/raid1/www/Hosts/bankrupt/TCR_Public/241025.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 25, 2024, Vol. 28, No. 298
Headlines
220 FTL-LTPJ: Case Summary & Two Unsecured Creditors
ACCURIDE CORP: U.S. Trustee Appoints Creditors' Committee
ADVANTAGE WEST: Case Summary & Seven Unsecured Creditors
ALTA VISTA: No Decline in Resident Care, 3rd PCO Report Says
AMERICAN TIRE: Enters Ch. 11 for Restructuring Support Agreement
AMERICAN TIRE: Files Chapter 11 for 2nd Time
APEX COMMERCIAL: Gets Interim OK to Use Cash Collateral
AQUARIAN HOLDINGS: S&P Rates New Senior Unsecured Notes 'BB+'
BELA FLOR: Court OKs Harrisonville Property Sale to Cindy James
BIO-KEY INTL: Registers 2.06-Mil. Shares for Resale by Armistice
CAMBRIDGE FALLS: U.S. Trustee Appoints Margaret Barajas as PCO
CAMBRIDGE RIVERVIEW: U.S. Trustee Appoints Margaret Barajas as PCO
CEMTREX INC: Forsakringsaktiebolaget Reduces Stake to 0.00069%
CHAMPION HEALTHCARE: Gets OK to Use Cash Collateral Until Nov. 20
CIBUS INC: CFO Reports Ownership of 58,344 Class A Common Shares
CONNEXA SPORTS: Files Preliminary S-1 for 2.2-Mil. Share Offering
CPC ERICSSON: Voluntary Chapter 11 Case Summary
CRYSTAL CITY ISD: Fitch Lowers IDR to 'BB+', On Watch Negative
CULLOO ENTERTAINMENT: Holly Smith Miller Named Subchapter V Trustee
DANIEL J. WALLACE: No Patient Complaints, 2nd PCO Report Says
DCLI BIDCO: Fitch Assigns 'BB-' LongTerm IDR, Outlook Stable
DIOCESE OF BURLINGTON: U.S. Trustee Appoints Creditors' Committee
DISTRIBUIDORA MI: Gets Interim OK to Use Cash Collateral
DOGS ARE PEOPLE: Gets Interim OK to Use Cash Collateral
DUERDEN'S APPLIANCE: Seeks Chapter 7 Bankruptcy
E.W. GRADING: To Sell Personal Property via Public Sale
EL DORADO GAS: South Texas Gas Plant Up for Bankruptcy Sale
EMPIRE COMMUNITIES: Fitch Assigns B- Rating on Sr. Unsecured Notes
ENVIVA INC: Common Stock To Be Delisted From NYSE
EXTENDEDFIELDFORCE LLC: Gets Interim OK to Use Cash Collateral
FAYESON INC: Gets Final OK to Use Cash Collateral Until Dec. 7
FLAME NEWCO: S&P Upgrades ICR to 'B-' on Improved Profitability
FORGE FLIGHTWORKS: Glen Watson Named Subchapter V Trustee
FUELL INC: Seeks Chapter 7 Bankruptcy in Wisconsin
GANDY'S TRANSPORT: Gets OK to Use Cash Collateral Until Nov. 25
GEO PARENT: Moody's Withdraws 'B2' CFR Following Debt Repayment
GLORY PROJECT: U.S. Trustee Unable to Appoint Committee
GOLD'S GYM: Recoups $7.85-Mil. from Bankruptcy Estate
GREAT CANADIAN: S&P Rates New Revolving Credit Facility 'B+'
GRIFFIN RESOURCES: Lisa Holder Named Subchapter V Trustee
HECO: S&P Withdraws 'B' Rating on Commercial Paper Program
HUDSON RIVER: S&P Rates New $2.35BB Sr. Secured Term Loan B 'BB-'
INDIVIDUALIZED ABA: Gina Klump Named Subchapter V Trustee
JERICO PICTURES: Aleida Martinez Molina Named Subchapter V Trustee
JMG VENTURES: Gets Final OK to Use Cash Collateral
KND HOSPITALITY: Gets Interim OK to Use Cash Collateral
LEARNINGSEL LLC: Gets Final OK to Use Cash Collateral
LEGACY ENTERPRISES: Joseph Frost Named Subchapter V Trustee
LIVEONE INC: Craig Foster Steps Down from the Board of Directors
MAGNOLIA SENIOR LIVING: No Decline in Resident Care, PCO Reports
MAGNOLIA SENIOR: No Decline in Resident Care, 3rd PCO Report Says
MATTHEW SAND: Bankruptcy Administrator Unable to Appoint Committee
MAVENIR PRIVATE: S&P Cuts ICR to 'CCC-' On Upcoming Debt Maturity
MERCER INT'L: Fitch Assigns B+ LongTerm IDR, Outlook Stable
NANOVIBRONIX INC: Fails to Regain Nasdaq Compliance, Seeks Hearing
NETCAPITAL INC: Files Prelim Prospectus to Resell 865,264 Shares
NOSTRUM LABORATORIES: Court Okays Appointment of Chapter 11 Trustee
NOSTRUM LABORATORIES: U.S. Trustee Appoints Creditors' Committee
NOVA CHEMICALS: S&P Alters Outlook to Stable, Affirms 'BB-' ICR
ORIGINAL HAROLD'S: Edward Burr Named Subchapter V Trustee
PINEAPPLE ENERGY: Jeffrey Conroy Holds 1,555,089 Common Shares
QURATE RETAIL: To Host Q3 2024 Results Conference Call on Nov. 7
RAGE N AXE: Charity Bird Named Subchapter V Trustee
RAIDER CONTRACTING: Gets Final OK to Use Cash Collateral
RED RIVER: U.S. Trustee Appoints Talc Claimants Committee
RUSSEL METALS: S&P Alters Outlook to Positive, Affirms 'BB+' ICR
SC-GA 2018 PARTNERS: Leon Jones Named Subchapter V Trustee
SEAGATE TECHNOLOGY: S&P Alters Outlook to Pos., Affirms 'BB' ICR
SEDALIA AESTHETICS: Case Summary & 20 Largest Unsecured Creditors
SIMMONS UNIVERSITY: S&P Lowers Revenue Bond Rating to 'BB+'
SKC PROPERTIES: Gets OK to Use Cash Collateral Until Nov. 30
SOBR SAFE: Believes to Have Regained Nasdaq Compliance
SOBR SAFE: Completes $8.2 Million Private Placement
SOBR SAFE: L1 Capital Global Holds 9.99% Equity Stake
SOCAL CLIMATE: Gets OK to Use Cash Collateral Until Bankruptcy Exit
SPIRIT AIRLINES: Frontier Airlines Wants to Renew Bid to Buy Co.
STANDARDAERO INC: Fitch Affirms 'BB' LongTerm IDR, Outlook Positive
STEWARD HEALTH: PCO Files Second Supplemental Report
SUPPLY SOURCE: Court Okays Creditor Deal, Chapter 11 Plan
SYNAPSE FINANCIAL: Evolve to Return Funds to Brokerage End Users
TAG FL: U.S. Trustee Unable to Appoint Committee
TALPHERA INC: CMO Shakil Aslam Reports 32,000 Shares, Stock Options
TAYLOR G. WRIGHT: Voluntary Chapter 11 Case Summary
TECHGROUPONE INC: Linda Leali Named Subchapter V Trustee
TELLURIAN INC: Magnetar Financial Ceases to Own Over 5% of Shares
TINY PIECES: Leona Mogavero Named Subchapter V Trustee
TRUE VALUE: Seeks Appointment of Retiree Committee
TRUE VALUE: Wants to Create Retiree Committee to Reduce Benefits
TW MEDICAL: Case Summary & 20 Largest Unsecured Creditors
WHEEL PROS: S&P Discontinues 'D' Issuer Credit Rating
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220 FTL-LTPJ: Case Summary & Two Unsecured Creditors
----------------------------------------------------
Debtor: 220 FTL-LTPJ LLC
600 W Hillsboro Blvd
Ste 300
Deerfield Beach, FL 33441
Case No.: 24-21022
Chapter 11 Petition Date: October 24, 2024
Court: United States Bankruptcy Court
Southern District of Florida
Judge: Hon. Peter D Russin
Debtor's Counsel: Robert A. Stiberman, Esq.
STIBERMAN LAW, P.A.
2601 Hollywood Blvd.
Hollywood, FL 33020
Tel: 954-239-7464
Email: ras@stibermanlaw.com
Estimated Assets: $100,000 to $500,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Irene Marciano as authorized signatory.
A full-text copy of the petition containing, among other items, a
list of the Debtor's two unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/CZOSNGA/220_FTL-LTPJ_LLC__flsbke-24-21022__0001.0.pdf?mcid=tGE4TAMA
ACCURIDE CORP: U.S. Trustee Appoints Creditors' Committee
---------------------------------------------------------
The U.S. Trustee for Region 3 appointed an official committee to
represent unsecured creditors in the Chapter 11 cases of Accuride
Corporation, Inc. and its affiliates.
The committee members are:
1. Matalco USA, LLC
Attn: Derrick Phelps
1 Kenview Blvd, Suite 301
Brampton, ON
Canada L6T 5E6
Phone: 905-793-7086
Ext. 3357
Email: dphelps@gg-inc.ca
2. Pension Benefit Guaranty Corporation (PBGC)
Attn: Michael Strollo and Carl Charlotin
445 12th St., S.W.
Washington, D.C. 20024
Phone: 202-229-4907 / 202-229-6611
Fax: 202-229-6092
Email: stroll.michael@pbgc.gov
charlotin.carl@pbgc.gov
3. Ellwood Aluminum, LLC
Attn: Richard R. Davis
600 Commercial Ave
Ellwood City, PA 16117
Phone: 330-503-1587
Email: rrdavis@elwd.com
4. Hydro Aluminum Metals USA, LLC
Attn: J. Duncan Pitchford
6250 North River Road, Suite 5025
Rosemont, IL 60018
Phone: 872-888-0072
Email: dunacn.pitchford@hydro.com
5. Temium Mexico SA de CV
Attn: Patricio Villavicencio
Av. Universidad 992, Col. Cuauhtemoc
San Nicolas de los Garza, CP 66450
Nuevo Leon, Mexico
Phone: 54-11-4018-1914
Email: pvillavicencio@temium.com.ar
6. Zhumadian CIMC Huajun Casting Co., Ltd.
Attn: c/o Paul Q. Li
13514 Cavanaugh Drive
Rockville, MD 20850
Email: pli@fhlinvestment.com
7. International Union – UAW
Attn: Marshall Widick, Esq.
8000 East Jefferson Ave.
Detroit, MI
Phone: 313-926-5289
Fax: 313-926-5863
Email: mwidick@uaw.net
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 Accuride Corp.
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.
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.
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.
In the new chapter 11 cases, 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.
ADVANTAGE WEST: Case Summary & Seven Unsecured Creditors
--------------------------------------------------------
Debtor: Advantage West Investment Enterprises, Inc.
DBA Advantage West
DBA Advantage West GPS
DBA Advantage West Government Product Solutions
31805 Temecula Parkway #290
Temecula, CA 92592
Case No.: 24-16356
Business Description: The Debtor is a product wholesaler.
Chapter 11 Petition Date: October 24, 2024
Court: United States Bankruptcy Court
Central District of California
Judge: Hon. Wayne E Johnson
Debtor's Counsel: Michael G. Spector, Esq.
LAW OFFICES OF MICHAEL G. SPECTOR
2122 N. Broadway
Santa Ana, CA 92706
Tel: 714-835-3130
Fax: 714-558-7435
Email: mgspector@aol.com
Estimated Assets: $50,000 to $100,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Mitch Anderson as president.
A full-text copy of the petition containing, among other items, a
list of the Debtor's seven unsecured creditors is available for
free at PacerMonitor.com at:
https://www.pacermonitor.com/view/BK6FHEA/Advantage_West_Investment_Enterprises__cacbke-24-16356__0001.0.pdf?mcid=tGE4TAMA
ALTA VISTA: No Decline in Resident Care, 3rd PCO Report Says
------------------------------------------------------------
Blanca Castro, the court-appointed patient care ombudsman, filed
with the U.S. Bankruptcy Court for the Central District of
California her third report regarding the quality of patient care
provided at Alta Vista Gardens, Inc.
The Local Patient Care Ombudsman (LPCO) visited Alta Vista Gardens
on two occasions. During the visit, the LPCO noted no cleaning
supplies or chemicals were left unattended or accessible to
residents.
The ombudsman cited no concerns about staffing. Administration
noted there are no current vacancies and there are high levels of
long-term staff retained. The assigned Ombudsman representative
noted the presence of an ample inventory of food and related
supplies, including an adequate emergency supply.
The ombudsman noted no observable decline in services or the
quality of care of residents of Alta Vista Gardens.
A copy of the ombudsman report is available for free at
https://urlcurt.com/u?l=1IOSHC from PacerMonitor.com.
The ombudsman may be reached at:
Blanca E. Castro
California Department of Aging
2880 Gateway Oaks Drive, Suite 200
Sacramento, CA 95833
Tel: 916-928-2500
Email: blanca.castro@aging.ca.gov
About Alta Vista Gardens
Alta Vista Gardens, Inc., a company in Los Angeles, Calif., filed
its voluntary petition for Chapter 11 protection (Bankr. C.D.
Calif. Case No. 24-11780) on March 7, 2024, listing up to $50,000
in assets and up to $10 million in liabilities. Staci Marmershteyn,
board member, signed the petition.
Judge Deborah J. Saltzman oversees the case.
The Debtor tapped RHM Law, LLP as legal counsel and Michael
Rudnitsky as accountant.
Blanca E. Castro of California Department of Aging was appointed as
patient care ombudsman in the Debtor's case.
AMERICAN TIRE: Enters Ch. 11 for Restructuring Support Agreement
----------------------------------------------------------------
American Tire Distributors, Inc. announced on Oct. 22, 2024, that
it is implementing specific steps to maximize value and strengthen
the Company's financial foundation as it continues supporting
manufacturer partners and customers across its nationwide
distribution network.
The Company has entered into a restructuring support agreement with
certain lenders, including credit funds and accounts managed by
Guggenheim Partners Investment Management, LLC, KKR, Monarch
Alternative Capital LP, Sculptor Capital Management, Inc., and
Silver Point Capital, L.P., representing approximately 90% of the
outstanding obligations under the Company's Term Loan that
contemplates transitioning ownership of the Company through a
competitive sale process. The Company and Ad Hoc Lender Group are
in discussions with respect to an asset purchase agreement that, if
implemented, would transition ownership of the Company to the
members of the Ad Hoc Lender Group. The contemplated transaction
would also eliminate a significant amount of debt and provide
access to new capital, positioning the business as a stronger
partner to manufacturers and customers who rely on ATD to improve
their productivity, profitability, and performance.
To implement the terms of the RSA and conduct a value-maximizing
sale process, the Company and certain of its subsidiaries commenced
voluntary Chapter 11 proceedings in the U.S. Bankruptcy Court for
the District of Delaware. During this process, ATD will continue to
operate across its nationwide distribution network as the
organization remains focused on supporting its manufacturer
partners and providing its customers with tires, wheels, related
tools, and accessories to support their business.
"For nearly 90 years, ATD has continuously evolved to meet the
dynamic shifts and challenges facing the auto aftermarket. Today,
we are taking further steps to position ATD for our next phase as a
stronger distribution partner to our manufacturers and customers as
we return to our roots and hone our core value proposition as a
wholesale distributor, " said Michael Feder, Interim Chief
Executive Officer of ATD and Partner & Managing Director (retired,
on recall) at AP Services, LLC, an affiliate of AlixPartners, LLP.
"We are confident that entering into this process with the support
of the Ad Hoc Lender Group will enable ATD to execute its business
strategy and achieve our long-term objectives."
Mr. Feder continued, "Since being named interim CEO, I have seen
how impactful our business is to the manufacturer partners,
customers, associates, and communities we support, and this process
will serve to reinforce those relationships. Our operations remain
steady and, by moving forward with new owners on stronger financial
footing, I am confident that we will build on our proud history of
leadership and innovation."
Mr. Feder concluded, "Above all else, I want to thank our
associates, whose commitment has been essential to our success.
Their hard work and dedication are the cornerstones to continue
delivering for our customers and manufacturer partners."
To ensure continued business operations, ATD has secured
commitments for $250 million in new financing from the Ad Hoc
Lender Group, as well as access to $1.2 billion in financing from
lenders under the Company's prepetition ABL facility, in the form
of postpetition financing credit facilities. Upon Court approval,
the DIP Financing Facilities, coupled with cash generated from the
Company's ongoing operations, is expected to provide sufficient
liquidity to support the business during the process.
ATD has also filed a number of customary "first-day" motions with
the Court to maintain operations and uphold its go--forward
commitments to its stakeholders, including associates, manufacturer
partners, customers, and vendors. The Company anticipates receiving
approval for these routine motions in short order and expects to
pay manufacturer partners and vendors for goods and services
provided after the filing.
In connection with this process, Jim Bienias, Partner and Managing
Director at AlixPartners, has been appointed Chief Restructuring
Officer of ATD.
Additional information regarding ATD's court-supervised sale
process is available at a dedicated website, www.ATDNext.com. Court
filings and other information related to the proceedings, including
instructions on how to file a proof of claim, are available on a
separate website administered by the Company's claims agent, Donlin
Recano & Company, at www.donlinrecano.com/atd, by calling toll-free
at 1-866-666-1597 (or 1-212-771-1128 for calls originating outside
the U.S. or Canada), or by sending an email to
atdinfo@drc.equiniti.com.
Advisors
Kirkland & Ellis LLP is serving as legal counsel, Moelis and
Company LLC is serving as investment banker, and AlixPartners is
serving as restructuring advisor to ATD.
The Ad Hoc Lender Group is represented by Akin Gump Strauss Hauer &
Feld LLP as legal counsel and Perella Weinberg Partners LP as
financial advisor.
The ABL Lenders are represented by Otterbourg P.C. as legal counsel
and PKF Clear Thinking, LLC as financial advisor.
About American Tire Distributors
American Tire Distributors is one of the largest independent
suppliers of tires to the replacement tire market. It operates more
than 115 distribution centers serving approximately 80,000
customers across the U.S. The company offers an unsurpassed breadth
and depth of inventory, frequent delivery, and value-added services
to tire and automotive service customers. American Tire
Distributors employs approximately 4,500 associates across its
distribution center network.
In 2024, the company has been recognized as: an Environment+Energy
Leader Award recipient; a Stevie(R) Award for Sales & Customer
Service recipient; and a multi-award recipient of The American
Business Awards(R), including a Gold Stevie(R) Award recipient in
the Company of the Year - Automotive & Transport Equipment -- Large
category and a Silver Stevie(R) Award recipient in the Artificial
Intelligence/Machine Learning Solution category.
AMERICAN TIRE: Files Chapter 11 for 2nd Time
--------------------------------------------
Bloomberg News reports that American Tire Distributors Inc., which
previously sought bankruptcy protection in 2018 following the loss
of two major manufacturers, has filed for Chapter 11 again as it
explores a potential sale to reduce its debt.
The company made the voluntary filing in Delaware with $1.9 billion
of debt, according to a court document. It has entered into a
restructuring support agreement with lenders "that contemplates
transitioning ownership of the company through a competitive sale
process," according to a statement.
The lender group, which represents 90% of the company's term loan,
is providing a so-called stalking horse bid, meaning that it’s
subject to better offers, should any materialize, according to the
filing. The cohort includes Guggenheim Partners Investment
Management, KKR & Co. Inc., Monarch Alternative Capital, Sculptor
Capital Management Inc. and Silver Point Capital.
American Tire will continue to operate across its nationwide
network. It has received commitments for $250 million in new
financing from the lender group, and access to $1.2 billion from
lenders under an asset-based lending facility, according to the
release.
The company was thrown into disarray in 2018 when the makers of
Goodyear and Bridgestone tires decided to deal directly with
consumers through their own networks. In what a company executive
at that time described as an almost simultaneous blow, Sears
Holdings Corp.'s auto centers agreed to install tires bought on
Amazon.com.
Profits got a temporary boost after the pandemic, as a sharp
decline in auto sales triggered a surge in demand for used cars and
replacements parts, such as tires. But margins rapidly narrowed and
the company suffered as customers moved toward lower-priced
products, the company’s chief restructuring officer said in a
court filing.
About ATD Corp/American Tire
Headquartered in Huntersville, North Carolina, ATD Corporation and
its subsidiaries -- https://www.atd-us.com -- are distributors of
replacement tires with more than 140 distribution centers and 1,400
delivery vehicles servicing a geographic region covering more than
90 percent of the replacement tire market for passenger vehicles
and light trucks in the United States. ATD offers the broadest
variety of products and value-added services that range from
premium-quality tires and popular custom wheels to business support
services and online platforms that cater to tire retailers and
their potential customers. ATD has its own proprietary
private-label and exclusive tire brands, such as Hercules and
Ironman, to supplement its supply of industry-leading brand-name
tires, including Continental, Michelin, Pirelli, Cooper, Nexen,
Toyo-Nitto, Hankook, Kumho, and Falken among others. The Debtors
and their non-Debtor subsidiaries currently employ approximately
5,500 people in the United States and Canada.
American Tire Distributors Inc. sought relief under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 24-12391). In
its petition, the Debtor reports estimated assets and liabilities
between $1 billion and $10 billion each.
Kirkland & Ellis LLP and Pachulski Stang Ziehl & Jones LLP serve as
bankruptcy counsel to the Debtors. Donlin, Recano & Company, Inc.,
is the claims agent.
APEX COMMERCIAL: Gets Interim OK to Use Cash Collateral
-------------------------------------------------------
Apex Commercial Construction, Inc. received interim approval from
the U.S. Bankruptcy Court for the Eastern District of Wisconsin to
use the cash collateral of Byline Bank.
Byline Bank, a secured creditor, consented to the use of its cash
collateral in the ordinary course of business on condition that it
is provided with adequate protection.
The interim order required Apex to make adequate protection payment
for October in the amount of $30,627.71 to Byline Bank. In
addition, the bank will receive a replacement lien on the company's
assets.
Apex is prohibited from transferring assets outside normal business
activities without approval from the court or from its secured
creditor.
About Apex Commercial Construction
Apex Commercial Construction, Inc., operating under the name Kuehne
Company, is a construction firm involved in various commercial
projects. It provides construction services, likely specializing in
commercial infrastructure and related operations.
A group of creditors filed an involuntary Chapter 7 petition
against Apex Commercial Construction, Inc. (Bankr. E.D. Wis. Case
No. 24-21300) on March 19, 2024. The petitioning creditors are
Wisconsin Laborers Health Fund, Building & Public Works Laborers
Vacation Fund, and Building Trades United Pension Trust Fund.
On July 12, 2024, the case was converted to one under Subchapter V
of Chapter 11. Judge Rachel M. Blise oversees the case.
Krekeler Law, S.C. is the Debtor's bankruptcy counsel.
AQUARIAN HOLDINGS: S&P Rates New Senior Unsecured Notes 'BB+'
-------------------------------------------------------------
S&P Global Ratings assigned its 'BB+' issue-level rating to
Aquarian Holdings group's proposed senior unsecured notes, maturing
2029, issued through its intermediate holding companies--Aquarian
Insurance Holdings LLC, APH Somerset Investor 2 LLC, APH2 Somerset
Investor 2 LLC, and APH3 Somerset Investor 2 LLC. The group intends
to use the proceeds to refinance existing term loans and fund
future growth. Given Aquarian Holdings' control over the strategy
and cash disposition of all entities within the group, S&P views
these notes as liabilities of Aquarian Holdings.
The notes will rank equal in right of payment with all of Aquarian
group's future senior obligations and will be structurally
subordinated to the liabilities of its insurance subsidiaries. S&P
anticipates financial leverage after this issuance will remain less
than 35%, and fixed-charge coverage between 4x-6x over 2024-2026.
Aquarian Holdings group was founded in 2016 and has life and
annuity insurance businesses operating across three key segments:
-- Institutional reinsurance: Includes operating company Somerset
Reinsurance Ltd. (BBB+/Positive/--), an established Bermuda-based
platform offering reinsurance to third-party institutional clients,
and Neptune Re (unrated), an affiliate reinsurance platform.
-- Retail insurance: Includes Investors Heritage Life Insurance
Co. (unrated) and Hudson Insurance (unrated) offering fixed and
fixed-indexed annuities.
-- Insurance services: Includes Via, a third-party administration
platform generating unregulated fee income by servicing the
insurance entities--both affiliated and third-party.
14Somerset, established in 2014, was acquired by the Aquarian group
in December 2022. It generates the majority of earnings and cash
flows in the Aquarian group. S&P said, "Our view of the Aquarian
group's creditworthiness is primarily driven by Somerset's credit
strengths. The company intends to grow its retail insurance segment
to diversify its operations and earnings source. However, given its
growing but small scale, we view the segment as neutral to the
group's competitiveness."
The Aquarian group's competitiveness reflects Somerset's business
strengths and track record of closing of new transactions with
high-profile primary insurers, consistent with its growth strategy.
Somerset has unique solutions for asset-intensive and
interest-sensitive annuity and life blocks. Somerset's announced
deal with Prudential in 2023 diversified its liabilities and
significantly increased its scale. S&P said, "Prospectively, we
expect Somerset to generate 90% of the group's earnings. Concurrent
with the deal's closing in the first quarter of 2024, Aquarian
group infused equity (funded by term loans) into Somerset to
support the deal and future business growth, which improved our
view of the group's financial risks."
S&P said, "We expect the group to maintain capital commensurate
with the 99.99% confidence level. The majority of Aquarian's
investment portfolio is driven by that of Somerset which is
diversified and carries an average credit quality of 'A-'. Aquarian
has access to proprietary investment capabilities through its
affiliate, Aquarian Holdings Investment Management LLC, such as
real estate, special situations and illiquid credit strategies. We
anticipate these investment strategies will enhance investment
yield at Somerset and the Aquarian group over time while still
maintaining high credit quality. If, however, investment
positioning is riskier than anticipated, for example the portfolio
reflects significantly lower credit quality than anticipated or
concentrations of asset allocation exist, this could be a negative
ratings factor.
"Our rating on the senior notes reflects a high likelihood of
regulatory restrictions on payments from the Somerset Reinsurance
Ltd. to Aquarian group, which primarily relies on dividends from
the operating company. We think the Bermuda Monetary Authority
(BMA) could limit dividends to the Aquarian group, given that would
be its main tool to conserve capital at the regulated company, if
needed. This situation also makes the senior unsecured debt (up to
20%) admittable as debt-funded capital."
BELA FLOR: Court OKs Harrisonville Property Sale to Cindy James
---------------------------------------------------------------
SMB Holdings LLC, an affiliate of Bela Flor Nurseries Inc.,
received the green light from the U.S. Bankruptcy Court for the
Northern District of Texas, Fort Worth Division, to sell to Cindy
M. James the Property located at 22200 E. 291st Street,
Harrisonville, MO 64701 for $355,000.
The Court has determined that the Debtor and the buyer have
extensively negotiated the terms and conditions of the sale in good
faith and at arm's-length.
The Court held that the contract constitutes the highest and best
offer for the asset and will provide a greater recovery for the
Debtor's estate that would be provided by any other available
alternative.
The Court found that the Debtor was indebted to OMB Bank in the
aggregate amount of approximately $558,133.85 as of
October 25, 2023.
The Debtors is ordered to sell the Assets free and clear of any and
all Interests in such property, including, without limitation, any
Liens and Claims against the Debtors, their estates, or any of the
Sale Assets.
About Bela Flor Nurseries Inc.
Bela Flor Nurseries, Inc. operates in the horticulture and retail
gardening industry. The company currently grows from seed and
cutting annual flowers, vegetables, bulbs, and floral items for
wholesalers, landscapers and retailers.
Bela Flor Nurseries Inc. and several affiliates filed Chapter 11
petitions (Bankr. N.D. Texas Lead Case No. 23-42469) on Aug. 22,
2023. In the petition signed by its chief restructuring officer,
Mark Shapiro, Bela Flor reported $10 million to $50 million in both
assets and liabilities.
Bela Flor is the operating company and SMB Holdings, LLC is the
primary real estate holding company. MFAF Holdings, LLC and CHIC
Holdings, LLC are wholly owned subsidiaries of SMB Holdings. SMB
Holdings owns several greenhouses in Austin, Texas, Carthage, Mo.,
and Jasper, Mo.; small lots in Henderson, Texas; and two corporate
houses in Harrisonville, Mo. MFAF Holdings holds two parcels of
land in Harrisonville while CHIC Holdings holds parcels of land in
Henderson. On the real property, the Debtors own and operate
several nurseries.
Judge Mark X. Mullin presides over the case.
The Debtors tapped Husch Blackwell, LLP as bankruptcy counsel;
TrueNorth Capital Partners, LLC as financial advisor and investment
banker; and B. Riley Advisory Services as restructuring advisor.
Mark Shapiro of B. Riley serves as chief restructuring officer.
BIO-KEY INTL: Registers 2.06-Mil. Shares for Resale by Armistice
----------------------------------------------------------------
BIO-key International, Inc. filed a preliminary prospectus on Form
S-1 with the U.S. Securities and Exchange Commission relating to
the resale, from time to time of up to 2,061,112 shares of common
stock to be sold by Armistice Capital Master Fund Ltd. consisting
of 1,030,556 shares of common stock issuable upon exercise of the
Series A Warrants, and 1,030,556 shares of common stock issuable
upon exercise of the Series B Warrants.
The prospectus also covers any additional shares of BIO-key
International's common stock that it may issue or that may be
issuable by reason of any stock split, stock dividend or similar
transaction involving our common stock. The selling stockholder may
sell the shares covered by the prospectus through public or private
transactions at prevailing market prices or at privately negotiated
prices. The Company will not receive any proceeds from this
offering. If all warrants exercisable for shares of common stock
offered hereby are exercised, the Company will receive aggregate
gross proceeds of $3,813,057.20.
BIO-key International said, "On September 12, 2024, we entered into
a warrant exercise agreement with the selling stockholder to
exercise certain outstanding warrants to purchase an aggregate of
1,030,556 shares of the Company's common stock originally issued to
the selling stockholder on October 31, 2023, having an original
exercise price of $3.15 per share. The issuance of the shares of
the Company's common stock underlying the Existing Warrants were
registered pursuant to the registration statement on Form S-1 (File
No. 333-275003)."
In consideration for the immediate exercise of the Existing
Warrants, the exercising holder received new unregistered Series A
Warrants to purchase up to an aggregate of 1,030,556 shares of the
Company's common stock and new unregistered Series B warrants to
purchase up to an aggregate of 1,030,556 shares of the Company's
common stock, and the Company also agreed to reduce the exercise
price of the Existing Warrants to $1.85 per share.
