/raid1/www/Hosts/bankrupt/TCR_Public/241113.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Wednesday, November 13, 2024, Vol. 28, No. 317
Headlines
10618 NE 11TH AVE: Case Summary & Two Unsecured Creditors
1819 WEEKS AVE. REALTY: Hits Bankruptcy Protection in New York
3208 GSD: Unsecureds Will Get 100% of Claims in Sale Plan
45 CHURCH STREET: Unsecureds to be Paid in Full in Plan
A.M. ARTEAGA DDS: Commences Subchapter V Bankruptcy Protection
AFINITI LTD: Seeks Chapter 15 Bankruptcy Protection
AGEAGLE AERIAL: Kevin Lowdermilk Appointed to Board of Directors
AGEAGLE AERIAL: Thomas Corley Holds 17.6% Equity Stake
ALLIANCE MESA: Updates Unsecured Claims Details
AMERICAN OPEN: Case Summary & 12 Unsecured Creditors
AMERICAN TIRE: Akin & Potter Anderson Represent Ad Hoc Group
AMERITRANS EXPRESS: Files Amendment to Disclosure Statement
APPLIED MINERALS: Case Summary & 20 Largest Unsecured Creditors
AS SPECIFIED: Gets Interim OK to Use Cash Collateral Until Nov. 20
BATTLE AXE CONSTRUCTION: Starts Subchapter V Bankruptcy Protection
BKDJ INVESTMENT: Updates Restructuring Plan Disclosures
BROOKFIELD PROPERTIES: Receivers Appointed for Providence Mall
BRUNER ENTERPRISES: Continued Operations to Fund Plan
CARROLLTON GATEWAY: Voluntary Chapter 11 Case Summary
CATHETER PRECISION: Jenkins Family Charitable Holds 9.92% Stake
CATHETER PRECISION: Waives Ownership Cap for Jenkins Family
CHAMPIONS ONCOLOGY: Registers 2-Mil. Shares for 2021 Equity Plan
DAAS GROUP: Voluntary Chapter 11 Case Summary
DIAMOND P LLC: Unsecureds Owed $241K Will Get 5% of Claims in Plan
DIGITAL GRAPHICS PLUS: Gets Interim OK to Use Cash Collateral
DIOCESE OF BUFFALO: Dan Chiacchia Represents Sexual Abuse Claimants
DIOCESE OF ROCKVILLE CENTRE:Gets Court Okay for Plan Disclosures
DOMTAR CORP: Fitch Assigns BB Rating on $60MM Secured Notes
DRF LOGISTICS: Unsecureds Will Get 3% to 10% in Liquidating Plan
ENVIVA INC: Baker Donelson Represents Creditors
FRANCHISE GROUP: Paul Hastings & Landis Advise First Lien Lenders
GOL LINHAS: Dechert Updates List of Abra Noteholders
HARRISON ENTERPRISES: Advised by SSG in Sale of Nursing Facilities
HOME MARKETING: Unsecureds to Get $5K per Month for 5 Years
IMERYS TALC: Fine-Tunes Plan Documents
IN PHAZE ELECTRIC: Gets OK to Use Cash Collateral Thru Nov 20
INNOVATE CORP: Registers 950K Shares for 2014 Omnibus Equity Plan
INNOVATIVE DESIGNS: CEO Riccelli Joseph Holds 50,000 shares
INTEGRITY GENERAL: Voluntary Chapter 11 Case Summary
JEBB FOOD: Neema Varghese Named Subchapter V Trustee
JOHN STREET: Case Summary & Eight Unsecured Creditors
JOP3 DEVELOPMENT: Voluntary Chapter 11 Case Summary
JORDAN HEALTH: Judge Agrees to Approve Chapter 11 Financing
KARBONX CORP: Inks Advertising and Promotional Deal With Oilers
MAJESTIC CHARTERS: Unsecureds Will Get 100% of Claims in Plan
MCCONNELL ROAD SOUTH: Seeks Bankruptcy Protection in North Carolina
METRO AIR: Unsecureds to Split $20K in Subchapter V Plan
MR. COOPER: Fitch Affirms 'BB' LongTerm IDR, Outlook Stable
MVL INVESTMENTS: Voluntary Chapter 11 Case Summary
NAYA STONE: Joseph Schwartz Named Subchapter V Trustee
NEUEHEALTH INC: Acquires Full Ownership of Centrum Health
NEWPORT VENTURES: Files for Chapter 11 Bankruptcy
ODYSSEY HEALTH: Delays Annual Report for FY Ended July 31
OMNIQ CORP: Secures $1.4-Mil. Contract Renewal With Logistics Giant
OYA RENEWABLES: Nov. 15 Deadline Set for Panel Questionnaires
PARLEMENT TECHNOLOGIES: Gets Court Okay for $6.3 Million Sale
PENNYMAC FINANCIAL: Fitch Hikes LongTerm IDR to BB, Outlook Stable
POLAR POWER: Expects Up to $5.2 Million in Fiscal Q3 Sales
PROVIDENT FUNDING: Fitch Affirms 'B' LongTerm IDR, Outlook Stable
RECOMBINETICS INC: Case Summary & 20 Largest Unsecured Creditors
RENOVARO INC: Registers Up to $200M in Securities Offering
ROVER PROPERTIES: Gets OK to Use Fulton Bank's Cash Collateral
SOLDIER OPERATING: Affiliate OK'd to Sell Pastoral Land for $1.8MM
STAR INTERMEDIATE: Fitch Alters Outlook on 'B+' IDR to Negative
SWAN PIZZA: Gets Interim OK to Use Cash Collateral Thru Nov. 14
TAKEOFF TECHNOLOGIES: Unsecureds Owed $37M to Get 1.58% in Plan
TGI FRIDAY'S: Searches for Buyer, Faces Bond Sale Challenges
THE SOURCE INC: Deep Roots Closes Acquisition of Assets
THOMAS ROOFING: Hits Chapter 11 Bankruptcy in Florida
THORNCO HOSPITALITY: Voluntary Chapter 11 Case Summary
TOMLINSON TRANSPORT: Amends Plan to Include CoreFirst Secured Claim
TONIX PHARMACEUTICALS: Shareholders Approve Stock Split Proposal
TOPICAL BIOMEDICS: Case Summary & 20 Largest Unsecured Creditors
TROTTA TIRES: Continued Operations to Fund Plan Payments
VERTEX ENERGY: Joint Plan Contemplates Two Scenarios
VILLAGE ON THE ISLE: Fitch Affirms BB+ Rating on 2024 Revenue Bonds
VROOM INC: To File Chapter 11 With $1.12 Billion in Debt
W.R. GRACE: Fitch Alters Outlook on 'B' LongTerm IDR to Negative
WAT TIMBER: Kicks Off Subchapter V Bankruptcy Process
WELLPATH HOLDINGS: Case Summary & 30 Largest Unsecured Creditors
WELLPATH HOLDINGS: In Chapter 11 for Quick Sale of RS Division
WILLIAM-WALTON: Unsecureds Owed $170K to Get Nothing in Plan
WIN PRODUCTIONS: Case Summary & 20 Largest Unsecured Creditors
WOODFIELD ROAD: Court OK's Sale of Damascus, Md. Property
XCELERATOR BOATWORKS: Creditors to Get Proceeds From Liquidation
*********
10618 NE 11TH AVE: Case Summary & Two Unsecured Creditors
---------------------------------------------------------
Debtor: 10618 NE 11th Ave LLC
650 NE 32nd Street
#3608
Miami, FL 33137
Business Description: 10618 NE 11th Ave LLC is a Single Asset Real
Estate debtor (as defined in 11 U.S.C.
Section 101(51B)).
Chapter 11 Petition Date: November 10, 2024
Court: United States Bankruptcy Court
Southern District of Florida
Case No.: 24-21789
Judge: Hon. Robert A Mark
Debtor's Counsel: Nicholas B. Bangos, Esq.
NICHOLAS B. BANGOS, PA
2560 RCA Blvd., Suite 114
Palm Beach Gardens, FL 33410
Tel: 561-781-0202
Email: nick@nbbpa.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Benjamin Milgram as manager.
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/SBCQEQY/10618_NE_11th_Ave_LLC__flsbke-24-21789__0001.0.pdf?mcid=tGE4TAMA
1819 WEEKS AVE. REALTY: Hits Bankruptcy Protection in New York
--------------------------------------------------------------
1819 Weeks Ave. Realty Corp. filed Chapter 11 protection in the
Southern District of New York. According to court filing, the
Debtor reports between $1 million and $10 million in debt owed to 1
and 49 creditors. The petition states funds will not be available
to unsecured creditors.
A meeting of creditors under 11 U.S.C. Section 341(a) is slated for
November 22, 2024 at 2:00 p.m. at Office of UST (TELECONFERENCE
ONLY).
About 1819 Weeks Ave. Realty Corp.
1819 Weeks Ave. Realty Corp. is a real estate company.
1819 Weeks Ave. Realty Corp. sought relief under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 24-11855) on October
28, 2024. In the petition filed by Nancy Haber, as president, the
Debtor estimated assets up to $50,000 and estimated liabilities
between $1 million and $10 million.
The Debtor is represented by:
Wayne M. Greenwald, Esq.
JACOBS P.C.
595 Madison Avenue FL 39
New York, NY 10022
Tel: 917-513-6246
Email: wayne@jacobspc.com
3208 GSD: Unsecureds Will Get 100% of Claims in Sale Plan
---------------------------------------------------------
3208 GSD, LLC filed with the U.S. Bankruptcy Court for the District
of Columbia a Disclosure Statement describing Plan of
Reorganization dated September 26, 2024.
The Debtor is a Limited Liability Company formed in the District of
Columbia for the purpose of owning and developing real property.
The real property owned by the debtor is the sole asset of the
debtor. The debtor operated as developer of the sole asset of the
estate. The property is a located in the exclusive area of
Hillcrest in Washington, D.C. and has its value ranges from
$650,000.00 to $700.000.00.
The Property is in good condition, very well maintained and the
debtor intends to market it for sale as a means to fund the Chapter
11 Plan of Reorganization. As a result of its location, the
Property has been able to hold its value, and the property value
will likely increase in the future.
The debtor has considered refinancing as an option for a successful
reorganization. The debtor will continue to make monthly payments
to the first Deed of Trust holder, American Life and Security
Corporation. The debtor has been approached by several lenders,
investors and developers about the possibility of placing the
property on the market for sale.
The original purchase price for the property was $543,732.00
pursuant to a Deed of Trust Note dated December 23, 2022. The
projected value of the property at the time of Bankruptcy filing
was $615,000.00. The market value of the real property at the time
filing this Disclosure Statement is $630,000.00. The debtor's
Projected Plan payments shall be made upon the sale of the debtor's
real property.
The Debtor's proposed Plan of Reorganization is designed to pay all
secured creditors 100 cents on the dollar while at the same time
stabilizing the Debtor's finances. The Debtor shall commit a fixed
amount of money to be shared among the unsecured Creditors, the
Debtor's Plan guarantees that all Creditors will be made whole.
The Internal Revenue Service is a Non-Priority Creditor, having a
claim in the amount of $500.00. This non-priority debt represents
the past due tax debt of the debtor. The debtor owes a priority
claim to the District of Columbia in the amount of $6.161.45.
Finally, the Secured Claim of American Life and Security
Corporation in the amount of $586,293.07 will receive cash payments
in full. The unsecured creditors are guaranteed to receive 100
cents on the dollar.
Class 2 consists of General Unsecured. The holders of Allowed Class
2 Claims shall be paid in full by the sale of the real property on
the effective date. The allowed Class 2 Claims are going to be paid
100%. The Reorganized Debtor shall have the right to prepay all or
any part of the amount due to Class 2 at any time. Pursuant to
sections 1124 and 1126(f) of the Bankruptcy Code, Class 2 is an
unimpaired class and conclusively presumed to have accepted the
Plan.
Class 3 consists of General Unsecured. The holders of Allowed Class
3 Claims shall be paid in full by the sale of the real property on
the effective date. The allowed Class 3 Claims are going to be paid
100%. The Reorganized Debtor shall have the right to prepay all or
any part of the amount due to Class 3 at any time. Pursuant to
sections 1124 and 1126(f) of the Bankruptcy Code, Class 3 is an
unimpaired class and conclusively presumed to have accepted the
Plan.
The Plan will be executed and implemented pursuant to a sale of the
debtor's real Property free and clear of all liens, claims,
encumbrances and other interests pursuant to section 363(f) of the
Bankruptcy Code and on an "as is, where is" basis, without
representations or warranties of any kind, nature or description.
The Confirmation Order will approve the retention of the Broker to
market and sell the Property in accordance with the terms of the
Plan and the Confirmation Order.
A full-text copy of the Disclosure Statement dated September 26,
2024 is available at https://urlcurt.com/u?l=1g7PeG from
PacerMonitor.com at no charge.
Counsel to the Debtor:
William C. Johnson, Jr., Esq.
The Johnson Law Group, LLC
6305 Ivy Lane, Suite 630
Greenbelt, MD 20770
Phone: (301) 477-3450
Phone: (202) 525-2958
Fax: (301) 477-4813
Email: William@JohnsonLG.Law
About 3208 GSD, LLC
3208 GSD, LLC r is a Limited Liability Company formed in the
District of Columbia for the purpose of owning and developing real
property.
The Debtor sought protection for relief under Chapter 11 of the
Bankruptcy Code (Bankr. D.C. Case No. 24-00191) on May 29, 2024,
listing $500,001 to $1 million in both assets and liabilities.
Judge Elizabeth L Gunn presides over the case.
William C. Johnson, Jr., Esq. at The Johnson Law Group, LLC
represents the Debtor as counsel.
45 CHURCH STREET: Unsecureds to be Paid in Full in Plan
-------------------------------------------------------
45 Church Street, LLC, filed with the U.S. Bankruptcy Court for the
District of Maine a Disclosure Statement with respect to Plan of
Reorganization dated September 26, 2024.
The Debtor is a Maine limited liability company that owns one
parcel of real property located at 45 Church Street, Gardiner,
Maine 04345 (the "Property"). The Property is a commercial office
building, currently fully leased to two tenants — the State of
Maine Bureau of General Services and Northeast Asset Management,
LLC ("NAM").
The Debtor owns the Property, which the Debtor believes to have the
fair market value of $1,200,000.00.
Under the Plan, the Debtor will continue to market the Property for
sale and will request the approval in the Chapter 11 Case to retain
a real estate broker to continue that effort. Until such sale is
effectuated, the Debtor will continue to lease the Property for a
period of time to service the restructured Stormfield Allowed
Secured Claim and other Allowed Claims, and then ultimately (a)
refinance the Allowed Secured Claims and pay all Allowed Unsecured
Claims in full; or (b) sell the Property to pay off all Allowed
Claims in full, depending on which course of action will generate
the most value for creditors and parties-in interest (including
based on changing interest rate and market conditions).
Under the Plan, the Allowed Secured Claims of Stormfield, Parker,
and Marquez will be restructured such that the amount of each
Allowed Secured Claim of Stormfield, Parker, and Marquez will be
repaid by monthly payments based on 30-year amortization schedule,
at an interest rate of 8.5% per annum starting on the Effective
Date, with a balloon payment of the remaining balance due at the
end of the 72nd month following the Effective Date (the "Maturity
Date").
The Debtor may prepay the restructured Allowed Secured Claims of
Stormfield, Parker, or Marquez in full or in part without penalty
at any time in its sole discretion or upon the sale or refinancing
of the Property. More specifically, and beginning on the Effective
Date, the Debtor will start making monthly payments to Stormfield,
Parker, and Marquez consisting of interest-only based on the amount
of each of the Allowed Secured Claims for a period of 180 days.
Thereafter the Debtor will make equal monthly payments of principal
and interest based on the amount of each of their Allowed Secured
Claims until the total outstanding amount of the Allowed Secured
Claims of Stormfield, Parker, and Marquez are paid in full on or
before the Maturity Date, provided that nothing herein shall
prevent the Debtor from paying off the Allowed Secured Claims of
Stormfield, Parker, and/or Marquez at an earlier day without
penalty at any time, or upon the sale or refinancing of the
Property.
The Debtor will repay the Allowed Secured Claim of the City of
Gardiner in five annual payments made to the City of Gardiner based
on a five-year amortization schedule bearing interest at a rate to
be calculated in accordance with § 511 of the Bankruptcy Code and
36 M.R.S.A. § 186. The first annual payment by the Debtor to the
City of Gardiner shall be on the first anniversary of the Effective
Date and each subsequent annual payment shall be made in the
following year by the 10th day of the month in which the first
annual payment was made, with the Allowed Secured Claim of the City
of Gardiner to be paid in full on the fifth anniversary of the
Effective Date.
The Debtor will pay all Allowed Non-Priority Unsecured Claims
against the Debtor, unless separately classified, in full and final
satisfaction on the later of (a) the Effective Date; or (b) the
date on which a particular Non-Priority Unsecured Claim becomes an
Allowed Non-Priority Unsecured Claim, either by agreement between
the Debtor and the holder of such claim or by Final Order of the
Bankruptcy Court.
Kevin J. Mattson, the sole member of the Debtor will retain all
Interests in the Debtor.
Under the Plan, the Debtor will pay and satisfy in full the Marquez
Allowed Secured Claim, and all Allowed Administrative and Priority
Claims, and all Allowed Unsecured Claims. This substantially
exceeds what holders of Allowed Unsecured Claims would receive in a
Chapter 7 proceeding. Clearly, reorganization of the Debtor and
payment of the claims of creditors pursuant to the Plan would be
far superior to liquidation in Chapter 7.
Class Five shall consist of all Allowed Non-Priority Unsecured
Claims. All Allowed Claims in Class Five shall be paid in full on
the later of (a) the Effective Date; or (b) the date a particular
Class Five Claim becomes an Allowed Claim, either by agreement
between the Debtor and the holder of the Class Five Claim or by
Final Order of the Bankruptcy Court. The Holders of Allowed Claims
in Class Five are not entitled to vote on the Plan and are deemed
to accept the Plan pursuant to Section 1126(f) of the Bankruptcy
Code.
The Holder of Interests in Class Six shall retain his Interests
under the Plan after the Effective Date. The Holder of Allowed
Claims in Class Six is not entitled to vote on the Plan and is
deemed to accept the Plan pursuant to Section 1126(f) of the
Bankruptcy Code.
The Debtor shall implement the Plan, and shall make Plan
Distributions and other payments as set forth therein from the
following sources:
* Cash on hand;
* Income generated by the Debtor's business operations, namely
rental income;
* Recoveries from any Chapter 5 causes of action;
* Proceeds from the sale of the Property; and
* Equity contributions made by Mattson in amounts to be
determined by Mattson and as needed to allow the Debtor to meet its
payment obligations under the Plan.
A full-text copy of the Plan of Reorganization dated September 26,
2024 is available at https://urlcurt.com/u?l=3E7TK1 from
PacerMonitor.com at no charge.
The Debtor's Counsel:
Fred W. Bopp, III, Esq.
BOPP & GUECIA
121 Main Street
Yarmouth ME 04096
Tel: 207-846-6111
Email: fbopp@boppguecia.com
About 45 Church Street
45 Church Street, LLC is a Single Asset Real Estate debtor (as
defined in 11 U.S.C. Section 101(51B)).
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Maine Case No. 24-10134) on June 28,
2024, with $1 million to $10 million in assets and liabilities.
Kevin Mattson, sole member, signed the petition.
Fred W. Bopp, III, Esq. at BOPP & GUECIA represents the Debtor as
legal counsel.
A.M. ARTEAGA DDS: Commences Subchapter V Bankruptcy Protection
--------------------------------------------------------------
A.M. Arteaga DDS Inc. filed Chapter 11 protection in the Central
District of California. According to court documents, the Debtor
reports between $1 million and $10 million in debt owed to 1 and 49
creditors.
About A.M. Arteaga DDS Inc.
A.M. Arteaga DDS Inc. is primarily engaged in the private or group
practice of general or specialized dentistry or dental surgery.
A.M. Arteaga DDS Inc. sought relief under Subchapter V of Chapter
11 of the U.S. Bankruptcy Code (Bankr. C.D. Cal. Case No. 24-16442)
on October 28, 2024. In the petition filed by Anamaria Arteaga, as
chief executive officer, the Debtor reports estimated assets
between $50,000 and $100,000 and estimated liabilities between $1
million and $10 million.
The Honorable Bankruptcy Judge Scott H. Yun handles the case.
The Debtor is represented by:
Lewis Landau, Esq.
LEWIS R. LANDAU, ATTORNEY AT LAW
22287 Mulholland Hwy. 318
Calabasas CA 91302
Tel: (888) 822-4340
Email: lew@landaunet.com
AFINITI LTD: Seeks Chapter 15 Bankruptcy Protection
---------------------------------------------------
Janine Phakdeetham of Bloomberg News reports that Afiniti Ltd. has
sought Chapter 15 bankruptcy protection in Delaware, according to a
court document.
The company is also involved in a provisional liquidation process
in Bermuda.
Chapter 15 allows Afiniti to safeguard its U.S. assets while
restructuring efforts proceed abroad.
In September 2024, TRG Pakistan announced that Afiniti and its
lenders had come to an agreement on a restructuring plan.
About Afiniti Ltd.
Afiniti Ltd. provides management consultancy services.
Afiniti Ltd. sought relief under Chapter 15 of the U.S. Bankruptcy
Code (Bankr. D. Del. Case No. 1:24-bk-12539) on Nov. 3, 2024, to
seek U.S. recognition of the liquidation proceedings in Bermuda.
The Debtor's U.S. counsel:
Kara Hammond Coyle
Young Conaway Stargatt & Taylor LLP
302-571-6600
kcoyle@ycst.com
AGEAGLE AERIAL: Kevin Lowdermilk Appointed to Board of Directors
----------------------------------------------------------------
AgEagle Aerial Systems Inc. announced the appointment of Kevin
Lowdermilk to the Company's board of directors effective October
25, 2024.
Company CEO, Bill Irby, commented, "It is a privilege to have Kevin
join our board. His distinguished career and leadership in some of
the most challenging technology sectors speak to his ability to
drive success through vision, strategy and execution. We are
grateful to work alongside him and leverage his expertise to
support the future expansion of our global footprint in both
government and commercial verticals, as we position the Company for
long-term shareholder value."
Kevin Lowdermilk has over 30 years of executive leadership
experience and currently serves as both the CEO and CFO of Vaya
Space. Prior to Vaya Space, he was the CEO of ISO Group, Inc. -- a
defense and aerospace supply chain company, he has also served as
the CFO and then CEO of Exostar -- a supply chain / cyber security
company with a focus on the aerospace and defense sector, and he
served as the Vice President of Finance for a multi-national
aerospace division of Rolls-Royce Holdings PLC. He has also held
board positions for a number of companies across a variety of
industries, including Global Healthcare Exchange where he chaired
the board's compensation committee through its sale of GHX to Thoma
Bravo and publicly traded company, Digital Health Acquisition
Corporation. He currently serves as an independent board member and
Audit Committee Chair for publicly traded VSee Health, Inc. He
earned his undergraduate degree in Economics from Western Kentucky
University and his MBA from Ball State University.
Mr. Lowdermilk will receive compensation for his Board and
committee service in accordance with the Company's outside director
compensation program as previously described in the Company's
filings with the Securities and Exchange Commission, including an
annual cash retainer of $60,000, prorated for any partial years of
service.
About AgEagle
AgEagle Aerial Systems Inc. is headquartered in Wichita, Kansas,
and operates through its wholly-owned subsidiaries, focusing on
designing and delivering top-tier drones, sensors, and software to
address critical customer needs. Founded in 2010, AgEagle initially
pioneered proprietary, professional-grade, fixed-wing drones and
aerial imagery-based data collection and analytics solutions for
the agriculture sector. Today, the company is recognized as a
globally respected market leader, offering customer-centric,
advanced, autonomous unmanned aerial systems (UAS) that generate
revenue at the intersection of flight hardware, sensors, and
software across industries, including agriculture,
military/defense, public safety, surveying/mapping, and
utilities/engineering. AgEagle has achieved numerous regulatory
milestones, including government approvals for its commercial and
tactical drones to fly Beyond Visual Line of Sight (BVLOS) and/or
Operations Over People (OOP) in the United States, Canada, Brazil,
and the European Union. It has also received Blue UAS certification
from the Defense Innovation Unit of the U.S. Department of Defense.
More information can be found at www.ageagle.com.
Orlando, Florida-based WithumSmith+Brown, PC, the company's auditor
since 2020, issued a "going concern" qualification in its report
dated April 1, 2024, citing recurring losses from operations, cash
usage exceeding its current cash position, and an accumulated
deficit as factors raising substantial doubt about the company's
ability to continue as a going concern.
During the year ended December 31, 2023, the company incurred a net
loss of approximately $42.4 million. As of June 30, 2024, AgEagle
had $22,830,836 in total assets, $14,756,362 in total liabilities,
and $8,074,474 in total stockholders' equity.
AGEAGLE AERIAL: Thomas Corley Holds 17.6% Equity Stake
------------------------------------------------------
Thomas John Corley disclosed in a Schedule 13G Report filed with
the U.S. Securities and Exchange Commission that as of October 25,
2024, he beneficially owned 150,000 shares of AgEagle Aerial
Systems Inc.'s common stock, representing 17.6% of the
approximately 850,409 outstanding shares reported on October 15.
A full-text copy of Mr. Corley's SEC Report is available at:
https://tinyurl.com/tjpahfsn
About AgEagle
AgEagle Aerial Systems Inc. is headquartered in Wichita, Kansas,
and operates through its wholly-owned subsidiaries, focusing on
designing and delivering top-tier drones, sensors, and software to
address critical customer needs. Founded in 2010, AgEagle initially
pioneered proprietary, professional-grade, fixed-wing drones and
aerial imagery-based data collection and analytics solutions for
the agriculture sector. Today, the company is recognized as a
globally respected market leader, offering customer-centric,
advanced, autonomous unmanned aerial systems (UAS) that generate
revenue at the intersection of flight hardware, sensors, and
software across industries, including agriculture,
military/defense, public safety, surveying/mapping, and
utilities/engineering. AgEagle has achieved numerous regulatory
milestones, including government approvals for its commercial and
tactical drones to fly Beyond Visual Line of Sight (BVLOS) and/or
Operations Over People (OOP) in the United States, Canada, Brazil,
and the European Union. It has also received Blue UAS certification
from the Defense Innovation Unit of the U.S. Department of Defense.
More information can be found at www.ageagle.com.
Orlando, Florida-based WithumSmith+Brown, PC, the company's auditor
since 2020, issued a "going concern" qualification in its report
dated April 1, 2024, citing recurring losses from operations, cash
usage exceeding its current cash position, and an accumulated
deficit as factors raising substantial doubt about the company's
ability to continue as a going concern.
During the year ended December 31, 2023, the company incurred a net
loss of approximately $42.4 million. As of June 30, 2024, AgEagle
had $22,830,836 in total assets, $14,756,362 in total liabilities,
and $8,074,474 in total stockholders' equity.
ALLIANCE MESA: Updates Unsecured Claims Details
-----------------------------------------------
Alliance Mesa Cardio, LLC submitted a First Amended Disclosure
Statement for Plan of Reorganization dated September 27, 2024.
The Debtor will make payments due to the Class 1 and Class 2
Creditors under the Plan from the Reserve Account until the Real
Property is leased, refinanced or sold. The post-Confirmation
management of the Debtor shall continue to be performed by
Highpoint Property Management LLC.
The Debtor has only one secured creditor, BOK Financial, the Class
1 Creditor. As of the Petition Date, BOK Financial held a claim
equal to $2,749,901.21. BOK Financial holds a valid, property
perfected first priority mortgage on the Real Property to secure
its secured Claim. BOK Financial does not hold a lien on the Non
Reserve Accounts.
In addition, as of the Petition Date, the Debtor had the following
general unsecured Creditors:
Baywood Professional Plaza I Association $19,593.00
City of Mesa, AZ $1,065.00
Highpoint Property Management LLC $109.00
Kreshmore Group, LLC $2,893.75
SRP $1,804.71
Warandy & Davis LLP $4,000.00
Timm & Garfinkel, LLC $105.00
The Plan provides that all Allowed Secured and General Unsecured
Claims will be paid in full with interest, with the remaining
ongoing concern value available for distribution to Equity Interest
Holders. The Debtor believes that all creditors will be paid in
full under a hypothetical Chapter 7 liquidation but that the
ultimate distributions to Class 4 Equity Interests will be much
higher under the Plan than they would be in a hypothetical Chapter
7 liquidation.
Under this Plan the Reorganized Debtor will simultaneously market
the Property for sale or lease during the term of the Plan. The
Debtor will also seek to refinance the BOK Financial Loan, and will
use the proceeds of such sale or refinancing to pay all Allowed
Claims, Allowed Administrative Expenses, and Allowed Fee Claims in
full in Cash. Until the sale or refinancing occurs the Debtor will
make the payments described, to be funded from the Reserve
Account.
Class 2 consists of the Allowed General Unsecured Claims other than
Insider Claims. All Class 2 Claimants shall be paid in six equal
monthly installments commencing on the first Business Day after the
Effective Date and continuing on the first Business Day of each
calendar month thereafter, except that all unpaid amounts due to
Class 2 Claimants shall be accelerated and paid in cash
simultaneously with the closing of the sale of the Real Property or
the refinancing of the BOK Financial Loan. Class 2 is Impaired, and
is entitled to vote on the Plan. The unpaid principal balance of
the Class 2 Claims shall bear interest at the Federal Judgment
Interest Rate from the Petition Date through the date of final
payment.
Under this Plan the Reorganized Debtor will simultaneously market
the Property for sale or lease during the term of the Plan. The
Debtor will also seek to refinance the BOK Financial Loan, and will
use the proceeds of such sale or refinancing to pay all Allowed
Claims, Allowed Administrative Expenses, and Allowed Fee Claims in
full in Cash. Until the sale or refinancing occurs the Debtor will
make the payments described, to be funded from the Reserve
Account.
A full-text copy of the First Amended Disclosure Statement dated
September 27, 2024 is available at https://urlcurt.com/u?l=pTbo3L
from PacerMonitor.com at no charge.
Counsel to the Debtor:
David A. Warfield, Esq.
Thompson Coburn LLP
One U.S. Bank Plaza, Suite 2700
St. Louis, MO 63101
Telephone: (314) 552-6079
Facsimile: (314) 552-7000
Email: dwarfield@thompsoncoburn.com
bhockett@thompsoncoburn.com
About Alliance Mesa Cardio
Alliance Mesa Cardio, LLC is a single asset real estate debtor (as
defined in 11 U.S.C. Section 101(51B)).
Alliance Mesa Cardio sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Ill. Case No. 24-08848) on June 15,
2024, with $1 million to $10 million in both assets and
liabilities. Ben Reinberg, sole member of Alliance Mesa Cardio
Manager, LLC, signed the petition.
Judge Janet S. Baer oversees the case.
The Debtor is represented by David A. Warfield, Esq., at Thompson
Coburn, LLP.
AMERICAN OPEN: Case Summary & 12 Unsecured Creditors
----------------------------------------------------
Debtor: American Open Space Remedies LLC
18022 Cowan
Suite 103
Irvine, CA 92614
Business Description: The Debtor is engaged in activities related
to real estate.
Chapter 11 Petition Date: November 8, 2024
Court: United States Bankruptcy Court
Central District of California
Case No.: 24-12885
Judge: Hon. Scott C Clarkson
Debtor's Counsel: Robert P. Goe, Esq.
GOE FORSYTHE & HODGES LLP
17701 Cowan
Lobby D, Suite 210
Irvine, CA 92614
Tel: (949) 798-2460
Fax: (949) 955-9437
Email: rgoe@goeforlaw.com
Estimated Assets: $100 million to $500 million
Estimated Liabilities: $10 million to $50 million
The petition was signed by Beaumont 1600, LLC, manager, by Scott
Krentel, manager of Beaumont 1600, LLC.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/SPDL5KI/American_Open_Space_Remedies_LLC__cacbke-24-12885__0001.0.pdf?mcid=tGE4TAMA
List of Debtor's 12 Unsecured Creditors:
Entity Nature of Claim Claim Amount
1. Engineered Equities, LLC Site Investments $5,000,000
c/o BFLC
18022 Cowan
Suite 103
Irvine, CA 92614
2. Portero Commercial, LLC Site Investments $4,000,000
18022 Cowan
Suite 103
Irvine, CA 92614
3. Beaumont 1600 LLC $2,500,000
P.O. Box 55317
Riverside, CA 92517
4. SRD Design Studio, Inc. Engineering $1,000,000
P.O. Box 5147 & Consulting
Beverly Hills, CA Services
90209
Tel: (424) 279-0909
5. Beach Freeman Lim Accounting/ $250,000
& Cleland LLP Management
c/o Doug Beach Services
18022 Cowan
Suite 103
Irvine, CA 92614
Doug Beach
Email: dbeach@bflc.com
Phone: (310) 447-1234
6. Jeff Broker Attorneys Fees $105,000
Broker & Associates and Consulting
13681 Newport Avenue
Suite 8312
Tustin, CA
92780-7815
Jeff Broker
Email: jbroker@brokerlaw.biz
Phone: (949) 222-2000
7. James Wolf Attorney Fees $75,000
1320 Van Beurden and Consulting
Drive Services
Los Osos, CA 93412
James Wolf
Email: jwolf805@outlook.com
Phone: (805) 704-2404
8. The Bailey Group Attorney/ $65,000
25014 Las Bridas South Legal Fees
Suite A & B
Murrieta, CA 92562
John Bailey
Email: jbailey@jblglaw.com
9. Advanced Site Engineering $18,800
Consulting LLC
10501 Wilshire Blvd
Unit 1509
Los Angeles, CA
90024
10. Earth Retentions, LLC Final $18,800
231 Rope Mill Parkway Engineering
Woodstock, GA
30188
Tel: (678) 903-3614
11. Advantage Circulation Engineering $18,800
Consulting LLC
10501 Wilshire Blvd
Unit 1509
Los Angeles, CA
90024
12. David Golkar Engineering & $0
10501 Wilshire Blvd Consulting
Unit 211
Los Angeles, CA
90024
Email: golkardavid@gmail.com
AMERICAN TIRE: Akin & Potter Anderson Represent Ad Hoc Group
------------------------------------------------------------
In the Chapter 11 cases of American Tire Distributors, Inc. and its
affiliates, the Ad Hoc Group filed a verified statement pursuant to
Rule 2019 of the Federal Rules of Bankruptcy Procedure.
The Ad Hoc Group is comprised of certain unaffiliated beneficial
holders and/or investment advisors or managers of beneficial
holders of the Debtors' funded debt obligations.
The Ad Hoc Group engaged Akin Gump Strauss Hauer & Feld LLP on
August 1, 2024 and Potter Anderson & Corroon LLP on October 16,
2024 to represent it in connection with a potential restructuring
transaction.
Akin and Potter Anderson do not represent the Ad Hoc Group as a
"committee" (as such term is used under the Bankruptcy Code and the
Bankruptcy Rules) and do not undertake to represent the interests
of, and are not fiduciaries for, any creditor, party in interest or
other entity other than the Ad Hoc Group. In addition, the Ad Hoc
Group does not represent or purport to represent any other entities
in connection with these chapter 11 cases.
The names, addresses, and disclosable economic interests of all the
members of the Ad Hoc Group are as follows:
1. Guggenheim Partners, LLC
330 Madison Avenue 10th Floor
New York, NY 10017
* Principal Amount of Term Loans ($187,310,251.58)
* 2024 Delayed Draw FILO Loans ($21,343,117.00)
2. KKR Credit Advisors (US) LLC
555 California Street 50th Floor
San Francisco, CA 94104
* Principal Amount of Term Loans ($118,118,726.81)
* 2024 Delayed Draw FILO Loans ($13,459,070.00)
3. Monarch Alternative Capital LP
535 Madison Avenue
New York, NY 10022
* Principal Amount of Term Loans ($215,553,757.81)
* 2024 Delayed Draw FILO Loans ($23,520,507.00)
4. Sculptor Capital Management LP
9 West 57th Street 40th Floor
New York, NY 10019
* Principal Amount of Term Loans ($146,362,423.00)
* 2024 Delayed Draw FILO Loans ($16,677,306.00)
5. Silver Point Capital, L.P.
2 Greenwich Plaza, Suite 1
Greenwich, CT 06830
* Principal Amount of Term Loans ($196,897,846.00)
Counsel for the Ad Hoc Group:
M. Blake Cleary, Esq.
L. Katherine Good, Esq.
Gregory J. Flasser, Esq.
