/raid1/www/Hosts/bankrupt/TCR_Public/240806.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Tuesday, August 6, 2024, Vol. 28, No. 218
Headlines
1016 CHANNEL DRIVE: Hits Chapter 11 Bankruptcy
2812 POMEROY RD: U.S. Trustee Seeks Chapter 11 Trustee Appointment
500 CITY ISLAND: Seeks Chapter 11 Bankruptcy Protection
99 CENTS: Nevada Court Stays Ana Montemayor's Lawsuit
A1 TRANSPORT NETWORK: Starts Subchapter V Bankruptcy Proceeding
AB BROTHERS USA INC: Kicks Off Subchapter V Bankruptcy Process
ADDMI INC: Bryan Perkinson of Sonoran Named Subchapter V Trustee
ALEXANDER TRUCKING: Michael Carmel Named Subchapter V Trustee
ALLIANCE LAUNDRY: Moody's Affirms 'B2' CFR, Outlook Remains Stable
ALLIED EROSION: Seeks to Hire Shaw & Hanover as General Counsel
ALLIED UNIVERSAL: $500MM Loan Add-on No Impact on Moody's 'B3' CFR
ARDELYX INC: Incurs $16.45 Million Net Loss in Second Quarter
ARGO HARDWARE: Linda Gore Named Subchapter V Trustee
ASPIRA WOMEN'S: Inks $4.45M Offering Agreement With H.C. Wainwright
AUBREY PROPERTIES: Case Summary & Six Unsecured Creditors
BEX AESTHETIX: Areya Holder Aurzada Named Subchapter V Trustee
BION ENVIRONMENTAL: President Mark A. Smith Retires
BIOTRICITY INC: Falls Short of Nasdaq Minimum Bid Price Requirement
BRENDAN GOWING: Priority Services Loses Bid to Lift Automatic Stay
BUCA TEXAS: Case Summary & 30 Largest Unsecured Creditors
BYJU ALPHA: Ex-Director Fined $10K a Day for Missing $533M
CDO LONESTAR: Claims Will be Paid from Property Sale/Refinance
CELSIUS NETWORK: Sarachek Advises Committee of Corporate Creditors
CENTERPOINT RADIATION: No Patient Care Concern, 5th PCO Report Says
CONN'S INC: Closes 71 Stores Amid Chapter 11 Talks
COR HOLDINGS: Files for Chapter 11 Bankruptcy Protection
CPPIB OVM MEMBER: Fitch Assigns 'BB-' LongTerm IDR, Outlook Stable
CRESCENT ENERGY: Fitch Hikes LongTerm IDR to 'BB-', Outlook Stable
CWGS ENTERPRISES: S&P Downgrades ICR to 'B', Outlook Negative
DANIVAN LLC: Voluntary Chapter 11 Case Summary
DIAMOND SPORTS: Gets New Sports Deal from Comcast Corp.
DIRIGO GLOBAL: Taps Bernstein Shur Sawyer as Bankruptcy Counsel
DMD CUSTOM: Ira Bodenstein Named Subchapter V Trustee
EBIX INC: Court Declines to Give Plan Confirmation Ruling
EISNER ADVISORY: Incremental Term Loan No Impact on Moody's B2 CFR
ETON STREET: Deborah Fish Named Subchapter V Trustee
EVOKE PHARMA: Effects 1-for-12 Reverse Stock Split
EYE CARE: Unsecureds to Recover Up to 60% of Claims in Plan
FARADAY FUTURE: All Five Proposals Approved at Annual Meeting
FAXON ENTERPRISES: Bell Nunnally Advises Delta & Service Steel
FHT RENTAL: Amends Secured Claims Pay Details
FIRST PATH: David Madoff Named Subchapter V Trustee
FISKER INC: Lender Heights Agrees on Settlement Talks
FLYNN CANADA: Moody's Affirms 'B1' CFR, Outlook Stable
FOCUS FINANCIAL: Moody's Cuts CFR to B2 & Alters Outlook to Stable
FTX GROUP: Clients Tell Court Sullivan Must Face Fraud Claims
FTX TRADING: Gellert, Moskowitz & Boies Advise MDL FTX Customers
GAMEHENDGE INC: Kicks Off Subchapter V Proceedings
GCPS HOLDINGS: Tom Howley Named Subchapter V Trustee
GLUCOTRACK INC: Secures $4M in Funding to Support Clinical Trial
GOLDEN RULE RESOURCES: Commences Subchapter V Bankruptcy Process
GOTHAM RESTAURANTS: Samuel Dawidowicz Named Subchapter V Trustee
HADAD DESIGN: Files for Subchapter V Bankruptcy
HAOB HORIZONTAL DRILLING: Starts Subchapter V Bankruptcy Proceeding
HARDINGE INC: Seeks Chapter 11 Bankruptcy Along With Affiliates
HBL SNF: No Resident Care Concerns, 12th PCO Report Says
HEALTHCARE AT COLLEGE: U.S. Trustee Appoints Melanie McNeil as PCO
HESS MIDSTREAM: Fitch Affirms 'BB+' LongTerm IDR, Outlook Stable
HOMES AND HOUSES: Seeks to Hire Rodeo Realty as Real Estate Broker
HUDSON RIVER TRADING: Fitch Affirms 'BB' LongTerm IDR
I10/I20 CUISINE LLC: Hits Chapter 11 Bankruptcy Protection
INFINERA CORP: Incurs $48.29 Million Net Loss in Second Quarter
INSTRUCTURE HOLDINGS: Fitch Puts 'BB-' LongTerm IDR on Watch Neg.
INTEGRATED CARE: No Patient Complaints, PCO Report Says
INTERACTIVE HEALTH: Unsecureds to Get Share of Income for 3 Years
IYS VENTURES: Unsecureds Owed $25.6M Will Get $1.2M in Plan
JACKSON-STRONG: Case Summary & 19 Unsecured Creditors
JANE STREET: Fitch Alters Outlook on 'BB+' LongTerm IDR to Positive
LAVIE CARE: U.S. Trustee Appoints Joani Latimer as PCO
LESLIE'S POOLMART: Moody's Cuts CFR to B2 & Alters Outlook to Neg.
LIFESPANN ENHANCED: Joseph Cotterman Named Subchapter V Trustee
LIKEMIND BRANDS: Case Summary & 20 Largest Unsecured Creditors
LTC TRANSPORTATION: Patricia Fugee Named Subchapter V Trustee
MARIN SOFTWARE: Incurs $2.02 Million Net Loss in Second Quarter
MARTINEZ PALLET: Hires Law Offices of Gabriel Liberman as Counsel
MAT TRANSPORT INC: Seeks Chapter 11 Bankruptcy Protection
MAXLINEAR INC: Moody's Cuts CFR to B1 & Alters Outlook to Negative
MCDANIEL PLUMBING: Alexandra Garrett Named Subchapter V Trustee
META MATERIALS: IT Systems Disrupted; Canadian Unit in Bankruptcy
MIDCONTINENT COMMUNICATIONS: Moody's Rates New Secured Loans 'Ba2'
MINI MANIA: U.S. Trustee Appoints Creditors' Committee
MORNING JUMP: Unsecured Creditors to Split $200K over 3 Years
MURDOCH FINANCE: Files for Chapter 11 Bankruptcy
NOVA LIFESTYLE: Signs $200K Purchase Agreement With Huge Energy
OWENS & MINOR: Moody's Alters Outlook on 'Ba3' CFR to Negative
PARAGON HOSPITALITY: Lucy Sikes Named Subchapter V Trustee
PERFECTION AUTO REFINISH: Kicks Off Subchapter V Bankruptcy Process
PG&E CORP: Court Affirms Summary Judgment in Addington Lawsuit
POWER BLOCK COIN: Appointment of Creditors' Committee Sought
PREMIER CAR: Seeks to Hire Cooper Law Firm as Bankruptcy Counsel
R&N EASLEY: Seeks to Hire Cooper Law Firm as Bankruptcy Counsel
R1 RCM: S&P Places 'B+' on Watch Negative on Acquisition Agreement
R1 RCM: TowerBrook & Clayton Deal No Impact on Moody's 'Ba3' CFR
RAZEL & RUZTIN: U.S. Trustee Appoints Blanca Castro as PCO
RITE AID: Close 694 Stores Since Chapter 11 Filing
SERINDEEP INTERNATIONAL: Seeks Chapter 11 Bankruptcy Protection
SEXTO LLC: Hits Chapter 11 Bankruptcy Protection in Texas
SILVER CREEK: Voluntary Chapter 11 Case Summary
STEWARD HEALTH CARE: Massachusetts' $30M Boost Faces Objection
STEWARD: Gets $30-Mil. from Massachusetts to Keep Hospitals Open
STRAWBERRY HILL POVITICA: Starts Subchapter V Bankruptcy Proceeding
SUNNY ENERGY: James Cross Named Subchapter V Trustee
TABOR MANOR: No Decline in Patient Care, PCO Report Says
TELEFLEX INC: Moody's Ups CFR to Ba1 & Sr. Unsecured Notes to Ba2
TERRASCEND CORP: Completes $140 Million Debt Financing
TGP COMMUNICATIONS: Court Dismisses Bankruptcy Case
TRANSOCEAN LTD: Incurs $123 Million Net Loss in Second Quarter
VENUS CONCEPT: Signs Consent Agreement with Madryn Lenders
VILLAGE ON THE ISLE: Fitch Affirms 'BB+' IDR, Outlook Stable
VIRTU FINANCIAL: Fitch Affirms 'BB-' LongTerm IDR, Outlook Stable
VISTA OUTDOOR: Czechoslovak Group Deal No Impact on Moody's Ba3 CFR
VISTA-PRO: Coney Island Auto Loses Bid to Vacate Default Judgment
W 72 STREET PARTNERS: Files for Chapter 11 Bankruptcy in N.J.
WALNUT HILLS-GREENVILLE: Appointment of Examiner Sought
WEISS MULTI-STRATEGY: Appointment of Chapter 11 Examiner Sought
WESTERN OIL EXPLORATION: Hits Chapter 11 Bankruptcy in Nevada
WHEEL PROS: Skips Loan Interest Payments
WINDSOR TERRACE: Pfister & Saso Revises Rule 2019 Statement
WOODFIELD RD: Seeks to Hire Johnson Law Group as Legal Counsel
XCELERATOR BOATWORKS: Parker Poe Represents Creditors
YANEZ DESIGNS: Case Summary & Three Unsecured Creditors
YELLOW CORP: Disputes $7.8-Bil. Pension Feud PBCC Rules
[*] 31st Distressed Investing Conference: Early Bird Discount!
[*] Restaurants That Declared Bankruptcy in 2024
[^] Large Companies with Insolvent Balance Sheet
*********
1016 CHANNEL DRIVE: Hits Chapter 11 Bankruptcy
----------------------------------------------
1016 Channel Drive LLC filed Chapter 11 protection in the Eastern
District of New York. According to court documents, the Debtor
reports $2,390,781 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 26, 2024 at 12:00 p.m. in Room Telephonically on telephone
conference line: 1(866)819-1498. Participant access code:
4769770#.
About 1016 Channel Drive LLC
1016 Channel Drive LLC is the fee simple owner of a single family
home located at 1016 Channel Drive, Hewlett, NY 11557 valued at $1
million.
1016 Channel Drive LLC sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D.N.Y. Case No. 24-43017) on July 22,
2024. In the petition filed by Mitchel Steiman, as managing member,
the Debtor reports total assets of $1,000,025 and total liabilities
of $2,390,781.
The Debtor is represented by:
Charles Wertman, Esq.
LAW OFFICES OF CHARLES WERTMAN P.C.
100 Merrick Road Suite 304W
Rockville Centre NY 11570-4807
Tel: (516) 284-0900
Email: charles@cwertmanlaw.com
2812 POMEROY RD: U.S. Trustee Seeks Chapter 11 Trustee Appointment
------------------------------------------------------------------
A government bankruptcy watchdog called for an independent trustee
to take over the Chapter 11 cases of 2812 Pomeroy Rd SE, LLC and
its affiliates.
In a motion filed with the U.S. Bankruptcy Court for the District
of Columbia, Gerard Vetter, Acting U.S. Trustee for Region 4, said
he "does not believe that [Mario] Guatemala and [Maria] Rivera
should be in control of these cases" and that the interests of
creditors would be better served by the appointment of a bankruptcy
trustee.
Ms. Rivera is the 100% owner of 2812 Pomeroy and 4318 Halley
Terrace SE, LLC while Mr. Guatemala is the 100% owner of 4001 First
St SE, LLC and three other companies as of the petition date. Prior
to the companies' Chapter 11 filing, Ali Razjooyan owned 50% of
each of the companies.
"The U.S. Trustee does not believe that Guatemala and Rivera are
honoring their fiduciary responsibilities to the estates," Mr.
Vetter said in court papers, citing the non-disclosure of
connections between Razjooyan and Richard Balles who owns RBC
Properties, LLC, the contract purchaser for the companies.
"This is troubling and tends to show that these were not
arms-length transactions and there may be conflicts involved with
the closing of the sale," Mr. Vetter said.
On July 9, motions to sell real property and to assume and assign
all leases and executory contracts were filed in the companies'
bankruptcy cases. The sales contracts were all signed by the buyer
as of April 3 and countersigned by either Guatemala or Rivera on
June 13.
"Notwithstanding the concerns raised by the U.S. Trustee and other
parties in interest with respect to the proposed sales contracts,
the [companies] have brought them before the court for approval.
Again, the U.S. Trustee has concerns that these are not arms-length
transactions and have concerns over Razjooyan's involvement in
procuring the proposed purchaser," Mr. Vetter said.
Mr. Vetter also expressed doubt over the veracity of the
pre-bankruptcy operational information provided by the companies,
saying that most of it came from Razjooyan.
About 2812 Pomeroy Rd SE
2812 Pomeroy Rd SE, LLC, a company in Laurel, Md., filed its
voluntary petition for Chapter 11 protection (Bankr. D. D.C. Case
No. 24-00143) on April 24, 2024, listing $1 million to $10 million
in both assets and liabilities. Maria I. Rivera, managing member,
signed the petition.
Judge Elizabeth L. Gunn oversees the case.
Martin Law Group, PC serves as the Debtor's bankruptcy counsel.
500 CITY ISLAND: Seeks Chapter 11 Bankruptcy Protection
-------------------------------------------------------
500 City Island Ave. LLC filed Chapter 11 protection in the
Southern District of New York. According to court filing, the
Debtor reports $1,400,000 in debt owed to 1 and 49 creditors. The
petition states funds will be available to unsecured creditors.
A meeting of creditors under 11 U.S.C. Section 341(a) is slated for
August 19, 2024 at 2:30 p.m. at Office of UST (TELECONFERENCE
ONLY).
About 500 City Island Ave. LLC
500 City Island Ave. LLC is engaged in activities related to real
estate. The Debtor is the fee simple owner of a single-story,
single-tenant commercial building valued at $2.95 million.
500 City Island Ave. LLC sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D.N.Y. Case No. 24-11263) on July 22,
2024. In the petition signed by Norberto Rodriguez, as managing
member, the Debtor reports total assets of $2,950,000 and total
liabilities of $1,400,000.
The Honorable Bankruptcy Judge John P. Mastando III oversees the
case.
The Debtor is represented by:
James Rufo, Esq.
THE LAW OFFICE OF JAMES J. RUFO
222 Bloomingdale Road, Suite 202
White Plains, NY 10605
Tel: (914) 600-7161
Email: jrufo@jamesrufolaw.com
99 CENTS: Nevada Court Stays Ana Montemayor's Lawsuit
-----------------------------------------------------
Judge Jennifer A. Dorsey of the United States District Court for
the District of Nevada entered an order to stay and
administratively close the case captioned as Ana Montemayor,
Plaintiff v. 99 Cents Only Stores, LLC, Defendant, Case No.
2:23-cv-02048-JAD-MDC (D. Nev.), due to the Debtor's bankruptcy
proceedings.
A copy of the Court's decision dated July 25, 2024, is available at
https://urlcurt.com/u?l=rXqVIi
About Number Holdings, Inc.
Founded in 1982, 99 Cents Only Stores LLC -- http://www.99only.com/
-- operate over 370 "extreme value" retail stores in California,
Arizona, Nevada and Texas under the business names "99¢ Only
Stores" and "The 99 Store." The Company offers its customers a wide
array of quality products -- from everyday household items, to
fresh produce, deli, and other grocery items, to an assortment of
seasonal and party merchandise -- many of which are still priced at
or below 99.99 cents. The Company's stores are primarily located in
urban areas and underserved communities, many of which lack close
access to traditional grocery stores.
The Debtors sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Del. Lead Case No. 24-10719) on April 7,
2024. In the petition signed by Christopher J. Wells, as chief
restructuring officer, the Debtor disclosed up to $10 billion in
both assets and liabilities.
Judge Kate Stickles oversees the case.
The Debtors tapped Milbank LLP as general bankruptcy counsel,
Morris, Nichols, Arsht & Tunnel LLP as Delaware bankruptcy counsel,
Jefferies LLC as investment banker, Alvarez & Marsal North America,
LLC as financial advisor, Hilco Merchant Resources, LLC and Hilco
Real Estate, LLC as retail consultant and real estate consultant,
and Kroll Restructuring Administration LLC as claims and noticing
agent.
A1 TRANSPORT NETWORK: Starts Subchapter V Bankruptcy Proceeding
---------------------------------------------------------------
A1 Transport Network Inc. filed Chapter 11 protection in the
Southern District of Florida. The Debtor reports $1,222,479 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 21, 2024 at 12:00 p.m. by U.S. Trustee TELECONFERENCE on
telephone conference line: 866-774-1822. participant access code:
4573853.
About A1 Transport Network Inc.
A1 Transport Network Inc. operates in the general freight trucking
industry.
A1 Transport Network Inc. sought relief under Subchapter V of
Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. Case No.
24-17287) on July 20, 2024. In the petition filed by Ivan Antigua
Escobar, as president, the Debtor reports total assets of $106,290
and total liabilities of $1,222,479.
The Honorable Bankruptcy Judge Robert A. Mark oversees the case.
The Debtor is represented by:
Jeffrey N. Schatzman, Esq.
SCHATZMAN & SCHATZMAN, P.A.
9990 S.W. 77th Ave Penthouse 2
Miami, FL 33156-8115
Tel: (305) 670-6000
Email: jschatzman@schatzmanlaw.com
AB BROTHERS USA INC: Kicks Off Subchapter V Bankruptcy Process
--------------------------------------------------------------
AB Brothers USA Inc. filed Chapter 11 protection in the Southern
District of Florida. According to court documents, the Debtor
reports $1,050,153 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 12:00 p.m. in Room Telephonically on telephone
conference line: 866-774-1822 . participant access code: 4573853.
About AB Brothers USA Inc.
AB Brothers USA Inc. operates in the general freight trucking
industry.
AB Brothers USA Inc. sought relief under Subchapter V of Chapter 11
of the U.S. Bankruptcy Code (Bankr. S.D. Fla. Case No. 24-17288) on
July 20, 2024. In the petition filed by Johania Tomas, as Diaz as
president, the Debtor reports total assets of $593,418 and total
liabilities of $1,050,153.
The Honorable Bankruptcy Judge Robert A. Mark oversees the case.
The Debtor is represented by:
Jeffrey N. Schatzman, Esq.
SCHATZMAN & SCHATZMAN, P.A.
9990 S.W. 77th Ave Penthouse 2
Miami, FL 33156-8115
Tel: (305) 670-6000
Email: jschatzman@schatzmanlaw.com
ADDMI INC: Bryan Perkinson of Sonoran Named Subchapter V Trustee
----------------------------------------------------------------
The U.S. Trustee for Region 14 appointed Bryan S. Perkinson of
Sonoran Capital Advisors as Subchapter V trustee for Addmi, Inc.
Mr. Perkinson will be paid an hourly fee of $450 for his services
as Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. Perkinson declared that he is a disinterested person according
to Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Bryan S. Perkinson
Sonoran Capital Advisors
1733 N. Greenfield Rd. Ste. 104
Mesa, AZ 85205
Telephone: 480-861-3649
Email; bperkinson@sonorancap.com
About Addmi Inc.
Addmi, Inc. provides a comprehensive Point of Sale solution that
includes features like loyalty programs, marketing tools,
timecards, and online ordering capabilities.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D.N.M. Case No. 24-10776) on July 29, 2024,
with $2,057,012 in assets and $1,171,244 in liabilities. Any Lim,
chief executive officer, signed the petition.
Judge Robert H. Jacobvitz presides over the case.
Christopher M. Gatton, Esq., at Gatton & Associates, P.C.
represents the Debtor as legal counsel.
ALEXANDER TRUCKING: Michael Carmel Named Subchapter V Trustee
-------------------------------------------------------------
The U.S. Trustee for Region 14 appointed Michael Carmel of Michael
W. Carmel, Ltd. as Subchapter V trustee for Alexander Trucking Co.,
Inc.
Mr. Carmel will be paid an hourly fee of $550 for his services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. Carmel declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Michael W. Carmel
Michael W. Carmel, Ltd.
80 E. Columbus Ave
Phoenix, AZ 85012-4965
Phone: 602-264-4965
Fax: 602-277-0144
Email: michael@mcarmellaw.com
About Alexander Trucking Co.
Alexander Trucking Co., Inc. filed a petition under Chapter 11,
Subchapter V of the Bankruptcy Code (Bankr. D. Ariz. Case No.
24-06092) on July 25, 2024, with $100,001 to $500,000 in assets and
$500,001 to $1 million in liabilities.
Christopher R. Kaup, Esq., at Tiffany & Bosco, P.A. represents the
Debtor as legal counsel.
ALLIANCE LAUNDRY: Moody's Affirms 'B2' CFR, Outlook Remains Stable
------------------------------------------------------------------
Moody's Ratings affirmed Alliance Laundry Systems LLC's B2
corporate family rating and B2-PD probability of default rating.
The outlook is maintained at stable.
Moody's also assigned B2 ratings to the company's proposed senior
secured first lien bank credit facility, comprised of a $2 billion
senior secured first lien term loan and $250 million senior secured
first lien revolving credit facility. The B2 ratings on the
existing senior secured first lien term loan and senior secured
first lien revolving credit facility have been reviewed in the
rating committee and remain unchanged.
Proceeds from the new capital structure will be used to refinance
Alliance Laundry's existing debt and to distribute a $890 million
dividend to shareholders, including majority-owner BDT Capital
Partners. The B2 ratings on the existing senior secured first lien
term loan and senior secured first lien revolving credit facility
remain unchanged as Moody's expect a full repayment with
transaction proceeds, at which time the ratings will be withdrawn.
"The affirmation and stable outlook reflect Alliance Laundry's
strong business profile and history deploying its consistent free
cash flow to reduce leverage," said Justin Remsen, Moody's Ratings
Assistant Vice President – Analyst.
"While pro forma leverage for the debt funded distribution will
increase to mid 6x, Moody's project debt-to-EBITDA to decline below
6x by the end of 2025," added Remsen.
Governance considerations were a key driver of the rating action.
Moody's consider the company's financial policy with respect to
shareholder distributions as aggressive given the large debt funded
dividend and potential for future dividends. Alliance Laundry's
track record of maintaining leverage below 6.0x somewhat offsets
its financial policies related to shareholder returns. The new
capital structure has a portability feature, representing future
event risk with potential change of control.
RATINGS RATIONALE
Alliance's B2 CFR reflects the company's position as a leading
manufacturer of commercial grade washers and dryers, with a
national presence and diverse portfolio of products and brands
globally. The rating is also supported by a high level of recurring
revenue from its large global commercial unit installed base,
robust operating margins and high barriers to entry in a largely
non-cyclical business.
The company's strong margin profile with relatively low capital
intensity allows it to generate over $120 million of annual free
cash flow. Moody's believe free cash flow will be primarily
allocated to debt repayment over the next 12-18 months.
Moody's expect the company to maintain good liquidity supported by
solid operating cash flow generation and a sizeable revolving
credit facility that will be undrawn at close. Alliance Laundry
will generate negative free cash flow in 2024 on account of the
proposed dividend distribution, but Moody's expect positive
operating cash flow generation for all quarters over the next 12-18
months despite the incremental interest burden and debt
amortization. The new revolving credit facility includes a
springing first lien net leverage ratio covenant of 8.5x if
availability is below 40%.
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 100% of
consolidated pro forma EBITDA and $400 million, plus any unused
amounts from the general debt basket, general restricted payment
basket and unrestricted subsidiary investment basket, plus
unlimited amounts subject to 5.25x first lien net leverage ratio.
There is an inside maturity sublimit up to the greater of $400
million and 100% of pro forma consolidated EBITDA.
The credit agreement is expected to include "J.Crew", "Chewy",
"Envision", "Pluralsight" and "Serta" provisions.
Amounts up to 100% of unused capacity from the builder basket, the
general restricted payment basket, the general restricted debt
payment basket, the general investment basket and the unrestricted
subsidiary investments basket may be reallocated to incur debt.
200% of available amounts under the restricted payments covenant
may be reallocated to make additional investments. Asset sale
proceeds may be used by the company to make permitted restricted
payments and restricted debt prepayments.
Carve out growth components include a high water mark feature.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if the company demonstrates a more
conservative financial policy, total debt-to-EBITDA is maintained
below 5.0x, adjusted EBITA-to-interest expense is above 3.0x, and
the company maintains its free cash flow profile.
The ratings could be downgraded if total debt-to-EBITDA is
maintained above 6.25x, adjusted EBITA-to-interest expense is below
2.0x, and the company's free cash flow and liquidity profile
deteriorates, with FCF/debt below 5%.
The principal methodology used in these ratings was Manufacturing
published in September 2021.
Headquartered in Ripon, WI, Alliance Laundry Systems LLC designs,
manufactures and markets a line of commercial laundry equipment
under various brands, including Speed Queen, Primus, Huebsch, IPSO
and UniMac in over 100 countries. Controlling shareholder BDT
Capital Partners acquired Alliance Laundry Systems in 2015.
ALLIED EROSION: Seeks to Hire Shaw & Hanover as General Counsel
---------------------------------------------------------------
Allied Erosion Specialist, Inc. seeks approval from the U.S.
Bankruptcy Court for the Central District of California to hire
Shaw & Hanover, PC as general counsel.
The firm's services include:
a. advising and assisting the Debtor in complying with the
requirements of the Office of the U.S. Trustee;
b. conducting examinations of witnesses, claimants or adverse
parties, and preparing related court documents;
c. advising the Debtor regarding matters of bankruptcy laws,
including its rights and remedies with respect to its assets and
claims of its creditors;
d. representing the Debtor in court proceedings or hearings;
e. advising the Debtor concerning the requirements of the
bankruptcy court, the Federal Rules of Bankruptcy Procedure, and
the Local Bankruptcy Rules;
f. filing legal papers to effectuate the Debtor's
reorganization;
g. reviewing claims filed in the Debtor's Chapter 11 case,
and, if appropriate, preparing objections to disputed claims;
h. representing the Debtor in litigation in the bankruptcy
court;
i. assisting the Debtor in the negotiation, formulation and
implementation of a Chapter 11 plan; and
j. providing other necessary legal services related to the
bankruptcy case.
Shaw & Hanover will be paid at these rates:
Summer Shaw, Managing Attorney $500 per hour
Alina Mamlyuk, Associate Attorney $400 per hour
Jennifer Blanton, Paralegals $175 per hour
Teresa Stone, Paralegals $175 per hour
Kyla Rist, Administrative Assistant $75 per hour
The firm received a retainer in the amount of $25,000.
As disclosed in court filings, Shaw & Hanover is a "disinterested
person" within the meaning of Section 101(14) of the Bankruptcy
Code.
The firm can be reached through:
Summer Shaw, Esq.
Shaw & Hanover, PC
42-600 Cook Street, Suite 210
Palm Desert, CA 92211
Telephone No: (760) 610-0000
Facsimile No: (760) 687-2800
Email: ss@shaw.law
About Allied Erosion Specialist, Inc.
Allied Erosion Specialist, Inc. filed its voluntary petition for
relief under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal.
Case No. 24-13501) on June 20, 2024, listing up to $50,000 in
assets and $1 million to $10 million in liabilities. The petition
was signed by James Mayes as chief executive officer and director.
Judge Magdalena Reyes Bordeaux presides over the case.
Summer Shaw, Esq. at SHAW & HANOVER, PC represents the Debtor as
counsel.
ALLIED UNIVERSAL: $500MM Loan Add-on No Impact on Moody's 'B3' CFR
------------------------------------------------------------------
Moody's Ratings said that Allied Universal Holdco LLC's proposed
$500 million add-on to its senior secured notes due 2031 does not
change the current ratings. The outlook is stable. Proceeds from
the issuance will be used to pay down the remaining $206 million of
company's existing 6.625% senior secured notes due July 2026 and
approximately $300 million of debt under the $1.6 billion
asset-based revolver. The transaction is leverage neutral; Moody's
adjusted total debt to EBITDA for the 12-month period ended March
13, 2024 was 8.1x.
RATINGS RATIONALE
The B3 Corporate Family Rating ("CFR") at Atlas Ontario LP ("Atlas
Ontario"), Allied Universal's holding company, reflects its highly
leveraged capital structure, thin profit margins, aggressive
acquisition history and concentrated ownership. The company
benefits from its market position as the largest security services
company in North America and globally, and the recession resistant
nature of the security services business. EBITDA margins of 8.5% to
9% are low relative to other essential business services companies
but similar to comparable security services companies. However,
security services, which accounts for over 90% of revenues,
features very low capital investment requirements, which benefits
cash flow profile. As the availability of labor further improves
and the company centralizes its international shared services
operations, margins should also improve. However, Moody's expect
that the debt financed acquisitions will continue, which will limit
leverage reduction.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if: 1) revenue continues to grow on
an organic and inorganic basis; 2) debt-to-EBITDA is expected to
remain below 7.0x; 3) profitability improves and is expected to
remain stable; and 4) free cash flow to debt is anticipated to
remain above 3.0%.
The ratings could be downgraded if 1) revenue growth rates decline
toward break-even whether due to loss in customers or market share;
2) leverage increases from current levels and is expected to be
sustained above 9x; 3) margins decline; or 4) liquidity
deteriorates.
All financial metrics cited reflect Moody's standard adjustments.
Allied Universal, headquartered in Conshohocken, Pennsylvania and
Santa Ana, California and controlled by affiliates of private
equity sponsors Warburg Pincus and CDPQ, is one of the world's
largest security and related services company. Revenue for FY 2023
was around $20.6 billion.
ARDELYX INC: Incurs $16.45 Million Net Loss in Second Quarter
-------------------------------------------------------------
Ardelyx, Inc. filed with the Securities and Exchange Commission its
Quarterly Report on Form 10-Q reporting a net loss of $16.45
million on $73.22 million of total revenues for the three months
ended June 30, 2024, compared to a net loss of $17.12 million on
$22.33 million of total revenues for the three months ended June
30, 2023.
For the six months ended June 30, 2024, the Company reported a net
loss of $42.97 million on $119.25 million of total revenues,
compared to a net loss of $43.89 million on $33.70 million of total
revenues for the same period during the prior year.
As of June 30, 2024, the Company had $343.49 million in total
assets, $196.50 million in total liabilities, and $146.99 million
in total stockholders' equity.
Management Comments
"In the second quarter, Ardelyx demonstrated our commitment to our
mission and to ensuring that patients remain at the forefront of
all of our efforts. We continued to drive expanded awareness and
use of our two first-in-class medicines that represent new
therapeutic options for patients who continue to have significant
unmet medical needs. In addition, importantly, we are standing
with the entire kidney community and fighting for patients whose
health is at risk," said Mike Raab, president and chief executive
officer of Ardelyx.
Raab continued, "IBSRELA's strong performance continued with
consistent quarter-over-quarter gains. This performance further
strengthens our conviction that IBSRELA is on track to achieve at
least ten percent market share and $1 billion in annual sales
before patent expiry. IBSRELA is providing meaningful clinical
benefits to patients at a time when the need among IBS-C patients
to address their symptoms remains significant. We believe IBSRELA
is well placed to address this unmet need and we continue to
invest, including the ongoing expansion of our sales team to
further our growth trajectory. XPHOZAH's remarkable performance
continued, a clear indicator of the need for a novel therapy, like
XPHOZAH, to help patients achieve target phosphorus levels. This
is why it is so important that we take steps to protect patients
against the dire consequences of the access restrictions that will
occur if CMS moves oral-only phosphate lowering therapies into the
End-Stage Renal Disease Prospective Payment System."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1437402/000162828024034121/ardx-20240630.htm
About Ardelyx Inc.
Headquartered in Waltham, Massachusetts, Ardelyx, Inc. --
www.ardelyx.com -- is a biopharmaceutical company founded with a
mission to discover, develop and commercialize innovative,
first-in-class medicines that meet significant unmet medical needs.
The Company developed a unique and innovative platform that
enabled the discovery of new biological mechanisms and pathways to
develop potent, and efficacious therapies that minimize the side
effects and drug-drug interactions frequently encountered with
traditional, systemically absorbed medicines.
Ardelyx reported a net loss of $66.07 million in 2023, a net loss
of $67.21 million in 2022, a net loss of $158.16 million in 2021, a
net loss of $94.31 million in 2020, and a net loss of $94.94
million in 2019.
ARGO HARDWARE: Linda Gore Named Subchapter V Trustee
----------------------------------------------------
J. Thomas Corbett, the U.S. Bankruptcy Administrator for the
Northern District of Alabama, appointed Linda B. Gore as Subchapter
V trustee for Argo Hardware, Inc.
The Subchapter V trustee can be reached at:
Linda B. Gore
Post Office Box 1338
Gadsden, AL 35902
Telephone No. 256-546-9262
Email: linda@ch13gadsden.com
About Argo Hardware
Argo Hardware, Inc., a company in Trussville, Ala., filed a
petition under Chapter 11, Subchapter V of the Bankruptcy Code
(Bankr. N.D. Ala. Case No. 24-40873) on July 29, 2024, with
$175,746 in assets and $1,008,965 in liabilities. Glen Waldrop,
president, signed the petition.
Judge James J. Robinson presides over the case.
Steven D. Altmann, Esq., at Altmann Law Firm, LLC represents the
Debtor as bankruptcy counsel.
ASPIRA WOMEN'S: Inks $4.45M Offering Agreement With H.C. Wainwright
-------------------------------------------------------------------
Aspira Women's Health Inc. disclosed in a Form 8-K filed with the
Securities and Exchange Commission that on Aug. 2, 2024, it entered
into an At The Market Offering Agreement with H.C. Wainwright &
Co., LLC, to sell shares of its common stock, par value $0.001 per
share, having an aggregate sales price of up to $4,450,000, from
time to time, through an "at the market offering" program under
which Wainwright will act as sales agent. The sales, if any, of
the Shares made under the ATM Agreement will be made by any method
permitted by law deemed to be an "at the market offering" as
defined in Rule 415 promulgated under the Securities Act of 1933,
as amended.
The Company will pay Wainwright a commission rate equal to 3.0% of
the aggregate gross proceeds from each sale of Shares and have
agreed to provide Wainwright with customary indemnification and
contribution rights. The Company will also reimburse Wainwright
for certain specified expenses in connection with entering into the
ATM Agreement. The ATM Agreement contains customary
representations and warranties and conditions to the sale of the
Shares pursuant thereto.
The Company is not obligated to sell any of the Shares under the
ATM Agreement and may at any time suspend solicitation and offers
thereunder. The offering of Shares pursuant to the ATM Agreement
will terminate on the earlier of (1) the sale, pursuant to the ATM
Agreement, of Shares having an aggregate offering price of
$4,450,000 and (2) the termination of the ATM Agreement by either
the Company or Wainwright, as permitted therein.
The Shares will be issued pursuant to the Company's shelf
registration statement on Form S-3 (File No. 333-278867) filed by
the Company with the SEC on April 22, 2024 and declared effective
by the SEC on April 25, 2024.
On Aug. 2, 2024, the Company terminated its Controlled Equity
Offering Sale Agreement dated Feb. 10, 2023 with Cantor Fitzgerald
& Co.
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 a 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.
AUBREY PROPERTIES: Case Summary & Six Unsecured Creditors
---------------------------------------------------------
Debtor: Aubrey Properties, LLC
4425 Cascade Road
Atlanta GA 30331
Business Description: The Debtor is engaged in activities related
to real estate.
Chapter 11 Petition Date: August 4, 2024
Court: United States Bankruptcy Court
Northern District of Georgia
Case No.: 24-58027
Debtor's Counsel: Benjamin Keck, Esq.
KECK LEGAL, LLC
2801 Buford Highway NE 115
Atlanta GA 30329
Tel: 470-826-6020
E-mail: bkeck@kecklegal.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Angela Oakley as sole member.
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/O7PRYQY/Aubrey_Properties_LLC__ganbke-24-58027__0001.0.pdf?mcid=tGE4TAMA
BEX AESTHETIX: Areya Holder Aurzada Named Subchapter V Trustee
--------------------------------------------------------------
The U.S. Trustee for Region 6 appointed Areya Holder Aurzada, Esq.,
at Holder Law as Subchapter V trustee for Bex Aesthetix Boutique,
Inc.
Ms. Aurzada will be paid an hourly fee of $575 for her services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Ms. Aurzada declared that she is a disinterested person according
to Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Areya Holder Aurzada, Esq.
Holder Law
901 Main Street, Ste. 5320
Dallas, TX 75202
Office: 972-438-8800
Mobile: 817-907-4140
About Bex Aesthetix Boutique
Bex Aesthetix Boutique, Inc. sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. N.D. Texas Case No. 24-42564) on
July 25, 2024, with $50,001 to $100,000 in assets and $500,001 to
$1 million in liabilities.
Judge Edward L. Morris presides over the case.
Robert Lane, Esq., at The Lane Law Firm, PLLC represents the Debtor
as bankruptcy counsel.
BION ENVIRONMENTAL: President Mark A. Smith Retires
---------------------------------------------------
Bion Environmental Technologies, Inc., disclosed in a Form 8-K
filed with the Securities and Exchange Commission that on July 31,
2024 Mark A. Smith commenced his long-anticipated retirement from
his various positions (including director, president, interim chief
financial officer and general counsel) at the Company and its
subsidiaries, effective on July 31, 2024.
Effective Aug. 1, 2024, Stephen Craig Scott has assumed the role of
Interim CEO. Greg Schoener will continue in his role as Interim
COO.
About Bion Environmental
Headquartered in Old Bethpage, New York, Bion Environmental
Technologies, Inc.'s patented Ammonia Recovery System produces
organic and low-carbon nitrogen fertilizer products and clean water
from animal manure waste and other organic waste streams. It
supports the Gen3Tech system that will minimize environmental
impacts from CAFO/ livestock waste, generate Renewable Natural Gas,
improve resource and production efficiencies, and produce the
'cleanest', most eco-friendly finished beef in the marketplace.
Bion is focused on developing state-of-the-art indoor cattle
feeding operations and providing solutions in the fast-growing
clean fuels industry. See Bion's website at
https://bionenviro.com.
"The Company incurred a net loss of $2,002,000 and $2,507,000 for
the nine months ended March 31, 2024 and 2023, respectively. At
March 31, 2024, the Company has a working deficit and a
stockholders' equity of approximately $4,290,000 and $3,355,000,
respectively. The Company has never generated significant
operating revenues (even though it earned a net income of
$8,291,000 for the year ended June 30, 2022) and incurred a net
loss of approximately ($3,189,000) during the year ended June 30,
2023. The net income for the year ended June 30, 2022 was largely
due to a one-time, non-cash event of the dissolution of Bion PA-1,
LLC ("PA-1") resulting in a gain of approximately $10,235,000 as
well as a one-time gain of $902,000 from the sale of the Company's
'biontech.com' domain pursuant to a purchase agreement during the
period. During the year ended June 30, 2023 the Company had debt
modifications that resulted in a reduction of debt of $3,516,000
and an increase in equity. The Company's lack of revenue and/or
operating profits, together with the low likelihood of generating
positive cash flow and/or net income during the next 12-24 months,
raise substantial doubt about the Company's ability to continue as
a going concern," the Company said in its Quarterly Report for the
period ended March 31, 2024.
BIOTRICITY INC: Falls Short of Nasdaq Minimum Bid Price Requirement
-------------------------------------------------------------------
Biotricity Inc. disclosed in a Form 8-K filed with the Securities
and Exchange Commission that on July 26, 2024, it received a letter
from the staff of The Nasdaq Capital Market LLC stating that the
Company's closing bid price for the last 30 consecutive business
days was less than $1.00 per share. As a result, the Company does
not satisfy the continued listing requirement to maintain a minimum
bid price of $1.00 per share, as set forth in Nasdaq Listing Rule
5550(a)(2). The notification had no immediate effect on the
listing or trading of the common stock on the Nasdaq Capital
Market.
Nasdaq Listing Rule 5810(c)(3)(A) provides a compliance period of
180 calendar days, or until Jan. 22, 2025, to regain compliance.
If at any time during this 180-day period the closing bid price of
the Company's common stock is at least $1.00 for a minimum of ten
consecutive business days, the Company will regain compliance. If
the Company is unable to regain compliance before the Compliance
Date, the Company may be eligible for an additional 180 calendar
days to satisfy the Bid Price Rule. To qualify, the Company will
be required to meet the continued listing requirement for market
value of publicly held shares and all other initial listing
standards for the Nasdaq Capital Market with the exception of the
bid price requirement, and will need to provide written notice of
its intention to cure the deficiency during such additional
compliance period, by effecting a reverse stock split, if
necessary. If the Company does not regain compliance by the
Compliance Date and is not eligible for the additional compliance
period at that time, the Nasdaq Capital Market will provide written
notification to the Company that its common stock may be delisted.
The Company intends to monitor the closing bid price of its common
stock and may, if appropriate, consider available options to regain
compliance with the Bid Price Rule.
About Biotricity
Headquartered inRedwood City, CA, Biotricity Inc. is a medical
technology company focused on biometric data monitoring solutions.
The Company's aim is to deliver innovative, remote monitoring
solutions to the medical, healthcare, and consumer markets, with a
focus on diagnostic and post-diagnostic solutions for lifestyle and
chronic illnesses. The Company approaches the diagnostic side of
remote patient monitoring by applying innovation within existing
business models where reimbursement is established. The Company
believes this approach reduces the risk associated with traditional
medical device development and accelerates the path to revenue. In
post-diagnostic markets, the Company intends to apply medical grade
biometrics to enable consumers to self-manage, thereby driving
patient compliance and reducing healthcare costs. The Company
intends to first focus on a segment of the diagnostic mobile
cardiac telemetry market, otherwise known as COM, while providing
its chosen markets with the capability to also perform other
cardiac studies.
Richmond Hill, Ontario, Canada-based SRCO Professional Corporation,
the Company's auditor since 2015, issued a "going concern"
qualification in its report dated June 26, 2024, citing that the
Company has incurred recurring losses from operations, has negative
cash flows from operating activities, working capital deficiency
and has an accumulated deficit that raise substantial doubt about
its ability to continue as a going concern.
BRENDAN GOWING: Priority Services Loses Bid to Lift Automatic Stay
------------------------------------------------------------------
Judge Eduardo V. Rodriguez of the United States Bankruptcy Court
for the Southern District of Texas denied Priority Services Inc.'s
request to lift the automatic stay in the bankruptcy case of
Brendan Gowing, Inc.
Priority Services asks the Court to either (1) make a finding
pursuant to Sec. 362(n)(1)(B) that the stay is inapplicable in
light of Debtors' previously dismissed Small Business Case, or, in
the alternative, (2) find that its interests are not adequately
protected and lift the automatic stay pursuant to Sec. 362(d)(1).
Debtors contend that Sec. 362(n) is inapplicable because the
current case was brought under subchapter V, and that Priority's
interests are adequately protected because the value of Debtors'
interest in the property at issue, 3600 Michaux, Houston, TX 77009,
is fully secured and not declining in value.
Under Sec. 362(n)(1)(B), the automatic stay does not come into
effect if three elements are satisfied:
(a) the debtor was a debtor in small business case;
(b) that case was dismissed; and
(c) the order dismissing that case became final in the two-year
period ending on the date of the order for relief.
The first element is satisfied, as there is no dispute that
Debtors' First Bankruptcy was in fact a small business case.
On February 21, 2024, Debtors' First Bankruptcy was dismissed with
prejudice. Upon motion and order the dismissal with prejudice was
vacated and the case was dismissed without prejudice on March 26,
2024. Thus, the second element is satisfied.
The order dismissing Debtors' First Bankruptcy was entered on March
26, 2024, which was within the two-year period preceding the filing
of the instant case on June 4, 2024. That order is also now a final
order.
Although unargued by Debtors, the Court will briefly consider if an
exception to Sec. 362(n)(1) applies.
There are two exceptions to Sec. 362(n)(1) located in Sec.
362(n)(2):
(2) Paragraph (1) does not apply --
(A) to an involuntary case involving no collusion by the debtor
with creditors; or
(B) to the filing of a petition if --
(i) the debtor proves by a preponderance of the evidence that
the filing of the petition resulted from circumstances beyond the
control of the debtor not foreseeable at the time the case then
pending was filed; and
(ii) it is more likely than not that the court will confirm a
feasible plan, but not a liquidating plan, within a reasonable
period of time.
The Court notes that Debtors did not argue that either exception
applies in the present case. Furthermore, because this is not an
involuntary case section (A) does not apply, and section (B) is not
satisfied because Debtors' failed to demonstrate by a preponderance
of evidence that it will confirm a feasible non-liquidating plan
within a reasonable period of time, the Court holds. In fact, by
their own admission, Debtors indicate that it is their intention to
sell the Property, which is its only significant asset of the
estate, to pay creditors, the Court notes. Accordingly, the Court
finds that all elements of Sec. 362(n)(1)(B) are satisfied, that no
exception applies, and that the automatic stay never came into
effect in the instant subchapter V Case as to any of the Debtors.
