/raid1/www/Hosts/bankrupt/TCR_Public/240715.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 15, 2024, Vol. 28, No. 196
Headlines
111-25 116 LLC: Property Sale Proceeds to Fund Plan
1741 N. WESTERN: Seeks to Tap Flanagan Bilton as Special Counsel
3208 GSD: Seeks to Hire Johnson Law Group as Legal Counsel
5 SHEFFIELD: Hires Walter D. Nealy PC as Bankruptcy Counsel
80 COTTONTAIL: Seeks to Hire A.Y. Strauss LLC as Counsel
ACCENT ON BODY: Taps Healthcare Management Advisors as OCP
ACHILLES FOOT & ANKLE: Starts Subchapter V Bankruptcy Proceeding
ACHY LEGS CLINICS: Commences Subchapter V Bankruptcy Process
AIRWAY AIR: Seeks to Hire Latham Luna Eden & Beaudine as Counsel
ALCOTT ENTERPRISES: Gregory Jones Named Subchapter V Trustee
AMARILLO PLATINUM: Seeks to Hire Dunham Hildebrand as Counsel
AMERICAN EXPRESS: Moody's Assigns First Time B2 Corp. Family Rating
AMERICANAS SA: Independent Committee Ends Probe
AMERICANAS SA: Spanish Police Releases Ex-CEO Amid Fraud Probe
APPLIED ENERGETICS: Expands Facilities at Arizona Tech Park
AQUA VERDE INVESTMENT: Kicks Off Subchapter V Bankruptcy Process
ARCADIA BIOSCIENCES: Inks Separation Agreement With President & CEO
ARNOLD BROTHERS: AmeriState Wins Dismissal of Chapter 11 Case
ASPIRA WOMEN'S: Receives Noncompliance Notice From Nasdaq
BABCOCK & WILCOX: Louisiana Product Liability Suit Goes to Trial
BASIC FUN: Nears Balance Sheet Restructuring Deal
BLACKRIDGE OPERATING: Seeks to Hire Herrin Law as Legal Counsel
BOYS MECHANICAL: Mary Sieling Named Subchapter V Trustee
CANADA AMALCO: Moody's Assigns B1 CFR & Rates New 1st Lien Loans B1
CASPIAN TECHNOLOGY: Kicks Off Subchapter V Bankruptcy Case
CATASAUQUA BOROUGH, PA: S&P Affirms 'BB+' Rating on Go Debt
CELEBRATION POINTE: Unsecureds to Get Share of Cash Flow Note
CHICKEN SOUP FOR THE SOUL: Hits Chapter 11 Bankruptcy in Delaware
CINEMARK USA: Moody's Rates New $500MM Unsec. Notes Due 2032 'B2'
CLASS ACT RESTAURANT: Seeks to Hire David A. Ray PA as Counsel
CONN'S INC: Mulls Possible Bankruptcy Filing as Sales Dip
COTTONWOOD COFFEE: Taps Gerry Law Firm as Bankruptcy Counsel
CROSSROAD REALTY: Public Auction of Properties Set
CUSHMAN & WAKEFIELD: S&P Affirms 'BB-' ICR, Outlook Negative
DEL MONTE: Moody's Cuts CFR to Caa2 & 1st Lien Loan to Caa3
DELTA APPAREL: Hits Chapter 11, Agrees to Sell Its Salt Life Brand
DIOCESE OF SACRAMENTO: Can End Priest Retirement Plan
DODGE CONSTRUCTION: In Talks With Lenders on Fresh Cash,Debt Revamp
DT&T LOGISTICS: Robert Handler Named Subchapter V Trustee
EIGER BIOPHARMACEUTICALS: Gets Approval for Chapter 11 Drug Sale
EMERGENT BIOSOLUTIONS: Receives $250 Mil. More of HHS Pact Changes
ENDURO PROPERTIES: James Bailey Named Subchapter V Trustee
ENVIVA INC:Judge Rejects Bid to Retain Vinson as Bankruptcy Counsel
EPIQ GLOBAL: Moody's Cuts $1.2BB First Lien Term Loan Rating to B3
ESE INDUSTRIES: Hires Richard R. Robles PA as Bankruptcy Counsel
FINTHRIVE: Creditors Hold Debt Swap Talks
FLEXPOINT SENSOR: Incurs $172K Net Loss in First Quarter
FOREVER GETTING: Edward Burr Named Subchapter V Trustee
FRANCISCO'S BUILDING: Taps Totaro & Shanahan as Insolvency Counsel
FRONTIER AIRLINES: Wins $48MM Judgment vs. Aircraft Lessor
FUTURE MORTGAGE: Gary Murphey Named Subchapter V Trustee
GARRETT MOTION: S&P Raises Secured Debt Rating to 'BB+'
GATEWAY PUNDIT: Accused of Using Ch.11 to Derail Defamation Suit
GEOSYNTEC CONSULTANTS: Moody's Assigns First Time 'B3' CFR
GIGAMONSTER NETWORKS: Asks Court Okay for Ch.11 Wind-Down Plan Vote
GMP BORROWER: Moody's Withdraws 'B3' CFR on Debt Extinguishment
GREENWICH INVESTMENT: Taps Bernstein Shur Sawyer as Counsel
HEART TO HEART: Frances Smith Named Subchapter V Trustee
HESS EMBROIDERY: Holly Miller Named Subchapter V Trustee
HIGHLAND CAPITAL: 5th Cir. Affirms Contempt Order v. Former CEO
HILLTOP SPV: Seeks to Hire Husch Blackwell as Bankruptcy Counsel
HILLTOP SPV: Taps Erik White of HMP Advisory Holdings as CRO
HOBBS & ASSOCIATES: Fitch Assigns 'B+' LongTerm IDR, Outlook Stable
INNOVATIVE LOAN: Areya Holder Aurzada Named Subchapter V Trustee
IROQUOIS-HUEY LLC: Patrick Malloy Named Subchapter V Trustee
J.A. WALL: Hires Haller & Colvin as Bankruptcy Counsel
J.H. LLC: Seeks to Hire Memory Memory & Causby as Legal Counsel
JAMES WYTT BELCHER: Subchapter V Case Converted to Chapter 7
JANE STREET: Moody's Puts 'Ba1' CFR Under Review for Upgrade
KOMBU KITCHEN: Taps Garofolo & Ramsdell as Special Counsel
KULR TECHNOLOGY: Lands Initial $400K NASA Deal for Battery Testing
L'ADRESSE LLC: Updates SBA Secured Claim; Files Amended Plan
LARRY OUTLAW & SONS: Starts Subchapter V Bankruptcy Proceeding
LD CONSTRUCTION: Unsecureds to Split $84K over 6 Years
LEBANON PLATINUM: Creditors to Get Proceeds From Liquidation
LIME LINE: Mark Politan of Politan Law Named Subchapter V Trustee
LITTLE SCHOLARS: S&P Alters Outlook to Negative, Affirms 'BB+' ICR
LL FLOORING: Hires AlixPartners to Help Operations, to Raise Cash
M.P.M. PROPERTY: Angela Shortall Named Subchapter V Trustee
MATTHEWS INTERNATIONAL: S&P Raises Unsecured Note Rating to 'B+'
MEDEX LLC: Kimberly Strong Named Subchapter V Trustee
MEGNA REAL ESTATE: Unsecureds to be Paid in Full in Plan
MEGNA TEMECULA COUNTRY: Unsecureds to be Paid in Full in Plan
MEGNA TEMECULA HACIENDA: Unsecureds to be Paid in Full in Plan
MELT BAR: Seeks to Hire George Roman Auctioneers as Auctioneer
MILK STREET CAFE: Hits Chapter 11 Bankruptcy Protection
MINI MANIA: Seeks to Hire Patrick Rettig as Financial Consultant
MIR SCIENTIFIC: Gets Court Nod to Sell Assets to Iron Dome
MIRACLE RESTAURANT: Closes 2 Arby's Locations in Indiana
MIRACLE RESTAURANT: Taps Heller Draper & Horn LLC as Counsel
NEVADA COPPER: Asks Court to Approve Bid Rules for Asset Sale
NGP XI MIDSTREAM: S&P Assigns 'B' Issuer Credit Rating
NINE WEST: Leung's Discrimination Case v. Kasper Group Tossed
NJ MOBILE: Mark Politan of Politan Law Named Subchapter V Trustee
OBRA CAPITAL: Moody's Withdraws 'Caa1' Corporate Family Rating
OCUGEN INC: Board Approves PricewaterhouseCoopers as New Auditor
OK USA: Exits Its U.S. Business After Chapter 7 Filing
OPGEN INC: Posts $386K Net Income in First Quarter
OUTLOOK THERAPEUTICS: Receives UK Authorization for Eye Treatment
PAC BUILD: Seeks to Hire Choi & Ito as Bankruptcy Counsel
PARK SQUARE COURT: Madison Equities Unit Files for Ch. 7 Bankruptcy
PARLEMENT TECHNOLOGIES: U.S. Trustee Unable to Appoint Committee
PETAWATT PROPERTIES: U.S. Trustee Unable to Appoint Committee
PHASEBIO PHARMACEUTICALS: Gets Court Okay to Exit Chapter 11
PLAZA MARIACHI: Hires Evans Jones & Reynolds as Local Counsel
PLAZA MARIACHI: Taps Burgess Law Group as Bankruptcy Counsel
PREMIER CAR WASH: Sec. 341(a) Meeting in Subch. V Case on July 26
PRO CIV CONSTRUCTION: K. Clark Named Successor Subchapter V Trustee
PURDUE PHARMA: Court Tosses $6 Billion OxyContin Settlement
R&N SENECA LLC: Starts Subchapter V Bankruptcy Proceeding
RECESS HOLDINGS: Moody's Affirms 'B2' CFR, Outlook Stable
REDBOX ENTERTAINMENT: Wins Lawsuit to Replace Board of Directors
RESIDEO FUNDING: Moody's Rates New $500MM Unsecured Notes 'Ba3'
RITE AID CORP: Intends to Close More Stores in Chapter 11
RITE AID: Wants Maryland Chapter 11 Lawsuit Dismissed
SEMILEDS CORP: Inks 6th Amendment to Loan Agreement with CEO Doan
SEMILEDS CORP: Reports Q3 2024 Results; Engages Financial Advisor
SIGNAL RELIEF: Hires Buchanan Ingersoll as Litigation Counsel
SOUTH HILLS: Committee Taps Province LLC as Financial Advisor
SRX ENTERPRISES: Seeks to Sell Property to MB Laurel for $1.7MM
SSME SERVICES: Mark Politan Named Subchapter V Trustee
STAR HOLDING: Moody's Assigns 'B2' CFR, Outlook Stable
STEWARD HEALTH: Potential Buyers Withdraw Planned Group Sale
SUPPLY SOURCE: Cancels Planned Chapter 11 Auction
SUSAN H. ARENSBERG: HSBC Wins Dismissal of Adversary Case
T & T DYNAMITE: Court Dismisses Bankruptcy Case
THERACARE PSYCHOLOGY: Claims to be Paid From Disposable Income
TOMMY'S FORT WORTH: Trustee Taps Gray Reed as Legal Counsel
TOMMY'S FORT: Trustee Taps Trinity River as Financial Advisor
TREVENA INC: May Receive up to $10M Under Amended Financing Deal
TROTTA TIRES: Maria Yip Named Subchapter V Trustee
U.S. LIGHTING: 1800 Diagonal Converts $10,000 Debt Into Equity
U.S. PRESS LLC: Kicks Off Subchapter V Bankruptcy Proceeding
U.S. PRESS: Seeks to Hire Stone & Baxter as Bankruptcy Counsel
UNITED STATES TWIRLING: Starts Subchapter V Bankruptcy Proceeding
UXIN LTD: Has Deal With Zhengzhou Airport to Form Joint Venture
VIKING CRUISES: S&P Affirms 'BB' Rating on Senior Secured Notes
W3 TOPCO: Moody's Withdraws 'B3' CFR Following Debt Extinguishment
W3 TOPCO: S&P Discontinues 'B-' ICR Following Refinancing
WALGREENS BOOTS: Moody's Lowers CFR to Ba3 & Unsecured Notes to B1
WATCO COMPANIES: Fitch Assigns 'B+' Rating on Sr. Unsecured Notes
WINDSOR TERRACE: Seeks to Hire Hansen & Hunter as Accountant
WINDTREE THERAPEUTICS: Has Deal to Sell up to $35M Worth of Shares
ZIFF DAVIS: Extension Transaction No Impact on Moody's 'B1' CFR
[*] Costly Chapter 11 Process Leads to Prepack Filings Increase
[*] Restaurant Chains That Suffered Bankruptcy in 2024
[^] BOND PRICING: For the Week from July 8 to 12, 2024
*********
111-25 116 LLC: Property Sale Proceeds to Fund Plan
---------------------------------------------------
111-25 116 LLC filed with the U.S. Bankruptcy Court for the Eastern
District of New York a Disclosure Statement for Amended Plan of
Reorganization dated June 28, 2024.
The Debtor owns the real property and improvements located at
111-25 116 Street, Brooklyn, New York (the "Property").
The Property is encumbered by a mortgage in favor of Golden Bridge
LLC ("Golden Bridge"). Golden Bridge obtained a judgment of
foreclosure and sale against the Debtor, causing the Debtor to file
for chapter 11 protection to stay the foreclosure sale.
The Plan provides for the sale of the Property to 104 Oxford Realty
LLC pursuant to the sale contract attached to the Plan. The Debtor
shall take all necessary steps, and perform all necessary acts, to
consummate the terms and conditions of the Plan, which include
obtaining and closing on the Sale1 and distributing the proceeds to
pay creditors pursuant to the Plan. The Closing Date shall occur as
soon as practicable after the Confirmation Date.
The Sale Approval Order, which may be encompassed in the
Confirmation Order, must provide for payment from Sale Proceeds for
the Golden Bridge Secured Claim in full upon closing. The balance
of the Debtor's creditors will be paid from the Sale Proceeds
pursuant to their statutory priorities as set forth in the Plan.
Class 4 consists of Unsecured Claims. Subject to the provisions of
Article 7 of the Plan, with respect to Disputed Claims, in full
satisfaction and release of the Unsecured Claims, the holders of
Allowed Unsecured Claims shall receive Cash in the full amount of
their Allowed Unsecured Claim with federal judgment interest after
payment is made at Closing to satisfy the Allowed NYC Secured
Claim, the Allowed Golden Bridge Secured Claim, and the Allowed
Other Secured Claims.
Class 5 consists of Interest Holders. Holders of Interests in the
Debtor shall maintain their ownership interest in the Debtor. After
payment is made to satisfy the Allowed NYC Secured Claim, the
Allowed Golden Bridge Secured Claim, the Other Secured Claims and
Unsecured Claims, the remaining Sale Proceeds, if any, shall be
distributed to the Debtor's Interest Holders. Thereafter, all
Interests in the Debtor shall be canceled and of no force and
effect.
The Plan shall be implemented by the sale of the Property followed
by distribution of the Sale Proceeds as set forth in the Plan. The
Confirmation Order shall contain appropriate provisions, consistent
with section 1142 of the Bankruptcy Code, directing the Debtor and
any other necessary party to execute or deliver or to join in the
execution or delivery of any instrument required to effect a
transfer of the Property of the Debtor as required by the Plan and
to perform any act, including the satisfaction of any lien, that is
necessary for the consummation of the Plan.
Payments and distributions to be made under the Plan, shall be made
by the Debtor or the Reorganized Debtor from the Sale Proceeds and
the Debtor's Available Cash on the Closing Date, if any. These
funds shall be utilized to satisfy payments due consistent with the
terms of the Plan.
A full-text copy of the Disclosure Statement dated June 28, 2024 is
available at https://urlcurt.com/u?l=1zMjpH from PacerMonitor.com
at no charge.
Attorneys for the Debtor:
Leo Jacobs, Esq.
Jacobs P.C.
595 Madison Avenue, 39th Floor
New York, NY 10022
Tel: (212) 229-0476
Email: leo@jacobspc.com
About 111-25 116 LLC
111-25 116 LLC, based in South Richmond Hill, NY, owns the real
property and improvements located at 111-25 116 Street, Brooklyn,
New York (the "Property").
The Debtor filed its voluntary petition for Chapter 11 protection
(Bankr. E.D.N.Y. Case No. 23-44047) on November 2, 2023, listing $1
million to $10 million in assets and $500,000 to $1 million in
liabilities. Lata D. Dass as owner, signed the petition.
Judge Jil Mazer-Marino oversees the case.
JACOBS PC serve as the Debtor's legal counsel.
1741 N. WESTERN: Seeks to Tap Flanagan Bilton as Special Counsel
----------------------------------------------------------------
1741 N. Western Ave Acquisitions, LLC seeks approval from the U.S.
Bankruptcy Court for the Northern District of Illinois to employ
Flanagan Bilton, LLC, as its special counsel.
The firm will represent the Debtor in real estate tax matters which
relate to the operation and sale of the commercial real property
located at 1741 N. Western Ave. in Chicago, IL. More specifically,
the Debtor anticipates FB making filings and appearances before any
administrative body or court and presenting any tax payment under
protest that FB deems necessary to obtain a lawful assessment, tax,
or tax refund.
Flanagan Bilton will charge for its legal services on a contingency
basisin an amount equal to 10 percent of the annual tax saved for
each year.
As disclosed in the court filings, Flanagan Bilton does not hold or
represent any interest adverse to the Debtor's estate with respect
to the services to be rendered.
The firm can be reached through:
John P. Flanagan, Esq.
Flanagan Bilton, LLC
1 N La Salle St #2100
Chicago, IL 60602
Phone: (312) 782-5000
About 1741 N Western Ave Acquisitions
1741 N Western Ave Acquisitions LLC is a single asset real estate
(as defined in 11 U.S.C. Sec. 101(51B)).
1741 N Western Ave Acquisitions filed Chapter 11 petition (Bankr.
N.D. Ill. Case No. 23-12072) on Sept. 12, 2023, with $1 million to
$10 million in both assets and liabilities. Michael L. Lerner,
manager and member, signed the petition.
Judge Timothy A Barnes oversees the case.
Goldstein & McClintock, LLLP serves as the Debtor's legal counsel.
3208 GSD: Seeks to Hire Johnson Law Group as Legal Counsel
----------------------------------------------------------
3208 GSD, LLC seeks approval from the U.S. Bankruptcy Court for the
District of Columbia to hire The Johnson Law Group, LLC as its
counsel.
The firm's services include:
(1) provision of general advice and counsel concerning
compliance with the requirements of Chapter 11;
(2) preparation of any necessary amendments to the Debtor's
schedules, statement of financial affairs, and related documents as
appropriate;
(3) representation of the Debtor in possession in all
contested matters. Certain adversary proceedings in this Court will
require a separate retainer agreement;
(4) representation as appropriate in any related matters in
other Courts;
(5) provision of advice and counsel concerning the structure
of a plan and any required amendments thereto;
(6) provision of advice concerning the feasibility of
confirmation of a plan and representation in connection with the
confirmation process;
(7) liaison, consultation, and where appropriate, negotiation
with creditors and other parties in interest;
(8) review of relevant financial information;
(9) review of claims with a view to determining which claims
are allowable and in what amounts;
(10) prosecution of claims objections, as appropriate;
(11) representation at the section 341 meeting of creditors and
at any hearings or status conferences in court; and
(12) provision of such representations as may be necessary and
appropriate to the case.
William C. Johnson, Jr., Esq. would charge his regular hourly rate
for services, currently $450 per hour.
As of April 17, 2024, the Debtor has paid $7,500 toward the $7,500
initial retainer fee.
William C. Johnson, Jr., Esq., a member of Johnson Law Group, does
not hold or represent any interest that is adverse to the estate,
and is a disinterested person within the meaning of 11 U.S.C.
101(14).
The firm can be reached through:
William C. Johnson, Jr., Esq.
The Johnson Law Group, LLC
6305 Ivy Lane, Suite 630
Greenbelt, MD 20770
Phone: (301) 477-3450
Phone: (202) 525-2958
Fax: (301) 477-4813
Email: William@JohnsonLG.Law
About 3208 GSD, LLC
3208 GSD, LLC sought protection for relief under Chapter 11 of the
Bankruptcy Code (Bankr. D.C. Case No. 24-00191) on May 29, 2024,
listing $500,001 to $1 million in both assets and liabilities.
Judge Elizabeth L Gunn presides over the case.
William C. Johnson, Jr., Esq. at The Johnson Law Group, LLC
represents the Debtor as counsel.
5 SHEFFIELD: Hires Walter D. Nealy PC as Bankruptcy Counsel
-----------------------------------------------------------
5 Sheffield LLC seeks approval from the U.S. Bankruptcy Court for
the District of New Jerset to hire Walter D. Nealy, PC as its
counsel.
The firm will render these services:
a. advise and consult with the debtor concerning questions
arising in the conduct and Administration of the Estate;
b. appear for and prosecute and represent the applicant's
suits and claims arising out of this case;
c. investigate an prosecute other actions arising under the
Bankruptcy Code;
d. assist in the preparation of such pleadings, motions,
notices and orders as required and orderly administration of this
estate;
e. consult with and advise the Debtor after the preparation
and prosecution of the Plan;
f. assist the Debtor in disposition of the estate, if there is
any to be disposed of; and
g. render any an all-other services requested by the debtor in
the context of the within Bankruptcy filing.
The firm will charge $400 per hour.
Walter D. Nealy, PC received a retainer of $2,000.
Walter D. Nealy, PC is a disinterested person within the meaning of
11 U.S.C. Section 101(14), according to court filings.
The firm can be reached through:
Walter D. Nealy, Esq.
Walter D. Nealy, PC
100 South Van Brunt Street, 2C
Englewood, NJ 07631
Phone: (201) 227-0063
Email: nealylaw@gmail.com
About 5 Sheffield LLC
5 Sheffield LLC sought protection for relief under Chapter 11 of
the Bankrutpcy Code (Bankr. D.N.J. Case No. 24-16186) on June 20,
2024.
Judge John K Sherwood presides over the case.
Walter D. Nealy, Esq. at Walter D. Nealy, PC represents the Debtor
as counsel.
80 COTTONTAIL: Seeks to Hire A.Y. Strauss LLC as Counsel
--------------------------------------------------------
80 Cottontail RE Holdings LLC seeks approval from the U.S.
Bankruptcy Court for the District of New Jersey to hire A.Y.
Strauss LLC as its counsel.
The firm's services include:
(a) providing the Debtor with advice and preparing all
necessary documents regarding debt restructuring, bankruptcy and
asset dispositions;
(b) taking all necessary actions to protect and preserve the
Debtor’s estate during the pendency of this Chapter 11 Case;
(c) preparing on behalf of the Debtor, as
debtor-in-possession, all necessary motions, applications, answers,
orders, reports and papers in connection with the administration of
this Chapter 11 Case;
(d) counseling the Debtor with regard to its rights and
obligations as a debtor-in-possession;
(e) appearing in Court to protect the interests of the Debtor;
and
(f) performing all other legal services for the Debtor which
may be necessary and proper in these proceedings and in furtherance
of the Debtor’s operations.
The firm's hourly rates range from $425 to $550 per hour.
In addition, the firm will receive reimbursement for out-of-pocket
expenses incurred.
The retainer fee is $45,000.
Eric Horn, Esq., a partner at A.Y. Strauss, disclosed in a court
filing that his firm is a "disinterested person" pursuant to
Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Eric H. Horn, Esq.
Heike M. Vogel, Esq.
James P. Mansfield, Esq.
A.Y. STRAUSS, LLC
101 Eisenhower Parkway, Suite 412
Roseland, NJ 07068
Tel: (973) 287-5006
Fax: (973) 226-4104
About 80 Cottontail RE Holdings LLC
80 Cottontail RE Holdings LLC filed its voluntary petition for
relief under Chapter 11 of the Bankruptcy Code (Bankr. D.N.J. Case
No. 24-16654) on July 1, 2024, listing $1 million to $10 million in
both assets and liabilities. The petition was signed by Tzvi
Rivkin, sole member.
Eric H. Horn, Esq. at A.Y. STRAUSS LLC represents the Debtor as
counsel.
ACCENT ON BODY: Taps Healthcare Management Advisors as OCP
----------------------------------------------------------
Accent on Body Cosmetic Surgery, P.C. seeks approval from the U.S.
Bankruptcy Court for the Western District of Pennsylvania to employ
Healthcare Management Advisors as a professional employed in the
ordinary course of business.
The firm's services include:
a. Assist the Company in the preparation of cash requirements,
cash forecasts and financial projections.
b. Practice Management Consulting.
c. Formulate and execute immediate cash conservation
strategies.
d. Prepare monthly financial statements.
e. Prepare Monthly Operating Reports.
f. The paying bills of the Debtor.
g. Cash flow management.
h. Human Resource Management.
i. Payroll services.
j. Testify at the Debtor's 341 Meeting of Creditors.
k. Support such other matters as may be requested that fall
within the Healthcare Management Advisors expertise.
The parties have agreed to a fee of $5,000 per month.
As disclosed in the court filings, Healthcare Management Advisors
is a "disinterested person" and does not hold any interest that is
materially adverse to the Debtor, its estate, its creditors, or the
parties in interest.
The firm can be reached through:
Kevin Miko
Healthcare Management Advisors
790 Holiday Drive
Pittsburg, PA 15220
Tel: (412) 950-1111
About Accent on Body Cosmetic Surgery, P.C.
The Debtor offers cosmetic surgery specializing in breast
augmentation, rhinoplasty, facelift surgery, liposuction and body
contouring.
Accent on Body Cosmetic Surgery, P.C. in Pittsburgh, PA, filed its
voluntary petition for Chapter 11 protection (Bankr. W.D. Pa. Case
No. 24-21485) on June 17, 2024, listing $100,000 to $500,000 in
assets and $1 million to $10 million in liabilities. Dr. James
Fernau as president, signed the petition.
CALAIARO VALENCIK serve as the Debtor's legal counsel.
ACHILLES FOOT & ANKLE: Starts Subchapter V Bankruptcy Proceeding
----------------------------------------------------------------
On June 20, 2024, Achilles Foot & Ankle Center Inc. filed Chapter
11 protection in the Eastern District of Virginia. According to
court documents, the Debtor reports $4,415,174 in debt owed to 1
and 49 creditors. The petition states that funds will be available
to unsecured creditors.
A meeting of creditors under 11 U.S.C. Section 341(a) is slated for
July 15, 2024 at 10:00 a.m. at Richmond Division (11): Office of
the U.S. Trustee, Telephonic meeting.
About Achilles Foot & Ankle Center Inc.
Achilles Foot & Ankle Center Inc. is a foot & ankle specialist in
Central Virginia. The Debtor offers foot & ankle surgery,
orthoplastic reconstruction, lower extremity wound healing, foot &
ankle ambulatory surgery center, podiatric medicine & diabetic foot
care, laser therapy for foot pain, laser therapy for neuropathy,
and shockwave therapy for resistant foot pain.
Achilles Foot & Ankle Center Inc. sought relief under Subchapter V
of Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D. Va. Case No.
24-32320) on June 20, 2024. In the petition signed by Dr. James B.
Baldwin, III as chief
executive officer, the Debtor reports total assets as of June 19,
2024 amounting to $339,733 and total liabilities as of June 19,
2024 amounting to $4,415,174.
The Debtor is represented by:
Peter J. Barrett, Esq.
Adolyn C. Wyatt, Esq.
KUTAK ROCK LLP
901 East Byrd Street
Suite 1000
Richmond, VA 23219
Tel: 804-644-1700
Email: peter.barrett@kutakrock.com
Adolyn.Wyatt@kutakrock.com
ACHY LEGS CLINICS: Commences Subchapter V Bankruptcy Process
------------------------------------------------------------
Achy Legs Clinics LLC filed Chapter 11 protection in the Southern
District of Texas. According to court documents, the Debtor reports
$1,439,839 in debt owed to 1 and 49 creditors. The petition states,
funds will be available to unsecured creditors.
About Achy Legs Clinics LLC
Achy Legs Clinics LLC is a leg pain specialist serving Tomball,
TX.
Achy Legs Clinics LLC sought relief under Subchapter V of Chapter
11 of the U.S. Bankruptcy Code (Bankr. S.D. Tex. Case No. 24-32861)
on June 20, 2024. In the petition signed by Gaurav Aggarwala, as
owner, the Debtor reports total assets of $1,563,642 and total
debts amounting to $1,439,839.
Honorable Bankruptcy Judge Jeffrey P. Norman oversees the case.
The Debtor is represented by:
Robert C Lane, Esq.
THE LANE LAW FIRM
6200 Savoy Dr Ste 1150
Houston TX 77036-3369
Tel: (713) 595-8200
Fax: (713) 595-8201
Email: notifications@lanelaw.com
AIRWAY AIR: Seeks to Hire Latham Luna Eden & Beaudine as Counsel
----------------------------------------------------------------
Airway Air Charter, Inc. and Noble Jet Holdings seek approval from
the U.S. Bankruptcy Court for the Southern District of Florida to
hire Latham, Luna, Eden & Beaudine, LLP, as their counsel.
The firm's services include:
(a) advising the Debtor regarding its rights and duties in
this Chapter 11 case;
(b) preparing pleadings, including a disclosure statement and
plan of reorganization; and
(c) taking other necessary actions incident to the proper
preservation and administration of the Debtor's estate.
The firm will charge $485 per hour for attorney's services and $105
per hour for paraprofessional services.
In addition, the firm will seek reimbursement for its out-of-pocket
expenses.
The firm received from the Debtor an advance fee of $26,738.
Daniel Velasquez, Esq., a partner at Latham, disclosed in a court
filing that his firm is a "disinterested person" pursuant to
Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Daniel A Velasquez, Esq.
Latham Luna Eden & Beaudine, LLP
201 S. Orange Ave., Suite 1400
Orlando, FL 32801
Tel: (407) 481-5800
Fax: (407) 481-5801
Email: dvelasquez@lathamluna.com
About Airway Air Charter
Airway Air Charter, Inc. is a private jet company dedicated to
excellence, personalized service, and adherence to safety
standards. Its private aircraft can land at numerous airports not
serviced by commercial airlines.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Fla. Case No. 24-16200) on June 21,
2024, with $100,000 to $500,000 in assets and $1 million to $10
million in liabilities. Jonathan Jackson, president, signed the
petition.
Judge Robert A. Mark presides over the case.
Daniel A. Velasquez, Esq. at Latham Luna Eden & Beaudine, LLP
represents the Debtor as legal counsel.
ALCOTT ENTERPRISES: Gregory Jones Named Subchapter V Trustee
------------------------------------------------------------
The U.S. Trustee for Region 16 appointed Gregory Jones, Esq., at
Stradling Yocca Carlson & Rauth, PC as Subchapter V trustee for
Alcott Enterprises, LLC.
Mr. Jones will be paid an hourly fee of $575 for his services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. Jones declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Gregory K. Jones, Esq.
Stradling Yocca Carlson & Rauth, PC
10100 N. Santa Monica Boulevard, Suite 1400
Los Angeles, CA 90067
Telephone: (424) 214-7000
Facsimile: (424) 214-7010
Email: gjones@stradlinglaw.com
About Alcott Enterprises
Alcott Enterprises, LLC sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. C.D. Calif. Case No. 24-14992) on June
25, 2024, with $100,001 to $500,000 in assets and $500,001 to $1
million in liabilities.
Judge Julia W. Brand presides over the case.
Thomas B. Ure Esq., at Ure Law Firm represents the Debtor as
bankruptcy counsel.
AMARILLO PLATINUM: Seeks to Hire Dunham Hildebrand as Counsel
-------------------------------------------------------------
Amarillo Platinum, LLC d/b/a SpringHill Suites Amarillo seeks
approval from the U.S. Bankruptcy Court for the Middle District of
Tennessee to hire Dunham Hildebrand Payne Waldron, PLLC as its
counsel.
The firm's services include:
a. rendering legal advice with respect to the rights, powers
and duties of the Debtors in the management of their property;
b. investigating and, if necessary, instituting legal action
on behalf of the Debtors to collect and recover assets of the
estates of the Debtors;
c. preparing all necessary pleadings, orders and reports with
respect to this proceeding and to render all other necessary or
proper legal services;
d. assisting and counseling the Debtors in the preparation,
presentation and confirmation of its disclosure statements and
plans of reorganization;
e. representing the Debtors as may be necessary to protect
their interests; and
f. performing all other legal services that may be necessary
and appropriate in the general administration of the Debtors'
estate.
The firm's current standard hourly rates are:
Attorneys $500 per hour
Paralegals $175 per hour
The firm received a retainer in the amount of $56,000.
Dunham Hildebrand is a "disinterested person" under Bankruptcy Code
Secs. 101(14) and 327, according to court filings.
The firm can be reached through:
Henry E. (Ned) Hildebrand, IV, Esq.
Gray Waldron, Esq.
DUNHAM HILDEBRAND PAYNE WALDRON, PLLC
9020 Overlook Boulevard, Suite 316
Brentwood, TN 37027
Phone: (615) 933-5851
Email: ned@dhnashville.com
Email: gray@dhnashville.com
About Amarillo Platinum
Amarillo Platinum, LLC d/b/a SpringHill Suites Amarillo filed its
voluntary petition for relief under Chapter 11 of the Bankruptcy
Code (Bankr. M.D. Tenn. Case No. 24-02447) on July 1, 2024, listing
up to $50,000 in assets and $10 million to $50 million in
liabilities. The petition was signed by Mitul Patel as manager.
Judge Charles M Walker presides over the case.
Henry E. ("Ned") Hildebrand, IV, Esq. at DUNHAM HILDEBRAND PAYNE
WALDRON, PLLC represents the Debtor as counsel.
AMERICAN EXPRESS: Moody's Assigns First Time B2 Corp. Family Rating
-------------------------------------------------------------------
Moody's Ratings assigned a first time B2 corporate family rating
and B2-PD probability of default rating to Global Business Travel
Group, Inc. (dba "American Express Global Business Travel" or "Amex
GBT") in connection with the company's refinancing transaction. At
the same time, Moody's assigned B2 ratings to GBT US III LLC's
proposed $360 million backed senior secured revolver due 2029 and a
$1.4 billion backed senior secured term loan due 2031. GBT US III
LLC is the US borrower under the proposed credit facility and an
indirect subsidiary of Amex GBT. Moody's also assigned Amex GBT an
SGL-2 speculate grade liquidity (SGL) rating, reflecting an
assessment of good liquidity. The outlook is stable for both
issuers. Amex GBT is New York-based global business travel
management company ("TMC").
Proceeds from the new term loan will be used to refinance the
company's existing indebtedness and pay related fees and expenses.
The company's new 5-year $360 million revolving credit facility,
expected to be undrawn at closing, will replace its existing $50
million revolver due September 2026. The proposed refinancing
follows the company's recently announced agreement to acquire CWT
Holdings LLC ("Carlson Travel" or "CWT") for cash and stock deal
valued at around $570 million. The transaction is expected to close
in the second half of 2024, subject to regulatory approvals and
customary closing conditions.
Moody's consider the acquisition of CWT, the third largest TMC, a
positive credit development as it will meaningfully increase Amex
GBT's scale and revenue diversity across new industries, global
multinationals, small and medium enterprise ("SME") customers and
government institutions. The company has identified approximately
$155 million in annual run-rate cost synergies to be realized over
the next three years. However, in Moody's view, CWT is currently
unprofitable and the high cost of integration carries significant
execution risk, including the potential loss of customers as they
transition to a new platform. While the purchase is debt-free,
Moody's anticipate that CWT will be a drag on Amex GBT's earnings
and free cash flow for several quarters following the close of the
transaction.
Moody's assess Amex GBT's exposure to governance risks as high and
relevant to the assigned rating. Governance factors include the
company's high debt leverage and acquisitive growth strategies.
Amex GBT is a controlled company according to the New York Stock
Exchange ("NYSE") given its significant ownership held by American
Express Company ("American Express" A2 stable), the Qatar
Investment Authority ("QIA") and Expedia Group, Inc. ("Expedia"
Baa2 stable). Most of the company's board members are not
considered independent by us, a further governance challenge.
RATINGS RATIONALE
Amex GBT's B2 CFR reflects the company's very high pro forma
debt-to-EBITDA leverage in excess of 10.0 times (based on Moody's
adjustments; incorporating current losses from CWT and excluding
future cost savings not yet implemented) as of twelve months ended
March 31, 2024, which Moody's expect will decline towards the
low-6.0 times by the end of 2025 as synergies are realized and
restructuring costs diminish. Moody's assess the company's overall
business risk to be elevated due to significant upfront cash
payments required to achieve planned cost savings as well as a need
to turnaround the loss-making business. The rating also considers
the highly competitive and fragmented global travel industry within
which the company operates, the largely transactional-nature of its
revenues and its acquisitive growth strategy. The cyclical and
discretionary nature of corporate travel services can lead to
variability in GBT's revenue and earnings. Additionally, Amex GBT's
history of cash flow generation is limited, particularly in light
of large cash flow deficits experienced during the pandemic period.
Moody's expect the company will continue to incur large
restructuring and integration expense for at least the next 2-3
years as it streamlines operations.
The rating is supported by Amex GBT's significant global scale and
leading market position as a provider of B2B corporate travel and
expense services and software to large-to-medium-sized companies,
the breadth of its technology-enabled solutions, its strong
supplier relationships, as well as a long-standing client base with
client retention rate of around 96% in 2023. Customer concentration
is modest, with less than 40% of customer revenue was generated by
its top 50 clients in 2023, while no single client accounted for
more than 2% revenue. With over $30 billion in total transaction
volume ("TTV") expected in 2024 ($45 billion TTV pro forma for
CWT), the company has the ability to drive significant volume in
cost-efficient way for suppliers, and provide comprehensive content
and competitive rates to its corporate customers. The rating is
also supported by Moody's expectation for a continuing recovery in
global business travel, albeit at a slower pace, and for the
combined business to generate organic revenue growth in the
low-single digit range and meaningfully expand EBITDA margins over
the next 12-18 months. Moody's also believe that the company has
demonstrated a good track record of managing costs over the last
travel-industry downturn, as well as extracting cost synergies from
past acquisitions. Amex GBT has a publicly-stated commitment to a
conservative financial policy, with a long-term leverage target
between 1.5x-2.0x (based on management's net debt-to-adjusted
EBITDA metric).
The SGL-2 speculative grade liquidity rating reflects Moody'sv
expectation that Amex GBT will maintain good liquidity over the
next 12-15 months. Sources of liquidity consist of cash balances
more than $300 million as of March 31, 2024 (pro forma for the
proposed refinancing and CWT acquisition), expectation for annual
free cash flow generation of at least $100 million, and full access
to a new $360 million revolving credit facility due 2029. Moody's
do not anticipate any revolver usage over the next 12-15 months.
Moody's also believe that all available liquidity sources to the
company provide good coverage relative to the annual mandatory term
loan amortization of $14 million, paid quarterly starting on March
31, 2025. The proposed revolver will have a springing maximum first
lien net leverage ratio covenant of 3.5x, tested quarterly, when
more than 35% ($126 million), with a specified amount of letters of
credit to be excluded, of the revolver is utilized. Moody's do not
expect a covenant test to apply over the next 12-15 months.
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 $405
million and 100% of Consolidated EBITDA, plus unlimited amounts
subject to a 3.0x first lien net leverage ratio. There is an
outside maturity sublimit of $250 million. The credit agreement is
expected to include "J. Crew", "Chewy" and "Serta" provisions.
The stable outlook reflects Moody's view that the company will
achieve its cost savings while maintaining organic revenue growth
in the low-single digit percentages and expand its EBITDA margin
(based on Moody's adjustments) to low-teen percentages over the
next 12-18 months. Moody's also project the company's
debt-to-EBITDA (based on adjustments) will decrease to the low 6.0
times by the end of 2025, while the company maintains good
liquidity, including free cash flow in the mid-to-high-single digit
percentages range of total debt.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if Moody's expect Amex GBT will
maintain organic revenue and EBITDA growth, debt-to-EBITDA (based
on Moody's adjustments and expensing all capitalized software
costs) is sustained about 5.0 times, EBITDA margin (based on
Moody's adjustments) at or above 12.5% and free cash flow-to-debt
(based on Moody's adjustments) in the high-single digit
percentages, while maintaining good liquidity. The ratings upgrade
would also require the company to maintain balanced financial
policies.
The ratings could be downgraded if industry challenges, competitive
pressures or, external shocks lead to lower than expected EBITDA
growth, acquisition synergies or cost savings are delayed,
financial policies become aggressive or liquidity deteriorates.
Quantitatively, the ratings could be downgraded if Moody's expect
debt-to-EBITDA (based on Moody's adjustments and expensing all
capitalized software costs) will be sustained above 6.5 times or
free cash flow will decline toward break-even.
Formed in 2014, following the spin-off from American Express, GBT
provides travel and events management services and solutions to
over 19,000 business clients in more than 140 countries. In May
2022, GBT completed a reverse recapitalization via a special
purpose acquisition company and is currently listed on the NYSE
(ticker: GBTG). Moody's project Amex GBT will generate pro forma
annual revenue of around $3.3 billion in 2024.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
AMERICANAS SA: Independent Committee Ends Probe
-----------------------------------------------
Danielle Chaves of Bloomberg News reports that Americanas SA says
independent committee concluded investigation.
Committee that investigates circumstances that caused the events
reported on January 11, 2023 informed that the work was completed
on June 30, 2024 Americanas says in filing.
Results of the investigation are being compiled and will be
presented to company's board in the coming weeks.
Committee told the company that the analyzes carried out by it did
not serve as a basis for the work of the Federal Police that
resulted in Operation Disclosure.
It also said that the results of the committee's work should not be
confused with the conclusions of public authorities, including the
Federal Police.
About Americanas SA
Americanas was one of the largest diversified retail chains in
Brazil, with a wide platform of physical stores, robust e-commerce,
fintech, and has just entered into the niche food retail. It is
listed on B3, being indirectly controlled by billionaire Jorge
Paulo Lemann, Carlos Alberto Sicupira and Marcel Telles.
The retailer nosedived in January 2023 after becoming mired in an
accounting scandal. The firm filed for bankruptcy at a court in Rio
de Janeiro on Jan. 19, 2023.
Americanas sought protection under Chapter 15 of the Bankruptcy
Code (Bankr. S.D.N.Y. Case No. 23-10092) on Jan. 25, 2023. White &
Case LLP, led by John K. Cunningham, is the U.S. counsel.
AMERICANAS SA: Spanish Police Releases Ex-CEO Amid Fraud Probe
--------------------------------------------------------------
Leda Alvim of Bloomberg News reports that Americanas SA ex-CEO
released by Spanish Police amid fraud probe.
Miguel Gutierrez, the former chief executive officer of Americanas
SA, was released by Spanish police in Madrid on Saturday after
being detained as part of an investigation over his role in the
multi-billion dollar accounting fraud at the Brazilian retailer.
Gutierrez, who holds dual Spanish and Brazilian citizenship, was
detained early Friday in Madrid to testify to the police and
jurisdictional authorities. He was released Saturday and has
returned to his residence in Madrid, his lawyers said.
About Americanas SA
Americanas was one of the largest diversified retail chains in
Brazil, with a wide platform of physical stores, robust e-commerce,
fintech, and has just entered into the niche food retail. It is
listed on B3, being indirectly controlled by billionaire Jorge
Paulo Lemann, Carlos Alberto Sicupira and Marcel Telles.
The retailer nosedived in January 2023 after becoming mired in an
accounting scandal. The firm filed for bankruptcy at a court in Rio
de Janeiro on Jan. 19, 2023.
Americanas sought protection under Chapter 15 of the Bankruptcy
Code (Bankr. S.D.N.Y. Case No. 23-10092) on Jan. 25, 2023. White &
Case LLP, led by John K. Cunningham, is the U.S. counsel.
APPLIED ENERGETICS: Expands Facilities at Arizona Tech Park
-----------------------------------------------------------
Applied Energetics, Inc., announced July 8, 2024, that it has
exercised its option to lease more than 5,000 square feet of
additional space at the University of Arizona Tech Park to support
the Company's investment in a new Battle Lab and laser
manufacturing capacity to ensure it has the critical infrastructure
in place to fulfill both current and possible future priority U.S.
military programs. With this expansion, the Company will occupy
approximately 26,000 sq. ft. of space at the Arizona Tech Park.
The Company took the option to lease this additional space under
the June 7, 2023, amendment to its Lease Agreement with Campus
Research Corporation, as Landlord. The 2023 Amendment also
provides for a tenant improvement allowance for the additional
space of up to approximately $129,000 upon completion of work and
compliance with the requirements for receipt of any requested
disbursements under the allowance.
The new space is a high bay, light industrial facility that is
expected to host Applied Energetics' Battle Lab to support laser
system testing against relevant targets and emerging threats. The
Lab is expected to enable technology maturation and be the venue
for customer and partner demonstrations under realistic and
controlled conditions. The facility, as planned, will also provide
the capability to manufacture, integrate, and test advanced lasers
as Applied Energetics makes its anticipated transition of its
technology to the next stage of its lifecycle.
Key features of the Battle Lab are expected to include:
* Multi-Domain Simulation: Enabling the simulation of complex
environments, providing comprehensive testing capabilities for
integrated operations.
* Advanced Sensor Integration: Cutting-edge sensor technology to
monitor and analyze every aspect of the testing process, delivering
precise data to inform future innovations.
* Real-Time Feedback: Offering real-time feedback and analysis,
providing our engineers and developers with the right information
to support technology integration efforts.
* Collaborative Environment: A design that fosters
collaboration, and provides a venue to host military and industry
partners, encouraging the exchange of ideas and accelerating the
development of the Company's next-generation technologies.
"The build-out and development of this new extension is an
essential step toward fulfilling our commitment to both current and
potential future customers," said Dr. Gregory Quarles, CEO and
president of Applied Energetics. "The new capabilities made
possible by this investment will play a key role in accelerating
the continued testing and demonstration progress we have achieved
with our best-in- class USPL technology. The new space will also
provide us with a purpose-built advanced manufacturing, assembly,
and testing space as we move through the development process to
production."
Dr. Quarles added, "Arizona Tech Park has been an ideal location
for Applied Energetics. The ability to expand our capabilities as
our needs have grown in an efficient and cost-effective manner,
within a thriving aerospace and defense community, along with the
robust support from the Tech Park officials, and our partners at
the University of Arizona, has been instrumental in positioning us
for this next phase of our growth."
About Applied Energetics
Headquartered in Tucson, Arizona, Applied Energetics, Inc. --
http://www.appliedenergetics.com/-- specializes in the development
and manufacture of advanced high-performance lasers and optical
systems, and integrated guided energy systems, for prospective
defense, national security, industrial, biomedical, and scientific
customers worldwide.
Las Vegas, NV-based RBSM LLP, the Company's auditor since 2016,
issued a "going concern" qualification in its report dated March
26, 2024, citing that the Company has suffered recurring losses
from operations and will require additional capital to fund its
current operating plan, that raises substantial doubt about the
Company's ability to continue as a going concern.
AQUA VERDE INVESTMENT: Kicks Off Subchapter V Bankruptcy Process
----------------------------------------------------------------
Aqua Verde Investment Group LLC filed Chapter 11 protection in the
District of Nevada. According to court filing, the Debtor reports
$8,129,500 in debt owed to 1 and 49 creditors. The petition states
funds will be available to unsecured creditors.
A meeting of creditors under 11 U.S.C. Section 341(a) is slated for
July 29, 2024 at 2:00 p.m. in Room Telephonically.
About Aqua Verde Investment Group LLC
Aqua Verde Investment Group LLC is the owner of a semi-developed
land located at 447 Lakeshore Boulevard, Incline Village, NV having
an appraised value of $13.5 million.
Aqua Verde Investment Group LLC sought relief under Subchapter V of
Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Nev. Case No.
24-50627) on June 24, 2024. In the petition signed by Gary J. Hill,
managing member, the Debtor reports total assets of $13,748,000 and
total liabilities of $8,129,500.
Honorable Bankruptcy Judge Hilary L. Barnes handles the case.
The Debtor is represented by:
Sean P. Patterson, Esq.
SEAN PATTERSON, ESQ.
232 Court Street
Reno, NV 89501
Tel: (775) 786-1615
Fax: (775) 322-7288
Email: Illegalpat@aol.com
ARCADIA BIOSCIENCES: Inks Separation Agreement With President & CEO
-------------------------------------------------------------------
Arcadia Biosciences, Inc. disclosed in a Form 8-K filed with the
Securities and Exchange Commission on July 8, 2024, that the
Company and Stanley Jacot, Jr. entered into a Separation and
Release Agreement dated July 2, 2024, pursuant to which Mr. Jacot
resigned as Arcadia's president, chief executive officer and
director.
Pursuant to the Separation Agreement, in consideration for Mr.
Jacot entering into and not revoking the Separation Agreement,
Arcadia agreed to pay Mr. Jacot a cash severance payment equal to
$288,077, less applicable withholdings, taxes and other lawful
deductions, payable in a lump sum after the Separation Date and
after the expiration of the applicable revocation period (or
otherwise as provided in the Separation Agreement). In addition,
the Separation Agreement provides for 12 months of accelerated
vesting of stock options held by Mr. Jacot and the payment of Mr.
Jacot's health insurance premiums through February 2025. Subject
to certain exceptions and limitations, the Separation Agreement
includes a general release of claims by Mr. Jacot and customary
confidentiality and non-disparagement provisions.
On July 3, 2024, Arcadia's board of directors appointed Thomas J.
Schaefer, Arcadia's current chief financial officer, to the
position of president and chief executive officer of Arcadia,
effective as of July 5, 2024. Mr. Schaefer, age 48, has served as
Arcadia's chief financial officer since January 2023. Mr. Schaefer
joined Arcadia in July 2020 as senior director of finance and
served as vice president of finance and investor relations for the
company until his appointment as chief financial officer. Prior to
that, Mr. Schaefer was the director of finance at Flavor Producers,
a portfolio company owned by the private equity firm GTCR that
specializes in beverages and snacks, from June 2018 through July
2020. Prior to 2018, he held a number of finance roles with
various companies and worked as an equity research analyst with
Edward Jones early in his career. Mr. Schaefer, a chartered
financial analyst, earned a bachelor of business administration in
economics and finance from McKendree University in Lebanon,
Illinois and a master of business administration from the Marshall
School of Business at the University of Southern California.
On July 3, 2024, Arcadia's board of directors appointed Mark
Kawakami as Arcadia's new chief financial officer to succeed Mr.
Schaefer, effective as of July 5, 2024. Mr. Kawakami, age 46,
joined Arcadia in September 2021 as the director of finance, and
since January 2023, he has served as Arcadia's vice president of
finance. Prior to joining Arcadia, Mr. Kawakami was the director
of business analytics at Renaissance Food Group from July 2020 to
August 2021. Renaissance Food Group, a subsidiary of Calavo
Growers, specialized in the manufacture of consumer food products
distributed through multiple retail and wholesale channels. From
February 2018 to July 2020, Mr. Kawakami worked as a consultant for
DLC, a consultancy specializing in finance, accounting, and project
management. Prior to 2018, Mr. Kawakami worked as a finance
consultant and held finance roles with companies in various
industries including grocery, convenience retail, and financial
services. Mr. Kawakami earned a bachelor of International
Relations from the University of Southern California and a master
of business administration from the Marshall School of Business at
the University of Southern California. Mr. Kawakami's annual base
salary is $212,063.
About Arcadia
Headquartered in Dallas, TX, Arcadia Biosciences, Inc. is a
producer and marketer of innovative, plant-based food and beverage
products. The Company has used non-genetically modified
("non-GMO") advanced breeding techniques to develop these
proprietary innovations which it is now commercializing through the
sales of seed and grain, food ingredients and products, trait
licensing and royalty agreements. The acquisition of the assets of
Live Zola, LLC added coconut water to its portfolio of products.
Tempe, Arizona-based Deloitte & Touche LLP, the Company's auditor
since 2007, issued a "going concern" qualification in its report
dated March 28, 2024, citing that the Company has an accumulated
deficit, recurring net losses and net cash used in operations, and
resources that will not be sufficient to meet its anticipated cash
requirements, which raises substantial doubt about its ability to
continue as a going concern.
ARNOLD BROTHERS: AmeriState Wins Dismissal of Chapter 11 Case
-------------------------------------------------------------
Judge Paul R. Thomas of the United States Bankruptcy Court for the
Eastern District of Oklahoma granted AmeriState Bank's motion to
dismiss the case captioned as In re: ARNOLD BROTHERS FOREST
PRODUCTS, INC. Debtor, Case No. 24-80318-PRT, Chapter 11 Subchapter
V pursuant to 11 U.S.C. Sec. 1112(b) (Bankr. E.D. Okla.)