Sameen Rizvi, Esq.
POTTER ANDERSON & CORROON LLP
1313 N. Market Street, 6th Floor
Wilmington, DE 19801
Telephone: (302) 984-6000
Facsimile: (302) 658-1192
Email: bcleary@potteranderson.com
kgood@potteranderson.com
gflasser@potteranderson.com
srizvi@potteranderson.com
- and –
Philip C. Dublin, Esq.
Naomi Moss, Esq.
AKIN GUMP STRAUSS HAUER & FELD LLP
One Bryant Park
Bank of America Tower
New York, NY 10036
Telephone: (212) 872-1000
Facsimile: (212) 872-1002
Email: pdublin@akingump.com nmoss@akingump.com
About American Tire Distributors
Headquartered in Huntersville, N.C., American Tire Distributors
Inc. and its affiliates are the largest distributor of replacement
tires in North America based on dollar amount of wholesale sales.
With their network of over 115 distribution centers and 1,500
delivery vehicles, the Debtors service a geographic region covering
more than 90 percent of the replacement tire market for passenger
vehicles and light trucks in the United States. The Debtors carry
many of the nation's leading tire brands including Michelin,
Pirelli, and Continental. In addition, the Debtors' proprietary
Hercules brand is a leading private tire brand in North America.
American Tire Distributors and its affiliates sought relief under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case
No. 24-12391) on October 22, 2024. In its petition, American Tire
Distributors reported $1 billion to $10 billion in both assets and
liabilities.
Judge Craig T. Goldblatt oversees the cases.
The Debtors tapped Kirkland & Ellis as bankruptcy counsel;
Pachulski Stang Ziehl & Jones, LLP as Delaware counsel; AP
Services, LLC as restructuring advisor; and Moelis & Company, LLC
as financial advisor. Donlin, Recano & Company, Inc. is the notice
and claims agent and administrative advisor.
AMERITRANS EXPRESS: Files Amendment to Disclosure Statement
-----------------------------------------------------------
Ameritrans Express, LLC submitted an Amended Disclosure Statement
describing Plan of Reorganization dated September 24, 2024.
In its schedules, Ameritrans listed total secured claims of
$3,329,094.46, priority unsecured claims in the amount of
$2,187,189.60 and nonpriority unsecured claims in the amount of
$3,155,963.96.
During the course of the bankruptcy case, Ameritrans has generated
monthly revenue of approximately $5,000.00 per month and has
monthly expenses of approximately the same amount, including the
payment of salaries for two employees, one of whom is the owner of
the Debtor, Frederick Amankwaa, whose salary is discretionary, as
well as legal fees for the litigation of the USPS claim.
The Debtor filed its Chapter 11 case to restructure its debt after
it defaulted on its Stipulation and Settlement Agreement with the
Department of Labor which required Ameritrans to pay a total of
$3,489,588.61 in back wages and liquidated damages plus interest to
WHD to resolve its liability under the FLSA and SCA for violations
occurring between April 1, 2019 and March 31, 2021.
As a result of the default, the Department of Labor seized funds
owed to Ameritrans pursuant to its government contracts with the
USPS. Ameritrans no longer had any revenues coming into the company
for its USPS contracts thus it could not pay its employees. In
order to preserve the value of its estate and to reorganize, Debtor
filed a petition under Chapter 11 of the Bankruptcy Code.
Like in the prior iteration of the Plan, all Class 4 non-priority
unsecured claims shall be paid in full upon receipt of proceeds
from the USPS claim. Class 4 claims shall be paid in full on or
before July 1, 2026.
Class 5 of the Plan consists of the 100% equity interest of
Frederick Amankwaa in the Debtor. Mr. Amankwaa shall retain his
100% equity interest in the Debtor.
The Debtor proposes to fund its Plan of Reorganization by
contributing the proceeds from its claims against the USPS into the
Plan. It is projected that this amount will be sufficient to make
the proposed payments contained in his Plan of Reorganization.
The Debtor's Plan depends upon the success of its claim against the
USPS in its pending litigation before the United States Postal
Service Board of Contract Appeals.
Pending litigation includes the USPS claim before the United States
Postal Service Board of Contract Appeals. In addition, Debtor's
claim against Paychex is currently in arbitration. Further, the
Plan contemplates that the Plan Administrator may commence any
causes of action as necessary to liquidate any assets of the
Debtor.
A full-text copy of the Amended Disclosure Statement dated
September 24, 2024 is available at https://urlcurt.com/u?l=PLgThL
from PacerMonitor.com at no charge.
Ameritrans Express LLC is represented by:
VIVONA PANDURANGI, PLC
Jonathan B. Vivona, Esq.
601 King Street, Suite 400
Alexandria, VA 22314
Tel: (703) 739-1353
Email: jvivona@vpbklaw.com
About Ameritrans Express
Ameritrans Express LLC is part of the general freight trucking
industry.
Ameritrans Express LLC sought relief under Chapter 11 of the
Bankruptcy Code (Bankr. E.D. Va. Case No. 23-11055) on June 29,
2023. In the petition filed by Frederick Amankwaa, as owner, the
Debtor estimated assets between $10 million and $50 million and
liabilities between $1 million and $10 million.
Judge Brian F. Kenney oversees the case.
The Debtor is represented by Jonathan B. Vivona, Esq. at VIVONA
PANDURANGI, PLC.
APPLIED MINERALS: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Applied Minerals, Inc.
1200 Silver City Road
PO Box 432
Eureka, UT 84628
Business Description: The Debtor is minerals exploration and
mining company.
Chapter 11 Petition Date: November 11, 2024
Court: United States Bankruptcy Court
District of Utah
Case No.: 24-25849
Judge: Hon. Joel T Marker
Debtor's Counsel: Matthew M. Boley, Esq.
COHNE KINGHORN, P.C.
111 E. Broadway, 11th Floor
Salt Lake City, UT 84111
Tel: 801-363-4300
E-mail: mboley@cohnekinghorn.com
Total Assets as of November 11, 2024: $1,202,384
Total Debts as of November 11, 2024: $64,306,931
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $50 million to $100 million
The petition was signed by Christopher T. Carney as president and
chief executive officer.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/AD3VTHA/Applied_Minerals_Inc__utbke-24-25849__0001.0.pdf?mcid=tGE4TAMA
List of Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
1. Samlyn Offshore Series A PIK Note $12,783,134
Master Fund, Ltd.
500 Park Avenue
New York, NY 10022
Email: mbarry@samlyncapital.com
Phone: 212-848-0500
2. M. Kingdon Series A PIK Note/ $11,377,274
Offshore Master Series 2023 PIK
Fund, LP Note
152 W 57th Street,
50th Floor
New York, NY 10019
Email: rweinstein@kingdon.com
Phone: 212-333-0123
3. Berylson Master Fund, LP Series 2023 PIK $8,782,186
200 Clarendon Note
Street, 50th Floor
Boston, MA 02116
Email: nnesta@berylson.com
Phone: 617-443-4440
4. Private Wealth Series 2023 PIK $8,657,186
Management Global Note
15 Avenue JF
Kennedy 1855
Luxembourg B.P. 687
2016 Luxembourg
Email: cbolleter@fidares.net
Phone: 352 46 71 71-1
5. Samlyn Onshore Fund, LP Series A PIK Note $6,854,170
500 Park Avenue
New York, NY 10022
Email: mbarry@samlyncapital.com
Phone: 212-848-0500
6. Selz Family 2011 Trust Series A PIK Note $2,439,536
One Rockefeller
Plaza 7th Floor
New York, NY 10020
Email: sjerro@ingalls.net
Phone: 800-221-2591
7. Koyote Trading, LP Series A PIK Note $1,492,114
800 Third Avenue,
10th Floor
New York, NY 10022
Email: lrosen@koyotecapital.com
Phone: 212-300-2222
8. Kingswood Partners Series A PIK Note $1,492,114
c/o Jason Karp
98 San Jacinto Blvd
Austin, TX 78701
Email: jason@karpholdings
Phone: 512-535-0400
9. Joseph D. Mark Series A PIK Note $1,119,084
166 Norma Road
Teaneck, NJ 07666
Email: josephdmark@gmail.com
Phone: 201-836-6486
10. Dune Road LLC Series A PIK Note $1,119,084
166 Norma Road
Teaneck, NJ 07666
Email: josephdmark@gmail.com
Phone: 201-836-6486
11. Durasonic Ltd. Deferred $900,000
578-13 Revenue
Cheongbukjungang- Liability
ro Cheongbuk-eup
Pyeongtaek-si,
Gyeonggi-do
South Korea
Email: hmlee@durasonic.com
Phone: 82-31-684-5489
12. Sharad Mathur Accrued Wages $225,330
937 Cove Point Lane
Tega Cay, SC 29708
Email: sharad786mathur@gmail.com
13. Kibbechem Inc. Trade Debt $119,269
22243 Innovation Drive
Elkhart, IN 46514
Email: srice@kibbechem.com
Phone: 574-266-1234
14. RD Venture Partners 2, LLC Professional $80,000
863 Remsens Lane Services
Oyster Bay, NY
11771
Email: mike@rdventurepartners.com
Phone: 516-695-0422
15. Brian Newsome Services $54,571
4600 Messina Drive
Lake Mary, FL 32746
Email: briant.newsome@gmail.com
Phone: 407-790-1159
16. Wasatch Solutions LLC Services $54,000
PO Box 284 Provided
Salt Lake City, UT
84110
Email: mriley@wasatchsols.com
Phone: 801-550-5170
17. Juab County Treasurer Property Taxes $47,772
160 North Main Street
Nephi, UT 84648
Email: melaniec@juabcounty.gov
Phone: 435-623-3420
18. American Express Credit Card $40,852
PO Box 60189
City of Industry, CA
91716-0189
Tel: 800-492-8468
19. William Gleeson Accrued Wages $39,667
4710 Bethesda
Avenue #1405
Bethesda, MD 20814
Email: gleeson.w@gmail.com
20. Michael Gleeson Professional $20,000
787 Azalea Drive Services
Rockville, MD 20850
Email: mmgleeson@gmail.com
AS SPECIFIED: Gets Interim OK to Use Cash Collateral Until Nov. 20
------------------------------------------------------------------
As Specified, Inc. received interim approval from the U.S.
Bankruptcy Court for the Middle District of Florida, Orlando
Division to use cash collateral until Nov. 20.
The interim order authorized As Specified to use the cash
collateral of its secured creditors to pay expenses, including
payments to the Subchapter V trustee, payroll and other necessary
expenses set forth in its projected budget, plus an amount not to
exceed 10% for each line item.
Secured creditors, including the U.S. Small Business Administration
and City National Bank of Florida, will be granted replacement
liens on cash collateral to the same extent and with the same
validity and priority as their pre-bankruptcy liens.
The next hearing is scheduled for Nov. 20.
About As Specified
As Specified, Inc., doing business as Indon International,
specializes in the manufacturing of custom case goods and seating
for 3 to 5-star hospitality projects worldwide.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. M.D. Fla. Case No. 24-04465) on August 23,
2024, with up to $50,000 in assets and up to $10 million in
liabilities. Rick J. Gursky, sole shareholder, signed the
petition.
Judge Tiffany P. Geyer presides over the case.
Daniel A. Velasquez, Esq., at Latham Luna Eden & Beaudine, LLP
represents the Debtor as legal counsel.
BATTLE AXE CONSTRUCTION: Starts Subchapter V Bankruptcy Protection
------------------------------------------------------------------
Battle Axe Construction LLC filed Chapter 11 protection in the
Southern District of Ohio. According to court filing, the Debtor
reports $2,357,478 in debt owed to 1 and 49 creditors. The petition
states that funds will be available to unsecured creditors.
About Battle Axe Construction
Battle Axe Construction LLC sought relief under Subchapter V of
Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Ohio Case No.
24-12499) on October 28, 2024. In the petition filed by Joseph D.
Jackson, as member, the Debtor reports total assets of $1,686,405
and total liabilities of $2,357,478.
Bankruptcy Judge Beth A. Buchanan handles the case.
The Debtor is represented by:
Eric W. Goering, Esq.
GOERING & GOERING
220 West Third Street
Cincinnati, OH 45202
Tel: (513) 621-0912
Email: eric@goering-law.com
BKDJ INVESTMENT: Updates Restructuring Plan Disclosures
-------------------------------------------------------
BKDJ Investment LLC submitted a First Amended Plan of
Reorganization dated September 26, 2024.
Non-priority unsecured creditors holding allowed claims will
receive distributions of 100% of the allowed claim amount.
Class 1 consists of the Secured Claim of Toorak. Toorak has a
secured interest in two residential rental units owned by the
Debtor located at 2508, 2510,2512 and 2512A S. Prieur in New
Orleans, Louisiana (the "Prieur Properties"). Toorak filed Proof of
Claim No. 1 representing a secured claim of $623,431.74. The Debtor
believes that the amount of this claim is excessive and will file
an Objection to Claim No. 1 within 10 days of the Plan Effective
Date. Until such time as Toorak's Plan payments begin, it will
continue to receive the monthly adequate protection payments
previously approved by the bankruptcy court until such time as a
final order is entered by the Court to establish the amount of
Toorak's claim.
The Debtor estimates the actual amount of the claim to be
$550,000.00. The secured claim as determine by the court shall be
paid in 60 monthly payments, at 7.0% interest, with a 30-year
amortization and a balloon due on month 61. However, it is the
Debtor's intent to sell the property as soon as possible and pay
off the balance due as quickly as possible thereafter. If the
Debtor defaults in its monthly payments for a period of more than
20 days, Toorak shall give written notice of the default to the
Debtor and Debtor's counsel. The Debtor shall have 10 days from
receipt of the Notice of Default, to cure the default. If the
Debtor fails to cure the default within 10 days of receiving the
notice of default, Toorak may file a notice of default with the
Bankruptcy Court and move for Ex Parte Relief from Stay.
Class 2 consists of the Secured Claim of Reigo. Reigo's claim is
secured by residential rental property located at 3226-3228 Jackson
Street in New Orleans, Louisiana (the "Jackson Street Property").
Debtor valued the Jackson Street Property on its Schedules at
$399,000.00. Reigo filed Proof of Claim No. 2 representing a
secured claim of $315,000.00. Class 2 will retain its lien under
Section 1129(b)(2)(A) of the Bankruptcy Code. The Debtor shall sell
the Jackson Street Property within the next 12 months with the sale
proceeds used to satisfy Reigo's outstanding claim in full.
As Reigo's claim is oversecured, it is not entitled to adequate
protection payments during the 12-month sale period. If the Debtor
fails to sell the Jackson Street Property within 12 months
following the Plan Effective Date, the Debtor shall surrender the
Jackson Street Property to Reigo. If the Debtor defaults in
surrendering the Property to Reigo, Reigo may file a notice of
default with the Bankruptcy Court and move for Ex Parte Relief from
Stay.
Class 3 consists of Unsecured Claimants. No unsecured claims have
filed proofs of claim herein. The Debtor listed one undisputed,
liquidated unsecured claimant in the amount of $11,605.00 (Spray
Foam Jefe LLC). This Creditor shall be paid quarterly payments of
$500.00 over 36 months with the remainder of the claim satisfied in
full upon the sale of the Jackson Street Property. If the Debtor is
unable to sell the Jackson Street Property, the full outstanding
balance of the Claim shall be paid upon surrender of the Jackson
Street Property to Class 2.
If the Debtor defaults in payment to Class 3 for a period of more
than 20 days, the Claimant shall give written notice of default to
the Debtor and Debtor's Counsel. Should Debtor fail to cure the
default within 10 days following receipt of the Notice of Default,
the Claimant may file a notice of default with the Bankruptcy Court
and move to convert this case to a case under Chapter 7 of the
Bankruptcy Code in accordance with the Federal Rules of Bankruptcy
Procedure and the Local Rules.
This Plan will be funded by the sale of real estate and the ongoing
rental income earned by the Debtor. The Debtor anticipates that
Jermaine Worthy and Deidra Stanton, insiders of the Debtor, will
continue in their position as managers of the Debtor.
A full-text copy of the First Amended Plan dated September 26, 2024
is available at https://urlcurt.com/u?l=l9grPD from
PacerMonitor.com at no charge.
Counsel to the Debtor:
Robin R. De Leo, Esq.
The De Leo Law Firm, LLC
800 Ramon St.
Mandeville, LA 70448
Tel: (985) 727-1664
Fax: (985) 727-4388
Email: lisa@northshoreattorney.com
About BKDJ Investment LLC
BKDJ Investment, LLC, filed a petition under Chapter 11, Subchapter
V of the Bankruptcy Code (Bankr. E.D. La. Case No. 24-10966) on May
22, 2024, with up to $50,000 in assets and up to $1 million in
liabilities.
Judge Meredith S. Grabill presides over the case.
Robin R. DeLeo, Esq., is the Debtor's legal counsel.
BROOKFIELD PROPERTIES: Receivers Appointed for Providence Mall
---------------------------------------------------------------
Eli Sherman of WPRI.com reports that Rhode Island Superior Court
Judge Brian Stern on November 1, 2024, appointed W. Mark Russo and
John Dorsey, partners at Ferrucci Russo Dorsey in Providence, as
temporary receivers for Providence Place, the state's largest
shopping mall.
Providence Mall was placed into receivership on October 31, 2024,
after its primary private lenders claimed that the mall's
management company, Brookfield Properties, defaulted on a $259
million debt, the report states.
Russo told Target 12 on November 4, 2024, that he and Dorsey would
be collaborating with all parties involved to "protect that asset."
He emphasized that receivership typically occurs behind the
scenes, and shoppers should not notice any changes at the mall. He
encouraged people to continue visiting and shopping as usual.
About Brookfield Properties
Brookfield Properties --
https://www.brookfieldproperties.com/en.html -- is a multifamily
services company, providing asset and property management across
the North America.
. They helped revive Westerly Hospital during its financial
struggles a decade ago.
BRUNER ENTERPRISES: Continued Operations to Fund Plan
-----------------------------------------------------
Inspired Gifts & Graphics, LLC, a debtor affiliate of Bruner
Enterprises, LLC, filed with the U.S. Bankruptcy Court for the
Western District of Oklahoma a Plan of Reorganization dated
September 26, 2024.
The Debtor is a screen printing and embroidery business located in
El Reno, Oklahoma. Debtor operates out of a building owned by
Bruner Enterprises, LLC, which filed for Chapter 11 bankruptcy
contemporaneous with the filing of this case (Case No. 24-11804).
This case is being jointly administered with the Bruner
Enterprises, Inc. case.
The Debtor filed bankruptcy in order to stop a foreclosure on the
property owned by Bruner Enterprises, LLC, for which Debtor is
liable on the mortgage. Debtor proposes this plan of reorganization
to restructure its debt and exit bankruptcy to continue operating.
This Plan of Reorganization proposes to pay Debtor's creditors from
the revenue generated by Debtor.
Class 3 consists of all allowed priority unsecured claims. Proof of
Claim provides for a priority unsecured claim in the amount of
$84,925.59 and a general unsecured claim in the amount of
$89,202.90. Debtor will pay the priority claim in full as a CLASS 3
claim. Debtor will pay $1,722.05 per month, which includes 8%
interest, over 60 months or until paid in full. Debtor will pay the
general unsecured claim as a Class 4 general unsecured claim.
Class 4 consists of all allowed general unsecured claims. The
Debtor will pay the unsecured creditors $0 pursuant to the
liquidation test. Debtor will pay all of its projected disposable
income, if any, over thirty-six months to the general unsecured
pool of creditors. If Debtor has monthly disposable income during
the 36-month period, it will first pay the disposable income to its
secured and priority creditors, then once the secured and priority
creditors are paid in full pursuant to treatment under the Plan,
Debtor will pay its disposable income to the unsecured pool of
creditors through month thirty-six.
Class 5 consists of Equity Interests of the Debtor. Yvonne Bruner
is 70% owner of the Debtor. Tony Chris Bruner is 30% owner of the
Debtor. All owners will retain their equity interests in the newly
reorganized Debtor. Yvonne Bruner shall receive compensation in the
amount of $3,000 per month.
The Debtor will fund the Plan from its operations.
A full-text copy of the Plan of Reorganization dated September 26,
2024 is available at https://urlcurt.com/u?l=HmhFf0 from
PacerMonitor.com at no charge.
About Bruner Enterprises
Inspired Gifts & Graphics, LLC is a screen printing and embroidery
business located in El Reno, Oklahoma. It operates out of a
building owned by affiliate Bruner Enterprises, LLC,
Bruner Enterprises filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. W.D. Okla. Case No.
24-11804) on June 28, 2024, listing under $1 million in both assets
and liabilities.
Inspired Gifts & Graphics filed its voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Okla. Case No.
24-11807) on June 28, 2024, listing under $1 million in both assets
and liabilities.
Judge Sarah A. Hall oversees the cases.
Hammond Law Firm and Blackwood Law Firm, PLLC, serve as the
Debtors' counsel.
CARROLLTON GATEWAY: Voluntary Chapter 11 Case Summary
-----------------------------------------------------
Debtor: Carrollton Gateway Development Partners, LLC
12801 North Central Expressway
Suite 140
Dallas, Texas 75243
Business Description: The Debtor is engaged in activities related
to real estate.
Chapter 11 Petition Date: November 5, 2024
Court: United States Bankruptcy Court
Northern District of Texas
Case No.: 24-33585
Debtor's Counsel: Dennis M. Holmgren, Esq.
HOLMGREN JOHNSON: MITCHELL MADDEN, LLP
12801 North Central Expressway, Suite 140
Dallas, Texas 75243
Tel: 972-484-7780
Email: dennis@hjmmlegal.com
Estimated Assets: $10 million to $50 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Dennis M. Holmgren as Manager of Urban
Planning Partners, LLC, Manager of the Debtor.
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/4WOONXQ/Carrollton_Gateway_Development__txnbke-24-33585__0001.0.pdf?mcid=tGE4TAMA
CATHETER PRECISION: Jenkins Family Charitable Holds 9.92% Stake
---------------------------------------------------------------
Jenkins Family Charitable Institute and its Trustee, Casey A.
Jenkins disclosed in a Schedule 13D Report filed with the U.S.
Securities and Exchange Commission that as of October 29, 2024,
they beneficially owned shares of Catheter Precision, Inc.'s Common
Stock.
Jenkins Family Charitable Institute is reported to beneficially own
500,226 shares of the common stock which:
* Include 326,134 shares subject to currently exercisable
Series H Warrants.
* Do not include Series H, I and J Warrants to purchase an
aggregate of 1,173,866 shares of common stock which are currently
not exercisable due to beneficial ownership blockers.
* Do not include 18.691 shares of Series X Preferred Stock
which are convertible into approximately 1,869 shares of common
stock upon satisfaction of certain conditions that have not
currently been met.
The ownership represents 9.92% of the 8,004,633 shares of common
stock outstanding on October 29, 2024.
Casey Jenkins is reported to have 506,109, representing 9.99% of
the shares outstanding.
A full-text copy of the Institute's SEC Report is available at:
https://tinyurl.com/yr98n556
About Catheter Precision Inc.
Headquartered in the U.S., Catheter Precision, Inc. is a medical
device company focused on improving the treatment of cardiac
arrhythmias. The Company, which was reincorporated as Ra Medical
Systems, Inc. in Delaware in 2018 and changed its name to Catheter
Precision, Inc. on August 17, 2023, develops technology for
electrophysiology procedures through collaborations with physicians
and continuous product advancements.
East Brunswick, New Jersey-based WithumSmith+Brown, PC., the
Company's auditor since 2023, issued a "going concern"
qualification in its report dated March 29, 2024, citing recurring
operating losses and anticipated future losses that raise
substantial doubt about the Company's ability to continue as a
going concern.
For the year ended December 31, 2023, Catheter Precision reported a
net loss of $70.6 million, compared to a net loss of $26.9 million
for 2022. As of June 30, 2024, the Company had $26.3 million in
total assets, $11.9 million in total liabilities, and $14.3 million
in total stockholders' equity.
CATHETER PRECISION: Waives Ownership Cap for Jenkins Family
-----------------------------------------------------------
Catheter Precision, Inc. disclosed in a Form 8-K Report filed with
the U.S. Securities and Exchange Commission that on October 29,
2024, the Company, entered into a waiver agreement with the Jenkins
Family Charitable Institute, a family charitable entity, which
provided that the beneficial ownership limitation contained in
pre-funded warrants held by the Institute was waived by the
parties.
Prior to the waiver, the Institute was prohibited from exercising
the pre-funded warrants in full because they contained a beneficial
ownership limitation that prevented the Institute from exercising
them to the extent that its beneficial ownership of Company common
stock would exceed 9.99%. Following the waiver, the Institute
exercised its pre-funded warrants in full to acquire an additional
235,000 shares of Company common stock for aggregate additional
consideration of $23.50, bringing its beneficial ownership of
Company common stock to 6.32%. The trustee of the Institute is the
daughter of David Jenkins, the Company's Chairman of the Board and
Chief Executive Officer, and the waiver and the waiver agreement
were approved in advance by the Company's Board Audit Committee.
About Catheter Precision Inc.
Headquartered in the U.S., Catheter Precision, Inc. is a medical
device company focused on improving the treatment of cardiac
arrhythmias. The Company, which was reincorporated as Ra Medical
Systems, Inc. in Delaware in 2018 and changed its name to Catheter
Precision, Inc. on August 17, 2023, develops technology for
electrophysiology procedures through collaborations with physicians
and continuous product advancements.
East Brunswick, New Jersey-based WithumSmith+Brown, PC., the
Company's auditor since 2023, issued a "going concern"
qualification in its report dated March 29, 2024, citing recurring
operating losses and anticipated future losses that raise
substantial doubt about the Company's ability to continue as a
going concern.
For the year ended December 31, 2023, Catheter Precision reported a
net loss of $70.6 million, compared to a net loss of $26.9 million
for 2022. As of June 30, 2024, the Company had $26.3 million in
total assets, $11.9 million in total liabilities, and $14.3 million
in total stockholders' equity.
CHAMPIONS ONCOLOGY: Registers 2-Mil. Shares for 2021 Equity Plan
----------------------------------------------------------------
Champions Oncology, Inc. filed a Registration Statement on Form S-8
with the U.S. Securities and Exchange Commission relating to
2,000,000 shares of its Common Stock which may be offered and sold
pursuant to the Champions Oncology 2021 Equity Incentive Plan.
The Registration Statement includes, pursuant to General
Instruction E to Form S-8, a reoffer prospectus in Part I. The
Reoffer Prospectus may be utilized for reofferings and resales by
certain executive officers and directors listed in the Reoffer
Prospectus who may be deemed "affiliates" of the Company on a
continuous or a delayed basis in the future of up to 342,152 shares
of Common Stock. These shares constitute "control securities" or
"restricted securities" which have been issued prior to or issuable
after the filing of the Registration Statement.
A full-text copy of the Registration Statement is available at:
https://tinyurl.com/mpetcmjy
About Champions Oncology
Hackensack, N.J.-based Champions Oncology, Inc. is a
technology-enabled research organization engaged in creating
technology solutions to be utilized in drug discovery and
development. Its research center operates in both regulatory and
non-regulatory environments and consists of a comprehensive set of
computational and experimental research platforms. Its
pharmacology, biomarker, and data platforms are designed to
facilitate drug discovery and development at lower costs and
increased speeds.
West Palm Beach, Fla.-based EisnerAmper LLP, the Company's auditor
since 2015, issued a "going concern" qualification in its report
dated July 16, 2024, citing that the Company has experienced net
losses and negative cash flows from operations that raise
substantial doubt about its ability to continue as a going
concern.
Champions Oncology reported a net loss of $7.3 million for the year
ending April 30, 2024. As of April 30, 2024, the Company had $26.1
million in total assets, $28 million in total liabilities, and $1.9
million in total stockholders' deficiency.
DAAS GROUP: Voluntary Chapter 11 Case Summary
---------------------------------------------
Debtor: DAAS Group, LLC
DBA Sunaina Properties
4204 Chiavari Way
Manteca, CA 95337
Business Description: DAAS Group is primarily engaged in renting
and leasing real estate properties.
Chapter 11 Petition Date: November 6, 2024
Court: United States Bankruptcy Court
Eastern District of California
Case No.: 24-25046
Judge: Hon. Fredrick E. Clement
Debtor's Counsel: Gabriel E. Liberman, Esq.
LAW OFFICES OF GABRIEL LIBERMAN, APC
1545 River Park Drive, Ste 530
Sacramento, CA 95815
Tel: 916-485-1111
Fax: 916-485-1111
Email: attorney@4851111.com
Estimated Assets: $10 million to $50 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Amarpal Narang as managing member.
The Debtor failed to include in the petition a list of its 20
largest unsecured creditors.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/MKZATUY/DAAS_Group_LLC__caebke-24-25046__0001.0.pdf?mcid=tGE4TAMA
DIAMOND P LLC: Unsecureds Owed $241K Will Get 5% of Claims in Plan
------------------------------------------------------------------
Diamond P LLC submitted a First Amended Disclosure Statement
describing First Amended Plan dated September 24, 2024.
The Debtor initially designated that it elected to prosecute this
Chapter 11 case as a case under Subchapter V.
In order to further minimize administrative expenses, the Debtor
filed an application to change the designation to a conventional
Small Business case. The Debtor's application was granted by the
Bankruptcy Court and an Order was entered on August 20, 2024.
During the first five months in Chapter 11, the Debtor initiated a
series of marketing initiatives, which together with its usual and
customary seasonal increase in sales during the third and fourth
quarters of each year, has begun to produce the positive cash flow
necessary to fund the Chapter 11 proposed herein.
Class 1 consists of the Secured Claim of NYBDC. An order was
entered by the Bankruptcy Court on August 27, 2024 setting the
secured claim of this creditor at $35,000.00. NYBDC shall retain
its lien against the Debtor's property in this amount. The Debtor
shall pay the NYBDC the amount of its allowed claim pursuant to
Section 1129(a)(9)(c), employing the rate of interest of 6% per
annum. The Debtor shall timely pay the full amount of the
pre-petition secured claim, as reduced, in 50 monthly installments
commencing January 2025.
Due to the nature of the Debtor's business, the Debtor shall remit
monthly payments of $792.88 per month. The aggregate sum to be paid
to the NYBDC inclusive of statutory interest, shall be $39,644.00.
The secured claim of the NYBDC is impaired under the Plan and, as
such, shall vote on the Plan.
Class 2 consists of General Unsecured Claims. Class 2 claimants,
whose claims total $241,511.46, will be paid 5% of their allowed
claim in cash on the effective date. The aggregate sum to be paid
to the unsecured creditors shall be $12,076.00. General unsecured
creditors are impaired under the Plan.
On May 20, 2024, the SBA filed a secured claim in the amount of
$173,957.59. An order was entered by the Bankruptcy Court on August
27, 2024 reclassifying this claim as a general unsecured claim.
Further, the subordinate lien held by the SBA against the assets of
the debtor relating to this case shall be declared null and void
upon the confirmation of the Debtor's Chapter 11 Small Business
Plan in this case.
The Debtor's plan required a total average monthly payment to its
creditors in the approximate amount of $1,258.89. These funds shall
be derived from the day-to-day operations of the reorganized
Debtor.
A full-text copy of the First Amended Disclosure Statement dated
September 24, 2024 is available at https://urlcurt.com/u?l=LW1RDQ
from PacerMonitor.com at no charge.
Attorney for the Debtor:
Richard S. Feinsilver, Esq.
One Old Country Road, Suite 347
Carle Place, New York 11514
Phone: (516) 873-6330
About Diamond P LLC
Diamond P LLC has owned and operated a retail liquor store with
offices at 156 Easte Main Street, Port Jefferson, New York.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D.N.Y. Case No. 24-71423) on April 11,
2024, with up to $50,000 in assets and up to $500,000 in
liabilities.
Judge Robert E. Grossman presides over the case.
Richard S. Feinsilver, Esq., is the Debtor's legal counsel.
DIGITAL GRAPHICS PLUS: Gets Interim OK to Use Cash Collateral
-------------------------------------------------------------
Digital Graphics Plus, LLC received interim approval from the U.S.
Bankruptcy Court for the Middle District of Florida, Orlando
Division to use cash collateral through Nov. 14.
The interim order approved the use of cash collateral to pay U.S.
trustee quarterly fees and operating expenses set forth in the
company's projected budget. The budget shows total projected
expenses of $107,466 for October to December.
The U.S. Small Business Administration, a secured creditor, will be
granted a replacement lien on cash collateral to the same extent
and with the same validity and priority as its pre-bankruptcy
lien.
The next hearing is scheduled for Nov. 14.
About Digital Graphics Plus
Digital Graphics Plus, LLC provides graphic design and printing
services. Its offerings typically include a range of products such
as promotional materials, custom signage, marketing collateral, and
digital solutions aimed at enhancing branding and visibility for
businesses.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. M.D. Fla. Case No. 24-05422) on October 4,
2024, with up to $50,000 in assets and up to $500,000 in
liabilities.
Judge Grace E. Robson oversees the case.
The Debtor is represented by Jeffrey Ainsworth, Esq., at
Bransonlaw, PLLC.
DIOCESE OF BUFFALO: Dan Chiacchia Represents Sexual Abuse Claimants
-------------------------------------------------------------------
The law firm of Dan Chiacchia Attorneys, PLLC filed a verified
statement pursuant to Rule 2019 of the Federal Rules of Bankruptcy
Procedure to disclose that in the Chapter 11 case of the Diocese of
Buffalo, N.Y., the firm represents Sexual Abuse Claimants.
Dan Chiacchia Attorneys, PLLC represents each Sexual Abuse
Claimant. Due to confidentiality, each Claimant listed has been
identified by their Sexual Abuse Proof of Claim Form number. The
names and addresses of the confidential Claimants are available to
permitted parties who have executed a confidentiality agreement and
have access to the Sexual Abuse Claim Forms.
Dan Chiacchia was retained by each Claimant to pursue claims for
damages against The Diocese of Buffalo, N.Y. as a result of sexual
abuse. This includes representing and acting on behalf of each
Claimant in the bankruptcy case.
As of the date of this Statement, each Claimant maintains an
individual economic interest against the Debtor, The Diocese of
Buffalo, N.Y., that has been disclosed in the Confidential Sexual
Abuse Claim Supplement or will be disclosed in the future.
About The Diocese of Buffalo N.Y.
The Diocese of Buffalo, N.Y., is home to nearly 600,000 Catholics
in eight counties in Western New York. The territory of the diocese
is co-extensive with the counties of Erie, Niagara, Genesee,
Orleans, Chautauqua, Wyoming, Cattaraugus, and Allegany in New York
State, comprising 161 parishes. There are 144 diocesan priests and
84 religious priests who reside in the Diocese.
The diocese through its central administrative offices (a) provides
operational support to the Catholic parishes, schools, and certain
other Catholic entities that operate within the territory of the
Diocese "OCE"; (b) conducts school operations through which it
provides parish schools with financial and educational support; (c)
provides comprehensive risk management services to the OCEs; (d)
administers a lay pension trust and a priest pension trust for the
benefit of certain employees and priests of the OCEs; and (e)
provides administrative support for St. Joseph Investment Fund,
Inc.
Dealing with sexual abuse claims, the Diocese of Buffalo sought
Chapter 11 protection (Bankr. W.D.N.Y. Case No. 20-10322) on Feb.
28, 2020. The diocese was estimated to have $10 million to $50
million in assets and $50 million to $100 million in liabilities as
of the bankruptcy filing.
The Honorable Carl L. Bucki is the case judge.
Bond, Schoeneck & King, PLLC, led by Stephen A. Donato, Esq., is
the diocese's counsel; Connors LLP and Lippes Mathias Wexler
Friedman LLP are its special litigation counsel; and Phoenix
Management Services, LLC is its financial advisor. Stretto is the
claims agent, maintaining the page:
https://case.stretto.com/dioceseofbuffalo/docket
The U.S. Trustee for Region 2 appointed a committee of unsecured
creditors on March 12, 2020. The committee tapped Pachulski Stang
Ziehl & Jones, LLP and Gleichenhaus, Marchese & Weishaar, PC as
bankruptcy counsel, and Burns Bair LLP as special insurance
counsel.