As such, the Court need not consider Priority's alternative
argument under Sec. 362(d)(1).
A copy of the Court's decision dated July 26, 2024, is available at
https://urlcurt.com/u?l=znsgxi
About Brendan Gowing, Inc.
Brendan Gowing, Inc. and Brendan F. Gowing filed their voluntary
petitions for relief under Chapter 11 of the Bankruptcy Code
(Bankr. S.D. Tex. Lead Case No. 24-32631) on June 4, 2024, listing
$1,000,001 to $10 million in both assets and liabilities.
Judge Eduardo V Rodriguez presides over the case.
Robert C Lane, Esq., at The Lane Law Firm represents the Debtor as
counsel.
BUCA TEXAS: Case Summary & 30 Largest Unsecured Creditors
---------------------------------------------------------
Lead Debtor: BUCA Texas Restaurants LP
4700 Millenia Boulevard, Suite 400
Orlando, FL 32839
Business Description: The Debtors are owners, operators, and
franchisors of family-style Italian-
American restaurants. With approximately 44
owned locations across 14 states and two
international franchised locations, Buca di
Beppo is known for its large portions,
eclectic decor, and a festive atmosphere
that encourages sharing and communal dining.
The Debtors' operations have been impacted
by a significant drop in sales, rising food
and labor costs, continued staffing
challenges, and changes in consumer
preferences.
Chapter 11 Petition Date: August 4, 2024
Court: United States Bankruptcy Court
Northern District of Texas
Ten affiliates that concurrently filed voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code:
Debtor Case No.
------ --------
BUCA Texas Restaurants LP (Lead Case) 24-80058
BUCA Texas Beverage, Inc. 24-80059
BUCA C, LLC 24-80060
BUCA Sales & Marketing, LLC 24-80061
BUCA Investments, Inc. 24-80062
BUCA Restaurants, Inc. 24-80063
BUCA Restaurants 2, Inc. 24-80064
BUCA (Celebration), LLC 24-80065
BUCA (Ex), LLC 24-80066
BUCA (Minneapolis), Inc. 24-80067
Judge: Hon. Stacey G Jernigan
Debtors' Counsel: Amber M. Carson, Esq.
Jason S. Brookner, Esq.
Micheal W. Bishop, Esq.
Emily F. Shanks, Esq.
GRAY REED
1601 Elm Street, Suite 4600
Dallas, Texas 75201
Tel: (214) 954-4135
Fax: (214) 953-1332
Email: acarson@grayreed.com
jbrookner@grayreed.com
mbishop@grayreed.com
eshanks@grayreed.com
Debtors'
Financial
Advisor: CR3 PARTNERS, LLC
Debtors'
Investment
Banker: STOUT CAPITAL, LLC
Debtors'
Claims &
Noticing
Agent: STRETTO, INC.
BUCA Texas Restaurants'
Estimated Assets: $0 to $50,000
BUCA Texas Restaurants'
Estimated Liabilities: $10 million to $50 million
BUCA C, LLC's
Estimated Assets: $10 million to $50 million
BUCA C, LLC's
Estimated Liabilities: $50 million to $100 million
The petitions were signed by William Snyder as chief restructuring
officer.
Full-text copies of four of the Debtors' petitions are available
for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/J2IX2UY/BUCA_Texas_Restaurants_LP__txnbke-24-80058__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/EZRMZUA/BUCA_Texas_Beverage_Inc__txnbke-24-80059__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/FFGQIWY/BUCA_C_LLC__txnbke-24-80060__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/FBMGMHA/BUCA_Sales__Marketing_LLC__txnbke-24-80061__0001.0.pdf?mcid=tGE4TAMA
Consolidated List of Debtors' 30 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
1. Sysco Food Provider $6,856,050
1390 Enclave Parkway
Houston, TX 77077-2099
c/o Legal Department
Phone: 281-584-1390
Email: customer@sysco.com
2. Edward Don Small Ware $2,356,109
2562 Paysphere Circle Packaging
Chicago, IL 60674 Provider
Attn: CEO or General Counsel
Phone: 800-777-4366
Email: webmaster@don.com
3. Country Club Plaza Landlord $609,750
KC Partners LLC
4706 Broadway
Kansas City, MI 64112
Attn: CEO or General Counsel
Phone: 816-753-0100
Email: info@countryclubplaza.com
4. AFA Protective Systems Inc Fire Alarm/ $393,196
155 Michael Dr Safety
Syasset, NY 11791
Attn: CEO or General Counsel
Tel: 781-848-6200
Fax: 781-380-3694
Email: national@afap.com
5. Brinks Inc Armored $382,694
7373 Solutions Center Car Service
CHICAGO, IL 60677-7003
Attn: CEO or General Counsel
Phone: 804-289-9600
Email: csc-dfw@brinksinc.com
6. KRE YTC Venture LLC Landlord $340,671
26074 Network Place
Chicago, IL 60673-1260
Attn: CEO or General Counsel
7. CH Robinson Worldwide Inc Produce Provider $284,358
14701 Charlson Rd (PACA Claim)
Eden Prairie, MN 55347
Attn: CEO or General Counsel
Phone: 952-683-2800
8. Hansen Foodservice Hawaii Food $282,661
96-1282 Wiahona St Provider
Pearl City, HI 96782
Attn: CEO or General Counsel
Tel: 808-456-3334
Fax: 808-455-5666
9. ARA Properties Op P'Shp Landlord $248,333
ID 065629065630 Dept 880044
USRP Funding 2001-ALP
Phoenix, AZ 85038-9650
Attn: CEO or General Counsel
10. 7979 Center LLC Landlord $241,401
60 West Cochran Street
Simi Valley, CA 93065
Attn: Leo Shahinian
Phone: 805-823-8388
11. EEC Acqusition, LLC Landlord $233,154
PO Box 74008980
CHICAGO, IL 60674-8980
Attn: CEO or General Counsel
Phone: 888-887-1675
Email: M&A@Smartcaresolutions.com
12. First Exquisite Homes L.L.C Landlord $299,640
3404 N Narcissus Ave
Broken Arrow, OK 74012
Attn: CEO or General Counsel
Phone: 206-653-6688
13. Nationwide Realty Investors Landlord $227,432
375 North Front St
Suite 200
Columbus, OH 43215
Attn: CEO or General Counsel
Phone: 614-857-2330
14. Ecolab Dish Machine, $224,688
6233 W 65Th St Cleaning Supplies,
Chicago, IL 60638 Pest Control
Attn: CEO or General Counsel
Tel: 708-496-5064
Fax: 708-496-5007
15. 44 Platt Brothers LLC Landlord $210,849
29 Pheasant Ridge Drive
Loudonville, NY 12211
Attn: Jeffrey M. Platt, Member
Email: pdamin@lemerygreisler.com
16. Valpak Direct Mailer/ $195,333
Marketing Systems Advertising
1 Valpak Ave North
St Petersburg, FL 33716
Attn: CEO or General Counsel
Phone: 800-661-0967
17. Ben Hur Celebration LLC Landlord $175,584
2400 US Highway 1
North Brunswick, NJ 08902
Attn: CEO or General Counsel
18. Cashman and Hobbes LLC Landlord $172,890
680 Ridgecrest Rd
Canyon, CA 94516
Attn: CEO or General Counsel
19. Pavillion Holdings LLC Landlord $160,808
3131 E Camelback Road
Suite 310
Phoenix, AZ 85016
Attn: Tom Tait
Phone: 602-330-0148
Email: laurie@taitdevelopment.com;
lindsi@theburgesslawgroup.com
20. Johnson Controls US Fire Protection, $154,922
Holdings LLC Security, and
5757 N. Green Bay Ave. HVAC Controls
PO Box 591
Milwaukee, WI 53201
Attn: John Donofrio
Phone: 877-862-0697; 866-496-1999
21. City Investors XXX LLC Landlord $154,122
505 Fifth Avenue S., Suite 900
Seattle, WA 98104
Attn: Chief Real Estate Officer
Phone: 206-342-2025
Email: Info@VulcanRealEstate.com
22. Forest City Bessemer Court Landlord $151,735
1700 3rd Ave North
Bessemer, AL 35020
Attn: CEO or General Counsel
Phone: 205-424-4060
23. Blau Family LLC Landlord $151,518
3982 Archdale Rd
Encino, CA 91436
Attn: Carl Blau
Phone: 818-886-6848
24. Maitland is My Land II LLC Landlord $144,727
4941 Southwest 38th Way
Fort Lauderdale, FL 33312
c/o Adam J Tiktin
Phone: 786-522-7039
25. New Castle Corporation Landlord $143,897
641 Danbury Rd
Ridgefield, CT 06877
Attn: CEO or General Counsel
Phone: 203-925-8370
26. Republic Services Inc Trash Services $143,316
18500 N Allied Way
Phoenix, AZ 85054-6164
Attn: Corporate Customer
Experience
Phone: 480-627-2700
Email: corporateoffice@republicservices.com
27. Chandler's Air Conditioning & Air Conditioning $134,383
Refrigeration & Refrigeration
1702 W Fifth Street
Santa Ana, CA 92703-2899
Attn: Adelphia Inc
Phone: 714-973-1771; 310-323-2665
Email: info@chandlersair.net
28. Windstream Holdings Inc Internet/Wifi $128,394
208 E Center St
Sheridan, AR 72150
Attn: CEO or General Counsel
Phone: 800-501-1776; 501-748-6250;
Phone: 501-748-5342
Fax: 330-487-2738
Email: brandi.stafford@windstream.com;
scott.l.morris@windstream.com
29. BH 15350 S 94th Avenue LLC Landlord $126,237
4700 Millenia Blvd
Suite 400
Orlando, FL 32839
Attn: CEO or General Counsel
Phone: 708-349-6262
Email: privacy@bucainc.com
30. Silver State Refrigeration Refrigeration and $124,452
and HVAC LLC HVAC Maintenance
4535 Copper Sage St
Las Vegas, NV 89115
Attn: Brian Peterson
Phone: 725-213-7309
BYJU ALPHA: Ex-Director Fined $10K a Day for Missing $533M
----------------------------------------------------------
Steven Church of Bloomberg News reports that a suspended director
of the troubled Indian educational tech firm Byju's must pay
$10,000 a day until he helps locate $533 million that his company
is accused of hiding from US lenders, a judge said Wednesday.
Riju Ravindran, brother of Byju's founder, has been at the center
of a nearly two-year-old fight over the missing cash, which lenders
say should be returned to them after the company defaulted.
Ravindran is one of three directors of Think & Learn Pvt. — which
operates the Byju's brand — who were recently replaced by a
trustee as part of an involuntary bankruptcy.
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.
CDO LONESTAR: Claims Will be Paid from Property Sale/Refinance
--------------------------------------------------------------
CDO Lonestar Investments LLC filed with the U.S. Bankruptcy Court
for the Western District of Texas a Disclosure Statement describing
Plan of Reorganization dated July 17, 2024.
The Debtor is a limited liability company organized under the laws
of the state of Texas. Since 2022, the Debtor has been in the
business of a real estate holding company.
The Debtor has acquired one parcel of commercial real property
located at 7570 IH 35 New Braunfels, Comal County Texas (the "Real
Property"). The Real Property consists of 6.058 acres and has
improvements that consists of office and warehouse space.
The Debtor leased the Real Property to a related entity Lonestar
Pools of TX Inc. Lonestar Pools of TX Inc operated a business on
the Real Property. That business has not generated sufficient cash
flow to make the lease payment to Debtor. Without positive cash
flow, Debtor was unable to make the mortgage payment and the
secured creditor initiated foreclosure proceedings. Debtor believes
there is significant equity in the Real Property and filed this
chapter 11 case to prevent the loss of that equity.
The Debtor's sole asset is the Real Property. Debtor believes the
Real Property has a value of $7,000,000.00. The source of this
value is based on recent comparable sales of similar commercial
real property. As the total of all claims asserted against the Real
Property do not exceed $5,000,000.00, Debtor believes the sale or
liquidation of the Real Property, if necessary, will generate sale
proceeds sufficient to pay all claims and administrative expenses
leaving funds available for Debtor's equity holders.
The Plan provides that Debtor shall have 90 days from September 1,
2024 to refinance the Real Property for an amount sufficient to pay
the secured and priority claims asserted against the Debtor. If the
Real Property is not re-financed within the 90 days of filing the
Plan, the Debtor shall then market the Real Property for sale. The
Debtor shall have 180 days to sell the Real Property for an amount
sufficient to pay the secured and priority claims asserted against
the Debtor.
The Debtor does not have any General Unsecured Claims.
Equity interest holder Christopher Owens shall retain all equity
interest.
Payments and distributions under the Plan will be funded from the
closing of the refinance loan or sale of the Real Property.
A full-text copy of the Disclosure Statement dated July 17, 2024 is
available at https://urlcurt.com/u?l=SCbv3m from PacerMonitor.com
at no charge.
Counsel to the Debtor:
Morris E. White III, Esq.
VILLA & WHITE, LLP
1100 NW Loop 410 #802
San Antonio, TX 78213
Telephone: (210) 225-4500
Facsimile: (210) 212-4649
Email: treywhite@villawhite.com
About CDO Lonestar Investments
CDO Lonestar Investments LLC is a Single Asset Real Estate debtor
(as defined in 11 U.S.C. Section 101(51B)).
CDO Lonestar Investments LLC filed its voluntary petition for
relief under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Tex.
Case No. 24-50672) on April 18, 2024, listing $1 million to $10
million in both assets and liabilities. The petition was signed by
Christopher Owens as member.
Judge Michael M. Parker presides over the case.
Morris E. "Trey" White, III, Esq. at Villa & White LLP, is the
Debtor's counsel.
CELSIUS NETWORK: Sarachek Advises Committee of Corporate Creditors
------------------------------------------------------------------
In the Chapter 11 cases of Celsius Network LLC and its debtor
affiliates, the Ad Hoc Committee of Corporate Creditors filed a
verified statement in accordance with Rule 2019 of the Federal
Rules of Bankruptcy Procedure.
On or around July 31, 2024, the Ad Hoc Committee of Corporate
Creditors formed and retained Sarachek Law Firm ("SLF") to
represent it as legal counsel in connection with resolving issues
that relate to the Motion Seeking Entry of an Order (I) Approving
Further Distribution Under Plan of Reorganization for the Faller
Creditors and (II) Granting Related Relief, dated June 3, 2024
filed in the case and joined by approximately 43 creditors.
As of the date hereof SLF still represents the Faller Creditors, in
addition to the Ad Hoc Committee of Corporate Creditors, however
SLF does not represent or purport to represent any other entities
in connection with the Debtors' chapter 11 cases.
SLF does not hold any disclosable economic interests (as that term
is defined in Bankruptcy Rule 2019(a)) in relation to the Debtors.
Joseph E. Sarachek, managing member of SLF, also has an economic
interest in SLFAQ, LLC, a corporate creditor of the Debtor.
The names, addresses, and disclosable economic interests of all the
members of the Ad Hoc Committee of Corporate Creditors, are as
follows:
Corporate Entity Representative Individual Claim Amount
---------------- ------------------------- ------------
Clypeum Inc. Riece Keck $304,086.25
Jinwest LLC Wesley Chang $340,167.32
Simba Discretionary Trust John Hitti $446,324.00
BFaller RD LLC Laura Faller McNei $716,632.83
BFaller Roth RD LLC Laura Faller McNeil $118,029.08
SFaller RD LLC Laura Faller McNeil $118,124.38
SFaller TRD RD LLC Laura Faller McNeil $144,779.18
Karma Organization LLC Karm Choudhry $152,361.45
Siddhartha Super Pty Ltd Paul Colagiuri $25,375.70
aft Colagiuri Superfund
The law firm can be reached at:
Joseph E. Sarachek, Esq.
Zachary E. Mazur, Esq.
SARACHEK LAW FIRM
670 White Plains Rd. – Penthouse
Scarsdale, New York 10583
Telephone: (646) 403-9775
Facsimile: (646) 861-4950
About Celsius Network
Celsius Network LLC -- http://www.celsius.network/-- is a
financial services company that generates revenue through
cryptocurrency trading, lending, and borrowing, as well as by
engaging in proprietary trading.
Crypto lenders such as Celsius boomed during the COVID-19 pandemic,
drawing depositors with high interest rates and easy access to
loans rarely offered by traditional banks. But the lenders'
business model came under scrutiny after a sharp sell-off in the
crypto market spurred by the collapse of major tokens terraUSD and
luna in May 2022.
New Jersey-based Celsius froze withdrawals in June 2022, citing
"extreme" market conditions, cutting off access to savings for
individual investors and sending tremors through the crypto
market.
The list of major crypto firms that have filed for bankruptcy
protection in 2022 now includes Celsius Network, Three Arrows
Capital and Voyager Digital.
Celsius Network, LLC and its subsidiaries sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Lead Case
No. 22-10964) on July 14, 2022. In the petition filed by CEO Alex
Mashinsky, the Debtors estimated assets and liabilities between $1
billion and $10 billion.
The Debtors tapped Kirkland & Ellis, LLP as bankruptcy counsel;
Fischer (FBC & Co.) as special counsel; Centerview Partners, LLC as
investment banker; and Alvarez & Marsal North America, LLC, as
financial advisor. Stretto is the claims agent and administrative
advisor.
On July 27, 2022, the U.S. Trustee appointed an official committee
of unsecured creditors. The committee tapped White & Case, LLP, as
its bankruptcy counsel; Elementus Inc. as its blockchain forensics
advisor; M3 Advisory Partners, LP as its financial advisor; and
Perella Weinberg Partners, LP as its investment banker.
Shoba Pillay, Esq., is the examiner appointed in the Debtors'
Chapter 11 cases. Jenner & Block, LLP, and Huron Consulting
Services, LLC, serve as the examiner's legal counsel and financial
advisor, respectively.
* * *
Celsius Network LLC on Jan. 31, 2024 disclosed that it has
successfully emerged from bankruptcy by completing the transactions
under its confirmed plan of reorganization. The Plan was
overwhelmingly approved by approximately 98% of the Company's
account holders and confirmed by the Bankruptcy Court for the
Southern District of New York on November 9, 2023. The Plan
includes the distribution of over $3 billion of cryptocurrency and
fiat to Celsius' creditors, and the creation of a new Bitcoin
mining company -- Ionic Digital, Inc. -- which will be owned by
Celsius' creditors and will have its mining operations managed by
Hut 8 Corp. (Nasdaq | TSX: HUT).
CENTERPOINT RADIATION: No Patient Care Concern, 5th PCO Report Says
-------------------------------------------------------------------
Tamar Terzian, the court-appointed patient care ombudsman, filed
with the U.S. Bankruptcy Court for the Central District of
California her fifth interim report regarding the health care
facility operated by CenterPoint Radiation Oncology, LLC and
CenterPoint Radiation Oncology, Inc.
During the reporting period from May 13 to July 12, the companies
were treating approximately 15 to 20 patients. Dr. Morrell conducts
consultations for new patients Monday through Thursday and patients
receive treatment Monday through Friday. The physicist reviews the
plan of treatment within days and quality assurance will review the
plan, input the plan into the machine and run the machine to test
and monitor the dosage. There are two therapists that assure that
the patients are placed in the proper position and that the plan
treatment is properly implemented.
The PCO noted that each patient's medical records are well
maintained and accessible for staff using an electronic medical
record. Patients can make a written request to review or obtain a
copy of their medical record pursuant to Health and Safety Code
Sections 123100 through 123149.5.
Ms. Terzian reviewed a sampling of patient records during her site
visit. All medical records and reports were cited along with
complete course of care while admitted, and all consent forms were
executed. No concerns were noted.
The PCO observed treatment and monitoring of patient during her
site visit. There are no issues or concerns with respect to patient
care during this reporting period.
A copy of the ombudsman report is available for free at
https://urlcurt.com/u?l=wQgZvN from PacerMonitor.com.
The ombudsman may be reached at:
Tamar Terzian, Esq.
Terzian Law Group
1122 E. Green Street
Pasadena, CA 91106
Telephone: (818) 242-1100
Facsimile: (818) 242-1012
Email: tamar@terzlaw.com
About CenterPoint Radiation
CenterPoint Radiation Oncology, LLC and CenterPoint Radiation
Oncology, Inc. filed petitions under Chapter 11, Subchapter V of
the Bankruptcy Code (Bankr. C.D. Calif. Lead Case No. 23-13448) on
June 2, 2023. Judge Sheri Bluebond oversees the cases.
At the time of the filing, CenterPoint Radiation Oncology, LLC
reported $100,000 to $500,000 in assets and $1 million to $10
million in liabilities while CenterPoint Radiation Oncology, Inc.
reported as much as $50,000 in assets and $100,001 to $500,000 in
liabilities.
John-Patrick M. Fritz, Esq., at Levene, Neale, Bender, Yoo &
Golubchik, LLP is the Debtors' legal counsel.
Tamar Terzian is the patient care ombudsman appointed in the
Debtors' Chapter 11 cases.
CONN'S INC: Closes 71 Stores Amid Chapter 11 Talks
--------------------------------------------------
Nate Delesline III of Retail Dive reports that Conn's is closing 71
of its namesake stores in 13 states, according to a list posted on
its website. The stores slated for closure represent about 13% of
the 550 locations the furniture and home goods retailer operated
under two banners as of June 2024.
According to the company's website, Conn's is closing stores in
Alabama, Arizona, Colorado, Florida, Georgia, Louisiana,
Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee,
Texas and Virginia. Florida is set to lose the most stores, with 18
listed for closure, followed by Texas, with nine stores.
While only 70 locations are listed on the retailer's Website, a
Bloomberg report said the company is shuttering 100 stores, 30 of
which are Badcock locations. According to that report, Conn's is
also planning a bankruptcy filing in the coming weeks and is
searching for financing for the process.
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.
COR HOLDINGS: Files for Chapter 11 Bankruptcy Protection
--------------------------------------------------------
Cor Holdings LLC filed Chapter 11 protection in the Southern
District of New York. According to court documents, the Debtor
reports $4,134,115 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 21, 2024 at 12:30 p.m. at Office of UST (TELECONFERENCE
ONLY).
About Cor Holdings LLC
Cor Holdings LLC is engaged in activities related to real estate.
The Debtor has affiliate interests in multi dwellings rental
property located in Fonda, NY having an appraised value of $2
million and a real estate property located in Granville, NY having
an appraised value of $800,000.
Cor Holdings LLC sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D.N.Y. Case No. 24-35719) on July 23,
2024. In the petition filed by David Raven, as president, the
Debtor reports total assets of $2,806,500 and total liabilities of
$4,134,115.
The Debtor is represented by:
Robert Lewis, Esq.
ROBERT S LEWIS PC
29 Main Street
Nyack, NY 10960
Tel: (845) 358-7100
E-mail: Robert.lewlaw1@gmail.com
CPPIB OVM MEMBER: Fitch Assigns 'BB-' LongTerm IDR, Outlook Stable
------------------------------------------------------------------
Fitch Ratings has assigned a first-time Long-Term Issuer Default
Rating of 'BB-' to CPPIB OVM Member U.S. LLC (Holdco) and a
'BB'/'RR3' rating to the company's senior secured Term Loan B. The
Rating Outlook is Stable. Fitch has reviewed preliminary terms of
the loan transaction and assumes no material variations in the
final terms.
The ratings and Outlook are based on Holdco's ownership stake in
Ohio Valley Midstream LLC (JV Opco). This stake provides Holdco (an
investee of Canadian Pension Plan Investment Board [CPPIB]) with
steady distributions underpinned by fee-based revenue largely
protected by acreage dedications. Via JV Opco, Holdco benefits from
JV Opco's large collection of plants of various types, which are
essential for the exploitation of the rich gas in the western part
of the Appalachian basin.
The plants cover an extensive area and are well-networked with
large diameter pipelines (some owned by JV Opco, some owned by
third-parties). Holdco is exposed to various types of
concentration, but Fitch views this risk as moderate.
Key Rating Drivers
Mature Operations with Acreage Dedications: JV Opco has been
running its full network for about five years, and strong volume
performance in the last two years indicates that these operations
are mature. Field area pipelines and pipeline-connected plants
often evolve into natural monopolies over time. This recent volume
strength is supplemented by acreage dedications that customers
furnish JV Opco as part of their standard service contracts. This
can help during downturns or times of strong competition. JV Opco's
top three customers all provide acreage dedications in their
multi-services contracts.
The contracts stipulate that certain acreage, if producing, will
dedicate all of that production to JV Opco. EQT Corporation (EQT;
BBB-/Stable) is the largest customer by net revenue and has
dedicated almost 700,000 acres over several contracts, with an
average term of six years. The second largest customer has a term
of four years on a large number of acres. The third largest has
dedicated slightly over 400,000 acres for a life-time dedication.
JV Opco's contracts with long-term acreage dedications have a
remaining average life of eight years. Fitch believes JV Opco is
acceptably positioned to renegotiate adequate new contracts when
the current contracts end.
Holding Company Credit Quality: Holdco's only asset is its
ownership stake in JV Opco. Barring financing in-flows such as an
equity infusion, Holdco will service interest expense and the 1%
scheduled amortization using distributions from JV Opco. Fitch
calculates standalone leverage as Holdco debt divided by
distributions into Holdco. If slow and steady growth in the
Appalachian basin continues, Fitch expects that the LLC agreement
between Williams and Holdco will assure robust distributions and
lead to strong standalone leverage.
However, the midstream industry is dynamic, and companies and their
investors may seek significant growth. Therefore, Fitch also
assesses proportionately consolidated leverage. In the most salient
scenario JV Opco receives a large, lucrative growth opportunity
with a lengthy spend cycle (over 12 months) where the optimal
financing is cutting distributions. Both metrics are necessary to
evaluate Holdco over a range of scenarios.
Post-2024 Performance Uncertainty: Management reports that YTD 2024
performance has been solid. For the full year, Fitch forecasts
leverage will be low enough to support a higher rating than 'BB-'.
After 2024, and particularly during 2026-2027, Fitch believes the
joint venture partners may experience some challenges. It may be
difficult to keep EBITDA level (in the absence of growth spending).
Growth spending could become attractive and be financed with debt.
Growth spending carries short-term risk, even for projects based on
sound industrial logic and executed well. The Appalachia basin is
mature (for a shale region), and the region's competitive dynamic
has decreased from levels during 2014-2019 (when JV Opco's assets
were being built). Fitch still expects either JV Opco's customers
and/or JV Opco itself to create headwinds for Holdco's leverage
performance. The ratings and Outlook incorporate a scenario where
leverage rises higher than Fitch's negative rating action leverage
sensitivity for one year or less. Fitch takes a "rate through the
cycle" approach, including the capex cycle, which is a dominant
feature of the midstream sector.
Large Basin: The Appalachian basin is North America's largest
natural gas producing basin, and its reserves exhibit long-lived
prospects. The basin benefits from some of the best expertise and
capabilities in the world. Fitch views the risks associated with
only operating in a single basin as moderate. The company has a
light presence in Pennsylvania, and a heavy presence in each of
Ohio and West Virginia. This mix is beneficial, because
Pennsylvania hydrocarbon use is more politicized than in Ohio and
West Virginia. Other single-basin characteristics include local
hydrocarbon demand and take-away capacity to other regions of the
U.S., both of which are manageable in the Appalachian basin.
Customer Concentration: Three companies are forecasted to provide,
in aggregate, approximately 80% of revenues excluding electricity
reimbursement revenues. EQT became the largest customer by net
revenue due, in part, to its acquisitions of companies that were
doing business with JV Opco. EQT has extensive operations, some of
which are dry-gas-targeted, in other parts of the Appalachia basin,
away from JV Opco's area. The second largest customer, Encino
(B/Stable), is 100% owned by CPPIB. Southwestern Energy Company
(BB+/Watch Positive) is third largest, pro forma for the
consummation of its merger agreement with Chesapeake Energy.
Derivation Summary
Oryx Midstream Services Permian Basin LLC (Oryx; BB-/Stable) is a
peer of Holdco. Both companies have a large minority stake, a
non-operating stake, and a partner with at least a decade of
experience operating the assets owned by the joint venture entity.
Based on forecasted dividends received by Oryx and Holdco, Oryx is
about 2x bigger. In 2024 Oryx will have higher proportionately
consolidated leverage than Holdco. However, Holdco's ratings
incorporate the possibility that Holdco may have higher
proportionately consolidated leverage in the out years than Oryx.
For mild yet lengthy oil downsides (where Fitch assumes high
correlation for some of JV Opco's serviced volumes of natural gas
liquids), Fitch expects that Oryx's joint venture will see a
smaller percentage EBITDA drop than JV Opco. Fitch believes the
combination of a warm winter and low oil prices would cause further
divergence.
In the near term, Oryx is weakly positioned at its rating category,
while Holdco is strongly positioned. In the event that Holdco
pursues a conservative approach to growth (i.e., only doing
"no-regrets projects"), it may be able to carry its current low
leverage outlook into the medium term.
Key Assumptions
- Most of the Natural Gas Liquids that JV Opco handles maintain a
moderate-to-high correlation to West Texas Intermediate (WTI). WTI
in 2025 and beyond shows price realization at the Fitch price deck
(which shows backwardation). Additionally, the Fitch price deck is
used for U.S. natural gas.
- SOFR at the forecast of the Fitch Global Economic Outlook.
- Processing volumes show a slightly higher than immaterial decline
from the 2023-1H24 run-rate.
- About 12 months or more from now, a growth capex program of some
type is sanctioned, incremental to the current projection of
Holdco's management.
RATING SENSITIVITIES
Factors That Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Standalone EBITDA leverage below 4.5x on a sustained basis;
- Increase in size, as evidenced by a significant increase in size
of distribution inflows to Holdco (with such growth not being
debt-financed).
Factors That Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- An expectation that proportionately consolidated EBITDA leverage
will be above 4.5x;
- Projected standalone EBITDA leverage above 6.5x;
- Projected standalone EBITDA interest coverage below 2.0x;
- An increase in business risk, such as replacing 100% fee-based
status with a meaningful amount of commodity-sensitive revenues
Liquidity and Debt Structure
Adequate Liquidity: As part of its credit agreement, Holdco is
required to maintain a debt service reserve account equal to the
next six months' worth of interest and scheduled amortization. JV
Opco is unlevered, and all its cash flow is distributed to the
owners. Fitch expects Holdco to receive distributions to
comfortably remain above its 1.10x debt service coverage ratio
covenant.
The credit agreement has a tiered cash flow sweep that comes into
effect when distributions to CPPIB are made, and consolidated
leverage is greater than 4.0x when proportionately consolidated.
Issuer Profile
CPPIB OVM Member U.S. LLC owns a 35% stake in a company that
performs midstream services, i.e., gathering, processing,
transporting, fractionating, stabilizing, and terminalling of
natural gas and natural gas liquids.
Summary of Financial Adjustments
Fitch calculates standalone EBITDA leverage using the loan borrowed
by Holdco as the numerator and the distributions received by Holdco
as the denominator. Fitch calculates proportionately consolidated
EBITDA leverage using the loan borrowed by Holdco (the partners in
JV Opco have no plans for JV Opco debt) as the numerator, and the
denominator is Holdco's 35% share of JV Opco's EBITDA.
Date of Relevant Committee
26 July 2024
ESG Considerations
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Recovery
----------- ------ --------
CPPIB OVM Member
U.S. LLC LT IDR BB- New Rating
senior secured LT BB New Rating RR3
CRESCENT ENERGY: Fitch Hikes LongTerm IDR to 'BB-', Outlook Stable
------------------------------------------------------------------
Fitch Ratings has upgraded Crescent Energy Company's and Crescent
Energy Finance LLC's (Crescent) Long-Term Issuer Default Ratings
(IDRs) to 'BB-' from 'B+' after the acquisition of SilverBow
Resources was completed on July 30, 2024. The Rating Outlook is
Stable. Fitch has also affirmed Crescent's first-lien secured
reserve-based loan facility (RBL) at 'BB+'/ 'RR1' and its senior
unsecured notes at 'BB-' revising the recovery rating to 'RR4' from
'RR3' after the company's IDR was upgraded to the 'BB' category.
Positive Watch was removed only from the IDRs.
Crescent acquired SilverBow with a mix of Class A common stock and
$358 million of cash, excluding additional cash payments to
SilverBow's restricted stock unit owners and other equity
instrument holders. SilverBow shareholders will own approximately
23% of the combined company. The deal will significantly improve
Crescent's scale and create the second largest operator in the
Eagle Ford shale. Crescent borrowed around $1.5 billion to fund the
equity consideration and refinance SilverBow's debt. Fitch
forecasts Crescent's midcycle leverage at 1.6x remaining well
within the rating guidelines.
Key Rating Drivers
Improved Scale, Focus on Eagle Ford: The acquisition will
considerably increase Crescent's scale and make it the second
largest operator in the Eagle Ford shale. Crescent estimates that
its production will grow to around 250 thousand barrels of oil
equivalent per day (kboe/d; around 40% oil) pro forma for the
acquisition from roughly 160 kboe/d on a standalone basis.
Fitch estimates that the company's midcycle EBITDA will increase to
$1.4 billion from $0.9 billion based on its $57 per barrel of WTI
oil and $2.75 per thousand cubic feet of Henry Hub natural gas.
Approximately 70% of the combined company's production will come
from the Eagle Ford, while the rest will be largely produced in the
Rockies region. SilverBow operated in the Eagle Ford only.
Leverage Target Unchanged: Crescent's Fitch-calculated EBITDA
leverage is 1.6x at midcycle oil and gas prices — i.e., below the
negative rating sensitivity. Crescent will continue to target 1.0x
leverage with a maximum of 1.5x after the acquisition. Fitch
expects Crescent to use its FCF after dividends to reduce RBL
drawdown. Crescent has kept stable dividend per share after the
acquisition, which will lead to only a moderate increase in overall
dividends paid. Crescent's leverage could also benefit from the
expected annualized synergies of $65 million-$100 million,
including the cost of capital that is lower than for SilverBow.
Fitch focuses on Crescent's EBITDA leverage before dividends paid
to non-controlling interests (NCI) because Crescent Energy Finance
LLC, the debt issuer, does not suffer from NCI dividend leakage at
its level despite the NCI dividends reported by its parent and
financials filer, Crescent Energy Company.
Growth Dominated by M&A: Crescent has grown mainly through
acquisitions. The enterprise value of SilverBow was $2.1 billion
funded with a mix of debt and equity. In 2023, it increased
ownership of the previously non-operated asset in the Eagle Ford
area through two transactions with a $850 million total value. The
transactions were effectively funded by the unsecured notes, a
moderate equity raise and FCF. Crescent maintained its pro forma
leverage at 1.5x or lower after these acquisitions.
Lower Decline Rate Assets: Crescent expects the decline rate for
the companied company to be closer to 25%, up from 19% before the
acquisition. This is still below the shale producers' typical rate
of above 30%. A material share of the company's operations is
located in more mature plays, which usually require lower capex due
to their older vintage wells. These wells experience lower decline
rates than recently developed ones. Low decline assets contributed
40% to Crescent's production on a standalone basis. The company
expects to have a pro-forma reserve life of over 11 years, which
Fitch considers healthy.
Extensive Hedge Program: Crescent has lower operating netbacks than
oil-focused shale peers due to the presence of mid-life assets and
large proportion of natural gas and natural gas liquids in its
portfolio. This leads to increased sensitivity to oil and gas price
downswings. To offset that, Crescent's hedging program is more
intense than those of many other comparable upstream companies,
particularly with its liquids hedges.
The company expects to be around 55% hedged on total production
volumes in 2H24, have roughly 30% of oil and 60% of gas volumes
hedged for 2025 and around 25% for gas in 2026. Crescent's hedging
intensity is above average relative to peers.
Derivation Summary
Crescent reported an average production of 166 kboe/d in 1Q24. This
is slightly above operators such as SM Energy (BB-/RWP; 145
kboe/d), which benefits from the strong economics of its Permian
Basin weighted asset base, and Baytex Energy (BB-/Stable; 151
kboe/d). Crescent's production was significantly ahead of MEG
Energy (BB-/Stable; 104 kboe/d) and Vermilion Energy (BB-/Stable;
86 kboe/d).
Crescent has a history of low leverage though-the-cycle. Fitch
believes this will continue, with EBITDA midcycle leverage of 1.6x.
This is close to the typical leverage of its peers.
In 1Q24, Crescent generated an unhedged cash netback of $19/boe.
This falls materially below the peer group due to significant
presence of more mature assets in Crescent's portfolio. Vermilion's
and Baytex's netbacks were the closest with $23/boe. To compensate
for higher-cost profile, Crescent hedges more than its peers.
Key Assumptions
Fitch's Key Assumptions Within Its Rating Case for the Issuer
Include
- West Texas Intermediate prices of $75/barrel (bbl) in 2024,
$65/bbl in 2025, $60/bbl in 2026-2027 and $57/bbl at midcycle;
- Henry Hub prices of $2.50/thousand cubic feet (mcf) in 2024,
$3.00/mcf in 2025-2026 and $2.75/mcf in 2027 and at midcycle;
- Production fluctuating between 240 and 250 kboe/d in 2024-2027;
- Capex at $950 million per annum in 2024-2027;
- Annual dividends to common and non-controlling shareholders at
$109 million combined;
- No share buybacks.
RATING SENSITIVITIES
Factors That Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Midcycle EBITDA approaching $1.75 billion and production volumes
exceeding 275 kboe/d;
- Improvement in netbacks relative to peers;
- Capital allocation involving debt reduction or credit-accretive
acquisitions;
- Midcycle EBITDA leverage before excluding NCI dividends below
1.5x.
Factors That Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Midcycle EBITDA leverage before excluding NCI dividends above
2.0x;
- Deterioration in liquidity including sustained high revolver
utilization or large negative FCF;
- Evidence of KKR utilizing its voting position to influence
governance in a credit-unfriendly manner.
Liquidity and Debt Structure
Sufficient Liquidity: At March 31, 2024, Crescent had approximately
$5 million of cash on hand and $81 million outstanding under its
RBL. After the acquisition of SilverBow, Crescent should have a
modest amount of cash on hand and $1.3 billion availability under
its $2 billion RBL facility expiring in 2029 with springing
maturity in 2027. The facility's borrowing base is $2.6 billion.
Crescent's other debt consists of unsecured notes maturing in 2028,
2032 and 2033.
Issuer Profile
Crescent is a public oil and gas company with production close to
250 kboe/d (approximately 40% oil). Around 70% of its production
comes from the Eagle Ford area. The remainder is produced in the
Uinta basin, Wyoming conventional assets and smaller U.S. onshore
positions.
ESG Considerations
Crescent has an ESG Relevance Score of '4' for Governance
Structure, as KKR affiliates own all of Crescent's non-economic
preferred share class. These shares have enhanced voting rights
that provide KKR the ability to appoint the entire board of
directors at its discretion. This 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
----------- ------ -------- -----
Crescent Energy
Company LT IDR BB- Upgrade B+
Crescent Energy
Finance LLC LT IDR BB- Upgrade B+
senior unsecured LT BB- Affirmed RR4 BB-
senior secured LT BB+ Affirmed RR1 BB+
CWGS ENTERPRISES: S&P Downgrades ICR to 'B', Outlook Negative
-------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on CWGS
Enterprises LLC to 'B' from 'B+'. S&P also lowered its issue-level
ratings on the company's $65 million revolving credit facility due
2026 and a term loan B due 2028 to 'B+' from 'BB-'.
S&P said, "The negative outlook reflects our forecast for S&P lobal
Ratings-adjusted debt to EBITDA of approximately 7x-7.5x in 2024 as
the company continues to entice buyers with lower-priced RVs
leading to compressed EBITDA margin and lower cash flow. We could
lower our rating if the company sustains S&P Global
Ratings-adjusted debt to EBITDA above 6x or if discretionary cash
flow to debt turns negative through 2025."
CWGS Enterprises LLC, an operating subsidiary of Camping World
Holdings Inc., has aggressively pursued market share in response to
reduced consumer interest in recreational vehicles (RVs) amid high
interest rates. The company's acquisition of new stores and
reduction of its average selling price (ASP) has come at the
expense of EBITDA margin and cash flow. As a result, S&P now
expects S&P Global Ratings-adjusted EBITDA to decline in 2024 and
for leverage to end the year at 7x-7.5x compared to its previous
base case of approximately 6x.
The downgrade reflects S&P's revised base-case forecast for CWGS to
end 2024 with leverage of 7x-7.5x due to reduced average selling
prices resulting in lower EBITDA margin. The company continues to
aggressively pursue market share even as high interest rates
continue to dampen consumer demand for RVs. In order to do so, the
company has emphasized lower-priced new models and has
significantly discounted aged inventory. Additionally, the price
points of used RVs have declined significantly in conjunction with
cheaper new model year units, which has led the company to slow
down the pace of its used inventory purchasing, relying on
lower-margin consignment sales.
While the company's strategy is showing early signs of success in
growing market share, the gains have come at the expense of
significantly lower gross profit levels, reduced EBITDA margin, and
weaker cash flow in 2024. S&P said, "Under our revised base, we now
expect EBITDA to decline 15%-20% and for leverage to spike to
approximately 7x-7.5x in 2024 before returning to the mid-5x area
in 2025, assuming consumer spending on RVs stabilizes. Furthermore,
we expect discretionary cash flow after its dividend and
acquisition spending will be negligible or modestly negative for
the full year as operating cash flow has declined significantly
year to date compared to 2023." Operating cash flow last year
included a significant working capital benefit as the company
unwound excess inventory.
S&P said, "We believe the company has a plausible path to reduce
leverage in 2025 assuming a stabilized macroeconomic environment,
minimal ASP growth, and continued selling, general, and
administration (SG'&A) expense rationalization. While adjusted debt
to EBITDA remains high even at a 'B' rating we expect leverage to
come down in 2025 assuming ASPs stabilize at lower levels and the
company benefits from store additions, as well as modest growth in
same-store unit sales. Management noted on its second-quarter
earnings call that ASPs in 2025 should see modest growth
commensurate with historical patterns. We have assumed
low-single-digit growth in new unit prices and flat used selling
prices. We do not expect new RV prices to return to management's
midcycle target of $39,000-$40,000 for the next several years
barring a significant change in the macroeconomic and interest rate
environment. Importantly, we expect the company to reduce SG&A
spending, as a percent of gross profit, in 2025. While some of the
reduction will occur if prices stabilize and revenue growth turns
positive, we also expect the company will continue to close or
reorganize underperforming stores and rationalize its workforce to
account for an extended period of lower sales volume."
CWGS' aggressive acquisition strategy and investment spending are
risk factors. The company has an ambitious expansion and investment
plan, which includes store acquisitions, new-store openings, and
real estate purchases. S&P said, "While we expect CWGS to slow the
pace of its acquisitions in the second half of 2024, it has stated
that it intends to take advantage of the difficult retail
environment to negotiate acquisitions. According to comments from
management, the company intends to grow its store count by 50%
within the next five years. We believe this plan will materially
grow CWGS' footprint and EBITDA base. This sizable investment plan
is a material source of risk, particularly if it makes these
acquisitions during a time of lower-than-expected RV demand or if
the company encounters difficulties integrating acquired stores."
S&P said, "The negative outlook reflects our forecast for S&P
Global Ratings-adjusted debt to EBITDA of approximately 7x-7.5x in
2024 as CWGS continues to entice buyers with lower-priced vehicles
leading to compressed EBITDA margin and reduced cash flow. We could
lower our rating if the company sustains adjusted debt to EBITDA
above 6x or if discretionary cash flow to debt turns negative
through 2025.
"We could lower our rating if the company sustains adjusted debt to
EBITDA above 6x or if discretionary cash flow to debt turns
negative through 2025, which could occur if RV retail demand
further weakens and the company is unable to stabilize unit volumes
or average selling price.
"We could revise our outlook on the company to stable if we believe
the retail outlook for the RV industry will stabilize and expect
that its leverage will improve in line with our current base-case
forecast to the mid- to low-5x range in 2025. We believe this would
provide it with a sufficient cushion relative to our 6x downgrade
threshold. This would also likely coincide with a stabilization of
consumer demand and inventory levels in the RV retail channel."
DANIVAN LLC: Voluntary Chapter 11 Case Summary
----------------------------------------------
Debtor: Danivan LLC
20 Kinder Lane
Hillsborough, CA 94010
Business Description: Danivan is the fee simple owner of two
properties located in Adelanto, CA having
a total current value of $1.8 million.
Chapter 11 Petition Date: August 4, 2024
Court: United States Bankruptcy Court
Northern District of California
Case No.: 24-30585
Debtor's Counsel: Vinod Nichani, Esq.
NICHANI LAW FIRM
111 N. Market Street, Suite 300
San Jose, CA 95113
Tel: 408-800-6174
Fax: 408-290-9802
Email: vinod@nichanilawfirm.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $500,000 to $1 million
The petition was signed by Aiyun Wu as CEO.
The Debtor indicated in the petition it has no creditors holding
unsecured claims.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/HAT5SBQ/Danivan_LLC__canbke-24-30585__0001.0.pdf?mcid=tGE4TAMA
DIAMOND SPORTS: Gets New Sports Deal from Comcast Corp.
-------------------------------------------------------
Steven Church of Bloomberg News reports that Diamond Sports Group
cut a deal to distribute its programming on Comcast Corp.'s cable
television network, one of a handful of agreements the bankrupt
sports broadcaster said it needs in order to revive itself.
The deal, which the two companies announced Monday, can go into
effect August 1, 2024. Under the agreement, Comcast's Xfinity
customers will have access to Diamond's 15 regional sports
networks.
Diamond has been trying to reorganize while under court protection
by rewriting contracts with television providers and professional
sports leagues. Those new contracts, including the new deal with
Comcast, would be included in a reorganization plan.
