/raid1/www/Hosts/bankrupt/TCR_Public/240805.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, August 5, 2024, Vol. 28, No. 217
Headlines
1847 HOLDINGS: All Four Proposals Approved at Annual Meeting
291 GRANT AVE. LLC: Hits Chapter 11 Bankruptcy Protection
2U INC: Receives Interim Approval for Chapter 11 Loan
316 BOWERY NEXT: Seeks Chapter 11 Bankruptcy Protection
352 WEST SIDE: Hits Chapter 11 Bankruptcy Protection
867-871 KNICKERBOCKER: Files for Chapter 11 Bankruptcy
980 ATLANTIC: Hits Chapter 11 Bankruptcy Protection
99 BOTTLES: Starts Subchapter V Bankruptcy Process
AGSPRING LLC: Seeks to Extend Plan Exclusivity to Oct. 24
AIRSPAN NETWORKS: Court Approves $5 Million DIP Loan
ALLIANCE LAUNDRY: S&P Affirms 'B' ICR on Refinance, Outlook Stable
ALPINE HOSPITALITY: Hits Chapter 11 Bankruptcy Protection
ALTERNATIVE LOGISTICS: Commences Subchapter V Bankruptcy Process
ALTITUDE GROUP: Voluntary Chapter 11 Case Summary
AMAG ENTERPRISES: Unsecureds to Split $5K over 5 Years
AMENTUM HOLDINGS: Fitch Assigns 'BB+' Rating on Sr. Unsecured Notes
AMENTUM HOLDINGS: Moody's Rates New $1.25BB Unsecured Notes 'B3'
AMERGENT HOSPITALITY: Kicks Off Chapter 11 Bankruptcy
AMERICAN ROCK: S&P Cuts ICR to 'CCC-' on Heightened Default Risk
AMERICANAS SA: Gets NY. Judge Approval for Reorganization in Brazil
AOG TRUCKING: Seeks Chapter 11 Bankruptcy Protection in Florida
ARDENT HEALTH: S&P Alters Outlook to Positive, Affirms 'B' ICR
ARTIUSID INC: Motion to Dismiss Involuntary Ch. 7 Petition Tossed
ASPIRA WOMEN'S: Appoints John Ragard to its Board of Directors
ASPIRA WOMEN'S: Secures $2.14 Million in Warrant Inducement Deal
ATA HOLDINGS: Hits Chapter 11 Bankruptcy in Louisiana
B.T. TRUCKING: Seeks Chapter 7 Bankruptcy With Affiliates
BAUSCH HEALTH: Says It Is Not Filing Bankruptcy or Insolvency
BED BATH: Estate Administrator Wants Ex-Shareholder Sanctioned
BIG LOTS: Wants to Get Additional Funding as Losses Rise
BLACK OPS: Unsecured Creditors to Get 0% in Liquidating Plan
BLUE OCEAN PARTNERS: Court Narrows Claims in LawCash Suit
BRUNER ENTERPRISES: U.S. Trustee Unable to Appoint Committee
BYJU ALPHA: Lawyers Withdrawal Complicates Case, Disputes
BYJU ALPHA: U.S. Lawyers Want Out of Chapter 11 Bankruptcy Case
CADUCEUS PHYSICIANS: Case Summary & 20 Top Unsecured Creditors
CANNABIS CONTROL COMMISSION: Lawmaker Rejects Receivership Push
CARVANA CO: Posts $48 Million Net Income in Second Quarter
CCC HOLDCO: Moody's Assigns 'Caa2' CFR, Outlook Negative
CELULARITY INC: Swings to $196.30 Million Net Loss in 2023
CHANGAR REALTY: Case Summary & Six Unsecured Creditors
CHG PPC: Moody's Affirms 'B2' CFR Following Proposed Financing
CITY TRUST: U.S. Trustee Unable to Appoint Committee
COMPACT BRICK: Santos USA Kicks Off Subchapter V Bankruptcy
CONN'S INC: Closes Stores in Chapter 11, $25 Mil. DIP Loan Okayed
CORNERSTONE BUILDING: Moody's Rates New $500MM Secured Notes 'B2'
CRUZIN AUTO: Unsecureds to Split $30K over 5 Years in Plan
CUARTO LLC: Kicks Off Chapter 11 Bankruptcy Proceeding
DELTA APPAREL: Gets Clearance to Auction Assets in August 2024
DIAMOND SPORTS: Postpones Reorg. Date as Talks Need More Time
DR. THOMPSON: Unsecureds Will Get 100% of Claims in Plan
DUNKMAN PAINT: Unsecureds to Get Share of Income for 3 Years
DURECT CORP: Board Approves 275K Shares RSU Grant to CFO Papp
EASTERN ILLINOIS UNIVERSITY: Moody's Hikes Issuer Rating From Ba1
ECLIPSE FARMINGDALE: Case Summary & 13 Unsecured Creditors
ELEVATION GOLD: Chapter 15 Case Summary
ELEVATION GOLD: Obtains Initial Order for CCAA Protection
ELEVATION GOLD: Seeks Creditor Protection Under CCAA
EMERGENT BIOSOLUTIONS: Completes Sale of RSDL Kit to SERB for $75M
EMERGENT BIOSOLUTIONS: General Counsel Jennifer Fox Stepping Down
EVERGREEN HOMES: Creditors to Get Proceeds From Liquidation
EXELA TECHNOLOGIES: Eliminates Special Voting Preferred Stock
EXPRESS INC: Seeks to Extend Plan Exclusivity to Nov. 18
FARADAY FUTURE: Incurs $48.22 Million Net Loss in First Quarter
FARGO BREWING: Unsecureds to Get 2.94 Cents on Dollar in Plan
FASTLANE GROUP: Involuntary Chapter 11 Case Summary
FOCUS FINANCIAL: S&P Affirms 'B+' ICR, Outlook Remains Stable
FOREST GLEN: Plan Exclusivity Period Extended to September 23
FORMATION HOLDINGS: Unsecureds to Get Share of GUC Recovery
FR-AM TWO: Unsecureds Will Get 100% of Claims in Plan
FRANCISCO'S BLDG.: Hits Chapter 11 Bankruptcy Protection
FTX GROUP: Asks Court Okay to Settle $4 Mil. Phala Token Claims
GATEWAY PUNDIT: Parent TGP Filed Chapter 11 in Bad Faith
GENESIS GLOBAL: Concludes Restructuring, Allocates $4B to Creditors
GIRARD HOUSE COOPERATIVE: Hits Chapter 11 Bankruptcy Protection
GIRARDI & KEESE: Tom Can't Block Chapter 7 Evidence in Fraud Trial
GIRARDI & KEESE: Trustee Settles Stolen Money Suit With AmEx
GLOBAL SUPPLIES: Case Summary & 19 Unsecured Creditors
GOTHAM RESTAURANTS: Files for Subchapter V Bankruptcy
GUARDIAN FUND: Amends CV1 & CV2 Unsecured Claims Details
H.A. STEWART: Unsecureds Will Get 4% of Claims over 60 Months
HAWAIIAN HOLDINGS: Posts $67.6 Million Net Loss in Fiscal Q2
HIGHLINE AFTERMARKET: S&P Rates New Repriced Term Loan B 'B'
HISTOGEN INC: Unsecureds Unimpaired in Subchapter V Plan
ICAP ENTERPRISES: Creditors to Get Proceeds From Liquidation
INSPIRED GIFTS: U.S. Trustee Unable to Appoint Committee
INVITAE CORP.: Judge Says Chapter 11 Plan Needs Revision
IYS VENTURES: Eby-Brown's Claim Not Secured, Court Says
JACK OHIO: Moody's Affirms 'B2' CFR & Alters Outlook to Negative
KINGDOM GROUP REALTY: Begins Subchapter V Bankruptcy Proceeding
L.O.F. INC: Plan Exclusivity Period Extended to Oct. 7
LA FAMILIA DEL PASO INC: Files for Chapter 11 Bankruptcy
LBB PLATFORM LLC: Seeks Chapter 11 Bankruptcy Protection
LENY BERRY HOLDINGS: Seeks Chapter 11 Bankruptcy Protection
LIDO 10 LLC: Seeks Chapter 11 Bankruptcy Protection
LILIS ENERGY: Clawback Suit vs ICT Energy Goes to Trial
LITHIUM PRODUCTS: Seeks Chapter 11 Bankruptcy Protection
LLT MANAGEMENT: 3rd Circuit Upholds J&J's 2nd Chapter 11 Dismissal
LOUISIANA DELTA: Voluntary Chapter 11 Case Summary
MEIR'S WINE CELLARS: Gets Court Okay to Tap $60.5 Mil. DIP Funding
MIDNIGHT MADNESS: Court Narrows Claims in Parzych, et al. Case
MMA LAW FIRM: Asks Court for Chapter 11 Plan Extension
MOTUS GI: Jeff Varsalone to Lead Winding Down of Business Affairs
MOZART CAFE: Seeks Chapter 11 Bankruptcy
MP PPH: Fine-Tunes Liquidating Plan
NATIONSTAR MORTGAGE: Fitch Gives BB(EXP) to $500MM Unsec. Notes
NEVADA COPPER: U.S. Trustee Contests $5.3 Mil. Bonus Plan
NEW FORTRESS: S&P Downgrades ICR to 'B+', Outlook Stable
NEW HOME: S&P Alters Outlook to Positive, Affirms 'B-' ICR
NEXTDECADE CORP: HGC Next Inv, 6 Others Disclose Stakes
NUZEE INC: Issues US$300,000 Convertible Notes to Investors
OFFICE PROPERTIES: Reports $76.2 Million Net Income in Fiscal Q2
OPTICSLAH LLC: Voluntary Chapter 11 Case Summary
ORCHARD PARK EQUITY: Files for Chapter 11 Bankruptcy
PARK 28 PARTNERS: Files for Chapter 11 Bankruptcy
PEGASO ENERGY SERVICES: Hits Chapter 11 Bankruptcy in Texas
PERMIAN RESOURCES: Moody's Rates New Senior Unsecured Notes 'Ba3'
PIONEER HEALTH: Wants Additional Chapter 11 Financing to Fund Sale
PLAY DAY CAFE: Starts Subchapter V Bankruptcy Protection
POSEIDON CHARTERS: Commences Subchapter V Bankruptcy Process
PREMIER LANDSCAPING: Unsecureds Will Get 52.8% of Claims in Plan
PRINCE FASHIONS: Loses Bid to Recharacterize Terminated Lease
QUINTO LLC: Seeks Chapter 11 Bankruptcy Protection
RED LOBSTER: Gets Okay for Fortress Takeover Plan Creditor Vote
RED LOBSTER: Moves Forward With Takeover Offer of Fortress
RIOT PLATFORMS: Incurs $84.45 Million Net Loss in Second Quarter
RITE AID CORP: MedImpact Owes Addt'l $50M in Chapter 11 Sale
ROBERT H. SICKLES: Court Enters Default Judgment v. Three Cos.
ROBERTSHAW US: U.S. Trustee Wants Court to Deny Chapter 11 Plan
ROCKY MOUNTAIN: Transfers $1MM Secured Note to Isaac Lee Collins
ROSA'S SPORTS: Unsecureds Will Get 5.6% of Claims over 5 Years
SC HEALTHCARE: Plan Exclusivity Period Extended to Nov. 15
SCORPIUS HOLDINGS: Expects to Resume Normal Trading on August 2
SCORPIUS HOLDINGS: Inks Note Cancellation & Purchase Deal Amendment
SHIFT TECHNOLOGIES: Files Amendment to Disclosure Statement
SHINING WAY: Case Summary & 20 Largest Unsecured Creditors
SILVERSHORE CYPRESS: Voluntary Chapter 11 Case Summary
SILVERSHORE PROPERTIES: Voluntary Chapter 11 Case Summary
SIYATA MOBILE: To Attend APCO 2024 August 4-7 in Orlando, Florida
SMARTHOME VENTURES: Involuntary Chapter 11 Case Summary
SMC ENTERTAINMENT: Retires Additional $516K of Debt
SOUL QUEST CHURCH: Soul Quest Ayahuasca Seeks Chapter 11 Bankruptcy
ST. CHRISTOPHER'S: Judge Denies Bid to Appoint Creditors' Committee
STENSON LANDSCAPE: Amends Ally 5769 Secured Claim Pay
STEWARD HEALTH CARE: Announces Closure of 2 Massachusetts Hospitals
STEWARD HEALTH: Faces Senate Bipartisan Probe, CEO Gets Subpoena
SVB FINANCIAL: SVB Cayman Liquidators Want to Claw Back $294 Mil.
SVP-SINGER HOLDINGS: Moody's Appends 'LD' Designation to PDR
T L C MEDICAL: Voluntary Chapter 11 Case Summary
TEAM HEALTH: Fitch Hikes Rating on Issuer Default Rating to CCC+
TERRAFORM LABS: US Trustee Wants Singapore Lawsuit Deal Blocked
THE KENNEYS: SAK Healthcare Appointed as Receiver
TRANSOCEAN LTD: Lands $531MM Ultra-Deepwater Drillship Contract
TRANSOCEAN LTD: Reports $123MM Net Loss in Fiscal Q2
TRINITY PLACE: Moves to OTC Markets Following NYSE Delisting
URBAN ONE: Moody's Affirms 'B3' CFR & Alters Outlook to Negative
UXIN LTD: Incurs RMB369.54 Million Net Loss in FY Ended March 31
VALERIE V. GUNKOVA: Court Grants Kamin's Motion for Sanctions
VBI VACCINES: Chapter 15 Case Summary
VBI VACCINES: Court Grants Chap. 15 Relief, Faces Nasdaq Delisting
VBI VACCINES: Initiates Restructuring Proceedings Under CCAA
VERTEX ENERGY: BlackRock Holds 5.4% Equity Stake
WHITE CAP: Secured Term Loan Add-on No Impact on Moody's 'B2' CFR
WILDBRAIN LTD: Moody's Withdraws 'B3' CFR Following Debt Repayment
WILDBRAIN LTD: S&P Withdraws 'B-' Long-Term Issuer Credit Rating
WOB HOLDINGS: Case Summary & Seven Unsecured Creditors
WOM SA: Seeks to Extend Plan Exclusivity to Dec. 31
ZIP MAILING: Unsecureds' Recovery Lowered to 2% of Claims
[*] BCSC Urges Bankruptcy Law Amendment to Protect Investors
[] Three Shipping Companies That Filed Chapter 11 in July 2024
[^] BOND PRICING: For the Week from July 29 to Aug. 2, 2024
*********
1847 HOLDINGS: All Four Proposals Approved at Annual Meeting
------------------------------------------------------------
1847 Holdings LLC disclosed in a Form 8-K filed with the Securities
and Exchange Commission that the Company reconvened its 2024 annual
meeting of shareholders on July 25, 2024, at which the
shareholders:
(1) elected Ellery W. Roberts, Robert D. Barry, Michele A.
Chow-Tai, Clark R. Crosnoe, Paul A. Froning, Tracy S. Harris, and
Lawrence X. Taylor as directors to serve until the next annual
meeting of shareholders;
(2) ratified the appointment of Sadler, Gibb & Associates, LLC
as the Company's independent registered public accounting firm for
the fiscal year ending Dec. 31, 2024;
(3) approved Amendment No. 1 to the Company's 2023 Equity
Incentive Plan to increase the share reserve; and
(4) approved Amendment No. 2 to the Company's 2023 Equity
Incentive Plan to add an evergreen provision.
About 1847 Holdings
Based in New York, NY, 1847 Holdings LLC -- www.1847holdings.com/
-- is an acquisition holding company focused on acquiring and
managing a group of small businesses, which the Company
characterizes as those that have an enterprise value of less than
$50 million, in a variety of different industries headquartered in
North America.
Draper, UT-based Sadler, Gibb & Associates, LLC, the Company's
auditor since 2017, issued a "going concern" qualification in its
report dated April 25, 2024, citing that the Company has suffered
recurring losses and negative cash flows from operations, and has a
working capital deficit, which raises substantial doubt about its
ability to continue as a going concern.
291 GRANT AVE. LLC: Hits Chapter 11 Bankruptcy Protection
---------------------------------------------------------
291 Grant Ave. LLC filed Chapter 11 protection in the District of
New Jersey. According to court filing, the Debtor reports between
$1 million and $10 million in debt owed to 1 and 49 creditor. 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
August 21, 2024 at 10:00 a.m. in Room Telephonically.
About 291 Grant Ave. LLC
291 Grant Ave. LLC is a Single Asset Real Estate debtor (as
defined in 11 U.S.C. Section 101(51B)).
291 Grant Ave. LLC sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D.N.J. Case No. 24-17173) on July 18, 2024.
In the petition filed by Mendel Deutsch, as authorized
representative of the Debtor, the Debtor reports estimated assets
up to $50,000 and estimated liabilities between $1 million and $10
million.
The Honorable Bankruptcy Judge John K. Sherwood oversees the case.
The Debtor is represented by:
Stephen B. McNally, Esq.
MCNALLYLAW, LLC
93 Main Street
Suite 201
Newton, NJ 07860
Tel: 973-300-4260
Fax: 973-300-4264
Email: steve@mcnallylawllc.com
2U INC: Receives Interim Approval for Chapter 11 Loan
-----------------------------------------------------
Ben Zigterman of Law360 reports that remote learning and
accreditation group 2U Inc. received interim approval on Friday,
July 26, 2024, to access $60 million of a $64 million
debtor-in-possession financing package to fund its Chapter 11 case.
About 2U, Inc.
Headquartered in Lanham, Maryland, 2U is an online education
platform company. The Company's mission is to expand access to
high-quality education and unlock human potential. As a trusted
partner to top-ranked nonprofit universities and other leading
organizations, the Company delivers technology and services that
enable its clients to bring their educational offerings online at
scale.
2U Inc. sought relief under Chapter 11 of the U.S. Bankruptcy Code
(Bankr. S.D. N.Y. Case No. 24-11279) on July 25, 2024. In its
petition, the Debtor reports estimated assets and liabilities
between $1 billion and $10 billion each.
The Debtor is represented by:
George A. Davis, Esq.
Latham & Watkins LLP
LATHAM & WATKINS LLP
1271 Avenue of the Americas
New York, NY 10020
Telephone: (212) 906-1200
Email: george.davis@lw.com
316 BOWERY NEXT: Seeks Chapter 11 Bankruptcy Protection
-------------------------------------------------------
316 Bowery Next Generation LLC filed Chapter 11 protection in the
Southern District of New York. According to court filing, the
Debtor reports between $10 million and $50 million in debt owed to
1 and 49 creditors.
A meeting of creditors under 11 U.S.C. Section 341(a) is slated for
August 9, 2024 at 2:30 p.m. at Office of UST (TELECONFERENCE ONLY).
About 316 Bowery Next Generation
316 Bowery Next Generation LLC is a Single Asset Real Estate debtor
(as defined in 11 U.S.C. Section 101(51B)).
316 Bowery Next Generation LLC sought relief under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 24-11237) on
July 16, 2024. In the petition signed by Ephraim I. Diamond, as
CRO, the Debtor reports estimated assets between $1 million and $10
million and estimated liabilities between $10 million and $50
million.
The Honorable Bankruptcy Judge Michael E. Wiles oversees the case.
The Debtor is represented by:
Mark Frankel, Esq.
BACKENROTH FRANKEL & KRINSKY, LLP
488 Madison Avenue FL 23
New York NY 10022-7658
Tel: 212-593-1100
Email: mfrankel@bfklaw.com
352 WEST SIDE: Hits Chapter 11 Bankruptcy Protection
----------------------------------------------------
352 West Side Ave. LLC filed Chapter 11 protection in the District
of New Jersey. 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
August 21, 2024 at 11:00 a.m. in Room Telephonically.
About 352 West Side Ave. LLC
352 West Side Ave. LLC is a Single Asset Real Estate Debtor (as
defined in 11 U.S.C. Section 101(51B)).
352 West Side Ave. LLC sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D.N.J. Case No. 24-17174) on July 18, 2024.
In the petition filed by Mendel Deutsch, as authorized
representative of the Debtor, the Debtor reports estimated assets
up to $50,000 and estimated liabilities between $1 million and $10
million.
The Honorable Bankruptcy Judge John K. Sherwood oversees the case.
The Debtor is represented by:
Stephen B. McNally, Esq.
MCNALLYLAW, LLC
93 Main Street
Suite 201
Newton, NJ 07860
Tel: 973-300-4260
Fax: 973-300-4264
Email: steve@mcnallylawllc.com
867-871 KNICKERBOCKER: Files for Chapter 11 Bankruptcy
------------------------------------------------------
867-871 Knickerbocker LLC filed Chapter 11 protection in the
Eastern District of New York. According to court documents, the
Debtor reports $4,678,825 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
August 26, 2024 at 12:00 p.m. in Room Telephonically on telephone
conference line: 1 (866) 919-4760,. participant access code:
4081400#.
About 867-871 Knickerbocker LLC
867-871 Knickerbocker LLC is the fee owner of a three-story
residential building located at 867 Knickerbocker Avenue, Brooklyn,
New York 11207 and a three-story residential building located at
871 Knickerbocker Avenue, Brooklyn, New York 11207. The current
value of the Debtor's interest in the Properties is $4.63 million.
867-871 Knickerbocker LLC sought relief under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. E.D.N.Y. Case No. 24-42979) on July
18, 2024. In the petition filed by Zalmen Wagschal, as principal,
the Debtor reports total assets of $4,846,959 and total liabilities
of $4,678,825.
The Honorable Bankruptcy Judge Nancy Hershey Lord oversees the
case.
The Debtor is represented by:
Vivian Sobers, Esq.
SOBERS LAW PLLC
11 Broadway Suite 615
New York, NY 10004
Tel: (917) 225-4501
Email: vsobers@soberslaw.com
980 ATLANTIC: Hits Chapter 11 Bankruptcy Protection
---------------------------------------------------
980 Atlantic Holdings LLC filed Chapter 11 protection in the
Eastern District of New York. 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
August 19, 2024 at 12:45 p.m. in Room Telephonically on telephone
conference line: 1 (877) 929-2553. participant access code:
1576337.
About 980 Atlantic Holdings LLC
980 Atlantic Holdings LLC is engaged in activities related to real
estate.
980 Atlantic Holdings LLC sought relief under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. E.D.N.Y. Case No. 24-42977) on July
18, 2024. In the petition filed by Raphael B. Elkaim, as
co-manager, the Debtor reports estimated assets up to $50,000 and
estimated liabilities between $1 million and $10 million.
The Honorable Bankruptcy Judge Nancy Hershey Lord oversees the
case.
The Debtor is represented by:
Isaac Nutovic, Esq.
LAW OFFICES OF ISAAC NUTOVIC
261 Madison Avenue, 26th Floor
New York, NY 10016
Tel: 917-922-7963
Email: inutovic@nutovic.com
99 BOTTLES: Starts Subchapter V Bankruptcy Process
--------------------------------------------------
99 Bottles Hospitality LLC filed Chapter 11 protection in the
Middle District of Florida. The Debtor reports between $1 million
and $10 million in debt owed to 50 and 99 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
August 12, 2024 at 10:00 a.m. in Room Telephonically on telephone
conference line: 877-801-2055. participant access code: 8940738#.
About 99 Bottles Hospitality
99 Bottles Hospitality LLC owns and operates a full service
restaurant business.
99 Bottles Hospitality LLC sought relief under Subchapter V of
Chapter 11 of the U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No.
24-03666) on July 17, 2024. In the petition filed by Kevin O.
Andersen, as manager, the Debtor reports estimated assets up to
$50,000 and estimated liabilities between $1 million and $10
million.
The Debtor is represented by:
Michael Faro, Esq.
FARO & CROWDER
700 N Wickham Road
Suite 205
Melbourne, FL 32935
Tel: 321-784-8158
Email: ahinkley@farolaw.com
AGSPRING LLC: Seeks to Extend Plan Exclusivity to Oct. 24
---------------------------------------------------------
Agspring, LLC and its affiliates asked the U.S. Bankruptcy Court
for the District of Delaware to extend their exclusivity periods to
file a plan of reorganization and obtain acceptance thereof to
October 24 and December 26, 2024, respectively.
The Debtors explain that they have limited personnel providing
services to them as part time contractors and therefore need
additional time to address plan issues and to resolve claims while
these chapter 11 cases are not overly large. In addition, the
Debtors are engaged in good-faith negotiations with their two
largest creditors in an effort to reach a consensual global
resolution.
Since the Petition Date, the Debtors have already satisfied key
milestones necessary for the successful resolution of these chapter
11 cases, including completion and filing of their schedules and
statements, obtaining the consensual use of cash collateral and
filing of a combined disclosure statement and plan.
The Debtors claim that they have been focused on a potential
resolution of these cases, including confirming the proposed
combined disclosure statement and plan. To that end, the Debtors
are working to resolve open disputes prior to the confirmation
hearing scheduled for August 20, 2024.
The Debtors assert that they are requesting an extension of the
Exclusivity Periods to focus their time and energy on ultimately
confirming the combined plan filed in these cases. Continued
exclusivity will permit the Debtors the ability to maintain
flexibility in securing confirmation. All of the Debtors'
stakeholders will benefit from the Debtors' focused efforts to
maximize the value of the Debtors' estates at this time. The
Debtors' secured lenders have no objection to the extension
requested in this Motion.
The Debtors further assert that they are not seeking an extension
of the Exclusivity Periods to pressure or prejudice any of their
stakeholders. The Debtors are requesting an extension of the
Exclusivity Periods to focus their time and energy on confirming a
fair and equitable plan. Creditor groups or their advisors have had
an opportunity to actively participate in substantive discussions
with the Debtors throughout these chapter 11 cases.
Counsel to the Debtors:
Laura Davis Jones, Esq.
Pachulski Stang Ziehl & Jones LLP
919 North Market Street, 17th Floor
Wilmington, DE 19801
Telephone: 302-778-6401
Mobile: 302-547-3132
Email: ljones@pszjlaw.com
- and -
Samuel R. Maizel, Esq.
John A. Moe, II, Esq.
Tania M. Moyron, Esq.
Dentons US, LLP
601 South Figueroa Street, Suite 2500
Los Angeles, California 90017-5704
Tel: (213) 623-9300
Fax: (213) 623-9924
Email: samuel.maizel@dentons.com
john.moe@dentons.com
tania.moyron@dentons.com
About Agspring LLC
Agspring, LLC is a provider of warehousing and storage services in
Leawood, Kansas.
Agspring and five of its affiliates filed voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead
Case No. 23-10699) on May 31, 2023. At the time of the filing,
Agspring reported $1 million to $10 million in assets and $50
million to $100 million in liabilities.
Judge Craig T. Goldblatt oversees the cases.
The Debtor tapped Pachulski Stang Ziehl & Jones, LLP and Dentons
US, LLP as legal counsels, and Kyle Sturgeon of MERU, LLC as chief
restructuring officer.
AIRSPAN NETWORKS: Court Approves $5 Million DIP Loan
----------------------------------------------------
Alex Wittenberg of Law360 Bankruptcy Authority reports that a
Delaware bankruptcy judge on Tuesday, July 23, 2024, approved
telecommunications company Airspan Networks' request for $5 million
in supplemental debtor-in-possession financing, enabling the
company to fund operations as it awaits regulatory approval of its
Chapter 11 plan.
About Airspan Networks Holdings Inc.
Airspan Networks Holdings Inc. is a U.S.-based provider of
groundbreaking, disruptive software and hardware for 5G Networks,
and a pioneer in end-to-end Open RAN solutions that provide
interoperability with other vendors. As a result of innovative
technology and significant R&D investments to build and expand 5G
solutions, Airspan believes it is well-positioned with 5G indoor
and outdoor, Open RAN, private networks for enterprise customers
and industrial use applications, fixed wireless access (FWA),
Air-To-Ground, Neutral Host Networks and Utilities solutions to
help mobile network operators of all sizes deploy their networks of
the future, today. With over one million cells shipped to 1,000
customers in more than 100 countries, Airspan has global scale. On
the Web: http://www.airspan.com/
Airspan Networks sought relief under Chapter 11 of the Bankruptcy
Code (Bankr. D. Del. Lead Case No. 24-10621) on March 31, 2024. In
the petition filed by Glenn Laxdal, as president and chief
executive officer, the Debtor reports total assets as of Sept. 30,
2023 amounting to $58,965,000 and total debts as of Sept. 30, 2023
of $176,745,000.
The Honorable Bankruptcy Judge Thomas M. Horan oversees the case.
Dorsey & Whitney LLP is serving as legal counsel to Airspan. VRS
Restructuring Services, LLC is serving as Airspan's
financialadvisor and Intrepid Investment Bankers LLC is serving as
Airspan's investment banker. Epiq is the claims agent.
ALLIANCE LAUNDRY: S&P Affirms 'B' ICR on Refinance, Outlook Stable
------------------------------------------------------------------
S&P Global Ratings affirmed its 'B' issuer credit rating on
U.S.-based commercial laundry equipment manufacturer Alliance
Laundry Holdings LLC. S&P assigned its 'B' issue-level rating to
the company's proposed first-lien credit facilities with a '3'
recovery rating, reflecting its expectation of meaningful recovery
(50%-70%; rounded estimate: 55%) in the event of default.
The stable outlook reflects S&P's expectation that the company will
sustain satisfactory operating performance, including healthy
EBITDA and cash flow, with S&P Global Ratings-adjusted leverage
below 7.5x over the next 12 months.
Alliance seeks to raise a $2.075 billion first-lien, seven-year
term loan B. Proceeds will be used to refinance its existing term
loan B ($1.15 billion outstanding) due in 2027 and pay a $890
million shareholder distribution. The company also plans to raise a
$250 million first-lien, five-year revolving credit facility.
S&P said, "The proposed distribution financed with first-lien term
loan B proceeds will meaningfully increase leverage, but we expect
it will remain below our 7.5x potential downgrade threshold.
Alliance seeks to refinance its debt capital structure and pay a
one-time shareholder distribution. We estimate S&P Global
Ratings-adjusted pro forma leverage will increase meaningfully to
about 6.8x, compared with about 4.4x for the 12 months ended June
30, 2024. Nonetheless, we expect Alliance to sustain leverage below
our 7.5x downside trigger for its 'B' rating, albeit with a tighter
cushion.
"We expect the company's operating performance to support
deleveraging following this transaction. The company reported
strong sales growth of about 13% for the first half of fiscal 2024
(ended June 30). Strong demand growth across its business segments
in North America and internationally, with strong demand in its
laundromat customer segment, despite high borrowing costs and
openings constrained by long lead times for permits. New retail
distribution and new product introductions boosted the company's
residential sales in North America. While we expect economic
activity in Alliance's main operating regions to slow starting in
the second half of 2024, we believe Alliance will sustain operating
performance given stable end-consumer demand due to essential
services, customer replacement of aging equipment, introduction of
new products, retail distribution gains, and international
expansion. We estimate Alliance sales will increase in the 7%-9%
range in 2024 and 2%-4% in 2025.
"Alliance has passed through price increases and benefited from
lower commodity costs for key inputs such as steel. It has also
made product design and engineering improvements, strategically
exited low-margin customer relationships, reduced stock-keeping
units to remove high labor products and shifted production toward
larger capacity and more efficient machines. We estimate S&P Global
Ratings-adjusted EBITDA increased about 40% during the 12 months
ended June 30 compared with the same prior-year period. We expect
the EBITDA growth to slow in the second half of 2024 and into 2025,
because the company will no longer benefit from easier comparisons
of higher input costs, and we expect shipments will align more with
demand.
"Steel is a key input for the company, which it sources
domestically. We expect steel prices to remain steady in our
forecast, but a risk is the potential for higher costs if global
prices rise with tariffs or shifts in supply and demand. Under our
current assumptions, we forecast the company will deleverage to
about 6.6x by the end of fiscal 2024 and to about 6.2x by the end
of 2025, driven by a supportive demand and cost environment, and
improved product and customer mix. We also expect the company to
continue to generate robust free operating cash flow (FOCF) of over
$100 million annually.
"We believe the company will maintain aggressive financial
policies. While Alliance can reduce leverage, its financial
policies will likely prevent it from sustaining S&P Global
Ratings-adjusted leverage below 5x for an extended time.
Controlling shareholder BDT Capital Partners largely controls
Alliance's financial policies. The company has completed a dozen
small tuck-in acquisitions over the past five years. We expect it
will continue to seek out such opportunities to support geographic
expansion and strengthen its market position. We expect the company
will deploy most of its cash flow generation and excess debt
capacity toward opportunistic acquisitions and shareholder
distributions.
"The stable outlook reflects our expectation that Alliance will
sustain satisfactory operating performance, including healthy
EBITDA and cash flow, with S&P Global Ratings-adjusted leverage
below 7.5x over the next 12 months."
S&P could lower its ratings if operating performance deteriorates,
sustaining leverage above 7.5x. This could occur due to:
-- A macroeconomic downturn that results in customers deferring
replacement of laundry equipment;
-- Losses of market share due to increased competition;
-- Rising commodity, input, or other material costs including
steel, the price of which could increase if governments levy large
tariffs; or
-- More aggressive financial policies, including large
debt-financed acquisitions.
Although unlikely in the next 12 months, S&P could raise the
ratings if Alliance:
-- Commits to and demonstrates more conservative financial
policies, including sustaining leverage below 5x; and
-- Meaningfully improves its scale, product, and geographic
diversification.
S&P said, "Governance factors are a moderately negative
consideration in our credit rating analysis of Alliance. Our
assessment of the company's financial risk profile as aggressive
reflects corporate decision-making that prioritizes the interests
of controlling owners, in line with our view of most rated entities
owned by private-equity sponsors. Our assessment also reflects
generally finite holding periods and a focus on maximizing
shareholder returns."
ALPINE HOSPITALITY: Hits Chapter 11 Bankruptcy Protection
---------------------------------------------------------
Alpine Hospitality Inc. filed Chapter 11 protection in the District
of Colorado. 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
August 22, 2024 at 1:30 p.m. in Room Telephonically on telephone
conference line: 888-497-4718. participant access code: 6026644#.
About Alpine Hospitality Inc.
Alpine Hospitality Inc. sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Col. Case No. 24-14064) on July 19,
2024. In the petition signed by Wanda Bertoia, as president, the
Debtor reports estimated assets and liabilities between $1 million
and $10 million each.
Honorable Bankruptcy Judge Joseph G. Rosania Jr. handles the case.
The Debtor is represented by:
Jeffrey S. Brinen, Esq.
KUTNER BRINEN DICKEY RILEY PC
1660 Lincoln Street, Suite 1720
Denver, CO 80264
Tel: 303-832-2400
Email: jsb@kutnerlaw.com
ALTERNATIVE LOGISTICS: Commences Subchapter V Bankruptcy Process
----------------------------------------------------------------
Alternative Logistics LLC filed Chapter 11 protection in the
District of New Hampshire. 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
August 22, 2024 at 10:00 a.m. in Room Telephonically.
About Alternative Logistics LLC
Alternative Logistics LLC is a veteran-owned third party logistics
(3PL) company based in Nashua, New Hampshire. Alternative Logistics
provides order processing and fulfillment, warehousing, inventory
management and purchasing, shipping, accounts receivable, product
handling, and call center services.
Alternative Logistics LLC sought relief under Subchapter V of
Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. N.H. Case No.
24-10503) on July 19, 2024. In the petition filed by Leo White, as
manager, the Debtor reports estimated assets up to $50,000 and
estimated liabilities between $1 million and $10 million.
Honorable Bankruptcy Judge Bruce A. Harwood oversees the case.
The Debtor is represented by:
Eleanor Wm. Dahar, Esq.
VICTOR W. DAHAR PROFESSIONAL ASSOCIATION
20 Merrimack Street
Manchester, NH 03101
Tel: (603) 622-6595
Fax: (603) 647-8054
Email: vdaharpa@att.net
ALTITUDE GROUP: Voluntary Chapter 11 Case Summary
-------------------------------------------------
Debtor: The Altitude Group, LLC
DBA Core Home Security
1095 Broke Sound Parkway
Suite 203
Boca Raton, FL 33487
Business Description: The Debtor is a security system supplier in
Boca Raton, Florida.
Chapter 11 Petition Date: August 1, 2024
Court: United States Bankruptcy Court
Southern District of Florida
Case No.: 24-17893
Judge: Hon. Erik P Kimball
Debtor's Counsel: Tate M. Russack, Esq.
RLC, PA LAWYERS & CONSULTANTS
7999 North Federal Highway
Suite 102
Boca Raton, FL 33487
Tel: (410) 505-4150
Email: Tate@russack.net
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Ryan Neill as manager.
The Debtor failed to include in the petition a list of its 20
largest unsecured creditors.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/WINGYQY/The_Altitude_Group_LLC__flsbke-24-17893__0001.0.pdf?mcid=tGE4TAMA
AMAG ENTERPRISES: Unsecureds to Split $5K over 5 Years
------------------------------------------------------
AMAG Enterprises, LLC, submitted a Second Amended Plan of
Reorganization under Subchapter V dated July 16, 2024.
The Debtor is a limited liability company under the laws of the
State of Georgia. It was formed in 2015 and operates as Global Seed
Coatings. It provides agricultural seed coatings to seed producers
for further sale into the residential and commercial markets.
Class 13 shall consist of all Allowed Unsecured Claims. Class 13
shall include, but not be limited to, Allowed Unsecured Claims held
by Capital One, N.A., Claim No. 10; Cellco Partnership d/b/a
Verizon Wireless, Claim No. 12; and the unfiled claim of Glenn
Griffin in the amount of $291,000.00.
The claims in Class 13 shall be paid on a pro rata share of
$5,000.00 via annual payments over the course of the plan term of 5
years. Each holder of an Allowed Unsecured Claim shall be paid by
the Debtor (or Trustee, as the case may be) their pro rata share of
each annual distribution within 30 days of the annual payment due
date, as described in in Article VI of the plan.
All payments shall be made from the Debtor's future earnings, from
the liquidation of its assets, or from loans, contributions or
gifts to the Debtor.
For Class 13 claims, Debtor shall fund annual payments of
$1,000.00, with the first payment due on the anniversary of the
Effective Date. Payments will be completed within 60 months/5 years
following the Effective Date.
The Debtor may prepay any and all obligations under the Plan, in
whole or in part, without penalty or charge of un-accrued interest.
If interest is current at the time of pre-payment, the Debtors may
apply said prepayments to principal either to reduce the number of
remaining payments or the dollar amount of each of the remaining
installments. All payments from liquidation or otherwise shall be
applied first to accrued or compounded interest on claims.
A full-text copy of the Second Amended Subchapter V Plan dated July
16, 2024 is available at https://urlcurt.com/u?l=me8ENr from
PacerMonitor.com at no charge.
Attorney for the Debtor:
Daniel L. Wilder
Law Offices of Emmett L. Goodman, Ir., LLC
544 Mulberry Street, Suite 800
Macon, GA 31201-2776
Tel: (478) 745-5415
Fax: (478) 746-8655
Email: dwilder@goodmanlaw.org
About AMAG Enterprises
AMAG Enterprises, LLC, provides support activities for crop
production. The company is based in Sycamore, Ga.
The Debtor filed a Chapter 11 petition (Bankr. M.D. Ga. Case No.
23-10627) on July 31, 2023, with $513,250 in assets and $1,970,991
in liabilities. Amanda G. Brock, sole member, signed the
petition.
Judge Austin E. Carter oversees the case.
Daniel L. Wilder, Esq., at Emmett L. Goodman Jr, LLC, is the
Debtor's legal counsel.
AMENTUM HOLDINGS: Fitch Assigns 'BB+' Rating on Sr. Unsecured Notes
-------------------------------------------------------------------
Fitch Ratings has assigned 'BB+'/'RR4' first-time ratings to
Amentum Holdings, Inc.'s (Amentum) new senior unsecured notes.
Proceeds will primarily be used to finance Amentum's merger with
Jacobs' Critical Mission Solutions (CMS) and Cyber and Intelligence
(C&I) business units. Fitch rates Amentum's Long-Term Issuer
Default Rating (IDR) at 'BB+', and term loan and revolver at
'BBB-'/'RR1'. The Rating Outlook is Stable.
Amentum's ratings are supported by the company's increased size and
scale following the merger, which Fitch anticipates will strengthen
the company's capabilities across the lifecycle and market position
as a leading government technology services provider. Amentum's
credit profile is bolstered by its diversified, cost-plus weighted
contract base across large, growth-oriented end markets, multi-year
backlog (about 3.5x revenue), competitive renewal rates, positive
FCF generation and exposure to various industry tailwinds.
Risks to the credit profile include integration challenges,
potential cost overruns on fixed priced contracts, competitive
pressures, or any major shifts in budget priorities or spending by
the U.S. government and other government customers.
Key Rating Drivers
Amentum's 'BB+' IDR is constrained by its capital structure and
financial policy, which Fitch views as consistent with 'BB+' rating
tolerances. Fitch projects pro forma EBITDA leverage to be
approximately 4.5x post-merger. Management plans to reduce debt,
excluding factoring, to its net EBITDA leverage target of 3.0x by
2026. Fitch views the company's deleveraging plans as achievable
given its majority contracted revenue profile which supports $400
million to $600 million of annual FCF available to be used for debt
repayment, leading to Fitch-calculated gross EBITDA leverage,
including factoring, of 3.5x in FY 2026.
Amentum and Jacobs' Business Units Merger: Amentum announced its
plans to merge with Jacobs' CMS and C&I businesses to enhance its
market position as a leading technology solutions provider. The
transaction is expected to close in 2H24. The combined entity is
positioned to benefit from a more diversified and stable revenue
base, primarily derived from government contracts, and poised for
growth in higher-margin areas such as intelligence and
cybersecurity. Identified net cost synergies of $50 million to $70
million within 24 months support the merger's potential to drive
operational efficiencies and longer-term financial stability.
Fitch expects that Jacobs and its shareholders will own up to 63%
of Amentum (with Jacobs' shareholders holding at least 51% and
Jacobs itself holding between 7.5% and 8%), while Lindsay Goldberg
and American Securities will own the remaining 37%. Fitch does not
view governance risk as a rating constraint due to the company's
public commitment to reducing debt and achieving a net leverage of
3.0x, as well as the expectation that ownership and board
representation will transition over the coming years.
Enterprise Model, Front-End Investment Provide Growth Potential:
The company intends to focus on an enterprise operating model to
integrate its capabilities, aiming to unlock potential synergies.
Focused investment in the front-end of the government acquisition
lifecycle should enhance the company's ability to secure business
wins and add value for customers. However, this approach requires
investment and is susceptible to uncertain win rates and potential
delays, leading to lower margins than peers.
The broad applicability of advanced technology solutions allows the
opportunity for the company to leverage its technology and
expertise across various end markets. Engagement in the beginning
of the lifecycle favorably positions Amentum for involvement in
later stages, which can lead to long-term customer relationships.
The company's expanded post-merger capabilities also provide an
opportunity to further deepen existing customer relationships and
enhance its competitiveness on new contracts.
Diversified Contracts, Backlog Support Revenue Visibility: Fitch
considers Amentum to have a high degree of revenue visibility,
which supports the 'BB+' rating. The company's revenue visibility
is underpinned by its highly diversified contract base, multi-year
backlog and competitive renewal rates. The company exhibits
competitive recompete win rates in line with the industry average,
bolstering predictability of revenue from existing contracts.
No single contract contributes more than 3% of EBITDA, which
reinforces the strength of the cash flow profile, minimizes the
company's dependence on any individual contract and limits downside
risk. The company's robust backlog of more than $45 billion
increases revenue visibility, with approximately 65% of contracts
being cost-reimbursable providing greater near-term stability to
the credit profile.
Fitch understands growth opportunities may result in contract mix
shift increasingly toward fixed-price contracts, but views the
incremental margin risk as manageable given management's bidding
track record and program review process. Amentum also benefits from
its defense-weighted end market exposure of over 45% with
Energy/Environmental, Space, Intelligence, and Civilian each
contributing about 10%-15% of revenue.
Forecast Debt Repayment, Sub-3.5x Leverage: Fitch recognizes that
management's near-term focus will be on integration and operational
execution, which aims to maintain high earnings quality. Fitch's
rating case forecasts $400 million to $600 million of annual FCF in
fiscal years 2025-2026 supporting its expectation that management
will prioritize debt repayment to moderate financial risks during
this period.
Fitch's rating case forecasts EBITDA leverage, including factoring,
of approximately 3.5x in FY 2026. Fitch recognizes management may
shift its capital allocation priorities following its achievement
of a capital structure that provides flexibility to
opportunistically pursue growth-linked organic investments and M&A,
as well as shareholder returns. Positive rating momentum would
likely necessitate a shift in the capital structure and formulation
of a more conservative financial policy.
Stable, High-Single Digit Margins Expected: Amentum generates
EBITDA margins that are somewhat lower than other government
services peers mainly due to the relatively higher level of
cost-reimbursable contracts and enterprise investment approach.
However, Fitch views the company as having a comparatively higher
quality of earnings given the higher proportion of
cost-reimbursable contracts, as well as renewal and new business
win rates that are in line or better than peers, providing margin
stability. Fitch expects Amentum to generate stable EBITDA margins
around 7.5%-8% over the forecast horizon, with margin stability
dependent upon new business win rates remaining steady or higher
over time.
Derivation Summary
Fitch compares Amentum Holdings, Inc. with other government
technology service providers, such as KBR, Inc. (BB+/Stable),
Science Application International Corporation (SAIC, not rated
[NR]), Leidos (NR), and CACI (NR). Amentum's business profile
benefits from a higher degree of diversification across programs,
platforms and scope of work relative to most peers, which tend to
focus on IT service offerings or have more product focus.
Amentum's revenue visibility is supported by backlog coverage
exceeding 3.5x at FYE 2023. This is higher than the 2.5x-3.0x range
typically seen for KBR, SAIC, and Leidos, but slightly lower than
CACI, which usually maintains backlog coverage around or above
3.5x. Fitch views the business profile of Amentum consistent with
its peers and more reflective of an IG company's characteristics.
Fitch forecasts Amentum to progressively improve EBITDA leverage
toward the mid-3.0x range within 18 to 24 months following the
transaction close. This is slightly higher than the 2.5x-3.5x range
in which KBR, SAIC and CACI tend to fluctuate in. Meanwhile, Fitch
expects Leidos to maintain leverage in the 2.0x-3.0x range, which
is more consistent with 'BBB' rating category tolerances. Fitch
notes Amentum's EBITDA margins in the high single-digit range lag
behind peers, which are typically around 10%; however, Fitch
understands this is largely due to Amentum's higher degree of
cost-plus contracts that support above-average earnings quality and
cash flow stability.
Key Assumptions
- The company successfully integrates Amentum and Jacobs' business
units;
- Low to mid-single-digit revenue growth over the forecast,
supported by the company's high renewal rate and Amentum competing
in higher growth areas of government spending such as space,
intelligence and environmental solutions;
- EBITDA margins in the high single-digit range over the forecast,
supported by cost synergies following the merger;
- Minimal working capital cash requirements and capex under 0.5% of
revenue;
- Excess cash being deployed to debt paydown over the next two
years, in line with management's publicly stated financial policy
to reduce net leverage to 3.0x by 2026;
- Bolt-on M&A that enhances or expands capabilities as its
deleveraging progresses;
- SOFR assumed around 4.9% in 2025, declining to 4% through 2027;
applicable margin for revolver assumed between 1.75%-2%, term loan
assumed at 2.25%-2.5%.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade:
- Demonstrated commitment to a financial policy supporting EBITDA
leverage sustained below 3.0x;
- Establishment of a balanced capital allocation plan preserving
through-the-cycle financial flexibility;
- Maintenance of strong backlog and diversification that supports
revenue visibility;
- A less encumbered capital structure.
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade:
- Deviation from stated financial policy and failure to execute on
stated deleveraging path, leading to EBITDA leverage sustained
above 3.5x;
- Sustained decline in the backlog trend or below average recompete
win rates that leads to heightened cash flow risk;
- Significant loss on one of its fixed price contracts or poor
execution on existing contracts that significantly impacts the
company's profitability, cash flow generation or ability to win
future contracts.
Liquidity and Debt Structure
Adequate Liquidity: Fitch expects the company's liquidity to be
sufficient over the rating horizon. Liquidity and financial
flexibility are further bolstered by the company's cash generation.
The company's pro forma capital structure is expected to be
comprised of first lien revolver and term loan, as well as
unsecured notes.
Issuer Profile
Amentum is an advanced technology solutions provider to domestic
and international governments across the defense, space, civilian,
intelligence and environmental end markets. The company will be the
result of the merger of Jacobs' CMS and C&I business units with
legacy Amentum. The initial debt issuer will be Amentum Escrow
Corporation and, upon closing of the merger, the escrow issuer will
merge with and into the obligor, Amentum Holdings, Inc., a new,
publicly traded entity.
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.
Date of Relevant Committee
July 16, 2024
Entity/Debt Rating Recovery
----------- ------ --------
Amentum Holdings, Inc.
senior unsecured LT BB+ New Rating RR4
AMENTUM HOLDINGS: Moody's Rates New $1.25BB Unsecured Notes 'B3'
----------------------------------------------------------------
Moody's Ratings assigned a B3 rating to Amentum Holdings, Inc.'s
new $1.25 billion 8-year senior unsecured notes. The issuance does
not impact other ratings of Amentum, including the B1 corporate
family rating, B1-PD probability of default rating, and Ba3 senior
secured first lien bank credit facility ratings. The rating outlook
is stable.
Proceeds from the senior unsecured notes and $3.5 billion 7-year
term loan will help fund the merger between Amentum and Jacobs
Engineering Group Inc.'s (Jacobs) Critical Missions Solutions (CMS)
and Cyber and Intelligence (C&I) businesses, refinance the
company's existing debt, partially fund a dividend to Jacobs and
fund transaction costs. Financial leverage will decline as a result
of the merger because earnings from the acquired businesses will
more than offset the increase in Amentum's pre-transaction debt.
RATINGS RATIONALE
The B1 CFR rating reflects Amentum's significant scale and
favorable end market, customer, and contract diversity. Following
the merger, the company will be one of the largest service
contractors to the US Federal Government. Revenue on a proforma
basis for the combination was $13.4 billion in fiscal year 2023.
The CMS and C&I businesses will comprise about 40% of the company's
total revenue at transaction close; their design and engineering
services expertise will complement Amentum's existing services with
minimal overlap. No single customer contract contributes more than
3% to annual EBITDA. Roughly half of annual revenue is generated
from contracts with the US Department of Defense and half from
other federal agencies as well as international and commercial
customers. Moody's expect Amentum's enhanced scale will enable the
company to bid on larger and more complex work that will drive
incremental margin improvement. Combined backlog of over $47
billion supports revenue stability and good medium-term
visibility.
The ratings are constrained by Amentum's limited operating history
at its larger size that will result from the merger, high financial
leverage and low margins. The merger with the CMS and C&I
businesses will be the company's largest of three sizable
combinations since Amentum's leveraged buyout in 2020 which adds
integration risk. The transaction is deleveraging, but pro forma
debt/EBITDA is somewhat elevated at 4.6 times. The modest EBITDA
margin of 8% reflects the competitive market and Amentum's high
exposure to generally less profitable "cost plus" contracts.
The ratings also reflect that, concurrent with the transaction,
Amentum will convert to a publicly listed company from a privately
held one. As a result, Moody's expect financial policies will be
more conservative, which is a governance consideration. Moody's
expect Amentum will prioritize repayment of debt to reduce leverage
ahead of shareholder distributions.
The speculative grade liquidity rating of SGL-2 reflects Moody's
view that Amentum will maintain good liquidity. Excluding the
one-time dividend to Jacobs, Moody's expect initial annual free
cash flow of approximately $300 million in fiscal 2025 to expand in
subsequent years from steady modest growth in demand for its
services and lower interest expense. Minimum cash on hand of $300
million and the planned $850 million senior secured revolving
credit facility, which will remain undrawn at close, will provide
an ample cushion.
The stable outlook reflects Moody's expectation that Amentum will
continue to reduce financial leverage towards 4.0 times and
maintain good liquidity while successfully integrating the acquired
businesses over the next 12-18 months.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Ratings may be upgraded if debt/EBITDA approaches 3.5 times,
EBIT/interest expense approaches 3.0 times and free cash flow/debt
is sustained above 5.0%.
Ratings may be downgraded if debt/EBITDA approaches 5.0 times,
liquidity weakens, free cash flow turns negative, or operating
margin deteriorates.
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 a to be determined (TBD) amount
and 100% of LTM Consolidated EBITDA, plus unused capacity from the
debt covenant (reallocated incremental amount), plus unlimited
amounts subject to a 4.5 times first lien net leverage ratio. There
is an inside maturity sub-limit up to the greater of a TBD amount
and 100% of LTM consolidated EBITDA, plus reallocated incremental
amounts, or incurred in connection with an acquisition or
investment.
A "blocker" provision restricts the transfer of material
intellectual property to unrestricted subsidiaries but multiple
restricted payments carve-outs may instead provide additional
investment capacity, which may be used for drop-downs. There are no
protective provisions restricting an up-tiering transaction.
Amounts up to 200% of unused capacity from certain additions to the
builder basket may be reallocated to incur debt; 100% of unused
capacity from the general restricted payment basket and general
restricted debt payment basket may be used to incur unsecured debt.
Headquartered in Chantilly, VA, Amentum Holdings, Inc. is a global
provider of engineering, project management and solutions
integration and other services. The CMS and C&I businesses provide
national security, cybersecurity and engineering services. Pro
forma revenue for fiscal 2023 was $13.4 billion.
The principal methodology used in these ratings was Aerospace and
Defense published in October 2021.
AMERGENT HOSPITALITY: Kicks Off Chapter 11 Bankruptcy
-----------------------------------------------------
Amergent Hospitality Group Inc. filed Chapter 11 protection in the
Northern District of Texas. According to court filing, the Debtor
reports between $1 million and $10 million in debt owed to 1 and 49
creditors.
A meeting of creditors under 11 U.S.C. Section 341(a) is slated for
August 21, 2024 at 2:30 p.m. in Room Telephonically.
About Amergent Hospitality Group Inc.
Amergent Hospitality Group Inc. operates a fast food restaurant
concept.
Amergent Hospitality Group Inc. sought relief under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. N.D. Tex. Case No. 24-42483) on
July 18, 2024. In the petition filed by Mike Pruitt, as president,
the Debtor reports estimated assets and liabilities between $1
million and $10 million each.
The Debtor is represented by:
Richard Grant, Esq.
CULHANE, PLLC
13101 Preston Road, Suite 110-1510
Dallas TX 75240
Tel: 214-210-2929
E-mail: rgrant@cm.law
AMERICAN ROCK: S&P Cuts ICR to 'CCC-' on Heightened Default Risk
----------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on American
Rock Salt Co. LLC to 'CCC-' from 'CCC+'.
S&P said, "We also lowered our issue-level rating on company's
first-lien debt to 'CCC-' from 'CCC+' and revised our recovery
rating to '4' from '3'. At the same time, we lowered our
issue-level rating on the company's second-lien debt to 'C' from
'CCC-'. The associated recovery rating remains '6'.”
The negative outlook reflects the company's weakening liquidity
position and significant risk of a default or debt restructuring
this year.
The downgrade reflects our belief of heightened default risk due to
weakening liquidity.
American Rock Salt has significant quarterly interest coming due in
August 2024, at a time when the company's liquidity has
deteriorated. Earnings for the first half of 2024 declined sharply
and resulted in significant negative free cash flow as of March 31,
2024, which we expect will persist over the following two or three
quarters before the typical peak of the next winter season. The
company had total liquidity of about $31 million on March 31, 2024,
composed of $8.8 million of cash on the balance sheet and $7.2
million and $15 million available, under its asset-based lending
(ABL) facility and supplemental credit facility, respectively.
However, this liquidity has been heavily consumed to finance the
company's operations and other fixed charges in the third quarter.
S&P said, "As a result, the company is now pressured by its
upcoming interest obligation and we believe the company could miss
this payment due on Aug. 28, 2024, absent any capital injection or
other favorable change in company's circumstances. While we do note
the increased likelihood of support from its owners, as the company
recently received in the second quarter, such support has not been
finalized or communicated at this time."
American Rock Salt could get a temporary liquidity boost from its
ABL on Sept. 1, 2024, but it will still require several quarters of
good operating results for a sustained improved liquidity
position.
Annually, the company's credit agreement allows them to borrow up
to $70 million from Sept 1 to March 1, after which it steps down to
a maximum of $35 million, to match the seasonality of its working
capital needs. As a result, the company could have access to the
full facility amount starting Sept. 1, 2024, which would offer a
boost to the company's liquidity. However, this may be short lived
given the company's high interest rate burden and shortening
maturity profile from the short-term nature of the supplemental
credit facilities. Since fiscal 2023, American Rock Salt has been
reliant on additional short-term financing to finance its working
capital needs, which we believe is indicative of a weakening
liquidity position. The company sourced a 12-month supplemental
working capital facility of $30 million in fiscal 2023 and extended
the maturity by an additional year to March 2025 to provide extra
liquidity cushion following the weak earnings reported in first
quarter of fiscal 2024. While the company continues to use debt to
finance liquidity shortfalls, S&P believes this capital structure
is unsustainable and could increase overall default risks given
rising interest expenses and uncertainty surrounding its
operational performance.
S&P said, "We believe the company has the potential to recover some
of the volumes it lost to competitors last year as its low
production costs provide flexibility to compete on price. However,
the company's business is still highly dependent on favorable
winter weather to realize the full potential of its earnings
ability, even if it wins a majority of tender results.
"The negative outlook reflects the company's weakening liquidity
position and the amplified risk of a default or debt restructuring
within the next six months.
"We could lower our rating on American Rock Salt within the next 12
months if we expect a default to be a virtual certainty. This could
occur if the company misses an interest payment or if it announced
plans to miss upcoming interest or principal payments. Similarly,
we could lower our ratings if the company were to undertake an
exchange offer with debt holders that we consider to be
distressed.
"We could raise our ratings on American Rock Salt if the company
successfully meets its upcoming interest obligation. At the same
time, we would expect an improving liquidity position that will be
sufficient to cover its fixed charges and finance its operations
over the next few quarters."
AMERICANAS SA: Gets NY. Judge Approval for Reorganization in Brazil
-------------------------------------------------------------------
Clara Geoghegan of Law360 Bankruptcy Authority reports that a New
York bankruptcy judge said his trepidation around how Brazilian
department store chain Americanas' bankruptcy plan treats creditors
that don't give legal releases to nondebtor third parties was
quelled, and granted his Chapter 15 sign-off for a plan that was
already approved by a court in Rio de Janeiro.
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.
AOG TRUCKING: Seeks Chapter 11 Bankruptcy Protection in Florida
---------------------------------------------------------------
AOG Trucking Inc. filed Chapter 11 protection in the Middle
District of Florida. According to court documents, the Debtor
reports between $1 million and $10 million 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
August 14, 2024 at 2:00 p.m. in Room Telephonically on telephone
conference line: 866-718-3566. participant access code: 2721444#.
About AOG Trucking Inc.
AOG Trucking Inc. is a transportation and trucking company
specializing in the aviation & aerospace sectors. Its services
include transporting large commercial airline engines and major
flight structures, but its expertise extends beyond flight
equipment to include Ground Support Equipment (GSE), and
encompassing over-dimensional loads.
AOG Trucking Inc. sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. M.D. Fla. Case No. 24-02050) on July 17,
2024. In the petition filed by R. Brian Butler, as president, the
Debtor reports estimated assets and liabilities between $1 million
and $10 million each.
The Honorable Bankruptcy Judge Jason A. Burgess oversees the case.
The Debtor is represented by:
Thomas Adam, Esq.
ADAM LAW GROUP, PA
2258 Riverside Ave
Jacksonville, FL 32204
Email: tadam@adamlawgroup.com
ARDENT HEALTH: S&P Alters Outlook to Positive, Affirms 'B' ICR
--------------------------------------------------------------
S&P Global Ratings affirmed its 'B' issuer credit rating and
revised the outlook to positive from stable. In addition, S&P
affirmed the 'B' rating on the term loan B and 'CCC+' rating on the
senior unsecured notes. The recovery ratings of '3' (rounded
recovery estimate: 65%) and '6' (rounded recovery estimate: 0%) on
this debt, respectively, are unchanged.
The positive outlook reflects the possibility of an upgrade over
the next 12 months if Ardent continues to improve its performance
through the second half of this year and S&P believes the company,
post IPO, is committed to maintaining S&P Global Ratings-adjusted
leverage between 3.5x-4x.
S&P said, "The positive outlook reflects our expectation for
meaningful deleveraging and improving cash flow. We expect Ardent
will delever to 4x by the end of this year, from 5x in 2023. We
forecast further volume growth and improving profitability as
evidenced by an increase in its S&P Global Ratings-adjusted EBITDA
margin to 9.9% during the first quarter of 2024 compared to 8.6% in
first quarter of 2023, will drive trailing-12-month first-quarter
2024 S&P Global Ratings-adjusted leverage of 4.6x to decline
further throughout this year. Our base case is for S&P Global
Ratings-adjusted leverage of 4x in 2024, remaining in the 3.5x-4x
range for the subsequent two years.
"In addition to deleveraging, we expect discretionary cash flow to
follow improving profitability. We expect discretionary cash flow
to increase to about $80 million in 2024 from $20 million in 2023.
We think that higher working capital outflows, possibly higher
capital expenditures (capex), and a jump in distributions to JV
partners will result in a modest decline to about $35 million to
$40 million in 2025.
"Good business prospects suggest Ardent can sustain its stronger
credit profile, despite heavy concentration in Oklahoma and Texas
and uncertainty around subsidies. We expect favorable acute-care
hospital industry trends, most notably higher patient volume and
faster-than-expected improvement in labor, will persist through at
least the end of this year. We expect organic growth, as well an
anticipated expansion in its ambulatory segment, will lead to 7.4%
revenue growth in 2024 and 7.1% in 2025. Those expectations include
substantial new inflows from state subsidy programs including the
Oklahoma Medicaid program (which began April 2024) and New Mexico,
assuming CMS approves the programs they begin in early 2025. In
addition, Ardent is expanding its ambulatory care sites in existing
and adjacent markets. We expect the addition of the state subsidy
payments coupled with the expansion of the higher-margined
ambulatory segment will help drive EBITDA margins higher.
"Some key risks to our base case remain. First, Ardent's facilities
are heavily concentrated in Texas and Oklahoma (21 of its 30
hospitals are located in those two states) and represent 60% of
total revenue. This makes the company more susceptible to changes
in regulatory, economic, and competitive conditions in either of
those two states. Second, there is annual appropriation risk for
the state supplemental payments programs.