DIOCESE OF ROCKVILLE CENTRE:Gets Court Okay for Plan Disclosures
----------------------------------------------------------------
Vince Sullivan of Law360 reports that the Roman Catholic diocese,
Rockville Centre Diocese, serving New York's Long Island received
bankruptcy court approval on Monday for a Chapter 11 plan
disclosure statement, now updated to include the finalized terms of
a proposed settlement with a group of its insurers.
About The Roman Catholic Diocese
of Rockville Centre, New York
The Roman Catholic Diocese of Rockville Centre, New York, is the
seat of the Roman Catholic Church on Long Island. The Diocese has
been under the leadership of Bishop John O. Barres since February
2017. The State of New York established the Diocese as a religious
corporation in 1958. The Diocese is one of eight Catholic dioceses
in New York, including the Archdiocese of New York. The Diocese's
total Catholic population is approximately 1.4 million, roughly
half of Long Island's total population of 3.0 million. The Diocese
is the eighth largest diocese in the United States when measured by
the number of baptized Catholics.
To deal with sexual abuse claims, the Roman Catholic Diocese of
Rockville Centre, New York, filed a Chapter 11 petition (Bankr.
S.D.N.Y. Case No. 20-12345) on Sept. 30, 2020, listing as much as
$500 million in both assets and liabilities. Judge Martin Glenn
oversees the case.
The Diocese tapped Jones Day as legal counsel, Alvarez & Marsal
North America, LLC, as restructuring advisor, and Sitrick and
Company, Inc., as communications consultant. Epiq Corporate
Restructuring, LLC is the claims agent.
The U.S. Trustee for Region 2 appointed an official committee of
unsecured creditors in the Diocese's Chapter 11 case. The committee
tapped Pachulski Stang Ziehl & Jones, LLP and Ruskin Moscou
Faltischek, PC as its bankruptcy counsel and special real estate
counsel, respectively.
Robert E. Gerber, the legal representative for future claimants of
the Diocese, is represented by the law firm of Joseph Hage
Aaronson, LLC.
DOMTAR CORP: Fitch Assigns BB Rating on $60MM Secured Notes
-----------------------------------------------------------
Fitch Ratings has assigned a 'BB' with a Rating Recovery of 'RR2'
rating to Domtar Corporation's (Domtar) proposed $60 million
tax-exempt secured notes due 2029. Proceeds will be used to finance
a project for the acquisition and installation of solid waste
disposal facility and pollution control equipment consisting of an
anerobic digester and related equipment.
Key Rating Drivers
Elevated Leverage: Leverage rose following the RFP acquisition,
ending 3Q24 at 5.5x (5.6x pro-forma the bond issuance), calculated
by Fitch, up from 2.0x at YE 2022. Domtar may slowly deleverage
during the forecast period toward its 2.5x mid-cycle target. The
path will remain highly dependent on variable commodities pricing,
especially lumber. As such, Fitch expects Domtar to slowly
deleverage during the forecast period. Fitch does not expect funded
debt of $2.5 billion to meaningfully decrease in the next several
years.
Ongoing M&A Activity: Domtar's M&A strategy impacts its credit
profile. The RFP acquisition added about $900 million in debt, for
a total funded debt around $2.5 billion at YE 2023, exceeding
expectations. The divestitures of Domtar's Dryden and RFP's Thunder
Bay facilities closed as expected in 2H23, yielding $417 million in
proceeds, offset by $186 million in other asset acquisitions in
2023. Domtar's owner contributed significant equity for the
acquisitions, but Domtar's undefined long-term strategic goals
could lead to more leverage.
Cyclical Weakness in Lumber: Domtar's acquisition of RFP roughly
doubled its size and added product diversification, although
overall exposure to cyclical end markets rose due to RFP's large
wood products business. RFP is one of the largest softwood lumber
producers in North America, with an annual capacity of 2.9 billion
board feet. Its lumber operations have been highly variable over
the past several years, with EBITDA ranging from $20 million in
2019 to over $700 million in 2021, adjusted for the deduction of
75% of duties.
With the decline in post-pandemic lumber prices, Domtar's lumber
operations have hovered around EBITDA break-even levels for most of
2023 and into 2024. Pricing for 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. The U.S. Department of Commerce has raised tariffs on
imports of Canadian softwood lumber products from 8.05% to about
14% this year, which could constrain Domtar's ability to reduce
overall costs and regain profitability.
Diversified Forest Products Portfolio: Domtar has a large-scale
forest products portfolio across North American paper, pulp and
containerboard, and benefits from competitive cost positions and
end-market diversification due to RFP's acquisition. While the
paper segment is in secular decline, Domtar's paper production is
favorably positioned in the lower half of the cost curve, which
helps offset declines in annual volumes. This sector's orderly
market structure benefits from major producers regularly reducing
capacity to maintain a market supply/demand balance.
Domtar's growing containerboard segment benefits from long-term
growth in e-commerce and box shipments, bolstered by its recently
completed Kingsport facility. Pulp and fluff production are exposed
to sustained demand growth for sanitary products, especially in
Asia. The lumber business acquired through RFP ranks as the
fifth-largest in North America, with high potential cash flow,
exposure to a continued housing deficit in the U.S.
Derivation Summary
Domtar is among the leading uncoated freesheet paper businesses in
the consolidated North American market. The company holds a market
position comparable to that of Berry Global Group Inc. (Berry;
BB+/Stable), Sealed Air Corporation (Sealed Air; not rated) and
Crown Holdings, Inc. (Crown; not rated), which compete in the more
fragmented packaging market. Packaging peers' end-markets are
significantly more robust, driven by stable consumer
nondiscretionary food and beverage end-markets. Domtar's freesheet
paper segment shows a secular volume decline, which may accelerate
with the work-from-home trend.
At approximately $650 million annually, Domtar's EBITDA is
considerably lower than that of forest products unrated peers
International Paper Company, with $3 billion, and Packaging
Corporation of America, with $1.3 billion, as well as rated
packaging peers Berry, with $2.4 billion, and Silgan Holdings Inc.
(BB+/Stable), with $750 million. Domtar is privately owned, its
strategy is less transparent than publicly traded peers.
Domtar's EBITDA margins have historically been 11%-14%, lower than
Klabin S.A.'s typical 30%-40% margins due to the latter's leading
scale and low-cost position in commodity pulp products. Domtar's
margins are in the same low to mid-teens vicinity as those of Crown
and Sealed Air, and slightly lower than Berry's, although Domtar's
margin volatility is somewhat higher than packaging peers due to
its exposure to cyclical pulp prices.
Maintenance capex requirements are low. However, Domtar could face
capital investment needs over the coming years to convert uncoated
freesheet capacity to pulp and containerboard production. Demand
for these exceeds that of peer packaging companies, which typically
face capital investment requirements under 5% of sales of a more
discretionary nature.
Domtar's leverage following the RFP acquisition is expected to
remain lower than packaging peers, near 3.5x through the forecast
period. Total leverage expected is 3.5x-4.0x for Berry, near 4.0x
for Silgan and in the high 4x area for Crown. Domtar's gross
leverage is higher than International Paper Company's 2.5x and
Packaging Corporation of America's 2.1x levels for 2020.
Key Assumptions
- Subdued lumber prices during forecast period, reflecting higher
than expected interest rate environment and declined housing
activity;
- Generally supportive paper and containerboard markets; pulp
prices in downcycle;
- Annual $95 million in pension and benefits contributions;
- Excess cash flow sweep of 50% of FCF.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- EBITDA leverage consistently below 3.5x;
- Maintenance of sufficient liquidity commensurate with a more
highly cyclical business profile;
- Adherence to credit-conscious capital allocation policies in the
context of a well-defined strategic plan.
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- EBITDA leverage consistently above 4.5x;
- Failure to maintain adequate liquidity in support of a more
highly cyclical business profile;
- Weakening in leverage targeting or credit policies, including
those involving shareholder payments or related-party
transactions;
- Any change in policies or actions that erode the standalone
management of Domtar's financial policies.
Liquidity and Debt Structure
Adequate Liquidity: As of Sept. 30, 2024, Domtar had $117 million
of available cash on hand and $430 million available on its $1
billion asset-based lending revolving facility. Outstanding
borrowings consist of $406 million in borrowings and $164 million
in LOCs. Fitch forecasts cash flow generation to be mostly positive
in the forecast period. Fitch expects Domtar to have adequate
liquidity to meet its financial commitments over the forecast
period.
Manageable Debt Maturities: The majority of Domtar's debt is due in
2028; this includes Farm Term Loan B, the First Lien Term Loan,
senior secured bonds and the asset-based lending facility. Of
Domtar's 2042 and 2044 senior unsecured notes, $266 million remains
in the capital structure following a tender process.
Issuer Profile
Domtar Corporation manufactures and distributes paper, market pulp,
wood products, and tissue.
Date of Relevant Committee
24 June 2024
MACROECONOMIC ASSUMPTIONS AND SECTOR FORECASTS
Fitch's latest quarterly Global Corporates Macro and Sector
Forecasts data file which aggregates key data points used in its
credit analysis. Fitch's macroeconomic forecasts, commodity price
assumptions, default rate forecasts, sector key performance
indicators and sector-level forecasts are among the data items
included.
ESG Considerations
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Recovery
----------- ------ --------
Domtar Corporation
senior secured LT BB New Rating RR2
DRF LOGISTICS: Unsecureds Will Get 3% to 10% in Liquidating Plan
----------------------------------------------------------------
DRF Logistics, LLC and DRF, LLC submitted a Disclosure Statement
for the Amended Joint Plan of Liquidation dated September 24,
2024.
The Plan contemplates a liquidation and eventual wind-down of the
Debtors. Prior to the Effective Date, the Debtors will use
commercially reasonable efforts to sell their assets.
To implement the provisions of the Plan, including making
distributions to holders of Claims and Interests, the Plan
contemplates the appointment of Hilco Commercial Industrial, LLC as
the Liquidating Agent for each Debtor (the "Liquidating Agent").
The Liquidating Agent will carry out and implement all provisions
of the Plan after the Effective Date and wind down the Debtors'
estates.
The Plan incorporates the terms of that certain Settlement and
Release Agreement, dated August 8, 2024 (the "Settlement and
Release Agreement"), entered into between the Debtors, PBI, and
PBIH. As discussed in more detail herein, in connection with the
Settlement and Release Agreement, Pitney Bowes agreed to support
the Plan and committed to provide up to $18.5 million to fund Plan
distributions to holders of Oaktree Secured Claims and General
Unsecured Claims in exchange for the release of any and all claims
and Causes of Action the Debtors may have against Pitney Bowes.
After the Effective Date, the proceeds from the sale of any Wind
Down Estate Assets and any other Assets of the Wind Down Estates
will become Post-Effective Date Available Cash of the applicable
Wind Down Estate. Any distributions of Post-Effective Date
Available Cash will be allocated in accordance with the described
Waterfall (and as set forth in more detail in the Plan):
* to fund any deficits in the Wind Down Reserve;
* to fund any deficits in the Senior Claims Recovery Pool;
* with 50% to fund the Unsecured Claims Subsequent
Distribution and 50% to fund the Oaktree Additional Recovery Amount
until all Allowed Oaktree Secured Claims are paid in full;
* to fund the Unsecured Claims Subsequent Distribution until
payment in full of Allowed General Unsecured Claims;
* to fund any Allowed DIP Claims not otherwise paid on the
Effective Date until all Allowed DIP Claims are paid in full; and
* to Allowed Existing DRF Logistics Equity Interests.
Class 3 consists of Oaktree Secured Claims. Each holder of an
Allowed Oaktree Secured Claim shall receive from the Debtors or
Liquidating Agent (as applicable), in full and final satisfaction,
settlement, release, and discharge of such Allowed Oaktree Secured
Claim, such holder's Pro Rata share of the (i) Oaktree Initial
Payment and (ii) Oaktree Additional Recovery Amount. This Class
will receive a distribution of 91% of their allowed claims.
Class 4 consists of General Unsecured Claims. Each holder of an
Allowed General Unsecured Claim shall receive, from the Debtors or
Liquidating Agent (as applicable), in full and final satisfaction,
settlement, release, and discharge of such Allowed General
Unsecured Claim, such holder's Pro Rata share of (i) the Unsecured
Claims Initial Distribution; provided that, for the purposes of
this clause (i), the PB Unsecured Claim shall not participate in or
receive any recovery from the Unsecured Claims Initial
Distribution, plus (ii) the Unsecured Claims Subsequent
Distribution with such distribution(s) pursuant to this clause (ii)
made in accordance with the Debtor Distribution Ratio. This Class
will receive a distribution of 3% to 10% of their allowed claims.
The Debtors and Liquidating Agent shall fund Cash distributions
under this Plan with Cash proceeds available from: (i) Cash
available on or after the Effective Date in accordance with the
Plan, including the PB Settlement Amount, and (ii) any additional
proceeds of the Wind Down, if any.
Pursuant to 1128(a) of the Bankruptcy Code, the Confirmation
Hearing will be held on November 19, 2024 at 9:00 a.m. before the
Honorable Judge Christopher Lopez at the United States Bankruptcy
Court for the Southern District of Texas, Courtroom 401, 515 Rusk
Street, Houston, Texas 77002.
A full-text copy of the Amended Disclosure Statement dated
September 24, 2024 is available at https://urlcurt.com/u?l=nJunm8
Stretto, Inc., claims agent.
Proposed Attorneys for the Debtors:
Gabriel A. Morgan, Esq.
Clifford W. Carlson, Esq.
WEIL, GOTSHAL & MANGES LLP
700 Louisiana Street, Suite 3700
Houston, Texas 77002
Tel: (713) 546-5000
Fax: (713) 224-9511
E-mail: Gabriel.Morgan@weil.com
Clifford.Carlson@weil.com
- and -
Ray C. Schrock, Esq.
Ronit J. Berkovich, Esq.
Lauren Tauro, Esq.
Alexander P. Cohen, Esq.
WEIL, GOTSHAL & MANGES LLP
767 Fifth Avenue
New York, New York 10153
Tel: (212) 310-8000
Fax: (212) 310-8007
E-mail: Ray.Schrock@weil.com
Ronit.Berkovich@weil.com
Lauren.Tauro@weil.com
Alexander.Cohen@weil.com
About DRF Logistics
Headquartered in Austin, Texas, DRF Logistics, LLC and DRF, LLC are
providers of domestic ecommerce parcel services, as well as
cross-border logistics services, operating approximately $35
billion in total addressable market and working with over 350
customer brands, including leading retailers and marketplaces. The
Debtors' domestic parcel services include delivery, returns,
underlying client and consumer-facing software. The Debtors'
cross-border services include modular delivery solutions to over
200 destinations.
DRF Logistics and DRF filed their voluntary petitions for relief
under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Texas Lead
Case No. 24-90447) in August 8, 2024, listing $100 million to $500
million in both assets and liabilities. The petitions were signed
by Eric Kaup as chief restructuring officer.
Judge Christopher M Lopez presides over the case.
Gabriel Adam Morgan, Esq., at Weil, Gotshal & Manges LLP, is the
Debtors' counsel.
ENVIVA INC: Baker Donelson Represents Creditors
-----------------------------------------------
The law firm of Baker, Donelson, Bearman, Caldwell & Berkowitz, PC
filed a verified statement pursuant to Rule 2019 of the Federal
Rules of Bankruptcy Procedure to disclose that in the Chapter 11
cases of Enviva Inc. and affiliates, the firm represents multiple
creditors.
Baker Donelson currently represents the following creditors: (a)
SHW Storage and Handling Solutions, Inc. ("SHW"); and (b) John
Deere Construction and Forestry Company a/k/a John Deere Financial
("JDF") and Deere Credit, Inc. ("DCI," and together with JDF,
"Deere").
SHW has filed the following three claims in the case setting forth
its rights arising from its provisions of goods and services to the
Debtors:
* Claim No. 40 in the amount of $63,135 and against Enviva
Pellets Greenwood LLC;
* Claim No. 41, as amended by Claim 82, in the amount of
$2,526 and against Enviva Pellets Lucedale LLC; and
* Claim No. 42 in the amount of $65,175 and against Enviva
Pellets, LLC.
Additionally, on or about January 25, 2023, Enviva Pellets Epes,
LLC entered into an Agreement (the "Contract") with SHW for the
purchase and installation of equipment for use in Enviva's
operations, and Debtors seek to assume the Contract according to
the Plan Supplement. Although no amounts are currently due under
the Contract, amounts totaling $374,453.55 may come due prior to
entry of any order confirming the Amended Plan and/or the date that
such Amended Plan goes effective.
Deere has filed the following six claims in the case setting forth
its rights from Deere's finance and/or lease of equipment with
certain Debtors (collectively, the "Deere Contracts"):
* Claim Nos. 785 and 781 in the amount of $627,023.65 and
against Enviva, Inc. and Enviva Pellets, LLC, respectively, in
relation to a Loan Contract;
* Claim No. 809 in the amount of $158,934.30 and against
Enviva Pellets LLC in relation to a Loan Contract;
* Claim No. 800 in the amount of $158,934.30 and against
Enviva Pellets, LLC in relation to a Loan Contract;
* Claim No. 801 in the amount of $75,719.67 and against Enviva
Pellets, LLC in relation to a Loan Contract;
* Claim No. 798 in the amount of $157,559 and against Enviva
Pellets LLC in relation to a Loan Contract; and
* Claim Nos. 790 and 745 in the amount of 1,858,378.76 and
against Enviva, Inc. and Enviva Pellets, LLC, respectively, in
relation to a Master Lease Agreement.
Because the Debtors have moved to assume all or some of the Deere
Contracts, Deere filed a Limited Objection.
The law firm can be reached at:
BAKER, DONELSON, BEARMAN CALDWELL & BERKOWITZ, P.C.
J. David Folds, Esq.
901 K Street NW – Suite 900
Washington, DC 20001
Telephone: (202) 508-3441
Facsimile: (202) 508-3402
Email: dfolds@bakerdonelson.com
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.
FRANCHISE GROUP: Paul Hastings & Landis Advise First Lien Lenders
-----------------------------------------------------------------
The law firms of Paul Hastings LLP and Landis Rath & Cobb LLP filed
a verified statement pursuant to Rule 2019 of the Federal Rules of
Bankruptcy Procedure to disclose that in the Chapter 11 cases of
Franchise Group, Inc., and affiliates, the firms represent the Ad
Hoc Group of First Lien Lenders.
On or around May 13, 2024, the Ad Hoc Group of First Lien Lenders
retained Paul Hastings as counsel in connection with potential
negotiations and transactions related to the Debtors. Each member
of the Ad Hoc Group of First Lien Lenders has consented to Paul
Hastings's representation.
On or around October 3, 2024, the Ad Hoc Group of First Lien
Lenders retained Landis as counsel in connection with potential
negotiations and transactions related to the Debtors. Each member
of the Ad Hoc Group of First Lien Lenders has consented to Landis'
representation.
The members of the Ad Hoc Group of First Lien Lenders are either
the beneficial holders of, or the investment advisors or managers
to, funds and/or accounts that hold disclosable economic interests
in relation to the Debtors.
The Ad Hoc Group of First Lien Lenders' address and the nature and
amount of disclosable economic interests held in relation to the
Debtors are:
1. Funds managed by Arena Capital Advisors, LLC and/or its
affiliates
12121 Wilshire Boulevard Suite 1010
Los Angeles, CA 90025
* First Lien Term Loans ($128,583,825.65)
2. Funds managed by Blue Owl Liquid Credit Advisors, LLC and/or its
affiliates
1 Greenwich Plaza Suite C, 2nd Floor
Greenwich, CT 06830
* First Lien Term Loans ($8,214,059.51)
3. Funds managed by CastleKnight Management LP and/or its
affiliates
888 Seventh Avenue 24 Floor
New York, NY 10019
* First Lien Term Loans ($6,516,202.00)
4. Certain funds and accounts managed by Fidelity Management &
Research Company LLC and/or its
affiliates
245 Summer Street
Boston, MA 02210
* First Lien Term Loans ($64,629,957.41)
5. Funds managed by Garnett Station Partners and/or its affiliates
450 Park Avenue 24th Floor
New York, NY 10022
* First Lien Term Loans ($95,460,727.68)
6. Funds managed by Guggenheim Partners Investment Management, LLC
and/or its affiliates
330 Madison Avenue
New York, NY 10017
* First Lien Term Loans ($108,906,198.44)
7. Funds managed by HG Vora Capital Management, LLC and/or its
affiliates
330 Madison Avenue 21st Floor
New York, NY 10017
* First Lien Term Loans ($227,951,319.13)
* Second Lien Term Loans ($9,375,000.00)
* HoldCo Term Loans ($38,842,803.63)
8. Funds managed by HPS Investment Partners, LLC and/or its
affiliates
40 West 57th Street 33rd Floor
New York, NY 10019
* First Lien Term Loans ($77,800,453.74)
9. Funds managed by LCM Asset Management LLC and/or its affiliates
399 Park Avenue 22nd Floor
New York, NY 10022
* First Lien Term Loans: $9,403,986.94
10. Funds managed by MJX Asset Management, LLC and/or its
affiliates
12 East 49th Street Floor 38
New York, NY 10017
* First Lien Term Loans ($11,911,203.47)
11. Funds managed by Monroe Capital LLC and/or its affiliates
311 South Wacker Drive Suite 6400
Chicago, IL 60606
* First Lien Term Loans ($8,011,015.95)
12. Funds managed by Oaktree Capital Management, L.P. and/or its
affiliates
333 South Grand Avenue 28th Floor
Los Angeles, CA 90071
* First Lien Term Loans ($71,344,091.88)
13. Funds managed by Octagon Credit Investors, LLC and/or its
affiliates
250 Park Avenue
New York, NY 10177
* First Lien Term Loans ($97,999,268.90)
14. Funds managed by Rimrock Capital Management, LLC and/or its
affiliates
100 Innovation Drive Suite 200
Irvine, CA 92617
* First Lien Term Loans ($6,512,500)
15. Funds managed by Saratoga Partners and/or its affiliates
535 Madison Avenue 4th Floor
New York, NY 10022
* First Lien Term Loans ($6,771,007.66)
Counsel to the Ad Hoc Group of First Lien Lenders:
LANDIS RATH & COBB LLP
Adam G. Landis, Esq.
Matthew B. McGuire, Esq.
Elizabeth A. Rogers, Esq.
919 Market Street, Suite 1800
Wilmington, Delaware 19801
Telephone: (302) 467-4400
Facsimile: (302) 467-4450
Email: landis@lrclaw.com
mcguire@lrclaw.com
erogers@lrclaw.com
- and -
PAUL HASTINGS LLP
Jayme T. Goldstein, Esq.
Daniel A. Fliman, Esq.
Jeremy Evans, Esq.
Isaac S. Sasson, Esq.
200 Park Avenue
New York, New York 10166
Telephone: (212) 318-6000
Facsimile: (212) 319-4090
Email: jaymegoldstein@paulhastings.com
danfliman@paulhastings.com
jeremyevans@paulhastings.com
isaacsasson@paulhastings.com
Nicholas A. Bassett, Esq.
2050 M Street NW
Washington, DC 20036
Telephone: (202) 551-1700
Facsimile: (202) 551-1705
Email: nicholasbassett@paulhastings.com
About Franchise Group
Franchise Group, Inc., through its subsidiaries, operates
franchised and franchisable businesses including The Vitamin
Shoppe, Pet Supplies Plus, LLC, Badcock Home Furniture & More,
American Freight, Buddy's Home Furnishings and Sylvan Learning
Systems, Inc.
Willkie Farr & Gallagher LLP and Young Conaway Stargatt & Taylor,
LLP are serving as legal counsel, AlixPartners is serving as
financial advisor and Chief Restructuring Officer, and Ducera
Partners is serving as investment banker to the Company. Paul
Hastings LLP is serving as legal counsel and Lazard is serving as
investment banker to the first lien ad hoc group.
As reported in the Troubled Company Reporter on Nov. 6, 2024,
Franchise Group, Inc. announced on Nov. 3, 2024, that it has
entered into a restructuring support agreement with holders of
approximately 80% of its first lien debt on a comprehensive
solution to strengthen FRG's capital structure and best position
its leading brands -- Pet Supplies Plus, The Vitamin Shoppe, and
Buddy's Home Furnishings -- for continued sustainable growth.
The RSA contemplates the proposed equitization of the first lien
debt into 100% of the equity in the reorganized enterprise, which
would substantially reduce the Company's debt, enhance liquidity,
and strengthen the enterprise for the benefit of Pet Supplies Plus,
The Vitamin Shoppe, and Buddy's Home Furnishings and their
stakeholders.
GOL LINHAS: Dechert Updates List of Abra Noteholders
----------------------------------------------------
In the Chapter 11 cases of GOL Linhas Aereas Inteligentes S.A., et
al., the Ad Hoc Group of Abra Noteholders filed a fourth verified
statement pursuant to Rule 2019 of the Federal Rules of Bankruptcy
Procedure.
The Ad Hoc Group submits this Fourth Verified Statement to update
the Ad Hoc Group's holdings of disclosable economic interest
currently held by its members, as of October 25, 2024.
On October 22, 2024, Abra redeemed all of its outstanding SSNs (as
defined in the Prior Verified Statements) which included all of the
SSN holdings of the Ad Hoc Group's members. On the same date, Abra
Global Finance issued the 2029 SSNs to various investors including
members of the Ad Hoc Group.
As a result, as of October 25, 2024, the members of the Ad Hoc
Group beneficially own or manage (or are the investment advisors or
managers for funds or accounts that beneficially own or manage)
approximately $486,639,572 million in principal amount of Abra
Notes, including $141,391,973 million in principal amount of 2029
SSNs and $345,247,599 million in principal amount of SSENs.
As of October 25, 2024, Dechert continues to advise members of the
Ad Hoc Group that collectively hold (or are the investment advisors
or managers for funds or accounts that hold) approximately
$589,720,063 million in principal amount of DIP Notes.
Dechert does not undertake to represent the interests of any
creditor, party in interest, or other entity other than the Ad Hoc
Group. No member of the Ad Hoc Group represents or purports to
represent any other member in connection with the Debtors' chapter
11 cases. In addition, each member of the Ad Hoc Group (a) does not
assume any fiduciary or other duties to any other member of the Ad
Hoc Group and (b) does not purport to act or speak on behalf of any
other member of the Ad Hoc Group in connection with these chapter
11 cases.
The names and addresses of each of the members of the Ad Hoc Group
of Abra Noteholders, together with the nature and amount of the
disclosable economic interests held by each of them in relation to
the Debtors, are as follows:
1. Certain funds and accounts managed or advised by
AMUNDI ASSET MANAGEMENT US, INC.
60 State Street
Boston, MA 02109
* Senior Secured Notes due 2029 ($73,385,949)
* Senior Secured Exchangeable Notes due 2028 ($898,385)
2. AMUNDI (UK) LIMITED, acting solely in its capacity as
investment manager for and on behalf of certain funds
it manages that hold Abra Notes
77 Coleman Street
London, EC2R 5BJ United Kingdom
* Senior Secured Notes due 2028 ($33,587,068)
3. Certain funds and accounts managed or advised by
BLACKROCK FINANCIAL MANAGEMENT, INC.-FIXED INCOME
GROUP
50 Hudson Yards
New York, NY 10001
* Senior Secured Notes due 2028 ($53,000,000).
* DIP Notes ($12,419,417)
4. Certain funds and accounts managed or advised by
CARRONADE CAPITAL MANAGEMENT, LP
17 Old Kings Highway South, Suite 140
Darien, CT 06820
* Senior Secured Notes due 2028 ($52,813,409)
* Abra Common Shares (13,547,889 shares)
* DIP Notes ($49,167,959)
5. Certain funds and accounts managed or advised by
FORTRESS INVESTMENT GROUP LLC
1345 Avenue of the Americas 26th Floor
New York, NY 10105
* Senior Secured Exchangeable Notes due 2028
($56,765,622)
* Abra Common Shares (24,750,013 shares)
* DIP Notes ($39,356,046)
6. Certain funds and accounts managed by GLENDON CAPITAL
MANAGEMENT L.P.
2425 Olympic Blvd.
Suite 500E
Santa Monica, CA 90404
* Senior Secured Exchangeable Notes due 2028
($8,423,618)
* DIP Notes ($90,361,360)
7. Certain funds and accounts managed or advised by GLG
PARTNERS LIMITED, in its capacity as investment manager
or sub-investment manager (as applicable), on behalf of
certain funds
Riverbank House, 2 Swan Lane
London EC4R 3AD, United Kingdom
* Senior Secured Exchangeable Notes due 2028
($$90,136,226)
* DIP Notes ($10,455,416)
8. Certain funds and accounts managed or advised by KING
STREET CAPITAL MANAGEMENT
299 Park Avenue, 40th Floor
New York, NY 10171
* DIP Notes ($57,757,290)
9. MOORE GLOBAL INVESTMENTS, LLC
11 Times Square
New York, NY 10036
* Senior Secured Notes due 2029 ($10,000,000)
* Senior Secured Exchangeable Notes due 2028
($6,973,182)
10. Certain funds and accounts managed or advised by NUT
TREE CAPITAL MANAGEMENT, LP
55 Hudson Yards
New York, NY 10001
* DIP Notes ($46,969,249)
11. Certain funds and accounts managed or advised by
OAKTREE CAPITAL MANAGEMENT, L.P.
333 S. Grand Ave., 28th Floor
Los Angeles, CA 90071
* DIP Notes ($86,636,995)
12. Certain funds and accounts managed or advised by
OLYMPUS PEAK ASSET MANAGEMENT LP
177 West Putnam Ave Suite 2622-S1
Greenwich, CT 06831
* Senior Secured Exchangeable Notes due 2028
($21,659,925)
* Abra Common Shares (ADS) (2,722,276 shares)
* DIP Notes ($22,681,340)
13. Certain funds and accounts managed or advised by
REDWOOD CAPITAL MANAGEMENT, LLC
250 West 55th Street, Floor 26
New York, NY 10019
* DIP Notes ($51,771,283)
14. Certain funds and accounts managed or advised by
CAPITAL VENTURES INTERNATIONAL C/O SUSQUEHANNA ADVISORS
GROUP, INC.
401 City Avenue, Suite 220
Bala Cynwyd, PA 19004
* Senior Secured Exchangeable Notes due 2028
($74,700,021)
* DIP Notes ($54,687,461)
15. VR GLOBAL PARTNERS, L.P.
One Nexus Way, Camana Bay
Grand Cayman, KY1-9005, Cayman Islands
c/o VR Advisory Services (USA) LLC,
601 Lexington Avenue 59th Floor
New York, NY 10022
* Senior Secured Exchangeable Notes due 2028
($32,674,224)
* Abra Common Shares (1,272,329 shares)
* GOL Notes due 2026 ($31,588,000)
Counsel to the Ad Hoc Group of Abra Noteholders:
Allan S. Brilliant, Esq.
DECHERT LLP
1095 Avenue of the Americas
New York, NY 10036-6797
Email: allan.brilliant@dechert.com
Tel: (212) 698-3500
Fax: (212) 698-3599
About Gol GOLL4.SA
GOL Linhas Aereas Inteligentes S.A. provides scheduled and
non-scheduled air transportation services for passengers and cargo;
and maintenance services for aircrafts and components in Brazil and
internationally. The company offers Smiles, a frequent-flyer
programs to approximately 20.5 million members, allowing clients to
accumulate and redeem miles. It operates a fleet of 146 Boeing 737
aircraft with 674 daily flights. The company was founded in 2000
and is headquartered in Sao Paulo, Brazil.
GOL Linhas Aereas Inteligentes S.A. and its affiliates and its
subsidiaries voluntarily filed for Chapter 11 protection (Bankr.
S.D.N.Y. Lead Case No. 24-10118) on Jan. 25, 2024.
GOL Linhas estimated $1 billion to $10 billion in assets as of the
bankruptcy filing.
The Debtors tapped MILBANK LLP as counsel, SEABURY SECURITIES LLC
as restructuring advisor, financial advisor and investment banker,
ALIXPARTNERS, LLP, as financial advisor, and HUGHES HUBBARD & REED
LLP as aviation related counsel. KROLL RESTRUCTURING
ADMINISTRATION LLC is the claims agent.
HARRISON ENTERPRISES: Advised by SSG in Sale of Nursing Facilities
------------------------------------------------------------------
SSG Capital Advisors, LLC ("SSG") served as the investment banker
to Harrison Enterprises Limited Partnership and Affiliates
("Harrison Senior Living" or the "Company") in the sale of its
skilled nursing facilities to an affiliate of Emerald HCG LLC
("Emerald Group"). The transaction closed in October 2024.
Founded in 1972, Harrison Senior Living is a licensed,
multi-facility provider of skilled nursing care, assisted living,
and related health services. The Company operates four facilities
(two skilled nursing and two assisted living) located in Delaware,
Maryland and Pennsylvania. The Company's continuum of care,
experienced team of healthcare professionals, and high quality
community-centered services have made Harrison Senior Living a
trusted provider of senior living and care solutions.
SSG was retained to conduct a sale process for the Company's
facilities. Leveraging its significant experience in the healthcare
sector, SSG canvassed a wide range of investors, attracting
significant interest from strategic and financial acquirers.
Following an extensive marketing effort, the Company received
acquisition offers for individual facilities as well as the entire
platform. Ultimately, the sale of Harrison Senior Living's skilled
nursing facilities to an affiliate of Emerald Group proved to be
the best outcome for the Company's shareholders.
SSG's experience working with healthcare companies and expertise
running competitive sale processes enabled the Company to maximize
value and partner with a reliable industry leader to steward the
next phase of growth.
Emerald Group manages a large and growing footprint of senior
living communities that offer a vast array of senior care
services.
Other professionals who worked on the transaction include:
Herbert R. Fineburg, Joseph M. Armstrong, and Suzan A. Kramer of
Offit Kurman, P.A., counsel to Harrison Senior Living; and Daniel
A. Gottesman, Raymond D. Seiler, and Michael L. Gurman of UB
Greensfelder, LLP, counsel to Emerald Group.
HOME MARKETING: Unsecureds to Get $5K per Month for 5 Years
-----------------------------------------------------------
Home Marketing Services, Inc. filed with the U.S. Bankruptcy Court
for the Northern District of Texas a Plan of Reorganization dated
September 25, 2024.
The Debtor operates a real property marketing business that is
focused on serving the needs of first-time homeowners. This case
was filed to address the possibility of a negative ruling in
connection with a contingent, disputed and unliquidated tort
claim.
The Plan provides for a reorganization and restructuring of the
Debtor's financial obligations.
The Plan provides for a distribution to Creditors in accordance
with the terms of the Plan from the Debtor over the course of five
years from the Debtor's continued business operations.
Class 3 consists of Non-priority unsecured Claims. Each holder of
an Allowed Unsecured Claim in Class 3 shall be paid by Reorganized
Debtor from an unsecured creditor pool, which pool shall be funded
at the rate of $5,000.00 per month. Payments from the unsecured
creditor pool shall be paid quarterly, for a period not to exceed
five years (20 quarterly payments) and the first quarterly payment
will be due on the twentieth day of the first full calendar month
following the last day of the first quarter.
The Debtor estimates the aggregate of all Allowed Class 3 Claims is
approximate $720,000.00 based upon Debtor's review of the Court’s
claim register, Debtor's bankruptcy schedules, and anticipated
Claim objections. This Class is impaired.
Class 4 consists of the holders of Allowed Interests in the Debtor.
The holder of an Allowed Class 4 Interest shall retain their
interests in the Reorganized Debtor.
The Debtor proposes to implement and consummate this Plan through
the means contemplated by Sections 1123 and 1145(a) of the
Bankruptcy Code.
A full-text copy of the Plan of Reorganization dated September 25,
2024 is available at https://urlcurt.com/u?l=N1MkxE from
PacerMonitor.com at no charge.
Counsel to the Debtor:
Robert T. DeMarco, Esq.
Michael S. Mitchell, Esq.
