/raid1/www/Hosts/bankrupt/TCR_Public/241211.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, December 11, 2024, Vol. 28, No. 345
Headlines
14813 DRAFT HORSE: Case Summary & Two Unsecured Creditors
220 FTL-LTPJ: U.S. Trustee Unable to Appoint Committee
3160 8TH LLC: Voluntary Chapter 11 Case Summary
3265 E. VALLEY: Voluntary Chapter 11 Case Summary
4669 E. SUNSET: Voluntary Chapter 11 Case Summary
99 CENTS: Hilco Real Estate Completes $168M Bankruptcy Sale
ACCO BRANDS: Fitch Alters Outlook on 'BB' LongTerm IDR to Negative
AGRO RESEARCH: Gets Interim OK to Use Cash Collateral Until Jan. 29
ALLAN'S COFFEE: Seeks Bankruptcy Protection in Oregon
ANER HOMES: Gets OK to Use Cash Collateral Until Dec. 31
APPLE CENTRAL: U.S. Trustee Unable to Appoint Committee
BAKELITE US: Fitch Lowers LongTerm IDR to 'BB-', Outlook Negative
BELLTOWN FARMS: Seeks Chapter 11 Bankruptcy in Nebraska
BELT ENTERTAINMENT: U.S. Trustee Unable to Appoint Committee
BIOSIG TECHNOLOGIES: Wins Dismissal of M. Fleming Suit
BISHOP OF SAN DIEGO: Feb. 3, 2025 Claims Filing Deadline Set
BLUE LINE: Reports $79,277 Net Income in Fiscal Q3
CALERA CORP: Claims to be Paid From Financing and Income
CAPSTONE COMPANIES: Appoints Alexander Jacobs as CEO
CAREMAX INC: U.S. Trustee Appoints Creditors' Committee
CATHETER PRECISION: Intracoastal, 2 Others Hold 4.99% Stake
CENTER FOR ALLERGIC: Updates Fairview Center Claim; Amends Plan
CFC-LSH LLC: Fitch Assigns 'BB-' Rating on 2024 A-1 & A-2 Bonds
COMMUNITY HEALTH: Fitch Affirms 'CCC+' Issuer Default Rating
COVERED BRIDGE: Case Summary & 18 Unsecured Creditors
CVR ENERGY: Fitch Lowers IDR to 'B+', Outlook Stable
DALE HOLLOW: Sec. 341(a) Meeting of Creditors on Jan. 13
DAVID VELASQUEZ: Files Chapter 11 Bankruptcy in Texas
DMCC HERMITS: Commences Subchapter V Bankruptcy Process
DMCC TECH: Seeks Bankruptcy Protection in Florida
DODGE CONSTRUCTION: Moody's Alters Outlook on 'Caa2' CFR to Stable
DRTMG LLC: Rental Income & Sale Proceeds to Fund Plan Payments
ECHOSTAR CORP: Dodge & Cox Holds 9.6% of Class A Common Stock
ECHOSTAR CORP: Renaissance Technologies Holds Less Than 5% Stake
EDUCATIONAL DEVT: Needham Entities Hold 9.38% Equity Stake
EMERGENT BIOSOLUTIONS: Oak Hill Advisors Holds 6.39% Stake
ENGLOBAL CORP: William Coskey, Alliance 2000 Hold 22% Stake
ENJOY SA: Says Repayment Terms Fulfilled on December 6
ENVERIC BIOSCIENCES: Intracoastal, 2 Others Hold 3.1% Stake
ENVIVA INC: Davis Polk Advises Creditors in Restructuring
FIG & FENNEL: Court OK's Sale of MIA Lease & Concession
FIRST CHOICE: Posts $817,207 Net Loss in Fiscal Q3
FLUID MARKET: Bielli & Klauder Represents Vehicle Owners
FREE SPEECH: Jones' Lawyers Slam Onion's Bid to Buy Infowars
GLOBAL ONE: Hearing on Cash Collateral Access Set for Jan. 22
GMT 3435 REALTY: Case Summary & Four Unsecured Creditors
GOL LINHAS: Prepares for Initial Ch. 11 Restructuring Plan Filing
GREENWAVE TECHNOLOGY: Reda, SEG Opportunity No Longer Own Shares
H-FOOD HOLDINGS: U.S. Trustee Appoints Creditors' Committee
HALL OF FAME: Net Loss Narrows to $4.4 Million in Fiscal Q3
HERTZ CORP: Faces Unpaid Interest Fight
HERTZ CORP: Secured Notes Add-on No Impact on Moody's 'B2' CFR
HILLVIEW LLC: U.S. Trustee Unable to Appoint Committee
HISTOGEN INC: Updates Equity Interests Claims Pay
HISTORIC TIMBER: Gets Court OK to Use Cash Collateral Until Jan. 17
INFINERA CORP: Ramya Rao Holds 6.05% Equity Stake
INNOVATE CORP: Jefferies Entities Report 5.3% Stake
INSEEGO CORP: Swings to $8.97 Million Net Income in Fiscal Q3
INTERCEMENT BRASIL: Chapter 15 Case Summary
INTRUM AB: Dec. 16, 2024 Disclosures & Plan Hearing Set
JOE'S AUTO: Unsecureds Will Get $7,500 per Year for 3 Years
L.C.S. UNLIMITED: Bankr. Administrator Unable to Appoint Committee
LA DELTA FARMS: Unsecureds to be Paid in Full in Plan
LEARNINGSEL LLC: Lane & Nach Updates List of Creditors
LINEAR COMPANIES: Voluntary Chapter 11 Case Summary
LIQTECH INTL: All Four Proposals Approved at Annual Meeting
LJB LLC: Court Extends Use of Cash Collateral to Dec. 20
LL FLOORING: Cowen Financial Ceases 5% Ownership of Common Stock
LOS ANGELES KOREAN: Voluntary Chapter 11 Case Summary
MCCOY COUNSELING: Unsecureds Will Get 46.76% over 5 Years
MEG ENERGY: Fitch Affirms 'BB-' LongTerm IDR, Outlook Stable
NUASIN NEXT: Moody's Puts 'Ba1' Rating Under Review for Downgrade
OUR TOWN REALESTATE: Starts Subchapter V Bankruptcy Protection
PARTY EMPORIUM: Case Summary & 12 Unsecured Creditors
PEACHY ATHLETIC: Gets OK to Use Cash Collateral Until Dec. 19
PEAK ACQUISITION: Public Sale Auction Slated for December 12
PICCARD PETS: U.S. Trustee Unable to Appoint Committee
PRIME ELECTRICAL: Case Summary & 15 Unsecured Creditors
PROJECT ALPHA: Moody's Cuts Rating on Secured 1st Lien Debt to B2
PRUDENTIAL ENTERPRISE: Seeks Chapter 11 Bankruptcy Protection
PUERTO RICO: No Clear Solution to Reduce PREPA Debt
REALPAGE INC: Moody's Affirms 'B3' CFR, Outlook Stable
RIVER SPRINGS: Moody's Upgrades Revenue Rating to Ba1
S & W SALES: Sec. 341(a) Meeting of Creditors on Jan. 9
SICHEM INC: Case Summary & Six Unsecured Creditors
SOLCIUM SOLAR: Court OKs Interim Use of Cash Collateral
TALEN ENERGY: Fitch Alters Outlook on BB- LongTerm IDR to Negative
TANNER DEWEESE: Case Summary & 18 Unsecured Creditors
TGP HOLDINGS: Moody's Alters Outlook on 'Caa1' CFR to Positive
THERMOSTAT PURCHASER: Moody's Rates New $100MM 1st Lien Loan 'B2'
TRINET GROUP: Fitch Affirms 'BB+' LongTerm IDR, Outlook Stable
TRUE VALUE: Court Orders Appointment of Retiree Committee
TRUE VALUE: McGuireWoods & Richards Layton Represent STIHL Group
TW MEDICAL: Gets Final OK to Use Cash Collateral Until Feb. 17
US ECO PRODUCTS: Case Summary & 12 Unsecured Creditors
UWM HOLDINGS: Fitch Assigns 'BB-' LongTerm IDR, Outlook Positive
VANGUARD MEDICAL: Court Extends Use of Cash Collateral to Jan. 15
VIVAKOR INC: Expects to Issue 6.7MM Shares for Endeavor Crude Deal
VOBEV LLC: Case Summary & 30 Largest Unsecured Creditors
VOBEV LLC: Seeks Chapter 11, Gets $37.25MM DIP Funding from Ares
WATERVILLE REDEVELOPMENT: Files Chapter 11 Bankruptcy in Maine
WING BOSS: Gets Interim OK to Use Cash Collateral Until Dec. 19
[*] CareTrust Acquires 46 Facilities in Bankruptcy Sale for $97M
*********
14813 DRAFT HORSE: Case Summary & Two Unsecured Creditors
---------------------------------------------------------
Debtor: 14813 Draft Horse Lane, LLC
14813 Draft Horse Lane
Wellington, FL 33414
Chapter 11 Petition Date: December 9, 2024
Court: United States Bankruptcy Court
Southern District of Florida
Case No.: 24-22829
Judge: Hon. Mindy A Mora
Debtor's Counsel: Jordan L. Rappaport, Esq.
RAPPAPORT OSBORNE & RAPPAPORT, PLLC
1300 N Federal Hwy
Suite 203
Boca Raton, FL 33432
Tel: 561-368-2200
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Mordechay Maximoff 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/QVO7BEA/14813_Draft_Horse_Lane_LLC__flsbke-24-22829__0001.0.pdf?mcid=tGE4TAMA
220 FTL-LTPJ: U.S. Trustee Unable to Appoint Committee
------------------------------------------------------
The U.S. Trustee for Region 21, until further notice, will not
appoint an official committee of unsecured creditors in the Chapter
11 case of 220 FTL-LTPJ, LLC, according to court dockets.
About 220 FTL-LTPJ
220 FTL-LTPJ, LLC sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Fla. Case No. 24-21022) on October 24,
2024. In the petition filed by Irene Marciano, as authorized
signatory, the Debtor reports estimated assets between $100,000 and
$500,000 and estimated liabilities between $1 million and $10
million.
Judge Peter D. Russin handles the case.
The Debtor is represented by Robert A. Stiberman, Esq., at
Stiberman Law, P.A.
3160 8TH LLC: Voluntary Chapter 11 Case Summary
-----------------------------------------------
Debtor: 3160 8th LLC
3160 W. 8th St.
Los Angeles CA 90
Case No.: 24-20018
Business Description: 3160 8th LLC operates hotels and motels.
Chapter 11 Petition Date: December 9, 2024
Court: United States Bankruptcy Court
Central District of California
Judge: Hon. Sheri Bluebond
Debtor's Counsel: Matthew Sean Harrison, Esq.
PROMETHEUS CIVIC LAW
120 Vantis Drive Suite 300
Aliso Viejo CA 92656
Tel: 949-436-4500
Email: matt@procivlaw.com
Estimated Assets: $10 million to $50 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by David Suh as owner/principal.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/MBLXGCQ/3160_8th_LLC__cacbke-24-20018__0001.0.pdf?mcid=tGE4TAMA
3265 E. VALLEY: Voluntary Chapter 11 Case Summary
-------------------------------------------------
Debtor: 3265 E. Valley Vista, LLC
7129 E. 6th Avenue
Scottsdale, AZ 85251
Business Description: 3265 E. Valley Vista is primarily engaged in
renting and leasing real estate properties.
Chapter 11 Petition Date: December 9, 2024
Court: United States Bankruptcy Court
District of Arizona
Case No.: 24-10529
Judge: Hon. Brenda K Martin
Debtor's Counsel: Randy Nussbaum, Esq.
SACKS TIERNEY P.A.
4250 N Drinkwater Blvd.
4th Floor
Scottsdale, AZ 85251-3693
Tel: 480-425-2600
Email: Randy.Nussbaum@SacksTierney.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Sean Parsons as 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/MGCLMWY/3265_E_Vallley_Vista_LLC__azbke-24-10529__0001.0.pdf?mcid=tGE4TAMA
4669 E. SUNSET: Voluntary Chapter 11 Case Summary
-------------------------------------------------
Debtor: 4669 E. Sunset, LLC
7129 E. 6th Avenue
Scottsdale, AZ 85251
Business Description: The Debtor is primarily engaged in renting
and leasing real estate properties.
