern District of Florida. According to court filing, the Debtor
reports between $10 million and $50 million in debt owed to 1 and
49 creditors. The petition states funds will not be available to
unsecured creditors.
A meeting of creditors under 11 U.S.C. Section 341(a) is slated for
June 24, 2024 at 10:00 a.m. in Room Telephonically on telephone
conference line:(877) 835-0364. participant access code: 4662459).
About Infinite Properties LLC
Infinite Investments LLC operates as an investment company. The
Company invests in rental houses, apartment complexes, property
management, and clothing companies. Infinite Investments serves
customers in the United States.
Infinite Properties LLC sought relief under Subchapter V of Chapter
11 of the U.S. Bankruptcy Code (Bankr. N.D. Fla.Case No. 24-10115)
on May 21, 2024. In the petition filed by Richard S. Blaser as
managing member, the Debtor reports estimated assets and
liabilities between $10 million and $50 million.
The Debtor is represented by:
Justin M. Luna, Esq.
Latham, Luna, Eden & Beaudine, LLP
14260 W. Newberry Rd.
#413
Newberry, FL 32669
Tel: (401) 481-5800
Fax: (407) 481-5801
E-mail: jluna@lathamluna.com
INSIGHT LIDAR: Case Summary & 12 Unsecured Creditors
----------------------------------------------------
Debtor: Insight Lidar, Inc.
100 Technology Dr. Suite 310
Broomfield, CO 80021
Business Description: Insight Lidar is a supplier of all-
semiconductor swept lasers.
Chapter 11 Petition Date: June 6, 2024
Court: United States Bankruptcy Court
District of Colorado
Case No.: 24-13142
Judge: Hon. Thomas B Mcnamara
Debtor's Counsel: J. Brian Fletcher, Esq.
ONSAGER | FLETCHER | JOHNSON | PALMER LLC
600 17th Street, Suite 425N
Denver, CO 80202
Tel: 303-512-1123
Email: jbfletcher@ofjlaw.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Douglas Zahn as chief financial
officer.
A copy of the Debtor's list of 12 unsecured creditors is available
for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/FPLMG2I/Insight_Lidar_Inc__cobke-24-13142__0003.0.pdf?mcid=tGE4TAMA
A full-text copy of the petition is available for free at
PacerMonitor.com at:
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/FF7B2PQ/Insight_Lidar_Inc__cobke-24-13142__0001.0.pdf?mcid=tGE4TAMA
INSIGHT PHOTONIC: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Insight Photonic Solutions, Inc.
d/b/a Insight
100 Technology Dr. Suite 310
Broomfield, CO 80021
Business Description: Insight supplies all-semiconductor akinetic
high-speed low-cost swept lasers.
Chapter 11 Petition Date: June 6, 2024
Court: United States Bankruptcy Court
District of Colorado
Case No.: 24-13141
Judge: Hon. Michael E. Romero
Debtor's Counsel: J. Brian Fletcher, Esq.
ONSAGER | FLETCHER | JOHNSON | PALMER LLC
600 17th Street, Suite 425N
Denver, CO 80202
Tel: 303-512-1123
E-mail: jbfletcher@ofjlaw.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $10 million to $50 million
The petition was signed by Michael Minneman as chief executive
officer.
A copy of the Debtor's list of 20 largest unsecured creditors is
available for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/GK4FRCQ/Insight_Photonic_Solutions_Inc__cobke-24-13141__0003.0.pdf?mcid=tGE4TAMA
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/3UWKBKI/Insight_Photonic_Solutions_Inc__cobke-24-13141__0001.0.pdf?mcid=tGE4TAMA
INTERSTATE WASTE: S&P Rates First-Lien Delayed-Draw Term Loan 'B'
-----------------------------------------------------------------
S&P Global Ratings assigned its 'B' issue-level rating and '3'
recovery rating to Interstate Waste Services Inc.'s proposed $100
million first-lien delayed-draw term loan. The debt is being issued
by IWS' wholly owned subsidiary The Action Environmental Group Inc.
The company is also issuing a $50 million fungible add-on to its
existing first-lien term loan facility, drawing on its existing $75
million delayed-draw term loan and upsizing its revolving credit
facility by $30 million to $180 million.
IWS's pro forma capital structure will consist of $805 million in
first-lien term loans (including $680 million existing term loan,
$50 million add-on and $75 million existing delayed-draw term loan
to be drawn as part of the transaction), undrawn $100 million
delayed-draw term loan, and undrawn $180 million revolver. All of
S&P's ratings on IWS, including issue-level ratings and recovery
ratings, remain the same as a result of this proposed financing,
which the company expects to close early in the third quarter of
2024.
S&P said, "We expect IWS to use proceeds from this proposed
transaction to primarily finance planned acquisitions in the New
York state's waste collection industry over the next few quarters.
We view the acquisitions as complementary to IWS' overall business
strategy and asset portfolio providing synergistic opportunities in
areas such as route consolidation, waste internalization, and
headcount optimization. The company will also use proceeds to
replenish cash on the balance sheet previously used for capital
expenditures.
"We expect these planned acquisitions to moderately increase IWS's
EBITDA generation because the company would benefit from its
greater presence and density in New York, higher waste volumes, and
internalization of waste to its own landfill. Among the planned
acquisitions, the company expects the largest acquisition to close
early in the third quarter of 2024.
"The company's S&P Global Ratings-adjusted debt-to-EBITDA ratio
will increase in 2024 compared to 2023 as a result of this
transaction as well as the earlier debt-financed acquisition of Oak
Ridge during the year. At the same time, consistent with our
base-case scenario, we expect weighted-average debt to EBITDA to
remain below 6.5x, which reflects the incremental EBITDA benefit
over the coming quarters from acquisitions and ongoing internal
expansion projects. Internal projects include the gondola
offloading facility at the company's Ohio landfill and two
materials recovery facilities slated to come online in the next few
quarters (including a replacement facility at Oak Ridge).
"In our base-case forecast, we assume a full drawdown on the
company's proposed $100 million delayed-draw term loan in 2025 to
support the company's growth plans."
ISSUE RATINGS—RECOVERY ANALYSIS
Key analytical factors
-- S&P's recovery analysis includes the capital structure IWS
expects to have in place upon closing of the proposed debt
financing.
-- The $50 million add-on term loan will be fungible with the
existing term loan B and will mature in 2030. Overall, IWS' pro
forma capital structure will comprise $805 million in first-lien
term loans (including $680 million existing term loan, $50 million
proposed add-on and $75 million existing delayed-draw term loan),
$100 million delayed-draw term loan, and $180 million revolving
credit facility. S&P has assumed full draws on both delayed-draw
term loans in its recovery analysis.
-- S&P's recovery rating remains '3' (50%-70%; rounded estimate:
50%) and the issue-level rating remains 'B' on the company's
first-lien senior secured facilities, issued by subsidiary The
Action Environmental Group Inc.
-- S&P's simulated default scenario considers a default in 2027
amid a precipitous decline in IWS's volumes, pricing pressures from
competition, or an inability to pass on high costs, sharply
reducing earnings. IWS's operating margins, cash flow, and
liquidity would be constrained to the extent that it cannot cover
mandatory debt obligations and other fixed charges. Ultimately,
capital resources would become stretched to the point IWS cannot
continue to operate absent a bankruptcy filing.
-- S&P values IWS on a going-concern basis because we believe
creditors would realize the greatest recovery value through
reorganization rather than liquidation.
-- S&P values the company using a 6x multiple of its projected
emergence EBITDA. The 6x multiple is in line with that used for
similarly rated peers in the environmental services industry such
as LRS Holdings LLC.
-- S&P assumes the company's upsized $180 million revolver would
be 85% drawn and that the proposed $100 million delayed-draw term
loan would be 100% drawn at default.
Simulated default assumptions
-- Year of default: 2027
-- EBITDA at emergence: $95 million
-- Implied EV multiple: 6x
Simplified waterfall
-- Net enterprise value (after 5% administrative expenses): $542
million
-- Valuation split (obligors/nonobligors): 100%/0%
-- Estimated first-lien debt claims: $1,069 million
--Recovery expectations: 50%-70% (rounded estimate: 50%)
All debt amounts include six months of prepetition interest.
INTRUSION INC: Swaps 339 Series A Shares for 243,725 Common Shares
------------------------------------------------------------------
Intrusion, Inc. reported in a Form 8-K filed with the Securities
and Exchange Commission that pursuant to a privately-negotiated
agreement dated May 30, 2024, by and between Streeterville Capital,
LLC, a Utah limited liability company, and the Company, the Company
agreed to exchange 339 shares of Series A Preferred for 243,725
shares of Company's common stock, par value $0.01 per share,
according to the terms and conditions of an Exchange Agreement.
The fair value of the Exchange is $372,900 and represents fair
value to the Company for the Exchange Shares. The issuance of the
Exchange Shares is pursuant to the exemption from the registration
requirements afforded by Section 3(a)(9) of the Securities Act of
1933, as amended.
About Intrusion
Headquartered in Plano, Texas, Intrusion Inc. offers businesses of
all sizes and industries products and services that leverage the
Company's exclusive threat intelligence database of over 8.5
billion IP addresses and domain names. After many years of
gathering intelligence and providing its INTRUSION TraceCop and
Savant solutions exclusively to government entities, it released
its first commercial product in 2021, the INTRUSION Shield.
INTRUSION Shield was designed to allow businesses to incorporate a
Zero Trust, reputation-based security solution into their existing
infrastructure to observe traffic flow and instantly block known
malicious or unknown connections from both entering or exiting a
network, making it an ideal solution for protecting from Zero-Day
and ransomware attacks.
Dallas, Texas-based Whitley Penn LLP, the Company's auditor since
2009, issued a "going concern" qualification in its report dated
April 1, 2024, citing that the Company has suffered recurring
losses from operations, negative cash flows from operations, and
has a net working capital deficiency that raise substantial doubt
about its ability to continue as a going concern.
J.H. LLC: Voluntary Chapter 11 Case Summary
-------------------------------------------
Debtor: J.H., LLC
301 21st Street N
Bessemer, AL 35020
Business Description: The Debtor is primarily engaged in
manufacturing non-metallic mineral products.
Chapter 11 Petition Date: June 6, 2024
Court: United States Bankruptcy Court
Northern District of Alabama
Case No.: 24-01711
Judge: Hon. Tamara O. Mitchell
Debtor's Counsel: Stuart Memory, Esq.
MEMORY MEMORY AND CAUSBY LLP
469 S McDonough Street
Montgomery, AL 36104
Tel: (334) 834-8000
Email: smemory@memorylegal.com
Estimated Assets: $10 million to $50 million
Estimated Liabilities: $10 million to $50 million
The petition was signed by Bintao Qin, VP of Operations.
The Debtor indicated it has no unsecured creditors.
https://www.pacermonitor.com/view/N6OLFKI/JH_LLC__alnbke-24-01711__0001.1.pdf?mcid=tGE4TAMA
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/NR7J26I/JH_LLC__alnbke-24-01711__0001.0.pdf?mcid=tGE4TAMA
JUN ENTERPRISES: Ruby's Academy Seeks Subchapter V Bankruptcy
-------------------------------------------------------------
Erik Bojnansky of the South Florida Business reports that a nursing
school in Lauderhill with more than $1.4 million in debt recently
filed for Chapter 11 reorganization protection.
Jun Enterprise LLC, which does business as Ruby's Academy for
Health Occupations, filed the petition May 15, 2024 in U.S.
Bankruptcy Court for the Southern District of Florida in Fort
Lauderdale.
A corporate ownership statement filed with the court stated that
Carolyn Sutton is the sole owner of Jun Enterprise, which operates
Ruby's Academy at 4735 N. University Drive in Lauderhill.
According to the filing, Jun Enterprise filed for bankruptcy after
TD Bank garnished $2,761.15 from its account. The garnishment was
related to a $77,920.68 judgment obtained by Oakland West LLC
against Jun Enterprise on April 24, 2024 Jun Enterprise's attorney
Thomas Abrams stated in a May 15, 2024 emergency filing. Abrams'
emergency motion to stop the garnishment was approved by Bankruptcy
Court Judge Peter Russin on May 20.
Jun Enterprise had a lease with landlord Oakland West LLC, but
never occupied the premises "because of different issues and a
misunderstanding," said Abrams, of Fort Lauderdale-based firm
Gamberg & Abrams.
Although the parties settled, Jun Enterprise didn't have the funds
to pay the judgment, Abrams said, adding the company "might be able
to get another loan, if they had more time."
Hollywood-based law firm Salpeter Gitkin LLP, which is listed as
representing Oakland West LLC, did not immediately return requests
for comment.
According to its bankruptcy petition, Jun Enterprise's largest
creditor is the U.S. Small Business Administration, owing $1.26
million. American Express is owed $41,481.20, and Jupiter-based
Mallory Law Group is owed $8,934.28, the document said.
Jun Enterprise stated in a May 15, 2024 filing that it has
$567,259.17 in assets, which includes $220,000 in due tuition; a
Tamarac condo unit valued at $175,000; a Lauderhill condo unit
valued at $150,000; and furniture and office equipment valued at
$10,000.
The nursing school, which employs six full-time workers and five as
private contractors, made $813,688 in gross income in 2023. So far
this year, Jun Enterprise took in $330,000 in gross income,
according to the filing's case summary.
On May 21, 2024, Judge Russin issued another order that allows Jun
Enterprise to use cash collateral to keep the business operating.
In addition, the SBA will also receive "adequate protection
payments of $1,500 per month."
Ruby's Academy, which has 60 students this semester, continues to
operate normally, Abrams said. Jun Enterprise expects to have a
reorganization plan in 120 days, he added.
About Jun Enterprises LLC
Jun Enterprises LLC, doing business as Ruby's Academy for Health
Occupations, is a nursing school in Lauderhill.
Jun Enterprises LLC sought relief under Chapter 11 of the U.S.
Bankruptcy Court (Bankr. S.D. Fla. Case No. 24-14748) on May 15,
2024. In the petition filed by Carolyn Sutton, as president/owner,
the Debtor reports estimated assets between $500,000 and $1 million
and estimated liabilities between $1 million and $10 million.
The Honorable Bankruptcy Judge Peter D. Russin oversees the case.
The Debtor is represented by:
Thomas L Abrams
4735 North University Drive
Lauderhill, FL 33351
KIDWELL GROUP: Court OKs Cash Collateral Access Thru July 2
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida,
Orlando Division, authorized The Kidwell Group LLC to use cash
collateral, on an interim basis, in accordance with the budget,
through July 2, 2024.
Truist Bank has a properly perfected first priority lien and
security interest in, among other things, cash collateral.
The Debtor is permitted to use cash collateral to pay: (a) amounts
expressly authorized by the Court, including payments to the
Subchapter V Trustee and payroll obligations incurred post-petition
in the ordinary course of business; (b) the current and necessary
expenses set forth in the budget, plus an amount not to exceed 10%
for each line item; and (c) such additional amounts as may be
expressly approved in writing by Truist Bank.
Truist Bank will have a perfected post-petition lien against cash
collateral to the same extent and with the same validity and
priority as the prepetition lien, without the need to file or
execute any documents as may otherwise be required under applicable
non-bankruptcy law.
The Debtor will maintain insurance coverage for its property in
accordance with the obligations under all applicable loan and
security documents.
A continued hearing on the matter is set for July 2 at 3 p.m.
A copy of the order is available at https://urlcurt.com/u?l=PXxZbw
from PacerMonitor.com.
About The Kidwell Group
The Kidwell Group, LLC sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No. 24-02024) on April
25, 2024. In the petition signed by Richard L. Kidwell, manager,
the Debtor disclosed up to $50 million in assets and up to $1
million in liabilities.
Judge Lori V. Vaughan oversees the case.
Justin M. Luna, Esq., at Latham Luna Eden & Beaudine LLP,
represents the Debtor as legal counsel.
KULR TECHNOLOGY: Reports Net Loss of $5MM in Q1 2024
----------------------------------------------------
KULR Technology Group Inc. filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q reporting a net loss
of $5,008,876 on $1,749,104 of revenue for the three months ended
March 31, 2024, compared to a net loss of $6,602,861 on $1,759,802
of revenue for the three months ended March 31, 2023.
As of March 31, 2024, the Company had cash of $798,843 and a
working capital deficit of $3,907,626. For the three months ended
March 31, 2024, the Company used cash in operating activities of
$3,907,406.
As of March 31, 2024, the Company has $11,304,092 in total assets,
$8,714,494 in total liabilities, and $2,589,598 in total
stockholders' equity.
The Company's primary source of liquidity has historically been
cash generated from equity and debt offerings, along with cash
flows from revenue. Future cash requirements for its current
liabilities include $5,800,667 for accounts payable and accrued
expenses, $1,259,534 for merchant cash advances, $981,371 for
capital expenditures and $435,707 for future payments under
operating leases. Future cash requirements for long-term
liabilities include $250,000 for unsecured promissory notes.
On December 20, 2023, the Company received a notice of
noncompliance from NYSE Regulation stating it is not in compliance
with Section 1003(a) (iii) in the NYSE American Company Guide since
the Company reported stockholders' equity of $1,200,172 at
September 30, 2023, and losses from continuing operations and/or
net losses in its five most recent fiscal years. On February 12,
2024, the Company received a second notice letter from NYSE stating
it is not in compliance with Section 1003 (f) (v) of the Company
guide since the Company's securities were trading at an average of
less than $0.20 per share for 30 days.
On March 5, 2024, the Company received a notification from the NYSE
that the Company's plan to regain compliance with Section 1003 (a)
(iii) of the Company Guide was accepted and so long as the Company
meets its interim objectives, the Company will have until June 20,
2025, to regain compliance with the minimum stockholders' equity
requirement. On May 1, 2024, the Company received a notification
from the NYSE stating that the Company had regained compliance with
Section 1003 (f) (v) of the Company Guide given the increase in the
trading price of the Company's securities.
Management's plans to mitigate the factors which raise substantial
doubt include:
(i) revenue growth,
(ii) reducing operating expenses through careful cost
management, and
(iii) raising additional funds through future financings.
The Company's ability to continue as a going concern is dependent
upon its ability to successfully execute these initiatives.
A full-text copy of the Company's Form 10-Q is available at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1662684/000141057824000868/tmb-20240331x10q.htm
About KULR Technology Group Inc.
KULR Technology Group Inc. (NYSE American: KULR) is an energy
management platform company offering proven solutions that play a
critical role in accelerating the electrification of the circular
economy. Leveraging a foundation in developing, manufacturing, and
licensing next-generation carbon fiber thermal management
technologies for batteries and electronic systems, KULR has evolved
its holistic suite of products and services to enable its customers
across disciplines to operate with efficiency and sustainability in
mind. For more information, please visit www.kulrtechnology.com.
As of December 31, 2023, the Company had $10,864,356 in total
assets, $13,047,052 in total liabilities, and $2,182,696 in total
stockholders' deficit.
Los Angeles, Calif.-based Marcum LLP the Company's auditor since
2018, issued a "going concern" qualification in its report dated
April 12, 2024, citing that the Company has a working capital
deficit, has incurred losses from operations, and needs to raise
additional funds to meet its obligations and sustain its
operations. These conditions raise substantial doubt about the
Company's ability to continue as a going concern.
LA HACIENDA: Orrick & Klehr Represent Trails End United for Change
------------------------------------------------------------------
The law firms of Orrick, Herrington & Sutcliffe LLP and Klehr
Harrison Harvey Branzburg LLP filed a verified statement pursuant
to Rule 2019 of the Federal Rules of Bankruptcy Procedure to
disclose that in the Chapter 11 case of La Hacienda Mobile Estates,
LLC, the firms represent Trails End United for Change ("TEUC").
TEUC is an unincorporated association representing 10 of the
approximately 30 remaining occupied spaces1 in the mobilehome park
located at 104 E Sierra Ave, Fresno, California (the "Park"). TEUC
was formed in 2021, approximately 3 years before the filing of the
Chapter 11 Case at a time when the Park was named "Trails End
Mobilehome Park."
TEUC participated as an interested party in the receivership
litigation that led to the Debtor's purchase of the Park, opposing
Debtor's purchase of the Park. Nearly 8 months prior to the filing
of the Chapter 11 Case, it joined a second resident association and
individual residents as plaintiffs in filing affirmative litigation
against the Debtor and its affiliated entity and insider Harmony
Communities, Inc.
TEUC and its co-plaintiffs recently obtained a preliminary
injunction against the Debtor and Harmony prohibiting them from
closing the Park until they complied with California mobilehome
statutes and from evicting residents.
Moreover, due to TEUC's role over those 3 years of advocating
against the Debtor's purchase of the Park in 2022, successfully
blocking an impermissible rent increase, and pursuing legal action
against the Debtor's attempt to close the Park, some of TEUC's
members are very concerned about publicly revealing their identity
until absolutely necessary, fearing retaliation by the Debtor or
its agents or representatives, a fear vindicated by the fact that
the Debtor was pursuing between 10-20 additional evictions until
TEUC obtained an injunction preventing it from doing so.
TEUC contends that, because it was formed three years prior to the
filing of this Chapter 11 Case, it does not necessarily fall within
the parameters of Rule 2019, which typically involves groups of
creditors that are formed in response to a bankruptcy filing, as
opposed to pre-existing legal entities.
Orrick and Klehr Harrison do not hold any disclosable economic
interests (as that term is defined in Bankruptcy Rule 2019(a)(1))
in relation to the Debtor.
The TEUC Tenant Members' address and names are:
1. David Willis
104 E Sierra Ave, Space 41, Fresno,
California 93710
2. Sharon Smith
104 E Sierra Ave, Space 32, Fresno,
California 93710
3. Patsy Rajskup
104 E Sierra Ave, Space 29A, Fresno,
California 93710
4. Teresa Jaimes
104 E Sierra Ave, Space 5, Fresno, California
93710
5. Angelica Silvestre
104 E Sierra Ave, Space 30, Fresno,
California 93710
6. Angelica Lepe
104 E Sierra Ave, Space 1, Fresno, California
93710
Attorneys for Trails End United for Change:
ORRICK, HERRINGTON & SUTCLIFFE LLP
Marc A. Levinson, Esq.
The Orrick Building
405 Howard Street
San Francisco, CA 94105-2669
Telephone: (916) 329 4910
Email: malevinson@orrick.com
-and-
Michael Trentin, Esq.
51 West 52nd Street
New York, NY 10019-6142
Telephone: (212) 506 5000
Email: mtrentin@orrick.com
About La Hacienda Mobile Estates
La Hacienda Mobile Estates, LLC, is primarily engaged in renting
and leasing real estate properties.
La Hacienda sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bank. D. Del. Case No. 24-10984) on May 9, 2024,
with $1 million to $5 million in both assets and liabilities. The
petition was signed by Matt Davies as managing member.
The Hon. Karen B. Owens presides over the case.
The Debtor tapped Ashby & Geddes, P.A., as bankruptcy counsel.
LADDER CAPITAL: Fitch Affirms 'BB+' LongTerm IDR, Outlook Stable
----------------------------------------------------------------
Fitch Ratings has affirmed the Long-Term Issuer Default Ratings
(IDRs) and senior unsecured debt ratings of Ladder Capital Finance
Holdings LLLP and Ladder Capital Finance Corporation, subsidiaries
of Ladder Capital Corp (collectively Ladder), at 'BB+'. The Rating
Outlook is Stable.
KEY RATING DRIVERS
Established Middle Market Franchise: The rating affirmation
reflects Ladder's established platform as a middle market
commercial real estate (CRE) lender and investor; conservative
underwriting culture through time and overall solid risk
management; continued adherence to its reasonable leverage target;
limited exposure to financing subject to mark-to-market provisions
and strong liquidity relative to upcoming debt maturities and
lending commitments.
Weak Operating Conditions: The challenging operating environment is
a constraint on Fitch's assessment of Ladder and its CRE-focused
peers. Other rating constraints include Ladder's proportion of
secured, wholesale debt funding and the absence of a track record
as a standalone entity through a traditional credit cycle though
the firm is showing an adequate ability to manage credit costs as
the CRE-sector has been weak for a prolonged time period.
Modestly Deteriorating Asset Quality: Ladder continues to report
relatively strong credit quality metrics compared to peers though
the ratio of nonaccrual loans to gross loans ticked up to 2.6% at
1Q24 from 1.4% the year prior. From inception in October 2008
through 1Q24, Ladder has originated over $45 billion of CRE
investments and incurred losses of less than 0.1%.
Further, the majority of its mortgage book has been originated
since late 2020 with fresh valuations that reflect business plans
and economic expectations post-pandemic. This includes the firm's
office CRE portfolio which represents 31% of total loans. Fitch
believes this, along with the firm's granular loan portfolio,
should lead to relatively solid credit quality performance over the
Outlook horizon compared to peers.
Low Leverage to Likely Trend Up: Ladder's leverage (gross debt to
tangible equity plus accumulated depreciation) was 2.2x at 1Q24
compared to 2.5x at 1Q23. The company seeks to manage its adjusted
leverage ratio, which excludes nonrecourse borrowings related to
securitizations, between 2.0x-3.0x. On this basis, Ladder's
leverage was 1.5x at 1Q24, the lowest level the firm has reported
since 2014. It had just over $1 billion of nonrecourse
collateralized loan obligation (CLO) debt outstanding as of 1Q24.
Fitch views Ladder's targeted leverage range as commensurate with
the firm's rating. Further, Fitch expects the firm to generally
de-lever during times of economic or sectoral stress and increase
leverage as it opportunistically deploys capital and excess
liquidity into lending or investing opportunities while remaining
well-within its targeted range.
Earnings in-line with Rating: Through 1Q24, Ladder's trailing 12
month (TTM) distributable earnings (DE) totaled $163 million,
roughly flat from the year prior. Earnings are supported by higher
rates and consistent net operating income from the CRE equity
segment. DE to average assets was 2.9% in the TTM, above the firm's
four-year average of 1.9%, which is within Fitch's 'bb' category
benchmark range of 1%-4% for high balance sheet usage finance and
leasing companies with a sector risk operating environment (SROE)
score in the 'bbb' category. Fitch expects earnings to remain
relatively resilient even with incremental asset quality
deterioration as higher provisions and/or credit losses should not
be as lumpy due to the loan book's granular nature.
Relatively Strong Funding Mix: Ladder's funding profile remains
relatively strong compared to peers, albeit still reliant on
wholesale sources. It has continued to diversify funding sources
over time including CLO issuances and unsecured note offerings.
Since the beginning of 2020 and the onset of the pandemic, the firm
has reduced more market sensitive funding sources such as
repurchase obligations.
Mark-to-market funding represented 16% of total financing at 1Q24,
down from nearly 60% pre-2020. Fitch expects the level of
mark-to-market debt will remain close to current levels over the
near-term and remain well-below historical averages, which should
reduce margin call risk; a positive for the ratings.
Unsecured debt represented 42.6% of total debt at 1Q24, which was
toward the lower end of Fitch's 'bbb' category benchmark range of
35% to 100% for balance sheet heavy finance and leasing companies
with a SROE score in the 'bbb' category. Ladder's ability to
economically access unsecured funding that exceeds 50% of total
debt on a sustained basis would be viewed favorably by Fitch.
Meaningful On-and-Off-Balance Sheet Liquidity: Ladder's liquidity
position remains solid with on-hand unrestricted cash representing
over 20% of total assets at 1Q24. The firm also has over $1.8
billion of non-cash unencumbered assets available to pledge to its
various committed loan or securities repurchase agreements. Ladder
has shown the ability to post this additional collateral to access
funds even in times of market stress. It also has an unused $324
million committed unsecured revolving line of credit with a
syndicate of banks. The revolver's maturity was recently extended
to January 2029. Fitch expects balance sheet liquidity to trend
down as the investment and/or lending environment becomes more
certain, but remain elevated compared to pre-pandemic levels.
Outlook Stable: The Stable Outlook reflects Fitch's view that
Ladder's leverage will be managed in a manner consistent with the
risk profile of the balance sheet, credit losses will remain
manageable, unsecured funding will remain above 35% of total debt
and earnings will remain sufficient to cover its dividend due to
higher interest rates and the generation of solid net operating
income.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- A material increase in credit losses or worsening credit
performance related to larger individual exposures within Ladder's
loan portfolio;
- A sustained reduction in the proportion of unsecured debt funding
below 35%, particularly if due to the firm's inability to refinance
existing debt ahead of stated maturities;
- A sustained increase in adjusted leverage above 3.0x and/or an
inability to manage leverage at a level commensurate with the risk
profile of the portfolio;
- An inability to maintain unencumbered assets at a level that
provides sufficient cushion to the covenant;
- An inability to maintain sufficient liquidity relative to
near-term debt maturities, unfunded commitments to portfolio
companies and/or the potential for margin calls; and/or
- Weak distributable earnings coverage of the dividend on a
sustained basis.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- A sustained increase in the proportion of unsecured debt at or
above 50% of total debt, accompanied by a sustained reduction in
shorter term, secured repurchase facilities and other debt subject
to margin calls;
- Continued outperformance through the current CRE downturn that
differentiates the firm from peers in terms of impaired loan levels
and realized credit losses;
- A demonstrated ability to maintain leverage within the targeted
range through market cycles and commensurate with the risk profile
of the portfolio;
- Improved earnings and dividend coverage metrics without material
influence from asset sales; and/or
- Maintenance of sufficient liquidity and unencumbered assets in
excess of the amount required under its covenant.
DEBT AND OTHER INSTRUMENT RATINGS: KEY RATING DRIVERS
The equalization of the senior unsecured debt rating with Ladder's
IDR reflects the funding mix and the availability of unencumbered
assets, suggesting average recovery prospects for debtholders under
a stressed scenario.
DEBT AND OTHER INSTRUMENT RATINGS: RATING SENSITIVITIES
The unsecured debt rating is sensitive to changes to Ladder's IDR
and the level of unencumbered balance sheet assets relative to
outstanding debt. An increase in secured debt and/or a sustained
decline in the level of unencumbered assets, which weakens recovery
prospects on the senior unsecured debt, could result in the
unsecured debt ratings being notched down from the IDR.
ADJUSTMENTS
The Standalone Credit Profile (SCP) has been assigned in line with
the implied SCP.
The Business Profile score has been assigned below the implied
score due to the following adjustment reason: Business model
(negative).
The Funding, Liquidity & Coverage score has been assigned below the
implied score due to the following adjustment reason: Business
model/funding convention (negative).