DeMarco Mitchell, PLLC
12770 Coit Road, Suite 850
Dallas, TX 75251
Tel: (972) 578-1400
Fax: (972) 346-6791
Email: robert@demarcomitchell.com
mike@demarcomitchell.com
About Home Marketing Services
Home Marketing Services, Inc. operates a real property marketing
business that is focused on serving the needs of first-time
homeowners.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Texas Case No. 24-31865) on June 27,
2024, with $100,001 to $500,000 in assets and $500,001 to $1
million in liabilities.
Robert Thomas DeMarco, Esq., represents the Debtor as legal
counsel.
IMERYS TALC: Fine-Tunes Plan Documents
--------------------------------------
Imerys Talc America, Inc. and Its Debtor Affiliates submitted a
Revised Second Disclosure Statement describing Revised Second Joint
Plan of Reorganization dated September 27, 2024.
Pursuant to the Plan, a Talc Personal Injury Trust will be
established that will comply in all respects with the requirements
of section 524(g)(2)(B)(i) and any other applicable provisions of
the Bankruptcy Code, and assume all Talc Personal Injury Claims.
The Talc Personal Injury Trust will be funded with the Talc
Personal Injury Trust Assets in order to resolve Talc Personal
Injury Claims in accordance with the Talc Personal Injury Trust
Documents.
Moreover, remaining proceeds from the Sale will be used to fund the
Talc Personal Injury Trust in accordance with the terms of the
Plan. As further described in this Disclosure Statement, the Talc
Personal Injury Trust will manage the Talc Personal Injury Trust
Assets, and liquidate such assets to enable it to resolve Talc
Personal Injury Claims pursuant to the Trust Distribution
Procedures.
Under the Plan, holders of Allowed Unsecured Claims against the
North American Debtors that are not Talc Personal Injury Claims
will be paid in full.
The Debtors, Imerys S.A., Cyprus, the Tort Claimants' Committee,
the Cyprus Tort Claimants' Committee, the FCR, nd the Cyprus FCR,
and, solely with respect to certain sections of the settlement
agreement, Rio Tinto and Zurich, entered into a settlement with the
J&J Settling Parties (the "J&J Settlement"), which effects a
compromise and settlement of (i) the existence and scope of any
obligation of the J&J Corporate Parties to indemnify the Debtors,
Cyprus and related parties under the J&J Agreements, (ii) the
existence and scope of any obligation of the Debtors, Cyprus and
related parties to indemnify the J&J Corporate Parties under the
J&J Agreements, (iii) claims the parties to the J&J Settlement may
have against each other relating to the J&J Agreements or otherwise
related to the supply of talc by the Debtors and/or Cyprus to any
J&J Corporate Party, and (iv) other claims the parties subject to
the J&J Settlement may have against each other arising out of or
relating to the Talc Personal Injury Claims.
On September 20, 2024, Red River Talc LLC, a successor of LLT,
filed for chapter 11 protection in the Bankruptcy Court for the
Southern District of Texas. Red River claims that 83% of talc
creditors voted in favor of its plan. There is currently a dispute
as to whether the case should proceed in Texas or New Jersey and a
group of talc creditors that voted against the Red River plan has
filed a motion to dismiss the bankruptcy case.
On September 20, 2024, the Debtors and Cyprus Mines filed the
Amended and Restated Settlement Agreement and Release (the "J&J
Settlement Agreement"). The J&J Settlement Agreement contemplates,
among other things, (i) a settlement payment from the J&J Settling
Parties in the aggregate amount of $225 million (the "J&J Initial
Payment"), (ii) a contribution from the J&J Corporate Parties of
the first $200 million and 50% of the next $160 million of
insurance proceeds recovered under the J&J Policies (subject to an
aggregate capped guarantee of $280 million and certain other
limitations) (the "J&J Insurance Payments"), and (iii) contribution
of the entirety of the Home Proceeds (collectively, (i), (ii), and
(iii), the "J&J Payment Obligations").
Like in the prior iteration of the Plan, Class 3a Unsecured Claims
Against the North American Debtors. Creditors will recover 100% of
their claims. Each holder of an Allowed Unsecured Claim against the
North American Debtors will be paid the Allowed Amount of its
Unsecured Claim on the Distribution Date. Such payment will be (i)
in full, in Cash, plus post petition interest at the federal
judgment rate in effect on the Petition Date, or (ii) upon such
other less favorable terms as may be mutually agreed upon between
the holder of the Unsecured Claim and the applicable North American
Debtor or Reorganized North American Debtor. Class 3a is
unimpaired.
Class 3b Unsecured Claims Against ITI. Creditors will recover 100%
of their claims. The legal, equitable, and contractual rights of
the holders of Unsecured Claim against ITI are unaltered by the
Plan. Except to the extent that a holder of an Unsecured Claim
against ITI agrees to a different treatment, on and after the
Effective Date, Reorganized ITI will continue to pay or dispute
each Unsecured Claim in the ordinary course of business in
accordance with applicable law. Class 3b is unimpaired.
All Cash consideration necessary for payments or distributions on
account of the North American Debtor Claims shall be obtained from
(i) the Cash on hand of the North American Debtors on the Effective
Date, including Cash derived from business operations, (ii) the
Sale Proceeds, and (iii) the Imerys Cash Contribution.
All Cash consideration necessary for payments or distributions on
account of Talc Personal Injury Claims shall be obtained from (i)
the Cash on hand of the North American Debtors on the Effective
Date or the post-Effective Date proceeds from the business
operations of the Reorganized North American Debtors or the sale of
the Purchased Properties, other than the Cash placed in the
Reserves, if any, (ii) the Imerys Settlement Funds, (iii) the
amount of the Imerys Cash Contribution, after such funds have been
disbursed in accordance with the Plan; (iv) all Cash remaining in
the Reserves, if applicable; (v) all proceeds from the Talc
Personal Injury Trust Assets; (vi) the Rio Tinto/Zurich
Contribution; (vii) the Cyprus Contributions; (viii) the XL
Contribution; and (ix) the J&J Settlement Proceeds.
All Cash consideration necessary for payments or distributions
under the Plan on account of ITI Claims, for the avoidance of
doubt, other than Talc Personal Injury Claims, shall be obtained
from the Cash on hand at Reorganized ITI.
A full-text copy of the Revised Disclosure Statement dated
September 27, 2024 is available at https://urlcurt.com/u?l=YNJhiI
from Prime Clerk, LLC, the claims agent.
Counsel for the Debtors:
Mark D. Collins, Esq.
Michael J. Merchant, Esq.
Amanda R. Steele, Esq.
RICHARDS, LAYTON & FINGER, P.A.
One Rodney Square
920 North King Street
Wilmington, DE 19801
Tel: (302) 651-7700
Fax: (302) 651-7701
E-mail: collins@rlf.com
merchant@rlf.com
steele@rlf.com
-and-
Jeffrey E. Bjork, Esq.
Kimberly A. Posin, Esq.
Helena G. Tseregounis, Esq.
Shawn P. Hansen, Esq.
LATHAM & WATKINS LLP
355 South Grand Avenue, Suite 100
Los Angeles, CA 90071-1560
Tel: (213) 485-1234
Fax: (213) 891-8763
E-mail: jeff.bjork@lw.com
kim.posin@lw.com
helena.tseregounis@lw.com
shawn.hansen@lw.com
Counsel for the Tort Claimants' Committee:
Natalie D. Ramsey, Esq.
Mark A. Fink, Esq.
ROBINSON & COLE LLP
1201 North Market Street, Suite 1406
Wilmington, Delaware 19801
Telephone: (302) 516-1700
Facsimile: (302) 516-1699
E-mail: nramsey@rc.com
mfink@rc.com
- and -
Michael R. Enright, Esq.
ROBINSON & COLE LLP
280 Trumbull Street
Hartford, CT 06103
Tel: (860) 275-8290
Fax: (860) 275-8299
E-mail: menright@rc.com
Counsel for the Future Claimants' Representative:
Robert S. Brady, Esq.
Edwin J. Harron, Esq.
Sharon M. Zieg, Esq.
YOUNG CONAWAY STARGATT &
TAYLOR LLP
Rodney Square
1000 North King Street
Wilmington, DE 19801
Telephone: (302) 571-6600
Facsimile: (302) 571-1253
E-mail: rbrady@ycst.com
eharron@ycst.com
szieg@ycst.com
Counsel for Imerys S.A. and the Persons Listed on Schedule II of
the Plan:
Christopher Kiplok, Esq.
Erin Diers, Esq.
HUGHES HUBBARD & REED LLP
One Battery Park Plaza
New York, NY 10004
Tel: (212) 837-6000
Fax: (212) 422-4726
E-mail: christopher.kiplok@hugheshubbard.com
erin.diers@hugheshubbard.com
About Imerys Talc America
Imerys Talc America, Inc. and its subsidiaries --
https://www.imerys-performance-additives.com/ -- are in the
business of mining, processing, selling and distributing talc. Its
talc operations include talc mines, plants and distribution
facilities located in Montana (Yellowstone, Sappington, and Three
Forks); Vermont (Argonaut and Ludlow); Texas (Houston); and
Ontario, Canada (Timmins, Penhorwood, and Foleyet). It also
utilizes offices located in San Jose, Calif., and Roswell, Ga.
Imerys Talc America and its subsidiaries, Imerys Talc Vermont,
Inc., and Imerys Talc Canada Inc., sought Chapter 11 protection
(Bankr. D. Del. Lead Case No. 19-10289) on Feb. 13, 2019. The
Debtors were estimated to have $100 million to $500 million in
assets and $50 million to $100 million in liabilities as of the
bankruptcy filing.
Judge Laurie Selber Silverstein oversees the cases.
The Debtors tapped Richards, Layton & Finger, P.A., and Latham &
Watkins LLP as their legal counsel, Alvarez & Marsal North America,
LLC as financial advisor, and CohnReznick LLP as restructuring
advisor. Prime Clerk, LLC, is the claims agent.
The U.S. Trustee for Region 3 appointed an official committee of
tort claimants in the Debtors' Chapter 11 cases. The tort
claimants' committee is represented by Robinson & Cole, LLP.
IN PHAZE ELECTRIC: Gets OK to Use Cash Collateral Thru Nov 20
-------------------------------------------------------------
In Phaze Electric, Inc. received interim approval from the U.S.
Bankruptcy Court for the Middle District of Florida, Orlando
Division to use the cash collateral of its secured creditors
through Nov. 20.
The interim order authorized In Phaze Electric to use cash
collateral to pay expenses, including payments to the Subchapter V
trustee, payroll and other necessary expenses outlined in its
projected budget. The budget shows total projected expenses of
$294,629.34 for the period from Sept. 21 to Dec. 9.
Secured creditors will be granted replacement liens on cash
collateral to the same extent and with the same validity and
priority as their pre-bankruptcy liens.
The next hearing is scheduled for Nov. 20.
About In Phaze Electric
In Phaze Electric Inc. operates as a commercial electrical and
maintenance services company. It specializes in dry utility
planning coordination, design, and construction services. The
company serves private developers, government agencies, utilities,
builders, architects, and engineers in the United States.
In Phaze Electric filed a petition under Chapter 11, Subchapter V
of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 24-03409) on July
3, 2024, with $100,000 to $500,000 in assets and
$1 million to $10 million in liabilities. L. Todd Budgen, Esq., a
practicing attorney in Longwood, Fla., serves as Subchapter V
trustee.
Judge Lori V. Vaughan presides over the case.
Daniel A. Velasquez, Esq., at Latham, Luna, Eden & Beaudine, LLP
represents the Debtor as legal counsel.
INNOVATE CORP: Registers 950K Shares for 2014 Omnibus Equity Plan
-----------------------------------------------------------------
Innovate Corp. filed a Registration Statement on Form S-8 with the
U.S. Securities and Exchange Commission for the purpose of
registering an additional 950,000 shares of common stock, par value
$0.001 per share, of the Company that may be offered or sold to the
participants of the INNOVATE Corp. Second Amended and Restated 2014
Omnibus Equity Award Plan.
The additional shares are in addition to the Common Stock
previously registered for issuance on the Company's Registration
Statements on Form S-8 filed with the Securities and Exchange
Commission on:
* September 12, 2014 - Reg. No. 333-198727,
* June 19, 2017 - Reg. No. 333-218835 and
* May 3, 2018 - Reg. No. 333-224657 pursuant to General
Instruction E to Form S-8.
A full-text copy of the Registration Statement is available at:
https://tinyurl.com/5yfbac4b
About Innovate
New York-based Innovate Corp. -- innovatecorp.com -- is a
diversified holding company that has a portfolio of subsidiaries in
a variety of operating segments. The Company seeks to grow these
businesses so that they can generate long-term sustainable free
cash flow and attractive returns in order to maximize value for all
stakeholders. As of Dec. 31, 2023, its three operating platforms or
reportable segments, based on management's organization of the
enterprise, are Infrastructure, Life Sciences, and Spectrum, plus
its Other segment, which includes businesses that do not meet the
separately reportable segment thresholds.
Innovate incurred a net loss of $38.9 million in 2023, compared to
a net loss of $42 million in 2022. As of June 30, 2024, Innovate
Corp. had $898.9 million in total assets, $1.01 billion in total
liabilities, $15.9 million in total temporary equity, and a total
stockholders' deficit of $126.1
million.
* * *
In May 2024, S&P Global Ratings lowered its issuer credit rating on
Innovate Corp. to 'CCC' from 'CCC+' and its rating on the company's
senior notes due 2026 to 'CCC+' from 'B-'. The recovery rating on
the notes remains '2′, indicating its expectation for meaningful
(75%) recovery in the event of a default. The negative outlook
reflects S&P's view that the company's liquidity will be under
stress in the next six to 12 months, such that sources are unlikely
to meet uses absent any unforeseen positive developments.
The downgrade indicates S&P Global Ratings' view that Innovate's
liquidity will be strained for the next six to 12 months and that
the risk of its failure to make interest payments has increased. As
of March 31, 2024, the company had corporate-level cash and
equivalents of $9.2 million and was fully drawn on its $20 million
line of credit. While the company receives cash flows from dividend
payments and tax share agreements from its subsidiary DBM Global
Inc., S&P believes it may be strained to make the $39 million in
interest payments on its corporate-level debt over the next 12
months.
INNOVATIVE DESIGNS: CEO Riccelli Joseph Holds 50,000 shares
-----------------------------------------------------------
Riccelli A. Joseph, Chief Executive Officer of Innovative Designs,
Inc., filed a Form 3 Report with the U.S. Securities and Exchange
Commission, disclosing direct beneficial ownership of 50,000 shares
of the Company.
A full-text copy of Mr. Joseph's SEC Report is available at:
https://tinyurl.com/5n98n544
About Innovative Designs
Headquartered in Pittsburgh, Pennsylvania, Innovative Designs, Inc.
operates in two separate business segments: a house wrap for the
building construction industry and cold weather clothing. Both of
the Company's segment lines use products made from Insultex, which
is a low-density polyethylene semi-crystalline, closed cell foam in
which the cells are totally evacuated, with buoyancy, scent block,
and thermal resistant properties.
Kennett Square, Pa.-based RW Group, LLC, the Company's auditor
since 2021, issued a "going concern" qualification in its report
dated Feb. 22, 2024, citing that the Company had net losses and
negative cash flows from operations for the years ended Oct. 31,
2023, and 2022 and an accumulated deficit at Oct. 31, 2023, and
2022. These factors raise substantial doubt about the Company's
ability to continue as a going concern for one year from the
issuance date of these financial statements.
Innovative Designs reported a net loss of $301,378 for the year
ended Oct. 31, 2023, compared to a net loss of $225,489 for the
year ended Dec. 31, 2022. As of April 30, 2024, Innovative Designs
had $1.58 million in total assets, $274,172 in total liabilities,
and $1.30 million in total stockholders' equity.
INTEGRITY GENERAL: Voluntary Chapter 11 Case Summary
----------------------------------------------------
Debtor: Integrity General Contractors, LLC
615 Six Flags Drive
Arlington, TX 76011
Business Description: Integrity General is a full-service
commercial construction company.
Chapter 11 Petition Date: November 10, 2024
Court: United States Bankruptcy Court
Northern District of Texas
Case No.: 24-33645
Debtor's Counsel: John P. Lewis, Jr., Esq.
HAYWARD PLLC
10501 N. Central Expressway
Suite 106
Dallas, TX 75231
Tel: 972-755-7100
Fax: 972-755-7110
E-mail: jplewis@haywardfirm.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Jon O. Pope as managing member.
The Debtor failed to attach to 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/CWPRNIQ/Integrity_General_Contractors__txnbke-24-33645__0001.0.pdf?mcid=tGE4TAMA
JEBB FOOD: Neema Varghese Named Subchapter V Trustee
----------------------------------------------------
The U.S. Trustee for Region 11 appointed Neema Varghese of NV
Consulting Services as Subchapter V trustee for Jebb Food Services,
Inc.
Ms. Varghese will be paid an hourly fee of $400 for her services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Ms. Varghese declared that she is a disinterested person according
to Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Neema T. Varghese
NV Consulting Services
701 Potomac, Ste. 100
Naperville, IL 60565
Tel: (630) 697-4402
Email: nvarghese@nvconsultingservices.com
About Jebb Food Services
Jebb Food Services Inc. is the owner of 21 properties located in
Chicago, Ill., having a total appraised value of $3.07 million.
Jebb Food Services sought relief under Subchapter V of Chapter 11
of the U.S. Bankruptcy Code (Bankr. N.D. Ill. Case No. 24-15863) on
October 23, 2024, with total assets of $3,302,156 and total
liabilities of $1,977,800. Demetrio Cardone, president of Jebb Food
Services, signed the petition.
Judge Timothy A. Barnes handles the case.
The Debtor is represented by Richard G Larsen, Esq., at
SpringerLarsen, LLC.
JOHN STREET: Case Summary & Eight Unsecured Creditors
-----------------------------------------------------
Debtor: John Street Associates, LLC
4 John Street
Bldg B
Morristown, NJ 07960
Chapter 11 Petition Date: November 7, 2024
Court: United States Bankruptcy Court
District of New Jersey
Case No.: 24-21112
Judge: Hon. Stacey L. Meisel
Debtor's Counsel: Joseph M. Casello, Esq.
COLLINS, VELLA & CASELLO, LLC
2317 Route 34, Suite 1A
Manasquan, NJ 08736
Tel: 732-751-1766
E-mail: jcasello@cvclaw.net
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Anthony D'Auria as managing member.
A full-text copy of the petition containing, among other items, a
list of the Debtor's eight unsecured creditors is available for
free at PacerMonitor.com at:
https://www.pacermonitor.com/view/MQ3MJVA/John_Street_Associates_LLC__njbke-24-21112__0001.0.pdf?mcid=tGE4TAMA
JOP3 DEVELOPMENT: Voluntary Chapter 11 Case Summary
---------------------------------------------------
Debtor: JOP3 Development, LLC
199 Brookstone Court
Waxahachie, TX 75165
Business Description: JOP3 Development is a Single Asset Real
Estate debtor (as defined in 11 U.S.C.
Section 101(51B)).
Chapter 11 Petition Date: November 10, 2024
Court: United States Bankruptcy Court
Northern District of Texas
Case No.: 24-33644
Debtor's Counsel: John P. Lewis, Jr., Esq.
HAYWARD PLLC
10501 N. Central Expressway
Suite 106
Dallas, TX 75231
Tel: 972-755-7100
E-mail: jplewis@haywardfirm.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Jon O. Pope, III, managing member.
The Debtor failed to incorporate 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/CMYUVPY/JOP3_Development_LLC__txnbke-24-33644__0001.0.pdf?mcid=tGE4TAMA
JORDAN HEALTH: Judge Agrees to Approve Chapter 11 Financing
-----------------------------------------------------------
Emily Lever of Law360 reports that a Delaware bankruptcy judge
authorized debtor-in-possession financing for Jordan Health, the
parent company of Avante Health, a medical equipment service
provider, following an agreement between the debtor, the DIP
lender, and the official committee of unsecured creditor.
About Jordan Health Products
Jordan Health Products I, Inc., doing business as Avante Health
Solutions, is a provider of medical equipment solutions, selling
new and refurbished equipment, parts, service, support, and
training to healthcare facilities worldwide. Several Avante
businesses act as independent service organizations ("ISO") for
various medical facilities to provide maintenance and support
services for equipment manufactured and produced by other
companies
(known as original equipment manufacturers, or "OEMs").
Jordan Health Products I, Inc. and its affiliates sought protection
under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead
Case No. 24-12271) on Oct. 8, 2024. In the petitions signed by Rob
Hubbard, chief restructuring officer, the Debtors disclosed up to
$100 million in estimated assets and up to $500 million in
estimated liabilities.
The Debtors tapped Polsinelli PC as counsel, Riveron Management
Services, LLC as restructuring advisor, and Livingstone Partners
LLC as investment banker. Omni Agent Solutions, Inc., is the
Debtors' notice, claims, and balloting agent.
KARBONX CORP: Inks Advertising and Promotional Deal With Oilers
---------------------------------------------------------------
Karbon-X Corp. disclosed in a Form 8-K Report filed with the U.S.
Securities and Exchange Commission that effective October 25, 2024,
the Company entered into an Advertising & Promotional Agreement
with the Oilers Entertainment Group Canada Corp., pursuant to
which, among other advertising promotional features, the Karbon-X
logo will be featured on the Oilers away jerseys for each road game
through the 2026-27 season.
The agreement also grants Karbon-X:
(i) a non-exclusive right to incorporate the logos of the
Oilers in the Oilers home territory,
(ii) arena digital signage for each Oilers home game, each Oil
Kings home game and each event on the video walls that are part of
the arena;
(iii) an in-ice fixed sign displaying the Karbon-X logo,
(iv) exposure on the two LED rings on the scoreboard,
(v) virtual dasherboard advertising exposure both for home and
away games;
(vi) twenty ten second drop ins scheduled during the Oilers
regionally televised regular season hockey games;
(vii) slot virtual signage visible to television audiences for
three minutes during game time;
(viii) Oiler's E blasts in an e-newsletter communication
promoting Oilers related consumer offers;
(ix) digital social media support;
(x) use of a suite for an oilers home game; and
(xi) participation in the Oilers 50/50 raffle as a sponsor.
About Karbon-X
Calgary, Canada-based Karbon-X Corp. provides customized
transactional options, tailored insights, and scalable access to
the Verified Emissions Reduction markets.
As of August 31, 2024, Karbon-X had $3,288,372 in total assets,
$139,000 in total liabilities, and $3,149,372 in total
stockholders' equity.
Going Concern
To date, the Company has generated minimal revenues from its
business operations and has incurred operating losses since
inception of $5,742,108. The Company will require additional
funding to meet its ongoing obligations and to fund anticipated
operating losses. The ability of the Company to continue as a going
concern is dependent on raising capital to fund its initial
business plan and ultimately to attain profitable operations.
Accordingly, these factors raise substantial doubt as to the
Company's ability to continue as a going concern. The Company
intends to continue to fund its business by way of private
placements and advances from related parties as may be required.
These financial statements do not include any adjustments relating
to the recoverability and classification of recorded asset amounts
or amounts and classification of liabilities that might result from
this uncertainty.
MAJESTIC CHARTERS: Unsecureds Will Get 100% of Claims in Plan
-------------------------------------------------------------
Majestic Charters, LLC, filed with the U.S. Bankruptcy Court for
the Eastern District of Texas a Disclosure Statement in support of
Plan of Reorganization dated September 25, 2024.
Majestic Charters LLC, d/b/a Majestic Transportation & Shuttle
Service is a Christian based Texas Corporation that provides
primarily school bus home to school transportation and other group
transportation and charters in Houston and Metropolitan areas.
On the Effective Date, all property of the Debtor's bankruptcy
estate will vest in the Debtor, as the Reorganized Debtor, free and
clear of all liens, claims and encumbrances, except as may be
provided by the Plan. The Reorganized Debtor will thereupon be
authorized to conduct the continued use of their asset as set forth
herein to generate funds to pay all Creditors an amount of their
Allowed Claims. The Plan does not propose to modify or supplant any
federal or state laws or regulations that may be applicable to the
Reorganized Debtor.
As of the Effective Date of the Plan, the Reorganized Debtor will
be responsible for all payments and distributions to be made under
the Plan to the holders of Allowed Claims, together with any
payments that become due under any executory contract or unexpired
lease assumed by the Debtor or the Reorganized Debtor. Each
executory contract and unexpired lease to which the Debtor is
determined to be a party shall be deemed rejected unless the Debtor
expressly assumes a particular executory contract or lease on or
before the Effective Date.
Class 4 consists of Non-Priority General Unsecured Claims. These
non-priority general unsecured creditors will be paid a total of
$953.01 per month on a pro rata basis for 60 months, with the first
monthly payment being due and payable on the 15th day of the first
full month following 60 days after the confirmation hearing. All
allowed unsecured claims will be paid in class 4. The remaining
balance due these creditors at the end of the 60 months will be
discharged. The creditors in this class, excluding disputed
creditors, equal approximately $57,180.32. In the event disputed
creditors file an allowed proof of claim, this class shall be
amended to treat those claims. It is anticipated that the payout to
unsecured creditors will be 100%. The Class 4 Claims are impaired.
Class 5 consists of Equity Interest Owners. Evan and Harold Gentry
are the 75-25% owners of Majestic Charters, LLC respectively. If
they are owed any money from Majestic Charters, LLC they will wait
and allow the creditors to get paid first before the owners get
paid any money. All membership interest in the Reorganized Debtor
shall remain with the Reorganized Debtor until all claims are paid
under the plan. Once all claims are paid in full, Evan Gentry and
Harold Gentry shall determine the distribution of the Reorganized
Debtor's membership interests according to a revised partnership
agreement to be prepared in conjunction with the distribution of
the membership interests in the Reorganized Debtor
Pursuant to the provisions of Sections 1141(b) and 1141(c) of the
Bankruptcy Code, all assets of the Debtor that remain will vest in
the Reorganized Debtor on the Effective Date free and clear of all
Claims, Liens, encumbrances, charges and other interests of the
holders of Claims and Equity Interests, except as otherwise
provided in the Plan.
A full-text copy of the Disclosure Statement dated September 25,
2024 is available at https://urlcurt.com/u?l=Q3fLa7 from
PacerMonitor.com at no charge.
Proposed Attorneys for the Debtor:
Julie M. Koenig, Esq.
Cooper & Scully, PC
815 Walker St., Suite 1040
Houston, TX 77002
Tel: (713) 236-6800
Fax: (713) 236-6880
Email: julie.koenig@cooperscully.com
About Majestic Charters, LLC
Majestic Charters LLC, is a Christian based Texas Corporation that
provides primarily school bus home to school transportation and
other group transportation and charters in Houston and Metropolitan
areas.
The Debtor filed a Chapter 11 bankruptcy petition (Bankr. E.D. Tex.
Case No. 24-10135) on March 29, 2024, disclosing under $1 million
in both assets and liabilities. The Debtor is represented by
CHANDLER ANDERSON & ASSOCIATES PLLC.
MCCONNELL ROAD SOUTH: Seeks Bankruptcy Protection in North Carolina
-------------------------------------------------------------------
McConnell Road South -- GSO LLC filed Chapter 11 protection in the
Eastern District of North Carolina. According to court documents,
the Debtor reports between $10 million and $50 million in debt owed
to 1 and 49 creditors. The petition states that funds will be
available to unsecured creditors.
A meeting of creditors under 11 U.S.C. Section 341(a) is slated for
November 27, 2024 at 10:00 a.m. at Greenville 341 Meeting Room.
About McConnell Road South -- GSO LLC
McConnell Road South -- GSO LLC sought relief under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. E.D.N.C. Case No. 24-03767) on
October 29, 2024. In the petition filed by Zachary Tran, as
manager, the Debtor reports estimated assets and liabilities
between $10 million and $50 million each.
Bankruptcy Judge David M. Warren handles the case.
The Debtor is represented by:
Charles M. Ivey III, Esq.
IVEY, MCCLELLAN, SIEGMUND, BRUMBAUGH & MCDONOUGH LLP
305 Blandwood Ave
Greensboro, NC 27401
Tel: 336-274-4658
Fax: 336-274-4540
METRO AIR: Unsecureds to Split $20K in Subchapter V Plan
--------------------------------------------------------
Metro Air Services, Inc., filed with the U.S. Bankruptcy Court for
the Middle District of Tennessee a Plan of Reorganization under
Subchapter V dated September 26, 2024.
The Debtor is a local ground transportation company. It facilitates
small freight loading, unloading, delivery, and limited storage.
The Debtor started in 1998, when its principal and sole
shareholder, April Schneider, purchased an existing ground handling
company whose primary business was loading and unloading freight
from private planes.
The Debtor is an operating business capable of positive cash flows,
but it has faced several serious issues that necessitate
reorganization. First, the Debtor made the unfortunate decision to
expand its operation without a corresponding revenue increase.
While it ultimately downsized its operation, it was forced to
borrow expensive money in the interim via high interest credit
cards and merchant cash advances, to pay necessary operational
expenses. Servicing this expensive debt caused the Debtor to incur
substantial payroll tax obligations to the Internal Revenue
Service.
Through a Chapter 11, Subchapter V reorganization, the Debtor is
optimistic that it can successfully reorganize and emerge from
Chapter 11 through continued operations with a confirmable plan
sufficient to satisfy operating expenses, fully satisfy all
obligations to priority creditors, surrender expensive equipment
that no longer benefits the business, and pay creditors more than
they would receive in a Chapter 7 liquidation.
The Debtor elected the Chapter 11 process to preserve its going
concern value, continue providing its valuable ground
transportation services to its customers, and remain a stable
source of income for its loyal employees. The Debtor now files this
Plan of Reorganization.
The Debtor's financial projections show that the Debtor will have
projected disposable income of $1,609,800.00. The Plan provides for
distributions to claimants in excess of this amount.
This Plan of Reorganization under Chapter 11 of the Code proposes
to pay the creditors of the Debtor from cash flow from business
operations as set forth herein.
Non-priority unsecured creditors holding allowed claims will
receive pro rata distributions totaling $20,000.00 to the class.
This Plan also provides for the payment of administrative and
priority claims.
Class 17 consists of General Unsecured Creditors. The Plan
provides a pool of $20,000.00 to be paid pro-rata to the
claimholders in this class. There shall be four lump-sum payments
(for a total disbursement of $20,000.00) paid prorata to the
claimholders in this class as follows:
* $5,000 to be paid on or before the second anniversary of the
Effective Date;
* $5,000 to be paid on or before the third anniversary of the
Effective Date;
* $5,000 to be paid on or before the fourth anniversary of the
Effective Date; and
* $5,000 to be paid on or before the fifth anniversary of the
Effective Date.
Class 18 shall consist of the membership interests in the Debtor.
April Schneider will retain a 100% membership interest in the
Debtor.
The Debtor will continue to operate to generate revenue to fund the
Plan. To the extent the Debtor experiences any income or expense
shocks during the term of Plan performance, the Debtor may
supplement its revenue with recoveries on retained claims,
including but not limited to recovery of Avoidance Actions.
A full-text copy of the Plan of Reorganization dated September 26,
2024 is available at https://urlcurt.com/u?l=q2qGOU from
PacerMonitor.com at no charge.
Counsel to the Debtor:
Henry E. Hildebrand, IV, Esq.
Dunham Hildebrand Payne Waldron, PLLC
9020 Overlook Boulevard, Suite 316
Brentwood, TN 37027
Telephone: (615) 933-5851
Email: ned@dhnashville.com
About Metro Air Services
Metro Air Services, Inc., is a local ground transportation company.
It facilitates small freight loading, unloading, delivery, and
limited storage.
The Debtor filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. M.D. Tenn. Case No. 24-03237) on August 23,
2024, with $100,001 to $500,000 in assets and $1 million to $10
million in liabilities.
Judge Randal S. Mashburn presides over the case.
Henry E. Hildebrand, Esq., at Dunham Hildebrand Payne Waldron,
PLLC, is the Debtor's legal counsel.
MR. COOPER: Fitch Affirms 'BB' LongTerm IDR, Outlook Stable
-----------------------------------------------------------
Fitch Ratings has affirmed the Long-Term Issuer Default Ratings
(IDRs) of Mr. Cooper Group, Inc. and its subsidiaries Nationstar
Mortgage Holdings Inc. and Nationstar Mortgage LLC's at 'BB'. The
Rating Outlook is Stable. Fitch has also affirmed the senior
unsecured debt rating of Nationstar Mortgage Holdings Inc. at
'BB'.
Today's rating action has been taken as part of a periodic review
of non-bank mortgage companies, which is comprised of seven
publicly rated firms.
Key Rating Drivers
Leading Servicing Franchise: Mr. Cooper's rating is supported by
its strong franchise and leading market position as a U.S.
residential mortgage servicer, conservative funding profile with
low leverage and solid liquidity, and experienced management team
with extensive industry experience. Additionally, Mr. Cooper's
origination capabilities and mortgage servicing right (MSR) hedging
should provide relative earnings stability through interest rate
cycles. The company's subservicing business provides stable cash
flows with minimal incremental capital requirements.
Highly Cyclical Mortgage Industry: The ratings are constrained by
the highly cyclical nature of the mortgage industry, higher
corporate leverage relative to peers, a reliance on secured,
short-term, wholesale funding facilities, and potential servicing
advance needs and regulatory scrutiny from its exposure to Ginnie
Mae (GNMA) loans.
Stable Profitability: Mr. Cooper's pre-tax return on average assets
(ROAA), adjusted for GNMA loans subject to repurchase right, was
4.9% for the TTM) ended 3Q24, compared with 5.4% in FY23, but below
the four-year average of 7.6% from 2020-2023. Profitability has
been more stable in recent quarters than mortgage peers that rely
more heavily on origination volume and have greater unhedged MSR
exposure.
While rates are expected to decline in the near term, Fitch views
MSR valuation downside risk as manageable assuming the target
hedging ratio remains around 75%. However, Fitch expects MSR
exposure to remain elevated after significant growth in recent
years due to numerous portfolio acquisitions. As of 3Q24, MSR
exposure amounted to 62% of assets and 216% of equity, up from 30%
and 125% at YE21.
Leverage Expected to Rise Moderately: Mr. Cooper's leverage (gross
debt to tangible equity) was 2.2x at 3Q24, up from 1.9x at YE23 and
1.5x at YE22 given increased draws on secured MSR lines to make
bulk acquisitions and higher warehouse borrowings to fund
originations. Fitch expects leverage to continue to rise moderately
as originations increase in 2025. Corporate leverage, which
excludes balances under origination funding facilities, was 1.7x at
3Q24, which is on the high end of peers given the MSR focus.
Capital Sensitive to MSR Hedging: The company maintains a target
capital ratio of tangible net worth (TNW) to total assets of
20%-25%, but it was 28% at 3Q24. This translates to approximately
2x-3x gross leverage, according to Fitch. Capital levels remain
sensitive to the firm's MSR hedging strategy's effectiveness, which
is untested through different economic and market environments. If
the hedging strategy proves ineffective, leverage could be
meaningfully impacted by MSR valuation changes.
Solid Funding Mix; Shorter Duration Secured Funding: Mr. Cooper's
unsecured funding comprised 53% of total debt at 3Q24, up from 42%
at YE23 and at the high end of the peer group, aided by unsecured
note issuances of $750 million in August 2024 and $1.0 billion in
February 2024. Fitch believes the unsecured funding mix and
availability of unencumbered assets enhances Mr. Cooper's funding
flexibility in times of stress.
Funding Duration: While secured funding is shorter-dated, Mr.
Cooper's MSR lines have two-year original terms, with 66% capacity
committed at 3Q24. This compares favorably to non-bank mortgage
peers but is below other non-bank financial institutions. Warehouse
facilities are predominantly one-year and uncommitted. Fitch would
view further extensions of funding duration and increases in the
committed percentage favorably for the funding profile.
Strong Liquidity Profile: Fitch views the company's liquidity
profile as strong relative to peers and adequate to meet operating
cash needs, potential margin calls and advancing requirements. At
3Q24, available liquidity consisted of $733 million of unrestricted
cash and $3.3 billion of collateralized but undrawn borrowing
capacity on its MSR lines, which equates to 43.8% of total debt
outstanding.
Solid Asset Quality: Asset quality risk is not material for Mr.