Chapter 11 Petition Date: December 9, 2024
Court: United States Bankruptcy Court
District of Arizona
Case No.: 24-10533
Debtor's Counsel: Randy Nussbaum, Esq.
SACKS TIERNEY P.A.
4250 N Drinkwater Blvd.
4th Floor
Scottsdale, AZ 85251-3693
Tel: 480-425-2600
Email: Randy.Nussbaum@SacksTierney.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Sean Parsons as 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/MREF2EY/4669_E_Sunset_LLC__azbke-24-10533__0001.0.pdf?mcid=tGE4TAMA
99 CENTS: Hilco Real Estate Completes $168M Bankruptcy Sale
-----------------------------------------------------------
Hilco Real Estate, LLC (HRE) announces the successful sale of real
estate assets within the Chapter 11 bankruptcy case of 99 Cents
Only Stores, LLC (99 Cents).
99 Cents, a prominent discount retailer that originated in 1982 in
Los Angeles, California, expanded into Arizona, Texas and Nevada,
eventually managing 41 owned retail locations, 333 leased stores
and three vacant development parcels. However, due to rising
competition, increased labor costs and logistical challenges --
exacerbated by the lingering effects of the COVID-19 pandemic --
the company was forced into liquidating under Chapter 11 bankruptcy
in April 2024. HRE was quickly engaged by 99 Cents to run a
coordinated monetization process for its real estate of owned and
leased assets.
Given the time constraints of the bankruptcy process, combined with
the perishability of a portion of the company's grocery-related
inventory, swift action was required. HRE had 45 days to develop
and execute a targeted marketing strategy. Within this timeframe,
the team attracted significant interest from prospective buyers
nationwide. By leveraging a combination of direct outreach, print
and digital marketing campaigns, over 360 Indications of Interest
were submitted, leading to 181 Asset Purchase Agreements received
together with non-refundable earnest money deposits.
The campaign culminated in a highly competitive, virtual auction
that drew bids from qualified investors, including a major national
discount retailer as well as local end-users, ensuring the
portfolio achieved maximum value. Following the auction, all
property closings were completed within an average of just 30 days.
Several of the properties purchased by large retailers have already
begun reopening to serve the neighborhoods in which they are
located, while other sites are slated to become thriving retail
spaces or redevelopment projects, bringing new retailers or
services to these areas.
Ultimately, HRE successfully managed the sale of the company's
portfolio of 44 owned locations across four states and 333 leased
real estate assets, resulting in over $168 million in proceeds
generated in a rapid 75-day turnaround, exceeding client
expectations and providing proceeds to assist with covering the
secured debt, thus solidifying Hilco's reputation as an industry
leader in high-stakes, large-scale real estate transactions.
Joel Schneider, senior vice president at Hilco Real Estate said,
"This portfolio sale represents more than just a successful
transaction--it's a fresh start for these properties and the
communities they serve. By transitioning into new retail spaces or
innovative redevelopment projects, these sites have the potential
to enhance the economic fabric of their neighborhoods in Arizona,
California, Nevada and Texas. We're proud to have played a pivotal
role in this bankruptcy sale, delivering an ideal outcome for our
client while contributing to the growth and vitality of these
regions."
The success of the bankruptcy sale was further supported by Hilco
Consumer -- Retail, who expertly handled the going-out-of-business
sales for the inventory, fixtures, furniture and equipment. Their
seamless execution achieved a total of $245 million recovered and
ensured the properties were sale-ready, enabling HRE to secure
maximum returns for the real estate portfolio.
For more information about this sale or to inquire about other
opportunities, please visit our website HilcoRealEstate.com or call
(855) 755-2300.
About Hilco Real Estate
Hilco Real Estate -- www.hilcorealestate.com -- is headquartered in
Northbrook, Illinois (USA). Hilco Real Estate is a national
provider of strategic real estate disposition services. Acting as
an agent or principal, Hilco Real Estate uses its experience to
advise and execute strategies to assist clients in deriving the
maximum value from their real estate assets. By leveraging
multi-faceted sales strategies and techniques, aggressive
repositioning and restructuring experience, a vast and motivated
network of buyers and sellers, and substantial access to capital,
Hilco Real Estate exceeds expectations even in the most complex
transactions.
Hilco Real Estate is part of Northbrook, Illinois based Hilco
Global (www.hilcoglobal.com), the world's leading authority on
maximizing the value of business assets by delivering valuation,
monetization, advisory, and capital solutions to an international
marketplace. Hilco Global operates more than twenty specialized
business units offering services that include asset valuation and
appraisal, retail and industrial inventory acquisition and
disposition, real estate and strategic capital equity investments.
About Number Holdings, Inc.
Founded in 1982, 99 Cents Only Stores LLC -- http://www.99only.com/
-- operate over 370 "extreme value" retail stores in California,
Arizona, Nevada and Texas under the business names "99ยข Only
Stores" and "The 99 Store." The Company offers its customers a wide
array of quality products -- from everyday household items, to
fresh produce, deli, and other grocery items, to an assortment of
seasonal and party merchandise -- many of which are still priced at
or below 99.99 cents. The Company's stores are primarily located in
urban areas and underserved communities, many of which lack close
access to traditional grocery stores.
The Debtors sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Del. Lead Case No. 24-10719) on April 7,
2024. In the petition signed by Christopher J. Wells, as chief
restructuring officer, the Debtor disclosed up to $10 billion in
both assets and liabilities.
Judge Kate Stickles oversees the case.
The Debtors tapped Milbank LLP as general bankruptcy counsel,
Morris, Nichols, Arsht & Tunnel LLP as Delaware bankruptcy counsel,
Jefferies LLC as investment banker, Alvarez & Marsal North America,
LLC as financial advisor, Hilco Merchant Resources, LLC and Hilco
Real Estate, LLC as retail consultant and real estate consultant,
and Kroll Restructuring Administration LLC as claims and noticing
agent.
ACCO BRANDS: Fitch Alters Outlook on 'BB' LongTerm IDR to Negative
------------------------------------------------------------------
Fitch Ratings has affirmed ACCO Brands Corporation's ratings,
including its Long-Term Issuer Default Rating (IDR) at 'BB', its
senior secured revolving credit facility (which is co-borrowed by
ACCO Brands Australia Holding Pty Limited) and term loan at 'BBB-'
with a Recovery Rating of 'RR1', and its senior unsecured notes at
'BB'/'RR4'. The Rating Outlook has been revised to Negative from
Stable.
The Negative Outlook reflects Fitch's view that ACCO's leverage
could be sustained above 3.5x over the next 12-24 months given
ongoing declines in revenue and EBITDA, without a meaningful offset
from debt reduction from FCF. The company could also divert FCF
toward acquisitions to support revenue and EBITDA and offset
secular declines in its core business, which could result in
leverage sustaining above 3.5x.
The ratings also consider ACCO's leading market position in the
office products category, annual FCF generation and no near-term
maturities.
Key Rating Drivers
Declining Organic Sales: Fitch projects ACCO's sales will decline
by high-single-digits in 2024 (to around $1.67 billion) and
continue to decline by low single digits thereafter. The decline is
driven by secular declines in the company's core office products
categories, SKU reductions, slowing post-pandemic office returns,
macroeconomic challenges, and conservative retailer ordering.
Growth in tech accessories and share gains outside of North America
are potential positives but unlikely to offset core declines.
Fitch calculated EBITDA is forecast to decline to around $230
million in 2024 compared to $255 million in 2023 and from an
average of around $300 million between 2017-2019. EBITDA could
modestly fall to the $220 million to $230 million range in 2025 and
2026. Fitch believes ACCO will need to invest heavily in its
existing portfolio as well as execute on acquisitions to generate
modest top line growth. The company took a similar approach to
offset declining sales between 2016 and 2020 and spent around $800
million on acquisitions in higher growth categories and/or
geographies.
Acquisitions May Sustain Leverage Above 3.5x: Fitch forecasts
ACCO's leverage at about 3.6x for 2024, but it could remain above
3.5x in 2025 if the company is unable to reduce debt with FCF or
prioritizes acquisitions over debt repayment. Fitch believes ACCO
will likely pursue acquisitions to drive revenue and EBITDA growth
and offset secular declines in its core business. Historically, the
company has used debt to finance acquisitions, as it did with
PowerA in 2020. ACCO targets being within 2.0x - 2.5x net leverage,
but Fitch views this as aspirational since the company has not been
in that range for several years.
Good Expenditure Management: Fitch expects ACCO to generate EBITDA
margins of about 13.9% in 2024, driven by cost savings and
efficiencies that offset lower fixed cost absorption from declining
sales volumes. The company's multi-year cost efficiency program
targets $60 million in savings, which should bring EBITDA margins
to the low 14% range over the next several years. Fitch forecasts
FCF margins will remain strong in the 5%-6% range annually.
Long-term profitability could decline if office product sales
continue to drop without offsetting growth in other categories.
Secular Business Pressures: ACCO is highly exposed to secular
office product declines from the shift toward digital technologies
and away from paper. This is partially offset by growth and market
share gains in emerging markets. ACCO is also managing a shift in
revenue away from traditional retail channels to discounters,
e-commerce and independent channels. Business essentials (53% of
revenues) is likely to keep declining by mid to high single digits
annually. Fitch projects overall revenue declines of 3% in 2025 and
1% thereafter, with tech accessory growth (17% of revenues) and
stable revenue from learning and creative (30% of revenue).
Reasonable FCF, Minimal Refinancing Risk: ACCO should generate FCF
in the $80 million-$100 million range annually over the next
several years (after dividends), supporting its liquidity profile.
The company has no near-term debt maturities after it extended its
credit facilities in October 2024 and used its revolver to repay
its AUD and USD term loans and a portion of its EURO term loan.
Evolving Tariff Landscape: The tariff landscape is still evolving,
but Fitch believes any increase to input or selling costs as a
result of tariffs or other regulatory costs would negatively affect
ACCO's sales and EBITDA. ACCO shifted a large portion of
manufacturing away from China as a result of previous tariffs but
still sourced approximately 60% of products from lower-cost
countries (primarily in Asia) as of 2023. Many of ACCO's products
are highly discretionary, and if it had to pass on increased costs
to consumers it would likely lead to accelerated declines in
sales.
Derivation Summary
ACCO's BB rating is constrained by secular challenges in the office
products industry, and its leverage downgrade sensitivity is 0.5x
tighter than other BB rated peers not facing secular declines.
Other similarly rated peers in Fitch's coverage portfolio are
Central Garden & Pet Company (CENT; BB/Stable), Spectrum Brands,
Inc. (Spectrum; BB/Stable) and Newell Brands Inc. (Newell;
B+/Stable).
CENT maintains a strong market position in the pet, lawn and garden
segments, ample liquidity, and EBITDA leverage in the mid-3x
vicinity. These strengths are moderated by mid-single digit revenue
decline in fiscal 2024 and limited scale, with EBITDA in the low to
mid-$300 million range; and customer concentration.
Spectrum's recovering EBITDA and material debt reduction in 2024
should support EBITDA leverage sustained below 2.5x, including
below 2.0x in FY2024 (ending Sept. 30), compared to 6.7x in fiscal
2023. Spectrum's rating also reflects the lack of clarity on its
longer-term business mix, driven by the potential divestiture of
its Home and Personal Care (HPC) business and active history of
M&A.
Newell's 'B+' ratings reflect ongoing challenges that indicate
significantly reduced medium-term earnings power and cash flow
relative to 2018-2022 levels. Beyond the current slowdown in
discretionary consumer spending, execution risk remains as Newell
continues to realign and restructure its business segments and
supply chain network and to reposition its brand portfolio. Fitch
expects EBITDA to remain below $1 billion in the near term, with
EBITDA leverage (gross debt/EBITDA) elevated in the mid-5x in 2024
and then trending toward the low-5x range.
Key Assumptions
Fitch's Key Assumptions Within Its Rating Case for the Issuer
Include
- Overall revenue decline of around 3% in 2025 and in the 1%-2%
range thereafter, following a projected decline of around 9% in in
2024.