ESG CONSIDERATIONS
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Prior
----------- ------ -----
Ladder Capital
Finance Holdings
LLLP LT IDR BB+ Affirmed BB+
senior unsecured LT BB+ Affirmed BB+
Ladder Capital
Finance Corporation LT IDR BB+ Affirmed BB+
senior unsecured LT BB+ Affirmed BB+
LADRX CORP: Posts $186,735 Net Income in Q1 2024
------------------------------------------------
LadRx Corp. filed with the Securities and Exchange Commission its
Quarterly Report on Form 10-Q reporting a net income of $186,735
for the three months ended March 31, 2024, compared to a net loss
of $1.1 million for the three months ended March 31, 2023.
During the three-month period ended March 31, 2024, although the
Company realized a net income of $0.2 million, it had a loss from
operations of $0.8 million, and incurred a net loss from operations
of $3.8 million for the year ended December 31, 2023, and had total
stockholders' equity as of March 31, 2024 of $0.3 million. The
Company has no recurring revenue, and it is likely to continue to
incur losses unless and until it concludes a successful strategic
partnership or financing for its LADR technology. As a result,
management has concluded that there is substantial doubt about the
Company's ability to continue as a going concern.
At March 31, 2024, the Company had cash and cash equivalents of
approximately $2.1 million. The Company believes it has sufficient
cash to fund operations into the summer of 2024. The continuation
of the Company as a going concern is dependent upon its ability to
obtain necessary debt or equity financing to continue operations
until it begins generating positive cash flow. No assurance can be
given that any future financing will be available or, if available,
that it will be on terms that are satisfactory to the Company. Even
if the Company is able to obtain additional financing, it may
contain undue restrictions on its operations, in the case of debt
financing or cause substantial dilution for its stockholders, in
case of equity financing.
Net cash used in operating activities for the three months ended
March 31, 2023 was $0.7 million, which was primarily the result of
a net loss from operations of $1.1 million, and a net neutral in
net cash outflows associated with changes in assets and
liabilities. The net cash outflows associated with changes in
assets and liabilities were primarily due to a decrease of $0.2
million of prepaid expenses and other current assets and an
increase $0.2 million of accounts payable.
There were no investing activities in either of the three-month
periods ended March 31, 2024 and 2023, and the Company does not
expect any significant capital spending during the next 12 months.
There were no financing activities in the three-month period ended
March 31, 2024, whereas the Company paid dividends on the shares of
Series C 10.00% Convertible Preferred Stock of $0.1 million in the
three-month period ended March 31, 2023.
The Company continues to evaluate potential future sources of
capital, as it does not currently have commitments from any third
parties to provide it with additional capital and it may not be
able to obtain future financing on favorable terms, or at all. The
results of the Company's technology licensing efforts and the
actual proceeds of any fund-raising activities will determine its
ongoing ability to operate as a going concern. The Company's
ability to obtain future financings through joint ventures, product
licensing arrangements, royalty sales, equity financings, grants or
otherwise is subject to market conditions and its ability to
identify parties that are willing and able to enter into such
arrangements on terms that are satisfactory to us. Depending upon
the outcome of the Company's fundraising efforts, the accompanying
financial information may not necessarily be indicative of its
future financial condition. Failure to obtain adequate financing
would adversely affect the Company's ability to operate as a going
concern.
"There can be assurance that we will be able to generate revenues
from our product candidates and become profitable. Even if we
become profitable, we may not be able to sustain that
profitability," the Company said.
As of March 31, 2024, the Company has $2.2 million in total assets,
$1.9 million in total current liabilities, and $345,208 in total
stockholders' equity.
A full-text copy of the Company's Form 10-Q is available at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/799698/000149315224019407/form10-q.htm
About LadRx Corp
LadRx Corporation is a biopharmaceutical research and development
company specializing in oncology. The Company's focus is on the
discovery, research and clinical development of novel anti-cancer
drug candidates that employ novel technologies that target
chemotherapeutic drugs to solid tumors and reduce off-target
toxicities.
As of December 31, 2023, the Company has $2.3 million in total
assets, $2.2 million in total liabilities, and $107,354 in total
stockholders' equity.
Los Angeles, Calif.-based Weinberg & Company, the Company's auditor
since 2019, issued a "going concern" qualification in its report
dated March 27, 2024, citing that the Company has no recurring
source of revenue, has incurred recurring operating losses and
negative operating cash flows since inception and has an
accumulated deficit at December 31, 2023. These matters raise
substantial doubt about the Company's ability to continue as a
going concern.
LEWISBERRY PARTNERS: U.S. Trustee Unable to Appoint Committee
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The U.S. Trustee for Region 3 disclosed in a court filing that no
official committee of unsecured creditors has been appointed in the
Chapter 11 case of Lewisberry Partners, LLC.
About Lewisberry Partners
Lewisberry Partners is primarily engaged in leasing buildings,
dwellings, or other real estate property to others. It is based in
Phoenixville, Pa.
Lewisberry Partners filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. E.D. Pa. Case No.
24-11496) on May 2, 2024, listing $1 million to $10 million in both
assets and liabilities. The petition was signed by Richard J. Puleo
as managing member.
Judge Patricia M. Mayer presides over the case.
Albert A. Ciardi, III, Esq., at Ciardi Ciardi and Astin represents
the Debtor as counsel.
LINCOLN PLACE: Case Summary & Two Unsecured Creditors
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Debtor: Lincoln Place 931 Brooklyn Corp
135-10 Liberty Avenue
Richmond Hill NY 11419
Business Description: Lincoln Place is primarily engaged in
renting and leasing real estate properties.
The Debtor is the 100% owner of a real
property located at 931 Lincoln Place
Brooklyn, NY 11213 valued at $550,000.
Chapter 11 Petition Date: June 5, 2024
Court: United States Bankruptcy Court
Eastern District of New York
Case No.: 24-42400
Debtor's Counsel: Gus Michael Farinella, Esq.
LAW OFFICES OF GUS MICHAEL FARINELLA, PC
251-73 Jericho Turnpike
Suite 203
Bellerose NY 11426
Tel: (516) 326-2333
Fax: (516) 305-5566
Email: gmf@lawgmf.com
Total Assets: $550,000
Total Liabilities: $1,828,020
The petition was signed by Dave Surujnarain as president.
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/URRPF2A/LINCOLN_PLACE_931_BROOKLYN_CORP__nyebke-24-42400__0001.0.pdf?mcid=tGE4TAMA
LOCAL GYM: Court OKs Interim Cash Collateral Access
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The U.S. Bankruptcy Court for the Northern District of Georgia,
Rome Division, authorized The Local Gym, LLC to use cash
collateral, on an interim basis, in accordance with the budget,
with a 15% variance.
In 2021, the debtor entered into a credit relationship with
Kapitus, LLC. Thereby, Kapitus acquired what the Debtor asserts,
and appears to be, a perfected lien interest on Debtor's receipts,
including a lien on cash, accounts and accounts receivable.
As adequate protection for the use of cash collateral, Kapitus is
granted perfected post-petition replacement liens in the Debtor's
cash collateral, to the same extent, validity and priority as
respondent's lien on cash collateral of the Debtor on the Petition
Date, nunc pro tunc to the Petition Date, without the need to file
or execute any document as may be otherwise be required under
applicable bankruptcy or non-bankruptcy law.
A copy of the order is available at https://urlcurt.com/u?l=wpODBZ
from PacerMonitor.com.
About The Local Gym, LLC
The Local Gym, LLC is a membership-based gym located in Paulding
County, Georgia.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Ga. Case No. 23-41899) on December 22,
2023. In the petition signed by Bryan Wetzel, manager, the Debtor
disclosed up to $50,000 in both assets and liabilities.
Judge Barbara Ellis-Monro oversees the case.
Michael Familetti, Esq., at Familetti Law Firm, represents the
Debtor as legal counsel.
LTL MANAGEMENT: J&J Accuses Beasley of 'Gamesmanship'
-----------------------------------------------------
Jake Maher of Law360 reports that Johnson & Johnson and the Beasley
Allen Law Firm have accused each other by turns of "gamesmanship"
and "unscrupulous conduct" in New Jersey courts in a fight over
whether the firm should be disqualified from talcum powder
litigation for allegedly collaborating in secret with a former J&J
outside counsel.
About LTL Management
LTL Management, LLC, is a subsidiary of Johnson & Johnson (J&J),
which was formed to manage and defend thousands of talc-related
claims and oversee the operations of Royalty A&M. Royalty A&M owns
a portfolio of royalty revenue streams, including royalty revenue
streams based on third-party sales of LACTAID, MYLANTA/MYLICON and
ROGAINE products.
LTL Management filed a petition for Chapter 11 protection (Bankr.
W.D.N.C. Case No. 21-30589) on Oct. 14, 2021. The case was
transferred to New Jersey (Bankr. D.N.J. Case No. 21-30589) on Nov.
16, 2021. The Hon. Michael B. Kaplan is the case judge. At the time
of the filing, the Debtor was estimated to have $1 billion to $10
billion in both assets and liabilities.
The Debtor tapped Jones Day and Rayburn Cooper & Durham, P.A., as
bankruptcy counsel; King & Spalding, LLP and Shook, Hardy & Bacon
LLP as special counsel; McCarter & English, LLP as litigation
consultant; Bates White, LLC as financial consultant; and
AlixPartners, LLP, as restructuring advisor. Epiq Corporate
Restructuring, LLC, is the claims agent.
An official committee of talc claimants was formed in the Debtor's
Chapter 11 case on Nov. 9, 2021. On Dec. 24, 2021, the U.S. Trustee
for Regions 3 and 9 reconstituted the talc claimants' committee and
appointed two separate committees: (i) the official committee of
talc claimants I, which represents ovarian cancer claimants, and
(ii) the official committee of talc claimants II, which represents
mesothelioma claimants.
The official committee of talc claimants I tapped Genova Burns LLC,
Brown Rudnick LLP, Otterbourg PC and Parkins Lee & Rubio LLP as its
legal counsel. Meanwhile, the official committee of talc claimants
II is represented by the law firms of Cooley LLP, Bailey Glasser
LLP, Waldrep Wall Babcock & Bailey PLLC, Massey & Gail LLP, and
Sherman Silverstein Kohl Rose & Podolsky P.A.
Re-Filing of Chapter 11 Petition
On Jan. 30, 2023, a panel of the Third Circuit issued an opinion
directing the Court to dismiss the 2021 Chapter 11 case on the
basis that it was not filed in good faith. Although the Third
Circuit panel recognized that the Debtor "inherited massive
liabilities" and faced "thousands" of future claims, it concluded
that the Debtor was not in financial distress before the filing.
On March 22, 2023, the Third Circuit entered an order denying the
Debtor's petition for rehearing. The Third Circuit entered an order
denying LTL's stay motion on March 31, 2023, and, on the same day,
issued its mandate directing the Bankruptcy Court to dismiss the
2021 Chapter 11 Case.
The Bankruptcy Court entered an order dismissing the 2021 Case on
April 4, 2023.
Johnson & Johnson on April 4, 2023, announced that its subsidiary
LTL Management LLC (LTL) has re-filed for voluntary Chapter 11
bankruptcy protection (Bankr. D.N.J. Case No. 23-12825) to obtain
approval of a reorganization plan that will equitably and
efficiently resolve all claims arising from cosmetic talc
litigation against the Company and its affiliates in North
America.
In August 2023, U.S. Bankruptcy Judge Michael Kaplan in Trenton,
New Jersey, ruled that the second bankruptcy case should be
dismissed, ending J&J's second attempt to use bankruptcy to resolve
thousands of lawsuits alleging that its talc products sometimes
contained asbestos and caused mesothelioma and ovarian cancer.
M AND J: Court OKs Cash Collateral Access Thru Aug 8
----------------------------------------------------
The U.S. Bankruptcy Court for the District of Massachusetts
authorized M & J Home Improvement, Inc. to use cash collateral on
an interim basis on the same terms and conditions as the previous
order, through August 8, 2024.
As previously reported by the Troubled Company Reporter, as
adequate protection, IOU Central, Inc., d/b/a IOU Financial, Inc.
and Santander Bank, N.A. were granted continuing replacement liens
and security interests in the post-petition assets of the Debtor to
the same validity, extent and priority that IOU and Santander would
have had in the absence of the bankruptcy filing.
On the first of each month, the Debtor was directed to make
Adequate Protection payments to IOU in the amount of $867 and
Santander in an amount equal to $78 per week.
A further hearing on the matter is set for August 8 at 12 p.m.
A copy of the order is available at https://urlcurt.com/u?l=KYZQV0
from PacerMonitor.com.
About M & J Home Improvement, Inc.
M & J Home Improvement, Inc. sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. D. Mass. Case No. 23-40874) on
October 20, 2023. In the petition signed by Matthew Sullivan,
manager, the Debtor disclosed up to $500,000 in assets and up to $1
million in liabilities.
Judge Elizabeth D. Katz oversees the case.
Christopher L. Murray, Esq., at Murray Law Firm, P.C., represents
the Debtor as legal counsel.
M&G TRANSPORTATION: Court OKs Cash Collateral Access on Final Basis
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The U.S. Bankruptcy Court for the Northern District of Texas,
Amarillo Division, authorized M&G Transportation, LLC to use cash
collateral, on a final basis.
As previously reported by the Troubled Company Reporter, the Debtor
requires the use of cash collateral to make payments necessary for
continued operations like payroll, payments to independent drivers,
fuel and operational costs.
As of the Petition Date, Debtor had cash in its deposit accounts in
the approximate amount of $10,000.
As of the Petition Date, the Debtor had accounts receivable
outstanding that have not been purchased by Triumph Financial
Services, LLC f/k/a Advance Business Capital LLC d/b/a Triumph
Business Capital, pursuant to the Factoring and Security Agreement
dated October 12, 2020, totaling approximately $198,270.
The Debtor asserts that approximately $170,000 of the Pre-Petition
Accounts receivable will be purchased by Triumph pursuant to its
contemporaneously filed DIP Motion, thus leaving $10,000 in cash
and $28,270 in Pre-Petition Accounts Receivable for a total amount
of cash collateral of $38,270.
On August 1, 2020, the Debtor acquired a working capital loan from
the United States Small Business Administration pursuant to its
economic injury disaster loan program. The SBA perfected its
security interest against Debtor's assets by filing a UCC-1
Financing Statement with the Texas Secretary of State's Office
under Filing Number 20-0041794714 on August 10, 2020. As of May 1,
2024, the current balance of the EIDL Loan was $149,841.
On October 12, 2020 entered into the 2020 Factoring Agreement. To
secure "Obligations", if any, owed by Debtor pursuant to the 2020
Factoring Agreement, Triumph acquired a security interest in all
assets of Debtor, including but not limited to all now existing and
future accounts, and deposit accounts. As of May 1, 2024, the
potential Obligations, if any, owed to Triumph total $699,039.
Triumph perfected its first-priority security interest by filing a
UCC-1 Financing Statement with the Texas Secretary of State's
Office under Filing Number 20-0052993252 on October 19, 2020.
The SBA subsequently agreed to subordinate such security interest
to the security interest of Triumph, pursuant to the Subordination
Agreement In Favor of Creditor dated April 4, 2022.
In addition to Triumph, the creditors that have filed UCC-1
Financing Statements and/or tax liens asserting a secured claim
against Debtor's cash collateral in the State of Texas are the SBA,
Samson MCA, LLC, Interstate Bank, (Global Merchant Case Advance,
LLC) First Corporate Solutions, representative, and Internal
Revenue Service.
A copy of the court's order and the Debtor's budget is available at
https://urlcurt.com/u?l=UrvMtb from PacerMonitor.com.
The Debtor projects total cash disbursements, on a weekly basis, as
follows:
$166,247 for the week ending June 14, 2024;
$166,822 for the week ending June 21, 2024; and
$229,035 for the week ending June 28, 2024.
About M&G Transportation, LLC
M&G Transportation, LLC sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. N.D. Tex. Case No. 24-20129-rlj11) on
May 15, 2024. In the petition signed by Manuel Gutierrez,
president, the Debtor disclosed up to $10 million in both assets
and liabilities.
Harrison Pavlasek, Esq., at Forshey Prostok LLP, represents the
Debtor as legal counsel.
MASONITE INT'L: Moody's Withdraws 'Ba1' CFR on Acquisition Closing
------------------------------------------------------------------
Moody's Ratings withdrew all ratings of Masonite International
Corporation, including its Ba1 corporate family rating, Ba1-PD
probability of default rating, the Ba2 backed senior unsecured
notes ratings, and SGL-1 Speculative Grade Liquidity Rating (SGL).
Previously, the ratings were on review for upgrade. The outlook was
changed to rating withdrawn from rating under review. This
concludes the ratings review that was initiated on February 9,
2024. The rating action follows the closing of the acquisition of
Masonite by Owens Corning (Baa1 stable) in May 2024, and the
repayment of the vast majority of Masonite's outstanding debt.
RATINGS RATIONALE
Moody's withdrew the ratings because there will be insufficient
information to support the maintenance of the ratings on Masonite's
remaining outstanding debt, which is represented by about $2
million of senior unsecured notes due 2030 and $29 million of
senior unsecured notes due 2028. The 2028 notes' indenture the has
been amended to eliminated certain covenants, restrictive
provisions and events of default. Masonite will not be filing
audited financial statements.
Moody's has decided to withdraw the ratings because it believes it
has insufficient or otherwise inadequate information to support the
maintenance of the ratings.
Masonite International Corporation is one of the largest vertically
integrated manufacturers of doors in the world, offering interior
and exterior doors for both residential and commercial end uses in
the US, the UK, and Canada. In the last twelve months ended March
31, 2024, the company generated $2.8 billion in revenue. Masonite
is now a wholly owned subsidiary of Owens Corning Corporation, a
global producer of composites and building materials systems.
MEDLINE BORROWER: Fitch Affirms 'B+' LongTerm IDR, Outlook Stable
-----------------------------------------------------------------
Fitch Ratings has affirmed Mozart Holdings, LP's and Medline
Borrower, LP's Long-Term Issuer Default Ratings (IDRs) at 'B+'. The
Rating Outlook is Stable.
As a result of the proposed refinancing of Medline's CMBS loans
with new senior secured loans, Fitch upgraded the existing
'BB-'/'RR3' senior secured debt ratings for Medline Borrower and
Medline Co-Issuer to 'BB'/'RR2'. This reflects Medline's revised
capital structure, which eliminates any debt senior to the existing
secured loans and notes as well as any new secured loans. Fitch
revised its estimate of Medline's going concern value in
determining its recovery ratings.
The proceeds of the new loans are expected to be used primarily to
repay the outstanding balance of CMBS loans.
In connection with the refinancing, Fitch has assigned expected
ratings of 'BB(EXP)'/'RR2' for proposed USD and EUR senior secured
term loans to be issued by Medline Borrower. Fitch also affirmed
Medline Borrower's existing senior unsecured debt at 'B-'/'RR6'.
Following the repayment and termination of the CMBS loans, Medline
intends to designate Mozart Real Estate and its subsidiaries as
restricted subsidiaries. The restricted subsidiaries will then
guarantee the senior secured credit facilities and all of the
existing and future issues of senior secured notes.
KEY RATING DRIVERS
Leading Market Position for Medical/Surgical Products: Medline is a
market leader in the manufacturing and distribution of
medical/surgical products in the U.S. The company operates in the
large and growing global medical-surgical (med-surg) market, which
Fitch expects to see increased demand for products due to
demographic trends such as an aging population and a rise in
co-morbidities. Demand for med-surg products, which are essential
supplies for healthcare provision in all clinical settings, is
largely unaffected by economic downturns and general market
cycles.
Effective Strategy Driving Cash Flow Growth: Medline's ability to
generate cash flow is bolstered by increased market share and
penetration across all end-markets, growth in brand penetration,
and strategic one-time investments in distribution and
manufacturing to support long-term growth. These factors may lead
to significant growth and potential margin expansion as the company
continues to convert customers to its branded products, which have
a high margin profile. Fitch believes that Medline has significant
revenue capacity in its existing asset base, and it plans to invest
in additional distribution capacity, allowing for further
incremental distribution revenue.
Clear Path to Deleveraging: Medline was acquired approximately
three years ago by Blackstone, Carlyle and Hellman & Friedman (the
sponsors). Fitch now sees clear evidence of deleveraging as
evidenced in Medline's growth in EBITDA and FCF relative to debt.
Fitch estimates EBITDA leverage will approach its positive rating
sensitivities over the forecast period.
Strong product demand, driven by new prime vendor relationships and
share gains across non-acute channels, is expected to underpin
meaningful revenue and EBITDA expansion. Fitch expects that a
combination of a strong steady existing customer base and effective
penetration of both the acute care and non-acute care health care
market with private label products will continue producing a high
level of profitability and cash flow for the company.
Customer Concentration: Similar to other peers in the med-surg and
pharmaceutical distribution sectors, Medline has some dependence on
certain healthcare provider customers and Group Purchasing
Organizations (GPOs). For the year ended Dec. 31, 2023, Medline's
top five U.S. customers represented approximately 12% of its net
sales.
For the year ended Dec. 31, 2023, approximately 73% of net sales
were from sales to member hospitals under contract with Medline's
largest GPOs. If the company loses a significant healthcare
provider customer or a GPO relationship, it could have a material
adverse effect on its business, but the termination of a GPO
relationship does not necessarily mean the loss of member hospitals
as customers.
Governance and Financial Policy: Fitch previously identified group
structure, governance and financial policy as key rating drivers
for Medline. In particular Fitch cited 1) the ability of the Mills
family and the sponsors to work together effectively and 2)
Medline's ability and intent to reduce debt over the near to medium
term as critical drivers for long-term value creation.
Medline's progress in executing its strategy as reflected in the
growth of revenues, EBITDA and cash flows has decreased these
potential credit risks. Positive rating actions will be focused
primarily on this continued progress and actual debt reduction and,
as a result, Fitch has lowered the ESG Governance Structure scores
to a '3' from a '4', which means these drivers now carry a
credit-neutral impact.
DERIVATION SUMMARY
Medline's 'B+'/Stable Long-Term IDR reflects its credible
deleveraging path and strong position in the large and stable
market for medical/surgical products. The company has established a
wide array of branded products for sale to acute care, non-acute
care, physician office and surgery center markets. The company's
vertical integration of manufacturing capabilities, distribution
network and global sourcing relationships differentiates Medline
from its principal competition: Cardinal Health, Inc. (CAH;
BBB/Positive), Owens & Minor, Inc. (OMI; BB-/Stable) and McKesson
Corporation (MCK; A-/Stable).
Private label products comprise a majority of Medline's gross
profits compared with significantly lower amounts for CAH and OMI.
The company's revenues from the distribution of medical-surgical
products and EBITDA margins are significantly higher than other
distributors revenue from such products. Fitch believes this is
because of Medline's successful prime relationship strategy leading
to the sale of its branded products. Fitch believes that private
label products offer higher margins, albeit at lower price points.
The IDRs of Mozart Holdings, LP and Medline Borrower, LP are rated
on a consolidated basis as discussed in Fitch's Parent-Subsidiary
Linkage Criteria using the weak parent/strong subsidiary approach,
open access and control factors based on the entities operating as
a single enterprise with strong legal and operational ties.
KEY ASSUMPTIONS
- Revenue increases at a CAGR of approximately 5%-6% over the
period 2024-2027 (the forecast period);
- Adjusted EBITDA margins are maintained around 11.5% to 12% over
the forecast period;
- Working capital changes represent a use of cash of approximately
$200 million-$300 million for the remainder of the forecast
period;
- Capex of approximately $300 million-$350 million per year;
- FCF is used principally to make "tuck-in" acquisitions; without
any material debt reduction, cash balances continue to exceed $1.0
billion;
- Fitch has assumed minimal dividend payments to sponsors;
- Secured mortgage debt of $2.2 billion is refinanced with new
first lien debt. The entities that held the real estate that
formerly secured CMBS debt will become restricted entities,
guaranteeing the new first lien debt;
- Interest expense for the next 12 months assumes SOFR between 5.0%
and 5.30%.
RECOVERY ANALYSIS
In assigning and maintaining instrument ratings for issuers with
IDRS of 'B+' and below, Fitch conducts a bespoke recovery
analysis.
For Medline, Fitch estimates an enterprise value (EV) on a
going-concern basis of approximately $12.125 billion, after a 10%
deduction for administrative claims. The EV assumption is based on
a post-reorganization EBITDA of $1.8 billion and a 7.5x multiple;
The EV estimate has been raised by 20% since Fitch's initial rating
assignment to reflect structural changes in Medline's scale and
ability to generate value, which has been primarily driven by the
increased number and value of prime vendor contracts. As a result,
Fitch believes that a restructuring of Medline's operations would
occur at a higher level of EBITDA reflecting less deterioration.
The multiple assumption has not changed.
The post-reorganization EBITDA estimate is approximately 40% lower
than Fitch's 2024 adjusted EBITDA estimate. Fitch's estimate of the
post-reorganization EBITDA is premised on an EBITDA approximating
pre-pandemic levels adjusted for new prime vendor contract
additions. This scenario assumes a significantly lower base of
revenues and, therefore, EBITDA generation.
A bankruptcy scenario could arise as a result of disruption to
third-party manufacturing services and key supplier relationships
along with decreasing prices for Medline's goods and services and
an inability to reduce its expenses in sufficient time to offset a
material adverse effect on its business. In this scenario, Fitch
expects Medline would need to reduce the size of its operations to
offset the loss of revenue.
The 7.5x multiple employed for Medline reflects acquisition
multiples of healthcare distributors and trading ranges of Mozart's
peer group (CAH, OMI, MCK), which have fluctuated generally between
6x-12x in recent years.
Instrument ratings and RRs for Medline's debt instruments are based
on Fitch's Corporates Recovery Ratings and Instruments Ratings
Criteria. The latest recovery ratings exclude Medline's CMBS debt
in its waterfall (approximately $2.2 billion) on the assumption
that such debt is refinanced with new first lien debt that is
pari-passu with existing first-lien debt.
The waterfall analysis includes secured credit facilities and notes
as follows: a cash flow revolving credit facility (assumed to be
fully drawn on $1.0 billion capacity); secured term loans
(approximately $7.8 billion USD equivalent after concession
allocation of 2% on a pro forma basis); and other secured debt
(approximately $6.5 billion on a pro forma basis). The secured debt
is expected to recover in a range of 71%-90% and, therefore, is
rated 'RR2'.
Medline's senior unsecured debt of $2.5 billion ranks below other
secured debt and is estimated to have a recovery in a range of
0%-10%; therefore, it is rated 'RR6'. Fitch has assumed 2% of the
recovery value available to senior creditors is allocated to the
senior unsecured debt.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Expectation of sustaining EBITDA leverage at or below 5.0x;
- FCF is applied to the reduction of debt over the next three
years;
- Operational strength demonstrated by customer retention and
market share growth leading to increasing CFO;
- Expectation of FCF/debt remains consistently above 10%.
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Expectation of sustaining EBITDA leverage at or above 6.0x;
- Total revenue growth rate declines to low-to-mid-single digits as
a result of customer turnover and price concessions;
- Expectation of EBITDA margins falling below 10% and FCF/debt
remaining consistently below 5%.
LIQUIDITY AND DEBT STRUCTURE
Strong Liquidity: Fitch expects that Medline's cash flow from
operations together with its revolving credit facilities will be
more than sufficient to fund its long-term and short-term capital
expenditures, working capital and debt service requirements. The
company's revolving credit facility has a financial covenant that
provides ample room to borrow in the event of liquidity stress.
Medline maintains sizeable cash balances, which are well in excess
of its cash needs and are kept to pursue acquisition opportunities.
As a result, Medline is in a position to either reduce debt or
potentially acquire other businesses. Interest coverage (operating
EBITDA/interest paid) is expected to remain above 3.0x for FYs
2024-2027.
Debt Maturities: Following the refinancing of the CMBS debt,
Medline will have minimal requirements for debt reduction until
2028 other than amortization of term loans, which is expected to be
modest relative to FCF.
ISSUER PROFILE
Medline, headquartered in Northfield, Illinois, is the nation's
largest supplier of med-surg products to healthcare providers
across the continuum of care. It is vertically integrated,
combining manufacturing, sales and distribution capabilities at
scale to provide med-surg products consumed by the healthcare
industry every day.
SUMMARY OF FINANCIAL ADJUSTMENTS
Fitch adjusted reported EBITDA to remove non-recurring costs,
inventory normalization adjustments and non-operating
income/expenses. In addition, for the historical periods, Fitch's
leverage metrics include CMBS debt, which is expected to be
refinanced.
MACROECONOMIC ASSUMPTIONS AND SECTOR FORECASTS
Fitch's latest quarterly Global Corporates Macro and Sector
Forecasts data file which aggregates key data points used in its
credit analysis. Fitch's macroeconomic forecasts, commodity price
assumptions, default rate forecasts, sector key performance
indicators and sector-level forecasts are among the data items
included.
ESG CONSIDERATIONS
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Recovery Prior
----------- ------ -------- -----
Medline Co-Issuer,
Inc.
senior unsecured LT B- Affirmed RR6 B-
senior secured LT BB Upgrade RR2 BB-
Mozart Holdings, LP LT IDR B+ Affirmed B+
Medline Borrower, LP LT IDR B+ Affirmed B+
senior secured LT BB(EXP)Expected Rating RR2
senior unsecured LT B- Affirmed RR6 B-
senior secured LT BB Upgrade RR2 BB-
MICCARTAR LAND: Voluntary Chapter 11 Case Summary
-------------------------------------------------
Debtor: Miccartar Land Development Company, LLC
23 Euclid Street
Woodbury NJ 08096
Business Description: Miccartar Land is engaged in activities
related to real estate.
Chapter 11 Petition Date: June 5, 2024
Court: United States Bankruptcy Court
District of New Jersey
Case No.: 2415717
Debtor's Counsel: Jerrold D. Colton, Esq.
LAW OFFICES OF JERROLD D. COLTON
2200 Benjamin Franklin Parkway, Unit N1105
Philadelphia, PA 19130
Tel: (609) 841-0700
Email: jc.cssports@gmail.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Mark A. Vittese as manager.