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.
DIRIGO GLOBAL: Taps Bernstein Shur Sawyer as Bankruptcy Counsel
---------------------------------------------------------------
Dirigo Global Holidngs, LLC seeks approval from the U.S. Bankruptcy
Court for the District of Maine to employ Bernstein, Shur, Sawyer &
Nelson, P.A. as bankruptcy counsel.
The firm's services include:
(a) advising the Debtor with regard to the requirements of the
Bankruptcy Court, Bankruptcy Code, Bankruptcy Rules, Local Rules,
and the Office of the United States Trustee, as they pertain to the
Debtor;
(b) advising the Debtor with regard to certain rights and
remedies of the bankruptcy estate and rights, claims, and interests
of creditors and bringing such claims as the Debtor, in its
business judgment, decides to pursue;
(c) representing the Debtor in any proceeding or hearing in
the Bankruptcy Court involving the estate;
(d) conducting examinations of witnesses, claimants, or
adverse parties, and representing the Debtor in any adversary
proceeding (except to the extent that any such adversary proceeding
is in an area outside of BSSN's expertise);
(e) reviewing and analyzing various claims of the Debtor's
creditors and treatment of such claims and preparing, filing, or
prosecuting any objections thereto or initiating appropriate
proceedings regarding leases or contracts to be rejected or
assumed;
(f) preparing and assisting the Debtor with the preparation of
reports, applications, pleadings, motions, and orders;
(g) assisting the Debtor in the analysis, formulation,
negotiation, and preparation of all necessary documentation
relating to the sale of the Debtor's assets, as appropriate;
(h) assisting the Debtor in the negotiation, formulation,
preparation, and confirmation of a plan; and
(i) performing any other services that may be appropriate in
BSSN's representation of the Debtor as general bankruptcy counsel
in the case.
The hourly rates of the firm's counsel and staff are as follows:
Adam R. Prescott, Attorney $495
Jennifer Novo, Attorney $295
Karla Quirk, Paraprofessional $230
In addition, the firm will seek reimbursement for expenses
incurred.
Mr. Prescott disclosed in a court filing that the firm is a
"disinterested person" within the meaning of Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
Adam R. Prescott, Esq.
Bernstein, Shur, Sawyer & Nelson, P.A.
100 Middle Street
P.O. Box 9729
Portland, ME 04104
Telephone: (207) 228-7145
Facsimile: (207) 774-1127
About Dirigo Global Holdings
Dirigo Global Holdings, LLC in Gardiner, ME, filed its voluntary
petition for Chapter 11 protection (Bankr. D. Me. Case No.
24-10084) on April 24, 2024, listing $1,791,522 in assets and
$2,394,317 in liabilities. Kevin Mattson, manager, signed the
petition.
Judge Michael A. Fagone oversees the case.
Marcus, Clegg, Bals & Rosenthal, PA serves as the Debtor's legal
counsel.
DMD CUSTOM: Ira Bodenstein Named Subchapter V Trustee
-----------------------------------------------------
The U.S. Trustee for Region 11 appointed Ira Bodenstein as
Subchapter V trustee for DMD Custom Critical, Inc.
Mr. Bodenstein will be paid an hourly fee of $500 for his services
as Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. Bodenstein declared that he is a disinterested person according
to Section 101(14) of the Bankruptcy Code.
About DMD Custom Critical
DMD Custom Critical, Inc. is a trucking company in Des Plaines,
Ill., which provides expedited transportation services to all 48
states.
The Debtor filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. N.D. Ill. Case No. 24-10873) on July 26,
2024, with $874,500 in assets and $1,885,742 in liabilities. Damjan
Dikanovic, president, signed the petition.
Judge Donald R. Cassling presides over the case.
David P. Leibowitz, Esq., at Leibowitz, Hiltz & Zanzig, LLC
represents the Debtor as legal counsel.
EBIX INC: Court Declines to Give Plan Confirmation Ruling
---------------------------------------------------------
Alex Wittenberg of Law360 reports that a Texas bankruptcy judge
declined to rule Tuesday, July 30, 2024, on Ebix Inc.'s request for
Chapter 11 plan confirmation, telling the parties he needed more
time to sort out a dispute over third-party releases contained in
the reorganization deal.
About Ebix, Inc.
Ebix Inc. -- https://www.ebix.com/ -- is headquartered in Atlanta,
Ga., and it supplies software and electronic commerce solutions to
the insurance industry. With approximately 200 offices across six
continents, Ebix, (NASDAQ: EBIX) endeavors to provide on-demand
infrastructure exchanges to the insurance, financial services,
travel and healthcare industries.
Ebix and its affiliates filed Chapter 11 petitions (Bankr. N.D.
Tex. Lead Case No. 23-80004) on Dec. 17, 2023. At the time of the
filing, Ebix reported between $500 million and $1 billion in both
assets and liabilities.
Judge Scott W. Everett oversees the cases.
The Debtors tapped Sidley Austin, LLP as bankruptcy counsel;
O'Melveny and Myers, LLP as special counsel; AlixPartners, LLP as
financial advisor; and Jefferies, LLC as investment banker. Omni
Agent Solutions, Inc. is the claims agent.
The U.S. Trustee for Region 6 appointed an official committee to
represent unsecured creditors in the Debtors' Chapter 11 cases. The
committee is represented by McDermott Will & Emery, LLP.
EISNER ADVISORY: Incremental Term Loan No Impact on Moody's B2 CFR
------------------------------------------------------------------
Moody's Ratings said Eisner Advisory Group LLC's (Eisner) announced
plan to increase the amount of its senior secured term loan due
2031 by $100 million and use the net proceeds to repay revolving
credit facility loans is a negative credit development as it raises
potential leverage. However, the initial use of the revolving loans
was several acquisitions of smaller accounting and tax practices
that closed in 2024. Since Moody's already anticipates the company
may add debt to complete acquisitions while maintaining
low-single-digit rate organic revenue growth in fiscal 2025 (ends
July 31), debt to EBITDA declining to around 6.5x, no dividend
distributions and modest but growing free cash flow generation, the
ratings, including the B2 corporate family rating and B2 senior
secured ratings, as well as the stable outlook, are unchanged at
this time.
Eisner Advisory Group LLC, domiciled in New York, is a
middle-market US accounting, tax and advisory services company
majority-owned by an investor group led by private equity sponsor
TowerBrook.
ETON STREET: Deborah Fish Named Subchapter V Trustee
----------------------------------------------------
The U.S. Trustee for Regions 3 and 9 appointed Deborah Fish, Esq.,
managing partner at Allard & Fish, P.C., as Subchapter V trustee
for Eton Street Brewery, LLC.
Ms. Fish will be paid an hourly fee of $400 for her services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Ms. Fish declared that she is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Deborah L. Fish, Esq.
Allard & Fish, P.C.
1001 Woodward Ave., Ste. 850
Detroit, MI 48226
Phone: (313) 961-6141
Email: dfish@allardfishpc.com
About Eton Street Brewery
Eton Street Brewery, LLC is a brewery and distillery company in
Birmingham, Mich., offering beer, spirits, vodka and soda and hard
cider.
The Debtor filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. E.D. Mich. Case No. 24-47188) on July 26,
2024, with $10 million to $50 million in assets and $1 million to
$10 million in liabilities. Bonnie LePage, manager and president,
signed the petition.
Brendan G. Best, Esq., at Varnum, LLP represents the Debtor as
legal counsel.
EVOKE PHARMA: Effects 1-for-12 Reverse Stock Split
--------------------------------------------------
Evoke Pharma, Inc., disclosed in a Form 8-K filed with the
Securities and Exchange Commission that on July 31, 2024, it filed
an amendment to its amended and restated certificate of
incorporation to effectuate a reverse stock split of the Company's
common stock, par value $0.0001 per share. Pursuant to the
Amendment, at the effective time of 12:01 a.m. Eastern Time on Aug.
1, 2024, each 12 shares of Common Stock issued and outstanding will
be combined into one validly issued, fully paid and non-assessable
share of Common Stock. The par value per share remains the same.
Trading of the Common Stock on a Reverse Stock Split-adjusted basis
will begin at the opening of trading on the Nasdaq Capital Market
on Aug. 1, 2024. The new CUSIP number for the Common Stock
following the Reverse Stock Split is 30049G302.
The Reverse Stock Split will affect all stockholders uniformly and
will not alter any stockholder's percentage interest in the
Company's equity, except to the extent that the Reverse Stock Split
would result in a stockholder owning a fractional share. No
fractional shares will be issued in connection with the Reverse
Stock Split. Stockholders who would otherwise be entitled to a
fractional share of Common Stock are instead entitled to receive a
proportional cash payment. The Reverse Stock Split does not
decrease the number of authorized shares of Common Stock, which
will remain 100,000,000 shares. The Reverse Stock Split will
reduce the number of shares outstanding from approximately
8,818,511 to approximately 734,867 subject to adjustment for
fractional shares.
In addition, proportionate adjustments will be made to the per
share exercise price and the number of shares issuable upon the
exercise of all outstanding stock options and warrants to purchase
shares of Common Stock and the number of shares of Common Stock
reserved for issuance pursuant to the Company's equity incentive
compensation plans.
The Reverse Stock Split ratio was selected pursuant to the
authority granted to the board of directors of the Company by
stockholders at the Annual Meeting of Stockholders held on May 22,
2024.
About Evoke Pharma
Headquartered in Solana Beach, California, Evoke Pharma, Inc. --
http://www.evokepharma.com-- is a specialty pharmaceutical company
focused primarily on the development of drugs to treat GI disorders
and diseases. The company developed, commercialized and markets
GIMOTI, a nasal spray formulation of metoclopramide, for the relief
of symptoms associated with acute and recurrent diabetic
gastroparesis in adults.
San Diego, California-based BDO USA, P.C., the Company's auditor
since 2014, issued a "going concern" qualification in its report
dated March 14, 2024, citing that the Company has suffered
recurring losses and negative cash flows from operations since
inception. These factors raise substantial doubt about the
Company's ability to continue as a going concern.
EYE CARE: Unsecureds to Recover Up to 60% of Claims in Plan
-----------------------------------------------------------
Eye Care Leaders Portfolio Holdings, LLC and its affiliates
submitted an Amended Disclosure Statement regarding Joint Chapter
11 Plan dated July 17, 2024.
In these Chapter 11 Cases, the Debtors are selling substantially
all of their assets to a third party, which will operate the
business going forward, and the Debtors will liquidate their
remaining non-operating assets through the Plan.
The Court approved the Sale to Colorado Bankers Life Insurance
Company and entered the Order (A) Approving the Sale of
Substantially All of the Debtors' Assets Free and Clear of Liens
and Liabilities, (B) Authorizing the Debtors to Assume and Assign
Executory Contracts and Unexpired Leases in Connection with the
Sale, and (C) Granting Related Relief on May 24, 2024. The Sale is
scheduled to close on July 1, 2024.
The total purchase price under the Sale and pursuant to the APA
with Colorado Bankers Life Insurance Company is approximately
$14,957,000. The approximate payoff to Colorado Bankers Life
Insurance Company as the DIP Lender for the total outstanding
amount owed on the DIP Facility, which is the credit bid portion of
the Sale, is $6,053,000. The total Exit Fee to Create Capital, LLC
is approximately $200,000, and the total Break-Up Fee and Expense
Reimbursement is $580,000. Additionally, the investment banker fee
is approximately $250,000. After subtracting these fees and
expenses from the total purchase price, the total Sale proceeds are
approximately $7,874,000.
Class 3 consists of Other Secured Claims. Except to the extent a
holder of an Allowed Other Secured Claim agrees to a different
treatment, each holder of an Allowed Other Secured Claim shall at
the option of the Creditor Trustee receive either of the following
treatment: (i) payment in full, in Cash; (ii) the collateral
securing such Allowed Other Secured Claim; or (iii) such other
treatment that renders such Allowed Other Secured Claim unimpaired
in accordance with section 1124 of the Bankruptcy Code. To the
extent an Allowed Other Secured Claim exceeds the value of the
Collateral securing such Claim, such deficiency shall constitute a
General Unsecured Claim under Class 4 of the Plan. The amount of
claim in this Class total $665,000 to $6,646,000. This Class will
receive a distribution of 100% of their allowed claims.
Class 4 consists of General Unsecured Claims. Except to the extent
that a holder of an Allowed General Unsecured Claim against a
Debtor agrees to a different treatment, each holder of an Allowed
General Unsecured Claim shall receive a Creditor Trust Interest and
thereafter receive Cash distributions from the Creditor Trust.
Distributions to holders of Allowed General Unsecured Claims who
receive an interest in the Creditor Trust shall be on a Pro Rata
basis with all other Allowed General Unsecured Claims, as set forth
in the Creditor Trust Agreement.
Class 4 Claim holders are impaired under the Plan. The allowed
unsecured claims total $10,198,329 to $ 34,317,329. This Class will
receive a distribution of 0% to 60% of their allowed claims.
On the Effective Date, all Equity Interests in each Debtor shall be
cancelled, extinguished, and of no further force or effect. Holders
of Equity Interests shall neither retain nor receive any property
under the Plan on account of such Equity Interests. Holders of
Equity Interests are conclusively deemed to have rejected the Plan,
will not be receiving ballots, and are not entitled to vote.
The Creditor Trust shall be established for the benefit of the
holders of Allowed General Unsecured Claims. The Creditor Trustee
shall be selected by the Committee with the approval of the
Debtors, with such approval not to be unreasonably withheld,
subject only to Bankruptcy Court approval at the Confirmation
Hearing. The Creditor Trustee shall be a representative of the
estates pursuant to section 1123(a)(5)(B) and 1123(b)(3)(B) of the
Bankruptcy Code.
Except as otherwise provided herein or in the Confirmation Order,
all Cash required for the payments to be made under this Plan shall
come from the Creditor Trust Assets.
A full-text copy of the Amended Disclosure Statement dated July 17,
2024 is available at https://urlcurt.com/u?l=8WPsaq Stretto, claims
agent.
Counsel to the Debtors:
Jason S. Brookner, Esq.
Amber M. Carson, Esq.
Emily F. Shanks, Esq.
GRAY REED
1601 Elm Street, Suite 4600
Dallas, TX 75201
Tel: (214) 954-4135
Fax: (214) 953-1332
Email: jbrookner@grayreed.com
acarson@grayreed.com
eshanks@grayreed.com
About Eye Care Leaders Portfolio Holdings
Eye Care Leaders Portfolio Holdings, LLC, provides a suite of
software specifically geared towards ophthalmology and optometry
practices, practice management, surgical, revenue cycle management
(RCM), MIPS reporting and more. Eye Care Leaders is a one-stop
shop for eye care specialists and their patients.
Eye Care Leaders and more than 30 of its affiliates sought relief
under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Tex. Lead
Case No. 24-80001) on Jan. 16, 2024. In the petition filed by
CEO/portfolio Sophie Turrell, Eye Care disclosed $100 million to
$500 million in assets against $500 million to $1 billion in debt.
The Hon. Michelle V. Larson presides over the cases.
Gray Reed is the Debtors' bankruptcy counsel. B. Riley Financial
Inc. is the Debtors' financial advisor.
The U.S. Trustee for Region 6 appointed an official committee to
represent unsecured creditors in the Chapter 11 cases of Eye Care
Leaders Portfolio Holdings, LLC and its affiliates. The committee
hires Kilpatrick Townsend & Stockton LLP as counsel and Force Ten
Partners, LLC as financial advisor.
FARADAY FUTURE: All Five Proposals Approved at Annual Meeting
-------------------------------------------------------------
Faraday Future Intelligent Electric Inc. disclosed in a Form 8-K
filed with the Securities and Exchange Commission that on July 31,
2024, the Company held its 2024 annual meeting of stockholders at
which the stockholders:
(1) elected Matthias Aydt, Chui Tin Mok, Chad Chen, Jie Sheng
and Lev Peker as directors, to hold office on the Board until the
2025 annual meeting of stockholders and until respective successors
have been duly elected and qualified, or until their earlier death,
resignation or removal;
(2) ratified the appointment of Macias Gini & O'Connell LLP as
the Company's independent registered public accounting firm for the
year ending Dec. 31, 2024;
(3) approved an amendment to the Charter to increase the number
of authorized shares of Common Stock from 463,312,500 to
4,169,812,500, increasing the total number of authorized shares of
Common Stock and preferred stock from 473,312,500 to
4,179,812,500;
(4) approved an amendment to the Charter to effect (i) a reverse
stock split of the Common Stock by a ratio of any whole number in
the range of 1-for-2 to 1-for-40, with such ratio to be determined
in the discretion of the Board and with such action to be effected
at such time and date, if at all, as determined by the Board within
one year after the conclusion of the Annual Meeting, and (ii) a
corresponding reduction in the total number of shares of Common
Stock the Company is authorized to issue;
(5) approved an amendment to the 2021 Plan in order to increase
the number of shares of Class A Common Stock available for issuance
under the 2021 Plan by an additional 88,252,926 shares; and
(6) approved the adjournments of the Annual Meeting by the
Company to permit further solicitation of proxies, if necessary or
appropriate, if sufficient votes were not represented at the Annual
Meeting to approve the Proposals.
The Board of Directors of the Company previously approved an
amendment to the Faraday Future Intelligent Electric Inc. Amended
and Restated 2021 Stock Incentive Plan in order to increase the
number of shares of Class A Common Stock available for issuance
under the 2021 Plan by an additional 88,252,926 shares, subject to
approval by the Company's stockholders at the Company's Annual
Meeting and proportionate adjustment for stock splits and similar
events as provided in the 2021 Plan.
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 partner in South Korea. FF is also
exploring other potential contract manufacturing options in
addition to the contract manufacturer in South Korea. The Company
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
arrangement.
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.
FAXON ENTERPRISES: Bell Nunnally Advises Delta & Service Steel
--------------------------------------------------------------
The law firm of Bell Nunnally & Martin LLP ("BNM") filed a verified
statement pursuant to Rule 2019 of the Federal Rules of Bankruptcy
Procedure to disclose that in the Chapter 11 case of Faxon
Enterprises, Inc. d/b/a Henderson Fabrication, the firm represents
Delta Steel, Inc. and Service Steel Warehouse Co., L.P.
Delta Steel, Inc. and Service Steel Warehouse Co. L.P.
(collectively, the "Creditors") hold certain pre- and post-petition
claims against Debtor based upon, inter alia, contractual
agreements, property interests, and goods and services provided to
Debtor.
BNM has written contracts of engagement with the Creditors, and the
Creditors have each consented to this joint representation.
BNM does not hold any claims or equity interests in Debtor. BNM has
not filed a proof of claim on its own behalf in the case.
Attorneys for Delta Steel and Service Steel:
BELL NUNNALLY & MARTIN LLP
Russell W. Mills, Esq.
Jason A. Elgersma, Esq.
2323 Ross Avenue, Suite 1900
Dallas, TX 75201
(214) 740-1400 – Telephone
(214) 740-1499 – Facsimile
About Faxon Enterprises
Faxon Enterprises, Inc. sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. S.D. Tex. Case No. 24-80075) on March
24, 2024. In the petition signed by James E. Faxon, owner, the
Debtor disclosed up to $10 million in both asset and liabilities.
Judge Jeffrey P. Norman oversees the case.
The Debtor tapped Nicholas Zugaro, Esq., at Dykema Gossett, PLLC
and McGinnis Lochridge, LLP as legal counsels, and Quinn &
Associates, LLC as financial advisor.
FHT RENTAL: Amends Secured Claims Pay Details
---------------------------------------------
FHT Rental, Inc., submitted an Amended Disclosure Statement
describing Amended Plan of Reorganization dated July 17, 2024.
This Amended Plan of Reorganization proposes to pay creditors of
the Debtor by the surrender of the real properties securing the
creditor's claims.
This Plan provides for no class of priority creditors, three
classes of secured creditors, one class of unsecured claims, and no
class of equity security holders. Unsecured creditors holding
allowed claims will receive no distributions. This Plan provides
for the payment of administrative and priority claims.
Class 2A consists of the Secured Claim of Professional Contractors
Team, SE. The creditor will be paid by the surrender of the real
properties encumbered by the lien: Apts #31, #32, #33, #41, #43,
#51 at Condominio Campeche, Ponce.
Class 2B consists of the Secured Claim of Triangle Reo PR2 Corp.
The creditor will be paid by the surrender of real properties,
located at Condominio Campeche: Apts. #21, #22, #23, #24, #34, #45,
#52. Three real properties of Felix Torres and his wife located at
Urb El Monte, Lot F-104, Two story building at A-29 Ave Roosevelt,
and lot and residence located at Wilson #15 in Ponce, PR encumbered
by the lien will also be surrendered to this creditor holding the
lien.
Class 2C consists of the Secured Claim of Sucesion Jose Correa c/o
Margarita Correa Remedios. The creditor will be paid by the
surrender of four residential apartments (202, 204, 206, and 208)
located at Condominio Ferrocarril 617 in Ponce, belonging to Mr.
Felix Torres and his wife, Frances Monllor.
The Debtor represents that there will be no distributions to Class
3 General Unsecured Creditors.
The Debtor will continue to administer the assets of the estate,
until the transfer of properties is executed.
A full-text copy of the Amended Disclosure Statement dated July 17,
2024 is available at https://urlcurt.com/u?l=5VhvMo from
PacerMonitor.com at no charge.
Counsel to the Debtor:
Modesto Bigas Mendez, Esq.
Modesto Bigas Law Office
P.O. Box 7462
Ponce, PR 00732
Telephone: (787) 844-1444
Facsimile: (787) 842-4090
Email: mbiasmendez@gmail.com
About FHT Rental
FHT Rental, Inc., a company in Ponce, P.R., filed a petition under
Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. D.P.R. Case
No. 24-00296) on Jan. 30, 2023, with up to $50,000 in assets and up
to $10 million in liabilities. Felix A. Torres Garcia, president,
signed the petition.
Modesto Bigas Mendez, Esq., serves as the Debtor's counsel.
FIRST PATH: David Madoff Named Subchapter V Trustee
---------------------------------------------------
The U.S. Trustee for Region 1 appointed David Madoff, Esq., a
partner at Madoff & Khoury, LLP, as Subchapter V trustee for First
Path, Inc.
Mr. Madoff will be compensated at $450 per hour for his services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
In court filings, Mr. Madoff declared that he is a disinterested
person according to Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
David B. Madoff
Madoff & Khoury, LLP
124 Washington Street, Suite 202
Foxborough, MA 02035
Phone: (508) 543-0040
Email: madoff@mandkllp.com
About First Path
First Path, Inc. filed a petition under Chapter 11, Subchapter V of
the Bankruptcy Code (Bankr. D. Mass. Case No. 24-11496) on July 26,
2024, with $100,001 to $500,000 in both assets and liabilities.
Kate E. Nicholson, Esq., at Nicholson Devine, LLC represents the
Debtor as legal counsel.
FISKER INC: Lender Heights Agrees on Settlement Talks
-----------------------------------------------------
Jonathan Randles of Bloomberg News reports that Fisker Inc. lender
Heights Capital Management has agreed to hold settlement talks
aimed at resolving unsecured creditors' allegation that Heights
unfairly profited from the failure of the electric vehicle maker.
Fisker lawyer Brian Resnick said during a bankruptcy hearing that
Heights has agreed to settlement talks with the EV maker's
committee of unsecured creditors over the next three weeks.
If a deal isn't reached, Fisker could convert its bankruptcy into a
Chapter 7 liquidation, Resnick said.
About Fisker Inc.
California-based Fisker Inc. is revolutionizing the automotive
industry by designing and developing individual mobility in
alignment with nature. Passionately driven by a vision of a clean
future for all, the company is on a mission to create the world's
most sustainable and emotional electric vehicles.
Fisker Inc. sought relief under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. D. Del.) on June 17, 2024. In its petition, the Debtor
reports between $500 million and $1 billion of assets, and between
$100 million and $500 million of liabilities.
Fisker is represented by Davis Polk & Wardwell LLP and Morris,
Nichols, Arsht & Tunnell LLP as legal advisors and Huron Consulting
Group as restructuring advisor.
FLYNN CANADA: Moody's Affirms 'B1' CFR, Outlook Stable
------------------------------------------------------
Moody's Ratings has affirmed Flynn Canada Limited's B1 corporate
family rating, B1-PD probability of default rating and B1 senior
secured bank credit facilities ratings. The outlook is stable.
"The ratings affirmation reflects Flynn's currently strong
financial leverage and improved EBITDA margins, offset by its small
scale relative to rated construction peers", said Mikhil Mahore, a
Moody's Ratings Analyst.
RATINGS RATIONALE
Flynn Canada Limited's B1 CFR benefits from: (1) leading market
position as a dedicated total building envelope contractor within a
fragmented industry; (2) good business diversification supported by
a wide range of small-scale projects and recurring customers spread
across multiple markets in both Canada and the US; and (3) a
significant portion of revenue tied to the non-deferrable, less
volatile, and higher margin building services segment. The
company's rating is constrained by: (1) small scale in terms of
EBITDA (between $100 and $200 million) relative to rated
construction peers; (2) exposure to cyclicality in the construction
industry given dependence on new projects; (3) a highly competitive
environment given the fragmented nature of bidding processes; and
(4) financial policies that are likely to favor shareholders.
Flynn has good liquidity through to mid-2025. As of March 2024,
sources total about CAD200 million compared to uses of CAD9 million
over the next twelve months. Sources consist of cash on hand of
about CAD39 million, free cash flow of about CAD40 million in the
next 12 months, fully available $75 million committed revolver due
July 2026 and $10 million (CAD13 million equivalent) swingline
facilities. Uses are limited to mandatory debt amortizations. The
secured revolver is subject to a springing first lien net leverage
covenant when more than 35% drawn, which Moody's do not expect will
be applicable over the next 4 quarters. However, there is good
cushion under the covenant if it triggers. Assets are encumbered by
the secured facilities and alternate liquidity generated by any
sale proceeds would go toward debt repayment or reinvestment in the
business within 12 months.
Flynn's first lien facilities ($250 million term loan due 2028, and
$75 million revolver and $10 million swingline facilities due 2026)
are rated B1, at the same level as the CFR, since they represent
the preponderance of liabilities in the capital structure. Fremont
Private Holdings (Fremont), through its preferred equity ownership,
is the largest equity owner with about 42%. For speculative grade
issuers, Moody's assume 100% equity credit based on the
subordinated status of the preferred equity claim in bankruptcy,
which is senior only to common stock.
The stable outlook reflects Moody's expectation that Flynn's
debt/EBITDA leverage will remain below 3x in 2024 and 2025 while
generating positive free cash flow and maintaining good liquidity.
Moody's expect Flynn to continue to benefit from the surge in
infrastructure spending in both the US and Canada.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if Flynn expands its scale, with
Moody's adjusted debt to EBITDA remaining around 3.0x and FFO to
debt sustained above 20% while maintaining good liquidity.
The ratings could be downgraded if Moody's adjusted debt to EBITDA
exceeds 5x or FFO to debt falls under 10%, or if the company
generates sustained negative free cash flow.
The principal methodology used in these ratings was Construction
published in September 2021.
Headquartered in Toronto, Ontario, Flynn Canada Limited is a total
building envelope contractor with operations throughout Canada and
the United States. The company provides construction and
maintenance services, including roofing, outer wall systems and
glazing.
FOCUS FINANCIAL: Moody's Cuts CFR to B2 & Alters Outlook to Stable
------------------------------------------------------------------
Moody's Ratings has downgraded Focus Financial Partners, LLC's
(Focus) corporate family rating and senior secured term loans and
revolving credit facility ratings to B2 from B1. Moody's also
assigned B2 ratings to Focus's proposed bank credit facilities
consisting of a $3,326 million senior secured first lien term loan,
a $325 million senior secured first lien delayed draw term loan,
and an $925 million senior secured first lien revolving credit
facility. The delayed draw term loan and revolving credit facility
will be undrawn at close. Concurrently, Moody's also downgraded the
probability of default rating to B2-PD from B1-PD. The outlook was
changed to stable from negative.
The rating action follows Focus's intention to issue the new $325
million delayed draw term loan and a new $700 million in other
senior secured debt. The net proceeds of the transaction will be
used to refinance Focus's existing senior secured term loan and
revolving credit facilities and a dividend to shareholders.
RATINGS RATIONALE
The one-notch downgrade reflects the adverse effect of the
increased debt on the company's creditworthiness and the change in
financial policy in light of the debt-funded dividend.
The net proceeds of the proposed credit facility and the new other
secured debt issuance will primarily be used to refinance around
$3,200 million of outstanding term loans, to pay down balances on
the revolving credit facility, fund a distribution to shareholders
and increase the company's cash on hand. The new credit facility
will extend Focus's debt maturity profile to 2031.
The transaction will have a net increase in debt of around $615
million, not accounting for any balances on the delayed draw term
loan or revolving credit facility. This will result in a pro forma
debt-to-EBITDA of around 6.5x, compared to 5.8x as of June 30,
2024.
While Moody's assessment of Focus's overall governance risk score
has not changed, the debt financed dividend demonstrates a higher
tolerance for financial leverage, a key governance consideration
for this rating action.
The stable outlook on Focus's ratings considers its high leverage,
balanced with the firm's strong growth, recurring revenue model and
healthy cash flow generation.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Focus's ratings could be upgraded if the Moody's-adjusted
debt-to-EBITDA is sustained below 6x; and profitability, as
measured by GAAP pretax income margins, is sustained above 5%
annually.
Focus's ratings could be downgraded if Moody's-adjusted
debt-to-EBITDA is sustained above 7x; or the firm repositions its
financial policy to maximize shareholder returns (for example, via
additional debt-funded dividends).
The principal methodology used in these ratings was Asset Managers
published in May 2024.
FTX GROUP: Clients Tell Court Sullivan Must Face Fraud Claims
-------------------------------------------------------------
Aislinn Keely of Law360 reports that FTX customers told a Florida
federal judge on Tuesday, July 30, 2024, that Sullivan & Cromwell
LLP can't dismiss customer claims it aided and abetted the defunct
cryptocurrency exchange's fraud as "speculative allegations" when
the customers' complaint "paints a much more detailed and nefarious
picture."
About FTX Group
FTX is the world's second-largest cryptocurrency firm. FTX is a
cryptocurrency exchange built by traders, for traders. FTX offers
innovative products including industry-first derivatives, options,
volatility products and leveraged tokens.
Then CEO and co-founder Sam Bankman-Fried said Nov. 10, 2022, that
FTX paused customer withdrawals after it was hit with roughly $5
billion worth of withdrawal requests.
Faced with liquidity issues, FTX on Nov. 9, 2022, struck a deal to
sell itself to its giant rival Binance, but Binance walked away
from the deal amid reports on FTX regarding mishandled customer
funds and alleged US agency investigations. Bankman-Fried agreed to
step aside, and restructuring vet John J. Ray III was quickly named
new CEO.
FTX Trading Ltd (d/b/a FTX.com), West Realm Shires Services Inc.
(d/b/a FTX US), Alameda Research Ltd. and certain affiliated
companies then commenced Chapter 11 proceedings (Bankr. D. Del.
Lead Case No. 22-11068) on an emergency basis on Nov. 11, 2022.
Additional entities sought Chapter 11 protection on Nov. 14, 2022.
FTX Trading and its affiliates each listed $10 billion to $50
billion in assets and liabilities, making FTX the biggest
bankruptcy filer in the US this year.
According to Reuters, SBF shared a document with investors on Nov.
10, 2022, showing FTX had $13.86 billion in liabilities and $14.6
billion in assets. However, only $900 million of those assets were
liquid, leading to the cash crunch that ended with the company
filing for bankruptcy.
The Hon. John T. Dorsey is the case judge.
The Debtors tapped Sullivan & Cromwell, LLP as bankruptcy counsel;
Landis Rath & Cobb, LLP as local counsel; and Alvarez & Marsal
North America, LLC as financial advisor. Kroll is the claims agent,
maintaining the page https://cases.ra.kroll.com/FTX/Home-Index
The Official Committee of Unsecured Creditors tapped Paul Hastings
as counsel, FTI Consulting, Inc., as financial advisor, and
Jefferies LLC as the investment banker. Young Conaway Stargatt &
Taylor LLP is the Committee's Delaware and conflicts counsel.
Montgomery McCracken Walker & Rhoads LLP, led by partners Gregory
T. Donilon, Edward L. Schnitzer, and David M. Banker, is
representing Sam Bankman-Fried in the Chapter 11 cases.
White-collar crime specialist Mark S. Cohen has reportedly been
hired to represent SBF in litigation. Lawyers at Paul Weiss
previously represented SBF but later renounced representing the
entrepreneur due to a conflict of interest.
FTX TRADING: Gellert, Moskowitz & Boies Advise MDL FTX Customers
----------------------------------------------------------------
The law firms of Gellert Seitz Busenkell & Brown LLC, The Moskowitz
Law Firm, and Boies Schiller Flexner LLP filed a verified statement
pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure
to disclose that in the Chapter 11 cases of FTX Trading Ltd. and
affiliates, the firms represent MDL FTX Customers.
Each MDL FTX Customer has individually retained Moskowitz Law and
Boies Schiller to represent him or her as counsel in connection
with claims asserted in the multi-district litigation matter
captioned In re FTX Cryptocurrency Exchange Collapse Litigation,
Case No. 23-md-03076, pending in the U.S. District Court for the
Southern District of Florida (the "MDL Action"), in the chapter 11
cases, and in connection with that certain adversary proceeding
pending in the Chapter 11 Cases, captioned FTX Trading Ltd., et al.
v. Chernyavsky, et al., Adv. Pro. No. 24- 50072 (JTD) (the "MDL
Adversary Proceeding").
For purposes of the Chapter 11 Cases and the MDL Adversary
Proceeding, Counsel represent each MDL FTX Customer in their
individual capacity, each MDL FTX Customer in their capacity as a
named plaintiff and putative class representative in the MDL
Action, and the putative class of FTX victims in the MDL Action
(where certification of a settlement class is currently pending).
The names and disclosable economic interests of MDL FTX Customers,
are as follows:
Customer Amount
-------- ------
Alexander Chernyavsky $101,627.14
Brandon Orr $1,105.35
Edwin Garrison $318.66
Gregg Podalsky $87,467.18
Julie Papadakis $643,024.83
Kyle Rupprecht $207,137.00
Leandro Cabo $89,040.09
Michael Livieratos $52,922.74
Michael Norris $8,000.00
Ryan Henderson $10,493.16
Sunil Kavuri $1,732,175.77
Vijeth Shetty $20,971.17
Chukwudozie Ezeokoli -
Shengyun Huang -
Counsel to the FTX MDL Customers:
Ronald S. Gellert, Esq.
Bradley P. Lehman, Esq.
GELLERT SEITZ BUSENKELL & BROWN, LLC
1201 N. Orange St., Ste. 300
Wilmington, Delaware 19801
Telephone: (302) 425-5800
Facsimile: (302) 425-5814
Email: rgellert@gsbblaw.com
blehman@gsbblaw.com
David Boies, Esq.
Alexander Boies, Esq.
Brooke A. Alexander, Esq.
BOIES SCHILLER FLEXNER LLP
333 Main Street
Armonk, NY 10504
Telephone: 914-749-8200
Email: dboies@bsfllp.com
aboies@bsfllp.com
balexander@bsfllp.com
Adam M. Moskowitz, Esq.
Joseph M. Kaye, Esq.
THE MOSKOWITZ LAW FIRM, PLLC
Continental Plaza
3250 Mary Street, Suite 202
Coconut Grove, FL 33133
Office: (305) 740-1423
Email: adam@moskowitz-law.com
joseph@moskowitz-law.com
service@moskowitz-law.com
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 struck a deal to sell
itself to its giant rival Binance, but Binance walked away from the
deal amid reports on FTX regarding mishandled customer funds and
alleged US agency investigations.
At 4:30 a.m. on Nov. 11, Bankman-Fried ultimately agreed to step
aside, and restructuring vet John J. Ray III was quickly named new
CEO.
FTX Trading Ltd (d/b/a FTX.com), West Realm Shires Services Inc.
(d/b/a FTX US), Alameda Research Ltd. and certain affiliated
companies then commenced Chapter 11 proceedings (Bankr. D. Del.
Lead Case No. 22-11068) on an emergency basis on Nov. 11, 2022.
Additional entities sought Chapter 11 protection on Nov. 14, 2022.
FTX Trading and its affiliates each listed $10 billion to $50
million in assets and liabilities, making FTX the biggest
bankruptcy filer in the US this year. According to Reuters, SBF
shared a document with investors on Nov. 10 showing FTX had $13.86
billion in liabilities and $14.6 billion in assets. However, only
$900 million of those assets were liquid, leading to the cash
crunch that ended with the company filing for bankruptcy.
The Hon. John T. Dorsey is the case judge.
The Debtors tapped Sullivan & Cromwell, LLP as bankruptcy counsel;
Landis Rath & Cobb, LLP as local counsel; and Alvarez & Marsal
North America, LLC as financial advisor. Kroll is the claims agent,
maintaining the 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.
GAMEHENDGE INC: Kicks Off Subchapter V Proceedings
--------------------------------------------------
Gamehendge Inc. filed Chapter 11 protection in the Southern
District of Alabama. According to court filing, the Debtor reports
$1,030,906 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 27, 2024 at 2:00 p.m. in Room Telephonically
About Gamehendge Inc.
Gamehendge Inc., doing business as Mellow Mushroom, operates a
restaurant that offers stone-baked pizzas and unique local beers.
Gamehendge Inc. sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Ala. Case No. 24-11792) on July 22,
2024. In the petition filed by Kay D. Nunnery, as president, the
Debtor reports total assets of $126,572 and total liabilities of
$1,030,906.
The Debtor is represented by:
Barry A Friedman, Esq.
BARRY A FRIEDMAN & ASSOCIATES, PC
Post Office Box 2394
Mobile, AL 36652-6652
Tel: 251-439-7400
Fax: 251-432-2665
Email: bky@bafmobile.com
GCPS HOLDINGS: Tom Howley Named Subchapter V Trustee
----------------------------------------------------
The U.S. Trustee for Region 7 appointed Tom Howley, Esq., at Howley
Law, PLLC as Subchapter V trustee for GCPS Holdings, LLC.
Mr. Howley will be paid an hourly fee of $550 for his services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. Howley declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Tom Howley, Esq.
Howley Law, PLLC
711 Louisiana Street, Suite 1850
Houston, TX 77002
Telephone: (713) 333-9120
Email: tom@howley-law.com
About GCPS Holdings
GCPS Holdings, LLC manufactures and distributes industrial
thermoplastic pipe, valves and fittings as well as offers pipeline
construction, maintenance, integrity testing and repair. It is
based in The Woodlands, Texas.
On June 4, 2024, creditors Derrick Jones, Mark R. Tawney, and
William A. Kutsche filed involuntary Chapter 11 petition against
the Debtor (Bankr. S.D. Texas Case No. 24-32646). The case was
converted to a voluntary case on July 24, 2024. Judge Jeffrey P.
Norman oversees the case.
John E. Mitchell, Esq., at Katten Muchin Rosenman, LLP represents
the petitioning creditors as legal counsel.
GLUCOTRACK INC: Secures $4M in Funding to Support Clinical Trial
----------------------------------------------------------------
Glucotrack, Inc. announced July 31 that it has secured $4 million
in funding from its leading shareholder to support the upcoming
First in Human clinical trial.
"This year, we have made significant progress in the development of
our groundbreaking Continuous Blood Glucose Monitor (CBGM)
technology. This funding, by long-standing investor John
Ballantyne, provides increased financial flexibility for the
Company as we embark on human clinical trials for this less
burdensome approach to glucose monitoring," said CEO Paul V. Goode,
PhD.
"Since my initial investment, the Company has undergone a
significant evolution in its technology and focus. This has
accelerated development of the innovative CBGM which has the
potential to be disruptive in a large and growing diabetes market.
I remain confident that the Company and its leadership team are
well positioned to deliver strong clinical value to the diabetes
community and meaningful value to the shareholder community," said
John Ballantyne.
About GlucoTrack Inc.
Rutherford, N.J.-based GlucoTrack, Inc. is focused on the design,
development, and commercialization of novel technologies for people
with diabetes. The Company was founded with a mission to develop
GlucoTrack, a noninvasive glucose monitoring device designed to
help people with diabetes and pre-diabetics obtain glucose level
readings without the pain, inconvenience, cost and difficulty of
conventional (invasive) spot finger stick devices.
Tel-Aviv, Israel-based Fahn Kanne & Co., Grant Thornton Israel, the
Company's auditor since 2010, issued a "going concern"
qualification in its report dated March 28, 2024, citing that the
Company has incurred net losses and negative cash flows from its
operations and comprehensive loss since its inception and as of
December 31, 2023, there is an accumulated deficit of
[$109,853,000]. These conditions, along with other matters, raise
substantial doubt about the Company's ability to continue as a
going concern.
GOLDEN RULE RESOURCES: Commences Subchapter V Bankruptcy Process
----------------------------------------------------------------
Golden Rule Resources LLC filed Chapter 11 protection in the
Western District of Texas. According to court filing, the Debtor
reports $1,263,618 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)909-2905. participant access code: 5519921#.
About Golden Rule Resources
Golden Rule Resources LLC is primarily engaged in renting and
leasing real estate properties. The Debtor is the fee owner of five
properties located in San Antonio, TX valued at $1.13 million in
the aggregate.
Golden Rule Resources LLC sought relief under Subchapter V of
Chapter 11 of the U.S. Bankruptcy Code (Bankr. W.D. Tex. Case No.
24-51355) on July 21, 2024. In the petition filed by Carmen Hall,
as member, the Debtor reports total assets of $1,300,894 and total
liabilities of $1,263,618.
The Honorable Bankruptcy Judge Craig A. Gargotta oversees the
case.
The Debtor is represented by:
Morris E. "Trey" White, III, Esq.
VILLA & WHITE LLP
100 NE Loop 410 Suite 615
San Antonio TX 78216
Tel: (210) 225-4500
Email: treywhite@villawhite.com
GOTHAM RESTAURANTS: Samuel Dawidowicz Named Subchapter V Trustee
----------------------------------------------------------------
The U.S. Trustee for Region 2 appointed Samuel Dawidowicz as
Subchapter V trustee for Gotham Restaurants, LLC.
Mr. Dawidowicz will be paid an hourly fee of $525 for his services
as Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. Dawidowicz declared that he is a disinterested person according
to Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Samuel Dawidowicz
215 East 68th Street
New York, NY 10065
Phone: (917) 679-0382
About Gotham Restaurants
Gotham Restaurants, LLC operates the Gotham Restaurant, better
known by its former name of Gotham Bar and Grill.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D.N.Y. Case No. 24-11276) on July 24,
2024, with up to $50,000 in assets and up to $10 million in
liabilities. Bret Csencsitz, managing partner, signed the
petition.
Judge Philip Bentley presides over the case.
Gabriel Del Virginia, Esq., at the Law Office of Gabriel Del
Virginia represents the Debtor as bankruptcy counsel.
HADAD DESIGN: Files for Subchapter V Bankruptcy
-----------------------------------------------
Hadad Design and Construction Inc. filed Chapter 11 protection in
the Southern District of Texas. 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.
About Hadad Design and Construction
Hadad Design and Construction Inc. is a full service kitchen and
bathroom remodeling company. It offers kitchen cabinets, bathroom
cabinets, countertops, backsplash, tiles, flooring, etc.
Hadad Design and Construction sought relief under Subchapter V of
Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Tex. Case No.
24-33277) on July 18, 2024. In the petition filed by Elias Haddad,
as president and director, the Debtor estimated assets between
$500,000 and $1 million and estimated liabilities between $1
million and $10 million.
The Honorable Bankruptcy Judge Christopher M. Lopez oversees the
case.
The Debtor is represented by:
Leonard Simon, Esq.
PENDERGRAFT & SIMON LLP
2777 Allen Parkway Suite 800
Houston TX 77019
Tel: 713-528-8555
Email: lsimon@pendergraftsimon.com
HAOB HORIZONTAL DRILLING: Starts Subchapter V Bankruptcy Proceeding
-------------------------------------------------------------------
HAOB Horizontal Drilling LLC filed Chapter 11 protection in the
Southern District of Florida. According to court documents, the
Debtor reports $2,120,263 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 23, 2024 at 2:30 p.m. in Room Telephonically.
About HAOB Horizontal Drilling LLC
HAOB Horizontal Drilling LLC is a limited liability company.
HAOB Horizontal Drilling LLC sought relief under Subchapter V of
Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. Case No.
24-17240) on July 19, 2024. In the petition filed by Otoniel A.
Pinho, as president, the Debtor reports total assets of $1,595,296
and total liabilities of $2,120,263.
The Honorable Bankruptcy Judge Laurel M. Isicoff handles the case.
The Debtor is represented by:
Timothy S. Kingcade, Esq.
KINGCADE, GARCIA & MCMAKEN, P.A.
1370 Coral Way
Miami, FL 33145
Tel: 305-285-9100
Email: scanner@miamibankruptcy.com
HARDINGE INC: Seeks Chapter 11 Bankruptcy Along With Affiliates
---------------------------------------------------------------
Nurin Sofia of Bloomberg News reports that Hardinge Inc. and
certain of its US affiliated firms entered into an agreement in
principle with an affiliate of Centre Lane Partners to sell
substantially all of the firm's business lines' operations and
assets.
Hardinge siad it is starting a court-supervised sale process to
market-check proposals received and seek the highest or otherwise
best bid.
The Company seeks to complete the sale process in approximately 50
days.
The Company secured approximately $30 million in
debtor-in-possession financing from an affiliate of Centre Lane
Partners
International entities are not part of the bankruptcy filing.
About Hardinge Inc.
