/raid1/www/Hosts/bankrupt/TCR_Public/241011.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Friday, October 11, 2024, Vol. 28, No. 284
Headlines
150 SKILLMAN: Case Summary & One Unsecured Creditor
1818 OGDEN SUMMIT: Sec. 341(a) Meeting of Creditors on Nov. 5
373 ROUTE 22 EAST REALTY: Files for Chapter 11 Bankruptcy
3839 N BRAESWOOD: Seeks Chapter 11 Bankruptcy Protection
8TH AVENUE: S&P Downgrades ICR to 'CCC' on Looming Maturities
ACCURIDE CORP: Files for Chapter 11 with Support from Lenders
ACCURIDE CORPORATION: Case Summary & 30 Top Unsecured Creditors
AFAKORI INC: Case Summary & 12 Unsecured Creditors
AGEAGLE AERIAL: To Execute 1-for-50 Reverse Stock Split on Oct. 14
AMERICA-CV: Court Dismisses Clawback Suit Against Mediaset
ASSETS4LIFE LLC: Files for Chapter 11 Bankruptcy
AVANTE HEALTH: Files Chapter 11, Sells Assets to Staple Street
BARNES GROUP: S&P Places 'BB' ICR on CreditWatch Negative
BEYOND AIR: Avenue Venture, Affiliates Disclose Equity Stakes
BIOLASE INC: Sonendo Enters Asset Purchase Agreement for $14-Mil.
BITTREX INC: Ghader Case Withdrawn from Mediation
BYJU'S ALPHA: Units Ask DIP Funding to U.S. Lender Group
CABLE & WIRELESS: $1BB Upsized Notes No Impact on Moody's Ba3 CFR
CACI INT'L: Moody's Rates New First Lien Term Loan Due 2031 'Ba1'
CARROTHERS INSPECTION: Court Approves Use of Cash Collateral
CHAMPIONS ONCOLOGY: Mourns Loss of President Brady Davis
CLEAN ENERGY: Issues $150K Convertible Note to Diagonal Lending
COAT CHECK: U.S. Trustee Unable to Appoint Committee
CORONET CERAMICS INC: Kicks Off Subchapter V Bankruptcy Process
CSTL 2024-GATE: Fitch Assigns 'BB-(EXP)sf' Rating on Cl. HRR Certs
CULLOO ENTERTAINMENT: Commences Subchapter V Bankruptcy Process
CYANOTECH CORP: Michael Davis Holds 25% Stake as of October 1
DIAMOND G INSPECTION: Case Summary & 20 Top Unsecured Creditors
DISTRICT 5 BOUTIQUE: Unsecureds to Get $60K per Year for 5 Years
DREAM FINDERS: Fitch Alters Outlook on BB- LongTerm IDR to Positive
E-Z ROLL CASTERS INC: Files for Chapter 11 Bankruptcy
EDWARDS PETROLEUM: Commences Subchapter V Bankruptcy
ENVIVA INC: Posts $685.8 Million Net Loss in FY 2023
EVOFEM BIOSCIENCES: Amends Merger Deal, Closes Private Placement
EVOFEM BIOSCIENCES: Receives Notice of Default From Future Pak
FAIRFIELD SENTRY: UBS Loses Bid to Dismiss 5th Amended Complaint
FAMILY SOLUTIONS: Bankr. Administrator Unable to Appoint Committee
FFAH CARVER: S&P Affirms 'B+' Rating on 2013A Revenue Bonds
FREE SPEECH: Auction for Alex Jones' Infowars Assets Set for Nov. 8
GA VIEWS: Case Summary & 19 Unsecured Creditors
GENCANNA GLOBAL: Buyer's Breach of Fiduciary Duty Claim Tossed
GLOBAL SOURCING: Court Allows $3,765 in Accountant Fees
GOEROE'S GOLDENS: Amended Plan Resolves NuBridge Claim Issues
GOODLIFE PHYSICAL: No Patient Care Complaints, 9th PCO Report Says
GOODLIFE PHYSICAL: No Patient Care Concern, 8th PCO Report Says
GRITSTONE BIO: Case Summary & 20 Largest Unsecured Creditors
GRITSTONE BIO: Files for Chapter 11 Bankruptcy
GUESTWISER VENTURE 1: Kicks Off Chapter 11 Bankruptcy
HEALTHCARE AT COLLEGE: No Decline in Resident Care, PCO Report Says
HERITAGE COLLEGIATE: Elemental's Cash Collateral Objection Nixed
HIGH RIDGE: $820,000 Clawback Suit v Colgate Goes to Trial
HOLLYWOOD LOFTS: Updates Unsecureds & DIP Lender Secured Claims Pay
HURON ACADEMY: Moody's Rates New Series 2024 Revenue Bonds 'Ba1'
IDEAL PROPERTY: U.S. Trustee Appoints Creditors' Committee
JD WIDEMAN: Gets Interim OK to Use Cash Collateral Until Oct. 30
KIMO TILE: Case Summary & Nine Unsecured Creditors
LAMB WESTON: S&P Affirms 'BB+' ICR on Restructuring Announcement
LAVIE CARE: No Resident Care Concern, PCO Report Says
LIQUIDATING SUPPLY: Unsecureds Will Get 3% to 5% of Claims in Plan
LPG 405 ALBERTO: Case Summary & 10 Unsecured Creditors
LUMEN TECHNOLOGIES: Moody's Rates $439MM First Lien Notes 'Caa2'
MACAR TRANS: Case Summary & 15 Unsecured Creditors
MAGNERA CORP: Moody's Rates New $500MM Secured 1st Lien Notes 'B1'
MARKETING ANALYSTS: Case Summary & 20 Largest Unsecured Creditors
MIDAS GOLD: Net Disposable Income to Fund Plan
MIDCAP FINCO: Fitch Assigns 'BB+' Rating, Outlook Stable
MISSOURI MT HOLDINGS: Sec. 341(a) Meeting of Creditors on Nov. 6
NB CREST: Claims Will be Paid from Property Sale/Refinance
NEVADA COPPER: Completes $128M Asset Sale to Kinterra Affiliate
ONE TABLE RESTAURANT: Gets Court OK for $28M Credit Bid Sale
ORIGINAL HAROLD'S CHICKEN: Seeks Bankruptcy Protection
OUTKAST ELECTRICAL: Court OKs Cash Collateral Access
PATRICK INDUSTRIES: Fitch Assigns 'BB' LongTerm IDR, Outlook Stable
PATRICK INDUSTRIES: Moody's Rates New Senior Unsecured Notes 'B3'
PERIMETER ORTHOPAEDICS: Unsecured Creditors to Split $9K in Plan
PG&E CORP: Court Rules on Objections to PERA & RKS-Related Claims
PINEWOOD CONDOMINIUM: Seeks Chapter 11 Bankruptcy Protection
PINK BASKET: Continued Operations to Fund Plan Payments
POINTCLICKCARE CORP: Moody's Lowers CFR to B3, Outlook Stable
PUERTO RICO: Judge Extends PREPA's Litigation Stay in Bankruptcy
RANCHO FRESCO: Starts Subchapter V Bankruptcy Process
RAZEL & RUZTIN: PCO Raises Patient Care Concerns in Latest Report
REGO PAYMENT: Engages Stephano Slack as New Auditor
ROVER PROPERTIES: Voluntary Chapter 11 Case Summary
SCILEX HOLDING: Provides Prelim. Results for Quarter Ended Sept. 30
SCOTLAND MEADOWS: Hits Chapter 11 Bankruptcy Protection
SEC TRANSPORTATION: Wins Court Nod to Use Cash Collateral
SI GROUP: Represent by Latham & Watkins in Recapitalization
SNEAD AND SONS: Unsecureds to Get 10 Cents on Dollar in Plan
SOLUNA HOLDINGS: Achieves Milestones to Unlock $25M Capital Line
STATEHOUSE HOLDINGS: Files for Bankruptcy, Faces Receivership
STEWARD HEALTH: Aggrieved Patients Want Committee in Chapter 11
STEWARD HEALTH: Appointment of Tort Claimants' Committee Sought
STEWARD HEALTH: Lawrence General Buys Holy Family Hospital for $28M
STEWARD HEALTH: PCO Reports Staffing Challenges
TABOR MANOR: No Decline in Patient Care, PCO Report Says
TAIGA MOTORS: Court OKs CCAA Acquisition by Stewart Wilkinson
TLC MEDICAL: Loses Bid to Reinstate Chapter 11 Case
TMC BUYER: S&P Affirms 'B' ICR on Proposed Refinancing
TOTAL AUTO: Gets Interim OK to Use Cash Collateral Until Nov. 29
TUPPERWARE BRANDS: Charles Schwab Investment No Longer Holds Shares
TUPPERWARE BRANDS: Court Issues Order to Preserve Tax Attributes
TUPPERWARE BRANDS: Engages in More Chapter 11 Talks With Lenders
US LIGHTING: Two Top Execs Step Down
VENUS CONCEPT: Masters Special Situations Holds 8% Stake
VERTEX ENERGY: U.S. Trustee Appoints Creditors' Committee
VIANT MEDICAL: Moody's Raises CFR to B3 & Alters Outlook to Stable
W NORTHFIELD LLC: Seeks Chapter 11 Bankruptcy Protection
WELLPATH HOLDINGS: Moody's Cuts CFR to 'Caa3', Outlook Stable
WORKHORSE GROUP: Fails to Meet Nasdaq Minimum Bid Price Requirement
WORKSPORT LTD: Begins Direct Sales to U.S. Government Agencies
WYNN RESORTS: Subsidiaries Extend Maturity of UOBL Loan to 2027
YIELD10 BIOSCIENCE: Amends Employment Contract to Cut Severance Pay
YIELD10 BIOSCIENCE: Inks $5-Mil. Asset Purchase Deal With Nuseed
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150 SKILLMAN: Case Summary & One Unsecured Creditor
---------------------------------------------------
Debtor: 150 Skillman St LLC
58 Dobbin St
Brooklyn, NY 11222
Chapter 11 Petition Date: October 9, 2024
Court: United States Bankruptcy Court
Eastern District of New York
Case No.: 24-44210
Judge: Hon. Nancy Hershey Lord
Debtor's Counsel: Linda Tirelli, Esq.
TIRELLE LAW GROUP, LLC
50 Main Street
Suite 1265
White Plains, NY 10606
Tel: 914-732-3222
Fax: 914-517-2696
Email: LTirelli@tirellilawgroup.com
Estimated Assets: $0 to $50,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Henrick Weiss as sole member.
The Debtor listed 58 Dobbin Funding LP c/o Skybrook Capital LLC
999 Central Ave., Suite 302, Woodmere, NY as its sole unsecured
creditor holding a claim of $5.81 million.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/4IOGDKI/150_Skillman_St_LLC__nyebke-24-44210__0001.0.pdf?mcid=tGE4TAMA
1818 OGDEN SUMMIT: Sec. 341(a) Meeting of Creditors on Nov. 5
-------------------------------------------------------------
1818 Ogden Summit LLC filed Chapter 11 protection in the Central
District of California. According to court filing, the Debtor
reports $19,184,080 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
November 5, 2024 at 8:30 a.m. at UST-LA2, TELEPHONIC MEETING.
CONFERENCE LINE:1-866-816-0394, PARTICIPANT CODE: 5282999.
About 1818 Ogden Summit LLC
1818 Ogden Summit LLC owns a project for a new six-story 90-unit
condominium building located at 1814 & 1820 Ogden Drive,
Burlingame, CA, valued at $30 million.
1818 Ogden Summit LLC sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. C.D. Cal. Case No. 24-18055) on October 1,
2024. In the petition filed by Dongliang Zhang, as managing member,
the Debtor reports total assets of $30,000,046 and total
liabilities of $19,184,080.
The Honorable Bankruptcy Judge Barry Russell handles the case.
The Debtor is represented by:
Michael Jay Berger, Esq.
LAW OFFICES OF MICHAEL JAY BERGER
9454 Wilshire Boulevard, 6th Floor
Beverly Hills, CA 90212
Tel: (310) 271-6223
Fax: (310) 271-9805
Email: michael.berger@bankruptcypower.com
373 ROUTE 22 EAST REALTY: Files for Chapter 11 Bankruptcy
---------------------------------------------------------
373 Route 22 East Realty LLC filed for Chapter 11 protection in the
Eastern District of New York. According to court filing, the Debtor
reports between $1 million and $10 million in debt owed to 1 and 49
creditors. The petition states funds will be available to unsecured
creditors.
About 373 Route 22 East Realty LLC
373 Route 22 East Realty LLC is a limited liability company.
373 Route 22 East Realty LLC sought relief under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. E.D.N.Y. Case No. 24-44149) on October
4, 2024. In the petition filed by Yuriy Mirgorodskiy, as managing
member, the Debtor reports estimated assets and liabilities between
$1 million and $10 million each.
The Honorable Bankruptcy Judge Jil Mazer-Marino handles the case.
The Debtor is represented by:
Ilevu Yakubov, Esq.
Jacobs PC
8589 67 Avenue
Rego Park, NY 11374
3839 N BRAESWOOD: Seeks Chapter 11 Bankruptcy Protection
--------------------------------------------------------
3839 N Braeswood Development LLC filed Chapter 11 protection in the
Southern District of Texas. 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
November 7, 2024 at 10:00 a.m., US Trustee Houston Teleconference.
About 3839 N Braeswood Development LLC
3839 N Braeswood Development LLC is a Single Asset Real Estate
debtor (as defined in 11 U.S.C. Section 101(51B)).
3839 N Braeswood Development LLC sought relief under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. S.D. Case No. 24-34634) on October
1, 2024. In the petition filed by Romy Solanji, as managing member,
the Debtor reports estimated assets and liabilities between $1
million and $10 million each.
The Debtor is represented by:
Thomas F. Jones, III, Esq.
LAW OFFICE OF THOMAS F. JONES III
PO Box 570783
Houston TX 77257-0783
Tel: (832) 398-6182
Email: tfjonesiii@gmail.com
8TH AVENUE: S&P Downgrades ICR to 'CCC' on Looming Maturities
-------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on U.S.-based
private label food manufacturer 8th Avenue Food & Provisions Inc.
to 'CCC' from 'CCC+'. At the same time, S&P lowered its issue-level
ratings on the company's revolver and first-lien term loan to 'CCC'
from 'CCC+' and the second-lien term loan to 'CC' from 'CCC-'. The
recovery ratings remain '3' on the first-lien senior secured
facilities and '6' on the second-lien term loan.
The negative outlook reflects that S&P could lower its ratings
within the next six months if 8th Avenue does not address its
upcoming maturities, including the revolver and first-lien term
loan, or if it pursues strategic alternatives to refinancing its
capital structure in a manner we view as tantamount to a default.
8th Avenue faces heightened refinancing risk from near-term debt
maturities. Its $100 million revolver matures on March 31, 2025
($25 million outstanding as of June 30, 2024), followed closely by
its $650 million first-lien term loan maturing on Oct. 1, 2025
($618 million outstanding). The company's liquidity position will
be strained over the next few quarters because it will need to
repay outstanding balances on the revolver and first-lien term loan
absent a refinancing. Further, 8th Avenue's S&P Global
Ratings-adjusted leverage is very high, 13.1x as of June 30, which
may make it more challenging to refinance its capital structure
with the same quantum of debt.
S&P said, "Our measure of adjusted leverage includes $471 million
in payment-in-kind preferred equity as of June 30. We understand
that 8th Avenue is working to address its capital structure.
However, it may take some time to finalize a deal given the
company's weak credit metrics and high interest rates.
"We believe promotional activity and productivity initiatives will
improve 8th Avenue's profitability, though not enough to alleviate
liquidity challenges over the next 12 months. The company's pasta
segment volumes continued to decline in the third quarter of fiscal
2024 due to distribution losses and fewer promotions. Given ongoing
revenue softness, we expect the company to increase promotional
activity to drive volume growth. We also expect the company to
realize incremental cost savings from plant, logistics, and network
optimization. We project these actions will improve S&P Global
Ratings-adjusted leverage to about 11.5x in fiscal 2025, not
sufficient to turn free operating cash flow (FOCF) positive within
the next 12 months. We continue to expect the company will face
annual cash interest expense of about $85 million in fiscal 2025,
about $25 million of capital expenditure (capex), some working
capital usage, and about $7 million of annual debt amortization.
Based on these assumptions, we project a cash flow deficit after
debt service in fiscal years 2024 and 2025.
"Our rating on 8th Avenue does not include uplift from its status
as a majority-owned subsidiary of Post Holdings Inc. because we
view the investment as nonstrategic. Post does not guarantee 8th
Avenue's debt, and our base-case expectation has been that Post
would not support it during stress. Nevertheless, we recognize the
possibility that Post or minority sponsor owners Thomas H. Lee
Partners and Harvest Partners could consider contributing cash if
8th Avenue had an immediate liquidity need, but neither party has
contributed additional equity since their original investments in
2018. Post has a holding-company operating model whereby it
regularly buys and sells assets.
"The negative outlook reflects the possibility that we could lower
our ratings within the next six months if the company does not
address its upcoming maturities, including the revolver and
first-lien term loan, or if it pursues a debt recapitalization in a
manner we view as tantamount to a default."
S&P could lower its rating on 8th Avenue if S&P envisions a default
scenario in the subsequent six months. This could happen if:
-- S&P does not believe the company will refinance its maturities
over the next few months;
-- It enters into a distressed exchange or debt restructuring S&P
deems a default; or
-- Operating performance deteriorates and depletes liquidity
sources.
S&P could take a positive rating action if 8th Avenue:
-- Refinances its capital structure; and
-- Improves operating performance and liquidity such that S&P no
longer envisions a specific default scenario within the next 12
months.
ACCURIDE CORP: Files for Chapter 11 with Support from Lenders
-------------------------------------------------------------
Accuride Corp. and its U.S. entities filed voluntary petitions for
protection under Chapter 11 of the U.S. Bankruptcy Code on Oct. 9,
2024, after reaching agreement with its lenders to restructure its
North American business.
Accuride's Canadian entity commenced a proceeding under the
Companies' Creditors Arrangement Act.
Accuride's Mexican, European, and Asian subsidiaries are not
included in these filings.
The Company said the restructuring will enhance operational
efficiency and significantly reduce the company's funded debt
The proposed restructuring, the result of extended negotiations
with its lenders, will facilitate economic improvements for
operations and significantly reduce funded debt from Accuride's
balance sheet.
All plants will continue to operate "business as usual."
With this agreement, Accuride is hopeful it will be able to emerge
from bankruptcy on an expedited basis, anticipated to be 90-100
days from filing, with a confirmed plan of reorganization.
As of the Petition Date, the Debtors have approximately $485
million in total third-party funded debt obligations.
$103-Mil. DIP Loan
Over the last several years, the Debtors' business performance has
suffered despite steady growth and a significantly expanded product
and geographic footprint. Supply chain distortions and a steep
rise in the cost of several key inputs for the Debtors' products
stressed their cost structure. At the same time,
slower-than-anticipated integration of Mefro and
longer-than-expected "new business" holds placed on Mefro by
potential customers left the Debtors covering liquidity shortfalls
in AWEA. In addition, the Debtors' Wheel Ends business has
underperformed, and non-Debtor Accuride Canada's plant in London,
Ontario, has failed to reach profitability on a standalone basis,
despite the Debtors and their affiliates' efforts. These pressures
depleted liquidity and demanded the Debtors' attention, preventing
the Debtors from investing in continued growth.
The Debtors, with the assistance of Perella Weinberg Partners,
launched a marketing process in early August 2024 to engage
potential interested parties concerning a significant investment in
or purchase of some or all of the Debtors' or non-Debtor
affiliates' assets.
The existing bids have not generated sufficient value to present an
attractive opportunity to transact. The Debtors and an ad hoc group
of the Debtors' first lien term loan lenders have therefore pivoted
to negotiation of a standalone restructuring transaction, which has
culminated in an agreement on the terms of a consensual
restructuring of the Debtors' indebtedness. The Debtors intend to
use these chapter 11 cases to expeditiously proceed to solicitation
of votes on and confirmation of a chapter 11 plan. The Debtors will
also consider any additional third-party bids that emerge, whether
for all or part of the Debtors, or their non-Debtor affiliates,
assets or business units. The terms of the Debtors' agreement with
the Ad Hoc Group preserves flexibility for the Debtors to, in the
exercise of their fiduciary duties, pursue higher or otherwise
better proposals than the contemplated transaction.
Over the past several months, the Debtors have pursued various
alternatives to address near-term liquidity and operational
difficulties and file these chapter 11 cases with the support of
the term loan lenders, ABL lenders, and equity sponsors.
Critically, the Debtors secured commitments from the Ad Hoc Group
to provide a $103 million senior secured superpriority term loan
facility and negotiated consensual access to cash collateral with
the Ad Hoc Group and the prepetition ABL lenders. The Debtors also
have agreed with the Ad Hoc Group on the framework, memorialized in
a restructuring term sheet, for a consensual restructuring of the
Debtors' indebtedness on a quick and value-maximizing timeline.
Specifically, the Debtors anticipate implementing a deleveraging
restructuring transaction via an equitization of their prepetition
term loan obligations and raising incremental exit financing from
the Ad Hoc Group to fund the go-forward business upon emergence.
The Debtors anticipate pursuing confirmation and consummation of
the deleveraging restructuring transaction through a plan of
reorganization before the end of the year. To keep with this
timeline, the Debtors expect to file a plan and disclosure
statement with the support of the lenders in the first 25 days of
the case.
About Accuride Corporation
Accuride Corporation and its affiliates are a global leader in
steel and aluminum wheels and wheel-end components and assemblies,
supplying innovative products to over 1,000 customers in the
commercial vehicles, passenger cars, agriculture, construction and
industrial equipment markets.
Headquartered in Livonia, Michigan, the Debtors are part of a
global enterprise that employs approximately 3,600 individuals at
facilities in the United States, Canada, Mexico, Germany, France,
Turkey, Russia, and China.
On Oct. 9, 2024, Accuride Corp. and its U.S. entities filed
voluntary petitions for protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Del. Lead Case No. 24-12289).
Accuride reported $500 million to $1 billion in assets and
liabilities as of the bankruptcy filing.
The Debtors tapped KIRKLAND & ELLIS LLP as bankruptcy counsel,
YOUNG CONAWAY STARGATT & TAYLOR, LLP, as local bankruptcy counsel,
and PERELLA WEINBERG PARTNERS LP as investment banker. ALVAREZ &
MARSAL NORTH AMERICA, LLC, is the CRO provider. OMNI AGENT
SOLUTIONS is the claims agent.
Accuride's U.S. entities first filed for Chapter 11 protection in
October 2009, also in Delaware, to restructure in excess of $675
million in debt. The Court confirmed the Company's Plan of
Reorganization in February 2010.
ACCURIDE CORPORATION: Case Summary & 30 Top Unsecured Creditors
---------------------------------------------------------------
Lead Debtor: Accuride Corporation
38777 Six Mile Road, Suite 410
Livonia MI 48152
Business Description: The Debtors, together with their non-Debtor
affiliates, are a global leader in steel
and aluminum wheels and wheel-end components
and assemblies, supplying innovative
products to over 1,000 customers in the
commercial vehicles, passenger cars,
agriculture, construction and industrial
equipment markets. Headquartered in
Livonia, Michigan, the Debtors are part of
a global enterprise that employs
approximately 3,600 individuals at
facilities in the United States, Canada,
Mexico, Germany, France, Turkey, Russia, and
China.
Chapter 11 Petition Date: October 9, 2024
Court: United States Bankruptcy Court
District of Delaware
Sixteen affiliates that concurrently filed voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code:
Debtor Case No.
------ --------
Accuride Corporation (Lead Debtor) 24-12289
Accuride Group Holdings Inc. 24-12290
Accuride Intermediate Co., Inc. 24-12291
Armor Parent Corp. 24-12292
Accuride Distributing, LLC 24-12293
Accuride EMI, LLC 24-12294
Accuride Erie, L.P. 24-12295
Accuride Henderson Limited Liability Company 24-12296
AKW General Partner, L.L.C. 24-12297
AOT, LLC 24-12298
Bostrom Holdings, Inc. 24-12299
Bostrom Seating, Inc. 24-12300
Gunite Corporation 24-12301
KIC LLC 24-12302
Transportation Technologies Industries, Inc. 24-12303
Truck Components, Inc. 24-12304
Judge: TBD
Debtors'
Local
Bankruptcy
Counsel: Joseph Barry, Esq.
Kenneth J. Enos, Esq.
Jared W. Kochenash, Esq.
Andrew A. Mark, Esq.
YOUNG CONAWAY STARGATT & TAYLOR, LLP
Rodney Square
1000 North King Street
Wilmington, Delaware 19801
Tel: (302) 571-6600
Fax: (302) 571-1253
Email: jbarry@ycst.com
kenos@ycst.com
jkochenash@ycst.com
amark@ycst.com
Debtors'
Bankruptcy
Counsel: Ryan Blaine Bennett, P.C.
Alexander D. McCammon, Esq.
KIRKLAND & ELLIS LLP
KIRKLAND & ELLIS INTERNATIONAL LLP
333 West Wolf Point Plaza
Chicago, Illinois 60654
Tel: (312) 862-2000
Fax: (312) 862-2200
Email: ryan.bennett@kirkland.com
alex.mccammon@kirkland.com
- and -
Derek I. Hunter, Esq.
601 Lexington Avenue
New York, New York 10022
Tel: (212) 446-4800
Fax: (212) 446-4900
Email: derek.hunter@kirkland.com
Debtors'
Investment
Banker: PERELLA WEINBERG PARTNERS LP
Debtors'
CRO Provider: ALVAREZ & MARSAL NORTH AMERICA, LLC
Debtors'
Claims/
Noticing
Agent: OMNI AGENT SOLUTIONS
Estimated Assets
(on a consolidated basis): $500 million to $1 billion
Estimated Liabilities
(on a consolidated basis): $500 million to $1 billion
The petitions were signed by Charles M. Moore as chief
restructuring officer.
A full-text copy of the Lead Debtor's petition is available for
free at PacerMonitor.com at:
https://www.pacermonitor.com/view/X6IGM7Y/Accuride_Corporation__debke-24-12289__0001.0.pdf?mcid=tGE4TAMA
Consolidated List of Debtors' 30 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
1. Matalco Inc. - Division of Trade Payables $22,785,608
Giampaolo Group
850 Intermodal Drive
Brampton, ON L6T 0B5
Canada
Attn: Chris Galifi
Title: Chief Executive Officer
Phone: (905) 790-2511
Email: cgalifi@gg-inc.ca
2. Zhumadian Cimc Huajun Trade Payables $12,573,286
Casting Co, Ltd
West Section Of Xuesong Rd
Zhumadian City, H, 518067
China
Attn: Mr. Li Shijie
Title: General Manager
Phone: 86.15139675866
Email: Shije.li@cimc.com
3. Trailer Master Cvs Inc/ Trade Payables $7,244,689
Panasia Logistics
No 24, Mangniuhe St
Kazuo, Liaoning, 122304
China
Attn: Mr. Yang Naiyi
Title: Chief Executive Officer
Phone: 86.13901008953
Email: yangnaiyi@trailer-master.com
4. Ternium Mexico, SA De CV Trade Payables $6,514,772
Ave. Universidad No. 992 Cuauhtemoc
San Nicolas De Los G, 66450
Mexico
Attn: Maximo Vedoya
Title: Chief Executive Officer
Phone: (52) 81 8865-2828
Email: mvedoya@me.com
5. Hydro Aluminum Metals USA, LLC Litigation & $4,088,686
1500 Whetstone Way Trade Payables
Baltimore, MD 21230
United States
Attn: Anne-Lene Midseim
Title: Executive Vice President for Compliance, IP
and General Counsel
Phone: (443) 835-3133
Email: anne-lene.midseim@hydro.com
6. Heidtman Steel Products Inc Trade Payables $3,807,763
135 Fearing Blvd
Toledo, OH 43609
United States
Attn: Tim Berra
Title: President
Phone: (618) 451-0052
Email: tim.berra@heidtman.com
7. Ellwood Aluminum Trade Payables $3,715,327
7158 Hubbard-Masury Road
Hubbard, OH 44425
United States
Attn: Pat Callihan
Title: President
Phone: (330) 534-8668
Email: easales@elwd.com
8. Behr Iron and Metal, Trade Payables $2,286,907
an Alter Company
1100 Seminary St
Rockford, IL 61104
United States
Attn: Lisa Walden
Title: Chief Financial Officer
Phone: 314.872.2422
Email: lisa.walden@altertrading.com
9. Shandong Juncheng Trade Payables $2,272,309
Metal Technology Co., Ltd
West Of Chiyu Road,
South Of Beihuan Road, Xinfa Street
Shandong Province, Shandong, 252100
China
Attn: Mr. Sun Pu
Title: Chief Executive Officer
Phone: 86.15969601888
Email: sun@xinfawheels.com
10. BUYUK EKER BIJON Trade Payables $1,855,296
SANAYI VE TICARET A.S.
Kosb 9. Sokak No:29, Selcuklu, 42050
Konya, 42, 42050
Turkey
Attn: Mr. Ali Eker
Title: Owner
Phone: 90.332239144
Email: alieker@ekerbijon.com.tr
11. Worthington Steel Co Trade Payables $1,851,409
350 Lawton Ave
Monroe, OH 45050
United States
Attn: Geoff G. Gilmore
Title: President and Chief Executive Officer
Phone: (800) 944-3733
Email: geoff.gilmore@worthingtonindustries.com
12. CH Robinson Trade Payables $1,423,275
PO Box 9121
Minneapolis, MN 55480
United States
Attn: David Bozeman
Title: Chief Executive Officer
Phone: (952) 937-8500
Email: dave.bozeman@chrobinson.com
13. Stonebriar Finance Holdings LLC Trade Payables $1,350,337
5601 Granite Parkway Suite 1350
Plano, TX 75024
United States
Attn: Dave Fate
Title: Chief Executive Officer
Phone: (469) 609-8500
Email: dave.fate@stonebriarcf.com
14. Cimco Resources Inc Trade Payables $1,275,144
PO Box 15427
Loves Park, IL 61111
United States
Attn: John Gralewski
Title: Chief Executive Officer
Phone: (815) 986-7211
Email: john@cimcoresources.com
15. Sherwin-Williams Company Trade Payables $1,149,670
101 Prospect Avenue NW
Cleveland, OH 44115
United States
Attn: Jason Bolz
Title: VP North America Sales
Phone: (270) 826-3396
Email: Jason.bolz@sherwin.com
16. Workday Inc Trade Payables $1,138,073
6230 Stoneridge Mall Road
Pleasanton, CA 94588
United States
Attn: Carl M. Eschenbach
Title: Chief Executive Officer
Phone: 650-427-1000
Email: carl.eschenbach@workday.com
17. Roysters Machine Shop LLC Trade Payables $1,111,438
215 U.S. 41 South P.O. Box 1199
Henderson, KY 42420
United States
Attn: R. Michael Royster
Title: President
Phone: (270) 826-3396
Email: mwr@roystersmachine.com
18. Motion Industries Inc Trade Payables $1,089,869
2544 Mjm Industrial Dr
Evansville, IN 47715
United States
Attn: Will Stengel
Title: President and Chief Executive Officer
Phone: (678) 934-5000
Email: will.stengel@motionindustries.com
19. C Thorrez Industries Inc Trade Payables $1,057,788
4909 W Michigan Ave
Jackson, MI 49201
United States
Attn: Michael Thorrez
Title: President
Phone: (517) 750-3160
Email: mlt@thorrez.com
20. AG Net Lease IV(US) Holdco LLC Rent $1,036,984
c/o Angelo, Gordon & Co., L.P.
245 Park Avenue, 24th Floor
New York, NY 10167-0094
United States
Attn: Gordon J. Whiting
Title: Co-Head of Net Lease Real Estate
Phone: (212) 883-4157
Fax: (212) 883-4141
Email: GWhiting@angelogordon.com
21. Allied Mineral Products Inc Trade Payables $698,789
2700 Scioto Parkway
Columbus, OH 43215
United States
Attn: Paul Jamieson
Title: President and Chief Executive Officer
Phone: (614) 876-0244
Email: pdj@alliedmin.com
22. Advanced Crane Technicians Trade Payables $698,101
12516 Patterson Road
Durand, IL 61024
United States
Attn: Deeter Meier
Title: President
Phone: (815) 248-4270
Email: dmeier@advanced-crane.com
23. Shandong Haoxin Co.,Ltd. Trade Payables $697,059
Weizi Town
Changyi City, Shandong, 261041
China
Attn: Mr. Jin Zhenwhei
Title: General Manager
Phone: 86.13506479966
Email: jinzhenwei@haoxingroup.com
24. Steel Technologies LLC Litigation & $643,411
Shelbyville Road 15415 Trade Payables
Louisville, KY 40245
United States
Attn: Tracy Humble
Title: Director of Credit
Phone: (502) 992-2534
Email: jmucci@sttxna.com
25. KT Industries Trade Payables $633,319
3525 Del Mar Heights Rd.#452
San Diego, CA 92135
United States
Attn: Ron Han-Su Kim
Title: President and Chief Executive Officer
Phone: (619) 254-1572
Email: ron@ktindus.com
26. Varilease Finance Inc Trade Payables $604,955
2800 East Cottonwood Parkway
Salt Lake City, UT 84121
United States
Attn: Gregory Adondakis
Title: Chief Executive Officer
Phone: (866) 731-8100
Email: gadondakis@vfi.net
27. Trucent Separation Technologies Trade Payables $596,512
29400 Network Place
Chicago, IL 60673-1400
United States
Attn: Thomas Czartoski
Title: President and Chief Executive Officer
Phone: (734) 212-8483
Email: tczartoski@trucent.com
28. CTC Packaging Trade Payables $570,187
5264 Lake Street P.O.Box 456
Sandy Lake, PA 16145
United States
Attn: Dustin Staples
Title: President
Phone: (724) 376-7315
Email: dustin.staples@ctcpackaging.com
29. Victory Packaging Trade Payables $500,165
3555 Timmons Lane, Suite 1400
Houston, TX 77027
United States
Attn: Benjamin Samuels
Title: Chief Executive Officer
Phone: (888) 261-1268
Email: benjaminsamuels@victorypackaging.com
30. Pension Benefit Pension Benefit
Undetermined
Guaranty Corporation (PBGC) Plan Liability
1200 K Street, Nw
Washington, DC 20005
United States
Attn: Patricia Kelly
Title: Chief Financial Officer
Phone: (202) 229-3033
Email: kelly.patricia@pbgc.gov
AFAKORI INC: Case Summary & 12 Unsecured Creditors
--------------------------------------------------
Debtor: Afakori, Inc.
d/b/a AAF Steel Structural
3 Emmy Lane
Ladera Ranch, CA 92694
Business Description: The Debtor is engaged in the business of
steel product manufacturing from purchased
steel.
Chapter 11 Petition Date: October 9, 2024
Court: United States Bankruptcy Court
Central District of California
Case No.: 24-12573
Judge: Hon. Scott C Clarkson
Debtor's Counsel: Jeffrey B. Smith, Esq.
CURD, GALINDO & SMITH, LLP
301 E. Ocean Blvd, Suite 1700
Long Beach, CA 90802
Tel: 562-824-1177
Email: jsmith@cgsattys.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $500,000 to $1 million
The petition was signed by Amir Alizadeh as chief executive
officer.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 12 unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/WBQKYSY/Afakori_Inc__cacbke-24-12573__0001.0.pdf?mcid=tGE4TAMA
AGEAGLE AERIAL: To Execute 1-for-50 Reverse Stock Split on Oct. 14
------------------------------------------------------------------
AgEagle Aerial Systems Inc., an industry-leading provider of full
stack flight hardware, sensors and software for commercial and
government use, announced a reverse stock split of its authorized,
issued and outstanding common stock, par value $0.001 per share, at
a ratio of 1 share of common stock for every 50 shares of common
stock, effective as of 5:00 p.m. (Eastern Time) on October 14,
2024.
The Company's common stock will begin trading on a split-adjusted
basis when the market opens on October 15, 2024. The reverse stock
split was authorized by the Company's Board of Directors on October
3, 2024. Pursuant to the laws of the State of Nevada, the Company's
state of incorporation, the Company's Board of Directors has the
authority to effect a reverse stock split without shareholder
approval if the number of authorized shares of common stock and the
number of outstanding shares of common stock are proportionally
reduced. The Company will file a certificate of change to its
articles of incorporation, as amended, with the Secretary of State
of Nevada to effect the reverse stock split. The Company's common
stock will continue to trade on the NYSE American under the stock
ticker "UAVS" but will trade under the new CUSIP number 00848K
309.
As a result of the reverse split, each 50 pre-split shares of
common stock outstanding will automatically combine into 1 new
share of common stock without any action on the part of the
holders, and the number of outstanding common shares will be
reduced from 39,720,458 shares to approximately 850,409 shares
without taking into account fractional shares.
The reverse stock split is being effected to ensure that the
Company can meet the per share price requirements of the NYSE
American, the Company's current listing exchange.
No fractional shares will be issued as a result of the reverse
stock split. Shareholders who otherwise would be entitled to a
fractional share because they hold a number of shares not evenly
divisible by the 1 for 50 reverse split ratio, will automatically
be entitled to receive an additional fractional share of the
Company's common stock to round up to the next whole share.
The Company's transfer agent, Equiniti Trust Company, which is also
acting as the exchange agent for the reverse split, will send
instructions to stockholders of record who hold stock certificates
regarding the exchange of their old certificates for new
certificates, should they wish to do so. Stockholders who hold
their shares in brokerage accounts or "street name" are not
required to take action to effect the exchange of their shares.
About AgEagle
AgEagle Aerial Systems Inc. is headquartered in Wichita, Kansas,
and operates through its wholly-owned subsidiaries, focusing on
designing and delivering top-tier drones, sensors, and software to
address critical customer needs. Founded in 2010, AgEagle initially
pioneered proprietary, professional-grade, fixed-wing drones and
aerial imagery-based data collection and analytics solutions for
the agriculture sector. Today, the company is recognized as a
globally respected market leader, offering customer-centric,
advanced, autonomous unmanned aerial systems (UAS) that generate
revenue at the intersection of flight hardware, sensors, and
software across industries, including agriculture,
military/defense, public safety, surveying/mapping, and
utilities/engineering. AgEagle has achieved numerous regulatory
milestones, including government approvals for its commercial and
tactical drones to fly Beyond Visual Line of Sight (BVLOS) and/or
Operations Over People (OOP) in the United States, Canada, Brazil,
and the European Union. It has also received Blue UAS certification
from the Defense Innovation Unit of the U.S. Department of Defense.
More information can be found at www.ageagle.com.
Orlando, Florida-based WithumSmith+Brown, PC, the company's auditor
since 2020, issued a "going concern" qualification in its report
dated April 1, 2024, citing recurring losses from operations, cash
usage exceeding its current cash position, and an accumulated
deficit as factors raising substantial doubt about the company's
ability to continue as a going concern.
During the year ended December 31, 2023, the company incurred a net
loss of approximately $42.4 million. As of June 30, 2024, AgEagle
had $22,830,836 in total assets, $14,756,362 in total liabilities,
and $8,074,474 in total stockholders' equity.
AMERICA-CV: Court Dismisses Clawback Suit Against Mediaset
----------------------------------------------------------
Judge Laurel M. Isicoff of the United States Bankruptcy Court for
the Southern District of Florida ruled that Mediaset Espana
Communicacion S.A., is entitled to judgment in its favor as to all
three counts of the adversary complaint captioned as OMAR ROMAY,
Liquidating Trustee, for the Liquidating Trust of America-CV
Station Group Inc., Plaintiff, v. MEDIASET ESPANA COMMUNICACION
S.A., Defendant, Adv. Pro. Case No. 21-01059-LMI (Bankr. S.D.
Fla.).The court held that the Plaintiff has failed to show certain
transfer to Mediaset was avoidable, and the Plaintiff cannot
recover the Transfer from Mediaset.
The Liquidating Trustee filed the Complaint to Avoid Transfer and
to Recover Property against the Defendants. Before the bankruptcy
cases were filed, the Romay Parties on the one hand and America
CVSG and the Affiliated Debtors on the other were involved in
extensive litigation including the First Romay State Court
Litigation and the Second Romay State Court Litigation. Based upon
the Second Romay State Court Litigation, the Romay Parties filed
joint and several claims in the amount of $12,919,740.88 against
each of America CVSG and the Affiliated Debtors in each of the
bankruptcy cases. During the chapter 11 cases, the Debtor and its
affiliates and the Romay Parties settled the Second Romay State
Court Litigation and the settlement became a part of the Debtor's
chapter 11 plan. The Plan provided that the Romay Claim would be
satisfied, in part, by assignment to a Liquidating Trust of a
fraudulent conveyance action to recover payment of a $10 million
pre-petition payment to Mediaset. The Romay Parties also received a
lump sum cash distribution of $1.5 million pursuant to the Plan.
On February 24, 2021, the Plaintiff filed this adversary
proceeding. Various issues were resolved by pre-trial and mid-trial
motions. The remaining issues are the subject of this ruling.
The Adversary Complaint has three counts:
(i) Count I seeks relief under 11 U.S.C. Sec. 548(a)(1)(B) --
constructive fraud;
(ii) Count II seeks relief under 11 U.S.C. Sec. 548(a)(1)(A) --
actual fraud; and
(iii) Count III seeks relief under 11 U.S.C. Sec. 550 -- recovery
of the funds transferred.
The Plaintiff bears "the burden of proving all elements of a
fraudulent transfer claim by a preponderance of the evidence."
Mediaset argues that America CVSG received reasonably equivalent
value in exchange for the Transfer by virtue of a book entry in
America CVSG's general ledger describing the Transfer to Mediaset
as a loan to Pegaso. However, that is all there was -- a book
entry, and only on America CVSG's books, according to the Court.
There was no promissory note evidencing an obligation from Pegaso
to America CVSG. None of Pegaso's books or records, or tax returns,
ever listed an obligation from Pegaso to America CVSG, the Court
notes.
Based on the evidence, and absence thereof, the Court finds that at
the time of the Transfer, there was no loan or any intent to create
a loan; the journal entry had no legally cognizable value. The
Court therefore holds that America CVSG did not receive reasonably
equivalent value or, in fact, any value, in exchange for the
Transfer.
The Adversary Complaint alleges that the Transfer caused America
CVSG to become insolvent, left America CVSG with inadequate
capital, and caused America CVSG to be unable to pay its debts as
they came due. The issue then is whether the fair value of a
debtor's debts exceeds the fair value of the debtor's assets. This
is also referred to as the "balance sheet test" of insolvency.
With respect to the insolvency analysis in this case, the value of
two assets, or asset groups, are at issue, while the calculation of
one debt is at issue. The two asset values at issue are first, the
value of the $10,000,000 "loan" to Pegaso; and second, the value of
the broadcast licenses that America CVSG continued to own at the
time of the Transfer. The debt at issue is the value of the then
contingent liability owed to the Romay Parties in connection with
the Second Romay State Court Litigation.
The other asset valuation at issue is the value of the broadcast
licenses at the time of the Transfer. At the time of the Transfer,
and after the Auction, America CVSG continued to own at least five
broadcast licenses, however for purposes of the insolvency analysis
the parties focused on the value of three broadcast licenses -- two
in
Puerto Rico, WJPX and WJWN13, and one in Miami -- WJAN. The Court
finds that as of the Transfer Date the value of WJAN was $2,063,000
and the value of the Puerto Rico stations was $4,314,000.
The last issue of contention related to balance sheet insolvency is
how the contingent liability of the Second Romay State Court
Litigation should have been valued. While both sides agree that the
Romay Contingency was, in fact, a contingent liability at the time
of the Transfer, the two experts had widely different views on its
value at that time. The expert for the Plaintiff, Mr. Kapila,
testified that the Romay Contingency should be valued at
$9,320,609.00, which is the highest range of the amount set forth
in an April 2019 non-final order entered by the state court a year
after the Transfer. The expert for Mediaset, Mr. Feltman, testified
that the Romay Contingency should be valued at a range between
$3.15 million and $4.05 million
The Court finds that Mr. Feltman's expert opinion is the more
persuasive. Therefore, the Court holds that the appropriate value
of the Romay Contingency on the Transfer Date was $3,600,000.
The Court concludes that as of the Transfer Date, the total value
of America CVSG's assets at issue in this case was at least
$6,377,000 and the total value of liabilities at issue (the Romay
Contingency) was $3,600,000. The parties agree that as of the
Transfer Date, America CVSG also had $2.9 million in cash.
Therefore, America CVSG was solvent with assets exceeding
liabilities by at least $5.7 million as of the Transfer Date.
The Plaintiff argues that at the time of the Transfer, America CVSG
was engaged in a business or transaction for which it was left with
unreasonably small capital pursuant to 11 U.S.C. section
548(a)(1)(B)(i)(II).
The Court finds that America CVSG was not left with unreasonably
small capital but remained viable for a full year after the
Transfer Date. Judge Isicoff explains, "America CVSG was a holding
company, not an operating company. Its function was to hold the
broadcast licenses and receive payment for their use. America CVSG
had more than sufficient capital and cash to engage in its normal
business operations. America CVSG had no debt owed to unaffiliated,
unrelated entities. It had no lines of credit, no mortgage loans,
and no business loans to be paid. Its normal 'operating' expenses
were minimal, and it carried sufficient cash to actually pay all
expenses as they became due, and it did so. There was no evidence
at Trial of any debts that were unpaid, during the year after the
Transfer Date. Where a company, like America CVSG, survives for an
extended period of time after the subject transaction, courts will
not find that the company had unreasonably low capital."
The Plaintiff argues that even if America CVSG was not actually
insolvent or rendered insolvent as a result of the Transfer, it was
equitably insolvent for fraudulent transfer purposes pursuant to
section 548(a)(1)(B)(i)(III).
The Court finds there was no evidence of any intent or belief that
America CVSG would incur debts beyond its ability to repay. Judge
Isicoff says, "America CVSG did not take on any new debt as part of
the Transfer and did not purposely intend to take on new debt.
America CVSG had no debt and no plan nor need for debt to carry on
its business as a license holding company, as part of the overall
Broadcast Businesses."
The Court concludes that while America CVSG did not receive
reasonably equivalent value for the Transfer, because America CVSG
was solvent, was not left with unreasonably small capital, and was
not unable to pay debts as they became due as of the Transfer Date,
the Plaintiff failed to meet his burden to prove by a preponderance
of the evidence that the Transfer was constructively fraudulent.