The Debtor filed an empty list of its 20 largest unsecured
creditors.
https://www.pacermonitor.com/view/L7QWYYY/Miccartar_Land_Development_Company__njbke-24-15717__0002.9.pdf?mcid=tGE4TAMA
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/JCDMWPQ/Miccartar_Land_Development_Company__njbke-24-15717__0001.0.pdf?mcid=tGE4TAMA
MIST HOLDINGS: Seeks to Extend Plan Exclusivity to August 12
------------------------------------------------------------
Mist Holdings, Inc., and affiliates asked the U.S. Bankruptcy Court
for the District of Delaware to extend their exclusivity periods to
file a plan of reorganization and obtain acceptance thereof to
August 12 and October 11, 2024, respectively.
Headquartered in Irvine, California, Sientra is a surgical
aesthetics company focused on empowering people to change their
lives through increased self-confidence and self-respect.
The Debtors claim that the chapter 11 cases involve four public
company Debtor-affiliate entities that had approximately $82.0
million in funded-debt obligations as of the Petition Date. The
Debtors have a wide variety of parties in interest, from various
vendors and contractual and litigation counterparties to local,
state, and federal agencies.
Furthermore, the Debtors entered these cases with the goal of
selling substantially all of their assets through a sale process.
The Debtors successfully achieved this goal and are now in the
process of soliciting votes on their plan and working toward
confirmation of such plan. Given the public nature of the Debtors'
operations and the number of significant assets, this transition is
complex.
The Debtors commenced these chapter 11 cases with limited liquidity
and achieved approval and consummation of the Sale Transactions in
three months. The Debtors moved expeditiously through these chapter
11 cases, most notably consummating two value-maximizing Sale
Transactions, entering into the Committee Settlement with the
Committee, the Prepetition First Lien Secured Lenders, and the DIP
Lenders, and filing the Amended Combined Plan and Disclosure
Statement. The Debtors' substantial progress administering these
chapter 11 cases weighs in favor of an extension of the Exclusivity
Periods.
The Debtors explain that they have accomplished a great deal,
including entering into the Committee Settlement, closing the Tiger
Sale and the Nuance Sale, and filing the Amended Combined Plan and
Disclosure Statement, all while the Debtors continue to work
diligently with all stakeholders to ensure widespread support of
the Amended Combined Plan and Disclosure Statement during this
short time. Additionally, the fact that this is the Debtors' first
request for an extension, and will likely be the Debtors' only
request, further supports granting the requested extension.
The Debtors assert that they are not seeking an extension of the
Exclusivity Periods to pressure or prejudice any of their
stakeholders. The Debtors have been diligently moving these chapter
11 cases forward and the request to extend the Exclusivity Periods
is being made in an abundance of caution. Thus, the Debtors'
request for an extension to the Exclusivity Periods is not
requested for the impermissible purpose of pressuring creditors to
agree to a plan of reorganization. Accordingly, the relief
requested herein is without prejudice to the Debtors' creditors and
will benefit the Debtors' estates, their creditors, and all other
key parties in interest.
Co-Counsel to the Debtors:
PACHULSKI STANG ZIEHL & JONES LLP
Laura Davis Jones, Esq.
David M. Bertenthal, Esq.
Timothy P. Cairns, Esq.
919 North Market Street, 17th Floor
P.O. Box 8705
Wilmington, Delaware 19899-8705 (Courier 19801)
Telephone: 302-652-4100
Facsimile: 302-652-4400
Email: ljones@pszjlaw.com
dbertenthal@pszjlaw.com
tcairns@pszjlaw.com
-and-
Joshua A. Sussberg, P.C.
Nicole L. Greenblatt, P.C.
Elizabeth H. Jones
KIRKLAND & ELLIS LLP
KIRKLAND & ELLIS INTERNATIONAL LLP
601 Lexington Avenue
New York, New York 10022
Telephone: (212) 446-4800
Facsimile: (212) 446-4900
Email: joshua.sussberg@kirkland.com
nicole.greenblatt@kirkland.com
elizabeth.jones@kirkland.com
About Mist Holdings
Mist Holdings, Inc. sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Del. Case No. 24-10245) on February 12,
2024, with $100,000,001 to $500 million in assets and liabilities.
Judge John T. Dorsey presides over the case.
Laura Davis Jones at Pachulski, Stang, Ziehl & Jones LLP represents
the Debtor as legal counsel.
MMA LAW FIRM: Court OKs Cash Collateral Access Thru July 31
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Texas,
Houston Division, authorized MMA Law Firm, PLLC to use cash
collateral, on an interim basis, in accordance with the budget,
with a 10% variance, through July 31, 2024.
Pursuant to 11 U.S.C. Section 507(b), in the event the value of
Equal Access Justice Fund, LP and EAJF ESQ Fund, LP's prepetition
collateral diminishes during the proceeding, they will be entitled
to the benefits of 11 U.S.C. Section 507(b). Secured Creditors will
be granted, only to the extent of their actual prepetition
perfected security interest and to the extent of any diminution of
their prepetition cash collateral as a result of such use of cash
collateral, without any further action, continuing, valid, binding,
enforceable, fully perfected, replacement liens of a kind described
in the loan documents of the Secured Creditors, and the proceeds
and products thereof, but excluding any causes of action that could
be brought under 11 U.S.C. Sections 544-548 or any applicable state
fraudulent transfer statute or similar statute including any
proceeds thereof.
The Adequate Protection Liens will be granted only to the extent
the prepetition liens of the Secured Creditors are valid,
enforceable, non-avoidable liens and security interests that were
perfected prior to the Petition Date, which are not subject to
avoidance, reduction, disallowance, impairment, or subordination
pursuant to the Bankruptcy Code or applicable non-bankruptcy law.
An electronic hearing on the matter is set for July 30 at 9 a.m.
A copy of the order is available at https://urlcurt.com/u?l=s9vyvO
from PacerMonitor.com.
About MMA Law Firm
MMA Law Firm PLLC is a law firm specializing in insurance claim
management, negotiation, and litigation.
MMA Law Firm PLLC sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Tex. Case No. 24-31596) on April 9,
2024. In the petition signed by Zach Moseley, as managing member,
the Debtor estimated assets between $100 million and $500 million
and estimated liabilities between $10 million and $50 million.
The Honorable Bankruptcy Judge Eduardo V. Rodriguez oversees the
case.
The Debtor is represented by Johnie Patterson, Esq. at Walker &
Patterson, P.C.
MRRC HOLD CO: Rubio's Case Summary & 30 Top Unsecured Creditors
---------------------------------------------------------------
Three affiliates that concurrently filed voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code:
Debtor Case No.
------ --------
MRRC Hold Co. (Lead Case) 24-11164
Rubio's Coastal Grill
Rubio's Fresh Mexican Grill
Rubio's
2200 Faraday Avenue, Suite 250
Carlsbad, CA 92008
Rubio's Restaurants, Inc. 24-11165
Rubio's Incentives, LLC 24-11166
Business Description: MRRC Hold Co. d/b/a Rubio's is a Mexican
restaurant chain specializing in fish tacos.
Rubio's has locations across California,
Arizona and Nevada.
Chapter 11 Petition Date: June 5, 2024
Court: United States Bankruptcy Court
District of Delaware
Judge: Hon. Craig T. Goldblatt
Debtors'
Delaware
Bankruptcy
Counsel: Thomas J. Francella, Jr., Esq.
WHITEFORD, TAYLOR & PRESTON LLC
600 North King Street, Suite 300
Wilmington, DE 19801
Tel: (302) 353-4144
Email: tfrancella@whitefordlaw.com
Debtors'
General
Bankruptcy
Counsel: RAINES FELDMAN LITTRELL LLP
Debtors'
CRO Provider: FORCE TEN PARTNERS LLC
Debtors'
Investment
Banker: HILCO CORPORATE FINANCE, LLC
Debtors'
Real Estate
Consultant &
Advisor: HILCO REAL ESTATE, LLC
Debtors'
Claims &
Noticing
Agent: BANKRUPTCY MANAGEMENT SOLUTIONS, INC.
D/B/A STRETTO
Lead Debtor's
Estimated Assets: $10 million to $50 million
Lead Debtor's
Estimated Liabilities: $100 million to $500 million
The petition was signed by Nicholas D. Rubin as chief restructuring
officer.
Full-text copies of the petitions are available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/3HCPYGY/MRRC_Hold_Co__debke-24-11164__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/3BOGPNI/Rubios_Restaurants_Inc__debke-24-11165__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/IV6VFGQ/Rubios_Incentives_LLC__debke-24-11166__0001.0.pdf?mcid=tGE4TAMA
Consolidated List of Debtors' 30 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
1. TREW Capital Management Private Funded Debt $27,864,233
Credit LLC
235 Walnut St.
Libertyville, IL 60048
Attn: Jeff Crivello
Phone: 847-651-22774
Email: jeffcrivello@gmail.com
2. Southwest Traders Incorporation Trade Claim $2,769,025
27565 Diaz Road
Temecula, CA 9259
Attn: Legal Department
Phone: 951-676-2559
Email: post@southwesttraders.com
3. California Department of Tax Sales Tax $1,481,019
and Fee Administration
May Lee State Office Complex, 651
Bannon Street, Suite 100
Sacramento, CA 95811-0299
Attn: Legal Department
Phone: 916-227-6700
Email: SacramentoInquiries@cdtfa.ca.gov
4. Arizona Department of Revenue Sales Tax $258,503
1600 West Monroe Street
Phoeniz, AZ 85007
Attn: Legal Department
Phone: 602-716-7806
Email: elienunit@azdor.gov
5. San Diego Gas & Electric Trade Claim $231,154
8330 Century Park Court
San Diego, CA 92123-1530
Attn: Legal Department
Phone: 619-654-8720
6. OLO Trade Claim $209,124
99 Hudson Street, Floor 10
New York, NY 10013
Attn: Legal Department
Phone: 212-260-0895
7. Ecolab Inc., and/or Trade Claim $178,317
Ecolab USA Inc.
1 Ecolab Place
St. Paul, MN 55102-2739
Attn: Legal Department
Phone: 800-352-5326; 800-288-0879
8. Freehold Chandler Trust LLC Rent $126,963
401 Wilshire Blvd
Suite 700
Santa Monica, CA 90401
Attn: The Macerich Company
Phone: 602-953-6200; 310-394-6000
9. Southern California Edison Trade Claim $126,790
2244 Walnut Grove Ave
Rosemead, CA 91771-0001
Attn: Legal Department
Phone: 714-835-5200 Ext. 000
10. Dayforce US, Inc. Trade Claim $118,121
3311 E Old Shakopee Road
Minneapolis, MN 55425-1640
Attn: Legal Department
Phone: 866-376-5942; 952-853-8100
11. Direct Energy Marketing Inc. Trade Claim $95,552
12 Greenway Plaza
Suite 1250
Houston, TX 77046
Attn: Legal Department
Phone: 732-516-3247
Email: news@directenergy.com
12. Propaganda, Inc. Trade Claim $80,000
3636 S. Geyer Rd, Ste 100
St Louis, MO 63127
Attn: Legal Department
Phone: 314-664-8516
Email: info@propaganda-inc.com
13. DTL-SGW, LLC Rent $77,514
7669 E. Pinnacle Peak Rd
Ste 250
Scottsdale, CA 85255-3222
Attn: Legal Department
14. Associated Students UCLA Rent $76,190
308 Westwood Plaza
Los Angeles, CA 90095
Attn: Alexia Montibon ASUCLA A/R
Email: talk2us@asucla.ucla.edu
15. Jackson Lewis PC Professional $74,937
1133 Westchester Ave Services
Suite S125
West Harrison, NY 10604
Attn: Legal Department
Phone: 914-872-6767
16. San Diego County Treasurer- Property Tax $74,547
Tax Collector
San Diego County Administration Center
1600 Pacific Hwy, Room 162
San Diego, CA 92101-2474
Attn: Dan McAllister
Phone: 877-829-4732
Email: taxman@sdcounty.ca.gov
17. Global Retail Investors, LLC Rent $73,503
7200 Wisconsin Ave, Suite 600
Bethesda, MD 20814
Attn: Legal Department
Phone: 916-286-5230
Email: info@firstwash.com
18. Service Management Group, LLC Trade Claim $72,575
4049 Pennsylvania Ave
Suite 203, PMB 1063
Kansas City, MO 64111
Attn: Legal Department
Phone: 816-448-4500
19. Brokaw Ventures II LLC Rent $70,849
Attn: David B Dollinger; Tia Fisher
555 Twin Dolphin Drive, Suite 600
Redwood City, CA 94065
c/o Dollinger Properties
Phone: 650-508-8666; 408-660-7680
Email: tia@dollingerproperties.com
20. The Southern California Trade Claim $68,831
Gas Company
1801 S Atlantic Blvd
Monterey Park, CA 91754
Attn: Legal Department
Phone: 800-427-2000 Ext. 000
21. Punchh Inc Trade Claim $68,579
1875 S Grant St
#810
San Mateo, CA 94402
Attn: Legal Department
Phone: 800-448-6505 Ext. 5000
Email: contact@punchh.com
22. Edward Don & Company Trade Claim $66,610
Holdings, LLC
9801 Adam Don Pkwy
Woodridge, IL 60517
Attn: Legal Department
Phone: 800-777-4366
23. Direct Energy Business, LLC (ELEC) Trade Claim $62,566
1001 Liberty Avenue
Pittsburgh, PA 15222
Attn: Legal Department
Phone: 888-925-9115
Email: news@directenergy.com
24. Willis Towers Watson Midwest, Inc Trade Claim $62,387
233 South Wacker Drive, Suite 1800
Chicago, IL 60606
Attn: Legal Department
Phone: 312-288-7700
Email: midwestlicensing@wtwco.com
25. Prudential Overall Supply Trade Claim $55,992
2485 Ash Street
Vista, CA 92081
Attn: Legal Department
Phone: 760-727-7163
26. Aztec Shops, Ltd Rent $55,665
San Diego State University
SDSU - ACCT. # 981783
San Diego, CA 92182-1701
Attn: Financial Services Dept.
Phone: 619-594-7590
27. Alliance Refrigeration, Inc. Trade Claim $54,035
3619 N 35th Ave
Phoenix, AZ 85017
Attn: Legal Department
Phone: 602-484-4519
Email: Scott@therefrigerationalliance.com
28. Roseville PH LLC Rent $53,666
530 B Street
Ste 2050
San Diego, CA 92101
Attn: Legal Department
Phone: 916-920-5555
Email: administrator@rosevillehc.com
29. Capital Village 2022, LLC Rent $53,448
146 North Highland Avenue
Los Angeles, CA 90036
Attn: Moisce Belinow
30. Star-West Parkway Mall, LP Rent $53,414
1 E Wacker Drive Ste 3700
Chicago, IL 60601
Attn: Legal Department
Phone: 312-265-7024
NATIONAL RIFLE: Former CFO Reaches Deal With NY AG Prior Trial
--------------------------------------------------------------
The National Rifle Association's former chief financial officer has
reached a settlement with the New York attorney general's office
ahead of the second phase of a trial over claims the group and its
executives misused donor money, among other alleged misconduct.
Following a multiyear investigation and a six-week long trial,
former CFO Wilson Phillips reached a settlement with NYAG Letitia
James. Details of the settlement have not been made public.
About National Rifle Association
Founded in 1871 in New York, the National Rifle Association of
America is a gun rights advocacy group. The NRA claims to be the
longest-standing civil rights organization and has more than five
million members.
Seeking to move its domicile and principal place of business to
Texas amid lawsuits in New York, the National Rifle Association of
America sought Chapter 11 protection (Bankr. N.D. Tex. Case No.
21-30085) on Jan. 15, 2021. Affiliate Sea Girt LLC simultaneously
sought Chapter 11 protection (Case No. 21-30080).
The NRA was estimated to have assets and liabilities of $100
million to $500 million as of the bankruptcy filing.
Judge Harlin Dewayne Hale oversees the cases.
The Debtors tapped Neligan LLP and Garman Turner Gordon LLP as
their bankruptcy counsel, and Brewer, Attorneys & Counselors as
their special counsel.
The U.S. Trustee for Region 6 appointed an official committee of
unsecured creditors on Feb. 4, 2021. Norton Rose Fulbright US, LLP
and AlixPartners, LLP serve as the committee's legal counsel and
financial advisor, respectively.
* * *
Following a 12-day trial, U.S. Bankruptcy Judge Harlin D. Hale
dismissed the National Rifle Association's Chapter 11 case Tuesday,
May 11, 2021, after finding the group filed its petition in bad
faith in order to gain advantage in litigation brought by New
York's attorney general. New York Attorney General Letitia James
sought the dismissal of the case. The judge condemned the NRA's
attempts to avoid accountability, making clear that the
organization's actions were "not an appropriate use of
bankruptcy."
NB PARK: Seeks Court Nod to Transfer Interest in Provo Property
---------------------------------------------------------------
NB Park Plaza Provo, LLC asked the U.S. Bankruptcy Court for the
District of Utah to approve the transfer of the bankruptcy estate's
interest in a real property located at 910 North 900 East, Provo,
Utah.
The company's bankruptcy estate includes a 29% "Tenant in Common"
interest in the property.
NB Park intends to transfer the estate's interest to a related
non-debtor entity, which will hold an undivided, 100% interest in
the property following the transfer.
In exchange for the transfer of the estate's interest, Genesis
Lending, LLC will loan $5.95 million to the non-debtor entity.
After payment of closing costs and taxes, the remaining loan
proceeds will be used to pay in full claims of secured creditors,
including Robert Colby Keddington, Robert Harms, and Dave Wisdom.
The property is encumbered by a trust deed in favor of the secured
creditors, which secures an obligation in the approximate amount of
$5.68 million as of May 15.
"The Genesis transaction does not require [NB Park] to repay the
loan to be advanced by Genesis. Rather, the transferee entity will
be obligated to make the loan payments," Jeffrey Trousdale, Esq.,
the company's attorney, said in a motion filed in court.
The motion is on the court's calendar for June 18.
About NB Park Plaza Provo
NB Park Plaza Provo, LLC is a single asset real estate (as defined
in 11 U.S.C. Section 101(51B)).
NB Park Plaza Provo filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. D. Utah Case No.
24-20568) on Feb. 13, 2024, with $1 million to $10 million in both
assets and liabilities. The petition was signed by Tanya Muro,
manager of Nelson Brothers Professional Real Estate, LLC.
George B. Hofman, Esq., at Cohne Kinghorn, P.C. and Skinner Fouch &
Olson, LLP serve as the Debtor's legal counsel and tax accountant,
respectively.
NEVER SLIP: Court OKs Sale of Assets to SFC Acquisition
-------------------------------------------------------
Never Slip Holdings, Inc. and its affiliates got the green light
from a U.S. bankruptcy judge to sell some of their assets to SFC
Acquisition Co., LLC.
Judge Laurie Selber Silverstein of the U.S. Bankruptcy Court for
the District of Delaware approved the stalking horse purchase
agreement between the companies and SFC, which offered $290 million
for the assets.
The purchase price consists of, among other things, a credit bid
equal to the outstanding obligations under the debtor-in-possession
loan, and the outstanding obligations under a pre-bankruptcy
financing agreement in an amount equal to $200 million; and the
assumption by SFC of certain liabilities of the sellers.
SFC's stalking horse bid was designated as the winning bid after
the companies did not receive qualified bids before the May 17
deadline and after cancellation of the May 21 auction.
All proceeds from the sale will be remitted to the companies,
subject to the terms of the court orders approving
debtor-in-possession financing.
About Never Slip Holdings
Never Slip Holdings, Inc. and affiliates, including affiliates
Shoes for Crews, Inc., SHO Holding I Corporation, SHO Holding II
Corporation, SFC Canada, Inc., and Sunrise Enterprises, LLC, are
the category creator of slip resistant footwear and other safety
products for employers, employees, and individual consumers.
The Debtors sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Del. Lead Case No. 24-10663) on April 1,
2024. In the petition signed by Christopher Simm, chief financial
officer, Never Slip Holdings disclosed up to $500 million in assets
and up to $1 billion in liabilities.
Judge Laurie Selber Silverstein oversees the case.
The Debtors tapped Ropes & Gray LLP as general bankruptcy counsel;
Chipman Brown Cicero & Cole, LLP as co-bankruptcy counsel; Solomon
Partners Securities, LLC as investment banker; Berkeley Research
Group, LLC as financial advisor; Omni Agent Solutions, Inc. as
claims agent, and C Street Advisory Group, LLC as strategic
communications advisor.
NEWRUE 21: Intends to Close All Its Stores in Chapter 11
--------------------------------------------------------
Fallon Howard of WALB10 News reports that Rue 21, a popular teen
retail store, has filed for bankruptcy and plans to close all 540
stores. Here in Albany, the store recently closed a month ago,
leaving residents with few options for shopping.
If you are walking in the Albany Mall, you might notice a huge
storefront that used to be Rue 21, a popular teen boutique. Now,
officials have stated that most stores will be closing due to
bankruptcy.
According to documents, The Warrendale, Pennsylvania-based retailer
filed for bankruptcy in 2003 and again in 2017 — which led to
massive downsizing. At its peak a decade ago, the store had 1,000
locations across the nation.
WALB spoke with residents in the community, and they say that they
remember when the Albany Mall used to be filled with more options
for shoppers.
"I was completely devastated by that because I love Rue 21. I do a
lot of shopping for the older grandkids, like the teenage
grandkids. They absolutely love Rue 21. So now, I don't know what
our go-to will be," said Sonya Black, Lee County resident and
shopper.
"I used to see American Eagle, Aeropostale, and even Sears to the
right of us. It used to be a flourishing mall, and now it's
completely deserted," said Ulises Rangel, Albany native and
shopper.
WALB asked several shoppers why they feel stores in the Albany Mall
keep closing, and they said that there is a range of reasons.
"Some high-end restaurants, maybe like a Texas Roadhouse, or like
when you go to other big malls like in the bigger cities, they have
like the restaurants. So maybe some stores like that or Ruby
Tuesday because we’ve had ours to close here in Albany as well,"
said Black.
"Probably the economy, for one thing, and then a lot of people shop
online. That's me; I hardly ever go in and out of stores. I'm an
online shopper," said Carrie Green, Albany native and shopper.
Several shoppers in the Albany community say that there aren't many
options, but they are looking at alternatives and even online
shopping.
"Don't be sad they are closing; just keep going because there are
different places that have clothing," said Kaitlynn McCray, a
shopper.
"Belks is always a good choice, and I hated when Sears closed. And
I frequent JCPenney a lot," said Black.
About rue21 Inc.
New rue21 Holdco, Inc. is a specialty fashion destination that
offers comfortable, trendy, and practical apparel and accessories
for all genders. With locations across the United States, rue21 is
well known for promoting the latest trends at an affordable price
that does not require its customers to sacrifice style for
savings.
New rue21 Holdcoand its affiliates sought protection under Chapter
11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case No.
24-10939) on May 2, 2024. In the petition signed by Michele Pascoe
as interim chief executive officer, New rue21 Holdcoand disclosed
up to $100 million to $500 million in both assets and liabilities.
Hon. Brendan Linehan Shannon oversees the cases.
The Debtors tapped Willkie Farr & Gallagher, LLP as general
bankruptcy counsel; Young Conaway Stargatt & Taylor, LLP as
Delaware bankruptcy counsel; Riveron Consulting, LLC as
restructuring advisor; and Kroll Restructuring Administration, LLC
as notice, claims, solicitation and balloting agent.
The U.S. Trustee for Region 3 appointed an official committee to
represent unsecured creditors in the Debtors' Chapter 11 cases.
Lowenstein Sandler, LLP and Dundon Advisers, LLC serve as the
committee's legal counsel and financial advisor, respectively.
NEXTDECADE CORP: All Four Proposals Approved at Annual Meeting
--------------------------------------------------------------
NextDecade Corporation reported in a Form 8-K filed with the
Securities and Exchange Commission that on June 3, 2024, the
Company held its 2024 Annual Meeting of Stockholders at which the
stockholders:
(1) elected four Class A directors namely: Matthew Schatzman,
Thibaud de Preval, Avinash Kripalani, William Vrattos to
serve on the Company's board of directors for terms until
the
2027 Annual Meeting of Stockholders or until their
successors
are duly elected and qualified or until the earlier of their
death, resignation or removal and Timothy Wyatt as Class B
director to serve on the Company's board of directors for a
term until the 2025 Annual Meeting of Stockholders or until
the earlier of his death, resignation or removal;
(2) approved an amendment to the NextDecade Corporation 2017
Omnibus Incentive Plan to increase the maximum number of
shares available under such plan;
(3) approved, on an advisory basis, the compensation of the
Company's named executive officers; and
(4) ratified the appointment of KPMG LLP as the Company's
independent registered public accountants and auditors for
the fiscal year ending Dec. 31, 2024.
About NextDecade Corporation
NextDecade Corporation, a Delaware corporation, is a Houston-based
energy company primarily engaged in construction and development
activities related to the liquefaction of natural gas and sale of
LNG and the capture and storage of CO2 emissions. The Company is
constructing and developing a natural gas liquefaction and export
facility located in the Rio Grande Valley in Brownsville, Texas,
which currently has three liquefaction trains and related
infrastructure under construction.
Houston, Texas-based Grant Thornton LLP, the Company's auditor
since 2018, issued a "going concern" qualification in its report
dated March 11, 2024, citing that the Company has incurred
operating losses since its inception and management expects
operating losses and negative cash flows to continue for the
foreseeable future. These conditions, along with other matters,
raise substantial doubt about the Company's ability to continue as
a going concern.
NIDA PROPERTY: Voluntary Chapter 11 Case Summary
------------------------------------------------
Debtor: Nida Property Inc.
181 Bay 26 Street, Apt #1F
Brooklyn, NY 11214
Chapter 11 Petition Date: June 5, 2024
Court: United States Bankruptcy Court
Eastern District of New York
Case No.: 24-42408
Judge: Hon. Jil Mazer-Marino
Debtor's Counsel: Bark Cardenas, Esq.
CARDENAS ISLAM & ASSOCIATES, PLLC
17561 Hillside Ave
Jamaica, NY 11432-5768
Email: barak@cardenasislam.com
Estimated Assets: $0 to $50,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Waqas Ahmad as authorized representative
of the Debtor.
The Debtor failed to attach 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/AI254KA/Nida_Property_Inc__nyebke-24-42408__0001.0.pdf?mcid=tGE4TAMA
NITRO FLUIDS: Cokinos Young Represents Cummins & Proppant
---------------------------------------------------------
The law firm of Cokinos Young, PLLC filed a verified statement
pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure
to disclose that in the Chapter 11 cases of Nitro Fluids, LLC and
its affiliates, the firm represents:
1. Cummins Welding, LLC (creditor with a claim amount of $580,139
for unpaid labor and materials)
and
2. Proppant Express Solutions, LLC (creditor with a claim amount of
$990,940 for unpaid labor and
materials).
Cokinos represented each of the clients individually and they do
not constitute a committee of any kind. Each of the parties has
consented to multiple representation by Cokinos.
Counsel for Creditors Cummins Welding and Proppant Express:
Reagan H. "Tres" Gibbs, III, Esq.
COKINOS | YOUNG
Four Houston Center
1221 Lamar Street, 16th Floor
Houston, Texas 77010-3039
Tel.: (713) 535-5500
Fax: (713) 535-5533
Email: tgibbs@cokinoslaw.com
About Nitro Fluids, LLC
Nitro Fluids, LLC filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. S.D. tex. Case No.
24-60018) on May 15, 2024, listing $50 million to $100 million in
both assets and liabilities. The petition was signed by Brad Walker
as chief restructuring officer.
Judge Christopher M. Lopez presides over the case.
Eric Thomas Haitz, Esq. at Bonds Ellis Eppich Schafer Jones LLP
represents the Debtor as counsel.
NORTH GEORGIA NURSING: Wins Cash Collateral Access on Final Basis
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Georgia,
Gainesville Division, authorized North Georgia Nursing Academy, LLC
to use cash collateral, on a final basis, in accordance with the
budget.
The United States Small Business Administration and Susquehanna
Capital Management, LLC assert an interest in the Debtor's cash
collateral.
After the entry of an Interim Consent Order Permitting the Use of
Cash Collateral, Granting Replacement Lien and Setting Final
Hearing, on May 10, 2024, creditor SCM asserted a security interest
in all assets of the Debtor. SCM's security interest in all assets
is based on various security agreements by and between the Debtor
and Truist Bank, formerly known as Branch Banking and Trust
Company, as successor by merger SunTrust Bank, as evidenced by the
UCC Financing Statement No. 069-2018-000451, filed on March 5,
2018, in the Hall County, Georgia, records, as continued by that
certain UCC Financing Statement Amendment No. 069-2022-001867,
filed on September 15, 2022, Hall County, Georgia records, as
further modified by the UCC Financing Statement Amendment No.
069-2022-001980, filed on September 19, 2022, Hall County, Georgia
records. SCM is the successor by assignment to Truist Bank.
As adequate protection for the Secured Parties' interests in cash
collateral, the Secured Parties are granted valid, attached,
choate, enforceable, perfected, and continuing security interests
in, and liens upon all post-petition assets of the Debtor of the
same character and type, to the same nature, extent, and validity
as the items and encumbrances of the Secured Parties attached to
the Debtors' assets pre-petition.
Commencing on June 1, 2024, and continuing until an order is
entered confirming the Debtor's plan, the Debtor will make monthly
payments to SBA in the total amount of $3,667, such payments
constituting additional adequate protection of SBA's interest in
the assets collateralizing its claims.
Commencing on June 5, 2024, and continuing until an order is
entered confirming the Debtor's plan, the Debtor will make the
below monthly payments to SCM with such payments constituting
additional adequate protection of SCM's interest in the assets
collateralizing its claims:
*0192 -- P&I Payment $7,361
*0193 -– P&I Payment $7,127
*0194 -- P&I Payment $1,351
The Secured Parties will hold allowed administrative claims under
11 U.S.C. section 507(b) with respect to the adequate protection
obligations of the Debtor to the extent that the replacement liens
on Post-Petition Collateral do not adequately protect the
diminution in value of the interests of Secured Parties in their
prepetition collateral. Such administrative claims will be junior
and subordinate only to any superpriority claim of the kind ordered
by the Court and specified in 11 U.S.C. Section 364. The
administrative claims will be payable from and have recourse to all
prepetition and post-petition property of the Debtor and all
proceeds thereof.
A copy of the order is available at https://urlcurt.com/u?l=ykluIz
from PacerMonitor.com.