Cooper, as nearly all originated loans are conforming agency or
GNMA-eligible and sold shortly after origination. Delinquencies of
60+ days were 1.5% of the servicing portfolio at 3Q24, down from
1.9% at YE23 and 2.6% at YE22. Mortgages have outperformed other
consumer assets over the last year due to strong home equity levels
have, but gradually rising unemployment could increase
delinquencies in 2025-2026. Mr. Cooper has manageable exposure to
potential losses from repurchase or indemnification claims under
certain warranty provisions, although claims in recent years have
been manageable.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- A sustained increase in gross leverage above 4.0x;
- A sustained increase in corporate leverage above 2.0x;
- A decrease in unsecured funding below 25% of total debt;
- Sustained profitability challenges that erode tangible equity;
- A reduction in or ineffectiveness of MSR hedging that introduces
substantial earnings volatility;
- An inability to maintain sufficient liquidity to manage future
servicer advances or margin calls;
- Substantial regulatory fines or litigation expenses that
negatively impact the company's franchise or operating
performance.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Gross leverage maintained at-or-below 3.0x;
- A sustained reduction in corporate leverage to 1.5x or below;
- Extension of funding duration and increased committed funding
percentage while maintaining unsecured debt above 35% of total
debt;
- Continued consistency of operating performance with demonstrated
profitability through cycles;
- Maintenance of market position and leadership in mortgage
servicing.
DEBT AND OTHER INSTRUMENT RATINGS: KEY RATING DRIVERS
The senior unsecured debt rating is equalized with Nationstar
Mortgage Holdings Inc.'s Long-Term IDR given the funding mix and
expectations for average recovery prospects given sufficient
unencumbered assets that are available to senior noteholders.
DEBT AND OTHER INSTRUMENT RATINGS: RATING SENSITIVITIES
The senior unsecured debt rating is primarily sensitive to changes
in the Long-Term IDR and would be expected to move in tandem;
however, a material reduction in unencumbered assets and/or
increase in the proportion of secured funding could result in
notching between Nationstar Mortgage LLC's Long-Term IDR and the
unsecured notes.
SUBSIDIARY AND AFFILIATE RATINGS: RATING SENSITIVITIES
The ratings of Nationstar Mortgage Holdings Inc. (the debt-issuing
subsidiary) and Nationstar Mortgage LLC (the operating company) are
equalized with that of Mr. Cooper given they are wholly owned
subsidiaries and debt issued by Nationstar Mortgage Holdings Inc.
benefits from a corporate guarantee from Mr. Cooper and Nationstar
Mortgage LLC.
The ratings of Nationstar Mortgage Holdings Inc. and Nationstar
Mortgage LLC are equalized with that of Mr. Cooper and are expected
to move in tandem.
ADJUSTMENTS
- The Standalone Credit Profile (SCP) has been assigned in line
with the implied SCP.
- The Business Profile score has been assigned below the implied
score due to the following adjustment reason: Business model
(negative).
- The Asset Quality score has been assigned below the implied score
due to the following adjustment reason: Non-loan exposures
(negative).
- The Earnings & Profitability score has been assigned below the
implied score due to the following adjustment reasons: Earnings
stability (negative).
- The Capitalization & Leverage score has been assigned below the
implied score due to the following adjustment reasons: Risk profile
and business model (negative).
- The Funding, Liquidity & Coverage score has been assigned below
the implied score due to the following adjustment reason: Business
model/funding market convention (negative).
ESG Considerations
Mr. Cooper has an ESG Relevance Score of '4' for Customer Welfare
— Fair Messaging, Privacy and Data Security due to its exposure
to compliance risks that include fair lending practices, debt
collection practices and consumer data protection. This has a
negative impact on the credit profile and is relevant to the rating
in conjunction with other factors.
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Prior
----------- ------ -----
Nationstar Mortgage LLC LT IDR BB Affirmed BB
Mr. Cooper Group Inc. LT IDR BB Affirmed BB
Nationstar Mortgage
Holdings Inc. LT IDR BB Affirmed BB
senior unsecured LT BB Affirmed BB
MVL INVESTMENTS: Voluntary Chapter 11 Case Summary
--------------------------------------------------
Debtor: MVL Investments Group, Inc.
2328A Hollywood Blvd.
Hollywood, FL 33020
Chapter 11 Petition Date: November 11, 2024
Court: United States Bankruptcy Court
Southern District of Florida
Case No.: 24-21810
Judge: Hon. Peter D Russin
Debtor's Counsel: Mark S. Roher, Esq.
LAW OFFICE OF MARK S. ROHER, P.A.
1806 N. Flamingo Rd., Suite 300
Pembroke Pines, FL 33028
Tel: 954-353-2200
E-mail: mroher@markroherlaw.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $100,000 to $500,000
The petition was signed by Anastasia L. Thelusma as president.
The Debtor indicated in the petition it has no unsecured
creditors.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/Y66VYWI/MVL_Investments_Group_Inc__flsbke-24-21810__0001.0.pdf?mcid=tGE4TAMA
NAYA STONE: Joseph Schwartz Named Subchapter V Trustee
------------------------------------------------------
The U.S. Trustee for Regions 3 and 9 appointed Joseph Schwartz
Esq., at Riker Danzig Scherer Hyland & Perretti, LLP, as Subchapter
V trustee for Naya Stone, LLC.
Mr. Schwartz will be paid an hourly fee of $400 for his services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. Schwartz declared that he is a disinterested person according
to Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Joseph L. Schwartz, Esq.
Riker Danzig Scherer Hyland & Perretti, LLP
One Speedwell Avenue,
Morristown, NJ 07962-1981
Phone: (973) 451-8506
Email: jschwartz@riker.com
About Naya Stone
Naya Stone, LLC sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D.N.J. Case No. 24-20223) on October 15,
2024, with $1 million to $10 million in both assets and
liabilities. The petition was signed by Avraham Dahan, president of
Dayton Services Corp., a majority member.
The Debtor is represented by Anthony Sodono, III, Esq., at
McManimon, Scotland & Baumann, LLC.
NEUEHEALTH INC: Acquires Full Ownership of Centrum Health
---------------------------------------------------------
NeueHealth, Inc. disclosed in a Form 8-K Report filed with the U.S.
Securities and Exchange Commission that on October 29, 2024, the
Company entered into a Unit Purchase Agreement, among Medical
Practice Holding Company, LLC, a wholly owned subsidiary of the
Company, RRD Healthcare, LLC, the Company, Centrum Medical
Holdings, LLC and the other parties named therein, pursuant to
which, among other things, Medical Practice purchased RRD's equity
in Centrum for total consideration of $101.75 million, comprised of
$30.0 million in cash, a credit of approximately $7.8 million in
previous payments and the Secured Promissory Note of approximately
$64.0 million in principal amount. The Unit Purchase Agreement
includes customary representations, warranties, covenants and
releases by Medical Practice and RRD. The Unit Purchase Agreement
provides that each party thereto releases the other party from all
claims in connection with the Centrum Transaction or arising before
the Closing Date, subject to certain exceptions.
"We are pleased to announce this transaction as it further
positions NeueHealth to take the lead in creating a more
coordinated, seamless healthcare experience for all consumers,"
said Mike Mikan, President and CEO of NeueHealth. "We look forward
to continuing to drive value in healthcare for all as we look to
build on our success in 2025 and beyond."
In connection with the Centrum Transaction, the Company will make
payment of $8.0 million to the P Unit Holders of RRD, generally
payable after 48 months from the closing date under the Unit
Purchase Agreement, which was on October 29, 2024, bearing cash
interest at a rate of 6% per annum.
The Buyer issued on the Closing Date to RRD a secured promissory
note due 48 months from the Closing Date in the principal amount of
approximately $64.0 million, bearing cash interest at a rate of 6%
per annum, payable monthly. The Secured Promissory Note is
guaranteed by the Company and is secured by second priority liens
on substantially all assets of the Company and its subsidiaries
that are guarantors under the Company's Loan and Security
Agreement, dated as of June 21, 2024, with certain affiliates of
Hercules Capital, subject to substantially the same exceptions in
the Hercules Credit Agreement. Subject to the limitations in the
Subordination Agreement, the Borrower may prepay all or any portion
of the Secured Promissory Note at any time and from time to time
without penalty or premium.
The Secured Promissory Note and related security agreement contains
certain negative covenants applicable to the Company, the Borrower
and their respective subsidiaries, and includes limitations on:
incurrences of indebtedness; liens; investments; mergers and other
fundamental changes; transactions with affiliates; change of
control; changes to the nature of the business; dispositions;
distributions; sale and leaseback transactions; and certain
activities of the Company and the Borrower. The Secured Promissory
Note provides that, if any Material Default (as defined in the
Secured Promissory Note) occurs, then the Borrower must conduct a
sale process and consummate a sale of the assets of Centrum within
six months of delivery of notice of the Material Default (plus an
additional three months if a definitive sale agreement has been
entered into and the sale is reasonably expected to close within
such extended period).
Certain affiliates of Hercules Capital and the Noteholder entered
into a customary intercreditor and subordination agreement. In
connection with the Centrum Transaction, RRD entered into a
customary subordination and standstill agreement with certain
affiliates of Hercules Capital.
About NeueHealth Inc.
NeueHealth -- www.neuehealth.com -- is a value-driven healthcare
company grounded in the belief that all health consumers are
entitled to high-quality, coordinated care. NeueHealth consists of
two reportable segments: (i) NeueCare (formerly Care Delivery) --
The Company's value-driven care delivery business that manages risk
in partnership with external payors and serves all populations
across The Patient Protection and Affordable Care Act and the
Health Care and Education Reconciliation Act of 2010 ("ACA")
Marketplace, Medicare, and Medicaid; and (ii) NeueSolutions
(formerly Care Solutions) -- The Company's provider enablement
business that includes a suite of technology, services, and
clinical care solutions that empower providers to thrive in
performance-based arrangements.
Minneapolis, Minnesota-based Deloitte & Touche LLP, the Company's
auditor since 2020, issued a "going concern" qualification in its
report dated March 28, 2024, citing that the Company has a history
of operating losses, negative cash flows from operations, and does
not have sufficient cash on hand or available liquidity to meet its
obligations, which raises substantial doubt about its ability to
continue as a going concern.
As of March 31, 2024, NeueHealth had $1.11 billion in total assets,
$1.35 billion in total liabilities, $98.76 million in redeemable
noncontrolling interests, $747.48 million in redeemable series A
preferred stock, $172.94 million in redeemable series B preferred
stock, and a total stockholders' deficit of $1.26 billion.
NEWPORT VENTURES: Files for Chapter 11 Bankruptcy
-------------------------------------------------
Newport Ventures LLC filed Chapter 11 protection in the Central
District of California. According to court documents, the Debtor
reports $10 million and $50 million in debt owed to 100 and 199
creditors. The petition states funds will be available to unsecured
creditors.
A meeting of creditors under 11 U.S.C. Section 341(a) is slated for
November 26, 2024 at 9:00 a.m. at UST-SA1, TELEPHONIC MEETING.
CONFERENCE LINE:1-866-919-0527, PARTICIPANT CODE:2240227.
About Newport Ventures LLC
Newport Ventures LLC owns and operates a restaurant.
Newport Ventures LLC sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. C.D. Cal. Case No. 24-12738) on October 26,
2024. In the petition filed by Shahvand Aryana, as principal, the
Debtor reports estimated assets and liabilities between $10 million
and $50 million.
Bankruptcy Judge Theodor Albert oversees the case.
The Debtor is represented by:
Steven M. Kries, Esq.
8059 S Elk Way, CO 80016
Tel: (619) 890-0765
Email: skries@acc.capital
ODYSSEY HEALTH: Delays Annual Report for FY Ended July 31
---------------------------------------------------------
Odyssey Health, Inc. filed a Form 12b-25 with the U.S. Securities
and Exchange Commission disclosing that it is unable to file its
Annual Report on Form 10-K for the year ended July 31, 2024, in a
timely manner because the Company was not able to timely complete
its financial statements without unreasonable effort or expense.
About Odyssey Health
Headquartered in Las Vegas, NV, Odyssey Health, Inc.'s business
model is to develop or acquire unique medical related products,
engage third parties to manufacture such products and then
distribute the products through various distribution channels,
including third parties. The Company plans to develop potentially
life-saving technologies: the CardioMap heart monitoring and
screening device, the Save A Life choking rescue device, a unique
neurosteroid drug compound intended to treat concussions and a
unique drug compound to treat rare brain disorders in partnership
with Prevacus, Inc. To date, none of the Company's product
candidates have received regulatory clearance or approval for
commercial sale.
Dallas, Texas-based Turner, Stone & Company, L.L.P., the Company's
auditor since 2020, issued a "going concern" qualification in its
report dated Oct. 30, 2023, citing that the Company has incurred
losses and negative cash flows from operations since inception and
is currently dependent on the stockholders and lenders to fund its
operating activities.
As of April 30, 2024, Odyssey Health had $13.58 million in total
assets, $5.70 million in total current liabilities, and $7.88
million in total stockholders' equity.
OMNIQ CORP: Secures $1.4-Mil. Contract Renewal With Logistics Giant
-------------------------------------------------------------------
OMNIQ Corp. has proudly announced a $1.4 million contract renewal
with a top-tier transportation and logistics company. This
substantial order, part of an ongoing purchasing agreement,
underscores the trust omniQ has earned through nearly 20 years of
supporting this Fortune 500 customer's high-demand seasons.
Under the renewed agreement, omniQ will supply advanced
Android-based rugged IoT devices, along with software subscriptions
and robust maintenance services, across multiple locations
nationwide. This 3PL giant, with annual revenues exceeding $11
billion and a workforce of over 15,000, depends on omniQ's
technology to streamline operations and elevate service delivery
during critical periods.
This renewal follows omniQ's recent achievements, including the
deployment of smart kiosks for Israel's leading fast-food chain,
Burger Ranch, and omniQ's award as a top provider of smart city
solutions in 2024. These successes reflect omniQ's growth strategy
and dedication to providing reliable, innovative, and scalable AI
and IoT solutions.
CEO Shai Lustgarten commented, "This renewal is a testament to our
client's confidence in omniQ's technological capabilities and our
commitment to operational excellence. We look forward to continuing
to enhance their logistics network with our state-of-the-art
solutions, ensuring resilience and efficiency in today's demanding
market."
About Omniq
OmniQ Corporation -- www.omniq.com -- provides computerized and
machine vision image processing solutions that use patented and
proprietary AI technology to deliver real-time object
identification, tracking, surveillance, and monitoring for the
Supply Chain Management, Public Safety, and Traffic Management
applications. The technology and services provided by the Company
help clients move people, objects, and manage big data safely and
securely through airports, warehouses, schools, and national
borders and in many other applications and environments.
Salt Lake City, Utah-based Haynie & Company, the Company's auditor
since 2019, issued a "going concern" qualification in its report
dated April 1, 2024, citing that the Company has a deficit in
stockholders' equity and has sustained recurring losses from
operations. This raises substantial doubt about the Company's
ability to continue as a going concern.
OmniQ reported a net loss of $29.43 million for the year ended Dec.
31, 2023, compared to a net loss of $13.61 million for the year
ended Dec. 31, 2022. As of June 30, 2024, OMNIQ had $42.62 million
in total assets, $80.97 million in total liabilities, and $38.36
million in total stockholders' deficit.
OYA RENEWABLES: Nov. 15 Deadline Set for Panel Questionnaires
-------------------------------------------------------------
The United States Trustee is soliciting members for committee of
unsecured creditors in the bankruptcy case of OYA Renewables
Development LLC, et al.
If a party wishes to be considered for membership on any official
committee that is appointed, it must complete a questionnaire
available at https://tinyurl.com/5n7huvdh and return by email it to
John Schanne, Esq. - john.schanne@usdoj.gov - at the Office of the
United States Trustee so that it is received no later than 4:00
p.m., on Friday, November 15, 2024.
If the U.S. Trustee receives sufficient creditor interest in the
solicitation, it may schedule a meeting or telephone conference for
the purpose of forming a committee.
About OYA Renewables
OYA Renewables Development LLC own a portfolio of operating solar
projects and projects in various stages of development in North
America. OYA also deliver distributed energy and smart long-term
renewable energy solutions to local communities.
OYA Renewables and seven its affiliates filed for bankruptcy
protection (Bankr. D. Del., Lead Case No. 24-12574) on November 6,
2024. In petition signed by John Shepherd as chief restructuring
officer, the Debtors reported $100 million to $500 million in
estimated assets and liabilities.
The Hon. Karen B. Owens presides over the cases.
Young Conway Stargatt & Taylor LLP serves the Debtors’ local
bankruptcy counsel and Sisley Austin LLP serves as the general
bankruptcy counsel. Ankara Consulting Group, LLC acts as financial
advisor to the Debtors, while Agenis Capital Advisors and Senahill
Advisors LLC act as investment bankers to the Debtors. Kroll
Restructuring Administration LLC is the Debtors’ notice and
claims agent.
OYA Renewables Development LLC own a portfolio of operating solar
projects and projects in various stages of development in North
America. OYA also deliver distributed energy and smart long-term
renewable energy solutions to local communities.
OYA Renewables and seven its affiliates filed for bankruptcy
protection (Bankr. D. Del., Lead Case No. 24-12574) on November 6,
2024. In petition signed by John Shepherd as chief restructuring
officer, the Debtors reported $100 million to $500 million in
estimated assets and liabilities.
The Hon. Karen B. Owens presides over the cases.
Young Conway Stargatt & Taylor LLP serves the Debtors’ local
bankruptcy counsel and Sisley Austin LLP serves as the general
bankruptcy counsel. Ankara Consulting Group, LLC acts as financial
advisor to the Debtors, while Agenis Capital Advisors and Senahill
Advisors LLC act as investment bankers to the Debtors. Kroll
Restructuring Administration LLC is the Debtors’ notice and
claims agent.
PARLEMENT TECHNOLOGIES: Gets Court Okay for $6.3 Million Sale
-------------------------------------------------------------
Rick Archer of Law360 Bankruptcy reports that the former owner of
conservative social media platform Parler has a $6.3 million buyer
in Chapter 11. On November 1, 2024, a Delaware bankruptcy judge
said that he will approve the sale.
About Parlement Technologies
Parlement Technologies, Inc. is a technology services company in
Nashville, Tenn., serving businesses and organizations of all
sizes.
Parlement Technologies filed Chapter 11 petition (Bankr. D. Del.
Case No. 24-10755) on April 15, 2024, listing up to $50 million in
both assets and liabilities. Craig Jalbert, chief restructuring
officer, signed the petition.
Judge Craig T. Goldblatt oversees the case.
Jeremy W. Ryan, Esq., at Potter Anderson & Corroon, LLP, serves as
the Debtor's bankruptcy counsel.
PENNYMAC FINANCIAL: Fitch Hikes LongTerm IDR to BB, Outlook Stable
------------------------------------------------------------------
Fitch Ratings has upgraded the Long-Term Issuer Default Rating
(IDR) and unsecured debt rating of PennyMac Financial Services Inc.
(PFSI) to 'BB' from 'BB-'. The Rating Outlook is Stable.
This rating action has been taken as part of Fitch's periodic
review of non-bank mortgage companies, which includes seven
publicly rated firms.
Key Rating Drivers
Ratings Upgraded to 'BB': The upgrade of PFSI's ratings reflects
the strengthening of its franchise over the last few years, which
should increase the durability of its business model through market
cycles. In addition, PFSI has shown improved profitability while
maintaining low leverage and sound liquidity. Diversified Business
Model: PFSI's rating continues to reflect its solid and growing
franchise and historical track record in the U.S. nonbank
residential mortgage space, solid financial profile, experienced
senior management team, and a sufficiently robust and integrated
technology platform. Fitch views PFSI's multichannel approach
favorably and believes its largely hedged servicing business model
with high recapture rates may serve as a natural hedge, although
not a full offset, to the cyclicality of the mortgage origination
business.
Highly Cyclical Mortgage Industry: The ratings are constrained by
the highly cyclical nature of the mortgage origination business,
elevated exposure to Ginnie Mae (GNMA) loans with higher advancing
needs and potentially higher regulatory scrutiny, reliance on
short-term, uncommitted funding, and a complex group structure
given elevated related party transactions with PennyMac Mortgage
Trust (PMT), which invests in mortgage-related assets, and other
affiliates.
Leading Franchise and Market Position: PFSI's market position has
improved in recent years. As of 2Q24, PFSI held the top place in
correspondent production with an 18.2% market share as well as
substantial market share in overall production, wholesale broker,
and servicing segments according to Inside Mortgage Finance.
Improving Profitability: PFSI's pre-tax returns on average assets
(ROAA), adjusted for GNMA loans subject to repurchase, was 1.5% for
the trailing 12 months (TTM) ended 2Q24. That was up from 1.4% in
FY23 but below 4.8% in FY22 and 8.3% in FY21. Fitch expects
profitability to improve in 2025 given higher origination volumes
and improved gain on sale (GOS) margins amid reductions in industry
capacity, but to remain well below peak profitability seen in 2020.
The servicing segment should also continue to contribute to
earnings as PFSI has maintained a large servicing portfolio by
retaining the mortgage servicing rights (MSRs) from its
originations and making bulk acquisitions.
Appropriate Leverage: PFSI's leverage (gross debt to tangible
equity) was 3.2x at 2Q24, up from 2.4x at YE23, driven by increased
borrowings to fund higher originations. Fitch expects leverage to
increase in the near term as originations rise and MSR valuations
decline, partially offset by hedging gains and earnings retention
as profitability improves in 2025. Still, Fitch expects leverage to
remain below 4.0x over the Outlook horizon.
Corporate leverage, which excludes the balances under origination
funding facilities, remains comparable to peers at 1.3x at 2Q24
compared with 1.2x at YE23 as PFSI drew on its MSR facilities to
make bulk acquisitions.
Reliance on Secured Funding: Consistent with other mortgage
companies, PFSI remains reliant on short-term wholesale funding for
its operations. At 2Q24, 90% of PFSI's funding facilities carried
original terms of two years, covering loans held for sale by 1.6x,
which compares favorably to peers. Still, PFSI's average funding
duration is below that of other non-bank financial institutions,
which exposes PFSI to higher liquidity and refinancing risk.
Unsecured debt comprised 27% of total debt at 2Q24, down from 29%
at YE23 but up from 21% at 2Q23, as the company issued $750 of
unsecured notes in December 2023 to repay secured term notes due
2025 and $650 million of unsecured notes in May 2024 to repay its
secured MSR facilities. Fitch would view further extensions of
funding duration and increases in the unsecured funding mix as
credit positive.
Solid Liquidity: Fitch views PFSI's liquidity profile as adequate
to meet its upcoming unsecured debt maturities as well as operating
cash needs, potential margin calls and advancing requirements. At
2Q24, liquidity resources consisted of $784 million of cash and
equivalents and $2.7 billion of available capacity borrowing
capacity on its MSR lines, as well as $2.4 billion of undrawn
warehouse capacity to fund originations. PFSI's next unsecured debt
maturity is in October 2025, when $650 million comes due.
Solid Asset Quality: PFSI is not subject to material asset quality
risks as nearly all originated loans are conforming agency or
GNMA-eligible and sold shortly after origination. Delinquencies of
60 days or more in the owned servicing portfolio totaled 3.1% at
2Q24, down from 3.3% at YE23 and 3.7% at YE22. In general,
mortgages have outperformed other consumer assets over the last
year as home equity levels have supported strong performance, but
gradually rising unemployment could drive higher delinquencies in
2025-2026. PFSI does have exposure to repurchase or indemnification
claims from third parties under certain warranty provisions,
although claims in recent years have been manageable.
Stable Outlook: The Stable Outlook reflects Fitch's expectation
that PFSI's leverage will grow moderately but remain below 4.0x on
a gross basis and 1.5x on a corporate basis, access to funding and
liquidity will remain sufficient for operating needs, and
profitability will continue to improve.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Gross leverage sustained above 5.0x;
- Corporate leverage sustained above 1.5x;
- Sustained profitability challenges that erode tangible equity and
the company's market position;
- A decrease in aggregate liquidity resources or reduction in
unencumbered assets that constrain the company's funding
flexibility and/or increased utilization of secured funding that
reduces the unsecured funding mix below 15% on a sustained basis;
- Regulatory scrutiny resulting in PFSI incurring substantial fines
that negatively impact its franchise or operating performance.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Improvement in the funding profile including an extension of
funding duration, an increase in the committed funding percentage
and the maintenance of unsecured debt above 35% of total debt;
- Leverage maintained at or below 3.0x and corporate leverage
maintained at or below 1.0x;
- Growth of the business that enhances the franchise and platform
scale;
- Improved earnings consistency;
- Stronger liquidity profile, as evidenced by a meaningful increase
in the percentage of available liquidity resources (cash and
available borrowing capacity) to total debt.
DEBT AND OTHER INSTRUMENT RATINGS: KEY RATING DRIVERS
The senior unsecured debt is equalized with PFSI's Long-Term IDR,
reflecting the funding mix and average recovery prospects in a
stressed scenario.
DEBT AND OTHER INSTRUMENT RATINGS: RATING SENSITIVITIES
The unsecured debt rating is primarily sensitive to changes in
PFSI's Long-Term IDR and would be expected to move in tandem.
However, a meaningful increase in the proportion of secured debt
could result in the unsecured debt being notched down from the
IDR.
ADJUSTMENTS
- The Standalone Credit Profile (SCP) has been assigned in line
with the implied SCP.
- The Business Profile score has been assigned below the implied
score due to the following adjustment reason: Business Model
(negative).
- The Earnings and Profitability score has been assigned below the
implied score due to the following adjustment reason: Earnings
stability (negative).
- The Capitalization and Leverage score has been assigned below the
implied score due to the following adjustment reason:
Profitability, payouts and growth (negative).
- The Funding, Liquidity & Coverage has been assigned below the
implied score due to the following adjustment reason: Funding
flexibility (negative).
ESG Considerations
PFSI has an ESG Relevance Score of '4' for Customer Welfare —
Fair Messaging, Privacy and Data Security due to its exposure to
compliance risks that include fair lending practices, debt
collection practices and consumer data protection, which have a
negative impact on the credit profile and are relevant to the
rating in conjunction with other factors.
PFSI has an ESG Relevance Score of '4' for Governance Structure due
to board effectiveness as it relates to protection of creditor and
shareholder rights and related party transactions among PMT, its
externally managed REIT, and other affiliates. An ESG Relevance
Score of '4' means Governance Structure is relevant to PFSI's
rating but not a key rating driver. However, it impacts the rating
in combination with other factors.
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Prior
----------- ------ -----
PennyMac Financial
Services, Inc. LT IDR BB Upgrade BB-
senior unsecured LT BB Upgrade BB-
POLAR POWER: Expects Up to $5.2 Million in Fiscal Q3 Sales
----------------------------------------------------------
Polar Power, Inc. announced preliminary third quarter net sales
between $4.7 million and $5.2 million, representing growth of 147%
to 174%, gross margin in the range of 26% to 32%, and breakeven net
earnings.
* Recovering net sales benefitting from strength across both
diesel- and natural gas-powered product lines, with new customers
accounting for 18% and 12% of total sales, respectively
* Substantial year-over-year improvement in gross margin
attributable to higher revenues, lower labor costs and improved
factory overhead absorption.
* Substantial improvement in net income from operations
attributed to a combination of higher sales, improved gross
margins, reduced R&D expenditures and lower general and
administrative costs.
Arthur Sams, CEO of Polar Power, commented, "We expect to report
third quarter results that will reflect another solid quarter of
year-over-year top- and bottom-line improvements, with sales of
about $5 million and gross margins that are recovering and tracking
towards our long-term target. Investments made in our newly
implemented ERP system and other initiatives have resulted in both
continued diversification of our customer base and more efficient
business processes, which have enabled inventory optimization,
reduction of certain R&D costs and faster reaction time to meet
evolving needs in our core telecom sector and beyond. We have made
very good progress in the past twelve months, and there remain
plenty of opportunities for us to take advantage of and generate
sustainably profitable growth for our shareholders."
Polar Power expects to file its quarterly report on form 10-Q and
announce its third quarter results on or before November 14, 2024.
About Polar Power
Gardena, Calif.-based Polar Power, Inc. designs, manufactures, and
sells direct current (DC) power systems to supply reliable and
low-cost energy for off-grid, bad-grid, backup power, electric
vehicle charging, and nano grid applications.
Los Angeles, Calif.-based Weinberg & Company, P.A., the Company's
auditor since 2016, issued a "going concern" qualification in its
report dated April 1, 2024, citing that during the year ended
December 31, 2023, the Company incurred a net loss and utilized
cash in operations. These conditions raise substantial doubt about
the Company's ability to continue as a going concern.
PROVIDENT FUNDING: Fitch Affirms 'B' LongTerm IDR, Outlook Stable
-----------------------------------------------------------------
Fitch Ratings has affirmed Provident Funding Associates, L.P.'s
Long-Term Issuer Default Rating (IDR) at 'B'. The Rating Outlook is
Stable. Fitch has also affirmed Provident's senior unsecured
long-term debt ratings and its wholly owned debt issuing
subsidiary, PFG Finance Corp, at 'B' with a 'RR4' Recovery Rating.
Today's rating actions have been taken as part of a periodic peer
review of non-bank mortgage companies, which is comprised of seven
publicly rated firms.
Key Rating Drivers
High Quality Origination and Servicing Focus: The rating
affirmations reflect Provident's long track record through multiple
business cycles, focus on higher-quality, agency-eligible
originations, maintenance of solid asset quality in the servicing
portfolio, conservative leverage, good liquidity levels, and
experienced management team.
Ratings Constrained by Market Position: Provident has a nominal
market share within the wholesale and direct mortgage origination
and servicing spaces, which are dominated by larger players that
benefit from scale. Fitch believes market share growth that
enhances Provident's franchise would positively impact its credit
profile. The ratings are also constrained by key person risk
related to CEO Craig Pica, who, along with the Pica family,
exercises significant control over the company as a majority
shareholder.
Highly Cyclical Mortgage Industry: Provident's ratings are
constrained by the highly cyclical nature of the mortgage
origination business, capital intensity and valuation volatility of
mortgage servicing rights (MSR) and exposure to liquidity risks
from margin calls related to interest rate hedging.
Solid Profitability: Provident's pre-tax return on average assets
(ROAA) was 2.0% for the TTM ended 2Q24, up from 1.5% in FY23 and
consistent with the four-year average from 2020-2023. This is
within Fitch's 'bb' category benchmark range of 1% to 4% for
finance and leasing companies with a 'bbb' sector risk operating
environment score. Fitch expects ROAA to improve modestly over the
Outlook horizon as origination volumes rise in 2025.
Stable Leverage: Provident's leverage (gross debt to tangible
equity) was 2.8x at 2Q24, consistent with YE23. Corporate
non-funding leverage, excluding balances under warehouse
facilities, was 1.5x at 2Q24, down from 1.7x at YE23 due to reduced
borrowings on MSR facilities. While capital levels remain sensitive
to MSR valuation given the growing servicing portfolio, with MSRs
increasing to 197% of equity at 2Q24 from 150% at YE20, the company
has implemented a hedging program to mitigate this risk by
offsetting potential declines in MSR valuations.
Fitch expects total leverage to increase moderately over the
Outlook horizon as origination volumes rise but believes corporate
leverage will decline due to growth in retained earnings.
Improved Funding Flexibility; Shorter Duration Funding: Unsecured
funding comprised 48% of total debt as of 2Q24, pro forma for the
$400 million unsecured note issuance in September 2024. This
improved from 29% at YE23, which Fitch believes provides Provident
with improved funding flexibility in times of stress. While Fitch
expects the unsecured mix to decline as warehouse borrowings
increase to fund higher origination volume, it is expected to
remain above 25% over the Outlook horizon.
However, Fitch believes Provident's funding flexibility remains a
ratings constraint due to its reliance on short-term, wholesale
financing to fund its operations, exposing the company to refinance
and liquidity risks. This is partially mitigated by committed
capacity totalling 36% of warehouse facilities and 86% of MSR lines
at 2Q24, which compares favorably to peers.
Adequate Liquidity: Fitch views Provident's liquidity profile as
adequate to meet its operating cash needs, potential margin calls
and advancing requirements. At 2Q24 pro forma for the recent
issuance, liquidity resources included $26 million of cash and an
estimated $255 million of availability on MSR lines. This equates
to 34% of total debt outstanding, up from 5% at 2Q23 as excess
proceeds from the recent unsecured issuance were used to repay MSR
lines, increasing available borrowing capacity.
Strong Asset Quality: Asset quality risk is not material for
Provident, as nearly all originated loans are conforming agency and
sold shortly after origination. The servicing portfolio's
performance is strong, relative to peers, with a 60-plus day
delinquency rate of 0.2% as of 2Q24, consistent with YE23.
Mortgages have outperformed other consumer assets over the last
year due to strong home equity levels, but rising unemployment
could drive higher delinquencies in 2025-2026. Provident has
exposure to potential repurchase or indemnification claims on loans
sold under certain warranty provisions, but recent claims have been
minimal and reserves remain sufficient.
Stable Outlook: The Stable Outlook reflects Fitch's expectation
that Provident's leverage will remain below 4.0x on a gross basis
and 2.0x on a corporate basis, access to liquidity and funding will
remain sufficient for operating needs, and profitability will
remain stable.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- A sustained increase in corporate leverage above 2.0x;
- A sustained increase in gross leverage above 6.0x;
- A sustained decrease in the unsecured mix below 15%;
- Any franchise erosion, as evidenced by significantly reduced
market share;
- Regulatory scrutiny resulting in substantial fines that
negatively impact Provident's franchise or operating performance;
and/or
- CEO Craig Pica's departure, who has led the company's growth and
direction.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Market share growth that enhances Provident's franchise;
- A sustained reduction in corporate leverage below 1.5x;
- Gross leverage sustained below 5.0x;
- Maintenance of liquidity resources above 20% of total debt;
- Maintenance of unsecured funding above 25% of total debt;
- Improved consistency of profitability, as evidenced by the
maintenance of ROAA over 1% through market cycles;
- Demonstrated effectiveness of corporate governance policies.
DEBT AND OTHER INSTRUMENT RATINGS: KEY RATING DRIVERS
Provident and PFG Finance Corp's senior unsecured debt ratings are
equalized with Provident's IDR. This reflects the funding mix and
availability of unencumbered assets, which suggest average recovery
prospects for debtholders under a stressed scenario.
DEBT AND OTHER INSTRUMENT RATINGS: RATING SENSITIVITIES
The unsecured debt ratings are primarily sensitive to changes in
Provident's IDR and secondarily to the funding mix and available
collateral. An increase in secured debt or a sustained decline in
the level of unencumbered assets that weakens recovery prospects on
the senior unsecured debt could result in the unsecured debt rating
being notched down from the IDR.
ADJUSTMENTS
The Standalone Credit Profile (SCP) has been assigned below the
implied SCP due to the following adjustment reason: Business
Profile (negative).
The Business Profile score has been assigned below the implied
score due to the following adjustment reason: Business model
(negative).
The Asset Quality score has been assigned below the implied score
due to the following adjustment reason: Historical and future
metrics (negative).
The Earnings & Profitability score has been assigned below the
implied score due to the following adjustment reason: Earnings
stability (negative).
The Capitalization & Leverage score has been assigned below the
implied score due to the following adjustment reason: Risk profile
and business model (negative).
ESG Considerations
Provident has an ESG Relevance Score of '4' for Governance
Structure due to elevated key person risk related to its CEO, Craig
Pica, who has led the growth and strategic direction of the
company, as well as the presence of significant levels of ongoing
transactions with affiliated parties. An ESG Relevance Score of '4'
means Governance Structure is relevant to Provident's rating but
not a key rating driver. However, it does have an impact on the
rating in combination with other factors.
Provident also has an ESG Relevance Score of '4' for Customer
Welfare - Fair Messaging, Privacy, and Data Security due to its
exposure to compliance risks including fair lending practices, debt
collection practices and consumer data protection, which has a
negative impact on the credit profile, and is relevant to the
rating in conjunction with other factors.
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Recovery Prior
----------- ------ -------- -----
PFG Finance Corp.
senior unsecured LT B Affirmed RR4 B
Provident Funding
Associates, L.P. LT IDR B Affirmed B
senior unsecured LT B Affirmed RR4 B
RECOMBINETICS INC: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------------
Lead Debtor: Recombinetics, Inc.