- Secular pressures continue to drive declines in the MSD range for
office products across the horizon, partially offset by growth in
technology and low growth in learning and creative.
- Cost savings initiatives support margins in the low 14% range in
2025 and 2026.
- FCF margins remain healthy in the 5%-6% range, yielding FCF in
the $80 to low $100 million range annually from 2024 to 2026. The
company uses its FCF to pay down debt such that leverage to returns
to the low 3.0x range beginning 2025.
- The inability of the company to stem the level of revenue and
EBITDA declines or a debt financed acquisitions would be a ratings
concern.
- Floating interest rates ranging from 3.5% to 5%.
Recovery Analysis
Fitch assigned Recovery Ratings to the various debt tranches in
accordance with its criteria, which allows for the assignment of
RRs for issuers with IDRs in the 'BB' category. Given the distance
to default, RRs in the 'BB' category are not computed by bespoke
analysis. Instead, they serve as a label to reflect an estimate of
the risk of these instruments relative to other instruments in the
entity's capital structure.
Fitch rates ACCO's first-lien secured debt 'BBB-'/'RR1', two
notches above the IDR, reflecting outstanding recovery prospects in
the event of default. ACCO's unsecured debt has average recovery
prospects and is rated 'BB'/'RR4'.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- An upgrade is unlikely in the near term given the existing
business model and industry issues, but an upgrade could be
possible if ACCO makes favorable acquisitions that successfully
shift its business mix toward less-cyclical or higher-growth
categories, supporting sustained sales and EBITDA growth while
maintaining EBITDA leverage below 3.0x.
- The Outlook could be revised to Stable if ACCO's EBITDA
stabilized around at least $225 million and it materially reduced
debt to a point where Fitch was confident that it could durably
maintain EBITDA leverage below 3.5x.
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Continued declines in sales and EBITDA, with EBITDA approaching
$200 million.
- EBITDA leverage sustained above 3.5x.
- A debt-financed acquisition without a concrete plan to reduce
EBITDA leverage to below 3.5x within 12-24 months of the close of
the acquisition.
Liquidity and Debt Structure
ACCO's liquidity profile is good, supported by reasonable annual
FCF generation that is seasonally skewed to the second half of the
year. ACCO had $102 million of cash on hand as of September 30,
2024, and pro-forma for its recent amendment, Fitch believes that
ACCO had availability of around $265 million on its revolver.
On Oct. 31, the company announced an amendment of its credit
facilities where it reduced the revolver size to $467.5 million
(from $600 million previously), and extended the maturity to either
180 days prior to the maturity of its 4.25% senior notes (maturing
March 15, 2029), or Oct. 30, 2029, if the notes are extended beyond
the maturity of the credit facility.
The company used revolver availability to repay the outstanding
balance on its US and AUD term loans, as well as a portion of the
EUR term loan. Pro forma for the amendment ACCO had around $900
million of debt outstanding, consisting primarily of revolver
drawings, US$133.4 million on its EUR senior secured term loan A
(maturing Oct. 30, 2029) and $575 million of unsecured notes
(maturing in March 2029).
Issuer Profile
ACCO Brands is one of the world's largest designers, marketers and
manufacturers of branded academic, consumer and business products.
The product portfolio includes well-known brands, including
Swingline, Five Star, Mead, AT-A-GLANCE, Kensington, PowerA, GBC,
Tilibra, Leitz and Rapid.
Summary of Financial Adjustments
Historical EBITDA has been adjusted for stock-based compensation,
impairment charges, transaction & integration expenses and other
items.
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
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ACCO Brands Australia
Holding Pty Limited
senior secured LT BBB- Affirmed RR1 BBB-
ACCO Brands Corporation LT IDR BB Affirmed BB
senior unsecured LT BB Affirmed RR4 BB
senior secured LT BBB- Affirmed RR1 BBB-
AGRO RESEARCH: Gets Interim OK to Use Cash Collateral Until Jan. 29
-------------------------------------------------------------------
A U.S. bankruptcy court overseeing the Chapter 11 case of Agro
Research International, LLC extended the company's use of cash
collateral from Dec. 10 to Jan. 29 next year.
At the hearing held on Dec. 10, the U.S. Bankruptcy Court for the
Middle District of Florida authorized the company to use cash
collateral to pay its expenses, marking the fifth extension since
the company's Chapter 11 filing in June.
Last month, the court issued an interim order allowing Agro
Research International to use cash collateral until Dec. 10 to pay
up to $9,569.64 in expenses. The order dated Nov. 15 granted the
company's lenders a replacement lien on post-petition property as
protection for any diminution in value of the lender's collateral.
About Agro Research International
Agro Research International, LLC, a company in Sorrento, Fla., is
committed to the constant development of unique and eco-friendly
formulations that will help the world grow better quality food
through research, innovation and unique alliances worldwide.
Agro Research International filed a petition under Chapter 11,
Subchapter V of the Bankruptcy Code (Bankr. M.D. Fla. Case No.
24-03122) on June 20, 2024, with $117,645 in assets and $3,546,069
in liabilities. Marc Lajeunesse, managing member, signed the
petition.
Judge Lori V. Vaughan presides over the case.
Robert A. Stiberman, Esq., at Stiberman Law, P.A. represents the
Debtor as bankruptcy counsel.
ALLAN'S COFFEE: Seeks Bankruptcy Protection in Oregon
-----------------------------------------------------
On December 3, 2024, Allan's Coffee & Tea Inc. filed Chapter 11
protection in Oregon. According to court filing, the Debtor reports
$2,767,308 in debt owed to 1 and 49 creditors. The petition states
funds will be available to unsecured creditors.
About Allan's Coffee & Tea Inc.
Allan's Coffee & Tea Inc., doing business as Allan's Cafe and
Allan's Coffee, sells coffee, tea, syrups, concentrates, cups, and
filters.
Allan's Coffee & Tea Inc. sought relief under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. D. Or. Case No. 24-62692) on December
3, 2024. In the petition filed by Robert Morgan, as president, the
Debtor reports total assets of $1,246,785 and total liabilities of
$2,767,308.
Honorable Bankruptcy Judge Thomas M. Renn handles the case.
The Debtor is represented by:
Loren S. Scott, Esq.
THE SCOTT LAW GROUP
PO Box 70422
Springfield, OR 97475
Tel: 541-868-8005
Fax: 541-868-8004
ANER HOMES: Gets OK to Use Cash Collateral Until Dec. 31
--------------------------------------------------------
Aner Homes, LLC got the green light from the U.S. Bankruptcy Court
for the Western District of Tennessee to use the cash collateral of
Mortgage Funding 04, LLC until Dec. 31 or until a Chapter 11 plan
of reorganization is confirmed.
Mortgage Funding 04, a lender, holds security interest in the
company's rental properties in Memphis, Tenn. The rents generated
from the properties constitute the lender's cash collateral.
Mortgage Funding 04 will be granted replacement liens on
post-petition assets of the same type as its pre-bankruptcy
collateral as well as a superpriority administrative expense claim.
In addition, the lender will receive a monthly payment of $8,000 as
additional protection.
About Aner Homes
Aner Homes, LLC is a privately owned building and remodeling
company based in Memphis, Tenn.
The Debtor filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. W.D. Tenn. Case No. 24-22804) on June 12,
2024, with $1 million to $10 million in both assets and
liabilities. James Bailey, III of Butler Snow, LLP serves as
Subchapter V trustee.
Judge Denise E. Barnett presides over the case.
Bo Luxman, Esq., at Luxman Law Firm represents the Debtor as
bankruptcy counsel.
APPLE CENTRAL: U.S. Trustee Unable to Appoint Committee
-------------------------------------------------------
The U.S. Trustee for Region 20 disclosed in a court filing that no
official committee of unsecured creditors has been appointed in the
Chapter 11 case of Apple Central KC, LLC.
About Apple central KC
Apple Central KC LLC sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Kan. Case No. 24-21427) on October 30,
2024. In the petition signed by Michael Rummel, authorized
signatory, the Debtor disclosed up to $10 million in assets and up
to $50 million in liabilities.
Judge: Dale L Somers oversees the case.
Frank Wendt, Esq., at Brown & Ruprecht, PC represents the Debtor as
counsel.
BAKELITE US: Fitch Lowers LongTerm IDR to 'BB-', Outlook Negative
-----------------------------------------------------------------
Fitch Ratings has downgraded Bakelite US Holdco, Inc.'s Long-Term
Issuer Default Rating (IDR) to 'BB-' from 'BB' and assigned a new
rating of 'BB+' with a Recovery Rating of 'RR2' to the new proposed
secured term loan. Fitch has also affirmed the company's existing
secured term loan at 'BB+'/'RR2'. The Rating Outlook is Negative.
The downgrade follows the company's announcement that it plans to
issue a new $825 million senior secured term loan, which will be
used to refinance the existing term loan and fund a $240 million
distribution to shareholders. Fitch believes the transaction comes
at a time of continued uncertainty in Bakelite's key construction
end market, and continues a trend of a more shareholder-friendly
financial policy.
The Negative Outlook reflects Fitch's expectations for EBITDA
leverage to remain above the 4.5x negative rating sensitivity until
YE 2027.
Key Rating Drivers
Dividend Recapitalizations Durably Increase Leverage: The announced
dividend recapitalization increases EBITDA leverage in a durable
manner through the forecast period. Fitch estimates the additional
$240 million of gross debt will lead to pro forma Fitch-calculated
EBITDA leverage of around 5.5x in 2024.
As synergies and restructuring efforts continue to be realized and
increase profitability, Fitch forecasts EBITDA leverage to decline
gradually to around 4.3x by the end of the forecast period. Future
debt-funded acquisitions or special dividends may pressure credit
metrics further if not balanced with equity contributions or
meaningful subsequent debt reduction.
Robust Barriers to Entry: Resins sold in this industry are
typically developed in close coordination with customers, leading
to products specified to customers' processes and systems. Many of
Bakelite's customers are blue-chip businesses it has served for
20-plus years. In addition, formaldehyde-based resins have a high
water content and a short shelf life of about four weeks, which
creates a maximum economic shipping radius of 200 miles. The
incumbent participants have locational advantages with facilities
located close to customers.
Strong Pass-Through Ability: Fitch views Bakelite's pass-through
ability as favorable to the credit profile. Pricing of its raw
materials can be volatile, though its resin-pricing contracts
remove much of this volatility. About 85% of volumes are covered by
contracts or pricing mechanisms that allow for raw materials price
pass-throughs, helping the company maintain stable margins. Key raw
materials, such as phenol, methanol and urea, are tied to
market-based indices while resin prices move monthly, based on
published market changes.
Established Position in Rationalized Market: Bakelite currently
holds the number one market share position in phenolic specialty
resins in North America and Europe. The formaldehyde-based resins
industry is rational and well-structured, with the top three
companies accounting for more than 80% of volume in North America
and roughly 50% in Europe. Fitch expects that any further M&A
activity within the forecast horizon will be of a bolt-on nature
and not transformational.
Sustainability Tailwinds: There has been a growing emphasis in the
construction market on the increased use of cladding and insulating
materials that exhibit favorable fire, smoke, and toxicity (FST)
resistance. Fitch views this as a positive opportunity for
Bakelite's product portfolio as its phenolic resins are designed to
withstand high heat loads, while maintaining mechanical strength
and providing FST resistance. These same qualities are sought after
in electric vehicle end markets. This provides further
opportunities for producers as the products are used in battery
cases and lightweighting applications.
Cyclical End Markets: The company is exposed significantly to
cyclical end markets, such as home construction/remodeling (around
50% of gross profit) and autos. It has so far navigated near-term
weakness in the residential and commercial construction industries.
However, possible sustained softness in these sectors due to higher
for longer interest rates, combined with substantial exposure to
European markets, could weigh on financial performance over the
next two to three years.
Phenol and Formaldehyde Exposure: Bakelite, as a formaldehyde-based
resin producer, is exposed to formaldehyde, which has been
classified by the U.S. Environmental Protection Agency as a
possible human carcinogen. Phenol is also a hazardous monomer.
Phenol and formaldehyde emissions from products using Bakelite
resins are below that of background emissions of these substances.