About North Georgia Nursing Academy, LLC
North Georgia Nursing Academy, LLC is a nursing school that
provides students with the knowledge and technical training
required for a career in the medical field.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Ga. Case No. 24-20527) on May 6, 2024.
In the petition signed by April Kidd, director and sole member, the
Debtor disclosed $4,853,000 in assets and $2,646,720 in
liabilities.
Judge James R. Sacca oversees the case.
Douglas Jacobson, Esq., at Law Offices of Douglas Jacobson, LLC,
represents the Debtor as legal counsel.
NORWOOD RESTAURANTS: Case Summary & 13 Unsecured Creditors
----------------------------------------------------------
Debtor: Norwood Restaurants, LLC.
5224 N Ocean Shore Blvd
Palm Coast, FL 32137
Chapter 11 Petition Date: June 6, 2024
Court: United States Bankruptcy Court
Middle District of Florida
Case No.: 24-01625
Judge: Hon. Jacob A. Brown
Debtor's Counsel: Scott W. Spradley, Esq.
THE LAW OFFICES OF SCOTT W. SPRADLEY
P.O. Box 1
301 S. Central Avenue
Flagler Beach, FL 32136
Tel: 386-693-4935
Email: scott@flaglerbeachlaw.com
Estimated Assets: $0 to $50,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Wesley D. Norwood as manager.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 13 unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/JL35DYY/Norwood_Restaurants_LLC__flmbke-24-01625__0001.0.pdf?mcid=tGE4TAMA
NXT ENERGY: MCAPM LP Acquires US$2 Million Convertible Debenture
----------------------------------------------------------------
NXT Energy Solutions Inc. announced it has issued convertible
debentures to MCAPM LP for the principal amount of US$2,000,000,
being approximately C$2,680,000, pursuant to the terms of a
subscription agreement. The Debentures bear interest at 10.0% per
annum and are due and payable in full on May 31, 2026. The
Debentures are convertible into common shares in the capital of NXT
at a conversion price of US$0.25 (CDN$0.3412) per Common Share
which provides MCAPM, LP with the right to obtain an additional
8,000,000 Common Shares. However, due to the current shareholdings
of MCAPM, LP, together with Michael P. Mork (collectively, "Mork
Capital") in NXT, no conversion of the Debentures can occur until
shareholder approval of NXT's shareholders is obtained. Mork
Capital currently own an aggregate of 14,921,233 Common Shares,
representing 19.1% of the currently issued and outstanding Common
Shares of NXT. With the acquisition of the Debentures, Mork
Capital will have the right to own, after conversion of the
Debentures, 30,526,321 Common Shares, representing approximately
28.1% of the issued and outstanding Common Shares (after giving
effect to the conversion of the full amount of Debentures). NXT
has agreed to nominate a representative from Mork Capital for
appointment to its board of directors. Mork Capital is nominating
Peter Mork for appointment to NXT's board of directors at NXT's
annual general meeting scheduled to be held on July 15, 2024.
About NXT Energy
NXT Energy Solutions Inc. is a Calgary-based technology company
whose proprietary SFD survey system utilizes quantum-scale sensors
to detect gravity field perturbations in an airborne survey method
which can be used both onshore and offshore to remotely identify
areas with exploration potential for traps and reservoirs. The SFD
survey system enables the Company's clients to focus their
hydrocarbon exploration decisions concerning land commitments, data
acquisition expenditures and prospect prioritization on areas with
the greatest potential. SFD is environmentally friendly and
unaffected by ground security issues or difficult terrain and is
the registered trademark of NXT Energy Solutions Inc. NXT Energy
Solutions provides its clients with an effective and reliable
method to reduce time, costs, and risks related to exploration.
Calgary, Canada-based MNP LLP, the Company's auditor since 2023,
issued a "going concern" qualification in its report dated March
27, 2024, citing that the Company's current cash position is not
expected to be sufficient to meet the Company's obligations and
planned operations for a year beyond the date of auditor's report,
unless additional financing is obtained or new revenue contracts
are completed. This raises substantial doubt about the Company's
ability to continue as a going concern.
OECONNECTION LLC: S&P Withdraws 'B-' Issuer Credit Rating
---------------------------------------------------------
S&P Global Ratings withdrew all of its ratings on OEConnection LLC
at the issuer's request. At the time of the withdrawal, S&P's
issuer credit rating on the company was 'B-', and the outlook was
stable.
ONEDIGITAL BORROWER: S&P Rates New $2.07BB 1st-Lien Term Loan 'B'
-----------------------------------------------------------------
S&P Global Ratings assigned its 'B' issue rating and '3' recovery
rating (50%-70%; rounded estimate: 50%) to OneDigital Borrower
LLC's proposed $2.07 billion first-lien term loan due 2031. We also
assigned its 'CCC+' issue rating and '6' recovery rating (0%) to
the company's proposed $375 million second-lien term loan due
2032.
S&P said, "We expect the company will use the proceeds to refinance
its existing $2.1 billion term loan due 2027 and to fund
acquisitions and earnout payments. Through May 2024, OneDigital has
closed on at least nine deals totaling more than $40 million of
acquired revenue, and the company maintains a healthy pipeline of
near-term opportunities.
"Pro forma for this transaction and including deals under letters
of intent (which are expected to close by early August), we
estimate leverage of around 7.5x and coverage in the mid-1x range.
While credit metrics are strained relative to current rating
thresholds, we expect these to improve to within rating bounds
(leverage below 7x and coverage near 2x) over the next 12 months as
the company deploys balance-sheet cash for acquisitions and
continues to achieve steady performance gains."
OneDigital posted solid organic growth of 6% for full-year 2023 and
8% for the first quarter of 2024, driven by good retention across
its verticals and favorable results in its Medicare and retirement
and wealth management businesses. Organic growth was further
bolstered by success in the company's health, wealth, and
retirement convergence strategy.
S&P Global Ratings-adjusted EBITDA margin for the 12 months ended
March 31, 2024 was 24.4%, a decline of nearly 200 basis points from
26.3% for full-year 2023. S&P said, "While company-calculated
margins were relatively stable, OneDigital incurred a higher amount
of add-backs that we don't give credit for, including producer
training expenses and start-up costs. We expect S&P Global
Ratings-adjusted margins to stabilize over the next year as costs
related to producer buy-downs normalize and operating leverage
improves."
ORTHOCARE SOLUTIONS: Wins Cash Collateral Access Thru Aug 31
------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Maryland authorized
Orthocare Solutions, Inc. to use cash collateral on an interim
basis in accordance with the budget, through August 31, 2024.
Kapitus LLC asserts a first priority security interest in the
Pre-Petition Collateral of the Debtor and as such is entitled to
adequate protection payments from the Debtor. As set forth in its
Objection, Kapitus filed its UCC-1 Financing Statement with the
Maryland State Department of Assessments and Taxation in 2018,
which Kapitus asserts continued to operate and cover the
outstanding obligation owed to Kapitus as laid out in its Proof of
Claim #2. Kapitus asserts a claim against the Debtor in the amount
of $421,355 as stated in its proof of Claim #2 filed in the Court's
claim register. The Debtor, and all other parties reserve all right
to dispute this assertion.
The U.S. Small Business Administration asserts a secured claim
against the Debtor pursuant to a term loan promissory note, and a
UCC-1 Financing Statement filed with the Maryland State Department
of Assessments and Taxation. The U.S. Small Business Administration
asserts an unpaid balance as of the Petition Date in the amount of
approximately $215,000 pursuant to a 7A Consolidation Loan and
$500,000 pursuant to an EIDL Loan, exclusive of fees, costs and
amounts that the U.S. Small Business Administration is owed
pursuant to that certain Business Access Line of Credit Loan.
M&T Bank asserts a secured claim against the Debtor pursuant to a
term loan promissory note, and a UCC-1 Financing Statement filed
with the Maryland State Department of Assessments and Taxation. M&T
Bank asserts an unpaid balance as of the Petition Date in the
amount of approximately $53,102, exclusive of fees, costs and
amounts that M&T Bank is owed pursuant to the loan evidenced by
such term loan promissory note.
The Debtor is directed to continue to make a monthly payment in the
amount of $8,000 on or before July 15, 2024, August 15, 2024, and
May 15, 2024, to be held by counsel for the Debtor in his attorney
escrow account representing the March, April and May 2024 adequate
protection payment, until further order from the Court.
As additional adequate protection for the use of the Debtor's
Pre-Petition Collateral and to the extent such use results in a
diminution of the value of the Pre-Petition Collateral, the Cash
Collateral Lenders are granted nunc pro tunc, pursuant to 11 U.S.C.
Sections 361(2) and 363(c)(2), valid, perfected, replacement liens
upon, and security interests in and to, all post-petition assets of
the Debtor, of any kind or nature whatsoever, real or personal,
whether now existing or hereafter acquired, and the proceeds of the
foregoing, to the same extent and with the same priority as Cash
Collateral Lenders' interests in the Pre-Petition Collateral.
Additionally, all Cash Collateral Lenders are entitled to an
administrative expense claim pursuant to 11 U.S.C. Section 507(b)
to the extent the above adequate protection proves insufficient
and/or does not offset any diminution of value in the Pre-Petition
Collateral in the Chapter 11 case and any Successor Case.
The liens and security interests granted to the Cash Collateral
Lenders, including the Adequate Protection Liens, will become and
are duly perfected without the necessity for the execution, filing
or recording of financing statements, security agreements, deposit
control agreements, and other documents which might otherwise be
required pursuant to applicable non-bankruptcy law for the creation
or perfection of such liens and security interests.
These events constitute an "Event of Default":
a. If the Debtor breaches any term or condition of the Fourth
Interim Order;
b. If the case is converted to a case under Chapter 7 of the
Bankruptcy Code;
c. If the Debtor is removed from possession and a Chapter 11 or
other Trustee, such as the Subchapter V Trustee is appointed to
take over Debtor's business/operations; and
d. If the case is dismissed.
A further interim hearing on the matter is set for August 29, 2024
at 2 p.m.
A copy of the order is available at https://urlcurt.com/u?l=ppK21x
from PacerMonitor.com.
The Debtor projects total expenses, on a monthly basis, as
follows:
$102,682 for June 2024;
$102,682 for July 2024; and
$102,682 for August 2024.
About Orthocare Solutions, Inc.
Orthocare Solutions is a veteran-owned small business serving the
Washington, DC and Baltimore metro areas. Four separate locations
offer customized orthotics, prosthetics, and medical equipment to
patients of all ages.
Orthocare Solutions, Inc. filed its voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bankr. D. Md. Case No.
23-19191) on Dec. 18, 2023. The petition was signed by David Fred
as owner. At the time of filing, the Debtor estimated up to $50,000
in assets and $1 million to $10 million in liabilities.
Judge Maria Elena Chavez-Ruark oversees the case.
Craig M. Palik, Esq. at MCNAMEE HOSEA, P.A. represents the Debtor
as legal counsel.
OSHKOSH REFURB: Amends Plan to Include Great America Claims Details
-------------------------------------------------------------------
Oshkosh Refurb, Inc., and Extreme Customs, LLC, submitted a First
Amended Joint Disclosure Statement describing First Amended Joint
Plan of Reorganization dated May 20, 2024.
Tyler G. Reilly started Extreme Customs, LLC more than twenty years
ago in August of 2003 and began operating out of his uncle's car
lot in Wautoma, Wisconsin.
In September 2023, in consideration for Bank First's further
forbearance from exercising its rights against the Debtors, Customs
delivered agreements voluntarily surrendering all of its assets,
and Refurb delivered a deed in lieu of foreclosure for 2175 South
Koeller St. to be held in trust by Bank First pending expiration of
the forbearance period or a default under the forbearance
agreement.
The forbearance period was extended to December 15, 2023. In that
time period, Customs and Refurb had arranged financing with Peoples
State Bank and U.S. Venture, Inc. to purchase its debts from Bank
First. The parties were unable to reach terms before the deadline
and these bankruptcy proceedings followed as a direct result of the
breakdown of those negotiations.
Class 4B consists of the Claim of Great America Financial Services
Corp. Customs filed an amended Schedule D on May 14, 2024 listing
Great America's claim as liquidated, noncontingent, and nondisputed
in the amount of $14,424.00 and fully secured by a purchase money
security interest in Customs' Hunter WA684-CM Aligner by virtue of
an equipment finance agreement number 1614398 dated November 24,
2020. The value of the collateral is equal to or greater than the
total claim.
On the Effective Date, the Debtors shall cure all postpetition
monetary defaults that have accrued under the equipment finance
agreement. As of May 18, 2024, such monetary defaults amount to
$3,989.10. Commencing 30 days after the Effective Date, the Debtors
shall pay the entirety of Great America's claim according to the
terms of the equipment finance agreement in equal monthly
installments of $613.45, including interest and insurance charges,
until the contract maturity date of December 18, 2025.
Like in the prior iteration of the Plan, the Debtors will pay all
unsecured claims in 48 equal monthly installments commencing 30
days after the Effective Date of the Plan.
The Debtors will make all payments contemplated under the Plan
through a combination of (a) cash generated from the business
income of the Reorganized Extreme Customs, LLC; (b) cash received
from payments of the City of Oshkosh's contribution to Reorganized
Oshkosh Refurb, Inc.; and (c) any other sources, including but not
limited to recoveries from other assets identified in the Schedules
and recoveries on claims.
A full-text copy of the First Amended Joint Disclosure Statement
dated May 20, 2024 is available at https://urlcurt.com/u?l=gYNIHi
from PacerMonitor.com at no charge.
Counsel for the Debtors:
Paul G. Swanson, Esq.
Peter T. Nowak, Esq.
Michael C. Jurkash, Esq.
SWANSON SWEET LLP
107 Church Avenue
Oshkosh, WI 54901
Tel: (920) 235-6690
Fax: (920) 426-5530
E-mail: pswanson@swansonsweet.com
pnowak@swansonsweet.com
mjurkash@swansonsweet.com
About Oshkosh Refurb
Oshkosh Refurb, Inc., is a single asset real estate entity that
owns and leases the real estate to Extreme Customs, LLC, upon which
Customs operates.
The Debtor sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. E.D. Wisc. Case No. 23-25769) on Dec. 15, 2023. In
the petition signed by Tyler G. Reilly, chairman and sole
shareholder, the Debtor disclosed up to $10 million in both assets
and liabilities.
Paul G. Swanson, Esq., at Swanson Sweet LLP, is the Debtor's legal
counsel.
PARK RIVER: Fitch Affirms 'B' LongTerm IDR, Outlook Stable
----------------------------------------------------------
Fitch Ratings has affirmed Park River Holdings, Inc.'s ratings,
including the company's Long-Term Issuer Default Rating (IDR) at
'B-'. The Rating Outlook is Stable. Fitch has also affirmed the
long-term ratings on the company's debt, including its ABL at
'BB-'/ RR1', senior secured term loan at 'B'/'RR3' and senior
unsecured notes at 'CCC'/'RR6'.
Park River's IDR reflects the company's modest competitive
position, weak credit metrics, middling profitability and potential
to generate modest FCF. The company's large scale, breadth of
product offerings and adequate liquidity position are also factored
into the ratings. The cyclicality of Park River's end markets and
the sponsor's aggressive capital allocation strategy are also
incorporated in the 'B-' IDR.
KEY RATING DRIVERS
Weak Credit Metrics: Park River's EBITDA leverage was 7.7x for the
LTM ended March 31, 2024, up from 7.3x at YE 2023, due to ABL
borrowings to fund seasonal working capital investment. Fitch
projects this metric to decline to about 7.2x by YE 2024 and below
7.0x in 2025 through a combination of debt reduction and modest
margin expansion, with a benefit from the elimination of the
non-controlling interest. The company intends to delever and Fitch
expects the majority of ABL borrowings outstanding as of March 31,
2024 to be repaid during the year. EBITDA interest coverage is
forecast to remain weak at 1.6x in 2024, with modest improvement to
1.9x in 2025.
Subdued Demand: Fitch expects demand in the company's end markets
to remain challenged in 2024 due to the sustained weakness in
residential repair and remodel activity, resulting in a revenue
decline of 2.5%-3.5% with low-single digit volume declines coupled
with flat to slightly lower selling prices. Fitch forecasts revenue
to grow 2%-3% in 2025 as residential repair and remodel spending
and new construction activity improve 2%-4%.
Profitability and FCF: Park River's Fitch-adjusted EBITDA margin
expanded about 60bps to 11.3% in 2023 due to lower transportation
and raw material costs. Fitch forecasts EBITDA margins to expand
slightly in 2024 and 2025 to 11.5%-12.0% as the company realizes
benefits from recent operational initiatives, including a
transition to company-employed drivers and revamping its
distribution model.
The company generated FCF of $260 million (10% of revenue) in 2023
despite higher interest expense due to a significant reduction in
inventory. Fitch projects 2024 FCF to be an outflow of $20
million-$25 million, as flat EBITDA is offset by higher cash taxes,
modest working capital investment and still-high interest
payments.
Financial Flexibility: Park River has ample liquidity as of March
31, 2024. Fitch expects the company's availability under its ABL to
remain sufficient in the intermediate term despite a reduction in
the borrowing base from lower working capital. The company's
near-term debt maturities are limited to 1% term loan amortization
per year until the ABL comes due in December 2025. Fitch's rating
case assumes Park River extends its ABL and refinances its term
loan ahead of their respective maturities.
Aggressive Capital Allocation Strategy: Park River has refrained
from meaningful acquisitions since 2021, and Fitch expects the
company to refrain from making additional acquisitions until
leverage approaches 6.0x. However, Fitch believes ownership has a
high leverage tolerance as evidenced by the high leverage at the
close of the acquisition of PrimeSource and combination with Dimora
Brands in December 2020, as well as the subsequent $855 million of
net acquisitions in 2021, which were financed via $755 million of
debt issuance and $130 million of capital contributions.
Modest Competitive Position: The company's competitive position is
relatively weaker compared with higher-rated building products
manufacturers in Fitch's coverage. This is due to its position as a
distributor in the supply chain, the highly fragmented nature of
the industry and some commoditized product offerings. Fitch
believes the company's scale, broad product offering and brand
equity associated with its proprietary brands, such as Grip-Rite
and Pro-Twist, and the addition of branded products from the
Dimora, Nationwide and Wolf acquisitions, provide competitive
advantages relative to other building products distributors, as
demonstrated by its higher run-rate profitability margins.
Cyclical End Markets: Fitch views Park River's end-market exposure
as relatively favorable compared with issuers that have more
exposure to new construction activity. Fitch estimates that about
70% of Park River's revenues come from the relatively more stable
residential repair and replacement sector, with the remaining 30%
derived from the highly cyclical residential new construction
end-market. However, some of this benefit is mitigated by the lack
of exposure to non-residential end-markets, which tend to have
different cycle times and could lessen the acute impact from a
steep decline in residential activity.
DERIVATION SUMMARY
Park River's end-market exposure is a credit strength relative to
other 'B' category building products distributor and manufacturer
peers, such as LBM Acquisition, LLC (B/Stable), Doman Building
Materials Group Ltd. (B+/Stable) and Chariot Buyer LLC (dba
Chamberlain Group; B-/Stable). Park River has similar credit
metrics compared to Chamberlain Group's, but meaningfully lower
margins. Park River's margins are in line with LBM, but it has
meaningfully higher leverage and less scale.
Doman has lower margins but stronger credit metrics than Park
River. Park River generates more of its revenue from the
less-cyclical repair and remodel end markets relative to these
peers, with considerably less exposure to volatile lumber prices.
KEY ASSUMPTIONS
- Revenue declines 2.5%-3.5% in 2024 and grows 2%-3% in 2025;
- EBITDA margins of 11.5%-12.0% in 2024 and 2025;
- FCF modestly negative in 2024 and slightly positive in 2025;
- The company refrains from acquisitions until leverage approaches
6.0x;
- SOFR averaging 5.125% in 2024 and 4.05% in 2025.
RECOVERY ANALYSIS
The recovery analysis assumes that Park River would be considered a
going concern (GC) in bankruptcy and that the company would be
reorganized rather than liquidated. Fitch has assumed a 10%
administrative claim and a 3% concession payment from Park River's
secured lenders to the unsecured bondholders in the analysis.
Fitch's GC EBITDA estimate of $245 million estimates a
post-restructuring sustainable EBITDA.
The GC EBITDA is based on Fitch's assumption that a default would
occur from further declines in the residential new construction and
repair and remodel end markets, combined with losses of certain
customers. Fitch estimates annual revenues of $2.2 billion, which
are about 15% below March 31, 2024 LTM levels and Fitch-calculated
EBITDA margin of about 11.1% (roughly in-line with EBITDA margin
for the LTM ended March 31, 2024) would capture the lower revenue
base of the company after emerging from a housing downturn, plus a
sustainable margin profile after right sizing, which leads to
Fitch's $245 million GC EBITDA assumption.
Fitch assumed a 6.0x enterprise value (EV) multiple to calculate
the GC EV in a recovery scenario. The 6.0x multiple compares with a
5.5x multiple for New AMI I, LLC (B/Negative) and Doman Building
Materials Group Ltd. (B/Stable). These peers are smaller in scale
and have lower margins than Park River. Fitch used a 6.0x EV
multiple for LBM Acquisition, LLC, which is a pure distributor, but
is considerably larger than Park River.
Fitch assumes the ABL revolver has $525 million outstanding at the
time of recovery, which accounts for potential shrinkage in the
available borrowing base during a period of contracting volumes
that causes a default, and is assumed to have prior-ranking claims
to the term loan in the recovery analysis. The analysis results in
a recovery corresponding to an 'RR1' for the $750 million ABL, an
'RR3' for the first lien term loan and a recovery corresponding to
an 'RR6' rating for the unsecured notes.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Fitch's expectation that EBITDA leverage will be sustained below
6.5x;
- (CFO-capex)/debt sustained above 2.5%;
- The company maintains a strong liquidity position with no
material short-term debt obligations;
- EBITDA interest coverage sustained above 2.0x.
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- EBITDA interest coverage sustained below 1.5x;
- (CFO-capex)/debt consistently negative;
- Fitch's expectation that FCF generation will approach neutral or
turn negative, resulting in a diminished liquidity position;
- Increased risk regarding the company's ability to successfully
address the maturity of its ABL, prompting liquidity concerns.
LIQUIDITY AND DEBT STRUCTURE
Liquidity Position: Park River has ample liquidity with $4.8
million of unrestricted cash on the balance sheet as of March 31,
2024 and $481.7 million of borrowing availability ($155 million
outstanding and $30 million in LCs) under its $750 million ABL
facility, which matures in December 2025. The company's senior
secured term loan and senior unsecured notes mature in 2027 and
2029, respectively. The amortization under the term loan is
manageable at 1% per annum or about $15.1 million, paid quarterly.
Fitch's rating case assumes the company extends the maturity date
of its ABL and refinances the term loan upon its maturity.
ISSUER PROFILE
Park River Holdings, Inc. is a leading national provider of
specialty branded interior and exterior residential building
products. The company's product offerings include construction
fasteners, cabinet knobs and pulls, decking, fence, gate and
functional hardware, railing systems and perimeter security.
MACROECONOMIC ASSUMPTIONS AND SECTOR FORECASTS
Click here to access Fitch's latest quarterly Global Corporates
Macro and Sector Forecasts data file which aggregates key data
points used in its credit analysis. Fitch's macroeconomic
forecasts, commodity price assumptions, default rate forecasts,
sector key performance indicators and sector-level forecasts are
among the data items included.
ESG CONSIDERATIONS
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Recovery Prior
----------- ------ -------- -----
Park River Holdings,
Inc. LT IDR B- Affirmed B-
senior unsecured LT CCC Affirmed RR6 CCC
senior secured LT BB- Affirmed RR1 BB-
senior secured LT B Affirmed RR3 B
PIGEON FREIGHT: Voluntary Chapter 11 Case Summary
-------------------------------------------------
Debtor: Pigeon Freight Services, Inc.
16830 Chicago Avenue
Lansing, IL 60438
Business Description: The Debtor is a Trucking company in Lansing,
Illinois.
Chapter 11 Petition Date: June 5, 2024
Court: United States Bankruptcy Court
Northern District of Illinois
Case No.: 24-08322
Debtor's Counsel: Saulius Modestas, Esq.
MODESTAS LAW OFFICES, P.C.
401 S. Frontage Rd.
Ste. C
Burr Ridge, IL 60527-7115
Tel: 312-251-4460
Fax: 312-277-2586
Email: smodestas@modestaslaw.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $10 million to $50 million
The petition was signed by Sergiu Tintiuc as president.
The Debtor failed to attach 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/IFUGZAI/Pigeon_Freight_Services_Inc__ilnbke-24-08322__0001.0.pdf?mcid=tGE4TAMA
PRIMARY PRODUCTS: Fitch Affirms 'BB' LongTerm IDR, Outlook Stable
-----------------------------------------------------------------
Fitch Ratings has affirmed all the ratings of Primary Products
Investments LLC (Primary Products) and its subsidiary Primary
Products Finance LLC, including the company's Long-Term Issuer
Default Rating (IDR) at 'BB' and the senior secured first lien term
loan at 'BB+'/'RR2' following the announcement to acquire Tate &
Lyle's remaining 49.7% stake in Primary Products. The transaction
will be financed primarily with an incremental add-on term loan of
$175 million and equity of $175 million. The Rating Outlook is
Stable.
The ratings consider Primary Products' strong market position in
the mature corn-derived products industry and contractual cost
pass-through that supports relatively consistent EBITDA. This is
offset by narrow diversification and limited scale with operating
EBITDA estimated around $300 million in FY 2024. Fitch estimates
pro forma EBITDA leverage, based on its adjustments, of around 4x
at transaction close expected by the end of July 2024.
Fitch expects Primary Products will demonstrate consistent capital
allocation priorities in the medium-term by investing in the
business coupled with only tax-related distributions to
shareholders that supports EBITDA leverage, based on Fitch
adjustments, trending to the mid-3x area.
KEY RATING DRIVERS
Ownership Structure Evolving: On May 23, 2024, KPS Capital Partners
announced plans to acquire the remaining 49.7% stake in Primary
Products from Tate & Lyle for $350 million. Capital investments to
modernize operations and support manufacturing initiatives are
expected to accelerate as a result of the transaction. In March
2024, Primary announced capital plans to invest over $700 million
over the next five years. The improvement in quality and production
reliability should better position Primary in the growing, higher
margin bio-economy that is expected to support cash flow growth.
Tate & Lyle, one of Primary Products' largest customers, is
expected to maintain a strong relationship with Primary due to
long-term contractual volume commitments that supports more steady
demand to maintain higher utilization rates and a stable
profitability stream. Primary Products was a subsidiary of Tate &
Lyle, prior to the April 2022 sale of 50.1% stake to KPS. Fitch
believes Primary Products can optimize its grind mix among
different products and could allocate a growing portion to Tate &
Lyle's specialty ingredients over time that offsets HFCS declines.
4x Pro Forma Leverage, Moderation Expected: Fitch estimates pro
forma EBITDA leverage, based on its adjustments, of around 4x at
transaction close. This compares to EBITDA leverage of 4.2x in FY
2023. Fitch expects Primary Products will demonstrate consistent
capital allocation priorities in the medium-term by investing in
the business coupled with only tax-related distributions to
shareholders that supports EBITDA leverage, based on Fitch
adjustments, trending to the mid-3x area driven by modest EBITDA
growth and debt repayment. Fitch's projects EBITDA is sustained in
the low $300 million area in FY 2025 and FY 2026.
Primary paid $160 million in member distributions in FY 2023 with
Fitch forecasting distributions around $150 million in FY 2024, of
which a portion of the distributions are distributed to cover
member taxes. Fitch's forecast considers lower member distributions
in the near-term following transaction close at roughly $40 million
annually for FY 2025 and FY 2026 that represents only tax-related
distributions. Higher member distributions while leverage is more
elevated could increase ratings pressure.
Fitch expects FCF, absent working capital movements, to be around
break-even the next couple of years as lower projected
distributions are largely offset by an acceleration in capital
investments and higher interest costs.
Major Player in Mature Corn-Derived Products Industry: Primary
Products has a strong top four position within the mature and
relatively stable corn-derived products industry in the U.S.,
focused solely on the Americas with revenue of $3.1 billion for FY
2023 (ended March). Primary Products' main segments include
sweeteners (42% of FY 2021 net revenue), industrial starches (12%),
acidulants (8%), and other co-products of the corn wet-milling
process. Primary Products has a top two positioning in high
fructose corn syrup (HFCS), Dextrose, industrial starches and
acidulants.
Structural Decline in HFCS: Primary Products is solely focused on
corn-derived bulk ingredients, while other peers such as Ingredion
Incorporated (BBB/Stable) and Tate & Lyle have pivoted toward
higher growth specialty ingredients markets. Fitch expects industry
demand for HFCS, which generated around 28% of fiscal 2021 net
revenue, will experience structural declines in the low to
mid-single digits annually. However, growth in demand for Primary
Products' other products such as dextrose, and industrial starches,
is projected to offset the decline in HFCS, driving longer-term
revenue growth.
HFCS Critical for Major Customers: HFCS is a critical input for
major customers, as switching costs toward other sweetener
alternatives are high given the inherent risk with altering
formulations of packaged food products. Industry capacity
utilization for HFCS has remained at approximately 75% over the
last 20 years, and no new capacity has been added in the last 15
years. Consequently, the industry has rationalized marginal HFCS
facilities and reallocated production capacity to higher growth,
higher margin products.
Consistent EBITDA through Commodity Cycles: Primary Products is
relatively insulated from volatile commodity prices as
approximately 75% of volumes are produced under tolling contracts,
which effectively allows Primary Products to earn a spread,
regardless of the price of corn. The remaining 25% are flat price
contracts, which are historically hedged to help mitigate price
risk. Co-products revenue can also serve as a natural hedge to
offset commodity price volatility. Primary's EBITDA has
historically shown resiliency through commodity cycles.
Primary Products has successfully implemented higher prices
following contractual discussions with customers, which, along with
operational improvements, and product mix should help support
improved gross profit though the forecast period. Plans for
material on-going maintenance and modernization of existing
operations are expected to remain a modest near-term pressure on
margins and production capacity.