"Ardent's sponsor ownership and lack of public financial policy
track record remain important considerations. We are beginning to
view Ardent's financial policy more favorably. Though now a public
company, Ardent is still controlled by EGI, although ownership fell
by 10%, to 54% after the IPO. However, we believe the risk of
re-leveraging is relatively low based on what we think is the
company's financial policy, which includes a June 2024 $100 million
term loan prepayment, low expectations for substantial dividends,
and little appetite for large debt-financed acquisitions. However,
its commitment to upholding such a financial policy remains
uncertain given its limited track record.
"The positive outlook reflects the possibility of an upgrade over
the next 12 months if Ardent sustains its performance improvement
through the second half of this year and we believe the company,
post IPO, is committed to maintaining S&P Global Ratings-adjusted
leverage between 3.5x-4x.
"We could raise our rating on Ardent if the current favorable
industry trends continue through the second half of this year and
we expect it to remain relatively strong such that S&P Global
Ratings-adjusted leverage remains below 5x and discretionary cash
flow (DCF) to debt is about 2% (which we estimate is around $50
million). We also need to believe the company is committed to
sustaining leverage below 5x.
"We could revise the outlook to stable if leverage increases, and
we expect it to remain above 5x. This could occur if Ardent
experiences deterioration in reimbursement, or the company's
acquisition and financial policies become very aggressive. This
could also occur if the anticipated benefits from Ardent's
ambulatory expansion strategy fail to materialize."
ARTIUSID INC: Motion to Dismiss Involuntary Ch. 7 Petition Tossed
-----------------------------------------------------------------
Judge Christopher Bradley of the United States Bankruptcy Court for
the Western District of Texas denied ArtiusID, Inc.'s motion to
dismiss the involuntary chapter 7 bankruptcy petition filed by its
creditors, Goldstein Consulting Services, LLC, Xmogrify, LLC, and
Rearc LLC.
Three creditors seek to force the alleged debtor into bankruptcy
because it has not paid them for services provided. They submitted
invoices, at least some of which were approved for payment, and
those invoices are the source of their claims against the alleged
debtor. They have pending lawsuits against the alleged debtor in
two New York state courts. None of these suits appear to be far
advanced.
The alleged debtor has answered each complaint, denying liability
and raising various affirmative defenses. It has also brought
counterclaims for breach of contract (citing poor performance) and
breach of confidentiality provisions, but the Court has been
provided with few details concerning these alleged breaches or the
harms allegedly suffered by the alleged debtor.
The petitioning creditors assert that they brought this involuntary
bankruptcy because the alleged debtor had changed its name to
ArtiusID from Q5id, Inc. and moved its location. They were
concerned that the alleged debtor was seeking to disappear to
escape its debts. In addition, the alleged debtor apparently
provides identity theft-prevention services and holds significant
personal information of its customers, and the petitioning
creditors say that the alleged debtor has breached its obligations
to customers and rendered their sensitive information unavailable
to them.
The petitioning creditors filed their involuntary chapter 7
bankruptcy petition against the alleged debtor on November 30,
2024. The alleged debtor filed a motion to dismiss on December 19,
2024. It also moved for a bond under section 303(e), which the
Court denied.
The alleged debtor argues the creditors' claims are subject to a
bona fide dispute and therefore the creditors are not eligible to
force it into bankruptcy.
The petitioning creditors insist they are eligible because:
(1) the alleged debtor concedes that several of their invoices
are not contested, and these undisputed invoices represent separate
"claims" that independently establish their eligibility;
(2) even if their invoices are all deemed to constitute a single
"claim," a significant portion -- above the required statutory
threshold -- of each creditor's claim is uncontested, so they are
eligible; and
(3) in any case, no portion of each creditor's claim is actually
subject to a bona fide dispute because the invoices were approved
by the alleged debtor for payment well in advance of the bankruptcy
filing and there is no objective basis to dispute them.
The Court disagrees with the petitioning creditors on the first two
points but agrees with them on the third. First, the Court points
out while the petitioning creditors are correct that the analysis
of eligibility to force an alleged debtor into bankruptcy should
proceed on a claim-by-claim basis -- the statutory text is clear
that creditors who hold at least one uncontested "claim" can be
eligible, even if a creditor holds other claims that are contested
-- they have failed to show that their various invoices amount to
more than one "claim." To the contrary, based on the thin record
that has been made by the parties, all of the invoices seem to
relate to the same basic contractual relationship and set of
services, the Court finds. Thus, the petitioning creditors each
have only one claim related to their unpaid invoices, the Court
holds.
Second, an uncontested portion of a claim is not enough to "save"
eligibility if another portion of that same claim is contested, the
Court says. Some courts and commentators believe this result is
incorrect or absurd and have read a "materiality" requirement into
the Bankruptcy Code, but the Court respectfully disagrees with
these authorities. The statute is unambiguous, and the result is
not absurd, the Court adds. The weight of precedent favors this
result as well, and the Court will follow it.
Third, however, the alleged debtor has failed to show that any
portion of the creditors' claims is, in fact, subject to a bona
fide dispute, the Court further holds. While there is pending
litigation concerning the creditors' claims, and even pending
counterclaims against the creditors, the evidence for the alleged
debtor's position is thin and insubstantial. Despite ample
opportunity to demonstrate that there is an objective basis for a
dispute, the alleged debtor has failed to do so, the Court
concludes. Because there is no bona fide dispute, the Court will
deny the motion to dismiss.
A copy of the Court's decision dated July 23, 2024, is available at
https://urlcurt.com/u?l=QTPorr
ArtiusID is a software company based in Austin, Texas. An
involuntary Chapter 7 petition was filed against ArtiusID, Inc.
(Bankr. W.D. Texas Case No. 23-11007) on Nov. 30, 2023, before the
Hon. Christopher G. Bradley.
ASPIRA WOMEN'S: Appoints John Ragard to its Board of Directors
--------------------------------------------------------------
Aspira Women's Health Inc. announced July 29 the appointment of Mr.
John Ragard to its Board of Directors. Mr. Ragard is an
accomplished executive with extensive experience successfully
managing several billion-dollar portfolios over his career.
"We are pleased to welcome John to our Board of Directors," said,
Ms. Jannie Herchuk, Chairwoman of the Board at Aspira Women's
Health. "John brings a wealth of experience and a keen
understanding of Wall Street, having been a successful money
manager for the past four decades. He will be an important voice
on our Board as we continue to build Aspira to be a world-class
company delivering a new standard of care in women's health."
Nicole Sandford, chief executive officer of Aspira Women's Health
said, "John is an excellent addition to the Board. As a seasoned
investment professional, John understands what Aspira needs to do
to attract and retain long-term investors. He has followed the
company closely for many years and, as a result, will quickly add
valuable insight to help us execute the next phase of accelerated
growth."
Mr. John Ragard spent over 46 years as a venture capital investor,
public equity buy-side analyst, and portfolio manager. Mr. Ragard
is currently a Senior Investment Advisor at Wayve Capital
Management after having been a portfolio manager at Spouting Rock
for over six years, where he co-managed a small-cap growth
portfolio that outperformed the benchmark over the 5-year and
since-inception periods. Prior to Spouting Rock, Mr. Ragard was a
portfolio manager at Friess Associates where he outperformed the
Russell 3000 Growth Index by over 400 basis points annually for
over 20 years. Mr. Ragard received his Bachelor of Science in
Economics cum laude from the Wharton School and is a Chartered
Financial Analyst.
Mr. Ragard added, "I am excited to join this group of committed
directors. I have long believed in the promise of Aspira's
compelling portfolio, and I look forward to working closely with
them as we take the company to the next level."
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.
ASPIRA WOMEN'S: Secures $2.14 Million in Warrant Inducement Deal
----------------------------------------------------------------
Aspira Women's Health Inc. disclosed in a Form 8-K Report filed
with the U.S. Securities and Exchange Commission that on July 31,
2024, the Company entered into a warrant inducement agreement with
the holder of (i) a warrant to purchase 311,111 shares of common
stock of the Company dated August 22, 2022 and (ii) a warrant to
purchase 1,400,000 shares of Common Stock dated January 26, 2024
pursuant to which the Holder agreed to exercise in cash the August
2022 Warrant and the January 2024 Warrant at a reduced exercise
price of $1.25 per share (reduced from $4.13 per share for the
August 2022 Warrant and $4.13 for the January 2024 Warrant), for
gross proceeds to the Company of approximately $2.14 million. As an
inducement to such exercise, the Company agreed to issue to the
Holder unregistered warrants to purchase up to 2,566,667 shares of
Common Stock at an exercise price of $1.36, immediately exercisable
upon issuance, for a term of five years.
The shares of Common Stock issuable upon exercise of the August
2022 Warrant are registered pursuant to the Company's Registration
Statement on Form S-3 (File No. 333-252267), which was filed with
the Securities and Exchange Commission on January 20, 2021 and
declared effective by the SEC on January 28, 2021, and prospectus
supplement related thereto. The shares of Common Stock issuable
upon exercise of the January 2024 Warrant are registered pursuant
to the Company's Registration Statement on Form S-1 (File No.
333-278543), which was filed with the Securities and Exchange
Commission on April 5, 2024 and declared effective by the SEC on
April 11, 2024.
In the event that a warrant exercise would cause the Holder to
exceed the beneficial ownership limitation set forth in the New
Warrants, the Company shall only issue such number of shares that
would not cause the Holder to exceed the maximum amount permitted
thereunder, with the balance to be held in abeyance until notice
from the Holder that the balance (or portion thereof) may be issued
in compliance with such limitations. In the event that the shares
underlying the New Warrants are not subject to an effective
registration statement at the time of exercise, the New Warrants
may be exercised on a cashless basis at any time after the issuance
date.
In connection with the transactions contemplated in the Warrant
Inducement Agreement, the Company entered into a financial advisory
agreement with A.G.P./Alliance Global Partners. Pursuant to the
terms of the Financial Advisory Agreement, A.G.P. will receive a
$150,000 cash fee. Additionally, the Company agreed to reimburse
A.G.P. for its documented accountable legal expenses.
The Company intends to use the net proceeds received from the
Inducement Transaction for general working capital and general
corporate purposes.
The terms of the Warrant Inducement Agreement require the Company
to file a registration statement registering the shares underlying
the New Warrants for resale no later than August 30, 2024 and to
use commercially reasonable best efforts to cause the Resale
Registration Statement to be effective within 60 calendar days
following the filing thereof.
The Company further agreed that until 60 days after the closing
date of the Inducement Transaction, it will not (other than in
connection with limited enumerated exceptions) (i) issue, enter
into any agreement to issue or announce the issuance or proposed
issuance of any shares of Common Stock or Common Stock equivalents
or (ii) file any registration statement or any amendment or
supplement thereto, in each case other than as contemplated
pursuant to the Warrant Inducement Agreement. The Company is
further prohibited from entering into any "variable rate
transaction" for a period of six months from the effective date of
the Resale Registration Statement.
The Warrant Inducement Agreement also contains customary
representations and agreements, including a provision for
liquidated damages owed by the Company in the event that the shares
underlying the New Warrants are not timely delivered upon future
exercises of the New Warrants.
The New Warrants contain:
(i) customary stock-based anti-dilution protection,
(ii) a cashless exercise provision in the event the shares
underlying the New Warrants are not registered for resale at the
time of exercise,
(iii) beneficial ownership limitations that may be waived at the
option of the Holder upon 61 days' notice to the Company,
(iv) a put right granting the Holder the right to require the
Company or its successor to redeem the New Warrants in cash for
their Black-Scholes value in the event of a Fundamental Transaction
and
(v) other customary provisions for warrants of this type.
About Aspira Women's Health
Formerly known as Vermillion, Inc., Aspira Women's Health Inc. --
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.
Aspira Women's Health reported a net loss of $16.69 million for the
year ended Dec. 31, 2023, compared to a net loss of $29.88 million
for the year ended Dec. 31, 2022. As of March 31, 2024, the Company
had $7.16 million in total assets, $8.53 million in total
liabilities, and a total stockholders' deficit of $1.36 million.
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 the 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.
ATA HOLDINGS: Hits Chapter 11 Bankruptcy in Louisiana
-----------------------------------------------------
ATA Holdings LLC filed Chapter 11 protection in the Eastern
District of Louisiana. The Debtor reports between $1 million and
$10 million 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
August 19, 2024 at 1:00 p.m. in Room Telephonically on telephone
conference line: 866-790-6904. participant access code: 3156784.
About ATA Holdings LLC
ATA Holdings LLC is primarily engaged in renting and leasing real
estate properties.
ATA Holdings LLC sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. La. Case No. 24-11366) on July 16, 2024.
In the petition signed by Adam Ackel, as manager, the Debtor
reports estimated assets and liabilities between $1 million and $10
million each.
The Honorable Bankruptcy Judge Meredith S. Grabill oversees the
case.
The Debtor is represented by:
Janna C. Bergeron, Esq.
LAW OFFICE OF JANNA C. BERGERON
222 N. Vermont St. Ste. T
Covington LA 70433
Tel: (985) 892-1180
Email: jannaberg22@yahoo.com
B.T. TRUCKING: Seeks Chapter 7 Bankruptcy With Affiliates
---------------------------------------------------------
Clarissa Hawes of FreightWaves reports that a 36-year-old Illinois
trucking company and brokerage ceased operations recently and filed
for Chapter 7 bankruptcy liquidation.
B.T. Trucking Inc. of Broadview, Illinois, doing business as Blue
Thunder Trucking, and its three affiliated companies — B.T.
Transportation Group Inc., JPL Transport Inc. and Rysoti Inc. —
filed for Chapter 7 liquidation on July 19 in the U.S. Bankruptcy
Court for the Northern District of Illinois.
At the time of its closure, Blue Thunder had 75 drivers and the
same number of power units, according to the Federal Motor Carrier
Safety Administration's SAFER website.
The petitions for the four entities list Michael J. Irwin as
president and founder.
The trucking company's website, which has since been taken down,
stated that Irwin founded Blue Thunder Trucking in 1988 with 35
owner-operators and 50 trailers. At one time, the family-owned
regional and over-the-road fleet, which hauled general freight,
operated 130 tractors and had 220 trailers, according to the
companies' social media pages.
No reason was given as to why Irwin and his companies filed for
Chapter 7. The entities are represented by bankruptcy attorney Joel
A. Schechter of Chicago. As of publication time Thursday, neither
Schechter nor Irwin had responded to FreightWaves' request for
comment.
Based on FMCSA data, Blue Thunder Trucking was granted its common
and contract carrier authority in 1988.
Prior to its closure, the company's trucks had been inspected 65
times, and 28 had been placed out of service for a 43%
out-of-service rate over the preceding 24-month period. That is
nearly double the industry’s national average of around 22.3%,
according to FMCSA.
The company's drivers had been inspected 138 times, and 11 were
placed out of service over a two-year period, resulting in an 8%
out-of-service rate. This is slightly higher than the national
average of about 6.7%.
In the past two years, Blue Thunder trucks had been involved in
six injury crashes and five tow-aways.
Blue Thunder's insurance was canceled July 1, 2024, and its common
and contract authority was involuntarily revoked on July 8,
according to FMCSA.
The company listed its assets as between $100,000 and $500,000 and
liabilities as between $1 million and $10 million, according to the
petition. Blue Thunder states that it has up to 199 creditors.
While the petition includes a list of its creditors, the filing did
not include the claim amounts the companies are owed.
B.T. Transportation Group
In its petition seeking Chapter 7, B.T. Transportation Group of
Broadview, formerly known as B.T. Truck Brokerage, states that it
has up to 199 creditors. The petition lists both its assets and
liabilities as between $100,000 and $500,000. As with the Blue
Thunder petition, B.T. Transportation includes a mailing list of
creditors but doesn't include the amounts it owes to more than 100
trucking and logistics companies that hauled B.T. Transportation's
freight.
According to FMCSA, the brokerage's authority was granted in April
1997, and its surety bond was canceled last Saturday, a day after
it filed for bankruptcy.
JPL Transport Inc.
The trucking company listed its assets as up to $50,000 and
liabilities as between $50,000 and $100,000. JPL Transport's
petition states that it has up to 49 creditors.
Its petition, which seeks liquidation, lists 17 former employees,
including Michael J. Irwin, his wife, Linda Irwin, and their son,
Ryan Irwin, as creditors in the bare-bones petition. No amounts
were given as to how much the ex-employees are owed.
JPL Transport received $1.5 million in U.S. Small Business
Administration Paycheck Protection Program (PPP) loans from Beverly
Bank & Trust Co. to make payroll to save 137 jobs, according to
ProPublica's PPP tracking database. About $1.1 million of that was
forgiven.
Irwin is listed as the president, secretary and director of JPL
Transport, according to its most recent business entity filing in
April on the Illinois secretary of state’s database.
JPL Transport received its PPP loan during the first round of
funding of the CARES Act in April 2020 to help businesses stay
afloat during the COVID-19 pandemic.
Prior to the 3PL's website being taken down, Irwin said he had 30
employees, "including sales, dispatch, safety, administration and a
full clerical staff" at his facility, which encompassed 25,000
square feet of office and warehouse space. The site also had "three
acres of parking area for our 250 trailers and power units based in
the Chicago area," according to the website.
Rysoti Inc.
The company listed assets of between $100,000 and $500,000 and
liabilities as between $1 million and $10 million. Rysoti has up to
49 creditors.
U.S. Bankruptcy Judge David D. Cleary has given the entities until
Aug. 2 to submit their schedules of assets and liabilities as well
as their statements of financial affairs. The four Chapter 7
petitions state that no funds will be available to unsecured
creditors after administrative expenses are paid.
Cleary has set a creditors meeting for Sept. 5, 2024.
About B.T. Transportation Group
B.T. Transportation Group is a 36-year-old Illinois trucking
company and brokerage.
B.T. Transportation Group along with affiliates sought relief under
Chapter 7 of the U.S. Bankruptcy Code (Bankr. N.D. Ill. Case No.
24-10465) on July 19, 2024. In its petition, B.T. listed its assets
as between $100,000 and $500,000 and liabilities as between $1
million and $10 million.
The Honorable Bankruptcy Judge Timothy A. Barnes oversees the
cases.
The Debtors are represented by:
Joel A Schechter, Esq.
Law Offices Of Joel Schechter
53 W Jackson Blvd Ste 1522
Chicago, IL 60604
312 332-0267
Fax : 312 939-4714
Email: joel@jasbklaw.com
BAUSCH HEALTH: Says It Is Not Filing Bankruptcy or Insolvency
-------------------------------------------------------------
Claire Boston of Bloomberg News reports that Bausch Health
Companies Inc. said it is not "considering a bankruptcy or
insolvency proceeding of any kind" and "has not been involved in
discussions with its creditors regarding bankruptcy proceedings."
Bausch Health shares sunk as much as 48% in US trading, triggering
two volatility-related halts, following a news article from Reorg
citing unnamed sources. The stock pared those losses to about 22%
before being halted for pending news ahead of the firm's statement.
Bausch said it wouldn't comment further.
The shares trimmed their decline to 13% after they resumed
trading.
About Bausch Health Companies Inc.
Bausch Health Companies Inc. develops drugs for unmet medical needs
in central nervous system disorders, eye health and
gastrointestinal diseases, as well as contact lenses, intraocular
lenses, ophthalmic surgical equipment, and aesthetic devices.
As of March 31, 2024, the Company had $26.91 billion in total
assets, $27.09 billion in total liabilities, and $174 million in
total deficit.
* * *
In April 22, 2024, S&P Global Ratings raised its issuer credit
rating on Bausch Health Cos. Inc. to 'CCC+' from 'CCC'. S&P also
raised its issue-level ratings on the senior secured debt to 'B-'
from 'CCC+', and its ratings on the second-lien notes and unsecured
notes to 'CCC' from 'CCC-'.
The negative outlook reflects the risk that Bausch Health could
pursue distressed exchanges as it approaches its sizable debt
maturities.
S&P said, "Our upgrade reflects Bausch Health's recent favorable
outcome in the patent challenge to Xifaxan. On April 11, 2024, the
U.S. Court of Appeals for the Federal Circuit upheld a previous
court decision that bars the Food and Drug Administration from
approving the abbreviated new drug application (ANDA) submitted by
Alvogen Pharma US Inc. subsidiary Norwich Pharmaceuticals. We view
this as significantly credit positive for Bausch because we do not
believe there are sufficient candidates in the development pipeline
to cover the material loss of Xifaxan sales from a near-term
generic launch. Our base-case scenario no longer assumes an at-risk
launch of a generic in 2024 or 2025. However, Xifaxan faces other
patent challenges that could result in a generic launch ahead of
the latest patent expiry in 2029, including a recently submitted
ANDA by Amneal. We believe any new ANDA filings would be subject to
a 30-month stay and that the earliest possible launch of a generic
would be in late 2026."
"Furthermore, we believe that this court decision makes the
separation of subsidiary Bausch + Lomb Corp. (B+L) more likely. The
company appears committed to completing the spin-off as soon as
possible, which we view as a credit negative given our expectation
for a pro forma increase in leverage and reduction in scale and
diversity. We continue to believe Bausch Health could have trouble
refinancing its sizable debt maturities as they come due,
especially if it completes the spin-off. Management has indicated
that Bausch Health will do so once leverage for remaining entities
(remainco) hits 6.7x, which we estimate it will reach and sustain
during 2024. We expect remainco adjusted leverage to remain high at
above 5x through 2027, giving Bausch insufficient flexibility to
rebuild its pipeline ahead of Xifaxan's eventual loss of
exclusivity.
"The decision lowers the likelihood of a below-par debt exchange,
but not entirely removed due to distressed trading levels. The
longer-dated unsecured notes continue to trade at 40-70 cents on
the dollar (yielding 18%-26%), which we view as highly distressed.
We think Bausch Health still could look to capture this significant
discount ahead of its upcoming maturities, especially if the
spin-off is completed. We would likely view any debt repurchases
or
exchanges on the distressed debt as tantamount to a default."
Despite its challenges, the company performed well in 2023. All
segments of the consolidated company expanded on a reported and
organic basis in the fourth quarter of 2023. Full-year revenue
growth was approximately 8%, exceeding the high point of
management's previously provided guidance. On a consolidated basis,
adjusted debt to EBITDA was 7.5x as of Dec. 31, 2023, up slightly
from 7.2x in 2022, driven by B+L's debt-funded acquisition of
Xiidra in the third quarter. S&P said, "Excluding B+L, we estimate
adjusted debt to EBITDA of approximately 7.6x. In 2024, we expect
consolidated debt to EBITDA to decline to 6.5x, driven by the
full-year impact of Xiidra and moderate cash accumulation."
S&P said, "Our negative outlook reflects the risk of distressed
exchanges as Bausch Health approaches sizable debt maturities over
the coming years."
BED BATH: Estate Administrator Wants Ex-Shareholder Sanctioned
--------------------------------------------------------------
Randi Love of Bloomberg Law reports that an administrator
overseeing the wind-down of Bed Bath & Beyond Inc.'s bankruptcy
estate asked the court to sanction a former shareholder over a
request for an equity committee, months after a restructuring plan
was confirmed.
Michael Goldberg of Akerman LLP, the plan administrator for Bed
Bath & Beyond's wind-down, doubled down on his June opposition of
the former shareholder's request for the appointment of an equity
security holders' committee. The Justice Department's bankruptcy
watchdog, the US Trustee, also opposed the former shareholder's
committee request in June 2024.
About Bed Bath & Beyond
Bed Bath & Beyond Inc., together with its subsidiaries, is an
omnichannel retailer selling a wide assortment of merchandise in
the Home, Baby, Beauty & Wellness markets and operates under the
names Bed Bath & Beyond, buybuy BABY, and Harmon, Harmon Face
Values. The Company also operates Decorist, an online interior
design platform that provides personalized home design services.
At its peak, Bed Bath & Beyond operated the largest home furnishing
retailer in the United States with over 970 stores across all 50
states, consistently at the forefront of major home and bath
trends. Operating stores spanning the United States, Canada,
Mexico, and Puerto Rico, Bed Bath & Beyond offers everything from
bed linens to cookware to electric appliances, home organization,
baby care, and more.
Bed Bath & Beyond closed over 430 locations across the United
States and Canada before filing Chapter 11 cases, implementing
full-scale wind-downs of their Canadian business and the Harmon
branded stores.
Left with 360 Bed Bath & Beyond, and 120 buybuy BABY stores, Bed
Bath & Beyond Inc. and 73 affiliated debtors on April 23, 2023,
each filed a voluntary petition for relief under Chapter 11 of the
United States Bankruptcy Code to pursue a wind-down of operations.
The cases are pending before the Honorable Vincent F. Papalia and
requested joint administration of the cases under Bankr. D.N.J.
Lead Case No. 23-13359.
Kirkland & Ellis LLP and Cole Schotz P.C. are serving as legal
counsel, Lazard Frares & Co. LLC is serving as investment banker,
and AlixPartners LLP is serving as financial advisor. Bed Bath &
Beyond Inc. has retained Hilco Merchant Resources LLC to assist
with inventory sales. Kroll LLC is the claims agent.
BIG LOTS: Wants to Get Additional Funding as Losses Rise
--------------------------------------------------------
Reshmi Basu and Eliza Ronalds-Hannon of Bloomberg News report that
off-price home goods retailer Big Lots Inc. has been reaching out
to prospective investors to gauge interest in providing a new loan
that would be backed by assets like the company's leases, according
to people with knowledge of the matter.
The Columbus, Ohio-based chain needs more money despite receiving a
loan earlier this year for up to $200 million. Big Lots has
suffered from years of same-store sales declines. Its stores
numbered almost 1,400 as of May 2024, according to regulatory
filings.
About Big Lots Inc.
Big Lots sells a wide assortment of brand-name and private label
items, such as food, furniture, seasonal items, electronics and
accessories, home decor, toys, and gifts.
BLACK OPS: Unsecured Creditors to Get 0% in Liquidating Plan
------------------------------------------------------------
Black Ops Construction, LLC, filed with the U.S. Bankruptcy Court
for the Eastern District of North Carolina a Disclosure Statement
describing Chapter 11 Plan of Liquidation dated July 16, 2024.
The Debtor is a North Carolina limited liability company, owned by
April Merrill and Joshua Boham. The company was formed in 2022 and
has since operated as a specialty construction company that
installs commercial and residential fencing in the Fayetteville,
North Carolina and surrounding areas.
The Debtor is out of cash and seeks now to liquidate in an orderly
fashion. The Debtor ceased operations on July 2, 2024.
General unsecured creditors are classified in Class 3, and will
receive a distribution of approximately 0% of their allowed claims,
to be distributed as follows: each Allowed General Unsecured Claim
shall be paid the balance of all proceeds from the Debtor's
liquidation to the extent there are funds available after payment
of all Secured and Priority Claims as required under the Bankruptcy
Code. The Debtor proposes to make the payments proposed in its Plan
from the liquidation of all assets as well as the collection of any
outstanding receivables that are collectible.
Class 3 consists of General Unsecured Claims. The Debtor believes
that Allowed General Unsecured Claims total at least $494,379.59,
not including the bifurcated amounts owed for unsecured amounts in
Class 1A through 1S. The Debtor expects to have less than $8,000.00
in funds on-hand to pay Priority and Allowed General Unsecured
Claims.
The Debtor will satisfy Claims in Class 3 by distributing funds
on-hand at the time of the Claims Bar Date, November 18, 2024, to
Allowed General Unsecured Claims, after satisfying all
Administrative costs and expenses, and after the payment of any
Allowed Priority Claims. The Debtor expects that it will have no
funds on hand to pay Allowed General Unsecured Caims in Class 3. To
the extend that funds are available to distribution to Class 3
Allowed General Unsecured Claims will be on a pro rata basis after
payment of Allowed Administrative, Secured and Priority Claims.
Class 4 consists of April Merrill's and Joshua Boham's equity
interest in the Debtor. Title to and ownership of all property of
the estate will vest in the Debtor upon Confirmation of the Plan,
subject to all valid liens of Secured Creditors under the Confirmed
Plan. Liens of bifurcated Claims will be valid only to the extent
of the Allowed Secured Amount of the Claim.
The Debtor intends to sell all of its assets, other than those
abandoned or otherwise surrendered to secured creditors, through
private and/or public sales. The Debtor believes that asset sales
will result in net funds of approximately $3,000.00. The Debtor
further intends to collect all actual receivables, which it
believes to be in the approximate amount of $5,000.00. Together
with cash on-hand, the Debtor expects to have approximately
$8,000.00 available to pay Allowed Administrative, Secured,
Priority and General Unsecured Claims.
A full-text copy of the Disclosure Statement dated July 16, 2024 is
available at https://urlcurt.com/u?l=WFKWEt from PacerMonitor.com
at no charge.
Attorney for the Debtor:
Danny Bradford, Esq.
Bradford Law Offices
455 Swiftside Drive, #106
Cary, NC 27518-7198
Tel: (919) 758-8879
Email: Dbradford@bradford-law.com
About Black Ops Construction
Black Ops Construction, LLC is a family-owned and operated fence
company in Fayetteville, N.C., offering full-service residential
and commercial fencing. It provides an array of fencing from wood,
aluminum, vinyl, chain-link, farm, pool, privacy fencing, and
more.
Black Ops Construction filed its voluntary petition for Chapter 11
protection (Bankr. E.D.N.Y. Case No. 24-01713) on May 22, 2024,
with $902,742 in assets and $1,693,083 in liabilities. April
Merrill, manager of Black Ops Construction, signed the petition.
Judge Joseph N. Callaway oversees the case.
Paul D. Bradford, PLLC serves as the Debtor's legal counsel.
BLUE OCEAN PARTNERS: Court Narrows Claims in LawCash Suit
---------------------------------------------------------
Judge Katherine Polk Failla of the United States District Court for
the Southern District of New York denied Dean Chase's motion to
dismiss a claim for tortious interference with contract filed by
Funding Holding LLC d/b/a LawCash, but granted Chase's motion to
dismiss a claim for tortious interference with prospective economic
advantage brought in connection with a failed business
arrangement.
Plaintiff and Chase are directed to meet and confer, and to provide
the Court with a proposed amended case management plan on or before
August 14, 2024.
Plaintiff Funding Holding LLC d/b/a LawCash brings this action
against Defendants Blue Ocean Partners LLC d/b/a Plaintiff Support
Services, Dean Chase, and Joseph DiNardo, alleging a litany of
claims in connection with a failed business arrangement in which
Defendants allegedly agreed to find and refer litigation funding
opportunities to Plaintiff in exchange for monetary consideration,
all pursuant to the terms of an Origination and Services Agreement
by and between LawCash and PSS.
LawCash, a Delaware limited liability corporation, is a provider of
preand post-litigation funding to plaintiffs and attorneys. PSS, a
New York limited liability corporation, is similarly engaged in the
business of litigation funding. DiNardo is a board member of and
special advisor to PSS, and was a principal at PSS when the company
entered into the Agreement. Chase is the President and Chief
Executive Officer of PSS, and DiNardo's successor at the company.
On February 15, 2021, Plaintiff entered into the Origination and
Services Agreement with PSS. Pursuant to the Agreement, PSS agreed
to "identify and refer to [Plaintiff] on an exclusive basis . . .
all plaintiff and attorney Pre-Settlement Funding and Post
Settlement Funding opportunities, interest, leads and inquiries . .
. from any and all sources."
Plaintiff alleges that the relationship between the parties soured
soon after execution of the Agreement, as Plaintiff quickly began
to fear that PSS was reneging on its contractual obligations.
In particular, PSS's identification and referral of potential
Funding Opportunities to Plaintiff declined, resulting in a
significant decrease in Funded Amounts over the first year of the
Agreement, in comparison to previous figures realized pursuant to a
prior arrangement between the parties.
Chase, who originally held himself out as DiNardo's successor to
lead PSS, changed course and disclaimed association with PSS after
Plaintiff complained about PSS's breach of contract in November
2021.
Notwithstanding business cards and public announcements to the
contrary, Chase represented that he was not working for PSS, and
that he would not work for PSS so long as it was subject to the
terms of the Agreement. This public disregard for the Agreement on
Chase's part further ensured that PSS's performance under the
Agreement would suffer.
Following the breakdown of the relationship between the parties,
Plaintiff commenced this action with the filing of a seven-count
Complaint, the operative pleading in this matter, on May 19, 2022.
As to PSS, Plaintiff alleges claims for misappropriation of trade
secrets, under federal and New York law, as well as breach of
contract, and unfair competition. As to Chase and DiNardo,
Plaintiff alleges separate claims for tortious interference with
contract (against DiNardo); (against Chase)), as well as a joint
claim for tortious interference with prospective economic
advantage.
On July 7, 2022, after receiving an extension of the answer
deadline, Chase and DiNardo filed separate pre-motion letters
seeking leave to file motions to dismiss the pertinent tortious
interference claims of the Complaint. PSS, on the other hand, filed
an answer and counterclaims against Plaintiff on July 11, 2022.
Thereafter, Plaintiff submitted its opposition to DiNardo's and
Chase's letters, and filed its own pre-motion letter seeking
dismissal of PSS's counterclaims, which letter PSS duly opposed.
On March 23, 2023 -- following the completion of briefing on the
motions to dismiss, and while discovery was ongoing -- PSS filed a
notice of Chapter 7 bankruptcy.
Accordingly, the Court stayed the case as to PSS, and directed a
joint letter submission from the parties regarding whether the case
should be stayed in its entirety. Pursuant to the Court's order,
the parties filed a joint statement on March 29, 2023, indicating
that DiNardo was on the verge of filing for Chapter 11 bankruptcy
in a parallel proceeding, and setting forth DiNardo's and Chase's
positions that the case should be stayed as to them either way,
given the interrelationship of their claims with those against PSS.
In light of the submission, the Court reserved decision on the
automatic stay, and ordered DiNardo to submit proof of his personal
bankruptcy filing on or before April 10, 2023. DiNardo did so, and
on April 11, 2023, the Court stayed this action as to DiNardo.
Chase, for his part, also filed a letter dated April 10, 2023,
arguing in favor of extension of the automatic bankruptcy stay to
him, a non-debtor. Following Plaintiff's response in opposition,
the Court issued an order, dated April 18, 2023, entering a
discretionary stay as to Chase, "given the factual nexuses between
the claims against DiNardo and Chase, as well as Chase's
relationship to [PSS]," and given the possibility "that the
bankruptcy court will weigh in and seek to extend the automatic
stay or enjoin this case from proceeding.
The stay persisted, pending developments in the PSS and DiNardo
Bankruptcy Proceedings, until July 12, 2024, when the parties, at
the Court's direction, filed a joint status update indicating that
there had been no meaningful updates in either bankruptcy matter.
In light of that submission, along with Plaintiff's representation
that the case could proceed against Chase without implicating
discovery from PSS or DiNardo, the Court lifted the stay by order
dated July 16, 2024, to allow Plaintiff's claims to proceed against
Chase. Accordingly, the Court proceeds to the merits of Chase's
pending motion to dismiss.
In moving to dismiss, Chase raises two principal arguments. First,
Chase argues that the facts as alleged support only a finding that
he acted in his capacity as a representative of PSS, and therefore
cannot establish that he tortiously interfered with the Agreement
as a third party.
Second, Chase asserts that Plaintiff's allegations supporting its
tortious interference with prospective economic advantage claim
implicate only PSS, and fail to support any plausible finding that
Chase independently drove business from Plaintiff.
Chase does not contest that the Complaint plausibly alleges the
necessary elements of a tortious interference with contract claim:
the existence of the Agreement; his knowledge thereof; PSS's actual
breach of the Agreement; and Plaintiff's damages resulting
therefrom. Rather, Chase contends that all of his alleged
misconduct "concern[ed] actions taken by him in his alleged
capacity as a representative of PSS." As such, Chase argues that,
because he was merely an agent of PSS, he could not have tortiously
interfered with the Agreement, and Plaintiff's allegations should
instead pertain only to its breach of contract claims against PSS.
The Court rejects Chase's argument that the Complaint does not
plausibly allege that his alleged misconduct caused PSS to breach
the Agreement with Plaintiff.
The Court holds Plaintiff has adequately alleged that Chase was
personally involved in precipitating PSS's breach of the Agreement,
including by diverting resources away from PSS prior to his
official start at the company as DiNardo's successor, and by
stating that "he would not work for PSS so long as it was subject
to the terms of the Agreement, thus ensuring that PSS's performance
under the Agreement would dramatically suffer".
Accordingly, the Court finds that Plaintiff has adequately alleged
a claim for tortious interference with contract against Chase.
Chase also raises challenges to Plaintiff's claim that he
tortiously interfered with Plaintiff's prospective economic
advantage.
Chase again challenges both the causation and scienter elements of
Plaintiff's claims, arguing that the Complaint fails to plausibly
allege that he acted outside of his corporate capacity in allegedly
directing PSS's actions in diverting Plaintiff's clients to PSS.
In this context, however, Chase's arguments are more successful.
Turning to the Complaint itself, the Court observes that
Plaintiff's substantive allegations regarding Defendants' alleged
interference with its business are devoid of any mention of Chase.
In particular, Plaintiff broadly alleges that PSS abused its access
to Plaintiff's systems and clients to improperly compete with
Plaintiff.
The Court holds Plaintiff's limited and nonspecific allegations
against Chase, however, are merely "consistent with [his]
liability" and thus "stop[] short of the line between possibility
and plausibility for entitlement to relief."
The Court points out under New York law, tortious interference with
prospective economic advantage claims "require[] proof that the
defendant intentionally engaged in acts wrongful by some means
other than the fact of the interference itself."
In comparison to those detailed allegations regarding the extent of
Chase's activities in personally bringing about PSS's breach of the
Agreement, Plaintiff's allegations supporting its prospective
economic advantage claims simply reflect an impermissibly formulaic
effort to tack an individual claim against Chase onto Plaintiff's
substantive claims against PSS for breach of contract,
misappropriation of trade secrets, and unfair competition, the
Court concludes.
Accordingly, the Court finds that Plaintiff has not met the "more
demanding" requirements to set forth a claim for tortious
interference with prospective economic advantage, and grants
Chase's motion to dismiss.
A copy of the Court's decision dated July 24, 2024, is available at
https://urlcurt.com/u?l=ygiAkV
Blue Ocean Partners LLC filed a voluntary Chapter 7 petition
(Bankr. W.D.N.Y. Case No. 23-10245) on March 23, 2023, before Judge
Carl L. Bucki.
BRUNER ENTERPRISES: U.S. Trustee Unable to Appoint Committee
------------------------------------------------------------
The U.S. Trustee for Region 20 disclosed in a court filing that no
official committee of unsecured creditors has been appointed in the
Chapter 11 case of Bruner Enterprises, LLC.
About Bruner Enterprises
Bruner Enterprises, LLC filed its voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Okla. Case No.
24-11804) on June 28, 2024, listing under $1 million in both assets
and liabilities.
Judge Sarah A. Hall oversees the case.
Amanda R. Blackwood, Esq., at Blackwood Law Firm, PLLC represents
the Debtor as counsel.
BYJU ALPHA: Lawyers Withdrawal Complicates Case, Disputes
---------------------------------------------------------
Thomas Gleason of Bloomberg Law reports that prominent law firms
are fleeing the tumultuous bankruptcy of a unit of Indian education
tech firm Byju's, further complicating battles over $1 billion in
debt, former attorneys and professors said.
The withdrawal of Kasowitz Benson Torres LLP and Hogan Lovells US
LLP from their roles in the bankruptcy suggests that the case,
which has been marked by arrest and contempt orders, is slated to
get even messier as the parties duke it out over $533 million in
missing funds.
"These are not fly-by-night firms," said Nancy Rapoport, a former
attorney and professor at the University of Nevada, Las Vegas.
About BYJU's Alpha
BYJU's Alpha, Inc. designs and develops education software
solutions. The Debtor sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. D. Del. Case No. 24-10140) on Feb. 1,
2024. In the petition signed by Timothy R. Pohl, chief executive
officer, the Debtor disclosed up to $1 billion in assets and up to
$10 billion in liabilities.
Judge John T. Dorsey oversees the case.
Young Conaway Stargatt & Taylor, LLP and Quinn Emanuel Urquhart &
Sullivan, LLP serve as the Debtor's legal counsel.
GLAS Trust Company LLC, as DIP Agent and Prepetition Agent, is
represented in the Debtor's case by Kirkland & Ellis LLP, Pachulski
Stang Ziehl & Jones, and Reed Smith.
BYJU ALPHA: U.S. Lawyers Want Out of Chapter 11 Bankruptcy Case
---------------------------------------------------------------
Steven Church and Reshmi Basu of Bloomberg News report that US
lawyers for units of the troubled Indian tech firm Byju's want to
quit defending their clients in a bankruptcy dispute, blaming "an
irreparable breakdown" with the companies and a board member
accused of lying in court to help hide $533 million from
disgruntled lenders.
In an unusual move, two law firms representing Riju Ravindran,
brother of Byju's founder, filed papers Friday, July 19, 2024, in
federal court in Wilmington, Delaware, claiming their clients have
failed to cooperate in their own defense.
About BYJU's Alpha
BYJU's Alpha, Inc., designs and develops education software
solutions. The Debtor sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. D. Del. Case No. 24-10140) on Feb. 1,
2024. In the petition signed by Timothy R. Pohl, chief executive
officer, the Debtor disclosed up to $1 billion in assets and up to
$10 billion in liabilities.
Judge John T. Dorsey oversees the case.
Young Conaway Stargatt & Taylor, LLP and Quinn Emanuel Urquhart &
Sullivan, LLP serve as the Debtor's legal counsel.
GLAS Trust Company LLC, as DIP Agent and Prepetition Agent, is
represented in the Debtor's case by Kirkland & Ellis LLP, Pachulski
Stang Ziehl & Jones, and Reed Smith.
CADUCEUS PHYSICIANS: Case Summary & 20 Top Unsecured Creditors
--------------------------------------------------------------
Two affiliates that concurrently filed voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code:
Debtor Case No.
------ --------
Caduceus Physicians Medical Group 24-11945
d/b/a Caduceus Medical Group
d/b/a Back in Motion Physical Therapy
d/b/a PDQ Urgent Care & More
d/b/a PDQ Telehealth
18200 Yorba Linda Blvd.
Suite 111
Yorba Linda, CA 92886
Caduceus Medical Services LLC 24-11946
18200 Yorba Linda Blvd.
Suite 111
Yorba Linda, CA 92886
Business Description: Caduceus is a physician owned and managed
multi-specialty medical group with locations
in Yorba Linda, Anaheim, Orange, Irvine, and
Laguna Beach. The Debtor specializes in
primary care, pediatrics, & urgent care.
Chapter 11 Petition Date: August 1, 2024
Court: United States Bankruptcy Court
Central District of California
Judge: Hon. Theodor Albert
Debtors' Counsel: David A. Wood, Esq.
MARSHACK HAYS WOOD LLP
870 Roosevelt
Irvine, CA 92620-3663
Tel: (949) 333-7777
Fax: (949) 333-7778
Email: dwood@marshackhays.com
Caduceus Physicians'
Estimated Assets: $1 million to $10 million
Caduceus Physicians'
Estimated Liabilities: $1 million to $10 million
Caduceus Medical's
Estimated Assets: $0 to $50,000
Caduceus Medical's
Estimated Liabilities: $0 to $50,000
The petitions were signed by Howard Grobstein as CRO.
Full-text copies of the petitions containing, among other items,
lists of the Debtors' 20 largest unsecured creditors are available
for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/X5QSQMY/Caduceus_Physicians_Medical_Group__cacbke-24-11945__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/6CGQBAA/Caduceus_Medical_Services_LLC__cacbke-24-11946__0001.0.pdf?mcid=tGE4TAMA
CANNABIS CONTROL COMMISSION: Lawmaker Rejects Receivership Push
---------------------------------------------------------------
Bhaamati Borkhetaria of CommonWealth Beacon reports that the Joint
Committee on Cannabis Policy chair, Massachusetts Representative
Daniel Donahue (D), rejected Inspector General Jeffrey Shapiro's
suggestion to place the Cannabis Control Commission, a marijuana
regulatory body, into receivership with one day remaining in the
legislative session.
"At this time, we believe there are alternative paths forward that
would be less disruptive to the industry and more directly address
our concerns," said Donahue in an email statement.
The Beacon reports Donahue said in a letter to House Speaker Ron
Mariano (D) that the committee intends to schedule public hearings
to review the statute that established the commission, namely the
duties and authority assigned to the agency's chair and executive
director. In a letter to parliamentarians, Shapiro stated that in
order to establish distinct authority structures inside the
commission, those powers must be defined.
In his letter to Mariano, Donahue pointed out that the chairman
"shall have and exercise supervision and control over all the
affairs of the commission" and simultaneously says the executive
director "shall be the executive and administrative head of the
commission and shall be responsible for administering and enforcing
the law relative to the commission and to each administrative unit
thereof."
In addition, Donahue stated that his group has "identified broader
opportunities for reconsideration, including appointment and
removal powers, as well as the structural model of the agency
itself."
The report notes Treasurer Deborah Goldberg appointed and later
suspended the commission's chair, Shannon O'Brien, in connection
with allegations she created a toxic work environment and made
racially insensitive comments. Goldberg is in the process of making
a decision on whether to reappoint O'Brien or fire her, the report
adds.
About Cannabis Control Commission
Cannabis Control Commission in is charge of safely, equitably, and
effectively implementing and administering the laws enabling access
to Medical and Adult Use Marijuana.
CARVANA CO: Posts $48 Million Net Income in Second Quarter
----------------------------------------------------------
Carvana Co. filed with the Securities and Exchange Commission its
Quarterly Report on Form 10-Q reporting net income of $48 million
on $3.41 billion of net sales and operating revenues for the three
months ended June 30, 2024, compared to a net loss of $105 million
on $2.97 billion of net sales and operating revenues for the three
months ended June 30, 2023.
For the six months ended June 30, 2024, the Company reported net
income of $97 million on $6.47 billion of net sales and operating
revenues, compared to a net loss of $391 million on $5.57 billion
of net sales and operating revenues for the same period a year
ago.
As of June 30, 2024, the Company had $7.17 billion in total assets,
$7.05 billion in total liabilities, and $115 million in total
stockholders' equity.
Carvana said, "The Company has incurred losses in prior periods and
may incur additional losses in the future as it continues to focus
on driving profitability through operating efficiency.
Historically, the Company's capital and liquidity needs have been
primarily satisfied through its debt and equity financings,
operating cash flows, and short-term revolving facilities. During
the three months ended June 30, 2024, the Company (i) repurchased
and cancelled $250 million of principal amount of 2028 Senior
Secured Notes ... (ii) received net cash proceeds of $347 million
from its at-the-market offering program and (iii) extended two of
its short-term revolving credit facilities through August and
October 2025, respectively. Management believes that current
working capital, cash flows from operations, and expected continued
or new financing arrangements will be sufficient to fund operations
for at least one year from the financial statement issuance date."
Management Comments
"Carvana's second quarter results clearly demonstrate the
differentiated strength of our customer offering and business
model. We not only led the industry in retail unit growth, which
accelerated from Q1, but also delivered 1.4% Net Income margin and
a new record 10.4% Adjusted EBITDA margin, which sets an all-time
high water mark for public automotive retailers," said Ernie
Garcia, Carvana founder and chief executive officer. "We couldn't
be prouder of our team and remain just as ambitious looking forward
as we tackle the many opportunities to make our business and
customer offering even better as we drive toward buying and selling
millions of cars per year."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1690820/000169082024000272/cvna-20240630.htm
About Carvana
Founded in 2012 and based in Tempe, Arizona, Carvana Co. --
http://www.carvana.com-- is an e-commerce platform for buying and
selling used cars. The Company is transforming the used car buying
and selling experience by giving consumers what they want, a wide
selection, great value and quality, transparent pricing, and a
simple, no pressure transaction. Each element of its business, from
inventory procurement to fulfillment and overall ease of the online
transaction, has been built for this singular purpose.
* * *
As reported by the TCR on Sept. 13, 2023, S&P Global Ratings raised
its issuer credit rating on U.S.-based Carvana Co. to 'CCC+' from
'D'. S&P said, "The negative outlook reflects our expectation that
we could downgrade the company if the company's performance were to
deteriorate further such that we believe liquidity would become
constrained or if we believe there is a likelihood the company
could conduct a distressed restructuring over the next 12 months.
The upgrade to 'CCC+' reflects the near-term improvement in the
company's liquidity position, though the capital structure remains
unsustainable."
Moody's Investors Service upgraded Carvana Co.'s corporate family
rating to Caa3 from Ca, the TCR reported on Sept. 22, 2023. Moody's
said the upgrade of Carvana's CFR to Caa3 reflects the completion
of its debt exchange that pushes out some near-term maturities,
reduces outstanding debt and materially reduces cash interest
expense in the two years following the exchange.
CCC HOLDCO: Moody's Assigns 'Caa2' CFR, Outlook Negative
--------------------------------------------------------
Moody's Ratings assigned the Caa2 corporate family rating and
Caa3-PD probability of default rating to CCC HoldCo, LLC, which is
doing business as Cornerstone Chemical Company, LLC. Moody's also
assigned a Caa2 rating to $176 million of 15% backed senior secured
notes due in 2028 issued by Cornerstone Chemical Company, LLC and
guaranteed by CCC HoldCo, LLC. The ratings outlook is negative.
Governance considerations under the Moody's ESG framework,
including financial strategy and risk management, management
credibility and track record, as well as board structure, were key
drivers of rating action.
At the same time Moody's downgraded 10.25% senior unsecured
(formerly senior secured) notes due 2027 at Cornerstone Chemical
Company, LLC to Ca from Caa2 and withdrew the Caa2 corporate family
rating and Caa3-PD probability of default rating of Cornerstone
Chemical Company, LLC (previously CSTN Merger Sub, Inc.) to reflect
the restructuring transaction which was completed on December 6,
2023. As a result of the restructuring transaction, certain
bondholders acquired 98% equity interest in the Cornerstone
Chemical Company, through CCC HoldCo, LLC from affiliates of
Littlejohn & Co. The company was then renamed Cornerstone Chemical
Company, LLC.
RATINGS RATIONALE
The Caa2 corporate family rating reflects weak credit metrics
(negative debt/EBITDA in the 12 months ended March 31, 2024 as
adjusted by Moody's) despite the completed debt restructuring,
which effectively reduced total debt by 57%. The credit rating also
reflects weak performance and liquidity and the risk associated
with the planned exit of one of two tenants on its site in 2025.
The Caa3-PD PDR reflects Moody's view that Cornerstone's weak
liquidity profile elevate the risk of a distressed exchange or debt
restructuring absent sufficient additional liquidity created by the
company's existing initiatives to divest certain assets and to
refinance its existing asset-based loan.
Cornerstone experienced significant operating losses in 2023 as
demand and pricing for two of its three main commodities,
acrylonitrile and melamine, dropped due weak market for housing,
electronics and durable goods and competition from lower priced
imports. Despite sequentially improving volume and price in these
two businesses, earnings remained depressed and liquidity declined
in the first quarter of 2024. During the quarter, the company
completed a planned turnaround and experienced unplanned lower
operating rates in all three product lines due third-party supply
constraints and equipment reliability issues. April and May
revenues increased year-on-year and margin improved in May as the
company benefited from a combination of improved supply demand
balance in acrylonitrile and executed a second consecutive
quarterly price increase for melamine. The price increases on
melamine followed after the company initiated anti-dumping
procedures against six countries and received the initial
supportive ruling from the US International Trade Commission.
Although earnings will improve vs 2023, Moody's expect credit
metrics to remain weak in 2024 with Moody's adjusted debt/EBITDA
around 13 times and earnings not enough to cover interest expense
(it covers cash interest).
Cornerstone generates income from and provides a variety of site
services to two tenants on its site; one is a significant customer
and the other a key supplier. The tenant and customer, Roehm
America LLC (rated parent Roehm Holding GmbH; Caa1 stable),
contributes a significant amount of earnings and EBITDA by buying
by-product HCN (from the acrylonitrile process) and sulfuric acid
from Cornerstone and through site service fees. Roehm plans to
cease operating on Cornerstone's site and buying its products on
June 30, 2025. Upon Roehm's exit, investment is required to
maintain the viability of the acrylonitrile and sulfuric acid
businesses. The company is actively seeking to divest certain
non-performing assets, refinance its ABL and identify partners to
co-invest in HCN offtake projects as a sources of liquidity to
fund, reduce or mitigate the investment needs. The Company is also
actively marketing to future tenant prospects for the Cornerstone
Energy Park. In this regard, The company has announced a new
partnership with a Japanese chemical company UBE Corporation, which
intends to build a $500 million facility for electric vehicle
lithium ion battery ingredients on Cornerstone's site commencing in
late 2024 with an expected completion date of late 2026. This
partnership will require investment by the company over the next
two years to integrate UBE's operation with its infrastructure.
The partnership will begin contributing meaningful impact to
Cornerstone's earnings and cash flows in 2027.
Cornerstone currently has weak liquidity. The company had
approximately $12 million of cash as of May 2024, down from $40
million at the end of December when the company completed the
restructuring. The company has a $100 million ABL facility maturing
in 2027, of which over $44 million was drawn and $12.6 million was
available. The ABL has a springing fixed charge coverage ratio of
not less than 1.0x, which is calculated quarterly and tested
whenever availability is less than the greater of 10% of borrowing
capacity or $10 million. The company currently does not meet the
springing fixed charge covenant and cannot make any additional
borrowings on the revolver. In addition, on October 1, 2024, the
minimum liquidity requirement under the ABL will increase to $15
million, of which no more than $5 million can be cash. On January
1, 2025, the liquidity requirement increases to $17.5 million, of
which no more than $5 million can be in cash. The company also has
access to a one year 4 million Pound Sterling facility maturing May
31, 2025. The company is in the process of trying to refinance ABL
to replace it with a global ABL and improve borrowing capacity.
Free cash flow is negative $43 million year-to-date through May,
including several one-time costs associated with the restructuring,
cost reduction efforts and sale processes. The company borrowed
$16.6 million more in 15% senior secured notes due 2028 from its
equity holders in April and currently has support to borrow up to
$10 million more.
Structural Considerations
The 15% senior secured notes due 2028 issued as a result of
restructuring are ranked in line with the CFR, because they
represent the majority of debt in the capital structure and are
subordinated to ABL facilities (unrated). As a result of the
restructuring, holders of the majority of the 10.25% senior
unsecured (formerly senior secured) notes due 2027 agreed to
exchange the note for equity with only approximately $40.3 million
of notes remaining outstanding. In addition, the restructuring
permitted subordination of all the liens securing collateral on
2027 notes to be subordinated to the 2028 notes. As a result,
Moody's treat the remaining $40.3 million of 2027 notes as
unsecured and they are rated Ca.
The ratings outlook is negative reflecting weak liquidity
position.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Moody's would likely consider a downgrade, if Cornerstone's
liquidity declines further or defaults on existing debt. An upgrade
is highly unlikely at this time due to the company's weak credit
metrics and liquidity, but in the future, if liquidity improves to
over $25 million on a sustained basis, Moody's-adjusted leverage
declines below 8.0x, and the company is likely to generate free
cash flow in most years, Moody's would consider an upgrade. An
upgrade would likely require adequate liquidity and a capital
structure that supports its business profile as well as for the
company to find a new customer for the vast majority of its HCN
volumes post June 2025, or a sustained improvement in margins for
its three main commodities.
ESG CONSIDERATIONS
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. Governance,
specifically financial policy and risk management, are the main
drivers of the risk as the company was not recapitalized with
sufficient liquidity to withstand ongoing market challenges and to
reinvest in the business as it faces the loss of its key customer.
Environmental risks are tied to the physical climate risk due to a
single site location on the US gulf coast, carbon transition risk
related to raw materials (propylene, ammonia) and waste and
pollution risk. Social risks are significant due to the toxic,
flammable and hazardous nature of the chemicals used and produced
at the company's facility (responsible production and health and
safety risks).
Headquartered in Waggaman, LA, CCC HoldCo, LLC., doing business as
Cornerstone Chemical Company, LLC, produces base chemicals such as
acrylonitrile (AN), melamine, and sulfuric acid at Cornerstone
Energy Park in Waggaman, LA. On December 6, 2023, certain holders
of 2027 notes acquired a majority interest in the net assets of
Cornerstone Chemical Company from affiliates of Littlejohn & Co.,
LLC, which bought the company in August 2017 from H.I.G. Capital.
The company was renamed Cornerstone Chemical Company, LLC. Revenues
were $434 million in the twelve months ended March 30, 2024.
The principal methodology used in these ratings was Chemicals
published in October 2023.
CELULARITY INC: Swings to $196.30 Million Net Loss in 2023
----------------------------------------------------------
Celularity Inc. filed with the Securities and Exchange Commission
its Annual Report on Form 10-K reporting a net loss of $196.30
million on $22.77 million of total revenues for the year ended Dec.
31, 2023, compared to a net income of $14.19 million on $17.98
million of total revenues for the year ended Dec. 31, 2022.
As of Dec. 31, 2023, the Company had $143.89 million in total
assets, $102.93 million in total liabilities, and $40.96 million in
total stockholders' equity.
As of Dec. 31, 2023, the Company had $0.2 million of cash and cash
equivalents and an accumulated deficit of $841.8 million. The
Company's primary use of its capital resources is funding its
operating expenses, which consists primarily of funding the
research and development of its cellular therapeutic candidates,
and to a lesser extent, selling, general and administrative
expenses.
Morristown, New Jersey-based Deloitte & Touche LLP, the Company's
auditor since 2018, issued a "going concern" qualification in its
report dated July 30, 2024, citing that the Company has suffered
recurring losses and net cash outflows from operations and has
outstanding debt that is currently due for which the Company does
not have sufficient liquidity to repay, which raises substantial
doubt about its ability to continue as a going concern.
Bankruptcy Warning
Celularity stated in the Report that, "To date, we have not had any
cellular therapeutics approved for sale and have not generated any
revenues from the sale of our cellular therapeutics. We do not
expect to generate any revenues from cellular therapeutic product
sales unless and until we successfully complete development and
obtain regulatory approval for one or more of our therapeutic
candidates, which we expect will take a number of years. If we
obtain regulatory approval for any of our therapeutic candidates,
we expect to incur significant commercialization expenses related
to therapeutic sales, marketing, manufacturing and distribution as
our current commercialization efforts are limited to our biobanking
and degenerative disease businesses. As a result, until such time,
if ever, as we can generate sufficient revenues to fund operations,
we expect to finance our cash needs through equity offerings, debt
financings or other capital sources, including potentially
collaborations, licenses and other similar arrangements. We
continue to explore licensing and collaboration arrangements for
our cellular therapeutics as well as distribution arrangements for
our degenerative disease business. However, we may be unable to
raise additional funds or enter into such other arrangements when
needed on favorable terms or at all. Any failure to raise capital
as and when needed could have a negative impact on our financial
condition and on our ability to pursue our business plans and
strategies. Failure to obtain this necessary capital or address our
liquidity needs may force us to delay, limit or terminate our
operations, make further reductions in our workforce, discontinue
our commercialization efforts for our biomaterials products as well
as other clinical trial programs, liquidate all or a portion of our
assets or pursue other strategic alternatives, and/or seek
protection under the provisions of the U.S. Bankruptcy Code."
A full-text copy of the Form 10-K is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/0001752828/000095017024087886/celu-20231231.htm
About Celularity Inc.
Headquartered in Florham Park, NJ, Celularity Inc. --
www.celularity.com -- is a cell therapy and regenerative medicine
company focused on addressing aging related diseases including
cancer and degenerative diseases. Celularity develops and markets
off-the-shelf placental-derived allogeneic advanced biomaterial
products including allografts and connective tissue matrices for
soft tissue repair and reconstructive procedures in the treatment
of degenerative disorders and diseases including those associated
with aging. Celularity is developing a pipeline of off-the-shelf
placental-derived allogeneic cell therapy product candidates
including T cells engineered with a chimeric antigen receptor
("CAR"), natural killer ("NK") cells, and mesenchymal-like adherent
stromal cells ("MLASCs") and exosomes. These therapeutic
candidates may potentially target indications across cancer,
infectious and degenerative diseases.
CHANGAR REALTY: Case Summary & Six Unsecured Creditors
------------------------------------------------------
Debtor: Changar Realty Corp.
1704 University Avenue
Bronx, NY 10453
Business Description: The Debtor owns a commercial rental
property located at 1704 University Avenue
Bronx NY valued at $4 million.
Chapter 11 Petition Date: August 2, 2024
Court: United States Bankruptcy Court
Southern District of New York
Case No.: 24-11350
Judge: Hon. John P Mastando III
Debtor's Counsel: Anne Penachio, Esq.
PENACHIO MALARA LLP
245 Main Street
Suite 450
White Plains, NY 10601
Tel: (914) 946-2889
Email: anne@pmlawllp.com
Total Assets: $4,100,000
Total Liabilities: $2,402,833
The petition was signed by Elba Fournier as vice president.
A full-text copy of the petition containing, among other items, a
list of the Debtor's six unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/L4PMPHQ/Changar_Realty_Corp__nysbke-24-11350__0001.0.pdf?mcid=tGE4TAMA
CHG PPC: Moody's Affirms 'B2' CFR Following Proposed Financing
--------------------------------------------------------------
Moody's Ratings affirmed CHG PPC Parent LLC's ("C.H. Guenther" or
"CHG") B2 Corporate Family Rating and the B2-PD Probability of
Default Rating. Moody's concurrently downgraded the ratings on the
company's backed senior secured first lien bank credit facilities
(revolver, upsized USD term loan, and Euro-denominated term loan)
to B2 from B1. The second lien term loan is not rated. The outlook
is stable.
The company is proposing a $290 million add-on to its existing USD
first lien term loan due 2028. Proceeds will be used to repay the
entire revolver balance, repay approximately $217 million of its
second lien term loan, and cover related transaction costs. The
company is concurrently upsizing its revolver commitment by $25
million to $300 million. The proposed financing transaction is
credit positive because it will reduce interest expense by roughly
$8 million annually. Furthermore, the transactions will improve the
company's liquidity due to a larger and fully undrawn revolver. The
company's revolver and total debt balance has increased since
fiscal 2023, due primarily to the financing of acquisitions and
member redemptions. Because the member redemptions were payouts to
management that are sizable and exceeded the company's free cash
flow in the fiscal year ended March 2024, Moody's view them as
aggressive.