Notwithstanding that America CVSG is solvent, the Plaintiff also
argues that the Transfer is recoverable because he has established
all the elements of his claim that the Transfer was made with
actual fraudulent intent, that is, that the Transfer was made with
actual intent to hinder, delay, or defraud creditors.
The Court finds that the Plaintiff has not satisfied his burden of
proof to demonstrate there was an actual intent to defraud
creditors at the time of the Transfer. Moreover, the evidence
(letters, billing entries, and emails) is, at best, ambiguous with
respect to whether the Transfer was the focus of the discussions or
emails, or was just one of several possible sources of Chapter V
recoveries considered with counsel, the Court notes.
The Court says the evidence does not support a finding of actual
intent to hinder, delay or defraud a creditor.
A copy of the Court's decision is available at
https://urlcurt.com/u?l=CLXW6n
About America-CV Station Group
America-CV Station Group, Inc. is a privately held company
primarily in the television station ownership and program
production business. It provides broadcasting services.
America-CV and affiliate Caribevision Holdings, Inc. sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D.
Fla. Case Nos. 19-16355 and 19-16359) on May 14, 2019. On May 28,
2019, America-CV Network, LLC and Caribevision TV Network, LLC also
filed Chapter 11 petitions (Bankr. S.D. Fla. Case Nos. 19-16976 and
19-16977). The cases are jointly administered under Case No.
19-16355). At the time of the filing, each of the Debtors disclosed
assets of $10 million to $50 million and liabilities of $1 million
to $10 million.
Judge Jay A. Cristol oversees the cases.
The Debtors tapped Genovese Joblove & Battista, P.A., as their
bankruptcy counsel, and Fletcher, Heald & Hildreth, P.L.C., as
Genovese's co-counsel.
ASSETS4LIFE LLC: Files for Chapter 11 Bankruptcy
------------------------------------------------
Assets4Life LLC filed Chapter 11 protection in the District of New
Jersey. According to court filing, the Debtor reports between $1
million and $10 million in debt owed to 1 and 49 creditors. The
petition states that funds will be available to unsecured
creditors.
About Assets4Life LLC
Assets4Life LLC owns and operates apartment buildings.
Assets4Life LLC sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D.N.J. Case No. 24-19735) on October 1,
2024. In the petition filed by Mohamed Hassanain, as managing
member, the Debtor reports estimated assets and liabilities between
$1 million and $10 million each.
The Debtor is represented by:
Lawrence Luttrell, Esq.
LAW OFFICE OF LAWRENCE W. LUTTRELL, P.C.
2137 State Route 35 3rd Floor
Holmdel NJU 07733
Tel: (732) 872-6900
Email: larry@lwlpc.com
AVANTE HEALTH: Files Chapter 11, Sells Assets to Staple Street
--------------------------------------------------------------
Avante Health Solutions, a leading provider of aftermarket service,
repair, and refurbishment for medical equipment, announced today
that the Company has entered into an Asset Purchase Agreement with
an affiliate of Staple Street Capital, pursuant to which Staple
Street Capital will acquire substantially all of the Company's
assets. The agreement will support the recapitalization of Avante,
enabling the Company to deleverage its balance sheet and continue
operating and serving customers over the long-term.
To facilitate the transaction, Avante has filed for voluntary
protection under Chapter 11 of the U.S. Bankruptcy Code in the
United States Bankruptcy Court for the District of Delaware. This
will provide for a quick and orderly sale of the Company's assets
under Section 363 of the Bankruptcy Code, with Staple Street
Capital serving as the "stalking horse bidder" in a
court-supervised auction and sale process.
"Our team has been working diligently to strengthen our financial
foundation in the face of difficult circumstances brought on by
ongoing litigation, which has cost Avante approximately $20 million
over the past several years," said Jim Leitl, Chief Executive O cer
and President of Avante Health Solutions. "After evaluating our
options, the Board and management team determined that entering
into an agreement with Staple Street Capital, who will support
Avante's long-term success, is the best path forward. We are
confident that this acquisition best positions the business for the
future. As always, we remain committed to continue our mission of
making it easier and more affordable for every hospital, clinic,
and medical practice to have the very best equipment, supplies, and
services. I want to thank our incredibly talented employees for
their continued focus and hard work, and our customers, partners,
and suppliers for their support."
The partners of Staple Street Capital said, "We are excited to
partner with Avante to provide the strategic and capital resources
to enable a successful recapitalization of the business and support
its long-term growth strategy. We look forward to further investing
in Avante to meet the highest standards of customer care and
quality, and to further innovate new value-added services and
solutions for customers."
The agreement with Staple Street Capital remains subject to Court
approval and other customary conditions, with an expected
completion date by year end. Avante intends to move through this
process while operating in the ordinary course -- providing the
industry-critical services that its customers, patients, and
partners rely on. In connection with the proposed sale transaction,
Avante has received a commitment for Debtor-in-possession financing
from Staple Street Capital to support the business through the sale
process. The Company intends to pay vendors, suppliers, and other
trade creditors in full under normal terms for goods and services
provided during the bankruptcy case. Avante will exit the Chapter
11 process with a healthy balance sheet and with Staple Street
Capital as a financial partner to support its future growth.
Additional information on the Company's Chapter 11 case can be
found at https://omniagentsolutions.com/Avante or call our
dedicated number at (866) 989-3043 (for toll-free U.S. and Canada
calls) or (818) 698-8426 (for tolled international calls).
Avante is advised in this matter by Polsinelli as legal counsel and
Riveron RTS, LLC as financial advisor.
Staple Street Capital is advised by Schulte, Roth, & Zabel, LLP as
legal counsel.
About Staple Street Capital
Staple Street Capital is a leading private equity firm with
approximately $900 million of capital under management and invests
in market--leading businesses where there are transformational
opportunities to create value. SSC helps companies capitalize on
new opportunities to build stronger, more valuable businesses. For
more information see www.staplestreetcapital.com.
About Avante Health Solutions
Avante Health Solutions has over 35 years of experience and is
recognized as a leading provider in the medical equipment and
services industry. Avante Health Solutions o ers a range of
services including diagnostic imaging, medical surgical, patient
monitoring, and ultrasound. They also provide rental equipment and
solutions for animal health providers, international healthcare
facilities, and the U.S. federal government. Avante Health
Solutions prides themselves on being a comprehensive provider,
partnering with their customers from consultation and installation
to service, repair, and ongoing technical support, as well as
advanced remote monitoring solutions.
BARNES GROUP: S&P Places 'BB' ICR on CreditWatch Negative
---------------------------------------------------------
S&P Global Ratings placed all of its ratings on Barnes Group Inc.
on CreditWatch with negative implications, including the 'BB'
issuer credit rating and 'BB' issue-level rating on the company's
senior secured term loan B.
S&P expects to resolve its CreditWatch when the transaction closes,
which it expects before the end of the first quarter in 2025.
S&P said, "The CreditWatch negative reflects our view that a
multiple-notch downgrade of Barnes Group is possible following the
execution of Apollo's announced plan to acquire the company and
take it private. The downgrade would reflect our view of financial
sponsor ownership and likely a more aggressive financial policy. We
expect Barnes' aerospace segment to continue to benefit from robust
demand while its industrials segment moves toward optimization."
The proposed acquisition, which values the company at $3.6 billion,
was unanimously approved by the board of directors, which
encouraged approval by shareholders. Barnes' press release dated
Oct. 7, 2024, indicates the transaction will close by the end of
its first quarter in 2025.
CreditWatch
S&P said, "The CreditWatch placement with negative implications
reflects our view we would likely lower our ratings on Barnes
following its acquisition by Apollo. We base this view on the
financial sponsor ownership, and our expectation of more aggressive
financial policy."
BEYOND AIR: Avenue Venture, Affiliates Disclose Equity Stakes
-------------------------------------------------------------
Avenue Venture Opportunities Fund, L.P. disclosed in a Schedule 13G
Report filed with the U.S. Securities and Exchange Commission that
as of September 26, 2024, the Fund and its affiliates -- Avenue
Venture Opportunities Fund II, L.P., Avenue Capital Management II,
L.P., Avenue Venture Opportunities Partners, LLC. Avenue Venture
Opportunities Partners II, LLC, GL Venture Opportunities Partners,
LLC, GL Venture Opportunities Partners II, LLC, and Marc Lasry --
beneficially owned shares of Beyond Air, Inc.'s common stock.
Avenue Venture Opportunities Fund, L.P. directly beneficially owns
an aggregate of:
(a) 2,657,149 shares of common stock, par value $0.0001 per
share,
(b) 2,790,686 shares of Common Stock issuable upon exercise of
warrants outstanding, and
(c) 156,986 shares of Common Stock issuable upon conversion of
outstanding loans, which are convertible at 130% of the Per Share
Issue Price.
Avenue Venture Opportunities Fund II, L.P. directly beneficially
owns an aggregate of:
(a) 3,985,723 shares of Common Stock,
(b) 4,186,029 shares of Common Stock issuable upon exercise of
warrants outstanding, and
(c) 235,479 shares of Common Stock issuable upon conversion of
outstanding loans, which are convertible at 130% of the Per Share
Issue Price.
Aggregate ownership by Reporting Person is subject to a 9.9% limit
at any one time.
As the Manager of the Funds, Avenue Capital Management II, L.P.,
may be deemed to beneficially own securities held by the Funds.
As the general partner of Avenue Venture Opportunities Fund, L.P.,
Avenue Venture Opportunities Partners, LLC may be deemed to
beneficially own securities held by the Fund.
As the general partner of Avenue Venture Opportunities Fund II,
L.P., Avenue Venture Opportunities Partners II, LLC may be deemed
to beneficially own securities held by Fund II.
As the managing member of Avenue Venture Opportunities Partners,
LLC, GL Venture Opportunities Partners, LLC may be deemed to
beneficially own securities held by the Fund.
As the managing member of Avenue Venture Opportunities Partners II,
LLC, GL Venture Opportunities Partners II, LLC may be deemed to
beneficially own securities held by Fund II.
Marc Lasry is the ultimate beneficial owner of both GL Venture
Opportunities Partners, LLC and GL Venture Opportunities Partners
II, LLC and therefore, may be deemed to beneficially own such
securities of Issuer held by the Funds.
A full-text copy of Avenue Venture's SEC Report is available at:
https://tinyurl.com/yv8suvtc
About Beyond Air
Headquartered in Garden City, NY, Beyond Air, Inc. --
www.beyondair.net -- is a commercial stage medical device and
biopharmaceutical company dedicated to harnessing the power of
endogenous and exogenous nitric oxide (NO) to improve the lives of
patients suffering from respiratory illnesses, neurological
disorders, and solid tumors. The Company has received FDA approval
for its first system, LungFit PH, for the treatment of term and
near-term neonates with hypoxic respiratory failure. Beyond Air is
currently advancing its other revolutionary LungFit systems in
clinical trials for the treatment of severe lung infections such as
viral community-acquired pneumonia (including COVID-19), and
nontuberculous mycobacteria (NTM) among others. Also, the Company
has partnered with The Hebrew University of Jerusalem to advance a
pre-clinical program dedicated to the treatment of autism spectrum
disorder (ASD) and other neurological disorders. Additionally,
Beyond Cancer, Ltd., an affiliate of Beyond Air, is investigating
ultra-high concentrations of NO with a proprietary delivery system
to target certain solid tumors in the pre-clinical setting.
East Hanover, New Jersey-based Marcum LLP, the Company's auditor
since 2019, issued a "going concern" qualification in its report
dated June 24, 2024, citing that the Company has incurred
significant losses and needs to raise additional funds to meet its
obligations and sustain its operations. These conditions raise
substantial doubt about the Company's ability to continue as a
going concern.
As of June 30, 2024, Beyond Air had $46.50 million in total assets,
$28.80 million in total liabilities, and $17.70 million in total
equity.
BIOLASE INC: Sonendo Enters Asset Purchase Agreement for $14-Mil.
-----------------------------------------------------------------
Sonendo, Inc., a leading dental technology company and developer of
the GentleWave(R) System, on October 9, 2024, announced that the
Company has entered into an Asset Purchase Agreement with Biolase,
Inc. and certain of its subsidiaries pursuant to which the Company
agreed to acquire substantially all of the assets of the Sellers
and their subsidiaries for a total purchase price of $14 million,
plus the assumption of certain operating liabilities and the
settlement value of certain ongoing patent litigation between
Sonendo's subsidiary PIPStek, LLC and certain of the Sellers.
The Sellers, together with certain of their subsidiaries, are
debtors in voluntary Chapter 11 cases before the United States
Bankruptcy Court for the District of Delaware, which commenced on
October 1, 2024. Upon Bankruptcy Court approval, the Company will
be designated as the "stalking horse" bidder in connection with a
sale of the assets under Section 363 of Title 11 of the United
States Code. The transaction will be conducted through a Bankruptcy
Court-supervised process pursuant to Bankruptcy Court-approved
bidding procedures and is subject to the receipt of higher and
better offers from competing bidders at an auction, approval of the
sale by the Bankruptcy Court, and the satisfaction of certain
conditions.
"If the Court accepts our bid as the winning offer, Sonendo is
committed to ensuring a smooth transition that delivers a
continuity of support and service to all Biolase customers and
their patients, as well as their suppliers and other vendors," said
Bjarne Bergheim, President and Chief Executive Officer of Sonendo.
"The Sonendo team is very enthusiastic about the prospect of
bringing these two organizations together. We anticipate meaningful
cross-selling and significant cost reduction synergy opportunities
as a combined company and that we will emerge as a stronger
organization that can leverage a more comprehensive technology
platform through increasingly focused specialty sales organizations
to help advance our mission of saving teeth and restoring health."
In January 2023, the Company's wholly-owned subsidiary, PIPStek
LLC, filed a patent infringement lawsuit against Biolase in the
U.S. District Court for the District of Delaware asserting
infringement by Biolase of certain of PIPStek's patents covering
the use of laser systems and radial firing tips." On October 1,
2024, in connection with the Sellers' Chapter 11 case, the Company
filed a proof of claim with the Bankruptcy Court for a total of not
less than $59,000,000 of current and ongoing damages associated
with patent infringement by Biolase.
"Sonendo has made significant investments in its proprietary
technology and intellectual property position and we will continue
to vigorously enforce our rights against any parties who might
infringe them," Mr. Bergheim continued.
About Sonendo
Sonendo is a commercial-stage medical technology company focused on
saving teeth from tooth decay, the most prevalent chronic disease
globally. Sonendo develops and manufactures the GentleWave(R)
System, an innovative technology platform designed to treat tooth
decay by cleaning and disinfecting the microscopic spaces within
teeth without the need to remove tooth structure. The system
utilizes a proprietary mechanism of action, which combines
procedure fluid optimization, broad-spectrum acoustic energy, and
advanced fluid dynamics, to debride and disinfect deep regions of
the complex root canal system in a less invasive procedure that
preserves tooth structure. The clinical benefits of the
GentleWave(R) System when compared to conventional methods of root
canal therapy include improved clinical outcomes, such as superior
cleaning that is independent of root canal complexity and tooth
anatomy, high and rapid rates of healing and minimal to no
post-operative pain. In addition, the GentleWave(R) System can
improve the workflow and economics of dental practices and offers
patients an effective, less invasive, and less painful alternative
to traditional root canal therapy.
About Biolase Inc.
BIOLASE -- http://www.biolase.com-- is a provider of advance laser
systems for the dental industry. The Company develops,
manufactures, markets, and sells laser systems that provide
significant benefits for dental practitioners and their patients.
The Company's proprietary systems allow dentists, periodontists,
endodontists, pediatric dentists, oral surgeons, and other dental
specialists to perform a broad range of minimally invasive dental
procedures, including cosmetic, restorative, and complex surgical
applications. The Company's laser systems are designed to provide
clinically superior results for many types of dental procedures
compared to those achieved with drills, scalpels, and other
conventional instruments.
BITTREX INC: Ghader Case Withdrawn from Mediation
-------------------------------------------------
The Honorable Jennifer L. Hall of the United States District Court
for the District Court of Delaware accepted Magistrate Judge
Christopher J. Burke's recommendation that the case captioned as
AZIM GHADER, Appellant, v. THE PLAN ADMINISTRATOR, BITTREX, INC.
and BITTREX MALTA, LTD., Appellees, Civil Action No. 24-686-JLH (D.
Del.), be withdrawn from mandatory referral for mediation and
proceed through the appellate process.
Briefing on this bankruptcy appeal shall proceed in accordance with
the following schedule:
Appellant's brief in support of the appeal is due on or before
October 28, 2024.
Appellees' brief in opposition to the appeal is due on or
before November 27, 2024
Appellant's reply brief is due on or before December 11,
2024.
Ghader is taking an appeal from certain orders entered by the
bankruptcy court overseeing Bittrex's Chapter 11 case:
(i) The Court's Order Sustaining Debtors' Objection to Claims
597-238, 597-296, 598 998, 598-1021, 598-10408, 599-35, 599-38,
599-10018, 600-87, 600-96, and 600-10052 Filed by Azim Ghader,
entered June 4, 2024 [D.I. 205];
(ii) The Court's Opinion, entered on May 22, 2024 [D.I. 147] in
support of the Order;
(iii) The Court's Letter Regarding Request for Additional
Briefing and Argument, entered on January 26, 2024 [D.I. 980];
(iv) The Court's denial of Ghader's Motion for Reconsideration
Pursuant to Bankruptcy Rule 9024, which denial occurred pursuant to
the above referenced Order [D.I. 205]; and
(v) The Court's oral ruling sustaining the Plan
Administrator's Motion to Exclude Testimony of Ghader's Expert,
Stephanie Rice [D.I. 901] recorded in the trial transcript [1/16/24
Hearing Tr. 8:14:20].
Ghader asks the District Court to determine whether the Bankruptcy
Court erred in:
1. sustaining the Debtors' Objection to Claims 597-238,
597-296, 598 998, 598-1021, 598-10408, 599-35, 599-38, 599-10018,
600-87, 600-96, and 600-10052 Filed by Azim Ghader. [D.I. 411]?
2. its Letter Ruling precluding Appellant from arguing that
the contract - i.e. the 2015 and 2018 Bittrex Terms of Service --
violated the Iranian Transactions and Sanctions Regulations, 31
C.F.R. part 560, are void ab initio and not enforceable as a matter
of law?
3. summarily denying Appellant's Motion for Reconsideration
of the Court's Letter Ruling, including denying Appellant's
arguments that: (a) the illegality and unenforceability of the
Bittrex Terms of Service may be raised and considered at any time;
(b) the Bittrex Terms of Service were illegal and unenforceable;
(c) the Bittrex Terms of Service, were made in violation of ITSR,
are null and void, and not enforceable as a matter of law; and (d)
the Bittrex Terms of Service, made in violation of the ITSR, are
void as a matter of public policy?
4. sustaining the Motion to Exclude, excluding the testimony
of Appellant's ITSR and Office of Foreign Assets Control expert
Stephanie Rice?
5. finding and concluding as a matter of law: (a) Appellant
agreed to and accepted the Bittrex Terms of Service; (b) the
Bittrex Terms of Service are enforceable against the Appellant; (c)
Appellees did not breach the Bittrex Terms of Service; (d)
Appellant's claims of negligence, negligent misrepresentation,
conversion, fraud, breach of fiduciary duty, unjust enrichment,
negligent or intentional emotional distress, civil conspiracy
claims expire after a three-year limitation period; (d) Appellant's
tort claims and non-contract causes of action are time barred; (f)
Appellant's tort claims fail under the State of Washington's
independent duty doctrine; (g) Appellees did not violate the State
of Washington Unfair Business Practices Act, RCW 19-86-020; and (h)
Appellant failed to prove up his surviving claims by a
preponderance of the evidence?
A copy of the Court's decision is available at
https://urlcurt.com/u?l=Gv8ioP
About Bittrex Inc.
Bittrex is a regulated digital assets exchange platform.
Desolation Holdings and three of its affiliates filed voluntary
petitions for relief under Chapter 11 of the Bankruptcy Code
(Bankr. D. Del., Lead Case No. 23-10597) on May 8, 2023. Desolation
Holdings' debtor affiliates are Bittrex, Inc., Bittrex Malta
Holdings Ltd. and Bittrex Malta Ltd.
At the time of filing, the Debtors estimated consolidated assets of
$500 million to $1 billion in assets and $500 million to $1 billion
in liabilities.
The Hon. Brendan Linehan Shannon presides over the cases.
Quinn Emanuel Urquhart & Sullivan, LLP, led by partner Patricia B.
Tomasco, is the Debtors' counsel. Berkeley Research Group, LLC, is
the Debtors' restructuring advisor. Omni Agent Solutions is the
claims agent.
* * *
The Bankruptcy Court confirmed the Debtors' Amended Joint Chapter
11 Plan of Liquidation on Oct. 31, 2023. The Plan was declared
effective Nov. 15, 2023.
BYJU'S ALPHA: Units Ask DIP Funding to U.S. Lender Group
--------------------------------------------------------
Dorothy Ma of Bloomberg Law reports that Indian
education-technology company Byju's bankrupt units have sent a
debtor-in-possession financing request to a US lender group.
The group, who forced the units into Chapter 11, has begun to
engage with the bankruptcy trustee on DIP financing, Jordan Elkin,
a lawyer at Kirkland & Ellis representing a term loan agent, said
during a Monday court hearing.
He added the lenders have expended tens of millions of dollars on
enforcement efforts the worldwide.
Court-appointed trustee Claudia Springer said the Neuron Fuel unit,
also known as Tynker, is "in the best condition" and whose sale she
could set up "pretty quickly."
About BYJU's Alpha
BYJU's Alpha, Inc., designs and develops education software
solutions.
The Debtor sought protection under Chapter 11 of the 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.
CABLE & WIRELESS: $1BB Upsized Notes No Impact on Moody's Ba3 CFR
-----------------------------------------------------------------
Moody's Ratings comments that Cable & Wireless Communications
Limited (C&W) Ba3 corporate family rating, Sable International
Finance Limited (SIFL)'s Ba3 backed senior secured ratings and
negative outlook remain unchanged following the company's
announcement that it has upsized its 7.125% backed senior secured
notes due 2032 to $1 billion from $500 million.
The transaction will have no material effect on C&W's leverage, as
proceeds will be used for liability management, further improving
the company's maturity profile. The additional sources will be used
to fully redeem SIFL's $495 million senior secured notes due 2027,
partially redeem C&W Senior Finance Limited's $1,220 Backed Senior
Notes due 2027 and pay transaction-related premium, fees and
expenses. The new notes will rank pari passu with all other senior
secured and unsubordinated debt obligations of SIFL and ahead the
remaining $735 million in senior unsecured notes due 2027 issued by
C&W Senior Finance Limited, rated B2.
The B2 rating on the senior unsecured notes continues reflecting
their positioning in the waterfall behind the $3.1 billion in
secured debt, including Coral-US Co-Borrower LLC's backed senior
secured term loans B-5, B-6, and the senior secured notes at SIFL,
all of them rated Ba3. The senior secured debt under Coral-US
Co-Borrower LLC, benefits from the guarantees of C&W Senior Secured
Parent Limited, Sable Holding Limited, CWIGroup Limited, Cable &
Wireless (West Indies) Limited, Coral-US Co-Borrower LLC and
Columbus International Inc, and share pledges of all the guarantors
and issuer as collateral and security interests over shareholder
loans; while the unsecured debt benefits from a collateral that
comprises the capital stock of the notes' issuer.
C&W's Ba3 corporate family rating (CFR) reflects its integrated
business model and leading market positions throughout the
Caribbean and Panama, which drive strong profitability. The
company's strong liquidity also supports the CFR. Conversely, the
rating is constrained by the company's large exposure to emerging
economies and its tolerance to high leverage.
Moody's expect C&W's liquidity to be solid, supported by about $466
million in cash as of June 2024 and positive cash generation before
dividends. Furthermore, the company has access to $636 million in
revolving credit facilities. C&W does not face any large debt
maturity before 2027, which upon this transaction has been reduced
to $0.7 billion from $1.7 billion.
The negative outlook reflects C&W's persistently high
Moody's-adjusted leverage at 4.7x for the 12 months that ended June
2024 and Moody's view that it will remain above 4x in the next
12-18 months.
A rating upgrade could be considered if leverage (Moody's-adjusted
debt/EBITDA) is comfortably sustained below 3.5x on a consolidated
basis; Moody's-adjusted EBITDA margin of at least 40%; and sound
positive free cash flow generation (FCF), all on a sustained
basis.
Quantitatively, a downgrade could occur if Moody's-adjusted
leverage is sustained above 4.5x by FYE 2024 or above 4.0x by 2025,
its EBITDA margin declines toward 35% on a sustained basis. C&W's
rating could be downgraded if its liquidity position weakens
significantly due to a large cash distribution to its parent
company in a way that it jeopardizes the company's liquidity or
requires additional debt.
C&W is a subsidiary of Liberty Latin America Ltd (LLA). The company
is an integrated telecommunications provider offering mobile,
broadband, video, fixed-line, business, IT and wholesale services
in Panama, Jamaica, the Bahamas, Trinidad and Tobago, Barbados and
other markets in the Caribbean and Central America. For the 12
months that ended June 31, 2024, the company generated revenue of
$2.6 billion. As of the same date, C&W served 2.4 million revenue
generating units (RGUs) through its fixed network, which passes 2.7
million homes. The company also serves 3.9 million mobile
subscribers.
CACI INT'L: Moody's Rates New First Lien Term Loan Due 2031 'Ba1'
-----------------------------------------------------------------
Moody's Ratings assigned a Ba1 rating to CACI International, Inc.'s
("CACI") new senior secured first lien term loan B due 2031. The
issuance does not impact other ratings of CACI, including its Ba1
corporate family rating. The ratings outlook is stable.
Proceeds from the new $750 million term loan due 2031 are expected
to be used to fund the proposed $1.27 billion acquisition of
Virginia-based Azure Summit Technology (AST). AST is a provider of
high-performance radio frequency (RF) hardware, firmware and
software products and systems to the defense end market. As Moody's
previously commented, although the acquisition will increase
debt/EBITDA to 3.5x, Moody's expect CACI to de-lever following the
transaction, as it has with past acquisitions. Debt/EBITDA for the
fiscal 2024 (ended June 30, 2024) was 2.2x, providing some
financial flexibility. Additionally, because of its repayment of
prepayable debt and EBITDA growth, Moody's expect CACI will reduce
financial leverage back to below 3x over the next 18-24 months.
The proposed $750 million senior secured first lien term loan is
being issued by CACI International, Inc. with guarantees from
material direct and indirect domestic subsidiaries. The Ba1 rating
on the term loan is in line with the CFR given the preponderance of
first lien debt in the company's debt structure.
RATINGS RATIONALE
The Ba1 CFR reflects CACI's large scale and good track record in
integrating acquisitions within the defense services sector. The
company has a strong track record of deleveraging following
acquisitions. The variable cost nature of the business helps
sustain strong free cash flow even as demand fluctuates. CACI is
well positioned to benefit from the current spending priorities
within the US Department of Defense.
At the same time, the ratings are constrained by the entirely
secured nature of the company's debt capital structure. The ratings
also reflect the company's acquisitive nature and Moody's
expectation that CACI will likely increase financial leverage to
effectuate M&A transactions. The company is highly exposed to the
US Department of Defense (DoD), with limited diversification from
foreign governments, federal civilian agencies and commercial end
markets.
The stable outlook reflects Moody's expectation of continued
improvement in earnings with adjusted debt/EBITDA improving to
below 3.0x and very good liquidity.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
Ratings could be upgraded if the company transitions to an
unsecured debt capital structure and successfully integrates recent
acquisitions including the sizable AST acquisition. CACI's ratings
could also be upgraded if debt/EBITDA is sustained below 3x while
free cash flow remains robust.
Ratings could be downgraded if contract execution problems exert
pressure on the company's revenue or EBITDA margin. A
meaningfully more aggressive financial policy, such that
debt/EBITDA is sustained above 4.0x, could also pressure ratings.
Weakening liquidity can also result in a ratings downgrade.
The principal methodology used in this rating was Aerospace and
Defense published in October 2021.
CACI International, Inc. ("CACI"), based in Reston, Virginia,
provides information technology ("IT") services and solutions for
the US Department of Defense ("DoD"), federal civilian agencies and
the government of the UK. Revenue for the fiscal year ended June
30, 2024 was $7.7 billion.
CARROTHERS INSPECTION: Court Approves Use of Cash Collateral
------------------------------------------------------------
Carrothers Inspection Services, LLC obtained an interim court order
approving its use of cash collateral for the period from Sept. 20
to Oct. 11.
The order penned by Judge James Carr of the U.S. Bankruptcy Court
for the Southern District of Indiana authorized the company to use
the cash collateral of its secured creditor, Hendricks County Bank
and Trust Company, based on an approved budget.
As adequate protection, Hendricks was granted a replacement lien on
the cash collateral and post-petition property of Carrothers,
retroactive to the petition date. Additionally, the secured
creditor will receive payment from the company if the ending cash
at the conclusion of any week is less than the beginning cash.
About Carrothers Inspection Services
Carrothers Inspection Services, LLC is a company that specializes
in providing inspection services, likely related to real estate,
construction, or related fields.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Ind. Case No. 24-05110) with $100,001
to $500,000 in assets and $500,001 to $1 million in liabilities.
David R. Krebs signed the petition.
Judge Hon. James M. Carr oversees the case.
David R. Krebs, Esq., at Hester Baker Krebs, LLC serves as the
Debtor's legal counsel.
CHAMPIONS ONCOLOGY: Mourns Loss of President Brady Davis
--------------------------------------------------------
Champions Oncology, Inc. disclosed in a Form 8-K Report filed with
the U.S. Securities and Exchange Commission the unexpected death of
its President, Mr. Brady Davis. Mr. Davis had served as its
President since October 2023.
Mr. Davis was a valued member of the Management team and will be
greatly missed.
About Champions Oncology
Hackensack, N.J.-based Champions Oncology, Inc. is a
technology-enabled research organization engaged in creating
technology solutions to be utilized in drug discovery and
development. Its research center operates in both regulatory and
non-regulatory environments and consists of a comprehensive set of
computational and experimental research platforms. Its
pharmacology, biomarker, and data platforms are designed to
facilitate drug discovery and development at lower costs and
increased speeds.
West Palm Beach, Fla.-based EisnerAmper LLP, the Company's auditor
since 2015, issued a "going concern" qualification in its report
dated July 16, 2024, citing that the Company has experienced net
losses and negative cash flows from operations that raise
substantial doubt about its ability to continue as a going
concern.
Champions Oncology reported a net loss of $7.3 million for the year
ending April 30, 2024. As of April 30, 2024, the Company had $26.1
million in total assets, $28 million in total liabilities, and $1.9
million in total stockholders' deficiency.
CLEAN ENERGY: Issues $150K Convertible Note to Diagonal Lending
---------------------------------------------------------------
Clean Energy Technology, Inc. disclosed in a Form 8-K Report filed
with the U.S. Securities and Exchange Commission that the Company
entered into a securities purchase agreement with 1800 Diagonal
Lending LLC, a Virginia limited liability company, pursuant to
which the Company agreed to issue and sell to Diagonal a
convertible promissory note of the Company in the principal amount
of $150,650 for a purchase price of $131,000 plus an original issue
discount in the amount of $19,650.
The Note provides for a one-time interest charge of 13% of the
principal amount equal to $19,584. The Company shall make nine
payments, each in the amount of $18,914.89 to Diagonal. The first
payment shall be due on October 30, 2024, with eight subsequent
payments due on the 30th day of each month thereafter. Any amount
of principal or interest on this Note which is not paid when due
shall bear a default interest at the rate of twenty two percent
(22%) per annum from the due date thereof until the same is paid.
All or any part of the outstanding and unpaid amount under the Note
may be converted at any time following an event of default into
common stock of the Company, par value $0.001 per share, at the
conversion price of $1.00 per share, subject to anti-dilution
adjustments and a beneficial ownership limitation of 4.99% of
Diagonal and its affiliates. Events of Default include failure to
pay principal or interest, bankruptcy of the Company, delisting of
the Common Stocks, and other events as set forth in the Note.
The Agreement provides customary representations, warranties and
covenants of the Company and Diagonal.
The Company sold the securities in reliance upon an exemption from
registration contained in Section 4(a)(2) of the Securities Act of
1933, as amended, and Rule 506(b) promulgated thereunder.
About Clean Energy
Headquartered in Costa Mesa, California, Clean Energy Technologies,
Inc. -- http://www.cetyinc.com/-- develops renewable energy
products and solutions and establishes partnerships in renewable
energy that make environmental and economic sense. The Company's
mission is to be a segment leader in the Zero Emission Revolution
by offering eco-friendly energy solutions, clean energy fuels, and
alternative electric power for small and mid-sized projects in
North America, Europe, and Asia. The Company targets sustainable
energy solutions that are profitable for it, profitable for its
customers, and represent the future of global energy production.
Diamond Bar, California-based TAAD, LLP, the Company's auditor
since 2023, issued a "going concern" qualification in its report
dated April 16, 2024, citing that the Company has an accumulated
deficit, a working capital deficit, and negative cash flows from
operations. These factors, among others, raise substantial doubt
about the Company's ability to continue as a going concern.
Clean Energy Technologies reported a net loss of $5.53 million for
the year ended Dec. 31, 2023, compared to net profit of $147,395
for the year ended Dec. 31, 2022. As of June 30, 2024, the Company
had $9,312,911 in total assets, $4,733,185 in total liabilities,
and $4,579,726 in total stockholders' equity.
COAT CHECK: U.S. Trustee Unable to Appoint Committee
----------------------------------------------------
The U.S. Trustee for Region 10 disclosed in a court filing that no
official committee of unsecured creditors has been appointed in the
Chapter 11 cases of Coat Check Coffee, LLC and Strange Bird, LLC.
About Coat Check Coffee and Strange Bird
Coat Check Coffee, LLC, an Indianapolis-based company, and its
affiliate Strange Bird, LLC filed Chapter 11 petitions (Bankr. S.D.
Ind. Lead Case No. 24-04651) on Aug. 28, 2024. At the time of the
filing, Coat Check Coffee reported $100,001 to $500,000 in assets
and $1 million to $10 million in liabilities while Strange Bird
reported $50,001 to $100,000 in assets and $500,001 to $1 million
in liabilities.
Judge Jeffrey J. Graham oversees the cases.
Kroger, Gardis & Regas, LLP serves as the Debtors' legal counsel.
CORONET CERAMICS INC: Kicks Off Subchapter V Bankruptcy Process
---------------------------------------------------------------
Coronet Ceramics Inc. filed Chapter 11 protection in the District
of Nevada. According to court filing, the Debtor reports $6,213,194
in debt owed to 1 and 49 creditors. The petition states that funds
will be available to unsecured creditors.
About Coronet Ceramics Inc.
Coronet Ceramics Inc., doing business as Coronet Energy, Coronet
PPE, Fortune88, Blue Sky Properties, and Vegas Renewable Diesel, is
engaged in the business of petroleum and coal products
manufacturing.
Coronet Ceramics Inc. sought relief under Subchapter V of Chapter
11 of the U.S. Bankruptcy Code (Bankr. D. Nev. Case No. 24-15153)
on October 1, 2024. In the petition filed by Mi Shen Goldberg, as
president, the Debtor reports total assets of $3,503,259 and total
liabilities of $6,213,194
The Debtor is represented by:
Matthew L. Johnson, Esq.
JOHNSON & GUBLER, P.C.
Lakes Business Park
8831 W Sahara Ave
Las Vegas, NV 89117-5865
Tel: (702) 471-0065
Fax: (702) 471-007
Email: mjohnson@mjohnsonlaw.com
CSTL 2024-GATE: Fitch Assigns 'BB-(EXP)sf' Rating on Cl. HRR Certs
------------------------------------------------------------------
Fitch Ratings has assigned expected ratings and Rating Outlooks to
CSTL Commercial Mortgage Trust 2024-GATE, Commercial Mortgage
Pass-Through Certificates, Series 2024-GATE as follows:
- $272,400,000 class A 'AAAsf'; Outlook Stable;
- $47,300,000 class B 'AA-sf'; Outlook Stable;
- $37,100,000 class C 'A-sf'; Outlook Stable;
- $52,400,000 class D 'BBB-sf'; Outlook Stable;
- $30,650,000 class E 'BBsf'; Outlook Stable; and
- $23,150,000a class HRR 'BB-sf'; Outlook Stable.
(a) Horizontal risk retention interest representing at least 5.0%
of the estimated fair value of all classes.
Transaction Summary
The certificates represent the beneficial interests in a trust that
holds a five-year, fixed-rate, interest-only mortgage loan. The
mortgage will be secured by the borrowers' fee simple and leasehold
interests in nine multifamily properties with a total of 2,806
units located across six states. The portfolio is 95.0% leased as
of the September 2024 rent rolls.
Loan proceeds coupled with $70.0 million in mezzanine loan proceeds
will be used to pay off $506.0 million in debt, pay tax abatement
filing fees, fund a $2.3 million upfront abated real estate tax
reserve, pay closing costs and return approximately $8.1 million in
cash equity to the sponsor.
The loan is expected to be originated by Citi Real Estate Funding
Inc. Midland Loan Services, a Division of PNC Bank, National
Association is expected to act as servicer, and Argentic Services
Company LP is expected to act as special servicer. Wilmington
Savings Fund Society, FSB is expected to act as trustee, and
Citibank, N.A. is expected to act certificate administrator. Park
Bridge Lender Services LLC is expected to act as operating advisor.
The certificates will follow a standard senior-sequential paydown
structure. The transaction is expected to close on Oct. 22, 2024.
KEY RATING DRIVERS
Fitch Net Cash Flow: Fitch's stressed net cash flow (NCF) for the
portfolio is estimated at $38.0 million. This is 6.5% lower than
the issuer's NCF and 11.2% above the TTM ended in August 2024 NCF.
Fitch's NCF is higher than the TTM ended in August 2024 NCF due to
lower real estate taxes as a result of the four properties entering
tax abatement programs. Assuming full unabated real estate taxes,
Fitch's NCF would be 0.1% below the TTM ended in August 2024 NCF.
Fitch applied a 7.5% cap rate, resulting in a Fitch value of
approximately $506.7 million.
Fitch Leverage: The $463.0 million total mortgage loan ($165,004
per unit) has a Fitch stressed debt service coverage ratio (DSCR),
loan-to-value (LTV) ratio and debt yield (DY) of 0.97x, 91.4% and
8.2%, respectively. Based on total debt of $533.0 million ($189,950
per unit), inclusive of the $70.0 million mezzanine loan, the Fitch
stresses DSCR, LTV and DY are 0.84x, 105.2% and 7.1%, respectively.
The mortgage loan represents approximately 62.7% of the portfolio
appraised value of $738.3 million. The total debt represents
approximately 72.2% of the portfolio appraised value.
Geographically Diverse Portfolio: The portfolio is secured by 2,806
units across nine garden-style multifamily properties located in
six states across eight markets. The largest property contains
13.7% of the units and 13.3% of the allocated loan amount (ALA). No
other property constitutes more than 13.5% of the total units or
12.6% of the ALA. No state or market represents more than 29.5% of
the ALA. The portfolio's effective geographic count is 7.4.
Institutional Sponsorship and Management: The loan sponsor and
property manager, West Shore, is a fully integrated real estate
investment firm focused on the acquisition and management of
multifamily assets. West Shore currently owns and operates a
portfolio comprising more than 15,000 units across 46 multifamily
properties. West Shore's portfolio spans the U.S., with a focus on
the Sunbelt region. Led by Steve and Lee Rosenthal, who have
decades of experience in the multifamily market, West Shore has
raised over $1.0 billion across six funds. Investors in these funds
include ultra-high-net-worth individuals and family offices.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
Declining cash flow decreases property value and capacity to meet
its debt service obligations. The table below indicates the
model-implied rating sensitivity to changes in one variable, Fitch
NCF:
- Original Rating: 'AAAsf' / 'AA-sf' / 'A-sf' / 'BBB-sf' / 'BBsf' /
'BB-sf';
- 10% NCF Decline: 'AAsf' / 'A-sf' / 'BBB-sf' / 'BBsf' / 'BB-sf' /
'B+sf'.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
Improvement in cash flow increases property value and capacity to
meet its debt service obligations. The table below indicates the
model-implied rating sensitivity to changes to in one variable,
Fitch NCF:
- Original Rating: 'AAAsf' / 'AA-sf' / 'A-sf' / 'BBB-sf' / 'BBsf' /
'BB-sf';
- 10% NCF Increase: 'AAAsf' / 'AAsf' / 'A+sf' / 'BBBsf' / 'BBB-sf'
/ 'BB+sf'.
USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10
Fitch was provided with Form ABS Due Diligence-15E (Form 15E) as
prepared by PricewaterhouseCoopers LLP. The third-party due
diligence described in Form 15E focused on a comparison and
re-computation of certain characteristics with respect to the
mortgage loan. Fitch considered this information in its analysis
and it did not have an effect on Fitch's analysis or conclusions.
ESG Considerations
Fitch increased the ESG score for exposure to environmental impacts
to '3' from '2' due to four properties in the portfolio (44.9% of
ALA) being located in a Tier 1 wind zone, including Preserve at
Godley Station (13.3% of ALA), Uptown Village (11.6%), Parker at
East Village (11.1%) and 17 South (8.9%).
The loan's insurance policy includes wind/named storm coverage for
full location limits up to a maximum loss limit of $100.0 million,
which applies per occurrence and reinstates after every loss.
Resilience Insurance Analytics considered an aggregate probable
maximum loss (PML) for the four properties located in Tier 1 wind
zones across a range of scenarios, including 500-year ($15.0
million PML), 1,000-year ($21.9 million PML), 5,000-year ($43.7
million PML) and 10,000-year return periods ($56.2 million PML).
The maximum loss limit for wind/named storms compares favorably to
all four scenarios.
Notably, Hurricane Helene made landfall in the eastern Florida
Panhandle on Sept. 26, 2024. Four properties in the portfolio —
Preserve at Godley Station, Slate Nexton, 17 South and Vantage at
Wildewood — are located in affected areas. The borrower confirmed
the properties are operational and did not suffer any major damage
as a result of the storm.
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.
CULLOO ENTERTAINMENT: Commences Subchapter V Bankruptcy Process
---------------------------------------------------------------
Culloo Entertainment LLC filed Chapter 11 protection in the Eastern
District of Pennsylvania. According to court filing, the Debtor
reports $2,739,544
in debt owed to 1 and 49 creditors. The petition states funds will
be available to unsecured creditors.
About Culloo Entertainment
Culloo Entertainment LLC sought relief under Subchapter V of
Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D. Pa. Case No.
24-13553) on Oct. 1, 2024. In the petition filed by James De
Berardine, as manager, the Debtor reports total assets of $191,243
and total liabilities of $2,739,544.
The Honorable Bankruptcy Judge Ashely M. Chan oversees the case.
The Debtor is represented by:
Joseph Rutala, Esq.
RUTALA LAW GROUP, PLLC
1500 JFK Blvd., Suite 1203
Philadelphia, PA 19102
Tel: (215) 360-3969
E-mail: joe@rutala.com
CYANOTECH CORP: Michael Davis Holds 25% Stake as of October 1
-------------------------------------------------------------
Michael A. Davis disclosed in Schedule 13D/A Report filed with the
U.S. Securities and Exchange Commission that as of October 1, 2024,
Mr. Davis, along with affiliated entities -- Janet J. Johnstone,
Nyracai Davis Irrevocable Trust, Nettizane J. Davis Irrevocable
Trust, Nettizane Johnstone Davis GST Exempt Trust, Nyracai
Johnstone Davis GST Exempt Trust, and The Michael Arlen Davis
Revocable Trust -- beneficially owned shares of Cyanotech Corp.'s
Common Stock.
(a) Davis: 1,788,756 shares (25%), which is inclusive of
1,478,598 shares held directly by the Revocable Trust, 12,119
shares held directly by Davis, 31,250 shares held directly by
Johnstone, 75,000 shares held directly by the Nyracai Trust, 75,000
shares held directly by the Nettizanne Trust, 58,000 shares held by
Nettizanne GST Trust and 58,789 shares held by Nyracai GST Trust.
Each of Davis, the Revocable Trust, Johnstone, the Nyracai Trust,
the Nettizanne Trust, the Nettizanne GST Trust, and the Nyracai GST
Trust disclaims any beneficial ownership in any Common Stock
beneficially owned by the other Reporting Persons, except to the
extent of their respective pecuniary interests therein.
(b) Davis has the sole power to vote and dispose of 1,607,506
shares, including 12,119 shares held directly by Davis, 1,478,598
shares held directly by the Revocable Trust, of which Davis is the
sole trustee, 58,000 shares held by Nettizanne GST Trust, of which
Davis is the sole trustee, and 58,789 shares held by Nyracai GST
Trust, of which Davis is the sole trustee.
Davis may be deemed to share the power to vote and dispose of
181,250 shares of Common Stock as follows:
* 31,250 shares of Common Stock held directly by Johnstone,
the spouse of Davis;
* 75,000 shares held by the Nyracai Trust, of which Davis and
Wells Fargo are co-trustees; and
* 75,000 shares held by the Nettizanne Trust, of which Davis
and Wells Fargo are co-trustees.
Johnstone has the sole power to vote and dispose of 31,250 shares
of Common Stock held by her, and she may be deemed to share the
power to vote and dispose of 12,119 shares of Common Stock held by
Davis, the spouse of Johnstone.
The Revocable Trust, of which Davis is the sole trustee, has the
sole power to vote and dispose of 1,390,440 shares.
Nettizanne GST Trust, of which Davis is the sole trustee, has the
sole power to vote and dispose of 58,000 shares.
Nyracai GST Trust, of which Davis is the sole trustee has the sole
power to vote and dispose of 58,789 shares.
On October 1, 2024, the Revocable Trust received 13,158 shares of
the Common Stock from Cyanotech representing shares of restricted
stock paid to Davis as quarterly director fees in lieu of cash, the
number issued being calculated using a price of $0.76 per share. On
each of September 11 through September 30, 2024 and October 1, 2024
the Revocable Trust purchased in open market purchases 5,000 shares
of the Common Stock at a price respectively of $0.83 per share,
$0.83 per share, $0.82 per share, $0.82 per share, $0.74 with
respect to 4,000 shares and $0.72 with respect to 1,000 shares,
$0.78 per share, $0.74 per share, $0.77 per share, $0.77 per share,
$0.73 per share, $0.77 per share, $0.77 per share, $0.77 per share,
$0.76 per share, and $0.76 per share. All of such open market
purchases were made pursuant to a programmed plan of transactions
adopted on March 6, 2024 pursuant to SEC Rule 10b5-1(c).