Parent Subsidiary Linkage: Fitch's analysis includes a weak
parent/strong subsidiary approach between the parent, Primary
Products Investments LLC and its subsidiary. Fitch assesses the
quality of the overall linkage as high, which results in an
equalization of IDRs across the corporate structure.
DERIVATION SUMMARY
Primary Products' 'BB'/Stable rating reflects the strong market
position in the mature corn-derived products industry for the food
and industrial markets and moderate Fitch-calculated leverage
trending to mid-3x over the forecast period. These factors are
offset by narrow product diversification and limited scale.
Ingredion's 'BBB' rating benefits from its globally diverse product
portfolio and stable underlying business model. The company focuses
on starches and sweeteners, with increasing exposure to
higher-value, higher-margin, on-trend specialty ingredients.
Ingredion has taken several actions to address operating pressures
over the last few years related to secular changes in its core
businesses. Combined with further efficiency and process
initiatives, Fitch expects these measures should support reduced
earnings volatility and more predictable long-term earnings
growth.
Fitch expects Ingredion will continue to demonstrate good financial
discipline including consistent capital allocation policies around
growth investments, bolt-on M&A and shareholder return initiatives.
Together, these should support leverage expectations in the
low-to-mid-2x range over the forecast period.
Darling's 'BB+' rating reflects the company's leading market
position as a globally diversified ingredient processor that has
benefited from higher profitability due to increasing demand for
low-carbon fuels, which supports higher fat prices. Fitch's
forecast assumes these strong tailwinds will moderate over the
medium term, but remain structurally higher, supported by renewable
diesel demand pull.
Fitch projects Darling's leverage could trend from mid-3x to the
low-3x range through a combination of EBITDA growth from increased
Diamond Green Diesel (DGD) dividend contribution and debt
reduction.
KEY ASSUMPTIONS
- Fitch-calculated operational EBITDA is expected around $300
million in FY 2024 driven by improvements in commercial performance
and manufacturing efficiency. In FY 2025, Fitch expects EBITDA to
remain in the $300 million range.
- Fitch expects FCF, absent working capital movements, to be around
break-even the next couple of years as lower projected
distributions are largely offset by an acceleration in capital
investments and higher interest costs. Fitch forecasts capex of
approximately $150 million in FY 2024 and increasing to $175
million in FY 2025 to fund modernization and efficiency investments
in the existing operations. The forecast includes $150 million in
dividends paid by Primary Products in FY 2024 and decreasing to
around $40 million in FY 2025 to reflect only tax distributions.
- Fitch-calculated pro forma EBITDA leverage is projected to around
4x at transaction close and is expected to trend to mid-3x over the
forecast period.
- The company took steps to reduce variable interest rate exposure
via the use of $600 million in interest rate swaps, which
effectively establishes half of its total $1.1 billion in debt
outstanding as of March 31, 2024 at a fixed interest rate of
2.789%. Interest rate assumptions, using SOFR benchmarks, is
estimated at around 6% in FY 2024, declining to 3.5% in FY 2027.
RATING SENSITIVITIES
- EBITDA growth to over $600 million based on increased product
diversification away from corn derived products and/or geographic
diversification, while committing to maintain EBITDA leverage below
3.0x;
- EBITDA leverage sustained above 4.0x as a result of financial
performance below Fitch's expectations, and/or as a result of large
M&A debt funded transaction, or leveraging capital returns.
LIQUIDITY AND DEBT STRUCTURE
Sufficient liquidity: As of Dec. 31, 2023, the company had $17
million in cash and cash equivalents, $181 million of borrowing
availability on its ABL and $100 million available on its undrawn
revolver.
The company's debt structure includes an ABL of $400 million ($181
million available, which reflected the $25 million of borrowings
outstanding under the ABL and $41 million of outstanding letters of
credit), $100 million in RCF (undrawn) and a $1.0441 billion
repriced term loan, which calls for principal re-payments of 1% per
year. The ABL and RCF have maturities of April 1, 2027 and the Term
Loan maturity is April 1, 2029. In February 2024, the $1.060
billion Term Loan B was replaced with a new term loan B, due April
2029, and priced at SOFR + 350 vs SOFR + 400 previously.
The ABL agreement includes a springing fixed charge coverage ratio
of 1.0x if excess availability is less than the greater of $22.5
million and 10% of the line cap. The first lien cash flow revolver
and term loan include an excess cash flow sweep provision at 50%
with a step down to 25% at 2.25x net first lien leverage. The cash
flow revolver is subject to a springing net first lien leverage
test at 5.25x, when 35% of the facility is drawn.
ISSUER PROFILE
Primary Products is a leading provider of corn-derived products,
including sweeteners, industrial starches, acidulants, and other
co-products of the corn wet-milling process, including fuel ethanol
and corn derivatives used for animal feed and corn oil.
SUMMARY OF FINANCIAL ADJUSTMENTS
Stock-based compensation, leverage metrics adjusted for joint
venture dividends, and other one-time adjustments related to the
transaction.
MACROECONOMIC ASSUMPTIONS AND SECTOR FORECASTS
Fitch's latest quarterly Global Corporates Macro and Sector
Forecasts data file which aggregates key data points used in its
credit analysis. Fitch's macroeconomic forecasts, commodity price
assumptions, default rate forecasts, sector key performance
indicators and sector-level forecasts are among the data items
included.
ESG CONSIDERATIONS
Primary Products has an ESG Relevance Score of '4' for Exposure to
Social Impacts due to shifting consumer preferences with reducing
sugar consumption, and more acutely reducing HFCS, which has
affected demand for certain packaged foods and beverages with
higher levels of sugars or sweeteners. Fitch expects demand for
HFCS to structurally decline in the low-to-mid single digits
annually. These trends have caused large CPG companies, including
Primary Products' major customers such as The Coca-Cola Company and
PepsiCo Inc. to modify and extend portfolios by reformulation of
brands to adapt to changing consumer behaviors. This has a negative
impact on the credit profile, and is relevant to the rating[s] in
conjunction with other factors.
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Recovery Prior
----------- ------ -------- -----
Primary Products
Investments LLC LT IDR BB Affirmed BB
Primary Products
Finance LLC LT IDR BB Affirmed BB
senior secured LT BBB- Affirmed RR1 BBB-
senior secured LT BB+ Affirmed RR2 BB+
PSN REALTY: Voluntary Chapter 11 Case Summary
---------------------------------------------
Debtor: PSN Realty, Inc.
201 S. Blakely Street
Dunmore PA 18512
Business Description: PSN Realty is a Single Asset Real Estate
debtor (as defined in 11 U.S.C. Section
101(51B)).
Chapter 11 Petition Date: June 6, 2024
Court: United States Bankruptcy Court
Middle District of Pennsylvania
Case No.: 24-01417
Judge: Hon. Mark J. Conway
Debtor's Counsel: Tullio DeLuca, Esq.
TULLIO DELUCA
381 N. 9th Avenue
Scranton, PA 18504
Tel: 570-347-7764
Email: tullio.deluca@verizon.net
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Kenneth W. Bond as president.
The Debtor failed to attach 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/4TIQ45Y/PSN_Realty_Inc__pambke-24-01417__0001.0.pdf?mcid=tGE4TAMA
PUBLIC CRAFT: Lakefront Brewery Intends to Buy Biz. in Chapter 11
------------------------------------------------------------------
Genevieve Redsten of Milwaukee Journal Sentinel reports that
Lakefront Brewery announced its plans to buy Public Craft Brewing,
a brewery in downtown Kenosha that struggled during the pandemic.
"Kenosha is an up-and-coming area with many businesses moving in,"
Russ Klisch, president of Lakefront Brewery, said in a statement
Friday, May 24, 2024. "The population is growing with housing being
developed and it is a good time to become established."
Public Brewing, like Lakefront, is centrally located in its city's
entertainment district. It occupies the former Barden department
store, and — like Lakefront's — its historic building was
recently renovated. The breweries share the same beverage
distributor.
Lakefront signed a letter of intent to buy the brewery, but the
sale will need final approval from a bankruptcy judge; Public Craft
Brewing Company filed for chapter 11 bankruptcy last month.
The business struggled financially during the pandemic, which hit
shortly after Public Brewing began a major expansion project, its
founder Matt Geary wrote in a recent Facebook post.
"And if social distancing wasn't catastrophic enough (for a place
founded to bring people together!) our community was blindsided
once again by the fallout of the Jacob Blake shooting and ensuing
events," Geary wrote.
"The result of all of this occurring at the same time we were
investing heavily in our expansion, the extended recovery time,
inflation, and restaurant partner problems, is our current
untenable financial situation."
Public Brewing will have a new logo, but its name isn't changing,
and Lakefront doesn't plan to cut any staff. It also plans for
Public's existing beers — including its signature sour beers —
to be distributed "through our distribution network."
Lakefront does, however, plan to introduce some of its ingredients
for success — including a version of its popular brewery tour.
The company is also eyeing Public's large restaurant space for
potential events, like the ones hosted inside Lakefront's Beer
Hall.
About Public Craft Brewing Company
Public Craft Brewing Company LLC filed its voluntary petition for
relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Wis.
Case No. 24-22169) on April 26, 2024 listing $500,000 to $1 million
in assets and $500,000 to $1 million in liabilities. The petition
was signed by Michael W. Wimmer, authorized representative.
Judge Beth E. Hanan presides over the case.
Jerome R. Kerkman, Esq. at KERKMAN & DUNN, is the Debtor's counsel.
PW KRAV 2018: Unsecureds Will Get 1.17% of Claims over 60 Months
----------------------------------------------------------------
PW KRAV 2018, Inc., filed with the U.S. Bankruptcy Court for the
Central District of California a Subchapter V Plan of
Reorganization dated May 16, 2024.
The Debtor is a company that owns and operates a martial arts
studio located at 722 E. Walnut Street, Pasadena, CA 91101 (the
"Pasadena Studio"). The Debtor will continue to provide these
classes and services.
The Debtor filed the bankruptcy to obtain breathing room and make
effort to renegotiate the Los Angeles Lease so that Debtor could
continue to operate the Los Angeles Studio. However, since filing
the bankruptcy, the Debtor determined that the Los Angeles Studio
is not profitable due to the significantly high monthly rent
payment. Therefore, the Debtor saw no way to reduce the rent or to
otherwise operate the Los Angeles Studio profitably.
Consequently, the Debtor will be rejecting the Los Angeles Lease
and vacated the premises on march 1, 2024. On February 22, 2024,
the Debtor gave notice to GUGV that it intended to terminate the
Los Angeles Lease and vacate the premises by March 1, 2024. The
Debtor's counsel has been in communications with GUGV's counsel.
The Debtor believes the parties will stipulate to reject the Los
Angeles Lease and will file the stipulation in the near future.
Class #2b consists of General Unsecured Claims. Each member of
Class #2b will be paid a pro rata share of a fund totaling
$1,009.00 created by the Debtor's payment. Pro rata means the
entire fund amount divided by the total of all allowed claims in
this class. Payment will be paid per month for a period of 60
months. The allowed unsecured claims total $856,113.69. This Class
will receive a distribution of 1.17% of their allowed claims.
Shareholders simply retain their shares of stock.
Source of funds on the effective date shall be from income from
operations.
A full-text copy of the Subchapter V Plan dated May 16, 2024 is
available at https://urlcurt.com/u?l=PpI500 from PacerMonitor.com
at no charge.
Attorney for the Debtor:
David R. Haberbush, Esq.
Haberbush, LLP
444 W. Ocean Blvd Street 1400
Long Beach, CA 90802
Telephone: (562) 435-3456
Facsimile: (562) 435-6335
Email: dhaberbush@lbinsolvency.com
About PW KRAV 2018, Inc.
PW Krav 2018, Inc., is a company that owns and operates a martial
arts studio located at 722 E. Walnut Street, Pasadena, CA 91101
(the "Pasadena Studio").
The Debtor filed a Chapter 11 bankruptcy petition (Bankr. C.D. Cal.
Case No. 24-11163) on Feb. 16, 2024, disclosing under $1 million in
both assets and liabilities. The Debtor is represented by
Haberbush, LLP.
REECE GREEN: Court OKs Interim Cash Collateral Access
-----------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Alabama
authorized Reece Green and Sons Logging, LLC to use cash
collateral, on an interim basis, in accordance with the budget,
pending a final hearing set for June 13, 2024 at 11 a.m.
The entities with UCC Financing Statements of Record and may have
interest in the cash collateral are John Deere Financial and River
Bank and Trust.
The Debtor is permitted to provide adequate protection to its
secured creditors in the form of a replacement lien to the extent
the value of each secured creditor's lien is decreased by the
Debtor-in-Possession’s use of the cash collateral, pursuant to 11
U.S.C. Section 361(2).
A copy of the order is available at https://urlcurt.com/u?l=KPLeQb
from PacerMonitor.com.
About Reece Green and Sons Logging LLC
Reece Green and Sons Logging LLC operates a timber harvesting
and/or transporting business in Chilton County, Alabama.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. M.D. Ala. Case No. 24-31116) on May 21,
2024. In the petition signed by Alfred M. Green, managing member,
the Debtor disclosed up to $1 million in assets and up to $10
million in liabilities.
Judge Christopher L. Hawkins oversees the case.
Anthony Brian Bush, Esq., at the Bush Law Firm, LLC, represents the
Debtor as legal counsel.
RENO CITY CENTER: Unsecureds to be Paid in Full in Plan
-------------------------------------------------------
Reno City Center Owner LLC filed with the U.S. Bankruptcy Court for
the District of Nevada a Disclosure Statement describing Plan of
Reorganization dated May 16, 2024.
The Debtor is a Delaware limited liability company established on
April 11, 2022.
The sole member of the Debtor is Reno City Mezzanine Borrower, LLC,
a Delaware limited liability company. The sole member of Mezzanine
is Reno City Center, LLC ("RCC"). RCC is the manager of both the
Debtor and Mezzanine.
On or about September 30, 2020, RCC acquired from Harrah's Reno LLC
the real property in downtown Reno, Nevada previously operated as
the Harrah's Hotel & Casino and now commonly referred to a the Reno
City Center Project (the "Project").
This Plan was strategically crafted to optimize the value of the
Debtor's current assets and to leverage the existing
infrastructure, expertise, and experience of the Debtor and its
management team to complete construction of the Debtor's Project,
increase the value of the Debtor's fixed assets, and generate
future reoccurring revenue.
The Debtor has also considered the public impact of its Project on
the greater Reno community and is proposing a Plan that will
provide a positive outcome for the community in a relatively short
amount of time while simultaneously enhancing the Project's value.
This Plan, and all related financial projections, are based on what
the Debtor believes is the best and most feasible construction and
operating path which will result in payment in full to allowed
secured and unsecured creditors, with accrued interest, and will
also allow the equity holders to retain their ownership interest in
the Debtor.
Class 4 consists of Allowed Unsecured Claims. The Class 4 allowed
general unsecured as of February 16, 2024, will accrue interest at
4% per annum from the petition date until paid, and shall be paid
by the Debtor in quarterly installments of $500,000 starting on
January 1, 2026 and continuing on the first day of each calendar
quarter thereafter until paid in full, with each quarterly payment
to be distributed on a pro rata basis among all allowed Class 4
claims. This Class is impaired.
The Class 5 equity interests of Reno City Center Owner, LLC as of
the petition date shall not be modified. The Class is unimpaired
under the Plan.
The Debtor intends to fund its Plan and ongoing construction and
business operations from a combination of equity contributions,
tenant improvement funding, and new financing.
A full-text copy of the Disclosure Statement dated May 16, 2024 is
available at https://urlcurt.com/u?l=ygy2at from PacerMonitor.com
at no charge.
Attorneys for the Debtor:
Elizabeth Fletcher, Esq.
FLETCHER & LEE, LTD.
448 Ridge Street
Reno, NV 89501
Tel: (775) 324-1011
Email: efletcher@fletcherlawgroup.com
Stephen R. Harris, Esq.
HARRIS LAW PRACTICE LLC
850 E. Patriot Blvd., Suite F
Reno, NV 89511
Tel: (775) 786-7600
Email: steve@harrislawreno.com
About Reno City Center Owner
Reno City Center is a Single Asset Real Estate debtor (as defined
in 11 U.S.C. Section 101(51B)).
Reno City Center Owner LLC filed its voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bankr. D. Nev. Case no.
24-50152) on Feb. 16, 2024, listing $100 million to $500 million in
both assets and liabilities. The petition was signed by Kirk
Walton, Managing Member of GPWM QOF Manager LLC, its Manager.
Judge Hilary L Barnes presides over the case.
Elizabeth Fletcher, Esq. at Fletcher & Lee, is the Debtor's
counsel.
RJQ COMPANIES: Unsecureds Will Get 6% of Claims over 5 Years
------------------------------------------------------------
RJQ Companies, Inc., filed with the U.S. Bankruptcy Court for the
Eastern District of California a Plan of Reorganization under
Subchapter V.
The Debtor is a landscape contractor providing design,
installation, and maintenance services.
The Debtor is a California corporation. There are two shareholders,
Robert J. Quenzel, Jr. who owns 85% of shares and his son Robert J.
Quenzel, III who owns the remaining shares. Robert J. Quenzel, III
has been a manager in the past but is no longer and employee and is
not active in the day-to-day operations of the business.
The Debtor has both secured and unsecured debt. As of Petition
Date, the Debtor had approximately $324,259.09 in secured debt
obligations and $489,354.31 in unsecured claims.
The Debtor has five secured claims: (1) Ally Financial Services,
Inc. dba GM Financial holds three claims secured by three vehicles,
each vehicle is secured by a separate financing agreement which
secures a first-position security interest in each vehicle, the
agreements do not include crosscollateralization, each financing
agreement is listed as a separate subclass; (2) ODK Capital, LLC
holds a claim secured by accounts and other personal property.
No proof of claim has been filed by ODK Capital, LLC. The Debtor's
remaining debt consists of approximately 18 unsecured claims
totaling $489,354.31. Some of the claims of the Debtor are
personally guaranteed by Robert J. Quenzel, Jr. the President and
principal shareholder of the Debtor.
By the Plan, the Debtor proposes to (a) pay Ally Financial
Services, Inc. in full at the various contract rates of over the
remaining contractual terms, pursuant to original contract terms;
(b) pay ODK Capital, LLC's secured claim in full at 9 percent
interest over a five-year period; and (d) pay the General Unsecured
Claims six percent of allowed claims over a five-year period.
The Debtor holds contingent claims that may or may not be paid or
paid in full. These are a claim against a debt settlement firm that
Debtor believes holds a deposit in the amount of $62,643.06 and
Employment Retention Tax Credit refunds filed but not paid in the
amount of $444,514.59. Debtor proposes to pay 80% of any net
recovery of those claims first to secured creditors in classes One
(A through D) and Two and then to general unsecured creditors in
Class 3.
To the extent that proposed payments to secured classes are reduced
by such payments, payments to Class 3 shall be increased. Equity
Interests will be reinstated, provided, however, that the Debtor
may not make any payments on account of Equity Interests until the
completion of the Plan.
Class 3 consists of All General Unsecured Claims. The Debtor will
pay 6% of Allowed Claims without interest for 5 years. Quarterly
payments over 5-years beginning September 2024. This Class is
impaired.
Total Distributions under the Plan will be $449,877.59 which
includes payment in full to Class 2 and $30,000 to Class Three
general unsecured creditors.
However, in the event that recovery is made on the ERCTC refunds or
the Claim against Third Party, 80% of any net recovery will be paid
first to Classes One and Two and then to Class Three. To the extent
that proposed Plan payments to Classes One and Two are reduced the
Quarterly distribution to Class Three shall be increased.
On the Effective Date, all assets of the Debtor's estate, including
all real and personal property, all Causes of Action, interests,
claims, choses in action, and rights under any contracts (executory
or otherwise), against any person will re vest and be transferred
to the post-Effective Date Debtor. The Debtor will remain in
possession of all other assets, including its business and will
continue to sell its products through its existing marketing
channels while seeking to incrementally increase its sales through
a measured growth model that emphasizes profitability.
A full-text copy of the Plan of Reorganization dated May 16, 2024
is available at https://urlcurt.com/u?l=Plqtp3 from
PacerMonitor.com at no charge.
Attorneys for the Debtor:
Stephen Reynolds, Esq.
Reynolds Law Corporation
424 Second Street, Suite A
Davis, CA 95616
Tel: (530) 297-5030
Fax: (530) 297-5077
Email: sreynolds@lr-law.net
About RJQ Companies
RJQ Companies, Inc. is a landscape contractor providing design,
installation, and maintenance services.
The Debtor filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. E.D. Calif. Case No. 24-20882) on March 5,
2024, with $500,001 to $1 million in both assets and liabilities.
Judge Fredrick E. Clement presides over the case.
Stephen M. Reynolds, Esq., represents the Debtor as legal counsel.
ROMANCE WRITERS: Files for Chapter 11 Bankruptcy
------------------------------------------------
Jonathan Randles of Bloomberg News reports that a professional
organization for romance authors filed bankruptcy, blaming the high
cost of its annual conference and a membership crisis triggered by
the suspension of a prominent writer who accused another member of
allegedly using racist stereotypes in her book.
Romance Writers of America Inc. filed Chapter 11 on Wednesday, May
29, 2024, saying it lost thousands of members in recent years and
can't cover expenses related to keynote conferences it planned to
hold at Marriott hotels in Philadelphia and Austin.
The nonprofit trade association said it already has a plan to get
out of bankruptcy and intends to distribute its disposable income
to the hotels and other creditors.
RWA was embroiled in controversy after it suspended Courtney Milan,
a romance author and former board member, in late 2019. Milan
criticized another writer's book for using racist stereotypes and
RWA's response resulted in widespread backlash, with the phrase
#IStandWithCourtney trending on Twitter, according to Vox.
The association didn't reference Milan in court papers Wednesday,
May 29, 2024. But its filing said its membership dropped to 3,000
members from roughly 10,000 "predominantly due to disputes
concerning diversity, equity, and inclusion issues between some
members of a prior RWA board and others in the larger romance
writing community."
The Covid-19 pandemic also contributed to a decline in membership
which hurt RWA's finances, according to court documents.
The organization had entered into agreements with conference
centers in 2018 to hold its keynote event through 2026, current RWA
President Mary Ann Jock said in a court filing. It ended up filing
Chapter 11 because the Philadelphia Marriott recently accelerated
obligations under an existing conference agreement, demanding
immediate payment of $1 million, which the association can't
afford, she said.
Carollynn H.G. Callari, RWA's lawyer, said the organization
doesn’t expect bankruptcy to impact its day-to-day operations.
The Chapter 11 filing was necessary to restructure the group's
legacy obligations, including its conference contracts, she added.
RWA has "dedicated time and resources in recent years to improving
the diversity and equity represented in our membership and
programming, and will continue to do so to ensure members' needs
are met with respect and responsiveness," Callari said in a written
statement.
RWA said it reconstituted its board in 2021, in an effort to
address DEI issues. Incorporated in 1981, RWA provides networking
opportunities for romance writers.
The case is Romance Writers of America Inc., case number 24-32447,
in the US Bankruptcy Court in the Southern District of Texas.
About Romance Writers of America
Romance Writers of America is a nonprofit trade association whose
mission is to advance the professional and common business
interests of career-focused romance writers through networking and
advocacy and by increasing public awareness of the romance genre.
RWA works to support the efforts of its members to earn a living,
to make a full-time career out of writing romance -- or a part-time
one that generously supplements their main income.
Romance Writers of America sought relief under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. S.D. Tex. Case No. 24-32447) on May
30, 2024. In the petition signed by Mary Ann Jock, as president,
the Debtor reports total assets of $272,169 and total liabilities
amounting to $3,067,284.
The Honorable Bankruptcy Judge Jeffrey P. Norman oversees the
case.
The Debtor is represented by:
ANDREW MYERS, PC
1885 Sain James Street
15th Floor
Houston, TX 77056-4110
Tel: (713) 850-4200
Email: jjudd@andrewsmyers.com
RWC GROUP: Court OKs $1MM DIP Loan From Edge Group
--------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Florida,
Fort Lauderdale Division, authorized RWC Group, LLC to use cash
collateral and obtain postpetition financing from Edge Group.
The DIP facility in the amount of $1 million from Edge Group
Chicago LLC is approved on a final basis and the Debtor is
authorized to draw the full amount of financing from the DIP
Facility and Term Sheet. Any amounts loaned through the DIP
Facility will accrue interest at 6% per annum.
The DIP facility is due and payable on the earlier of February 1,
2025, the Effective Date of a confirmed plan, the closing date of a
section 363 sale, conversion or dismissal of the case, or the
appointment of a Chapter 11 trustee.
The DIP facility will be used to fund working capital to restart
the Debtor's business and general corporate requirements of the
Debtors and bankruptcy related expenses, in accordance with the
Budget.
The parties that assert an interest in the Debtor's cash collateral
are the U.S. Small Business Administration, Oxford Commercial
Finance, Alcohol and Tobacco Tax and Trade Bureau, Sports South
LLC, and Edge Group.
Prior to 2014, the Debtor operated as the American distributor for
Kalashnikov Concern. KC is a Russian arms manufacturer who makes,
among others, the AK-47. Following Russia's invasion of Crimea in
2014, the U.S. issued sanctions against the import of KC's
products.
As a result of the sanctions, the supply of new Kalashnikov-style
weapons disappeared from the U.S.. The ensuing scarcity drove
demand as consumers raced to purchase the available stock. Prices
skyrocketed. The Debtor recognized the opportunity to fill the gap
in supply and transitioned from distributor to manufacturer. The
Debtor has no ownership connection to KC and manufactures its guns
at a facility in Pompano Beach, FL. Accordingly, the Debtor became
the sole entity able to sell new Kalashnikov-style weapons in the
U.S.
The Debtor encountered many potholes on the road from distributor
to manufacturer. Debt built up. When the COVID-19 pandemic hit in
2020, American demand for firearms skyrocketed to the tune of a
roughly 65% increase in gun sales compared to 2019. The Debtor
ramped up operations to meet this unprecedented demand. However,
demand waned with the pandemic. In 2022, Americans purchased
roughly 22% fewer guns than in 2020. The Debtor had incurred
significant debt in its efforts to transition and ramp up
manufacturing. The weakened demand subsequently caused the Debtor
to become unable to meets its legacy debt obligations.
As a result, the Debtor temporarily shut down operations on April
19, 2024, because the Debtor had no cash on hand. The Debtor filed
the bankruptcy to restart its business and preserve American
manufacturing jobs without the burden of all of its legacy debt.
The proposed post-petition financing will provide working capital
for the Debtor to resume the manufacture and distribution of its
products. RWC currently holds inventory with a book value of
roughly $7.5 million. However, most of that inventory consists of
parts. To assemble those parts into firearms requires intellectual
property rights which the Debtor does not own.
The Debtor is a Pennsylvania limited liability corporation. Two
parties have filed UCC-1 financing statements in Pennsylvania. One
UCC-1 identifies Sussex IM, Inc. as the secured party as to a
specific piece of equipment. Accordingly, Sussex IM, Inc.
potentially holds a security interest in a piece of equipment and
does not have a security interest in the Debtor's cash collateral.
The other UCC-1 identifies "Corporation Service Company, as
Representative" as the secured party. Accordingly, the Debtor
cannot conclude who may hold a perfected security interest.
Oxford Commercial Finance will likely assert a secured claim for
roughly $1.8 million secured by all of the Debtor's assets. In June
2023, the Debtor obtained a revolving credit facility from Oxford
and gave to Oxford a blanket security interest.
The U.S. Small Business Administration will likely assert a secured
claim for roughly $500,000 as a result of a loan from August 2023.
As part of that agreement, the Debtor granted the SBA a security
interest in all of the Debtor's assets.
Sports South LLC filed a UCC-1 financing statement in Florida on
March 12, 2024 identifying as collateral the Debtor's inventory,
equipment, and vehicles. Sports South is a customer of the Debtor
who placed an order for about $8,700 in December 2023.
The Debtor is investigating why Sports South filed a financing
statement. In any event, Sports South likely does not hold a
perfected security interest because it filed its financing
statement in the wrong jurisdiction. Alternatively, the Debtor may
seek to avoid the perfection of Sports South's security interest as
a preferential transfer pursuant to 11 U.S.C. section 548.
The Alcohol and Tobacco Tax and Trade Bureau will likely assert a
secured claim for roughly $2.1 million. The TTB is the federal
agency responsible for collecting taxes on the trade and import of
firearms. On May 7, 2024, the TTB recorded a lien in the public
records of Broward County against all of the Debtor's assets. To
the extent that TTB holds a perfected lien, that lien is likely
void as a violation of the automatic stay or avoidable as an
unauthorized post-petition transfer.
Broward County filed Proof of Claim #1-1 for a secured claim in the
amount of $10,068 for a 2024 tangible property tax on account of
and secured by certain of the Debtor's property. That property does
not include the Debtor's inventory. Broward County holds a
perfected first-priority lien pursuant to Section 197.122, Florida
Statutes.
Edge loaded the Debtor $60,000 on the eve of filing to pay for the
Debtor's counsel. In exchange for the loan, the Debtor granted Edge
a blanket lien on all of its assets as collateral for the loan.
Edge did not file a UCC-1 financing statement to perfect its lien.
On a further interim basis through June 14, 2024, the Debtor is
entitled to use cash collateral to pay all ordinary and necessary
expenses in the ordinary course of its business for the purposes
contained in, and consistent with, the budget, provided that the
Debtor will also be entitled to pay prepetition employee wages as
separately authorized by the Court. The Debtor is also authorized:
(a) to exceed any line item on the Budget by an amount equal to 10%
of each such line item; or (b) to exceed any line item by more than
10% percent so long as the total of all amounts in excess of all
line items for the Budget do not exceed 10% percent in the
aggregate of the total Budget.
As adequate protection, the Secured Parties are granted replacement
liens.
To the extent that the Secured Parties hold a properly perfected,
prepetition security interest in cash collateral, upon the
diminution of the value of cash collateral securing the Secured
Parties' claims, the Secured Parties will receive an administrative
expense claim with priority over all other administrative expense
claims.
A further hearing on the matter is set for June 12 at 9:30 a.m.
A copy of the order is available at https://urlcurt.com/u?l=JyS9ZM
from PacerMonitor.com.
About RWC Group, LLC
RWC Group, LLC is a manufacturer of a wide variety of semi-auto AK
pattern rifles, shotguns and pistols for the US and international
civilian marketplaces, as well as military and law enforcement
agencies.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Fla. Case No. 24-14464) on May 6,
2024. In the petition signed by Michael Tiraturian, manager, the
Debtor disclosed up to $10 million in both assets and liabilities.