3388 Mike Collins Drive
Eagan, MN 55121
Business Description: Recombinetics is a recognized leader in
animal gene editing and associated applied
technologies for biomedical research,
regenerative medicine and animal
agriculture. The Company leverages its
proprietary gene editing platform to
commercialize and deploy technologies
through its BioVentures that pivotally
impact human health and longevity and add
value to farm animals.
Chapter 11 Petition Date: November 11, 2024
Court: United States Bankruptcy Court
District of Delaware
Five affiliates that concurrently filed voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code:
Debtor Case No.
------ --------
Recombinetics, Inc. 24-12593
Acceligen, Inc. 24-12594
Regenevida, Inc. 24-12595
Surrogen, Inc. 24-12596
Therillume, Inc. 24-12597
Debtors' Counsel: Ian J. Bambrick, Esq.
FAEGRE DRINKER BIDDLE & REATH LLP
222 Delaware Avenue, Suite 1410
Wilmington DE 19801
Tel: (302) 467-4200
Email: ian.bambrick@faegredrinker.com
Debtors'
Financial
Advisor: TENEO CAPITAL LLC
Debtors'
Claims &
Noticing
Agent: RELIABLE COMPANIES
Total Assets as of August 31, 2024: $1,712,191
Total Liabilities as of August 31, 2024: $7,665,625
The petitions were signed by Rocco Morelli as chief executive
officer.
Full-text copies of the petitions are available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/7GGY3QQ/Recombinetics_Inc__debke-24-12593__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/7CB6FCY/Acceligen_Inc__debke-24-12594__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/7NYQGAY/Regenevida_Inc__debke-24-12595__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/CHGYFRQ/Surrogen_Inc__debke-24-12596__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/CNYHK4Y/Therillume_Inc__debke-24-12597__0001.0.pdf?mcid=tGE4TAMA
Consolidated List of Debtors' 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
1. Wilson Sonsini Goodrich & Professional $312,834
Rosati Services
650 Page Mill Road
Palo Alto, CA 94304-1050
Maya Skubatch
Tel: 650-849-3330
Email: mskubatch@wsgr.com
2. College of Veterinary Medicine Trade Debt $268,286
Department of Veterinary
Population Medicine
1365 Gortner Ave
St. Paul, MN 55108
Brenda Schmitz
Tel: 612-801-6386
Email: schmi020@umn.edu
3. Trans Ova Genetics, L.C. Trade Debt $264,585
2938 380th St.
Sioux Center, IA 51250
Diane Broek
Tel: 800-999-3586 x3104
Email: Diane.broek@transova.com
4. Gilbert Family Foundation Trade Debt $154,438
1074 Woodward Ave
Detroit, MI 48226
Laura Grannemann
Email: lauragrannemann@gilbertfamilyfoundation.org
5. Baker Tilly US, LLP Professional $47,565
225 South Sixth Street Services
Minneapolis, MN 55402
John Dauwalter
Tel: 952-994-8873
Email: john.dauwalter@bakertilly.com
6. University of Florida Trade Debt $44,501
Suite 1250
East Campus Office Bldg
PO Box 113201
Gainesville, FL 32611-3201
Patrick Koroma-Tommy
Tel: 202-836-9953
Email: pkoroma-tommy@foundationfar.org
7. Eagan Properties, LLC Trade Debt $39,757
1224 West 96th Street
Bloomington, MN 55431
Jay Mutschler
Tel: 612-701-8088
Email: jaym@jgmproperties.com
8. P-Tech LLC Trade Debt $26,871
42353 170th Street
Glencoe, MN 55336
9. Minnesota Department of Trade Debt $24,166
Employment and Economic
Development
180 E 5th St, Suite 1200
Saint Paul, MN 55101
Tel: 651-259-7114
Email: DEED.CustomerService@state.mn.us
10. University of Guelph Trade Debt $17,065
50 Stone Rd East
Guelph, Onterio CA N1G 2W1
Gregor Lawson
Email: lawsong@uoguelph.ca
11. Brian Milbrand, LLC Trade Debt $14,587
42353 170th Street
Glencoe, MN 55336
Brian Milbrand
Email: Brian.Milbrand@recombinetics.com
12. Regents of the University of Trade Debt $13,605
Minnesota Suite 450
McNamara Alumni Center
200 Oak St SE
Minneapolis, MN 55455
Nicole Pilman
Tel: 612-624-1617
Email: npilman@umn.edu
13. Hawkeye Breeders Inc Trade Debt $10,004
& Gold Label
32642 Old Portland Road
Adel, IA 50003
Tel: 515-993-4711
Email: billing@hawkeyebreeders.com
14. University College Dublin Trade Debt $9,295
Room 107
Tierney Building
UCD
Dublin 4
IR D04 V1W8
Stephen Manuel
Email: stephen.manuel@ucd.ie
15. Northern Balance & Scale, Inc. Trade Debt $7,890
9150 Isanti Street NE
Blaine, MN 55449
Jessica Schwan
Tel: 952-881-7716
Email: jessicas@nbscalibrations.com
16. Scientific Solutions, LLC Trade Debt $7,715
5155 E. River Road
Suite 413
Fridley, MN 55421
Tel: 612-910-3390
Email: jthorsten@scientificsolutionscorp.com
17. Integrated Breeders Trade Debt $7,227
Service Plus, LLC
PO Box 93
Wheelock, TX 77882
Paige Phillips
Tel: 979-828-5531
Email: paige@integratedbreeders.com
18. Tech Bridge Inc. Trade Debt $7,000
1325 Garland Lane
N Plymouth, MN 55447
Mark Stahl
Tel: 612-360-1050
Email: emtstahl@gmail.com
19. TNT Cleaning and Trade Debt $6,055
Consulting, Inc.
13950 Radium S NW #300
Ramsey, MN 55303
Jody Salzbrunn
Tel: 763-421-9597
Email: JSalzbrunn@mh-inc.com
20. Adrienne Biggar PhD Trade Debt $6,000
Adrienne Watson
Email: wats0189@gmail.com
RENOVARO INC: Registers Up to $200M in Securities Offering
----------------------------------------------------------
Renovaro Inc. filed a preliminary prospectus on Form S-3 with the
U.S. Securities and Exchange Commission, disclosing that the
Company may, from time to time, in one or more offerings at prices
and on terms that the Company will determine at the time of each
offering, sell common stock, warrants, or a combination of
securities, or units, up to a total offering price of
$200,000,000.
The Common Stock is listed on The Nasdaq Capital Market under the
symbol "RENB". On October 29, 2024, the last reported sales price
for the Company's common stock was $0.51 per share.
Renovaro may offer the securities directly or through agents or to
or through underwriters or dealers. If any agents or underwriters
are involved in the sale of the securities their names, and any
applicable purchase price, fee, commission or discount arrangement
between or among them, will be set forth, or will be calculable
from the information set forth, in an accompanying prospectus
supplement. The Company can sell the securities through agents,
underwriters or dealers only with delivery of a prospectus
supplement describing the method and terms of the offering of such
securities.
A full-text copy of the prospectus is available at:
https://tinyurl.com/mr7xcana
About Renovaro Inc.
Headquartered in Los Angeles, Calif., Renovaro Inc. --
http://www.renovarobio.com-- formerly Renovaro BioSciences Inc.,
is a biotechnology company intending, if the necessary funding is
obtained, to develop advanced allogeneic cell and gene therapies to
promote stronger immune system responses potentially for long-term
or life-long cancer remission in some of the deadliest cancers, and
potentially to treat or cure serious infectious diseases such as
Human Immunodeficiency Virus (HIV) infections. As a result of the
Company's acquisition of GEDi Cube Intl on Feb. 13, 2024, the
Company has shifted the Company's primary focus and resources to
the development of the GEDi Cube Intl technologies.
Draper, Utah-based Sadler, Gibb & Associates, LLC, the Company's
auditor since 2018, issued a "going concern" qualification in its
report dated Oct. 10, 2024, citing that the Company has incurred
substantial recurring losses from operations, has used cash in the
Company's continuing operations, and is dependent on additional
financing to fund operations which raises substantial doubt about
its ability to continue as a going concern.
ROVER PROPERTIES: Gets OK to Use Fulton Bank's Cash Collateral
--------------------------------------------------------------
A U.S. bankruptcy judge signed a consent order allowing Rover
Properties, LLC to use the cash collateral of Fulton Bank, N.A.
The consent order, signed by Judge Michelle Harner of the U.S.
Bankruptcy Court for the District of Maryland, authorized the
company to use its secured creditor's cash collateral to pay
property expenses from Oct. 9 to Dec. 31.
Fulton Bank initially opposed the use of its cash collateral, which
consists of rental income from the company's property in Hampstead,
Md. Following negotiations with Rover, the bank consented to the
use of its collateral so long as the company complies with the
terms of the consent order.
The consent order granted Fulton Bank a replacement lien on all
rental income received by Rover after its bankruptcy filing. In
addition, the consent order approved the payment of $13,908.02 to
Fulton Bank as adequate protection and directed the bank to apply
such payment against interest due under its loan agreement with the
company.
Fulton Bank claims it is owed more than $1 million under the loan
agreement. Payment of the loan is secured by a first priority lien
on the Hampstead property.
The next hearing is scheduled for Dec. 19.
About Rover Properties
Rover Properties, LLC owns a gas station, a convenience store, and
three apartments located at 201 Hanover Pike, Hampstead, Md.,
valued at $1.5 million.
Rover Properties sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Md. Case No. 24-18524) on October 9,
2024, with total assets of $1,593,000 and total liabilities of
$968,000. Nikunj M. Patel, company owner, signed the petition.
Judge Michelle M. Harner oversees the case.
The Debtor is represented by William Sherwood, Esq., at FNS Law
Group.
SOLDIER OPERATING: Affiliate OK'd to Sell Pastoral Land for $1.8MM
------------------------------------------------------------------
Soldier Operating LLC and its affiliate, Viceroy Petroleum, LP,
sought and obtained permission from the U.S. Bankruptcy Court for
the Western District of Louisiana, LaFayette Division, to sell
tracts of pastoral land, free and clear of all liens, claims,
interests, and encumbrances.
Viceroy Petroleum wishes to sell approximately 196 acres with all
improvements located in Milam County, Texas, described as Tracts 1
and 2.
The Property is subject to secured claims by Great Central Mortgage
Acceptance Company, Ltd. (GCMAC) in the amount of $880,197.71 as
the first priority lien, and Rhapsody Funding, LLC in the amount
of $220,281.91 as the second priority.
The Debtors seek to sell the Property, free and clear of all liens,
interests, and encumbrances, but subject to ordinary exceptions to
the following conveyance:
1. Approximately 140.7 acres of the Property to Circle M8 Land
and Cattle for a total price of $1,330,000; and
2. The balance of the Property, consisting of approximately 55
acres, to Abbie Ferguson for a total price of $522,000.
Circle M8 is a non-insider that presently uses the Property for
cattle farming operations.
Abbie Ferguson is a limited partner of Viceroy Petroleum and has a
holding of 10% of the interest in the Property.
The consummation of the transactions contemplated shall take place
no later than November 25, 2024, but may be delayed in consultation
with GCMAC and Rhapsody to accommodate logistical issues in the
closings.
The Debtor seeks to authorize Matthew Ferguson, President of
Viceroy Petroleum, to execute all approved transaction documents in
the sale.
The market analysis of the Property submitted by GCMAC and Rhapsody
reflects a valuation in the range of $1.8 million to $2.4 million
with a marketing time of six or more months, and a "quick sale"
valuation of $1.56 million to $1.96 million. Thus, the proposed
Sale price of $1,852,000 is in the upper half of the "quick sale"
range, and falls just within the range estimated should a party
undertake extended marketing efforts of six months or more.
The Debtor obtained appraisals of the Property, yielding valuations
of $1.4 million for the approximately 140.6 acres to be purchased
by Circle M8 and $580,000 for the approximately 55 acres to be
purchased by Abbie Ferguson. Thus, the purchase price for Sale 1
($1.33 million) is 95% of the appraised value. The purchase price
for Sale 2 ($522,000) is 90% of the appraised value.
The Debtor's income from ordinary business operations is projected,
as of November 30, 2024, to be insufficient to cash flow its
post-petition payable.
Circle M8 presently maintains cattle on portions of the Property,
has an existing connection to the Property, and sees value in the
rural Property that others may not. Abbie Ferguson has a connection
to the Property due to her parents' long ownership of the Property,
which she considers the "family ranch."
As part of the sale, the Debtor requests that Circle M8 receive
Section 363(m) protections. Although the Debtor believes it could
establish that Abbie Ferguson is entitled to Section 363(m)
protections, her status as an insider modifies the analysis and
considerations, and may unduly slow the sale process.
Additionally, because the Debtor believes GCMAC and Rhapsody
respectively hold valid, perfected, and unavoidable first priority
and second priority liens in the Property, the Debtor requests
authority to pay GCMAC and Rhapsody from the Sale Proceeds.
GCMAC has provided a payoff quote of $951,625.70, with a per diem
of $344.90 thereafter, while Rhapsody has provided a payoff quote
of $235,823.31 with a per diem of $86.23 thereafter.
In addition to there being no apparent lien dispute, the Debtor
believes a paydown of debt by more than $1 million will help it in
reorganization.
Further, Circle M8 and Abbie Ferguson both backed their commitments
to the Sales by depositing earnest money in the amount of $5,000
each.
About Soldier Operating LLC
and Viceroy Petroleum LP
Soldier Operating, LLC and Viceroy Petroleum, LP filed voluntary
petitions for relief under Chapter 11 of the Bankruptcy Code
(Bankr. W.D. La. Lead Case No. 24-50387) on May 13, 2024. At the
time of the filing, Soldier Operating disclosed $5,615,631 in
assets and $6,089,722 in liabilities.
Viceroy Petroleum owns certain interests in oil, gas and/or mineral
leases, subleases, leasehold and contractual rights in mineral
interests, and other leasehold interests related to State Lease No.
340, Cote Blanche Island (CBI) field, St. Mary Parish, Louisiana.
Judge John W. Kolwe presides over the cases.
The Debtors tapped Bradley L. Drell, Esq., at Gold, Weems, Bruser,
Sues & Rundell, APLC as legal bankruptcy counsel. Viceroy
Petroleum retained Chaffe & Associates, Inc. as investment broker.
The U.S. Trustee appointed an official committee of unsecured
creditors in these Chapter 11 cases. The committee tapped H. Kent
Aguillard, Esq., and Caleb K. Aguillard, Esq., and Stewart Robbins
Brown & Altazan, LLC as co-counsel.
STAR INTERMEDIATE: Fitch Alters Outlook on 'B+' IDR to Negative
---------------------------------------------------------------
Fitch Ratings has affirmed the Long-Term Issuer Default Ratings
(IDRs) of Star Intermediate Holdings, Inc. and Star Parent, Inc.
(collectively, Syneos Health) at 'B+' and revised the Rating
Outlook to Negative from Stable. Fitch has also downgraded the
ratings of Star Parent, Inc.'s senior secured debt instruments to
'BB-' with a Recovery Rating of 'RR3' from 'BB'/'RR2'.
The affirmation and 'B+' IDR reflect Fitch's view of Syneos' solid
business profile, ample liquidity, and meaningful progress in
addressing operational challenges. However, the Negative Outlook
reflects Syneos' higher-than-expected leverage and
slower-than-anticipated progress in revitalizing growth prospects
and improving profit margins following the leveraged buyout
transaction in 2023. The Negative Outlook further incorporates
ongoing volatilities in the biopharmaceutical end markets and
execution risks associated with Syneos consistently winning new
business awards and meaningfully realizing benefits from its cost
saving initiatives over the next 12 months.
Fitch anticipates that Fitch-defined EBITDA leverage will remain
above 6.0x in 2024 and 2025 and around 6.0x in 2026, approximately
24 months from this rating action, as compared to the 5.0x-6.0x
range that the 'B+' IDR contemplates.
The downgrade of the senior secured debt ratings to 'BB-'/'RR3'
from 'BB'/RR2 reflects Fitch's revision of the going-concern EBITDA
assumption in the bespoke recovery analysis used to assign
instrument ratings due to Fitch's expectation of a greater
depletion in revenue and EBITDA from the current levels, in
comparison to Fitch's prior estimates, to cause a default or
restructuring.
Key Rating Drivers
Reprioritization and R&D Spending: Fitch expects pharmaceutical R&D
spending to grow in the low to mid-single-digit range in 2025, and
Fitch believes smaller and/or lower-rated contract research
organizations (CROs) are at risk if a period of slow R&D spending
growth in the U.S. extends. Large pharmaceutical companies have
increasingly cited the Inflation Reduction Act, losses of
exclusivity, and the macroeconomic environment as key reasons for
conservatively managing R&D budgets and reallocating resources to
the most promising projects. This has led to the cancellation and
delay of clinical trials for products that would face significant
competition or do not meet the previously assumed risk-return
profiles.
Cautious Capital Deployment: Fitch anticipates that small and
mid-sized biotechnology companies will remain active in the capital
markets over the next 24 months to support R&D activities. However,
Fitch understands based on comments by CRO management teams that
there is a disproportionate number of biotechnology firms facing
funding gaps, resulting in high cancellation rates across all
therapeutic areas. Slower decision-making and capital allocation
processes have led to further study delays and slower trial starts
in 2024. Fitch expects cancellation rates to remain elevated in the
short term and potentially persist beyond the first half of 2025 if
the current business environment does not improve.
Subdued Short-Term Outlook: Fitch anticipates that revenues will
decline in the low to mid-single-digit range in the next 12 months.
This reflects Fitch's expectation of decreased clinical service
revenue due to fewer new business awards and a lower level of
backlog entering into 2024 and 2025. Fitch assumes that revenue
growth would recover in the low to mid-single-digit range in
2026-2027. Although Fitch recognizes the progress Syneos has made
in resolving its operational issues, the Negative Outlook captures,
in part, the risk of further delayed or less meaningful growth as a
result of additional headwinds from the biopharmaceutical end
markets.
Pricing and Customer Preference: Fitch expects global CROs to
remain disciplined with their pricing strategies to maintain
profitability and service quality. Additionally, Fitch sees mixed
implications from large pharmaceutical companies' increasing
preference for functional services. While Fitch anticipates that
gross margins would be unfavorably affected, functional services
typically entail lower SG&A and reimbursable expenses. Fitch also
views artificial intelligence and employee productivity as
additional mitigating factors to sustain EBITDA margins. Fitch
expects small to mid-sized biotechnology companies to maintain
their preferences for full services.
Improvement Below Expectation: Fitch expects Fitch-defined EBITDA
margins to decline by 90 bps-100 bps in 2024 from nearly 10% in
2023 but improve to 10%-11% in 2025. Margin contraction in 2024 is
driven by fewer billable hours due to a lower level of backlog at
the beginning of the year, higher reimbursable expenses as a
percentage of revenue, and Syneos' ongoing efforts to balance
customer project delivery with cost reduction actions. This is
partially mitigated by reduced facility costs and lower bad debt
expenses.
Fitch's expectation of margin improvements in 2025 is supported by
a combination of gross margin improvements from reduced headcount
within clinical service business in 2024 and improved staffing
utilization, lower SG&A from process optimization and automation
initiatives, and reduced integration and restructuring activities.
Fitch believes consistent revenue growth to be an important driver
to margin expansions after 2025.
Capital Deployment Priorities: Fitch expects Fitch-defined EBITDA
leverage to remain above 6.0x in 2024 and 2025, and forecasts that
leverage would gradually decline to 6.0x by YE 2026 predominantly
through EBITDA growth. The Negative Outlook captures, in part, the
risk of slower progression in margin improvements that would likely
result in leverage sustaining above 6.0x beyond 2026.
Fitch expects Syneos to remain focused on improving customer
perception through increased delivery capability and operational
consistency, strengthening core therapeutic areas, expanding
clinical services into complementary markets and geographies, and
transitioning commercial solutions into higher-growth and
higher-margin businesses. Fitch anticipates that the company will
remain opportunistic if and when M&A opportunities emerge. Fitch
believes any excess cash that is above operational requirements and
not earmarked for acquisitions would be directed towards debt
prepayment.
Derivation Summary
The 'B+' IDR reflects Syneos' position as one of the leading CROs
in global markets, significant portion of contracted and recurring
revenue, and diversified customer base and service offerings. The
rating is constrained by high leverage following the leverage
buyout transaction in 2023, execution risks with regards to Syneos'
business turnaround strategies and cost saving initiatives, and
continued volatilities in the biopharmaceutical end markets.
The higher ratings of Syneos' public peers reflect their larger
scale, higher profitability levels, and lower leverage. Charles
River Laboratories International, Inc. (BBB-/Stable) maintains a
strong competitive position in the pre-clinical CRO segment and has
a track-record of leverage maintenance. Despite recent setbacks,
Fortrea Holdings, Inc. (BB-/Negative) maintains its commitment to a
net leverage target of 2.5x-3.0x over the medium to long term, with
the Negative Outlook reflecting Fitch's expectation that it will be
operating with higher leverage in the near-term.
Parent-Subsidiary Linkage Analysis
The IDRs of Star Intermediate Holdings, Inc. and Star Parent, Inc.
are rated on a consolidated basis, using the stronger subsidiary
approach, open access and control factors based on the intercompany
guarantees of senior secured debt instruments, and the entities
operating as a single enterprise with strong legal and operational
ties.
Key Assumptions
- Revenue to decline 5.0%-6.0% and EBITDA margins of approximately
9.0% in 2024;
- Revenue growth to recover to the low to mid-single-digit range in
2026-2027;
- EBITDA margins of 10%-11% in 2025 and 11%-12% in 2026-2027;
- Effective interest rates of 8.0%-9.0% over the forecast period,
moving with SOFR;
- Capex of $90 million-$95 million in 2024 and of 1.5%-2.0% of
revenue per annum thereafter;
- Negative FCF in 2024 that would turn positive in 2025-2027 in the
range of 2.5%-3.5% of revenue;
- Acquisitions totaling $250 million after 2025;
- No allocation of discretionary FCF towards voluntary debt
prepayment or dividend.
Recovery Analysis
The 'BB-'/'RR3' ratings for the senior secured credit facilities
and notes reflect Fitch's estimated recoveries in the range of
51%-70% for such debt instruments in a bankruptcy scenario. Fitch
assumes that Syneos would be reorganized in bankruptcy as a going
concern (GC), rather than liquidated, to maximize the value
distributable to claims.
Fitch estimates an enterprise value (EV) on a going-concern basis
of $2.6 billion, after deducting 10% for administrative claims
assumed to be accrued from restructuring. The estimated EV reflects
an estimated post-reorganization EBITDA (GC EBITDA) of $415
million, reflecting Fitch's view that GC EBITDA around this level
is likely to trigger a default or restructuring amid significant
refinancing risk from negative cash flow generation and high
leverage. Fitch does not assume any upside in GC EBITDA from
corrective measures in a restructuring.
The GC EBITDA of $415 million has been lowered by approximately 25%
from the previous GC EBITDA to reflect Fitch's expectation that a
greater depletion in revenue and EBITDA from the current levels, in
comparison to Fitch's prior estimates, would be needed to cause a
default as the prior assumption was comparable to the current
EBITDA levels.
Fitch's assumed GC EBITDA is based on a scenario in which (a)
unfavorable macroeconomic conditions and regulatory environment
materially reduce R&D spending and further delay customer spending
decisions, (b) employee turnover impacts cancellation rates and (c)
cost savings do not materialize to offset, resulting in further
EBITDA margin contraction.
The EV also reflects Fitch's use of a 7.0x EV/EBITDA multiple. This
reflects (a) high barriers to become a large-scale CRO that can
serve customer demand and support clinical trials on a global
scale, (b) generally stable biopharmaceutical R&D spending through
economic cycles, and (c) Syneos' competitive position among top
global CROs and high level of contracted and recurring revenue. The
7.0x multiple compares to the median 6.3x multiple observed in
Fitch's case studies of previous bankruptcies in the healthcare
sector. The multiple assumption for Syneos has not changed.
In estimating claims, Fitch assumes that Syneos would draw the full
amount available under the $500 million revolving facility, and
includes that amount of debt in the claims waterfall. The waterfall
analysis further reflects senior secured claims consisting of
approximately $3.7 billion, all of which are collateralized the by
the capital stock of Star Parent, Inc. and substantially all of the
assets of Star Parent, Inc. and Syneos Health, Inc.'s wholly-owned
U.S. restricted subsidiaries.
As Syneos does not expect its non-guarantor subsidiaries (Syneos
Health, Inc.'s foreign subsidiaries) to incur any debt, Fitch
assumes that the value generated by non-guarantor subsidiaries will
be fully available to creditors, resulting in the senior secured
debt instruments recovering in the 51%-70% range.
RATING SENSITIVITIES
The Outlook could be revised to Stable if growth prospects improve
and margins stabilize meaningfully above Fitch's current
expectations, providing a clear path to reducing leverage to below
6.0x in the next 12 months.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Improved growth prospects, profit margin expansion, and capital
deployment strategy that lead to Fitch's expectation that EBITDA
leverage will be maintained below 5.0x;
- Fitch's expectation that (CFO-capex)/debt will be sustained above
5.0%.
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Diminished growth prospects, profit margin contraction, and
capital deployment strategy that lead to Fitch's expectation that
EBITDA leverage will be maintained above 6.0x;
- Fitch's expectation that (CFO-capex)/debt will be sustained below
2.5% and EBITDA interest coverage sustained below 2.5x.
Liquidity and Debt Structure
Sufficient Liquidity: Liquidity is supported by $383 million of
cash on hand and $485 million available under the revolving
facility as of June 30, 2024. Fitch forecasts positive
Fitch-defined CFO in excess of $100 million per annum over the
rating horizon.
However, Fitch expects Syneos to generate negative Fitch-defined
FCF in 2024, driven by continued operational weakness and
significant integration and restructuring activities. Subsequently,
Fitch anticipates that the company will generate positive FCF in
the range of 2.5%-3.5% of revenue, assuming improved operating
fundamentals, reduced one-time expenses, realized benefits from
cost saving actions, and moderation in working capital outflows. In
the rating case, Fitch does not assume that Syneos will prepay debt
beyond the annual term loan amortization.
Limited Refinancing Risk: Syneos has no near-term debt maturities,
with the revolving facility maturing in 2028 and the term loans B
and notes maturing in 2030. Term loan amortization is approximately
$20 million in 2024 and $27 million per annum thereafter. Fitch
assumes effective interest rates of 8.0%-9.0% over the forecast
period.
Syneos is required to maintain a first lien leverage ratio of no
more than 7.25x only when more than 40% of the revolving facility
is outstanding. Over the rating horizon, Fitch expects the company
to have sufficient headroom to meet short-term liquidity needs.
Issuer Profile
Star Intermediate Holdings, Inc. and its subsidiaries (d/b/a Syneos
Health) provide development and commercialization solutions to
small, mid-sized, and large companies in the biopharmaceutical and
medical device industries.
Summary of Financial Adjustments
Fitch excludes non-cash and non-recurring expenses from EBITDA.
These expenses include stock-based compensation, merger- and
integration-related costs, and restructuring and other related
costs.
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
----------- ------ -------- -----
Star Intermediate
Holdings, Inc. LT IDR B+ Affirmed B+
Star Parent, Inc. LT IDR B+ Affirmed B+
senior secured LT BB- Downgrade RR3 BB
SWAN PIZZA: Gets Interim OK to Use Cash Collateral Thru Nov. 14
---------------------------------------------------------------
Swan Pizza, Inc. received interim approval from the U.S. Bankruptcy
Court for the Middle District of Florida, Orlando Division to use
cash collateral to pay its expenses through Nov. 14.
The interim order authorized Swan Pizza to use the cash collateral
of secured creditors Channel Partners Capital, LLC and the
Department of Revenue, or if necessary, the cash collateral of
Jokim LLC, Pepsi Co and the Internal Revenue Service.
Secured creditors will be granted replacement liens on cash
collateral to the same extent and with the same validity and
priority as their pre-bankruptcy liens.
The next hearing is scheduled for Nov. 14.
About Swan Pizza
Swan Pizza, Inc. sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. M.D. Fla. Case No. 24-03735) on July 22,
2024, with up to $50,000 in assets and up to $500,000 in
liabilities.
Judge Tiffany P. Geyer presides over the case.
Robert H. Zipperer, Esq., represents the Debtor as legal counsel.
TAKEOFF TECHNOLOGIES: Unsecureds Owed $37M to Get 1.58% in Plan
---------------------------------------------------------------
Takeoff Technologies, Inc., and its affiliates filed with the U.S.
Bankruptcy Court for the District of Delaware a Combined Disclosure
Statement and Joint Chapter 11 Plan dated September 27, 2024.
The Debtors were founded in 2016 by a group of former grocery
executives, who sought to provide a platform for micro-fulfillment
centers for large grocery retailers.
As set forth in the First Day Declaration, the Debtors' paramount
goal in the Chapter 11 Cases is to maximize the value of the
estates for the benefit of the Debtors' creditor constituencies and
other stakeholders through the sale of substantially all of the
Assets. On June 6, 2024, the Debtors filed a motion (the "Bidding
Procedures Motion") seeking authority to proceed with a bidding and
auction process to consummate a sale or series of sales (the "Sale
Process") that the Debtors expect will generate maximum value for
their assets.
To facilitate the Sale Process, the Debtors, in consultation with
Huron and their other professional advisors, proposed certain
customary bidding procedures (the "Bidding Procedures") to preserve
flexibility in the Sale Process, generate the greatest level of
interest in the Debtors' assets, and result in the highest or
otherwise best value for those assets. Given the Debtors' liquidity
situation at the outset of the Chapter 11 Cases, the Debtors
believed that a timely sale of their assets would maximize value to
the greatest extent possible under the circumstances of these
Chapter 11 Cases, and generate the highest possible recoveries in
the most efficient and expeditious manner possible, which will
inure to the benefit of the Debtors' creditors and other
stakeholders.
The only qualified bid received pursuant to the Bidding Procedures
Order was submitted by Woolworths Group Limited for a credit bid of
its respective DIP Loan Claims. Accordingly, Woolworths Group
Limited was selected as the successful bidder for the collateral
granted under the Final DIP Order and certain other of the Debtors'
Assets. On August 16, 2024, the Court entered the Sale Order.
In the Debtors' business judgment, with which the Committee and the
DIP Lenders agreed, the Global Settlement was reasonable and in the
best interest of the Debtors, their estates, creditors and all
parties in interest, including the Holders of Allowed General
Unsecured Claims. The Global Settlement was the product of good
faith and arm's-length negotiations between the parties. As a
result of the Global Settlement, the General Unsecured Creditors
will receive an assured recovery in all Sub-Classes in Class 3
that, absent the Global Settlement, would either be unlikely or the
result of substantial, costly and time-consuming litigation.
After the closing of the Sale, the Debtors will focus on
efficiently winding down their businesses, preserving Cash held in
the Estates, and monetizing their remaining Assets. The remaining
Assets may currently consist of, among other things, Cash, certain
deposits, prepayments, credits and refunds, insurance policies or
rights to proceeds thereof, accounts receivables, and Retained
Causes of Action. This combined Plan and Disclosure Statement
provides for the Assets, to the extent not already liquidated, to
be liquidated over time and the proceeds thereof to be distributed
to holders of Allowed Claims in accordance with the terms of the
Plan and the treatment of Allowed Claims described more fully
herein.
Class 3A consists of Takeoff Technologies, Inc. General Unsecured
Claims. Unless the Holder agrees to a different treatment, each
Holder of a General Unsecured Claim shall receive such Holder's pro
rata share of the Distribution Proceeds. The allowed unsecured
claims total $36,976,772.00. This Class will receive a distribution
of 1.58% of their allowed claims.
Class 3B consists of Takeoff Technologies Australia Pty Ltd.
General Unsecured Claims. Unless the Holder agrees to a different
treatment, each Holder of a General Unsecured Claim shall receive
such Holder's pro rata share of the Distribution Proceeds. The
allowed unsecured claims total $2,272.780.00. This Class will
receive a distribution of 3.45% of their allowed claims.
Class 3C consists of Takeoff Technologies Canada, Inc. General
Unsecured Claims. Unless the Holder agrees to a different
treatment, each Holder of a General Unsecured Claim shall receive
such Holder's pro rata share of the Distribution Proceeds. The
allowed unsecured claims total $2,262,755.00. This Class will
receive a distribution of 1.69% of their allowed claims.
Class 3D consists of Takeoff Technologies FZE General Unsecured
Claims. Unless the Holder agrees to a different treatment, each
Holder of a General Unsecured Claim shall receive such Holder's pro
rata share of the Distribution Proceeds. The allowed unsecured
claims total $2,262,755.00. This Class will receive a distribution
of 1.69% of their allowed claims.
Class 3E consists of Takeoff International Subco, LLC General
Unsecured Claims. Unless the Holder agrees to a different
treatment, each Holder of a General Unsecured Claim shall receive
such Holder's pro rata share of the Distribution Proceeds. The
allowed unsecured claims total $2,262,755.00. This Class will
receive a distribution of 1.69% of their allowed claims.
Class 3F consists of Takeoff International Subco India Pvt Ltd.
General Unsecured Claims. Unless the Holder agrees to a different
treatment, each Holder of a General Unsecured Claim shall receive
such Holder's pro rata share of the Distribution Proceeds. The
allowed unsecured claims total $2,262,790.00. This Class will
receive a distribution of 9.20% of their allowed claims.
All consideration necessary to make all monetary payments in
accordance with the Plan shall be obtained from the remaining Cash,
and cash equivalents of the Debtors and their Estates, or their
subsidiaries, and the proceeds of Plan Administration Assets to be
monetized through the Plan Administrator.
A full-text copy of the Disclosure Statement dated September 27,
2024 is available at https://urlcurt.com/u?l=vzWlYe from
PacerMonitor.com at no charge.
Co-Counsel for the Debtors:
Justin Bernbrock, Esq.
Robert B. McLellarn, Esq.
SHEPPARD, MULLIN, RICHTER & HAMPTON LLP
321 North Clark Street, 32nd Floor
Chicago, Illinois 60654
Tel: (312) 499-6300
Fax: (312) 499-6301
E-mail: jbernbrock@sheppardmullin.com
rmclellarn@sheppardmullin.com
- and -
Alexandria G. Lattner, Esq.
650 Town Center Drive, 10th Floor
Costa Mesa, California 92626
Tel: (714) 513-5100
Fax: (714) 513-5130
E-mail: alattner@sheppardmullin.com
Co-Counsel for the Debtors:
Joseph M. Mulvihill, Esq.
Shella Borovinskaya, Esq.
Kristin L. McElroy, Esq.
YOUNG, CONAWAY, STARGATT & TAYLOR LLP
Rodney Square
1000 North King Street
Wilmington, DE 19801
Tel: (302) 571-6600
Fax: (302) 571-1253
E-mail: jmulvihill@ycst.com
sborovinskaya@ycst.com
kmcelroy@ycst.com
About Takeoff Technologies
Founded in 2016 by a group of former grocery executives, Takeoff
Technologies, Inc. and its affiliates operate one of the leading
The U.S. Trustee for Region 3 appointed an official committee to
represent unsecured creditors in the Chapter 11 cases of Takeoff
Technologies, Inc. and its affiliates. eGrocery, micro-fulfillment
solution companies in the world. The Debtors' business model
centers around the sale, subsequent maintenance, and support of the
equipment and software needed to operate micro-fulfillment centers
-- i.e. small, automated, robotic warehouses
calledmicro-fulfillment centers, either placed in grocery stores or
near the end-shoppers.
The Debtors filed Chapter 11 petition (Bankr. D. Del. Lead Case No.
24-11106) on May 30, 2024. At the time of the filing, Takeoff
Technologies reported $50 million to $100 million in assets and $10
million to $50 million in liabilities.
Judge Craig T. Goldblatt oversees the cases.
The Debtors tapped Sheppard, Mullin, Richter & Hampton, LLP as lead
bankruptcy counsel; Young Conaway Stargatt & Taylor, LLP as local
bankruptcy counsel; Huron Transaction Advisory, LLC as investment
banker; and Huron Consulting Services, LLC as financial and
restructuring advisor. John C. Didonato and Brett M. Anderson of
Huron Consulting Services serve as the Debtors' chief restructuring
officer and deputy chief restructuring officer, respectively. Kroll
Restructuring Administration LLC is the Debtors' claims and
noticing agent.