Formaldehyde-free options have been developed; however, at this
point they are expensive and not widely in demand.
Derivation Summary
Bakelite is a similar size to Ingevity Corporation (BB/Stable) in
terms of annual revenue. It generates similar EBITDA margins to
peer Koppers Holdings (BB-/Stable), but lower margins than H.B.
Fuller Company (BB/Stable) and Ingevity. Pro forma for the
transaction, Bakelite's EBITDA leverage now exceeds its peers, to
above 5.0x, while the other peers' metrics are in the 3.0x-3.5x
range. Although Fitch expects coverage metrics to be adequate
throughout the forecast, Bakelite's EBITDA interest coverage is the
lowest of its peers, around 3.0x.
Key Assumptions
- Revenue growth of around 3%-4% each year in 2025-2028 as global
macro demand begins to recover;
- Pricing and raw materials costs grow 1%-2% each year;
- New term loan proceeds utilized to refinance existing TLB and
fund equity distribution;
- Capex around 3% of revenue each year;
- Full realization of synergies from GP Chem and LRBG acquisitions
in 2025;
- Fitch assumes a total of $200 million in cumulative equity
distributions between 2026 and 2028.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade:
- Failure to reduce EBITDA leverage to below 4.5x by YE 2026,
stemming potentially from sustained earnings weakness;
- EBITDA margins trending toward the mid-single digits on a
sustained basis, indicating the inability to pass on raw material
costs or operating inefficiencies;
- Large debt-funded acquisitions or aggressive sponsor-distribution
policies.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade:
- The Outlook could be revised to Stable upon increased visibility
of EBITDA leverage declining below 4.5x by YE 2026;
- EBITDA margins approaching the mid-teens, reflecting increased
pricing power.
Liquidity and Debt Structure
Pro forma for the transaction, Bakelite maintains adequate
liquidity of around $130 million, consisting of $30 million in cash
and $100 million in undrawn asset-backed loan availability.
Liquidity needs are manageable throughout the forecast, with around
$8 million in required annual term loan amortization payments and
only modest capex requirements.
Issuer Profile
Bakelite is a global integrated producer of phenolic specialty
resins and engineered thermoset molding compounds used in building
materials, automotive products, industrial applications and
specialty chemical intermediates, with sales across multiple end
markets in Europe and North America.
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
Bakelite US Holdco, Inc. has an ESG Relevance Score of '4' for
Exposure to Social Impacts due to exposure to hazardous substances
phenol and formaldehyde, which has a negative impact on the credit
profile, and is relevant to the ratings 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
----------- ------ -------- -----
Bakelite US
Holdco, Inc. LT IDR BB- Downgrade BB
senior secured LT BB+ New Rating RR2
senior secured LT BB+ Affirmed RR2 BB+
BELLTOWN FARMS: Seeks Chapter 11 Bankruptcy in Nebraska
-------------------------------------------------------
On December 2, 2024, Belltown Farms GF Opco LLC filed Chapter 11
protection in the District of Nebraska. According to court
documents, the Debtor reports between $10 million and $50 million
in debt owed to 1 and 49 creditors. The petition states funds will
be available to unsecured creditors.
About Belltown Farms GF Opco LLC
Belltown Farms GF Opco LLC is engaged in the business of oilseed
and grain farming.
Belltown Farms GF Opco LLC sought relief under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. D. Neb. Case No. 24-41171) on December
2, 2024. In the petition filed by Peter Tom Hill-Norton, as
authorized signatory, the Debtor reports estimated assets and
liabilities between $10 million and $50 million each.
The Debtor is represented by:
Patrick R. Turner, Esq.
TURNER LEGAL GROUP, LLC
14707 California Street, #1
Omaha, NE 68154
Tel: 402-690-3675
Email: pturner@turnerlegalomaha.com
BELT ENTERTAINMENT: U.S. Trustee Unable to Appoint Committee
------------------------------------------------------------
The U.S. Trustee for Region 13 disclosed in a court filing that no
official committee of unsecured creditors has been appointed in the
Chapter 11 case of Belt Entertainment, LLC.
About Belt Entertainment
Belt Entertainment, LLC sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. W.D. Mo. Case No. 24-50306) on October
24, 2024, with up to $10 million in both assets and liabilities.
Michael White, managing member, signed the petition.
Judge Cynthia A. Norton oversees the case.
Erlene W. Krigel, Esq., at Krigel, Nugent + Moore, P.C., represents
the Debtor as legal counsel.
BIOSIG TECHNOLOGIES: Wins Dismissal of M. Fleming Suit
------------------------------------------------------
BioSig Technologies, Inc., disclosed in a Form 8-K filed with the
U.S. Securities and Exchange Commission that a Minnesota state
court has dismissed litigation against the Company and its former
officers.
On March 22, 2024, Michael Gray Fleming filed a lawsuit in Hennepin
County, Minnesota District Court naming the Company, its former
Chief Executive Officer and former Chief Financial Officer as
defendants.
The Plaintiff contended that the Company failed to meet its
obligations in issuing the Plaintiff stock under the terms of a
restricted stock award agreement. Plaintiff was seeking at least
$288,000 in damages. The Company believed Plaintiff's allegations
were baseless and had moved to dismiss Plaintiff's claims during a
hearing in September 2024.
On December 3, 2024, the Court filed an Order Granting Motion to
Dismiss.
About BioSig Technologies
Westport, Conn.-based BioSig Technologies, Inc. was initially
incorporated on February 24, 2009, under the laws of the State of
Nevada and subsequently re-incorporated in the state of Delaware in
2011. The Company is principally devoted to improving the standard
of care in electrophysiology with its PURE EP System's enhanced
signal acquisition, digital signal processing, and analysis during
ablation of cardiac arrhythmias.
As of June 30, 2024, BioSig had $3.1 million in total assets, $3
million in total liabilities, $105,000 in Series C 9% convertible
preferred stock, and $11,000 in total equity.
Going Concern
As of June 30, 2024, the Company had cash of $2.1 million and
working capital deficit of $0.6 million. During the six months
ended June 30, 2024, the Company used net cash in operating
activities of $2.8 million. These balances create a liquidity
concern, which in turn raises substantial doubt about the Company's
ability to continue as a going concern. The Company has experienced
losses and negative cash flows from operations since inception and
expects these conditions to continue for the foreseeable future.
BISHOP OF SAN DIEGO: Feb. 3, 2025 Claims Filing Deadline Set
------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of California
set Feb. 3, 2025, as the deadline for individuals who were sexually
abused by any person connected with The Roman Catholic Bishop of
San Diego to file claim, or otherwise will be forever barred,
estopped, and enjoined from asserting such claim against the
Debtor.
Individuals who have already filed a lawsuit against the Debtor
alleging abuse must file a claim to maintain and/or preserve its
rights.
Claims based on acts or omissions of the Debtor that occurred
before June 17, 2024, must be filed on or before Feb. 3, 2025, even
if such claims are not now fixed, liquidated, or certain or did not
mature or become fixed, liquidated, or certain before June 17,
2024.
For more information on how to obtain and file a proof of claim
form and associated documents, visit
https://www.donlinrecano.com/rcbsd, or contact Donlin Recano, the
Debtor's claims agent, via email at rcbsdinfo@drc.equiniti.com or
by phone at 1-866-521-4424, between the hours of 9:00 a.m. ad 5:00
p.m. (Prevailing Eastern Time), Monday through Friday.
About The Roman Catholic Bishop of San Diego
The Roman Catholic Bishop of San Diego sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. D.P.R. Case No.
24-02202) on June 17, 2024. In the petition signed by Rodrigo
Valdivia, vice moderator of the Curia, the Debtor disclosed up to
$500 million in both assets and liabilities.
Judge Christopher B. Latham oversees the case.
The Debtor tapped Gordon Rees Scully Mansukhani, LLP as counsel and
GlassRatner Advisory & Capital Group, LLC, doing business as B.
Riley Advisory Services, as financial advisor. Donlin, Recano &
Company, Inc., as administrative advisor.
BLUE LINE: Reports $79,277 Net Income in Fiscal Q3
--------------------------------------------------
Blue Line Protection Group, Inc. filed with the U.S. Securities and
Exchange Commission its Quarterly Report on Form 10-Q reporting a
net income of $79,277 on $1,023,208 of total revenues for the three
months ended September 30, 2024, compared to a net income of
$205,646 on $1,105,945 of total revenues for the three months ended
September 30, 2023.
For the nine months ended September 30, 2024, the Company reported
a net income of 104,455 on $3,308,986 of total revenues, compared
to a net income of $330,996 on $3,219,512 of total revenues for the
same period in 2023.
As of September 30, 2024, the Company had $1,898,550 in total
assets, $3,107,845 in total liabilities, and $1,209,295 in total
stockholders' deficit.
A full-text copy of the Company's Form 10-Q is available at:
https://tinyurl.com/yc4s7s6d
About Blue Line
Blue Line Protection Group, Inc., headquartered in Denver,
Colorado, specializes in armed protection and transportation,
currency processing, and training and compliance services tailored
for the legal cannabis industry. For the year ended December 31,
2023, the company's revenue breakdown was approximately 45% from
transportation services, 54% from currency processing, and 1% from
training and compliance services.
M&K CPAS, PLLC, based in The Woodlands, Texas, and the company's
auditor since 2020, issued a "going concern" qualification on April
1, 2024. The report highlighted Blue Line Protection's accumulated
deficit and working capital deficiency as of December 31, 2023,
raising substantial doubt about the company's ability to continue
operations.
CALERA CORP: Claims to be Paid From Financing and Income
--------------------------------------------------------
Calera Corporation d/b/a Chemetry filed with the U.S. Bankruptcy
Court for the Northern District of California a First Amended Plan
of Reorganization for Small Business dated November 7, 2024.
The Debtor, which was incorporated in Delaware in 2007, was formed
for the purpose of developing environmentally friendly
technologies.
At present, the Debtor is in the business of developing and
licensing its portfolio of approximately 87 patents and 11 related
trademarks (collectively the "IP"), which IP primarily relates to
the application of energy efficient electrolysis and
electrochemistry in fields such as manufacturing of chemicals and
petrochemicals, production of hydrogen and in processes to capture
carbon dioxide.
The Debtor's assets consist primarily of the IP and the value of
the IP will ultimately depend upon the Debtor's success in the
continued development and licensing of the IP over time.
The Debtor filed its bankruptcy case in an effort to (1) facilitate
additional financing, (2) further its efforts to develop and
license the IP, and (3) pursue expedited confirmation of this Plan
pursuant to which (a) FSI will convert 100% of the amount owed
under the DIP Financing and a portion of the Prepetition Loan for a
total conversion amount of $2.5 million into, and in exchange for,
100% of the new equity (the "New Equity") issued under this Plan,
(b) the Debtor will make payments on the balance of the Prepetition
Loan from cash on hand on the effective date of the Plan and post
effective date income generated from the IP or otherwise, (c) any
allowed administrative, priority, and general unsecured claims will
be paid in full, with interest at the applicable rate, and (d) all
old equity will be cancelled.
Since, in exchange for its treatment under the Plan, FSI will be
(1) converting 100% of the amount owed under the DIP Financing and
a portion of the Prepetition Loan for a total conversion amount of
$2.5 million into, and in exchange for, 100% of the New Equity
issued under this Plan and (2) paying all allowed administrative,
priority, and general unsecured claims in full (and there being no
expected allowed priority or general unsecured claims).
This Plan under chapter 11 of the Code proposes to pay creditors of
the Debtor from cash on hand on the effective date, funds from the
DIP Financing, and post-effective date income generated from the IP
or otherwise.
Non-priority unsecured creditors holding allowed claims will
receive distributions, which the proponent of this Plan has valued
at approximately $0, but only because, the Debtor does not believe
it has any allowable prepetition unsecured claims.
Class 3 consists of Non-priority unsecured creditors. As set forth
in the Debtor's Schedules, the Debtor is not aware of any general
unsecured claims. However, if there are any allowed general
unsecured claims, they will be paid, in full, with interest at the
applicable rate, on the later of (1) when due pursuant to contract
and/or invoice terms, (2) the effective date of the Plan, and (3)
such other later date when any filed claim is allowed by a final
non-appealable order, with such payments to be made from cash on
hand on the effective date, funds from the DIP Financing, and
post-effective date income generated from the IP or otherwise. This
Class is unimpaired.