Arnold Brothers is a Texas corporation located in Choctaw,
Oklahoma, which packages and sells wood for cooking and other
purposes. Its sole owner and president is James Wytt Belcher. The
Debtor was placed into receivership in Choctaw County District
Court in late March or early April of 2024. The Debtor filed a
chapter 11 bankruptcy petition on April 30, 2024. The next day,
the Debtor filed an amended Petition electing to proceed under
Subchapter V of Chapter 11. The Debtor also filed a Declaration in
Support of its Chapter 11 Petition, and its first Motion to Use
Cash Collateral.
In the Declaration, the Debtor identified AmeriState Bank as its
primary secured creditor with a debt of $1,950,000.00 secured by
assets with an estimated value of $1,000,000.00 and a lien on all
its cash. The Debtor's Motion to Use Cash Collateral drew
objections from AmeriState and the U.S. Trustee. After a hearing
on May 6, 2024, the Court denied the Debtor's Motion without
prejudice, based on the Debtor's inability to account for its use
of cash, insufficient proof of need to avoid immediate harm, and
failure to offer adequate protection.
AmeriState filed a Motion to Dismiss Case and a Motion for Relief
from the Stay and Abandonment on May 13, 2024. The Sub V Trustee
filed a joinder of the Motion to Dismiss based on the Debtor's
failure to provide proof of insurance on business assets. The U.S.
Trustee also filed a Motion to Dismiss for failure to provide proof
of insurance.
On May 29, 2024, the Debtor filed schedules and statements. Its
Summary of Assets and Liabilities lists total assets of
$1,538,950.00, and total liabilities of $4,508,945.88, including
secured claims totaling $2,177,116.24 and unsecured claims totaling
$2,331,829.64.1
Schedule D lists AmeriState's claim as $1,948,968.24, secured by
cash, Logs/Wood, miscellaneous office items, and 9 vehicles, valued
at $323,300.00
The Debtor filed an Amended Motion to Use Cash Collateral proposing
a replacement lien on post-petition assets in an amount equivalent
to the decreased value of collateral resulting from Debtor's use of
cash collateral, but did not propose adequate protection payments.
The Debtor argued that authorization to use cash collateral was
essential to its ability to continue operations.
This Motion drew objections from AmeriState, the U.S. Trustee, and
the Sub V Trustee. The Debtor and AmeriState agreed to a one-week
interim agreement that allowed the Debtor to use $11,000.00 of cash
collateral for identified expenses. The Court continued the
hearing on the Motion, setting it for evidentiary hearing on June
20, 2024 with AmeriState's Motions to Dismiss and for Relief From
the Stay, the Sub V Trustee's Joinder in AmeriState's Motion to
Dismiss and the U.S. Trustee's Motion to Dismiss.
At the June 20, 2024 evidentiary hearing, the first matter
presented was the the Debtor's Amended Motion to Use Cash
Collateral. The Debtor's accountant, Kenneth Taylor, testified on
behalf of the Debtor. Taylor has served as Belcher's personal
accountant for approximately fifteen years and has prepared the
Debtor's business tax returns for the last three to four years.
David Payne, C.P.A., testified on behalf of AmeriState as an expert
witness regarding business valuations, insolvency and bankruptcy
reorganizations. Payne requested financial information from the
Debtor, including bank statements, electronic accounting data, tax
returns, sales tax reports, and information on the Debtor's assets.
Based on his review and analysis of the available business
records, and the testimony and evidence presented thus far in the
case, Payne did not believe there was sufficient information to
properly value AmeriState's collateral since the petition date nor
how collateral has been valued and reported on Debtor's tax
returns.
At the conclusion of this evidence, the Court denied the Debtor's
Amended Motion to Use Cash Collateral, finding that the Debtor
failed to provide evidence of the value of its inventory securing
AmeriState's claim. This prevented the Court from determining
whether the Debtor's offer of monthly payments adequately protected
AmeriState.
The Court then heard testimony regarding AmeriState's Motion to
Dismiss and Motion for Relief from the Stay, with the parties
focusing on the Debtor's ability to reorganize.
AmeriState asserts that cause exists for dismissal due to
substantial or continuing loss to or diminution of the estate, the
absence of a reasonable likelihood of rehabilitation, and
unauthorized use of cash collateral. AmeriState's expert witness,
David Payne, testified that the Debtor's lack of complete business
records prevented him from accurately assessing the value of
AmeriState's collateral including cash and receivables. However,
without use of cash collateral the Debtor will be unable to sustain
its operations and AmeriState's collateral will diminish in value.
Further, based upon his review of the available financial records,
the Debtor is unable to generate sufficient income to service its
current debt. To propose a reasonable plan of reorganization and
rehabilitate this company, as the Debtor desires, it must generate
sufficient funds to service debt plus interest, pay administrative
costs, and pay fixed costs and expenses.
Payne estimates this will require $200,000.00 gross monthly income,
not the $80,000.00 to $100,000.00 the Debtor's records reflect it
has generated. Therefore, there is no reasonable likelihood of
rehabilitation. Furthermore, Debtor admitted to selling inventory
without AmeriState's permission and using cash collateral without
its permission. The Court finds that AmeriState established cause
for dismissal by a preponderance of the evidence.
The Debtor's burden was to specifically identify unusual
circumstances which demonstrate that dismissal is not in the best
interests of creditors and the estate, and to show there is a
reasonable prospect a plan will be confirmed within a reasonable
period of time. The Debtor did not identify or establish any
"unusual circumstances." Instead, the Debtor argued that it can and
will propose a feasible plan prior to the ninety-day deadline set
forth in Sec. 1189 for a Subchapter V debtor. But the Debtor never
explained how it would generate income to fund a plan without the
use of AmeriState's cash collateral, nor did it establish how much
it must pay to adequately protect AmeriState for the Debtor's use
of cash collateral or sale of inventory pursuant to § 363(b) in
the ordinary course of business.
Belcher's knowledge of the business is not questioned; however,
based on Payne's detailed analysis, it is not reasonably likely
that a feasible plan can be proposed and confirmed.
Neither AmeriState's expert nor the Debtor's accountant had
complete and accurate business records from which to testify as to
whether the Debtor has a reasonable possibility of a successful
reorganization. Nonetheless, Payne opined that based on his review
and analysis of the business records made available to him, and his
substantial experience evaluating similarly situated businesses,
this debtor would not be able to effectively reorganize
The Debtor's accountant provided an analysis that was based in part
on historical numbers and also on projections provided to him by
Belcher that supports the Debtor's claim that it can reorganize.
Belcher's beliefs and testimony otherwise, while sincere, were not
supported by the evidentiary record established at trial sufficient
to convince the Court that the Debtor is able to reorganize within
a reasonable time.
A copy of the Court's decision dated July 3, 2024, is available at
https://urlcurt.com/u?l=wmI2Z5
About Arnold Brothers Forest Products, Inc.
Arnold Brothers Forest Products, Inc. operates a business making
packaging and selling cooking wood and other wood products.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D. Okla. Case No. 24-80318) on April 30,
2024. In the petition signed by James Belcher, its president, the
Debtor disclosed up to $50,000 in assets and up to $10 million in
liabilities.
Judge Paul R. Thomas oversees the case.
Jeffery Barclay Potts, Esq., at Jeff Potts, represents the Debtor
as legal counsel.
ASPIRA WOMEN'S: Receives Noncompliance Notice From Nasdaq
---------------------------------------------------------
Aspira Women's Health Inc. reported in a Form 8-K filed with the
Securities and Exchange Commission on July 5, 2024, that the
Company received written notice from the Listing Qualifications
Staff of the Nasdaq Stock Market, LLC dated July 1, 2024, notifying
the Company that for the last 30 consecutive business days prior to
the date of the Notice, the Company's minimum Market Value of
Listed Securities was below the minimum of $35 million required for
continued listing on the Nasdaq Capital Market pursuant to Nasdaq
Listing Rule 5550(b)(2). In accordance with Nasdaq Listing Rule
5810(c)(3)(C), Nasdaq has provided the Company with 180 calendar
days, or until Dec. 30, 2024, to regain compliance with the MVLS
Requirement. If the Company regains compliance with the MVLS
Requirement, Nasdaq will provide written confirmation to the
Company and close the matter.
The Notice does not result in the delisting of the Company's common
stock from the Nasdaq Capital Market. To regain compliance with
the MVLS Requirement, the market value of the Company's common
stock must meet or exceed $35.0 million for a minimum of 10
consecutive business days during the 180-day grace period ending on
the Compliance Date, unless the Staff exercises its discretion to
extend this ten consecutive business day period pursuant to Nasdaq
Listing Rule 5810(c)(3)(H). The Company is evaluating potential
actions to regain compliance with the MVLS Requirement and intends
to actively monitor the market value of its listed securities. The
Company may also, if appropriate, consider other options to regain
compliance with Nasdaq's continued listing standard such as by
increasing its stockholders' equity to at least $2.5 million.
In the event the Company does not regain compliance prior to the
Compliance Date, the Company will receive written notification that
its securities are subject to delisting, at which point the Company
may appeal the delisting determination.
There can be no assurance that the Company will be successful in
maintaining its listing of its common stock on the Nasdaq Capital
Market.
About Aspira Women's Health
Formerly known as Vermillion, Inc., Aspira Women's Health Inc. --
http://www.aspirawh.com-- is dedicated to the discovery,
development, and commercialization of noninvasive, AI-powered tests
to aid in the diagnosis of gynecologic diseases. OvaWatch and
Ova1Plus are offered to clinicians as OvaSuiteSM. Together, they
provide the only comprehensive portfolio of blood tests to aid in
the detection of ovarian cancer for the 1.2+ million American women
diagnosed with an adnexal mass each year. OvaWatch provides a
negative predictive value of 99% and is used to assess ovarian
cancer risk for women where initial clinical assessment indicates
the mass is indeterminate or benign, and thus surgery may be
premature or unnecessary. Ova1Plus is a reflex process of two
FDA-cleared tests, Ova1 and Overa, to assess the risk of ovarian
malignancy in women planned for surgery.
Boston, Massachusetts-based BDO USA, P.C., the Company's auditor
since 2012, issued a "going concern" qualification in its report
dated March 29, 2024, citing that Company has suffered recurring
losses from operations and expects to continue to incur substantial
losses in the future, which raise substantial doubt about its
ability to continue as a going concern.
BABCOCK & WILCOX: Louisiana Product Liability Suit Goes to Trial
-----------------------------------------------------------------
Judge Meredith S. Grabill of the United States Bankruptcy Court for
the Eastern District of Louisiana denied motions for summary
judgment in the adversary proceeding filed by The Babcock & Wilcox
Company captioned as IN RE: THE BABCOCK & WILCOX COMPANY, DEBTOR,
THE BABCOCK & WILCOX COMPANY, PLAINTIFF, V. PHILADELPHIA ENERGY
SOLUTIONS REFINING AND MARKETING LLC, PES LIQUIDATING TRUST,
WESTPORT INSURANCE COMPANY, XL INSURANCE AMERICA, INC., ALLIANZ
GLOBAL RISKS US INSURANCE COMPANY, HDI GLOBAL INSURANCE COMPANY,
AND CERTAIN UNDERWRITERS AT LLOYD'S LONDON-SYNDICATE 1221
(NAVIGATORS), ZURICH AMERICAN INSURANCE COMPANY, CERTAIN
UNDERWRITERS AT LLOYD'S SUBSCRIBING TO ENNMG1800181, CERTAIN
UNDERWRITERS AT LLOYD'S SUBSCRIBING TO ENNMG1800281, CERTAIN
UNDERWRITERS AT LLOYD'S SUBSCRIBING TO ENNMG1800282, CERTAIN
UNDERWRITERS AT LLOYD'S SUBSCRIBING TO EN100070-18, DEFENDANTS,
CASE NO: 00-10992 CHAPTER 11 SECTION A, ADV. NO. 21-1014 (Bankr.
E.D. La.).
The sole count in the adversary proceeding filed by B&W seeks:
(i) a declaration that the confirmed plan of reorganization in
B&W's 2000 bankruptcy case discharged the claims now asserted
against B&W entities in a Pennsylvania state court by Defendants
Philadelphia Energy Solutions Refining & Marketing, LLC ("PESRM"),
and PES Liquidating Trust; and
(ii) enforcement of the confirmed plan's discharge injunction.
On February 26, 2021, PESRM and PES Liquidating Trust filed a
lawsuit in a Pennsylvania state court against B&W alleging
negligence and products liability claims associated with a June
2019 explosion at the GP Refinery. The refinery was formerly
operated by PESRM and the lawsuit alleges the explosion was caused
by the failure of an elbow joint manufactured by B&W and installed
in the refinery in the 1970s.
Before the Court are cross-motions for summary judgment filed by
B&W and the Defendants. Both motions are opposed. The parties have
submitted statements and counterstatements of material facts.
On April 28, 2021, B&W obtained leave of Court to reopen B&W's
bankruptcy case and filed the adversary proceeding, seeking a
declaratory judgment that the claims alleged by the PES Entities in
the Pennsylvania state court action were discharged by the Joint
Plan confirmed during B&W's prior bankruptcy and to enforce the
Joint Plan's discharge injunction. As a result, the proceedings in
the Pennsylvania state court action are stayed. The parties engaged
in extensive discovery and filed the cross-motions for summary
judgment.
As an initial matter, the PES Entities assert that they cannot be
bound by the terms of the confirmed Joint Plan -- specifically the
release language discharging all non-asbestos-related prepetition
claims -- as PESRM "was formed and acquired the GP Refinery in
2012, twelve years after B&W filed for bankruptcy and six years
after B&W's Joint Plan . . . was confirmed," and thus could not
have had any prepetition relationship with B&W. PES further
asserts that "any alleged pre-petition relationship between Gulf
Oil, Chevron, or Sunoco and B&W could not be imputed to [the PES
Entities]."
The Court disagrees. "Under res judicata, a final judgment on the
merits of an action precludes the parties or their privies from
relitigating issues that were or could have been raised in that
action," the Court says.
Based on uncontested facts, the Court finds that the PES Entities
are joint venturers with or successors in interest to Sunoco's
interest in the GP Refinery and that Sunoco, having received notice
of B&W's bankruptcy and participated in that proceeding, was in a
position to adequately represent the PES Entities' interest in the
B&W bankruptcy. Thus, the Court finds there to be sufficient
identity between Sunoco and the PES Entities to justify the
application of res judicata in this case.
The real question, then, is whether the "same cause of action [is]
involved in both cases" -- that is, whether the claims alleged by
the PES Entities against B&W in the Pennsylvania state court action
are prepetition claims that were discharged by the Order confirming
the Joint Plan in B&W's bankruptcy case.
In the present case, B&W provided actual notice of its bankruptcy
case to Sunoco, the owner of the GP Refinery that housed the elbow
joint that ultimately failed. Sunoco participated in B&W's
bankruptcy case and filed a proof of claim against the estate. The
PES Entities share sufficient identity with Sunoco to be bound by
the terms of the Joint Plan if the Pennsylvania state action claims
are indeed prepetition claims that have been discharged through
confirmation of the Joint Plan, according to the Court. But the
competent and undisputed summary judgment evidence is inadequate to
reveal whether any injury related to the failed elbow joint
manufactured by B&W was relatively certain to manifest at some
point, the Court states. Without that evidence, this Court is
unable to determine under the prepetition-relationship test whether
the claims alleged in the Pennsylvania state court action are
prepetition bankruptcy claims.
Assuming that the PES Entities' claims alleged in the Pennsylvania
state court action are prepetition bankruptcy claims, they were
discharged by the Order confirming the Joint Plan, the Court says.
The PES Entities assert that the PES Entities' claims in the
Pennsylvania state court action could not have been discharged
because the Joint Plan did not provide for a future-claims
representative or trust for non-asbestos future claims. Although
appointing a future-claims representative often satisfies due
process requirements for future claimants, the use of a
future-claims representative or establishment of a future-claims
trust is not required to do so, the Court notes.
Based on the undisputed facts before it, the Court concluded that,
although the post-petition injuries resulted from the prepetition
conduct of the Debtor, the Debtor did not take steps to identify
the claimants to whom it could give notice sufficient to satisfy
due process that their future claims might be discharged by a
confirmation order.
Notice, however, is not the issue in the matter before the Court.
The genuine issues of material fact exist as to whether any injury
related to the failed elbow joint manufactured by B&W was
relatively certain to manifest at some point such that the claims
asserted in the Pennsylvania state court action would constitute
prepetition claims that were discharged by the confirmation of the
Joint Plan in B&W's 2000 bankruptcy case, the Court notes.
A copy of the Court's decision dated July 2, 2024, is available at
https://urlcurt.com/u?l=PLmfMQ
About Babcock & Wilcox
Headquartered in Akron, Ohio, Babcock & Wilcox Enterprises is a
growing, globally-focused renewable, environmental and thermal
technologies provider with decades of experience providing
diversified energy and emissions control solutions to a broad range
of industrial, electrical utility, municipal and other customers.
B&W's innovative products and services are organized into three
market-facing segments which changed in the third quarter of 2020
as part of the Company's strategic, market-focused organizational
and re-branding initiative to accelerate growth and provide
stakeholders improved visibility into its renewable and
environmental growth platforms.
Babcock & Wilcox reported net losses of $10.30 million in 2020,
$129.04 million in 2019, $724.86 million in 2018, $379.01 million
in 2017, and $115.08 million in 2016. As of Sept. 30, 2021, the
Company had $729.36 million in total assets, $708.96 million in
total liabilities, and $20.40 million in total stockholders'
equity.
The Babcock & Wilcox Company filed for Chapter 11 bankruptcy
(Bankr. E.D. La. Case No. 00-10992) on Feb. 22, 2000, before the
Hon. Judge Jerry A. Brown. A plan was confirmed in the case on
Jan. 18, 2006.
BASIC FUN: Nears Balance Sheet Restructuring Deal
-------------------------------------------------
Jonathan Randles of Bloomberg News reports that toy seller Basic
Fun Inc. nears deal to restructure balance sheet.
Toy seller Basic Fun Inc. is nearing a deal with its lenders and
private equity backer, Falcon Structured Equity Partners LP, to
restructure its balance sheet after filing Chapter 11 earlier this
week.
Basic Fun lawyer Mark Joachim said during a Tuesday, July 2, 2024,
bankruptcy hearing that Basic Fun and its financial backers are
close to reaching an agreement in principle on a transaction that
would restructure the company’s capital structure.
Boca Raton, Fl.-based Basic Fun struggled following the closing of
Toys R' Us, which had been its largest customer, and as a result of
the Covid-19 pandemic, according to court filing.
About Basic Fun Inc.
Basic Fun, Inc. -- https://www.basicfun.com/ -- develops and
markets novelty and impulse toys. The Company offers collectibles,
small dolls, retro and science toys, pre-school, youth electronics,
and construction.[BN]
Basic Fun Inc. sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Del. Case No. 24-11432) on June 28,
2024. In the petition filed Frank McMahon, as chief financial
officer, the Debtor reports estimated assets and liabilities
between $50,000 and $100,000 each.
The Debtor is represented by:
Shanti M. Katona, Esq.
Polsinelli PC
301 Yamato Road
Suite 4200
Boca Raton, FL 33431
BLACKRIDGE OPERATING: Seeks to Hire Herrin Law as Legal Counsel
---------------------------------------------------------------
Blackridge Operating LLC seeks approval from the U.S. Bankruptcy
Court for the Eastern District of Texas to employ Herrin Law, PLLC
as its counsel.
The firm will render these services:
(a) advise the Debtor with respect to its powers and duties;
(b) prepare and pursue the confirmation of the plan and
approval of a disclosure statement;
(c) prepare legal papers;
(d) appear in the court and protect the interests of the
Debtor before the court; and
(e) perform all other legal services for the Debtor which may
be necessary and proper in these proceedings.
The hourly rates of the firm's counsel and staff are:
C. Daniel Herrin $400
Manolo Santiago $400
Other Attorneys $300
Paralegals $125 - $175
In addition, the firm will seek reimbursement for expenses
incurred.
The firm received a retainer in the amount of $8,262 from the
Debtor.
C. Daniel Herrin, Esq., owner of Herrin Law, disclosed in a court
filing that the firm is a "disinterested person" as defined in
Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
C. Daniel Herrin, Esq.
Herrin Law, PLLC
12001 N. Central Expy., Suite 920
Dallas, TX 75243
Telephone: (469) 607-8551
Facsimile: (214) 722-0271
Email: ecf@herrinlaw.com
About Blackridge Operating LLC
Blackridge Operating LLC filed its voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Tex. Case No.
24-41419) on June 17, 2024, listing $500,001 to $1 million in both
assets and liabilities.
Judge Brenda T Rhoades presides over the case.
Daniel Herrin, Esq. at Herrin Law, PLLC represents the Debtor as
counsel.
BOYS MECHANICAL: Mary Sieling Named Subchapter V Trustee
--------------------------------------------------------
The Acting U.S. Trustee for Region 12 appointed Mary Sieling as
Subchapter V trustee for Boys Mechanical, LLC.
Ms. Sieling will be paid an hourly fee of $330 for her services as
Subchapter V trustee and an hourly fee of $200 for paralegal time.
In addition, the Subchapter V trustee will receive reimbursement
for work-related expenses incurred.
Ms. Sieling declared that she is a disinterested person according
to Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Mary F. Sieling
150 South Fifth Street, Suite 3125
Minneapolis, MN 55402
Email: mary@mantylaw.com
About Boys Mechanical
Boys Mechanical, LLC sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Minn. Case No. 24-41698) on June 28,
2024, with $1 million to $10 million in both assets and
liabilities. Kent Boll, managing member, signed the petition.
Judge Kesha L. Tanabe presides over the case.
Joseph Dicker, Esq., at Joseph W Dicker, PA represents the Debtor
as legal counsel.
CANADA AMALCO: Moody's Assigns B1 CFR & Rates New 1st Lien Loans B1
-------------------------------------------------------------------
Moody's Ratings assigned a B1 Corporate Family Rating and B1-PD
Probability of Default Rating to Canada Amalco (initially Neon
Maple Purchaser Inc.). The company's proposed senior secured bank
credit facilities, consisting of a first lien term loan and a first
lien revolving credit facility, were assigned a rating of B1. The
rating outlook is assigned stable. The action follows Nuvei
Corporation's (Nuvei) receipt of shareholder and court approval for
the company's proposed going private transaction with Advent
International, L.P., Philip Fayer, certain investment funds managed
by Novacap Management Inc., and CDPQ. The transaction, valuing
Nuvei at an enterprise value of approximately $6.4 billion, remains
subject to customary closing conditions, including receipt of key
regulatory approvals. The deal is expected to close in late 2024 or
the first quarter of 2025.
Moody's expect leverage to decline to around mid-5x within one year
post completion of the take private transaction, and mid- to
high-4x within 18 months. This will be driven by low teens revenue
growth and the attainment of around a 30% EBITDA margin (Moody's
adjusted). Nuvei's LTM March 31, 2024 EBITDA margin was
approximately 24%. The company will benefit from operating leverage
at higher revenue levels, realization of cost savings associated
with the past acquisition of Paya, benefits from in-sourced
processing, in addition to a shift away from stock based
compensation (which Moody's treat as an expense) towards a
management incentive plan which is payable upon a subsequent change
of control event.
RATINGS RATIONALE
Canada Amalco's B1 CFR reflects solid growth prospects within the
company's Global Commerce and B2B, government and ISV channels, and
good profitability. The company's differentiated business strategy
focuses on several online-native merchant verticals, and the
company's competitive advantage stems from the breadth of its
technology capabilities. High customer integration and service
complexity limits churn, and capability differentiation provides
wallet share and market share growth opportunities.
The rating is constrained by growing but still modest business
scale and ESG and regulatory risks related to gambling end markets
served. Governance risk is a key driver of the ratings, reflecting
controlled ownership without an independent board that may pursue
leveraging shareholder return transactions and debt financed
acquisitions. Concentrated ownership is somewhat balanced by the
company's founder CEO and two strategic investors together
controlling half of the company's board. The ratings also reflect
social risks related to the regulatory environment associated with
online gambling, cybersecurity risk related to consumer data, and
dependence on highly skilled technology talent. The company's
business does benefit from the digitization of financial flows and
services.
The stable outlook reflects Moody's expectation that Canada Amalco
will grow its revenue in the low teen digits percentage range.
Additionally, Moody's expect the company will expand its EBITDA
margin (Moody's adjusted) to about 30% as a result of increased
scale, executed cost savings related to the earlier Paya
acquisition and previously identified opportunities, in addition to
a shift away from stock based compensation. This will support
leverage declining to below 5x (Moody's adjusted) within 18 months
post transaction close.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if Canada Amalco expands its revenue
scale while maintaining consistent revenue growth with strong
profitability and leverage below 4x debt/EBITDA (Moody's adjusted).
An upgrade would also require the company to maintain more
conservative financial policies. The ratings could be downgraded if
revenue or profitability decline with financial leverage expected
to be sustained above 5x debt/EBITDA (Moody's adjusted).
Liquidity is very good based upon an expectation of $100 million of
cash at closing and the proposed $600 million Revolving Credit
Facility, which is expected to be undrawn. Moody's also anticipate
approximately $50 to $100 million of free cash flow in the first
year post-close. The company is not expected to pay a dividend
post-close.
The proposed Senior Secured credit facility is rated B1, consistent
with the CFR, reflecting the single class of secured debt
comprising the preponderance of the debt capital structure.
Marketing terms for the new credit facility (final terms may differ
materially) include the following: Incremental pari passu debt
capacity up to the greater of a dollar-capped amount equal to 100%
of closing date EBITDA and 100% of consolidated EBITDA, plus
unlimited amounts subject to the greater of 5.0x first lien net
leverage ratio or leverage neutral incurrence. There is an inside
maturity sublimit up to a dollar-capped amount equivalent to 125%
of the closing date EBITDA (with a builder component), along with
amounts incurred under the ratio debt basket. A "blocker" provision
restricts certain transfers of material intellectual property to
unrestricted subsidiaries, including where material IP is leased
back by the company or it is used to raise IP-backed financing.
There are no protective provisions restricting an up-tiering
transaction. Amounts up to 200% of the builder basket and certain
RP carve-outs may be reallocated to incur debt.
Canada Amalco (initially Neon Maple Purchaser Inc.) is a
newly-formed entity controlled by Advent International, L.P. that
entered into an agreement to acquire Nuvei Corporation. Nuvei
Corporation, based in Montreal, is a global payment technology
company. The company operates in over 200 markets, with local
acquiring in 50 markets, 150 currencies and 700 alternative payment
methods. The company generated revenues of approximately $1.3
billion in the LTM period ended March 31, 2024.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
CASPIAN TECHNOLOGY: Kicks Off Subchapter V Bankruptcy Case
----------------------------------------------------------
On June 20, 2024, Caspian Technology Concepts LLC filed Chapter 11
protection in the Eastern District of Wisconsin. According to court
documents, the Debtor reports between $1 million and $10 million in
debt owed to 1 and 49 creditors. The petition states funds will be
available to unsecured creditors.
A meeting of creditors under 11 U.S.C. Section 341(a) is slated for
July 24, 2024 at 2:00 p.m. in Room Telephonically.
About Caspian Technology Concepts LLC
Caspian Technology Concepts LLC is a global business technology
management firm. It offers strategic advisory services, managed
infrastructure solutions, cybersecurity services, and advanced
communications services.
Caspian Technology Concepts LLC sought relief under Subchapter V of
Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D. Wis. Case No.
24-23280) on June 20, 2024. In the petition filed by Dale G. Boehm,
as member, the Debtor reports estimated assets between $100,000 and
$500,000 and estimated liabilities between $1 million and $10
million.
Honorable Bankruptcy Judge Katherine M. Perhach oversees the case.
The Debtor is represented by:
Justin M. Mertz, Esq.
MICHAEL BEST & FRIEDRICH LLP
790 N. Water Street, Suite 2500
Milwaukee WI 53202
Tel: 414-225-4972
Email: jmmertz@michaelbest.com
CATASAUQUA BOROUGH, PA: S&P Affirms 'BB+' Rating on Go Debt
-----------------------------------------------------------
S&P Global Ratings revised the outlook to positive from negative
and affirmed its 'BB+' underlying rating on Catasauqua Borough,
Pa.'s general obligation (GO) debt outstanding.
"The positive outlook reflects the borough's improved general fund
financial trajectory following a significant tax rate increase, as
well as our expectation of improved financial performance in the
enterprise funds," said S&P Global Ratings credit analyst Diana
Cooke.
The GO bonds outstanding are secured by the borough's
full-faith-and-credit pledge, including its ability to levy ad
valorem property taxes without limitation as to rate or amount to
support debt service.
CELEBRATION POINTE: Unsecureds to Get Share of Cash Flow Note
-------------------------------------------------------------
Celebration Pointe Holdings, LLC and its affiliates filed with the
U.S. Bankruptcy Court for the Northern District of Florida a
Disclosure Statement describing Chapter 11 Plan dated June 28,
2024.
The Debtors manage, own, or participate in a large mixed-use
development project in Gainesville, Florida, known as Celebration
Pointe (the "Project").
The Project is comprised of over 2,000,000 SF of retail,
restaurant, office, and residential development. CPH is the main
developer of the Project and was the original owner of the real
estate. Some of the real estate parcels were later transferred or
assigned to CPH2. Additionally, the Debtors share common management
and, in some instances, common ownership.
The Plan provides for payment of Allowed Secured Claims in Classes
1 through 28, with the exception of Class 17, in full, over time.
The Allowed Class 17 Claim shall receive a discounted payment on
the Effective Date in full satisfaction of its Allowed Claim. The
Allowed Unsecured Claims of Insiders in Class 30 shall not receive
periodic payments, but the Allowed Claims will accrue interest at
the Prime Rate and maturity in 10 years from the Effective Date.
Allowed General Unsecured Claims in Class 29 shall be paid overtime
from a pro rata distribution of the Cash Flow Note over a period of
60 months.
In addition, the Plan further provides that the respective Holders
of Allowed Administrative Claims and Holders of Allowed Priority
Claims will be paid in full on the Effective Date. Holders of
Allowed Priority Tax Claims will be paid in full by quarterly
payments made over 5 years. The Allowed Interests in Class 31 will
carry forth after the Effective Date.
The Plan is premised on a Plan Support Agreement ("PSA") between
the primary interest holders of Debtors, Mr. Svein Dyrkolbotn and
Ms. Patti Shively. Under the PSA, Dyrkolbotn and Shively are
agreeing to defer payment on Claims, and, most importantly, make
member loans or contributions to cover operating deficits such that
Reorganized Debtors can make all payments required on the Effective
Date and Plan Payments due over time as set forth below (the "PSA
Contributions").
Although Debtors and the SPEs generate cash for operations and debt
service, there is insufficient cash flow to meet the payments
required under the Plan and the PSA Contributions are integral to
the success of the Plan and the Reorganized Debtors. Without the
PSA Contributions, the Debtors would be forced to liquidate. In
return for the PSA Contributions the Plan provides for Conditional
Injunctions protecting the parties to the PSA and each SPE so long
as respective Plan Payments are current.
Class 29 consists of all Allowed General Unsecured Claims against
the Debtors in an approximate amount of $1,500,000.00. In full
satisfaction of the Allowed Class 29 Claims, Holders of such Claims
shall receive a pro rata share of the Cash Flow Note paid
quarterly. In the event of a conversion and liquidation, there
would be likely no distribution to Holders of Allowed Class 29
Claims as the debt encumbering assets exceeds the value of such
assets. Class 29 is Impaired.
Class 31 consists of any and all ownership interests currently
issued or authorized in the Debtors. On the Effective Date, all
existing Interests shall continue into the respective Reorganized
Debtor. Class 31 is Unimpaired.
The Plan contemplates that the Debtors will continue to operate and
manage their properties. Overall, the Debtors will support the
development of the Project and, through revenue and the PSA
Contributions will make any necessary Plan Payments including
amounts need to cover shortfalls of the SPE related obligations.
The Debtors believe the cash flow generated from operations
following the restructuring of debt plus the PSA Contributions,
will be sufficient to make all Plan Payments and will be sufficient
to pay ordinary course expenses, including but not limited to,
payroll and administrative costs.
Funds generated from operations through the Effective Date will be
used for Plan Payments; however, the Debtors ‘cash on hand as of
Confirmation will be available for payment of Administrative
Expenses.
A full-text copy of the Disclosure Statement dated June 28, 2024 is
available at https://urlcurt.com/u?l=DgsLoI from PacerMonitor.com
at no charge.
Counsel to the Debtors:
R. Scott Shuker, Esq.
Shuker & Dorris, P.A.
121 S. Orange Avenue, Suite 1120
Telephone: (407) 337-2060
Facsimile: (407) 337-2050
Email: rshuker@shukerdorris.com
About Celebration Pointe Holdings
Celebration Pointe Holdings, LLC and its affiliates filed voluntary
petitions for relief under Chapter 11 of the Bankruptcy Code
(Bankr. N.D. Fla. Lead Case No. 24-10056) on Mar. 14, 2024. The
case is jointly administered in Case No. 24-10056. In the petitions
signed by Svein H. Dyrkolbotn, manager of SHD-Celebration Pointe,
LLC, Celebration Pointe Holdings and Celebration Pointe Holdings II
disclosed $100 million to $500 million in both assets and
liabilities.
R. Scott Shuker, Esq. at Shuker & Dorris, PA represents the Debtors
as counsel.
CHICKEN SOUP FOR THE SOUL: Hits Chapter 11 Bankruptcy in Delaware
-----------------------------------------------------------------
Jeremy Hill of Bloomberg News reports that Chicken Soup for the
Soul files for Chapter 11 bankruptcy.
Chicken Soup for the Soul Entertainment Inc. — the seller of
self-help books, film and television content — filed for
bankruptcy after failing to outrun a heavy debt load.
The media company filed for Chapter 11 protection in Delaware late
Friday, June 28, 2024, listing assets and liabilities of at least
$500 million each. The filing allows Chicken Soup to keep operating
while it works on a plan to repay creditors.
Chicken Soup struggled to keep up with its financial obligations
after buying DVD rental company Redbox in 2022, court papers show.
About Chicken Soup for the Soul Entertainment
Chicken Soup for the Soul -- https://cssentertainment.com/ -- is
the seller of self-help books, film and television content.
Chicken Soup for the Soul and affiliates sought relief under
Chapter 11 of the U.S. Bankruptcy Code (D. Del. Case No. 24-11442)
on June 29, 2024. In the petition signed by Bart M. Schwartz, as
CEO, the Debtor reports estimated assets and liabilities between
$500 million and $1 billion each.
The Debtor is represented by:
Ricardo Palacio, Esq
Ashby & Geddes, P. A.
132 East Putnam Avenue
Floor 2W
Cos Cob, CT 06807
CINEMARK USA: Moody's Rates New $500MM Unsec. Notes Due 2032 'B2'
-----------------------------------------------------------------
Moody's Ratings assigned a B2 rating to Cinemark USA, Inc.'s
proposed $500 million senior unsecured notes due 2032 (2032 Notes).
Cinemark USA's B1 Corporate Family Rating, Ba1 ratings on the
backed senior secured bank credit facilities, B2 ratings on the
existing senior unsecured notes, stable outlook and Speculative
Grade Liquidity (SGL) rating of SGL-1 remain unchanged.
Proceeds from the 2032 Notes offering will be used to redeem the
$405 million 5.875% senior unsecured notes due 2026 (2026 Notes)
via a tender offer, cover transaction fees and for general
corporate purposes. The proposed 2032 Notes are expected to rank
pari passu, and be issued by the same borrower and guaranteed by
the same guarantors, and contain generally the same terms and
conditions as Cinemark USA's existing senior unsecured notes.
Cinemark USA is a wholly-owned subsidiary of parent, Cinemark
Holdings, Inc. (Cinemark or the company), which is the financial
reporting entity and guarantor of Cinemark USA's bank credit
facilities. Moody's expect to withdraw the B2 rating on the 2026
Notes when the refinancing transaction is completed and the debt
obligation is extinguished. The assigned rating is subject to
review of final documentation and no material change in the size,
terms and conditions of the transaction as advised to us.
RATINGS RATIONALE
The proposed refinancing transaction is credit neutral and extends
the maturity of the 2026 Notes well before their due date. Cinemark
USA's B1 CFR is supported by the parent's (Cinemark's) position as
the third largest movie exhibitor in the US and meaningful presence
in Latin America. The credit profile reflects Cinemark's
progressive improvement in operating and financial performance over
the past two years following pandemic-induced revenue and operating
losses in 2020 and 2021 when theatres were closed or not fully
operational. Over the rating horizon, Moody's expect continued
profit improvement, positive free cash flow (FCF) and very good
liquidity driven by growing moviegoer attendance, higher revenue
per patron, an appealing number of theatrical releases and Moody's
view that the big studios will adhere to the 45-day theatrical
window for major film releases. Exhibitors like Cinemark also
benefit from favorable ticket prices that on average remain
relatively inexpensive compared to the cost of other forms of
out-of-home entertainment.
The CFR considers Cinemark's moderately high financial leverage,
currently at 4.2x total debt to EBITDA (pro forma for the pending
refinancing and Cinemark's repayment of the $150 million 8.75%
senior secured notes due May 2025 on May 1, 2024), and Moody's
expectation that leverage will temporarily rise to the 4.5x-5x
region over the near-term amid a weak movie slate in 2024, and
subsequently revert to the 4x range in 2025 (metrics are Moody's
adjusted). The cinema industry's delayed recovery and structural
challenges are also captured in the company's ratings, which
include: (i) excess screen capacity in North America; (ii)
comparatively lower moviegoer demand as studios release some films
online via streaming platforms (simultaneously or exclusively) or
potentially release them downstream in a shortened theatrical
window; (iii) lower theatrical release volumes relative to
historical levels due to short-term production bottlenecks; (iv)
reduced show times compared to pre-pandemic periods; and (v) the
impact from some cost-conscious consumers reducing their
out-of-home entertainment and number of trips to the cinema amid
affordable subscription-based video-on-demand (VOD) movie viewing.
The stable outlook reflects Moody's view that Cinemark will at
least maintain its revenue share in North America and continue to
experience good moviegoer demand and above-average ticket prices
and concessions revenue (higher margin) per patron. The residual
effect of the 2023 writers' and actors' strikes has negatively
impacted revenue and EBITDA growth in H1 2024 as movie productions
restarted slowly and are now beginning to resume their normal
cadence, which is currently pressuring Cinemark's leverage metrics.
However, with the recommencement of film production volumes to
pre-strike levels combined with numerous anticipated blockbuster
wide releases expected in H2 2024 and a growing number of
alternative in-theatre content, this should lead to organic revenue
growth in the low-single digit percentage range in the second half.
Moody's expect Cinemark will continue to effectively manage
operating expenses to maintain EBITDA margins near current levels
in the 25% to 30% range (Moody's adjusted).
Cinemark USA's SGL-1 rating reflects very good liquidity over the
next 12-18 months supported by solid cash balances (cash at the
parent totaled $789 million at March 31, 2024) and positive FCF
(defined by us as cash flow from operations less capex less
dividends). Assuming Cinemark refrains from paying dividends,
Moody's project FCF will moderate to the $100 - $150 million range
in 2024 compared to approximately $280 million in 2023 (Moody's
adjusted). Following EBITDA pressure in H1 2024 (due to the
seasonally weak Q1 combined with strike-related residual production
delays), Moody's expect higher EBITDA levels in H2 2024 as new
release volumes return to pre-strike levels and moviegoer
attendance ramps during the summer box office season. Interest
expense will continue to be higher than pre-health crisis due to
the leveraged balance sheet, however Moody's expect near-term
borrowing costs will stay relatively flat arising from a mostly
fixed rate debt capital structure and various interest rate swap
agreements. Liquidity is further supported by an undrawn $125
million revolving credit facility (RCF) maturing May 2028. The RCF
is subject to springing maturity dates of December 2025 and April
2028 if the 5.875% senior notes due March 2026 and 5.25% senior
notes due July 2028 have not been fully repaid prior to such dates,
respectively.
ESG CONSIDERATIONS
Cinemark USA's CIS-4 indicates that the rating is lower than it
would have been if ESG risk exposures did not exist. This is
chiefly driven by governance risks as denoted by the G-4 governance
score resulting from Cinemark's moderately high financial leverage
and demographic and societal trends as indicated by the S-4 social
score.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
Ratings could be upgraded if Cinemark experiences positive growth
in box office attendance, stable-to-improving market share,
positive and expanding EBITDA with margins approaching pre-pandemic
levels and enhanced liquidity; and exhibits prudent financial
policies that translate into an improved credit profile. An upgrade
would also be considered if financial leverage as measured by total
debt to EBITDA decreases below 3.5x and positive free cash flow as
a percentage of total debt exceeds 6%. Ratings could be downgraded
if Moody's expect total debt to EBITDA will remain above 5x or free
cash flow to total debt decreases to the 3% area or lower on a
sustained basis (all metrics are Moody's adjusted).
Headquartered in Plano, Texas, Cinemark USA, Inc. is a wholly-owned
subsidiary of Cinemark Holdings, Inc., a leading movie exhibitor
that operates 502 theatres and 5,708 screens worldwide with 308
theatres and 4,303 screens in the US across 42 states and 194
theatres and 1,405 screens across 13 countries in Latin America.
Revenue totaled approximately $3 billion for the twelve months
ended March 31, 2024.
The principal methodology used in this rating was Business and
Consumer Services published in November 2021.
CLASS ACT RESTAURANT: Seeks to Hire David A. Ray PA as Counsel
--------------------------------------------------------------
Class Act Restaurant Group, LLC seeks approval from the U.S.
Bankruptcy Court for the Southern District of Florida to hire David
A. Ray, P.A. as its counsel.
The firm will render these services:
a. advise the Debtor with respect to its responsibilities in
complying with the United States Trustee's Guidelines and Reporting
Requirements and with the rules of the Court;
b. prepare motions, pleadings, orders, applications, adversary
proceedings, and other legal documents necessary in the
administration of this case;
c. protect the interests of the Debtor in all matters pending
before the Court; and
d. represent the Debtor in negotiations with its creditors and
in the preparation and confirmation of a plan.
The firm received a retainer in the amount of $20,000.
David Ray, Esq., the firm's owner and the primary attorney in this
engagement, will be billed at his hourly rate of $450.
In addition, the firm will seek reimbursement for expenses
incurred.
Mr. Ray disclosed in a court filing that his firm is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
The firm can be reached through:
David A. Ray, Esq.
David A. Ray, PA
303 Southwest 6th Street
Fort Lauderdale, FL 33315
Telephone: (954) 399-0105
Email: dray@draypa.com
About Class Act Restaurant Group, LLC
Class Act Restaurant Group, LLC sought protection for relief under
Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No.
24-16626) on July 1, 2024, listing up to $50,000 in assets and $1
million to $10 million in liabilities. The petition was signed by
Panagiota Lazarou-Amanna, authorized representative of the Debtor.
Judge Peter D Russin presides over the case.
David A. Ray, Esq. at DAVID A. RAY, P.A. represents the Debtor as
counsel.
CONN'S INC: Mulls Possible Bankruptcy Filing as Sales Dip
---------------------------------------------------------
Reshmi Basu and Eliza Ronalds-Hannon of Bloomberg News report that
furniture retailer Conn's Inc. is preparing for a potential
bankruptcy filing as it faces sales declines and struggles to
integrate a rival chain, according to people with knowledge of the
plans.
Conn's, which sells discount home goods primarily to lower-income
consumers, may file for Chapter 11 protection within the coming
weeks, said the people, who asked not to be identified discussing
confidential business information. Talks aren't final and plans
could change, they added.
A representative for the company didn't immediately comment.
About Conn's Inc.
Headquartered in The Woodlands, Texas, Conn's is a retailer of
predominantly durable home goods including furniture and
mattresses, home appliances as well as consumer electronics. To
facilitate retail sales, Conn's provides its customers with
proprietary in-house financing on a secured installment loan basis
as well as third-party and lease-to-own payment options. Conn's
operated 161 retail stores located in 15 states and generated
revenue of about $1.6 billion as of the last twelve month period
ended April 30, 2022.
COTTONWOOD COFFEE: Taps Gerry Law Firm as Bankruptcy Counsel
------------------------------------------------------------
Cottonwood Coffee, Inc. seeks approval from the U.S. Bankruptcy
Court for the District of South Dakota to hire Gerry Law Firm,
Prof. LLC. as its bankruptcy counsel.
The professional services to be rendered include filing such
schedules and other documents as the Court may require, initiating
or defending adversary proceedings and contested motions,
negotiating with priority, secured and unsecured creditors,
formulation of a plan, and such other duties as may be necessary to
attempt a successful reorganization under Chapter 11, along with
related legal services during the pendency of this action.
The law firm will bill for services of Attorney Clair R. Gerry at
the rate of $360 per hour, plus sales tax; and for the services of
paralegal Julie M. Anacker at the rate of $140 per hour, plus sales
tax; and actual necessary expenses are to be reimbursed.
The firm received a retainer in the amount of $1,129.40.
Gerry Law Firm is a "disinterested person" within the meaning of 11
U.S.C. 101(14), according to court filings.
The firm can be reached through:
Clair R. Gerry, Esq.
GERRY LAW FIRM, PROF. LLC
507 West 10th Street
P.O. Box 966
Sioux Falls, SD 57101-0966
Tel: (605) 336-6400
Fax: (605) 336-6842
Email: gerry@sgsllc.com
About Cottonwood Coffee, Inc.
Cottonwood Coffee, Inc. filed its voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bankr. D.S.D. Case No.
24-40219) on July 2, 2024, listing $100,001 to $500,000 in assets
and $500,001 to $1 million in liabilities.
Judge Shon Hastings presides over the case.
Clair R. Gerry, Esq. at Gerry Law Firm, Prof. LLC represents the
Debtor as counsel.
CROSSROAD REALTY: Public Auction of Properties Set
--------------------------------------------------
Pursuant to a judgment of foreclosure and sale dated Dec. 5, 2022,
and entered on Dec. 14, 2022, Brian T. Egan, Esq. at Meltzer Lippe
Goldstein & Breitstone LLP, attorney for Crossroad Realty NY LLC et
al., will sell at public auction on July 10, 2024, at 9:00 a.m., at
Smithtown Town Hall 99 West Main Street, Smithtown, New York.
The properties up for sale are all certain plot, piece, or parcel
of land situate, lying and being at Kings Park, Town of Smithtown,
Suffolk County, New York: Beginning at a point on the easterly side
of Old Indian Head Road, distant 78.37 feet south of the
southwesterly terminus of the arch of a curve having a radius of 25
feet and a length of 39.69 feet, which said curve connects the
easterly side of Indian Head Road with the westerly side of Old
Indian Head Road, said point also being a monument on the division
line between Tax Lots 012.000 and 039.000 on the suffolk County Tax
Map; Running thence North 82 degrees 51 minutes 30 seconds East,
144.06 feet actual; Thence South 03 degrees 27 minutes 00 seconds
East 187.75 feet actual; Thence South 82 degrees 51 minutes 30
seconds west, 237.15 feet to a point on the easterly side of Indian
Head Road; Thence along the easterly side of Indian Head Road, the
following two courses and distances: 1. Along the arc of a curve
bearing to the right having a radius of 2,904.79 feet, a length of
157.54 feet actual; 2. North 21 Degrees 01 minutes 45 seconds East
actual (North 21 Degrees 04 minutes 25 seconds East Deed), 57.35
feet to the point or place of beginning.
The approximate amount of judgment is $4,030,870.55 plus interest &
costs.
Mr. Egan does not accept cash. Only bank or certified checks will
be accepted. All certified funds must be made payable to "Brian T.
Egan. Esq., as Referee".
Mr. Egan can be reached at:
Brian T. Egan, Esq.
Meltzer Lippe Goldstein & Breitstone LLP
96 South Ocean Ave.
Patchogue, NY 11772
Tel: (631) 447-8100
Fax: (631) 447-8181
Email: egan@egangolden.com
CUSHMAN & WAKEFIELD: S&P Affirms 'BB-' ICR, Outlook Negative
------------------------------------------------------------
S&P Global Ratings affirmed is its issuer credit rating on Cushman
& Wakefield at 'BB-' and issue-level ratings at 'BB-' with a
recovery of 3 (50%).
At the same time, S&P is correcting an analytical error where it
previously published an incorrect recovery waterfall tied to
Cushman & Wakefield's issue-level credit rating.
The amended recovery waterfall is contained in this research
update; the recovery level and rating remain unchanged at 3 (50%).
S&P said, "Our outlook remains negative, indicating that we could
lower the ratings if Cushman doesn't sustainably improve its debt
to EBITDA to below 5x, potentially as a result of continued
headwinds in commercial real estate transaction activity.
"Our recovery analysis on Cushman & Wakefield has not changed. Our
recovery ratings remain '3' (50%), reflecting an average recovery
in the event of default; we affirmed the 'BB-' issue rating as a
result."
DEL MONTE: Moody's Cuts CFR to Caa2 & 1st Lien Loan to Caa3
-----------------------------------------------------------
Moody's Ratings downgraded the ratings of Del Monte Foods, Inc.
including the company's Corporate Family Rating to Caa2 from Caa1,
Probability of Default Rating to Caa2-PD from Caa1-PD, and existing
senior secured first lien term loan B rating to Caa3 from Caa2. The
asset backed revolving credit facility ("ABL") is not rated. The
rating outlook is negative.
The rating downgrades reflect the company's weak liquidity, weaker
than expected operating performance in the fourth quarter ended
April 2024, and anticipated sustained operating pressure in fiscal
2025. Although the company has yet to disclose its fourth-quarter
results, preliminary insights into Del Monte Foods, Inc.'s
operational performance can be derived from the reports of its
parent company, Del Monte Pacific Ltd ("DMPL").
Fourth quarter profitability fell short of Moody's expectations
primarily due to the adverse effects of high inventory levels that
resulted from lower-than-expected demand. These elevated
inventories have increased waste, distribution, and warehousing
costs. Additionally, the need to reduce inventory has led to an
increase in trade spending and a sales mix shift towards
lower-margin channels. Also, a decrease in category consumption,
coupled with a strategic reduction in low-margin co-pack volume,
has reduced fixed cost absorption. Moody's anticipate these factors
to continue impacting profitability into the first half of fiscal
2025. However, Moody's expect profitability to improve in the
second half as the company reduces inventory levels. This will be
facilitated by a planned 30-40% reduction in the pack in fiscal
2025. This strategy may cause volume absorption issues until cost
reductions are implemented across the network. In response to these
headwinds, the company has implemented cost savings initiatives,
including the closure of two manufacturing plants and a reduction
in the salaried workforce. Despite these measures, gross margin in
fiscal 2025 is expected to be only slightly better than the
previous year. More substantial gross margin improvement is
expected in fiscal 2026, but it will still likely fall short of the
levels achieved during recent pandemic years.
Moody's anticipate weak liquidity in the first half of fiscal 2025
given very limited ABL availability because of weak profitability
and high inventory levels. As the company is now in its pack season
(July-October), additional liquidity support will be needed. On the
3Q24 earnings call, the company said it is actively exploring
liquidity sources for first half cash flow needs. Moody's ratings
assume that the company will be able to secure financing for the
pack season, though the execution and terms of such a financing
transaction remain uncertain. Failure to secure financing could
leave the company with insufficient liquidity to meet its working
capital needs. After the pack season, Moody's project positive
seasonal free cash flow in 2H25 due to the winding down of excess
inventory, resulting in roughly $50 million of positive free cash
flow in fiscal 2025. In fiscal 2026, despite expected earnings
improvement, Moody's anticipate slightly negative free cash flow
given less working capital cash flow benefit, with debt/EBITDA
leverage still elevated at roughly 9x (on a Moody's adjusted
basis).
Del Monte's weak liquidity also reflects a minimal cash balance of
$2 million as of January 28, 2024, and high utilization on its $750
million ABL facility expiring in September 2027. As of January
2024, Moody's estimate that the company had approximately $655
million drawn on the revolver and $24 million of letters of credit
outstanding. ABL availability is capped at the lesser of the
borrowing base or commitment size. Seasonal borrowings typically
peak during the first half of the fiscal year as the company builds
inventory during its seasonal production cycle ahead of the US
holiday season. In August 2023, Del Monte upsized its ABL from $625
million to $750 million through February 2025, at which point the
commitment will step back down to $625 million. The ABL facility
contains a financial maintenance covenant, which is a springing
1.0x minimum fixed charge covenant if availability falls below the
greater of 12.5% of the borrowing base or $93 million (stepping
down to $78 million in February 2025). Moody's expect the covenant
to be triggered over the next 12 months and that there is a high
risk of breach. A highly adjusted credit agreement EBITDA
calculation may provide some cushion within the covenant.
Governance is a key consideration in the rating action. This is
reflected in Moody's change of Del Monte's financial policy and
risk management score to 5 from 4, the governance issuer profile
score to G-5 from G-4, and the credit impact score to CIS-5 from
CIS-4. The revisions are indicative of the company's aggressive
financial policies and a history of operating with high leverage.