The U.S. Trustee for Region 3 appointed an official committee to
represent unsecured creditors in the Debtors' Chapter 11 cases. The
committee tapped Kilpatrick Townsend & Stockton, LLP and Ashby &
Geddes, P.A. as legal counsels; Eversheds Sutherland (US), LLP as
co-counsel; and Dundon Advisers, LLC as financial advisor.
TGI FRIDAY'S: Searches for Buyer, Faces Bond Sale Challenges
------------------------------------------------------------
Jonathan Randles of Bloomberg News reports that TGI Friday's Inc.
is in talks with prospective buyers, according to a company
attorney on Monday, November 4, 2024, who also revealed that the
business experienced a significant revenue loss after losing
control of assets securing $375 million in bonds issued in 2017.
According to Bloomberg News, the company, which filed for
bankruptcy on Saturday, November 2, 2024, reported that multiple
parties have expressed interest in acquiring part or all of TGI
Friday's operations, attorney Chris Dickerson stated at the chain's
initial bankruptcy hearing in Texas. The names of these potential
buyers were not disclosed and remain unknown.
About TGI Fridays
Founded in 1965 in New York City, New York, TGI Friday's Inc. and
affiliates are the owners and franchisors of original casual dining
bar and grill, TGI Fridays, offering classic American food and
beverages, with 39 restaurant locations being owned and operated by
the Company. The Company is known for bringing people together to
socialize and celebrate the liberating spirit of "Friday."
TGI Friday's Inc. and about 20 of its affiliates filed for
bankruptcy protection (Bankr. N.D. Texas, Lead Case No. 24-80069)
on November 2, 2024. In petitions signed by Kyle Richter as chief
restructuring officer, the Debtors reported $100 million to $500
million in estimated consolidated assets and estimated consolidated
liabilities.
The Hon. Stacey G. Jernigan presides over the cases.
Ropes and Gray LLP serves as the Debtors' general bankruptcy
counsel, and Foley & Lardner LLP serves as the Debtors'
co-bankruptcy counsel. Berkeley Research Group, LLC acts as
financial advisor to the Debtors and Stretto, Inc. is notice and
claims agent to the Debtors.
THE SOURCE INC: Deep Roots Closes Acquisition of Assets
-------------------------------------------------------
Adam Jackson of greenmarketreport.com reports that Deep Roots
Harvest has finalized its purchase of The Source's assets. The
deal effectively rescued the company from receivership amid the
ongoing consolidation within Nevada's cannabis industry, the report
notes.
According to the Green Market report, Deep Roots acquired several
of the company's retail locations in Las Vegas, Henderson, North
Las Vegas, and Pahrump, along with two provisional licenses, one of
which is for a cannabis consumption lounge, and a cultivation
facility. The financial details of the transaction were not
disclosed.
Because of the pandemic, The Source indefinitely suspended its
cannabidiol business, leading to the appointment of a receiver.
Operations at the company's dispensaries in the Las Vegas area was
restricted due to Nevada Governor Stephen Sisolak's March 20, 2020
order, which limited dispensary operations statewide. In July 2023,
Jacques Santucci, President of Opus Consulting, was appointed as
the Receiver of The Source by a Nevada District Court, with
approval from the Nevada Cannabis Compliance Board. In this role,
Opus has assumed control of the company's assets, overseeing
business operations with the help of the current staff, while also
preparing to market the assets for sale later in 2023, the report
states.
Deep Roots will continue using The Source's retail branding while
integrating cultivation and production operations from both
companies. The merger positions Deep Roots as one of the largest
operators in the state, with over 400 employees statewide and one
of Nevada’s largest cultivation facilities, according to the
report.
According to the report, The Source secured a consumption lounge
license as the state expands its cannatourism efforts. In August,
regulators issued six new lounge permits, with 38 more in
development. Lawmakers are also exploring the possibility of
allowing temporary pop-up lounges at festivals and events.
About The Source Inc.
The Source Inc. is a state-of-the-art medical cannabis dispensary
in Nevada.
The Source's parent company, Green Growth Brands Inc. and several
subsidiaries filed in May 2020 for insolvency protection under the
Companies' Creditors Arrangement Act (Canada) and obtained an order
from the Ontario Superior Court of Justice granting the Applicants
protection under the CCAA. Ernst & Young Inc. was appointed as
monitor of the Applicants.
THOMAS ROOFING: Hits Chapter 11 Bankruptcy in Florida
-----------------------------------------------------
Thomas Roofing and Repair Inc. filed Chapter 11 protection in the
Middle District of Florida. According to court documents, the
Debtor reports $2,428,473 in debt owed to 1 and 49 creditors. The
petition states funds will not be available to unsecured
creditors.
A meeting of creditors under 11 U.S.C. Section 341(a) is slated
for
November 18, 2024, at 12:00 PM, TELEPHONIC MEETING.
About Thomas Roofing and Repair Inc.
Thomas Roofing and Repair Inc. is a family-owned business located
in Central Florida, that offers roofing and repair services to
residential and commercial customers.
Thomas Roofing and Repair Inc. sought relief under Subchapter V of
Chapter 11 of the U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No.
24-05788) on October 26, 2024. In the petition filed by Matthew
Thomas, as owner, the Debtor reports total assets of $466,403 and
total liabilities of $2,428,473.
Bankruptcy Judge Tiffany P. Geyer handles the case.
The Debtor is represented by:
L. Todd Budgen, Esq.
BUDGEN LAW
PO Box 520546
Longwood FL 32752
Email: TBudgen@MyBankruptcyFirm.com
THORNCO HOSPITALITY: Voluntary Chapter 11 Case Summary
------------------------------------------------------
Debtor: Thornco Hospitality, LLC
dba Homewood Suites by Hilton Thornton Denver
12150 Grant St.
Thornton CO 80241
Case No.: 24-33596
Business Description: The Debtor owns and operates a hotel.
Chapter 11 Petition Date: November 5, 2024
Court: United States Bankruptcy Court
Northern District of Texas
Judge: Hon. Scott W Everett
Debtor's Counsel: Joyce W. Lindauer, Esq.
JOYCE W. LINDAUER ATTORNEY, PLLC
1412 Main Street, Suite 500
Tel: (972) 503-4033
Email: joyce@joycelindauer.com
Estimated Assets: $10 million to $50 million
Estimated Liabilities: $10 million to $50 million
The petition was signed by Nimrat Kaur as managing member.
The Debtor indicated it has no creditors holding unsecured claims.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/VPT2ULQ/Thornco_Hospitality_LLC__txnbke-24-33596__0001.0.pdf?mcid=tGE4TAMA
TOMLINSON TRANSPORT: Amends Plan to Include CoreFirst Secured Claim
-------------------------------------------------------------------
Tomlinson Transport LLC submitted a First Amended Small Business
Plan of Reorganization under Subchapter V dated September 26,
2024.
The Debtor intends to pay creditors in full through this plan from
proceeds from hauling operations. The plan is estimated to be a
5-year plan to provide sufficient cushion to grow the business.
The Debtor has had recent gross revenues of $65,000-$105,000 per
month. The Debtor has filed monthly operating reports for March
July 2024. The Debtor anticipates grosses remaining north of
$100,000 per month with increases in the second half of 2024 based
on industry estimates as well as a return to full fleet of vehicles
as its disposal.
Class 4 consists of the Secured Claim of CoreFirst Bank & Trust.
The Debtor has five loans with Creditor CoreFirst Bank & Trust,
referred to as loan #s 1408, 7147, 9336, 9786, and 2132. Each of
this loans has a contractual interest rate varying between 3.54%
and 6.94%. This Class shall be paid $2500 per month for year 1 of
the plan; $2905.10 for years 25 of the Plan. This Class shall
receive a 7% interest rate.
CoreFirst shall retain its lien on the Debtor's equipment until the
respective allowed secured claims with interest above are paid in
full, at which time it will file the appropriate paperwork to deem
its lien satisfied. Should the Debtor request a payoff or lien
release amount on either or both vehicles during the Plan,
CoreFirst shall provide the payoff within 30 days to counsel upon
its reasonable request. This loan payment is based on a 10-year
amortization and the debtor therefore anticipate that this long
term obligation would survive beyond the term of this Plan. The
Debtor will explore opportunities post-confirmation for refinancing
of the loans.
The Debtor and CoreFirst have entered into a stipulated order for
Adequate Protection payments of $2500 per month while this plan is
prepared and submitted for balloting and court approval.
Class 4 consists of General Unsecured Claims. This Class shall
receive 100 per month in year 1 of the Plan; $500 per month in year
2 of the plan; $1666 per month in year 3 of the plan; $2600 per
month in year; and $2257.77 in year 5 of the Plan until paid in
full. Payments shall begin January 1, 2025 to December 1, 2029.
This Class will receive a distribution of 100% of their allowed
claims. The allowed unsecured claims total $85,485.16.
The Debtor shall continue to haul dry and refrigerated/climate
controlled items for large supermarket and other entities and thus
fund this Plan.
Subject to the Plan or the order confirming the Plan, on
Confirmation of the Plan all property of the Debtor, tangible and
intangible, including, without limitation, licenses, furniture,
fixtures and equipment, will revert, free and clear of all Claims
and Equitable Interests except as provided in the Plan, to the
Debtor. The Debtor expects to have sufficient cash on hand to make
the payments required on the Effective Date.
A full-text copy of the First Amended Subchapter V Plan dated
September 26, 2024 is available at https://urlcurt.com/u?l=NIENfb
from PacerMonitor.com at no charge.
Attorneys for the Debtor:
Ryan A. Blay, Esq.
WM Law
15095 W. 116th St.
Olathe, KS 66062
Telephone: (913) 422-0909
Facsimile: (913) 428-8549
Email: blay@wagonergroup.com
About Tomlinson Transport
Tomlinson Transport LLC is a transportation business working with
large entities such as grocery store chains, restaurants and food
service companies to haul across the middle of the United States.
The Debtor filed a Chapter 11 petition (Bankr. D. Kan. Case No.
23-20236) on March 8, 2024, listing under $1 million in both assets
and liabilities.
Judge Robert D. Berger oversees the case.
Ryan A. Blay, Esq., at WM Law, is the Debtor's bankruptcy counsel.
TONIX PHARMACEUTICALS: Shareholders Approve Stock Split Proposal
----------------------------------------------------------------
Tonix Pharmaceuticals Holding Corp. disclosed in a Form 8-K Report
filed with the U.S. Securities and Exchange Commission that the
Company's shareholders approved one of two proposals at a special
meeting of shareholders. Shareholders representing 45,864,642
shares, or 35.9%, of the Company's common stock outstanding as of
the September 12, 2024 record date were represented at the Special
Meeting by proxy.
* Proposal 1:
The Company's shareholders approved a proposal to authorize the
Company's Board of Directors, in its discretion at any time within
one year after shareholder approval is obtained, to effect a
reverse stock split of then-outstanding shares of the Company's
common stock, at a ratio of not less than one-for-two (1:2) and not
greater than one-for-hundred (1:100), with the exact ratio to be
determined by the Board and included in a public announcement.
* Proposal 2:
The Company's shareholders did not approve an amendment to the
Company's Articles of Incorporation, as amended, to increase the
Company's authorized shares of common stock to 1,000,000,000 in the
event a reverse stock split of the Company's common stock was
effectuated prior to approval of the Reverse Stock Split Proposal.
About Tonix Pharmaceuticals
Chatham, N.J.-based Tonix Pharmaceuticals Holding Corp., through
its wholly owned subsidiary Tonix Pharmaceuticals, Inc., is a fully
integrated biopharmaceutical company focused on developing and
commercializing therapeutics to treat and prevent human disease and
alleviate suffering.
As of June 30, 2024, Tonix had $70.3 million in total assets, $28.2
million in total liabilities, and $42.1 million in total
stockholders' equity.
Going Concern
The Company cautioned in its Form 10-Q report for the quarter ended
March 31, 2024, that there is substantial doubt about its ability
to continue as a going concern. The Company has suffered recurring
losses from operations and negative cash flows from operating
activities. As of March 31, 2024, the Company had working capital
of approximately $9.6 million and an accumulated deficit of
approximately $615.6 million. The Company held cash and cash
equivalents of approximately $7 million as of March 31, 2024.
During the fourth quarter of 2023, the Company engaged CBRE, an
international real estate brokerage firm, to potentially find a
strategic partner for or buyer of its Advanced Development Center
in North Dartmouth, Massachusetts, to align with its current
business objectives and priorities. As of March 31, 2024, the
Company does not have a commitment in place to sell the building.
The Company believes that its cash resources at March 31, 2024, and
the gross proceeds of $4.4 million raised from an equity offering
in the second quarter of 2024, will not meet its operating and
capital expenditure requirements through the second quarter of
2025.
TOPICAL BIOMEDICS: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Topical BioMedics, Inc.
306 Van Dale Road
West Hurley, NY 12491
Business Description: The Debtor offers natural pain relief
products.
Chapter 11 Petition Date: November 11, 2024
Court: United States Bankruptcy Court
Southern District of New York
Case No.: 24-36109
Debtor's Counsel: Michelle L. Trier, Esq.
GENOVA, MALIN & TRIER, LLP
1136 Route 9
Wappingers Falls, NY 12590
Tel: 845-298-1600
Total Assets: $437,628
Total Liabilities: $2,412,922
The petition was signed by Dennis Barnett Dennis as chairman of the
Board.
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/2OIEWZQ/Topical_BioMedics_Inc__nysbke-24-36109__0001.0.pdf?mcid=tGE4TAMA
TROTTA TIRES: Continued Operations to Fund Plan Payments
--------------------------------------------------------
Trotta Tires, II, LLC, filed with the U.S. Bankruptcy Court for the
Southern District of Florida a Plan of Reorganization for Small
Business dated September 25, 2024.
The Debtor is a locally owned and operated Florida limited
liability corporation specializing in the retail and wholesale sale
of automotive tires since 1995.
The Debtor filed this case because of a lengthy and costly dispute
with one of its vendors, Horizon Tire, Inc. Horizon had been
supplying tires to the Debtor and the parties were on favorable
business terms until October of 2021, when certain of the Debtor's
payments to Horizon were misappropriated when they were wired to a
fraudulent bank account; as a result the Debtor (and Horizon) were
defrauded out of more than $400,000.
There is litigation pending in the Superior Court of the State of
California regarding this dispute. In that case, the Debtor filed a
cross complaint, alleging, inter alia, that Horizon provided the
faulty wire instructions to the Debtor at issue in the dispute.
While that action has been stayed by virtue of this bankruptcy
case, the Debtor intends to pursue any and all claims it may have
in pursuit of recovery of the wrongfully wired funds.
The Debtor filed this bankruptcy case after it could no longer
afford to continue to defend the prepetition litigation against it.
The Debtor filed this case in order to reorganize and restructure
its finances.
The projections show that the Debtor will have projected disposable
income from operations of approximately $36,000.00 over a period of
three years beginning on the Effective Date.
Class 3 consists of all nonpriority unsecured claims. Every holder
of a non priority general unsecured claim against the Debtor shall
receive its pro-rata share of $50,000.00, to be paid out quarterly,
over a period of one year after the Effective Date. Class 3 is
Impaired by the Plan.
Additionally, in the event the Debtor is successful on any of its
litigation claims seeking to recoup the $400,000.00 in fraudulently
wired funds, the Class 3 creditors will receive an additional
dividend representing their pro rata share of 50% of the net
proceeds (after payment of all attorneys' fees, costs and expenses)
from these litigation claims, up to the total amount of such
creditor's allowed general unsecured claim. Payments shall begin no
later than ninety days following the Effective Date.
The Debtor will fund all quarterly plan payments to creditors from
its continued operation of the Debtor's business. The Debtor will
begin making quarterly distributions on account of all claims no
later than January 31, 2025.
A full-text copy of the Plan of Reorganization dated September 25,
2024 is available at https://urlcurt.com/u?l=PxjRKD from
PacerMonitor.com at no charge.
Counsel to the Debtor:
Philip J. Landau, Esq.
Landau Law, PLLC
3010 N. Military, Suite 318
Boca Raton FL 33431
Tel: (561) 443-0802
Email: phil@landau.law
About Trotta Tires II, LLC
Trotta Tires is a seller of tires serving South Florida since 1995.
The Company has a wide selection of brands in its inventory
including: Hankook, Windforce, Goodyear, Michelin, Continental, and
BFGoodrich.
Trotta Tires II, LLC filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No.
24-16441) on June 27, 2024. The petition was signed by Jose M Soto,
manager. At the time of filing, the Debtor estimated $50,000 to
$100,000 in assets and $1 million to $10 million in liabilities.
Judge Peter D Russin presides over the case.
Philip J. Landau, Esq. at LANDAU LAW, PLLC represents the Debtor as
counsel.
VERTEX ENERGY: Joint Plan Contemplates Two Scenarios
----------------------------------------------------
Vertex Energy, Inc. and its Debtor Affiliates filed with the U.S.
Bankruptcy Court for the Southern District of Texas a Disclosure
Statement for the Joint Chapter 11 Plan dated September 25, 2024.
Vertex was founded in 2001 by Benjamin P. Cowart, the Company's
Chief Executive Officer. Vertex began as a used motor oil ("UMO")
supplier based in Houston, Texas, supplying UMO to third parties in
the Gulf Coast region.
In 2023, the Company faced the following headwinds, culminating in
the perfect storm—looming renewable volume obligations, a shell
of a Hydrogen Facility, unstable crack spreads, and a surplus of
renewable energy supply in the market. These challenges, combined
with deteriorating liquidity and the impending maturity of a
significant portion of the Company's debt load, placed considerable
strain on Vertex's business.
Specifically, the Company began a marketing process on September 3,
2024, for some or all of the Debtors' assets, which the Company
proposes to continue postpetition. The initial indications of
interest ("IOIs") as a result of that process will give the Debtors
a clear picture of the ultimate shape the Chapter 11 Cases will
take. Pursuant to the proposed bidding procedures, if the Debtors
receive one or more IOIs for an actionable proposal, the Debtors
will move swiftly toward an auction, where the Consenting Term Loan
Lenders will also have an opportunity to submit a credit bid. If
the Consenting Term Loan Lenders decline to do so, the Debtors will
continue down the plan confirmation process.
Ultimately, the Debtors expect to reach the effective date of the
Plan through either (a) a standalone recapitalization of the
Company's balance sheet (the "Recapitalization Transaction"); or
(b) following a sale of all, substantially all, or any portion of
the Debtors' assets through one or more sales (the "Asset Sale").
Critically, as provided in the Restructuring Support Agreement, in
the event that the Debtors pursue an Asset Sale, the Consenting
Term Loan Lenders have agreed to fund a wind-down reserve to (a)
satisfy the estimated fees, costs, and expenses necessary to fully
administer and wind down the Debtors' estates and (b) pay in full
all claims required to be paid under the Plan and the Bankruptcy
Code.
Class 5 consists of General Unsecured Claims at Debtors Other than
Vertex. Each Holder of an Allowed General Unsecured Claim at
Debtors other than Vertex shall receive, in full and final
satisfaction of such Allowed General Unsecured Claim at Debtors
other than Vertex, unless otherwise agreed to by such Holder:
* if the Recapitalization Transaction occurs, on the Effective
Date, all Allowed General Unsecured Claims at Debtors other than
Vertex shall be cancelled, released, and extinguished and will be
of no further force or effect, and Holders of Allowed General
Unsecured Claims at Debtors other than Vertex shall not receive any
distribution, property, or other value under the Plan on account of
such Allowed General Unsecured Claims at Debtors other than Vertex;
or
* if the Asset Sale occurs, its pro rata share of the Excess
Distributable Cash (if any) after payment or satisfaction, as
applicable, of all Allowed DIP Claims and Allowed Term Loan
Claims.
Class 6 consists of Other General Unsecured Claims at Vertex. Each
Holder of Allowed Other General Unsecured Claims at Vertex shall
receive, in full and final satisfaction of such Allowed Other
General Unsecured Claims at Vertex, unless otherwise agreed to by
such Holder:
* if the Recapitalization Transaction occurs, on the Effective
Date, all Holders of Allowed Other General Unsecured Claims at
Vertex shall be cancelled, released, and extinguished and will be
of no further force or effect, and Holders of Allowed Other General
Unsecured Claims at Vertex shall not receive any distribution,
property, or other value under the Plan on account of such Allowed
Other General Unsecured Claims at Vertex; or
* if the Asset Sale occurs, its pro rata share of the Excess
Distributable Cash (if any) after payment or satisfaction, as
applicable, of all Allowed DIP Claims, Allowed Term Loan Claims,
and Allowed General Unsecured Claims at Debtors other than Vertex.
If the Recapitalization Transaction occurs, the Debtors shall fund
or make distributions under the Plan, as applicable, with: (i) the
Exit Intermediation Facility, (ii) the New Common Stock, and (iii)
the Debtors' Cash on hand.
If the Asset Sale occurs, the Debtors shall fund or make
distributions under the Plan, applicable, with: (i) Cash on hand on
the Effective Date, (ii) Excess Distributable Cash, and (iii) the
revenues and proceeds of all Wind-Down Assets of the Debtors.
A full-text copy of the Disclosure Statement dated September 25,
2024 is available at https://urlcurt.com/u?l=VjdNFL from Kurtzman
Carson Consultants, LLC, claims agent.
Proposed Co-Counsel to the Debtors:
Jason G. Cohen, Esq.
Jonathan L. Lozano, Esq.
BRACEWELL LLP
711 Louisiana Street, Suite 2300
Houston, Texas 77002
Tel: (713) 223-2300
Fax: (800) 404-3970
Email: jason.cohen@bracewell.com
jonathan.lozano@bracewell.com
- and -
Mark E. Dendinger, Esq.
BRACEWELL LLP
31 W. 52nd Street, Suite 1900
New York, NY 10019
Tel: (212) 508-6100
Fax: (800) 404-3970
Email: mark.dendinger@bracewell.com
Proposed Co-Counsel to the Debtors:
Brian Schartz, P.C.
KIRKLAND & ELLIS LLP
KIRKLAND & ELLIS INTERNATIONAL LLP
601 Lexington Avenue
New York, NY 10022
Tel: (212) 446-4800
Fax: (212) 446-4900
Email: brian.schartz@kirkland.com
- and -
John R. Luze, Esq.
Rachael M. Bentley, Esq.
KIRKLAND & ELLIS LLP
KIRKLAND & ELLIS INTERNATIONAL LLP
333 West Wolf Point Plaza
Chicago, IL 60654
Tel: (312) 862-2000
Fax: (312) 862-2200
Email: john.luze@kirkland.com
rachael.bentley@kirkland.com
About Vertex Energy, Inc.
Vertex Energy, Inc., together with its subsidiaries, is an energy
transition company and marketer of refined products and renewable
fuels in Houston.
Vertex Energy filed its voluntary petition for relief under Chapter
11 of the Bankruptcy Code (Bankr. S.D. Texas Lead Case No.
24-90507) on September 24, 2024, listing $772,368,000 in assets and
$642,819,000 in liabilities. The petitions were signed by R. Seth
Bullock as chief restructuring officer.
Judge Christopher M. Lopez oversees the case.
Jason G. Cohen, Esq., at Bracewell, LLP represents the Debtors as
counsel.
VILLAGE ON THE ISLE: Fitch Affirms BB+ Rating on 2024 Revenue Bonds
-------------------------------------------------------------------
Fitch Ratings has assigned a 'BB+' rating to the following City of
Venice, FL bonds expected to be issued on behalf of Village on the
Isle (VOTI):
- $46 million series 2024A revenue bonds;
- $6.6 million series 2024B-1 TEMPS 85 revenue bonds;
- $8.85 million series 2024B-2 TEMPS 70 revenue bonds;
- $16.95 million series 2024B-3 TEMPS 50 revenue bonds.
The series 2024 bond proceeds will be used to construct an
independent living unit (ILU) expansion and wellness pavilion, fund
debt service reserve funds, fund capitalized interest for 25 months
and pay cost of issuance.
The Rating Outlook is Stable.
Entity/Debt Rating Prior
----------- ------ -----
Village on the Isle (FL)
Village on the Isle
(FL) /General Revenues/1 LT LT BB+ Affirmed BB+
VOTI plans to construct 54 additional ILUs similar in style to its
Emerald Terraces to meet consistently strong demand. Plans also
include a wellness pavilion. The facilities are expected to open in
2027. Presales began on Sept. 9, 2024. As of early November, 2024,
81% (44/54) of the units have been reserved with 10% deposits.
Affirmation of the 'BB+' rating incorporates approximately $46
million in long-term debt associated with the project.
Approximately $32 million in series 2024 bonds will be TEMPS bonds
which will be repaid with initial entrance fees. The TEMPS are
expected to be fully repaid when the expansion achieves 85%
occupancy. Though the additional debt pressures the financial
profile below levels consistent with a 'BB+' rating, Fitch expects
the project to be accretive in the long-term. VOTI has improved its
cost containment measures and capital related metrics as
demonstrated by its 92% operating ratio (OR) and 1.1x revenue-only
MADS coverage for FY 2023 (Dec. year-end). Fitch expects VOTI's OR
to remain below 100% and revenue-only MADS coverage to remain above
.6x over the next several years, which supports the affirmation and
Stable Outlook.
SECURITY
The bonds are secured by a pledge of gross revenues, a security
interest in obligated group facilities, and debt service reserve
funds.
KEY RATING DRIVERS
Revenue Defensibility - 'bbb'
Good Demand in a Stable Market
VOTI is located in a stable service area. Demand is also sustained
by a healthy real estate market, with growing median home values in
the Sarasota area. Entrance fees are in line with PMA pricing
trends and rate increases occur regularly. VOTI enjoys a preferable
location, amenities and incentives while facing little meaningful
competition. ILU demand has been healthy at 93% for 2023 and
through Q2 of 2024. VOTI also has a waitlist of more than 150
people with some of those people also on the priority club list for
the expansion units. Occupancy is also good in the other areas of
care. At the end of June, 2024, occupancy was 87% in the assisted
living units (ALUs), and 93% in the skilled nursing beds (SNF).
Operating Risk - 'bbb'
Improving Profitability, Robust Capital Spending
VOTI's operating performance is midrange. In 2023 and Q2 of 2024
VOTI's ORs were 92.1% and 99.5% respectively. Similarly, NOM and
NOMA for FY 2023 were 18.6% and 36%. Fitch expects cost containment
metrics to remain consistent with the 2023 results over the next
several years.
Capital related metrics are also midrange. For FY 2023, revenue
only MADS coverage was 1.1x, debt to net was 6.9x and MADS was
18.8% of revenue, supporting the mid-range assessment. Fitch
expects capital related metrics to remain consistent with the 2023
results.
Management actively invests in maintaining and expanding the campus
with capital expenditures well above 100% over the past several
years as is reflected in an average age of plant of approximately
6.5 years. VOTI's expansion project supports management's strategy
to meet and maintain strong demand with an attractive campus.
VOTI offers both lifecare and fee-for-service contracts and most
residents have type-B contracts.
Financial Profile - 'bb'
Heavy Debt Burden
Given VOTI's midrange revenue defensibility and midrange operating
risk assessments, Fitch expects it will maintain a financial
profile that is consistent with the 'bb' assessment throughout the
economic and financial volatility assumed in Fitch's stress case
scenario. VOTI's balance sheet has been stable, albeit limited with
unrestricted cash and investments around$30 million since 2020, and
33% cash-to-adjusted debt at year-end 2023. Unrestricted cash
represented 366 days cash on hand (DCOH) in 2023, which is neutral
to the assessment of VOTI's financial profile. MADS coverage was
2.2x in FY2023.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Deterioration in ILU occupancy below 90%;
- Deterioration of liquidity such that cash to adjusted debt
stabilizes at 25% or lower;
- Operating ratios consistently above 100%;
- NOM stabilizing below 3%.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Over the longer term, improvement in liquidity metrics such that
cash to adjusted debt levels stabilize at 50% or greater, could
support positive rating action.
PROFILE
VOTI operates a life plan community located in Venice, FL
approximately 75 miles south of Tampa on Florida's Gulf Coast. The
community consists of 234 ILUs, 48 ALUs and 16 Memory Care units,
and 64 licensed skilled nursing beds at the new Health Center.
Eight of the 64 SNF beds are leased to a hospice agency.
VOTI offers several contract types; Type-B contracts with either a
10% discount on AL and SNF services (Traditional), or unlimited
assisted living services and 30 free days of skilled nursing each
year for temporary care in a fully-amortizing Type-B contract plan
(Enhanced Living).
In January 2019, VOTI began offering a Life Care Contract which is
a fully-amortizing Type A contract where residents receive
unlimited ALU and Health Center care access. Most of VOTI's
resident contracts are Type-B. Refunds are not subject to resale
requirements but VOTI has limited exposure to refundable contracts.
In fiscal 2023, VOTI had total revenues of approximately $36
million.
Date of Relevant Committee
July 31, 2024
Sources of Information
In addition to the sources of information identified in Fitch's
applicable criteria specified below, this action was informed by
data from Lumesis.
ESG Considerations
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
VROOM INC: To File Chapter 11 With $1.12 Billion in Debt
--------------------------------------------------------
After exiting its ecommerce operations and used vehicle dealership
business early this year, auto lender Vroom, Inc. (Nasdaq: VRM),
said it is seeking Chapter 11 protection with a prepackaged plan
that would restructure $290 million of unsecured bonds into
equity.
Vroom is expected to commence a voluntary proceeding under Chapter
11 of the Bankruptcy Code in the United States Bankruptcy Court for
the Southern District of Texas.
On Nov. 12, 2024, the Company entered into a Restructuring Support
Agreement with creditors holding, over 80% of the aggregate
outstanding principal amount of the Notes and the largest
shareholder.
The RSA contemplates a comprehensive restructuring of the Company's
debt obligations and capital structure to be implemented through a
prepackaged plan of reorganization to be implemented through the
anticipated filing of the Prepackaged Chapter 11 case.
Under the Plan, holders of Vroom, Inc.'s 0.750% unsecured
convertible senior notes due 2026 issued pursuant to the Unsecured
Notes Indenture with U.S. Bank N.A., as trustee, will get 92.94% of
the stock of the reorganized company while existing shareholders
will get the remaining shares. Unsecured creditors will recover
100 cents on the dollar.
The RSA contains milestones, which include, among other things,
entry of an order by the Bankruptcy Court, confirming the Plan and
approving the related disclosure statement no later than 60 days
following the Petition Date and the occurrence of the date on which
the Plan has become effective in accordance with its terms no later
than 75 days following the Petition Date.
Despite the anticipated Chapter 11 filing, the Company said it
retains sufficient liquidity, with approximately $51.1 million of
unrestricted cash on its Condensed Consolidated Balance Sheet as of
Sept. 30, 2024, and it continues to meet its obligations to
customers, vendors, counterparties and employees in the ordinary
course of business.
The Debtor plans to seek approval of certain "first day" motions
containing customary relief intended to assure the Debtor's ability
to continue its ordinary course operations. None of Vroom, Inc.'s
subsidiaries are expected to commence Chapter 11 proceedings.
Vroom had $1.124 billion in assets against $1.119 billion in
liabilities as of Sept. 30, 2024. The Company had $51.1 million
cash and cash equivalents as of Sept. 30, 2024, and has $32.9
million of liquidity available to UACC under the warehouse credit
facilities
The Company reported a $128.6 million loss on $153.2 million of
revenue for nine months ended Sept. 30, 2024, compared with a net
loss of $223.5 million on a $128.9 million of revenue in the same
period in 2023.
Tom Shortt, the Company's CEO, said in a Nov. 12 statement, "Since
winding down our ecommerce used automotive dealer business, we have
been focused on maximizing the value of our remaining assets for
our stakeholders. We believe eliminating our unsecured notes will
significantly strengthen our balance sheet and allow us to emerge
without any long-term debt at Vroom, Inc., while its subsidiary,
UACC, will continue to be obligated to debt that is related to
asset-backed securitizations and their trust preferred securities.
Our team remains focused on executing our Long-Term Strategic Plan
announced in September. We continue to make progress on our key
initiatives and are focused on portfolio performance, improving
processes and technology, digitization and automation, and reducing
costs across the business."
'Value Maximization Plan'
The Company recounts in its third quarter 2024 earnings release
that on Jan. 22, 2024, the Company announced that its Board had
approved the Value Maximization Plan, pursuant to which the Company
discontinued its ecommerce operations and wound down its used
vehicle dealership business in order to preserve liquidity and
enable it to maximize stakeholder value through its remaining
businesses. The Company has ceased transacting through vroom.com,
completed transactions for customers who had previously contracted
with the Company to purchase or sell a vehicle, halted purchases of
additional vehicles, sold substantially all of its used vehicle
inventory through wholesale channels and paid off our 2022 Vehicle
Floorplan Facility. The Company continues to take other actions to
maximize stakeholder value by seeking to monetize its legacy
ecommerce platform, reduce its outstanding commitments and preserve
its liquidity, and has executed a reduction-in-force commensurate
with its reduced operations.
On March 29, 2024, the Company substantially completed the
wind-down of its ecommerce operations and used vehicle dealership
business (the "Ecommerce Wind-Down"), however, it may incur
additional wind-down costs through the end of 2024.
The Company also owns and operates UACC, a leading automotive
finance company that offers vehicle financing to consumers through
third- party dealers under the UACC brand, and CarStory, an
artificial intelligence ("AI")-powered analytics and digital
services platform for automotive retail. The UACC and CarStory
businesses continue to serve their third-party customers, with
their operations substantially unaffected by the Ecommerce
Wind-Down. The Company will seek to grow and enhance the
profitability of the UACC and CarStory businesses going forward.
As a result of the Value Maximization Plan, the Company estimates
that it will incur total cash charges during 2024 of $15.9 million
for severance and other personnel-related costs, with $15.8 million
incurred during the nine months ended Sept. 30, 2024, and
approximately $13.9 million in contract and lease termination
costs, with the total amount settled during the nine months ended
September 30, 2024.
As part of a planned reduction-in-force under the Value
Maximization Plan, approximately 800 employees were impacted by the
wind-down, resulting in a reduction of approximately 93% of the
employees not engaged in UACC's or CarStory's ongoing operations.
About Vroom
Vroom Inc. (Nasdaq: VRM) owns and operates United Auto Credit
Corporation (UACC), an automotive lender serving the independent
and franchise dealer market nationwide, and CarStory, a leader in
AI-powered analytics and digital services for automotive retail.
Prior to January 2024, Vroom also operated an end-to-end ecommerce
platform to buy and sell used vehicles.
Porter Hedges LLP is serving as bankruptcy counsel, Latham &
Watkins LLP is serving as special corporate counsel, Stout Risius
Ross, LLC is serving as financial advisor to Vroom.
Bondholders are led by Mudrick Capital Management, L.P. Mudrick
retained Wachtell Lipton Rosen & Katz, and McGuireWoods LLP as
counsel.
W.R. GRACE: Fitch Alters Outlook on 'B' LongTerm IDR to Negative
----------------------------------------------------------------
Fitch Ratings has affirmed W. R. Grace Holdings LLC 's Long-Term
Issuer Default Rating (IDR) at 'B'. Fitch has also affirmed Grace's
senior unsecured notes at 'B-' with an 'RR5' Recovery Rating and
senior 1st lien secured notes at 'BB'/'RR1'. The Rating Outlook has
been revised to Negative from Stable.
The ratings reflect Grace's improving operations following a period
of heightened customer destocking and moderating raw material
prices. These positives are partially offset by muted near-term
cash generation and limited ability to pursue material
deleveraging. Fitch expects EBITDA leverage to fall to around 6.5x
through the forecast horizon.
The Negative Outlook reflects the company's medium-term refinancing
needs, including the revolving credit facility (RCF) in 2026 and
$742.5 million in secured notes in 2027. Fitch expects the company
to address these maturities in a timely manner, alongside solidly
positive FCF generation, which could result in an Outlook revision.
Conversely, continued neutral to negative FCF generation and an
inability to address near-term maturities could lead to a negative
rating action.
