/raid1/www/Hosts/bankrupt/TCR_Public/240708.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Monday, July 8, 2024, Vol. 28, No. 189
Headlines
33 HOLDINGS: Voluntary Chapter 11 Case Summary
8434 ROCHESTER: Unsecureds Owed $755K to be Paid in Full in 5 Years
A&J LOGISTICS: Unsecureds to Split $148K over 60 Months
ACT HOSPITALITY: Seeks to Hire Nicholson Devine as Counsel
AGEAGLE AERIAL: 3 of 4 Proposals Approved at Annual Meeting
AMERICAN RESIDENTIAL: Moody's Affirms 'B2' CFR, Outlook Negative
AQUABOUNTY TECHNOLOGIES: To Sell Facility & Equipment for $9.5M
ARTISAN MASONRY: Updates Secured Tax Claim Details; Amends Plan
ASHFORD HOSPITALITY: CEO Holds 1,082 Common Shares
ATW TECH: Files for Insolvency Under Canada's Bankruptcy Act
AVENIR WELLNESS: Secures up to $472K Financing Commitment
AVENTIS SYSTEMS: Trustee Taps Stonebridge as Accountant
AVSC HOLDING: Moody's Puts 'Caa1' CFR on Review for Upgrade
BARNES & NOBLE: Narrows Net Loss to $63.2MM in FY Ended April 27
BASIC FUN: July 10 Deadline Set for Panel Questionnaires
BERRY PETROLEUM: Moody's Alters Outlook on 'B2' CFR to Negative
BINDER SCIENCE: Case Summary & 20 Largest Unsecured Creditors
BION ENVIRONMENTAL: Director Gregory Schoener Holds 700,000 Shares
BLUSH BOOTCAMP: Seeks to Hire Phillips & Thomas as Legal Counsel
BOOST PARENT: Moody's Affirms 'B3' CFR, Outlook Remains Stable
BRAND INDUSTRIAL: Moody's Affirms B3 CFR, Outlook Remains Positive
CAPITAL POWER: DBRS Assigns BB Rating to $450MM Sub. Notes Due 2054
CAPSTONE INVESTMENTS: Amends Unsecureds & Fannie Mae Secured Claims
CARVANA CO: Ernest Garcia II Holds 41.1 Stake as of June 27
CHICKEN SOUP: July 8 Deadline Set for Panel Questionnaires
COCHRAN PLUMBING: Case Summary & 20 Largest Unsecured Creditors
CONGA CORP: Moody's Ups CFR to 'B2' & Alters Outlook to Stable
CYTOSORBENTS CORP: Secures $20 Million Credit Facility
DANIEL SMART: Case Summary & 20 Largest Unsecured Creditors
DELTA APPAREL: Files for Bankruptcy, Inks Asset Sale Deal With FCM
DELTA APPAREL: VP, 2 Board Members Resign
DPL INC: Fitch Affirms 'BB' LongTerm IDR, Outlook Stable
DRIP MORE: Case Summary & 20 Largest Unsecured Creditors
EL DORADO: Trustee Taps Kelly Hart & Hallman as Co-Counsel
EMERGENT BIOSOLUTIONS: Awarded $250M+ in Contract Modifications
EPIC CRUDE: Moody's Affirms 'B3' CFR & Alters Outlook to Positive
EXELA TECHNOLOGIES: Board OKs Plans to Spin-Off BPA Business
EXELA TECHNOLOGIES: To Spin Off BPA Business
FINANCE OF AMERICA: Moody's Affirms 'Caa2' CFR, Outlook Negative
FOOBAR LLC: Unsecureds to Split $22K via Quarterly Payments
FRANCISCAN FRIARS: Seeks to Hire TransPerfect Legal as Consultant
FTX TRADING: Seeks to Extend Plan Exclusivity to August 3
FTX TRADING: Updates FTT Claims & Interest Details; Amends Plan
GEO. J. & HILDA: Seeks to Extend Plan Exclusivity to October 1
GIGAMONSTER NETWORKS: Plan Exclusivity Period Extended to July 16
GLOBAL IID: Moody's Affirms 'B3' CFR, Outlook Remains Stable
GOOD NATURED: To File Chapter 15 to Facilitate Restructuring
GRUPO HIMA: Asset Sale Proceeds to Fund Plan Payments
HEIR'S MEN'S: Case Summary & 20 Largest Unsecured Creditors
HERTZ CORP: Fitch Assigns 'BB-' Rating on $750MM First Lien Notes
HUDSON PACIFIC: Fitch Lowers IDR to 'BB-', Outlook Negative
INDIVA LIMITED: SNDL Enters Into Purchase Agreement Under CCAA
INSPIREMD INC: Raises $16.9MM From Full Series H Warrant Exercise
INTOUCHCX INC: Moody's Withdraws 'B2' CFR Following Debt Repayment
IROQUOIS-HUEY LLC: Hires Brown Law Firm as Bankruptcy Counsel
JOE'S DRAIN: Unsecureds Will Get 12.9% to 15% over 3 Years
JUMBO SEAFOOD: Unsecured Creditors to Get Nothing in Plan
KPM INVESTMENT: Unsecureds to Split $729K over 60 Months
LAVIE CARE: Seeks to Hire Chapman and Culter as Special Counsel
LEVINTE INC: Case Summary & Eight Unsecured Creditors
LITTLE FALLS: Fairbridge Seeks to Sell NY Property by Auction
LIVEONE INC: Files Prospectus for Warrants, Common Stock Offering
MENOTTI ENTERPRISE: Unsecureds Will Get 20% over 36 Months
MR. KNICKERBOCKER: Case Summary & 20 Largest Unsecured Creditors
NEONODE INC: All Three Proposals Approved at Annual Meeting
NEXTDECADE CORP: Unit Issues $1.115B Senior Secured Notes due 2047
NEXTDECADE CORP: Unit Issues $1.115BB Senior Secured Notes Due 2047
OCEAN POWER: Partners With Unique to Deploy USV in the Middle East
OCEANVIEW BEACH: Case Summary & Eight Unsecured Creditors
ONCOCYTE CORP: All Three Proposals Passed at Annual Meeting
PARFUMS HOLDING: Moody's Withdraws B3 CFR Following Debt Repayment
PBF HOLDING: Fitch Affirms 'BB' LongTerm IDR, Outlook Stable
PINEAPPLE ENERGY: Adjourns Annual Meeting to July 19
PROFESSIONAL DIVERSITY: Falls Short of Nasdaq Bid Price Requirement
PROFESSIONAL DIVERSITY: Falls Short of Nasdaq Bid Price Requirement
PROFESSIONAL DIVERSITY: Has $495K Sales Deal With CEO-Owned Firm
PROFESSIONAL DIVERSITY: Inks Stock Purchase Deal With Eighty-eight
PROJECT BOOST: Fitch Affirms 'B' LongTerm IDR, Outlook Stable
PROSOMNUS INC: Unsecureds Will Get 100% of Claims in Joint Plan
R & P LAND: Unsecureds to Get $800 per Month over 60 Months
RELIABLE HEALTHCARE: Plan Exclusivity Period Extended to August 16
RISKON INTERNATIONAL: Delays Annual Report for FY Ended March 31
S&W SEED: Amends Employment Contract With CEO Mark Herrmann
SALT LIFE: July 8 Deadline Set for Panel Questionnaires
SAN GORGONIO MEMORIAL: Moody's Lowers GOULT Bond Ratings to 'B1'
SHUTTERFLY LLC: Moody's Alters Outlook on 'Caa2' CFR to Positive
SINGING MACHINE: Completes Acquisition of SemiCab Inc.
SKILLZ INC: Moody's Withdraws 'Caa2' Corporate Family Rating
SM ENERGY: Fitch Puts 'BB-' LongTerm IDR on Watch Positive
SM ENERGY: Moody's Affirms 'Ba3' CFR, Outlook Remains Stable
SPECTRUM BRANDS: Fitch Affirms 'BB' LongTerm IDR, Outlook Stable
SPIRIT AEROSYSTEMS: Moody's Puts 'B2' CFR on Review for Upgrade
SPIRIT AIRLINES: Updates Leadership, Names Fred Cromer as EVP, CFO
TARONIS FUELS: Unsecureds Will Get 9.2% in Liquidating Plan
THREE PARTRIDGE: Seeks to Hire Finestone Hayes as Legal Counsel
TRACK ON 86: Seeks OK to Sell New Paltz Property for $2.2-Mil.
TRIUMPH GROUP: Moody's Upgrades CFR to B3, Outlook Stable
TRULEUM INC: Hires Barton CPA to Replace BF Borgers CPA as Auditor
TUPPERWARE BRANDS: Extends Forbearance Agreement to July 7
TURKEY LEG: Continued Operations to Fund Plan Payments
UNITED TRUSTT: Voluntary Chapter 11 Case Summary
VENEM LLC: Seeks to Hire Oppenhuizen Law as Bankruptcy Counsel
VERDE RESOURCES: Commits $750,000 in Sustainable Pavement Project
VERTEX AEROSPACE: Moody's Affirms 'B1' CFR, Outlook Stable
VIAVI SOLUTIONS: Fitch Affirms 'BB-' LongTerm IDR, Outlook Stable
VICTORY CLEAN: Appoints Astra Audit & Advisory as New Auditor
WILDBRAIN LTD: Moody's Puts 'B3' CFR on Review for Downgrade
WINDSOR TERRACE: Seeks to Extend Plan Exclusivity to September 20
XTI AEROSPACE: Inks $55MM Investment Deal at $275MM Valuation
YACHATS RURAL: Moody's Lowers Rating on $7.6MM GOULT Bonds to Ba3
ZOOZ POWER: Adjourns Annual Meeting to July 15
ZOOZ POWER: Adjourns Extraordinary Meeting Until July 15
[^] BOND PRICING: For the Week from July 1 to 5, 2024
*********
33 HOLDINGS: Voluntary Chapter 11 Case Summary
----------------------------------------------
Debtor: 33 Holdings, LLC
10929 S Lake Island Drive
South Jordan, UT 84009
Chapter 11 Petition Date: July 3, 2024
Court: United States Bankruptcy Court
District of Utah
Case No.: 24-23273
Judge: Hon. Peggy Hunt
Debtor's Counsel: Ted F. Stokes, Esq.
STOKES LAW PLLC
2072 North Main Suite 102
North Logan, UT 84341
Tel: (435) 213-4771
Fax: (888) 443-1529
E-mail: ted@stokeslawpllc.com
Total Assets as of July 2, 2024: $3,150,000
Total Liabilities as of July 2, 2024: $2,993,440
The petition was signed by Blake Hansen as manager.
The Debtor failed to include in the petition a list of its 20
largest unsecured creditors.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/D3LT4FQ/33_Holdings_LLC__utbke-24-23273__0001.0.pdf?mcid=tGE4TAMA
8434 ROCHESTER: Unsecureds Owed $755K to be Paid in Full in 5 Years
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8434 Rochester Ave RE, LLC, and affiliates filed with the U.S.
Bankruptcy Court for the Central District of California a
Disclosure Statement describing Chapter 11 Plan dated June 24,
2024.
The Debtors are each limited liability companies which own/operate
a single industrial commercial real property, each of which are
fully leased.
The Debtors' operations are overseen by Gustavo W. Theisen in his
capacity as manager member of the Debtors with the assistance of
the Debtors' commercial property manager, KNL Group, Inc. Mr.
Theisen, individually or through non-debtor related entities, has
guaranteed the loans provided by Preferred Bank that are secured by
the Properties.
Rochester owns/operates an industrial warehouse and distribution
facility (the Rancho Property) and which is leased to Ben Clymer's
the Body Shop, Inc. through July 31, 2026. Title to the Rancho
Property is vested 100% to Rochester. Rochester's principal asset
is the Rancho Property with a value of $7,500,000 and cash assets
of approximately $70,000 as of May 31, 2024.
Valencia owns/operates an industrial warehouse and distribution
facility (the Fontana Property) which is leased to Southwest
Medical Resources, Inc. through July 31, 2027. Title to the
Fontana Property is vested 100% to Valencia. Valencia's principal
asset is the Fontana Property with a value of $6,300,000 and cash
assets of approximately $55,000 as of May 31, 2024.
Sierra owns/operates an industrial warehouse and distribution
facility (the Chino Property) and which is leased to three tenants
(i) Pro Kitchen Buildings (through August 31, 2024); (ii) ARC
Innovation (through March 31, 2025), and (iii) Rising Star
Motorcoach (through August 31, 2026). Title to the Chino Property
is vested 50% to Sierra and 50% to Sierra Young. Sierra's principal
asset is the Chino Property with a value of $6,000,000 and cash
assets of approximately $6,000 as of May 31, 2024.
The Plan is a reorganization plan and a liquidation plan. The Plan
provides for a mechanism for the orderly sale, as necessary, of
real property assets, including those jointly owned with Sierra
Young and to effectuate a partition of their interests in real
property held jointly with the Youngs as necessary to allocate the
value of those assets as may be ordered by the Court.
The Plan will be funded by (i) Cash on hand on the Effective Date,
which will include rents that will have accumulated on all of the
Properties through the Effective Date, (ii) The sale of one or more
of the Properties and/or the Redlands Property, (iii) The
collection of receivables and other monies due to CSI, including
claims being made on CSI's directors and officers insurance policy
and a pending interpleader action in which CSI is named a party in
interest, (iv) ongoing rental income from the operation of the
Properties, and (v) a new value contribution by the Theisens of the
New Lien on the Newport Beach Property in favor of Preferred Bank
and contributing Sierra's one-half ownership interest in the Chino
Property as collateral for the $6.4579 million Loan.
The Debtors believe that by selling one or two of the Properties
(and/or the Redlands Property), the remaining Properties will
generate sufficient cash flow to fund operations and payments to
Preferred Bank until the New Maturity Date, by which time the
remaining Properties will be refinanced or sold to pay off any
remaining balance to Preferred Bank on its Loans.
The Debtors intend to sell one or more of the Properties and/or the
Redlands Property in order to pay down the debt of Preferred Bank.
Class 3-A consists of General Unsecured Claims (Convenience Class).
Creditors in Class 3-A will receive payment in full without
interest no later than 30 days after the Effective Date. The
allowed unsecured claims total $5,000. This Class is impaired.
Class 3-B consists of Sheila Horn General Unsecured Claim. The
General Unsecured Claim of Sheila Horn is disputed and
unliquidated. To the extent of any Allowed Class 3-B Claim, such
Allowed Class 3-B Claim shall be paid in full over 5 years after
the Effective Date with interest at the Federal Judgment Rate. The
allowed unsecured claims total $755,000 (disputed, contingent,
unliquidated). This Class is impaired.
The sole member of each of the Debtors shall remain the same and
shall retain its interest in each of the respective Debtors.
A full-text copy of the Disclosure Statement dated June 24, 2024 is
available at https://urlcurt.com/u?l=L4cl0g from PacerMonitor.com
at no charge.
General Counsel for the Jointly Administered Debtors:
James C. Bastian, Jr., Esq.
Melissa Davis Lowe, Esq.
Shulman Bastian Friedman & BUI LLP
100 Spectrum Center Drive, Suite 600
Irvine, CA 92618
Tel: (949) 340-3400
Fax: (949) 340-3000
Email: JBastian@shulmanbastian.com;
MLowe@shulmanbastian.com
About 8434 Rochester Ave, RE
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 serves as the Debtor's legal
counsel.
A&J LOGISTICS: Unsecureds to Split $148K over 60 Months
-------------------------------------------------------
A&J Logistics, LLC, filed with the U.S. Bankruptcy Court for the
Eastern District of Tennessee a Plan of Reorganization under
Subchapter V dated June 20, 2024.
The Debtor is a Tennessee Limited Liability Company that provides
transportation services to the eastern side of the United States.
The Debtor sough and procured multiple cash injections in the form
of advance loans with exorbitant interest rates, purported sales of
purchase payment rights, and purported sales of future receipts.
While these injections provided short term solutions, their
aggressive terms ensured future default.
Rowan Advance, LLC filed suit against Debtor in the Supreme Court
of the State of New York, County of Monroe, alleging inter alia
breach of contract by Debtor. Creditor Newbury Capital, LLC, also
provided notice of a purported U.C.C. lien against Debtor and filed
suit against Debtor in the Supreme Court of the State of New York,
County of Ontario on February 14, 2024, also alleging breach of
contract.
The Debtor has determined that the best course of action is to seek
protection under Chapter 11 of the United States Bankruptcy Code in
order to avoid immediate and irreparable cash flow disruptions.
This Plan of Reorganization proposes to pay the creditors of Debtor
from future income of the Debtor. The final Plan Payment is
expected to be paid on August 1, 2029, or 60 months after the
anticipated Effective Date.
Non-priority unsecured creditors holding allowed claims will be
paid with disbursements totaling $147,640.20 to the class. This
Plan also provides for the payment of administrative and priority
claims.
Class 6 shall consist of the allowed undersecured and unsecured
claims not entitled to priority and not expressly included in the
definition of any other class. The Plan provides a pool of
$147,640.20 to be paid to the claimholders in this class. The
Debtor shall pay $2,460.67 per month for 60 months beginning on the
Effective Date. This Class is impaired.
The Debtor will retain all ownership rights in property of the
estate.
The Debtor will continue business operations in order to produce
revenue sufficient to fund this 60-month Chapter 11 Plan.
The Debtor proposes to pay $3,770.60 per month for 60 months, which
is the amount necessary to pay all administrative costs, priority
claims, secured claims, and the unsecured claims in Class 6.
A full-text copy of the Plan of Reorganization dated June 20, 2024
is available at https://urlcurt.com/u?l=vOo7bf from
PacerMonitor.com at no charge.
Attorneys for the Debtor:
W. Thomas Bible, Jr., Esq.
Law Office of W. Thomas Bible, Jr.
6918 Shallowford Road, Suite 100
Chattanooga, TN 37421
Telephone: (423) 424-3116
Facsimile: (423) 553-0639
Email: tom@tombiblelaw.com
About A&J Logistics, LLC
A&J Logistics, LLC is a Tennessee Limited Liability Company that
provides transportation services to the eastern side of the United
States.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D. Tenn. Case No. 1:24-bk-10693-NWW) on
March 22, 2024. In the petition signed by Ashley Halloran,
president, the Debtor disclosed up to $500,000 in assets and up to
$10 million in liabilities.
W. Thomas Bible, Jr, Esq., at Tom Bible Law, represents the Debtor
as legal counsel.
ACT HOSPITALITY: Seeks to Hire Nicholson Devine as Counsel
----------------------------------------------------------
ACT Hospitality, Inc. and CT and JJ, Inc. seek approval from the
U.S. Bankruptcy Court for the District of Massachusetts to hire
Nicholson Devine LLC as counsel.
The firm will render these services:
a. advising the Debtors with respect to their rights, powers
and duties as debtors-in-possession in the continued operation and
management of their businesses;
b. advising the Debtors with respect to any plan of
reorganization and any other matters relevant to the formulation
and negotiation of a plan or plans of reorganization in these
cases;
c. representing the Debtors at all hearings and matters
pertaining to their affairs as debtors and debtors-in-possession;
d. preparing, on the Debtors' behalf, all necessary and
appropriate applications, motions, answers, orders, reports, and
other pleadings and other documents, and review all financial and
other reports filed in this Chapter 11 case;
e. advising the Debtors with respect to, and assisting in the
negotiation and documentation of, financing agreements, debt and
cash collateral orders and related transactions;
f. reviewing and analyzing the nature and validity of any
liens asserted against the Debtors' property and advising the
Debtors concerning the enforceability of such liens;
g. advising the Debtors regarding their ability to initiate
actions to collect and recover property for the benefit of their
estates;
h. advising and assisting the Debtors in connection with the
potential sale of the Debtors' assets;
i. advising the Debtors concerning executory contract and
unexpired lease assumptions, lease assignments, rejections,
restructurings and recharacterization of contracts and leases;
j. reviewing and analyzing the claims of the Debtors'
creditors, the treatment of such claims and the preparation, filing
or prosecution of any objections to claims;
k. commencing and conducting any and all litigation necessary
or appropriate to assert rights held by the Debtors, protect assets
of the Debtors' chapter 11 estate or otherwise further the goal of
completing the Debtors' successful reorganization other than with
respect to matters to which the Debtors retains special counsel;
and
l. performing all other legal services and providing all other
necessary legal advice to the Debtors as debtors-in-possession
which may be necessary in the Debtors' bankruptcy proceeding.
The firm will be paid at these rates:
Kate E. Nicholson $400/hour
Christine E. Devine $400/hour
Associates $250/hour
Paralegals $125/hour
The Debtor provided the firm with a $5,000 retainer pre-petition.
As disclosed in the court filings, Nicholson Devine is a
"disinterested person" as that term is defined in 11 U.S.C. Sec.
101(14).
The firm can be reached through:
Kate E. Nicholson, Esq.
Nicholson Devine LLC
21 Bishop Allen Drive
Cambridge, MA 02139
Phone: (857) 600-0508
Email: kate@nicholsondevine.com
About ACT Hospitality
ACT Hospitality, Inc., doing business as Box Seats, is a
sports-themed family restaurant and neighborhood bar, serving all
food and drinks in a relaxed, casual setting.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Mass. Case No. 24-40604) on June 11,
2024, with $100,000 to $500,000 in assets and $1 million to $10
million in liabilities. A. Charles Tgibedes, president, signed the
petition.
Kate E. Nicholson, Esq., at Nicholson Devine, LLC represents the
Debtor as legal counsel.
AGEAGLE AERIAL: 3 of 4 Proposals Approved at Annual Meeting
-----------------------------------------------------------
AgEagle Aerial Systems Inc. disclosed in a Form 8-K filed with the
Securities and Exchange Commission on July 2, 2024, that on June
27, 2024, the 2024 Annual Meeting of Shareholders of the Company
was held at which the shareholders:
(1) elected William Irby, Grant Begley, Thomas Gardner, Kelly J.
Anderson, and Malcolm Frost as directors of the Company;
(2) approved, on an advisory basis, the compensation of the
Company's named executive officers;
(3) ratified the appointment of WithumSmith+Brown, PC as the
Company's independent registered public accounting firm for the
fiscal year ending Dec. 31, 2024; and
(4) did not approve the issuance of shares of the Company's
common stock representing more than 20% of the Company's common
stock outstanding upon conversion of the convertible note in
accordance with NYSE American Rule 713(a)(ii).
About AgEagle
Headquartered in Wichita, Kansas, AgEagle Aerial Systems Inc.,
through its wholly owned subsidiaries, is actively engaged in
designing and delivering best-in-class drones, sensors and software
that solve important problems for its customers. Founded in 2010,
AgEagle was originally formed to pioneer proprietary,
professional-grade, fixed-winged drones and aerial imagery-based
data collection and analytics solutions for the agriculture
industry. Today, the Company is earning distinction as a globally
respected market leader offering customer-centric, advanced,
autonomous unmanned aerial systems ("UAS") which drive revenue at
the intersection of flight hardware, sensors and software for
industries that include agriculture, military/defense, public
safety, surveying/mapping and utilities/engineering, among others.
AgEagle has also achieved numerous regulatory firsts, including
earning governmental approvals for its commercial and tactical
drones to fly Beyond Visual Line of Sight ("BVLOS") and/or
Operations Over People ("OOP") in the United States, Canada, Brazil
and the European Union and being awarded Blue UAS certification
from the Defense Innovation Unit of the U.S. Department of
Defense.
Orlando, Florida-based WithumSmith+Brown, PC, the Company's auditor
since 2020, issued a "going concern" qualification in its report
dated April 1, 2024, citing that the Company has suffered recurring
losses from operations, has experienced cash used from operations
in excess of its current cash position, and has an accumulated
deficit, that raise substantial doubt about its ability to continue
as a going concern.
AMERICAN RESIDENTIAL: Moody's Affirms 'B2' CFR, Outlook Negative
----------------------------------------------------------------
Moody's Ratings affirmed American Residential Services L.L.C.'s
(American Residential Service or ARS) B2 corporate family rating
and B2-PD probability of default rating. At the same time, Moody's
downgraded ARS' ratings on the senior secured first lien term loan
rating to B2 from B1. Moody's also assigned a B2 rating to the new
senior secured first lien revolving credit facility. The outlook
remains negative.
ARS's proposed $75 million add-on to the existing first lien term
loan will be used to repay a portion of the company's $130 million
second lien term loan. The company's new $92.5 million revolver
credit facility expires July 2027 and will replace the existing $75
million facility expiring October 2025.
The downgrade of the first lien term loan to B2 reflects the
reduction in expected recovery of the instrument following the
proposed increase in first lien term loan. The B1 ratings to the
existing revolving credit facility will be withdrawn following
close of the transaction.
RATINGS RATIONALE
American Residential Services' B2 CFR reflects the company's high
leverage, presence in a fragmented market with intense competition,
and industry seasonality with susceptibility to weather conditions.
The rating also consider ARS's integration risk as an acquisitive
company. Nevertheless, the company has a track record of acquiring
and integrating businesses effectively.
The B2 CFR also considers the company's scale that provides
efficient access to the supply chain, geographic diversity, and the
non-discretionary nature of its services. Moody's believe ARS will
continue to gain market share through its differentiated service.
Moody's expect ARS to reduce leverage through EBITDA growth from
over 8x for the twelve months ending March 31, 2024.
ARS' negative outlook reflects the company's elevated leverage,
well above Moody's downgrade trigger of 6x. Moreover, the company's
ability to meaningfully improve performance is dependent on weather
conditions, which poses uncertainty to the timing of deleveraging.
ARS has good liquidity, which Moody's expect to be maintained over
the next 12 to 18 months. The company's liquidity is supported by
about $15 million in cash pro forma for the transaction and $60.5
million in availability under the company's new $92.5 million
revolving credit facility expiring July 2027. Moody's forecast
assumes less reliance on the revolver in fiscal year 2024, below
the company's springing covenant test of less than 65% revolver
availability. Moody's project about $20 million and $30 million of
free cash flow in fiscal 2024 and 2025.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be downgraded if ARS' debt-to-EBITDA remains
elevated above 6x, EBITA/Interest approaches 1x, or liquidity
deteriorates, including expectations for negative free cash flow.
The ratings could be upgraded if ARS' debt-to-EBITDA is sustained
below 5x, EBITA margin nears 15%, retained cash flow to net debt
approaches 15%, and the company maintains good liquidity.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
Headquartered in Memphis, Tennessee, American Residential Services
L.L.C. is one of the largest providers of HVAC, plumbing, sewer,
drain cleaning, and energy efficiency services in the United
States. For the last twelve months ended March 31, 2024, the
company generated $1.3 billion in revenue.
AQUABOUNTY TECHNOLOGIES: To Sell Facility & Equipment for $9.5M
---------------------------------------------------------------
AquaBounty Technologies, Inc. disclosed in a Form 8-K filed with
the Securities and Exchange Commission on July 2, 2024, that
AquaBounty Farms Indiana LLC ("AQB Indiana") and AquaBounty Farms
Ohio LLC ("AQB Ohio"), both wholly owned subsidiaries of the
Company, entered into an Asset Purchase Agreement with Superior
Fresh LLC, a Wisconsin limited liability company, pursuant to which
Superior Fresh will acquire AQB Indiana's land-based aquaculture
facility in Albany, Indiana and certain equipment from AQB Ohio for
cash proceeds of $9.5 million, subject to customary adjustments.
Portions of the proceeds of the Sale are expected to be used to
reduce the Company's secured term loan with JMB Capital Partners
Lending, LLC.
The Asset Purchase Agreement dated July 28, 2024, contains
customary representations, warranties, covenants and
indemnification provisions. The Sale is expected to close in July
2024, subject to various closing conditions. The Asset Purchase
Agreement contains certain termination rights for both Superior
Fresh and Seller.
A full-text copy of the Asset Purchase Agreement is available for
free at:
https://www.sec.gov/Archives/edgar/data/1603978/000160397824000053/aqb-20240628xex10_1.htm
About AquaBounty
At AquaBounty Technologies, Inc. -- http://www.aquabounty.com/--
is a land-based aquaculture. As a vertically integrated Company
from broodstock to grow out, the Company is leveraging decades of
its technology advances in fish breeding, genetics, and health &
nutrition, as well as its operational expertise, to deliver
innovative solutions that address food insecurity and climate
change issues. AquaBounty raises its fish in carefully monitored
land-based fish farms through a safe, secure and sustainable
process. The Company locates its land-based recirculating
aquaculture system farms close to key consumption markets, which
are designed to prevent disease and to include multiple levels of
fish containment to protect wild fish populations. AquaBounty
raises nutritious salmon that is free of antibiotics in a manner
that results in a reduced carbon footprint and no risk of pollution
to marine ecosystems as compared to traditional sea-cage farming.
Baltimore, Maryland-based Deloitte & Touche LLP, the Company's
auditor since 2021, issued a "going concern" qualification in its
report dated April 1, 2024, citing that the Company has incurred
cumulative operating losses and negative cash flows from operations
that raise substantial doubt about its ability to continue as a
going concern.
ARTISAN MASONRY: Updates Secured Tax Claim Details; Amends Plan
---------------------------------------------------------------
Artisan Masonry, Inc., submitted an Amended Plan of Reorganization
dated June 25, 2024.
The Plan provides for a reorganization and restructuring of the
Debtor's financial obligations.
The Plan provides for a distribution to Creditors in accordance
with the terms of the Plan from the Debtor over the course of 5
years from the Debtor's continued business operations.
Class 1A consists of the Secured Claim of Ad Valorem Tax
Authorities. Each holder of an Allowed Class 1A Claim payable to a
taxing authority for ad valorem taxes shall retain its full rights
and liens to the extent of its Allowed Secured Tax Claim until its
Allowed Secured Tax Claim has been paid in full. Payment shall be
made in full no later than 5 years from and after the Petition Date
in equal monthly payments. The Debtor estimates the aggregate of
all Allowed Class 1A Claims is $18,435.77 based upon the Court's
claim register.
The Amended Plan does not alter the proposed treatment for
unsecured creditors and the equity holder:
* Each holder of an Allowed Unsecured Claim in Class 3 shall
be paid by Reorganized Debtor from an unsecured creditor pool,
which pool shall be funded at the rate of $1,000 per month.
Payments from the unsecured creditor pool shall be paid quarterly,
for a period not to exceed 5 years (18 quarterly payments) and the
first quarterly payment will be due on the 20th day of the seventh
full calendar month after the Effective Date.
* Class 4 consists of the holders of Allowed Interests in the
Debtor. The holder of an Allowed Class 4 Interest shall retain
their interests in the Reorganized Debtor.
The Plan provides for a $60,000 dividend to all unsecured creditors
over a period of 5 years. Debtor contends the Plan provides for a
greater dividend to all creditors than would a liquidation of
assets under chapter 7.
The Debtor proposes to implement and consummate this Plan through
the means contemplated by Sections 1123 and 1145(a) of the
Bankruptcy Code.
A full-text copy of the Amended Plan dated June 25, 2024 is
available at https://urlcurt.com/u?l=0cknKw from PacerMonitor.com
at no charge.
Attorneys for the Debtor:
Robert T. DeMarco, Esq.
Michael S. Mitchell, Esq.
DeMarco Mitchell, PLLC
1255 W. 15th Street, 805
Plano, TX 75075
Telephone: (972) 578-1400
Facsimile: (972) 346-6791
Email: robert@demarcomitchell.com
mike@demarcomitchell.com
About Artisan Masonry
Artisan Masonry, Inc., operates a commercial window cleaning
business.
The Debtor filed its voluntary petition for relief under Chapter 11
of the Bankruptcy Code (Bankr. E.D. Tex. Case No. 23-42275) on Nov.
30, 2023. The petition was signed by Robert Gladu as president. At
the time of filing, the Debtor estimated up to $50,000 in assets
and up to $10 million in liabilities.
Judge Brenda T. Rhoades oversees the case.
DeMarco Mitchell, PLLC, serves as the Debtor's counsel.
ASHFORD HOSPITALITY: CEO Holds 1,082 Common Shares
--------------------------------------------------
Stephen Zsigray, President and CEO of Ashford Hospitality Trust,
Inc., filed a Form 3 Report with the U.S. Securities and Exchange
Commission, disclosing direct beneficial ownership of 1,082 shares
of Ashford's common stock.
A full-text copy of Mr. Zsigray's SEC report is available at:
https://tinyurl.com/mrxx5x3m
About Ashford Hospitality
Headquartered in Dallas, Texas, Ashford Hospitality Trust, Inc.
operates as a self-advised real estate investment trust focusing on
the lodging industry. As of March 31, 2024, the Trust had $3.54
billion in total assets against $3.67 billion in total
liabilities.
* * *
Egan-Jones Ratings Company, on May 5, 2023, maintained its 'CCC+'
foreign currency and local currency senior unsecured ratings on
debt issued by Ashford Hospitality Trust, Inc.
On March 1, 2024, the Company received notice that the hotel
properties securing the KEYS Pool A and KEYS Pool B loans have been
transferred to a court-appointed receiver.
On March 6, 2024, the Company sold the Residence Inn Salt Lake City
in Salt Lake City, Utah for $19.2 million in cash. As reported by
the TCR on April 22, the Company closed on the sale of the 390-room
Hilton Boston Back Bay in Boston, Massachusetts for $171 million,
on April 29 it has closed on the sale of the 85-room Hampton Inn in
Lawrenceville, Georgia for $8.1 million, on May 27, Ashford closed
$267M refinancing of the mortgage loan for the 673-room Renaissance
Hotel in Nashville, Tennessee, which had a final maturity date of
March 2026. On June 14, the Company has closed on the sale of the
90-room Courtyard located in Manchester, Connecticut for $8
million.
ATW TECH: Files for Insolvency Under Canada's Bankruptcy Act
------------------------------------------------------------
ATW Tech Inc. announced the filing of a voluntary assignment of its
property in accordance with the Canada's Bankruptcy and Insolvency
Act in order to carry out an orderly liquidation of its assets,
property and operations. In connection with this filing, Charles
Bresse, Licensed Insolvency Trustee of Bresse Syndics Inc., was
appointed as authorized trustee for proceedings under the Act.
The board of directors of the Company has authorized the voluntary
transfer of the assets of the Company given that ATW, despite
several attempts at reorganization, is no longer able to meet its
obligations when due, is insolvent and is not more able to finance
its operations.
For the same reasons, Semeon Analytique Inc. as well as RNIS
Telecommunications Inc., subsidiaries of the Company, will
undertake the same procedures under the Law.
The Company also announced that the directors of the Company
resigned on July 3rd, 2024, and that the employment of the officers
of the Company ended on July 3rd.
About ATW Tech Inc.
ATW Tech Inc. (TSXV: ATW) is a fast-growing tech company offering a
suite of customer experience solutions powered by artificial
intelligence and Big Data to foster customer engagement, loyalty
and retention.
AVENIR WELLNESS: Secures up to $472K Financing Commitment
---------------------------------------------------------
Avenir Wellness Solutions, Inc., disclosed in a Form 8-K filed with
the Securities and Exchange Commission that on June 28, 2024, it
entered into that certain securities purchase agreement with 1800
Diagonal Lending LLC, pursuant to which the Company agreed to issue
and sell to Diagonal Lending, in a private placement, bridge notes
in the principal amounts of (i) $49,450 including an original issue
discount of $6,450 ("Note A") and (ii) $72,450 including an
original issue discount of $9,450 ("Note B"), and additional
tranches of up to $350,000 in the aggregate, subject to further
agreement between Diagonal Lending and the Company.
Note A will be payable in four installments and Note B will be
payable in ten installments as set forth specifically within each
Note. Pursuant to the Notes, after the occurrence of an Event of
Default, the outstanding and unpaid portion of each Note is
convertible into the Company's Class A common stock, par value
$0.001 par value per share at a conversion price calculated by
multiplying 70% of the lowest Trading Price for the Common Stock
during the ten-day Trading Period ending on the latest complete
trading day prior to the Conversion Date. The Conversion Price is
subject to equitable adjustments for stock splits, stock dividends,
or rights offerings by the Company relating to the Company's
securities or the securities of any subsidiary of the Company,
combinations, recapitalization, reclassifications, extraordinary
distributions, and similar events. The number of shares of Common
Stock to be issued upon each conversion of the Note is determined
by dividing the outstanding amount owed on the Note by the
Conversion Price.
Each Note will have a one-time interest charge of 15% on Note A and
14% on Note B applied on the issuance date to the respective
principal amount of each Note. Any amount of principal or interest
on each Note which is not paid when due shall bear an interest rate
of 22% per annum from the due date thereof until such principal or
interest is paid. The Company has the right to repay each Note in
full at any time with no prepayment penalty.
The Securities Purchase Agreement contains customary
representations, warranties and covenants by, among and for the
benefit of the Parties, as well as customary indemnification
provisions.
About Avenir Wellness
Sherman Oaks, Calif.-based Avenir Wellness Solutions, Inc.,
including its wholly owned subsidiary, The Sera Labs, Inc., is a
broad platform technology company focusing on the development of
nutraceutical formulation and delivery technologies in novel dosage
forms to improve efficacy and enhance wellness. The Company's
primary business model is to develop health, wellness and beauty
products using its proprietary formulations and technology as well
as incubate new technologies for commercial exploitation through
product development of new products to be sold under existing or
new proprietary brands through Sera Labs and the licensing and/or
sale of the rights to such technologies to third parties for their
use. Development may include the conduction of clinical trials for
substantiation of efficacy of its products.
Pittsburgh, Pa.-based Urish Popeck & Co., LLC, the Company's
auditor since 2023, issued a "going concern" qualification in its
report dated May 16, 2024, citing that the Company has suffered
recurring losses from operations, has an accumulated deficit,
negative stockholders' equity, a working capital deficit, and
expects future losses. These conditions raise substantial doubt
about its ability to continue as a going concern.
AVENTIS SYSTEMS: Trustee Taps Stonebridge as Accountant
-------------------------------------------------------
Tamara Miles Ogier, as plan trustee of Aventis Systems, Inc. and
Cortavo, Inc., seeks approval from the U.S. Bankruptcy Court for
the Northern District of Georgia to employ Stonebridge Accounting &
Forensics, LLC, as accountant.
The Trustee wishes to employ Stonebridge Accounting & Forensics,
LLC to review the Debtors' financial records and prepare the tax
returns as necessary.
The firm will be paid at the rate of $295 per hour.
As disclosed in court filings, Stonebridge Accounting & Forensics
neither holds nor represents any interests adverse to the Debtors
or their estates, and is a "disinterested person" as defined in 11
U.S.C. 101(14).
The firm can be reached through:
Robert A. Albretsen, CPA
Stonebridge Accounting & Forensics, LLC
P.O. Box 1290
Grayson, GA 30017
Phone: (770) 825-2315
Email: bob@stonebridgeaccounting.com
About Aventis Systems
Aventis Systems, Inc., a company in Atlanta, offers custom IT
solutions to build and operate complete physical and virtual
infrastructures. The comprehensive solutions include refurbished
and new hardware, system and application software, and an array of
in-depth managed services including infrastructure consultation,
cloud hosting and migration, virtualization deployment, data and
disaster recovery, security consultation, hardware relocation, and
equipment buyback.
Aventis Systems and affiliate, Cortavo, Inc., sought protection
under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Ga. Lead
Case No. 23-51162) on Feb. 6, 2023. In the petition signed by its
chief executive officer, Hessam Lamei, Aventis Systems disclosed up
to $50 million in assets and up to $10 million in liabilities.
Judge Lisa Ritchey Craig oversees the cases.
The Debtors tapped Anna Humnicky, Esq., at Small Herrin, LLP as
bankruptcy counsel; AI Law as special counsel; and Nichols, Cauley
& Associates, LLC as accountant.
AVSC HOLDING: Moody's Puts 'Caa1' CFR on Review for Upgrade
-----------------------------------------------------------
Moody's Ratings placed the ratings of AVSC Holding Corp. (dba
"Encore"), a global leader in end-to-end event planning, production
and technology, on review for upgrade, including the company's Caa1
corporate family rating, the Caa1-PD probability of default rating,
the Caa1 senior secured first lien revolving credit facility due
2024 and senior secured first lien term loans due 2025-2026
ratings, as well as the Caa3 senior secured second lien term loan
due 2025. Previously, the outlook was stable.
Encore announced that it has signed definitive agreements with its
existing majority shareholder Blackstone Group, Inc. ("Blackstone")
and new investor W Capital Partners, a division of AXA IP Prime,
for new equity investments as well as entered into commitments for
a new seven-year debt structure. Proceeds will be used to refinance
the company's existing debt. The proposed transaction is expected
to close late 2024.
The review for upgrade reflects Moody's expectation that the
refinancing transaction will improve Encore's liquidity by
addressing the upcoming maturity of its exiting senior secured term
debt that begins in March 2025. While the financing terms have not
been disclosed, Moody's anticipate the proposed transaction will
result in lower leverage. As such, governance risk considerations
were material to this rating action. Moody's expect the outstanding
Encore's debt to be repaid upon closing. Following the repayment of
Encore's debt, Moody's will withdraw the company's ratings.
RATINGS RATIONALE / FACTORS THAT COULD LEAD TO AN UPGRADE OR
DOWNGRADE OF THE RATINGS
The review for upgrade reflects Moody's expectation that, upon
completion of the refinancing transaction, Encore's debt will be
repaid in full. The review will focus on the completion of the
transaction and the final capital structure, particularly repayment
of Encore's debt. Lastly, the review for upgrade will also assess
Encore's financial performance through the closing.
Encore's ratings could be upgraded if the company puts in place a
more tenable capital structure, demonstrates sustained growth in
revenue and earnings and maintains at least adequate liquidity. A
ratings upgrade would also require the company sustaining
debt-to-EBITDA (based on Moody's calculations) below 7.0 times and
maintaining positive free cash flow generation.
The review for upgrade indicates that a ratings downgrade is
unlikely over the next 12-18 months. However, Encore's ratings
could be downgraded if the company's liquidity deteriorates,
reports weaker than expected operating performance, delays in
addressing debt maturities, or the likelihood of a debt impairment
or other form of default increases.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
AVSC Holding Corp., operating under the primary brand name Encore,
is a leading provider in the audiovisual and event experiences
industry delivering creative production, advanced technology and
staging to help its customers deliver more dynamic and impactful
experiences at their meetings, trade shows and special events.
Encore is the event technology provider of choice at leading
hotels, resorts and convention centers. Its business model is based
on long-term partnerships with these venues, which establish Encore
as the exclusive on-site provider of event technology services.
Following the August 2018 leveraged buyout, Encore is majority
owned by affiliates of Blackstone Group, Inc.
BARNES & NOBLE: Narrows Net Loss to $63.2MM in FY Ended April 27
----------------------------------------------------------------
Barnes & Noble Education, Inc. filed with the U.S. Securities and
Exchange Commission its Annual Report on Form 10-K reporting a net
loss of $63.2 million on $1.6 billion of total sales for the year
ended April 27, 2024, compared to a net loss of $101.9 million on
$1.5 billion of total sales for the year ended April 29, 2023.
Barnes & Noble's primary sources of cash are net cash flows from
operating activities and funds available under its Credit Facility.
The Company's liquidity is highly dependent on the seasonal nature
of its business, particularly with respect to course material
sales, as sales are generally highest in the second and third
fiscal quarters, when college students generally purchase textbooks
for the upcoming Fall and Spring semesters, respectively. The
tightening of the Company's available credit commitments, including
the elimination and repayment of its seasonal borrowing facility
(FILO Facility) of $40 million, has had a significant impact on its
liquidity during Fiscal 2023 and Fiscal 2024, including its ability
to make timely vendor payments and school commission payments.
The Company's recurring losses and projected cash needs, combined
with its current liquidity levels and the maturity of its Credit
Facility and Term Loan, which were originally scheduled to become
due on December 28, 2024 and April 7, 2025, respectively, raised
substantial doubt about its ability to continue as a going concern
beyond 12 months from the issuance of its third quarter financial
statements as of March 12, 2024 as disclosed in its previously
filed Quarterly Report on Form 10-Q.
On June 10, 2024, subsequent to the end of Fiscal 2024, the Company
completed various transactions, including an equity rights
offering, private equity investment, Term Loan debt conversion, and
Credit Facility refinancing, to substantially deleverage its
consolidated balance sheet. These transactions raised additional
capital for repayment of indebtedness and provide additional
flexibility for working capital needs, which will also allow the
Company to strategically invest in innovation and continue to
execute its strategic initiatives, including but not limited to the
growth of its First Day Complete program.
As a result of the equity rights offering, private equity
investment, Term Loan debt conversion, and Credit Facility
refinancing, all executed on June 10, 2024, Management concluded
that substantial doubt about the Company's ability to continue as a
going concern no longer exists.
Jonathan Shar, CEO, commented, "We sincerely thank our employees,
partner institutions, vendors, and other business partners for
their support and understanding. It is a relief to move past that
difficult phase and embrace a fresh start. We are also grateful to
Fanatics, Lids and VitalSource Technologies for their continued
strategic support; we are thrilled to have them as significant
shareholders moving forward."
Shar further added, "With a significantly improved balance sheet,
Barnes & Noble Education is well-positioned to advance its industry
leadership while continuing to strategically invest in innovation
and improve the experiences and value we bring to our customers and
partner institutions. Our focus will remain on productivity and
cost efficiencies, while also making investments in technology. We
are seeking to drive material improvements in profitability and to
further build upon the strong financial foundation that we have
recently attained."
On June 11, 2024, the Company completed a 1-for-100 reverse stock
split. Current outstanding shares total approximately 26.2
million.
A full-text copy of the Company's Form 10-K is available at:
https://tinyurl.com/47atw24t
About Barnes & Noble Education
Basking Ridge, New Jersey-based Barnes & Noble Education, Inc.
("BNED") is one of the largest contract operators of physical and
virtual bookstores for college and university campuses and K-12
institutions across the United States. It is one of the largest
textbook wholesalers, inventory management hardware and software
providers that operates 1,289 physical, virtual, and custom
bookstores and serve more than 5.8 million students, delivering
essential educational content, tools and general merchandise within
dynamic omnichannel retail environment.
As of April 27, 2024, the Company had $905.1 million in total
assets, $834.5 million in total liabilities, and $70.6 million in
total stockholders' equity.
BASIC FUN: July 10 Deadline Set for Panel Questionnaires
--------------------------------------------------------
The United States Trustee is soliciting members for committee of
unsecured creditors in the bankruptcy cases of Basic Fun, Inc., et
al.
If a party wishes to be considered for membership on any official
committee that is appointed, it must complete a questionnaire
available at https://tinyurl.com/a225vdn3 and return by email it to
Timothy Fox, Esq -- Timothy.Fox@usdoj.gov -- at the Office of the
United States Trustee so that it is received no later than end of
day, on July 10, 2024.
If the U.S. Trustee receives sufficient creditor interest in the
solicitation, it may schedule a meeting or telephone conference for
the purpose of forming a committee.
About Basic Fun
Basic Fun is a dynamic global designer and marketer of classic,
innovative children's entertainment products. The Company's iconic
brands and broad product portfolio are sold by leading retailers
and distributors in over 60 countries around the world.
Basic Fun and four of its affiliates sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del., Lead Case
No. 24-11432) on June 28, 2024. In the petition signed by Bart M.
Schwartz, chief executive officer, Basic Fun disclosed $50 million
to $100 million in assets and $50 million to $100 million in
liabilities.
Polsinelli PC acts as general bankruptcy counsel to the Debtors.
Oppenheimer & Co. Inc. serves as financial advisor to the Debtors
while Stretto, Inc. is claims and balloting agent to the Debtors.
BERRY PETROLEUM: Moody's Alters Outlook on 'B2' CFR to Negative
---------------------------------------------------------------
Moody's Ratings revised the outlook of Berry Petroleum Company, LLC
to negative from stable and affirmed its existing ratings,
including B2 Corporate Family Rating, B2-PD Probability of Default
rating and B3 senior unsecured notes rating. The SGL-3 Speculative
Grade Liquidity Rating is unchanged.
"The negative outlook reflects increasing refinancing risks on the
company's debt, as well as continued restrictions on certain new
well drilling permits in Kern County, where nearly all of Berry's
assets are located," says Thomas Le Guay, a Moody's Ratings Vice
President. "Berry has prioritized returns to shareholders and
acquisitions over the past two years which has reduced its
available liquidity."
RATINGS RATIONALE
The negative rating outlook reflects heightened refinancing risks
for Berry's $200 million reserve-base lending (RBL) facility
maturing in August 2025 and its $400 million senior unsecured notes
maturing in February 2026, as well as increased business risks in
light of the ongoing environmental impact report (EIR) litigation
in Kern County that will likely continue to restrict the issuance
of certain new well permits through at least 2025.
Berry's B2 CFR continues to benefit from moderate leverage, free
cash flow generation and a steady production profile from its
low-decline Californian oil assets. The company has identified
workover and sidetracks opportunities on existing wells and new
well opportunities on acreage not reliant on the Kern County EIR
that should allow it to maintain production volumes into 2026 and
generate positive free cash flow in the current, still supportive,
commodity price environment.
The B2 CFR is constrained by Berry's exposure to regulatory risk on
its core oil exploration and production operations in California's
San Joaquin Basin, including the ongoing restrictions on the
development of certain new wells in Kern County. The CFR also
reflects the company's modest size, limited asset diversification,
and relatively high production cost using thermal enhanced
recovery. The company has been focused on returning substantial
capital to shareholders through dividends and share repurchases,
which limited any buildup of cash or debt repayment.
Berry will maintain adequate liquidity over the next 18 months, as
indicated by its SGL-3 rating. Liquidity is supported by Moody's
expectation that Berry will generate modest positive free cash flow
in 2024 and 2025 assuming oil prices at the midpoint of Moody's
medium term price range of $55-$75 per barrel and considering the
company's substantial hedging policies. Berry is facing heightened
refinancing risk as the majority of its debt matures over the next
18 to 24 months. It's $200 million RBL facility matures in August
2025 ($139 million of available capacity as of March 31, 2024) and
its $10 million asset-based lending (ABL) facility at subsidiary
C&J matures in June 2025 ($7 million of available capacity as of
March 31, 2024). The company's $400 million senior unsecured notes
mature in February 2026. The RBL facility has two maintenance
covenants -- a maximum leverage ratio of 2.75x and minimum current
ratio of 1.0x. Moody's expect Berry to remain well within the
stated covenant limits over the next 18 months.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Berry's ratings could be downgraded in case of a delayed resolution
or sustained limitation on permitting new wells in Kern County, if
retained cash flow/debt falls below 15% or if liquidity
deteriorates, including as a result of delayed refinancing.