The affirmation of the B2 CFR reflects Moody's view that CHG's
earnings will continue to grow, leverage will remain within Moody's
expectations for the rating and that free cash flow will remain
good. Moody's project that CHG's EBITDA will grow at a mid-single
digit rate over the next 12-18 months, reducing debt/EBITDA
leverage from 5.7x (on a Moody's adjusted basis) for the LTM period
ended June 29, 2024 to a low 5x range (on a Moody's adjusted basis)
by the end of fiscal year ended March 2026. The main driver of
earnings growth will be an increase in volume, facilitated by new
customer wins. Although there may be a decline in demand from
certain foodservice customers, Moody's expect that this will be
offset by growth from both other foodservice customers and club,
mass, and discount retail channels. These channels are becoming
increasingly attractive to customers seeking value amid financial
constraints. Moody's project positive free cash flow of $40-$50
million in fiscal 2025, partially limited by capital expenditure
for expanding business with an existing customer. In fiscal 2026,
Moody's expect free cash flow to improve to $70-$80 million, driven
by less capital spending, decreased interest expense, and modest
earnings growth.
The financing transaction leads to a downgrade of the first lien
senior secured debt rating to B2 from B1. This is because the first
lien debt facilities will now make up the preponderance of the
company's debt due to the first lien upsize and a significant
reduction in the amount of loss-absorption cushion provided by the
now much lower second lien term loan. As a result, the B2 rating on
the first lien senior secured debt is now the same as the B2 CFR.
RATINGS RATIONALE
CHG's B2 CFR reflects the company's high, but manageable financial
leverage, acquisitive growth strategy, and low organic sales
growth. The credit profile is supported by good product and
geographic diversity, stable product demand from consumers in a
variety of retail and foodservice channels, low earnings
volatility, and good liquidity. Debt/EBITDA leverage is 5.7x (on a
Moody's adjusted basis) for the LTM period ended June 29, 2024 and
Moody's expect leverage will remain in line with Moody's
expectations for the B2 CFR. The company's profitability rebounded
over the last year behind pricing actions, improved supply chain
performance, and moderating inflation and free cash flow is good.
Moody's expect debt/EBITDA leverage to decline to a low 5x range by
the end of fiscal year ended March 2026, driven by further earnings
growth. Financial policies are aggressive under private equity
ownership with periodic acquisitions and distributions to
management leading to higher debt.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The stable outlook reflects Moody's expectation that earnings will
increase, reducing debt/EBITDA leverage to a low 5x range by the
end of fiscal year ended March 2026. Moody's also expect CHG to
generate positive free cash flow of $40-$50 million in fiscal 2025,
and $70-$80 million in fiscal 2026.
A rating downgrade could occur if operating performance weakens due
to lower volumes, pricing pressure or cost increases. A downgrade
could also occur if liquidity deteriorates, free cash flow is not
maintained at a comfortably positive level, or the financial policy
becomes more aggressive. Quantitatively, a downgrade could occur if
debt/EBITDA is above 6.5x or EBITDA less capital
spending-to-interest is below 1.25x.
A rating upgrade could occur if CHG is able to increase scale,
sustainably grow earnings supported by consistent revenue and
EBITDA margin expansion, and generate consistent and solid free
cash flow. CHG would also need to maintain a financial policy
consistent with debt/EBITDA sustained at or below 5x.
PRINCIPAL METHODOLOGY
The principal methodology used in these ratings was Consumer
Packaged Goods published in June 2022.
COMPANY PROFILE
CHG PPC Parent LLC ("C.H. Guenther") produces a broad set of
grain-based and seasoning products, including artisan breads, buns,
rolls, biscuits, cookies, desserts, dry gravy mixes, spices, frozen
appetizers and snacks, and pizza dough. A majority of revenues are
to various foodservice channels though the company also has sizable
sales in retail channels. Net revenue was $1.8 billion for the last
twelve months ended June 29, 2024. CHG was acquired in 2018 by
investors led by the private capital firm Pritzker Private Capital.
CITY TRUST: U.S. Trustee Unable to Appoint Committee
----------------------------------------------------
The U.S. Trustee for Region 21, until further notice, will not
appoint an official committee of unsecured creditors in the Chapter
11 case of City Trust Investments, LLC, according to court
dockets.
About City Trust Investments
City Trust Investments, LLC filed a petition under Chapter 11,
Subchapter V of the Bankruptcy Code (Bankr. S.D. Fla. Case No.
24-14100) on Apr. 26, 2024, listing under $1 million in both assets
and liabilities.
Judge Laurel M. Isicoff oversees the case.
The Debtor tapped Sagre Law Firm PA as bankruptcy counsel and
Payton & Associates, LLC as special counsel.
COMPACT BRICK: Santos USA Kicks Off Subchapter V Bankruptcy
-----------------------------------------------------------
On July 17, 2024, Compact Brick Pavers Inc. filed Chapter 11
protection in the Middle District of Florida. According to court
filing, the Debtor reports $2,571,452 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
August 7, 2024 at 2:00 p.m. in Room Telephonically on telephone
conference line: 866-910-0293. participant access code: 7560574.
About Compact Brick Pavers Inc.
Compact Brick Pavers Inc., doing business as Santos USA
Construction, is a family owned and operated company offering
commercial and residential construction services. Its services
include pool remodeling, flooring, brick paver installation,
countertop installation & fabrication, exterior & interior
painting, commercial renovations, cabinetry and house
cleaning/construction cleaning.
Compact Brick Pavers Inc. sought relief under Subchapter V of
Chapter 11 of the U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No.
24-04042) on July 17, 2024. In the petition filed by Taylor Santos,
as secretary, the Debtor reports total assets of $147,469 and total
liabilities of $2,571,452.
Honorable Bankruptcy Judge Catherine Peek Mcewen oversees the
case.
The Debtor is represented by:
Buddy D. Ford, Esq.
BUDDY D. FORD, P.A.
9301 West Hillsborough Avenue
Tampa, FL 33615-3008
Tel: (813) 877-4669
Fax: (813) 877-5543
Email: All@tampaesq.com
CONN'S INC: Closes Stores in Chapter 11, $25 Mil. DIP Loan Okayed
-----------------------------------------------------------------
Hilary Russ and Ben Zigterman of Law360 report that a Texas
bankruptcy judge said on Wednesday, July 24, 2024, that he will
approve $25 million of debtor-in-possession financing to help
fallen furniture and appliance retailer Conn's Inc. fund its
Chapter 11 case, which includes plans to sell its consumer
financing arm while holding going-out-of-business sales at its
remaining locations.
About Conn's Inc.
Conn's Inc. is a retailer of home goods and furniture.
Conn's Inc. sought relief under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. S.D. Tex. Case No. 24-33357) on July 23, 2024. In its
petition, the Debtor reports assets and liabilities of at least $1
billion each.
The Honorable Bankruptcy Judge Jeffrey P. Norman oversees the
case.
The Debtor is represented by Duston K. McFaul of Sidley Austin LLP.
CORNERSTONE BUILDING: Moody's Rates New $500MM Secured Notes 'B2'
-----------------------------------------------------------------
Moody's Ratings assigned a B2 rating to Cornerstone Building
Brands, Inc.'s proposed $500 million senior secured notes due 2029.
All other ratings, including Cornerstone's B2 corporate family
rating are unchanged. The ratings outlook remains negative.
Proceeds from the issuance will primarily be used to pay down the
company's outstanding ABL facility (unrated) balance. In July 2024
Cornerstone drew on its ABL to fund the acquisition of Mueller
Supply Company, Inc. (Mueller), a manufacturer of residential metal
roofing, components and steel buildings, for $475 million. The
remaining use of proceeds is for general corporate purposes.
Pro forma for the Mueller transaction as well as other recent
acquisitions, Cornerstone's adjusted debt-to-EBITDA will decline to
6.4x from 6.7x for the twelve months ended June 29, 2024. However,
Moody's now expect leverage will be 6.6x by the end of 2024, which
is meaningfully above Moody's previous forecast of 5.7x following
the April 2024 acquisition of Harvey Building Products Corp.
Helping to support the B2 CFR is Moody's expectation that
Cornerstone's leverage to decline to 5.6x by the end of 2025.
Moody's 2024 projection considers weaker than expected volume
declines in the company's Apertures and Shelter segments for the
remainder of 2024 coupled with a the leveraging nature of the
Mueller transaction. Moody's forecast for 2025 assumes some volume
recovery as well as the continued implementation of initiatives to
improve operational efficiency and reduce costs in manufacturing
overhead, SG&A and procurement.
RATINGS RATIONALE
Cornerstone's B2 CFR continues to reflects its standing as a
leading provider of windows and siding, showcasing a broad product
and brand range across North America. Moody's forecast that EBITA
margins will drop to about 8% by the conclusion of 2024 from
roughly 9% at the close of 2023, before rebounding to about 10% by
the end of 2025. Balancing these positive aspects, the company
faces challenges such as its vulnerability to cyclical end markets,
specifically new construction, along with intense competition
within its industry that could diminish its ability to control
prices.
Moody's expect the company to maintain good liquidity over the next
18 months, even with the projected negative free cash flow in 2024
resulting from increased working capital requirements and a $230
million shareholder distribution executed in the first quarter.
Moody's evaluation of Cornerstone's liquidity takes into account
its access to the $1.037 billion ABL and cash flow facilities, the
absence of immediate debt maturities, and a considerable buffer
with respect to financial covenants.
The B2 rating on the proposed senior secured notes is at the same
level as the CFR, cash flow facility and term loans, which results
from its priority position to the senior unsecured notes (rated
Caa1) as well as the collateral securing the notes.
The negative outlook reflects Moody's expectation of increased
leverage and continued weak interest coverage remaining around 1.0x
through the end of 2024 as a result of lower volumes within the
company's Apertures and Shelter segments.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
While unlikely given the negative outlook, the ratings could be
upgraded if total debt-to-EBITDA approaches 4.75x, adjusted
EBITA-to-interest expense is above 3.5x, the company improves its
free cash flow and maintains good liquidity. An upgrade would also
require a demonstrated commitment to modest leverage.
The ratings could be downgraded if total debt-to-EBITDA is
maintained above 5.75x, adjusted EBITA-to-interest expense is below
2.5x, and the company's operating performance and liquidity
deteriorate.
The principal methodology used in this rating was Manufacturing
published in September 2021.
CRUZIN AUTO: Unsecureds to Split $30K over 5 Years in Plan
----------------------------------------------------------
Cruzin Auto, LLC, filed with the U.S. Bankruptcy Court for the
Eastern District of Texas a Plan of Reorganization dated July 15,
2024.
The Debtor is a Texas corporation, established on May 9, 2017,
which currently operates from Dallas, Texas. Debtor operates an
auto repair and maintenance business servicing customers throughout
north Texas. The Debtor operates its business under a license
agreement with Kwik Kar.
The Plan provides for a reorganization and restructuring of the
Debtor's financial obligations.
The Plan provides for a distribution to Creditors in accordance
with the terms of the Plan from the Debtor over the course of 5
years from the Debtor's continued business operations.
Class 3 consists of Non-priority unsecured Claims. Each holder of
an Allowed Unsecured Claim in Class 3 shall be paid by Reorganized
Debtor from an unsecured creditor pool, which pool shall be funded
at the rate of $5,00 per month. Payments from the unsecured
creditor pool shall be paid quarterly, for a period not to exceed 5
years (20 quarterly payments) and the first quarterly payment will
be due on the 20th day of the first full calendar month following
the last day of the first quarter.
The Debtor estimates the aggregate of all Allowed Class 3 Claims is
approximately $1,900,000 based upon Debtor's review of the
Court’s claim register, Debtor’s bankruptcy schedules, and
anticipated Claim objections.
The Plan provides for a $30,000 dividend to all unsecured creditors
over a period of 5 years. Debtor contends the Plan provides for a
greater dividend to all creditors than would a liquidation of
assets under chapter 7.
Class 4 consists of the holders of Allowed Interests in the Debtor.
The holder of an Allowed Class 4 Interest shall retain their
interests in the Reorganized Debtor.
The Debtor proposes to implement and consummate this Plan through
the means contemplated by Section 1123 and 1145(a) of the
Bankruptcy Code.
From and after the Effective Date, in accordance with the terms of
this Plan and the Confirmation Order, the Reorganized Debtor shall
perform all obligations under all executory contracts and unexpired
leases assumed in accordance with Article 6 of this Plan.
A full-text copy of the Plan of Reorganization dated July 15, 2024
is available at https://urlcurt.com/u?l=ibOHhN from
PacerMonitor.com at no charge.
Counsel to the Debtor:
Robert T. DeMarco, Esq.
Michael S. Mitchell, Esq.
DeMarco Mitchell, PLLC
12770 Coit Road, Suite 850
Dallas, TX 75251
Telephone: (972) 578-1400
Facsimile: (972) 346-6791
Email: robert@demarcomitchell.com
mike@demarcomitchell.com
About Cruzin Auto LLC
Cruzin Auto, LLC operates an auto repair and maintenance business
servicing customers throughout north Texas.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D. Tex. Case No. 24-40884) on April 17,
2024.
Judge Brenda T Rhoades oversees the case.
Robert T DeMarco, Esq., at DEMARCO MITCHELL, PLLC, is the Debtor's
legal counsel.
CUARTO LLC: Kicks Off Chapter 11 Bankruptcy Proceeding
------------------------------------------------------
Cuarto LLC filed Chapter 11 protection in the Northern District of
Texas. According to court filing, the Debtor reports between $1
million and $10 million in debt owed to 1 and 49 creditors. The
petition stats that funds will be available to unsecured
creditors.
A meeting of creditors under 11 U.S.C. Section 341(a) is slated for
August 21, 2024 at 2:30 p.m. in Room Telephonically.
About Cuarto LLC
Cuarto LLC owns a restaurant business.
Cuarto LLC sought relief under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. N.D. Tex. Case No. 24-42494) on July 18, 2024. In the
petition filed by Mike Pruitt, as president, the Debtor reports
estimated assets between $100,000 and $500,000 and estimated
liabilities between $1 million and $10 million.
The Debtor is represented by:
Richard Grant, Esq.
CULHANE, PLLC
13101 Preston Road, Suite 110-1510
Dallas, TX 75240
Tel: 214-210-2929
Email: rgrant@cm.law
DELTA APPAREL: Gets Clearance to Auction Assets in August 2024
--------------------------------------------------------------
Rick Archer of Law360 reports that a Delaware bankruptcy judge
cleared the way Friday, August 26, 2024, for clothing manufacturer
Delta Apparel to put its assets on the auction block next month
with a $28 million starting bid for one of its lifestyle and
fashion brands, as the company continues to search for a stalking
horse to bid on its remaining clothing lines.
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
DIAMOND SPORTS: Postpones Reorg. Date as Talks Need More Time
-------------------------------------------------------------
Steven Church of Bloomberg News reports that Diamond Sports Group
canceled a court hearing that would have allowed the company to
exit bankruptcy because it needs more time to reach deals with
Comcast Corp., professional hockey and basketball leagues, a lawyer
said in court Wednesday, July 24, 2024.
In the next few days, the local sports broadcaster will pick a new
date to seek final approval of a reorganization plan and will wrap
up talks with Comcast, company lawyer Brian S. Hermann told the
judge overseeing Diamond's Chapter 11 case. The company needs to
put a tentative Comcast deal into legal documents, Hermann said.
About Diamond Sports Group
Diamond Sports Group, LLC, and its affiliates own and/or operate
the Bally Sports Regional Sports Networks, making them the nation's
leading provider of local sports programming. DSG's 19 Bally Sports
RSNs serve as the home for 42 MLB, NHL, and NBA teams. DSG also
holds joint venture interests in Marquee, the home of the Chicago
Cubs, and the YES Network, the local destination for the New York
Yankees and Brooklyn Nets. The RSNs produce about 4,500 live local
professional telecasts each year in addition to a wide variety of
locally produced sports events and programs. DSG is an
unconsolidated and independently run subsidiary of Sinclair
Broadcast Group.
Diamond Sports Group and 29 of its affiliates sought relief under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Tex. Lead Case
No. 23-90116) on March 14, 2023. In the petition signed by David F.
DeVoe, Jr., as chief financial officer and chief operating officer,
Diamond Sports Group listed $1 billion to $10 billion in both
assets and liabilities.
Judge Christopher M. Lopez oversees the cases.
The Debtors tapped Paul, Weiss, Rifkind, Wharton & Garrison, LLP
and Porter Hedges, LLP as bankruptcy counsel; Wilmer Cutler
Pickering Hale, Dorr, LLP and Quinn Emanuel Urquhart & Sullivan,
LLP as special counsel; AlixPartners, LLP as financial advisor;
Moelis & Company, LLC and LionTree Advisors, LLC as investment
bankers; Deloitte Tax, LLP, as tax advisor; Deloitte Financial
Advisory Services, LLP, as accountant; and Deloitte Consulting, LLP
as consultant. Kroll Restructuring Administration, LLC is the
claims agent.
The U.S. Trustee for Region 7 appointed an official committee to
represent unsecured creditors in the Debtors' Chapter 11 cases. The
committee tapped Akin Gump Strauss Hauer& Feld LLP as counsel; FTI
Consulting, Inc., as financial advisor; and Houlihan Lokey Capital,
Inc., as investment banker.
DR. THOMPSON: Unsecureds Will Get 100% of Claims in Plan
--------------------------------------------------------
Dr. Thompson Merchant Group LLC filed with the U.S. Bankruptcy
Court for the Southern District of Ohio a Subchapter V Plan of
Reorganization dated July 15, 2024.
The Debtor is an Ohio Limited Liability Company headquartered in
Westerville, Ohio. Nathanael Thompson is the sole member of
Debtor.
The Debtor presently operates as a real estate purchase,
maintenance, and lease/sale of real properties business. Debtor
presently owns 7 properties. Debtor has tenants occupying various
apartment units of each property.
There were multiple factors that led to the filing of this case,
almost all of them being outside of the control of the Debtor.
Nathanael Thompson was attempting to leverage assets through the
sale of Debtor's assets; however, litigation prevented Mr. Thompson
from pursuing those objectives to satisfy some of the secured
indebtedness. Debtor seeks to regain control of Debtor's assets
(from the Receivership) in order to meet its obligations with its
primary creditor, U.S. Bank.
This Plan provides for 1 class of secured claims and 1 class of
general unsecured claims. This Plan also provides to the payment of
administrative and priority claims with administrative claims to be
paid in full on the effective date of this Plan or upon such other
terms as may be agreed upon by the holder of the claim and the
Debtor, and priority claims to be paid in full.
Class UN-G consists of any other unsecured claim against the Debtor
that does not fall within any of the other Classes listed herein.
Class UN-G includes the claim of any creditor who has filed a
certificate of judgment lien against the Debtor. Debtor owns real
estate, and any certificate of judgment lien against the Debtor
would be partially or wholly unsecured to the extent permitted by
the U.S. Bankruptcy Code and any such unsecured portion of said
lien will be deemed released upon confirmation of this Plan. The
Debtor reserves the right to object to any claims, and intends to
negotiate amicable resolution in the event of any disputes, if
possible.
The Class UN-G Claims shall be Allowed in the amount finally
determined by the Court at 100% and shall be paid by Reorganized
Debtor on a pro rata basis pursuant to this Plan and the
Projections, and after payment of the Priority Claims and
resolution of all Disputed Claims. The unsecured pool is
approximately $11,600.00 based upon Proofs of Claim filed and the
debts listed as non-contingent, liquidated and undisputed on
Schedule F of the Petition. The Claims Bar Date was June 26, 2024.
Class UN-G is impaired.
All Equity Holders will retain their interest in the Debtor.
Despite the difficulties faced throughout the past year with civil
litigation and receiver control over Debtor's assets, Debtor
continues to operate, and after this filing Debtor is leasing units
to generate cash flow for the business operations. The Debtor
believes it is in a good position to continue operations under the
protections and requirements of Chapter 11. Debtor believes it has
proposed a feasible Chapter 11 plan which will allow it to continue
critical contracts, pay secured creditors, and pay a dividend to
unsecured creditors.
The Plan will be funded by the sale proceeds of certain real estate
owned by Debtor and disposable income of the Debtor from its
ongoing business operations as set forth in the Projections.
A full-text copy of the Subchapter V Plan dated July 15, 2024 is
available at https://urlcurt.com/u?l=HMuwtn from PacerMonitor.com
at no charge.
Counsel to the Debtor:
Kenneth L. Sheppard, Jr., Esq.
Sheppard Law Offices Co., LPA
8351 North High Street, Suite 101
Columbus, OH 43235
Telephone: (614) 523-3106
Facsimile: (614) 882-6750
Email: ken@sheppardlawoffices.com
About Dr. Thompson Merchant Group
Dr. Thompson Merchant Group, LLC operates as a real estate
purchase, maintenance, and lease/sale of real properties business.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Ohio Case No. 24-51476) on April 17,
2024. In the petition signed by Nathanael Thompson, sole member,
the Debtor disclosed up to $1 million in both assets and
liabilities.
Judge Mina Nami Khorrami oversees the case.
Kenneth L. Sheppard, Jr., Esq., at Sheppard Law Offices Co., LPA
serves as the Debtor's counsel.
DUNKMAN PAINT: Unsecureds to Get Share of Income for 3 Years
------------------------------------------------------------
Dunkman Paint & Wallcovering, LLC, filed with the U.S. Bankruptcy
Court for the Middle District of Florida a Subchapter V Plan of
Reorganization dated July 15, 2024.
DPW is a professional paint contracting company that partners with
the construction industry and offers unmatched paint and protective
coating services.
The primary event leading to this filing is a complaint filed by
Paul Dunkman, an owner of forty-nine percent of DPW, commenced
against DPW in the Circuit Court of the Eighteenth Judicial Circuit
in and for Seminole County, Florida, styled - PAUL DUNKMAN V. ERIKA
DUNKMAN, PAULA DUNKMAN, and DUNKMAN PAINT & WALLCOVERING, LLC, Case
No. 2022-CA-002717 (the "Seminole County Lawsuit"), which included
a petition for the judicial dissolution of DPW in Count I of Paul's
Complaint.
On March 28, 2024, the Seminole County Court issued an order after
such evidentiary hearing (the "Fair Value Order"), determining that
the "fair value" of Paul's interest was, after certain adjustments,
$1,852,728.00. Moreover, the Fair Value Order required DPW to pay
Paul $907,451.06 (50% of fair value) on or before April 1, 2024,
and the balance in 120 equal monthly installments.
In order to preserve DPW's business, pay all of its creditors, and
preserve its jobs, DPW filed this Chapter 11.
The total Projected Disposable Income of the Debtor over the life
of the Plan is $5,000 per month.
The Plan provides for the orderly payment of Allowed Claims with
the Debtor's projected disposable income over the life of the Plan.
The Debtor will pay in full all Allowed Administrative Claims on
the Effective Date, unless otherwise agreed to by the holder of any
such claim. Creditors will receive more than they would have
received in a Chapter 7 liquidation.
Class 1 consists of General Unsecured Claims. Subject to the
requirements of the Plan, the Bankruptcy Code, or a Final Order,
Holders of General Unsecured Claims shall receive approximately a
Pro Rata Share of the net sum of the Projected Disposable Income
over a three-year period beginning on the Effective Date, after
making payment in full of Allowed Administrative Expense Claims,
Fee Claims, and the Allowed Priority Tax Claim.
Class 4 consists of Equity Interest Holders. On and after the
Effective Date, the holders of the Equity Interests shall retain
their interests in the Debtor. Class 4 is unimpaired.
The Plan contemplates that the Reorganized Debtor will continue to
operate the business of the Debtor. The Reorganized Debtor believes
that the continued earnings through the operation of the Debtor
will be sufficient to fund the payments required to be made under
the Plan.
Prior to the Effective Date, and subject to the Bankruptcy Code,
Final Orders of the Bankruptcy Court, and other applicable law, the
Debtor shall use funds generated during the pendency of the
bankruptcy case to pay amounts due in the ordinary course and to
fund payments due under the Plan on and after the Effective Date.
Except as explicitly required by the Plan, the Reorganized Debtor
shall have the sole and absolute discretion to use funds generated
after the Effective Date without further notice or approval.
A full-text copy of the Subchapter V Plan dated July 15, 2024 is
available at https://urlcurt.com/u?l=IN1MG4 from PacerMonitor.com
at no charge.
Counsel for the Debtor:
Frank M. Wolff, Esq.
Nardella & Nardella, PLLC
135 W. Central Blvd., Suite 300
Orlando, FL 32801
Phone: (407) 966-2680
Facsimile (407) 966-2681
About Dunkman Paint & Wallcovering
Dunkman Paint & Wallcovering, LLC, offers paint & protective
coatings application services.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. M.D. Fla. Case No. 24-01879) on April 17,
2024, with $3,564,291 in assets and $2,337,670 in liabilities.
Paula Dunkman, CEO, signed the petition.
Judge Lori V. Vaughan presides over the case.
Frank M. Wolff, Esq. at NARDELLA & NARDELLA, PLLC, is the Debtor's
legal counsel.
DURECT CORP: Board Approves 275K Shares RSU Grant to CFO Papp
-------------------------------------------------------------
DURECT Corporation disclosed in a Form 8-K filed with the
Securities and Exchange Commission that on July 26, 2024, pursuant
to the recommendation of the compensation committee of the board of
directors of the Company, the board of directors of the Company
approved a restricted stock unit ("RSU") grant of 275,000 shares of
common stock to Mr. Timothy M. Papp, the chief financial officer of
the Company.
The RSU Grant was approved pursuant to the terms of the Company's
2000 Stock Plan. Under the terms of the RSU Grant award agreement,
50% of the RSUs will vest on the six-month anniversary of the RSU
Grant, with the remainder vesting on the one-year anniversary of
the RSU Grant, in each case conditioned upon Mr. Papp remaining
continuously employed by or providing services to the Company
through the applicable vesting date. The RSU Grant will be subject
to the terms of the Company's Change of Control Policy, which
provides for certain vesting and severance benefits for officers in
the event of termination in connection with a change of control.
About DURECT Corporation
Headquartered in Cupertino, CA, DURECT is a late-stage
biopharmaceutical company pioneering the development of epigenetic
therapies that target dysregulated DNA methylation to transform the
treatment of serious and life-threatening conditions, including
acute organ injury and cancer. Larsucosterol, DURECT's lead drug
candidate, binds to and inhibits the activity of DNA
methyltransferases (DNMTs), epigenetic enzymes that are elevated
and associated with hypermethylation found in alcohol-associated
hepatitis (AH) patients. Larsucosterol is in clinical development
for the potential treatment of AH, for which the FDA has granted a
Fast Track and a Breakthrough Therapy designation; metabolic
dysfunction-associated steatohepatitis (MASH) is also being
explored. In addition, POSIMIR (bupivacaine solution) for
infiltration use, a non-opioid analgesic utilizing the innovative
SABER platform technology, is FDA-approved and is exclusively
licensed to Innocoll Pharmaceuticals for sale and distribution in
the United States.
San Francisco, California-based Ernst & Young LLP, the Company's
auditor since 1998, issued a "going concern" qualification in its
report dated March 28, 2024, citing that the Company has an
accumulated deficit as well as negative cash flows from operating
activities and has stated that substantial doubt exists about the
Company's ability to continue as a going concern.
EASTERN ILLINOIS UNIVERSITY: Moody's Hikes Issuer Rating From Ba1
-----------------------------------------------------------------
Moody's Ratings has upgraded Eastern Illinois University's (EIU)
issuer rating and Auxiliary Facilities System (AFS) bonds to Baa3
from Ba1 and Certificates of Participation (COPs) to Ba1 from Ba2.
The university had approximately $63 million of outstanding debt
based as of fiscal year end 2023. The outlook was revised to stable
from positive.
The upgrade of Eastern Illinois University's issuer rating to Baa3
reflects management's effective financial management, improving
enrollment and consistently generating improved operations and
liquidity growth, a governance consideration under Moody's ESG
Framework. Further, continued strengthening of the State of
Illinois' (A3 positive) financial condition will provide for
positive downstream effects to the university and more stability in
the state funding landscape.
RATINGS RATIONALE
The Baa3 issuer rating incorporates EIU's improved enrollment over
the past several years, despite a very difficult and highly
competitive Midwest student market. Continued growth of net tuition
is supported by expectations of enrollment stability and
improvements in tuition pricing strategies. Additionally,
expectations for sustained strong operating support and on behalf
payments to support the pension obligation from the State of
Illinois (A3 positive), which has continued to improve after years
of significant state credit challenges, support expectations of
balanced operations and EBIDA margins in the mid-teens in fiscal
2024 and beyond. Management's prudent fiscal strategy and risk
management have led to growth of liquidity and wealth. Further
supporting expectations of maintenance of liquidity and wealth
levels are moderate capital plans coupled with state support for
in-flight projects. The rating acknowledges a rising age of plant
and potential need for capital investment, however, there are no
expectations for material increases in leverage or large drawdowns
of reserves in the near term. The university's leverage is
manageable, and debt is all fixed rate and regularly amortizing
with strong debt service coverage.
The upgrade of the Auxiliary Facilities System (AFS) Revenue bonds
to Baa3 from Ba1 incorporates the university's Baa3 issuer rating
as well as the broadness of the pledge and available financial
reserves.
The upgrade of the Certificates of Participation (COPs) to Ba1 from
Ba2 incorporates the issuer rating and legally available
non-appropriated funds on hand in the event the state fails to
provide appropriated funds. The unsecured nature of the COPs
combined with the university's operating performance and liquidity
levels lead to a rating distinction from the secured AFS bonds.
RATING OUTLOOK
The stable outlook incorporates expectations that Eastern Illinois
will maintain improved operating performance levels. Further,
expectations of continued favorable operating support and on behalf
payments from the State of Illinois provide additional stability.
FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATINGS
-- Improvement in market position, reflected in material
enrollment growth translating to sustained increases in both net
tuition revenue and reduction in reliance on state funding for
operations
-- Continued improvements in the state's fiscal condition over
multiple years, resulting in sustained EBIDA margins in the high
teens
-- Material increase in total cash and investments further
mitigating the university's exposure to state credit volatility
FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATINGS
-- Weakening of the State of Illinois fiscal condition resulting
in unfavorable changes to direct operating support or on-behalf
payments to the university
-- Inability to maintain improved levels of operating performance
-- Capital investment that results in weakening of liquidity below
100 days cash on hand
LEGAL SECURITY
The Auxiliary Facilities System (AFS) bonds are secured by the net
revenue of the AFS as well as pledged student fees and tuition
revenues, subject to the prior payment of operating and maintenance
expenses of the AFS, but only to the extent necessary. There is a
rate covenant to provide 2x coverage of maximum annual debt service
from pledged revenue as well as an additional bonds test. There is
no debt service reserve fund. The AFS is "closed" so surplus funds
stay in the system. MADs coverage is anticipated to remain strong
at over 50x in fiscal 2024.
The COPs are unsecured but payable from legally available non
appropriated funds of the university, including tuition and fees.
The obligations may be terminated under certain circumstances in
the event that the university does not receive sufficient state
appropriations and does not have other legally available funds.
PROFILE
Eastern Illinois University, founded in 1895, is a regional public
university located in Charleston, approximately 50 miles south of
Champaign. EIU offers baccalaureate and master's degrees in
education, business, arts, sciences, and humanities. It reported
FTE enrollment of nearly 6,000 students for fall 2023.
METHODOLOGY
The principal methodology used in these ratings was Higher
Education published in July 2024.
ECLIPSE FARMINGDALE: Case Summary & 13 Unsecured Creditors
----------------------------------------------------------
Debtor: Eclipse Farmingdale, LLC
d/b/a Blink Fitness Farmingdale
450 Main Street
Farmingdale, NY 11735
Business Description: The Debtor operates a membership-based gym
in Farmingdale, New York.
Chapter 11 Petition Date: August 1, 2024
Court: United States Bankruptcy Court
Eastern District of New York
Case No.: 24-73019
Judge: Hon. Alan S Trust
Debtor's Counsel: Joseph M. Shapiro, Esq.
MIDDLEBROOKS SHAPIRO, P.C.
841 Mountain Avenue
First Floor
Springfield, NJ 07081
Tel: (973) 218-6877
Fax: (973) 218-6878
Email: jshapiro@middlebrooksshapiro.com
Total Assets: $319,115
Total Liabilities: $1,742,050
The petition was signed by Eric Purther as managing member.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 13 unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/MBSR5OI/Eclipse_Farmingdale_LLC__nyebke-24-73019__0001.0.pdf?mcid=tGE4TAMA
ELEVATION GOLD: Chapter 15 Case Summary
---------------------------------------
Six affiliates that concurrently filed voluntary petitions for
relief under Chapter 15 of the Bankruptcy Code:
Debtor Case No.
------ --------
Elevation Gold Mining Corporation 24-06359
Suite 1920, 1188 West Georgia Street
Vancouver, British Columbia
Canada V6E 4A2
Canada
Golden Vertex Corporation 24-06364
1882 Lakeside Drive, #23277
Bullhead City, AZ 86439
Golden Vertex (Idaho) Corp. 24-06367
Eclipse Gold Mining Corporation 24-06368
Alcmene Mining Inc. 24-06370
Hercules Gold USA LLC 24-06371
Business Description: Elevation Gold is a publicly listed gold
and silver producer, engaged in the
acquisition, exploration, development
and operation of mineral properties
located in the United States. Elevation
Gold's common shares are listed on the
TSX Venture Exchange ("TSXV") in Canada
under the ticker symbol ELVT and on the
OTCQB in the United States under the
ticker symbol EVGDF. The Company's
principal operation is its 100% owned
Moss Mine in the Mohave County of
Arizona. Elevation also holds the title
to the Hercules exploration property,
located in Lyon County, Nevada.
Chapter 15 Petition Date: August 2, 2024
Court: United States Bankruptcy Court
District of Arizona
Judge: TBA
Foreign Proceeding: Court File No. S-245121, Supreme Court
of British Columbia Vancouver Registry
Foreign Representative: KSV Restructuring Inc., in its capacity
as Monitor
220 Bay Street, 13th Floor
P.O. Box 20
Toronto, Ontario
M5J 2W4
Canada
Foreign
Representative's
Counsel: Robert M. Charles, Jr., Esq.
LEWIS ROCA ROTHGERBER CHRISTIE LLP
One S. Church Avenue, Suite 2000
Tucson, AZ 85701
Tel: (520) 629-4427
Email: RCharles@lewisroca.com
Estimated Assets: Unknown
Estimated Debt: Unknown
Full-text copies of two of the Debtors' Chapter 15 petitions are
available for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/TYYFS6Q/Elevation_Gold_Mining_Corporation__azbke-24-06359__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/PKXXMWA/Golden_Vertex_Corporation__azbke-24-06364__0001.0.pdf?mcid=tGE4TAMA
ELEVATION GOLD: Obtains Initial Order for CCAA Protection
---------------------------------------------------------
Elevation Gold Mining Corporation announced that further to its
press release dated July 30, 2024, it has obtained an order of the
Supreme Court of British Columbia granting it creditor protection
under the Companies' Creditors Arrangement Act. There will be a
Comeback Hearing scheduled for August 12, 2024. Under the Initial
Order, KSV Restructuring Inc. was appointed as the monitor of the
Company. In order to obtain similar protection in the United
States, a petition under chapter 15 of the US Bankruptcy Code will
be filed with the US Bankruptcy Court for the District of Arizona.
The decision to seek protection under the CCAA was made after
careful consideration of Elevation Gold's cash position, scheduled
and outstanding debt payments, forecast revenue and expenses and
all available alternatives to an application for creditor
protection, after comprehensive consultation with its financial and
legal advisors, and on the recommendation of a special committee of
independent directors. While under creditor protection, Elevation
Gold will consider all available transactional and restructuring
options with a goal of maximizing value for the Company and its
stakeholders.
The Company intends to continue the operation of the beneficiation
facilities and proceed with an interim cessation of active mining
from the open pit mining areas at the Moss Mine. This will enable
the Company to meet its cash needs during the restructuring
proceedings so that it can continue its beneficiation activities
and preserve its property. Management of Elevation Gold remains
responsible for day-to-day operations, while the proceedings are
advanced under the supervision of the Monitor. There have been no
changes to the board or management.
The Monitor has set up a website at:
www.ksvadvisory.com/experience/case/elevation-gold-mining-corporation-inc,
where updates on the restructuring process, the Monitor's reports
to the Court, Court orders and other information will be posted as
soon as they are available.
About Elevation Gold Mining Corporation
Elevation Gold is a publicly listed gold and silver producer,
engaged in the acquisition, exploration, development and operation
of mineral properties located in the United States. Elevation
Gold's common shares are listed on the TSX Venture Exchange in
Canada under the ticker symbol ELVT and on the OTCQB in the United
States under the ticker symbol EVGDF. The Company's principal
operation is its 100% owned Moss Mine in the Mohave County of
Arizona. Elevation also holds the title to the Hercules exploration
property, located in Lyon County, Nevada.
ELEVATION GOLD: Seeks Creditor Protection Under CCAA
----------------------------------------------------
Elevation Gold Mining Corporation announced on July 30, that it
filed an application to the Supreme Court of British Columbia for
an order granting it protection from its creditors under the
provisions of the Companies' Creditors Arrangement Act. The hearing
at which the Initial Order will be sought from the Canadian Court
is scheduled for August 1, 2024. Upon receipt of the Initial Order,
in order to extend the protection granted under that order to the
United States, Elevation Gold intends to file a petition under
chapter 15 of the US Bankruptcy Code with the US Bankruptcy Court
for the District of Arizona.
After careful consideration of Elevation Gold's cash position,
scheduled and outstanding debt payments, forecast revenue and
expenses and all available alternatives to seeking creditor
protection, and following thorough consultation with legal and
financial advisors, the board of directors of the Company, acting
upon the recommendation of a special committee of independent
directors, has determined that it is in the best interests of
Elevation Gold and all of its stakeholders to apply for the Initial
Order under the CCAA.
The Initial Order being sought includes, among other things:
(i) a stay of creditor claims and proceedings in favor of Elevation
Gold; and
(ii) the appointment of KSV Restructuring Inc. as court-appointed
monitor of Elevation Gold. While under creditor protection,
Elevation Gold will consider all available transactional and
restructuring options with a goal of maximizing value for the
Company and its stakeholders, with the objective of continuing the
operations of the business on a going-concern basis.
While under creditor protection, the Company intends to continue
the operation of the beneficiation facilities and proceed with an
interim cessation of active mining from the open pit at the Moss
Mine. Management of Elevation Gold is expected to remain
responsible for the day-to-day operations, under the general
oversight of the Monitor.
About Elevation Gold Mining Corporation
Elevation Gold is a publicly listed gold and silver producer,
engaged in the acquisition, exploration, development and operation
of mineral properties located in the United States. Elevation
Gold's common shares are listed on the TSX Venture Exchange in
Canada under the ticker symbol ELVT and on the OTCQB in the United
States under the ticker symbol EVGDF. The Company's principal
operation is its 100% owned Moss Mine in the Mohave County of
Arizona. Elevation also holds the title to the Hercules exploration
property, located in Lyon County, Nevada.
EMERGENT BIOSOLUTIONS: Completes Sale of RSDL Kit to SERB for $75M
------------------------------------------------------------------
Emergent BioSolutions Inc. announced July 31 the sale of RSDL
(Reactive Skin Decontamination Lotion) kit to SERB Pharmaceuticals,
a global pharmaceutical company, for a purchase price of
approximately $75 million. In addition, SERB will pay Emergent a
$5 million payment upon achievement of a milestone related to the
sourcing of a certain component of RSDL.
In addition, SERB will acquire and maintain operations of
Emergent's leased manufacturing facility in Hattiesburg,
Mississippi, and several site-based employees who support RSDL will
join SERB. SERB will also acquire the RSDL product inventory as
part of the transaction and will assume certain related contracts.
Emergent's Winnipeg facility will continue to manufacture and
supply bulk lotion to SERB under a long-term supply agreement
between the two companies.
"For years, our colleagues have proudly manufactured, sold and
distributed RSDL to many branches of the U.S. government to ensure
military personnel safety and public health preparedness," said Joe
Papa, president and chief executive officer at Emergent. "SERB is
a well-positioned global leader that is expected to continue to
make RSDL readily available for the U.S. and allied governments."
This transaction follows Emergent's announcement to sell its drug
product facility in Baltimore-Camden, as well as operational
changes, which are key actions in its multi-year plan. The net
proceeds from the sale of RSDL and the Baltimore-Camden facility
will reduce or eliminate the Junior Capital Raise requirements
under Emergent's amended credit facility, a requirement that was
recently extended to Sept. 29, 2024.
Papa continued, "As discussed on our recent quarterly earnings
call, the decision to divest RSDL is driven by our efforts to
significantly reduce Emergent's total debt in 2024. Today, we
expect to decrease our debt by more than $150 million through
operating performance improvements, working capital reductions and
product/asset divestments. We are keenly focused on stabilizing
the financial health of the company to enable future sustainable
growth and profitability."
For Emergent, Evercore served as financial advisor, and Covington &
Burling LLP served as legal counsel in connection with this
transaction.
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.About Emergent Biosolutions.
EMERGENT BIOSOLUTIONS: General Counsel Jennifer Fox Stepping Down
-----------------------------------------------------------------
Emergent BioSolutions, Inc. announced July 30 that Jennifer Fox is
resigning as executive vice president External Affairs, General
Counsel and corporate secretary of the Company to pursue an
opportunity outside of the Company and will continue in her current
role until Aug. 16, 2024.
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.
EVERGREEN HOMES: Creditors to Get Proceeds From Liquidation
-----------------------------------------------------------
Evergreen Homes of Florida, Inc., filed with the U.S. Bankruptcy
Court for the Southern District of Florida a Plan of Liquidation
for Small Business dated July 15, 2024.
The Debtor is a certified building contractor duly licensed in the
State of Florida since 2018. The Debtor has successfully performed
hundreds of residential home improvement projects in South
Florida.
In 2021 the Debtor lost a key employee who opened a competing
business. The Debtor attempted to fill the gaps, but eventually the
sheer volume of projects became increasingly unmanageable. Soon
thereafter, overhead expenses were cut, resulting in a significant
reduction in staff and available resources. In 2022 the remaining
key employees opened competing businesses and the Debtor ceased all
marketing efforts. The Debtor proceeded to complete the
construction pipeline and pay all creditors.
The Debtor filed this bankruptcy case after it could no longer
afford to continue to defend certain prepetition litigation against
it. The Debtor has filed this case in an effort to liquidate and
collect upon its remaining assets and to windup its affairs in an
orderly manner.
The Liquidation Analysis shows that the Debtor will be liquidating
all of its remaining assets for the benefit of the Debtor's
creditors and the Debtor will not need to seek further
reorganization.
This Plan of Liquidation proposes to pay creditors of the Debtor
from the liquidation of its remaining assets.
Class 1 consists of all nonpriority unsecured claims. Every holder
of a non priority general unsecured claim against the Debtor shall
receive its pro-rata share of the Debtor's projected remaining
assets. Payments shall begin no later than 90 days following the
Effective Date. Class 1 is Impaired by the Plan.
The Debtor will fund all quarterly plan payments from the
collection and liquidation of its anticipated remaining assets as
set forth on the Liquidation Analysis. As of the date of this Plan,
the Debtor has collected $27,074.73.
The Debtor will begin making quarterly distributions on account of
the Class 1 claims no later than September 30, 2024. Quarterly
payments upon allowed claims will continue until all of the
Debtor's remaining assets have been collected by the Debtor and
paid out to creditors pursuant to the terms of this Plan.
A full-text copy of the Liquidating Plan dated July 15, 2024 is
available at https://urlcurt.com/u?l=v1m0JZ from PacerMonitor.com
at no charge.
Attorneys for the Debtor:
Philip J. Landau, Esq.
Landau Law, PLLC
3010 N. Military, Suite 318
Boca Raton FL 33431
Tel: (561) 443-0802
Email: phil@landau.law
About Evergreen Homes of Florida
Evergreen Homes Of Florida, Inc., is a certified building
contractor duly licensed in the State of Florida since 2018.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Fla. Case No. 24-13583) on April 15,
2024, with $100,001 to $500,000 in assets and $500,001 to $1
million in liabilities.
Judge Mindy A. Mora presides over the case.
Philip J. Landau at Landau Law, PLLC, is the Debtor's legal
counsel.
EXELA TECHNOLOGIES: Eliminates Special Voting Preferred Stock
-------------------------------------------------------------
Exela Technologies, Inc., disclosed in a Form 8-K filed with the
Securities and Exchange Commission that on July 26, 2024, the
Company filed a Certificate of Elimination with the Secretary of
State of the State of Delaware retiring all previously redeemed
shares of the Special Voting Preferred Stock. Effective upon the
filing of the Certificate of Elimination, all references to the
Special Voting Preferred Stock in the Second Amended and Restated
Certificate of Incorporation of the Company will be eliminated and
the shares of Special Voting Preferred Stock so retired shall
resume the status of authorized and unissued shares of preferred
stock of the Company, without designation as to series.
About Exela Technologies
Headquartered in Irving, Texas, Exela Technologies, Inc. --
http://www.exelatech.com/-- is a business process automation (BPA)
company, leveraging a global footprint and proprietary technology
to provide digital transformation solutions enhancing quality,
productivity, and end-user experience. With decades of experience
operating mission-critical processes, Exela serves a growing roster
of more than 4,000 customers throughout 50 countries, including
over 60% of the Fortune 100. Utilizing foundational technologies
spanning information management, workflow automation, and
integrated communications, Exela's software and services include
multi-industry, departmental solution suites addressing finance and
accounting, human capital management, and legal management, as well
as industry- specific solutions for banking, healthcare, insurance,
and the public sector. Through cloud-enabled platforms, built on a
configurable stack of automation modules, and approximately 13,600
employees operating in 20 countries, Exela rapidly deploys
integrated technology and operations as an end-to-end digital
journey partner.
Iselin, New Jersey-based EisnerAmper LLP, the Company's auditor
since 2023, issued a "going concern" qualification in its report
dated April 3, 2024, citing that the Company has experienced
recurring losses, has a working capital deficit and stockholders'
deficit and significant future required cash payments for interest
under its long-term debt obligations that raise substantial doubt
about its ability to continue as a going concern.
* * *
As reported by the TCR on Aug. 24, 2023, S&P Global Ratings raised
its issuer credit rating on Exela Technologies Inc. to 'CCC' from
'SD' (selective default). S&P said, "Despite improving revenue
trends and cost savings, we forecast limited liquidity cushion in
January and July of 2024."
EXPRESS INC: Seeks to Extend Plan Exclusivity to Nov. 18
--------------------------------------------------------
Express, Inc., and affiliates asked the U.S. Bankruptcy Court for
the District of Delaware to extend their exclusivity periods to
file a plan of reorganization and obtain acceptance thereof to
November 18, 2024 and January 20, 2025, respectively.
The chapter 11 cases involve 12 debtor-affiliate entities, which
had, at the outset of these cases, approximately 9,300 employees,
2,800 of whom were full-time. The Debtors have successfully
consummated a sale transaction for substantially all of their
assets with the Purchasers, which will allow the Express and
Bonobos brand to continue to operate a complex business with over
450 locations.
As of the Petition Date, the Debtors had approximately $190 million
in funded-debt obligations. The Debtors continue to provide
transition services to the Purchasers, and are proceeding with the
final store closing sales at stores that will not be transferred to
the Purchasers, to effectuate a smooth transfer for all
stakeholders and to maximize the value of these estates before
proceeding to an orderly winddown.
The Debtors claim that they have made significant progress in
negotiating with their stakeholders and administering these chapter
11 cases during their short time in chapter 11. The Debtors have
moved as expeditiously as possible through these chapter 11 cases
and are now working to transition their assets and vendor
relationships to the Purchasers and run going-out-of business sales
at the closing stores to maximize the value of their estates for
the benefit of all stakeholders.
The Debtors explain that they have consummated a value maximizing
sale transaction, which has provided for, among other things, a
paydown of the Debtors' postpetition financing, substantial
additional cash consideration, and has mitigated the size of the
claims pool through the (i) assumption and assignment of executory
contracts and leases and (ii) by continuing to provide employment
for thousands of employees. As a result of the significant
consideration provided as a result of the Sale Transaction as well
as the ongoing proceeds from store closing sales, the Debtors will
have meaningful assets to make distributions to creditors through
their forthcoming chapter 11 plan.
The Debtors assert that they are not seeking an extension of the
Exclusivity Periods to pressure or prejudice any of their
stakeholders. The Debtors have been diligently moving these chapter
11 cases forward. Accordingly, the relief requested herein is
without prejudice to the Debtors' creditors and will benefit the
Debtors' estates, their creditors, and all other key parties in
interest.
Co-Counsel for the Debtors:
Joshua A. Sussberg, P.C.
Emily E. Geier, P.C.
Nicholas M. Adzima, Esq.
KIRKLAND & ELLIS LLP AND
KIRKLAND & ELLIS INTERNATIONAL LLP
601 Lexington Avenue
New York, New York 10022
Telephone: (212) 446-4800
Facsimile: (212) 446-4900
E-mail: joshua.sussberg@kirkland.com
emily.geier@kirkland.com
nicholas.adzima@kirkland.com
- and -
Charles B. Sterrett, Esq.
333 West Wolf Point Plaza
Chicago, Illinois 60654
Tel: (312) 862-2000
Fax: (312) 862-2200
E-mail: charles.sterrett@kirkland.com
Co-Counsel for the Debtors:
Domenic E. Pacitti, Esq.
Michael W. Yurkewicz, Esq.
Alyssa M. Radovanovich, Esq.
KLEHR HARRISON HARVEY BRANZBURG LLP
919 North Market Street, Suite 1000
Wilmington, Delaware 19801
Tel: (302) 426-1189
Fax: (302) 426-9193
E-mail: dpacitti@klehr.com
myurkewicz@klehr.com
aradvanovich@klehr.com
- and -
Morton R. Branzburg, Esq.
1835 Market Street, Suite 1400
Philadelphia, Pennsylvania 19103
Tel: (215) 569-3007
Fax: (215) 568-6603
E-mail: mbranzburg@klehr.com
About Express Inc.
Express, Inc., operates specialty retail apparel stores. The
Company offers apparel and accessories such as jeans, sweaters,
dresses, suits, and coats. Express serves customers in the United
States.
The Debtors sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Del. Lead Case No. 24-10831) on April
22, 2024. In the petition signed by Stewart Glendinning, chief
executive officer, the Debtor disclosed $1,298,055,000 in assets
and $1,199,781,226 in liabilities.
The Debtors tapped Kirkland & Ellis, LLP and Kirkland & Ellis
International, LLP as bankruptcy counsel; Klehr Harrison Harvey
Branzburg, LLP as local bankruptcy counsel; Moelis & Company, LLC
as investment banker; M3 Advisory Partners, LP as restructuring
advisor; and Stretto, Inc. as claims agent.
Stephen L. Iacovo, Esq., at Ropes & Gray, LLP serves as counsel to
ReStore Capital, LLC, agent to the FILO Lenders. ReStore is also
the agent under a second lien senior secured DIP single-draw term
facility. AlixPartners, LLP serves as advisor to the DIP agents.
Randall L. Klein, Eseq., Eva D. Gadzheva, Esq., and Dimitri G.
Karcazes, Esq., at Goldberg Kohn Ltd., serve as counsel to Wells
Fargo Bank, National Association, as first lien ABL agent. Wells
Fargo is also the agent under a first lien senior secured DIP
revolving credit facility.
FARADAY FUTURE: Incurs $48.22 Million Net Loss in First Quarter
---------------------------------------------------------------
Faraday Future Intelligent Electric Inc. filed with the Securities
and Exchange Commission its Quarterly Report on Form 10-Q
disclosing a net loss of $48.22 million on $2,000 of revenue for
the three months ended March 31, 2024, compared to a net loss of
$144.97 million on $0 of revenue for the three months ended March
31, 2023.
As of March 31, 2024, the Company had $499.94 million in total
assets, $298.42 million in total liabilities, and $201.52 million
in total stockholders' equity.
Faraday Future said, "Based on our recurring losses from operations
since inception and continued cash outflows from operating
activities...we have concluded that there is substantial doubt
about our ability to continue as a going concern for a period of
one year from the date that these Unaudited Condensed Consolidated
Financial Statements were issued.
"We have and will continue to devote substantial effort and, to the
extent available, capital resources, to strategic planning,
engineering, design, and development of its electric vehicle
platform, development of vehicle models, finalizing the build out
of the FF ieFactory California manufacturing facility, and capital
raising. We incurred cumulative losses from operations, negative
cash flows from operating activities, and have an accumulated
deficit of $4,006.7 million, an unrestricted cash balance of $0.4
million and a negative working capital position of $175.2 million,
excluding restricted cash, as of March 31, 2024. During 2023, we
delivered our first vehicles but expects to continue generating
significant operating losses for the foreseeable future. We have
funded our operations and capital needs primarily through the
issuance of related party notes payable and notes
payable...convertible notes, and the sale of common stock."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/0001805521/000162828024033559/ffie-20240331.htm
About Faraday Future
Los Angeles, CA-based Faraday Future (NASDAQ: FFIE) --
http://www.ff.com-- designs and engineers next-generation
intelligent, connected, electric vehicles. FF manufactures vehicles
at its production facility in Hanford, California, with additional
future production capacity needs addressed through a contract
manufacturing agreement with Myoung Shin Co., Ltd., an automotive
manufacturer headquartered in South Korea. FF has additional
engineering, sales, and operational capabilities in China and is
exploring opportunities for potential manufacturing capabilities in
China through a joint venture or other arrangements.
New York, NY-based Mazars USA LLP, the Company's auditor since
2022, issued a "going concern" qualification in its report dated
May 28, 2024, citing that the Company has incurred operating losses
since inception, has continued cash outflows from operating
activities, and has an accumulated deficit. These conditions raise
substantial doubt about its ability to continue as a going concern.
FARGO BREWING: Unsecureds to Get 2.94 Cents on Dollar in Plan
-------------------------------------------------------------
The Fargo Brewing Company, LLC, ("FBC") filed with the U.S.
Bankruptcy Court for the District of North Dakota a Plan of
Reorganization dated July 15, 2024.
FBC is a North Dakota limited liability company founded in 2010.
Since its creation, Debtor's primary business has been brewing and
selling specialty craft beers. FBC was the first craft brewery
established in Fargo, North Dakota.
FBC experienced severe financial setbacks beginning in Spring 2020
due to COVID-19 pandemic restrictions on direct-to-consumer sales
and supply chain issues. Additionally, increasing competition from
markets outside Fargo-Moorhead have reduced FBC's distribution
footprint, less demand from customers for beer in general, and
raising interest rates for secured debt have resulted in the
Debtor's need to file this Subchapter V bankruptcy case.
This Plan under Subchapter V of Chapter 11 of the Bankruptcy Code
proposes to pay FBC's creditors from cash flow from operations.
Non-priority unsecured creditors holding allowed claims will
receive distributions, which FBC has valued at approximately 2.94
cents on the dollar. The Plan provides for full payment of
administrative expenses and priority claims.
Class 6 consists of all allowed non-priority unsecured claims. The
allowed claims in Class 6 are scheduled to be $2,213,235.83.
Payments to unsecured creditors under this Plan will total
$65,000.00. This Class is impaired.
Class 7 consists of equity parties who hold an ownership interest
in Debtor. Equity interest holders shall retain their equity
interest in Debtor on the Effective Date.
The primary means for implementing this Plan will be FBC's
continued operation of its business, brewing and selling specialty
craft beers. The projections to be filed herewith set forth the
revenues FBC reasonably anticipates receiving from such operations.
A full-text copy of the Plan of Reorganization dated July 15, 2024
is available at https://urlcurt.com/u?l=XaLxUA from
PacerMonitor.com at no charge.
The Debtor's Counsel:
Caren Stanley, Esq.
VOGEL LAW FIRM
218 NP Ave. PO Box 1389
Fargo, ND 58107-1389
Tel: 701-237-6983
E-mail: cstanley@vogellaw.com
About The Fargo Brewing Company
The Fargo Brewing Company, LLC, is a craft brewery company.
The Debtor sought protection under Subchapter V of Chapter 11 of
the U.S. Bankruptcy Code (Bankr. D. N.D. Case No. 24-30152) on
April 15, 2024. In the petition signed by Jared Hardy, president,
the Debtor disclosed up to $500,000 in assets and up to $10 million
in liabilities.
Caren Stanley, Esq., at VOGEL LAW FIRM, is the Debtor's legal
counsel.
FASTLANE GROUP: Involuntary Chapter 11 Case Summary
---------------------------------------------------
Alleged Debtor: Fastlane Group Inc.
1385 Broadway, Suite 1010
New York NY 10018
Involuntary Chapter
11 Petition Date: August 1, 2024
Court: United States Bankruptcy Court
Southern District of New York
Case No.: 24-11347
Petitioners' Counsel: N/A
A full-text copy of the Involuntary Petition is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/ZV6NOMQ/Fastlane_Group_Inc__nysbke-24-11347__0001.0.pdf?mcid=tGE4TAMA
Alleged creditors who signed the petition:
Petitioner Nature of Claim Claim Amount
Zhejiang Kangying Fashion Co. Goods Sold $2,885,768
No 55-2, Chuangxin Park,
516 Jinlong Road
Puyuan Town, Tongxiang City,
Zhejiang, China
Ligotto Inc. Goods Sold $3,181,295
1928 Central Ave.
South El Monte CA 91733
Zhejiang Ligote Clothing Technology Goods Sold $362,192
Co. Ltd.
Chuangxin Park, 356 Jinlong Road
Puyuan Town, Tongxiang City
Zhejiang, China
FOCUS FINANCIAL: S&P Affirms 'B+' ICR, Outlook Remains Stable
-------------------------------------------------------------
S&P Global Ratings affirmed its 'B+' issuer credit rating on Focus
Financial Partners Inc. S&P also assigned a 'B+' issue rating to
the proposed $3.3 billion first-lien term loan B-8 and $325 million
delayed draw term loan. S&P's recovery rating on the company's
secured debt remains '3', indicating its expectation for a
meaningful (50%) recovery in a simulated default scenario.
S&P said, "The outlook remains stable, indicating our expectation
that Focus will operate with weighted average adjusted debt to
EBITDA of 5x-7x during the next 12 months, per our calculations,
while continuing to acquire wealth managers and the full economics
of current partner firms.
"We expect that as a financial-sponsor owned company, Focus will
continue its aggressive acquisition strategy and operate with high
leverage. Since becoming private in the third quarter of 2023,
Focus has shifted its strategy to acquiring the full earnings of
prospective target firms, as well as that of current partner firms.
When increasing its economic interest in current partner firms,
Focus buys out the management agreement using a mix of cash and
equity.
"While we consider debt-to-EBITDA and interest coverage ratios both
including and excluding the management agreement buyouts, we
emphasize the credit metrics excluding these associated expenses.
Excluding management agreement buyout expense, pro forma adjusted
financial leverage is in the 5x-7x range and EBITDA interest
coverage of 2x-3x. This is the range we consider in our current
ratings and stable outlook.
"We take a balanced view of the $550 million distribution to
Focus's sponsors and other shareholders, funded by the proposed
offerings. Focus offers equity as management agreement buyout
consideration, which allows the company to grow EBITDA at
attractive multiples while aligning partner firms' interests with
their own. To date, equity has been a meaningful portion of total
acquisition consideration. As such, we view the proposed
distribution as offsetting some of the recent equity dilution.
While the debt-funded distribution raises leverage, we expect Focus
to maintain leverage well below our downside threshold of 7x.
"We continue to view Focus as stronger than RIA aggregator peers
like Hightower and Mariner Wealth, as well as RIA and managed
account provider Edelman Financial. Focus is significantly larger
than these firms by assets under advisement and EBITDA (excluding
management agreement buyouts). We think the ability to offer equity
as a significant portion of acquisition consideration is an
advantage over lower rated peers. We also think Focus's strategic
shift has the potential to support earnings growth and improve
margins significantly. Additionally, about a quarter of revenue is
derived from sources not correlated to financial markets,
significantly greater than rated peers and resulting in a
relatively more stable earnings base.
"The stable outlook indicates S&P Global Ratings' expectation that
Focus will operate with weighted average adjusted debt to EBITDA of
5x-7x during the next 12 months while continuing to acquire wealth
managers and the full economics of current partner firms. We expect
buyouts and other strategic initiatives aimed at centralizing
operations to improve Focus' operating efficiency.
"We could lower the ratings if Focus operates with adjusted debt to
EBITDA above 7x or adjusted EBITDA interest coverage below 2x on a
sustained basis, per our calculations. This could occur if the
company incurs significant one-time costs from its strategic
changes, growth strains margins, or if Focus issues further debt
without commensurate earnings growth. We could also lower the
ratings if we view Focus's competitive advantage as weakening
compared with wealth management peers.
"Although unlikely over the 12 months rating period, we could raise
the ratings longer term if the company operates with S&P Global
Ratings-adjusted debt to EBITDA comfortably below 5x on a sustained
basis while the business continues to grow."
FOREST GLEN: Plan Exclusivity Period Extended to September 23
-------------------------------------------------------------
Judge Louis A. Scarcella of the U.S. Bankruptcy Court for the
Eastern District of New York extended Forest Glen Realty LLC's
exclusive periods to file a plan of reorganization and obtain
acceptance thereof to September 23 and November 22, 2024,
respectively.
About Forest Glen Realty
Forest Glen Realty LLC sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. E.D.N.Y. Case No. 24-70716) on Feb.
26, 2024. In the petition signed by Mohan Jolly, president, the
Debtor disclosed with up to $10 million in both assets and
liabilities.
Judge Louis A. Scarcella oversees the case.
Certilman Balin Adler & Hyman, LLP, serves as the Debtor's counsel.
FORMATION HOLDINGS: Unsecureds to Get Share of GUC Recovery
-----------------------------------------------------------
Formation Holdings, LLC, d/b/a Worth Steel Fabrication, filed with
the U.S. Bankruptcy Court for the Northern District of Texas a
Chapter 11 Plan of Reorganization dated July 15, 2024.
The Debtor is a steel fabrication company with its principal office
located in Fort Worth, Texas, and its principal facility located in
Joshua, Texas. The Debtor's business started in March 2021 as a
startup with commitments from customers on a few projects.
The Debtor began experiencing cash flow issues in the third quarter
of 2023. The cash flow issues began because of timing issues with a
specific project, and how those timing issues impacted other
customer projects, and core customer relationships. Additional
liquidity issues were caused by the failure of some of the Debtor's
customers to pay the Debtor for jobs it completed on their behalf.
Additional collection activity by the Texas Comptroller of Public
Accounts on alleged unpaid sales taxes caused additional strains on
the business. In order to maintain the Debtor's business and its
operations and preserve the going concern value of the Debtor's
business, the Debtor obtained pre-petition loans for working
capital from its majority owners, Skyward and Echo.
The Chapter 11 Case was filed to provide the Debtor and its Estate
a forum for the orderly and efficient reorganization of the
Debtor's assets and liabilities.