The high leverage and weak liquidity increase the risk of
distressed exchange or other debt restructuring. The CIS-5
indicates that the rating is lower than it would have been if ESG
risk exposures did not exist and that the negative impact is more
pronounced than for issuers scored CIS-4. Environmental (E-3) and
social risks (S-3) are present and are scored similarly to other
companies across the packaged food sector but overall are lesser
factors than the governance risks driving the CIS-5.
RATINGS RATIONALE
Del Monte's Caa2 CFR reflects the company's weak liquidity and high
leverage. Debt/EBITDA leverage is projected to be above 10x for the
fiscal years ended April 2024 and April 2025. The company's weak
financial position is largely a result of elevated inventories in
light of weaker than anticipated consumer demand. Del Monte's
liquidity is weak given these headwinds, and as the company is now
in its pack season (July-October), additional liquidity support
will be needed. The company disclosed on its third quarter earnings
call that it is actively exploring liquidity sources for first half
cash flow needs, and Moody's ratings assume that the company will
be able to secure financing for the pack season, though the
execution and terms of such a financing transaction remain
uncertain. Failure to secure financing could leave the company with
insufficient liquidity to meet its working capital needs. Moody's
project financial leverage to decline to roughly 9x by the end of
fiscal 2026 primarily because of Del Monte's plan to reduce its
inventory and pay down the ABL balance. Deleveraging will also be
supported by cost reduction initiatives, projected margin
improvement in the second half of fiscal 2025, and further margin
expansion in fiscal 2026 as inventory balances normalize. However,
there is risk that volume pressure persists if consumers continue
to change purchasing habits to mitigate the effect of high grocery
prices. Increased promotions may be necessary to reduce the very
high inventory and this could pressure profits and margins
further.
The ratings also reflect high seasonal cash needs and weak
long-term category fundamentals in US canned fruit and vegetables
with consumers gravitating to fresh produce and other alternatives.
Del Monte is attempting to offset this negative trend by focusing
on innovation outside of the can, such as fruit cups, aseptic broth
and ready to drink beverages. Better innovation requires continual
investment but also strengthens the Del Monte brand if the company
executes well. The company's ratings are supported by the strength
of the Del Monte™ brand, which holds leading shares in core shelf
stable fruits and vegetables, and good execution on recent
strategic initiatives that have reduced the cost structure and
expanded distribution into new channels. The ratings are also
supported by a history of significant liquidity support provided by
the parent company, Del Monte Pacific Ltd ("DMPL"). Moody's expect
such support will continue in periods of earnings weakness, when
feasible.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The negative outlook reflects the risk related to maintaining
sufficient liquidity given a nearly fully drawn ABL, and highly
seasonal cash needs. The negative outlook also reflects the
execution risk related to Del Monte's ability to stabilize volumes,
reduce costs, and improve profitability over the next 12-18 months
given a challenging demand landscape.
A rating upgrade could occur if Del Monte is to able to improve
operating performance including generating positive organic revenue
growth and a significantly higher EBITDA margin with good execution
of inventory reduction and cost savings initiatives. Del Monte
would also need to improve liquidity including higher ABL
availability and positive free cash flow, and meaningfully reduce
leverage.
A rating downgrade could occur if Del Monte is unable to maintain
sufficient liquidity, free cash flow remains weak, or if the
company faces setbacks related to cost savings initiatives or top
line stabilization. Ratings could also be downgraded if the capital
structure becomes unsustainable or limits the company's
reinvestment capacity.
PRINCIPAL METHODOLOGY
The principal methodology used in these ratings was Consumer
Packaged Goods published in June 2022.
COMPANY PROFILE
Del Monte Foods, Inc., headquartered in Walnut Creek, California,
is a manufacturer and marketer of branded and private label food
products, primarily in the United States. Brands include Del
Monte(TM) in shelf stable fruits, vegetables and tomatoes;
Contadina(TM) in tomato-based products; College Inn(TM) and Kitchen
Basics(TM) in broth and stock products; and S&W(TM) in shelf stable
fruit, vegetable and tomato products. The company generated sales
of $1.7 billion during the LTM period ended January 28, 2024. Del
Monte Foods, Inc. is a wholly owned subsidiary of Del Monte Foods
Holdings Limited, which is in turn approximately 94% owned by Del
Monte Pacific Ltd ("DMPL"). DMPL is publicly traded on the
Philippine and Singapore stock exchanges. DMPL is 71%-owned by
NutriAsia Pacific Ltd and Bluebell Group Holdings Limited, which
are beneficially-owned by the Campos family of the Philippines.
Public investors and Lee Pineapple Group (a pineapple supplier in
Malaysia) hold the remaining 29% stake.
DELTA APPAREL: Hits Chapter 11, Agrees to Sell Its Salt Life Brand
------------------------------------------------------------------
Christopher Ruvo of asiacentral.com reports that Delta Apparel
files for bankruptcy, agrees to sell Salt Life brand.
Top 40 supplier Delta Apparel (asi/49172) has filed for Chapter 11
bankruptcy and has agreed to sell its Salt Life brand for a
reported $28 million to Delaware-incorporated firm FCM Saltwater
Holdings, according to a new filing with the Securities and
Exchange Commission (SEC).
A run of disastrous financial results, executive departures and the
recent appointment of a restructuring specialist had the writing on
the wall that the publicly traded Duluth, GA-based apparel
manufacturer was heading toward bankruptcy.
Chapter 11 is a form of bankruptcy that involves a court-supervised
"reorganization" of a debtor's assets and liabilities. It allows a
company to operate as it goes through bankruptcy, which is what
Delta Apparel plans to do, at least for a time, according to the
SEC filing.
"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 SEC document
said.
Delta Apparel noted that it's going to ask the bankruptcy court to
approve borrowing arrangements with entities that include Wells
Fargo Bank -- arrangements that will allow the company to obtain
the cash flow needed to operate during the Chapter 11 process. The
supplier has been out of compliance with a covenant within its
revolving credit facility, and has been unable to get the money
required to buy essential materials, like yarn, to fund
production.
Prior to the bankruptcy filing, Delta Apparel said it agreed to
sell certain assets related to the marketing, sourcing, licensing
and selling of its sand-and-surf lifestyle brand Salt Life to FCM
Saltwater Holdings. The total purchase price, to be paid in cash,
is subject to adjustment, but is currently agreed to as $28.03
million. Still, the deal needs court approval.
The Salt Life transaction will be conducted through a bankruptcy
court-supervised process pursuant to court-approved bidding
procedures and is subject to the receipt of higher or better offers
from competing bidders at an auction, as well as approval of the
sale by the bankruptcy court.
"Subject to bankruptcy court approval, in the event that the buyer
is not the successful bidder at the auction, the 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 SEC filing noted.
Before the bankruptcy, Delta Apparel had been sustaining losses as
its sales plummeted. Former CEO Robert W. Humphreys was forced to
resign in May and other executives and board members departed in
weeks that followed. The latest SEC filing indicated that Chief
Accounting Officer Nancy P. Bubanich resigned June 27, followed by
board directors Glenda E. Hood and Sonya E. Medina on June 28 and
June 30 respectively.
In June, Delta Apparel shuttered its DTG2Go division. The business
unit had focused on print-on-demand solutions in the
direct-to-garment printing medium. The closure occurred shortly
after the suspension of operations at a Delta Apparel manufacturing
facility in Honduras.
Trading on Delta Apparel's stock has been suspended. The company
anticipates that its shares will be delisted from the NYSE American
due to the Chapter 11 filing. "The company expects that holders of
shares of the company's common stock will experience a complete or
significant loss on their investment, depending on the outcome of
the Chapter 11 cases," the SEC filing read.
In May 2024, the firm reported that its fiscal half-year total
company revenue was about $158.9 million – a 27% year-over-year
decrease. For the six-month period, Delta Apparel suffered a loss
of about $44.8 million, or -$6.38 per share.
In the 2023 fiscal year, which ended Sept. 30, 2023 Delta Apparel
had a $33.2 million annual loss and sales fell 14%. Based on
estimated 2022 North American promotional products revenue of $49.6
million, Delta Apparel ranked 37th on Counselor's most recent list
of the largest suppliers in the industry. The new list is due out
this summer.
About Delta Apparel
Headquartered in Duluth, Georgia, Delta Apparel, Inc. --
https://www.deltaapparelinc.com -- 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 sought relief under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. D. Del. Case No. 24-11469) on June 30, 2024. In the
petition signed by J. Tim Pruban, as chief restructuring officer,
the Debtor reports estimated assets and liabilities between $100
million and $500 million each.
The Debtor is represented by:
Christopher A. Ward, Esq.
Polsinelli PC
2750 Premier Parkway
Suite 100
Duluth, GA 3009
DIOCESE OF SACRAMENTO: Can End Priest Retirement Plan
-----------------------------------------------------
Emlym Cameron of Law360 Authority reports that California Diocese
can end priest retirement plan, Judge says.
A California bankruptcy judge on Wednesday, June 26, 2024, gave the
Roman Catholic Bishop of Sacramento the all-clear to terminate a
supplemental retirement plan for the church's priests, allowing the
debtor to strike a deal with the plan's trustee to turn over
$30,000 in assets.
About Diocese of Sacramento
The Diocese of Sacramento is a Latin Church ecclesiastical
territory or diocese of the Catholic Church in the northern
California region of the United States.
Facing hundreds of lawsuits after California paused for three years
its statute of limitation on claims for child sexual abuse, the
Roman Catholic Bishop of Sacramento filed a Chapter 11 bankruptcy
petition (Bankr. C.D. Cal. Case No. 24-bk-21326) on April 1, 2024.
In its petition, the Diocese listing estimated liabilities between
$100 million and $500 million in its petition. It listed assets
also between $100 million and $500 million.
The Honorable Christopher M Klein is the case judge.
Felderstein Fitzgerald Willoughby Pascuzzi & Rios LLP and Sheppard,
Mullin, Richter & Hampton LLP are the Debtor's attorneys. The
Debtor tapped Weinstein & Numbers, LLP, as special insurance
counsel; B. Riley as financial advisor; and Greene & Roberts, LLP,
as special litigation counsel and general corporate counsel.
DODGE CONSTRUCTION: In Talks With Lenders on Fresh Cash,Debt Revamp
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Reshmi Basu of Bloomberg News reports that Dodge Construction
Network in talks for debt revamp, fresh money.
Dodge Construction Network and lenders are talking about reducing
some of the data-platform provider's $600 million in debt
obligations and providing it with fresh cash, according to people
with knowledge of the situation.
The firm's private equity owners, Clearlake Capital and Symphony
Technology, sought around $100 million from creditors, said some of
the people, who asked not to be identified discussing a private
matter.
About Dodge Construction Network
Headquartered in Bedford, MA, Dodge Construction Network is a
provider of commercial construction project data, market
forecasting and analytics services, advertising and marketing
solutions, and workflow integration solutions for the North
American pre-construction industry. The company is owned by
Symphony Technology Group and Clearlake Capital Group, L.P.
DT&T LOGISTICS: Robert Handler Named Subchapter V Trustee
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The U.S. Trustee for Region 11 appointed Robert Handler of
Commercial Recovery Associates, LLC as Subchapter V trustee for
DT&T Logistics, Inc.
Mr. Handler will be paid an hourly fee of $450 for his services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. Handler declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Robert P. Handler
Commercial Recovery Associates, LLC
205 West Wacker Drive, Suite 918
Chicago, IL 60606
Tel: (312) 845-5001 x221
Email: rhandler@com-rec.com
About DT&T Logistics Inc.
DT&T Logistics Inc. oeprates in the trucking industry.
DT&T Logistics Inc. sought relief under Subchapter V of Chapter 11
of the U.S. Bankruptcy Code (Bankr. N.D. Ill. Case No. 24-08667) on
June 12, 2024. In the petition signed by Anatoli Neteda, as
president, the Debtor reports estimated assets between $500,000 and
$1 million and estimated liabilities between $1 million and $10
million.
Honorable Bankruptcy Judge Deborah L. Thorne handles the case.
The Debtor is represented by Saulius Modestas, Esq., at Modestas
Law Offices, P.C.
EIGER BIOPHARMACEUTICALS: Gets Approval for Chapter 11 Drug Sale
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Alex Wittenberg of Law360 Bankruptcy Authority reports that a Texas
bankruptcy judge on Wednesday, June 26, 2024, approved Eiger
BioPharmaceuticals' $35.1 million sale of its Avexitide product,
after the drug company more than tripled an initial bid for the
metabolic-disease treatment during a recent auction.
About Eiger BioPharmaceuticals
Palo Alto, California-based Eiger BioPharmaceuticals, Inc., is a
commercial-stage biopharmaceutical company focused on the
development of innovative therapies for rare metabolic diseases.
The company's shares traded on Nasdaq under the symbol "EIGR".
Eiger Biopharmaceuticals Inc. and its subsidiaries sought relief
under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Texas
Lead Case No. 24-80040) on April 1, 2024. In its petition, Eiger
listed $38.8 million in assets and $53.1 million in liabilities as
of the bankruptcy filing.
Judge Stacey G. Jernigan oversees the cases.
The Debtors are represented by Sidley Austin LLP as legal counsel,
Alvarez & Marsal as financial advisor and SSG Capital Advisors, LLC
as restructuring investment banker. Kurtzman Carson Consultants LLC
is the claims agent.
EMERGENT BIOSOLUTIONS: Receives $250 Mil. More of HHS Pact Changes
------------------------------------------------------------------
Wout Vergauwen of Bloomberg News reports that Emergent Biosolutions
gets more than $250 million in HHS pact modifications.
Emergent BioSolutions rises 13% after the company won more than
$250m worth of contract modifications to supply the US government
with vaccines to combat biological warfare threats.
The vaccines are aimed at anthrax, smallpox and botulism.
The awards:
* Gets contract modification valued at $30m to supply
Cyfendus anthrax vaccine
* Contract modification valued at $99.9m to supply
ACAM2000 smallpox vaccine
* Two new contract options totaling $122.9m to supply the
strategic national stockpile with VIGIV (used for
treatment of smallpox vaccination complications) and BAT
(for symptomatic botulism)
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.
ENDURO PROPERTIES: James Bailey Named Subchapter V Trustee
----------------------------------------------------------
The Acting U.S. Trustee for Region 8 appointed James Bailey, III of
Butler Snow, LLP as Subchapter V trustee for Enduro Properties
Investment Company, Inc.
Mr. Bailey will be paid an hourly fee of $545 for his services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. Bailey declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
James E. Bailey III
Butler Snow, LLP
6075 Poplar Avenue, Suite 500
Memphis, TN 38119
Phone: (901) 680-7347
Email: Jeb.Bailey@butlersnow.com
About Enduro Properties Investment
Enduro Properties Investment Company, Inc. sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. W.D. Tenn. Case No.
24-23074) on June 27, 2024, with up to $50,000 in assets and up to
$500,000 in liabilities.
Judge M. Ruthie Hagan presides over the case.
Bo Luxman, Esq., represents the Debtor as legal counsel.
ENVIVA INC:Judge Rejects Bid to Retain Vinson as Bankruptcy Counsel
-------------------------------------------------------------------
James Nani of Bloomberg Law reports that Vinson & Elkins rejected
again as Enviva bankruptcy counsel.
Vinson & Elkins LLP's second attempt to remain as bankruptcy
counsel for wood-pellet maker Enviva Inc. was rejected after a
judge found that new protocols it instituted weren't enough to
overcome potential conflicts.
The law firm's request for reconsideration was rejected in an
opinion Tuesday, July 2, 2024, by Judge Brian F. Kenney of the US
Bankruptcy Court for the Eastern District of Virginia. The firm was
booted in May as bankruptcy counsel for Enviva because it's also
represented the company's largest equity holder, Riverstone
Investment Group LLC, in matters outside of the bankruptcy.
About Enviva Inc.
Headquartered in Bethesda, Md., Enviva Inc. --
https://www.envivabiomass.com -- is a producer of industrial wood
pellets, a renewable and sustainable energy source produced by
aggregating a natural resource, wood fiber, and processing it into
a transportable form, wood pellets. Enviva exports its wood pellets
to global markets through its deep-water marine terminals at the
Port of Chesapeake, Virginia, the Port of Wilmington, North
Carolina, and the Port of Pascagoula, Mississippi, and from
third-party deep-water marine terminals in Savannah, Georgia,
Mobile, Alabama, and Panama City, Florida.
Enviva Inc. and certain affiliates sought protection under Chapter
11 of the U.S. Bankruptcy Code (Bankr. E.D. Va. Lead Case No.
24-10453) on March 13, 2024. In the petition signed by Glenn T.
Nunziata, interim chief executive officer and chief financial
officer, Enviva Inc. disclosed $2,893,581,000 in assets and
$2,631,263,000 in liabilities.
Judge Brian F. Kenney oversees the cases.
The Debtors tapped Vinson & Elkins, LLP as general bankruptcy
counsel; Kutak Rock, LLP as local counsel; Lazard Freres & Co., LLC
as investment banker; Alvarez & Marsal Holdings, LLC as financial
advisor; and Kurtzman Carson Consultants, LLC as notice and claims
agent.
The U.S. Trustee for Region 4 appointed an official committee to
represent unsecured creditors in the Debtors' Chapter 11 cases. The
committee tapped Akin Gump Strauss Hauer & Feld, LLP as lead
bankruptcy counsel; Hirschler Fleischer, PC as local counsel;
Ducera Partners, LLC as investment banker; and AlixPartners, LLP as
financial advisor.
EPIQ GLOBAL: Moody's Cuts $1.2BB First Lien Term Loan Rating to B3
------------------------------------------------------------------
Moody's Ratings affirmed DTI Holdco, Inc.'s ("Epiq Global" or
"Epiq") B3 corporate family rating and B3-PD probability of default
rating. Concurrently, Moody's assigned a B3 rating to Epiq's
proposed upsized $200 million senior secured first lien revolving
credit facility. Additionally, Moody's downgraded the company's
existing and upsized to $1,260 million senior secured first lien
term loan B to B3 from B2. The outlook remains stable.
As part of the proposed refinancing transaction, Epiq upsized its
first lien term loan by $300 million. Net proceeds from the
incremental term loan will be used to fully repay Epiq's existing
$250 million privately placed senior secured second lien term loan
(not rated by us) and repay any drawn revolver balance. The
remaining proceeds will be used to pay associated transaction fees
and expenses and increase cash on the balance sheet. Moody's expect
the upsized and extended revolving credit facility to be undrawn at
closing. Management expects the financing to close by the end of
July.
The downgrade of the senior secured first lien credit facility to
B3 from B2 is the result of the repayment of the second lien term
loan, as there is now no loss support provided under the first lien
facility in the event of default, for these creditors.
RATINGS RATIONALE
Epiq's credit profile is constrained by the company's elevated
financial leverage and limited cash flow generation, although
improving. Current debt-to-EBITDA leverage (including Moody's
adjustments and expensing all capitalized software development
costs) is over 6.0x times as of LTM March 31, 2024 and Moody's
expect it to decline towards about 6.0x over the next 12 to 18
months. The credit profile also reflects the risks to creditors
from the company's elevated debt service cost given the high
interest rate environment, some event-driven nature of its
business, modest EBITDA margins, as well as the risk for debt
funded acquisitions and shareholder distributions.
The credit profile benefits from the company's position as a
leading global alternative legal service provider (ALSP) for
corporations and law firms in North America, Europe, Asia, and
Australia, high customer retention rates with blue-chip corporate
and large law firm clients, and business line diversification.
Moody's expect revenue growth in a mid-single-digits range over the
next 12 to 18 months, driven by positive industry trends such as
increased legal spend and outsourcing to ALSP's by law firms, as
well as through existing and new customer bookings.
Epiq's adequate liquidity profile is supported by the company's new
$200 million revolving credit facility, which Moody's expect to be
undrawn at close, and pro forma cash balance of approximately $96
million as of March 31, 2024. Moody's also expect the company to
draw on its revolver throughout the year for working capital needs,
paying it down towards the end of the year from internally
generated cash, which can pressure its liquidity profile. Free cash
flow (including Moody's adjustment and calculated as CFO - capital
expenditures - capitalized software expenses) during 2023 was
slightly negative; however, Moody's expect Epiq will generate
annual free cash flow of around 2% to 3% of total debt during the
next 12 to 15 months. These cash sources provide adequate coverage
for required annual term loan amortization of approximately $12
million, paid quarterly. There are no financial maintenance
covenants applicable to the term loans, but the revolver is subject
to a springing maximum first lien net leverage ratio of 7.4x,
tested quarterly if the amount of revolver usage exceeds more than
35% ($70 million) of the revolving credit facility. Moody's expect
the company to maintain covenant compliance over the next 12-15
months if the covenant utilization threshold is triggered.
The stable outlook reflects Moody's expectation that Epiq's credit
metrics will continue to improve over the next 12-18 months, such
that debt-to-EBITDA leverage will trend towards 6.0x. Moody's also
expect the company will maintain adequate liquidity and generate
positive free cash flow in 2024.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if the company reduces debt-to-EBITDA
leverage to under 6.0x. An improvement in the company's liquidity
position and sustained FCF-to-debt of over 5% would also support a
ratings upgrade.
The ratings could be downgraded if Moody's expect Epiq's
debt-to-EBITDA leverage to remain above 7.5x or its liquidity
profile weakens. A negative rating action can also be taken if
Moody's expect FCF-to-debt to remain negative over an extended
period or profitability margins decline.
Debt capital consists of an upsized $200 million senior secured
first lien revolving credit facility expiring January of 2029 and
an upsized $1260 million senior secured first lien term loan due
April 2029 ($1,243 million outstanding expect at transaction
close).
The B3 ratings on Epiq's senior secured first lien revolver and
term loan are in line with the company's B3 CFR as there is no
other material debt in the capital structure. The credit facility
is secured jointly and severally by perfected first-priority
security interests in substantially all the personal property of
the borrower and each guarantor, first priority mortgages on
material fee-owned real property of the borrower and each
guarantor, and all proceeds and products of the property and
assets. The credit facility is unconditionally guaranteed on a
secured, first-priority basis by its direct parent (DTI
Intermediate Sub, Inc.) and all of the borrower's present and
future, direct and indirect domestic restricted subsidiaries.
DTI Topco, Inc., which is the direct parent of DTI Intermediate
Sub, Inc., is the audited entity, but it does not guarantee the
debt instruments. According to the company, DTI Topco, Inc. does
not own any material assets other than the stock of DTI
Intermediate Sub, Inc. and has no material liabilities, whereas DTI
Intermediate Sub, Inc. has no material assets other than its
ownership of Epiq and has no material liabilities other than its
secured downstream guarantee of Epiq's credit facility. Moody's
expect to receive sufficient information to monitor the activities
of the borrowing group and maintain ratings going forward.
Headquartered in New York City and majority owned by an investor
group controlled by OMERS Private Equity, Inc., Harvest Partners,
L.P., and management, Epiq is a leading global alternative legal
service provider that offers litigation and administrative support
services for corporations and law firms in North America, Europe,
Asia and Australia. The company is organized across three segments
across the entirety of the ALSP market, including Legal Solutions,
Epiq Class Action and Restructuring (ECAR), and global business
transformation services (GBTS). In the Legal Solutions segment,
Epiq provides legal advisory, electronic discovery services
(eDiscovery), data management, flexible legal talent, and document
review solutions. The ECAR segment consists of claims
administration services to law firms, trustees, and debtors to
support legal settlements & restructuring. Epiq's GBTS segment
consists of managed services to law firms and other businesses.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
ESE INDUSTRIES: Hires Richard R. Robles PA as Bankruptcy Counsel
----------------------------------------------------------------
ESE Industries, Inc. seeks approval from the U.S. Bankruptcy Court
for the Southern District of Florida to hire the Law Offices of
Richard R. Robles, P.A. as its bankruptcy counsel.
The firm will render these services:
(a) give advice to the Debtor with respect to its powers and
duties as a debtor in possession;
(b) advise the Debtor with respect to its responsibilities in
complying with the U.S. Trustee’s Operating Guidelines and
Reporting Requirements and with the rules of the Court;
(c) prepare motions, pleadings, orders, applications,
adversary proceedings and other legal documents necessary in the
administration of the case;
(d) protect the interest of the Debtor in all matters pending
before the Court; and
(e) represent the Debtor in negotiation with its creditors in
the preparation of a plan.
The firm received a pre-petition initial retainer of $30,000 as
well as $1,738 for the filing fee in this matter.
Richard Robles, Esq., a partner at the Law Offices of Richard R.
Robles, 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:
Richard R. Robles, Esq.
Law Offices of Richard R. Robles, P.A.
905 Brickell Bay Drive, Suite 228
Miami, FL 33131
Telephone: (305) 755-9200
Email: rrobles@roblespa.com
assistant@roblespa.com
About ESE Industries
ESE Industries, Inc. sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Fla. Case No. 24-16126) on June 20,
2024, with $1 million to $10 million in both assets and
liabilities. Carlos S. Hermida, president, signed the petition.
Judge Robert A. Mark presides over the case.
Richard R. Robles, Esq., at the Law Offices of Richard R. Robles,
P.A. represents the Debtor as bankruptcy counsel.
FINTHRIVE: Creditors Hold Debt Swap Talks
-----------------------------------------
Reshmi Basu and Eliza Ronalds-Hannon of Bloomberg News report that
Clearlake Capital Group-backed FinThrive is holding discussions
with some creditors that would trim more than $1.8 billion of its
debt and provide the health-care software company with fresh money,
according to people with knowledge of the matter.
A potential deal calls for a below-par debt exchange and would also
revise the order of debt repayments, said the people, who asked not
to be identified discussing a private matter.
Discussions are ongoing and terms have not been finalized, they
said.
The company is working with Kirkland & Ellis for debt advice, while
some lenders engaged Gibson Dunn & Crutcher.
About FinThrive
FinThrive is a provider of revenue cycle management software
solutions to the healthcare sector.
FLEXPOINT SENSOR: Incurs $172K Net Loss in First Quarter
--------------------------------------------------------
Flexpoint Sensor Systems, Inc. filed with the Securities and
Exchange Commission its Quarterly Report on Form 10-Q reporting a
net loss of $172,492 on $13,205 of manufacturing, design and
contract revenue for the three months ended March 31, 2024,
compared to a net loss of $208,844 on $12,258 of manufacturing,
design, and contract revenue for the three months ended March 31,
2023.
As of March 31, 2024, the Company had $5.19 million in total
assets, $5.11 million in total liabilities, and $81,990 in total
stockholders' equity.
Flexpoint stated, "The Company continues to accumulate significant
operating losses and has an accumulated deficit of $31,844,636 at
March 31, 2024. These factors raise substantial doubt about the
Company's ability to continue as a going concern for a period of
one year from the issuance of these financial statements. The
financial statements do not include any adjustments that might
result from the outcome of these uncertainties.
"Management is seeking additional funding to provide operating
capital for its operations until such time as revenues are
sufficient to sustain our level of operations. However, there is
no assurance that additional funding will be available on
acceptable terms, if at all."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/925660/000154812324000083/flxt-20240331.htm.htm
About Flexpoint
Headquartered in West Jordan, Utah, Flexpoint Sensor Systems, Inc.
-- www.flexpoint.com -- is principally engaged in designing,
engineering and manufacturing bend sensor technology and products
using its patented Bend Sensor technology, (a flexible
potentiometer technology). The Company continues to make further
improvements to its technologies, manufacturing and developing
fully integrated devices and related products that the Company has
been marketing and selling to a variety of companies in diverse
industries.
Spokane, Washington-based Fruci & Associates II, PLLC, the
Company's auditor since 2023, issued a "going concern"
qualification in its report dated April 8, 2024, citing that the
Company has net losses and an accumulated deficit. These factors,
among others, raise substantial doubt about the Company's ability
to continue as a going concern.
FOREVER GETTING: Edward Burr Named Subchapter V Trustee
-------------------------------------------------------
The U.S. Trustee for Region 17 appointed Edward Burr of Mac
Restructuring Advisors, LLC as Subchapter V trustee for Forever
Getting Cash, LLC.
Mr. Burr will be paid an hourly fee of $450 for his services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. Burr declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Edward Burr
Mac Restructuring Advisors, LLC
10191 E. Shangri La Road
Scottsdale, AZ 85260
Phone: (602) 418-2906
Email: Ted@macrestructuring.com
About Forever Getting Cash
Forever Getting Cash, LLC sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. D. Nev. Case No. 24-13202) on June 26,
2024, with $100,001 to $500,000 in both assets and liabilities.
Judge Natalie M. Cox presides over the case.
Matthew I. Knepper, Esq., at Nevada Bankruptcy Attorneys represents
the Debtor as legal counsel.
FRANCISCO'S BUILDING: Taps Totaro & Shanahan as Insolvency Counsel
------------------------------------------------------------------
Francisco's Building LLC seeks approval from the U.S. Bankruptcy
Court for the District of Colorado to hire Totaro & Shanahan, LLP
as its general insolvency counsel.
The firm will render these services:
a. complete the documents required by the UST, preparation of
status reports, review and consultation concerning Monthly
Operating Reports, and personal attendance at all hearings,
included but not limited to the Status Conference, Initial Debtor
Interview, the meeting of creditors pursuant to Bankruptcy Code
section 341(a) or any continuance thereof, all status conferences;
preparation of any first day motions and employment applications
and all hearings on motions, the disclosure statement and plan;
b. consult with the Debtor's representative concerning
documents needed and reports to be prepared and consultation with
other professionals to be employed by Debtor;
c. assist the Debtor in preparation of documents for
compliance with the requirements of the Office of the United States
Trustee;
d. negotiate with creditors regarding the amount and payment
of their claims;
e. discuss with Debtor's representative concerning the
Disclosure Statement and Plan of Reorganization;
f. prepare the Disclosure Statement and Chapter 11 Plan of
Reorganization and any amendments/changes to the same;
g. submit ballots to creditors, tally of ballots and submit to
the
h. response to any objections to disclosure statement and/or
Plan; and
i. response to any motions for relief from stay, motions to
dismiss or any other motions or contested matters.
In cases where no litigation counsel is employed, the firm will
undertake the following matters:
a. prepare, submit and prosecute any adversary proceedings
that may be necessary to the case including but not limited to
determining the value of real property as collateral and
extinguishing unsecured liens on real property;
b. review of proofs of claims and if necessary, preparation of
formal objections with respect to claims asserted; and
c. oppose to any motion sought by trustee, court and/or
creditors; and
d. provide any other adversary matter that arises during this
case.
The firm will render services an hourly rate of $600 per hour for
attorneys and $150 an hour for paralegals.
As disclosed in the court filings, Totaro & Shanahan does not
represent any interests adverse to the estate and is a
disinterested person as defined in 11 U.S.C. Sec. 101(14).
The firm can be reached through:
Michael R. Totaro, Esq.
Totaro & Shanahan, LLP
P.O. Box 789
Pacific Palisades, CA 90272
Telephone: (310) 804 2157
Facsimile: (310) 496-1260
Email: Ocbkatty@aol.com
About Francisco's Building LLC
Francisco's Building LLC sought protection for relief under Chapter
11 of the Bankrutpcy Code (Bankr. D. Colo. Case No. 24-13187) on
June 10, 2024, listing $1,000,001 to $10 million in both assets and
liabilities.
Judge Thomas B Mcnamara presides over the case.
Michael R. Totaro, Esq. at Totaro & Shanahan, LLP represents the
Debtor as counsel.
FRONTIER AIRLINES: Wins $48MM Judgment vs. Aircraft Lessor
----------------------------------------------------------
Judge Louis Stanton of the United States District Court for the
Southern District of New York entered an Amended Opinion and Order
in the breach of contract case captioned as FRONTIER AIRLINES,
INC., Plaintiff, - against - AMCK AVIATION HOLDINGS IRELAND
LIMITED, ACCIPITER INVESTMENT 4 LIMITED, VERMILLION AVIATION (TWO)
LIMITED, WELLS FARGO TRUST COMPANY, N.A., solely in its capacity As
OWNER TRUSTEE, and UMB BANK, N.A., solely in its capacity as OWNER
TRUSTEE, Defendants, Case No. 20 Civ. 9713 (LLS) (S.D.N.Y.).
This is a breach of contract action between plaintiff Frontier, a
commercial passenger airline, and defendant AMCK, an aircraft
leasing company. AMCK buys and leases aircraft through various
affiliates, subsidiaries, and owner trustee entities, including
Accipiter and Vermillion, the other defendants in this case. In
late 2019, AMCK and Frontier entered into a Framework Agreement,
which required AMCK to purchase six new Airbus aircraft and lease
them back to Frontier.
After the COVID-19 pandemic severely limited air travel in March
2020, the parties began negotiating changes to the Framework
Agreement, including deferral of monthly aircraft rents. In May
2020, after the parties failed to reach a formal agreement, AMCK
held Frontier in default and terminated the Framework Agreement.
Frontier brought this action alleging breach of the Framework
Agreement, among other claims that were dismissed on summary
judgment.
Also on March 16, 2020, Frontier sent a letter to AMCK requesting a
temporary deferral of monthly rent payments under the Original
Leases and the MSN 10038 Lease due to the COVID-19 pandemic.
Frontier requested a voluntary (i) one-time, three-month aircraft
rent deferral on the 15 aircraft under lease; and (ii) return of
one-month's security deposit for each aircraft. Frontier explained
it would fully repay those amounts, with interest, over a
nine-month period starting on July 1, 2020. Frontier also
represented that it had a "strong balance sheet with $685 million
of free cash" in order to assure AMCK that it could make its
payments, with interest, when the proposed deferral expired.
Deferral requests of this nature were common given the sudden
impact of the COVID- 19 pandemic on air travel. Frontier sent
concession request letters to all of its lessors, and AMCK received
concession request letters from 32 of its 34 airline partners,
prompting AMCK to create an inter-company deferral team.
As part of the negotiations, AMCK requested that Frontier achieve
delivery delays with Airbus for the upcoming aircraft. This was a
substantial request for Frontier. The Airbus contract was its
"single largest contract," and Frontier had $250 million of PDPs on
deposit with Airbus. Airbus also had little incentive to grant
deferrals, as the aircraft were nearly complete, and Airbus had no
space at its Mobile, Alabama assembly facility to store them.
When Frontier initially asked for a delivery deferral, Airbus's
"immediate reaction ha[d] been to threaten Frontier with default"
of the greater Airbus Agreement. If Airbus declared a default,
Frontier would lose all of its PDP payments for upcoming aircraft,
and it "could cripple the airline to where it may potentially put
[it] out of business" and need to seek Chapter 11 bankruptcy
protection. Delivery delays would benefit AMCK by lessening and
delaying its payment obligations.
AMCK argues that Accipiter and Vermillion, AMCK's affiliates, are
not parties to the Framework Agreement and therefore cannot be held
liable for breach of contract. However, the Court finds that they
are proper defendants.
Accipiter and Vermillion's related contracts should be read as one
with the Framework Agreement, the Court notes. Vermillion entered
into its agreements -- the MSN 10038 Trust Agreement (JX- 25) and
the MSN 10038 Guaranty (JX-26) -- on the same day the Framework
Agreement was executed, and the agreements related to the purchase
of the first aircraft under the Framework Agreement. Accipiter
similarly signed a letter of intent to finance six aircraft under
the Framework Agreement, and the letter's key terms were
incorporated into the Framework Agreement. All documents were
intended to effectuate the same purpose: the financing and leasing
of aircraft between Frontier and AMCK through the Framework
Agreement. They therefore "were executed at substantially the same
time, related to the same subject-matter, were contemporaneous
writings and must be read together as one."
According to the Court, the Framework Agreement imposes binding
obligations on Accipiter and Vermillion. All of the contracts at
issue are interconnected and have numerous cross-references. The
Court points out it was through this very interrelation that AMCK
held Frontier to be in default of the Framework Agreement, using
Frontier's alleged outstanding rent payments on the Original Leases
-- to which Accipiter Holdings DAC, Accipiter' s parent company,
was a party -- to create a breach of the MSN 10038 Lease and a
cross-default under the Framework Agreement. The May 8 Termination
Notice specifically relied on the interrelatedness of those
contracts and the relevant parties, with numerous references to
them. It would make little sense to allow Accipiter and Vermillion
to avoid the very mechanism of interconnection through which AMCK
claimed Frontier to be in default, the Court states.
Accipiter and Vermillion are proper parties to this action and are
liable for breach of the Framework Agreement, the Court holds.
Accordingly, judgment will be entered in favor of Frontier and
against AMCK, Accipiter, and Vermillion in the amount of
$48,660,000, plus interest from April 8, 2024 at a rate of 9%. The
Court accepts Dr. Neels's damages calculation because, while a
pre-tax approach is standard, his use of a constant tax rate
yielded the same result, and his rent computations comported with
Frontier's internal estimates and actual payments. Additionally,
AMCK is liable to Frontier for all losses, fees, costs, and
expenses including attorneys' fees -- under the Original Leases and
the Framework Agreement.
A copy of the Court's decision dated July 1, 2024, is available at
https://urlcurt.com/u?l=0wJI0C
Frontier is a Colorado-headquartered passenger airline that
operates commercial passenger aircraft leased from various aircraft
lessors.
FUTURE MORTGAGE: Gary Murphey Named Subchapter V Trustee
--------------------------------------------------------
The U.S. Trustee for Region 21 appointed Gary Murphey as Subchapter
V trustee for Future Mortgage and Investment, LLC.
Mr. Murphey will be paid an hourly fee of $400 for his services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. Murphey declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Gary Murphey
3330 Cumberland Blvd., Suite 500
Atlanta, GA 30330
Tel: (770) 933-6855
Email: Murphey@RFSLimited.com
About Future Mortgage and Investment
Future Mortgage and Investment, LLC sought protection under Chapter
11 of the U.S. Bankruptcy Code (Bankr. N.D. Ga. Case No. 24-56811)
on July 1, 2024, with $100,001 to $500,000 in assets and
liabilities.
GARRETT MOTION: S&P Raises Secured Debt Rating to 'BB+'
-------------------------------------------------------
S&P Global Ratings raised to 'BB+' from 'BB' its issue rating on
Garrett Motion Inc.'s outstanding secured debt, including its $695
million facility and its $600 million revolving credit facility
(RCF). S&P revised the recovery rating to '1' from '2', indicating
its expectation of very high (90%-100%; rounded 90%) recovery for
the secured lenders in the event of a payment default.
The rating action follows the company's early repayment of $85
million of the existing euro term loan in July 2024, which improves
recovery prospects for secured lenders. This action more than
offsets the modest upsize of the RCF to $600 million from about
$570 million, which we assume would be 85% drawn at default.
S&P's long-term issuer credit rating on Garrett Motion is unchanged
at 'BB-'.
ISSUE RATINGS--RECOVERY ANALYSIS
Key analytical factors
-- Garrett Motion's secured debt, including its $695 million
facility and its $600 million RCF, are rated 'BB+'. The '1'
recovery rating indicates S&P's expectation of very high (90%-100%;
rounded estimate: 90%) recovery for secured lenders in the event of
a payment default.
-- Garrett Motion's $800 million unsecured notes due 2032 is
unchanged at 'B' with a '6' recovery rating, indicating S&P's
expectation of negligible recovery (0%-10%; rounded estimate 0%)
for unsecured lenders in the event of a payment default. This
primarily reflects the subordination of the notes to the secured
debt in an event of default. While the notes are unsecured, they
benefit from the same guarantee package as the secured loans. The
guarantors represent about 91% of the group's EBITDA.
-- S&P said, "In our simulated default scenario, we contemplate a
default in 2028. We assume a cyclical downturn in the industry,
accompanied by intensified competition and a faster-than-expected
shift toward battery electric vehicles." This combination of events
would erode operating conditions and cause a significant decline in
demand for the company's products and services, thereby hampering
its revenue and EBITDA.
-- At this stage, S&P values the business as a going concern,
given its strong market position, solid client base, collaborative
relationships with original equipment manufacturers globally, and
its expectation that vehicles with combustion engines and the
associated aftermarket will remain a sizable market in the medium
term.
Simulated default assumptions
-- Year of default: 2028
-- Jurisdiction: State of New York, U.S.
Simplified waterfall
-- EBITDA at emergence: $239 million (minimum capex assumption of
2%, standard 10% cyclicality adjustment for the auto supplier
industry, and 10% operational adjustment).
-- Implied enterprise value multiple: 5.0x
-- Net enterprise value after administrative costs (5%): $1,135
million
-- Valuation split (obligors/nonobligors): 91%/9%
-- Senior secured debt: $1,198 million*
--Recovery rating: '1' (90%-100%; rounded estimate 90%)
-- Unsecured debt: $930 million*
--Recovery rating '6' (0%-10%; rounded estimate 0%)
*All debt amounts include six months of prepetition interest.
RCF is assumed to be 85% drawn at default.
GATEWAY PUNDIT: Accused of Using Ch.11 to Derail Defamation Suit
----------------------------------------------------------------
Jason Hancock of Missouri Independent reports that the right-wing
conspiracy website Gateway Pundit is accused of abusing the
bankruptcy process to escape accountability in defamation lawsuits
stemming from its false claims about the 2020 election.
Gateway Pundit, founded in St. Louis by brothers Jim and Joe Hoft,
filed for bankruptcy in April 2024 as it was facing defamation
lawsuits in Missouri and Colorado.
In 2021, Georgia election workers Ruby Freeman and Wandrea Moss
sued Gateway Pundit in St. Louis after the site published debunked
stories accusing them of election fraud that resulted in threats of
violence, many tinged with racial slurs. Former Dominion Voting
Systems employee Eric Coomer sued the site in Colorado in 2020
after it falsely accused him of being part of an effort to overturn
the presidential election.
Lawyers for Freeman, Moss and Coomer asked a Florida judge to
dismiss the bankruptcy filing, calling it a "pure litigation
tactic" designed to derail their lawsuits.
Hoft has previously been accused of purposely delaying discovery in
the Missouri case to impede a jury trial. That, Freeman and Moss'
attorney contends, is the true purpose of the bankruptcy.
"To date, the defendants' strategy in the Missouri litigation has
had one goal: delay," wrote David Blanksy, Freeman and Moss’
attorney. "This chapter 11 filing is just the newest effort — in
a long line of failed tactics — to prevent (plaintiffs) from
proving their claims in a court of law."
Vincent Alexander, Coomer's attorney, wrote that the bankruptcy
filing came just as the Hoft brothers were served with deposition
notices in Missouri and soon after their motion to dismiss the
Colorado lawsuit was denied.
Hoft announced in April 2024 that his company was filing for
bankruptcy because of "the progressive liberal lawfare attacks
against our media outlet." His attorney, Bart Houston, argues in
court filings that the benefit of bankruptcy is "to consolidate
disparate claims into a single forum for equality of treatment and
distribution."
Gateway Pundit's insurance policy, Houston wrote, isn’t large
enough to cover all the expenses needed for two defamation cases.
The right-wing conspiracy website Gateway Pundit is accused of
abusing the bankruptcy process to escape accountability in
defamation lawsuits stemming from its false claims about the 2020
election.
Gateway Pundit, founded in St. Louis by brothers Jim and Joe Hoft,
filed for bankruptcy in April as it was facing defamation lawsuits
in Missouri and Colorado.
In 2021, Georgia election workers Ruby Freeman and Wandrea Moss
sued Gateway Pundit in St. Louis after the site published debunked
stories accusing them of election fraud that resulted in threats of
violence, many tinged with racial slurs. Former Dominion Voting
Systems employee Eric Coomer sued the site in Colorado in 2020
after it falsely accused him of being part of an effort to overturn
the presidential election.
Lawyers for Freeman, Moss and Coomer this week asked a Florida
judge to dismiss the bankruptcy filing, calling it a "pure
litigation tactic" designed to derail their lawsuits.
Hoft has previously been accused of purposely delaying discovery in
the Missouri case to impede a jury trial. That, Freeman and Moss'
attorney contends, is the true purpose of the bankruptcy.
"To date, the defendants' strategy in the Missouri litigation has
had one goal: delay," wrote David Blanksy, Freeman and Moss'
attorney. "This chapter 11 filing is just the newest effort — in
a long line of failed tactics — to prevent (plaintiffs) from
proving their claims in a court of law."
Vincent Alexander, Coomer's attorney, wrote that the bankruptcy
filing came just as the Hoft brothers were served with deposition
notices in Missouri and soon after their motion to dismiss the
Colorado lawsuit was denied.
Hoft announced in April that his company was filing for bankruptcy
because of "the progressive liberal lawfare attacks against our
media outlet." His attorney, Bart Houston, argues in court filings
that the benefit of bankruptcy is "to consolidate disparate claims
into a single forum for equality of treatment and distribution."
Gateway Pundit's insurance policy, Houston wrote, isn't large
enough to cover all the expenses needed for two defamation cases.
"In this case, whichever one of the two pending litigations that
reaches trial first will likely have depleted the policy and will
get first shot at the remaining assets of the debtor," Houston
wrote. "The second place litigation will be left with nothing but a
pyrrhic victory."
If the plaintiffs in the defamation lawsuits are "dead set on
depletion of the insurance policy, destruction of the debtors
business operations and zero payment on account of their claims,
then such a result will certainly occur in a dismissal or stay
relief," Houston wrote.
The legal wrangling over bankruptcy echoes the fight between
Infowars host Alex Jones and the families of children killed at
Sandy Hook Elementary School in 2012.
A Texas judge ruled last year, 2023, that Jones can't use
bankruptcy protection to avoid paying more than $1 billion to
families who sued over his repeated lies that the school massacre
was a hoax. But the bankruptcy filings continue to forestall
efforts to get damages, with one family trying to collect assets
from Jones' company in a way that other families argue could leave
them with next to nothing.
Just this week, the U.S. Supreme Court ruled that a
multi-billion-dollar bankruptcy plan for Purdue Pharma, the maker
of the opioid OxyContin, cannot move forward because it shields
members of the Sackler family, which principally owns the company,
from liability for opioid-related claims.
'Patient zero'
According to Business Insider, Jim Hoft admitted at a June 17, 2024
hearing in the bankruptcy case that he used the company to give
himself an $800,000 loan to purchase a condo in 2021 in Jensen
Beach, Florida.
According to court filings, none of that loan has been repaid.
Gateway Pundit, doing business as TGP Communications LLC, also owns
a 2021 Porsche Cayenne worth about $54,000. Hoft said during the
hearing he has used it as a "company car."
Hoft receives a salary from the company of $17,000 a month.
In the nearly two decades since its founding, Gateway Pundit has
spread false conspiracies on a wide range of topics, from the 2018
Sandy Hook school shooting to former President Barack Obama’s
birth certificate.
After years of existing largely in the fringes of the right-wing
media ecosphere, its profile exploded under Trump, who granted the
site White House press credentials.
Hoft was allowed in 2022 to join a lawsuit filed by the Missouri
attorney general's office that argued the federal government
violated the First Amendment in its efforts to combat false,
misleading and dangerous information online. Then Attorney General
Eric Schmitt, who now serves in the U.S. Senate, argued at the time
that Hoft was "one of the most influential online voices in the
country" who suffered "extensive government-induced censorship"
over issues like COVID-19 and election security.
The U.S. Supreme Court on Wednesday rejected the lawsuit's claims,
concluding that neither Hoft nor any of the other plaintiffs were
able to prove that social media platforms acted due to government
coercion. They also failed to demonstrate any harm, the court
determined, or substantial risk that they will suffer an injury in
the future.
In addition to their defamation lawsuit against Hoft, Freeman and
Moss sued former New York City Mayor Rudy Giuliani over false
allegations of fraud tied to the 2020 presidential election.
Giuliani's attorney tried to distance his client from the violent
threats against the Georgia election workers by arguing Gateway
Pundit was more responsible, calling the site "patient zero" in
spreading the conspiracy theory.
In December 2023, Giuliani was ordered to pay Freeman and Moss more
than $148 million in damages.
About Gateway Pundit
Gateway Pundit is a US far-right conspiracy website.
About TGP Communications
TGP Communications is the parent company of Gateway Pundit.
TGP Communications sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Fla. Case No. 24-13938) on April 24,
2024. In its petition, the Debtor reported assets between $500,000
and $1 million and liabilities between $100,000 and $500,000.
GEOSYNTEC CONSULTANTS: Moody's Assigns First Time 'B3' CFR
----------------------------------------------------------
Moody's Ratings assigned to Geosyntec Consultants, Inc. a B3
corporate family rating and a B3-PD probability of default rating.
Moody's also assigned a B3 rating to proposed backed senior secured
bank credit facilities, including a $100 million revolving credit
facility expiring 2029, $440 million term loan B due 2031 and $85
million delayed draw term loan due 2031. Geosyntec is a leading
provider of environmental consulting and engineering services. The
outlook is stable.
The proceeds of the proposed term loan B will be used to refinance
existing indebtedness and pay transaction-related fees and
expenses. ESG governance considerations, including Moody's
expectation for high financial leverage and an acquisitive growth
strategy, were a key driver of the rating action.
RATINGS RATIONALE
Geosyntec's B3 CFR is constrained by the company's high financial
leverage, with debt-to-EBITDA of 6.9x pro forma at close of the
transaction for the twelve months ended March 31, 2024, that will
gradually improve to below 6.0x during the next 12 to 18 months.
The company's ratings also reflect its relatively modest scale
within the B3 rating universe, its position in a highly fragmented
and competitive market, and the risks associated with retaining a
skilled workforce, which is essential for business growth and
operational efficiency. The governance risk is considered high due
to Geosyntec's acquisitive growth strategy and concentrated
ownership. The company will also have access to an $85 million
delayed draw term loan, which is expected to be used for
acquisitions. Blackstone acquired a 60% stake in the company in
2022.
The credit profile is supported by the company's leading position
to capitalize on industry tailwinds driven by increasing relevance
of sustainability considerations and tightening environmental
regulation. The company's credit quality also benefits from strong
organic backlog growth, allowing for roughly 10 months of revenue
visibility, in addition to high employee retention rates. Geosyntec
has established long-standing relationships with its diverse client
base across various industries, including manufacturing, energy,
and government. Moody's anticipate that the company will continue
its solid operating performance with organic revenue growth in the
low teens, expansion of EBITDA margins in the mid-to-high teens
percent area, and improved free cash flow generation over the next
12 to 18 months.
The B3 ratings on the senior secured credit facilities are in line
with Geosyntec's B3 CFR, and reflect its preponderance position in
the capital structure. This credit facility is secured on a first
priority basis by substantially all tangible and intangible assets
and capital stock of the borrowers and the guarantors, which
include existing and future domestic subsidiaries and parent
holding companies.
Moody's expect that Geosyntec will maintain a good liquidity
profile over the next 12 to 15 months. Liquidity is principally
supported by $25 million of cash, pro forma for the transaction, as
of March 31, 2024 and Moody's expectation for improved cash flow
generation, with free cash flow-to-debt in the mid-single-digit
percentage range. The company has minimal capital expenditure
needs, accounting for about 2% of revenue, and it requires minimal
liquidity of around $20 million. The company typically experiences
negative cash flow in Q1 due to bonus expenses, which are usually
paid in March, and strong cash flow generation in the second half
of the year. Geosyntec has access to a $100 million revolving
credit facility (undrawn and fully available at closing), as well
as an $85 million delayed draw term loan (undrawn and fully
available at closing) with 24-month availability for strategic
acquisitions that align with the company's growth strategy. These
sources provide adequate coverage for the required annual first
lien term loan amortization payments of $4.4 million. The revolver
is subject to a maximum first lien leverage ratio set at 40%
cushion to closing leverage, tested when revolver drawings exceed
40% of availability. Moody's expect the company will continue to
have a comfortable cushion relative to the covenant limit.
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 $85 million and 100% of EBITDA,
plus unlimited amounts subject to 5.25x first lien net leverage,
with an inside maturity sublimit up to the greater of $85 million
and 100% of EBITDA. There are no "blocker" provisions which
prohibit the transfer of specified assets to unrestricted
subsidiaries. There are no express protective provisions
prohibiting an up-tiering transaction. Amounts up to 200% of the
builder basket and certain RP carve-outs may be reallocated to
incur debt.
The stable outlook reflects Moody's expectations for low
teens-digit revenue growth and modest profit margin expansion over
the next 12 to 18 months. Moody's also anticipate debt-to-EBITDA
will improve below 6.0x and free cash flow-to-debt in low
single-digit percentage range over the same period.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if Geosyntec continues to demonstrate
revenue and EBITDA growth, with debt-to-EBITDA sustained below 6.0x
(based on Moody's calculations) and the free cash flow-to-debt
approaching a mid-single-digit percentage.
The ratings could be downgraded if revenue growth slows or there is
a material decline in profitability due to increased competition,
or diminished liquidity, including negative free cash flow. The
ratings could also be downgraded if the company's debt-to-EBITDA
remains above 7.5x (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.