Hardinge Inc. globally designs, manufactures, and distributes
computer controlled metal cutting lathes, grinding and related
tooling, and accessories. The Company markets its products in the
United States, Europe, and Asia.
Hardinge Inc. sought relief under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. D. Del. Case No. 24-11605) on July 29, 2024. In its
petition, the Debtor reports estimated assets and liabilities
between $100 million and $500 million each.
The Debtor is represented by Robert Alan Weber and Mark L.
Desgrosseilliers of Chipman Brown Cicero & Cole, LLP.
HBL SNF: No Resident Care Concerns, 12th PCO Report Says
--------------------------------------------------------
Joseph Tomaino, the court-appointed patient care ombudsman, filed
with the U.S. Bankruptcy Court for the Southern District of New
York his 12th report regarding the quality of patient care provided
at HBL SNF, LLC's nursing facility in White Plains, N.Y.
The report, which covers the period from May 15 to July 15,
contains the PCO's findings from his visit to the White Plains
facility, during which he interviewed the facility administrator.
The facility administrator reports good census performance and that
he was successful at improving staffing since last interview. The
administrator reports no difficulties with any vendors. Laundry is
done in the house and without issue. There has been turnover in the
Department of Nursing directorship due to retirement.
During this reporting period, the PCO received a complaint call
regarding unbalanced air conditioning on the resident units and an
uncomfortable temperature in the lobby during a recent heat wave.
At the PCO's request, the administrator was able to move up the
HVAC vendor's service call. Adjustments were made to accommodate
this, and results are pending. There did not appear to be any
connectivity of this air conditioning issue to the bankruptcy.
The PCO observed that there appears to be no difficulty currently
meeting payroll obligations nor with obtaining supplies,
medications and vendor services. There are no reported or
observable staffing, medical records, or quality of care issues.
HBL SNF and management have been cooperative, and communication
with the PCO appears to be transparent.
A copy of the 12th ombudsman report is available for free at
https://urlcurt.com/u?l=Wf4uFF from Omni Agent Solutions, claims
agent.
About HBL SNF
HBL SNF, LLC, doing business as Epic Rehabilitation and Nursing at
White Plains, operates a 160-bedroom skilled nursing and
rehabilitation facility located at 120 Church St., White Plains,
N.Y. The facility, which opened in late 2019, provides an array of
healthcare services, including neurological, respiratory,
orthopedic, occupational, psychiatric, and many other medical and
rehabilitative services.
HBL SNF filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. S.D.N.Y. Case No. 21-22623) on Nov. 1,
2021, listing $9,131,311 in total assets and $20,128,876 in total
liabilities. Heidi J Sorvino, Esq., at White and Williams, LLP
serves as Subchapter V trustee.
Judge Sean H. Lane oversees the case.
The Debtor tapped Klestadt Winters Jureller Southard & Stevens, LLP
as bankruptcy counsel; Michelman & Robinson, LLP as special
litigation counsel; and HMM CPAs, LLP as accountant.
Joseph J. Tomaino, the patient care ombudsman appointed in the
case, is represented by SilvermanAcampora, LLP.
HEALTHCARE AT COLLEGE: U.S. Trustee Appoints Melanie McNeil as PCO
------------------------------------------------------------------
Mary Ida Townson, the U.S. Trustee for Region 21, appointed Melanie
McNeil, Esq., as patient care ombudsman for Healthcare at College
Park, LLC.
Ms. McNeil disclosed in a court filing that she is a "disinterested
person" pursuant to Section 101(14) of the Bankruptcy Code.
The ombudsman may be reached at:
Melanie S. McNeil, Esq.
State Long-Term Care Ombudsman
Office of the State Long-Term Care Ombudsman
Division of Aging Services, Department of Human Services
2 Peachtree Street, N.W., 33rd Floor
Atlanta, GA 30303
Email: msmcneil@dhr.state.ga.us
About Healthcare at College Park
Healthcare at College Park, LLC is a health care business (as
defined in 11 U.S.C. § 101(27A)) in Bolingbroke, Ga.
Healthcare at College Park sought relief under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. M.D. Ga. Case No. 24-51011) on July 9,
2024, with up to $50,000 in assets and up to $10 million in
liabilities. Michael E. Winget, Sr., managing member, signed the
petition.
Judge Robert M. Matson oversees the case.
The Debtor is represented by Wesley J. Boyer, Esq., at Boyer Terry,
LLC.
HESS MIDSTREAM: Fitch Affirms 'BB+' LongTerm IDR, Outlook Stable
----------------------------------------------------------------
Fitch Ratings has affirmed Hess Midstream Operations, LP's (HESM
OpCo) Long-Term Issuer Default Rating (IDR) at 'BB+'. Fitch has
also affirmed the instruments ratings of HESM OpCo's first lien
secured debt at 'BBB-'/'RR1' and the senior unsecured debt at
'BB+'/'RR4'. The Rating Outlook is Stable.
HESM OpCo's ratings reflect its strong cash flow profile anchored
by fixed fee-based long-term minimum volume commitment (MVC)
contracts. Fitch expects leverage at HESM OpCo will remain slightly
above 3.0x, given the trends in debt funded unit repurchases. Risks
associated with single-basin focused midstream service providers
with high customer concentration remains a credit concern.
The Stable Rating Outlook continues to reflect Fitch's expectations
that the announced acquisitions of HESM OpCo's current owners is
not expected to have a meaningful impact on the company's credit
profile, at least in the immediate term.
Key Rating Drivers
Relationship with Owners: HESM OpCo is jointly owned by Hess Corp.
(HES; BBB/Rating Watch Positive) and Global Infrastructure Partners
(GIP), both with a 37.8% and 21.2% economic ownership stake,
respectively, and the remaining held by the public. Given the joint
ownership, all major decisions must be unanimous between HES and
GIP; hence, Fitch does not view a single owner as having
significant control over HESM OpCo. Therefore, Fitch does not apply
its parent subsidiary linkage (PSL) criteria. As such, HESM OpCo's
ratings are currently not linked to its owners.
HES is HESM OpCo's primary counterparty responsible for driving
almost all of HESM OpCo's business. Although HESM OpCo's rating
isn't explicitly linked to HES, a meaningfully negative impact at
HES, could have negative consequences for HESM OpCo's credit
profile.
Strong Cashflow Profile: Nearly 100% of HESM OpCo's run-rate EBITDA
is expected to come from fee-based contracts, most of which are
under long-term revenue assurance type minimum volume commitment
(MVC) contracts. The fee-based and volume commitment contracts
protect against volatility in commodity prices and hydrocarbon
production, providing greater stability and visibility of future
cash flows. Nearly all of HESM OpCo's MVCs are with HES, which will
continue through 2033.
The MVCs are based on 80% of HES's nominations and are set in
advance on a three-year rolling basis. Once set, they can only be
upsized, providing further downside protection against volumetric
risks. Throughput across HESM OpCo's systems is expected to grow,
at least in the near term, spurred by HES's production growth and
increased gas capture requirements.
Disciplined Leverage Profile: HESM OpCo is expected to continue
maintaining a relatively low leverage profile compared to its
midstream peers. Fitch expects the company will maintain leverage
around its stated target of 3.0x. Fitch's expectations of strong
positive FCF generation for HESM OpCo underscores credibility of
management's leverage target.
The majority of the FCF is expected to be utilized towards
shareholder returns via buybacks, and dividend increases over its
targeted 5% annual distribution growth. Furthermore, debt funded
sponsor held unit repurchases could continue to occur till leverage
trends close to the target, and no significant expansion(s) or
acquisition(s) are identified.
Geographic and Customer Concentration: HESM OpCo's assets are
concentrated in the Bakken and Three Forks shale plays in the
Williston basin area of North Dakota, collectively referred to as
Bakken. In addition, HESM OpCo's revenue is almost entirely driven
by volumes coming from HES. Therefore, HESM OpCo contains the risk
of shifting dynamics in North American oil and gas production
landscape which may disproportionally impact the Bakken, and or
idiosyncratic factors that may impact HES.
Fitch, however, acknowledges, that volumes across HESM OpCo's
systems have been strong, largely at or over MVCs, demonstrating
robust regional production tends. Moreover, continued strength in
counterparty credit quality, to some extent, alleviates customer
concentration risks. Additionally, HES's acquisition by Chevron
would lead to an improvement in counterparty credit quality.
Robust Fee Structure: Nearly 85% of HESM OpCo's fee-based contracts
have a fixed rate. Initial fees on the fixed rate contracts were
reset in 2024, based on the average contract rate for the years
2021 to 2023 on a 2023 inflation adjusted basis, and increases
every year based on CPI escalators capped at 3% annually. The fees
once set cannot be changed or reduced.
The fees on the remaining 15% of fee-based contracts are set on a
cost of service framework. It incorporates actual and forecasted
volumes, and capital and operational expenditures. The fees are
subject to annual recalculation for all forward years to maintain
contractual return on capital deployed. This feature applies to
HESM OpCo's water gathering and terminaling agreements through 2033
and certain gas gathering agreements through 2028.
Chevron-Hess Corp. Deal Timing Uncertainties: Chevron's announced
acquisition of HES was expected to close mid-2024; however, is
being delayed due to an arbitration by Exxon Mobil Corp., over
HES's offshore assets in Guyana. The deal is unlikely to close
until final outcome on the arbitration is received, which is
unlikely to occur sooner than late 2024, and could extend into
2025. GIP's acquisition by BlackRock, expected to close in 3Q24,
isn't expected to trigger any changes in HESM OpCo's governance.
Fitch expects more clarity on Chevron/HES and BlackRock/GIP's plans
regarding changes in either HESM OpCo's governance, ownership, and
or contract structure, if any. This likely will not become apparent
anytime soon, until there is more clarity on the successful close
of the Chevron-HES deal within a defined timeframe, or until after
deal closing. In the absence of explicit rating linkage, the deal
isn't expected to meaningfully alleviate single customer
concentration risks.
Derivation Summary
EQM Midstream Partners, LP (EQM; BB+/Stable), similar to HESM OpCo,
with operations concentrated in the Appalachia basin, derives the
majority of its revenue from a single counterparty i.e. EQT Corp.
(EQT; BBB-/Stable). EQM's ratings are being uplifted due to rating
linkages with parent EQT, following EQM's acquisition by EQT.
However, in the absence of rating linkages, Fitch views EQM's
credit profile to be consistent with a BB rating. EQM is larger in
size in terms of EBITDA compared with HESM OpCo, however, the
latter has near-term leverage expectations that is over two turns
lower. HESM OpCo's lower leverage, is the primary factor leading to
difference in its rating with EQM.
EnLink Midstream, LLC (ENLC; BBB-/Stable), has larger operational
scale and is geographically more diversified with assets located
across multiple oil and gas producing regions across the United
States. Fitch's expectations for leverage at ENLC is higher
compared to HESM OpCo; however, the former recently revised its
long-term leverage target to 3.5x, which is only half a turn higher
compared with HESM OpCo's target of 3.0x. Furthermore, ENLC had
successfully balanced its financial goals in recent years to
achieve its previous target of 4.0x. HESM OpCo's smaller size, and
regional and customer concentration are the key drivers leading to
a one-notch difference in IDR with ENLC.
Key Assumptions
- Fitch's oil and gas price deck;
- Volume throughput across gathering, processing, and terminaling
businesses consistent with MVCs, and Fitch's expectations for HES's
oil and gas production in the Bakken;
- Dividend growth maintained at 5% per year;
- Stable maintenance capital spend consistent with prior years, and
growth capital spend for compressor expansions and new well
connects consistent with HES's development plans;
- Sporadic multiple debt funded sponsor held share buybacks in
small increments.
RATING SENSITIVITIES
Factors That Could, Individually Or Collectively, Lead To Positive
Rating Action/Upgrade
- EBITDA leverage sustained below 3.0x, while maintaining the
current size;
- A significant acquisition that meaningfully diversifies business
risk, provided EBITDA leverage stays below 4.5x, although this may
vary, depending on the risk profile of the acquisition.
Factors That Could, Individually Or Collectively, Lead To Negative
Rating Action/Downgrade
- Negative rating action at primary counterparty HES;
- Adverse changes in certain terms in the array of contracts with
HES;
- EBITDA leverage sustained above 4.0x, while maintaining the
current size.
Liquidity and Debt Structure
Ample Liquidity: HESM OpCo had full availability under its $1
billion revolver as of June 30, 2024. The revolver matures on July
14, 2027. HESM OpCo's nearest debt maturity is $800 million 5.625%
senior unsecured notes due 2026. Financial covenants on the secured
credit facility permits a maximum funded debt/EBITDA ratio of 5.0x
as defined in the credit facility for the prior four quarters,
expanding temporarily to 5.5x in the event of certain
acquisitions.
HESM OpCo was compliant with all the covenants as of the latest
quarter end, and Fitch expects the company to remain comfortably
within the covenant limits at least in the near term. The liquidity
is further bolstered by expectations of continued strong positive
FCF generation.
Issuer Profile
HESM OpCo is a fee-based oil, gas, and water, gathering,
processing, and terminaling (midstream) company with assets located
in the Bakken shale play of North Dakota in the United States. HESM
OpCo is jointly owned by HES and GIP, and part of it is held by
public unit holders.
Summary of Financial Adjustments
Fitch typically calculates midstream energy issuers' leverage by
using EBITDA figure that excludes earnings from equity investments
and adding distributions from equity investments.
ESG Considerations
Hess Midstream Operations LP has an ESG Relevance Score of '4' for
Group Structure due to the somewhat complex organizational
structure, and exposure to potential financial issues arising
elsewhere in the group, which has a negative impact on the credit
profile, and is relevant to the rating[s] in conjunction with other
factors.
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Recovery Prior
----------- ------ -------- -----
Hess Midstream
Operations LP LT IDR BB+ Affirmed BB+
senior unsecured LT BB+ Affirmed RR4 BB+
senior secured LT BBB- Affirmed RR1 BBB-
HOMES AND HOUSES: Seeks to Hire Rodeo Realty as Real Estate Broker
------------------------------------------------------------------
Homes and Houses Utah, LLC seeks approval from the U.S. Bankruptcy
Court for the Central District of California to employ Rodeo
Realty, Inc. as real estate broker.
The firm will market and sell the Debtor's property located at 8511
C Ave. Hesperia, CA 92345.
The firm will be paid a commission of 2.5 percent of the gross
sales price of the property.
Susan Hackett, a member of Rodeo Realty, disclosed in a court
filing that her firm is a "disinterested person" as the term is
defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Susan L. Hackett
Rodeo Realty, Inc.
202 North Canon Drive
Beverly Hills, CA 90210
Tel: (310) 633-1431
About Homes and Houses Utah
Homes and Houses Utah LLC owns 10 properties located in Utah and
California having a total current value of $12.29 million.
Homes and Houses Utah LLC sought relief under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. C.D. Cal. Case No. 24-14814) on June
18, 2024. In the petition signed by Nathaneal Ernesto Dardon,
managing member, the Debtor disclosed total assets of $13,761,894
and total liabilities of $20,306,705.
Judge Julia W. Brand oversees the case.
Michael R. Totaro, Esq., at Totaro & Shanahan, LLP serves as the
Debtor's counsel.
HUDSON RIVER TRADING: Fitch Affirms 'BB' LongTerm IDR
-----------------------------------------------------
Fitch Ratings has affirmed Hudson River Trading LLC's (HRT)
Long-Term Issuer Default Rating (IDR) and secured debt ratings at
'BB'. The Rating Outlook is Stable.
Key Rating Drivers
Established Market Position: HRT's ratings reflect its established
market position as a technology-driven market maker in the U.S.
equities market across various venues and its ongoing, methodical
expansion in other asset classes. The ratings also reflect HRT's
strong, albeit variable, operating performance, reasonable leverage
and growing capital base, a scalable business model and good track
record of managing operational risks. The firm's particularly high
level of employee ownership supports its rating as risk and return
interests are well-aligned.
Operational and Market Risks Constrain Ratings: Primary rating
constraints include elevated operational risks inherent in
technology-driven trading, although Fitch believes the firm has a
robust risk control framework. Other constraints include elevated
market risk, limited business diversification outside of the
liquidity provision space and reliance on volatile transactional
revenue streams.
Operating Margins Remain Supportive of Rating: HRT's profitability,
measured by adjusted EBITDA to gross revenues, has remained
supportive of its rating even as volatility in the U.S. equities
market has dropped to levels last seen in 2019 and bid-ask spreads
have declined. HRT's EBITDA margin has been consistently above
Fitch's 'bb' category quantitative benchmark range of 10%-20% for
securities firms with low balance sheet usage.
Fitch expects HRT's margins to remain supportive of its rating over
the medium term, aided by its scale and ability to execute on
expanded trading strategies. Nevertheless, HRT's revenues are
highly transactional and sensitive to market conditions, which
constrains the strength of the firm's business profile, in Fitch's
opinion.
Reasonable Cash Flow Leverage: Fitch views HRT's cash flow leverage
as conservative, with the firm operating below Fitch's 'bb'
category capitalization and leverage benchmark range of 2.5x-3.5x
for securities firms with low balance sheet usage. Fitch expects
the firm to maintain its relatively balance-sheet light business
model with the vast majority of its net trading revenues generated
from high frequency trading versus overnight strategies.
A material increase in balance sheet leverage due to HRT
implementing longer-term strategies would be viewed negatively by
Fitch, particularly if associated with more substantial market
risks and/or the use of confidence-sensitive secured borrowings.
Fitch notes that HRT has notably increased its level of equity to
support balance sheet growth and trading activity, driven by its
solid profitability and reasonable capital distributions.
Limited Funding Mix: Similar to peers, HRT's funding profile is
fully secured and relies on short-term, collateralized prime broker
facilities. Fitch believes the firm's long, deep relationships with
its prime brokers mitigates some of the risks associated with
funding concentrations and/or funding confidence. Meanwhile, HRT
manages its trading capital well in excess of margin requirements,
allowing for reasonable financial flexibility should markets become
volatile and margin requirements meaningfully increase.
Solid Liquidity Fitch views HRT's liquidity as generally adequate,
as the risks of its confidence-sensitive and predominantly secured
funding profile are partially offset by a largely liquid securities
inventory mainly consisting of Level 1 financial instruments though
its proportion of Level 2 inventory has grown.
HRT has increased the absolute size of its committed settlement
facilities but contingency funding would be subject to availability
of unencumbered collateral. Positively, the firm maintains a
committed revolving credit facility that could cover short-term
funding needs, if necessary. The committed line was recently
renewed and with the maturity extended to three years.
Strong Interest Coverage: Fitch views interest coverage
(EBITDA/interest expense) as solid in the most recent reporting
period. Coverage may decline during lower volatility environments,
but Fitch expects it to remain substantially above the 'bb'
category quantitative benchmark range of 4.0x-6.0x absent material
market dislocations or increases in debt.
The Stable Outlook reflects Fitch's expectations that HRT will
maintain good operating performance, modest cash flow and balance
sheet leverage, sufficient liquidity in a lower volatility
environment and sufficient excess trading capital over margin and
covenant requirements.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- An inability to maintain leverage at or below 3.0x on a gross
debt/adjusted EBITDA basis;
- A substantial increase in balance sheet leverage above 15x on a
net adjusted leverage basis, particularly if associated with higher
market or funding risks;
- A material deterioration in interest coverage, approaching 6x;
- A material decline in excess trading capital relative to margin
requirements;
- Adverse legal or regulatory actions against HRT, which results in
a material fine, reputational damage, or alteration in the business
profile;
- Material operational or risk management failures that adversely
affects profitability and/or market confidence;
- An idiosyncratic liquidity event that adversely affects the
firm's ability to execute on its core business strategies; and/or
- An inability to maintain its market position in the face of
evolving market structures and technologies, and/or a material
shift into trading less liquid products.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Consistent operating performance and minimal operational losses
over a longer time period;
- Increased funding flexibility, including demonstrated access to
third party funding through market cycles, the introduction of an
unsecured funding component and/or a meaningful increase in excess
trading capital over margin requirements. Improved funding
flexibility could also be demonstrated by meaningful improvement to
term margin agreement terms with the firm's group of prime
brokers.;
- Maintenance of cash flow leverage consistently at or below 1.5x
on a gross debt/adjusted EBITDA basis; and/or
- Diversification of trading platforms outside of equities and
equity-related products resulting in higher levels of net trading
revenue, while maintaining a limited and well managed market risk
profile.
DEBT AND OTHER INSTRUMENT RATINGS: KEY RATING DRIVERS
The secured term loan rating is equalized with the IDR and reflects
the fully secured funding profile and average recovery prospects in
a stressed scenario.
DEBT AND OTHER INSTRUMENT RATINGS: RATING SENSITIVITIES
The secured term loan rating is primarily sensitive to changes in
HRT's IDR and, secondarily, to material changes in HRT's capital
structure and/or changes in Fitch's assessment of the recovery
prospects for the debt instrument.
ADJUSTMENTS
The Standalone Credit Profile (SCP) has been assigned in line with
the implied SCP.
The Business Profile score has been assigned below the implied
score due to the following adjustment reason: Business model
(negative).
The Earnings and Profitability score has been assigned below the
implied score due to the following adjustment reason: Revenue
diversification (negative).
The Capitalization and Leverage score has been assigned below the
implied score due to the following adjustment reason: Risk profile
and business model (negative).
The Funding, Liquidity and Coverage score has been assigned below
the implied score due to the following adjustment reason: Business
model/funding market convention (negative).
ESG Considerations
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Prior
----------- ------ -----
Hudson River
Trading LLC LT IDR BB Affirmed BB
senior secured LT BB Affirmed BB
I10/I20 CUISINE LLC: Hits Chapter 11 Bankruptcy Protection
----------------------------------------------------------
I10/i20 Cuisine LLC filed Chapter 11 protection in the Northern
District of Texas. According to court filing, the Debtor reports
between $500,000 and $1 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 21, 2024 at 2:30 p.m. in Room Telephonically.
About I10/i20 Cuisine LLC
I10/i20 Cuisine LLC owns a restaurant business.
I10/i20 Cuisine LLC sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Tex. Case No. 24-42482) on July 18,
2024. In the petition filed by Mike Pruitt, as president, the
Debtor reports estimated assets between $1 million and $10 million
and estimated liabilities between $500,000 and $1 million.
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
INFINERA CORP: Incurs $48.29 Million Net Loss in Second Quarter
---------------------------------------------------------------
Infinera Corporation filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q reporting a net loss
of $48.29 million on $342.74 million of total revenue for the three
months ended June 29, 2024, compared to a net loss of $20.26
million on $376.23 million of total revenue for the three months
ended July 1, 2023.
For the six months ended June 29, 2024, the Company reported a net
loss of $109.68 million on $649.66 million of total revenue,
compared to a net loss of $28.67 million on $768.30 million of
total revenue for the six months ended July 1, 2023.
As of June 29, 2024, Infinera had $1.52 billion in total assets,
$604.45 million in total current liabilities, $660.42 million in
long-term debt, $14.52 million in long-term accrued warranty,
$21.98 million in long-term deferred revenue, $1.69 million in
long-term deferred tax liability, $44.79 million in long-term
operating lease liabilities, $39.38 million in other long-term
liabilities, and $131.59 million in total stockholders' equity.
Management Comments
Infinera CEO, David Heard said, "I am pleased with our second
quarter results with revenue, gross margin and operating margin all
above the midpoint of our outlook range. While the timing and pace
of customer demand recovery remain uncertain, we continued our
design-win momentum across our optical networking product portfolio
in the quarter, with bookings up both sequentially and on a
year-over-year basis. We ended Q2 with a book-to-bill ratio above
1."
"We remain excited about our pending combination with Nokia.
Customers see value in accelerating the pace of innovation to lower
both the cost per bit and power per bit required to stay ahead of
the capacity demands fueled by high-bandwidth usage applications
including AI. Together, the combined business would have a
broadened portfolio, greater scale and geographic reach, while
leveraging vertically integrated optical semiconductor technologies
developed here in the U.S."
Pending Merger with Nokia
On June 27, 2024, Infinera, Nokia Corporation, a company
incorporated under the laws of the Republic of Finland, and Neptune
of America Corporation, a Delaware corporation and wholly owned
subsidiary of Nokia ("Merger Sub") entered into an Agreement and
Plan of Merger that provides for Merger Sub to merge with and into
Infinera, with Infinera surviving the Merger as a wholly owned
subsidiary of Nokia. The transaction is expected to close in the
first half of 2025.
In light of the proposed transaction with Nokia, and as is
customary during the pendency of an acquisition, Infinera will not
be providing financial guidance during the pendency of the
acquisition.
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1138639/000113863924000208/infn-20240629.htm
About Infinera Corp.
Headquartered in Sunnyvale, Calif., Infinera Corp. --
www.infinera.com -- is a semiconductor manufacturer and global
supplier of networking solutions comprised of networking equipment,
optical semiconductors, software and services. The Company's
portfolio of solutions includes optical transport platforms,
converged packet-optical transport platforms, compact modular
platforms, optical line systems, coherent optical engines and
subsystems, a suite of automation software offerings, and support
and professional services. Leveraging its U.S.-based compound
semiconductor fabrication plant ("fab") and in-house test and
packaging capabilities, the Company designs, develops and
manufactures indium phosphide-based photonic integrated circuits
("PICs") for use in its vertically integrated, high-capacity
optical communications products.
Infinera reported a net loss of $25.21 million for the year ended
Dec. 30, 2023, a net loss of $76.04 million for the year ended Dec.
31, 2022, a net loss of $170.8 million for the year ended Dec. 25,
2021, a net loss of $206.7 million for the year ended Dec. 26,
2020, and a net loss of $386.62 million for the year ended Dec. 28,
2019, a net loss of $214.29 million for the year ended Dec. 29,
2018, and a net loss of $194.51 million for the year ended Dec. 30,
2017.
INSTRUCTURE HOLDINGS: Fitch Puts 'BB-' LongTerm IDR on Watch Neg.
-----------------------------------------------------------------
Fitch Ratings has placed the ratings of Instructure Holdings, Inc.,
including its Long-Term Issuer Default Rating (IDR) of 'BB-' and
its First Lien Secured Term Loan and Revolving Credit Facility
ratings of 'BB+'/'RR1'on Rating Watch Negative (RWN). The rating
action follows Instructure entering into a definitive agreement to
be acquired by investment funds managed by KKR.
The RWN reflects Fitch's expectations that EBITDA leverage will
increase post-acquisition. Instructure's near-term leverage was
already elevated post its acquisition of Parchment in February
2024. Fitch calculates EBITDA leverage for the company at 4.9x in
2024. The company's Long-Term IDR also reflects its leading
position in the learning management system (LMS) sector, high
retention levels and projected strong FCF through the forecast.
Fitch expects to resolve the Watch upon completion of the
acquisition, which is anticipated by Q4 2024. Fitch anticipates
that upon the closing of the transaction, the existing debt
facilities will be fully repaid. Fitch will consequently withdraw
the debt instrument ratings at that time. Fitch may re-evaluate the
capital structure following closure based on the revised financial
profile. The IDR for the company would likely be in the 'B'
category following transaction close.
Key Rating Drivers
Leverage to Remain Elevated: On July 25, 2024, Instructure
announced that it entered into a definitive agreement to be
acquired by investment funds managed by KKR. The transaction is
valued at $4.8 billion. Fitch projects a portion of this will be
financed via debt and EBITDA Leverage will remain elevated relative
to the expectations for the 'BB-' rating. The RWN reflects the
possibility of EBITDA Leverage remaining outside of the negative
sensitivity of 4.5x post the acquisition close. In February 2024,
Instructure completed the acquisition of Parchment which increased
EBITDA Leverage.
Continued Ownership Concentration: Instructure will become a
privately held company post completion of the acquisition by KKR.
Fitch believes the private equity ownership is likely to prioritize
ROE optimization through acquisitions to accelerate growth or
dividends to owners. Fitch considers the company's private equity
ownership concentration to be an inherent credit risk.
Strong EBITDA Margins & Cash Flow Generation: Relative to software
peers, the company's Fitch-calculated EBITDA margins are solid. The
EBITDA margins have expanded steadily from 2021-2023 and Fitch
projects the company to operate at strong margin levels going
forward. The cash flow generation of the company benefits from
minimal capital expenditure, supporting FCF generation. Fitch
calculates (CFO-Capex)/Debt at 10.7% for 2024 and forecasts it to
remain above 10% with the existing capital structure.
LMS Leader with Growing Scale: Instructure's market leadership
across both K-12 and higher education segments lends support to its
credit profile. Instructure's Canvas platform captured 38% of the
North America market in 2023, per the company's March 2024 investor
day presentation. The company continued to add new business wins
and renewals through 2023, indicative of its market-leading Canvas
LMS platform. Fitch believes the international segment, at 20% of
2023 revenue, should offer additional growth. The retention rates
for the company are strong, with 2023 net revenue retention rate of
103% and gross revenue retention rate of 93%.
Diversified Offerings & Customer Base: Instructure Holdings Inc.
benefits from its diverse product offerings and broad customer
base, which spans K-12, Higher Education, and Continuing Education
markets globally. Fitch believes the addition of Parchment will
provide broader cross-selling opportunities and increase
Instructure's overall stickiness, as the acquired platform
streamlines the academic credentialing ecosystem typically handled
by institutions. Parchment has more than 95% recurring revenue, and
its gross retention rate is in the mid- to high 90% range. The
company has 15,000 customers, which is a much larger customer base
than Instructure's 8,000 as of Dec. 31, 2023.
'New Normal' Tailwinds: Fitch believes the company will continue to
benefit from the legacy of pandemic lockdowns, as education
decision-makers remain committed to a digital transformation and
the space settles into post-pandemic normalcy.
Despite customers managing budgets judiciously, Fitch believes
Instructure's main offering has emerged from the remote-learning
era as critical teaching infrastructure, offering the company solid
top-line protection through the rating horizon. However, the impact
of these tailwinds, especially at the higher ed level, may start to
weaken due to macro factors, including lower enrolment and tighter
budget allocations.
Derivation Summary
Instructure's rating is driven by its elevated leverage profile
that is consistent with the weak-'BB' rating category. Nonetheless,
Instructure boasts a sticky customer base and is a market-leader in
the LMS market. The Rating Watch Negative reflects Fitch's
expectation of a more aggressive EBITDA Leverage as a private
company after the acquisition by KKR.
Though it is not a direct peer, Instructure is rated two notches
below Gen Digital Inc. (BB+/Negative), which has elevated leverage
following an acquisition. However, over the long term, Fitch
forecasts Gen will have leverage of approximately 3.5x. It has much
higher EBITDA margins, which are in the mid-50% area versus the mid
to upper 30% range at Instructure. Gen also generates EBITDA that
is about 10x larger.
Instructure's rating is also two notches below Open Text
Corporation (BB+/Stable). Like Gen, Open Text is also much larger
than Instructure and has leverage over 3.5x, which is high for the
'BB+' rating, although Fitch forecasts leverage will decline. Gen
and Open Text generate larger FCF, which is over $1 billion before
dividends.
Instructure is rated the same as MeridianLink, Inc. (BB-/Stable),
which generates meaningfully less EBITDA than Instructure. At YE
2023, MeridianLink had leverage of 4.0x. Instructure and
MeridianLink are qualitatively similar as they are both public
companies with Thoma Bravo ownership.
Key Assumptions
- Revenue growth will moderate from its historical strong growth
rates over the forecast horizon;
- EBITDA margins are in the mid to upper 30% range;
- Tuck-in acquisitions through the forecast;
- Low capex intensity in line with business model requirements.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Positive rating action is not expected in the near term given the
impending leveraged buyout transaction;
- Should EBITDA leverage fall below 3.5x on a sustained basis while
cash from operations (CFO) less capex to debt was in the mid-teens
or better, Fitch may consider favorable rating action.
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Ongoing EBITDA margins below 30%;
- EBITDA leverage above 4.5x on a sustained basis;
- CFO less capex to debt below 10% on a sustained basis;
- Ongoing revenue growth near 0%;
- Significant acquisitions largely funded with debt that pressure
credit metrics.
Liquidity and Debt Structure
Sufficient Liquidity: As of Dec. 31, 2023, the company had $341
million of cash on the balance sheet and an undrawn $125 million
revolver. Instructure's liquidity is also supported by positive
FCF. The nearest maturity occurs in 2028.
Issuer Profile
Instructure Holdings, Inc. (INST) is a leading learning management
system company offering its products to K-12 as well as higher ed.
It has over 30 million students and teachers using its products in
more than 100 countries.
ESG Considerations
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Recovery Prior
----------- ------ -------- -----
Instructure
Holdings, Inc. LT IDR BB- Rating Watch On BB-
senior secured LT BB+ Rating Watch On RR1 BB+
INTEGRATED CARE: No Patient Complaints, PCO Report Says
-------------------------------------------------------
Joseph Tomaino, the court-appointed patient care ombudsman, filed
with the U.S. Bankruptcy Court for the District of New Jersey his
report regarding the quality of patient care provided by Integrated
Care Concepts and Consultation, L.L.C.
Integrated Care is a provider of outpatient mental health services.
As a private practice, care is provided by licensed practitioners
and not an organization so there is no institutional licensure. In
addition, services are provided to several school districts under
contract.
Integrated Care met weekly with PCO staff to review staffing and
quality issues and to identify any impact the bankruptcy was having
on clinical services, if any, throughout the bankruptcy.
The PCO identified no issues during these weekly sessions where the
delivery of clinical services was impacted by the financial
reorganization of the practice.
The PCO noted that weekly review of patient complaints did not
reveal any complaints that were related to resources or staffing
availability because of the restructuring.
On June 27, a court order was entered confirming the consensual
Chapter 11 plan. As Integrated Care has submitted a plan and it has
been approved, there will no longer be a need for PCO monitoring.
The ombudsman may be reached at:
Joseph Tomaino
Grassi Healthcare Advisors, LLC
750 Third Avenue, 28th Floor
New York, NY 10017
Tel: (212) 223-5020
Email: jtomaino@grassihealthcareadvisors.com
About Integrated Care Concepts and Consultation
Integrated Care Concepts and Consultation, LLC offers mental health
treatment for individuals, adolescents, children, couples, and
families. The company is based in Eatontown, N.J.
The Debtor filed Chapter 11 petition (Bankr. D. N.J. Case No.
23-17773) on Sept. 5, 2023, with $611,080 in total assets and
$1,604,180 in total liabilities. Seth Arkush, managing partner,
signed the petition.
Judge Christine M. Gravelle oversees the case.
Donald F. Campbell, Jr., Esq., at Giordano, Halleran, Ciesla, P.C.,
represents the Debtor as legal counsel.
INTERACTIVE HEALTH: Unsecureds to Get Share of Income for 3 Years
-----------------------------------------------------------------
Interactive Health Benefits LLC, d/b/a ACA Track, LLC, filed with
the U.S. Bankruptcy Court for the Eastern District of Michigan a
Plan of Reorganization under Subchapter V dated July 15, 2024.
The Debtor is a Michigan limited liability company. The Debtor is
an industry leader in providing Internal Revenue Service and State
Individual Health Mandate reporting services to large employers in
accordance with the requirements of the Affordable Care Act.
The Debtor implements its proprietary software to assist its
customers in meeting their federal and state reporting obligations
on a yearly basis and collects data over the course of the year to
conduct necessary audits. The Debtor has been operating since 2014.
The Debtor is managed by Todd Covert, Chief Executive Officer and
sole member, and Christine Covert, Chief Financial Officer.
Since 2022, the Debtor has been involved in a contentious legal
proceeding with Mr. Jerry Dagenais, a former employee, which
resulted in a significant judgment in favor of Mr. Dagenais in the
amount of $2,481,882,53 (the "Judgment"). The judgment is currently
subject to an appeal and cross appeal.
The Debtor filed the Chapter 11 Case to (a) provide the necessary
breathing room from Mr. Dagenais efforts to enforce the Judgment,
as well as to stop interest from accruing on the Judgment, (b) take
advantage of the protections afforded to small businesses under
Subchapter V of the Bankruptcy Code, and (c) utilize the provisions
of the Bankruptcy Code to restructure the debt owed to any taxing
authorities and its general unsecured creditors, especially certain
provisions that impact the Judgment. The Debtor is reorganizing and
will continue its business.
The Plan calls for payment to all creditor classes over time and
will be will be implemented through (i) full payment of claims to
professionals and taxing authorities, and (ii) payment of the
Debtor's projected disposable income to general unsecured creditors
over a period of three years. As detailed herein, all
Administrative Claims (other than professional fee claims) will be
unimpaired, and will be paid in full pursuant to the terms of the
Plan.
Class 3 shall consist of Allowed General Unsecured Claims of the
Debtor. Pro rata distribution of the amounts set forth on Exhibit
B. Prepayment of plan payments to Class 3 will be permitted after
the prepayment of allowed professional fees and priority tax
claims. The allowed unsecured claims total $2,810,811. This Class
is Impaired.
Class 4 shall consist of the parties who hold ownership Interests
in the Debtor. Holders of the Interests shall retain their
interests in the Debtor and Reorganized Debtor in the same manner
as percentage upon confirmation of the Plan.
On the Effective Date, all of the Debtor's rights, titles, and
interests in and to all Assets shall revest in the Reorganized
Debtor to be operated and distributed by the Reorganized Debtor
pursuant to the provisions of this Plan.
The Debtor believes the Plan is likely to succeed because, among
other things (i) the Debtor will continue its successful and
profitable prepetition business strategy; (ii) the projections
included in the Plan are premised on the debtor's historical and
current customer base and activities while taking into account the
fluctuations in revenue of the business over the course of each
year; and (iii) the Plan assumes modest growth of the business over
the course of the period of the Plan.
The Debtor lost approximately $650,000 in business this year. The
post-confirmation financial projections that this change into
account, along with typical fluctuations in the customer base.
A full-text copy of the Plan of Reorganization dated July 15, 2024
is available at https://urlcurt.com/u?l=yzH7Ng from
PacerMonitor.com at no charge.
Counsel to the Debtor:
Stephen M. Gross, Esq.
Ashley J. Jericho, Esq.
McDonald Hopkins LLC
39533 Woodward Avenue, Suite 318
Bloomfield Hills, MI 48304
Tel: (248) 646-5070
Fax: (248) 646-5075
Email: sgross@mcdonaldhopkins.com
ajericho@mcdonaldhopkins.com
About Interactive Health Benefits LLC
d/b/a ACA Track, LLC
Interactive Health Benefits LLC provides full service automated The
Affordable Care Act (ACA) reporting for 1094 and 1095 C and B
forms. ACA Track's propriety software is designed to help
applicable large employers (ALE) meet the requirements of the
Affordable Care Act and IRS reporting. ACA is an approved vendor of
the IRS for electronic submission.
The Debtor filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. E.D. Mich. Case No. 24-43778) on April 16,
2024, with $1 million to $10 million in assets and liabilities.
Todd Covert, chief executive officer and sole member, signed the
petition.
Judge Maria L. Oxholm presides over the case.
Stephen Gross, Esq., at McDONALD HOPKINS, is the Debtor's legal
counsel.
IYS VENTURES: Unsecureds Owed $25.6M Will Get $1.2M in Plan
-----------------------------------------------------------
IYS Ventures LLC submitted a Second Amended Disclosure Statement to
Second Amended Plan of Reorganization dated July 17, 2024.
The Plan contemplates the reorganization of the Debtor business
operations, the restructuring of its debts and the distribution of
payments to holders of the various Allowed Claims.
The Debtor's Second Amended Plan of Reorganization provides for
distribution to the holders of allowed claims and interests from
cash, cash equivalents and other funds and income derived from i)
the sale of the Leased Stations, or the continued operations of the
Leased Stations, ii) the Net Proceeds of Litigation Claims
including the PMPA Adversary and CAP Adversary, and iii) the
monetization and sale of the Reorganized Debtor's equity membership
interests upon completion of all plan payments.
Class 5 consists of General Non-Priority Unsecured Claims. Class 5
Claims, aggregating approximately $25,632,517.85 including the
allowed unsecured claims of Class 1(b), 1(c), and 2 Claims,
Priority Claims and Priority Tax Claims shall be paid pro rata
distributions of deferred cash payments aggregating $1,200,000.00
by the IYS Ventures LLC Creditors Trust payable in annual
distributions of $240,000.00 annually commencing on December 31,
2025, and each 31st of December thereafter through December 31,
2029.
The Class 5 Claims will be paid annual pro rata distributions of
all Net Litigation Proceeds resulting from recovery of Litigation
Claims including the PMPA Adversary, the CAP Adversary and the
monetization and sale of the Reorganized Debtor's equity membership
interests upon completion of all plan payments. Class 5 Claims are
impaired under the Plan.
Class 6 consists of Equity Interests of Muwafak Rizek and IMart
Stores, LLC. All equity interests shall be deemed to be terminated
and canceled upon the Effective Date. Newly issued membership
interests of the Reorganized Debtor consisting of 100% of the
membership interests shall be issued to the IYS Ventures LLC
Creditors Trust, care of Matthew Brash as Trustee of the IYS
Ventures LLC Creditors Trust.
Except as otherwise provided in the Plan or the Confirmation Order,
all cash necessary for the Debtor to make payments pursuant to the
Plan to Allowed Administrative Claims, Priority Claims, Priority
Tax Claims, Secured Claims and General Unsecured NonPriority Claims
will be from i) the sale of the Leased Stations, or the continued
operations of the Leased Stations, ii) the Net Proceeds of
Litigation Claims including the PMPA Adversary and CAP Adversary,
and iii) the monetization and sale of the Reorganized Debtor's
equity membership interests upon completion of all plan payments.
A full-text copy of the Second Amended Disclosure Statement dated
July 17, 2024 is available at https://urlcurt.com/u?l=4QqFZj from
PacerMonitor.com at no charge.
Attorneys for the Debtor:
Gregory K. Stern, Esq.
Monica C. O'Brien, Esq.
Dennis E. Quaid, Esq.
Rachel S. Sandler, Esq.
GREGORY K. STERN, P.C.
53 West Jackson Boulevard
Suite 1442
Chicago, IL 60604
Tel: (312) 427-1558
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.
The Honorable Bankruptcy Judge David D. Cleary oversees the case.
Gregory K. Stern, P.C., is the Debtor's legal counsel.
JACKSON-STRONG: Case Summary & 19 Unsecured Creditors
-----------------------------------------------------
Debtor: Jackson-Strong Alliance, LLC
3100 Donald Douglas Loop North #4
Santa Monica, CA 90405
Business Description: The Jackson-Strong Alliance was a creative
partnership between Michael Joseph Jackson
and Brett-Livingstone Strong. Their aim was
to establish a dynamic arts enterprise,
promoting the power of imagination, not just
for creativity sake, but for the sake of
important world causes. Michael and Brett
focused their creative expression in support
of the arts, international charities and
protecting the environment.
Chapter 11 Petition Date: August 2, 2024
Court: United States Bankruptcy Court
Central District of California
Case No.: 24-16203
Debtor's Counsel: Nicholas A. Koffroth, Esq.
Keith C. Owens, Esq.
FOX ROTHSCHILD LLP
10250 Constellation Blvd.
Suite 900
Los Angeles, CA 90067
Tel: (424) 285-7070
Fax: (310) 556-9828
Email: nkoffroth@foxrothschild.com
kowens@foxrothschild.com
Estimated Assets: $500 million to $1 billion
Estimated Liabilities: $10 million to $50 million
The petition was signed by Stason Kingsley Strong, chief executive
officer, Kingsley & Associates, its capacity as the single member
of Jackson-Strong Alliance, LLC.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/RU2C7SI/Jackson-Strong_Alliance_LLC__cacbke-24-16203__0001.0.pdf?mcid=tGE4TAMA
List of Debtor's 19 Unsecured Creditors:
Entity Nature of Claim Claim Amount
1. Annie Shipp $70,000
2. Casey Hull $100,000
34 Plaza Square
Orange, CA
92866-1432
3. Cher Allman $1,000,000
4. Chris Agajanian $250,000
5. De Tracy $400,000
6. Dennis Hawk $50,000
3100 Donald
Douglas Loop N, Ste 205
Santa Monica, CA 90405
7. Jake Brackenwagen Litigation $348,006
c/o Aaron D. Sadock
Panakos Law APC
555 West Beech St.,
Suite 500
San Diego, CA 92101
8. Javier Scalin $120,000
9. Jessica Lewis $260,000
10. Katell Productions, LLC $628,564
100 Wilshire
Boulevard, Suite 1830
Santa Monica, CA 90401
11. LGI, LLP Legal Fees $3,944,672
1 Park Plaza, Suite 600
Irvine, CA 92614
12. Margot Strong $100,000
13. Mark Hill $150,000
14. Mark M. Davis $330,000
15. Matthew Randall $300,000
16. Monique Strong $2,200,000
c/o Robert M. Ross Esq.
Klass, Helman & Ross
16133 Ventura
Boulevard, Suite 585
Encino, CA 91436
17. Patricia L. Glaser $30,000
Glaser Weil
10250 Constellation Blvd.
19th Floor
Los Angeles, CA 90067
18. Steve Orenberg Litigation $1,518,536
19. Vinson Investments LLC Works of Art $3,250,000
Attn: Alain Vinson
31 S. Mews Wood Ct.
Spring, TX 77381
JANE STREET: Fitch Alters Outlook on 'BB+' LongTerm IDR to Positive
-------------------------------------------------------------------
Fitch Ratings has affirmed Jane Street Group, LLC's (Jane Street)
Long-Term Issuer Default Rating (IDR) and senior secured debt
rating at 'BB+'. The Rating Outlook has been revised to Positive
from Stable.
Key Rating Drivers
Improving Business Profile, Funding: The Positive Outlook reflects
the ongoing improvement of Jane Street's business profile, with
revenue and profitability proving to be durable even as market
volatility has been subdued. This has been driven by Jane Street's
methodical strategy expansion, by both asset class and geography,
which has given it superior size and scale relative to peers. The
Positive Outlook further reflects Jane Street's improved funding
terms within its diverse and growing group of prime brokers which
lessens liquidity risk from short-term, adverse changes in the
trading environment.