The Series A Warrants and Series B Warrants have substantially the
same terms, were immediately exercisable at an exercise price of
$1.85 per share, and will expire five years from the date of
issuance. The Company agreed to file a resale registration
statement covering the resale of the shares of the Company's common
stock issuable upon exercise of the Series A Warrants and Series B
Warrants with the SEC as soon as reasonably practicable (and in any
event within 30 calendar days) after the date of the Warrant
Exercise Agreement, and to use commercially reasonable efforts to
have such resale registration statement declared effective by the
SEC within 60 calendar days following the date of the Warrant
Exercise Agreement (or within 90 calendar days following the date
of the Warrant Exercise Agreement in case of a "full review" of
such registration statement by the SEC). The Series A Warrants and
Series B Warrants each include a beneficial ownership limitation
that prevents the investor from owning more than 4.99% of the
Company's outstanding common stock at any time.
The gross proceeds to the Company from the exercise of the Existing
Warrants was approximately $1.9 million, prior to deducting
placement agent fees and estimated offering expenses. The closing
of the offering occurred on September 13, 2024. The Company intends
to use the net proceeds for working capital and general corporate
purposes, including repayment of a portion of the Company's
outstanding secured note.
USE OF
PROCEEDS
The selling stockholder will receive all proceeds from the sale of
the shares of common stock offered hereby. BIO-key will not receive
any proceeds from the sale of common stock by the selling
stockholder.
The Company will, however, receive cash proceeds equal to the
exercise price of the warrants. Accordingly, it may receive
aggregate gross proceeds of up to $3,813,057.20 assuming that the
Series A Warrants and Series B Warrants are each exercised in full
at an exercise price of $1.85 per share. "We expect to use any
proceeds received by us from the exercise of the warrants for
working capital purposes and general corporate purposes, including
repayment of a portion of the Company's outstanding secured note."
"We will bear all costs, expenses and fees in connection with the
registration of the shares, including, without limitation, all
registration and filing fees and fees and expenses of our counsel
and our accountants."
PLAN OF DISTRIBUTION
BIO-key is registering 2,061,112 shares of its common stock for
possible sale by the selling stockholder. The selling stockholder
will act independently of us in making decisions with respect to
the timing, manner and size of each sale. The selling stockholder
may, from time to time, sell any or all of its shares of common
stock on the Nasdaq Capital Market or any other stock exchange,
market or trading facility on which the shares are traded or in
private transactions. These sales may be at fixed or negotiated
prices. The selling stockholder may use any one or more of the
following methods when selling shares:
* ordinary brokerage transactions and transactions in which
the broker-dealer solicits purchasers;
* block trades in which the broker-dealer will attempt to sell
the shares as agent but may position and resell a portion of the
block as principal to facilitate the transaction;
* purchases by a broker-dealer as principal and resale by the
broker-dealer for its account;
* an exchange distribution in accordance with the rules of the
Nasdaq Capital Market or any other applicable national securities
exchange;
* privately negotiated transactions;
* short sales;
* through the writing or settlement of options or other
hedging transactions, whether through an options exchange or
otherwise;
* broker-dealers may agree with the selling stockholder to
sell a specified number of such shares at a stipulated price per
share;
* a combination of any such methods of sale; and
* any other method permitted pursuant to applicable law.
The selling stockholder may also sell shares under Rule 144 under
the Securities Act, if available, rather than under the prospectus
supplement and accompanying prospectus.
Broker-dealers engaged by the selling stockholder may arrange for
other brokers-dealers to participate in sales. Broker-dealers may
receive commissions or discounts from the selling stockholder (or,
if any broker-dealer acts as agent for the purchaser of shares,
from the purchaser) in amounts to be negotiated. The selling
stockholder does not expect these commissions and discounts to
exceed what is customary in the types of transactions involved. Any
profits on the resale of shares of common stock by a broker-dealer
acting as principal might be deemed to be underwriting discounts or
commissions under the Securities Act. Discounts, concessions,
commissions and similar selling expenses, if any, attributable to
the sale of shares will be borne by the selling stockholder.
The selling stockholder may agree to indemnify any agent, dealer or
broker-dealer that participates in transactions involving sales of
the shares if liabilities are imposed on that person under the
Securities Act. If BIO-key is notified by the selling stockholder
that any arrangement has been entered into with a broker-dealer for
the sale of shares of common stock, if required, it will file an
amendment to the prospectus. If the selling stockholder uses the
prospectus for any sale of the shares of common stock, the selling
stockholder will be subject to the prospectus delivery requirements
of the Securities Act.
The selling stockholder and any broker-dealer or agents
participating in the distribution of the shares of common stock may
be deemed to be "underwriters" within the meaning of Section 2(11)
of the Securities Act in connection with such sales. In such event,
any commissions paid, or any discounts or concessions allowed to,
any such broker-dealer or agent and any profit on the resale of the
shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act. If the selling
stockholder is an "underwriter" within the meaning of Section 2(11)
of the Securities Act, it will be subject to the applicable
prospectus delivery requirements of the Securities Act and may be
subject to certain statutory liabilities of, including but not
limited to, Sections 11, 12 and 17 of the Securities Act and Rule
10b-5 under the Exchange Act.
The selling stockholder also may transfer the shares of common
stock in other circumstances, in which case the transferees or
other successors in interest will be the selling beneficial owners
for purposes of this prospectus and may sell the shares of common
stock from time to time under this prospectus after BIO-key have
filed an amendment to this prospectus under Rule 424(b)(3) or other
applicable provision of the Securities Act supplementing or
amending the list of selling stockholders to include the
transferees or other successors in interest as selling stockholders
under this prospectus.
BIO-key will bear all costs, expenses and fees in connection with
the registration of the shares.
BIO-key will indemnify the selling stockholder against certain
liabilities, including liabilities under the Securities Act, or the
selling stockholder will be entitled to contribution. It may be
indemnified by the selling stockholder against civil liabilities,
including liabilities under the Securities Act, that may arise from
any written information furnished to the Company by the selling
stockholder specifically for use in the prospectus or it may be
entitled to contribution.
A full-text copy of the preliminary prospectus is available at:
https://tinyurl.com/4j2b26ys
About BIO-key
Holmdel, N.J.-based BIO-key International, Inc., founded in 1993,
is revolutionizing authentication and cybersecurity with
biometric-centric, multi-factor identity and access management
(IAM) software securing access for over forty million users.
BIO-key allows customers to choose the right authentication factors
for diverse use cases, including phoneless, tokenless, and
passwordless biometric options. Its hosted or on-premise
PortalGuard IAM solution provides cost-effective, easy-to-deploy,
convenient, and secure access to computers, information,
applications, and high-value transactions.
Henderson, Nev.-based Bush & Associates CPA LLC, the Company's
auditor since 2024, issued a "going concern" qualification in its
report dated June 5, 2024, citing that the Company has suffered
substantial net losses and negative cash flows from operations in
recent years and is dependent on debt and equity financing to fund
its operations, all of which raise substantial doubt about the
Company's ability to continue as a going concern.
For the years ended December 31, 2023 and 2022, BIO-key
International reported net losses of $8,521,837 and $11,909,903,
respectively. As of June 30, 2024, BIO-key International had $4.80
million in total assets, $5.85 million in total liabilities, and a
total stockholders' deficit of $1.06 million.
CAMBRIDGE FALLS: U.S. Trustee Appoints Margaret Barajas as PCO
--------------------------------------------------------------
Andrew R. Vara, the U.S. Trustee for Regions 3 & 9, appointed
Margaret Barajas as patient care ombudsman for Cambridge Falls,
LLC.
The appointment was made pursuant to the order from the U.S.
Bankruptcy Court for the Middle District of Pennsylvania on
September 9.
Section 333 of the Bankruptcy Code provides that the Patient Care
Ombudsman shall:
* Monitor the quality of patient care provided to patients of
the debtor, to the extent necessary under the circumstances,
including interviewing patients and physicians;
* File the report with the court after notice to the parties
in interest, at a hearing or in writing, regarding the quality of
patient care provided to patients of the debtor as per the Consent
Order Authorizing the United States Trustee to Appoint a Patient
Care Ombudsman pursuant to Section 333 of the Bankruptcy Code dated
September 9, 2024;
* If such ombudsman determines that the quality of patient
care provided to patients of the debtor is declining significantly
or is otherwise being materially compromised, file with the court a
motion or a written report, with notice to the parties in interest
immediately upon making such determination; and
* Shall maintain any information obtained by such ombudsman
under Section 333 of the Bankruptcy Code that relates to patients
(including information relating to patient records) as confidential
information. The State Long-Term Care Ombudsman appointed under
Section 333(a)(2)(B) of the Bankruptcy Code shall have access to
patient records consistent with authority under the Older Americans
Act of 1965 and under non-Federal laws governing the State
Long-Term Care Ombudsman program.
About Cambridge Falls
Cambridge Falls, LLC sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. M.D. Pa. Lead Case No.
24-02244) on Sept. 9, 2024, listing under $1 million in both assets
and liabilities.
Judge Mark J. Conway oversees the case.
Stephen G. Bresset, Esq., at Bresset & Santora, LLC serves as the
Debtor's counsel.
CAMBRIDGE RIVERVIEW: U.S. Trustee Appoints Margaret Barajas as PCO
------------------------------------------------------------------
Andrew Vara, the U.S. Trustee for Regions 3 and 9, appointed
Margaret Barajas as patient care ombudsman for Cambridge Riverview
LLC.
The appointment was made pursuant to the order from the U.S.
Bankruptcy Court for the Middle District of Pennsylvania on
September 6.
Section 333 of the Bankruptcy Code provides that the Patient Care
Ombudsman shall:
* Monitor the quality of patient care provided to patients of
the debtor, to the extent necessary under the circumstances,
including interviewing patients and physicians;
* File the report with the court after notice to the parties
in interest, at a hearing or in writing, regarding the quality of
patient care provided to patients of the debtor as per the Consent
Order Authorizing the United States Trustee to Appoint a Patient
Care Ombudsman pursuant to Section 333 of the Bankruptcy Code dated
September 6, 2024;
* If such ombudsman determines that the quality of patient
care provided to patients of the debtor is declining significantly
or is otherwise being materially compromised, file with the court a
motion or a written report, with notice to the parties in interest
immediately upon making such determination; and
* Shall maintain any information obtained by such ombudsman
under Section 333 of the Bankruptcy Code that relates to patients
(including information relating to patient records) as confidential
information. The State Long-Term Care Ombudsman appointed under
Section 333(a)(2)(B) shall have access to patient records
consistent with authority under the Older Americans Act of 1965 and
under non-Federal laws governing the State Long-Term Care Ombudsman
program.
About Cambridge Riverview
Cambridge Riverview LLC filed its voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Pa. Case No.
24-02216) on Sep. 16, 2024, listing up to $50,000 in both assets
and liabilities.
Judge Mark J Conway presides over the case.
Ronald V. Santora, Esq., at Bresset and Santora represents the
Debtor as counsel.
CEMTREX INC: Forsakringsaktiebolaget Reduces Stake to 0.00069%
--------------------------------------------------------------
Forsakringsaktiebolaget Avanza Pension disclosed in Schedule 13G
Report filed with the U.S Securities and Exchange Commission that
as of October 9, 2024, it beneficially owned 2 shares of Cemtrex,
Inc's common stock, representing 0.00069% of the shares
outstanding.
A full-text copy of Avanza Pension's SEC is available at:
https://tinyurl.com/bdkmcfpc
About Cemtrex
Cemtrex, Inc. was incorporated in 1998 in the state of Delaware and
has evolved through strategic acquisitions and internal growth into
a multi-industry company. During the first quarter of fiscal year
2023, the Company reorganized its reporting segments to be in line
with its current structure consisting of (i) Security, (ii)
Industrial Services, and (iii) Cemtrex Corporate.
As of June 30, 2024, Cemtrex had $43.8 million in total assets,
$43.5 million in total liabilities, $304,967 in non-controlling
interest and $47,956 in total Cemtrex shareholders' equity.
Jericho, New York-based Grassi & Co, CPAs, P.C., the Company's
auditor since 2021, issued a "going concern" qualification in its
report dated Dec. 28, 2023, citing that the Company has sustained
net losses and has significant short-term debt obligations, which
raise substantial doubt about its ability to continue as a going
concern.
CHAMPION HEALTHCARE: Gets OK to Use Cash Collateral Until Nov. 20
-----------------------------------------------------------------
Champion Healthcare, LLC received interim approval from the U.S.
Bankruptcy Court for the Middle District of Tennessee to use cash
collateral through Nov. 20.
The interim order, signed by Judge Charles Walker, authorized the
company to use the cash collateral of secured creditors to pay its
expenses as set forth in its budget.
The use of cash collateral is subject to certain protections, which
include granting replacement liens to secured creditors on the
company's post-petition property.
The secured creditors are The U.S. Small Business Administration,
ASSN Company, Highland Hill Cap, Cloud Fund, United First LLC,
Spartan Capital, CFG Merchant Solutions, Nexi and VitalCap.
VitalCap initially objected but reached an agreement with Champion
Healthcare for the continued use of its cash collateral.
The court set the final hearing for Nov. 20.
About Champion Healthcare
Champion Healthcare, LLC, a company in Lebanon, Tenn., specializes
in office-based mental health and addiction clinic dedicated to
offering comprehensive treatment services for individuals dealing
with mental health disorders and substance abuse challenges. Its
facility provides evidence-based therapies and interventions to
support clients on their path to recovery and improved mental
well-being.
Champion Healthcare filed a petition under Chapter 11, Subchapter V
of the Bankruptcy Code (Bankr. M.D. Tenn. Case No. 24-02956) on
August 5, 2024, with $189,231 in assets and $1,197,758 in
liabilities. Darryl Champion, president, signed the petition.
Judge Charles M. Walker presides over the case.
Jay R. Lefkovitz, Esq., at Lefkovitz & Lefkovitz represents the
Debtor as legal counsel.
CIBUS INC: CFO Reports Ownership of 58,344 Class A Common Shares
----------------------------------------------------------------
Carlo Broos, Interim CFO of Cibus, Inc., filed a Form 3 Report with
the U.S. Securities and Exchange Commission, disclosing direct
beneficial ownership of 58,344 shares of Class A Common Stock. The
report includes 16,544 shares in the form of Restricted Stock
Units, of which 4,081 are vested while the remaining 12,463 shares
have yet to vest.
A full-text copy of Mr. Broos' SEC Report is available at:
https://tinyurl.com/29bj7yhc
About Cibus
Headquartered in San Diego, Calif., Cibus -- http://www.cibus.com/
-- is an agricultural biotechnology company that uses proprietary
gene editing technologies to develop plant traits (or specific
genetic characteristics) in seeds. Its primary business is the
development of plant traits that help address specific productivity
or yield challenges in farming such as traits addressing plant
agronomy, disease, insects, weeds, nutrient-use, or the climate.
These traits are referred to as productivity traits and drive
greater farming profitability and efficiency. They do this in
several ways, including, but not limited to, making plants
resistant to diseases or pests or enabling plants to process
nutrients more efficiently. Certain of these traits lead to the
reduction in the use of chemicals like fungicides, insecticides, or
the reduction of fertilizer use, while others make crops more
adaptable to their environment or to climate change. The ability to
develop productivity traits in seeds that can increase farming
productivity and reduce the use of chemicals in farming is the
promise of gene editing technologies. In addition, Cibus is
developing, through partner-funded projects, certain alternative
plant-based oils or bio-based fermentation products to meet the
functional needs of the new sustainable ingredients industry to
replace current ingredients that are identified to raise
environmental challenges, such as ingredients derived from fossil
fuels, materials that cause deforestation, or materials that raise
other sustainability challenges.
San Diego, Calif.-based BDO USA, P.C., the Company's auditor since
2023, issued a "going concern" qualification in its report dated
March 21, 2024, citing that the Company has incurred recurring
losses from operations and negative cash flows from operations.
As of June 30, 2024, Cibus had $553.38 million in total assets,
$246.31 million in total liabilities, $36.57 million in redeemable
noncontrolling interest, and $270.50 million in total stockholders'
equity.
CONNEXA SPORTS: Files Preliminary S-1 for 2.2-Mil. Share Offering
-----------------------------------------------------------------
Connexa Sports Technologies, Inc. filed a preliminary prospectus on
Form S-1 with the U.S. Securities and Exchange Commission relating
to the offer and sale from time to time by the selling stockholders
-- Millennium Partners Limited, Bingjian Technology Co., Limited,
Changyunsheng Technology Co., Limited, JHG Global Ltd, AXE Global
Capital Ltd, Bridgewater Management Hong Kong Ltd, and Hong Kong
Chengxin Asset Management Co., Limited -- of up to an aggregate of
2,200,000 shares of its common stock consisting of 2,200,000 shares
of the Company's common stock, par value $0.001 per share that were
issued on August 16, 2024 upon the exercise of pre-funded warrants
issued on January 19, 2024.
All securities sold pursuant to the prospectus will be offered and
sold by the selling stockholders. Connexa Sports will not receive
any proceeds from the sale of Common Stock offered by the selling
stockholders.
PLAN OF
DISTRIBUTION
Each selling stockholder of the securities and any of their
pledgees, assignees, and successors-in-interest may, from time to
time, sell any or all of their securities covered hereby on the
principal trading market or any other stock exchange, market or
trading facility on which the securities are traded or in private
transactions. These sales may be at fixed or negotiated prices. A
selling stockholder may use any one or more of the following
methods when selling securities:
* ordinary brokerage transactions and transactions in which
the broker-dealer solicits purchasers;
* block trades in which the broker-dealer will attempt to sell
the securities as agent but may position and resell a portion of
the block as principal to facilitate the transaction;
* purchases by a broker-dealer as principal and resale by the
broker-dealer for its account;
* an exchange distribution in accordance with the rules of the
applicable exchange;
* privately negotiated transactions;
* settlement of short sales;
* in transactions through broker-dealers that agree with the
selling stockholders to sell a specified number of such securities
at a stipulated price per security;
* through the writing or settlement of options or other
hedging transactions, whether through an options exchange or
otherwise;
* a combination of any such methods of sale; or
* any other method permitted pursuant to applicable law.
The selling stockholders may also sell securities under Rule 144 or
any other exemption from registration under the Securities Act, if
available, rather than under this prospectus.
Broker-dealers engaged by the selling stockholders may arrange for
other brokers-dealers to participate in sales. Broker-dealers may
receive commissions or discounts from the selling stockholders (or,
if any broker-dealer acts as agent for the purchaser of securities,
from the purchaser) in amounts to be negotiated, but except as set
forth in a supplement to this prospectus, in the case of an agency
transaction not in excess of a customary brokerage commission in
compliance with FINRA Rule 2121; and in the case of a principal
transaction a markup or markdown in compliance with FINRA Rule
2121.
In connection with the sale of the securities or interests therein,
the selling stockholders may enter into hedging transactions with
broker-dealers or other financial institutions, which may in turn
engage in short sales of the securities in the course of hedging
the positions they assume. The selling stockholders may also sell
securities short and deliver these securities to close out their
short positions, or loan or pledge the securities to broker-dealers
that in turn may sell these securities. The selling stockholders
may also enter into option or other transactions with
broker-dealers or other financial institutions or create one or
more derivative securities which require the delivery to such
broker-dealer or other financial institution of securities offered
by this prospectus, which securities such broker-dealer or other
financial institution may resell pursuant to this prospectus (as
supplemented or amended to reflect such transaction).
The selling stockholders and any broker-dealers or agents that are
involved in selling the securities may be deemed to be
"underwriters" within the meaning of the Securities Act in
connection with such sales. In such an event, any commissions
received by such broker-dealers or agents and any profit on the
resale of the securities purchased by them may be deemed to be
underwriting commissions or discounts under the Securities Act.
Each selling stockholder has informed the Company that it does not
have any written or oral agreement or understanding, directly or
indirectly, with any person to distribute the securities.
Connexa Sports is required to pay certain fees and expenses
incurred by the Company incident to the registration of the
securities. The Company has agreed to indemnify selling
stockholders against certain losses, claims, damages and
liabilities, including liabilities under the Securities Act.
The resale securities will be sold only through registered or
licensed brokers or dealers if required under applicable state
securities laws. In addition, in certain states, the resale
securities covered hereby may not be sold unless they have been
registered or qualified for sale in the applicable state or an
exemption from the registration or qualification requirement is
available and is complied with.
Under applicable rules and regulations under the Exchange Act, any
person engaged in the distribution of the resale securities may not
simultaneously engage in market making activities with respect to
the shares of Common Stock for the applicable restricted period, as
defined in Regulation M, prior to the commencement of the
distribution. In addition, the selling stockholders will be subject
to applicable provisions of the Exchange Act and the rules and
regulations thereunder, including Regulation M, which may limit the
timing of purchases and sales of the shares of Common Stock by the
selling stockholders or any other person.
A full-text copy of the preliminary prospectus is available at:
https://tinyurl.com/2bsnp9a6
About Connexa Sports
Headquartered in Windsor Mill, Maryland, Connexa Sports
Technologies Inc. -- www.connexasports.com -- is a connected sports
company delivering products, technologies, and services across a
range of activities in sports. Connexa's mission is to reinvent
sports through technological innovation driven by an unwavering
focus on today's sports consumer.
Lagos, Nigeria-based Olayinka Oyebola & Co., the Company's auditor
since 2023, issued a "going concern" qualification in its report
dated July 24, 2024, citing that the Company suffered an
accumulated deficit of $(167,387,028), net loss of $(15,636,418),
and decline in net sales. These matters raise substantial doubt
about the Company's ability to continue as a going concern.
Connexa Sports reported a net loss of $15.64 million for the year
ended April 30, 2024, compared to a net loss of $71.15 million for
the year ended April 30, 2023.
CPC ERICSSON: Voluntary Chapter 11 Case Summary
-----------------------------------------------
Debtor: CPC Ericsson Street, LLC
218 Willard Street
Quincy, MA 02169
Business Description: The Debtor is primarily engaged in renting
and leasing real estate properties.
Chapter 11 Petition Date: October 24, 2024
Court: United States Bankruptcy Court
District of Massachusetts
Case No.: 24-12129
Judge: Hon. Janet E Bostwick
Debtor's Counsel: Gary W. Cruickshank, Esq.
GARY W. CRUICKSHANK
10 Post Office Square
Suite 800 South
Boston, MA 02109
Tel: 617-330-1960
Email: gwc@cruickshank-law.com
Estimated Assets: $10 million to $50 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Ryan P. Sillery as authorized
signatory.
The Debtor failed to include in the petition a list of its 20
largest unsecured creditors.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/LGTRCGQ/CPC_Ericsson_Street_LLC__mabke-24-12129__0001.0.pdf?mcid=tGE4TAMA
CRYSTAL CITY ISD: Fitch Lowers IDR to 'BB+', On Watch Negative
--------------------------------------------------------------
Fitch Ratings has downgraded Crystal City Independent School
District, Texas' Issuer Default Rating (IDR) and Fitch-rated
unlimited tax (ULT) bonds to 'BB+' from 'A'.
The IDR and ULT bonds have been placed on Rating Watch Negative.
The outstanding bonds also carry an enhanced rating of 'AAA' based
on the credit enhancement provided to the district's unlimited tax
bonds by the Texas Permanent School Fund (PSF) bond guaranty
program.
Entity/Debt Rating Prior
----------- ------ -----
Crystal City Independent
School District (TX) LT IDR BB+ Downgrade A
Crystal City Independent
School District (TX)
/General Obligation -
Unlimited Tax/1 LT LT BB+ Downgrade A
The downgrade of the IDR and ULT bonds to 'BB+' from 'A' reflects
previously undisclosed budgeting discrepancies including an
overstatement of enrollment, which led the Texas Education Agency
(TEA) to reclaim previously disbursed state aid payments, and
underbudgeting actual spending including personnel costs and
approved wage increases. Midyear fund transfers from the debt
service fund were needed to cover general fund operating costs in
fiscal years 2024 and 2025.
Operating liquidity and reserves are significantly diminished
relative to levels reported in the most recent fiscal 2023 audited
financial statement and information shared by the district just a
few months ago. The district reports sufficient resources to cover
operating needs through spring 2025, including midyear fund
transfers from the debt service fund to cover general fund
operating costs in fiscal years 2024 and 2025 due to strained
general fund liquidity.
The district, which has experienced considerable management
turnover in recent years, is cooperating with the TEA, the state's
regional service center, and an outside consultant to determine the
causes of the structural imbalance and develop a plan. The
estimated size of the structural gap approximates $8 million, which
Fitch estimates at approximately 30% of the general fund budget.
Resolution of the Rating Watch and the stabilization of the
district's credit quality is contingent on its ability to
transparently present a detailed and plausible path forward that
addresses its near-term cash flow depletion.
Reflective of the above risks, Fitch has revised the district's
financial resilience assessment to 'bb' from 'aa' previously. The
'BB+' IDR and ULT rating also incorporates Additional Analytical
Factors for weak management practices (-1 notch), including poor
internal controls and a lack of budgeting transparency and
accountability, the use of nonrecurring support for operations (-2
notches) due to the district's inability and/or unwillingness to
align spending with operating resources, and taxpayer concentration
(-1 notch), which stems from the increased level of sensitivity to
the full and timely payment of property tax bills from a highly
concentrated taxpayer base, given its own precarious liquidity
situation.
The 'BB+' rating also reflects the district's 'strong' long-term
liability burden relative to Fitch's local government rating
portfolio median, which is tempered by Fitch's 'weakest' assessment
for demographic and economic trend and level metrics, the
district's modest population, and a concentrated employment base.
Rating Sensitivities
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Limited ability or willingness to stabilize its liquidity
position over the ensuing several months;
- Untimely or inadequate disclosures or other management concerns
or instability that further heighten uncertainty regarding the
district's fiscal recovery prospects.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Stabilization of the district's near-term liquidity position and
efforts to gradually restore structural balance, which are likely
dependent on some combination of approved spending cuts, successful
efforts to improve recurring revenue, and short-term borrowing;
- Policy actions to improve its budgetary processes, transparency
and oversight;
- A proven ability to manage expenditure pressures and rebuild, and
retain, unrestricted general fund reserve levels above 5% of
spending, which would position Fitch's assessment of financial
resilience at 'bbb' or higher.
SECURITY
The bonds are payable from an unlimited property tax levy and are
further backed by the PSF bond guaranty program. Local school
district bonds approved under the PSF's bond guarantee program are
guaranteed by the assets of the PSF. By law, if a Texas school
district is unable to pay its debt service, it must notify the
commissioner of education at least five days prior to the payment
date. Funds would then be transferred from the appropriate PSF
account of the state treasury to the paying agent in an amount
sufficient to cover any potential shortfall.
Fitch’s Local Government Rating Model
The Local Government Rating Model generates Model Implied Ratings,
which communicate the issuer's credit quality relative to Fitch's
local government rating portfolio. (The Model Implied Rating will
be the Issuer Default Rating except in certain circumstances
explained in the applicable criteria.) The Model Implied Rating is
expressed via a numerical value calibrated to Fitch's long-term
rating scale that ranges from 10.0 or higher (AAA), 9.0 (AA+), 8.0
(AA), and so forth down to 1.0 (BBB- and below).
Model Implied Ratings reflect the combination of issuer-specific
metrics and assessments to generate a Metric Profile and a
structured framework to account for Additional Analytical Factors
not captured in the Metric Profile that can either mitigate or
exacerbate credit risks. Additional Analytical Factors are
reflected in notching from the Metric Profile and are capped at
+/-3 notches.
Ratings Headroom & Positioning
Crystal City Independent School District Model Implied Rating:
'BBB-' (Numerical Value: -1.10)
- Metric Profile: 'BBB-' (Numerical Value: 1.90)
- Net Additional Analytical Factor Notching: -3.0
Individual Additional Analytical Notching Factors:
- Non-Recurring Support or Spending Deferrals: -2.0
- Management Practices: -1.0
- Revenue Concentration Risks: -1.0
Crystal City Independent School District's Model Implied Rating is
'BBB-'. The associated numerical value of -1.10 is at the lower end
of the -1.0 to 0.0 range for its current 'BBB-' rating.
Key Rating Drivers
Financial Profile
Financial Resilience - bb
Crystal City Independent School District's financial resilience is
driven by the combination of its "Low' revenue control assessment
and 'Midrange' expenditure control assessment, culminating in a
'Limited' budgetary flexibility assessment.
- Revenue control assessment: Low
- Expenditure control assessment: Midrange
- Budgetary flexibility assessment: Limited
- Minimum fund balance for current financial resilience assessment:
5.0%
- Current year fund balance to expenditure ratio: 27.3% (2023)
- Five-year low fund balance to expenditure ratio: 27.3% (2023)
Revenue Volatility - Weakest
Crystal City Independent School District's weakest historic
three-year revenue performance has a negative impact on the Model
Implied Rating.
The revenue volatility metric is an estimate of potential revenue
volatility based on the issuer's historical experience relative to
the median for the Fitch-rated local government portfolio. The
metric helps to differentiate issuers by the scale of revenue loss
that would have to be addressed through revenue raising, cost
controls or utilization of reserves through economic cycles.
- Lowest three-year revenue performance (based on revenue dating
back to 2005): 16.5% decrease for the three-year period ending
fiscal 2019
- Median issuer decline: -4.7% (2023)
Financial Profile Additional Analytical Factors and Notching: -2.0
notch (for Management Practices and Non-Recurring Support or
Spending Deferrals)
The additional analytical factors for Management Practices (-1
notch) and non-recurring support for operations (-2 Notch) which
reflect the combination of ongoing financial mismanagement, the use
of interest and sinking fund resources for general fund costs, poor
budget controls and overspending, lack of transparency, and
aggressive enrollment projections.
Analyst Inputs to the Model
Analyst inputs to the model reflect metric adjustments to account
for historical data anomalies, forward-looking performance shifts,
or non-recurring events that may otherwise skew the time series.
The analyst input for a fund balance equal to 0% spending and
transfers out reflects the anticipated depletion of district fund
balance given the district's unaudited deficit estimated for fiscal
2024 ($10 million) and projected for fiscal 2025 ($8 million) and
ongoing litigation and facility cost pressures associated with
mitigation of public health hazards caused by faulty construction
currently the subject of litigation against the building
contractor.
Demographic and Economic Strength
Population Trend - Weakest
Based on the median of 10-year annual percentage change in
population, Crystal City Independent School District's population
trend is assessed as Weakest
Population trend: -0.4% 2022 median of 10-year annual percentage
change in population (3rd percentile)
Unemployment, Educational Attainment and MHI Level - Weakest
The overall strength of Crystal City Independent School District's
demographic and economic level indicators (unemployment rate,
educational attainment and median household income [MHI]) in 2023
are assessed as Weakest on a composite basis, performing at the
12th percentile of Fitch's local government rating portfolio. This
is due to relatively weak education attainment levels,
median-issuer indexed adjusted MHI and unemployment rate.
- Unemployment rate as a percentage of national rate: 202.8% 2023
(3rd percentile), relative to the national rate of 3.6%
- Percent of population with a bachelor's degree or higher: 14.4%
(2022) (8th percentile)
- MHI as a percent of the portfolio median: 84.0% (2022) (25th
percentile)
Economic Concentration and Population Size - 'Weakest'
Crystal City Independent School District's 2022 population size was
low and the economy was highly concentrated.