Judge Scott M. Grossman oversees the case.
Bradley S. Shraiberg, Esq., at Shraiberg Page PA, represents the
Debtor as legal counsel.
SAM ASH: Closes 100-Year Old Store in Philadelphia, Pennsylvania
----------------------------------------------------------------
Isabelle Hajek of The U.S. Sun reports that Sam Ash Music Corp. is
closing 100-year-old location in Philadelphia, Pennsylvania.
The company was founded in Brooklyn, New York in 1924, eventually
growing to 45 locations in 16 states; now shrinking to be only 15.
An employee of a Florida Sam Ash location that has recently
announced its closure revealed that the company plans to shutter 18
stores total, as reported by The Patch.
It was later confirmed that Sam Ash would be liquidating all of its
stores after filing for Chapter 11 bankruptcy.
"It is with a heavy heart that we announce that all Sam Ash Music
store locations will begin store closing sales today," a statement
on Sam Ash's Facebook page read.
"Thank you for allowing us to serve musicians like you for 100
years."
Ahead of its final day, the location ran sales ranging from 5% to
20%.
The Philadelphia Mills location was a community staple and in its
final days, most of the shelves and racks are now bare.
Store manager Elliott Weiss is still struggling to believe that the
store is shutting down.
About Sam Ash Music Corp.
Sam Ash Music Corporation operates a chain of musical instrument
retail stores. The Company offers guitars, basses, band and
orchestra, drums, keyboards, live sound, recording gear, dj and
lighting. Sam Ash Music serves customers throughout the United
States.
Sam Ash Music Corp. sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D.N.J. Case No. 24-14727) on May 9, 2024.
In the petition filed by Jordan Meyers, as chief restructuring
officer, the Debtor reports estimated assets between $100 million
and $500 million and estimated liabilities between $100 million and
$500 million.
The Honorable Bankruptcy Judge Stacey L. Meisel oversees the case.
The Debtor is represented by:
Michael D. Sirota, Esq.
COLE SCHOTZ P.C.
Court Plaza North
25 Main Street
Hackensack, NJ 07601
Tel: 201-489-3000
Email: msirota@coleschotz.com
SCIENTIFIC GAMES: S&P Rates New Repriced Secured Term Loan B 'B'
----------------------------------------------------------------
S&P Global Ratings assigned its 'B' issue-level rating and '3'
recovery rating to Scientific Games Holdings L.P.'s proposed
repriced $2.069 billion senior secured term loan B due April 2029.
The '3' recovery rating indicates its expectation for meaningful
recovery (50%-70%; rounded estimate: 60%) for lenders in the event
of a payment default. The company will use the proceeds from this
issuance to refinance its existing $2.1 billion term loan B ($2.069
billion outstanding as of March 31, 2024).
S&P said, "We view the debt-for-debt transaction as leverage
neutral, thus our ratings and outlook on Scientific Games are
unchanged. However, we expect the refinancing will be modestly
accretive for the company's cash flow because it is seeking a 25
basis point reduction in the spread on the loan.
"We expect Scientific Games will improve its S&P Global
Ratings-adjusted leverage below 8.0x in 2024, from 8.5x as of the
end of 2023, by increasing its EBITDA. We expect the company's
lottery sales will remain resilient and anticipate its 2024 EBITDA
will benefit from incremental EBITDA stemming from new contract
wins. In addition, we expect declining input prices, especially for
paper and ink, along with the realization of benefits from
management's previously implemented cost-mitigation efforts and
contract renegotiations with key suppliers to support an expanded
margin and higher EBITDA this year."
ISSUE RATINGS--RECOVERY ANALYSIS
Key analytical factors
-- S&P assigned its 'B' issue-level rating and '3' recovery rating
to Scientific Games' proposed repriced $2.069 billion term loan B
due 2029. The '3' recovery rating indicates our expectation for
meaningful recovery (50%-70%; rounded estimate: 60%) for lenders in
the event of a payment default.
-- S&P's 'B' issue-level rating and '3' recovery rating on the
company's existing $440 million revolver and $750 million
equivalent euro-denominated term loan are unchanged.
-- S&P's 'B-' issue-level rating and '5' recovery rating on
Scientific Games' $800 million senior unsecured notes are also
unchanged. The '5' recovery rating indicates its expectation for
modest recovery (10%-30%; rounded estimate: 10%) for noteholders in
the event of a payment default.
Simulated default assumptions
-- S&P's simulated default scenario contemplates a payment default
occurring by 2027 (in line with its three-year default horizon for
'B'-rated companies) because of the loss of one or more major
lottery contracts and a severe and sustained economic decline that
leads to a substantial drop in spending on lottery products.
-- S&P assumes Scientific Games will reorganize under its
distressed scenario and use a 6.5x multiple to value the company,
which is in line with the average multiple it uses for the leisure
sector. This multiple reflects the company's strong market position
in instant tickets and the relative stability of lottery sales
during typical economic downturns.
-- S&P assumes the company's $440 million revolver would be 85%
drawn at the time of default.
-- S&P said, "In our analysis, we assume Scientific Games'
domestic operating subsidiaries, which are guarantors of the credit
agreement, generate about 65% of its total EBITDA and that foreign
subsidiaries, which are not guarantors, generate about 35%.
Therefore, we attributed 65% ($1.3 billion) of the net available
recovery value to domestic operating entities and 35% ($0.7
billion) to foreign operating entities."
-- Under S&P's analysis, the senior secured debtholders have a
priority claim against substantially all of the available domestic
value ($1.3 billion) and a priority claim against 65% ($0.45
billion) of the foreign value ($0.7 billion), which represents the
value it has attributed to the foreign stock pledge.
-- Total value attributable to senior secured claims would total
$1.9 billion. S&P said, "We estimate total first-lien senior
secured claims of $2.9 billion at default, leaving a first-lien
unsecured deficiency claim of about $1.2 billion. The first-lien
senior credit facilities' unsecured deficiency claim and the senior
unsecured notes' claim (which we estimate at about $0.8 billion at
default) would constitute pari passu unsecured claims against the
remaining $0.25 billion of recovery value, which represents the
value we attribute to the 35% unpledged foreign equity."
Simplified waterfall
-- Emergence EBITDA: About $320 million
-- EBITDA multiple: 6.5x
-- Gross recovery value: $2.1 billion
-- Net recovery value (after 5% administrative expenses): $2.0
billion
-- Obligor/nonobligor valuation split: 65%/35%
-- Estimated first-lien secured debt: $2.9 billion
-- Total value available to secured debt (including pro rata share
of value available to unsecured deficiency claims): $1.9 billion
--Recovery expectations: 50%-70% (rounded estimate: 60%)
-- Estimated senior unsecured notes: $827 million
-- Pro rata share of value available to unsecured notes: $100
million
--Recovery expectations: 10%-30% (rounded estimate: 10%)
Note: All debt amounts include six months of prepetition interest.
SHAMROCK INDUSTRIES: Unsecureds to Get $2,400/Month for 60 Months
-----------------------------------------------------------------
Shamrock Industries, LLC d/b/a Synergy ReCommerce filed with the
U.S. Bankruptcy Court for the Western District of Tennessee a Small
Business Subchapter V Plan of Reorganization dated May 16, 2024.
The Debtor is a Tennessee limited liability company which provides
third-party logistics services to aid its customers in the sale of
products through online outlets such as Ebay and Amazon.
The Debtor was founded in 2011 by Brian Bray. In 2018 Kyle Zehring
and Frank Winford acquired ownership interests followed by Brian
Spinosa in 2019. In 2020, a dispute arose between several of the
owners. Not wanting to take side, Frank Winford decided to sell his
ownership interest in 2022 and leave the company entirely. However,
the dispute escalated, and Kyle Zehring left the company and took
with him several customers accounting for approximately $60,000 per
month in revenue.
Ultimately, a lawsuit was filed by the Debtor against Kyle Zehring
for stealing business. Kyle Zehring countersued Brian Bray, Brian
Spinosa, and the Debtor for his equity. Kyle Zehring then utilized
delaying tactics to drag the matter out. Years of costly litigation
ensued until a settlement agreement was reached under which the
Debtor would pay Kyle Zehring several hundred thousand dollars.
The Debtor's loss of revenue and large legal fees were still too
much for the Debtor to turn a profit, so the Debtor sought out
financing from several merchant capital loan providers. Each of
these lenders secured their loans with liens against the Debtor's
assets such as accounts receivable, but these liens were lower in
priority because of the Small Business Administration ("SBA") lien.
Unable to service the payments to the SBA and the merchant capital
loan providers, the Debtor filed this Subchapter V Chapter 11 on
February 16, 2024.
As of May 16, 2024, the Debtor has cash on hand of approximately
$180,000. Accordingly, the Debtor will have sufficient cash on hand
to make the initial payment to Classes 1 and 2 under the Plan.
Based on the Financial Projection, the Debtor anticipates that
Classes 1 and 2 will be paid monthly from cash flow.
Class 2 consists of the Allowed Claims of general unsecured
creditors. The SBA's claim in the approximate amount of $2,000,000
is secured by a first priority lien against all the debtor's
assets. On the Petition Date, the Debtor had $483,378.07 worth of
assets. Therefore, the SBA has a secured Class 1 claim of
$483,378.07 and an unsecured Class 2 claim of $1,516,62.93.
Likewise, the claims of B.S.D. Capital, DMKA LLC, Everest Business
Funding, FCA Adv. LLC, Kalamata Capital Funding, Liberatas Funding
LLC, and Parafin Funding LLC are all treated as unsecured Class 2
claims because the Debtor has no assets other than what secures the
SBA claim.
Allowed claims of Class 2 shall be paid as follows: commencing on
the Effective Date, holders of allowed Class 2 claims will receive
a pro-rata share of a $2,400 monthly distribution to be made by the
15th of each month for a total of 60 months. Class 2 is impaired.
Class 3 consists of the Allowed Equity Interests in Synergy of
Brian Bray (85% owner) and Brian Spinosa (15% owner). On the
Effective Date, the holders of the Allowed Equity Interest shall
retain 100% of their respective interests in the Reorganized
Debtor. Other than retaining their Equity Interests in the
Reorganized Debtor, the holders of the Allowed Equity Interests in
the Debtor shall not be entitled to receive any other Distribution
under this Plan on account of such Equity Interests.
The Debtor shall fund the Plan out of its projected disposable
income generated from the operation of its business. Brian Bray
shall remain CEO of the Debtor. Mr. Bray shall be paid $234,000 to
act as CEO. Brian Spinosa shall remain CFO of the Debtor. Mr.
Spinosa shall be paid $225,000 to act as CFO.
A full-text copy of the Subchapter V Plan dated May 16, 2024 is
available at https://urlcurt.com/u?l=2H9eme from PacerMonitor.com
at no charge.
Attorneys for the Debtor:
Michael P. Coury, Esq.
Glankler Brown PLLC
6000 Poplar Avenue
Suite 400
Memphis, Tennessee 38119
Telephone: (901) 576-1886
Email: mcoury@glankler.com
rhutchens@glankler.com
About Shamrock Industries
Shamrock Industries, LLC partners with its clients to refurbish,
repackage, remarket, and resell their returned, distressed and
excess inventory. The Company is uniquely positioned to deliver
expert solutions by leveraging access to its proprietary
NobodyLower.com website and more than 20 years of experience in
sales and marketing, forward and reverse logistics, returns
processing, multiple e-commerce channels, refurbishment and
warranty support.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. W.D. Tenn. Case No. 24-20699) on February
16, 2024. In the petition signed by Brian J. Bray, chief executive
officer, the Debtor disclosed up to $1 million in assets and up to
$10 million in liabilities.
Judge Denise E. Barnett oversees the case.
Michael P. Coury, Esq., at GLANKLER BROWN PLLC, represents the
Debtor as legal counsel.
SIR TAJ: Court OKs Deal on Cash Collateral Access
-------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California,
Los Angeles Division, entered an order authorizing John P. Pringle,
as Chapter 11 Trustee for Sir Taj, LLC, to use cash collateral, on
an interim basis, in accordance with his agreement with Wells Fargo
Bank, National Association, as Trustee, on Behalf of the Registered
Holders of CSAIL 2018-CX11 Commercial Mortgage Trust, Commercial
Mortgage Pass-Through Certificates, Series 2018-CX11.
As previously reported by the Troubled Company Reporter, on
February 22, 2018, Natixis, New York Branch, a direct branch of
Natixis S.A., a societe anonyme a conseil d administration (public
limited company) organized and existing under the laws of France
made a $7.575 million loan to Borrower. The Loan is evidence by,
among other instruments: (i) a Loan Agreement dated as of February
22, 2018, between Borrower and Original Lender, and (ii) a
Promissory Note dated February 22, 2018, executed by Debtor in
favor of Original Lender in the original principal sum of $7.575
million.
The Loan is secured by, among other things, a Deed of Trust,
Assignment of Leases and Rents, Security Agreement and Fixture
Filing dated as of February 22, 2018, and recorded on February 26,
2018, in the official records of Los Angeles County, California as
Document No. 20180184186, with respect to a hotel property located
at 120 South Reeves Drive, Beverly Hills, California 90212.
Effective as of February 26, 2018, Original Lender assigned the
Loan Documents to Natixis Real Estate Capital, LLC pursuant to the
Assignment of Deed of Trust, Assignment of Leases and Rents,
Security Agreement and Fixture Filing, recorded in the Official
Records on March 9, 2016, as Document No. 20180230065. In addition,
Debtor endorsed the Note in favor of NREC pursuant to the certain
Allonge.
Effective as of April 18, 2018, NREC assigned the Loan Documents to
Secured Creditor pursuant to that certain Assignment of Deed of
Trust, Assignment of Leases and Rents, Security Agreement and
Fixture Filing, recorded in the Official Records on May 11, 2018,
as Document No. 20180468350. In addition, NREC endorsed the Note in
favor of Secured Creditor pursuant to that certain Allonge.
Accordingly, Secured Creditor is now the holder of the Note,
beneficiary under the Deed of Trust and secured party and/or
assignee under all of the other Loan Documents.
The parties agreed that the Trustee may use cash collateral until
the earlier of July 31, 2024, or entry of an order lifting the
automatic stay with respect to Secured Creditor or dismissing the
case, or until termination.
Trustee will remit to Secured Creditor monthly interest payments at
the non-default rate of interest as set forth in the Loan Documents
no later than the 15th day of each month.
As adequate protection, the Secured Creditor will be granted a
replacement lien in the Debtor's assets generated postpetition of
the same type and class that comprise Secured Creditor's
prepetition collateral to the extent necessary to prevent
diminution in Secured Creditor's prepetition collateral securing
the Loan resulting from use of Secured Creditor's prepetition
collateral.
To the extent that the Replacement Lien is determined by the
Bankruptcy Court to be inadequate to provide adequate protection to
Secured Creditor, Secured Creditor will have a super-priority claim
pursuant to 11 U.S.C. Section 507(b).
The Replacement Lien and security interest granted are valid,
enforceable and fully perfected, and no filing or recordation or
any other act in accordance with any applicable local, state or
federal law is necessary to create or perfect such lien and
security interest; provided, however, that upon request of Secured
Creditor, Trustee will execute such security and perfection
documentation as may be reasonably required to create or perfect
such liens under applicable nonbankruptcy law.
A copy of the court's order and the Debtor's budget is available at
https://urlcurt.com/u?l=RgMsUY from PacerMonitor.com.
The Debtor projects total undistributed operating expenses, on a
monthly basis, as follows:
$46,075 for June 2024;
$45,025 for July 2024; and
$44,583 for August 2024.
About Sir Taj LLC
Sir Taj, LLC in Beverly Hills CA, filed its voluntary petition for
Chapter 11 protection (Bankr. C.D. Cal. Case No. 24-10874) on Feb.
6, 2024, listing $10 million to $50 million in assets and $500,000
to $1 million in liabilities. Sergey Vershinin as manager, signed
the petition.
Judge Vincent P. Zurzolo oversees the case.
LAW OFFICES OF MICHAEL D. KWASIGROCH serve as the Debtor's legal
counsel.
SOUTH HILLS: Hearing on Bid Rules Set for June 13
-------------------------------------------------
South Hills Operations, LLC will ask the U.S. Bankruptcy Court for
the Western District of Pennsylvania at a hearing on June 13 to
approve the bid rules governing the sale of substantially all
assets of its affiliates.
The assets up for sale include real property and other assets used
to operate seven senior care facilities owned by Maybrook-C
Briarcliff Opco, LLC and 14 other Maybrook affiliates of South
Hills Operations.
Also included in the sale are assets used to operate two senior
care facilities owned by Cheswick Rehabilitation and Wellness
Center, LLC, North Strabane Rehabilitation and Wellness Center,
LLC, 3876 Saxonburg Boulevard Propco, LLC, and 100 Tandem Village
Road Propco, LLC.
The assets are being sold to Kadima Healthcare Group, Inc. or to
another buyer who will be selected as the winning bidder at a
court-supervised auction.
Kadima offered to buy the assets for $53 million and assume certain
liabilities of the sellers.
In the event it is not selected as the winning bidder, Kadima will
receive a termination fee of $1.325 million and expense
reimbursement of up to $300,000.
The proposed bid rules give interested buyers until July 12, at
5:00 p.m. (Eastern Time) to place their bids on the assets. Each
bid must be accompanied by a $1.35 million deposit.
An auction will be conducted on July 17, at 10:00 a.m. (Eastern
Time), if the sellers receive offers by the bid deadline.
The bid rules provide for an initial overbid amount of $54.875
million. Subsequent incremental bids at the auction must be in the
amount of $250,000.
The hearing to approve the sale of assets to the winning bidder is
scheduled for Aug. 1, at 10:00 a.m. (Eastern Time).
CIBC Bank, USA asserts a first priority lien in the senior care
facilities. The bank will be paid in full from the net sale
proceeds, subject to carve-outs for any bid protections afforded to
Kadima.
The remaining proceeds will be held by the sellers pending further
order of the bankruptcy court.
About South Hills Operations
South Hills Operations, LLC and its affiliates operate 13 skilled
nursing facilities in Pennsylvania. While they do not have
identical ownership, there is substantial common ownership among
the various debtor entities, and they are affiliates of one
another.
The Debtors filed Chapter 11 petitions (Bankr. W.D. Pa. Lead Case
No. 24-21217) on May 17, 2024, with $1 million to $10 million in
assets and $10 million to $50 million in liabilities.
Judge Carlota M. Bohm oversees the cases.
The Debtors tapped Whiteford Taylor & Presto and Bass, Berry &
Sims, PLC as legal counsels; Ankura Consulting, LLC as
restructuring advisor; and Blueprint Healthcare Real Estate
Advisors, LLC and Cummings and Co. Realtors, LLC as financial
advisors.
The U.S. Trustee for Region 3 appointed an official committee to
represent unsecured creditors in the Debtors' Chapter 11 cases.
SPIRIT AIRLINES: S&P Lowers ICR to 'CCC' on Approaching Maturities
------------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on Spirit
Airlines Inc. to 'CCC' from 'CCC+'. S&P also lowered its ratings on
Spirit's enhanced equipment trust certificates (EETCs) by one
notch, in line with the lower issuer credit rating.
The negative outlook reflects the uncertainty around the company's
ability to address its upcoming 2025 maturities, the sustainability
of its capital structure over the longer term, and S&P's view that
a distressed exchange is likely.
S&P said, "In our view, recent events indicate a rising probability
of a restructuring that we consider tantamount to a distressed
exchange in the next 12 months. Spirit's looming maturities include
a $1.1 billon loyalty bond due in September 2025 and a $500 million
convertible note due in 2026. After the termination of the JetBlue
merger was announced in March, the company stated that it retained
advisors to assess options to refinance upcoming maturities. During
the first quarter earnings release, management stated that they had
begun discussions with the bondholders, with the current plan to
have a resolution this summer ahead of its investor day in August.
Spirit's debt has been trading significantly below par, which we
believe signals lenders' increasing doubts over the company's
performance and possibly indicating that investors may not be made
whole in a refinancing transaction.
"We believe Spirit will face a significant liquidity shortfall as
the loyalty bonds become current in a few months. Spirit had cash
and equivalents of $879 million as of March 31, 2024, with
additional support from its undrawn $300 million revolver. The
company benefits from additional liquidity this year from aircrafts
on the ground (AOG) compensation ($175 million), aircraft deferrals
($230 million), and sale-leaseback proceeds ($100 million); we
project year-end liquidity will be about $1 billion. Nevertheless,
the $1.1 billion loyalty bonds due in 2025 will become current this
September, at which point we believe the company will have a
significant liquidity shortfall because it cannot generate
sufficient cash from its operations to meet upcoming debt
obligations, absent refinancing. Furthermore, we note that the
revolver matures concurrently with the loyalty bonds.
"We expect various operating challenges to continue to hamper
Spirit's ability to improve its profitability and cash flow
generation through 2025. We expect low-single-digit percent revenue
growth, coupled with S&P Global Ratings-adjusted EBITDA margins of
about 6-7%, will result in free cash flow of about negative $340
million in 2024, which is about $150 million lower than our
previous forecast." Weak revenue generation amid supply-demand
imbalance in the company's key domestic leisure markets continues
to hinder performance. Additionally, Pratt & Whitney engine issues
are limiting capacity growth and pressuring fleet utilization. Due
to the ongoing engine inspections, Spirit now expects to have an
average of 25 AOG through the year, with 40 at the end of the year
(out of current fleet of 207 aircraft); this resulted in further
reduction to capacity guidance for 2024. For 2025, Spirit estimates
the number of AOGs will grow to 70 by the end of the year, while
also announcing a deferral agreement which will shift some aircraft
deliveries into 2030 and 2031, together translating to a
high-single-digit percent year-over-year decline in capacity
guide.
In addition to the considerable topline impact, the AOGs have
pressured fleet utilization, which declined by 7% year-over-year in
the first quarter. S&P Global Ratings-adjusted EBITDA margins in
the 12-months-ended March 31, 2024, were 3.4%, down from 7.9% a
year ago, and we expect profitability will be constrained through
the remainder of the year by lower capacity expansions (and
associated efficiency gains), lower utilization, competitive
pricing environment, and staffing challenges. S&P forecasts the
company will continue to report sizeable a free cash flow deficit
over at least the next 12 months.
S&P said, "We note that Spirit has undertaken some actions to
improve performance, such as adjusting its network and routes to be
more in line with the current demand environment, rightsizing its
pilot staff for lower future capacity, introducing new products,
and a potential rebrand. While we expect these initiatives to
achieve some margin improvement toward the latter half of the year,
our current forecast does not assume a successful pivot of Spirit's
business model within the next two years.
"The negative outlook reflects the uncertainty around Spirit's
ability to address its upcoming debt maturity in 2025, the
sustainability of its capital structure, and our belief that a
distressed exchange is likely within the next 12 months. We expect
Spirit's operating performance will remain significantly affected
by engine issues that constrain capacity growth and excess supply
in its key leisure markets, leading to negative free cash flow at
least through 2024.
"We could lower our rating on Spirit if we believe a default or
distressed exchange appears inevitable within the next six months.
"We could raise our ratings on Spirit if we no longer view a
distressed exchange as likely, in conjunction with a recovery in
its operating performance."
SPLASH BEVERAGE: Reports $4.7MM Net Loss in Q1 2024
---------------------------------------------------
Splash Beverage Group, Inc. filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q reporting a net loss
of $4.7 million on $1.5 million of net revenue for the three months
ended March 31, 2024, compared to a net loss of $3.7 million on
$5.8 million of net revenue for the three months ended March 31,
2023.
The Company historically has incurred significant losses and
negative cash flows from operation since inception and had an
accumulated deficit of approximately $136.7 million through March
31, 2024. During the three-month period ended March 31, 2024, the
Company's net cash used in operating activities totaled
approximately $1.3 million. Additionally, the Company's current
liabilities exceed its current assets, and it has a working capital
deficit.
During the year ended December 31, 2023, the Company sustained a
net loss of approximately $21 million and used cash in operating
activities of $10.2 million, which excludes non-cash charges and
financing activities. To date, the Company has generated cash flows
from issuances of equity and indebtedness.
As of March 31, 2024, the Company has $8,558,467 in total assets,
$18,061,155 in total liabilities, and $9,502,688 in total
stockholders' deficit.
The Company received approximately $8.6 million from the issuance
of debt for the three months ending March 31, 2024. This event
served to mitigate the conditions that previously raised
substantial doubt about the Company's ability to continue as a
going concern.
Management's plans in regard to these matters include actions to
sustain the Company's operations, such as seeking additional
funding to meet its obligations and implement its business plan.
However, there is no assurance that the Company will be successful
in implementing its plans or in raising additional funds. If the
Company is unable to raise additional funding to meet its working
capital needs in the future, it may be forced to delay, reduce, or
cease its operations.
A full-text copy of the Company's Form 10-Q is available at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1553788/000173112224000818/e5670_10-q.htm
About Splash Beverage Group
Fort Lauderdale, Fla.-based Splash Beverage Group, Inc. is a
portfolio company managing multiple brands across several growth
segments within the consumer beverage industry. Splash has built
organizational capabilities and an infrastructure enabling it to
incubate and/or acquire brands with the intention of efficiently
accelerating them to higher volume and sales revenue.
As of December 31, 2023, the Company had $9.9 million in total
assets, $15.5 million in total liabilities, and $5.6 million in
total stockholders' deficit.
Encino, Calif.-based Rose, Snyder & Jacobs, the Company's auditor
since 2023, issued a "going concern" qualification in its report
dated March 29, 2024, citing that the Company suffered recurring
losses from operations and has an accumulated deficit and a working
capital deficiency that raise substantial doubt about its ability
to continue as a going concern.
ST. CLAIR COUNTY SD: Moody's Affirms 'Ba1' Issuer & GOULT Ratings
-----------------------------------------------------------------
Moody's Ratings has affirmed St. Clair County School District 189
(East St. Louis), IL's issuer and general obligation unlimited tax
(GOULT) ratings at Ba1. As of fiscal 2023, the district has about
$10 million in GOULT debt outstanding. The stable outlook has been
removed.
The ratings were affirmed based on continued support from the State
of Illinois (A3 positive). The district's reserves are strong,
reflecting state support and some remaining federal aid. However,
the district plans to spend some fund balance over the next several
years. The outlook was removed because Moody's does not assign
outlooks to local governments with this amount of debt.
RATINGS RATIONALE
The Ba1 issuer rating reflects the district's strong reserve
position that will moderate steadily over the next several years as
the district addresses certain outstanding capital needs with
planned fund balance draws and exhausts remaining ESSER
allocations. The district has benefited in recent years from
ongoing state oversight and the infusion of additional state and
federal pandemic-related aid. Reserves will decline over the next
several years to around 20% of revenue because of planned draws for
capital needs as mandated by the state. The district will remain
challenged by its weak economic fundamentals with very low resident
income and full value per capita at just under 45% of the US and
around $25,000 respectively. The district has a consistent trend of
declining enrollment with a three-year CAGR of negative 4.2%. The
enrollment declines mirror overall population trends in the region,
but management expects it will stabilize over the next several
years supported by modest residential developments underway. The
revenue impact of ongoing enrollment loss is currently mitigated by
the state's hold-harmless provision, which keeps the district's
base minimum funding to at least what it was in the prior year even
if enrollment declines. Overall leverage will remain low at under
50% of revenue supported by rapid debt amortization, although it is
exposed to contingent risks related to state support for an
underfunded teachers' pension plan.
The Ba1 GOULT rating is equivalent to the Ba1 issuer rating based
on the district's all available funds pledge, supported by its
authority to levy an unlimited property tax levy dedicated to debt
service.
RATING OUTLOOK
Moody's does not assign outlooks to local government issuers with
this amount of debt.
FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATINGS
-- Material strengthening of economic indicators, such as growth
of resident income to 65% of the US and full value per capita to
$40,000, in line with Baa-rated issuers
-- Maintenance of available fund balance at levels above 30% of
revenue following expiration of pandemic-related federal support
FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATINGS
-- Material narrowing of available fund balance beyond current
expectations of around 20% of revenue
-- Reduced state support for the district's operations, including
state aid reductions or pension cost shift
-- Substantial increase in leverage nearing 250% of revenue
LEGAL SECURITY
The district's GOULT debt is backed by an all available funds
pledge and dedicated property tax levy unlimited as to rate or
amount.
PROFILE
St. Clair County School District 189 (East St. Louis), IL is
situated in St. Clair County (Aa3), located across the Mississippi
River from St. Louis, MO (A2 stable). The district provides
pre-kindergarten through twelfth grade education to just under
4,500 students.
METHODOLOGY
The principal methodology used in these ratings was US K-12 Public
School Districts Methodology published in January 2021.
STARCO BRANDS: Reports $4.3MM Net Loss in Q1 2024
-------------------------------------------------
Starco Brands, Inc. filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q reporting a net loss
of $4,270,556 on $15,490,681 of revenue for the three months ended
March 31, 2024, compared to a net loss of $1,663,130 on $11,143,801
of revenue for the three months ended March 31, 2023.
The Company identified that a substantial doubt exists related to
the Company's ability to meet its obligations as they become due
within one year of the date of the financial statements being
issued. Principal conditions that gave rise to this substantial
doubt include historical net losses as indicated by the Company's
accumulated deficit of approximately $68,000,000 at March 31, 2024,
which includes the impact of its net loss of $4,270,556 for the
three months ended March 31, 2024, and total debt on the balance
sheet of $7,631,247 as of March 31, 2024, with all debt coming due
within 12 months.
Management evaluated the principal conditions that initially give
rise to the substantial doubt and note that the historical net
losses and accumulated deficit impact are justified as they are
primarily made up of non-cash expenses or one-time non-recurring
expenses, such as goodwill impairment, stock-based compensation
expense, fair value share adjustment loss and acquisition
transaction expenses. Total debt of $7,631,247 on the balance sheet
as of March 31, 2024 includes $4,472,500 of notes payable to Ross
Sklar, who has a large minority ownership of the Company that
provides incentive for Mr. Sklar to extend or refinance the notes
before the notes become due, as seen historically.