While the firm remains primarily dependent on collateralized
funding, the meaningful extension of lock-up periods with key prime
brokers should allow it to exit or move positions in a more orderly
manner if necessary. A one-notch upgrade of the rating would be
driven by continued strength in the firm's operating performance in
various market conditions while maintaining its risk culture. An
upgrade could also be driven by further improvement in lock-up
agreements with prime brokers as well as a continuation of equity
retention to support balance sheet growth.
Established Electronic Trading Franchise: Jane Street's rating
continues to reflect its strong, established market position as a
technology-driven market maker in the exchange traded fund (ETF)
market across various venues, management's good track record of
managing market and operational risks, which have been driven by a
high level of member ownership that ensures risk and return
interests are well aligned, and appropriate leverage relative to
balance sheet risks.
Inherently High Operational Risk: Primary rating constraints
include elevated operational risks inherent in technology-driven
trading, although Fitch believes the firm has a robust risk control
framework. Other constraints include elevated market risk, limited
business diversification outside of the liquidity provision space
and reliance on volatile transactional revenue streams.
Strong Earnings Performance: Jane Street's balance sheet exposures
have grown meaningfully over the past two years driven by strong
market dynamics, including continued fund flows into ETFs where the
firm is a market leader as well as through the expansion in rates
and options trading. While net trading revenue dropped modestly in
2023 compared to the year prior, the firm's pre-tax returns and
cash flow margins remained elevated compared to its assigned rating
due to the scale in its business model.
For the trailing 12 months (TTM) ended 1Q24, net trading revenue
grew notably even while market volatility was subdued. Fitch
attributes this to the firm's expanded geographic reach and
underlying diversity of trading strategies, which should be
supportive of revenue generation in excess of pre-pandemic levels
even if volatility remains low.
Retained Earnings Support Balance Sheet Growth: Jane Street's GAAP
balance sheet leverage is low relative to its rating, at 6.8x at
1Q24. Leverage increased compared to a year ago as the firm upsized
its Term Loan B and expanded its balance sheet. This was offset by
strong earnings and reasonable capital distributions which has led
to a meaningful expansion of Jane Street's tangible capital base
over recent periods, supporting the firm's balance sheet growth and
providing a more meaningful buffer against potential operational
losses. With member withdrawals expected to remain reasonable in
the context of earnings given firmwide policies, including
distributions limited to once per year, Fitch expects leverage to
remain conservatively managed.
Secured Funding Profile: Similar to peers, Jane Street's funding
profile is fully secured and relies on short-term, collateralized
prime broker facilities. While these facilities can be highly
confidence-sensitive, Jane Street's long, deep relationships with a
number of highly rated prime brokers mitigates some risks
associated with funding confidence. This is evidenced by the
notable extension of lock-up periods contained in its term margin
agreements with many of its prime brokers, which reduces the
likelihood of experiencing more severe trading losses in times of
market stress. Fitch would positively view the introduction of a
long-term unsecured debt component to the firm's funding structure
which would further enhance its financial flexibility.
Liquid Balance Sheet: Jane Street's liquidity is generally
adequate. The risks of its confidence-sensitive and predominantly
secured funding profile are partially offset by the largely liquid
securities inventory that primarily consists of Level 1 financial
instruments as well as a portion of Level 2 assets related to its
corporate bond and options strategies. Augmenting the firm's
liquidity is its $250 million committed revolving line of credit
that matures in January 2027, which could cover short-term funding
needs if needed, as well as the relatively high level of cash the
firm holds relative to its overall trading capital.
Fitch also notes that Jane Street manages its trading capital in
excess of margin requirements, allowing for reasonable financial
flexibility should markets become volatile and margin requirements
increase meaningfully.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
The Rating Outlook could be revised back to Stable from Positive
should Jane Street's capital growth slow in relation to its balance
sheet growth resulting in a sustained increase in net adjusted
leverage. The Rating Outlook could also be revised to Stable if the
firm's revenue generation erodes over the Rating Outlook horizon
driven by a lack of execution on trading strategies.
Beyond that, Jane Street's rating could be downgraded due to:
- An acute, idiosyncratic liquidity event that adversely impacts
the firm's ability to execute on its core business strategies;
- Material operational or risk management failures that adversely
impact profitability and/or market confidence;
- An inability to maintain net adjusted leverage below 10.0x;
- Adverse legal or regulatory actions against Jane Street which
result in a material fine, reputational damage, or alteration in
the business profile;
- An inability to maintain its strong market position in the face
of evolving market structures and technologies.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- The continuation of consistent operating performance through
different trading environments coupled with minimal operational
losses resulting in further capital expansion;
- Maintaining net adjusted leverage at or below current levels;
- Demonstration of continued funding flexibility, including access
to third-party funding through market cycles, the introduction of
an unsecured funding component and/or a moderate increase in excess
trading capital over margin requirements. Improved funding
flexibility could also be demonstrated by further improvement to
term margin agreement terms.
DEBT AND OTHER INSTRUMENT RATINGS: KEY RATING DRIVERS
The secured debt rating is equalized with the IDR and reflects the
fully secured funding profile and average recovery prospects in a
stressed scenario.
DEBT AND OTHER INSTRUMENT RATINGS: RATING SENSITIVITIES
The secured term loan rating is primarily sensitive to changes in
Jane Street's IDR and, secondarily, to material changes in its
capital structure and/or changes in Fitch's assessment of the
recovery prospects for the debt instrument.
ADJUSTMENTS
The Standalone Credit Profile (SCP) has been assigned in-line with
the implied SCP.
The Business Profile score has been assigned below the implied
score due to the following adjustment reason: Business model
(negative).
The Earnings & Profitability score has been assigned below the
implied score due to the following adjustment reason: Revenue
Diversification (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).
ESG Considerations
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Prior
----------- ------ -----
Jane Street
Group, LLC LT IDR BB+ Affirmed BB+
senior secured LT BB+ Affirmed BB+
JSG Finance, Inc.
senior secured LT BB+ Affirmed BB+
LAVIE CARE: U.S. Trustee Appoints Joani Latimer as PCO
------------------------------------------------------
Mary Ida Townson, the U.S. Trustee for Region 21, appointed Joani
Latimer as patient care ombudsman for Lavie Care Centers, LLC and
its affiliates.
The appointment was made pursuant to the order from the U.S.
Bankruptcy Court for the Northern District of Georgia on June 28.
Ms. Latimer disclosed in a court filing that she is a
"disinterested person" pursuant to Section 101(14) of the
Bankruptcy Code.
The ombudsman may be reached at:
Joani Latimer
State Long-Term Care Ombudsman
8004 Franklin Farms Drive
Richmond, Virginia 23229
Phone: (804) 565-1600
Email: Joani.Latimer@dars.virginia.gov
About Lavie Care Centers
LaVie Care Centers, LLC is the parent company of skilled nursing
facility operators and providers, with facilities primarily located
in Mississippi, North Carolina, Pennsylvania and Virginia. The
company operates 43 licensed facilities, with 4,300 beds, providing
short-term rehabilitation, comprehensive post-acute care, and
long-term care to its residents.
On June 2 and 3, 2024, LaVie Care Centers and 281 affiliates filed
voluntary petitions for relief under Chapter 11 of the Bankruptcy
Code (Bankr. N.D. Ga. Lead Case No. 24-55507), before Judge Paul
Baisier in Atlanta.
The Debtors tapped McDermott Will & Emery, LLP as legal counsel;
Stout Capital, LLC as investment banker; and Ankura Consulting as
financial advisor. M. Benjamin Jones, senior managing director at
Ankura, serves as the Debtors' chief restructuring officer.
Kurtzman Carson Consultants, LLC is the claims agent, and maintains
the page http://www.kccllc.com/LaVie
The U.S. Trustee for Region 21 appointed an official committee to
represent unsecured creditors in the Debtors' Chapter 11 cases.
LESLIE'S POOLMART: Moody's Cuts CFR to B2 & Alters Outlook to Neg.
------------------------------------------------------------------
Moody's Ratings downgraded Leslie's Poolmart, Inc.'s ("Leslie's")
corporate family rating to B2 from B1 and probability of default
rating to B2-PD from B1-PD. At the same time, Leslie's senior
secured term loan was also downgraded to B2 from B1. Moody's also
downgraded the speculative grade liquidity rating ("SGL") to SGL-3
from SGL-2. The outlook changed to negative from stable.
The downgrades reflect Leslie's weak operating performance as the
pool industry continues to be negatively impacted by weaker
consumer demand following a period of significant growth in the
installed base of pools and cold and wet spring conditions which
also hurt performance. Leslie's has experienced a material
contraction in demand particularly in discretionary higher priced
categories during its third fiscal quarter peak selling season
which accounts for approximately 70% of operating income
historically. Its reduction in fiscal 2024 financial guidance
suggests that credit metrics are to weaken substantially with
debt/EBITDA of 5.6x and EBIT/interest coverage of 1.0x.
The company's SGL-3 (adequate) reflects Moody's expectation that
the company will be free cash flow neutral in fiscal 2025 after
significant free cash flow is generated primarily from working
capital given its inventory reduction in its September 2024 fiscal
year end. The company has a $250 million asset based revolving
credit facility and cash is projected to be in excess of $80
million at the end of its fiscal year. Leslie's was successful in
reducing its revolver usage with $97million at the end of the
fiscal second quarter relative to $172 million for the same period
last year.
The negative outlook reflects the need for Leslie's to return to
consistent revenue growth and improve profit margins which will
support a reduction in leverage and free cash flow generation
while maintaining a conservative financial policy.
RATINGS RATIONALE
Leslie's B2 CFR reflects its solid positioning in the pool and spa
maintenance products space which serves residential, professional
and commercial consumers. The company continues to experience weak
demand as the growth of pool installations slow and discretionary
spending by its customers contracts, particularly on higher priced
items. The company has cycled its reduction of pricing of chlorine
related products that was implemented in June 2023 with its
chemical category declining one percent for the third quarter and
returning to mid-single digit growth for the month of June.
Nonetheless, consumers continue to curtail purchases with
discretionary spending down 9% in the third fiscal quarter and
equipment sales down mid-teens. Leslie's has made significant
improvement reducing its inventory position with its planned target
of a 20% decline at the end of fiscal 2024. Debt/EBITDA is expected
to increase to 5.6x at the end of September 2024 from 4.4x a year
prior as margins are hurt from negative operating leverage related
to its comparable sales declines. Debt/EBITDA should remain stable
in fiscal 2025 at 5.5x as consumer spending improves and costs are
reduced. Interest coverage is expected to about 0.9x at September
30, 2024 given its lower profitability and the variable interest
debt structure. Its limited absolute scale, narrow product focus
and geographic concentration are also added risks. Nonetheless
despite growth slowing, long term pool installation growth and the
need to maintain a pool once built, supports a return to top line
growth in future years.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be downgraded if earning performance does not
improve or liquidity weakens including if the company has negative
free cash flow. Quantitatively, the ratings could be downgraded if
debt/EBITDA is sustained above 6.0x or EBIT/interest expense is
sustained below 1.5x.
The ratings could be upgraded if revenue and earnings consistently
improve, if liquidity remains is good, including positive free cash
flow, and financial policies remain conservative. Quantitatively,
the ratings could be upgraded if debt/EBITDA is sustained below
5.0x or EBIT/interest expense sustained above 2.0x.
Headquartered in Phoenix, AZ, Leslie's Poolmart, Inc. is a public
specialty pool supplies retailer that operated 1,010 stores and
commercial centers as of March 2024. Sales for the last twelve
months ended March 30, 2024 are approximately $1.4 billion.
The principal methodology used in these ratings was Retail and
Apparel published in November 2023.
LIFESPANN ENHANCED: Joseph Cotterman Named Subchapter V Trustee
---------------------------------------------------------------
The U.S. Trustee for Region 14 appointed Joseph Cotterman as
Subchapter V trustee for LifeSpann Enhanced Skin & Body Care,
PLLC.
Mr. Cotterman will be paid an hourly fee of $500 for his services
as Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. Cotterman declared that he is a disinterested person according
to Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Joseph E. Cotterman
5232 W. Oraibi Drive
Glendale, AZ 85308
Telephone: 480-353-0540
Email: cottermail@cox.net
About LifeSpann Enhanced Skin & Body Care
LifeSpann Enhanced Skin & Body Care, PLLC, also known as LifeSpann
Primary Care & Esthetics, filed a petition under Chapter 11,
Subchapter V of the Bankruptcy Code (Bankr. D. Ariz. Case No.
24-06143) on July 28, 2024, with $100,001 to $500,000 in assets and
liabilities.
Evans O'Brien, Esq., at O'Brien Legal, PLLC represents the Debtor
as legal counsel.
LIKEMIND BRANDS: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: LikeMind Brands, Inc.
8123 East 34 Road
Cadillac MI 49601
Business Description: The Debtor is a privately held e-commerce
retailer.
Chapter 11 Petition Date: August 2, 2024
Court: United States Bankruptcy Court
Western District of Michigan
Case No.: 24-02042
Judge: Hon. James W Boyd
Debtor's Counsel: Perry Pastula, Esq.
DUNN, SCHOUTEN & SNOAP, P.C.
2745 Dehoop Ave SW
Wyoming MI 49509
Tel: 616-538-6380
Email: ppastula@dunnsslaw.com
Total Assets: $515,939
Total Liabilities: $2,051,905
The petition was signed by Justin Trump as president.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 20 largest unsecured creditors is available
for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/Z4KFT2A/LikeMind_Brands_Inc__miwbke-24-02042__0001.0.pdf?mcid=tGE4TAMA
LTC TRANSPORTATION: Patricia Fugee Named Subchapter V Trustee
-------------------------------------------------------------
The U.S. Trustee for Regions 3 and 9 appointed Patricia Fugee of
FisherBroyles, LLP as Subchapter V trustee for LTC Transportation,
LLC.
Ms. Fugee will be paid an hourly fee of $365 for her services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Ms. Fugee declared that she is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Patricia B. Fugee
FisherBroyles, LLP
27100 Oakmead Drive #306
Perrysburg, OH 43551
Phone: (419) 874-6859
Email: Patricia.Fugee@FisherBroyles.com
About LTC Transportation
LTC Transportation, LLC operates in the general freight trucking
industry. The company is based in Saint Marys, Ohio.
The Debtor filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. N.D. Ohio Case No. 24-31391) on July 29,
2024, with $1,173,337 in assets and $1,381,244 in liabilities. Tod
Chiles, managing member, signed the petition.
Judge Mary Ann Whipple presides over the case.
Eric Neuman, Esq., at Diller and Rice, LLC represents the Debtor as
legal counsel.
MARIN SOFTWARE: Incurs $2.02 Million Net Loss in Second Quarter
---------------------------------------------------------------
Marin Software Incorporated filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q reporting a net loss
of $2.02 million on $4.05 million of net revenue for the three
months ended June 30, 2024, compared to a net loss of $5.92 million
on $4.36 million of net revenue for the three months ended June 30,
2023.
"Marin is transforming how performance media buyers manage their
spend allocation decisions. The tools we've built this quarter in
Ascend provide the transparency and control to deliver maximum ROI
across an expanding number of ad platforms," said Chris Lien, Marin
Software's CEO, in a press release. "We're thrilled to continue
delivering this innovation, thanks in part to the renewal of our
strategic partnership agreement with Google."
For the six months ended June 30, 2024, the Company reported a net
loss of $4.43 million on $8.08 million of net revenue, compared to
a net loss of $11.70 million on $8.94 million of net revenue for
the six months ended June 30, 2023.
As of June 30, 2024, the Company had $14.43 million in total
assets, $4.57 million in total liabilities, and $9.86 million in
total stockholders' equity.
Marin stated, "Based on the funds the Company has available as of
the date of the filing of this Quarterly Report on Form 10-Q and
its history of recurring losses and negative operating cash flows,
there is substantial doubt raised about the Company's ability to
continue as a going concern. The Company's ability to continue as
a going concern is substantially dependent upon its ability to
achieve its intended business objectives. If the Company is unable
to achieve its intended business objectives, it is probable that
the Company may be required to initiate further cost savings
activities, extend payment terms with suppliers, liquidate assets
where possible, or wind-up operations. These actions could
materially impact the Company's business, results of operations and
future prospects. Therefore, there is substantial doubt about the
Company's ability to continue as a going concern for one year after
the filing date of the accompanying condensed consolidated
financial statements."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1389002/000095017024089330/mrin-20240630.htm
About Marin Software
Marin Software Incorporated is a provider of digital marketing
solutions for search, social, and eCommerce advertising channels,
offered as a unified SaaS, advertising management platform for
performance-driven advertisers and agencies. The Company's
platform is an analytics, workflow and optimization solution for
marketing professionals, enabling them to maximize the performance
of their digital advertising spend. The Company markets and sells
its solutions to advertisers directly and through leading
advertising agencies, and its customers collectively manage
billions of dollars in advertising spend on its platform globally
across a wide range of industries.
San Jose, California-based Grant Thornton LLP, the Company's
auditor since 2018, issued a "going concern" qualification in its
report dated Feb. 23, 2024, citing that the Company incurred a net
loss of $22 million during the year ended Dec. 31, 2023, and as of
that date, the Company had an accumulated deficit of approximately
$344 million and negative operating cash flows. These conditions,
along with other matters, raise substantial doubt about the
Company's ability to continue as a going concern.
MARTINEZ PALLET: Hires Law Offices of Gabriel Liberman as Counsel
-----------------------------------------------------------------
Martinez Pallet Services, Inc. seeks approval from the U.S.
Bankruptcy Court for the Eastern District of California to employ
the Law Offices of Gabriel Liberman, APC to handle its Chapter 11
case.
The firm will be paid at these rates:
Gabriel E. Liberman $385 per hour
Paraprofessionals $150 per hour
On March 11, 2024, the Debtor paid the firm the sum of $25,000.
The firm will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Gabriel E. Liberman, Esq., a partner at Law Offices Of Gabriel
Liberman, APC, disclosed in a court filing that the firm is a
"disinterested person" as the term is defined in Section 101(14) of
the Bankruptcy Code.
The firm can be reached at:
Gabriel E. Liberman, Esq.
Law Offices Of Gabriel Liberman, APC
1545 River Park Drive, Ste 530
Sacramento, CA 95815
Tel: (916) 485-1111
Email: attorney@4851111.com
About Martinez Pallet Services
Martinez Pallet Services, Inc. is a pallet supplier in Turlock,
Calif.
The Debtor filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. E.D. Calif. Case No. 24-90343) on June 21,
2024, with up to $50,000 in assets and up to $10 million in
liabilities. Francisco Mora Martinez, president, signed the
petition.
Judge Ronald H. Sargis presides over the case.
Gabriel E. Liberman, Esq., at the Law Offices of Gabriel Liberman,
APC represents the Debtor as legal counsel.
MAT TRANSPORT INC: Seeks Chapter 11 Bankruptcy Protection
---------------------------------------------------------
Mat Transport Inc. filed Chapter 11 protection in the District of
Arizona. 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 27, 2024 at 9:00 a.m. in Room Telephonically.
About Mat Transport Inc.
Mat Transport Inc. is a shipping company in Arizona.
Mat Transport Inc. sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Ariz. Case No. 24-05932) on July 22,
2024. In the petition filed by Marko Tomovic, as president, the
Debtor reports estimated assets and liabilities between $1 million
and $10 million each.
The Honorable Bankruptcy Judge Madeleine C. Wanslee oversees the
case.
The Debtor is represented by:
D. Lamar Hawkins, Esq.
GUIDANT LAW, PLC
402 E. Southern Ave
Tempe, AZ 85282
Tel: 602-888-9229
Email: lamar@guidant.law
MAXLINEAR INC: Moody's Cuts CFR to B1 & Alters Outlook to Negative
------------------------------------------------------------------
Moody's Ratings downgraded MaxLinear, Inc.'s Corporate Family
Rating to B1 from Ba3, Probability of Default Rating to B1-PD from
Ba3-PD. Moody's also downgraded the senior secured bank credit
facilities, comprised of the revolver due 2026 (Revolver) and term
loan B due 2028 (Term Loan) to B1 from Ba3. Moody's also downgraded
the Speculative Grade Liquidity (SGL) rating to SGL-3 from SGL-1.
The outlook was revised to negative from stable.
The downgrade of MaxLinear's CFR reflects the poor financial
performance and Moody's expectation that EBITDA margins and
leverage metrics will remain weak over the next 12 to 18 months.
Moody's expect that ongoing inventory clearing process in the
broadband semiconductor chip industry, which has led to steep
declines in MaxLinear's revenues and profitability, is unlikely to
be completed until the end of 2024, with only a modest recovery
beginning in 2025.
Reflecting governance concerns due to the highly-leveraged
financial profile, Moody's revised the ESG Governance score to G-4
from G-3, resulting in a revision of the Credit Impact Score (CIS)
to CIS-4 from CIS-3.
MaxLinear is engaged in an arbitration initiated by Silicon Motion
Technology Corp. (Silicon Motion) on October 5, 2023 with the
Singapore International Arbitration Centre. This follows
MaxLinear's termination of its agreement to acquire Silicon Motion
a month earlier citing, among several other reasons, that Silicon
Motion had suffered a Material Adverse Effect (as defined in the
acquisition agreement) that was continuing. Silicon Motion formally
rejected MaxLinear's grounds for terminating the acquisition.
Through the arbitration process, Silicon Motion is seeking payment
of the $160 million acquisition termination fee plus damages.
Should Silicon Motion prevail in the arbitration, and MaxLinear is
compelled to make a substantial cash payment to Silicon Motion,
this would pressure MaxLinear's B1 CFR.
RATINGS RATIONALE
The B1 CFR reflects MaxLinear's depressed revenues and
profitability, with quarterly revenues down approximately 50% year
over year and negative free cash flow (FCF) and EBITDA (Moody's
adjusted) for the quarter ended June 30, 2024. The revenue
volatility is due in part to MaxLinear's concentrated end market
exposure, which differs from the company's larger competitors such
as Broadcom Technology Inc. (Broadcom), whose diverse end markets
limit the overall revenue impact of declines in any one segment.
Moody's expect FCF will remain negative for the remainder of 2024
due to low revenues and profitability as customers work down excess
inventory. With customer inventories balanced, a modest revenue
recovery will emerge in early 2025 supporting a steady improvement
in debt to EBITDA (Moody's adjusted) toward 4x over the next 12 to
18 months.
MaxLinear benefits from a large cash balance, which exceeds
reported debt, and its outsourced manufacturing model, which limits
capital spending needs. MaxLinear has a valuable intellectual
property (IP) as indicated by the high adjusted gross margins
(maintained in the low to mid 50 percent level despite the current
sharp decline in revenues). MaxLinear also holds niche market
positions in radio frequency (RF) chips used primarily in home
networking, wireless infrastructure, and data center systems.
The negative outlook reflects Moody's expectation that revenues
will remain weak over the next 12 to 18 months, as customers work
down excess inventory. The negative outlook also reflects the risk
that the Silicon Motion arbitration could require MaxLinear to make
a settlement payment to Silicon Motion, though Moody's believe that
MaxLinear's liquidity is sufficient given the high cash balance
($185.1 million as of June 30, 2024). Moody's expect a recovery in
demand beginning in early 2025 with customer inventory clearing
completed. Despite the recovery over the next 12 to 18 months,
Moody's expect that revenues will still be about 5% lower compared
to the twelve months ended June 30, 2024. Over the period, Moody's
expect the EBITDA margin to rise to about 10% (Moody's adjusted)
and debt to EBITDA improving to about 4x (Moody's adjusted) due to
cost reduction actions taken over the past year.
The SGL-3 rating reflects MaxLinear's adequate liquidity,
incorporating the potential for a negative outcome of the Silicon
Motion arbitration and the cash consumption expected through the
end of 2024. Liquidity is supported by a large cash balance ($185.1
million at June 30, 2024). Moody's expect that MaxLinear will
generate annual free cash flow (Moody's adjusted) of at least $20
million over the next 12 to 18 months (exclusive of any settlement
payment that may be required under the Silicon Motion arbitration).
This reflects a recovery in revenues and profitability beginning in
early 2025, leading to positive FCF, with the recovery further
strengthening in 2026.
Absent a negative outcome on the Silicon Motion arbitration, given
the large cash balance and improving FCF, Moody's do not expect
that MaxLinear will need to draw on the $100 million senior secured
revolving credit facility due June 2026 (Revolver). The senior
secured term loan B due June 2028 (Term Loan) is not subject to any
financial maintenance covenants. The Revolver, however, contains a
springing financial covenant set at 3.5x debt to EBITDA (as defined
in the credit agreement), which is tested at Revolver utilization
in excess of just 1% of total commitments (borrowings or letters of
credit). Given MaxLinear's depressed profitability, Moody's believe
that availability under the Revolver will be severely limited for
at least the next several quarters.
The Term Loan and the Revolver are both rated B1, reflecting the
single class of debt in the capital structure. These debt
instruments benefit from the collateral, which is comprised of a
first priority lien on the company's assets.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Given the negative outlook and uncertain outcome of the Silicon
Motion arbitration, a rating upgrade is unlikely over the near
term. Assuming successful resolution of the Silicon Motion
arbitration, the rating could be upgraded if MaxLinear profitably
increases scale and diversity. Annual revenues should be sustained
above $1 billion and the EBITDA margin (Moody's adjusted) sustained
at least in the mid 20s percent level. Moody's would also expect
MaxLinear to limit the use of financial leverage such that FCF to
debt (Moody's adjusted) would be maintained above 30%.
The ratings could be downgraded if Silicon Motion is awarded a
large settlement upon conclusion of the arbitration, which strains
MaxLinear's liquidity or, if funded by borrowing, materially
increases financial leverage. The rating could also be downgraded
if revenues and profitability do not show signs of recovery by the
end of 2024. If cash consumption persists or intensifies such that
MaxLinear's liquidity materially erodes, the rating could be
downgraded.
MaxLinear, Inc. is a fabless semiconductor firm that produces
radiofrequency (RF) and mixed-signal integrated circuits used in
broadband communications, data centers, and metro and long-haul
data transport network applications.
The principal methodology used in these ratings was Semiconductors
published in October 2023.
MCDANIEL PLUMBING: Alexandra Garrett Named Subchapter V Trustee
---------------------------------------------------------------
Mark Zimlich, the U.S. Bankruptcy Administrator for the Southern
District of Alabama, appointed Alexandra K. Garrett as Subchapter V
trustee for McDaniel Plumbing, Inc.
About McDaniel Plumbing
McDaniel Plumbing, Inc. sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. S.D. Ala. Case No. 24-11859) on July
29, 2024, with up to $50,000 in assets and up to $500,000 in
liabilities.
Judge Henry A. Callaway presides over the case.
Vallee V. Connor, Esq., at Frances Hoit Hollinger, LLC represents
the Debtor as legal counsel.
META MATERIALS: IT Systems Disrupted; Canadian Unit in Bankruptcy
-----------------------------------------------------------------
Meta Materials Inc. reported in a Form 8-K filed with the
Securities and Exchange Commission on Aug. 1, 2024, that on July
25, 2024, the Company became aware that its website, email system
and other related information technology (IT) systems were
significantly disrupted and taken offline. Upon detecting the
disruption, the Company immediately began taking steps to restore,
contain, and remediate the incident with internal and external
cybersecurity experts, including beginning an investigation as to
the cause of the disruption.
Metal Materials disclosed that, "On initial investigation, the
Company learned that a former executive officer of the Company
deliberately de-activated and cancelled the renewal of the
Company's website, which significantly impacted the Company's IT
systems, including delivery and receipt of electronic email
communications from customers, investors and other stakeholders of
the Company. With the assistance of outside legal counsel, the
Company was able to compel the reinstatement of the website and
commenced a process to ensure that IT functionality would continue
uninterrupted. The website was re-activated and email systems
restored on July 29, 2024, although functionality continues to be
stressed and delayed as systems come back online. The Company,
along with its internal and external cybersecurity experts,
continue to work diligently to respond to and mitigate any impact
from the incident."
In addition, the Company said it continues to evaluate any
unauthorized access to sensitive and confidential information of
the Company and its stakeholders in connection with this incident.
"Other than the website being offline for a period of time and
delayed communications through the Company's IT systems, this
unauthorized action by the former executive officer does not appear
to have had a material impact on the protection of the Company's
intellectual property, or that there was unauthorized access to
customer or stakeholder proprietary information. The Company
continues to investigate any continuing security issues and IT
functionality, and assess other actions the Company will take in
response to this security and operational incident," Meta Materials
added.
The Company has not yet determined whether the incident is
reasonably likely to materially impact the Company's financial
condition or results of operations.
Unit Files for Bankruptcy
The Company also disclosed that on July 26, 2024, Metamaterial
Technologies Canada Inc., its subsidiary, commenced bankruptcy
proceedings by filing an assignment in bankruptcy under section 49
of the Bankruptcy and Insolvency Act (Canada) in the District Court
of Ontario. Grant Thornton Limited was appointed as trustee in the
bankruptcy for the benefit of the creditors of MTCI. The trustee
will wind down the business of MTCI and make distributions, if any,
to its creditors in accordance with the applicable provisions of
the Bankruptcy and Insolvency Act (Canada).
About Meta Materials
Headquartered in Dartmouth, Nova Scotia, Canada, Meta Materials
Inc. is an advanced materials and nanotechnology company. The
Company is developing materials that it believes can improve the
performance and efficiency of many current products as well as
allow new products to be developed that cannot otherwise be
developed without such materials. The Company has product concepts
currently in various stages of development with multiple potential
customers in diverse market verticals.
Vaughan, Canada-based KPMG LLP, the Company's auditor since 2020,
issued a "going concern" qualification in its report dated March
28, 2024, citing that the Company has suffered recurring losses and
negative cash flows from operations and requires additional
financing to fund its operations that raise substantial doubt about
its ability to continue as a going concern.
MIDCONTINENT COMMUNICATIONS: Moody's Rates New Secured Loans 'Ba2'
------------------------------------------------------------------
Moody's Ratings affirmed Midcontinent Communications'
("Midcontinent" or "the company") B1 Corporate Family Rating and
B1-PD Probability of Default Rating. Moody's assigned a Ba2 rating
to a new senior secured credit facility as proposed, including a
5-year, $500 million Revolving Credit Facility and 7-year, $600
million Term Loan B. Moody's also affirmed the Ba3 existing senior
secured credit facilities and the B3 rated senior unsecured notes.
The outlook is stable.
On June 28, 2024, Midcontinent announced [1] that, its wholly owned
affiliate Midcontinent Communications Investor, LLC, had agreed in
principle with its partner Comcast Midcontinent, LLC, to extend its
ownership agreement through December 31, 2030. The extension is
conditioned upon each partner receiving (in cash) an equal, 50%
pro-rata share of a shareholder distribution (the dividend) equal
to not less than $300 million on or before March 31, 2025.
The company is planning to refinance its existing credit facility
and concurrently distribute a dividend of $300 million, pursuant to
the extension agreement. In connection with this transaction,
Moody's expect Midcontinent to raise incremental unsecured notes to
fully fund the dividend, repay outstanding revolving credit
borrowings, and pay transaction fees and expenses. Moody's expect
the ratings on the existing B3 rated senior unsecured notes to be
unaffected by the issuance of incremental notes. The ratings on the
existing senior secured credit facility are expected to be
withdrawn at close. The Ba2 rating on the proposed senior secured
credit facility is based on an assumed issuance of $400 million in
unsecured notes. A change in the debt mix to more secured debt
could result in a lower rating on the secured debt.
Moody's view the transaction as credit negative. While the
refinancing will extend the maturity profile and provide additional
revolving capacity (with $100 million upsize), Moody's expect debt
to increase by over 30% and leverage by approximately 1.0x (to low
4x from 3.2x, Moody's adjusted), PF for the close of the
transaction, using the Last Twelve Months (LTM) ended Q1 2024
EBITDA (Moody's adjusted). Additionally, Moody's estimate
incremental debt service costs of approximately $20 million, which
approximates free cash flow in 2023 (Moody's adjusted). The
estimates are subject to change based on the ultimate quantum and
cost of the debt raised.
RATINGS RATIONALE
The credit profile of the company reflects governance risk
reflected in the CIS-4 Credit Impact Score (CIS) and G-4 governance
Issuer Profile Score (IPS) with a tolerance for leverage at or
above 4x for significant debt-financed dividends, during difficult
macro-economic challenges and competitive dynamics. Concentrated
ownership also creates some risk, including key-man. Strong and
intensifying competitive dynamics increasingly constrains broadband
subscriber growth and is driving sustained and high subscriber
losses (and penetration rates lower) in video and voice. Free cash
flows are constrained and very limited, primarily by high capital
intensity (capex/revenue near mid 30% in 2023) due to significant
multi-year investments to upgrade the network infrastructure to
improve the quality of broadband service, including delivering
faster speeds. Its small scale and limited geographic diversity
with a regional footprint in just a couple of states in the Midwest
is also a constraint.
Supporting the credit profile is a very stable, predictable, and
profitable business model (with EBITDA margins near mid-40%), with
sustained demand drivers in residential and commercial broadband.
The company maintains a strong market position in broadband with
over 50% penetration (in homes passed) and is investing heavily in
robust high-speed network upgrades to respond to competitive
threats which should help defend its subscriber base and market
share. The company's credit profile also benefits from its
ownership by a much higher-rated, investment grade owner (Comcast
Corporation, A3 stable) which holds a 50% equity interest.
Moody's expect Midcontinent to maintain good liquidity over the
next 12 months. The Company's internal sources of liquidity (cash
and operating cash flow) are positive, there is a large and mostly
undrawn revolving credit facility, and significant covenant
headroom. Alternate liquidity is limited by a partially secured
capital structure.
Marketing terms for the new credit facilities (final terms may
differ materially) include the following provisions:
Incremental pari-passu debt capacity is available, equal to an
amount up to $315 million plus an amount subject to senior secured
leverage under 4.0x; The credit agreement does not permit the
designation of unrestricted subsidiaries, preventing collateral
"leakage" to such subsidiaries; There are some limitations on
up-tiering transactions, requiring 100% lender consent for
amendments that subordinate the any obligations or change
provisions regarding pro rata payments or the order of any
waterfall; There is no carve-out that permits the unused capacity
of restricted payments baskets to be used to incur further debt.
The stable rating outlook reflects Moody's expectation that revenue
will be flat to down marginally, but EBITDA will expand by low to
mid-single-digit percent over the next 12-18 months supported by a
favorable mix shift to higher-margin broadband, and rising pricing.
Moody's expect EBITDA margins to rise marginally but remain in the
mid 40% range but, while leverage could fall below 4x to the high
3x range with EBITDA growth. Free cash flow will remain limited by
high capital intensity (with capex to revenue falling to the mid
20% range).
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Constrained free cash flow limits upward ratings momentum. However,
Moody's could consider positive ratings pressure if Debt/EBITDA
(Moody's adjusted leverage ratio) is sustained below 3.5x and
retained free cash flow to net debt (Moody's adjusted) is sustained
above 20%. An upgrade would also be conditional on the expectation
for steady revenue and earnings growth supported by a stable or
growing broadband subscriber base and improving liquidity.
Moody's could consider a downgrade if Debt/EBITDA (Moody's adjusted
leverage ratio) is sustained above 4.5x or retained free cash flow
to net debt (Moody's adjusted) is sustained below 15%. A negative
rating action could also be considered if the broadband subscriber
base declines, liquidity or performance worsened, financial policy
turned more aggressive, or there was a material decline in market
scale or position.
Headquartered in Sioux Falls, South Dakota, Midcontinent
Communications provides video, high speed data, and voice services
to residential and commercial customers in the states of Kansas,
Minnesota, North Dakota, South Dakota, and Wisconsin. Through a
partnership arrangement, Comcast Corporation owns a 50% common
equity interest in Midcontinent. Revenue for the twelve months
ended March 31, 2024 was approximately $723 million.
The principal methodology used in these ratings was
Telecommunications Service Providers published in November 2023.
MINI MANIA: U.S. Trustee Appoints Creditors' Committee
------------------------------------------------------
The U.S. Trustee for Region 17 appointed an official committee to
represent unsecured creditors in the Chapter 11 case of Mini Mania,
Inc.
The committee members are Donald Racine and Michael Abramson.
Official creditors' committees serve as fiduciaries to the general
population of creditors they represent. They may investigate the
debtor's business and financial affairs. Committees have the right
to employ legal counsel, accountants and financial advisors at a
debtor's expense.
About Mini Mania
Mini Mania Inc., doing business as Sprintboostersales.com, owns and
operates automotive parts, accessories, and tire stores. On the
Web: https://minimania.com/
Mini Mania filed Chapter 11 petition (Bankr. E.D. Calif. Case No.
24-22456) on June 4, 2024, with total assets of $1,155,121 and
total liabilities of $3,312,513. Jonathan Harvey, president, signed
the petition.
Judge Fredrick E. Clement oversees the case.
Steven R. Fox, Esq., at The Fox Law Corporation, Inc. and The
Patrick Rettig Corporation serve as the Debtor's legal counsel and
financial consultant, respectively.
MORNING JUMP: Unsecured Creditors to Split $200K over 3 Years
-------------------------------------------------------------
The Morning Jump, LLC, filed with the U.S. Bankruptcy Court for the
Eastern District of North Carolina a Disclosure Statement
describing Chapter 11 Plan dated July 17, 2024.
The Debtor is a North Carolina limited liability company formed in
2013 which operates a coffee company in Spring Lake, North
Carolina. The Debtor is a family run, drive-through coffee shop and
roaster.
Morning Jump was opened by retired US Army Special Forces Master
Sergeant Erik Brinkman just outside Fort Liberty (formerly Fort
Bragg) to serve the community, including military servicemembers
and their families. Morning Jump serves coffee drinks, breakfast,
and lunch, as well as ground coffee, monthly coffee subscriptions,
and merchandise.
The Debtor filed Chapter 11 to continue operations while
simultaneously restructuring its debt, and paying as much of its
debt as is feasible.
Upon confirmation of this Plan, Debtor will continue to operate and
make plan payments from funds available after the payment of
operating expenses.
Class 11 is comprised of all Allowed Unsecured Claims under $1,000.
Class 11 Claims shall be paid in full thirty days after the
Effective Date. Debtor estimates that Class 11 claims will total
approximately $943.13.
Class 12 is comprised of the Allowed Claims not treated elsewhere
in the Plan. Class 12 Claims shall be paid a total of $200,000 in
monthly payments as follows:
* Year 1: $20,000 in six equal monthly payments of $3,333.33
beginning on the first day of the first month following the date
six months after the Effective Date, with each subsequent payment
being made on the first day of each month thereafter.
* Year 2: Twelve equal monthly payments of $5,000 to be made
on the first day of each month following the end of the Year 1
payments.
* Year 3: Twelve equal monthly payments of $10,000 to be made
on the first day of each month following the end of the Year 2
payments.
Based on the Debtor's schedules and the filed proofs of claim,
Debtor estimates that Class 12 claims total approximately
$1,043,968.45.
Equity holders shall retain their equity interests.
The Bankruptcy Code requires, as a condition to confirmation, that
confirmation of a plan is not likely to be followed by the
liquidation (unless the plan calls for liquidation) or the need for
further financial reorganization. The debtor believes that the Plan
is feasible, and has attached as Exhibit B simple financial
projections for the next 3 years to demonstrate that feasibility.
A full-text copy of the Disclosure Statement dated July 17, 2024 is
available at https://urlcurt.com/u?l=FVb9QG from PacerMonitor.com
at no charge.
Counsel to the Debtor:
William P. Janvier, Esq.
Stevens Martin Vaughn & Tadych, PLLC
2225 W. Millbrook Road,
Raleigh, NC 27612
Tel.: (919) 582-2300
Email: wjanvier@smvt.com
About The Morning Jump
The Morning Jump, LLC, is a North Carolina limited liability
company formed in 2013 which operates a coffee company in Spring
Lake, North Carolina.
The Debtor sought Chapter 11 protection (Bankr. E.D.N.C. Case No.
24-01113) on April 4, 2024. The Debtor estimated listed assets of
$100,000 to $500,000 and liabilities of $1 million to $10 million
as of the bankruptcy filing. The Hon. David M. Warren is the case
judge. Stevens Martin Vaughn & Tadych, PLLC, led by William P.
Janvier, is the Debtor's counsel.
MURDOCH FINANCE: Files for Chapter 11 Bankruptcy
------------------------------------------------
Murdoch Finance Company filed Chapter 11 protection in the District
of Idaho. The Debtor reports $13,987,052 in debt owed to 100 and
999 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
Aug. 22, 2024 at 9:00 a.m. in Room Telephonically.
About Murdoch Finance Company
Murdoch Finance Company is a provider of car loans and auto
financing in Boise Idaho.
Murdoch Finance Company sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Idaho Case No. 24-00481) on July 24,
2024. In the petition filed by Richard Bruce Murdoch, as president,
the Debtor reports total assets of $1,744,524 and total liabilities
of $13,987,052.
The Honorable Bankruptcy Judge Noah G. Hillen oversees the case.
The Debtor is represented by:
Matthew Christensen, Esq.
JOHNSON MAY
199 N. Capitol Blvd.
Suite 200
Boise, ID 83702
Tel: (208) 384-8588
Email: mtc@johnsonmaylaw.com
NOVA LIFESTYLE: Signs $200K Purchase Agreement With Huge Energy
---------------------------------------------------------------
Nova LifeStyle, Inc. disclosed in a Form 8-K filed with the
Securities and Exchange Commission that on July 30, 2024, it
entered into a securities purchase agreement with Huge Energy
International Limited located at Wing Lok St, Sheung Wan, Hong
Kong, pursuant to which the Company agreed to sell to the Purchaser
in a private placement 125,000 shares of the Company's common
stock, par value $0.001 per share, at a purchase price of $1.60 per
share for an aggregate price of $200,000. The Private Placement
will be completed pursuant to the exemption from registration
provided by Regulation S promulgated under the Securities Act of
1933, as amended.
About Nova Lifestyle
Headquartered in Commerce, Calif., Nova LifeStyle, Inc. is a
distributor of contemporary styled residential and commercial
furniture incorporated into a dynamic marketing and sales platform
offering retail as well as online selection and global purchase
fulfillment. The Company monitors popular trends and products to
create design elements that are then integrated into the Company's
product lines that can be used as both stand-alone or whole-room
and home furnishing solutions. Through its global network of
retailers, e-commerce platforms, stagers and hospitality providers,
Nova LifeStyle also sells (through an exclusive third-party
manufacturing partner) a managed variety of high quality bedding
foundation components.
San Mateo, Calif.-based WWC, P.C., the Company's auditor since
2022, issued a "going concern" qualification in its report dated
April 12, 2024, citing that the Company incurred a net loss for the
years ended Dec. 31, 2023 and 2022, and the accumulated deficit
increased from $36.71 million to $44.43 million from 2022 to 2023.
These factors raise substantial doubt about the Company's ability
to continue as a going concern.
OWENS & MINOR: Moody's Alters Outlook on 'Ba3' CFR to Negative
--------------------------------------------------------------
Moody's Ratings revised Owens & Minor, Inc.'s outlook to negative
from stable. Concurrently, Moody's affirmed Owens & Minor's
existing ratings, including the company's Ba3 Corporate Family
Rating, Ba3-PD Probability of Default Rating, the Ba3 rating on its
senior secured bank credit facilities and senior secured notes and
the B2 rating on its senior unsecured debts. The Speculative Grade
Liquidity Rating (SGL) remains unchanged at SGL-2.
The revision of the outlook to negative reflects Moody's
expectation of increased leverage from Owens & Minor's recently
announced acquisition of Rotech Healthcare Holdings, Inc.
("Rotech"), a home medical equipment provider, which will be funded
by new debt issuance. The acquisition is subject to regulatory
reviews with a targeted close by year-end 2024. The company's
leverage as of March 31, 2024 was 5.1x. The transaction will
negatively impact the company's deleveraging path and Moody's now
expect leverage to remain above 4x on a Moody's adjusted leverage
through 2026.
The affirmation of the Ba3 CFR reflects Moody's view that Owens &
Minor's performance has stabilized, and the company's on-going cost
realignment plan will have a continued positive impact on earnings.
Earnings will also benefit from a growing contribution from the
company's home health business which has higher profitability and
stronger growth prospects compared to Owens & Minor's core hospital
distribution business. Moody's expect leverage to increase to the
mid 4x range post acquisition debt raise, with deleveraging towards
4x by year-end 2026 supported by earnings growth and debt
repayment. Moody's expect that Owens & Minor will maintain good
liquidity, supported by solid cash balances and positive cashflow
generation.
RATINGS RATIONALE
The Ba3 CFR is supported by Owens & Minor's leading position in the
medical and surgical supply distribution business supplemented by a
manufacturing business. Owens & Minor focuses on single-use
consumable products which have low levels of technological
obsolescence risk but are essential to the provision of healthcare
in a wide range of settings. The company's continued expansion into
home health, including the Rotech acquisition, will broaden its
product range and support profitability and future earnings growth.
Moody's expect leverage pro forma for the Rotech acquisition and
debt raise to be approximately 4.5x in early 2025 driven by solid
earnings growth and some debt paydown, with improvement towards
4.0x by the end of 2026.
The rating is constrained by Owen's & Minor's scale compared to
larger peers, and low distribution margins reflecting a highly
competitive industry. Further, Owens & Minor's manufacturing
business faces a volatile outlook due to the high fixed cost
nature of the business and volatile demand for personal protective
equipment post COVID.