The composite metric acts asymmetrically, with most issuers (above
the 15th percentile for each metric) sufficiently diversified to
minimize risks associated with small population and economic
concentration. Downward effects of the metric on the Metric Profile
are most pronounced for the least economically diverse issuers (in
the 5th percentile for the metric or lower). The economic
concentration percentage shown below is defined as the sum of the
absolute deviation of the percentage of personal income by major
economic sectors relative to the U.S. distribution.
- Population size: 7,129 (2022) (from 0th to 2.5th percentile)
- Economic concentration: 82.3% Analyst Input (from 0th to 2.5th
percentile) (vs. 114.2% 2023 Actual)
Demographic and Economic Strength Additional Analytical Factors and
Notching: -1.0 notch (for Revenue Concentration Risks)
The additional Analytical factor (-1 Notch) for revenue
concentration risks reflects the district's risks associated with
very high tax base and energy sector concentration. This factor
heightens the level of sensitivity to the full and timely payment
of property tax bills from a highly concentrated taxpayer,
particularly given the district's precarious liquidity position.
Long-Term Liability Burden
Long-Term Liability Burden - Strong
Crystal City Independent School District's liabilities to personal
income has improved while carrying costs to governmental
expenditures and liabilities to governmental revenue remain
moderately strong. The long-term liability composite metric in 2023
is at the 69th percentile, indicating a somewhat lower liability
burden relative to Fitch's local government rating portfolio.
- Liabilities to personal income: 3.6% Analyst Input (68th
percentile) (vs. 14.1% 2023 Actual)
- Liabilities to governmental revenue: 135.4% Analyst Input (70th
percentile) (vs. 142.2% 2023 Actual)
- Carrying costs to governmental expenditures: 12.4% (2023) (68th
percentile)
Analyst Inputs to the Model
The analyst input reflects the use of market value to determine the
district's long-term liability burden. Market value is used in
place of personal income to reflect the predominance of very large
industrial assets compared to the residential base. The liabilities
to personal income and liabilities to governmental revenue were
adjusted to net out debt amortized through fiscal 2024.
Direct debt was adjusted to reflect principal amortization through
fiscal 2024.
PROFILE
Crystal City Independent School District serves a geographically
large and sparsely populated area in Zavala County 100 miles
southwest of San Antonio. The district's geographic footprint
includes the commercial center and county seat of Crystal City. Its
refined average daily attendance (RADA) totaled approximately 1,463
in fiscal 2023. The district RADA has experienced sizable declines
over the last four years, partly exacerbated by the pandemic.
The district's tax base has been volatile due to drilling activity
in the Eagle Ford shale formation and fluctuating oil and gas
prices. From fiscal years 2011 to 2016, taxable assessed values
(TAV) experienced a compound average annual growth rate of 42%.
However, a drop in oil and gas prices caused a cumulative 39%
decline in TAV by fiscal 2018. Certified TAV for fiscal year 2024
is $1.6 billion, reflecting a 33% increase compared to the previous
year.
Tax base concentration is high, with the top 10 taxpayers
representing 54% of fiscal 2023 TAV. The top taxpayers are led by
oil production company EXCO Operating (30% of total TAV) and
include many oil and gas exploration companies.
Sources of Information
In addition to sources of information identified in Fitch's
applicable criteria specified below, this action was informed by
data from DRIVER by Solve.
ESG Considerations
Crystal City Independent School District, TX has an ESG Relevance
Score of 5 for Rule of Law, Institutional, Regulatory Quality,
Control of Corruption due to the district's poor governance
practices, financial mismanagement and Texas Education Agency
investigation, which has a negative impact on the credit profile,
and is highly relevant to the rating, resulting in a downgrade of
the rating to BB+,/Rating Watch Negative from A, Outlook Stable.
Crystal City Independent School District, TX has an ESG Relevance
Score of 5 for Data Quality and Transparency due to lack of data
transparency stemming from overestimating average daily attendance
and budgeting discrepancies, which has a negative impact on the
credit profile, and is highly relevant to the rating, resulting in
a downgrade of the rating to BB+/Rating Watch Negative from A
/Outlook Stable.
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: Holly Smith Miller Named Subchapter V Trustee
-------------------------------------------------------------------
The U.S. Trustee for Regions 3 and 9 appointed Holly Miller, Esq.,
at Gellert Scali Busenkell & Brown, LLC as Subchapter V trustee for
Culloo Entertainment LLC.
Ms. Miller will be paid an hourly fee of $425 for her services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Ms. Miller declared that she is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Holly S. Miller, Esq.
Gellert Scali Busenkell & Brown, LLC
1628 John F. Kennedy Boulevard, Suite 1901
Philadelphia, PA 19103
Telephone: (215) 238-0012
Facsimile: (215) 238-0016
Email: hsmiller@gsbblaw.com
About 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, with total assets of $191,243 and total
liabilities of $2,739,544. James De Berardine, manager, signed the
petition.
Judge Ashely M. Chan oversees the case.
The Debtor is represented by Joseph Rutala, Esq., at Rutala Law
Group, PLLC.
DANIEL J. WALLACE: No Patient Complaints, 2nd PCO Report Says
-------------------------------------------------------------
Tamar Terzian, the patient care ombudsman, filed with the U.S.
Bankruptcy Court for the Central District of California her second
interim report regarding the quality of patient care provided by
Daniel J. Wallace M.D., a Medical Corporation.
In the report which covers the period August 7 to October 7, the
PCO conducted a site visit of the healthcare provider's
headquarters in Beverly Hills and met with its chief executive
officer who is responsible for coordination of patient care
services and responsible for all activities relevant to the patient
care services furnished, including the development of personnel
qualifications and the assignment of personnel.
The PCO confirmed that each patient is proposed with a treatment
plan that is reviewed by Dr. Wallace. The treatment plan varies
depending on the patients' needs and diagnosis. Many of the
biologic therapies for autoimmune diseases are administered using
intravenous infusions. The staff and medical assistants are
properly trained to provide care.
The PCO observed that each patient's medical records and
information is well maintained and accessible for staff. The
records are all electronic and PCO reviewed medical records of
current patients. The PCO reviewed patient records and patient care
is properly documented with attached consent forms. PCO has no
concerns or comments for this reporting period.
Ms. Terzian noted that the healthcare provider has received no
complaints from any patients. The PCO has received no complaints
from the various patients visited for this interim report.
The PCO finds that all care provided to the patients is well within
the standard of care. She will continue to monitor and will be
available to respond to any concerns or questions of the court or
interested party.
A copy of the ombudsman report is available for free at
https://urlcurt.com/u?l=bMq9Qt from PacerMonitor.com.
The ombudsman may be reached at:
Tamar Terzian
Hanson Bridgett, LLP
777 S. Figueroa Street
Suite 4200
Los Angeles, CA 90017
Tel: (323) 210-77747
Email: tterzian@hansonbridgett.com
About Daniel J. Wallace M.D.
Daniel J. Wallace M.D., a Medical Corporation specializes in the
treatment of rheumatic diseases and the research of autoimmune and
inflammatory diseases. It conducts business under the name Wallace
and Lee Center in Beverly Hills.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. C.D. Calif. Case No. 24-14429) on June 3,
2024, with $301,368 in assets and $3,884,496 in liabilities. Daniel
J. Wallace M.D., chief executive officer, signed the petition.
Judge Barry Russell presides over the case.
Michael Jay Berger, Esq., at the Law Offices of Michael Jay Berger
represents the Debtor as bankruptcy counsel.
Tamar Terzian has been appointed as patient care ombudsman in the
Debtor's Chapter 11 case.
DCLI BIDCO: Fitch Assigns 'BB-' LongTerm IDR, Outlook Stable
------------------------------------------------------------
Fitch Ratings has assigned a first-time 'BB-' Long-Term Issuer
Default Rating (IDR) to DCLI BidCo LLC (DCLI). The Rating Outlook
is Stable. Fitch has also assigned an expected 'BB(EXP)' rating to
DCLI's planned senior secured second-lien debt issuance. The
issuance size, coupon, and maturity date will be determined at the
time of issuance.
Key Rating Drivers
Established Market Position: DCLI's ratings are supported by its
franchise and established market position as the largest container
chassis lessor in North America. The ratings also reflect the
company's standardized nature and relatively long useful life of
its chassis, which mitigates residual value risk. Strong asset
quality, solid liquidity given stable operating cash flow, and low
balance sheet leverage also support the ratings. Additionally, the
ratings reflect management's depth, experience, and track record in
managing chassis.
Monoline Business Model: Rating constraints include DCLI's monoline
business strategy, which is exposed to global trade levels, and
concentrated customer base. However, the domestic and marine
segments focus on different industries, providing some degree of
diversification against cyclical downturns. Weak profitability on a
pre-tax ROAA basis and limited funding flexibility stem from its
fully secured funding profile. Additionally, DCLI faces potential
governance risks compared to larger, public peers, and potential
variability in strategic and financial objectives.
Solid Franchise: DCLI is a market leader in the container chassis
leasing sector, with an estimated two-thirds market share in the
domestic 53' segment and approximately one-fifth in the marine
segment. The company has a fleet totaling 290,000 as of June 30,
2024. This franchise strength and scale affords the company
efficient operations and sufficient inventory to meet demand
requirements. DCLI has a long track record in chassis leasing and a
solid management team with leasing industry experience.
Strong Asset Quality Albeit Concentrated Customer Base: DCLI's
customer base is concentrated, with the top 10 customer contracts
accounting for over half of revenues. Despite the concentration,
asset quality remains strong given the conservative depreciation
policies and the long economic life of its assets. Additionally,
chassis can be refurbished at a steep discount of the cost of a new
chassis to significantly extend its useful life. DCLI's impairment
ratio has averaged 0.8% from 2020-2023, and impairments were just
0.2% in 2Q24.
Weak Earnings: DCLI reported weak earnings results in the TTM
ending June 30, 2024, with a pre-tax return on average assets of
negative 3.0%. This is below the four-year average of 1.0% from
2020-2023, which falls within Fitch's 'b and below' category
earnings and profitability benchmark range of 0%-1% for balance
sheet heavy finance and leasing companies with a sector risk
operating environment score (SROE) in the 'a' category. Recent
profitability suffered due to a decline in chassis utilization.
However, Fitch expects metrics to return to historical averages in
the medium-term given recent customer acquisitions.
Appropriate Leverage: Fitch primarily assesses DCLI's leverage on a
debt-to-tangible equity basis. DCLI's leverage was 1.5x as of June
30, 2024, which is within Fitch's 'a' category quantitative
benchmark range of 0.8x-3.0x for balance sheet heavy finance and
leasing companies with a SROE score in the 'a' category. Fitch
expects leverage decline modestly from current levels given the
reduction in planned chassis deliveries in 2H24 and 2025.
Fitch considers cash flow leverage (total debt to EBITDAR) as a
complementary metric. On this basis, leverage increased to 5.7x in
the TTM ending June 30,2024; up from 4.3x at the year ended 2023
given weaker reported earnings and increased debt. Fitch expects
cash flow leverage will decline to be within DCLI's target range of
4.5x-5.0x within the Outlook horizon, driven by earnings growth.
Fully Secured Funding Profile: As of June 30, 2024, DCLI's funding
profile was fully secured, which allows the company to match-fund
its chassis pool from a rate and duration perspective. However, the
reliance on secured funding constrains funding flexibility in times
of stress. Fitch would view the addition of an unsecured funding
component positively.
Sound Liquidity and Coverage: Fitch believes DCLI's liquidity
profile is sound. The company had $7.6 million in cash at June 30,
2024 and $870.5 million of available committed capacity from their
ABL facility, with no material debt maturities coming due in the
next 12 months. Interest coverage (adjusted EBITDA to interest
expense) was 3.2x for TTM ending June 30, 2024, in line with their
four-year average of 3.3x.
Stable Outlook: The Stable Outlook reflects Fitch's expectation for
continued solid asset quality performance, stable cash flow
generation through various economic cycles, enhanced earnings
stability, a reduction in cash flow leverage such that it is
managed below 5x, and limited changes to the strategic and
financial policies under the current ownership consortium.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Persistent reduction in fleet utilization and, or lease rates;
- Weakening of the liquidity profile as evidenced by lower
operating cash flows and interest coverage;
- A sustained increase in balance sheet leverage above 3.0x or cash
flow leverage above 5.0x, which could be driven by outsized
dividends to the parent, or material impairments;
- Inability to refinance secured funding facility;
- Loss of bankruptcy and, or material credit deterioration of a top
lessee relationship.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Enhanced earnings consistency through cycles;
- Addition of an unsecured funding component, such that unsecured
debt was maintained at or above 20% of total debt;
- Improved lessee diversification and, or credit quality;
- Maintenance of cash flow leverage below 3.5x;
- Maintenance of a solid liquidity profile as evidenced by
sufficient cash on hand and ABL availability to fund operations.
DEBT AND OTHER INSTRUMENT RATINGS: KEY RATING DRIVERS
DCLI's expected senior secured debt rating is one notch above the
Long-Term IDR and reflects the firm's low leverage and above
average recovery prospects in a stress scenario.
DEBT AND OTHER INSTRUMENT RATINGS: RATING SENSITIVITIES
The expected senior secured debt rating is primarily sensitive to
changes in DCLI's Long-Term IDR and secondarily to the relative
recovery prospects of the notes. A meaningful decrease in recovery
prospects could result in the secured debt rating being equalized
or notched down from the IDR. Conversely, the creation of a
separate collateral pool for the secured notes, which enhances
recovery prospects could result in further notching of the rating.
ADJUSTMENTS
The Standalone Credit Profile (SCP) has been assigned in line with
the implied SCP.
The Business Profile score has been assigned below the implied
score due to the following reason: Business Model (negative).
The Asset Quality score has been assigned below the implied score
due to the following reason: Concentrations; asset performance
(negative).
The Capitalization and Leverage score has been assigned below the
implied score due to the following reasons: Risk Profile and
Business Model (negative), and Profitability, Payouts and Growth
(negative).
The Funding, Liquidity and Coverage Score has been assigned below
the implied score due to the following reason: Funding flexibility
(negative).
Date of Relevant Committee
24 September 2024
ESG Considerations
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating
----------- ------
DCLI BidCo LLC LT IDR BB- New Rating
Senior Secured
2nd Lien LT BB(EXP) Expected Rating
DIOCESE OF BURLINGTON: U.S. Trustee Appoints Creditors' Committee
-----------------------------------------------------------------
The U.S. Trustee for Region 2 appointed an official committee to
represent unsecured creditors in the Chapter 11 case of Roman
Catholic Diocese of Burlington, Vermont.
The committee members are:
1. Brian Chioldi
2. Robert Giroux
3. Daniel Stack
4. Brett Thompson
5. Vincent Zeppieri
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 Roman Catholic Diocese of Burlington
Roman Catholic Diocese of Burlington sought relief under Chapter 11
of the U.S. Bankruptcy Code (Bankr. D. Vt. Case No. 24-10205) on
Sept. 30, 2024. In the petition signed by Reverend John Joseph
McDermott, bishop, the Debtor disclosed up to $50 million in assets
and up to $10 million in liabilities.
Judge Heather Z. Cooper oversees the case.
The Debtor tapped James Baillie, Esq., at Fredrikson & Byron, P.A.
as bankruptcy counsel and Obuchowski Law Office as local counsel.
DISTRIBUIDORA MI: Gets Interim OK to Use Cash Collateral
--------------------------------------------------------
Distribuidora Mi Honduras, LLC received interim approval from the
U.S. Bankruptcy Court for the District of Maryland to use its
secured lenders' cash collateral.
The interim order authorized the company to use cash collateral to
purchase goods and cover essential operating expenses amounting to
$14,019.52, subject to the approved budget. Any expenditure
exceeding 10% of any budget line item requires approval from the
secured lenders, including Itria Ventures, LLC, RDM Capital
Funding, LLC and Drip Capital, Inc.
To protect against any loss of value in their pre-bankruptcy
collateral, the lenders were granted a replacement lien.
About Distribuidora Mi Honduras
Distribuidora Mi Honduras LLC, doing business as DMH LLC, imports
specialty non-perishable foods, cosmetics, and cleaning supplies
from Mexico and Central America.
Distribuidora Mi Honduras filed a petition under Chapter 11,
Subchapter V of the Bankruptcy Code (Bankr. D. Md. Case No.
24-18364) on Oct. 4, 2024, with assets of $500,000 to $1 million
and liabilities of $1 million to $10 million. Omar Rubinstein,
managing member, signed the petition.
The Debtor is represented by David Erwin Cahn, Esq., at the Law
Office of David Cahn, LLC.
DOGS ARE PEOPLE: Gets Interim OK to Use Cash Collateral
-------------------------------------------------------
Dogs Are People Too, LLC received interim approval from the U.S.
Bankruptcy Court for the Northern District of Texas, Dallas
Division to use the cash collateral of Sunflower Bank.
The interim order approved the use of up to $47,016.71 of the
lender's cash collateral to pay the company's expenses, which
include $13,455.50 for payroll and payroll taxes.
Sunflower Bank will be granted a superpriority administrative claim
and replacements liens on its collateral as adequate protection for
any diminution in the value of its cash collateral.
About Dogs Are People Too
Dogs Are People Too, LLC is a company that specializes in products
or services related to pets, particularly dogs.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Texas Case No. 24-33079), with up to
$50,000 in assets and up to $500,000 in liabilities.
Judge Scott W. Everett oversees the case.
The Debtor is represented by:
Trey Andrew Monsour, Esq.
Fox Rothschild, LLP
2501 N. Harwood Street, Suite 1800
Dallas, TX 75201-1613
Telephone: (214) 231-5796
Email: tmonsour@foxrothschild.com
DUERDEN'S APPLIANCE: Seeks Chapter 7 Bankruptcy
-----------------------------------------------
Eric Cabrera of KSL NewsRadio reports that Duerden's Appliance and
Mattress, an independent store in Bountiful specializing in
appliances and mattresses, has filed for Chapter 7 bankruptcy.
KSL NewsRadio discovered the bankruptcy filing through a review of
public records.
This development has left recent customers uncertain about the
status of their purchases and whether they will receive refunds,
the report states.
The 158-page filing reveals that the company has over $7.5 million
in debt. Among the listed creditors, one section identifies
"Various customers" as non-priority creditors with unsecured
claims, though the exact amount of the debt is noted as "unknown."
The company's attorney reported that the summary of assets exceeds
$10.7 million, with over $8 million of that comprising appliances
and products. The inventory list for the company spans more than
100 pages.
About Duerden's Appliance and Mattress
Duerden's Appliance and Mattress is an independent store in
Bountiful specializing in appliances and mattresses.
Duerden's Appliance and Mattress sought relief under Chapter 7 of
the U.S. Bankruptcy Code (Bankr. D. Utah. Case No. 24-25390) on
October 17, 2024.
The Honorable Bankruptcy Judge Kevin R. Anderson handles the case.
The Debtor is represented by Mark C. Rose of Mckay, Burton &
Thurman, P.C.
E.W. GRADING: To Sell Personal Property via Public Sale
-------------------------------------------------------
E.W. Grading Inc. and Steven Eric Worrell seek permission from the
U.S. Bankruptcy Court for the Eastern District of North Carolina,
Wilmington Division, to sell personal property, including tractors,
mowers and trucks, free and clear of liens.
Majority of the Property is owned by E.W. Grading but there are a
few items in which the company and Worrell each claim a one-half
interest.
Some of the items are encumbered as security for loans for Truist
Bank, Southern Bank & Trust Company, John Deere Construction &
Forestry Company and/or AmeriCredit Financial Services Inc. also
known as GM Financial.
The Debtors have employed RDD Auction Company, LLC as the
auctioneer of the Property, and will seek approval of compensation
for commissions at these rates:
-- 20% on the first $20,000
-- 10% on the next $50,000
-- 8% on the balance
The Debtors propose to hold a public sale for the Property on
December 14, 2024, beginning at 8:30 a.m., both live at RDD's
location at 1260 Raynor Mill Road, Mount Olive, North Carolina, and
simultaneously on RDD's online auction site.
The Property will be sold in an "As Is" condition, and no
warranties shall be made as to the condition, use or fitness of the
Property for a particular purpose.
The buyer of the Property will bear all costs associated with the
transfer of the Property, including registration fees, local
transfer fees and taxes, and North Carolina sales taxes.
The Debtors believe that the proposed public sale is the best
method to liquidate the Property, as it shall preserve the rights
of lien and interest holders in the Property to maximize value.
About E. W. Grading Inc.
E. W. Grading, Inc. filed a petition under Chapter 11, Subchapter V
of the Bankruptcy Code (Bankr. E.D.N.C. Case No. 23-03027) on Oct.
20, 2023, with $500,001 to $1 million in both assets and
liabilities.
Judge Pamela W. McAfee oversees the case.
David J. Haidt, Esq., at Ayers & Haidt, P.A. represents the Debtor
as counsel.
E.W. Grading's Plan of Reorganization was confirmed by the Court on
May 10, 2024.
Its affiliate, Steven Eric Worrell, won confirmation of his own
Plan of Reorganization on July 15, 2024.
EL DORADO GAS: South Texas Gas Plant Up for Bankruptcy Sale
-----------------------------------------------------------
In an opportunity for expanding oil-and-gas companies, Tiger Group
and Liquidity Services are now accepting purchase offers for the
gas gathering and processing plant formerly operated by El Dorado
Oil & Gas, Inc., on the Eagle Ford Shale in South Texas.
The sale is subject to the final order of the U.S. Bankruptcy Court
for the Southern District of Mississippi, which is handling the
national energy service firm's bankruptcy case (No. 23-51715-JAW).
"Proximate to the productive Eagle Ford Shale, this asset
represents a strong opportunity for midstream companies with
existing or prospective South Texas operations," noted Chad
Farrell, Managing Director, Tiger Commercial & Industrial. "We are
accepting offers for the entirety of the facility, which is in good
condition and available for immediate inspection, as well as the
17.11-acre tract of land in DeWitt County."
The plant, which is a mile northwest of Nordheim off of
Farm-to-Market Road 324 and Cabeza Road, processes gas via a single
train consisting of slug catcher, H2S treating, dehydration and
metering. It processes condensate via a single liquid train
consisting of a condensate surge tank, LP separator, oil treaters,
oil storage and LACT units for truck loading.
"Flash gas is compressed and injected into the high-pressure gas
stream, " Farrell said. "Tank vapors can also be recovered and
compressed, with product water separated and removed at the well
pads. A smokeless flare stack can handle flare and relief gas."
Peak gas production is 60 million standard cubic feet per day
(MMscf/d). Peak oil production is 4,500 barrels of oil per day.
Equipment specifications:
-- Slug catcher design: 1 unit, 100 MMscf/d, 5,000 barrels of
liquid per day
-- Dehydrator unit skid design: 4 units, 15 MMscf/d
-- Vapor recovery unit skid design: 1 unit, 0.7 MMscf/d
-- Two-5,000 barrel crude/natural gas liquids (NGL) tanks
-- Two LACT Units -- NGL bullet design: 1 unit, 30,000 gallons
-- Security: fenced, electric gates, LED lights, 750
kilovolt-amperes (KVA) transformer
Gulfport-based El Dorado filed for Chapter 11 this past December.
It held a diverse array of equipment at 37 locations, primarily in
Mississippi and Texas, but also in Alabama, Louisiana, Nevada,
North Dakota, Ohio, Oklahoma, Tennessee, Virginia, Wyoming, and
other locations.
For asset photos, descriptions, and other information, visit:
https://soldtiger.com/sales/gas-gathering-and-processing-plant/
About Tiger Group
Tiger Group provides asset valuation, advisory and disposition
services to a broad range of retail, wholesale, and industrial
clients. With over 40 years of experience and significant financial
backing, Tiger offers a uniquely nimble combination of expertise,
innovation and financial resources to drive results. Tiger's
seasoned professionals help clients identify the underlying value
of assets, monitor asset risk factors and provide capital or
convert assets to capital quickly and decisively. Tiger maintains
offices in New York, Los Angeles, Boston, Chicago, Houston and
Toronto. https://tigergroup.com/
About Liquidity Services
Liquidity Services operates the world's largest B2B e-commerce
marketplace platform for surplus assets with over $10 billion in
completed transactions to more than five million qualified buyers
and 15,000 corporate and government sellers worldwide. The company
supports its clients' sustainability efforts by helping them extend
the life of assets, prevent unnecessary waste and carbon emissions,
and reduce the number of products headed to landfills.
https://liquidityservices.com/
About El Dorado Gas & Oil Inc.
and Hugoton Operating Company
Hugoton and El Dorado are both Arkansas corporations engaged in the
exploration, production, and development of crude oil and natural
gas properties. El Dorado is a lease holder and operator of oil and
gas wells covering about 4,000 net acres in South Texas. El Dorado
also owns a substantial amount of oil field equipment and owns real
estate in multiple locations and states. Hugoton also owns oil and
gas interests and operates wells in South Texas.
Hugoton Operating Company, Inc. filed a voluntary Chapter 11
petition (Bankr. S.D. Miss. Case No. 23-51139) on Aug. 14, 2023. El
Dorado Gas & Oil, Inc., a company in Gulfport, Miss., filed Chapter
11 petition (Bankr. S.D. Miss. Case No. 23-51715) on Dec. 22, 2023,
with $500 million to $1 billion in assets and $50 million to $100
million in liabilities. Thomas L. Swarek, president, signed the
petition.
Judge Katharine M Samson oversees the cases.
Patrick Sheehan, Esq., at Sheehan & Ramsey, PLLC, is counsel to
Debtor Bluestone Natural Resources II-South Texas, LLC and World
Aircraft, Inc.
R. Michael Bolen, Esq., at Hood & Bolen, PLLC; and Nancy Ribaudo,
Esq., Katherine Hopkins, Esq., and Joseph Austin, Esq., at Kelly
Hart & Hallman LLP, serve as counsel to Dawn Ragan, Chapter 11
Trustee for El Dorado Gas & Oil, Inc. and Hugoton Operating
Company, Inc.
EMPIRE COMMUNITIES: Fitch Assigns B- Rating on Sr. Unsecured Notes
------------------------------------------------------------------
Fitch Ratings has assigned a 'B-' with a Recovery Rating of 'RR4'
to Empire Communities Corp.'s (Empire) proposed offering of senior
unsecured notes. The proposed notes will be pari passu with the
company's existing senior unsecured notes. Proceeds from the notes
offering will be used to refinance its exiting 7.375% CAD senior
unsecured notes due 2025 and for general corporate purposes.
The company's 'B-' IDR reflects Empire's high leverage, its limited
geographic diversity, exposure to high-rise condominium projects,
and long land position. The company's long history and leadership
position in its Canadian housing markets and good financial
flexibility are also factored into the ratings.
Key Rating Drivers
High Leverage: Fitch expects Empire's leverage to improve modestly
but remain elevated as it grows its U.S. operations and generates
negative FCF. Net debt to capitalization was 72% at YE 2023,
excluding CAD35 million of cash classified by Fitch as not readily
available for working capital and non-controlling equity interest.
It also includes Empire's proportionate share of unconsolidated
high-rise debt. Fitch forecasts that net debt to capitalization
will be below 70% at YE 2024 and around 65% at YE 2025. EBITDA
leverage was 6.4x at the end of 2023 and is forecast to settle
between 5.0x-6.0x at YE 2024 and 4.5x-5.5x at YE 2025.
Volatile Cash Flow: Fitch expects Empire will generate negative
cash flow from operations (CFO after distributions from joint
ventures (JVs) and distributions to non-controlling interests) of
CAD25 million to CAD75 million in 2024 and 2025 due to higher
inventory levels. This compares to CFO of CAD5.9 million in 2023.
Fitch expects Empire to generate strong cash flow during housing
downturns as it monetizes its inventory and lowers land and
inventory investment. This should allow it to build cash or pay
down debt. However, the company's exposure to high-rise projects
may necessitate that it continues funding these projects before
monetizing its high-rise backlog.
Land Strategy: Empire has a longer land position than its U.S.
peers due to exposure to the land-constrained Greater Golden
Horseshoe market as well as its land development operations. The
company is pivoting to a more land-light strategy, increasing its
lots under option in the U.S. and Canada and reducing its lots
related to its land development operations.
Empire's long overall land position, particularly in its land
development operations in the U.S., makes the company susceptible
to impairment charges if housing market conditions deteriorate. As
of June 30, 2024, Empire owned and controlled about 23,500 lots
(excluding lot equivalents for its high-rise business) or a
nine-year supply based on LTM closings. Empire's owned lot position
of 3.4 years in the U.S. is comparable to some of its U.S.
homebuilder peers.
Good Financial Flexibility: Empire ended 2Q24 with CAD96.3 million
of cash and roughly CAD45 million of borrowing availability under
its USD480 million revolving credit facility that matures in June
2027. Fitch expects Empire will generate cash during 2H24 and repay
revolver borrowings. EBITDA interest coverage is forecast to be
around 2.0x during the next few years.
Limited Geographic Diversification: Empire is meaningfully less
geographically diversified compared with most of the homebuilders
in Fitch's coverage. As of June 30, 2024, Empire had more than 40
active communities across eight markets in the U.S. (Austin, San
Antonio and Houston, TX, Atlanta, GA and various locations in North
Carolina) and operations in the Greater Golden Horseshoe (including
the Greater Toronto area) in the Southern Ontario region of Canada.
The company recently entered the Colorado Springs, CO market.
Empire's geographic concentration in these select markets exposes
it to an outsized impact if these markets experience a regional
downturn.
Strong Local Market Position in Canada: Empire is one of the
leading low-rise builders in the Greater Golden Horseshoe region
and Greater Toronto Area. Fitch views this as an advantage as scale
in local metro markets provides homebuilders with efficiencies in
purchasing and also enhances access to the local labor pool and
land. Empire is predominantly a second-tier player (top-20 builder)
in its U.S. markets given that it has only recently entered the
U.S. Empire's gross margins for its U.S. operations have improved
in 2024 but continues to lag its larger U.S. peers.
High-Rise Condominiums: Empire has three high-rise (HR) condominium
projects, two of which are under construction and one that was
recently purchased. These HR projects are deconsolidated from the
company's financial statements as of 3Q23. One of the HR projects
will be completed in 2024 and the other in 2025. While these
projects have now been deconsolidated, Fitch believes that the
high-rise projects are strategically important to Empire. As a
result, Fitch includes Empire's proportional share of the debt
associated with these projects in calculating its credit metrics.
These projects typically require significant upfront capital before
generating revenues. Most also take an extended period to
construct, which increases the risk, particularly in a housing
downturn. The four high-rise projects are about 99% pre-sold as of
June 30, 2024. Sales of high-rise units typically require at least
a 20% down payment from the buyers. Management reports that
developers have recourse to the buyers should they walk away from
these contracts.
Derivation Summary
Empire Communities is comparable to Landsea Homes Corporation
(B/Stable) and Adams Homes, Inc. (B+/Stable) in terms of revenues
and is larger than STL Holding Company, LLC (B+/Stable). The
company's credit metrics are weaker than these 'B' category peers.