Percentage interests in shares of Common Stock reported in this
Schedule 13D are based on 7,155,858 shares of Common Stock
outstanding at October 1, 2024 based on information provided by
Cyanotech.
A full-text copy of Mr. Davis' SEC Report is available at:
https://tinyurl.com/3ypw84k9
About Cyanotech Corp.
Cyanotech Corporation, located in Kailua-Kona, Hawaii, was
incorporated in the state of Nevada on March 3, 1983, and is listed
on the NASDAQ Capital Market under the symbol "CYAN." The Company
is engaged in the production of natural products derived from
microalgae for the nutritional supplements market.
Newport Beach, Calif.-based Grant Thornton LLP, the Company's
auditor since 2008, issued a "going concern" qualification in its
report dated June 26, 2024, citing that the Company sustained
operating losses and negative cash flows from operations for the
fiscal years ended March 31, 2024, and 2023. Further, the Company
was not in compliance with two debt covenant requirements at March
31, 2024, and one debt covenant requirement at March 31, 2023.
These conditions, along with other matters, raise substantial doubt
about the Company's ability to continue as a going concern.
Cyanotech reported a net loss of $5.3 million for the year ended
March 31, 2024, compared to a net loss of $3.4 million for the year
ended March 31, 2023. As of June 30, 2024, the Company had $24.43
million in total assets, $13.77 million in total liabilities, and
$10.66 million in total stockholders' equity.
DIAMOND G INSPECTION: Case Summary & 20 Top Unsecured Creditors
---------------------------------------------------------------
Debtor: Diamond G Inspection, Inc.
11050 W. Little York, Bldg. G
Houston, TX 77041
Chapter 11 Petition Date: October 9, 2024
Court: United States Bankruptcy Court
Southern District of Texas
Case No.: 24-90530
Judge: Hon. Alfredo R Perez
Debtor's Counsel: Vincent Slusher, Esq.
LAW OFFICE OF VINCENT SLUSHER
2121 N. Akard St
Suite 250
Dallas TX 75201
Tel: (214) 478-5926
E-mail: vince.slusher@outlook.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Steve Steen as president.
A copy of the Debtor's list of 20 largest unsecured creditors is
available for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/XAXQZMQ/Diamond_G_Inspection_Inc__txsbke-24-90530__0002.0.pdf?mcid=tGE4TAMA
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/XFSOWVI/Diamond_G_Inspection_Inc__txsbke-24-90530__0001.0.pdf?mcid=tGE4TAMA
DISTRICT 5 BOUTIQUE: Unsecureds to Get $60K per Year for 5 Years
----------------------------------------------------------------
District 5 Boutique LLC filed with the U.S. Bankruptcy Court for
the District of New Jersey a Small Business Plan of Reorganization
dated September 3, 2024.
District 5 is a luxury women's dress boutique. District 5 works
directly with high end designers globally and carry stock dresses
as well as special orders of different collections. District 5 is
an online only platform with no physical storefront.
District 5 was first formed in 2009 by Theresa DeMarco who is the
sole founder and owner. Ms. DeMarco runs the day-to-day operations
of the Debtor entirely online, with a warehouse located in
Kenilworth. The warehouse is located at 303 14th Street,
Kenilworth, New Jersey 07033. The location comprises of
approximately 2,000 square feet of warehouse and office space
utilized daily by our staff to perform warehousing and shipping
operations. The space is under lease agreement with United Realty.
The Debtor will make quarterly installments ranging from $10,000.00
to $20,000.00 for a 5-year period for distributions to impaired
unsecured creditors. Distributions will total $60,000.00 annually
and a total of $300,000.00 over life of plan. Furthermore, the
Debtor will be pursuing preference claims and claims against former
credit card processors that are improperly withholding funds from
the Debtor.
The plan payments plus the net proceeds from the claims against
third parties will be used first to satisfy pre-petition arrears to
Newtek, then to administrative expenses, then to priority claims
and lastly then towards general unsecured claims. In exchange for
receipt of distributions, creditors will release the reorganized
debtor of any further liability except for its obligations set
forth in this Plan of reorganization.
Class 4 consists of General Unsecured Claims. The Debtor will pay
all Allowed General Unsecured Claims in Quarterly installments over
a 5-year period commencing as of the Effective Date as follows: (i)
$20,000.00 on December 31st; (ii) $15,000.00 on March 31st; (iii)
$15,000.00 on June 30th and (iv) $10,000.00 on September 30th. This
Class is impaired.
Ms. DeMarco to maintain her ownership interest in the debtor.
The plan payments will come from revenues from the Debtor's ongoing
business operations.
On Confirmation of the Plan, all property of the Debtor, tangible
and intangible, including, without limitation, licenses, furniture,
fixtures and equipment, will revert, free and clear of all Claims
and Equitable Interests except as provided in the Plan, to the
Debtor. The Debtor expects to have sufficient cash on hand to make
the payments required on the Effective Date.
A full-text copy of the Plan of Reorganization dated September 3,
2024 is available at https://urlcurt.com/u?l=0tf92h from
PacerMonitor.com at no charge.
Counsel to the Debtor:
Donald F. Campbell Jr., Esq.
GIORDANO HALLERAN & CIESLA, PC
125 Half Mile Road, Suite 300
Red Bank, NJ 07701
Phone: (732) 741-3900
E-mail: dcampbell@ghclaw.com
About District 5 Boutique
District 5 Boutique, LLC, is a family-owned retailer of clothing
and clothing accessories in Kenilworth, N.J.
District 5 Boutique filed Chapter 11 petition (Bankr. D.N.J. Case
No. 24-15612) on June 3, 2024, with $100,000 to $500,000 in assets
and $1 million to $10 million in liabilities. Theresa DeMarco,
sole member, signed the petition.
The Debtor is represented by Donald F. Campbell, Jr., Esq., at
Giordano, Halleran & Ciesla, P.C.
DREAM FINDERS: Fitch Alters Outlook on BB- LongTerm IDR to Positive
-------------------------------------------------------------------
Fitch Ratings has affirmed the ratings of Dream Finders Homes, Inc.
(DFH), including the company's Long-Term Issuer Default Rating
(IDR) at 'BB-' and its unsecured debt and Recovery Rating at
'BB-'/'RR4'. The Rating Outlook has been revised to Positive from
Stable.
The Outlook revision reflects DFH's increased scale and improving
diversification following its acquisition of Crescent Homes in
early 2024 and organic expansion into new markets. Fitch expects
EBITDA leverage will remain strong for the IDR, while DFH's net
debt-to-capitalization ratio is forecast to be below its positive
sensitivity for the 'BB-' IDR in 2025.
Fitch will consider upgrading DFH's IDR to 'BB' if its operating
performance meets or exceeds its rating case forecast, including
net debt to capitalization approaching 45% at YE 2024 and at or
below 40% by YE 2025. An upgrade of the IDR would also be driven by
DFH successfully growing share in the new markets it has recently
entered.
Key Rating Drivers
Improving Diversification: DFH continues to improve its geographic
diversification, entering the Charleston and Greenville, SC and
Nashville, TN markets through its acquisition of Crescent Homes. It
has also expanded organically in Tampa, FL and Phoenix, AZ this
year. Fitch expects the company to grow market share in these new
markets. DFH operates 222 communities across 10 states, with
meaningful concentration in Florida and Texas. This exposes DFH to
significant impacts during regional downturns. The company's core
focus is on entry-level and first-time move-up homebuyers, but it
also provides offerings for second move-up and active adult
buyers.
Modest Leverage: DFH's leverage increased following its acquisition
of Crescent Homes in February 2024. Net debt to capitalization
(excluding $50 million of cash classified by Fitch as not readily
available for working capital and including convertible preferred
stock as debt) increased from 36.6% at YE 2023 to 51.6% as of June
30, 2024. Fitch expects this ratio will decline to around 46% at YE
2024 and at or below 40% by the end of 2025, providing DFH with
sufficient cushion relative to the negative sensitivity of 55% for
the 'BB-' IDR. EBITDA leverage of 2.3x for the LTM ending June 30,
2024 (compared to 1.7x at the end of 2023) remains low relative to
DFH's IDR.
Larger Scale: DFH has grown meaningfully since 2009 and is now the
14th largest homebuilder in the U.S. by deliveries. Organic growth
has been supplemented by targeted acquisitions that align with the
company's land-light strategy. In February 2024, DFH acquired
Crescent Homes for $210 million, expanding its operations in the
Charleston and Greenville, SC and Nashville, TN markets.
In 2021, DFH acquired McGuyer Homebuilders, Inc. for $471 million.
This acquisition increased its operation in the Austin metro market
and expanded its operations into the Texas markets of Houston,
Dallas and San Antonio. Homebuilding revenue has more than doubled
since 2021. Fitch expects DFH will continue to evaluate
acquisitions as well as internal growth opportunities to enter new
markets or enhance its presence in existing markets.
Land-Light Strategy: DFH operates an asset-light lot acquisition
strategy primarily through finished lot option contracts and land
bank option contracts. It owns a one-year supply of lots, 49% of
which are homes in backlog. DFH controls an additional 5.3 years of
land through option contracts. Fitch views the company's land
strategy positively, as it minimizes capital outlays and affords
DFH the flexibility to negotiate or abandon unfavorable contracts
during downturns to help preserve gross margins.
Write-downs and impairments should primarily be limited to
forfeiture of option deposits during cyclical downturns. Option
deposits totaled $301 million as of 2Q24 and construction in
process and finished homes accounted for 88% of owned real estate
inventory.
Cash Flow: Fitch expects the company will generate positive CFO
during most periods in a housing cycle due to its land-light
strategy. However, Fitch projects DFH will report negative CFO in
2024 as it increases its investment in inventory and construction
starts, including higher speculative activity and greenfield
expansion into new markets. Fitch expects DFH will report negative
CFO of $100 million to $150 million this year and generate positive
CFO of 4%-5% of revenue in 2025. Construction in process and
finished homes of $1.67 billion is almost 2x its construction line
debt.
Relatively Stable Margins: Fitch expects EBITDA margins will settle
between 13.5% and 14.5% in 2024 and 2025, lower than the 15.4%
reported in 2023 as incentives to drive demand remain elevated and
SG&A expenses increase to support DFH's growth from continued
expansion. The company's increased scale should allow it to
generate higher margins compared with the high-single-digit to
low-double-digit EBITDA margin reported in 2019-2021.
Financial Flexibility Supports Growth: DFH has sufficient liquidity
in terms of cash, revolver availability and funds from operations
(FFO) to sustain its operations and support its growth. The company
successfully issued $300 million of senior secured notes in August
2023 and used the proceeds to repay borrowings under the revolver.
The company may access the unsecured debt markets to further pay
down revolver borrowings or fund its growth.
Ownership Structure: DFH is a public company but with concentrated
ownership. Patrick Zalupski, DFH's founder, president, CEO and
chairman, exerts significant influence on the company given the 85%
combined voting power of DFH's Class A and Class B common stock.
The company has so far been disciplined with its capital allocation
strategy, including very modest share repurchase activity.
Derivation Summary
DFH's 'BB-' IDR reflects its modest leverage, its conservative
operating model of acquiring land almost exclusively through option
contracts, and expectations of positive cash flow from operations
(CFO) during most periods in a housing cycle. The ratings also
reflect the company's limited, although improving, geographic and
product diversification, historically aggressive growth strategy,
and concentrated ownership structure.
DFH's closest peer is M.D.C. Holdings, Inc. (BBB-/Stable). DFH is
the 14th largest U.S. homebuilder, delivering 7,637 homes during
the LTM ending June 30, 2024. By comparison, MDC (11th largest)
delivered 9,164 homes during the same period. DFH's net debt to
capitalization is higher than MDC, but its EBITDA leverage is lower
and its EBITDA margins are higher. DFH employs a more conservative
land-light strategy and its owned-lot position is meaningfully
lower than that of MDC.
Fitch expects DFH will generate more consistent CFO than MDC over
the long term. MDC is more geographically diversified and has a
long track record of maintaining a very conservative posture
through housing cycles. It also has financial flexibility
comparable to high investment grade peers.
Key Assumptions
- Single-family housing starts increase 3%-4% annually in 2024 and
2025;
- Homebuilding revenue increases 10%-11% in 2024 and grows
4.5%-5.5% in 2025;
- EBITDA margin of 13.5%-14.5% in 2024 and 2025;
- CFO of negative $100 million to $150 million in 2024 and 4%-5% of
homebuilding revenue in 2025;
- Net debt to capitalization of 45%-50% in 2024 and 35%-40% in
2025;
- EBITDA leverage between 2.0x and 3.0x in 2024 and 2025.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- The company further enhances its geographic diversification and
local market leadership positions;
- Fitch's expectation that net debt to capitalization will sustain
below 45%;
- Fitch's expectation that EBITDA leverage will consistently be
below 3.5x;
- (CFO-capex)/debt sustained above 7.5%.
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Net debt to capitalization sustained above 55%;
- EBITDA leverage consistently above 4.0x;
- (CFO-capex)/debt sustained below 5%;
- EBITDA interest coverage ratio falls below 2.5x;
- Deterioration in the company's liquidity profile, including
consistently negative CFO and limited availability under its
revolving credit facility.
Liquidity and Debt Structure
Sufficient Liquidity: DFH has sufficient liquidity with $274.8
million of cash as of June 30, 2024 and about $200 million of
borrowing availability under its $1.4 billion revolving credit
facility. In June 2024, the company amended the credit facility,
which increased the commitment to $1.39 billion and extended the
maturity date to June 2027 ($60 million of the commitments did not
extend and will mature in June 2025).
Manageable Debt Maturity Schedule: The company has no near-term
debt maturities beyond its revolver. Holders of the company's
convertible preferred stock can convert these securities into Class
A common stock after the fifth anniversary of its issuance (Sept.
1, 2026). The company also has the option to call these securities
during the fourth year (i.e. after the third anniversary) following
its issuance.
Issuer Profile
Dream Finders Homes, Inc., the 14th largest U.S. homebuilder,
delivered 7,314 homes in 2023. Founded in 2009, it operates 222
active communities in 10 states focusing on single-family homes for
entry-level, first-time move-up, second move-up, and active adult
buyers.
Summary of Financial Adjustments
Historical and projected EBITDA is adjusted to add back interest
expense included in cost of sales, and excludes impairment charges
and land option abandonment costs as well as other non-recurring
items.
Fitch also excludes the EBITDA and debt of DFH's financial services
(FS) operations as this subsidiary's only major debt, a mortgage
repurchase facility, is non-recourse to DFH; the FS subsidiary
generally sells the mortgage it originates and the related
servicing rights to third-party purchasers shortly after
origination. However, as part of its captive finance adjustment,
Fitch assumes a capital structure for the FS operation that is
sufficiently robust for that entity to support its debt without
reliance on the corporate entity.
Fitch applies a hypothetical capital injection from the corporate
entity to achieve a target capital structure (1.0x debt/equity)
that is indicative of a self-sustaining credit profile for DFH's FS
operations. Fitch has reduced DFH's homebuilding unrestricted cash
by $43 million during the forecast period to account for this
hypothetical capital injection. Shareholders' equity is assumed to
be unaffected. Fitch reviews historical CFO on a consolidated basis
and also estimates CFO excluding the FS operations.
MACROECONOMIC ASSUMPTIONS AND SECTOR FORECASTS
Fitch's latest quarterly Global Corporates Macro and Sector
Forecasts data file which aggregates key data points used in its
credit analysis. Fitch's macroeconomic forecasts, commodity price
assumptions, default rate forecasts, sector key performance
indicators and sector-level forecasts are among the data items
included.
ESG Considerations
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Recovery Prior
----------- ------ -------- -----
Dream Finders
Homes, Inc. LT IDR BB- Affirmed BB-
senior unsecured LT BB- Affirmed RR4 BB-
preferred LT B Affirmed RR6 B
E-Z ROLL CASTERS INC: Files for Chapter 11 Bankruptcy
-----------------------------------------------------
E-Z Roll Casters Inc. filed Chapter 11 protection in the Eastern
District of Arkansas. 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
Nov. 6, 2024 at 11:00 a.m. at Ch. 11 Tele-Meeting of Creditors.
About E-Z Roll Casters Inc.
E-Z Roll Casters Inc. is a manufacturer of rigid and swivel
casters. The Company's distribution center is centrally located in
Conway, Arkansas. The Company offers wheels, casters, hand trucks,
pallet jacks, platform carts and other specialty items.
E-Z Roll Casters Inc. sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D. Ark. Case No. 24-13217) on October 2,
2024. In the petition filed by Martin Stewart Aist, as owner, the
Debtor reports estimated assets between $500,000 and $1 million and
estimated liabilities between $1 million and $10 million.
The Honorable Bankruptcy Judge Bianca M. Rucker handles the case.
The Debtor is represented by:
Joel G. Hargis, Esq.
CADDELL REYNOLDS LAW FIRM
PO Box 184
Fort Smith, AR 72902-0184
Tel: 479-782-5297
Fax: 479-782-5284
E-mail: jhargis@caddellreynolds.com
EDWARDS PETROLEUM: Commences Subchapter V Bankruptcy
----------------------------------------------------
Edwards Petroleum Transport LLC filed Chapter 11 protection in the
District of Nevada. According to court filing, the Debtor reports
between $1 million and $10 million in debt owed to 1 and 49
creditors. The petition states funds will be available to unsecured
creditors.
About Edwards Petroleum Transport
Edwards Petroleum Transport LLC is part of the general freight
trucking industry.
Edwards Petroleum Transport LLC sought relief under Subchapter V of
Chapter 11 of the Bankruptcy Code (Bankr. D. Nev. Case No.
24-15170) on Oct. 3, 2024. In the petition filed by Robert Egbert
Edwards, as managing member, the Debtor reports estimated assets
between $500,000 and $1 million and estimated liabilities between
$1 million and $10 million.
The Debtor is represented by:
Seth D Ballstaedt, Esq.
FAIR FEE LEGAL SERVICES
8751 W Charleston Blvd #230
Las Vegas, NV 89117
Tel: (702) 715-0000
Fax: (702) 666-8215
E-mail: help@bkvegas.com
ENVIVA INC: Posts $685.8 Million Net Loss in FY 2023
----------------------------------------------------
Enviva Inc. filed with the Securities and Exchange Commission its
Annual Report on Form 10-K disclosing a net loss of $685.8 million
on $1.2 billion of net revenue for the fiscal year ended December
31, 2023, compared to a net loss of $168.4 million on $1.1 billion
of net revenue for the fiscal year ended December 31, 2022.
The Company is presently undergoing Chapter 11 proceedings in the
United States Bankruptcy Court for the Eastern District of
Virginia.
Since the filing of the Chapter 11 Cases on March 12, 2024, the
Company's primary sources of liquidity include cash balances, cash
generated from operations, and availability under the DIP Credit
Facility. Envinva said, "Our primary liquidity needs are to fund
working capital, to service our debt, to invest in capital
expenditures for the maintenance, expansion, and optimization of
our existing plant and terminal assets, and to complete the
construction of a wood pellet production plant in Epes, Alabama."
"Excluding cash restricted for certain construction projects, our
liquidity as of December 31, 2023, was $177.1 million. As of July
31, 2024 our liquidity was $358.7 million, which includes $208.7
million of cash and $150.0 million available under the DIP
Facility."
"Proceeds of the DIP Facility may be used only in connection with
an approved budget (adjusted for agreed variances). The DIP
Facility will be made available in up to five draws. The first draw
of $150.0 million occurred on March 15, 2024, and an additional
$100.0 million was drawn on June 3, 2024 and July 22, 2024. Each
draw is subject to the satisfaction of certain conditions under the
DIP Credit Agreement, including compliance with the milestones set
forth in the RSA."
"Borrowings under the DIP Facility bear interest at a rate equal
to, at the Company's option, (i) the alternate base rate plus 7%
per annum or (ii) the adjusted SOFR rate plus 8% per annum. The
Debtors are required to pay certain other agreed fees to the DIP
Creditors and the agents under the DIP Credit Agreement."
"The DIP Credit Agreement contains usual and customary affirmative
and negative covenants and events of default for transactions of
this type. In addition, the Debtors are required to maintain a
minimum liquidity of $30.0 million."
"There can be no assurance that funding sources will continue to be
available, as our ability to generate cash flows from operations
and our ability to continue to access the DIP Facility may be
impacted by a variety of business, economic, legislative,
financial, and other factors, which may be outside of our
control."
"Our consolidated financial statements have been prepared assuming
that we will continue as a going concern and contemplate the
realization of assets and the satisfaction of liabilities in the
normal course of business. As a result of the Chapter 11 Cases, the
realization of assets and the satisfaction of liabilities are
subject to uncertainty. While operating as debtors in possession
under Chapter 11, we may sell or otherwise dispose of or liquidate
assets or settle liabilities, subject to the approval of the
Bankruptcy Court or as otherwise permitted by the Bankruptcy Code,
for amounts other than those reflected in the accompanying
consolidated financial statements. Further, the Plan could
materially change the amounts and classifications of assets and
liabilities reported in the consolidated financial statements. The
accompanying consolidated financial statements do not include any
adjustments related to the recoverability and classification of
assets or the amounts and classification of liabilities or any
other adjustments that might be necessary should we be unable to
continue as a going concern or as a consequence of the Chapter 11
Cases."
"As a result of our financial condition, the defaults under our
debt agreements, and the risks and uncertainties surrounding the
Chapter 11 Cases, substantial doubt exists regarding our ability to
continue as a going concern. We believe that, if we receive the
approval of the Plan by the Bankruptcy Court and are able to
successfully implement the Plan, among other factors, substantial
doubt regarding our ability to continue as a going concern could be
alleviated."
As of December 31, 2023, the Company had $2.5 billion in total
assets, $2.7 billion in total liabilities, and $160.5 million in
total shareholders' deficit.
A full-text copy of the Company's Form 10-Q is available at:
https://tinyurl.com/yjtcznwu
About Enviva Inc.
Headquartered in Bethesda, Md., Enviva Inc. --
https://www.envivabiomass.com/ -- is a producer of industrial wood
pellets, a renewable and sustainable energy source produced by
aggregating a natural resource, wood fiber, and processing it into
a transportable form, wood pellets. Enviva exports its wood pellets
to global markets through its deep-water marine terminals at the
Port of Chesapeake, Virginia, the Port of Wilmington, North
Carolina, and the Port of Pascagoula, Mississippi, and from
third-party deep-water marine terminals in Savannah, Georgia,
Mobile, Alabama, and Panama City, Florida.
Enviva Inc. and certain affiliates sought protection under Chapter
11 of the U.S. Bankruptcy Code (Bankr. E.D. Va. Lead Case No.
24-10453) on March 13, 2024. In the petition signed by Glenn T.
Nunziata, interim chief executive officer and chief financial
officer, Enviva Inc. disclosed $2,893,581,000 in assets and
$2,631,263,000 in liabilities.
Judge Brian F. Kenney oversees the cases.
The Debtors tapped Vinson & Elkins, LLP as general bankruptcy
counsel; Kutak Rock, LLP as local counsel; Lazard Freres & Co., LLC
as investment banker; Alvarez & Marsal Holdings, LLC as financial
advisor; and Kurtzman Carson Consultants, LLC as notice and claims
agent.
The U.S. Trustee for Region 4 appointed an official committee to
represent unsecured creditors in the Debtors' Chapter 11 cases.
EVOFEM BIOSCIENCES: Amends Merger Deal, Closes Private Placement
----------------------------------------------------------------
Evofem Biosciences, Inc. disclosed in a Form 8-K Report filed with
the U.S. Securities and Exchange Commission that on September 6,
2024, the Company, Aditxt, Inc. and Adifem, Inc. entered into the
third amendment to the A&R Merger Agreement, to:
(i) change the date of the Third Parent Equity Investment Date
from September 30, 2024 to October 2, 2024,
(ii) change the Third Parent Equity Investment from 1,500
shares of F-1 Preferred to 720 shares of F-1 Preferred, and
(iii) amend the Fourth Parent Equity Investment (as defined in
the A&R Merger Agreement) from 1,500 shares of F-1 Preferred to
2,280.
As previously disclosed, on July 12, 2024 the Company, Aditxt and
Adifem, a wholly-owned subsidiary of Aditxt, entered into the
Amended and Restated Agreement and Plan of Merger, whereby the
Adifem, Inc. was intended to merge with and into the Company with
the Company being the surviving company and wholly-owned subsidiary
of Aditxt.
Securities Purchase Agreement
Furthermore, as previously reported in that Current Report on Form
8-K dated July 18, 2024, on July 12, 2024, the Company, Aditxt, and
the Merger Sub entered into the A&R Merger Agreement.
As part of the consideration for the A&R Merger Agreement, the
Company agreed to enter into a Securities Purchase Agreement for a
private placement under the Third Parent Equity Investment with
Aditxt. The closing of the Private Placement was completed on
October 2, 2024.
Pursuant to the Purchase Agreement, Aditxt agreed to purchase an
aggregate of 460 shares of the Company's Series F-1 Preferred
Stock, par value $0.0001 per share for an aggregate purchase price
of $460,000. The powers, preferences, rights, qualifications,
limitations and restrictions applicable to the F-1 Preferred Stock
are set forth in the F-1 Preferred certificate of designation, as
filed with the Commission in that Current Report on Form 8-K dated
on December 12, 2023.
The Purchase Agreement contains customary representations and
warranties of the Company and Aditxt.
Registration Rights Agreement
In connection with the closing of the Purchase Agreement, the
Company entered into a Registration Rights Agreement with Aditxt,
which provides that the Company will register the resale the shares
of Company common stock issuable upon conversion of the F-1
Preferred Shares. The Company is required to prepare and file a
registration statement on Form S-3 with the Commission no later
than the 300th calendar day following the signing date for the
Purchase Agreement and to use its commercially reasonable efforts
to have the registration statement declared effective by the
Commission within 90 days of the filing of such registration
statement, subject to certain exceptions and specified penalties if
timely effectiveness is not achieved.
The Company has also agreed to, among other things, indemnify
Aditxt, its officers, directors, agents, partners, members,
managers, stockholders, affiliates, investment advisers and
employees of each of them under the registration statement from
certain liabilities and pay all fees and expenses (excluding any
underwriting discounts and selling commissions) incident to the
Company's obligations under the Registration Rights Agreement.
The securities to be issued and sold to Aditxt under the Purchase
Agreement will not be registered under the Securities Act of 1933,
as amended in reliance on the exemption from registration provided
by Section 4(a)(2) of the Securities Act and/or Rule 506 of
Regulation D promulgated thereunder, or under any state securities
laws.
About Evofem
Evofem Biosciences, Inc., is a San Diego-based commercial-stage
biopharmaceutical company with a strong focus on innovation in
women's sexual and reproductive health. The Company's first
commercial product, Phexxi, was approved by the FDA on May 22,
2020. Phexxi is the first and only FDA-approved, hormone-free
prescription contraceptive vaginal gel.
Walnut Creek, Calif.-based BPM, LLP, the Company's auditor since
2023, issued a "going concern" qualification in its report dated
March 26, 2024, citing that the Company has suffered recurring
losses from operations; negative cash flows from operations since
inception; has received a notice of default for its convertible
notes, and does not have sufficient capital to repay such
obligations (which are now currently due); and has a net capital
deficiency that raises substantial doubt about its ability to
continue as a going concern.
As of June 30, 2024, Evofem Biosciences had $8.6 million in total
assets, $73.2 in total liabilities, and $69.3 million in total
stockholders' deficit.
EVOFEM BIOSCIENCES: Receives Notice of Default From Future Pak
--------------------------------------------------------------
Evofem Biosciences, Inc. disclosed in a Form 8-K Report filed with
the U.S. Securities and Exchange Commission that on September 27,
2024, Future Pak, LLC, a Michigan limited liability company, as
agent for certain purchasers, provided a Notice of Event of Default
and Reservation of Rights relating to the Securities Purchase and
Security Agreement dated April 23, 2020, as amended, by and among
the Company, Designated Agent, as certain guarantors and the
purchasers. The Notice of Default claims that by entering into
arrangements to repay certain existing obligations, including
obligations owed to the U.S. Department of Health and Human
Services, an Event of Default has occurred under Section 9.1(e) of
the SPA.
According to the Notice of Default, the Designated Agent has
accelerated repayment of the outstanding principal balance owed by
the Company under the Securities Purchase Agreement. If all
Purchasers exercise the Section 5.7 Option, the repurchase price
would be equal to approximately $106.8 million. Pursuant to Section
5.7(b) of the SPA, upon the occurrence of an Event of Default, each
Purchaser may elect, at its option, to require the Company to
repurchase the Note held by such Purchaser (or any portion thereof)
at a repurchase price equal to two times the sum of the outstanding
principal balance and all accrued and unpaid interest thereon, due
within three business days after such Purchaser delivers a notice
of such election.
The Company strongly disagrees with the Designated Agent's claim
that an Event of Default has occurred. The Company intends to
vigorously contest any attempt by the Designated Agent and the
Purchasers to exercise their default rights and remedies under the
SPA.
About Evofem
Evofem Biosciences, Inc., is a San Diego-based commercial-stage
biopharmaceutical company with a strong focus on innovation in
women's sexual and reproductive health. The Company's first
commercial product, Phexxi, was approved by the FDA on May 22,
2020. Phexxi is the first and only FDA-approved, hormone-free
prescription contraceptive vaginal gel.
Walnut Creek, Calif.-based BPM, LLP, the Company's auditor since
2023, issued a "going concern" qualification in its report dated
March 26, 2024, citing that the Company has suffered recurring
losses from operations; negative cash flows from operations since
inception; has received a notice of default for its convertible
notes, and does not have sufficient capital to repay such
obligations (which are now currently due); and has a net capital
deficiency that raises substantial doubt about its ability to
continue as a going concern.
As of June 30, 2024, Evofem Biosciences had $8.6 million in total
assets, $73.2 in total liabilities, and $69.3 million in total
stockholders' deficit.
FAIRFIELD SENTRY: UBS Loses Bid to Dismiss 5th Amended Complaint
----------------------------------------------------------------
In the case captioned as FAIRFIELD SENTRY LTD. (In Liquidation), et
al., Plaintiffs, v. ABN AMRO SCHWEIZ AG a/k/a AMRO (SWITZERLAND)
AG, et al., Defendants, Adv. Pro. No. 10-03635 (JPM) (Bankr.
S.D.N.Y.), the Honorable John P. Mastando III of the United States
Bankruptcy Court for the Southern District of New York denied UBS
AG's motion to dismiss the Fifth Amended Complaint filed by the
Liquidators for lack of personal jurisdiction.
UBS AG is an Aktiengesellschaft, organized under Swiss company law,
with registered offices in Zurich and Basel, Switzerland. UBS AG
maintained branches in the United States, but its principal place
of business was in Switzerland. The Amended Complaint identifies
UBS AG New York and UBS AG Zurich as two separate entities.
This adversary proceeding was filed on September 21, 2010. Kenneth
M. Krys and Greig Mitchell, in their capacities as the duly
appointed Liquidators and Foreign Representatives of Fairfield
Sentry Limited (In Liquidation), Fairfield Sigma Limited (In
Liquidation), filed the Amended Complaint on August 11, 2021,
seeking the imposition of a constructive trust and recovery of over
$51.9 million in redemption payments made by Sentry and Sigma to
various entities known as the Citco Subscribers. Of that amount,
Defendant allegedly received $4,697,471.223 through a single
redemption payment from its investment in Sentry.
The dispute arises out of the decades-long effort to recover assets
of the Bernard L. Madoff Investment Securities LLC Ponzi scheme.
The Citco Subscribers allegedly invested, either for their own
account or for the account of others, into several funds --
including Sentry and Sigma -- that channeled investments into
BLMIS.
Sentry was a direct feeder fund in that it was established for the
purpose of bringing investors into BLMIS, thereby allowing Madoff's
scheme to continue. Sigma, in contrast, was an indirect feeder
fund, established to facilitate investment in BLMIS through Sentry
for foreign currencies. BLMIS used investments from feeder funds,
like the Fairfield Funds, to satisfy redemption requests from other
investors in the scheme. Without new investors, BLMIS would have
been unable to make payments to those who chose to withdraw their
investments, and the scheme would have fallen apart.
The Amended Complaint alleges that investors received payments on
account of their shares in the Fairfield Funds based on a highly
inflated Net Asset Value. The Citco Subscribers and the beneficial
shareholders were allegedly such investors. To calculate the NAV,
administrators used statements provided by BLMIS that showed
"securities and investments, or interests or rights in securities
and investments, held by BLMIS for the account of Sentry." In fact,
no securities were ever bought or sold by BLMIS for Sentry, and
none of the transactions on the statements ever occurred. The money
sent to BLMIS by the Fairfield Funds for purchase of securities was
instead used by Bernard Madoff to pay other investors or was
"misappropriated by Madoff for other unauthorized uses." The NAVs
were miscalculated, and redemption payments were made in excess of
the true value of the shares. The Fairfield Funds were either
insolvent when the redemption payments were made or were made
insolvent by those payments.
The Amended Complaint also alleges that the Citco Subscribers,
including the purported agent of UBS AG, "had knowledge of the
Madoff fraud, and therefore knowledge that the Net Asset Value was
inflated" when the redemption payments were made. The Amended
Complaint further asserts that, while receiving redemption
payments, the Citco Subscribers "uncovered multiple additional
indicia that Madoff was engaged in some form of fraud" but "turned
a blind eye, [and] accept[ed] millions of dollars while willfully
ignoring or, at the very least, recklessly disregarding the truth
in clear violation of the law of the British Virgin Islands . . .
." These indicia included verification that there was no
"independent confirmation that BLMIS-held assets even existed,"
Madoff's failure to segregate duties, and BLMIS's "employing an
implausibly small auditing firm" rather than a reliable auditor. In
the face of red flags such as these, the Citco Subscribers and
other Citco entities purportedly "quietly reduced [their] own
exposure to BLMIS through the Funds, and significantly increase[ed]
[their] Custodian fees to offset the risk."
Defendant has moved to dismiss the Amended Complaint for lack of
personal jurisdiction, arguing that the Amended Complaint has not
sufficiently alleged minimum contacts with the forum to establish
personal jurisdiction over Defendant and that exercising personal
jurisdiction would be unreasonable.
The Liquidators argue that exercising jurisdiction over Defendant
would be reasonable and that Defendant's contacts with the United
States, through its own actions and those of its purported agent,
in knowingly and intentionally investing in the Fairfield Funds,
using U.S. correspondent accounts to receive payments from Sentry,
and conducting other business activities support personal
jurisdiction.
According to the Court, the Plaintiffs have shown that the
Defendant was able to use a foreign-based or a U.S.-based
correspondent bank account for its redemption requests and, through
its alleged agent, chose the latter.
UBS argues that any use of correspondent accounts that may have
occurred was incidental and insufficiently related to the harm for
which the plaintiffs seek redress.
The Court notes the Liquidators' allegations and supporting
documentation show the Defendant's use of U.S.-based accounts for
the redemption at issue. The redemption forms show that Defendant's
purported agent, the Citco Subscriber, designated the U.S.-based
correspondent bank, to which Sentry accordingly sent the relevant
payments. According to the Court, the intentional and repeated use
of New York-based correspondent accounts, while foreign options
existed, demonstrates Defendant's purposeful availment of the
banking system of the United States.
UBS states that while the subscription agreements contain forum
selection clauses specifying New York for claims relating to
subscriptions, there is no similar clause subjecting any party to
jurisdiction in New York for claims relating to redemptions. The
Defendant argues that the "absence of such clauses relating to
redemptions shows the parties intent not to subject themselves to
jurisdiction in New York for purposes other than subscriptions."
Judge Mastando says, "The Liquidators here rely on the subscription
agreements and private placement memoranda not to show consent to
jurisdiction, but to show that when Defendant invested in Sentry it
did so knowing that it would avail itself of the benefits and
protections of New York. The absence of any similar clauses in
redemption documents does not invalidate the import of the forum
selection clauses for these purposes. The subscription agreements,
signed by the Citco Subscriber as an agent of UBS AG, in this way,
support the Plaintiffs' showing of contacts with the forum."
The Court thus finds Defendant's selection and use of a U.S.
correspondent account through its agent and due diligence
concerning investments with BLMIS in New York support the Court's
exercise of jurisdiction over the claims for receiving redemption
payments from the Fairfield Funds with the knowledge that the NAV
was wrong. The contacts are not random, isolated, or fortuitous.
The contacts demonstrate UBS's purposeful activities aimed at New
York to effectuate transfers from Sentry. The Plaintiffs have thus
provided facts that sufficiently support a prima facie showing of
jurisdiction over the Defendant, the Court concludes.
A copy of the Court's decision is available at
https://urlcurt.com/u?l=xKwFPL
About Fairfield Sentry
Fairfield Sentry Limited is being liquidated under the supervision
of the Commercial Division of the High Court of Justice in the
British Virgin Islands. It is one of the funds owned by the
Fairfield Greenwich Group, an investment firm founded in 1983 in
New York. Fairfield Sentry and other Greenwich funds had among the
largest exposures to the Bernard L. Madoff fraud.
Fairfield Sentry became the subject of a BVI liquidation, and a BVI
court appointed Kenneth M. Krys and Greig Mitchell as Liquidators
and Foreign Representatives of Fairfield Sentry and Fairfield Sigma
under BVI law. The Liquidators then sought recognition of the BVI
liquidation as a foreign main proceeding by filing petitions under
Chapter 15 of the Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No.
10-13164) on June 14, 2010 in the Southern District of New York.
The Bankruptcy Court entered an order granting recognition of the
Fairfield Sentry case on July 22, 2010, enabling the Liquidators to
use the U.S. Bankruptcy Court to protect and administer Fairfield
Sentry's assets in the U.S.
FAMILY SOLUTIONS: Bankr. Administrator Unable to Appoint Committee
------------------------------------------------------------------
The U.S. Bankruptcy Administrator for the Eastern District of North
Carolina disclosed in a filing that no official committee of
unsecured creditors has been appointed in the Chapter 11 case of
Family Solutions of Ohio, Inc.
About Family Solutions of Ohio
Family Solutions of Ohio, Inc., a company in Wake Forest, N.C.,
filed Chapter 11 petition (Bankr. E.D.N.C. Case No. 24-03043) on
September 5, 2024, with $1 million to $10 million in both assets
and liabilities. John Hopkins Jr., vice president, signed the
petition.
Judge Pamela W. Mcafee oversees the case.
Hendren, Redwine & Malone, PLLC serves as the Debtor's legal
counsel.
FFAH CARVER: S&P Affirms 'B+' Rating on 2013A Revenue Bonds
-----------------------------------------------------------
S&P Global Ratings revised the outlook to negative from stable and
affirmed its 'B+' rating on Public Finance Authority, Wis.' series
2013A multifamily housing revenue bonds, issued for FFAH Carver
Gardens LLC, Fla.'s Carver Gardens apartments project.
"The negative outlook reflects our view that debt service coverage
is likely to drop in 2024 due to rising expenses, including capital
improvements, and if the decline is substantial enough compared to
2023 coverage of 0.81x, we could lower the rating," said S&P Global
Ratings credit analyst Caroline West.
Also, the property is currently under negotiations for a sale,
which could occur as soon as April 2025.
"We have uncertainty over future ownership and how future owners
would approach their management of the property, and so we would
not expect debt service coverage to improve materially in the near
term," Ms. West added.
S&P said, "We could take negative rating action if debt service
coverage remains well below 1x in 2024 without indication of
substantial recovery for fiscal 2025, or if there is indication
that operating cash flows might be insufficient to pay full and
timely debt service. Further, we could lower the rating or revise
the outlook to negative if our assessments of management and
governance and/or market position were to weaken, following a
potential sale of the property to new ownership.
"Although unlikely during the next 12 months, we could revise the
outlook to stable if the project demonstrates material financial
and operational performance improvement, as evidenced by a debt
service coverage ratio sustained above 1.0x for at least two
periods, along with improved physical condition, while maintaining
high occupancy rates. A higher rating would also require stability
in the oversight of the property."
FREE SPEECH: Auction for Alex Jones' Infowars Assets Set for Nov. 8
-------------------------------------------------------------------
Following an order of the U.S. Bankruptcy Court in the Southern
District of Texas, auction firms Tranzon Asset Advisors and
ThreeSixty Asset Advisors have announced its process for the sale
of Alex Jones' Infowars' assets, with an initial bid deadline of
Nov. 8.
By order of the Court, the Infowars assets are part of the
Alexander E. Jones bankruptcy estate and held by Jones'
wholly-owned business entity, Free Speech Systems, LLC.
The sale will occur in phases, beginning with the initial bid
deadline offering interested parties an opportunity to bid on
several subsets of Infowars' intellectual properties or all
Infowars assets as a package. Individually, bidders can acquire
company assets, such as Infowars' production rights and archival
library; the company's e-commerce business which sells nutritional
supplements and preparedness supplies; or a variety of domain names
largely unrelated to the other business operations. As a package,
bidders can acquire all intellectual properties, along with the
firm's production equipment.
There are no restrictions on the use of any acquired property in
the bankruptcy order, allowing the bidder to utilize the assets at
their own discretion. A bidder has the right to choose whether or
not they want to negotiate facility lease terms with the existing
landlord, re-hire key employees and talent, and continue Infowars
operations.
All bids submitted by a bidder with a 10% deposit by the Nov. 8
deadline will be reviewed by the auction firms and the trustee for
conformity, qualification and competitiveness. Bidders whose bids
qualify and are deemed competitive will be invited to a live
bidding session on Nov. 13. Multiple bidding rounds may be required
to determine the highest or otherwise best bid or bids. While the
trustee reserves all rights to accept or reject bids, the auction
is expected to result in a confirmed asset sale.
All Free Speech Systems assets not sold during the Nov. 13 auction
will be part of a final public online auction on Dec. 10. Assets
could include the company's production equipment, office
furnishings, computer systems, product inventories, extensive
in-office fitness equipment and vehicles such as a motorhome and
Terradyne armored truck.
For more information on the bidding process, interested parties can
visit 360bid.sale or tranzon.com, or go directly to the sale
information page at: https://360assetadvisors.com/events/fssmh/.
All descriptions of the bidding and sale process are for summary
purposes only and are subject in all respects to the terms of the
Order Granting Trustee's Motion for Entry of an Order Authorizing
the Winddown of Free Speech Systems, LLC [Docket No. 859].
Contact:
Jeff Tanenbaum
(888) 345-7653
About Free Speech Systems
Free Speech Systems LLC is a broadcast media production and
distribution company that provides broadcasting aural programs by
radio to the public. Free Speech Systems is a family-run business
founded by Alex Jones.
FSS is presently engaged in the business of producing and
syndicating Jones' radio and video talk shows and selling products
targeted to Jones' loyal fan base via the Internet. Today, FSS
produces Alex Jones' syndicated news/talk show (The Alex Jones
Show) from Austin, Texas, which airs via the Genesis Communications
Network on over 100 radio stations across the United States and via
the internet through websites including Infowars.com.
Due to the content of Alex Jones' shows, Jones and FSS have faced
an all-out ban of Infowars from mainstream online spaces. Shunning
from financial institutions and banning Jones and FSS from major
tech companies began in 2018.
Conspiracy theorist Alex Jones has been sued by victims' family
members over Jones' lies that the 2012 Sandy Hook Elementary School
shooting was a hoax.
Jones' InfoW LLC and affiliates, IWHealth, LLC and Prison Planet
TV, LLC, filed petitions under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. S.D. Texas Lead Case No. 22-60020) on April
18, 2022.
GA VIEWS: Case Summary & 19 Unsecured Creditors
-----------------------------------------------
Debtor: GA Views Management, LLC
3105 Mount Pleasant Street NW
Washington, DC 20010
Business Description: GA Views is the fee simple owner of real
property located at 3557-3559 Georgia
Avenue NW, Washington, DC 20010 valued at
$12 million.
Chapter 11 Petition Date: October 9, 2024
Court: United States Bankruptcy Court
District of Columbia
Case No.: 24-00339
Judge: Hon. Elizabeth L Gunn
Debtor's Counsel: William C. Johnson, Jr., Esq.
THE JOHNSON LAW GROUP, LLC
6305 Ivy Lane
Suite 630
Greenbelt, MD 20770
Tel: (301) 477-3450
Fax: (301) 477-4813
E-mail: William@JohnsonLG.Law
Total Assets: $12,000,000
Total Liabilities: $8,553,000
The petition was signed by Hector Rodriguez as managing member.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/VAYXJOA/GA_Views_Management_LLC__dcbke-24-00339__0001.0.pdf?mcid=tGE4TAMA
List of Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
1. Bonifacio Rivera Unsecured Loan $50,000
13921 Westview
Forest Dr
Bowie, MD 20720
2. Cesar Rodriguez Unsecured Loan $69,000
3735 Airdire Ct
Burtonsville, MD 20866
3. DC Office of Tax Revenue Tax Debt Unknown
1101 4th St SW
#270
Washington, DC 20024
4. Dolores Rodriguez Unsecured Loan $5,000
960 Randolph St NW
Washington, DC
20011
5. Fanuel Roblero Unsecured Loan $5,000
3708 Cricket Ave
District Heights, MD 20747
6. Fernando Martinez Unsecured Loan $40,000
3557 Georgia Ave. NW
Washington, DC
20010
7. Georgina Lavanderos Unsecured Loan $42,000
1724 Ladd St
Silver Spring, MD 20902
8. Idalina Rodriguez Unsecured Loan $34,000
3735 Aidire Ct
Burtonsville, MD
20866
9. Internal Revenue Services Tax Debt Unknown
31 Hopkins Plaza
Baltimore, MD 21201
10. Julio Rodriguez Unsecured Loan $25,000
4701 Rollingdale Way
Capitol Heights, MD
20743
11. Maria Ochoa de Arias Unsecured Loan $48,000
13104 Holdridge Road
Silver Spring, MD
20906
12. Mohameed Rasheed Unsecured Loan $5,000
3557 Georgia Ave NW
Washington, DC
20010
13. Osmin Guardado Unsecured Loan $32,000
7102 Bridle Path Ln
Hyattsville, MD
20782
14. Paulo Deleon Unsecured Loan $10,000
3535 New
Hampshire Ave NW
Washington, DC
20010
15. Rafael M. Rodriguez Unsecured Loan $340,000
3902 14Th St NW
#418
Washington, DC
20011
16. Rafael Rodriguez Unsecured Loan $3,000
418 Buchanan St NW
Washington, DC
20011
17. Rafaela Rodriguez Unsecured Loan $415,000
Ahmad Kalala
418 Buchanan St NW
Washington, DC
20011
18. Rocky Rosales Unsecured Loan $25,000
15571 Wheatfield Road
Woodbridge, VA
22193
19. Troun Dang Unsecured Loan $5,000
3557 Georgia Ave NW
Washington, DC
20010
GENCANNA GLOBAL: Buyer's Breach of Fiduciary Duty Claim Tossed
--------------------------------------------------------------
Judge Gregory F. Van Tatenhove of the United States District Court
for the Eastern District of Kentucky granted the motion filed by
the defendants to dismiss the breach of fiduciary duty complaint
captioned as, GENCANNA ACQUISITION CORP., Plaintiff, v. 101
ENTERPRISES, LLC, et al., Defendants, Case No. 5:23-cv-00305-GFVT
(E.D. Ky.).