Class 7 consists of all General Unsecured Claims against any
Debtor. Except to the extent that a holder of an Allowed General
Unsecured Claim agrees to less favorable treatment, in full and
final satisfaction, compromise, settlement, release, and discharge
of and in exchange for each General Unsecured Claim, each holder of
an Allowed Class General Unsecured Claim shall receive its pro rata
share of the GUC Recovery. The GUC Recovery shall be paid by the
Debtor to holders of Allowed General Unsecured Claims prior to the
Plan Completion Date in accordance with the Plan Projections. Class
7 is Impaired.
Class 8 consists of all the Interests in the Debtor. On the
Effective Date, all Class 8 Interests shall remain in place at
their prepetition priority and status. The Class 8 Interests are
Unimpaired and are deemed to have accepted the Plan.
Pursuant to section 1123 of the Bankruptcy Code and Bankruptcy Rule
9019, and in consideration for the classification, distributions,
releases, and other benefits provided under the Plan, including the
Exit Facility Lender's agreement to (1) enter into the Exit
Facility, and (2) provide the funding for the Plan, including the
GUC Recovery, as provided by the Exit Facility Documents, upon the
Effective Date, the provisions of the Plan shall constitute a good
faith compromise and settlement of all Claims and Interests and
controversies resolved pursuant to the Plan (collectively, the
"Plan Settlement").
The Reorganized Debtor shall fund Plan Distributions with: (1) Cash
on hand; (2) the proceeds from the Exit Facility as provided by the
Exit Facility Documents; and (3) the proceeds of operations.
A full-text copy of the Plan of Reorganization dated July 15, 2024
is available at https://urlcurt.com/u?l=bWElKw from
PacerMonitor.com at no charge.
Counsel for the Debtor:
Bryan C. Assink, Esq.
Bonds Ellis Eppich Schafer Jones LLP
420 Throckmorton Street, Suite 1000
Fort Worth, TX 76102
Telephone: (817) 405-6900
Facsimile: (817) 405-6902
Email: bryan.assink@bondsellis.com
About Formation Holdings
Formation Holdings, LLC is a steel fabrication company that
provides structural steel to the construction and the energy
industries.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Tex. Case No. 24-41329) on April 16,
2024. In the petition signed by Tanner West, chief executive
officer, the Debtor disclosed $2,092,836 in assets and $3,367,015
in liabilities.
Judge Edward L. Morris oversees the case.
Bryan C. Assink, Esq., at BONDS ELLIS EPPICH SCHAFER JONES LLP,
represents the Debtor as legal counsel.
FR-AM TWO: Unsecureds Will Get 100% of Claims in Plan
-----------------------------------------------------
FR-AM Two LLC and its affiliates filed with the U.S. Bankruptcy
Court for the Eastern District of New York a Disclosure Statement
describing Joint Amended Chapter 11 Liquidating Plan dated July 16,
2024.
The Debtors' lead principal and manager, Harry Macklowe, was the
original developer of 432 Park, first acquiring the site of the
former Drake Hotel in 2006 for redevelopment purposes.
The site was acquired for $413 million with the intention of
developing one of the most impressive residential buildings in the
world. Thereafter, Mr. Macklowe and his affiliates purchased the
surrounding townhouses and retail locations on 57th Street and
undertook the development over the next several years.
In 2010, Mr. Macklowe and his affiliates sold the entirety of their
equity interests in the project to 56th and Park (NY) Holdings LLC
("Holdings"), an entity affiliated with CIM.
The Debtors sought Chapter 11 relief in the midst of extensive
litigation with CIM Group, L.P. and its affiliates over a number of
issues, including efforts by 56th and Park (NY) Owner, LLC (the
"Lender") to enforce defaults under various loan agreements.
Just prior to the commencement of the Chapter 11 cases, the Debtors
faced the prospect of a UCC Article 9 foreclosure sale to
extinguish the Debtors' membership interests in the companies
(FR-AM One LLC and 432 FF&E LLC) holding title to the residential
condominium units located at 432 Park Avenue, New York, NY (Unit
Nos. 78A, 78B and 28H) (the "Units").
In seeking Chapter 11 relief, the Debtors goals were virtually
self-evident - to prevent forfeiture of the Units and obtain a
reasonable time to either refinance the underlying debt or sell the
Units in an orderly sales process. While the early months of the
Chapter 11 cases were punctuated by fierce ligation with the
Lender, the Debtors ultimately reached a settlement agreement with
the Lender (the "Lender Settlement") regarding the disposition of
the Units and an exit strategy of the bankruptcy cases. The Lender
Settlement was approved by the Bankruptcy Court on May 10, 2024.
In furtherance of the Lender Settlement, on July 2, 2024, the
Debtors filed the accompanying Joint Amended Chapter 11 Liquidating
Plan with the intent of selling the Units in bankruptcy subject to
an agreed discounted pay-off of Lender on or before, October 31,
2024, unless the Debtors, or Reorganized Debtors, as applicable,
properly exercise the Option, in which case the deadline for the
sale of the Units shall be extended to May 31, 2025.
The Lender Settlement forms the lynchpin for the Plan, which fully
incorporates the terms of the Lender Settlement subject to certain
agreed to amendments delineated therein. The Plan shall be
implemented and funded through a Sale of the Units resulting in
full payment of the Allowed Lender Claims or acquisition of the
Units by the Lender pursuant to its credit bid rights, as
applicable. The Plan also mandates that Mr. Macklowe personally
contribute funds to secure payment of all allowed Non-Lender Claims
and any and all other remaining costs and expenses of the Debtors
in these Chapter 11 Cases.
Class 3 consists of Allowed General Unsecured Claims. The holders
of Allowed Class 3 General Unsecured Claims shall be paid upon the
later of 21 days after entry of the Confirmation Order, or 7 days
after entry of a Final Order allowing said claims, by the
Disbursing Agent from the NonLender Claims Escrow Account. This
Class will receive a distribution of 100% of their allowed claims.
Class 4 consists of the membership interests of the Debtors'
interest holders. All existing pre-petition equity interests in the
Debtors shall continue to be held by the Mezzanine Debtors or Harry
Macklowe (as applicable) directly or as trustee in the Reorganized
Debtors, in exchange for his personal contributions under the Plan,
subject to the terms of the Lender Settlement, including, without
limitation, the automatic assignment and transfer of the Membership
Interests to the Lender upon default as provided under such
agreements. Following the sale of the Units, any Net Sale Proceeds
shall be distributed to the equity interest holders in accordance
with the applicable operating agreements.
No later than 7 business days after the Confirmation Date, Mr.
Macklowe shall personally contribute funds to be held by the
Disbursing Agent equal to the Non-Lender Claims Reserve Amount, to
fund the Non-Lender Claims Escrow Account, so as to secure the
payment of the Non-Lender Claims, as provided under the Plan, as
and when such claims become Allowed.
Further, Mr. Macklowe shall personally contribute funds to the
Debtors, or Reorganized Debtors, as applicable, in amounts
sufficient to secure the payment of any and all other remaining
costs and expenses of the Debtors in these Chapter 11 Cases as and
when any such costs and expenses arise, including, but not limited
to, ongoing undisputed Condo Board assessments.
Finally, as provided herein, and as agreed to by counsel to
Debtors, Allowed Professional Fee Claims shall be paid by the
Disbursing Agent upon entry of an appropriate Order of the
Bankruptcy Court awarding the same from (i) Net Sale Proceeds, if
any, or (ii) by personal contributions from Mr. Macklowe.
A full-text copy of the Disclosure Statement dated July 16, 2024 is
available at https://urlcurt.com/u?l=PZ6ewl from PacerMonitor.com
at no charge.
Attorneys for the Debtor:
Kevin J. Nash, Esq.
GOLDBERG WEPRIN FINKEL GOLDSTEIN, LLP
1501 Broadway, 22nd Floor
New York, NY 10036
Telephone: (212) 221-5700
Email: knash@gwfglaw.com
About FR-AM Two LLC
FR-AM Two and 432 Mezz are stock holding companies, holding the 100
percent membership interests in FR-AM One and 432 FF&E LLC (432
Owner). In turn, FR-AM One, along with 432 Owner, together own
three luxury apartments in the building at 432 Park Avenue, New
York, NY identified as units 78B and 28H (owned by FR-AM One) and
78A (owned by 432 Owner).
FR-AM Two LLC and its affiliates filed their voluntary petition for
relief under Chapter 11 of the Bankrutpcy Code (Bankr. E.D.N.Y.
Lead Case No. 23-73775) on October 11, 2023. The petitions were
signed by Harry Macklowe as manager. At the time of filing, the
Debtor estimated $50 million to $100 million in both assets and
liabilities.
Judge Robert E. Grossman presides over the case.
Kevin Nash, Esq. at GOLDBERG WEPRIN FINKEL GOLDSTEIN LLP represents
the Debtor as counsel.
FRANCISCO'S BLDG.: Hits Chapter 11 Bankruptcy Protection
--------------------------------------------------------
Francisco's Building LLC filed Chapter 11 protection in the
Northern District of Texas. According to court documents, the
Debtor reports $4,398,001 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 15, 2024 at 9:00 a.m. in Room Telephonically on telephone
conference line: 888-497-4718. participant access code: 6026644#.
About Francisco's Building LLC
Francisco's Building LLC owns a 3200 sq. ft. restaurant located at
619-639 Main Ave, Durango, CO valued at $4.5 million.
Francisco's Building LLC sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Tex. Case No. 24-32077) on July 16,
2024. In the petition filed by Cory Farley, as president, the
Debtor reports total assets of $4,625,306 and total liabilities of
$4,398,001.
The Debtor is represented by:
Michael R. Totaro, Esq.
TOTARO & SHANAHAN, LLP
P.O. Box 789
Pacific Palisades CA 90272
Tel: (888) 425-2889
Fax: (310) 496-1260
Email: Ocbkatty@aol.com
FTX GROUP: Asks Court Okay to Settle $4 Mil. Phala Token Claims
---------------------------------------------------------------
Rick Archer of Law360 Bankruptcy Authority reports that bankrupt
cryptocurrency platform FTX Trading Ltd. asked a Delaware
bankruptcy judge to let it pay $960,000 to crypto issuer Phala Ltd.
to settle that company's $4 million claim against FTX and its
affiliates.
About FTX Group
FTX is the world's second-largest cryptocurrency firm. FTX is a
cryptocurrency exchange built by traders, for traders. FTX offers
innovative products including industry-first derivatives, options,
volatility products and leveraged tokens.
Then CEO and co-founder Sam Bankman-Fried said Nov. 10, 2022, that
FTX paused customer withdrawals after it was hit with roughly $5
billion worth of withdrawal requests.
Faced with liquidity issues, FTX on Nov. 9, 2022, struck a deal to
sell itself to its giant rival Binance, but Binance walked away
from the deal amid reports on FTX regarding mishandled customer
funds and alleged US agency investigations. Bankman-Fried agreed to
step aside, and restructuring vet John J. Ray III was quickly named
new CEO.
FTX Trading Ltd (d/b/a FTX.com), West Realm Shires Services Inc.
(d/b/a FTX US), Alameda Research Ltd. and certain affiliated
companies then commenced Chapter 11 proceedings (Bankr. D. Del.
Lead Case No. 22-11068) on an emergency basis on Nov. 11, 2022.
Additional entities sought Chapter 11 protection on Nov. 14, 2022.
FTX Trading and its affiliates each listed $10 billion to $50
billion in assets and liabilities, making FTX the biggest
bankruptcy filer in the US this year.
According to Reuters, SBF shared a document with investors on Nov.
10, 2022, showing FTX had $13.86 billion in liabilities and $14.6
billion in assets. However, only $900 million of those assets were
liquid, leading to the cash crunch that ended with the company
filing for bankruptcy.
The Hon. John T. Dorsey is the case judge.
The Debtors tapped Sullivan & Cromwell, LLP as bankruptcy counsel;
Landis Rath & Cobb, LLP as local counsel; and Alvarez & Marsal
North America, LLC as financial advisor. Kroll is the claims agent,
maintaining the page https://cases.ra.kroll.com/FTX/Home-Index
The Official Committee of Unsecured Creditors tapped Paul Hastings
as counsel, FTI Consulting, Inc., as financial advisor, and
Jefferies LLC as the investment banker. Young Conaway Stargatt &
Taylor LLP is the Committee's Delaware and conflicts counsel.
Montgomery McCracken Walker & Rhoads LLP, led by partners Gregory
T. Donilon, Edward L. Schnitzer, and David M. Banker, is
representing Sam Bankman-Fried in the Chapter 11 cases.
White-collar crime specialist Mark S. Cohen has reportedly been
hired to represent SBF in litigation. Lawyers at Paul Weiss
previously represented SBF but later renounced representing the
entrepreneur due to a conflict of interest.
GATEWAY PUNDIT: Parent TGP Filed Chapter 11 in Bad Faith
--------------------------------------------------------
Rick Archer of Law360 reports that a Florida bankruptcy judge
Thursday, July 25, 2024, dismissed the Chapter 11 case of far-right
media outlet The Gateway Pundit's parent company as a bad-faith
attempt to shield its founder from liability in a defamation suit
over articles alleging vote fraud in the 2020 presidential
election.
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.
GENESIS GLOBAL: Concludes Restructuring, Allocates $4B to Creditors
-------------------------------------------------------------------
Genesis Global Holdco, LLC, Genesis Global Capital, LLC and Genesis
Asia Pacific Pte. Ltd. announced the completion of its
restructuring on August 2, 2024.
Genesis has commenced making approximately $4 billion in
distributions of digital assets and US dollars to creditors
pursuant to the chapter 11 plan. Unlike many bankruptcy cases, the
Plan does not seek to cap recoveries at petition date value. As
part of the initial distribution, creditors will receive on average
64% recoveries on an in-kind, coin by coin, basis as described
below:
-- On the Effective Date, BTC creditors will receive 51.28%
recoveries as valued on an in-kind basis in the form of BTC, and
ETH creditors will receive 65.87% recoveries as valued on an
in-kind basis in the form of ETH.
-- As soon as practicable after the Effective Date, altcoin
creditors (other than Solana) will receive on average 87.65%
recoveries as valued on an in-kind basis, and Solana creditors will
receive 29.58% recoveries as valued on an in-kind basis.
-- On the Effective Date, US dollar and stablecoin creditors will
receive 100% recoveries on an in-kind basis in the form of US
dollars.
-- Creditors will be entitled to additional recoveries following
the initial distribution, depending on the results of ongoing
claims reconciliation, contractual rights against third parties,
and litigation.
Creditors have been contacted with instructions on how to receive
distributions in digital assets and US dollars. For questions with
respect to distributions, creditors can contact
Distributions@genesisholdco.com.
As part of the Plan, creditors have established a $70 million
litigation fund to pursue causes of action against various third
parties, including Digital Currency Group, which is Genesis'
corporate parent. The $70 million litigation fund will consist of
$26 million in BTC, $13 million in ETH, and $31 million in USD.
Counsel to the Litigation Oversight Committee has not been selected
but will be shortly.
Mark Renzi, a Managing Director at BRG, has been appointed as the
plan administrator to oversee the administration of the Plan and
the Company's wind-down process. Pursuant to the Plan, a new board
of GGH has been appointed, along with the Wind-Down Oversight
Committee and the Litigation Oversight Committee.
For more information on Genesis' restructuring, including access to
court documents, please visit
https://restructuring.ra.kroll.com/genesis.
About Genesis Global
Genesis Global Holdco, LLC, through its subsidiaries, and Global
Trading, Inc., provide lending and borrowing, spot trading,
derivatives and custody services for digital assets and fiat
currency.
Genesis Global Capital, LLC (GGC) and Genesis Asia Pacific PTE.
LTD. (GAP) provide lending and borrowing, spot trading, derivatives
and custody services for digital assets and fiat currency. Genesis
Global Holdco, LLC owns 100% of GGC and GAP.
Genesis Global Holdco, LLC, GGC and GAP each filed a voluntary
petition for relief under Chapter 11 of the Bankruptcy Code (Bankr.
S.D.N.Y. Lead Case No. 23-10063) on Jan. 19, 2023. The cases are
pending before the Honorable Sean H. Lane.
At the time of the filing, Genesis Holdco reported $100 million to
$500 million in both assets and liabilities.
Genesis Holdco is a sister company of Genesis Global Trading, Inc.
("GGT") and 100% owned by Digital Currency Group, Inc. ("DCG").
GGT, DCG and certain of the Holdco subsidiaries are not included in
the Chapter 11 filings. The non-debtor subsidiaries include Genesis
UK Holdco Limited, Genesis Global Assets, LLC, Genesis Asia (Hong
Kong) Limited, Genesis Bermuda Holdco Limited, Genesis Custody
Limited ("GCL"), GGC International Limited ("GGCI"), GGA
International Limited, Genesis Global markets Limited, GSB 2022 II
LLC, GSB 2022 III LLC and GSB 2022 I LLC.
The Debtors tapped Cleary Gottlieb Steen & Hamilton, LLP as
bankruptcy counsel; Morrison Cohen, LLP as special counsel; Alvarez
& Marsal Holdings, LLC as financial advisor; and Moelis & Company,
LLC as investment banker. Kroll Restructuring Administration, LLC,
is the Debtors' claims and noticing agent and administrative
advisor.
The ad hoc group of creditors is represented by Kirkland & Ellis,
LLP and Kirkland & Ellis International, LLP. The ad hoc group of
Genesis lenders is represented by Proskauer Rose, LLP. The U.S.
Trustee for Region 2 appointed an official committee to represent
unsecured creditors in the Debtors' Chapter 11 cases. The committee
tapped White & Case, LLP as bankruptcy counsel; Houlihan Lokey
Capital, Inc., as investment banker; Berkeley Research Group, LLC
as financial advisor; and Kroll as information agent.
GIRARD HOUSE COOPERATIVE: Hits Chapter 11 Bankruptcy Protection
---------------------------------------------------------------
Girard House Cooperative LCA filed Chapter 11 protection in the
District of Columbia. 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
August 20, 2024 at 10:00 a.m. in Room Telephonically on telephone
conference line: (877) 465-7076. participant access code: 7191296.
About Girard House Cooperative LCA
Girard House Cooperative LCA is a Single Asset Real Estate debtor
(as defined in 11 U.S.C. Section 101(51B)).
Girard House Cooperative LCA sought relief under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. D. Col. Case No. 24-00260) on July 19,
2024. In the petition filed by Hilda Ziegler, as Board President,
the Debtor reports estimated assets and liabilities between $1
million and $10 million each.
The Honorable Bankruptcy Judge Elizabeth L. Gunn oversees the
case.
The Debtor is represented by:
David E. Lynn, Esq.
DAVID E. LYNN, P.C.
15245 Shady Grove Road, Suite 465 N
Rockville, MD 20850
Tel: 301-255-0100
Email: davidlynn@verizon.net
GIRARDI & KEESE: Tom Can't Block Chapter 7 Evidence in Fraud Trial
------------------------------------------------------------------
Gina Kim of Law360 reports that Tom Girardi can't exclude evidence
from his upcoming trial that he claims prosecutors illegally
obtained from his firm's bankruptcy trustee, after a California
federal judge said Thursday, July 25, 2024, no constitutional
rights were violated since the evidence was the bankruptcy estate's
property and in the trustee's possession.
About Girardi & Keese
Girardi and Keese or Girardi & Keese was a Los Angeles-based law
firm founded in 1965 by lawyers Thomas Girardi and Robert Keese. It
served clients in California in a variety of legal areas. It was
known for representing plaintiffs against major corporations.
An involuntary Chapter 7 petition (Bankr. C.D. Cal. Case No.
20-21022) was filed in December 2020 against GIRARDI KEESE by
alleged creditors Jill O'Callahan, Robert M. Keese, John Abassian,
Erika Saldana, Virginia Antonio, and Kimberly Archie.
The petitioners' attorneys:
Andrew Goodman
Goodman Law Offices, Apc
Tel: 818-802-5044
E-mail: agoodman@andyglaw.com
Elissa D. Miller, a member of the firm SulmeyerKupetz, has been
appointed as Chapter 7 trustee for GIRARDI KEESE. The Chapter 7
trustee can be reached at:
Elissa D. Miller
333 South Grand Ave., Suite 3400
Los Angeles, California 90071-1406
Telephone: (213) 626-2311
Facsimile: (213) 629-4520
E-mail: emiller@sulmeyerlaw.com
An involuntary Chapter 7 petition was also filed against Thomas
Vincent Girardi (Case No. 20-21020) on Dec. 18, 2020. The Chapter 7
trustee can be reached at:
Jason M. Rund
Email: trustee@srlawyers.com
840 Apollo Street, Suite 351
El Segundo, CA 90245
GIRARDI & KEESE: Trustee Settles Stolen Money Suit With AmEx
------------------------------------------------------------
James Nani of Bloomberg Law reports that American Express has
settled for $3 million claims brought by a bankruptcy trustee that
it enabled the defunct Girardi Keese law firm to siphon $50.25
million in fraudulent transfers as part of the insolvent firm's
scheme to cheat creditors.
The suit brought by Chapter 7 trustee Elissa Miller against
American Express was voluntary dismissed, according to a filing
Friday in the US Bankruptcy Court for the Central District of
California.
Bankruptcy Judge Barry Russell signed off on the $3 million payment
to the estate in a July 24, 2024 order, according to court
records.
About Girardi & Keese
Girardi and Keese or Girardi & Keese was a Los Angeles-based law
firm founded in 1965 by lawyers Thomas Girardi and Robert Keese. It
served clients in California in a variety of legal areas. It was
known for representing plaintiffs against major corporations.
An involuntary Chapter 7 petition (Bankr. C.D. Cal. Case No.
20-21022) was filed in December 2020 against GIRARDI KEESE by
alleged creditors Jill O'Callahan, Robert M. Keese, John Abassian,
Erika Saldana, Virginia Antonio, and Kimberly Archie.
The petitioners' attorneys:
Andrew Goodman
Goodman Law Offices, Apc
Tel: 818-802-5044
E-mail: agoodman@andyglaw.com
Elissa D. Miller, a member of the firm SulmeyerKupetz, has been
appointed as Chapter 7 trustee for GIRARDI KEESE. The Chapter 7
trustee can be reached at:
Elissa D. Miller
333 South Grand Ave., Suite 3400
Los Angeles, California 90071-1406
Telephone: (213) 626-2311
Facsimile: (213) 629-4520
E-mail: emiller@sulmeyerlaw.com
An involuntary Chapter 7 petition was also filed against Thomas
Vincent Girardi (Case No. 20-21020) on Dec. 18, 2020. The Chapter 7
trustee can be reached at:
Jason M. Rund
Email: trustee@srlawyers.com
840 Apollo Street, Suite 351
El Segundo, CA 90245
GLOBAL SUPPLIES: Case Summary & 19 Unsecured Creditors
------------------------------------------------------
Debtor: Global Supplies NY Inc.
138 31st Street
Brooklyn, NY 11232
Business Description: Global Supplies is a distribution service
provider in New York.
Chapter 11 Petition Date: August 1, 2024
Court: United States Bankruptcy Court
Eastern District of New York
Case No.: 24-43232
Judge: Hon. Elizabeth S Stong
Debtor's Counsel: Rachel S. Blumenfeld, Esq.
LAW OFFICE OF RACHEL S. BLUMENFIELD PLLC
26 Court Street
Suite 2220
Brooklyn, NY 11242
Tel: 718-858-9600
Email: rachel@blumenfeldbankruptcy.com
Total Assets: $1,115,425
Total Liabilities: $3,633,514
The petition was signed by Samuel Y. Seidenfeld as president.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 19 unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/UNCPCJI/Global_Supplies_NY_Inc__nyebke-24-43232__0001.0.pdf?mcid=tGE4TAMA
GOTHAM RESTAURANTS: Files for Subchapter V Bankruptcy
-----------------------------------------------------
Bret Thorn of Nation's Restaurant News reports that Gotham
Restaurants LLC, operator of Gotham Restaurant, better known by its
former name of Gotham Bar and Grill, filed for Chapter 11
bankruptcy protection in the Southern District of New York on
Wednesday.
In the filing, the company listed its largest creditor as the New
York State Department of Taxation Finance Bankruptcy/Special
Procedures Section, which it owes nearly $484,000. It also owes
tens of thousands of dollars to suppliers, the largest of which are
Dairyland, which it owes nearly $97,000, and Baldor Specialty
Foods, which it owes nearly $84,000. It also is indebted to credit
card and utility companies and other service providers.
The 40-year-old restaurant, long a Manhattan fine-dining landmark,
closed its doors in June as a result of what The New York Post
called a cyberscam that cost it $45,000, which was enough to keep
it from making payroll.
An outgoing phone message at the restaurant says it is closed for
lunch and dinner service through August "to make a few
improvements."
The restaurant was opened in 1984 and Alfred Portale became
executive chef and partner a year later. It soon became a
fine-dining go-to in New York City, admired for, among other
things, its dramatic presentations; Portale is credited for having
invented "tall food," in which many of a dish's components were
stacked on top of each other. It became a trend-forward style from
the late '80s through the turn of the century.
Over the years the restaurant attracted many young cooks who went
on to become culinary stars in their own right, including Wylie
Dufresne, Tom Colicchio, and Bill Telepan.
Portale parted ways with the other owners in 2019 (he currently
operates Portale, an Italian restaurant eight blocks away) and was
briefly replaced by Victoria Blamey, a culinary rising star at the
time, whose innovation won her high praise, including a three-star
review in the New York Times.
The restaurant closed during the COVID lockdown, reopening in 2021
with its longtime pastry chef, Ron Paprocki, taking the helm as
executive chef as well.
The bankruptcy filing did not state whether the restaurant would
remain in business but it did report assets of between $1 million
and $10 million and said funds would be available to unsecured
creditors.
Gotham Restaurants legal representation is Gabriel Del Virginia.
About Gotham Restaurants LLC
Gotham Restaurants LLC -- https://www.gothambarandgrill.com/ --
formerly known as Gotham Bar and Grill, is an operator of Gotham
Restaurant.
Gotham Restaurants LLC sought relief under Subchapter V of Chapter
11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 24-11276)
on July 24, 2024. In the petition filed by Bret Csencsitz, as
managing partner, the Debtor estimated assets up to $50,000 and
estimated liabilities between $1 million and $10 million.
The Debtor is represented by:
Gabriel Del Virginia, Esq.
Law Offices of Gabriel Del Virginia
12 East 12th Street
New York, NY 10003
GUARDIAN FUND: Amends CV1 & CV2 Unsecured Claims Details
--------------------------------------------------------
Guardian Fund, LLC and its Debtor Affiliates, and the Official
Committee of Unsecured Creditors submitted an Amended Disclosure
Statement describing Amended Joint Plan of Reorganization dated
July 16, 2024.
The Plan was strategically crafted to optimize the value of the
Debtors' current assets and to leverage the infrastructure,
expertise, and experience of the Debtors to generate future
reoccurring revenue and increased value of Debtors' fixed assets.
The business operating platform developed by Guardian through its
wholly owned subsidiary, 12B Residential, Inc. ("12BR"), will
provide significant revenue and market value even after sale and
reinvestment of the Debtors' current assets.
The Debtors' real estate portfolio is comprised of around 446 low
income residential properties ("Properties"). The Properties are
approximately 50% occupied and many need substantial deferred
maintenance, the result being that many Properties would not
qualify for traditional financing in their "as is" condition. Many
of the vacant Properties are also boarded up with utilities turned
off, making it difficult for a potential buyer to perform due
diligence.
The Debtors believe a wholesale or bulk liquidation of the
Properties in their "as is" condition will most likely generate
only about 20-30% of their fair market value in a habitable
condition. Auctions of individual Properties would take longer than
bulk sales and would still likely result in only about 40% of their
fair market value.
The Class 5B allowed unsecured claims of CV1 Trade Vendors in the
amount of $64,165.87 calculated as of the Petition Date shall be
paid in full with simple interest at 4% per annum from the Petition
Date and shall be paid in monthly installments of $8,000
distributed on a pro-rata basis equally among each claimant, with
the first payment due on June 30, 2025, and continuing on the last
day of each calendar month thereafter until the Class 5B claims are
paid in full. CV1 estimates the Class 5B claims will be paid in
full on or about January 31, 2026. Accordingly, the Class 5B
Allowed unsecured claims of CV1 Trade Vendors are impaired under
the Plan.
The Class 5C allowed unsecured claims of CV2 Trade Vendors in the
amount of $58,876.54 calculated as of the Petition Date shall be
paid in full with simple interest at 4% per annum from the Petition
Date and shall be paid in monthly installments of $8,000
distributed on a pro-rata basis equally among each claimant, with
the first payment due on June 30, 2025, and continuing on the last
day of each calendar month thereafter until the Class 5C claims are
paid in full. CV2 estimates the Class 5C claims will be paid in
full on or about January 31, 2026. Accordingly, the Class 5C
allowed unsecured claims of CV2 Trade Vendors are impaired under
the Plan.
The Debtors intend to continue renting, rehabbing, and selling
their real properties in the ordinary course of business and
reinvesting the sale proceeds into better properties in more
commercially desirable locations. They will continue the process of
selling and buying new properties in the ordinary course of
business to earn ongoing revenue from property appreciation.
Additionally, Guardian's subsidiary, 12BR, will expand its property
site operations and will also continue to provide selective
property sales and brokerage services. The operating platform being
developed by Guardian and 12BR will provide significant revenue and
market value to Guardian and 12BR even after the Debtors' current
assets are sold.
A full-text copy of the Amended Disclosure Statement dated July 16,
2024 is available at https://urlcurt.com/u?l=ZK1HsM from
PacerMonitor.com at no charge.
Attorneys for Jointly Administered Debtors:
Stephen R. Harris, Esq.
Norma Guariglia, Esq.
HARRIS LAW PRACTICE LLC
850 E. Patriot Blvd., Suite F
Reno, NV 89511
Tel: (775) 786-7600
Email: steve@harrislawreno.com
norma@harrislawreno.com
Attorneys for Official Committee of Unsecured Creditors:
Sallie B. Armstrong, Esq.
McDONALD CARANO LLP
100 W. Liberty Street, 10th Floor
Reno, NV 89501
Telephone: (775) 788-2000
Email: sarmstrong@mcdonaldcarano.com
About Guardian Fund
The WendellLa and Nancy King Family Trust and several other
creditors represented by Jeffrey L. Hartman filed a Chapter 7
involuntary petition (Bankr. D. Nev. Case No. 23-50117) against
Guardian Fund, LLC, a company in Reno, Nev., on March 17, 2023.
On April 11, 2023, Guardian Fund filed a Chapter 11 voluntary
petition (Bankr. D. Nev. Case No. 23-50233). At the time of the
filing, Guardian Fund reported $10 million to $50 million in assets
and $50 million to $100 million in liabilities.
On April 27, 2023, the Nevada bankruptcy court approved the
stipulation filed in both cases by Guardian Fund and the
petitioning creditors. The order directed the consolidation of the
two cases, with Case No. 23-50177 as the lead case, and set the
Chapter 11 petition date to March 17, 2023. Judge Natalie M. Cox
oversees the case.
The Debtor tapped Harris Law Practice, LLC and Excelsis Accounting
Group as legal counsel and accountant, respectively.
On May 10, 2023, the U.S. Trustee for Region 17 appointed an
official committee to represent unsecured creditors. Sallie B.
Armstrong, Esq., at McDonald Carano, LLP serves as the committee's
legal counsel.
Jeffrey Golden, Esq., is the examiner appointed in the Debtor's
Chapter 11 case.
H.A. STEWART: Unsecureds Will Get 4% of Claims over 60 Months
-------------------------------------------------------------
H.A. Stewart Trucking LLC filed with the U.S. Bankruptcy Court for
the Western District of Pennsylvania a Small Business Amended Plan
of Reorganization dated July 15, 2024.
The Debtor is a Pennsylvania LLC that is owned 100% by Hussien Ali
Stewart and operates a trucking company that works primarily in the
oil and gas industry.
Through expansion over years, the Debtor incurred vehicle and loan
debt that it could not pay. The Debtor has stopped operating the
majority of its fleet and now operates only 3 trucks. This has
allowed the Debtor to become profitable and fund this Plan.
The Plan proposes to pay administrative and priority claims in full
unless otherwise agreed. The Debtor estimates approximately 4%
dividend will be paid on account of general unsecured claims
pursuant to the Plan.
Undisputed, known Class 5 General unsecured Claims total
$872,130.07. The Debtor shall make distribution of $582.00 per
month that shall be divided and paid pro-rata to all allowed Class
5 claims. Payments shall begin on or before the last day of the
month of the month following the effective date of the Plan.
Subsequent payments shall be made by the Debtor on or before the
last day of the month every month thereafter for a total of 60
payments. Total payment to Class 5 creditors shall be $34,920.00,
which will pay all allowed and currently known General Unsecured
Creditors approximately 4% of their allowed claims.
Disputed Class 5 claims will not receive any distributions pursuant
to the Plan. Class 5 creditors identified in Section 2.2.1 whose
collateral either has or will be returned shall have 30 days from
the date of Plan confirmation to file any deficiency claim with
respect to the surrendered collateral.
Class 6 Equity Interest Holder Hussien Ali Stewart will continue to
be the 100% member of the Debtor.
The Plan will be funded through the ongoing revenue of the Debtor's
trucking business.
The Debtor's financial projections demonstrate sufficient cash on
hand to satisfy obligations due on the Effective Date of the Plan,
including payment of the Allowed Administrative Claims, U.S.
Trustee Fees, and cure amounts, in accordance with the Bankruptcy
Code or as otherwise agreed.
A full-text copy of the Amended Plan of Reorganization dated July
15, 2024 is available at https://urlcurt.com/u?l=6MGkIy from
PacerMonitor.com at no charge.
Attorney for the Debtor:
Christopher M. Frye, Esq.
STEIDL AND STEINBERG, P.C.
2830 Gulf Tower
707 Grant Street
Pittsburgh, PA 15219
Tel: (412) 391-8000
Email: chris.frye@steidl-steinberg.com
About H.A. Stewart Trucking LLC
H.A. Stewart Trucking LLC is a Pennsylvania LLC that is owned 100%
by Hussien Ali Stewart and operates a trucking company that works
primarily in the oil and gas industry.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. W.D. Pa. Case No. 23-22125) on Oct. 5,
2023. In the petition signed by Hussien Ali Stewart, member, the
Debtor disclosed up to $500,000 in assets and up to $1 million in
liabilities.
Christopher M. Frye, Esq., at Steidl & Steinberg, P.C., is the
Debtor's legal counsel.
HAWAIIAN HOLDINGS: Posts $67.6 Million Net Loss in Fiscal Q2
------------------------------------------------------------
Hawaiian Holdings, Inc. filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing a net loss
of $67.6 million on $731.9 million of total operating revenues for
the three months ended June 30, 2024, compared to a net loss of
$12.3 million on $706.9 million of total operating revenues for the
three months ended June 30, 2023.
For the six months ended June 30, 2024, the Company reported a net
loss of $205.2 million on $1.4 billion of total operating revenues,
compared to a net loss of $110.6 million on $1.3 billion of total
operating revenues for the same period in 2023.
As of June 30, 2024, the Company had $4.2 billion in total assets,
$1.38 billion in current liabilities, $2.07 billion in long-term
debt, $898.19 million in other liabilities and deferred credits,
and $105.5 million in total shareholders' deficit.
A full-text copy of the Company's Form 10-Q is available at:
https://tinyurl.com/4sw5rxrx
About Hawaiian Holdings
Headquartered in Honolulu, Hawaii, Hawaiian Holdings, Inc. provides
transportation services. As of September 30, 2023, Hawaiian
Holdings has $3,923,260 in total assets and $3,744,502 in total
liabilities. As of March 31, 2024, the Company had $3.79 billion
in total assets, $917.6 million in total liabilities, and $40.2
million in total stockholders' equity.
Hawaiian Holdings reported a net loss of $260.5 million for the
year ended December 31, 2023, compared to a net loss of $240.08
million for the year ended December 31, 2022. As of March 31, 2024,
the Company had $3.79 billion in total assets, $3.83 billion in
total liabilities, and $40.2 million in total shareholders'
deficit.
On December 2, 2023, the Company entered into an Agreement and Plan
of Merger with Alaska Air Group, Inc., a Delaware corporation, and
Marlin Acquisition Corp., a Delaware corporation and a wholly owned
subsidiary of Alaska, pursuant to which, subject to satisfaction or
waiver of conditions therein, Merger Sub will merge with and into
the Company, with the Company surviving as a wholly owned
subsidiary of Alaska. At the effective time of the Merger, each
share of the Company's common stock, Series B Special Preferred
Stock, Series C Special Preferred Stock, and Series D Special
Preferred Stock issued and outstanding immediately prior to the
Effective Time, subject to certain customary exceptions specified
in the Merger Agreement, will be converted into the right to
receive $18.00 per share, payable to the holder in cash, without
interest. Completion of the Merger is subject to customary closing
conditions, including approval by the Company's stockholders, which
was obtained on February 16, 2024; performance by the parties in
all material respects of all their obligations under the Merger
Agreement; the receipt of required regulatory approvals; and the
absence of an order or law preventing, materially restraining, or
materially impairing the consummation of the Merger.
On February 7, 2024, the Company and Alaska each received a request
for additional information and documentary material from the
Department of Justice in connection with the DOJ's review of the
Merger. On March 27, 2024, the Company and Alaska entered into a
timing agreement with the DOJ pursuant to which we agreed, among
other things, not to consummate the Merger before 90 days following
the date on which both parties have certified substantial
compliance with the Second Request unless we have received written
notice from the DOJ prior to the end of such 90-day period that the
DOJ has closed its investigation of the Merger.
The Merger Agreement includes customary termination rights in favor
of each party. In certain circumstances, the Company may be
required to pay Alaska a termination fee of $39.6 million in
connection with the termination of the Merger Agreement.
The Merger is expected to close within 12 to 18 months of the date
of the Merger Agreement.
* * *
On June 4, 2024, Egan-Jones Ratings Company maintained its 'CCC-'
foreign currency and local currency senior unsecured ratings on
debt issued by Hawaiian Holdings, Inc.
HIGHLINE AFTERMARKET: S&P Rates New Repriced Term Loan B 'B'
------------------------------------------------------------
S&P Global Ratings assigned its 'B' issue-level rating to
U.S.-based Highline Aftermarket Acquisition LLC's (subsidiary of
Highline Aftermarket Acquisition Parent LLC) proposed repriced $803
million term loan B due 2027. Highline plans to amend its term loan
to reduce pricing. All other terms, including maturity, will remain
the same. S&P will withdraw its rating on the existing term loan B
after close.
All of S&P's other ratings, including its 'B' issuer credit rating
on Highline Aftermarket Acquisition Parent LLC, are unchanged. The
rating outlook is stable.
HISTOGEN INC: Unsecureds Unimpaired in Subchapter V Plan
--------------------------------------------------------
Histogen Inc. filed with the U.S. Bankruptcy Court for the Southern
District of California a Subchapter V Plan dated July 16, 2024.
Histogen, formerly known as Conatus Pharmaceuticals Inc., was
incorporated in the state of Delaware on July 13, 2005. Until
September 2023, the Company was a clinical-stage therapeutics
company focused on developing potential first in-class clinical and
preclinical small molecule pan-caspase and caspase selective
inhibitors that protect the body's natural process to restore
immune function.
Prior to the Petition Date, Histogen owned certain intellectual
property, including patent rights related to Emericasan, CTS-2090,
and others. Although the Company was able to sell some of these
assets, given the lack of interest shown by potential buyers for
any unsold intellectual property assets, Histogen determined that
such assets had no value and abandoned all related interests.
As of the Petition Date, the Debtor's primary asset was
approximately $2.76 million in cash on hand. The cash and all other
assets are unencumbered.
On October 3, 2023, the Company entered into an Asset Purchase
Agreement with Allergan, pursuant to which Histogen and its
affiliates sold to Allergan certain assets, including certain
patents and other intellectual property rights, related to
Histogen's hypoxia generated growth factor technology. In exchange,
Allergan agreed to pay Histogen a purchase price of $2.1 million
and agreed to assume certain liabilities as set forth in the Asset
Purchase Agreement.
On or about December 28, 2023, the Company entered into an Asset
Purchase Agreement with Genome Opinion Inc. pursuant to which
Histogen sold to Genome Opinion certain caspase related assets,
including certain patents and other intellectual property rights,
for a purchase price of $475,000.
This Plan provides for a liquidation of Histogen and its assets for
the benefit of Holders of Allowed Claims and Equity Interests.
Through this Plan, Histogen will establish a Winddown Debtor,
administered by the Plan Administrator, into which will flow: (i)
all Cash; (ii) the Retained Causes of Action; and (iii) all other
Residual Assets.
The Debtor's asset primarily consists of (i) Available Cash and
(ii) claims and Causes of Action. The liquidation, managed by the
Plan Administrator, will necessarily provide more value to Holders
of Allowed Claims and Equity Interests than would be distributed to
such parties in a chapter 7 liquidation, and will do so more
promptly.
Class 3 consists of General Unsecured Claims. Class 3 is Unimpaired
under the Plan. On the first Distribution Date or on the next
Distribution Date following the date the Claim becomes an Allowed
General Unsecured Claim, each Holder of an Allowed General
Unsecured Claim shall receive Cash in the full amount of such
General Unsecured Claim, with interest from the Petition Date at
the Contract Rate, except to the extent that the Holder of the
Allowed General Unsecured Claim agrees to payment on deferred or
other such terms.
Class 4 consists of Equity Interests. Class 4 is Unimpaired under
the Plan. Each holder of an Allowed Equity Interest shall receive
one or more Distributions on a Distribution Date, as determined by
the Plan Administrator, in an amount equal to its Pro Rata Share of
the Available Cash remaining after payment of Allowed Claims in
Classes 1, 2, and 3, Allowed Administrative Claims, and Allowed
Priority Tax Claims.
The source of funds to achieve Consummation and to carry out the
Plan shall be the Available Cash, the Reserves, and any Residual
Assets.
Except as otherwise provided herein, on the Effective Date, the
Wind Down Assets shall vest in the Estate of the Wind-Down Debtor,
free and clear of all Claims, liens, charges, other encumbrances
and Interests. On and after the Effective Date, the Plan
Administrator may use, acquire, or dispose of the Wind Down Assets
and compromise or settle any Claims without supervision or approval
by the Bankruptcy Court and free of any restrictions of the
Bankruptcy Code or Bankruptcy Rules.
A full-text copy of the Subchapter V Plan dated July 16, 2024 is
available at https://urlcurt.com/u?l=nfBXaM from PacerMonitor.com
at no charge.
Counsel to the Debtor:
Eric D. Goldberg, Esq.
DLA Piper LLP (US)
2000 Avenue of the Stars
Suite 400 North Tower
Los Angeles, CA 90067-4735
Telephone: (310) 595-3000
Facsimile: (310) 595-3300
Email: eric.goldberg@us.dlapiper.com
david.riley@us.dlapiper.com
About Histogen Inc.
Histogen Inc. is engaged in the research and development of
regenerative medicine.
The Debtor filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. S.D. Calif. Case No. 24-01357) on April 18,
2024, with $3,625,752 in assets as of January 31, 2024 and $207,344
in liabilities as of January 31, 2024. David M. Maggio, chief
executive officer, signed the petition.
The Debtor tapped Eric D. Goldberg, Esq. and David M. Riley, Esq.
at DLA PIPER LLP (US) as bankruptcy counsel; and ARMANINO LLP as
financial advisor.
ICAP ENTERPRISES: Creditors to Get Proceeds From Liquidation
------------------------------------------------------------
iCap Enterprises, Inc., and affiliates filed with the U.S.
Bankruptcy Court for the Eastern District of Washington a
Disclosure Statement for Joint Plan of Liquidation dated July 16,
2024.
The Debtors were founded in 2007 by Chris Christensen to invest in
real estate opportunities in the Pacific Northwest.
Following the revelation of the massive Ponzi scheme, the Debtors,
together with the Unsecured Creditors' Committee, have worked
diligently to maximize recoveries for the Debtors' Investors and
other Creditors. The Debtors and the Unsecured Creditors'
Committee, through months of open cooperation, information
gathering, and negotiation for the benefit of all Investors,
reached a global resolution, embodied in the proposed Plan, aimed
at: (i) mitigating the damage inflicted by Christensen (and others)
having operated the Debtors as a Ponzi scheme; and (ii) developing
a level playing field that attempts to treat all aggrieved
Investors equally and fairly.
To effectuate distributions to Investors and other Creditors, the
Plan provides for the creation of the iCap Trust, a liquidating
trust, which will own the Estates' remaining assets and will sell
or otherwise dispose of those assets to generate cash, and will
distribute that (and other) cash to Creditors (including to
Investors). Significantly, the iCap Trust will own all of the
Debtors' litigation claims against third parties and may generate
cash through prosecution or settlement of those claims. Cash will
be distributed by the iCap Trust to Investors and other Creditors
over time at the direction of the iCap Trustees.
As further detailed in the Plan, the Plan contemplates that:
* Allowed Administrative Expense Claims, Allowed Priority Tax
Claims, Allowed Priority Claims, and Allowed Secured Claims are all
unimpaired under the Plan. The Plan provides for the satisfaction
in full of such Claims as described in Article III of the Plan.
* Holders of Allowed Investor Claims will receive (i) on the
later of the Effective Date and 30 calendar days following the date
on which such Investor Claim becomes an Allowed Investor Claim, 1
Class A iCap Trust Interest for each dollar of Allowed Investor
Class A Claims and 1 Class B iCap Trust Interest for each dollar of
Allowed Investor Class B Claims held by the applicable Investor
(any resulting fractional iCap Trust Interests will be rounded to
the nearest hundredth of such iCap Trust Interest), and (ii) the
other consideration provided for in the Investor Claims Special
Provisions set forth in the Plan.
* Holders of Allowed General Unsecured Claims will receive on
the later of the Effective Date and 30 calendar days following the
date on which such General Unsecured Claim becomes an Allowed
General Unsecured Claim, 1 Class A iCap Trust Interest for each
dollar of Allowed General Unsecured Class A Claims and 1 Class B
iCap Trust Interest for each dollar of Allowed General Unsecured
Class B Claims held by the applicable Holder (any resulting
fractional iCap Trust Interests will be rounded to the nearest
hundredth of such iCap Trust Interest).
* Holders of Allowed Subordinated Claims will retain a
residual right to receive Available Cash that remains in the iCap
Trust after the final administration of all iCap Trust Assets, and
the complete satisfaction of all senior payment rights within the
iCap Trust Interests Waterfall, including satisfaction of all
Investor Class B Claims and General Unsecured Class B Claims.
In these Chapter 11 Cases, the Plan contemplates a liquidation of
each of the Debtors and is therefore referred to as a "plan of
liquidation." The Debtors' assets largely consist of interests in
real properties, Cash, and the iCap Trust Actions under the Plan.
The iCap Trust Actions include all Avoidance Actions and Causes of
Action held by the Debtors or the Estates and any Causes of Action
that are contributed to the iCap Trust as Contributed Claims, in
each case as against any Person that is not a Released Party.
The Plan provides for the creation of the iCap Trust, as well as
the appointment of the iCap Trustees, who will administer and
liquidate all remaining property of the Debtors and their Estates,
subject to the supervision and oversight of the iCap Trust
Supervisory Board, all as described more fully in this Disclosure
Statement.
The Plan also provides for Distributions to be made to certain
Holders of Administrative Expense Claims, Priority Tax Claims,
Priority Claims, Secured Claims, Investor Claims, General Unsecured
Claims, and potentially Subordinated Claims, and for the funding of
the iCap Trust. The Plan also provides for substantive
consolidation of the Debtors and their Estates as of the Effective
Date. Finally, the Plan provides for the approval of the Exit
Financing, the dissolution and wind-up of the affairs of the
Debtors, and the administration of any remaining assets of the
Debtors' Estates by the iCap Trustees.
Class 4 consists of General Unsecured Claims. In full satisfaction,
settlement, and release of and in exchange for such Claims, the
Holders of Allowed General Unsecured Claims will receive on the
later of the Effective Date and 30 calendar days following the date
on which such General Unsecured Claim becomes an Allowed General
Unsecured Claim, 1 Class A iCap Trust Interest for each dollar of
Allowed General Unsecured Class A Claims and 1 Class B iCap Trust
Interest for each dollar of Allowed General Unsecured Class B
Claims held by the applicable Holder (any resulting fractional iCap
Trust Interests will be rounded to the nearest hundredth of such
iCap Trust Interest). All Distributions of Cash on account of the
iCap Trust Interests will be made by the iCap Trust in accordance
with the iCap Trust Interests Waterfall. Class 4 is impaired.
Class 6 consists of all Equity Interests and purported Equity
Interests in the Debtors. On and after the Effective Date, (a)
Holders of Equity Interests shall not be entitled to, and shall not
receive or retain any property or interest in property under the
Plan on account of such Equity Interests and (b) the Equity
Interests shall be deemed to be held by the iCap Trust under
applicable non-bankruptcy law and the iCap Trustees shall be
authorized to exercise all of the rights and powers of a sole
member as provided by the Plan.
The Plan will be implemented through, among other things, the
establishment of the iCap Trust and the appointment of the iCap
Trustees and the iCap Trust Supervisory Board. The iCap Trust will
make Distributions in accordance with the Plan.
A full-text copy of the Disclosure Statement dated July 16, 2024 is
available at https://urlcurt.com/u?l=9cZngP from PacerMonitor.com
at no charge.
Co-Counsel to the Debtors:
Julian I. Gurule, Esq.
O'MELVENY & MYERS LLP
400 South Hope Street, 18th Floor
Los Angeles, California 90071
Telephone: (213) 430-6067
E-mail: jgurule@omm.com
Proposed Co-Counsel to the Debtors:
Oren B. Haker, Esq.
BLACK HELTERLINE LLP
805 SW Broadway
Suite 1900
Portland, OR 97205
Telephone: 503 224-5560
Email: oren.haker@bhlaw.com
About iCap Enterprises
iCap Enterprises, Inc. and affiliates were founded in 2007 by Chris
Christensen to invest in real estate opportunities in the Pacific
Northwest. iCap Enterprises et al. grew quickly, raising more than
$211 million in capital and deploying those funds toward real
estate investments.
The Debtors sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D. Wash. Lead Case No. 23-01243) on
September 29, 2023. In the petition signed by Lance Miller, chief
restructuring officer, iCap Enterprises disclosed up to $100
million in assets and up to $500 million in liabilities.
Judge Whitman L. Holt oversees the case.
The Debtors tapped Buchalter, A Professional Corporation as
counsel, Paladin Management Group, LLC as restructuring financial
advisor, BMC Group Inc. as claims noticing agent and administrative
advisor.
INSPIRED GIFTS: U.S. Trustee Unable to Appoint Committee
--------------------------------------------------------
The U.S. Trustee for Region 14 disclosed in a court filing that no
official committee of unsecured creditors has been appointed in the
Chapter 11 case of Inspired Gifts & Graphics, LLC.
About Inspired Gifts & Graphics
Inspired Gifts & Graphics, LLC filed its voluntary petition for
relief under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Okla.
Case No. 24-11807) on June 28, 2024, listing under $1 million in
both assets and liabilities. Stephen Moriarty, Esq., at Fellers,
Snider, Blankenship, Bailey & Tippens, P.C., serves as Subchapter V
trustee.
Judge Sarah A. Hall oversees the case.
Amanda R. Blackwood, Esq., at Blackwood Law Firm, PLLC represents
the Debtor as bankruptcy counsel.
INVITAE CORP.: Judge Says Chapter 11 Plan Needs Revision
--------------------------------------------------------
Ben Zigterman of Law360 reports that Invitae Corp.'s Chapter 11
plan needs tweaking, Judge says.
A New Jersey bankruptcy judge said he would confirm the Chapter 11
liquidation plan for genetic testing company Invitae, if it made
changes to how it handled distributions to certain creditors.
About Invitae Corp.
Invitae Corporation is a medical genetics company that is in the
business of delivering genetic testing services, digital health
solutions, and health data services that support a lifetime of
patient care and improved outcomes.
Invitae Corp. and five of its affiliates sought relief under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. D.N.J. Lead Case No.
24-11362) on Feb. 13, 2024. In the petition filed by Ana Schrank,
chief financial officer, disclosed $535,115,000 in assets against
$1,618,519,000 in debt.
Judge Michael B. Kaplan oversees the case.
Kirkland & Ellis LLP and Kirkland & Ellis International LLP are the
Debtors' bankruptcy counsel and Cole Schotz, P.C. is the Debtors'
co-bankruptcy counsel. Moelis & Company LLC is the Debtors'
investment banker. FTI Consulting Inc is the Debtors' restructuring
advisor. Kurtzman Carson Consultants LLC is the Debtors's notice
and claims agent. Deloitte Touche Tohmatsu Limited serves as the
Debtors' tax advisor.
IYS VENTURES: Eby-Brown's Claim Not Secured, Court Says
-------------------------------------------------------
In the Chapter 11 case of IYS Ventures, LLC, Judge David S. Cleary
of the United States Bankruptcy Court for the Northern District of
Illinois ruled that Eby-Brown Company, LLC does not hold a
perfected lien securing its debt, that its debt shall be
subordinate and inferior to the Debtor's status as a hypothetical
lien creditor and its interest is unsecured.
The Court will enter a separate order denying Eby-Brown's oral
motion for directed verdict.
The Debtor filed an amended complaint against Itria Ventures, LLC,
Fox Capital Group, Inc., Byzfunder NY, LLC, The Huntington National
Bank and Eby-Brown Company, LLC, seeking to determine the extent,
validity and priority of the Defendants' liens and interests in and
against IYS's assets.
Eby-Brown is a limited liability company organized under the laws
of the state of Delaware. IYS is a member managed limited
liability company organized under the laws of the State of
Illinois.
Eby-Brown and IYS entered into a Credit & Security Agreement on
July 31, 2020, providing for the sale of convenience store products
to IYS. IYS operated gas stations across the United States.
IYS granted to Eby-Brown a security interest in all inventory,
fixtures and personal property of every kind and nature, including
all accounts, goods, documents, instruments, promissory notes,
chattel paper, letters of credit and letter-of-credit rights,
securities and all other investment property, general intangibles,
money, deposit accounts, and any other contracts rights or rights
to the payment of money; and all Proceeds (as defined in the
Uniform Commercial Code) and products of each of the foregoing, in
order to secure payment of IYS's obligations under the Agreement.
The Agreement purports to grant to Eby-Brown a security interest in
the property of Plaintiff to secure any amounts due to Eby-Brown.
Eby-Brown sued IYS and other defendants in DuPage County Circuit
Court. On July 26, 2022, the State Court entered an order against
Debtor and the other defendants.
On May 23, 2023, IYS filed for relief under chapter 11 of the
Bankruptcy Code. The next day, following a hearing, the State Court
entered a judgment against two other defendants.
Eby-Brown filed a proof of claim in the bankruptcy case in the
amount of $7,117,731.00, alleging that its claim is secured. At the
trial on May 8, 2024, the court heard argument and admitted
exhibits into evidence. Stipulations or consent judgments were
reached between Plaintiff and all Defendants other than Eby-Brown.
Eby-Brown claims it holds a valid, second-priority security
interest in the Debtor's assets, Zand therefore a secured claim
against the bankruptcy estate. Plaintiff asserts that Eby-Brown's
security interest is unperfected, and therefore its claim in in
this bankruptcy case is not secured.
At trial, Eby-Brown disputed that the issue of perfection was even
before the court, arguing that the Complaint sought only a
determination of the validity, nature, extent and priority of the
various Defendants' rights.
To determine whether Eby-Brown holds a secured claim, and its
priority among the competing Defendants, the court must necessarily
consider the issue of perfection, Judge Cleary says. The parties
do not dispute that in the Agreement, IYS granted to Eby-Brown a
security interest in various assets. "To be fully effective against
third parties, [however,] a security interest must be perfected[.]"
Therefore, for the Agreement to support a secured proof of claim in
this bankruptcy case, Eby-Brown must have perfected its security
interest prior to the date on which IYS filed for relief under the
Bankruptcy Code, the Court finds.
The reason that Eby-Brown cannot assert a secured claim if its
security interest is unperfected is this: Pursuant to the Uniform
Commercial Code, an unperfected security interest in personalty is
subordinate to the interest of a person who becomes a lien creditor
before the security interest is perfected. In this chapter 11
case, that person is the debtor-in-possession, IYS, the Court
notes.
Therefore, a bankruptcy trustee -- or a chapter 11
debtor-in-possession -- can defeat an unperfected lien interest in
personalty due to its status as a hypothetical lien creditor, the
Court states. According to the Court, if EbyBrown's security
interest was not perfected prior to the date IYS filed for relief
under the Bankruptcy Code, it does not hold a secured claim in this
bankruptcy case. That is why answering the question of perfection
is essential to resolving Debtor's request that the court determine
and declare the extent to which Eby-Brown holds a secured claim,
the Court says.
Eby-Brown suggested in closing arguments that Debtor has not sought
relief under Sec. 544, and therefore cannot defeat its secured
claim. This argument cannot succeed, the Court holds.
Since a chapter 11 debtor-in-possession has "all the rights . . .
and powers . . . of a trustee" in a chapter 11 case, if Debtor
demonstrates that Eby-Brown's lien is unperfected, there is no need
to avoid that lien under Sec. 544, the Court says. It is simply
subordinated, and Eby-Brown is left with an unsecured claim in the
bankruptcy case, the Court adds.
The Court points out, "A security interest in most collateral is
perfected by the filing of a financing statement with the Illinois
Secretary of State. Once the interest in the original collateral
is perfected, the security interest in the proceeds from the
collateral is also perfected."
There is no evidence that Eby-Brown filed a financing statement.
Eby-Brown did not allege the existence of a financing statement and
has not produced any such document, the Court finds. Therefore,
Eby-Brown did not perfect its security interest in Debtor's assets
under state law, the Court further holds.
To the extent Eby-Brown argues not that its state court complaint
and the Asset Freeze Order constituted perfection under state law
but rather form the basis for creation of an equitable lien, the
Court rejects this argument as well. According to Judge Cleary, an
equitable lien will not be created by a court where the means of
perfecting a statutory lien were available but not employed by the
creditor.
Although Eby-Brown argued that Debtor defrauded it, there is no
evidence that anybody or anything prevented Eby-Brown from filing a
financing statement and perfecting its security interest under
state law, the Court finds. Moreover, the Seventh Circuit has told
its lower courts that equitable liens are disfavored in bankruptcy
court, the Court adds.
A copy of the Court's decision dated July 25, 2024, is available at
https://urlcurt.com/u?l=Kf2c9r
About IYS Ventures
IYS Ventures LLC leases, owns and operates gas stations located in
Illinois, Minnesota, Michigan, Indiana, Ohio, South Dakota,
Virginia, Wisconsin, and Louisiana.
The Debtor filed a petition for relief under Chapter 11 of the
Bankruptcy Code (Bankr. N.D. Ill. Case No. 23-06782) on May 23,
2023. In the petition filed by Muwafak Rizek, as manager and
member, the Debtor reported assets between $1 million and $10
million and liabilities between $10 million and $50 million.
Honorable Bankruptcy Judge David D. Cleary oversees the case.
The Debtor is represented by Gregory K Stern, Esq. at Gregory K.
Stern, P.C., represents the Debtor as legal counsel.
JACK OHIO: Moody's Affirms 'B2' CFR & Alters Outlook to Negative
----------------------------------------------------------------
Moody's Ratings affirmed Jack Ohio Finance LLC's ("Jack Ohio")
ratings, including its Corporate Family Rating at B2, Probability
of Default Rating at B2-PD, and Senior Secured Term Loan B and
Senior Secured Revolver Credit Facility at B2. Moody's changed the
outlook to negative from stable.
The change in outlook reflects Jack Ohio's very high Debt/EBITDA
leverage and Moody's expectation that it will remain elevated at
well over 6.0x in the next 12 to 18 months. While Jack Ohio's total
debt has not grown, its EBITDA has not improved to the level
Moody's previously anticipated. Moreover, Jack Ohio has been making
substantial investments to build out its sports betting platform,
called betJACK, which further pressures Jack Ohio's earnings.
RATINGS RATIONALE
Jack Ohio's B2 Corporate Family Rating reflects its high leverage,
which weakly positions the company at the current rating level
based on this metric. The company's Debt/EBITDA leverage, including
Moody's adjustments, is 6.9x for LTM March 31, 2024, having
increased from 6.4x at LTM March 31, 2023 because of lower EBITDA.
Its EBITDA declined approximately 8% because of costs associated
with its investment in betJACK. The ratings also reflect large
annual distributions to owners and Jack Ohio's small size and
geographic concentration in a single market. The large
distributions and high leverage stem from the aggressive financial
policy of Jack Ohio's private ownership. Jack Ohio's management
team owns most of the company.
The ratings also reflect Jack Ohio's good liquidity with a large
cash balance, an undrawn revolver and no near-term debt maturities.
The company's properties face limited direct competition in the
Cleveland gaming market, supporting Jack Ohio's earnings stability
and its positive operating cash flow.
The negative outlook reflects Jack Ohio's very high Debt/EBITDA
leverage and Moody's expectation that it will remain elevated at
well over 6.0x in the next 12 to 18 months.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
An upgrade is unlikely given the negative outlook. Jack Ohio's
ratings could be upgraded if it achieves and sustains Debt/EBITDA
leverage below 4.0x, continues to generate meaningful free cash
flow, and maintains good liquidity including comfortably meeting
its financial covenant requirements.
Ratings could be downgraded if Jack Ohio fails to reduce
debt/EBITDA closer to 6.0x. A deterioration in liquidity could also
lead to a downgrade.
Jack Ohio Finance LLC is a regional gaming operator of two
properties that it sold and leased back from VICI Properties L.P.
(Ba1 positive) in early 2020 in the Cleveland market, Jack
Cleveland Casino and Jack Thistledown Racino. Jack Cleveland Casino
is the only property in the Cleveland gaming market offering table
games and is located within walking distance to many urban
attractions in the heart of Downtown Cleveland. Jack Thistledown
Racino is the home of the Ohio Derby.
The company, majority owned by the management team, is private. Net
revenue for the latest 12-month period ended March 31, 2024 was
approximately $500 million.
The principal methodology used in these ratings was Gaming
published in June 2021.
KINGDOM GROUP REALTY: Begins Subchapter V Bankruptcy Proceeding
---------------------------------------------------------------
Kingdom Group Realty & Investments LLC filed Chapter 11 protection
in the Middle District of Florida. According to court filing, the
Debtor reports $1,713,590 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
August 14, 2024 at 2:00 p.m. in Room Telephonically on telephone
conference line: 866-910-0293. participant access code: 7560574.