Similar to these peers, the company has limited geographic
diversity compared with the larger public homebuilders, which are
rated investment grade.
The company's overall land position is also longer than its peers,
although its land position in the U.S. is comparable to some of the
large U.S. public homebuilders. Empire's risk profile is higher
given its exposure to high-rise projects as well as its land
development operations. Its EBITDA margin is comparable to its U.S.
peers.
Key Assumptions
- Revenue declines 12.5%-13.5% in 2024 and is relatively flat in
2025;
- EBITDA margin of 17.5%-18.5% in 2024 and 2025;
- Fitch-calculated net debt to capitalization of 69% at YE 2024 and
65% at YE 2025;
- Empire generates negative CFO of CAD25 million to CAD75 million
in 2024 and 2025;
- EBITDA leverage of 5.0x-6.0x at YE 2024 and YE 2025;
- EBITDA interest coverage of around 2.0x in 2024 and 2025;
- SOFR rates averaging 5.25% in 2024 and 4.0% in 2025.
Recovery Analysis
Empire Communities' business profile could yield a distressed
enterprise value of approximately CAD1.1 billion on the liquidation
value of its inventory (including proportionate share of high-rise
projects), receivables and PP&E. The CAD1.1 billion in resulting
liquidation value exceeds Fitch's assessment of Empire's CAD900
million valuation as a going-concern (GC), given the high value of
the company's inventory in Canada.
Distress could result from a prolonged housing downturn, combined
with an aggressive land and development spending. The CAD900
million enterprise value is based on a GC EBITDA estimate of CAD150
million, reflecting Fitch's view of a sustainable, post
reorganization EBITDA level. The GC EBITDA is 20% lower than
Fitch-calculated 2023 EBITDA. Fitch assumes Empire could generate a
6.0x EBITDA multiple in a going concern sale. Fitch has assumed a
10% administrative claim.
The liquidation estimate reflects Fitch's view of the value of
balance sheet assets that can be realized in sale or liquidation
processes conducted during a bankruptcy or insolvency proceeding
and distributed to creditors:
- 60% advance rate on inventory to account for shrinkage as well as
impairment charges in a housing downturn;
- 75% advance rate on receivables;
- 50% advance rate on PP&E.
Fitch assumed that the company's USD480 million secured revolving
credit facility is 70% drawn during a distress scenario, which
incorporates shrinkage in the borrowing base. The secured credit
facility is senior to the company's unsecured notes in the
waterfall.
The allocation of the value in the liability waterfall results in a
recovery corresponding to an 'RR1' for the senior secured revolving
credit facility and a recovery corresponding to an 'RR4' for the
unsecured notes. A material increase in the amount of revolver
commitment and/or capacity, a higher amount of secured mortgages,
and/or a larger unsecured notes offering without a corresponding
increase in Fitch's enterprise value assumptions in a recovery
scenario could lead to a lower expected recovery for the unsecured
notes.
RATING SENSITIVITIES
Factors That Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Net debt-to-capitalization below 65% and EBITDA leverage
consistently below 6x and the company maintains a healthy liquidity
position;
- Fitch may also consider positive rating actions if the company
further diversifies its operations in the U.S. while maintaining a
leadership position in the Greater Golden Horseshoe and Greater
Toronto areas, while reporting net debt-to-capitalization
approaching 65% and EBITDA leverage around 6.0x.
Factors That Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Deterioration in liquidity profile, including accelerating
negative cash flow from operations;
- EBITDA interest coverage below 1.25x;
- Inventory to debt consistently below 1.0x;
- Net debt-to-capitalization consistently above 80%.
Liquidity and Debt Structure
Good Liquidity: Empire ended 2Q24 with CAD96.3 million of cash and
roughly CAD45 million of borrowing availability based on secured
assets of USD340 million under its USD480 million revolving credit
facility that matures in June 2027. Subsequent to the end of 2Q24,
Empire increased its secured assets under the facility, increasing
its borrowing availability. The company has sufficient liquidity to
fund seasonal working capital needs. Fitch expects EBITDA interest
coverage will be around 2.0x during the next few years. The
proposed notes offering, which will be used to repay its senior
unsecured notes due in December 2025, will further extend its debt
maturities.
Issuer Profile
Empire Communities Corp. is one of the largest private homebuilders
in North America. The company has leading market positions in the
Greater Golden Horseshoe and Greater Toronto areas in Canada and
has a small but growing presence in the U.S.
Summary of Financial Adjustments
Fitch adjusted historical and projected EBITDA to add back interest
expense included in cost of sales and also excludes impairment
charges and land option abandonment costs.
Fitch also included Empire's proportional share of unconsolidated
JV debt related to its high-rise projects.
Date of Relevant Committee
03 April 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
----------- ------ --------
Empire Communities
Corp.
senior unsecured LT B- New Rating RR4
ENVIVA INC: Common Stock To Be Delisted From NYSE
-------------------------------------------------
The New York Stock Exchange disclosed in a 25-NSE that it has
notified the Securities and Exchange Commission of its intention to
remove the Common Stock of Enviva Inc. from listing and
registration on the Exchange pursuant to the provisions of Rule
12d2-2(b) because, in the opinion of the Exchange, the Common Stock
is no longer suitable for continued listing and trading on the
Exchange.
NYSE Regulation reached its decision that the Company is no longer
suitable for listing pursuant to NYSE Listed Company Manual Section
802.01D after the Company's October 4, 2024 Form 8-K disclosure
that the Company and certain of its subsidiaries filed the Amended
Joint Chapter 11 Plan of Reorganization of Enviva Inc. and Its
Debtor Affiliates and a related Disclosure Statement for the
Amended Plan with the United States Bankruptcy Court for the
Eastern District of Virginia relating to the Company's March 12,
2024 voluntary petitions for reorganization under Chapter 11 of
Title 11 of the United States Code.
In reaching its delisting determination, NYSE Regulation notes that
pursuant to the Amended Plan, existing equity interests of the
Company will be cancelled and holders thereof will receive no
recovery.
On October 4, 2024, the Exchange determined that the Company's
Common Stock should be suspended from trading and directed the
preparation and filing with the Commission of this application for
the removal of the Common Stock from listing and registration on
the NYSE. The Company was notified on October 4, 2024. The Company
had a right to appeal to a Committee of the Board of Directors of
the Exchange the determination to delist the Common Stock, provided
it filed a written request for such a review with the Secretary of
the Exchange within 10 business days of receiving notice of the
delisting determination. On October 10, the Company informed the
Exchange that they will not be appealing the delisting
determination. Consequently, all conditions precedent under SEC
Rule 12d2-2(b) to the filing of this application have been
satisfied.
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.
EXTENDEDFIELDFORCE LLC: Gets Interim OK to Use Cash Collateral
--------------------------------------------------------------
ExtendedFieldForce LLC received interim approval from the U.S.
Bankruptcy Court for the Western District of Kentucky, Louisville
Division to use cash collateral to pay its operating expenses.
The court approved the use of cash collateral, noting that it is
essential to maintain the company's business operations and "avoid
immediate harm."
FundThrough USA, Inc. and CT Corporation System are listed as
secured creditors with interests in the cash collateral. The
validity of these claims, however, is yet to be determined.
As protection, FundThrough and CT will be granted replacement liens
on ExtendedFieldForce's post-petition property.
About ExtendedFieldForce LLC
ExtendedFieldForce, LLC sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. W.D. Ky. Case No. 24-32383) on
September 27, 2024, with up to $50,000 in assets and up to $1
million in liabilities. Michael Wheatley serves as Subchapter V
trustee.
Judge Joan A. Lloyd oversees the case.
Charity S. Bird, Esq., at Kaplan Johnson Abate & Bird, LLP
represents the Debtor as legal counsel.
FAYESON INC: Gets Final OK to Use Cash Collateral Until Dec. 7
--------------------------------------------------------------
Fayeson Inc. received final approval from the U.S. Bankruptcy Court
for the District of Colorado to use its cash collateral through
Dec. 7.
The final order, signed by Judge Kimberley Tyson, authorized the
company to use its cash collateral based on a submitted budget,
with a 15% weekly budget variance.
Creditors including Byline Bank, ClickLease LLC, Centra Funding
LLC, Finvest LLC, Slate Advance, Highland Hill Capital LLC, and
Resolve Corp. were granted replacement liens on Fayeson's
post-petition assets. This protection applies only to the extent of
any identifiable decrease in the value of their pre-bankruptcy
collateral.
About Fayeson Inc.
Fayeson Inc., doing business as Richey Inc., is a full-service shop
for trucks and trailers in Commerce City, Colo.
Fayeson filed Chapter 11 petition (Bankr. D. Colo. Case No.
24-15305) on September 9, 2024, with up to $1 million in assets and
up to $10 million in liabilities. Fayeson President Dion M. Swenson
signed the petition.
Judge Kimberley H. Tyson presides over the case.
The Debtor hired Fennemore Craig, P.C. as legal counsel.
FLAME NEWCO: S&P Upgrades ICR to 'B-' on Improved Profitability
---------------------------------------------------------------
S&P Global Ratings raised its issuer credit rating on Flame NewCo
LLC to 'B-' from 'CCC+' and raised its issue-level rating to 'B' on
the company's secured term loan maturing in 2028. The associated
recovery rating remains '2'.
The stable outlook reflects S&P's expectation that Flame will
maintain leverage of 3x to 4x as steel markets improve and the
company's recently negotiated contracts perform well while taking
into account potential for additional lease obligations to fund
future contracts and business.
Flame NewCo is on track for better profitability and cash
generation in 2024. The company's performance in the first half of
the year was stable with improved margins driven by gradually
improving operational efficiency, cost control, and better pricing
on contracts. EBITDA margins reached 20% as of June 30, 2024,
compared to 10% prior to bankruptcy in 2022. The contracts
negotiated as part of Flame's bankruptcy have improved the
company's overall contract duration and provide better earnings
stability through cost pass-through mechanisms and fixed-fee
contract components. S&P said, "Furthermore, we expect EBITDA to
increase in 2024 despite contraction in its revenue as steel
production has stagnated this year. We expect low-single digit
revenue growth in 2025 onward as we expect a recovery in customer
steel production levels, particularly after volumes declined in
2024 at international sites. With that, earnings should continue to
stabilize and moderately grow from contractual pricing adjustments,
opportunistic leasing of unused equipment and cost improvements
from ongoing investments in operational stability, and sustaining
investments that were delayed during the company's restructuring."
S&P sees potential for leverage to increase and cash flow (after
lease payments) to weaken within the next few years if Flame
acquires new contracts via lease obligations. Investments in new
customer sites can have long lead times and, in some instances,
take a couple of years to start generating earnings. To replace the
expiring and nonrenewable contracts, the company is exploring
opportunities with both new and existing customers that could
potentially yield EBITDA margins exceeding 25% and improve the
overall profitability of its contract portfolio. Furthermore, the
company is focusing on developing business in copper, stainless
steel, nickel, and other base metals as part of its diversification
strategy. The company is currently permitted to incur $80 million
in lease obligation under its credit agreement. As of June 30 2024,
our adjusted debt to EBITDA of 2.6x, reflected $147 million of debt
that included $38 million of lease obligations. S&P said, "Should
the company incur these additional obligations, we see potential
for lease cash payments to increase, which could pressure liquidity
and leverage before it realizes earnings from these new sites. The
company's debt burden will also increase over the next couple of
years as the term loan accrues payment-in-kind (PIK) interest.
However, over the next 12 months, we expect Flame's liquidity
sources to cover its cash outflow needs by more than 1.2x,
supported by $30 million of cash on hand and our assumption of cash
funds from operations (FFO) of $25 to $30 million and neutral
working capital."
S&P said, "The stable outlook reflects our expectation that Flame
will maintain leverage of 3x to 4x over the next 12 months as steel
markets improve and the company's recently negotiated contracts
perform in line with expectations while earning additional revenue
from opportunistic asset leases and taking into account potential
for additional lease obligations to fund future contracts and
business.
"We could lower our ratings on Flame NewCo within the next 12
months if we view the company's capital structure as unsustainable.
This could result if the company sustains negative FOCF or FOCF
does not improve sufficiently to cover incremental cash lease
payments, resulting in an expectation of sustained cash burn that
could subsequently pressure liquidity.
"We could raise the rating on Flame NewCo within the next 12 months
if the company is able to demonstrate a track record of improved
profitability, signaling a transition to sustainably generating
significant positive FOCF while considering lease payments and
while undertaking new projects to sustain and grow its business.
"Governance factors are a moderately negative consideration in our
credit rating analysis of Flame NewCo LLC. Our assessment of the
company's financial risk profile as highly leveraged reflects
corporate decision-making that prioritizes the interests of
controlling owners, in line with our view of most rated entities
owned by private-equity sponsors. Environmental factors have an
overall neutral influence since Flame provides outsourced
industrial services to steel mills in North America and
internationally. A provider of services to steel mills, the
company's greenhouse gas emissions are lower than steel producers.
However, Flame manages byproducts of steel production
-- Simulated year of default: 2026
-- EBITDA at emergence: $23 million
-- Implied enterprise value multiple: 5.5x
-- Gross enterprise value: $129 million
-- Net enterprise value (after 5% administrative costs): $122
million
-- Total collateral available to secured debt: $110 million
-- Estimated first-lien debt claim: $121 million
--Recovery expectation: 70% to 90% (rounded estimate: 80%)
—--Recovery rating: '2'
Note: Estimated claim amounts include about six months accrued but
unpaid interest.
FORGE FLIGHTWORKS: Glen Watson Named Subchapter V Trustee
---------------------------------------------------------
The Acting U.S. Trustee for Region 8 appointed Glen Watson, Esq.,
at Watson Law Group, PLLC as Subchapter V trustee for Forge
Flightworks Inc.
Mr. Watson will be paid an hourly fee of $425 for his services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. Watson declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Glen Watson, Esq.,
Watson Law Group, PLLC
1114 17th Av. S., Suite 201
P.O. Box 121950
Nashville, TN 37212
Telephone: (615) 823-4680
Email: glen@watsonpllc.com
About Forge Flightworks
Forge Flightworks Inc. -- https://www.forgeflightworks.com --
operates as a avionics service centre. The Company installs,
maintains, and repairs avionics systems, interiors, engines, and
airframe systems for general aviation aircraft, business jets, twin
turboprops, and single-engine piston airplanes. Forge Flightworks
serves in the State of Tennessee.
Forge Flightworks Inc. sought relief under Subchapter V of Chapter
11 of the U.S. Bankruptcy Code (Bankr. M.D. Tenn. Case No.
24-03831) on October 4, 2024. In the petition filed by Van Mark
Lee, chief executive officer, the Debtor disclosed estimated assets
between $500,000 and $1 million and estimated liabilities between
$1 million and $10 million.
Judge Nancy B. King oversees the case.
Dunham Hildebrand Payne Waldron, PLLC serves as the Debtor's
counsel.
FUELL INC: Seeks Chapter 7 Bankruptcy in Wisconsin
--------------------------------------------------
Micah Tol of Electrek reports that on October 16, 2024, FUELL INC.
filed for Chapter 7 bankruptcy with the US Bankruptcy Court for the
Eastern District of Wisconsin, under case number 24-25492.
This filing represents a significant move in the company's efforts
to restructure its finances. According to court documents, FUELL
INC. is seeking relief from its debts through this bankruptcy, with
Judge Katherine M. Perhach overseeing the proceedings. The
company's primary address for all correspondence and filings
related to the case is 1012 Main Street, Mukwonago, WI. A hearing
has been scheduled to confirm the bankruptcy plan, which is
anticipated to provide further details on the company's financial
obligations and restructuring efforts.
About FUELL INC.
FUELL INC. is the electric bicycle and e-motorcycle startup founded
by legendary motorcycle visionary Erik Buell.
FUELL INC. sought relief under Chapter 7 of the U.S. Bankruptcy
Code (Bankr. E.D. Wis. Case No. 24-25492) on October 16, 2024.
Honorable Bankruptcy Judge Katherine M. Perhach oversees the case.
The Debtor is represented by Paul G. Swanson of Swanson Sweet LLP.
GANDY'S TRANSPORT: Gets OK to Use Cash Collateral Until Nov. 25
---------------------------------------------------------------
Gandy's Transport, LLC received interim approval from the U.S.
Bankruptcy Court for the Northern District of Texas, Fort Worth
Division to use cash collateral until Nov. 25.
The court determined that the use of cash collateral is necessary
for the company to meet operational needs and fund the
administration of its bankruptcy case.
The approved budget for the period from Oct. 11 to Nov. 25, shows
projected expenses totaling $57,224. Significant expenses in the
budget include salaries, fuel, insurance and routine repairs, all
of which are essential for the continued operation of the
business.
The interim order includes provisions, granting secured creditors
replacement liens on Gandy's Transport's property and requiring the
company to provide adequate insurance coverage on collateral held
by secured creditors.
The final hearing is scheduled for Nov. 21. Objections are due by
Nov. 19.
About Gandy's Transport
Gandy's Transport, LLC is a transportation company that specializes
in freight and logistics services. Based in Fort Worth, Texas, the
company operates within the trucking industry, providing reliable
transport solutions for various goods and cargo.
Gandy's Transport sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Texas Case No. 24-43354) on September
19, 2024, listing under $1 million in both assets and liabilities.
Judge Edward L. Morris oversees the case.
M. Jermaine Watson, Esq. -- jwatson@canteyhanger.com -- at Cantey
Hanger LLP, serves as the Debtor's legal counsel.
GEO PARENT: Moody's Withdraws 'B2' CFR Following Debt Repayment
---------------------------------------------------------------
Moody's Ratings withdrew all ratings of Geo Parent Corporation
("GeoStabilization" or "GSI"). The ratings withdrawn include the B2
Corporate Family Rating,B2-PD probability of default rating, and
the B2 backed senior secured first lien bank credit facility. Prior
to the withdrawal the rating outlook was stable. This rating action
follows the repayment of the company's rated debt following the
sale of the company to Leonard Green & Partners, L.P.
RATINGS RATIONALE
Moody's have withdrawn the ratings as a result of the full
repayment and termination of the rated credit facility due 2028.
Headquartered in Westminster, CO, Geo Parent Corporation provides
geohazard mitigation solutions for the restoration and maintenance
of roadways and other vital infrastructure. The company operates
across the US, Canada, and New Zealand.
GLORY PROJECT: U.S. Trustee Unable to Appoint Committee
-------------------------------------------------------
The U.S. Trustee for Region 16 disclosed in a court filing that no
official committee of unsecured creditors has been appointed in the
Chapter 11 case of Glory Project, LLC.
About Glory Project
Glory Project, LLC is a Tarzana, Calif.-based company engaged in
renting and leasing real estate properties.
Glory Project filed Chapter 11 petition (Bankr. C.D. Calif. Case
No. 24-11563) on September 18, 2024, with $1 million to $10 million
in both assets and liabilities.
Judge Victoria S. Kaufman oversees the case.
Susan K. Seflin, Esq., at BG Law, LLP is the Debtor's legal
counsel.
GOLD'S GYM: Recoups $7.85-Mil. from Bankruptcy Estate
-----------------------------------------------------
Estes Thorne Ewing & Payne said that on October 17, 2024, a federal
bankruptcy court judge in Dallas has awarded $5 million, plus
attorneys' fees, to compensate RSG Group USA for the non-disclosure
of a post-petition, seven-year global licensing agreement of the
iconic brand, which previous management executed without bankruptcy
court approval.
RSG Group USA bought the company's assets at auction in 2020 for
nearly $100 million with the goal of reinvesting in and
reinvigorating the iconic brand after years of venture capital
ownership, which culminated in its bankruptcy filing during the
COVID pandemic.
RSG Group USA discovered the existence of the post-petition global
license of Gold's Gym's valuable trademarks after winning the
bankruptcy auction and executing a purchase agreement that did not
list the new license in any of its schedules. Unlike a typical
"buyer beware" scenario, RSG Group USA had negotiated robust
representations and warranties to ensure that it was acquiring
Gold's Gym's valuable intellectual property assets, including its
trademarks, "free and clear" of all "encumbrances" unless disclosed
in the purchase agreement.
RSG Group USA was ultimately able to negotiate a buyout of the
undisclosed license agreement in March 2021, allowing it to move
forward with its plans to revitalize the Gold's Gym brand around
the world, but not without incurring significant legal fees and
expenses to do so. What followed was a three-year legal battle to
recoup the damages caused by failure to identify and disclose the
post-petition licensing agreement during the bankruptcy process.
Dallas attorneys Dawn Estes, Jennifer Henry, and Kim Winnubst of
Estes Thorne Ewing & Payne PLLC represented RSG Group USA together
with Sam Maisel and Casey Doherty of Dentons at the two-week trial
heard in May and June 2023 by Judge Scott Everett of the United
States Bankruptcy Court for the Northern District of Texas, Dallas
Division. Shelby Angel, General Counsel for RSG Group USA, and
Susan Hannagan, Senior Counsel for RSG Group USA, managed and
guided the litigation internally for RSG.
"This was a complex case with a number of intricate legal and
factual layers to sort through. We are thankful to Judge Everett
for taking his time in exploring the facts in issuing his opinion,"
Estes said of the court’s final 74-page ruling awarding RSG $5
million, plus legal fees and costs. The parties agreed to dismiss
all appeals after reaching an agreement on the $7.85 million total,
including fees and expenses, to be paid to RSG Group USA. A
malpractice suit filed by the bankruptcy trustee against Dykema,
the law firm that represented the debtors in the bankruptcy case,
is still ongoing.
About Gold's Gym
Founded in 1965, Gold's Gym operates a network of company-owned and
franchised fitness centers. It owns and operates approximately 95
gyms domestically, and holds franchise agreements for more than 600
gyms domestically and internationally. Its majority owner is TRT
Holdings, Inc. -- acquired the business in 2004.
GGI Holdings, LLC, Gold's Gym International, Inc., and other
related entities sought Chapter 11 protection (Bankr. N.D. Tex.
Lead Case No. 20-31318) on May 4, 2020.
GGI Holdings was estimated to have assets and debt of $50 million
to $100 million.
The Hon. Harlin Dewayne Hale is the case judge.
The Debtors tapped Dykema Gossett PLLC as bankruptcy counsel. BMC
Group Inc. is the claims agent.
GREAT CANADIAN: S&P Rates New Revolving Credit Facility 'B+'
------------------------------------------------------------
S&P Global Ratings assigned its 'B+' issue-level rating and '2'
recovery rating to Great Canadian Gaming Corp.'s (GCGC) proposed
US$215 million revolving credit facility and US$665 million term
loan B. The '2' recovery rating indicates its expectation for
substantial recovery (70%-90%; rounded estimate: 85%) in a
simulated default scenario. S&P's 'B' issuer credit rating and
negative outlook on GCGC are unchanged. The company is currently
refinancing its capital structure and will use the proceeds from
the refinancing to repay existing secured debt and extend debt
maturity to 2029.
ISSUE RATINGS - RECOVERY ANALYSIS
Key analytical factors:
-- S&P's simulated default scenario incorporates the assumption
that GCGC will default in 2027, following a prolonged period of
weak macroeconomic conditions, particularly in B.C. and Ontario,
that leads to a sharp reduction in gaming activity.
-- S&P assumes that GCGC would be reorganized or sold as a going
concern as opposed to being liquidated. S&P believes that if the
company were to default, there would continue to be a viable
business model, given its position as the leading gaming operator
in Canada. Furthermore, S&P expects that the provincial Crown
corporations would be motivated to ensure that GCGC's properties
remain operational.
-- S&P assumes that no value from the GTA bundle is available to
GCGC creditors.
-- S&P's recovery analysis yields a net default enterprise value
of C$1.37 billion.
-- This is based on a 7.0x multiple of C$206 million of S&P's
emergence EBITDA estimates and 5% administrative expenses.
-- The credit facility, term loan, and other secured debt are pari
passu in terms of collateral. As a result, S&P estimates
substantial (70%-90%; rounded estimate: 85%) recovery of the debt,
leading to a '2' recovery rating and an issue-level rating of
'B+'.
Simulated default assumptions:
-- Default year: 2027
-- Emergence EBITDA: C$206 million
-- EBITDA multiple: 7.0x
-- Gross recovery value: C$1.44 billion
Simplified waterfall:
-- Net recovery value for waterfall after administration expenses
(5%): C$1.37 billion
-- Estimated senior secured claim: C$1.6 billion
-- Value available for senior secured claim: C$1.37 billion
-- Recovery range: 70%-90% (rounded estimate: 85%)
GRIFFIN RESOURCES: Lisa Holder Named Subchapter V Trustee
---------------------------------------------------------
The U.S. Trustee for Region 17 appointed Lisa Holder, Esq., a
practicing attorney in Bakersfield, Calif., as Subchapter V trustee
for Griffin Resources, LLC.
Ms. Holder will be paid an hourly fee of $300 for her services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Ms. Holder declared that she is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Lisa Holder, Esq.
3710 Earnhardt Drive
Bakersfield, CA 93306
Phone: (661) 205-2385
Email: lholder@lnhpc.com
About Griffin Resources
Griffin Resources, LLC is a manufacturer of animal foods based in
Camarillo, Calif.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D. Calif. Case No. 24-12873) on October
2, 2024, with $50 million to $100 million in assets and $100,000 to
$500,000 in liabilities. Stephen J. Griffin, managing member,
signed the petition.
Judge Jennifer E. Niemann presides over the case.
Riley C. Walter, Esq., at Wanger Jones Helsley represents the
Debtor as legal counsel.
HECO: S&P Withdraws 'B' Rating on Commercial Paper Program
----------------------------------------------------------
S&P Global Ratings withdrew its rating on Hawaiian Electric Co.
Inc.'s (HECO) commercial paper program at the issuer's request. At
the time of the withdrawal, the 'B' rating on HECO's commercial
paper program was on CreditWatch with negative implications, where
S&P placed it on Aug. 26, 2024.
HUDSON RIVER: S&P Rates New $2.35BB Sr. Secured Term Loan B 'BB-'
-----------------------------------------------------------------
S&P Global Ratings assigned its 'BB-' issue rating to Hudson River
Trading LLC's (HRT; BB-/Positive/--) new $2.35 billion senior
secured term loan B due 2030. The proceeds of the new loan will be
used to repay the existing $2.1 billion term bank loan (maturing in
2028) and to support continued expansion of HRT's trading business
and liquidity.
The net additional debt resulting from this transaction will have
no rating impact because S&P doesn't expect it to materially erode
the firm's risk-adjusted capital (RAC) ratio. Despite recent
considerable growth in its balance sheet, S&P expects HRT's pro
forma RAC ratio to remain well above 10% with the upsized debt
versus 14.8% as of June 30, 2024, largely owing to strong earnings
and retention.
The positive outlook on the long-term issuer credit rating
indicates its expectation that HRT will maintain supportive
liquidity, capitalization, and operational performance as it
continues to expand its trading operations and manage risk.
INDIVIDUALIZED ABA: Gina Klump Named Subchapter V Trustee
---------------------------------------------------------
The U.S. Trustee for Region 17 appointed Gina Klump, Esq., at the
Law Office of Gina R. Klump, as Subchapter V trustee for
Individualized ABA Services for Families LLC.
Ms. Klump will be paid an hourly fee of $500 for her services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Ms. Klump declared that she is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Gina Klump, Esq.
Law Office of Gina R. Klump
11 5th Street, Suite 102
Petaluma, CA 94952
Phone: (707) 778-0111
Email: gklump@klumplaw.net
About Individualized ABA Services for Families LLC
Individualized ABA Services for Families LLC sought relief under
Subchapter V of Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D.
Cal. Case No. 24-41559) on October 2, 2024. In the petition filed
by Raajna Naidu, as CEO, the Debtor reports total assets of
$193,244 and total liabilities of $1,635,914.
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
JERICO PICTURES: Aleida Martinez Molina Named Subchapter V Trustee
------------------------------------------------------------------
The U.S. Trustee for Region 21 appointed Aleida Martinez Molina,
Esq., as Subchapter V trustee for Jerico Pictures, Inc.
Ms. Molina will be paid an hourly fee of $450 for her services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Ms. Molina declared that she is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Aleida Martinez Molina, Esq.
2121 NW 2nd Avenue, Suite 201
Miami, FL 33127
Telephone: (305) 297-1878
Email: Martinez@subv-trustee.com
About Jerico Pictures
Jerico Pictures, Inc. sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. S.D. Fla. Case No. 24-20281) on
October 2, 2024, with as much as $50,000 in both assets and
liabilities.
Judge Scott M. Grossman presides over the case.
Angelo A. Gasparri, Esq. represents the Debtor as legal counsel.
JMG VENTURES: Gets Final OK to Use Cash Collateral
--------------------------------------------------
JMG Ventures, LLC received final approval from the U.S. Bankruptcy
Court for the Western District of Wisconsin to use its lenders'
cash collateral.
The final order, signed by Judge Beth Hanan, authorized the company
to use cash collateral to pay its expenses consistent with its
budget, with a 10% cushion for variances.
To protect lenders, the order required JMG to grant replacement
liens to Wisconsin Bank & Trust, the U.S. Small Business
Administration and several merchant cash advance companies (MCAs)
with pre-bankruptcy liens on the cash collateral.
In addition, Wisconsin Bank & Trust, the lender holding a judgment
of $84,445.72 against JMG, will receive monthly payments of
$1,600.
About JMG Ventures
JMG Ventures, LLC is a limited liability company in Middleton,
Wis., which conducts business under the name Middleton Jewelers.
JMG Ventures filed Chapter 11 petition (Bankr. W.D. Wis. Case No.
24-11650) on August 19, 2024, with $100,000 to $500,000 in assets
and $1 million to $10 million in liabilities. Manmeet Soin,
managing member, signed the petition.
Judge Beth E. Hanan oversees the case.
The Debtor is represented by Eliza M. Reyes, Esq., at Richman &
Richman, LLC.
KND HOSPITALITY: Gets Interim OK to Use Cash Collateral
-------------------------------------------------------
KND Hospitality Company, Inc. received interim approval from the
U.S. Bankruptcy Court for the Northern District of Texas, Dallas
Division to use the cash collateral of its secured creditors.
The interim order, signed by Judge Michelle Larson, authorized the
company to use the cash collateral of Velocity Capital Group and
United First, LLC to pay its expenses as set forth in its budget.
The budget shows total projected expenses of $87,400.
As adequate protection, secured creditors were granted
post-petition liens that are co-extensive with their pre-bankruptcy
liens on KND's property, which includes accounts and other cash
collateral.
In addition, KND Hospitality was ordered to make monthly payments
to its secured creditors. Velocity Capital will receive $2,000
starting Nov. 1 while United First will receive $3,000 starting
Nov. 15, 2024.
The final hearing is scheduled for Nov. 5.
About KND Hospitality Company
KND Hospitality Company, Inc. operates primarily in the hospitality
sector, focusing on providing catering and consulting services.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Texas Case No. 24-33108) on Oct. 1,
2024, with $100,001 to $500,000 in assets and $500,001 to $1
million in liabilities.