4274 Colby, LLC, is a Kentucky limited liability corporation
organized in 2015. Pursuant to its Operating Agreement, 101
Enterprises, LLC was to own 50% of the membership interest in 4274
Colby. GenCanna Global USA would own the other 50%.
101 Enterprises is also an LLC organized under Kentucky's laws.
Defendants Kevin Murray and Greg Martini are the members of 101
Enterprises. 4274 Colby is a member managed LLC. However, in the
Operating Agreement, members GenCanna Global and 101 agreed to
designate much of their authority to two managers: initially,
William Hilliard and Steven Bevan.
Following 4274 Colby's formation, it entered into a lease agreement
with GenCanna Global. Around five years later, in 2020, GenCanna
Global filed for Chapter 11 Bankruptcy. At that point, the Debtor's
interest in 4274 Colby became an asset of the bankruptcy estate.
After the Bankruptcy Court approved a Sale Order, Plaintiff
GenCanna Acquisition Corporation acquired GenCanna Global's
economic interest in 4274 Colby and became the assignee of a
related lease. However, "[b]ecause 101 did not consent to
[Plaintiff] GenCanna [Acquisition] becoming a member of 4274 Colby,
as defined in and governed by the Operating Agreement, GenCanna
[Acquisition] possesses only an economic interest in 4274 Colby[.]"
Accordingly, "it does not have any power or authority to manage
4272 Colby."
Plaintiff brings individual claims against 101, Martini, and Murray
for breach of fiduciary duty. Though GenCanna Acquisition
acknowledges that "[it] is not a member of 4274 Colby," it
nevertheless avers that Martini, Murray, and 101 owed it a
fiduciary obligation.
Plaintiff also asks the Court to appoint a receiver "to collect the
unpaid rent and [] manage the affairs of 4272 Colby."
Murray, Martini, and 101 move to dismiss on the grounds that (1)
they owe no fiduciary duty to GenCanna Acquisition, (2) GenCanna
Acquisition lacks standing to sue on behalf of 4272 Colby, and (3)
there was no breach of any purported fiduciary duty.
On Defendants' view, liability is foreclosed by the fact that they
never owed GenCanna Acquisition a duty in the first place. GenCanna
Acquisition disagrees, arguing that an LLC's members owe fiduciary
obligations to the LLC's economic interest holders.
Although the Court is sympathetic to GenCanna Acquisition's
situation, its argument misses the mark. According to the Court,
GenCanna Acquisition's fiduciary duty argument fails for two
reasons:
-- Everyone agrees that GenCanna Acquisition is not a member
of 4274 Colby.
-- GenCanna Acquisition is not the LLC, itself.
GenCanna Acquisition disagrees, citing Patmon v. Hobbs for the
proposition that an economic interest holder benefits from a more
nebulous duty of loyalty under the common law.
Judge Van Tatenhove says, "This is not a case about whether the law
imposes fiduciary duties in the context of LLCs. It does. But those
duties are owed to particular entities. Because those fiduciary
obligations run to the LLC and its members, Plaintiff's breach of
fiduciary duty claims fail at the outset."
Additionally, because GenCanna Acquisition fails to state a claim,
and because the appointment of a receiver is a remedy, the Court
will deny the receiver request.
A copy of the Court's decision is available at
https://urlcurt.com/u?l=kiaPN3
About GenCanna Global USA
GenCanna Global USA, Inc. -- https://www.gencanna.com/ -- is a
vertically-integrated producer of hemp and hemp-derived cannabidiol
products with a focus on delivering social, economic and
environmental impact through seed-to-scale agricultural
production.
GenCanna Global USA was the subject of an involuntary Chapter 11
proceeding (Bankr. E.D. Ky. Case No. 20-50133) filed on Jan. 24,
2020. The involuntary petition was signed by alleged creditors
Pinnacle, Inc., Crawford Sales, Inc., and ntegrity/Architecture,
PLLC.
On Feb. 6, 2020, GenCanna Global USA consented to the involuntary
petition and on Feb. 5, 2020, two affiliates, GenCanna Global Inc.
and Hemp Kentucky LLC, filed their own voluntary Chapter 11
petitions.
Laura Day DelCotto, Esq., at DelCotto Law Group PLLC, represents
the petitioners.
The Debtors tapped Benesch Friedlander Coplan & Aronoff, LLP and
Dentons Bingham Greenebaum, LLP as legal counsel, Huron Consulting
Services, LLC, as operational advisor, and Jefferies, LLC, as
financial advisor. Epiq is the claims agent.
The Office of the U.S. Trustee appointed a committee of unsecured
creditors on Feb. 18, 2020. The committee tapped Foley & Lardner
LLP as its bankruptcy counsel, DelCotto Law Group PLLC as local
counsel, and GlassRatner Advisory & Capital Group, LLC, as
financial advisor.
GLOBAL SOURCING: Court Allows $3,765 in Accountant Fees
-------------------------------------------------------
Judge Timothy A. Barnes of the United States Bankruptcy Court for
the Northern District of Illinois made findings of fact and
conclusions of law in support of the order awarding to Leaf, Dahl
and Company, Ltd., accountants for Global Sourcing Connection,
Ltd., interim and final compensation and reimbursement of expenses
as follows:
TOTAL FEES REQUESTED: $4,200.00
TOTAL FEES REDUCED: $434.25
TOTAL FEES ALLOWED: $3,765.75
TOTAL COSTS REQUESTED: $0.00
TOTAL COSTS REDUCED: $0.00
TOTAL COSTS ALLOWED: $0.00
TOTAL FEES AND COSTS ALLOWED: $3,765.75
(1) Insufficient Description -- TOTAL of disallowed amounts:
$177.50
(2) Improper Time Increments for Billing -- TOTAL of disallowed
amounts: $164.25
(3) Duplication of Services -- TOTAL of disallowed amounts: $92.50
A copy of the Court's decision is available at
https://urlcurt.com/u?l=qmUGgo
About Global Sourcing Connection
Global Sourcing Connection, Ltd. is a promotional products
distributor with factory direct capabilities.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Ill. Case No. 23-14996) on November 7,
2023. In the petition signed by its chief executive officer,
Jennifer Arenson, the Debtor disclosed up to $50,000 in assets and
up to $10 million in liabilities.
Judge Timothy A. Barnes oversees the case.
The Debtor tapped Matthew T. Gensburg, Esq., at Gensburg
Calandriello & Kanter, PC as legal counsel and Jeffrey Dahl at Leaf
Dahl and Company Ltd. as accountant.
The Court entered an order confirming the Debtor's Modified First
Amended Plan of Reorganization on August 5, 2024. The Plan was
declared effective August 28.
GOEROE'S GOLDENS: Amended Plan Resolves NuBridge Claim Issues
-------------------------------------------------------------
Goeroe's Goldens, LLC, submitted a Disclosure Statement for Second
Amended Plan of Reorganization dated September 4, 2024.
The Plan will pay 100% dividend on all Allowed Claims within
eighteen months of the Effective Date.
The Plan will be funded primarily from a refinance or sale of the
Debtor's Real Property located at 4730 State Highway, Eastham, MA,
with interim payments funded by the Debtor's operations, including
monthly interest payments on the principal portion of the Nubridge
Allowed Claim of Nubridge Commercial Lending LLC.
The Debtor and NuBridge have reached an agreement on the Debtor's
treatment of NuBridge's claim under the Plan. By agreement,
NuBridge's Allowed Claim will be reduced to $7,000,000.00 and will
be paid in full upon a refinance or sale of the Real Property no
later than 18 months after the Effective Date. Beginning on the
Effective Date, NuBridge will receive monthly interest payments of
$42,937.50 calculated based on a principal balance of $6.87 million
at a rate of 7.5% per annum. Upon Confirmation, NuBridge and the
Debtor will have waived any claims they may have against each
other, except as provided for in the Plan.
The undisputed, liquidated General Unsecured Claims against the
Debtor total approximately $275,000.00. The Claims are comprised of
private loans totaling approximately $180,000 that the Debtor
obtained from individuals who have a relationship with Ms. Niggel,
approximately $38,000 in utility charges for the Real Property,
approximately $65,000 in pre-petition legal fees owed to Ascendant
Law Group, LLC, and a $1,700 debt to a supplier.
There is also a debt in an unknown amount owed to the Debtor's
prior accountant, and a disputed debt allegedly owed to Revolution
Energy. in the approximate amount of $750,000.00. The Plan provides
that all Allowed Claims will be paid in full, inclusive of interest
at the federal judgment rate, from the proceeds of a refinance or
sale of the Real Property. This payment will be made no later than
eighteen months after the Effective Date.
This Plan is the Debtor's second amended plan. The Debtor has
received feedback on the prior iterations of the plan and
disclosure statement from NuBridge, Revolution Energy, and the
Office of the United States Trustee. It was the Debtor's intent
that this Plan and Disclosure Statement would address all concerns
raised by these parties. The Debtor is optimistic that it has
achieved this goal and the Plan can be confirmed before the end of
2024.
Class One consists of the NuBridge Allowed Claim as it relates to
the Real Property. NuBridge shall be paid the NuBridge Allowed
Claim in full no later than the 18th month following the Effective
Date. Commencing on the Effective Date, the Debtor shall make
monthly interest payments to NuBridge based on the principal
balance of $6,870,000.00 at an interest rate of 7.50% per annum,
which is $42,937.50 a month. The remainder of the NuBridge Allowed
Claim shall not bear interest. The NuBridge Allowed Claim or any
portion thereof may be pre-paid at any time with no penalty to the
Reorganized Debtor.
Except as provided for in this Plan, upon confirmation, the Debtor
and Reorganized Debtor shall be deemed to have waived any and all
claims they may have against NuBridge arising on or before the
Confirmation Date and NuBridge shall be deemed to have waived any
and all claims it may have against the Debtor arising on or before
the Confirmation Date.
Class Three consists of the Allowed General Unsecured Claims
against the Debtor. In full and complete satisfaction, settlement,
release and discharge of all Class Three claims, each holder of an
Allowed Class Three Claim shall receive payment in full of its
Claim, plus interest at the federal judgment rate applicable on the
Effective Date, no later than the 18th month following the
Effective Date, unless a different treatment is agreed to between
the Debtor and the holder of an Allowed Class Three Claim.
The Plan will be funded from the Debtor's on-going rental income
and through a refinance or sale of the Real Property. The proposed
refinance or sale will close no later than the 18th month following
the Effective Date. Upon the Effective Date, the Debtor is
authorized to take all action permitted by law, including, without
limitation, to use cash and other Assets for all purposes provided
for in the Plan and in its operations, to borrow funds, to transfer
funds between itself and any other entity for any legitimate
purpose, including but not limited to cash management, to refinance
its secured obligations, and to sell its existing Assets.
The Plan depends on the sale or refinance of the Real Property on
or before the 18th month following the Effective Date. In the
unlikely event that the Real Property has not been sold or
refinanced by that date, creditors can petition the Bankruptcy
Court to compel the Debtor to proceed with a sale, seek the
appointment of a trustee to complete the sale process, or otherwise
seek to enforce the terms of the Plan.
A full-text copy of the Disclosure Statement dated September 4,
2024 is available at https://urlcurt.com/u?l=yAKnDH from
PacerMonitor.com at no charge.
Counsel to the Debtor:
Kate E. Nicholson, Esq.
Nicholson PC
21 Bishop Allen Dr.
Cambridge, MA 02139
Telephone: (857) 600-0508
Email: knicholson@nicholsonpc.com
About Goeroe's Goldens
Goeroe's Goldens is a Single Asset Real Estate debtor (as defined
in 11 U.S.C. Section 101(51B)).
Goeroe's Goldens, LLC filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. D. Mass. Case No.
24-10275) on February 13, 2024, listing $1 million to $10 million
in both assets and liabilities. The petition was signed by Barbara
A. Niggel as manager.
Kate E. Nicholson, Esq., at NICHOLSON P.C., is the Debtor's
counsel.
GOODLIFE PHYSICAL: No Patient Care Complaints, 9th 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 ninth interim report regarding the quality of
patient care provided at Goodlife Physical Medicine Corp.'s health
care facilities.
In the report which covers the period from June 17 to August 17,
the PCO finds that each patient's medical records are well
maintained and accessible for staff using an electronic medical
record and is currently in the process of changing to Athens as the
database to store patient information. Any grievances by the
patients are also notated in their own medical records. After
discussions with the COO, there are no patient complaints related
to patient's care.
The PCO toured the facilities with the Chief Operating Office
Andrew Tripplett. She met with the director of the facility and
spoke with staff regarding the day-to-day operations of the
facility. The PCO observed patient treatments open area where most
machines are for exercising. There were a few patients in the exam
rooms as well.
The PCO observed all medication stored on the premises to assure
that they are properly stored, and access is limited. Goodlife does
not have any controlled substances on site. Medication was properly
stored and appropriately labeled.
A copy of the ombudsman report is available for free at
https://urlcurt.com/u?l=PkqunM 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: tterzian@terzlaw.com
About Goodlife Physical Medicine Corp
Goodlife Physical Medicine Corp, a company in Redondo Beach,
Calif., filed a petition for relief under Chapter 11 of the
Bankruptcy Code (Bankr. C.D. Calif. Case No. 23-10340) on Jan. 23,
2023. At the time of the filing, the Debtor reported up to $50,000
in assets and $1 million to $10 million in liabilities.
Judge Sandra R. Klein oversees the case.
The Debtor is represented by Leslie A. Cohen, Esq., at Leslie Cohen
Law, PC.
Tamar Terzian, Esq., at Terzian Law Group is the patient care
ombudsman appointed in the Debtor's Chapter 11 case.
GOODLIFE PHYSICAL: No Patient Care Concern, 8th 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 eighth interim report regarding the quality of
patient care provided at Goodlife Physical Medicine Corp.'s health
care facilities.
In the report which covers the period from April 17 to June 17, the
PCO finds that all locations have adequate staff and providers on
site to meet the standard of care for each patient. During this
period, Goodlife added to staff a new director overseeing all the
clinics. The director will be responsible for the overall quality,
outcomes and performance of the clinics.
The PCO toured the facilities with the Chief Operating Officer
Andrew Tripplett. She met with the director of the facility and
spoke with staff regarding the day-to-day operations of the
facility. The PCO observed patient treatments open area where most
machines are for exercising. There were a few patients in the exam
rooms as well.
The PCO observed all medication stored on the premises to assure
that they are properly stored, and access is limited. Goodlife does
not have any controlled substances on site. Medication was properly
stored and appropriately labeled. No concerns are noted.
A copy of the ombudsman report is available for free at
https://urlcurt.com/u?l=8I8bAo 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: tterzian@terzlaw.com
About Goodlife Physical Medicine Corp
Goodlife Physical Medicine Corp, a company in Redondo Beach,
Calif., filed a petition for relief under Chapter 11 of the
Bankruptcy Code (Bankr. C.D. Calif. Case No. 23-10340) on Jan. 23,
2023. At the time of the filing, the Debtor reported up to $50,000
in assets and $1 million to $10 million in liabilities.
Judge Sandra R. Klein oversees the case.
The Debtor is represented by Leslie A. Cohen, Esq., at Leslie Cohen
Law, PC.
Tamar Terzian, Esq., at Terzian Law Group is the patient care
ombudsman appointed in the Debtor's Chapter 11 case.
GRITSTONE BIO: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Gritstone bio, Inc.
f/d/b/a Gritstone Oncology, Inc.
5959 Horton Street, Suite 300
Emeryville, CA 94608
Business Description: Gritstone bio is developing next-generation
vaccines for cancer and infectious disease.
Gritstone's approach seeks to generate
potent and durable immune responses by
leveraging insights into the immune system's
ability to recognize and destroy diseased
cells by targeting select antigens.
Chapter 11 Petition Date: October 10, 2024
Court: United States Bankruptcy Court
District of Delaware
Case No.: 24-12305
Judge: Hon. Karen B. Owens
Debtor's
Bankruptcy
Counsel: James E. O'Neill, Esq.
PACHULSKI STANG ZIEHL & JONES LLP
919 North Market Street
17th Floor
Wilmington, DE 19801
Tel: 302-652-4100
Email: joneill@pszjlaw.com
Debtor's
Financial
Advisor: PRICEWATERHOUSECOOPERS LLP
Debtors'
Investment
Banker: RAYMOND JAMES & ASSOCIATES, INC.
Debtor's
Corporate
Counsel: FENWICK & WEST LLP
Total Assets as of August 31, 2024: $124,885,479
Total Debts as of August 31, 2024: $40,000,000
The petition was signed by Celia Economides as chief financial
officer.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/NH35HPY/Gritstone_bio_Inc__debke-24-12305__0001.0.pdf?mcid=tGE4TAMA
List of Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
1. Worldwide Clinical Trials Inc Trade Debt $622,566
600 Park Offices Dr.,
Suite 200
Durham, NC 27709
Email: milena.cicovic@worldwide.com
2. Beth Israel Trade Debt $417,928
Deaconess Medical Center
330 Brookline
Avenue, OV-540
Boston, MA 02215
Email: dbarouch@bidmc.harvard.edu
3. Sanquin Trade Debt $300,000
Plesmanlaan 125
Amsterdam 1066 CX
Netherlands
Email: M.Sener@sanquin.nl
4. BMR-Sidney Trade Debt $297,451
Research Campus LLC
17190 Bernardo
Center Drive
San Diego, CA 92128
Email: michael.rosenberry@biomedrealty.com
5. MuriGenics Inc. Trade Debt $181,958
941 Railroad Ave.
Vallejo, CA 94592
Email: noonans@murigenics.com
6. Presidio Networked Solutions Trade Debt $165,996
P.O. Box 822169
Philadelphia, PA
19182-2169
Email: klaansma@presidio.com
7. Fisher BioServices Inc. Trade Debt $162,078
P.O. Box 418395
Boston, MA 02241
Email: FBSFinance.AR@thermo.com
8. Allucent (US) LLC Trade Debt $112,453
2000 Centregreen
Way, Suite 300
Cary, NC 27513
Email: allucent_invoicing@allucent.com
9. Fisher Scientific Trade Debt $112,213
13551 Collections
Center Drive
Chicago, IL 60693
Email: fs.order@thermofisher.com
10. Box Inc. Trade Debt $109,152
Dept 34666
P.O. Box 39000
San Francisco, CA 94139
Email: kmainz@box.com
11. UniFirst Corporation Trade Debt $101,970
1933 Milmont Drive
Milpitas, CA 95035
Email: gregory_mazares@unifirst.com
12. OnQ Research Pty LTD. Trade Debt $100,209
250 Market Street
Fairlands
Johannessburg, 2170
Email: catherinel@onqsa.co.za
13. ProPharma Group Trade Debt $80,002
Holdings, LLC
PO BOX 735546
Dallas, TX
75373-5546
Email: Tom.Hunter@propharmagroup.com
14. Meso Scale Trade Debt $70,936
Diagnostics LLC
Accounts Receivable
P.O. Box 715112
Philadelphia, PA
19171-5112
Email: customerservice@mesoscale.com
15. Triumvirate Trade Debt $57,647
Environmental, Inc.
DEPT 111047
P.O. BOX 150502
Hartford, CT
06115-0502
Email: grosinski@triumvirate.com
16. LifeSci Advisors, LLC Professional $53,357
250 West 55th Services
Street, Suite 3401
New York, NY 10019
Email: finance@lifesciadvisors.com
17. Smartsheet Inc. Trade Debt $50,010
PO Box 7410971
Chicago, IL
60674-0971
Email: daniel.callahan@smartsheet.com
18. Certara USA, Inc. Trade Debt $44,727
100 Overlook Center
Suite 101
Princeton, NJ 08540
Email: purchaseorders@certara.com
19. Add Life Facilities Trade Debt $42,329
Services, Inc.
2405 De La Cruz Blvd.
Santa Clara, CA 95050
Email: info@addlifeserve.com
20. Element Materials Trade Debt $42,090
Technology (EMT) Oakla
P.O. BOX 855356
Minneapolis, MN
55485-5356
Email: Mimi.Leong@element.com
GRITSTONE BIO: Files for Chapter 11 Bankruptcy
----------------------------------------------
Gritstone bio, Inc., a clinical-stage biotechnology company working
to develop the world's most potent vaccines, today announced it has
filed a voluntary petition under chapter 11 of the United States
Bankruptcy Code in the United States Bankruptcy Court for the
District of Delaware.
Gritstone intends to use the court-administered restructuring
process to preserve value and support its ongoing strategic
alternatives process. The Company is in discussions with a party to
act as a stalking horse bidder or plan sponsor and intends to
present an agreement to the Court as early as next week in order to
enter into a value-maximizing transaction and continue to research
and develop its next-generation vaccines and immunotherapies for
oncology and infectious diseases.
"Our world-class science and cutting-edge innovations have
positioned us at the forefront of oncology and medical
breakthroughs. We recently reported encouraging interim Phase 2
data from our ongoing study evaluating GRANITE, which continues to
demonstrate an emerging benefit for patients, however, additional
time is needed for the data to mature, " said Andrew Allen, MD,
PhD, Co-founder, President & CEO of Gritstone. "The decision to
file for chapter 11 relief allows us to stay focused on our mission
of bringing potentially life-saving treatments like GRANITE to
patients around the world."
During its financial restructuring process, Gritstone intends to
operate in the ordinary course and remains committed to advancing
its clinical programs, including its ongoing neoantigen
immunotherapy and infectious disease programs, and driving
innovation in immunotherapy and vaccine development.
Gritstone is filing customary "first day" motions in its chapter 11
case with the intention of ensuring normal operations. Upon court
approval of these first day motions, Gritstone intends to minimize
the impact of the bankruptcy process on the Company's vendors,
employees, and other key stakeholders.
Additional information regarding Gritstone's chapter 11 process is
available at https://www.veritaglobal.net/gritstone. Stakeholders
with questions may call the Company's Claims Agent, Verita Global,
at 877-709-4754 or 424-236-7233 if calling from outside the U.S. or
Canada, or send an inquiry by visiting
https://www.veritaglobal.net/gritstone/inquiry.
Advisors
Pachulski Stang Ziehl & Jones LLP is serving as legal counsel,
Fenwick & West LLP is serving as general corporate counsel, Raymond
James & Associates, Inc. is serving as investment banker, PwC is
serving as financial advisor, and C Street Advisory Group is
serving as strategic communications advisor to the Company.
About Gritstone
Gritstone bio, Inc. (Nasdaq: GRTS) is a clinical-stage
biotechnology company that aims to develop the world's most potent
vaccines. It leverages its innovative vectors and payloads to train
multiple arms of the immune system to attack critical disease
targets. Independently and with its collaborators, it is advancing
a portfolio of product candidates to treat and prevent viral
diseases and solid tumors in pursuit of improving patient outcomes
and eliminating disease. www.gritstonebio.com
GUESTWISER VENTURE 1: Kicks Off Chapter 11 Bankruptcy
-----------------------------------------------------
Guestwiser Venture 1 LLC filed Chapter 11 protection in the
Northern District of Texas. According to court filing, the Debtor
reports between $1 million and $10 million in debt owed to 1 and 49
creditors. The petition states funds will not be available to
unsecured creditors.
A meeting of creditors under 11 U.S.C. Section 341(a) is slated for
Nov. 6, 2024 at 9:30 a.m. in Room Telephonically.
About Guestwiser Venture 1 LLC
Guestwiser Venture 1 LLC is engaged in activities related to real
estate.
Guestwiser Venture 1 LLC sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Tex. Case No. 24-43584) on October 1,
2024. In the petition filed by Yehuda Berg, as managing member, the
Debtor estimated assets and liabilities between $1 million and $10
million each.
The Debtor is represented by:
Michael R. Reer, Esq.
HARRIS, FINLEY & BOGLE, P.C.
777 Main Street, Suite 1800
Fort Worth, Texas 75201
Tel: (817) 870-8700
Email: mreer@hfblaw.com
HEALTHCARE AT COLLEGE: No Decline in Resident Care, PCO Report Says
-------------------------------------------------------------------
Melanie McNeil, Esq., the duly appointed patient care ombudsman,
filed with the U.S. Bankruptcy Court for the Middle District of
Georgia her first report regarding the quality of patient care
provided by Healthcare at College Park, LLC.
The Ombudsman Representative for the Office of the State Long-Term
Care Ombudsman (OSLTCO) visited the facility on August 15, and the
resident census at Healthcare at College Park was 64. The OR met
with six residents, the person in charge, activities staff, and
social services staff during her visit and received two
complaints.
The OR spoke with the social services, activities, bookkeeping, and
maintenance staff about the residents' concerns. The OR noted that
the staff were responsive to her concerns, there were a lot of
staff in the building during the visit, and the company's facility
operates in old building. The OR noted no decline in resident
care.
Ms. McNeil is unaware of any significant change in facility
conditions or decline in resident care for this nursing home since
her appointment as PCO.
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. Sec. 101(27A)).
Healthcare at College Park, LLC 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.
The Debtor is represented by Wesley J. Boyer, Esq., at Boyer Terry,
LLC.
Melanie S. McNeil, Esq., is the patient care ombudsman appointed in
the Debtor's case.
HERITAGE COLLEGIATE: Elemental's Cash Collateral Objection Nixed
----------------------------------------------------------------
Judge Thomas J. Tucker of the United States Bankruptcy Court for
the Eastern District of Michigan overruled Elemental Capital,
Inc.'s objection to use of cash collateral in the bankruptcy case
of Heritage Collegiate Apparel, Inc. as untimely.
On September 19, 2024, Elemental filed an "Objection to Use of Cash
Collateral" with exhibits attached.
The deadline for Elemental to object to the interim cash collateral
order filed August 23, 2024 was September 6.
The Court finds that Elemental was served with the Debtor’s cash
collateral motion by mail on August 19, and that it was served with
the Interim Cash Collateral Order by mail on August 23.
The Elemental Capital Objection therefore is untimely. And it
contains no allegation or argument to try to show otherwise.
A copy of the Court's decision is available at
https://urlcurt.com/u?l=pwqnx6
On September 19, the Court issued a "Final Order (I) Authorizing
Debtor to Use Cash Collateral and (II) Providing Adequate
Protection to the Prepetition Lenders; and Cancelling Final Hearing
Scheduled for September 20." The Debtor's authority to use Cash
Collateral will continue until otherwise ordered by the Court. A
copy of the Cash Collateral Order is available at
https://urlcurt.com/u?l=RKfFRE
About Heritage Collegiate Apparel
Heritage Collegiate Apparel, Inc. serves as the official retailer
of the University of Michigan Athletic Department. For more than 20
years, the Debtor has provided a selection of clothing, merchandise
and gifts to the University of Michigan.
Heritage Collegiate Apparel filed its voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Mich. Case No.
24-47922) on August 16, 2024, listing $1 million to $10 million in
assets and $10 million to $50 million in liabilities. The petition
was signed by Scott Hirth as president.
Judge Thomas J. Tucker presides over the case.
Kim K. Hillary, Esq., at Schafer and Weiner, PLLC represents the
Debtor as legal counsel.
On September 3, 2024, the United States Trustee appointed an
official committee of unsecured creditors in this Chapter 11 case.
The committee tapped Wolfson Bolton Kochis PLLC as counsel and
Capstone Partners as financial advisor.
HIGH RIDGE: $820,000 Clawback Suit v Colgate Goes to Trial
----------------------------------------------------------
Judge Brendan Linehan Shannon of the United States Bankruptcy Court
for the District of Delaware denied the cross-motions for summary
judgment filed by the parties in the case captioned as ALAN D.
HALPERIN, as Liquidating Trustee of the HIGH RIDGE BRANDS CO.
LIQUIDATING TRUST, Plaintiff, v. COLGATE-PAMOLIVE COMPANY,
Defendant, Adv. Pro. No. 21-51337 (BLS) (Bank. D. Del.).
High Ridge Brands Company and its affiliates were one of the 10
largest independent branded personal care companies in the United
States by volume. Colgate sold commercial and personal care
products to the Debtors on wholesale, which the Debtors then resold
at retail.
Alan D. Halperin, the Liquidating Trustee of High Ridge Brands
Liquidating Trust, filed an adversary complaint against
Colgate-Palmolive Company to avoid and recover eight pre-petition
transfers totaling $820,154.16 made from the Debtors to Colgate as
either preferential or fraudulent transfers. Colgate filed a motion
for summary judgment arguing that its post-petition critical vendor
agreement with the Debtor precludes the Trustee from proving all
elements of a Sec. 547(b) preferential avoidance action, and also
contending that the undisputed facts establish an ordinary course
of business defense under Sec. 547(c)(2). The Trustee then filed
his own motion for summary judgment, asserting that the undisputed
facts show that all elements of Sec. 547(b) are met in this case.
Both cross-motions for summary judgment will be denied because
there are genuine disputes regarding material facts, the Court
holds.
A copy of the Court's decision is available at
https://urlcurt.com/u?l=VJ3BhV
About High Ridge Brands
High Ridge Brands -- http://www.highridgebrands.com/-- was one of
the largest independent branded personal care companies in the
United States by unit volume. Its portfolio of over 13 trusted
brands, served primarily North American skin cleansing, hair care
and oral care markets, and included Zest(R), Alberto VO5(R),
REACH(R), Firefly(R), Dr. Fresh(R), Coast(R), White Rain(R), LA
Looks(R), Zero Frizz(R), Rave(R), Salon Grafix(R), Binaca(R) and
Thicker Fuller Hair(R). The Company also had relationships with
entertainment properties through which it had a portfolio of
licenses such as Star Wars, Batman, Spiderman, Hello Kitty, and
Transformers. The Company operated an asset-light model,
outsourcing its manufacturing needs.
The Debtors sought Chapter 11 protection (Bankr. D. Del. Case No.
19-12689) on Dec. 18, 2019. The Debtor affiliates include High
Ridge Brands Holdings, Inc., HRB Midco, Inc., HRB Buyer, Inc., High
Ridge Brands Co., Golden Sun, Inc., Continental Fragrances, Ltd.,
Freshcorp, Inc., Children Oral Care, LLC, and Dr. Fresh, LLC.
Judge Brendan Linehan Shannon presided over the cases.
Young Conaway Stargatt & Taylor, LLP, served as the Debtors'
counsel. Debevoise & Plimpton LLP was corporate, finance and
litigation counsel to the Debtors. PJT Partners LP was the Debtors'
investment banker.
Following confirmation of the Debtors' Plan of Liquidation, Alan D.
Halperin was appointed as the Liquidating Trustee of High Ridge
Brands Liquidating Trust.
HOLLYWOOD LOFTS: Updates Unsecureds & DIP Lender Secured Claims Pay
-------------------------------------------------------------------
Hollywood Lofts, LLC, submitted a First Amended Disclosure
Statement for First Amended Plan of Reorganization dated September
4, 2024.
The Plan provides for full payment of all creditors from cash on
hand, income generated from the Debtor's operations, and the
proceeds of a refinance of the existing secured financing or a sale
of the Debtor's real property.
On August 30, 2024, after significant delays for which neither the
Debtor nor the DIP Lender was responsible, the DIP Loan closed and
the Claim of the Prepetition Lender was satisfied in full.
As detailed in the Plan, all Allowed Claims shall be paid in full.
The Class 1 Claim of the DIP Lender shall be paid in accordance
with the DIP Loan Documents, which provide for monthly interest
only payments and a final payment due on or before the DIP Loan
Maturity Date, which is 24 months following the closing of the DIP
Loan on August 30, 2024.
The first six monthly payments shall be made from an interest
reserve, which results in the Reorganized Debtor not having any
payment obligation until the seventh month of the DIP Loan, or
April 2025. There is no pre-payment penalty due under the DIP Loan,
and the Debtor has reserved the right under the Plan to sell the
Property at any time to satisfy all Allowed Claims from the Net
Proceeds of such a sale.
The Plan also provides for the assumption of all Tenant Leases upon
the Effective Date. Finally, general unsecured creditors shall be
paid from cash on hand and Property Income over time, which will
allow the Reorganized Debtor to build an operating reserve while
still paying all such claims in full and in the near term.
Class 1 consists of the Secured Claim of the DIP Lender. The Class
1 Claim comprises the Secured Claim of the DIP Lender on account of
the DIP Loan. The DIP Lender holds a first-position deed of trust
against the Property and other non-Estate real property securing a
claim in the principal amount of $8.5 million. The Class 1 Claim
shall be allowed under sections 502(a) and 506(a) of the Bankruptcy
Code as a Secured Claim in the amount of $8,500,000 as of
Confirmation, plus any unpaid interest not then due that accrues
following the closing of the DIP Loan.
The Debtor shall pay the Holder of the Class 1 Claim in accordance
with the DIP Loan Documents, the principal terms of which are (i)
monthly interest-only payments; (ii) interest accruing at the rate
of 10.50% per annum; (iii) first-lien position on the Property,
Property Income and Tenant Leases, and other non-Estate real
property; and (iv) a term of twenty-four months.
Class 3 consists of all Unsecured Claims other than Claims in Class
2. Each Holder of a Class 3 Allowed Claim shall be paid in three
equal monthly payments, commencing in the second full month
following the Effective Date. All payments due under this
subparagraph shall be made on or before the twenty-fifth day of
each month in which a payment is due. Interest shall accrue on
Class 3 Claims at the Federal Judgment Rate in effect on the first
day of each month in which a payment is due. Class 3 is impaired.
The distributions to each of the Classes under the Plan shall be
made from cash on hand, Property Income and, ultimately, from the
Net Proceeds of a Financial Event. All expenditures and
distributions of funds from Property Income, whether to fund
ongoing operations or distributions required under the Plan, shall
be free and clear of any liens, interests or encumbrances of any
Person.
As detailed herein, the Reorganized Debtor shall own and manage the
Property and will continue to pay the DIP Loan according to its
terms following Confirmation. The provision for monthly payments to
Class 3 will allow the Reorganized Debtor to build up an operating
reserve while still timely paying all such Claims. The Reorganized
Debtor will likely sell the Property prior to the Plan Maturity
Date, the Net Proceeds from which will satisfy any outstanding
claims then remaining.
A full-text copy of the First Amended Disclosure Statement dated
September 4, 2024 is available at https://urlcurt.com/u?l=SjHwha
from PacerMonitor.com at no charge.
Counsel to the Debtor:
James L. Day, Esq.
Bush Kornfeld LLP
601 Union St., Suite 5000
Seattle, Washington 98101
Telephone: (206) 292-2110
Facsimile: (206) 292-2104
Email: jday@bskd.com
About Hollywood Lofts
Hollywood Lofts LLC is a Single Asset Real Estate debtor (as
defined in 11 U.S.C. Section 101(51B)). The Debtor owns real
property and improvements thereon located at 127 Broadway East,
Seattle, WA 98102, commonly known as the Hollywood Lofts having an
appraised value of $14.1 million.
The Debtor sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. W.D. Wash. Case No. 24-10916) on April 15, 2024. In
the petition signed by Ron E. Amundson, manager, the Debtor
disclosed $14,278,613 in assets and $9,396,079 in liabilities.
James L. Day, Esq., at Bush Kornfeld LLP, is the Debtor's legal
counsel.
HURON ACADEMY: Moody's Rates New Series 2024 Revenue Bonds 'Ba1'
----------------------------------------------------------------
Moody's Ratings has assigned an initial Ba1 rating to Huron
Academy, MI's Public School Academy Limited Obligation Revenue and
Revenue Refunding Bonds (Huron Academy Project), Series 2024 with a
proposed par amount of $12.7 million. The outlook is stable. The
bonds will be issued by the Michigan Finance Authority on behalf of
the charter school academy.
RATINGS RATIONALE
The Ba1 rating reflects the charter school's fair competitive
position, balancing its long-standing operating history and
positive enrollment trends against its relatively small operating
scale and average academic performance. The school's demand profile
is expected to moderately strengthen in the near term, as upcoming
capital projects will consolidate its preK-8th grade operations at
a single site. Sound financial performance supports credit quality
with satisfactory operating cash flow margins, days cash on hand,
and annual debt service coverage. Stable per-pupil state aid
funding and enrollment growth could bolster operational liquidity
over the next two years. Additionally, Moody's credit view
considers the school's low charter renewal risk and good government
relations including its relationship with a capable charter
management organization (CMO). Rising debt leverage to financial
capital projects weighs on credit quality.
Governance is a key driver of the initial rating action. Huron
Academy's governance structure is similar to other charter schools
in the State of Michigan (Aa1 stable). The organization is governed
by a seven member board of directors comprised of community members
with relevant and varied experience. The school is chartered by
Ferris State University, which has a supportive and transparent
authorizer framework. The school has strong prospects for continued
charter reauthorization.
RATING OUTLOOK
The stable outlook reflects the likelihood that the school will
achieve full enrollment over the next several years while also
maintaining healthy operating cash flow margins, days cash on hand,
and annual debt service coverage.
FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATING
-- Sustained enrollment growth combined a bolstering of the
school's student waitlist and improved academic performance
-- Maintenance of liquidity above 150 days cash on hand along with
annual debt service coverage above 2.0x
-- Material improvement to the school's debt leverage ratios
FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATING
-- Weakened competitive considerations including declining
enrollment or deteriorating academic performance
-- Narrowing of operating margins below 10%, declines to days cash
below 75 days, or annual debt service coverage below 1.5x
-- Material increases to the school's debt leverage
LEGAL SECURITY
The Series 2024 bonds are secured by a pledge made by Huron Academy
in the Financing Agreement, which allocates 20% of the State School
Aid received by the school each fiscal year from the State of
Michigan. If the funds available to the school are insufficient to
make a payment due under the Financing Agreement, a greater
percentage of State School Aid may be intercepted in a given month.
According to the State Aid Agreement, the State Treasurer of the
State of Michigan, the Trustee, the Ferris State University Board
of Trustees (the "Authorizing Body"), the fiscal agent for the
Academy, and the Authority have directed that 20% of the State
School Aid funds received by the Academy each fiscal year be paid
directly to the Trustee. However, under certain circumstances, up
to 97% of any particular payment of State School Aid may be payable
to the Trustee. Additionally, the Academy will grant a mortgage on
its Clinton Township facilities to the Trustee pursuant to a
Mortgage.
USE OF PROCEEDS
Proceeds from the Series 2024 bonds will be used to refinance
outstanding debt of the school, finance new capital projects, and
to pay for the cost of issuance. Approximately $7.4 million of the
proceeds will fully refund the school's outstanding Revenue and
Refunding Bonds, Series 2015. The Series 2015 bonds were issued to
finance the costs of the renovation of the Academy's school
facility located in the City of Sterling Heights and the
acquisition of vacant land and the construction and equipping of
the Academy's school facility located in Clinton Township. The
school will use $5.4 million of the proceeds to construct a 23,000
square foot addition to its Clinton Township facility allowing the
school to provide preK-8 education at a single site facility. The
remainder of the proceeds will be used to pay for the cost of
issuing the bonds, including a fully funded debt service reserve
fund (DSRF).
PROFILE
The Huron Academy is a preK-8 charter school that operates two
schools in City of Sterling Heights and Clinton Township with an
enrollment of approximately 680 students. The school began its
operations in 1999 and is authorized Ferris State University. The
school's charter has been renewed five times and its current-year
charter runs through June 30, 2030.
METHODOLOGY
The principal methodology used in this rating was US Charter
Schools published in April 2024.
IDEAL PROPERTY: U.S. Trustee Appoints Creditors' Committee
----------------------------------------------------------
Jonas Anderson, Acting U.S. Trustee for Region 18, appointed an
official committee to represent unsecured creditors in the Chapter
11 case of Ideal Property Investments, LLC.
The committee members are:
1. Sterling A Davis
Big Boy Tools LLC
12625 Hideout Dr.
Noblesville, IN 46060
(419) 352-2239
2. Ronald N. Cole
COLEWSTECH LLC & RCWSTECH1157 LLC
2960 Lewallen Place
Decatur, IL 62521
(217) 848-0830
3. David Schroeder
6404 Myrtle Lane
Indianapolis, IN 46220
(317) 432-6225
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 Ideal Property Investments
Ideal Property Investments, LLC is primarily engaged in renting and
leasing real estate properties. The company is based in Everett,
Wash.
Ideal Property Investments filed Chapter 11 petition (Bankr. E.D.
Wash. Case No. 24-01421) on September 5, 2024, with $50 million to
$100 million in assets and $100 million to $500 million in
liabilities.
Judge Frederick P. Corbit oversees the case.
Laurie Thornton, Esq., at DBS Law is the Debtor's bankruptcy
counsel.
JD WIDEMAN: Gets Interim OK to Use Cash Collateral Until Oct. 30
----------------------------------------------------------------
JD Wideman, DO., P.C. received interim approval from the U.S.
Bankruptcy Court for the District of Colorado to use the cash
collateral of its secured creditors.
JD Wideman can use the cash collateral until Oct. 30 pursuant to
its court-approved budget, subject to fluctuation by no more than
15% for each expense line item.
As adequate protection, secured creditors with perfected security
interests in the cash collateral will receive replacement liens on
post-petition accounts receivable.
In addition, JD Wideman has agreed to maintain insurance coverage
on its personal property.
The final hearing is set for Oct. 30.
About JD Wideman
JD Wideman, DO, P.C. is a professional corporation based in
Colorado. It is owned and operated by Dr. JD Wideman, specializing
in osteopathic medical services. As a healthcare provider, JD
Wideman focuses on delivering patient-centered care, adhering to
the principles of osteopathy, which emphasizes the body's ability
to heal itself through proper alignment, holistic care, and
preventive medicine.
JD Wideman filed its voluntary petition for Chapter 11 protection
(Bankr. D. Colo. Case No. 24-15758) on Sept. 30, 2024, with as much
as $1 million in both assets and liabilities.
Judge Kimberley H. Tyson oversees the case.
Aaron A. Garber, Esq., at Wadsworth Garber Warner Conrardy, P.C.
serves as the Debtor's legal counsel.
KIMO TILE: Case Summary & Nine Unsecured Creditors
--------------------------------------------------
Debtor: KIMO Tile @ Marble, LLC
d/b/a KIMO Tile LLC
7 Fowler Ave.
Millville, NJ 08332
Business Description: Kimo Tile installs tile & marble for
residential, commercial, municipal and
property management projects.
Chapter 11 Petition Date: October 9, 2024
Court: United States Bankruptcy Court
District of New Jersey
Case No.: 24-20009
Debtor's Counsel: Edmond M. George, Esq.
OBERMAYER REBMANN MAXWELL & HIPPEL LLP
Centre Square West
1500 Market Street, Suite 3400
Philadelphia, PA 19102
Tel: 215-665-3140
Email: edmond.george@obermayer.com
Total Assets: $279,726
Total Liabilities: $1,017,173
The petition was signed by Sasha Richard Kissoondath as managing
member.
A full-text copy of the petition containing, among other items, a
list of the Debtor's nine unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/2FBRZUY/KIMO_Tile__Marble_LLC__njbke-24-20009__0001.0.pdf?mcid=tGE4TAMA
LAMB WESTON: S&P Affirms 'BB+' ICR on Restructuring Announcement
----------------------------------------------------------------
S&P Global Ratings affirmed its 'BB+' issuer credit rating on Lamb
Weston Holdings Inc. The outlook remains stable.
S&P said, "We also affirmed our 'BB+' issue-level rating on the
company's senior unsecured notes. We revised the recovery rating to
'4' from '3', reflecting an increase in secured debt in the capital
structure and our expectation for average (30%-50%; rounded
estimate: 35%) recovery for unsecured creditors in the event of a
payment default.
"The stable outlook reflects our expectation that Lamb will restore
leverage comfortably below 3x in fiscal 2026 following
restructuring.
"Challenging operating conditions will continue to pressure profits
in 2025, but we expect leverage to remain below 3.5x.Lamb's S&P
Global Ratings-adjusted EBITDA declined more than 20% in the first
quarter (ended Aug. 25, 2024) of fiscal 2025 due to softening
restaurant foot traffic, customer share losses following
disruptions from an enterprise resource planning (ERP) transition
last year, and weakened fixed-cost absorption rates. As a result,
trailing twelve-month leverage increased to 3.0x, from 2.7x at the
end of fiscal 2024 (ended May 26).
"We believe the company will win back previously lost business by
investing in trade and promotions. However, we expect operating
conditions will remain challenging for the remainder of fiscal 2025
as the cumulative effect of menu inflation and high interest rates
pressure consumer discretionary income, impairing restaurant
traffic.
"We understand fry attachment rates remain steady and that quick
service restaurant (QSR) promotional activity is helping to improve
traffic trends. However, traffic is still negative (comparable U.S.
restaurant traffic was down 3.6% in August, per Black Box
Intelligence) and consumers are downsizing orders through value
meal purchases, pressuring volumes for Lamb. While these headwinds
will likely persist in the near term, we nevertheless forecast the
company will maintain leverage below our 3.5x downgrade trigger in
2025 due to market share gains, early cost savings from
restructuring, moderating capital investments, and working capital
favorability.
"We expect significant profit and cash flow expansion in fiscal
2026 will support deleveraging.The company announced a
restructuring program in response to weak operating conditions and
an industry supply-demand imbalance. Actions include closing a
dated production facility that will permanently reduce its North
American production capacity by about 5%, temporarily curtailing
other manufacturing lines in North America, reducing global
headcount by 4%, and reducing fiscal 2025 capital expenditure
(capex) guidance by $100 million (to $750 million). We expect
restructuring charges ($200 million-$250 million; 20% non-cash),
softer demand, and weaker fixed-cost absorption will continue to
pressure profitability and forecast leverage will weaken to about
3.2x in fiscal 2025.
"At the same time, cost savings, reduced capex, and working capital
favorability will likely enable the company to maintain leverage
below 3.5x. We expect significant profit expansion in fiscal 2026
as restructuring costs roll off, cost savings are realized, and
operating conditions improve, resulting in better fixed-cost
absorption. In addition, we expect a continued reduction in capex
($550 million-$600 million in fiscal 2026, compared with nearly $1
billion in fiscal 2024) will support incremental cash flow. As a
result, we forecast the company will generate free operating cash
flow (FOCF) exceeding $500 million in fiscal 2026, with leverage
strengthening to about 2.5x.