An upgrade would require the company to increase its production
volumes to 40 Mboe/d, to maintain strong financial metrics and a
regulatory environment in California becoming more supportive of
ongoing operations.
Berry Petroleum Company, LLC, a wholly-owned subsidiary of Berry
Corporation (NASDAQ: BRY) headquartered in Dallas, Texas, is an
independent oil and gas exploration and production company with the
majority of its operations focused in California's San Joaquin
Basin. Berry also has smaller exploration and production operations
in the Uinta Basin of Utah and well intervention services in
California, with a focus on the State's growing plugging and
abandonment needs. The company produced an average of 25.4 thousand
barrels of oil equivalent per day (Mboe/d) in 2023, with over 90%
oil content, and had proved reserves of 103 million barrels of oil
equivalent (MMboe) as of December 31, 2023. Over 80% of its
production and reserves are in California.
The principal methodology used in these ratings was Independent
Exploration and Production published in December 2022.
BINDER SCIENCE: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Binder Science, LLC
3316 North County Rd 1108
Midland, TX 79706
Chapter 11 Petition Date: July 6, 2024
Court: United States Bankruptcy Court
Western District of Texas
Case No.: 24-70095
Debtor's Counsel: Robert T DeMarco, Esq.
DEMARCO MITCHELL, PLLC
12770 Coit Road, Suite 850
Dallas TX 75251
Tel: (972) 991-5591
Email: robert@demarcomitchell.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $10 million to $50 million
The petition was signed by Patric Palcic, chief restructuring
officer.
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/MMS7C5Y/Binder_Science_LLC__txwbke-24-70095__0001.0.pdf?mcid=tGE4TAMA
BION ENVIRONMENTAL: Director Gregory Schoener Holds 700,000 Shares
------------------------------------------------------------------
Gregory S. Schoener, a director of Bion Environmental Technologies,
Inc., filed a Form 3 Report with the U.S. Securities and Exchange
Commission, disclosing direct beneficial ownership of 700,000
shares of the Company's common stock.
A full-text copy of Mr. Schoener's SEC report is available at:
https://tinyurl.com/sms67dj9
About Bion
Bion Environmental Technologies, Inc. is a public company (OTC QB:
BNET) whose mission is to provide sustainable environmental and
economic solutions to the challenges faced by the livestock
industry and investment returns to its shareholders. 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.
In its Quarterly Report for the three months ended March 31, 2023,
Bion Environmental Technologies reported that 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.
BLUSH BOOTCAMP: Seeks to Hire Phillips & Thomas as Legal Counsel
----------------------------------------------------------------
Blush Bootcamp LLC seeks approval from the U.S. Bankruptcy Court
for the District of Kansas to hire Phillips & Thomas LLC to handle
the Ch. 11 bankruptcy proceedings.
The services to be rendered include providing the services needed
in representing a Chapter 11 debtor-in-possession, which include:
preparation of the bankruptcy forms and schedules, attendance at
the Sec. 341 meeting and other court hearings, preparation of the
disclosure statement and Chapter 11 plan, client conferences,
filing monthly operating reports, phone calls, emails, dealing with
creditors, and resolving confirmation issues.
George J. Thomas will charge $350 per hour.
The firm has received a retainer amount of $18,262, and a filing
fee of $1,738.
Phillips & Thomas and its members are disinterested parties as
defined in 11 U.S.C Section 101(14), representing no interest
adverse to the debtors or the debtors' estate on the matters upon
which they are to be engaged, according to court filings.
The firm can be reached through:
George J Thomas, Esq.
PHILLIPS & THOMAS LLC
5251 W 116th Place, Suite 200
Leawood, KS 66211
Tel: (913) 385-9900
Email: geojthomas@gmail.com
About Blush Bootcamp LLC
Blush Bootcamp offers personal care services.
Blush Bootcamp LLC filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. D. Kansas Case No.
24-20785) on June 24, 2024, listing $500,001 to $1 million in
assets and $1,000,001 to $10 million in liabilities. The petition
was signed by Max Gellert as president and CEO.
George J. Thomas, Esq. at Phillips & Thomas, LLC represents the
Debtor as counsel.
BOOST PARENT: Moody's Affirms 'B3' CFR, Outlook Remains Stable
--------------------------------------------------------------
Moody's Ratings affirmed Boost Parent, L.P.'s (J.D. Power) B3
corporate family rating and the B3-PD Probability of Default
Rating. Moody's also affirmed all existing credit ratings of the
company's subsidiary, Project Boost Purchaser, LLC's (Project
Boost), including its B2 Senior Secured Bank Credit Facility
rating. Concurrently, Moody's assigned a B2 rating to Project
Boost's proposed Senior Secured First Lien 7-year term loan and its
5-year Senior Secured First Lien revolving credit facility and a
Caa2 rating to Project Boost's Senior Secured Second Lien 8-year
term loan. The rating outlook remains stable at both entities.
The rating actions follow J.D. Power's announcement [1] that it
launched $2.9 billion in senior secured credit facilities
consisting of a $2.35 billion first-lien term loan, $150 million
revolver undrawn at close and $400 million second-lien term loan to
refinance its existing debt capital structure and €157.5
preferred equity held at Boost Parent, L.P. Moody's expect to
withdraw the existing Senior Secured Bank Credit Facility ratings
when the transaction is completed and the outstanding debts are
repaid in full with the refinancing proceeds.
Moody's view the refinancing transaction as credit positive.
Despite a temporary increase in leverage, the refinancing extends
debt maturities and enhances liquidity by upsizing the revolver to
$150 million from $80 million. Moody's project that J.D. Power will
be able to lower its leverage to a pre-transaction level within
12-18 months following the transaction.
RATINGS RATIONALE
J.D. Power's B3 CFR reflects its high financial leverage, heavy
interest burden, customer concentration in the North American
automotive industry and Moody's expectation that the company will
remain acquisitive potentially leading to debt funded acquisitions.
Moody's estimate that J.D. Power's debt/EBITDA will initially
increase to around 8x from 7.6x (proforma for a full year of
Autovista earnings and inclusive of Moody's adjustments) as of LTM
Q1 2024 and 6.8x as of FY2023 (Moody's adjusted). Moody's project
that the company's EBITDA improvement will drive leverage down to
around 7x range by the end of 2024, with further decline to the
5.5x – 6.5x range by the end of 2025, assuming no levering
transactions. Leverage metrics are inclusive of Moody's
adjustments.
The company garners credit strength from a robust catalog of
proprietary data that drives the company's value proposition to
automotive dealers, financial service companies and original
equipment manufacturers (OEMs), which creates barriers to entry
against any significant competition. J.D. Power's low capital
intensity and flexible cost structure supports its ability to
generate free cash flow. Liquidity s good, with no funded debt
maturities until 2031 proforma for the proposed transaction.
J.D. Power has good liquidity, supported by annual free cash flow
in the range of $40-$60 million in 2024, cash balances of around
$80 million and access to the upsized $150 million revolver
(undrawn at close). The company's sources of cash are expected to
comfortably cover its basic cash needs, including annual interest
expense of around $225 million, Moody's expectation of annual capex
in the $25 - $30 million range and $23.5 million amortization on
the proposed term loan. The company's proposed first lien term loan
is not expected to have financial covenants. The proposed revolver
is expected to have a springing first lien net leverage tested at
40% revolver utilization, set at 40% cushion. Moody's do not expect
it to be tested over the next 12-18 months, but if so Moody's
expect the company to remain in compliance. 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 $399
million and 100% of EBITDA, plus unlimited amounts subject to the
greater of 5.70x first lien net leverage ratio and leverage neutral
incurrence. There is an inside maturity sublimit up to the greater
of $399 million and 100% of EBITDA.
The credit agreement is expected to include a "blocker" provision
restricting the transfer of material intellectual property to
unrestricted subsidiaries.
The credit agreement is expected to provide some limitations on
up-tiering transactions, requiring 100% lender consent for
amendments that release all or substantially all of the collateral,
or voluntarily subordinate the liens on all or substantially all of
the collateral.
Amounts up to 100% of unused capacity from the restricted payments
shared general basket may be reallocated to incur debt.
Project Boost's senior secured 1st lien facilities (term loan and
revolver) are rated B2, one notch above J.D. Power's B3 CFR,
reflecting their first priority security interest in assets and the
loss absorption provided by the proposed $400 million second lien
term loan rated Caa2. The first lien debt is secured by
substantially all assets of J.D. Power and its subsidiaries.
The stable outlook reflects Moody's expectation that J.D. Power
will continue to grow EBITDA such that financial leverage will
decline to around 7x through 2024 and maintain good liquidity.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be downgraded if liquidity deteriorates,
debt/EBITDA is sustained above 8x, free cash flow were to turn
negative, or EBITA/interest is sustained below 1x (Moody's
adjusted).
The ratings could be upgraded if debt/EBITDA is sustained below 6x,
if free cash flow/debt is sustained above 5%, or if EBITA/Interest
sustained above 2x. All credit metrics are based on Moody's
standard adjustments.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
Boost Parent, L.P. (J.D. Power) is the holding company of Project
Boost Purchaser, LLC (Project Boost) the debt issuer and holding
company of several companies including J.D. Power and Autodata Inc.
The company's focus is on providing data analytics and technology
solutions to automotive OEMs and dealerships, insurance companies
and financial institutions. As of LTM Q1 2024, the company
generated revenue of approximately $845 million pro forma for a
full year of Autovista revenue contribution.
BRAND INDUSTRIAL: Moody's Affirms B3 CFR, Outlook Remains Positive
------------------------------------------------------------------
Moody's Ratings affirmed Brand Industrial Services, Inc.'s B3
Corporate Family Rating, B3-PD Probability of Default Rating, B3
rating on its senior secured term loan C, B3 rating on the senior
secured first lien notes and the B3 rating on the senior secured
first lien revolving credit facility due 2028. The tranche of the
revolving credit facility due 2025 was upgraded to B3 from Caa1.
The rating outlook remains positive.
"The positive outlook reflects Moody's expectation that
improvements in Brand's operations will result in positive free
cash flow generation and stronger credit metrics," stated James
Wilkins, Moody's Ratings Vice President.
RATINGS RATIONALE
Brand's B3 CFR reflects its high leverage, lack of consistent free
cash flow and uncertainty regarding the pace of recovery in the
company's earnings. The company's interest burden benefited from a
refinancing of the debt capital structure in the third quarter 2023
and equity contribution from its supportive sponsors that reduced
debt by -$1 billion. However, the maturity of interest rate caps in
June 2024 could result in a rise in interest expense. The company
does not have a history of consistent positive free cash flow
generation and improving earnings and profit margins since the
2020-2021 downturn associated with the COVID-19 pandemic has yet to
result in meaningful positive free cash flow. Moody's expect the
company's operating results to improve and for it to generate
positive free cash flow in 2024-2025, despite the uncertain
macroeconomic outlook and weakness in certain of the company's
commercial markets. The rating also considers the benefits of
company's scale, geographic diversity, leading market position in a
highly fragmented market, diversified revenue stream, a large,
broad customer base and high levels of recurring revenues.
The B3 ratings assigned to the senior secured bank credit facility
and the senior secured first lien notes are at the same level as
the B3 CFR and reflect the fact that all of the debt is secured,
benefits from guarantees from the US subsidiaries of the borrowers,
and ranks pari passu. The revolving credit facility includes two
tranches with maturity dates in 2025 and 2028.
Brand has adequate liquidity supported by a revolving credit
facility, an accounts receivable securitization facility, cash flow
from operations and cash balances. Moody's expect the company to
generate positive free cash flow through year-end 2025. The company
relies on the $712 million revolving credit facility for letters of
credit and, as of March 31, 2024, it had $198 million of
outstanding letters of credit and borrowings of $220 million. The
revolver has $676.6 million of commitments that mature in August
2028 and $35.8 million of commitments maturing in February 2025.
The credit facility has a springing maximum Consolidated Secured
Leverage Ratio financial covenant of 7.0x, which is triggered only
if over 35% of the revolver is drawn. The $700 million accounts
receivable financing facility due January 2027, is subject to
borrowing base limitations and had $502 million in borrowings and
$5 million in letters of credit outstanding as of March 31, 2024.
In April 2024, the company increased the size of its term loan by
$150 million and used the proceeds to repay short-term borrowings.
The positive outlook reflects Moody's expectation that Brand's
business will continue to recover and it will generate positive
free cash flow that will allow it to reduce debt and maintain
adequate liquidity.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if Debt-to-EBITDA is below 5.5x for a
sustained period of time, EBITA-to-Interest Expense approaches 2.0x
for a sustained period of time and the company improves its free
cash flow as well as maintains adequate liquidity. The rating could
be downgraded if Debt-to-EBITDA is above 6.5x for a sustained
period of time, EBITA-to-Interest expense is below 1.0x, a sizeable
debt financed acquisition is completed, or the liquidity profile
deteriorates.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
Brand Industrial Services, Inc., headquartered in Atlanta, GA, is
the largest provider of scaffolding, insulation, coatings and other
industrial services within the following market segments in North
America: upstream, midstream, and downstream oil & gas, power
generation, industrial and infrastructure. The company is majority
owned by Clayton, Dubilier & Rice and Brookfield Business Partners.
CAPITAL POWER: DBRS Assigns BB Rating to $450MM Sub. Notes Due 2054
-------------------------------------------------------------------
DBRS Limited assigned a rating of BB with a Stable trend to Capital
Power Corporation's (CPC or the Company) $450 million 8.125%
Fixed-to-Fixed Rate Subordinated Notes, Series 2 due June 5, 2054
(Subordinated Notes Series 2). Concurrently, Morningstar DBRS
placed CPC's existing 7.95% Fixed-to-Fixed Rate Subordinated Notes,
Series 1 due September 9, 2082 (Subordinated Notes Series 1) Under
Review with Developing Implications.
The Subordinated Notes Series 1 and Subordinated Notes Series 2
rank equally in right of payment until the occurrence of certain
bankruptcy and related events at which time the Subordinated Notes
Series 1 would automatically convert into preferred shares. The
Subordinated Notes Series 1 would then rank below the Subordinated
Notes Series 2. According to Morningstar DBRS' Hierarchy Principle,
as outlined in the Morningstar DBRS "Credit Ratings Global Policy,"
the Subordinated Notes Series 1 would be subordinate to the
Subordinated Notes Series 2 in the event of insolvency of the
Company. Due to our Hierarchy Principle the Subordinated Notes
Series 1 should be rated one notch below the Subordinated Notes
Series 2, implying a downgrade to BB (low) from BB.
However, CPC has indicated that it is evaluating possible options,
including a potential solicitation process to amend the terms so
the Subordinated Notes Series 1 rank pari passu in the event of
insolvency with the Subordinated Notes Series 2. Based on the
Company's intent to seek noteholder approval to make the
subordinated notes pari passu, Morningstar DBRS has placed the
Subordinated Notes Series 1 Under Review with Developing
Implications. Following a successful process that would result in
the Subordinated Notes Series 1 being ranked pari passu in the
event of insolvency with the Subordinated Notes Series 2,
Morningstar DBRS will remove the Under Review with Developing
Implications designation from the Subordinated Notes Series 1 and
confirm their rating at BB with a Stable trend. Conversely, a lack
of progress to make the notes pari passu over the next few months
could result in Morningstar DBRS downgrading the Subordinated Notes
Series 1 to BB (low). Morningstar DBRS aims to resolve any Under
Review action within 90 days.
Notes: All figures are in Canadian dollars unless otherwise noted.
CAPSTONE INVESTMENTS: Amends Unsecureds & Fannie Mae Secured Claims
-------------------------------------------------------------------
Capstone Investments, LLC submitted a First Amended Subchapter V
Plan of Reorganization dated June 20, 2024.
The Debtor has formulated a plan of reorganization. Under this
Plan, the Debtor intends to distribute the cash generated from its
operations to holders of Allowed Claims.
This Plan provides for the treatment of Claims and Interests as
follows:
* Allowed General Unsecured Claims will be paid in full;
* Allowed Secured Claims will be paid in full; and
* Equity Security Holders, i.e., the Debtor's members, will
retain their Interests in the Debtor.
The Debtor proposes to pay all Allowed Claims in full not later
than 48 months after the Effective Date of this Plan.
This Plan is the Debtor's First Amended Plan. With the input of the
Subchapter V Trustee, the Debtor has made several immaterial
modifications to address the objection to confirmation filed by
Fannie Mae. Specifically, the Debtor has increased the cramdown
interest rate from 4.77% to 6.00%.1 The Debtor also increased the
amount of Fannie Mae's Claim to include certain charges.
Class 1 consists of the Secured Claim of Fannie Mae. This Plan
contemplates a re-amortization of Fannie Mae's Claim. Under the
Loan Documents, the Fannie Mae debt was amortized over a 30-year
period with a balloon payment in four years. This Plan extends the
Maturity Date, i.e., the balloon payment date, by 12 months, from
June 2027 to June 2028. The amount of Fannie Mae's Proof of Claim
($2,778,145.24) was calculated after applying the suspense fund.
Fannie Mae's Class 1 treatment was calculated by adding back the
suspense fund to the Proof of Claim amount, for a total of
$2,934,378.68. The Debtor then subtracted certain charges. From the
suspense account, Fannie Mae shall reserve and escrow $15,000 for
the replacement reserve, $12,000 for the payment of next year's
property taxes, and $10,000 for the repair escrow account. The
remainder of suspense funds will be applied to reduce the principal
amount of Fannie Mae's Claim.
The Debtor anticipates that it will have made five adequate
protection payments of $18,712.79 to Fannie Mae prior to the
Effective Date. These adequate protection payments will be treated
as if the Fannie Mae debt was re-amortized as of February 1, 2024,
and were applied as principal and interest payments. Thus, the
principal balance of Fannie Mae's Claim on the Effective Date would
be an estimated $2,724,212.33. Beginning on the Effective Date, the
Debtor will pay Fannie Mae each month: $16,483.40 for principal and
interest; $2,000.00 for the property tax escrow (subject to annual
adjustment); and $1,245.00 for the monthly replacement reserve
deposit.
The existing Fannie Mae loan documents, including any amendments or
modifications thereto, between the Debtor and Fannie Mae, including
the (i) Multifamily Note, (ii) Acknowledgement and Agreement of Key
Principal to Personal Liability for Exceptions and NonRecourse
Liability, and (iii) Multifamily Mortgage, Assignment of Rents and
Security Agreement shall be fully assumed by the Reorganized
Debtor, and will govern, save and except the exceptions,
modifications and/or stipulations specified in this Plan.
Class 3 consists of General Unsecured Claims. After payment in full
of Allowed Administrative Claims, holders of Allowed General
Unsecured Claims will receive a Pro Rata share of consecutive
monthly payments of $4,500.00 until paid in full. The discount rate
used to calculate present value for holders of Allowed General
Unsecured Claims is 2.75% per annum. The allowed unsecured claims
total $243,607.59.
The Debtor estimates that payment to Class 3 Creditors will
commence in January 2025 and continued for approximately 42 months.
The unpaid balance of Allowed General Unsecured Claims shall be
paid not later than the earlier of: (1) the end of the Commitment
Period; or (2) the closing of the sale or refinance of the
Apartment Complex or Iverstine Property.
However, if the Iverstine Property is sold or refinanced before the
Apartment Complex and the proceeds of such sale or refinancing are
insufficient to pay holders of Allowed General Unsecured Claims in
full, then the remaining unpaid balance of such claims shall be
paid from the sale or refinancing of the Apartment Complex. Holders
of Allowed general Unsecured Claims shall be secured by a third
mortgage on the Apartment Complex and the Iverstine Property.
Funds needed to make cash payments on or before the Effective Date
under this Plan shall come from cash on hand and/or the operations
of the Apartment Complex. All payments on and/or after the
Effective Date shall be made by Reorganized Debtor from cash on
hand and/or the operations of the Apartment Complex.
Holders of Allowed Administrative Claims and General Unsecured
Claims shall be secured by second and third mortgages,
respectively, on the Apartment Complex and the Iverstine Property.
Such mortgages shall be subordinate to the mortgages held by Fannie
Mae and First American, as the case may be.
A full-text copy of the First Amended Subchapter V Plan dated June
20, 2024 is available at https://urlcurt.com/u?l=BDfdXP from
PacerMonitor.com at no charge.
Attorneys for the Debtor:
Ryan J. Richmond, Esq.
Ashley M. Caruso, Esq.
STERNBERG NACCARI & WHITE, LLC
450 Laurel Street, Suite 1450
Baton Rouge, LA 70801
Tel. (225) 412-3667
Fax: (225) 286-3046
Email: ryan@snw.law
ashley@snw.law
About Capstone Investments LLC
Capstone Investments, LLC is engaged in activities related to real
estate. The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. M.D. La. Case No. 24-10064) on January 31,
2024. In the petition signed by David J. Wascom, managing member,
the Debtor disclosed up to $10 million in both assets and
liabilities.
Judge Michael A. Crawford oversees the case.
Ryan J. Richmond, Esq., at Sternberg, Naccari and White, LLC, is
the Debtor's legal counsel.
CARVANA CO: Ernest Garcia II Holds 41.1 Stake as of June 27
-----------------------------------------------------------
Ernest C. Garcia II disclosed in a Schedule 13D/A Report filed with
the U.S. Securities and Exchange Commission that as of June 27,
202, he and affiliated entities, Verde Investments, Inc. and ECG II
SPE, LLC, beneficially owned shares of Carvana Co.'s Class A Common
Stock.
Ernest C. Garcia II holds 42,079,817 shares, including 41,442,317
shares on an as-converted basis, representing 41.1% of 116,947,248
Class A Shares outstanding as of April 29, 2024. Verde Investments,
Inc. holds, 2,578,314 shares which Mr. Garcia wholly owns and
controls, representing 2.2% of the shares outstanding, and ECG II
SPE, LLC holds 8,000,000 shares on an as-converted basis which Mr.
Garcia also wholly owns and controls, representing 6.4% of the
shares outstanding.
A full-text copy of Mr. Garcia's SEC Report is available at:
https://tinyurl.com/4fzsm56d
About Carvana
Founded in 2012 and based in Tempe, Arizona, Carvana Co. --
http://www.carvana.com-- is an e-commerce platform for buying and
selling used cars. The Company is transforming the used car buying
and selling experience by giving consumers what they want, a wide
selection, great value and quality, transparent pricing, and a
simple, no pressure transaction. Each element of its business,
from inventory procurement to fulfillment and overall ease of the
online transaction, has been built for this singular purpose.
* * *
As reported by the TCR on Sept. 13, 2023, S&P Global Ratings raised
its issuer credit rating on U.S.-based Carvana Co. to 'CCC+' from
'D'. S&P said, "The negative outlook reflects our expectation that
we could downgrade the company if the company's performance were to
deteriorate further such that we believe liquidity would become
constrained or if we believe there is a likelihood the company
could conduct a distressed restructuring over the next 12 months.
The upgrade to 'CCC+' reflects the near-term improvement in the
company's liquidity position, though the capital structure remains
unsustainable."
Moody's Investors Service upgraded Carvana Co.'s corporate family
rating to Caa3 from Ca, the TCR reported on Sept. 22, 2023. Moody's
said the upgrade of Carvana's CFR to Caa3 reflects the completion
of its debt exchange that pushes out some near-term maturities,
reduces outstanding debt and materially reduces cash interest
expense in the two years following the exchange.
CHICKEN SOUP: July 8 Deadline Set for Panel Questionnaires
----------------------------------------------------------
The United States Trustee is soliciting members for committee of
unsecured creditors in the bankruptcy cases of Chicken Soup for the
Soul Entertainment, Inc., et al.
If a party wishes to be considered for membership on any official
committee that is appointed, it must complete a questionnaire
available at https://tinyurl.com/yfhz85sk and return by email it to
Jane M. Leamy, Esq at the Office of the United States Trustee so
that it is received no later than end of day, on July 8, 2024.
If the U.S. Trustee receives sufficient creditor interest in the
solicitation, it may schedule a meeting or telephone conference for
the purpose of forming a committee.
About Chicken Soup
Chicken Soup for the Soul Entertainment Inc. provides premium
content to value-conscious consumers. The Company is one of the
largest advertising supported video-on-demand (AVOD) companies in
the United States, with three flagship AVOD streaming services:
Redbox, Crackle, and Chicken Soup for the Soul.
Chicken Soup for the Soul Entertainment and about 20 of its
affiliates sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Del., Lead Case No. 24-11442) on June
28, 2024.
In the petition signed by Bart M. Schwartz, chief executive
officer, Chicken Soup disclosed total consolidated assets of
$414,075,844 and total consolidated liabilities of $970,002,065.
Ashby & Geddes, P.A., represents the Debtors as general bankruptcy
counsel and Reed Smith LLP serves as counsel too. Solomon Partners
acts as investment banker to the Debtor. Kroll Restructuring
Administration LLC serves as claims and noticing agent to the
Debtor.
COCHRAN PLUMBING: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Cochran Plumbing Company, LLC
2610 Sandhill Road
Guyton GA 31312
Business Description: The Debtor is a provider of plumbing
services based in Guyton, Georgia.
Chapter 11 Petition Date: July 5, 2024
Court: United States Bankruptcy Court
Southern District of Georgia
Case No.: 24-40568
Judge: Hon. Edward J. Coleman III
Debtor's Counsel: Jon Levis, Esq.
LEVIS LAW FIRM, LLC
Post Office Box 129
Swainsboro GA 30401
Tel: 478-237-7029
Email: levis@levislawfirmllc.com
Total Assets: $646,438
Total Liabilities: $1,602,174
The petition was signed by Christopher J. Cochran 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/VZJKKRY/Cochran_Plumbing_Company_LLC__gasbke-24-40568__0001.0.pdf?mcid=tGE4TAMA
CONGA CORP: Moody's Ups CFR to 'B2' & Alters Outlook to Stable
--------------------------------------------------------------
Moody's Ratings upgraded Conga Corporation's ratings, including the
Corporate Family Rating, to B2 from B3. The upgrade reflects
Moody's expectation for continued growth in revenue and EBITDA and
improving leverage and free cash flow metrics. The outlook changed
to stable from positive.
Moody's also upgraded the company's first lien senior secured
credit facility to B2 from B3 and Probability of Default Rating to
B2-PD from B3-PD. Moody's adjusted debt to EBITDA for the fiscal
year ended January 31, 2024 was over 7x (around 6x on a billings,
cash adjusted EBITDA basis) and free cash flow to debt was 6%, in
line with metrics for the B2 software category. Revenue grew around
9% in FY 2024 and cash flow improved as restructuring and one time
costs wound down and working capital management improved.
RATINGS RATIONALE
Conga's B2 CFR reflects the still high financial leverage offset by
the company's leading position as a provider of revenue operations
software for enterprise customers. The profile is supported by the
strong recognition in the Salesforce CRM ecosystem, as well as the
well-entrenched historical relationship with Salesforce as a
partner and reseller of key Conga products. Conga should benefit
from Salesforce's continued strong growth as well as product
expansion within existing customers. While there is a reliance on
the Salesforce ecosystem, Conga continues to diversify into
alternate revenue operations platforms.
Conga benefits from its significant cash balances (over $125
million at January 31, 2024 and a relatively solid cash to debt
ratio of 22%). However, the company can be acquisitive which could
occasionally result in temporary increases in leverage.
Liquidity is very good based on a strong cash balance, an undrawn
$50 million revolver and Moody's expectation of more than $30
million of free cash flow in the next 12-18 months.
The stable outlook reflects Moody's expectation of mid-single digit
revenue growth, Moody's adjusted leverage trending towards 6x, and
free cash flow to debt of greater than 5% over the next 12 -18
months.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Conga's ratings could be upgraded if the company sustains revenue
growth, maintains or improves market share, drives leverage below
5x (including Moody's adjustments), and produces free cash flow to
debt greater than 10%.
Conga's ratings could be downgraded if performance deteriorates,
the company pursues a large debt financed acquisition or
distribution, leverage remains over 7.5x or free cash flow to debt
falls below 2.5% on other than a temporary basis.
Conga is a software provider that offers digital revenue operation
services to facilitate digital document processing, managing of
customer contracts and related sales and finance activity by
integrating with an organization's customer relationship management
(CRM) systems. The company had revenues around $460 million for the
twelve months ended January 31, 2024. Conga is owned by private
equity firm Thoma Bravo. Thoma Bravo acquired Apttus Corporation in
2018 which subsequently acquired AppExtremes LLC (dba Conga) in
2020. The company does business as Conga following the acquisition.
Apttus Corporation changed its name to Conga Corporation in May
2024.
The principal methodology used in these ratings was Software
published in June 2022.
CYTOSORBENTS CORP: Secures $20 Million Credit Facility
------------------------------------------------------
CytoSorbents Corporation announced that on June 28, 2024, the
Company entered into a new $20 million credit facility with Avenue
Capital Group, including its Avenue Venture Opportunities Fund,
L.P. and Avenue Venture Opportunities Fund II, L.P. Armentum
Partners, LLC served as financial advisor to the Company on the
transaction. Proceeds from the facility are intended to provide
non-dilutive working capital to support the Company's ongoing
global CytoSorb franchise in critical care and cardiac surgery that
generated $32.2 million in trailing 12-month sales as of March 31,
2024, planned marketing applications to U.S. Food and Drug
Administration (FDA) and Health Canada for DrugSorb-ATR and initial
launch and commercialization preparations if approved, and
refinancing of existing Bridge Bank debt.
The credit agreement, which has an initial term of three years,
provides up to $20 million in total term loan capital including an
initial tranche of $15 million, with immediate availability of $10
million and an additional $5 million with the timely acceptance by
U.S. FDA of the Company's planned De Novo application for
DrugSorb-ATR and certain liquidity requirements. A second tranche
of $5 million would be available in the second half of 2025 with
FDA marketing clearance for DrugSorb-ATM to help support an
anticipated launch of the therapy in the United States.
Ms. Kathleen Bloch, chief financial officer of CytoSorbents stated,
"We are pleased to enter into this relationship with Avenue Capital
Group to strengthen our financial position, expand our working
capital, and to enable us to confidently pursue our regulatory and
commercialization objectives. We believe the planned marketing
applications of DrugSorb-ATR to U.S. FDA and Health Canada this
summer and the prospects of opening an estimated total addressable
market in the U.S. and Canada in excess of $0.5 billion if
approved, represents a potential watershed event for the Company.
As an FDA Breakthrough Device, DrugSorb-ATR aims to reduce serious
bleeding complications in patients undergoing coronary artery
bypass graft (CABG) surgery on the blockbuster blood-thinning drug
Brilinta (ticagrelor, AstraZeneca) - a major unmet medical need.
The full $20 million is expected to help fund the Company through
both Health Canada and U.S. FDA regulatory decisions."
Mr. Chad Norman, Senior Portfolio Manager at Avenue Capital Group
stated "We have followed the CytoSorbents story for many years and
all of the exciting work the company is doing to help save lives in
critical care and cardiac surgery. We are pleased to now partner
with CytoSorbents to support the international growth of CytoSorb
and other products, and importantly help fund the U.S. and Canadian
initiatives with DrugSorb-ATR. Many of us unfortunately know
family, friends, and colleagues on blood thinners and the high
bleeding risk they have, should they need surgery. We see a great
opportunity to be part of a solution to address this major
problem."
About CytoSorbents
Based in Monmouth Junction, N.J., CytoSorbents Corporation is
engaged in critical care immunotherapy, specializing in blood
purification. Its flagship product, CytoSorb, is approved in the
European Union with distribution in more than 75 countries around
the world as an extracorporeal cytokine adsorber designed to reduce
the "cytokine storm" or "cytokine release syndrome" seen in common
critical illnesses that may result in massive inflammation, organ
failure and patient death.
East Brunswick, New Jersey-based WithumSmith+Brown, PC, the
Company's auditor since 2004, issued a "going concern"
qualification in its report dated March 14, 2024, citing that the
Company has suffered recurring losses from operations, has
experienced cash used from operations, and has an accumulated
deficit, which raise substantial doubt about its ability to
continue as a going concern.
DANIEL SMART: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Daniel Smart Manufacturing Inc.
d/b/a Daniel Smart Leather
6252 Frankford Avenue
Baltimore City, MD 21206
Business Description: Daniel Smart has been making and
distributing motorcycle gear, accessories
and fashion leather apparel since 1992.
Chapter 11 Petition Date: July 5, 2024
Court: United States Bankruptcy Court
District of Maryland
Case No.: 24-15658
Judge: Hon. Michelle M Harner
Debtor's Counsel: Janet M. Nesse, Esq.
MCNAMEE HOSEA, P.A.
6404 Ivy Lane, Suite 820
Greenbelt, MD 20770
Tel: (301) 441-2420
Fax: (301) 982-9450
E-mail: jnesse@mhlawyers.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Hassan Tariq, president/owner.
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/GXWBN2Q/Daniel_Smart_Manufacturing_Inc__mdbke-24-15658__0001.0.pdf?mcid=tGE4TAMA
DELTA APPAREL: Files for Bankruptcy, Inks Asset Sale Deal With FCM
------------------------------------------------------------------
Delta Apparel, Inc. disclosed in a Form 8-K Report filed with the
U.S. Securities and Exchange Commission that on June 30, 2024, the
Company and its domestic direct and indirect subsidiaries,
including Salt Life Beverage, LLC and Salt Life, LLC, filed
voluntary petitions under Chapter 11 of the United States
Bankruptcy Code in the United States Bankruptcy Court for the
District of Delaware. The Debtors have requested that the
Bankruptcy Court administer the Chapter 11 Cases jointly under the
caption, In re: Salt Life Beverage, LLC, et al, Case No. 24-11468
(LSS).
The Debtors will continue to operate their businesses as a
debtor-in-possession and pursue a structured sale of their assets
pursuant to one or more competitive bidding processes or other
strategic arrangements involving such assets. The Debtors are
seeking approval of "first day" motions containing customary relief
intended to enable the Debtors to continue their ordinary course
operations during the Chapter 11 Cases. In addition, the Debtors
expect to file with the Bankruptcy Court a motion seeking approval
of a senior secured super-priority debtor-in-possession
post-petition financing arrangement with Wells Fargo Bank and the
other lenders party to the Pre-Petition Credit Agreement, the
Company's existing senior secured lenders, to help fund operations
during the pendency of the Chapter 11 Cases, the terms of which
will be disclosed if the DIP Financing is approved by the
Bankruptcy Court and entered into between the Debtors, Wells Fargo
and the DIP Lenders.
Prior to the filing of the Chapter 11 Cases, on June 28, 2024, the
Company and Salt Life entered into an Asset Purchase Agreement with
FCM Saltwater Holdings, Inc., a Delaware corporation, pursuant to
which, subject to the terms and conditions set forth in the Asset
Purchase Agreement, Buyer agreed to acquire certain assets related
to the Sellers' business of marketing, sourcing, licensing, and
selling of Salt Life branded products and assume certain specified
liabilities of the Sellers, for a total purchase price of
approximately $28.03 million in cash. The Purchase Price is subject
to adjustment after closing of the Salt Life Transaction based on
final net accounts receivable and certain inventory calculations.
Following entry into the Asset Purchase Agreement, 10% of the
Purchase Price was paid by Buyer into an escrow account.
Upon Bankruptcy Court approval, Buyer is expected to be designated
as the "stalking horse" bidder in connection with a sale of the
Salt Life Assets under section 363 of the Bankruptcy Code. The Salt
Life Transaction will be conducted through a Bankruptcy
Court-supervised process pursuant to Bankruptcy Court-approved
bidding procedures and is subject to the receipt of higher or
better offers from competing bidders at an auction, approval of the
sale by the Bankruptcy Court, and the satisfaction of certain
conditions. Subject to Bankruptcy Court approval, in the event that
Buyer is not the successful bidder at the auction, Buyer may be
entitled to a break-up fee equal to approximately 3% of the
Purchase Price plus reimbursement of expenses up to 1.5% of the
Purchase Price.
The Asset Purchase Agreement contains customary representations,
warranties and covenants of the parties for a transaction involving
the acquisition of assets from a debtor in bankruptcy, and the
completion of the Salt Life Transaction is subject to a number of
customary conditions, which, among others, include the entry of an
order of the Bankruptcy Court authorizing and approving the Salt
Life Transaction, the performance by each party of its obligations
under the Asset Purchase Agreement and the accuracy of each party's
representations, subject to certain materiality qualifiers.
The Asset Purchase Agreement may be terminated, subject to certain
exceptions: (i) by the mutual written consent of the parties or
(ii) by either party,
(a) if any court or other competent governmental entity issues
a final, non-appealable order restraining, enjoining, or otherwise
prohibiting the Salt Life Transaction;
(b) if the closing has not occurred on or prior to September
13, 2024;
(c) if the Chapter 11 Cases are dismissed or converted to a
case under Chapter 7 of the Bankruptcy Code or if a trustee or
examiner with expanded powers to operate or manage the financial
affairs or reorganization of the Sellers is appointed in the
Chapter 11 Cases; or
(d) for certain material breaches by the other party of its
representations and warranties or covenants that remain uncured
following a specified cure period, in each case only if the party
seeking to terminate is not then in material breach of the Asset
Purchase Agreement. Upon termination of the Asset Purchase
Agreement, the Deposit will be returned to Buyer, except in the
event of certain specified termination triggers, including due to
the Buyer's material breach of the Asset Purchase Agreement such
that the closing conditions specified therein could not be
satisfied by the Outside Date.
The filing of the Chapter 11 Cases constitutes an event of default
that accelerated the Company's obligations under the Fifth Amended
and Restated Credit Agreement, dated as of May 10, 2016, by and
among the Debtors and the DIP Lenders. The Pre-Petition Credit
Agreement provides that as a result of the Chapter 11 Cases, all
outstanding amounts thereunder shall be immediately due and
payable. Any efforts to enforce payment obligations under the
Pre-Petition Credit Agreement are automatically stayed as a result
of the filing of the Chapter 11 Cases and the holders' rights of
enforcement in respect of the Pre-Petition Credit Agreement are
subject to the applicable provisions of the Bankruptcy Code.
About Delta Apparel
Headquartered in Duluth, Georgia, Delta Apparel, Inc. is a
vertically integrated, international apparel company with
approximately 6,800 employees worldwide. The Company designs,
manufactures, sources, and markets a diverse portfolio of core
activewear and lifestyle apparel products under its primary brands
of Salt Life, Soffe, and Delta. The Company specializes in selling
casual and athletic products through a variety of distribution
channels and tiers, including outdoor and sporting goods retailers,
independent and specialty stores, better department stores and
mid-tier retailers, mass merchants, eRetailers, the U.S. military,
and through its business-to business digital platform.
Delta Apparel Inc. and six affiliates filed for Chapter 11
protection in Wilmington, Del., on June 30, 2024, with a deal in
hand to sell its Salt Life brand. The lead case is In re Salt Life
Beverage, LLC (Bankr. D. Del. Lead Case No. 24-11468). The Hon.
Judge Laurie Selber Silverstein presides over the cases. Lawyers
at Polsinelli PC serve as counsel to the Debtors. Tim Pruban at
Focus Management Group is serving as the Debtors' chief
restructuring officer. MMG Advisors, Inc., serves as investment
banker. Epiq is the claims and noticing agent and administrative
advisor. Delta Apparel's assets as of June 1, 2024, total
$337,801,000 and debts total $244,564,000. The petitions were
signed by Mr. Pruban.
Counsel for Wells Fargo, the DIP Agent:
Daniel F. Fiorillo, Esq.
Chad B. Simon, Esq.
Otterbourg P.C.
230 Park Avenue
New York, NY 10169-0075
Fax: (212) 682-6104
Email: dfiorillo@otterbourg.com
csimon@otterbourg.com
DELTA APPAREL: VP, 2 Board Members Resign
-----------------------------------------
Delta Apparel, Inc. disclosed in a Form 8-K Report filed with the
U.S. Securities and Exchange Commission that Nancy P. Bubanich
notified the Company of her decision to resign from her position as
Vice President, Chief Accounting Officer, and Treasurer. Ms.
Bubanich's resignation was effective on July 26, 2024.
On June 28, 2024, Glenda E. Hood also submitted her resignation
from service on the Company's Board of Directors and all
subcommittees of the Board, effective as of June 30, 2024.
On June 29, 2024, Sonya E. Medina resigned from service on the
Board and all subcommittees of the Board effective immediately.
About Delta Apparel
Headquartered in Duluth, Georgia, Delta Apparel, Inc. is a
vertically integrated, international apparel company with
approximately 6,800 employees worldwide. The Company designs,
manufactures, sources, and markets a diverse portfolio of core
activewear and lifestyle apparel products under its primary brands
of Salt Life, Soffe, and Delta. The Company specializes in selling
casual and athletic products through a variety of distribution
channels and tiers, including outdoor and sporting goods retailers,
independent and specialty stores, better department stores and
mid-tier retailers, mass merchants, eRetailers, the U.S. military,
and through its business-to business digital platform.
Delta Apparel Inc. and six affiliates filed for Chapter 11
protection in Wilmington, Del., on June 30, 2024, with a deal in
hand to sell its Salt Life brand. The lead case is In re Salt Life
Beverage, LLC (Bankr. D. Del. Lead Case No. 24-11468). The Hon.
Judge Laurie Selber Silverstein presides over the cases. Lawyers
at Polsinelli PC serve as counsel to the Debtors. Tim Pruban at
Focus Management Group is serving as the Debtors' chief
restructuring officer. MMG Advisors, Inc., serves as investment
banker. Epiq is the claims and noticing agent and administrative
advisor. Delta Apparel's assets as of June 1, 2024, total
$337,801,000 and debts total $244,564,000. The petitions were
signed by Mr. Pruban.
Counsel for Wells Fargo, the DIP Agent:
Daniel F. Fiorillo, Esq.
Chad B. Simon, Esq.
Otterbourg P.C.
230 Park Avenue
New York, NY 10169-0075
Fax: (212) 682-6104
Email: dfiorillo@otterbourg.com
csimon@otterbourg.com
DPL INC: Fitch Affirms 'BB' LongTerm IDR, Outlook Stable
--------------------------------------------------------
Fitch Ratings has affirmed AES Corporation's (AES) Long-Term Issuer
Default Rating (LT IDR) at 'BBB-'. Fitch has also affirmed the LT
IDRs for IPALCO Enterprises, Inc.'s (IPALCO) at 'BBB-', for
Indianapolis Power & Light Company (IPL) at 'BBB+', for DPL Inc.
(DPL) at 'BB' and for Dayton Power and Light Company (DP&L) at
'BBB-'. The Rating Outlooks are Stable for all entities.
AES's ratings and Outlook are supported by its large and
diversified portfolio, long-term contracted and regulated earnings
and cash flow. The affirmation of AES's U.S. utilities
subsidiaries' ratings is based on Fitch's expectation of the
continuation of supportive regulatory decisions and balance sheet
support from AES.
KEY RATING DRIVERS
AES Corporation
Contracted and Diversified Portfolio: AES invests in regulated
utilities and power-generating assets with long-and short-term
contracts. A majority of pre-tax contributions (PTC) are from
projects under long-term contracts or utility investments. The
average remaining contract life is 13-14 years, including
utilities. AES's diversified asset portfolio mitigates geopolitical
adversity affecting a single power market or project. Fitch views
increasing presence in the U.S. as credit positive.
U.S. assets represented 45% of total PTC at YE2023, compared with
approximately 30% in 2022. Fitch expects U.S. PTC to rise to over
60% by YE2025, as about 85% of AES's investment is expected to be
in the U.S.
Protection from Macro Headwinds: Projects have reasonable
protection against inflation, rising interest rates and
geopolitical risks. Approximately 83% of AES's revenue is protected
by inflation indexation or hedges, and the remainder is from
renewables with no fuel costs and known cost structure.
Approximately 73% of the interest rates are fixed or hedged.
Additionally, approximately 90% of the PTC is U.S. dollar
denominated.
Improving Fuel Mix: AES's portfolio has shifted meaningfully to
renewables over the last few years, a credit positive. At YE2023,
generation output comprised 37% renewables, 32% natural gas and 31%
coal. AES intends to exit coal in the next several years. Of its
backlog, 95% is in renewables and energy storage. AES estimates
that renewables and natural gas will represent 52% and 33%,
respectively, of total generation by 2025.
Robust Backlog: Given the strong demand for renewable generation,
AES has a robust 12.7GW backlog concentrated in renewables and
secured by power purchase agreements as of May 2024.There are
construction risks associated with new project development.
However, in Fitch's view, renewable projects are not politically
controversial, technologically complex or labor intensive.
Solid Credit Metrics: Fitch calculates AES's holdco-only FFO
leverage for 2022 and 2023 as close to 4.0x. This is higher than
previous years but still supportive of the ratings. The increase
was primarily due to upfront recourse holdco financing to fund new
renewable projects. Fitch expects AES's holdco-only FFO leverage to
be in the range of 3.6x-4.2x in 2024-2026 while new projects come
online. Fitch applies a deconsolidated approach when calculating
AES's credit metrics, as it finances its operation using primarily
non-recourse debt.
AES has a large capital program to execute, about $7.3 billion-$7.6
billion in 2024-2027. Fitch expects the company to fund its growth
plan in a credit-supportive manner, with net proceeds from asset
sales of about $2.4 billion-$2.9 billion and additional holdco debt
of about $1.1 billion-$1.6 billion in 2024-2027.
Parent and Subsidiary Linkage: Fitch does not apply parent
subsidiary linkage between AES and its investments, including
IPALCO and DPL. Fitch considers AES a financial investor and view
its investments as nonrecourse.
IPALCO and IPL
Fully Regulated Business: IPALCO's rating reflects its low business
risk profile as a utility holding company of a regulated electric
utility-IPL (d/b/a AES Indiana). AES Indiana is a fully regulated,
vertically-integrated electric utility operating in Indianapolis
and other communities of Central Indiana. AES Indiana's revenue
represents 100% of IPALCO's consolidated revenue.
Constructive Regulatory Environment: IPALCO's ratings continue to
benefit from the favorable regulatory environment in Indiana under
the Indiana Utility Regulatory Commission (IURC). On April 17,
2024, the IURC approved AES Indiana's rate case settlement of a $71
million increase in revenue requirement without imposing any
modification.
The new rates became effective in May 2024 and include an
authorized ROE of 9.90% and equity capitalization of 44.7%. In
addition, regulatory pass-through of fuel and purchased power costs
remains unchanged, which mitigates exposure to commodity risk.
Additionally, recovery riders are in place for environmental
upgrades, energy-efficiency programs, transmission and other costs
to reduce regulatory lag.
Accelerated Coal Retirement Plans: IPALCO has exposure to coal
generation through AES Indiana, whose generation capacity continues
to be coal-intensive, albeit improving. In 2023, 31% of the
retailed energy was generated from coal-fired steam generation, 58%
from natural gas-fired units, and 11% from power purchase
agreements (primarily from renewables) and from the wholesale power
market. Post the retirement of one of its coal plants in June 2023,
AES Indiana has two remaining coal units.
On March 11, 2024, AES Indiana filed for approval seeking IURC
approval to repower the remaining two coal units, Petersburg
generation units 3 and 4, from coal to natural gas and to recover
costs through future rates.
The conversion of Unit 3 is expected to begin in February 2026 and
be completed by June 2026 and the conversion of Unit 4 is expected
to begin in June 2026 and be completed by December 2026. A hearing
for this case is expected to be held in Q32024, and Fitch expects a
constructive outcome from the IURC on this matter by Q42024. Upon
completion of the repower of Petersburg generation units 3 and 4 by
the end of 2026, AES Indiana's generation mix will be coal-free.
Elevated Capex: IPALCO has a large capital program to execute over
2024-2026, with capital spending about 3x of the depreciation
expense driven by AES Indiana. Fitch expects IPALCO and AES Indiana
to prudently fund this large capital program through a mix of
internal cash flows, debt issuances and equity support from the
corporate parent to maintain AES Indiana's regulatory capital
structure and maintain IPALCO's credit metrics within its
sensitivity thresholds.
Leverage Metrics Temporarily Higher: IPALCO's year-end 2023 FFO
leverage was 7.1x, higher than Fitch's expectation. The
underperformance was mainly related to unusual mild weather and a
larger than expected capex plan. For the 2024-2025 period, Fitch
forecasts IPALCO's FFO leverage average at about 6.2x.
This is higher than Fitch's previous estimates due to an increase
in planned capex and delays in completing new renewable projects.
Fitch projects the sizeable capex would also push credit metrics
modestly over the respective sensitivity thresholds in 2024.
However, with the implementation of a new base rate in May 2024,
equity infusion by AES and gradual recovery of capital costs,
credit metrics are expected to return within their respective
rating thresholds in 2025 and beyond. For AES Indiana, Fitch
forecasts FFO leverage in the range of about 4.2x-5.0x in
2024-2026.
Parent and Subsidiary Linkage: There is a parent subsidiary linkage
between AES Indiana and IPALCO. Fitch determines IPALCO's
Standalone Credit Profile (SCP) based upon consolidated metrics.
Fitch considers AES Indiana's SCP to be stronger.
As such, Fitch followed the weaker parent-stronger subsidiary path.
Legal ring fencing for AES Indiana is considered porous given the
general protections afforded by its regulatory capital structure
and other restrictions. Access and control are porous. AES Indiana
is wholly owned by IPALCO but it issues its own short-term and
long-term debt, and does not guarantee the debt obligations at
IPALCO. Due to the aforementioned considerations, Fitch generally
limits the Issuer Default Rating notching difference to two.
DPL and DP&L
ESP4 Approval Credit Supportive: On Aug. 9, 2023, the Public
Utilities Commission of Ohio (PUCO) issued an order approving the
three-year electric security plan (ESP4). The settlement agreement
was reached in 2023 between DP&L (d/b/a AES Ohio) and various
intervening parties, including the PUCO staff.