Class 4 consists of Equity security holders of the Debtor. On the
effective date, any and all existing Old Equity Interests in the
Debtor and any other ownership interests in the Debtor shall be
deemed to be cancelled and of no further force or effect. The
Prepetition Equity Holders and any other actual or alleged owner of
any other ownership interests in the Debtor shall not receive a
distribution or anything else under the Plan on account of such
existing stock or other ownership interest.
In treatment of its combined claim arising under the DIP Financing
and the Prepetition Loan, (a) FSI will convert 100% of the amount
owed under the DIP Financing and a portion of the Prepetition Loan
for a total conversion amount of $2.5 million into, and in exchange
for, 100% of the New Equity issued under this Plan, and (b) the
Debtor will make payments on the balance of the Prepetition Loan
from cash on hand on the effective date of the Plan and
post-effective date income generated from the IP or otherwise,
provided that the payments to FSI set forth in Exhibit B will be
adjusted as necessary to (i) ensure that the Debtor can pay allowed
administrative claims and any allowed priority and general
unsecured claims as required by this Plan and (ii) maximize
payments on the balance of the Prepetition Loan after conversion of
a portion thereof to New Equity yet maintain sufficient operating
capital.
All allowed administrative, priority unsecured claims, and general
unsecured claims will be paid, in full, with interest at the
applicable rate, on the later of (a) when due pursuant to contract
and/or invoice terms, (b) the effective date of the Plan, and (c)
such other later date when any filed claim is allowed by a final
non-appealable order, with such payments to be made from cash on
hand on the effective date, funds from the DIP Financing, and
post-effective date income generated from the IP or otherwise.
A full-text copy of the First Amended Plan dated November 7, 2024
is available at https://urlcurt.com/u?l=ESGtGv from
PacerMonitor.com at no charge.
About Calera Corporation
Calera Corporation, doing business as Chemetry, develops a
cementitious material that provides significant economic saving and
reduces carbon dioxide emissions.
Calera Corporation sought relief under Subchapter V of Chapter 11
of the U.S. Bankruptcy Code (Bankr. N.D. Calif. Case No. 24-51527)
on Oct. 9, 2024, with $500,001 to $1 million in assets and $1
million to $10 million in liabilities.
Judge Stephen L. Johnson handles the case.
The Debtor is represented by Ron Bender, Esq., at Levene, Neale,
Bender, Yoo & Golubchik L.L.P.
CAPSTONE COMPANIES: Appoints Alexander Jacobs as CEO
----------------------------------------------------
Capstone Companies, Inc., disclosed in a Form 8-K filing with the
U.S. Securities and Exchange Commission that Alexander Jacobs has
been appointed as the Chief Executive Officer and as a director of
Capstone Companies, Inc. As CEO, Mr. Jacobs will focus on
developing a new business line and revenue generating operations
for the Company by internal development, mergers or acquisitions,
strategic or joint venture relations, or a combination of those
corporate actions. Mr. Jacobs's appointment as a director fills a
vacancy on the Company's Board of Directors.
With the appointment of Mr. Jacobs as CEO, Stewart Wallach
voluntarily resigned as CEO on December 4, 2024. There are no
disputes or disagreements between Mr. Wallach as CEO of the Company
and the Company.
Mr. Jacobs is the founder, senior operations executive and the
owner of Coppermine Ventures LLC -- CVen -- and affiliated
companies. Coppermine operates 20 facilities in Maryland that
provide year-round social, athletic, and fitness programming for
children, adults and families. Coppermine offers youth and adult
classes, clinics, camps, leagues, and tournaments, nationally
competitive club teams, before and after school programs, and other
recreational activities in a variety of sports, including
gymnastics, tennis, dance, karate, pickleball, football, swimming,
lacrosse, soccer and baseball. Coppermine's newest venture, Copper
Union, focuses on developing facilities offering pickleball and
padel courts with a club house offering food, drinks and
entertainment. Starting in 2011, Mr. Jacobs led Coppermine from
being a start-up venture to a growing, profitable business. He
graduated from Denison University where he was a two-time
All-American Defender in lacrosse.
Stewart Wallach, Chair of the Company's Board of Directors, will
have an expanded role as Chair in support of Mr. Jacobs as CEO of
the Company. Mr. Wallach will assist in business development,
provide oversight of corporate governance and regulatory
compliance, assist in efforts to raise long-term working capital
funding and handle investor relations. Mr. Jacobs will continue as
senior executive officer of Coppermine while serving as Company's
CEO. Mr. Wallach's expanded role as Chair is intended to permit Mr.
Jacobs to focus on establishing a new business line for the
Company. There is no assurance that the Company and any new
management members will in fact establish a new business line for
the Company or obtain the necessary funding for that endeavor. The
establishment of a new business line is critical to sustaining the
Company as a going concern.
Appointee's Interests
There are no family relationships between Mr. Jacobs and the
Company's existing directors and officers.
The compensation of Mr. Jacobs as CEO and a director has not been
determined as of the date of the filing Form 8-K, but directors of
the Company serve without cash compensation and the CEO position
currently provides for accrual of a base salary of One Dollar per
year. Mr. Jacobs has indicated that he is agreeable to that
compensation structure for the CEO and director position.
Mr. Jacobs has an indirect interest in the $125,924 loan made to
the Company by CVen under the October 31, 2024, Unsecured
Promissory Note, and accrued interest on that principal amount,
since he is the sole owner of CVen. Interest accrues at 7% simple
annual interest and the Unsecured Promissory Note matures on
September 30, 2025.
Under the previously reported Management Transition Agreement,
signed October 31, 2024, between CVen and the Company (the "MTA"),
CVen is committed to providing $344,554 to fund certain working
capital funding needs of the Company through March 31, 2025, as
detailed in the MTA. The funding under the MTA is not in exchange
for or consideration for the issuance of any Company's securities
and the MTA grants no equity interests in the Company to CVen or
its nominees. The MTA does grant CVen the right to nominate a
maximum of two (2) directors for appointment to fill vacancies on
the Company's Board of Directors and to appoint a nominee to be CEO
of the Company -- all appointments being subject to verification of
qualifications to serve by the Company's Board of Directors. The
deadline for submission of nominees under the MTA is December 31,
2024.
Under the MTA, CVen advanced $53,018 in working capital funding to
the Company, which is in addition to the $125,914 loaned to the
Company under an October 31, 2024, Unsecured Promissory Note in
October 2024.
About Capstone Companies Inc.
Deerfield Beach, Fla.-based Capstone Companies, Inc. is a public
holding company organized under the laws of the State of Florida.
The Company is a designer, manufacturer and marketer of consumer
products that are designed to simplify daily living through
technology.
Margate, Fla.-based Assurance Dimensions, the Company's auditor
since 2023, issued a "going concern" qualification in its report
dated March 29, 2024, citing that the Company has incurred
recurring operating losses, has incurred negative cash flows from
operations and has an accumulated deficit. These and other factors
raise substantial doubt about the Company's ability to continue as
a going concern.
As of June 30, 2024, the Company had $1.39 million in total assets,
$4.02 million in total liabilities, and a total stockholders'
deficit of $2.63 million.
CAREMAX INC: U.S. Trustee Appoints Creditors' Committee
-------------------------------------------------------
The U.S. Trustee for Region 6 appointed an official committee to
represent unsecured creditors in the Chapter 11 cases of CareMax
Inc. and its affiliates.
The committee members are:
1. Bari Cooper Sherman
Vice President
THFF REIT LLC
1702 Olympic Boulevard
Santa Monica, CA 90404
bsherman@turnerimpact.com
2. Jonathan Flam
Chief Financial Officer
Foresee Medical, Inc.
11622 El Camino Real
Suite 100
San Diego, CA 92130
jflam@foreseemed.com
3. Michael Bogachek
Pharmalife Consultng, LLC
2951 Piedmond Rd. NE, Suite B
Atlanta, GA 30305
mbogachek@pharmalife.com
4. Ildefonso Balart, Jr.
President
Connect C3
1291 B SW 132 St. Unit 4
Miami, FL 33186
fonsi@connectc3.com
5. Robert Pigott
General Counsel for Phipps Houses
Apex Place PH, LLC
c/o Phipps Houses Services, Inc.
902 Broadway, 13th Floor
New York, NY 10010
rpigott@phippsny.org
Official creditors' committees serve as fiduciaries to the general
population of creditors they represent. They may investigate the
debtor's business and financial affairs. Committees have the right
to employ legal counsel, accountants and financial advisors at a
debtor's expense.
About CareMax Inc.
CareMax Inc. is a provider of medical centers for elderly
patients.
CareMax and its affiliates sought relief under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. N.D. Texas Lead Case No. 24-80093) on
November 17, 2024. In its petition, CareMax reported estimated
liabilities between $500 million and $1 billion and estimated
assets between $100 million and $500 million.
Judge Michelle V. Larson oversees the cases.
The Debtors tapped Thomas Robert Califano, Esq., at Sidley Austin,
LLP as bankruptcy counsel; Alvarez & Marsal North America, LLC as
financial advisor; and Piper Sandler & Co. as investment banker.
Stretto, Inc. is the Debtors' claims, noticing and solicitation
agent.
CATHETER PRECISION: Intracoastal, 2 Others Hold 4.99% Stake
-----------------------------------------------------------
Intracoastal Capital LLC, Mitchell P. Kopin, and Daniel B. Asher
disclosed in Schedule 13G Report filed with the U.S. Securities and
Exchange Commission that they beneficially owned shares of Catheter
Precision, Inc.'s common stock.
As of the close of business on September 30, 2024, each of the
Reporting Persons may have been deemed to have beneficial ownership
of 181,336 shares of Common Stock, which consisted of:
(i) 194 shares of Common Stock issuable upon exercise of a
warrant held by Intracoastal,
(ii) 111 shares of Common Stock issuable upon exercise of a
second warrant held by Intracoastal and
(iii) 181,031 shares of Common Stock issuable upon exercise of a
third warrant held by Intracoastal, and all such shares of Common
Stock in the aggregate represent beneficial ownership of
approximately 4.99% of the Common Stock, based on:
(1) 3,452,652 shares of Common Stock outstanding as of
September 30, 2024, as reported to the Reporting Persons by the
Company plus
(2) 194 shares of Common Stock issuable upon exercise of
Intracoastal Warrant 1,
(3) 111 shares of Common Stock issuable upon exercise of
Intracoastal Warrant 2 and
(4) 181,031 shares of Common Stock issuable upon exercise of
Intracoastal Warrant 3.
The foregoing excludes:
(I) 318,969 shares of Common Stock issuable upon exercise of
Intracoastal Warrant 3 because Intracoastal Warrant 3 contains a
blocker provision under which the holder thereof does not have the
right to exercise Intracoastal Warrant 3 to the extent (but only to
the extent) that such exercise would result in beneficial ownership
by the holder thereof, together with the holder's affiliates, and
any other persons acting as a group together with the holder or any
of the holder's affiliates, of more than 4.99% of the Common
Stock,
(II) 500,000 shares of Common Stock issuable upon exercise of a
fourth warrant held by because Intracoastal Warrant 4 contains a
blocker provision under which the holder thereof does not have the
right to exercise Intracoastal Warrant 4 to the extent (but only to
the extent) that such exercise would result in beneficial ownership
by the holder thereof, together with the holder's affiliates, and
any other persons acting as a group together with the holder or any
of the holder's affiliates, of more than 4.99% of the Common Stock
(III) 500,000 shares of Common Stock issuable upon exercise of a
fifth warrant held by because Intracoastal Warrant 5 contains a
blocker provision under which the holder thereof does not have the
right to exercise Intracoastal Warrant 5 to the extent (but only to
the extent) that such exercise would result in beneficial ownership
by the holder thereof, together with the holder's affiliates, and
any other persons acting as a group together with the holder or any
of the holder's affiliates, of more than 4.99% of the Common
Stock,
(IV) 1,650 shares of Common Stock issuable upon exercise of a
sixth warrant held by because Intracoastal Warrant 6 contains a
blocker provision under which the holder thereof does not have the
right to exercise Intracoastal Warrant 6 to the extent (but only to
the extent) that such exercise would result in beneficial ownership
by the holder thereof, together with the holder's affiliates, and
any other persons acting as a group together with the holder or any
of the holder's affiliates, of more than 4.99% of the Common Stock
and
(V) 1,650 shares of Common Stock issuable upon exercise of a
seventh warrant held by because Intracoastal Warrant 7 contains a
blocker provision under which the holder thereof does not have the
right to exercise Intracoastal Warrant 7 to the extent (but only to
the extent) that such exercise would result in beneficial ownership
by the holder thereof, together with the holder's affiliates, and
any other persons acting as a group together with the holder or any
of the holder's affiliates, of more than 4.99% of the Common Stock.