"We assume current industry headwinds are transitory, and steady
long-term demand growth for french fries will resume once
restaurant traffic improves.In response to growing global demand
and prior industry capacity constraints, Lamb invested heavily in
capital expansion over the last few years, with projects completed
or nearing completion in the U.S., China, the Netherlands and
Argentina. We believe other industry players have also been
investing in capital expansion, which is now contributing to the
supply-demand imbalance as global demand has slowed. Our base-case
assumes the slowing global demand is temporary and not structural,
supported in part by still steady fry attachment rates and
favorable long-term trends for away from home dining. As such, we
assume normalized industry growth will continue once interest rates
decline and the cumulative effect of menu price inflation
moderates, supporting higher consumer discretionary spending and
increasing restaurant foot traffic.
"However, if weak restaurant traffic persists for longer than
expected or fry attachment rates decline, this could lead to a
longer-term industry supply-demand imbalance that would likely
increase competitive intensity, weaken Lamb's pricing power, and
further pressure its operating leverage. This could lead to
protracted margin impairment and cause us to view the business less
favorably, potentially pressuring our ratings.
"The stable outlook reflects our expectation that Lamb will sustain
leverage below 3.5x in fiscal 2025 despite soft industry demand and
restructuring charges that will weaken profits. It also
incorporates our expectation that leverage will improve comfortably
below 3x in fiscal 2026 as restructuring costs roll off, cost
savings are realized, and operating conditions gradually improve."
S&P could lower the ratings if it expects Lamb's leverage will
increase and remain above 3.5x. This could occur if:
-- Profits deteriorate more severely and for longer than S&P
expects, potentially due to a protracted economic downturn, input
cost inflation, or a structural industry supply-demand imbalance
that increases competitive intensity and weakens the company's
pricing power; or
-- The company transacts larger-than-expected debt-funded
acquisitions or share repurchases.
S&P could also lower the rating if it adopts a less favorable view
of the business because of sustained unfavorable industry trends.
S&P could raise the ratings if the company:
-- Reduces and sustains leverage near or below 2x; or
-- Diversifies its revenue streams, geographic exposures, and
regional potato sourcing concentration, such that we view its
business risk more favorably.
Environmental factors are a negative consideration in our credit
rating analysis of Lamb, consistent with most agribusiness peers.
Lamb is a global producer, provider, and marketer of value-added
frozen potato products, mostly to restaurants and food service
providers. The company sources most of its potatoes from the U.S.
Pacific Northwest, which increases the risk that extreme weather or
significant crop damage in that region would be overly negative to
operating results. Although the company has faced a significant
potato harvest disruption in years past, we believe these factors
are partially offset by Lamb's growing international presence and
its strong and fairly stable margin profile, which is partly due to
irrigation at most of the company's potato farm suppliers from
largely sustainable water sources.
LAVIE CARE: No Resident Care Concern, PCO Report Says
-----------------------------------------------------
Margaret Barajas, the patient care ombudsman, filed her first
report regarding the quality of patient care provided by LaVie Care
Centers, LLC. The report covers the period from July 5 to September
5.
Sadie Creager, a staff ombudsman, made six bankruptcy-related
facility visits while Deborah Meitrott, a volunteer ombudsman, made
a bankruptcy-related visit on July 25 at Pennknoll Village
facility.
The ombudsmen visited with an average of five residents and two
staff during each facility visit. Several residents stated that the
food is unappealing. Multiple residents reported long waits for
call bell response.
Emilie Clemens, a staff ombudsman, visited with an average of three
residents per visit at Locust Grove Retirement Village facility.
Residents have water or beverages and snacks available, and a
choice of foods at mealtimes. The rooms appear clean and odor-free,
with a comfortable temperature. There is no designated smoking
area. The facility is not considered a secure unit.
In the facility visit of July 1, the local ombudsman reported an
activities calendar is posted, with appropriate activities
available at Luther Ridge at Seiders Hill facility. There is an
odor on the third floor of the facility. Lighting was good, and the
hallways were free of clutter. There were no significant concerns
reported.
A copy of the ombudsman report is available for free at
https://urlcurt.com/u?l=fSN4EG from Kurtzman Carson Consultants,
LLC, claims agent.
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.
Troutman Pepper Hamilton Sanders, LLP and FTI Consulting, Inc.
serve as the committee's bankruptcy counsel and financial advisor,
respectively.
Margaret Barajas is the patient care ombudsman appointed in the
Debtors' cases.
LIQUIDATING SUPPLY: Unsecureds Will Get 3% to 5% of Claims in Plan
------------------------------------------------------------------
Liquidating Supply, Inc., f/k/a Supply Source Enterprises, Inc.,
and its Debtor Affiliates submitted an Amended Combined Joint
Chapter 11 Plan of Liquidation and Disclosure Statement dated
September 4, 2024.
The Plan provides for the disposition of the Debtors' Assets and
the distribution of the proceeds in accordance with the priorities
and requirements of the Bankruptcy Code. As of the expected
Confirmation Date, the Assets will largely consist of Cash and
Retained Causes of Action.
The Plan provides for creation of a Liquidation Trust and the
appointment of the Liquidation Trustee to serve as the sole
director, officer, shareholder, and manager of the Debtors. The
Liquidation Trustee will ultimately wind down the Debtors' business
affairs and be empowered to, among other things, administer and
liquidate all Assets, object to and settle Claims, and prosecute
Retained Causes of Action in accordance with the Plan.
The Plan provides for the payment of Wind Down Expenses and
Distributions to Holders of Allowed Claims, including
Administrative Claims, Professional Fee Claims, Priority Tax
Claims, Other Priority Claims, Statutory Fees, Miscellaneous
Secured Claims, and General Unsecured Claims. In addition, the Plan
cancels all Interests in the Debtors, and provides for the
dissolution and wind up of the Debtors' affairs.
Class 3 consists of General Unsecured Claims. Each holder of an
Allowed General Unsecured Claim shall receive its pro rata share of
the GUC Recovery. The allowed unsecured claims total $30,000,000 to
$32,000,000. This Class will receive a distribution of 3% to 5% of
their allowed claims.
Pursuant to the Committee Settlement, upon the Closing Date, each
Holder of a Prepetition Secured Party Deficiency Claim waived the
right to receive any Distribution on account of its Prepetition
Secured Party Deficiency Claim. Class 3 is Impaired under the Plan.
Holders of General Unsecured Claims are entitled to vote to accept
or reject the Plan.
Class 5 consists of all Existing Equity. On the Effective Date,
Existing Equity of the Debtors shall be cancelled, and the Holders
of Existing Equity Interests shall receive no Distribution under
the Plan. Class 5 is Impaired under the Plan.
The Confirmation Hearing will be scheduled for October 22, 2024 at
10:00 a.m. at the Bankruptcy Court, 824 North Market Street, 6th
Floor, Courtroom #1, Wilmington, Delaware 19801 to consider (i)
final approval of the Disclosure Statement as providing adequate
information pursuant to section 1125 of the Bankruptcy Code and
(ii) confirmation of the Plan pursuant to section 1129 of the
Bankruptcy Code.
Payments required to be made under the Plan shall be funded from
(i) Cash held by the Debtors as of the Effective Date, including
Excluded Excess Cash, Additional Excluded Cash, and Remaining
Professional Fee Escrow Amounts, if any; and (ii) net proceeds of
Retained Causes of Action.
To the extent not paid in full in cash on the Effective Date, and
as necessary, reserves for payment of claims not yet allowed and
for Disputed Claims may be funded on the Effective Date, or as soon
thereafter as is practicable, and, in the case of the Professional
Fee Claims, held in the Professional Fee Escrow Account until such
claims are approved, and authorized to be paid, by the Court.
A full-text copy of the Amended Combined Joint Liquidating Plan and
Disclosure Statement dated September 4, 2024 is available at
https://urlcurt.com/u?l=AwhHVw from PacerMonitor.com at no charge.
The Debtors' Counsel:
M. Blake Cleary, Esq.
R. Stephen McNeill, Esq.
Katelin A. Morales, Esq.
POTTER ANDERSON & CORROON LLP
1313 N. Market Street, 6th Floor
Wilmington, Delaware 19801
Tel: (302) 984-6000
Fax: (302) 658-1192
Email: bcleary@potteranderson.com
rmcneill@potteranderson.com
kmorales@potteranderson.com
- and -
Felicia Gerber Perlman, Esq.
Bradley Thomas Giordano, Esq.
Carole M. Wurzelbacher, Esq.
McDERMOTT WILL & EMERY LLP
444 West Lake Street
Chicago, IL 60606-0029
Tel: (312) 372-2000
Fax: (312) 984-7700
Email: fperlman@mwe.com
bgiordano@mwe.com
cwurzelbacher@mwe.com
About Supply Source Enterprises
Supply Source Enterprises Inc. --
https://hig.com/portfolio/supply-source-enterprises/ -- is a
virtual manufacturer of branded and private label personal
protective equipment and janitorial, safety, hygiene and sanitation
products. It is headquartered in Cleveland, Ohio.
Supply Source Enterprises and its affiliates sought relief under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case
No. 24-11054) on May 21, 2024. In its petition, Supply Source
Enterprises reported $50 million to $100 million in assets and $100
million to $500 million in liabilities.
Judge Brendan Linehan Shannon oversees the cases.
The Debtors tapped McDermott Will & Emery, LLP and Potter Anderson
& Corroon, LLP as legal counsels; Thomas Studebaker of Triple P
RTS, LLC (a Portage Point affiliate) as chief restructuring
officer. Kurtzman Carson Consultants is the noting and claims
agent.
LPG 405 ALBERTO: Case Summary & 10 Unsecured Creditors
------------------------------------------------------
Debtor: LPG 405 Alberto Way Residential, LLC
401-409 Alberto Way
Los Angeles, CA 95030
Business Description: The Debtor is engaged in activities related
to real estate.
Chapter 11 Petition Date: October 9, 2024
Court: United States Bankruptcy Court
Northern District of California
Case No.: 24-51531
Debtor's Counsel: William M. Noall, Esq.
GARMAN TURNER GORDON LLP
7251 Amigo Street, Suite 210
Las Vegas, NV 89119
Tel: 725-777-3000
Estimated Assets: $10 million to $50 million
Estimated Liabilities: $10 million to $50 million
The petition was signed by Randolph F. Lamb, Managing Member of
Lamb Partners, LLC, Managing Member of the Debtor.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/RJX2APA/LPG_405_ALBERTO_WAY_RESIDENTIAL__canbke-24-51531__0001.0.pdf?mcid=tGE4TAMA
List of Debtor's 10 Unsecured Creditors:
Entity Nature of Claim Claim Amount
1. RS Lending, Inc. Litigation $2,877,597
Attn: Managing Member or
Bankruptcy Dept
1 Bridge Plaza
North, Ste. 275
Fort Lee, NJ 07024
2. Bucilla Architecture Professional $157,444
Attn: Managing Member or Services
Bankruptcy Dept
1601 Dove Street,
Ste. 187
Newport Beach, CA 92660
3. Brodie CM Professional $40,050
Attn: Managing Member or Services
Bankruptcy Dept
480 Gate 5 Road,
Ste. 110
Sausalito, CA 94965
4. State Water Board Utility $20,598
Attn: Managing Member or
Bankruptcy Dept
1001 I Street
Sacramento, CA
95814
5. Stuart Moore Staub Professional $15,577
Attn: Managing Member or Services
Bankruptcy Dept
641 Higuera St.
Suite 302
San Luis Obispo,
CA 93401
6. O'Leary, Szabatura & Co, LLP Professional $3,500
Attn: Managing Member or Services
Bankruptcy Dept
5150 E. Pacifici Coast Hwy.
Long Beach, CA 90804
7. Kier & Wright Professional $3,275
Attn: Managing Member or Services
Bankruptcy Dept
9015 Murray Ave.
Ste. 120
Gilroy, CA 95020
8. PG&E Utility $2,465
Attn: Managing Member or
Bankruptcy Dept
300 Lakeside Drive
Oakland, CA 94612
9. Montgomery Pacific Professional $1,750
Corporation Services
Attn: Managing Member or
Bankruptcy Dept
4120 Douglas Blvd.,
#306-196
Granite Bay, CA
95746
10. Town of Los Gatos Government Fees $1,000
Attn: Managing Member or
Bankruptcy Dept
110 E. Main Street
Los Gatos, CA 95030
LUMEN TECHNOLOGIES: Moody's Rates $439MM First Lien Notes 'Caa2'
----------------------------------------------------------------
Moody's Ratings assigned Caa2 rating to Lumen Technologies, Inc.'s
$439 million super priority second out first lien senior secured
notes due 2032, and Caa1 rating to Level 3 Financing, Inc.'s (Level
3) $350 million backed second lien senior secured notes maturing in
2032. All other ratings at Lumen, Level 3 and Qwest Corporation
(Qwest) remain unchanged, including Lumen's Caa1 corporate family
rating and Caa1-PD probability of default rating. Lumen's SGL-1
Speculative Grade Liquidity rating also remains unchanged. The
outlook is positive.
Lumen finalized the exchange offer it initially announced on
September 3, 2024. The transaction consisted of exchanging
outstanding unsecured senior notes (i) at Lumen, maturing in 2026,
2027, 2028 and 2029, for 10.0% super priority second out senior
secured notes due in 2032, and (ii) at Level 3, maturing in 2027
and 2028, for 10.0% second lien senior secured notes due in 2032.
The terms and conditions of the 10.0% super priority second out
senior secured notes, and the 10.0% second lien senior secured
notes, are the same as existing debt at Lumen and Level 3.
The Caa2 rating assigned to the Lumen $439 million super priority
second out notes is one notch below the CFR due to its
subordination to Lumen's super priority first out revolving credit
facility and other debt at Level 3. While the Caa1 rating assigned
to the Level 3 $350 million second lien secured notes is in line
with the CFR, reflecting its subordination to Level 3's first lien
secured notes, and its structural position to the outstanding debt
at Lumen.
RATINGS RATIONALE
Lumen's Caa1 CFR reflects execution risks associated with the
company's elevated capex program, uncertainty around the pace of
recovery in the company's earnings and increasing leverage. In
addition, Moody's rating considers the highly competitive industry
Lumen operates in, limited pricing power and continued customer
churn, particularly in its mass market division. To offset these
competitive challenges, Lumen is aggressively reinvesting in its
business to (i) deliver compelling value add solutions such as
network-as-a-service for its enterprise customers, (ii) deploy
additional fiber strands to meet growing demand from large
corporations looking to secure future fiber capacity, and (iii)
provide faster broadband speeds for its Mass Markets subscribers.
As a result, for the next two years Moody's expect debt-to-EBITDA
(inclusive of Moody's adjustments) to remain elevated at over 5x,
with the potential for improvement in 2026.
Lumen's CIS-5 Credit Impact Score indicates the rating is lower
than it would have been if ESG risk exposures did not exist and the
negative impact is more pronounced than issuers scored CIS-4. The
score reflects the company's aggressive financial policy, elevated
leverage, and changing demographic and societal trends towards the
use of wireline connectivity which is negative affecting
performance in their Mass Markets division.
The SGL-1 speculative grade liquidity rating reflects Moody's
expectation that Lumen will have very good liquidity over the next
year, supported by around $1.5 billion in cash as of June 30, 2024,
about $739 million in availability (net of letter of credits) under
the company's $956 million senior secured revolving credit facility
expiring 2028, and Moody's expectation of around $1 billion of free
cash flow in 2024.
The positive outlook reflects Moody's expectation that Lumen will
generate improving free cash flow in 2024 and 2025 despite
increasing capital expenditures to expand its footprint and
maintain very good liquidity, and declining revenue and EBITDA
trends. The positive outlook also reflects the potential for Lumen
to secure additional orders for fiber capacity as demand for
network infrastructure grows to meet AI driven demand.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if Lumen's order book materially
increases and its operating performance improves, the company
achieves predictable and material free cash flow generation that
helps address the sustainability of its capital structure, and the
company maintains very good liquidity.
The ratings could be downgraded if the company's liquidity
position, operating performance or ability to service its debt
deteriorates, the company suffers a material decline / cancellation
in the recent $5 billion order book or demand for fiber capacity
materially stalls, or Moody's view on the likelihood of a default
increases.
Headquartered in Monroe, Louisiana, Lumen Technologies, Inc., is an
integrated communications company that provides an array of
communications services to large enterprise, mid-market enterprise,
government and wholesale customers in its larger Business segment.
The company's smaller Mass Markets segment primarily provides
broadband services to its residential and small business customer
base.
The principal methodology used in these ratings was
Telecommunications Service Providers published in November 2023.
MACAR TRANS: Case Summary & 15 Unsecured Creditors
--------------------------------------------------
Debtor: Macar Trans LLC
139 Churchill Downs Drive
Fairview, NC 28730
Chapter 11 Petition Date: October 9, 2024
Court: United States Bankruptcy Court
Western District of North Carolina
Case No.: 24-10180
Judge: Hon. George R. Hodges
Debtor's Counsel: Richard S. Wright, Esq.
MOON WRIGHT & HOUSTON, PLLC
212 N. McDowell Street
Suite 200
Charlotte, NC 28204
Tel: 704-944-6560
Fax: 704-944-0380
E-mail: rwright@mwhattorneys.com
Total Assets: $900,081
Total Liabilities: $1,592,041
The petition was signed by Pavel Dureaghin as member/manager.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 15 unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/B5QXULI/Macar_Trans_LLC__ncwbke-24-10180__0001.0.pdf?mcid=tGE4TAMA
MAGNERA CORP: Moody's Rates New $500MM Secured 1st Lien Notes 'B1'
------------------------------------------------------------------
Moody's Ratings assigned a B1 rating to Magnera Corporation's new
$500 million senior secured first lien notes due 2031. The
company's B1 corporate family rating and all other ratings remain
unchanged. The outlook is stable.
Together with the senior secured first lien term loan B rated in
September, the new notes will be used to repay the existing senior
secured first lien revolving credit facility and the term loan
(unrated) at Glatfelter Corporation, and to pay an approximately $1
billion distribution to Berry Global Group Inc., and fees and
expenses related to the transaction.
The new first lien secured notes will be secured pari passu to the
term loan and the existing $500 million senior unsecured notes at
Glatfelter, which will become secured along with the merger between
Berry Global Group Inc.'s (Ba1 stable) health, hygiene and
specialties nonwovens and films (HHNF) business and Glatfelter
Corporation (Glatfelter, B3 under review for upgrade). The merger
is expected to close in the second half of calendar 2024.
"The B1 rating on the new first lien secured notes, on par with the
CFR, reflects the largest portion of debt in Magnera's debt capital
structure, together with the first-lien term loan announced in
September," said Motoki Yanase, VP - Senior Credit Officer at
Moody's Ratings.
RATINGS RATIONALE
Magnera Corporation's B1 CFR reflects the company's leading market
position for polymer and fiber based products for hygiene, health
care and specialty end markets; geographic diversity with
operations in the Americas, Europe and Asia; long history and
strong R&D partnership with global blue chip consumer packaged
goods companies; and positive free cash flow that Moody's expect
will largely go to debt reduction.
These credit strengths are counterbalanced with the rating
constraints, including elevated financial leverage, which Moody's
expect to trend around 5x for the next 12-18 months after the
merger; lower sales for health care products from their peak during
the pandemic with reduced capacity utilization at the moment;
execution risk to integrate Glatfelter's business and improve
profitability; and intense competition in the end markets in a
fragmented industry.
The stable outlook reflects Moody's expectation that Magnera will
continue to restrain its capital spending to generate free cash
flow, and focus on improving profitability and financial leverage
over the next 12-18 months.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
Moody's could upgrade Magnera's ratings if the company integrates
both companies' businesses, realizes the planned synergies, and
improves profitability and pays down debt. Specifically, Moody's
could upgrade the ratings if debt/EBITDA leverage is sustained
below 4x, EBITDA/interest expense is above 4x, and free cash
flow/debt improves to above 5%.
Moody's could downgrade the ratings if the company loses its
customers and fails to expand its business, leading to weaker
credit metrics and liquidity. Specifically, Moody's could downgrade
the ratings if debt/EBITDA remains above 5x, EBITDA/interest is
below 3x, and free cash flow remains negative.
The principal methodology used in this rating was Packaging
Manufacturers: Metal, Glass and Plastic Containers published in
December 2021.
Magnera Corporation is a manufacturer of specialty materials based
on nonwoven fibers and films. Its major products include sanitary
wipes, diapers for babies and adults, feminine hygiene products,
food and beverage filtration papers, facial masks and filtration
media, medical gowns and drapes, surgical towels, and wall cover.
The company also manufactures specialty products for industrial
usage such as flexible intermediate bulk container (FIBC) bags,
geotextiles and cable wrap. Moody's expect the company to be listed
on New York Stock Exchange. Pro forma revenue for the combined
business for the 12 months that ended June 2024 was about $3.5
billion.
MARKETING ANALYSTS: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: Marketing Analysts, LLC
2000 Sam Rittenberg Blvd #3007
Charleston, SC 29407
Business Description: The Debtor is a marketing agency in South
Carolina.
Chapter 11 Petition Date: October 9, 2024
Court: United States Bankruptcy Court
District of South Carolina
Case No.: 24-03671
Judge: Hon. Elisabetta Gm Gasparini
Debtor's Counsel: Michael Conrady, Es.q
CAMPBELL LAW FIRM, PA
PO Box 684
Mt. Pleasant, SC 29465
Tel: (843) 884-6874
Fax: (843) 884-0997
Total Assets: $332,938
Total Liabilities: $1,441,611
The petition was signed by Robert Clark as manager/member.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 20 largest unsecured creditors is available
for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/EGLTDZY/Marketing_Analysts_LLC__scbke-24-03671__0001.0.pdf?mcid=tGE4TAMA
MIDAS GOLD: Net Disposable Income to Fund Plan
----------------------------------------------
Midas Gold Group, LLC, filed with the U.S. Bankruptcy Court for the
District of Arizona a Plan of Reorganization dated September 3,
2024.
The Debtor is engaged in the retail sales of gold, silver and
precious metals. Debtor was formed on July 15, 2010, as a limited
liability company under the laws of the State of Arizona.
The Debtor's sole owner and manager is RCP Holding Group, LLC, a
Delaware limited liability company ("RCP"). The members of RCP are
James Clark, Gabor Panczel, and Ken Russo, each having one-third
ownership interest. Mr. Clark, Mr. Panczel, and Mr. Russo are also
Vice Presidents of Debtor.
The Debtor estimates that the aggregate amount of unsecured claims
which are either scheduled or are subject to proofs of claim equal
approximately $6,333,973.74. Of these claims, $168,000 are
duplicative, $1,728,631.51 are disputed, $752,707.23 are disputed
claims of Haley and Sordia, and $1,356,573.87 are unscheduled
claims which are subject to proofs of claim and have not yet been
evaluated.
In summary, each holder of a claim will receive or retain under the
Plan on account of such claim property of a value, as of the
Effective Date of the Plan, that is not less than the amount that
such holder would so receive or retain if the Debtor were
liquidated under Chapter 7 of the Bankruptcy Code on such date.
This Plan proposes to pay creditors of Debtor with Allowed Claims
from Debtor's Net Disposable Income over a period of 5 years
following the Effective Date of the Plan (estimated to be through
December 31, 2029).
Class 3 consists of Non-priority unsecured creditors. Each holder
of an allowed unsecured nonpriority claim will be paid from
Debtor's Net Disposable Income (which will be determined net of any
required payments of any administrative and priority claims.
Payments shall begin after all administrative and priority claims
(including priority tax claims are paid in full) together with the
proceeds of liquidating assets of Debtor not used by Debtor in the
ordinary course. Subject to available cash flow, payments shall
occur in annual payments beginning in December 2025, and annually
thereafter. This Class is impaired.
Class 4 consists of Equity security holders of the Debtor. The
Debtor shall retain all assets of Debtor's bankruptcy estate, and
such assets shall be revested in Debtor upon confirmation of the
Plan in accordance with Section 1141(b) of the Bankruptcy Code. All
equity interest holders shall retain their equity interest in
Debtor subject to the terms and provisions of this Plan.
The Debtor shall establish a Plan Fund for the management of all
funds for distribution to creditors and claimants. The Plan Fund
shall be administered by the Subchapter V Trustee regardless of
whether Plan confirmation is consensual unless otherwise determined
by the Court. Debtor shall make deposits into the Plan Fund
annually following the Effective Date of the Plan from Debtor's
actual Net Disposable Income.
A full-text copy of the Plan of Reorganization dated Sept. 3, 2024
is available at https://urlcurt.com/u?l=l7j3wm from
PacerMonitor.com at no charge.
Attorney for the Debtor:
Alan Meda, Esq.
Burch & Cracchiolo, P.A.
1850 N. Central Ave., Suite 1700
Phoenix, AZ 85004
Tel: (602) 274-7611
Email: ameda@bcattorneys.com
About Midas Gold Group
Midas Gold is a second-generation precious metals and gold IRA
business that is veteran-owned and operated.
Midas Gold Group, LLC, filed its voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bankr. D. Ariz. Case No.
24-04587) on June 7, 2024, listing $2,404,132 in assets and
$3,352,112 in liabilities. The petition was signed by James Clark
as member.
Judge Daniel P. Collins presides over the case.
Alan A. Meda, Esq., at BURCH & CRACCHIOLO, P.A., is the Debtor's
counsel.
MIDCAP FINCO: Fitch Assigns 'BB+' Rating, Outlook Stable
--------------------------------------------------------
Fitch Ratings has assigned a 'BB+' rating to MidCap FinCo
Intermediate LLC (MidCap). The Rating Outlook is Stable.
On Sept. 30, 2024, MidCap completed a corporate restructuring for
the purpose of redomiciling the company from Ireland back to the
U.S. The restructuring took place through an asset transfer, with
MidCap FinCo Intermediate Holdings Limited (predecessor entity)
contributing 100% of its assets to MidCap FinCo Intermediate LLC
(successor entity).
The restructuring also resulted in the replacement of the guarantor
on MidCap Financial Issuer Trust's senior unsecured debt, from the
predecessor entity to the successor entity. This transaction is
neutral to the senior unsecured debt rating of 'BB'.
Fitch has withdrawn the ratings of MidCap FinCo Intermediate
Holdings Limited following the reorganization.
Key Rating Drivers
MidCap's ratings reflect its strong middle market franchise and
relationship with Apollo Asset Management, Inc. (Apollo; A/Stable)
which provides access to deal flow, a lower-risk portfolio profile,
low portfolio concentrations, minimal exposure to equity
investments, relatively strong asset quality and an experienced
management team.
Rating constraints specific to MidCap include higher leverage
compared to commercial lending peers, below-average core earnings
metrics, a largely secured funding profile and the potential impact
of meaningful portfolio company revolver draws on leverage and
liquidity.
The Stable Outlook reflects Fitch's expectation that MidCap will
retain underwriting discipline, demonstrate relatively sound credit
performance, reduce leverage to the targeted range and maintain
sufficient funding diversity and liquidity to navigate the current
economic environment.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
A sustained increase in leverage above 4.5x, a sustained reduction
in unsecured debt below 10%, material deterioration in asset
quality, an inability to maintain sufficient liquidity to fund
interest expenses and revolver draws, a change in the perceived
risk profile of the portfolio, material operational or risk
management failures, and damage to the firm's franchise that
negatively affects its access to deal flow and industry
relationships could drive negative rating action.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
A sustained reduction in leverage to below 3.0x, improved funding
flexibility — including unsecured debt approaching 35% of total
debt — and strong and differentiated credit performance of recent
vintages could drive positive rating action. Any ratings upgrade
would be contingent on the maintenance of consistent operating
performance, a continued focus on first-lien investments and a
sufficient liquidity profile.
DEBT AND OTHER INSTRUMENT RATINGS: KEY RATING DRIVERS
The rating on unsecured debt issued by MidCap's subsidiary, MidCap
Financial Issuer Trust, is one notch below the Issuer Default
Rating (IDR) given the high balance sheet encumbrance and the
largely secured funding profile, which indicates weaker recovery
prospects under a stress scenario.
DEBT AND OTHER INSTRUMENT RATINGS: RATING SENSITIVITIES
The unsecured debt rating is expected to move in tandem with the
Long-Term IDR. However, an increase in the proportion of unsecured
funding approaching 25%, assuming no change to the firm's leverage
target or the creation of a sufficient unencumbered asset pool
which alters Fitch's view of the recovery prospects for the debt
class, could result in the unsecured debt rating being equalized
with the IDR.
SUBSIDIARY AND AFFILIATE RATINGS: RATING SENSITIVITIES
MidCap Financial Issuer Trust's Long-Term IDR is expected to move
in tandem with the Long-Term IDR of the parent.
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
----------- ------ -----
MidCap FinCo
Intermediate
Holdings Limited LT IDR WD Withdrawn BB+
MidCap FinCo
Intermediate LLC LT IDR BB+ New Rating
MISSOURI MT HOLDINGS: Sec. 341(a) Meeting of Creditors on Nov. 6
----------------------------------------------------------------
Missouri MT Holdings LLC filed Chapter 11 protection in the Eastern
District of New York. According to court documents, the Debtor
reports between $1 million and $10 million in debt owed to 1 and 49
creditors. The petition states funds will not be available to
unsecured creditors.
A meeting of creditors under 11 U.S.C. Section 341(a) is slated for
Nov. 6, 2024 at 10:00 a.m. in Room Telephonically on telephone
conference line: 1 (877) 960-2850. participant access code:
5942427#.
About Missouri MT Holdings
Missouri MT Holdings LLC sought relief under Chapter 11 of the
Bankruptcy Code (Bankr. E.D.N.Y. Case No. 24-73795) on Oct. 2,
2024. In the petition filed by Samuel Goldner, Manager of GCM
Manager LLC, the Debtor estimated assets up to $50,000 and
liabilities between $1 million and $10 million.
The Honorable Bankruptcy Judge Louis A. Scarcella handles the
case.
The Debtor is represented by:
Gary F. Herbst, Esq.
LAMONICA HERBST & MANISCALCO, LLP
3305 Jerusalem Avenue, Suite 201
Wantagh, NY 11793
Tel: 516-826-6500
E-mail: gfh@lhmlawfirm.com
NB CREST: Claims Will be Paid from Property Sale/Refinance
----------------------------------------------------------
NB Crest Investor Units, LLC filed with the U.S. Bankruptcy Court
for the Central District of California a Disclosure Statement
describing Chapter 11 Plan dated September 4, 2024.
The Debtor is one of ten tenants in common owners of College Crest
Apartments, a student apartment complex located at 1555 NE Merman
Dr., Pullman, WA 99163 ("Property"). The Property was acquired in
2017 by the Debtor and its fellow tenants in common owners.
Each of the tenants in common owners are limited liability
companies organized under Delaware law. The Debtor is wholly-owned
by Nelson Partners, LLC, an entity owned by Patrick Nelson which is
engaged primarily in the sponsorship and management of student
housing properties across the United States).
The Debtor owns 10% of the ownership interest in the Property; the
other 90% of the ownership interest in the Property is owned by
nine tenants in common investors (each holding a 10% interest) that
are unrelated to Nelson Partners. The Managing Member of all ten
tenants in common owners is Nelson.
The Property was constructed in 1974 and partially
renovated/constructed in 2018-2020 but is only approximately 50%
occupiable. Prior to the Petition Date, the Debtor and its co
owners were actively engaged in construction work on the Property
that was necessary to restore the Property to full occupancy. The
Property has 116 apartment units; of these units, forty-eight are
studios, two are one bedroom/one bath, thirty are two bedroom/one
bath, and thirty-six are three bedroom/one-and-a half bath.
The Debtor commenced this Case predominantly in light of: (i) the
maturity of the loan secured by the Property; (ii) the sale of the
loan and the inability of the Debtor to resolve or refinance the
loan; and (iii) a scheduled foreclosure sale on the Property by the
lender on June 7, 2024.
Class 10 consists of All General Unsecured Claims that are not
Administrative Claims or Priority Claims. Allowed Class 10 Claims
will be paid in full within 30 days of the Effective Date if the
Property is sold. If the Property is not sold, then Allowed General
Unsecured Claims will receive an initial Pro Rata Distribution of
the Available Cash within 120 days of the Effective Date.
To the extent Allowed Class 10 Claims are not paid in full by the
initial Pro Rata Distribution and provided that there is Available
Cash, the Debtor will make quarterly Pro Rata Distributions to the
Allowed Class 10 Claims until the Allowed Class 10 Claims are paid
in full.
If a Class 10 Claim is disputed on the Effective Date, then pending
resolution of the dispute by a Final Order, the Debtor will reserve
sufficient funds to pay the Disputed Claim as agreed or as ordered
by the Bankruptcy Court. Once the dispute is resolved by a Final
Order, the Debtor will make a Distribution on account of the
Allowed Class 10 Claim in accordance with the treatment described
in the foregoing paragraph.
If Debtor (1) fails to make any payment required under this Plan,
or (2) fails to perform any other obligation required under this
Plan for more than 14 days after the time specified in this Plan,
or (3) performs any act that is inconsistent with the terms of this
Plan, then a holder of an Allowed Class 10 Claim may file and serve
upon Debtor and Debtor's attorney a written notice of default at
their most recent address(es) listed in this case. Debtor is in
material default under this Plan if Debtor fails within 21 days
after service of that notice of default, plus an additional 3 days
if served by mail, either to cure the default or obtain from the
court an extension of time to cure the default or a determination
that no material default occurred.
Class 11 consists of Interest Holders. After the payment to Classes
1 to 10, all remaining property of the Debtor's Estate, after
consummation of the sale or refinance of the Property pursuant to
the terms of the Plan, shall be revested in the Debtor on the
Effective Date and Interests in the Debtor shall be retained and
are unimpaired.
Funding for the Plan shall come from the Debtor's sale or refinance
of the Property. Prior to the sale or refinance of the Property,
Debtor will complete the improvements on the Property. Based upon
the quote from Debtor's proposed contractor, the improvements are
expected to be completed in 100 days from start of construction and
is expected to cost $600,000.
Based upon the 100-day construction timeline, Debtor anticipates
that it will receive a certificate of occupancy for the Property on
or about January 31, 2025. Once Debtor obtains the certificate of
occupancy, Debtor will be able to enter into leasing contracts with
students for the following school year. Then, on or about April 1,
2025, the Debtor can list the Property for sale on the open market.
Based upon this timeline, Debtor believes that any sale on the
Property will close prior to October 1, 2025.
A full-text copy of the Disclosure Statement dated September 4,
2024 is available at https://urlcurt.com/u?l=pV4KME from
PacerMonitor.com at no charge.
Attorneys for the Debtor:
Marc C. Forsythe, Esq.
GOE FORSYTHE & HODGES, LLP
17701 Cowan, Suite 210
Irvine, CA 92614
Tel: (949) 798-2460
Fax: (949) 955-9437
Email: mforsythe@goeforlaw.com
About NB Crest Investor Units
NB Crest Investor is a Single Asset Real Estate debtor (as defined
in 11 U.S.C. Section 101(51B)). The Debtor offers studio, two- and
three-bedroom apartments perfect for students.
NB Crest Investor Units filed its voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No.
24-11457) on June 6, 2024, listing $10 million to $50 million in
both assets and liabilities. The petition was signed by Patrick S.
Nelson as manager.
Brian T. Corrigan, Esq., at CORRIGAN & MORRIS LLP, represents the
Debtor as counsel.
NEVADA COPPER: Completes $128M Asset Sale to Kinterra Affiliate
---------------------------------------------------------------
Nevada Copper Corp. and its subsidiaries announced on Oct. 9, 2024,
that, in connection with its previously announced asset purchase
agreement with Southwest Critical Materials LLC, an affiliate of
Kinterra Capital Corp., the Company has completed the sale of
substantially all of the assets of the Company and its
subsidiaries.
The APA was executed as a stalking horse bid in the sale process
initiated by the Company in accordance with Section 363 of the U.S.
Bankruptcy Code following the Company's filing of a voluntary
petition for relief under Chapter 11 of the United States
Bankruptcy Code in the Bankruptcy Court of the District of Nevada
on June 10, 2024. The purchase price under the APA included cash
consideration of US$128 million, the Buyer's payment of cure costs
for contracts it assumed, and an adjustment for the assumption of
certain liabilities.
On September 27, 2024, the U.S. Bankruptcy Court entered an order:
(i) approving the sale of assets free and clear of all
encumbrances, and interests;
(ii) authorizing the assumption by and assignment to the Buyer of
certain executory contracts and unexpired leases; and
(iii) granting customary related relief.
On October 2, 2024, the Superior Court of Justice (Commercial List)
of Ontario granted a Recognition and Vesting Order under the
Companies' Creditors Arrangement Act (Canada), which recognized the
Sale Order in all Provinces and Territories of Canada. The
Transaction closed following these approvals and the satisfaction
of the remaining closing conditions. The proceeds from the
Transaction are expected to be administered and distributed to
certain creditors, subject to court approval, in the Company's
bankruptcy process. There will not be sufficient proceeds from the
Transaction to allow for any payments to the holders of the
Company's common shares.
"This acquisition aligns with Kinterra's focus on investing in
upstream energy transition minerals and infrastructure assets where
there are strategic opportunities to take advantage of significant
value dislocation," said Cheryl Brandon, Co-Managing Partner at
Kinterra. "Our ability to execute on complex transaction structures
in a nimble and effective manner, all within a technically complex
sector, differentiates our team and permits us to capitalize on
high-value opportunities like Pumpkin Hollow."
"Critical materials and related infrastructure are the foundation
of the energy transition, and we are excited to add another
excellent upstream asset to our portfolio, which prioritizes
investments in stable jurisdictions," added Kinterra Co-Managing
Partner Kamal Toor. "Our relationships, technical know-how and
experience, have created a transactional flywheel that we will
continue to leverage to opportunistically unlock value in a space
that has historically suffered from structural underinvestment."
Going forward, Kinterra will leverage its technical expertise and
operational excellence to advance the multiple assets within the
Pumpkin Hollow package, aligning the projects with our first-class
sustainability standards and key stakeholder interests.
Kinterra was advised by Latham & Watkins LLP as acquisition and
bankruptcy counsel, Holland & Hart LLP on Nevada specific matters,
and Davies Ward Phillips & Vineberg LLP as Canadian counsel.
About Kinterra Capital Corp.
Kinterra is a Toronto-based private equity firm investing in the
people, ideas, critical materials, and strategic infrastructure
needed to accelerate the energy transition. With domain-specific
technical and transactional expertise, Kinterra identifies and
manages investments that create value for stakeholders while
enhancing the communities in which it operates. By focusing on
innovation, analysis, value creation and execution, Kinterra is
investing in assets that contribute to a more sustainable future.
For more information, visit http://www.kinterracapital.com.
About Nevada Copper
Nevada Copper, Inc., and affiliates have been in the business of
mining copper and other minerals and operating a processing plant
that refines copper ore into copper concentrate, with the bulk of
the debtors' operations focused on their Pumpkin Hollow project,
which is located outside of Yerington, Nevada. The project, which
contains substantial mineral reserves and resources, including
copper, gold, silver, and iron magnetite, consists of an
underground mine and processing facility, together with an open pit
project that is in the pre-feasibility stage of development.
The debtors sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. Lead Case No. 24-50566) on June 10, 2024.
In the petition signed by Gregory J. Martin, executive vice
president and chief financial officer, Nevada Copper disclosed
$500,000,001 to $1 billion in assets and $100 million to $500
million in liabilities. Judge Hilary L. Barnes oversees the cases.
The debtors tapped Allen Overy Shearman Sterling US, LLP, as
general bankruptcy counsel; McDonald Carano, LLP, as Nevada
bankruptcy counsel; AlixPartners, LLP, as financial and
restructuring advisor; Torys, LLP, as special Canadian and
corporate counsel; Moelis & Company, LLC, as financial advisor and
investment banker; and Epiq Corporate Restructuring, LLC, as notice
and claims agent and administrative advisor.
The U.S. Trustee for Region 17 appointed an official committee to
represent unsecured creditors in the Chapter 11 cases of Nevada
Copper, Inc. and Nevada Copper Corp.
ONE TABLE RESTAURANT: Gets Court OK for $28M Credit Bid Sale
------------------------------------------------------------
Yun Park of Law360 Bankruptcy Authority reports that One Table
Restaurant Brands LLC, the Los Angeles-based operator of casual
restaurant chain Tender Greens and Mexican eatery Tocaya, received
a Delaware bankruptcy judge's interim approval Monday, October 7,
2024, to sell its assets to a private equity-backed stalking horse
bidder for a $28 million credit bid.
About One Table Restaurant Brands
One Table Restaurant Brands LLC is a next generation restaurant
platform of best-in-class emerging concepts.
One Table Restaurant Brands LLC sought relief under Chapter 11 of
the U.S. Bankruptcy Protection (Bankr. D. Del. Case No. 24-11553)
on July 18, 2024. In the petition filed by Harald Herrmann, as
authorized signatory, the Debtor estimated assets up to $50,000 and
liabilities between $10 million and $50 million.
The Debtor is represented by:
Thomas Joseph Francella, Jr., Esq.
Raines Feldman Littrell LLP
1201 W. 5th Street, Suite T-400
Los Angeles, CA 90017
ORIGINAL HAROLD'S CHICKEN: Seeks Bankruptcy Protection
------------------------------------------------------
Alicia Kelso of Nation's Restaurant News reports that Original
Harold's Chicken of Nevada LLC III has filed for Chapter 11
bankruptcy in the District of Nevada. The company operates two
locations in the state, one in North Las Vegas, and one in
Henderson.
According to court documents, the company lists $40,000 in debt
owed to Bitty Advance and Bridge 33 Capital LLC. No assets are
listed in its petition and the company did not specify a reason for
filing. The company also indicated that no funds are available for
distribution to unsecured creditors after administrative expenses
are paid.
Harold’s Chicken Shack was founded in the South Side of Chicago
by Harold Pierce in 1950, specializing in dumplings and chicken
feet. According to the company, the concept developed out of
necessity as large quick-service chains didn’t have much of a
presence in African American neighborhoods at the time.
The chain has since expanded its menu to include fish, shrimp,
livers, gizzards, sandwiches, salads, and wraps. It has also
expanded its footprint, with 46 locations listed on its website, a
majority of which are in Illinois. In addition to Nevada, the chain
has also expanded to Texas, Missouri, Indiana, Georgia, California,
and Arizona. In 2021, Eat This, Not That! named Harold's as the
most beloved fast-food chain in Illinois. Last year, Harold's was
No. 15 in Nation's Restaurant News' 100 Under 100 feature
highlighting the fastest-growing chains with less than 100
locations. From 2022 to 2023, the company grew its unit count by
25%.
Harold's Chicken's chief executive officer Kristen Pierce is the
daughter of founder Harold Pierce and is listed as the authorized
signatory on the Original Harold's Chicken of Nevada petition.
This marks the latest Chapter 11 filling in a busy year for such
activity. Bankruptcy filings have come from concepts big and small,
including Red Lobster, BurgerFi, Tijuana Flats, Roti, Hawkers Asian
Street Food, Bucca di Beppo, World of Beer Bar & Kitchen, Tender
Greens and Tocaya, Melt Bar & Grill, Rubio's Coastal Grill, Sticky
Fingers, Boxer Ramen, Oberweis Dairy, Foxtrot/Dom's Kitchen,
franchisees for Arby's, Pizza Hut, and Dickey's Barbecue Pit, and
more.
About Original Harold's Chicken of Nevada
Original Harold's Chicken of Nevada LLC III is a beloved fried
chicken restaurant chain.
Original Harold's Chicken of Nevada LLC III sought relief under
Subchapter_V of Chapter 11 of the U.S. Bankruptcy Code (Bankr. D.
Nev. Case No. 24-15201) on Oct. 4, 2024. In the petition filed by
Kirsten Pierce, as member and manager, the Debtor reports estimated
assets and liabilities up to $50,000.
The Debtor is represented by:
David A. Riggi, Esq.
RIGGI LAW FIRM
6320 N Simmons Street
North Las Vegas, NV 89048
OUTKAST ELECTRICAL: Court OKs Cash Collateral Access
----------------------------------------------------
David Madoff, the Subchapter V trustee for Outkast Electrical
Contractors, Inc., received interim court approval to use any funds
received from Dimeo Construction Company that may constitute cash
collateral.
The interim order penned by Judge Janet Bostwick of the U.S.
Bankruptcy Court for the District of Massachusetts authorized the
trustee to use funds advanced under an operational funding
arrangement with Dimeo until Nov. 22 in accordance with a
court-approved budget.
The funding arrangement was approved by the bankruptcy court in a
separate order on Oct. 2.
The trustee can use any additional funds that qualify as cash
collateral to reimburse Dimeo in the amount of $24,105 and make
"adequate protection" payment in the amount of $10,000 to BDC
Community Capital Corp., a secured creditor.
BDC, Mill Cities Community Investments and the U.S. Small Business
Administration will be granted replacement liens on post-petition
assets. These liens will have the same priority as their
pre-bankruptcy liens.
The next hearing is scheduled for Nov. 19.
About Outkast Electrical Contractors
Outkast Electrical Contractors, Inc. provides full-service
commercial electrical construction and renovation services
throughout the greater Boston area. The company is based in
Dorchester Center, Mass.
Outkast filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. D. Mass. Case No. 24-10272) on February 13,
2024, with $500,000 to $1 million in assets and $1 million to $10
million in liabilities. David Madoff, Esq., a partner at Madoff &
Khoury, LLP, serves as Subchapter V trustee.
Judge Janet E. Bostwick oversees the case.
John Sommerstein, Esq., at John F. Sommerstein represents the
Debtor as legal counsel.
PATRICK INDUSTRIES: Fitch Assigns 'BB' LongTerm IDR, Outlook Stable
-------------------------------------------------------------------
Fitch Ratings has assigned Patrick Industries, Inc. a first-time
'BB' Long-Term Issuer Default Rating (IDR). Fitch has also assigned
a 'BB'/'RR4' rating to Patrick's senior unsecured notes, including
its convertible notes. The Rating Outlook is Stable.
Patrick's ratings reflect its position as a leading supplier to the
outdoor enthusiast and housing end markets. The ratings also
reflect the company's variable cost structure, which supports
margins and FCF through the cycle. Additionally, the ratings
reflect Patrick's exposure to the discretionary enthusiast
recreational vehicle (RV) and marine markets. Patrick's low capex
intensity and capital allocation framework supports its financial
flexibility. Fitch's rating case forecasts annual FCF of $150
million-$300 million and gross EBITDA leverage in the mid-2.0x
range.