Judge Michelle V. Larson oversees the case.
The Debtor is represented by Gregory Wayne Mitchell, Esq., at
Freeman Law, PLLC.
LEARNINGSEL LLC: Gets Final OK to Use Cash Collateral
-----------------------------------------------------
LearningSEL, LLC and its affiliates received final approval from
the U.S. Bankruptcy Court for the District of Arizona to use cash
collateral to fund its operations during the bankruptcy process.
The court's order authorized the companies to utilize cash
collateral for post-petition operating expenses in accordance with
its budget, which shows total monthly expenses of $44,895 to
$49,895.
Glen Mackey, a secured creditor, will receive a $10,756.76 monthly
payment, including administrative fees to ensure that the
creditor's interests are safeguarded during the bankruptcy
proceedings.
About LearningSEL LLC
LearningSEL, LLC is a provider of social and emotional learning
training and professional development services.
LearningSEL and its affiliate, Paths Program Holding, LLC, sought
relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D.
Ariz. Case No. 24-07015 and 24-07033) on August 23, 2024. On
September 11, 2024, Paths Program, LLC filed Chapter 11 petition
(Bankr. D. Ariz. Case No. 24-07580). The cases are jointly
administered under Case No. 24-07015.
At the time of the filing, LearningSEL reported total assets of
$703 and total liabilities of $1,543,051
Judge Paul Sala oversees the cases.
The Debtors are represented by D. Lamar Hawkins, Esq., at Guidant
Law, PLC.
LEGACY ENTERPRISES: Joseph Frost Named Subchapter V Trustee
-----------------------------------------------------------
The U.S. Bankruptcy Administrator for the Eastern District of North
Carolina appointed Joseph Frost, Esq., as Subchapter V trustee for
Legacy Enterprises of North America, Ltd.
Mr. Frost, a member of the law firm of Buckmiller, Boyette & Frost,
PLLC, will be paid an hourly fee of $350 for his services as
Subchapter V trustee.
About Legacy Enterprises of North America
Legacy Enterprises of North America, Ltd. sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D.N.C. Case No.
24-03477) on October 4, 2024, with $100,000 to $500,000 in assets
and $1 million to $10 million in liabilities. David Faulk,
president, signed the petition.
Judge Joseph N. Callaway presides over the case.
George Mason Oliver, Esq. at The Law Offices of Oliver & Cheek,
PLLC represents the Debtor as bankruptcy counsel.
LIVEONE INC: Craig Foster Steps Down from the Board of Directors
----------------------------------------------------------------
LiveOne, Inc. disclosed in a Form 8-K Report filed with the U.S.
Securities and Exchange Commission that Craig Foster resigned from
service on the Company's board of directors, effective as of
October 4, 2024, to pursue other current professional obligations.
At the time of his resignation, Mr. Foster served on the Audit
Committee and the Nominating and Corporate Governance Committee of
the Board.
Mr. Foster's resignation is not a result of any disagreement with
the Company on any matter relating to the Company's operations,
policies or practices.
To fill the vacancy created by Mr. Foster's resignation, the
Company anticipates that one or more existing independent members
of the Board will be appointed to its Audit Committee and/or the
Nominating and Corporate Governance Committee and will also conduct
a search to find a well-qualified candidate to serve on the Board
and/or such committees that has the applicable experience and the
necessary qualifications, skills and perspective.
About LiveOne
Headquartered in Los Angeles, Calif., LiveOne, Inc. (NASDAQ: LVO)
(formerly known as LiveXLive Media, Inc.) is a creator-first,
music, entertainment, and technology platform focused on delivering
premium experiences and content worldwide through memberships and
live and virtual events. LiveOne's wholly-owned subsidiaries
include Slacker Radio, PodcastOne (Nasdaq: PODC), PPVOne, CPS,
LiveXLive, DayOne Music Publishing, Drumify and Splitmind. LiveOne
is available on iOS, Android, Roku, Apple TV, Spotify, Samsung,
Amazon Fire, Android TV, and through STIRR's OTT applications. For
more investor information, please visit ir.liveone.com.
Los Angeles, Calif.-based Macias Gini & O'Connell LLP, the
Company's auditor since 2022, issued a "going concern"
qualification in its report dated July 1, 2024, citing that the
Company has suffered recurring losses from operations, negative
cash flows from operating activities and has a net capital
deficiency. These matters raise substantial doubt about the
Company's ability to continue as a going concern.
As of June 30, 2024, LiveOne had $64.63 million in total assets,
$58.02 million in total liabilities, and $6.61 million in total
equity.
MAGNOLIA SENIOR LIVING: No Decline in Resident Care, PCO Reports
----------------------------------------------------------------
Melanie McNeil, the court-appointed patient care ombudsman, filed
with the U.S. Bankruptcy Court for the Northern District of Georgia
her third report regarding the quality of patient care provided at
Magnolia Senior Living, LLC's long-term care facility.
The Ombudsman Representative (OR) for the Office of the State
Long-Term Care Ombudsman (OSLTCO) visited the facility on August
20. The resident census was 41. The OR visited with eleven
residents, administrator, and maintenance staff. No complaints were
made.
The OR reported that the administration was not responsive to
concerns about the temperature in the facility. The OR noted that
resident rooms were either extremely hot or extremely cold. The OR
noted concerns about adequate supply of food and supplies. OR noted
no decline in resident care.
The OR also visited on September 16, The resident census was 42.
The OR spoke with 25 residents, the person in charge, nurses,
maintenance and dietary staff. The visit was similar to the visit
in August. No complaints were raised.
The PCO concluded that she is not aware of any significant change
in facility conditions or decline in resident care for this
personal care home since the appointment.
A copy of the ombudsman report is available for free at
https://urlcurt.com/u?l=a1jUeW from PacerMonitor.com.
The ombudsman may be reached at:
Melanie S. McNeil
State Long-Term Care Ombudsman
Office of the State Long-Term Care Ombudsman Division
of Aging Services, Department of Human Services
47 Trinity Avenue, S.W., Room 1136
Atlanta, GA 30334
Tel: (404) 416-0211
About Magnolia Senior Living
Magnolia Senior Living, LLC is a Georgia limited liability company
which owns and operates an assisted living facility in Loganville,
GA.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Ga. Case No. 24-52830) on March 19,
2024, with $1 million to $10 million in both assets and
liabilities. Zhicong Chen, authorized agent, signed the petition.
Judge Wendy L. Hagenau presides over the case.
Cameron M. McCord, Esq., at Jones & Walden, LLC represents the
Debtor as legal counsel.
Melanie S. McNeil was appointed as patient care ombudsman in the
Debtor's case.
MAGNOLIA SENIOR: No Decline in Resident Care, 3rd PCO Report Says
-----------------------------------------------------------------
Melanie McNeil, the court-appointed patient care ombudsman, filed
with the U.S. Bankruptcy Court for the Northern District of Georgia
her third report regarding the quality of patient care provided at
Magnolia Senior Living @SugarHill LLC's long-term care facility.
The Ombudsman Representative (OR) for the Office of the State
Long-Term Care Ombudsman (OSLTCO), visited the facility with the
admission director on August 20. The resident census was 50. No
complaints were made. The staffing seems stable.
The OR noted no concerns with the building, supplies, or quality of
care. The OR noted no decline in resident care. The OR visited with
six residents, the person in charge, direct care and activities
staff on September 20. The situation remains stable. The OR
received no complaints at this visit.
The PCO concluded that she is not aware of any significant change
in facility conditions or decline in resident care for this
personal care home since the appointment.
A copy of the ombudsman report is available for free at
https://urlcurt.com/u?l=cIVvIg from PacerMonitor.com.
The ombudsman may be reached at:
Melanie S. McNeil
State Long-Term Care Ombudsman
Office of the State Long-Term Care Ombudsman Division
of Aging Services, Department of Human Services
47 Trinity Avenue, S.W., Room 1136
Atlanta, GA 30334
Tel: (404) 416-0211
About Magnolia Senior Living @SugarHill
Magnolia Senior Living @SugarHill, LLC is a Georgia limited
liability company, which owns and operates an assisted living
facility in Sugar Hill, Ga.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Ga. Case No. 24-52814) on March 18,
2024, with up to $50,000 in assets and up to $10 million in
liabilities. Zhicong Chen, authorized agent, signed the petition.
Judge Sage M. Sigler oversees the case.
Cameron M. McCord, Esq., at Jones & Walden, LLC represents the
Debtor as legal counsel.
Melanie S. McNeil was appointed as patient care ombudsman in the
Debtor's case.
MATTHEW SAND: Bankruptcy 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
Matthew Sand & Gravel, Inc.
About Matthew Sand & Gravel
Matthew Sand & Gravel, Inc. filed a Chapter 11 petition (Bankr.
D.N.C. Case No. 24-03237) on September 18, 2024, with up to
$500,000 in assets and up to $50,000 in liabilities.
Judge Pamela W. Mcafee oversees the case.
J.M. Cook, P.A. is the Debtor's legal counsel.
MAVENIR PRIVATE: S&P Cuts ICR to 'CCC-' On Upcoming Debt Maturity
-----------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on Mavenir
Private Holdings II Ltd. to 'CCC-' from 'CCC'.
The negative outlook reflects the company's weak liquidity and the
high likelihood of a default or restructuring over the next six
months.
Mavenir has $133 million of its 14.25% payment-in-kind (PIK) senior
notes (not rated) maturing on Jan. 31, 2025. S&P does not believe
Mavenir has sufficient liquidity to repay this debt obligation.
S&P said, "We do not believe Mavenir can repay the outstanding
balance on its $133 million term loan obligation maturing in
January 2025. As of July 31, 2024, the company had about $17
million cash on the balance sheet and about $32 million
availability on its senior secured revolving credit facility
(Mavenir obtained a waiver from lenders to allow it to draw up to
$75 million). Mavenir has about $133 million PIK senior notes
outstanding (due Jan. 31, 2025). We forecast a free operating cash
flow deficit of about $30 million over the next six months.
Therefore, absent a maturity extension or capital infusion, we
believe the company will likely default on this debt when it comes
due.
"Weak operating performance is straining cash flow and liquidity.
We attribute Mavenir's underperformance to weakness in its key
customer revenue and high research and development (R&D) expenses
in the Mobile Access & Edge (also known as OpenRAN) business, which
we expect will continue in the near term. Despite its cost-saving
initiatives, Mavenir must maintain high R&D spending to avoid
harming its competitive position. While the company raised $100
million of equity capital last year, we believe it will need an
additional $120 million to cover its cash outflow over the next six
months and the upcoming maturity in January 2025."
The negative outlook reflects Mavenir's weak liquidity and the high
likelihood of a default or restructuring over the next six months.
S&P could lower its rating if Mavenir:
-- Cannot fully repay or extend the maturity on its upcoming
senior notes due January 2025; or
-- Pursues a transaction that we consider tantamount to a default,
including a subpar exchange.
S&P could raise the rating if Mavenir:
-- Extends its term loan maturity; or
-- Secures alternative financing that provides liquidity
visibility comfortably beyond six months.
S&P said, "Governance factors are a moderately negative
consideration in our analysis of Mavenir, as it is 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 controlling
owners. This also reflects private equity sponsors' generally
finite holding periods and focus on maximizing shareholder
returns."
MERCER INT'L: Fitch Assigns B+ LongTerm IDR, Outlook Stable
-----------------------------------------------------------
Fitch Ratings has assigned a first time Long-Term Issuer Default
Rating (IDR) of 'B+' to Mercer International Inc. (Mercer). Fitch
has also assigned a long-term rating of 'B+' with a Recovery Rating
of 'RR4' to Mercer's existing and proposed unsecured debt. The
Rating Outlook is Stable.
Mercer's 'B+' rating reflects the favorable cost position of its
pulp and wood facilities, adequate liquidity position to sustain
through recent weak pulp and lumber conditions, its long-term
growth capex strategy, and a shift in priorities to reduce total
debt over time. In addition, it incorporates the cyclically high
EBITDA leverage and financial flexibility associated with its fully
unsecured capital structure.
Key Rating Drivers
Cyclically High Leverage: Fitch believes Mercer is at a cyclically
high EBITDA leverage point, which was approximately 7.2x at LTM
June 2024. Fitch expects it will gradually converge toward its
sensitivity levels as market conditions in both Pulp and Solid Wood
normalize through the forecast period. Fitch also expects Mercer
will have less operational downtime going forward which should
positively impact EBITDA.
Pricing for both pulp and lumber is expected to be slightly
positive going into 2025 in an improving rate environment, although
its rating remains highly sensitive to these variable commodity
prices. Mercer added debt starting in 2021 to fund acquisitions and
expansion capex to build out its wood products business,
expenditures Fitch expects will be moderated during the forecast
period. Management has also stated an increased focus on
deleveraging.
Manageable Refinancing Risk: Fitch expects the relatively small
($300 million) 2026 maturity to be addressed in the near term with
a mix of balance sheet cash and the proposed unsecured notes. This
would leave the company with a reasonable amount of runway until
the next maturities of $400 million in September 2028 and $875
million in January 2029. Fitch notes, however, that failure to
secure financing on similar or better terms to the recently issued
2028 unsecured bonds (12.875% coupon) would demonstrate weakened
access to capital markets and could exert downward rating
pressure.
Favorable Cost Position: Mercer's Pulp segment, which currently
represents 75% of EBITDA, benefits from a favorable global cost
position (roughly middle 2nd quartile) due to modern, efficient
pulp mills, proximity to raw materials, and favorable fiber
procurement arrangements. As such, Mercer has a good ability to
generate positive cash flows throughout the cycle. Pulp prices are
expected to remain stable through the forecast period, supporting
its view that EBITDA growth will lead to slow deleveraging.
Diversification Strategy: Fitch expects Mercer to continue to
invest in its Solid Woods businesses with a goal of enhancing the
cost positioning and EBITDA generation of these higher value-added
products. Mercer conducted a series of acquisitions in this
business totaling approximately $400 million through 2023, and
management aims to continue to diversify into higher value-added
products (engineered wood products and biofuels) to a level
approaching pulp earnings, thereby reducing sensitivity to cyclical
commodity pricing and improving earnings consistency.
Adequate Liquidity and Flexibility: Mercer holds around $580
million in liquidity from revolver availability and cash as of June
30, 2024, providing an adequate cushion to operate through several
years of depressed pricing and negative FCF generation. Fitch's
ratings are sensitive to liquidity deterioration that would
materially reduce this cushion. The absence of secured debt in the
capital structure enhances both financial flexibility and
flexibility around refinancing.
Balanced Capital Allocation Policy: Mercer's capital allocation
policy is balanced between a modestly expansive capex program,
modest shareholder returns, and a goal of managing EBITDA leverage
to below current levels. Dividends are approximately $20 million
annually, which is not expected to change meaningfully in the
forecast period. No share repurchases are anticipated. Fitch
believes management's target leverage ratio is below current
levels, but does not foresee any significant decrease in gross debt
as the capex strategy is likely to be funded with existing cash and
revolver availability.
Derivation Summary
Mercer International's main competitors within Fitch's publicly
rated universe are Domtar Corporation (BB-/Stable), Sylvamo
Corporation (BB+/Stable) and Klabin S.A. (BB+/Stable).
Domtar is nearly five times larger in terms of revenue generated
and, in addition to manufacturing and selling pulp, generates and
sells uncoated free-sheet paper. Domtar's product mix is marginally
more developed than Mercer's which helps maintain earnings during
trough periods in volatile markets. Domtar recently acquired
Resolute, which increased leverage and has been further impacted by
weak lumber prices.
Mercer's Solid Wood segment operates in a lower position on the
cost curve due to location of the facilities and facility
structure. The pulp mills are comparable in cost positioning.
Domtar is able to maintain a rating one notch higher partially due
to lower forecast leverage and superior FCF generation.
Klabin S.A.'s historical EBITDA margins typically between 30% and
40% are considerably higher than Mercer's EBITDA margins between
3.8% and 26.4%, due to the former's leading scale and low-cost
position in pulp products. Klabin's margins are also more
consistent despite operating in the same cyclical pulp industry.
Klabin does have significant exposure to the fast-growing Brazil
market, while Mercer has more exposure to China.
Sylvamo is a top three producer of uncoated freesheet in LatAm,
Europe and North America with strong FCF generation and a balanced
capital allocation strategy. The company carries leverage
meaningfully below its publicly stated leverage target. Fitch sees
Sylvamo as having a profitable and lengthy runway in the uncoated
freesheet segment despite the long-term trends affecting the
sector. Furthermore, the prudent capital allocation strategy lowers
the credit risk of the company.
Key Assumptions
For the base case:
- Lumber prices remain subdued during majority of forecast period,
reflecting a higher than expected interest rate environment and
subdued housing activity;
- Generally supportive pulp market;
- Projects completed on schedule with improvements to Solid Woods
segment profitability;
- Dividends and capex in line with management guidance;
- 2026 bonds repaid with $100 million in cash and $200 million in
incremental unsecured bonds;
- Refinancing of debt at maturities modestly increases interest
expense without material decrease in gross debt outstanding.
Recovery Analysis
The following are Fitch's key recovery rating assumptions:
- The recovery analysis assumes that Mercer would be reorganized as
a going concern in bankruptcy rather than liquidated;
- A bankruptcy scenario could result from a steeper and longer than
anticipated trough in the pulp and lumber markets that consistently
compresses margins around 2023 levels, leading to a liquidity
crisis;
- Unsecured bonds issued by Mercer are structurally subordinated to
the Canadian revolver, German revolver, and German demand loan as a
result of no subsidiaries guaranteeing the debt, thus the unsecured
bonds are holding company obligations;
- Fitch assumes the revolver is 100% drawn;
- Fitch has assumed a 10% administrative claim.
Going Concern (GC) Approach
Fitch assigned a GC EBITDA of $250 million, representing what Fitch
believes Mercer could reasonably generate in a recovering pulp and
lumber market as the company emerges from bankruptcy.
Fitch typically assigns EV/EBITDA multiples between 4.5x and 6.0x
for packaging peers. Mercer's exposure to volatile end markets,
favorable cost positioning, and weak FCF generation leads Fitch to
use a 5.5x multiple.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Midcycle EBITDA leverage consistently below 3.5x;
- Consistent track record of using positive FCF generation to
reduce debt;
- Increased diversification of product mix leading to lower
earnings volatility.
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Midcycle EBITDA leverage consistently above 4.5x;
- Sustained negative FCF or prolonged EBITDA margin deterioration;
- Shift in financial policies that prioritizes shareholder returns
over deleveraging.
Liquidity and Debt Structure
Adequate Liquidity: As of June 30, 2024, Mercer had $263 million of
cash on hand and $317 million available under its revolving credit
facilities. Fitch forecasts the challenging market conditions for
both pulp and lumber to continue into 2025, before a gradual
recovery begins in 2026. Fitch anticipates liquidity to remain
healthy during this period and potentially improve in the future
with the completion of growth capex projects that are forecast to
improve profitability.
Manageable Maturities: The company's revolving credit facilities
mature in 2027 and one of the unsecured notes matures in 2026,
followed by unsecured bond maturities in 2028 and 2029, giving the
company time to repay or refinance the debt. Fitch believes
relatively recent unsecured bond issuance and fully unsecured
capital structure, which is broadly syndicated, will aid the
company's refinancing efforts. If the company were to issue another
unsecured bond to refinance the 2026 maturity, interest expense
would likely rise relative to existing unsecured bonds due to an
increase in interest rates.
Issuer Profile
Mercer manufactures market pulp and solid wood products in nine
facilities located in Germany, Canada and the U.S. The Pulp segment
is largely Northern Bleached Softwood Kraft. The Solid Wood segment
consists of lumber, manufactured products, pallets, biofuels and
energy.
Date of Relevant Committee
October 18, 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
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Mercer International Inc. LT IDR B+ New Rating
senior unsecured LT B+ New Rating RR4
NANOVIBRONIX INC: Fails to Regain Nasdaq Compliance, Seeks Hearing
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As previously disclosed, on April 10, 2024, NanoVibronix, Inc.
received a letter from the Listing Qualifications Department of The
Nasdaq Stock Market LLC indicating that the Company did not meet
the minimum bid price of $1.00 per share required for continued
listing on The Nasdaq Capital Market pursuant to Nasdaq Listing
Rule 5550(a)(2) for the previous 30-consecutive business day
period. In accordance with the Nasdaq Listing Rules, the Company
was granted a 180-calendar day period to regain compliance with the
Rule, or until October 7, 2024.
The Company did not regain compliance with the Rule by October 7,
2024, and on October 8, 2024, the Staff notified the Company that
the Company's securities were subject to delisting from Nasdaq
unless the Company timely requests a hearing before the Nasdaq
Hearings Panel (the "Panel"). The Company plans to timely request a
hearing before the Panel, which request will stay any further
action by Nasdaq at least pending completion of the hearing and the
expiration of any extension that may be granted by the Panel.
The Company is considering all available options to regain
compliance with the Rule, however, there can be no assurance that
the Panel will grant the Company's request for continued listing or
that the Company will be able to evidence compliance with the Rule
within any extension of time that may be granted by the Panel.
About NanoVibronix
Elmsford, N.Y.-based NanoVibronix, Inc., a Delaware corporation,
commenced operations on October 20, 2003, and is a medical device
company focusing on noninvasive biological response-activating
devices that target wound healing and pain therapy and can be
administered at home without the assistance of medical
professionals.
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, it has incurred losses in the amount of approximately
$588,000 during the three months ended March 31, 2024, as it
continues to maintain significant net operating losses from
operations. The Company also had negative cash flow from operating
activities of $579,000 for the three months ended March 31, 2024.
The Company had a cash balance of just over $2,700,000 as of March
31, 2024, and it expects to continue to incur losses and negative
cash flows from operating activities. Due to the continued expected
negative cash flow from operations and the potential arbitration
payment, if it is unsuccessful in its appeals, the Company does not
have sufficient resources to fund operations for at least 12 months
after the filing of the report, raising substantial doubt about its
ability to continue as a going concern.
Carlo Broos, Interim CFO of Cibus, Inc. filed a Form 3 Report with
the U.S. Securities and Exchange Commission, disclosing direct
beneficial ownership of 58,344 shares of Class A Common Stock. The
report includes 16,544 shares in the form of Restricted Stock
Units, of which 4,081 are vested while the remaining 12,463 shares
have yet to vest.
NETCAPITAL INC: Files Prelim Prospectus to Resell 865,264 Shares
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Netcapital Inc. filed a preliminary prospectus on Form S-1 with the
U.S. Securities and Exchange Commission relating to the offer and
resale by certain selling shareholders of up to an aggregate of
865,264 shares of common stock, par value $0.001 per share, of
Netcapital Inc., consisting of shares of Common Stock issuable upon
the exercise of:
(i) common stock purchase warrants, to purchase up to 253,947
shares of Common Stock, at an exercise price of $8.74 per share;
issued by us to certain accredited investors on May 29, 2024
pursuant to an inducement offer letter agreement, dated as of May
24, 2024;
(ii) common stock purchase warrants, to purchase up to 253,947
shares of Common Stock, at an exercise price of $8.74 per share;
issued by us to certain accredited investors on May 29, 2024
pursuant to the May 2024 Inducement Letter;
(iii) common stock purchase warrants to purchase up to 19,048
shares of Common Stock issued by us on May 29, 2024 to designees of
H.C. Wainwright & Co., LLC, as exclusive placement agent, at an
exercise price of $10.93 per share pursuant to an engagement letter
dated May 22, 2024 between the Company and Wainwright;
(iv) common stock purchase warrants, to purchase up to 283,752
shares of Common Stock at an exercise price of $14.10 per share
issued by us on December 27, 2023 to certain investors in a public
offering;
(v) common stock purchase warrants, to purchase up to 28,386
shares of Common Stock at an exercise price of $8.74 per share
issued by us on December 27, 2023 to certain investors in a public
offering;
(vi) common stock purchase warrants to purchase up to 21,283
shares of Common Stock issued by us on December 23, 2024 to
designees of Wainwright, as exclusive placement agent, at an
exercise price of $17.62 per share;
(vii) common stock purchase warrants, to purchase up to 1,537
shares of Common Stock at an exercise price of $49.34 per share,
issued by us to designees of Think Equity LLC on July 23, 2023
pursuant to an underwriting agreement, dated as of July 19, 2023
between the Company and ThinkEquity;
(viii) common stock purchase warrants to purchase up to 983
shares of Common Stock issued by us on May 25, 2023 to designees of
Think Equity, as exclusive placement agent, at an exercise price of
$109.40 per share pursuant to placement agent agreement dated May
23, 2024 between the Company and ThinkEquity;
(ix) common stock purchase warrants, to purchase up to 176
shares of Common Stock at an exercise price of $98.68 per share,
issued by us to designees of Think Equity on January 5, 2023
pursuant to an underwriting agreement, dated as of December 13,
2022 between the Company and ThinkEquity;
(x) common stock purchase warrants, to purchase up to 1,116
shares of Common Stock at an exercise price of $98.68 per share,
issued by us to designees of Think Equity on December 16, 2022
pursuant to the December 2022 Underwriting Agreement; and
(xi) common stock purchase warrants, to purchase up to 1,089
shares of Common Stock at an exercise price of $292.66 per share,
issued by us to designees of Think Equity on July 15, 2022 pursuant
to an underwriting agreement, dated as of July 12, 2022 between the
Company and ThinkEquity.
All of the Warrants are currently exercisable and expire on;
(i) March 25, 2026 for the May 2024 A-4 Inducement Warrants;
(ii) September 25, 2029 for the May 2024 A-3 Inducement
Warrants and the May 2024 Placement Agent Warrants;
(iii) February 23, 2029 for the December A-1 Warrants;
(iv) August 23, 2025 for the December A-2 Warrants;
(v) December 21, 2028 for the December 2023 Placement Agent
Warrants;
(vi) July 19, 2028 for the July 2023 Underwriter Warrants;
(vii) November 23, 2027 for the May 2023 Placement Agent
Warrants;
(viii) December 13, 2027 for the January 2023 Underwriter
Warrants and the December 2022 Underwriter Warrants and
(ix) July 12, 2027 for the July 2022 Underwriter Warrants.
The Shares will be resold from time to time by the Selling
Shareholders.
The Selling Shareholders, or their respective transferees,
pledgees, donees or other successors-in-interest, will sell the
Shares through public or private transactions at prevailing market
prices, at prices related to prevailing market prices or at
privately negotiated prices. The Selling Shareholders may sell any,
all or none of the securities offered by this prospectus, and we do
not know when or in what amount the Selling Shareholders may sell
their Shares hereunder following the effective date of this
registration statement.
NetCapital said, "We are registering the Shares on behalf of the
Selling Shareholders, to be offered and sold by them from time to
time. While we will not receive any proceeds from the sale of our
Common Stock by the Selling Shareholders in the offering described
in this prospectus, we may receive up to (i) $8.74 per share upon
the cash exercise of the May 2024 Inducement Warrants; (ii) $10.93
per share upon the cash exercise of the May 2024 Placement Agent
Warrants; (iii) $49.34 per share upon the cash exercise of the July
2023 Underwriter Warrants; (iv) $109.40 per share upon the cash
exercise of the May 2023 Placement Agent Warrants (v) $98.68 per
share upon the cash exercise of the January 2023 Underwriter
Warrants; (vi) $98.68 per share upon the cash exercise of the
December 2022 Underwriter Warrants; and (vii) $292.66 per share
upon the cash exercise of the July 2022 Underwriter Warrants. Upon
the exercise of the Warrants for all 581,843 Shares by payment of
cash, we would receive aggregate gross proceeds of approximately
$5.28 million. However, we cannot predict when and in what amounts
or if the Warrants will be exercised, and it is possible that the
Warrants may expire and never be exercised, in which case we would
not receive any cash proceeds. We have agreed to bear all of the
expenses incurred in connection with the registration of the
Shares. The Selling Shareholders will pay or assume discounts,
commissions, fees of underwriters, selling brokers or dealer
managers and similar expenses, if any, incurred for the sale of the
Shares."
The Common Stock is currently listed on the Nasdaq Capital Market
under the symbol "NCPL" On October 8, 2024, the last reported sale
price of our Common Stock was $1.53.
A full-text copy of the preliminary prospectus is available at:
https://tinyurl.com/ymcjaaje
About Netcapital Inc.
Headquartered in Boston, Mass., Netcapital Inc. --
www.netcapital.com -- is a fintech company with a scalable
technology platform that allows private companies to raise capital
online and provides private equity investment opportunities to
investors. The Company's consulting group, Netcapital Advisors,
provides marketing and strategic advice and takes equity positions
in select companies. The Company's funding portal, Netcapital
Funding Portal, Inc. is registered with the U.S. Securities &
Exchange Commission (SEC) and is a member of the Financial Industry
Regulatory Authority (FINRA), a registered national securities
association.
Spokane, Washington-based Fruci & Associates II, PLLC, the
Company's auditor since 2017, issued a "going concern"
qualification in its report dated July 29, 2024, citing that the
Company has negative working capital, net operating losses, and
negative cash flows from operations. These factors, among others,
raise substantial doubt about the Company's ability to continue as
a going concern.
Netcapital reported a net loss of $4.99 million for the year ended
April 30, 2024, compared to net income of $2.95 million for the
year ended April 30, 2023. As of July 31, 2024, Netcapital had
$41.44 million in total assets, $3.93 million in total liabilities,
and $37.51 million in total stockholders' equity.
NOSTRUM LABORATORIES: Court Okays Appointment of Chapter 11 Trustee
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Judge John K. Sherwood of the U.S. Bankruptcy Court for the
District of New Jersey approved the appointment of Vladmir Kasparov
of Portage Point Partners as Chapter 11 trustee for Nostrum
Laboratories Inc.
Judge Sherwood ordered that upon qualifying as Trustee by filing
the bond, the Trustee shall take possession of the Debtor's
property, operate the Debtor's business, and perform the duties
required of a Trustee under the Bankruptcy Code and the Federal
Rules of Bankruptcy Procedure.
Judge Sherwood further ordered that the Debtor, its officers,
agents, and representatives shall turn over, deliver, and surrender
to the Chapter 11 Trustee, upon his qualification, all property,
assets, and control of the Debtor's business, immediately, and
shall not hinder Mr. Kasparov in any way or manner, directly or
indirectly, in his handling of the property and affairs of the
Debtor, until further order of this Court.
In a court filing, Citizens raised the need to appoint an
independent trustee to manage the case, saying the company's
management has proven incapable of acting in a fiduciary capacity.
Rather than accept any responsibility, Nostrum's management has
resorted to obfuscation and lies, denying access to its books and
records and repeatedly casting off violations of loan documents,
including the diversion of funds and payments to related entities,
as being trivial or immaterial.
In addition to misrepresenting the company's financial state and
affairs to delay the appointment of a receiver, Nostrum also
advanced an objectively baseless argument that Citizens, contrary
to all of its written communications with the company, agreed to an
"indefinite" forbearance agreement that would extend for a
millennium in order to delay a judgment.