Without such blocker provisions, each of the Reporting Persons may
have been deemed to have beneficial ownership of 1,503,605 shares
of Common Stock.
Intracoastal Capital LLC may be reached at:
Mitchell P. Kopin, Manager
245 Palm Trail
Delray Beach Fla. 33483
Tel: 847-562-9030
A full-text copy of Intracoastal Capital's SEC Report is available
at:
https://tinyurl.com/yck9292m
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.
CENTER FOR ALLERGIC: Updates Fairview Center Claim; Amends Plan
---------------------------------------------------------------
Center for Allergic Diseases, LLC submitted an Amended Plan of
Reorganization for Small Business dated November 8, 2024.
The Plan Proponent's financial projections show that the Debtor
will have projected disposable income of $3,731.00 when the
Altamont Place is rented starting January 1, 2025. The final Plan
payment is expected to be paid 60 months after the Effective Date.
Payments and distributions under the Plan will be funded by 12150
Annapolis Road, Bowie, MD (Fairwood), the rental income increased
in February 2024 from $3,553.50 to $3,660.00. The condominium dues
are $1,054.46 per month and the tenant pays the electric and any
other utilities. Therefore, after $25 paid toward insurance and
$594.56 monthly for estimated real estate taxes, the net proceeds
are: $1,986.00.
Effective January 2025, Debtor will also receive rental income from
tenant at 4255 Altamont Place, Unit 202. The rent plus condo dues
is $2,690.00. This amount less $665 for condo dues, $25 for
insurance and $255 for estimated real estate taxes, there is
disposable income in the amount of $1,745.00. Disposable income
from both properties is sufficient disposable income to pay the
creditors under the Plan.
The Altamont Place was not rented at the inception of the
bankruptcy filing. The electricity was not on. The electricity has
been on for a few months and Debtor has negotiated a new tenant for
Altamont. The rent as mentioned above will be received from new
tenant effective January 2025. The new tenant pays for the condo
dues and for the common area electric and individual electric. The
lease should be executed within the next 7 to 10 days.
This Plan of Reorganization proposes to pay creditors of the Debtor
from the rental income from 12150 Annapolis Road, Bowie and within
five months from the Effective Date, the soon to be rental income
from Altamont Place, now that the electricity is on in Altamont,
Debtor has negotiated a lease with a new tenant with the intent to
execute the lease within next 7 to 10 days. The income from
Annapolis Road is $3,660.00 and potential rental income for
Altamont Place is $2,690.00.
Class 1b consists of the Secured Claim Fairview Center Condominium
II, Inc. This Class shall receive a monthly payment of $897.92 for
60 months. This Class will receive a distribution of 100% of their
allowed claims. Allowed Secured claim in the amount of $53,875.75.
If it is determined by the Court that Fairview Center for
Condominium II, Inc., this claim shall be paid under Class 3 as a
general unsecured class.
Class 2 consists of general unsecured claims of MD Comptroller
($182.00); IRS ($15,929.46); and Trustee ($977.41) for a Total
Amount of $17,088.87. This Class shall receive a monthly payment of
284.41 for 60 months. This Class will receive a distribution of
100% of their allowed claims.
Class 3 consists of general unsecured claim of Fairview Center
Condominium II, Inc. $53,875.75 ($55,540.75 less the deposit paid
in the amount of $1,665.00). This Class shall receive a monthly
payment of $897.92 for 60 months. This Class will receive a
distribution of 100% of their allowed claims.
Payments and distributions under the Plan will be funded from 12150
Annapolis Road, Bowie, MD (Fairwood), the rental income increased
in February 2024 from$3,553.50 to $3,660.00. The condominium dues
are $1,054.46 per month and the tenant pays the electric and any
other utilities. Therefore, the net proceeds are $2,605.54.
A full-text copy of the Amended Plan dated November 8, 2024 is
available at https://urlcurt.com/u?l=Hz0NdD from PacerMonitor.com
at no charge.
About Center for Allergic Diseases
Center for Allergic Diseases, LLC, operated medical facilities in
each of the properties located at 12150 Annapolis Road, Bowie,
Maryland and 4255 Altamont Place, Unit 202, White Plains,
Maryland.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Md. Case No. 23-17168) on October 4,
2023.
Judge Maria Ellena Chavez-Ruark presides over the case.
Diana L. Klein, at Klein & Associates, LLC, is the Debtor's legal
counsel.
CFC-LSH LLC: Fitch Assigns 'BB-' Rating on 2024 A-1 & A-2 Bonds
---------------------------------------------------------------
Fitch Ratings has assigned a 'BB-' rating to CFC-LSH, LLC - Amplify
Lubbock series 2024A-1 Senior Multifamily Housing Revenue bonds for
$56.9 million (tax-exempt) and series 2024A-2 Senior Multifamily
Housing Revenue bonds for $0.9 million (taxable). The Rating
Outlook is Stable.
RATING RATIONALE
The rating reflects the small, single facility nature of the
project within the relatively small Lubbock (AA+/Stable general
obligation rating) MSA in north-western Texas. Once complete, the
project will benefit from its proximity to Texas Tech University
(TTU; AA+/Stable). However, the 510 beds will represent a
relatively little portion of overall supply. Additionally, there is
no direct relationship with the university. The newly built project
will benefit from a property tax abatement in exchange for a rent
restriction program covering at least 50% of the units.
Rates are deemed competitive on a per bed basis, especially for the
larger units, and assumed to increase in line with the market rate
escalation at 2.75%-3% annually. Capital needs should be limited
over the near to medium term. The project will benefit from a $1.25
million operating reserve funded at close and a cashflow-funded
repair/replacement fund initially set at $85/bed ($250/unit),
increasing 3% annually.
The rating reflects Fitch's view that completion risk is not a
constraint and that the project rating is, therefore, dictated by
the operating phase credit view. Fitch rating case DSCRs constrain
the rating to non-IG with average senior lifetime DSCR of 1.35x, a
prolonged period of DSCRs averaging 1.27x, and a minimum of 1.20x
once the tax-exempt bonds begin to materially amortize. All-in
DSCRs are lower averaging 1.22x with a minimum of 1.05x and a
prolonged period of 1.05x-1.1x.
KEY RATING DRIVERS
Completion Risk - 'High Stronger'
Not a Rating Constraint
Project completion is not considered challenging, and is within
budget, with a less than two-year horizon. Complexity, scale, and
duration is assessed 'High Stronger'. The contractor has a solid
track record of executing and delivering on similar projects, and
there is a deep market for replacement contractors. Fitch therefore
does not consider completion risk a constraint on the project's
rating. The rating is dictated by the credit view of the operating
phase.
Revenue Risk - Volume - 'Weaker'
Single, Off-campus site; No Affiliation
The project represents a single-site, off-campus facility in
Lubbock, Texas. It is strategically located near TTU; however,
there is no direct relationship with the university, or any volume
guarantees. The project's 510 beds across 174 units represents a
small portion of the overall market. Enrollment trends have been
largely positive since 2013 with 1.3%-1.4% annual growth forecast
for the next few years.
Comparable facilities have 89%-99% occupancy. Once open, the new
project should prove attractive given its amenities and the rent
restriction program. According to a market study, sufficient demand
should exist for the project despite conventional and student
housing units currently under construction and the potential for
future such projects.
Revenue Risk - Price - 'Midrange'
Market-based, Rent Restricted
The project will be owned by Texas Workforce Housing, a non-profit
organization, and will be subject to a rent restriction program.
This program will limit at least 50% of the units at the property
to households earning 80% of the Area Median Income (AMI) or less.
Because the restricted rents are calculated on a per-bed basis, the
rental rates for units with higher bedroom counts are often similar
to unrestricted market rates, especially for the 80% AMI rates.
Rents are deemed competitive by an industry expert and assumed to
increase 2.75%-3% per year, in line with assumed market trends.
Infrastructure Dev. & Renewal - 'Midrange'
New Facility; Moderate Reserves
Amplify Lubbock will be a newly built 174-unit, 510-bed
purpose-built student housing property, scheduled to open for the
Fall 2026 semester. Due to its new construction, the building will
have minimal near-to-medium term capital needs. A $1.25 million
operating reserve will be established at financial close, alongside
a renewal and replacement fund of approximately $85/bed
($250/unit), with annual deposits increasing by 3%.
A condition assessment every five years will determine the repair
and replacement fund requirements. However, the replacement reserve
remains low compared to similarly rated projects. Surplus
cashflows, particularly after the repayment of subordinate debt and
deferred development fees, are expected to support ongoing
maintenance needs as necessary.
Debt Structure - 'Stronger'
Senior Debt, Sufficient Security
The security and structural features are largely consistent with
other Fitch-rated student housing transactions. The project senior
debt is structured to provide robust security and a clear repayment
hierarchy. The 2024 series A bonds are fixed-rate and fully
amortizing, benefiting from a dedicated debt service reserve fund
sized to maximum annual debt service. The payment priority is well
defined, with senior debt obligations met before any subordinate
debt payments.
Notably, defaults on subordinate debt do not impact the senior
debt. The senior bonds are secured by a first lien on pledged
revenues and assets, enhancing their security. The structure
includes comprehensive covenants, although the rate covenant is
relatively low at 1.2x, and the additional bonds requirement, while
lower than peers, is mitigated by the need for a rating affirmation
by all rating agencies.
Financial Profile
Fitch's rating case assumes 91% occupancy over the first 10 years
and 90% until maturity with an annual increase of 3% for bed rate
and 3.5% for operating expenses. These assumptions result in
average lifetime Fitch-calculated senior DSCR at a low 1.3x,
constraining the rating to non-investment grade. Leverage is
initially elevated at almost 16x and only declines slightly to
below 15x by 2030 given the interest only structure on the series
2024A until 2033.
PEER GROUP
Fitch's most comparable student housing rating is for SFP Tampa
(BB+/Stable). Both projects are newly built single site, off campus
buildings, which represent a small percentage of available housing
stock. They further share similar debt structures and structural
features. SFP's higher rating reflects the strength of the Tampa
market relative to Lubbock's, the existence of marketing and
affiliation agreements with two local universities, greater
flexibility with respect to pricing, larger per bed capital set
aside and superior financial metrics with average lifetime Fitch
calculated senior DSCR of 1.6x compared to 1.3x for Amplify
Lubbock.
Fitch rates several other comparable public and private student
housing projects with IG ratings given a combination of existing
operations, superior franchise strength being on-campus, more
diversified across several assets/universities, and/or representing
a greater proportion of housing stock, and more robust financial
profiles and capital reserves. These transactions typically have
much stronger lifetime DSCR profiles with minimums of around 1.4x
or greater.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Decreases in occupancy and or/increases in costs that result in a
sustained DSCR below 1.15x in Fitch's rating case;
- A loss or reduction in the property's tax exemption that
negatively impacts the project's finances could put downward
pressure on the rating.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Successful project completion on time and budget;
- Increases in occupancy and or/decreases in costs that result in a
sustained DSCR above 1.3x in Fitch's rating case.
TRANSACTION SUMMARY
The Public Finance Authority is issuing approximately $56.9 million
in Series 2024A-1 tax-exempt multifamily housing revenue bonds, and
$880,000 in 2024A-2 taxable bonds and around Series 2024B $6.2
million in tax-exempt subordinate bonds, which will not be rated.