ESP4 provides for the implementation of a distribution investment
rider (DIR) to recover distribution investments between rate cases
during the ESP term. In addition, it provides for the recovery of
$66 million related to past expenditures by AES Ohio, plus future
carrying costs and the recovery of incremental vegetation
management expenses up to certain annual limits during the term of
the ESP.
Fitch views the approval of ESP4 as credit supportive.
Historically, AES Ohio's financial performance has been hampered
due to regulatory lag. With the implementation of DIR, it should
meaningfully reduce regulatory lag. With more than 90% of AES
Ohio's planned $1.3 billion in investments over the next three
years expected to be recovered through riders or formula rates,
Fitch expects DPL and AES Ohio's financial performance to also
improve.
2022 Rate Order: In December 2022 PUCO issued the last AES Ohio
rate order. AES Ohio was allowed a $75.6 million base-rate increase
on a 10% ROE and 53.87% equity layer. The rate increase was
approximately 62% of what was requested, and higher than the staff
recommendation in 2021. ROE and equity ratio are above industry
average. The order primarily addressed the recovery of distribution
investments since September 2015 and investments necessitated by
the tornados in May 2019.
The rates went into effect on Sept. 1, 2023 with the approval of
ESP4.The rate freeze was based on a precedent set in 2009 that
there shall be no rate increase when ESP1 is in effect.
Credit Metrics Remains High in 2024, to Improve in 2025: In 2023,
DPL's FFO leverage was high at about 13.8x primarily due to rate
freeze, base distribution and transmission capex that was
materially higher than in previous years and the partial
contribution from ESP4 and new base rates that took effect in
September 2023. In addition, AES Ohio lost the rate stabilization
charge of about $70 million-$75 million under ESP1. Furthermore,
DPL is executing an elevated capex plan that is about 4x that of
the depreciation expense. Collectively, Fitch expects DPL's FFO
leverage to remain weak in 2024 before improving in 2025.
AES Ohio's rate-base growth has been low compared with peers. Fitch
views rate base-accretive capex favorably. However, it will
pressure credit metrics temporarily. Capex is also supported by
equity infusions from AES. DPL received $260 million from AES in
2023, which was infused in AES Ohio to fund its capex program.
Fitch expects AES would continue to support high capex to maintain
regulatory capital structure at AES Ohio.
By 2025, Fitch expects DPL's FFO leverage to improve to about 8.6x
and further improve to about 6.3x by 2026 due to the cumulative
effects of recovery from smart grid and DIR, new distribution rates
and Federal Energy Regulatory Commission investments. Fitch
forecasts AES Ohio's FFO leverage at about 6.8x in 2024 and then
average at about 5.3x in 2025-2026.
Low Business Risk: DPL is a nearly 100% regulated electric
transmission and distribution (T&D) utility holding company. The
only generation exposure for AES Ohio is its 4.9% equity interest
in Ohio Valley Electric Corporation (OVEC; BBB-/Stable), a
wholesale power generator. AES Ohio can defer, recover or credit
the net of proceeds from selling energy and capacity received as
part of its investment in OVEC and its OVEC related costs,
effectively eliminating the risk associated with the power-price
fluctuation from the OVEC ownership.
Parent and Subsidiary Linkage: There is a parent subsidiary linkage
between AES Ohio and DPL. Fitch determines DPL's SCP based upon
consolidated metrics. Fitch considers AES Ohio's SCP to be
stronger. As such, Fitch has followed the weaker parent/stronger
subsidiary path.
As a regulated utility and holding company, legal ring fencing for
AES Ohio is considered porous given the general protections
afforded by the regulatory capital structure and other
restrictions. Access and control are porous. AES Ohio is fully
owned by DPL, but AES Ohio issues its own short-term and long-term
debt and it does not guarantee the debt at DPL. Due to these
considerations, Fitch generally limits the IDR notching difference
to two.
DERIVATION SUMMARY
AES is reasonably well positioned compared with Brookfield
Renewable Partners L.P. (BBB+/Stable), Innergex Renewable Energy
Inc. (BBB-/Negative) and NextEra Energy Partners LP (NEP;
BB+/Stable).
AES owns and operates approximately 34.9GW of renewable and thermal
generation assets, compared with Innergex's 4.2GW of renewables,
NEP's 4.8GW of renewables, and Brookfield's 23GW of renewables.
AES's operating scale and diversity partially compensate for its
less favorable asset mix and exposure in South America and
developing countries.
AES has a record of stable project distributions. Holdco-only FFO
leverage has been stable and commensurate for the current rating.
Over the next two years, Fitch projects AES's Holdco-only FFO
leverage to be stronger than NEP's, but weaker than Innergex and
Brookfield.
Unlike its peers, AES does not have a financial sponsor. However,
it has a record of conservative capital allocation. Brookfield
benefits from the sponsorship from Brookfield Corporation
(A-/Stable), which provides robust capital access and liquidity.
NEP benefits from its affiliation with NextEra Energy, Inc.
(A-/Stable), which is the largest renewable developer in the U.S.
Innergex's partnership with Hydro Quebec (AA-/Stable) is smaller
scale, but is expected to help Innergex grow in a more sustainable
manner.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer
AES Corporation:
- 3.6 GW of projects come online in 2024;
- No equity issuance in 2024-2025;
- Shareholder dividend growth of 2%-3%;
- Cash shortfall funded by short-term debt;
- Asset sales and investment into subsidiaries in-line with
company's guidance for 2024-2025.
IPALCO and AES Indiana:
- Implementation of new base rates in May 2024 and the seven-year
TDSIC plan approved in March 2020;
- Approximately $3.2 billion total capex from 2024 to 2026;
- Equity support in 2024 to 2026 from the corporate parents to
IPALCO flowing further to AES Indiana;
- Dividends paid in line with maintenance of the regulatory capital
structure at AES Indiana;
- Dividends paid in line with the net income for IPALCO.
DPL Inc. and AES Ohio:
- Distribution rates and the DIR implemented as approved;
- Capex in-line with company's guidance.
RATING SENSITIVITIES
AES
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Holdco-only FFO leverage ratio sustains at or below 3.5x.
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Cost overruns or delays of construction projects that result in
holdco-only FFO leverage sustaining above 4.5x;
- A change in corporate strategy to invest in more speculative,
noncontracted assets or a material decline in cash distributions
from contracted power-generation assets;
- Increase in shareholder distributions (dividends or share
buybacks) materially beyond Fitch's expectations.
IPALCO
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- IPALCO could be upgraded if FFO leverage is below 5.0x on a
sustained basis.
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Negative regulatory treatment or an aggressive upstream dividend
causing FFO leverage to rise above 6.0x on a sustained basis.
AES Indiana
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- If IPALCO is upgraded and if AES Indiana's FFO leverage sustains
below 3.7x, as Fitch intends to maintain a two-notch IDR
differential between IPALCO and AES Indiana.
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Negative regulatory development resulting in FFO leverage rising
above 4.7x on a sustained basis.
DPL
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade:
- Given the expected weak credit metrics in the next two years, an
upgrade is unlikely. Nevertheless, DPL can be upgraded if
consolidated FFO leverage sustains below 7.3x.
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade:
- FFO leverage above 8.3x on a sustained basis;
- Deteriorating regulatory constructor gets successful challenges
from stakeholders such as the Ohio Consumer Council over approved
future rate plans.
AES Ohio
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade:
- If DPL is upgraded and if AES Ohio's FFO leverage sustains below
5.3x, as Fitch intends to maintain a two-notch IDR differential
between DPL and AES Ohio.
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade:
- If AES Ohio's FFO leverage sustains above 6.3x;
- Signs of deterioration of regulatory construct or successful
challenges from intervenors against future rate orders;
- If DPL is downgraded, as Fitch intends to maintain a two-notch
IDR differential between DPL and AES Ohio.
LIQUIDITY AND DEBT STRUCTURE
Adequate Liquidity: AES has a $1.5 billion committed revolving
credit facility (RCF), maturing in September 2027. AES uses its RCF
mostly to bridge the timing difference between investments and
project distribution. AES's obligations under the RCF are
unsecured. As of March 31, 2024, the credit facility had about $732
million available. Debt maturities are manageable.
The next debt maturities are the $200 million term loan due in
September 2024 and $900 million in senior notes due in 2025. The
RCF contains one financial covenant, evaluated quarterly, requiring
AES to maintain a maximum recourse debt-to-adjusted operating cash
flow ratio of 5.75x, with which AES is compliant.
ISSUER PROFILE
The AES Corporation is a power generation developer and utilities
holding company. It owns and operates approximately 35 GW of power
generation assets and utilities in four continents and 13 countries
as of 2023. AES is headquartered in Arlington, Virginia.
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
----------- ------ -------- -----
IPALCO
Enterprises, Inc. LT IDR BBB- Affirmed BBB-
senior secured LT BBB Affirmed BBB
Indianapolis
Power & Light
Company LT IDR BBB+ Affirmed BBB+
senior secured LT A Affirmed A
senior secured ULT A Affirmed A
The AES
Corporation LT IDR BBB- Affirmed BBB-
ST IDR F3 Affirmed F3
senior
unsecured LT BBB- Affirmed BBB-
junior
subordinated LT BB Affirmed BB
senior
unsecured ST F3 Affirmed F3
The Dayton Power
& Light Company LT IDR BBB- Affirmed BBB-
senior secured LT BBB+ Affirmed BBB+
senior secured LT BBB+ Affirmed RR4 BBB+
DPL Inc. LT IDR BB Affirmed BB
senior
unsecured LT BB Affirmed RR4 BB
DPL Capital
Trust II
junior
subordinated LT BB- Affirmed RR5 BB-
DRIP MORE: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------
Debtor: Drip More LLC
66 Turnstone
Irvine, CA 92618
Chapter 11 Petition Date: July 5, 2024
Court: United States Bankruptcy Court
Central District of California
Case No.: 24-11703
Debtor's Counsel: Matthew D. Resnik, Esq.
RHM LAW LLP
17609 Ventura Blvd.
Ste 314
Encino, CA 91316
Tel: (818) 285-0100
Fax: (818) 855-7013
Email: matt@rhmfirm.com
Estimated Assets: $100,000 to $500,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Brian Bereber, 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/ZNM5VAI/Drip_More_LLC__cacbke-24-11703__0001.0.pdf?mcid=tGE4TAMA
EL DORADO: Trustee Taps Kelly Hart & Hallman as Co-Counsel
----------------------------------------------------------
Dawn Ragan, the Trustee of El Dorado Gas & Oil, Inc. and its
affiliate, seeks approval from the U.S. Bankruptcy Court for the
Southern District of Mississippi to employ Kelly Hart & Hallman LLP
as co-counsel for Bluestone Natural Resources II - South Texas, LLC
and World Aircraft, Inc.
The firm will render these services:
a. advising with respect to the continued operation and
management of the Debtors' business and property;
b. investigation the nature and validity of claims and liens
asserted against the property of Debtors, and representing the
Debtors in any litigation on behalf of the estate, concerning the
estate and property of the estate;
c. assisting the Debtors in reporting to this Court, creditors
and the U.S. Trustee regarding the business and operations Debtors'
estates;
d. working all necessary applications, motions, answers,
proposed orders, other pleadings, notices, schedules and other
documents, and reviewing all financial and other reports to filed;
e. advising with respect to the Debtor rights and obligations
regarding matters of bankruptcy law and other applicable statutory,
common law and regulatory schemes;
f. taking all necessary actions to protect and preserve the
estates;
g. performing all other legal services; and
h. any other matter that may arise in connection with the
Debtors' reorganization proceedings ot their business operations,
but not tax or securities matters unless specifically requested and
agreed in writing.
The firm will be paid at these rates:
Senior Partner $800 per hour
Junior Associate $300 per hour
Kelly Hart provides the following responses to the questions set
forth in Part D of the Appendix B of the Revised UST Guidelines:
-- There were pre-petition voluntary reductions and discounts
provided in connection with certain services;
-- No Kelly Hart professional included in the engagement has
varied his rate based on the geographic location of the bankruptcy
case;
-- Kelly Hart has not represented the Debtors in the 12 months
prepetition; and
-- Kelly Hart anticipates developing a proposed budget and
staffing plan to reasonably comply with the U.S. Trustee's request
for information and additional disclosures, as to which Kelly Hart
reserves all rights.
Katherine Hopkins, Esq., a partner at Kelly Hart & Hallman,
disclosed in a court filing that his firm is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
The firm can be reached at:
Katherine T. Hopkins, Esq.
Kelly Hart & Hallman, LLP
201 Main Street, Suite 2500
Fort Worth, TX 76102
Tel: (817) 878-9377
Fax: (817) 878-9280
Email: katherine.hopkins@kellyhart.com
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.
EMERGENT BIOSOLUTIONS: Awarded $250M+ in Contract Modifications
---------------------------------------------------------------
Emergent BioSolutions Inc. announced July 2, 2024, it has received
more than $250 million in contract modifications from the
Administration for Strategic Preparedness and Response (ASPR) at
the United States Department of Health and Human Services (HHS), to
deliver millions of doses of four medical countermeasures (MCMs).
These contract modifications will help ensure continued
supply/stockpiling of critical MCMs to address biological threats
and emergencies against anthrax, smallpox and botulism.
The four awards include:
* A contract modification valued at $30.0 million to supply
CYFENDUS (Anthrax Vaccine Adsorbed, Adjuvanted) this year.
Previously known as AV7909, CYFENDUS is a two-dose anthrax
vaccine for post-exposure prophylaxis use in individuals 18
years of age and older. This new procurement funding is from
Emergent's existing 10-year contract with the Biomedical
Advanced Research and Development Authority (BARDA) under
contract (HHSO100201600030C).
* A contract modification valued at $99.9 million to supply
ACAM2000 (Smallpox (Vaccinia) Vaccine, Live) this year.
ACAM2000 is licensed for active immunization against smallpox
disease for persons determined to be at high risk for smallpox
infection. This is under Emergent's existing 10-year contract
with ASPR (75A50119C00071).
* Two new contract options totaling $122.9 million have been
awarded to supply the Strategic National Stockpile with VIGIV
[Vaccinia Immune Globulin Intravenous (Human)] drug product,
and BAT [Botulism Antitoxin Heptavalent (A, B, C, D, E, F, G)
- (Equine)] drug substance and delivery of drug production
this year and into early 2025. VIGIV is used for treatment
of
complications to smallpox vaccination, while BAT is
indicated
for the treatment of symptomatic botulism following
documented
or suspected exposure to botulinum neurotoxin serotypes A, B,
C, D, E, F, or G in adults and pediatric patients. Both are
under Emergent's existing 10-year contracts with ASPR
(75A50119C00037 and 75A50119C00075, respectively).
"Securing multiple contract modifications with the U.S. government
for our medical countermeasure products affirms that Emergent is a
trusted biodefense partner, and also demonstrates the strength and
sustainment of our product portfolio," said Paul Williams, senior
vice president, products head at Emergent. "As part of our
longstanding public-private partnership, we stand ready to continue
fulfilling preparedness priorities and stockpiling efforts in the
U.S. and abroad."
About Emergent Biosolutions
Headquartered in Gaithersburg, Md., Emergent Biosolutions Inc. is a
global life sciences company focused on providing innovative
preparedness and response solutions addressing accidental,
deliberate and naturally occurring public health threat. The
Company's solutions include a product portfolio, a product
development portfolio, and a contract development and manufacturing
("CDMO") services portfolio.
Tysons, Virginia-based Ernst & Young LLP, the Company's auditor
since 2004, issued a "going concern" qualification in its report
dated March 8, 2024, citing that the Company does not expect to be
in compliance with debt covenants in future periods without
additional sources of liquidity or future amendments to its Senior
Secured Credit Facilities and has stated that substantial doubt
exists about the Company's ability to continue as a going concern.
EPIC CRUDE: Moody's Affirms 'B3' CFR & Alters Outlook to Positive
-----------------------------------------------------------------
Moody's Ratings affirmed EPIC Crude Services, LP's Corporate Family
Rating at B3, Probability of Default Rating at B3-PD and revised
the outlook to positive from stable. Concurrently, Moody's affirmed
EPIC Crude's backed senior secured super priority revolving credit
facility rating at Ba3 and its backed senior secured 1st lien term
loan B rating at B3.
"The positive outlook reflects the expected reduction in leverage
supported by higher EBITDA and the company's plan to reduce debt or
fund accretive growth projects using excess cash flows," commented
Giancarlo Rubio, a Moody's Ratings senior analyst.
RATINGS RATIONALE
EPIC Crude's positive outlook reflects projected lower leverage
driven by higher EBITDA and expected usage of excess cash flow to
reduce debt or fund accretive growth projects. The B3 CFR
incorporates the company's small scale and exposure to volume risk.
Demand for crude transportation depends on multiple factors such as
production volumes in the Permian, increased transportation
capacity from alternative pipelines and potential development of
competing export facilities on the US Gulf of Mexico.
The company's EBITDA is expected to grow driven by increased
customer production volumes, with the pipeline running near full
capacity since May 2024, and by higher transportation rates given
escalation clauses or signing of new contracts. The company expects
to use excess cash flow to reduce debt consistent with its
partners' goals. Therefore, Moody's expect no distributions to be
made through 2025.
Corpus Christi is the largest crude exporting port in the US and
the closest offshore outlet for Permian crude. The continued
increase in oil production in the Permian basin has boosted demand
for transportation to this port. Crude oil currently trades at a
premium in Corpus Christi compared to Houston, given quality
specifications, transportation fees and shippers preference. Market
dynamics are not expected to change in the near to medium term
considering the Permian is one of the most economic oil producing
regions in the US, the competitive economics of the port and,
material lead time to develop alternative infrastructure projects.
Moody's expect EPIC Crude to maintain adequate liquidity through
2025, supported by cash on the balance sheet and positive free cash
flow generation. EPIC Crude has a $50 million revolver due March
2026. If any amounts on the revolver are repaid, the company can
only redraw up to two times in amounts up to $10 million until May
2025. The revolver and term loans have minimum debt service
coverage ratio covenants of 1.1x. The revolver also has a maximum
super-priority leverage ratio covenant of 1x. Moody's expect the
company to maintain compliance with these covenants through 2025.
The company's senior secured Term Loan B is due in March 2026.
Moody's expect the company to refinance its capital structure well
in advance of maturity.
The super-priority position of EPIC Crude's senior secured revolver
due 2026 and its small size relative to the term loans result in
the facility being rated Ba3. EPIC Crude's senior secured Term Loan
B due 2026 is rated B3. The company's senior secured Term Loan C
due 2026 (unrated) ranks pari passu with the Term Loan B. The term
loans comprise the preponderance of debt, resulting in the Term
Loan B being rated B3, the same as the CFR.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Factors that could lead to an upgrade include debt/EBITDA sustained
below 5.5x, increased interest coverage, additional contracted
volumes and consistent positive free cash flow generation.
Factors that could lead to a downgrade include weaker than
anticipated financial performance, EBITDA/interest remaining below
1.5x, negative free cash flow or weakening liquidity.
EPIC Crude Services, LP (a subsidiary of EPIC Crude Holdings, LP),
based in Texas, is a privately owned midstream energy business with
oil pipelines running from the Permian and Eagle Ford Basins to
Corpus Christi, Texas. EPIC Crude is owned by affiliates of Ares
Management Corporation; Noble Midstream Partners LP, which is owned
by Chevron Corporation (Aa2 stable); Kinetik Holdings Inc., which
owns Kinetik Holdings LP (Ba1 stable); and Rattler Midstream LP,
which is owned by Diamondback Energy, Inc. (Baa2 stable).
The principal methodology used in these ratings was Midstream
Energy published in February 2022.
EXELA TECHNOLOGIES: Board OKs Plans to Spin-Off BPA Business
------------------------------------------------------------
Exela Technologies, Inc. announced July 1, 2024, that its Board of
Directors has authorized Exela to consider a spin-off of its
wholly-owned subsidiary, Exela Technologies BPA, LLC, to Exela
stockholders to maximize shareholder value.
The potential spin-off, if completed, would likely be structured so
that all Exela stockholders as of a record date in the third or
fourth quarter of 2024, to be determined by the Board, would (i)
receive their pro-rata share of a newly formed holding company
owning Exela's business process automation business and (ii)
continue to own Exela, as currently constituted, including its
greater than 70% ownership in Nasdaq-listed XBP Europe Holdings,
Inc. (held through subsidiaries remaining with Exela) and the North
American onsite services business, but without the BPA Business.
No action or payment will be required by Exela stockholders to
receive shares of the BPA Business or any cash in lieu of
fractional shares that would be paid in connection with the spin
off. A registration statement containing details regarding the
distribution of the shares of the BPA Business, the management
following the spin-off, and other information regarding the
spin-off will be made available to Exela stockholders prior to any
distribution date. The closing of any distribution will be subject
to customary conditions that will be set forth in the registration
statement to be filed by the BPA Business, including final approval
of the Board and effectiveness of the registration statement.
Exela is evaluating whether, for U.S. federal income tax purposes,
the potential spin-off qualifies as a tax-free distribution under
Section 355(a) of the Internal Revenue Code. If a potential spin
off is consummated, Exela stockholders are urged to consult with
their tax advisors with respect to the U.S. federal, state, and
local or foreign tax consequences, as applicable, of the potential
spin-off.
Loeb & Loeb LLP is serving as legal counsel to Exela on the
potential spin-off.
About Exela Technologies
Headquartered in Irving, Texas, Exela Technologies, Inc. --
www.exelatech.com -- is a business process automation (BPA)
company, leveraging a global footprint and proprietary technology
to provide digital transformation solutions enhancing quality,
productivity, and end-user experience. With decades of experience
operating mission-critical processes, Exela serves a growing roster
of more than 4,000 customers throughout 50 countries, including
over 60% of the Fortune 100. Utilizing foundational technologies
spanning information management, workflow automation, and
integrated communications, Exela's software and services include
multi-industry, departmental solution suites addressing finance and
accounting, human capital management, and legal management, as well
as industry- specific solutions for banking, healthcare, insurance,
and the public sector. Through cloud-enabled platforms, built on a
configurable stack of automation modules, and approximately 13,600
employees operating in 20 countries, Exela rapidly deploys
integrated technology and operations as an end-to-end digital
journey partner.
Iselin, New Jersey-based EisnerAmper LLP, the Company's auditor
since 2023, issued a "going concern" qualification in its report
dated April 3, 2024, citing that the Company has experienced
recurring losses, has a working capital deficit and stockholders'
deficit and significant future required cash payments for interest
under its long-term debt obligations that raise substantial doubt
about its ability to continue as a going concern.
* * *
As reported by the TCR on Aug. 24, 2023, S&P Global Ratings raised
its issuer credit rating on Exela Technologies Inc. to 'CCC' from
'SD' (selective default). S&P said, "Despite improving revenue
trends and cost savings, we forecast limited liquidity cushion in
January and July of 2024."
EXELA TECHNOLOGIES: To Spin Off BPA Business
--------------------------------------------
Exela Technologies, Inc. announced on July 1, 2024 that its Board
of Directors has authorized the Company to consider a spin-off of
its wholly-owned subsidiary, Exela Technologies BPA, LLC, to Exela
stockholders to maximize shareholder value.
The potential spin-off, if completed, would likely be structured so
that all Exela stockholders as of a record date in the third or
fourth quarter of 2024, to be determined by the Board, would:
(i) receive their pro-rata share of a newly formed holding
company owning Exela's business process automation business and
(ii) continue to own Exela, as currently constituted, including
its greater than 70% ownership in Nasdaq-listed XBP Europe
Holdings, Inc. (held through subsidiaries remaining with Exela) and
the North American onsite services business, but without the BPA
Business.
No action or payment will be required by Exela stockholders to
receive shares of the BPA Business or any cash in lieu of
fractional shares that would be paid in connection with the spin
off. A registration statement containing details regarding the
distribution of the shares of the BPA Business, the management
following the spin-off, and other information regarding the
spin-off will be made available to Exela stockholders prior to any
distribution date. The closing of any distribution will be subject
to customary conditions that will be set forth in the registration
statement to be filed by the BPA Business, including final approval
of the Board and effectiveness of the registration statement.
Exela is evaluating whether, for U.S. federal income tax purposes,
the potential spin-off qualifies as a tax-free distribution under
Section 355(a) of the Internal Revenue Code. If a potential spin
off is consummated, Exela stockholders are urged to consult with
their tax advisors with respect to the U.S. federal, state, and
local or foreign tax consequences, as applicable, of the potential
spin-off.
Loeb & Loeb LLP is serving as legal counsel to Exela on the
potential spin-off.
About Exela Technologies
Headquartered in Irving, Texas, Exela Technologies, Inc. --
www.exelatech.com -- is a global provider of transaction processing
solutions, enterprise information management, document management
and digital business process services. The Company's
technology-enabled solutions allow global organizations to address
critical challenges resulting from the massive amounts of data
obtained and created through their daily operations. Its solutions
address the life cycle of transaction processing and enterprise
information management, from enabling payment gateways and data
exchanges across multiple systems, to matching inputs against
contracts and handling exceptions, to ultimately depositing
payments and distributing communications.
Iselin, New Jersey-based EisnerAmper LLP, the Company's auditor
since 2023, issued a "going concern" qualification in its report
dated April 3, 2024, citing that the Company has experienced
recurring losses, has a working capital deficit and stockholders'
deficit and significant future required cash payments for interest
under its long-term debt obligations that raise substantial doubt
about its ability to continue as a going concern.
* * *
As reported by the TCR on Aug. 24, 2023, S&P Global Ratings raised
its issuer credit rating on Exela Technologies Inc. to 'CCC' from
'SD' (selective default). S&P said, "Despite improving revenue
trends and cost savings, we forecast limited liquidity cushion in
January and July of 2024."
FINANCE OF AMERICA: Moody's Affirms 'Caa2' CFR, Outlook Negative
----------------------------------------------------------------
Moody's Ratings has affirmed Finance of America Funding LLC's (FOA)
corporate family rating at Caa2 and its senior unsecured debt
rating at Caa3. FOA's outlook remains negative.
On June 25, FOA announced an agreement with certain holders of its
$350 million of senior unsecured notes that mature in November 2025
(2025 notes) to support and participate in an exchange offer for 1)
up to $200 million senior secured first lien notes due in November
2026 with a company option to extend to November 2027, and 2) up to
$150 million exchangeable senior secured first lien notes due in
November 2029.
As of June 25, holders representing 93% of the aggregate
outstanding principal amount of the 2025 notes have indicated their
intension to participate in the exchange offer. FOA plans to
consummate the exchange on or before September 30, 2024, contingent
on its ability to release collateral that will be used to secure
the first lien claims of the two new notes.
Upon the closing of the exchange, Moody's will likely view the
exchange to be a distressed exchange and a default.
RATINGS RATIONALE
The affirmation of FOA's Caa2 CFR reflects the company's very high
leverage combined with continued weak profitability. Tangible
common equity excluding deferred tax assets was just 0.04% of
tangible managed assets (excluding loans eligible for repurchase
and home equity conversion mortgages) as of March 31, 2024. In the
first quarter, FOA again reported an annualized loss to average
assets of -0.22% following a loss to average assets of -0.62% in
2023 and -3.29% in 2022. The loss was driven by low origination
volumes due to elevated interest rates as well as negative fair
value marks on the company's loans and residual interests in its
proprietary securitizations, which decline when interest rates
rise.
The company's plan to refinance its 2025 notes through the exchange
offer, if completed, is a modest credit positive as it extends the
maturity of the company's current unsecured debt. Nonetheless, the
company's liquidity position remains challenged due to its weak
profitability and high leverage, as well as its exposure to non-US
government agency and non-government-insured loans, which are less
liquid during periods of market stress than US government agency
and government-insured mortgages. Moreover, a high percentage of
the company's assets are encumbered, reducing the company's ability
to access alternative funding sources.
FOA's Caa3 senior unsecured rating is one notch below its Caa2 CFR,
based on the application of Moody's Loss Given Default for
Speculative-Grade Companies methodology and model. The Caa3 rating
considers priority of claim and strength of asset coverage,
including that the unsecured debt is subordinate to FOA's senior
secured revolving credit facilities.
The negative outlook reflects Moody's expectation that the
company's profitability will remain weak over the next 12-18
months, making it difficult for the company to strengthen its
capital position. The negative outlook also reflects the
uncertainty around the consummation of the exchange offer.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Given the negative outlook, it is unlikely that an upgrade of the
ratings will occur over the next 12-18 months. FOA's outlook could
return to stable from negative if the company achieves tangible
common equity to adjusted tangible assets above 2.5% and
demonstrates sustained positive core profitability (i.e. excluding
fair value marks).
The CFR and unsecured bond rating could be downgraded if the
company continues to report sizeable losses or if the company's
liquidity deteriorates further. In addition, the ratings could be
downgraded if the company does not successfully refinance its
senior unsecured debt by the target date of the exchange.
The principal methodology used in these ratings was Finance
Companies Methodology published in November 2019.
FOOBAR LLC: Unsecureds to Split $22K via Quarterly Payments
-----------------------------------------------------------
Foobar, LLC, submitted an Amended Subchapter V Plan of
Reorganization dated June 20, 2024.
On June 18, 2024, the Debtor filed an original version of this Plan
of Reorganization, and on June 20, 2024, the Court entered an Order
Granting Debtor's Ex Parte Motion Re: Fixing of Deadlines and
Procedures in Subchapter V Case Related to Proposed Chapter 11 Plan
(the "Procedures Order").
This is an amendment to the original plan, which modifies certain
payments to creditors. The Procedures Order approved certain
procedures related thereto, including the scheduling of a
confirmation hearing on the Plan and various other deadlines in
relation thereto, including the setting of a deadline to file
objections to confirmation of the Plan, and any evidence or
declarations in support of the same, the deadline for all eligible
creditors to vote on the Plan, and the deadline for the Debtor to
respond to any objections to confirmation of the Plan and to file a
ballot summary certifying the votes on the Plan.
The Debtor's financial projections show that it will have projected
disposable income of $21,848 over the next 3 years. The final Plan
payment is expected to be paid by July 2027.
This Plan of Reorganization under chapter 11 of the Code proposes
to pay creditors of the Debtor from cash flow from future
operations as needed.
Non-priority unsecured creditors holding Allowed claims will
receive distributions, which the Debtor has valued at approximately
$0.10 on the dollar (based on the $22,000 in total distributions to
this Class, divided by an estimated $221,000 in projected claims in
this Class). This estimated distribution may increase or decrease
depending on the final allowed amount of the general unsecured
claims, and any motions to value secured creditors' collateral
pursuant to Section 506 of the Bankruptcy Code, which may result in
additional unsecured claims being added to the total amount of
projected claims, thus decreasing the pro rata percentage of
distribution. This Plan also provides for the payment of
administrative and priority claims.
Class 9 consists of Non-Priority General Unsecured Claims. Each
holder of an Allowed general unsecured, non-priority claim in Class
9 shall receive its pro rata share of the aggregate sum of $22,000,
or such greater amount as the Court may require at the confirmation
hearing on the Plan and as consistent with Sections 1190 and 1191
of the Code, which aggregate sum shall be paid in equal quarterly
disbursements of $1,833 per quarter, and commencing on the 15th day
of the 3rd month following the Effective Date, and continuing each
and every calendar quarter thereafter until the aggregate sum
($22,000) is paid in full. Class 9 is impaired.
Except to the extent that the Holders of Class 10 Equity Interests
agree to less favorable treatment, they shall retain their Equity
Interests, subject to the terms and conditions of this Plan. Class
10 is unimpaired and thus is deemed to accept the Plan.
This Plan will be funded through cash on hand as of the Plan's
Effective Date, and cash flow generated from the future operations
of the Debtor's business. Additionally, and only to the extent
necessary, in the event of any shortfalls, the Debtor's owners will
infuse monies to cover any shortfall.
A full-text copy of the Amended Subchapter V Plan dated June 20,
2024 is available at https://urlcurt.com/u?l=a1FJdO from
PacerMonitor.com at no charge.
Attorneys for the Debtor:
Matthew C. Zirzow, Esq.
Zachariah Larson, Esq.
Larson & Zirzow, LLC
850 E. Bonneville Ave.
Las Vegas, NE 89101
Telephone: (702) 382-1170
Facsimile: (702) 382-1169
Email: mzirzow@lzlawnv.com
zlarson@lzlawnv.com
About Foobar LLC
Foobar, LLC, is a small trucking company based in Pioche, Nevada.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Nev. Case No. 24-12012) on April 25,
2024, with $100,001 to $500,000 in assets and $500,001 to $1
million in liabilities.
Judge Mike K. Nakagawa presides over the case.
Matthew C. Zirzow, at Larson And Zirzow, LLC, is the Debtor's legal
counsel.
FRANCISCAN FRIARS: Seeks to Hire TransPerfect Legal as Consultant
-----------------------------------------------------------------
Franciscan Friars of California, Inc. seeks approval from the U.S.
Bankruptcy Court for the Northern District of California to employ
TransPerfect Document Management, Inc. dba TransPerfect Legal
Solutions as electronic discovery consultant.
The firm will provide the Debtor with electronic discovery
services. These include collection, storage, preparation, and
production of documents.
A summary of the applicable rates is as follows:
Phase I
Forensic Collection
Standard Forensic Acquisitions $315 per hour
Forensic Consulting & Analysis $375 each
Senior Forensic Consulting $595 per hour
Remote Collection Kit -- Domestic $85 each
Storage Media -- 1 TB $230 per set
Phase II
Data Processing
Pre-Review Analytics waived
Ingestion $10 GB
ECA Hosting -- Monthly $2 GB
Export for Review $75 GB
Phase III
Review
US-Based Review Attorney -- English $50 per hour
Off-Shore Review Attorney -- English $28 per hour
Review Manager -- English $85 per hour
Project Manager $125 per hour
Phase IV
Production & Hosting
Relativity Hosting -- Monthly $6 per hour
Relativity User License -- Monthly $75 per hour
Production $250 per hour
Technology-Assisted Review waived
Project Management $175 per hour
Senior Project Management $275 per hour
Consulting $450 per hour
Phase V
Depo Support
Court Reporter and Videographer Available upon request
David Brill, a director at TransPerfect, disclosed that
TransPerfect and the professionals that are providing services to
the Debtor are disinterested persons who do not hold or represent
an interest adverse to the Debtor's estate.
The firm can be reached through:
David Brill
TransPerfect Legal Solutions
1250 Broadway
New York, NY, 10001
Phone: (212) 689-5555
About Franciscan Friars of California
Franciscan Friars of California, Inc. is a tax-exempt religious
organization in Oakland, Calif. The Debtor was formed to provide
religious, charitable, and educational acts, ministry, and service
to the poor.
Franciscan Friars of California, Inc. filed its voluntary petition
for Chapter 11 protection (Bankr. N.D. Cal. Case No. 23-41723) on
December 31, 2023, listing $1 million to $10 million in assets and
$10 million to $50 million in liabilities. David Gaa, OFM,
president of the Debtor, signed the petition.
Judge William J. Lafferty oversees the case.
The Debtor tapped Binder Malter Harris & Rome-Banks LLP as
bankruptcy counsel; Hanson Bridgett LLP, Weintraub Tobin Chediak
Coleman Grodin Law Corporation, and Bledsoe, Diestel, Treppa &
Crane LLP as special counsel; and GlassRatner Advisory & Capital
Group LLC, doing business as B. Riley Advisory Services, as
financial advisor. Donlin, Recano & Company, Inc. is the Debtor's
administrative advisor.
The U.S. Trustee appointed an official committee of unsecured
creditors. The committee selected Lowenstein Sandler LLP and Keller
Benvenutti Kim LLP as counsel and Berkeley Research Group, LLC as
its financial advisor.
FTX TRADING: Seeks to Extend Plan Exclusivity to August 3
---------------------------------------------------------
Emergent Fidelity Technologies Ltd., a Debtor Affiliate of FTX
Trading Ltd., asked the U.S. Bankruptcy Court for the District of
Delaware to extend its exclusive periods to file a chapter 11 plan
and solicit acceptances thereof to August 3 and October 3, 2024,
respectively.
The Emergent Debtor is the owner and was the record holder of
approximately 55 million shares of Robinhood Markets, Inc. that
have now been converted to cash (the "Assets") and are being held
by the DOJ pending further adjudication regarding their ownership
and potential claims against them.
Multiple parties have made claims to the Assets, including (i) the
DOJ, for the benefit of SBF's victims; (ii) FTX, for the benefit of
its creditors; (iii) BlockFi, for the benefit of its creditors;
(iv) SBF himself; (v) FTX Digital Markets Ltd (in provisional
liquidation), a chapter 15 debtor; and (vi) Yonatan Ben Shimon, an
FTX customer who alleges that his deposits may have been
misappropriated by Alameda and used to purchase the Assets.
The Emergent Debtor explains that it continues to investigate,
secure, and recover assets for distribution; this will lead to a
necessary determination of whether reorganization or liquidation is
in the best interests of creditors. Notwithstanding the substantial
progress made to date, the Emergent Debtor continues to develop
information necessary to prepare a disclosure statement and to
consider and propose a chapter 11 plan.
The Emergent Debtor claims that it requires additional time to
continue to advance the core objectives laid out by the Joint
Liquidators on behalf of the Emergent Debtor and ensure that the
Assets are recovered for the benefit of its creditors.
The Emergent Debtor asserts that termination of the Exclusive
Periods would adversely impact its efforts to preserve and maximize
the value of its estate and would slow the progress of the
company's Case. Termination would disrupt the critical work that
has and continues to be done in the Emergent Chapter 11 Case and
would increase the costs of administering the case substantially
while providing no material benefits to the estate or its
creditors.
Emergent Fidelity Technologies Ltd., is represented by:
MORGAN, LEWIS & BOCKIUS LLP
Jody C. Barillare, Esq.
1201 N. Market Street, Suite 2201
Wilmington, DE 19801
Telephone: (302) 574-3000
Email: jody.barillare@morganlewis.com
- and -
John C. Goodchild, III, Esq.
Matthew C. Ziegler, Esq.
2222 Market Street
Philadelphia, PA 19103
Telephone: (215) 963-5000
Email: john.goodchild@morganlewis.com
Email: matthew.ziegler@morganlewis.com
- and -
Craig A. Wolfe, Esq.
Joshua Dorchak, Esq.
David K. Shim, Esq.
101 Park Avenue
New York, NY 10178
Telephone: (212) 309-6000
Email: craig.wolfe@morganlewis.com
Email: joshua.dorchak@morganlewis.com
Email: david.shim@morganlewis.com
About FTX
FTX is the world's second-largest cryptocurrency firm. FTX is a
cryptocurrency exchange built by traders, for traders. FTX offers
innovative products including industry-first derivatives, options,
volatility products and leveraged tokens.
Then CEO and co-founder Sam Bankman-Fried said Nov. 10, 2022, that
FTX paused customer withdrawals after it was hit with roughly $5
billion worth of withdrawal requests.
Faced with liquidity issues, FTX on Nov. 9 struck a deal to sell
itself to its giant rival Binance, but Binance walked away from the
deal amid reports on FTX regarding mishandled customer funds and
alleged US agency investigations.
At 4:30 a.m. on Nov. 11, Bankman-Fried ultimately agreed to step
aside, and restructuring vet John J. Ray III was quickly named new
CEO.
FTX Trading Ltd (doing business as FTX.com), West Realm Shires
Services Inc. (doing business as FTX US), Alameda Research Ltd. and
certain affiliated companies then commenced Chapter 11 proceedings
(Bankr. D. Del. Lead Case No. 22-11068) on an emergency basis on
Nov. 11, 2022. More entities sought Chapter 11 protection on Nov.
14, 2022.
FTX Trading and its affiliates each listed $10 billion to $50
million in assets and liabilities, making FTX the biggest
bankruptcy filer in the US this year. According to Reuters, SBF
shared a document with investors on Nov. 10 showing FTX had $13.86
billion in liabilities and $14.6 billion in assets. However, only
$900 million of those assets were liquid, leading to the cash
crunch that ended with the company filing for bankruptcy.
The Hon. John T. Dorsey is the case judge.
The Debtors tapped Sullivan & Cromwell, LLP as bankruptcy counsel;
Landis Rath & Cobb, LLP as local counsel; and Alvarez & Marsal
North America, LLC as financial advisor. Kroll is the claims agent,
maintaining the page https://cases.ra.kroll.com/FTX/HomeIndex
The official committee of unsecured creditors tapped Paul Hastings,
LLP as bankruptcy counsel; FTI Consulting, Inc. as financial
advisor; and Jefferies, LLC as the investment banker. Young
Conaway Stargatt & Taylor, LLP is the committee's Delaware and
conflicts counsel.
Montgomery McCracken Walker & Rhoads LLP, led by partners Gregory
T. Donilon, Edward L. Schnitzer, and David M. Banker, is
representing Sam Bankman-Fried in the Chapter 11 cases. White
collar crime specialist Mark S. Cohen has reportedly been hired to
represent SBF in litigation. Lawyers at Paul Weiss previously
represented SBF but later renounced representing the entrepreneur
due to a conflict of interest.
FTX TRADING: Updates FTT Claims & Interest Details; Amends Plan
---------------------------------------------------------------
FTX Trading Ltd., and its Affiliated Debtors submitted a Further
Revised Disclosure Statement and Further Revised Plan dated June
23, 2024.
These chapter 11 cases have given the Debtors the breathing room
necessary for new, experienced independent directors and management
to assemble the remnants of the Debtors and amass their assets to
repay customers and other stakeholders.
The Plan provides that substantially all remaining assets of the
Debtors will be held in a single "Consolidated Wind Down Trust."
The Consolidated Wind Down Trust will conduct business only as
appropriate for its business purpose: to liquidate its remaining
assets and fund cash distributions to creditors. The Consolidated
Wind Down Trust will hold all cash, all of the remaining assets and
shares in certain subsidiaries that will be wound down outside of
these chapter 11 cases under applicable law.
As of the date of this Disclosure Statement, the Debtors have
projected an estimated total value of Net Distributable Proceeds
between $14.7 and $16.5 billion. This estimate is composed of (1)
the Debtors' projected cash on hand as of October 31, 2024, the
projected effective date of the Plan (the "Assumed Effective
Date"), (2) proceeds to be monetized after the Assumed Effective
Date, and (3) the projected costs of the Wind Down Budget.
Class 17 consists of all FTT Claims and Interests. All Allowed FTT
Claims and Interests shall be cancelled or released, and the
Holders of Allowed FTT Claims and Interests shall not be entitled
to, and shall not receive or retain, any Distributions, property or
interest in property on account of such Interests under the Plan.
Claims in Class 17 are Impaired. Each Holder of an FTT Claim or
Interest is conclusively deemed to have rejected the Plan. No
Holder of an FTT Claim or Interest is entitled to vote to accept or
reject the Plan.
Like in the prior iteration of the Plan, each Holder of an Allowed
PropCo General Unsecured Claim shall receive payment in Cash in an
amount equal to such Holder's Pro Rata share of the proceeds from
the sale, disposition or other monetization of the Bahamas
Properties available to pay PropCo General Unsecured Claims, in
accordance with the waterfall priority.
Distributions under the Plan shall be funded from (a) Cash on hand,
(b) Available NFTs, (c) Wind Down Cash Proceeds, and (d) any other
Plan Assets, except as expressly set forth herein.
During the period from the Confirmation Date through and until the
Effective Date, the Debtors may continue to operate as debtors-in
possession, subject to all applicable orders of the Bankruptcy
Court.
Wind Down Entities
The purpose of the Wind Down Entities is to engage in business
after the Effective Date for so long as may be necessary to
monetize the Plan Assets and pay Distributions, in each case as
promptly as reasonably practicable. The Wind Down Entities shall
manage and hold Plan Assets for sale; sell Plan Assets; administer,
and close as necessary, the Chapter 11 Cases; administer,
reconcile, resolve and settle claims; and liquidate the Debtors and
their non-Debtor subsidiaries pursuant to the terms of the Plan
Supplement.
The Wind Down Entities are intended to qualify as "liquidating
trusts" for U.S. federal income tax purposes. The IRS, in Revenue
Procedure 94-45, 1994-2 C.B. 684, set forth the general criteria
for obtaining an IRS ruling as to the grantor trust status of a
liquidating trust under a chapter 11 plan. The Wind Down Entities
are intended to be structured to comply with such general criteria.
In conformity with Revenue Procedure 94-45, all parties (including,
without limitation, the Debtors, the Wind Down Entities, the Plan
Administrator, and Holders of Allowed Claims) shall treat, for U.S.
federal income tax purposes, the Wind Down Entities as a grantor
trust of which the Holders of Allowed Claims against the Wind Down
Entities are the owners and grantors. Taxable income, gain and
losses of the Wind Down Entities shall be allocated among the
deemed beneficiaries of such Wind Down Entities.
For all U.S. federal income tax purposes, all parties (including,
without limitation, the Debtors, the Wind Down Entities, the Plan
Administrator, and all Holders of Allowed Claims) shall treat the
transfer of the Plan Assets to the Wind Down Entities in accordance
with the terms of the Plan; such transfer is treated as a deemed
transfer to the Holders of Allowed Claims, followed by a deemed
transfer by such Holders to the Wind Down Entities. The Plan
Administrator shall make a good faith valuation of Plan Assets as
soon as it becomes relevant for tax reporting purposes. All parties
(including, without limitation, the Debtors, the Wind Down
Entities, the Plan Administrator, and all Holders of Allowed
Claims) shall use consistent valuation of the Plan Assets for all
U.S. federal income tax purposes.
A full-text copy of the Further Revised Disclosure Statement dated
June 23, 2024 is available at https://urlcurt.com/u?l=oiGJpc from
Kroll, the claims agent.
Counsel for the Debtors:
Andrew G. Dietderich, Esq.
James L. Bromley, Esq.
Brian D. Glueckstein, Esq.
Alexa J. Kranzley, Esq.
SULLIVAN & CROMWELL LLP
125 Broad Street
New York, NY 10004
Telephone: (212) 558-4000
Facsimile: (212) 558-3588
E-mail: dietdericha@sullcrom.com
bromleyj@sullcrom. com
gluecksteinb@sullcrom. com
lkranzleya@sullcrom. com
Adam G. Landis, Esq.
Kimberly A. Brown, Esq.
Matthew R. Pierce, Esq.
LANDIS RATH & COBB LP
919 North Market Street, Suite 1800
Wilmington, DE 19801
Tel: (302) 467-4400
Email: landis@lrclaw.com
brown@lrclaw.com
pierce@lrclaw.com
About FTX Trading Ltd.
FTX is the world's second-largest cryptocurrency firm. FTX is a
cryptocurrency exchange built by traders, for traders. FTX offers
innovative products including industry-first derivatives, options,
volatility products and leveraged tokens.
Then CEO and co-founder Sam Bankman-Fried said Nov. 10, 2022, that
FTX paused customer withdrawals after it was hit with roughly $5
billion worth of withdrawal requests.
Faced with liquidity issues, FTX on Nov. 9 struck a deal to sell
itself to its giant rival Binance, but Binance walked away from the
deal amid reports on FTX regarding mishandled customer funds and
alleged US agency investigations.
At 4:30 a.m. on Nov. 11, Bankman-Fried ultimately agreed to step
aside, and restructuring vet John J. Ray III was quickly named new
CEO.
FTX Trading Ltd (d/b/a FTX.com), West Realm Shires Services Inc.
(d/b/a FTX US), Alameda Research Ltd. and certain affiliated
companies then commenced Chapter 11 proceedings (Bankr. D. Del.
Lead Case No. 22-11068) on an emergency basis on Nov. 11, 2022.
Additional entities sought Chapter 11 protection on Nov. 14, 2022.
FTX Trading and its affiliates each listed $10 billion to $50
million in assets and liabilities, making FTX the biggest
bankruptcy filer in the US this year. According to Reuters, SBF
shared a document with investors on Nov. 10 showing FTX had $13.86
billion in liabilities and $14.6 billion in assets. However, only
$900 million of those assets were liquid, leading to the cash
crunch that ended with the company filing for bankruptcy.
The Hon. John T. Dorsey is the case judge.
The Debtors tapped Sullivan & Cromwell, LLP as bankruptcy counsel;
Landis Rath & Cobb, LLP as local counsel; and Alvarez & Marsal
North America, LLC as financial advisor. Kroll is the claims
agent, maintaining the
pagehttps://cases.ra.kroll.com/FTX/Home-Index
The official committee of unsecured creditors tapped Paul Hastings
as bankruptcy counsel; Young Conaway Stargatt & Taylor, LLP as
Delaware and conflicts counsel; FTI Consulting, Inc. as financial
advisor; and Jefferies, LLC as investment banker.
Montgomery McCracken Walker & Rhoads LLP, led by partners Gregory
T. Donilon, Edward L. Schnitzer, and David M. Banker, is
representing Sam Bankman-Fried in the Chapter 11 cases.
White-collar crime specialist Mark S. Cohen has reportedly been
hired to represent SBF in litigation. Lawyers at Paul Weiss
previously represented SBF but later renounced representing the
entrepreneur due to a conflict of interest.
GEO. J. & HILDA: Seeks to Extend Plan Exclusivity to October 1
--------------------------------------------------------------
The Geo. J. & Hilda Meyer Foundation asked the U.S. Bankruptcy
Court for the Western District of Missouri to extend its
exclusivity periods to file a plan of reorganization and obtain
acceptance thereof to October 1 and November 29, 2024,
respectively.
The Debtor claims that it has made significant progress in
resolving all outstanding claims objections and formulating a
budget and financial projections.
The Debtor explains that it has also made significant progress in
drafting a plan, but it needs additional time to finalize and
incorporate the budget and projections for the Plan.
Applicable factors weigh in favor of finding that there is cause to
extend the Exclusive Periods include:
* The existence of an unresolved contingency. Resolution of
the Objection to Anew's claim has greatly simplified crafting a
Chapter 11 plan.
* The Debtor is current on its bills.
* This is only Debtor's second request for an extension.
The Geo J. & Hilda Meyer Foundation is represented by:
Robert S. Baran, Esq.
Ryan E. Shaw, Esq.
Conroy Baran, LLC
1316 Saint Louis Ave., 2nd FL
Kansas City, MO 64101
Telephone: (816) 616-5009
Email: rbaran@conroybaran.com
rshaw@conroybaran.com
About The Geo. J. & Hilda Meyer Foundation
The Geo. J. & Hilda Meyer Foundation owns and operates a senior
living community in Higginsville Mo.