The Stable Outlook reflects Fitch's expectation that the company's
end markets have passed the cyclical bottom, and that Patrick's
customers will increase production in 2025 and 2026. This should
enable the company to grow revenues while generating
mid-single-digit FCF margins.
Key Rating Drivers
Reliance on Outdoor Enthusiast End Markets: Fitch views Patrick's
reliance on its discretionary outdoor enthusiast markets as a key
revenue and cash flow risk. As of 2Q24, 69% of Patrick's LTM
revenue came from the outdoor enthusiast markets, comprised of
Recreational Vehicle (RV) (45% of LTM revenue), Marine (17%) and
Powersports (7%).
Wholesale RV and Marine production has followed a boom-bust cycle
from 2021 to 2023, with shipments falling 48% to 313,174 units
(from 600,240 in 2021) for RVs and 7% to 192,346 (from 206,200 in
2022) for Marine. As a result, Patrick's 2023 revenue decreased 29%
to $3.5 billion, down from its $4.9 billion peak in 2022. However,
Fitch believes these end markets have likely passed the bottom of
their cycle, and expects shipments to increase by the mid-to-high
teens in 2025 and 2026, as dealers start restocking inventory in
response to rebounding retail demand.
Flexibility Drives Resilient Margins: Patrick's operational and
cost structures are highly flexible and largely consists of raw
materials and labor. In the event of a sustained downturn, Patrick
has the operational flexibility to quickly adjust output based on
demand fluctuations. Fitch expects the company to preserve its
gross margins in the high-teens and its Fitch-calculated EBITDA
margins in the mid-to-high single digits. The company also carries
limited working capital, with a cash conversion cycle of about 65
days, which helps drive through-the-cycle FCF.
Despite a 29% decrease in yoy sales in 2023, Patrick reduced its
labor and raw material costs by 50 bps and 330 bps, respectively,
as a percentage of net sales. Moreover, the company's
Fitch-calculated EBITDA margins compressed by only 137 bps to
12.4%, down from 13.8%, as the company decreased its warehouse and
SG&A expenses. The company's through-the-cycle FCF generation was
evident during the pandemic downturn with $104 million in 2020 and
limited variability between 2022 and LTM 2024 remaining at about
$300 million.
Acquisitions Strengthen Business Profile: Patrick has significantly
grown over the past decade through a series of acquisitions. These
acquisitions have increased its size and scale, bolstering its
business profile, while strategically diversifying its product mix
and end markets. The company reduced its exposure to the RV market
to 43% in 2023 from as high as 75% in 2015. During this time,
Patrick entered the Marine and Powersports markets, which brought
cross-selling and expense synergies through shared infrastructure
for different product categories.
Content-per-unit for the RV and marine markets was only $4,966 and
$3,935 at LTM 2Q24, respectively. This indicates a significant
potential for further consolidation through acquisitions. Patrick's
LTM revenue grew to $3.6 billion in 2Q24, up from $2.5 billion in
FY 2020, largely through acquisitions, which added an estimated
$619 million of revenue and $114 million of EBITDA. Although the
company's revenue predominantly consists of sales to the outdoor
enthusiast markets, Patrick's exposure to the less-discretionary
housing market helps moderate the company's revenue profile through
economic cycles.
EBITDA Leverage Expected to Decrease: Fitch expects Patrick's gross
EBTIDA leverage to decrease to about 2.5x by 2025 from its current
level of 2.9x as of 2Q24. This is due to improving retail demand
and wholesale unit volume growth. Fitch believes the company will
continue executing bolt-on acquisitions within its existing end
markets, particularly Powersports, to diversify its product mix,
enter new geographies and expand its size and scale. Fitch also
believe the company will rely on its cash on hand and revolver to
accomplish this.
The company has the capacity to flex its share repurchases as it
balances bolt-on acquisitions, strategic capex deployment and
quarterly dividends to stay within its EBITDA 2.25x-2.5x net
leverage target.
Mid-Single-Digit FCF Margins: Fitch expects Patrick's post-dividend
FCF margins to run in the mid-single digits over the next few
years. This will be driven by Fitch-calculated EBITDA margins
stabilizing in the 12%-13% range over the intermediate term. The
company's FCF margins will also be supported by its low capex
requirements and by working capital management. Revenues declined
by 29% in 2023, but the company flexed its receivables, payables
and inventory to generate about $100 million cash. Fitch estimates
Patrick's average FCF conversion rate between 2020 and 2023 was
about 46%.
Derivation Summary
Patrick is a leading component supplier to OEMs in the outdoor
enthusiast and housing markets. Compared to Harley-Davidson, Inc.
(BBB+/Stable), Brunswick Corporation (BBB/Stable) and Polaris Inc.
(BBB/Stable), which are OEMs that manufacture motorsport vehicles,
Patrick's revenue has similar demand risks, while margins are more
stable. This comparative margin resiliency is linked to the
company's ability to pass through changes in its costs to its OEM
customers.
Patrick is more acquisitive than the three OEMs, with mid-cycle
leverage running about 1x-2x higher, leading to some incremental
leverage variability, although the company retains favorable
through-the-cycle financial flexibility.
The Azek Company (BB/Positive) and MasterBrand, Inc. (BB+/Stable)
are suppliers of housing-related products. Each has a leading
market position in its product category and is exposed to
cyclicality in housing construction and remodeling. However, this
volatility tends to be lower than in the outdoor enthusiast market.
Both companies' product offerings are more limited than Patrick's.
Azek is considerably smaller than Patrick, with lower leverage but
also lower margins. MasterBrand is larger than Patrick, with higher
leverage and lower margins.
Key Assumptions
Production grows at a moderate pace through 2024 as OEMs
demonstrate operating discipline to support elevated, but declining
dealer inventory levels in certain markets particularly marine and
powersports;
Production rates increase in 2025F and 2026F as retail demand
recovers;
Moderate cost-linked price increases from 2025F onwards;
Gross margin remains stable through 2025F due to elevated material
costs, followed by expansion driven by lower labor costs and
overhead as a % of revenue;
Operating margin expansion driven by tight control of expenses and
automation initiatives, as well as cost synergies from
acquisitions;
Fitch interest rate assumptions: 5.0% in 2024, 4.5% in 2025, 4.0%
in 2026 and 3.5% in 2027;
Capex runs at about 2% of revenue throughout the forecast;
Common dividends issued by company steadily rise through the
forecast;
Opportunistic share buybacks that remain stable throughout the
forecast;
Bolt-on acquisitions in 2025 through 2027 funded by a combination
of incremental debt, equity and cash on hand.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- M&A strategy that continues to diversify product-mix within
existing end-markets and strengthens the through-the-cycle cash
flow profile;
- Adherence to a balanced capital allocation plan preserving
through-the-cycle financial flexibility, including (CFO-Capex) /
Debt sustained over 18%;
- Mid-cycle EBITDA leverage sustained below 2.5x.
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Acquisitions that reduce operational and cost flexibility, and
heighten margin and through-the-cycle FCF variability;
- Material shift in capital allocation plan that reduces
through-the-cycle financial flexibility, including (CFO-Capex) /
Debt sustained below 12%;
- Mid-cycle EBITDA leverage sustained over 3.0x.
Liquidity and Debt Structure
Strong Liquidity: As of June 30, 2024, Patrick has $44 million in
cash and $480 million available under its $775 million revolving
credit facility.
Debt: Patrick's current debt structure consists of $125.6 million
outstanding under its term loan, which matures in 2027, $300
million of 7.50% senior notes due October 2027, $350 million of
4.75% senior notes due May 2029 and $258.8 million of 1.75% senior
convertible notes that mature December 2028.
Issuer Profile
Patrick is a leading component solutions provider for the RV,
marine, powersports and housing markets.
Date of Relevant Committee
October 1, 2024
MACROECONOMIC ASSUMPTIONS AND SECTOR FORECASTS
Fitch's latest quarterly Global Corporates Macro and Sector
Forecasts data file which aggregates key data points used in its
credit analysis. Fitch's macroeconomic forecasts, commodity price
assumptions, default rate forecasts, sector key performance
indicators and sector-level forecasts are among the data items
included.
ESG Considerations
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Recovery
----------- ------ --------
Patrick Industries, Inc. LT IDR BB New Rating
senior unsecured LT BB New Rating RR4
PATRICK INDUSTRIES: Moody's Rates New Senior Unsecured Notes 'B3'
-----------------------------------------------------------------
Moody's Ratings assigned a B3 rating to Patrick Industries, Inc.'s
new senior unsecured notes. The company's B1 corporate family
rating, B1-PD probability of default rating and B3 ratings on the
existing senior unsecured notes remain unchanged. The Speculative
Grade Liquidity Rating (SGL) remains unchanged at SGL-1. The
positive outlook also remains unchanged.
The new senior unsecured notes will be pari passu with all the
other senior unsecured debt. Proceeds from the new notes will be
used to refinance the existing senior unsecured notes due 2027.
Ratings on the existing senior unsecured notes due 2027 will be
withdrawn upon repayment of the debt.
RATINGS RATIONALE
The B1 CFR reflects Patrick's good size and scale in the
recreational vehicle, marine, manufactured housing (MH),
powersports, and industrial markets. The company maintains a
conservative balance sheet and Moody's expect debt-to-EBITDA to
remain at or below 3x over the next 12-18 months. Moody's recognize
the growing diversity of Patrick's end markets and the company's
successful track record of generating healthy free cash flow.
These considerations are tempered by the company's exposure to
highly cyclical end markets that are susceptible to economic
downturns and vulnerable to significant earnings volatility.
Patrick's RV business (around 40% of sales) continues to face a
difficult operating environment with LTM June 2024 sales off almost
40% since the end of 2022. Moody's expect these headwinds to remain
in place over the balance of 2024 and into 2025, in the face of
relatively low wholesale shipments, dealer inventory destocking and
reduced consumer demand. Moody's expect Patrick's marine business
(around 20% of sales) to face similar headwinds with retail buyers
and dealers reluctant to purchase high price point discretionary
marine products in a high interest rate environment. Furthermore,
there continues to be risks to the downside in the economic outlook
and uncertainty around achieving a "soft landing", which could
further weigh on earnings.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
Patrick's rating could be upgraded if the company maintains a
conservative balance sheet with debt-to-EBITDA sustained below 3x.
Moody's expectations of a more stable operating environment in key
RV and marine markets along with strong liquidity and robust cash
generation could also result in an upgrade.
The rating could be downgraded if end-market demand weakens beyond
Moody's current expectations due to macroeconomic headwinds. A more
aggressive financial policy involving large debt-financed
acquisitions could also result in a downgrade. A ratings downgrade
could also be prompted if adjusted debt-to-EBITDA is sustained
above 3.5x and free cash flow-to-debt falls below 10%.
Patrick Industries, Inc., headquartered in Elkhart, Indiana, is a
leading manufacturer and distributor of components parts in the RV,
marine, powersports, manufactured housing and adjacent industrial
markets primarily serving large OEMs. Revenue for the twelve months
ended June 2024 was $3.6 billion.
The principal methodology used in this rating was Manufacturing
published in September 2021.
PERIMETER ORTHOPAEDICS: Unsecured Creditors to Split $9K in Plan
----------------------------------------------------------------
Perimeter Orthopaedics, P.C., and Perimeter Outpatient Surgical
Associates, Inc., submitted an Amended Joint Plan of Liquidation
dated September 3, 2024.
This Plan deals with all property of Debtors and provides for
treatment of all Claims against Debtors and their property.
Class 1 shall consist of the Secured Claim of Truist. Truist filed
a Proof of Claim asserting a total secured claim of $405,445.31. To
secure its claim, Truist asserted a first priority lien upon and
security interest in all of Perimeter Orthopaedic, P.C.'s tangible
and intangible assets (the "Class 1 Collateral"). On May 17, 2024,
the Court entered a Consent Order on Truist Bank's Motion to Compel
Disbursement of Sale Proceeds and the Debtors issued payment in the
amount of $422,358.32, paying Truist's claim in full.
Class 3 shall consist of the Secured Claim of Highland. Highland
has filed a secured proof of claim in the estimated amount of
$70,497.44, with a secured portion in the amount of $20,000.00. To
secure its claim, Highland asserts a second priority lien upon and
security interest in the O-Scan Dedicated MRI System (the "Class 3
Collateral"). Highland shall retain its lien on the Class 3
Collateral and the lien shall be valid and fully enforceable to the
same validity, extent and priority as existed on the Petition Date.
Class 6 shall consist of the Secured Claim of Wells Fargo. Wells
Fargo has filed a Proof of Claim asserting a total claim of
$41,608.47, with a secured portion of $21,000.00. To secure its
claim, Wells Fargo asserts a second priority lien upon and security
interest in certain of Perimeter Orthopaedics, P.C.'s OrthoGold
equipment (the "Class 6 Collateral"). Wells Fargo's remaining
deficiency claim of $20,608.47 will be treated as a Class 8 General
Unsecured Claim. Wells Fargo shall retain its lien on the Class 6
Collateral and the lien shall be valid and fully enforceable to the
same validity, extent and priority as existed on the Petition Date.
Debtors shall surrender the Class 6 Collateral to Wells Fargo
within 30 days of the Effective Date, thereby satisfying the
Secured Class 6 Claim in full.
Class 7 shall consist of General Unsecured Claims including any
potential deficiency claims. If the Plan is confirmed under 11
Section 1191(a) of the Bankruptcy Code, the Debtors shall pay the
General Unsecured Creditors a total of $9,004.16 on the Effective
Date.
If the Plan is confirmed under Section 1191(b) of the Bankruptcy
Code, Class 7 shall be treated the same as if the Plan was
confirmed under Section 1191(a) of the Bankruptcy Code.
Notwithstanding anything else in this document to the contrary, any
claim listed above shall be reduced by any payment received by the
creditor holding such claim from any third party or other obligor
and Debtors' obligations hereunder shall be reduced accordingly.
The Claims of the Class 7 Creditors are Impaired by the Plan.
Upon confirmation, Debtors will be charged with administration of
the Plan. Debtors will be authorized and empowered to take such
actions as are required to effectuate the Plan. Debtors will file
all post-confirmation reports required by the United States
Trustee's office or by the Subchapter V Trustee.
The source of funds for the payments pursuant to the Plan is the
sale of substantially all of the Debtors’ assets.
A full-text copy of the Amended Joint Liquidating Plan dated
September 3, 2024 is available at https://urlcurt.com/u?l=mWZyag
from PacerMonitor.com at no charge.
Attorney for the Debtors:
William A. Rountree, Esq.
Rountree Leitman Klein & Geer, LLC
Century Plaza I
2987 Clairmont Road, Suite 350
Atlanta, GA 30329
Telephone: (404) 584-1238
Facsimile: (404) 704-0246
Email: wrountree@rlkglaw.com
About Perimeter Orthopaedics
Perimeter Orthopaedics, P.C., and Perimeter Outpatient Surgery
Associates, Inc. are a physician practice that specializes in
orthopedics.
The Debtors filed petitions under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. N.D. Ga. Lead Case No. 23-20554) on May
17,2023. At the time of filing, Perimeter Orthopaedics reported as
much as $50,000 in assets and $1 million to $10 million in
liabilities. Perimeter Outpatient reported as much as $50,000 in
assets and $500,001 to $1 million in liabilities.
Judge James R. Sacca oversees the cases.
The Debtors tapped William A. Rountree, Esq., at Rountree Leitman
Klein & Geer, LLC as bankruptcy counsel and Durrett Firm as special
counsel.
PG&E CORP: Court Rules on Objections to PERA & RKS-Related Claims
-----------------------------------------------------------------
Judge Dennis Montali of the United States Bankruptcy Court for the
Northern District of California overruled, in part, and sustained,
in part, PG&E Corporation and Pacific Gas and Electric Company's:
-- Thirty-Third Securities Omnibus Claims Objection to Public
Employees Retirement Association of New Mexico and Securities Act
Plaintiffs' Third Amended Complaint, Including to Certain Claimants
That Adopted the TAC; and
-- Thirty Fourth Securities Claims Omnibus Objection to Claims
Adopting RKS Amendment.
The original TAC was filed by PERA and other plaintiffs before the
bankruptcy filing. According to Judge Montali, the bankruptcy
removed PG&E from the TAC.
PERA and Rolnick Kramer Sadighi LLP assert two different types of
causes of action asserted under two different statutory schemes:
1. The Exchange Act claims. These claims originate under the
Securities Exchange Act of 1934 and are based on
equity interests purchased by Securities Fraud claimants. The
thrust of the Exchange Act claims is that PG&E's false statements
regarding safety practices during the Alleged Relevant Period led
to artificially inflated prices of shares purchased by the Exchange
Act Claimants. Once those false statements and concealed safety
failures came to light in the wake of the various wildfires
eventually found by California's Department of Forestry and Fire
Protection to be caused by PG&E, the prices of those shares sharply
dropped several times and resulted in harm to the claimants.
2. The Securities Act claims, asserted by purchasers of debt
securities purchased during the Notes and Exchange Offerings. These
claims allege that the disclosures related to those Offerings
materially misled investors as to the risk of wildfire, that risk's
impact on PG&E's business, the sufficiency PG&E's actions
undertaken to prevent wildfires, and PG&E's liability with respect
to potential wildfires. Liability under this law does not require
scienter, nor in some cases, reliance. It is also restricted by a
shorter statute of limitations than the Exchange Act.
These claims were either paid or left in place under PG&E's
Confirmed Plan, but as with the Exchange Act claims, the individual
damage amounts remain undetermined.
PG&E's challenge to the Securities Act claims set forth various
separate grounds for sustaining them. As a gating issue, PG&E
insists, as with the Exchange Act claims, that the Section 11
claims are subject to the heightened pleading standards of
Fed.R.Civ.P. 9(b) because the alleged false and misleading
statements sound in fraud.
The court disagrees.
The TAC bases its Section 11 claims on negligence, not fraud, and
asserts that the statements regarding safety practices were false
at the time when made and omitted that any increase in spending on
such practices was dangerously inadequate due to PG&E's long-term
neglect of such practices.
The RKS Amendment includes the same alleged false and misleading
statements and inferences of omissions embedded in the Offering
Documents. Like the TAC, the RKS Amendment emphasizes that the
statements in the Offering Documents were misleading because the
potential risks to investors identified in the Offering Documents
had already materialized.
PG&E argues that statements concerning investment in its wildfire
safety programs were not false and thus not actionable; that
investors knew the risk of wildfires and the Offering Documents
themselves referenced the Butte Fire as an example of wildfire
risk; and that allegations that the Offering Documents were
misleading because they did not disclose that PG&E's safety
practices had already increased the risk of wildfires, are premised
entirely on conclusions not reached until after late 2018 and 2019,
meaning that the TAC fails to allege facts to show the disclosures
were false when made. PG&E also argues that the Offering Documents
incorporate by reference various 10-Q statements filed with the SEC
that do describe real-time findings that PG&E caused certain fires,
and its mounting liabilities due to those fires -- meaning that
there can be no misleading statements when there are documents
available to investors that did reveal the truth.
PG&E argues that certain statements inadequately plead falsity
because the falsity or misleading nature of the statements were
"premised entirely on conclusions reached in December 2018 and
later in 2019."
The Court notes the issue is not that wildfires out of anyone's
control ignited. The allegation is that it was PG&E's practices
that increased the risk of, or was the cause of, such fires. The
Court points out whether the merits of the allegations bear out is
a question for later, but the allegation itself is plausible.
The Court finds the TAC and RKS Amendment plausibly allege that the
Offering Documents contained misleading statements and omissions.
Judge Montali says, "PG&E may have disclosed the trend of climate
change and increasingly dry conditions, but not the trend of
prolonged lack of investment in safety, which the TAC plausibly
alleges was a known practice by PG&E over many years leading up to
the proposed Class Period in the TAC which could have made the
offerings more speculative or risky than initially disclosed."
Therefore, Omnibus Objections regarding falsity in the Offering
Documents under various portions of the Securities Act are
overruled, the Court holds.
PG&E also argues that certain claimants, whom PG&E terms
"after-market purchasers", fail to plead reliance as required of
such purchasers. Because PG&E's challenge as to reliance applies
only to a small subset of RKS Claimants, RKS argues this issue of
reliance should be disposed of on a claimant-by-claimant basis
after discovery has been completed.
The Court agrees with the Securities Act Claimants and RKS. Given
the omnibus nature of the objections process that was proposed by
PG&E and the very few claimants that must prove reliance, "this is
precisely the kind of issue that lends itself to a full claimant by
claimant factual record before disposition."
Accordingly, PG&E's attempt to eliminate certain claimants for
failure to plead reliance fails and the Omnibus Objections based on
failure to plead reliance are overruled. Those claimants who must
prove reliance as to their claims may do so as a part of their
proof at trial or on any dispositive pre-trial motion.
An April 2018 Exchange Offer swapped restricted private notes for
public notes. PG&E argues that because the basis of exchange was
for private notes, and Section 11 liability is not available for
private offerings, claims based on the 2018 Exchange Offering fail
as a matter of law.
The affected claimants argue that simply because a claimant
Plaintiff participated in an exchange of previously purchased
private notes for public notes in an Exchange Offering does not
negate standing to bring a claim relating to misleading statements
in the registration documents for that Exchange Offering.
According to the Court, PG&E's attempt to eliminate claims based on
the 2018 Exchange Offering fails and the Omnibus Objections based
on this theory are overruled.
PG&E also alleges the doctrine of "negative causation" negates any
statutory damages that may be available to the affected claimants
meaning no economic loss can be established.
According to the Court, PG&E's Omnibus Objections based on failure
to sufficiently plead economic loss due are overruled. The Court
says the doctrine of negative causation limits statutory damages if
the defendant proves the depreciation of the security in question
arose from something other than the alleged misstatement or
omission. It is thus not appropriate to evaluate an affirmative
defense regarding loss causation at the pleading stage, and the
Court will not do so until the appropriate stage of litigation.
PG&E argues that while at the time of filing, there was a temporary
dip in securities values, the notes at issue have since either been
paid in full or were reinstated, meaning that the value of the
notes has not changed and there are no statutory damages to be
had.
The affected claimants argue damages are a remedy, not an element
of the cause of action, and that the question of damages is so
fact-intensive that it is not an appropriate question at the
pleading stage. The court agrees.
A copy of the Court's decision is available at
https://urlcurt.com/u?l=He8Rn2
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.
PINEWOOD CONDOMINIUM: Seeks Chapter 11 Bankruptcy Protection
------------------------------------------------------------
Pinewood Condominiums LP filed Chapter 11 protection in the
Northern District of California. According to court filing, the
Debtor reports between $1 million and $10 million in debt owed to 1
and 49 creditors. the petition states funds will be available to
unsecured creditors.
A meeting of creditors under 11 U.S.C. Section 341(a) is slated for
October 28, 2024 at 10:00 a.m. via UST Teleconference, Call in
number/URL: 1-888-455-8838 Passcode: 2551027.
About Pinewood Condominiums LP
Pinewood Condominiums LP is engaged in activities related to real
estate.
Pinewood Condominiums LP sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Cal. Case No. 24-10598) on October 2,
2024. In the petition filed by Timothy LeFever, as chief executive
officer, the Debtor estimated assets and liabilities between $1
million and $10 million each.
The Honorable Bankruptcy Judge Charles Novack handles the case.
The Debtor is represented by:
Thomas B. Rupp, Esq.
KELLER BENVENUTTI KIM LLP
425 Market Street, 26th Floor
San Francisco CA 94105
Tel: (415) 496-6723
Email: trupp@kbkllp.com
PINK BASKET: Continued Operations to Fund Plan Payments
-------------------------------------------------------
Pink Basket, LLC, filed with the U.S. Bankruptcy Court for the
Southern District of Texas a Disclosure Statement with respect to
Plan of Reorganization dated September 4, 2024.
Pink Basket, LLC is a clothing marketer, wholesaler, and retailer.
It contracts an affiliated entity, Little Threads, LLC to
manufacture the clothing. The clothing is made in Houston, Texas.
Pink Basket, LLC has two members. Amrita Singh manages the day
today operations and is a designer for Pink Basket, LLC. Mr. Singh
has a bachelor's degree in commerce and a master in design. The
owners of Haute Baby expressed an interest in retiring and selling
the assets. Mrs. Singh and Mr. Singh agreed to purchase the assets,
which consisted of equipment, inventory, material, supplies, and
some accounts receivables and other intangible assets.
On April 23, 2024, Pink Basket filed its voluntary Chapter 11
petition in the United States Bankruptcy Court for the Southern
District of Texas, Houston Division in order to rehabilitate and or
restructure its debt with First Horizon Bank, its first and only
lienholder, and arrange a plan to repay its allowed, general
unsecured creditors and any disputed, contingent and or
unliquidated claims which are subsequently determined to be valid
and allowable via Court Order (State Court or Bankruptcy Court) or
as agreed by the parties subject to Bankruptcy Court approval.
During the pendency of this case, Pink Basket learned that the
collateral which is the subject of First Horizon Bank's lien is not
worth as much as it originally believed. Mrs. Singh reviewed
listings of similar equipment as the Collateral, and considered the
fair market value opinion of an appraiser who opined that the
equipment, inventory, and supplies are worth between $10,000 and
$15,000 on "good day". Based on her review and in consideration of
the appraiser's opinion, Mrs. Singh believes the equipment is worth
$10,000.
Class 4 consists of all non-priority unsecured claims allowed under
Section 502 of the Code. These holders will receive between 1 to 3%
depending on the recovery of preference claims and the net
available proceeds from those claims.
On the Effective Date, the Reorganized Debtor will execute all
other documents necessary to the implementation of the Plan and the
Order of Confirmation. All property of the estate shall be
transferred to the Reorganized Debtor.
The source of the funds for the distribution will be from its
operations.
A full-text copy of the Disclosure Statement dated September 4,
2024 is available at https://urlcurt.com/u?l=sIJw8E from
PacerMonitor.com at no charge.
Counsel to the Debtor:
Anabel King, Esq.
WAUSON KING
52 Sugar Creek Center Blvd., Suite 325
Sugar Land, TX 77478
Tel: (281) 242-0303
Fax: (281) 242-0306
Email address: aking@w-klaw.com
About Pink Basket
Pink Basket, LLC, is a children apparel wholesaler and retail
distributor.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Tex. Case No. 24-31803) on April 23,
2024. In the petition signed by Amit Singh, as member, the Debtor
disclosed up to $500,000 in assets and up to $10 million in
liabilities.
Judge Jeffrey P. Norman oversees the case.
Anabel King, Esq., at WAUSON|KING, is the Debtor's legal counsel.
POINTCLICKCARE CORP: Moody's Lowers CFR to B3, Outlook Stable
-------------------------------------------------------------
Moody's Ratings downgraded PointClickCare Corp.'s (PCC) corporate
family rating to B3 from B2 and probability of default rating to
B3-PD from B2-PD. Moody's also assigned B3 ratings to
PointClickCare Technologies Inc.'s $200MM backed senior secured
first lien revolving credit facility due 2029 and the proposed
$1,625MM backed senior secured first lien term loan B due 2031. The
existing senior secured first lien bank credit facilities have been
reviewed in the rating committee and remain unchanged. The outlooks
for both entities are stable.
As part of a debt funded dividend recapitalization transaction, the
company has launched a $1,625 million Term Loan B due October 2031.
The proceeds from the debt issuance as well as a portion of cash
will be used to fund a $850 million dividend to PCC's owners and
other shareholders, pay transaction-related fees, and repay the
existing term loan. The B2 ratings to the existing term loan and
the revolving credit facility remain unchanged because Moody's
expect a full repayment with transaction proceeds and will withdraw
ratings once this occurs.
The envisaged deal will weaken the company's pro forma adjusted
debt to EBITDA to about 8.2x (YE 2024) from about 4.5x (in July
2024), and will remain elevated (around 7.3x based on Moody's
adjustments which excludes stock-base-compensation) over the next
12-18 months following the debt funded dividend.
The stable outlook reflects Moody's expectation that the company
will continue to demonstrate good operating performance, but
leverage will remain very high, sustained around 7.3x by the end of
2025.
RATINGS RATIONALE
PCC's rating is supported by: 1) favorable nursing and care home
demographics that support revenue and EBITDA growth; 2) a
subscription-based fee model (over 90% of revenues) that add
stability to PCC's revenue; 3) an asset light business model
supporting its ability to generate free cash flow; and 4) solid
revenue and margin growth potential from increased volumes, price
uplifts, and efficiency improvements from ongoing acquisition
integration.
The company's rating is constrained by: 1) high debt-to-EBITDA that
will remain above 7x and interest coverage (defined as (EBITDA –
Capex) / Interest expense) around 1.5x through 2025; 2) aggressive
financial policies highlighted by PCC's willingness to engage in
materially leveraging transactions; and 3) its small size and
narrow focus on the niche end market of software for skilled
nursing facilities and long-term care homes.
Governance considerations include an elevated financial leverage
and higher interest costs that will weigh on free cash flow as well
as a shift to a more aggressive financial policy, including
material debt-funded transactions that elevate financial leverage
periodically. Governance will be supported by the company's strong
organic growth with a long track record in healthcare software.
PCC has good liquidity, with sources of cash around $290 million
over the next four quarters compared to uses of around $16 million.
PCC's sources of liquidity are $93 million of cash as of July 31,
2024, full availability under the company's $200 million revolving
credit facility (expiring 2029). Uses of cash are comprised of
around $16 million of mandatory amortization payments on the
company's first lien term loan debt. The revolver has a springing
net first lien leverage ratio of 6.25x which springs when the
revolver is 35% drawn. Moody's expect PCC would be in compliance
with the covenant if tested. PCC has limited flexibility to
generate liquidity from asset sales, with a fully secured capital
structure and asset mix that is not easy to carve-out for sale
given the nature of its business.
The senior secured first lien revolving credit facility expiring in
2029 and senior secured first lien term loan B due in 2031 are
rated B3, in line with PCC's CFR, because they are the only debt in
the capital structure. The revolver and term loans are pari-passu
and are secured by a first-lien pledge on substantially all the
assets of PCC and its domestic subsidiaries.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if there a consistent growth track
record, debt-to-EBITDA is sustained below 6.5x (over 7.0x expected
through 2025) and interest coverage is sustained above 2.0x, free
cash flow (FCF)-to-debt is sustained above 5%, and if the company
is expected to maintain a more conservative financial strategy.
The ratings could be downgraded if organic revenue or EBITDA
declines or if the company's liquidity profile deteriorates due to
sustained negative free cash flow.
Headquartered in Mississauga, Ontario, PointClickCare Corp.
provides Software as a service (SaaS) platforms that integrate
electronic health records within the critical business functions of
skilled nursing facilities in the US and Canada. The company is
privately owned by a group controlled by the company's initial
founders.
The principal methodology used in these ratings was Software
published in June 2022.
PUERTO RICO: Judge Extends PREPA's Litigation Stay in Bankruptcy
----------------------------------------------------------------
Michelle Kaske of Bloomberg News reports that the judge overseeing
the bankruptcy of Puerto Rico's electric utility, PREPA extended
the halt on litigation connected to the case as the government-run
power company negotiates with bondholders over how to cut its
debts.
US District Court Judge Laura Taylor Swain kept the stay in place
through November 13, 2024 and again directed the parties, including
principal members, to participate in restructuring negotiations,
according to a court filing Monday, October 7, 2024. This is the
second time that Swain has granted the mediation team's request to
postpone lifting the stay.
About Puerto Rico
Puerto Rico is a self-governing commonwealth in association with
the United States. The chief of state is the President of the
United States of America. The head of government is an elected
Governor. There are two legislative chambers: the House of
Representatives, 51 seats, and the Senate, 27 seats.
In 2016, the U.S. Congress passed PROMESA, which, among other
things, created the Financial Oversight and Management Board and
imposed an automatic stay on creditor lawsuits against the
government, which expired May 1, 2017.
The members of the oversight board are: (i) Andrew G. Biggs, (ii)
Jose B. Carrion III, (iii) Carlos M. Garcia, (iv) Arthur J.
Gonzalez, (v) Jose R. Gonzalez, (vi) Ana. J. Matosantos, and (vii)
David A. Skeel Jr.
On May 3, 2017, the Commonwealth of Puerto Rico filed a petition
for relief under Title III of the Puerto Rico Oversight,
Management, and Economic Stability Act ("PROMESA"). The case is
pending in the United States District Court for the District of
Puerto Rico under case number 17-cv-01578. A copy of Puerto Rico's
PROMESA petition is available at
http://bankrupt.com/misc/17-01578-00001.pdf
On May 5, 2017, the Puerto Rico Sales Tax Financing Corporation
(COFINA) commenced a case under Title III of PROMESA (D.P.R. Case
No. 17-01599). Joint administration has been sought for the Title
III cases.
On May 21, 2017, two more agencies -- Employees Retirement System
of the Government of the Commonwealth of Puerto Rico and Puerto
Rico Highways and Transportation Authority (Case Nos. 17-01685 and
17-01686) -- commenced Title III cases.
U.S. Chief Justice John Roberts named U.S. District Judge Laura
Taylor Swain to preside over the Title III cases.
The Oversight Board has hired as advisors, Proskauer Rose LLP and
O'Neill & Borges LLC as legal counsel, McKinsey & Co. as strategic
consultant, Citigroup Global Markets as municipal investment
banker, and Ernst & Young, as financial advisor.
Martin J. Bienenstock, Esq., Scott K. Rutsky, Esq., and Philip M.
Abelson, Esq., of Proskauer Rose LLP; and Hermann D. Bauer, Esq.,
at O'Neill & Borges LLC are onboard as attorneys.
Prime Clerk LLC is the claims and noticing agent. Prime Clerk
maintains the case Website https://cases.primeclerk.com/puertorico
Jones Day is serving as counsel to certain ERS bondholders.
Paul Weiss is counsel to the Ad Hoc Group of Puerto Rico General
Obligation Bondholders.
RANCHO FRESCO: Starts Subchapter V Bankruptcy Process
-----------------------------------------------------
Rancho Fresco Modesto Inc. filed Chapter 11 protection in the
Eastern District of California. 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.
About Rancho Fresco Modesto Inc.
Rancho Fresco Modesto Inc. is a Mexican restaurant.
Rancho Fresco Modesto Inc. sought relief under Subchapter V of
Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D. Cal. Case No.
24-90580) on October 2, 2024. In the petition filed by Ismael
Covarrubias, Jr., 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 Ronald H. Sargis oversees the case.
The Debtor is represented by:
David J. Johnston, Esq.
DAVID J. JOHNSTON
1600 G Street, Suite 102
Modesto, CA 95354
Tel: (209) 579-1150
E-mail: david@johnstonbusinesslaw.com
RAZEL & RUZTIN: PCO Raises Patient Care Concerns in Latest Report
-----------------------------------------------------------------
Blanca Castro, the patient care ombudsman, filed with the U.S.
Bankruptcy Court for the Northern District of California a report
regarding the quality of patient care provided at Razel & Ruztin
LLC's assisted care living facility. The report covers the period
from July 30 to September 10.
The local Long-Term Care Ombudsman (LTCO) representative visited
the Walnut Creek Willows facility on September 5. This facility is
licensed for 72 residents and had a census of 50 residents at the
time of the last visit (30 in assisted living and 20 in Memory
Care).
The Ombudsman cited that cleaning staff using the residents'
washcloths for janitorial purposes is unacceptable and is a
concern, not just because the lack of adequate supplies of clean
linens can limit resident's ability to maintain proper personal
hygiene, but this is also an infection control concern if
washcloths and towels are not being used exclusively for the
purpose of resident hygiene.
During the visit, the local Long-Term Care Ombudsman (LTCO) was
told by residents that the food quality has improved over the last
two weeks. However, the LTCO observed inconsistencies in the meal
served during the visit and the posted menu. Residents also noted
the facility does not provide cream for coffee nor spices such as
sugar, salt and pepper with meals but only a low-calorie sugar
substitute.
The Ombudsman stated that residents reported inadequate staff,
particularly during the PM shift, and it is impacting the ability
for residents to receive timely responses to their call buttons.
Residents reported sometimes waiting more than 20 minutes for a
staff member to respond to them.
The LTCO noted that resident care information is posted on the
walls of rooms representing a violation of residents' right to
privacy. Care information is private and should not be observable
by non-staff, other residents or visitors.
The LTCO observed that the main lobby appeared clean and organized,
however, at the end of the South wing, there were multiple chairs
surrounding a resident's room, representing a potential safety
hazard to residents.
A copy of the ombudsman report is available for free at
https://urlcurt.com/u?l=Yr1DZe from PacerMonitor.com.
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, filed
its voluntary petition for relief under Chapter 11 of the
Bankruptcy Code (Bankr. N.D. Calif. Case No. 24-41003) on July 9,
2024, listing 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. serves as the
Debtor's bankruptcy counsel.
Blanca Castro is the patient care ombudsman appointed in the
Debtor's cases.
REGO PAYMENT: Engages Stephano Slack as New Auditor
---------------------------------------------------
REGO Payment Architectures, Inc. disclosed in a Form 8-K Report
filed with the U.S. Securities and Exchange Commission that on
September 30, 2024, Morison Cogen LLP resigned from its role as
independent registered public accounting firm for the Company in
conjunction with its exit from providing audit services to publicly
traded companies.
Morison Cogen's reports on the Company's consolidated financial
statements as of and for the fiscal years ended December 31, 2023
and December 31, 2022 did not contain an adverse opinion or
disclaimer of opinion and were not qualified or modified as to
uncertainty, audit scope or accounting principles, except that
Morison Cogen's Independent Auditor's Reports dated April 1, 2024
and March 31, 2023 expressed substantial doubt about the Company's
ability to continue as a going concern due to the Company's losses
from development activities.
During the fiscal years ended December 31, 2023 and December 31,
2022 and the subsequent interim period through September 30, 2024,
(i) there were no disagreements within the meaning of Item
304(a)(1)(iv) of Regulation S-K, between the Company and Morison
Cogen on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure, any
of which that, if not resolved to Morison Cogen's satisfaction,
would have caused Morison Cogen to make reference to the subject
matter of any such disagreement in connection with its reports for
such years and interim period, and (ii) there were no reportable
events within the meaning of Item 304(a)(1)(v) of Regulation S-K.
On October 1, 2024, the Company engaged Stephano Slack LLC as the
Company's new independent registered public accounting firm for the
fiscal year ending December 31, 2024 (after receiving approval of
the Company's Board of Directors).
During the Company's fiscal years ended December 31, 2023 and
December 31, 2022 and the subsequent interim period through
September 30, 2024, neither the Company nor anyone on its behalf
has consulted with Stephano Slack LLC regarding (i) the application
of accounting principles to a specified transaction, either
completed or proposed, or the type of audit opinion that might be
rendered on the Company's financial statements, and neither a
written report nor oral advice was provided to the Company that
Stephano Slack LLC concluded was an important factor considered by
the Company in reaching a decision as to any accounting, auditing,
or financial reporting issue, (ii) any matter that was the subject
of a disagreement within the meaning of Item 304(a)(1)(iv) of
Regulation S-K, or (iii) any reportable event within the meaning of
Item 304(a)(1)(v) of Regulation S-K.
About REGO Payment
REGO Payment Architectures, Inc. and its subsidiaries provide
consumer software through its mobile payment platform, Mazoola—a
family-focused mobile banking solution. Headquartered in Blue Bell,
Pennsylvania, the Company holds a portfolio of trade secrets and
four U.S. patents. REGO offers an all-digital financial payments
platform designed for minors, particularly those under 13 years
old, to purchase goods and services, complete chores, and learn in
a secure online environment, with parental permission, oversight,
and control, while ensuring compliance with the Children's Online
Privacy Protection Act and General Data Protection Regulation.
Going Concern
The Company cautioned in a Form 10-Q Report for the quarterly
period ended March 31, 2024, that substantial doubt exists about
its ability to continue as a going concern. According to the
Company, for the three months ended March 31, 2024, and 2023, it
had a net loss of $2,291,463 and $5,408,901, respectively, and has
not generated significant revenue since its inception.
Since its inception, the Company has concentrated on developing and
executing its business plan. The Company believes that its current
cash resources will be inadequate to sustain operations over the
next 12 months. To continue operations, the Company needs to
generate revenue. If revenue generation proves insufficient, the
Company will need to either reduce expenses or secure financing
through the sale of debt and/or equity securities. Issuing
additional equity could lead to dilution for existing shareholders.
If the Company cannot secure additional funds as needed or on
acceptable terms, it would struggle to implement its business plan
and cover costs, potentially leading to a significant adverse
impact on its business, financial condition, and operational
results.
ROVER PROPERTIES: Voluntary Chapter 11 Case Summary
---------------------------------------------------
Debtor: Rover Properties, LLC
201 Hanover Pike
Hampstead MD 21074
Business Description: The Debtor owns a gas station, a convenience
store, and three apartments located at 201
Hanover Pike, Hampstead, MD 21074 valued at
$1.5 million.
Chapter 11 Petition Date: October 9, 2024
Court: United States Bankruptcy Court
District of Maryland
Case No.: 24-18524
Judge: Hon. Michelle M Harner
Debtor's Counsel: William Sherwood, Esq.
FNS LAW GROUP
237 E Main Street
Westminster MD 21157
Tel: 667-755-1000
E-mail: info@wsherwoodlaw.com
Total Assets: $1,593,000
Total Liabilities: $968,000
The petition was signed by Nikunj M. Patel as owner.
The Debtor filed an empty 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/IKLXIIA/Rover_Properties_LLC__mdbke-24-18524__0001.0.pdf?mcid=tGE4TAMA
SCILEX HOLDING: Provides Prelim. Results for Quarter Ended Sept. 30
-------------------------------------------------------------------
Scilex Holding Company provided certain preliminary unaudited
financial results for the quarter ended Sept. 30, 2024.
The Company estimates that:
* ZTlido net sales for the quarter ended Sept. 30, 2024 were in
the range of $11.0 million to $13.0 million, compared to $10.1
million for the same period last year, representing growth in the
range of approximately 9% to 29%.
* Total product net sales for the quarter ended Sept. 30, 2024
were in the range of $12.0 million to $14.0 million, compared to
$10.1 million for the same period last year, representing growth in
the range of approximately 19% to 39%.
This preliminary financial data has been prepared by and is the
responsibility of Scilex. Scilex has not fully completed its
review of these preliminary financial results for the quarter ended
Sept. 30, 2024. Scilex's independent auditor has not reviewed or
audited these preliminary estimated financial results. Scilex's
actual results may differ materially from these preliminary
financial results and may be outside the estimated ranges.
About Scilex Holding
Headquartered in Palo Alto, Calif., Scilex Holding Company is
focused on acquiring, developing and commercializing non-opioid
pain management products for the treatment of acute and chronic
pain. Scilex targets indications with high unmet needs and large
opportunities with non-opioid therapies for the treatment of
patients with acute and chronic pain and are dedicated to advancing
and improving patient outcomes. Scilex's commercial products
include: (i) ZTlido (lidocaine topical system) 1.8%, a prescription
lidocaine topical product approved by the U.S. Food and Drug
Administration for the relief of neuropathic pain associated with
postherpetic neuralgia, which is a form of post-shingles nerve
pain; (ii) ELYXYB, a potential first-line treatment and the only
FDA-approved, ready-to-use oral solution for the acute treatment of
migraine, with or without aura, in adults; and (iii) Gloperba, the
first and only liquid oral version of the anti-gout medicine
colchicine indicated for the prophylaxis of painful gout flares in
adults, expected to launch in the first half of 2024.
San Diego, California-based Ernst & Young LLP, the Company's
auditor since 2020, issued a "going concern" qualification in its
report dated March 11, 2024, citing that the Company has negative
working capital, has suffered losses from operations, has recurring
negative cash flows from operations, and has stated that
substantial doubt exists about the Company's ability to continue as
a going concern.
SCOTLAND MEADOWS: Hits Chapter 11 Bankruptcy Protection
-------------------------------------------------------
Scotland Meadows LLC filed Chapter 11 protection in the District of
Massachusetts. According to court filing, the Debtor reports
between $1 million and $10 million in debt owed to 1 and 49
creditors. The petition states funds will be available to unsecured
creditors.
A meeting of creditors under 11 U.S.C. Section 341(a) is slated for
November 4, 2024 at 3:00 p.m. in Room Telephonically.
About Scotland Meadows LLC
Scotland Meadows LLC is a Single Asset Real Estate debtor (as
defined in 11 U.S.C. Section 101(51B)).
Scotland Meadows LLC sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Mass. Case No. 24-11997) on October 1,
2024. In the petition filed by Kemith K. Luster, as manager, the
Debtor reports estimated assets and liabilities between $1 million
and $10 million each.
The Debtor is represented by:
Kenneth E. Lindauer, Esq.
LAW OFFICES OF KENNETH E. LINDAUER
14 Lynde Street
Salem MA 01970
Tel: (978) 744-5861
E-mail: ken@lindauer.com
SEC TRANSPORTATION: Wins Court Nod to Use Cash Collateral
---------------------------------------------------------
SEC Transportation, Inc. got the green light from the U.S.
Bankruptcy Court for the Western District of Tennessee to use the
cash collateral of Centennial Bank.
Centennial Bank, a secured creditor, holds a first priority
security interest in trucking proceeds, which constitute the bank's
cash collateral.
"SEC's finances will be disrupted and the chances for a successful
rehabilitation reduced if they are unable to use the proceeds in
the ordinary course of business," Thomas Strawn, Esq., the
company's attorney, said.
About SEC Transportation
SEC Transportation, Inc. filed Chapter 11 bankruptcy petition
(Bankr. W.D. Tenn. Case No. 24-10820) on July 2, 2024, with as much
as $1 million in both assets and liabilities.
Judge Jimmy L. Croom oversees the case.
The Debtor is represented by Strawn Law Firm.
SI GROUP: Represent by Latham & Watkins in Recapitalization
-----------------------------------------------------------
SI Group, a leading global developer and manufacturer of
performance additives, process solutions, pharmaceuticals and
chemical intermediates, closed a private exchange transaction
supported by a significant majority of its existing creditors on
September 18, 2024, and concurrently announced a public exchange
offer to its remaining creditors to participate in a follow-on
transaction on the same terms. SI Group has announced the initial
results of the transaction as of the initial settlement date,
September 30, 2024, with support from approximately 100% of 1L
Lenders and 89% of Unsecured Notes. This broad transaction
participation underscores creditors' confidence in the company and
its long-term outlook. The Transaction extends debt maturities to
2028, increases liquidity via full access to a new $218 million
revolving credit facility and results in an overall reduction in
the company's annual cash interest expense. In connection with the
transaction, SK Capital Partners, the Company's financial sponsor,
and Affiliates provided a total new money investment of US$150
million to further bolster liquidity and repay debt. The
transaction materially improves SI Group's go-forward liquidity
profile and better positions the company to capitalize on a future
broader industry recovery. The successful restructuring of SI
Group's capital structure, with strong support from SK Capital and
lenders, will allow SI Group to focus on continuing to implement
key improvement initiatives, serving customers, and furthering its
long-term goal of becoming the global performance additives
powerhouse.