Key Rating Drivers
Elevated Cost, Leverage Profile: Grace's 'B' rating reflects a high
debt burden unlikely to be relieved by near- to medium-term cash
generation. Fitch believes the company's high interest burden will
limit its capacity to repay sufficient debt to reduce leverage.
Consequently, deleveraging will likely depend mainly on EBITDA
recovery. Moderating input costs, recovering volumes, and an
improving demand environment support baseline EBITDA margin
recovery. Fitch anticipates any potential restocking to be gradual,
leading to leverage around or below 6.5x in the medium term.
Improving Near-Term FCF: With few material debt maturities until
2027, Fitch expects Grace's financial flexibility to remain
adequate. The $270 million in preferred shares issued to Albemarle
Corporation for the Fine Chemistry Services acquisition began to
pay in kind at 12% per annum as of 2Q23. Fitch expects Grace will
aim to redeem these shares via a note issuance before significant
dividends accumulate. Such a transaction would likely be
leverage-neutral, and the added cash interest burden needing to be
offset by an improved cash flow profile.
Fitch expects FCF in 2024 to be neutral, followed by
mid-single-digit FCF margins through the forecast period, driven by
strong refining technologies demand and steady improvement in
specialty catalyst and materials technologies. The extent to which
the recovering cash position is use for material voluntary debt
repayments will significantly impact the rating.
Refinery Production Supports Growth: Growth in the Refining
Technologies subsegment is supported by refinery production
utilization levels. Subsegment products are used for cracking
hydrocarbon chains in distilled crude oil to produce transportation
fuels, maximizing propylene production and converting methanol into
petrochemical feeds. These inputs optimize a refinery's operations
and crack spreads. Fitch expects volumes to align with refinery
utilization levels, currently bolstered by robust fuel demand. High
pass-through rates offer underlying stability, contrasting with
projected weakness in specialty catalysts.
Specialized Chemical Portfolio: Grace's two business segments offer
highly specialized products with high margins and pricing power.
The company has been able to pass through costs to customers. The
Catalysts Technologies segment has consistently generated EBITDA
margins around or above 30%, while the Materials Technologies
business has margins in the low-20% range. These margins are high
for specialty chemical companies and, while somewhat volatile, are
partially insulated by solid pass-through rates. Fitch believes the
company will continue to invest in the Materials Technologies
segment in the medium term, but the near-term priority will remain
debt reduction.
Derivation Summary
Grace's EBITDA margins place the company firmly within the
specialty manufacturer group. The company is smaller than direct
competitor Albemarle (BBB-/Stable), which also produces lithium and
bromine to complement its catalysts. Like NewMarket Corporation
(BBB/Stable), Grace is a leader in a highly specialized industry
but historically has demonstrated a greater appetite for
debt-funded M&A. Fitch expects the company will operate with a
leverage profile generally consistent with the 'B' rating
category.
Advancion Holdings LLC (B-/Stable) has a similar leverage profile
as Grace following M&A and dividend recapitalization activities.
However, Grace's FCF generation capabilities are stronger. Grace's
interest coverage is stronger than Advancion's, and tight coverage
is a material credit consideration for Advancion. Among catalyst
peers, Albemarle operates at significantly lower leverage than
Grace, historically employing a strategy of building out its
faster-growing segments through cash generated at its catalyst
business.
Key Assumptions
- Flat revenue growth in 2025 with modest improvement thereafter as
destocking trends ease;
- EBITDA margins improve slightly through 2024, continuing to
improve gradually afterward;
- Limited to no upstream dividends to Standard Industries;
- EBITDA leverage improves slightly in 2024, with more material
deleveraging beginning in 2025 as FCF margins improve, facilitating
gradual voluntary debt repayments.
Recovery Analysis
The recovery analysis assumes Grace would be reorganized as a
going-concern (GC) in bankruptcy rather than liquidated. Fitch has
assumed a 10% administrative claim.
The GC EBITDA estimate reflects Fitch's view of a sustainable, post
reorganization EBITDA level upon which the valuation of the company
is based. The GC EBITDA depicts a scenario in which severe
headwinds in the company's more commoditized Refining Technologies
business and weak growth in other segments due to slower
macroeconomic activity leads to a severe drop in both EBITDA and
cash generation. The assumption also reflects corrective measures
taken in the reorganization to offset the adverse conditions that
triggered default, such as cost cutting efforts and industry
recovery.
An enterprise value (EV) multiple of 6.5x EBITDA is applied to the
GC EBITDA to calculate a post-reorganization EV. The multiple is
comparable to the range of historical bankruptcy case study exit
multiples for peer companies, which ranged from 5.0x to 8.0x.
Bankruptcies in this space related either to litigation or to deep
cyclical troughs.
The revolving credit facility is assumed to be drawn at 80%.
Fitch's recovery assumptions result in a 100% recovery for the
senior secured debt, which maps to the 'RR1' range and results in a
'BB' rating. The assumptions also result in a 22% recovery for the
senior unsecured debt, which maps to the 'RR5' range and results in
a 'B-' rating.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Demonstrative gross debt reduction coupled with continued cash
generation and earnings stability, leading to EBITDA leverage
durably below 5.5x;
- Successful completion of Materials Technologies and Specialty
Catalysts buildout while continuing to strengthen the company's
capital structure.
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade:
- Failure to address upcoming maturities in a timely manner;
- EBITDA leverage durably above 6.5x without clear sight to
material deleveraging;
- EBITDA interest coverage durably below 2.0x;
- Reduced ability to pass through costs to customers, leading to
less stable margins and heightened cash flow risk;
- More aggressive than anticipated M&A activity, including
transformative, credit-unfriendly acquisitions, or a dividend
policy otherwise incompatible with management's articulated capital
deployment;
- Further issuance of notes on a secured basis could dilute
recovery for the unsecured debt holders, potentially resulting in a
lower recovery rating.
- Fitch's expectation that the company will address its 2026-2027
maturities in a timely manner may lead to an Outlook revision to
Stable.
Liquidity and Debt Structure
Adequate Liquidity and Optimized Maturity Schedule: Grace's
liquidity position at 2Q24 was solid, with $314.1 million in
availability on its $450 million revolving credit facility and a
$115.1 million in readily available cash. The company faces limited
maturities until 2027, when its $742.5 million senior secured notes
are due.
Issuer Profile
Grace is a specialty chemicals company comprised of Catalyst and
Materials segments. It produces catalysts and related products and
technologies used in petrochemical, refining, and other chemical
manufacturing applications. It also produces specialty materials
used in pharma & consumer, coatings, and chemical process
applications.
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
----------- ------ -------- -----
W. R. Grace
Holdings LLC LT IDR B Affirmed B
senior unsecured LT B- Affirmed RR5 B-
senior secured LT BB Affirmed RR1 BB
WAT TIMBER: Kicks Off Subchapter V Bankruptcy Process
-----------------------------------------------------
WAT Timber Inc. filed Chapter 11 protection in the Southern
District of Alabama. According to court documents, the Debtor
reports between $1 million and $10 million in debt owed to 1 and 49
creditors. The petition states funds will be available to unsecured
creditors.
A meeting of creditors under 11 U.S.C. Section 341(a) is slated for
December 3, 2024 at 2:00 a.m. at John A. Campbell US Courthouse,
5th Floor, 113 St. Joseph Street, Mobile, AL 36602.
About WAT Timber Inc.
WAT Timber Inc. sought relief under Subchapter V of Chapter 11 of
the U.S. Bankruptcy Code (Bankr. S.D. Ala. Case No. 24-12749) on
Oct. 29, 2024. In the petition filed by Willie Andrew Thomas, as
president, the Debtor estimated assets and liabilities between $1
million and $10 million each.
The Honorable Bankruptcy Judge Jerry C. Oldshue handles the case.
The Debtor is represented by:
Wm. Wesley Causby, Esq.
MEMORY MEMORY & CAUSBY, LLP
469 South McDonough Street
Montgomery AL 36104
Tel: (334) 834-8000
E-mail: wcausby@memorylegal.com
WELLPATH HOLDINGS: Case Summary & 30 Largest Unsecured Creditors
----------------------------------------------------------------
Lead Debtor: Wellpath Holdings, Inc.
f/k/a CCS-CMGC Holdings, Inc.
3340 Perimeter Drive
Nashville, TN 37211
Business Description: Wellpath is a provider of medical and mental
healthcare in jails, prisons, and inpatient
and residential treatment facilities.
Chapter 11 Petition Date: November 11, 2024
Court: United States Bankruptcy Court
Southern District of Texas
Thirty-nine affiliates that concurrently filed voluntary petitions
for relief under Chapter of the Bankruptcy Code:
Debtor Case No.
------ --------
Wellpath Holdings, Inc. (Lead Case) 24-90533
Physicians Network Association, Inc. 24-90532
CCS-CMGC Parent GP, LLC 24-90534
CCS-CMGC Parent Holdings, LP 24-90535
901 45th Street West Palm Beach Florida Behavioral
Health Hospital Company LLC 24-90536
Alpine CA Behavioral Health HoldCo, LLC 24-90537
Behavioral Health Management Systems, LLC 24-90538
Boynton Beach Florida Behavioral Health
Hospital Company, LLC 24-90539
CCS-CMGC Intermediate Holdings, Inc. 24-90540
CCS-CMGC Intermediate Holdings 2, Inc. 24-90541
CHC Companies, LLC 24-90542
Conmed Healthcare Management, LLC 24-90543
Correct Care Holdings, LLC 24-90544
Correct Care of South Carolina, LLC 24-90545
Correctional Healthcare Companies, LLC 24-90546
Correctional Healthcare Holding Company, LLC 24-90547
Harborview Center, LLC 24-90548
HCS Correctional Management, LLC 24-90549
Healthcare Professionals, LLC 24-90550
Jessamine Healthcare, LLC 24-90551
Justice Served Health Holdings, LLC 24-90552
Missouri JSH Holdco, LLC 24-90553
Missouri JDH Manager, Inc. 24-90554
Perimeter Hill RPA, LLC 24-90555
Wellpath CFMG, Inc. 24-90556
Wellpath Community Care Holdings, LLC 24-90558
Wellpath Community Care Management , LLC 24-90559
Wellpath Education, LLC 24-90560
Wellpath Group Holdings, LLC 24-90561
Wellpath LLC 24-90563
Wellpath Management, Inc. 24-90564
Wellpath Recovery Solutions, LLC 24-90565
Wellpath SF Holdco, LLC 24-90566
WHC, LLC 24-90567
WPMed, LLC, -
Zenova Management, LLC -
Zenova Telehealth, LLC -
Wellpath Community Care Centers of Virginia, LLC -
Wellpath Hospital Holding Company, LLC -
Judge: TBA
Debtors'
General
Bankruptcy
Counsel: Marcus A. Helt, Esq.
McDERMOTT WILL & EMERY LLP
2501 North Harwood Street
Suite 1900
Dallas, TX 75201
Tel: (214) 295-8000
Email: mhelt@mwe.com
Debtors'
Financial
Advisor: FTI CONSULTING, INC.
Debtors'
Investment
Banker: LAZARD FRERES & CO. LLC
Debtors'
Investment
Banker: MTS PARTNERS, LP
Debtors'
Claims,
Noticing,
Solicitation, and
Administrative
Agent: EPIQ CORPORATE RESTRUCTURING, LLC
Estimated Assets
(on a consolidated basis): $1 billion to $10 billion
Estimated Liabilities
(on a consolidated basis): $1 billion to $10 billion
The petitions were signed by Timothy Dragelin, chief restructuring
officer and chief financial officer.
A full-text copy of the Lead Debtor's petition is available for
free at PacerMonitor.com at:
https://www.pacermonitor.com/view/C6WJKLY/Wellpath_Holdings_Inc__txsbke-24-90533__0001.0.pdf?mcid=tGE4TAMA
Consolidated List of Debtors' 30 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
1. Alpine CA Behavioral Unsecured $17,974,459
Holdco, LLC Noteholder
120 Alpine Blvd, Alpine, CA 91901
Tel: (619) 445-2644
2. AU Medical Center Inc. Trade $11,992,022
1120 15th Street BA-2612,
Augusta, GA 30912
Tel: (709) 828-6436
Email: corp_acctg-cash@augusta.edu
3. Correct RX Pharmacy Trade $9,547,633
Services, Inc.
1352-C Charwood Road,
Hanover, MD 21076
Tel: (410) 636-9500
Email: AccountsReceivable@correctrxpharmacy.com
4. Diamond Drugs, Inc. Trade $7,419,885
645 Kolter Drive,
Indiana PA 15701
Tel: (724) 465-4200
Email: mshawley@diamondpharmacy.com
5. Shelby Co Healthcare Corp Trade $5,431,262
dba Regional One Health
P.o. Box 1000 Dept 865,
Memphis, TN 38148-0865
Tel: (901) 545-7651
Email: kericksen@regionalonehealth.org
6. Mclaren Greater Lansing Trade $5,272,724
401 W Greenlawn,
Lansing MI, 48910
Tel: (517) 975-6000
Email: contact@mclaren.org
7. Medical Center Of Central Trade $4,401,175
Georgia, Inc
777 Hemlock St, Macon GA 31201
Tel: (478) 633-1000
8. Name on file Litigation $4,291,667
Information on file Settlement
9. Select Specialty Hospital - Trade $4,258,459
Augusta Inc.
1537 Walton Way, Augusta GA
30904-3764
Tel: (706) 731-1200
Email: augusta@selectspecialty.com
10. Name on File Litigation $3,513,184
Information on File Settlement
11. Spalding Regional Trade $3,112,964
Hospital, Inc.
601 S 8th St, Griffin GA 30224-4213
Tel: (770) 228-2721
12. Laboratory Corporation of Trade $2,976,220
America
P.O. Box 12140
Burlington NC
27216-2140
Tel: (800) 788-9893
Email: cashposters@labcorp.com
13. Pharmacorr, LLC Trade $2,786,878
7400 Plaza Mayor Blvd, Ste 100,
Oklahoma City OK 73149
Tel: (405) 698-1285
Email: rachel.irving@pharmacorr.com
14. Prime Healthcare Trade $2,711,454
Foundation, Inc.
11 Upper Riverdale Rd Sw,
Riverdale GA 30274-2615
Tel: (909) 235-4400
Email: info@primehealthcare.com
15. Name on File Litigation $2,500,000
Information on File Settlement
16. Fresno Community Hospital Trade $2,396,503
and Medical Center
2823 Fresno St,
Fresno CA 93721-1324
Tel: (559) 459-6000
17. McKesson Medical – Trade
$2,350,965
Surgical Inc
P.O. Box 936279
Atlanta GA 31193-6279
Tel: (800) 220-4493
Email: MMS.EFT@Mckesson.com
18. UP Health System - Trade $2,222,534
Marquette
850 W Baraga Ave, Marquette MI
49855-4550
Tel: (906) 449-3000
Email: upmarquette@verisma.com
19. Sonata Software North Trade $2,210,841
America, Inc
39300 Civic Center Drive Ste-270,
Fremont CA 94538
Tel: (650) 268-1300
Email: dipannita.s@sonata-software.com
20. Broward Health Medical Trade $2,053,933
Center
1600 S Andrews Ave, Fort Lauderdale
FL 33316
Tel: (954) 473-7575
Email: credentials@browardhealth.org
21. Broward Health North Trade $1,983,534
201 E Sample Rd, Deerfiled Beach
FL 33064
Tel: (954) 941-8300
Email: credentials@browardhealth.org
22. Memorial University Trade $1,933,546
Medical Center - Savannah
4700 Waters Ave, Savannah GA
31404-6220
Tel: (912) 350-8000
Email: PARA.HCARecordsRequestFL@hcahealthcare.com
23. The Medical Center Trade $1,926,812
710 Center St, Columbus GA
31901-1527
Tel: (706) 571-1120
Email: recordsrequest@piedmont.org
24. St. Joseph Mercy Hospital Trade $1,805,982
5301 E Huron River Dr, Ann
Arbor MI 48106-0993
Tel: (734) 712-2808
Email: andersoh@trinity-health.org
25. Phoebe Putney Memorial Trade $1,776,068
Hospital
417 W 3Rd Ave, Albany GA
31701-1943
Tel: (229) 312-1000
Email: himroi@phoebehealth.com
26. Crisp Regional Hospital Trade $1,764,422
902 7Th St N, Cordele GA 31015
Tel: (229) 276-3100
Email: info@crispregional.org
27. Florida Hospital Waterman Trade $1,685,168
1000 Waterman Way, Tavares FL
32778-5266
Tel: (352) 253-3333
28. Piedmont Augusta Hospital Trade $1,526,858
1350 Walton Way, Augusta GA
30901-2612
(706) 722-9011
Email: recordsrequest@piedmont.org
29. HCA Florida Northwest Trade $1,449,452
Hospital
2801 N State Rd 7, Margate FL
33063-5596
Tel: (305) 652-8000
Email: PARA.HCARecordsRequestFL@hcahealthcare.com
30. Name on File Litigation $1,348,213
Information on File Settlement
WELLPATH HOLDINGS: In Chapter 11 for Quick Sale of RS Division
--------------------------------------------------------------
Wellpath Holdings, Inc., and its affiliated entities sought Chapter
11 protection to pursue a dual-track process, namely, a six-week
sale process for its behavioral health division, and a
restructuring or sale of its other businesses.
Wellpath's roots trace back to two legacy businesses that offered
out-sourced healthcare services to the corrections industry: (a)
Correctional Medical Group Companies ("CMGC"); and (b) Correct Care
Solutions ("CCS").
In 2012, funds affiliated with H.I.G. Capital, LLC, acquired CMGC,
a healthcare provider specializing in medical services for
correctional facilities. In 2018, through a transaction led by
HIG, CMG merged with CCS, one of the largest providers of
healthcare services to correctional facilities across the United
States. The combined entity rebranded under the banner "Wellpath"
to reflect its broader focus on integrated healthcare solutions,
including behavioral health, medical, and dental care.
Since the merger, Wellpath has become the leading and largest
provider of healthcare services in correctional and custodial
behavioral health settings in the United States.
Wellpath's business operations are structured into three key
divisions:
(a) State & Federal (the "SF Division"). The SF Division
delivers medical services to a total patient population of 135,000
individuals in 131 state and federal prisons across 10 states. It
has a staff of 1,600 healthcare professionals. In 2023, the SF
Division generated $775 million in revenue, which accounted for 35%
of Wellpath's total 2023 revenue.
(b) Local Government (the "LG Division"). With a staff of
approximately 1,600 healthcare professionals, the LG Division
delivers medical, dental, and mental healthcare services to a total
patient population of 138,000 adult and juvenile patients in more
than 240 local detention facilities across 29 states. In 2023, the
LG Division generated $1,000,000,000 in revenue, which accounted
for 45% of Wellpath's total 2023 revenue.
(c) the RS Division. Founded in 1997, the RS Division is the
largest U.S. provider of behavioral health, residential treatment,
and community-based services for public entities. With a staff of
approximately 3,700 healthcare professionals, the RS Division
provides health services to approximately 3,000 patients and
operates 70 facilities across 10 states.
As of the Petition Date, the Debtors' prepetition capital structure
includes $644,096,041 of outstanding principal funded debt
obligations:
* $61,596,041 outstanding under a Prepetition Revolving Credit
Facility that matured Oct. 1, 2024,
* $472,500,000 outstanding under a Prepetition First Lien Term
Loan Facility that matures Oct. 1, 2025, and
* $110,000,000 outstanding under a Prepetition Second Lien Term
Loan Facility that matures Oct. 1, 2026.
UBS AG, Stamford Branch, is the administrative agent for the first
lien and second lien facilities.
Road to Chapter 11
In 2022, Wellpath reported total revenue of $2.059 billion, an 18%
annual growth rate since 2006. In 2023, however, the foregoing
trend did not continue. This reversal was due to, among other
things, escalating operating and labor costs, rising professional
liability expenses, and underperforming contracts.
By July 2023, rising costs began to strain Wellpath's cash flow and
liquidity. Compounding matters, the Debtors' Prepetition Revolving
Credit Facility was set to mature in October 2024.
Starting in January 2024, to address the Debtors' significant
maturity wall, Lazard Freres & Co. LLC, as the Debtors'
restructuring investment banker, worked closely with the Debtors'
legal counsel, McDermott Will & Emery LLP, to pursue an
out-of-court recapitalization transaction involving a sale of the
Debtors' behavioral health division, Recovery Solutions (the "RS
Division"). The Debtors sought to use proceeds from a potential
sale of the RS Division to pay down a significant portion of the
Prepetition First Lien Credit Facility to facilitate an extension
of the remaining debt amounts.
The sale process of the RS Division was launched in April 2024.
Lazard, together with the Debtors' healthcare investment banker,
MTS Health Partners L.P. ("MTS"), contacted over 140 parties,
including financial sponsors and strategic parties, to solicit
proposals to acquire the RS Division. By the end of June 2024, the
Debtors received six preliminary indications of interest as part of
a first-round process.
The Debtors and Lazard began engaging with an ad hoc group of
lenders represented by Akin Gump Strauss Hauer & Field LLP, as
counsel, Houlihan Lokey Capital, Inc., as investment banker, and
Ankura Consulting Group LLC, as financial advisor, to begin
discussions about potential out-of-court balance sheet solutions.
On Aug. 30, 2024 (as later amended on Sept. 30, 2024 and Oct. 31,
2024), the Debtors and the Ad Hoc Group executed the Forbearance
Agreements to forbear from taking enforcement actions relating to
the events of default in connection with the cash interest and
amortization payments on the prepetition credit facilities as well
as maturity of the Prepetition Revolving Credit Facility, with the
goal to preserve liquidity and extend the runway to continue
working toward an amicable solution.
However, despite the Debtors' robust marketing process, after
several weeks of further diligence and management presentations,
the Debtors only received one formal second-round check-in bid,
which was at a reduced valuation from the preliminary indication of
interest.
The Debtors did not receive any acceptable bids at the conclusion
of the Debtors' bidding process. Consequently, the Debtors
temporarily put the marketing process on hold and pivoted to
negotiating the terms of an in-court restructuring with the Ad Hoc
Group.
These negotiations ultimately led to the execution of the
Restructuring Support Agreement, dated Nov. 11, 2024 (the "RSA").
The RSA provides a flexible structure that will enable the parties
to explore the most value-maximizing restructuring alternative
available. Under the RSA, the Debtors' proposed restructuring has
several components:
A. To fund the chapter 11 cases and the processes and
transactions contemplated by the RSA, subject to Court approval,
the Debtors secured access to a debtor-in-possession financing
facility in the aggregate principal amount of $522,375,000
consisting of up to (a) $105,000,000 in new money term loans and
(b) $417,375,000 in "rolled up" prepetition secured loans. All
Prepetition Lenders will have the opportunity to participate in the
$105,000,000 new money term loan financing, which will be
syndicated following the "first day" hearing in the chapter 11
cases. The Prepetition Lenders party to the RSA have agreed to
backstop the new money term loan financing. All Prepetition Lenders
that participate in the new money financing will have certain of
their prepetition debt holdings rolled up into the DIP Term
Facility.
B. The RSA contemplates an active, open marketing process for
a value-maximizing sale for substantially all or one or more
subsets of the Debtors' assets. To that end, on the Petition Date,
the Debtors have filed a motion asking the Court to approve the
proposed Bidding Procedures for such a sale and certain related
dates and deadlines. The Bidding Procedures provide for a dual
track process that will allow the Debtors flexibility to market
assets associated with the RS Division, the LG Division, and the SF
Division. Although the proposed Bidding Procedures and the RSA
provide for a longer runway for the LG Division assets and SF
Division assets, the Debtors propose a faster timeline --
approximately six weeks after the Petition Date -- to market and
consummate the sale of the RS Division assets.
C. The Debtors' proposed lenders under the DIP Term Facility
and the Prepetition Lenders party to the RSA have agreed that they
will cap any credit bid of the loans outstanding under the DIP Term
Facility for the Debtors' RS Division assets and related business
lines. Although the credit bid cap does not prevent the DIP
Lenders from including cash as part of any overbid, this structure
assures interested bidders that they are not competing against
"credit bid currency" up to the full amount of the Debtors'
post-petition debt. The Debtors believe that the credit bid cap
will increase the likelihood of a robust auction process for the
Debtors' assets.
D. With respect to the Debtors' LG Division and SF Division,
under the RSA, the DIP Lenders have committed to purchase in a
direct private placement new equity interests in Reorganized
Wellpath pursuant to a chapter 11 plan of reorganization, subject
to a postpetition marketing process for a sale of these assets
under Section 363. The DIP Lenders party to the RSA as of the
Petition Date have agreed to backstop the Debtors' proposed equity
financing in respect of Reorganized Wellpath.
E. The Debtors propose an expeditious chapter 11 process that
appropriately balances the Debtors' restructuring goals, the health
and safety of their patients, and notice and due process
considerations.
Wellpath says it is critical that the Debtors emerge from the
chapter 11 cases as soon as reasonably practicable due to the
nature of their business and their vulnerable patient population.
The Debtors believe that consummation of the transactions
contemplated in the RSA will ensure continued operations of their
healthcare services, employment of their physicians, and safety of
their patients.
The Debtors expect to continue operations normally throughout the
chapter 11 cases and remain focused on providing the quality
healthcare services that their patients require. The Debtors are
committed to working collaboratively with their stakeholders,
including creditors, employees, and clients, to move through the
chapter 11 cases in an efficient, structured manner.
About Wellpath Holdings
Headquartered in Nashville, Tennessee, with operations in
approximately 420 facilities across 39 states, Wellpath Holdings,
Inc., provides outsourced solutions to the correctional healthcare
and behavioral healthcare industries. Wellpath offers an array of
healthcare services to its federal, state, and local government
partners, including on-site medical services, telehealth and mental
health programs, and pharmacy management. Wellpath employs more
than 13,000 people and serves nearly 200,000 patients daily.
On Nov. 11, 2024, Wellpath Holdings, Inc. and 38 affiliated
companies each filed petitions in the United States Bankruptcy
Court for the Southern District of Texas seeking relief under
chapter 11 of the United States Bankruptcy Code (Bankr. S.D. Tex.
Lead Case No. 24-90533).
The Debtors' cases have been assigned to Judge Alfredo R Perez.
Wellpath listed assets and debt of $1 billion to $10 billion as of
the bankruptcy filing.
The Debtors tapped McDERMOTT WILL & EMERY LLP as general bankruptcy
counsel, FTI CONSULTING, INC., as financial advisor, and LAZARD
FRERES & CO. LLC and MTS PARTNERS, LP, as investment bankers. EPIQ
CORPORATE RESTRUCTURING, LLC is the claims agent.
An ad hoc group of lenders is represented by Akin Gump Strauss
Hauer & Field LLP, as counsel, Houlihan Lokey Capital, Inc., as
investment banker, and Ankura Consulting Group LLC, as financial
advisor.
WILLIAM-WALTON: Unsecureds Owed $170K to Get Nothing in Plan
------------------------------------------------------------
William-Walton, Inc., filed with the U.S. Bankruptcy Court for the
Southern District of West Virginia a Small Business Plan of
Reorganization dated September 26, 2024.
Food & Friends was a restaurant founded by the husband wife team of
Robert and Page Murphy in Lewisburg in 1989. After successfully
operating for approximately six years, in 1995, William-Walton,
Inc. was formed and moved the Food & Friends restaurant across the
street and approximately a block away to its current location where
it has continuously operated since then.
After struggling to the point that all personal funds were
exhausted, Debtor was forced to seek relief through Chapter 11 of
the United States Bankruptcy Code in June 2024. Robert Murphy is 78
years of age and of moderate health. However, he has experienced
both cardiac and orthopedic health issues in recent years and has
difficult mobility.
The lead chef is Christopher Nash, the son of the former co founder
of Food & Friends, Page Murphy. Mr. Nash is considering purchasing
the Debtor; however, no details have been agreed upon, and Mr. Nash
is seeking approval for financing while considering the purchase.
If Mr. Nash chooses not to purchase the Debtor or its assets, the
Debtor anticipates seeking another buyer.
The Debtor believes that by continuing to operate as a going
concern while seeking a purchaser, it can maximize the value of the
business, including its goodwill, to the benefit of all creditors.
The savings expected from reduced payments to creditors should
provide William-Walton positive cash-flow to fund this plan in the
interim.
This Plan of Reorganization proposes to pay creditors of the Debtor
from cash flow from operations, future income, and proceeds from
the sale of the business as a going concern.
Class 2 consists of Priority Unsecured Creditors. Priority
unsecured claims total $248,117.48, consisting of $217,122.60 owed
to the Internal Revenue Service and $30,994.88 owed to the West
Virginia State Tax Department. These claims will receive monthly
payments not less than $4,650.41 until such time as a sale occurs
or the claims are paid in full. This Class is impaired.
Class 3 consists of General Unsecured Creditors. General unsecured
claims total approximately $169,589.45. The general unsecured
claims will receive no distribution as Debtor anticipates that any
liquidation of the business or sale as a going concern, will
produce no assets for distribution to general unsecured creditors
in excess of the secured and priority claims. This Class is
impaired.
The Debtor will fund the monthly plan payments from income made in
the ordinary course of its business operations while actively
seeking a purchaser for the business as a going concern. All
disposable income of the Debtor will be committed to this plan.
Upon sale of the business, proceeds will be used to pay creditors
as outlined in Article IV.
The Debtor stresses that the best potential for creditors is to
maximize the amount of goodwill sold by continuing to operate as a
going concern. This approach preserves the value of the Debtor's
established customer base, reputation, and ongoing business
relationships, which are critical components of the overall value
of the business.
A full-text copy of the Plan of Reorganization dated September 26,
2024 is available at https://urlcurt.com/u?l=nNrbXs from
PacerMonitor.com at no charge.
Counsel to the Debtor:
Paul W. Roop, II, Esq.
ROOP LAW OFFICE, L.C.
P.O. Box 1145
Beckley, WV 25802
Telephone: (304) 255-7667
Facsimile: (304) 256-2295
Email: bankruptcy@rooplawoffice.com
About William-Walton Inc.
William-Walton, Inc., sought protection for relief under Chapter 11
of the Bankruptcy Code (Bankr. S.D. W.Va. Case No. 24-50049) on
June 28, 2024, with up to $50,000 in assets and up to $1 million in
liabilities.
The Debtor tapped Paul W. Roop, II, Esq., at Roop Law Office, LC,
as its bankruptcy counsel and Bartos & Associates Inc. as its
bookkeeper.
WIN PRODUCTIONS: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Win Productions, LLC
d/b/a Win Productions LLC
d/b/a Win Production, LLC
d/b/a Win Production LLC
46619 County Highway 2
Griggsville, IL 62340
Chapter 11 Petition Date: November 9, 2024
Court: United States Bankruptcy Court
Central District of California
Case No.: 24-70901
Judge: Hon. Mary P Gorman
Debtor's Counsel: Jeana K. Reinbold, Esq.
SGRO, HANRAHAN, DURR, RABIN & REINBOLD, LLP
1119 S. 6th Street
Springfield, IL 62703
Tel: 217-789-1200
E-mail: jeana@casevista.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $10 million to $50 million
The petition was signed by Wyatt Bradshaw as authorized manager.
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/VDDZNGI/Win_Productions_LLC__ilcbke-24-70901__0001.0.pdf?mcid=tGE4TAMA
WOODFIELD ROAD: Court OK's Sale of Damascus, Md. Property
---------------------------------------------------------
Woodfield Road LLC was granted by the U.S. Bankruptcy Court for the
District of Maryland, Greenbelt, authority to sell its property
free and clear of liens.
The Debtor's Property and improvements are located at 26040-26050
Woodfield Road, Damascus, Maryland 20787. It will be sold to
Wilbur McReynolds and Elenora Hill for $5,880,000.
The Debtor is ordered to make payment of all cost associated with
settlement, including transfer taxes and recordation charges;
payment of approximately $4,500,000.00 to TD Bank in complete
satisfaction of its lien on the Property; and payment of
approximately $14,443.00 to Montgomery County in complete
satisfaction of its lien on the Property.
The Court also held that all other proceeds from the sale of the
Property be placed in the Debtor's DIP account.
About Woodfield Road LLC
Woodfield Road, LLC is a limited liability company engaged in
apartment rental activities. It owns the real property located at
26040-26050, Woodfield Road, Damascus, Md., having an appraised
value of $8.4 million.
Woodfield Road filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. D. Md. Case No. 24-15941)
on July 15, 2024, with $8,421,687 in assets and $4,935,021 in
liabilities. Sam Razjooyan, manager, signed the petition.
Judge Maria Ellena Chavez-Ruark oversees the case.
William C. Johnson, Jr., Esq., at The Johnson Law Group, LLC,
represents the Debtor as bankruptcy counsel.
XCELERATOR BOATWORKS: Creditors to Get Proceeds From Liquidation
----------------------------------------------------------------
Xcelerator Boatworks Inc., filed with the U.S. Bankruptcy Court for
the Western District of North Carolina a Subchapter V Plan dated
September 24, 2024.
The Debtor was incorporated in 2010 to build high end, custom
boats. The Debtor's sole shareholder and president is Joel
Kauffman.
The Debtor operates out of Statesville, North Carolina, where it
brings its products nearly to completion. Final completion
generally occurs in Florida, where most of the Debtor's customers
are located.
Prior to deciding to file bankruptcy, the Debtor intended to work
out a settlement with Jasouto Winter Boat, LLC. To that end, Joel
Kauffman's father, Vern Kauffman, agreed he would loan/invest money
to buy out one of the work in process boats in the Debtor's
possession so that it could be completed and sold at a profit. The
profit was to be used to fund the remaining work for Jasouto Winter
Boat LLC.
Vern Kauffman borrowed enough funds to transfer $565,000 to the
Debtor on June 24, 2024. However, the next day, it became clear
that the Debtor would not be able to reach a settlement with
Jasouto Winter Boat, LLC, and the Debtor's state court counsel
referred it to bankruptcy counsel. The case was filed on July 2,
2024, the day before the Iredell County Sherriff intended to seize
the Debtor's assets on behalf of Jasouto Winter Boat LLC.
When the Debtor filed bankruptcy, it owned eight, unfinished,
custom boats. The counter parties to the boat construction
contracts have asserted various lien rights/ownership interests in
the boats, and the Debtor has worked out numerous settlements with
various parties regarding the work in process boats.
Through this Plan, the Debtor proposes to conduct an orderly wind
down of its operations whereby it will: (i) settle claims of
customers who had boat construction contracts with the Debtor on
the Petition Date, (ii) complete and sell one or more of the eight
work in process boats at a profit, (iii) enter into post-petition
contracts to complete one or more work in process boats at a
profit, (iv) complete limited service work, (v) fully perform a
pre-bankruptcy settlement agreement whereby the Debtor will receive
a portion of the sale proceeds of a boat, and (iv) once all boat
building activity is complete, liquidate its personal property
pursuant to a court approved auction. Once the auction is complete,
the Debtor will distribute all available funds to creditors
pursuant to this Plan.
Class 1 consists of the Allowed General Unsecured Claims. On the
Distribution Date, holders of Allowed General Unsecured Claims
shall receive a Pro Rata Share of the Reorganized Debtor's Cash
remaining on the Distribution Date after payment of all higher
priority Allowed Claims. Class 1 is impaired by the Plan. The
holder(s) of Class 1 Claims are entitled to vote to accept or
reject the Plan.
The Plan contemplates that distributions will be funded by (i) the
completion of work in process that existed on the Petition Date,
(ii) post-petition contracts to complete work in process that
existed on the Petition Date, (iii) service contracts, (iv) the
Bowen Settlement, and (v) the liquidation of the Debtor's assets
via the Personal Property Auction.
A full-text copy of the Subchapter V Plan dated September 24, 2024
is available at https://urlcurt.com/u?l=JVVvLz from
PacerMonitor.com at no charge.
Counsel to the Debtor:
Cole Hayes, Esq.
601 S. Kings Drive
Suite F PMB #411
Charlotte, NC 28204
Telephone: (980) 416-4266
Email: cole@colehayeslaw.com
About Xcelerator Boatworks Inc.
Xcelerator Boatworks Inc., was incorporated in 2010 to build high
end, custom boats.
The Debtor filed a Chapter 11 bankruptcy petition (Bankr. W.D.N.C.
Case No. 24-50244) on July 2, 2024. The Debtor is represented by
Cole Hayes as counsel.
*********
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