The Court further observed that Nostrum's argument was part of the
company's delay tactics and ruled that Nostrum "has done everything
it can to delay and engage in all sorts of dilatory antics here."
A copy of the appointment order is available for free at
https://urlcurt.com/u?l=9Cqkac from PacerMonitor.com.
Attorneys for Citizens Bank, N.A.:
STRADLEY, RONON, STEVENS & YOUNG, LLP
Julie M. Murphy, Esq.
Daniel M. Pereira, Esq.
Joseph Catuzzi, Esq.
Stradley Ronon Stevens & Young LLP
457 Haddonfield Road, Suite 100
Cherry Hill, NJ 08002
Tel: (856) 321-2409
Fax: (856) 321-2415
E-Mail: jmmurphy@stradley.com
dpereira@stradley.com
jcatuzzi@stradley.com
Gretchen M. Santamour, Esq.
Stradley Ronon Stevens & Young LLP
2005 Market Street, Suite 2600
Philadelphia, PA 19103
Tel: (215) 564-8000
Email: gsantamour@stradley.com
About Nostrum Laboratories
Nostrum Laboratories Inc. operates as a pharmaceutical company. The
Company offers sucralfate, and theophylline extended release (ER)
tablets, as well as piroxicam capsules, and carbamazepine ER
capsules.
Nostrum Laboratories Inc. sought relief under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. D.N.J. Case No. 24-19611) on Sept. 30,
2024. In the petition filed by James Grainer, as chief financial
officer, the Debtor estimated assets between $50,000 and $100,000
and estimated liabilities between $10 million and $50,000.
The Honorable Bankruptcy Judge John K. Sherwood handles the case.
The Debtor is represented by:
David L. Bruck, Esq.
Greenbaum, Rowe, Smith, et al.
1800 N. Topping Avenue
Kansas City, MO 64120
NOSTRUM LABORATORIES: U.S. Trustee Appoints Creditors' Committee
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The U.S. Trustee for Regions 3 and 9 appointed an official
committee to represent unsecured creditors in the Chapter 11 case
of Nostrum Laboratories, Inc.
The committee members are:
1. Altro Pharmaceuticals, Inc.
Attn: Nicholas Lovejoy
425 Broadhollow Road, Suite #315
Melville, NY 11747
Phone: (631) 396-0109
2. PI Health Sciences/Archimica S.p.A
Amit Goel
Unit No 3A, 1st Floor, Wing A, CTS No. 1483 D,
IA Project Road,
Next to JW Marriott Hotel, Sahar, Village Marol,
Taluka Andheri (East),
Mumbai 400099, Maharashtra, India
Phone: +91 22 62665600
Email: amit.goel@piind.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 Nostrum Laboratories
Nostrum Laboratories Inc. operates as a pharmaceutical company. It
offers sucralfate, and theophylline extended release (ER) tablets,
as well as piroxicam capsules, and carbamazepine ER capsules.
Nostrum Laboratories sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D.N.J. Case No. 24-19611) on September 30,
2024, with $50 million to $100 million in assets and $10 million to
$50 million in liabilities. James Grainer, chief financial officer,
signed the petition.
Judge John K. Sherwood handles the case.
The Debtor is represented by David L. Bruck, Esq., at Greenbaum,
Rowe, Smith & Davis, LLP.
NOVA CHEMICALS: S&P Alters Outlook to Stable, Affirms 'BB-' ICR
---------------------------------------------------------------
S&P Global Ratings revised the outlook on NOVA Chemicals Corp. to
stable from negative and affirmed its 'BB-' long-term issuer credit
rating. At the same time, S&P affirmed its 'BB+' issue-level rating
on the company's senior secured debt (recovery rating '1') and 'B+'
issue-level rating on the senior unsecured debt (recovery rating
'5').
S&P said, "The stable outlook reflects our view that, despite the
persistence of challenging industry conditions, NOVA will generate
credit measures commensurate with the rating. We also assume NOVA
will maintain sufficient liquidity and management will address the
$500 million May 2025 notes maturity no later than year-end 2024.
"The outlook revision reflects our expectation for improved credit
measures over our forecast period. NOVA's reported EBITDA more than
doubled in the first half of 2024 primarily led by a 30% increase
in polyethylene (PE) sales volume and favorable feedstock prices,
partially offset by ongoing weakness in polyethylene (PE) pricing.
The olefins market continues to remain challenged due to weak
demand, ample supply amid a backdrop of macroeconomic uncertainty,
and a slower-than-anticipated recovery in China. While we believe
softness in the petrochemical industry will persist into 2025, we
believe NOVA should generate improved credit measures over our
forecast period, led by higher volumes and lower capital spending
following the ramp up of the company's second Advanced SCLAIRTECH
(AST2) facility (950,000 pounds capacity, a 20% rise in PE
nameplate capacity). More specifically, we forecast
weighted-average S&P Global Ratings-adjusted FFO to debt to average
in the 12%-20% area and debt to EBITDA in the 4x-5x area. Our
estimates incorporate a modest improvement in product pricing in
2025 and 2026 assuming demand improves and capacity additions
moderate.
"The stable outlook also reflects our view that management will
address refinancing of the upcoming US$500 million May 2025 bond
maturity by year-end 2024. Given the company's current liquidity
position, improved capital market access and indicative yields of
6%-6.5% on the current notes, we do not view refinancing to be a
major issue. We assume management will also have full access to the
$1.5 billion credit facility by the end of the third quarter and
with limited amounts drawn under it, should provide it with a
strong mechanism to withstand temporary market disruptions.
"We project meaningful free operating cash flows beyond 2025,
supporting continued strengthening in leverage metrics. We forecast
capital spending to decline in 2025 and beyond, and be largely
sustaining and turnaround-related in nature, with a modest amount
of growth spending related to recycling initiatives. Management is
developing a mechanical recycling facility in Indiana (expected to
be operational by 2025), a step toward achieving 30% recycled
content in PE sales by 2030. Despite materially lower spending in
2025 relative to 2024 levels (about 50% reduction, also reflecting
lower turnaround costs), we expect some cash outlays relating to
the litigation claims concerning the jointly owned ethylene cracker
with Dow Chemicals at the Joffre site, which affects our free cash
flow expectation. We believe damages could be awarded to NOVA
following the court's assessment for the base period 2013-2018,
expected sometime now in 2025.
"However, beyond 2025, we project material free cash flow
generation supported by our assumption that management is unlikely
to embark on any major growth projects similar to AST2. Although
distributions to the parent are likely to resume in 2026, we expect
NOVA to maintain discretionary spending well within cash flow
generation. In our view, the absence of aggressive growth spending
and the low likelihood of further material litigation-related
payments should limit deterioration in credit measures to the
extent witnessed during fiscal 2022 and 2023, when S&P Global
Ratings-adjusted FFO to debt averaged 10%. Accordingly, we expect
gradual strengthening in credit measures over the forecast years
from EBITDA growth and lower capital spending.
"Our business risk assessment of NOVA reflects the company's
relatively good market position, scale, and structurally
advantageous cost position; however, the company lacks scope and
diversity compared with larger peers. NOVA has a good market
position in the North American ethylene and PE industry, and we
believe its scale has further strengthened following mechanical
completion of the new PE facility in Sarnia, Ont. (950,000 pounds
capacity) in the third quarter of 2023. It also completed the
Corunna expansion in the third quarter of 2022, expanding capacity
by 50%. In addition, our assessment factors in the company's
diverse feedstock access and cost-advantaged position in North
America, given its access to lower-cost natural gas relative to
that of global peers that use naphtha as an input. We believe
structurally higher energy costs in Europe has further strengthened
the company's competitive advantage.
"Partially offsetting these strengths is NOVA's limited product and
operational diversity in the highly cyclical petrochemical sector.
We believe the company has less comprehensive scale, scope, and
diversity than that of peers such as Westlake Chemical Corp. and
LyondellBasell Industries N.V., which are significantly larger and
have better product diversity.
"Our ratings continue to incorporate a one-notch uplift for group
support. We continue to view NOVA as moderately strategic to direct
parent Mubadala Investment Co. (MIC), as part of the
government-related entity Mamoura Diversified Global Holding PJSC
(AA/Stable/A-1+), because we believe the parent is likely to
provide indirect support, if needed. No dividends were paid in 2023
and we don't expect any payouts till 2026, funded from free cash
flow generation. Accordingly, our rating on NOVA receives one notch
of uplift given our view of parental support under our group rating
methodology criteria.
"The stable outlook reflects our view that despite the persistence
of challenging industry conditions, NOVA should be able to generate
weighted-average S&P Global Ratings-adjusted FFO to debt of
12%-20%, primarily led by increased volumes and lower capital
spending following the ramp up of AST2. Our base case also assumes
management addresses the $500 million May 2025 notes maturity no
later than year-end 2024 and extends the maturities on the credit
facility and term loan prior to the facilities being current (April
2026 maturity).
"Assuming NOVA's strategic importance to its parent company is
unchanged, thereby maintaining a one-notch uplift in the final
rating, we could, nevertheless, lower the rating over the next 12
months if weak economic conditions persist while the company
continues to outspend operating cash flows, limiting improvement in
credit measures. In this scenario, we would expect NOVA's
weighted-average adjusted FFO to debt to remain below 12% on a
sustained basis. All else equal, we believe this could occur if
revenues and/or gross margins declined by 300 basis points in
2025.
"We could raise the rating within the next 12 months if we expect
the company's S&P Global Ratings-adjusted FFO to debt to improve
above 20% on a sustained basis. We believe this could occur if
demand rebounds materially, supporting meaningful improvement in
polyethylene prices with gross margins exceeding 35%, and
management limits discretionary spending well within internal cash
flow generation.
"Environmental factors are a negative consideration in our credit
rating analysis of NOVA due to the increasing need for
petrochemical producers to address challenges regarding plastic
pollution and carbon dioxide (CO2) emissions." The company's
absolute emissions decreased 8% from 2018 to 2022, primarily from
lower production, while greenhouse gas intensity increased to 0.69
kilotonnes (kt) in 2022 from 0.66 kt of CO2 emissions in 2018.
The company is taking steps toward a smaller environmental
footprint by engaging in initiatives related to recycled plastics
and improving the recyclability of its plastics, targeting 30% of
PE sales to be derived from recycled content by 2030. However, the
health and environmental impact related to plastic pollution and
inherent volatility in commodity pricing limit any improvement in
the business risk profile.
Governance factors are also a moderately negative consideration and
are weaker relative to the broader industry given the multiple
leadership changes recently, as well as litigation-related payments
(about $1.5 billion) to Dow Chemicals in 2017 and 2019, which
impaired its cash flow metrics.
ORIGINAL HAROLD'S: Edward Burr Named Subchapter V Trustee
---------------------------------------------------------
The U.S. Trustee for Region 17 appointed Edward Burr of Mac
Restructuring Advisors, LLC as Subchapter V trustee for Original
Harold's Chicken of Nevada LLC III.
Mr. Burr will be paid an hourly fee of $450 for his services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. Burr declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Edward Burr
Mac Restructuring Advisors, LLC
10191 E. Shangri La Road
Scottsdale, AZ 85260
Phone: (602) 418-2906
Email: Ted@macrestructuring.com
About 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
PINEAPPLE ENERGY: Jeffrey Conroy Holds 1,555,089 Common Shares
--------------------------------------------------------------
Jeffrey J. Conroy, 10% Owner of Pineapple Energy Inc., filed a Form
3 Report with the U.S. Securities and Exchange Commission on
October 9, 2024, disclosing direct beneficial ownership of
1,555,089 shares of Common Stock.
A full-text copy of Mr. Conroy's SEC Report is available at:
https://tinyurl.com/4jjr7rzf
About Pineapple Energy Inc.
Pineapple Energy Inc. is a growing domestic operator and
consolidator of residential and commercial solar, battery storage,
and grid services solutions. Its strategy is focused on acquiring,
integrating, and growing leading local and regional solar, storage,
and energy services companies nationwide. Pineapple is primarily
engaged in the sale, design, and installation of photovoltaic solar
energy systems and battery storage systems through its Hawaii-based
Hawaii Energy Connection and New York-based SUNation Solar Systems
entities.
Melville, N.Y.-based UHY LLP, the Company's auditor since 2023,
issued a "going concern" qualification in its report dated March
29, 2024, citing that the Company's current financial position and
the Company's forecasted future cash flows for 12 months beyond the
date of issuance of the financial statements indicate that the
Company will not have sufficient cash to make the first SUNation
earnout payment in the second quarter of 2024 or the first
principal payment of the Long-Term Note due on November 9, 2024,
factors which raise substantial doubt about the Company's ability
to continue as a going concern.
For the years ended December 31, 2023, and December 31, 2022,
Pineapple Energy reported net losses of $8.1 million and $10.4
million, respectively. As of June 30, 2024, Pineapple Energy had
$52,853,691 in total assets, $23,830,867 in total current
liabilities, $23,477,561 in total long-term liabilities,
$16,442,945 in mezzanine equity, and $10,897,682 in total
stockholders' deficit.
QURATE RETAIL: To Host Q3 2024 Results Conference Call on Nov. 7
----------------------------------------------------------------
Qurate Retail, Inc. will host a conference call to discuss results
for the third quarter of 2024 on Thursday, November 7th at 8:30
a.m. E.T.
Before the open of market trading that day, Qurate Retail will
issue a press release reporting such results, which can be found at
https://www.qurateretail.com/investors/news-events/press-releases.
The press release and conference call may discuss Qurate Retail's
financial performance and outlook, as well as other forward-looking
matters.
Please call InComm Conferencing at (877) 704-4234 or +1 (215)
268-9904, confirmation code 13744091, at least 10 minutes prior to
the call. Callers will need to be on a touch-tone telephone to ask
questions. The conference administrator will provide instructions
on how to use the polling feature.
In addition, the conference call will be broadcast live via the
Internet. All interested participants should visit the Qurate
Retail website at
https://www.qurateretail.com/investors/news-events/ir-calendar to
register for the webcast. Links to the press release and replay of
the call will also be available on the Qurate Retail website. The
conference call will be archived on the website after appropriate
filings have been made with the SEC.
About Qurate Retail
Headquartered in Englewood, Colorado, Qurate Retail, Inc. owns
controlling and non-controlling interests in a broad range of video
and online commerce companies. Qurate has six leading retail
brands: QVC, HSN, Ballard Designs, Frontgate, Garnet Hill, and
Grandin Road. Qurate Retail Group is the largest player in video
commerce, which includes video-driven shopping across linear TV,
e-commerce sites, digital streaming, and social platforms. The
retailer reaches more than 200 million homes worldwide via 15
television channels, which are widely available on cable/satellite
TV, free over-the-air TV, and digital livestreaming TV. The
retailer also reaches millions of customers via its QVC+ and HSN+
streaming experiences, websites, mobile apps, social pages, print
catalogs, and in-store destinations. Qurate Retail, Inc. also holds
various minority interests.
Qurate Retail reported a net loss of $94 million for the year ended
Dec. 31, 2023, compared to a net loss of $2.53 billion for the year
ended Dec. 31, 2022. As of June 30, 2024, the Company had $10.9
billion in total assets, $10.5 billion in total liabilities, and
$421 million in total stockholders' equity.
Qurate Retail disclosed in a Form 8-K filed with the Securities and
Exchange Commission that on June 10, 2024, it received written
notice from The Nasdaq Stock Market notifying the Company that,
because the closing bid price for the Company's Series A common
stock, par value $0.01 per share, had fallen below $1.00 per share
for 30 consecutive business days, the Company no longer complies
with the minimum bid price requirement for continued listing of
QRTEA on the Nasdaq Global Select Market.
* * *
As reported by TCR on April 22, 2024, S&P Global Ratings revised
its outlook to stable from negative and affirmed all its ratings on
U.S.-based video commerce and online retailer Qurate Retail Inc.,
including its 'CCC+' issuer credit rating. The stable outlook
reflects S&P's expectation that Qurate will maintain sufficient
liquidity over the next 12 months despite its view that its capital
structure remains unsustainable, as further cost reductions offset
sales weakness and support profit recovery.
RAGE N AXE: Charity Bird Named Subchapter V Trustee
---------------------------------------------------
The Acting U.S. Trustee for Region 8 appointed Charity Bird of
Kaplan, Johnson, Abate, & Bird as Subchapter V trustee for Rage N
Axe LLC.
Ms. Bird will be paid an hourly fee of $300 for her services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Ms. Bird declared that she is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Charity Bird
Kaplan, Johnson, Abate, & Bird
710 W. Main Street, 4th Floor
Louisville, KY 40202
Phone: (502) 540-8285
Email: cbird@kaplanjohnsonlaw.com
About Rage N Axe LLC
Rage N Axe LLC filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. W.D. Ky. Case
No.24-10703) on October 3, 2024, listing $500,001 to $1 million in
both assets and liabilities.
Robert C. Chaudoin, Esq. at Harlin Parker Attorneys at Law
represents the Debtor as counsel.
RAIDER CONTRACTING: Gets Final OK to Use Cash Collateral
--------------------------------------------------------
Raider Contracting, Inc. received final approval from the U.S.
Bankruptcy Court for the Eastern District of Texas, Sherman
Division to use the cash collateral of the U.S. Small Business
Administration.
SBA holds a security interest in Raider's pre-bankruptcy
collateral, including accounts and cash.
Raider can use SBA's cash collateral to pay its expenses based on
an approved budget, with flexibility to exceed line items by 10%.
The budget shows total expenses of $100,148.83.
SBA will receive replacement liens on Raider's equipment,
inventory, and accounts for protection against any loss in value of
its collateral.
About Raider Contracting
Raider Contracting, Inc. specializes in construction and
contracting services, likely encompassing residential, commercial,
and industrial projects. The company is based in Allen, Texas.
Raider Contracting, Inc. sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D. Texas Case No. 24-42354) with $100,001
to $500,000 in assets and $500,001 to $1 million in liabilities.
Judge Brenda T. Rhoades oversees the case.
The Debtor is represented by:
Robert T. DeMarco, Esq.
Michael S. Mitchell, Esq.
DeMarco Mitchell, PLLC
12770 Coit Road, Suite 850
Dallas, TX 75251
Tel: 972-991-5591
Fax: 972-346-6791
Email: robert@demarcomitchell.com
mike@demarcomitchell.com
RED RIVER: U.S. Trustee Appoints Talc Claimants Committee
---------------------------------------------------------
The U.S. Trustee for Region 7 appointed an official committee to
represent talc claimants in the Chapter 11 case of Red River Talc,
LLC.
The committee members are:
1. Rebecca J. Love DDS
c/o Michelle Parfitt
c/o Bryant Mc Culley
c/o Stuart McCluer
1825 K Street NW, Ste. 700
Washington, DC 20006
(202) 783-6400
mparfitt@ashcraftlaw.com
bmcculley@ashcraftlaw.com
smccluer@ashcraftlaw.com
2. Dr. Tina Lynch
c/o Warren T. Burns
Burns Charest LLP
900 Jackson St., Ste. 500
Dallas, TX 75202
(469) 904-4550
wburns@burnscharest.com
3. Nancy C. Hicks
c/o John R. Bevis
31 Atlanta St
Marietta, GA 30060
(770) 778-7589
bevis@barneslawgroup.com
4. Deborah Schultz
c/o Mark P. Robinson, Jr.
19 Corporate Plaza Drive
Newport Beach, CA 92660
(949) 720-1288
Mrobinson@robinsonfirm.com
5. Erika Tarlow
c/o Christopher R. LoPalo
Napoli Shkolnik
1302 Ave. Ponce de Leon
San Juan, P.R. 00907
(212) 397-1000
clopalo@nsprlaw.com
6. Kim Carney
c/o James G. Onder
110 E. Lockwood Ave.
Saint Louis, MO 63119
(314) 963-9000
onder@onderlaw.com
7. Kellie R. Brewer
c/o Nabil Majed Nachawati
5489 Blair Road
Dallas, TX 75231
(214) 461-6170
mn@ntrial.com
8. Kevin Nesko
c/o Christopher M. Placitella
127 Maple Ave.
Red Bank, NJ 07701
(732) 747-9003
cplacitella@cprlaw.com
9. Rhonda McKey
c/o Anne Andrews
4701 Von Karman Aven., Ste. 300
Newport Beach, CA 92660
(949) 748-1000
aa@andrewsthornton.com
10. Patricia Ann Weth
c/o Jeff T. Seldomridge
108 Railroad Ave.
Orange, VA 22960
(866) 529-3323
jseldomridge@millerfirmllc.com
11. Blue Cross Blue Shield of Massachusetts
c/o Elizabeth Carter
Hill Hill Carter Franco Cole & Black PC
425 S. Perry St.
Montgomery, AL 36104
(334) 386-4337
ecarter@hillhillcarter.com
About J&J Talc Units
LLT Management, LLC (formerly known as LTL Management LLC) was a
subsidiary of Johnson & Johnson that was formed to manage and
defend thousands of talc-related claims and oversee the operations
of Royalty A&M. Royalty A&M owns a portfolio of royalty revenue
streams, including royalty revenue streams based on third-party
sales of LACTAID, MYLANTA/MYLICON and ROGAINE products.
LTL Management first filed a petition for Chapter 11 protection
(Bankr. W.D.N.C. Case No. 21-30589) on Oct. 14, 2021. The case was
transferred to New Jersey (Bankr. D.N.J. Case No. 21-30589) on Nov.
16, 2021. The Hon. Michael B. Kaplan is the case judge. At the
time of the filing, the Debtor was estimated to have $1 billion to
$10 billion in both assets and liabilities.
In the 2021 case, LTL Management tapped Jones Day and Rayburn
Cooper & Durham, P.A., as bankruptcy counsel; King & Spalding, LLP
and Shook, Hardy & Bacon LLP as special counsel; McCarter &
English, LLP as litigation consultant; Bates White, LLC as
financial consultant; and AlixPartners, LLP as restructuring
advisor. Epiq Corporate Restructuring, LLC, served as the claims
agent.
On Dec. 24, 2021, the U.S. Trustee for Regions 3 and 9
reconstituted the talc claimants' committee and appointed two
separate committees: (i) the official committee of talc claimants
I, which represents ovarian cancer claimants, and (ii) the official
committee of talc claimants II, which represents mesothelioma
claimants.
The official committee of talc claimants I tapped Genova Burns LLC,
Brown Rudnick LLP, Otterbourg PC and Parkins Lee & Rubio LLP as its
legal counsel. Meanwhile, the official committee of talc claimants
II is represented by the law firms of Cooley LLP, Bailey Glasser
LLP, Waldrep Wall Babcock & Bailey PLLC, Massey & Gail LLP, and
Sherman Silverstein Kohl Rose & Podolsky P.A.
Re-Filing of Chapter 11 Petition
On Jan. 30, 2023, a panel of the Third Circuit issued an opinion
directing this Court to dismiss the 2021 Chapter 11 Case on the
basis that it was not filed in good faith. Although the Third
Circuit panel recognized that the Debtor "inherited massive
liabilities" and faced "thousands" of future claims, it concluded
that the Debtor was not in financial distress before the filing.
On March 22, 2023, the Third Circuit entered an order denying the
Debtor's petition for rehearing. The Third Circuit entered an
order denying LTL's stay motion on March 31, 2023, and, on the dame
day, issued its mandate directing the Bankruptcy Court to dismiss
the 2021 Chapter 11 Case.
The Bankruptcy Court entered an order dismissing the 2021 Case on
April 4, 2023.
Johnson & Johnson on April 4, 2023, announced that its subsidiary
LTL Management LLC (LTL) has re-filed for voluntary Chapter 11
bankruptcy protection (Bankr. D.N.J. Case No. 23-12825) to obtain
approval of a reorganization plan that will equitably and
efficiently resolve all claims arising from cosmetic talc
litigation against the Company and its affiliates in North
America.
In the new filing, J&J said it has agreed to contribute up to a
present value of $8.9 billion, payable over 25 years, to resolve
all the current and future talc claims, which is an increase of
$6.9 billion over the $2 billion previously committed in connection
with LTL's initial bankruptcy filing in October 2021. LTL also has
secured commitments from over 60,000 current claimants to support a
global resolution on these terms.
In August 2023, U.S. Bankruptcy Judge Michael Kaplan in Trenton,
New Jersey, ruled that the second bankruptcy case should be
dismissed.
3rd Try
In May 2024, J&J announced its subsidiary LLT Management LLC is
soliciting support for a consensual prepackaged bankruptcy plan to
resolve its talc-related liabilities. Under the terms of the plan,
a trust would be funded with over $5.4 billion in the first three
years and more than $8 billion over the course of 25 years, which
J&J calculates to have a net present value of $6.475 billion.
Claimants must cast their vote to accept or reject the Plan by July
26, 2024. If the Plan is accepted by at least 75% of voters, a
bankruptcy may be filed under the case name In re: Red River Talc
LLC in a bankruptcy court in Texas or in the bankruptcy court of
another jurisdiction. Epiq Corporate Restructuring, LLC is
serving
as balloting and solicitation agent for LLT.
On Sept. 20, 2024, Red River Talc LLC filed a Chapter 11 bankruptcy
petition (Bankr. S.D. Tex. Case No. 24-90505).
Porter Hedges LLP and Jones Day serve as counsel in the new Chapter
11 case. Epiq is the claims agent.
Paul Hastings LLP is counsel to the Ad Hoc Committee of Supporting
Counsel. Randi S. Ellis is the proposed prepetition legal
representative of future claimants.
RUSSEL METALS: S&P Alters Outlook to Positive, Affirms 'BB+' ICR
----------------------------------------------------------------
S&P Global Ratings revised its rating outlook on Canada-based
Russel Metals Inc. to positive from stable. At the same time, S&P
affirmed all its ratings, including the 'BB+' issuer credit rating
on the company.
S&P positive outlook on Russel reflects the likelihood of an
upgrade within the next 24 months if the company continues its
conservative financial policies and sustains credit measures
generally in line with its estimates.
The outlook revision to positive primarily reflects the debt
reduction and corresponding balance sheet strength to mitigate
future leveraging risk. Russel generated strong earnings and cash
flows from 2021 to 2023, linked to favorable steel prices, leading
to an increase in cash of about C$600 million during that period
(including the proceeds from the monetization of non-core business
units in 2023). Earlier this year, the company repaid its 2026
unsecured notes (C$150 million) and announced its intention to
redeem its C$150 million 2025 unsecured notes, the only remaining
debt outstanding in the company's capital structure, by the end of
this month, using cash on hand.
S&P said, "With no reported debt, we believe the risk of
significant volatility in the company's cash flow and leverage
measures has materially decreased. We estimate the company's
adjusted debt-to-EBITDA ratio, which includes lease obligations as
debt, will average about 0.5x through 2025 and remain well below
1.5x through 2026. The modest increase in leverage reflects our
assumption of about C$200 million spent annually for acquisitions
and share repurchases beyond 2024. We recognize these assumptions
are speculative and that actual spending could be higher or lower
than our estimates. However, we note that the largest amount the
company has spent on an acquisition over the past two decades was
C$268 million in 2012. Furthermore, the company has historically
managed its balance sheet in a relatively conservative manner, with
year-end adjusted debt to EBITDA averaging just below 1.5x since
2017.
"We expect Russel will exhibit reduced earnings and cash flow
volatility. Benchmark hot-rolled coil prices have plummeted 60%-65%
since the peak of mid-2021 under the influence of weak demand,
economic uncertainty, and high inventory pressures. Plate and
structural steel prices (which account for a more meaningful share
of Russel's shipments) followed a similar trend. We assume a softer
steel price environment over the next couple of years will
contribute to materially lower earnings and cash flow than in 2021
and 2022. While Russel's operating results have historically been
highly sensitive to steel price fluctuations, we expect downside
risk to be limited from current price levels. In addition, we
believe the company's investments in value-add and facility
modernization initiatives over the past few years should facilitate
increased operating efficiency and resilient margins. We expect an
increase in its share of higher-margin value-added services to
remain a key strategic objective of the company and to account for
an increased proportion of sales in the future. Furthermore, we
consider Russel's operating cash flow generation to be somewhat
counter-cyclical, because cash is typically released from working
capital in a downside steel price scenario. The higher cash flow in
such a scenario should partly mitigate the impact of weaker
earnings on our adjusted credit measures (since we net cash against
debt) than would otherwise be the case.
"We assume Russel will remain acquisitive while preserving its
relatively low leverage. The company completed its acquisition of
Samuel's seven service centers in western Canada and the
northeastern U.S. in August 2024. The acquisition was one of
Russel's largest to date, funded with cash on hand, and is expected
to contribute annual EBITDA of about C$25 million. In our view,
these service centers from Samuel strengthens Russel's presence in
western Canada, offers modest efficiency opportunities, and
provides a foothold for Russel to expand in the northeastern U.S..
The services center industry remains highly fragmented, and we
assume Russel will spend about C$100 million on acquisitions
annually to further consolidate. This is above its annual average
of about C$65 million since 2015 and highly speculative. However,
we believe it can fund purchases at this level (all else being
equal) with the free operating cash flow we expect it to generate.
While larger acquisitions or increased shareholder returns are
possible, we expect the company will take a balanced approach to
how they are funded, as they have in the past, such that leverage
generally remains below 2x over the next several years.
"Our positive outlook on Russel reflects the likelihood of an
upgrade within the next 24 months if the company continues its
conservative financial policies and sustains credit measures
generally in line with our estimates.
"We could upgrade Russel over the next 24 months if we believed the
company would generally maintain an adjusted debt-to-EBITDA ratio
below 2x through the steel industry cycle. This scenario would be
supported by our view of the company's financial policies along
with reduced earnings and cash flow volatility.
"We could revise the outlook to stable if Russel demonstrated an
increased appetite for outsized debt-financed acquisitions or share
repurchases that increased its adjusted debt-to-EBITDA ratio above
2.0x for a prolonged period. In our view, this could also result
from lower-than-anticipated earnings, potentially from a steep and
sustained decline in steel prices, without a corresponding increase
in cash flow from working capital."
SC-GA 2018 PARTNERS: Leon Jones Named Subchapter V Trustee
----------------------------------------------------------
The U.S. Trustee for Region 21 appointed Leon Jones, Esq., at Jones
& Walden, LLC, as Subchapter V trustee for SC-GA 2018 Partners,
LLC.
Mr. Jones will be paid an hourly fee of $475 for his services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. Jones declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Leon S. Jones, Esq.
Jones & Walden, LLC
699 Piedmont Ave. NE
Atlanta, GA 30308
Phone: (404) 564-9300
Email: ljones@joneswalden.com
About SC-GA 2018 Partners
SC-GA 2018 Partners, LLC sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. N.D. Ga. Case No. 24-60572) on October
4, 2024, with $0 to $50,000 in assets nd liabilities.
Matthew W. Levin, Esq. at Scroggins, Williamson & Ray, P.C.
represents the Debtor as legal counsel.