The Debtor filed a Chapter 11 petition (Bankr. W.D. Mo. Case No.
23-41685) on Dec. 4, 2023, with up to $10 million in both assets
and liabilities. David Schmidt, president, signed the petition.
Judge Brian T. Fenimore oversees the case.
Conroy Baran, LLC, serves as the Debtor's bankruptcy counsel.
GIGAMONSTER NETWORKS: Plan Exclusivity Period Extended to July 16
-----------------------------------------------------------------
Judge Kate Stickles of the U.S. Bankruptcy Court for the District
of Delaware extended GigaMonster Networks, LLC and its affiliates'
exclusive periods during which they may file a plan and disclosure
statement and solicit acceptances thereof to July 16 and September
16, 2024, respectively.
As shared by Troubled Company Reporter, the Debtors have: (a)
continued winddown efforts; and (b) continued to negotiate and
resolve open cure issues following the Court's approval of the
SkyWire sale.
The Debtors anticipate the Combined DS/Plan will be filed shortly.
Pending the Court's approval and confirmation of the Combined
DS/Plan, continued exclusivity will permit the Debtors to maintain
flexibility so that a competing plan by another third party does
not derail the parties' efforts to confirm the Combined DS/Plan.
All stakeholders will benefit from such continued stability and
predictability.
GigaMonster Networks, LLC and its affiliates are represented by:
Laura Davis Jones, Esq.
David M. Bertenthal, Esq.
Timothy P. Cairns, Esq.
PACHULSKI STANG ZIEHL & JONES LLP
919 North Market Street, 17th Floor
Wilmington, DE 19899
Tel: (302) 652-4100
Email: ljones@pszjlaw.com
dbertenthal@pszjlaw.com
tcairns@pszjlaw.com
About GigaMonster Networks
GigaMonster Networks, LLC and affiliates develop and deploy
universal access networks (UANs) in multi-family and commercial
real estate properties, providing internet, video and other network
services to approximately 400 customer properties and nearly 35,000
end-user subscribers. The Debtors contract with property owners to
set up UANs in their buildings and also provide internet services
to subscribers in those buildings.
The Debtors sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Del. Lead Case No. 23-10051) on Jan. 16,
2023. In the petition signed by its chief restructuring officer,
Rian Branning of Novo Advisors, LLC, GigaMonster Networks disclosed
up to $100 million in both assets and liabilities.
Judge Kate Stickles oversees the cases.
The Debtors tapped Pachulski Stang Ziehl and Jones, LLP as legal
counsel; Novo Advisors, LLC as restructuring advisor; Bank Street
Group, LLC as investment banker; and Kroll Restructuring
Administration as claims and noticing agent.
On Jan. 30, 2023, the U.S. Trustee for Region 3 appointed an
official committee to represent unsecured creditors in the Debtors'
Chapter 11 cases. The committee tapped Faegre Drinker Biddle &
Reath, LLP as legal counsel and M3 Advisory Partners, LP as
financial advisor.
GLOBAL IID: Moody's Affirms 'B3' CFR, Outlook Remains Stable
------------------------------------------------------------
Moody's Ratings affirmed Global IID Parent, LLC's ("Smart Start")
B3 corporate family rating and B3-PD probability of default rating.
Moody's also affirmed the company's senior secured first lien bank
credit facilities (consisting of a $40 million revolving credit
facility expiring December 2026 and $376 million term loan (current
balance) due December 2028) at B2 and its $80 million senior
secured second lien term loan maturing December 2029 at Caa2. The
outlook remains stable. Smart Start is the leading global provider
of ignition interlock devices ("IID") or car breathalyzers for DUI
offenders.
The affirmation of the B3 CFR reflects Moody's expectations for
debt-to-EBITDA around 6.0x, mid-single-digit organic revenue growth
and expanding profitability, driven by strategic pricing actions
and increased new client installs, and good liquidity.
RATINGS RATIONALE
The B3 CFR reflects Smart Start's high financial leverage, with
debt-to-EBITDA at 6.1x for the 12 month period ended March 31,
2024. This is a significant improvement from 7.3x for the full year
2023, driven by higher sales, cost savings initiatives and
mandatory debt repayments. Moody's anticipate that Smart Start will
sustain its financial leverage around 6.0x over the next 12 to 18
months, with interest coverage only around 1.0x in the same period.
Moody's also expect the company to continue generating modest free
cash flow, with a free cash flow-to-debt ratio of around 3%
anticipated. Smart Start has a narrow product offering and small
revenue scale compared to many other B3-rated business services
companies. Furthermore, there are corporate governance concerns
regarding Smart Start's concentrated, private ownership and
financial strategies, especially the potential for debt-funded
acquisitions and shareholder distributions.
All financial metrics cited reflect Moody's standard adjustments.
According to the company, Smart Start is one of the world's largest
providers of ignition interlock devices ("IID") or driver
breathalyzers for DUI offenders that prevent the vehicle from
starting if the driver is intoxicated. The company's strong market
position, and Moody's anticipation of an ongoing shift towards IIDs
for repeat DUI offenders will support continued revenue growth.
Moody's expect mid-single digit annual organic revenue growth and
strong profitability with EBITDA margin approaching 37% in the next
12 to 18 months.
The B2 senior secured first lien credit facility rating is
positioned one notch above the B3 CFR and reflects its priority
position in the capital structure, ahead of the second-lien
instrument. The Caa2 senior secured second-lien term loan rating
reflects its junior position in the capital structure.
Moody's expect that Smart Start will maintain a good liquidity
profile over the next 12 to 15 months. Liquidity is principally
supported by $6 million of cash on hand as of March 31, 2024 and
free cash flow-to-debt of 2% for the 12 months ended March 31,
2024. Moody's anticipate that Smart Start will continue to generate
free cash flow, with its free cash-flow-to-debt remaining in the
low-single digit percentage range over the next 12 to 15 months. In
addition, the company has around $30 million available under its
$40 million revolving credit facility (less $9.4 million of loans
drawn and around $0.6 million outstanding standby letters of
credit) as of March 31, 2024.These sources provide adequate
coverage for the required annual first lien term loan amortization
payments of around $4 million. The revolver is subject to a
maximum springing first lien secured leverage ratio test that
cannot exceed 8.25x when drawings exceed 35% of availability.
Moody's expect the company will continue to have a comfortable
cushion relative to the covenant limit, even with the currently
high financial leverage.
The stable outlook reflects Moody's expectations for sustained
revenue and earnings growth, with debt to EBITDA around 6.0x, while
maintaining a good liquidity profile over the next 12 to 18
months.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if Smart Start demonstrates a
meaningful increase in scale and product diversity, without
sacrificing profitability, and sustains free cash flow as a
percentage of debt above 5% and debt-to-EBITDA below 5.5x (based on
Moody's calculations).
The ratings could be downgraded if revenue growth slows or there is
a material decline in profitability, or as a result of sustained
break even or negative cash flow, indicating a deterioration in
liquidity. A ratings downgrade could also occur if Moody's expect
debt-to-EBITDA leverage will be sustained above 7.0x (based on
Moody's calculations), indicating that financial strategies have
become more aggressive.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
Smart Start, based in Grapevine, TX, is a global provider of
alcohol monitoring solutions utilizing IIDs, which prevent driving
under the influence of alcohol. The company provides alcohol
monitoring services (using its devices) to both individuals and
commercial clients. Its products include IIDs and remote alcohol
monitoring devices. The company's IIDs are typically installed in
vehicles of individuals convicted of DUIs or similar offenses, or
in vehicle fleets operated by commercial and governmental entities.
GOOD NATURED: To File Chapter 15 to Facilitate Restructuring
------------------------------------------------------------
Good natured Products Inc. (TSXV: GDNP) (OTCQB: GDNPF) , a North
American leader in eco-friendly food packaging, bio-based plastic
extrusion and plant-based products, announced that the Company
sought and obtained an order (the "Initial Order") from the Supreme
Court of British Columbia Justice (the "Court") under the
Companies' Creditors Arrangement Act (the "CCAA"), in order to
restructure its financial affairs. The Company and its
subsidiaries will file cases under Chapter 15 of Title 11 of the
United States Code seeking recognition of the CCAA proceeding
within the territorial jurisdiction of the United States to
restructure its financial affairs.
After careful consideration in consultation with legal and
financial advisors, the board of directors determined that a
comprehensive restructuring was in the best interest of the Company
and its stakeholders. In light of financial pressures from higher
debt servicing costs, reduction in revenue from the Company's
Industrial business group, and lower than anticipated orders from a
large US Food Producer as outlined in the Company's two most recent
quarterly financial results, it was determined that seeking
creditor protection under the CCAA would provide the best
opportunity to position the Company for future success.
As part of the overall restructuring and as outlined in the
Company's Q1 2024 press release dated May 30, 2024, good natured(R)
intends to continue the prioritization of its most growth-oriented
and profitable business groups and rigorously review operating
capabilities and processes to identify transformative initiatives.
The Company is expected to continue to operate in the ordinary
course under the protection of the Initial Order. There are no
disruptions anticipated to the products and services that good
natured(R) provides to its loyal customers in both the United
States and Canada. The board of directors of the Company will
remain in place, and management retains responsibility for the
day-to-day operations of the Company, with certain provisions as
outlined below.
The Initial Order provides for, among other things: (i) a stay of
proceedings in favor of the Company; and (ii) the appointment of
Alvarez & Marsal Canada Inc. as monitor of the Company (in such
capacity, the "Monitor").
The Company confirms it has a minimum of three directors on its
board of directors at the time of the Initial Order. Further, the
Company confirms its transfer agent is in good standing as at the
date of the Interim Order and good natured(R) will continue to
issue all material information updates as required via a press
release and ensure all disclosure requirements under the TSX
Venture Exchange ("TSXV") Exchange Policy will be met. As a result
of the Company receiving protection under the Companies' Creditors
Arrangement Act (CCAA), the Company expects its shares to be
transferred to the NEX board of the TSX-V.
Additional information regarding the CCAA proceedings -- including
all of the Court materials filed in the CCAA proceedings -- may be
found at the Monitor's website:
https://www.alvarezandmarsal.com/goodnatured
About good natured Products Inc.
good natured(R) is at the forefront of North America's shift toward
sustainability, showcasing over 90 plant-based packaging designs
and an extensive portfolio of more than 400 products and services.
These offerings are purposefully designed to reduce environmental
impact by using more renewable materials, less fossil fuel, and
eliminating chemicals of concern.
Manufactured locally in the US and Canada, good natured(R)
engineers and distributes a diverse range of bio-based products
across various sectors, including grocery, restaurant, electronics,
automotive, and pharmaceutical via both wholesale and direct
channels.
The Company is dedicated to providing an industry-leading customer
experience in order to encourage the transition to renewable
alternatives. By making it easy and affordable for businesses to
adopt bio-based products and packaging, good natured(R) aims to
empower them to reach their sustainability objectives.
GRUPO HIMA: Asset Sale Proceeds to Fund Plan Payments
-----------------------------------------------------
Grupo Hima San Pablo, Inc., and its affiliates, the DIP Agent, and
the Unsecured Creditors' Committee (the "UCC") filed with the U.S.
Bankruptcy Court for the District of Puerto Rico a Disclosure
Statement for Joint and Consolidated Plan of Liquidation dated June
24, 2024.
Grupo HIMA San Pablo, Inc. was incorporated under the laws of the
Commonwealth of Puerto Rico on December 20, 2005, to serve as a
diversified healthcare services holding company pursuant to a
corporate reorganization of several businesses related by common
ownership.
Through its subsidiaries and affiliates (referred together as the
"HIMA GROUP"), the Company primarily owns and operates hospital
facilities and other healthcare related businesses.
By the time of filing of these bankruptcy petitions, the HIMA GROUP
operated four hospitals, with over 1,100 licensed beds, including
an Oncological Hospital, a multi-specialty physician practice, a
Home Care Service (including infusion therapies and wound care), a
freestanding Ambulatory Center, a 16-Ambulance Service Company,
food services, two external pharmacies, a security service, and a
provider of a certified health record platform.
In December of 2023, negotiations commenced by and among the
Debtors, the Secured Lenders and the Creditors Committee towards a
consensual plan of Reorganization. The negotiations were complex
and protracted, but ultimately resulted in an agreement to a Term
Sheet executed by the Debtors, the Secured Lenders and the
Creditors Committee. The Term Sheet is divided into 2 sections: one
governing the conduct of the parties thereto between May 23, 2024,
and the Effective Date of the Plan, and the second, setting the
Terms of the Proposed Plan.
Pursuant to Section I of the Term Sheet entitled "Pre-Effective
Date Agreements," the parties thereto agreed that an
"Administrative Claim Escrow Fund" would be created, pending
confirmation of the Plan, to be used to discharge administrative
claims on the Effective Date.
It was further agreed that the Administrative Claim Escrow Fund
would be funded with $4 million, from the pre-effective date
collection of accounts receivables, plus, once that $4 million
funding level was achieved, with an additional 20% of the net
proceeds of all accounts receivable (regardless of age) collected
after: (i) payment of SJU Healthcare Consulting, LLC's 24.5%
commission, as applicable, and (ii) payment of regular wind-down
expenses of the estate, including payment of allowed professional
fees, provided that the Wind-Down estate shall maintain a minimum
cash balance of $500,000 at all times prior to the Effective Date.
The Debtors commenced the Chapter 11 Cases to facilitate a timely
and efficient sale process aimed at maximizing the value of the
Debtors' estates for the benefit of all stakeholders. Following a
prepetition marketing process, the Debtors determined, in
consultation with their advisors, that an expedited marketing and
sale process was the best path forward to consummate a value
maximizing Sale for the benefit of all stakeholders under the
circumstances.
Following the approval of the Bidding Procedures Order, the Debtors
pursued active marketing efforts seeking to sell all assets
associated with the Hima San Pablo operations, including all of the
applicable real estate and facilities that entail the four hospital
units.
Class 9 consists of General Unsecured Claims. This Class shall
receive Pro Rata Share of Liquidating Trust Distributable Cash,
capped at $20,000,000.00; payment waiver for Class 7 and 8 claim
holders. This Class is impaired.
On the Effective Date, (i) the Liquidating Trust shall be
established pursuant to the Liquidating Trust Agreement; (ii) the
Liquidating Trustee shall be appointed as trustee of the
Liquidating Trust; (iii) except as otherwise provided herein, the
Debtors and/or the DIP Agent, as applicable, shall transfer the
Initial Liquidating Trust Funding Amount to the Liquidating Trust;
and (iv) all Liquidating Trust Causes of Action and Liquidating
Trust Assets shall be transferred to and vested in the Liquidating
Trust.
A full-text copy of the Disclosure Statement dated June 24, 2024 is
available at https://urlcurt.com/u?l=IodzBr from Epiq Corporate
Restructuring, LLC, claims agent.
Attorneys for the Debtors:
Wigberto Lugo Mender, Esq.
Alexis A. Betancourt Vincenty, Esq.
Lugo Mender Group, LLC
100 Carr. 165 Suite 501
Guaynabo, PR 00968-8052
Tel: (787) 707-0404
Fax: (787) 707-0412
Email: wlugo@lugomender.com
About Grupo Hima San Pablo
Grupo HIMA San Pablo, Inc. serves as a diversified healthcare
services holding company pursuant to a corporate reorganization of
several businesses related by common ownership. Through its
subsidiaries and affiliates, Grupo HIMA San Pablo primarily owns
and operates hospital facilities and other healthcare related
businesses. As of August 2023, the HIMA GROUP operates four
hospitals, with over 1,200 licensed beds, including an Oncological
Hospital, a multi-specialty physician practice management company,
Home Care Service (including infusion therapies and wound care), a
free-standing ambulatory center and a 16-ambulance service
company.
Grupo HIMA San Pablo and its affiliates filed Chapter 11 petitions
(Bankr. D. P.R. Lead Case No. 23-02510) on Aug. 15, 2023. In the
petition signed by its chief executive officer, Armando J.
Rodriguez-Benitez, Grupo HIMA San Pablo disclosed $500 million to
$1 billion in assets and $100 million to $500 million in
liabilities.
Judge Enrique S. Lamoutte Inclan oversees the cases.
Wigberto Lugo Mender, Esq., at Lugo Mender Group, LLC and
Pietrantoni Mendez & Alvarez, LLC serve as the Debtors' bankruptcy
counsel and special counsel, respectively.
The U.S. Trustee for Region 21 appointed an official committee of
unsecured creditors on Sept. 7, 2023. Porzio, Bromberg & Newman,
P.C. is the committee's legal counsel.
Edna Diaz De Jesus is the patient care ombudsman appointed in the
Debtors' Chapter 11 cases.
HEIR'S MEN'S: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Heir's Men's Shop, Inc.
525 Westside Avenue
Jersey City, NJ 07304
Business Description: The Debtor sells a variety of clothing and
footwear products.
Chapter 11 Petition Date: July 3, 2024
Court: United States Bankruptcy Court
District of New Jersey
Case No.: 24-16734
Judge: Hon. John K Sherwood
Debtor's Counsel: Brian G. Hannon, Esq.
NORGAARD OBOYLE HANNON
184 Grand Avenue
Englewood, NJ 07631
Tel: (201) 871-1333
Fax: (201) 871-3161
Email: bhannon@norgaardfirm.com
Total Assets: $88,801
Total Liabilities: $2,076,066
The petition was signed by Jeffrey Heir as president.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 20 largest unsecured creditors is available
for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/MW5TCJQ/Heirs_Mens_Shop_Inc__njbke-24-16734__0001.0.pdf?mcid=tGE4TAMA
HERTZ CORP: Fitch Assigns 'BB-' Rating on $750MM First Lien Notes
-----------------------------------------------------------------
Fitch Ratings has assigned a final 'BB-'/'RR1' rating to The Hertz
Corporation's (Hertz) upsized $750 million first-lien (1L) senior
secured notes and a 'CCC'/'RR6' rating to Hertz's $250 million
second-lien (2L) senior secured exchangeable notes. Fitch has also
downgraded the company's senior unsecured debt rating to
'CCC-'/'RR6' from 'CCC+'/'RR5'. Hertz's 'B-' Long-Term Issuer
Default Rating (IDR) and debt ratings remain on Rating Watch
Negative (RWN).
The final ratings on the senior secured debt align with the
expected ratings Fitch assigned on June 20, 2024. See "Fitch Places
Hertz on Rating Watch Negative; Assigns Expected Rating to New
Secured Debt,".
KEY RATING DRIVERS
Hertz's 1L senior secured notes are rated three notches above its
Long-Term IDR, reflecting Fitch's view of outstanding recovery
prospects under a stress scenario given the available collateral.
The 2L senior secured exchangeable notes are rated two notches
below Hertz's Long-Term IDR reflecting poor recovery prospects
under a stress scenario given the size and asset encumbrance of the
1L debt. Proceeds from the secured issuances are expected to be
used to repay outstanding borrowings under Hertz's 1L secured
revolving credit facility (RCF).
The downgrade of the senior unsecured debt rating to 'CCC-'/'RR6',
which is three notches below the company's IDR, reflects structural
subordination and Fitch's expectation that following the recently
concluded secured issuances, recovery prospects for unsecured debt
holders will be poor under a stress scenario, given the increased
proportion of secured debt in the capital structure.
The RWN continues to reflect increased execution risk associated
with liquidity management due to continued losses on the disposal
of electric vehicles and minimum liquidity covenants on the RCF as
Hertz enters its busy season, with meaningful in-fleeting through
the summer months. The RWN also reflects reduced financial
flexibility due to increased asset encumbrance following the 1L and
2L issuances. Additionally, recent management turnover contributes
to uncertainty regarding the company's ability to successfully
implement its planned cost-saving measures.
Hertz's ratings remain supported by its established market position
and well-recognized global franchise within the car rental industry
and strong travel demand. The ratings remain constrained by vehicle
supply-demand dynamics and elevated interest rates, which expose
the company to heightened residual value risks. Additional
constraints include earnings volatility across market cycles, which
can affect cash flow leverage and interest coverage metrics;
continued reliance on secured, wholesale funding sources; high
funding costs; and liquidity risk.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Inability to appropriately manage liquidity through the peak
fleet season, including maintaining a cushion to minimum liquidity
requirements on borrowing facilities;
- Inability to execute on the stated productivity initiatives and
deliver on targeted profitability improvement, particularly if it
leads to a sustained weakening in the liquidity position;
- Inability to successfully execute on the refinancing of its RCF,
resulting in increased refinancing risk;
- Inability to reduce Fitch-calculated leverage to 5x over the
Outlook horizon;
- A sustained reduction in corporate interest coverage below 2x;
- Inability to maintain economic access to the capital markets
through market cycles; and/or
- A material degradation in the company's market share and
competitive position.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Should Hertz maintain an adequate cushion to its minimum
liquidity covenants over the peak fleet season, the RWN could be
removed and a Negative Rating Outlook would be assigned.
- A revision of the Outlook to Stable could be driven by strong
execution against stated productivity initiatives and improving
profitability which facilitates a sustained reduction in cash flow
leverage towards 5x and corporate interest coverage towards 2x over
the Outlook horizon.
Beyond that, positive rating momentum would be premised on:
- Enhanced consistency of operating performance resulting from
disciplined fleet management and continued optimization of vehicle
economics;
- Maintenance of Fitch-calculated leverage below 3.5x;
- Maintenance of corporate interest coverage above 6x on a
sustained basis; and/or
- Maintenance of an adequate liquidity profile to support capital
expenditures and debt servicing needs.
DEBT AND OTHER INSTRUMENT RATINGS: KEY RATING DRIVERS
The 1L senior secured debt rating is three notches above the
Long-Term IDR and reflects Fitch's view of outstanding recovery
prospects under a stress scenario given the available collateral.
The 2L senior secured exchangeable notes are rated two notches
below the Long-Term IDR reflecting poor recovery prospects under a
stress scenario given the size and asset encumbrance of the 1L
debt.
The senior unsecured debt rating is three notches below the
Long-Term IDR, reflecting poor recovery prospects under a stress
scenario, given the structural subordination resulting from the
increased proportion of secured debt in the capital structure.
DEBT AND OTHER INSTRUMENT RATINGS: RATING SENSITIVITIES
The senior secured debt and senior unsecured debt ratings are
primarily sensitive to changes in Hertz's Long-Term IDR and,
secondarily, to the relative recovery prospects of the
instruments.
ADJUSTMENTS
The Standalone Credit Profile (SCP) has been assigned below the
implied SCP due to the following adjustment reason: Weakest Link -
Funding, Liquidity & Coverage (negative)
The Sector Risk Operating Environment score has been assigned below
the implied score due to the following adjustment reasons: Business
model (negative), Regulatory and legal framework (negative).
The Earnings & Profitability score has been assigned below the
implied score due to the following adjustment reasons: Earnings
stability (negative), Historical and future metrics (negative).
The Funding, Liquidity & Coverage score has been assigned below the
implied score due to the following adjustment reasons: Historical
and future metrics (negative), Funding flexibility (negative).
ESG CONSIDERATIONS
The Hertz Corporation has an ESG Relevance Score of '4' for
Management Strategy due to lack of visibility and concerns about
execution of strategy, which has a negative impact on the credit
profile, and is relevant to the ratings in conjunction with others
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
----------- ------ -------- -----
Hertz
Corporation
(The) LT IDR B- Rating Watch Maintained B-
senior
unsecured LT CCC- Downgrade RR6 CCC+
senior
secured LT BB- Rating Watch Maintained RR1 BB-
senior
secured LT BB- New Rating RR1 BB-(EXP)
Senior
Secured
2nd Lien LT CCC New Rating RR6 CCC(EXP)
HUDSON PACIFIC: Fitch Lowers IDR to 'BB-', Outlook Negative
-----------------------------------------------------------
Fitch Ratings has downgraded the Issuer Default Ratings (IDRs) of
Hudson Pacific Properties, Inc. (HPP) and Hudson Pacific
Properties, L.P. to 'BB-', from 'BBB-'. Fitch has also downgraded
the senior debt held under Hudson Pacific Properties, L.P. to
'BB-/RR4', from 'BBB-', and HPP's preferred stock rating to
'B'/'RR6', from 'BB', under Hudson Pacific Properties, Inc. The
Rating Outlook remains Negative.
The ratings reflect HPP operating outside of leverage
sensitivities. Fitch expects this to persist in the forecast
horizon (two years or longer) as the company continues to face
declining office occupancy, with the anticipation of tenant
moveouts more than offsetting leasing activity in the near term. In
addition, a lag from 2023's writer's strike is expected to result
in a muted near-term recovery in the company's studio business
operations.
Fitch believes the company's leverage will remain at elevated
levels for much of the forecast period as its portfolio continues
to face challenges from the shifting approach towards remote work
and its potential effect on office property market fundamentals.
The Negative Outlook could be resolved if the recent trend of
declining occupancy reverses and there is evidence of occupancy
stabilization, moving toward more historical levels. Such a
positive move would likely be accompanied by concurrent leverage
reduction back toward the 7x range. In addition, improvement in the
UA/UD ratio and Fitch's expectation of HPP progressing back towards
the 2x level in the forecast horizon would provide positive
momentum.
KEY RATING DRIVERS
Deterioration of Property Fundamentals: Moveouts in 2023 and the
sale of One Westside caused office portfolio occupancy levels to
decline from 88.0% at 4Q22 to 80.8% at 4Q23 to 79.0% at 1Q24. The
company believes it can return to 4Q23 levels by YE24 through
ongoing consistent leasing despite a few known moveouts in 2024.
Cash SSNOI declined -3.6% in 2023 after accounting for the December
2023 sale of One Westside and is expected to decline further
(approximately -12%) in 2024 on continued declining average
occupancy over the year.
However, HPP expects YE24 occupancy to return to YE23 levels. Given
known moveouts in 2025, SSNOI is likely to be negative again in
2025 before potentially turning positive in 2026.
Heightened Pressure on Credit Metrics:. Fitch expects the company
to operate considerably outside of historical levels for at least
the next few years. The agency anticipates REIT leverage (net debt
to recurring EBITDA) will remain above 8.0x for most of the
forecast period. HPP's leverage has persisted above 8x over the
last two years and Fitch no longer believes HPP can bring leverage
back to the 7x range in the next couple years. Leverage was 9.3x
for FY 2023 and 8.5x for FY 2022.
Fitch expects HPP's FCC to subside in the mid-high 1.0x range
through 2026, aided by anticipated positive SSNOI growth by 2026,
incremental NOI from portfolio stabilization, new developments, and
forecasted lower levels of capex beyond 2025. HPP's FCC was 1.3x
for 2023 and 2.2x in 2022. In addition, Fitch estimates net UA/UD,
calculated as unencumbered property NOI divided by a stressed 8.25%
capitalization rate, was 1.4x at 1Q24. This is a significant
decline from net UA/UD of 1.8x at 1Q23 and below 2.0x, which is the
typical threshold for investment grade REITs. Fitch views these
lower than historical levels for FCC and UA/UD as limiting to
financial flexibility.
Cash Flow Volatility: Fitch expects HPP's portfolio rental income
to exhibit above-average volatility through the cycle, primarily
due to concentration risks. The company's portfolio is principally
located in three West Coast metros with high exposure to technology
and new media companies. The company's industry sectors have
historically been more cyclically sensitive than other key
office-using tenant industries, such as legal, defense and
government. Nonetheless, tech sector companies could demonstrate an
increased relative resilience, although they may also have less
future demand for office space, given potential amenability towards
flexible working arrangements.
HPP's tenant industry concentration is a moderate negative to
Fitch's ratings, which look "through the cycle," thus incorporating
the near certainty of a future tech downturn. Fitch recognizes that
many of today's leading tech companies provide less
capital-intensive services to a diverse industry set and have
become more integrated with the general economy. This could reduce
the correlation of their business performance and cause the tech
sector to be less volatile in future down cycles than in the past.
However, access to and reliance on (venture) capital remains an
undiversifiable tech sector risk, in Fitch's view, notwithstanding
the greater diversity of end industries served.
High-Quality, but Concentrated Portfolio: Hudson primarily owns
class A office properties in the San Francisco (62% of in-service
office portfolio ABR), Los Angeles (19%), Seattle (12%) and
Vancouver (7%) metro areas. These cities are key technology and new
media industry hubs with strong office demand demographics (i.e.
employment and population growth, household income levels and
workforce education rates) that exceed the U.S. averages. Moreover,
according to JLL, 84% of HPP's assets are top tier and /or in high
quality locations. The company also owns approximately 1.2 million
sf of studio space in LA. Hudson's markets benefit from high
political barriers to new supply, as well as physical barriers due
to the region's topography.
Historical Unsecured Capital Access: HPP completed its inaugural
public unsecured bond issuance in 2017 with a $400 million, 10-year
issuance of senior unsecured public notes. The company continued
this momentum in 2019 with two additional public bond offerings,
followed by a green bond unsecured issuance more recently in
September 2022. Hudson previously demonstrated access to unsecured
bank term-loan and private placement notes.
Value-Add Strategy Risk: HPP's external growth strategy principally
focuses on the acquisition and stabilization of office assets,
primarily through some combination of lease-up and property
redevelopment. Fitch views the relative risk/reward of value-add
acquisitions as being in between core investments and ground-up
development.
HPP had one consolidated property under construction at March 31,
2024 with an estimated total investment of $350 million (3.5% of
undepreciated gross assets). Along with small required commitments
on unconsolidated joint ventures, the unfunded component of
development was $114 million (1.1% of gross assets).
DERIVATION SUMMARY
HPP's ratings are supported by its high-quality, concentrated
portfolio strategy with strong market positions in West Coast CBD
office markets with high political and geographic supply barriers.
The company's portfolio is less seasoned and has higher tenant
industry concentration risk than other office REIT peers, SL Green
Realty Corp. (BB+/Negative) and Vornado Realty Trust (BB+/Stable).
HPP's investment strategy entails moderate execution risk,
emphasizing value-add acquisitions and moderate development. In the
last couple years, the company has not maintained historical
financial policies in the wake of decreasing portfolio occupancy
levels, while also seeing its studio business negatively affected
by the 2023 writer's strike. HPP has demonstrated access to the
unsecured debt markets through private placements and public
bonds.
Preferred Stock Notching: The two-notch differential between HPP's
IDR and preferred stock rating is consistent with Fitch's criteria
for corporate entities with a 'BB-' IDR. Based on Fitch's
"Corporate Hybrids Treatment and Notching Criteria," these
preferred securities are deeply subordinated and have
loss-absorption elements that would likely result in poor
recoveries in the event of a corporate default.
Fitch rates the IDRs of the parent REIT (Hudson Pacific Properties,
Inc.) and subsidiary operating partnership (Hudson Pacific
Properties, L.P.) on a consolidated basis, using the weak
parent/strong subsidiary approach and open access and control
factors, based on the entities operating as a single enterprise
with strong legal and operational ties.
KEY ASSUMPTIONS
- Fitch expects negative SSNOI declines in 2024 and 2025, generated
by new leasing activity lagging known moveouts, followed by
positive SSNOI growth in 2026 as leasing initiatives stabilize
against a backdrop of fewer lease expirations and development
projects deliver;
- The company pays off private placement notes of $259 million in
2025 and refinances other existing secured debt through the
forecast period;
- Given the potential for a lagged recovery from the 2023 writer's
strike, Fitch has assumed the studio business generates
approximately 80% of 2022 NOI, ramping up towards $100 million in
2025 and thereafter.
- The company does not issue any equity in the forecast period.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade
- Fitch's expectation of REIT leverage (net debt/recurring
operating EBITDA) sustaining below 8.0x;
- HPP demonstrating its financial policy commitments through a
cycle or improving its tenant diversification;
- Strong recovery in NOI studio business back towards pre-writer's
strike expectations.
- Fitch's expectation of REIT FCC sustaining above 1.75x;
- The Outlook could be stabilized through tangible progress of
occupancy returning to above 85% occupancy.
Factors that could, individually or collectively, lead to negative
rating action/downgrade
- Fitch's expectation of REIT leverage sustaining above 9.0x;
- Persistently lower demand for office space;
- An unusually strong regional economic or tech industry downturn
in HPP's West Coast markets;
- Fitch's expectation of REIT FCC sustaining below 1.5x.
LIQUIDITY AND DEBT STRUCTURE
Adequate Liquidity: HPP has a sufficient liquidity position. The
company's sources cover its uses by 1.0x, based on Fitch's base
case liquidity analysis for the April 1, 2024 to Dec. 31, 2025
forecast period, which incorporates HPP's projected development and
capex spend. The company has no debt maturities in 2024 and has two
mortgage loans aggregating $482 million and $259 million in
unsecured debt notes maturing in 4Q25. Committed, unfunded
development expenditures and recurring and nonroutine leasing and
maintenance capex represent the other anticipated uses of capital
through 2025 at roughly $369 million combined, as estimated by
Fitch.
Low Unencumbered Portfolio: Fitch estimates the company's
unencumbered assets cover its net unsecured debt (UA/UD) by 1.4x
based on a direct capitalization approach of unencumbered NOI using
a stressed 8.25% capitalization rate. This is lower than the 1.8x
UA/UD that Fitch calculated for HPP at Fitch's prior review. Fitch
usually views 2.0x UA/UD coverage as the standard threshold for
investment-grade REITs. Generally, the asset quality of the
company's unencumbered portfolio should provide good contingent
liquidity that could be used to support HPP's credit profile under
a stress scenario.
ISSUER PROFILE
Hudson Pacific Properties, Inc. (NYSE: HPP) is a fully integrated
real estate investment trust that owns, acquires and (re)develops a
high-quality portfolio of office and media and entertainment
properties in high-growth, high-barrier-to-entry submarkets
throughout Northern and Southern California and the Pacific
Northwest.
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
----------- ------ -------- -----
Hudson Pacific
Properties, Inc. LT IDR BB- Downgrade BBB-
Preferred LT B Downgrade RR6 BB
Hudson Pacific
Properties, L.P. LT IDR BB- Downgrade BBB-
senior unsecured LT BB- Downgrade RR4 BBB-
INDIVA LIMITED: SNDL Enters Into Purchase Agreement Under CCAA
--------------------------------------------------------------
SNDL Inc. (Nasdaq: SNDL) announced that it has entered into a
purchase agreement (the "Bid Agreement") with Indiva Limited
("Indiva") and its direct and indirect subsidiaries (collectively
with Indiva, the "Indiva Group"), pursuant to which SNDL has
offered to purchase all of the issued and outstanding shares of
Indiva and the business and assets of the Indiva Group
(collectively, the "Indiva Assets") for consideration comprising of
a credit bid of all of the indebtedness of the Indiva Group owing
to SNDL, the retention of certain liabilities of the Indiva Group,
and cash payments sufficient to repay certain priority indebtedness
of the Indiva Group and costs associated with the Indiva Group's
proceedings under the Companies' Creditors Arrangement Act (Canada)
(the "CCAA Proceedings").
The Bid Agreement has been entered into in the context of the CCAA
Proceedings, as part of a sales process where the Indiva Assets
will be marketed to prospective purchasers (the "Sale Process") by
PricewaterhouseCoopers Inc., the monitor in the CCAA Proceedings
(the "Monitor") and, accordingly, is subject to approval by the
court overseeing the CCAA Proceedings and to potential alternative
bids submitted pursuant to the Sale Process.
Based on a report of the Monitor, dated July 4, 2024, issued in the
CCAA Proceedings, the Monitor currently estimates the value of the
credit bid and cash consideration payable by SNDL under the Bid
Agreement to be in the range of approximately CAD$25 million to
CAD$28 million. SNDL is the stalking horse bidder in the Sale
Process, such that the Bid Agreement will set the "floor", or
minimum acceptable bid, for other bidders and will be deemed
accepted if there are no other bids submitted. If the Monitor
determines that there is another bid that offers superior terms to
the Bid Agreement, SNDL will also have the opportunity to
participate in an auction process for the Indiva Assets. The Sale
Process is currently expected to conclude by September 30, 2024.
The acquisition of the Indiva Assets is expected to further enhance
SNDL's product portfolio, particularly in the edibles segment, and
reinforce its position as a leading player in the Canadian cannabis
market. Indiva's leading brands, Pearls by Grön, No Future
Gummies and Vapes, Bhang Chocolate, Indiva Blips Tablets, Indiva
Doppio Sandwich Cookies, and Indiva 1432 Chocolate, have garnered
strong consumer loyalty and are known for their quality, innovation
and value.
Advisors
McCarthy Tétrault LLP is acting as legal counsel for SNDL, Bennett
Jones LLP is acting as legal counsel for the Indiva Group, and
Osler Hoskin & Harcourt LLP is acting as legal counsel for the
Monitor.
About SNDL Inc.
SNDL -- https://sndl.com/ -- is a public company whose shares are
traded on the Nasdaq under the symbol "SNDL". SNDL is the largest
private-sector liquor and cannabis retailer in Canada with retail
banners that include Ace Liquor, Wine and Beyond, Liquor Depot,
Value Buds, Spiritleaf, and Firesale Cannabis. SNDL is a licensed
cannabis producer and one of the largest vertically integrated
cannabis companies in Canada specializing in low-cost biomass
sourcing, premium indoor cultivation, product innovation, low-cost
manufacturing facilities, and a cannabis brand portfolio that
includes Top Leaf, Contraband, Palmetto, Bon Jak, Versus, Value
Buds, and Vacay. SNDL's investment portfolio seeks to deploy
strategic capital through direct and indirect investments and
partnerships throughout the North American cannabis industry.
About Indiva Limited
Indiva Limited -- https://www.indiva.com -- engages in the
production, processing, and sale of cannabis and cannabis related
products in Canada. It offers edibles, capsules and tablets, and
vape products under the No Future, Pearls by gron, Bhang Chocolate,
Indiva Doppio, Indiva Blips, and Indiva 1432 brands.
INSPIREMD INC: Raises $16.9MM From Full Series H Warrant Exercise
-----------------------------------------------------------------
InspireMD, Inc. announced on July 1, 2024, the completion of the
full exercise of 12.9 million Series H warrants. The Series H
warrants were converted primarily into pre-funded warrants. The
gross proceeds to the company from the warrant exercise were $17.9
million, and $16.9 million after fees.
The Series H warrants were issued as part of the transformational
private placement financing of up to $113.6 million that InspireMD
announced in May 2023. The Series H warrants became exercisable
following the release of positive results related to one-year
follow-up from the Company's C-GUARDIANS pivotal trial of the
CGuard Carotid Stent System. Participating warrant holders include
Marshall Wace, OrbiMed, Rosalind, Nantahala, Soleus, Velan, and
certain InspireMD Board members.
Marvin Slosman, chief executive officer of InspireMD, stated, "We
are grateful for the continued support of these highly regarded
healthcare investors, who have elected to exercise 100% of the
available Series H warrants. This capital strengthens our business
and helps fuel our growth, including advancing our CGuard Prime
Carotid Stent System through to potential FDA approval and U.S.
launch in the first half of next year. CGuard is a highly
differentiated stent implant that delivers superior short- and
long-term patient outcomes, as reflected in the best-in-class
evidence that was reported at both the VIVA 2023 and LINC 2024
conferences. Looking ahead, we are working to catalyze these
milestones to continue building momentum toward commercialization,
while advancing both our CAS and TCAR programs to address the
broadest range of physicians and patient needs of any company
within the field of carotid revascularization."
About InspireMD
Headquartered in Tel Aviv, Israel, InspireMD, Inc. --
http://www.inspiremd.com-- is a medical device company focusing on
the development and commercialization of its proprietary MicroNet
stent platform technology for the treatment of complex vascular and
coronary disease. A stent is an expandable "scaffold-like" device,
usually constructed of a metallic material, that is inserted into
an artery to expand the inside passage and improve blood flow. Its
MicroNet, a micron mesh sleeve, is wrapped over a stent to provide
embolic protection in stenting procedures.
The Company reported a net loss of $19.92 million in 2023, a net
loss of $18.49 million in 2022, a net loss of $14.92 million in
2021, a net loss of $10.54 million in 2020, and a net loss of
$10.04 million in 2019.
InspireMD said in its Quarterly Report for the period ended March
31, 2024, that as of March 31, 2024, the Company has the ability to
fund its planned operations for at least the next 12 months from
issuance date of the financial statement. However, the Company
expects to continue incurring losses and negative cash flows from
operations until its products (primarily CGuard EPS) reach
commercial profitability. Therefore, in order to fund its
operations until such time that it can generate substantial
revenues, the Company may need to raise additional funds.
InspireMD's plans include continued commercialization of the
Company's products and raising capital through sale of additional
equity securities, debt or capital inflows from strategic
partnerships. There are no assurances, however, that the Company
will be successful in obtaining the level of financing needed for
its operations. If it is unsuccessful in commercializing its
products or raising capital, the Company may need to reduce
activities, curtail or cease operations.
INTOUCHCX INC: Moody's Withdraws 'B2' CFR Following Debt Repayment
------------------------------------------------------------------
Moody's Ratings has withdrawn all ratings for IntouchCX Inc.
including the B2 corporate family rating, B2-PD probability of
default rating, B1 backed senior secured first lien term loan and
revolving credit facility ratings, and Caa1 backed senior secured
second lien term loan rating. At the time of withdrawal, the
outlook was stable.
RATINGS RATIONALE
Moody's have withdrawn the ratings because IntouchCX's debt
previously rated by Moody's Ratings has been fully repaid.
IntouchCX Inc., a private company domiciled in Winnipeg, Canada,
provides outsourced customer care contact center services including
multi-channel alternatives including chat, text, email and social
media, as well as voice.
IROQUOIS-HUEY LLC: Hires Brown Law Firm as Bankruptcy Counsel
-------------------------------------------------------------
Iroquois-Huey, LLC seeks approval from the U.S. Bankruptcy Court
for the Northern District of Oklahoma to hire Brown Law Firm, P.C.
as its attorney.
The firm will render these services:
a. negotiate allowed claims and treatment of creditors;
b. render legal advice and preparation of legal documents and
pleadings concerning claims of creditors, post-petition financing,
executing contracts, sale of assets, insurance, etc;
c. represent the Debtor in hearings and other contested
matters;
d. formulate a plan of reorganization; and
e. provide all other matters needed for reorganization.
Brown Law Firm will be paid at these rates:
Ron D. Brown, Esq. $350 per hour
Associate $250 per hour
Paralegal $75 per hour
The firm received from the Debtor an advance retainer of $5,000.
Ron Brown, Esq., at Brown Law Firm, disclosed in a court filing
that all members of his firm are "disinterested" within the meaning
of Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Ron D. Brown, Esq.
Brown Law Firm, P.C.
715 S. Elgin Ave
Tulsa, OK 74120
Tel: (918) 585-9500
Fax: (866) 552-4874
Email: ron@ronbrownlaw.com
About Iroquois-Huey, LLC
Iroquois-Huey, LLC filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. N.D. Okla. Case No.
24-10801) on June 24, 2024, listing up to $50,000 in assets and
$100,001 to $500,000 in liabilities.
Judge Terrence L Michael presides over the case.
Ron D. Brown, Esq. at Brown Law Firm, P.C. represents the Debtor as
counsel.
JOE'S DRAIN: Unsecureds Will Get 12.9% to 15% over 3 Years
----------------------------------------------------------
Joe's Drain Cleaning, LLC, filed with the U.S. Bankruptcy Court for
the District of Ohio a Plan of Reorganization dated June 20, 2024.
The Debtor is a plumbing contractor specializing in drain cleaning
located at 1771 Victor Road NW, Lancaster, Ohio 43130. Joseph B.
Conway is the sole member of the Debtor.
The Debtor has experienced financial hardship due to several
causes. First, the Debtor experienced a significant decrease in
business during the COVID 19 pandemic. In June 2020, the Debtor
obtained an Economic Injury Disaster Loan ("EIDL") from the U.S.
Small Business Administration ("SBA").
The EDL loan enabled the Debtor to survive the pandemic, but later,
in 2023, the Debtor experienced cash flow problems, and it turned
to merchant cash advance lenders (the "MCA Lenders") for financing
to fund operating costs. Despite the representations of the MCA
Lenders, the MCA financing did not help the Debtor get out of debt.
Indeed, the MCA Lenders increased their daily or weekly draws
against the Debtor's bank accounts, leaving the Debtor more
strapped for cash.
After filing, the Debtor focused on stabilizing its business
operations and growing its business. In addition, the Debtor's
management identified certain equipment which is not essential to
the Debtor's operations, which the Debtor will surrender to the
secured creditor, reducing the amount of secured debt going
forward. The Debtor has changed its online marketing approach and
is hopeful that the new marketing will increase sales in the near
future.
This Plan of Reorganization under Chapter 11 of the Bankruptcy Code
proposes to pay creditors of the Debtor from cash flow from future
income.
Non-priority unsecured creditors holding allowed claims will
receive distributions which the Debtor estimates to be between 12.9
and 15 cents on the dollar. This Plan also provides for the payment
in full of all administrative and priority claims.
Class 3 consists of Non-Priority Unsecured Claims. Holders of all
allowed claims not entitled to priority and not included in Classes
2.1 through 2.4 shall be deemed to have Allowed Unsecured Claims in
this Class 3 and will be paid the projected disposable income of
the Debtor, after the payment of Classes 2.1 through 2.4, over
three years in the total amount of $177,761.00, in quarterly
disbursements. The Debtor estimates that these disbursements will
total approximately 12.9% to 15% of Allowed Unsecured Claims in
this class, depending on the allowance of unsecured deficiency
claims.
Payments to be made under this Plan will be made from the funds of
the Debtor existing on the Effective Date, as well as funds
generated subsequent to the Effective Date from the Debtor's
operations. Funds may also be available from the Debtor's pursuit
of any avoidance actions available to it under Chapter 5 of the
Bankruptcy Code, should the Debtor choose to pursue any such
claims.
A full-text copy of the Plan of Reorganization dated June 20, 2024
is available at https://urlcurt.com/u?l=hw0N2V from
PacerMonitor.com at no charge.
Attorneys for the Debtor:
Myron N. Terlecky, Esq.
John W. Kennedy, Esq.
Strip, Hoppers, Leithart,
McGrath & Terlecky Co., LPA
575 South Third Street
Columbus, Ohio 43215-5759
Tel: (614) 228-6345
Fax: (614) 228-6369
Email: mnt@columbuslawyer.net
jwk@columbuslawyer.net
About Joe's Drain Cleaning
Joe's Drain Cleaning, LLC, a company in Lancaster, Ohio, offers
drain unblocking, drain cleaning, drain repair, and drain
maintenance services.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Ohio Case No. 24-51041) on March 22,
2024. In the petition signed by Joseph Conway, sole member, the
Debtor disclosed $506,649 in assets and $1,031,345 in liabilities.
Judge John E. Hoffman, Jr. oversees the case.
John W. Kennedy, Esq., at Strip, Hoppers, Leithart, McGrath &
Terlecky Co., LPA represents the Debtor as legal counsel.
JUMBO SEAFOOD: Unsecured Creditors to Get Nothing in Plan
---------------------------------------------------------
Jumbo Seafood Restaurant, Inc., filed with the U.S. Bankruptcy
Court for the District of Columbia a Plan of Liquidation for Small
Business dated June 25, 2024.
A pillar of the District of Columbia's business and cultural
communities for decades, Jumbo Seafood was formally organized in
May 1986 and has proudly operated in the heart of Chinatown ever
since.
Anthony "Tony" Cheng has tirelessly overseen Jumbo Seafood's
kitchen since opening, with his wife, Julie Cheng. The Debtor's
building has long been owned by a separate, insider entity, Cheng &
Company L.L.C. (the "Landlord"), and, regrettably, used as cross
collateral for other regional investments.
Through the hard work of many—ranging from the Landlord's trustee
and his counsel, to a chief restructuring officer at the helm of
Jumbo Seafood, to the insolvency professionals in both this case
and the Landlord's case—the gambit, thankfully, worked. The
Landlord's premises have now been sold to a new owner that, upon
casting the winning bid, proclaimed a desire to keep the Debtor in
business.
Numerous creditors of both the Debtor and the Landlord were paid
when that sale closed on June 17, 2024, with $7.4 million changing
hands at the closing table. And, through it all, Jumbo Seafood has
stayed open for business, never suffering the fatalistic step of
closing the doors and always offering passersby an opportunity to
dine in the same esteemed quarters that once hosted Jimmy Carter,
Ronal.
This Plan marks the final stage in the reorganization of Jumbo
Seafood. To ensure the doors remain open for generations to come,
the Debtor will sell substantially all of its assets to a
newly-formed company ("NewCo"), owned by Tony and Julie Cheng.
NewCo will enter into a formal lease with the Landlord's successor
and, in consideration of the asset transfer from the Debtor, will
tender a promissory note in the sum of $200,000.00, payable over
five years in 59 equal monthly installments of $3,333.33, with the
final payment being in the sum of $3,333.53.
This Plan will return to creditors more than $163,000.00 over and
above the liquidation value of the Debtor's assets. The Plan will
also allow secured and priority claims (including administrative
priority claims) to be paid in full. The Plan will not return
monies to general unsecured creditors.
Transparently, the NewCo arrangement is designed to give Jumbo
Seafood a true fresh start. The name on the door will not change
and the transition, to customers and employees, will be seamless.
But after several decades in operation, the Debtor does carry
certain bookkeeping baggage, and reorganizational efforts are
optimized by allowing a new company to emerge from this case.
The total sums to be paid under this Plan are estimated to be as
follows: (i) Class 1 will receive $36,572.69, being the amount of
the secured claim of the District of Columbia. (ii) Class 2 will
receive not less than $122,490.27 (being the sum of the District of
Columbia's priority tax claim and the amount the Debtor believes to
be due to the Internal Revenue Service on account of its priority
tax claims) and not more than $147,916.62 (being the sum of the
District of Columbia's priority tax claim and the amount of a
priority tax claim asserted by the Internal Revenue Service). (iii)
Administrative priority claimants will be paid in full.
It is estimated that administrative priority claims will be in the
approximate sum of $45,000.00, including the claims of the
Subchapter V trustee, the Debtor's chief restructuring office, and
undersigned counsel, which will be paid through (a) a retainer of
$8,874.00 being held by undersigned counsel; (b) cash on hand; (c)
settlement proceeds; and (d) payments made by NewCo under the
promissory note.