Latham & Watkins LLP represents SI Group in the transaction with a
multidisciplinary team led by Washington, D.C. partners Nick
Luongo, Jason Licht, Jeffrey Chenard and Katherine Putnam, with New
York partner David Hammerman. Advice was provided on corporate
matters by Washington, D.C. partner Chris Clark and counsel Chris
Cronin, with associates Lucas Balchun, Gabrielle Blum, Lis Ryan,
Zach Lippman, and Brad Guest; on finance matters by associates
Melissa Doura, Matt Bargamin, Katie Prezioso, and Jake Goodman; on
restructuring matters by Washington, D.C. partner Andrew Sorkin,
with associate Jonathan Weichselbaum; on structured finance matters
by New York partners Loren Finegold, with associate Maeve Chandler;
on tax matters by Washington, D.C. partners Andrea Ramezan-Jackson
and Matthew Conway, with associate Aaron Bernstein; on UCC matters
by New York partner Brian Rock; and on Real Estate matters by New
York partner Dara Denberg.
SNEAD AND SONS: Unsecureds to Get 10 Cents on Dollar in Plan
------------------------------------------------------------
Snead and Sons Trucking LLC filed with the U.S. Bankruptcy Court
for the Eastern District of Virginia a Plan of Reorganization for
Small Business dated September 3, 2024.
The Debtor is a Virginia limited liability company formed on June
23, 2008. Larry E. Snead, Jr. ("Mr. Snead") is the sole member and
manager of the Debtor. The Debtor is a trucking and transportation
company that hauls freight for various customers.
In or about September 2023, the Debtor lost its main customer that
provided approximately 80% of the Debtor's revenue. The loss was
due to bidding too high on the request for contract proposal. The
contract comes up again in September 2024 for bid and the Debtor is
confident that it will be the successful bidder this time. After
the loss of its main customer, the Debtor was able to continue
business with other customers and continues to operate, albeit with
reduced revenue.
As a result of the loss of income, the Debtor became delinquent on
its payments to creditors. Several judgments were entered against
the Debtor and, at the time of the filing of the Chapter 11
petition, the Debtor's bank account was being garnished. The Debtor
believes that it can successfully reorganize its current business
under a Chapter 11 Plan.
The Plan Proponent's financial projections show that the Debtor
will have projected disposable income of $137,925.00. In addition,
the Debtor's sole member, Larry E. Snead, Jr. ("Mr. Snead"), will
be making additional capital contributions to the Debtor from his
personal assets as may be necessary to fund this Plan. The final
Plan payment is expected to be paid on September 30, 2029.
Non-priority unsecured creditors holding allowed claims will
receive distributions, which the proponent of this Plan has valued
at approximately 10 cents on the dollar. This Plan also provides
for the payment of administrative and priority claims.
Class 3 consists of Non-priority unsecured creditors. Class 3 is
impaired by this Plan. Allowed non-priority unsecured claims shall
be paid pro-rata from any distribution remaining after disbursement
to allowed secured and priority claims. Estimated distribution is
approximately 10%. This Class is impaired.
Class 4 consists of Equity security holders of the Debtor. Class 4
is impaired by this Plan. The Holder of the Reorganized Debtor's
Equity Interests is Mr. Snead.
Payments under the Plan will be paid from the Debtor's Disposable
Income for 3 years from the Initial Distribution. On the Effective
Date, all Estate property shall revest in the Reorganized Debtor,
free and clear of all other liens, claims, interests, and
encumbrances.
A full-text copy of the Plan of Reorganization dated September 3,
2024 is available at https://urlcurt.com/u?l=idlEgn from
PacerMonitor.com at no charge.
Attorney for the Debtor:
James E. Kane, Esq.
Kane & Papa
P. O. Box 508
Richmond, VA 23218-0508
Tel: (804) 225-9500
About Snead and Sons Trucking
Snead and Sons Trucking, LLC, is a trucking and transportation
company that hauls freight for various customers.
The Debtor sought protection under Chapter 11 of June 5, 2024, with
$100,001 to $500,000 in both assets and liabilities.
James E. Kane, Esq., at Kane & Papa, PC, is the Debtor's legal
counsel.
SOLUNA HOLDINGS: Achieves Milestones to Unlock $25M Capital Line
----------------------------------------------------------------
Soluna Holdings, Inc. announced on October 3, 2024, its agreement
with its convertible noteholders and amendments of its agreements
with the holder of its Series B Preferred Stock, important
milestones toward access to the previously announced $25 million
Standby Equity Purchase Agreement with a fund managed by Yorkville
Advisors Global L.P.
Soluna entered into the following agreements with the convertible
noteholders and the holder of Series B stock, satisfying a number
of the conditions precedent to access the SEPA. They include:
* Convertible Noteholders Agreement: Noteholders will consent
to the SEPA, prepayment of the remaining convertible notes and
waive rights to participate in the SEPA. In return, the Company
will pay a $750,000 waiver fee, prepay a 20% note prepayment
premium, and acquire certain Soluna Cloud notes at a discount.
* Series B Preferred Stock Agreement: The holder of Series B
will consent to the SEPA, waive participation rights, and agree to
warrant and stock conversion limitations. In return, the Company
will reprice the current conversion price, reprice existing
warrants and issue new warrants to the holder.
In order to access the SEPA, the Company will file an S-1
registration statement with the Securities and Exchange Commission
which must be declared effective before it can begin to obtain
funding. This is the only remaining significant step since, as
previously announced, Yorkville and Soluna mutually agreed not to
proceed with the prepaid advances, and to continue to work only
within the SEPA.
Key Uses of the Financing Include:
* Retiring existing Convertible Notes reducing leverage and
dilution overhang.
* Funding critical Soluna Cloud AI operations and data center
development activities.
* Deploying additional capital into projects to significantly
improve equity cash flows.
* Strengthening the Company's balance sheet.
Operationally this means Soluna expects to:
* Advance its Helix AI data center designs.
* Prepare for the build-out of Project Grace – a 2 MW AI
data center adjacent to its flagship Project Dorothy 2.
* Accelerate the development of the 166 MW Project Kati and
187 MW Project Rosa.
* Complete the acquisition of new sites for up to 20 MW of
additional AI data centers for its Colocation business.
A full-text copy of the Company's report filed on Form 8-K with the
Securities and Exchange Commission is available at:
https://tinyurl.com/yw9r7hzm
About Soluna Holdings
Headquartered in Albany, New York, Soluna Holdings designs,
develops, and operates digital infrastructure that transforms
surplus renewable energy into global computing resources. The
Company's modular data centers can be co-located with wind, solar,
or hydroelectric power plants and support compute-intensive
applications, including Bitcoin mining, generative AI, and
scientific computing. This approach aids in energizing a greener
grid while providing cost-effective and sustainable computing
solutions.
As of June 30, 2024, Soluna Holdings reported $98.68 million in
total assets, $48.74 million in total liabilities, and $49.93
million in total equity.
Going Concern
The Company was in a net loss, has negative working capital, and
has significant outstanding debt as of March 31, 2024. These
factors, among others, indicate that there is substantial doubt
about the Company's ability to continue as a going concern within
one year after the issuance of the Company's condensed financial
statements, according to the Company's Quarterly Report for the
period ended March 31, 2024.
STATEHOUSE HOLDINGS: Files for Bankruptcy, Faces Receivership
-------------------------------------------------------------
StateHouse Holdings Inc., a California-focused, vertically
integrated cannabis company, announced on Oct. 10 that StateHouse
has made an assignment into bankruptcy pursuant to Canada's
Bankruptcy and Insolvency Act.
On September 25, 2024, Pelorus Fund REIT, LLC filed a complaint in
the San Diego Superior Court seeking, among other remedies, that
StateHouse and its various subsidiaries be placed into
receivership. Additionally, Pelorus Fund REIT, LLC, Pelorus Fund
LOC, LLC and holders of a majority in principal amount of the
Company's 9.0% secured notes due April 2025, provided notices to
the Company that the Company is in default of its payment
obligations pursuant to certain loans advanced by the Lenders to
StateHouse and various subsidiaries of the Company.
In connection with the Receivership Proceedings, the Company and
the Lenders entered into a stipulation dated October 9, 2024, for
the appointment of a receiver to preserve the ongoing operations of
the business in California. Further updates regarding the
Receivership Proceedings in the United States and the operations of
the business in California will be provided in due course.
The difficult decision to commence the Bankruptcy Proceedings for
the Canadian parent entity, StateHouse, was made following receipt
of notice from the Lenders after careful consideration of the
current financial condition of the Company and its subsidiaries,
the Company's inability to pay their liabilities as they become
due, the Receivership Proceedings in the U.S. initiated by Pelorus
Fund REIT, LLC and the months long negotiations between the
Company, the Lenders and various other secured creditors of the
Company.
Trading on the Canadian Securities Exchange has been halted and the
Company anticipates that trading on the CSE will be suspended and
that StateHouse will ultimately be delisted once the bankruptcy is
initiated.
About StateHouse Holdings Inc.
StateHouse, a vertically integrated enterprise with cannabis
licenses covering retail, major brands, distribution, cultivation,
nursery, and manufacturing, is one of the oldest and most respected
cannabis companies in California. Founded in 2006, its predecessor
company Harborside was awarded one of the first six medical
cannabis licenses granted in the United States. Today, the Company
operates 11 dispensaries covering Northern and Southern California,
an integrated cultivation facility in Salinas and manufacturing in
Greenfield, California. StateHouse is a leading brand house in
California by market share, with a diversified product across
multiple brands, form factors, and price points. StateHouse sells
its six popular house brands to over 700 retailers across
California including Kingpen, Dime Bag, Loudpack, Fuzzies, Sublime,
Urbn Leaf and Smokiez line of products. StateHouse is a publicly
listed company, currently trading on the Canadian Securities
Exchange under the ticker symbol "STHZ" and the OTCQB under the
ticker symbol "STHZF". The Company continues to play an
instrumental role in making cannabis safe and accessible to a broad
and diverse community of California and Oregon consumers.
STEWARD HEALTH: Aggrieved Patients Want Committee in Chapter 11
---------------------------------------------------------------
Alex Wolf of Bloomberg Law reports that hospital patients with
medical malpractice claims against Steward Health Care System LLC
are seeking an official committee in the company's bankruptcy case
to fight for monetary recoveries.
The not-for-profit health system is working to negotiate a Chapter
11 creditor repayment plan, but that process shouldn't advance
further without the US Bankruptcy Court for the Southern District
of Texas appointing a committee to represent patients likely owed
hundreds of millions of dollars in malpractice liabilities, a group
of personal injury attorneys said in a filing Monday, October 7,
2024.
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. Judge
Christopher M. Lopez oversees the proceeding.
The Debtors tapped Weil, Gotshal & Manges, LLP as bankruptcy
counsel; McDermott Will & Emery as special corporate and regulatory
counsel; AlixPartners, LLP as financial advisor and John Castellano
of AlixPartners as chief restructuring officer. Lazard Freres &
Co. LLC, Leerink Partners LLC, and Cain Brothers, a division of
KeyBanc Capital Markets Inc., provide investment banking services
to the Debtors. Kroll is the claims agent.
Susan N. Goodman has been appointed as patient care ombudsman in
the Debtors' Chapter 11 cases.
STEWARD HEALTH: Appointment of Tort Claimants' Committee Sought
---------------------------------------------------------------
An ad hoc committee of personal injury claimants asked the U.S.
Bankruptcy Court for the Southern District of Texas to authorize
the appointment of an official committee that will represent tort
claimants in the Chapter 11 case of Steward Health Care System,
LLC.
The ad hoc committee, led by Lubin & Meyer PC and the Law Office of
John T. Zogby, represents approximately 60 holders of personal
injury claims against Steward and its affiliates relating to, among
other things, medical malpractice and wrongful death.
Adam Schiffer, Esq., the ad hoc committee's attorney, said the
appointment of an official tort claimants committee will address
the lack of representation of tort claimants in the companies'
bankruptcy cases.
"People injured by insolvent corporations need official
representation to gain a voice in plan and settlement negotiation,"
Mr. Schiffer said in a motion filed in court.
The U.S. Trustee for Region 7 on May 16 formed a nine-member
committee of unsecured creditors, which includes one personal
injury claimant and eight holders of commercial claims. The
creditors' committee, however, has not shown concern for personal
injury claimants since its appointment, according to Mr. Schiffer.
"The [creditors committee] has taken no steps and made no
indication of particular support for relief required by the victims
of medical malpractice," the attorney said.
"The divergent aims and entitlements of the creditor factions, most
obviously, competition for the value in TRACO and any substitute
value lying in potential insider litigation claims, suggest that
[creditors committee] may be conflicted or, at a minimum, unable to
zealously advocate for the interests of
personal injury claimants," Mr. Schiffer said, referring to TRACO
International Group S. DE R.L., the companies' insurer.
The companies' total debt to malpractice and wrongful death
claimants is currently difficult to determine because the claimant
pool is not established and such claims are unliquidated. However,
Steward's self-funded insurance plan is likely inadequate to
compensate tort victims, according to Mr. Schiffer.
The ad hoc committee can be reached through:
Adam Schiffer, Esq.
Brown Rudnick, LLP
811 Main Street Suite 1825
Houston, TX 77002
(281) 815-0511
Email: aschiffer@brownrudnick.com
-- and --
Eric Goodman, Esq.
Maria L. DeOliveira, Esq.
Brown Rudnick, LLP
Seven Times Square
New York, NY 10036
(212) 209-4800
Email: egoodman@brownrudnick.com
mdeoliveira@brownrudnick.com
-- and --
Tristan G. Axelrod, Esq.
Matthew A. Sawyer, Esq.
Brown Rudnick, LLP
One Financial Center
Boston, MA 02111
(617) 856-8200
Email: taxelrod@brownrudnick.com
msawyer@brownrudnick.com
About Steward Health Care
Steward Health Care System LLC owns and operates the largest
private physician-owned for-profit healthcare network in the U.S.
Headquartered in Dallas, Texas, Steward's operations include 31
hospitals in eight states, approximately 400 facility locations,
4,500 primary and specialty care physicians, 3,600 staffed beds,
and nearly 30,000 employees. Steward Health Care provides care to
more than two million patients annually.
Steward and 166 affiliated debtors filed a 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.
The U.S. Trustee for Region 7 appointed an official committee to
represent unsecured creditors in the Debtors' Chapter 11 cases. The
committee is represented by Akin Gump Strauss Hauer & Feld, LLP.
STEWARD HEALTH: Lawrence General Buys Holy Family Hospital for $28M
-------------------------------------------------------------------
Goulston & Storrs, an Am Law 200 firm, represented Lawrence General
Hospital and a newly formed not-for-profit in the acquisition of
the Holy Family Hospital assets in Methuen and Haverhill,
Massachusetts, from Steward Health Care System. The final
transaction, approved by the Bankruptcy Court after multiple
hearings, officially closed on October 1, 2024. The transaction
represents a significant milestone in creating a true regional
health care system in the Merrimack Valley.
Through this acquisition, Lawrence General Hospital will take over
both the operations and the real estate assets of the two campuses,
with more than 1,300 employees transitioning to the new ownership
structure. The purchase price for both facilities was $28 million.
The fully integrated Goulston & Storrs deal team was led by
director Douglas Rosner, head of the firm's nationally recognized
bankruptcy and restructuring group, and included additional
individuals from the firm's bankruptcy and restructuring group plus
its corporate, employment, real estate, and tax groups: Darren
Baird, Jean Bowe, Taylor Dias, Martha Frahm, Brendan Gage, Kate
Heller, Gregory Kaden, Elizabeth Levine, Stacey Mordas, Patrick
O'Connor, Justin Rheingold, Erek Sharp, Sonia Steele, Ye-Eun Sung,
and Tiffany Tsang.
About Lawrence General Hospital
Lawrence General Hospital is a private, non-profit community
hospital providing the Merrimack Valley and southern New Hampshire
with patient-centered, compassionate and quality health care for
the whole family. For nearly 150 years, the dedicated doctors,
nurses, and staff of Lawrence General have been committed to
improving the health of the people and communities it serves. To
learn more about Lawrence General Hospital, click here.
About Goulston & Storrs
Collaboration is not just a pillar of our strategy; it is the key
to our competitive advantage and approach to clients, community,
and each other. At Goulston & Storrs, we practice law with
excellence and integrity. We are a place where mutual respect and
collaboration drive open discussion, transparency, creativity and
optimal results for our clients. We are committed to being a
diverse and inclusive workplace where sophisticated business is
conducted with genuine camaraderie. To learn more about us, visit
www.goulstonstorrs.com.
Contact:
Leigh Herzog, Esq.
Goulston & Storrs PC
(617) 574-2259
lherzog@goulstonstorrs.com
About Steward Health Care
Steward Health Care System LLC owns and operates the largest
private physician-owned for-profit healthcare network in the U.S.
Headquartered in Dallas, Texas, Steward's operations include 31
hospitals in eight states, approximately 400 facility locations,
4,500 primary and specialty care physicians, 3,600 staffed beds,
and nearly 30,000 employees. Steward Health Care provides care to
more than two million patients annually.
Steward and 166 affiliated debtors filed chapter 11 petitions
(Bankr. S.D. Tex. Lead Case No. 24-90213) on May 6, 2024, in the
U.S. Bankruptcy Court for the Southern District of Texas, and the
Honorable Christopher M. Lopez oversees the proceeding.
Weil, Gotshal & Manges LLP is serving as the Company's legal
counsel. AlixPartners, LLP is providing financial advisory services
to the Company, and John Castellano of AlixPartners is serving as
the Company's Chief Restructuring Officer. Lazard Freres & Co. LLC,
Leerink Partners LLC, and Cain Brothers, a division of KeyBanc
Capital Markets Inc. are providing investment banking services to
the Company. McDermott Will & Emery is special corporate and
regulatory counsel for the company. Kroll is the claims agent.
STEWARD HEALTH: PCO Reports Staffing Challenges
-----------------------------------------------
Susan Goodman, the patient care ombudsman, filed with the U.S.
Bankruptcy Court for the Southern District of Texas her
consolidated second interim report regarding the quality of patient
care provided by Steward Health Care System, LLC and affiliates.
The report covers the period from July 23 to September 17.
During site visits, the PCO noted clinical staffing that was
consistent both to the companies' individual hospital staffing
matrices and ranges that PCO generally experienced on other case
appointments. Below matrix staffing was directly observed by the
PCO at one of her 15 site visits. The PCO elevated this concern to
market leadership, with some positive movement reported by
operational leadership.
The PCO cited that the other three departments with reported
staffing coverage strain were radiology, clinical laboratory, and
plant operations beyond clinical staff challenges. Radiology
staffing is equipment dependent, meaning the technologist needs to
be credentialed for the equipment modality. Teams are hopeful that
new owners or interim managers will facilitate improved recruitment
outcomes across locations and departments.
The PCO stated that staff generally denied challenges in obtaining
what would be characterized as direct patient care supplies. These
would include items such as blood pressure cuffs, linens, absorbent
pads, syringes, foley catheters, bandages, and the like. In
contrast, continued episodic challenges sourcing specialty supplies
and implants were directly observed and reported. Again, patient
care impact was noted, with patient harm denied.
Ms. Goodman also received some clinician reports of concerns
associated with delayed professional services payments in addition
to clinician feedback regarding specialty supplies. Generally, most
inpatient/visitor feedback was relatively positive with some
notable comments regarding HVAC temperatures (both warm and cold)
in areas working through various chiller, air handler, and reheat
boiler issues. The PCO received two patient concerns associated
with needing additional information relative to specialty clinician
departures and records.
The PCO observed that the common contracted services across the
locations she visits are biomedical engineering, environmental
services and food and nutrition services. She is currently aware of
one location that is changing FNS vendor. Leadership denied patient
care meal delivery concerns relative to the upcoming change. The
current operational flux relative to interim management changes is
a key driver underpinning the PCO's submission of this summary
report. The operational teams are heavily and appropriately focused
on introductions to new interim management.
A copy of the ombudsman report is available for free at
https://urlcurt.com/u?l=UOWs4M from PacerMonitor.com.
The ombudsman may be reached at:
Susan N. Goodman
PIVOT HEALTH LAW, LLC
P.O. Box 69734 |Oro Valley, AZ 85737
Ph: 520.744.7061 (message)
Email: sgoodman@pivothealthaz.com
About Steward Health Care
Steward Health Care System, LLC owns and operates the largest
private physician-owned for-profit healthcare network in the U.S.
Headquartered in Dallas, Texas, Steward's operations include 31
hospitals in eight states, approximately 400 facility locations,
4,500 primary and specialty care physicians, 3,600 staffed beds,
and nearly 30,000 employees. Steward Health Care provides care to
more than two million patients annually.
Steward and 166 affiliated debtors filed Chapter 11 petitions
(Bankr. S.D. Texas Lead Case No. 24-90213) on May 6, 2024. Judge
Christopher M. Lopez oversees the cases.
The Debtors tapped Weil, Gotshal & Manges, LLP as bankruptcy
counsel; McDermott Will & Emery as special corporate and regulatory
counsel; AlixPartners, LLP as financial advisor and John Castellano
of AlixPartners as chief restructuring officer. Lazard Freres & Co.
LLC, Leerink Partners LLC, and Cain Brothers, a division of KeyBanc
Capital Markets Inc., provide investment banking services to the
Debtors. Kroll is the claims agent.
Susan N. Goodman is the patient care ombudsman appointed in the
Debtors' cases.
TABOR MANOR: No Decline in Patient Care, PCO Report Says
--------------------------------------------------------
Jeanne Goche, the court-appointed patient care ombudsman, filed
with the U.S. Bankruptcy Court for the Southern District of Iowa
her first interim report concerning the quality of resident care
provided at Tabor Manor Care Center, Inc.'s nursing facility. The
report covers the period from July 17 to September 13.
The PCO completed an unannounced site visit to Tabor Manor's
facility prior to filing the report. The unannounced site visit,
interviews, and the PCO's experience and qualifications have
enabled her to provide the court with an accurate assessment of
patient care at Tabor Manor's facility.
Prior to the PCO's unannounced site visit on August 20, a complaint
was lodged against the facility, which resulted in an Iowa
Department of Inspections, Appeals, and Licensing (DIAL) finding of
two federal violations, one involving notifying a resident's
physician of changes, and the other involving tube feeding
management. By the time of the PCO unannounced site visit, the
situation was corrected.
In conducting update phone calls on September 11, the PCO learned
that the facility was responding to a Covid-19 outbreak that was
detected that day. In alignment with the Telligen Blue Ribbon
recognition, follow-up phone interviewing indicates the facility is
implementing the state and federal guidelines on Covid-19 outbreaks
in nursing homes.
The PCO observed that the quality of patient care and safety at the
facility seems to be satisfactory with the satisfactory conclusion
of the DIAL investigation involving tube-feeding and the initial
management of the very recent Covid-19 outbreak. Finally,
leadership continues its commitment to a positive resident and
staff culture.
The PCO noted that the facility is making progress in several areas
since the pandemic: replacing temporary agency staff with permanent
staff, beginning use of the renovated dining area, establishing an
effective DON and MDS Coordinator, and developing a comprehensive
vaccination plan for implementation this fall. Finally, leadership
continues its commitment to a positive resident and staff culture.
A copy of the ombudsman report is available for free at
https://urlcurt.com/u?l=ZLL4ki 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. It has 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) on May 8,
2024, with up to $10 million in both assets and liabilities. Chris
Worcester, assistant administrator, signed the petition.
Judge Lee M. Jackwig oversees the case.
Jeffrey D. Goetz, Esq., at Dickinson, Bradshaw, Fowler & Hagen, PC,
represents the Debtor as legal counsel.
Jeanne Goche is the patient care ombudsman appointed in the
Debtor's case.
TAIGA MOTORS: Court OKs CCAA Acquisition by Stewart Wilkinson
-------------------------------------------------------------
Taiga Motors Corporation announced on Oct. 10, 2024, that, in
connection with the proceedings initiated in July 2024 under the
Companies' Creditors Arrangement Act (Canada), the Superior Court
of Quebec has issued an order approving the acquisition of
substantially all of the business of Taiga and its subsidiaries by
Stewart Wilkinson. Stewart Wilkinson's family office is behind the
global leading group of marine electrification brands that include
Vita, Evoy, and Aqua superPower. This strategic move positions
Taiga to leverage significant resources, technologies and a newly
combined global footprint to continue driving the adoption of
electric vehicles beyond the road, ensuring a sustainable future
for recreational and commercial activities in both marine and
powersport sectors.
"We are excited to support the evolution of Taiga," said Stewart
Wilkinson. "Sam and his team have built great products and
technology in challenging financial markets. The world urgently
needs low carbon solutions for all forms of mobility. This
transaction will allow us to continue building the best technology,
team and products to propel the industry forward."
Powering a New Era of Electrification
This transaction marks a transformative moment in the evolution of
electric marine and powersports vehicles at a pivotal time when the
powersport industry is facing significant headwinds. The alliance
between Taiga, Vita, Evoy, and Aqua superPower will create a strong
end-to-end ecosystem to deliver industry-leading electric
propulsion systems and vehicles to a broad range of recreational
and commercial customers worldwide.
"We founded Taiga with the mission to make sustainable recreation
accessible to everyone," said Samuel Bruneau, the CEO and
co-founder of Taiga. "Over the past years, we developed and built
what no other manufacturer was willing or able to achieve -- the
foundational technology required to drive mass market adoption.
This business combination now gives us the scale and resources
needed to deliver on our vision. By combining Taiga's technology
and mass production expertise with the group's leading position in
marine electrification, we will achieve greater economies of scale
to deliver high-performance products at compelling prices to
accelerate the electric transition."
Expanding Global Reach with Technological Leadership
The acquisition creates a positive path forward for Taiga,
strengthening its operations in Canada, persevering jobs and
enabling continued delivery of its award-winning electric
snowmobiles and personal watercraft. Taiga's advanced production
facility in Montreal, Quebec with an installed capacity of up to
8,000 combined units per year, will enable delivery of cost-leading
electric powertrain components to global boat manufacturers
alongside Taiga's electric vehicles.
With state-of-the-art production facilities and innovation centers
strategically located across North America and Europe, including
key sites in Montreal, the UK, Italy and Norway, the group is
well-positioned to scale its operations and distribution globally.
This depth of knowledge, combined with cutting-edge technology and
manufacturing capabilities, positions Taiga as a leader in
innovation, performance, and the future of electric recreational
vehicles.
About the Transaction
The financial terms of the Transaction are confidential, however,
among other matters, the Purchaser has agreed to assume and
guarantee Taiga's indebtedness to Export Development Canada,
Taiga's most senior secured lender and the sole provider of interim
funding to Taiga under the CCAA proceedings, and Mr. Wilkinson has
committed to provide working capital funding for Taiga's business
plan.
For further information regarding the CCAA proceedings, please
contact Deloitte Restructuring Inc., the Court-appointed Monitor of
Taiga and its subsidiaries by telephone at 514-393-5917, or by
email at taiga_motors@deloitte.ca. Its website address is
https://www.insolvencies.deloitte.ca/. Closing of the transaction
is expected to occur in the near term and is conditional only on
Taiga receiving certain orders from the Canadian securities
regulatory authorities.
Norton Rose Fulbright Canada LLP acted as legal counsel to Taiga,
Lavery, de Billy, L.L.P. represented Stewart Wilkinson, while
Fasken Martineau Dumoulin advised the Monitor.
About Evoy and Vita
Evoy and Vita are marine technology specialists that develop high
performance, fast charging electric propulsion systems for
commercial and recreational marine applications. Evoy's high output
100-400 HP inboard and outboard offer instant plug-and-play
solutions for the mass market, while Vita offers design and
integration services for the specific requirements of transport and
tender electrification projects. With a peak power of 600HP, Vita
Power systems have also been incorporated into the first fully
electric superyacht tenders and in collaboration with Maserati on a
high-end electric dayboat.
Compatible with high-speed DC charging, Evoy and Vita systems are
among the fastest charging on the market, supercharging from
10%-90% in under an hour.
Vita also produce fully electric 5.5m and 7m RIBs that are designed
for port, marina, coastguard, and sport club operations. Vita was
the sole supplier of electric boats to the Paris 2024 Olympic
Games, setting a world record by providing the largest fleet of
electric boats ever assembled for working purposes. For more
information visit: www.vita-power.com, www.evoy.no
About Aqua superPower
Aqua superPower is the first fully marinized dockside global
network of fast charging stations for electric boats. The product
range includes AC and DC charging solutions allowing DC compatible
powerboats to rapidly recharge and extend their autonomy. Aqua
superPower has developed the first supercharger specifically
engineered and rated for use in marine environments. Built to IP65
standards, Aqua superPower is a revolutionary and sustainable
marine charging solution. For more information, visit
aqua-superpower.com.
About Taiga
Taiga is a Canadian company reinventing the powersports experience
with revolutionary electric powersports vehicles. Through a
clean-sheet engineering approach Taiga has pushed the frontiers of
electric technology to achieve the extreme power-to-weight ratios
and thermal specifications required to outperform comparable
high-performance combustion powersports vehicles. The product
lineup currently includes electric snowmobiles and personal
watercraft to deliver on a rapidly growing demand from recreational
and commercial customers who are seeking better ways to explore the
great outdoors without compromise. For more information, visit
www.taigamotors.com.
TLC MEDICAL: Loses Bid to Reinstate Chapter 11 Case
---------------------------------------------------
Chief Judge Erik P. Kimball of the United States Bankruptcy Court
for the Southern District of Florida denied TLC Medical Group,
Inc.'s Motion for Reconsideration and Reinstatement of Chapter 11
Case and for an Automatic Stay and Other Relief.
In the motion, the debtor asks the Court to vacate its order
dismissing this chapter 11 case and to reinstate the case under
subchapter V of chapter 11, among other relief. The United States
Trustee objected.
On August 1, 2024, the debtor filed a voluntary petition under
subchapter V of chapter 11. The debtor indicated on the petition
that it is a healthcare business according to 11 U.S.C. Sec.
101(27A) and that it is a small business debtor as that term is
defined in 11 U.S.C. Sec. 101(51D).
On August 20, 2024, the U.S. Trustee filed an emergency motion to
dismiss or convert this case.
On August 28, 2024, the Court held a hearing on the U.S. Trustee's
motion to dismiss or convert this case and a status conference on
the debtor's plan. The Court granted the U.S. Trustee's motion to
dismiss. The Court entered its order dismissing this case on August
30, 2024, incorporating the oral ruling on the record on August
28.
On September 9, 2024, the debtor filed the motion for
reconsideration.
Judge Kimball says, "The Court found cause to dismiss this case
because (a) the debtor failed timely to provide information
reasonably requested by the United States Trustee, including
routinely requested insurance information, (b) as of the hearing
date the debtor had not provided proof that it had general
liability insurance and the debtor has never provided proof of
property insurance for the debtor's real property valued at
$925,000, and (c) it appeared that the debtor had used cash
collateral without authorization. 11 U.S.C. Secs. 1112(b)(4)(H),
(C), and (D), respectively, provide that such failures constitute
cause for dismissal or conversion."
The debtor also asks the Court to "reinstate the automatic stay
pending the resolution of this motion and (or) appeal." Judge
Kimball notes the automatic stay under 11 U.S.C. Sec. 362 arises
only when there is a pending bankruptcy case. This bankruptcy case
is dismissed and so the stay is terminated, the judge says. The
Court says it cannot impose the automatic stay when there is no
pending bankruptcy case.
The debtor cites no rule or legal standard to support its request
for the Court to reconsider the order dismissing this case, Judge
Kimball explains. As the U.S. Trustee argues, no applicable
standard under these rules supports reconsideration of the Court's
order dismissing this case.
Finally, the debtor appears to ask for a stay pending appeal under
Fed. R. Bankr. P. 8007. The debtor has not filed a notice of appeal
from the order dismissing this case, so there is no basis to grant
a stay pending appeal, Judge Kimball says. Even if there was a
pending appeal from the Court's order dismissing this case, the
debtor would be unable to meet the standard for entry of a stay
pending appeal.
A copy of the Court's decision is available at
https://urlcurt.com/u?l=zCfYGB
TLC Medical Group, Inc. filed a voluntary petition under subchapter
V of chapter 11 (Bankr. S.D. Fla. Case No. 24-17881) on August 1,
2024, represented by Roderick Andrew Lee Ford, Esq., as counsel.
The United States Trustee appointed Carol Fox as subchapter V
trustee.
TMC BUYER: S&P Affirms 'B' ICR on Proposed Refinancing
------------------------------------------------------
S&P Global Ratings affirmed its 'B' issuer credit rating on TMC
Buyer Inc.
S&P said, "At the same time, we assigned a 'B' issue-level rating
to the company's proposed term loan, delayed draw term loan, and
revolving credit facility, with a recovery rating of '3' (50%-70%,
rounded estimate: 50%) indicating our expectations for average
recovery under a hypothetical default scenario.
"The stable outlook reflects our expectation that TMC will deliver
consistent performance over the next 12 months, benefiting from its
recurring maintenance contracts, solid end-market demand from its
industrial customers, and incremental growth from recent
acquisitions. We estimate the company's S&P Global Ratings-adjusted
debt to EBITDA to be in the mid-5x area in fiscal 2024, following
the dividend recapitalization transaction and remaining comfortably
below 6.5x over the following 12 months."
TMC Buyer Inc. plans to refinance its existing term loan and
revolving credit facilities, with a new $550 million term loan, $50
million delayed draw term loan, and $75 million revolving credit
facility.
The company will use the proceeds to refinance approximately $457
million of existing debt on its term loan facilities due 2028,
cover transaction fees and expenses, and fund an $80 million
shareholder distribution.
S&P said, "TMC's proposed refinancing and dividend recapitalization
increases leverage but is generally in line with our expectations
given the company's financial sponsor ownership. TMC intends to use
the proceeds of the proposed $550 million term loan issuance to
refinance approximately $457 million in existing term loan debt and
pay an $80 million distribution to shareholders. As part of the
transaction, the company will also increase its revolving credit
facility capacity by $25 million with its new $75 million revolving
credit facility and will have access to a $50 million delayed draw
term loan facility to fund future acquisitions (two-year draw
availability). The transaction increases our S&P Global
Ratings-adjusted debt to EBITDA expectations to around mid-5x for
fiscal 2024, increasing approximately half a turn compared with our
previous expectation of leverage in the low-5x area, reflecting
higher debt outstanding but partially offset by higher than
previously anticipated EBITDA.
"We expect EBITDA will continue to expand in fiscal 2025,
supporting leverage decreasing to around low-5x by the end of 2025.
H.I.G. Capital acquired TMC in 2022 and we believe it has
maintained a consistent financial policy with improving leverage
comfortably below 6.5x over its holding period. For the last
12-months as of July 31, 2024, S&P Global Ratings'-adjusted debt to
EBITDA was 4.8x compared with 6.3x a year before, therefore, we
believe there is sufficient cushion to support the proposed
transaction. Under our base case, we expect TMC will maintain a
moderate appetite for M&A mostly focused on expanding its
operational capabilities.
"We see the transaction as credit neutral and we expect annual
interest expense relatively unchanged at about $50 million as lower
interest rates on the new facilities partially offset the impact of
higher outstanding debt. Additionally, the proposed transaction
pushes out the company's existing maturities by approximately two
years.
"We expect the company's revenue will grow in the low-teens percent
area, with modest S&P Global Ratings-adjusted EBITDA margin
expansion in 2025. TMC benefits from solid demand for its recurring
industrial maintenance services including refractory, fireproofing
and insulation, among other specialized services. We believe TMC's
revenue will benefit from non-discretionary maintenance
requirements across its long-tenured customer base, while boosted
by allocations from the Infrastructure Investment and Jobs Act
(IIJA) and reshoring. We believe TMC's revenue stream is fairly
predictable given the non-deferrable nature of its core services
due to potential high cost during plant downtime and damage to
high-value machinery. In addition to TMC's traditional end markets
including cement, steel, and chemicals among others, the company is
well positioned to benefit from newer fast growing end markets such
as liquefied natural gas (LNG), semiconductor manufacturing,
renewable diesel, and electric vehicle battery manufacturing. We
also expect TMC will be able to capitalize on cross-selling
different service offerings to existing customers that should
provide incremental revenue and higher profit margins.
"Given these growth trends, coupled with incremental revenue from
the recent acquisitions of Jayne Industries Inc. and Thermal
Solutions Inc. during fiscal-year 2024, we expect revenue growth in
the 12% to 14% range in fiscal 2024 and in the 14% to 16% range in
fiscal 2025, inclusive of about 4% organic growth. In 2023, TMC
experienced robust revenue growth of approximately 9%, due to
increased revenue from maintenance services and contribution from
the acquisition of Reftech International Corp.
"We expect the company to expand its S&P Global Ratings-adjusted
EBITDA margins to the low-13% area in fiscal 2024, with modest
expansion to the low- to mid-13% range in fiscal 2025. For the
last-12-months as of July 31, 2024, S&P Global Ratings' margins
were 13.5%, benefitting from stronger than average second and third
quarter of the year due to higher turnaround work. We believe the
company's strategic focus on maintenance jobs (77% of revenue),
mostly through time and materials (T&M) contracts, provides
visibility into the company's top line growth and margin profile,
while we believe cross-selling opportunities and a focus on
in-house work present additional upside. Disciplined project
selection and execution and a shift toward higher margin
maintenance projects will drive margin expansion. We expect this
expansion will aid the company in deleveraging following the
proposed transaction.
"We anticipate TMC will generate positive free operating cash flow
(FOCF) in fiscal 2024, though burdened by transaction costs, and we
estimate further FOCF expansion in fiscal 2025. The company's free
cash flow metrics will be burdened by approximately $14 million of
transaction fees as part of the refinancing and dividend
recapitalization in fiscal 2024. However, we forecast TMC will
generate positive reported FOCF of about $17 million. As a result,
we expect S&P Global Ratings-adjusted FOCF to debt will decline to
about 3% at the end of 2024, but we estimate the fall-off of
transaction fees and expanded earnings in 2025 will support FOCF
generation to about $40 million, resulting in FOCF to debt in the
mid- to high-single-digit area. Also supporting FOCF is the
company's lite capital expenditure (capex) requirements and
manageable working capital swings.
"The stable outlook reflects our expectation that TMC will deliver
consistent performance over the next 12 months, benefiting from its
recurring maintenance contracts, solid end-market demand from its
industrial customers, and incremental growth from recent
acquisitions. We estimate the company's S&P Global Ratings-adjusted
debt to EBITDA will be in the mid-5x are in fiscal 2024, following
the dividend recapitalization transaction, and remain comfortably
below 6.5x over the following 12 months.
"We could lower our rating over the next 12 months if the company's
S&P Global Ratings-adjusted debt to EBITDA exceeds 6.5x or S&P
Global Ratings-adjusted FOCF to debt falls below 3% on a sustained
basis. This could occur if the company experiences a meaningful
deterioration in margins due to a slowdown across several end
markets and/or it becomes more aggressive on debt financed
acquisitions or shareholder distributions.
"While unlikely over the next 12 months, we could raise the rating
if the company demonstrates solid operating performance and
meaningful debt reduction, such that it has S&P Global
Ratings-adjusted debt to EBITDA below 5x and S&P Global
Ratings-adjusted FOCF-to-debt greater than 5% on a sustained
basis.
"Governance is a moderately negative consideration in our credit
rating analysis of TMC, as is the case for most rated entities
owned by private-equity sponsors. We believe the company's highly
leveraged financial risk profile points to corporate
decision-making that prioritizes the interests of the controlling
owners. This also reflects the generally finite holding periods and
a focus on maximizing shareholder returns."
TOTAL AUTO: Gets Interim OK to Use Cash Collateral Until Nov. 29
----------------------------------------------------------------
Total Auto Financing, LLC received interim court approval to use
the cash collateral of American Credit Acceptance, LLC and
Automotive Finance Corporation.
The interim order penned by Judge Brian Kenney of the U.S.
Bankruptcy Court for the Eastern District of Virginia approved the
use of cash collateral from Oct. 5 to Nov. 29.
As adequate protection, ACA and AFC will receive $717,334 and
$123,535, respectively, at the non-default rate from the proceeds
of their respective collateral.
Total Auto Financing has projected total cash receipts of
$1,400,000 and total projected cash disbursements amount of
$1,693,669 over the upcoming weeks.
The next hearing is scheduled for Nov. 26.
About Total Auto Financing
Total Auto Financing, LLC is in the business of automotive finance
for sub-prime car purchasers using retail installment contracts. It
was formed by Elshan Bayramov and Babak Bayramov on September 28,
2020. It provides loan portfolio management services for a $48
million loan portfolio employing eight persons in the U.S. and
eight persons in the Bayramovs' native country of Azerbaijan.
Total Auto Financing sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D. Va. Case No. 23-11867) on November 15,
2023, with $10 million to $50 million in both assets and
liabilities. Elshan Bayramov, member-manager, signed the petition.
Judge Brian F. Kenney oversees the case.
Martin C. Conway, Esq., at Conway Law Group, PC, represents the
Debtor as legal counsel.
TUPPERWARE BRANDS: Charles Schwab Investment No Longer Holds Shares
-------------------------------------------------------------------
Charles Schwab Investment Management, Inc. disclosed in a Schedule
13G/A Report filed with the U.S. Securities and Exchange Commission
that as of September 23, 2024, it has ceased to beneficially own
shares of Tupperware Brands Corp's common stock.
A full-text copy of Charles Schwab's SEC Report is available at:
https://tinyurl.com/y3jy488x
About Tupperware Brands
Tupperware Brands Corporation (NYSE: TUP) --
https://www.tupperwarebrands.com/ -- is a global consumer products
company that designs innovative, functional, and environmentally
responsible products. Founded in 1946, Tupperware's signature
container created the modern food storage category that
revolutionized the way the world stores, serves, and prepares food.
Today, this iconic brand has more than 8,500 functional design and
utility patents for solution-oriented kitchen and home products.
The company distributes its products into nearly 70 countries,
primarily through independent representatives around the world.
Tupperware Brands sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Del. Case No. 24-12166) on Sept. 17,
2024. In the bankruptcy petition, Tupperware reported more than
$1.2 billion in total debts and $679.5 million in total assets.
Kirkland & Ellis LLP is serving as legal advisor to Tupperware,
Moelis & Company LLC is serving as the Company's investment banker,
and Alvarez & Marsal is serving as the Company's financial and
restructuring advisor. Epiq is the claims agent and has put up the
page https://dm.epiq11.com/Tupperware
TUPPERWARE BRANDS: Court Issues Order to Preserve Tax Attributes
----------------------------------------------------------------
Tupperware Brands Corporation disclosed in a Form 8-K Report filed
with the U.S. Securities and Exchange Commission that on September
27, 2024, the U.S. Bankruptcy Court for the District of Delaware
entered the Interim Order (I) Approving Notification and Hearing
Procedures for Certain Transfers of and Declarations of
Worthlessness with Respect to Common Stock and (II) Granting
Related Relief.
As previously reported, on September 17‑18, 2024, the Corporation
and certain of its direct and indirect subsidiaries filed voluntary
petitions to commence proceedings under chapter 11 of title 11 of
the United States Code in the United States Bankruptcy Court for
the District of Delaware. The Chapter 11 Cases are being jointly
administered under the caption In re Tupperware Brands Corporation,
et al., Case No. 24-12156 (BLS).
The NOL Order is designed to assist the Debtors in preserving
certain of their tax attributes by establishing, among other
things, the procedures (including notice requirements) that certain
stockholders and potential stockholders must comply with regarding
transfers of, or declarations of worthlessness with respect to, the
Corporation's common stock, as well as certain obligations with
respect to notifying the Debtors with respect to current stock
ownership.
The terms and conditions of the Procedures were immediately
effective and enforceable upon entry of the NOL Order by the
Bankruptcy Court. Any actions in violation of the Procedures
(including the notice requirements) are null and void ab initio,
and (a) the person or entity making such a transfer will be
required to take remedial actions specified by the Debtors to
appropriately reflect that such transfer of the Corporation's
common stock is null and void ab initio and (b) the person or
entity making such a declaration of worthlessness with respect to
the Corporation's common stock will be required to file an amended
tax return revoking such declaration and any related deduction to
reflect that such declaration is void ab initio.
About Tupperware Brands
Tupperware Brands Corporation (NYSE: TUP) --
https://www.tupperwarebrands.com/ -- is a global consumer products
company that designs innovative, functional, and environmentally
responsible products. Founded in 1946, Tupperware's signature
container created the modern food storage category that
revolutionized the way the world stores, serves, and prepares food.
Today, this iconic brand has more than 8,500 functional design and
utility patents for solution-oriented kitchen and home products.
The company distributes its products into nearly 70 countries,
primarily through independent representatives around the world.
Tupperware Brands sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Del. Case No. 24-12166) on Sept. 17,
2024. In the bankruptcy petition, Tupperware reported more than
$1.2 billion in total debts and $679.5 million in total assets.
Kirkland & Ellis LLP is serving as legal advisor to Tupperware,
Moelis & Company LLC is serving as the Company's investment banker,
and Alvarez & Marsal is serving as the Company's financial and
restructuring advisor. Epiq is the claims agent and has put up the
page https://dm.epiq11.com/Tupperware
TUPPERWARE BRANDS: Engages in More Chapter 11 Talks With Lenders
----------------------------------------------------------------
Vince Sullivan of Law360 Bankruptcy Authority reports that bankrupt
food storage product maker Tupperware Brands told a Delaware judge
on Monday, October 7, 2024, that it is engaged in discussions with
an ad hoc group of lenders seeking dismissal or conversion of the
company's Chapter 11 case, and pushed back a potentially
case-ending hearing to continue those negotiations.
About Tupperware Brands
Tupperware Brands Corporation (NYSE: TUP) --
https://www.tupperwarebrands.com/ -- is a global consumer products
company that designs innovative, functional, and environmentally
responsible products. Founded in 1946, Tupperware's signature
container created the modern food storage category that
revolutionized the way the world stores, serves, and prepares food.
Today, this iconic brand has more than 8,500 functional design and
utility patents for solution-oriented kitchen and home products.
The company distributes its products into nearly 70 countries,
primarily through independent representatives around the world.