Geosyntec, based in Boca Raton, FL, is a leading provider of
environmental consulting and engineering services, addressing
complex challenges related to environmental operations and
remediation, natural resources management, and infrastructure
development and rehabilitation. The company provides innovative
solutions across the infrastructure project lifecycle, including
planning, permitting, design, and construction management. In 2022,
the private equity firm Blackstone Energy Transition Partners
acquired 60% of the company, while remaining 40% is owned by
Geosyntec management and employees. Moody's expect Geosyntec to
generate net service revenue of nearly $530 million in 2024.
GIGAMONSTER NETWORKS: Asks Court Okay for Ch.11 Wind-Down Plan Vote
-------------------------------------------------------------------
Clara Geoghegan of Law360 Bankruptcy Authority reports that
technology company GigaMonster seeks vote for Chapter 11 wind-down
plan.
Defunct internet service provider GigaMonster asked for the
Delaware bankruptcy court's sign-off to send its Chapter 11
liquidation and wind-down plan out for a vote by creditors,
following a settlement in which the company's unsecured creditors
agreed to drop a lawsuit against its controlling investors.
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.
GMP BORROWER: Moody's Withdraws 'B3' CFR on Debt Extinguishment
---------------------------------------------------------------
Moody's Ratings withdrew all of GMP Borrower LLC's ratings,
including its B3 Corporate Family Rating, B3-PD Probability of
Default Rating, and B3 senior secured term loan rating. The outlook
is changed to rating withdrawn from stable. The withdrawals follow
the extinguishment of its outstanding debt.
RATINGS RATIONALE
GMP has fully repaid its senior secured term loan. All of GMP's
ratings have been withdrawn because its rated debt is no longer
outstanding.
GMP Borrower LLC is the owner of a pipeline system (Glass Mountain
Pipeline) transporting crude oil from the Mississippi Lime, Granite
Wash and STACK oilfields to Cushing, OK, where it has storage
capacity and interconnects to major pipeline systems, as well as to
other destinations. It also transports crude oil from Cushing to
two refineries located in the Texas panhandle. A fund managed by
BlackRock, Inc. is GMP Borrower LLC's sponsor and majority owner.
GREENWICH INVESTMENT: Taps Bernstein Shur Sawyer as Counsel
-----------------------------------------------------------
Greenwich Investment Management, Inc. seeks approval from the U.S.
Bankruptcy Court for the Middle District of Florida to hire
Bernstein, Shur, Sawyer & Nelson, PA as special counsel.
The firm will render these services:
(a) legal advice regarding obligations as Bondholder
Representative;
(b) review pleadings filed in the New Hampshire Litigation and
monitor the docket in the case;
(c) draft and file appropriate pleadings, including motions
and objections, in the New Hampshire Litigation;
(d) oversee the ongoing marketing and sale process for the
Meredith Bay assets, including reviewing offer letters, asset
purchase agreements, and other sale-related documents and
pleadings;
(e) communicate with the Rehabilitation Trustee, New Hampshire
regulators, and other parties in interest regarding all matters in
the New Hampshire Litigation;
(f) advise the Debtor regarding a potential credit bid of the
Bond obligations;
(g) appear and be heard at court proceedings in the New
Hampshire Litigation; and
(h) provide all other legal services as reasonably necessary
to represent the Debtor as Bondholder Representative in the New
Hampshire Litigation.
The firm will be paid as follows:
Sam Anderson, Shareholder $560 per hour
Adam Prescott, Shareholder $495 per hour
Matthew Delude, Shareholder $400 per hour
Attorneys $400 - $750/hour
Associate attorneys $275 - $375/hour
D. Sam Anderson, a shareholder with the law firm of Bernstein,
Shur, Sawyer & Nelson, P.A., declared that he is a disinterested
person according to Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
D. Sam Anderson, Esq.
Bernstein, Shur, Sawyer & Nelson, P.A.
100 Middle Street, West Tower
Portland, ME 04101
Tel: (207) 774-1200
Email: sanderson@bernsteinshur.com
About Greenwich Investment Management
Greenwich Investment Management, Inc. sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No.
24-00721) on May 21, 2024, with up to $50,000 in assets and up to
$500,000 in liabilities.
Judge Caryl E. Delano presides over the case.
Craig I. Kelley, Esq., at Kelley Kaplan & Eller, PLLC represents
the Debtor as legal counsel.
HEART TO HEART: Frances Smith Named Subchapter V Trustee
--------------------------------------------------------
The U.S. Trustee for Region 6 appointed Frances Smith, Esq., at
Ross, Smith & Binford, PC, as Subchapter V trustee for Heart to
Heart Catering, LLC.
Ms. Smith will be paid an hourly fee of $475 for her services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Ms. Smith declared that she is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Frances A. Smith, Esq.
Ross, Smith & Binford, PC
700 N. Pearl Street, Ste. 1610
Dallas, TX 75201
Phone: 214-593-4976
Fax: 214-377-9409
Email: frances.smith@rsbfirm.com
About Heart to Heart Catering
Heart to Heart Catering, LLC sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. N.D. Texas Case No. 24-31830) on
June 24, 2024, with up to $50,000 in assets and up to $1 million in
liabilities.
Robert Thomas DeMarco, Esq., represents the Debtor as legal
counsel.
HESS EMBROIDERY: Holly Miller Named Subchapter V Trustee
--------------------------------------------------------
The U.S. Trustee for Regions 3 and 9 appointed Holly Miller, Esq.,
at Gellert Scali Busenkell & Brown, LLC as Subchapter V trustee for
Hess Embroidery & Uniforms, LLC.
Ms. Miller will be paid an hourly fee of $425 for her services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Ms. Miller declared that she is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Holly S. Miller, Esq.
Gellert Scali Busenkell & Brown, LLC
1628 John F. Kennedy Boulevard, Suite 1901
Philadelphia, PA 19103
Telephone: (215) 238-0012
Facsimile: (215) 238-0016
Email: hsmiller@gsbblaw.com
About Hess Embroidery & Uniforms
Hess Embroidery & Uniforms, LLC sought protection under Chapter 11
of the U.S. Bankruptcy Code (Bankr. E.D. Pa. Case No. 24-12194) on
June 26, 2024, with $100,001 to $500,000 in both assets and
liabilities.
Judge Patricia M. Mayer presides over the case.
Larry W. Miller, Jr., Esq., at Miller Law Group, PLLC represents
the Debtor as bankruptcy counsel.
HIGHLAND CAPITAL: 5th Cir. Affirms Contempt Order v. Former CEO
---------------------------------------------------------------
Judge Leslie H. Southwick of the United States Court of Appeals for
the Fifth Circuit affirmed a contempt order entered against James
Dondero by the United States District Court for the Northern
District of Texas in the bankruptcy case of Highland Capital
Management, L.P.
Mr. Dondero is a co-founder and former CEO of the Debtor.
Highland filed an adversary proceeding against Mr. Dondero because
of a dispute over Highland's disposition of its assets in
bankruptcy. In the course of that adversary proceeding, the
bankruptcy court entered a temporary restraining order against
Dondero. That court later found Mr. Dondero in contempt of that
order and awarded compensatory damages to Highland. The district
court affirmed. The Fifth Circuit also affirmed.
In October 2019, Highland filed a petition for Chapter 11
bankruptcy. To avoid appointment of a Chapter 11 Trustee, an
agreement was reached among Highland, Mr. Dondero, and the Official
Unsecured Creditors Committee to overhaul Highland's governance
structure. Pursuant to this settlement, three independent directors
were appointed to govern Highland. One of the directors, James
Seery, was appointed as Highland's new Chief Executive Officer and
Chief Restructuring Officer. Additionally, Mr. Dondero resigned as
Chief Executive Officer but remained as an unpaid employee of
Highland, working as a portfolio manager for separate non-Highland
entities whose funds are managed by Highland. Tensions arose
between Mr. Dondero and the Independent Board regarding the
appropriate path of Highland's winddown. The Independent Board
demanded his resignation, and Mr. Dondero complied on October 9,
2020.
Highland's organizational structure encompasses up to 2,000 other
investment entities. Although most are neither in bankruptcy nor
subsidiaries of Highland, they share various service agreements
with Highland. Through these agreements, Highland (with its own
employees and property) has provided resources such as fund
managers, legal and accounting services, information technology
support, office space, and other overhead for the related entities.
The bankruptcy court observed that many of these related entities
"appear to be under the de facto control of Mr. Dondero," who acts
as the president and portfolio manager for many of them. Even
after his resignation, Mr. Dondero continued managing these
affiliates, most notably NexPoint Advisors, L.P. and Highland
Capital Management Fund Advisors, L.P.
On December 7, 2020, Highland moved for a TRO and preliminary
injunction against Mr. Dondero in response to alleged interference
with Highland's operations. In support, Highland offered evidence
that Mr. Dondero had instructed Highland employees not to carry out
the planned sale of securities owned by Highland.
Three days later, the bankruptcy court granted the TRO following a
hearing. Section 2(c) of the TRO, which is the "Shared Services
Exception" provision at issue here, enjoins Mr. Dondero from
"communicating with any of the Debtor's employees, except as it
specifically relates to shared services currently provided to
affiliates owned or controlled by Mr. Dondero." TRO Section 3
enjoined Mr. Dondero from "causing, encouraging, or conspiring with
(a) any entity owned or controlled by him, and/or (b) any person or
entity from acting on his behalf, from, directly or indirectly,
engaging in any Prohibited Conduct."
On January 7, 2021, Highland moved for an order requiring Mr.
Dondero to show cause why he should not be held in civil contempt
for violating the TRO. Highland alleged that the violations
included Mr. Dondero's communicating with members of Highland's
legal team to coordinate Mr. Dondero's legal strategy against
Highland and interfering with Highland's intended sales of its
assets. Mr. Dondero participated in a deposition on January 5,
2021, and a hearing on January 8, 2021, in connection with these
matters.
The bankruptcy court held an evidentiary hearing on Highland's
contempt motion in late March 2021. On June 7, 2021, the
bankruptcy court issued an order finding Mr. Dondero in civil
contempt for communicating with Highland's employees outside of the
Shared Services Exception and for interfering with Highland's
trading activities. The bankruptcy court imposed a $450,000
compensatory monetary sanction to be paid to Highland, as well as a
$100,000 sanction "for each level of rehearing, appeal, or petition
for certiorari" unsuccessfully pursued. The district court
affirmed all aspects of the bankruptcy court's contempt order
except for the $100,000 sanction for unsuccessful appeals, which
Highland did not contest. Mr. Dondero appealed to the Fifth
Circuit.
Mr. Dondero asserts the bankruptcy court erred in three distinct
ways:
1. The bankruptcy court's TRO failed to satisfy the
specificity requirements of Federal Rule of Civil Procedure
65(d)(1).
2. The bankruptcy court erred in determining there was clear
and convincing evidence that he violated the TRO such that a
contempt finding was appropriate.
3. The bankruptcy court erred in awarding a $450,000 sanction.
According to the Fifth Circuit, the bankruptcy court did not err in
concluding that Mr. Dondero was communicating with Highland's own
in-house counsel to improve his litigation posture against
Highland. Whatever the outer boundaries of the conduct permitted
by the Shared Services Exception may be, they did not encompass
these bad-faith efforts by Mr. Dondero and Scott Ellington,
Highland's own in-house counsel. The bankruptcy court possessed
sufficient evidence to conclude that Mr. Dondero violated Section
2(c) of the TRO, the Fifth Circuit states.
The bankruptcy court cited two admissions by Mr. Dondero of
post-TRO misconduct. The first admission is found within Dondero's
January 5, 2021, deposition. The second admission is found within
the March 22, 2021, contempt hearing. At this portion of the March
22 hearing, counsel for Highland was impeaching Mr. Dondero with
his other admission of post-TRO interference, this time from a
hearing on January 8, 2021.
The Fifth Circuit holds the bankruptcy court did not abuse its
discretion in concluding that clear and convincing evidence existed
that Mr. Dondero violated both Section 2(c) and Section 3 of the
TRO. Either would be sufficient to support the contempt finding;
both are satisfied, the Fifth Circuit notes.
The Fifth Circuit also finds that the bankruptcy court did not err
in granting all fees for work done to protect the reorganization
plan from Mr. Dondero's interference, without regard to which
grounds for contempt ultimately proved successful. Mr. Dondero
contends that Highland provided insufficient evidence to support
the fee amounts. The evidence included the (1) hours expended, (2)
corresponding billable rates, and (3) corresponding descriptions of
the work performed. However, the Fifth Circuit notes this was not
"so vague or incomplete that the district court was precluded from
conducting a meaningful review of whether the hours claimed on this
litigation were reasonably expended." The court was permitted to
use estimates given its "superior understanding of the litigation,"
the Fifth Circuit states.
A copy of the Court's decision dated July 1, 2024, is available at
https://urlcurt.com/u?l=V3wQNq
About Highland Capital Management
Highland Capital Management, LP was founded by James Dondero and
Mark Okada in Dallas in 1993. Highland Capital is the world's
largest non-bank buyer of leveraged loans in 2007. It also manages
collateralized loan obligations. In March 2007, it raised $1
billion to buy distressed loans. Collateralized loan obligations
are created by bundling together loans and repackaging them into
new securities.
Highland Capital Management sought Chapter 11 protection (Bank. D.
Del. Case No. 19-12239) on Oct. 16, 2019. On Dec. 4, 2019, the case
was transferred to the U.S. Bankruptcy Court for the Northern
District of Texas and was assigned a new case number (Bank. N.D.
Tex. Case No. 19-34054). Judge Stacey G. Jernigan is the case
judge.
At the time of the filing, Highland had between $100 million and
$500 million in both assets and liabilities.
The Debtor tapped Pachulski Stang Ziehl & Jones LLP as bankruptcy
counsel, Foley & Lardner LLP as special Texas counsel, and Teneo
Capital, LLC as litigation advisor. Kurtzman Carson Consultants,
LLC, is the claims and noticing agent.
The U.S. Trustee for Region 6 appointed a committee of unsecured
creditors on Oct. 29, 2019. The committee tapped Sidley Austin LLP
and Young Conaway Stargatt & Taylor LLP as bankruptcy counsel, and
FTI Consulting, Inc. as financial advisor.
* * *
In August 2020, the Independent Directors filed a Chapter 11
bankruptcy-exit plan and an accompanying disclosure statement with
the support of the Committee. The Fifth Amended Plan of
Reorganization was confirmed by the bankruptcy court on February
22, 2021. The Plan dissolves the Committee, and creates four
entities -- the Claimant Trust, the Reorganized Debtor, HCMLP GP
LLC, and the Litigation Sub-Trust. Administered by its trustee, the
Claimant Trust "wind[s]-down" Highland Capital's estate over
approximately three years by liquidating its assets and issuing
distributions to class-8 and -9 claimants as trust beneficiaries.
Highland Capital vests its ongoing servicing agreements with the
Reorganized Debtor, which "among other things" continues to manage
the CLOs and other investment portfolios. The Reorganized Debtor's
only general partner is HCMLP GP LLC. The Litigation Sub-Trust
resolves pending claims against Highland Capital under the
direction of its trustee Marc Kirschner.
An appeal over the release provisions provided under the Plan
reached the U.S. Supreme Court, styled as Highland Capital
Management, L.P. v. NexPoint Advisors, L.P., No. 22-631 (US). The
issue is "whether Section 524(e) of the Bankruptcy Code, as its
text suggests, states only the effect of a discharge on third
parties' liability for a debtor's own debts or instead constrains
the power of a court when confirming a plan of reorganization." In
July 2024, the petition for certiorari was denied.
HILLTOP SPV: Seeks to Hire Husch Blackwell as Bankruptcy Counsel
----------------------------------------------------------------
Hilltop SPV LLC seeks approval from the U.S. Bankruptcy Court for
the Western District of Texas to hire Husch Blackwell LLP as its
counsel.
The firm will render these services:
a. provide legal advice with respect to the Debtor's powers
and duties as debtor-in-possession;
b. take all necessary action to protect and preserve the
Debtor's estate;
c. prepare on behalf of the Debtor all necessary motions,
answers, orders, objections, and other legal papers in connection
with the administration of its estate;
d. assist the Debtor in preparing for and filing a plan of
reorganization;
e. represent the Debtor in connection with the administration
of the Debtor's estate;
f. perform any and all other legal services for the Debtor in
connection with the Chapter 11 case;
g. appear before this Court, any appellate courts, and the
United States Trustee and protect the interests of the Debtor's
estate before those Courts and the United States Trustee; and
h. perform such legal services as the Debtor may request with
respect to any matter.
The firm's hourly rates are as follows:
Partners $500 - $1,135
Associates $415 - $795
Paralegals $200 - $475
Jameson Joseph Watts, Esq., a partner at Husch Blackwell, disclosed
in a court filing that he is a "disinterested person" as the term
is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Jameson Joseph Watts, Esq.
Husch Blackwell LLP
111 Congress Avenue, Suite 1400
Austin, TX 78701
Tel: (512) 479-1179
Fax: (512) 479-1101
Email: JAMESON.WATTS@HUSCHBLACKWELL.COM
About Hilltop SPV LLC
Hilltop SPV LLC sought relief under Subchapter V of Chapter 11 of
the U.S. Bankruptcy Code (Bankr. W.D. Tex. Case No. 24-60308) on
June 3, 2024. In the petition signed by Erik White, as chief
restructuring officer, the Debtor reports estimated assets and
liabilities between $1 million and $10 million each.
The Honorable Bankruptcy Judge Michael M Parker oversees the case.
The Debtor is represented by Jameson Joseph Watts, Esq. at Husch
Blackwell LLP.
HILLTOP SPV: Taps Erik White of HMP Advisory Holdings as CRO
------------------------------------------------------------
Hilltop SPV LLC seeks approval from the U.S. Bankruptcy Court for
the Western District of Texas to hire HMP Advisory Holdings, LLC
d/b/a Harney Partners to provide a chief restructuring officer and
certain additional personnel, and designate Erik White as CRO in
this Chapter 11 bankruptcy case.
The firm will render these services:
a. assist the Debtor and its counsel with general matters
related to a restructuring and contemplated Chapter 11 proceeding;
b. assist Debtor with the preparation and filing of any
Voluntary Petition, Schedules of Assets and Liabilities, and
Statement of Financial Affairs, as well as first day motions, as
needed;
c. assist the Debtor and counsel to complete Initial Debtor
Interview questionnaire and related information, to prepare for
Sec. 341 meeting of creditors, and to fulfill its other obligations
as a debtor-in-possession, such as filing the Monthly Operating
Reports;
d. assist the Debtor and its counsel to determine the
liquidity needs of the Debtor and help obtain court approval for
debtor-in-possession financing, if needed;
e. assist the Debtor to develop and maintain thirteen-week
cash forecasts and any budget-to-actual reporting or other
reporting as may be required by potential debtor-in-possession
financing;
f. support the development of the Plan of Reorganization
development; and
g. provide other services as may be agreed upon between Harney
Partners and the Debtor.
Harney Partners' services are anticipated to be provided by Erik
White, managing director, at an hourly rate of $550.
Harney Partners received a retainer of $32,000 for services to be
performed in connection with this case.
Mr. White assured the court that Harney Partners does not hold any
interest adverse to the Debtor's estate, and is a "disinterested
person" as that term is defined in section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
Erik White
Harney Partners
8911 N Capital of Texas Hwy, Suite 2120
Austin, TX 78759
Phone: (512) 892-0803
Email: ewhite@harneypartners.com
About Hilltop SPV LLC
Hilltop SPV LLC sought relief under Subchapter V of Chapter 11 of
the U.S. Bankruptcy Code (Bankr. W.D. Tex. Case No. 24-60308) on
June 3, 2024. In the petition signed by Erik White, as chief
restructuring officer, the Debtor reports estimated assets and
liabilities between $1 million and $10 million each.
The Honorable Bankruptcy Judge Michael M Parker oversees the case.
The Debtor is represented by Jameson Joseph Watts, Esq. at Husch
Blackwell LLP.
HOBBS & ASSOCIATES: Fitch Assigns 'B+' LongTerm IDR, Outlook Stable
-------------------------------------------------------------------
Fitch Ratings has assigned Hobbs & Associates, LLC (Hobbs) a
first-time Long-Term Issuer Default Rating (IDR) of 'B+' and senior
secured debt ratings of 'BB-'/'RR3'. The new term loan and delayed
draw term loan (DDTL) will be used to refinance existing debt, fund
pending acquisitions, and general corporate purposes. The Rating
Outlook is Stable.
Hobbs' 'B+' IDR reflects the company's technical expertise,
favorable track record, and growing geographic footprint with
territorial exclusivity to a range of product categories from a
diverse set of vendors that differentiates its ability to spec,
procure and deliver efficient, cost effective HVAC solutions. The
rating also considers the non-discretionary,
repair/replacement-oriented demand mix (about 63% of revenue)
benefiting from exposure to secular growth tailwinds and
management's strategic focus on growing its service and aftermarket
parts supply segment (currently 13% of revenues).
Rating concerns include Hobbs' reliance on its original equipment
manufacturer (OEM) relationships and active acquisition strategy,
as well as its financial sponsor ownership, heightening execution
and financial risks. Fitch expects the company's EBITDA leverage to
be sustained in the 4x-4.5x range and EBITDA interest coverage over
2.5x, commensurate with 'B+' rating tolerances. Fitch forecasts
(CFO-capex)/Debt to improve to around 7%-8%, which is strong for
the rating and highlights Hobbs' deleveraging capacity.
KEY RATING DRIVERS
Growing Scale in Fragmented Industry: Hobbs is well-positioned
within its geographic markets (21 states), providing a broad
product line with established commercial relationships with 300+
HVAC manufacturers that serve over 5,000 contractors/engineers and
end-user customers across a range of end markets. Access to
multiple brands in conjunction with over 400 technical sales reps
provides a competitive advantage which will further improve with
acquisitions. Fitch recognizes that acquisitions help enhance
diversification and scale, including geographic expansion and
vendor relationship depth, benefiting the cash flow risk profile.
Non-discretionary Demand Moderates Variability: Cyclicality
inherent in HVAC end-markets is mitigated by Hobbs' large portion
of sales related to repairs, parts and services through the
lifecycle of HVAC systems. Replacement and renovation (R&R) and
aftermarket servicing and parts demand tends to be more stable than
original equipment given its non-discretionary nature and
relatively predictable lifecycle. Fitch also believes management's
strategic focus on expanding its services/aftermarket presence
helps lengthen the company's end-user customer relationship and
enhance its long-term replacement opportunity set.
M&A, Financial Policy Heighten Risks: Fitch believes the company's
active, debt-funded acquisition strategy heightens execution risk
and post-acquisition EBITDA leverage could be elevated in the
mid/high-4x range. Fitch expects (CFO-capex)/debt will improve to
around 7%-8% due to limited working capital and capex needs
highlighting Hobbs' post-acquisition deleveraging capacity. In just
over a year, the company has completed 21 acquisitions and Fitch
expects this pace of expansion to continue with management's
favorable integration and synergy realization track record also
helping alleviate execution risk. As the company establishes its
position in new regions, Fitch expects the company will benefit
from the addition of capabilities at target companies and further
growing its installed base.
Fitch expects Fitch-calculated leverage metrics could be
temporarily above Fitch's ratings sensitivities following
acquisitions. Fitch's rating considers these deviations in the
context of its expectation that the acquisitions are strategic to
the overall business, strengthen diversification and overall
competitiveness, and that financial risk is mitigated by strong
cash flow generation and deleveraging capacity, demonstrated by
ratios such as (CFO-capex)/Debt.
Fitch recognizes the senior credit facilities are covenant-light
and accommodate the company's expansion plan. Fitch views credit
agreement clauses as mitigating the potential risk of sustained
deviations in financial policy. These clauses include debt
incurrence limitations, mandatory prepayments based on excess cash
flow, and restricted payments, all of which will be triggered by
net leverage ratios in the range of 4.5-5x. The revolver, if drawn
more than 40%, contains a springing covenant when the first lien
net leverage ratio exceeds 7.75x.
Capabilities, Secular Trends Support Growth: Fitch believes
commercial and operational momentum will continue in the medium
term, supported by secular tailwinds and differentiated
capabilities, including a strategic focus on increasing penetration
into national accounts supplemented by acquisitions. Fitch expects
secular demand will be supported by steady growth of the installed
base, demand related to aging infrastructure and energy efficiency
standards, as well as fast-growing potential for data center
construction. Fitch expects the company's focus on national
accounts presents solid opportunities for footprint expansion and
margin accretive operating leverage.
Diversified Customer, Vendor Base: Demand from public sector
customers facilitates revenue visibility due to relatively
long-term and consistent government/school/hospital spending. More
than 60% of Hobbs customers are public sector entities, including
education, government and healthcare customers. Other customers in
the lodging and commercial offices, which are relatively more
susceptible to general economies, account for less than 5% each.
Despite partnerships with over 300 OEMs, the top five OEM
relationships contribute around 44% of equipment purchases.
Reputational risk leading to weaker relationships with the major
OEMs may negatively impact Hobbs' business, but Fitch believes
management's track record helps mitigate this risk.
DERIVATION SUMMARY
Hobbs' business profile is in-line with or better than 'B+' rating
characteristics given its solid market position in a highly
fragmented market, favorable R&R-weighted revenue base, and cash
generation with FCF margins in the low single digits. The ratings
are mainly driven by the company's active, debt-funded acquisition
strategy and financial policy leading to higher leverage consistent
with 'B+' rating tolerances. Hobbs' credit risk is comparable to
that of WEC US Holdings Ltd (B+/Sta, dba Westinghouse Electric
Company). The recurring nature of WEC's multi-year contracted
business, regulatory requirements, and long and costly switching
costs, in addition to its scale and OEM status, support its
profitability relative to Hobbs. While Hobbs lacks the stability
provided by multi-year contracts, the company benefits from its
technical knowledge, vendor and customer relationships,
R&R-orientation, and limited working capital and capex needs that
drive stronger FCF margins.
KEY ASSUMPTIONS
- Organic revenue growth in low-single digits, augmented by
acquisitions that contribute to double-digit growth;
- EBITDA margins remain stable around 11% in the medium-term;
operational leverage is offset temporarily by the near-term impact
of margin-dilutive acquisitions;
- Low capital intensity with capex below 1% of annual revenue;
- FCF margin consistently in the low/mid-single digits;
- Debt-funded acquisitions of around $300 million per annum at high
single-digit multiples;
- No dividends;
- Incremental debt funded at SOFR + 500 bps
RECOVERY ANALYSIS
The recovery analysis for a hypothetical bankruptcy scenario
assumes that Hobbs would be considered a going concern (GC) in
bankruptcy, and that the company would be reorganized rather than
liquidated.
Fitch has assumed a 10% administrative claim
The GC EBITDA estimate reflects Fitch's view of a sustainable,
post-reorganization EBITDA level upon which Fitch bases the
enterprise valuation. The $122 million GC EBITDA assumes degraded
relationships with OEMs as a result of reputational impairments and
the corresponding loss of its top two suppliers (27% of equipment
purchases). Fitch assumes revenues fall by 25% as Fitch believes
the company would be able to replace a portion of the revenue loss
through substitution of OEMs. Margins remain stable above 10% given
Hobbs' variable cost structure.
An enterprise valuation multiple of 5.0x EBITDA is applied to the
GC EBITDA to calculate a post-reorganization enterprise value. The
multiple considers the company's asset-light business and the
meaningful value derived from its OEM relationships, as well as
valuation multiples for comparable companies.
The credit facility is assumed to be fully drawn. The secured
credit facility, term loan, and DDTL are pari passu and receive
equal priority in the distribution of value in the recovery
waterfall. The recovery rating analysis results in a 'BB-'/'RR3'
recovery for the secured debt.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Financial policies that lead to improved EBITDA leverage below
4.0x, and EBITDA interest coverage above 3.0x on a sustained
period;
- Improved financial flexibility with (CFO-capex)/debt sustained in
the high-single digits;
- Continued execution of strategic initiatives that improve cash
flow risk, including increased size, scale and diversification.
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- EBITDA leverage maintained above 4.5x or EBITDA interest coverage
sustained below 2.5x;
- Reduced financial flexibility, including less than 75% credit
facility availability or low single-digit CFO-Capex/Debt;
- Weaker operational and cash flow profiles due to heightened
execution risk in the company's expansion strategy and/or a more
shareholder friendly capital allocation policy
LIQUIDITY AND DEBT STRUCTURE
Comfortable Liquidity: The company expects to refinance its $492
million debt with $700 million term loan to be issued.
Post-refinancing, the company's debt structure will consist of $100
million senior secured revolver (undrawn), $700 million senior
secured term loan B, and a senior secured delayed draw term loan of
$50 million. Term loan and DDTL (when drawn) will amortize at 1%
per annum and mature in 2031.
ISSUER PROFILE
Hobbs is an HVAC independent rep, who provides value-added
services/solutions for the full lifecycle of commercial HVAC
systems, ranging from system design to equipment selection &
procurement, ongoing maintenance & repair, aftermarket parts
supply, and eventually equipment replacement.
DATE OF RELEVANT COMMITTEE
25 June 2024
ESG CONSIDERATIONS
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Recovery
----------- ------ --------
Hobbs & Associates,
LLC LT IDR B+ New Rating
senior secured LT BB- New Rating RR3
INNOVATIVE LOAN: Areya Holder Aurzada Named Subchapter V Trustee
----------------------------------------------------------------
The U.S. Trustee for Region 6 appointed Areya Holder Aurzada, Esq.,
at Holder Law as Subchapter V trustee for Innovate Loan Servicing
Corporation.
Ms. Aurzada will be paid an hourly fee of $575 for her services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Ms. Aurzada declared that she is a disinterested person according
to Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Areya Holder Aurzada, Esq.
Holder Law
901 Main Street, Ste. 5320
Dallas, TX 75202
Office: 972-438-8800
Mobile: 817-907-4140
About Innovate Loan Servicing
Innovate Loan Servicing Corporation specializes in managing auto
loan receivables across the U.S. from its corporate offices located
in North Texas. The Company offers customers several ways to make
payments, including 24/7 online account access, automated phone pay
and live customer care specialists.
Innovate Loan Servicing sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. N.D. Texas Case No. 24-42243) on June
28, 2024, with up to $1 million in assets and up to $10 million in
liabilities. Preston Miller, president, signed the petition.
Richard G. Grant, Esq., at Culhane, PLLC serves as the Debtor's
legal counsel.
IROQUOIS-HUEY LLC: Patrick Malloy Named Subchapter V Trustee
------------------------------------------------------------
The U.S. Trustee for Region 14 appointed Patrick Malloy, III as
Subchapter V trustee for Iroquois-Huey, LLC.
Mr. Malloy will be paid an hourly fee of $350 for his services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. Malloy declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Patrick J. Malloy, III
401 S. Boston Ave., Suite 500
Tulsa, OK 74103
Telephone: (918) 699-0345
Email: pjmiii@sbcglobal.net
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, with up to $50,000 in assets and up 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 bankruptcy counsel.
J.A. WALL: Hires Haller & Colvin as Bankruptcy Counsel
------------------------------------------------------
J.A. Wall Trucking, LLC seeks approval from the U.S. Bankruptcy
Court for the Northern District of Indiana to hire Haller & Colvin,
PC as its counsel.
The firm will advise the Debtor regarding its duties under the
Bankruptcy Code and will provide other legal services related to
its Chapter 11 case.
The firm's attorneys who will be handling the Debtor's bankruptcy
case are Scot Skekloff, Esq. and H. Faith Welch, Esq.
Haller & Colvin does not represent any interest adverse to the
Debtor and its bankruptcy estate, according to court filings.
The firm can be reached through:
Scot T. Skekloff, Esq.
HALLER & COLVIN, PC
444 E. Main Street
Fort Wayne, IN 46802
Tel: (260) 426-0444
Fax: (260) 422-0274
Email: DSkekloff@hallercolvin.com
About J.A. Wall Trucking, LLC
J.A. Wall Trucking, LLC sought protection for relief under Chapter
11 of the Bankruptcy Code (Bankr. N.D. Ind. Case No. 24-10862) on
July 2, 2024, listing $50,001 to $100,000 in both assets and
liabilities.
Scot T. Skekloff, Esq. at Haller & Colvin, PC represents the Debtor
as counsel.
J.H. LLC: Seeks to Hire Memory Memory & Causby as Legal Counsel
---------------------------------------------------------------
J.H., LLC seeks approval from the U.S. Bankruptcy Court for the
Northern District of Alabama to hire Memory Memory & Causby, LLP as
its Chapter 11 bankruptcy counsel.
The firm's services include:
a. preparation of the petition and any schedules, disclosures,
and first-day motions incident to the commencement of the Chapter
11 bankruptcy;
b. preparation, negotiation, and prosecution of a plan of
reorganization or liquidation and all related documents on behalf
of the Debtor;
c. negotiation on behalf of the Debtor with all major creditor
classes with respect to the plan of reorganization and certain
other substantive aspects of the case;
d. preparation on behalf of the Debtor, as
Debtor-in-Possession, of certain necessary motions, applications,
answers, orders, reports, and papers necessary to the
administration of the Debtor's Estate;
e. preparation of all action necessary to protect and preserve
the Debtor's Estate, including negotiation concerning any material
litigation in which the Debtor is involved; and
f. performance of all other necessary legal services in the
case.
The firm's hourly rates are:
Von Memory $400
Stuart Memory $300
William Wesley Causby $300
McKenna J. Meldrum $250
Paralegals $125
Memory received a retainer in the amount of $7,500.
The firm is "disinterested" within the meaning of Section 101(14)
of the Bankruptcy Code, according to court filings.
The firm can be reached through:
Stuart H. Memory, Esq.
Memory Memory & Causby, LLP
P.O. Box 4054
Montgomery, AL 36103
Tel: (334) 834-8000
Email: smemory@memorylegal.com
About J.H., LLC
J.H., LLC is primarily engaged in manufacturing non-metallic
mineral products.
J.H., LLC filed its voluntary petition for relief under Chapter 11
of the Bankruptcy Code (Bankr. N.D. Ala. Case No. 24-01711) on June
6, 2024. The petition was signed by Bintao Qin, VP of Operations.
At the time of filing, the Debtor estimated $10 million to $50
million in both assets and liabilities.
Judge Tamara O. Mitchell presides over the case.
Stuart Memory, Esq. at MEMORY MEMORY AND CAUSBY LLP represents the
Debtor as counsel.
JAMES WYTT BELCHER: Subchapter V Case Converted to Chapter 7
------------------------------------------------------------
Judge Paul R. Thomas of the United States Bankruptcy Court for the
Eastern District of Oklahoma granted the United States Trustee's
motion to convert the Chapter 11 Subchapter V case of James Wytt
Belcher to Chapter 7.
Debtor James Wytt Belcher is the president and sole owner of Arnold
Brothers Forest Products, Inc. Mr. Belcher and Arnold Brothers
filed bankruptcy under Sub Chapter V on April 30, 2024. The Court
entered an Order of Dismissal in the Arnold Brothers case, which
included extensive findings of fact.
The Sub V Trustee filed a response in support of the U.S. Trustee's
Motion and urges conversion. Creditor AmeriState Bank filed a
Motion to Dismiss. At the conclusion of the evidentiary hearing,
counsel for AmeriState agreed that the evidence supported
conversion rather than dismissal of the case.
According to the Court, since the Arnold Brothers case has been
dismissed, Mr. Belcher's testimony and Stipulations establish it is
unlikely he has any ability to reorganize his personal bankruptcy
case. His only source of funds will be social security income.
Therefore, the Court concludes that he is unable to continue in
this chapter 11 case.
It is within this Court's discretion to decide whether dismissal or
conversion is in the best interest of creditors and the bankruptcy
estate. Mr. Belcher has stipulated that he owns real estate that
is free and clear of any liens, claim or encumbrances. The U.S.
Trustee, Sub V Trustee and AmeriState urge the Court to choose
conversion rather than dismissal. Given that there may be
unencumbered assets available for liquidation and distribution by a
chapter 7 trustee, the Court concludes that conversion to Chapter 7
is in the best interest of creditors.
Since the case is being converted to Chapter 7, AmeriState Bank's
Motion to Dismiss is denied, the Court rules.
A copy of the Court's decision dated July 3, 2024, is available at
https://urlcurt.com/u?l=VmhFjb
James Wytt Belcher filed for Chapter 11 bankruptcy protection (E.D.
Okla. Case No. 24-80319) on April 30, 2024, listing under $1
million in both assets and liabilities. The Debtor is represented
by Jeff Potts, Esq.
JANE STREET: Moody's Puts 'Ba1' CFR Under Review for Upgrade
------------------------------------------------------------
Moody's Ratings has placed all ratings of Jane Street Group, LLC on
review for upgrade, including Jane Street's Ba1 corporate family
rating and its Ba2 senior secured notes and senior secured bank
credit facility ratings. Previously, the outlook was positive.
RATINGS RATIONALE / FACTORS THAT COULD LEAD TO AN UPGRADE OR
DOWNGRADE OF THE RATINGS
The review for upgrade reflects Jane Street's strong financial
profile, leading market share, and deliberative risk management
culture. The review for upgrade also reflects the firm's strong
equity capital base, prudent liquidity management and strengthened
prime brokerage and funding relationships.
If sustained, these considerations could provide important added
protections for creditors given the inherently elevated level of
operational and market risks in Jane Street's activities,
particularly with respect to electronic market making in less
liquid markets, such as fixed income and their associated exchange
traded funds. These inherent risks could result in unexpected
losses in the event of a significant operational or market risk
management failure. Shifts in market sentiment can also result in
rapid changes in trading conditions, market liquidity, counterparty
confidence and funding resiliency. Moreover, the intensely
competitive nature of technology driven market-making dictates that
Jane Street continually stay at the forefront in terms of trading
technology, risk controls and retaining intellectual capital,
otherwise its creditworthiness could deteriorate.
Jane Street also mitigates its risk management challenges via its
strong partnership culture, including from the ongoing direct
involvement of senior executives in supervising trading strategy
development, risk-taking activities and maintaining controls.
Although the firm relies on its prime brokerage relationships to
help facilitate funding, execution and clearing, it has been
steadily diversifying its funding counterparties and building
further flexibility into its financing terms. The firm also
maintains a substantial pool of liquidity to absorb potential
increases in margin requirements and more generally to protect
against risks.
Factors that could lead to an upgrade
The review for upgrade will assess Jane Street's long-term plans
for managing its ongoing growth and risk exposures; including with
respect to its key strategic priorities, its governance framework
and ownership structure, its operational resilience, and the
boundaries of its financial policies and capital structure. The
review will also consider the resiliency and diversification of
Jane Street's prime brokerage financing arrangements.
Factors that could lead to a downgrade
Since the ratings are on review for upgrade, a downgrade in the
near term is unlikely. However, Jane Street's ratings could be
downgraded should it increase its risk appetite or suffer from a
significant risk management or operational failure; experience
adverse changes in corporate culture or management quality;
experience a substantial and sustained decline in profitability
caused by changes in the market or regulatory environment; increase
its capital distributions in a manner that is not commensurate with
its historic trends; or change its funding mix to a significantly
heavier weighting towards long-term debt and away from equity
resulting in a substantial increase in its balance sheet leverage.
The principal methodology used in these ratings was Securities
Industry Market Makers published in June 2024.
KOMBU KITCHEN: Taps Garofolo & Ramsdell as Special Counsel
----------------------------------------------------------
Kombu Kitchen SF LLC seeks approval from the U.S. Bankruptcy Court
for the Central District of California to hire Garofolo & Ramsdell,
LLP, as its special litigation counsel.
The firm will represent the Debtor in the two pre-petition lawsuits
pending in the Alameda County Superior Court identified as Aja de
Coudreaux, et. al., v. Kombu Kitchens SF, LLC, et al., Case No.
RG20058323 and Ma De Jesus Vergara V. Kombu Kitchen SF, LLC, Case
No. RG20057449, which were consolidated with Case No. RG20058328
designated as the lead case.
The firm will be paid at these hourly rates:
Craig P. Ramsdell $500
Maniya Gatmaitan $450
Joseph Garofolo $900
Craig P. Ramsdell, a partner in Garofolo & Ramsdell, assured the
court that his firm is a "disinterested person" within the meaning
of 11 U.S.C. 101(14).
The firm can be reached through:
Craig P. Ramsdell, Esq.
Garofolo & Ramsdell, LLP
3443 Golden Gate Way, Suite H
Lafayette, CA 94549
Tel: (415) 981-8500
Email: cramsdell@garofololaw.com
About Kombu Kitchen SF LLC d/b/a NIBLL
Kombu Kitchen SF LLC is a corporate catering company in
California.
The Debtor filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. C.D. Calif. Case No. 23-17276) on Nov. 1,
2023, with $1,748,762 in assets and $1,527,579 in liabilities.
Keven Thibeault, chief executive officer, signed the petition.
Judge Sandra R. Klein oversees the case.
Daniel Weintraub, Esq., at Weintraub Zolkin Talerico & Selth, LLP,
represents the Debtor as legal counsel.
KULR TECHNOLOGY: Lands Initial $400K NASA Deal for Battery Testing
------------------------------------------------------------------
KULR Technology Group, Inc. announced July 8, 2024, it has been
awarded a purchase order exceeding $400,000 from the National
Aeronautics and Space Administration ("NASA"), an independent
agency of the U.S. federal government, as part of a $2 million
multi-phase agreement for its advanced automated battery cell
screening system. The battery safety contract with NASA is to test
lithium-ion cells going into future battery packs designed for the
Artemis Program, a series of United States-led international human
spaceflight programs. KULR will perform the tests on cells in
reserve for upcoming Artemis missions as well as other pivotal
manned space voyages. The cells used on the missions are required
to meet certification to NASA's strict specifications for manned
flights, EP-WI-037.
With a leading position in safe battery design and testing, and as
a significant player in the global electrification movement, KULR
is among the few companies to meet the stringent requirements and
rigorous testing standards of NASA's JSC 20793 Revision D for
crewed space missions. This qualification enables KULR's products
and solutions to be used in the Artemis missions and other upcoming
critical space voyages.
According to Straits Research, the global battery cell testing
market is anticipated to grow at a CAGR of 4% between 2022–2030
and reach USD 7 billion by 2030.
KULR specializes in evaluating battery cells essential for manned
space missions. To meet growing demand, the Company plans to
expand its technology to support 21700 cells by year's end,
enhancing safety and reliability for various mission-critical
applications. The design and development work for this project will
be a collaborative effort between KULR's state-of-the-art
facilities located in Webster, Texas, and San Diego, California,
and is a vital cornerstone of expanding the KULR ONE Space (K1S)
portfolio into CubeSat and SmallSat markets, customized battery
design activities, and preparedness for low volume but high
technical niche battery production.
KULR's modular screening technology offers scalability to meet
market demands, reinforcing its strategic partnership with NASA and
its role in aerospace energy management and battery safety. As the
drive for electrification and sustainable energy grows, KULR is
well-positioned to leverage new opportunities and advance battery
design and safety measures in collaboration with industry
partners.
About KULR Technology Group
KULR Technology Group Inc. (NYSE American: KULR) is an energy
management platform company offering proven solutions that play a
critical role in accelerating the electrification of the circular
economy. Leveraging a foundation in developing, manufacturing, and
licensing next-generation carbon fiber thermal management
technologies for batteries and electronic systems, KULR has evolved
its holistic suite of products and services to enable its customers
across disciplines to operate with efficiency and sustainability in
mind. For more information, please visit www.kulrtechnology.com.
Los Angeles, Calif.-based Marcum LLP the Company's auditor since
2018, issued a "going concern" qualification in its report dated
April 12, 2024, citing that the Company has a working capital
deficit, has incurred losses from operations, and needs to raise
additional funds to meet its obligations and sustain its
operations. These conditions raise substantial doubt about the
Company's ability to continue as a going concern.
L'ADRESSE LLC: Updates SBA Secured Claim; Files Amended Plan
------------------------------------------------------------
L'Adresse, f/k/a Coffeemania Bryant Park, LLC, submitted an Amended
Disclosure Statement for the Plan of Reorganization dated June 28,
2024.
The Debtor has continued to operate its business during the Chapter
11 Case. As a result of the Debtor's improvement in operations, the
Debtor is now in a position to successfully emerge from Chapter 11
and effectuate the Plan.
The Debtor operates from a leased premises 1065 6th Avenue, New
York, New York 10018. They occupy the premises pursuant to a lease
with 5 Bryant Park Property Investors IV. On May 20, 2022 the Court
signed an order granting Debtor's motion to assume the lease. Since
entry of the order, the Debtor and landlord have continued to
engage in continuous discussions concerning the lease.
Class 3 consists of the claim of the Small Business Administration
("SBA"). The SBA is the sole member of this Class. The Debtor will
continue to make the monthly payments on this claim in the amount
of $2,140.00 as provided for under the final cash collateral order
entered February 3, 2023. The SBA shall retain its lien on the
Debtor's property and all terms and conditions of the SBA loan
shall continue in full force and effect. The Class 3 creditor is
impaired.
Like in the prior iteration of the Plan, Class 5 consist of 18
holders of Allowed General Unsecured Claims. This class totals
approximately $240,708.91. This class will be paid $50,000.00 or
20% of its Allowed Claims with quarterly payments commencing within
30 days of the Effective Date of the Plan without interest. This
class will receive a total of $50,000.00 payable in twenty equal,
consecutive, quarterly payments of $2,500.00 each commencing 30
days after the Effective Date of the Plan.
L'Adresse North America, Inc., the sole member of the Debtor's LLC
has contributed $50,000.00 of new value to the Debtor and in
exchange shall retain its 100% interest in the Debtor. Class 6 is
not impaired for purposes of Section 1124 of the Bankruptcy Code
and is not entitled to vote pursuant to Section 1126(f) of the
Bankruptcy Code.
The Plan shall be effectuated from a new value contribution of
$50,000.00 by the sole member of the Debtor. The balance of the
payments are to be funded from ongoing business operations.
Projections of the Debtor's income and expenses from March 2024
until February 2029 indicate the Debtor will have sufficient income
to meet all of its payment obligations under the Plan. The payments
to be paid under the Plan to New York State Department of Taxation
and Finance will be $3,500.00 a month and the payments for Class 5
general unsecured creditors will be $833.33.
A full-text copy of the Amended Disclosure Statement dated June 28,
2024 is available at https://urlcurt.com/u?l=YpUzh4 from
PacerMonitor.com at no charge.
Attorneys for the Debtor:
Heath S. Berger, Esq.
Berger Fischoff Shumer Wexler & Goodman LLP
6901 Jericho Turnpike #230
Syosset, NY 1179
Phone: 800-806-1136
Email: hberger@bfslawfirm.com
About L'Adresse, LLC
L'Adresse, LLC, sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. N.Y. Case No. 22-11583-jlg) on Nov.
29, 2022. In the petition signed by Evgeny Zhuravlev, managing
member, the Debtor disclosed up to $500,000 in assets and up to $10
million in liabilities.
L'Adresse, LLC operates a publicly acclaimed restaurant styled as
an "American Bistro" located in Bryant Park in Manhattan. L'Adresse
operates seven days a week serving breakfast, lunch and dinner.
A separate sister restaurant is located in Nomad and is not part of
the proceeding.
Judge James L. Garrity, Jr. oversees the bankruptcy case.
Heath S. Berger, Esq., at Berger, Fischoff, Shumer, Wexler &
Goodman, LLP, is the Debtor's legal counsel.
LARRY OUTLAW & SONS: Starts Subchapter V Bankruptcy Proceeding
--------------------------------------------------------------
On June 21, 2024, Larry Outlaw and Sons Trucking LLC filed Chapter
11 protection in the Eastern District of North Carolina. According
to court filing, the Debtor reports between $1 million and $10
million in debt owed to 1 and 49 creditors. The petition states
funds will be available to unsecured creditors.
A meeting of creditors under 11 U.S.C. Section 341(a) is slated for
July 22, 2024 at 10:00 a.m. at Greenville 341 Meeting Room.
About Larry Outlaw and Sons Trucking LLC
Larry Outlaw and Sons Trucking LLC is an active interstate freight
carrier based out of Colerain, North Carolina.
Larry Outlaw and Sons Trucking LLC sought relief under Subchapter V
of Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D. N.Y. Case
No. 24-02051) on June 21, 2024.
Honorable Bankruptcy Judge Pamela W. Mcafee oversees the case.
The Debtor is represented by:
John G. Rhyne, Esq.
JOHN G. RHYNE, ATTORNEY AT LAW
P.O. Box 8327
Wilson, NC 27893
Tel: 552-234-9933
Email: johnrhyne@johnrhynelaw.com
LD CONSTRUCTION: Unsecureds to Split $84K over 6 Years
------------------------------------------------------
LD Construction, Inc., filed with the U.S. Bankruptcy Court for the
District of Montana a Second Amended Plan of Reorganization for
Small Business under Subchapter V dated June 28, 2024.
The Debtor has been an S Corporation since 2012. Before
incorporating, owner/operator Brian Larson started his business in
2003 doing work for Weeden Construction.
In 2006 Brian went into business for himself as LD Construction
doing heavy civil construction for ranchers and businesses in the
summer while operating his personal logging operation during the
winter months. In 2012 LD Construction incorporated and at that
time had five employees, continuing to do dirt work when weather
allowed and moving into the woods to log during the winter months,
allowing Brian to keep his crew employed year around.
Since filing on September 15, 2023, LD has continued to fulfill
contracts with Eastfork Holdings bringing in $324,780 and has two
more contracts to finish before winter sets in that will bring in
an additional $250,000. LD Construction has an excellent reputation
in both the civil construction and logging fields and looks to
restructure and operate in the Central Montana area for many years
to come.
This Plan of Reorganization proposes to pay creditors of the Debtor
from cash flow from operations.
The final Plan payment is expected to be paid on or about March 10,
2034.
Class 8 consists of Non-priority unsecured creditors. Unsecured
creditors shall be paid the total sum of $83,971.84 in prorate
shares over a period of 6 years. Payments will begin 30 days after
confirmation with Debtor acting as the disbursing agent. Unsecured
creditors include Bank of the West ($8,487.92); Komatsu Financial
($169,365.53); Lewistown Rental ($7,685.39); Modern Machinery
($10,991.09); R&R Diesel Repair ($2,613.00); RDO Equipment
($8,969.04); Rindal Oil ($20,000.00); and Internal Revenue Service
($114,677.59).
For tax years 2024, 2025, and 2026, if LD Construction, Inc.
generates net income as shown on Line 21, Ordinary business income
(loss) of Debtor's Form 1120-S, greater than $100,000.00 per year,
the unsecured class set forth above shall be entitled to 10% of the
amount greater than $100,000.00, if that amount is greater than the
guaranteed prorata payment for that year. In no event will the two
amounts be combined.
LD Construction, Inc. agrees to furnish annually to counsel for the
Internal Revenue Service, LD Construction, Inc. 's signed and filed
corporate tax returns which will be prepared in accordance with IRS
standards and an income statement prepared in accordance with GAAP
procedures for the sole purpose of verifying the net income amount.
The Debtor shall continue in business and Mr. Larson shall continue
to manage the Debtor and his compensation shall become commensurate
with appropriate wages and draws in the event the company is able
to. In particular, capital expenditures for equipment replacement.
In the event of default, Debtor's nonexempt assets shall be
liquidated and distributed to creditors in satisfaction of the
remaining Plan obligations unless the Plan is modified and approved
by the Court.
A full-text copy of the Second Amended Plan dated June 28, 2024 is
available at https://urlcurt.com/u?l=GgGb3m from PacerMonitor.com
at no charge.
Attorneys for the Debtor:
Gary S. Deschenes, Esq.
Deschenes & Associates Law Offices
309 First Avenue North
P.O. Box 3466
Great Falls, MT 59403
Telephone: (406) 761-6112
Email: gsd@dalawmt.com
About LD Construction, Inc.
LD Construction Inc. is a construction company in Montana.
LD Construction Inc. sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D Mont. Case No. 23-40063) on Sept. 15,
2023. In the petition filed by Brian D. Larson, as president, the
Debtor estimated assets and liabilities between $1 million and $10
million.
The Debtor is represented by Gary S. DEeschenes, Esq. of Deschenes
& Associates Law Offices.
LEBANON PLATINUM: Creditors to Get Proceeds From Liquidation
------------------------------------------------------------
Lebanon Platinum, LLC and its Debtor Affiliates filed with the U.S.
Bankruptcy Court for the Middle District of Tennessee a Combined
Disclosure Statement and Chapter 11 Plan dated June 28, 2024.
The Debtors are six limited liability companies, each of which
operates a single limited-service hotel with less than 100 rooms.
The Debtor hotels are part of a larger family of hotels under the
umbrella name "Platinum" and operating in Tennessee, Texas, and
Florida.
The Debtors' assets fall within four broad categories: Hotel
Assets, effective date cash, miscellaneous Causes of Action
(including any Avoidance Actions), and certain unimproved real
estate owned by Lebanon Platinum.