Management plans include:
(i) continuing to increase net cash provided by operating
activities, which was $822,453 for the three months ended March 31,
2024, while decreasing net cash provided by financing activities,
and
(ii) obtaining an alternative financing source to pay off all
current debt outstanding and to provide additional working capital,
if needed. To achieve these objectives, management has proposed and
approved plans to increase top line revenue for each segment while
decreasing overall expenses as a percentage of revenue, as a result
of realizing synergies from the acquisitions of AOS, Skylar and
Soylent, and utilizing the Company's back-end shared service model
to reduce expenses.
The Company is in ongoing negotiations to obtain additional
financing to repay historical debt and provide additional working
capital. These conditions and the ability to successfully resolve
these factors raise substantial doubt about the Company's ability
to continue as a going concern.
As of March 31, 2024, the Company has $80,714,240 in total assets,
$40,662,554 in total liabilities, and $40,051,686 in total
stockholders' equity.
A full-text copy of the Company's Form 10-Q is available at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1539850/000149315224019905/form10-q.htm
About Starco Brands
Santa Monica, CA-based Starco Brands (OTCQB: STCB) --
starcobrands.com -- invents consumer products with
behavior-changing technologies that spark excitement. Starco Brands
identifies whitespaces across consumer product categories. Starco
Brands publicly trades on the OTCQB stock exchange so that retail
investors can invest in STCB alongside accredited individuals and
institutions.
As of December 31, 2023, the Company had $83.3 million in total
assets, $57.7 million in total liabilities, and $25.7 in total
stockholders' equity.
Irvine, California-based Macias, Gini, and O'Connell LLP, the
Company's auditor since 2022, issued a "going concern"
qualification in its report dated April 3, 2024, citing that the
Company has an accumulated deficit of approximately $63.8 million
at Dec. 31, 2023 including the impact of its net loss of
approximately $46.4 million for the year ended Dec. 31, 2023. Net
cash proided by operating activities was $0.7 million for the year
ended Dec. 31, 2023. The Company's ability to raise additional
capital through the future issuances of common stock and/or debt
financing is unknown. The obtainment of additional financing and
the successful development of the Company's contemplated plan of
operations, to the attainment of profitable operations are
necessary for the Company to continue operations. These conditions
and the ability to successfully resolve these factors raise
substantial doubt about the Company's ability to continue as a
going concern.
STEWARD HEALTH: Meland Budwick Advises Personal Injury Claimants
----------------------------------------------------------------
The law firm of Meland Budwick, P.A., filed a verified statement
pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure
to disclose that in the Chapter 11 cases of Steward Health Care
System LLC and affiliates, the firm represents Creditors in their
capacity as personal injury claimants.
Counsel does not represent or purport to represent any other
entities in connection with the Chapter 11 Cases and does not
undertake to represent the interests of, and are not a fiduciary
for, any creditor, party in interest, or other entity that has not
signed retention agreements with Counsel.
Meland Budwick, P.A. nor its attorneys hold any disclosable
economic interests (as that term is defined in Bankruptcy Rule
2019(a)(1)) in relation to the Debtors.
The Creditors' address and the nature and amount of disclosable
economic interests held in relation to the Debtors are:
1. Thania Carmela Mercedes Mendoza Aguilar, as surviving Spouse and
soon to be appointed Personal
Representative of the Estate of Gonzalo Alvarez Barreiro
Christopher S. Russomanno, Esq.
Russomanno & Borrello, P.A.
150 West Flagler Street - PH 2800
Miami, FL 33130
305-373-2101
chris@russomanno.com
* Unliquidated unsecured claims for professional medical
negligence and vicarious liability
against Debtors Steward CGH, Inc. d/b/a Steward Coral Gables
Hospital, Sandor Andres Romero
Basso, M.D., Nova Medical Services, LLC., Eduardo Colunga, APRN,
Aldo Heriberto Martinez
Fleites, M.D., Unicardio Medical Center Corp., Alvis Jesus
Linares, APRN, and Allied NP Primary
Care (presuit)
2. Lisa Malick and Jason Malick, individually and as personal
representatives of the estate of
Lillian Malick
Timothy D. Groves, Esq
Dornick, Cunningham, Yaffa
2401 PGA Blvd., Suite 140
Palm Beach Gardens, FL 33410
561-625-6260
tim@pbglaw.com
* Unliquidated unsecured claims for professional medical
negligence and general liability
against Debtor Steward Medical Group, Inc. and Rockledge
Regional Medical Center Lisa Malick,
individually, and as Personal Representative of the Estate of
Lillian Malick, and Jason Malick
v. Steward Rockledge Hospital, Inc. et al. Case No.
052022CA047042XXXXXX (18th Judicial
Circuit, Brevard, County, Florida)
3. Melissa R. Moore, individually and as surviving parent and
Personal Representative of the
Estates of Zayon and Zaynia Moore Fuller, Deceased
Michael P. Bonner, Esq.
Bonner Law
201 Sevilla Avenue, Suite 301
Coral Gables, FL 33134
mbonner@bonner-law.com
305-676-4878
* Unliquidated unsecured claims for professional medical
negligence and vicarious liability
against Debtors Steward NSMC, Inc. d/b/a Steward North Shore
Medical Center, Medical Care for
Women, LLC and Marie-Carmelle Liburd, M.D. (presuit)
Attorneys for Creditors:
James C. Moon, Esq.
MELAND BUDWICK, P.A.
3200 Southeast Financial Center
200 South Biscayne Boulevard
Miami, Florida 33131
Telephone: (305) 358-6363
Telecopy: (305) 358-1221
Email: jmoon@melandbudwick.com
About Steward Health Care
Steward Health Care System LLC owns and operates the largest
private physician-owned for-profit healthcare network in the U.S.
Headquartered in Dallas, Texas, Steward's operations include 31
hospitals in eight states, approximately 400 facility locations,
4,500 primary and specialty care physicians, 3,600 staffed beds,
and nearly 30,000 employees. Steward Health Care provides care to
more than two million patients annually.
Steward and 166 affiliated debtors filed chapter 11 petitions
(Bankr. S.D. Texas Lead Case No. 24-90213) on May 6, 2024, in the
U.S. Bankruptcy Court for the Southern District of Texas, and the
Honorable Christopher M. Lopez oversees the proceeding.
Weil, Gotshal & Manges LLP is serving as the Company's legal
counsel. AlixPartners, LLP is providing financial advisory services
to the Company, and John Castellano of AlixPartners is serving as
the Company's Chief Restructuring Officer. Lazard Freres & Co. LLC,
Leerink Partners LLC, and Cain Brothers, a division of KeyBanc
Capital Markets Inc. are providing investment banking services to
the Company. McDermott Will & Emery is special corporate and
regulatory counsel for the company. Kroll is the claims agent.
SUNMEADOWS LLC: U.S. Trustee Appoints Creditors' Committee
----------------------------------------------------------
The U.S. Trustee for Region 16 appointed an official committee to
represent unsecured creditors in the Chapter 11 case of Sunmeadows,
LLC.
The committee members are:
1. Richard Valdez
45625 Gleneagles Court
Temecula, CA 92592
Phone: (951) 660-5860
Email: vslengineering@gmail.com
2. Schoff Enterprises, LLC
c/o James Schoff, Managing Member
9557 Hildreth Lane,
Fernandina Beach, FL 32034
Phone: (216) 496-1501
Email: jschoff@schoffent.com
3. Bryan Avilla
14271 Jeffrey Road, # 370
Irvine, CA 92620
Phone: (619) 723-5485
Email: bavilla@newbridgehomes.com
Official creditors' committees serve as fiduciaries to the general
population of creditors they represent. They may investigate the
debtor's business and financial affairs. Committees have the right
to employ legal counsel, accountants and financial advisors at a
debtor's expense.
About Sunmeadows LLC
Sunmeadows, LLC filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No.
24-11012) on April 22, 2024. In the petition signed by William Lo,
manager, the Debtor disclosed $50 million to $100 million in assets
and $10 million to $50 million in liabilities.
The Debtor tapped Robert P. Goe, Esq., at Goe Forsythe & Hodges LLP
as counsel and James Wong at Armory Consulting Co. as financial
advisor.
SUPPLY SOURCE: U.S. Trustee Appoints Creditors' Committee
---------------------------------------------------------
The U.S. Trustee for Region 3 appointed an official committee to
represent unsecured creditors in the Chapter 11 cases of Supply
Source Enterprises, Inc. and its affiliates.
The committee members are:
1. Jiangsu Bytech Medical Supplies Co., Ltd.
Attn: Andy Yang
No. 88 Junshi Road
Petroleum Equipment Industrial Park
Yancheng City, Jiangsu Province
224700 China
Phone: 1-392-116-2444 / 86-510-850-93588
Fax: 86-510-857-32588
Email: andy@bytech-dt.com
2. Xiantao Crosscare Protective Products Co., Ltd.
Attn: Chony Wang and Jolene Wee
No. 168 Xinming Road, Gaojiadu Village
Xiantao City, Hubei Province
433000 China
Phone: 86-155-728-86866 / 1-929-502-7715
Email: crosscare_chony@163.com
jwee@jw-infinity.com
3. Xiantao Deming Healthcare Products Co., Ltd.
Attn: Biao Li and Leo Liao
No. 198 Pengchang Ave.
Pengchang Town
Xiantao City, Hubei Province
433018 China
Phone: 86-136-973-98957
Email: deming817@vip.sina.com
leo.liao@xtdeming.net.
4. Hiten Nonwoven Healthcare Products (Hubei) Ltd.
Attn: Steven Xiong
No. 29, South of Pengchang Ave, Pengchang Town
Xiantao City, Hubei Province
433018 China
Phone: 86-186-728-26666
Email: steven@hiten.com.cn
5. Xiantao Yilin Protective Products Co., Ltd.
Attn: Zhonglin (Mike) Zou
No. 19 Jianshe Road, Pengchang Ave
Xiantao City, Hubei Province
433000 China
Phone: 86-155-878-03588
Email: kobe-care@vip.163.com
Official creditors' committees serve as fiduciaries to the general
population of creditors they represent. They may investigate the
debtor's business and financial affairs. Committees have the right
to employ legal counsel, accountants and financial advisors at a
debtor's expense.
About Supply Source Enterprises
Supply Source Enterprises Inc. --
https://hig.com/portfolio/supply-source-enterprises/ -- is a
virtual manufacturer of branded and private label personal
protective equipment and janitorial, safety, hygiene and sanitation
products. It is headquartered in Cleveland, Ohio.
Supply Source Enterprises and its affiliates sought relief under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case
No. 24-11054) on May 21, 2024. In its petition, Supply Source
Enterprises reported $50 million to $100 million in assets and $100
million to $500 million in liabilities.
Judge Brendan Linehan Shannon oversees the cases.
The Debtors tapped McDermott Will & Emery, LLP and Potter Anderson
& Corroon, LLP as legal counsels; Thomas Studebaker of Triple P
RTS, LLC (a Portage Point affiliate) as chief restructuring
officer. Kurtzman Carson Consultants is the noting and claims
agent.
SYNAPSE FINANCIAL: Judge Barash Appoints Independent Ch. 11 Trustee
-------------------------------------------------------------------
David Dayen of The American Prospect reports that a federal
bankruptcy judge appointed an independent Chapter 11 trustee to
failed fintech middleman Synapse on Friday, as more than 200,000
customers still await access to their money.
The company had planned "to terminate all employees by close of
business today," according to one of its attorneys who participated
in a Zoom-only hearing on Friday, May 24, 2024. Synapse has drained
all of its assets and even before today was operating with a
skeleton crew. "All our funds are gone, Your Honor," said one of
its attorneys. Meanwhile, CEO Sankaet Pathak called into the
bankruptcy hearing from Santorini island in Greece, and the general
counsel Tracey Guerin was in Rome.
Synapse's chaotic bankruptcy, and particularly the collapse of a
deal to buy its assets out of the Chapter 11 process, has led to
customers of fintech companies who worked with Synapse being locked
out of their bank-like accounts for nearly two weeks. The Chapter
11 trustee, who will take over daily management from the CEO and
top officers, would have the primary goal of untangling the
disputes Synapse has with its bank sponsors and get people back
their money.
"The trustee can immediately start speaking to parties in interest
and developing a plan to fund the continued preservation of
Synapse's systems and data, and to continue the process of sharing
information and hopefully reaching some agreement with the
participating banks that allows funds to be returned to end users,
to the rightful owners of those funds, as soon as humanly
possible," said Judge Martin Barash of the Central District of
California, who has been hearing the bankruptcy case. "It's not
necessary to assign blame to do what needs to be done. Today what's
important is getting people their money."
The U.S. bankruptcy trustee for the region proposed the assignment
of a Chapter 11 trustee, rather than converting the case to a
Chapter 7 liquidation, which most people associated with the
bankruptcy agree will eventually be needed. The U.S. trustee
expected the Chapter 11 trustee to be appointed today, as one
candidate has already been approved and vetted.
Secured lenders—including the remnants of failed Silicon Valley
Bank—wanted to immediately move to Chapter 7 to preserve cash.
But Synapse is still needed to resolve accounts and return money to
customers.
The problem is that there are still major discrepancies between
Synapse's numbers and those of the bank sponsors it partnered with
to provide financial services to fintechs. The ledger discrepancies
are "substantial," said one attorney for the fintech Yotta, one of
the largest caught up in the chaos. Synapse has stated that $111
million in Yotta funds are in the hands of its sponsor bank Evolve,
but Evolve puts that number at only $80 million. "The fact is that
this is a house on fire," the Yotta attorney stated.
Since last Friday, no users have been able to create any
transactions for their accounts, at fintechs like Yotta, Juno, and
Yieldstreet. Some of these companies have been "gifting" Synapse
money to keep it alive while it works out the account figures.
Synapse management has been insistent that it has checked and
confirmed all the numbers on the ledger. But the extreme
differences with the sponsor banks make the Chapter 11 trustee's
job difficult, and threaten to considerably delay the ability for
customers to get their money back. "As the court has seen, there
appears to be a large disagreement," said the attorney for Evolve
Bank at the hearing. "We think a Chapter 11 trustee will allow us
to get the information we need. We hope that dealing directly with
the trustee, we can cut to the chase."
Lineage Bank, another sponsor bank, was accused by one fintech,
Yieldstreet, of being "unresponsive and intentionally obstructive"
about the return of customer funds. "Lineage has not been available
and counsel has not been specific in what they need," said
Yieldstreet's attorney.
Lineage fired back that the bank had been in communication with all
parties, but they simply did not believe Synapse's figures. "The
records are demonstrably flawed and cannot be verified. The ledger
does not match the flow of funds that we can see," said Lineage's
attorney. "We are not going to be bullied by wealthier fintechs …
The primary problem that faces all of the banks and fintechs is
that the debtors' records are not reliable."
Judge Barash ruled that the Chapter 11 trustee would need to file
regular status reports weekly, and status conferences would
continue in person on Fridays. He directed the trustee to "meet and
confer" with all the parties in the case, and he forcefully
reiterated a preservation order for Synapse's current and former
employees. "Anybody with access to Synapse systems and data, you
are specifically enjoined from doing anything that would delete,
corrupt or otherwise make unavailable any of Synapse’s electronic
systems or data, or any of its hard copy documents if it has any,"
said the judge. "And if you do there will be serious
consequences."
The judge also expressed continued regret that customers still
didn't have any access to their money. "You can't help but feel
awful when you hear people say they can't buy food, or make a
mortgage payment, or pay rent," he said. "This is a horrible
situation."
About Synapse Financial Technologies
Headquartered in San Francisco, California, Synapse Financial
Technologies, Inc. -- https://synapsefi.com/ -- is a
banking-as-a-service platform for embedded finance solutions
worldwide.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. C.D. Cal. Case No. 24-10646) on April 22,
2024. In the petition signed by Sankaet Pathak, chief executive
officer, the Debtor disclosed up to $50 million in assets and
liabilities.
Judge Martin R. Barash oversees the case.
Ron Bender, Esq., at Levene, Neale, Bender, Yoo & Golubchik L.L.P.
represents the Debtor as legal counsel.
TAKEOFF TECHNOLOGIES: Hits Chapter 11 Bankruptcy Protection
-----------------------------------------------------------
Janine Phakdeetham of Bloomberg News reports that Takeoff
Technologies Inc. has filed a voluntary petition for relief under
Chapter 11 of the US Bankruptcy Code in the District of Delaware.
The Company said it plans to complete a marketing process to seek
interest in one or more sales of some or all of its assets.
Takeoff is seeking court approval to enter into pact with a
consortium of customers to provide about $9.6 million in
debtor-in-possession financing. Financing to enable remaining
operations to continue through the marketing and sale process.
The Company will wind down assets not acquired through the sale
process.
About Takeoff Technologies
Takeoff Technologies, Inc. -- https://www.takeoff.com/ -- offers a
dynamic eGrocery solution that helps retailers achieve profitable
online growth by leveraging hyperlocal automation.
Takeoff Technologies sought Chapter 11 protection (Bankr. D. Del.
Csae No. 24-11106).
TOWNSQUARE MEDIA: S&P Raises ICR to 'B+', Outlook Stable
--------------------------------------------------------
S&P Global Ratings raised its issuer credit rating on U.S.-based
radio broadcaster and digital marketer Townsquare Media Inc. to
'B+' from 'B' based on its expectation that its leverage will
remain at or below 5x over the next couple of years.
S&P said, "At the same time, we raised our issue-level rating on
the company's $504 million (outstanding) senior secured notes due
2026 to 'B+'. The '3' recovery rating on this debt remains
unchanged.
"The stable outlook reflects our view that Townsquare will sustain
S&P Global Ratings adjusted gross leverage at or below 5x,
supported by our expectation of relatively stable EBITDA generation
over the next couple of years.
"The upgrade reflects our expectation for Townsquare's leverage to
remain at or below 5x over the next couple of years. We expect
Townsquare will modestly improve S&P Global Ratings-adjusted gross
leverage to about 4.7x by the end of 2024 from 4.8x in 2023, driven
by modest EBITDA growth of about 1%. At the same time, we expect
the company will generate $50 million-$55 million of free operating
cash flow (FOCF) in 2024 (similar to 2023 levels).
"We expect the company will generate $10 million-$15 million of
discretionary cash flow in 2024 (after a share buyback and option
settlement in April and expected dividend payments), which could
support debt reduction. While we do not include any voluntary debt
repayment in our forecast, the company has shown a past willingness
to do so, repaying approximately $27 million of debt in 2023.
"We expect the company will maintain a sizable cash balance ($57
million as of March 31, $28 million as of April 30 following the
share buyback and option settlement) since it operates without a
revolving credit facility. While we expect a modest decline in
EBITDA in 2025 due to lower political revenue in an odd year, we
expect leverage will remain at or below our 5x threshold for the
rating."
The company's businesses are showing signs of stability.
Townsquare's subscription digital marketing services business,
Townsquare Interactive, has stabilized after a sharp subscriber
decline in 2023 (some small businesses pulled back on spending amid
weaker economic conditions, while elevated employee turnover
increased client attrition). In March, Townsquare Interactive
returned to net subscriber growth and revenue growth on a
month-over-month basis, which S&P expects to continue through the
remainder of the year.
The company's digital advertising business, Ignite, grew about 1%
in the first quarter of 2024 after declining about 1% in the fourth
quarter of 2023. This stems from moderating declines in national
advertising and continued healthy high-single-digit percent growth
from programmatic advertising. As these trends continue, S&P
expects Ignite will grow about 2% in 2024.
Declines in broadcast radio advertising revenue have also improved
sequentially, declining about 3% in the first quarter of 2024
(excluding political revenue). S&P said, "The company's radio
business has been relatively resilient over the last year, because
only 10% of its broadcast revenue comes from national sources, in
our view, which has significantly underperformed local markets.
Still, over time, we expect broadcast radio advertising will
decline low-single-digit percent due to competition from digital
advertising."
Townsquare has a scaled digital business. Digital revenue currently
contributes a little over 50% of the company's total revenue and
has margins of mid- to high-20%. Townsquare's strategy targets
customers outside large metropolitan areas that may somewhat fall
out of the purview of its larger competitors, and it doesn't
necessarily have the capability to run a sophisticated digital
marketing campaign. This has led it to develop a strong digital
marketing presence relative to other smaller broadcast radio peers
such as Beasley Broadcast Group Inc. (CCC+/Negative/--) and Hubbard
Radio LLC (B-/Stable/--); however, we note its digital business is
still smaller than iHeartMedia Inc.'s (CCC+/Negative/--) digital
business.
S&P said, "The company recently increased its focus on companies
seeking CRM (customer relationship management) solutions, which we
expect to increase its pool of potential customers. Longer term, we
expect digital revenue growth to offset declines in the company's
broadcast revenue.
"The stable outlook reflects our view that Townsquare will sustain
S&P Global Ratings-adjusted gross leverage at or below 5x,
supported by our expectation of relatively stable EBITDA generation
over the next couple of years."
S&P could lower the rating if the company's S&P Global
Ratings-adjusted debt to EBITDA increases and sustains above 5x.
This could occur if:
-- Revenue growth slows due to macroeconomic pressures or
increased digital competition;
-- Increased digital investments lead to a deterioration in its
EBITDA margins; or
-- The company engages in debt-funded shareholder returns or
acquisitions.
While unlikely, S&P could raise the rating if:
-- Gross leverage declines and sustains below 4x;
-- FOCF to debt sustains above 10% over a political cycle;
-- The company increases its scale through sustained revenue and
EBITDA growth; and
-- EBITDA margin remains at or above 25%.
ESG factors have no material influence on S&P's credit rating
analysis of Townsquare.
TRP BRANDS: Seeks to Extend Plan Exclusivity to Sept. 29
--------------------------------------------------------
The RoomPlace Furniture and Mattress LLC and TRP Brands LLC, asked
the U.S. Bankruptcy Court for the Northern District of Illinois to
extend their exclusivity periods to file a plan of reorganization
and obtain acceptance thereof to September 29 and November 28,
2024, respectively.
The Debtors are headquartered in Lombard, Illinois, and as of the
Petition Date, employed 493 people across 27 retail stores in
Illinois, Indiana, and Wisconsin, and distribution centers in
Romeoville, Illinois and Indianapolis, Indiana.
Since this case was commenced, the Debtors have made significant
progress in their Chapter 11 efforts. The Debtors and their
professionals (a) addressed critical first day bankruptcy related
issues to ensure a smooth transition into Chapter 11, (b) addressed
required bankruptcy filings, including preparing and filing monthly
operating reports and schedules of assets and liabilities and a
statement of financial affairs, (c) facilitated store closing sales
related to the closure of eight of its brick and mortar stores, and
(d) stabilized business operations to ensure a positive operational
cashflow.
Immediately after filing its voluntary petitions, the Debtors
focused on the typical first day issues of a debtor-in possession:
it secured use of its cash collateral and received authority to
operate with its existing cash management systems, maintain
insurance, pay its employees, and pay its prepetition tax claims.
The Debtors explain that they are currently working with their
retained professionals, including counsel and Novo Advisors, to
draft a plan of reorganization. With the assistance of Novo
Advisors, the Debtors are finalizing post-emergence projections,
their planned physical footprint and headcount, and their cost
savings strategies which will improve their current and projected
liquidity and profitability.
The Debtors have also stabilized their operations. Therefore, given
the circumstances surrounding the Debtors' significant efforts at
restructuring in a timely manner, it is only fair and equitable
that the Debtors be given additional time to have the exclusive
right to formulate and propose a plan.
Counsel to the Debtors:
Matthew T. Gensburg, Esq.
E. Philip Groben, Esq.
GENSBURG CALANDRIELLO & KANTER, P.C.
200 West Adams St., Ste. 2425
Chicago, IL 60606
Telephone: (312) 263-2200
Facsimile: (312) 263-2242
Email: mgensburg@gcklegal.com
pgroben@gcklegal.com
About TRP Brands LLC
TRP Brands, LLC and The RoomPlace Furniture & Mattress, LLC filed
Chapter 11 petitions (Bankr. N.D. Ill. Lead Case No. 24-01529) on
Feb. 2, 2024. Valerie Berman-Knight, president, signed the
petitions.
At the time of the filing, TRP Brands reported up to $50,000 in
assets and $50 million to $100 million in liabilities while
RoomPlace reported up to $50,000 in assets and $100 million to $500
million in liabilities.
Judge Deborah L. Thorne oversees the cases.
E. Philip Groben, Esq., at Gensburg Calandriello & Kanter, P.C. is
the Debtors' legal counsel.
The U.S. Trustee for Region 11 appointed an official committee of
unsecured creditors in these Chapter 11 cases. The committee tapped
FisherBroyles, LLP as its legal counsel.
UNDERGROUND SOLUTIONS: Wins Cash Collateral Access Thru July 9
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California,
Northern Division, authorized Underground Solutions LLC to use cash
collateral, on an interim basis, in accordance with the budget,
with a 15% variance, through July 9, 2024.
The U.S. Small Business Administration appears to hold the senior
security interest in cash collateral. There are other entities that
the Debtor believes also assert interests in cash collateral.
The Debtor will make monthly adequate protection payments to the
SBA in the amount of $731, due the 3rd week of June, 2024.
As further adequate protection, the Secured Creditors are granted
replacement liens in the Debtor's assets to the extent their
prepetition liens attached to property of the Debtor prepetition
and with the same validity, priority, extent and description of
collateral.
A further hearing on the matter is set for July 9 at 1 p.m.
A copy of the order is available at https://urlcurt.com/u?l=7pdFeG
from PacerMonitor.com.
About Underground Solutions LLC
Underground Solutions LLC specializes in providing cutting-edge
underground communication services. The Company specializes in
delivering top-tier fiber optic services that enhance connectivity
experience.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. C.D. Cal. Case No. 24-10578) on May 23,
2024. In the petition signed by Javier Junior Esqueda, managing
member, the Debtor disclosed up to $10 million in assets and up to
$1 million in liabilities.
Judge Ronald A. Clifford III oversees the case.
Steven R. Fox, Esq., at the Fox Law Corporation, Inc., represents
the Debtor as legal counsel.
UPHEALTH INC: Posts $25.42 Milion Net Income in First Quarter
-------------------------------------------------------------
UpHealth, Inc. filed with the Securities and Exchange Commission
its Quarterly Report on Form 10-Q reporting net income of $25.42
million on $0 of total revenues for the three months ended March
31, 2024, compared to a net loss of $7.64 million on $24.69 million
of total revenues for the three months ended March 31, 2023.
As of March 31, 2024, the Company had $269.73 million in total
assets, $187.95 million in total liabilities, and $81.79 million in
total stockholders' equity.
UpHealth Inc. said, "We face uncertainty regarding the adequacy of
our liquidity and capital resources. Subsequent to the Sale of
Cloudbreak on March 15, 2024 and as of March 16, 2024, because the
operations of UpHealth Holdings and its subsidiaries, including
TTC, will remain deconsolidated from the rest of UpHealth until
UpHealth Holdings emerges from bankruptcy pursuant to a
restructuring plan, the financial position, results of operations,
and cash flows of UpHealth will solely consist of the operations of
UpHealth, which comprises a fourth non-operating business segment,
Corporate, consisting solely of the operating expenses of UpHealth
as the parent company of TTC."
UpHealth, Inc. is the parent company of UpHealth Holdings, Inc. and
Cloudbreak Health, LLC, the latter of which the Company sold on
March 15, 2024.
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1770141/000177014124000078/uph-20240331.htm
About UpHealth
UpHealth -- https://uphealthinc.com -- is a provider of a full
continuum of behavioral health solutions through the utilization of
evidence-based treatments and services. Operating through its TTC
Healthcare, Inc. subsidiary, UpHealth targets mental health issues
and substance use disorders with services provided by
psychiatrists, physicians, neurologists, licensed therapists, and
clinical social workers. The company's levels of care include
detox, residential, partial hospitalization programs, intensive
outpatient programs, outpatient, and telehealth. UpHealth's
clients include health plans, healthcare providers and
community-based organizations.
San Jose, California-based BPM LLP, the Company's auditor since
2022, issued a "going concern" qualification in its report dated
April 4, 2024, citing that the Company's recurring losses from
operations, available cash, cash used in operations, and the
Chapter 11 bankruptcy proceedings involving certain subsidiaries of
the Company raises substantial doubt about the Company's ability to
continue as a going concern.
US NEUROSURGICAL: Posts $312,000 Net Loss in Q1 2024
----------------------------------------------------
U.S. NeuroSurgical Holdings, Inc. filed with the Securities and
Exchange Commission its Quarterly Report on Form 10-Q reporting a
net loss of $312,000 for the three months ended March 31, 2024,
compared to a net loss of $108,000 for the three months ended March
31, 2023.
Net cash used in operating activities for the three months ended
March 31, 2024, was $461,000 as compared to $130,000 for the same
period a year earlier. This change is primarily due to the Company
using cash reserves for day-to-day expenses. During the first
quarter of 2024, the Company received $2,000 of distributed
earnings from unconsolidated entities as compared to $23,000 in the
first quarter of 2023.
On January 16, 2024, the Company held an initial closing of a
private placement of shares of the Company's common stock to raise
gross proceeds of not less than $1,000,000, and up to $2,000,000,
at a price of $0.50 per share. Since the initial closing, the
Company amended the terms of the private placement to raise up to
$3,000,000 maximum and, as of April 15, 2024, raised proceeds of an
aggregate of $2,100,000. As a result of these issuances, as of
April 15, 2024, there were outstanding 9,284,924 shares of the
Company's Common Stock.
For this sale of securities in connection with private placement,
no general solicitation was used, no commissions were paid, all
participants in the private placement were accredited investors,
and the Company relied on the exemption from registration available
under Section 4(a)(2) and/or Rule 506(b) of Regulation D
promulgated under the Securities Act with respect to transactions
by an issuer not involving any public offering.
The Company presently intends to use the net proceeds from the
private placement principally to execute the plan of Elite Health
to establish a managed care organization that will operate as a
Medicare Advantage plan for seniors.
In fiscal year 2023, the Company incurred a net loss of $816,000
compared to $1,572,000 in fiscal year 2022. As of March 31, 2024,
the Company had an accumulated deficit in stockholders' equity of
$2,702,000, cash and cash equivalents of $1,750,000 and a working
capital deficit of $396,000. In addition, the Company currently
does not have access to capital through a line of credit nor other
readily available sources of capital. Together, these factors
raised substantial doubt regarding the Company's ability to
continue as a going concern at March 31, 2024.