Non-priority unsecured creditors holding allowed claims will not
receive distributions hereunder. The Plan also provides for the
payment of administrative and priority claims.
Class 3 consists of General Unsecured Creditors. General unsecured
creditors will take nothing under this Plan. This Class is
impaired.
Class 4 consists of Equity interests in the Debtor. Mr. and Ms.
Cheng will retain their equity interest in the Debtor though, as
observed passim, the Debtor is being liquidated through this Plan.
Within 10 business days of the Effective Date, the Debtor will
enter into a contract to convey substantially all of the Debtor's
assets, excepting cash on hand and litigation rights, to NewCo. In
exchange for the conveyance, NewCo will furnish the Debtor will a
promissory note in the sum of $200,000.00, payable over five years
in 59 equal monthly installments of $3,333.33, with the final
payment being in the sum of $3,333.53. The promissory note will be
secured by a UCC financing statement encumbering substantially all
the assets of NewCo.
A full-text copy of the Plan of Liquidation dated June 25, 2024 is
available at https://urlcurt.com/u?l=Lso2Ly from PacerMonitor.com
at no charge.
Counsel for the Debtor:
Maurice B. VerStandig, Esq.
THE BELMONT FIRM
1050 Connecticut Avenue, NW, Suite 500
Washington, DC 20036
Phone: (202) 991-1101
E-Mail: mac@dcbankruptcy.com
About Jumbo Seafood Restaurant
Jumbo Seafood Restaurant, Inc., filed its voluntary petition for
relief under Chapter 11 of the Bankruptcy Code (Bankr. D.C. Case
No. 24-00090) on March 27, 2024, listing $50,001 to $100,000 in
assets and $500,001 to $1 million in liabilities.
Judge Elizabeth L Gunn presides over the case.
Maurice Belmont VerStandig, Esq. at The Verstandig Law Firm, LLC,
is the Debtor's counsel.
KPM INVESTMENT: Unsecureds to Split $729K over 60 Months
--------------------------------------------------------
KPM Investment O, LLC and KPM Investment B, LLC filed with the U.S.
Bankruptcy Court for the Northern District of Georgia a Disclosure
Statement for Joint Plan of Reorganization dated June 24, 2024.
KPM B is the 100% owner of the membership interests of KPM O (the
"Membership Interest"). KPM B has no operations, assets, or
business other than holding the Membership Interest and has no bank
accounts.
KPM O owns four apartment complexes located at the following
addresses: 6295 Oakley Road, Union City, Georgia 30291 ("Oakley
Woods"); 6200 Hillandale Drive, Lithonia, Georgia, 30058 ("Autumn
Cove"); 7393 Tara Road, Jonesboro, Georgia 30236 ("Pine Knoll");
and 1308 Rhodes Lane, Griffin, Georgia 30224 ("Garden Gate, " and
collectively, the "Properties").
KPM B wholly owns KPM O, which is its only asset, and KPM B's only
creditor is based on guaranteed debt to a common creditor,
Wilmington Trust, National Association, as Trustee for the Benefit
of the Holders of Corevest American Finance 2021-2 Trust Mortgage
Pass-Through Certificates.
The Debtors believe that substantive consolidation as proposed in
the Plan is not only appropriate under the facts and circumstances
of these Chapter 11 Cases, but it is in the best interests of all
Holders of Allowed Claims in the Consolidated Debtor.
Notwithstanding the foregoing, (i) the treatment proposed by each
Debtor to the Holders of Allowed Secured Claims against such Debtor
after the Effective Date shall be unaffected by such substantive
consolidation, (ii) any Liens that are maintained, recognized, or
preserved under the Plan shall be unaffected by the substantive
consolidation, and (iii) any claims under or with respect to any
insurance policy of any Debtor (or any right to the proceeds of any
such policy or policies) shall be unaffected by the substantive
consolidation.
Class 12 consists of all general unsecured claims against the
Debtor. Holders of Class 12 claims shall be paid $729,117.77 over
60 months, to be paid a pro rata payment with payment commencing on
the 10th of the month following the Effective Date and continuing
by the 10th day of each subsequent month that will end on the 60th
month anniversary of the Effective Date for a total of 60
payments.
Payments on Class 12 claims shall be mailed to the address of the
creditor on the proof of claim (or, if allowed pursuant to the
schedules, to the address on the schedules), unless the creditor
files a change of address notice with the Court. Any check mailed
to the proper address and returned by the post office as
undeliverable, or not deposited within 180 days, shall be void and
the funds may be retained by the Debtor. Class 12 is impaired.
Class 13 consists of Equity Security Holders of Debtors. The
Reorganized Debtors shall not make any distributions or pay any
dividends related to any Equity Interests unless and until all
distributions related to all Allowed Claims in Classes 1 through 12
have been made in full. Holders of Equity Interests in the Debtors
will retain those interests.
The source of funds for payments pursuant to the Plan will be the
profits of the Reorganized Debtors' business operations. The Plan
provides that Debtors shall act as the Disbursing Agent to make
payments under the Plan unless Debtors appoint some other entity to
do so. Debtors may maintain bank accounts under the confirmed Plan
in the ordinary course of business. Debtors may also pay ordinary
and necessary expenses of administration of the Plan in due course.
A full-text copy of the Disclosure Statement dated June 24, 2024 is
available at https://urlcurt.com/u?l=wENPK0 from PacerMonitor.com
at no charge.
Counsel to the Debtors:
William A. Rountree, Esq.
Rountree Leitman Klein & Geer, LLC
Century Plaza I
2987 Clairmont Road, Suite 350
Atlanta, GA 30329
Telephone: (404) 584-1238
Facsimile: (404) 704-0246
Email: wrountree@rlkglaw.com
About KPM Investment O
KPM Investment O, LLC is engaged in activities related to real
estate.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Ga. Case No. 24-53073) on March 25,
2024. In the petition signed by Isaac Perlmutter, authorized
representative, the Debtor disclosed up to $50,000 in assets and up
to $50 million in liabilities.
Judge Paul W. Bonapfel oversees the case.
William Rountree, Esq., at ROUNTREE, LEITMAN, KLEIN & GEER, LLC, is
the Debtor's legal counsel.
LAVIE CARE: Seeks to Hire Chapman and Culter as Special Counsel
---------------------------------------------------------------
LaVie Care Centers, LLC and its affiliates seek approval from the
U.S. Bankruptcy Court for the Northern District of Georgia to hire
Chapman and Culter LLP as its special counsel.
Chapman will be engaged for the purpose of providing legal counsel
to the Independent Manager, as independent fiduciary of each of the
Debtors, including by providing advice and representation regarding
any estate claims and causes of action that may be available to the
Debtors. In addition, Chapman will provide any such other services
determined by the Independent Manager to be appropriate under the
circumstances.
The current rates for Chapman bankruptcy and restructuring
attorneys presently range from $725 to $1,450 per hour, and the
current rates for paralegals vary from $365 to $485 per hour.
Chapman is a "disinterested person" as defined in Bankruptcy Code
section 101(14), as disclosed in the court filings.
The firm can be reached through:
Larry Halperin
Chapman and Cutler LLP
1270 Avenue of the Americas, 30th Floor
New York, NY 10020-1708
Telephone: (212) 655-6000
About LaVie Care Centers
LaVie Care Centers, LLC is the parent company of skilled nursing
facility operators and providers, with facilities primarily located
in Mississippi, North Carolina, Pennsylvania and Virginia. The
company operates 43 licensed facilities, with 4,300 beds, providing
short-term rehabilitation, comprehensive post-acute care, and
long-term care to its residents.
On June 2 and 3, 2024, LaVie Care Centers and 281 affiliates filed
voluntary petitions for relief under Chapter 11 of the Bankruptcy
Code (Bankr. N.D. Ga. Lead Case No. 24-55507), before Judge Paul
Baisier in Atlanta.
The Debtors tapped McDermott Will & Emery, LLP as legal counsel;
Stout Capital, LLC as investment banker; and Ankura Consulting as
financial advisor. M. Benjamin Jones, senior managing director at
Ankura, serves as the Debtors' chief restructuring officer.
Kurtzman Carson Consultants, LLC is the claims agent, and maintains
the page http://www.kccllc.com/LaVie
The U.S. Trustee for Region 21 appointed an official committee to
represent unsecured creditors in the Debtors' Chapter 11 cases.
LEVINTE INC: Case Summary & Eight Unsecured Creditors
-----------------------------------------------------
Debtor: Levinte, Inc.
5 Stonebrook Court
Barrington, IL 60010
Chapter 11 Petition Date: July 7, 2024
Court: United States Bankruptcy Court
Northern District of Illinois
Case No.: 24-09868
Judge: Hon. Jacqueline P Cox
Debtor's Counsel: David Freydin, Esq.
LAW OFFICES OF DAVID FREYDIN
8707 Skokie Blvd., Suite 305
Skokie, IL 60077
Tel: 888-536-6607
Fax: 866-575-3765
E-mail: david.freydin@freydinlaw.com
Total Assets: $1,330,900
Total Liabilities: $2,949,040
The petition was signed by Constantin Levinte as president.
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/M46S67Y/Levinte_Inc__ilnbke-24-09868__0001.0.pdf?mcid=tGE4TAMA
LITTLE FALLS: Fairbridge Seeks to Sell NY Property by Auction
-------------------------------------------------------------
Fairbridge Real Estate Investment Trust, LLC, a creditor of Little
Falls Garden Apartments, LLC, filed a motion seeking court approval
to sell the company's real property in New York by auction.
Little Falls owns a multiple-dwelling property located at 759 East
Monroe Street Extension, Little Falls, N.Y.
In May, Fairbridge executed a sale contract with VPM Estate, LLC, a
New York limited liability company, which offered $3.357 million
for the property and agreed to serve as the stalking horse bidder.
A stalking horse bidder sets the price floor for bidding in an
auction.
In the event it is not selected as the winning bidder at an
auction, VPM will receive a break-up fee which is 3% of the
proposed purchase price under the stalking horse agreement, and
expense reimbursement of up to $25,000.
Fairbridge, through its broker, will hold an auction if it receives
a competing offer of at least $3.5 million. The minimum bid
increment is $50,000.
Fairbridge may, but is not required to, submit an initial credit
bid of up to $3,329,785.49, or such other amount as may be
determined by the bankruptcy court before the auction, and pay all
other senior liens, claims and encumbrances at closing.
To the extent that there is a competing offer, Fairbridge may
increase its credit bid to include post-petition interest and
expenses.
The winning bidder at the auction must consummate the sale within
30 days after the bankruptcy court approves the sale.
The U.S. Bankruptcy Court for the Southern District of New York
will hold a hearing on July 9 to approve the motion.
About Little Falls Garden Apartments
Little Falls Garden Apartments, LLC owns a multiple-dwelling
property located at 759 East Monroe Street Extension, Little Falls,
N.Y., valued at $5.25 million based on rental income. The company
is based in Mountain Dale, N.Y.
Little Falls filed its Chapter 11 petition (Bankr. S.D.N.Y. Case
No. 23-36006) on December 4, 2023, with $5,249,920 in assets and
$2,602,839 in liabilities. David Raven, sole member, signed the
petition.
Judge Cecelia G. Morris oversees the case.
Raymond Ragues, Esq., at Ragues PLLC is the Debtor's legal counsel.
LIVEONE INC: Files Prospectus for Warrants, Common Stock Offering
-----------------------------------------------------------------
LiveOne, Inc. filed a preliminary prospectus on Form S-3 with the
U.S. Securities and Exchange Commission relating to the offer and
resale from time to time of:
(i) warrants to purchase up to an aggregate of 1,300,000
shares of common stock, $0.001 par value per share, of LiveOne,
Inc., exercisable at a price of $2.10 per share, and
(ii) up to 1,300,000 shares of common stock issuable upon the
exercise of the Warrants, by the selling stockholders -- Harvest
Small Cap Partners, L.P and Harvest Small Cap Partners Master, Ltd.
-- The Warrants were issued to the Selling Stockholders in a
private placement pursuant to the Letter Agreements entered into by
the Company with each of the Selling Stockholders on April 1,
2024.
The Selling Stockholders may sell all or a portion of the
Securities from time to time, in amounts, at prices and on terms
determined at the time of sale. The Selling Stockholders may also
sell the Shares under Rule 144 under the Securities Act of 1933, as
amended, if available, rather than under this prospectus.
"We will not receive any proceeds from the sale or other
disposition of the Securities by the Selling Stockholders. However,
we will receive proceeds from the exercise of the Warrants if the
Warrants are exercised and the holders of such Warrants pay the
exercise price in cash upon such exercise and do not utilize the
cashless exercise provision of the Warrants. We will bear all other
costs, fees and expenses incurred in effecting the registration of
the shares covered by this prospectus. All selling and other
expenses incurred by the Selling Stockholders will be borne by the
Selling Stockholders," LiveOne said.
"We are registering the offer and sale of the Securities pursuant
to certain registration rights granted to the Selling Stockholders.
The registration of the Securities does not necessarily mean that
any Selling Stockholder will offer or sell any of their Securities
or exercise their Warrants. The timing and amount of any sale or
exercise is within the sole discretion of the Selling Stockholders.
We are not offering for sale any shares of our common stock
pursuant to this prospectus," the Company said.
A full-text copy of the preliminary prospectus is available at
https://tinyurl.com/3cr9p3af
About LiveOne
Headquartered in Los Angeles, Calif., LiveOne, Inc. (NASDAQ: LVO)
(formerly known as LiveXLive Media, Inc.) is engaged in the
acquisition, distribution and monetization of live music, Internet
radio, podcasting and music-related streaming and video content.
Through its comprehensive service offerings and innovative content
platform, the Company provides music fans the ability to listen,
watch, attend, engage and transact. Serving a global audience, the
Company's mission is to bring the experience of live music and
entertainment to consumers wherever music and entertainment is
watched, listened to, discussed, deliberated or performed around
the world.
As of March 31, 2024, the Company had $63.86 million in total
assets, $57.31 million in total liabilities, $4.96 million in
mezzanine equity, and $1.60 million in equity.
Los Angeles, Calif.-based Macias Gini & O'Connell LLP, the
Company's auditor since 2022, issued a "going concern"
qualification in its report dated July 1, 2024, citing that the
Company has suffered recurring losses from operations, negative
cash flows from operating activities and has a net capital
deficiency. These matters raise substantial doubt about the
Company's ability to continue as a going concern.
MENOTTI ENTERPRISE: Unsecureds Will Get 20% over 36 Months
----------------------------------------------------------
Menotti Enterprise LLC filed with the U.S. Bankruptcy Court for the
Southern District of New York a Small Business Plan of
Reorganization under Subchapter V dated June 20, 2024.
The Debtor is an independent family-owned and operated construction
site safety management consulting firm, certified by both the State
and City of New York as a "Service Disabled Veteran Owned" and
"Minority Owned" business enterprise.
The cause of the Debtor's bankruptcy filing was, among other
things, the collection efforts of creditor Master Fund LLC. Master
Fund demanded turnover of the receivables due to the Debtor from a
number of its customers and they complied with its request. The
loss of income that resulted from this demand caused a significant
impact on the Debtor's cash flow.
Since the Petition Date, the Debtor has been able to stabilize its
operations despite a number of challenges. Despite the bankruptcy
filing, the Debtor continued to face the failure of a number of its
customers to remit payment under their respective contracts. The
Debtor was forced to seek an order from the Bankruptcy Court
confirming the existence of the automatic stay and compelling a
creditor to cease collecting upon its judgment.
The Debtor terminated its contract with ADP TotalSource so that it
could reduce its payroll costs. The Debtor was also required to
locate an new insurance premium lender to ensure no interruption in
its insurance coverage. The Debtor has faced a number of challenges
that have required its immediate attention and the dedication of
its resources but it has emerged from these first few months since
the Petition Date with a stronger and stable base for its
operations. The Debtor believes it will be able continue to operate
profitably and meet the terms of its Plan.
Class 2 shall consist of Allowed General Unsecured Claims. Holders
of Allowed Class 2 General Unsecured Claims shall receive up to 20%
of their Allowed Class 2 Claims, without interest, from the
remaining balance of the Plan Funds, after payment in full of all
Unclassified Claims and Allowed Professional Fee Claims. Payments
to the Allowed Class 2 Claims shall be paid in equal quarterly
installments for the 36 month period from the Effective Date after
the payment of Unclassified Claims and Allowed Professional Fee
Claims are completed. The holders of the Allowed Class 2 Claims are
impaired.
Class 3 shall consist of the Debtor's Interest Holders Steven
Menotti and Michael Menotti. The Debtor's Interest Holders will
retain their interest in the Debtor. The Class 3 Interest Holders
are unimpaired pursuant to Section 1124 of the Bankruptcy Code and
deemed to have accepted the Plan.
The Plan shall be funded from the Debtor's Cash on hand and
disposable income over the 36 month period following the Effective
Date.
A full-text copy of the Plan of Reorganization dated June 20, 2024
is available at https://urlcurt.com/u?l=qiFuhG from
PacerMonitor.com at no charge.
Counsel to the Debtor:
Norma E. Ortiz, Esq.
ORTIZ & ORTIZ, LLP
35-10 Broadway, Ste. 202
Astoria, NY 11106
Telephone: (718) 522-1117
Facsimile: (718) 596-1302
Email: email@ortizandortiz.com
About Menotti Enterprise
Menotti provides safety training, consulting, and onsite safety
professionals to ensure construction worksites are safe and
compliant.
Menotti Enterprise, LLC filed its voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y. Case No.
24-22242) on March 22, 2024, listing $1 million to $10 million in
both assets and liabilities. The petition was signed by Michael J.
Menotti as president.
Judge Sean H. Lane presides over the case.
Norma E. Ortiz, Esq. at Ortiz & Ortiz, LLP represents the Debtor as
counsel.
MR. KNICKERBOCKER: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Mr. Knickerbocker, Inc.
384 College Avenue
Clemson, SC 29631
Business Description: Mr. Knickerbocker is a retailer of apparel &
accessories.
Chapter 11 Petition Date: July 5, 2024
Court: United States Bankruptcy Court
District of South Carolina
Case No.: 24-02433
Judge: Hon. Helen E Burris
Debtor's Counsel: W. Harrison Penn, Esq.
PENN LAW FIRM LLC
1517 Laurel Street
Columbia, SC 29201
Tel: (803) 771-8836
Email: hpenn@pennlawsc.com
Estimated Assets: $100,000 to $500,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by John A. Yeomans, vice president.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 20 largest unsecured creditors is available
for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/TK4A2PI/Mr_Knickerbocker_Inc__scbke-24-02433__0001.0.pdf?mcid=tGE4TAMA
NEONODE INC: All Three Proposals Approved at Annual Meeting
-----------------------------------------------------------
Neonode Inc. disclosed in a Form 8-K filed with the Securities and
Exchange Commission that on July 5, 2024, it held its 2024 Annual
Meeting of Stockholders at which the stockholders:
(1) re-elected Mrs. Cecilia Edstrom to the Board of Directors
for a three-year term as a Class I director;
(3) indicated their approval, on an advisory basis, of the
compensation of the Company's named executive officers; and
(4) indicated their choice of the option of every one year as
the preferred frequency for the advisory vote of the compensation
of the Company's named executive officers.
On June 24, 2024, the Company filed a Current Report on Form 8-K
announcing that on May 20, 2024, the partners and professional
staff of KMJ Corbin & Company LLP, which was engaged as the
independent registered public accounting firm of the Company,
joined Crowe LLP. As a result, KMJ resigned as the Company's
independent registered public accounting firm on June 18, 2024, and
the Audit Committee of the Company's Board of Directors approved
the appointment of Crowe as the Company's independent registered
public accounting firm for the Company's fiscal year ending Dec.
31, 2024.
As a result of the resignation of KMJ, the Company withdrew
Proposal 2 from the agenda of the Company's 2024 Annual Meeting of
Stockholders, which requested that the Company's stockholders
ratify the appointment of KMJ as the Company's independent
registered public accounting firm for the fiscal year ending Dec.
31, 2024. In conjunction with the Company's 2025 Annual Meeting of
Stockholders, the Company intends to ask stockholders to ratify the
appointment of Crowe as the Company's independent registered public
accounting firm to audit the Company's financial statements for the
fiscal year ending Dec. 31, 2025.
About Neonode
Neonode Inc. (NASDAQ:NEON) is a publicly traded company,
headquartered in Stockholm, Sweden and established in 2001. The
Company provides advanced optical sensing solutions for touch,
contactless touch, and gesture sensing. The Company also provides
software solutions for machine perception that feature advanced
machine learning algorithms to detect and track persons and objects
in video streams for cameras and other types of imagers. The
Company bases its contactless touch, touch, and gesture sensing
products and solutions using its zForce technology platform and its
machine perception solutions on its MultiSensing technology
platform. The Company markets and sells its solutions to customers
in many different markets and segments including, but not limited
to, office equipment, automotive, industrial automation, medical,
military and avionics.
Neonode reported a net loss attributable to the Company of $10.12
million for the year ended Dec. 31, 2023, a net loss attributable
to the Company of $4.88 million for the year ended Dec. 31, 2022, a
net loss attributable to the Company of $6.45 million for the year
ended Dec. 31, 2021, a net loss attributable to the Company of
$5.61 million for the year ended Dec. 31, 2020, and a net loss
attributable to the Company of $5.30 million for the year ended
Dec. 31, 2019. For the three months ended March 31, 2024, the
Company reported a net loss of $2.08 million.
NEXTDECADE CORP: Unit Issues $1.115B Senior Secured Notes due 2047
------------------------------------------------------------------
NextDecade Corporation announced July 1, 2024, that its subsidiary
Rio Grande LNG, LLC has issued $1.115 billion of senior secured
notes in a private placement. These senior secured notes will
accrue interest at a fixed rate of 6.58%. Proceeds from the notes
will be used to reduce outstanding borrowings and commitments under
Rio Grande LNG's existing term loan facilities for Phase 1 at the
Rio Grande LNG Facility.
The senior secured notes will be amortized over a period of 18
years beginning in September 2029, with a final maturity in
September 2047. The senior secured notes rank pari passu with Rio
Grande LNG's existing senior secured financings.
Including this transaction, the Company has now refinanced a total
of over $1.85 billion of the original $11.1 billion Rio Grande LNG
term loan facilities since a positive final investment decision was
reached on Phase 1 at the Rio Grande LNG Facility in July 2023.
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.
NEXTDECADE CORP: Unit Issues $1.115BB Senior Secured Notes Due 2047
-------------------------------------------------------------------
NextDecade Corporation announced that its subsidiary Rio Grande
LNG, LLC has issued $1.115 billion of senior secured notes in a
private placement.
The senior secured notes will accrue interest at a fixed rate of
6.58%. Proceeds from the notes will be used to reduce outstanding
borrowings and commitments under Rio Grande LNG's existing term
loan facilities for Phase 1 at the Rio Grande LNG Facility. The
senior secured notes will be amortized over a period of 18 years
beginning in September 2029, with a final maturity in September
2047. The senior secured notes rank pari passu with Rio Grande
LNG's existing senior secured financings.
Including this transaction, the Company has now refinanced a total
of over $1.85 billion of the original $11.1 billion Rio Grande LNG
term loan facilities since a positive final investment decision was
reached on Phase 1 at the Rio Grande LNG Facility in July 2023.
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.
OCEAN POWER: Partners With Unique to Deploy USV in the Middle East
------------------------------------------------------------------
Ocean Power Technologies, Inc. announced July 2, 2024, it has
partnered with Unique Group, a UAE headquartered global innovator
in subsea technologies and engineering, offering multiple products
and services to customers in a range of industry sectors. Unique
has more than 600 employees and 20 operational bases around the
world. Unique Group and OPT will collaborate to deploy OPT's
existing WAM-V Unmanned Surface Vehicles ("USV") in the UAE and
other countries in the Gulf Collaboration Council ("GCC") region.
The Company said that integrating OPT's commercially available
vehicles with Unique's leading position in the offshore energy
industry in the UAE will accelerate the adoption of USVs in the
region. Unique Group's knowledge of the local industry and
footprint in the region enables maintenance and services to be
carried out more efficiently.
Philipp Stratmann, OPT's CEO, expressed his enthusiasm about this
partnership, stating, "Working with Unique Group will further
accelerate our efforts to deploy USVs globally. We are very
excited about the prospects of expanding into the UAE and applaud
the local industry's forward thinking in adopting autonomous
technologies."
Jack Dougherty, Global Head of USV at Unique Group, added, "Unique
Group is excited to announce our strategic partnership with Ocean
Power Technologies (OPT). By leveraging our extensive regional
experience and advanced engineering capabilities, we are committed
to helping OPT develop a GCC-specific WAM-V 22. This next
generation vessel will be designed to meet the regions stringent
safety regulations while ensuring environmentally conscious and
efficient operations."
About Ocean Power Technologies
Headquartered in Monroe Township, New Jersey, OPT --
http://www.OceanPowerTechnologies.com/-- provides ocean data
collection and reporting, marine power, offshore communications,
and Maritime Domain Awareness System ("MDA" or "MDAS") products,
integrated solutions, and consulting services. The Company offers
its products and services to a wide range of customers, including
those in government and offshore energy, oil and gas, construction,
wind power and other industries. The Company is involved in the
entire life cycle of product development, from product design
through manufacturing, testing, deployment, maintenance and
upgrades, while working closely with partners across its supply
chain. The Company also works closely with its third-party
partners that provide it with, among other things, software,
controls, sensors, integration services, and marine installation
services. The Company's solutions are based on proprietary
technologies that enable autonomous, zero or low carbon emitting,
and cost-effective data collection, analysis, transportation and
communication.
Ocean Power said in its Quarterly Report for the period ended Jan.
31, 2024, that "For the nine months ended January 31, 2024 and
through the date of filing of this Form 10-Q, management has not
obtained any material additional capital financing. Management
believes the Company's current cash balance at January 31, 2024 of
$4.9 million and short term investments balance of $4.4 million may
not be sufficient to fund its planned expenditures through at least
March 2025. These conditions raise substantial doubt about the
Company's ability to continue as a going concern. The ability to
continue as a going concern is dependent upon the Company's
operations in the future and/or obtaining the necessary financing
to meet its obligations and repay its liabilities arising from
normal business operations when they become due."
OCEANVIEW BEACH: Case Summary & Eight Unsecured Creditors
---------------------------------------------------------
Debtor: Oceanview Beach Apartments 2018, L.P.
325 Stimson Avenue
Pismo Beach, CA 93449
Business Description: The Debtor is a Single Asset Real Estate
as defined in 11 U.S.C. Section 101(51B).
The Debtor is the fee simple owner of a real
property located at 1273 Belridge Street,
Oceano CA 93445 valued at $4.95 million.
Chapter 11 Petition Date: July 3, 2024
Court: United States Bankruptcy Court
Central District of California
Case No.: 24-10746
Judge: Hon. Ronald A Clifford III
Debtor's Counsel: Robert M. Yaspan, Esq.
LAW OFFICES OF ROBERT M. YASPAN
21700 Oxnard Street, Suite 1750
Woodland Hills, CA 91367
Tel: 818-905-7711
Fax: 818-501-7711
E-mail: ryaspan@yaspanlaw.com
Total Assets: $4,950,117
Total Liabilities: $2,758,980
The petition was signed by James Harris, Trustee, Pismo Oceano
Management Trust, General Partner.
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/LQERZXQ/Oceanview_Beach_Apartments_2018__cacbke-24-10746__0001.0.pdf?mcid=tGE4TAMA
ONCOCYTE CORP: All Three Proposals Passed at Annual Meeting
-----------------------------------------------------------
Oncocyte Corporation disclosed in a Form 8-K filed with the
Securities and Exchange Commission on July 5, 2024, that on June
28, 2024, it held its 2024 Annual Meeting of Shareholders virtually
at which the shareholders:
(1) elected Joshua Riggs, Andrew Arno, Andrew J. Last, and Louis
E. Silverman as directors to serve until the annual meeting of
shareholders to be held in 2025 or until his earlier death,
resignation, or removal;
(2) ratified the appointment of Marcum LLP as the Company's
independent registered public accounting firm for the fiscal year
ending Dec. 31, 2024; and
(3) approved, on a non-binding advisory basis, the Company's
named executive officer compensation for the year ended Dec. 31,
2023.
On July 1, 2024, the Board of Directors of the Company determined
that Mr. Arno qualifies as "independent" in accordance with Rule
5605(a)(2) of The Nasdaq Stock Market LLC, as well as the
additional independence standards for audit committee and
compensation committee members, under Nasdaq Rule 5605(c)(2) and
Rule 10A-3 under the Securities Exchange Act of 1934, as amended,
and under Nasdaq Rule 5605(d)(2), respectively.
As such, the Company's Chairman of the Board, Mr. Arno, is
independent, and, as of July 1, 2024, the members of each standing
committee are as follows:
Audit Committee:
Andrew Arno
Andrew J. Last - Chair
Louis E. Silverman
Compensation Committee:
Andrew Arno
Andrew J. Last
Louis E. Silverman - Chair
Nominating/Corporate Governance Committee:
Andrew Arno - Chair
Andrew J. Last
Louis E. Silverman
About Oncocyte Corp.
Irvine, Calif.-based Oncocyte Corporation, incorporated in 2009 in
the state of California, is a precision diagnostics company focused
on developing and commercializing proprietary tests in three areas:
VitaGraft is a blood-based solid organ transplantation monitoring
test, DetermaIO is a gene expression test that assesses the tumor
microenvironment to predict response to immunotherapies, and
DetermaCNI is a blood-based monitoring tool for monitoring
therapeutic efficacy in cancer patients.
Costa Mesa, CA-based Marcum LLP, the Company's auditor since 2023,
issued a "going concern" qualification in its report dated April
15, 2024, citing that the Company has incurred operating losses and
negative cash flows since inception 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.
PARFUMS HOLDING: Moody's Withdraws B3 CFR Following Debt Repayment
------------------------------------------------------------------
Moody's Ratings has withdrawn Parfums Holding Company, Inc.'s
ratings including the company's B3 Corporate Family Rating, the
B3-PD Probability of Default Rating, and the B3 ratings on the
company's backed senior secured credit facility, consisting of a
revolving credit facility and a first lien term loan. The rating
outlook was stable previously and has also been withdrawn. The
rating action follows Parfums' full repayment of its previously
rated senior secured debt.
RATINGS RATIONALE
Moody's have withdrawn the ratings because Parfums' debt previously
rated by Moody's Ratings has been fully repaid.
Parfums Holding Company, Inc. headquartered in Stamford, CT,
develops, markets and sells fragrance, bath care and specialty bath
and hair care products to mass market consumers. Key brands include
Dr. Teal's, Cantu, Body Fantasies, Eylure, BODman, and Bodycology.
Parfums has been majority-owned by CVC Partners since a leveraged
buyout in 2017 and the company generated revenues of $585 million
for the 12-month ending March 31, 2024.
PBF HOLDING: Fitch Affirms 'BB' LongTerm IDR, Outlook Stable
------------------------------------------------------------
Fitch Ratings has affirmed PBF Holding Company LLC's (PBFH)
Long-Term Issuer Default Rating (IDR) at 'BB'. Fitch has also
affirmed PBFH's revolving credit facility at 'BBB-'/'RR1' and its
senior unsecured notes at 'BB'/'RR4'. The Rating Outlook is
Stable.
PBFH's rating is driven by a strong capital structure and leverage
profile for the rating level, strong geographic diversification,
and its effective strategy to manage Renewable Identification
Number (RIN) liabilities through-the-cycle. Offsetting factors
include minimal non-refining diversification coupled with volatile
refining sector conditions, the threat of increased regulatory
obligations, and a relatively higher cost structure to its peers.
The Stable Outlook reflects Fitch's expectation that refining
conditions will stabilize in the near term and effective management
of regulatory liabilities through-the-cycle
KEY RATING DRIVERS
Manageable Leverage Profile: PBF Holding's credit quality is
underpinned by a leverage profile that Fitch considers manageable
across economic cycles. This is due to a significant reduction in
gross debt driven by strong cash flow generation in 2022 and 2023.
This action in conjunction with termination of PBFH's
intermediation agreement led to halving the company's cost of
capital. Looking ahead, Fitch projects an EBITDA leverage ratio of
1.2x in a typical mid-cycle scenario
Geographic Diversification: While PBFH's refinery operations span
four of the five PADD regions, offering valuable geographic
diversification, the company is more exposed than other refiners
due to its lack of diversification outside the refining sector.
PBFH's geographic diversification provides access to various market
dynamics and crack spread indices. However, its focus on refining
heightens its exposure to market downturns compared to refiners
with a broader mix of countercyclical businesses that can better
weather industry downcycles.
Moderating Refining Margins: PBFH benefitted from historically
strong refining margins in 2022 and 2023. Margins have declined
materially through 1Q24, though Fitch expects spreads to recover as
Fitch enters the summer driving season. Fitch believes supply
shortages due to permanent refinery closures and higher barriers to
entry on the West Coast have the potential to maintain margins
above historical midcycle levels in the long term. Despite this,
the refining sector's inherent cyclicality and emerging challenges,
such as the rise of electric vehicles potentially diminishing
hydrocarbon demand, present ongoing risks.
Varied Capital Allocation: Fitch expects higher capex in 2024 due
to a number of turnarounds executed in Q1, Q2, and Q4. Cash
distributions to members are expected to stabilize post significant
one-off outflows for strategic joint ventures and debt retirements.
While dividends at the PBF Energy level should remain stable, other
payouts will depend on PBFH's performance. No substantial gross
debt reduction is projected during the forecast period. Fitch
expects positive pre-distribution FCF through-the-cycle, but higher
distributions to members could weaken PBFH's cash positioning.
Higher Cost Refineries: PBFH's refineries tend to have a higher
cost structure relative to other refining peers. This was a
significant reason why the company underperformed its peers and
incurred relatively larger cash flow deficits during the 2020-2021
industry downturn. In particular, the high cost structure of PBF
Holding's West Coast refinery reflects a strict regulatory
environment, while the East Coast refinery is exposed to European
imports, with some uncertainty in the medium term due Russian
invasion of Ukraine. Management has committed to reducing unplanned
downtime, such as that which occurred in 2023.
Impact of Regulatory Obligations: Fitch considers PBF Holding's
obligations related to RINs and California's cap-and-trade
manageable in the near term. While refiners generally pass RIN
costs to consumers, this becomes difficult when prices spike
alongside demand reductions. PBF Holding aims for a RIN turnover
cycle of two to four months and benefits from purchasing RINs from
its St. Bernard JV. California's cap-and-trade costs are also
typically passed to buyers. High entry barriers and decreased
supply in California partially offset these regulatory costs.
DERIVATION SUMMARY
PBF Holding has a nameplate throughput capacity of 1,023 mbbl/d,
which compares favorably to peers Delek U.S. Holdings (BB-/Stable)
with 302 mbbl/d and CVR Energy, Inc. (BB-/Stable) with 207 mbbl/d.
PBFH refining operations are geographically well-diversified with
operations in PADDs I, II, III, and V while lacking non-refining
diversification, although the company may receive distributions
from PBFX and the St. Bernard JV under certain conditions.
CVR's refining operation is concentrated in the mid-continent,
although this offset by niche market exposure and diversification
through its non-recourse fertilizer business. Delek has higher
non-refining diversification with logistics and retails segments,
but is limited by its smaller size in more competitive refining
markets. PBFH has a higher cost structure than CVR as indicated by
lower EBITDA margins through-the-cycle.
Investment-grade peers HF Sinclair (BBB-/Stable) with 678 mbbl/d,
Marathon Petroleum (BBB/Stable) with 2,900 mbbl/d, and Valero
Energy (BBB/Stable) with 2,600 mbbl/d all benefit from distinct
credit profile advantages relative to PBFH. MPC and Valero both
operate at significantly larger scale with higher levels of
diversification relative to PBFH. While HF Sinclair's size lags
that of PBFH, it benefits from diversified non-refining businesses.
PBF has lower through-the-cycle EBITDA margins relative to IG peers
which reflects the company's higher cost structure.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer
- West Texas Intermediate (WTI) oil price of $75 in 2024, $65 in
2025, $60 in 2026, and $60 in 2026, and $57 over the long term;
- Gross refining margins at declining to five-year average levels;
- Capex at ~$850 million in 2024, $650 million in 2025 and
thereafter;
- PBF Energy dividend distributions scaled to results
- Turnarounds as described from company guidance
Fitch's Key Assumptions Within Its Stress Case for the Issuer
- West Texas Intermediate (WTI) oil price of $60 in 2024, $32 in
2025, $42 in 2026, and $45 in 2026 and over the long term;
- Gross refining margins at declining below five-year average
levels before recovering in the outer years of the forecast;
- Capex at ~$850 million in 2024, $650 million in 2025 and
thereafter;
- PBF Energy dividend distributions scaled to results
- Turnarounds as described from company guidance
RATING SENSITIVITIES
Factors That Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Increased diversification through scale or non-refining
businesses (i.e., retail, chemicals, etc.);
- Materially improved refinery gross margins relative to peers;
- Through-the-cycle EBITDA Leverage below 1.5x.
Factors That Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Regulatory changes that increase costs, including RINs and other
federal and state regulations;
- Material reduction in liquidity, including reduced bank
commitments or reduction in cash;
- Through-the-cycle EBITDA Leverage above 2.0x.
LIQUIDITY AND DEBT STRUCTURE
Adequate Liquidity Profile: As of March 31, 2024, PBF Holding has
$1.425 billion in cash on hand. The company's asset-based revolving
credit facility of $3.5 billion is undrawn. On July 31, 2023, the
company terminated the inventory intermediation agreement with J.
Aron which reduced cost of capital. Fitch believes PBF Holding's
liquidity profile is adequate for the company in the
short-to-medium term.
Manageable Maturity Schedule: The company has senior unsecured
notes that mature in 2028 and 2030. PBF Holding's revolving credit
facility matures in 2028. Fitch expects PBF Holding to have
adequate capital market access and/or cash on hand and FCF
through-the-cycle to address these maturities in a timely manner.
ISSUER PROFILE
PBF Holding Company LLC owns and operates oil refineries and
related assets with a combined throughput capacity of 1,023,000
barrels per day. PBF Holding's refineries are geographically
diversified with refineries in PADD I, PADD II, PADD III, and PADD
V.
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
PBF Holding Company LLC has an ESG Relevance Score of '4' for
Exposure to Environmental Impacts due to the potential of
operational disruptions from extreme weather events, including PBF
Holding's exposure to hurricanes on the Gulf Coast through its
Chalmette refinery, which has a negative impact on the credit
profile, and is relevant to the rating[s] in conjunction with other
factors.
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Recovery Prior
----------- ------ -------- -----
PBF Holding Company LLC LT IDR BB Affirmed BB
senior unsecured LT BB Affirmed RR4 BB
senior secured LT BBB- Affirmed RR1 BBB-
PINEAPPLE ENERGY: Adjourns Annual Meeting to July 19
----------------------------------------------------
Pineapple Energy Inc. disclosed in a Form 8-K Report filed with the
U.S. Securities and Exchange Commission that on July 1, 2024, the
Company convened and then adjourned its 2024 Annual Meeting of
Shareholders.
A total of 108,546,773 shares of the Company's common stock were
eligible to vote at the Annual Meeting, and 49,447,703 shares of
common stock, or approximately 45.6% of the shares of common stock
eligible to vote, were represented either virtually or by proxy.
Under the Company's bylaws, a quorum requires a majority of the
shares of common stock outstanding and eligible to vote at the
Annual Meeting, which is 54,273,387 shares of common stock. As a
result, a quorum was not achieved for the Annual Meeting. One share
of the Company's Series B Preferred Stock was also represented at
the Annual Meeting, but it does not count for purposes of
establishing quorum. As announced at the Annual Meeting, the Annual
Meeting was adjourned to Friday, July 19, at 10:00 a.m. Central
Time via live webcast at
www.virtualshareholdermeeting.com/PEGY2024.
About Pineapple Energy Inc.
Pineapple Energy Inc. is a growing domestic operator and
consolidator of residential and commercial solar, battery storage,
and grid services solutions. Its strategy is focused on acquiring,
integrating, and growing leading local and regional solar, storage,
and energy services companies nationwide. Pineapple is primarily
engaged in the sale, design, and installation of photovoltaic solar
energy systems and battery storage systems through its Hawaii-based
Hawaii Energy Connection and New York-based SUNation Solar Systems
entities.
As of December 31, 2023, the Company had $58.2 million in total
assets, $37.7 million in total liabilities, and $20.4 million in
total stockholders' equity.
Melville, N.Y.-based UHY LLP, the Company's auditor since 2023,
issued a "going concern" qualification in its report dated March
29, 2024, citing that the Company's current financial position and
the Company's forecasted future cash flows for 12 months beyond the
date of issuance of the financial statements indicate that the
Company will not have sufficient cash to make the first SUNation
earnout payment in the second quarter of 2024 or the first
principal payment of the Long-Term Note due on November 9, 2024,
factors which raise substantial doubt about the Company's ability
to continue as a going concern.
PROFESSIONAL DIVERSITY: Falls Short of Nasdaq Bid Price Requirement
-------------------------------------------------------------------
Professional Diversity Network, Inc. disclosed in a Form 8-K Report
filed with the U.S. Securities and Exchange Commission that the
Company received a written notification from The Nasdaq Stock
Market stating that the Company is not in compliance with Nasdaq
Listing Rule 5550(a)(2) because for the 30 consecutive business
days prior to June 27, 2024, the closing bid price of the Company's
common stock was below the $1.00 per share minimum required for
listing on Nasdaq. The June 2024 Notice has no immediate effect on
the listing or trading of the Company's common stock on the Nasdaq
Capital Market.
As previously disclosed, on May 21, 2024, the Company received a
letter from Nasdaq notifying the Company that it is not in
compliance with the minimum stockholders' equity requirement for
continued listing on the Nasdaq Capital Market. Nasdaq has provided
the Company with 45 calendar days, or until July 5, 2024, to submit
a plan to regain compliance with the minimum stockholders' equity
standard. If the Company's plan to regain compliance is accepted,
Nasdaq may grant an extension of up to 180 calendar days from the
date of the notification letter to evidence compliance.
Stated in the June 2024 Notice, Nasdaq listing rules provide the
Company a compliance period of 180 calendar days (i.e., until
December 24, 2024) in which to regain compliance. The Company will
regain compliance if the closing bid price of its common stock is
$1.00 per share or higher for a minimum period of ten consecutive
business days during this compliance period. In the event the
Company does not regain compliance, it may be eligible for
additional time. To qualify, the Company will be required to meet
the continued listing requirement for market value of publicly held
shares and all other initial listing standards for The Nasdaq
Capital Market, with the exception of the bid price requirement,
and will need to provide written notice of its intention to cure
the deficiency during a second compliance period, by effecting a
reverse stock split if necessary. If the Company meets these
requirements, Nasdaq will inform the Company that it has been
granted an additional 180 calendar days. However, if it appears to
the staff of Nasdaq that the Company will not be able to cure the
deficiency, or if the Company is otherwise not eligible, Nasdaq
will provide notice that its securities will be subject to
delisting.
The Company intends to continue to monitor the closing bid price of
its common stock and to assess its options for maintaining the
listing of its common stock on the Nasdaq Capital Market. The
Company will consider all available options to regain compliance
with the minimum bid price requirement.
About Professional Diversity
Headquartered in Chicago, Illinois, Professional Diversity Network,
Inc. -- https://www.prodivnet.com -- is a global developer and
operator of online and in-person networks that provides access to
networking, training, educational and employment opportunities for
diverse professionals. The Company operates subsidiaries in the
United States including National Association of professional Women
(NAPW) and its brand, International Association of Women (IAW),
which is one of the largest, most recognized networking
organizations of professional women in the country, spanning more
than 200 industries and professions. Through an online platform
and its relationship recruitment affinity groups, the Company
provides its employer clients a means to identify and acquire
diverse talent and assist them with their efforts to comply with
the Equal Employment Opportunity Office of Federal Contract
Compliance Program. The Company's mission is to utilize the
collective strength of its affiliate companies, members, partners
and unique proprietary platform to be the standard in business
diversity recruiting, networking and professional development for
women, minorities, veterans, LGBTQ+ and disabled persons globally.
Oak Brook, Illinois-based Sassetti LL, the Company's auditor since
2022, issued a "going concern" qualification in its report dated
March 29, 2024, citing that the Company has incurred recurring
operating losses, has a significant accumulated deficit, and will
need to raise additional funds to meet its obligations and the
costs of its operations. These conditions raise substantial doubt
about the Company's ability to continue as a going concern.
PROFESSIONAL DIVERSITY: Falls Short of Nasdaq Bid Price Requirement
-------------------------------------------------------------------
Professional Diversity Network, Inc. disclosed in a Form 8-K filed
with the Securities and Exchange Commission on July 1, 2024, that
on June 27, 2024, the Company received a written notification from
The Nasdaq Stock Market stating that the Company is not in
compliance with Nasdaq Listing Rule 5550(a)(2) because for the last
30 consecutive business days, the closing bid price of the
Company's common stock was below the $1.00 per share minimum
required for listing on Nasdaq. The June 2024 Notice has no
immediate effect on the listing or trading of the Company's common
stock on the Nasdaq Capital Market.
As stated in the June 2024 Notice, Nasdaq listing rules provide the
Company a compliance period of 180 calendar days (i.e., until
Dec. 24, 2024) in which to regain compliance. The Company will
regain compliance if the closing bid price of its common stock is
$1.00 per share or higher for a minimum period of ten consecutive
business days during this compliance period. In the event the
Company does not regain compliance, it may be eligible for
additional time. To qualify, the Company will be required to meet
the continued listing requirement for market value of publicly held
shares and all other initial listing standards for The Nasdaq
Capital Market, with the exception of the bid price requirement,
and will need to provide written notice of its intention to cure
the deficiency during a second compliance period, by effecting a
reverse stock split if necessary. If the Company meets these
requirements, Nasdaq will inform the Company that it has been
granted an additional 180 calendar days. However, if it appears to
the staff of Nasdaq that the Company will not be able to cure the
deficiency, or if the Company is otherwise not eligible, Nasdaq
will provide notice that its securities will be subject to
delisting.
The Company said it intends to continue to monitor the closing bid
price of its common stock and to assess its options for maintaining
the listing of its common stock on the Nasdaq Capital Market. The
Company will consider all available options to regain compliance
with the minimum bid price requirement.
Another Nasdaq Non-Compliance
As previously disclosed, on May 21, 2024, Professional Diversity
received a letter from Nasdaq notifying the Company that it is not
in compliance with the minimum stockholders' equity requirement for
continued listing on the Nasdaq Capital Market. As previously
disclosed, Nasdaq has provided the Company with 45 calendar days,
or until July 5, 2024, to submit a plan to regain compliance with
the minimum stockholders' equity standard. If the Company's plan
to regain compliance is accepted, Nasdaq may grant an extension of
up to 180 calendar days from the date of the notification letter to
evidence compliance.
About Professional Diversity
Headquartered in Chicago, Illinois, Professional Diversity Network,
Inc. -- https://www.prodivnet.com -- is a global developer and
operator of online and in-person networks that provides access to
networking, training, educational and employment opportunities for
diverse professionals. The Company is a dynamic operator of
professional networks with a focus on diversity. The Company uses
the term "diversity" to describe communities, or "affinities," that
are distinctly based on a wide array of criteria, which may change
from time-to-time, including ethnic, national, cultural, racial,
religious or gender classification. The Company serves a variety
of such communities, including Women, Hispanic-Americans,
African-Americans, Asian-Americans, persons with disabilities,
Military Professionals, and Lesbian, Gay, Bisexual, Transgender and
Queer (LGBTQ+). The Company's goal is (i) to assist its registered
users and members in their efforts to connect with like-minded
individuals and identify career opportunities within the network
and (ii) connect members with prospective employers while helping
the employers address their workforce diversity needs. The Company
believes that the combination of its solutions allows it to
approach recruiting and professional networking in a unique way and
thus create enhanced value for its members and clients.
Oak Brook, Illinois-based Sassetti LL, the Company's auditor since
2022, issued a "going concern" qualification in its report dated
March 29, 2024, citing that the Company has incurred recurring
operating losses, has a significant accumulated deficit, and will
need to raise additional funds to meet its obligations and the
costs of its operations. These conditions raise substantial doubt
about the Company's ability to continue as a going concern.
PROFESSIONAL DIVERSITY: Has $495K Sales Deal With CEO-Owned Firm
----------------------------------------------------------------
Professional Diversity Network, Inc. disclosed in a Form 8-K filed
with the Securities and Exchange Commission on July 1, 2024, that
on June 28, 2024, the Company entered into a stock purchase
agreement with Eighty-eight Investment LLC, wholly owned and
controlled by Adam He, the Company's chief executive officer, as
purchaser. The Agreement provided for the purchase by the
Purchaser of 1,000,000 shares of the Company's common stock at a
purchase price of $0.495 per share, resulting in aggregate proceeds
to the Company of $495,000. The Purchase Price represented the
last consolidated closing bid price on the Nasdaq Capital Market
prior to the execution of the Agreement, in accordance with the
requirements of Nasdaq Listing Rule 5635(c) and applicable Nasdaq
interpretations. The shares of stock were issued pursuant to an
exemption from registration under the Securities Act of 1933, as
amended, pursuant to Section 4(a)(2) thereof and Regulation D
thereunder.
In connection with the investment, the Agreement requires the
Company to use its reasonable best efforts to nominate or appoint
(or cause to be nominated or appointed) one designee of the
Purchaser to the Company's Board of Directors promptly after the
identification of such designee, and to include such designee in
any proxy statement of the Company soliciting proxies for the
election of directors, for so long as the Purchaser beneficially
owns at least five percent of the Company's common stock, subject
to such nominee providing certain information to the Company and
certain other conditions. As of July 1, 2024, the Purchaser has
not identified a board designee.
The terms of the transaction were reviewed and approved by the
Company's Board of Directors, consisting solely of independent
directors, in accordance with the Company's policy on review and
approval of transactions with "related persons" within the meaning
of Item 404 of Regulation S-K.