About Kingdom Group Realty & Investments
Kingdom Group Realty & Investments LLC owns nine investment
properties all located in Florida having a total current value of
$1.07 million.
Kingdom Group Realty & Investments LLC sought relief under
Subchapter V of Chapter 11 of the U.S. Bankruptcy Code (Bankr. M.D.
Fla. Case No. 24-03945) on July 12, 2024. In the petition filed by
Yelixa Beckner, as manager, the Debtor reports total assets of
$1,068,455 and total liabilities of $1,713,590.
Honorable Bankruptcy Judge Catherine Peek Mcewen handles the case.
The Debtor is represented by:
Buddy D. Ford, Esq.
BUDDY D. FORD, P.A.
9301 West Hillsborough Avenue
Tampa, FL 33615-3008
Tel: (813) 877-4669
Fax: (813) 877-5543
Email: All@tampaesq.com
L.O.F. INC: Plan Exclusivity Period Extended to Oct. 7
------------------------------------------------------
Judge Mindy Mora of the U.S. Bankruptcy Court for the Southern
District of Florida extended L.O.F., Inc.'s exclusive periods to
file a plan of reorganization and obtain acceptance thereof to
October 7 and December 5, 2024, respectively.
As shared by Troubled Company Reporter, the Debtor is working with
its two largest secured creditors, Old National Bank and Amazon
Capital Services toward the feasibility of filing a consensual
Plan. As part of this Plan, there likely needs to be a sale of
collateral owned by a non-Debtor third party who is also an obligor
on the Old National Bank loan. The Debtor hired a financial
professional in this case who has been diligently preparing
historical reports as well as future projections to support a
Plan.
The Debtor claims that it is not seeking this extension to delay
the administration of the case. The Debtor's request for an
extension of the Exclusive Periods is reasonable given the Debtor's
progress to date.
L.O.F., Inc., is represented by:
Craig I. Kelley, Esq.
Dana Kaplan, Esq.
Kelley Kaplan & Eller, PLLC
1665 Palm Beach Lakes Blvd. Suite 1000
West Palm Beach, FL 33401
Tel: (561) 491-1200
Fax: (561) 684-3773
Email: craig@kelleylawoffice.com
About L.O.F., Inc
L.O.F., Inc., was founded in 1968 in Northwest Indiana as a retail
Recreational Vehicle sales operation. In 2011, the Company changed
its focus to replacement automotive and industrial products under
its brands such as Best In Auto, TruckChamp, Red Hound Auto, and
Polar Whale.
Debtor: L.O.F., Inc. in Wellington, FL 33414, filed its voluntary
petition for Chapter 11 protection (Bankr. S.D. Fla. Case No.
24-13350) on April 8, 2024, listing $1,198,800 in assets and
$8,259,975 in liabilities. Laszlo Kovach as president, signed the
petition.
Judge Mindy A. Mora oversees the case.
KELLEY KAPLAN & ELLER, PLLC, serves as the Debtor's legal counsel.
LA FAMILIA DEL PASO INC: Files for Chapter 11 Bankruptcy
--------------------------------------------------------
La Familia Del Paso Inc. filed Chapter 11 protection in the Western
District of Texas. According to court filing, the Debtor reports
between $1 million and $10 million 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
August 22, 2024 at 1:00 p.m. in Room Telephonically on telephone
conference line: (866)909-2905. participant access code: 5519921#.
About La Familia Del Paso Inc.
La Familia Del Paso Inc. is a mental health services provider in El
Paso, Texas.
La Familia Del Paso Inc. sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. W.D. Tex. Case No. 24-30847) on July 16,
2024. In the petition filed by Lucia R. Dawson, as executive
director, the Debtor reports estimated assets between $100,000 and
$500,000 and estimated liabilities between $1 million and $10
million.
The Debtor is represented by:
Carlos Miranda, Esq.
MIRANDA & MALDONADO, PC
5915 Silver Springs Bldg. 7
El Paso, TX 79912
Tel: (915) 587-5000
E-mail: cmiranda@eptxlawyers.com
LBB PLATFORM LLC: Seeks Chapter 11 Bankruptcy Protection
--------------------------------------------------------
LBB Platform LLC filed Chapter 11 protection in the Northern
District of Texas. 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
August 21, 2024 at 2:30 p.m. in Room Telephonically.
About LBB Platform LLC
LBB Platform LLC owns a restaurant business.
LBB Platform LLC sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Tex. Case No. 24-42487) on July 18,
2024. In the petition filed by Mike Pruitt, as president, the
Debtor reports estimated assets between $100,000 and $500,000 and
estimated liabilities between $1 million and $10 million.
The Debtor is represented by:
Richard Grant, Esq.
CULHANE, PLLC
13101 Preston Road, Suite 110-1510
Dallas TX 75240
Tel: 214-210-2929
Email: rgrant@cm.law
LENY BERRY HOLDINGS: Seeks Chapter 11 Bankruptcy Protection
-----------------------------------------------------------
LENY Berry Holdings LLC filed Chapter 11 protection in the Eastern
District of New York. According to court documents, the Debtor
reports between $50 million and $100 million 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
August 26, 2024 at 11:00 a.m. in Room Telephonically on telephone
conference line: 1 (866) 919-4760. participant access code:
4081400#.
About LENY Berry Holdings LLC
LENY Berry Holdings LLC is the fee owner of the mixed-use retail
and residential apartment building located at 103-113 North 3rd
Street and 188-190 Berry Street, Brooklyn, NY.
LENY Berry Holdings LLC sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D.N.Y. Case No. 24-42947) on July 17,
2024. In the petition filed by Ephraim Diamond, as chief
restructuring officer, the Debtor reports estimated assets and
liabilities between $50 million and $100 million each.
Honorable Bankruptcy Judge Nancy Hershey Lord handles the case.
The Debtor is represented by:
Kevin Nash, Esq.
GOLDBERG WEPRIN FINKEL GOLDSTEIN LLP
125 Park Ave
New York, NY 10017-5690
Email: knash@gwfglaw.com
LIDO 10 LLC: Seeks Chapter 11 Bankruptcy Protection
---------------------------------------------------
Lido 10 LLC filed Chapter 11 protection in the Central District of
California. According to court documents, the Debtor reports
between $10 million and $50 million in debt owed to 1 and 49
creditors.
A meeting of creditors under 11 U.S.C. Section 341(a) is slated for
August 27, 2024 at 9:00 a.m. at UST-SA1, TELEPHONIC MEETING. On
telephone conference line: 1-866-919-0527. participant access code:
2240227.
About Lido 10 LLC
Lido 10 LLC is a limited liability company.
Lido 10 LLC sought relief under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. C.D. Cal. Case No. 24-11818) on July 19, 2024. In the
petition filed by Ronald L. Meer, president of the sole managing
member of the Debtor's sole managing member, the Debtor reports
estimated assets and liabilities between $10 million and $50
million each.
The Honorable Bankruptcy Judge Theodor Albert oversees the case.
The Debtor is represented by:
Matthew D. Resnik, Esq.
RHM LAW LLP
17609 Ventura Blvd.
Ste 314
Encino, CA 91316
Tel: (818) 285-0100
Fax: (818) 855-7013
Email: matt@rhmfirm.com
LILIS ENERGY: Clawback Suit vs ICT Energy Goes to Trial
-------------------------------------------------------
Judge Marvin Isgur of the United States Bankruptcy Court for the
Southern District of Texas entered a Memorandum Opinion on motions
for summary judgment filed by the parties in the case, JOHN D.
BAUMGARTNER, SOLELY IN HIS CAPACITY AS THE UNSECURED CLAIM POOL
SUB-TRUSTEE, Plaintiff, VS. ICT ENERGY SOLUTIONS, LLC, Defendant,
ADVERSARY NO. 22-3193 (Bankr. S.D. Texas) relating to a $165,622.63
payment Lilis Energy, LLC made to ICT Energy Solutions, LLC in a
dispute over a manufactured equipment.
ICT is a manufacturer of oil and gas production equipment. On
November 18, 2019, ICT entered into a Master Services Agreement
with Impetro Operating LLC, Lilis' debtor-affiliate, under which
ICT agreed to manufacture and furnish equipment to Lilis for use in
its oil and gas operations. ICT claims the manufactured equipment
procured under the MSA was delivered to Lilis "for use in the
treating of crude oil."
Baumgartner claims "the Debtors rejected delivery of the vessels
contracted-for under the MSA because they were not built to the
specifications desired by the Debtors." According to Judge Isgur,
the evidence shows the equipment was delivered, but it is unclear
whether the equipment was defective when it was delivered. The
invoices for the equipment total $165,622.63.
A dispute arose between ICT and Lilis regarding the manufactured
equipment. Due to this dispute, Lilis did not pay for the
equipment. The parties entered into an agreement to resolve the
dispute on April 15, 2020. ICT received the $165,622.63 payment
from Lilis on April 30, 2020.
Baumgartner, in his capacity as the Unsecured Claim Pool SubTrustee
of the Debtor, filed this adversary proceeding on June 27, 2022,
asserting causes of action for avoidable preference under 11 U.S.C.
Sec. 547 and recovery of avoided transfers under 11 U.S.C. Sec.
550. ICT counters with an implied vendor's lien defense, as well
as contemporaneous exchange of new value and ordinary course of
business defenses under Sec. 547(c).
The parties filed motions for summary judgment after the close of
discovery.
Under 11 U.S.C. Sec. 547(b), to avoid the $165,622.63 transfer as a
preference, Baumgartner must demonstrate that the transfer was:
(1) to or for the benefit of a creditor;
(2) for or on account of an antecedent debt owed by the debtor
before such transfer was made;
(3) made while the debtor was insolvent;
(4) made --
(A) on or within 90 days before the date of the filing of
the petition; or
(B) between ninety days and one year before the date of the
filing of the petition, if such creditor at the time of the
transfer was an insider; and
(5) that enables such creditor to receive more than such
creditor would receive if --
(A)the case were a case under chapter 7 of this title;
(B)the transfer had not been made; and
(C)such creditor received payment of such debt to the extent
provided by the provisions of this title.
With respect to the first element, the parties do not dispute that
Lilis was obligated to pay the transfer as a result of the
indebtedness owed to ICT resulting from the parties' settlement
agreement. That settlement agreement obligated Lilis to pay to ICT
the exact amount of the transfer. The debt owed to ICT is
sufficient to establish ICT as a creditor under 11 U.S.C. Sec.
101(10), the Court states. This element is satisfied.
With respect to the second element, [a] debt is 'antecedent' for
purposes of Sec. 547(b) if it was incurred before the alleged
preferential transfer." ICT admits that the transfer "satisfied
the indebtedness agreed to within the settlement agreement between
the parties." The indebtedness arose prior to the transfer. This
element is satisfied.
With respect to the third element, "the debtor is presumed to have
been insolvent on and during the 90 days immediately preceding the
date of the filing of the petition." ICT offers no evidence to
rebut the presumption of insolvency, the Court finds. This element
is satisfied.
With respect to the fourth element, ICT is not an insider of Lilis,
the Court states. The 90-day timeframe applies under Sec. 547(f).
Lilis filed its bankruptcy June 28, 2020. The preferential period
is March 30, 2020, through June 28, 2020. The parties do not
dispute that the transfer was made on April 30, 2020. April 30,
2020, is well within the preference period. This element is
satisfied. Elements (1) through (4) of Sec. 547(b) are satisfied.
ICT's answer seeks to apply the inchoate lien defense as of an
implied vendor's lien. It argues that it "had a valid, enforceable
implied vendor's lien because (1) ICT was entitled to perfect its
vendor's lien under Texas law at the time it received the Transfer,
and (2) its perfection of the lien would not be avoidable under the
Bankruptcy Code." However, ICT no longer asserts an implied
vendor's lien, instead relying on a statutory mineral lien as the
basis for its inchoate lien defense.
As Baumgartner identifies, an implied vendor's lien applies only to
the context of real property transfers. ICT has not cited, and the
Court has not been able to identify, any authority applying an
implied vendor's lien to a conveyance of personal property. Because
the manufactured equipment delivered to Lilis is not real property,
and ICT provides no explanation as to how an implied vendor's lien
would apply to the transaction, ICT has failed to demonstrate a
genuine issue of material fact as to its entitlement to an implied
vendor's lien to satisfy the inchoate lien defense, the Court
concludes.
ICT may not assert an implied vendor's lien as the basis of its
inchoate lien defense.
According to the Court, although elements (1) through (4) of Sec.
547(b) are met, the Court is unable to determine at this stage of
the proceeding whether ICT had the right to perfect a statutory
lien sufficient to warrant the inchoate lien defense to Sec.
547(b)(5). There is a genuine issue of material fact as to the
applicability of the defense, the Court finds.
ICT asserts the contemporaneous exchange of new value and ordinary
course of business defenses under Sec. 547(c). Baumgartner moves
for summary judgment, seeking a finding that the defenses are
inapplicable. None of ICT's Sec. 547(c) affirmative defenses
shield the transfer, the Court holds. The defenses are dismissed,
the Court rules.
The Court points out ICT did not release a lien previously
transferred from Lilis to ICT in exchange for the transfer. ICT's
release of its right to perfect a potential statutory mineral lien
did not provide any new value to Lilis. ICT has not identified any
other basis for providing new value to Lilis, the Court states.
ICT's contemporaneous exchange of new value defense is dismissed,
the Court holds.
Baumgartner argues that the ordinary course of business defense
does not apply because the transfer was made in settlement of
potential litigation claims. ICT argues that courts have found
that payments made pursuant to debt restructuring agreements can be
within the ordinary course of business.
ICT makes a strained argument, the Court notes. The authorities
relied on by ICT involved either payments made in satisfaction of
past due invoices or payments made pursuant to actual debt
restructuring, the Court points out. The Court finds the transfer
at issue was not made pursuant to a debt restructuring agreement.
As Baumgartner identifies, the transfer was a payment made pursuant
to an agreement to settle and release any claims either party may
have against the other. The settlement agreement, which was
entered into on the eve of a bankruptcy filing, specifically
provides that in exchange for the transfer, the Court notes.
The Court agrees that the transfer was not made in the ordinary
course of business.
ICT asserts that the transfer pursuant to the parties' settlement
satisfies the ordinary business terms defense because the type of
settlement was a standard industry practice at the time the
transfer was made.
To meet its burden, ICT would have to provide evidence of ordinary
payment arrangements within the industry and in the relative time
period to demonstrate that the parties' settlement fell at least
within the "outer boundaries" of ordinary practices. ICT has
failed to provide any evidence of industry practices, the Court
says.
ICT's inference that the ordinary means of resolving disputes would
transmogrify the payment into industry terms is inconsistent with
the plain meaning of the statute, the Court holds. ICT has failed
to meet its burden of providing evidence to create a genuine issue
of material fact as to whether the transfer fell within ordinary
business terms, the Court concludes. The defense is inapplicable.
A copy of the Court's decision dated July 19, 2024, is available at
https://urlcurt.com/u?l=hFamb0
About Lilis Energy Inc.
Lilis Energy, Inc. -- https://www.lilisenergy.com/ -- is a
publicly-traded, independent oil and natural gas company focused on
the exploration, development, production, and acquisition of crude
oil, natural gas, and natural gas liquids. Headquartered in Fort
Worth, Texas, Lilis is a pure play Permian Basin company with
focused operations in the Delaware Basin.
Lilis Energy and its affiliates sought protection under Chapter 11
of the Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 20-33274) on
June 28, 2020. As of Dec. 31, 2019, the Debtors had total assets of
$258.6 million and total liabilities of $251.2 million.
The case was initially assigned to Judge David R. Jones. Judge
Marvin Isgur later took over.
The Debtors tapped Vinson & Elkins, LLP as legal counsel; Barclays
Capital, Inc., as investment banker and financial advisor; BDO, USA
LLP as accountant and tax advisor; and Stretto as notice, claims
and solicitation agent.
Independent exploration and production company Ameredev Texas LLC
won a bid to acquire all of Lilis' assets for a $46.6 million cash
payment. The deal closed Dec. 2, 2020. The Court confirmed Lilis'
joint Chapter 11 plan of liquidation on Nov. 17, 2020, and the plan
had an effective date of Dec. 4. John D. Baumgartner was appointed
as the Unsecured Claim Pool Sub-Trustee.
LITHIUM PRODUCTS: Seeks Chapter 11 Bankruptcy Protection
--------------------------------------------------------
Lithium Products LLC filed Chapter 11 protection in the Eastern
District of Tennessee. According to court filing, the Debtor
reports $2,967,559 in debt owed to 1 and 49 creditors. The petition
states that funds will not be available to unsecured creditors.
A meeting of creditors under 11 U.S.C. Section 341(a) is slated for
August 12, 2024 at 10:00 a.m. in Room Telephonically on telephone
conference line: 877-647-0236. participant access code: 1558052.
About Lithium Products LLC
Lithium Products LLC offers ultra lightweight lithium-ion batteries
to the racing, EV, marine, fleet, and specialty markets.
Lithium Products LLC sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D. Tenn. Case No. 24-31215) on July 11,
2024. In the petition filed by Kevin Bennett, as president, the
Debtor reports total assets of $696,057
and total liabilities of $2,967,559.
The Honorable Bankruptcy Judge Suzanne H. Bauknight handles the
case.
The Debtor is represented by:
Lynn Tarpy, Esq.
TARPY, COX, FLEISHMAN & LEVEILLE, PLLC
1111 N Northshore Dr
Suite N-290
Knoxville, TN 37919
Tel: (865) 588-1096
Fax: (865) 588-1171
Email: ltarpy@tcflattorneys.com
LLT MANAGEMENT: 3rd Circuit Upholds J&J's 2nd Chapter 11 Dismissal
------------------------------------------------------------------
Evan Ochsner of Bloomberg Law reports that Johnson & Johnson's
second bankruptcy dismissal upheld by Third Circuit.
A Johnson & Johnson unit was rightly thrown out of bankruptcy court
because the bankruptcy wasn't filed in good faith, an appellate
court said.
LTL Management LLC wasn't financially distressed and therefore its
bankruptcy wasn't filed in good faith, the US Court of Appeals for
the Third Circuit ruled in a nonprecedential opinion Thursday, July
25, 2024, upholding a dismissal order from the US Bankruptcy Court
for the District of New Jersey.
"On the record before us, the 'attenuated' possibility of
insolvency far in the future does not offer sufficient financial
distress today to justify a Chapter 11 filing," Judge Thomas L.
Ambro said.
About LLT Management
LLT Management, LLC, (formerly known as LTL Management LLC), is a
subsidiary of Johnson & Johnson (J&J), which was formed to manage
and defend thousands of talc-related claims and oversee the
operations of Royalty A&M. Royalty A&M owns a portfolio of royalty
revenue streams, including royalty revenue streams based on
third-party sales of LACTAID, MYLANTA/MYLICON and ROGAINE
products.
LTL Management filed a petition for Chapter 11 protection (Bankr.
W.D.N.C. Case No. 21-30589) on Oct. 14, 2021. The case was
transferred to New Jersey (Bankr. D.N.J. Case No. 21-30589) on Nov.
16, 2021. The Hon. Michael B. Kaplan is the case judge. At the time
of the filing, the Debtor was estimated to have $1 billion to $10
billion in both assets and liabilities.
The Debtor tapped Jones Day and Rayburn Cooper & Durham, P.A., as
bankruptcy counsel; King & Spalding, LLP and Shook, Hardy & Bacon
LLP as special counsel; McCarter & English, LLP as litigation
consultant; Bates White, LLC as financial consultant; and
AlixPartners, LLP, as restructuring advisor. Epiq Corporate
Restructuring, LLC, is the claims agent.
An official committee of talc claimants was formed in the Debtor's
Chapter 11 case on Nov. 9, 2021. On Dec. 24, 2021, the U.S. Trustee
for Regions 3 and 9 reconstituted the talc claimants' committee and
appointed two separate committees: (i) the official committee of
talc claimants I, which represents ovarian cancer claimants, and
(ii) the official committee of talc claimants II, which represents
mesothelioma claimants.
The official committee of talc claimants I tapped Genova Burns LLC,
Brown Rudnick LLP, Otterbourg PC and Parkins Lee & Rubio LLP as its
legal counsel. Meanwhile, the official committee of talc claimants
II is represented by the law firms of Cooley LLP, Bailey Glasser
LLP, Waldrep Wall Babcock & Bailey PLLC, Massey & Gail LLP, and
Sherman Silverstein Kohl Rose & Podolsky P.A.
Re-Filing of Chapter 11 Petition
On Jan. 30, 2023, a panel of the Third Circuit issued an opinion
directing the Court to dismiss the 2021 Chapter 11 case on the
basis that it was not filed in good faith. Although the Third
Circuit panel recognized that the Debtor "inherited massive
liabilities" and faced "thousands" of future claims, it concluded
that the Debtor was not in financial distress before the filing.
On March 22, 2023, the Third Circuit entered an order denying the
Debtor's petition for rehearing. The Third Circuit entered an order
denying LTL's stay motion on March 31, 2023, and, on the same day,
issued its mandate directing the Bankruptcy Court to dismiss the
2021 Chapter 11 Case.
The Bankruptcy Court entered an order dismissing the 2021 Case on
April 4, 2023.
Johnson & Johnson on April 4, 2023, announced that its subsidiary
LTL Management LLC (LTL) has re-filed for voluntary Chapter 11
bankruptcy protection (Bankr. D.N.J. Case No. 23-12825) to obtain
approval of a reorganization plan that will equitably and
efficiently resolve all claims arising from cosmetic talc
litigation against the Company and its affiliates in North
America.
In August 2023, U.S. Bankruptcy Judge Michael Kaplan in Trenton,
New Jersey, ruled that the second bankruptcy case should be
dismissed, ending J&J's second attempt to use bankruptcy to resolve
thousands of lawsuits alleging that its talc products sometimes
contained asbestos and caused mesothelioma and ovarian cancer.
LOUISIANA DELTA: Voluntary Chapter 11 Case Summary
--------------------------------------------------
Debtor: Louisiana Delta Oil Company, LLC
2245 Garth Road
Charlottesville VA 22901
Business Description: The Debtor is in the crude petroleum
extraction business.
Chapter 11 Petition Date: August 1, 2024
Court: United States Bankruptcy Court
Eastern District of Louisiana
Case No.: 24-11493
Judge: Hon. Meredith S Grabill
Debtor's Counsel: Frederick Bunol, Esq.
THE DERBES LAW FIRM, LLC
3027 Ridgelake Drive
Metairie LA 70002
Tel: 504-207-0908
Email: fbunol@derbeslaw.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Ethan A. Miller as president/manager.
The Debtor failed to include in the petition a list of its 20
largest unsecured creditors.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/XNVLUAI/Louisiana_Delta_Oil_Company_LLC__laebke-24-11493__0001.0.pdf?mcid=tGE4TAMA
MEIR'S WINE CELLARS: Gets Court Okay to Tap $60.5 Mil. DIP Funding
------------------------------------------------------------------
Vince Sullivan of Law360 reports that bankrupt wine producer and
processor Vintage Wine Estates received permission Thursday, July
25, 2024, from a Delaware bankruptcy judge to begin borrowing under
a $60. 5 million debtor-in-possession financing package being
provided by its prepetition lenders.
About Meier's Wine Cellars Acquisition LLC
Meier's Wine Cellars Acquisition LLC --
https://www.vintagewineestates.com -- sought relief under Chapter
11 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 24-11575)
on July 24, 2024. In the petition filed by Kristina Johnston, as
secretary and treasurer, the Debtor reports estimated assets and
liabilities between $100 million and $500 million each.
The debtor is represented by Zachary Javorsky, Matthew P. Milana
and Zachary I Shapiro of Richards, Layton & Finger, P.A. and Jones
Day as its legal counsels.
The debtor also hired GLC Advisors & Co., LLC, as investment
banking advisor and Riveron Consulting, LLC, as financial advisor.
MIDNIGHT MADNESS: Court Narrows Claims in Parzych, et al. Case
--------------------------------------------------------------
In the case captioned as BONNIE FINKEL, in her capacity as Chapter
7 Trustee for Midnight Madness Distilling LLC, Plaintiff, v. Casey
Parzych, et al., Defendants, Adversary No. 23-00047-MDC (Bankr.
E.D. Pa.), Judge Magdeline D. Coleman of United States Bankruptcy
Court for the Eastern District of Pennsylvania will grant, in part,
and deny, in part, the motion filed by certain of the defendants to
dismiss the adversary action.
The Complaint lodges 14 counts against some or all Defendants,
asserting a variety of claims based on actions they allegedly took
or did not take both pre-petition and postpetition that had the
effect of rendering or deepening the Debtor's insolvency and
depressing its value in the sale process approved by the Court
during the Debtor's Chapter 11 bankruptcy case.
The Complaint's Counts:
1. Count 1 - Breach of Fiduciary Duty (Insider Defendants)
2. Count 2 - Aiding and Abetting Breach of Fiduciary Duty (All
Defendants)
3. Count 3 - Corporate Waste (Insider Defendants)
4. Count 4 - Alter Ego, Veil Piercing, Successor Liability
(All Defendants)
5. Count 5 - Unjust Enrichment (All Defendants)
6. Count 6 - Accounting (All Defendants)
7. Count 7 - Constructive Trust (All Defendants)
8. Count 8 - Breach of Contract (Casey and Rittenburg) and
Declaratory Relief (Pilfering Entities)
9. Count 9 - Breach of Contract (Finland Leasing)
10. Count 10 - Equitable Subordination (All Defendants)
11. Count 11 - Turnover Under §542 of the Bankruptcy Code (All
Defendants)
12. Count 12 - Avoidance/Recovery of Post-Petition Transfers
Under Secs. 549 and 550 of the Bankruptcy Code (Best Bev
Defendants)
13. Count 13 - Avoidance/Recovery of Preferential Transfers
Under Secs. 547 and 550 of the Bankruptcy Code (Finland Leasing,
ETP, and Boyer)
14. Count 14 - Avoidance/Recovery of Fraudulent Transfers Under
Secs. 548 and 550 of the Bankruptcy Code (Finland Leasing and ETP)
The Defendants assert the Complaint should be dismissed with
respect to them pursuant to Federal Rule of Civil Procedure
12(b)(6) because none of the Counts against them states a claim for
which relief can be granted.
The Plaintiff filed an opposition brief to the Motion to Dismiss to
which the Moving Defendants filed a reply brief. The Court held a
hearing on Motion to Dismiss, the Opposition, and the Reply on
March 1, 2024, after which it took the matter under advisement.
1. The Insider Defendants
There are six individual Defendants that the Complaint refers to as
the Insider Defendants. Each is alleged to have had a role or roles
with the Debtor and with one or more of the other Defendant
entities. Those individuals, and their respective alleged former
roles with the Debtor, are:
(i) Casey Parzych, the Debtor's Manager, majority Member,
and from 2012 to 2020, its President and Treasurer;
(ii) Angus Rittenburg, alleged to have been an officer and
Member of the Debtor;
(iii) Kelly Festa, the Debtor's Chief Financial Officer;
(iv) Ashleigh Baldwin, the Debtor's spokesperson and agent
(and Casey's wife);
(v) Michael Boyer, general counsel to the Debtor; and
(vi) R.F. Culbertson, the Debtor's Chief Operating Officer
and a Member of the Debtor.
2. The Polebridge Entities
These Defendants are alleged to be alter egos of one another and to
have misappropriated Debtor resources to divert two products, the
CBDelight beverage and Faber Hand Sanitizer, away from the Debtor
to obtain the profits therefrom. They are:
(i) Polebridge, LLC, a Pennsylvania limited liability
company; and
(ii) Good Design, Inc., a Canadian corporation alleged to
be owned by Baldwin, Rittenburg, and non-Defendant Thomas
Rittenburg
3. The Wynk Entities and Shawn Sheehan
These Defendants are alleged to be alter egos of each other, under
the control of Casey and Shawn Sheehan, and to have misappropriated
Debtor resources to produce, market and sell a beverage called Wynk
Seltzer. They are:
(i) AgTech PA LLC f/k/a American Cannabis LLC, a
Pennsylvania limited liability company;
(ii) XO Energy Worldwide, LLLP (“XO Energy”), a U.S.
Virgin Islands limited liability limited partnership;
(iii) XO EW, LLC, a U.S. Virgin Islands limited liability
company;
(iv) Sheehan, Chief Executive Officer, manager and sole
member of XO EW;
(v) AgTech VI, LLC, a U.S Virgin Islands limited
liability company owned and operated by XO Energy and XO EW, which
in turn is owned by Sheehan; and
(vi) Canvas 340, LLC, a U.S. Virgin Islands limited
liability company, for which Sheehan and the Shawn P. Sheehan
Revocable Trust serve as members.
4. The Best Bev Entities and Ryan Uszenski
These Defendants are alleged to be alter egos of one another and to
have misappropriated Debtor resources to profit from beverage sales
and beverage packaging sales. They are:
(i) Can Man LLC d/b/a Best Bev, a Pennsylvania limited
liability company;
(ii) Best Bev, LLC, a U.S. Virgin Islands limited
liability company which Sheehan owns and controls through the
corporate chain of XO EW, XO Energy, and EtOH;
(iii) EtOH Worldwide LLC, a U.S. Virgin Islands limited
liability company; and
(iv) Ryan Uszenski, manager of Can Man and Best Bev.
5. The Gary Parzych Entities and Gary Parzych
These Defendants are alleged to have received fraudulent transfers
from the Debtor and/or inappropriately interfered with the sale of
the Debtor's asset in the chapter 11 case. They
are:
(i) Finland Leasing Co., Inc., a Pennsylvania corporation
the Debtor's former landlord;
(ii) Eugene T. Parzych, Inc., a Pennsylvania corporation;
and
(iii) Gary Parzych, president and owner of Finland and ETP
and Casey's father.
6. The Pilfering Entities
The Complaint defines and refers to the Polebridge Entities, the
Wynk Entities, and the Best Bev Entities collectively as the
Pilfering Entities.
7. The Sheehan Entities
The Complaint defines and refers to the U.S. Virgin Island-based
group of Defendants as the Sheehan Entities, consisting of AgTech
VI, XO Energy, XO EW, EtOH, and the Dissolved AgTech Entities.
8. The Moving Defendants
The Moving Defendants are all Defendants other than Finland
Leasing, ETP, Gary, Can Man, and Uszenski, who together filed an
Answer to the Complaint.
Plaintiff alleges that the some or all of the Insider Defendants
colluded with Sheehan to depress the value of the Debtor, first
before the Debtor filed for bankruptcy, and then postpetition in
the sale process before this Court.
With respect to their pre-petition efforts, after the Debtor
defaulted on the PNC loan on February 28, 2021 due to the diversion
of revenue and profits to the Polebridge Entities and the Wynk
Entities, the Defendants sought to have certain of the Sheehan
Entities either purchase the PNC debt or purchase the Debtor's
assets outside of bankruptcy. However, rather than engage in an
arms-length transaction, certain of the Defendants coordinated with
the Sheehan Entities and sought to portray a low value of the
Debtor in hopes of allowing the Sheehan Entities to acquire the
business for less than fair value. Then in the lead-up to the
Debtor's bankruptcy filing, Sheehan and Parzych jointly retained a
public relations firm to direct marketing strategies in
anticipation of Sheehan's acquisition of the Debtor's assets.
Sheehan also sent a letter to PNC as President of EtOH, seeking
PNC's cooperation in a bankruptcy sale of the Debtor's assets at a
depressed price to the Best Bev Entities, reasoning that the assets
had a higher value as a going concern, highlighting the issues that
would arise with selling them piecemeal, and noting the
complicating factor of Gary being unwilling to lease the Debtor's
space to another party.
On the Petition Date, the Debtor filed a sale motion proposing to
sell its assets to EtOH. The Complaint alleges the Debtor did so
without disclosing the full extent of its relationship with EtOH.
The Complaint further alleges that the Defendants then took various
actions to chill the sale process and steer it toward the Sheehan
Entities. In late July and August 2021, creditors and PNC were
raising concerns with the U.S. Trustee and the Debtor's bankruptcy
counsel regarding the Debtor's relationship with and to the Wynk
Entities, which Casey Parzych had denied both at the Debtor's
meeting of creditors and in a subsequent written statement, and
Casey's relationship with the Sheehan Entities, particularly given
that one (EtOH) was the stalking horse for the sale. Ultimately
Millstone Spirits Group LLC was named the winning bidder in the
bankruptcy sale for a purchase price of $1.4 million, the
assumption of certain contracts, and the payment of certain
administrative expenses, but the Complaint asserts this is far less
than the Debtor would have obtained through a fair bidding process.
The Complaint alleges that the Defendants not only misappropriated
the Debtor's resources and looted its assets pre-petition for the
benefit of the Pilfering Entities, but continued to do so
post-petition. The Debtor made various post-petition transfers of
assets to or for the benefit of the Best Bev Entities, including:
(i) transferring an industrial shrink wrap machine to Best
Bev's location, then having Festa falsely inform Millstone it had
to be scrapped;
(ii) using the Debtor's account and making post-petition
payment for supplies delivered to Best Bev, which Festa instructed
vendors to tell the chapter 7 trustee were being delivered to the
Debtor, and
(iii) removal of various pieces of equipment from the Debtor's
facility for the benefit of the Best Bev Entities.
The Court will grant the Motion to Dismiss in part and deny it in
part, as follows:
1. Count 1 is not dismissed as against any Moving Defendant.
2. Count 2 is not dismissed as against any Moving Defendant.
3. Count 3 is not dismissed as against any Moving Defendant.
4. Count 4 is dismissed without prejudice as against Festa,
Baldwin, Boyer, and Sheehan only, and is not dismissed as against
all other Moving Defendants.
5. Count 5 is not dismissed as against any Moving Defendant.
6. Count 6 is dismissed without prejudice as against all
Moving Defendants.
7. Count 7 is dismissed without prejudice as against all
Moving Defendants.
8. Count 8 is not dismissed as against any Moving Defendant.
9. Count 10 is dismissed without prejudice against all Moving
Defendants other than AgTech VI, EtOH, and Boyer, against whom
Count 10 is not dismissed.
10. Count 11 is dismissed without prejudice as against all
Moving Defendants solely to extent it seeks turnover of (i)
payments the Debtor allegedly made to Finland Leasing and ETP, and
(ii) intellectual property and Work Product, as defined in the LLC
Agreement.
11. Count 12 is dismissed without prejudice as against all
Moving Defendants.
12. Count 13 is not dismissed as against Boyer.
A copy of the Court's decision dated July 23, 2024, is available at
https://urlcurt.com/u?l=tOeoro
About Midnight Madness Distilling
Midnight Madness Distilling LLC, a Trumbauersville, Pa.-based
company that operates in the beverage manufacturing industry, filed
its voluntary petition for relief under Chapter 11 of the
Bankruptcy Code (Bankr. E.D. Pa. Case No. 21-11750) on June 21,
2021. Casey Parzych, manager, signed the petition. At the time of
filing, the Debtor had between $1 million and $10 million in both
assets and liabilities.
Judge Magdeline D. Coleman oversees the case.
Flaster/Greenberg, P.C., is the Debtor's legal counsel.
MMA LAW FIRM: Asks Court for Chapter 11 Plan Extension
------------------------------------------------------
Tom Lotshaw of Law360 reports that troubled Houston law firm MMA
Law asked a Texas bankruptcy court to extend the exclusivity period
to file a Chapter 11 plan for 120 more days, with a current filing
exclusivity period set to end in early August 2024.
About MMA Law Firm
MMA Law Firm PLLC is a law firm specializing in insurance claim
management, negotiation, and litigation.
MMA Law Firm PLLC sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Tex. Case No. 24-31596) on April 9,
2024. In the petition signed by Zach Moseley, as managing member,
the Debtor estimated assets between $100 million and $500 million
and estimated liabilities between $10 million and $50 million.
The Honorable Bankruptcy Judge Eduardo V. Rodriguez oversees the
case.
The Debtor is represented by Johnie Patterson, Esq., at Walker &
Patterson, P.C.
MOTUS GI: Jeff Varsalone to Lead Winding Down of Business Affairs
-----------------------------------------------------------------
Motus GI Holdings, Inc. announced that on July 31, 2024, the Board
of Directors of the Company approved the wind-down of the Company's
affairs to the fullest extent permitted by law.
On July 31, 2024, Timothy Moran, Scott Durbin, Sonja Nelson, Mark
Pomeranz and Gary Pruden resigned from the Board of Directors of
the Company. Additionally, Mark Pomeranz resigned from his role as
chief executive officer of the Company. Timothy Moran, Scott
Durbin, Sonja Nelson, Mark Pomeranz and Gary Pruden did not resign
from their positions over any disagreements with the Company's
Board or management.
Effective immediately upon the effectiveness of such departures,
the Board appointed Jeff Varsalone as sole director and president
of the Company for the purpose of assisting with the wind-down of
the Company's business affairs to the fullest extent permitted by
law.
Special Meeting Lacks Quorum
On July 25, 2024, the Company held a special meeting of its
stockholders to vote on the two proposals described in detail in
the Company's definitive proxy statement filed with the U.S.
Securities and Exchange Commission on June 26, 2024 and mailed to
the Company's stockholders on or about such date.
As disclosed in the Proxy Statement, as of the close of business on
June 17, 2024, the record date for the Special Meeting, there were
6,388,876 shares of the Company's common stock outstanding and
entitled to vote at the Special Meeting. A total of 1,799,407
shares of the Company's common stock, representing approximately
28.16% of the shares outstanding and entitled to vote, were
represented in person or by valid proxies at the Special Meeting.
Thus, there were insufficient votes represented in person or by
valid proxies to constitute a quorum for the transaction of
business at the Special Meeting. The Special Meeting will not be
further adjourned.
About Motus GI Holdings
Ft. Lauderdale, Fla.-based Motus GI Holdings, Inc. is a medical
technology company, with subsidiaries in the U.S. and Israel,
providing endoscopy solutions that improve clinical outcomes and
enhance the cost-efficiency associated with the diagnosis and
management of gastrointestinal conditions.
Iselin, New Jersey-based EisnerAmper LLP, the Company's auditor
since 2018, issued a "going concern" qualification in its report
dated March 18, 2024, citing that the Company has generated minimal
revenues, experienced negative cash flows from operating activities
and has incurred substantial operating losses that raise
substantial doubt about its ability to continue as a going concern.
MOZART CAFE: Seeks Chapter 11 Bankruptcy
----------------------------------------
Mozart Cafe Inc. filed Chapter 11 protection in the Eastern
District of New York. According to court documents, the Debtor
reports $1,206,500 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
August 19, 2024 at 3:00 p.m. in Room Telephonically on telephone
conference line: 1 (877) 953-2748. participant access code:
3415538#.
About Mozart Cafe Inc.
Mozart Cafe Inc., doing business as Illy Caffe, is a cozy coffee
shop in Brooklyn, NY that offers a variety of hot and cold
beverages, pastries, and light snacks.
Mozart Cafe Inc. sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D.N.Y. Case No. 24-43000) on July 19,
2024. In the petition filed by Ilgar Ashurov, as president, the
Debtor reports total assets of $502,181 and total liabilities of
$1,206,500.
The Honorable Bankruptcy Judge Elizabeth S. Stong oversees the
case.
The Debtor is represented by:
Alla Kachan, Esq.
LAW OFFICES OF ALLA KACHAN, P.C.
2799 Coney Island Avenue
Suite 202
Brooklyn, NY 11235
Tel: (718) 513-3145
Fax: (347) 342-3156
Email: alla@kachanlaw.com
MP PPH: Fine-Tunes Liquidating Plan
-----------------------------------
MP PPH LLC submitted a Third Revised Disclosure Statement in
connection with the Plan of Liquidation dated July 16, 2024.
The Debtor is anticipating a Sale of the Property free and clear of
all liens, claims, and encumbrances in accordance with the Bid
Procedures Motion filed with the Court on May 24, 2024. Clear
Investment Group, LLC has agreed to terms for the purchase and Sale
of the Property and has agreed to serve as the Stalking Horse
Bidder to facilitate a Sale of the Property through this bankruptcy
proceeding.
Upon the Sale of the Property, the Debtor will deliver payment to
the various claims secured by the Property, tenant cure costs
associated with assignment of their leases, and other costs
associated with sale of the Property. The remaining proceeds of
sale will be transferred to the Liquidating Trust for the payment
of unsecured claims and trust expenses. The Plan provides for
Retained Causes of Action belonging to the Estate to be transferred
to the Liquidating Trust so those litigation claims can be pursued
by the Liquidating Trustee for the benefit of all Creditors of the
Bankruptcy Estate, who will be paid from any litigation recoveries
in accordance with the priority scheme.
In addition, in exchange and contingent on consensual third party
releases being provided in the form set forth in Section X.C.1 of
the Plan, a Protected Party Contribution would be made from those
parties receiving releases with respect to any C.P.P.A./Housing
Claims. The Protected Party Contribution would ensure a minimum of
$500,000.00 be contributed and made available to pay holders of
C.P.P.A./Housing Claims and trust expenses. Further and distinct
from the consensual third party release and Protected Party
Contribution, the Plan contemplates a Channeling Injunction to
consolidate receipt and distribution of all recoveries obtained by
any party upon a CPPA/Housing Claim with respect to the Property
for fair and equitable distribution to the C.P.P.A./Housing Claim
Holders.
Through the Debtor's Plan, the Debtor is proposing to liquidate and
satisfy its debts through a sale of its Property and the creation
of a Liquidating Trust to receive, further liquidate as necessary,
and, distribute all Assets of the Debtor to the Allowed Claimants.
Regarding sale of the Property, the Debtor has executed a Purchase
and Sale Agreement with Clear Investment Group, LLC, which shall
serve as an entry level bid for sale of the Property upon which
higher and better bids for sale of the Property may be obtained in
an auction process whose terms are to be established through a
bidding process established though a separate Bidding Procedures
Motion filed by the Debtor.
With the establishment of the Liquidating Trust, the Plan proposes
the transfer to the Liquidating Trust of the Liquidating Trust
Assets, including, without limitation, all Cash, including the
remaining proceeds to be derived from sale of the Property
following successful closing and payment of associated closing
costs and Allowed Secured Claims, and the Debtor's Retained Causes
of Action. Distributions by the Liquidating Trust shall then be
made in accordance with the Plan and Liquidating Trust Agreement.
Like in the prior iteration of the Plan, each Holder of an Allowed
Class 4 General Unsecured Claim shall receive from the Liquidating
Trustee as provided for in the Liquidating Trust Agreement, in full
and complete settlement and satisfaction of the Debtor's and
Liquidating Trust's payment obligations under the Plan towards the
Allowed Class 4 Claim, such Holder's pro rata share of the portion
of the Liquidating Trust Assets remaining after payment of the
Unclassified Claims and Class 1-3 Allowed Claims.
Allowed Class 4 Creditors retain the right to share in all of the
Net Proceeds of the Liquidating Trust. However, it is anticipated
that the most immediate source of payment to Class 4 Creditors will
be from any remaining proceeds of the Sale of the Property.
Following the Sale of the Property contemplated by this Plan, the
Proceeds will be used to pay creditors in Classes 1-3. The
remaining proceeds will be paid to holders of Allowed Class 4 and
Allowed Class 5 Claims, with the payment to be made pro rata.
Holders of Class 4 Claims will not receive a distribution from the
Protected Party Contribution, if such contribution is made.
The Debtor believes that there are approximately 59 Claim holders
with approximately $5,373,035.19 in Class 4 Claims. As shown on the
Property Sale Pro Forma, the Debtor projects that approximately
$82,471.11 will be available for pro rata distribution to Allowed
Class 4 and Class 5 Claims from the Sale. Holders of Class 4 Claims
are impaired and are entitled to vote to accept or reject the
Plan.
Class 7 consists of Holders of Interests. All Interests shall be
extinguished as of the Effective Date, and owners thereof shall
receive no Distribution on account of such Interests.
The real estate broker Marty Zupancic of Marcus & Millichap Real
Estate Investment Services of North Carolina, Inc. as realtors
("Realtors") for the estate marketed the Property from October 4,
2023 through May 21, 2024 and received approximately 5 meaningful
offers. In conjunction with the Realtors, the Debtor narrowed the
offers and then selected a prospective buyer that would close
promptly and be a successful and responsible owner of the
Property.
A motion to approve bid procedures ("Bid Procedures Motion") was
filed with this Court on May 24, 2024. A copy of the resulting Sale
Agreement with Clear Investment was filed with the Bid Procedures
Motion. The proposed base sale price in the Sale Agreement is $58.8
million. The sale provides the tax savings pursuant to the transfer
tax exemption found in Section 1146(a) of the Bankruptcy Code,
which pursuant to the Sale Agreement inure to the benefit of the
Estate.
Upon the closing of the Sale of the Property, the proceeds of sale
will be used to pay Creditors pro rata in accordance with the
priority scheme established by the Bankruptcy Code. Classes 1–3
will be paid in full from the proceeds of sale or in accordance
with such treatment as Holders of those claims otherwise agree. The
funds remaining from the proceeds of sale after payment of
Creditors in Classes 1–3 will be provided to the Liquidating
Trustee and used to make payments to Creditors in Class 4 and Class
5.
A full-text copy of the Third Revised Disclosure Statement dated
July 16, 2024 is available at https://urlcurt.com/u?l=JPXF17 from
PacerMonitor.com at no charge.
MP PPH LLC is represented by:
Marc E. Albert, Esq.
Tracey M. Ohm, Esq.
Joshua W. Cox, Esq.
Ruiqiao Wen, Esq.
STINSON LLP
1775 Pennsylvania Ave., N.W., Suite 800
Washington, DC 20006
Tel: (202) 785-9100
Fax: (202) 572-9943
Email: marc.albert@stinson.com
Email: tracey.ohm@stinson.com
Email: joshua.cox@stinson.com
Email: ruiqiao.wen@stinson.com
About MP PPH LLC
MP PPH, LLC is a single asset real estate entity organized under
the laws of the state of Delaware.
The Debtor filed a Chapter 11 petition (Bankr. D.D.C. Case No.
23-00246) on Aug. 31, 2023, with $100 million to $500 million in
assets and $50 million to $100 million in liabilities. Michael A.
Abreu, vice president of operations, signed the petition.
Judge Elizabeth L. Gunn oversees the case.
The Debtor tapped Marc E. Albert, Esq., at Stinson LLP as
bankruptcy counsel; Lewis Brisbois Bisgaard & Smith, LLP and
NixonPeabody, LLP as special counsels; and Noble Realty Advisors,
LLC, as property manager.
NATIONSTAR MORTGAGE: Fitch Gives BB(EXP) to $500MM Unsec. Notes
---------------------------------------------------------------
Fitch Ratings expects to rate Nationstar Mortgage Holdings Inc.'s
(Nationstar Holdings) $500 million senior unsecured notes
'BB(EXP)'. Nationstar Holdings is a wholly owned subsidiary of Mr.
Cooper Group Inc. (Mr. Cooper). Proceeds from the issuance are
expected to be used to repay a portion of the amounts outstanding
under the company's mortgage servicing rights (MSR) facilities.
Key Rating Drivers
The unsecured debt is expected to rank pari passu with Nationstar
Holdings' existing senior unsecured debt, and therefore, the
expected rating is equalized with its outstanding senior unsecured
debt and its Long-term Issuer Default Rating (IDR). The
equalization reflects average recovery prospects under a stress
scenario given the availability of unencumbered assets. The ratings
of Nationstar Holdings are equalized with its parent, Mr. Cooper,
given it is wholly owned and its debt benefits from a corporate
guarantee from Mr. Cooper and Nationstar Mortgage LLC.
Fitch does not expect the debt issuance to have a meaningful impact
on the company's leverage profile as proceeds are expected to
refinance outstanding secured debt. Mr. Cooper's leverage,
calculated as debt to tangible equity, was 2.1x at 2Q24, compared
to 1.9x at YE23. Corporate leverage, which excludes balances under
origination funding facilities, was 1.8x at 2Q24, compared to 1.6x
at YE23.
Mr. Cooper Group's rating is supported by its strong franchise and
leading market position as a U.S. residential mortgage servicer,
conservative funding profile with low leverage and solid liquidity,
and experienced management team with extensive industry experience.
Additionally, Mr. Cooper's origination capabilities and mortgage
servicing right (MSR) hedging should provide relative earnings
stability through interest rate cycles, and its subservicing
business provides stable cash flows with minimal incremental
capital requirements.
The ratings are constrained by the highly cyclical nature of the
mortgage industry; a reliance on secured, short-term, wholesale
funding facilities; and potential servicing advance needs and
regulatory scrutiny from its exposure to Ginnie Mae (GNMA) loans.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- A sustained increase in gross leverage above 4.0x;
- A sustained increase in corporate leverage above 2.0x;
- A decrease in unsecured funding below 25% of total debt;
- Sustained profitability challenges that erode tangible equity;
- A reduction in or ineffectiveness of MSR hedging that introduces
substantial earnings volatility;
- An inability to maintain sufficient liquidity to manage future
servicer advances or margin calls; and/or
- Substantial regulatory fines or litigation expenses that
negatively impact the company's franchise or operating
performance.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Gross leverage maintained at-or-below 3.0x;
- A sustained reduction in corporate leverage below 1x;
- Extension of funding duration and increased committed funding
percentage while maintaining unsecured debt above 35% of total
debt;
- Continued consistency of operating performance with demonstrated
profitability through cycles; and/or;
- Maintenance of market position and leadership in mortgage
servicing.
DEBT AND OTHER INSTRUMENT RATINGS: KEY RATING DRIVERS
The unsecured debt is expected to rank pari passu with Nationstar
Holdings' existing senior unsecured debt, and therefore, the
expected rating is equalized with its outstanding senior unsecured
debt and its Long-term Issuer Default Rating (IDR). The
equalization reflects average recovery prospects under a stress
scenario given the availability of unencumbered assets.
DEBT AND OTHER INSTRUMENT RATINGS: RATING SENSITIVITIES
The unsecured debt rating is equalized with the long-term IDR and
is expected to move in tandem with it. However, a meaningful
increase in the proportion of secured funding or reduction of the
unencumbered asset pool could result in the unsecured debt rating
being notched down below the IDR.
SUBSIDIARY AND AFFILIATE RATINGS: KEY RATING DRIVERS
The ratings of Nationstar Mortgage Holdings Inc. (the debt-issuing
subsidiary) and Nationstar Mortgage LLC (the operating company) are
equalized with that of Mr. Cooper given they are wholly owned
subsidiaries and debt issued by Nationstar Mortgage Holdings Inc.
benefits from a corporate guarantee from Mr. Cooper and Nationstar
Mortgage LLC.
SUBSIDIARY AND AFFILIATE RATINGS: RATING SENSITIVITIES
The ratings of Nationstar Mortgage Holdings Inc. and Nationstar
Mortgage LLC are equalized with that of Mr. Cooper and are expected
to move in tandem with them.
ADJUSTMENTS
- The Standalone Credit Profile has been assigned in line with the
implied score.
- The Business Profile score has been assigned below the implied
score due to the following adjustment reason: Business model
(negative).
- The Asset Quality score has been assigned below the implied score
due to the following adjustment reason: Non-loan exposures
(negative).
- The Earnings & Profitability score has been assigned below the
implied score due to the following adjustment reasons: Earnings
stability (negative).
- The Capitalization & Leverage score has been assigned below the
implied score due to the following adjustment reasons: Risk profile
and business model (negative).
- The Funding, Liquidity & Coverage score has been assigned below
the implied score due to the following adjustment reason: Business
model/funding market convention (negative).
Date of Relevant Committee
November 1, 2023
Entity/Debt Rating
----------- ------
Nationstar Mortgage
Holdings Inc.
senior unsecured LT BB(EXP) Expected Rating
NEVADA COPPER: U.S. Trustee Contests $5.3 Mil. Bonus Plan
---------------------------------------------------------
Vince Sullivan of Law360 Bankruptcy Authority reports that the
Office of the U.S. Trustee objected late Monday, July 22, 2024, to
proposed bonus plans for employees of bankrupt mining company
Nevada Copper Inc., saying the plans don't include enough
information to determine if the bonuses are proper.
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.
NEW FORTRESS: S&P Downgrades ICR to 'B+', Outlook Stable
--------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on New Fortress
Energy Inc. (NFE) to 'B+' from 'BB-'. The outlook is stable.
S&P said, "We also lowered our rating on NFE's senior secured debt
to 'B+' from 'BB-'. The '3' recovery rating indicates our
expectation that lenders would receive meaningful (50%-70%; rounded
estimate: 60%) recovery in the event of a payment default.
"The stable outlook reflects our view that the company will
successfully refinance the 2025 notes within the upcoming month and
maintain leverage around 6x in 2024.
"Credit measures are weaker than our initial base case forecast.
NFE's adjusted credit measures are weaker than we expected
primarily due to lower cash flow related to the delay in the
commissioning of the FLNG1 (fast LNG) asset and the early
termination of the Federal Emergency Management Agency contract in
Puerto Rico. We also underestimated the amount of local currency
debt raised in Brazil for the company's various terminal projects
and power assets. As a result, we expect adjusted EBITDA to be
about $1.25 billion and S&P Global Ratings-adjusted debt to EBITDA
at year end to be about 6.2x compared with our previous forecast of
EBITDA in the $1.8 billion-$1.9 billion range and debt to EBITDA of
about 4.5x. We assume NFE will receive proceeds from a monetization
of its Brazilian assets; however, it will fund the remainder of the
cash flow shortfall with new asset-level debt. We expect leverage
to improve next year, with cash flow from power contracts ramping
up in Puerto Rico and at its terminals in Puerto Rico, Mexico, and
Nicaragua. We expect cash flow from its assets in Brazil to
increase starting in 2026."
NFE's liquidity could come under significant pressure unless the
company is able to refinance its 2025 notes by Sept. 16, 2024, or
refinance its 2026 notes within the next nine months. NFE's
revolving credit facility and term loan B have springing maturities
as early as July 16, 2025, if the company's 6.75% senior secured
notes ($875 million outstanding) are not fully refinanced by that
time or if the 6.5% senior secured notes ($1.5 billion) are not
refinanced by July 31, 2026. As of March 31, 2024, the revolver had
$750 million outstanding and the term loan B had about $772 million
drawn. Without a completed refinancing of the 2025 notes soon and
2026 notes within the next nine months, our assessment of liquidity
would be severely weakened and have significant implications for
the company's credit profile.
The stable outlook incorporates S&P's view that:
-- NFE will refinance the 2025 notes;
-- Increased cash flow ramps from its Fast LNG, Peurto Rico, and
Brazillian assets, which will partly fund its significant growth
initiatives in the markets it serves;
-- The financial risk profile will be highly leveraged for the
next 18-24 months;
-- The company is able to execute long-term contracts in the
terminals and power business and improve its counterparty credit
quality;
-- The company relies on assets sales to finance growth and repay
debt; and
-- The construction of FLNG2 has some execution risk.
S&P could take a negative rating action if:
-- NFE cannot refinance the 2025 notes through closing of an
issuance or execution of a satisfactory underwriting commitment by
Aug. 21.
-- The company cannot raise capital to repay the 2026 notes in the
first quarter of 2025, which would provide cushion until the
springing maturities are effective on the revolver and term loans.
-- S&P believes debt to EBITDA will remain above 6.5x in 2025.
-- S&P could take a positive rating action if the company
addresses its near-term refinancing risk and it expects debt to
EBITDA to be sustained below 5x.
This could occur if the company:
-- Adopts a more conservative financial policy that funds its
various growth initiatives with internally generated cash flow and
doesn't add substantial debt to its capital structure;
-- Generates free cash flow after capital spending.
S&P said, "Environmental factors are a negative consideration in
our credit rating analysis of NFE. The company operates LNG assets,
terminal facilities, and natural gas power plants globally. NFE has
a growing portfolio of LNG terminals and gas-generation assets
primarily in Puerto Rico, Brazil, the Caribbean, and Mexico, where
it seeks to displace heating oil with natural gas-fired generation
and meet the growing demand for power in the developing world.
While we view gas generation as having a place in the energy
transition, New Fortress remains vulnerable to changes in demand
patterns for new gas-fired generation and global regulation."
NEW HOME: S&P Alters Outlook to Positive, Affirms 'B-' ICR
----------------------------------------------------------
S&P Global Ratings revised its rating outlook on Irvine-based The
New Home Co. Inc. to positive from stable. S&P also affirmed all
ratings, including the 'B-' issuer credit rating on the company and
the issue-level ratings on its outstanding senior unsecured notes.
The positive outlook reflects the potential for an upgrade of the
company within the next 12 months if it maintains S&P's forecasted
year-over-year revenue, liquidity position, and EBITDA margins such
that debt-to-EBITDA declines to the 5x area.
S&P Global Ratings affirmed its 'B-' issue-level rating, with a '3'
recovery rating, on New Home's 9.25% senior unsecured notes due in
2029 after the announced $75 million add-on. S&P said, "The '3'
recovery rating indicates our expectation for meaningful (50%-70%;
rounded estimate: 50%) recovery in the event of a default. We
expect the company will use net proceeds, together with cash on
hand from the July equity contribution, to pay down the outstanding
balance on its revolving credit facility and pay related fees and
expenses. Any remaining proceeds shall be used for general
corporate purposes. We view the refinancing as necessary because it
enhances the company's financial flexibility. We assume that the
company will continue to use capital markets in the future to
achieve its projected growth and liquidity position as it scales in
its recently entered new markets."
S&P said, "We estimate the company will generate close to $780
million in revenue and about $66 million of EBITDA for 2024.This
implies leverage of about 6x debt to EBITDA for the fiscal year
ending September. We anticipate the company will achieve its growth
goals of last-12-months revenue of over $1 billion, absent any
unforeseen adverse market conditions. We project an improvement in
fiscal 2025 leverage, and size and scale of operations could lead
to an upgrade. We anticipate fiscal 2025 EBITDA of about $95
million-$100 million, slightly offset by higher debt levels, could
lead to leverage of 4.5x-5.5x. We attribute the outperformance to a
dearth of competition from existing home sale inventory, larger and
well-capitalized homebuilders offering financing and other
incentives to drive new home sales, and New Home's geographic
presence in a resilient West Coast market. We continue to expect
the company to fund growth initiatives with internally generated
cash flows and incremental debt.
"We expect low housing supply, resilient demand, and low
unemployment will support demand for finished homes over the next
12-24 months.The U.S. housing market remains significantly
undersupplied. In fact, homebuilders have gained a significant
share of home sales, reaching about 30% in the last year, compared
with just about 10% historically. While we expect the homebuilders'
share of home sales to normalize as mortgage rates decline and spur
a gradual recovery in resales, overall demand for housing should
also increase. Despite expectations for an interest rate cut in
late 2024, S&P Global economists expect rates to remain higher for
longer. We forecast the 30-year mortgage rate at 6.4% in the fourth
quarter of 2024, declining to an average of 5.6% in 2025.
"The positive outlook reflects the potential for an upgrade of the
company over the next 12 months if it continues to enhance
diversity in community counts and closings amid a resilient overall
housing market, as in our base case."
S&P would revise its outlook to stable if EBTIDA interest coverage
declined below 2x and liquidity became constrained. This could
occur if:
-- EBITDA were more than 10% below our 2024 forecast level, or
-- Debt levels rose by more than $100 million due to a
more-aggressive financial policy.
S&P could raise its rating on New Home if:
-- Its entry into new markets and expanded scale boosted its
revenue above $1 billion, and
-- It reduced its debt to EBITDA sustainably between 5x and 6x,
and S&P believed its financial sponsor were committed to
maintaining leverage at that level.
The New Home Co. Inc. designs, constructs, and sells homes across
California, Arizona, Colorado, Oregon, Washington, and Texas. In
the 12 months ended Sept. 30, 2023, the company closed 683 homes at
an average selling price of $783,000. In addition to selling its
own homes, the company also builds houses on a fee basis for third
parties.
-- U.S. GDP growth of 2.5% in 2024 and 1.7% in 2025.
-- Unemployment rate increase to 3.9% in 2024 and 4.2% by 2025.
-- Housing starts of 1.4 million in both 2024 and 2025.
-- Total revenue increase of approximately 30% in 2024, primarily
driven by continued growth in scale and stronger-than-anticipated
average selling prices.
-- Gross margin expected to be 21%-21.5% in fiscal 2024 and
20%-21% in fiscal 2025.
-- Selling, general, and administrative cost of 13%-14% of revenue
through 2025.
-- Adjusted EBITDA margins of 8%-9% over the next two years.
-- Annual working capital outflow between $160 million and $200
million in 2024 and 2025.
-- Minimal annual capital expenditure of about $1 million-$2
million over the next two years.
Based on these assumptions, S&P arrives at the following credit
measures over the next two years:
-- Debt to EBITDA remaining approximately 6x for 2024 and
4.5x-5.5x in 2025.
-- EBITDA covering interest of 2x-3x in 2024 and 2025.
-- Debt to capital of approximately 45%-55% in 2024 and 2025.
S&P continues to assess the company's liquidity as adequate based
on the following observation and estimates:
-- S&P expects its sources of liquidity will be more than 1.82x
its uses over the next 12 months,
-- S&P anticipates its net liquidity sources will remain positive
even if its EBITDA declines 30% over the next 12-24 months, and
-- The company has sufficient covenant headroom for the next 12
months and will not breach coverage tests even if its EBITDA falls
30%.
Principal liquidity sources:
-- Cash balance of $42.7 million as of June. 30, 2024;
-- Availability of $99 million under its $180 million revolving
credit facility due October 2027; and
-- Cash funds from operations of $40 million-$50 million over the
next 12 months.
Principal liquidity uses:
-- No major debt maturities over the next 12–18 months,
-- Net working capital requirements of $160 million-$200 million
annually over the next 12-24 months,
-- Capital expenditure requirements of $1 million-$2 million
annually, and
-- No dividend payments expected over the forecast period.
The company's revolving credit facility and senior unsecured notes
are subject to the following restrictive and financial covenants:
Restrictive covenants related to the senior notes:
-- Minimum fixed-charge coverage ratio of at least 2.0x,
-- Debt to tangible net worth not exceeding 3.0x.
Financial covenants related to the revolving credit facility:
-- Consolidated tangible net worth,
-- Net leverage ratio not exceeding 65%,
-- Minimum EBITDA interest coverage ratio of at least 1.5x, and
-- Minimum liquidity requirement of at least $10 million.
As of June 30, 2024, New Home was in compliance with its covenants,
and we expect it will remain compliant over the next 12 months.
S&P said, "We rate New Home's senior unsecured notes 'B-', the same
level as our issuer credit rating. The '3' recovery rating
indicates our expectation for meaningful (50%-70%; rounded
estimate: 50%) recovery to noteholders in the event of a default.