However, management has considered its plans to continue the
Company as a going concern, concentrating on the establishment and
operation of managed health care plans. During the first quarter of
2024, the Company raised gross proceeds of $2.1 million in support
of this business opportunity through the sale of its Common Stock
in a private placement and believes it has access to additional
capital through the remainder of 2024. Additionally, the Company
believes that these activities and resulting expenses can be
managed to the level of cash resources on hand and expected to be
raised.
Management believes its plan alleviates the substantial doubt, that
it will be successful in its planned business initiatives and will
be able to continue as a going concern through at least the next 12
months. However, there can be no assurance that sources of capital
will be available to the Company at that time or, if available, can
be obtained on terms favorable to the Company.
A full-text copy of the Company's Form 10-Q is available at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1089815/000114036124026235/ef20026325_10q.htm
About U.S. NeuroSurgical Holdings
U.S. NeuroSurgical Holdings, Inc. through its wholly-owned
subsidiaries, holds interests in radiological treatment facilities
and, more recently, has been developing a business to provide
Medicare Advantage plans, concentrating initially in Nevada and
California.
As of March 31, 2024, the Company has $2,600,000 in total assets,
$2,267,000 in total liabilities, and $333,000 in total
stockholders' equity.
New Delhi, India-based Mercurius & Associates LLP, the Company's
auditor since 2022, issued a "going concern" qualification in its
report dated April 5, 2024, citing that the Company has an
accumulated deficit of $2,390,000 and $1,710,000 as of December 31,
2023, and December 31, 2022, respectively and there is a working
capital deficit of $80,000 as of December 31, 2023. These
conditions raise substantial doubt about the uncertainty in the
Company's ability to continue as a going concern.
VALLEY PROPERTY: Seeks Court Nod to Sell Palm Springs Property
--------------------------------------------------------------
Valley Property Ventures, LLC asked the U.S. Bankruptcy Court for
the Central District of California for authority to sell its real
property to Commercial Parks, LLC or to another buyer with a better
offer.
The company received a $3 million offer from Commercial Parks for
its 63-acre property located near Indian Canyon and Dillon Road, in
Palm Springs, Calif.
The property is being sold "free and clear" of liens, claims and
interests.
The sale is subject to overbid. Under the proposed overbid
procedures, bids must be submitted no later than 4:00 p.m., Pacific
Standard Time, the day prior to the hearing scheduled for June 13.
Bids must be at least $3.01 million in cash and a cash deposit of
$95,000. Any incremental bid in the bidding process must be at
least $10,000 higher than the prior bid.
At the June 13 hearing and upon conclusion of the bidding process,
Valley Property Ventures will select the winning bidder and the
back-up bidder, subject to court approval.
The property is encumbered by a first lien in the amount of $1.41
million in favor of Grand Pacific Financial Corp. and a second lien
in the amount of $2.7 million in favor of GPM Global Properties,
LLC.
From the sale proceeds, Valley Property Ventures proposes to pay
real estate taxes and the lien of Grand Pacific. Additionally, the
company intends to negotiate a carve-out with GPM to provide funds
for distribution to creditors and closing costs, and with the
remainder of payments to be provided to GPM on account of its
lien.
About Valley Property Ventures
Valley Property Ventures, LLC is a company in Palm Springs, Calif.,
engaged in activities related to real estate.
Valley Property Ventures filed a petition for relief under Chapter
11 of the Bankruptcy Code (Bankr. C.D. Calif. Case No. 23-10981) on
March 15, 2023. In the petition filed by its manager, Erik Ivan
Ochoa Gonzalez, the Debtor reported $1 million to $10 million in
both assets and liabilities.
Judge Scott H. Yun oversees the case.
Golden Goodrich, LLP is the Debtor's bankruptcy counsel.
VENUS CONCEPT: Regains Compliance With Nasdaq's Equity Rule
-----------------------------------------------------------
Venus Concept Inc. reported in a Form 8-K filed with the Securities
and Exchange Commission that on June 4, 2024, it was formally
notified by The Nasdaq Stock Market LLC that the Company had
regained compliance with the stockholders' equity requirement set
forth in Nasdaq Listing Rule 5550(b)(1). Accordingly, this listing
matter has been resolved in the Company's favor.
The Company is subject to a "Mandatory Panel Monitor," as defined
in Nasdaq Listing Rule 5815(d)(4)(B), through June 4, 2025. If the
Company is found to be noncompliant with the Equity Rule within the
monitoring period, the Company would not be allowed to provide the
Nasdaq Listing Qualifications Staff with a plan to regain
compliance with the Equity Rule; rather, the Staff would be
required to issue a delist determination. In such case, the
Company would have the opportunity to request a new hearing before
the Panel, which request would stay any further action by the Staff
until the time of the hearing.
About Venus Concept
Toronto, Ontario-based Venus Concept Inc. is an innovative global
medical technology company that develops, commercializes, and
delivers minimally invasive and non-invasive medical aesthetic and
hair restoration technologies and related practice enhancement
services. The Company's systems have been designed on a
cost-effective, proprietary and flexible platform that enables the
Company to expand beyond the aesthetic industry's traditional
markets of dermatology and plastic surgery, and into
non-traditional markets, including family and general practitioners
and aesthetic medical spas.
Toronto, Canada-based MNP LLP, the Company's auditor since 2019,
issued a "going concern" qualification in its report dated April 1,
2024, citing that the Company has reported recurring net losses and
negative cash flows from operations, that raise substantial doubt
about its ability to continue as a going concern.
VILLAGE OAKS SENIOR: Seeks Chapter 11 Bankruptcy Protection
-----------------------------------------------------------
On May 22, 2024 Village Oaks Senior Care LLC filed for chapter 11
protection in the Eastern District of California. According to
court filing, the Debtor reports between $10 million and $50
million. 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
June 25, 2024 at 10:00 a.m. via Telephone Conference number
provided by the U. S. Trustees Office.
About Village Oaks Senior Care LLC
Village Oaks Senior Care LLC owns and operates community care
facilities for the elderly.
Village Oaks Senior Care LLC sought relief under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. E.D. Cal. Case No. 24-22206) on May
22, 2024. In the petition filed by Benjamin L. Foulk, as
owner/manager, the Debtor reports total assets as of Dec. 31, 2023
amounting to $1,440,832 and total liabilities as of Dec. 31, 2023
of $3,369,013.
Honorable Bankruptcy Judge Christopher D. Jaime oversees the case.
The Debtor is represented by:
Ed Hays, Esq.
3941 Park Drive, Suite 20331
El Dorado Hills, CA 95762
Tel: (949) 333-7777
Fax: (949) 333-7778
Email: ehays@marshackhays.com
VIVO TECHNOLOGIES: Reaches Stipulation with McCormick; Amends Plan
------------------------------------------------------------------
Vivo Technologies, LLC, submitted a Second Amended Plan of
Reorganization dated May 16, 2024.
The Debtor generates revenue through equipment sales and
consulting, design, and support services which help businesses
implement conference room audiovisual innovations and
interoffice/outside communication platforms.
Class 3 consists of the claim of McCormick 101, as assignee of
Arizona Bank & Trust, a division of HTLF Bank, which is secured by
a lien in the Debtor's personal property. The Debtor and McCormick
101 reached an Amended Stipulation Regarding Treatment of McCormick
101, LLC's Class 3 and Class 4 Claims under Debtor's Chapter 11
Plan (the "Stipulation") filed on May 15, 2024. The terms of the
Stipulation shall control the treatment of the Class 3 Secured
Claim.
The Allowed Class 3 Claim of McCormick 101 will be treated as fully
secured under the Plan. Debtor will continue to directly make to
ABT the regularly scheduled monthly loan payments in accordance
with the underlying loan documents. McCormick 101 shall retain its
lien against the Debtor's personal property until the Allowed Class
3 Claim has been paid in full as provided in the underlying loan
documents. McCormick 101 shall be permitted to file any required
documents with governmental entities (such as a UCC-1 financing
statement) with respect to its secured claim.
Class 4 consists of the claim of McCormick 101, as assignee of New
Mexico Bank & Trust, a division of HTLF Bank, which is secured by a
lien in the Debtor's personal property. The Debtor and McCormick
101 reached a Stipulation regarding treatment of McCormick 101's
Class 4 Claim filed on May 15, 2024. The terms of the Stipulation
shall control the treatment of the Class 4 Secured Claim.
The Allowed Class 4 Claim of McCormick 101 will be treated as fully
secured under the Plan and paid in full over a period of 6 years
with interest at the rate of 9% per annum. The Debtor will make
payments to McCormick 101 for 53 months in the amount of $3,309.30
per month; and then, after payment in full of Administrative Claims
and Priority Tax Claims, the Debtor will pay make principal and
interest payments to McCormick 101 in the amount of $15,170.47 per
month until the Class 4 Claim is paid in full.
McCormick 101 shall retain its lien against the Debtor's personal
property until the Allowed Class 4 Claim has been paid in full.
McCormick 101 shall be permitted to file any required documents
with governmental entities (such as a UCC-1 financing statement)
with respect to its secured claim. In the event of an alleged
default by the Debtor and/or Reorganized Debtor, McCormick 101
shall follow the default procedures described in section 11.10 of
the Plan.
Like in the prior iteration of the Plan, the Allowed Class 5
General Unsecured Creditors will share in total distributions of
$45,331.65 no later than month 60. Debtor reserves the right to pay
off the Class 5 Claims early, but Class 5 will only receive
distributions of $45,331.65.
The Reorganized Debtor will generate income from operating its
business to fund all payments due under the Plan. The Reorganized
Debtor will fund the Plan from its monthly Projected Disposable
Income received by the Debtor for 60 months.
In its discretion, the Reorganized Debtor may contribute any cash
on hand as of the Effective Date for distribution under the Plan,
provided that the Reorganized Debtor shall not pay in the aggregate
more than the 60-month Projected Disposable Income under the Plan.
The Projected Disposable Income will be generated through business
operations.
A full-text copy of the Second Amended Plan dated May 16, 2024 is
available at https://urlcurt.com/u?l=4eUjUL from PacerMonitor.com
at no charge.
Attorney for the Debtor:
M. Preston Gardner, Esq.
Davis Miles McGuire Gardner, PLLC
40 E. Rio Salado Pkwy., Suite 425
Tempe, AZ 85281
Telephone: (480) 733-6800
Facsimile: (480) 733-3748
Email: efile.dockets@davismiles.com
About Vivo Technologies
Vivo Technologies, LLC, is a modern and holistic unified
communications and collaboration (UCC) solutions provider. Vivo
has evolved the process for designing, deploying, and supporting
UCC solutions.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Ariz. Case No. 23-02964) on May 5, 2023.
In the petition signed by Spencer Jones, manager, the Debtor
disclosed up to $10 million in both assets and liabilities.
M. Preston Gardner, Esq., at Davis Miles McGuire Gardner, PLLC, is
the Debtor's legal counsel.
WATER GREMLIN: Seeks to Extend Plan Exclusivity to Sept. 21
-----------------------------------------------------------
Water Gremlin Company and affiliates asked the U.S. Bankruptcy
Court for the District of Delaware to extend their exclusivity
periods to file a plan of reorganization and obtain acceptance
thereof to September 21 and December 20, 2024, respectively.
The Debtors claim that the complexity of their chapter 11 cases
warrant an extension of the Exclusivity Periods. The multitude of
tort claims, the various Sales of the Debtors' assets to multiple
buyers, the involvement of governmental regulators in the sale
order process, and the myriad of reporting obligations with respect
to local, state, and federal regulatory agencies that the Debtors
complied with through the Sales lends to the complexity of these
Chapter 11 Cases.
The Debtors explain that they continue to engage discussions with
the Committee and other stakeholders towards a global resolution of
the various claims asserted against the Debtors, and to develop a
chapter 11 plan of liquidation based on the outcome of such
discussions. To date, the Parties have agreed in principle to
commence a mediation process in order to mediate the issues
relating to the allocation of the Sales proceeds and costs for
these Chapter 11 Cases as between Water Gremlin, WG Sub, and
Holdings.
Moreover, such Parties are currently evaluating the availability of
certain mediators with the aim of commencing the mediation process
in late June or July. Thus, the Debtors' substantial progress
administering these Chapter 11 Cases weighs in favor of an
extension of the Exclusivity Periods.
The Debtors' request for a further extension of the Exclusivity
Periods is the their second such request and comes approximately
six months after the Petition Date, a reasonable period of time in
a chapter 11 given what they have already achieved. During this
short time, the Debtors have accomplished a great deal, including
approval of the three Sales of the Debtors' assets; engaging in
claims administration; and working toward a mediation process with
certain key stakeholders to achieve consensus on a global
resolution.
The Debtors assert that they are not seeking an extension of the
Exclusivity Periods to pressure or prejudice any of their
stakeholders. The Debtors have been diligently moving these Chapter
11 Cases forward and is progressing towards a global resolution for
many of their unliquidated claims. Accordingly, the relief
requested herein is without prejudice to the Debtors' creditors and
will benefit the Debtors' estates, their creditors, and all other
key parties in interest.
Counsel for the Debtors:
DORSEY & WHITNEY (DELAWARE) LLP
Eric Lopez Schnabel, Esq.
Alessandra Glorioso, Esq.
300 Delaware Avenue, Suite 1010
Wilmington, Delaware 19801
Telephone: (302) 425-7171
Email: schnabel.eric@dorsey.com
glorioso.alessandra@dorsey.com
-and-
Eric Lopez Schnabel, Esq.
Michael Galen, Esq.
Courina Yulisa, Esq.
Laura Goforth, Esq.
Dorsey & Whitney LLP
51 West 52nd Street
New York, NY 10019
Tel: (212) 415-9200
Fax: (212) 953-7201
Email: schnabel.eric@dorsey.com
About Water Gremlin Company
Water Gremlin Company is the world's technological and market
leader in battery terminals. It was founded in 1949 as a
manufacturer of recreational fishing products. In 1970, the Debtor
expanded to battery terminal production. Water Gremlin uses custom
engineering, design, and automation to deliver consistent quality
solutions for industries like automotive, agriculture, commercial
trucking, marine, telecommunications, recreation, and military and
government operations.
Water Gremlin and its affiliates filed Chapter 11 petitions (Bankr.
D. Del. Lead Case No. 23-11775) on Oct. 27, 2023. At the time of
the filing, Water Gremlin reported $10 million to $50 million in
both assets and liabilities.
Judge Laurie Selber Silverstein oversees the cases.
The Debtors tapped Alessandra Glorioso, Esq., at Dorsey & Whitney
(Delaware) LLP as bankruptcy counsel; Intrepid Investment Bankers,
LLC as investment banker; Riveron RTS, LLC as financial advisor.
Kekst CNC and Padilla provide public relations services to the
Debtors.
The U.S. Trustee for Region 3 appointed an official committee to
represent unsecured creditors in the Debtors' Chapter 11 cases. The
committee is represented by Norman Pernick, Esq.
WYTHE BERRY: Chapter 11 Plans Confirmed by Judge
------------------------------------------------
Chief Bankruptcy Judge Martin Glenn of the United States Bankruptcy
Court for the Southern District of New York issued opinions
confirming the Chapter 11 plans of Wythe Berry Fee Owner LLC and
approving a related settlement that was part of the plan, clearing
the way for them to complete the sale of the William Vale Hotel and
complex in Brooklyn to an affiliate of EOS Hospitality for $177
million.
Stephen Selbst, partner at Herrick, Feinstein who represents Wythe
Berry Fee Owner LLC, says: "The court's ruling clears the way for
our client to complete the sale next month of the William Vale
Hotel and complex in Brooklyn to an affiliate of EOS Hospitality
for $177 million."
The Herrick team also included partners Avery Mehlman, Janice
Goldberg and Yariv Ben-Ari, as well as associates Rodger Quigley,
Roya Imani, Meaghan Roe, and counsel Gita Gandhi.
Chapter 11 Plan
Wythe Berry Fee Owner LLC submitted a Disclosure Statement for
Fourth Amended Chapter 11 Plan of Reorganization dated May 20,
2024.
Since the start of the Chapter 11 Case, the Debtor pursued a dual
track strategy to either: (i) negotiate a resolution of the State
Court Action; or (ii) sell the WV Complex pursuant to a court
supervised process.
Since the start of the Chapter 11 Case, the Debtor pursued a dual
track strategy to either: (i) negotiate a resolution of the State
Court Action; or (ii) sell the WV Complex pursuant to a court
supervised process.
During the summer of 2023, the Debtor, the Notes Trustee and Weiss
negotiated concerning a proposed purchase of the WV Complex, a
transaction that the Debtor contemplated would form the basis for a
plan of reorganization. However, those negotiations reached an
impasse, and on September 29, 2023, WB LLC delivered to Debtor an
Early Vacate Notice, effective October 31, 2023 pursuant to the
August Cash Collateral Order.
Under the Plan, the Debtor will make an initial distribution of
$2,127,107 to Member LLC, the holder of Interests in the Debtor,
and an additional distribution to Member LLC in such amount, if
any, as remains in escrow after resolution and satisfaction in full
of certain contingent liabilities as defined in the Settlement
Agreement.
Class 3 consists of Unsecured Claims. Each holder of an Allowed
Unsecured Claim shall receive its Pro Rata Share of the remaining
proceeds in the Distribution Fund promptly after the payment in
full in Cash or adequate reserve being made by the Debtor of all of
the following (i) all regular closing costs and adjustments; (ii)
Allowed Fee Claims; (iii) Allowed Administrative Claims (subject to
the provisions of Section 2.1); (iv) Allowed Priority Claims
(subject to the provisions of Section 2.3); (v) Allowed Senior
Secured Claims; and (vi) Allowed Mechanic's Lien Claims Class 3 is
impaired. Holders of Allowed Unsecured Claims are entitled to vote
to accept or reject the Plan.
Member, as the sole holder of a Class 4 Interest shall receive an
initial distribution on the Effective Date in the amount of
$2,127,107, which it shall distribute to Weiss. If (A) (i) the
aggregate Mechanic Lien Claims is Allowed in an amount less than
full amount asserted in the proofs of claim filed by Mechanic Lien
Claims, or (ii) the Unfair Labor Claim is Allowed in amount less
than $700,000, or (iii) the legal fees expended to settle or
resolve the Mechanic Lien Claims were less than the amount set
aside by the Debtor, or (B), if the Mechanic Lien Claims and the
Unfair Labor Claim are not Allowed prior to the Plan Effective
Date, and any amounts remain in the Debtor Contingent Liabilities
Escrow after resolution and satisfaction in full of the Mechanic's
Lien Claims and the Unfair Labor Claim, the Debtor shall distribute
such amounts to Member, who shall make an immediate equity
distribution of such distribution to each member of Member, in
accordance with their pro rata ownership percentages of Member.
Subject to the approval of this Court, the Debtor will sell the WV
Complex to the Purchaser, free and clear of any Liens, Claims, and
encumbrances (except for Assigned Contracts) to the fullest extent
provided by the Bankruptcy Code or other applicable law.
On the Closing Date, the Purchaser shall consummate the purchase of
the WV Complex in accordance with the Bid Procedures. Net Sale
Proceeds shall be used solely to fund the Distribution Fund and
utilized to satisfy payments consistent with the terms of the
Plan.
A full-text copy of the Disclosure Statement dated May 20, 2024 is
available at https://urlcurt.com/u?l=wEijZV from PacerMonitor.com
at no charge.
Attorneys for the Debtor:
Stephen B. Selbst, Esq.
Janice Goldberg, Esq.
Steven B. Smith, Esq.
Rodger T. Quigley, Esq.
HERRICK, FEINSTEIN LLP
2 Park Avenue
New York, NY 10016
Tel: (212) 592-1400
About Wythe Berry Fee Owner
Wythe Berry Fee Owner LLC is the titular owner of a commercial real
property complex located in Brooklyn, New York, that includes The
William Vale Hotel, one of Brooklyn's few luxury hotels. Wythe
Berry Fee Owner is co-owned, indirectly, by Zelig Weiss and YGWV
LLC, a wholly owned, direct subsidiary of All Year Holdings
Limited, which is a debtor in a chapter 11 case also pending before
Judge Martin Glenn.
Weiss and YGWV each hold 50% of the membership interests in Member
LLC, which, in turn, is the direct parent, and sole member, of
Wythe Berry Fee Owner. YGWV purports to be the designated managing
member of Member LLC and, thus, purports to control Wythe Berry Fee
Owner.
A group of noteholders, Mishmeret Trust Company Ltd., solely in its
capacity as Trustee for the Series C Notes; Yelin Lapidot Provident
Funds Management Ltd.; The Phoenix Insurance Company Limited; and
Klirmark Opportunity Fund III L.P., filed an involuntary Chapter 11
bankruptcy petition against Wythe Berry Fee Owner LLC (Bankr.
S.D.N.Y. Case No. 22-11340) on Oct. 6, 2022. The creditors are
represented by Michael Friedman, Esq., at Chapman and Cutler LLP.
Bankruptcy Judge Martin Glenn, who presides over the case, entered
an Order for Relief in January 2023, allowing the bankruptcy
proceedings against Wythe Berry Fee Owner LLC to proceed. Judge
Glenn denied a request by hotel operator Zelig Weiss to dismiss the
involuntary petition.
Wythe Berry Fee Owner LLC is represented by law firm Herrick,
Feinstein LLP.
All Year Holdings Limited filed for Chapter 11 bankruptcy
protection (Bankr. S.D.N.Y. Case No. 21-12051) on Dec. 14, 2021,
and is represented by Matthew Paul Goren, Esq., at Weil, Gotshal &
Manges LLP.
Weiss is represented by lawyers at Paul Hastings LLP.
ZACHRY HOLDINGS: U.S. Trustee Appoints Creditors' Committee
-----------------------------------------------------------
The U.S. Trustee for Region 7 appointed an official committee to
represent unsecured creditors in the Chapter 11 cases of Zachry
Holdings, Inc. and its affiliates.
The committee members are:
1. Sunbelt Rentals, Inc.
Sunbelt Rentals Scaffold Services LLC
Rod Samples, CFO
1799 Innovation Pt
Fort Mill, SC 29715
(803) 412-5668
Rod.samples@sunbeltrentals.com
Counsel:
Jayme Goldstein
jaymegoldstein@paulhastings.com
Daniel Fliman
danfliman@paulhastings.com
Gabriel Sasson
Sasson, Gabe
gabesasson@paulhastings.com
Paul Hastings LLP
200 Park Avenue
New York, NY 10166
(213) 318-5668
2. The Reynolds Company
LaVonda Harrison, Director of Credit
2680 Sylvania Cross Drive
Fort Worth, TX 76137
(214) 560-2602
lharrison@reynco.com
Counsel:
David Park Smith
Law Office of D. Park Smith
250 Cherry Springs Road, Suite 200
Hunt, TX 78024
(830) 238-3591
park@dparksmithlaw.com
3. Bigge Crane and Rigging Co.
Bob Lally, CFO
10700 Bigge Street
San Leandro, CA 94577
(540) 499-5388
blally@bigge.com
Counsel:
Mark C. Russell, General Counsel
Bigge Crane and Rigging Co.
(415) 308-6305
mrussell@bigge.com
4. Rush, LLC a/k/a Rush Resources
John Rush, Jr.
2781 County Road 639
Buna, TX 77612
(409) 781-5911
jrush@rushllc.com
Counsel:
Reagan H “Tres” Gibbs, III
tgibbs@cokinoslaw.com
Craig E. Power
CPower@cokinoslaw.com
Cokinos | Young
1221 Lamar Street, 16th Floor
Houston, TX 77010
(713) 535-5524
5. Innovative Heat Treatment Solutions
Julie Dimas, CFO
11318 Hirsch Road
Houston, TX 77016
(346) 207-8081
j.dimas@ihtsinc.com
6. Calcam Logistics & Contracting, LLC
Lennie Stephens, Owner/Manager
3010 Spurlock Road
Nederland, TX 77627
(601) 270-4965
lennie@calcam.net
7. P & I Supply
Bruce Stallings, CEO
2220 North Fares Avenue
Evansville, IN 47711
(812) 421-4141
bstallings@pisupply.com
Counsel:
Patty Tomasco
Quinn Emanuel Urquhart & Sullivan
700 Louisiana Street, Suite 3900
Houston, TX 77002
(713) 221-7227
pattytomasco@quinnemanuel.com
Official creditors' committees serve as fiduciaries to the general
population of creditors they represent. They may investigate the
debtor's business and financial affairs. Committees have the right
to employ legal counsel, accountants and financial advisors at a
debtor's expense.
About Zachry Holdings
Zachry Holdings, Inc., is the engineering, construction,
maintenance, turnaround and fabrication services offshoot of the
storied family-owned business that began as H.B. Zachry Company
one
hundred years ago. The other offshoot, Zachry Construction, has
operated separately from Zachry Industrial since the two businesses
branched off from their common roots in 2008. None of the entities
affiliated with Zachry Construction are Debtors in these chapter 11
cases. The Zachry Group provides engineering and construction
services to clients in the energy, chemicals, power, manufacturing,
and industrial sectors across North America.
The Debtors sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 24-90377) on May
21, 2024, with $1 billion to $10 billion in assets and
liabilities.
James R. Old, general counsel, signed the petitions.
Judge Marvin Isgur presides over the case.
The Debtors tapped White & Case LLP as general bankruptcy counsel;
Susman Godfrey L.L.P. and Hicks Thomas, LLP as special litigation
counsel; and Kurtzman Carson Consultants as notice & claims agent.
[*] Corporate Bankruptcies Trend Up in April 2024
-------------------------------------------------
Yahoo! News reports that April 2024's US corporate bankruptcies
reached a concerning milestone, hitting the highest monthly level
in a year. To provide insights into this trend, RapidRatings
Executive Chair James Gellert joins Asking for a Trend.
The uptick in bankruptcies is not limited to the United States
alone, as companies globally have been grappling with similar
challenges, Gellert notes. He explains that the beginning of the
second quarter of 2024 witnessed "the highest incidence of Chapter
11 filings in a year."
Gellert attributes this surge in bankruptcies to the aftermath of a
period characterized by cheap capital, low interest rates, and
post-pandemic funding, which had previously allowed companies to
stay afloat. He even points to Red Lobster's own filing as a timely
example. However, with the changing economic landscape, companies
now face significant pressure, leading to the current wave of
bankruptcy filings.
Retail, entertainment, and the food and auto industries are among
the sectors bearing the brunt of this strain, Gellert notes. He
cites the shifts in consumer behavior in the post-COVID era as a
contributing factor to the deterioration within these industries.
[^] BOOK REVIEW: The Heroic Enterprise
--------------------------------------
The Heroic Enterprise: Business and the Common Good
Author: John Hood
Publisher: Beard Books (reprint of book published by The Free
Press/Division of Simon and Schuster in 1996).
Paperback: 266 pages
List Price: $34.95
Order your copy at https://bit.ly/3awLUV3
Hood writes as a counterbalance to ideas that business should be
expected to contribute to the common good along the lines of
charities, say, or public health. He writes too against the highly
partisan, pernicious perspective that business activity is
antisocial and disruptive which at times gains some degree of
credibility.
Critiques of business have been around as long as commerce and
business have been around. These come usually from religious or
political zealots seeking dictatorial hold over all significant
kinds of human activity and enterprise. In this work, Hood aims to
counterbalance latter-day versions of such critiques arising in
American society. The counterculture, antiestablishment 1960s was
a time when such critiques were particularly strong. They have
moderated since, yet remain a persistent chorus which influences
politics and imagery and public affairs of business.
Hood does not aim to stifle or eliminate debate about the effects
of business on society or how business should engage in business.
What he aims for is dismissing once and for all myopic and almost
utopian conceptions about business and related erroneous purposes
and values of it. Such conceptions are worrisome to
businesspersons not because they believe they have any foundation,
but because they waste resources and energy in having to
continually correct them so business can function properly. And to
the extent such myopic conceptions are believed or entertained by
the public, they hamper the public and politicians in working out
policies by which the greatest benefits of business can be reaped
by society.
The author clarifies the place and role of business by contrasting
business with other parts of society. A standard, self-evident
tenet of sociologists going back to the time of Plato is that
society is made up of different parts fulfilling different roles
for the varied needs of society and so that a society will function
smoothly and survive. Business is distinguished from government
and philanthropy. "Businesses exist to make and sell things,
whereas by contrast "governments exist to take and protect things
[and] charities exist to give things away." The social
responsibility for each category of institution is inherent in its
purposes and activities. For example, businesses alone cannot
solve environmental problems. Whatever problems which can be
attached to business are related to government policies and
business's operations to satisfy consumer interests. Hence,
business alone cannot solve environmental problems, and should not
be expected to. Critics requiring that business solve
environmental problems without similarly requiring changes in
government policies and consumer interests are shortsightedly and
unreasonably tarnishing business while not making any relevant or
productive arguments for dealing with environmental problems.
In elucidating business's proper place in and contributions to
society, Hood is not unmindful that some businesses fail to fulfill
their role in good faith and beneficially. But instead of
criticizing business fundamentally, he proffers questions critics
can ask before targeting particular businesses. Two of these are
"Are corporations obtaining their profits through force or fraud?"
and "Are corporations putting investments at their disposal to the
most economically productive use?" Hood's perspective in support
of business against unfair and irrelevant criticisms is based on
the acknowledgment that business is operating productively, for the
common good, and is open to cooperative activities with other parts
of society in trying to resolve common problems.
"The Heroic Enterprise" is not an argument for business -- for as a
fundamental aspect of any society, business does not need an
argument to justify it. The book mostly takes the approach of
reviewing why business is necessary and therefore must be
naturally, easily accepted -- namely, because of the manifold
benefits business provides for society and because it along with
good government and respectable morals has been a primary engine
for the betterment of human life.
John Hood has much experience in the media and communication as a
syndicated columnist, TV commentator, and radio host. Author of
seven nonfiction books on subjects as business, advertising, public
policy, and political history, and many articles for national
publications such as the Wall Street Journal, Hood is President of
the John William Pope Foundation, a Raleigh, N.C.-based grantmaker
that supports public policy organizations, educational
institutions, arts and cultural programs, and humanitarian relief
in North Carolina and beyond. Hood also serves on the board of the
John Locke Foundation, the state policy think tank he helped found
in 1989 and led as its president for more than two decades. He
teaches at Duke University's Sanford School of Public Policy.
*********
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
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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
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*** End of Transmission ***