The Debtors intend to transfer title to all hotel assets, including
the real property, the improvements, and the personalty located
thereon upon which the Debtors operate their hotels, as well as any
and all causes of action the Debtors may have, including Avoidance
Actions, to G6 in full satisfaction of all G6 Claims other than the
first position superpriority lien securing the DIP Facility. The
DIP Facility liability shall remain as a cross-collateralized
encumbrance against all remaining property of the Debtors, to
specifically include the vacant parcels of land owned by Lebanon
Platinum.
In exchange, the Debtors shall fully fund—both with their own
receivables and cash (which constitute G6's collateral) and with a
substantial new infusion of cash from G6—immediate payments on
the Effective Date of the Plan, which will ensure (a) payment in
full to all administrative expense holders, taxing authorities, and
other priority claimants and (b) a guaranteed fund for each Debtor
reserved exclusively for each's general unsecured creditor class.
Specifically, and as set forth in more detail below, the general
unsecured creditors of each Debtor other than Destin Platinum shall
receive a guaranteed pool of $30,000.00. The unsecured creditors of
Destin Platinum shall receive a guaranteed pool of $325,000.00 due
to the negotiated Destin Waterfall specifically reserved in the DIP
Orders.
This Plan removes the uncertainty of recovery to administrative
expense claimants, priority creditors, and general unsecured
creditors. It guarantees a definite and immediate payment rather
than a speculative potential recovery—one that the Debtors'
professionals confirm would almost certainly not occur under any
other scenario, whether conversion, third-party sale, or
foreclosure following stay relief.
The Plan is designed to liquidate substantially all of the Debtors'
bankruptcy estates—other than certain specific encumbered
property held by Debtor Lebanon Platinum, LLC—to provide all
creditors and parties in interest an amount that is equal to, or in
excess of, the amount they would receive or retain if the Debtors
were liquidated under Chapter 7 of Title 11.
Class 10 consists of all Allowed Unsecured Claims against any of
the Debtors, other than those Claims that are separately
classified. On the Effective Date, each Class 10 Claimant shall be
entitled to a pro rata distribution of $30,000.00 from each
applicable Debtor against whom it holds a Claim. For clarity, no
portion of the funds for distribution on the Class 10 Claims shall
be allocable or recoverable to pay for any portion of the G6
Claims, including any liability arising under the DIP Facility.
The Class 10 Claimants shall be entitled to payment only after
their Claim becomes an Allowed Claim. Upon entry of a Final Order
creating an Allowed Claim from a Disputed Claim, the Class 10
Claimants shall be paid promptly the total amount of installment
payments that would have been due on their Claims if they had been
Allowed as of the Effective Date.
Class 11 Ownership Interests. This Class consists of all Claims
held by insiders of the Debtors, which Claims shall be Allowed in
full. Debtors shall make no distributions to any holders of Claims
in this Class. This Class further consists of the ownership
interests in Debtors held as of the Petition Date. In consideration
of retention of these ownership interests, the Debtors' current
equity holders shall waive all affirmative rights to payment on all
member loans and other amounts that might be due from Debtors.
Except as otherwise expressly provided in the Plan, Confirmation of
the Plan shall vest all the property of the Debtor's estate in the
Reorganized Debtor.
Except for executory contracts and unexpired leases that have been
assumed, and if applicable assigned, before the Effective Date or
expressly assumed under this Plan, or that are the subject of a
pending motion to assume, and if applicable assign, the Debtor will
be conclusively deemed to have rejected all executory contracts and
unexpired leases as of the Effective Date. Any creditors that
believe they hold Claims with respect to contracts rejected
hereunder shall file a proof of Claim on or before 30 days
following the Effective Date. Any such timely filed Allowed Claims
will participate in the distribution for unsecured creditors set
out within the Plan.
A full-text copy of the Combined Disclosure Statement and Plan
dated June 28, 2024 is available at https://urlcurt.com/u?l=D18LfY
from PacerMonitor.com at no charge.
Counsel for the Debtors:
Henry E. "Ned" Hildebrand, IV, Esq.
R. Alex Payne, Esq.
Gray Waldron, Esq.
DUNHAM HILDEBRAND PAYNE WALDRON, PLLC
9020 Overlook Blvd, Ste 316
Brentwood, TN 37027
Phone: 615.933.5851
Email: ned@dhnashville.com
About Lebanon Platinum
Lebanon Platinum, LLC, filed its voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Tenn. Case No.
23-03592) on Sept. 29, 2023, with up to $50,000 in assets and up to
$10 million in liabilities. Mitch Patel, manager, signed the
petition.
Judge Charles M. Walker oversees the case.
Steven L. Lefkovitz, Esq., at Lefkovitz & Lefkovitz, PLLC serves as
the Debtor's legal counsel.
LIME LINE: Mark Politan of Politan Law Named Subchapter V Trustee
-----------------------------------------------------------------
The U.S. Trustee for Regions 3 and 9 appointed Mark Politan, Esq.,
at Politan Law, LLC, as Subchapter V trustee for Lime Line
Operations LLC.
Mr. Politan will be paid an hourly fee of $450 for his services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. Politan declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Mark J. Politan, Esq.
Politan Law, LLC
88 East Main Street #502
Mendham, NJ 07945
Cell: (973) 768-6072
Email: mpolitan@politanlaw.com
About Lime Line Operations
Lime Line Operations LLC operates a health care business in Mahwah,
N.J.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D.N.J. Case No. 24-16240) on June 20, 2024,
with up to $50,000 in assets and up to $10 million in liabilities.
Louis V. Greco III, manager, signed the petition.
Judge John K. Sherwood presides over the case.
Tracy L. Klestadt, Esq., at Klestadt Winters Jureller Southard &
Stevens, LLP represents the Debtor as legal counsel.
LITTLE SCHOLARS: S&P Alters Outlook to Negative, Affirms 'BB+' ICR
------------------------------------------------------------------
S&P Global Ratings revised its outlook to negative from stable and
affirmed its 'BB+' issuer credit rating (ICR) on Little Scholars of
Arkansas (LISA) Academy, Ark.
"The outlook revision reflects the school's weakened operating
performance in fiscal 2023, which led to materially lower
lease-adjusted maximum annual debt service coverage, relative to
that of similarly rated peers, coupled with a decline in
unrestricted reserves," said S&P Global Ratings credit analyst
Chase Ashworth.
An ICR reflects an obligor's general creditworthiness, focusing on
its capacity and willingness to meet financial commitments when
they come due. It does not apply to any specific financial
obligation because it does not consider the obligation's nature and
provision, standing in bankruptcy, or liquidation, statutory
preferences, or legality and enforceability.
S&P said, "We assessed LISA Academy's enterprise profile as
adequate, reflecting a good demand with consistent enrollment
growth, a history of successful charter renewals, and a proactive
management team, which offsets risks associated with continued
growth plans. We assessed its financial profile as vulnerable,
including a significantly weakened maximum annual debt service
(MADS) coverage of 0.53x in fiscal year 2023 and a moderately high
but manageable debt burden. We believe that these credit factors,
combined, lead to an anchor of 'bb'. As our criteria indicate, the
final rating can be within one notch of the anchor. In our opinion,
the final 'BB+' rating on LISA Academy better reflects the
organization's sound market position, including its successful
track record of enrollment growth.
"The negative outlook period over the next 12 months reflects our
view of the school's significantly lower and what we consider very
weak lease-adjusted MADS coverage in fiscal 2023 and its
significant decrease in liquidity."
LL FLOORING: Hires AlixPartners to Help Operations, to Raise Cash
-----------------------------------------------------------------
Reshmi Basu of Bloomberg News reports that LL Flooring taps
AlixPartners for operations as it seeks cash.
LL Flooring Holdings Inc. is getting operational help from advisers
at AlixPartners as it looks to shore up its cash reserves,
according to people familiar with the matter.
The flooring retailer, formerly known as Lumber Liquidators, is
battling slumping sales as dismal home sales, higher interest rates
and inflation have crimped spending on home improvement. Meanwhile,
its other advisers at Houlihan Lokey Inc. have been reaching out to
potential investors about a deal to inject fresh capital into the
company, said the people, who asked not to be identified because
discussions are private.
About LL Flooring Holdings
Richmond, Va.-based LL Flooring Holdings, Inc. is a multi-channel
specialty retailer of flooring and flooring enhancements and
accessories, operating as a single operating segment. The Company
offers an extensive assortment of hard-surface flooring including
waterproof hybrid resilient, waterproof vinyl plank, solid and
engineered hardwood, laminate, bamboo, tile, and cork, with a wide
range of flooring enhancements and accessories to complement. In
addition, the Company also began offering carpet during 2023 and
provides in-home delivery and installation services to its
customers.
As of March 31, 2024, the Company has $523.1 million in total
assets, $393.6 million in total liabilities, and $129.5 million in
total stockholders' equity.
M.P.M. PROPERTY: Angela Shortall Named Subchapter V Trustee
-----------------------------------------------------------
The Acting U.S. Trustee for Region 4 appointed Angela Shortall of
3Cubed Advisory Services, LLC as Subchapter V trustee for M.P.M.
Property Management, LLC.
Ms. Shortall will be paid an hourly fee of $525 for her services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Ms. Shortall declared that she is a disinterested person according
to Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Angela L. Shortall
3Cubed Advisory Services, LLC
111 S. Calvert St., Suite 1400
Baltimore, MD 21202
Phone: 410-783-6385
About M.P.M. Property Management
M.P.M. Property Management, LLC sought protection under Chapter 11
of the U.S. Bankruptcy Code (Bankr. D. Md. Case No. 24-15501) on
June 29, 2024, with $1 million to $10 million in assets and
$100,000 to $500,000 in liabilities. Michael P. Marzullo, owner and
managing member, signed the petition.
Judge David E. Rice presides over the case.
Robert M. Stahl, Esq., at the Law Offices of Robert M. Stahl
represents the Debtor as bankruptcy counsel.
MATTHEWS INTERNATIONAL: S&P Raises Unsecured Note Rating to 'B+'
----------------------------------------------------------------
S&P Global Ratings raised its issue-level rating on
Pittsburgh-based Matthews International Corp.'s senior unsecured
notes to 'B+' from 'B' and revised the recovery rating on the notes
to '5' (rounded estimate: 15%) from '6' (rounded estimate: 5%). The
higher rating reflects its revised recovery analysis based on
updated information on the sources of EBITDA within Matthew
International's organizational structure, providing more expected
value to the unsecured tranche in a default scenario. S&P now
assumes less value in a hypothetical default from obligors and more
value from non-obligors, including a subset of non-obligors that do
not provide an equity pledge in the credit agreement.
S&P said, "As a result, we expect less value to be pledged to
secured lenders and therefore higher recovery in a default scenario
for the unsecured tranche than in our previous analysis. The
recovery rating is '5', reflecting our expectation for modest
(10%-30%; rounded estimate: 15%) recovery in the event of a payment
default.
"Our 'BB-' issuer credit rating and negative outlook are
unaffected."
ISSUE RATINGS - RECOVERY ANALYSIS
Key analytical factors
-- The capital structure consists of a priority $125 million
accounts receivables factoring commitment (assumed $115 million
drawn), a $750 million first-lien revolver (not rated, assumed 85%
drawn), a $30 million U.K. non-recourse factoring facility (not
rated, assumed $17 million drawn), a EUR25 million euro-denominated
credit facility (not rated, assumed 85% drawn), and $300 million in
rated senior unsecured notes.
-- In S&P's hypothetical default scenario, we assume a base rate
of 2.5%.
-- S&P values the company on a going-concern basis using a 5.5x
multiple off its projected EBITDA at default.
S&P approximates the value distribution to be:
--Obligor entities: 54%
--Non-obligor entities with 66% equity pledge: 39%
--Non-obligor entities with no equity pledge: 7%
Simulated default assumptions
-- Simulated year of default: 2028
-- EBITDA at emergence: $113 million
-- EBITDA multiple: 5.5x
Simplified waterfall
-- Net enterprise value (after 5% administrative costs): $592
million
-- Valuation split (obligors/non-obligors with equity
pledge/non-obligors with no equity pledge): 54%/39%/7%
-- Priority claims on obligor entities: $117 million
-- Priority claims on nonobligor entities: $17 million
-- Total collateral value available to first-lien claims: $330
million
-- Total first-lien claims: $690 million
-- Total value available to unsecured claims: $107 million
-- Pari passu secured (deficiency) claims: $361 million
-- Senior unsecured debt: $307 million
-- Total unsecured claims (including pari passu claims): $667
million
--Recovery expectation: 10%-30% (rounded estimate: 15%)
Note: All debt amounts include six months' prepetition interest.
MEDEX LLC: Kimberly Strong Named Subchapter V Trustee
-----------------------------------------------------
The Acting U.S. Trustee for Region 5 appointed Kimberly Strong,
audit director at Harper, Rains, Knight & Company, P.A., as
Subchapter V trustee for MedEx, LLC.
Ms. Strong will be paid an hourly fee of $250 for her services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Ms. Strong declared that she is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Kimberly Strong
Harper, Rains, Knight & Company, P.A.
1052 Highland Colony Pwky, Suite 100
Ridgeland, MS 39157
Phone: (601) 605-0542
Email: kstrong@hrkcpa.com
About MedEx LLC
MedEx, LLC, a company in Saltillo, Miss., filed its voluntary
petition for Chapter 11 protection (Bankr. N.D. Miss. Case No.
24-11781) on June 21, 2024, listing as much as $1 million to $10
million in both assets and liabilities. John Logan, managing
member, signed the petition.
The Law Offices of Craig M. GenoENO, PLLC serve as the Debtor's
bankruptcy counsel.
MEGNA REAL ESTATE: Unsecureds to be Paid in Full in Plan
--------------------------------------------------------
Megna Real Estate Investments, Inc., filed with the U.S. Bankruptcy
Court for the Central District of California a Disclosure Statement
which relates to the accompanying Chapter 11 Plan dated June 28,
2024.
MREI is a California corporation formed on January 7, 2019. It is
100% owned by Mahmud Ulkarim.
At the time of the filing of this Case, Debtor owned real property
located at 705 Yarmouth Road, Palos Verdes Estates, CA 90274
("Yarmouth"), which Debtor rented out on a short-term basis through
Airbnb. Yarmouth was scheduled at a value of $2,500,000, with other
assets of the estate consisting of cash (now in the
Debtor-in-Possession account) and some office furniture and
equipment.
The principal liability of the estate secured by Yarmouth was a
note in favor of Center Street Lending Corporation ("Center
Street"). The Center Street note is one of three notes that are all
cross-collateralized. Center Street filed a Proof of Claim in a
companion case to this case (Megna Temecula Country Inn, Inc.; Case
No. 1:23-bk-10843-MB) on August 24, 2023, stating a secured claim
of $1,786,792.60 secured by Yarmouth.
The Debtor later sold Hoover; the proceeds of sale paid the secured
creditors of Hoover. Later, Debtor finalized the sale of Yarmouth.
Center Street was paid $1,450,000 through escrow, and the balance
of Center Street's claim attached to the net sales proceeds (which
were required to be deposited into a segregated DIP account).
Class 3 Priority Claims consists of priority unsecured claims (for
example, wages due to employees that were earned, but unpaid,
within 180 days before the bankruptcy petition was filed). No
priority claims were scheduled. Two priority claims were filed:
Internal Revenue Service ("IRS") for $300 (Claim 2) and State of
California Franchise Tax Board ("FTB") for $2,482.91.00 (Claim 3).
These claims will be paid in full by Debtor on the Effective Date
or as soon thereafter as practical. These claims are unimpaired,
and therefore not entitled to vote on the Plan.
Class 4 General Unsecured Claims consists of unsecured claims (that
are not entitled to priority under the Bankruptcy Code). One
unsecured claim was scheduled: Mike Corrales for $2,175.00. Two
proofs of claim for general unsecured claims were filed, the FTB
for $208.93 and Lynn Arthur for $165,264.66.
The claims of Mike Corrales and the FTB will be paid in full on the
Effective Date or soon thereafter as practical; these claims are
unimpaired and therefore not entitled to vote on the plan. The
claim of Lynn Arthur will be the subject of an objection; that
claim is based solely on a judgment in a lawsuit to which Debtor
was not a party. Upon disallowance of the Lynn Arthur claim, Lynn
Arthur will not be entitled to vote on the Plan.
Class 5 consists of Interest Holders. The Debtor is a corporation;
therefore, interests means corporate stock. 100% of the interests
in Debtor are owned by Mahmud Ulkarim. No distribution to or change
to that interest is provided by the Plan. Accordingly, the Class 5
interest holder is unimpaired and not entitled to vote on the Plan.
Because all allowed claims will be paid on the Effective Date, Mr.
Ulkarim will be entitled to maintain his interest in MREI.
The Debtor has cash on deposit in debtor-in-possession ("DIP")
accounts as of April 30, 2024, as follows: Wells Fargo (Main DIP
Account) $28,200.87; and Wells Fargo (Sale Proceeds DIP Account)
$484,309.06. Payments under the Plan will be made out of such cash
on hand.
The Debtor believes that the Plan is feasible because Debtor has
sufficient cash to make all distributions due on the Effective
Date.
A full-text copy of the Disclosure Statement dated June 28, 2024 is
available at https://urlcurt.com/u?l=5KQhPN from PacerMonitor.com
at no charge.
Counsel to the Debtor:
Mark T. Young, Esq.
Taylor F. Williams, Esq.
Young & Williams LLP
25152 Springfield Court, Suite 345
Valencia, CA 91355-1081
Telephone: (661) 259-9000
Facsimile: (661) 554-7088
Email: myoung@dywlaw.com
twilliams@dywlaw.com
About Megna Real Estate
Megna Real Estate Investments, Inc. owns a single-family residence
located at 705 Yarmouth Road, Palos Verdes, Estates, Calif., valued
at $2.5 million.
Megna Real Estate Investments filed a Chapter 11 petition (Bankr.
C.D. Calif. Case No. 23-10809) on June 12, 2023, with $2,509,232 in
assets and $6,625,582 in liabilities. John-Patrick Fritz has been
appointed as Subchapter V trustee.
Judge Martin R. Barash oversees the case.
Donahoe Young & Williams, LLP is the Debtor's legal counsel.
MEGNA TEMECULA COUNTRY: Unsecureds to be Paid in Full in Plan
-------------------------------------------------------------
Megna Temecula Country Inn, Inc., filed with the U.S. Bankruptcy
Court for the Central District of California a Disclosure Statement
which relates to the accompanying Chapter 11 Plan dated June 28,
2024.
MTCI is a California corporation formed on April 16, 2019. It is
100% owned by Mahmud Ulkarim. Debtor owns real property located at
41300 Berkswell Lane, Temecula, CA 92592 (the "Property").
The Property was scheduled at a value of $3,100,000, with other
assets of the estate consisting of cash (now in the
Debtor-in-Possession account) and some office furniture and
equipment. The principal liability of the estate secured by the
Property is a note in favor of Center Street Lending Corporation
("Center Street").
Class 3 Priority Claims consists of priority unsecured claims (for
example, wages due to employees that were earned, but unpaid,
within 180 days before the bankruptcy petition was filed). No
priority claims were scheduled. Two priority claims were filed:
Internal Revenue Service ("IRS") for $5,074.42 (Claim 1) and State
of California Franchise Tax Board ("FTB") for $2,483.37 (Claim 3).
These claims will be paid in full by Debtor on the Effective Date
or as soon thereafter as practical. These claims are unimpaired,
and are therefore not entitled to vote on the Plan.
Class 4 General Unsecured Claims consists of general unsecured
claims (claims that are not entitled to priority under the
Bankruptcy Code and that are not secured by collateral). No
unsecured claim was scheduled. One proof of claim for a general
unsecured claim was filed: FTB for $209.05 (Claim 3). This claim
will be paid in full by Debtor on the Effective Date or as soon
thereafter as practical. This claim is unimpaired, and is therefore
not entitled to vote on the Plan.
Class 5 Interest Holders. The Debtor is a corporation; therefore,
"interests" means corporate stock. 100% of the interests in Debtor
are owned by Mahmud Ulkarim. No distribution to or change to that
interest is provided by the Plan. Accordingly, the Class 5 interest
holder is unimpaired and not entitled to vote on the Plan.
This Plan will be funded by payments to Debtor from future net
income derived from its ongoing short-term property rental business
as well as capital infusions from Debtor's principal for any months
that Debtor's net income is not sufficient to cover payments
required by the Plan.
The Debtor previously rented out the Property on a short-term basis
through Airbnb, but stopped doing so to be able to market the
Property for sale. However, the Property has not sold. Debtor has
determined that by reverting to its prior business model –
short-term rentals – Debtor will be able to generate sufficient
cash flow to be able to make the payments to Center Street,
Riverside County, and the SBA (a total of $17,914.60 per month) and
pay the expenses of operating the Property. To the extent that the
Property does not generate sufficient revenue in any month to be
able to make the monthly payments, the shortfall will be
contributed by Mr. Ulkarim.
The Debtor will also seek a suitable buyer for a post-confirmation
sale of the Property, for an amount sufficient to satisfy all
allowed claims. If by the end of the repayment term to Center
Street, Riverside County, and the SBA (five years after the
Effective Date) Debtor has not sold the Property, Debtor will
refinance it.
A full-text copy of the Disclosure Statement dated June 28, 2024 is
available at https://urlcurt.com/u?l=lDR3zC from PacerMonitor.com
at no charge.
Attorneys for the Debtor:
Mark T. Young, Esq.
Taylor F. Williams, Esq.
Young & Williams, LLP
25152 Springfield Court, Suite 345
Valencia, CA 91355-1081
Telephone: (661) 259-9000
Facsimile: (661) 554-7088
Email: myoung@dywlaw.com
twilliams@dywlaw.com
About Megna Temecula Country Inn
Megna Temecula Country Inn, Inc. owns a single-family residence
located at 41300 Berkswell Lane, Temecula, Calif., valued at $3.1
million.
Megna Temecula Country Inn filed a petition under Chapter 11,
Subchapter V of the Bankruptcy Code (Bankr. C.D. Calif. Case No.
23-10843) on June 16, 2023, with $3,102,827 in assets and
$6,636,973 in liabilities. John-Patrick Fritz has been appointed as
Subchapter V trustee.
Judge Victoria S. Kaufman oversees the case.
Donahoe Young & Williams, LLP is the Debtor's legal counsel.
MEGNA TEMECULA HACIENDA: Unsecureds to be Paid in Full in Plan
--------------------------------------------------------------
Megna Temecula Hacienda De Endar Inn, Inc. filed with the U.S.
Bankruptcy Court for the Central District of California a
Disclosure Statement which relates to the accompanying Chapter 11
Plan dated June 28, 2024.
MTHEI is a California corporation formed on February 10, 2020. It
is 100% owned by Mahmud Ulkarim.
The Debtor owns real property located at 35438 De Portola Road,
Temecula, CA 92592 (the "Property"). The Property was scheduled at
a value of $3,300,000, with other assets of the estate consisting
of cash (now in the Debtor-in-Possession account) and some office
furniture and equipment. The principal liability of the estate
secured by the Property is a note in favor of Center Street Lending
Corporation ("Center Street").
The Center Street note is one of three notes that are all cross
collateralized. Center Street filed a Proof of Claim on August 24,
2023, stating a claim of $2,911,111.07 secured by the Property. The
other liabilities of the estate consist of property taxes to
Riverside County of $54,585.36 (pursuant to Proof of Claim filed
July 13, 2023), and tax debts totaling $4,192.83 (pursuant to
Proofs of Claim filed July 6 and 11, 2023).
Class 3 Priority Claims consists of priority unsecured claims (for
example, wages due to employees that were earned, but unpaid,
within 180 days before the bankruptcy petition was filed). No
priority claims were scheduled. Two priority claims were filed:
Internal Revenue Service ("IRS") for $400.00 (Claim 1) and State of
California Franchise Tax Board ("FTB") for $3,368.37 (Claim 3).
These claims will be paid in full by Debtor on the Effective Date
or as soon thereafter as practical. These claims are unimpaired and
are therefore not entitled to vote on the Plan.
Class 4 General Unsecured Claims consists of general unsecured
claims (claims that are not entitled to priority under the
Bankruptcy Code and that are not secured by collateral). No
unsecured claim was scheduled. One proof of claim for general
unsecured claims was filed: FTB for $424.46. This claim will be
paid in full by Debtor on the Effective Date or as soon thereafter
as practical. This claim is unimpaired and is therefore not
entitled to vote on the Plan.
Class 5 consists of Interest Holders. The Debtor is a corporation;
therefore, "interests" means corporate stock. 100% of the interests
in Debtor are owned by Mahmud Ulkarim. No distribution to or change
to that interest is provided by the Plan. Accordingly, the Class 5
interest holder is unimpaired and not entitled to vote on the
Plan.
This Plan will be funded by payments to Debtor from future net
income derived from its ongoing short-term property rental business
as well as capital infusions from Debtor's principal for any months
that Debtor's net income is not sufficient to cover payments
required by the Plan.
The Debtor previously rented out the Property on a short-term basis
through Airbnb, but stopped doing so to be able to market the
Property for sale. However, the Property has not sold. Debtor has
determined that by reverting to its prior business model –
short-term rentals – Debtor will be able to generate sufficient
cash flow to be able to make the payments to Center Street and
Riverside County (a total of $ 18,456.72 per month) and pay the
expenses of operating the Property.
The Debtor will also seek a suitable buyer for a post-confirmation
sale of the Property, for an amount sufficient to satisfy all
allowed claims. If by the end of the repayment term to Center
Street and Riverside County (five years after the Effective Date)
Debtor has not sold the Property, Debtor will refinance it.
A full-text copy of the Disclosure Statement dated June 28, 2024 is
available at https://urlcurt.com/u?l=cyvZhH from PacerMonitor.com
at no charge.
Counsel to the Debtor:
Mark T. Young, Esq.
Taylor F. Williams, Esq.
Young & Williams LLP
25152 Springfield Court, Suite 345
Valencia, CA 91355-1081
Telephone: (661) 259-9000
Facsimile: (661) 554-7088
Email: myoung@dywlaw.com
twilliams@dywlaw.com
About Megna Temecula Hacienda
Megna Temecula Hacienda De Endar Inn, Inc. owns a single-family
residence located at 35438 De Portola Road, Temecula, Calif.,
valued at $3.3 million.
The Debtor filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. C.D. Calif. Case No. 23-10842) on June 16,
2023, with $3,302,843 in assets and $6,617,238 in liabilities.
John-Patrick Fritz has been appointed as Subchapter V trustee.
Judge Martin R. Barash oversees the case.
Donahoe Young & Williams, LLP, is the Debtor's legal counsel.
MELT BAR: Seeks to Hire George Roman Auctioneers as Auctioneer
--------------------------------------------------------------
Melt Bar and Grilled, Inc. seeks approval from the U.S. Bankruptcy
Court for the Northern District of Ohio to hire George Roman
Auctioneers Ltd. as its auctioneer.
The auctioneer will handle an online auction of certain unused
equipment at the Debtor's former commissary location and to sell
any unused equipment in the future from any other location.
George Roman shall receive a 10 percent commission premium on the
gross sale proceeds with a minimum commission of $2,000, paid from
the gross sale proceeds, along with a $1,000 fee for removal and
advertising costs also paid from the gross sale proceeds.
George Roman will also receive a 10 percent buyer's premium, paid
by the bidders. George Roman has no relationship with any creditors
of the estate.
As disclosed in the court filings, George Roman do not have any
interest materially adverse to the interest of the estate or of any
class of creditors by reason of any direct or indirect relationship
to, connection with the debtor, or for any other reason.
The firm can be reached through:
Ronald L. Roman
George Roman Auctioneers, LTD.
22 W. Main St.
Canfield, OH 44406
Telephone: (330) 533-4071
Facsimile: (330) 533-4889
Email: rroman@georgeromanauctioneers.com
About Melt Bar and Grilled, Inc.
Melt Bar and Grilled, Inc. owns and operates four restaurants in
Ohio.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Ohio Case No. 24-50879-amk) on June
14, 2024. In the petition signed by Matthew K. Fish, president, the
Debtor disclosed $1 million in assets and $10 million in
liabilities.
Frederic P. Schwieg, Esq., at Frederic P Schwieg Attorney at Law,
from PacerMonitor.com.
MILK STREET CAFE: Hits Chapter 11 Bankruptcy Protection
-------------------------------------------------------
Greg Ryan of Boston Business Journal reports that Milk Street Cafe
has filed for Chapter 11 protection.
Longtime downtown Boston lunch spot Milk Street Cafe has filed for
bankruptcy after encountering difficulty with a loan from a federal
program meant to help struggling businesses during the height of
the pandemic.
Milk Street filed for Chapter 11 protection in Massachusetts
bankruptcy court on June 20, 2024 listing assets of $1.1 million
and liabilities of $3.2 million. The family-owned business makes
the vast majority of its revenue through corporate catering, while
also serving breakfast and lunch at its restaurant on the corner of
Milk and Devonshire streets.
The company has seen a significant decline in business because of
the changing work patterns brought on by Covid-19, but the main
impetus for its bankruptcy is an outstanding Covid-era loan,
according to Mitchell Baratz, its chief operating officer.
The loan is from the Main Street Lending Program established by the
Federal Reserve in mid-2020. At $1.6 million, it represents the
company's largest unsecured claim by a large margin. Silicon Valley
Bank is the loan's servicer.
The Main Street program served as an additional lifeline to the
more popular Paycheck Protection Program. The Fed backed 95% of the
loans but, unlike the PPP, the debt is not forgivable.
When Milk Street took out the loan in the fall of 2020, its leaders
were attracted to its generous terms, Baratz said: No payments due
the first year, then interest-only payments the next two years. At
the beginning of the third year, 15% of the principal would be due,
then another 15% a year later, followed by the remaining 70% a year
after that, he said.
If not for the Main Street loan, Baratz said, Milk Street would
have gone out of business in 2020.
By the time the loan principal was due, Milk Street's owners
figured, the economic effects of Covid-19 would be well in the
rearview mirror. But as they and many others have learned that the
pandemic had long-lasting effects on downtown foot traffic.
Milk Street's sales volume is about 60% to 65% what it was
pre-Covid, according to Baratz. Revenue from Tuesday through
Thursday is near pre-pandemic levels, but Mondays and Fridays are a
different story: Receipts on Friday, he said, are not close to half
of what they had been. Its headcount is 55 employees, down from a
pre-Covid peak of about 75.
The business is stable despite those headwinds, but Milk Street's
owners anticipate they won't be able to pay back the roughly $1
million due in October 2025.
"We're looking ahead and understanding that one lump payment is the
Damocles' knife," Baratz said.
The loan is unusual because it's through a government program
backed by the Fed, limiting the flexibility Silicon Valley Bank
might otherwise have, he said. The goal of the bankruptcy is to
proactively deal with the debt issue and come out stronger on the
other side.
"We certainly see a path forward, which is why we're taking this
action to continue," Baratz said. "My father-in-law, Marc
Epstein… he started this 43 years ago. My job is to keep it going
for the next 43."
Milk Street's debt difficulties could portend wider trouble ahead
for businesses that collectively took out billions of dollars in
loans through the Main Street program, at least for those such as
downtown restaurants that are still feeling the impacts of
Covid-19.
About Milk Street Cafe Inc.
Milk Street Cafe Inc. is a family owned and operated upscale casual
restaurant.
Milk Street Cafe Inc. sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Mass. Case No. 24-11233) on June 20,
2024. In the petition filed by Marc Epstein, as president, the
Debtor reports total assets of $1,099,666 and total liabilities of
$3,245,762.
The Debtor is represented by:
John T. Morrier, Esq.
CASNER & EDWARDS, LLP
303 Congress Street
Boston, MA 02210
Tel: 617-426-5900
Fax: 617-426-8810
Email: morrier@casneredwards.com
MINI MANIA: Seeks to Hire Patrick Rettig as Financial Consultant
----------------------------------------------------------------
Mini Mania Inc. seeks approval from the U.S. Bankruptcy Court for
the Eastern District of California to hire The Patrick Rettig
Corporation as a financial consultant.
The firm will assist the Debtor in reorganizing the Debtor's
business, navigating through chapter 11, and preparing a plan of
reorganization.
The Debtor agreed to compensate Rettig monthly at the rate of
$6,500. This sum is to be paid in two parts monthly, or $6,500 in
total monthly.
As disclosed in the court filings, Rettig has no connection with
the Debtor, creditors, or any party in interest, their respective
attorneys, accountants, or the U.S. Trustee, or any employee of the
U.S. Trustee.
The firm can be reached through:
Patrick Rettig
The Patrick Rettig Corporation
P.O. BOX #2676
Riverside, CA 92516
Tel: (760) 662-9668
About Mini Mania
Mini Mania Inc., d/b/a Sprintboostersales.com, owns and operates
automotive parts, accessories, and tire stores. On the Web:
https://minimania.com/
Mini Mania Inc. sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D. Cal. Case No. 24-22456) on June 4,
2024. In the petition filed by Jonathan Harvey, as president, the
Debtor reports total assets of $1,155,121 and total liabilities of
$3,312,513.
The Honorable Bankruptcy Judge Fredrick E Clement oversees the
case.
The Debtor is represented by Steven R. Fox, Esq.
MIR SCIENTIFIC: Gets Court Nod to Sell Assets to Iron Dome
----------------------------------------------------------
miR Scientific, LLC got the green light from the U.S. Bankruptcy
Court for the District of New Jersey to sell most of its assets to
Iron Dome Investments Ltd.
Iron Dome, a British Virgin Islands limited company, offered to buy
the assets for $750,000, "free and clear" of encumbrances. It will
also assume certain liabilities of miR.
The purchased assets are related to the operation of miR's
business, which is the development of non-invasive testing for
urological cancer.
Iron Dome's offer was selected as the winning bid for the assets
following a bidding process, which the court approved on March 22.
About miR Scientific
miR Scientific, LLC is a precision healthcare company committed to
improving public health by transforming cancer management globally.
Its proprietary miR Disease Management Platform was developed to
revolutionize the standard of value-based care for cancers and
initially focuses on urological cancers.
miR Scientific and affiliate Huminn, LLC filed Chapter 11 petitions
(Bankr. D.N.J. Lead Case No. 24-12769) on March 15, 2024. CEO Sam
Salman signed the petitions.
At the time of the filing, miR reported $1 million to $10 million
in assets and $10 million to $50 million in liabilities while
Huminn reported $100,001 to $500,000 in assets and $1 million to
$10 million in liabilities.
Judge Christine M. Gravelle oversees the cases.
Erin J. Kennedy, Esq., at Forman Holt, represents the Debtors as
legal counsel.
The U.S. Trustee for Regions 3 and 9 appointed an official
committee to represent unsecured creditors in the Debtors' Chapter
11 cases. The committee is represented by Venable, LLP.
MIRACLE RESTAURANT: Closes 2 Arby's Locations in Indiana
--------------------------------------------------------
Jake Foster of 99.5 WKDQ reports that Indiana Arby's to close as
franchisee files for bankruptcy
The franchisee company operates Arby's locations in five states and
has now filed for Chapter 11 bankruptcy.
I don't visit Arby's all that often, and when I do, it's usually
with a coupon. In the past, I've enjoyed their Classic Beef 'N
Cheddar, Curly Fries, Mozzarella Sticks, and even their shakes from
time to time. While Arby's isn't my first choice dining locale, it
is one of my wife's favorites, so having one close by has always
been a good thing. That said, some of Arby's locations in the
Hoosier State won't be around much longer.
It's no secret that inflation has impacted not only consumers but
also business owners across the nation. According to Nation's
Restaurant News, Louisiana-based Miracle Restaurant Group LLC has
filed for Chapter 11 bankruptcy. Currently, the company has 25
Arby’s locations spread across Indiana, Illinois, Texas,
Mississippi, and Louisiana. Nation's Restaurant News reported the
company cited inflation of commodities and labor expenses as their
primary reasons behind the move.
The company was able to sell three of their Indiana locations in
September 2023, with the proceeds being used to pay down debt.
However, Nation's Restaurant News reported attempts to sell its
restaurants in Illinois, Texas, and their remaining two restaurants
in Indiana were unsuccessful. This was attributed to declining
earnings, which made the restaurants "undesirable" to potential
buyers. The following were Miracle Restaurant Group LLC-operated
stores in Indiana, but it's unclear which have sold and which are
closed or will be closed.
* 3915 E Ridge Rd, Highland, IN 46322
* 4651 W 61st Ave, Hobart, IN 46342
* 8150 E Ridge Rd, Hobart, IN 46342
* 8100 Calumet Ave. Munster, IN 46321
* 700 W US Highway 30, Schererville, IN 46375
About Miracle Restaurant Group LLC
Miracle Restaurant Group LLC owns and operates a fast food
restaurant.
Miracle Restaurant Group LLC sought relief under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. E.D. La. Case No. 24-11158) on June
20, 2024. In the petition signed by Donald Moore, as managing
member, the Debtor reports estimated assets and liabilities between
$1 million and $10 million each.
Honorable Bankruptcy Judge Meredith S. Grabill oversees the case.
The Debtor is represented by:
Douglas S. Draper, Esq.
HELLER, DRAPER & HORN, LLC
650 Poydras Street
Suite 2500
New Orleans, LA 70130
Tel: 504-299-3300
Fax: 504-299-3399
Email: ddraper@hellerdraper.com
Debtor's
Financial
Advisor: PEAK FRANCHISE CAPITAL, LLC
MIRACLE RESTAURANT: Taps Heller Draper & Horn LLC as Counsel
------------------------------------------------------------
Miracle Restaurant Group, LLC seeks approval from the U.S.
Bankruptcy Court for the Eastern District of Louisiana to employ
Heller, Draper & Horn, L.L.C. as counsel.
The firm's services include:
a. advising the Debtor with respect to its rights, powers and
duties in the continued operation and management of its businesses
and property, and compliance with the Chapter 11 operating
guidelines and reporting requirements for Region 5;
b. preparing and pursuing confirmation of a plan of
reorganization and approval of a disclosure statement;
c. preparing legal documents and reviewing all financial
reports to be filed;
d. preparing responses to legal documents, which may be filed
by other parties;
e. appearing in court;
f. representing the Debtor in connection with obtaining
post-petition financing;
g. assisting in the negotiation and documentation of financing
agreements and related transactions;
h. investigating the nature and validity of liens asserted
against the property of the Debtor, and advising the Debtor
concerning the enforceability of said liens;
i. investigating and advising the Debtor concerning, and
taking such action as may be necessary to collect, income and
assets in accordance with applicable law, and the recovery of
property for the benefit of the Debtor's estate;
j. advising and assisting the Debtor in connection with any
potential property dispositions;
k. advising the Debtor concerning the assumption, assignment,
rejection, restructuring or recharacterization of executory
contracts and leases;
l. assisting the Debtor in reviewing, estimating and resolving
claims asserted against the estate;
m. commencing and conducting litigation necessary and
appropriate to assert rights held by the Debtor, protect assets of
the estate or otherwise further the goal of completing the Debtor's
successful reorganization; and
n. performing all other necessary legal services for the
Debtor.
The firm's hourly rates range from $350 to $500 for attorneys and
$200 for paralegals.
Heller Draper holds a retainer in the amount of $20,000.
As disclosed in court filings, Heller, Draper & Horn is a
"disinterested person" within the meaning of Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
Douglas S. Draper, Esq.
Heller, Draper, Patrick, Horn & Manthey, LLC
650 Poydras Street, Suite 2500
New Orleans, LA 70130
Phone: (504) 299-3300
Email: ddraper@hellerdraper.com
About Miracle Restaurant Group
Miracle Restaurant Group, LLC owns and operates a fast food
restaurant in Covington, La.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D. La. Case No. 24-11158) on June 20,
2024, with $1 million to $10 million in both assets and
liabilities. Donald Moore, managing member, signed the petition.
Judge Meredith S. Grabill presides over the case.
The Debtor tapped Douglas S. Draper, Esq., at Heller, Draper &
Horn, LLC as legal counsel and Peak Franchise Capital, LLC as
financial advisor.
NEVADA COPPER: Asks Court to Approve Bid Rules for Asset Sale
-------------------------------------------------------------
Nevada Copper, Inc. will ask the U.S. Bankruptcy Court for the
District of Nevada at a hearing on July 19 to approve the bid rules
governing the sale of substantially all assets of the company and
its affiliates.
The assets up for sale include the companies' going-concern
business, real property, inventory, and intellectual property.
The assets are being sold "free and clear" of liens, claims,
interests and encumbrances.
Under the bid procedures, the deadline for interested buyers to
place their bids on the assets is on Sept. 6, 2024, at 5:00 p.m.
(prevailing Pacific Time). Bidders are required to provide a cash
deposit in the amount equal to 10% of the purchase price to be
paid.
Within 20 days prior to the bid deadline, the companies may select
one or more qualified bidders to act as the stalking horse bidder.
A stalking horse bidder sets the price floor for bidding in an
auction.
An auction will be conducted on Sept. 10, at 12:00 p.m. (prevailing
Eastern Time) if the companies receive offers by the bid deadline.
The stalking horse bidder will receive a break-up fee and
reimbursement of expenses not to exceed 3% of the purchase price in
the event it is not selected as the winning bidder at the auction.
A court hearing to approve the sale to the winning bidder is
scheduled for Sept. 25, at 10:00 a.m. (prevailing Pacific Time).
Objections are due by Sept. 19, at 12:00 p.m. (prevailing Pacific
Time.
The companies have been in the business of mining copper and other
minerals. In the period leading up to the filing of their Chapter
11 cases, the companies operated under significant liquidity
constraints. In an effort to conserve liquidity, the companies have
suspended mining operations and the operation of their processing
plant as they pursue a sale of most of their assets.
About Nevada Copper
Nevada Copper, Inc. and affiliates have been in the business of
mining copper, and other minerals, and operating a processing plant
that refines copper ore into copper concentrate, with the bulk of
the Debtors' operations focused on their Pumpkin Hollow project,
which is located outside of Yerington, Nevada. The project, which
contains substantial mineral reserves and resources, including not
only copper, but gold, silver, and iron magnetite, consists of an
underground mine and processing facility, together with an open-pit
project that is in the pre-feasibility stage of development.
The Debtors sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. Lead Case No. 24-50566) on June 10, 2024.
In the petition signed by Gregory J. Martin, executive vice
president and chief financial officer, Nevada Copper disclosed
$500,000,001 to $1 billion in assets and $100 million to $500
million in liabilities.
Judge Hilary L. Barnes oversees the cases.
The Debtors tapped Allen Overy Shearman Sterling US, LLP as general
bankruptcy counsel; McDonald Carano, LLP as Nevada bankruptcy
counsel; AlixPartners, LLP as financial and restructuring advisor;
Torys, LLP as special Canadian and corporate counsel; Moelis &
Company, LLC as financial advisor and investment banker; and Epiq
Corporate Restructuring, LLC as notice and claims agent and
administrative advisor.
The U.S. Trustee for Region 17 appointed an official committee to
represent unsecured creditors in the Chapter 11 cases of Nevada
Copper, Inc. and Nevada Copper Corp.
NGP XI MIDSTREAM: S&P Assigns 'B' Issuer Credit Rating
------------------------------------------------------
S&P Global Ratings assigned a 'B' issuer credit rating to NGP XI
Midstream Holdings LLC (NGP Midstream). The outlook is stable.
At the same time, S&P assigned a 'B' issue-level rating and '3'
recovery rating to the senior secured term loan B. The '3' recovery
rating on the term loan indicates its expectation for meaningful
(50%-70%; rounded estimate: 50%) recovery in the event of a payment
default.
S&P said, "The stable outlook on NGP Midstream reflects our
forecast for interest coverage above 2.25x and debt to EBITDA below
4.5x in 2025 and 2026. We expect NGP Midstream to receive steady
distributions from investee Delaware G&P LLC.
"Our 'B' issuer credit rating on NGP Midstream reflects the
differentiated credit quality compared to its investee Delaware
G&P. NGP Midstream holds a 49.9% equity interest in Delaware G&P
and relies on distributions from the investee to service its $400
million term loan due in 2031 because it does not have other
substantive assets. As a result, we rate NGP Midstream under our
noncontrolling equity interest criteria (NCEI). As such, our view
on NGP Midstream's credit profile incorporates its financial
ratios, Delaware G&P's cash flow stability, its ability to
influence Delaware G&P's financial policy, and its ability to
liquidate its investment in Delaware G&P to repay the $400 million
term loan.
"We expect the company to receive steady distributions from
Delaware G&P LLC over the life of the term loan. The cash flows
have support from the contracted nature of Delaware G&P's assets.
About 80% of revenues at Delaware G&P are backed by fixed-fee
contracts. Delaware G&P has a diverse customer base, with about 85%
of the 2024 gross margin expected to come from investment-grade
upstream producers, and the remaining 15% comprising of
speculative-grade or unrated producers. The average remaining
contract term is approximately six years.
"That said, the majority of volumes are derived from long-term
acreage dedications. Delaware has some minimum volume commitments
representing 30% of total current system capacity. Given the
volumetric risk exposure from the acreage dedication backed
contracts, we limit our cash flow stability assessment to neutral.
"Our positive view of NGP Midstream's corporate governance and
financial policy is influenced by its significant governance rights
in Delaware G&P. Delaware G&P is required to distribute all
available cash quarterly to NGP Midstream and EnLink Midstream LLC.
As such, we believe Delaware G&P has an incentive to maintain
consistent or growing distributions. NGP Midstream has notable
influence, with two out of four board seats, effectively granting
it 50% of the voting rights. NGP Midstream's approval is required
for major decisions as long as it holds at least 25% equity stake
in Delaware G&P. Any key decisions, including additional debt
incurrence and budget changes, require NGP Midstream's approval,
and any adjustments to distributions from Delaware G&P require a
unanimous decision.
"We forecast that NGP Midstream's S&P Global Ratings adjusted debt
to EBITDA ratio will be about 4.5x in 2025, alongside an EBITDA
interest coverage ratio of about 2.4x. We foresee a positive trend,
with leverage decreasing to about 3.5x-4.0x in 2026. The term loan
has a mandatory amortization of 1% annually. The company's term
loan is also subject to a 100% excess cash flow sweep, decreasing
to 50% when leverage is below 5x, 25% when leverage is below 4x and
no cash sweep when it falls below 3x.
Through year-end 2025, NGP Midstream cannot make equity
distributions as it is required to use excess cash to fund a
capital expenditure (capex) reserve account or repay debt. The
funding of the reserve account will occur post debt service and
will be released at the earlier of either the approval decision
date for a potential growth project or Dec. 31, 2025. The cash from
the reserve account will be either disbursed for project funding or
released for term loan paydown if a growth project is not approved.
S&P's base case assumes that the capex reserve would be utilized to
pay down about $35 million-$40 million against the term loan at the
end of 2025.
S&P's view of NGP Midstream's ability to liquidate its investment
in Delaware G&P is negative because Delaware G&P is not publicly
traded.
The stable outlook reflects our expectation that NGP Midstream will
receive stable and steady cash flow from Delaware G&P. S&P said,
"We expect it will use distributions to fund the capex reserve over
the next six quarters. We forecast S&P Global Ratings-adjusted debt
to EBITDA of around 4.5x in 2025 and interest coverage above 2.25x
through the forecast period."
S&P could take a negative rating action if:
-- S&P expects NGP Midstream to maintain debt to EBITDA above 6x,
interest coverage approaches 1.5x, or liquidity deteriorates, which
could occur due to lower-than-anticipated distributions from
Delaware G&P; or
-- Credit quality at Delaware G&P deteriorates.
S&P could take a positive rating action on NGP Midstream if credit
quality at Delaware improves and the company maintains interest
coverage above 3x.
Environmental factors are a negative consideration in S&P's credit
rating analysis. NGP Midstream holds a 49.9% noncontrolling
interest in Delaware G&P LLC, which owns natural gas gathering and
processing assets in the Delaware basin. This exposes the company
to climate transition risks that could affect long-term gas
supplies or drilling activity of Delaware G&P's major shippers.
Other direct environmental risks relate to potential gas leakage
and damages to the environment.
NINE WEST: Leung's Discrimination Case v. Kasper Group Tossed
-------------------------------------------------------------
Judge Edgardo Ramos of the United States District Court for the
Southern District of New York dismissed with prejudice Alice Y.
Leung's case against Kasper Group LLC, a subsidiary of Nine West
Holdings, Inc, and Dino Varile, alleging discrimination under Title
VII, the New York City Human Rights Law, the New York State Human
Rights Law, and assault and battery.
On August 8, 2017, Ms. Leung filed her First Amended Complaint and
on September 13, 2017, the Court entered a discovery plan and
scheduling order.
On March 11, 2018, Defendants informed the District Court that Nine
West and certain of its subsidiaries, including defendant Kasper
Group, had voluntarily filed petitions for Chapter 11 bankruptcy
protection in the United States Bankruptcy Court for the Southern
District of New York.
On February 28, 2019, counsel for Defendants, writing solely on
behalf of Mr. Varile, informed the Court that he had independently
learned that Ms. Leung had filed for Chapter 13 Bankruptcy on
January 14, 2019, in the United States Bankruptcy Court for the
Eastern District of New York, and had appeared on the record for a
meeting of creditors before the Bankruptcy Trustee administering
her case on February 25, 2019. Counsel reported that in her sworn
testimony, Ms. Leung failed to disclose to the Bankruptcy Court her
claims against Mr. Varile or the Kasper Group, or her
representation by attorney Zach Holzberg of the Derek T. Smith Law
Group. Counsel further stated that he believed Ms. Leung had
submitted evidence to the Bankruptcy Court that contradicted
certain of her claims in this case.
On March 6, 2019, Mr. Holzberg sent a letter motion to inform the
District Court that on February 26, 2019, he had received an email
from Defendants' counsel indicating that Ms. Leung had filed for
Chapter 13 bankruptcy, which he had not previously been made aware
of. On March 8, 2019, the Court stayed the case pursuant to
Section 362(a) of the Bankruptcy Code.
On March 30, 2020, Defendants informed the District Court that the
Bankruptcy Court had ordered Ms. Leung's claim against the Kasper
Group be expunged and that her claims against the Kasper Group,
therefore, were permanently barred, with any attempt to prosecute
being a "violation of a plan injunction." The same day, Defendants
filed a letter requesting a pre-motion conference to discuss their
anticipated motion to dismiss Ms. Leung's individual claims against
Mr. Varile.
On May 10, 2024, the Court -- understanding that the Chapter 13
proceedings had concluded, without update from the parties --
directed the parties to file a status update. In their May 31
status report, the parties informed the Court Ms. Lueng's Chapter
13 bankruptcy appeal had been voluntarily dismissed with prejudice
on June 19, 2020, and the case was closed on May 26, 2021.
In her ruling, Judge Shelly C. Chapman ordered the dismissal of all
federal claims and barred Plaintiff from further pursuing her
claims against the Kasper Group. Additionally, counsel for Ms.
Leung advised the Court that their legal team had not spoken with
Ms. Leung since 2020, despite an email in 2022 advising her that
the claims against the Kasper Group had been expunged, and a
notification from counsel in 2022 that "failure to contact
us/cooperate would result in our discontinuance of her
representation."
At a status conference on June 26, 2024, the Court determined it
would dismiss the action for failure to prosecute under Federal
Rule of Civil Procedure 41(b).
According to the Court, there are no weaker sanctions that could
remedy Ms. Leung's failure to prosecute this case. Dismissal is
appropriate where, as in this case, a plaintiff "appears to have
abandoned the litigation," the Court notes.
A copy of the Court's decision dated July 9, 2024, is available at
https://urlcurt.com/u?l=CJr5CA
About Nine West Holdings
Nine West Holdings is a footwear, accessories, women's apparel, and
jeanswear company. The company is a wholesale partner to major
U.S. retailers and has international licensing arrangements
covering more than 1,200 points of sale around the world.
On April 6, 2018, Nine West Holdings, Inc., and 10 affiliates
sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No.
18-10947). Nine West estimated $500 million to $1 billion in
assets and $1 billion to $10 billion in liabilities as of the
bankruptcy filing.
The Hon. Shelley C. Chapman oversaw the case judge. Nine West
Holdings tapped as legal advisors Kirkland & Ellis LLP. The
Company's financial advisor was Lazard Freres & Co., and its
restructuring advisor was Alvarez & Marsal North America LLC.
Prime Clerk LLC served as the claims and noticing agent.
The Independent Directors tapped Munger, Tolles & Olson LLP as
counsel and Berkeley Research Group as financial advisor.
* * *
The Bankruptcy Court confirmed Nine West Holdings' Third Amended
Joint Plan of Reorganization in February 2019. The official
committee of unsecured creditors supported the Third Amended Plan.
The Third Amended Plan settled the claims against Sycamore and
placed other claims in the litigation trust. Nine West emerged
from bankruptcy in March 2019 as Premier Brands Group Holdings LLC.