For homebuilders and land developers, we use a discrete asset value
approach to arrive at an estimate of debt repayment based on the
liquidation value of their land inventory and work-in-progress real
estate assets under an assumed default scenario.
We estimate a gross recovery value of $285.9 million, which assumes
a blended 50% discount to the assumed $574.6 million in book value
of inventory and a portion of the cash on its balance sheet. We
assume that the company's unsecured revolving credit facility is
85% drawn at default. The revolver and proposed senior notes rank
equally.
"Our simulated default scenario contemplates a payment default in
2027 due to a U.S. economic recession that adversely affects the
volume of new home sales as well as supply and demand fundamentals,
which would lead to a material EBITDA decline for U.S.
homebuilders. Another deep recession brings volume and average
selling prices back to trough levels by 2027, at which point the
company's liquidity is constrained and it is unable to meet its
fixed-charge and interest obligations."
-- Year of default: 2027
-- Gross recovery value: $285.9 million
-- Net recovery value (after 5% property-level and administrative
costs): $271.6 million
-- Total unsecured senior claims: $537.7 million
--Recovery expectations: 50%-70% (rounded estimate: 50%)
Note: All debt amounts include an assumed six months of accrued but
unpaid interest.
NEXTDECADE CORP: HGC Next Inv, 6 Others Disclose Stakes
-------------------------------------------------------
HGC Next Inv LLC disclosed in a Schedule 13D/A Report filed with
the U.S. Securities and Exchange Commission that as of July 29,
2024, the firm and the Hanwha entities -- Hanwha Impact Partners
Inc., Hanwha Impact Global Corporation, Hanwha Aerospace Co., Ltd,
Hanwha Ocean USA International LLC, Hanwha Ocean USA Holdings
Corp., Hanwha Ocean Co., Ltd. -- beneficially owned shares of
NextDecade Corporation's common stock.
HGC Next Inv LLC, Hanwha Impact Partners, and Hanwha Impact Global
are reported to beneficially own 23,410,842 shares, representing
9.1% based on 257,994,156 shares of Common Stock issued and
outstanding as of May 3, 2024 as set forth in the NextDecade's
Amendment No. 1 to its most recent Quarterly Report on Form 10-Q/A,
as filed with the Securities and Exchange Commission on May 13,
2024. Meanwhile, Hanwha Aerospace, Hanwha Ocean USA International,
Hanwha Ocean USA Holdings, and Hanwha Ocean Co. beneficially own
17,536,368 shares, representing 6.8% of the shares issued and
outstanding as of May 3.
A full-text copy of HGC Next's SEC Report is available at:
https://tinyurl.com/mu57emme
About NextDecade Corporation
NextDecade Corporation, a Delaware corporation, is a Houston-based
energy company primarily engaged in construction and development
activities related to the liquefaction of natural gas and sale of
LNG, and the capture and storage of CO2 emissions. The Company is
constructing and developing a natural gas liquefaction and export
facility located in the Rio Grande Valley in Brownsville, Texas,
which currently has three liquefaction trains and related
infrastructure under construction.
NextDecade reported a consolidated net loss of $182.7 million for
the year ended December 31, 2023, compared to a net loss of $84.4
million for the same period in 2022. As of March 31, 2024, the
Company had $4.17 million in total assets, $3.04 million in total
liabilities, and $1.13 million in total equity.
Houston, Texas-based Grant Thornton LLP, the Company's auditor
since 2018, issued a "going concern" qualification in its report
dated March 11, 2024, citing that the Company has incurred
operating losses since its inception and management expects
operating losses and negative cash flows to continue for the
foreseeable future. These conditions, along with other matters,
raise substantial doubt about the Company's ability to continue as
a going concern.
NUZEE INC: Issues US$300,000 Convertible Notes to Investors
-----------------------------------------------------------
NuZee, Inc., disclosed in a Form 8-K filed with the Securities and
Exchange Commission that on July 24, 2024, it entered into a
convertible note purchase agreement with certain investors to issue
and sell convertible notes in the aggregate principal amount of RMB
2,181,000 or approximately US$300,000. The closing of the private
placement occurred on July 26, 2024.
The Notes bear interest at an annual rate of 7% and have a maturity
date of one year following the issuance date. The Notes are
convertible any time after the issuance date by the holder into a
number of shares of Common Stock equal to (i) the outstanding
principal amount of the Note plus any accrued but unpaid interest,
divided by (ii) $0.52, the conversion price. If any such
conversion of the Notes would result in the issuance of a fraction
of a share, such number of shares to be issued will be rounded down
to the nearest whole share.
About NuZee
NuZee, Inc. (d/b/a Coffee Blenders) is a co-packing company for
single serve coffee formats, as well as a co-packer of coffee brew
bags, which is also referred to as tea-bag style coffee. In
addition to its single serve pour over and coffee brew bag coffee
products, the Company has expanded its product portfolio to offer a
third type of single serve coffee format, DRIPKIT pour over
products, as a result of its acquisition of substantially all of
the assets of Dripkit, Inc.
Houston, Texas-based MaloneBailey, LLP, the Company's auditor since
2013, issued a "going concern" qualification in its report dated
Jan. 16, 2024, citing that the Company has suffered recurring
losses and negative cash flows from operations that raises
substantial doubt about its ability to continue as a going concern.
OFFICE PROPERTIES: Reports $76.2 Million Net Income in Fiscal Q2
----------------------------------------------------------------
Office Properties Income Trust filed with the Securities and
Exchange Commission its Quarterly Report on Form 10-Q disclosing a
net income of $76.2 million for the three months ended June 30,
2024, compared to a net loss of $12.2 million for the three months
ended June 30, 2023.
For the six months ended June 30, 2024, the Company reported a net
income of $71 million, compared to a net loss of $12.7 million for
the same period in 2023.
As of June 30, 2024, the Company had $3.8 billion in total assets,
$2.5 billion in total liabilities, and $1.3 billion in total
shareholders' equity.
A full-text copy of the Company's Form 10-Q is available at:
https://tinyurl.com/6jf6jt5n
About Office Properties
Office Properties Income Trust is a REIT organized under Maryland
law. As of Dec. 31, 2023, its wholly owned properties were
comprised of 152 properties, and it had noncontrolling ownership
interests of 51% and 50% in two unconsolidated joint ventures that
owned three properties containing approximately 468,000 rentable
square feet. As of Dec. 31, 2023, the Company's properties are
located in 30 states and the District of Columbia and contain
approximately 20,541,000 rentable square feet. As of Dec. 31, 2023,
its properties were leased to 258 different tenants, with a
weighted average remaining lease term (based on annualized rental
income) of approximately 6.4 years. The U.S. government is its
largest tenant, representing approximately 19.5% of its annualized
rental income as of Dec. 31, 2023.
As of March 31, 2024, the Company had $4 billion in total assets,
$2.7 billion in total liabilities, and $1.3 billion in total
stockholders' equity.
* * *
In May 2024, OPI announced it was actively negotiating with its
existing debtholders to exchange four series of its currently
outstanding senior unsecured notes (worth $1.7 billion at face
value) for up to $610 million of new senior secured notes and
related guarantees, with priority given to the 2025 noteholders
($650 million outstanding). The exchange would result in
debtholders receiving below the par value of the existing notes.
In July 2024, S&P Global Ratings raised its issuer credit rating on
Office Properties Income Trust (OPI) to 'CCC-' from 'SD' (selective
default) and its issue-level ratings on the senior unsecured notes
that were part of the exchange to 'CCC-' from 'D'. S&P said, "We
lowered our issue-level rating on the company's March 2029 senior
secured notes to 'CCC+' from 'B-', with the recovery rating
remaining '1'. We also lowered the issue-level rating on the
company's 2050 senior unsecured notes, which were not part of the
debt exchange, to 'CCC-' from 'CCC'. The recovery rating on all the
unsecured notes is unchanged at '3'. We also assigned our 'CCC' and
'2' recovery rating to the company's new September 2029 senior
secured notes."
S&P Global Ratings lowered its issuer credit rating on OPI to 'CC'
from 'CCC' and its issue-level ratings on its senior unsecured
notes due 2025, 2026, 2027, and 2031, which are part of the
proposed exchange, to 'CC' from 'CCC'. At the same time, S&P
affirmed its 'CCC' issue-level rating on the company's senior
unsecured notes due 2050, which are not part of the proposed
exchange, and its 'B-' issue-level rating on its existing secured
notes due 2029. Its '3' recovery rating on all the unsecured notes
and '1' recovery rating on the secured notes are unchanged.
In June 2024, S&P Global Ratings lowered its issuer credit rating
on Office Properties Income Trust (OPI) to 'SD' (selective default)
and its issue-level rating on the company's 2025, 2026, 2027, and
2031 senior unsecured notes to 'D'. S&P said, "We view the debt
exchange as distressed and tantamount to a default. The downgrade
follows OPI's completion of its private debt exchange. In
aggregate, the company exchanged $865.2 million of its 2025, 2026,
2027, and 2031 senior unsecured notes for $567.4 million of new
senior secured notes due 2029. The exchange consideration varied
depending on which notes were exchanged, with longer-dated notes
receiving less consideration. In addition, certain noteholders
received common equity to incentivize the exchange. In our view,
this transaction is a distressed exchange and tantamount to a
default because lenders received less than the original promise of
the securities, which is not offset by adequate compensation."
OPTICSLAH LLC: Voluntary Chapter 11 Case Summary
------------------------------------------------
Debtor: OPTICSLAH, LLC
3250 South Dodge Blvd Suite 7
Tucson, AZ 85713
Chapter 11 Petition Date: August 1, 2024
Court: United States Bankruptcy Court
District of Arizona
Case No.: 24-06327
Debtor's Counsel: Charles R. Hyde, Esq.
THE LAW OFFICES OF C.R. HYDE, PLC
2810 North Swan Road Suite 150
Tucson, AZ 85712
Tel: 520-270-1110
Email: crhyde@oldpueblobankruptcy.com
Estimated Assets: $0 to $50,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Jeremy Yeak, manager - sole member.
The Debtor failed to include in the petition a list of its 20
largest unsecured creditors.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/AB5I3QI/OPTICSLAH_LLC__azbke-24-06327__0001.0.pdf?mcid=tGE4TAMA
ORCHARD PARK EQUITY: Files for Chapter 11 Bankruptcy
----------------------------------------------------
Orchard Park Equity Associates LLC filed Chapter 11 protection in
the Western District of New York. 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 not be available
to unsecured creditors.
A meeting of creditors under 11 U.S.C. Section 341(a) is slated for
August 20, 2024 at 2:00 p.m. in Room Telephonically on telephone
conference line: 866-527-0448. participant access code: 9516322#.
About Orchard Park Equity Associates
Orchard Park Equity Associates LLC owns the Sheffer Farms Townhomes
located in Orchard Park, New York.
Orchard Park Equity Associates sought relief under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. W.D.N.Y. Case No. 24-10772) on
July 17, 2024. In the petition filed by Edward E. Lewis, as
managing member, the Debtor reports estimated assets and
liabilities between $1 million and $10 million each.
The Honorable Bankruptcy Judge Carl L. Bucki oversees the case.
The Debtor is represented by:
Samuel L. Yellen, Esq.
SAMUEL L. YELLEN, ATTORNEY AT LAW, PLLC
1 Seneca St., 29th Fl. M-2
Buffalo, NY 14203
Tel: (716) 304-2820
Email: sam@yellenlegal.com
PARK 28 PARTNERS: Files for Chapter 11 Bankruptcy
-------------------------------------------------
Park 28 Partners LLC filed Chapter 11 protection in the District of
New Jersey. 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
August 15, 2024 at 11:00 a.m. in Room Telephonically.
About Park 28 Partners LLC
Park 28 Partners LLC sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D.N.J. Case No. 24-17234) on July 19, 2024.
In the petition filed by David Goldwasser, as VP restructuring, the
Debtor reports estimated assets and liabilities between $1 million
and $10 million each.
The Debtor is represented by:
Eric H. Horn, Esq.
A.Y. STRAUSS LLC
290 West Mount Pleasant Avenue
Suite 3260
Livingston, NJ 07039
Tel: 973-287-5006
Email: ehorn@aystrauss.com
PEGASO ENERGY SERVICES: Hits Chapter 11 Bankruptcy in Texas
-----------------------------------------------------------
On July 15, 2024, Pegaso Energy Services LLC filed Chapter 11
protection in the Northern District of Texas. According to court
filing, the Debtor reports between $10 million and $50 million in
debt owed to 1,000 and 5,000 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
August 22, 2024 at 2:00 p.m. in Room Telephonically.
About Pegaso Energy Services LLC
Pegaso Energy Services LLC is an oil field equipment supplier in
Texas.
Pegaso Energy Services LLC sought relief under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. N.D. Tex. Case No. 24-42429) on July
15, 2024. In the petition filed by John Cole Stout, Manager of IFTK
Holdings, LLC, the Debtor's Manager, the Debtor reports estimated
assets between $1 million and $10 million and estimated liabilities
between $10 million and $50 million.
Honorable Bankruptcy Judge Mark X. Mullin handles the case.
The Debtor is represented by:
Julian P. Vasek, Esq.
MUNSCH HARDT KOPF & HARR, P.C.
500 N. Akard St., Ste. 4000
Dallas, TX 75201
Tel: 214-855-7500
Email: jvasek@munsch.com
PERMIAN RESOURCES: Moody's Rates New Senior Unsecured Notes 'Ba3'
-----------------------------------------------------------------
Moody's Ratings assigned a Ba3 rating to Permian Resources
Operating, LLC's (Permian Resources) proposed backed senior
unsecured notes. Proceeds from the new notes issuance will be used
to fund a portion of the purchase of certain oil and gas assets
from Occidental Petroleum Corporation (OXY, Baa3 stable), refinance
the company's 7.75% notes due 2026, repay borrowings under its
revolving credit facility and for general corporate purposes.
Permian Resources' existing ratings are unchanged, including the
Ba2 Corporate Family Rating and Ba3 ratings on its existing backed
senior unsecured notes. The rating outlook is positive.
"Permian Resources' proposed notes issuance will improve the
company's liquidity by addressing its next maturity of notes and
increasing the availability under its revolving credit facility,"
stated Thomas Le Guay, Moody's Ratings Vice President. "The asset
acquisition from OXY will marginally increase the company's
leverage metrics but will remain within the company's stated
financial policies on a pro forma basis."
RATINGS RATIONALE
The proposed senior unsecured notes are rated Ba3, the same as
Permian Resources' other senior unsecured notes, and will rank pari
passu with the existing notes. The notes are rated one notch below
its Ba2 CFR because of their contractual subordination to the
company's senior secured revolving credit facility. Permian
Resources will use the proceeds from the notes to fund a portion of
the OXY assets acquisition, repay $300 million of notes outstanding
that are due in 2026, reduce borrowings under its revolving credit
facility, and for general corporate purposes.
Permian Resources' CFR reflects its large production scale and
high-quality acreage in the Delaware and Midland basins. It also
benefits from the company's continued commitment to prudent
financial policies and free cash flow generation. Permian Resources
increased its scale in the Permian basin and improved credit
metrics as a result of its merger with Earthstone Energy Holdings,
LLC (Earthstone) in November 2023, with production expected to
average around 320 thousands of barrels of oil equivalent per day
(Mboe/d) in 2024.
The CFR is constrained by Permian Resources' still relatively
limited track record of operating at its current scale after
growing rapidly through successive large mergers. The company has
pivoted towards a strategy of more measured organic growth
supplemented with potential bolt-on acquisitions, and is in the
process of building an operational track record and needs to
demonstrate consistent organic production growth and reserves
replacement at lower finding and development (F&D) costs that are
more competitive with its Permian-focused peers.
The positive outlook reflects Permian Resources' large free cash
flow generation, debt reduction plans, and the potential to drive
down its F&D costs and overall cost structure as it captures
efficiencies from its increase scale.
Permian Resources maintains a very good liquidity position,
reflected in its SGL-1 Speculative Grade Liquidity Rating. The
liquidity position is supported by its free cash flow generation
and a $2.5 billion committed senior secured revolving facility
($4.0 billion borrowing base) maturing in February 2027, of which
close to $2.1 billion was available as of March 31, 2024, pro forma
for a $356 million senior notes redemption of the company's 2027
notes. The facility has two financial covenants, including a
maximum debt/EBITDAX of 3.5x and minimum current ratio of 1.0x.
Moody's expect the company to remain well in compliance with its
financial covenants through 2025.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
Permian Resources' Ba2 CFR could be upgraded if the company
continues to demonstrate a track record of organic production
growth and reserves replacement under its enlarged asset base at
competitive F&D costs and returns on investment, all while
maintaining its strong financial profile. To support an upgrade,
the company should maintain a leveraged full cycle ratio (LCFR)
above 2x and RCF to debt over 50%. The ratings may be downgraded if
there is a substantial increase in leverage to fund acquisitions or
shareholder returns or if the company experiences a meaningful
decline in production. A downgrade could occur if RCF to debt falls
below 30% or LFCR falls towards 1.0x.
Permian Resources Operating, LLC is an independent oil and gas
exploration and production company in the Permian basin, operating
across West Texas and New Mexico. The company owns more than
400,000 net acres with production averaging around 320 Mboe/d since
its merger with Earthstone in November 2023. Permian Resources'
parent company, Permian Resources Corporation is publicly-listed. A
consortium of financial sponsors that includes Pearl Energy
Investments, EnCap Investments, and Riverstone Investment Group LLC
owns a combined 16% of the company.
The principal methodology used in this rating was Independent
Exploration and Production published in December 2022.
PIONEER HEALTH: Wants Additional Chapter 11 Financing to Fund Sale
------------------------------------------------------------------
Ben Zigterman of Law360 reports that orthopedic clinic operator
Pioneer Health Systems LLC is hoping to cobble together additional
debtor-in-possession financing to fund a Chapter 11 sale process,
its attorney told a Delaware bankruptcy judge Thursday, July 25,
2024.
About Pioneer Health Systems
Pioneer Health Systems, LLC, is the parent company for the
following brands: Surgical Hospital of Oklahoma, L.L.C. (SHO),
Direct Orthopedic Care (DOC), and Integrated Care Technologies
(ICT). Combined, this model allows Pioneer to offer a complete
vertical orthopedic healthcare system.
The Debtor filed a Chapter 11 petition (Bankr. D. Del. Case No.
24-10279) on Feb. 21, 2024, with $1 million to $10 million in both
assets and liabilities. Colin Chenault, chief financial officer,
signed the petition.
Judge J. Kate Stickles oversees the case.
Alessandra Glorioso, Esq., at Dorsey & Whitney (Delaware), LLP, is
the Debtor's legal counsel.
PLAY DAY CAFE: Starts Subchapter V Bankruptcy Protection
--------------------------------------------------------
On July 16, 2024, Play Day Cafe LLC filed Chapter 11 protection in
the Northern District of Ohio. According to court documents, the
Debtor reports $1,145,222 in debt owed to 1 and 49 creditors. The
petition states funds will be available to unsecured creditors.
About Play Day Cafe LLC
Play Day Cafe LLC is a privately held company that owns and
operates a recreational facility featuring a mega-sized playground,
a cafe with healthy eating choices and party rooms to host birthday
parties and other group events.
Play Day Cafe LLC sought relief under Subchapter V of Chapter 11 of
the U.S. Bankruptcy Code (Bankr. N.D. Ohio Case No. 24-51063) on
July 16, 2024. In the petition signed by Barbara A. Riles, as
member, the Debtor reports total assets of $50,225 and total
liabilities of $1,145,222.
Honorable Bankruptcy Judge Alan M. Koschik oversees the case.
The Debtor is represented by:
Steven J. Heimberger, Esq.
RODERICK LINTON BELFANCE LLP
50 South Main Street, 10th Floor
Akron, OH 44308
Tel: 330-434-3000
Fax: 330-434-9220
Email: sheimberger@rlbllp.com
POSEIDON CHARTERS: Commences Subchapter V Bankruptcy Process
------------------------------------------------------------
Poseidon Charters Inc. filed Chapter 11 protection in the Southern
District of Florida. 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
August 15, 2022 at 8:30 a.m. in Room Telephonically.
About Poseidon Charters Inc.
Poseidon Charters Inc. is a fully licensed & bonded travel agency.
Poseidon Charters Inc. sought relief under Suchapter V of Chapter
11 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. Case No. 24-17002)
on July 12, 2024. In the petition filed by Warren B. Pettegrow, as
president, the Debtor reports estimated assets between $100,000 and
$500,000 and estimated liabilities between $1 million and $10
million.
The Debtor is represented by:
Bradley S. Shraiberg, Esq.
SHRAIBERG PAGE PA
2385 NW Executive Center Dr
Suite 300
Boca Raton, FL 33431
Tel: 561-443-0800
E-mail: bss@slp.law
PREMIER LANDSCAPING: Unsecureds Will Get 52.8% of Claims in Plan
----------------------------------------------------------------
Premier Landscaping Contractors, LLC filed with the U.S. Bankruptcy
Court for the District of Colorado a Plan of Reorganization under
Subchapter V dated July 15, 2024.
The Debtor is a Colorado limited liability company which owns and
operates a landscaping company. The landscaping company exclusively
provides commercial and not residential services.
As a landscaping business, Debtor has a slow season over the winter
months. During that time, the volume of jobs decreases. Between
late 2023 and early 2024, Debtor's slow season was compounded by
struggles getting paid on jobs it did complete. The biggest hit was
from Taylor Kohrs which has an unpaid receivable in excess of
$200,000.00. The Debtor has placed a mechanic's lien on the
project, but the lack of payment on that job starved the Debtor for
cash.
Compounding this issue was collection efforts on a default judgment
that entered in favor of Mark Young Construction ("MYC"). MYC sent
out writs of garnishment on the judgment that the Debtor needed to
stay in order to continue operations, leading to this bankruptcy
filing.
Class 5 consists of those unsecured creditors of the Debtor who
hold Allowed Claims. Class 5 shall receive payments annually. The
payments will be made on or before the 15th of July each year,
beginning in 2025. For the first four years, the payment will be
calculated by taking the ending balance in the Debtor's bank
account on June 30 of each year and distributing half of those
funds to creditors in Class 5 pro rata.
At the end of the June in the 5th year of the Plan, the payment
will be calculated by taking the amount in bank at the end of that
month and distributing all but $50,000.00 to creditors, pro rata.
Further, in the event the Debtor prevails in its litigation against
Taylor Kohrs, it will distribute one-half of the net proceeds of
that litigation (recovery amount less fees and costs associated
with bringing the litigation) to Class 5 pro rata.
Based on the Debtor's projections, Class 5 Creditors are estimated
to receive 52.8% on account of their claims prior to accounting for
the Taylor Kohrs claim. Upon request by any party in interest, the
Debtor shall provide financial statements, including amounts
disbursed to creditors in accordance with the Plan.
Class 6 includes the interests in Debtor held by the its pre
confirmation shareholders. Class 6 is not impaired by this Plan. On
the Effective Date of the Plan, Class 6 Interest Holders shall
retain their interests in Debtor which they owned prior to the
Petition Date.
The Debtor projects to pay unsecured creditors 52.8% over the
course of 5-years. As evidenced by the projections, Debtor
anticipates that its income will be positive each year of the Plan,
and will generate sufficient revenue to meet its obligations under
the Plan. The Debtor has used its best efforts to prepare accurate
projections. The Debtor's actual income will fluctuate based on
actual revenue and changes in the market and payments to creditors
will be based on actual performance rather than projected.
A full-text copy of the Plan of Reorganization dated July 15, 2024
is available at https://urlcurt.com/u?l=KLlp7A from
PacerMonitor.com at no charge.
Attorneys for the Debtor:
Jonathan M. Dickey, Esq.
Kutner Brinen Dickey Riley, PC
1660 Lincoln Street, Suite 1720
Denver, CO 80264
Telephone: (303) 832-2400
Email: jmd@kutnerlaw.com
About Premier Landscaping Contractors
Premier Landscaping Contractors, LLC, is a Colorado limited
liability company which owns and operates a landscaping company.
The Debtor filed a Chapter 11 bankruptcy petition (Bankr. D. Colo.
Case No. 24-11884) on April 16, 2024, listing under $1 million in
both assets and liabilities.
Judge Thomas B. McNamara oversees the case.
Jonathan M. Dickey, Esq., at Kutner Brinen Dickey Riley, PC serves
as the Debtor's counsel.
PRINCE FASHIONS: Loses Bid to Recharacterize Terminated Lease
-------------------------------------------------------------
The Honorable Lisa G. Beckerman of the United States Bankruptcy
Court for the Southern District of New York ruled on cross-motions
for summary judgment filed by the parties in the adversary
proceeding captioned as PRINCE FASHIONS, INC., Plaintiff, v. 60G
542 BROADWAY OWNER, LLC, and 542 HOLDING CORP., Defendants, Adv.
Proc. No. 19-08714 (LGB) (Bankr. S.D.N.Y.).
The Court denies the Plaintiff's Motion and grants the Defendants'
Motions.
The Debtor seeks to have the Court recharacterize a terminated
lease of nonresidential real property under section 105 of the
Bankruptcy Code, which lease was terminated prior to Prince filing
for bankruptcy, and award Prince monetary damages.
The Plaintiff is a corporation duly organized under the laws of New
York state. Defendant 60G 542 Broadway Owner, LLC is a limited
liability company, authorized to conduct business in New York
state. Defendant 542 Holding Corp. and with Defendant 60G, is a
cooperative housing corporation organized under the laws of New
York state.
From 1980 to 2020, the Plaintiff occupied the ground floor
commercial space and portions of the basement of a six-story
building located at 542 Broadway, New York, New York 10012 pursuant
to the terms of the Lease. The Premises are the subject of this
litigation.
The Premises and the Lease have been subject to state court
litigation for years. When Defendant 60G acquired the Premises and
assumed the Lease, it also assumed Defendant 542 Holding's
liability in the ongoing state court litigation.
The litigation relevant to this Adversary Proceeding began in 2016
when Prince failed to maintain general liability insurance in favor
of its landlord, Defendant 60G, as required by the Lease.
On March 4, 2016, Defendant 60G served a Notice of Default on
Prince, declaring Prince in default of the Lease. On July 1, 2016,
Defendant 60G served a Notice of Lease Cancellation, which
effectively terminated the Lease on July 5, 2016.
The Plaintiff filed a petition for relief under Chapter 11 of the
United States Bankruptcy Code in this Court on May 29, 2019. On its
Amended Schedule G, the Plaintiff listed an unexpired lease of the
Premises to which Defendant 60G and Defendant 542 Holding were
listed as counterparties. In December 2019, the Court entered an
order modifying the automatic stay, which permitted Defendant 60G
to commence an eviction proceeding against Prince. On January 10,
2020, Prince was evicted from the Premises and Defendant 60G was
awarded legal possession of the Premises by the New York City
Marshal.
In the meantime, on November 22, 2019, the Plaintiff commenced this
Adversary Proceeding by filing its Complaint for Declaratory
Relief. On January 17, 2020, Defendant 60G moved to dismiss the
Initial Complaint. On January 22, 2020, Defendant 542 Holding
filed its Answer to the Initial Complaint. On July 15, 2020, the
Court entered an Order on Defendant 60G's Motion to Dismiss the
Initial Complaint in which it granted the Plaintiff 45 days to file
a motion for leave to file an amended complaint.
On August 28, 2020, the Plaintiff filed its Motion for Leave to
Amend the Adversary Complaint, which the Court granted on October
29, 2020. On October 30, 2020, the Plaintiff filed its Amended
Complaint.
On December 10, 2020, Defendant 542 Holding filed its Amended
Answer to the Amended Complaint. On January 11, 2021, Defendant 60G
filed a Motion to Dismiss the Amended Complaint. On March 1, 2021,
Defendant 542 Holding filed a Motion to Dismiss the Amended
Complaint. On September 21, 2021, the Court denied the Defendants'
Motions to Dismiss. Thereafter, on October 4, 2021, Defendant 60G
filed its Answer to the Amended Complaint.
On March 11, 2024, the Plaintiff filed its Notice of Motion for
Summary Judgment. On the same date, Defendant 60G filed its Motion
for Summary Judgment.
On March 18, 2024, Defendant 542 Holding filed its Motion for
Summary Judgment. On May 15, 2024, the Court heard oral argument
on the three motions for summary judgment.
Judge Beckerman says the Court is mindful of Judge Robert Drain's
prior findings in the context of the Defendants' Motions to
Dismiss. Judge Drain held that the Initial Complaint should not be
dismissed under the Rooker-Feldman doctrine under Federal Rule of
Civil Procedure 12(b)(1). Judge Drain found that the basis for the
relief requested in the Initial Complaint, recharacterization of
the Lease, is based on federal law and could not have been decided
by the state court. Additionally, the Plaintiff in the Initial
Complaint did not complain of injuries caused by a state court
judgment. Judge Drain also denied dismissal of the Initial
Complaint on res judicata and collateral estoppel grounds. Judge
Drain held that the state courts' various decisions regarding
enforcement of the Lease and the eviction of the Debtor did not
previously address the recharacterization issue. Accordingly, the
Court does not revisit those issues in the context of the
cross-motions for summary judgment filed by the Plaintiff and the
Defendants.
The Court was unable to locate any precedent, whether in the Second
Circuit or elsewhere, wherein a lease was recharacterized as an
ownership interest under federal law when the lease had been
terminated prior to the debtor's bankruptcy filing under applicable
state law. The Court asked counsel for the Plaintiff about this at
the Hearing, to which Plaintiff's counsel acknowledged that he had
not found any such cases either.
The Court suspects that no other bankruptcy courts have been asked
post-petition to recharacterize a lease that had been terminated
pre-petition under applicable state law. This may have to do with
the nature of recharacterization and when such a claim is typically
raised in a bankruptcy proceeding, the Court notes. Most
recharacterization disputes involving a lease of nonresidential
real property, the type of lease at issue here, originate in the
context of section 365(d)(3) and/or section 365(d)(4). Under
section 365(d)(3), if a debtor does not perform its obligations
under the lease post-petition, then the debtor or the landlord may
seek relief from the bankruptcy court.
Alternatively, under section 365(d)(4), if the deadline to assume
or reject leases of nonresidential real property passes or is about
to pass, then a debtor or landlord may seek relief from the
bankruptcy court. In both instances, the issue of whether a lease
is a "true" lease is raised. Since the Lease was terminated
pre-petition as of July 5, 2016, the Lease is not "an unexpired
lease of nonresidential real property" nor was it one as of
commencement of the bankruptcy. Thus, both sections 365(d)(3) and
365(d)(4) are inapplicable to the Lease, the Court finds. This is
relevant to the Court because all of the case law that the Court
was able to locate regarding recharacterization of leases under
federal law involved a determination of whether a lease was a
"true" lease and thus, whether section 365(d)(3) and/or section
365(d)(4) applies to the lea se. The courts in such cases did not
rely solely on section 105 of the Bankruptcy Code as the basis for
granting relief, but instead applied section 365(d)(3) and/or
section 365(d)(4).
Judge Beckerman notes that the New York State Supreme Court ruled
that Prince's Lease default was incurable. This terminated the
Lease as of July 5, 2016. The Appellate Term Order found that 60G
"had valid grounds for terminating [the] commercial lease, based
upon [Prince's] incurable default in obtaining insurance naming the
landlord as an additional insured."
It is clear that bankruptcy courts cannot revive terminated leases.
Section 541(b)(2) excludes nonresidential real property leases
from being property of the estate if the lease has terminated at
the expiration of its stated term before commencement of the
bankruptcy proceeding; if a lease was terminated pre-petition, the
bankruptcy court has no authority over it. While the Plaintiff's
request in this is being made in a different context, this
precedent may preclude the Court from exercising its equitable
powers to recharacterize a terminated lease, the Court holds.
According to Judge Beckerman, even if its equitable powers under
section 105 permit this Court to grant the relief requested, the
Court questions whether it should do so. The precedent could
encourage commercial tenants whose leases were terminated
pre-petition and were subsequently evicted to file for bankruptcy
with the hope of successfully recharacterizing their terminated
leases and receiving monetary damages from their landlords, the
Court states.
The Court points out that, to grant the relief requested in the
Amended Complaint, the Debtor is asking the Court to find an
ownership interest under a lease agreement where all parties,
including the Debtor, acknowledge that Prince's right to possession
of the real property has been terminated. The Court is concerned
about how that would be possible since the Debtor is essentially
asking the Court to parse the Lease to remove the rights of
possession, as those were clearly terminated in the state court
process, but still find that Prince has an ownership interest in
the real property based on the language of the Lease.
Since a debtor may only assume or reject all of the terms of a
contract or lease and may not selectively choose among provisions
of the agreement, the Court questions whether it can parse a
terminated lease by removing the possessory rights and finding an
enforceable ownership interest without the right of possession, but
with the right of damages from its landlord or owner of record of
the real property.
For these reasons, the Court questions whether it has the authority
to recharacterize the Lease solely based upon its equitable powers
under section 105. And if it does have the authority to
recharacterize the Lease under its equitable powers, the Court
questions whether it should do so. Nevertheless, the Court will
apply the "economic substance test" under Second Circuit case law
to determine whether the Debtor has proven, by a preponderance of
the evidence, that the Lease is not a "true" lease and should be
recharacterized.
According to the Court, the recharacterization claim fails under
the "economic substance test." " This test requires "'look[ing] to
the economic realities of the lease and not to the labels applied
by the parties' to determine the true nature of the transaction."
A court must analyze whether "the parties intended to impose
obligations and confer rights significantly different from those
arising from the ordinary landlord/tenant relationship."
Under applicable case law, the Plaintiff carries a substantial
burden to recharacterize the Lease. The Court applies the PCH
factors to the Lease as follows:
i. Factor One: Whether the rental payments were calculated to
compensate the lessor for the use of the land, or rather were
structured for some other purpose, such as to ensure a particular
return on an investment
Pursuant to the Lease, the rental payments after the first year
were fixed at "19.99% of the net expenses of the building" each
month. The Plaintiff's position on this factor is inconsistent.
The Amended Complaint contends that "because of the 80/20 Rule, the
rent due under the Lease necessarily was capped at 19.99% of the
corporation's net operating expenses," and "[a]ccordingly, the
Lease was designed to satisfy the 80/20 Rule." Due to the lack of
evidentiary support, the Court is unable to determine the validity
of any of the Plaintiff's proposed reasons as to why the rent was
calculated as such. Accordingly, the Court finds that this factor
does not weigh in favor of the Plaintiff.
ii. Factor Two: Whether the purchase price was related to the
fair market value of the land, or whether it was calculated as the
amount necessary to finance the transaction
The Plaintiff suggests that "it is undisputed that the 'rent' under
the Lease is substantially below market." Because the record lacks
any evidence as to the fair market value of the Premises in 1980,
the Court finds that this factor does not weigh in favor of the
Plaintiff.
iii. Factor Three: Whether the property was purchased by the
lessor specifically for the lessee's use
There is no evidence as to this factor either. There is no
testimony from any of the parties involved in the sale-leaseback
transaction to indicate the intent behind the transaction. The
Plaintiff's unsupported statements preclude this factor from
weighing in its favor, the Court holds.
iv. Factor Four: Whether the transaction was structured as a
lease to secure certain tax advantages
There is no evidence put forth by either party indicating whether
the structure of the Lease was intended to provide tax advantages.
This factor does not weigh in favor of the Plaintiff, the Court
says.
v. Factor Five: Whether the lessee assumed many of the
obligations normally associated with outright ownership, including
the responsibility for paying property taxes and insurance
To the extent the Plaintiff was responsible for maintaining
insurance on the Premises, this factor may weigh marginally in
favor of the Plaintiff. However, the Court finds that the Plaintiff
did not assume "many" of the obligations typically associated with
ownership, including the payment of real estate taxes.
vi. Factor Six: Whether the lessee can acquire the property at
the expiration of the lease term for nominal consideration
The Lease does not contain a purchase option on behalf of the
lessee at the end of the lease term, the Court says. Even though
the length of the Lease is long -- initial term of 99 years plus
two 50-year renewal options -- there is no purchase option or
transfer of ownership rights to the lessee at the end of the lease
term. Absent a purchase option in the Lease or any documents
memorializing an actual transfer of the Premises to Prince, this
factor does not weigh in favor of the Plaintiff, the Court holds.
A copy of the Court's decision dated July 23, 2024, is available at
https://urlcurt.com/u?l=SokBdR
Attorneys for the Debtor:
Louis Fogel, Esq.
LOUIS FOGEL LAW
5 Nottingham Road
Annandale, NJ 08801
E-mail: LouisFogel@LouisFogelLaw.com
- and -
Sanford Rosen, Esq.
ROSEN PC
747 Third Avenue
New York, NY 10017
E-mail: srosen@rbgg.com
Attorneys for Defendant 60G 542 Broadway Owner, LLC:
Nolan Shanahan, Esq.
Joseph Barbieri, Esq.
COLE SCHOTZ P.C.
1325 Avenue of the Americas, 19th Floor
New York, NY 10036
E-mail: nshanahan@coleschotz.com
Attorneys for Defendant 542 Holding Corp.:
Emil Samman, Esq.
BOYD RICHARDS PARKER & COLONNELLI, P.L.
1500 Broadway, Suite 505
New York, NY 10036
About Prince Fashions
Prince Fashions, Inc. is a corporation established in 1974 under
the laws of New York. The company, as tenant, manages a parcel of
commercial real estate located at 542 Broadway, N.Y., pursuant to a
99-year lease with landlord 542 Holding Corp.
Prince Fashions sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. S.D.N.Y. Case No. 19-23079) on May 29,
2019, listing up to $50 million in assets and up to $1 million in
liabilities. Judge Robert D. Drain oversees the case.
Rosen & Associates, P.C. and Louis Fogel & Associates serve as the
Debtor's bankruptcy counsel and special litigation counsel,
respectively.
QUINTO LLC: Seeks Chapter 11 Bankruptcy Protection
--------------------------------------------------
Quinto LLC filed Chapter 11 protection in the Northern District of
Texas. 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
August 21, 2024 at 2:30 p.m. in Room Telephonically.
About Quinto LLC
Quinto LLC is a limited liability company.
Quinto LLC sought relief under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. N.D. Tex. Case No. 24-42492) on July 18, 2024. In the
petition filed by Mike Pruitt, as president, the Debtor reports
estimated assets between $100,000 and $500,000 and estimated
liabilities between $1 million and $10 million.
The Debtor is represented by:
Richard Grant, Esq.
CULHANE, PLLC
13101 Preston Road, Suite 110-1510
Dallas TX 75240
Tel: 214-210-2929
Email: rgrant@cm.law
RED LOBSTER: Gets Okay for Fortress Takeover Plan Creditor Vote
---------------------------------------------------------------
Steven Church of Bloomberg News reports that troubled seafood chain
Red Lobster won court permission to hold a creditor vote on a
bankruptcy-exit plan that would hand ownership to Fortress
Investment Group.
The judge overseeing company's Chapter 11 insolvency case said she
would approve an outline of a reorganization plan once Red Lobster
made a number of wording changes to the document.
Creditors can use the outline, known as a disclosure statement, to
decide how to vote.
Red Lobster accepted an offer from Fortress after no other
qualified bids came in.
About Red Lobster Seafood Co.
Red Lobster Management, LLC, owns and operates 705 Red Lobster
seafood restaurants throughout North America. Red Lobster generates
about $2.4 billion of annual revenue. Red Lobster is owned by
private equity firm Golden Gate Capital. On the Web:
http://www.redlobster.com/
Red Lobster Management and its affiliates sought Chapter 11
protection (Bankr. M.D. Fla. Lead Case NO. 24-02486) on May 19,
2024. As part of these filings, Red Lobster has entered into a
stalking horse purchase agreement pursuant to which Red Lobster
will sell its business to an entity formed and controlled by its
existing term lenders.
King & Spalding LLP is lead counsel to the Debtors; Berger
Singerman LLP serves as local counsel; and Blake, Cassel & Graydon,
LLC represents the Canadian applicants.
Alvarez & Marsal North America, LLC is serving as financial advisor
and providing corporate leadership as Chief Executive and Chief
Restructuring Officers. Jonathan Tibus, a Managing Director at
Alvarez & Marsal, serves as the debtors' CEO.
Hilco Corporate Finance is serving as M&A advisor to Red Lobster.
Keen-Summit is serving as real estate advisor.
RED LOBSTER: Moves Forward With Takeover Offer of Fortress
----------------------------------------------------------
Jonathan Randles of Bloomberg News reports that Red Lobster moves
ahead with Fortress takeover offer.
Fortress Investment Group is closer to acquiring Red Lobster after
the bankrupt seafood chain failed to net better offers for its
business.
Red Lobster said in a Monday, July 22, 2024, court filing that it
didn't receive any other qualified bids before a court-approved
deadline and would instead take an existing offer from Fortress.
The sale must be approved by a bankruptcy judge, though other Red
Lobster creditors have previously said they support the
transaction.
Red Lobster filed Chapter 11 in May 2024 after struggling for years
with costly leases and declining sales.
About Red Lobster
Red Lobster Management, LLC, owns and operates 705 Red Lobster
seafood restaurants throughout North America. Red Lobster generates
about $2.4 billion of annual revenue. Red Lobster is owned by
private equity firm Golden Gate Capital. On the Web:
http://www.redlobster.com/
Red Lobster Management and its affiliates sought Chapter 11
protection (Bankr. M.D. Fla. Lead Case NO. 24-02486) on May 19,
2024. As part of these filings, Red Lobster has entered into a
stalking horse purchase agreement pursuant to which Red Lobster
will sell its business to an entity formed and controlled by its
existing term lenders.
King & Spalding LLP is lead counsel to the Debtors; Berger
Singerman LLP serves as local counsel; and Blake, Cassel & Graydon,
LLC represents the Canadian applicants.
Alvarez & Marsal North America, LLC is serving as financial advisor
and providing corporate leadership as Chief Executive and Chief
Restructuring Officers. Jonathan Tibus, a Managing Director at
Alvarez & Marsal, serves as the debtors' CEO.
Hilco Corporate Finance is serving as M&A advisor to Red Lobster.
Keen-Summit is serving as real estate advisor.
RIOT PLATFORMS: Incurs $84.45 Million Net Loss in Second Quarter
----------------------------------------------------------------
Riot Platforms, Inc. filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing a net loss
of $84.45 million on $70.02 million of total revenue for the three
months ended June 30, 2024, compared to a net loss of $27.39
million on $76.74 million of total revenue for the three months
ended June 30, 2023.
For the six months ended June 30, 2024, the Company reported net
income of $127.33 million on $149.31 million of total revenue,
compared to a net loss of $8.87 million on $149.98 million of total
revenue for the same period in 2023.
As of June 30, 2024, the Company had $2.72 billion in total assets,
$139.07 million in total liabilities, and $2.58 billion in total
stockholders' equity.
As of June 30, 2024, the Company had net working capital of
approximately $646.5 million, which included cash and cash
equivalents of $481.2 million.
During the six months ended June 30, 2024, the Company sold 212
Bitcoin for proceeds of approximately $9.5 million. The Company
said it monitors its balance sheet on an ongoing basis and evaluate
the level of Bitcoin retained from monthly production in
consideration of its cash requirements for ongoing operations and
expansion.
Management Comments
"I am extremely pleased to present results for Riot's second
quarter 2024, during which we accomplished significant operational
growth and execution of our long-term strategy," said Jason Les,
CEO of Riot. "The second quarter saw the Bitcoin network 'halving'
in April of this year, a preprogrammed event whereby the Bitcoin
block subsidy received by miners from the network is cut in half
every four years. Despite this reduction in available production
for all Bitcoin miners, Riot posted $70.0 million in revenue for
the quarter and maintained strong gross margins in our core Bitcoin
mining business. Riot also generated $13.9 million in power
credits, inclusive of $4.4 million from participation in demand
response programs, during the quarter, reducing our average energy
cost and bringing our average direct cost to mine a Bitcoin to
$25,327.
"This quarter, Riot energized its second large-scale facility in
Corsicana, TX and in quick succession brought on two buildings
totaling 200 megawatts ("MW") in capacity. The remaining two
buildings representing the completion of the first 400 MW at our
Corsicana Facility are expected to be fully operational by the end
of 2024. We also expanded operations at our Rockdale Facility into
newly available capacity as we continued to deploy new hash rate at
both facilities. Riot nearly doubled installed hash rate during
the quarter, growing to a total capacity of 22 EH/s as of June 30,
2024.
"In July, Riot also expanded our growth pipeline and operational
expertise through the acquisition of Block Mining Inc. ("Block
Mining"), a vertically integrated Bitcoin miner in Kentucky. Block
Mining currently has 60 MW of power capacity across two facilities,
and through expansion opportunities available at these facilities
as well as a third, greenfield development site, there is the
potential to grow capacity to over 300 MW by the end of 2025.
Collectively, Riot now has a pipeline to achieve over 2 GW of
capacity and we will utilize our strong balance sheet and
experienced development teams to continue to build best in class
Bitcoin mining facilities."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/0001167419/000155837024010495/riot-20240630x10q.htm
About Riot Platforms
Headquartered in Castle Rock, Colorado, Riot Platforms Inc. --
www.riotplatforms.com -- is a Bitcoin mining and digital
infrastructure company focused on a vertically integrated strategy.
The Company has Bitcoin mining operations in central Texas and
Kentucky, and electrical switchgear engineering and fabrication
operations in Denver, Colorado.
Riot Platforms reported a net loss of $49.47 million in 2023, a net
loss of $509.55 million in 2022, a net loss of $15.44 million in
2021 (as restated), a net loss of $14.11 million in 2020 (as
restated), a net loss of $20.30 million in 2019, and a net loss of
$60.21 million in 2018.
RITE AID CORP: MedImpact Owes Addt'l $50M in Chapter 11 Sale
------------------------------------------------------------
Clara Geoghegan of Law360 reports that prescription benefits group
MedImpact owes an extra $50 million on top of $576 million it paid
Rite Aid for its former benefits division Elixir, a New Jersey
bankruptcy judge ruled Wednesday, July 24, 2024, saying his earlier
ruling on $200 million in disputed liabilities from the sale didn't
fundamentally disrupt a post-closing price adjustment.
About Rite Aid Corp.
Rite Aid -- http://www.riteaid.com-- is a full-service pharmacy
that improves health outcomes. Rite Aid is defining the modern
pharmacy by meeting customer needs with a wide range of vehicles
that offer convenience, including retail and delivery pharmacy, as
well as services offered through our wholly owned subsidiaries,
Elixir, Bartell Drugs and Health Dialog. Elixir, Rite Aid's
pharmacy benefits and services company, consists of accredited
mail and specialty pharmacies, prescription discount programs and
an industry leading adjudication platform to offer superior member
experience and cost savings. Health Dialog provides healthcare
coaching and disease management services via live online and phone
health services. Regional chain Bartell Drugs has supported the
health and wellness needs in the Seattle area for more than 130
years. Rite Aid employs more than 6,100 pharmacists and operates
more than 2,100 retail pharmacy locations across 17 states.
The Debtors sought protection under Chapter 11 of the 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.
ROBERT H. SICKLES: Court Enters Default Judgment v. Three Cos.
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Judge Robert Kirsch of the United States District Court for the
District of New Jersey granted the motion for default judgment
filed by Farmlind Produce, LLC and Four Seasons Produce, Inc.
against Sickles Market, LLC, Sickles Provisions, LLC, and Sickles
Management, Inc., companies owned by Robert Sickles, Jr.
Plaintiffs engaged in the business of selling wholesale perishable
agricultural commodities and are licensed as such under the
Perishable Agricultural Commodities Act. Plaintiffs filed this
action on March 18, 2024 to enforce a PACA trust against Mr.
Sickles as well as Sickles Market, Sickles Provisions, and Sickles
Management.
On March 25, 2024, Plaintiffs filed an Amended Complaint which
added TST Beverages, LLC d/b/a Bottles by Sickles, which was
engaged in operating a liquor store, and AHS Realty, LLC, the real
estate holding company that owned the land upon which Sickles
Market was located in Little Silver, New Jersey as well as an
adjacent farm. Mr. Sickles was a "principal, member, and/or
officer" of Sickles Market, Sickles Provisions, Sickles Management,
TST Beverages, and AHS Realty and occupied a position of control
over the PACA trust assets allegedly belonging to Plaintiffs.
Between October 2023 and March 2024, Plaintiffs "sold and delivered
to Sickles Market, in interstate commerce, $375,960.473 worth of
wholesale quantities of perishable agricultural commodities and
other goods . . . ." In addition, between November 2023 and January
2024, Plaintiffs "sold and delivered to Sickles Provisions, in
interstate commerce, $23,697.96 worth of Produce and other goods .
. . ."
Defendants received and accepted the Produce totaling the aggregate
amount of $398,945.94.
Thus, Plaintiffs became beneficiaries of a statutory trust under
PACA, "which is designed to assure payment to Produce suppliers and
which consists of all Produce and Produce-related assets, including
all funds commingled with funds from other sources and all assets
procured by such funds, in the possession or control of Sickles
Market and Sickles Provisions." Plaintiffs submitted invoices to
Defendants providing notice of intent to preserve PACA trust
benefits. In addition to the aggregate principal amount owed for
the Produce, the invoices also required Sickles Market and Sickles
Provisions to pay interest on unpaid balances at a rate of 1.5% per
month, plus all attorney's fees, as additional "sums owing in
connection with this transaction under the PACA trust." The
deadlines to pay for the Produce have long since expired, but
Sickles Market and Sickles Provisions have failed to pay the
principal debt that remains due and owing despite repeated demands
by Plaintiffs.
Plaintiffs allege that Mr. Sickles and Sickles Management are
jointly and severally liable with Sickles Market and Sickles
Provisions for their statutory, regulatory, and contractual
violations based on the invoices and under PACA. As for AHS
Realty, Plaintiffs contend that AHS Realty "received and retained
PACA trust assets from Sickles Market and/or Sickles Provisions in
violation of the PACA trust, thereby subjecting its assets to a
constructive trust under PACA for the benefit of Plaintiffs."
On April 24, 2024, Plaintiffs voluntarily dismissed TST Beverages
due to TST Beverages having filed a voluntary petition for relief
under Chapter 11 of the Bankruptcy Code in proceedings captioned as
In re TST Beverages, LLC, Case No. 24-14130, in the United States
Bankruptcy Court for the District of New Jersey. On May 10, 2024,
Plaintiffs filed a Suggestion of Bankruptcy, which represented
that, on May 9, 2024, AHS Realty and Mr. Sickles had also filed for
Chapter 11 bankruptcy in the following proceedings: In re AHS
Realty, LLC, Case No. 24-14779, and In re Robert H. Sickles, Case
No. 24-14781. Accordingly, Plaintiffs requested that this action be
stayed as to Defendants AHS Realty and Mr. Sickles.
Thus, the only remaining active Defendants in this case are Sickles
Market, Sickles Provisions, and Sickles Management -- each of which
were served with process on March 21, 2024, but none of which have
appeared in this action. The claims against these Defendants are
as follows: Count One - Failure to Pay Trust Funds under PACA;
Count Two - Failure to Pay Promptly under PACA; Count Three -
Breach of Contract - Failure to Pay for Goods Sold as to Sickles
Market and Sickles Provisions; Count Five - Affiliated Entity as to
Sickles Management; and Count Seven - Interest and Attorney's
Fees.
On May 10, 2024, Plaintiffs filed a Request for Entry of Default as
to the Sickles Corporate Defendants.
On May 21, 2024, the Court entered an Unopposed Order Entering a
Preliminary Injunction against the Sickles Corporate Defendants,
enjoining them or their "customers, agents, officers, subsidiaries,
attorneys, assigns, financial institutions, and factors from
alienating, dissipating, paying over or assigning any assets,
including without limitation any accounts receivable, of the
Sickles Corporate Defendants, and those of their subsidiaries or
related companies, except for payment to Plaintiffs, until further
order of this Court or until the Sickles Corporate Defendants pay
Plaintiffs the aggregate sum [due to Plaintiffs], and to order the
Sickles Corporate Defendants to turn over to Plaintiffs certain
funds, documents, and other materials in their possession, custody
or control. . . ."
On June 7, 2024, Plaintiffs filed the present Motion for Default
Judgment against the Sickles Corporate Defendants, which is now
pending before the Court.
The Court finds that Plaintiffs have sufficiently pled PACA claims
against the Sickles Corporate Defendants for failure to pay trust
funds and to make full payment promptly.
The Court also finds that Plaintiffs have set forth a legally
sufficient breach of contract claim against Sickles Market and
Sickles Provisions. Plaintiffs performed their obligations by
delivering the Produce, which was accepted by Sickles Market and
Sickles Provisions, and Sickles Market and Sickles Provisions
breached the contract by failing to pay for the amount due and
owing, the Court states.
The Court considers the three default judgment factors: "(1)
whether the party subject to default has a meritorious defense, (2)
the prejudice suffered by the party seeking default, and (3) the
culpability of the party subject to default."
First, in the absence of any responsive pleading, the Court's
review of the Complaint reveals no meritorious defense open to the
Sickles Corporate Defendants. In fact, the Sickles Corporate
Defendants have never disputed their PACA trust debts due and owing
to Plaintiffs, the Court notes.
Second, Plaintiffs have been prejudiced by the Sickles Corporate
Defendants' failure to appear, defend, or otherwise respond to the
Complaint in this case because Plaintiffs have no other means of
seeking relief from these Defendant, the Court says.
Finally, the Court finds the Sickles Corporate Defendants
responsible for their failure to appear in this litigation because
"there is nothing before the Court to show that [their] failure to
file an answer was not willfully negligent." ndeed, there appears
to be no question that the Sickles Corporate Defendants are aware
of this action, especially as the attorney for Mr. Sickles filed a
letter on the docket explaining the financial situation of the
Sickles family and their businesses and that they had been
cooperating with counsel for the PACA creditors. Accordingly, each
of the three default judgment factors counsels in favor of entering
default judgment against the Sickles Corporate Defendants, the
Court holds.
The Court finds that Plaintiffs have submitted sufficient evidence
to support their request, including the principal amount due and
owing as well as the interest and attorney's fees and costs. Based
on Plaintiffs' submissions, the Court finds that Plaintiffs have
adequately established damages in this case, including attorney's
fees and costs, which appear reasonable and proportionate.
A copy of the Court's decision dated July 23, 2024, is available at
https://urlcurt.com/u?l=qzC32T
Robert H. Sickles filed for Chapter 11 bankruptcy protection
(Bankr. D.N.J. Case No. 24-14781) on May 9, 2024, listing under $1
million in both assets and liabilities. The Debtor is represented
by Daniel Stolz, Esq.
ROBERTSHAW US: U.S. Trustee Wants Court to Deny Chapter 11 Plan
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Yun Park of Law360 Bankruptcy Authority reports that the U.S.
Trustee's Office has asked a Texas bankruptcy judge to deny
confirmation of Robertshaw's Chapter 11 plan, arguing the appliance
parts maker's reorganization scheme contains nonconsensual
third-party releases in violation of the U.S. Supreme Court's
recent Purdue Pharma decision.
About Robertshaw US Holding Corp.
Robertshaw US Holding Corp., along with its affiliates, is a global
leader in designing and manufacturing innovative control systems
and components for the appliance and HVAC industries.
Robertshaw US Holding and its affiliates filed Chapter 11 petitions
(Bankr. S.D. Texas Lead Case No. 24-90052) on February 15, 2024,
with $500 million to $1 billion in assets and liabilities. John
Hewitt, chief executive officer, signed the petitions.
The Debtors tapped Hunton Andrews Kurth LLP & Latham & Watkins, LLP
as bankruptcy counsel; Guggenheim Securities, LLC as investment
banker and financial advisor; and KPMG, LLP as accountant, tax
advisor and auditor. Kroll Restructuring Administration, LLC is
the claims, noticing, solicitation and balloting agent.
ROCKY MOUNTAIN: Transfers $1MM Secured Note to Isaac Lee Collins
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Rocky Mountain Chocolate Factory, Inc. disclosed in a Form 8-K
Report filed with the U.S. Securities and Exchange Commission that
the Company and Isaac Lee Collins, LLC entered into a Promissory
Note and Security Assignment and Assumption Agreement.
Pursuant to the terms of the Agreement, the Company irrevocably
assigned and transferred to the Purchaser all of its right, title,
and interest in and to the Promissory Note, the Security Agreement,
and the Pledge Agreement, and the Purchaser agreed to assume the
same in consideration of $666,666.66. As of July 19, 2024, the
outstanding principal balance of the Promissory Note was
$916,666.66, and the outstanding unpaid interest was $50,000.
As previously disclosed, the Company was issued a three-year
secured promissory note in the original principal amount of $1
million secured by the security agreement and the pledge agreement,
each dated as of the same date as the Promissory Note.
About Rocky Mountain Chocolate Factory
Durango, Colo.-based Rocky Mountain Chocolate Factory, Inc. is an
international franchisor, confectionery producer, and retail
operator. Founded in 1981, the Company produces an extensive line
of premium chocolate candies and other confectionery products.
As of May 31, 2024, the Company had $19 million in total assets,
$10 million in total liabilities, and $9 million in total
stockholders' equity.
New York, N.Y.-based CohnReznick LLP, the Company's auditor since
2024, issued a "going concern" qualification in its report dated
June 13, 2024, citing that the Company has incurred recurring
losses and negative cash flows from operations in recent years and
is dependent on debt financing to fund its operations, all of which
raise substantial doubt about the Company's ability to continue as
a going concern.
ROSA'S SPORTS: Unsecureds Will Get 5.6% of Claims over 5 Years
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Rosa's Sports Bar LLC filed with the U.S. Bankruptcy Court for the
District of New Jersey a Small Business Plan of Reorganization
dated July 15, 2024.
Rosa's is a single member limited liability company created under
the laws of the State of New Jersey on October 23, 2003.
The sole purpose of creating the LLC was to operate a small bar
business that originally used the trade name, Dotty's Pub, with a
primary business location of 317 Broadway, Passaic, NJ. Rosa
Ledezma is the sole member of Rosa's and she is also its manager
and bartender.
The business operated consistently from 2003 to 2020 and generated
sufficient income to pay the expenses of operating itself and to
make required payments on any debt service and liquor vendors until
the COVID-19 Pandemic shut down all businesses. The long shut down
caused the business to suffer tremendously. It reopened for short
period of time in 2022 and then Rosa's had another large setback
with a tax audit from the New Jersey Division of Taxation which
resulted in a disputed amount due of over $500,000.00.
This large tax debt prevented Rosa's from being able to renew its
Liquor License and hence it was unable to reopen until only
recently. This bankruptcy filing allowed for the liquor license to
be renewed with the City of Passaic and with the State ABC Board.
The Debtor proposes to pay the allowed claim of all allowed
Administrative Claims in full on the Effective Date of the Plan.
The Debtor proposes to pay the allowed claim of all allowed and
undisputed Priority Claims in full over 60 months from the
Effective Date of the Plan.
The Debtor proposes to pay the Secured Claim of the New Jersey
Division of Taxation up to value of all of the Debtor's assets,
including business property, furniture, fixtures, inventory,
accounts receivables and the retail consumption liquor license
(Cram Down). The balance of the Secured Claim shall be treated as a
general unsecured claim.
The Debtor proposes to treat all other allowed claims against the
Debtor, as general unsecured claims under Bankruptcy Code Sec.
506(a), pro rata.
The Plan will be funded by the income derived from Rosa's and if
necessary, the use of post petition rental income generated by Rosa
Ledezma (the non debtor individual owner of the Debtor) and the
five income producing properties owned by her individually to
ensure all obligations under the Plan are met. Rosa Ledezma,
Individually, to also make a nonrecourse capital contribution
towards administrative expenses and/or Plan funding upon
confirmation of the Plan (if necessary).
Class 3 consists of General Unsecured Claims. Claimants to share
pro rata in a total fund of $20,000.00. This Class will receive a
distribution of 5.6% of their allowed claims. The Debtor will
contribute that amount over a five-year term in the following
manner:
* On the effective date of the Plan, the Debtor or its
managing member, shall contribute at least $6,000.00 to pay all
claims required to be paid in full on the Effective Date (including
all administrative priority Claims). To the extent that the amount
necessary to satisfy these claims is less than the amounts
contributed, the excess will be distributed toward the fund for
payment of Class 3 Claims.
* Commencing 30 days after the Effective Date, for a period of
60 months, the Individual Debtors will make the following monthly
payments toward the fund for payment of Class 14 Claims.
The Managing Member of the Debtor will retain all equity interests
in the Debtor and shall be providing any new value needed at the
time of confirmation.
The Debtor will fund the payments to Classes 1 through 3 by income
from normal business operations of the Debtor.
The Debtor will fund the payments to all administrative and
priority claims, by (1) normal business operations of the Debtor;
and (2) By the use of post-petition rental income generated by Rosa
Ledezma (the non-debtor individual owner of the Debtor) and the
five income producing properties owned by her individually to
ensure all obligations under the Plan are met. Rosa Ledezma,
Individually, to also make a nonrecourse capital contribution
towards administrative expenses and/or Plan funding upon
confirmation of the Plan.
A full-text copy of the Plan of Reorganization dated July 15, 2024
is available at https://urlcurt.com/u?l=NYDyPl from
PacerMonitor.com at no charge.
Counsel to the Debtor:
THE LAW OFFICES OF STEVEN D. PERTUZ, LLC
Steven D. Pertuz, Esq.
111 Northfield Avenue, Suite 304
West Orange, NJ 07052
(973) 669-8600
About Rosa's Sports Bar
Rosa's Sports Bar LLC is a single member limited liability company
created under the laws of the State of New Jersey on October 23,
2003.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. N.J. Case No. 24-13853) on April 16,
2024, with $0 to $50,000 in assets and $500,001 to $1 million in
liabilities.
Judge Vincent F. Papalia presides over the case.
Steven D. Pertuz at the Law Offices Of Steven D. Pertuz, LLC, is
the Debtor's legal counsel.
SC HEALTHCARE: Plan Exclusivity Period Extended to Nov. 15
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Judge Thomas M. Horan of the U.S. Bankruptcy Court for the District
of Delaware extended SC Healthcare Holding, LLC, and affiliates'
exclusive periods to file a plan of reorganization and obtain
acceptance thereof to Nov. 15, 2024 and January 14, 2025,
respectively.
As shared by Troubled Company Reporter, since the Petition Date,
the Debtors have worked diligently to ensure a smooth transition
into chapter 11 while preserving and maximizing the value of the
Debtors' estates for the benefit of all stakeholders.
The Debtors explain that since commencing these Chapter 11 Cases,
the sale process required significant effort from the Debtors and
their advisors. Those efforts required multi-party negations with
the Debtors' lenders (including prepetition lenders and the
debtor-in-possession lender (the "DIP Lender")), the Committee,
U.S. Trustee, and other interested parties. Obtaining approval of
the sales and completing the other tasks attendant to operating
during chapter 11 required the full attention of the Debtors, their
employees, and their professional advisors.