SEAGATE TECHNOLOGY: S&P Alters Outlook to Pos., Affirms 'BB' ICR
----------------------------------------------------------------
S&P Global Ratings revised its outlook on Seagate Technology
Holdings PLC to positive from stable based on its expectation that
EBITDA growth will enable the firm to reduce leverage to the low-2x
area over the next 12 months.
S&P also affirmed all its ratings on Seagate, including its 'BB'
issuer credit rating on Seagate.
Growing cloud capital spending, increased near-term revenue
visibility, and structural tailwinds for storage demand give S&P
confidence that Seagate will continue to report strong revenue
growth in the current fiscal year. Seagate reported revenue growth
of nearly 50% in the first quarter of fiscal 2025 on continued
growth in demand for mass-capacity nearline drives. Most of this
growth has come from a rebound in capital spending at cloud service
providers after an extended period of inventory digestion that saw
revenues decline by 36.7% and 11.3% in fiscal years 2023 and 2024,
respectively. S&P said, "Seagate guided year-over-year growth of
about 48% in the second quarter, a trajectory we believe is
supported by near-term visibility from a "build-to-order" (BTO)
sales model, expectation that the current cloud capital expenditure
(capex) cycle will continue for at least the next 12 months, and
initial signs of demand growth from enterprise end markets. We
forecast revenue will increase 43% for full-year fiscal 2025, as
more challenging comparisons and moderating cloud spending growth
slow the pace of expansion in the second half of the fiscal year."
S&P said, "We view the longer-term prospects for HDD demand
positively as data generation and storage needs continue to
outstrip capacity growth from solid state drives and other HDD
alternatives. Notwithstanding these tailwinds, we anticipate model
revenue expansion will slow to the mid-to-low teens percent in
fiscal 2026 as the current investment cycle begins to mature.
Although we do not factor upside from AI demand into our forecasts
due to a high level of uncertainty around timing and magnitude,
increasing data storage required for training datasets as well as
content produced by generative AI could provide upside to our
current base case.
"The positive outlook is based on our expectation that improving
demand and pricing for HDDs will enable Seagate to continue to
reduce leverage to the mid-2x area or lower over the next 12
months, with free cash flow (FCF) growing to approximately 20% of
S&P Global Ratings-adjusted net debt. While we continue to view the
HDD market as volatile, increased capacity discipline among leading
suppliers and a growing share of committed supply agreements
provides greater visibility into near-term future performance and
Seagate's deleveraging trajectory. To consider an upgrade, we would
expect debt to be less than 2x of EBITDA at mid-cycle business
conditions to support balance sheet strength through future
industry downturns."
S&P would likely upgrade Seagate over the next 12 months if:
-- It capitalizes on strong near-term demand in the HDD industry
to increase its revenue by over 30% in fiscal year 2025 while
continuing expanding its gross margins,
-- S&P believes it is on track to reduce its leverage below 2x in
fiscal year 2026 while generating FCF to debt of greater than 15%,
and
-- Management sustains a conservative financial policy, with
limited shareholder returns before further deleveraging.
S&P would likely revise its outlook on Seagate to stable if:
-- Slowing cloud capital spending leads to sluggish revenue growth
and stagnating profitability, causing the company to deleverage at
a slower-than-expected pace;
-- S&P believes its leverage likely remain above 2x at mid-cycle
business conditions; or
-- The company pursues aggressive shareholder returns before
further reducing leverage.
SEDALIA AESTHETICS: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: Sedalia Aesthetics LLC
DBA The Beauty Bar
DBA The Beauty Bar of Jefferson City
DBA The Beauty Bar of Marshall
1701 South Lafayette Avenue
Sedalia, MO 65301
Case No.: 24-20453
Business Description: The Debtor is the owner of a building
located at 9 North Lafayette, Marshall MO
valued at $110,000.
Chapter 11 Petition Date: October 21, 2024
Court: United States Bankruptcy Court
Western District of Missouri
Judge: Hon. Cynthia A Norton
Debtor's Counsel: Erlene W. Krigel, Esq.
KRIGEL, NUGENT + MOORE, P.C.
4520 Main Street, Suite 700
Kansas City, MO 64111
Tel: 816-756-5800
Fax: 816-756-1999
Total Assets: $311,684
Total Liabilities: $3,017,192
The petition was signed by Michelle Bassett as managing member.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 20 largest unsecured creditors is available
for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/6L3FFYY/Sedalia_Aesthetics_LLC__mowbke-24-20453__0001.0.pdf?mcid=tGE4TAMA
SIMMONS UNIVERSITY: S&P Lowers Revenue Bond Rating to 'BB+'
-----------------------------------------------------------
S&P Global Ratings lowered its long-term rating and underlying
rating (SPUR) on various Massachusetts Development Finance Agency's
revenue bonds, issued for Simmons University, to 'BB+' from 'BBB-'.
The outlook is negative.
"The downgrade reflects our opinion of Simmons' continued
enrollment declines, primarily across the online graduate space,
which have created significant operating pressure that we expect
will continue through, at least, fiscal 2026," said S&P Global
Ratings credit analyst Nicholas Fortin. "Due to these enrollment
declines and the university's high reliance on student-derived
revenue, Simmons expects to draw heavily from its endowment in
fiscal years 2025 and 2026 to meet operating cash flow needs, which
we believe could strain its financial resources absent material
fundraising success or favorable market returns," he added.
Simmons is a private, nonsectarian institution in Boston's Fenway
area, surrounded by several private colleges and universities. The
university currently serves approximately 2,100 undergraduate women
and nonbinary students and 2,600 men, women, and nonbinary students
in master's and doctoral programs, through both traditional,
on-campus, and online academic course offerings. The university
offers graduate and undergraduate degrees across six schools: the
School of Nursing, the School of Library and Information Science,
the School of Social Work, the School of Sciences and Health
Professions, the Gwen Ifill College of Media, Humanities, and
Social Sciences, and the School of Management.
All of Simmons' long-term debt is secured by a general obligation
(GO) of the university with a lien on tuition revenues. Further
securing the series N bonds, in addition to the series 2022 bonds,
is a negative pledge and mortgage lien on the university's Lefavour
Hall and Main College Building. As of fiscal 2024 year-end, Simmons
had $273.1 million of debt outstanding, consisting of $272.9
million of long-term, fixed-rate debt and approximately $246,000 of
operating leases. Management indicated no plans for additional debt
at this time.
SKC PROPERTIES: Gets OK to Use Cash Collateral Until Nov. 30
------------------------------------------------------------
SKC Properties, LLC received interim approval from the U.S.
Bankruptcy Court for the District of Hawaii to use the cash
collateral of American Savings Bank, F.S.B. and the U.S. Small
Business Administration to pay its operating expenses.
The interim order, signed by Judge Robert Faris, authorized SKC to
use $78,592 of its secured creditors' cash collateral for the
period from Nov. 1 to 30 in accordance with its budget.
The company previously received approval to use $77,807 to pay its
expenses for October.
SKC is allowed to exceed its budget by 20% in case of unforeseen
expenses during the interim period.
As protection, American Savings Bank and SBA will receive monthly
payments of $74,912 and $731, respectively, and will be granted
replacement liens on SKC's post-petition assets. In addition, ASB
retains the right to charge interest at a default rate for its
loans.
SKC obtained over $12 million loan from American Savings Bank and a
$150,000 loan from SBA. These loans are secured by SKC's cash
collateral.
About SKC Properties
SKC Properties, LLC is primarily engaged in renting and leasing
real estate properties.
SKC protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr.
D. Hawaii Case No. 24-00405) on April 29, 2024, with $10 million to
$50 million in both assets and liabilities. Sharon S. Lawler, a
member of SKC, signed the petition.
Judge Robert J. Faris oversees the case.
Choi & Ito represents the Debtor as legal counsel.
SOBR SAFE: Believes to Have Regained Nasdaq Compliance
------------------------------------------------------
SOBR Safe, Inc. disclosed in a Form 8-K Report filed with the U.S.
Securities and Exchange Commission that on October 4, 2024, the
Company received a letter from the Staff notifying that the Company
does not currently meet the minimum 500,000 publicly held shares
requirement pursuant to Nasdaq Listing Rule 5550(a)(4). As a result
of the 1-for-110 reverse stock split of the Common Stock on October
2, 2024, the aggregate number of outstanding Common Stock was
reduced from 34,764,593 shares on a pre-reverse-split basis to a
total of 316,042 shares outstanding on a post-reverse split basis,
with 285,611 of such shares currently qualifying as publicly held
shares for purposes of the Minimum Float Requirement. The Staff had
given the Company until October 11, 2024, to provide the Panel with
its views with respect to this additional deficiency.
As previously reported, on October 9, 2024, the Company closed a
private placement for gross proceeds of $8.2 million, whereby the
Company issued an aggregate of 2,024,691 units, each Unit
consisting of:
(i) one share of Common Stock, or one pre-funded warrant in
lieu thereof,
(ii) two Series A Warrants, each to purchase one share of
Common Stock, and
(iii) one Series B Warrant to purchase such number of shares of
Common Stock as will be determined on the Reset Date (as defined in
the Series B Warrant). The Company expects to regain compliance
with the Minimum Float Requirement through the Private Placement.
As a result of the private placement, as of October 10, 2024, the
date of its Current Report on Form 8-K, the Company believes it has
stockholders' equity in excess of the $2.5 million requirement and
publicly held shares above the 500,000 requirement. The Company is
awaiting a compliance determination from Nasdaq.
The Nasdaq notification has no immediate effect on the listing of
the Company's common stock on The Nasdaq Capital Market.
About SOBR Safe, Inc.
SOBR Safe, Inc. provides non-invasive technology to quickly and
humanely identify the presence of alcohol in individuals. These
technologies are integrated within the Company's robust and
scalable data platform, which produces statistical and measurable
user and business data. The Company's mission is to save lives,
increase productivity, create significant economic benefits, and
positively impact behavior. To this end, SOBR Safe has developed
the scalable, patent-pending SOBRsafe software platform for
non-invasive alcohol detection and identity verification.
As of June 30, 2024, SOBR Safe had $5,122,244 in total assets,
$1,431,746 in total liabilities, and $3,690,498 in total
stockholders' equity.
Littleton, Colorado-based Haynie and Company, the Company's auditor
since 2023, issued a "going concern" qualification in its report
dated March 29, 2024, citing that the Company has incurred
recurring losses from operations and has limited cash liquidity and
capital resources to meet future capital requirements.
Management believes that cash balances of approximately $2,800,000
and positive working capital of approximately $1,900,000 as of
December 31, 2023, do not provide adequate capital for operating
activities for the next twelve months after the issuance of these
financial statements. However, management believes that actions
currently being taken to generate product and service revenues,
along with plans to access capital sources and implement expense
reduction tactics, provide the opportunity for the Company to
continue as a going concern. These plans are contingent upon the
successful execution of these actions. As such, substantial doubt
about the entity's ability to continue as a going concern has not
been alleviated as of December 31, 2023, according to the Company's
Annual Report for the year ended December 31, 2023.
SOBR SAFE: Completes $8.2 Million Private Placement
---------------------------------------------------
SOBR Safe, Inc. announced the closing of a private placement with
certain institutional investors. The aggregate gross cash proceeds
were $8.2 million, before deducting fees to the placement agent and
other offering expenses payable by the Company. The Company intends
to use the net proceeds from the private placement for general
corporate purposes and working capital.
In connection with the private placement, the Company issued an
aggregate of 2,024,691 units. Each unit sold at an effective unit
price of $4.05 per unit and consisted of one share of common stock
(or one pre-funded warrant in lieu thereof), two (2) Series A
warrants, each exercisable for one share of common stock at an
initial exercise price of $3.80 per share and one Series B warrant
at an exercise price of $0.00001 to purchase such number of shares
of common stock as will be determined on the Reset Date (as defined
in the Series B warrant). The Series A warrants and the Series B
warrants are exercisable beginning on the date that Stockholder
Approval (as defined in the Series A warrant) is obtained. The
Series A warrants have a term of 5 years and the Series B warrants
are exercisable until exercised in full. The exercise price and
number of shares of common stock issuable upon exercise of the
Series A warrants are subject to adjustment upon future dilutive
issuances and stock splits, subject to a floor, and the exercise
price and number of shares of common stock issuable upon exercise
of the Series B warrants are subject to adjustment upon stock
splits, subject to a floor, in each case, as described in more
detail in the Current Report on Form 8-K to be filed in connection
with the private placement.
The closing of the private placement occurred on October 8, 2024.
Aegis Capital Corp. acted as the Exclusive Placement Agent for the
private placement. Lucosky Brookman LLP served as counsel to the
Company. Sichenzia Ross Ference Carmel LLP served as counsel to
Aegis Capital Corp.
The securities were sold in a private placement exempt from the
registration requirements of the Securities Act of 1933, as
amended, and have not been registered under the Act, or applicable
state securities laws. Accordingly, the securities may not be
offered or sold in the United States except pursuant to an
effective registration statement or an applicable exemption from
the registration requirements of the Act and such applicable state
securities laws. Pursuant to a registration rights agreement with
the investor, the Company has agreed to file one or more
registration statements with the Securities and Exchange Commission
covering the resale of the common stock sold in the private
placement and the common stock issuable upon exercise of the
pre-funded warrants and the warrants sold in the private
placement.
About SOBR Safe, Inc.
SOBR Safe, Inc. provides non-invasive technology to quickly and
humanely identify the presence of alcohol in individuals. These
technologies are integrated within the Company's robust and
scalable data platform, which produces statistical and measurable
user and business data. The Company's mission is to save lives,
increase productivity, create significant economic benefits, and
positively impact behavior. To this end, SOBR Safe has developed
the scalable, patent-pending SOBRsafe software platform for
non-invasive alcohol detection and identity verification.
As of June 30, 2024, SOBR Safe had $5,122,244 in total assets,
$1,431,746 in total liabilities, and $3,690,498 in total
stockholders' equity.
Littleton, Colorado-based Haynie and Company, the Company's auditor
since 2023, issued a "going concern" qualification in its report
dated March 29, 2024, citing that the Company has incurred
recurring losses from operations and has limited cash liquidity and
capital resources to meet future capital requirements.
Management believes that cash balances of approximately $2,800,000
and positive working capital of approximately $1,900,000 as of
December 31, 2023, do not provide adequate capital for operating
activities for the next twelve months after the issuance of these
financial statements. However, management believes that actions
currently being taken to generate product and service revenues,
along with plans to access capital sources and implement expense
reduction tactics, provide the opportunity for the Company to
continue as a going concern. These plans are contingent upon the
successful execution of these actions. As such, substantial doubt
about the entity's ability to continue as a going concern has not
been alleviated as of December 31, 2023, according to the Company's
Annual Report for the year ended December 31, 2023.
SOBR SAFE: L1 Capital Global Holds 9.99% Equity Stake
-----------------------------------------------------
L1 Capital Global Opportunities Master Fund, Ltd. disclosed in
Schedule 13G Report filed with the U.S. Securities and Exchange
Commission that it beneficially owned 252,174 shares of SOBR Safe,
Inc.'s common stock, representing 9.99% of the 2,340,733 shares of
Common Stock outstanding upon the closing of a private placement
based upon the SOBR's Current Report on Form 8-K filed with the
Securities and Exchange Commission on October 10, 2024.
On October 9, 2024, L1 Capital purchased 68,642 shares of the
SOBR's Common Stock, 240,000 Pre-Funded Warrants, 617,284 Series A
Warrants, and 308,642 Series B Warrants. The aggregate amount
beneficially owned represents 68,642 shares of the SOBR's Common
Stock and 183,532 shares of the SOBR's Common Stock underlying the
exercise of Pre-Funded Warrants, which are subject to a 9.99%
beneficial ownership limitation. Does not include 56,468 shares of
the SOBR's Common Stock underlying Pre-Funded Warrants, which are
subject to a 9.99% beneficial ownership limitation, 617,284 Series
A Warrants, which are subject to a 4.99% beneficial ownership
limitation, and 308,642 Series B Warrants, which are subject to a
9.99% beneficial ownership limitation.
A full-text copy of L1 Capital's SEC Report is available at:
https://tinyurl.com/2mzfsmrm
About SOBR Safe, Inc.
SOBR Safe, Inc. provides non-invasive technology to quickly and
humanely identify the presence of alcohol in individuals. These
technologies are integrated within the Company's robust and
scalable data platform, which produces statistical and measurable
user and business data. The Company's mission is to save lives,
increase productivity, create significant economic benefits, and
positively impact behavior. To this end, SOBR Safe has developed
the scalable, patent-pending SOBRsafe software platform for
non-invasive alcohol detection and identity verification.
As of June 30, 2024, SOBR Safe had $5,122,244 in total assets,
$1,431,746 in total liabilities, and $3,690,498 in total
stockholders' equity.
Littleton, Colorado-based Haynie and Company, the Company's auditor
since 2023, issued a "going concern" qualification in its report
dated March 29, 2024, citing that the Company has incurred
recurring losses from operations and has limited cash liquidity and
capital resources to meet future capital requirements.
Management believes that cash balances of approximately $2,800,000
and positive working capital of approximately $1,900,000 as of
December 31, 2023, do not provide adequate capital for operating
activities for the next twelve months after the issuance of these
financial statements. However, management believes that actions
currently being taken to generate product and service revenues,
along with plans to access capital sources and implement expense
reduction tactics, provide the opportunity for the Company to
continue as a going concern. These plans are contingent upon the
successful execution of these actions. As such, substantial doubt
about the entity's ability to continue as a going concern has not
been alleviated as of December 31, 2023, according to the Company's
Annual Report for the year ended December 31, 2023.
SOCAL CLIMATE: Gets OK to Use Cash Collateral Until Bankruptcy Exit
-------------------------------------------------------------------
Socal Climate Control & Mechanical, Inc. received interim approval
from the U.S. Bankruptcy Court for the Central District of
California, San Fernando Valley Division to continue to use its
cash collateral to pay the expenses set forth in its budget.
The decision marks the fifth extension since the company's Chapter
11 filing in March.
The interim order, signed by Judge Martin Barash, authorized the
company to use its cash collateral through the effective date of
its Chapter 11 plan of reorganization.
The plan was confirmed by the court on Oct. 10.
As protection, any creditor with security interest in the cash
collateral will be granted a replacement lien, with the same
priority and validity as its pre-bankruptcy lien.
About Socal Climate Control & Mechanical
Socal Climate Control & Mechanical, Inc. is a residential and light
commercial HVAC contractor in Chatsworth, Calif., providing
maintenance, repair and installation of HVAC systems.
Socal sought protection under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. C.D. Calif. Case No. 24-10371) on March 8, 2024, with
$1,532,802 in total assets and $1,344,211 in total liabilities.
Tammy Navarro, president, signed the petition.
Judge Martin R. Barash oversees the case.
Thomas B. Ure, Esq., at Ure Law Firm, represents the Debtor as
legal counsel.
SPIRIT AIRLINES: Frontier Airlines Wants to Renew Bid to Buy Co.
----------------------------------------------------------------
Peter Vercoe of Bloomberg News reports that Frontier Airlines is
considering renewing its bid to acquire Spirit Airlines Inc.,
according to a report from the Wall Street Journal.
The two budget airlines have recently engaged in discussions,
though talks are still in the early stages and may not result in a
deal, the WSJ reported, citing anonymous sources familiar with the
situation.
If a deal were to materialize, it would likely occur as part of
Spirit’s efforts to restructure its debt and other liabilities
during bankruptcy, according to the report.
Spirit's shares surged 53% on Monday, October 21, 2024, after the
airline secured additional time to manage its substantial debt
burden, which has raised concerns about its financial future.
About Spirit Airlines
Spirit Airlines Inc. is a major United States ultra-low cost
airline headquartered in Miramar, Florida, in the Miami
metropolitan area.
As of March 31, 2024, the Company had $9.5 billion in total assets,
$8.5 billion in total liabilities, and $1 billion in total
stockholders' equity.
* * *
In June 2024, S&P Global Ratings lowered its issuer credit rating
on Spirit Airlines Inc. to 'CCC' from 'CCC+'. S&P also lowered its
ratings on Spirit's enhanced equipment trust certificates (EETCs)
by one notch, in line with the lower issuer credit rating. The
negative outlook reflects the uncertainty around the company's
ability to address its upcoming 2025 maturities, the sustainability
of its capital structure over the longer term, and S&P's view that
a distressed exchange is likely.
In January 2024, Moody's Investors Service downgraded its ratings
of Spirit Airlines, including the corporate family rating to Caa2
from Caa1 and probability of default rating to Caa2-PD from
Caa1-PD. Moody's also downgraded the backed senior secured rating
assigned to Spirit IP Cayman Ltd.'s 8% senior notes, which are
secured by the company's loyalty program and brand IP, to Caa2 from
B2. The speculative grade liquidity rating remains unchanged at
SGL-3 and the rating outlook remains negative. The downgrade of
the
corporate family rating to Caa2 reflects Moody's belief that the
potential of a default has increased since Judge William Young
ruled in January that the agreed acquisition by JetBlue Airways
Corp. would be anti-competitive and a violation of the Clayton Act.
The downgrades of the CFR as well as of the senior notes secured by
Spirit's loyalty program IP and brand IP reflect the increased
potential of a default and less than a full recovery, whether in a
formal reorganization or if the senior secured notes are refinanced
or retired for less than face value. The Caa2 instrument rating
incorporates a negative one notch override of the LGD model to
reflect the potential for a more than nominal loss on the
instrument in a restructuring or exchange scenario. Following the
ruling on January 16, the market price of the notes fell to around
50 from the low to mid-70s since mid-November. The notes price has
increased to the low 60s following the announcement that Spirit and
JetBlue would appeal the District Court's ruling.
Moody's continues to expect Spirit's operations to generate an
operating loss in 2024 and again in 2025 on a reported basis.
Moody's forecasts about breakeven operating cash flow in 2024, an
improvement from its forecast for negative $150 million in 2023.
Moody's projects cash to fall from the $1.1 billion on hand on
September 30, 2023, towards $700 million by the end of 2024.
The Company's $300 million revolver expires on September 30, 2025.
Alternate sources of liquidity are very limited.
In September 2023, Egan-Jones Ratings Company maintained its 'CCC+'
foreign currency and local currency senior unsecured ratings on
debt issued by Spirit Airlines, Inc.
STANDARDAERO INC: Fitch Affirms 'BB' LongTerm IDR, Outlook Positive
-------------------------------------------------------------------
Fitch Ratings has affirmed StandardAero, Inc. (NYSE: SARO) and
Dynasty Acquisition Co. Inc.'s (Dynasty) Long-Term Issuer Default
Rating (IDR) at 'BB'. Fitch also rates Dynasty's first-lien secured
revolver and first-lien term loan ratings at 'BBB-' with a Recovery
Rating of 'RR1' given post-issuance termination of the existing ABL
facility as per Fitch's "Corporate Recovery Ratings and Instrument
Ratings Criteria". The Rating Outlook is Positive.
Key Rating Drivers
Rating Rationale: The rating and Positive Outlook reflect the
company's leading position within the engine and component repair
services markets with diversified exposure to commercial, military
and helicopter, and business aviation end markets. SARO also
benefits from longstanding relationships across a broad range of
original equipment manufacturer (OEM), airline, and defense
customers and engine platforms, particularly the LEAP and CFM56.
Management has made investments to expand capacity and build out
engine maintenance capabilities to meet aerospace engine demand
growth and capture engine platform share. Fitch recognizes
operational and performance execution risks remain to realize
expected growth. Fitch could upgrade the rating as the company
realizes growth expectations by increasing CFM56 shop visits and
maintenance share and de-risking initial LEAP operational
performance and cost risks, while establishing a financial policy
and M&A track record maintaining EBITDA leverage in the 3x-3.5x
range.
Offering Increases Liquidity, Extends Maturities: SARO's offering
increases revolving credit facility capacity to $750 million from
the combined $550 million under the current ABL and credit
facility. The offering also intends to extend the term loan
maturity to seven years. Fitch's rating case forecasts EBITDA
leverage of approximately 3.7x at YE 2024 consistent with 'BB'
rating tolerances. Leverage is projected to exhibit improving
trends towards low-3x in 2025, subject to the realization of growth
opportunities and execution of potential M&A.
Certifications Support Strong Market Position: SARO's market
position is strong and defensible. It is one of the largest
independent commercial aviation maintenance, repair and overhaul
(MRO) companies in the world and has longstanding relationships
with the largest aerospace engine OEMs. This work requires OEM
authorizations and regulatory certifications for each engine
program, which are expensive and take considerable time for new
entrants to acquire.
The company's wide range of program certifications and strong OEM
relationships are major differentiators from its peers and create a
defensible barrier against competition. Most of its contracts span
more than 10 years and often last through the life of an engine.
SARO has been able to renew all of its contracts due to consistent
execution and longstanding customer relationships.
LEAP Award: SARO was awarded a license to perform MRO services for
CFM International's LEAP engine in 2023. Fitch believes the LEAP
engine strongly supports SARO's positive trajectory, providing
revenue visibility, diversification, growth and stability. The
engine will remain in service for several decades on two of the
largest and growing aircraft programs: The Boeing Company's
(Boeing; BBB-/Negative) 737MAX aircraft and Airbus SE's
(A-/Positive) A320neo family, as well as The Commercial Aircraft
Corporation of China, Ltd.'s (Comac) C919.
Fitch anticipates the LEAP program's contributions to SARO's total
revenues will exhibit significant annual growth and will likely
quickly become and remain the company's largest program through at
least the end of the current decade.
Requirements, Diversification Support Revenue: SARO's revenue
profile is supported by predictable, highly regulated aircraft and
engine maintenance requirements during a normal operating
environment and diversified mix of end markets, customers and
engine platforms. This visibility was temporarily disrupted during
the pandemic, when airlines grounded a significant proportion of
their fleets and delayed external maintenance by using more spare
parts. However, visibility into customer needs has significantly
improved.
Operational Execution Risks Remain: Fitch believes continued
operational execution is a priority for SARO. In Fitch's view,
instances of poor execution would likely diminish the company's
currently strong reputation and could result in customers switching
to SARO's competitors. However, SARO does not have a history of
material contract cancellations in recent years. It also has an
experienced management team with a good track record, who Fitch
believes would be capable of navigating potential challenges.
Acquisition Strategy: Management views M&A as a core tenet of its
value creation opportunity set. Fitch expects SARO will continue to
supplement organic growth with incremental bolt-on acquisitions.
The transition to a publicly traded company could result in a shift
in the size, timing, and funding of acquisitions relative to its
previous, private company track record. The company has
historically drawn on its ABL facility to fund transactions.
However, Fitch believes the company will continue to actively
pursue transactions that provide additional certifications or
improve diversification.
Derivation Summary
SARO's IDR is supported by the company's lesser degree of
cyclicality compared with OEMs and its stable and relatively
predictable revenue stream, which Fitch believes compares favorably
with 'BB' category peers. The company's leverage and financial
structure are important rating factors and have improved toward
historical levels since the pandemic grounded air traffic.
SARO's leading market position was also a consideration in deriving
the rating and is reinforced by the company's portfolio of
certifications, including the LEAP certification, and
diversification. SARO is well positioned as the largest independent
MRO provider in the world, although competition exists from OEMs
and inhouse airline MRO operations.
No country ceiling or operating environment factors were in effect
for these ratings. A parent-subsidiary linkage exists between SARO
and Dynasty with a stronger subsidiary, weaker parent relationship
given the organizational structure and proximity to
assets/operations. Fitch equalizes the IDRs of SARO and Dynasty
following assessment of legal ring-fencing and access & control.
Key Assumptions
- Revenue continues to grow by double digits per year between 2024
and 2026, as air traffic and flight capacity improves and the
company begins to ramp LEAP engine work;
- EBITDA margins expand modestly from scale and operational
efficiencies;
- Cash outflows from working capital continue as the company builds
inventory back up to meet demand and revenue growth;
- Capex trends towards 1.0%-1.5% of revenue over the next few years
following one-time investments in 2023 and 2024;
- No material M&A transactions but ongoing bolt-on acquisitions;
- No dividends are projected in the near term.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Upgrade
- Realization of growth expectations and de-risking CFM56 and LEAP
operational performance and cost risks;
- Demonstrated track record of financial policy and M&A strategy
leading to EBITDA leverage sustained below 3.5x;
- Maintenance of financial flexibility, including (CFO-Capex)/Debt
around 10%.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Downgrade
- Material contract cancellations caused by weakened reputation or
inability to secure certifications on future engine programs;
- EBITDA leverage sustained above 4.0x;
- Reduced financial flexibility, including (CFO-Capex)/Debt
approaching 5%.
Liquidity and Debt Structure
Adequate Liquidity: Cash and equivalents totalled over $60 million
as of June 30, 2024. The company will also have access to a $750
million, five-year secured revolving credit facility (proforma
borrowings of $75 million as of June 30, 2024) following completion
of its debt offering. Fitch views the company's current liquidity
and forecasted FCF as adequate to cover near-term expenses such as
working capital growth, debt amortization and capex.
The company's proforma capital structure includes a senior first
lien revolver and a senior first lien term loan B.
Issuer Profile
StandardAero, Inc. is the world's largest independent provider of
MRO services for the commercial, business jet, and military
aviation markets.
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
----------- ------ -------- -----
Dynasty Acquisition
Co., Inc. LT IDR BB Affirmed BB
senior secured LT BBB- New Rating RR1
StandardAero, Inc. LT IDR BB Affirmed BB
STEWARD HEALTH: PCO Files Second Supplemental Report
----------------------------------------------------
Susan Goodman, the patient care ombudsman, filed with the U.S.
Bankruptcy Court for the Southern District of Texas her second
supplemental report regarding the quality of patient care provided
by Steward Health Care System, LLC and affiliates.
The PCO filed five initial reports, separated by geographical
location, on July 22. Thereafter, PCO filed a supplemental report
regarding the St. Luke's Behavioral Health Hospital (SLBH) location
alerting the Court to a catastrophic failure of its heating,
ventilation, and air conditioning (HVAC) system.
The PCO explained that the HVAC failure ultimately led to a
regulatory directive to emergently move all inpatients to
alternative care locations, inpatient care license termination, and
the eventual transitions of the remaining outpatient patient
population.
The PCO noted that while the parties reported feeling hopeful that
a definitive path would be the outcome of the latest meeting with
the regulators, that did not occur. Additional steps will need to
be undertaken before a SLBH sale could be effectuated.
The PCO asserted that the purpose of this report is to ensure that
the court is informed that an ultimate decision regarding ongoing
operations at SLBH remains undetermined. As such, while PCO's role
with respect to the Arizona acute care hospitals should wind-up
through approval of that sale, PCO will need to remain engaged at
SLBH to ensure continued advocacy regarding patient records,
particularly so since SLBH's service offering included court
ordered care to children, teenagers, and adults.
A copy of the supplemental report is available for free at
https://urlcurt.com/u?l=iEohd1 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.
SUPPLY SOURCE: Court Okays Creditor Deal, Chapter 11 Plan
---------------------------------------------------------
Rick Archer of Law360 Bankruptcy Authority reports that on October
22, 2024, a Delaware bankruptcy judge approved the Chapter 11
liquidation plan for Supply Source Enterprises Inc., a cleaning
products company, after being informed that over $1.3 million had
been earmarked from its July asset sale to pay unsecured
creditors.