The Speculative Grade Liquidity Rating of SGL-2 reflects the
company's good liquidity. Liquidity is supported by positive free
cash flow after required debt amortization and access to external
credit facilities. As of March 31, 2024, Owens & Minor had cash of
$245 million. The company has a $171 million bond maturity in
December 2024. Moody's expect the company to use internally
generated cash to repay the upcoming debt maturity. Liquidity is
also supported by a $450 million revolving credit facility
(currently undrawn) that expires in March 2027 and a $450 million
asset receivable securitization facility ($64 million drawn) that
expires in March 2025. Moody's expect Owens & Minor to maintain
adequate headroom on its covenants.
The Ba3 rating on the senior secured debt and the B2 rating on the
senior unsecured debt consider the size and seasonal fluctuation of
trade payables.
The negative outlook reflects Moody's expectation for sustained
elevated leverage as the company's efforts to improve its credit
metrics will be tempered by additional debt raise for the Rotech
acquisition.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if the company is able to increase
its scale while improving diversification. Additionally, the
ratings could also be upgraded if the company maintains good
liquidity and balanced financial policies. Along with the
aforementioned factors, the ratings could be upgraded if adjusted
debt/EBITDA is sustained below 3.0x.
The ratings could be downgraded if the company's operating
performance deteriorates or if the company fails to reduce leverage
through a combination of earnings growth and debt repayment. The
ratings could also be downgraded if liquidity deteriorates. Lastly,
the company could be downgraded if adjusted debt/EBITDA is
sustained above 4.0x
Owens & Minor, headquartered in Mechanicsville, VA, operates two
segments: Products & Healthcare Services that includes a
comprehensive portfolio of products and services to healthcare
providers and sources medical surgical products, and Patient Direct
that distributes critical supplies to the home for patients with
chronic conditions. For the LTM period ending March 31, 2024, Owens
& Minor had revenues of $10 billion.
The principal methodology used in these ratings was Distribution
and Supply Chain Services published in February 2023.
PARAGON HOSPITALITY: Lucy Sikes Named Subchapter V Trustee
----------------------------------------------------------
The Acting U.S. Trustee for Region 5 appointed Lucy Sikes as
Subchapter V trustee for Paragon Hospitality PMS, Inc.
Ms. Sikes will be paid an hourly fee of $375 for her services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Ms. Sikes declared that she is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Lucy G. Sikes
P.O. Box 52545
Lafayette, LA 70505-2545
Telephone: 337-366-0214
Facsimile: 337-628-1319
Email: lucygsikes1@gmail.com
About Paragon Hospitality PMS
Paragon Hospitality PMS, Inc. sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. E.D. La. Case No. 24-11464) on
July 29, 2024, with $50,001 to $100,000 in both assets and
liabilities.
Judge Meredith S. Grabill presides over the case.
Andrew Christopher Bougard, Esq., at The Bougard Law Office, LLC
represents the Debtor as bankruptcy counsel.
PERFECTION AUTO REFINISH: Kicks Off Subchapter V Bankruptcy Process
-------------------------------------------------------------------
Perfection Auto Refinish LLC filed Chapter 11 protection in the
Western District of Tennessee. According to court documents, the
Debtor reports between $1 million and $10 million in debt owed to
50 and 99 creditors. The petition states that funds will be
available to unsecured creditors.
About Perfection Auto Refinish LLC
Perfection Auto Refinish LLC provides auto body repair services to
the greater Memphis, TN, area. Its services include auto body
repair, collision repair, ceramic coating, auto detailing, paint
corrections, ADAS and wheel alignment.
Perfection Auto Refinish LLC sought relief under Subchapter V of
Chapter 11 of the U.S. Bankruptcy Code (Bankr. W.D. Tenn. Case No.
24-23506) on July 22, 2024. In the petition filed by Jeffrey S.
McCraw, 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 Ruthie Hagan oversees the case.
The Debtor is represented by:
Michael P. Coury, Esq.
GLANKLER BROWN PLLC
6000 Poplar Ave
Suite 400
Memphis, TN 38119
Tel: 901-525-1322
Fax: 901-525-2389
Email: mcoury@glankler.com
PG&E CORP: Court Affirms Summary Judgment in Addington Lawsuit
--------------------------------------------------------------
Judge Haywood S. Gilliam, Jr. of the United States District Court
for the Northern District of California affirmed the ruling issued
by the United States Bankruptcy Court for the Northern District of
California granting summary judgment in PG&E Corporation's favor
and denying David P. Addington's motion for reconsideration in the
dispute between the parties relating to the ownership of electric
transmission towers.
The dispute between Mr. Addington and PG&E Corporation and Pacific
Gas and Electric Company involves two electric transmission towers
located in Mr. Addington's backyard in Piedmont, California. The
towers were built and previously maintained by PG&E's predecessor,
Great Western Power Company, pursuant to a 1908 utility easement.
The easement conveyed an interest in the relevant property to Great
Western for the purpose of erecting and maintaining the towers and
necessary wires "for the transmission and distribution of
electricity." It also required Great Western to "avoid as far as it
reasonably can interfering with the use by the [property owner] of
said strip of land for any and all purposes." The easement further
stated that "[a]ny violation of the conditions of this grant shall
terminate and extinguish the easement hereby granted."
In 2016, PG&E determined that maintenance work was necessary for
health and safety reasons, including removing soil around the base
of the towers and recoating the towers. PG&E sent Mr. Addington a
letter explaining the scope of the work and the anticipated
timeline. The parties entered into a written agreement in September
2016 in which Mr. Addington agreed to this work. But Mr. Addington
argues that as a result of this work his yard was less usable
because it created "steep unlandscapable slopes." Eventually, PG&E
agreed to pay Mr. Addington $36,790 for landscaping. Further
disagreements arose, and in November 2016 PG&E agreed to pay an
additional $13,000, for a total of $49,790 related to PG&E's work
in Mr. Addington's yard. The parties' agreement stated that Mr.
Addington's "acceptance of this revised total consideration amount
will constitute a full and final release of PG&E from obligations
arising under that Agreement."
Mr. Addington initially filed a proof of claim seeking compensation
in excess of $3.5 million. The claim appears to seek compensation
for the electricity that PG&E transmitted via the towers in Mr.
Addington's backyard since June 1, 2017, when he asserts the
easement was terminated. PG&E objected to this claim, explaining
that Mr. Addington does not have the authority to unilaterally
terminate the easement. They further explained that even if the
2016 work somehow could have formed the basis for terminating the
easement, Mr. Addington executed a release and accepted
compensation for the work done on the property.
In May 2022, the bankruptcy court agreed and sustained PG&E's
objection to Mr. Addington's claim. The court concluded that "under
the terms of the recorded easement on Mr. Addington's real
property, his attempt to terminate the easement in 2017 was
ineffective." The court nevertheless granted Mr. Addington an
opportunity to amend his proof of claim "to state a claim for
damages stemming from damage that occurred after the date of
payment following Mr. Addington's signed release of claims arising
from [PG&E's] revised work agreement. . . ."
Mr. Addington accordingly amended his claim, this time seeking
approximately $1 million for property damage and emotional
distress. Mr. Addington contended that PG&E's actions "have
resulted in a substantial portion of the yard being unusable and
unfixable." Their work on the towers "created steep grades" such
that "traditional landscaping will not survive."
PG&E again objected, explaining that the asserted damages all
occurred prior to Mr. Addington signing the release of claims. In
response, Mr. Addington sought to amend his proof of claim for a
second time. The motion to amend sought quiet title with respect to
the towers; declaratory relief; damages related to the release Mr.
Addington signed with PG&E; emotional distress damages; and further
discovery from PG&E. Although the bankruptcy court allowed the
motion to amend to proceed in the bankruptcy action as a
"supplement" to his proof of claim, Mr. Addington also filed a
separate adversary proceeding in February 2023 seeking largely the
same relief.
In both the motion to amend and the adversary proceeding, Mr.
Addington alleged that the towers now belonged to him, and he could
do what he wanted with them. He also sought guidance as to whether
PG&E had the right to prevent Mr. Addington from updating the
landscaping in his yard.
PG&E moved for summary judgment as to Mr. Addington's claim. As
before, PG&E argued that the easement, which grants PG&E the right
to erect and maintain the towers for electrical transmission,
remains in place. It further suggested that Mr. Addington's claim
attempted to make an end run around the easement and the release
that he previously signed and for which he was compensated. On July
24, 2023, the bankruptcy court granted PG&E's motion for summary
judgment. The court held that Mr. Addington (1) did not own the
towers; (2) did not present any actual controversy that warranted a
determination of his rights under the easement; (3) could not
recover damages for causes of action related to PG&E's 2016 work
around the towers that he had already released; and (4) could not
seek emotional distress damages based on the state of his
property.
Mr. Addington filed a motion for reconsideration. The bankruptcy
court denied Mr. Addington's motion the following day. The court
reasoned that Mr. Addington did not meet the standard required for
reconsideration: despite his suggestion otherwise, Mr. Addington
did not demonstrate clear error or manifest injustice, and instead
just rehashed arguments that the court already rejected. Mr.
Addington then appealed the bankruptcy court's orders.
Mr. Addington raises specific "issues of fact" and "issues of law"
that he believes the bankruptcy court wrongly decided in granting
summary judgment in favor of PG&E. In short, Mr. Addington
disagrees with the bankruptcy court's analysis and is seeking court
assistance in his dispute with PG&E. Having reviewed the record in
detail, however, the District Court says it cannot conclude that
there are genuine issues of material fact precluding summary
judgment in PG&E's favor or that the bankruptcy court's denial of
Mr. Addington's motion for reconsideration resulted from "clear
error."
First, Mr. Addington argues that the bankruptcy court erred in
determining that he did not own the electric transmission towers in
his backyard. As the bankruptcy court explained, Mr. Addington
misapprehends the nature of the easement at issue in this case.
The easement conveyed an interest in Mr. Addington's property to
PG&E explicitly for the purpose of erecting and maintaining the
towers and necessary wires "for the transmission and distribution
of electricity." PG&E's ability to transmit and distribute
electricity would cease to exist if Mr. Addington owned the towers
the moment they were constructed, the District Court states.
Mr. Addington next suggests that the bankruptcy court erred in
rejecting his attempt to add new claims for damages for emotional
distress based on trespass on his land. But the bankruptcy court
explained that despite having ample opportunity to plead facts
supporting his claim for emotional distress, Mr. Addington failed
to do so. Even if the District Court were to consider Mr.
Addington's additional allegations now, his request for damages
appears based on the mistaken belief that he has control over the
towers under the terms of the easement. He has provided no reasoned
basis for the assumption that he can unilaterally alter PG&E's
property. In contrast, the easement explicitly allows PG&E to
maintain its towers, the District Court holds.
A copy of the Court's decision dated July 26, 2024, is available at
https://urlcurt.com/u?l=wDqllO
About PG&E Corporation
PG&E Corporation (NYSE: PCG) -- http://www.pgecorp.com/-- is a
Fortune 200 energy-based holding company, headquartered in San
Francisco. It is the parent company of Pacific Gas and Electric
Company, an energy company that serves 16 million Californians
across a 70,000-square-mile service area in Northern and Central
California.
PG&E Corporation and its regulated utility subsidiary, Pacific Gas
and Electric Company, faced extraordinary challenges relating to a
series of catastrophic wildfires that occurred in Northern
California in 2017 and 2018. The utility faced an estimated $30
billion in potential liability damages from California's deadliest
wildfires of 2017 and 2018.
On Jan. 29, 2019, PG&E Corp. and its primary operating subsidiary,
Pacific Gas and Electric Company, filed voluntary Chapter 11
petitions (Bankr. N.D. Cal. Lead Case No. 19-30088). As of Sept.
30, 2018, the Debtors, on a consolidated basis, had reported $71.4
billion in assets on a book value basis and $51.7 billion in
liabilities on a book value basis.
Weil, Gotshal & Manges LLP and Cravath, Swaine & Moore LLP served
as PG&E's legal counsel, Lazard as its investment banker and
AlixPartners, LLP as the restructuring advisor to PG&E. Prime Clerk
LLC is the claims and noticing agent.
PG&E has appointed James A. Mesterharm, a managing director at
AlixPartners, LLP, and an authorized representative of AP Services,
LLC, to serve as Chief Restructuring Officer. In addition, PG&E
appointed John Boken also a Managing Director at AlixPartners and
an authorized representative of APS, to serve as Deputy Chief
Restructuring Officer.
Morrison & Foerster LLP served as the Debtors' special regulatory
counsel. Munger Tolles & Olson LLP also served as special
counsel.
The Office of the U.S. Trustee appointed an official committee of
creditors on Feb. 12, 2019. The Committee retained Milbank LLP as
counsel; FTI Consulting, Inc., as financial advisor; Centerview
Partners LLC as investment banker; and Epiq Corporate
Restructuring, LLC as claims and noticing agent.
On Feb. 15, 2019, the U.S. trustee appointed an official committee
of tort claimants. The tort claimants' committee is represented by
Baker & Hostetler LLP.
* * *
PG&E Corporation and Pacific Gas and Electric Co. announced July 1,
2020, that PG&E has emerged from Chapter 11, successfully
completing its restructuring process and implementing PG&E's Plan
of Reorganization that was confirmed by the United States
Bankruptcy Court on June 20, 2020.
For the benefit of fire victims, the Plan provided for a Fire
Victim Trust, which was funded with an oft-stated value of $13.5
billion, to be half in cash and half in new company PG&E common
stock. The $6.75 billion in cash was paid. With respect to the
stock consideration, 478 million shares of PG&E stock were
delivered to the Fire Victim Trust in accordance with an agreed-to
formula under the Plan.
POWER BLOCK COIN: Appointment of Creditors' Committee Sought
------------------------------------------------------------
A group of creditors of Power Block Coin, LLC asked the U.S.
Bankruptcy Court for the District of Utah to direct the appointment
of an official committee that will represent unsecured creditors in
the company's Chapter 11 case.
The creditors, which include Blockchain Recovery Investment
Consortium, LLC, Mohsin Y. Meghji and Zhouyang Song said the
company's management of funds raises questions warranting
investigation.
"Many concerning facts regarding [Power Block Coin's] questionable
use and misuse of estate resources necessitate oversight and
investigation by a committee," the creditors said in court papers.
The creditors cited the company's schedules of assets and
liabilities in which the company claims to have only $11,025.52
worth of Bitcoin as of the petition date (i.e., less than one
Bitcoin) although it received approximately 434 Bitcoin from Mr.
Song as collateral for a loan in early 2023.
"This is startling considering that the trading value of Bitcoin on
the petition date was $65,100, and Mr. Song individually provided
more than 400 Bitcoin to the company a little over a year ago," the
creditors said.
The creditors also cited the withdrawal by Power Block Coin of
assets from the so-called "Celsius debtors" in 2022 that are now
worth more than $133 million. However, nearly all those funds
appear to have been dissipated as the company lists assets totaling
only $26.35 million on its schedules, according to the creditors.
Zhouyang Song is represented by:
Annette W. Jarvis, Esq.
Carson Heninger, Esq.
Abigail J. Stone, Esq.
Greenberg Traurig, LLP
222 South Main Street, Suite 1730
Salt Lake City, UT 84101
Telephone: (801) 478-6900
jarvisa@gtlaw.com
carson.heninger@gtlaw.com
abigail.stone@gtlaw.com
-- and --
Nicholas O. Kennedy, Esq.
Baker McKenzie
1900 N. Pearl Street, Suite 1500
Dallas, TX 75201
Telephone: +1 214 978 3000
Facsimile: +1 214 978 3099
nicholas.kennedy@bakermckenzie.com
-- and --
Mark D. Bloom, Esq.
Baker McKenzie
1111 Brickell Ave., Suite 1000
Miami, FL 33131
Telephone: 305-789-8927
Facsimile: 305-789-8953
mark.bloom@bakermckenzie.com
Blockchain and Mohsin Meghji are represented by:
Annette W. Jarvis, Esq.
Carson Heninger, Esq.
Abigail J. Stone, Esq.
Greenberg Traurig, LLP
222 South Main Street, Suite 1730
Salt Lake City, UT 84101
Telephone: (801) 478-6900
jarvisa@gtlaw.com
carson.heninger@gtlaw.com
abigail.stone@gtlaw.com
–- and –-
Samuel P. Hershey, Esq.
White & Case, LLP
1221 Avenue of the Americas
New York, NY 10020
Telephone: (212) 819-8200
Facsimile: (212) 354-8113
sam.hershey@whitecase.com
–- and –-
Gregory F. Pesce, Esq.
Laura Baccash, Esq.
White & Case, LLP
111 South Wacker Drive, Suite 5100
Chicago, IL 60606
Telephone: (312) 881-5400
Facsimile: (312) 881-5450
gregory.pesce@whitecase.com
laura.baccash@whitecase.com
About Power Block Coin
SmartFi is a unique monetary system. It combines monetary policy
with the freedoms of cryptocurrency to create a self-sustaining
open-lending platform, providing the holders of SmartFi Token the
opportunity to manage the system and become the beneficiaries of
the wealth creation that would otherwise accrue to traditional
banks.
Power Block Coin, LLC, a company in Orem, Utah, filed its voluntary
petition for Chapter 11 protection (Bankr. D. Utah Case No.
24-23041) on June 20, 2024, listing $10 million to $50 million in
assets and $1 million to $10 million in liabilities. Aaron Tilton,
officer, signed the petition.
Judge Joel T Marker oversees the case.
The Debtor tapped Parsons Behle & Latimer as legal counsel and CFO
Solutions L.L.C., a Utah limited liability company, as accountant
and financial advisor.
PREMIER CAR: Seeks to Hire Cooper Law Firm as Bankruptcy Counsel
----------------------------------------------------------------
Premier Car Wash Seneca, LLC seeks approval from the U.S.
Bankruptcy Court for the District of South Carolina to hire The
Cooper Law Firm as its counsel.
The firm's services include:
a. providing legal advice with respect to the Debtor's power
and duties in the continued management and control of its assets,
and its responsibilities to its creditors;
b. providing legal advice regarding its responsibility to
provide insurance and bank account information, file monthly
operating reports, and file a plan of reorganization and disclosure
statement; and
c. preparing legal documents relative to the Debtor's Chapter
11 case.
The hourly rates charged by the firm's attorneys are as follows:
Robert H. Cooper, Esq. $395 per hour
Associate Lawyers $295 per hour
The retainer fee is $8,750, plus $1,738 filing fee.
Mr. Cooper disclosed in a court filing that he and his firm are
"disinterested persons" pursuant to Section 101(14) of the
Bankruptcy Code.
The firm can be reached at:
Robert H. Cooper, Esq.
The Cooper Law Firm
150 Milestone Way, Ste B
Greenville, SC 29615
Tel: (864) 271-9911
Fax: (864) 232-5236
Email: rhcooper@thecooperlawfirm.com
About Premier Car Wash Seneca
Premier Car Wash Seneca, LLC owns and operates a car wash business
in Seneca, S.C.
The Debtor filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. D.S.C. Case No. 24-02225) on June 20, 2024,
with up to $50,000 in assets and up to $10 million in liabilities.
Joseph Kershaw Spong serves as Subchapter V trustee.
Judge Helen E. Burris presides over the case.
Robert H. Cooper, Esq., at The Cooper Law Firm represents the
Debtor as bankruptcy counsel.
R&N EASLEY: Seeks to Hire Cooper Law Firm as Bankruptcy Counsel
---------------------------------------------------------------
R&N Easley, LLC seeks approval from the U.S. Bankruptcy Court for
the District of South Carolina to employ The Cooper Law Firm as its
counsel.
The firm's services include:
a. providing legal advice with respect to the Debtor's power
and duties in the continued management and control of its assets,
and its responsibilities to its creditors;
b. providing legal advice regarding its responsibility to
provide insurance and bank account information, file monthly
operating reports, and file a plan of reorganization and disclosure
statement; and
c. preparing legal documents relative to the Debtor's Chapter
11 case.
The hourly rates charged by the firm's attorneys are as follows:
Robert H. Cooper, Esq. $395 per hour
Associate Lawyers $295 per hour
The retainer fee is $8,750, plus $1,738 filing fee.
Mr. Cooper disclosed in a court filing that he and his firm are
"disinterested persons" pursuant to Section 101(14) of the
Bankruptcy Code.
The firm can be reached at:
Robert H. Cooper, Esq.
The Cooper Law Firm
150 Milestone Way, Ste B
Greenville, SC 29615
Tel: (864) 271-9911
Fax: (864) 232-5236
Email: rhcooper@thecooperlawfirm.com
About R&N Easley
R&N Easley, LLC, a company in Easley, S.C., filed a petition under
Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. D.S.C. Case
No. 24-02223) on June 20, 2024, with up to $50,000 in assets and up
to $10 million in liabilities. Ronald B. Jennings Jr., managing
member, signed the petition.
Judge Helen E. Burris presides over the case.
Robert H. Cooper, Esq., at The Cooper Law Firm represents the
Debtor as bankruptcy counsel.
R1 RCM: S&P Places 'B+' on Watch Negative on Acquisition Agreement
------------------------------------------------------------------
S&P Global Ratings placed its 'B+' issuer credit rating as well as
the issue-level ratings on R1 RCM Inc. on CreditWatch with negative
implications.
The CreditWatch placement reflects S&P's view that the announced
transaction will likely result in a weaker, more highly levered
credit profile due to the additional debt incurred to fund the
buyout.
R1 RCM Inc., a provider of technology-enabled revenue cycle
management (RCM) services to health care providers, announced a
definitive agreement to be acquired by investment funds affiliated
with TowerBrook Capital Partners L.P. and Clayton, Dubilier & Rice
LLC in an all-cash transaction with an enterprise value of
approximately $8.9 billion.
S&P said, "The negative CreditWatch placement reflects our view
that R1 RCM's leverage will likely exceed 5x with the incremental
debt financing to fund the take private transaction. On Aug. 1,
2024, R1 RCM announced that it entered into a definitive agreement
to be acquired by investment funds affiliated with TowerBrook
Capital Partners and Clayton, Dubilier & Rice for $14.30 per share.
TCP-ASC, an investment vehicle controlled by TowerBrook is
currently the beneficial owner of approximately 36% of the
Company's outstanding shares of common stock. In connection with
the transaction, the company has obtained debt and equity financing
commitments to acquire all the outstanding common stock that
TowerBrook does not currently own for $14.30 per share. The
transaction is expected to close by the end of 2024, subject to
regulatory, shareholder, and other approvals.
"Based on our general view that sponsor-owned companies tend to
make decisions that prioritize the interests of controlling owners
as well as TowerBrook's history as the financial sponsor at the
time of the acquisitions of Acclara in 2024 and Cloudmed in 2022,
we expect the sponsors to maintain an aggressive, acquisitive
financial policy that could keep leverage above 5x.
"R1 has a long-term strategic partnership with Ascension Health
Alliance, the nation's largest not-for-profit health system and the
company's largest customer (accounting for about 40% of 2023
revenue--which has significantly decreased over the past several
years, from 50% in 2021 and 60% in 2020). Although we view customer
concentration as a risk, this has been partly mitigated by a
10-year contract and the customer's significant (about 15%)
minority equity ownership in R1 through TCP-ASC. Should Ascension's
ownership stake weaken, we could see increased risk relating to
R1's most important customer relationship.
"We expect to address the CreditWatch placement once the
transaction closes, which is expected by the end of 2024. We will
reassess R1 RCM business position, pro forma capital structure, and
long-term financial policy as more information becomes available.
With the incurrence of new debt, we would likely lower the issuer
credit rating on R1 RCM, with the possibility of a multi-notch
downgrade depending on the amount of additional debt incurred."
R1 RCM: TowerBrook & Clayton Deal No Impact on Moody's 'Ba3' CFR
----------------------------------------------------------------
Moody's Ratings said that R1 RCM, Inc.'s announcement that it
signed a definitive merger agreement to be acquired by affiliates
of TowerBrook Capital Partners ("TowerBrook") and Clayton Dubilier
& Rice ("CD&R") has no immediate impact to R1 RCM's negative
outlook and ratings, including the Ba3 corporate family rating and
Ba3 senior secured 1st lien bank credit facilities ratings. R1 RCM,
a Utah-based provider of technology-driven healthcare revenue cycle
management (RCM) services, and the acquiring parties have not
disclosed material considerations such as sources of financing, the
company's post-merger capitalization and organizational structure.
Under the terms of the agreement, R1 RCM shareholders will receive
$14.30 in cash per share of R1 RCM common stock in a transaction
valued at approximately $8.9 billion, including the assumption of
$2.28 billion of R1 RCM's debt obligations as of March 31, 2024.
The transaction would result in R1 RCM transitioning from a public
company to a private company. The closing of the deal is subject to
customary conditions, including regulatory clearance and R1 RCM
shareholder approvals. Affiliates of TowerBrook currently own
approximately 36% of R1 RCM's common stock including warrants. The
transaction is expected to close by the end of 2024.
Utah-based R1 RCM (NASDAQ: RCM) provides technology-enhanced
revenue cycle management and physician advisory services to
healthcare providers including acute-care hospitals and hospital-
and office-based physicians and emergency medical facilities.
Affiliates of private equity firm New Mountain Capital, and
TowerBrook Capital Partners, and Ascension Health Alliance hold
about 60% of the company's common equity excluding warrants.
RAZEL & RUZTIN: U.S. Trustee Appoints Blanca Castro as PCO
----------------------------------------------------------
Tracy Hope Davis, the U.S. Trustee for Region 17, appointed Blanca
Castro as patient care ombudsman for Razel & Ruztin, LLC.
The appointment was made pursuant to the order from the U.S.
Bankruptcy Court for the Northern District of California.
Section 333 of the Bankruptcy Code provides that Blanca Castro, as
the patient care ombudsman, shall:
* Monitor the quality of patient care provided to patients of
Razel & Ruztin, to the extent necessary under the circumstances,
including, to the extent necessary, interviewing patients,
physicians, and other appropriate interested parties;
* In the event that the patient care ombudsman determines that
the quality of patient care provided is declining significantly or
is otherwise being materially compromised, file with the court a
motion or written report with notice to the parties in interest
immediately upon making such determination; and
* As required by Section 333(b)(2), not later than 60 days
after the date of appointment, and not less frequently than at
60-day intervals thereafter, report to the court after notice to
the parties in interest, at a hearing or in writing, regarding the
quality of patient care provided.
The ombudsman may be reached at:
Blanca Castro
2880 Gateway Oaks Dr., Ste. 200
Sacramento, CA 95833
Telephone: (916) 928-2500
Email: blanca.castro@aging.ca.gov
About Razel & Ruztin
Razel & Ruztin, LLC, doing business as Walnut Creek Willows, sought
protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr.
N.D. Calif. Case No. 24-41003) on July 9, 2024, with up to $50,000
in assets and up to $1 million in liabilities.
Judge Charles Novack presides over the case.
Arasto Farsad, Esq., at Farsad Law Office, P.C. represents the
Debtor as bankruptcy counsel.
RITE AID: Close 694 Stores Since Chapter 11 Filing
--------------------------------------------------
Seth Kaplan of abc27.com reports that Rite Aid recently closed
another 40 stores — 27 in Michigan and 13 in Ohio -- bringing the
total number of stores it has closed since filing for bankruptcy in
October 2023 to 694.
That total, based on an abc27 News analysis of court filings and
ScrapeHero data, is just six stores shy of the "worst-case
scenario" of 700 stores forecast by one analyst shortly before the
bankruptcy filing — a forecast which, in turn, was higher than
those of other analysts, some of whom said the chain could close as
few as 200 to 300 stores.
The 694 closed stores represent 34% of the 2,063 stores Rite Aid
operated when it filed for Chapter 11 bankruptcy protection.
The newly-announced closures — exclusively in Michigan and Ohio,
as has been the case with round after round of stores closures for
about two months — mean Rite Aid will have soon closed 75% of its
Michigan stores and 74% of its Ohio stores.
Before the chain filed for bankruptcy, Michigan and Ohio were,
respectively, Rite Aid's fourth and fifth biggest state markets.
Now Rite Aid's five biggest markets, by stores in each state, are
Pennsylvania (351 stores), California (351 stores), New York (182
stores), Washington state (99 stores) and New Jersey (61 stores).
Rite Aid is headquartered in Philadelphia, where it moved in 2021
from Camp Hill.
In its three biggest markets, Rite Aid has closed 20% of its
Pennsylvania stores, 22% of its California stores and 24% of its
New York stores.
The company hasn't responded to questions about whether it is
withdrawing entirely from Michigan and Ohio.
After the recently-announced closures, Rite Aid will operates 58
stores in Michigan and 48 stores in Ohio, based on the abc27
analysis of court filings and ScrapeHero data. If it were to
continue closing all stores in those two states and no stores in
other states, as has been its recent practice, that would bring its
total number of bankruptcy-era store closures to 800, or 39% of the
2,063 stores it operated when it filed for bankruptcy.
About Rite Aid
Rite Aid -- http://www.riteaid.com-- is a full-service pharmacy
that improves health outcomes. Rite Aid is defining the modern
pharmacy by meeting customer needs with a wide range of vehicles
that offer convenience, including retail and delivery pharmacy, as
well as services offered through our wholly owned subsidiaries,
Elixir, Bartell Drugs and Health Dialog. Elixir, Rite Aid's
pharmacy benefits and services company, consists of accredited
mail and specialty pharmacies, prescription discount programs and
an industry leading adjudication platform to offer superior member
experience and cost savings. Health Dialog provides healthcare
coaching and disease management services via live online and phone
health services. Regional chain Bartell Drugs has supported the
health and wellness needs in the Seattle area for more than 130
years. Rite Aid employs more than 6,100 pharmacists and operates
more than 2,100 retail pharmacy locations across 17 states.
The Debtors sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D.N.J. Lead Case No. 23-18993) on Oct. 15,
2023. In the petition signed by Jeffrey S. Stein, chief executive
officer and chief restructuring officer, Rite Aid disclosed
$7,650,418,000 in total assets and $8,597,866,000 in total
liabilities.
Judge Michael B. Kaplan oversees the cases.
The Debtors tapped Kirkland & Ellis LLP and Kirkland & Ellis
International LLP as general bankruptcy counsel, Cole Schotz, P.C.,
as local bankruptcy counsel, Guggenheim Partners as investment
banker, Alvarez & Marsal North America, LLC as financial, tax and
restructuring advisor, and Kroll Restructuring Administration as
claims and noticing agent.
SERINDEEP INTERNATIONAL: Seeks Chapter 11 Bankruptcy Protection
---------------------------------------------------------------
Serindeep International Inc. filed Chapter 11 protection in the
Southern District of Florida. 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 26, 2024 at 12:00 p.m. in Room Telephonically.
About Serindeep International
Serindeep International Inc. sought relief under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. S.D. Fla. Case No. 24-1724) on July
19, 2024. In the petition filed by Sivakumar Sinnarajah, as
president, the Debtor reports estimated assets and liabilities
between $1 million and $10 million each.
The Honorable Bankruptcy Judge Robert A. Mark oversees the case.
The Debtor is represented by:
James B. Miller, Esq.
JAMES B. MILLER, P.A.
19 West Flagler St. #416
Miami, FL 33130
Tel: 305-374-0200
Email: bkcmiami@gmail.com
SEXTO LLC: Hits Chapter 11 Bankruptcy Protection in Texas
---------------------------------------------------------
Sexto LLC filed Chapter 11 protection in the Northern District of
Texas. 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 Sexto LLC
Sexto LLC owns a restaurant business.
Sexto LLC sought relief under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. N.D. Tex. Case No. 24-42493) 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
SILVER CREEK: Voluntary Chapter 11 Case Summary
-----------------------------------------------
Debtor: Silver Creek Investments, LLC
d/b/a Glendale Shopping Center;
d/b/a Glendale Shopping Mall
4478 S Marsalis Ave
Dallas TX 75216
Business Description: The Debtor is primarily engaged in renting
and leasing real estate properties.
Chapter 11 Petition Date: August 5, 2024
Court: United States Bankruptcy Court
Northern District of Texas
Case No.: 24-32328
Judge: Hon. Michelle V Larson
Debtor's Counsel: Joyce Lindauer, Esq.
JOYCE W. LINDAUER ATTORNEY, PLLC
1412 Main Street, Suite 500
Dallas, TX 75202
Tel: (972) 503-4033
Email: joyce@joycelindauer.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Alfred Herron as owner.
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/MHFN7XY/Silver_Creek_Investments_LLC__txnbke-24-32328__0001.0.pdf?mcid=tGE4TAMA
STEWARD HEALTH CARE: Massachusetts' $30M Boost Faces Objection
--------------------------------------------------------------
Thomas Gleason of Bloomberg Law reports that a proposal for
Massachusetts to pay $30 million to Steward Health Care System
LLC's hospitals in the state puts the bankrupt company's hospital
system at risk of a liquidity crisis, according to creditors
opposing the deal.
The agreement gives the state too much power to recoup payments,
including from Steward entities that don't receive any funds, the
official committee of unsecured creditors said in the objection
filed Monday, July 29, 2024, in the US Bankruptcy Court for the
Southern District of Texas. It also grants Massachusetts the
"extraordinary right" to take action against Steward without the
court's oversight, the creditors said.
If the state chose to recoup the money, Steward would face a
liquidity crisis and would likely be unable to make critical
operational payments, according to the creditors' objection.
The state should be required to file a motion notifying all
relevant parties before seeking recoupment or repayment, the
creditors said. The agreement should be approved once that
provision is added, they said.
Steward asked the court to approve the agreement last week. The
state plans to provide funding for Steward's eight Massachusetts
hospitals as they transition to new ownership or move toward
closing. The funding will be released in two tranches if Steward
meets certain milestones in the sale of five of its Massachusetts
hospitals that can remain operational.
Steward's court-approved financing budget doesn't allow for
payments to operate the Massachusetts hospitals after July 2024.
"The lack of viable alternatives does not mean the Commonwealth is
entitled to onerous terms and conditions that will jeopardize the
debtor's ability to continue to serve patients and conduct orderly
sale processes," the committee said in the objection.
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: Gets $30-Mil. from Massachusetts to Keep Hospitals Open
----------------------------------------------------------------
Thomas Gleason of Bloomberg Law reports that bankrupt Steward
Health Care System LLC reached an agreement with Massachusetts to
receive $30 million through state-sponsored programs to keep its
hospitals running as they transition to new ownership.
The state agreed to provide the funding to all eight Steward-owned
hospitals in Massachusetts, which participate in the state's
Medicaid program, or MassHealth, the company said in a July 26
filing in the US Bankruptcy Court for the Southern District of
Texas. The hospitals can use the funds only for working capital,
patient care, and employee salaries in the state, the filing
notes.
The payments will be released in two tranches, according to the
filing. The first tranche is conditioned on the execution of sale
agreements to acquire Steward's five Massachusetts "going concern
hospitals"—those financially stable enough to continue
operating—and the land beneath them. The second tranche is
conditioned on the bankruptcy court's approval of the sale of those
hospitals.
Steward, the nation's largest for-profit hospital system, received
bids on six of its eight Massachusetts hospitals, the company said.
The state's payments will "support the sale and orderly transition"
of the hospitals to new operators and help mitigate Steward’s
operating losses, according to the filing.
Steward lost about $63 million operating the "going concern
hospitals" in the first five months of the year and has
"insufficient liquidity to continue funding the losses,” the
company said in the filing. Also, Steward’s previously
court-approved financing budget does not allow for the hospital
system to fund the hospitals after July 31, Steward noted.
The hospital system seeks court approval to close Carney Hospital
and Nashoba Valley Medical Center, which received "little interest
from bidders," Steward said in the filing. Those hospitals will
receive a total of nearly $4.9 million and $270,000, respectively,
but the money cannot be used for closure costs, according to the
filing.
Steward also asked the court for permission to reject its leasing
agreements for the land beneath the Massachusetts hospitals. None
of the bids Steward received on the hospitals provide for the
bidder to assume the lease because the bids constitute a purchase
price for the hospital and land that is "significantly less" than
the value of the land implied by the rent cost, Steward said in a
July 26 filing.
The hospital system is currently engaged in mediation with the
joint venture that issued the lease and other parties to decide how
money from hospital sales should be allocated.
Lawmakers have repeatedly criticized Steward's bankruptcy. Sen.
Elizabeth Warren (D-Mass.) said Steward's plan to close two of its
Massachusetts hospitals was a "direct consequence of looting by
Steward executives, private equity investors, and corporate
landlords." The Senate Committee on Health, Education, Labor, and
Pensions, chaired by Sen. Bernie Sanders (I-Vt.), voted 20-1 last
week to investigate Steward's bankruptcy and 16-4 to issue a
subpoena to its chairman and CEO, Ralph de la Torre.
The case is In re: Steward Health Care System LLC et al., Bankr.
S.D. Tex., Docket No. 24-90213, 7/26/24.
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.
STRAWBERRY HILL POVITICA: Starts Subchapter V Bankruptcy Proceeding
-------------------------------------------------------------------
Strawberry Hill Povitica Inc. filed Chapter 11 protection in the
District of Kansas. According to court filing, the Debtor reports
$2,847,467 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. at Conf Call by US Trustee.
About Strawberry Hill Povitica Inc.
Strawberry Hill Povitica Inc. is engaged in the retail sale of
bakery products.
Strawberry Hill Povitica Inc. sought relief under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. D. Kan. Case No. 24-20923) on July 22,
2024. In the petition filed by Dennis K. O'Leary, as president, the
Debtor reports total assets of $519,520 and total liabilities of
$2,847,467.
The Honorable Bankruptcy Judge Dale L. Somers handles the case.
The Debtor is represented by:
Colin Gotham, Esq.
EVANS & MULLINIX, P.A.
7225 Renner Road, Suite 200
Shawnee, KS 66217
Tel: (913) 962-8700
Fax: (913) 962-8701
Email: cgotham@emlawkc.com
SUNNY ENERGY: James Cross Named Subchapter V Trustee
----------------------------------------------------
The U.S. Trustee for Region 14 appointed James Cross, Esq., at
Cross Law Firm, PLC as Subchapter V trustee for Sunny Energy, LLC.
Mr. Cross will be paid an hourly fee of $575 for his services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. Cross declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
James E. Cross, Esq.
Cross Law Firm, PLC
P.O. Box 45469
Phoenix, AZ 85064
Phone: 602-412-4422
Email: jcross@crosslawaz.com
About Sunny Energy
Sunny Energy, LLC is a solar energy equipment supplier in Tempe,
Ariz.
The Debtor filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. D. Ariz. Case No. 24-06111) on July 26,
2024, with $1,838,684 in total assets as of April 30, 2024, and
$2,115,170 in total liabilities as of April 30, 2024. Joseph J.
Cunningham, manager, signed the petition.
Judge Brenda K. Martin presides over the case.
Bradley D. Pack, Esq., at Engelman Berger, PC represents the Debtor
as legal counsel.
TABOR MANOR: No Decline in Patient Care, PCO Report Says
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Jeanne Goche, the court-appointed patient care ombudsman, filed
with the U.S. Bankruptcy Court for the Southern District of Iowa
her initial report concerning the quality of resident care provided
at Tabor Manor Care Center, Inc.'s nursing facility.
Tabor Manor has had 46 licensed beds since the beginning of this
bankruptcy process, having recently reduced the number of beds
related to finances. The census during this initial monitoring
period was less than capacity, running at approximately 38 to 42
occupied beds or roughly 86% occupancy.
The PCO performed an on-site visit on June 14 and interviewed
facility health care workers and residents, as well as the DON and
Administrators of the facility, Mitchell and Chris Worcester. While
the facility is well-worn, upon entrance, Tabor Manor was pleasant,
clean and odor free. Space, furniture and equipment for residents
was adequate, safe and well-maintained. One wing of the facility
was being renovated as a new dining area.
The PCO observed that residents at Tabor Manor reported being happy
to be there, obviously enjoying the food, engaging in activities as
they wished, and getting along with each other. No residents were
observed to be agitated or in danger. Staff interactions with
residents were pleasant and appropriate. Residents reported feeling
safe and there were no reports of violence by residents or staff.
Since the site visit, the PCO conducted phone interviews with the
Iowa Assistant Attorney General involved with the Tabor Manor
bankruptcy, as well as the office of the facility's Medical
Director and the DIAL Long-Term Care Manager. There have been no
falls at Tabor Manor that resulted in injury. The progress in
replacing temporary staff on the evening shift with permanent staff
was confirmed and management is proceeding with plans to fill the
night shift entirely with permanent staff.
The PCO noted that the quality of patient care and safety is
satisfactory and the facility leadership is working in constructive
directions, particularly with its recruitment of an effective DON,
hiring of permanent staff, completion of the dining area
renovation, and commitment to a positive resident and staff culture
while Tabor Manor has experienced difficulties operating during and
after the Covid-19 pandemic.
The PCO cited that Tabor Manor seems to be coming back and
improving from a difficult time for health care providers rather
than any material decline or substantial compromise of the quality
of resident care or safety.
A copy of the ombudsman report is available for free at
https://urlcurt.com/u?l=HWfsAY from PacerMonitor.com.
The ombudsman may be reached at:
Jeanne M. Goche, MA, JD
Solutions in Health Care Management
PO Box 743
West Branch, IA 52358
Ph: 319-330-0008
Email: jgoche@solutionsinhealthcaremanagement.com
About Tabor Manor Care Center
Tabor Manor Care Center, Inc. provides skilled nursing and
complementary and ancillary health care services in Fremont County,
Iowa counties. Tabor has approximately 46 beds in its Skilled
Nursing Facility.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Iowa Case No. 24-00636-lmj11) on May
8, 2024. In the petition signed by Chris Worcester, assistant
administrator, the Debtor disclosed up to $10 million in both
assets and liabilities.
Jeffrey D. Goetz, Esq., at Dickinson, Bradshaw, Fowler & Hagen, PC,
represents the Debtor as legal counsel.
TELEFLEX INC: Moody's Ups CFR to Ba1 & Sr. Unsecured Notes to Ba2
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Moody's Ratings upgraded the ratings of Teleflex Incorporated
including the Corporate Family Rating to Ba1 from Ba2, Probability
of Default Rating to Ba1-PD from Ba2-PD and the rating on the
senior unsecured notes to Ba2 from Ba3. The outlook remains
stable.
The ratings upgrade reflects Teleflex's track record of operating
with low to moderate leverage, a disciplined approach to M&A, and
continued very good liquidity. Teleflex continues to generate very
strong free cash flow, underpinned by solid margins and continued
earnings growth. The upgrade also reflects Teleflex's growing
revenue scale, good product diversity, and stable growth for its
suite of medical device products used for diagnostic and
therapeutic procedures in critical care and surgical applications.
Moody's expect Teleflex to maintain strong credit metrics and
moderate financial policies even as it looks to make additional
acquisitions.
Governance risk considerations factor into the rating action.
Teleflex's G-2 score (previously G-3) reflects the company's
financial policies of keeping leverage at a moderate level with an
established track record of deleveraging after M&A transactions.
RATINGS RATIONALE
Teleflex's Ba1 Corporate Family Rating benefits from the company's
good scale, leading market positions in key products and good
revenue diversity by products and customers. The company offers a
broad range of medical technologies in vascular access,
interventional access, and urology. Further, the company generates
robust free cash flow, has strong interest coverage and has
moderate financial leverage. The company's debt/EBITDA on a Moody's
adjusted basis was approximately 2.2x for the twelve months ended
March 31, 2024.
Teleflex's rating is constrained by industrywide pricing pressures
as well as payors' increased focus on value-based healthcare. The
risk of technology obsolescence and competition from much larger
medical products companies are also constraining factors. Further,
Moody's expect that Teleflex will remain acquisitive and will use
debt to fund acquisitions.
Moody's expect the company's liquidity to be very good over the
next 12-18 months. The company had $237 million of cash as of March
31, 2024 and a $1 billion revolver with $208 million drawn.
Moody's expect strong free cash flow generation for the forecast
period.
The stable outlook reflects Moody's view that Teleflex will remain
acquisitive but will maintain moderate financial leverage and very
good liquidity.
Teleflex's CIS-3 score indicates that ESG considerations have a
limited impact on the current credit rating with potential for
greater negative impact over time. Teleflex has exposure to social
risks (S-3) associated with the responsible production of medical
devices which are inserted into the body, including exposure to
potential product recalls, regulatory actions or product liability
litigation. Governance risks (G-2, previously G-3) reflect the
company's financial policies of keeping leverage at a moderate
level with an established track record of deleveraging after M&A
transactions.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if Teleflex further expands its scale
and product sophistication. The ratings could also be upgraded if
the company sustains positive organic sales growth. In addition,
debt/EBTIDA sustained below 2x would support an upgrade.
The ratings could be downgraded if Teleflex has weak organic sales
growth or pursues a more aggressive financial policy including
keeping its leverage at elevated levels after acquisitions.
Quantitatively, debt/EBITDA sustained above 3 times could lead to a
downgrade.
Teleflex Incorporated, headquartered in Wayne, Pennsylvania, is a
provider of medical technologies in the fields of vascular and
interventional access, surgical, anesthesia, cardiac care,
interventional urology, emergency medicine and respiratory care.
The company is a manufacturer of medical devices including
single-use disposable devices and, to a lesser extent, reusable
devices, instruments and capital equipment. It has production
facilities located in the United States, Czech Republic, Germany,
Malaysia and Mexico. The company is publicly traded, and its annual
revenues for the last twelve months ending on March 31, 2024, were
approximately $3 billion.
The principal methodology used in these ratings was Medical
Products and Devices published in October 2023.