Since commencement of these Chapter 11 Cases, the Debtors have
endeavored to establish and maintain cooperative working
relationships with their creditor constituencies. Importantly, the
Debtors are not seeking the extension of the Exclusive Periods to
delay administration of these Chapter 11 Cases or to exert pressure
on their creditors but, rather, to continue the orderly, efficient,
and cost-effective chapter 11 process. Thus, the Debtors submit
that this factor also weighs in favor of the requested extension of
the Exclusive Periods.
Counsel for the Debtors:
Andrew L. Magaziner, Esq.
Shella Borovinskaya, Esq.
Carol E. Cox, Esq.
YOUNG CONAWAY STARGATT & TAYLOR, LLP
Rodney Square
1000 North King Street
Wilmington, Delaware 19801
Tel: (302) 571-6600
Fax: (302) 571-1253
E-mail: amagaziner@ycst.com
sborovinskaya@ycst.com
ccox@ycst.com
- and -
Daniel J. McGuire, Esq.
Gregory M. Gartland, Esq.
WINSTON & STRAWN LLP
35 W. Wacker Drive
Chicago, IL 60601
Tel: (713) 651-2600
Fax: (312) 558-5700
Tel: (312) 558-5600
E-mail: dmcguire@winston.com
E-mail: ggartland@winston.com
- and -
Carrie V. Hardman, Esq.
200 Park Avenue
New York, New York 10166
Tel: (212) 294-6700
Fax: (212) 294-4700
E-mail: chardman@winston.com
About Petersen Health Care Inc.
SC Healthcare Holding, LLC, et al., comprise one of the largest
nursing home operators in the United States and work in partnership
with physicians, skilled nurses, and other health care providers in
order to provide various healthcare and rehabilitation services for
elderly citizens in Illinois, Missouri, and Iowa.
SC Healthcare Holding, LLC, and its affiliates, including Petersen
Health Care, Inc., sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Del. Lead Case No. 24-10443) on March
20, 2024. In the petition signed by David R. Campbell as authorized
signatory, SC Healthcare disclosed up to $100 million to $500
million in assets and $100 million to $500 million in liabilities.
Judge Hon. Thomas M. Horan oversees the case.
Young Conaway Stargatt & Taylor, LLP, and Winston & Strawn LLP,
serve as the Debtors' legal counsel.
SCORPIUS HOLDINGS: Expects to Resume Normal Trading on August 2
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Scorpius Holdings, Inc., announced July 30, 2024, that the staff of
NYSE Regulation has withdrawn its delisting determination and will
be lifting the trading suspension of the Company's common stock on
the NYSE American. The NYSE Regulation staff determined that the
Company's common stock was now trading above the threshold of low
selling price issues as further defined by Section 1003(f)(v) of
the NYSE American Company Guide. Scorpius' common stock is
expected to resume trading on the NYSE American on Friday, Aug. 2,
2024, under the symbol "SCPX."
About Scorpius Holdings
Headquartered in Morrisville, NC, Scorpius Holdings, Inc. --
http://www.scorpiusbiologics.com/-- is an integrated contract
development and manufacturing organization (CDMO) focused on
rapidly advancing biologic and cell therapy programs to the clinic
and beyond. Scorpius offers a broad array of analytical testing,
process development, and manufacturing services to pharmaceutical
and biotech companies at its state-of-the-art facilities in San
Antonio, TX. Scorpius is dedicated to transparent collaboration
and flexible, high-quality biologics biomanufacturing.
Raleigh, North Carolina-based BDO USA, P.C., the Company's auditor
since 2012, issued a "going concern" qualification in its report
dated April 26, 2024, citing that the Company has suffered
recurring losses from operations and has not generated significant
revenue or positive cash flows from operations. These factors
raise substantial doubt about the Company's ability to continue as
a going concern.
SCORPIUS HOLDINGS: Inks Note Cancellation & Purchase Deal Amendment
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Scorpius Holdings, Inc., disclosed in a Form 8-K filed with the
Securities and Exchange Commission that effective as of July 30,
2024, the Company entered into a Note Cancellation and Amendment to
Asset and Equity Interests Purchase Agreement of that certain 1%
non-convertible promissory note, dated May 1, 2024, in the
principal amount of $750,000, issued by the Company to Elusys
Holdings Inc. and to the Asset and Equity Interests Purchase
Agreement, dated as of Dec. 11, 2023, by and between Elusys
Holdings and the Company. Pursuant to the Amendment the Note was
cancelled in exchange for an amendment to the Asset and Equity
Interests Purchase Agreement which eliminates the payment of any
royalty fees by Elusys Holdings to the Company and instead provides
a cash payment to the Company of $2.5 million on or prior to Dec.
31, 2028.
About Scorpius Holdings
Headquartered in Morrisville, NC, Scorpius Holdings, Inc. --
http://www.scorpiusbiologics.com/-- provides process development
and biomanufacturing services to support the biomanufacturing needs
of third parties who use its biomanufacturing capacity as a
fee-for-service model through its subsidiary, Scorpius
Biomanufacturing, Inc. (formerly known as Scorpion Biological
Services, Inc.). Scorpius couples CGMP biomanufacturing and quality
control expertise with cutting edge capabilities in immunoassays,
molecular assays, and bioanalytical methods to support cell- and
gene-based therapies as well as large molecule biologics using
American-made equipment, reagents, and materials.
Raleigh, North Carolina-based BDO USA, P.C., the Company's auditor
since 2012, issued a "going concern" qualification in its report
dated April 26, 2024, citing that the Company has suffered
recurring losses from operations and has not generated significant
revenue or positive cash flows from operations. These factors
raise substantial doubt about the Company's ability to continue as
a going concern.
SHIFT TECHNOLOGIES: Files Amendment to Disclosure Statement
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Shift Technologies, Inc., and its Debtor Affiliates submitted a
Combined Disclosure Statement and Joint Chapter 11 Plan dated July
16, 2024.
The Combined Plan and Disclosure Statement constitutes a
liquidating chapter 11 plan.
The Combined Plan and Disclosure Statement provides for proceeds of
assets liquidated and/or to be liquidated over time to be
transferred to a Liquidating Trust and thereafter distributed to
holders of Allowed Claims in accordance with the terms of the
Combined Plan and Disclosure Statement and the provisions of the
Bankruptcy Code.
Except as otherwise provided by order of the Bankruptcy Court,
Distributions will occur within 60 days after the Effective Date or
as soon thereafter as is practicable and at various intervals
thereafter in accordance with the terms of the Combined Plan and
Disclosure Statement. The Debtors will cease to be Debtors in
Possession on the Effective Date and the Estates' assets and
liabilities will be transferred to the Liquidating Trust in
accordance with the terms of the Combined Plan and Disclosure
Statement.
The Combined Plan and Disclosure Statement provides for the
creation of a Liquidating Trust and appointment of a Liquidating
Trustee, who will administer and liquidate all remaining property
of the Debtors and their Estates. The Combined Plan and Disclosure
Statement also provides for Distributions to be made to certain
Holders of Administrative Claims, Professional Fee Claims, Priority
Tax Claims, Other Secured Claims, Priority Claims, and General
Unsecured Claims, and for the funding of the Liquidating Trust.
The Combined Plan and Disclosure Statement also provides for deemed
consolidation as of the Effective Date of all of the Debtors into
the Liquidating Trust. Finally, the Combined Plan and Disclosure
Statement contemplates the cancellation of all Equity Interests in
the Debtors, the dissolution and wind up of the affairs of the
Debtors, and the administration of any remaining assets of the
Estates by the Liquidating Trustee.
The Debtors have also sold, through online auctions, equipment and
personal property from their former vehicle storage and sales
facilities in Oakland, California; Pomona, California; and
Beaverton, Oregon; as well as at their headquarters in San
Francisco, California. The total net proceeds of such sales was
$560,453.
Finally, the Debtors sold various intangible assets: domain names,
trademarks, copyrights, and other intellectual property. An order
authorizing the sale of the substantial majority of those assets
issued on March 7, 2024 and sales closed thereon with net proceeds
(after payment of the Debtors' agent's fees) of approximately $2.0
million. The motion and other supporting documents and notices
thereon provide additional details about the transactions.
Class 3A consists of all General Unsecured Claims against the
Debtors' parent company, Shift Technologies, that are not Class 3C
Claims. Each Holder of Allowed General Unsecured Claim in Class 3A
shall receive, in full satisfaction, settlement, and release of and
in exchange for such Allowed General Unsecured Claim, on, or as
soon as reasonably practicable after the later of (i) the Effective
Date and (ii) the date on which a General Unsecured Claim becomes
Allowed and payable pursuant to and as specified by an order of the
Bankruptcy Court, a Pro Rata Class A beneficial interest in the
Liquidating Trust and Distributions therefrom, after all other
payments required as of the Effective Date have been made and the
Liquidating Trust Operating Reserve has been funded, as follows:
* Avoidance Actions: 55% of net proceeds;
* Causes of Action (other than Avoidance Actions): 85% of net
proceeds; and
* Net Effective Date Cash and other proceeds: 15%.
Class 3B consists of all General Unsecured Claims against any
Debtor other than the Debtors' parent company, Shift Technologies,
that are not Class 3C Claims. Each Holder of Allowed General
Unsecured Claim in Class 3B shall receive, in full satisfaction,
settlement, and release of and in exchange for such Allowed General
Unsecured Claim, on, or as soon as reasonably practicable after the
later of (i) the Effective Date and (ii) the date on which a
General Unsecured Claim becomes Allowed and payable pursuant to and
as specified by an order of the Bankruptcy Court, a Pro Rata Class
B beneficial interest in the Liquidating Trust and Distributions
therefrom, after all other payments required as of the Effective
Date have been made and the Liquidating Trust Operating Reserve has
been funded, as follows:
* Avoidance Actions: 45% of net proceeds;
* Causes of Action (other than Avoidance Actions): 15% of net
proceeds; and
* Net Effective Date Cash and other proceeds: 85%.
Class 3C consists of all General Unsecured Claims against the
Debtors' parent company, Shift Technologies, in an amount equal to
or less than $30,000, or that elects to voluntarily reduce its
Claim (if over $30,000) to $30,000. Each Holder of Allowed General
Unsecured Claim in Class 3C shall receive, in full satisfaction,
settlement, and release of and in exchange for such Allowed General
Unsecured Claim, on, or as soon as reasonably practicable after the
later of (i) the Effective Date and (ii) the date on which a
General Unsecured Claim becomes Allowed and payable pursuant to and
as specified by an order of the Bankruptcy Court, a payment in Cash
equal to 0.6% of the Allowed General Unsecured Claim in Class 3C.
Class 3D consists of all General Unsecured Claims against any
Debtor other than the Debtors' parent company, Shift Technologies,
in an amount equal to or less than $2,000, or that elects to
voluntarily reduce its Claim (if over $2,000) to $2,000. Each
Holder of Allowed General Unsecured Claim in Class 3D shall
receive, in full satisfaction, settlement, and release of and in
exchange for such Allowed General Unsecured Claim, on, or as soon
as reasonably practicable after the later of (i) the Effective Date
and (ii) the date on which a General Unsecured Claim becomes
Allowed and payable pursuant to and as specified by an order of the
Bankruptcy Court, a payment in Cash equal to 7.25% of the Allowed
General Unsecured Claim in Class 3D.
Class 5 consists of all Equity Interests. As of the Effective Date,
all Equity Interests shall be deemed void, cancelled, and of no
further force and effect. On and after the Effective Date, Holders
of Equity Interests shall not be entitled to, and shall not receive
or retain any property or interest in property under the Plan on
account of such Equity Interests. Class 5 is deemed to have
rejected the Plan and, therefore, Holders of Equity Interests are
not entitled to vote on the Plan.
The Combined Plan and Disclosure Statement will be implemented by
various acts and transactions as set forth in the Combined Plan and
Disclosure Statement, including, among other things, the
establishment of the Liquidating Trust, the appointment of the
Liquidating Trustee, and the making of Distributions by the
Liquidating Trustee.
Distributions to Convertible Noteholders
Notwithstanding any provision in the Combined Plan and Disclosure
Statement to the contrary, Distributions to Convertible Noteholders
may be made to or at the direction of the Convertible Notes
Indenture Trustee, who may act as the Distribution Agent (or direct
the Distribution Agent) for distributions to Convertible
Noteholders in accordance with the Combined Plan and Disclosure
Statement and the Convertible Notes Indenture.
As applicable, the Convertible Notes Indenture Trustee may transfer
or direct the transfer of such Distributions directly through the
facilities of DTC (whether by means of book-entry exchange, free
delivery, or otherwise) and will be entitled to recognize and deal
for all purposes under the Combined Plan and Disclosure Statement
with the respective Convertible Noteholders to the extent
consistent with the customary practices of DTC. Notwithstanding
anything to the contrary in this Combined Plan and Disclosure
Statement, Distributions to Convertible Noteholders shall be
subject in all respects to the rights of the Convertible Notes
Indenture Trustee to assert a charging lien against such
Distributions.
All Distributions to be made to Convertible Noteholders through DTC
shall be made eligible for Distributions through the facilities of
DTC and, for the avoidance of doubt, under no circumstances will
the Convertible Notes Indenture Trustee be responsible for making
or required to make any Distributions under the Combined Plan and
Disclosure Statement to Convertible Noteholders if such
Distribution is not eligible to be distributed through the
facilities of DTC.
A full-text copy of the Combined Disclosure Statement and Plan
dated July 16, 2024 is available at https://urlcurt.com/u?l=mt2br6
from PacerMonitor.com at no charge.
Attorneys for the Debtors:
Tobias S. Keller, Esq.
Keith Mcdaniels, Esq.
Danisha Brar, Esq.
KELLER BENVENUTTI KIM LLP
650 California Street, Suite 1900
San Francisco, CA 94108
Telephone: (415) 496-6723
Facsimile: (650) 636-9251
Email: tkeller@kbkllp.com
kmcdaniels@kbkllp.com
dbrar@kbkllp.com
About Shift Technologies
Shift Technologies, Inc., is a consumer-centric omnichannel used
car retailer. It operates the website http://www.shift.com/and two
locations in Oakland and Pomona, California.
Shift Technologies and its affiliates filed Chapter 11 petitions
(Bankr. N.D. Calif. Lead Case No. 23-30687) on Oct. 9, 2023. In
the petitions signed by its chief financial officer, Jason Curtis,
Shift Technologies disclosed up to $50,000 in assets and up to
$500,000 in liabilities.
Judge Hannah L. Blumenstiel oversees the cases.
The Debtors tapped Thomas B. Rupp, Esq., at Keller Benvenutti Kim,
LLP as legal counsel; AlixPartners, LLC as financial advisor; and
Omni Agent Solutions, Inc. as claims and noticing agent.
The U.S. Trustee for Region 17 appointed an official committee to
represent unsecured creditors in the Debtors' Chapter 11 cases.
The committee is represented by Michael Sweet, Esq., at Fox
Rothschild, LLP.
SHINING WAY: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: Shining Way Esthetics, LLC
24646 Kingsland Blvd
Katy TX 77494
Business Description: Shining Way is a medical spa in Texas.
Chapter 11 Petition Date: August 2, 2024
Court: United States Bankruptcy Court
Southern District of Texas
Case No.: 24-33555
Judge: Hon. Eduardo V Rodriguez
Debtor's Counsel: Larry A. Vick, Esq.
LARRY A. VICK
13501 Katy Freeway, Suite 3474
Houston TX 77079
Tel: (832) 413-3331
Fax: (832) 202-2821
Email: lv@larryvick.com
Estimated Assets: $500,000 to $1 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Craig Clayton De Souza as managing
member.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 20 largest unsecured creditors is available
for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/RK5EM2Q/Shining_Way_Esthetics_LLC__txsbke-24-33555__0001.0.pdf?mcid=tGE4TAMA
SILVERSHORE CYPRESS: Voluntary Chapter 11 Case Summary
------------------------------------------------------
Debtor: Silvershore Cypress LLC
10-71 Cypress Ave
Ridgewood, NY 11385-8108
Business Description: Silvershore Cypress owns a tenant-in-common
interest in a mixed-use, multi-family
apartment building located at 10-71 Cypress
Avenue a/k/a 1708 Summerfield Street, Queens
NY. The Debtor owns 69.5% TIC interest in
the Property.
Chapter 11 Petition Date: August 1, 2024
Court: United States Bankruptcy Court
Eastern District of New York
Case No.: 24-43223
Judge: Hon. Elizabeth S Stong
Debtor's Counsel: Kevin Nash, Esq.
GOLDBERG WEPRIN FINKEL GOLDSTEIN LLP
125 Park Ave
New York, NY 10017-5690
Email: knash@gwfglaw.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by David Goldwasser as chief restructuring
officer.
The Debtor failed to include in the petition a list of its 20
largest unsecured creditors.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/OR4MTKA/Silvershore_Cypress_LLC__nyebke-24-43223__0001.0.pdf?mcid=tGE4TAMA
SILVERSHORE PROPERTIES: Voluntary Chapter 11 Case Summary
---------------------------------------------------------
Debtor: Silvershore Properties 95 LLC
10-71 Cypress Ave
Ridgewood, NY 11385-8108
Business Description: Silvershore Properties owns a tenant-in-
common interest in a mixed-used, multi-
family apartment building located at 10-71
Cypress Avenue a/k/a 1708 Summerfield
Street, Queens, NY. The Debtor owns 30.41%
TIC interest in the Property.
Chapter 11 Petition Date: August 1, 2024
Court: United States Bankruptcy Court
Eastern District of New York
Case No.: 24-43224
Judge: Hon. Nancy Hershey Lord
Debtor's Counsel: Kevin Nash, Esq.
GOLDBERG WEPRIN FINKEL GOLDSTEIN LLP
125 Park Ave
New York, NY 10017-5690
Email: knash@gwfglaw.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by David Goldwasser as chief restructuring
officer.
The Debtor failed to include in the petition a list of its 20
largest unsecured creditors.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/OY4FPWA/Silvershore_Properties_95_LLC__nyebke-24-43224__0001.0.pdf?mcid=tGE4TAMA
SIYATA MOBILE: To Attend APCO 2024 August 4-7 in Orlando, Florida
-----------------------------------------------------------------
Siyata Mobile Inc. announced that it will attend APCO 2024, APCO
International's Annual Conference & Expo, August 4-7 at the Orange
County Convention Center in Orlando, Florida.
The Company's products will be on display in a booth hosted by
FirstNet, Booth #1313, in the Exhibit Hall.
Mr. Marc Seelenfreund, Founder and CEO of Siyata, commented, "This
conference provides us with an excellent opportunity to showcase
our solutions and engage with potential new customers. APCO's
Annual Conference & Expo is the largest gathering of its kind in
the U.S. with conference organizers expecting more than 3,700
public safety communications professionals to be in attendance. It
is an excellent stage to showcase our solutions to the public
safety community."
APCO 2024, APCO International's Annual Conference & Expo, is the
premier event for public safety communications officials, from
frontline telecommunicators to comm center managers to public
safety communications equipment and services vendors. APCO 2024
offers four days of educational sessions, committee meetings and
special events, paired with two full days of exhibits. To learn
more, visit https://www.apco2024.org.
About Siyata Mobile
British Columbia, Canada-based Siyata Mobile Inc. is a B2B global
developer and vendor of next-generation Push-To-Talk over Cellular
handsets and accessories. Its portfolio of rugged PTT handsets and
accessories enables first responders and enterprise workers to
instantly communicate over a nationwide cellular network of choice,
to increase situational awareness and save lives. Police, fire, and
ambulance organizations as well as schools, utilities, security
companies, hospitals, waste management companies, resorts and many
other organizations use Siyata PTT handsets and accessories.
Jerusalem, Israel-based Barzily and Co., the Company's auditor
since 2023, issued a "going concern" qualification in its report
dated April 3, 2024, citing that the Company has suffered recurring
losses from operations, high accumulated losses, outstanding bank
loan and an outstanding balance in respect of the sale of future
receipts, that raise substantial doubt about its ability to
continue as a going concern.
SMARTHOME VENTURES: Involuntary Chapter 11 Case Summary
-------------------------------------------------------
Alleged Debtor: SmartHome Ventures, LLC
d/b/a Pepper
10955 Lowell Ave.
Suite 700
Overland Park, KS 66210
Involuntary Chapter
11 Petition Date: August 1, 2024
Court: United States Bankruptcy Court
District of Delaware
Case No.: 24-11640
Judge: Hon. Thomas M Horan
Petitioners' Counsel: Ericka F. Johnson, Esq.
BAYARD, P.A.
600 North King Street, Suite 400
Wilmington, DE 19899
Tel: 302-429-4275
Email: ejohnson@bayardlaw.com
- and -
Leslie A. Berkoff, Esq.
MORITT HOCK & HAMROFF LLP
1407 Broadway, 39th Floor
New York, NY 10018
Tel: 212-239-2000
Email: lberkoff@moritthock.com
- and -
Kevin S. Mann, Esq.
CROSS & SIMON, LLC
1105 N. Market Street, Suite 901
Wilmington, DE 19801
Tel: 302-777-4200
Email: kmann@crosslaw.com
- and -
Robert T. Schmidt, Esq.
Kenneth Chin, Esq.
KRAMER LEVIN NAFTALIS & FRANKEL LLP
1177 Avenue of the Americas
New York, NY 10036
Tel: 212-715-9527
Email: rscmidt@kramerlevin.com
kchin@kramerlevin.com
A full-text copy of the Involuntary Petition is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/B3YNYZQ/SmartHome_Ventures_LLC_dba_Pepper__debke-24-11640__0001.0.pdf?mcid=tGE4TAMA
Alleged creditors who signed the petition:
Petitioner Nature of Claim Claim Amount
Merkury Innovations LLC License Agreement $100,000
45 Broadway
3rd Floor
New York, NY 10006
Chapford Credit Opportunities Senior Secured $5,330,000
Fund LP Debt
201 Broad Street
Suite 500
Stamford, CT 06901
Comsource Consulting Consulting $136,590
14052 Hayes Street Contract
Overland Park, KS 66222
SMC ENTERTAINMENT: Retires Additional $516K of Debt
---------------------------------------------------
SMC Entertainment, Inc., announced that the Company retired an
additional $516,004 of debt in the form of convertible promissory
notes for newly created Series D Preferred Shares. The Debt
exchanged to Preferred Shares will be reflected in the Company's
third-quarter 2024 financial statements.
The Debt is comprised of $516,004 held in two previous convertible
notes; $313,323 and $202,681 respectively. The Company will issue
55,000 Preferred Shares in exchange for the Debt. The Preferred
Shares shall convert into the Company's common stock at a share
price of the lesser of $0.005 or 65% of the average closing price
in the preceding 90 trading sessions. The conversion of Preferred
Shares to common stock is permitted after two years from Preferred
Share issuance with a maximum of 4.99% per conversion. All share
issuances are restricted in accordance with the Securities and
Exchange Commission Rule 144.
Since June 14, 2024 and including this announcement, the Company
has retired and/or exchanged a total of $1,395,763 of debt. In
addition, the Company has cancelled a total of 250,000,000 common
shares since June 7, 2024.
"The Investor's decision to exchange $516,004 in convertible notes
for preferred equity provides the Company with the opportunity to
further enhance our balance sheet and demonstrates our Investor's
commitment to the Company," said Erik Blum, SMC's CEO. "In light
of SMC's recent announcement to purchase 100% of the assets of
ChainTrade Ltd., we believe our stock is extremely undervalued.
Additionally, management continues to find ways to reduce SMC's
long-term debt, minimize shareholder dilution and increase
shareholder value."
About SMC
Boca Raton, Fla.-based SMC Entertainment Inc. --
http://www.smceinc.com/-- is a versatile holding company focused
on acquisition and support of proven commercialized financial
services and technology (Fintech) companies. SMC's
multi-discipline growth by acquisition approach is to enhance
revenues and shareholder equity.
Lagos, Nigeria-based Olayinka Oyebola & Co., the Company's auditor
since March 2022, issued a "going concern" qualification in its
report dated April 15, 2024, citing that the Company suffered an
accumulated deficit of $17,560,687, net loss of $1,560,683 and a
negative working capital of $3,393,255. These matters raise
substantial doubt about the Company's ability to continue as a
going concern.
SOUL QUEST CHURCH: Soul Quest Ayahuasca Seeks Chapter 11 Bankruptcy
-------------------------------------------------------------------
Soul Quest Church of Mother Earth Inc. filed Chapter 11 protection
in the Middle District of Florida. According to court filing, the
Debtor reports between $1 million and $10 million. 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
August 13, 2024 at 10:00 a.m. in Room Telephonically on telephone
conference line: 877-801-2055. participant access code: 8940738#.
About Soul Quest Church of Mother Earth Inc.
Soul Quest Church of Mother Earth Inc., doing business as Soul
Quest Ayahuasca Church of Mother Earth, Inc.,
Soul Quest Church of Mother Earth Inc. sought relief under Chapter
11 of the U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No. 24-03612)
on July 15, 2024. In the petition filed by Christopher Young, as
president, the Debtor reports estimated assets between $100,000 and
$500,000 and estimated liabilities between $1 million and $10
million.
The Honorable Bankruptcy Judge Lori V. Vaughan handles the case.
The Debtor is represented by:
Frank M. Wolff, Esq.
NARDELLA & NARDELLA PLLC
135 W. Central Blvd., Suite 300
Orlando, FL 32801
Tel: (407) 966-2680
Email: fwolff@nardellalaw.com
ST. CHRISTOPHER'S: Judge Denies Bid to Appoint Creditors' Committee
-------------------------------------------------------------------
Judge Sean Lane of the U.S. Bankruptcy Court for the Southern
District of New York denied the motion for the appointment of an
official committee of unsecured creditors in the Chapter 11 cases
of welfare organizations St. Christopher's, Inc. and The McQuade
Foundation.
A group of sex abuse claimants on June 5 requested the appointment
of a creditors' committee, saying the Subchapter V trustee
appointed in the welfare organizations' bankruptcy cases cannot
adequately represent the interests of sex abuse claimants.
St. Christopher's and McQuade filed their bankruptcy cases
primarily because of liability to the survivors of childhood sexual
abuse bringing cases under New York's Child Victim Act (CVA).
Beginning on Feb. 14, 2019, the CVA opened a "window" to allow
survivors of childhood sexual abuse to file claims that had been
time-barred under New York's statute of limitations against
perpetrators of abuse and entities responsible for the
perpetrators.
There are 30 pending CVA actions against the welfare organizations,
which are all in the pre-trial stages.
STENSON LANDSCAPE: Amends Ally 5769 Secured Claim Pay
-----------------------------------------------------
Stenson Landscape & Irrigation, Inc., submitted a Third Amended
Plan of Reorganization dated July 15, 2024.
The Plan provides for a reorganization and restructuring of the
Debtor's financial obligations.
The Plan provides for a distribution to Creditors in accordance
with the terms of the Plan from the Debtor over the course of 5
years from the Debtor's continued business operations.
Class 1C consists of the Secured Claim of Ally 5769. Ally 5769 has
filed a proof of claim asserting it is owed approximately
$46,710.92. The unpaid principal balance of the Allowed Class 1C
Claim is hereby allowed as an Allowed Secured Claim in the amount
of $46,710.92. Simple interest shall accrue on the unpaid balance
owed to the Allowed Class 1D Claim holder at the rate of 9.0% from
and after the Confirmation Date.
The Allowed Class 1C Claim, plus interest thereon, shall be paid by
Reorganized Debtor in consecutive monthly installments of $970.00
commencing the 1st day of the first full calendar month following
the Effective Date, and continuing on the same day each month
thereafter until the Allowed Class 1C Claim is paid in full.
The maturity date shall be the 1st day of the 60th month after the
first full calendar month following the Effective Date, at which
time the remaining balance due and owing, if any, shall be paid in
full. At any time after the Effective Date, without penalty or
premium, the Allowed Class 1C Claim may be prepaid, in whole or in
part, in the sole discretion of Reorganized Debtor.
Like in the prior iteration of the Plan, each holder of an Allowed
Unsecured Claim in Class 3 shall be paid by Reorganized Debtor from
an unsecured creditor pool, which pool shall be funded at the rate
of $5,000 per month. Payments from the unsecured creditor pool
shall be paid quarterly, for a period not to exceed 5 years (20
quarterly payments) and the first quarterly payment will be due on
the 20th day of the first full calendar month following the last
day of the first quarter.
The Debtor estimates the aggregate of all Allowed Class 3 Claims is
less than $378,000 based upon Debtor's review of the Court’s
claim register, Debtor’s bankruptcy schedules, and anticipated
Claim objections.
Class 4 consists of the holders of Allowed Interests in the Debtor.
The holder of an Allowed Class 4 Interest shall retain their
interests in the Reorganized Debtor.
The Debtor proposes to implement and consummate this Plan through
the means contemplated by Sections 1123 and 1145(a) of the
Bankruptcy Code.
From and after the Effective Date, in accordance with the terms of
this Plan and the Confirmation Order, the Reorganized Debtor shall
perform all obligations under all executory contracts and unexpired
leases assumed in accordance with Article 6 of this Plan.
A full-text copy of the Third Amended Plan dated July 15, 2024 is
available at https://urlcurt.com/u?l=FlxXMj from PacerMonitor.com
at no charge.
Attorneys for the Debtor:
Robert T. DeMarco, Esq.
Michael S. Mitchell, Esq.
DeMarco Mitchell, PLLC
1255 W. 15th Street, 805
Plano, TX 75075
Telephone: (972) 578-1400
Facsimile: (972) 346-6791
Email: robert@demarcomitchell.com
mike@demarcomitchell.com
About Stenson Landscape & Irrigation
Stenson Landscape & Irrigation, Inc., is a small landscape
business.
The Debtor filed its voluntary petition for relief under Chapter 11
of the Bankruptcy Code (Bankr. E.D. Tex. Case No. 24-40243) on Feb.
1, 2024. In the petition signed by Tracy Terrell Doyle, president,
the Debtor disclosed up to $50,000 in assets and up to $10 million
in liabilities.
Judge Brenda T. Rhoades oversees the case.
DeMarco Mitchell, PLLC, serves as the Debtor's counsel.
STEWARD HEALTH CARE: Announces Closure of 2 Massachusetts Hospitals
-------------------------------------------------------------------
Steve Leblanc of Associated Press reports that Steward Health Care
announced that is it closing two hospitals in Massachusetts because
it received no qualified bids for the facilities after declaring
bankruptcy earlier this 2024.
Steward's bankruptcy is being investigated by the U.S. Senate, with
Democrats accusing the Dallas-based company of allowing private
equity executives to strip the firm of its assets, despite the harm
it causes to local communities.
In a statement announcing the closures, Steward said it has been
working to sell or transition all its Massachusetts hospitals and
is in active final negotiations to sell six of them.
"Despite the extensive sale process, which involved close
coordination with lenders and regulators, there were no qualified
bids for two hospitals, Carney Hospital and Nashoba Valley Medical
Center, and, unfortunately, they will be closing on or around
August 31, 2024," the company said."
Carney Hospital is located in the Dorchester neighborhood of Boston
and Nashoba Valley Medical Center is in Ayer, a town about 45 miles
(72 kilometers) west of Boston.
In May 2024, Steward said it planned to sell off all its hospitals
after announcing that it had filed for bankruptcy protection. The
company operates about 30 hospitals across eight states.
Steward called the situation "challenging and unfortunate" and said
the effect it will have on patients, employees and the communities
is regrettable. The company said it is working with appropriate
state and federal agencies during the closure process.
"We will work closely with our Carney and Nashoba patients to help
them find the best possible care alternative and with our valued
employees and health care professionals to assist with this very
difficult transition," the company said.
Massachusetts Gov. Maura Healey blamed the closures on what she
called the greed and mismanagement of Steward Health Care and
company CEO Ralph de la Torre.
"These hospitals have long served their communities – their
closures are about more than the loss of beds, doctors, and
nurses," Healey said in a written statement. "We want to assure the
people of Massachusetts that we have prepared diligently for this
moment and will take all available steps to help facilitate a
smooth transition for impacted patients and employees."
Healey said for the company's remaining hospitals in Massachusetts,
Steward has received bids to not only maintain but to improve the
hospitals.
Carney and Nashoba remain open for now and will proceed through an
orderly and regulated closure, according to Healey.
The next step in the process for the two hospitals is for a
bankruptcy judge to approve Steward's motion to close. Steward is
required to send a notice of closure to the state Department of
Public Health, which will then work out a transition for patients
and workers.
The state has created an online interactive dashboard allowing
patients to map nearby hospitals, understand the services available
at each location, and view monthly updates on patient volumes and
available beds to help residents connect to nearby services.
In June, an average of 13 of Carney's 83 medical beds were filled
and an average of 11 of Nashoba's 46 beds were filled, according to
the state.
On Thursday, a Senate committee voted Thursday to authorize an
investigation into the bankruptcy of Steward Health Care and to
subpoena de la Torre.
The subpoena would compel de la Torre to testify before the Senate
Health, Education, Labor, and Pensions Committee at a hearing on
Sept. 12.
Committee Chair Sen. Bernie Sanders, the Vermont independent, said
Thursday that the Steward bankruptcy shows the dangers of allowing
private equity executives to make huge amounts of money by taking
over hospitals, loading them up with debt and stripping their
assets.
A group of Democratic members of Congress, led by Markey, has also
sought reassurances that workers at hospitals owned by Steward will
have their health care and retirement benefits protected.
Markey, also a member of the HELP committee, said in a statement
Friday that Steward must do everything it can to keep the remaining
hospitals open.
"The callousness demonstrated for the health and well-being of the
people of Massachusetts is nothing short of astonishing," Markey
said. "Steward Health Care — led by Dr. de la Torre and
facilitated by private equity and real estate investment trusts —
intentionally purchased safety net hospitals that communities rely
on, and they ran them into the ground in their efforts to extract
maximum profits"
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.
STEWARD HEALTH: Faces Senate Bipartisan Probe, CEO Gets Subpoena
----------------------------------------------------------------
Thomas Gleason of Bloomberg Law reports that Steward Health Care
Systems will face a bipartisan Senate investigation and its chief
executive officer will be served a subpoena, after a Senate
committee vote Thursday, July 25, 2024.
The Senate Committee on Health, Education, Labor, and Pensions,
chaired by Sen. Bernie Sanders (I-Vt.), voted 20-1 to authorize an
investigation into the bankruptcy of the largest for-profit
hospital system in the country. It also authorized a subpoena of
Steward's Chairman and CEO Ralph de la Torre for testimony relating
to the investigation.
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.
SVB FINANCIAL: SVB Cayman Liquidators Want to Claw Back $294 Mil.
-----------------------------------------------------------------
Rick Archer of Law360 Bankruptcy Authority reports that the
liquidators of the Cayman Islands arm of Silicon Valley Bank asked
a New York bankruptcy judge to claw back a $294 million dividend
paid in 2022 to the bank's now-bankrupt parent company, saying
Silicon Valley was already a "ticking time bomb."
About SVB Financial Group
SVB Financial Group (Pink Sheets: SIVBQ) is a financial services
company focusing on the innovation economy, offering financial
products and services to clients across the United States and in
key international markets.
Prior to March 10, 2023, SVB Financial Group owned and operated
Silicon Valley Bank, a state chartered bank. During the week of
March 6, 2023, Silicon Valley Bank, Santa Clara, CA, experienced a
severe "run-on-the-bank." On the morning of March 10, the
California Department of Financial Protection and Innovation seized
SVB and placed it under the receivership of the Federal Deposit
Insurance Corporation. SVB was the nation's 16th largest bank and
the biggest to fail since the 2008 financial meltdown.
On March 17, 2023, SVB Financial Group sought Chapter 11 bankruptcy
protection (Bankr. S.D.N.Y. Case No. 23-10367). The Debtor had
assets of $19,679,000,000 and liabilities of $3,675,000,000 as of
Dec. 31, 2022.
The Hon. Martin Glenn is the bankruptcy judge.
The Debtor tapped Sullivan & Cromwell, LLP as bankruptcy counsel;
Centerview Partners, LLC as investment banker; and Alvarez & Marsal
North America, LLC as restructuring advisor. William Kosturos, a
partner at Alvarez & Marsal, serves as the Debtor's chief
restructuring officer. Kroll Restructuring Administration, LLC, is
the claims and noticing agent and administrative advisor.
The U.S. Trustee for Region 2 appointed an official committee to
represent unsecured creditors in the Debtor's Chapter 11 case.
The committee tapped Akin Gump Strauss Hauer & Feld, LLP as
bankruptcy counsel; Cole Schotz P.C. as conflict counsel; Lazard
Freres & Co. LLC as investment banker; and Berkeley Research Group,
LLC as financial advisor.
SVP-SINGER HOLDINGS: Moody's Appends 'LD' Designation to PDR
------------------------------------------------------------
Moody's Ratings affirmed SVP-Singer Holdings Inc's Probability of
Default Rating at Ca-PD and appended the PDR with a limited default
(LD) designation, changing the PDR to Ca-PD/LD. This reflects that
Moody's consider the recent amendments to SVP-Singer's first lien
facilities, including the deferral of mandatory term loan payments
and cash interest relief to be a distressed exchange. These
transactions do not constitute an event of default under any of the
company's debt agreements and support SVP-Singer's near-term
liquidity. At the same time, Moody's affirmed the company's Ca
Corporate Family Rating, and the Ca rating on the senior secured
first lien term loan due July 2028. The outlook is stable. Moody's
will remove the "/LD" designation from the PDR in approximately
three business days.
In April 2024, SVP-Singer completed an amendment to its first lien
term loan credit facility, which deferred the mandatory principal
payments until maturity in 2028. In addition, the amendment
modified the payment of interest to the option of paid-in-kind
(PIK) in 2024, and a combination of cash pay and PIK in 2025 and
2026. At the same time, the company amended the interest terms on
its existing first lien PIK notes due July 2028 to be in-line with
the first lien term loan. SVP-Singer also entered into a new
subordinated debt facility due October 2028, that included $20
million of new debt capital provided by its sponsor, Platinum
Equity Partners. Moody's consider the deferral of the principal
payments and cash interest conversion to PIK to be a distressed
exchange.
The debt capital injection and cash interest relief provide the
company additional means of preserving cash to fund operations and
working capital needs. Moody's estimate a cash interest expense and
debt repayment reduction of over $30 million in 2024.
The ratings affirmations reflect Moody's view that the probability
of an event of default remains high and Moody's recovery
expectations for the company's debt that reflect a material
impairment. SVP-Singer's capital structure is unsustainable at
current earnings levels, particularly as its debt increases because
of the PIK interest over the next 12-18 months. The company will
need to meaningfully and sustainably improve its earnings and cash
flows to manage its debt service as the cash pay portion of
interest resumes past 2024.
RATINGS RATIONALE
SVP-Singer's Ca CFR reflects its elevated risk of default with very
high financial leverage and an unsustainable capital structure
absent a significant earnings improvement that Moody's view as
unlikely. The company has modest revenues with a narrow product
focus, and demand for its products is exposed to cyclical consumer
discretionary spending, somewhat offset by its exposure to "need to
sew" markets. Ongoing inflationary pressures on consumer spending
are negatively affecting demand for the company's products. Moody's
expect these pressures to persist at least through 2024, which will
make it difficult for the company to execute an earnings
turnaround. SVP-Singer's weak liquidity reflects its ongoing cash
flow deficits and the uncertainty around its ability to comfortably
fund the cash interest expense that resumes in 2025.
However, SVP-Singer benefits from a strong market position in the
global consumer sewing machines and related products market,
supported by its portfolio of well-recognized brands. The company
has good geographic and customer diversification, and benefits from
its sizable ecommerce and direct to consumer businesses.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The stable outlook reflects that the Ca ratings sufficiently
indicate Moody's view of recovery given the high probability of a
default. The stable outlook also reflects that the approximate $45
million of cash as of March 2024 pro forma for the subordinated
debt issuance and PIK interest options provide the company some
leeway over the next year to execute its turnaround strategies.
The ratings could be downgraded if Moody's expect recovery values
to deteriorate for any reason.
The ratings could be upgraded if the company improves its cash flow
generation such that there is a greater likelihood of supporting
business operations and debt service past 2024. The company would
also need to materially reduce its financial leverage by improving
earnings and cash flows such that the risk of a default is lower.
Headquartered in Nashville, TN, SVP-Singer Holdings Inc through its
subsidiaries manufactures and distributes consumer sewing machines
and accessories under the Singer, Husqvarna Viking, and Pfaff
brands. Since the July 2021 leverage buyout transaction the company
is majority owned by Platinum Equity Partners. SVP-Singer reported
revenue for the last twelve months period (LTM) ending March 30,
2024 of $338 million.
The principal methodology used in these ratings was Consumer
Durables published in September 2021.
T L C MEDICAL: Voluntary Chapter 11 Case Summary
------------------------------------------------
Debtor: T L C Medical Group, Inc.
537 N.W. Lake Whitney Place
Unit 103-106
Port Saint Lucie FL 34986
Business Description: TLC Medical Group in Port St. Lucie,
Florida, provides diagnosis and treatment of
heart and circulatory disorders. The Debtor
helps people suffering from a wide variety
of cardiac conditions, including heart
disease, heart attack, atrial fibrillation,
and chest pain.
Chapter 11 Petition Date: August 1, 2024
Court: United States Bankruptcy Court
Southern District of Florida
Case No.: 24-17881
Judge: Hon. Erik P Kimball
Debtor's Counsel: Roderick Ford, Esq.
THE METHODIST LAW CENTRE
5745 SW 75th St#149
Gainesville FL 32608-5504
Tel: 813-270-5012
Email: admin@methodistlawcentre.com
Estimated Assets: $0 to $50,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Anthony B. Lewis as president.
The Debtor failed to include in the petition a list of its 20
largest unsecured creditors.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/EVQSLYA/T_L_C_Medical_Group_Inc__flsbke-24-17881__0001.0.pdf?mcid=tGE4TAMA
TEAM HEALTH: Fitch Hikes Rating on Issuer Default Rating to CCC+
----------------------------------------------------------------
Fitch Ratings has upgraded Team Health Holdings, Inc.'s (TMH)
Issuer Default Rating (IDR) to 'CCC+' from 'CCC-'. Fitch has also
upgraded the rating on TMH's senior secured term loan due 2027 to
'CCC+'/'RR4' from 'CCC-'/'RR4'.
These rating actions reflect the success of recent liability
management efforts, which extinguished the risk of its debt
maturities springing to November 2024 (ahead of the senior notes
maturing February 2025). TMH now has until 4Q26 to stave off
further springing maturities by downsizing its 2027 term loan to
$0.5 billion from $1.4 billion today.
Liquidity has improved with the debt maturity profile extended via
the recent transactions, which redeem all $714 million of the
senior notes due 2025 at par with proceeds of a $335 million add-on
to its 1L notes due 2028, a $145 million new issuance of 2L notes
due 2029 and a $200 million sale of common stock to owner
Blackstone, which also exchanged its $70 million PIK Term Loan for
equity. Lastly, TMH's revolver commitment was reduced from $275
million to $250 million, in lieu of a previously-planned cut to
$200 million in November 2024.
The ratings' upgrades further reflect recovering operating
fundamentals, including double-digit top line growth and recent
EBITDA margin improvement, supporting a rebound in EBITDA that
Fitch expects to reduce Fitch-defined EBITDA leverage below 8.0x by
YE 2025.
Key Rating Drivers
Leading Position in a Challenging Subsector: TMH is one of a
handful of large national providers in the fragmented outsourced
healthcare staffing market, with leading scale enhancing its
capabilities in contracting with hospital systems and health
insurers. Contracted physician services and emergency department
(ED) staffing compose the majority of TMH's revenue. Fitch expects
long-term top-line growth prospects could be constrained by secular
pressures on ED care pricing and volumes, especially lower-acuity
visits, including health insurers' focus on reducing ED use,
high-deductible plans constraining demand and competition from
urgent care clinics and other alternate settings.
NSA is an Ongoing Source of Uncertainty: A key source of industry
pressure stems from the No Surprises Act (NSA), which banned
balance billing for out-of-network emergency care and established
an evolving process for payors and providers to dispute claims. TMH
has long asserted it didn't balance bill, so the ban has not
directly affected its revenues. TMH has continued to win an
overwhelming percentage of the billing disputes addressed through
the NSA process.
While its winning record is reassuring, the added time and cost for
collections has added risk of slowing cash conversion cycles
industry wide. TMH once again has managed well in this area, with
net days in accounts receivable (as reported by and defined by TMH)
at 63 in 1Q24, down markedly from 68 in 1Q23 and consistent with 63
in 4Q23. With certain health insurers allegedly using the NSA to
pressure rates, TMH notably reported low-to-mid single digit
increases in the last three quarters.
Refinancing of Fulcrum Bond Bolsters Liquidity: TMH's refinancing
of all of its 6.375% senior unsecured notes due Feb. 2025 has
improved liquidity, eliminating its only debt due until November
2026 and the springing provisions that could've accelerated the
maturity of all of its other debt to Nov. 2024. The transaction is
about neutral from a cash interest standpoint, and gives TMH until
Nov. 2026 to pay down its Term Loan due Mar. 2027 to $0.5 billion
from $1.4 billion today, absent which its revolver and secured note
maturities would spring ahead.
Margin Rebound Likely Underway: Fitch's ratings case assumes
Fitch-defined EBITDA margins will be about 200 bps lower in 2024
than in 2019, prior to the pandemic. However, the Fitch assumed
2024 level is about 100 bps above 2023 and Fitch assumes margins
will rise by about 30-50 bps annually thereafter. While rates paid
to employed physicians and the amount and cost of temporary labor
pressured labor costs through 2023, margins should now benefit near
term, with temporary labor costs starting to fall, contracted payor
rates and client subsidies improving (varying case by case), and as
economies of scale emerge from the recent upturn in same-contract
volumes and new contract growth.
Fitch expects these margin drivers to be sustainable, with EBITDA
likely to rebound sufficiently for TMH to refinance its term loans
in 2026. Top line growth remains essential of course, and Fitch
expects at least 4%-6% growth in 2024-2025, following 10% growth in
2023.
Deleveraging Likely Ahead, But Risks Remain: TMH concluded 2023
with Fitch-defined EBITDA leverage just over 12.0x (just under
10.0x as reported), well within outlier territory. However, with
revenue growth benefitting from share gains and EBITDA margins
poised to recover (as detailed above), Fitch's rating case forecast
calls for significant deleveraging driven by EBITDA growth, with
leverage declining below 9.0x by YE 2024, below 8.0x by YE 2025,
below 7.5x by YE 2026 and below 7.0x by YE 2027. Management is
motivated to deleverage its balance sheet as well.
While its July 2024 financings eliminate risk of a payment default
in 2024, TMH still faces similar risks further out, as by 4Q26 it
must repay at least $0.9 billion of its $1.4 billion S+525 Term
Loan B due March 2027 to stave off further springing maturities.
Derivation Summary
TMH's 'CCC+' Long-Term IDR reflects secular and short-term
headwinds to ED care volume, pricing and labor expenses, which
compressed operating margins and increased leverage to outlier
levels in 2023, just as signs of rebounding revenue and improving
margins began to emerge.
The company's credit profile benefits from solid depth and
competitive scale relative to peers Pediatrix Medical Group, Inc.
and Envision Healthcare in physician staffing service lines,
including emergency medicine and anesthesia. While risk of a
distressed debt exchange or principal payment default remains,
recent liability management transactions have materially mitigated
such risk in the near term.
TMH is rated lower than most of its peers in the broader healthcare
provider sector, including Universal Health Services, Inc.
(BB+/Stable), Tenet Healthcare Corp. (B+/Positive), Prime
Healthcare Services, Inc. (B/Stable), Community Health Systems,
Inc. (CCC+) and WDT Acquisition Corp. (B-/Stable), which have more
diversified service offerings, lower leverage and comparable to
superior liquidity positions.
Key Assumptions
Ratings Case:
- Revenue increases to $5.6 billion in 2024 (+6% y/y), with growth
moderating thereafter in the range of 2%-4% annually;
- EBITDA margins, including litigation costs and the expense of its
arbitration of out-of-network bills, improve to nearly 6.5% in
2024, expand by 50 bps annually in 2025-2026 and settle in the
7.5%-8.0% range in 2027, reflecting moderating wage pressures.
- No spending on acquisitions and no shareholder distributions;
- Cash flow from operations assumed to rebound to nearly 1.0% of
revenue in 2024, about 2.0% in 2025-2026 and nearly 3.0% in 2027,
reflecting improved EBITDA growth and negligible positive or
negative effects from changes in working capital;
- CapEx of about $35 million-$40 million, consistent with
historical levels;
- FCF just above neutral in 2024, over $75 million in 2025, nearly
$100 million in 2026, and nearly $150 million in 2027;
- Leverage just below 9.0x by YE 2024, just below 8.0x by YE 2025,
just below 7.5x by YE 2026 and just below 7.0x by YE 2027; and
- Voluntary debt repayment using $100 million to repay first lien
term loans upon refinancing shortly before maturity.
Recovery Analysis
Instrument Notching & Recovery Analysis: In assigning instrument
ratings through a bespoke analysis that considers recoveries given
default, Fitch estimates an enterprise value (EV) on a going
concern basis of $2.240 billion for TMH based on assumed
post-reorganization going-concern (GC) EBITDA of $320 million and a
7.0x multiple. The $320 million GC EBITDA figure is unchanged from
the last committee and does not assume TMH could realize material
improvements to EBITDA through protections afforded through the
bankruptcy process.
The 7.0x multiple used for TMH reflects a stressed multiple versus
the multiple of approximately 11.0x that Blackstone paid for TMH in
2017. Fitch also notes that KKR paid about 10.0x EBITDA for
staffing industry peer Envision Healthcare. This 7.0x multiple is
also closely aligned with historical observations of healthcare
industry bankruptcy emergence multiples. In a recent study, Fitch
determined that the historical median exit multiple for healthcare
and pharmaceutical industry bankruptcies was about 6.3x.
Fitch's recovery analysis also assumes that the $510 million A/R
facility is fully drawn (vs. $475 million last reported) given its
significant overcollateralization and given its expectation that
margin compression is far more likely than material revenue
declines to be the driver of a bankruptcy scenario and, as such,
declines in receivables are not a likely scenario in its view.
Fitch assumes the A/R facility is 125% overcollateralized under
Fitch criteria, with $638 million thus deducted from the $2.240
billion EV, leaving $1.602 billion, which is then further reduced
by 10% to account for administrative claims in bankruptcy, leaving
$1.442 billion in adjusted EV.
From the adjusted EV above, Fitch deducts the value of certain
collateral outside the restricted group but subject to a first lien
in favor of the first-lien revolver, first lien notes and second
lien notes only. This includes an estimate of the residual value of
the unrestricted receivables subsidiaries of more than $350 million
and an estimate of the value of the unrestricted HCFS subsidiary of
less than $200 million (value estimated by applying its pro rata
share of forecasted 2024 EBITDA to adjusted EV net of A/R
collateral).
In allocating on a pro rata basis the remaining shared EV of about
$900 million from TMH's restricted subsidiaries, the claim values
of the first lien bonds ($1.1 billion as of 6/30/2024) and the $250
million first lien revolver (assumed fully drawn) are reduced by
their recoveries from the HCFS collateral and the residual equity
in the A/R facility receivables collateral, both from unrestricted
subsidiaries.
Fitch thus calculates pro rata recoveries from TMH's restricted
subsidiaries using assumed claim amounts of about $150 million for
the first lien revolver, about $650 million for the first lien
bonds, nearly $1.4 billion for the first lien term loans and about
$150 million for the second lien bonds.
The first-lien notes and the first lien revolver both recover in
the 51%-70% range and receive 'RR3' recovery ratings, the
first-lien term loan recovers in the 31%-50% range and receives a
'RR4' recovery rating, and the second-lien bonds realize no
recovery and receive a 'RR6' recovery rating.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Refinancing at least $0.9 billion of its $1.4 billion S+525 1L
Senior Secured Term Loan due March 2027, provided such refinancing
would not constitute a distressed debt exchange, as defined by
Fitch;
- Successful measures taken that nullify the springing maturities
in the secured debt agreements; and
- Significant improvement in operating margins and reductions in
Fitch-defined EBITDA leverage.
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Failure to refinance at least $0.9 billion of its $1.4 billion
S+525 1L Senior Secured Term Loan due March 2027 on terms that
would not constitute a distressed debt exchange, as defined by
Fitch;
- Announcement of transactions comprising a distressed debt
exchange, as defined by Fitch;
- Failure to take steps that nullify the springing maturities in
the secured debt agreements; and
- Failure to pay interest and debt principal when due.
Liquidity and Debt Structure
Sufficient Near-Term Liquidity: Liquidity was $380 million at March
31, 2024, with $35 million available under its $510 million A/R
facility, $239 million available under its undrawn $250 million
revolver and $106 million in cash on hand (pro forma for a $25
million commitment reduction in July 2024 and estimated fees paid
on the July 2024 financing transactions). There is no debt maturing
in 2024 or 2025 (only scheduled term loan amortization), and
Fitch's ratings case forecast calls for FCF to be modestly positive
in 2024 and about 1.5%-2.5% of revenue in 2025-2027.
Springing Maturities Addressed for the Near Term: The liability
management transactions completed by TMH in July 2024, most notably
including the redemption of all $714 million of senior notes due
February 2025, eliminated the worst-case risk of the company's
other debt maturities springing ahead into November 2024. While
clearly a material credit positive from a liquidity perspective,
TMH must still pay down its term loan due March 2027 to $0.5
billion by November 2026 from $1.4 billion today, absent which its
revolver and secured note maturities will spring forward and then
become due.
If TMH tracks toward deleveraging to 7.3x by YE 2026 as Fitch
forecasts, or delevers still further, the likelihood of avoiding
this deferred existential "springing maturity" threat should
improve measurably.
Increased Capital Structure Complexity: TMH's first lien term loan
lenders were subordinated by the debt financing transactions TMH
completed in 4Q23. These include a new accounts receivable facility
agreement taking a first lien on the receivables, a new revolving
credit facility new first lien bondholders taking a senior claim on
the residual value of the receivables and a senior claim on the
assets of the newly-unrestricted HCFS subsidiaries, partially
priming the first lien term loan lenders.
With the July 2024 financing transactions, another $335 million of
first lien bonds and a new $145 million second lien bond now also
have a claim on the HCFS subsidiaries collateral.
Issuer Profile
TMH is an outsourced physician staffing company providing over
14,000 physicians, physician assistants, nurse practitioners and
nurses to over 2,500 U.S. hospitals, clinics and post-acute
facilities across 48 states.
ESG Considerations
TMH has an ESG Relevance Score of '4' for Exposure to Social
Impacts due to societal and regulatory pressures to contain growth
in health care spending in the U.S. This dynamic has a negative
impact on the credit profile and is relevant to the rating in
conjunction with other factors.
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Recovery Prior
----------- ------ -------- -----
Team Health
Holdings, Inc. LT IDR CCC+ Upgrade CCC-
senior secured LT CCC+ Upgrade RR4 CCC-
TERRAFORM LABS: US Trustee Wants Singapore Lawsuit Deal Blocked
---------------------------------------------------------------
Emlyn Cameron of Law360 Bankruptcy Authority reports that the U.S.
Trustee's Office asked a Delaware bankruptcy judge to reject
cryptocurrency firm Terraform Labs PTE Ltd.'s settlement with
claimants in a $57 million Singaporean lawsuit.
About Terraform Labs
Terraform Labs Pte. Ltd. -- https://www.terra.money -- is a startup
that created Terra, a blockchain protocol and payment platform used
for algorithmic stablecoins. It was co-founded by Do Kwon and
Daniel Shin in 2018 in Seoul, South Korea.
Terraform Labs introduced its first cryptocurrency token, TerraUSD,
in 2019. Investment firms like Arrington Capital, Coinbase
Ventures, Galaxy Digital, and Lightspeed Venture Partners helped
Terraform Labs raise more than $200 million.
The collapse of the stablecoins TerraUSD (UST) and Luna in May 2022
caused the temporary suspension of the Terra network, wiping out
over $45 billion in market capitalization in a single week.
Both of Terra Form Labs' founders have encountered legal problems
as a result of the devaluation of the company's currency. In
September 2022, South Korean prosecutors filed a warrant for Do
Kwon's arrest. He was also added to Interpol's Red Notice list,
which urges other law enforcement to find and detain him.
Terraform Labs Pte. Ltd. sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Del. Case No. 24-10070) on Jan. 22,
2024. In the petition filed by Chris Amani, as chief executive
officer, the Debtor estimated assets and liabilities between $100
million and $500 million each.
The Debtor is represented by:
Zachary I Shapiro, Esq.
Richards, Layton & Finger, P.A.
1 Wallich Street
#37-01
Guoco Tower 078881
THE KENNEYS: SAK Healthcare Appointed as Receiver
-------------------------------------------------
West Seattle Blog reports that The Kenneys, the oldest
senior-living complex in West Seattle, was placed into receivership
July 29 in an attempt to improve its financial status. Court
filings revealed that the complex owed more than $13 million and
that vendors had not been paid. The receiver named by the court is
SAK West Seattle, a division of SAK Healthcare, a consulting
business that has been in charge of The Kenney since 2023 and
specializes in "turnaround" for distressed healthcare institutions.
Illinois-based SAK's CEO Suzanne Koenig told West Seattle Blog over
the phone that her mission is to return the institution to "the old
Kenney that it used to be . . . its former splendor." Koenig
pointed out that even if the court has granted them the right to
sell the company, a sale is not a guaranteed result of
receivership.
According to West Seattle Blog, Koenig vowed the facility would
"improve at all levels," adding the facility requires remodeling of
some rooms, repair of elevators and the HVAC system. She said The
Kenney will also get "all-new programming," including programming
for memory-care residents, which she said hadn't been provided
previously.
The Kenney is the oldest senior-living complex in West Seattle.
TRANSOCEAN LTD: Lands $531MM Ultra-Deepwater Drillship Contract
---------------------------------------------------------------
Transocean Ltd. announced on July 31, 2024, a 1,095-day contract
for the Deepwater Invictus with bp in the U.S. Gulf of Mexico.
The program is expected to commence in the first quarter of 2025
and is estimated to contribute approximately $531 million in
backlog, excluding additional services and a mobilization fee.
About Transocean
Transocean Ltd. is an international provider of offshore contract
drilling services for oil and gas wells. The Company specializes in
technically demanding sectors of the offshore drilling business,
with a particular focus on ultra-deepwater and harsh environment
drilling services. As of Feb. 14, 2024, the Company owned or had
partial ownership interests in and operated 37 mobile offshore
drilling units, consisting of 28 ultra-deepwater floaters and nine
harsh environment floaters. Additionally, as of Feb. 14, 2024, the
Company was constructing one ultra-deepwater drillship.
Transocean reported a net loss of $954 million in 2023, a net loss
of $621 million in 2022, and a net loss of $591 million in 2021. As
of Dec. 31, 2023, the Company had $20.25 billion in total assets,
$1.39 billion in total current liabilities, $8.44 billion in total
long-term liabilities, and $10.42 billion in total equity.
* * *
As reported by the TCR on Sept. 28, 2023, S&P Global Ratings raised
its issuer credit rating on offshore drilling contractor Transocean
Ltd. to 'CCC+' from 'CCC'. S&P said, "The upgrade reflects improved
rig demand, higher day rates, and our view that there is reduced
near-term risk of a distressed debt exchange or balance sheet
restructuring."
TRANSOCEAN LTD: Reports $123MM Net Loss in Fiscal Q2
----------------------------------------------------
Transocean Ltd. announced on July 31, 2024, its second quarter 2024
results.
According to the Company, it reported a net loss attributable to
controlling interest of $123 million, $0.15 per diluted share, for
the three months ended June 30, 2024.
Contract drilling revenues for the three months ended June 30,
2024, increased sequentially by $98 million to $861 million,
primarily due to increased rig utilization and higher revenue
efficiency across the fleet. This was partially offset by lower
reimbursable revenue and lower revenues resulting from the sale of
Paul B. Loyd, Jr.
Operating and maintenance expense was $534 million, compared with
$523 million in the prior quarter. The sequential increase was
primarily due to rigs returning to work after undergoing contract
preparation in the first quarter and increased costs associated
with the early retirement of certain personnel. This was partially
offset by lower reimbursed expenses and lower operating costs
resulting from the sale of Paul B. Loyd, Jr.
General and administrative expense was $59 million, up from $52
million in the first quarter. The increase was primarily due to
costs associated with the early retirement of certain personnel and
professional fees.
After consideration of the favorable adjustment of $69 million and
$10 million in the second and first quarter, respectively, for the
fair value of the bifurcated exchange feature related to the 4.625%
exchangeable bonds, interest expense net of capitalized amounts was
$143 million, compared to $127 million in the prior quarter.
Interest income was $14 million, compared to $15 million in the
previous quarter.
The Effective Tax Rate(2) was 474.5%, up from 206.0% in the prior
quarter. The increase was primarily due to increased income before
tax. The Effective Tax Rate excluding discrete items was 416.3%
compared to 76.9% in the previous quarter.
Cash provided by operating activities was $133 million during the
second quarter of 2024, representing an increase of $219 million
compared to $86 million cash used in operating activities in the
prior quarter. The sequential increase was primarily due to timing
of interest payments, decreased payments for payroll-related costs
and increased cash collected from customers.
Second quarter 2024 capital expenditures of $84 million were
primarily associated with the newbuild ultra-deepwater drillship
Deepwater Aquila. This compares with $83 million in the prior
quarter.
"The entire Transocean team executed well in the second quarter,
delivering strong uptime performance for our customers, which drove
revenue efficiency to 97% and produced 33% Adjusted EBITDA
margins," said Chief Executive Officer, Jeremy Thigpen. "In
addition, the team recently secured a number of meaningful
contracts, which are illustrative of current industry dynamics and
reinforce our view that we are in an increasingly tightening
market. Of these contracts, we are especially excited to continue
20K operations with Beacon in the U.S. Gulf of Mexico."
Thigpen concluded, "As we continue to secure work for our fleet,
our focus remains on optimizing our portfolio of assets to maximize
EBITDA and generate free cash flows, which we can use to de-lever
the balance sheet."
A full-text copy of the Company's report filed on Form 8-K with the
Securities and Exchange Commission is available at:
https://tinyurl.com/yc5k32e2
About Transocean
Transocean Ltd. is an international provider of offshore contract
drilling services for oil and gas wells. The Company specializes in
technically demanding sectors of the offshore drilling business,
with a particular focus on ultra-deepwater and harsh environment
drilling services. As of Feb. 14, 2024, the Company owned or had
partial ownership interests in and operated 37 mobile offshore
drilling units, consisting of 28 ultra-deepwater floaters and nine
harsh environment floaters. Additionally, as of Feb. 14, 2024, the
Company was constructing one ultra-deepwater drillship.