NJ MOBILE: Mark Politan of Politan Law Named Subchapter V Trustee
-----------------------------------------------------------------
The U.S. Trustee for Regions 3 and 9 appointed Mark Politan, Esq.,
at Politan Law, LLC, as Subchapter V trustee for NJ Mobile
HealthCare, LLC.
Mr. Politan will be paid an hourly fee of $450 for his services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. Politan declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Mark J. Politan, Esq.
Politan Law, LLC
88 East Main Street #502
Mendham, NJ 07945
Cell: (973) 768-6072
Email: mpolitan@politanlaw.com
About NJ Mobile HealthCare
NJ Mobile HealthCare, LLC, a company in Mahwah, N.J., provides
compliance-focused, state-of the-art emergency medical services
(EMS) and ambulance transportation services.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D.N.J. Case No. 24-16239) on June 20, 2024,
with $1 million to $10 million in both assets and liabilities.
Louis V. Greco III, manager, signed the petition.
Tracy L. Klestadt, Esq. at Klestadt Winters Jureller Southard &
Stevens, LLP represents the Debtor as legal counsel.
OBRA CAPITAL: Moody's Withdraws 'Caa1' Corporate Family Rating
--------------------------------------------------------------
Moody's Ratings has withdrawn all ratings of Obra Capital, Inc.,
including the Caa1 corporate family rating, Caa1-PD probability of
default rating and Caa1 senior secured bank credit facilities. The
company has refinanced all outstanding obligations. Prior to the
withdrawal, the rating outlook was negative.
RATINGS RATIONALE
Moody's has decided to withdraw the ratings following a review of
the issuer's request to withdraw its ratings.
Obra is a Texas based alternative asset manager with $4.9 billion
in assets under management as of June 30, 2024. Established in
2009, the asset manager provides investment products and solutions
across four key verticals: insurance special solutions, structured
credit, asset-based finance, and longevity based investments.
OCUGEN INC: Board Approves PricewaterhouseCoopers as New Auditor
----------------------------------------------------------------
Ocugen, Inc. disclosed in a Form 8-K filed with the Securities and
Exchange Commission that on July 2, 2024, the Board of Directors of
the Company approved the appointment of PricewaterhouseCoopers LLP
as the Company's independent registered public accounting firm for
the fiscal year ending Dec. 31, 2024 as Ernst & Young LLP will
cease providing services following the filing of the Company's Form
10-Q for the quarter ending June 30, 2024.
As previously reported, the Audit Committee of the Board of
Directors of the Company authorized management to initiate a
strategic request-for-proposal process soliciting proposals from
accounting firms to provide audit services to the Company as its
independent registered public accounting firm for the fiscal year
ending Dec. 31, 2024. Management requested proposals from several
independent registered public accounting firms, including Ernst &
Young LLP, the Company's current independent registered public
accounting firm, in the process. As previously reported, EY
notified the Company of its decision to decline to participate in
the request-for-proposal process and to decline to stand for
re-election as the Company's independent registered public
accounting firm for fiscal year 2024, which decision was not the
result of any disagreement with the Company.
The Company said that during the two most recent fiscal years ended
Dec. 31, 2023 and 2022 and the subsequent interim period through
July 2, 2024, neither the Company nor anyone on its behalf
consulted with PwC with respect to (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
the Company's consolidated financial statements, and neither a
written report nor oral advice was provided to the Company that PwC
concluded was an important factor considered by the Company in
reaching a decision as to any accounting, auditing or financial
reporting issue, or (b) any matter that was either the subject of a
"disagreement" (as defined in Item 304(a)(1)(iv) of Regulation S-K
and the related instructions thereto) or a "reportable event" (as
described in Item 304(a)(1)(v) of Regulation S-K).
About Ocugen Inc.
Malvern, Pa.-based Ocugen, Inc. is a biotechnology company focused
on discovering, developing, and commercializing novel gene and cell
therapies, biologics, and vaccines that improve health and offer
hope for patients across the globe. The Company's technology
pipeline includes: Modifier Gene Therapy Platform, Novel Biologic
Therapy for Retinal Diseases, Regenerative Medicine Cell Therapy
Platform, and Inhaled Mucosal Vaccine Platform.
Philadelphia, Pennsylvania-based Ernst & Young LLP, the Company's
auditor since 2018, issued a "going concern" qualification in its
report dated April 16, 2024, citing that the Company has suffered
recurring losses from operations and has stated that substantial
doubt exists about the Company's ability to continue as a going
concern.
OK USA: Exits Its U.S. Business After Chapter 7 Filing
------------------------------------------------------
Thomas Lester of Furniture Today reports that British luxury
furnishings retailer exiting U.S. business.
British luxury home furnishings brand Oka has ceased operations in
the U.S., and its Oka USA subsidiary and certain of its affiliates
filed for Chapter 7 protection in the U.S. Bankruptcy Court for the
Northern District of Texas on June 11, 2024.
The filing is part of the London-based company's restructuring
plan, organized as a company voluntary arrangement, put in place to
reconfigure and reduce its cost base and restructure its balance
sheet. The CVA was approved by Oka's creditors on June 27, 2024.
With the CVA now approved, Investindustrial, the company's
shareholder, has agreed to provide further funding to the company
totaling £4 million to support the restructuring.
"We are extremely grateful for the overwhelming support of our
creditors in today's vote. The approval of the CVA will ensure Oka
has a solid foundation to support the future growth of the
business," CEO Mark Saunders said in a statement. "I know this has
been a difficult time for many of our team members and once again I
want to thank everyone for their hard work and support throughout
this process."
Outlined in the CVA, Oka is winding down its U.S. operations,
including closing stores in Houston, Dallas and Westport, Conn.,
and an e-commerce platform. In the statement, Oka officials noted
that U.S. operations have been loss-making since their inception,
and those issues have created working capital and liquidity issues
for the company. It noted that those issues, coupled with
post-COVID problems and a British cost-of-living crisis, prompted
the decision as it is opting to focus on its business in the U.K.
In the Chapter 7 filing, Oka USA reported estimated assets of
$10,000,001 to $50 million against liabilities of $10,000,001 to
$50 million owed to an estimated 1,000 to 5,000 creditors.
A report dated June 19, 2024 by the Westport (Conn.) Journal noted
that its local store had closed. On its U.S. website, it has the
following notice: "As a result of the Chapter 7 filing, we have
ceased all business operations in the US effective immediately. As
such at this time, we are no longer accepting new orders via our US
website or stores."
Oka was founded in 1999 by Viscountess Annabel Astor, Sue Jones and
Lucinda Waterhouse and was acquired by Italian investment firm
Investindustrial in 2018. That same year, it made its first U.S.
acquisition when it bought Wisteria.
About Oka USA
Oka USA is a British luxury home furnishings brand.
Oka USA sought relief under Chapter 7 of the U.S. Bankruptcy Code
(Bankr. N.D. Tex. Case No. 24-31706) on June 11, 2024. In its
petition, the Debtor reports estimated assets between $10,000,001
and $50 million each.
The Debtor is represented by:
R. Craig Martin, Esq.
DLA Piper LLP (US)
Wilmington DE 19801
Tel: (302) 468-5700
E-mail: craig.martin@us.dlapiper.com
OPGEN INC: Posts $386K Net Income in First Quarter
--------------------------------------------------
Opgen, Inc., filed with the Securities and Exchange Commission its
Quarterly Report on Form 10-Q reporting net income of $386,033 on
$168,149 of total revenue for the three months ended March 31,
2024, compared to a net loss of $5.74 million on $913,444 of total
revenue for the three months ended March 31, 2023.
As of March 31, 2024, the Company had $2.97 million in total
assets, $13.68 million in total liabilities, and a total
stockholders' deficit of $10.71 million.
On March 25, 2024, the Company entered into a securities purchase
agreement with David E. Lazar, pursuant to which the Company agreed
to sell 3,000,000 shares of Series E Convertible Preferred Stock to
Mr. Lazar at a price of $1.00 per share for aggregate gross
proceeds of $3.0 million. On March 25, 2024, Mr. Lazar paid
$200,000 at the initial closing in exchange for 200,000 shares of
Series E Preferred Stock. Mr. Lazar subsequently paid $200,000 and
$150,000 on
April 5, 2024 and April 23, 2024, respectively, in exchange for an
additional 350,000 shares of Series E Preferred Stock. Mr. Lazar
is expected to fund the remaining $2.45 million in the third
quarter of 2024, at which time he will receive the remaining 2.45
million shares of Series E Preferred Stock.
Opgen said, "Although Mr. Lazar is expected to provide the Company
with $3.0 million in total funding, the Company believes that
current cash will only be sufficient to fund operations into the
third quarter of 2024. This has led management to conclude that
there is substantial doubt about the Company's ability to continue
as a going concern. In the event the Company does not receive
additional funding from David E. Lazar or other investors or find a
reverse merger partner or other strategic transaction partner
before or during the third quarter of 2024, the Company will not
have sufficient cash flows and liquidity to finance its business
operations. Accordingly, in such circumstances, the Company would
be compelled to immediately reduce general and administrative
expenses until it is able to obtain sufficient financing. If such
sufficient financing is not received on a timely basis, the Company
would then need to pursue a plan to seek to be acquired by another
entity, cease operations and/or seek bankruptcy protection. There
can be no assurance that the Company will be able to identify or
execute on any of these alternatives on acceptable terms or that
any of these alternatives will be successful."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1293818/000182912624004635/opgeninc_10q.htm
About OpGen
OpGen, Inc. (Rockville, Md., U.S.A.) -- www.opgen.com --is a
precision medicine company harnessing the power of molecular
diagnostics and bioinformatics to help combat infectious disease.
The Company distributes molecular microbiology solutions that help
guide clinicians with more rapid and actionable information about
life threatening infections to improve patient outcomes, and
decrease the spread of infections caused by multidrug-resistant
microorganisms, or MDROs.
West Palm Beach, Florida-based Beckles & Co., Inc., the Company's
auditor since 2024, issued a "going concern" qualification in its
report dated June 3, 2024, citing that the Company has incurred
recurring losses from operations since inception and has stated
that substantial doubt exists about the Company's ability to
continue as a going concern.
OUTLOOK THERAPEUTICS: Receives UK Authorization for Eye Treatment
-----------------------------------------------------------------
Outlook Therapeutics, Inc. announced July 8, 2024, that the United
Kingdom Medicines and Healthcare products Regulatory Agency
("MHRA") has granted Marketing Authorization for LYTENAVA
(bevacizumab gamma), an ophthalmic formulation of bevacizumab for
the treatment of wet age-related macular degeneration (wet AMD) in
the United Kingdom. LYTENAVA (bevacizumab gamma) is the first and
only authorized ophthalmic formulation of bevacizumab for use in
treating wet AMD in the European Union and United Kingdom.
The Marketing Authorization Application submission to the MHRA was
completed under the new International Recognition Procedure, which
allows the MHRA to rely on a positive opinion by the European
Medicines Agency's Committee for Medicinal Products for Human Use
concerning an application for granting marketing authorization for
the same product in the European Union in the MHRA's authorization
decision.
About Outlook Therapeutics
Outlook Therapeutics, Inc., formerly known as Oncobiologics, Inc.
-- http://www.outlooktherapeutics.com-- is a biopharmaceutical
company working to launch the first ophthalmic formulation of
bevacizumab approved by the U.S. Food and Drug Administration for
use in retinal indications. The Company's goal is to launch
directly in the United States as the first and only approved
ophthalmic bevacizumab for the treatment of wet age-related macular
degeneration, or wet AMD, diabetic macular edema, or DME, and
branch retinal vein occlusion, or BRVO. The Company's plans also
include seeking approval and launching the product in the United
Kingdom, Europe, Japan and other markets, either directly or
through a strategic partner. If approved, the Company expects to
receive 12 years of regulatory exclusivity in the United States and
up to 10 years of market exclusivity in the European Union.
Philadelphia, Pennsylvania-based KPMG LLP, the Company's auditor
since 2015, issued a "going concern" qualification in its report
dated Dec. 22, 2023, citing that the Company has incurred recurring
losses and negative cash flows from operations and has an
accumulated deficit that raise substantial doubt about its ability
to continue as a going concern.
"The Company has incurred recurring losses and negative cash flows
from operations since its inception and has an accumulated deficit
of $593,385,368 as of March 31, 2024, which raises substantial
doubt about the Company's ability to continue as a going concern,"
said Outlook Therapeutics in its Quarterly Report for the period
ended March 31, 2024.
PAC BUILD: Seeks to Hire Choi & Ito as Bankruptcy Counsel
---------------------------------------------------------
Pac Build, LLC seeks approval from the U.S. Bankruptcy Court for
the District of Hawaii to hire Choi & Ito to handle its Chapter 11
case.
The hourly rates of the firm's attorneys are as follows:
Chuck C. Choi $450
Allison A. Ito $300
Prior to the petition date, the firm received $17,965.62 from the
Debtor for pre-bankruptcy services.
Chuck Choi, Esq., a partner at Choi & Ito, disclosed in a court
filing that the firm is a "disinterested person" as that term is
defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Chuck C. Choi, Esq.
Allison A. Ito, Esq.
Choi & Ito
700 Bishop Street, Suite 1107
Honolulu, HI 96813
Telephone: (808) 533-1877
Facsimile: (808) 566-6900
Email: cchoi@hibklaw.com
aito@hibklaw.com
About Pac Build, LLC
Pac Build, LLC is a construction company in Koloa, HI specializing
in high-end custom homes, commercial establishments, and
residential buildings.
Pac Build, LLC filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. D. Hawaii Case No.
24-00588) on July 1, 2024, listing $500,000 to $1 million in assets
and $1 million to $10 million in liabilities. The petition was
signed by Tyler Rodighiero, manager.
Judge Robert J Faris presides over the case.
Chuck C. Choi, Esq. at CHOI & ITO represents the Debtor as counsel.
PARK SQUARE COURT: Madison Equities Unit Files for Ch. 7 Bankruptcy
-------------------------------------------------------------------
Keith Schubert of Minneapolis/St. Paul Business Journal reports
that the owner of St. Paul's Park Square Court Building has filed
for Chapter 7 bankruptcy amidst a lawsuit by the building's lender
over an alleged unpaid $2 million loan.
The vacant building is owned by Madison Equities, the St. Paul
commercial real estate firm long owned and operated by the late
James Crockarell. Upon Crockarell's death in January, the ownership
of Madison Equities and its properties were transferred to his
wife, Rosemary Kortgard, who is listed as the debtor on the
building's bankruptcy filing.
The limited liability corporation that technically owns Park Square
Court filed for bankruptcy the day before a Ramsey County District
Judge heard arguments in a pending case over alleged unpaid $2
million commercial loan the building owed to lender Baldwin,
Wisconsin-based Pillar Bank.
Grotto Group of St. Paul LLC, which was a guarantor on the $2
million loan, also filed for bankruptcy with Kortgard as the listed
debtor. Both bankruptcies were filed on June 20, 2024.
In both cases, Kortgard is being represented by James Lamey, of
Oakdale-based Lamey Law Firm, who declined to comment on the
bankruptcies.
Chapter 7 is considered a liquidation bankruptcy, unlike the more
common Chapter 11 bankruptcy that allows for restructuring of debt
for businesses that seek to continue operating.
A Wednesday, June 26, 2024, court filing had Park Square Court's
value listed at less than $5 million compared to the more than $8
million owed in liens, mortgages and unpaid real estate taxes.
According to the filing, the property's broker, CBRE, has been
unsuccessfully marketing the building even without a listed price.
"There have been no offers in the last six months. Therefore, since
there is no equity in this property, the trustee asserts the
property is burdensome or of inconsequential value to the estate
and believes abandoning the property is in the best interest of
creditors," the filing read.
According to the original bankruptcy filing, there are between one
and 49 creditors owed between $1 and $10 million.
The Park Square Court Building is a 25,000-square-foot
Romanesque-style building located at 400 N. Sibley St. in the
Lowertown neighborhood within downtown St. Paul. It was built in
1889.
Kortgard is in the process of selling the entire Madison Equities
portfolio, which along with Park Square Court includes a number of
downtown St. Paul office buildings, such as Alliance Center, 375
Jackson Square, First National Bank Building and U.S. Bank Center.
About Park Square Court Building LLC
Park Square Court Building LLC a building owned by Madison
Equities.
Park Square Court Building LLC sought relief under Chapter 7 of the
U.S. Bankruptcy Code (Bankr. D. Minn. Case No. 24-31618) on June
20, 2024. In its petition, the Debtor reports between $1 million
and $10 million in liabilities.
Honorable Bankruptcy Judge Katherine A. Constantine oversees the
case.
The Debtor is represented by:
John D. Lamey, III, Esq.
Lamey Law Firm, P.A.
3900 LABORE RD
ST PAUL, MN 55110
PARLEMENT TECHNOLOGIES: U.S. Trustee Unable to Appoint Committee
----------------------------------------------------------------
The U.S. Trustee for Region 3 disclosed in a court filing that no
official committee of unsecured creditors has been appointed in the
Chapter 11 case of Parlement Technologies, Inc.
About Parlement Technologies
Parlement Technologies, Inc. is a technology services company in
Nashville, Tenn., serving businesses and organizations of all
sizes.
The Debtor filed Chapter 11 petition (Bankr. D. Del. Lead Case No.
24-10755) on April 15, 2024, with $10 million to $50 million in
both assets and liabilities. Craig Jalbert, chief restructuring
officer, signed the petition.
Judge Craig T. Goldblatt oversees the case.
The Debtor tapped Bielli & Klauder as bankruptcy counsel.
PETAWATT PROPERTIES: U.S. Trustee Unable to Appoint Committee
-------------------------------------------------------------
The U.S. Trustee for Region 2 disclosed in a court filing that no
official committee of unsecured creditors has been appointed in the
Chapter 11 case of Petawatt Properties, LLC.
About Petawatt Properties
Petawatt Properties, LLC is a vertically integrated energy,
facilities & service provider to high demand energy consumers, such
as blockchain crypto-miners, hydroponic operators, and data
centers.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D.N.Y. Case No. 24-30234) on March 29,
2024, with $1 million to $10 million in both assets and
liabilities. James Kucharski, managing director, signed the
petition.
Judge Wendy A. Kinsella presides over the case.
Melodye Hannes, Esq. at Melodye Hannes, Esq. represents the Debtor
as legal counsel.
PHASEBIO PHARMACEUTICALS: Gets Court Okay to Exit Chapter 11
------------------------------------------------------------
Clara Geoghegan of Law360 reports that pharmaceutical company
PhaseBio can exit Chapter 11 with wind-down plan.
A Delaware bankruptcy judge on Wednesday, June 26, 2024, gave her
blessing for pharmaceutical developer PhaseBio Pharmaceuticals Inc.
to liquidate its assets and wind down after settlement agreements
with creditors and a business partner cleared a path for it to exit
Chapter 11 after roughly 19 months.
About Phasebio Pharmaceuticals
PhaseBio Pharmaceuticals, Inc. -- https://www.phasebio.com/ -- is
focused on the development and commercialization of novel therapies
to treat orphan diseases, with an initial focus on cardiopulmonary
indications. It is based in Malvern, Pa.
PhaseBio Pharmaceuticals filed a petition for relief under Chapter
11 of the Bankruptcy Code (Bankr. D. Del. Case No. 22-10995) on
Oct. 24, 2022. In the petition filed by its chief executive
officer, Jonathan Mow, the Debtor reported $17,970,000 in assets
and $21,320,000 in debt as of Aug. 31, 2022.
Judge Laurie Selber Silverstein oversees the case.
The Debtor tapped Cooley LLP as lead bankruptcy counsel; Richards,
Layton & Finger, PA as Delaware bankruptcy counsel;
SierraConstellation Partners, LLC as financial advisor; KPMG, LLP
as tax consultant; and Miller Buckfire & Co. as investment banker.
Omni Agent Solutions is the claims, noticing and administrative
agent.
The U.S. Trustee for Region 3 appointed an official committee of
unsecured creditors in the Debtor's case on Nov. 3, 2022. McDermott
Will & Emery, LLP and FTI Consulting, Inc., serve as the
Committee's legal counsel and financial advisor, respectively.
PLAZA MARIACHI: Hires Evans Jones & Reynolds as Local Counsel
-------------------------------------------------------------
Plaza Mariachi LLC seeks approval from the U.S. Bankruptcy Court
for the Middle District of Tennessee to hire Evans, Jones &
Reynolds, PC as its local bankruptcy counsel.
The firm's services include:
a. rendering legal advice with respect to the rights, powers
and duties of Debtor in the management of its property;
b. investigating and, if necessary, instituting legal action
on behalf of Debtor to collect and recover assets of the estate of
Debtor;
c. preparing all necessary pleadings, orders and reports with
respect to this proceeding and to render all other necessary or
proper legal services;
d. assisting and counseling Debtor in the preparation,
presentation and confirmation of its disclosure statements and
plans of reorganization;
e. representing Debtors as may be necessary to protect its
interests; and
f. performing all other legal services that may be necessary
and appropriate in the general administration of Debtor's estate.
The firm's current standard hourly rates for Sean Wlodarcyk, Esq.,
who will provide primary local counsel services in this Bankruptcy
Case, is $350 per hour. The firm may charge for other attorneys at
$375 to $485 per hour and paralegals at $135 per hour.
Evans, Jones & Reynolds is a "disinterested person" under
Bankruptcy Code Secs. 101(14) and 327, according to court filings.
The firm can be reached through:
Sean C. Wlodarczyk, Esq.
EVANS, JONES & REYNOLDS, PC
401 Commerce Street, Suite 710
Nashville, TN 37219
Telephone: (615) 259-4685
Facsimile: (615) 256-4448
Email: Swlodarczyk@ejrlaw.com
About Plaza Mariachi LLC
Plaza Mariachi is a Single Asset Real Estate debtor (as defined in
11 U.S.C. Section 101(51B)).
Plaza Mariachi LLC filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. M.D. Tenn. Case No.
24-02441) on July 1, 2024, listing $10 million to $50 million in
both assets and liabilities. The petition was signed by Mahan Mark
Janbakhsh, member/manager.
Sean C. Wlodarczyk, Esq. at EVANS, JONES & REYNOLDS, PC represents
the Debtor as counsel.
PLAZA MARIACHI: Taps Burgess Law Group as Bankruptcy Counsel
------------------------------------------------------------
Plaza Mariachi LLC seeks approval from the U.S. Bankruptcy Court
for the Middle District of Tennessee to hire The Burgess Law Group
as its general bankruptcy counsel.
The firm's services include:
a. rendering legal advice with respect to the rights, powers
and duties of Debtor in the management of its property;
b. investigating and, if necessary, instituting legal action
on behalf of Debtor to collect and recover assets of the estate of
Debtor;
c. preparing all necessary pleadings, orders and reports with
respect to this proceeding and to render all other necessary or
proper legal services;
d. assisting and counseling Debtor in the preparation,
presentation and confirmation of its disclosure statements and
plans of reorganization;
e. representing Debtors as may be necessary to protect its
interests; and
f. performing all other legal services that may be necessary
and appropriate in the general administration of Debtor's estate.
The firm will be paid at these rates:
Todd Burgess $600 per hour
Janel M. Glynn $500 per hour
Attorneys $500 per hour
Paralegals $250 per hour
Burgess Law received an advanced fee retainer in the amount of
$25,000.
Burgess Law is a "disinterested person" under Bankruptcy Code Secs.
101(14) and 327, according to court filings.
The firm can be reached through:
Todd Burgess, Esq.
Janel M. Glynn, Esq.
The Burgess Law Group
3131 E. Camelback Rd., Suite 224
Phoenix, AZ 85016
Phone: (602) 806-2100
About Plaza Mariachi LLC
Plaza Mariachi is a Single Asset Real Estate debtor (as defined in
11 U.S.C. Section 101(51B)).
Plaza Mariachi LLC filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. M.D. Tenn. Case No.
24-02441) on July 1, 2024, listing $10 million to $50 million in
both assets and liabilities. The petition was signed by Mahan Mark
Janbakhsh, member/manager.
Sean C. Wlodarczyk, Esq. at EVANS, JONES & REYNOLDS, PC represents
the Debtor as counsel.
PREMIER CAR WASH: Sec. 341(a) Meeting in Subch. V Case on July 26
-----------------------------------------------------------------
Premier Car Wash Seneca LLC filed Chapter 11 protection in the
District of South Carolina. According to court filing, the Debtor
reports between $1 million and $10 million in debt owed to 1 and 49
creditors. The petition states funds will be available to
unsecured creditors.
A meeting of creditors under 11 U.S.C. Section 341(a) is slated for
July 26, 2024 at 11:45 a.m. at Zoom Spong Meeting ID: 653 860 5934
Passcode: 6043532837 Telephone: 1-803-702-0535.
About Premier Car Wash Seneca
Premier Car Wash Seneca LLC owns and operates a car wash business.
Premier Car Wash Seneca LLC sought relief under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. D. S.C. Case No. 24-02225) on June 20,
2024. In the petition filed by Ronald B. Jennings, Jr as managing
member, the Debtor reports estimated assets up to $50,000 and
estimated liabilities between $1 million and $10 million.
The Honorable Bankruptcy Judge Helen E. Burris oversees the case.
The Debtor is represented by:
Robert H. Cooper, Esq.
THE COOPER LAW FIRM
1610 Gowdeysville Road
Gaffney, SC 29340
Tel: 864-271-9911
Fax: 864-232-5236
E-mail: rhcooper@thecooperlawfirm.com
PRO CIV CONSTRUCTION: K. Clark Named Successor Subchapter V Trustee
-------------------------------------------------------------------
The U.S. Trustee for Region 6 appointed Katharine Battaia Clark of
Thompson Coburn, LLP as Successor Subchapter V trustee for PRO CIV
Construction, LLC.
Ms. Clark will be paid an hourly fee of $525 for her services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Ms. Clark declared that she is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Katharine Battaia Clark
Thompson Coburn, LLP
2100 Ross Avenue, Ste. 3200
Dallas, TX 75201
Office: 972-629-7100
Mobile: 214-557-9180
Fax: 972-629-7171
Email: kclark@thompsoncoburn.com
About PRO CIV and PRO NRG
PRO CIV Construction, LLC, a company in Dallas, Texas, offers
demolition services, storm water pollution prevention, mass
grading, clearing, soil stabilization, and aggregate installation.
PRO NRG Services, LLC, a Dallas-based affiliate, offers oil and gas
support services. It provides Mainline Pipelines up to 30",
Gathering Systems, Pipeline Integrity up to 48", Pipeline
Maintenance up to 48", Pipeline Rehabilitation up to 48", Pre-
construction Planning, Hydrostatic Testing, Horizontal Directional
Drilling, AC Mitigation, Roustabout, Restoration/Environmental
Services, and Road/Pad Construction.
The Debtors filed Chapter 11 petitions (Bankr. N.D. Texas Lead Case
No. 24-31811) on June 20, 2024. At the time of the filing, PRO CIV
reported $1 million to $10 million in both assets and liabilities
while PRO NRG reported $100,000 to $500,000 in assets and $1
million to $10 million in liabilities. Kyle Lenamond, manager,
signed the petitions.
Judge Stacey G. Jernigan presides over the cases.
Eric T. Haitz, Esq., at Bonds Ellis Eppich Schafer Jones, LLP
represents the Debtors as legal counsel.
PURDUE PHARMA: Court Tosses $6 Billion OxyContin Settlement
-----------------------------------------------------------
Greg Stohr of Bloomberg News reports that Supreme Court ends
oxyContin settlement, cracking Sackler shield.
The US Supreme Court tossed Purdue Pharma LP's $6 billion opioid
settlement, nixing a deal that would have funded opioid epidemic
relief efforts in exchange for protecting the company's billionaire
owners from lawsuits alleging they helped fuel the addiction
crisis.
The 5-4 ruling opens a new chapter of uncertainty for Purdue by
ruling that the accord would improperly shield its owners, members
of the billionaire Sackler family. They had agreed to give up
ownership of the company — the maker of painkiller OxyContin —
and pay as much as $6 billion.
More broadly, the ruling upends a key tool used by bankrupt
companies to settle lawsuits spawned by harmful or toxic products.
The tool, known as a non-consensual third-party release, forces
holdout plaintiffs to settle with companies if an agreement has
support from most of the victims. A Justice Department unit
monitoring bankruptcy courts opposed the Sackler settlement,
arguing such mechanisms are unlawful.
Congress authorized similar maneuvers decades ago in bankruptcies
related to asbestos lawsuits. Over time, though, lawyers and judges
have used the approach to address an array of corporate wrongdoing.
Similar deals have ended mass litigation over dangerous products
and waves of sex abuse claims against Catholic dioceses, the Boy
Scouts of America and USA Gymnastics.
"Someday, Congress may choose to add to the bankruptcy code special
rules for opioid-related bankruptcies as it has for
asbestos-related cases," Justice Neil Gorsuch wrote for the
majority. "Or it may choose not to do so. Either way, if a policy
decision like that is to be made, it is for Congress to make."
Purdue's settlement won overwhelming support from opioid crisis
victims who voted on it. But a vocal contingent remained bitterly
opposed to letting Purdue’s billionaire owners put the lawsuits
behind them.
Proponents have said victims won't get more money from the Sacklers
by taking them to trial; the Justice Department has said ending the
settlement could force the owners to shell out more money for
victims. Members of the Sackler family have denied wrongdoing and
said the settlement avoids expensive litigation that may not
succeed.
In dissent, Justice Brett Kavanaugh said Thursday’s decision is
devastating for more than 100,000 opioid victims and their
families.
"Opioid victims and other future victims of mass torts will suffer
greatly in the wake of today's unfortunate and destabilizing
decision," Kavanaugh said. "Only Congress can fix the chaos that
will now ensue."
Chief Justice John Roberts and Justices Sonia Sotomayor and Elena
Kagan joined Kavanaugh's dissenting opinion.
Purdue said after the ruling that the company will reach back out
to its creditors "and renew our pursuit of a resolution that
delivers billions of dollars of value for opioid abatement and
allows the company to emerge from bankruptcy."
The company said it is continuing to operate without interruption
to its business.
During arguments in December, lawyers representing Purdue and the
largest group of victims each said the company could be forced to
liquidate if the settlement is invalidated. A Justice Department
lawyer said the sides could return to the negotiating table to
hammer out a deal that doesn’t force objectors to give up their
claims against the Sacklers.
The Justice Department contended federal bankruptcy courts lack
power to insulate the Sacklers from lawsuits since they haven't
filed for protection themselves.
The Supreme Court in August halted implementation of the settlement
while the justices heard the appeal.
The families of the late Mortimer and Raymond Sackler said in a
statement Thursday they "remain hopeful about reaching a resolution
that provides substantial resources to help combat a complex public
health crisis."
"While we are confident that we would prevail in any future
litigation given the profound misrepresentations about our families
and the opioid crisis, we continue to believe that a swift
negotiated agreement to provide billions of dollars for people and
communities in need is the best way forward," the families said.
The case is Harrington v. Purdue Pharma, 23-124.
About Purdue Pharma LP
Purdue Pharma L.P. and its subsidiaries --
http://www.purduepharma.com/-- develop and provide prescription
medicines and consumer products that meet the evolving needs of
healthcare professionals, patients, consumers and caregivers.
Purdue's subsidiaries include Adlon Therapeutics L.P., focused on
treatment for Attention-Deficit/Hyperactivity Disorder (ADHD) and
related disorders; Avrio Health L.P., a consumer health products
company that champions an improved quality of life for people in
the United States through the reimagining of innovative product
solutions; Imbrium Therapeutics L.P., established to further
advance the emerging portfolio and develop the pipeline in the
areas of CNS, non-opioid pain medicines, and select oncology
through internal research, strategic collaborations and
partnerships; and Greenfield Bioventures L.P., an investment
vehicle focused on value-inflection in early stages of clinical
development.
Opioid makers in the U.S. are facing pressure from a crackdown on
the addictive drug in the wake of the opioid crisis and as state
attorneys general file lawsuits against manufacturers. More than
2,000 states, counties, municipalities and Native American
governments have sued Purdue Pharma and other pharmaceutical
companies for their role in the opioid crisis in the U.S., which
has contributed to the more than 700,000 drug overdose deaths in
the U.S. since 1999.
OxyContin, Purdue Pharma's most prominent pain medication, has been
the target of over 2,600 civil actions pending in various state and
federal courts and other fora across the United States and its
territories.
On Sept. 15 and 16, 2019, Purdue Pharma L.P. and 23 affiliated
debtors each filed a voluntary petition for relief under Chapter 11
of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No.
19-23649), after reaching terms of a preliminary agreement for
settling the massive opioid litigation. The Debtors' consolidated
balance sheet as of Aug. 31, 2019, showed $1.972 billion in assets
and $562 million in liabilities.
U.S. Bankruptcy Judge Robert Drain oversees the cases.
The Debtors tapped Davis Polk & Wardwell, LLP and Dechert, LLP, as
legal counsels; PJT Partners as investment banker; AlixPartners as
financial advisor; and Grant Thornton, LLP as tax structuring
consultant. Prime Clerk, LLC, is the claims agent.
Akin Gump Strauss Hauer & Feld LLP and Bayard, P.A., represent the
official committee of unsecured creditors appointed in the Debtors'
bankruptcy cases.
David M. Klauder, Esq., is the fee examiner appointed in the
Debtors' cases. The fee examiner is represented by Bielli &
Klauder, LLC.
* * *
U.S. Bankruptcy Judge Robert Drain in early September 2021 approved
a plan to turn Purdue into a new company (Knoa Pharma LLC) no
longer owned by members of the Sackler family, with its profits
going to fight the opioid epidemic. The Sackler family agreed to
pay $4.3 billion over nine years to the states and private
plaintiffs and in exchange for a lifetime legal immunity. The deal
resolves some 3,000 lawsuits filed by state and local governments,
Native American tribes, unions, hospitals and others who claimed
the company's marketing of prescription opioids helped spark and
continue an overdose epidemic.
Separate appeals to approval of the Plan have already been filed by
the U.S. Bankruptcy Trustee, California, Connecticut, the District
of Columbia, Maryland, Rhode Island and Washington state, plus some
Canadian local governments and other Canadian entities.
In early March 2022, Purdue Pharma reached a nationwide settlement
over its role in the opioid crisis, with the Sackler family members
boosting their cash contribution to as much as $6 billion. The
settlement was hammered out with attorneys general from the eight
states -- California, Connecticut, Delaware, Maryland, Oregon,
Rhode Island, Vermont and Washington -- and D.C. who had opposed
the previous settlement.
R&N SENECA LLC: Starts Subchapter V Bankruptcy Proceeding
---------------------------------------------------------
On June 20, 2024, R&N Seneca LLC filed Chapter 11 protection in the
District of South Carolina. According to court documents, the
Debtor reports between $1 million and $10 million in debt owed to 1
and 49 creditors. The petition states funds will be available to
unsecured creditors.
A meeting of creditors under 11 U.S.C. Section 341(a) is slated for
July 26, 2024 at 12:30 p.m. in Room Telephonically.
About R&N Seneca LLC
R&N Seneca LLC is a lessor of nonresidential buildings.
R&N Seneca LLC sought relief under Subchapter V of Chapter 11 of
the U.S. Bankruptcy Code (Bankr. D. S.C. Case No. 24-02206) on June
20, 2024. In the petition signed by Ronald B. Jennings, Jr., as
member, the Debtor reports estimated assets and liabilities between
$1 million and $10 million each.
The Debtor is represented by:
Christine E. Brimm, Esq.
BARTON BRIMM, PA
P.O. Box 14805
Myrtle Beach SC 29587
Tel: 803-256-6582
Email: cbrimm@bartonbrimm.com
RECESS HOLDINGS: Moody's Affirms 'B2' CFR, Outlook Stable
---------------------------------------------------------
Moody's Ratings affirmed Recess Holdings, Inc.'s B2 Corporate
Family Rating, B2-PD Probability of Default Rating and B2 rating on
the upsized senior secured first lien term loan due 2030 following
the proposed incremental borrowing to fund a dividend. The outlook
is stable.
Recess is issuing an incremental $205 million under the company's
senior secured first lien term loan and utilizing the proceeds to
distribute $200 million to Court Square and other shareholders. The
upsize is fungible with the existing term loan. The remaining
proceeds will fund transaction related fees. The transaction is
credit negative because it increases the company's debt burden to
fund a shareholder distribution and the step-up in interest expense
of around $20 million (Moody's estimates) will reduce free cash
flow. Moody's expect debt-to-EBITDA will increase to around 5.4x
pro forma for the transaction from 4.6x (Moody's adjusted for the
last 12 months ended March 2024).
Moody's affirmed the ratings as Moody's continue to believe that
the company's strong operating performance remains sufficient to
cover the step-up in interest and increased debt burden while
maintaining good free cash flow. Consumer demand across commercial
play and outdoor amenity end-markets is strong with the company's
backlog continuing to grow. Moody's expect that investment in the
outdoor recreation and amenities will remain solid over the next
two to three years because state, local, and school spending
remains stable and continues to be bolstered by federal stimulus
relating to the pandemic, land preservation and open spaces.
Moody's anticipate that debt-to-EBITDA will decline to around 4.4x
over the next 12-18 months from 5.4x pro forma for the incremental
debt raise in July 2024. But the increase in debt and interest
expense weakens the company's flexibility to manage an expected
moderation in end market demand when pandemic-driven stimulus
funding draws to a close. As a result, the company is weakly
positioned within the B2 rating category.
RATINGS RATIONALE
Recess' B2 CFR reflects the company's end market concentration in
schools and local municipalities, narrow geographic footprint and
sensitivity of its discretionary products to changes in the
economic cycle and government funding. The company's suite of
outdoor and indoor commercial recreational equipment and amenities
are generally high-cost with long life cycles that are deferrable
during periods when customers economize spending. Governance
factors are negative and include the company's aggressive financial
policies under private equity ownership including operating with
high financial leverage, the willingness to fund shareholder
distributions with debt, and a growth through acquisition strategy.
Recess has favorably funded many acquisitions through excess cash
flow that help to build scale and the product assortment. However,
Recess has used debt at times to fund larger acquisitions.
Recess is the leading manufacturer of commercial recreational and
outdoor amenities with meaningful scale compared to competitors in
this niche market although small relative to the broader consumer
durables universe. Demand for the company's products remains
healthy and is supported by solid school and municipal budgets,
which continue to benefit from good tax revenue and federal
stimulus. Recess' backlog continues to grow. An EBITDA margin in
the mid-to-high teens, positive free cash flow, and good liquidity
offers cushion to absorb temporary periods of weak demand. The
company's 2024 debt financed shareholder distributions across two
transactions is financially aggressive and is roughly doubling debt
and the interest burden. Good demand for outdoor recreational
equipment and favorable reinvestment of free cash flow through
acquisitions is expected to reduce debt-to-EBITDA to around 4.4x
over the next 12-18 months from 5.4x pro forma for the July 2024
term loan upsizing and dividend. Still, the current leverage is
materially higher than the 2.7x prior to January 2024 refinancing
transaction and weakly positions Recess within the B2 category. The
increased debt and interest expense limits the company's
flexibility within the rating to absorb an eventual end market
downturn. Moody's also see greater risk stemming from Recess'
acquisitive growth strategy. The increased debt leaves
significantly less cushion under the company's credit metrics to
pursue larger debt funded acquisitions.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The stable outlook reflects Moody's expectation that the company's
profitability will remain solid over the next 12 – 18 months and
that debt-to-EBITDA leverage will steadily decline to around 4.4x
over the next 12-18 months. The stable outlook also reflects
Moody's expectation for annual free cash flow generation of at
least $85 million and that Recess will maintain good liquidity.
The ratings may be upgraded if the company continues to generate
consistent organic revenue growth and a stable EBITDA margin and
sustains debt-to-EBITDA comfortably below 4.0x across economic
cycles that is backed by a financial policy that is commensurate
with these objectives. Moody's would also need greater comfort that
recent demand can be sustained as municipal and school budgets see
funding levels moderate and as pandemic related stimulus abates.
The ratings could be downgraded if a decline in new orders and the
backlog indicate the company's revenue and earnings could
deteriorate. Debt/EBITDA sustained above 5.5x, free cash flow to
debt below 4% or a deterioration in liquidity could also lead to a
downgrade. A debt financed acquisition or shareholder distribution
that increases leverage could also result in a downgrade.
ENVIRONMENTAL SOCIAL AND GOVERNANCE CONSIDERATIONS
Recess' CIS-4 indicates the rating is lower than it would have been
if ESG risk exposures did not exist. The CIS mainly reflects
governance risks stemming from concentrated decision making and an
aggressive financial strategy under private equity ownership. As
with most consumer durables companies, Recess faces environmental
concerns largely reflecting the company's use of natural capital
for raw materials, primarily steel, as well as carbon transition
risks and waste and pollution. Recess also faces social risks
related to exposure to health and safety and responsible production
risks inherent in a manufacturing environment.
The principal methodology used in these ratings was Consumer
Durables published in September 2021.
Headquartered in Chattanooga, TN, Recess Holdings, Inc.
manufactures commercial playground equipment, adult outdoor fitness
equipment, bleachers, playground surfacing, shade products, and
outdoor site amenities such as benches, tables, and waste
receptacles. It also sells a variety of products including swimming
pool hand rails, life guard chairs, bike racks, and exercise
equipment. The company generated revenue of $1.1 billion for the
twelve months ending March, 2024. Recess was acquired by private
equity firm Court Square Capital Partners in 2017.
REDBOX ENTERTAINMENT: Wins Lawsuit to Replace Board of Directors
----------------------------------------------------------------
Steven Church of Bloomberg News reports that HPS Investment
Partners LLC won a court fight to replace the board of directors of
bankrupt Redbox Entertainment Inc. and agreed to arrange a loan for
the DVD rental company's parent so that employees can be paid.
Under a tentative deal worked out Tuesday, July 2, 2024, HPS will
line up an $8 million loan for Redbox's publicly traded owner,
Chicken Soup for the Soul Entertainment Inc. In exchange, the
company will reinstate independent members to the board, lawyers
for both sides said in court Tuesday, July 2, 2024, afternoon.
About Redbox Entertainment Inc.
Redbox Entertainment Inc. operates as an entertainment company that
gives consumers access to a large variety of content across digital
and physical media. The Company operates digital streaming service
that provides both ad supported and paid movies from Hollywood
studios and content partners, as well as over 100 channels of free
ad supported streaming television (FAST). [BN]
Redbox Entertainment Inc. sought relief under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. D. Del. Case No. 24-11457) on June 29,
2024.
The Debtor is represented by:
Ricardo Palacio, Esq.
Ashby & Geddes, P. A.
ASHBY & GEDDES, P.A.
500 Delaware Avenue, 8th Floor
Wilmington, DE 19801
Tel: (302) 654-1888
Email: RPalacio@ashbygeddes.com
RESIDEO FUNDING: Moody's Rates New $500MM Unsecured Notes 'Ba3'
---------------------------------------------------------------
Moody's Ratings assigned a Ba3 rating to Resideo Funding Inc.'s
proposed $500 million backed senior unsecured note offering due
2032. All other ratings, including its Ba2 corporate family rating
and Ba1 senior secured ratings, as well as the stable outlook
remain unchanged.
The proceeds from Resideo's $500 million senior unsecured notes due
2032 will be used to retire a similar amount of its $1.1 billion
backed senior secured first lien term loan B due 2028. The
transaction is debt neutral in nature, and extends the company's
debt maturity profile toward 2032, which is a positive liquidity
consideration.
RATINGS RATIONALE
Resideo's Ba2 CFR is supported by: 1) its significant revenue scale
of pro forma $7.2 billion for the recent acquisition of Snap One
Holdings Corp. (Snap One) and its global footprint; 2) strong
market position as a provider of products and solutions in
residential HVAC markets and a distributor of security and fire
protection products in the professional installation channel; 3)
the value of the Honeywell Home brand, and the technological
expertise in manufacturing of integrated home and security
products; 4) conservative financial strategy that focuses on
deleveraging and demonstrates willingness to issue equity; 5) the
majority of revenue generated from the retrofit market, which is
generally less volatile than new construction; and 6) the variety
of distribution channels, including the proprietary ADI Global
Distribution business, and a diverse product offering.
At the same time, the credit profile is constrained by: 1) the
cyclicality of residential and non-residential end markets served
and the resulting exposure to variations in demand; 2) meaningful
quarterly reimbursement payments for Honeywell's environmental
obligations constraining free cash flow; 3) intense competition
within the company's product categories and the necessity of rapid
technological innovation; 4) the inherent low margin profile of the
distribution business; 5) shareholder-friendly actions given the
company's share repurchase program established in August 2023; and
6) risks related to acquisitions such as potential integration
challenges, difficulties with synergy realization, and debt
funding, although many of the company's acquisitions in the past
have been tuck-in in nature and funded with cash.
The stable outlook reflects Moody's expectation that over the next
12 to 18 months Resideo will seamlessly execute the integration of
the Snap One acquisition, generate solid operating results, and
gradually delever toward its stated goal of 2.0x net debt to
EBITDA.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
The ratings could be upgraded if the company continues to
demonstrate a track record of successful operations, while
continuing to build scale, and improves EBITA margin sustainably
above 10%. Disciplined financial policies, strong credit metrics
during any industry cycle, including leverage trending toward 2.5x,
robust free cash flow generation with free cash flow to debt
consistently above 10%, good liquidity and favorable end market
trends will also be important considerations for a higher rating.
The ratings could be downgraded if weakness in end markets causes
revenue and operating margin to contract significantly, or if the
company adopts aggressive financial policies or experiences
operational challenges. Additionally, leverage sustained above
3.5x, EBITA to interest coverage below 5.0x, free cash flow to debt
below 7% or liquidity deterioration could also result in a ratings
downgrade.
The principal methodology used in this rating was Manufacturing
published in September 2021.
Resideo is a provider of thermal, security and energy efficiency
products, software solutions and technologies for a connected home.
The company's Products and Solutions segment supplies comfort,
residential thermal solutions and security products, and its ADI
Global Distribution segment distributes security, AV and
low-voltage products. In the last twelve months ended March 30,
2024, Resideo generated $6.2 billion in revenue.
RITE AID CORP: Intends to Close More Stores in Chapter 11
---------------------------------------------------------
Morning Journal reports that More local Rite Aid stores to close.
The stores closing include East State Street and Southeast
Boulevard in Salem; the Rite Aid along Route 224 and Glenwood
Avenue in Boardman; Belmont Avenue and Gypsy Lane in Liberty
Township; and Route 46 and Champion Avenue in Champion.
The document filed in U.S. Bankruptcy court closures marks a total
of 13 local stores closing.
Virtually all locations in Ohio and Michigan are closing their
doors.
Other local stores that have closed or are closing include:
3527 Canfield Road, Youngstown
540 E Midlothian Blvd., Youngstown
5498 Mahoning Ave., Youngstown
1560 Parkman Rd. NW, Warren
2840 Youngstown Rd. SE, Warren
2154 Elm Road NE, Howland
614 Bradshaw Ave., East Liverpool
60 South Water St., Sharon
Rite Aid filed for Chapter 11 bankruptcy protection last year,
2023.
About Rite Aid
Rite Aid -- http://www.riteaid.com-- is a full-service pharmacy.
Its wholly owned subsidiaries include Elixir, Bartell Drugs and
Health Dialog. Elixir, Rite Aid's pharmacy benefits and Services
Company, consists of accredited mail and specialty pharmacies,
prescription discount programs and an industry leading
adjudication
platform to offer superior member experience and cost savings.
Health Dialog provides healthcare coaching and disease management
services via live online and phone health services. Regional chain
Bartell Drugs has supported the health and wellness needs in the
Seattle area for more than 130 years.
Rite Aid Corporation and various affiliated entities sought
protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr.
D.N.J. Lead Case No. 23-18993) on October 15, 2023. In the petition
signed by Jeffrey S. Stein, their chief executive officer and chief
restructuring officer, Rite Aid Corp. disclosed $7,650,418,000 in
total assets and $8,597,866,000 in total liabilities.
Judge Michael B. Kaplan oversees the jointly consolidated cases.
The Debtors tapped Kirkland & Ellis LLP and Kirkland & Ellis
International LLP as general bankruptcy counsel, Cole Schotz, P.C.
as local bankruptcy counsel, Guggenheim Partners as investment
banker, Alvarez & Marsal North America, LLC as financial, tax and
restructuring advisor, and Kroll Restructing Administration as
claims and noticing agent. Kramer Levin Naftalis & Frankel LLP,
serves as counsel to the Official Committee of Unsecured Creditors.
Kelley Drye & Warren LLP serves as co-counsel to the Committee.
A Tort Claimants Committee is represented by Akin Gump Strauss
Hauer & Feld LLP as lead counsel and Sherman, Silverstein, Kohl,
Rose & Podolsky, P.A as local counsel.
The Dann Law Firm, P.C.; Martzell, Bickford & Centola; Creadore Law
Firm PC; and Thompson Barney advise an Ad Hoc Committee comprised
of parents and guardians advocating on behalf of children born with
Neonatal Abstinence Syndrome, and who assert general unsecured
claims on account of the children's fetal opioid exposure.
DLA Piper LLP (US) serves as counsel to Medimpact Healthcare
Systems, Inc., the buyer of the Elixir pharmacy benefits management
business. Greenberg Traurig, LLP, and Choate Hall & Stewart LLP
serve as co-counsel to Bank of America, N.A., the administrative
agent for the prepetition first lien lenders and the DIP lenders.
Paul, Weiss, Rifkind, Wharton & Garrison LLP and Fox Rothschild LLP
represent the Ad Hoc Group of Secured Noteholders. FTI Consulting
and Evercore is serving or served as financial advisors to the
bondholders.
RITE AID: Wants Maryland Chapter 11 Lawsuit Dismissed
-----------------------------------------------------
Rick Archer of Law360 Bankruptcy Authority reports that Rite Aid to
seek dismissal of Maryland Chapter 11 suit.
Thursday's, June 27, 2024, Chapter 11 plan confirmation hearing for
Rite Aid will open with arguments on whether the drugstore chain
can use its bankruptcy to escape fraud claims lodged by the state
of Maryland over the company's opioid sales.
About Rite Aid
Rite Aid -- http://www.riteaid.com-- is a full-service pharmacy
that improves health outcomes. Rite Aid is defining the modern
pharmacy by meeting customer needs with a wide range of vehicles
that offer convenience, including retail and delivery pharmacy, as
well as services offered through our wholly owned subsidiaries,
Elixir, Bartell Drugs and Health Dialog. Elixir, Rite Aid's
pharmacy benefits and services company, consists of accredited
mail
and specialty pharmacies, prescription discount programs and an
industry leading adjudication platform to offer superior member
experience and cost savings. Health Dialog provides healthcare
coaching and disease management services via live online and phone
health services. Regional chain Bartell Drugs has supported the
health and wellness needs in the Seattle area for more than 130
years. Rite Aid employs more than 6,100 pharmacists and operates
more than 2,100 retail pharmacy locations across 17 states.
The Debtors sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D.N.J. Lead Case No. 23-18993) on Oct. 15,
2023. In the petition signed by Jeffrey S. Stein, chief executive
officer and chief restructuring officer, Rite Aid disclosed
$7,650,418,000 in total assets and $8,597,866,000 in total
liabilities.
Judge Michael B. Kaplan oversees the cases.
The Debtors tapped Kirkland & Ellis LLP and Kirkland & Ellis
International LLP as general bankruptcy counsel, Cole Schotz, P.C.,
as local bankruptcy counsel, Guggenheim Partners as investment
banker, Alvarez & Marsal North America, LLC as financial, tax and
restructuring advisor, and Kroll Restructuring Administration as
claims and noticing agent.
SEMILEDS CORP: Inks 6th Amendment to Loan Agreement with CEO Doan
-----------------------------------------------------------------
SemiLEDs Corporation disclosed in a Form 8-K filed with the
Securities and Exchange Commission on July 8, 2024, that Company
entered into a sixth amendment to a secured loan agreement with
Trung Doan, its chairman and chief executive officer. On Jan. 8,
2019, the parties entered into the Loan Agreement with an aggregate
amount of $1.7 million and an annual interest rate of 8%.
The Sixth Amendment amends the Loan Agreement to permit, upon the
mutual agreement of the Company and Trung Doan, the Company to
repay a portion of the principal amount or accrued interest under
the Loan Agreement, by issuing shares of the Company's common stock
to Trung Doan as partial repayment of the Loan Agreement at a price
per share equal to the closing price of the Company's common stock
immediately preceding the business day of the payment notice date.
All other terms and conditions of the Loan Agreement, as amended by
the Sixth Amendment, remain the same.