Tupperware Brands sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Del. Case No. 24-12166) on Sept. 17,
2024. In the bankruptcy petition, Tupperware reported more than
$1.2 billion in total debts and $679.5 million in total assets.
Kirkland & Ellis LLP is serving as legal advisor to Tupperware,
Moelis & Company LLC is serving as the Company's investment banker,
and Alvarez & Marsal is serving as the Company's financial and
restructuring advisor. Epiq is the claims agent and has put up the
page https://dm.epiq11.com/Tupperware
US LIGHTING: Two Top Execs Step Down
------------------------------------
US Lighting Group, Inc. disclosed in a Form 8-K Report filed with
the U.S. Securities and Exchange Commission that on September 27,
2024, Joseph Matozzo and Michael A. Coates stepped down as the
chief executive officer and chief financial officer, respectively,
of the Company. The decision was a mutual one between Messrs.
Matozzo and Coates and the company's board of directors.
Mr. Coates joined the company as controller in February 2023 and
was promoted to chief financial officer in December 2023. The
Company thanks him for his support of the company during this
critical expansion phase of its business into growth sectors such
as high-end recreational vehicles (RVs), prefabricated off-grid
houses, and high-performance powerboats. Mr. Matozzo joined the
company as interim CEO in September 2024. Messrs. Matozzo and
Coates have decided to pursue other opportunities, and the board
wishes them the best of luck in their future endeavors.
At this time the company has not identified a new CEO or CFO but is
in the process of conducting a search and will announce any
additions to our executive team. We are currently focused on
launching the Cortes Campers molded fiberglass 22-foot travel
trailer, which generated significant interest at the 2024 RV Show
in Hershey, Pennsylvania.
About US Lighting
Headquartered in Euclid, Ohio, US Lighting Group, Inc., is an
innovative composite manufacturer utilizing advanced fiberglass
technologies in growth sectors such as high-end recreational
vehicles (RVs), prefabricated off-grid houses, and high-performance
powerboats. The Company derives expertise and inspiration from the
marine industry, where the harshest conditions are expected and met
with superior engineering and the latest in composite technology.
The Company plans to expand its manufacturing footprint, enhance
production techniques, and develop more products in the RV, marine,
and composite housing sectors. Its current R&D efforts are focused
on future tow-behind camper models under the Cortes Campers brand,
as well as the prefabricated housing segment.
Columbus, Ohio-based GBQ Partners LLC, the Company's auditor since
2023, issued a "going concern" qualification in its report dated
April 15, 2024, citing that the Company has suffered recurring
losses from operations and has a significant accumulated deficit.
In addition, the Company continues to experience negative cash
flows from operations. These factors raise substantial doubt about
the Company's ability to continue as a going concern.
As of June 30, 2024, US Lighting Group had $3 million in total
assets, $8.51 million in total liabilities, and a total
stockholders' deficit of $5.51 million.
VENUS CONCEPT: Masters Special Situations Holds 8% Stake
--------------------------------------------------------
Masters Special Situations, LLC disclosed in a Joint Schedule 13D
Report filed with the U.S. Securities and Exchange Commission that
as of October 1, 2024, the firm and its affliates -- Masters
Capital Management, LLC, a Georgia limited liability company
("MCM"), Michael Masters, a United States citizen, and MSS VC SPV
LP, a Delaware limited partnership ("MSSVC") -- beneficially owned
shares of Venus Concept's common stock.
Michael Masters is the controlling founder of each of MSS and MCM,
each an investment management firm that serves as the investment
manager to certain private funds, including Marlin Fund, Limited
Partnership ("MFLP"), Marlin Fund II, Limited Partnership
("MFIILP"), Marlin Fund III Limited Partnership ("MFIIILP"), Marlin
Master Fund Offshore II, LP ("MMFO") and MSSVC.
As of the date of this Amendment No. 4 to Schedule 13D:
(i) Michael Masters may be deemed to be the beneficial owner
of 581,016 shares of Common Stock or 8.0% of the shares of Common
Stock of Venus Concept
(ii) MSS may be deemed to be the beneficial owner of 209,803
shares of Common Stock or 2.9% of the shares of Common Stock of
Venus Concept,
(iii) MCM may be deemed to be the beneficial owner of 371,213
shares of Common Stock or 5.1% of the shares of Common Stock of
Venus Concept, and
(iv) MSSVC may be deemed to be the beneficial owner of 209,803
shares of Common Stock or 2.9% of the shares of Common Stock of
Venus Concept, in each case based upon the 7,255,277 shares of
Common Stock outstanding as of August 7, 2024, following the sale
of Common Stock of the Reporting Persons.
As of October 3, 2024, MSS and MSSVC have each ceased to be the
beneficial owner of more than 5% of the Common Stock of Venus
Concept.
The aforementioned shares of Common Stock were acquired for
investment purposes. The Reporting Persons may acquire additional
securities of Venus Concept, dispose of all or some of these
securities from time to time, in each case in open market or
private transactions, block sales or purchases or otherwise, or may
continue to hold the Common Stock.
The Reporting Persons specifically disclaim beneficial ownership in
the shares of Common Stock reported herein except to the extent of
their pecuniary interest therein.
A full-text copy of the SEC Report is available at:
https://tinyurl.com/yc2w65dm
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.
Venus Concept reported a net loss of $37.1 million for the year
ended December 31, 2023, compared to a net loss of $43.6 million
for the year ended December 31, 2022. As of June 30, 2024, the
Company had $79.8 million in total assets, $75.4 million in total
liabilities, $662,000 in non-controlling interests, and $3.7
million in total stockholders' equity.
VERTEX ENERGY: U.S. Trustee Appoints Creditors' Committee
---------------------------------------------------------
The U.S. Trustee for Region 7 appointed an official committee to
represent unsecured creditors in the Chapter 11 case of Vertex
Energy Inc.
The committee members are:
1. Matheson Tri-Gas, Inc.
909 Lake Carolyn Parkway, Ste 1110
Irving, TX 75039
Frank Patel, Corporate Counsel
(972) 546-2360
fpatel@mathesongas.com
2. Idemitsu Apollo Renewable
1831 16th Street
Sacramento, CA 95811
Shinya Tsutsui, CEO
(916) 443-0890
beni.yoshida.9690@idemitsu.com
3. U.S. Bank Trust Company, N.A.
60 Livingston Avenue
St. Paul, MN 55107
Peter Finkel, VP
(651) 242-0450
Peter.finkel@usbank.com
4. Harley Marine Financing LLC
910 SW Spokane Street
Seattle, WA 98134
Daniel Paige, VP and GC
(845) 743-6514
dpaige@centerlinelogistics.com
5. Turner Industries Group, LLC
P.O. Box 2750
Baton Rouge, LA 70821
John H. Fenner, VP-CGC
(225) 214-2066
jfenner@turner-industries.com
6. United Steel, Paper and Forestry, Rubber,
Manufacturing, Energy, Allied Industrial
and Service Workers International Union (USW)
60 Boulevard of the Allies, Room 807
Pittsburgh, PA 15222
David Jury, General Counsel
(412) 562-2545
djury@usw.org
7. Hargrove and Associates, Inc.
20 South Royal Street
Mobile, AL 36602
Michele Kane, General Counsel
(251) 467-0605
Mkane@hargrove-epc.com
8. Worley Group Inc.
116 Inverness Drive East, Suite 107
Englewood, CO 80112-5125
Gerardo R. Barrios
General Counsel, Litigation
(303) 583-5649
Gerry.Barrios@Worley.com
9. Nitro-Lift Technologies, LLC
8980 Highway 1 South
Mill Creek, OK 74856
Vernon Daniels
(580) 371-3700
v.daniels@nitrolift.com
Official creditors' committees serve as fiduciaries to the general
population of creditors they represent. They may investigate the
debtor's business and financial affairs. Committees have the right
to employ legal counsel, accountants and financial advisors at a
debtor's expense.
About Vertex Energy
Vertex Energy, Inc., together with its subsidiaries, is an energy
transition company and marketer of refined products and renewable
Fuels in Houston.
Vertex Energy filed is voluntary petition for relief under Chapter
11 of the Bankruptcy Code (Bankr. S.D. Texas Lead Case No.
24-90507) on September 24, 2024, listing $772,368,000 in assets and
$642,819,000 in liabilities. The petitions were signed by R. Seth
Bullock as chief restructuring officer.
Judge Christopher M. Lopez oversees the case.
Jason G. Cohen, Esq., at Bracewell, LLP represents the Debtors as
counsel.
VIANT MEDICAL: Moody's Raises CFR to B3 & Alters Outlook to Stable
------------------------------------------------------------------
Moody's Ratings upgraded Viant Medical Holdings, Inc.'s Corporate
Family Rating to B3 from Caa1 and Probability of Default Rating to
B3-PD from Caa1-PD. Concurrently, Moody's assigned a B2 rating to
Viant's proposed new backed senior secured first lien bank credit
facilities (consisting of a new $100 million backed senior secured
first lien revolving credit facility expiring in 2029, new $680
million backed senior secured first lien term loan due 2031, and
new $75 million backed senior secured first lien delayed draw term
loan due 2031). The new $245 million backed senior secured second
lien term loan due 2032 is unrated. The B3 ratings for the existing
backed senior secured first lien revolving credit facility, term
loans and the Caa3 rating on the existing backed senior secured
second lien term loan remain unchanged. At the same time, Moody's
revised Viant's outlook to stable from positive.
Proceeds from the new $680 million first lien term loan and $245
million second lien term loan will be used to fully repay Viant's
existing revolving credit facility, first lien term loans, second
lien term loan and pay related fees and expenses. Upon close of the
transaction, Moody's anticipate withdrawing the B3 ratings on the
existing senior secured first lien revolving credit facility and
term loans and the Caa3 rating on the existing second lien term
loan upon repayment of these obligations.
The upgrade of the CFR to B3 reflects the company's improved
maturity profile resulting from the refinancing. The upgrade also
reflects Viant's ongoing improvement in operating performance,
including substantial new program business wins and strong demand
for its medical device contract manufacturing services. Pro forma
for the refinancing, Moody's estimate debt to EBITDA in the low 7
times range as of June 30, 2024, with continued deleveraging
towards 6 times over the next 12 to 18 months. Moody's anticipate
improved liquidity in the form of $57 million of cash on hand after
the refinancing as well as access to the newly upsized revolver and
the delayed draw term loan. The stable outlook reflects Moody's
expectation that Viant will continue its earnings improvement and
progress towards breakeven free cash flow for full year 2024, with
positive free cash flow in 2025.
Governance considerations were key drivers of the rating action as
it relates to improving financial strategy and risk management
given the refinancing of near-term maturities.
RATINGS RATIONALE
Viant's B3 Corporate Family Rating reflects the company's high
financial leverage in the low-7x area pro forma for the debt
refinancing. Viant faces high customer concentration as three
customers represent more than 40% of revenues. Moody's expect that
financial policies will remain relatively aggressive reflecting
Viant's ownership by private equity investors, notwithstanding
continued improvement in leverage.
The company's rating benefits from a diversified product portfolio
across multiple therapeutic areas and stable demand for contract
manufacturing services. With recent growth propelled by new
business wins, earnings now meaningfully exceed pre-pandemic
levels, underpinned by healthy demand from Viant's end-markets,
including surgical and orthopedic devices. In addition, given
regulatory constraints, the switching costs for the company's
customers is high.
Moody's expect that Viant will maintain adequate liquidity over the
next 12 to 18 months. Liquidity is supported by $57 million of cash
pro forma for the refinancing, as well as access to a $100 million
revolving credit facility and $75 million in delayed draw term
loan. However, negative free cash flow is reflective of high
capital expenditures for growth initiatives. As earnings improve,
Moody's anticipate Viant trending towards positive free cash flow
in FY 2025.
Viant's CIS-4 score (previously CIS-5) indicates that the company's
credit profile is weaker than it would have been if ESG exposures
did not exist. Governance considerations (G-4, previously G-5)
include the company's aggressive financial policies including its
high leverage. This is mitigated by the company's consistent
earnings growth and track record of deleveraging post pandemic and
refinancing of debt which was coming due in the near-term. Social
considerations (S-4) are primarily associated with responsible
production including compliance with regulatory requirements for
the safety of medical devices as well as adverse reputational risks
arising from recalls associated with manufacturing defects. The
score also reflects environmental considerations (E-3) due to the
company's manufacturing footprint in Puerto Rico and Costa Rica,
which is subject to heightened physical climate risk.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Ratings could be upgraded if the company increases in size and
scale through a balanced growth strategy. Additionally, sustaining
positive free cash flow could put upside pressure on the ratings.
Along with the aforementioned factors, the company could be
upgraded if debt/EBITDA is sustained below 5.5x.
Ratings could be downgraded if the company's operating performance
deteriorates, free cash flow turns negative or if liquidity
weakens. A more aggressive stance towards acquisitions or
shareholder returns could lead to a downgrade. Along with the
aforementioned factors, the company could be downgraded if
debt/EBITDA is sustained above 7x.
Marketing terms for the new credit facilities (final terms may
differ materially) include the following:
Incremental first lien debt capacity up to the greater of $187
million and 100% of consolidated EBITDA, plus unlimited amounts
subject to 3.3x first lien net leverage ratio. There is no inside
maturity sublimit. There are no "blocker" provisions which prohibit
the transfer of specified assets to unrestricted subsidiaries.
There are no protective provisions restricting an up-tiering
transaction.
The principal methodology used in these ratings was Medical
Products and Devices published in October 2023.
Headquartered in Foxborough, MA, Viant is an outsourced
manufacturer of medical devices serving a broad range of
therapeutic areas including cardiovascular, orthopedics and
advanced surgical. Viant is owned by affiliates of JLL Partners and
Water Street Healthcare Partners. The company's revenue in the LTM
period ending June 30, 2024 was over $1.1 billion.
W NORTHFIELD LLC: Seeks Chapter 11 Bankruptcy Protection
--------------------------------------------------------
W Northfield LLC filed Chapter 11 protection in the District of New
Jersey. 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
November 6, 2024 at 10:00 a.m. in Room Telephonically.
About W Northfield LLC
W Northfield LLC is a Single Asset Real Estate debtor (as defined
in 11 U.S.C. Section 101(51B)).
W Northfield LLC sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D.N.J. Case No. 24-19729) on October 1,
2024. In the petition filed by Victor Carofilis, as member, 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:
David Stevens, Esq.
SCURA WIGFIELD, HEYER, STEVENS & CAMMAROTA LLP
1599 Hamburg Turnpike
Wayne NJ 07470
Tel: 973-696-8391
Email: dstevens@scura.com
WELLPATH HOLDINGS: Moody's Cuts CFR to 'Caa3', Outlook Stable
-------------------------------------------------------------
Moody's Ratings downgraded Wellpath Holdings, Inc.'s Corporate
Family Rating to Caa3 from Caa1 and Probability of Default Rating
to Caa3-PD from Caa1-PD. Moody's also downgraded the company's
backed senior secured first lien revolving credit facility and
backed senior secured first lien term loan ratings to Caa3 from B3
and the backed senior secured second lien term loan to C from Caa2.
The outlook remains stable.
The downgrade reflects the very high likelihood of a restructuring
of Wellpath's capital structure due to a high debt burden relative
to the company's earnings capacity and the expiry of the nearly
fully drawn revolver in October 2024. The first lien term loan
matures in October 2025. Given these factors, the rating action
reflects the high probability of a major restructuring or default.
RATINGS RATIONALE
Wellpath's Caa3 CFR reflects the high likelihood of a default due
to very high financial leverage, weak liquidity and near-term
maturities. The company's rating benefits from its large scale and
good diversity across customers and geographies.
The stable outlook reflects Moody's view that there is a heightened
risk of default given the weak liquidity and upcoming debt
maturity.
Moody's expect liquidity to remain weak. While there is $88 million
of cash on balance sheet, the revolver is expiring with $61 million
drawn out of $65 million available. In addition, the first lien
term loan matures in October 2025. Alternative sources of liquidity
are limited as substantially all assets are pledged.
Wellpath's senior secured first lien credit facility, comprised of
a $65 million revolving credit facility expiring in October 2024
and $500 million term loan maturing in October 2025, is rated Caa3
and the $110 million senior secured second lien term loan maturing
in October 2026, is rated C. These ratings reflect the weak
expected recovery in a default scenario.
Wellpath's CIS-5 indicates that the rating is lower than it would
have been if ESG risk exposures did not exist and that the negative
impact is more pronounced than for issuers scored CIS-4. Wellpath
has social risks related to providing health care and related
services in correctional facilities to a highly vulnerable patient
base. The company's governance risk considerations reflect the
company's aggressive financial policies and risk management
including operating with very high financial leverage and weak
track record.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Although unlikely in the near term, an upgrade would require a
reduction in the likelihood of default by addressing debt maturity
and sustained improvement in operating performance and liquidity.
The ratings could be downgraded if the company defaults or if the
prospects for recovery further decline.
Wellpath Holdings, Inc. ("Wellpath"), headquartered in Nashville,
Tennessee, provides medical, dental, and behavioral health services
to patients in local detention facilities, federal and state
prisons and behavioral healthcare facilities. Wellpath is privately
owned by H.I.G. Capital. The company generated revenues of
approximately $2.4 billion for the twelve months ended June 30,
2024.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
WORKHORSE GROUP: Fails to Meet Nasdaq Minimum Bid Price Requirement
-------------------------------------------------------------------
Workhorse Group Inc. disclosed in a Form 8-K Report filed with the
U.S. Securities and Exchange Commission that the Company received a
written notice from the Listing Qualifications Department of Nasdaq
Stock Market indicating that, because the closing bid price for the
Company's common stock has fallen below $1.00 per share for 30
consecutive trading days prior to October 2, 2024, the Company was
no longer in compliance with the $1.00 Minimum Bid Price
requirement set forth in Nasdaq Listing Rule 5550(a)(2) for
continued listing on The Nasdaq Capital Market.
The Notice has no immediate effect on the listing of the Company's
common stock on The Nasdaq Capital Market and does not affect the
Company's reporting requirements with the Securities and Exchange
Commission. Pursuant to Nasdaq Marketplace Rule 5810(c)(3)(A), the
Company has been provided with a compliance period of 180 calendar
days, or until March 31, 2025, to regain compliance with the Bid
Price Requirement. To regain compliance with the Bid Price
Requirement, the closing bid price of the Company's common stock
must meet or exceed $1.00 per share for a minimum of 10 consecutive
trading days prior to March 31, 2025.
If the Company does not regain compliance by March 31, 2025, the
Company may be eligible for an additional grace period. To qualify,
the Company must, as of the final day of the Initial Compliance
Period, meet the applicable market value of publicly held shares
requirement for continued listing and all other applicable
standards for initial listing on the Capital Market (except the Bid
Price Requirement) based on the Company's most recent public
filings and market information and must notify Nasdaq of its intent
to cure this deficiency. If the Company meets these requirements,
the Nasdaq staff would be expected to grant an additional 180
calendar days for the Company to regain compliance with Bid Price
Requirement.
The Company is currently evaluating various courses of action to
regain compliance with the Bid Price Requirement. There can be no
assurance that the Company will regain compliance with the Bid
Price Requirement during the 180-day compliance period ending March
31, 2025, secure an extension of the compliance period beyond March
31, 2025 or maintain compliance with any other Nasdaq listing
requirement.
About Workhorse Group
Workhorse Group Inc. -- http://www.workhorse.com-- is a technology
company focused on providing electric vehicles to the last-mile
delivery sector. As an American original equipment manufacturer,
the Company designs and builds high-performance, battery-electric
trucks. Workhorse also develops cloud-based, real-time telematics
performance monitoring systems that are fully integrated with its
vehicles and enable fleet operators to optimize energy and route
efficiency. All Workhorse vehicles are designed to make the
movement of people and goods more efficient and less harmful to the
environment.
Cincinnati, Ohio-based Grant Thornton LLP, the Company's auditor
since 2018, issued a "going concern" qualification in its report
dated March 12, 2024, citing that the Company incurred a net loss
of $123.9 million and used $123.0 million of cash in operating
activities during the year ended December 31, 2023. As of that
date, the Company had total working capital of $40.5 million,
including $25.8 million of cash and cash equivalents, and an
accumulated deficit of $751.6 million. These conditions, along with
other matters, raise substantial doubt about the Company's ability
to continue as a going concern.
As of June 30, 2024, Workhorse Group had $105.4 million in total
assets, $46.7 million in total liabilities, and $58.6 million in
total stockholders' equity.
WORKSPORT LTD: Begins Direct Sales to U.S. Government Agencies
--------------------------------------------------------------
Worksport Ltd., a U.S.-based manufacturer and innovator of hybrid
and clean energy solutions for the light truck, overlanding, and
global consumer goods sectors announced the expansion of its sales
to Federal Government Agencies. Worksport has established a
business relationship with a major U.S. government entity,
supplying its flagship Made-in-USA AL3 Tonneau Covers for regular
fleet purchases.
This strategic partnership positions Worksport to expand its reach
within the government fleet sector, which includes an estimated 2
million pickup trucks nationwide. Additionally, Worksport plans to
explore opportunities to introduce its forthcoming clean-tech
nano-grid products to these newly established relationships.
Government Outreach Lead by Influential Board of Directors
Worksport's strategic approach to government sales will be
spearheaded by Ambassador Ned Siegel (Ret.), a key member of
Worksport's Board of Directors and former U.S. Ambassador.
Ambassador Siegel will be directly involved in outreach to federal
and state agencies, leveraging his extensive network to build
strong government relationships. This outreach will not only focus
on Worksport's current tonneau cover products but also on pitching
cutting-edge solutions like the SOLIS Solar Tonneau Cover and the
COR Portable Energy System.
"Securing these early government sales is a promising first step,"
said Steven Rossi, CEO of Worksport. "We are now in a unique
position to expand our government sales pipeline and demonstrate
the value of our Made-in-America tonneau covers and other solutions
to federal and state agencies. We expect these relationships to
grow, becoming a recurrent source of revenue as we expand our
offerings and reach."
Worksport anticipates that these early sales, while not immediately
impacting the Company's overall revenue forecasts, represent a
crucial entry point into a long-term government sales program.
According to the Federal Highway Administration (FHWA), there may
be over 2 million pickup trucks in government and state-owned
fleets, presenting a vast, addressable market for Worksport's
products. Government agencies with the largest fleets of light
trucks include the Departments of Natural Resources, Agriculture,
and Transportation, along with Federal, State and Local Law
Enforcement Agencies.
"Our focus on government fleets isn't just about selling our
current products," continued Rossi. "With the upcoming launch of
our clean-tech solutions, including the SOLIS and COR systems, we
see significant growth potential as government fleets increasingly
move toward sustainability and energy efficiency."
SOLIS & COR: Game-Changing Clean Energy Solutions
For government fleets the SOLIS solar tonneau cover and the COR
portable energy system present unique opportunities for government
fleet managers seeking to reduce energy costs and carbon
footprints. With its ability to generate clean solar energy and
provide portable power on the go, the SOLIS and COR systems
together form a unique nano-grid that could power emergency sites,
power tools, and appliances. Future iterations of the COR system
are also expected to function as a range extender for EVs.
Future Objectives
Worksport's Government Sales Initiative has commenced by showcasing
the unique durability, performance, and value of its premium
tonneau covers. Leveraging Ambassador Siegel's leadership and
initial sales to a key U.S. government entity, Worksport plans to
use this success to fuel additional future growth.
The Company will then expand its clean-tech solutions to government
agencies as well, targeting fleet contracts through agency
decision-makers, nationwide, building toward a scalable, long-term,
recurring revenue stream.
About Worksport Ltd.
West Seneca, N.Y.-based Worksport Ltd., through its subsidiaries,
designs, develops, manufactures, and owns intellectual property on
a portfolio of tonneau cover, solar integration, portable power
station, and NP (Non-Parasitic), Hydrogen-based green energy
products and solutions for the automotive aftermarket accessories,
power storage, residential heating, and electric vehicle-charging
industries.
Going Concern
The Company cautioned in its Form 10-Q Report for the quarter ended
March 31, 2024, that there is substantial doubt about its ability
to continue as a going concern. As of March 31, 2024, the Company
had $3,536,980 in cash and cash equivalents. The Company has
generated only limited revenues and has relied primarily upon
capital generated from public and private offerings of its
securities. Since the Company's acquisition of Worksport in fiscal
year 2014, it has never generated a profit.
As of June 30, 2024, Worksport had $27,185,498 in total assets,
$8,039,405 in total liabilities, and $19,146,093 in total
stockholders' equity.
WYNN RESORTS: Subsidiaries Extend Maturity of UOBL Loan to 2027
---------------------------------------------------------------
Wynn Resorts Limited disclosed in a Form 8-K Report filed with the
U.S. Securities and Exchange Commission that Wynn/CA Plaza Property
Owner, LLC and Wynn/CA Property Owner, LLC entered into a third
amendment to their existing term loan agreement with United
Overseas Bank Limited, New York Agency, as administrative agent,
and the lenders party thereto. The Term Loan Agreement provides for
a term loan in an aggregate principal amount of $615 million. The
Borrowers own approximately 160,000 square feet of retail space at
Wynn Las Vegas, and each of the Borrowers is a 50.1%-owned
subsidiary of Wynn Resorts, Limited, with the remaining 49.9%
equity interest owned by Crown Acquisitions Inc., an unrelated
third party.
The Third Amendment amends the Term Loan Agreement to, among other
things:
(i) extend the scheduled maturity date of the term loan to
July 24, 2027;
(ii) provide for an interest rate on the term loan equal to One
Month Term SOFR plus a spread of 215 basis points; and
(iii) require that the Borrowers meet a specified maximum loan
to value ratio annually (which, if not met, triggers a mandatory
excess cash sweep until such ratio has been achieved) as well as
certain specified minimum debt yields.
In connection with, and as provided under, the Third Amendment, the
Borrowers:
(a) made a principal prepayment of the term loan in the amount
of $15.0 million, and
(b) to mitigate interest rate risk, entered into an interest
rate swap agreement maturing in February 2027, which effectively
caps the variable component of the interest rate on the term loan
at 3.385% through such date.
The Extended Term Loan Agreement contains customary representation
and warranties, cash sweeps, events of default and such other
affirmative and negative covenants for debt facilities of this
type, including, among other things, limitations on leasing
matters, incurrence of indebtedness, distributions and transactions
with affiliates. Borrowings under the Extended Term Loan Agreement
are secured by substantially all of the assets of the Borrowers.
About Wynn Resorts Ltd.
Headquartered in Las Vegas, Nevada, Wynn Resorts, Limited owns and
operates hotels and casino resorts. As of Dec. 31, 2023, Wynn
Resorts had $14 billion in total assets, $15.1 billion in total
liabilities, and $1.1 billion in total stockholders' deficit.
As of June 30, 2024, Wynn Resorts Limited had $13.3 billion in
total assets, $14.2 billion in total liabilities, and $902 million
in total deficit.
* * *
Egan-Jones Ratings Company, on January 31, 2024, maintained its
'CCC+' foreign currency and local currency senior unsecured ratings
on debt issued by Wynn Resorts, Limited.
YIELD10 BIOSCIENCE: Amends Employment Contract to Cut Severance Pay
-------------------------------------------------------------------
Yield10 Bioscience, Inc. disclosed in a Form 8-K Report filed with
the U.S. Securities and Exchange Commission that action was taken
by the Compensation Committee of the Company's Board of Directors
in consultation with its executive officers to amend their
individual employment agreements in order to reduce the Company's
severance payment obligations. On September 30, 2024, the Company
entered into new amendments to the employment agreements with each
of:
* Dr. Oliver P. Peoples - Chief Executive Officer,
* Lynne Brum - Vice President of Planning and Corporate
Communications,
* Dr. Kristi Snell - Chief Science Officer, and
* Charles Haaser - Chief Accounting Officer.
The previously amended Executive employment agreements, each dated
as of March 28, 2017, had been amended previously on December 6,
2023.
Notwithstanding anything in the Agreements to the contrary, in
recognition of their significant efforts toward the successful
completion of the Asset Purchase Agreement between the Company and
Purchaser, and the agreement of each Executive to defer
compensation under their respective Agreements since the date of
the First Amendments, each of the Executives shall be entitled to
payment of a cash severance. The severances will be determined by
the Compensation Committee within a range of 40% - 60% of the
amount to which each Executive would have been entitled to pursuant
to Section 5.2 of their individual Agreements relating to a
resignation for Good Reason. The severances will be calculated
using the Executive's base salary as it was in effect immediately
prior to the First Amendment). Payment of the severances shall be
subject to available funds, promptly following the Closing, and
regardless of whether the Executive remains an employee of the
Company at the time of such Closing. Further, with respect to Dr.
Snell, the notice period set forth in Section 4.1 of her Agreement
is hereby waived, provided that Dr. Snell does not resign her
employment with the Company prior to October 31, 2024, or such
earlier date as approved by the Company. With respect to Dr.
Peoples, the amount to be paid shall not include any amount for his
target bonus, as defined in his previously amended Agreement. In
addition, subject to the each Executives' elections, payment of
COBRA premiums to maintain medical and dental benefits in effect at
the time of the Closing shall be made until the earlier of (a) 6
months following the Closing (12 months in the case of Dr. Peoples)
and (b) the date such Executive becomes insured under a medical
insurance plan providing similar benefits to that of the Company's
plan.
About Yield10
Yield10 Bioscience, Inc. -- http://www.yield10bio.com/-- is an
agricultural bioscience company focused on the large-scale
production of low carbon sustainable products from processing
Camelina seed using the oilseed Camelina sativa as a platform crop.
The Company is pursuing Camelina seed oil products for two market
opportunities and value chains. Each product has its own set of
scale requirements, value proposition, and challenges. The first
product is seed oil produced by Camelina, which has been
genetically engineered to enable production of high levels of the
omega-3 fatty acids eicosapentanoic acid (EPA) and docosahexanoic
acid (DHA). The second product is Camelina seed oil for use as a
low-carbon intensity feedstock oil for biofuels, including
biodiesel, renewable diesel, and sustainable aviation fuel.
West Palm Beach, Florida-based Berkowitz Pollack Brant
Advisors+CPAs, the Company's auditor since 2024, issued a "going
concern" qualification in its report dated April 1, 2024, citing
that the Company has suffered recurring losses from operations and
has a net capital deficiency that raise substantial doubt about its
ability to continue as a going concern.
Yield10 Bioscience reported a net loss of $14.5 million for the
year ended December 31, 2023, compared to a net loss of $13.6
million for the year ended December 31, 2022. As of June 30, 2024,
Yield10 Bioscience had $2.97 million in total assets, $9.21 million
in total liabilities, and $6.24 million in total shareholders'
deficit.
YIELD10 BIOSCIENCE: Inks $5-Mil. Asset Purchase Deal With Nuseed
----------------------------------------------------------------
Yield10 Bioscience, Inc. disclosed in a Form 8-K Report filed with
the U.S. Securities and Exchange Commission that the Company, its
wholly-owned subsidiary Yield10 Oilseeds, Inc., and Nuseed
Nutritional US Inc., entered into an Asset Purchase Agreement
pursuant to which Nuseed will acquire substantially all of the
Company's assets.
Pursuant to the Asset Purchase Agreement, Purchaser will pay to the
Company an aggregate purchase price of up to $5,000,000 in cash,
which amount will be reduced by amounts owed under the secured
promissory note issued by the Company to the Purchaser that remain
outstanding on the date of closing of the Asset Sale and the amount
of Assumed Payables assumed by the Purchaser at the Closing. As of
the date hereof, the amounts owed under the promissory note is
$1,850,000.
The Asset Purchase Agreement, the Asset Sale and the other
transactions contemplated by the Asset Purchase Agreement have been
unanimously approved by the board of directors of the Company. The
Asset Purchase Agreement, the Asset Sale and other transactions
contemplated by the Asset Purchase Agreement must also be approved
by the Company's stockholders, as a condition to the Closing.
The Asset Purchase Agreement contains customary representations,
warranties, conditions and covenants, including covenants:
(i) concerning the conduct of business by the Company prior to
the Closing and
(ii) prohibiting the Company and its representatives from
soliciting, initiating or knowingly inducing, encouraging or
facilitating any competing acquisition proposal, subject to certain
limited exceptions.
In addition, the Company and Purchaser have agreed to use their
best efforts to consummate the Asset Sale and other transactions
contemplated by the Asset Purchase Agreement.
The Company has filed a preliminary proxy statement and will
prepare and file a definitive proxy statement with the U.S.
Securities and Exchange Commission and, subject to certain
exceptions, the Board will recommend that the Asset Purchase
Agreement be adopted by the Company's stockholders at a special
meeting of the Company's stockholders as soon as possible. However,
subject to the satisfaction of certain terms and conditions, the
Company and the Board, as applicable, are permitted to take certain
actions which may, as more fully described in the Asset Purchase
Agreement, include changing the Board Recommendation as a result of
an intervening event if, and among other things, the Board has
concluded in good faith after consultation with its financial
advisors and outside legal counsel that the failure to take such
action would cause the Board to be in breach of its fiduciary
duties to the Company's stockholders under applicable law.
Each party's obligation to consummate the Asset Sale is also
conditioned upon certain other customary closing conditions,
including the accuracy of the other party's representations and
warranties as of the Closing, subject, in certain instances, to
certain materiality and other thresholds, the performance by the
other party of its obligations and covenants under the Asset
Purchase Agreement in all material respects, obtaining the
requisite stockholder vote, the delivery of certain related
ancillary documents by the other party and the absence of any
injunction or other legal prohibitions preventing consummation of
the Asset Sale. The Company has also agreed to indemnify Purchaser
from and against any losses due to breaches of the Company's
representations, warranties and covenants contained in the Asset
Purchase Agreement and certain other liabilities.
The Asset Purchase Agreement contains certain customary termination
rights in favor of each of the Company and Purchaser, including
Purchaser's right to terminate the Asset Purchase Agreement if the
Board changes the Board Recommendation. In addition, subject to
customary exceptions, the Asset Purchase Agreement may be
terminated by either party if the Closing has not occurred by
December 31, 2024, subject to extension in certain specified
circumstances. In connection with a termination of the Asset
Purchase Agreement under specified circumstances, including due to
a change in the Board Recommendation, the Company will be required
to pay Purchaser a fee of $120,000.
The Asset Purchase Agreement has been included as an annex to the
preliminary proxy statement for the special meeting solely to
provide investors with information regarding its terms. It is not
intended to be a source of financial, business or operational
information about the Company. The representations, warranties and
covenants contained in the Asset Purchase Agreement were made only
for the purposes of the Asset Purchase Agreement as of the dates
specified therein and solely for the benefit of the parties to the
Asset Purchase Agreement. In addition, the representations,
warranties and covenants contained in the Asset Purchase Agreement
may be subject to qualifications and limitations agreed upon by the
parties in connection with negotiating the terms of the Asset
Purchase Agreement, including the Company's representations,
warranties and covenants being qualified by confidential disclosure
schedules made for the purpose of allocating contractual risk
amongst the parties as opposed to establishing such matters as
facts, and may further be subject to certain standards of
materiality applicable to the parties that differ from those
applicable to investors. As a result, investors should not rely on
the representations, warranties and covenants included in the Asset
Purchase Agreement, or any descriptions thereof, as
characterizations of the actual state of facts or condition of the
Company and its business. Moreover, information concerning the
subject matter of the representations and warranties may change
after the date of the Asset Purchase Agreement, which subsequent
information may or may not be fully reflected in public
disclosures.
In connection with the approval of the Asset Purchase Agreement,
the Asset Sale and the other transactions contemplated by the Asset
Purchase Agreement, the Board has approved the liquidation and
dissolution of the Company, to take place following the completion
of the Asset Sale. The Dissolution will occur pursuant to a Plan of
Dissolution.
Based on the Company's current cash and cash equivalents of
approximately $1,160,000 as of September 20, 2024, and a review of
the Company's estimated operating expenses and future estimated
liabilities, including reasonable provision for expenses of
liquidation and potential, contingent or unknown liabilities as
required by Delaware law, as of October 3, 2024, if the Asset Sale
is consummated, the Company currently estimates that the aggregate
amount of an initial liquidating distribution to its stockholders
will be between $0.14 and $0.92 per share of common stock (based on
665,789 shares of common stock outstanding as of September 20,
2024). If the Asset Sale Proposal is not consummated, the Company
does not foresee any funds being available for distribution to its
stockholders.
The Company intends to make this initial distribution as soon as
practicable following the filing of a certificate of dissolution
with the Delaware Secretary of State as creditor claims and
contingent liabilities are paid or settled; however, the Company is
unable to predict the precise amount or timing of the initial
distribution or of any additional liquidating distributions
following the initial liquidating distribution. The timing and
amount of the initial distribution and any such additional
liquidating distributions will depend upon the actual expenses
incurred, the timing of the resolution of matters for which the
Company has established the contingency reserve, the amount to be
paid in satisfaction of such contingencies, obligations and
provisions during the liquidation and winding-up process, as well
as its ability to convert its remaining assets to cash. Any
liquidating distributions from the Company will be made to its
stockholders according to their holdings of common stock as of the
date the Company files a certificate of dissolution, which shall be
the date on which the Company closes its stock transfer books and
discontinues recording transfers of its common stock except for
transfers by will, intestate succession or operation of law.
The Asset Purchase Agreement, the Asset Sale, and the Dissolution
are subject to the approval of the Company's stockholders. The
Company has filed a preliminary proxy statement and intends to file
a definitive proxy statement with the SEC with respect to a special
meeting of the Company's stockholders, at which meeting the
Company's stockholders will be asked to, among other items,
consider and approve the Asset Purchase Agreement, the Asset Sale,
and the Dissolution pursuant to the Plan of Dissolution.
About Yield10
Yield10 Bioscience, Inc. -- http://www.yield10bio.com/-- is an
agricultural bioscience company focused on the large-scale
production of low carbon sustainable products from processing
Camelina seed using the oilseed Camelina sativa as a platform crop.
The Company is pursuing Camelina seed oil products for two market
opportunities and value chains. Each product has its own set of
scale requirements, value proposition, and challenges. The first
product is seed oil produced by Camelina, which has been
genetically engineered to enable production of high levels of the
omega-3 fatty acids eicosapentanoic acid (EPA) and docosahexanoic
acid (DHA). The second product is Camelina seed oil for use as a
low-carbon intensity feedstock oil for biofuels, including
biodiesel, renewable diesel, and sustainable aviation fuel.
West Palm Beach, Florida-based Berkowitz Pollack Brant
Advisors+CPAs, the Company's auditor since 2024, issued a "going
concern" qualification in its report dated April 1, 2024, citing
that the Company has suffered recurring losses from operations and
has a net capital deficiency that raise substantial doubt about its
ability to continue as a going concern.
Yield10 Bioscience reported a net loss of $14.5 million for the
year ended December 31, 2023, compared to a net loss of $13.6
million for the year ended December 31, 2022. As of June 30, 2024,
Yield10 Bioscience had $2.97 million in total assets, $9.21 million
in total liabilities, and $6.24 million in total shareholders'
deficit.
[^] BOOK REVIEW: The Luckiest Guy in the World
----------------------------------------------
Author: Boone Pickens
Publisher: Beard Books
Paperback: US$34.95
Review by Gail Owens Hoelscher
Buy a copy for yourself and one for a colleague on-line at:
http://www.beardbooks.com/beardbooks/the_luckiest_guy_in_the_world.html
"This is the story of a man who turned a $2,500 investment into
America's largest independent oil company in thirty years and along
the way discovered that something is terribly wrong with corporate
America. Mesa Petroleum is the company, and I'm the man." Thus
begins the autobiography of Boone Pickens, who prefers to be
referred to without his first initial, "T."
Mr. Pickens' autobiography was originally published in 1987, at the
end of the rollercoaster years when he was one of the most famous
(or infamous, depending on your point of view) and most-feared
corporate raiders during a decade known for corporate raiding. For
the 2000 Beard Books edition, Pickens wrote an additional five
chapters about the subsequent, equally tumultuous, 13 years, during
which time he suffered corporate raiders of his own, recapitalized,
and retired, only to see his beloved company merge with Pioneer.
One of his few laments is being remembered mainly for the
high-profile years, rather than for the company he built from
virtually nothing.
Of the takeover attempts, he says:
"I saw undervalued assets in the public marketplace. My game plan
with Gul, Phillips, and Unocal wasn't to take on Big Oil. Hell,
that wasn't my role. My role was to make money for the stockholders
of Mesa. I just saw that Big Oil's management had done a lousy job
for their stockholders."
He would prefer to be known as a champion of the shareholder rights
movement, which prompted big corporations to become more responsive
to the needs and demands of their stockholders. He founded the
United Shareholders Association, a group that successfully lobbied
for changes in corporate governance. In a memorable interview in
the May/June 1986 Harvard Business Review, Pickens said, "Chief
executives, who themselves own few shares of their companies, have
no more feeling for the average stockholder than they do for
baboons in Africa."
Boone Pickens was born in 1928 in Holdenville, Oklahoma. His
grandfather was Methodist missionary to the Indians there; his
father was a lawyer and small player in the oil business. People in
Holdenville worked hard and used such expressions as "Root hog or
die," meaning "Get in and compete or fail."
The family later moved to Amarillo, Texas, where Pickens went to
Texas A&M for one year, but graduated from Oklahoma State
University in 1951 with a degree in geology. He worked at Phillips
Petroleum for three years, and then, despite growing family
obligations, struck out on his own. His wife's uncle told him,
"Boone, you don't have a chance. You don't know anything."
This book is a wonderful read. Pickens pulls no punches, and is as
hard on himself as anyone else. He talks about proxy fights,
Texas-Oklahoma football games, his three marriages, poker, takeover
strategies, and unfair duck hunting practices, all in the same easy
tone. You feel like he's sitting right there in the room with
you.
Pickens ends the introduction to this story with this:
"How I got from a little town in Eastern Oklahoma to the towers of
Wall Street is an exciting, unlikely, sometimes painful story. And,
if you're young and restless, I'm hoping you'll make a journey
similar to mine."
Root hog or die!
Thomas Boone Pickens Jr. -- https://boonepickens.com/ -- was an
American business magnate and financier. Among his lengthy
accolades, Time magazine has identified him one of it 100 most
influential people, Financial World named him CEO of the Decade in
1989 and Oil and Gas Investor identified him as one of the "100
Most Influential People of the Petroleum Century." He was born in
May 1928. He died September 11, 2019.
[^] Hilco's Sprayregen Named 2024 Harvey R. Miller Awardee
----------------------------------------------------------
James HM "Jamie" Sprayregen is this year's recipient of the Harvey
R. Miller Outstanding Achievement Award for Service to the
Restructuring Industry.
Mr. Sprayregen currently serves as Vice Chairman at Hilco Global.
As a key advisor and strategic growth partner to CEO Jeffrey
Hecktman, he shares oversight of the firm's expanding financial
services platform with other executive leaders. Hilco acts as a
principal, lender and advisor.
Mr. Sprayregen is a highly regarded dealmaker and thought leader in
restructuring, corporate reorganization, and M&A. He founded
Kirkland and Ellis' worldwide Restructuring Group, building it from
inception in 1990 to become the premier restructuring group
globally. As a partner at Kirkland & Ellis, he served on the law
firm's worldwide management committee from 2003-2006 and 2009-2019.
He joined Goldman Sachs in 2006 as co-head of its Restructuring
Group, advising clients in distressed situations, and rejoined
Kirkland three years later.
Described as "a legend in the bankruptcy space" and "one of the
United States' most sought-after bankruptcy attorneys," Mr.
Sprayregen has led some of the most complex Chapter 11 filings in
recent history.
Mr. Sprayregen received his J.D., cum laude, from the University of
Illinois College of Law and his B.A., cum laude, from the
University of Michigan.
Each year, Beard Group, Inc. presents the Harvey R. Miller
Outstanding Achievement Award for Service to the Restructuring
Industry to a deserving individual in the corporate restructuring
community. Beard Group, Inc.'s editorial team selects the
individual from a lengthy list of candidates known for reshaping
the industry.
Mr. Miller was the first to receive the award in 2001. Each year,
Beard Group's editorial team seeks to honor a well-known industry
leader with long ties to the restructuring community when
presenting the award at the annual Distressed Investing
Conference.
Mr. Miller was a renowned bankruptcy attorney and partner at the
firm of Weil, Gotshal, & Manges. Mr. Miller joined the firm in
1969. Mr. Miller is often credited with making the bankruptcy
practice and was involved in major cases throughout his career,
including, Texaco, WorldCom, Enron, Eastern Airlines, Continental
Airlines and R. H. Macy. Mr. Miller taught at major institutions,
including his alma mater, Columbia Law School and received many
accolades during his distinguished career.
Mr. Miller passed away in 2015. Beard Group, Inc. continues the
tradition of honoring the legacy of Harvey Miller with the
presentation of this award named in his honor.
Victor Khosla of Strategic Value Partners was the recipient of this
Award in 2023.
Please join us in congratulating Mr. Sprayregen at the 31st
Distressed Investing Conference to be held in-person Wed., Dec. 4,
2024, at The Harmonie Club, New York City. Registration is now
open. Access Early Bird discounted pricing, which has been
extended until Oct. 1st.
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:
* Katten Muchin Rosenman LLP; and
* Kobre & Kim
The Supporting Sponsors:
* C Street Advisory Group;
* Development Specialists, Inc.;
* RJReuter; and
* SSG Capital Advisors
This year's Media Partners:
* BankruptcyData;
* CreditSights;
* Debtwire;
* Pari Passu;
* Reorg; and
* WSJ Pro Bankruptcy
This year's Knowledge Partner:
* Creditor Rights Coalition
Kindly visit https://www.distressedinvestingconference.com/ for
more information.
Contact Will Etchison, ​Conference Producer, at Tel: 305-707-7493
or will@beardgroup.com for sponsorship opportunities.
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
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assets. A company may establish reserves on its balance sheet for
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equity securities trade in public market are determined by more
than a balance sheet solvency test.
On Thursdays, the TCR delivers a list of recently filed
Chapter 11 cases involving less than $1,000,000 in assets and
liabilities delivered to nation's bankruptcy courts. The list
includes links to freely downloadable images of these small-dollar
petitions in Acrobat PDF format.
Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.
Monthly Operating Reports are summarized in every Saturday edition
of the TCR.
The Sunday TCR delivers securitization rating news from the week
then-ending.
TCR subscribers have free access to our on-line news archive.
Point your Web browser to http://TCRresources.bankrupt.com/and use
the e-mail address to which your TCR is delivered to login.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
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Copyright 2024. All rights reserved. ISSN: 1520-9474.
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*** End of Transmission ***