The authority will lend the proceeds from these 2024 bonds to
CFC-LSH, LLC, an Arizona-based company. This loan, formalized in a
loan agreement dated November 1, 2024, will finance the
construction costs of the Amplify Lubbock Project. This includes
site development, demolition of existing structures, development of
common areas, and the acquisition of a ground lease for the
project. The funding will also cover related real estate, fixtures,
equipment, furnishings, and facilities, as well as reserves,
working capital, interest, issuance costs, and other financing
expenses.
The Amplify Lubbock Project will be owned and operated by CFC-LSH,
LLC, which is solely owned by Community Finance Corporation, an
Arizona non-profit organization exempt under Section 501(c)(3) of
the Internal Revenue Code.
SECURITY
The bonds are secured by a leasehold mortgage and debt service
reserve fund. The pledge of revenues includes first-priority
security interest to the trustee, in the pledged revenues for any
period, (i) the sum of (a) the gross receipts and operating and
non-operating revenues derived by the borrower from the ownership
or operation of the facilities (other than contributions), and (b)
net proceeds of insurance, and (c) unrestricted contributions, and
(d) investment earnings on amounts on deposit in the debt service
reserve fund and the borrower's cash held by the trustee.
Date of Relevant Committee
02-Dec-2024
ESG Considerations
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating
----------- ------
CFC-LSH, LLC
CFC-LSH,
LLC/Housing
Revenues - First
Lien/1 LT LT BB- New Rating
COMMUNITY HEALTH: Fitch Affirms 'CCC+' Issuer Default Rating
------------------------------------------------------------
Fitch Ratings has affirmed the 'CCC+' Issuer Default Ratings (IDRs)
for Community Health Systems, Inc. (CYH) and its subsidiary
CHS/Community Health Systems, Inc. (CHS).
The affirmation reflects recent results in line with Fitch's
expectations, including EBITDA leverage above 8.0x and negative
FCF. Fitch expects mid-single-digit EBITDA growth in 2024
(excluding dispositions), which is positive for CHS but less robust
than growth at its peers.
Despite recent positive operating trends, CHS may not be growing
into its capital structure quickly enough before its junior debt
matures, sustaining risk of distressed debt exchanges or debt
refinancings at higher rates that could strain FCF. While Fitch
expects Medicaid reimbursement increases, further divestitures, and
organic EBITDA growth to reduce EBITDA leverage below the 8.0x
positive rating sensitivity by 2025-2026, evidence of sustained
deleveraging and a transition to consistently positive FCF is also
needed to support positive rating action.
Key Rating Drivers
Leverage High But Improving: Fitch expects CHS's EBITDA leverage to
decrease to 7.0x-7.5x in 2025-2026, which would be below the 8.0x
positive rating sensitivity. Deleveraging progress during this
period will be a key factor in how CHS can address its $2.5 billion
of first-lien notes due in 2027, $0.6 billion of senior unsecured
notes due in 2028 and $2.5 billion of second-lien notes due in
2029-2030. For context, and consistent with its 'CCC+' IDR, CHS has
maintained EBITDA leverage over 8.5x with negative FCF for the past
two years, despite materially improved industry conditions.
Fitch expects deleveraging to be driven by rising reimbursement
rates (Medicare, managed care and Medicaid) and rising volumes
supporting top-line growth and moderate margin expansion. Elevated
leverage still poses the risk of distressed debt exchanges or
refinancings at higher rates that pressure FCF, especially if
capital market conditions deteriorate. Fitch's leverage projections
for 2026 could be adversely affected if Congress fails to extend,
or significantly reduces, the enhanced subsidies for buyers of
Affordable Care Act exchange health plans, which are otherwise
scheduled to expire at YE 2025.
FCF Below Expectations: Fitch expects CHS to return to positive FCF
in 2025-2026 but only modestly at 0%-1% of revenue. Despite capex
at only 3% of revenue, Fitch expects CFO-Capex at only 0%-1% of
debt in 2025-2026, consistent with the 'CCC+' IDR. That said, Fitch
expects divestitures to augment the extent to which FCF alone could
drive debt reduction, likely improving its ability to maintain
access to debt capital markets. The sustainability of positive FCF
with growth, rather than moderate deleveraging alone, will be a key
factor in CHS potentially generating positive rating momentum.
For context, its cash flow projections above compare with CHS
likely generating negative FCF for 2024, despite labor costs
moderating and volumes rising significantly. By comparison, CHS's
closest peers have recently been generating appreciable FCF,
despite capex levels running well above lower levels at CHS, which
may have implications for CHS growing into its highly leveraged
capital structure.
Profitability in Flux: Fitch expects EBITDA margins to improve to
about 13.0% in 2025-2026, up from labor-inflation lows of 10.4% in
2022 and from about 12.0% expected in 2024. Its forecast assumes
upside to pricing (including increases in Medicaid reimbursement)
will be partially offset by labor cost inflation and by elevated
other operating costs amid rising medical specialist expense. While
likely EBITDA margin improvement in 2024 is positive, it is well
below peers amid rebounding volumes and normalizing temporary
staffing costs. If CHS exceeds its margin estimates, further
deleveraging is likely.
Derivation Summary
CHS's 'CCC+' IDR reflects leverage easily exceeding that of its
closest peers: Tenet Healthcare (THC; B+/Positive); Universal
Health Services (UHS; BB+/Stable); and HCA Healthcare (HCA). With
EBITDA leverage likely over 8.5x at YE 2024 and 7.0-7.5x in
2025-2026, CHS debt entails higher risk of distressed debt
exchanges, with the refinancing of debt due in 2027 potentially
requiring access to favorable capital markets and lower interest
rates.
CHS has a weaker operating profile than its closest peers, with
assets located in smaller urban, suburban or non-urban markets with
growth prospects Fitch believes are less robust. Its margins should
improve further in the near term with continuing volume growth and
reimbursement increasing above cost inflation. Fitch sees CHS
focusing on optimizing operating costs and reducing debt via
divestitures.
The 'CCC+' IDR also reflects financial flexibility that is more
constrained than that of its higher-rated peers. This includes
lower interest coverage, reflecting the burden of its
highly-leveraged capital structure, and shortfalls in generating
FCF, especially relative to the considerable FCF generated by its
closest peers, despite volumes rising and labor costs moderating in
2023-2024.
The IDRs of borrower CHS and parent CYH are identical due to their
strong legal and operational ties. Under its Parent and Rating
Subsidiary Linkage Criteria, Fitch applies the weak parent/strong
subsidiary approach, as the only asset of CYH is its 100% ownership
of CHS, which indirectly owns all operating subsidiaries. Fitch
believes legal ring-fencing, access and control are open and thus
assesses these entities on a consolidated basis.
Key Assumptions
Fitch's Key Assumptions Within Its Rating Case for the Issuer
Include
- Revenue growth of 5% in 2025, excluding divestitures, then 4%
thereafter, driven by an even split of volume growth and
mix-adjusted pricing upside;
- EBITDA margin (before NCI distributions) improving to 13.0% in
2025, and then essentially flat thereafter, reflecting the upside
of potential Medicaid supplemental payment program approvals and
strong organic growth in 2025, and thereafter the benefit of modest
top-line growth and cost optimization efforts, offset by labor cost
inflation and ongoing increases in medical specialist expense;
- Negative FCF in 2024 turning modestly positive in the range of
0%-1% of revenue thereafter, with capex at $375 million in 2024,
then at $400 million or about 3% of revenue over the rest of the
forecast;
- EBITDA leverage (after NCI distributions) of 8.7x at YE 2024,
declining to 7.4x by YE 2025, 7.1x by YE 2026 and 6.9x by YE 2027;
- Debt repayment of about $650 million in 2025 (a majority to repay
revolver borrowings) using proceeds of divestitures, with only
immaterial debt repayment thereafter; and
- SOFR declining to 4.5% in 2025, 4.00% in 2026 and 3.75%
thereafter. Refinancing of 2027 first lien senior secured debt in
2026 with a coupon of 10.00%.
Recovery Analysis
Fitch estimates an enterprise value (EV) for CHS on a
post-reorganization going-concern (GC) basis of $8.2 billion, which
is based on the product of GC EBITDA (deducts distributions to NCI)
of $1.3 billion and a 7.0x EV/EBITDA multiple, less 10% for
administrative claims. The multiple reflects a history of
acquisition multiples for large hospital operators with business
profiles similar to CHS of 7.0x-10.0x since 2006 and the average
public trading multiple (EV/EBITDA) of its peer group (HCA, UHS and
THC), which has ranged from 6.5x to 9.5x since 2011.
The $1.3 billion GC EBITDA assumption reflects a reduction from
Fitch's previous $1.4 billion GC EBITDA assumption to reflect
divestitures of a significant number of EBITDA-positive hospitals
since the latter figure was first established (about 10% of CHS
hospitals in the past year). GC EBITDA of $1.3 billion is also in
line with Fitch's 2024 EBITDA estimate of $1.3 billion (again, net
of NCI distributions) and further below Fitch's 2025 and 2026
estimates in the area of $1.5 billion.
Fitch's GC EBITDA estimate further reflects its view that current
EBITDA levels, were they to persist, could portend a restructuring.
No further reduction to GC EBITDA or debt claims was assumed
despite Fitch's expectation that at least one pending divestiture
may be completed in the near term with proceeds used to reduce
debt, as sensitivity testing revealed that notching would remain
unchanged.
Fitch's GC EBITDA estimate also reflects attributes of the acute
care hospital sector, including the high share of revenue generated
by government payors (30%-40%) posing risk of adverse regulatory
changes, the legal obligation to treat uninsured patients creating
a potentially material unfunded mandate, and the highly-regulated
nature of the acute care hospital industry generally.
Fitch's recovery analysis assumes that $780 million would be drawn
on the $1.0 billion ABL revolver prior to a restructuring scenario.
The $780 million figure references last reported availability of
$438 million, net of current borrowings of $372 million and
outstanding LCs of $66 million as of Sept. 30, 2024, implying that
about $125 million of the $1.0 billion revolver is unavailable.
Fitch further assumes that the last $95 million of revolver
availability is likely to be inaccessible in the period preceding a
restructuring due to CHS's likely inability then to comply with a
related fixed charge covenant.
Fitch thus allocates the distributable EV of $8.2 billion first to
the $780 million ABL revolver claim, which recovers on its claim in
full, with the remaining distributable EV of $7.4 billion providing
a $7.3 billion recovery to the first lien bonds ($7.9 billion as of
Sept. 30, 2024) and a $0.1 billion recovery to the second lien
bonds ($2.5 billion as of Sept. 30, 2024), the latter purely on
account of a 1% concession payment to which Fitch assumes first
lien bondholders would likely consent to promote expediency.
These recovery assumptions cumulatively result in recovery rates
for the company's super-priority ABL revolver and first lien senior
secured notes within the 'RR1' range of 91%-100%, which generates a
three-notch uplift from the IDR to their debt instrument ratings of
'B+'/'RR1'.
The company's second lien senior secured notes, per Fitch's
assumptions, recover in the 'RR6' range of 0%-10%, and are thus
notched down two levels to 'CCC-'/'RR6'. The senior unsecured
notes, which also recover in the 'RR6' range of 0%-10%, however,
are notched down three levels to 'CC'/'RR6, to further reflect
their structural subordination relative to the higher-ranking
second lien senior secured notes.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- An expectation for a near-term distressed debt exchange (as
defined by Fitch) or that a default, bankruptcy or restructuring is
increasingly likely as CHS's nearest-term debt maturity
approaches;
- Accelerating negative CFO-capex/debt.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- An expectation for Fitch-defined EBITDA leverage sustained at
8.0x or below;
- CFO-capex/debt turning positive, sustained at levels above 1.5%.
Liquidity and Debt Structure
Liquidity as of Sept. 30, 2024 was nearly $0.5 billion, including
$33 million in cash and $438 million of availability (reflects $372
million drawn and $66 million in outstanding LCs) under CHS's $1.0
billion asset-based revolver due June 2029 (favorably extended from
November 2026). Liquidity should benefit from a pending sale of two
Shorepoint hospitals in Florida for $265 million and $80 million of
potential deferred consideration from the sale of its Tennova
Cleveland hospital in Tennessee. On the other hand, Fitch expects
the last $95 million of revolver availability is unlikely to be
accessible in a period preceding a restructuring due to CHS's
likely inability then to comply with a related fixed charge
covenant.