The Loan Agreement is secured by a second priority security
interest on the Company's headquarters building. The maturity date
of the Loan Agreement was Jan. 14, 2021. On Jan. 16, 2021, the
maturity date of the Loan Agreement was extended with same terms
and interest rate for one year to Jan. 15, 2022, and on Jan. 14,
2022, the maturity date of the Loan Agreement was extended again
with same terms and interest rate for one more year to Jan. 15,
2023. On Jan. 13, 2023, the maturity date of the Loan Agreement
was further extended with same terms and interest rate for one year
to Jan. 15, 2024. On Jan. 7, 2024, the Company amended the Loan
Agreement to extend the maturity date to Jan. 15, 2025. On Feb. 9,
2024, the Company (i) amended the Loan Agreement to permit the
Company to repay up to $800,000 of principal under the Loan
Agreement by issuing shares of the Company's common stock and (ii)
elected to prepay $800,000 of loan principal by delivering 629,921
shares of the Company's common stock to Mr. Doan, based on the
closing price of $1.27 per share on Feb. 8, 2024.
About SemiLEDs
Headquartered in Miao-Li County, Taiwan, R.O.C., SemiLEDs --
http://www.semileds.com-- develops, manufactures and sells light
emitting diode (LED) chips, LED components, LED modules and
systems. The Company's products are used for general specialty
industrial applications, including ultraviolet, or UV, curing of
polymers, LED light therapy in medical/cosmetic applications,
counterfeit detection, LED lighting for horticulture applications,
architectural lighting and entertainment lighting.
Diamond Bar, California-based KCCW Accountancy Corp., the Company's
auditor since 2019, issued a "going concern" qualification in its
report dated Nov. 27, 2023, citing that the Company incurred
recurring losses from operations and has an accumulated deficit,
which raises substantial doubt about its ability to continue as a
going concern.
The Company suffered losses from operations of $3.4 million and
$3.2 million and used net cash in operating activities of $984,000
and $1.5 million for the years ended Aug. 31, 2023 and 2022,
respectively. The Company said these facts and conditions raise
substantial doubt about the Company's ability to continue as a
going concern, even though gross profit on product sales was $1.0
million for the year ended Aug. 31, 2023 compared to $1.4 million
for the year ended Aug. 31, 2022. Loss from operations for the
three and six months ended Feb. 29, 2024 were $832,000 $1.7
million, respectively. Net cash used in operating activities for
the six months ended Feb. 29, 2024 was $679,000. Moreover, at Feb.
29, 2024, the Company's cash and cash equivalents had decreased to
$1.6 million. However, management believes that it has developed a
liquidity plan that, if executed successfully, should provide
sufficient liquidity to meet the Company's obligations as they
become due for a reasonable period of time, and allow the
development of its core business.
SEMILEDS CORP: Reports Q3 2024 Results; Engages Financial Advisor
-----------------------------------------------------------------
SemiLEDs Corporation announced July 8, 2024, its financial results
for the third quarter of fiscal year 2024, ended May 31, 2024.
Revenue for the third quarter of fiscal 2024 increased to $1.3
million, compared to $886,000 in the second quarter of fiscal 2024.
GAAP net loss attributable to SemiLEDs stockholders for the third
quarter of fiscal 2024 decreased to $319,000, or $(0.06) per
diluted share, compared to a net loss of $559,000, or $(0.11) per
diluted share, in the second quarter of fiscal 2024.
GAAP gross margin for the third quarter of fiscal 2024 increased to
41%, compared to 13% for the second quarter of fiscal 2024.
Operating margin for the third quarter of fiscal 2024 was negative
36%, compared with negative 94% for the second quarter of fiscal
2024. The Company's cash and cash equivalents were $1.7 million at
May 31, 2024, compared to $1.6 million at the end of the second
quarter of fiscal 2024.
The Company expects revenue for the fourth quarter ending Aug. 31,
2024 to be approximately $1.0 million +/- 10%.
The Company has engaged Roth Capital Partners, LLC as the Company's
financial advisor to explore potential strategic alternatives.
A full-text copy of the press release is available for free at:
https://www.sec.gov/Archives/edgar/data/0001333822/000095017024081935/leds-ex99_1.htm
About SemiLEDs
Headquartered in Miao-Li County, Taiwan, R.O.C., SemiLEDs --
http://www.semileds.com-- develops, manufactures and sells light
emitting diode (LED) chips, LED components, LED modules and
systems. The Company's products are used for general specialty
industrial applications, including ultraviolet, or UV, curing of
polymers, LED light therapy in medical/cosmetic applications,
counterfeit detection, LED lighting for horticulture applications,
architectural lighting and entertainment lighting.
Diamond Bar, California-based KCCW Accountancy Corp., the Company's
auditor since 2019, issued a "going concern" qualification in its
report dated Nov. 27, 2023, citing that the Company incurred
recurring losses from operations and has an accumulated deficit,
which raises substantial doubt about its ability to continue as a
going concern.
The Company suffered losses from operations of $3.4 million and
$3.2 million and used net cash in operating activities of $984,000
and $1.5 million for the years ended Aug. 31, 2023 and 2022,
respectively. The Company said these facts and conditions raise
substantial doubt about the Company's ability to continue as a
going concern, even though gross profit on product sales was $1.0
million for the year ended Aug. 31, 2023 compared to $1.4 million
for the year ended Aug. 31, 2022. Loss from operations for the
three and six months ended Feb. 29, 2024 were $832,000 $1.7
million, respectively. Net cash used in operating activities for
the six months ended Feb. 29, 2024 was $679,000. Moreover, at Feb.
29, 2024, the Company's cash and cash equivalents had decreased to
$1.6 million. However, management believes that it has developed a
liquidity plan that, if executed successfully, should provide
sufficient liquidity to meet the Company's obligations as they
become due for a reasonable period of time, and allow the
development of its core business.
SIGNAL RELIEF: Hires Buchanan Ingersoll as Litigation Counsel
-------------------------------------------------------------
Signal Relief, Inc. seeks approval from the U.S. Bankruptcy Court
for the District of Utah to hire Buchanan Ingersoll & Rooney PC as
special litigation counsel.
The firm's services include:
(a) defending against any challenges to the Debtor's
intellectual property rights;
(b) prosecuting any infringement claims related to the
Debtor's intellectual property;
(c) advising on intellectual property strategy and
protection;
(d) assisting with any inter parties review (IPR) proceedings
before the United States Patent and Trademark Office; and
(e) providing any other intellectual property litigation
services as reasonably requested by the Debtor in connection with
its Chapter 11 Case.
The firm will be paid at these rates:
Todd Walters: $1,150 per hour
Roger Lee: $915 per hour
Andrew Cheslock $845 per hour
James Moore $835 per hour
Mythili Markowski $800 per hour
Sam Harrod $355 per hour
Brandon Drennen $340 per hour
Buchanan Ingersoll is not a disinterested person within the meaning
of Section 101(14) of the Code and Bankruptcy Rule 2014 because
Buchanan Ingersoll holds a small prepetition claim of $4,192.50.
The firm can be reached through:
William Garvin, Esq.
Roger H. Lee, Esq.
Buchanan Ingersoll & Rooney PC
1737 King Street, Suite 500
Alexandria, VA 22314-2727
Tel: (703) 836-6620
Fax: (703) 836-2021
Email: william.garvin@bipc.com
Email: roger.lee@bipc.com
About Signal Relief, Inc.
Signal Relief, Inc. is a manufacturer of a pain relief patch that
reduces pain by focusing on the body's electrical impulses.
Signal Relief, Inc. filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. D. Utah Case No.
24-22947) on June 14, 2024, listing $1,198,072 in assets and
$3,341,600 in liabilities. The petition was signed by Daniel
Marirott as CEO.
Judge Joel T. Marker presides over the case.
Darren Neilson, Esq. at PARSONS BEHLE AND LATIMER represents the
Debtor as counsel.
SOUTH HILLS: Committee Taps Province LLC as Financial Advisor
-------------------------------------------------------------
The official committee of unsecured creditors of South Hills
Operations, LLC and its affiliates seeks approval from the U.S.
Bankruptcy Court for the Western District of Pennsylvania to employ
Province, LLC as its financial advisor in these chapter 11 cases.
Province's standard hourly rates are:
Managing Directors and Principals $870 - $1,450
Vice Presidents, Directors,
and Senior Directors $690 - $950
Analysts, Associates,
and Senior Associates $370 - $700
Other / Para-Professional $270 - $410
Paul Navid, managing director at Province, LLC, disclosed in a
court filing that the firm is a "disinterested person" as the term
is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Paul Navid
Province, LLC
2360 Corporate Circle, Suite 340
Henderson, NV 89074
Tel: (702) 685-5555
Email: pnavid@provincefirm.com
About South Hills Operations, LLC
South Hills Operations, LLC and its affiliates operate 13 skilled
nursing facilities in Pennsylvania. While they do not have
identical ownership, there is substantial common ownership among
the various debtor entities, and they are affiliates of one
another.
The Debtors filed Chapter 11 petitions (Bankr. W.D. Pa. Lead Case
No. 24-21217) on May 17, 2024, with $1 million to $10 million in
assets and $10 million to $50 million in liabilities.
Judge Carlota M. Bohm oversees the cases.
The Debtors tapped Whiteford Taylor & Presto and Bass, Berry &
Sims, PLC as legal counsels; Ankura Consulting, LLC as
restructuring advisor; and Blueprint Healthcare Real Estate
Advisors, LLC and Cummings and Co. Realtors, LLC as financial
advisors.
The U.S. Trustee for Region 3 appointed an official committee to
represent unsecured creditors in the Debtors' Chapter 11 cases.
SRX ENTERPRISES: Seeks to Sell Property to MB Laurel for $1.7MM
---------------------------------------------------------------
SRX Enterprises, LLC asked the U.S. Bankruptcy Court for the
Central District of California to approve the sale of its real
property located at 5026 Laurel Canyon Blvd., Valley Village,
Calif.
The company is selling the property to MB Laurel, LLC, a California
limited liability company, or assignee.
The sale price will be $1.7 million cash, with no contingencies.
This is in line with the tax assessor's assessment of value, which
was $1.5 million and SRX's estimate of value, which was up to $2
million.
The sale will be immediate and not subject to overbid. SRX has not
been contacted by any potential overbidder, according to the
company's attorney, Henry Paloci III, Esq.
SRX will use the proceeds from the sale to, among other things, pay
all creditors in full.
A court hearing to approve the proposed sale is scheduled for July
19.
About SRX Enterprises
SRX Enterprises, LLC is primarily engaged in renting and leasing
real estate properties. The company is based in Valley Village,
Calif.
SRX Enterprises filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. C.D. Calif. Case No.
23-11825) on Dec. 26, 2023, with $1 million to $10 million in both
assets and liabilities. R. Douglas Spiro, manager, signed the
petition.
Judge Martin R. Barash oversees the case.
Henry D. Paloci III, Esq., at Henry D. Paloci III, PA represents
the Debtor as bankruptcy counsel.
SSME SERVICES: Mark Politan Named Subchapter V Trustee
------------------------------------------------------
The U.S. Trustee for Regions 3 and 9 appointed Mark Politan, Esq.,
at Politan Law, LLC, as Subchapter V trustee for SSME Services,
LLC.
Mr. Politan will be paid an hourly fee of $450 for his services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. Politan declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Mark J. Politan, Esq.
Politan Law, LLC
88 East Main Street #502
Mendham, NJ 07945
Cell: (973) 768-6072
Email: mpolitan@politanlaw.com
About SSME Services
SSME Services, LLC is a health care services provider in Mahwah,
N.J.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D.N.J. Case No. 24-16241) on June 20, 2024,
with up to $50,000 in assets and up to $10 million in liabilities.
Louis V. Greco III, manager, signed the petition.
Judge John K. Sherwood presides over the case.
Tracy L. Klestadt, Esq., at Klestadt Winters Jureller Southard &
Stevens, LLP represents the Debtor as legal counsel.
STAR HOLDING: Moody's Assigns 'B2' CFR, Outlook Stable
------------------------------------------------------
Moody's Ratings assigned new public ratings to Star Holding LLC,
including a B2 Corporate Family Rating, a B2-PD Probability of
Default Rating, and a B2 rating to its proposed $775 million backed
senior secured term loan B2 and $175 million backed senior secured
revolving credit facility ratings. The outlook is stable.
Star Holding is acquiring US Silica Holdings, Inc. (US Silica) and
will use the proceeds of the proposed term loan to repay debt of
the target company and partially cover the acquisition costs. The
Term Loan will be guaranteed by US Silica Holdings, Inc., and its
operating subsidiaries and secured by the assets of the guarantors.
Existing ratings on US Silica Company, Inc. (B1 stable) will be
withdrawn once the acquisition closes and its rated debt is no
longer outstanding.
Star Holding is expected to issue additionally $350 million of
other secured debt as part of the acquisition of US Silica; this
incremental debt is expected to rank first-lien Pari Passu to the
Term Loan and bank facility; the total amount of secured debt will
not exceed $1,125 million at closing. The company could elect to
upsize the Term Loan to fund the full amount of $1,125 million.
"The ratings reflect Star Holding's proforma capital structure,
expected positive free cash flows supported on its strong market
position and, status as a private company with higher tolerance for
debt leverage," commented Giancarlo Rubio, a Moody's Ratings senior
analyst.
RATINGS RATIONALE
Star Holding's Corporate Family Rating of B2 reflects the company's
exposure to cyclical end markets, including significant earnings
exposure to the oil and gas industry, as well as the highly
competitive nature of its business. At the same time, Moody's take
into consideration the company's (i) solid market position as one
of the largest providers of industrial minerals and frac sand in
the US, (ii) its significant and strategically located footprint,
(iii) distribution capability and (iv) its broad customer base. The
ratings also reflect the company's status as a private-equity owned
company, the proposed increase in debt and leverage and a degree of
uncertainty about the future business profile, with potential
divestment of the oil and gas segment provided for in the credit
documentation.
Exposure to cyclical demand
The company's Oil & Gas Proppants (O&G) business segment accounts
for more than 60% of revenues and reported gross margin. The
company's products are used for well completions as such market
demand is directly related to new drilling and completion; these
activities are highly dependent on fluctuations in oil and gas
prices. Demand for proppants can change quickly since US shale
operators tend to adjust production activity in step with volatile
commodity prices. Pricing for proppant products reflect this
dynamic.
The company's Industrial & Specialty Products (ISP) segment is
exposed to other cyclical industries like construction and
automotive; however sales in this segment have been significantly
more stable given diversification across end markets.
Strong market position
The company is a leading supplier in both of its segments having
long standing commercial relationship with its customers. The
company serves the West Texas market, its largest O&G margin
contributor, through cost-competitive in-basin mines. The
industrial segment is supplied through a national network of mines
and processing plants. The company has the ability to tailor its
products to the specific processes of its clients. Proximity to
clients and value added supply support long term relationship with
clients.
Elevated financial leverage
Star Holding's proforma leverage is expected to reach around 3x by
year end 2024. Debt quantum is relatively high considering sales
cyclicality and potential for earnings volatility. Leverage metrics
could increase significantly in a downcycle affecting financial
flexibility. Moreover the credit agreement will allow the company
to divest its Oil and Gas business and not use the proceeds to
reduce debt, provided the leverage remains below 5.5x Net Debt/
EBITDA level, allowing the proceeds to be distributed to
shareholders. Covenants under the RCF also provide significant
headroom from the closing leverage. Management plans to use excess
cash flow to fund capex and reduce debt; however there isn't a
specific debt target. Moreover leverage could be impacted as result
of potential dividend recaps or acquisitions.
Free cash flow to remain positive
Moody's expect the company will continue generating positive cash
flows in the next two years supported by current scale, acceptable
margins and limited capex needs. This expectation doesn't
incorporate material acquisitions or large dividend distributions
since management has stated they will prioritize growth capex
projects and debt reduction after the closing of the transaction.
Star Holding's average Adj. EBITDA margin was 23% in 2019 – 2023;
and the company expects to further reduce fixed costs in its
logistic business to support margins in the oil and gas segment.
Annual capital investment is projected not to exceeds $65 million,
mostly concentrated in the ISP segment in line with company's plan
to develop more value added products. Management expects the
contribution margin of the O&G segment to decline from peak levels
achieved in 2023, while the contribution margin of the ISP segment
will gradually improve.
The stable outlook reflects Moody's expectation that the company
will continue to generate positive free cash flow in 2024 and 2025,
despite a modest contraction in earnings in the O&G segment.
Moody's expect Star Holding to maintain good liquidity supported by
$175 million revolver credit facility (RCF), to be fully available
at closing, and by positive free cash flow generation in 2024-25.
The terms of the RCF include a springing leverage covenant based on
facility utilization, requiring net first lien leverage to remain
below 5.5x or below 9.2x after the sale of the O&G segment. Moody's
expect the company to remain in compliance with covenants through
2025. The company also projects to maintain a cash balance of
around $25 million in the following years.
Star Holding's proposed Term Loan is rated B2, at the same level of
the CFR, reflecting that the credit facility will be secured by
first priority security interests in substantially all material
assets of the borrower, its Parent (Star Parent Holding I LLC) and
its subsidiary guarantors (US Silica Holdings, Inc. and other
subsidiaries). The B2 Term-Loan rating already incorporates the
assumption that the company will issue Total Pari first-lien debt
for $1,125 million at closing of the acquisition.
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 $320
million and 100% of consolidated EBITDA, plus amounts subject to
3.40x first lien net leverage ratio. There is an inside maturity
sublimit up to the greater of $320 million and 100% of LTM EBITDA.
-- There are no "blocker" provisions which prohibit the transfer
of specified assets to unrestricted subsidiaries.
-- There are no protective provisions restricting an up-tiering
transaction. Amounts up to 100% of unused capacity from certain
Restricted Payment RP carve-outs may be reallocated to incur debt.
Environmental, Social, and Governance Considerations
Star Holding's CIS-4 credit impact score primarily reflects the
company's exposure to heighten governance risks stemming from its
status as a private company owned by a financial sponsor, as well
as its new financial policy and tolerance for higher leverage.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
An upgrade of B2 CFR could be considered if Star Holding sustains
leverage (debt/EBITDA) below 3x, maintains positive free cash flow
even on the down cycle, reduces exposure to volatile industries.
The ratings could be downgraded if debt/EBITDA rises above 5x on a
sustained basis, including as a result of the reduction in scale;
or if its liquidity position deteriorates or free cash flow becomes
negative.
Based in Katy, Texas, Star Holding LLC and its subsidiaries
operates silica, diatomaceous earth and specialty clay mining and
processing facilities. It is one of the largest producers of
commercial silica and engineered materials derived from minerals in
North America. The company has two operating segments Oil and Gas
Proppants (O&G, representing about 61% of total revenues) and
Industrial & Specialty Products (ISP, with about 39% of revenues).
The principal methodology used in these ratings was Building
Materials published in September 2021.
STEWARD HEALTH: Potential Buyers Withdraw Planned Group Sale
------------------------------------------------------------
Molly Farrar of Boston.com reports that Potential buyer backs out
of Steward physician group sale.
Optum — a subsidiary of UnitedHealth Group poised to buy out
Steward Health Care's national physician group — is backing out
of the plan announced in March, The Boston Globe initially
reported.
Optum's deal with Steward would've allowed the physicians to
"retain their clinical practice autonomy." The notice of material
change also said Optum was "dedicated to maintaining" Steward's
workforce and wouldn't "diminish" any services, according to
documents submitted to the Massachusetts Health Policy Commission
in late March 2024.
The HPC confirmed in a statement to Boston.com that Optum is "no
longer working to finalize an agreement with Steward." Steward and
Optum did not return requests for comment Sunday evening.
The sale came about a month before Steward filed for bankruptcy
protection in May 2024. The hospital group plans to sell all of
their hospitals while promising to keep the group's eight
Massachusetts hospitals up and running. Dallas-based Steward
operates more than 30 hospitals across the country.
New England Sinai Hospital in Stoughton, Morton Hospital in
Taunton, Nashoba Valley Medical Center in Ayer, Carney Hospital in
Dorchester, Good Samaritan Medical Center in Brockton, Holy Family
Hospital in Haverhill and Methuen, Norwood Hospital, Saint Anne’s
Hospital in Fall River, and St. Elizabeth;s Medical Center in
Brighton are all in Steward's network.
Officials want more transparency in healthcare amid Steward's
financial crisis
Steward’s financial woes came to light in January. Since then,
state and federal officials have attempted to to maintain care for
residents and hold the hospital giant accountable for what they
characterize as serious mismanagement. The state Department of
Public Health announced an emergency activation plan last month,
while Governor Maura Healey fought for Steward to release audited
financial documents in February 2024.
"This situation stems from and is rooted in greed, mismanagement
and lack of transparency on the part of Steward leadership in
Dallas, Texas," Healey said in May after the bankruptcy filing.
"It's a situation that should never have happened and we’ll be
working together to take steps to make sure this never happens
again."
This month, Sens. Edward Markey and Elizabeth Warren have taken aim
at Steward in Washington. Markey asked the Department of Labor to
ensure Steward’s 30,000 employees — nearly 10,000 of whom live
in Massachusetts — continue to receive paychecks, healthcare, and
retirement benefits amid the financial crisis.
Warren proposed legislation to target private equity in healthcare,
which she said would offer penalties and safeguards to protect
patients, health care workers, and hospitals from private equity
"looting."
"My bill says that if you drive a hospital like Steward into
bankruptcy, putting patients and communities at risk, you should
face real consequences," including potential prison time, Warren
said earlier this month.
About Steward Health Care
Steward Health Care System LLC owns and operates the largest
private physician-owned for-profit healthcare network in the U.S.
Headquartered in Dallas, Texas, Steward's operations include 31
hospitals in eight states, approximately 400 facility locations,
4,500 primary and specialty care physicians, 3,600 staffed beds,
and nearly 30,000 employees. Steward Health Care provides care to
more than two million patients annually.
Steward and 166 affiliated debtors filed chapter 11 petitions
(Bankr. S.D. Texas Lead Case No. 24-90213) on May 6, 2024, in the
U.S. Bankruptcy Court for the Southern District of Texas, and the
Honorable Christopher M. Lopez oversees the proceeding.
Weil, Gotshal & Manges LLP is serving as the Company's legal
counsel. AlixPartners, LLP is providing financial advisory services
to the Company, and John Castellano of AlixPartners is serving as
the Company's Chief Restructuring Officer. Lazard Freres & Co. LLC,
Leerink Partners LLC, and Cain Brothers, a division of KeyBanc
Capital Markets Inc. are providing investment banking services to
the Company. McDermott Will & Emery is special corporate and
regulatory counsel for the company. Kroll is the claims agent.
SUPPLY SOURCE: Cancels Planned Chapter 11 Auction
-------------------------------------------------
Emlyn Cameron of Law360 Bankruptcy Authority reports that cleaning
products company Supply Source cancels Chapter 11 auction.
Cleaning products company Supply Source Enterprises Inc. told the
Delaware bankruptcy court it wouldn't go through with a planned
auction of all its assets because only its stalking horse bidder
made a satisfactory offer.
About Supply Source Enterprises
Supply Source Enterprises Inc. --
https://hig.com/portfolio/supply-source-enterprises/ -- is a
virtual manufacturer of branded and private label personal
protective equipment and janitorial, safety, hygiene and sanitation
products. It is headquartered in Cleveland, Ohio.
Supply Source Enterprises and its affiliates sought relief under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case
No. 24-11054) on May 21, 2024. In its petition, Supply Source
Enterprises reported $50 million to $100 million in assets and $100
million to $500 million in liabilities.
Judge Brendan Linehan Shannon oversees the cases.
The Debtors tapped McDermott Will & Emery, LLP and Potter Anderson
& Corroon, LLP as legal counsels; Thomas Studebaker of Triple P
RTS, LLC (a Portage Point affiliate) as chief restructuring
officer. Kurtzman Carson Consultants is the noting and claims
agent.
SUSAN H. ARENSBERG: HSBC Wins Dismissal of Adversary Case
---------------------------------------------------------
Judge Michael E. Wiles of the United States Bankruptcy Court for
the Southern District of New York granted HSBC Bank USA, et al.'s
motion to dismiss the adversary proceeding filed by Debtor Susan H.
Arensberg relating to a foreclosure judgment.
Susan H. Arensberg is one of two joint owners of real property
located at 4530 Delafield Avenue, Bronx, NY 10471-3905. The other
joint owner is her husband. The Property was the subject of a
foreclosure action in the Bronx Supreme Court that preceded this
bankruptcy case. A judgment of foreclosure and sale was entered on
December 10, 2018, in favor of "HSBC Bank USA, National
Association, as Trustee for Deutsche Mortgage Securities, Inc.
Mortgage Loan Trust Series 2004-4 Mortgage Pass-Through
Certificates Series 2004-4." That HSBC entity has filed a proof of
claim in the amount of $2,673,591.48.
The adversary proceeding was filed on April 22, 2024, more than
five years after the entry of the foreclosure judgment. Plaintiff
contends the foreclosure judgment was procured by fraud and should
be nullified and that Proof of Claim No. 4-1 should be disallowed.
The Complaint lists a number of recorded mortgage and note
transfers that the Debtor's counsel has retrieved from the official
property records, including a "corrected" assignment notice dated
November 21, 2013.
Defendants have moved to dismiss the Complaint. They argue the
Complaint is an attack on the validity of the state court
foreclosure judgment and that such an attack is barred by the
Rooker-Feldman doctrine. They also argue that the claims in the
pending adversary proceeding could have been asserted in the state
court action and now are barred by res judicata. The Court
agrees.
Ms. Arensberg contends that New York courts permit collateral
attacks on judgments that have been obtained by "extrinsic" rather
than by "intrinsic" fraud. According to the Court, even if this
distinction were applicable, however, the "fraud" alleged in this
case was not "extrinsic" fraud. "Extrinsic" fraud consists of
fraud or coercion that deprives a party of the right to appear and
to be heard in a proceeding; classic examples include
misrepresentations as to whether a hearing will proceed as
scheduled, or misrepresentations that a party intends to
discontinue an action, or threats of physical harm if the opposing
party appears in court.
In order to constitute "extrinsic" fraud, the fraud "must be in
some matter other than the issue in controversy in the case." Fraud
"which goes to the existence of a cause of action," including
alleged perjury or other false statements during a proceeding,
constitute "intrinsic" and not "extrinsic" fraud.
The alleged fraud that occurred in this case took the form of
alleged misrepresentations in papers filed with the state court,
and if proved would only constitute "intrinsic" rather than
"extrinsic" fraud, the Court states.
Finally, Ms. Arensberg contends federal courts may disregard state
court judgments, and may decline to give them res judicata effect,
if the judgments were procured by fraud, citing Heiser v. Woodruff,
327 U.S. 726 (1946). The cited passage in the Heiser decision was
dicta; the actual holding in that case was that a state court
judgment should have been given res judicata effect. The Heiser
decision also predates the Feldman decision by the Supreme Court
and other decisions that have expanded upon the scope and meaning
of the Rooker-Feldman doctrine. Furthermore, Ms. Arensberg's
counsel acknowledged at oral argument that the Heiser decision
would only permit a state court judgment to be attacked based on
claims of "extrinsic" fraud. However, the Court notes allegations
of the Complaint do not support a claim of "extrinsic" fraud.
A copy of the Court's decision dated July 3, 2024, is available at
https://urlcurt.com/u?l=3N5jML
Susan H. Arensberg filed for Chapter 11 bankruptcy protection
(Bankr. S.D.N.Y. Case No. 23-11740), listing under $1 million in
both assets and liabilities. The Debtor is represented by Albert
Barkey, Esq.
T & T DYNAMITE: Court Dismisses Bankruptcy Case
-----------------------------------------------
Judge Thomas Tucker of the United States Bankruptcy Court for the
Eastern District of Michigan dismissed the bankruptcy case of T & T
Dynamite Rental Properties, Inc.
On June 12, 2024, the Debtor filed a voluntary petition for relief
under Chapter 11, commencing this case. On June 20, 2024, the Court
entered an order upon the stipulation of the United States Trustee,
the Sub Chapter V Trustee, and the Debtor-in-Possession entitled
"Order Extending Time for the Debtor to File Schedules and Other
Required Documents". These documents include: (a) schedules of
assets and liabilities, (b) schedules of executory contracts and
unexpired leases, and (c) statement of financial affairs.
According to the Court, the Debtor failed to file a motion seeking
to extend the July 2, 2024 deadline to file the documents as
required by the June 20 Order, and failed to file all the required
documents by the extended July 2, 2024 deadline in the June 20
Order.
Based on statements made by the Debtor's counsel during the initial
scheduling conference held on July 3, 2024, the Court finds that
there is no hope the Debtor will file the required documents at any
time in the foreseeable future, if ever. For all of these reasons,
the Court finds cause to dismiss this case.
A copy of the Court's decision dated July 3, 2024, is available at
https://urlcurt.com/u?l=1NjkZU
About T & T Dynamite Rental Properties
T & T Dynamite Rental Properties, Inc. sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D. Mich. Case No.
24-45774) on June 12, 2024, with up to $50,000 in assets and up to
$1 million in liabilities.
Judge Maria L. Oxholm presides over the case.
Alexander Joseph Berry-Santoro, Esq., at Maxwell Dunn, PLC,
represents the Debtor as legal counsel.
THERACARE PSYCHOLOGY: Claims to be Paid From Disposable Income
--------------------------------------------------------------
Theracare Psychology and Wellness, Inc., filed with the U.S.
Bankruptcy Court for the Central District of California a Plan of
Reorganization for Small Business dated June 28, 2024.
Theracare registered with the California Secretary of State on
April 8, 2019, as TheraCare Wellness, Inc. Debtor comes into
bankruptcy with two locations but will discontinue operations at
its secondary location.
The primary location, 265 S. Randolph Ave., Suite 120, Brea, CA
92821, will function as an office where Debtor's principals and
some employees work on a regular basis while the other branch of
Debtor's team will work remotely.
This is an operating Plan. This is a pot plan with only one
available pot of money.
This Chapter 11 Plan of Reorganization pays administrative claims,
secured claims, priority unsecured claims, and unsecured Allowed
Claims in full.
The Debtor's projections show that the Debtor expects that over the
next twenty quarters, disbursing a total of $294,000 or a lesser
amount that pays all Allowed Claims in full without interest. The
projections show that the projected disposable income is available
because it is not otherwise reasonably necessary for the payment of
expenditures necessary for the continuation, preservation, or
operation of the business of Debtor and can be used to fund the
Plan. In other words, the projections support Debtor's
determination that the Plan is feasible and that the funds
necessary to make the Plan Payments required under the Plan will be
available.
The Debtor will implement and fund the Plan from revenue going
forward for the term of the Plan. Under the Plan, Debtor will make
the Plan Payments, on a quarterly basis. Based on the Projections,
Debtor expects that it will have Cash sufficient to make each of
the Plan Payments required to be made on each of the Required
Payment Dates.
The Plan Proponent's financial information shows that Debtor will
have projected disposable income $7,500 per quarter.
Class 3 consists of all non-priority unsecured claims. Each allowed
general unsecured claim, which is also an Allowed Claim, will
receive a pro-rata portion of its Allowed Claim from a total
unsecured pot of $5,912, to be paid in quarterly installments or as
paid earlier as provided in other sections of the Plan.
Class 5 consists of administrative convenience class. Franchise Tax
Board Claimant filed Claim 2 on April 15, 2024, for $1,621.60.
Debtor will pay this claim in full, without interest, upon the
Effective Date.
Theracare Psychology and Wellness is the Debtor who will become the
Reorganized Debtor upon confirmation of this plan. Equity security
holders will remain unchanged. Dustin Arnold maintains and will
continue maintaining, postconfirmation, a fifty percent share of
the Reorganized Debtor. Joseph Mauch maintains and will continue
maintaining, post-confirmation, a fifty percent share of the
Reorganized Debtor.
Since its formation, Debtor has demonstrated the ability to
generate positive cash flow and thereby provide Disposable Income
to fund the Plan. As part of the Plan, Debtor will retain all the
property of the estate, continue to operate its business, and
generate disposable income. Over the Plan Term, the Debtor will use
the disposable income to fund the Plan Payments.
A full-text copy of the Plan of Reorganization dated June 28, 2024
is available at https://urlcurt.com/u?l=8Xzphh from
PacerMonitor.com at no charge.
Counsel to the Debtor:
Andy C. Warshaw, Esq.
Financial Relief Law Center, APC
1200 Main Street, Suite G
Irvine, CA 92614
Tel: (714) 442-3319
Fax: (714) 361-5380
Email: awarshaw@bwlawcenter.com
About Theracare Psychology and Wellness Inc.
Theracare Psychology and Wellness, Inc. filed a petition under
Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. C.D. Calif.
Case No. 24-10869) on April 5, 2024, with up to $50,000 in assets
and up to $500,000 in liabilities.
Judge Scott C. Clarkson presides over the case.
Andy C. Warshaw, Esq., represents the Debtor as legal counsel.
TOMMY'S FORT WORTH: Trustee Taps Gray Reed as Legal Counsel
-----------------------------------------------------------
Mark E. Andrews, as the Chapter 11 Trustee of Tommy's Fort Worth,
LLC and its affiliates, seeks approval from the U.S. Bankruptcy
Court for the Northern District of Texas to employ Gray Reed as his
counsel.
The firm's services include:
a) advising the Trustee with respect to his powers and duties
as trustee in possession in the management of the Debtors'
businesses and affairs;
b) advising and consulting on the conduct of these Chapter 11
cases, including all of the legal and administrative requirements
of administering these chapter 11 cases;
c) attending meetings and negotiating with representatives of
creditors and other parties in interest;
d) taking all necessary actions to protect, preserve, and
maximize the value of the Chapter 11 estates;
e) preparing pleadings in connection with these Chapter 11
cases;
f) representing the Trustee in connection with obtaining
authority to continue using cash collateral and securing
postpetition financing;
g) appearing before the Court and any appellate courts to
represent the interests of the chapter 11 estates;
h) taking any necessary action on behalf of the Trustee to
negotiate, prepare, and obtain approval of any sale transactions of
some or all of the Debtors' assets;
i) taking any necessary action on behalf of the Trustee to
negotiate, prepare, and obtain approval of a disclosure statement
and confirmation of a Chapter 11 plan and all documents related
thereto; and
j) performing all other necessary legal services for the
Trustee in connection with these chapter 11 cases that the Trustee
determines necessary and appropriate.
Gray Reed's current customary hourly rates generally range from
$370 to $985 per hour for attorneys and $75 to $370 per hour for
paraprofessionals.
Aaron Kaufman, Esq., a partner at Gray Reed, 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:
Aaron M. Kaufman, Esq.
GRAY REED
1601 Elm Street, Suite 4600
Dallas, TX 75201
Tel: (214) 954-4135
Fax: (214) 953-1332
Email: akaufman@grayreed.com
About Tommy's Fort Worth
Tommy's is a premium boat dealer with 16 locations across the
United States.
Tommy's Fort Worth, LLC and its affiliates concurrently filed
voluntary petitions for relief under Chapter 11 of the Bankruptcy
Code (Bankr. N.D. Lead Case No. 24-90000) on May 20, 2024. The
petitions were signed by Monica S. Blacker as chief restructuring
officer. At the time of filing, the Lead Debtor estimated $1
million to $10 million in assets and $100 million to $500 million
in liabilities.
Judge Edward L. Morris presides over the case.
Liz Boydston, Esq. at GUTNICKI LLP represents the Debtor as
counsel.
TOMMY'S FORT: Trustee Taps Trinity River as Financial Advisor
-------------------------------------------------------------
Mark E. Andrews, as the Chapter 11 Trustee of Tommy's Fort Worth,
LLC and its affiliates, seeks approval from the U.S. Bankruptcy
Court for the Northern District of Texas to employ Trinity River
Advisors LLC as his financial advisor.
The firm's services include:
a) assist in the Debtors' business activities, including
budgeting, cash management and financial management;
b) interact with counsel, lenders and other capital sources;
c) assist you in communications and negotiations with lenders,
vendors and other stakeholders;
d) work with the Trustee's other professionals as needed
including auditors and attorneys;
e) assist in preparation of the information required pursuant
to statutory reporting requirements related to the Chapter 11
proceeding;
f) assist with the preparation of reports for, and
communications with, the Bankruptcy Court, creditors, and any other
constituents;
g) review, evaluate and analyze the financial ramifications of
proposed transactions for which the Trustee may seek Bankruptcy
Court approval;
h) coordinate activities on behalf of the Debtors in
connection with any refinancing, capital raising and sale process
for the Debtors;
i) assist the Trustee in developing marketing materials for a
Sale transaction;
j) provide financial advice and assistance to the Trustee in
connection with a Sale transaction and conduct a Sec. 363 auction
to sell the assets of the Debtors;
k) render Bankruptcy Court testimony as appropriate in
connection with the foregoing, as required, on behalf of the
Debtors; and
l) perform other financial advisory tasks as requested by the
Trustee.
The firm's current customary hourly rates generally range from $225
to $875 per hour for professionals and $100 per hour for
administrative staff.
Trinity River Advisors is a "disinterested person" within the
meaning of Section 101(14) of the Bankruptcy Code as required by
section 327(a) of the Bankruptcy Code, and does not hold or
represent an interest adverse to the Debtors' estates, according to
court filings.
The firm can be reached through:
Nicholas A. Foley
TRINITY RIVER ADVISORS, LLC
325 N Saint Paul St, Ste 3600
Dallas, TX, 75201-3833
Phone: (469) 981-9830
About Tommy's Fort Worth
Tommy's is a premium boat dealer with 16 locations across the
United States.
Tommy's Fort Worth, LLC and its affiliates concurrently filed
voluntary petitions for relief under Chapter 11 of the Bankruptcy
Code (Bankr. N.D. Lead Case No. 24-90000) on May 20, 2024. The
petitions were signed by Monica S. Blacker as chief restructuring
officer. At the time of filing, the Lead Debtor estimated $1
million to $10 million in assets and $100 million to $500 million
in liabilities.
Judge Edward L. Morris presides over the case.
Liz Boydston, Esq. at GUTNICKI LLP represents the Debtor as
counsel.
TREVENA INC: May Receive up to $10M Under Amended Financing Deal
----------------------------------------------------------------
Trevena, Inc. announced July 8, 2024, an amendment to its March
2022 ex-US royalty-based financing with R-Bridge Healthcare Fund,
L.P.
Pursuant to the Amendment, Trevena will receive (i) a $2 million
payment from R-Bridge, and (ii) $8 million in future potential
tranches based on the achievement of certain US partnering and
commercial milestones for OLINVYK. In addition, the outstanding
liability in connection with the Royalty Financing will be reduced
by $10 million in connection with the Amendment. Trevena
previously received $30 million in non-dilutive funding under the
Royalty Financing.
Also as part of the Amendment, (i) certain OLINVYK Chinese IP that
had been previously pledged to R-Bridge under the Royalty Financing
was transferred to R-Bridge, (ii) warrants that had been issued to
R-Bridge as part of the Royalty Financing were amended to reduce
the exercise price to a 15% premium to the current stock price and
to extend the exercise period to five years from the date of the
Amendment, and (iii) the existing cap on US royalty payable to
R-Bridge was increased from $10 million to $12 million (with no
minimum or fixed payments).
About Trevena
Headquartered in Chesterbrook, Pa., Trevena, Inc., is a
biopharmaceutical company focused on developing and commercializing
novel medicines for patients affected by central nervous system, or
CNS, disorders. The Company's product, OLINVYK (oliceridine)
injection, or OLINVYK, was approved by the United States Food and
Drug Administration, or FDA, in August 2020. The Company initiated
commercial launch of OLINVYK in the first quarter of 2021. OLINVYK
is an opioid agonist for use in adults for the management of acute
pain severe enough to require an intravenous opioid analgesic and
for whom alternative treatments are inadequate. OLINVYK is the
first new chemical entity, or NCE, in this intravenous, or IV, drug
class in decades and it offers a differentiated profile that
addresses significant unmet needs in the acute pain management
landscape.
Philadelphia, Pa.-based Ernst & Young LLP, the Company's auditor
since 2007, issued a "going concern" qualification in its report
dated April 1, 2024, citing that the Company has suffered recurring
losses from operations and has stated that substantial doubt exists
about the Company's ability to continue as a going concern.
TROTTA TIRES: Maria Yip Named Subchapter V Trustee
--------------------------------------------------
The U.S. Trustee for Region 21 appointed Maria Yip, a certified
public accountant and managing partner at Yip Associates, as
Subchapter V trustee for Trotta Tires II, LLC.
Ms. Yip will be paid an hourly fee of $450 for her services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Ms. Yip declared that she is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Maria M. Yip
2 S. Biscayne Blvd., Suite 2690
Miami, FL 33131
Tel: (305) 569-0550
Email: myip@yipcpa.com
About Trotta Tires II
Trotta Tires II, LLC is a seller of tires serving South Florida
since 1995. The company has a wide selection of brands in its
inventory including: Hankook, Windforce, Goodyear, Michelin,
Continental, and BFGoodrich.
Trotta Tires II filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No.
24-16441) on June 27, 2024, with $50,000 to $100,000 in assets and
$1 million to $10 million in liabilities. The petition was signed
by Jose M Soto, manager.
Judge Peter D. Russin presides over the case.
Philip J. Landau, Esq., at Landau Law, PLLC represents the Debtor
as bankruptcy counsel.
U.S. LIGHTING: 1800 Diagonal Converts $10,000 Debt Into Equity
--------------------------------------------------------------
US Lighting Group, Inc. disclosed in a Form 8-K filed with the
Securities and Exchange Commission that on July 2, 2024, 1800
Diagonal Lending LLC elected to convert $10,000 of the amount the
Company owes on a promissory note into shares of the Company's
common stock, due to the Company's failure to make the required
payment for the month of June.
On Nov. 2, 2023, US Lighting issued a promissory note to 1800
Diagonal in the original principal amount of $120,750 in connection
with a loan. The note provided for monthly payments of principal
and interest of $15,027. 1800 Diagonal subsequently agreed to
reduced payments of $7,500 a month.
1800 Diagonal called a default under the note due to the Company's
failure to make the June payment and applied penalties to the
amount outstanding and demanded payment in full. After the
application of the penalties and conversion of $10,000, 1800
Diagonal claims that there is $68,910 outstanding under the Note.
The Company said it does not have available cash to pay the
accelerated note balance and expects that 1800 Diagonal may convert
additional amounts under the Note into shares of its common stock
and sell those shares in the public market.
Upon an event of default under the Note, 1800 Diagonal may convert
amounts outstanding under the Note into shares of the Company's
stock at a conversion price equal to 61% of the lowest trading
price of the stock during the ten trading days before the
conversion date. The July 2 conversion price was $0.00976 per
share and 1800 Diagonal received 1,024,590 shares upon conversion
of the $10,000 note balance. The issuance of the Company's shares
to 1800 Diagonal was exempt from registration under Section 4(a)(2)
of the Securities Act of 1933.
About US Lighting
Headquartered in , Euclid, Ohio, US Lighting Group, Inc., is an
innovative composite manufacturer utilizing advanced fiberglass
technologies in growth sectors such as high-end recreational
vehicles (RVs), prefabricated off-grid houses, and high-performance
powerboats. The Company derives expertise and inspiration from the
marine industry, where the harshest conditions are expected and met
with superior engineering and the latest in composite technology
The Company plans to expand its manufacturing footprint, enhance
production techniques, and develop more products in the RV, marine
and composite housing sectors. Its current R&D efforts are focused
on future tow-behind camper models under Cortes Campers brand as
well as prefabricated housing segment.
Columbus, Ohio-based GBQ Partners LLC, the Company's auditor since
2023, issued a "going concern" qualification in its report dated
April 15, 2024, citing that the Company has suffered recurring
losses from operations and has a significant accumulated deficit.
In addition, the Company continues to experience negative cash
flows from operations. These factors raise substantial doubt about
the Company's ability to continue as a going concern.
U.S. PRESS LLC: Kicks Off Subchapter V Bankruptcy Proceeding
------------------------------------------------------------
U.S. Press LLC filed Chapter 11 protection in the Middle District
of Georgia. According to court filing, the Debtor reports between
$1 million and $10 million in debt owed to 1 and 49 creditors. The
petition states funds will be available to unsecured creditors.
A meeting of creditors under 11 U.S.C. Section 341(a) is slated for
July 25, 2024 at 10:00 a.m. in Room Teleconference.
About U.S. Press LLC
U.S. Press LLC provides small and medium sized businesses with
professional print marketing tools.
U.S. Press LLC sought relief under Subchapter V of Chapter 11 of
the U.S. Bankruptcy Code (Bankr. M.D. Ga. Case No. 24-70605) on
June 20, 2024. In the petition signed by Kent A. Buescher, as CEO,
the Debtor reports estimated assets between $500,000 and $1 million
and estimated liabilities between $1 million and $10 million.
The Debtor is represented by:
G. Daniel Taylor, Esq.
STONE & BAXTER, LLP
577 Third Street
Macon, GA 31201
Tel: 478-750-9898
Fax: 478-750-9899
Email: dtaylor@stoneandbaxter.com
U.S. PRESS: Seeks to Hire Stone & Baxter as Bankruptcy Counsel
--------------------------------------------------------------
U.S. Press, LLC seeks approval from the U.S. Bankruptcy Court for
the Middle District of Georgia to hire Stone & Baxter, LLP as its
counsel.
The Debtors requires legal counsel to:
(a) give advice regarding the powers and duties of the Debtors
in the continued operation of the business and management of the
Debtors;
(b) prepare legal papers;
(c) continue existing litigation, if any, to which the Debtors
may be a party and conduct examinations incidental to the
administration of its estate;
(d) take any and all necessary actions for the proper
preservation and administration of the Debtors' estate;
(e) assist the Debtors with the preparation and filing of its
statement of financial affairs and schedules and lists as are
appropriate;
(f) take whatever actions are necessary with reference to the
use by the Debtors of its property pledged as collateral and to
preserve the same for the benefit of the Debtors and secured
creditors;
(g) assert, as directed by the Debtors, all claims the Debtors
has against others;
(h) assist the Debtors in connection with claims for taxes
made by governmental units;
(i) assist the Debtors in preparation of its Plan of
Reorganization and confirmation thereto; and
(j) perform all other legal services for the Debtors as it may
deem necessary.
The firm will be paid at these rates:
Attorneys $200 to $500 per hour
Paralegals/Research Assistants $135 hour
In addition, the firm will seek reimbursement for expenses.
G. Daniel Taylor, Esq., a partner at Stone & Baxter, 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:
G. Daniel Taylor, Esq.
R. Braden Copeland, Esq.
Stone & Baxter, LLP
577 Third Street
Macon, GA 31201
Tel: (478) 750-9898
Fax: (478) 750-9899
Email: bcopeland@stoneandbaxter.com
dtaylor@stoneandbaxter.com
About U.S. Press, LLC
U.S. Press, LLC filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. M.D. Ga. Case No.
24-70605) on June 20, 2024, listing $500,000 to $1 million in
assets and $1 million to $10 million in liabilities. The petition
was signed by Kent A. Buescher as CEO.
G. Daniel Taylor, Esq. at STONE & BAXTER, LLP represents the Debtor
as counsel.
UNITED STATES TWIRLING: Starts Subchapter V Bankruptcy Proceeding
-----------------------------------------------------------------
On June 20, 2024, United States Twirling Association Inc. filed
Chapter 11 protection in the Eastern District of New York.
According to court documents, the Debtor reports between $1 million
and $10 million. The petition states funds will be available to
unsecured creditors.
A meeting of creditors under 11 U.S.C. Section 341(a) is slated for
July 15, 2024 at 2:00 p.m. in Room Telephonically on telephone
conference line: 1 (877) 988-1229. participant access code:
6493694#.
About United States Twirling Association Inc.
United States Twirling Association Inc. is a sport baton twirling
organization.
United States Twirling Association Inc. sought relief under
Subchapter V of Chapter 11 of the U.S. Bankruptcy Code (Bankr.
E.D.N.Y. Case No. 24-72417) on June 20, 2024. In the petition
signed by Karen Cammer, as president, the Debtor reports estimated
assets between $100,000 and $500,000 and estimated liabilities
between $1 million and $10 million.
Honorable Bankruptcy Judge Robert E. Grossman oversees the case.
The Debtor is represented by:
Clifford A. Katz, Esq.
PLATZER, SWERGOLD, GOLDBERG, KATZ & JASLOW, LLP
475 Park Avenue South
18th Floor
New York, NY 10016
Tel: 212-593-3000
Email: ckatz@platzerlaw.com
UXIN LTD: Has Deal With Zhengzhou Airport to Form Joint Venture
---------------------------------------------------------------
Uxin Limited announced July 8, 2024, a strategic partnership with
Zhengzhou Airport Automobile Industry Co., Ltd. to establish Uxin
(Zhengzhou) Intelligent Remanufacturing Co., Ltd., the Joint
Venture. Pursuant to the joint venture agreement, Uxin (Anhui)
Industrial Investment Co., Ltd., a wholly-owned subsidiary of Uxin,
will contribute RMB120.0 million and Zhengzhou Airport Industry
will contribute RMB50.0 million, representing approximately 70% and
30% of the Joint Venture's total registered capital, respectively.
The Joint Venture aims to support Uxin's plan to establish a new
used car super store in Zhengzhou. This initiative is a key
collaboration between Uxin and Zhengzhou Airport Industry to
promote the development of the automotive aftermarket industry in
the Henan Province and to build a leading brand in China's used car
industry.
Mr. Kun Dai, chairman and chief executive officer of Uxin,
commented, "Zhengzhou Airport's strategic location,
business-friendly environment, established automotive industry, and
mature supply chain strongly support Uxin's business growth. With
ongoing local government support, Uxin can now focus resources on
producing high-quality used cars in advanced factories.
Additionally, Uxin aims to provide a top-tier retail service
experience based on new retail concepts as well as improve
large-scale vehicle operations using its digital capabilities.
These efforts align with Uxin's mission to transform and elevate
China's used car industry."
Zhengzhou Airport Industry, with a registered capital of RMB1.0
billion, is a wholly-owned subsidiary of Zhengzhou Airport Economy
Zone Technology Innovation Investment Group Co., Ltd. Zhengzhou
Airport Investment Group, with a registered capital of RMB20.0
billion, is a state-owned enterprise under the management of the
Zhengzhou Airport Economy Zone Administrative Committee, with a
credit rating of AA+. As of the end of 2023, Zhengzhou Airport
Investment Group controlled and/or invested in 58 enterprises with
combined total assets of approximately RMB30.0 billion and net
assets of approximately RMB10.0 billion.
About Uxin
Uxin is a China-based used car retailer, pioneering industry
transformation with advanced production, new retail experiences,
and digital empowerment. The Company offers vehicles through a
reliable, one-stop, and hassle-free transaction experience. Under
its omni-channel strategy, the Company is able to leverage its
pioneering online platform to serve customers nationwide and
establish market leadership in selected regions through offline
inspection and reconditioning centers.
Shanghai, the People's Republic of China-based
PricewaterhouseCoopers Zhong Tian LLP, the Company's auditor since
2017, issued a "going concern" qualification in its report dated
Aug. 14, 2023, citing that the Company has incurred net losses
since inception and incurred cash outflows from operating
activities during the fiscal year ended March 31, 2023. In
addition, the Company has an accumulated deficit and net current
liabilities as of March 31, 2023. These events and conditions
raise substantial doubt about the Company's ability to continue as
a going concern.
VIKING CRUISES: S&P Affirms 'BB' Rating on Senior Secured Notes
---------------------------------------------------------------
S&P Global Ratings affirmed its 'BB' issue-level rating and '2'
recovery rating on Viking Cruises Ltd.'s $675 million senior
secured notes due 2028 and $350 million senior secured notes due
2029. The '2' recovery rating indicates its expectation for
substantial (70%-90%; rounded estimate: 70%) recovery for the
secured lenders in the event of a payment default. S&P also
affirmed its 'B+' issue-level rating and '5' recovery rating on
Viking's unsecured notes. The '5' recovery rating indicates its
expectation for modest (10%-30%; rounded estimate: 20%) recovery.
On June 27, 2024, Viking Cruises Ltd. entered into a five-year $375
million secured revolving credit facility (not rated), which is
secured by 19 longships and certain related assets. The new
revolver was undrawn at close; therefore the transaction is
leverage neutral. S&P said, "However, in our recovery analysis, we
assume the new revolving credit facility is 85% drawn at default,
which slightly impairs recovery prospects for secured and unsecured
lenders because we assume there is more secured debt outstanding in
our recovery analysis, and therefore there is less collateral
available for unsecured and secured deficiency claims."