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.
SYNAPSE FINANCIAL: Evolve to Return Funds to Brokerage End Users
----------------------------------------------------------------
Evolve Bank & Trust announced on October 23, 2024, the distribution
and payment processes to return funds held by Evolve to Synapse
Brokerage end users impacted by the Synapse bankruptcy.
To facilitate the distribution, Rust Consulting, an Exela
Technologies brand, will serve as the administrator to disburse
funds to end users of Synapse Brokerage that the Bank has held
since the Synapse bankruptcy.
"We understand that this has been a frustrating experience for
Synapse's end users and share that frustration," said Scot Lenoir,
Founder, Evolve Bank and Trust. "Evolve has been working diligently
to sort through over 100 million transaction records to evaluate
the flawed ledgers from Synapse to reconstruct end users' positions
at Evolve. We know this has taken time, but we believed it was in
everyone's best interest and the responsible thing to do to
complete the reconciliation and, with an accurate understanding of
end user balances, begin to return funds back to those end users.
We are proud of the work we have completed and hope that it will
serve as an example to others."
End user Call Center & Website
Evolve has launched a website -- reconciliationbyevolve.com --
which includes resources for end users including FAQs about the
reconciliation process, as well as information about the process to
disburse end user balances at Evolve.
Additionally, Evolve has launched a dedicated call center to answer
end user questions about the distribution process. End users may
call 877-873-0008 from 8 a.m. to 5 p.m. CT, Monday through Friday
(excluding major holidays).
Distribution Process and Payment of End user Balances
On November 4, 2024, Rust will send an email to end users who have
a balance at Evolve, directing them to reconciliationbyevolve.com.
End users will login with information provided in that email. Once
logged in and authenticated, end users will be provided with their
Synapse ecosystem balance as well as the amount of any of their
funds that Evolve holds and will be disbursing to them.
Funds will be disbursed in two ways:
-- Those with balances at Evolve of $100 or more will receive an
email with instructions on selecting a payment method to receive
their balance. The email will contain an important claim and access
code to create an account to register for payment. They will also
be given a set of payment methods from which to choose, which may
include ACH transfer, wire, or check, among others. Payments will
be sent within approximately 7 days of end users setting up their
account and choosing their payment method. End users that do not
respond by December 4, 2024, will receive a check.
-- Those with balances at Evolve of less than $100 will receive
payments directly through an online payment service. End users that
do not claim their payment by December 4, 2024, will receive a
check. -- Any end user with a balance at Evolve who wishes to
receive their balance via check will be able to request one.
If you do not receive an email by November 14, 2024, and believe
you are owed a balance by Evolve, please visit
reconciliationbyevolve.com for more information.
About Evolve Bank & Trust:
Evolve Bank & Trust, a technology focused financial services
organization, offers specialized solutions in Open Banking,
Personal and Business Banking, Mortgage, SBA Lending, Physicians
Capital, and Trust. Evolve has been voted a Top Workplace USA and
has been named in Inc. Magazine's 5000 List of the fastest growing
private companies.
About Synapse Financial
Headquartered in San Francisco, Calif., Synapse Financial
Technologies, Inc. provides banking-as-a-service platform for
embedded finance solutions worldwide.
The Debtor sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. C.D. Cal. Case No. 24-10646) on April 22, 2024. In the
petition signed by Sankaet Pathak, chief executive officer, the
Debtor disclosed up to $50 million in assets and liabilities.
Judge Martin R. Barash oversees the case.
Ron Bender, Esq., at Levene, Neale, Bender, Yoo & Golubchik L.L.P.,
is the Debtor's legal counsel.
Jelena McWilliams has been appointed as Chapter 11 Trustee. She has
tapped GlassRatner Advisory & Capital Group LLC d/b/a B. Riley
Advisory Services as her financial advisor; and Cravath, Swaine &
Moore LLP and Keller Benvenutti Kim LLP as counsel.
TAG FL: U.S. Trustee Unable to Appoint Committee
------------------------------------------------
The U.S. Trustee for Region 21, until further notice, will not
appoint an official committee of unsecured creditors in the Chapter
11 case of TAG FL LLC, according to court dockets.
About Tag FL
Tag FL, LLC owns commercial real estate located at 200 N. Harper
St., Laurens, S.C.
TAG FL filed Chapter 11 petition (Bankr. M.D. Fla. Case No.
24-04923) on September 13, 2024, with total assets of $1,500,000
and total liabilities of $2,944,095. Tarek Aly, manager, signed the
petition.
Judge Lori V. Vaughan oversees the case.
Kenneth D. Herron, Jr., Esq., at Herron Hill Law Group, PLLC,
represents the Debtor as bankruptcy counsel.
TALPHERA INC: CMO Shakil Aslam Reports 32,000 Shares, Stock Options
-------------------------------------------------------------------
Shakil Aslam, Chief Medical Officer of Talphera, Inc. filed a Form
3 Report with the U.S. Securities and Exchange Commission,
disclosing direct beneficial ownership of 32,000 shares of common
stock of Company as of October 1, 2024. In addition, he reported
holding stock options granting him the right to purchase 185,000
shares of common stock at an exercise price of $1.08 per share,
which will vest over time according to specified conditions.
A full-text copy of Shakil Aslam's SEC Report is available at:
https://tinyurl.com/3yn936xw
About Talphera
Headquartered in San Mateo, California, Talphera, Inc. --
www.talphera.com -- is a specialty pharmaceutical company focused
on the development and commercialization of innovative therapies
for use in medically supervised settings. Talphera's lead product
candidate, Niyad, is a lyophilized formulation of nafamostat and is
currently being studied under an investigational device exemption
(IDE) as an anticoagulant for the extracorporeal circuit, and has
received Breakthrough Device Designation status from the U.S. Food
and Drug Administration (FDA).
Walnut Creek, Calif.-based BPM LLP, the Company's auditor since
2023, issued a "going concern" qualification in its report dated
March 6, 2024, citing that the Company has suffered recurring
operating losses and negative cash flows from operating activities
since inception, and expects to continue to incur operating losses
and negative cash flows in the future. These matters raise
substantial doubt about its ability to continue as a going
concern.
Talphera reported a net loss of $18.4 million for 2023 and a net
income of$47.8 million for 2022. As of June 30, 2024, Talphera had
$24,856,000 in total assets, $12,126,000 in total liabilities, and
$12,730,000 in total stockholders' equity.
TAYLOR G. WRIGHT: Voluntary Chapter 11 Case Summary
---------------------------------------------------
Debtor: Taylor G. Wright, P.C.
6405 South 3000 East, Suite 300
Salt Lake City, UT 84121
Case No.: 24-25496
Chapter 11 Petition Date: October 23, 2024
Court: United States Bankruptcy Court
District of Utah
Judge: Hon. Kevin R. Anderson
Debtor's Counsel: Ted F. Stokes, Esq.
STOKES LAW PLLC
2072 North Main Suite 102
North Logan, UT 84341
Tel: (435) 213-4771
Fax: (888) 443-1529
Email: ted@stokeslawpllc.com
Estimated Assets: $100,000 to $500,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Zachary Paul as chief financial
officer.
The Debtor failed to include in the petition a list of its 20
largest unsecured creditors.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/Z6BPPDY/Taylor_G_Wright_PC__utbke-24-25496__0001.0.pdf?mcid=tGE4TAMA
TECHGROUPONE INC: Linda Leali Named Subchapter V Trustee
--------------------------------------------------------
The U.S. Trustee for Region 21 appointed Linda Leali, Esq., as
Subchapter V trustee for TechGroupOne, Inc.
Ms. Leali will be paid an hourly fee of $450 for her services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Ms. Leali declared that she is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Linda M. Leali
Linda M. Leali, P.A.
2525 Ponce De Leon Blvd., Suite 300
Coral Gables, FL 33134
Telephone: (305) 341-0671, ext. 1
Facsimile: (786) 294-6671
Email: leali@lealilaw.com
About TechGroupOne Inc.
TechGroupOne, Inc., sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Fla. Case No. 24-20339) on October 4,
2024, with $0 to $50,000 in assets and $500,001 to $1 million in
liabilities.
Diego Mendez, Esq. represents the Debtor as legal counsel.
TELLURIAN INC: Magnetar Financial Ceases to Own Over 5% of Shares
-----------------------------------------------------------------
Magnetar Financial LLC has filed a Schedule 13G/A report with the
SEC, disclosing that as of October 9, 2024, it and its affiliated
entities -- Magnetar Capital Partners LP, Supernova Management LLC,
and David J. Snyderman -- ceased to be beneficial owners of more
than five percent of the Shares of Tellurian Inc.'s common stock.
Since the filing of Schedule 13D on July 29, 2024, on October 8,
2024, Tellurian consummated a merger pursuant to which each Share
of Issuer's common stock outstanding immediately prior to the
Effective Date was cancelled and converted into the right to
receive $1.00 in cash, without interest. In connection with the
Merger, the Reporting Persons' Shares, which consisted of 2,294,391
Shares sold for the benefit of Relative Value Master Fund,
10,459,602 Shares sold for the benefit of Systematic Master Fund,
33,567,203 Shares sold for the benefit of PRA Master Fund, and
2,119,054 Shares sold for the benefit of a Managed Account, were
cancelled and converted into the right to receive $1.00 in cash,
without interest. The Shares sold for the benefit of the Managed
Account were purchased after the filing of the Schedule 13D on July
29, 2024.
After the merger, the reporting entities are deemed to have
beneficial ownership of 0 shares.
A full-text copy of Magnetar Financial's SEC Report is available
at:
https://tinyurl.com/nhjjxx2a
About Tellurian
Tellurian Inc., a Delaware corporation, is a Houston-based company
that is developing and plans to own and operate a portfolio of LNG
marketing and infrastructure assets that includes an LNG terminal
facility and related pipelines. The Driftwood terminal and related
pipelines are collectively referred to as the "Driftwood Project."
The Company also owns upstream natural gas assets. On Feb. 6, 2024,
the Company announced that it was exploring a sale of those assets.
As of Dec. 31, 2023, the Company's upstream natural gas assets
consist of 30,034 net acres and interests in 161 producing wells
located in the Haynesville Shale trend of northern Louisiana.
Houston, Texas-based Deloitte & Touche LLP, the Company's auditor
since 2016, issued a "going concern" qualification in its report
dated Feb. 23, 2024, citing that the Company has incurred recurring
losses from operations and has yet to establish an ongoing source
of revenues that is sufficient to cover its future operating costs
and obligations as they become due for the twelve months following
the date these consolidated financial statements are issued, which
raises substantial doubt about its ability to continue as a going
concern.
Tellurian reported a net loss of $166.18 million for the year ended
Dec. 31, 2023, compared to a net loss of $49.81 million for the
year ended Dec. 31, 2022. As of June 30, 2024, Tellurian had
$939.66 million in total assets, $384.88 million in total
liabilities, and $554.77 million in total stockholders' equity.
TINY PIECES: Leona Mogavero Named Subchapter V Trustee
------------------------------------------------------
The U.S. Trustee for Regions 3 and 9 appointed Leona Mogavero,
Esq., at Zarwin Baum as Subchapter V trustee for Tiny Pieces, LLC.
Ms. Mogavero will be paid an hourly fee of $425 for her services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Ms. Mogavero declared that she is a disinterested person according
to Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Leona Mogavero, Esq.
Zarwin Baum
One Commerce Square
2005 Market Street, 16th Floor
Philadelphia, PA 19103
Phone: (267) 765-9630
Email: lmogavero@zarwin.com
About Tiny Pieces
Tiny Pieces, LLC is engaged in activities related to real estate.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D. Pa. Case No. 24-13515) on September
30, 2024, with $1 million to $10 million in assets and liabilities.
Asmaro Gist, managing member, signed the petition.
Judge Ashely M. Chan presides over the case.
Roger V. Ashodian, Esq. at REGIONAL BANKRUPTCY CENTER OF
SOUTHEASTERN P.A., P.C. represents the Debtor as legal counsel.
TRUE VALUE: Seeks Appointment of Retiree Committee
--------------------------------------------------
True Value Company, LLC is seeking the appointment of an official
committee that will represent retirees in the company's Chapter 11
case.
In its motion filed with the U.S. Bankruptcy Court for the District
of Delaware, True Value Company proposed the appointment of a
committee that will be comprised of retirees or their beneficiaries
who receive benefits under its retiree plans.
The company provides post-employment medical, dental and vision
benefits, and life insurance and death benefits to retirees. As of
Oct. 14, the company provides benefits to four retirees under its
retiree health plan, and 303 retirees under its retiree life plan.
Both plans face possible termination in light of the proposed sale
of the company's assets.
True Value Company received a stalking horse bid from Do It Best
Corp. to purchase the assets. However, Do It Best's offer does not
contemplate the assumption of any liabilities under the retiree
plans and does not provide sufficient consideration to allow for
payment by the company of the retiree benefits following the sale.
"[True Value Company] intends to seek relief under Bankruptcy Code
Section 1114 to terminate the retiree plans and all associated
obligations," Joseph Larkin, Esq., the company's attorney, said in
his motion.
"Prompt appointment of a retiree committee is necessary to ensure
the process contemplated by Section 1114 proceeds expeditiously,
fairly, and in the best interests of the estates and stakeholders,"
the attorney further said.
The motion is on the court's calendar for Nov. 4.
About True Value Company
True Value Company, LLC and its affiliates are hardlines
wholesalers, serving approximately 4,500 stores worldwide. A
globally recognized retail brand, the Debtors provide customers in
over 55 countries an expansive product set across key categories
such as Hardware Lumber and Building, Outdoor Living and Tools, and
Plumbing and Heating.
The Debtors filed voluntary Chapter 11 petitions (Bankr. D. Del.
Lead Case No. 24-12337) on October 14, 2024. True Value estimated
total assets of $100 million to $500 million and total liabilities
of $500 million to $1 billion as of the bankruptcy filing.
Judge Karen B. Owens oversees the cases.
The Debtors tapped Skadden, Arps, Slate, Meagher & Flom LLP, and
Young Conaway Stargatt & Taylor, LLP as bankruptcy counsel; Glenn
Agre Bergman & Fuentes, LLP as conflicts counsel; Houlihan Lokey
Capital, Inc. as financial advisor; and Omni Agent Solutions, Inc.
as claims and administrative agent. The Debtors also tapped M3
Advisory Partners, LP to provide chief transformation officer and
supporting personnel.
TRUE VALUE: Wants to Create Retiree Committee to Reduce Benefits
----------------------------------------------------------------
Alex Wolf of Bloomberg Law reports that bankrupt wholesaler and
hardware brand True Value has taken steps to establish an official
committee for its retired employee beneficiaries, aiming to
facilitate the termination or modification of their benefit plans.
True Value Company LLC is preparing to sell its business out of
bankruptcy to competitor Do it Best Corp., but according to a court
filing on Monday, neither the lead bidder nor any other potential
buyers seem willing to take on the company’s retiree health and
benefit plans.
Without a resolution that preserves health and life insurance
coverage for around 300 beneficiaries, True Value will be forced to
terminate the plans.
About True Value Company
True Value Company, headquartered in Chicago, is one of the world's
leading hardlines wholesalers with over 75 years of experience.
True Value Company has an international network of 4,500
independently owned and operated stores that are committed to
providing customers exceptional products and expert guidance for
their DIY and home maintenance projects.
True Value Company, L.L.C., and certain of its affiliates initiated
voluntary Chapter 11 proceedings (Bankr. D. Del. Lead Case No.
24-12337) on October 14, 2024. True Value estimated total assets of
$100 million to $500 million and liabilities of $500 million to $1
billion as of the bankruptcy filing.
Skadden, Arps, Slate, Meagher & Flom LLP; Glenn Agre Bergman &
Fuentes LLP; and Young Conaway Stargatt & Taylor, LLP, are serving
as legal counsel, M3 Partners, LP, is serving as financial advisor;
and Houlihan Lokey is serving as investment banker to the Company.
Omni Agent Solutions is the claims agent.
TW MEDICAL: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: TW Medical Group LLC
DBA Innovation Medical Group
DBA Utah Foot & Ankle
6405 South 3000 East
Suite 300
Salt Lake City, UT 84121
Case No.: 24-25495
Business Description: Innovation Medical Group is a podiatry
practice offering state-of-the-art care
across many locations in the United States.
The Company provides care for patients of
all ages, from infants to older adults.
Its podiatry team specializes in diagnosing
and treating many foot and ankle conditions,
including plantar fasciitis, tendonitis,
ingrown toenail, toenail fungus, bunions,
and flat feet.
Chapter 11 Petition Date: October 23, 2024
Court: United States Bankruptcy Court
District of Utah
Debtor's Counsel: George B. Hofmann, Esq.
COHNE KINGHORN, P.C.
111 E. Broadway, 11th Floor
Salt Lake City, UT 84111
Tel: 801-363-4300
Fax: 801-363-4378
Debtor's
Special
Counsel: PIA HOYT, LLC
Estimated Assets: $10 million to $50 million
Estimated Liabilities: $10 million to $50 million
The petition was signed by Zachary Paul as chief financial
officer.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/ZDLR6EA/TW_Medical_Group_LLC__utbke-24-25495__0001.0.pdf?mcid=tGE4TAMA
List of Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
1. Protectus LLC/ Vendor Account $10,129,365
Protectus Technologies
4471 Dean Martin,
Unit 4207
Las Vegas, NV 89103
Tel: 702-600-4200
Email: cs@protectustechnologies.com;
michael@pmcgroups.com
2. Timber Peaks Vendor Account $2,866,226
10808 Riverfront
Pkwy, Ste 3141
South Jordan, UT 84095
Tel: 801-824-0672
Email: customerservice@timberpeaksmedical.com
3. Venture Medical Vendor Account $1,230,440
211 N Higgins
Avenue, 305
Missoula, MT 59801
Tel: 800-881-1809
Email: john@venturemendical1.com ;
info@venturemedical1.com
4. Kerecis LLC Vendor Account $923,492
2101 Wilson Blvd,
Ste 900
Arlington, VA 22201
Tel: 703-287-8752
Email: phumphrey@us.kerecis.com;
accountsreceivable@kerecis.com
5. Medshift Vendor Account $260,100
328 W Carson Blvd.
Charlotte, NC 36832
Tel: 800-980-0522
Email: AR@medshift.com
6. SIS 004, LLC Vendor Account $237,538
c/o J. Leishman
4238 Foothill Drive
Bountiful, UT 84010
Tel: 801-580-3959;
801-915-6785
Email: jjleishman@live.com
7. Vernon Capital Vendor Account $225,000
383 Kingston
Avenue, Suite 343
Brooklyn, NY 11213
Tel: 347-331-0550
Email: underwriting@vernoncapitalgroup.com
8. Thomas Scientific Vendor Account $220,159
7125 Northland
Terrace N, Ste 100
Brooklyn Park, MN 55428
Tel: 763-559-3008
Email: ar@ncimicro.com
9. US Department of School Loan $175,000
Education
PO Box 790233
St Louis, MO
63179-0233
Tel: 1-800-872-5327
Email: press@ed.gov
10. Bryan S. Poe Vendor Account $144,217
406 S Park Avenue
Aztec, NM 87410
Email: info@executiveescrowservicesinc.com
11. US Department of Education School Loan $80,000
PO Box 790233
St Louis, MO
63179-0233
Tel: 1-800-872-5327
Email: press@ed.gov
12. Colorado Department of Taxes $74,607
Revenue
PO Box 17087
Denver, CO
80217-0087
Tel: (303) 205-5600
Email: dor_taxreminder@state.co.us
13. American Express Vendor Account $69,499
PO Box 650448
Dallas, TX
75265-0448
Tel: 800-528-4800
14. IPFS Corporation Vendor Account $61,787
24722 Network Place
Chicago, IL
60673-1247
Tel: 866-413-2569
Email: webmail@ipfs.com
15. Life Technologies ThermoFish $53,512
Corporation
Bank of America
Lockbox Services
12088 Collections
Center Drive
Chicago, IL 60693
Tel: 800-955-6288
Email: ransitiontolife@lifetech.com;
sorin.neagu@thermofisher.com
16. CFG Merchant Solutions Vendor Account $51,026
JP Morgan Chase
180 Maiden Lane,
Floor 15
New York, NY 10038
JPMorgan Chase Bank
Tel: 844-662-3467
Email: info@cfgms.com
17. Bryan S. Poe Loan Business $44,320
406 S Park Avenue Purchase
Aztec, NM 87410
18. DrCrono Inc. Vendor Account $44,096
111 N Magnolia Avenue
Suite 1100
Orlando, FL 32801
Tel: 844-569-8628
Email: billing@drchrono.com
19. Rocky Mountain Vendor Account $43,561
Escrow, Inc
970 Main Avenue
PO Box 2106
Durango, CO 81302
Tel: 970-385-4423
Email: info@rmedgo.com
20. Southwest Retina Vendor Account $36,108
Holdings LLC
845 Summit Ridge Trail
Durango, CO 81301
Tel: 970-828-2200
Email: mfenberg@sweyeconsultants.com
WHEEL PROS: S&P Discontinues 'D' Issuer Credit Rating
-----------------------------------------------------
S&P Global Ratings discontinued all of its ratings on aftermarket
custom wheel maker Wheel Pros Inc. (D/--). This follows its
downgrade of the company to 'D' following its Chapter 11 bankruptcy
filing in September 2024.
[*] 2024 Distressed Investing Conference: Register Today!
---------------------------------------------------------
Registration is ongoing for the 31st Annual Distressed Investing
Conference, presented by Beard Group, Inc., scheduled for Wed.,
Dec. 4, 2024 at The Harmonie Club in New York City.
This year's event will kick off with opening remarks from
conference co-chairs, Joshua A. Sussberg, Partner at Kirkland &
Ellis LLP, and Harold L. Kaplan, Partner at Foley & Lardner LLP, to
be followed by the Annual Year In Review by Steve Gidumal,
President and Managing Partner of Virtus Capital, LP.
David Griffiths, Partner at Weil, Gotshal & Manges LLP, will lead a
roundtable discussion on the Health of the Restructuring Industry;
and David Hillman, Partner at Proskauer Rose LLP, will head a panel
discussion on Private Credit Restructuring. Hillman will be joined
by Kevin O'Neill, Director at KKR; Austin Witt, Partner at Kirkland
& Ellis; and Michele Kovatchis, Senior Managing Director at Antares
Capital.
The event also features a pair of sessions on Liability Management.
Join Damian Schaible, Partner at Davis Polk & Wardwell LLP; John
Sobolewski, Partner at Wachtell, Lipton, Rosen & Katz; and David M.
Nemecek, Partner at Kirkland & Ellis for "Liability Management:
Structuring From Creditor On Creditor Violence To Cooperation."
Mark Hebbeln, Partner at Foley & Lardner LLP as Moderator; Lorenzo
Marinuzzi, Partner at Morrison & Foerster LLP; and Zachary
Rosenbaum at Kobre & Kim will handle "Liability Management:
Bankruptcy Litigation - Go Wesco Young Man."
Will We Ever Go Shopping/Officing Again? The afternoon's slate will
start with a discussion on the state of Retail and Commercial Real
Estate to be led by Hilco Global's Co-Chief Commercial Officer,
Benjamin L. Nortman. He will be joined by Dan O'Brien, Executive
Vice President & Partner at Hilco Real Estate; Tim Hynes, Global
Head of Credit Research at Debtwire, an ION Analytics Company;
Jeffrey Stein, Managing Partner at Stein Advisors; and Seth
Laughlin, Managing Director, Market Analytics at Green Street.
Kirkland's Joshua A. Sussberg will follow with "Where Do We Go From
Here? The Return Of Capital R Restructurings?"
Stephanie Wickouski, Partner at Locke Lord LLP, will moderate "Top
Considerations For A Board Before And During A Bankruptcy: What
Investors Need To Know About What Happens In The Boardroom." She
will be joined by Michelle Dreyer, Managing Director at CSC Global
Financial Markets; Chelsea A. Grayson, Managing Director at Pivot
Group, and Board Member at both Xponential Fitness and Beyond Meat;
and Matthew R. Brooks, Partner at Troutman Pepper.
This will be followed by "Recognition, Releases And Torts In A
Cross-Border World" to be led by Evan Hill, Partner at Skadden,
Arps, Slate, Meagher & Flom LLP as Moderator; the Hon. Robert Drain
(RET.), Of Counsel, Corporate Restructuring at Skadden; the Hon.
Lisa Beckerman, United States Bankruptcy Judge for the Southern
District of New York; and Timothy Graulich, Partner at Davis Polk &
Wardwell LLP.
Virtus' Steve Gidumal will cap the day's events with Investor's
Roundtable. He will be joined by Gary Hindes, President &
Portfolio Manager at The Delaware Bay Company LLC; Matt Dundon, CEO
and President of Dundon Advisers, LLC; Richard Fels, Sr. Managing
Director at Odeon Capital Group; and Ken Grossman, President and
Portfolio Manager at Juris Partners.
The conference also features two side events: The Harvey R. Miller
Annual Awards Luncheon and the Networking Reception and Awards
Honoring Outstanding Young Restructuring Lawyers in the evening.
Jamie Sprayragen, Vice Chairman of Hilco Global, will be presented
this year's Harvey R. Miller Outstanding Achievement Award for
Service to the Restructuring Industry. Catch his live interview
during the luncheon, to be conducted by Henny Sender, Managing
Director of BlackRock.
The 2024 Turnarounds & Workouts Outstanding Young Restructuring
Lawyers are:
BENJAMIN S. ARFA, Wachtell, Lipton, Rosen & Katz
KATE DOORLEY, Akin Gump Strauss Hauer & Feld LLP
JEREMY D. EVANS, Paul Hastings LLP
RAFF FERRAIOLI, Morrison Foerster LLP
BRANDON HAMMER, Cleary Gottlieb Steen & Hamilton LLP
EVAN A. HILL, Skadden, Arps, Slate, Meagher & Flom LLP
FLORA INNES, Latham & Watkins LLP
CHRISTIAN JENSEN, Sullivan & Cromwell LLP
LAUREN REICHARDT, Cooley LLP
DAVID SCHIFF, Davis Polk & Wardwell LLP
LUKE SIZEMORE, Reed Smith
APARNA YENAMANDRA, Kirkland & Ellis, LLP
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.;
* Paul Hastings;
* RJReuter;
* SSG Capital Advisors; and
* Stein Advisors LLC
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.
[] BOOK REVIEW: The First Junk Bond
-----------------------------------
Author: Harlan D. Platt
Publisher: Beard Books
Softcover: 236 pages
List Price: $34.95
http://www.beardbooks.com/beardbooks/the_first_junk_bond.html
Only one in ten failed businesses is equal to the task of
reorganizing itself and satisfying its prior debts in some
fashion.
This engrossing book follows the extraordinary journey of Texas
International, Inc. (known by its New York Stock Exchange stock
symbol, TEI), through its corporate growth and decline, debt
exchange offers, and corporate renaissance as Phoenix Resource
Companies, Inc. As Harlan Platt puts it, TEI "flourished for a
brief luminous moment but then crashed to earth and was consumed."
TEI's story features attention-grabbing characters, petroleum
exploration innovations, financial innovations, and lots of risk
taking.
The First Junk Bond was originally published in 1994 and received
solidly favorable reviews. The then-managing director of High Yield
Securities Research and Economics for Merrill Lynch said that the
book "is a richly detailed case study. Platt integrates corporate
history, industry fundamentals, financial analysis and bankruptcy
law on a scale that has rarely, if ever, been attempted." A retired
U.S. Bankruptcy Court judge noted, "[i]t should appeal as
supplementary reading to students in both business schools and law
schools. Even those who practice.in the areas of business law,
accounting and investments can obtain a greater understanding and
perspective of their professional expertise."
"TEI's saga is noteworthy because of the company's resilience and
ingenuity in coping with the changing environment of the 1980s, its
execution of innovative corporate strategies that were widely
imitated and its extraordinary trading history," says the author.
TEI issued the first junk bond. In 1986 it achieved the largest
percentage gain on the NYSE, and in 1987 suffered the largest
percentage loss. It issued one of the first bonds secured by a
physical commodity and then later issued one of the first PIK
(payment in kind) bonds. It was one of the first vulture investors,
to be targeted by vulture investors later on. Its president was
involved in an insider trading scandal. It innovated strip
financing. It engaged in several workouts to sell off operations
and raise cash to reduce debt. It completed three exchange offers
that converted debt in to equity.
In 1977, TEI, primarily an oil production outfit, had had a
reprieve from bankruptcy through Michael Milken's first ever junk
bond. The fresh capital had allowed TEI to acquire a controlling
interest of Phoenix Resources Company, a part of King Resources
Company. TEI purchased creditors' claims against King that were
subsequently converted into stock under the terms of King's
reorganization plan. Only two years later, cash deficiencies forced
Phoenix to sell off its non-energy businesses. Vulture investors
tried to buy up outstanding TEI stock. TEI sold off its own
non-energy businesses, and focused on oil and gas exploration. An
enormous oil discovery in Egypt made the future look grand. The
value of TEI stock soared. Somehow, however, less than two years
later, TEI was in bankruptcy. What a ride!
All told, the book has 63 tables and 32 figures on all aspects of
TEI's rise, fall, and renaissance. Businesspeople will find
especially absorbing the details of how the company's bankruptcy
filing affected various stakeholders, the bankruptcy negotiation
process, and the alternative post-bankruptcy financial structures
that were considered. Those interested in the oil and gas industry
will find the book a primer on the subject, with an appendix
devoted to exploration and drilling, and another on oil and gas
accounting.
Dr. Harlan D. Platt is a professor of Finance at D'Amore-McKim
School of Business at Northeastern University. He is a member of
the Board of Directors of Millennium Chemicals Inc. and is on the
advisory board of the Millennium Liquidating Trust. He served as
the Associate Editor-Finance for the Journal of Business Research.
He received a Ph.D. from the University of Michigan, and holds a
B.A. degree from Northwestern University.
This book may be ordered by calling 888-563-4573 or by visiting
www.beardbooks.com or through your favorite Internet or local
bookseller.
*********
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
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
On Thursdays, the TCR delivers a list of recently filed
Chapter 11 cases involving less than $1,000,000 in assets and
liabilities delivered to nation's bankruptcy courts. The list
includes links to freely downloadable images of these small-dollar
petitions in Acrobat PDF format.
Each Friday's edition of the TCR includes a review about a book of
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
by Bankruptcy Creditors Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Philadelphia, Pa., USA.
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Rousel Elaine Tumanda, Joel Anthony G. Lopez, Psyche A. Castillon,
Ivy B. Magdadaro, Carlo Fernandez, Christopher G. Patalinghug, and
Peter A. Chapman, Editors.
Copyright 2024. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
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re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers. Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.
The TCR subscription rate is $975 for 6 months delivered via
e-mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance thereof
are $25 each. For subscription information, contact Peter A.
Chapman at 215-945-7000.
*** End of Transmission ***