About Professional Diversity
Headquartered in Chicago, Illinois, Professional Diversity Network,
Inc. -- https://www.prodivnet.com -- is a global developer and
operator of online and in-person networks that provides access to
networking, training, educational and employment opportunities for
diverse professionals. The Company is a dynamic operator of
professional networks with a focus on diversity. The Company uses
the term "diversity" to describe communities, or "affinities," that
are distinctly based on a wide array of criteria, which may change
from time-to-time, including ethnic, national, cultural, racial,
religious or gender classification. The Company serves a variety
of such communities, including Women, Hispanic-Americans,
African-Americans, Asian-Americans, persons with disabilities,
Military Professionals, and Lesbian, Gay, Bisexual, Transgender and
Queer (LGBTQ+). The Company's goal is (i) to assist its registered
users and members in their efforts to connect with like-minded
individuals and identify career opportunities within the network
and (ii) connect members with prospective employers while helping
the employers address their workforce diversity needs. The Company
believes that the combination of its solutions allows it to
approach recruiting and professional networking in a unique way and
thus create enhanced value for its members and clients.
Oak Brook, Illinois-based Sassetti LL, the Company's auditor since
2022, issued a "going concern" qualification in its report dated
March 29, 2024, citing that the Company has incurred recurring
operating losses, has a significant accumulated deficit, and will
need to raise additional funds to meet its obligations and the
costs of its operations. These conditions raise substantial doubt
about the Company's ability to continue as a going concern.
PROFESSIONAL DIVERSITY: Inks Stock Purchase Deal With Eighty-eight
------------------------------------------------------------------
Professional Diversity Network, Inc. disclosed in a Form 8-K Report
filed with the U.S. Securities and Exchange Commission that the
Company entered into a stock purchase agreement with Eighty-eight
Investment LLC, a Delaware limited liability company wholly owned
and controlled by Adam He, the Company's Chief Executive Officer.
The Agreement provided for the purchase by Eighty-eight of
1,000,000 shares of the Company's common stock at a purchase price
of $0.495 per share, resulting in aggregate proceeds to the Company
of $495,000. The Purchase Price represented the last consolidated
closing bid price on the Nasdaq Capital Market prior to the
execution of the Agreement, in accordance with the requirements of
Nasdaq Listing Rule 5635(c) and applicable Nasdaq interpretations.
The shares of stock were issued pursuant to an exemption from
registration under the Securities Act of 1933, as amended, pursuant
to Section 4(a)(2) thereof and Regulation D thereunder.
In connection with the investment, the Agreement requires the
Company to use its reasonable best efforts to nominate or appoint
(or cause to be nominated or appointed) one designee of the
Purchaser to the Company's Board of Directors promptly after the
identification of such designee, and to include such designee in
any proxy statement of the Company soliciting proxies for the
election of directors, for so long as the Purchaser beneficially
owns at least five percent (5%) of the Company's common stock,
subject to such nominee providing certain information to the
Company and certain other conditions.
About Professional Diversity
Headquartered in Chicago, Illinois, Professional Diversity Network,
Inc. -- https://www.prodivnet.com -- is a global developer and
operator of online and in-person networks that provides access to
networking, training, educational and employment opportunities for
diverse professionals. The Company operates subsidiaries in the
United States including National Association of professional Women
(NAPW) and its brand, International Association of Women (IAW),
which is one of the largest, most recognized networking
organizations of professional women in the country, spanning more
than 200 industries and professions. Through an online platform
and its relationship recruitment affinity groups, the Company
provides its employer clients a means to identify and acquire
diverse talent and assist them with their efforts to comply with
the Equal Employment Opportunity Office of Federal Contract
Compliance Program. The Company's mission is to utilize the
collective strength of its affiliate companies, members, partners
and unique proprietary platform to be the standard in business
diversity recruiting, networking and professional development for
women, minorities, veterans, LGBTQ+ and disabled persons globally.
Oak Brook, Illinois-based Sassetti LL, the Company's auditor since
2022, issued a "going concern" qualification in its report dated
March 29, 2024, citing that the Company has incurred recurring
operating losses, has a significant accumulated deficit, and will
need to raise additional funds to meet its obligations and the
costs of its operations. These conditions raise substantial doubt
about the Company's ability to continue as a going concern.
PROJECT BOOST: Fitch Affirms 'B' LongTerm IDR, Outlook Stable
-------------------------------------------------------------
Fitch Ratings has affirmed the Long-Term Issuer Default Rating
(IDR) of Project Boost Purchaser, LLC and its parent Boost Parent,
LP (dba J.D. Power) at 'B'. The Rating Outlook is Stable. Fitch has
also affirmed the company's first-lien debt at 'BB-'/'RR2' and
assigned the second-lien debt a rating of 'CCC+'/'RR6'.
J.D. Power's strong fundamentals, specifically recurring revenue,
relatively high EBITDA margins and strong FCF generation are
positive credit factors compared with other issuers in Fitch's
single 'B' coverage group. The company has valuable data sets and
strong customer relationships, and the acquisition of Autovista
should make some of the relationships even stronger. These positive
elements are offset by high leverage, and Fitch expects the capital
allocation policy to continue prioritizing M&A and return to equity
holders instead of voluntary debt reduction.
KEY RATING DRIVERS
High Leverage: High leverage and the associated interest burden
with higher interest rates are limiting factors for the IDR and
will likely persist due to additional M&A and/or cash distributions
to shareholders. The company finished 2023 with Fitch-calculated
leverage of 6.4x, down from 8.1x at the end of 2021. Incremental
debt in this refinancing will increase leverage, but the company
should finish the year below 7.0x. The highly recurring business
model with significant cash flow predictability partially offsets
this high leverage. Although EBITDA interest coverage is at 1.9x
this year, Fitch projects it to be at or above 2.0x in the
following years. The credit agreement includes significant
flexibility to increase leverage, with relatively lenient
maintenance covenants.
Focus on M&A: The company has aggressively used debt to consolidate
industry players since the 2019 merger of J.D. Power and Autodata
Solutions Group, Inc. The rapid pace of acquisitions in recent
years has enabled the company to meaningfully increase its scale
but presents credit risk given the high leverage profile and
integration risks.
The acquisition of Autovista makes sense from a strategic
perspective, especially the complementary geographic expansion and
increased scale. Autovista also has complementary data sets that
should strengthen the company's data and analytics offering. Fitch
expects J.D. Power will continue to prioritize its cash for M&A in
the future, with a focus on higher margin data and analytics
capabilities.
Liquidity, Maturity Risk Limited: Fitch views liquidity and
maturity risk as limited in the medium term despite continued macro
concerns. The refinancing will extend maturities five years for the
revolver and seven for the first-lien term loan. The company also
has a $150 million secured revolver that provides additional
flexibility.
Increased Scale: Increased scale and diversification into new data
and analytics solutions are positive for the rating. J.D. Power's
increased scale could help strengthen its overall competitive
position. The transaction also reduces customer concentration risk
and broadens the company's exposure to the European market,
diversifying its revenue base.
Industry-Embedded Data Sets: J.D. Power's data sets are critical to
its customers' workflows and are difficult to replicate. This is
evidenced by more than 75% of its customers having tenure of 10 or
more years and net customer revenue retention that has been above
100%. Its products are highly embedded in the decision-making
processes, with multiple customer touch points across the value
chain. J.D. Power's offerings outside of auto to industries such as
financial services and utilities are less entrenched but provide
some diversification.
Recurring Revenue Business Model: Subscription-based revenue
constitutes the majority of the mix, and it will increase as the
Autovista business is fully integrated. This provides significant
visibility and stability to FCF generation. Fitch expects the
company's ratio of cash flow from operations minus capex to debt to
be above 6% in its base case for 2024, and growing in the following
years. A meaningful portion of customers operate under annual or
multiyear contracts, and net revenue retention has been high
historically. The company also has limited working capital and
capex requirements, which translates to strong FCF conversion
metrics that Fitch projects could be near 40% or more of EBITDA.
Concentrated Exposure to Cyclical Market: The business is heavily
reliant on the auto industry, constituting a majority of revenue
including manufacturers (Ford Motor Company, General Motors
Company, and others), dealers and suppliers. J.D. Power experienced
more than 10% revenue decline during the 2008-2009 recession, and
adjusted EBITDA margin contracted as well. This is an ongoing risk,
albeit somewhat mitigated by increased scale and by growing its
business with financial institutions and insurance carriers.
DERIVATION SUMMARY
J.D. Power's IDR reflects its position as a market leader in data
and analytics solutions for the automotive industry, with strong
market share and high brand awareness among industry participants.
The company has a growing top-line largely composed of recurring
revenues, strong EBITDA margins in the mid to high 40% range and a
solid FCF generation profile. Each of these attributes are stronger
than other data and analytics companies rated in the 'B' category,
such as NielsenIQ ('B+'/Stable) and Neptune BidCo ('B+'/Stable).
These factors are partially offset by the lack of diversification
(a majority of its business is exposed to auto), cyclicality
inherent in the auto industry, customer concentration and high
financial leverage.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within the Rating Case for The Issuer:
- Organic revenue growth of 6% in 2025 and 5% in 2026;
- Stable margins over the next several years;
- FCF remains relatively strong over the rating horizon;
- Fitch has not modelled additional M&A, but believes the company
will allocate the majority of its excess cash flow to incremental
acquisitions or to shareholder returns.
RECOVERY ANALYSIS
For entities rated 'B+' and below, where default is closer and
recovery prospects are more meaningful to investors, Fitch
undertakes a tailored, or bespoke, analysis of recovery upon
default for each issuance. The resulting debt instrument rating
includes a Recovery Rating or published 'RR' (graded from 'RR1' to
'RR6') and is notched from the IDR accordingly. In this analysis,
there are three steps: (i) estimating the distressed enterprise
value (EV); (ii) estimating creditor claims; and (iii) distribution
of value. Fitch assumes J.D. Power would emerge from a default
scenario under the going concern approach versus liquidation.--The
recovery analysis assumes the company would be reorganized as a
going-concern in bankruptcy rather than liquidated;
- Fitch has assumed a 10% administrative claim.
Fitch envisions a hypothetical situation including missteps
following an acquisition that results in the loss of several large
clients as well as the revenue associated with the recently
acquired firm. A stressed scenario assumes that the newly acquired
operations in Europe falter, the sponsor takes a special dividend,
and several large OEM clients leave. This results in dramatic drop
in EBITDA at a time with limited liquidity, forcing the company to
negotiate with its creditors.
- Fitch estimates going concern (GC) EBITDA of $330 million, which
is higher than the prior assumption of $275, reflecting the
additional EBITDA contribution of the Autovista acquisition.
- Fitch assumes a 7.5x multiple, which is in-line with the agency's
assessment of historical trading multiples in the data and
analytics industry, sector M&A, and historic bankruptcy emergence
multiples Fitch has observed in the technology, media and telecom
(TMT) sectors.
The recovery analysis results in a 'BB-'/'RR2' issue and Recovery
Ratings for the first-lien credit facilities and 'CCC+'/'RR6' for
the second-lien debt.
RATING SENSITIVITIES
Factors That Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- EBITDA leverage sustained at or below 6.0x;
- (CFO-capex)/debt above 7.5% on a sustained basis.
Factors That Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- EBITDA leverage sustained above 7.5x;
- EBITDA interest coverage sustained below 2.0x;
- Adverse operating performance, material changes to industry
dynamics and/or the loss of a key customer that meaningfully alters
the overall operating profile.
LIQUIDITY AND DEBT STRUCTURE
Sufficient Liquidity: J.D. Power has sufficient liquidity to
navigate its business even through a moderate downturn. The pace of
M&A will likely be a determining factor in the level of liquidity
over time. There was approximately $180 million of cash on the
balance sheet at the end of 2023. Liquidity is further supported by
a first-lien, senior secured $150 million, undrawn revolver. Fitch
estimates FCF before dividends could exceed $150 million in 2024
and grow in the following years.
Debt Profile: The company's debt structure after this refinancing
will include first-lien secured term loans of $2.35 billion and
second-lien term loans of $400 million. All of its debt is floating
rate, and the company is extending the maturities of the first-lien
debt to seven years and second-lien debt to eight years.
ISSUER PROFILE
J.D. Power is a market leader in data and analytics solutions for
the automotive industry, with high market share and brand awareness
among industry participants. It is privately owned by Thoma Bravo.
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
Boost Parent, LP has an ESG Relevance Score of '4' for Governance
Structure due to private equity ownership, which has a negative
impact on the credit profile, and is relevant to the ratings 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
----------- ------ -------- -----
Boost Parent, LP LT IDR B Affirmed B
Project Boost
Purchaser, LLC LT IDR B Affirmed B
senior secured LT BB- Affirmed RR2 BB-
Senior Secured
2nd Lien LT CCC+ New Rating RR6
PROSOMNUS INC: Unsecureds Will Get 100% of Claims in Joint Plan
---------------------------------------------------------------
ProSomnus, Inc. and its Debtor Affiliates filed with the U.S.
Bankruptcy Court for the District of Delaware an Amended Disclosure
Statement describing Amended Joint Plan of Reorganization dated
June 24, 2024.
The Plan represents a significant step in the Debtors' months-long
restructuring process. Moreover, the Restructuring Support
Agreement will allow the Debtors to proceed expeditiously through
chapter 11 and consummate the Plan in accordance with the
milestones.
The Debtors expect to continue operating normally throughout the
Chapter 11 Cases and remain focused on serving their customers and
working with suppliers on normal terms.
The Debtors are seeking to confirm a pre-arranged plan under
chapter 11 of the Bankruptcy Code with the support, pursuant to the
terms of a restructuring support agreement entered into on May 7,
2024 (the "Restructuring Support Agreement" or "RSA"), of the
Debtors' prepetition creditors holding approximately (i) 100% of
the issued and outstanding Senior Secured Convertible Notes, (ii)
100% of the issued and outstanding Senior Secured Convertible
Exchange Notes, (iii) 94.95% of the issued and outstanding
Subordinated Secured Convertible Notes, (iv) 100% of the issued and
outstanding Subordinated Secured Convertible Exchange Notes, and
(v) 100% of the Bridge Notes (collectively, the "Sponsoring
Noteholders").
Specifically, as set forth in the Restructuring Support Agreement,
with the committed support of the Sponsoring Noteholders, the
Debtors are seeking to move forward with a committed Plan that
would allow for substantial deleveraging and a new capital infusion
to right size the Debtors' balance sheet for the benefit of all
stakeholders (the "Reorganization Transaction"). Through the
Reorganization Transaction:
* Each Holder of an Allowed Senior Notes Claims shall receive,
in full satisfaction of its Allowed Senior Secured Note Claim: its
Pro Rata share of the New Notes; provided, however, that holders of
Senior Notes Claims that are Excluded Parties shall receive no
distribution under the Plan.
* Each Holder of an Allowed Subordinated Notes Claim shall
receive, in full satisfaction of such Subordinated Notes Claim, its
Pro Rata share of 22.48% of New Common Equity, subject to dilution
on account of the MIP; provided, however, that holders of
Subordinated Notes Claims that are Excluded Parties shall receive
no distribution under the Plan.
* Allowed General Unsecured Claims will be paid in full in the
ordinary course of business on and after the Effective Date; and
* Interests and Section 510(b) Claims will be cancelled,
released, and extinguished, and will receive no recovery.
Class 5 consists of General Unsecured Claims. Except to the extent
that a Holder of an Allowed General Unsecured Claim agrees to
different treatment, on and after the Effective Date, the Debtors
or Reorganized Debtors, as applicable, shall continue to pay or
dispute each General Unsecured Claim in the ordinary course of
business as if the Chapter 11 Cases had never been commenced. The
allowed unsecured claims total $2,500,000. This Class will receive
a distribution of 100% of their allowed claims.
On the Effective Date, Interests will be cancelled, released, and
extinguished and will be of no further force and effect and shall
receive no recovery.
The Debtors or the Reorganized Debtors, as applicable, shall fund
distributions under the Plan with the (i) Debtors' Cash on hand,
(ii) Cash generated from operations; (iii) funds from the DIP
Facility, and (iv) funds generated through issuance of the New
Money Common Equity Investment.
A full-text copy of the Amended Disclosure Statement dated June 24,
2024 is available at https://urlcurt.com/u?l=KCp6wN from
PacerMonitor.com at no charge.
Counsel to the Debtors:
POLSINELLI PC
Shanti M. Katona, Esq.
Katherine M. Devanney, Esq.
Michael V. DiPietro, Esq.
222 Delaware Avenue, Suite 1101
Wilmington, Delaware 19801
Telephone: (302) 252-0920
Facsimile: (302) 252-0921
Email: skatona@polsinelli.com
kdevanney@polsinelli.com
mdipietro@polsinelli.com
- and -
Mark B. Joachim, Esq.
1401 Eye Street, N.W., Suite 800
Washington, D.C. 20005
Telephone: (202) 783-3300
Facsimile: (202) 783-3535
Email: mjoachim@polsinelli.com
About ProSomnus Inc.
ProSomnus, Inc., f/k/a LAAA Merger Corp., is an innovative medical
technology company that develops, manufactures, and markets its
proprietary line of precision intraoral medical devices for
treating and managing patients with obstructive sleep apnea.
The Debtors sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Del. Lead Case 24-10972) on May 7, 2024,
with $26,287,000 in assets as of Dec. 31, 2023 and $52,888,000 in
liabilities as of Dec. 31, 2023. Brian B. Dow, chief financial
officer, signed the petitions.
Judge John T. Dorsey presides over the case.
The Debtors tapped Shanti M. Katona, Esq., at POLSINELLI PC as
legal counsel; and GAVIN/SOLMONESE LLC as financial advisor.
The law firms of Kilpatrick Townsend & Stockton LLP and Morris
James LLP represent the Ad Hoc Crossover Group of Convertible
Noteholders.
R & P LAND: Unsecureds to Get $800 per Month over 60 Months
-----------------------------------------------------------
R & P Land Company, LLC, filed with the U.S. Bankruptcy Court for
the Northern District of Alabama a Small Business Plan of
Reorganization dated June 24, 2024.
The Debtor is a domestic limited liability company formed on or
about February 16, 2021 by its sole members Charles P. Sanford and
Roger Murray, III.
On or about July 26, 2021, R & P purchased the assets, including
the name, of Consignment World, Inc., a separate entity which
operated a consignment shop in Birmingham, Alabama. Since that
time, R & P has operated the same consignment shop as did
Consignment World, Inc.
R & P's financial situation began deteriorating around the end of
the first quarter and beginning of the second quarter of 2023
because customers were not as frequent. Additionally, online
competition, such as Facebook Marketplace and other online vendors
were applying squeeze out pressure on R & P such that customers did
not frequent its establishment to purchase consigned goods. Instead
customers shopped on Facebook Marketplace and other places for used
goods. Additionally R & P did not have a website for Consignment
World which showed goods for sale.
R & P found itself owing substantial sums of money that it was
unable to service. The continuing strain on R & P's resources
proved too great to continue operating without the protections of
the Bankruptcy Code. R & P filed this chapter 11 proceeding on
March 27, 2024 to reorganize its debt on more management terms and
to preserve its ongoing operations from threats posed by Community
Loan Services, the State of Alabama, and the other creditors,
including those who filed lawsuits.
Class 2 consists of the Allowed General Unsecured Claims including
but not limited to the State of Alabama's Allowed General Unsecured
Claim. The total General, Nonpriority, Unsecured Claims filed thus
far in this case total $42,759.27, including the general, unsecured
claims of the State of Alabama. Allowed General Unsecured Creditors
shall be paid a pro rata share of equal, consecutive, monthly
installments over 60 months in the amount of $800.00 with the first
payment due on the first day of the first full month following the
Effective Date and continuing on the same day of each month
thereafter until paid in full. Class 2 is impaired by the Plan.
Class 3 consists of consists of the Equity Interests in the Debtor.
All Equity Interests held prior to the Petition Date shall be
retained.
The Plan contemplates that distributions will be funded by revenues
generated during the Debtor's post-petition operations and the
Reorganized Debtor's future revenue.
A full-text copy of the Plan of Reorganization dated June 24, 2024
is available at https://urlcurt.com/u?l=eWeDxn from
PacerMonitor.com at no charge.
Attorney for the Debtor:
Robert C. Keller, Esq.
Russo White & Keller, P.C.
315 Gadsden Highway, Suite D
Birmingham, AL 35235
Tel: (205) 833-2589
Email: rjlawoff@bellsouth.net
About R & P Land Company
R & P Land Company, LLC, is a domestic limited liability company
formed on or about February 16, 2021 by its sole members Charles P.
Sanford and Roger Murray, III.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Ala. Case No. 24-00938) on March 27,
2024. In the petition signed by Charles P. Sanford, managing
member, the Debtor disclosed $1,910,383 in assets and $588,990 in
total liabilities.
Judge Sims Crawford oversees the case.
Robert C. Keller, Esq., at RUSSO, WHITE & KELLER, P.C., is the
Debtor's legal counsel.
RELIABLE HEALTHCARE: Plan Exclusivity Period Extended to August 16
------------------------------------------------------------------
Judge Jennie D. Latta of the U.S. Bankruptcy Court for the Western
District of Tennessee extended Reliable Healthcare Logistics, LLC's
exclusive period to file a chapter 11 plan of reorganization and
disclosure statement, and obtain acceptance thereof to August 16
and October 15, 2024, respectively.
Reliable is a Tennessee limited liability company. Its primary
business location is 4105 S. Mendenhall, Memphis, TN 38115.
Reliable is a third-party logistics provider. Reliable's primary
business is warehousing pharmaceuticals and medical healthcare
goods and supplies for its customers, who are national vendors of
such items, shipping such items to its customers' customers
throughout the country.
The Debtor has been engaged in discussions with its counsel and
with other parties in interest with respect to a Plan of
Reorganization. Subsequent to filing the petition, the Debtor has
rejected leases in San Antonio, Texas, Boca Raton, Florida and
Pompano Beach, Florida. Additionally, the Debtor has vacated a
warehouse in Reno, Nevada for which its lease was terminated prior
to the Petition date.
Reliable Healthcare Logistics is represented by:
Michael P. Coury, Esq.
GLANKLER BROWN, PLLC
Suite 400, 6000 Poplar Avenue
Memphis, TN 38119
Tel: (901) 576-1886
Email: mcoury@glankler.com
About Reliable Healthcare Logistics
Reliable Healthcare Logistics, LLC is an independent 3PL recognized
for developing cost effective, innovative supply chain solutions
for complex logistics requirements in regulated industries. With
over 650,000 total square feet, its 9 Reliable facility locations
are dedicated to the secure and proper storage of pharmaceutical
products, including prescription and over-the counter-medications,
as well as providing services for medical device manufactures,
cosmetics, human and animal health and wellness companies. The
company is based in Memphis, Tenn.
Reliable Healthcare Logistics filed a petition under Chapter 11,
Subchapter V of the Bankruptcy Code (Bankr. W.D. Tenn. 24-20252) on
Jan. 19, 2024, with $1 million to $10 million in both assets and
liabilities. Mike Kattawar, Sr., chief strategic officer, signed
the petition.
Judge Jennie D. Latta oversees the case.
Michael P. Coury, Esq., at Glankler Brown, PLLC, is the Debtor's
legal counsel.
RISKON INTERNATIONAL: Delays Annual Report for FY Ended March 31
----------------------------------------------------------------
RiskOn International, Inc. filed Form 12b-25 with the U.S.
Securities and Exchange Commission stating that, the compilation,
dissemination and review of the information required to be
presented in the Form 10-K for the fiscal year ended March 31, 2024
has imposed requirements that have rendered timely filing of the
Form 10-K impracticable without undue hardship and expense to the
registrant.
"We expect to report $0.3 million of revenue for the fiscal year
ended March 31, 2024 and had no revenue in fiscal year ended March
31, 2023 as we commenced operations of BitNile.com, Inc.,
RiskOn360, Inc. and GuyCare, Inc. in March 2023, November 2023 and
January 2024, respectively. Gross loss is expected to be $2 million
in FY 2024 compared to $0 in FY 2023. Cost of revenues for FY 2024
is estimated to be approximately $2 compared to $0 in 2023," RiskOn
said.
"FY 2024 we expect our operating loss to increase by $31 million,
from $6 million in FY 2023. The increase from the prior year is
primarily related to the estimated increase of higher selling,
general and administration expense, impairment loss on intangible
assets, coupled with salaries, wages and benefits and gross loss
increases of $22 million, $4 million, $3 million and $2 million,
respectively. The increase in selling, general and administrative
expense was mainly driven by increased marketing, advertising and
event sponsorship of $17 million, Metaverse platform hosting fees
of $4 million and capital raising costs of $1 million. The
impairment increase of $4 million is primarily due to our tradename
intangible asset being impaired due to a decrease in expected
cashflows and the increase in salaries, wages and benefits of $3
million which resulted from increased headcount, related payroll
expenses and employee benefits," the Company said.
RiskOn estimates its loss from continuing operations FY 2024 will
be $25 million compared to $34 million in FY 2023. The expected
decrease of $9 million is primarily due the loss on acquisition of
BNC of $55 million, the change in fair value of the White River
Energy Corp investment of $21 million in FY 2023 and the gain in FY
2024 on conversion of notes and White River shares of $3 million,
partially offset by the increase in operating loss of $31 million,
the change in fair value of derivative liabilities and derivative
income of $23 million, the White River Energy Corp share transfer
expense of $8 million, the amortization of discounts of $6 million
and the loss on redemption of Series A preferred stock of $2
million in FY 2024.
About RiskOn International
Founded in 2011, RiskOn International, Inc. (formerly known as
BitNile Metaverse, Inc.) owns 100% of BNC, including the
BitNile.com metaverse platform. The Platform, which went live to
the public on March 1, 2023, allows users to engage with a new
social networking community and purchase both digital and physical
products while playing 3D immersive games. Through Dec. 31, 2023,
the Company's former wholly owned subsidiaries, Agora and Wolf
Energy Services have been treated for accounting purposes as
divested.
As of December 31, 2023, the Company had $101,487 in cash and cash
equivalents. The Company believes that the current cash on hand is
not sufficient to conduct planned operations for one year from the
issuance of the condensed consolidated financial statements, and it
needs to raise capital to support its operations, raising
substantial doubt about its ability to continue as a going concern.
The Company acquired BitNile.com in March 2023, which has generated
nominal revenue as of December 31, 2023, according to the Company's
Quarterly Report for the period ended Dec. 31, 2023.
S&W SEED: Amends Employment Contract With CEO Mark Herrmann
-----------------------------------------------------------
S&W Seed Company disclosed in a Form 8-K Report filed with the U.S.
Securities and Exchange Commission that the Company entered into an
amended and restated employment agreement with Mark Herrmann, the
Company's President and Chief Executive Officer, effective as of
July 1, 2024.
Pursuant to the amended and restated employment agreement, Mr.
Herrmann will continue to serve as the Company's President and CEO
and continue to receive an annual base salary of $500,000. With
respect to fiscal year 2025 and each fiscal year of Mr. Herrmann's
employment thereafter, Mr. Herrmann will be eligible to earn (i) a
cash bonus with a target bonus percentage equal to 50% (up to a
maximum of 75%) of his base salary, and (ii) a restricted stock
unit award with a target value of $150,000 (up to a maximum value
of $300,000), which shall vest in equal quarterly installments over
a three-year period, subject to Mr. Herrmann's continuous service
as of each such vesting date. In addition, as soon as practicable
following the beginning of each fiscal year, Mr. Herrmann will be
eligible to receive a stock option award with a cash value of
$300,000, which shall vest in equal quarterly installments over a
three-year period, subject to Mr. Herrmann's continuous service as
of each such vesting date. The housing previously provided for Mr.
Herrmann in the Longmont, Colorado area will terminate on August
31, 2024. If Mr. Herrmann's employment is terminated without cause
or he resigns for good reason, he will be entitled to receive
continuation of his base salary for three months. If Mr. Herrmann's
employment with the Company terminates due to his voluntary
retirement after attaining the age of 65, he will be entitled to
the full acceleration and exercisability of all unvested shares
subject to any outstanding stock option or restricted stock unit
award, and any then-outstanding stock options will remain
exercisable until 12 months after said termination date. The
remaining terms and conditions of Mr. Herrmann's employment
agreement remain substantially unchanged.
About S&W Seed Co.
Longmont, Colo.-based S&W Seed Company is a global multi-crop,
middle-market agricultural company that is principally engaged in
breeding, growing, processing and selling agricultural seeds. The
Company operates seed cleaning and processing facilities, which are
located in Texas, New South Wales and South Australia. The
Company's seed products are primarily grown under contract by
farmers. The Company is currently focused on growing sales of their
proprietary and traited products specifically through the expansion
of Double TeamTM for forage and grain sorghum products, improving
margins through pricing and operational efficiencies, and
developing the camelina market via a recently formed partnership.
As of March 31, 2024, the Company has $133.2 million in total
assets, $76.4 million in total liabilities, and total stockholders'
equity of $51.2 million. As of December 31, 2023, the Company had
$143.7 million in total assets, $81.4 million in total liabilities,
$5,518,624 in mezzanine equity, and $56.8 million in total
stockholders' equity.
S&W Seed cautioned in its Form 10-Q Report for the quarterly period
ended December 31, 2023, that its operating and liquidity factors
raise substantial doubt regarding the Company's ability to continue
as a going concern. According to the Company, it is not profitable
and has recorded negative cash flows for the last several years.
For the six months ended December 31, 2023, the Company reported a
net loss of $12.5 million. While the Company did report net
cashprovided by operations of $1.4 million for the six months ended
December 31, 2023, it expects this to be negative in fiscal 2024.
The positive cash flow in operations for the six months ended
December 31, 2023, was largely due to changes in operating assets
and liabilities. As of December 31, 2023, the Company had cash on
hand of $1.1 million. The Company had $2.4 million of unused
availability from its working capital facilities as of December 31,
2023.
Additionally, the Company's Amended and Restated Loan and Security
Agreement, or the Amended CIBC Loan Agreement, with CIBC Bank USA,
or CIBC, and its debt facilities with National Australia Bank, or
NAB, under the NAB Finance Agreement, contain various operating and
financial covenants. Adverse geopolitical and macroeconomic events
and other factors affecting the Company's results of operations
have increased the risk of the Company's inability to comply with
these covenants, which could result in acceleration of its
repayment obligations and foreclosure on its pledged assets. The
Amended CIBC Loan Agreement as presently in effect requires the
Company to meet minimum adjusted EBITDA levels on a quarterly basis
and the NAB Finance Agreement includes an undertaking that requires
the Company to maintain a net related entity position of not more
than USD$18.5 million and a minimum interest cover ratio at each
fiscal year-end. As of December 31, 2023, the Company was in
compliance with the CIBC minimum adjusted EBITDA covenant as well
as the NAB net related entity position covenant. While the Company
was in compliance with these covenants, there can be no assurance
the Company will be successful in meeting its covenants or securing
future waivers or amendments from its lenders. Currently, the
Company does not expect to meet certain of these covenants in
fiscal 2024. If the Company is unsuccessful in meeting its
covenants or securing future waivers or amendments from its lenders
and cannot obtain other financing, it may need to reduce the scope
of its operations, repay amounts owed to its lenders or sell
certain assets. Further, if the Company cannot renew or obtain
other financing when its two major debt facilities with CIBC and
NAB expire on August 31, 2024, and March 31, 2025, respectively, it
may need to reduce the scope of its operations, repay amounts owed
to its lenders or sell certain assets.
SALT LIFE: July 8 Deadline Set for Panel Questionnaires
-------------------------------------------------------
The United States Trustee is soliciting members for committee of
unsecured creditors in the bankruptcy cases of Salt Life Beverage,
LLC, et al.
If a party wishes to be considered for membership on any official
committee that is appointed, it must complete a questionnaire
available at https://tinyurl.com/2pe3dvhs and return by email it to
Benjamin A. Hackman -- Benjamin.A.Hackman@usdoj.gov -- at the
Office of the United States Trustee so that it is received no later
than 4:00 p.m., on July 8, 2024.
If the U.S. Trustee receives sufficient creditor interest in the
solicitation, it may schedule a meeting or telephone conference for
the purpose of forming a committee.
About Delta Apparel
Headquartered in Duluth, Georgia, Delta Apparel, Inc. is a
vertically integrated, international apparel company with
approximately 6,800 employees worldwide. The Company designs,
manufactures, sources, and markets a diverse portfolio of core
activewear and lifestyle apparel products under its primary brands
of Salt Life, Soffe, and Delta. The Company specializes in selling
casual and athletic products through a variety of distribution
channels and tiers, including outdoor and sporting goods retailers,
independent and specialty stores, better department stores and
mid-tier retailers, mass merchants, eRetailers, the U.S. military,
and through its business-to business digital platform.
Delta Apparel Inc. and six affiliates filed for Chapter 11
protection in Wilmington, Del., on June 30, 2024, with a deal in
hand to sell its Salt Life brand. The lead case is In re Salt Life
Beverage, LLC (Bankr. D. Del. Lead Case No. 24-11468). The Hon.
Judge Laurie Selber Silverstein presides over the cases.
Delta Apparel's assets as of June 1, 2024, total $337,801,000 and
debts total $244,564,000. The petitions were signed by Mr. Pruban.
Lawyers at Polsinelli PC serve as counsel to the Debtors. Tim
Pruban at Focus Management Group is serving as the Debtors' chief
restructuring officer. MMG Advisors, Inc., serves as investment
banker. Epiq is the claims and noticing agent and administrative
advisor.
Counsel for Wells Fargo, the DIP Agent:
Daniel F. Fiorillo, Esq.
Chad B. Simon, Esq.
Otterbourg P.C.
230 Park Avenue
New York, NY 10169-0075
Fax: (212) 682-6104
E-mail: dfiorillo@otterbourg.com
csimon@otterbourg.com
SAN GORGONIO MEMORIAL: Moody's Lowers GOULT Bond Ratings to 'B1'
----------------------------------------------------------------
Moody's Ratings has downgraded San Gorgonio Memorial Healthcare
District, CA's general obligigation unlimited tax (GOULT) bond
ratings to B1 from Ba2. Moody's have also removed the negative
outlook. The district has approximately $118 million in total debt
outstanding.
The downgrade reflects unsustainable financial operations,
characterized by weak liquidity, ongoing negative operating margins
and absence of a clear path to sustainably balanced financial
operations.
RATINGS RATIONALE
The downgrade of the district's GOULT bonds to B1 reflects ongoing
weak financial performance and tenuous liquidity of 50 days at the
end of fiscal 2023. The district secured interim financing of $9
million following the delayed receipt of intergovernmental
transfers in fiscal 2022, however the long-term sustainability of
district operations remains uncertain and heavily reliant on line
of credit draws to support liquidity needs. The rating considers
recently improved patient volumes and utilization metrics that have
stabilized following declines during the COVID-19 pandemic, however
ongoing operating margins have been persistently negative (-5.2%
in fiscal 2023) and are projected to remain negative through fiscal
2024 and 2025. District operating performance remains extremely
weak, with a history of violating covenants including 1.5 times
debt service coverage and 50 days' cash requirements on the
district's $11.4 million outstanding revenue bonds and requiring
the district to obtain a waiver from its loan provider. The rating
also takes into account the district's $14.5 billion tax base,
which will continue to grow supported by ongoing residential and
industrial development, as well as a security interest created by
statute in property taxes levied for debt service.
RATING OUTLOOK
Moody's do not assign outlooks to local governments with this
amount of debt.
FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATINGS
-- Sustained improvement in financial performance resulting in
liquidity approaching 100 days
-- Demonstrated improvement in net patient revenue and physician
utilization
FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATINGS
-- Default on or acceleration of direct placement revenue bond or
line of credit stemming from district's failure to meet covenants
-- Inability to balance financial operations, leading to further
deterioration in liquidity or negative cash flow margins below
projections
-- Failure to stabilize patient volumes and net patient revenues
LEGAL SECURITY
The district's GOULT bonds are payable from ad valorem taxes that
may be levied against all taxable property within the district
without limitation as to rate or amount. The district's board has
executed a deposit and transfer agreement pursuant to which
Riverside County will forward ad valorem property tax collections
directly to US Bank as Trustee for subsequent transfer to the
paying agent for the GOULT bonds.
PROFILE
Located in northwestern Riverside County (Aa2 stable), the district
includes the cities of Banning, in which it is located, along with
Beaumont, part of the City of Calimesa and neighboring
unincorporated areas of Cabazon, Cherry Valley and Whitewater. The
permanent resident population of the district is estimated at
95,000 residents. The San Gorgonio Memorial Hospital, located in
Banning, is a 79-bed general acute care hospital.
METHODOLOGY
The principal methodology used in these ratings was US Special
Purpose District General Obligation Debt Methodology published in
November 2022.
SHUTTERFLY LLC: Moody's Alters Outlook on 'Caa2' CFR to Positive
----------------------------------------------------------------
Moody's Ratings changed Shutterfly, LLC's outlook to positive from
stable and affirmed its Corporate Family Rating at Caa2 and its
Probability of Default Rating at Caa2-PD. Moody's also changed the
outlook on the company's subsidiary, Shutterfly Finance, LLC
(Shutterfly Finance) to positive from stable and affirmed all
existing credit ratings. This includes the B2 Backed Senior Secured
First-Lien notes rating, the B2 Backed Senior Secured First Lien
Bank Credit Facility rating, the Caa2 Backed Senior Secured
Second-Lien Bank Credit Facility (term loan and revolver) rating
and the Caa2 rating on the Backed Senior Secured Second-Lien
notes.
The change in outlook to positive from stable reflects the
company's improved free cash flow trends and solid execution on
cost reduction initiative, with further improvements expected over
the next 12-18 months.
RATINGS RATIONALE
Shutterfly's Caa2 CFR reflects the company's very high leverage,
exposure to cyclical consumer discretionary spend, a highly
seasonal business with idled capacity during non-peak selling
periods and intensely competitive marketplace for photo-based
consumer products. Shutterfly is heavily dependent on fourth
quarter earnings to offset operating losses in the first nine
months of the year, which stem from a sizable fixed cost base and
large product discounting during the seasonally weak
January-to-September period to stimulate customer demand.
Shutterfly's lack of pricing power in certain categories is
evidenced by its historically low single-digit operating margins.
The rating is supported by Shutterfly's strong brands, leadership
position and manufacturing scale as a retailer of personalized
photo products and services, broad range of customized goods and
seamless user experience that facilitate recurring customer usage
increasingly transacted via online engagement. The company benefits
from a vertically-integrated operation with relatively low customer
acquisition costs. To improve profitability, Shutterfly has
executed approximately $80 million of the $135 million planned
run-rate cost reductions, with the remaining $55 million to be
executed by year end 2024. Business line diversification is
provided by Lifetouch, the US market leader in school photography,
and Snapfish, a global online retailer of digital photography and
personalized photo-based products in the value segment. The
addition of Spoonflower extends Shutterfly's home décor business
into the fast-growing direct-to-consumer personalization market.
Over the next 12-18 months, Moody's expect Shutterfly will maintain
adequate liquidity supported by Moody's expectation of positive
free cash flow generation in the $70 - $90 million in 2024, though
constrained by significant seasonality. Moody's expect Shutterfly
will continue to produce the bulk of its positive free cash flow in
the October-to-December quarter to offset cash burn during the
January-to-September period. Shutterfly's unrestricted cash totaled
approximately $64 million and $273 million at March 31, 2024 and
December 31, 2023, respectively. The company typically draws down
cash balances and relies on revolver borrowings in the March to
September quarters to fund sizable working capital requirements and
offset negative operating cash flows. Over the next 12-18 months,
Moody's expect Shutterfly to maintain minimum unrestricted cash
balances of at least $60 million with revolver borrowing under $200
million during the first three quarters of the year, as the company
uses cash from its Q4 peak cash balance (which Moody's project will
exceed $300 million at the end of Q4 2024). The company's $277.5
million revolver matures in October 2026. Moody's expect that cash
on hand, internally generated cash flow and revolver availability
will provide adequate coverage of the company's basic cash needs,
including working capital, debt service and capex.
Shutterfly's ESG Credit Impact Score is CIS-5, chiefly driven by
governance risks. CIS-5 indicates that ESG considerations have a
pronounced impact on the current rating, which is lower than it
would have been if ESG risks did not exist. Governance risks
include the aggressive financial strategy under the private equity
ownership that has resulted in a highly leveraged balance sheet,
negative free cash flows and the debt exchange transaction last
year, which Moody's viewed as a distressed exchange.
The B2 ratings on the senior secured first-lien credit facilities
due 2027 and notes maturing in 2027 reflect their priority position
in Shutterfly's debt capital structure compared to the senior
secured second-lien credit facilities and notes, which are rated
Caa2.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Ratings could be upgraded if Shutterfly significantly improves free
cash flow generation during the first three quarters of the year
thus reducing the exposure to the fourth quarter performance,
demonstrates organic revenue growth and EBITDA margin expansion
that lead to sustained reduction in Debt/EBITDA approaching 7.5x
(inclusive of Moody's adjustments) and consistent annual free cash
flow generation. An upgrade would also require that the company
achieves a long-term solution to its funding needs.
Ratings could be downgraded if revenue remains flat or declines
while margins erode, free cash flow is negative on a sustained
basis or Moody's expect total debt to EBITDA will increase above
the 9.5x area (inclusive of Moody's adjustments).
Headquartered in San Jose, CA, Shutterfly, LLC is a leading online
manufacturer and retailer of personalized consumer photo products
and services (64% of fiscal 2023 revenue) through premium brands
such as Shutterfly (photo books, personalized holiday cards,
announcements, invitations, stationery and home décor products);
and Tiny Prints Boutique (online cards and stationery boutique
offering stylish announcements, invitations and personal
stationery). The Lifetouch unit (26%) is a leading provider of
school photography in the US, while the SBS business unit (10%)
provides customized direct marketing and variable print-on-demand
solutions to enterprise customers. GAAP revenue totaled
approximately $2.25 billion for the twelve months ended March 31,
2024.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
SINGING MACHINE: Completes Acquisition of SemiCab Inc.
------------------------------------------------------
The Singing Machine Company, Inc., announced July 5, 2024, it has
successfully completed the acquisition of SemiCab, Inc., an
artificial intelligence technology company in the global logistics
space.
"We are very pleased to complete the acquisition of SemiCab,"
commented Gary Atkinson, CEO of Singing Machine. "They have
disruptive, cutting-edge, AI-powered technology. They have world
class customers that are eager to expand their current
relationships. Lastly, SemiCab's technology creates a compelling
financial win-win for carriers and enterprise-level Fortune 1000
clients through significant cost savings and efficiencies. For the
benefit of our shareholders, we view this transaction as a complete
overhaul of our growth prospects, our ability to create shareholder
value, and to scale SemiCab to a global force in the logistics
space for many years to come," continued Mr. Atkinson.
Awarded Gartner Cool Vendor in 2020, SemiCab is a global leader in
the AI-driven logistics space and developed by a pair of life-long
former Google and GT Nexus technology innovators in the logistics
industry. The Company launched its first revenue-generating
software platform in 2021, immediately securing several enterprise
clients in the US.
SemiCab expanded its platform to the Indian market, driven by
strong client demand from several global leaders in the consumer,
non-durables space. In 2021, the India national government
launched a large-scale infrastructure modernization program called
the Gati Shakti National Master Plan.
To support this plan, the National Digital Freight Exchange
("NDFE") was created to help improve shipping efficiencies within
the largest population centers of India. SemiCab was selected to
partner with the NDFE, delivering AI-powered software solutions to
members of the exchange.
SemiCab's software has the potential to disrupt the global
logistics industry through several powerful aspects of its
solution:
* Improved Efficiency: SemiCab's software improves freight
utilization rates from 65% to 90%. This is believed to be one of
the highest utilization rate in the industry.
* Cost Savings: These utilization rates enable SemiCab to pass
on significant cost savings to end customers. In many cases this
represents more than a 10% reduction in overall costs. Truck-based
shipping is typically 3% of total sales for most companies.
* Labor Reduction: The utilization of AI across the freight the
entire process has a dramatic impact of the staffing required to
schedule, monitor, and bill for freight services.
* Sustainability: The reduction of truck usage by up to 35% has
the potential to be one of the least invasive, low-cost ways to
dramatically reduce the carbon footprint and greenhouse gas
emissions of the global logistics space. This is a benefit that
can be measured, monetized, and implemented with no costly changes
to existing infrastructure, staffing or operations.
Overview of the transaction
The transaction was structured as an asset purchase/sale. At
closing, Singing Machine will issue to SemiCab 641,806 shares of
its common stock, which represents approximately 10% of the
Company's issued and outstanding common stock as of July 3, 2024
and the assumption of approximately $2.6 million in liabilities as
of March 31, 2024. In addition, at closing Singing Machine will
issue to SemiCab a 20% membership interest in its newly formed
wholly owned subsidiary, SemiCab Holdings, LLC.
As part of the transaction, the Company also entered into an option
agreement to acquire SMCB Solutions Private Limited, an Indian
based wholly owned subsidiary of SemiCab. This entity currently
operates from Bangalore India and serves the combined businesses
technology needs as well as India-based enterprise customers.
Consideration for this part of the transaction will include an
additional 320,903 shares of the Company's Common Stock. This
transaction is expected to close before Aug. 31, 2024, subject to
certain regulatory compliance and approvals in India. This
subsidiary has generated approximately $1.4 million in sales for
the last twelve-month period ended March 31, 2024. The figures are
not included in the financial statements included in this release.
About The Singing Machine Company
Headquartered in Fort Lauderdale, FL, The Singing Machine Company
--
http://www.singingmachine.com/-- is primarily engaged in the
development, marketing, and sale of consumer karaoke audio
equipment, accessories, and musical recordings. The Company
primarily specializes in the design and production of karaoke and
music enabled consumer products for adults and children. Its
mission is to "create joy through music."
Philadelphia, Pennsylvania-based Marcum LLP, the Company's auditor
since 2023, 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.
SKILLZ INC: Moody's Withdraws 'Caa2' Corporate Family Rating
------------------------------------------------------------
Moody's Ratings has withdrawn all ratings of Skillz Inc.'s,
including the Caa2 Corporate Family Rating, Caa2-PD Probability of
Default Rating and Caa2 rating on the $129.7 million outstanding
10.25% senior secured first-lien notes due December 2026. The
company's SGL-3 Speculative Grade Liquidity rating was also
withdrawn. The outlook was stable prior to the withdrawal.
RATINGS RATIONALE
Moody's has decided to withdraw the rating(s) following a review of
the issuer's request to withdraw its rating(s).
With headquarters in Las Vegas, NV, Skillz Inc. is a technology
platform that enables game developers to monetize their content
through multi-player competition. Skillz is publicly traded but
also a controlled company with its co-founder and CEO, Andrew
Paradise, holding 80% voting control. Revenue for the twelve months
ended March 31, 2024 totaled approximately $131 million.
SM ENERGY: Fitch Puts 'BB-' LongTerm IDR on Watch Positive
----------------------------------------------------------
Fitch Ratings has placed the 'BB-' Long-Term Issuer Default Rating
(IDR) and all issue ratings of SM Energy Company (SM) on Rating
Watch Positive (RWP).
The placement on RWP follows the announcement that SM has entered
into a definitive agreement to acquire an 80% of the assets of XCL
Energy (XCL). The transaction will be valued at approximately $2
billion and funded with cash and debt. The rating reflects SM's
robust operating performance, consistent positive free cash flow
and low leverage. The RWP reflects the increased size, scale,
improved netbacks and basin diversity delivered by the acquisition
of XCL's assets along with leverage maintenance below 1.5x.
Fitch expects to resolve the RWP upon closure of the acquisition
under the terms and financing structure as announced by SM. The
close is expected in September 2024. Although unlikely, the closing
of the transaction and resolution of the RWP could take longer than
six months.
KEY RATING DRIVERS
Accretive but Leveraging Transaction: Fitch views the XCL
acquisition favorably. It adds 107 million barrels of oil
equivalent (MMBoe) of preliminary proved reserves, 43 million
barrels of oil equivalent per day (MMBoepd) of oil-biased
production, increases SM's years of inventory by two years to 12+
and adds basin diversity. In addition, the acquisition increases
the oil percentage of production and improves netbacks.
However, it adds $1.3 billion of debt and increases
Fitch-calculated leverage at the end of 2024 to 1.6x from 0.9x at
the end of 2023. SM is committed to paying down debt post the
transaction, and its forecast shows leverage declining and
remaining below 1.5x in 2025 and throughout the forecast.
Consistently Positive FCF: SM's consistently positive FCF, even
while spending $1.3 billion-$1.4 billion annually on capex, is
supportive of credit strength. SM has been running a six-rig
program with four rigs running in the Midland Basin and two rigs
running in South Texas. Going forward, Fitch expects capex in line
with generating low to mid- single digit organic production
growth.
Strong Operating Performance: Fitch expects SM to extend its strong
operating performance to the acquired acreage. SM exhibited strong
performance in both of their existing basins showing higher
cumulative oil production than peers on new wells over the first 20
months of production. Since 2022, SM increased drilling footage per
day by 10% and completed footage per day by 85%. In the same
timeframe, SM increased these measures in South Texas by 20% and
30%, respectively.
Well productivity in the XCL acreage is comparable to SM's wells.
The Uinta basin exhibits thicker sections with multiple targets of
high oil content. SM expects to bring over most of the existing XCL
field staff in the acquisition.
Protection from Hedge Program: Fitch views SM's policy of hedging
around 30% of production as supportive of the rating but it exposes
the company to somewhat more cash flow volatility than peers that
are more hedged. The addition of acquisition-related hedging would
be prudent in that it would protect SM's ability to repay debt.
For the remainder of 2024, SM hedged approximately 26% of its
expected oil production at an average price of about $70.10 per
barrel (bbl) and approximately 23% of its expected natural gas
production at an average price of nearly $3.41/mcf. For 2025,
approximately 3% of expected oil production is hedged at $70.77/bbl
and 21% of expected natural gas production is hedged at $3.41/mcf.
Fitch expects hedging levels to increase.