S&P said, "Despite the incremental secured debt in our recovery
analysis due to the addition of the new revolver, recovery
prospects for secured and unsecured lenders are largely unchanged
because we have removed our previous assumption that Viking will
pursue a future secured financing of expedition ship Viking
Polaris. Viking used cash on the balance sheet instead of debt to
finance the delivery of Viking Polaris in 2022. The company
initially indicated its intent to issue debt in the future using
Polaris as collateral to replenish cash balances. However, since
Polaris' delivery, Viking has accumulated significant cash balances
as a result of strong recovery in operating performance and advance
customer deposits and entered into a revolver, which provides
additional liquidity. As a result, we believe a near-term secured
financing of Viking Polaris is unneeded and unlikely. Therefore, we
no longer include a potential secured financing of the ship in our
recovery analysis, making Viking Polaris' value available to
unsecured and secured deficiency claims, offsetting the impact of
the new revolver. If Viking were to issue secured debt using
Polaris as collateral in the future, we believe it could impair
recovery prospects for secured and unsecured lenders."
Viking continues to report strong 2024 and 2025 advanced bookings
for both its river and ocean cruise segments. As of May 19, 2024,
Viking's 2024 advanced bookings are 15% above 2023 levels due to
higher capacity, higher pricing, and the amount of inventory sold.
Its 2025 advanced bookings are 27% higher than 2024 levels at the
same point in time. S&P said, "We expect Viking will benefit from
new ship deliveries, including two new river ships and one new
ocean ship set to join the fleet before the end of 2024. Viking had
sold 91% and 39% of its 2024 and 2025 river and ocean operating
capacity, respectively, as of May 19, 2024. We believe this level
of revenue predictability will support solid revenue and EBITDA
growth over the next 12 months."
S&P's issuer credit rating on Viking remains 'BB-'.
Issue Ratings--Recovery Analysis
Key analytical factors
-- S&P said, "We affirmed our 'BB' issue-level rating and '2'
recovery rating on Viking's $675 million senior secured notes due
2028. Our '2' recovery rating indicates our expectation for
substantial (70%-90%; rounded estimate: 70%) recovery for
noteholders in the event of a payment default." The Viking Star,
Viking Sky, and Viking Sea ocean ships serve as collateral for the
$675 million secured notes issued at subsidiary Viking Ocean
Cruises Ltd.
-- S&P said, "We affirmed our 'BB' issue-level rating and '2'
recovery rating on Viking's $350 million senior secured notes due
2029. Our '2' recovery rating indicates our expectation for
substantial (70%-90%; rounded estimate: 70%) recovery for
noteholders in the event of a payment default." The Viking Venus
ocean ship serves as collateral for the $350 million secured notes
issued at subsidiary Viking Ocean Cruises Ship VII Ltd.
--S&P said, "We affirmed our 'B+' issue-level rating and '5'
recovery rating on Viking's unsecured notes. Our '5' recovery
rating indicates our expectation for modest (10%-30%; rounded
estimate: 20%) recovery in the event of payment default."
Simulated default assumptions
-- S&P's simulated default scenario contemplates a payment default
occurring in 2028 due to a significant decline in the company's
cash flow, stemming from a prolonged economic downturn, a
significant health or safety event, escalating geopolitical
conflicts, or increased competitive pressures that cause a
significant reduction in demand for cruising.
-- S&P said, "We use a discrete asset valuation (DAV) approach
rather than an enterprise value (EV) approach because certain
creditors receive priority claims against specific assets under
Viking's capital structure. We expect the company's lenders will
pursue the specific collateral pledged to them."
-- Specific ship-related financings and associated collateral
related to Viking's Sun, Orion, and Jupiter ocean ships are held at
Viking Ocean Cruises II Ltd., another subsidiary. S&P incorporated
the financing and related collateral value for: the Viking Mars and
Viking Neptune, which were delivered in 2022; the Viking Saturn,
which was delivered in 2023; the Viking Vela, to be delivered in
2024; the Viking Vesta, to be delivered in 2025; ship XIII and ship
XIV, both to be delivered in 2026; and ship XV, to be delivered in
2027.
-- Viking's river vessels continue to serve as collateral for the
specific loan agreements used to finance those vessels, which are
held at subsidiary Viking River Cruises Ltd. S&P said, "We
incorporated the financing and related collateral value for 10
river ships--six to be delivered in 2025 and four to be delivered
in 2026. We assume Viking also takes delivery of six additional
Egyptian river vessels between 2024 and 2026 and a Duoro river
vessel in 2025, and pays for these out of available cash." As a
result, the value from these ships is available to satisfy
unsecured claims.
-- S&P excludes from its DAV analysis any ships on order or ship
options that does not yet have committed financing.
-- S&P assumes Viking's $375 million secured revolving credit
facility is 85% drawn at default.
-- Under S&P's analysis, any residual value at Viking Ocean
Cruises and Viking Ocean Cruises Ship VII Ltd. (after satisfying
secured notes balances assumed at default), any residual value at
Viking River Cruises Ltd. (after satisfying the secured revolver
balance and any outstanding ship-level debt balances assumed at
default), and any residual value at Viking Ocean Cruises II would
flow to the parent, Viking, to satisfy the unsecured notes.
-- S&P said, "To calculate our DAV, we apply discounts to the
appraised values of Viking's ships and to the cost of its planned
ships. These discounts incorporate both a depreciation factor to
reflect the decline in value before the assumed point of
hypothetical default and an assumed realization rate. For ocean
ships, we apply discounts of 25%-50% depending on the age of the
ship. For expedition ships, we apply an approximate 25% discount to
the cost of the ships. For river ships, we apply discounts of
50%-65% depending on the age of the ship. The higher discount rate
for the river ships reflects our view that there would be a smaller
pool of potential buyers for these assets given their niche nature
and the small size of the river cruise market compared with the
ocean cruise market."
-- S&P assumes administrative claims total 7% of gross DAV because
it expects the complexity of Viking's capital structure, including
multiple classes of debt at the parent and various subsidiaries
that benefit from different collateral pools as well as
multijurisdictional considerations, to result in higher
administrative costs.
Simplified waterfall
-- Gross recovery value: $5.3 billion
-- Net recovery value (after 7% administrative costs): $5 billion
-- Net residual value for unsecured claims and secured deficiency
claims: $642 million
-- Deficiency claims from subsidiary debt: $717 million
-- Unsecured notes: $2.4 billion
--Recovery for unsecured notes: 10%-30% (rounded estimate:
20%)
-- Net recovery value available for $350 million senior secured
notes backed by Viking Venus and including its pro rata share of
value available to unsecured claims: $254 million
--Recovery for senior secured notes: 70%-90% (rounded estimate:
70%)
-- Net recovery value available for $675 million secured notes
backed by Viking Star, Viking Sea, and Viking Sky, and including
its pro rata share of value available to unsecured claims: $498
million
--Recovery for senior secured notes: 70%-90% (rounded estimate:
70%)
Note: All debt amounts include six months of prepetition interest.
W3 TOPCO: Moody's Withdraws 'B3' CFR Following Debt Extinguishment
------------------------------------------------------------------
Moody's Ratings withdrew all of W3 Topco LLC's (Total Safety)
ratings, including its B3 Corporate Family Rating, B3-PD
Probability of Default Rating, and Caa1 backed senior secured term
loan and backed senior secured delayed draw term loan ratings. The
outlook was changed to rating withdrawn from stable. The
withdrawals follow the extinguishment of its outstanding debt.
RATINGS RATIONALE
Total Safety has repaid its Caa1-rated senior secured term loan.
All of Total Safety's ratings have been withdrawn because its rated
debt is no longer outstanding.
W3 Topco LLC is a holding company controlling Total Safety US, Inc.
(collectively "Total Safety"), a global provider of industrial
safety services and equipment primarily for the downstream energy,
petrochemical, utility and other end markets. Total Safety is owned
by affiliates of private equity sponsor, Littlejohn & Co.
W3 TOPCO: S&P Discontinues 'B-' ICR Following Refinancing
---------------------------------------------------------
S&P Global Ratings discontinued its 'B-' issuer credit rating on W3
Topco LLC at the issuer's request.
At the same time, S&P discontinued its issue-level ratings on the
company's debt since all of its rated facilities were fully repaid
following a refinancing under a new private lender agreement. The
outlook was stable at the time of the discontinuance.
WALGREENS BOOTS: Moody's Lowers CFR to Ba3 & Unsecured Notes to B1
------------------------------------------------------------------
Moody's Ratings downgraded Walgreens Boots Alliance, Inc.'s ("WBA")
corporate family rating to Ba3 from Ba2, its probability of default
rating to Ba3-PD from Ba2-PD and its senior unsecured ratings to B1
from Ba2. Moody's also downgraded Walgreen Co.'s (a subsidiary of
WBA together combined referred to as "Walgreens") senior unsecured
rating to B1 from Ba1. WBA's backed commercial paper rating was
affirmed at Not Prime and its speculative grade liquidity rating
("SGL") remains unchanged at SGL-2. The ratings outlooks are
stable.
The downgrade reflects Walgreens' materially weaker than expected
operating performance and its significant downward revision in its
2024 earnings guidance. The downgrade also reflects Moody's belief
that Walgreens' turnaround will take longer than originally
anticipated given ongoing operational challenges including a weak
consumer environment and ongoing reimbursement rate pressure.
Walgreens' inability to stabilize its weak operating performance
and slow progress at deleveraging following the company's multiple
debt financed acquisitions has resulted in stubbornly high debt to
EBITDA, weak EBITA to interest and negative free cash flow. The
downgrade also reflects the high execution risk related to the
company's new multi-year plan to close up to 25% of its
underperforming stores over the next 3-years as part of its ongoing
strategic review. Despite Walgreens' multi-year cost reduction
program debt/EBITDA (including the present value of the opioid
liability) reached a high of 6.2x for the LTM period ending May 31,
2024 from 5.4x in fiscal 2023 ending August 31, 2023. EBITA to
interest weakened to 1.3x from 1.9x for the same period. Absent
the mark to market loss add back on variable prepaid forward
contracts, adjusted debt to EBITDA would be 5.5x for the LTM ending
May 31, 2024.
Although Walgreen Co.'s debt is senior to the unsecured debt at WBA
as WBA's debt is not guaranteed by any operating subsidiaries the
B1 rating reflects Moody's expectation for a similar recovery for
Walgreen Co.' unsecured notes as the WBA unsecured notes given the
underperformance of the company's US retail operations. The
operations at Walgreen Co. represent the company's US retail
operations, its largest business segment. Following rating actions,
the notes at both WBA and Walgreen Co. will be rated the same at
B1.
RATINGS RATIONALE
Walgreens Ba3 CFR reflects its large scale and leading market
position as the second largest pharmacy chain in the US. The rating
also indicates Moody's view of the drugstore industry which
benefits from the aging of the US, U.K., and European populations
which will likely increase long term use of prescription drugs.
Moody's believe that demand for prescription drug medication is
mostly resilient to recessionary pressures. The rating is also
supported by Walgreens good liquidity, suspension of its share
repurchase program and commitment to repaying debt. However, the
industry continues to face ongoing reimbursement rate pressures and
an evolving healthcare industry. Given ongoing operational
challenges, Walgreens' debt/EBITDA is expected to remain very high
at about 6.0x and interest coverage will remain weak below 1.5x at
the end of fiscal 2024. In addition, Walgreens faces significant
execution risks as it seeks to turnaround its operating performance
particularly in light of its new plan to close up to 25% (or about
2,200) of its underperforming stores within the competitive and
highly complex retail drug store sector. The Ba3 rating is
predicated on Moody's expectation that this level of weakness in
credit metrics is temporary and that both metrics will improve in
2025 to levels more in line with a Ba rating.
Walgreens' SGL-2 reflects good liquidity. The company's liquidity
is largely supported by its $5.75 billion in fully available
revolving credit facilities, which include a $2.25 billion revolver
expiring in August 2026 and a $3.5 billion revolver expiring June
2027. Walgreens had $703 million of unrestricted cash at May 31,
2024. In addition, Walgreens has a large pool of unecumbered
assets.
The stable outlook reflects the company's good liquidity and
Moody's belief that Walgreens' operating performance and metrics
will strengthen over the next 12 months. The stable outlook also
reflects Moody's expectation that Walgreens will address its
upcoming debt maturities in a timely manner.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Ratings could be upgraded if Walgreens strategic review results in
material improvement in profitability that leads to a sustained
improvement in credit metrics and consistently positive free cash
flow. An upgrade would also require the company to maintain good
liquidity, to address its upcoming maturities in a timely manner,
and to demonstrate financial policies that support debt/EBITDA
(including the present value of the opioid liability) sustained
below 4.75x and EBITA to interest sustained above 2.25x.
Ratings could be downgraded if Walgreens' strategic review does not
result in steady operational improvement that leads to stronger
credit metrics and sustained positive free cash flow. Ratings could
also be downgraded should liquidity weaken, should financial
policies become more aggressive or should the company fail to
address its upcoming debt maturities in a timely manner.
Quantitatively ratings could be downgraded if debt/EBITDA
(including the present value of the opioid liability) is sustained
above 5.5x or EBITA/interest is sustained below 1.75x.
Walgreens Boots Alliance, Inc. is a global retail pharmacy
operator. Walgreens together with the companies in which it has
equity method investments has a presence in more than 8 countries,
and has more than 12,500 locations. The company generated about
$146 billion in annual revenue and $6.0 billion of EBITDA for the
LTM ended May 31, 2024.
The principal methodology used in these ratings was Retail and
Apparel published in November 2023.
WATCO COMPANIES: Fitch Assigns 'B+' Rating on Sr. Unsecured Notes
-----------------------------------------------------------------
Fitch Ratings has assigned a 'B+'/'RR3' rating to Watco Companies,
LLC's proposed issuance of new senior unsecured notes. Fitch
currently rates Watco's Long-Term Issuer Default Ratings (IDR) 'B'.
The Rating Outlook is Stable.
Watco's 'B' IDR reflects its well-established network of
transportation assets, diversified exposure across end markets, and
integral role in the North American industrial supply chain
supporting through-the-cycle cash flows. The company's rail and
port assets provide cost advantaged transport to lower cost, bulk
producers mainly linked to non-discretionary commodities.
Terminal assets benefit from customer- and site-specific
capabilities and services that reduce substitution risk and
heighten switching costs. Cash flow risks are further moderated by
considerable contractual coverage with cost-linked provisions, and
re-pricing opportunities. Fitch views the operational and cash flow
risk profiles to be in line with or better than 'BB' category
characteristics.
Fitch's rating case forecasts EBITDA leverage of mid-7x-8x,
including the preferred shares, and EBITDA interest coverage and
FFO fixed charge coverage in the low-3x and 2x range, respectively,
throughout the forecast which is consistent with 'B' rating
tolerances.
KEY RATING DRIVERS
New Notes Rated 'B+': Watco plans to issue $700 million of new
senior unsecured notes due 2032. Fitch does not expect the
transaction to materially impact leverage and coverage metrics. The
issuance proceeds are earmarked to repurchase the existing 2027
senior notes, repay a portion of the senior secured credit
facility, and for general corporate purposes.
Leverage Below 8x; Coverage Above 3x: Fitch forecasts EBITDA
leverage, including preferred shares, in the mid-7x-8x range
through 2027, driven by expansionary capex funded through debt.
Watco has historically funded the majority of its growth through
equity raises. How its leverage profile evolves will depend on its
future funding mix.
The relatively low burden of cash distributions from the current
preferred share structure results in forecast EBITDA interest
coverage and FFO fixed charge coverage in the low 3x and 2x range,
respectively. Management has demonstrated a commitment to manage
funded debt-to-EBITDA, excluding preferred shares, in the 3.5x-4.5x
range, and expects discretionary capex to continue to be funded
with a combination of common and preferred equity.
Debt-Like Preferred Shares: The current preferred shares structure
contains debt-like features, including certain maturity and coupon
characteristics, under Fitch's Hybrid Criteria, which increases
Fitch-calculated leverage metrics. Fitch recognizes the preferred
shares provide flexibility to defer cash dividend payments in a
stressed scenario and benefit recovery for secured and unsecured
debt. The company has an established history of incorporating
several series of preferred shares within its capital structure,
and its financial profile could strengthen if existing shares are
replaced with equity-like securities.
Short-Line Rail Freight Resilience: Rail freight transportation has
proven core to the economy's supply chains and, as a result, has
historically shown resilience to economic cycles, which are
influenced by industrial, commodity and consumer markets. Rail is
the most cost-effective transport mode with continuous national
reach, and short-line rails are a critical link in the first and
last mile of the rail freight network.
Watco's stability is underpinned by its established portfolio of
diverse, non-replicable rail assets. Short-line railroads provide
more bespoke services to customers to ensure that rail is an
efficient option for shippers, further supporting its core role in
the supply chain. Stability in this segment is supported by
management's strategic focus on lower cost producers and the
average customer relationship tenure of 30+ years including service
prior to Watco ownership.
Moderated Margin, Cash Flow Risks: The Port & Terminal segment has
moderated through-the-cycle margin and cash flow variability due to
the contract mix, cost-linked contractual terms, and ties to
low-cost supply sources, which help to shield against fluctuations
in commodity price-linked volumes. More than half of EBITDA under
this segment is derived from fixed/minimum volume contracts that
have an average length of nine years, providing a stable revenue
base over the medium term.
Watco typically enters contracts that limit volume risk when
investing in site-specific infrastructure to support a return on
invested capital. Watco is not directly exposed to commodity price
risk as they do not take ownership; however, a portion of volumes
can be impacted by the economics within certain geographies. Unique
operational capabilities and efficiency-oriented services at
Watco's terminals with connection to multiple transportation modes
to support a low-cost base also differentiate the service offering,
enhancing pricing and increasing switching costs.
Fitch recognizes the size and timing of growth investment relative
to revenue can result in prolonged periods of negative FCF.
However, the agency views the approach to risk management,
including returns-based investment decisions and contractual terms,
favorably. Fitch forecasts positive FCF, excluding growth capex and
associated grants, which is allocated towards capital reinvestment
and measured dividends.
Diversification Mitigates Cyclicality: Watco is highly diversified
across end markets and customers, mitigating the impact of
idiosyncratic risks on the overall cash flow profile. Individual
end markets are exposed to cyclicality from industrial production
and changes in commodity flows across geographies in which Watco
operates; however, cash flows have proven fairly resilient through
several macro-economic shocks in recent years due to the strategic
diversification focus.
Additionally, short-line rails do not carry intermodal freight,
which is subject to competition from trucking and discretionary
consumer demand, and coal volumes which are in secular decline, are
a smaller portion of revenue than Class I rails. Fitch believes
Watco's diverse transportation network is well-positioned to
maintain operational and cash flow stability through economic
cycles.
DERIVATION SUMMARY
Fitch compares Watco Companies, L.L.C. to truck-based
transportation peers XPO, Inc. (XPO; BB+/Stable), Forward Air
(B/Stable), and Reception Mezzanine Holdings (B-/Negative), as well
as other transportation peers. Watco operates rail and port &
terminal based transportation services, which compares favorably to
intermodal and less-than-truckload (LTL) operators due to high
barriers to entry afforded by its expansive asset network, and
lower cost base relative to truck.
XPO is a larger player (top five) within the broader LTL market and
benefits from large geographic networks within the U.S. and Canada.
Savage Enterprises, LLC (B+/Stable) and Reworld Holding Corporation
(B+/Stable) also benefit from solid cash flow stability provided by
difficult to replicate assets.
Watco's leverage of 7x-8x is an outlier relative to peers mainly
due to Fitch's debt treatment of the preferred shares; however;
forecasted EBITDA interest coverage in the low- to mid-3x range and
FFO fixed charge coverage in the low-2x range is comparable with
Forward Air, Savage, and Reworld.
KEY ASSUMPTIONS
- Revenue growth is forecast in low- to mid-single digit range
through the forecast, driven by a mix of yield improvements,
low-single digit growth in volumes, and in-progress network
expansion through 2024-2027;
- EBITDA margin is forecast to remain in the high-teens, supported
by continued pricing improvements and contract re-negotiations at
key sites;
- Preferred and common equity cash distributions held at historical
rates;
- Gross maintenance capex (before grants / subsidies) forecast
around 9.5%-10% of total revenue through the forecast; expansionary
capex beginning in 2025 is funded with debt;
- Working capital stabilizes in 2024 following elevated investment
in 2022-2023 with moderate growth thereafter;
- SOFR rates assumed at 5.25% in 2024, gradually declining to 4.25%
in 2027;
- Unsecured notes and revolver refinanced consistent with current
terms.
RECOVERY ANALYSIS
The Recovery Rating assumes that Watco would be reorganized as a
going concern in a bankruptcy scenario rather than liquidated. A
10% administrative claim on the enterprise value is assumed.
The going-concern (GC) EBITDA estimate reflects Fitch's view of a
sustainable, post-reorganization EBITDA level upon which Fitch
bases the enterprise valuation. The GC EBITDA estimate of $225
million reflects a hypothetical scenario in which the business
faces a material, sustained decline in demand at one or more of its
segments / end markets or a severe downturn in North American
industrial production.
An enterprise valuation multiple of 7x is applied to the GC EBITDA
to calculate post-reorganization enterprise value. This multiple
considers Watco's through-the-cycle cash flow profile derived from
its diversified geographic and end market mix, advantaged asset
network, and strong position in the North American industrial
supply chain. It also considers valuation multiples for comparable
rail and terminal assets.
The secured credit facility receives priority above the unsecured
notes in the distribution of value in the recovery waterfall. The
Recovery Rating analysis results in a 'B+'/'RR3' recovery for the
unsecured notes.
RATING SENSITIVITIES
Factors That Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Fitch-defined EBITDA leverage sustained below 6.5x, including a
material change in funding strategy or capital structure mix;
- EBITDA interest coverage or FFO fixed-charge coverage sustained
above 2.5x;
- Stronger liquidity position, including at least 75% available on
the revolver.
Factors That Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- EBITDA interest coverage sustained below 2x;
- Heightened liquidity risk indicated by sustained revolver
availability below 25% or shift towards PIK only distributions;
- Fitch-defined EBITDA leverage sustained above 8.5x, including a
material change in funding strategy;
- A shift in the funding mix towards secured or unsecured debt
could impact the recovery on unsecured notes.
LIQUIDITY AND DEBT STRUCTURE
Watco has adequate liquidity as of 1Q24, consisting of $337 million
available on the revolver, and $7 million cash on hand. The
revolver matures in November 2026, followed by the proposed senior
unsecured notes in 2032; there are no material maturities prior to
the revolver.
ISSUER PROFILE
Watco provides a diverse set transportation and supply chain
services across North America and Australia. The company owns and
operates over 7,000 miles of short-line railroad and 75 terminals
and ports.
DATE OF RELEVANT COMMITTEE
04 June 2024
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
----------- ------ --------
Watco Companies, LLC
senior unsecured LT B+ New Rating RR3
WINDSOR TERRACE: Seeks to Hire Hansen & Hunter as Accountant
------------------------------------------------------------
Windsor Terrace Healthcare, LLC and its affiliates filed an amended
application seeking approval from the U.S. Bankruptcy Court for the
Central District of California to hire Hansen & Hunter Co. PC as
their independent certified public accountant.
The firm will prepare the consolidated financial statements of the
Debtors for the year ending Dec. 31, 2023, which comprise the
consolidated balance sheet as of Dec. 31, 2023, and the related
consolidated statements of operations and members' equity, and cash
flows for the year then ended, and the related notes to the
consolidated financial statements, and perform a review engagement
with respect to those consolidated financial statements. Hansen
will prepare consolidated financial statements in accordance with
accounting principles generally accepted in the United States of
America based on information provided by the Debtors, and obtain
limited assurance as a basis for reporting whether Hansen is aware
of any material modifications that should be made to the
consolidated financial statements in order for them to be in
accordance with accounting principles generally accepted in the
United States of America. Hansen will issue a written report upon
completion of the review of the consolidated financial statements.
In addition to the 2023 Financial Statement Services, the Debtors
seek to employ Hansen to complete the audit of the schedule of
grant income of U.S. Department of Health and Human Services (HHS)
Awards of the Company for the HHS Provider Relief Fund Periods of
Availability which ended in the year ended Dec. 31, 2021, and for
the other HHS Awards for the year ended Dec. 31, 2021, and the
disclosures for the Debtors (HHS Audit Services).
The firm will receive compensation as follows:
a. In exchange for the 2023 Financial Statement Services,
Hansen is seeking a flat fee of $76,800.
b. In exchange for the HHS Audit Services, Hansen is seeking a
flat fee of $182,000.
As disclosed in the court filings, Hansen does not hold or
represent any interest materially adverse to the interest of the
Debtors’ estates.
The firm can be reached through:
Louis O. McCollum, III, CPA
Erin Ramm, CPA
Hansen & Hunter Co. PC
7080 SW Fir Loop Suite 100
Portland, OR 97223
Phone: (503) 244-2134
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
Hospice 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.
WINDTREE THERAPEUTICS: Has Deal to Sell up to $35M Worth of Shares
------------------------------------------------------------------
Windtree Therapeutics, Inc. disclosed in a Form 8-K filed with the
Securities and Exchange Commission that on June 26, 2024, it
entered into a common stock purchase agreement with Seven Knots,
LLC an equity line investor, whereby the Company has the right, but
not the obligation, to sell to the Purchaser, and the Purchaser is
obligated to purchase, up to the lesser of (i) $35 million of newly
issued shares of the Company's common stock, par value $0.001 per
share and (ii) the Exchange Cap (as defined below).
The Company does not have a right to commence any sales of Common
Stock to the Purchaser under the Purchase Agreement until the time
when all of the conditions to the Company's right to commence sales
of Common Stock to the Purchaser set forth in the Purchase
Agreement have been satisfied, including that a registration
statement covering the resale of such shares is declared effective
by the SEC and the final form of prospectus contained therein is
filed with the SEC. Over the 36-month period from and after the
Commencement Date, the Company will control the timing and amount
of any sales of Common Stock to the Purchaser. Actual sales of
shares of Common Stock to the Purchaser under the Purchase
Agreement will depend on a variety of factors to be determined by
the Company from time to time, including, among others, market
conditions, the trading price of the Common Stock and
determinations by the Company as to the appropriate sources of
funding and the Company's operations.
At any time from and after the Commencement Date, on any business
day on which the closing sale price of the Common Stock is equal to
or greater than $0.50, the Company may direct the Purchaser to
purchase a specified number of shares of Common Stock not to exceed
10,000 shares or $50,000 at a purchase price equal to the lesser of
95% of the lower of (i) the daily volume weighted average price
(the "VWAP") of the Common Stock for the five trading days
immediately preceding the applicable Purchase Date for such Fixed
Purchase and (ii) the closing price of a share of Common Stock
during the full trading day on the trading day immediately
following such applicable Purchase Date; provided, however, that if
the resulting price is less than $0.50 (to be appropriately
adjusted for any reorganization, recapitalization, non-cash
dividend, stock split, reverse stock split or other similar
transaction), then the percentage applied shall be 90% instead of
the 95% referred to above.
In addition, at any time from and after the Commencement Date, on
any business day on which the closing sale price of the Common
Stock is equal to or greater than $0.50 and such business day is
also the Purchase Date for a Fixed Purchase of an amount of shares
of Common Stock not less than the applicable Fixed Purchase Maximum
Amount (as defined in the Purchase Agreement), the Company may also
direct the Purchaser to purchase, on the immediately following
business day, an additional number of shares of Common Stock in an
amount up to the VWAP Purchase Maximum Amount (as defined in the
Purchase Agreement) (a "VWAP Purchase") at a purchase price equal
to the lesser of 95% of (i) the closing sale price of the Common
Stock on the applicable VWAP Purchase Date and (ii) the VWAP during
the period on the applicable VWAP Purchase Date beginning at the
opening of trading and ending at the VWAP Purchase Termination Time
(as defined in the Purchase Agreement); provided, however, that if
the resulting price is less than $0.50 (to be appropriately
adjusted for any reorganization, recapitalization, non-cash
dividend, stock split, reverse stock split or other similar
transaction), then the percentage applied shall be 90% instead of
the 95% referred to above. At any time from and after the
Commencement Date, on any business day that is also the VWAP
Purchase Date for a VWAP Purchase, the Company may also direct the
Purchaser to purchase, on such same business day, an additional
number of shares of Common Stock in an amount up to the Additional
VWAP Purchase Maximum Amount (as defined in the Purchase Agreement)
at a purchase price equal to the lesser of 95% of (i) the closing
sale price of the Common Stock on the applicable Additional VWAP
Purchase Date and (ii) the VWAP during the Additional VWAP Purchase
Period (as defined in the Purchase Agreement) on the applicable
Additional VWAP Purchase Date; provided, however, that if the
resulting price is less than $0.50 (to be appropriately adjusted
for any reorganization, recapitalization, non-cash dividend, stock
split, reverse stock split or other similar transaction), then the
percentage applied shall be 90% instead of the 95% referred to
above.
In no event shall the Company issue to the Purchaser under the
Purchase Agreement more than 19.99% of the total number of shares
of Common Stock outstanding immediately prior to the execution of
the Purchase Agreement (the "Exchange Cap"), unless (i) the Company
obtains the approval of the issuance of such shares by its
stockholders in accordance with the applicable stock exchange rules
or (ii) the average price of all applicable sales of Common Stock
are made at a price equal to or in excess of the lower of (A) the
closing price on the Nasdaq Capital Market on June 26, 2024 and (B)
the average of the closing prices of the Common Stock for the five
business days immediately preceding June 26, 2024, such that the
sales of such Common Stock to the Purchaser would not count toward
the Exchange Cap because they are "at market" under applicable
stock exchange rules.
Convertible Promissory Note
As consideration for the Purchaser's irrevocable commitment to
purchase shares of Common Stock upon the terms of and subject to
satisfaction of the conditions set forth in the Purchase Agreement,
concurrently with the execution and delivery of the Purchase
Agreement, the Company issued a convertible promissory note to the
Purchaser in the amount of $350,000. The Commitment Note matures
on June 26, 2025 and will bear interest at 10% per annum on a
365-day basis, due and payable on the Maturity Date. The interest
rate will increase to 18% per annum upon the existence of an Event
of Default (as defined in the Commitment Note). The Purchaser, in
its sole discretion and upon written notice to the Company may
convert all or a portion of the entire unpaid principal balance of
the Commitment Note, together with all accrued and unpaid interest,
if any) into a number of shares of Common Stock equal to (x) the
Conversion Amount divided by, as of the date of such conversion
notice or other date of determination, the lesser of (i) a 20%
discount to the lowest intraday sale price of the Common Stock as
traded on the principal market on June 26, 2024 and (ii) a 20%
discount to the lowest intraday sale price of the Common Stock as
traded on the principal market during the 20 trading days
immediately preceding the date of such conversion notice, subject
to adjustment as provided in the terms of the Commitment Note.
Registration Rights Agreement
Concurrent with the execution of the Purchase Agreement, the
Company entered into a registration rights agreement with the
Purchaser. Pursuant to the Registration Rights Agreement, the
Company agreed to file a registration statement with the Securities
and Exchange Commission covering the resale of the Shares and the
Note Shares, on or before the 30th calendar day following the
Closing Date (as defined in the Purchase Agreement) and to cause
such registration statement to be declared effective by the SEC on
or before the 60th calendar day following the Closing Date, subject
to limited exceptions described therein. The registration rights
granted under the Registration Rights Agreement are subject to
certain conditions and limitations and are subject to customary
indemnification and contribution provisions.
First Bridge Note
The Company agreed to issue and sell to an institutional investor
(i) on June 25, 2024 an aggregate principal amount of $287,500 in
senior secured notes due 2025 (the "First Bridge Note") and (ii) on
June 28, 2024 an aggregate principal amount of $117,647 in senior
secured notes due 2025 ("Second Bridge Note"), for aggregate gross
proceeds of $350,000, each in a private offering in reliance on
exemption from registration provided in Section 4(a)(2) of the
Securities Act of 1933, as amended. The Bridge Notes include 15%
original issue discount.
The First Bridge Note will mature on June 25, 2025 and the Second
Bridge Note will mature on June 28, 2025, in each case, unless
extended at the Holder's option in accordance with the terms of the
respective Bridge Note.
The Bridge Notes will bear interest at 10% per annum on a 360-day
and twelve 30-day month basis, payable monthly in cash and in
arrears on each Interest Date (as defined in the Bridge Notes) and
such interest will compound each calendar month. The interest rate
will increase to 18% per annum upon the existence of an Event of
Default (as defined in the Bridge Notes).
About Windtree Therapeutics
Headquartered in Warrington, Pennsylvania, Windtree Therapeutics,
Inc. is a biotechnology company focused on advancing early and
late-stage innovative therapies for critical conditions and
diseases. The Company's portfolio of product candidates includes
istaroxime, a Phase 2 candidate with sarco endoplasmic reticulum
Ca2+ -ATPase 2a, or SERCA2a, activating properties for acute heart
failure and associated cardiogenic shock, preclinical SERCA2a
activators for heart failure, rostafuroxin for the treatment of
hypertension in patients with a specific genetic profile, and a
preclinical atypical protein kinase C iota, or aPKCi, inhibitor
(topical and oral formulations), being developed for potential
application in rare and broad oncology indications. The Company
also has a licensing business model with partnership out-licenses
currently in place.
Philadelphia, Pennsylvania-based EisnerAmper LLP, the Company's
auditor since 2022, issued a "going concern" qualification in its
report dated April 16, 2024, citing that the Company has suffered
recurring losses from operations and expects to incur losses for
the foreseeable future, that raise substantial doubt about its
ability to continue as a going concern.
ZIFF DAVIS: Extension Transaction No Impact on Moody's 'B1' CFR
---------------------------------------------------------------
Moody's Ratings says Ziff Davis, Inc.'s (ZD) announcement on July
10 that it entered into separate, privately negotiated exchange
agreements with a limited number of holders of its 1.75%
Convertible Senior Notes due November 2026 (not rated) is credit
positive. However, the transaction has no impact on the company's
ratings, including the B1 corporate family rating, and the stable
outlook.
Pursuant to the exchange agreements, ZD will exchange approximately
$401 million principal amount of its existing Convertible Senior
Notes due November 2026 for around $263 million new 3.625%
Convertible Senior Notes due 2028 (not rated) and around $135
million in cash. Moody's believe the transaction is credit
positive because pro forma debt/EBITDA as of LTM March 31, 2024
declines to 2.2x from 2.5x, which is strong for the B1 CFR. The
transaction also ensures that ZD's revolver (not rated), which was
recently amended and upsized to $350 million in June, will expire
on June 7, 2027. The amendment stated that the revolver would
expire on August 2, 2026 if at least $175 million of 2026
Convertible Notes remained outstanding 91 days before the 2026
Convertible Notes maturity date.
All financial metrics cited reflect Moody's standard adjustments.
While the transaction does not affect ZD's ratings, Moody's believe
other changes to the capital structure that reduce the amount of
outstanding non-guaranteed convertible debt or increase the senior
secured debt capacity may result in the Ba3-rated 4.625% Senior
Unsecured Notes due 2030 (guaranteed) being rated in line with the
CFR. A reduction in outstanding convertible debt would further
reduce the first loss absorption buffer for the rest of the debt
capital structure. Conversely, a reduction in outstanding senior
unsecured notes or an increase in debt subordinate to the senior
unsecured notes, such as additional non-guaranteed convertible
debt, would likely solidify the Ba3 rating of the senior unsecured
notes.
In the same announcement, ZD provided a preliminary business and
financial update indicating that the company's businesses
experienced headwinds during the second quarter of 2024, and
management expects that second quarter financial results will be
below Wall Street analysts consensus estimates. The company has had
organic revenue declines since 2022, and Moody's expect organic
revenue declines to continue for at least the next 12 months.
However, given the company's low debt/EBITDA and solid free cash
flow generation relative to debt, Moody's do not expect any
negative ratings impact from anticipated organic revenue declines
over the same period.
Ziff Davis, Inc. (NASDAQ: ZD) is a vertically focused digital media
and internet company whose portfolio includes leading brands in
technology, entertainment, shopping, connectivity, health,
cybersecurity, and marketing technology (Martech). In 2021 the
company completed the spin-off of its eFax business, Consensus
Cloud Solutions, Inc. (B2, stable). ZD generated $1.4 billion of
revenue as of LTM March 31, 2024.
[*] Costly Chapter 11 Process Leads to Prepack Filings Increase
---------------------------------------------------------------
Alex Wittenberg of Law360 Bankruptcy Authority reports that
companies that go bankrupt are increasingly opting to first
negotiate restructuring deals out of court so they can enter
Chapter 11 toting a turnaround plan already accepted by creditors,
saving potentially hundreds of thousands of dollars in legal costs
and dodging some of the stigma that bankruptcy attracts.
[*] Restaurant Chains That Suffered Bankruptcy in 2024
------------------------------------------------------
Maria Scinto of Yahoo! Finance reports that the restaurant business
is a notoriously risky one, as statistics indicate that around 80%
may close up shop within five years of opening. Whether they're the
smallest mom-and-pop eateries or major chains that once dominated
the landscape, restaurants often struggle to stay in business. The
reasons range from the dramatic (the major hepatitis outbreak that
put the final nail in Chi-Chi's coffin) to the mundane (Howard
Johnson's, kind of mid-century casual dining, simply failed to
remain relevant in the new millennium.) The pandemic, too, did a
number on the restaurant industry as a whole, but even now that
masking and social distancing are mercifully behind us for the most
part, certain chain restaurants are still haunted by the specter of
bankruptcy and it's certainly giving their fans (and investors) a
good scare.
Among the restaurants with financial woes, as we approach the
midpoint of the current year, are local operations like the New
York-slash-New Jersey chicken chain Sticky's Finger Joint and
Ohio's Melt Bar & Grilled, but there are bigger names as well,
including Rubio's Coastal Grill, Red Lobster, and even Popeye's.
While not all of these names are teetering on the brink of
extinction, there are changes in store for each one, and these
changes might not be welcome if you are either a regular patron or
these businesses figure heavily in your investment portfolio. (Not
that anything we say should in any way be construed as financial
advice! We're strictly food specialists here.)
* Sticky's Finger Joint
Sticky's Finger Joint is a chicken finger chain that currently has
10 locations in and around New York City (three of them in New
Jersey to serve the bridge-and-tunnelites), but at one time it
operated 16. More closures may be in store, though, as the chain
declared Chapter 11 in April 2024. As to why it's failing, it's not
because of the icky-sounding name. Well, okay, the name did prove
problematic at one point, but that was because a barbecue chain
with a similar moniker sued over usage rights, costing the company
a lot of money to defend. Yet another expensive lawsuit involved
the landlord of the office where the company has its headquarters.
Apart from its legal woes, Sticky's depends heavily on walk-in
customers and has said that the rise of food delivery services put
a dent in this type of traffic. Sure, it could (and does) do
business with apps including Grubhub, but this has proven to be
less lucrative since such apps keep a fairly hefty chunk of the
revenue for themselves. Rising food prices have also eaten into
Sticky's profits to the extent that much of the company's cash has
been flowing in the wrong direction. At this point, the bankruptcy
proceedings are still in the early stages, but some restructuring
seems likely if Sticky's is to stay in business.
* Melt Bar & Grilled
Remember the early 00s, when gourmet grilled cheese was a thing?
Melt Bar & Grilled remembers it fondly, as the trend -- plus a
timely appearance on "Man v. Food" -- took it from a single
restaurant opened in 2006 to a chain with locations across the
state of Ohio. Over the past few years, however, several Melt
locations have closed, with company founder Matt Fish admitting
that the chain's growth tailed off after 2017. Needless to say, the
post-pandemic economic climate hasn't done Melt any favors, either.
Plus, it's possible -- although we're just speculating here -- that
people figured out it's easy enough to upgrade your grilled cheese
at home. (This, too, might explain why the similarly-themed Tom +
Chee pretty much tanked after "Shark Tank".)
In June of 2024, Melt Bar & Grilled declared itself to be bankrupt.
According to the Chapter 11 filings, in 2022 the chain had a net
loss of $5 million. Sure, it was making money -- $9 million in that
year alone -- but spending more than it earned on rent, salaries,
taxes, etc. What's more, as we all know, cheese sure ain't cheap
these days. While Fish swears that he will find a way to keep the
chain alive, it's too soon to know just what kind of
post-bankruptcy changes will be necessitated.
* Rubio's Coastal Grill
Rubio's Coastal Grill claims to be the "home of the original fish
taco," which is clearly not true since the first location was
inspired by fish tacos that Ralph Rubio ate on a spring break trip
to Mexico. Still, it is certainly one of the few fast food chains
to specialize in this dish and may have helped to establish fish as
a more mainstream alternative to other taco fillings such as ground
beef or chicken. From a single taco stand in San Diego that opened
in 1983, Rubio's eventually expanded to 204 locations, but like
Melt Bar & Grilled, it, too, seems to have reached its high water
mark in the late 20-teens. Its sales were fairly stagnant from 2018
onward. By the time the pandemic was more or less over, the chain
was down to 170 locations and announced the sad news that it was
closing its Colorado and Florida restaurants.
By 2024, Rubio's seems to be in freefall, as it now operates a mere
86 locations in Arizona, California, and Nevada and in June filed
for its second bankruptcy since 2020. According to the filing, the
company is only worth between $10 and $15 million, but owes
somewhere between $100 million and $500 million. While the
surviving restaurants will stay open for now, the chain is looking
to sell the entire operation, so it remains to be seen whether the
new owners will stay in the fish taco business or pivot to
something completely different.
* Red Lobster
Have you ever wondered about the phrase "generous to a fault?"
Sure, if you're on the receiving end of such generosity, such as a
chain restaurant offering all-you-can-eat shrimp for a fairly low
price, you're hardly likely to find fault. If you're a company
trying to turn a profit, however, it's a whole 'nother story. While
the ever-popular Endless Shrimp deal may not have bankrupted Red
Lobster all by itself, it was certainly a contributing factor and
an especially egregious one (from an investor's standpoint) for any
who might recall how the chain lost millions in 2003 from a similar
promo involving endless snow crab.
Red Lobster is one of the grand old names in chain dining, having
been around since 1968. While it currently operates over 500
locations, this is down from more than 600. As of May 2024, a
number of its restaurants were labeled as being closed on a
temporary basis. However, listings for some, such as the ones in
Wauwatosa and LaCrosse, Wisconsin, now seem to have disappeared
altogether from the Red Lobster website. Don't hold your breath
about these restaurants re-opening any time soon, either, since the
company's bankruptcy filing discloses over a billion dollars' worth
of debt. It seems as if Red Lobster will most likely be sold, and
not for the first time. Without knowing the identity of any
prospective buyer, we won't even waste our breath (or typing
fingers) hypothesizing about what the future may hold for the
chain.
* Popeyes
If you're shocked to see Popeyes on this list, we hasten to assure
you that the company as a whole is doing okay for itself. More than
okay, in fact, as its global expansion seems to be thriving -- at
this point, around 25% of its over 4,000 locations are
international ones including recent additions in Poland and the
Czech Republic. If you're a loyal Popeyes customer in one
particular corner of Georgia, however (the one in the U.S., not the
one on the Black Sea), you might have cause to worry since the
owner of a 17-unit Popeyes franchise in that state filed for
Chapter 11 bankruptcy protection back in January 2024.
RRG Inc., according to the paperwork attendant upon the case, has
debts ranging between $1 million and $10 million, but its assets
only add up to about $50,000. The reason for the failure is said to
be the fact that three of its units were losing more money than
they were making, thus serving as the dominoes that knocked over
the more successful ones. While 17 Popeyes locations out of
thousands may not be such a big deal if you don't live in Georgia,
a different Popeyes franchise group called Premier Cajun Kings
filed bankruptcy in 2023 and this affected another 19 restaurants
in Georgia, Alabama, and Tennessee.
[^] BOND PRICING: For the Week from July 8 to 12, 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 4.940 1/15/2026
99 Cents Only Stores LLC NDN 7.500 4.940 1/15/2026
Acorda Therapeutics Inc ACOR 6.000 56.597 12/1/2024
Allen Media LLC / Allen
Media Co-Issuer Inc ALNMED 10.500 39.907 2/15/2028
Allen Media LLC / Allen
Media Co-Issuer Inc ALNMED 10.500 39.872 2/15/2028
Allen Media LLC / Allen
Media Co-Issuer Inc ALNMED 10.500 39.856 2/15/2028
Amyris Inc AMRS 1.500 1.790 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 28.112 7/15/2029
At Home Group Inc HOME 7.125 28.112 7/15/2029
Audacy Capital Corp CBSR 6.500 4.500 5/1/2027
Audacy Capital Corp CBSR 6.750 3.875 3/31/2029
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 59.508 2/1/2026
Beasley Mezzanine
Holdings LLC BBGI 8.625 59.508 2/1/2026
Biora Therapeutics Inc BIOR 7.250 58.364 12/1/2025
Castle US Holding Corp CISN 9.500 44.430 2/15/2028
Citigroup Global
Markets Holdings
Inc/United States C 6.000 100.000 11/18/2024
CommScope LLC COMM 8.250 49.507 3/1/2027
CommScope LLC COMM 8.250 49.074 3/1/2027
CommScope Technologies LLC COMM 5.000 43.912 3/15/2027
CommScope Technologies LLC COMM 5.000 44.033 3/15/2027
CorEnergy Infrastructure
Trust Inc CORR 5.875 70.500 8/15/2025
Curo Group Holdings Corp CURO 7.500 4.769 8/1/2028
Curo Group Holdings Corp CURO 7.500 23.000 8/1/2028
Curo Group Holdings Corp CURO 7.500 4.769 8/1/2028
Cutera Inc CUTR 2.250 20.000 6/1/2028
Cutera Inc CUTR 2.250 32.781 3/15/2026
Cutera Inc CUTR 4.000 17.287 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 2.000 8/15/2026
Diamond Sports Group
LLC / Diamond
Sports Finance Co DSPORT 6.625 1.900 8/15/2027
Diamond Sports Group
LLC / Diamond
Sports Finance Co DSPORT 5.375 2.182 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 6.625 1.867 8/15/2027
Diamond Sports Group
LLC / Diamond
Sports Finance Co DSPORT 5.375 2.182 8/15/2026
Diamond Sports Group
LLC / Diamond
Sports Finance Co DSPORT 5.375 2.300 8/15/2026
Embarq Corp EMBARQ 7.995 20.167 6/1/2036
Energy Conversion Devices 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 23.335 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 4.600 99.907 7/16/2024
Federal Home Loan Banks FHLB 3.760 99.382 7/19/2024
Federal Home Loan Banks FHLB 1.000 96.455 8/16/2024
Federal Home Loan Banks FHLB 0.500 99.268 7/22/2024
Federal Home Loan Banks FHLB 0.500 99.343 7/15/2024
Federal Home Loan Banks FHLB 1.000 99.321 7/19/2024
Federal Home Loan Banks FHLB 1.000 96.453 8/16/2024
Federal Home Loan Banks FHLB 1.000 96.447 8/16/2024
Federal Home Loan Banks FHLB 0.500 99.323 7/18/2024
Federal Home Loan
Mortgage Corp FHLMC 4.800 99.407 7/19/2024
Federal National
Mortgage Association FNMA 0.250 99.371 7/15/2024
Federal National
Mortgage Association FNMA 0.350 99.372 7/15/2024
First Republic Bank/CA FRCB 4.375 4.750 8/1/2046
First Republic Bank/CA FRCB 4.625 4.750 2/13/2047
GNC Holdings Inc GNC 1.500 0.833 8/15/2020
German American Bancorp Inc GABC 4.500 92.903 6/30/2029
German American Bancorp Inc GABC 4.500 92.903 6/30/2029
German American Bancorp Inc GABC 4.500 92.903 6/30/2029
Goldman Sachs Group Inc/The GS 7.000 94.282 9/20/2032
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 6.980 6/1/2026
H-Food Holdings
LLC / Hearthside
Finance Co Inc HEFOSO 8.500 7.507 6/1/2026
Hallmark Financial
Services Inc HALL 6.250 16.930 8/15/2029
Homer City Generation LP HOMCTY 8.734 38.750 10/1/2026
Hughes Satellite Systems SATS 6.625 46.120 8/1/2026
Hughes Satellite Systems SATS 6.625 45.953 8/1/2026
Hughes Satellite Systems SATS 6.625 45.953 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 3.250 99.767 7/19/2024
JPMorgan Chase Bank NA JPM 2.000 88.898 9/10/2031
Karyopharm Therapeutics Inc KPTI 3.000 64.741 10/15/2025
Legg Mason Inc LM 3.950 99.667 7/15/2024
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 1.000 5/15/2024
Lumen Technologies Inc LUMN 6.875 41.435 1/15/2028
Lumen Technologies Inc LUMN 4.500 27.783 1/15/2029
Lumen Technologies Inc LUMN 5.375 30.211 6/15/2029
Lumen Technologies Inc LUMN 4.500 27.582 1/15/2029
Luminar Technologies Inc LAZR 1.250 44.000 12/15/2026
MBIA Insurance Corp MBI 16.823 6.887 1/15/2033
MBIA Insurance Corp MBI 16.823 6.887 1/15/2033
Macy's Retail Holdings LLC M 6.700 86.353 7/15/2034
Macy's Retail Holdings LLC M 6.900 90.982 1/15/2032
Mashantucket Western
Pequot Tribe MASHTU 7.350 50.000 7/1/2026
Millennium Escrow Corp CFIELD 6.625 52.447 8/1/2026
Millennium Escrow Corp CFIELD 6.625 52.408 8/1/2026
Morgan Stanley MS 1.800 77.590 8/27/2036
NanoString Technologies Inc NSTG 2.625 74.285 3/1/2025
Occidental Petroleum Corp OXY 3.450 99.082 7/15/2024
Office Properties
Income Trust OPI 4.500 78.212 2/1/2025
Office Properties
Income Trust OPI 2.400 45.469 2/1/2027
Photo Holdings Merger Sub SFLY 8.500 47.500 10/1/2026
Photo Holdings Merger Sub SFLY 8.500 47.500 10/1/2026
Polar US Borrower
LLC / Schenectady
International Group Inc SIGRP 6.750 27.500 5/15/2026
Polar US Borrower
LLC / Schenectady
International Group Inc SIGRP 6.750 27.324 5/15/2026
Qwest Capital Funding Inc QWECOM 6.875 36.305 7/15/2028
Rackspace Technology
Global Inc RAX 5.375 27.673 12/1/2028
Rackspace Technology
Global Inc RAX 3.500 29.459 2/15/2028
Rackspace Technology
Global Inc RAX 5.375 26.990 12/1/2028
Rackspace Technology
Global Inc RAX 3.500 29.459 2/15/2028
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 7.500 41.500 7/1/2025
Rite Aid Corp RAD 7.700 2.438 2/15/2027
Rite Aid Corp RAD 6.875 3.761 12/15/2028
Rite Aid Corp RAD 8.000 42.138 11/15/2026
Rite Aid Corp RAD 7.500 41.499 7/1/2025
Rite Aid Corp RAD 6.875 3.761 12/15/2028
RumbleON Inc RMBL 6.750 66.413 1/1/2025
SVB Financial Group SIVB 3.500 60.000 1/29/2025
Sandy Spring Bancorp Inc SASR 4.250 86.000 11/15/2029
Shift Technologies Inc SFT 4.750 0.439 5/15/2026
Spanish Broadcasting
System Inc SBSAA 9.750 59.679 3/1/2026
Spanish Broadcasting
System Inc SBSAA 9.750 58.831 3/1/2026
Spirit Airlines Inc SAVE 1.000 47.000 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 9.469 5/15/2027
Turning Point Brands Inc TPB 2.500 99.800 7/15/2024
Veritex Holdings Inc VBTX 4.750 89.395 11/15/2029
Veritone Inc VERI 1.750 36.750 11/15/2026
Virgin Galactic Holdings SPCE 2.500 30.930 2/1/2027
Voyager Aviation Holdings VAHLLC 8.500 15.453 5/9/2026
Voyager Aviation Holdings VAHLLC 8.500 15.453 5/9/2026
Voyager Aviation Holdings VAHLLC 8.500 15.453 5/9/2026
WeWork Cos US LLC WEWORK 12.000 0.796 8/15/2027
Wells Fargo & Co WFC 3.498 96.517 7/30/2024
Wesco Aircraft Holdings Inc WAIR 9.000 10.863 11/15/2026
Wesco Aircraft Holdings Inc WAIR 13.125 2.459 11/15/2027
Wesco Aircraft Holdings Inc WAIR 9.000 10.863 11/15/2026
Wesco Aircraft Holdings Inc WAIR 13.125 2.459 11/15/2027
Wheel Pros Inc WHLPRO 6.500 18.035 5/15/2029
Wheel Pros Inc WHLPRO 6.500 18.035 5/15/2029
fuboTV Inc FUBO 3.250 59.875 2/15/2026
iHeartCommunications Inc IHRT 8.375 36.995 5/1/2027
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
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then-ending.
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S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
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Randy Antoni, Jhonas Dampog, Marites Claro, Joy Agravante,
Rousel Elaine Tumanda, Joel Anthony G. Lopez, Psyche A. Castillon,
Ivy B. Magdadaro, Carlo Fernandez, Christopher G. Patalinghug, and
Peter A. Chapman, Editors.
Copyright 2024. All rights reserved. ISSN: 1520-9474.
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