TERRASCEND CORP: Completes $140 Million Debt Financing
------------------------------------------------------
TerrAscend Corp. announced August 2 that the Company, together with
certain entities that are consolidated by the Company, have closed
on a senior secured term loan for gross proceeds of US$140 million
from funds managed by FocusGrowth Asset Management, LP, a leading
capital provider to the cannabis sector, along with other members
of a loan syndicate. The Loan includes an initial draw of US$114
million in gross proceeds by certain of the Company's Consolidated
Entities in Pennsylvania, Maryland and California, with a second
draw of US$26 million in gross proceeds expected in September 2024
by the Company's Consolidated Entities in Michigan. The Loan
carries an interest rate of 12.75%, matures in August 2028,
contains no prepayment penalties, and is guaranteed by the Company
and TerrAscend USA, Inc. No warrants were issued as part of the
Loan. The proceeds from the initial draw were used to retire the
Company's existing indebtedness in Pennsylvania with the remainder
available for potential M&A transactions focused on geographic
expansion. The proceeds from the second draw will be used to
retire the Company's existing indebtedness in Michigan.
"Completing this non-dilutive financing strengthens our balance
sheet and provides us the financial flexibility to continue to
execute on our growth strategy. With this financing closed, we
have no other material debt maturing until late 2027," said Jason
Wild, Executive Chairman of TerrAscend. "This transaction also
reflects our lender's confidence in our vision and strategy. The
FocusGrowth team has been a pleasure to work with and we look
forward to a long and successful partnership together."
"We have closely watched TerrAscend's progress and are excited to
partner with them to support their continued growth," said Peter
Bio, Partner of FocusGrowth. "TerrAscend has established itself as
a market leader in multiple states with ample greenfield
opportunities for growth in both new and existing markets. We have
enjoyed working with the team on this transaction and are already
working with management to evaluate additional opportunities."
According to the Company, the Transaction constitutes a "related
party transaction" within the meaning of Multilateral Instrument
61-101 Protection of Minority Security Holders in Special
Transactions because Jason Wild, an insider of the Company,
directly or indirectly invested approximately US$7.5 million of the
Loan as a member of the loan syndicate in connection with the
Transaction. The Company has relied on exemptions from the formal
valuation and minority shareholder approval requirements of MI
61–101 contained in sections 5.5(a) and 5.7(1)(a) of MI 61–101
in respect of the Insider Participation as the fair market value
(as determined in accordance with MI 61-101) of the Insider
Participation in the Transaction is below 25% of the Company's
market capitalization (as determined in accordance with MI
61-101).
Ventum Capital Markets acted as the exclusive financial advisor to
the Company for the Transaction.
About Terrascend
Headquartered in Ontario, Canada, Terracend Corp. --
www.terrascend.com -- is a TSX-listed cannabis company with
interests across the North American cannabis sector, including
vertically integrated operations in Pennsylvania, New Jersey,
Maryland, Michigan and California through TerrAscend Growth Corp.
and retail operations in Canada through TerrAscend Canada Inc.
TerrAscend operates The Apothecarium, Gage and other dispensary
retail locations as well as scaled cultivation, processing, and
manufacturing facilities in its core markets. TerrAscend's
cultivation and manufacturing practices yield consistent,
high-quality cannabis, providing industry-leading product selection
to both the medical and legal adult-use markets. The Company owns
or licenses several synergistic businesses and brands including
Gage Cannabis, The Apothecarium, Cookies, Lemonnade, Ilera
Healthcare, Kind Tree, Legend, State Flower, Wana, and Valhalla
Confections.
Toronto, Canada-based MNP LLP, the Company's auditor since 2017,
issued a "going concern" qualification in its report dated March
14, 2024, citing that the Company has incurred a net loss from
continuing operations and has a net capital deficiency that raise
substantial doubt about its ability to continue as a going concern.
TGP COMMUNICATIONS: Court Dismisses Bankruptcy Case
---------------------------------------------------
Judge Mindy A. Mora of the United States Bankruptcy Court for the
Southern District of Florida entered a Memorandum Opinion and Order
granting the motion filed by certain creditors to dismiss the
bankruptcy case of TGP Communications, LLC pursuant to Bankruptcy
Code Secs. 1112(b) and 305(a).
TGP is a limited liability corporation owned by James Hoft, which
formed TGP to run a website featuring politically charged articles.
That website is named The Gateway Pundit.
About a year before Hoft's purchase of the Jensen Beach condo, The
Gateway Pundit published a series of articles about the 2020
presidential election. The Articles include a series of stories
published by TGP focusing on the former director of product
strategy and security for Dominion Voting Systems.
Publication of the Articles ultimately led to state court
complaints being filed in Missouri and Colorado against Hoft and
TGP for defamation and other intentional torts. Hoft admits that
the defense of those lawsuits pushed TGP to seek bankruptcy relief
and argues that rapid depletion of benefits payable under media
insurance coverage to pay TGP's legal fees could eventually harm
TGP and its creditors. That prospect is the stated motivation for
bankruptcy relief, as TGP is currently able to pay its operating
debts in the ordinary course of its business.
Creditors Ruby Freeman, Wandrea' Arshaye Moss and Dr. Eric Coomer
dismiss the availability of insurance funds as ancillary to their
fight for justice. They contend that policy limits should not be
the only issue considered, and urge the Court to look at the whole
picture, assessing good faith from a broader perspective. Freeman,
Moss, and Coomer believe that TGP's schedules, statements of
financial affairs, and actions to date, including TGP's request to
evade typical bankruptcy disclosure, reflect the use of bankruptcy
as a pure litigation tactic.
No other creditor has voiced an opinion regarding the relative
importance of the media insurance policy, which is perhaps to be
expected given the composition of the creditor body.
Freeman and Moss sought dismissal of TGP's bankruptcy case or,
alternatively, relief from the automatic stay to continue
litigation in Missouri and Georgia. Coomer joined in the request
for dismissal and likewise alternatively sought stay relief to
continue litigation in Colorado.
Freeman, Moss, and Coomer have strong personal reasons for seeking
dismissal to continue litigation. The Dismissal Motion and Joinder
describe terrifying attacks directed at the State Court Plaintiffs
following The Gateway Pundit's publication of the Articles, which
accuse them of tampering with the 2020 presidential election
results.
Several reputable sources debunk The Gateway Pundit's version of
election events, but Hoft stands by their accuracy. In an
evidentiary hearing before this Court on June 27, 2024, TGP
continued to assert that The Gateway Pundit "broke" the stories
told in the Articles and it has been beleaguered ever since.
Even though the parties' positions regarding the Articles dominate
the narrative about dismissal, Judge Mora points out the Court's
task is not to evaluate the truthfulness of the Articles or the
viability of the State Court Litigation. Instead, the Court
considers the purpose of chapter 11 as part of the Bankruptcy Code
and TGP's demonstration of good faith (or lack thereof) in seeking
to use it.
From a balance sheet perspective, TGP is a healthy business with a
modest number of liquidated obligations. TGP's schedules and
statements of financial affairs list assets of $2,323,996.76 and
liabilities of $102,596.61. All of TGP's liquidated obligations are
general unsecured debts.
The Court points out that for the moment, TGP remains able to pay
its operating debts as they come due. TGP's primary cash flow
concern is the rapid depletion of the benefits payable under the
Policy. Once the Policy limits are reached, TGP will have to look
to other sources of revenue to pay its legal bills, and,
potentially, judgments in the State Court Plaintiffs' favor. That
possibility is the driving force behind TGP's bankruptcy filing,
but it remains to be seen whether TGP will ever suffer cash flow
insolvency. TGP's present financial status weighs in favor of
dismissal, as it does not exhibit financial distress or the need to
reorganize, the Court finds.
Judge Mora notes TGP's existing business model has provided
sufficient revenue for Hoft to (i) purchase a Florida oceanfront
condo titled in the name of 2021 Main Street LLC for cash along
with a Porsche that he drives while in Missouri, (ii) fund over
$1,000,000 in investment accounts, and (iii) pay his husband a
regular income in addition to Hoft's own distributions. Hoft, as
TGP's principal and only employee, has several strong incentives to
maintain TGP's status quo, the Court notes. What is not
contemplated by the Plan is the distribution to general unsecured
creditors of anything more than TGP's disposable net income over
three years.
TGP's desire to fend off and manage liability arising from
litigation claims in bankruptcy is not, in and of itself,
problematic, according to Judge Mora. The underlying issues, the
judge explains, run deeper, beyond litigation management. TGP
failed to show that it is insolvent or has a present business need
to revamp its business model, the Court states. And, with the Plan
TGP just filed, it has similarly failed to show that any proposed
reorganization plan would have a reasonable prospect of being
confirmed, the Court adds. TGP's strategy seems to be that it
doesn't matter what claims are asserted by the State Court
Plaintiffs or what judgments are entered in the State Court
Litigation, because the payout to all general unsecured creditors
will be capped at three years of
disposable net income under TGP's Plan.
The Court says TGP's explanations regarding the "good faith" nature
of its filing color the facts an improbable hue. Because legal fees
incurred in the State Court Litigation have already depleted
$700,000 of the Policy's $2 million in gross benefits, TGP insists
that it filed bankruptcy to benefit the State Court Plaintiffs and
that a subchapter V reorganization plan preserving the remaining
$1.3 million in policy benefits would facilitate a robust payout of
all claims. That simply isn't true.
The Plan, as envisioned by TGP, which limits the amount required
for distributions to TGP's projected net income over three years,
would do three things: (i) restrict the total amount payable to the
State Court Claimants to whatever TGP earns over the next few
years, effectively capping whatever litigation damage exposure that
TGP now faces to an amount that TGP finds palatable, (ii) require
the State Court Plaintiffs to share the future revenue allocated to
the Plan with all other general unsecured claimants, thereby
further limiting the State Court Plaintiffs' potential recovery,
and (iii) dilute the possible recovery for non-litigation general
unsecured claimants by likewise requiring them to share the
plan-allocated portion of TGP's future revenue with the State Court
Plaintiffs. TGP's proposed Plan that mostly seeks to limit
litigation exposure to its sole principal -- and only that -- looks
a lot like bad faith, the Court says.
The most telling aspect of TGP's failure to demonstrate that its
bankruptcy filing is intended to preserve going concern value or
maximize property available to satisfy creditors is its reliance
upon depletion of the Policy as a justification for relief, the
Court notes. TGP remains both balance sheet and cash flow solvent.
There is no present financial distress, no looming foreclosure
sale, no prospect of a market crash. There is only the State Court
Litigation in which TGP must defend itself. According to the Court,
that's not a basis for bankruptcy relief; it's the justice system
in operation. And the State Court Plaintiffs have made their
positions clear: they want their day in court to present their
state law claims, rather than the ability to file a proof of claim
in a bankruptcy case and receive a payout capped at what TGP
predicts its disposable income might be over the next three years.
The only question left to determine is whether dismissal is
appropriate under Sec. 305(a), Sec. 1112(b), or both. The Court
concludes that both options make sense. Although the bulk of this
Opinion focuses upon factors relevant to Sec. 1112(b), the unique
facts of this bankruptcy case make it suitable for dismissal under
sec. 305(a) as well. By filing for subchapter V relief, TGP
attempts to accomplish indirectly what it cannot do directly.
Hoft's testimony at the section 341 Meeting and further statements
by counsel demonstrate that TGP filed bankruptcy purely as a
litigation strategy, the Court finds. Litigation is already well
underway in two other fora, both of which are far better available
to determine the parties' interests. In lieu of a repetitious
recitation of facts justifying relief under Sec. 305(a), the Court
will summarize its analysis this way: in this particular bankruptcy
case, all the facts that support Sec. 1112 dismissal also support
Sec. 305(a) dismissal.
Despite facing a substantial burden of proof, the State Court
Plaintiffs have shown that dismissal is in the best interests of
TGP and all creditors, the Court concludes.
The Court will dismiss this bankruptcy case as a bad faith filing.
A copy of the Court's decision dated July 24, 2024, is available at
https://urlcurt.com/u?l=OUXvmC
About Gateway Pundit
Gateway Pundit is a US far-right conspiracy website.
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. In
its schedules and statements of financial affairs, the Debtor
listed assets of $2,323,996.76 and liabilities of $102,596.61.
TRANSOCEAN LTD: Incurs $123 Million Net Loss in Second Quarter
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Transocean Ltd. filed with the Securities and Exchange Commission
its Quarterly Report on Form 10-Q reporting a net loss of $123
million on $861 million of contract drilling revenues for the three
months ended June 30, 2024, compared to a net loss of $165 million
on $729 million of contract drilling revenues for the three months
ended June 30, 2023.
For the six months ended June 30, 2024, the Company reported a net
loss of $25 million on $1.62 billion of contract drilling revenues,
compared to a net loss of $630 million on $1.38 billion of contract
drilling revenues for the six months ended June 30, 2023.
As of June 30, 2024, the Company had $20.33 billion in total
assets, $1.57 billion in total current liabilities, $8.04 billion
in total long-term liabilities, and $10.71 billion in total
equity.
Management Comments
"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 Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1451505/000145150524000114/rig-20240630x10q.htm
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. Transocean owns or has partial ownership
interests in and operates a fleet of 36 mobile offshore drilling
units, consisting of 28 ultra-deepwater floaters and eight harsh
environment floaters.
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 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."
VENUS CONCEPT: Signs Consent Agreement with Madryn Lenders
----------------------------------------------------------
Venus Concept Inc. disclosed in a Form 8-K filed with the
Securities and Exchange Commission that on July 29, 2024, the
Company, Venus Concept USA, Inc., a wholly-owned subsidiary of the
Company, Venus Concept Canada Corp., a wholly-owned Canadian
subsidiary of the Company, and Venus Concept Ltd., a wholly-owned
Israeli subsidiary of the Company, entered into a Consent Agreement
with Madryn Health Partners, LP and Madryn Health Partners (Cayman
Master), LP, as lenders.
The Consent Agreement granted relief under the Loan and Security
Agreement (Main Street Priority Loan), dated Dec. 8, 2020, among
the Lenders, and Venus USA, as borrower, such that (i) certain
minimum liquidity requirements under the MSLP Loan Agreement are
waived through Aug. 30, 2024, and (ii) permit Venus USA to apply
the Aug. 8, 2024 cash interest payment due under each Note (as
defined in the Consent Agreement) to the respective outstanding
principal balance of each Note.
Bridge Loan Drawdown
As previously disclosed, on April 23, 2024, the Loan Parties
entered into a Loan and Security Agreement, among the Borrower, as
borrower, the Company, Venus Canada and Venus Israel, collectively
as guarantors, the Lenders, as lenders, and Madryn, as
administrative agent. Pursuant to the Loan and Security Agreement,
the Lenders have agreed to provide the Borrower with bridge
financing in the form of a term loan in one or more draws in an
aggregate principal amount of up to $5,000,000. Borrowings under
the Bridge Financing will bear interest at a rate per annum equal
to 12%.
On the maturity date of the Bridge Financing, the Loan Parties are
obligated to make a payment equal to all unpaid principal and
accrued interest. The Loan and Security Agreement also provides
that all present and future indebtedness and the obligations of the
Borrower to Madryn shall be secured by a priority security interest
in all real and personal property collateral of the Loan Parties.
The initial drawdown under the Loan and Security Agreement occurred
on April 23, 2024, when the Lenders agreed to provide the Borrower
with bridge financing in the form of a term loan in the principal
amount of $2,237,906.85.
On July 26, 2024, the Lenders agreed to provide the Borrower with a
subsequent drawdown under the Loan and Security Agreement in the
principal amount of $1,000,000. The July Drawdown was fully funded
on July 26, 2024. The Company expects to use the proceeds of the
July Drawdown, after payment of transaction expenses, for general
working capital purposes.
Fifth Bridge Loan Amendment
On July 29, 2024, the Loan Parties entered into a Fifth Bridge Loan
Amendment Agreement with the Lenders. The Fifth Bridge Loan
Amendment amended the Loan and Security Agreement to, among other
things, (i) modify the availability period for subsequent drawdowns
under the Bridge Financing from ten days to two days prior to the
maturity date, (ii) increase the Delayed Draw Commitment, as
defined in the Loan and Security Agreement, from $2,762,093.20 to
$3,000,000, and (iii) extend the maturity date of the Bridge
Financing from Aug. 2, 2024 to Aug. 30, 2024.
About Venus Concept
Toronto, Ontario-based Venus Concept Inc. is an innovative global
medical technology company that develops, commercializes and
delivers minimally invasive and non-invasive medical aesthetic and
hair restoration technologies and related services. The Company's
systems have been designed on cost-effective, proprietary and
flexible platforms that enable the Company to expand beyond the
aesthetic industry's traditional markets of dermatology and plastic
surgery, and into non-traditional markets, including family
medicine and general practitioners and aesthetic medical spas.
Toronto, Canada-based MNP LLP, the Company's auditor since 2019,
issued a "going concern" qualification in its report dated April 1,
2024, citing that the Company has reported recurring net losses and
negative cash flows from operations that raise substantial doubt
about its ability to continue as a going concern.
VILLAGE ON THE ISLE: Fitch Affirms 'BB+' IDR, Outlook Stable
------------------------------------------------------------
Fitch Ratings has affirmed Village on the Isle's (VOTI) ' Issuer
Default Rating (IDR) at 'BB+'. Fitch has also affirmed the rating
on approximately $90 million in revenue improvement bonds series
2016, 2017A issued by Sarasota County Health Facilities Authority,
and approximately $20 million series 2019 issued by Venice (FL) on
behalf of VOTI at 'BB+'.
The Rating Outlook is Stable.
Entity/Debt Rating Prior
----------- ------ -----
Village on the Isle (FL) LT IDR BB+ Affirmed BB+
Village on the Isle
(FL) /General
Revenues/1 LT LT BB+ Affirmed BB+
VOTI plans to construct 54 additional independent living units
(ILUs) similar in style to its Emerald Terraces to meet
consistently strong demand. Plans also include a wellness pavilion.
Financing is anticipated in November of 2024 with the facilities
opening in 2027. Presales have not yet begun, but a priority club
of interested potential residents included 175 people at the end of
July, 2024.
Affirmation of the 'BB+' rating incorporates up to $45 million in
additional long-term debt associated with the project. Initial
entrance fees are expected to fund much of construction. Though the
additional debt pressures the financial profile somewhat below
levels consistent with a 'BB+' rating, Fitch expects the project to
be accretive in the long-term.
Furthermore, VOTI has improved its cost containment measures and
capital related metrics as demonstrated by its 92% operating ratio
(OR) and 1.1x revenue-only maximum annual debt service (MADS)
coverage for FY 2023 (December YE). Fitch expects VOTI's OR to
remain below 100% and revenue-only MADS coverage to remain above
.6x over the next several years which supports the rating
affirmation and Stable Outlook.
SECURITY
The bonds are secured by a pledge of gross revenues, a security
interest in obligated group facilities, and debt service reserve
funds.
KEY RATING DRIVERS
Revenue Defensibility - 'bbb'
Good Demand in a Stable Market
VOTI is located in a stable service area. Demand is also sustained
by a healthy real estate market, with growing median home values in
the Sarasota area. Entrance fees are in line with primary market
area pricing trends and rate increases occur regularly. VOTI enjoys
a preferable location, amenities and incentives while facing little
meaningful competition. ILU demand has been healthy at 93% for 2023
and through Q2 of 2024. VOTI also has a waitlist of more than 150
people with some of those people also on the priority club list for
the expansion units. Occupancy is also good in the other areas of
care. At the end of June, 2024, occupancy was 87% in the assisted
living units (ALUs), and 93% in the skilled nursing beds (SNF).
Operating Risk - 'bbb'
Improving Profitability, Robust Capital Spending
VOTI's operating performance has improved to a midrange assessment
from weak. VOTI's operating ratio, net operating margin (NOM) and
NOM-adjusted (NOMA) averaged 103%, 4%, and 35.4% between 2019 and
2022. These weak ratios reflect ongoing renovations, and sector
wide stress associated with the pandemic. Renovations are largely
complete and pandemic stress has abated. In 2023 and Q2 of 2024
VOTI's ORs were 92.1% and 99.5% respectively. Similarly, NOM and
NOMA for FY 2023 were 18.6% and 36%. Fitch expects cost containment
metrics to remain consistent with the 2023 results over the next
several years.
Capital related metrics have also improved. On average between 2019
and 2022, revenue-only MADS coverage averaged 0.5x, debt to net
available averaged 8.3x and MADS has averaged 24.2% of revenue. For
FY 2023, these ratios improved to 1.1x revenue only MADS coverage,
6.9x debt to net and MADS was 18.8% of revenue, supporting the
mid-range assessment. Fitch expects capital related metrics to
remain consistent with the 2023 results.
Management actively invests in maintaining and expanding the campus
with capital expenditures well above 100% over the past several
years as is reflected in an average age of plant of approximately
6.5 years. VOTI's expansion project supports management's strategy
to meet and maintain strong demand with an attractive campus.
VOTI offers both lifecare and fee-for-service contracts and most
residents have type-B contracts.
Financial Profile - 'bb'
Heavy Debt Burden
Given VOTI's midrange revenue defensibility and midrange operating
risk assessments, Fitch expects it will maintain a financial
profile that is consistent with the 'bb' assessment throughout the
economic and financial volatility assumed in Fitch's stress case
scenario. VOTI's balance sheet has been stable, albeit limited with
unrestricted cash and investments around $30 million since 2020,
and 33% cash-to-adjusted debt at YE 2023. Unrestricted cash
represented 366 days cash on hand in 2023, which is neutral to the
assessment of VOTI's financial profile. MADS coverage was 2.2x in
FY2023.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Deterioration in ILU occupancy below 90%;
- Deterioration of liquidity such that cash-to-adjusted debt
stabilizes at 25% or lower;
- Operating ratios consistently above 100%;
- NOM stabilizing below 3%.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Over the longer term, improvement in liquidity metrics such that
cash-to-adjusted debt levels stabilize at 50% or greater, could
support positive rating action.
PROFILE
VOTI operates a life plan community located in Venice, FL
approximately 75 miles south of Tampa on Florida's Gulf Coast. The
community consists of 235 ILUs, 48 ALUs and 16 memory care units,
and 64 licensed skilled nursing beds at the new Health Center.
Eight of the 64 SNF beds are leased to a hospice agency.
VOTI offers several contract types; Type-B contracts with either a
10% discount on AL and SNF services (Traditional), or unlimited
assisted living services and 30 free days of skilled nursing each
year for temporary care in a fully-amortizing Type-B contract plan
(Enhanced Living).
In January 2019, VOTI began offering a Life Care Contract which is
a fully-amortizing Type A contract where residents receive
unlimited ALU and Health Center care access. Most of VOTI's
resident contracts are Type-B. Refunds are not subject to resale
requirements but VOTI has limited exposure to refundable contracts.
In fiscal 2023, VOTI had total revenues of approximately $36
million.
Sources of Information
In addition to the sources of information identified in Fitch's
applicable criteria specified below, this action was informed by
information from Lumesis.
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.
VIRTU FINANCIAL: Fitch Affirms 'BB-' LongTerm IDR, Outlook Stable
-----------------------------------------------------------------
Fitch Ratings has affirmed Virtu Financial, LLC's and VFH Parent,
LLC's Long-Term Issuer Default Ratings (IDR) at 'BB-'. Fitch also
affirmed the senior secured debt ratings of VFH Parent LLC and
Valor Co-Issuer, Inc. wholly-owned debt issuance subsidiaries of
Virtu, at 'BB-'. The Rating Outlook is Stable.
Key Rating Drivers
Established Electronic Trading Franchise: Virtu's ratings reflect
its established market position as a technology-driven market maker
across various venues, geographies and products. The ratings also
reflect its solid scale, good operating performance, experienced
management team that has executed against strategic objectives, and
the expectation that Virtu will maintain reasonable liquidity in a
lower volatility environment. Fitch also believes that Virtu's
market-neutral trading strategies in highly liquid products and
short holding periods minimize market and liquidity risks.
Operational Risks; Leverage Constrain Ratings: Primary rating
constraints include elevated operational risks inherent in
technology-driven trading and reliance on volatile transactional
revenue. Constraints also include the firm's primarily secured
corporate funding profile and its weaker cash flow leverage and
interest coverage metrics relative to historical norms.
Additionally, Fitch notes the SEC charges in 2023 against the firm
alleging that the company made materially false and misleading
statements and omissions regarding information barriers to prevent
the misuse of sensitive customer information. To the extent the
firm ultimately pays a material fine related to these charges
and/or experiences material reputational damage, the ratings could
be negatively affected.
Strong Operating Margins: Virtu's earnings and profitability remain
supportive of its rating. For the TTM ended 2Q24, the firm's
adjusted EBITDA margin (adjusted EBITDA to gross revenues) was
26.3%, within Fitch's 'bbb' category quantitative benchmark range
of 20% to 30% for securities firms with low balance sheet usage.
Fitch expects base and adjusted EBITDA margins to remain above 20%
even if average daily net trading income remains at late 2023
levels given the firm's cost-efficient, technology-driven
operations and variable compensation structure. These factors have
led Virtu to produce a relatively strong EBITDA margin compared
with those of traditional securities firms over time.
Cash Flow Leverage Falls on Stronger EBITDA: Virtu's cash flow
leverage was 2.7x for the TTM ended 2Q24 down from 2.8x the prior
year. Cash flow leverage peaked at slightly over 3x in early 2024
as a result of weaker adjusted EBITDA. However, stronger revenue
generation in 2Q24, given a more favorable trading environment and
the firm executing on organic growth initiatives, produced the
highest quarterly cash flow in two years.
However, Fitch views Virtu's current cash flow leverage as a rating
constraint particularly as management has been active regarding
share buybacks in lieu of paying down debt. The combined payout,
consisting of dividends and share repurchases, amounted to 82% of
operating cash flows in the TTM ended 2Q24. Virtu's rating would be
sensitive to the firm increasing its absolute debt level unless it
can demonstrate a sustained, higher level of adjusted EBITDA.
Secured Funding Profile: Virtu maintains secured broker-dealer
credit facilities, short-term bank loans and prime brokerage credit
facilities to finance its mostly overnight inventory, clearing
margin and settlement. Virtu had an aggregate of $75 million
outstanding on the broker-dealer facilities as of 2Q24. Positively,
the firm diversified and extended its corporate debt profile during
2Q24 when it refinanced its Term Loan B with a new $1.245 billion
facility and $500 million of senior secured notes both due in June
2031.
Liquid Balance Sheet: Fitch views Virtu's liquidity as adequate, as
the risks of its confidence-sensitive and predominantly secured
funding profile are partially offset by the largely liquid balance
sheet. At 2Q24, Virtu had $685 million in unrestricted cash and
equivalents to support operating activities, capital expenditures
and for general corporate purposes.
The balance sheet also includes highly liquid trading assets and
liabilities, primarily securities inventory, which could be
liquidated and converted to cash, as necessary. Virtu also has a
committed, undrawn revolving facility that was upsized to $300
million from $250 million at the time the firm refinanced its Term
Loan B.
Solid Interest Coverage: Interest coverage increased to 6.8x for
the TTM 2Q24 from 6.5x in the prior year period. Interest coverage
averaged 12.5x for 2020-2023, which is within Fitch's 'a' category
benchmark range of 10x to 15x for securities firms with low balance
sheet usage. Fitch expects interest coverage to remain above 6x
which be supportive of the current rating and Stable Outlook.
Stable Rating Outlook: The Stable Rating Outlook reflects Fitch's
expectation that Virtu will maintain a low market risk profile,
solid profitability margins and adequate liquidity. Further, the
Stable Outlook assumes that Virtu will refrain from upsizing its
absolute debt level over the Outlook horizon and that cash flow
leverage will remain below 3x on a gross debt to adjusted EBITDA
basis.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Inability to maintain cash flow leverage below 3x over the
Outlook horizon via debt paydown and/or EBITDA expansion;
- Adverse legal or regulatory actions against Virtu, which result
in a material fine, reputational damage, or alteration in the
business profile;
- An idiosyncratic liquidity event, particularly if it is the
result of a material operational or risk management failure;
- A material deterioration in interest coverage, approaching 3x;
- An inability to maintain Virtu's market position in the face of
evolving market structures and technologies; and/or
- A material shift into trading less-liquid products or a material
increase in position holding periods without a commensurate
increase in the tangible equity base.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Consistent operating performance, including maintenance of EBITDA
margins above 30% during lower volatility environments;
- Minimal operational losses over a longer time period;
- Maintaining cash flow leverage consistently below 2.0x on a gross
debt/adjusted EBITDA basis; and/or
- Increased funding flexibility, including the addition of a
laddered, unsecured funding component and demonstrated access to
third party funding through market cycles.
DEBT AND OTHER INSTRUMENT RATINGS: KEY RATING DRIVERS
The senior secured debt rating is equalized with Virtu's IDR,
reflecting average recovery prospects in a stress scenario.
DEBT AND OTHER INSTRUMENT RATINGS: RATING SENSITIVITIES
The senior secured debt ratings would primarily be sensitive to
movement in Virtu's IDR.
SUBSIDIARY AND AFFILIATE RATINGS: RATING SENSITIVITIES
VFH Parent LLC's Long-Term IDR is equalized with Virtu, reflecting
the full ownership and unconditional guarantee on the debt issued
by that entity. The ratings would be expected to move in tandem.
ADJUSTMENTS
The Standalone Credit Profile (SCP) has been assigned in line with
the implied SCP.
The Business Profile score has been assigned below the implied
score due to the following adjustment reason(s): Business model
(negative).
The Earnings & Profitability score has been assigned below the
implied score due to the following adjustment reason(s): Earnings
stability (negative).
The Funding, Liquidity & Coverage score has been assigned below the
implied score due to the following adjustment reason(s): Business
model/funding market convention (negative).
ESG Considerations
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Prior
----------- ------ -----
VFH Parent LLC LT IDR BB- Affirmed BB-
senior secured LT BB- Affirmed BB-
Valor Co-Issuer, Inc.
senior secured LT BB- Affirmed BB-
Virtu Financial LLC LT IDR BB- Affirmed BB-
VISTA OUTDOOR: Czechoslovak Group Deal No Impact on Moody's Ba3 CFR
-------------------------------------------------------------------
Moody's Ratings said Vista Outdoor Inc.'s announced Strategic
Review increases uncertainty and event risk surrounding the
proposed sale of The Kinetic Group (Kinetic; the ammunition
business previously called Sporting Products) to the Czechoslovak
Group a.s. (CSG). Vista adjourned to September 13 the shareholder
vote on the sale to CSG that was expected to be held on July 30,
2024 due to what Moody's believe was opposition from shareholders
for the transaction. Vista Outdoor also announced on July 30 that
it is formally exploring strategic alternatives including a range
of alternatives for Revelyst (outdoor products business) such as a
possible sale to CSG and new partners, in addition to the sale of
Kinetic. Vista Outdoor is also assessing whether to engage further
with MNC Capital regarding its acquisition proposal for Vista
Outdoor, or reviving the separation of Revelyst from Kinetic
through a spin-off that was originally contemplated in May 2022.
The Board continues to recommend Vista Outdoor stockholders vote in
favor of the proposal to adopt the merger agreement with CSG. The
prolonged strategic uncertainty at Vista Outdoor since the original
spin-off plan was announced in May 2022 and continued delays in
choosing between potential sales offers or a spin-off is credit
negative because it diverts management focus and company resources
away from core business operations. The announcements do not affect
Vista Outdoor's Ba3 Corporate Family Rating (CFR) or negative
outlook.
Moody's expect to withdraw the ratings on Vista Outdoor if The
Kinetic Group or all of Vista Outdoor is sold to either CSG or MNC
Capital because the rated debt will likely be repaid as part of a
change of control transaction. However, a potential spin-off of the
outdoor products business with debt remaining at the ammunition
entity would be detrimental to creditors because of the loss of
EBITDA that would be divested and due to reduced scale and product
diversity. The standalone ammunition business is also more
sensitive to volatility in non-law-enforcement related ammunition
demand.
Moody's also see greater risk for financial policies that favor
shareholders over lenders following recent pressure from activist
investors and the company could consider other leveraging
transactions as part of the strategic review. As part of Vista's
original plan to spinoff Outdoor Products in May 2022, the company
intended to focus more on shareholder friendly activities such as
dividends and opportunistic share repurchases and increase its
long-term total leverage target not to exceed 3.0x, up from the
company's existing and current 1.0x-2.0x net leverage target.
Further, Vista has increased the amount of shareholder
distributions it is planning as part of a sale to CSG. Given recent
shareholder sentiment and management response, Moody's believe that
any divestiture is likely to result in greater capital
distributions to shareholders and potentially debt issuance than
originally anticipated.
RATINGS RATIONALE
Vista Outdoor's Ba3 CFR reflects its leading position as one of the
largest ammunition manufacturers in the US, its leading brands in
multiple niche outdoor product categories and favorable US outdoor
activity participation trends. The rating also reflects Vista
Outdoor's conservative 1.0x-2.0x net debt-to-EBITDA target and
healthy free cash flow throughout ammunition industry cycles.
Moody's anticipate that Moody's-adjusted debt-to-EBITDA will remain
below 3.0x over the next 12 months (2.2x; Moody's adjusted for the
12 months ending March 2024) as good free cash flow and debt
repayment is offsetting the impact from weaker earnings. Ammunition
and outdoor products sales have declined as consumers economize
spending and due to margin pressure from higher copper and gun
powder costs. Moody's expect demand declines for both ammunition
and outdoor products to moderate over the next 12 months and for
recent cost saving and pricing measures to partially mitigate the
decline in the EBITDA margin. Moody's anticipate demand across both
segments will remain weak and meaningfully below pandemic highs
when consumers had additional time to spend on outdoor recreational
activities and also invested in guns/ammunition in response to a
perceived danger from increasing crime. Vista Outdoor's credit
profile is constrained by the volatility in non-law-enforcement
related ammunition demand and discretionary nature of outdoor
products, and high social risks related to the sale of ammunition
products. The company's acquisition strategy and stated intention
to split the company's Outdoor Products and Sporting Products
businesses create event risk.
Social risk will remain a key credit risk for Vista due to its
participation in the gun ammunition industry. The high social risk
negatively affects Vista's rating and necessitates stronger credit
metrics than comparably rated companies in order to account for
potential demand erosion from changing consumer sentiment or to
address escalating costs related to legal and regulatory factors.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The negative outlook captures uncertainty and event risk around
Vista's strategic review and likelihood that the company will
successfully close a sale of either Vista Outdoor or The Kinetic
Group to CSG or MNC Captial. There is elevated risk to lenders
should management decide to pursue a spin of the Revelyst business
into a standalone company while keeping the debt with the
ammunition business as originally planned or target another
leveraging transaction. The exposure of debt holders to the
inherent volatility and cyclicality of the ammunition business as
well as its exposure social and legal risks and loss of scale and
product diversity would be magnified by a spin-off of the Revelyst
business. The outlook also factors in financial policy uncertainty.
In Vista's original spin-off plan, the company intended to pursue
more shareholder friendly actions including dividends and share
repurchases while targeting leverage at a higher level over time of
up to 3.0x debt-to-EBITDA compared to the current 1.0x – 2.0x net
leverage target (consolidated company net leverage was 1.5x as of
March 2023 based on Vista's calculation).
An upgrade of the ratings in unlikely given the strategic review,
but ratings could be upgraded if Vista Outdoor diversifies its
product base towards less cyclical businesses and reduces relative
exposure of the overall asset base to the social, litigation and
regulatory risk in the ammunition segment. The company would also
need to sustain organic revenue growth, improve the EBITDA margin
in the outdoor products business and realize better margin
stability in the ammunition business. Vista Outdoor would also need
to sustain average debt-to-EBITDA below 1.5x after taking into
consideration demand volatility from its ammunition business and
generate consistently strong free cash flow to be upgraded.
The rating could be downgraded if Vista Outdoor's strategic review
leads to a significant change in the business composition or
leverage profile. A downgrade could also occur if the company
pursues a more aggressive financial policy following the review.
Based on the current asset profile, ratings could be downgraded if
the EBITDA margin deteriorates such that debt-to-EBITDA is
sustained above 3.0x. The ratings could also be downgraded if
management adopts a more aggressive financial policy or if adverse
gun regulations lead to a structural decline in operating profits.
A downgrade could also occur if liquidity deteriorates, free cash
flow generation declines meaningfully, or litigation risks lead to
potential cash payments that would weaken credit metrics.
ENVIRONMENTAL SOCIAL AND GOVERNANCE CONSIDERATIONS
Vista Outdoor's credit impact score of CIS-3 indicates that ESG
considerations have a limited impact on the current credit rating
with potential for greater negative impact over time driven mostly
by social and governance. As with most consumer durables companies,
Vista has some exposure to environmental risks. However, Vista's
exposure to social risks present greater credit risk and positions
it weakly due to exposure to changing demographic and societal
trends and customer relations risk from its ammunition business.
Governance risks reflect that the company's planned acquisition
strategy will likely raise currently low leverage, as well as the
willingness to reshape the portfolio through a spin-off that
reduces the asset base.
Vista Outdoor Inc., based in Anoka, Minnesota, is a manufacturer
and marketer of ammunition and outdoor sports and recreation
products. The publicly-traded company produces a broad product line
for the biking, winter sports, hunting, shooting sports, wildlife
watching, archery, and golf markets. Major brands include
Remington, Federal, Bushnell, CamelBak, Camp Chef, Foresight, Fox
Racing, Bell and Giro, to name a few. Sales were approximately $2.7
billion for the 12 months ended March 31, 2024.
VISTA-PRO: Coney Island Auto Loses Bid to Vacate Default Judgment
-----------------------------------------------------------------
In the case captioned as JEANNE ANN BURTON, Chapter 7 Trustee for
Vista-Pro Automotive, LLC, Plaintiff-Appellee, Plaintiff-Appellee,
v. CONEY ISLAND AUTO PARTS UNLIMITED, INC., Defendant-Appellant,
No. 23-5881 (6th Cir.), Judge Joan Larsen of the United States
Court of Appeals for the Sixth Circuit affirmed the decision of the
United States Bankruptcy Court for the Southern District of New
York and the United States District Court for the Middle District
of Tennessee denying Coney Island Auto Parts Unlimited, Inc.'s
motion to vacate the default judgment entered against it in the
adversary proceeding commenced by Vista-Pro Automotive, LLC on
timeliness grounds.
In November 2014, creditors of Vista-Pro, a Nashville auto-parts
corporation, commenced involuntary Chapter 7 liquidation
proceedings in the bankruptcy court for the Middle District of
Tennessee. The parties subsequently agreed to convert the matter
into Chapter 11 restructuring proceedings.
In February 2015, Vista-Pro opened an adversary proceeding against
Coney Island, a New York corporation, seeking to collect about
$50,000 in unpaid invoices. Vista-Pro mailed a summons and
complaint to Coney Island at its McDonald Avenue address in
Brooklyn. The summons and complaint were addressed to "Coney Island
Auto Parts Unltd., Inc.," without any corporate officer's or other
individual's name on the mailing. According to New York Department
of State records, the corporation itself, rather than an
individual, was listed as the registered agent for service of
process. Coney Island did not respond, so, at Vista-Pro's request,
the clerk of the bankruptcy court entered a default in April 2015.
The trustee continued efforts to collect on the judgment over the
next several years. In February 2021, after registering Vista-Pro's
default judgment in New York, the trustee served a subpoena on
Coney Island's New York bank, which placed a $97,000 hold on Coney
Island's account.
In October 2021, Coney Island moved in the Southern District of New
York bankruptcy court to vacate the default judgment entered by the
Middle District of Tennessee bankruptcy court. The court denied
that motion, instructing Coney Island that it should seek relief
from the Middle District of Tennessee court. Coney Island did so in
July 2022, moving under Federal Rule of Civil Procedure 60(b)(4) to
vacate the May 2015 default judgment. Coney Island argued that the
default judgment was void because Vista-Pro failed to properly
serve it in the adversary proceeding and, thus, the bankruptcy
court never acquired personal jurisdiction over it.
The bankruptcy court denied the Rule 60(b)(4) motion. Under Sixth
Circuit precedent, it explained, "courts retain discretion to deny
motions to set aside even potentially void judgments when, as a
threshold matter, the motions are not made within a reasonable
time." Coney Island admitted that it had actual notice of the
default judgment no later than April 2016, and, in the court's
view, Coney Island's years-long delay in moving to vacate the
judgment was unreasonable. The district court affirmed on appeal,
concluding that the "delay [wa]s unreasonable" and that Coney
Island "offer[ed] nothing to justify the delay."
Coney Island timely appealed. Coney Island says the courts erred by
denying its motion to vacate as untimely. In its view, a motion to
vacate a void judgment brought under Federal Rule of Civil
Procedure 60(b)(4) is subject to no time limit at all.
Rule 60(c)(1) governs the time for filing a motion under Rule
60(b).
Judge Larsen notes Coney Island brought its motion under Rule
60(b)(4), so the text says that its motion had to be filed within a
"reasonable time," though not necessarily within one year of
judgment.
Judge Larsen points out United States v. Dailide presents a classic
example of alternative holdings: although either the timeliness
determination or the jurisdictional determination presented a
sufficient ground on which to rest the decision, Dailide chose to
give "two independent reasons for the ruling." Judge Larsen says
the court in Dailide announced the timeliness requirement and held
Dailide's four-year delay failed that rule. The Dailide court also
analyzed the statutory jurisdiction of the district court and held
that the court had possessed jurisdiction to enter the
citizenship-revocation judgment against Dailide.
The dissent contends Antoine v. Atlas Turner, Inc., 66 F.3d 105
(6th Cir. 1995), conflicts with Dailide and that Antoine controls
because it was decided first.
According to Judge Larsen, "We see no conflict. Antoine did not
hold that a court may never deny a Rule 60(b)(4) motion on
timeliness grounds. It did not even address timeliness. Although
one can use the dates referenced in Antoine's statement of facts to
detect a five-year filing delay, the court made no mention of
delay, and there is no reason to believe that any party raised a
timeliness objection to the Rule 60(b)(4) motion brought there."
In similar fashion, the dissent claims that the Supreme Court's
subsequent decision in Espinosa, 559 U.S. at 271, "confirms that
untimeliness alone cannot be the basis for denying" a Rule 60(b)(4)
motion.
Judge Larsen points out that "like Antoine, Espinosa did not
consider whether the motion was timely under Rule 60(c)(1); it
simply decided what kinds of defects make a judgment void within
the meaning of Rule 60(b)(4). Espinosa, 559 U.S. at 271–72. So
Espinosa does not abrogate our caselaw on timeliness either.
Contrary to the dissent's suggestion, Northridge Church v. Charter
Township of Plymouth, 647 F.3d 606, 611 (6th Cir. 2011), does not
say otherwise. That case, too, did not address the timeliness
question."
"We are bound by Dailide's holding that Rule 60(b)(4) motions are
subject to a reasonable-time limitation. And we have no occasion
here to question the district court's application of this rule.
Coney Island's sole argument on appeal is that Rule 60(c)(1)'s
reasonable-time requirement does not apply; it does not argue,
alternatively, that, if the rule applied, its delay was reasonable.
We therefore affirm the denial of Coney Island's motion to vacate
the May 2015 default judgment," Judge Larsen concludes.
A copy of the Court's decision dated July 24, 2024, is available at
https://urlcurt.com/u?l=D5ajPO
About Vista-Pro Automotive, LLC
Vista-Pro Automotive, LLC is a Nashville auto-parts corporation.
In November 2014, creditors of Vista-Pro Automotive, LLC commenced
an involuntary Chapter 7 liquidation proceedings in the United
States Bankruptcy Court for the Middle District of Tennessee
(Bankr. M.D. Tenn. Case No. 14-09118) before the Hon. Randal S.
Mashburn. Jeanne Ann Burton was appointed as Chapter 7 trustee.
The parties subsequently agreed to convert the litigation into
Chapter 11 restructuring proceedings.
W 72 STREET PARTNERS: Files for Chapter 11 Bankruptcy in N.J.
-------------------------------------------------------------
W 72 Street Partners 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 15, 2024 at 11:00 a.m. in Room Telephonically.
About W 72 Street Partners LLC
W 72 Street Partners LLC is a limited liability company
W 72 Street Partners LLC sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D.N.J. Case No. 24-17236) 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
WALNUT HILLS-GREENVILLE: Appointment of Examiner Sought
-------------------------------------------------------
United Texas Bank, the pre-bankruptcy secured lender, filed a
motion to appoint an examiner for Walnut Hills-Greenville Ave, LLC.
This is a single asset real estate case concerning a commercial
office building located at 7502 Greenville Avenue, Dallas, Texas.
UTB loaned the company $25 million in March 2022, secured by a
first-lien Deed of Trust on the Property. Walnut filed this
bankruptcy case on April 1, ostensibly for the sole purpose of
thwarting UTB's foreclosure sale scheduled for the following day.
UTB claims that Walnut has failed to pay any ad valorem taxes on
the property for two years despite reporting net income of
approximately $1.9 million in 2023. These unpaid property taxes
diminish the value of UTB's collateral dollar-for-dollar by the
amount of Dallas County's statutory tax liens because statutory tax
liens take priority over UTB's Deed of Trust under Texas law.
The bank explains that given Walnut's reported annual net income,
the company should have had sufficient cash flow to satisfy all ad
valorem tax claims as they came due. Moreover, under the company's
lease with its insider tenant, the tenant has a contractual
obligation to satisfy ad valorem property taxes.
UTB fears that the company is: (i) not enforcing its lease with its
tenant because of the tenant's insider status; (ii) not providing
the bank with accurate financial reporting; and (iii) using its
purported $1.9 million of annual net income for the benefit of
insiders instead of paying its tax obligations as they come due.
UTB finds it disturbing that it has taken the company more than two
months to open a debtor-in-possession account. During that time,
the company's funds were being held in an account owned and
controlled by the insider tenant.
Accordingly, UTB seeks the appointment of an examiner under Section
1104(c) of the Bankruptcy Code to investigate Walnut's operations
and financial affairs.
A copy of the motion is available for free at
https://urlcurt.com/u?l=FYkEVv from PacerMonitor.com.