DERIVATION SUMMARY
With 2023 average production of 152 mboepd, SM is smaller than
Denver-Julesburg Basin peer Civitas Resources, Inc. (BB/Positive;
212 mboepd) and Permian peer Permian Resources Corporation
(BB/Positive; 195mboepd), but larger than Permian peers CrownRock,
L.P. (BB-/RWP; 147 mboepd) and Matador Resources Company
(BB-/Positive; 132 mboepd).
On a pro forma basis, SM's production scale will approach 200
Mboepd. SM's oil percentage of production at 43% is lower than all
of its peers, which ranged from 47% to 57% in 2023. On a pro forma
basis, SM's oil percentage of production will increase to around
52%. Civitas's pro forma production profile is expected to be 270
mboepd-290 mboepd, and Permian Resources' pro forma production
profile is expected to be approximately 300 mboepd.
SM's Fitch-calculated 2023 unhedged, levered cash netback of
$29.30/boe is below that of peers, which range from $29.70/boe for
Civitas to $37.80/boe for Matador. The introduction of the Uinta
production will increase SM's netbacks around $4/boe due to higher
oil content and lower unit production costs offset somewhat by
negative oil differentials.
The acquisition-related debt brings leverage up to 1.6x which is
still well within the range of peers and the expected generation of
FCF allows for deleveraging in the short term.
KEY ASSUMPTIONS
- West Texas Intermediate oil prices of $75/bbl in 2024, $65/bbl in
2025, $60/bbl in 2026 and 2027 and $57/bbl in the long term;
- Henry Hub natural gas prices of $2.50/mcf in 2024, $3.00/mcf in
2025 and 2026 and $2.75 in the long term;
- Production growth of 11% in 2024 (includes one quarter of XCL
production), 20% in 2025 (from a full year of XCL production),
followed by low-single-digit growth thereafter;
- Capex of between $1.3 billion and $1.4 billion throughout
forecast;
- FCF prioritized for debt repayment.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Fitch expects to resolve the RWP upon completion of the
contemplated transaction under proposed terms and financing.
Factors that Could Lead to Positive Rating Action/Upgrade
Independent of the Transaction
- Production growth resulting in average daily production
approaching 175 mboepd while maintaining inventory and reserve
life;
- Higher netbacks relative to peers stemming from increased liquid
production or lower unit costs;
- Midcycle EBITDA leverage sustained below 2.0x.
Factors that Could Lead to Negative Rating Action/Downgrade
Independent of the Transaction
- A change in financial policy or its hedging program leading to
debt-funded shareholder distributions;
- Material reduction in liquidity or inability to access debt
capital markets;
- Midcycle EBITDA leverage sustained above 2.5x.
LIQUIDITY AND DEBT STRUCTURE
Strong Liquidity: At 1Q24, SM had $506 million of cash on hand,
$2.5 million of letters of credit utilization and no borrowings
under a $1.25 billion credit facility that matures in 2027. SM's
senior secured credit agreement provides for a maximum loan amount
of $3.0 billion with a borrowing base of $2.5 billion and elected
commitment of $1.25 billion.
The credit facility has two financial maintenance covenants: total
funded debt/adjusted EBITDAX ratio of no greater than 3.5x and an
adjusted current ratio no less than 1.0/1.0. Fitch does not see any
covenant pressure through the rating horizon. The company may
increase the elected commitment and extend the maturity as part of
the acquisition.
Fitch believes liquidity will remain strong through the forecast,
given the company's modest capital program, improving cost
structure and solid hedging program, which supports FCF
generation.
ISSUER PROFILE
SM is an independent E&P company that operates in the Midland Basin
and in South Texas, which includes the Eagle Ford and Austin Chalk
basins. SM averaged 145.1 Mboepd of production during 1Q24,
including oil, natural gas liquids (NGLs) and gas.
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
----------- ------ -------- -----
SM Energy Company LT IDR BB- Rating Watch On BB-
senior secured LT BB+ Rating Watch On RR1 BB+
senior unsecured LT BB- Rating Watch On RR4 BB-
SM ENERGY: Moody's Affirms 'Ba3' CFR, Outlook Remains Stable
------------------------------------------------------------
Moody's Ratings affirmed SM Energy Company's Ba3 Corporate Family
Rating, Ba3-PD Probability of Default Rating, and B1 senior
unsecured notes. The rating outlook remains stable.
These ratings actions follow the public announcement of SM's
agreement to acquire 80% the assets of XCL Resources (XCL, unrated
and a portfolio company of EnCap Investments L.P. and Rice
Investment Group) for $2.0 billion in cash. The acquisition is
expected to close in September 2024, subject to certain closing
conditions and regulatory reviews.
"SM will incur a significant amount of debt to fund this
transaction, resulting in a deterioration in its credit metrics,
but the deal will improve its scale and geographic diversity," said
Jake Leiby, Moody's Ratings Senior Analyst. " Moody's expect the
company's first priority for free cash flow after closing to be
repaying a meaningful portion of the debt incurred to fund the
acquisition."
RATINGS RATIONALE
SM's acquisition of 80% of the assets of XCL will include a large
debt component and result in a near doubling of the company's debt.
The acquisition improve the company's geographic diversity and
drilling inventory, adding around 37,000 net acres with an
estimated 390 net future drilling locations in the Uinta Basin to
SM's asset portfolio. SM will also benefit from an increase in
scale as Moody's now expect 2025 production to approach 200 Mboe/d,
versus Moody's prior expectation for 2025 production around 160
Mboe/d, and an improvement in its margins. These positive
attributes are offset by the integration risks inherent in M&A,
execution risks associated with the entrance into a new basin, and
the need to generate free cash flow for debt reduction
post-acquisition.
SM's Ba3 CFR is supported by sizable acreage position in the
Midland Basin, competitive cost structure, track record of
consistent organic production and reserve growth, and Moody's
expectation for continued consistent free cash flow generation and
improving leverage in 2025 following the XCL acquisition. The
rating is also supported by its geographic diversity, which will be
further enhanced by the XCL acquisition. SM's credit profile is
constrained by its scale relative to higher rated E&P peers and the
increase in leverage that will come with the XCL acquisition.
Moody's expect the company to emphasize debt reduction over sizable
dividend increases and share buybacks in the coming years in order
to return leverage to management's 1.0x long-term target.
The SGL-1 rating reflects SM's very good liquidity supported by its
ability to generate free cash flow and its available revolver
capacity. Moody's expect SM to have -$50-100 million of cash on
hand and around $1.5 billion of available borrowing capacity under
its secured revolving credit facility after closing the XCL
acquisition. The revolver currently has a $2.5 billion borrowing
base and $1.25 billion of lender commitments, however, lender
commitments are expected to increase to in connection with the XCL
acquisition. The company has also obtained a $1.2 billion senior
unsecured 364-day bridge facility to support the acquisition,
however, Moody's expect that SM Energy will fund the acquisition
primarily with long-term debt on or prior to acquisition close to
retain its very good liquidity.
Moody's expect SM to generate sufficient cash flow to cover its
spending requirements, despite the higher level of annual capital
spending that will be required to maintain its larger production
base pro forma for the XCL acquisition, and for free cash flow to
be applied to debt reduction. The company has been an active
repurchaser of its shares in recent years, however, Moody's expect
repurchase activity to be significantly slowed until the company's
leverage returns to below its long-term target of 1.0x. SM's
revolver includes financial covenants requiring maintenance of
total debt to EBITDAX of no greater than 3.5x and a current ratio
of no less than 1.0x. Moody's expect the company to maintain ample
headroom under its covenants.
SM's senior unsecured notes are rated B1, one notch below the Ba3
CFR, reflecting the notes' subordination to the senior secured
revolving credit facility's priority claim to the company's assets.
The revolving credit facility has a priority claim over SM's assets
and is secured by substantially all of SM's proved oil and gas
reserves.
The stable outlook reflects Moody's expectation that SM will
continue to generate free cash flow and prioritize debt reduction
after the closing of the XCL acquisition.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
SM's credit ratings could be upgraded if the company meaningfully
reduces debt after the acquisition closes, demonstrates an ability
to maintain its increased production scale at competitive returns
on investment, and maintains RCF/debt above 50%. Ratings could be
downgraded if RCF/Debt falls below 30%. An additional leveraging
acquisition or substantial returns to shareholders prior to
achieving expected debt reduction could also lead to a downgrade in
the ratings.
SM Energy Company is a Denver, Colorado based publicly traded E&P
company with primary production operations in the Eagle Ford Shale
(Webb County) and the Midland Basin (Howard, Upton, Midland and
Martin Counties) of Texas.
The principal methodology used in these ratings was Independent
Exploration and Production published in December 2022.
SPECTRUM BRANDS: Fitch Affirms 'BB' LongTerm IDR, Outlook Stable
----------------------------------------------------------------
Fitch Ratings has affirmed all of Spectrum's ratings, including
Spectrum Brands, Inc. and SB/RH Holdings, LLC's (SB/RH) Long-Term
Issuer Default Ratings (IDRs) at 'BB', Spectrum Brands, Inc.'s
secured credit facilities at 'BBB-'/'RR1', and its unsecured notes
at 'BB'/'RR4'. Fitch has at the same time withdrawn SB/RH's IDR and
assigned a Long-Term IDR of 'BB' to Spectrum Brands Holdings, Inc.
The Rating Outlook is Stable.
The assignment of a 'BB' IDR to Spectrum Brands Holdings, Inc.
follows the announcement that it will guarantee the 2031 notes and
be the filer of reports moving forward.
Spectrum's ratings and Outlook reflects Fitch's expectation that
its recovering EBITDA and material debt reduction will lead to
EBITDA leverage declining to below 2x in fiscal 2024, and sustained
in the mid to high 2x range in 2025 and thereafter, compared to
6.7x in fiscal 2023. The rating also reflects the lack of clarity
around Spectrum's longer-term business mix, driven by the potential
divestiture of its Home and Personal Care (HPC) business and active
history of M&A.
Fitch is withdrawing the ratings on SB/RH Holdings, LLC because it
will no longer issue financials after Spectrum Brands Holdings,
Inc. guaranteed its 2031 notes. The reason for the withdrawal is
insufficient information moving forward.
KEY RATING DRIVERS
Recovering EBITDA: Fitch's base case assumes Spectrum's
Fitch-calculated EBITDA could improve to approximately the high
$200 million range in FY 2024, up from a challenging FY 2023, when
the company generated EBITDA of $222 million. The company's
improved EBITDA generation is driven by lower inventory costs and
productivity initiatives, leading to gross margins improving to
around 37% through the first half of FY 2024. This is compared to
approximately 30% through the first half of FY 2023. Fitch believes
Spectrum's Fitch-calculated EBITDA margin could be in the high 9%
range in 2024 and improve to the 10%-11% range in 2025 and
thereafter.
Fitch has not incorporated the potential divestiture of HPC in its
base case. However, if Spectrum were to divest HPC it would likely
result in improved profit margins but a decline in EBITDA. HPC has
historically represented around 40% of Spectrum's revenue and
approximately 20%-25% of EBITDA (before corporate overhead and
excluding the impact of Hardware and Home Improvement).
Debt Paydown Drives Deleveraging: Fitch expects Spectrum's EBITDA
leverage could decline to below 2x in FY 2024, driven by EBITDA
recovery and material debt pay down. On May 20, 2024, Spectrum
announced a tender offer for up to $925 million for the unsecured
notes in its capital structure, which was subsequently upsized to
$1.16 billion on June 4th, 2024. After the conclusion of the tender
process, Fitch expects that Spectrum could have around $500 million
of debt remaining (including $350 million in convertible notes due
in 2029 that the company recently issued).
Spectrum has a 2.0x-2.5x net leverage target (which broadly equates
to 2.5x-3.0x on a Fitch calculated basis). Fitch's base case
assumes that in 2025 and thereafter, Spectrum's leverage could
increase to the mid-to-high 2x range because of debt financed M&A
or other initiatives such as divestitures. If Spectrum were to
divest its HPC segment, Fitch expects that its EBITDA leverage
would remain below 3.0x.
Uncertain Business Makeup: In recent years, the company has made
several large asset sales and acquisitions that have altered its
profile. The company has indicated it is focused on becoming a more
focused pet, home and garden company, and publicly stated it plans
to divest the HPC segment. Due to uncertainty regarding a potential
transaction, Fitch's current base case assumes the HPC segment
remains part of Spectrum's structure. Fitch also expects the
company will remain opportunistic in its approach to M&A moving
forward, given management's active history.
Sales Recovering: Spectrum's sales could decline around 1% in
fiscal 2024 (ending September 2024) to approximately $2.9 billion.
The modest decline in 2024 revenues is driven by good performance
in the H&G segment, offset by the initiatives the company took to
reduce SKUs in its GPC segment (the impact of which Fitch expects
to be contained to 2024) and continued weakness in the HPC
segment.
As the company laps these pressures, and assuming normal weather
for the gardening season, Fitch's base case assumes that revenues
could grow in the low single digit range in 2025 and 2026, driven
by innovation, more normalized consumer demand and modest M&A
activity.
Reasonably Diverse Portfolio: Spectrum has three distinct
verticals, with good breadth within each. The company is targeting
divesting its HPC segment in order to become a home & garden and
pet care business. This would reduce the company's business scope
and scale. However, even after potentially divesting HPC, the
company's business profile would remain diverse, with a portfolio
similar to that of Central Garden & Pet Company (BB/Stable), with
adequate diversification across both the pet care (approximately
39% of FY 2023 revenue) and home & garden verticals (18% of FY 2023
revenue).
Geographically, roughly three-quarters of the company's FY 2023
revenue is generated from North America, but Spectrum has some
diversity, with exposure to EMEA and Latin America.
Parent Subsidiary Linkage: Fitch's analysis includes a weak
parent/strong subsidiary approach between the parent, Spectrum
Brands Holdings, Inc. and its subsidiary Spectrum Brands, Inc.
Fitch assesses the quality of the overall linkage as high, with
open access and control and open legal ring-fencing, which results
in an equalization of the IDRs.
DERIVATION SUMMARY
Spectrum's 'BB' rating reflects the company's low leverage across
the rating horizon, its relatively diversified portfolio, as well
as uncertainty around the company's business mix over the next
several years.
Spectrum is similarly rated to ACCO Brands Corporation (ACCO;
BB/Stable), Central Pet & Garden (CENT; BB/Stable) and has a higher
rating than Newell Brands Inc. (B+/Stable). Spectrum has greater
product diversity than ACCO or CENT due to its exposure to more
product segments. If Spectrum were to divest its HPC segment, its
business profile would remain diverse, with a portfolio similar to
that of CENT. Spectrum's EBITDA could be similar to ACCO and CENT
in 2024. Fitch expects Spectrum's leverage could trend in the
mid-to-high 2x range in 2025 and thereafter, lower than ACCO and
CENT who are expected to be in the 3x range.
Newell's scale in terms of revenue and EBITDA is materially larger
than these consumer goods peers (including Spectrum), and it has
much broader product diversity. However, performance has been more
erratic and Fitch expects Newell's leverage to remain materially
higher than similarly rated consumer goods peers over the medium
term, with EBITDA leverage forecasted to be in the high 5x in 2025
(from just over 6x in 2024).
KEY ASSUMPTIONS
- Fitch's base case assumes the HPC business remains with
Spectrum;
- Revenue is forecast to decline modestly in fiscal 2024, to around
$2.9 billion from $2.92 billion in 2023 (September 30 FYE), with
improved demand in Home & Garden offset by sales declines in Global
Pet Care and continued softness in home appliances in the Home &
Personal Care segment. Sales could grow in the low single digit
range in 2025 and beyond, driven by investments the company is
making to drive growth, more normalized demand, M&A activity, and
assuming normal weather;
- Fitch-adjusted EBITDA in fiscal 2024 could improve to around $281
million from $222 in 2023, with improved inventory costs and
productivity initiatives driving gross margin improvements. EBITDA
margins could improve toward the high 9% in 2024 and to the 10%
range in 2025 from 7.6% in 2022, driven by top line growth and
continued focus on cost savings;
- FCF could be negative at around $50 million in 2024, driven by
working capital and several onetime cash costs, before improving to
the $50 million-$100 million in 2025 and thereafter;
- Fitch expects EBITDA leverage could decline to below 2x in fiscal
2024, from 6.7x in 2023, and increase to the mid-to-high 2x range
in 2025 and thereafter as a result of debt financed M&A or other
initiatives such as divestitures;
- Floating interest rates are assumed in the 4% to 5.5% range
across the rating horizon.
RECOVERY ANALYSIS
Fitch has assigned Recovery Ratings (RRs) to the various debt
tranches in accordance with Fitch criteria, which allows for the
assignment of RRs for issuers with IDRs in the 'BB' category. Due
to the distance to default, RRs in the 'BB' category are not
computed by bespoke analysis. Instead, they serve as a label to
reflect an estimate of the risk of these instruments relative to
other instruments in the entity's capital structure.
Fitch assigned the first-lien secured debt a 'BBB-'/'RR1', notched
up two from the IDR and indicating outstanding recovery prospects
given default. Unsecured debt will typically achieve average
recovery, and was thus assigned a 'BB'/'RR4' rating.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Increased clarity around management's operating and financial
strategies, combined with consistent sustained top line and profit
growth, and EBITDA leverage sustained below 3.0x.
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- A downgrade could result from a lack of clarity on the company's
forward operating strategy, leading to further questions about the
company's operating model, or an extended period of operating
weakness yielding EBITDA leverage sustained above 4.0x.
LIQUIDITY AND DEBT STRUCTURE
Good Liquidity: Fitch expects Spectrum will maintain good
liquidity, supported by cash of around $746 million and short-term
investments of around $500 million on balance sheet as of March 31,
2024. This cash balance is supported by $490.3 million of borrowing
capacity under its $500 million revolving credit facility (net of
$9.7 million in letters of credit) which matures in 2028.
Fitch believes that Spectrum's cash and investments, supported by
the proceeds from the $350 million in exchangeable notes the
company announced in May 2024, will be sufficient to fund the
company's debt tender offer as well as modestly negative free cash
flow in FY 2024. Fitch's base case assumes that after generating
negative FCF in 2024, Spectrum could generate FCF in the $50
million-$100 million range in 2025 and thereafter.
As of March 31, 2024, Spectrum's capital structure included its
revolving credit facility as well as approximately $1.3 billion of
senior unsecured notes maturing between 2026 and 2031. Fitch
expects Spectrum will have around $500 million of debt moving
forward, including the $350 million of exchangeable notes maturing
in 2029.
ISSUER PROFILE
Spectrum Brands is a diversified consumer products company which
currently competes in a number of segments, including pet care
(GPC), home and garden and home and personal care.
SUMMARY OF FINANCIAL ADJUSTMENTS
Material financial adjustments include stock-based compensation,
safety recalls, divestitures, legal and environmental remediation
reserves, inventory step-up and other non-operating expenses.
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
----------- ------ -------- -----
Spectrum Brands
Holdings, Inc. LT IDR BB New Rating WD
Spectrum Brands,
Inc. LT IDR BB Affirmed BB
senior unsecured LT BB Affirmed RR4 BB
senior secured LT BBB- Affirmed RR1 BBB-
SB/RH Holdings, LLC LT IDR BB Affirmed BB
LT IDR WD Withdrawn BB
SPIRIT AEROSYSTEMS: Moody's Puts 'B2' CFR on Review for Upgrade
---------------------------------------------------------------
Moody's Ratings has placed all of its ratings, including the B2
corporate family rating, the B2-PD probability of default rating,
the Ba2 backed first lien senior secured rating assigned to the
company's term loan and notes, the B3 backed second lien senior
secured notes rating and the Caa1 backed senior unsecured notes
rating of Spirit AeroSystems, Inc. on review for upgrade. This
follows this morning's announcement that it's parent, Spirit
AeroSystems Holdings, Inc. (together, "Spirit") has agreed to be
acquired by The Boeing Company ("Boeing"). Previously, the outlook
was negative.
Boeing has agreed to acquire all of the equity of Spirit for $37.25
per share or approximately $4.7 billion. The transaction is valued
at $8.3 billion including Spirit's net debt. Completion of the
acquisition is subject to approval by Spirit's shareholders,
clearance from regulatory authorities and the acquisition by Airbus
of the assets Spirit uses to serve Airbus programs. The companies
expect the transaction to close in the middle of 2025.
In Moody's review, Moody's will consider the benefits to creditors
for Spirit being owned by Boeing and the extent of the improvement
in the credit risk of Spirit's debt. Spirit's debt was $4.1
billion on March 28, 2024 across its term loan, first and second
lien notes and unsecured notes obligations.
RATINGS RATIONALE / FACTORS THAT COULD LEAD TO AN UPGRADE OR
DOWNGRADE OF THE RATINGS
The B2 corporate family rating ("CFR") reflects Spirit's weak
credit metrics and mixed track record of execution heading into
2024. Performance worsened in 2024 following the door plug incident
on Alaska Airlines flight 1282 that occurred on January 5th.
Spirit's deliveries of 737 fuselages to Boeing declined as Boeing
significantly curtailed its production of 737s so far this year
while it focuses on improving its production quality. Additionally,
and more impactfully for Spirit, on March 1, 2024, Boeing began
requiring 737 fuselages to be defect-free before being approved for
shipment from Spirit's Wichita facilities. This requirement lowered
Spirit's operating profits and cash flows in the first quarter and
will continue to pressure its performance until Boeing restores
narrowbody production to close to the US Federal Aviation
Administration's current cap of 38 per month. In April 2024, Boeing
provided a $425 million advance payment for 737 fuselages to Spirit
to allow Spirit to maintain adequate liquidity.
Debt-to-EBITDA was 9.0x and EBIT/interest was about 0.5x at March
28, 2024. Free cash flow was negative. The current lowered
production levels and the uncertain timeframe for these to recover
close to previously planned levels near 40 or more per month would
normally have pressured the B2 rating. However, the known
negotiations - and expectations that an agreement would be reached
- for the acquisition by Boeing mitigates near term ratings
pressure.
If Boeing assumes or guarantees any of Spirit's debt obligations,
Moody's will upgrade the ratings on such obligations. The ratings
may also be upgraded for any debt instruments that Moody's expect
Boeing to retire. On a standalone basis under a scenario where the
transaction does not close, the ratings could be downgraded if
monthly deliveries of 737 fuselages do not increase to levels that
would alleviate the need for additional advances from Boeing or if
Airbus does not agree to higher pricing for its programs with
Spirit. The ratings could be upgraded if operations improve such
that operating margin approaches 10% or liquidity improves,
evidenced by sustained positive free cash flow generation.
The principal methodology used in these ratings was Aerospace and
Defense published in October 2021.
Headquartered in Wichita, Kansas, Spirit AeroSystems, Inc. is a
subsidiary of publicly traded Spirit AeroSystems Holdings, Inc.
(NYSE: SPR). The company designs and manufactures aerostructures
for commercial aircraft. Components include fuselages, pylons,
struts, nacelles, thrust reversers and wing assemblies, principally
for Boeing but also for Airbus and others. The company reported
$6.0 billion of revenue for 2023.
SPIRIT AIRLINES: Updates Leadership, Names Fred Cromer as EVP, CFO
------------------------------------------------------------------
Spirit Airlines announced on July 1, 2024, executive leadership
updates including the appointment of Fred Cromer as Executive Vice
President and Chief Financial Officer, effective July 8, 2024.
Cromer will work closely with the Company's Interim CFO, Brian
McMenamy, who will remain in a senior finance role with the Company
to ensure a smooth transition.
Cromer brings three decades of experience in the aviation industry,
with expertise in financial management, strategic planning,
treasury and operations. Cromer has held numerous executive
positions over his career, most recently serving as Chief Executive
Officer, and previously Chief Financial Officer, of Xwing, Inc., a
fast-growing aviation technology company and pioneer in developing
the world's first autonomous regional cargo aircraft. Prior to
joining Xwing, Cromer served as President of Bombardier Commercial
Aircraft from 2015 to 2020, President of International Lease
Finance Corporation from 2008 to 2015, and Chief Financial Officer
and Vice President at ExpressJet Airlines from 1998 to 2008. Cromer
holds an A.B. degree in Economics from the University of Michigan
and an MBA in Finance from DePaul University.
"Fred's extensive career in aviation and his proven track record of
strategic financial leadership across all aspects of the industry
bring valuable insights and expertise that will help us
successfully evolve our business model as we navigate the changes
in the demand environment," said Ted Christie, Spirit's President
and Chief Executive Officer. "Fred has significant experience
leading companies through periods of substantial growth and
transformation, and we are very excited to bring aboard someone of
Fred's caliber as we continue to execute on Spirit's transformation
strategy."
"I'm thrilled to be joining Spirit at such a pivotal time for both
the company and the industry," said Cromer. "I really look forward
to working alongside Ted and the rest of the Spirit team to help
drive continuous improvement and build a sustainable and successful
business going forward."
Spirit is pleased to announce additional significant leadership
updates:
* Dana Shapir Alviene has been appointed Senior Vice President
of Inflight and Airport Experience, effective July 29, 2024. Shapir
Alviene joins Spirit from Avianca where she served as Senior Vice
President of Customer Experience. Prior to Avianca, she held
multiple leadership roles at JetBlue Airways between 2014 and 2023,
including Vice President, Airports Experience. She began her
aviation career at Southwest Airlines where she served in key
operational, customer service and leadership roles. Shapir
Alviene's extensive operational and customer expertise will elevate
Spirit's Guest experience and strengthen collaboration between its
Airports and Inflight teams.
* Tomas Ranaldi has been promoted to Vice President of
Financial Planning & Analysis, effective immediately. Ranaldi has
been an important member of the Spirit team since 2015, excelling
in various roles within the finance department.
Christie continued, "We are delighted to welcome Dana to the Spirit
Family and to elevate Tomas to his new role. I also want to thank
Brian for stepping into the role of Interim CFO and agreeing to
continue working with us going forward. He is an invaluable part of
the Spirit team, and his experience and knowledge of Spirit will
help ensure a smooth transition, as well as bringing wise
leadership to ongoing projects."
About Spirit Airlines
Spirit Airlines Inc. is a major United States ultra-low cost
airline headquartered in Miramar, Florida, in the Miami
metropolitan area.
As of March 31, 2024, the Company had $9.5 billion in total assets,
$8.5 billion in total liabilities, and $1 billion in total
stockholders' equity.
* * *
In June 2024, 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.
In January 2024, Moody's Investors Service downgraded its ratings
of Spirit Airlines, including the corporate family rating to Caa2
from Caa1 and probability of default rating to Caa2-PD from
Caa1-PD. Moody's also downgraded the backed senior secured rating
assigned to Spirit IP Cayman Ltd.'s 8% senior notes, which are
secured by the company's loyalty program and brand IP, to Caa2 from
B2. The speculative grade liquidity rating remains unchanged at
SGL-3 and the rating outlook remains negative. The downgrade of
the corporate family rating to Caa2 reflects Moody's belief that
the potential of a default has increased since Judge William Young
ruled in January that the agreed acquisition by JetBlue Airways
Corp. would be anti-competitive and a violation of the Clayton Act.
The downgrades of the CFR as well as of the senior notes secured by
Spirit's loyalty program IP and brand IP reflect the increased
potential of a default and less than a full recovery, whether in a
formal reorganization or if the senior secured notes are refinanced
or retired for less than face value. The Caa2 instrument rating
incorporates a negative one notch override of the LGD model to
reflect the potential for a more than nominal loss on the
instrument in a restructuring or exchange scenario. Following the
ruling on January 16, the market price of the Notes fell to around
50 from the low to mid-70s since mid-November. The notes price has
increased to the low 60s following the announcement that Spirit and
JetBlue would appeal the District Court's ruling.
Moody's continues to expect Spirit's operations to generate an
operating loss in 2024 and again in 2025 on a reported basis.
Moody's forecasts about breakeven operating cash flow in 2024, an
improvement from its forecast for negative $150 million in 2023.
Moody's projects cash to fall from the $1.1 billion on hand on Sep.
30, 2023, towards $700 million by the end of 2024.
The Company's $300 million revolver expires on Sept. 30, 2025.
Alternate sources of liquidity are very limited.
In September 2023, Egan-Jones Ratings Company maintained its 'CCC+'
foreign currency and local currency senior unsecured ratings on
debt issued by Spirit Airlines, Inc.
TARONIS FUELS: Unsecureds Will Get 9.2% in Liquidating Plan
-----------------------------------------------------------
Taronis Fuels, Inc. and its affiliates filed with the U.S.
Bankruptcy Court for the District of Delaware an Amended Combined
Chapter 11 Plan of Liquidation and Disclosure Statement dated June
24, 2024.
The Debtors manufactured and distributed industrial and medical
gases and associated welding and safety supplies. The Debtors
supplied its customers with traditional industrial gas products
ranging from bulk quantities of cryogenic gases to individual
packaged cylinders and complementary products including welding
supplies.
The lead debtor in these Chapter 11 Cases, Taronis Fuels, was
initially organized as a Delaware limited liability company on
February 1, 2017, under the name MagneGas Welding Supply, LLC, to
be a holding company for Taronis Technologies' welding supply
companies. On December 5, 2019, Taronis Technologies spun-off
Taronis Fuels from the remainder of its businesses through a
distribution of 100% of the issued and outstanding shares of common
stock of Taronis Fuels to the shareholders of Taronis Technologies
on a pro rata basis.
As of the Petition Date, the Debtors had approximately $10.1
million in assets, cash and cash equivalents, accounts receivable,
inventory, and deposits, and approximately $26.2 million in total
liabilities, primarily relating to (i) rent-related obligations
under the Debtors' leases for their distribution facilities in the
South and West Regions, (ii) approximately $5.6 million in
principal and accrued interest under the Prepetition Loan
Agreement; (iii) approximately $4.2 million for trade and other
third party accounts payable; (iv) unsecured notes payables to
certain parties; and (v) certain obligations to employees.
The Combined Plan and Disclosure Statement is a liquidating
chapter 11 plan for the Debtors. The Purchased Assets from both the
California Sale and the Texas Sale have been transferred from the
Debtors to the respective Purchasers as part of closing of each
sale. The Combined Plan and Disclosure Statement provides that,
upon the Effective Date, the Liquidating Trust Assets will be
transferred to the Liquidating Trust and the Debtors will be
dissolved. The Liquidating Trust Assets will be administered and
distributed as soon as practicable pursuant to the terms of the
Combined Plan and Disclosure Statement and Liquidating Trust
Agreement.
Holders of Miscellaneous Secured Claims (classified in Class 1) are
not Impaired and will receive, either (a) such other treatment as
may be agreed upon by any such holder of a Miscellaneous Secured
Claim, the Debtors (prior to the Effective Date), and the
Liquidation Trustee (after the Effective Date), or (b) at the
Debtors' option: (i) payment in full in cash of the allowed amount
of such Miscellaneous Secured Claim (as determined by settlement or
order of the Bankruptcy Court), or (ii) treatment consistent with
the provisions of section 1129(a)(9) of the Bankruptcy Code.
Holders of Non-Tax Priority Claims (classified in Class 2) are not
Impaired and will be paid in full in cash on the Effective Date of
the allowed amount of such claim, or receive such other treatment
as may be agreed upon by the holder of a Non-Tax Priority Claim,
the Debtors (prior to the Effective Date), and the Liquidation
Trustee (after the Effective Date).
Holders of General Unsecured Claims (classified in Class 3) are
Impaired and will be paid Pro Rata from the Liquidating Trust
Assets (including cash and recoveries of Estate Claims), net of
Allowed Professional Fee Claims, Allowed Administrative Expense
Claims, Allowed Priority Tax Claims, Allowed Non-Tax Priority
Claims, and the administrative expenses of the Liquidating Trustee
and his or her professionals.
Holders of Intercompany Claims (classified in Class 4) and Existing
Equity (classified in Class 5) are Impaired and are not entitled to
receive any Distribution.
Class 3 consists of General Unsecured Claims. In full and complete
satisfaction of an Allowed General Unsecured Claim against the
Debtors, each Holder of an Allowed Class 3 General Unsecured Claim
shall receive its Pro Rata share of the Liquidating Trust Assets
(including cash and recoveries of Causes of Action), net of Allowed
Professional Fee Claims, Allowed Administrative Expense Claims,
Allowed Priority Tax Claims, Allowed Non-Tax Priority Claims, and
Liquidating Trust Expenses. The allowed unsecured claims total
$18,439,964.40. This Class will receive a distribution of 9.2% of
their allowed claims. This Class is impaired.
On the Effective Date, existing equity of the Debtors shall be
cancelled, and the Holders of existing equity interests shall
receive no Distribution under the Combined Plan and Disclosure
Statement.
The Liquidating Trust will be formed on the Effective Date in
accordance with the Combined Plan and Disclosure Statement and
pursuant to the Liquidating Trust Agreement for the purpose of,
among other things, (i) implementing the Combined Plan and
Disclosure Statement, (ii) prosecuting the Causes of Action
(including Avoidance Actions and D&O Claims), (iii) investigating
and, if appropriate, pursuing other Causes of Action (including
Avoidance Actions and D&O Claims), (iv) administering, monetizing
and/or liquidating the Liquidating Trust Assets, (v) resolving all
Disputed Claims, and (v) making all Distributions to Holders of
Allowed Claims from the Liquidating Trust and as provided for in
the Combined Plan and Disclosure Statement and the Liquidating
Trust Agreement.
A full-text copy of the Amended Combined Plan and Disclosure
Statement dated June 24, 2024 is available at
https://urlcurt.com/u?l=8JbENy from PacerMonitor.com at no charge.
Counsel to the Debtors:
Jeremy W. Ryan, Esq.
L. Katherine Good, Esq.
Aaron H. Stulman, Esq.
Katelin A. Morales, Esq.
Sameen Rizvi, Esq.
POTTER ANDERSON & CORROON LLP
1313 North Market Street, 6th Floor
Wilmington, DE 19801
Tel: (302) 984-6000
Email: jryan@potteranderson.com
kgood@potteranderson.com
astulman@potteranderson.com
kmorales@potteranderson.com
srizvi@potteranderson.com
About Taronis Fuels
Taronis Fuels, Inc. and its affiliates manufacture and distribute
industrial, medical, specialty and beverage gases and associated
welding and safety supplies.
Taronis Fuels and its affiliates sought protection under Chapter 11
of the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 22-11121) on
Nov. 11, 2022. In the petitions signed by their chief executive
officer, R. Jered Ruyle, the Debtors estimated $10 million to $50
million in both assets and liabilities. Judge Brendan L. Shannon
oversees the case.
The Debtors tapped Potter Anderson & Corroon LLP as general
bankruptcy counsel; Aurora Management Partners, Inc. as
restructuring advisor; and Chipman Brown Cicero & Cole, LLP as
special litigation counsel. Donlin, Recano & Company Inc. is the
claims and noticing agent and administrative advisor.
THREE PARTRIDGE: Seeks to Hire Finestone Hayes as Legal Counsel
---------------------------------------------------------------
Three Partridge Road, Inc. seeks approval from the U.S. Bankruptcy
Court for the Northern District of California to hire Finestone
Hayes LLP as its counsel.
The firm will render these services:
a. advise and represent the Debtor as to all matters and
proceedings within this Chapter 11 case, other than those
particular areas that may be assigned to special counsel;
b. assist, advise, and represent the Debtor in any manner
relevant to a review of its debts, obligations, maximization of its
assets and where appropriate, disposition thereof;
c. assist, advise, and represent the Debtor in the operation
of its business;
d. assist, advise, and represent the Debtor in the performance
of all of its duties and powers under the Bankruptcy Code and
Bankruptcy Rules, and in the performance of such other services as
are in the interests of the estate;
e. assist, advise, and represent the Debtor in dealing with
its creditors and other constituencies, analyzing the claims in
this case, and formulating and seeking approval of a plan of
reorganization.
The firm's hourly rate for partners is $610 and its rates for
associates and contract attorneys range from $420-$640.
The firm received a pre-petition retainer of $50,000 in three
portions. The Debtor paid the firm $10,000 on April 16, 2024, and
$25,000 on May 30, 2024. The final payment of $15,000 was made on
June 7, 2024, from a bank account in the name of the Debtor’s
CEO's spouse.
Ryan Witthans, Esq., a partner at Finestone Hayes LLP, disclosed in
a court filing that the firm is a "disinterested person" as the
term is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Stephen D. Finestone, Esq.
Ryan A. Witthans, Esq.
Finestone Hayes LLP
456 Montgomery Street, Floor 20
San Francisco, CA 94104
Tel: (415) 421-2624
Fax: (415) 398-2820
Email: sfinestone@fhlawllp.com
rwitthans@fhlawllp.com
About Three Partridge Road
Three Partridge Road, Inc. is an e-commerce logistics company in
San Francisco, Calif.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Calif. Case No. 24-30440) on June 11,
2024, with $238,980 in assets and $2,093,743 in liabilities. Yong
Soo Chung, chief executive officer, signed the petition.
Judge Dennis Montali presides over the case.
Stephen D. Finestone, Esq., at Finestone Hayes, LLP represents the
Debtor as legal counsel.
TRACK ON 86: Seeks OK to Sell New Paltz Property for $2.2-Mil.
--------------------------------------------------------------
Track On 86, LLC will ask the U.S. Bankruptcy Court for the
Southern District of New York at a hearing on July 9 to approve the
sale of its real property.
Casey McCann, the buyer, offered $2.2 million for the property
located at 500 South Ohioville Road, New Paltz, N.Y.
The property is being sold "free and clear" of liens, claims,
encumbrances and other interests.
The property is encumbered by a mortgage held by The Bank of Greene
County on which there is an outstanding balance in the approximate
amount of $800,000. In addition, there are outstanding real
property taxes owed to the Ulster County Treasurer in the amount of
$100,000, inclusive of accrued interest.
Based upon the company's estimates, the proceeds from the sale will
be sufficient to satisfy both liens encumbering the property,
according to the company's attorney, Richard Feinsilver, Esq.
About Track On 86
Track on 86, LLC, a company in New Paultz, N.Y., is a single asset
real estate debtor (as defined in 11 U.S.C. Section 101(51B)). It
owns an 80 acre horse farm consisting of dwelling, cottage, two
barns, and horse track valued at $2.5 million in the aggregate.
Track on 86 filed Chapter 11 petition (Bankr. S.D.N.Y. Case No.
24-35119) on Feb. 8, 2024, with $1 million to $10 million in assets
and $500,000 to $1 million in liabilities. Garrett Doyle, managing
member, signed the petition.
Judge Cecelia G. Morris oversees the case.
Richard S Feinsilver, Esq., is the Debtor's legal counsel.
TRIUMPH GROUP: Moody's Upgrades CFR to B3, Outlook Stable
---------------------------------------------------------
Moody's Ratings upgraded the corporate family rating of Triumph
Group, Inc. to B3 from Caa1 and the probability of default rating
to B3-PD from Caa1-PD. Concurrently, Moody's affirmed the B2 rating
on the senior secured first lien notes due in 2028, with a stable
outlook. Previously, the CFR and PDR were on review for upgrade.
These rating actions conclude the review for upgrade initiated in
December 2023.
The upgrade of the CFR and PDR ratings reflect the use of proceeds
from the sale of Triumph's Product Support business to materially
reduce leverage. Triumph improved its capital structure by paying
off senior unsecured notes due in 2025 in their entirety and a
portion of its senior secured first lien notes.
The affirmation of the B2 rating on the senior secured first lien
notes, one notch above the CFR, reflects the first loss absorption
provided by Triumph's sizable pension obligation in the event of a
bankruptcy.
The stable outlook reflects Moody's expectation that operating
performance will improve because of the ongoing recovery in
commercial aerospace, expense reduction initiatives and pricing
actions. As a result, Moody's expect the company will continue to
generate positive free cash flow and EBIT/interest expense of 1.0
times over the next 12-18 months.
RATINGS RATIONALE
Triumph's B3 CFR reflects the company's modest free cash flow
generation, high financial leverage and competitive market. Moody's
expect the company will generate 2% free cash flow-to-debt annually
in FY2025 and FY2026 (fiscal year ending March 31). Volume growth
will remain muted in FY2025 primarily because of lower demand from
Boeing, its biggest customer, as production rates for the 737MAX
are limited by quality control challenges. Despite the nearly 40%
reduction of debt and continued deleveraging, Moody's expect
debt/EBITDA will remain high at 6.5 times at FYE2026.
The ratings are supported by Triumph's good scale and established
presence as an aerospace supplier. The company supplies integral
components to several key commercial and military platforms.
Triumph's maintenance, repair, and overhaul (MRO) business
generates about one-third of total revenue, provides good
aftermarket opportunities and is supported by a solid portfolio of
intellectual property.
The SGL-3 speculative grade liquidity rating reflects Moody's
expectations of adequate liquidity over the next 12-18 months.
Moody's expect that cash on hand will remain above $150 million
while free cash flow-to-debt resides in the low single digits. The
company does not have a revolving credit facility. Therefore,
external liquidity is limited to a $75 million accounts receivable
facility that was undrawn as of June 2024 and expires in December
2025.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Ratings could be upgraded if Triumph sustains free cash
flow-to-debt of 5% or if EBIT/interest expense is maintained above
1.5 times. Debt/EBITDA approaching 5.0 times could also support an
upgrade.
Ratings could be downgraded if liquidity weakens or if
EBIT/interest expense declines below 1.0 time.
Headquartered in Radnor, Pennsylvania, Triumph Group, Inc. designs,
engineers, manufactures, repairs and overhauls a broad portfolio of
aerospace and defense systems, components and subsystems. Triumph
generated $1.2 billion of revenue in its most recent fiscal year
ending March 31, 2024.
The principal methodology used in these ratings was Aerospace and
Defense published in October 2021.
TRULEUM INC: Hires Barton CPA to Replace BF Borgers CPA as Auditor
------------------------------------------------------------------
Truleum, Inc. announced July 1, 2024, important update to its
shareholders regarding recent developments concerning the Company's
auditor and the status of its S-1 registration statement.
On May 3, 2024, BF Borgers CPA PC, the Company's former auditor,
was the subject of an SEC Enforcement action. The action resulted
in Borgers being prohibited from practicing as an
accountant/auditor before the SEC. The Company noted that this
enforcement action does not affect the Company's prior public
filings, where Borgers provided audits and opinions. However, this
development has impacted the Company's first quarter 2024
financials and its pending S-1 registration statement.
In response to these events, Truleum, Inc. has taken swift action
to terminate its relationship with BF Borgers CPA PC as the
Company's auditing firm and demanded the return of its audit files.
To ensure the integrity and continuity of its financial reporting,
the Company has engaged Barton CPA, a reputable auditing firm, to
provide an audit letter for the first quarter of 2024 and to
re-audit the prior two years of financials. The Company is
confident that Barton CPA's expertise and thorough approach will
help us navigate this transition smoothly.
Truleum, Inc. anticipates that the current S-1 registration
statement will be amended once Barton CPA has completed the
re-audit of the previous two years' financials. The Company
remains committed to transparency and compliance throughout this
process and is working diligently to address these requirements in
a timely manner.
Additionally, the Company said it obtained a copy of Borgers'
third-party independent audit of their audit procedures. At this
time, the Company does not have any indication that the SEC's
allegations against Borgers involved Truleum's financials.
Nevertheless, the Company is taking all necessary steps to ensure
that its financial statements meet the highest standards of
accuracy and compliance.
"We are please to engage Barton CPA to complete the audit work
previously handled by BF Borgers. Given the SEC's recent
enforcement action against BF Borgers, it was highly unlikely that
the SEC would declare effective our S-1 registration statement,"
Jay Leaver, president of the Company, said.
Truleum, Inc. continues to maintain its focus on obtaining an
effective registration statement followed by an uplist onto the
NYSE: American Stock Exchange and advancing the Company's business
plan. The Company remains dedicated to delivering value to its
shareholders and achieving its strategic objectives.
About Truleum
Truleum, Inc. -- www.truluem.com -- was incorporated on Sept. 26,
2013 in the State of Colorado for the purpose of purchasing,
developing and operating oil and natural gas leases.
"The Company has minimal cash or other current assets and does not
have an established ongoing source of revenues sufficient to cover
its operating costs and to allow it to continue as a going concern.
These conditions raise substantial doubt about the Company's
ability to continue as a going concern. The ability of the Company
to continue as a going concern is dependent on the Company
obtaining adequate capital to fund operating losses until it
becomes profitable. If the Company is unable to obtain adequate
capital, it could be forced to cease operations," said Truleum in
its Quarterly Report for the period ended March 31, 2024.
TUPPERWARE BRANDS: Extends Forbearance Agreement to July 7
----------------------------------------------------------
Tupperware Brands Corporation disclosed in a Form 8-K filed with
the Securities and Exchange Commission on July 1, 2024, that on
June 28, 2024, the Company, Tupperware Products AG, collectively as
borrowers, certain other subsidiaries of the Company, Wells Fargo
Bank, National Association, as administrative agent, and certain
lenders, among others, amended, that certain Forbearance Agreement,
dated as of Feb. 13, 2024, by and among the parties.
As previously disclosed in the Current Report on Form 8-K filed on
June 5, 2024, the Forbearance Agreement provides for, among other
things, the Company's compliance with specified milestones with
respect to business planning and repayment transactions until the
earlier of (a) June 30, 2024 at 11:59 p.m. Eastern time and (b) the
date and time on which the Administrative Agent (at the direction
of the majority Lenders) elects to terminate the Forbearance
Agreement in accordance with its terms. The Forbearance Amendment
(a) extends the Forbearance Termination Date to July 7, 2024 at
11:59 p.m. Eastern time (as such date may be extended for a period
not to exceed five business days by the Administrative Agent in its
sole discretion) and (b) extends certain Forbearance Agreement
Milestones related to the entry into a definitive agreement with
respect to certain repayment transactions from June 22, 2024 (which
had previously been extended by the Administrative Agent in its
sole discretion to June 28, 2024) to July 7, 2024.
About Tupperware Brands
Tupperware Brands Corporation (NYSE: TUP) --
https://www.tupperwarebrands.com -- is a global consumer products
company that designs innovative, functional and environmentally
responsible products. Founded in 1946, Tupperware's signature
container created the modern food storage category that
revolutionized the way the world stores, serves and prepares food.
Today, this iconic brand has more than 8,500 functional design and
utility patents for solution-oriented kitchen and home products.
The company distributes its products into nearly 70 countries,
primarily through independent representatives around the world.
Tampa, Florida-based PricewaterhouseCoopers LLP, the Company's
auditor since 1995, issued a "going concern" qualification in its
report dated Oct. 13, 2023, citing that the Company has experienced
liquidity challenges and is uncertain about its ability to comply
with debt covenants, which resulted in the borrowings under the
Company's credit agreement being classified as current as of Dec.
31, 2022, and that also raises substantial doubt about its ability
to continue as a going concern.
"Given the uncertainties around the Company's liquidity, ability to
execute its revised business plan, and ability to comply (and
current non-compliance) with covenants under its Credit Agreement,
the Company has concluded that there is substantial doubt about its
ability to continue as a going concern for at least one year from
the date of issuance of these Consolidated Financial Statements,"
said Tupperware Brands in its Quarterly Report for the period ended
Sept. 30, 2023.
The Company has not yet filed its Annual Report on Form 10-K for
the fiscal year ended Dec. 30, 2023, and its Quarterly Report on
Form 10-Q for the quarter ended March 30, 2024.
TURKEY LEG: Continued Operations to Fund Plan Payments
------------------------------------------------------
The Turkey Leg Hut & Company LLC filed with the U.S. Bankruptcy
Court for the Southern District of Texas a Subchapter V Plan of
Reorganization dated June 24, 2024.
The Debtor was originally formed by the filing of its Certificate
of Formation with the Secretary of State of the State of Texas on
April 27, 2017 as The Turkey Leg Hut & Company LLC.
Class 2 shall consist of Allowed Unsecured Priority Claims held by
the Internal Revenue Service (IRS); the Texas Workforce Commission;
Texas Comptroller of Public Accounts; City of Houston; and Employee
Claims (Wages). In full satisfaction, the Claimants in Class 2
shall receive 60 consecutive monthly payments, with payments
commencing on the first day of the month following the Effective
Date, and each payment due on the first day of each subsequent
month, unless otherwise provided:
* IRS: 60 consecutive monthly payments of $412.03.
* Texas Workforce Commission: 60 consecutive monthly payments
of $116.38.
* Texas Comptroller of Public Accounts (Sales and Use Tax –
June 2019-March 2024): 60 consecutive monthly payments of
$28,321.23.
* Texas Comptroller of Public Accounts (Sales and Use Tax –
March 27-April 2024): 60 consecutive monthly payments of $858.87.
* Texas Comptroller of Public Accounts (Mixed Beverage Sales
Tax – April 2019-March 2024): 60 consecutive monthly payments of
$15,879.23.
* Texas Comptroller of Public Accounts (Mixed BVG Gross
Receipts – April 2019-March 2024): 60 consecutive monthly
payments of $13,463.80.
* City of Houston: 60 consecutive monthly payments of
$358.41.
* Employee Claims (Wages): 60 consecutive monthly payments of
$1,919.52, to be paid Pro Rata to all of the Employee Claimants.
Class 3 shall consist of Allowed General Unsecured Claims. In full
satisfaction, holders of Claims in Class 3 shall receive the
following Pro Rata consecutive monthly payments, with payments
commencing on the first day of the month of the next month
following the Effective Date, with each subsequent monthly payment
being due on the first calendar date of the following month,
monthly payments of $28,670.53, plus 50% of the Debtor's Net
Profit, up to a total Plan payment of $130,000.00, including
payments made to all other creditors under this Plan. Class 3 is
impaired under the Plan.
In the event of any failure of the Reorganized Debtor to timely
make its required plan payments to Claimants in Class 3, which
shall constitute an event of default under the plan, it shall send
a Notice of Default to the Reorganized Debtor. If Default is not
cured within 30 days of the date of such notice, Claimants in Class
3 may proceed to collect all amounts owed pursuant to state law
without further recourse to the Bankruptcy Court. Claimants in
Class 3 are required to send 4 Notices of Default, and upon the
fourth event of default, Claimants in Class 3 may proceed to
collect all amounts owed under state law without further notice.
Provided, however, that it shall not be considered a Default if the
Debtor did not make a profit in the month in which the Default
occurred.
The equity interest holders of this Plan shall retain their equity
interests.
The payments contemplated in this Plan shall be funded from post
petition operations of the Debtor's restaurant.