Transocean reported a net loss of $954 million in 2023, a net loss
of $621 million in 2022, and a net loss of $591 million in 2021. As
of Dec. 31, 2023, the Company had $20.25 billion in total assets,
$1.39 billion in total current liabilities, $8.44 billion in total
long-term liabilities, and $10.42 billion in total equity.
* * *
As reported by the TCR on Sept. 28, 2023, S&P Global Ratings raised
its issuer credit rating on offshore drilling contractor Transocean
Ltd. to 'CCC+' from 'CCC'. S&P said, "The upgrade reflects improved
rig demand, higher day rates, and our view that there is reduced
near-term risk of a distressed debt exchange or balance sheet
restructuring."
TRINITY PLACE: Moves to OTC Markets Following NYSE Delisting
------------------------------------------------------------
Trinity Place Holdings Inc. disclosed in a Form 8-K Report filed
with the U.S. Securities and Exchange Commission that on July 30,
2024, the Company received notice from the NYSE Regulation that it
had suspended trading of the Company's common stock and determined
to commence proceedings to delist the Company's common stock from
the NYSE American as a result of its determination that the Company
is no longer suitable for listing pursuant to Section 1003(f)(v) of
the NYSE American Company Guide due to the low selling price of the
Company's common stock.
The Company has a right to a review of the staff's determination to
delist the Company's common stock by the Listings Qualifications
Panel of the Committee for Review of the Board of Directors of the
NYSE American. The Company may request a review of the staff's
determination and appeal this determination, however, there can be
no assurance that the appeal will be successful. The NYSE will
apply to the Securities and Exchange Commission to delist the
Company's common stock pending completion of applicable procedures,
including any appeal by the Company of the staff's determination.
The Company's common stock is expected to trade under its current
trading symbol "TPHS" on the OTC Pink Market operated on the OTC
Markets system. The Company intends to apply to have its common
stock quoted on the OTCQB Venture Market on the OTC Markets;
however, there can be no assurances that its common stock will be
approved, or will continue, to be traded on such market.
About Trinity Place
Trinity Place Holdings Inc. is a real estate holding, investment,
development, and asset management company. On Feb. 14, 2024, the
Company's real estate assets and related liabilities were
contributed to TPHGreenwich Holdings LLC, which is owned 95% by the
Company, with an affiliate of the lender under the Company's
corporate credit facility owning a 5% interest in, and acting as
manager of, such entity. These real estate assets include (i) the
property located at 77 Greenwich Street in Lower Manhattan, which
is substantially complete as a mixed-use project consisting of a
90-unit residential condominium tower, retail space, and a New York
City elementary school, (ii) a 105-unit, 12-story multi-family
property located at 237 11th Street in Brooklyn, New York, and
(iii) a property occupied by retail tenants in Paramus, New
Jersey.
Trinity Place reported a net loss attributable to common
stockholders of $39.02 million in 2023, a net loss attributable to
common stockholders of $20.69 million in 2022, and a net loss
attributable to common stockholders of $20.80 million in 2021. As
of March 31, 2024, the Company had $6.16 million in total assets,
$3.51 million in total liabilities, and $2.66 million in total
stockholders' equity. As of Dec. 31, 2023, the Company had $267.51
million in total assets, $277.56 million in total liabilities, and
$10.05 million in total stockholders' deficit.
On Jan. 4, 2024, the Company was notified by the NYSE American that
it had determined that the Company's securities had been selling
for a low price per share for a substantial period of time and,
pursuant to Section 1003(f)(v) of the Guide, the Company's
continued listing was predicated on it effecting a reverse stock
split of its shares of common stock or otherwise demonstrating
sustained price improvement by no later than July 4, 2024. The
notice stated that, as a result of the foregoing, the Company had
become subject to the procedures and requirements of Section 1009
of the Guide, which could, among other things, result in the
initiation of delisting proceedings unless the Company cures the
deficiency in a timely manner. The NYSE American could also take
accelerated delisting action if the common stock trades at levels
viewed to be abnormally low. On Feb. 21, 2024, the NYSE American
notified the Company that it had reviewed the Plan that the Company
submitted to the NYSE American and determined to accept the Plan
and grant a cure period through May 29, 2025. As a result of the
acceptance of the Company's Plan, the Company's listing is being
continued pursuant to an extension. The NYSE American will review
the Company periodically for compliance with the initiatives
outlined in the Plan. If the Company is not in compliance with the
continued listing standards by May 29, 2025, or if the Company does
not make progress consistent with the Plan during the cure period,
the NYSE American staff will initiate delisting proceedings as
appropriate.
URBAN ONE: Moody's Affirms 'B3' CFR & Alters Outlook to Negative
----------------------------------------------------------------
Moody's Ratings affirmed Urban One, Inc.'s B3 Corporate Family
Rating, B3-PD Probability of Default Rating liquidity (SGL) rating
was downgraded to SGL-2 from SGL-1. The outlook was changed to
negative from stable.
The change in outlook to negative reflects Urban One's operating
weakness driven by subscriber losses within the cable TV division
and slowing radio advertising demand due to persistent negative
secular pressures associated with advertising dollars shifting to
digital advertising. There is limited visibility into the pace of
future subscriber losses and whether radio advertising demand will
stabilize. Urban One's adjusted financial leverage increased to
6.3x (6.8x excluding Moody's standard lease adjustments) in the LTM
period ending March 2024. Moody's expect leverage to decrease to
high-5x (low-6x excluding leases) in the next 12-18 months driven
by voluntary debt repayments.
RATINGS RATIONALE
Urban One's B3 CFR reflects elevated leverage, revenue
concentration in a few markets, and secular pressures in the cable
TV and radio broadcast segments. Moody's adjusted financial
leverage increased to 6.3x (6.8x excluding Moody's standard lease
adjustments) in the LTM period ending March 2024 mostly due to
lower political advertising revenue in 2023 and decline in results
in the cable TV division. The cable TV segment is supported by
carriage fees from cable and satellite companies, but it faces
challenges from the transition of media consumption to video
streaming services which has led to subscriber losses. TV One
subscribers decreased to 40.7 million (-13.2% YoY, -5.1% QoQ) while
those of Cleo TV, focused on lifestyle and entertainment, declined
to 38.5 million (-9.3% YoY, -7.0% QoQ).
In 2024, Moody's project a decline in revenue in the low single
digits, while EBITDA is expected to decrease in the low teens. The
benefit of political advertising dollars will be offset by the
ongoing churn of cable TV subscribers and additional expenses
related to the Houston radio stations acquired in August 2023. As
the company's efforts to buyback debt in the open market continues,
financial leverage is projected to decrease to high-5x (low-6x
excluding leases) in 2024.
Urban One benefits from diversified operations in radio, cable TV,
syndicated programming, and digital media that primarily targets
African American and urban consumers. Over the past several years,
Urban One has diversified operations through investments in Reach
Media, digital services, and TV One, completing the company's
transition from a pure play radio operator to a more diversified
media company. Performance will receive support from advertiser
interest in reaching Urban One's core customer base.
Urban One's SGL-2 rating reflects good liquidity with a cash
balance of approximately $156 million as of Q1 2024, access to an
undrawn $50 million ABL facility due 2026 (not rated by Moody's)
and Moody's expectation for $30-$40 million in free cash flow in
2024. After a proposed casino project in Richmond, Virginia did not
receive approval by voters, the company now plans to keep the $80
million initially set aside for equity investment on the balance
sheet and direct a portion of excess cash for debt repayment. The
company reduced outstanding senior secured notes by $75 million in
Q1 2024 ($25 million in 2023). As a result, annual interest expense
is expected to decrease to $49 million in 2024 from $56 million in
2023. Moody's expect this trend of debt reduction to continue in
the next 12-18 months.
Urban One's senior secured notes due 2028 are not subject to
financial covenants, but the ABL facility is subject to a fixed
charge coverage test. The company complied with the requirement
with sufficient headroom in Q1 2024.
Urban One's 2023 and Q1 2024 audited financial statements were not
released until June 7, 2024. The company entered into waiver and
amendments related to failing to deliver financials required under
the ABL facility. The company has stated that it expects to report
Q2 2024 quarterly financials in a timely manner.
The B3 rating assigned to the senior secured notes is in line with
the B3 CFR as it represents the vast majority of outstanding debt.
The asset-based lending facility (not rated by Moody's) ranks
senior to the secured debt for collateral that supports its
borrowing base. The secured notes receive guarantees from
significant subsidiaries of Urban One, including TV One, Reach
Media, Inc. (90% ownership) and Interactive One.
Urban One's ESG Credit Impact Score of CIS-4 mainly reflects
demographic and societal trends that are negatively pressuring the
company's radio and cable operations. The company has historically
pursued additional acquisitions and investments that could
potentially pressure leverage levels. The company is expected to
focus on voluntary debt repayment utilizing a portion of excess
cash flow.
The negative outlook reflects Moody's view that weak operating
performance may persist resulting in continuing subscriber churn in
the cable TV segment and weak radio advertising demand. While
Moody's anticipate that the company will continue to voluntarily
pay down debt, there is significant uncertainty regarding the
company's ability to stabilize revenue and profitability. Moody's
do not expect cash balance to be directed towards large
acquisitions in the near term.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Urban One's ratings could be upgraded if Moody's expect adjusted
debt-to-EBITDA (excluding lease adjustments) to be sustained below
5.0x, with positive organic growth in the radio and cable network
operations. A good liquidity position, including a mid-single digit
percentage free cash flow-to-debt ratio would also be required.
Urban One's ratings could be downgraded if revenue declines persist
or profitability remains weak due to declining subscriber trends
and weak advertising demand. Adjusted debt-to-EBITDA (excluding
lease adjustments) that is expected to be sustained above 6.0x or
weakening liquidity could also lead to a downgrade.
Urban One, Inc., formerly known as Radio One, Inc., is an urban
oriented multi-media company that operates or owns interests in
radio broadcasting stations generated by 72 stations in 13 markets,
cable television networks, a 90% ownership in Reach Media, and
ownership of Interactive One, its digital platform, as well as
other internet-based properties, largely targeting an
African-American and urban audience. The company reported
consolidated revenue of $472 million as of LTM Q1 2024.
The principal methodology used in these ratings was Media published
in June 2021.
UXIN LTD: Incurs RMB369.54 Million Net Loss in FY Ended March 31
----------------------------------------------------------------
Uxin Limited filed with the Securities and Exchange Commission its
Annual Report on Form 20-F disclosing a net loss of RMB369.54
million on RMB1.37 billion of total revenues for the year ended
March 31, 2024, compared to a net loss of RMB137.17 million on
RMB2.06 billion of total revenues for the year ended March 31,
2023.
As of March 31, 2024, the Company had RMB2.09 billion in total
assets, RMB2.23 billion in total liabilities, RMB149.99 million in
total mezzanine equity, and a total shareholders' deficit of
RMB293.08 million.
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
July 31, 2024, citing that the Company has incurred net losses
since inception and, as of March 31, 2024, had an accumulated
deficit and net current liability and the Company incurred
operating cash outflow during the fiscal year ended March 31, 2024.
These events and conditions raise substantial doubt about its
ability to continue as a going concern.
Management Comments
Mr. Feng Lin, chief financial officer of Uxin, stated, "Despite the
traditional slow season for used car sales in China due to the
Chinese New Year holiday, we continued to deliver solid results in
the quarter, with retail transaction volume reaching 3,124 units,
representing a 38% year-over-year increase. Additionally, the
improvement in vehicle turnover and the increased penetration of
value-added services significantly enhanced our profitability. As
a result, our gross profit margin in the quarter was 6.6%, an
improvement of 1.8 percentage points from the previous quarter."
Mr. Lin added, "For the full fiscal year of 2024, we achieved a
retail transaction volume of 10,179 units, and narrowed our
Adjusted EBITDA loss by RMB104 million compared to the previous
fiscal year to RMB176 million. We have started to expand our
inventory levels, and we expect retail sales to continue growing in
the coming quarters. Looking ahead to fiscal year 2025, we
anticipate a year-over-year retail transaction volume growth by
150% with a further reduction in fixed costs by over RMB100 million
year-over-year. We are fully committed to achieving company-wide
Adjusted EBITDA profitability starting from the third quarter of
the fiscal year."
A full-text copy of the Form 20-F is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/0001729173/000149315224029702/form20-f.htm
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.
VALERIE V. GUNKOVA: Court Grants Kamin's Motion for Sanctions
-------------------------------------------------------------
The Honorable Brian F. Kenney of the United States Bankruptcy Court
for the Eastern District of Virginia will grant the Motion for
Sanctions for Spoliation of Evidence filed by Harry Kamin in an
adversary proceeding against Valerie V. Gunkova.
Ms. Gunkova is an individual residing in Loudoun County, Virginia.
She has a degree in business administration from a university in
Russia, and a master's degree from a university in the United
States. She is a 50% member in BNG Group, LLC, which owns an office
building in Loudoun County, Virginia. The other 50% member of BNG
is Mr. Kamin.
Ms. Gunkova was the manager for BNG until the appointment of a
Chief Restructuring Officer for BNG. She also owns 100% of Skin
Logic, which operates a spa under the name Aria in the BNG
building. Skin Logic filed a Voluntary Petition under Subchapter V
(Bankr. E.D. Va. Case No. 23-11352-KHK) on August 24, 2023. Stephen
A. Metz was appointed as the Subchapter V Trustee.
Mr. Kamin alleges that BNG purchased the property for $9,500,000 in
October 2020, with a mortgage from Atlantic Union Bank. He alleges
that he "ultimately loaned more than two million dollars to BNG to
accomplish the purchase of the Building."
On February 10, 2021, Mr. Kamin's counsel sent a letter to Ms.
Gunkova, demanding the production of certain documents related to
BNG's business, and threatening to take legal action, including
injunctive relief, dissociation of Ms. Gunkova as a member of BNG,
and/or the judicial dissolution of BNG.
In March 2021, Mr. Kamin filed a lawsuit against Ms. Gunkova in the
Circuit Court of Loudoun County, Virginia. The lawsuit sought
relief, both personally and derivatively, on behalf of BNG.
On September 9, 2022, after a series of discovery skirmishes, Mr.
Kamin filed a Motion for Sanctions and to Compel Inspection of
Electronic Devices for Forensic Analysis.
Mr. Kamin's counsel engaged Christopher Racich of Vestigant, LLC,
as his forensic expert in the case.
On October 25, 2022, the Circuit Court entered an Order compelling
Ms. Gunkova to identify "all electronic devices and cloud services
containing and/or used to conduct business on behalf of BNG Group,
LLC," and to make such devices available for a forensic
examination. Ultimately, Ms. Gunkova turned over a total of 34
devices, which Vestigant forensically imaged at BNG's offices.
As a result of the use of CCleaner, a large volume of data was
rendered unreviewable and unrecoverable. Mr. Racich testified that
approximately 122,000 files are "gone," and can never be recovered.
The number of pages that were rendered unreviewable (designated as
"Zzzzz") amounted to 1,857 pages.
The Plaintiff filed a Motion for Sanctions in the Circuit Court.
The Motion for Sanctions was stayed by the filing of Ms. Gunkova's
bankruptcy case.
On October 30, 2023, Mr. Kamin timely filed his Complaint to
Determine the Dischargeability of Debts in this adversary
proceeding. Case No. 23-01062-BFK. The Complaint contains the
following two Counts: (a) Count One - Denial of Dischargeability
Pursuant to 11 U.S.C. Sec. 523(a)(2) – Fraud; and (b) Count Two
– Denial of Dischargeability Pursuant to 11 U.S.C. Sec. 523(a)(6)
– Willful and Malicious Injury.
Ms. Gunkova filed an Answer, generally denying the Complaint's
allegations.
The Court held an evidentiary hearing on June 18, 2024, and June
24, 2024.
Due to the egregiousness of the Defendant's conduct in deleting and
destroying potentially relevant evidence, the Court will grant the
most severe form of sanction -- a default judgment on
non-dischargeability. The Court will declare the debts owed to the
Plaintiff, if any, to be non-dischargeable pursuant to Section
523(a)(2)(A) and 523(a)(6). 11 U.S.C. Sec. 523(a)(2)(A) and
523(a)(6).
The Court further will grant the Plaintiff relief from the
automatic stay, sua sponte, for the Plaintiff to return to the
State Court to obtain a judgment, if any, against the Defendant. If
the Plaintiff is successful in State Court, he may execute on
whatever assets that: (a) are not exempt under applicable
non-bankruptcy law; and (b) are not property of the bankruptcy
estate.
Alternatively, the Court will abstain from hearing this adversary
proceeding pursuant to 28 U.S.C. Sec. 1334(c)(1).
A copy of the Court's decision dated July 25, 2024, is available at
https://urlcurt.com/u?l=doIucD
Valerie V. Gunkova filed for Chapter 11 bankruptcy protection
(Bankr. E.D. Va. Case No. 23-11261) on August 3, 2023, listing
under $1 million in both assets and liabilities. The Debtor is
represented by Jeffery Martin, Esq.
VBI VACCINES: Chapter 15 Case Summary
-------------------------------------
Four affiliates that concurrently filed voluntary petitions for
relief under Chapter 15 of the Bankruptcy Code:
Debtor Case No.
------ --------
VBI Vaccines (Delaware) Inc. (Lead Case) 24-11623
160 Second Street, Floor 3
Cambridge, MA 02142
United States
VBI Vaccines Inc. 24-11625
VBI Vaccines B.V. 24-11626
Variation Biotechnologies (US) Inc 24-11627
Business Description: VBI Vaccines is a biopharmaceutical
company driven by immunology in the
pursuit of powerful prevention and
treatment of disease. Through its
innovative approach to virus-like
particles ("VLPs"), including a
proprietary enveloped VLP ("eVLP")
platform technology and a proprietary
mRNA-launched eVLP ("MLE") platform
technology, VBI develops vaccine
candidates that mimic the natural
presentation of viruses, designed to
elicit the innate power of the human
immune system. VBI is committed to
targeting and overcoming significant
infectious diseases, including hepatitis
B, coronaviruses, and cytomegalovirus
(CMV), as well as aggressive cancers
including glioblastoma (GBM). VBI is
headquartered in Cambridge,
Massachusetts, with research operations
in Ottawa, Canada, and a research and
manufacturing site in Rehovot, Israel.
Chapter 15 Petition Date: July 30, 2024
Court: United States Bankruptcy Court
District of Delaware
Judge:
Foreign Proceeding: Proceeding under the Companies'
Creditors Arrangement Act, pending
before the Superior Court, Commercial
Division, in and for the Judicial
District of Toronto, Canada (Court
File No. CV-24-00724693-00CL)
Foreign Representative: VBI Vaccines (Delaware) Inc.
c/o Strikeman Elliott LLP
1155 Rene-Levesque Blvd. West,
41st Floor
Montreal, Quebec H38 3V2
Canada
Foreign
Representative's
Counsel: Derek C. Abbott, Esq.
Tamara K. Mann, Esq.
MORRIS, NICHOLS, ARSHT & TUNNELL LLP
1201 N. Market St., 16th Floor
Wilmington, DE 19801
Tel: (302) 658-9200
Fax: (302) 658-3989
Email: dabbott@morrisnichols.com
tmann@morrisnichols.com
- and -
Arsalan Muhammad, Esq.
HAYNES AND BOONE, LLP
1221 McKinney, Suite 4000
Houston, TX 77010
Tel: (713) 547-2000
Fax: (713) 547-2600
Email:
arsalan.muhammad@haynesboone.com
Estimated Assets: Unknown
Estimated Debt: Unknown
A full-text copy of Lead Debtor's Chapter 15 petition is available
for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/VUXVEZY/VBI_Vaccines_Delaware_Inc_and__debke-24-11623__0001.0.pdf?mcid=tGE4TAMA
VBI VACCINES: Court Grants Chap. 15 Relief, Faces Nasdaq Delisting
------------------------------------------------------------------
VBI Vaccines Inc. provided an update on the restructuring
proceedings announced on July 30, 2024.
On August 2, 2024, the United States Bankruptcy Court for the
District of Delaware granted provisional relief under Chapter 15 of
the U.S. Bankruptcy Code and scheduled a further hearing to
consider the recognition of the July 30, 2024, Ontario Superior
Court of Justice (Commercial List) order, which granted the company
protection under the Companies' Creditors Arrangement Act, R.S.C.
1985, c. C-36, as amended.
NASDAQ Listing
On July 30, 2024, the Company received a letter from the listing
qualifications department staff of the Nasdaq Stock Market LLC
notifying the Company that its common shares will be delisted from
Nasdaq effective as of opening of business on August 8, 2024. The
Company does not intend to appeal the delisting determination.
Stikeman Elliott LLP, Haynes and Boone, LLP, Morris, Nicols, Arsht
& Tunnell LLP, and Pearl Cohen Zedek Latzer Baratz are acting as
legal advisors to VBI. As previously announced, Ernst & Young Inc.
has been appointed as Monitor in the CCAA proceedings and the
proposed sale and investment solicitation process.
Additional information regarding the CCAA proceeding can be found
on the Monitor's website here, or by contacting the Monitor at
vbi.monitor@ca.ey.com or 1-888-338-1764. Additional information
regarding the Chapter 15 Case can be found here.
About VBI Vaccines
VBI Vaccines Inc. -- www.vbivaccines.com -- is a biopharmaceutical
company driven by immunology in the pursuit of powerful prevention
and treatment of disease. Through its innovative approach to
virus-like particles including a proprietary enveloped VLP platform
technology and a proprietary mRNA-launched eVLP platform
technology, VBI develops vaccine candidates that mimic the natural
presentation of viruses, designed to elicit the innate power of the
human immune system. VBI is committed to targeting and overcoming
significant infectious diseases, including hepatitis B,
coronaviruses, and cytomegalovirus (CMV), as well as aggressive
cancers including glioblastoma (GBM). VBI is headquartered in
Cambridge, Massachusetts, with research operations in Ottawa,
Canada, and a research and manufacturing site in Rehovot, Israel.
Iselin, New Jersey-based EisnerAmper LLP, the Company's auditor
since 2016, issued a "going concern" qualification in its report
dated April 16, 2024, citing that the Company faces several risks,
including but not limited to, uncertainties regarding the success
of the development and commercialization of its products, demand
and market acceptance of the Company's products, and reliance on
major customers. The Company anticipates that it will continue to
incur significant operating costs and losses in connection with the
development and commercialization of its products. The Company has
an accumulated deficit as of December 31, 2023 and cash outflows
from operating activities for the year-ended December 31, 2023 and,
as such, will require significant additional funds to conduct
clinical and non-clinical trials, commercially launch its products,
and achieve regulatory approvals that raise substantial doubt about
its ability to continue as a going concern.
VBI VACCINES: Initiates Restructuring Proceedings Under CCAA
------------------------------------------------------------
VBI Vaccines Inc. on July 30, announced that the Ontario Superior
Court of Justice (Commercial List) has issued an initial order
granting the company protection under the Companies' Creditors
Arrangement Act, R.S.C. 1985, c. C-36, as amended. The Initial
Order provides for, among other things:
(i) a stay of proceeding in favour of VBI,
(ii) approval of the DIP Loan, and
(iii) the appointment of Ernst & Young Inc. to serve as monitor in
the Court during the restructuring.
The decision to seek creditor protection was made in the best
interest of its stakeholders after careful evaluation of VBI's
financial situation and all available alternatives following
consultation with its legal and financial advisors. The board of
directors of VBI will remain in place and VBI will remain
responsible for the sale process under the supervision of the CCAA
Court and the general oversight of the Monitor. VBI intends to fund
the CCAA process from cash on hand as well as through the
authorized interim debtor-in-possession financing entered into with
K2 HealthVentures LLC, as the secured creditor and DIP lender.
VBI intends to seek approval of a sale and investment solicitation
process, which, if approved, would allow interested parties to
participate in the process in accordance with the SISP procedure.
VBI intends to use this process to build on the work it undertook
prior to the filing to identify one or multiple purchasers of its
assets on an efficient basis. The SISP, if approved by the CCAA
Court, will be administered by VBI, with the assistance of its
financial advisor and the Monitor, EY. Additional detail relating
to the SISP will be disclosed in due course.
VBI intends to commence a case under Chapter 15 of the United
States Bankruptcy Code to seek recognition and enforcement in the
United States of the CCAA Court's orders, and to commence a case
under the relevant provisions of the Israeli Insolvency and
Economic Rehabilitation Law, 2018, to protect VBI's subsidiaries
and assets located in the United States and Israel, respectively.
The Company has notified Nasdaq of the foregoing and expects its
common shares will cease trading on the Nasdaq Capital Market upon
such date that Nasdaq determines. The Company expects to cease
reporting as a public reporting company.
Stikeman Elliott LLP, Haynes and Boone, LLP, Morris, Nicols, Arsht
& Tunnell LLP, and Pearl Cohen Zedek Latzer Baratz are acting as
legal advisors to VBI. EY is acting as financial advisor to VBI in
connection with the CCAA process and the proposed SISP.
Additional information regarding the CCAA proceeding can be found
on the Monitor's website here, or by contacting the Monitor at
vbi.monitor@ca.ey.com or 1-888-338-1764.
About VBI Vaccines
VBI Vaccines Inc. -- www.vbivaccines.com -- is a biopharmaceutical
company driven by immunology in the pursuit of powerful prevention
and treatment of disease. Through its innovative approach to
virus-like particles including a proprietary enveloped VLP platform
technology and a proprietary mRNA-launched eVLP platform
technology, VBI develops vaccine candidates that mimic the natural
presentation of viruses, designed to elicit the innate power of the
human immune system. VBI is committed to targeting and overcoming
significant infectious diseases, including hepatitis B,
coronaviruses, and cytomegalovirus (CMV), as well as aggressive
cancers including glioblastoma (GBM). VBI is headquartered in
Cambridge, Massachusetts, with research operations in Ottawa,
Canada, and a research and manufacturing site in Rehovot, Israel.
Iselin, New Jersey-based EisnerAmper LLP, the Company's auditor
since 2016, issued a "going concern" qualification in its report
dated April 16, 2024, citing that the Company faces several risks,
including but not limited to, uncertainties regarding the success
of the development and commercialization of its products, demand
and market acceptance of the Company's products, and reliance on
major customers. The Company anticipates that it will continue to
incur significant operating costs and losses in connection with the
development and commercialization of its products. The Company has
an accumulated deficit as of December 31, 2023 and cash outflows
from operating activities for the year-ended December 31, 2023 and,
as such, will require significant additional funds to conduct
clinical and non-clinical trials, commercially launch its products,
and achieve regulatory approvals that raise substantial doubt about
its ability to continue as a going concern.
VERTEX ENERGY: BlackRock Holds 5.4% Equity Stake
------------------------------------------------
BlackRock, Inc. disclosed in Schedule 13D Report filed with the
U.S. Securities and Exchange Commission that as of July 24, 2024,
it beneficially owned 5,245,482 shares of Vertex Energy, Inc.'s
Common Stock, representing 5.4% of the shares outstanding. The
aggregate percentage of shares of Common Stock reported as
beneficially owned by BlackRock was calculated based on 93,514,346
shares of Common Stock issued and outstanding as of May 9, 2024, as
disclosed in the Vertex's Amendment No. 1 to its Quarterly Report
on Form 10-Q/A for the quarterly period ended March 31, 2024, filed
with the U.S. Securities and Exchange Commission on May 17, 2024.
The Common Stock beneficially owned by BlackRock includes Common
Stock beneficially owned by its Advisory Subsidiaries, BlackRock
Financial Management, Inc., BlackRock Investment Management, LLC,
BlackRock Fund Advisors and BlackRock Institutional Trust Company,
National Association.
A full-text copy of BlackRock's SEC Report is available at:
https://tinyurl.com/yc622bk3
About Vertex Energy
Vertex Energy is a leading energy transition company that
specializes in producing both renewable and conventional fuels. The
Company's innovative solutions are designed to enhance the
performance of our customers and partners while also prioritizing
sustainability, safety, and operational excellence. With a
commitment to providing superior products and services, Vertex
Energy is dedicated to shaping the future of the energy industry.
As of March 31, 2024, the Company had $835.1 million in total
assets, $652.1 million in total liabilities, and $183 million in
total equity.
* * *
As reported by the Troubled Company Reporter on Feb. 8, 2024, Fitch
Ratings has downgraded Vertex Energy Inc.'s (Vertex) and Vertex
Refining Alabama LLC's Long-Term Issuer Default Ratings (IDR) to
'CCC+' from 'B-'. Fitch has also downgraded the rating of Vertex
Refining Alabama's senior secured term loan to 'B-'/'RR3' from
'B'/'RR3'.
The downgrade reflects Vertex's weaker liquidity buffer amid lower
U.S. Gulf Coast refining crack spreads and weak Fitch-expected
contribution from the renewable diesel segment in 2024. The
company's free cash flow (FCF) generation is highly sensitive to
refining crack spreads, which declined in 4Q23 from abnormally high
2022-2023 levels. Its unrestricted cash balance fell from $141
million at year-end 2022 to around $70-80 million at year-end 2023.
Fitch projects negative EBITDA and FCF for Vertex in 2024 based on
the assumptions of continued crack spread normalization and weak
renewable diesel profitability.
In June 2024, S&P Global Ratings lowered its issuer credit rating
(ICR) on Vertex Energy Inc. (Vertex) to 'CCC' from 'B-' and its
issue-level rating on the company's term loan B (TLB) to 'CCC' from
'B'. At the same time, S&P Global Ratings removed the ratings from
CreditWatch, where they were placed with negative implications on
March 15, 2024. In addition, S&P revised its assessment of the
company's liquidity position to weak from less than adequate. S&P
also revised its recovery rating on the TLB to '3' from '2',
indicating its expectation for meaningful (50%-70%; rounded
estimate: 60%) recovery.
The negative outlook reflects the elevated risk of a default
scenario given the lack of sufficient liquidity sources to fully
repay the TLB or a concrete refinancing plan.
WHITE CAP: Secured Term Loan Add-on No Impact on Moody's 'B2' CFR
-----------------------------------------------------------------
Moody's Ratings said that White Cap Supply Holdings, LLC's (White
Cap) B2 corporate family rating and B2-PD probability of default
rating are not affected by the proposed add-on to the company's
senior secured first lien term loan, which is rated B2. The B2
rating on the company's senior secured revolving credit facility,
which is pari passu to the term loan, the Caa1 rating on its senior
unsecured notes and the Caa1 rating on the senior unsecured PIK
notes issued by White Cap Parent, LLC, White Cap's parent holding
company, are also not affected. The outlook remains unchanged at
stable.
Moody's view the proposed transaction as credit negative due a
material increase in leverage, and around $52 million in additional
yearly cash interest payments. Proceeds from the term loan add-on
and additional capital from CD&R will go towards terming out the
borrowings under White Cap's asset based revolving credit facility.
White Cap used its revolver to make a distribution to The Sterling
Group, reducing its ownership in White Cap while increasing at the
same CD&R's ownership percentage in White Cap to around 76% after
closing of the transaction.
Moody's credit assessment of White Cap includes a highly leveraged
debt capital structure, due to past debt-financed acquisitions and
the proposed dividend, which is adding about two-thirds of a turn
in leverage. Moody's project adjusted debt-to-EBITDA improving to
around 5.5x at fiscal year-end 2025 (on or about January 28, 2026)
from about 6x at year-end 2024 due to better operating performance.
However, the high leverage affords very little financial
flexibility, since leverage is near the 6.0x leverage threshold for
downward rating pressure. In the last six months White Cap will
have added about $1.1 billion of debt to its balance sheet. Moody's
forward view also has adjusted free cash-flow-to-debt in the range
of 4% - 5% by late 2025. High cash interest payments approaching
$350 million per year limits cash generation and financial
flexibility, especially during a cyclical downturn. The potential
for additional shareholder distributions, which could be sizeable
and negatively impact liquidity or debt credit metrics, is a
significant credit challenge.
Providing an offset to these challenges is good operating
performance, with adjusted EBITDA margin sustained in the range of
13% - 14% through 2024. Moody's expect White Cap to benefit from
growth in some sectors within the domestic construction end market.
Material scale, free cash flow despite high interest payments,
revolver availability and no significant near-term maturities
further support White Cap's credit profile.
The stable outlook reflects Moody's view that White Cap will
continue to perform well while integrating its acquisitions. Good
liquidity and some end market dynamics that support growth further
support the stable outlook.
White Cap Supply Holdings, LLC, headquartered in Norcross, Georgia,
is a leading North American industrial distributor of specialty
construction products. Through their respective affiliates Clayton,
Dubilier & Rice (CD&R) owns on a pro forma basis about 76% (on a
fully diluted basis) of White Cap and The Sterling Group owns
around 10%, with the remainder owned by current and former
management. White Cap's revenue for the twelve months ending April
28, 2024 was $6.1 billion.
WILDBRAIN LTD: Moody's Withdraws 'B3' CFR Following Debt Repayment
------------------------------------------------------------------
Moody's Ratings has withdrawn all of WildBrain Ltd.'s ratings
including the B3 corporate family rating, B3-PD probability of
default rating, and B2 ratings on the senior secured bank credit
facilities. WildBrain's Speculative Grade Liquidity Rating (SGL) of
SGL-4 was also withdrawn. At the time of withdrawal, the outlook
was rating under review.
RATINGS RATIONALE
Moody's have withdrawn the ratings because WildBrain's debt
previously rated by us has been fully repaid.
WildBrain Ltd. is a public company headquartered in Toronto,
Canada, that produces children's content for internet streaming
platforms as well as broadcast TV. It owns brands such as Peanuts,
Inspector Gadget, Teletubbies and Strawberry Shortcake.
WILDBRAIN LTD: S&P Withdraws 'B-' Long-Term Issuer Credit Rating
----------------------------------------------------------------
S&P Global Ratings has withdrawn its 'B-' long-term issuer credit
rating and issue-level ratings on WildBrain Ltd. following the
company's refinancing of its rated debt. Even though WildBrain has
successfully refinanced its debt, the company continues to face
softness in operating performance owing to a slowdown in the
content production market. The outlook was negative at the time of
withdrawal.
WOB HOLDINGS: Case Summary & Seven Unsecured Creditors
------------------------------------------------------
Lead Debtor: WOB Holdings, LLC
12750 Citrus Park Lane, Suite 115
Tampa, FL 33625
Business Description: The Debtors are owners and operators of
craft beer restaurants.
Chapter 11 Petition Date: August 2, 2024
Court: United States Bankruptcy Court
Middle District of Florida
Twelve affiliates that concurrently filed voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code:
Debtor Case No.
------ --------
WOB Holdings, LLC 24-04538
World of Beer, Inc. 24-04542
WOBF, LLC 24-04543
World of Beer Franchising, LLC 24-04547
WOB Gainesville, LLC 24-04553
WOB OT Orlando, LLC 24-04557
WOB Doral, LLC 24-04559
WOB Miramar, LLC 24-04560
WOB Destin, LLC 24-04563
WOB Royal Palm, LLC 24-04565
WOB Myrtle Beach, LLC 24-04566
WOB Louisville I, LLC 24-04567
Judge: Hon. Catherine Peek Mcewen
Debtors' Counsel: Steven M. Berman, Esq.
SHUMAKER, LOOP & KENDRICK, LLP
101 E. Kennedy Blvd., Suite 2800
Tampa, FL 33602
Tel: (813) 229-7600
Email: sberman@shumaker.com
WOB Holdings'
Estimated Assets: $10 million to $50 million
WOB Holdings'
Estimated Liabilities: $10 million to $50 million
World Of Beer's
Estimated Assets: $0 to $50,000
World Of Beer's
Estimated Liabilities: $10 million to $50 million
The petitions were signed by Paul Avery as president.
Full-text copies of five of the Debtors' petitions are available
for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/SLPEHYQ/WOB_Holdings_LLC__flmbke-24-04538__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/FQ6EWBA/World_of_Beer_Inc__flmbke-24-04542__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/O7F2XHA/WOBF_LLC__flmbke-24-04543__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/VSCFUFY/World_of_Beer_Franchising_LLC__flmbke-24-04547__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/LV6ZOHQ/WOB_Gainesville_LLC__flmbke-24-04553__0001.0.pdf?mcid=tGE4TAMA
List of WOB Holdings' Seven Unsecured Creditors:
Entity Nature of Claim Claim Amount
1. Cherry Bekaert LLP $56,750
P.O. Box 632238
Cincinnati, OH
2. Corporate Creations Int Inc. $90
801 US Hwy. 1
North Palm Beach, FL 33408
3. Gray Robinson $17,403
P.O. Box 3068
Orlando, FL 32802
4. Johnson, Pope, $5,267
Bokor, Ruppel
P.O. Box 26704
Tampa, FL 33623
5. Property Consulting & Sol. $5,060
510 Vonderburg Dr.
Brandon, FL 33511
6. Synovus Bank $17,241,003
1137 1st Avenue
UTC 2nd Floor, OPS
Columbus, GA
31901
7. Synovus Bank $8,366,365
1137 1st Ave.
UTC 2nd Floor, OPS
Attn: Loan Department
Columbus, GA 31901
WOM SA: Seeks to Extend Plan Exclusivity to Dec. 31
---------------------------------------------------
WOM SA and its affiliates asked the U.S. Bankruptcy Court for the
District of Delaware to extend their exclusivity periods to file a
plan of reorganization and obtain acceptance thereof to December
31, 2024 and March 1, 2025, respectively.
The Debtors are located in three different countries—Chile,
Luxembourg, and Norway—which present cross-border legal issues
unique to each jurisdiction. The Debtors' creditors are located
throughout the world, and particular elements of the Chilean
bankruptcy system, including the ability of creditors to trigger
involuntary insolvency proceedings, require particular
consideration and nuanced treatment as the Chapter 11 Cases
continue to unfold.
The Debtors explain that the Company's business also involves a
variety of stakeholders including suppliers, customers, financial
creditors, and governmental regulators. The Debtors also reported
$810.8 million of debt obligations in the June 2024 monthly
operating report. These facts further demonstrate the complexity
and size of these cases, and the Debtors must work through the
myriad issues that a business of this scale faces when rebuilding
its operations through the chapter 11 process.
The Debtors claim that they are currently marketing their business
and soliciting bids for the Debtors' assets or a chapter 11 plan
sponsorship transaction pursuant to the Bidding Procedures Order.
The Marketing Process has required material attention from the
Debtors' management and professionals—the advisors have developed
a confidential information memorandum with the assistance of
management and populated a virtual data room, and continue to
negotiate non-disclosure agreements.
The Debtors believe that, in light of the progress made in these
Chapter 11 Cases it is reasonable to request an extension of the
Exclusive Periods to maintain the status quo while the Debtors
carry out the Marketing Process and develop a chapter 11 plan.
Granting the requested extensions will facilitate the Debtors'
efforts by providing the Debtors with a full and fair opportunity
to propose a chapter 11 plan without the distraction of competing
plans.
The Debtors state that the requested extension of the Exclusive
Periods will provide the Debtors with adequate time to complete
their restructuring initiatives, including the Marketing Process,
and the Debtors intend to use the additional time to enter into
productive negotiations for a consensual chapter 11 plan for the
benefit of the Debtors' key stakeholders and other parties-in
interest.
Co-Counsel to the Debtors:
John K. Cunningham, Esq.
Richard S. Kebrdle, Esq.
WHITE & CASE LLP
Southeast Financial Center
200 South Biscayne Boulevard,
Suite 4900
Miami, Florida 33131
Tel: (305) 371-2700
Email: jcunningham@whitecase.com
rkebrdle@whitecase.com
- and -
Philip M. Abelson, Esq.
Andrew Zatz, Esq.
Samuel P. Hershey, Esq.
Andrea Amulic, Esq.
Lilian Marques, Esq.
Claire Tuffey, Esq.
1221 Avenue of the Americas
New York, NY 10020
Phone: (212) 819-8200
Email: philip.abelson@whitecase.com
azatz@whitecase.com
sam.hershey@whitecase.com
andrea.amulic@whitecase.com
lilian.marques@whitecase.com
claire.tuffey@whitecase.com
Co-Counsel to the Debtors:
John H. Knight, Esq.
Amanda R. Steele, Esq.
Brendan J. Schlauch, Esq.
RICHARDS, LAYTON & FINGER, P.A.
One Rodney Square
920 North King Street
Wilmington, Delaware 19801
Tel: (302) 651-7700
Email: knight@rlf.com
steele@rlf.com
schlauch@rlf.com
About WOM SA
WOM is a Chilean telecommunications provider, focused on offering
mobile voice, data, and broadband services, along with a rapidly
expanding "Fiber to the Home" broadband offering, to consumers and
businesses in Chile. Since the acquisition of Nextel Chile in 2015
through Novator Partners LLP's investment vehicle NC Telecom AS,
WOM has expanded from having virtually no market share to
establishing itself as the second-largest mobile network operator
in Chile.
WOM sought relief under Chapter 11 of the U.S. Bankruptcy Code
(Bankr. D. Del. Lead Case No. 24-10628) on April 1, 2024. In the
petition filed by Timothy O'Connoer, as independent director, the
Debtor reports estimated assets and liabilities between $1 billion
and $10 billion each.
The Honorable Bankruptcy Judge Karen B. Owens oversees the case.
The Debtors tapped White & Case, LLP as general bankruptcy counsel;
Richards, Layton & Finger, P.A. as local bankruptcy counsel;
Riveron Consulting, LLC as financial advisor; and Rothschild & Co
US Inc. as investment banker. Kroll Restructuring Administration,
LLC is the claims agent.
ZIP MAILING: Unsecureds' Recovery Lowered to 2% of Claims
---------------------------------------------------------
Zip Mailing Services, Inc, submitted a Third Amended Subchapter V
Plan dated July 15, 2024.
During the term of this Plan, the Debtor shall submit the
disposable income necessary for the performance of this plan to the
Subchapter V Trustee and shall pay the Trustee the sums set forth
herein.
The term of this Plan begins on the date of confirmation of this
Plan and ends on the 60th month subsequent to that date.
Class 6 consists of Unsecured Non-Priority Claims. The total amount
of 6 Claims is $1,855,535 Debtor's Plan proposes to pay Class 6
unsecured creditors 2% of their claims. The total amount to be paid
to Class 6 unsecured creditors, pro rata, under the Plan is
$39,000.00. Allowed claims of unsecured creditors will be paid pro
rata, as follows: quarterly installments, in the amounts stated on
Amended Appendix E-4. B during the five-year term of the Plan.
Payments are to be provided during Quarters 1-20 of the Plan. Class
6 creditors are impaired.
The Debtor's projected disposable income for the five-year term of
the Plan is set forth in the five-year revised Projected Cash Flow.
The projected disposable income is stated in the Net Income Line
item for each year. The net income provides sufficient funding to
provide the payments required for each year of the Plan.
Based upon Debtor's projections, Debtor will have sufficient
disposable income to fund the Plan for each of the five years of
the term of the Plan. All of Debtor's projected disposable income
for the five-year term is to be applied to make the payments due
under the Plan.
The Debtor will receive payment of its Employee Retention Tax
Credit ("ERTC") claim in the amount of$213,000.00 within 120 days
of the Effective Date of the Plan. Debtor will apply $113,000 of
its ERTC payment to fund the Plan. Debtor will retain the balance
of the ERTC payment to defray ongoing operating expenses.
A full-text copy of the Third Amended Subchapter V Plan dated July
15, 2024 is available at https://urlcurt.com/u?l=N2jZcg from
PacerMonitor.com at no charge.
Attorneys for the Debtor:
Christopher L. Hamlin, Esq.
McNamee Hosea, PA
6404 Ivy Lane, Suite 820
Greenbelt, MD 20770
Telephone: (301) 441-2420
Facsimile: (301) 982-9450
Email: chamlin@mhlawyers.com
About Zip Mailing Services
Zip Mailing Services, Inc., operates a commercial mailing service
out of Landover, Maryland.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Md. Case No. 23-13736) on May 26, 2023.
In the petition signed by Darryl Jackson, Jr., its president, the
Debtor disclosed up to $500,000 in assets and up to $10 million in
liabilities.
Judge Maria Elena Chavez-Ruark oversees the case.
Christopher L. Hamlin, Esq., at McNamee Hosea, P.A., is the
Debtor's legal counsel.
[*] BCSC Urges Bankruptcy Law Amendment to Protect Investors
------------------------------------------------------------
The B.C. Securities Commission (BCSC) is calling for changing the
federal Bankruptcy and Insolvency Act after the Supreme Court of
Canada ruled that some financial sanctions can be extinguished
through the bankruptcy process.
The court, in a 5-2 decision, said that administrative penalties,
which are imposed by the BCSC and other Canadian securities
regulators to deter future misconduct, can be eliminated from a
person's debt upon being discharged from bankruptcy.
"This case demonstrates one of the many challenges securities
regulators face in collecting financial penalties from
lawbreakers," said BCSC Chair & CEO Brenda Leong. "The fact that
administrative penalties can be extinguished through bankruptcy
seriously undermines securities regulators' duty to protect
investors, and highlights a significant flaw in federal bankruptcy
law that needs to be fixed."
The ruling came in litigation between the BCSC and a B.C. couple,
Thalbinder Singh Poonian and Shailu Poonian. A BCSC panel found
that they ran a pump-and-dump scheme involving an Ontario company
whose shares traded on the TSX Venture Exchange.
The BCSC panel concluded that the Poonians inflated the company's
share price through trading among themselves, relatives, friends
and acquaintances, and then illegally obtained approximately $7
million by selling shares to unsuspecting buyers, many of them
living paycheck to paycheck. Most of them had no idea they were
victims of misconduct until they were contacted by the BCSC.
The BCSC panel levied two types of financial sanctions against the
Poonians:
-- Administrative penalties of $13.5 million, intended to deter
future misconduct by the Poonians and others who might contemplate
committing similar wrongdoing -- Disgorgement of $5.6 million,
representing the amount the Poonians obtained from their illegal
activity. Any funds collected for disgorgement orders can be
returned to victims of that misconduct.
The Poonians have not made any effort to pay. After the BCSC
imposed its sanctions, they filed for bankruptcy. The Poonians
asked the B.C. Supreme Court to extinguish their debts, including
those owed to the BCSC but that request -- which was opposed by the
BCSC -- was denied by the court in 2020.
The BCSC also applied to the court for an order that its financial
sanctions against the Poonians persist, even if all of the couple's
other debts are extinguished through bankruptcy, because the
Bankruptcy and Insolvency Act allows some types of debts to survive
bankruptcy, including:
-- Debts arising from a fine, penalty or restitution order imposed
by a court, and -- Debts arising by obtaining property or services
by false pretenses or fraudulent misrepresentation.
The BCSC argued that its sanctions -- both the administrative
penalties and the disgorgement orders -- met those criteria.
The Supreme Court of Canada unanimously agreed with the BCSC that
"the Poonians' scheme to mislead and exploit investors amounted to
fraudulent misrepresentation." But it did not agree that the
sanctions, despite being registered with a court, qualified as
court-imposed orders.
The court's five-member majority said there is a direct link
between the amounts of the disgorgement orders and the Poonians'
fraudulent conduct, so those debts to the BCSC survive bankruptcy.
But the administrative penalties, the majority said, arose most
directly from the BCSC's decision to sanction the couple, and only
indirectly from the Poonians' unlawful conduct. So those penalties,
the majority said, are extinguished if the Poonians exit
bankruptcy.
Two justices dissented, saying that the administrative penalties,
along with disgorgement, should persist to "ensure that dishonest
debtors do not benefit from their dishonesty."
"We are pleased that the Poonians, as a result of this decision,
will forever owe $5.6 million, which represents the money they
obtained from their pump-and-dump scheme," Leong said. "However,
this has always been about more than this one case, and we are
disappointed that people who cheat or swindle investors can avoid
paying administrative penalties through an exit from bankruptcy."
Since 2001, more than 40 individuals and companies, owing a total
of about $80 million to the BCSC, have gone through bankruptcy, and
as a result, have had their BCSC debts extinguished.
The Supreme Court of Canada, in its written opinion, said that
Parliament could have drafted the Bankruptcy and Insolvency Act to
expressly say that financial sanctions of regulatory bodies or
administrative tribunals are exempt from bankruptcy discharge. But
the Act does not say that.
"An obvious solution is to revise the law to deal with this 'escape
hatch,'" Leong said.
About the B.C. Securities Commission
The B.C. Securities Commission -- https://www.bcsc.bc.ca/
-- an independent provincial government agency, strives to make the
investment market benefit the public. It sets rules, monitor
compliance by industry, take action against misconduct, and provide
guidance to investors and industry. As guardians of B.C.'s
investment market, it is committed to maintaining a market that is
honest, fair, competitive and dynamic, enabling British Columbians
to thrive.
[] Three Shipping Companies That Filed Chapter 11 in July 2024
--------------------------------------------------------------
Kirk O’Neil of The Street reports that the Covid pandemic's
devastation resulted in businesses shutting down, initially
reducing demand for goods and disrupting the supply chain with
factories and warehouses significantly reducing output or closing.
The trucking industry faced layoffs in 2020 with 88,000 trucking
jobs lost and over 3,000 trucking companies closing, according to
Commercial Carrier Journal. Many truckers sought other occupations
and didn't return behind the wheel.
When the pandemic subsided, the trucking industry faced a record
driver shortage of over 81,000 drivers in 2021, according to
truckinfo.net.
The driver shortage had a major impact on trucking companies with
increased costs, supply chain problems and shipping delays.
Companies needed to pay higher wages to attract drivers, and they
were seeing increased costs from driver turnover, recruitment and
training. In 2021, thousands of new drivers started entering the
trucking industry as freight rates began to rise, and by July 2023,
the industry saw a 96% increase in registered for-hire drivers to
over 475,000, Time reported.
Unfortunately, rates began to fall in 2022 and diesel fuel more
than doubled in price. Trucking companies also began dealing with
several other challenges, including inflation, high interest rates,
and rising insurance and wage costs.
Leading national trucking companies like J.B. Hunt Transport
Services (JBHT), Knight-Swift Transport Services (KNX) and
XPO(XPO)put pressure on smaller companies that struggle to generate
adequate revenue to stay afloat.
Financial distress in the logistics industry has led several
trucking companies to file Chapter 11 to reorganize or, in some
cases, file Chapter 7 to liquidate their assets.
And in July, three more trucking companies have filed for Chapter
11 protection to reorganize their businesses.
Miami, Fla.-based trucking company AB Brothers USA and its
affiliate A1 Transport Network on July 20 filed for Chapter 11
bankruptcy protection in the U.S. Bankruptcy Court for the Southern
District of Florida to reorganize their debts.
AB Brothers listed over $593,000 in assets and $1.05 million in
liabilities in its petition. The debtor's largest creditor is
Crossroads Equipment Lease & Finance, owed over $233,600.
McAlpin, Fla.-based AOG Trucking on July 17 filed for Chapter 11
bankruptcy, listing $1 million to $10 million in assets and
liabilities in its petition. The debtor's largest creditor is BMO
Harris Bank, which it owes over $713,500 in debts.
The debtors did not indicate reasons for filing bankruptcy in their
petitions.
[^] BOND PRICING: For the Week from July 29 to Aug. 2, 2024
-----------------------------------------------------------
Company Ticker Coupon Bid Price Maturity
------- ------ ------ --------- --------
2U Inc TWOU 2.250 42.000 5/1/2025
99 Cents Only Stores LLC NDN 7.500 5.000 1/15/2026
99 Cents Only Stores LLC NDN 7.500 4.985 1/15/2026
99 Cents Only Stores LLC NDN 7.500 4.985 1/15/2026
Allen Media LLC / Allen
Media Co-Issuer Inc ALNMED 10.500 40.414 2/15/2028
Allen Media LLC / Allen
Media Co-Issuer Inc ALNMED 10.500 41.158 2/15/2028
Allen Media LLC / Allen
Media Co-Issuer Inc ALNMED 10.500 40.451 2/15/2028
Amyris Inc AMRS 1.500 1.719 11/15/2026
Anagram Holdings
LLC/Anagram
International Inc AIIAHL 10.000 0.750 8/15/2026
Anagram Holdings
LLC/Anagram
International Inc AIIAHL 10.000 0.750 8/15/2026
Anagram Holdings
LLC/Anagram
International Inc AIIAHL 10.000 0.750 8/15/2026
At Home Group Inc HOME 7.125 27.976 7/15/2029
At Home Group Inc HOME 7.125 27.976 7/15/2029
Audacy Capital Corp CBSR 6.500 4.500 5/1/2027
Audacy Capital Corp CBSR 6.750 4.125 3/31/2029
Audacy Capital Corp CBSR 6.750 4.007 3/31/2029
Azul Investments LLP AZUBBZ 5.875 93.027 10/26/2024
Azul Investments LLP AZUBBZ 5.875 92.922 10/26/2024
BPZ Resources Inc BPZR 6.500 3.017 3/1/2049
Bank of America Corp BAC 7.000 95.247 9/20/2032
Beasley Mezzanine
Holdings LLC BBGI 8.625 58.993 2/1/2026
Beasley Mezzanine
Holdings LLC BBGI 8.625 58.955 2/1/2026
Biora Therapeutics Inc BIOR 7.250 57.305 12/1/2025
Castle US Holding Corp CISN 9.500 47.457 2/15/2028
Castle US Holding Corp CISN 9.500 47.457 2/15/2028
Citigroup Inc C 4.000 99.675 8/5/2024
CorEnergy Infrastructure
Trust Inc CORR 5.875 70.500 8/15/2025
Cornerstone
Chemical Co LLC CRNRCH 10.250 50.750 9/1/2027
Curo Group Holdings Corp CURO 7.500 5.112 8/1/2028
Curo Group Holdings Corp CURO 7.500 21.486 8/1/2028
Curo Group Holdings Corp CURO 7.500 5.112 8/1/2028
Cutera Inc CUTR 2.250 19.625 6/1/2028
Cutera Inc CUTR 4.000 18.625 6/1/2029
Cutera Inc CUTR 2.250 34.243 3/15/2026
Danimer Scientific Inc DNMR 3.250 13.757 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 5.375 2.075 8/15/2026
Diamond Sports Group
LLC / Diamond
Sports Finance Co DSPORT 6.625 2.025 8/15/2027
Diamond Sports Group
LLC / Diamond
Sports Finance Co DSPORT 5.375 2.281 8/15/2026
Diamond Sports Group
LLC / Diamond
Sports Finance Co DSPORT 5.375 2.281 8/15/2026
Diamond Sports Group
LLC / Diamond
Sports Finance Co DSPORT 6.625 1.985 8/15/2027
Diamond Sports Group
LLC / Diamond
Sports Finance Co DSPORT 5.375 2.021 8/15/2026
Energy Conversion
Devices Inc ENER 3.000 0.762 6/15/2013
Enviva Partners LP
/ Enviva Partners
Finance Corp EVA 6.500 43.750 1/15/2026
Enviva Partners LP
/ Enviva Partners
Finance Corp EVA 6.500 43.750 1/15/2026
Exela Intermediate
LLC / Exela
Finance Inc EXLINT 11.500 35.000 7/15/2026
Exela Intermediate
LLC / Exela
Finance Inc EXLINT 11.500 15.125 7/15/2026
F&M Financial Corp/TN FMFNCP 5.950 93.780 9/15/2029
F&M Financial Corp/TN FMFNCP 5.950 93.780 9/17/2029
Federal Farm Credit
Banks Funding Corp FFCB 6.290 99.850 8/9/2038
Federal Home Loan Banks FHLB 4.000 99.393 8/8/2024
Federal Home Loan Banks FHLB 4.000 99.393 8/8/2024
Federal Home Loan Banks FHLB 0.500 99.850 8/6/2024
Federal Home Loan Banks FHLB 0.234 99.879 8/6/2024
Federal Home Loan
Mortgage Corp FHLMC 5.250 99.650 11/4/2024
Federal Home Loan
Mortgage Corp FHLMC 2.875 88.984 10/28/2024
Federal Home Loan
Mortgage Corp FHLMC 4.000 99.392 8/8/2024
First Republic Bank/CA FRCB 4.375 2.938 8/1/2046
First Republic Bank/CA FRCB 4.625 4.750 2/13/2047
Ford Motor Credit Co LLC F 7.000 98.359 8/20/2026
GNC Holdings Inc GNC 1.500 0.657 8/15/2020
German American Bancorp GABC 4.500 90.110 6/30/2029
GoTo Group Inc LOGM 5.500 36.737 5/1/2028
GoTo Group Inc LOGM 5.500 37.014 5/1/2028
Goldman Sachs Group GS 4.000 100.000 8/6/2024
Goldman Sachs Group GS 7.000 93.823 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 7.243 6/1/2026
H-Food Holdings
LLC / Hearthside
Finance Co Inc HEFOSO 8.500 7.450 6/1/2026
Hallmark Financial
Services Inc HALL 6.250 17.555 8/15/2029
Homer City Generation LP HOMCTY 8.734 38.750 10/1/2026
Hughes Satellite
Systems Corp SATS 6.625 47.333 8/1/2026
Hughes Satellite
Systems Corp SATS 6.625 47.009 8/1/2026
Hughes Satellite
Systems Corp SATS 6.625 47.009 8/1/2026
Huntington
Bancshares Inc/OH HBAN 2.625 99.890 8/6/2024
Inseego Corp INSG 3.250 73.790 5/1/2025
Invacare Corp IVC 4.250 1.002 3/15/2026
JPMorgan Chase Bank NA JPM 2.000 90.116 9/10/2031
Karyopharm Therapeutics Inc KPTI 3.000 64.741 10/15/2025
Ligado Networks LLC NEWLSQ 15.500 16.080 11/1/2023
Ligado Networks LLC NEWLSQ 17.500 1.771 5/1/2024
Ligado Networks LLC NEWLSQ 15.500 15.750 11/1/2023
Lightning eMotors Inc ZEVY 7.500 1.000 5/15/2024
Luminar Technologies Inc LAZR 1.250 43.000 12/15/2026
MBIA Insurance Corp MBI 16.823 5.000 1/15/2033
MBIA Insurance Corp MBI 16.823 5.000 1/15/2033
Macy's Retail Holdings M 6.700 88.173 7/15/2034
Macy's Retail Holdings M 6.900 94.162 1/15/2032
Mashantucket Western
Pequot Tribe MASHTU 7.350 50.750 7/1/2026
Millennium Escrow Corp CFIELD 6.625 51.984 8/1/2026
Millennium Escrow Corp CFIELD 6.625 51.933 8/1/2026
Morgan Stanley MS 1.800 78.509 8/27/2036
NanoString Technologies NSTG 2.625 74.621 3/1/2025
Office Properties
Income Trust OPI 4.500 80.498 2/1/2025
Polar US Borrower
LLC / Schenectady
International Group SIGRP 6.750 27.500 5/15/2026
Polar US Borrower
LLC / Schenectady
International Group SIGRP 6.750 27.751 5/15/2026
RR Donnelley & Sons Co RRD 9.750 106.969 7/31/2028
Rackspace Technology
Global Inc RAX 5.375 28.801 12/1/2028
Rackspace Technology
Global Inc RAX 3.500 29.613 2/15/2028
Rackspace Technology
Global Inc RAX 5.375 28.985 12/1/2028
Rackspace Technology
Global Inc RAX 3.500 29.613 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 7.700 1.660 2/15/2027
Rite Aid Corp RAD 7.500 41.500 7/1/2025
Rite Aid Corp RAD 8.000 42.750 11/15/2026
Rite Aid Corp RAD 6.875 3.606 12/15/2028
Rite Aid Corp RAD 7.500 42.709 7/1/2025
Rite Aid Corp RAD 6.875 3.606 12/15/2028
RumbleON Inc RMBL 6.750 69.701 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 0.411 5/15/2026
Shutterfly LLC SFLY 8.500 47.500 10/1/2026
Shutterfly LLC SFLY 8.500 47.500 10/1/2026
Spanish Broadcasting
System Inc SBSAA 9.750 59.679 3/1/2026
Spanish Broadcasting
System Inc SBSAA 9.750 59.884 3/1/2026
Spirit Airlines Inc SAVE 1.000 37.875 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 9.000 5/15/2027
Veritex Holdings Inc VBTX 4.750 91.145 11/15/2029
Veritone Inc VERI 1.750 32.500 11/15/2026
Virgin Galactic Holdings SPCE 2.500 30.930 2/1/2027
Voyager Aviation
Holdings LLC VAHLLC 8.500 15.475 5/9/2026
Voyager Aviation
Holdings LLC VAHLLC 8.500 15.475 5/9/2026
Voyager Aviation
Holdings LLC VAHLLC 8.500 15.475 5/9/2026
WW International Inc WW 4.500 26.333 4/15/2029
WeWork Cos US LLC WEWORK 12.000 1.044 8/15/2027
Wesco Aircraft Holdings WAIR 9.000 40.761 11/15/2026
Wesco Aircraft Holdings WAIR 13.125 2.460 11/15/2027
Wesco Aircraft Holdings WAIR 9.000 40.761 11/15/2026
Wesco Aircraft Holdings WAIR 13.125 2.460 11/15/2027
Wheel Pros Inc WHLPRO 6.500 16.784 5/15/2029
Wheel Pros Inc WHLPRO 6.500 16.784 5/15/2029
fuboTV Inc FUBO 3.250 59.335 2/15/2026
iHeartCommunications Inc IHRT 8.375 43.035 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
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
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public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
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liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
On Thursdays, the TCR delivers a list of recently filed
Chapter 11 cases involving less than $1,000,000 in assets and
liabilities delivered to nation's bankruptcy courts. The list
includes links to freely downloadable images of these small-dollar
petitions in Acrobat PDF format.
Each Friday's edition of the TCR includes a review about a book of
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Monthly Operating Reports are summarized in every Saturday edition
of the TCR.
The Sunday TCR delivers securitization rating news from the week
then-ending.
TCR subscribers have free access to our on-line news archive.
Point your Web browser to http://TCRresources.bankrupt.com/and use
the e-mail address to which your TCR is delivered to login.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
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Pennsylvania, USA, and Beard Group, Inc., Philadelphia, Pa., USA.
Randy Antoni, Jhonas Dampog, Marites Claro, Joy Agravante,
Rousel Elaine Tumanda, Joel Anthony G. Lopez, Psyche A. Castillon,
Ivy B. Magdadaro, Carlo Fernandez, Christopher G. Patalinghug, and
Peter A. Chapman, Editors.
Copyright 2024. All rights reserved. ISSN: 1520-9474.
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*** End of Transmission ***