Counsel for United Texas Bank:
Kane Russell Coleman Logan, PC
Michael P. Ridulfo, Esq.
William Hotze, Esq.
5151 San Felipe, Suite 800
Houston, Texas 77056
Tel.: (713) 425-7400
Fax: (713) 425-7700
Email: whotze@krcl.com
John J. Kane, Esq.
Kyle Woodard, Esq.
901 Main Street, Suite 5200
Dallas, Texas 75202
Tel.: (214) 777-4200
Fax: (214) 777-4299
Email: jkane@krcl.com
Email: kwoodard@krcl.com
About Walnut Hills-Greenville Ave
Walnut Hills-Greenville Ave, LLC filed its voluntary petition for
relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Texas
Case No. 24-31485) on April 1, 2024, listing 50,000,001 to $100
million in assets and $10,000,001 to $50 million in liabilities.
Judge Jeffrey P Norman presides over the case.
Robert C Lane, Esq., at The Lane Law Firm represents the Debtor as
bankruptcy counsel.
WEISS MULTI-STRATEGY: Appointment of Chapter 11 Examiner Sought
---------------------------------------------------------------
Weiss Multi-Strategy Advisers, LLC and its affiliates filed with
the U.S. Bankruptcy Court for the Southern District of New York a
motion to appoint an examiner.
The companies explain that the issue of the facts and circumstances
of the February 2024 annual year end compensation payments has been
raised on numerous occasions by the Jefferies parties, the largest
creditor of their estates. The Jefferies parties have raised
questions about the timing and decision by management for making
such payments, the nature of the payments, and the decision on
whether to seek avoidance of the payments as preferential or
fraudulent transfers.
According to the companies, the question of whether their estates
have claims for avoidance of these payments could well become an
issue that threatens to block their ability to propose a plan of
liquidation, and the court's ability to confirm same. Leaving this
issue in limbo can only cause further delays after significant
funds and effort have been put into the Chapter 11 cases by all
concerned parties.
The companies assert that an independent investigation by an
independent examiner, subject to the scope and guidelines set forth
in the motion, will provide transparency and clarity regarding the
actions taken by the companies involving the February 2024 annual
year end compensation payments made to their employees. Resolving
this issue quickly and early in these Chapter 11 cases will benefit
the companies' estates, and likely provide a more streamlined and
efficient process for the confirmation of any Chapter 11 plan.
Counsel to the Debtors:
Klestadt Winters Jureller Southard & Stevens, LLP
Tracy L. Klestadt, Esq.
John E. Jureller, Jr., Esq.
Lauren C. Kiss, Esq.
Stephanie R. Sweeney, Esq.
200 West 41st Street, 17th Floor
New York, NY 10036
Telephone: (212) 972-3000
Facsimile: (212) 972-2245
About Weiss Multi-Strategy Advisers
Weiss Multi-Strategy Advisers, LLC filed a voluntary petition for
relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y.
Case No. 24-10743) on April 29, 2024. In the petition signed by
George Weiss, manager, the Debtor disclosed $10 million to $50
million in assets and $100 million to $500 million in liabilities.
Judge Martin Glenn oversees the case.
The Debtor tapped Tracy L. Klestadt, Esq., at Klestadt Winters
Jureller Southard & Stevens, LLP as bankruptcy counsel; Seward &
Kissel, LLP as corporate, securities and ERISA counsel;
CliftonLarsonAllen, LLP as auditor; and KPMG, LLP as audit and tax
services provider. Omni Agent Solutions, Inc. is the claims and
noticing agent and administrative agent.
WESTERN OIL EXPLORATION: Hits Chapter 11 Bankruptcy in Nevada
-------------------------------------------------------------
Western Oil Exploration Company filed Chapter 11 protection in the
District of Nevada. According to court documents, the Debtor
reports $2,987,638 in debt owed to 1 and 49 creditors. The petition
states funds will be available to unsecured creditors.
About Western Oil Exploration Company
Western Oil Exploration Company is an oil and gas extraction
company.
Western Oil Exploration Company sought relief under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. D. Nev. Case No. 24-13661) on July
19, 2024. In the petition filed by James E. Franklin, as chief
executive officer, the Debtor reports total assets of $501,777 and
total liabilities of $2,987,638.
The Honorable Bankruptcy Judge Mike K. Nakagawa oversees the case.
The Debtor is represented by:
Jason Imes, Esq.
FOX, IMES & CROSBY
601 S. 10th St.
Suite 202
Las Vegas, NV 89101
Tel: (702) 382-1007
Fax: (702) 382-1921
Email: jimes@ficlegal.com
WHEEL PROS: Skips Loan Interest Payments
----------------------------------------
Reshmi Basu and Allison McNeely of Bloomberg News report that
Clearlake Capital Group-backed Wheel Pros LLC skipped interest
payments due on some of its term loan debt, according to people
with knowledge of the matter.
The company, which announced a rebranding to Hoonigan last year,
told investors it has triggered a brief grace period to make the
overdue payments, said the people, who asked not to be identified
discussing a private matter. Non-payments could result in an event
of default, allowing creditors to accelerate principal repayments
and push the company into a restructuring, they said.
Messages left with the company and Clearlake were not returned.
About Wheel Pros LLC
Wheel Pros LLC -- http://www.wheelpros.com/-- manufactures and
distributes wheels, tires, and related accessories for cars, sport
utility vehicles, and trucks.
WINDSOR TERRACE: Pfister & Saso Revises Rule 2019 Statement
-----------------------------------------------------------
The law firm of Pfister & Saso, LLP, filed a second supplement to
verified statement pursuant to Rule 2019 of the Federal Rules of
Bankruptcy Procedure to disclose that in the Chapter 11 cases of
Windsor Terrace Healthcare, LLC, and its Affiliated Debtors, the
firm represents the Ad Hoc Group.
On May 17, 2024, the Ad Hoc Group filed the First Supplement to the
Verified Statement of the Ad Hoc Group of Personal Injury and
Wrongful Death Tort Claimants Pursuant to Federal Rule of
Bankruptcy Procedure 2019, reflecting that additional creditors
joined the Ad Hoc Group.
The Ad Hoc Group continues to expand, and a revised and restated
Exhibit A is attached hereto. All other portions of the Original
Rule 2019 Statement remain complete and correct.
The names of the decedents or injured residents and the names of
any derivative claimants in brackets that follow:
1. Donald Knestrict [Katherine Felkins]
Case No. 34-2022-00313404
(Sacramento Cnty.) and Claim Nos. 11,
12 in 1:23-bk-11208 (Windsor Court)
and Nos. 18, 19 in 1:23-bk-11401
(Windsor Sacramento Estates)
2. Edilberto Pimentel [Aquilina Pimentel, Mary Ann
Pimentel, Edilberto Pimentel, Jr.]
Case No. 34-2021-00301511
(Sacramento Cnty.) and Claim Nos. 14,
15, 16, 17 in 1:23-bk-11212 (Windsor Elk Grove)
3. Timothy Scott [Gabriel Scott]
Case No. 34-2017-00218038
(Sacramento Cnty.) and Claim No. 23
in 1:23-bk-11401 (Windsor Sacramento Estates)
4. Kathryn Long [Richard Long, Jeannette Long]
Case No. STK-CV-2023-11595 (San
Joaquin Cnty.) and Claim Nos. 18, 19
in 1:23-bk-11215 (Windsor Hampton)
and 15, 16 in 1:23-bk-11218 (Windsor Skyline)
5. Ruby Evans [Willette Williams, Ronnie Evans, James
Evans]
Case No. FC5055755 (Solano Cnty.)
and Claim Nos. 15, 16, 17, 18 in 1:23-
bk-11220 (Windsor Vallejo)
6. Sidney Krow [Michelle Krow, Stacy Armstrong]
Case No. 23CV034696 (Alameda
Cnty.) and Claim No. 18 in 1:23-bk-
11207 (Windsor Country Drive)
7. Lin Yuan Weng [Rachel Zi Liang Zhou]
Claim No. 17 in 1:23-bk-11207
(Windsor Country Drive)
8. Lawrence Leslie [Sara Leslie]
Case No. 24CV001372 (Sacramento
Cnty.) and Claim Nos. 24, 25 in 1:23-
bk-11213 (Windsor Elmhaven)
9. Carol Parks [Kimberly Emslander, Melanie Schwemer,
Charles Parks, Michael Parks]
Case No. 24CV001531 (Sacramento
Cnty.) and Claim Nos. 29, 30, 31, 32,
33 in 1:23-bk-11401 (Windsor Sacramento Estates)
10. Mary Carter [Nathan Floyd]
Case No. 19STCV11538 (Los Angeles
Cnty.) and Claim No. 26 in 1:23-bk-
11206 (Windsor Cheviot Hills)
11. Dallas Nelson, Jr. [Delcine Nelson, Marc Nelson]
Case No. STK-CV-UMM-2024-998
(San Joaquin Cnty.) and Claim Nos. 24,
25, 26[1] in 1:23-bk-11401 (Windsor Sacramento Estates)
12. Cynthia Davidson [Corinthia French]
Case No. 23CV007089 (Sacramento
Cnty.) and Claim No. 22[2] in 1:23-bk-
11210 (Windsor El Camino)
13. Larry D. Jefferson [Reashaun Jefferson, Yolanda
Jefferson]
Case No. 23CV030693 (Alameda
Cnty.) and Claim No. 9 in 1:23-bk-
11402 (Windsor Hayward Estates)
14. Aaeron Deleon [Lawonda Deleon, Aaryn Deleon, Ayza
Deleon]
Case No. 34-2022-00325930
(Sacramento Cnty.) and Claim No. 34
in 1:23-bk-11212 (Windsor Elk Grove)
15. Bryan Nash
Case No. 34-2022-00327033
(Sacramento Cnty.) and Claim No. 46
in 1:23-bk-11210 (Windsor El Camino)
16. Drena Humphries [Alan Humphries, George Humphries,
John Humphries]
Case No. 23STCV00307 (Los Angeles
Cnty.) and Claim No. 17 in 1:23-bk-
11214 (Windsor Gardens Convalescent Hospital)
17. James Portis [Patricia Portis]
Case No. 21STCV16326 (Los Angeles
Cnty.) and Claim No. 19 in 1:23-bk-
11206 (Windsor Cheviot Hills)
18. Iman Shabazz [Tiffany Harrison]
Claim No. 22 in 1:23-bk-11213
Windsor Elmhaven) and Claim No. 17
in 1:23-bk-11401 (Windsor Sacramento Estates)
19. Catherine Wicker
Case No. 22STCV01554 (Los Angeles
Cnty.) and Claim No. 21 in 1:23-bk-
11213 (Windsor Elmhaven)
20. Deborah Washington [Brandy Russell]
Case No. 34-2022-00329913
(Sacramento Cnty.) and Claim No. 20
in 1:23-bk-11210 (Windsor El Camino)
21. Denisa Caldwell
Case No. 24STCV03096 (Los Angeles
Cnty.) and Claim No. 160 in 1:23-bk-
11200 (Windsor Terrace)
22. Jerry Orrick [Joe Orrick]
Case No. 23CV002855 (Sacramento
Cnty.) and Claim No. 34 in 1:23-bk-
11401 (Windsor Sacramento Estates)
Attorneys for the Ad Hoc Group:
PFISTER & SASO, LLP
Robert J. Pfister, Esq.
10250 Constellation Boulevard, Suite 2300
Los Angeles, California 90067
Telephone: (310) 414-4901
Email: rpfister@pslawllp.com
-and-
Paul A. Saso, Esq.
524 Broadway, 11th Floor
New York, New York 10012
Telephone: (212) 416-4380
Email: psaso@pslawllp.com
About Windsor Terrace Healthcare
Windsor Terrace Healthcare, LLC and its affiliates are primarily
engaged in the businesses of owning and operating skilled nursing
facilities throughout the State of California. Collectively, the
Debtors own and operate 16 skilled nursing facilities, which
provide 24 hour, seven days a week and 365 days a year care to
patients who reside at those facilities.
In addition to the 16 skilled nursing facilities, the Debtors own
and operate one assisted living facility (which is Windsor Court
Assisted Living, LLC), one home health care center (which is S&F
Home Health Opco I, LLC), and one hospice care center (which is S&F
Hospice Opco I, LLC). The Debtors do not own any of the real
property upon which the facilities are located.
Windsor Terrace Healthcare and 18 affiliates filed Chapter 11
petitions (Bankr. C.D. Calif. Lead Case No. 23-11200) on Aug. 23,
2023. Two more affiliates, Windsor Sacramento Estates, LLC and
Windsor Hayward Estates, LLC, filed Chapter 11 petitions on Sept.
29.
At the time of the filing, Windsor Terrace Healthcare disclosed up
to $10 million in both assets and liabilities.
Judge Victoria S. Kaufman oversees the cases.
The Debtors tapped Levene, Neale, Bender, Yoo, and Golubchik, LLP
as bankruptcy counsel; Hooper, Lundy & Bookman, P.C. and Hanson
Bridgett, LLP as special counsels; and Province, LLC as financial
advisor. Stretto, Inc., is the Debtor's claims, noticing and
solicitation agent.
The U.S. Trustee for Region 16 appointed an official committee to
represent unsecured creditors in the Debtors' Chapter 11 cases.
Troutman Pepper Hamilton Sanders, LLP is the Debtors' legal
counsel.
Jacob Nathan Rubin, the patient care ombudsman, is represented by
RHM Law, LLP.
WOODFIELD RD: Seeks to Hire Johnson Law Group as Legal Counsel
--------------------------------------------------------------
Woodfield Rd, LLC seeks approval from the U.S. Bankruptcy Court for
the District of Maryland to employ The Johnson Law Group, LLC as
its counsel.
The firm's services include:
(1) provision of general advice and counsel concerning
compliance with the requirements of Chapter 11;
(2) preparation of any necessary amendments to the Debtor's
schedules, statement of financial affairs, and related documents as
appropriate;
(3) representation of the Debtor in possession in all
contested matters. Certain adversary proceedings in this Court will
require a separate retainer agreement;
(4) representation as appropriate in any related matters in
other Courts;
(5) provision of advice and counsel concerning the structure
of a plan and any required amendments thereto;
(6) provision of advice concerning the feasibility of
confirmation of a plan and representation in connection with the
confirmation process;
(7) liaison, consultation, and where appropriate, negotiation
with creditors and other parties in interest;
(8) review of relevant financial information;
(9) review of claims with a view to determining which claims
are allowable and in what amounts;
(10) prosecution of claims objections, as appropriate;
(11) representation at the section 341 meeting of creditors and
at any hearings or status conferences in court; and
(12) provision of such representations as may be necessary and
appropriate to the case.
William C. Johnson, Jr., Esq. would charge his regular hourly rate
for services, currently $450 per hour.
To date, as of July 21, 2024, the Debtor has paid $0.00 toward the
$7,500 initial retainer fee.
William C. Johnson, Jr., Esq., a member of Johnson Law Group, does
not hold or represent any interest that is adverse to the estate,
and is a disinterested person within the meaning of 11 U.S.C.
101(14).
The firm can be reached through:
William C. Johnson, Jr., Esq.
The Johnson Law Group, LLC
6305 Ivy Lane, Suite 630
Greenbelt, MD 20770
Phone: (301) 477-3450
Phone: (202) 525-2958
Fax: (301) 477-4813
Email: William@JohnsonLG.Law
About Woodfield Rd, LLC
Woodfield Rd is a Single Asset Real Estate debtor (as defined in 11
U.S.C. Section 101(51B)). The Debtor owns the real property located
at 26040-26050, Woodfield Rd, Damascus MD 20787 having an appraised
value of $8.4 million.
Woodfield Rd, LLC filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. D. Md. Case No. 24-15941)
on July 15, 2024, listing $8,421,687 in assets and $4,935,021 in
liabilities. The petition was signed by Sam Razjooyan as manager.
William C. Johnson, Jr., Esq. at The Johnson Law Group, LLC
represents the Debtor as counsel.
XCELERATOR BOATWORKS: Parker Poe Represents Creditors
-----------------------------------------------------
Kiah T. Ford of the law firm of Parker Poe Adams & Bernstein LLP,
filed a verified statement pursuant to Rule 2019 of the Federal
Rules of Bankruptcy Procedure to disclose that in the Chapter 11
case of Xcelerator Boatworks Inc., the firm represents individual
creditors:
1. Charles Davis
511 W. Bay Street, Suite 400
Tampa, Florida 33606
2. Trevor Baldwin
4211 W. Boyscout Blvd.
Tampa, Florida 33607
3. Christopher Carrere
5440 Lykes Lane
Tampa, Florida 33611
Mr. Davis, Mr. Baldwin, and Mr. Carrere have been informed of the
joint representation and believe that there is no conflict of
interest with respect to the joint representation.
Parker Poe claims no interest or amounts with respect to this case,
but instead represents the clients named herein and their claims
and/or interests.
The law firm can be reached at:
Kiah T. Ford, Esq.
Parker Poe Adams & Bernstein LLP
620 South Tryon Street, Suite 800
Charlotte, North Carolina 28202
Telephone: (704) 372-9000
Email: chipford@parkerpoe.com
About Xcelerator Boatworks Inc.
Xcelerator Boatworks Inc., filed a Chapter 11 bankruptcy petition
(Bankr. W.D.N.C. Case No. 24-50244) on July 2, 2024. The Debtor is
represented by Cole Hayes as counsel.
YANEZ DESIGNS: Case Summary & Three Unsecured Creditors
-------------------------------------------------------
Debtor: Yanez Designs LLC
4839 Isaac Ryan
San Antonio, TX 78253
Chapter 11 Petition Date: August 3, 2024
Court: United States Bankruptcy Court
Western District of Texas
Case No.: 24-51475
Debtor's Counsel: James S. Wilkins, Esq.
JAMES S. WILKINS P.C.
1100 NW Loop 410, Ste. 700
San Antonio, TX 78213
Tel: 210 271-9212
Email: jwilkins@stic.net
Estimated Assets: $0 to $50,000
Estimated Liabilities: $50 million to $100 million
The petition was signed by Sandor Gonzalez as sole member.
A full-text copy of the petition containing, among other items, a
list of the Debtor's three unsecured creditors is available for
free at PacerMonitor.com at:
https://www.pacermonitor.com/view/P7KGU7Y/YANEZ_DESIGNS_LLC__txwbke-24-51475__0001.0.pdf?mcid=tGE4TAMA
YELLOW CORP: Disputes $7.8-Bil. Pension Feud PBCC Rules
-------------------------------------------------------
Alex Wolf of Bloomberg Law reports that Yellow Corp. urged a
Delaware bankruptcy judge to set aside regulations asserted by the
Pension Benefit Guaranty Corp. to calculate the defunct trucking
company's pension withdrawal liability, saying the agency is
unilaterally changing applicable rules.
If the US Bankruptcy Court for the District of Delaware adopts
positions advanced by the PBGC on withdrawal liability, then a
group of multiemployer pension plans that received $41.1 billion in
government bailouts over the last two years will receive a windfall
at the expense of Yellow's other creditors, the company said in a
July 26 court filing.
About Yellow Corporation
Yellow Corporation -- http://www.myyellow.com/-- operates
logistics and less-than-truckload (LTL) networks in North America,
providing customers with regional, national, and international
shipping services throughout. Yellow's principal office is in
Nashville, Tenn., and is the holding company for a portfolio of LTL
brands including Holland, New Penn, Reddaway, and YRC Freight, as
well as the logistics company Yellow Logistics.
Yellow Corporation and 23 affiliates concurrently filed voluntary
petitions for relief under Chapter 11 of the Bankruptcy Code
(Bankr. D. Del. Lead Case No. 23-11069) on August 6, 2023, before
the Hon. Craig T. Goldblatt. As of March 31, 2023, Yellow
Corporation had $2,152,200,000 in total assets against
$2,588,800,000 in total liabilities. The petitions were signed by
Matthew A. Doheny as chief restructuring officer.
The Debtors tapped Kirkland & Ellis, LLP as restructuring counsel;
Pachulski Stang Ziehl & Jones, LLP as Delaware local counsel;
Kasowitz, Benson and Torres, LLP as special litigation counsel;
Goodmans, LLP as special Canadian counsel; Ducera Partners, LLC, as
investment banker; and Alvarez and Marsal as financial advisor.
Epiq Bankruptcy Solutions is the claims and noticing agent.
Milbank LLP serves as counsel to certain investment funds and
accounts managed by affiliates of Apollo Capital Management, L.P.
while White & Case, LLP and Arnold & Porter Kaye Scholer, LLP serve
as counsels to Beal Bank USA and the U.S. Department of the
Treasury, respectively.
On Aug. 16, 2023, the U.S. Trustee for Region 3 appointed an
official committee of unsecured creditors in the Chapter 11 cases.
The committee tapped Akin Gump Strauss Hauer & Feld, LLP and
Benesch, Friedlander, Coplan & Aronoff, LLP as counsels; Miller
Buckfire as investment banker; and Huron Consulting Services, LLC,
as financial advisor.
[*] 31st Distressed Investing Conference: Early Bird Discount!
--------------------------------------------------------------
Registration is now open for the 31st Annual Distressed Investing
Conference, presented by Beard Group, Inc. Access Early Bird
discounted pricing through Sept. 16.
This year's event is being sponsored by:
* Kirkland & Ellis, LLP, as conference co-chair;
* Foley & Lardner LLP, as conference co-chair;
* Davis Polk & Wardwell LLP;
* Hilco Global;
* Locke Lord LLP;
* Morrison & Foerster LLP;
* Proskauer Rose LLP;
* Skadden, Arps, Slate, Meagher & Flom LLP;
* Wachtell, Lipton, Rosen & Katz; and
* Weil, Gotshal & Manges LLP
This year's Patron Sponsors:
* C Street Advisory Group
* Katten Muchin Rosenman LLP
* Kobre & Kim
This year's Media Partners:
* BankruptcyData;
* Debtwire;
* Dow Jones
* LevFin Insights;
* PacerMonitor; and
* Reorg
This year's Knowledge Partner:
* Creditor Rights Coalition
Once a year, the top industry experts gather together to discuss
the latest topics and trends in the distressed investing industry.
This value-packed event features special presentations from keynote
speakers, live panel discussions with industry experts and
networking with other insolvency professionals.
This in-person conference will be held Wed., Dec. 4, 2024 at The
Harmonie Club in New York City.
Visit https://www.distressedinvestingconference.com for more
information.
For sponsorship opportunities, please contact:
Will Etchison
Conference Producer
Tel: 305-707-7493
E-mail: will@beardgroup.com
[*] Restaurants That Declared Bankruptcy in 2024
------------------------------------------------
Zoe Strozewski of Aol reports the restaurant industry is as
unpredictable as ever. While some chains are struggling to keep up
with their competitors, others are still dealing with the aftermath
of the pandemic. For several, financial difficulties have been
mounting for years, leaving them with no other choice but to file
for bankruptcy.
The year started with one Popeyes franchisee declaring Chapter 11
bankruptcy, followed by a string of chains filing for the same
financial protection. These primarily consisted of smaller chains
like New York-based Sticky's Finger Joint, though one of the most
recent—and highly publicized—bankruptcies was filed by national
seafood giant Red Lobster.
With these recent filings, multiple restaurant chains have had to
streamline their restaurant portfolio by shuttering locations. Read
on to discover all the restaurant chains that have declared
bankruptcy in 2024.
1. Gotham Restaurant
After 40 years in business, the iconic New York City fine dining
eatery Gotham Restaurant is contending with bankruptcy and has
temporarily closed its doors to customers. Gotham Restaurants LLC,
the restaurant's parent company, filed for Chapter 11 bankruptcy
protection on July 24. The bankruptcy filing listed hundreds of
thousands of dollars in debt, including nearly $484,000 owed just
to the New York State Department of Taxation Finance
Bankruptcy/Special Procedures Section, according to Nation's
Restaurant News.
Meanwhile, Gotham has also halted its lunch and dinner services
until August after recently losing $45,000 in an alleged cyberscam.
Co-owner Cassandra Csencsitz told Eater New York that they had
already been running "close to the bone," so the loss of so much
money forced them to stop operating temporarily.
Though lunch and dinner services have yet to resume, Gotham has
reopened its bar and is currently serving cocktails and bites from
Tuesdays through Fridays from 5 p.m. until closing time.
2. Tender Greens&Tocaya
One Table Restaurant Brands—the parent company of the salad chain
Tender Greens and the Mexican chain Tocaya—officially filed for
Chapter 11 bankruptcy on July 17. In court documents, the COVID-19
pandemic, rising interest rates, and elevated costs were among the
issues that the company blamed for its financial woes, Restaurant
Business Magazine reported.
One Table is currently seeking $3 million from the investment
company Breakwater Management LP to continue operating as usual
while it looks for a buyer. In good news for fans, the company
doesn't plan to close any of its locations for now. Tender Greens'
currently operates 24 restaurants in California, while Tocaya
operates 15 across California and Arizona.
"We ran every possible option to the ground in order to avoid
bankruptcy, but ultimately, restructuring our debt is the best
decision for our team members, valued vendor partners and loyal
guests," One Table CEO Harald Herrmann said in a statement, per
Restaurant Business Magazine. "We expect to emerge from this
restructuring process stronger and better positioned to prosper in
our hyper-competitive industry."
3. Melt Bar&Grilled
On June 14, Melt Bar&Grilled, a Cleveland, Ohio-based restaurant
chain known for its gourmet grilled cheese sandwiches, filed for
Chapter 11 bankruptcy. According to the filing, the company has
been struggling to pay its landlords, vendors, and service
providers. Court documents state that the rising cost of goods and
labor, as well as "major shifts and changes in the service
industry" have negatively affected the chain's operations.
Melt currently has four restaurants in Akron, Columbus, Lakewood,
and Mentor, Ohio, along with one location at Cleveland's
Progressive Field and another at Case Western Reserve University.
In 2024, Melt shuttered locations in Cedar Point, Independence, and
Avon, Ohio.
4. Rubio's Coastal Grill
Just a few years after declaring bankruptcy during the COVID-19
pandemic, Rubio's officially announced its second Chapter 11
bankruptcy filing on June 5. The chain attributed the move to
rising costs, declining customer visits, and the new $20 minimum
wage for fast-food workers in California.
While Rubio's closed 48 underperforming California restaurants in
May to improve the health of the business, the closures didn't
solve its financial woes.
"Despite the Company's best efforts to right-size the company, the
continued challenging economic conditions have negatively impacted
its ability to meet the demands of its debt burden," Nicholas
Rubin, Rubio's chief restructuring officer, said in a statement.
Rubio's is looking to sell the business during the bankruptcy
process and expects the transaction to be completed within 75 days.
Its remaining 86 locations in California, Arizona, and Nevada will
continue operating in the meantime.
5. Red Lobster
About a week after making headlines for abruptly closing dozens of
locations, Red Lobster announced it had filed for Chapter 11
bankruptcy. Jonathan Tibus, Red Lobster's CEO, said in a press
release that the bankruptcy will enable the company "to address
several financial and operational challenges."
The seafood chain said it would use the proceedings to promote
operational improvements, reduce locations, and sell "substantially
all of its assets." Court documents reveal that Red Lobster has an
estimated $1 billion to $10 billion in assets and liabilities.
Over the years, Red Lobster has struggled with several issues,
including high food and labor costs and significant operating
losses, which include the $11 million loss tied to its Ultimate
Endless Shrimp deal. The company subsequently began investigating
the role that Thai Union, Red Lobster's former majority owner,
played in the popular promotion, according to Reuters.
In good news for Red Lobster fans, the seafood chain is getting a
second chance following all its financial woes. The lender Fortress
Investment Group has come forward to buy Red Lobster out of
bankruptcy, with the sale slated to be approved in a July 29 court
hearing.
6. Tijuana Flats
In April, Tijuana Flats, the Florida-based Tex-Mex restaurant
chain, shared several restructuring plans, one of which was filing
for Chapter 11 bankruptcy protection. According to Restaurant
Business Online, the chain has nearly $19 million in debt.
Along with announcing the bankruptcy, Tijuana Flats shared that
Flatheads, LLC. acquired the chain. The company noted in a press
release that its strategic review, which began in November 2023,
drove the new ownership and bankruptcy filing.
The changes for Tijuana Flats didn't stop at a bankruptcy filing
and new owner. The restaurant chain also closed 11 restaurants, 10
of which were in Florida and one of which was in Virginia,
according to a company representative. The company said these
closures stemmed from "a unit-by-unit analysis of financial
performance, occupancy costs, and market condition."
The chain has closed 40 locations since the year began. Restaurant
Business Online reported that Tijuana Flats has attributed some of
its financial struggles to rising food and labor costs after the
pandemic, as well as shifts in consumer spending. In addition to
this, the chain's menu expansion in 2021 required more equipment
and staff, resulting in slower service times, increased costs, and
lower customer satisfaction, according to the filing. This
ultimately led to a decline in sales.
7. Boxer
At the end of April, Boxer, a small Portland, Ore.-based Ramen
chain, announced via Instagram that it will be closing all four of
its restaurants on May 29 after filing for Chapter 11 bankruptcy
with its sister chain SuperDeluxe in February. In its Instagram
post and on its website, Boxer said the closures were due to a
combination of pandemic-related challenges and inflation.
"Despite the tireless efforts and dedication of our incredible
team, and the unwavering support from all of you, our family and
friends, it has become impossible to continue operating," Boxer
wrote.
Before filing for bankruptcy in February, Boxer had opened two new
restaurants—a Beaverton, Ore., location in December 2023, and a
Multnomah Village, Ore., location in January 2024.
Beyond Boxer's closures, SuperDeluxe, which once operated five
restaurants, now has just three locations.
8. Sticky's Finger Joint
After struggling with pandemic-related issues and various legal
troubles, New York-based Sticky's Finger Joint filed for Chapter 11
bankruptcy at the end of April. During the pandemic, the chicken
tender chain experienced decreasing sales and restaurant closures
and now operates just 10 locations. Sticky's also said its
financial issues resulted from the increased reliance on
third-party delivery channels, as well as low foot traffic in New
York City following the pandemic, according to Restaurant Business
Online.
Beyond its financial struggles, the chain has gotten sued multiple
times. In 2022, the similarly named, older barbecue chain Sticky
Fingers sued Sticky's over trademark infringement. A year before
that, a court awarded Sticky's landlord $600,000 in damages after
the chain left its lease early. Although Sticky's appealed this,
the case resulted in a "financial strain," according to Restaurant
Business Online.
9. Popeyes
At the end of January, RRG, a 17-unit Popeyes franchisee filed for
Chapter 11 bankruptcy and attributed this to three underperforming
restaurants. According to the filing, the restaurants "have
significantly lost money and caused a financial burden on the
continued operation of the remaining restaurants." Additionally,
the franchisee fell behind on the lease payments of its profitable
locations and must pay them back to avoid lease termination. The
filing notes that RRG plans to continue operating its business
during the bankruptcy while closing its "poor performing
locations."
The franchisee owes rent to at least 11 entities, with one landlord
owed as much as $238,595.13 according to Restaurant Dive. This is
the second Popeyes operator to file for bankruptcy since last
March.
[^] Large Companies with Insolvent Balance Sheet
------------------------------------------------
Total
Share- Total
Total Holders' Working
Assets Equity Capital
Company Ticker ($MM) ($MM) ($MM)
------- ------ ------ -------- -------
99 ACQUISITION G NNAGU US 78.5 (2.9) (0.9)
ABEONA THERAPEUT ABEO US 74.8 (8.9) 54.8
AGENUS INC AGEN US 256.6 (190.3) (195.7)
ALCHEMY INVESTME ALCYU US 122.6 (5.5) (0.5)
ALCHEMY INVESTME ALCY US 122.6 (5.5) (0.5)
ALNYLAM PHARMACE ALNY US 4,009.6 (3.1) 2,117.6
ALTRIA GROUP INC MO US 34,387.0 (2,966.0) (4,242.0)
AMC ENTERTAINMEN AMC US 8,594.7 (1,696.6) (575.7)
AMERICAN AIRLINE AAL US 64,125.0 (4,746.0) (9,815.0)
AMNEAL PHARM INC AMRX US 3,456.4 (16.6) 545.7
APPIAN CORP-A APPN US 595.4 (9.7) 96.0
AQUESTIVE THERAP AQST US 129.5 (36.3) 95.3
AULT DISRUPTIVE ADRT/U US 1.0 (5.0) (2.4)
AUTOZONE INC AZO US 17,108.4 (4,838.2) (1,903.1)
AVEANNA HEALTHCA AVAH US 1,643.0 (136.3) (45.9)
AVIS BUDGET GROU CAR US 33,528.0 (508.0) (741.0)
BATH & BODY WORK BBWI US 5,221.0 (1,676.0) 696.0
BAUSCH HEALTH CO BHC US 26,913.0 (174.0) 991.0
BAUSCH HEALTH CO BHC CN 26,913.0 (174.0) 991.0
BELLRING BRANDS BRBR US 765.0 (247.7) 340.2
BEYOND MEAT INC BYND US 735.0 (561.4) 257.7
BIOCRYST PHARM BCRX US 467.9 (476.9) 327.2
BIOHARVEST SCIEN BHSC CN 17.5 (4.3) (7.8)
BIOTE CORP-A BTMD US 160.1 (44.9) 90.3
BOEING CO/THE BA US 142,720.0 (17,982.0) 17,809.0
BOMBARDIER INC-A BBD/A CN 12,603.0 (2,144.0) 283.0
BOMBARDIER INC-A BDRAF US 12,603.0 (2,144.0) 283.0
BOMBARDIER INC-B BBD/B CN 12,603.0 (2,144.0) 283.0
BOMBARDIER INC-B BDRBF US 12,603.0 (2,144.0) 283.0
BOOKING HOLDINGS BKNG US 28,541.0 (4,276.0) 3,087.0
BRIDGEBIO PHARMA BBIO US 794.4 (1,082.1) 574.9
BRIDGEMARQ REAL BRE CN 181.1 (62.3) (86.2)
BRIGHTSPHERE INV BSIG US 533.1 (18.8) -
BRINKER INTL EAT US 2,495.7 (46.7) (408.2)
CALUMET INC CLMT US 2,731.6 (284.1) (12.7)
CARDINAL HEALTH CAH US 45,880.0 (3,262.0) (572.0)
CARTESIAN THERAP RNAC US 325.2 (116.8) 74.5
CENTURION ACQUIS ALFUU US 0.5 (0.0) (0.5)
CENTURION ACQUIS ALF US 0.5 (0.0) (0.5)
CHENIERE ENERGY CQP US 17,497.0 (822.0) (1,845.0)
CHURCHILL CAPITA CCIXU US 0.2 (0.0) -
CHURCHILL CAPITA CCIX US 0.2 (0.0) -
CLIPPER REALTY I CLPR US 1,274.6 (4.7) -
COMMUNITY HEALTH CYH US 14,411.0 (879.0) 1,027.0
COMPOSECURE IN-A CMPO US 213.6 (197.4) 108.4
CONSENSUS CLOUD CCSI US 620.8 (151.8) 24.5
CONTANGO ORE INC CTGO US 66.2 (34.0) (23.7)
COOPER-STANDARD CPS US 1,767.0 (160.9) 218.9
CORE SCIENTIFIC CORZ US 814.0 (318.5) 5.2
CPI CARD GROUP I PMTS US 319.8 (48.5) 106.9
CROSSAMERICA PAR CAPL US 1,179.5 (1.8) (36.6)
CYTOKINETICS INC CYTK US 808.1 (396.2) 549.8
DAY ONE BIOPHARM DAWN US 400.4 (525.4) 296.2
DELEK LOGISTICS DKL US 1,654.4 (42.5) 48.3
DELL TECHN-C DELL US 80,190.0 (2,723.0) (13,107.0)
DENNY'S CORP DENN US 459.9 (53.2) (60.9)
DIGITALOCEAN HOL DOCN US 1,485.6 (286.1) 326.9
DINE BRANDS GLOB DIN US 1,695.2 (244.8) (92.8)
DOMINO'S PIZZA DPZ US 1,856.0 (3,891.1) 478.3
DOMO INC- CL B DOMO US 204.4 (163.5) (94.0)
DROPBOX INC-A DBX US 2,797.7 (277.2) 172.4
EMBECTA CORP EMBC US 1,199.6 (769.6) 399.6
ETSY INC ETSY US 2,448.1 (635.0) 794.5
EXCO RESOURCES EXCE US 1,032.7 (1,026.5) (421.2)
FAIR ISAAC CORP FICO US 1,708.8 (829.3) 293.9
FERRELLGAS PAR-B FGPRB US 1,487.7 (262.7) 148.3
FERRELLGAS-LP FGPR US 1,487.7 (262.7) 148.3
FOGHORN THERAPEU FHTX US 255.0 (97.5) 159.5
FORTINET INC FTNT US 7,662.1 (137.5) 759.3
GCM GROSVENOR-A GCMG US 497.3 (100.9) 84.5
GCT SEMICONDUCTO GCTS US 35.8 (62.4) (39.8)
GOAL ACQUISITION PUCKU US 4.0 (10.4) (12.7)
GOOSEHEAD INSU-A GSHD US 338.2 (19.7) 6.3
GP-ACT III ACQUI GPATU US 1.3 (0.2) (1.2)
GP-ACT III ACQUI GPAT US 1.3 (0.2) (1.2)
GRAF GLOBAL CORP GRAF/U US 0.1 (0.2) (0.2)
GRINDR INC GRND US 437.7 (22.0) 5.4
H&R BLOCK INC HRB US 3,213.3 (129.8) 21.8
HAWAIIAN HOLDING HA US 4,242.8 (105.5) 155.0
HERBALIFE LTD HLF US 2,602.2 (1,037.2) 237.6
HILTON WORLDWIDE HLT US 15,932.0 (2,817.0) (591.0)
HP INC HPQ US 37,433.0 (916.0) (6,246.0)
ILEARNINGENGINES AILE US 111.8 (47.1) 39.8
IMMUNITYBIO INC IBRX US 400.7 (691.0) 142.0
INHIBRX BI INBX US 28.2 (10.8) (24.2)
INSEEGO CORP INSG US 122.1 (105.6) 3.6
INSMED INC INSM US 1,159.1 (464.8) 337.9
INSPIRED ENTERTA INSE US 331.1 (81.2) 50.0
INTUITIVE MACHIN LUNR US 170.8 (43.9) 10.9
IRONWOOD PHARMAC IRWD US 438.8 (330.5) (44.3)
JACK IN THE BOX JACK US 2,899.0 (702.6) (245.4)
LINDBLAD EXPEDIT LIND US 868.0 (116.5) (71.0)
LIONS GATE ENT-B LGF/B US 7,092.7 (187.2) (2,528.6)
LIONS GATE-A LGF/A US 7,092.7 (187.2) (2,528.6)
LOWE'S COS INC LOW US 45,365.0 (14,606.0) 3,244.0
MADISON SQUARE G MSGS US 1,388.5 (294.0) (275.9)
MADISON SQUARE G MSGE US 1,458.6 (94.6) (295.0)
MANNKIND CORP MNKD US 480.9 (230.0) 283.2
MARBLEGATE ACQ-A GATE US 7.1 (15.4) (0.3)
MARBLEGATE ACQUI GATEU US 7.1 (15.4) (0.3)
MARRIOTT INTL-A MAR US 25,740.0 (2,091.0) (4,783.0)
MARTIN MIDSTREAM MMLP US 535.1 (57.9) 26.3
MATCH GROUP INC MTCH US 4,368.9 (130.1) 773.6
MBIA INC MBI US 2,488.0 (1,723.0) -
MCDONALDS CORP MCD US 53,513.0 (4,833.0) (829.0)
MCKESSON CORP MCK US 67,443.0 (1,599.0) (4,387.0)
MEDIAALPHA INC-A MAX US 153.0 (89.4) (0.7)
METTLER-TOLEDO MTD US 3,283.1 (158.7) 79.2
MSCI INC MSCI US 5,456.8 (734.5) (61.4)
NATHANS FAMOUS NATH US 48.9 (32.9) 23.2
NEW ENG RLTY-LP NEN US 381.2 (69.0) -
NOVAGOLD RES NG CN 121.6 (27.5) 110.1
NOVAGOLD RES NG US 121.6 (27.5) 110.1
NOVAVAX INC NVAX US 1,353.5 (867.1) (77.3)
NUTANIX INC - A NTNX US 2,774.9 (619.5) 955.7
O'REILLY AUTOMOT ORLY US 14,393.2 (1,583.4) (2,443.7)
OMEROS CORP OMER US 437.5 (71.3) 221.9
OTIS WORLDWI OTIS US 9,858.0 (4,882.0) (1,657.0)
OUTLOOK THERAPEU OTLK US 59.0 (134.2) 3.7
PAPA JOHN'S INTL PZZA US 847.2 (445.5) (56.7)
PELOTON INTERA-A PTON US 2,408.5 (590.4) 675.5
PHATHOM PHARMACE PHAT US 356.5 (148.5) 296.9
PHILIP MORRIS IN PM US 65,782.0 (7,942.0) (1,388.0)
PITNEY BOWES INC PBI US 4,103.0 (392.4) (43.3)
PLANET FITNESS-A PLNT US 2,992.8 (99.2) 274.3
PROS HOLDINGS IN PRO US 384.9 (83.0) 36.2
PTC THERAPEUTICS PTCT US 1,789.6 (893.9) 594.2
RAPID7 INC RPD US 1,488.5 (86.4) 101.8
RDE INC RSTN US 1.8 (3.2) (4.0)
RE/MAX HOLDINGS RMAX US 566.7 (77.9) 30.9
REALREAL INC/THE REAL US 431.6 (327.1) 31.6
REDFIN CORP RDFN US 1,071.1 (5.8) 93.8
REVANCE THERAPEU RVNC US 508.1 (98.7) 300.8
RH RH US 4,186.5 (289.9) 179.5
RIGEL PHARMACEUT RIGL US 126.5 (31.7) 19.3
RINGCENTRAL IN-A RNG US 1,831.8 (328.8) 66.5
RMG ACQUISITION RMGUF US 7.0 (11.0) (7.5)
RMG ACQUISITION RMGCF US 7.0 (11.0) (7.5)
RUBRIK INC-A RBRK US 1,166.4 (514.6) 114.9
SABRE CORP SABR US 4,666.4 (1,476.9) 80.5
SBA COMM CORP SBAC US 9,786.2 (5,275.9) (1,999.6)
SCOTTS MIRACLE SMG US 3,489.3 (146.2) 684.0
SEAGATE TECHNOLO STX US 7,739.0 (1,491.0) 233.0
SEMTECH CORP SMTC US 1,376.5 (313.1) 314.4
SERVE ROBOTICS I SERV US 4.2 (8.8) (9.8)
SIM ACQUISITION SIMAU US 0.1 (0.0) (0.1)
SIRIUS XM HOLDIN SIRI US 11,185.0 (2,113.0) (1,458.0)
SIX FLAGS ENTERT FUN US 2,264.3 (730.9) (234.1)
SLEEP NUMBER COR SNBR US 883.6 (447.0) (723.2)
SOLARMAX TECHNOL SMXT US 54.7 (0.6) (9.1)
SPECTRAL CAPITAL FCCN US 0.0 (0.4) (0.4)
SPIRIT AEROSYS-A SPR US 6,764.5 (1,113.8) 1,240.5
SQUARESPACE IN-A SQSP US 965.5 (266.3) (183.6)
STARBUCKS CORP SBUX US 30,111.8 (7,937.4) (841.6)
STARDUST POWER I SDST US 20.3 (1.2) (9.9)
SYMBOTIC INC SYM US 1,558.4 379.3 323.2
SYNDAX PHARMACEU SNDX US 476.9 (608.5) 403.6
TEMPUS AI INC TEM US 469.3 (339.6) 57.0
TORRID HOLDINGS CURV US 479.7 (198.6) (40.0)
TPI COMPOSITES I TPIC US 745.9 (184.1) 70.6
TRANSDIGM GROUP TDG US 21,577.0 (3,022.0) 6,047.0
TRAVEL + LEISURE TNL US 6,693.0 (884.0) 675.0
TRISALUS LIFE SC TLSI US 17.9 (34.9) (1.2)
TRIUMPH GROUP TGI US 1,686.3 (104.4) 583.1
TRULEUM INC TRLM US 2.0 (3.0) (3.6)
TUCOWS INC-A TC CN 780.3 (15.9) 5.7
TUCOWS INC-A TCX US 780.3 (15.9) 5.7
UNISYS CORP UIS US 1,890.5 (144.8) 330.1
UNITED HOMES GRO UHG US 287.2 (4.7) 179.5
UNITED PARKS & R PRKS US 2,669.2 (243.1) (113.0)
UNITI GROUP INC UNIT US 4,984.6 (2,477.5) -
UROGEN PHARMA LT URGN US 200.6 (40.1) 170.4
VECTOR GROUP LTD VGR US 1,017.3 (739.1) 376.8
VERISIGN INC VRSN US 1,505.1 (1,816.4) (430.1)
WAYFAIR INC- A W US 3,436.0 (2,760.0) (385.0)
WINGSTOP INC WING US 451.8 (437.5) 78.3
WINMARK CORP WINA US 44.7 (42.2) 21.5
WORKIVA INC WK US 1,242.7 (77.7) 426.2
WPF HOLDINGS INC WPFH US 0.0 (0.3) (0.3)
WYNN RESORTS LTD WYNN US 13,470.7 (946.4) 1,137.8
XPONENTIAL FIT-A XPOF US 475.2 (100.8) (6.1)
YELLOW CORP YELLQ US 2,147.6 (447.8) (1,098.0)
YUM! BRANDS INC YUM US 6,224.0 (7,756.0) 586.0
*********
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
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Each Tuesday edition of the TCR contains a list of companies with
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then-ending.
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