A full-text copy of the Subchapter V Plan dated June 24, 2024 is
available at https://urlcurt.com/u?l=6e8Gvc from PacerMonitor.com
at no charge.
About Turkey Leg Hut
Turkey Leg Hut is a Houston-based restaurant specializing in turkey
legs.
Turkey Leg Hut sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Tex. Case No. 24-31275) on March 26,
2024. In the petition filed by Nakia Price, as managing member, the
Debtor estimated assets up to $50,000 and estimated liabilities
between $1 million and $10 million.
Honorable Bankruptcy Judge Eduardo V. Rodriguez oversees the case.
The Debtor is represented by James Q. Pope, Esq. at THE POPE LAW
FIRM.
UNITED TRUSTT: Voluntary Chapter 11 Case Summary
------------------------------------------------
Debtor: United Trustt LLC
2810 North Church Street
Wilmington, DE 19802
Business Description: The Debtor is engaged in activities related
to real estate.
Chapter 11 Petition Date: June 29, 2024
Court: United States Bankruptcy Court
Eastern District of Pennsylvania
Case No.: 24-12255
Judge: Hon. Ashely M Chan
Debtor's Counsel: Roger V. Ashodian, Esq.
Michael. A. Latzes, Esq.(co-counsel)
REGIONAL BANKRUPTCY CENTER OF SOUTHEASTERN PA,
P.C.
101 West Chester Pike, Suite 1A
Haverton, PA 19083
Tel: (215) 545-2000
Email: efiling@mlatzes-law.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $500,000 to $1 million
The petition was signed by Toure I. Phipps - Henderson, managing
member.
The Debtor failed to include in the petition a list of its 20
largest unsecured creditors.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/HYKR6EA/United_Trustt_LLC__paebke-24-12255__0001.0.pdf?mcid=tGE4TAMA
VENEM LLC: Seeks to Hire Oppenhuizen Law as Bankruptcy Counsel
--------------------------------------------------------------
Venem LLC seeks approval from the U.S. Bankruptcy Court for the
Western District of Michigan to hire Oppenhuizen Law Firm, PLC as
its bankruptcy counsel.
The firm's services include:
a. providing information to Debtor with regard to its duties
and responsibilities as required by the United State Bankruptcy
Code of debtor-in-possession;
b. assisting in the preparation of schedules and statement of
affairs;
c. assisting in the preparation of financial statements,
balance sheets, and business plans;
d. pursuing any and all claims of Debtor against third
parties, including, but not limited to, preferences, fraudulent
conveyances and accounts receivable;
e. representing Debtor with regard to any actions brought
against it by third parties in the bankruptcy proceeding;
f. assisting in the negotiations with secured, unsecured, and
priority creditors and preparing a Plan of Reorganization with a
likelihood of confirmation; and
g. obtaining confirmation of a Plan of Reorganization.
The firm will be paid at these rates:
James R. Oppenhuizen $450 per hour
Associates $350 per hour
Paralegal or legal assistant $175 per hour
The firm will be paid a retainer in the amount of $40,000,
including the filing fee.
The firm will also be reimbursed for reasonable out-of-pocket
expenses incurred.
James R. Oppenhuizen, Esq., a partner at Oppenhuizen Law Firm, PLC,
disclosed in a court filing that the firm is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
The firm can be reached at:
James R. Oppenhuizen, Esq.
Oppenhuizen Law Firm, PLC
125 Ottawa Ave. NW, Suite 237
Grand Rapids, MI 49503
Telephone: (616) 730-1861
(616) 648-9221
Email: joppenhuizen@oppenhuizenlaw.com
About Venem LLC
Venem LLC sought protection for relief under Chapter 11 of the
Bankruptcy Code (Bankr. W.D. Mich. Case No. 24-01346) on May 21,
2024, listing $100,001 to $500,000 in both assets and liabilities.
James R. Oppenhuizen, Esq. at Oppenhuizen Law Firm, PLC represents
the Debtor as counsel.
VERDE RESOURCES: Commits $750,000 in Sustainable Pavement Project
-----------------------------------------------------------------
Verde Resources, Inc. disclosed in a Form 8-K Report filed with the
U.S. Securities and Exchange Commission that on June 27, 2024, the
Company entered into an agreement with The National Center for
Asphalt Technology at Auburn University to undertake a 3-year
Performance Testing Project titled "Structural Capacity of
Sustainable Pavement."
The Project, led by Dr. Nam Tran, Associate Director and Research
Professor at NCAT, will involve comprehensive performance testing
on the NCAT Test Track in Opelika, Alabama. This facility,
sponsored by various state Departments of Transportation (DOTs) and
in partnership with the Minnesota Road Research Facility (MnROAD),
is dedicated to advancing sustainable pavement technologies.
The NCAT Test Track will be constructed in the summer of 2024 to
evaluate cutting-edge technologies co-developed by the Company and
Zym-Tec. These innovations utilize enzymes to treat expansive soils
and stabilize marginal base materials, potentially reducing or
eliminating the need for carbon-intensive materials such as
hydrated lime and Portland cement. Additionally, integrating
biochar from biomass pyrolysis into enzyme-treated pavement
materials is expected to improve performance, substantially reduce
greenhouse gas (GHG) emissions, and sequester carbon dioxide. This
pioneering approach is projected to generate Carbon Removal Credits
upon completion of the test track installation, proving the
viability of this next-generation blueprint for net-zero road
construction.
The Company is confident in its Verde-ZymTec technology and aspires
to attain the highest level of certification from NCAT. Success in
this Project is expected to drive widespread adoption of a net-zero
road construction blueprint by DOTs across the United States and
the federal DOT. Additionally, the substantial Carbon Removal
Credits generated will create a significant and separate revenue
stream for the Company.
The Project commenced on June 24, 2024, and concludes on September
30, 2027, with the first draft of the final report expected in
spring 2027. The Company has committed $750,000 to support the
Project, with an initial payment of $100,000 upon execution of the
Agreement, followed by quarterly payments of $50,000 from September
2024 to March 2025, and $62,500 from June 2025 to September 2026.
About Verde Resources
Verde Resources, Inc. currently is engaged in the production and
distribution of renewable commodities, distribution of THC-free
cannabinoid (CBD) products, and real property holding. However,
the Company has been undergoing a restructuring exercise to shift
its focus towards renewable energy and sustainable development with
the world faced with challenges of climate change and environmental
dehydration. The Company had announced the disposition of the
mining business through the sale of the entire issued and paid-up
share capital of CSB on March 13, 2023. The disposition of CSB was
completed on April 20, 2023.
Kuala Lumpur, Malaysia-based J&S Associate PLT, the Company's
auditor since 2022, issued a "going concern" qualification in its
report dated Oct. 13, 2023, citing that the Company has generated
recurring losses and suffered from an accumulated deficit of
$10,292,430 as of June 30, 2023. These matters raise substantial
doubt about the Company's ability to continue as a going concern.
VERTEX AEROSPACE: Moody's Affirms 'B1' CFR, Outlook Stable
----------------------------------------------------------
Moody's Ratings affirmed Vertex Aerospace Services Corp.'s ("V2X")
B1 corporate family rating and B1-PD probability of default rating.
Concurrently, Moody's affirmed the B1 ratings on the company's
senior secured first lien term loans. The company's speculative
grade liquidity rating ("SGL") is unchanged at SGL-2. The outlook
is stable.
"The ratings affirmation reflects Moody's expectation of a stable
operating environment that will support modest earnings growth and
healthy cash generation," said Eoin Roche, Moody's Ratings Senior
Vice President.
RATINGS RATIONALE
The B1 CFR reflects V2X's considerable scale, long-standing
customer relationships and broad service offerings. V2X maintains a
broad base of defense contracts primarily serving the US Army,
Navy, and Air Force. Robust backlog of more than $12 billion
provides good revenue visibility and will support organic sales
growth in the low-to-mid single-digits during 2024.
Following the transformational merger of Vertex and Vectrus in July
2022, financial leverage remains high with March 2024
debt-to-EBITDA of almost 5x. Since the merger, the company has
underperformed relative to Moody's expectations with a slower pace
of deleveraging. Nevertheless, Moody's expect modest earnings
growth and debt reduction to reduce debt-to-EBITDA to below 4.5x by
the end of 2024.
Moody's recognize V2X's growing size and enhanced technology and
service capabilities resulting from the merger with Vertex in 2022.
These benefits better position the company for future contract wins
in the competitive government services contractor market. Moody's
also anticipate robust cash generation in 2024 and beyond, which
will provide good financial flexibility.
The stable outlook reflects Moody's expectations for modest
earnings growth and healthy cash generation, as well as V2X's
significant backlog and good contract diversity.
V2X's ESG Credit Impact Score (CIS) was changed to a CIS-4 from a
CIS-3. V2X's governance score was also changed to a G-4 from a G-3.
The change in the CIS and governance scores reflects the
significant shortfall in earnings and cash generation over the last
2 years relative to management's expectations.
The SGL-2 speculative grade liquidity rating denotes Moody's
expectation of good liquidity over the next 12 months. Cash as of
March 2024 was $36 million. V2X has no near-term principal
obligations and mandatory amortization on term debt is relatively
modest at around $11 million per annum. Moody's expect FCF-to-debt
in the mid-single-digits during 2024. External liquidity is
provided by a $500 million revolving credit facility that expires
in 2028 and a $200 million accounts receivable securitization
facility. As of March 2024, $56 million was drawn under the
revolver, leaving availability of $427 million (after LC usage) and
$106 million was drawn under the receivables facility. The revolver
and term loans contain two maintenance-based financial covenants
including a total net leverage ratio of 5x and an interest coverage
ratio of 2x. Moody's expect V2X to maintain comfortable leeway with
respect to its financial covenants.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Ratings could be upgraded if debt-to-EBITDA will be sustained below
4 times. Any upgrade would require robust liquidity with
FCF-to-debt in the high single-digits along with strong operational
execution.
Ratings could be downgraded if debt-to-EBITDA is sustained above 5
times. Weakening liquidity with FCF-to-debt in the low
single-digits could also result in a downgrade.
V2X (borrower "Vertex Aerospace Services Corp."), headquartered in
Northern Virginia, provides aircraft maintenance and sustainment
services, facility and base operations, supply chain and logistics
services and information technology mission support. Revenue for
the twelve months ended March 2024 was $4.0 billion.
The principal methodology used in these ratings was Aerospace and
Defense published in October 2021.
VIAVI SOLUTIONS: Fitch Affirms 'BB-' LongTerm IDR, Outlook Stable
-----------------------------------------------------------------
Fitch Ratings has affirmed Viavi Solutions Inc.'s Long-Term Issuer
Default Rating (IDR) and senior unsecured notes at 'BB-' and
'BB-'/'RR4', respectively. Fitch has also withdrawn the 'BB+'/'RR2'
senior secured rating on Viavi's previously planned term loan B
that formed part of its proposed financing for the acquisition of
Spirent Communications PLC since this was not issued. The Rating
Outlook is Stable.
Viavi's ratings reflect its market position in wireless and
wireline test and measurement sub-sectors, as well as its FCF
profile. The ratings also reflect Fitch's expectation that EBITDA
leverage will fall below Viavi's 3.5x upgrade sensitivity during
the rating horizon once a normalized demand environment returns.
The rating also considers Viavi's willingness to structurally
increase its EBITDA leverage level to support large M&A
opportunities.
Fitch has withdrawn Viavi's senior secured ratings as the term loan
was cancelled.
KEY RATING DRIVERS
Extended Demand Deferral: Fitch forecasts continued customer
spending restraint to result in a decline in fiscal 2024 revenues
by approximately 10% yoy. This follows 2023 fiscal revenues that
declined 14% yoy. A timeline for recovery is difficult to discern
given the trend of telecom companies maintaining capital and
stretching their purchase cycles. However, the latter largely
reflects spending deferrals that will come in as customer spending
normalizes as opposed to structural revenue declines. Fitch
forecasts a return to positive revenue growth in fiscal 2025 as the
demand market normalizes.
Uncertain Financial Policy Commitment Level: When Viavi announced
its planned acquisition of Spirent Communications PLC in March 2024
(it was subsequently outbid by Keysight Technologies), Viavi's
post-acquisition pro forma leverage increased towards 6x. The
company subsequently changed its financial policy to a target
leverage level of 4.0x, more consistent with 'BB-' rating levels
than typical 'BB' levels. This compares to a lower previous 3.5x
gross leverage target.
Clarity on Viavi's long-term commitment to a specific leverage
target has been reduced following its bid for Spirent. However, the
risk of increased leverage to support large M&A activities is also
reduced due to scarcity of remaining large targets in the network
test and measurement market. Viavi's practice of retaining roughly
50% of FCF and its cash on balance sheet would support its capacity
to make smaller bolt-on M&A without structural leverage increases.
Forecast Margin Trough: Viavi's EBITDA margins through fiscal 3Q24
YTD declined to 13.9% from 18.9% in fiscal 2023. The resulting
decline in EBITDA margin informs Fitch's fiscal 2024 EBITDA
leverage forecast of 4.3x in fiscal 2024. Fitch expects EBITDA
leverage to decline below the 3.5x upgrade sensitivity during the
rating horizon, as EBITDA benefits from improving operating
leverage and cost management actions. Starting in February 2023 and
through fiscal 2024, Viavi reduced its workforce by 5%, and it
plans to further reduce it by 6% in through fiscal 2025. This
planned reduction represents approximately $25 million in potential
annual cost structure savings.
Viavi's large cash holdings, which have historically been at
approximately $0.5 billion, is well above Viavi's needs to manage
operating volatility. In context of a $650 million gross debt load,
this results in a favorable net EBITDA leverage level that Fitch
forecast at 1.1x in fiscal 2024, which is more consistent with
ratings typically in the 'BBB' category.
Strong Existing Market Position: Viavi is a top-five provider in
the test and measurement space and enjoys leading market positions
in wireline cable, access, metro and transport, fiber, wireless
RAN-to-core, as well as land-mobile and military radio, navigation,
communication and transponders. Additionally, Viavi is a leader in
anti-counterfeiting pigment materials, as well as 3D sensing
optical filters and diffusers used in mobile phones.
Uncorrelated Business Lines: Viavi's standalone revenue composition
includes about 70% from the Network and Service Enablement
segments, inclusive of core test and measurement and network
optimization. The remaining approximately 30% comes from the highly
entrenched Optical Security and Performance Products segment, which
primarily provides the anti-counterfeiting pigments needed for
physical currency.
These segments' drivers are reasonably uncorrelated, and the
differences in end users and demand factors provide diversification
benefits to Viavi's credit profile. For example, the
counter-cyclicality of the anti-counterfeiting business, which is
concentrated, is driven in weaker economic environments by fiscal
and monetary stimulus support programs that drive bank note
growth.
Technology Trends Support Demand: Viavi benefits from exposure to
both development and field deployment of wireless and wireline
communication technologies. Increased fiber deployment in homes,
data centers and wireless backhaul increases demand for Viavi's
test and measurement offerings applicable to client manufacturing
operations and its network management solutions, while development
of 800 gigabit per second (Gbit/s) and 1.6 terabit per second
(Tbit/s) ethernet speeds support demand for module prototype and
lab-test solutions.
Transition to 5G wireless has benefited Viavi through relationships
with service providers that provide demand growth as their networks
are built out, while 6G development supports deeper engagement with
key wireless equipment providers. The company's 3D sensing offering
for mobile phone applications has grown in the iOS ecosystem and
the potential for eventual adoption within Android-based phones may
significantly expand market potential. Growth from advanced driver
assisted systems automotive applications should also support demand
for Viavi's optical filters and diffusers.
DERIVATION SUMMARY
Viavi competes with Keysight Technologies, Inc. (BBB+/Stable) in
its Network Enablement segment. Keysight enjoys larger overall
revenue scale of over $5 billion which, proforma for Keysight's
successful acquisition of Spirent, would increase towards $6
billion, compared to the approximately $1 billion annual revenues
for Viavi. Keysight's relative credit profile benefits from higher
operating EBITDA margins of over 30% compared to closer to 20% for
Viavi.
Viavi has historically maintained a fairly conservative
capitalization between 2x and 3x, but this increased in fiscal 2023
to 3.6x. Fitch forecasts Viavi's fiscal 2024 EBITDA leverage to be
4.3x before beginning an EBIDTA growth-led decline trend. This
compares to an EBITDA leverage of 1.0x for Keysight in their most
recent fiscal year end.
Coherent Corp. (BB/Stable) is a competitor of Viavi's in the
optical security and performance products segment, which produces
optical filters used in 3D sensing. More similar to Keysight's
revenue scale, Coherent generates revenue over $5 billion, but with
the exception of Viavi's lower 2023 and forecast 2024 EBITDA
margins, is historically closer to Viavi's EBITDA margins in the
mid-20s. Traditionally both company's leverage levels have been
generally comparable with both ending 2023 at 3.6x.
TTM Technologies, Inc (BB/Stable), which manufactures printed
circuit boards, generates approximately $2.5 billion in sales but
has a lower EBITDA margin structure than Viavi. EBITDA leverage for
TTM's most recent fiscal year end was 2.9x.
KEY ASSUMPTIONS
- 2024 Forecast revenues within 4Q24 company guidance and reflect
lower end market spending. Remainder of forecast benefits from
deferred customer spending normalizing, as well as modestly from 5G
infrastructure buildout, fiber upgrade cycle, as well as testing
and development of 6G wireless and 800 Gbit/1.6 Tbit ethernet.
- Forecast revenue informed by Fitch's 'Global Economic Outlook -
June 2024' GDP forecast.
- EBITDA margins of mid-teens in 2024, informed by 13.9% 3Q24 YTD,
improves to approximately 20% during forecast period as expense
reduction benefits of restructuring plan are realized and sales
growth leads to improved operating leverage;
- Convertible note maturing in 2026 is refinanced with debt at
maturity;
- Annual share repurchases after 2024 approximately equivalent to
50% of FCF. No dividends paid during forecast;
- Base interest rates applicable to the company's outstanding
variable rate debt obligations reflects current SOFR forward curve
between 5.3% and 3.7%.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- EBITDA leverage sustained below 3.5x along with a public
re-commitment to a target at or below that level;
- Sustained organic mid-single digit growth;
- Evidence of a decrease in revenue and EBITDA margin volatility.
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- EBITDA leverage sustained above 4.5x;
- Neutral FCF margins;
- Through the cycle trend of zero, or declining, organic revenue;
- Shift to a more aggressive financial policy.
LIQUIDITY AND DEBT STRUCTURE
Large Cash Balance Supplemented by Smaller ABL Facility: Viavi held
$454 million in cash and cash equivalents, excluding approximately
$28 million of short-term investments and $3.5 million of
restricted cash at it fiscal 3Q24 on March 30, 2024. The company
has access to drawings on its ABL revolving credit facility, which
had $147.5 million borrowing available at fiscal 3q24 and matures
on Dec. 30, 2026. Forecast positive FCF through the rating horizon
provides further support to Viavi's liquidity position.
Viavi currently has manageable refinance risk; its only debt being
a $250 million convertible note with a conversion price of $13.19
maturing in 2026 and $400 million in unsecured notes maturing in
2029.
ISSUER PROFILE
Viavi is a provider of network test, monitoring and assurance
solutions as well as optical solutions for hard currency
anti-counterfeiting pigments and 3D sensing.
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
----------- ------ -------- -----
Viavi Solutions Inc. LT IDR BB- Affirmed BB-
senior unsecured LT BB- Affirmed RR4 BB-
senior secured LT WD Withdrawn BB+
VICTORY CLEAN: Appoints Astra Audit & Advisory as New Auditor
-------------------------------------------------------------
Victory Clean Energy, Inc. disclosed in a Form 8-K Report filed
with the U.S. Securities and Exchange Commission that on June 27,
2024, the Company retained Astra Audit & Advisory LLC, as its new
independent registered public accounting firm, to audit its
financial statements for the year ending December 31, 2024. The
appointment of Astra was approved by the Board of Directors of the
Company. As a result of the Company's engagement of Astra on June
27, 2024, it dismissed Accell Audit & Compliance, P.A. as
independent auditor.
Accell was engaged in January 2024.
During the two most recent years (December 31, 2023 and 2022), and
through date of dismissal, there were no disagreements with Accell
on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure, which
disagreement, if not resolved to the satisfaction of Accell, would
have caused Accell to make reference to the subject matter of the
disagreement in its report. There have been no reportable events as
provided in Item 304(a)(1)(v) of Regulation S-K up to and including
the dismissal of Accell, except that such reports contained an
explanatory paragraph in respect to uncertainty as to the Company's
ability to continue as a going concern.
Accell's report on the consolidated financial statements of the
Company as, at, and for the years ended December 31, 2023 and 2022
did not contain any adverse opinion or disclaimer of opinion and
were not qualified or modified as to uncertainty, audit scope or
accounting principles, except that such reports contained an
explanatory paragraph in respect to uncertainty as to the Company's
ability to continue as a going concern and identified certain
material weakness in our internal controls over financial
reporting. There were and are no limitations placed on Accell
concerning the inquiry of any matter related to the Company's
financial reporting.
During the Company's two most recent fiscal years and any
subsequent interim period preceding such engagement, the Company
has not previously consulted with Astra with respect to either (a)
the application of accounting principles to a specified
transaction, either completed or proposed, or the type of audit
opinion that might be rendered on its financial statements, and no
written or oral advice was given to the Company by Astra that Astra
concluded was an important factor considered by the Company in
reaching its decision as to the accounting, auditing, or financial
reporting issue; or (b) any matter that was either the subject of a
disagreement, as that term is described in Item 304(a)(1)(iv) of
Regulation S-K and the related instruction to Item 304 of
Regulation S-K, or a reportable event as that term is described in
Item 304(a)(1)(v) of Regulation S-K.
About Victory Clean
Austin, Texas-based Victory Clean Energy, Inc. is a Green Hydrogen
energy company dedicated to developing and implementing clean,
sustainable low-cost energy solutions with applications across
various industries, including transportation, power generation, and
industrial processes.
As of December 31, 2023, the Company has $1,638,085 in total
assets, $5,725,408 in total liabilities, and $4,087,323 in total
stockholders' deficit.
Tampa, Fla.-based Accell Audit & Compliance, P.A., the Company's
auditor since 2024, issued a "going concern" qualification in its
report dated May 15, 2024, citing that the Company has incurred net
losses and negative cash flow from operations since inception.
These factors and the need for additional financing in order for
the Company to meet its business plans raises substantial doubt
about the Company's ability to continue as a going concern.
WILDBRAIN LTD: Moody's Puts 'B3' CFR on Review for Downgrade
------------------------------------------------------------
Moody's Ratings placed WildBrain Ltd.'s B3 corporate family rating,
B3-PD probability of default rating, and B2 ratings on the senior
secured bank credit facilities on review for downgrade. WildBrain's
Speculative Grade Liquidity Rating (SGL) remains unchanged at
SGL-4. Previously, the outlook was stable.
The placement of WildBrain's ratings on review for downgrade
reflects the uncertainty around the company's ability to refinance
its $140 million convertible debentures maturing in September 2024
and subsequent expiry of revolver on July 26, 2024 if the
debentures are not repaid. The company announced [1] on June 27,
2024 that it is close to refinancing its existing credit facilities
and expects to close the refinancing with the new lenders in July
2024. Although it appears that the company has made significant
progress in refinancing its existing debt, the closing date of the
refinancing is still uncertain and keeps refinancing risks high.
RATINGS RATIONALE / FACTORS THAT COULD LEAD TO AN UPGRADE OR
DOWNGRADE OF THE RATINGS
Moody's review will focus on WildBrain's ability to refinance its
$140 million debenture maturing September 30, 2024. If Moody's
believe WildBrain cannot refinance the debenture maturity prior to
the revolver expiring, then a downgrade of one or more notches is
likely. If WildBrain successfully refinances the debt, it is
possible that the ratings could be confirmed, with the CFR
remaining at B3. The company's cash of around $58 million at the
end of March 2024 could be used to cover $13.8 million drawn on the
revolving credit facility if the revolver is not extended further,
however it could further weaken the company's liquidity.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
WildBrain Ltd. is a public company headquartered in Toronto,
Canada, that produces children's content for internet streaming
platforms as well as broadcast TV. It owns brands such as Peanuts,
Inspector Gadget, Teletubbies and Strawberry Shortcake.
WINDSOR TERRACE: Seeks to Extend Plan Exclusivity to September 20
-----------------------------------------------------------------
Windsor Terrace Healthcare, LLC and its affiliates asked the U.S.
Bankruptcy Court for the Central District of California to further
extend their exclusivity periods to file a plan of reorganization
and obtain acceptance thereof to September 20, 2024 and January 20,
2025, respectively.
The Debtors claim that they are not seeking to extend their
exclusive deadline to file a plan to obtain any unfair advantage
over their creditors. Rather, extending the Debtors' exclusive
deadline to file a plan will allow the parties to focus on
confirming the Plan, and providing the Debtors with some protection
to modify the Plan treatment terms in the unforeseeable and
hopefully unlikely event that the Plan is not confirmed as
currently proposed.
The Debtors explain that each of their facilities is subject to a
different lease and its own unique operational and reorganization
challenges. The large number of facilities involved, which together
generate annual revenue of approximately $285 million and which
together provide care to thousands of elderly residents on a
full-time basis, makes the Debtors' 21 chapter 11 cases,
particularly when viewed collectively, far more challenging and
complex than a single average chapter 11 bankruptcy case.
Collectively, the Debtors have been operating profitably post
petition, and the Debtors' current cash combined with future cash
projections and the guaranties provided under the Plan evidence
that the Plan, which provides for a meaningful distribution to the
Debtors' creditors, is feasible and viable. The Debtors will
continue to demonstrate reasonable prospects for filing a viable
plan even if the Plan is not confirmed and the Debtors are required
to propose and file modifications to the Plan as currently
proposed.
The Debtors assert that they have worked with, and intend to
continue working closely with, their secured creditors, the
Committee, the Ad Hoc Group, and other parties in interest in these
cases to reach a consensual Plan. The Debtors' efforts have led to
the Committee issuing a support letter in favor of the Debtors'
Plan.
Windsor Terrace Healthcare, LLC and its affiliates are represented
by:
Ron Bender, Esq.
Monica Y. Kim, Esq.
Juliet Y. Oh, Esq.
Robert M. Carrasco, Esq.
LEVENE, NEALE, BENDER, YOO & GOLUBCHIK L.L.P.
2818 La Cienega Avenue
Los Angeles, CA 90034
Tel: (310) 229-1234
Email: rb@lnbyg.com
myk@lnbyg.com
jyo@lnbyg.com
rmc@lnbyg.com
About Windsor Terrace Healthcare
Windsor Terrace Healthcare, LLC and its affiliates are primarily
engaged in the businesses of owning and operating skilled nursing
facilities throughout the State of California. Collectively, the
Debtors own and operate 16 skilled nursing facilities, which
provide 24 hour, seven days a week and 365 days a year care to
patients who reside at those facilities.
In addition to the 16 skilled nursing facilities, the Debtors own
and operate one assisted living facility (which is Windsor Court
Assisted Living, LLC), one home health care center (which is S&F
Home Health Opco I, LLC), and one hospice care center (which is S&F
mHospice Opco I, LLC). The Debtors do not own any of the real
property upon which the facilities are located.
Windsor Terrace Healthcare and 18 affiliates filed Chapter 11
petitions (Bankr. C.D. Calif. Lead Case No. 23-11200) on Aug. 23,
2023. Two more affiliates, Windsor Sacramento Estates, LLC and
Windsor Hayward Estates, LLC, filed Chapter 11 petitions on Sept.
29.
At the time of the filing, Windsor Terrace Healthcare disclosed up
to $10 million in both assets and liabilities.
Judge Victoria S. Kaufman oversees the cases.
The Debtors tapped Levene, Neale, Bender, Yoo, and Golubchik, LLP
as bankruptcy counsel; Hooper, Lundy & Bookman, P.C. and Hanson
Bridgett, LLP as special counsels; and Province, LLC as financial
advisor. Stretto, Inc. is the Debtor's claims, noticing and
solicitation agent.
The U.S. Trustee for Region 16 appointed an official committee to
represent unsecured creditors in the Debtors' Chapter 11 cases.
Troutman Pepper Hamilton Sanders, LLP is the Debtors' legal
counsel.
Jacob Nathan Rubin, the patient care ombudsman, is represented by
RHM Law, LLP.
XTI AEROSPACE: Inks $55MM Investment Deal at $275MM Valuation
-------------------------------------------------------------
XTI Aerospace, Inc. announced on July 1, 2024, that it has entered
into an agreement with FC Imperial Limited, an affiliate of a
private global investment consortium, FinExic Concordia Group, for
a proposed strategic equity investment for shares of convertible
preferred stock of up to $55 million at a post-money valuation of
$275 million (the "Locked Valuation"), with the successful
consummation of the entire transaction process.
Mr. Anindya Chakraborty, leading the investment structuring for the
Investment Consortium, said "For well over a year, extensive
discussions were held with XTI management and XTI engineering team
along with review of sector trends and technologies being
developed. The Trifan is unique and perhaps the most efficient,
practical, versatile and commercially viable VTOL aircraft with
clear attributes of ushering in a game changing reality to the
aviation industry."
Scott Pomeroy, chairman and CEO of XTI, stated, "XTI has had the
pleasure of working with and sharing information with the
investment team for over a year, and they have performed extensive
technical and financial due diligence on XTI Aircraft Company and
the TriFan. Assuming the completion of the proposed investment, we
believe the additional capital will help accelerate the development
of the TriFan through several major milestones including completion
of the updated preliminary design review along with launching the
critical design review phase in preparation for the assembly of
XTI's Test Aircraft No. 1. Importantly, we also believe that our
relationship with the Investor Consortium, which is a true
collaboration of values and vision, aligns the long-term interests
of both organizations."
Mr. Pomeroy continued, "The $275 million valuation aligns with the
fairness opinion delivered to the Inpixon Board of Directors prior
to Inpixon's merger with XTI Aircraft Company. This valuation
reflects the progress we have made, especially since our last
private company capital raise, which was based on a $100 million
valuation."
Mr. Chakraborty added that "The Trifan represents traditional
time-tested stability, hyper-boosted with intelligent innovation
and we believe its elegant, utilitarian, cross purpose design is
expected to fill up the skies across multiple geographies,
including in the emerging aviation markets and some of the fastest
growing economies like India, SE Asia and Middle East. It is a bold
statement for a new segment in the aviation industry and with its
unparalleled blend of speed and long-range VTOL capabilities, we
feel the TriFan is uniquely positioned to achieve widespread global
adoption. It is tailored for a broad spectrum of applications, from
critical healthcare and emergency services to para-military
operations, elite corporate mobility, and the ultimate aspirational
luxury for enthusiasts. The Investment Consortium is willing to
work with XTIA to provide more capital and help facilitate
additional raises as milestones are met."
About XTI Aerospace
XTI Aerospace (formerly Inpixon), is primarily an aircraft
development and manufacturing company. The Company is developing a
vertical takeoff and landing ("VTOL") aircraft that takes off and
lands like a helicopter and cruises like a fixed-wing business
aircraft. The Company believes its initial configuration, the
TriFan 600, will be one of the first civilian fixed-wing VTOL
aircraft that offers the speed and comfort of a business aircraft
and the range and versatility of VTOL for a wide range of customer
applications, including private aviation for business and high net
worth individuals, emergency medical services, and commuter and
regional air travel. Since 2013, the Company has been engaged
primarily in developing the design and engineering concepts for the
TriFan 600, building and testing a two-thirds scale unmanned
version of the TriFan 600, generating pre-orders for the TriFan
600, and seeking funds from investors to enable the Company to
build full-scale piloted prototypes of the TriFan 600, and to
eventually engage in commercial development of the TriFan 600.
New York-based Marcum LLP, the Company's auditor since 2012, issued
a "going concern" qualification in its report dated April 16, 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.
YACHATS RURAL: Moody's Lowers Rating on $7.6MM GOULT Bonds to Ba3
-----------------------------------------------------------------
Moody's Ratings has downgraded Yachats Rural Fire Protection
District, OR's General Obligation Unlimited Tax (GOULT) bond rating
to Ba2 from Ba1 and removed the negative outlook. The district
currently has about $7.6 million in outstanding GOULT debt.
The downgrade of the rating from Ba1/Neg to Ba2 reflects Moody's
expectation that while the district's financial position is likely
to improve in fiscal 2024, supported by the additional revenue from
the increased and renewed voter approved local levies, the district
still faces challenges over the medium to long term with district
provided financial projections showing operations returning to
being structurally imbalanced starting in fiscal 2027.
RATINGS RATIONALE
The Ba2 rating reflects the district's historical trend of weak
financial performance demonstrated by several years of negative
general fund balance and weak cash levels. While the district's
financial performance on an operating basis (which for Moody's
purposes includes the general fund, debt service and equipment
reserve funds) in fiscal 2023 suggests a strengthened financial
position, it consists of mostly debt service funds, masking the
district's worse than anticipated general fund performance. In
fiscal 2023 the district had a negative general fund balance of
$80,000 supported by a cash flow borrowing. The district
anticipates a return to balanced operations in the general fund
starting in fiscal 2024, largely due to the passage of a new
increased operating levy in 2022 and the renewal in 2023 of its
local levy which was set to expire in fiscal 2024. Positively, the
district does not anticipate needing to utilize cash flow borrowing
for operations in the near term like it has done in previous years.
Despite the additional revenues that will be generated from the
local option voter levies; the district's projections show
structurally imbalanced operations returning in fiscal 2027. Given
the district's small size of operations and limited financial
flexibility, the district will need to secure additional revenue to
maintain balanced operations over the medium to long term.
Governance remains a key rating driver. The rating also considers
the district's small, rural and tourism driven local economy on the
Oregon Coast with below average resident income (91.6%) offset by
high full value per capita (about $1.43 million) given the
significant presence of second homes in the area. The district's
elevated debt burden (5.23x operating revenue), high fixed costs,
and manageable pension liabilities are also factored into the
rating.
RATING OUTLOOK
Outlooks are not assigned to local governments with this amount of
debt outstanding.
FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATING
-- Overperformance of current projections leading to structurally
balanced operations without the use of any non-recurring revenue
source
FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATING
-- Deterioration of financial reserves and liquidity and a
continued reliance on non-recurring one-time revenue
-- Continued cash flow borrowings for operations and/or continued
use of unauthorized loans or borrowings from the debt service fund
for operations
LEGAL SECURITY
The GOULT debt is secured by the district's full faith, credit and
unlimited property tax pledge. Debt service for GOULT bonds in
Oregon is funded by a separate property tax levy that is dedicated
to bondholders and secured through statute, a credit strength for
bondholders.
PROFILE
Yachats Rural Fire Protection District (YRFPD) is a full-service
fire and rescue agency in Lincoln County, Oregon serving a 14.5
square mile service boundary including the City of Yachats and
surrounding rural areas. The district operates three fire stations
staffed by a volunteer Fire Chief, two administrators, six
full-time firefighters, two part time firefighters, and two
volunteers.
METHODOLOGY
The principal methodology used in this rating was US Special
Purpose District General Obligation Debt Methodology published in
November 2022.
ZOOZ POWER: Adjourns Annual Meeting to July 15
----------------------------------------------
ZOOZ Power Ltd. announced that its Extraordinary General Meeting of
Shareholders scheduled to be held at the Company's offices at 4B
Hamelacha St., Lod, Israel, on Wednesday, July 3, 2024 at 4:00 PM
(Israel time), was adjourned to Monday, July 15, 2024 at the same
time and place, in order to allow all relevant votes of the
Company's shareholders to be properly submitted and received by the
Company. No change is made to any item on the agenda for the
Extraordinary General Meeting of Shareholders.
About ZOOZ Power Ltd.
ZOOZ Power Ltd is engaged in research and development, marketing
and sales of energy storage systems to support fast chargers for
electric vehicles. The system is based on kinetic storage in
flywheels.
At December 31, 2023, the Company had NIS 48.8 million in total
assets, NIS 20 million in total liabilities, and NIS 28.8 million
in total equity.
Jerusalem, Israel-based Kesselman & Kesselman, the Company's
auditor since 2022, issued a "going concern" qualification in its
report dated March 31, 2024, citing that the Company has a current
loss of NIS 50 million and a negative cash flow from operating
activity of NIS 45.6 million in the year ended December 31, 2023.
Such circumstances raise substantial doubt about the Company's
ability to continue as a going concern.
ZOOZ POWER: Adjourns Extraordinary Meeting Until July 15
--------------------------------------------------------
ZOOZ Power Ltd. announced July 1, 2024, that the Extraordinary
General Meeting of Shareholders scheduled to be held at the
Company's offices at 4B Hamelacha St., Lod, Israel, on Wednesday,
July 3, 2024 at 4:00 PM (Israel time), has been adjourned to
Monday, July 15, 2024 at the same time and place, in order to allow
all relevant votes of the Company's shareholders to be properly
submitted and received by the Company. No change is made to any
item on the agenda for the Extraordinary General Meeting of
Shareholders.
About ZOOZ Power Ltd.
Headquartered in St. Lod 7152008 Israel, ZOOZ --
https://www.zoozpower.com/ -- is a provider of Flywheel-based Power
Boosting solutions enabling widespread deployment of ultra-fast
charging infrastructure for electric vehicles (EV), while
overcoming existing grid limitations. ZOOZ pioneers its unique
flywheel-based power boosting technology, enabling efficient
utilization and power management of a power-limited grid at an EV
charging site. Its Flywheel technology allows high-performance,
reliable, and cost-effective ultra-fast charging infrastructure.
Jerusalem, Israel-based Kesselman & Kesselman, the Company's
auditor since 2018, issued a "going concern" qualification in its
report dated April 30, 2024, citing that the Company has net losses
and has generated negative cash flows from operating activities for
the years ended Dec. 31, 2023, 2022 and 2021. These circumstances
raise substantial doubt about the Company's ability to continue as
a going concern.
[^] BOND PRICING: For the Week from July 1 to 5, 2024
-----------------------------------------------------
Company Ticker Coupon Bid Price Maturity
------- ------ ------ --------- --------
2U Inc TWOU 2.250 54.601 5/1/2025
99 Cents Only Stores LLC NDN 7.500 5.000 1/15/2026
99 Cents Only Stores LLC NDN 7.500 4.984 1/15/2026
99 Cents Only Stores LLC NDN 7.500 4.984 1/15/2026
Acorda Therapeutics Inc ACOR 6.000 56.606 12/1/2024
Allen Media LLC / Allen
Media Co-Issuer Inc ALNMED 10.500 40.956 2/15/2028
Allen Media LLC / Allen
Media Co-Issuer Inc ALNMED 10.500 42.769 2/15/2028
Allen Media LLC / Allen
Media Co-Issuer Inc ALNMED 10.500 42.110 2/15/2028
Amyris Inc AMRS 1.500 1.913 11/15/2026
Anagram Holdings
LLC/Anagram
International Inc AIIAHL 10.000 0.750 8/15/2026
Anagram Holdings
LLC/Anagram
International Inc AIIAHL 10.000 0.750 8/15/2026
Anagram Holdings
LLC/Anagram
International Inc AIIAHL 10.000 0.750 8/15/2026
At Home Group Inc HOME 7.125 27.811 7/15/2029
At Home Group Inc HOME 7.125 27.811 7/15/2029
Audacy Capital Corp CBSR 6.750 3.875 3/31/2029
Audacy Capital Corp CBSR 6.500 4.500 5/1/2027
Audacy Capital Corp CBSR 6.750 3.375 3/31/2029
BPZ Resources Inc BPZR 6.500 3.017 3/1/2049
Beasley Mezzanine
Holdings LLC BBGI 8.625 59.476 2/1/2026
Beasley Mezzanine
Holdings LLC BBGI 8.625 59.476 2/1/2026
Biora Therapeutics Inc BIOR 7.250 56.969 12/1/2025
Castle US Holding Corp CISN 9.500 44.430 2/15/2028
CommScope Inc COMM 8.250 47.458 3/1/2027
CommScope Inc COMM 8.250 47.627 3/1/2027
CommScope Technologies COMM 5.000 41.890 3/15/2027
CommScope Technologies COMM 5.000 41.476 3/15/2027
CorEnergy Infrastructure
Trust Inc CORR 5.875 70.500 8/15/2025
Curo Group Holdings Corp CURO 7.500 4.000 8/1/2028
Curo Group Holdings Corp CURO 7.500 23.000 8/1/2028
Curo Group Holdings Corp CURO 7.500 4.774 8/1/2028
Cutera Inc CUTR 2.250 20.250 6/1/2028
Cutera Inc CUTR 2.250 32.431 3/15/2026
Cutera Inc CUTR 4.000 17.568 6/1/2029
Danimer Scientific Inc DNMR 3.250 17.000 12/15/2026
Diamond Sports Group
LLC / Diamond Sports
Finance Co DSPORT 5.375 2.150 8/15/2026
Diamond Sports Group
LLC / Diamond Sports
Finance Co DSPORT 6.625 2.050 8/15/2027
Diamond Sports Group
LLC / Diamond Sports
Finance Co DSPORT 5.375 2.238 8/15/2026
Diamond Sports Group
LLC / Diamond Sports
Finance Co DSPORT 5.375 2.500 8/15/2026
Diamond Sports Group
LLC / Diamond Sports
Finance Co DSPORT 5.375 2.238 8/15/2026
Diamond Sports Group
LLC / Diamond Sports
Finance Co DSPORT 6.625 2.000 8/15/2027
Diamond Sports Group
LLC / Diamond Sports
Finance Co DSPORT 5.375 2.300 8/15/2026
Embarq Corp EMBARQ 7.995 20.305 6/1/2036
Energy Conversion
Devices Inc ENER 3.000 0.762 6/15/2013
Enviva Partners LP /
Enviva Partners
Finance Corp EVA 6.500 43.750 1/15/2026
Enviva Partners LP /
Enviva Partners
Finance Corp EVA 6.500 43.750 1/15/2026
Exela Intermediate
LLC / Exela
Finance Inc EXLINT 11.500 35.000 7/15/2026
Exela Intermediate
LLC / Exela
Finance Inc EXLINT 11.500 24.454 7/15/2026
F&M Financial Corp/TN FMFNCP 5.950 94.000 9/17/2029
F&M Financial Corp/TN FMFNCP 5.950 94.000 9/15/2029
Federal Farm Credit
Banks Funding Corp FFCB 3.000 99.963 7/9/2024
Federal Home Loan Banks FHLB 4.700 86.367 9/30/2024
Federal Home Loan Banks FHLB 0.500 99.336 7/12/2024
Federal Home Loan Banks FHLB 5.080 99.833 7/9/2024
Federal Home Loan Banks FHLB 4.000 94.754 9/23/2024
Federal Home Loan Banks FHLB 0.350 99.334 7/12/2024
Federal Home Loan Banks FHLB 0.500 99.247 7/15/2024
Federal Home Loan Banks FHLB 0.400 94.023 9/23/2024
Federal Home Loan Banks FHLB 0.520 99.337 7/12/2024
Federal Home Loan Banks FHLB 1.040 99.730 7/11/2024
Federal National
Mortgage Association FNMA 0.250 99.295 7/15/2024
Federal National
Mortgage Association FNMA 0.350 99.297 7/15/2024
First Republic Bank/CA FRCB 4.375 4.500 8/1/2046
First Republic Bank/CA FRCB 4.625 4.000 2/13/2047
GNC Holdings Inc GNC 1.500 0.833 8/15/2020
General Electric Co GE 4.600 99.559 7/15/2024
German American Bancorp GABC 4.500 92.889 6/30/2029
German American Bancorp GABC 4.500 92.889 6/30/2029
German American Bancorp GABC 4.500 92.889 6/30/2029
Goodman Networks Inc GOODNT 8.000 5.000 5/11/2022
Goodman Networks Inc GOODNT 8.000 1.000 5/31/2022
H-Food Holdings
LLC / Hearthside
Finance Co Inc HEFOSO 8.500 7.429 6/1/2026
H-Food Holdings
LLC / Hearthside
Finance Co Inc HEFOSO 8.500 7.854 6/1/2026
Hallmark Financial
Services Inc HALL 6.250 15.372 8/15/2029
Homer City Generation LP HOMCTY 8.734 38.750 10/1/2026
Hughes Satellite
Systems Corp SATS 6.625 48.496 8/1/2026
Hughes Satellite
Systems Corp SATS 6.625 48.490 8/1/2026
Hughes Satellite
Systems Corp SATS 6.625 48.490 8/1/2026
Inseego Corp INSG 3.250 73.790 5/1/2025
Invacare Corp IVC 4.250 1.002 3/15/2026
Invitae Corp NVTA 2.000 87.500 9/1/2024
JPMorgan Chase Bank NA JPM 2.000 88.319 9/10/2031
Karyopharm Therapeutics KPTI 3.000 64.741 10/15/2025
Kronos Acquisition
Holdings Inc / KIK
Custom Products Inc KIKCN 7.000 103.371 12/31/2027
Kronos Acquisition
Holdings Inc / KIK
Custom Products Inc KIKCN 7.000 103.168 12/31/2027
Ligado Networks LLC NEWLSQ 15.500 15.000 11/1/2023
Ligado Networks LLC NEWLSQ 17.500 2.000 5/1/2024
Ligado Networks LLC NEWLSQ 15.500 16.016 11/1/2023
Lightning eMotors Inc ZEVY 7.500 1.001 5/15/2024
Lumen Technologies Inc LUMN 6.875 40.351 1/15/2028
Lumen Technologies Inc LUMN 4.500 28.146 1/15/2029
Lumen Technologies Inc LUMN 4.500 28.171 1/15/2029
Luminar Technologies Inc LAZR 1.250 40.000 12/15/2026
MBIA Insurance Corp MBI 16.850 3.023 1/15/2033
MBIA Insurance Corp MBI 16.850 3.023 1/15/2033
Macy's Retail Holdings M 6.700 86.255 7/15/2034
Macy's Retail Holdings M 6.900 90.854 1/15/2032
Mashantucket Western
Pequot Tribe MASHTU 7.350 50.000 7/1/2026
Midland States Bancorp MSBI 5.000 91.500 9/30/2029
Millennium Escrow Corp CFIELD 6.625 51.772 8/1/2026
Millennium Escrow Corp CFIELD 6.625 52.003 8/1/2026
Morgan Stanley MS 1.800 76.825 8/27/2036
NanoString Technologies NSTG 2.625 74.378 3/1/2025
Occidental Petroleum Corp OXY 3.450 99.070 7/15/2024
Office Properties
Income Trust OPI 4.500 78.639 2/1/2025
Office Properties
Income Trust OPI 2.400 44.308 2/1/2027
Photo Holdings
Merger Sub Inc SFLY 8.500 47.500 10/1/2026
Photo Holdings
Merger Sub Inc SFLY 8.500 47.500 10/1/2026
Polar US Borrower
LLC / Schenectady
International Group SIGRP 6.750 28.746 5/15/2026
Polar US Borrower
LLC / Schenectady
International Group SIGRP 6.750 28.746 5/15/2026
Qwest Capital Funding QWECOM 6.875 35.015 7/15/2028
Rackspace Technology
Global Inc RAX 5.375 27.035 12/1/2028
Rackspace Technology
Global Inc RAX 3.500 29.459 2/15/2028
Rackspace Technology
Global Inc RAX 3.500 29.459 2/15/2028
Rackspace Technology
Global Inc RAX 5.375 26.725 12/1/2028
Renco Metals Inc RENCO 11.500 24.875 7/1/2003
Rite Aid Corp RAD 8.000 44.000 11/15/2026
Rite Aid Corp RAD 7.700 2.438 2/15/2027
Rite Aid Corp RAD 7.500 41.500 7/1/2025
Rite Aid Corp RAD 8.000 41.995 11/15/2026
Rite Aid Corp RAD 7.500 41.723 7/1/2025
Rite Aid Corp RAD 6.875 3.424 12/15/2028
Rite Aid Corp RAD 6.875 3.424 12/15/2028
RumbleON Inc RMBL 6.750 65.355 1/1/2025
SVB Financial Group SIVB 3.500 63.250 1/29/2025
Sandy Spring Bancorp Inc SASR 4.250 86.000 11/15/2029
Shift Technologies Inc SFT 4.750 0.436 5/15/2026
Spanish Broadcasting
System Inc SBSAA 9.750 58.566 3/1/2026
Spanish Broadcasting
System Inc SBSAA 9.750 57.530 3/1/2026
Spirit Airlines Inc SAVE 1.000 49.750 5/15/2026
Spirit Airlines Inc SAVE 4.750 73.000 5/15/2025
TerraVia Holdings Inc TVIA 5.000 4.644 10/1/2019
Tricida Inc TCDA 3.500 9.611 5/15/2027
Veritex Holdings Inc VBTX 4.750 89.433 11/15/2029
Veritone Inc VERI 1.750 36.750 11/15/2026
Virgin Galactic Holdings SPCE 2.500 31.883 2/1/2027
Voyager Aviation
Holdings LLC VAHLLC 8.500 15.615 5/9/2026
Voyager Aviation
Holdings LLC VAHLLC 8.500 15.615 5/9/2026
Voyager Aviation
Holdings LLC VAHLLC 8.500 15.615 5/9/2026
WeWork Cos US LLC WEWORK 12.000 1.178 8/15/2027
Wells Fargo & Co WFC 3.498 96.416 7/30/2024
Wesco Aircraft Holdings WAIR 9.000 26.346 11/15/2026
Wesco Aircraft Holdings WAIR 8.500 28.000 11/15/2024
Wesco Aircraft Holdings WAIR 13.125 2.159 11/15/2027
Wesco Aircraft Holdings WAIR 8.500 27.403 11/15/2024
Wesco Aircraft Holdings WAIR 9.000 26.346 11/15/2026
Wesco Aircraft Holdings WAIR 13.125 2.159 11/15/2027
Wheel Pros Inc WHLPRO 6.500 17.969 5/15/2029
Wheel Pros Inc WHLPRO 6.500 17.969 5/15/2029
fuboTV Inc FUBO 3.250 59.875 2/15/2026
iHeartCommunications Inc IHRT 8.375 34.971 5/1/2027
*********
Monday's edition of the TCR delivers a list of indicative prices
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