Fitch views this level of liquidity as satisfactory to withstand
foreseeable stresses through 2026, but addressing $2.5 billion of
first-lien senior secured notes due in 2027, its next maturity, may
depend on favorable capital markets conditions for a refinancing.
The ABL revolver has no financial maintenance covenants save for a
fixed charge coverage test if availability under the revolver falls
below $95 million.
Issuer Profile
CHS is one of the largest for-profit operators of U.S. acute care
hospitals by revenue, with over 1,000 sites of care in 39 distinct
markets in 15 states, including 70 affiliated hospitals with over
11,000 beds.
in the Applicable Criteria.
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
Community Health Systems, Inc. has an ESG Relevance Score of '4'
for Exposure to Social Impacts due to societal and regulatory
pressures to constrain growth in healthcare spending in the U.S.,
which has a negative impact on the credit profile and is relevant
to the ratings 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
----------- ------ -------- -----
CHS/Community Health
Systems, Inc. LT IDR CCC+ Affirmed CCC+
senior unsecured LT CC Affirmed RR6 CC
senior secured LT B+ Affirmed RR1 B+
super senior LT B+ Affirmed RR1 B+
Senior Secured
2nd Lien LT CCC- Affirmed RR6 CCC-
Community Health
Systems, Inc. LT IDR CCC+ Affirmed CCC+
COVERED BRIDGE: Case Summary & 18 Unsecured Creditors
-----------------------------------------------------
Two affiliates that concurrently filed voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code:
Debtor Case No.
------ --------
Covered Bridge Newtown, LLC (Lead Case) 24-50833
2 Old New Milford Rd, Suite 3C
Brookfield, CT 06804
Covered Bridge Newtown I, LLC 24-50834
2 Old New Milford Rd, Suite 3C
Brookfield, CT 06804
Business Description: Debtor CBN I operates a Class A luxury
rental complex located at 9 Covered Bridge
Road, Unit 1 and Unit 3, Newtown,
Connecticut, with over 150 rented units.
The Rental Complex has a 24-hour fitness
center, heated swimming pool, sun deck, and
clubhouse.
CBN is the entity responsible for
construction of the buildings at the Rental
Complex. The first buildings were completed
in 2018. After construction on a parcel is
completed, CBN deeds the buildings to CBN I
by way of quit claim deed, after which CBN I
is the landlord to its tenants. CBN I has a
full-time, on-site property manager
attending to the needs of tenants and
managing the Rental Complex.
Chapter 11 Petition Date: December 8, 2024
Court: United States Bankruptcy Court
District of Connecticut
Judge: Hon. Julie A Manning
Debtors'
General
Bankrupty
Counsel: Jeffrey M. Sklarz, Esq.
Joanna M. Kornafel, Esq.
Michelle A. Antao, Esq.
GREEN & SKLARZ, LLC
One Audubon St., 3rd Floor
New Haven, CT 06511
Tel: (203) 285 -8545
Fax: (203) 823-4546
Email: jsklarz@gs-lawfirm.com
jkornafel@gs-lawfirm.com
mantao@gs-lawfirm.com
Each Debtor's
Estimated Assets: $50 million to $100 million
Each Debtor's
Estimated Liabilities: $50 million to $100 million
The petitions were signed by Anthony O. Lucera as member.
Full-text copies of the petitions are available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/EQQL56I/Covered_Bridge_Newtown_LLC__ctbke-24-50833__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/KH32G6I/Covered_Bridge_Newtown_I_LLC__ctbke-24-50834__0001.0.pdf?mcid=tGE4TAMA
List of Covered Bridge Newtown, LLC's 18 Unsecured Creditors:
Entity Nature of Claim Claim Amount
1. Shock Electrical Contractors $423,243
Attn: Michael Machado, President
178 Osborne St
Danbury, CT 06811
2. J&J Concrete Foundations Inc $345,031
Attn: Rui Ribeiro
15B Stony Hill Rd
Bethel, CT 06801
3. Carl Profita & Sons LLC $301,650
Attn: Carl Profita, Member
2 Debra Lane
New Milford, CT 06776
4. All American HVAC $225,403
Attn: Lori Valimont
PO Box 6397
Wolcott, CT 06716
5. Energy Spray Systems LLC $135,868
Attn: Florjan Shehaj
287 Greenwich Ave
Stamford, CT 06902
6. BFZ Electric LLC $128,000
Attn: Brian Zadrozny
9 Newcastle Pl
Unionville, CT 06085
7. HTH Automatic Sprinkler LLC $125,830
Attn: Scott Tillmann, Member
PO Box 82
Goshen, CT 06756
8. Alarm King $106,064
PO Box 2027
Attn: Edward Essa, President
Danbury, CT 06813
9. Carpets Unlimited Inc. $65,019
44 Garden St., Suite #7
Attn: Jill Eberhardt
Danvers, MA 01923
10. Doctor Drywall LLC $62,648
125 Commerce Drive
Attn: Marcos Cruz, Member
Brookfield, CT 06804
11. G&R Fabrication LLC $54,590
128 Federal Rd
Attn President,
Eugene Dollinger
Danbury, CT 06811
12. Whole Life Construction LLC $52,000
Attn: Bruno Forte
344 Amity Road
Woodbridge, CT 06525
13. A Campos Painting $46,350
Attn: Angel Campos
2045 Old Town Road
Bridgeport, CT 06606
14. Labanda Gutters, LLC $27,250
Attn: Jorge Labanda Erreys
11 Cross Rd
Brookfield, CT 06804
15. United Overhead Door Corp $16,156
Attn: Lou Mezzetta
21 Saw Mill River Rd
Yonkers, NY 10701
16. JVI Maintenance LLC $6,646
Attn: Iandra Lopes
5 Obtuse Rd South
Brookfield, CT 06804
17. Town of Newtown $1,288
Newtown Tax Collector
36 Primrose St
Newtown, CT 06470
18. Anthony Lucera Loan From $1
2 Old New Milford Equity Holder
Road, Ste. 3C
Brookfield, CT 0680
CVR ENERGY: Fitch Lowers IDR to 'B+', Outlook Stable
----------------------------------------------------
Fitch Ratings has downgraded CVR Energy, Inc.'s (CVI) Issuer
Default Rating (IDR) to 'B+' from 'BB-' and has affirmed the senior
unsecured notes at 'BB-' with a Recovery Rating of 'RR3'. Fitch has
also assigned an IDR rating of 'B+' to CVR Refining, LP and a
'BB+'/'RR1' rating to the proposed Term Loan B. The Rating Outlook
is Stable.
The downgrade reflects the deterioration from all-time high crack
spreads in the refining sector, the increased leverage and the
company's liquidity-enhancing measures, including the proposed
issuance of a three-year $300 million Term Loan B for capex,
including the 2025 Coffeyville turnaround, and to ensure it
maintains adequate liquidity.
Overall, CVI ratings reflect the company's relatively limited
scale, weakening liquidity, exposure to volatile crack spreads and
oil differentials, and historical high, but variable shareholder
distributions.
These negative factors are offset by its medium-sized operations;
advantaged geographical locations, leading to improved pricing;
average complexity rating of 10.8; and relatively low operating
costs. In addition, the Nitrogen Fertilizer segment is non-recourse
but can be a source of cash at times through its approximately 37%
ownership of CVR Partners' common units which entitle it to any
corresponding distributions.
Key Rating Drivers
Increased Debt Quantum and Leverage: CVI's proposed $300 million
Term Loan B increases the company's gross debt quantum while
providing additional liquidity in the near term. The proceeds of
the term loan are being used primarily to finance capex, including
the 2025 Coffeyville turnaround. The investment is expected to
improve reliability and operational performance. In addition, CVI
has an aggressive dividend policy, paying $453 million in 2023 and
$151 million of quarterly dividends YTD 2024 before suspending
dividends to maximize liquidity and support turnaround operations
in 3Q24.
Fitch believes these liquidity enhancements improve CVI's credit
quality in the short-term given higher-than-normal capex related to
the Coffeyville turnaround in 2025 and a weak refining environment.
Fitch expects CVI's petroleum segment EBITDA leverage to remain
outside its negative sensitivities in the short term as EBITDA
generation declines as refinery economics normalize to pre-pandemic
levels and the larger turnaround impacts throughput.
Size and Regional Concentration: CVI's ratings reflect the business
risk associated with its medium-sized operations, albeit with
strong asset quality and advantageous geographic locations
resulting in access to price-advantaged crude oil sourcing in the
Midcontinent. Operationally, it has the flexibility to take
advantage of light, heavy and sour crude. Its combined crude oil
processing capacity is 206,500 barrels per day (bpd), with an
average complexity of 10.8, and its plants are located in Group 3
of Petroleum Administration for Defense District (PADD) II.
The company's two refineries are strategically located near
Cushing, OK, with access to over 250,000bpd of production across
the Midwest. However, CVI is an inland refiner with limited export
options.
Weaker Refining Fundamentals: Crack spreads declined further in
2024, reflecting weaker global demand, particularly from China, and
the impact of U.S. and global refining capacity additions
offsetting post-COVID refinery closures. Lower geopolitical risk
premiums were also a factor as the Ukraine conflict approaches its
third year. YTD benchmark PADD II Group 3-2-1-1 crack spreads as of
end-September averaged $19.25/barrel (bbl), down from $35.1/bbl a
year-ago and $38/bbl during FY22.
Challenging Regulatory Environment: CVI has reduced its renewable
identification number (RIN) exposure through increased biofuel
blending and renewable diesel (RD) production following the
completion of its Wynnewood refinery RD project. RD remains
oversupplied given earlier expansions. D4 RIN prices have declined
to $0.56/gallon earlier this year from $1.50-$1.70/gallon
historically, while LCFS carbon credits declined around 75%
relative to 2020. There has been modest capacity rationalization in
response, but Fitch doesn't expect significant relief until the
mandate is expanded, given the stickiness of renewables investments
in many refiners' portfolio given the ESG linkage.
Small Refinery Exemption: In previous years, CVI's Wynnewood
refinery received a small refinery exemption that also reduced RIN
exposure. The company has been denied this exemption and is
pursuing legal action to regain it. In 4Q23, the company received a
favorable outcome in the U.S. Court of Appeals for the Fifth
Circuit. Fitch's forecasts do not currently assume an exemption,
given the uncertainty of this issue and timing until a final
resolution.
Renewable Diesel Project: Fitch believes RD production acts as a
cash flow hedge against rising RIN costs and improves CVI's
emissions profile as part of a larger ESG strategy. In 1Q24, CVI
started the Wynnewood feedstock pretreater unit, which should help
improve margins and the unit catalyst life. In addition to reducing
its RIN obligations through the additional RIN generation, CVI also
benefits from the generation of blenders' tax credit and Low Carbon
Fuel Standard. Longer term, CVI has identified other opportunities
for RD and sustainable aviation fuel (SAF), but it is currently at
a preliminary stage.
CVR Partners, LP Affiliate: CVR Partners is nonrecourse to the debt
issued at CVI and CVR Refining, LP. CVI explored the potential
spinoff of CVR Partners but decided not to proceed at this time.
Fitch does not expect CVI will provide credit support to CVR
Partners, which is required to distribute its available cash less
reserves (as defined) to its unitholders. Fitch expects this to be
a source of cash for CVI, given its ownership of 37% of CVR
Partners' common units, which could be material during periods of
high ammonia and urea and ammonium nitrate prices.
Derivation Summary
CVI's ratings reflect its status as a medium-sized Midcontinent
complex refiner with two refineries and approximately 206mbpd of
nameplate capacity. The company's refining capacity is smaller than
peers Par Petroleum, LLC (B+/Stable) with 219mbpd, PBF Holding
Company LLC (BB/Stable), with 1,023mbpd. CVI is also smaller than
peer's HF Sinclair Corporation (BBB-/Stable), with 678mbpd, and
Delek US Holdings, Inc. (BB-/Stable), with 302mbpd.
The company's refining asset quality is strong and advantaged in
several ways, such as geographically, with a concentration of
price-advantaged crude oil sourcing in the Midcontinent, and
operationally, with flexibility to take advantage of light, heavy
and sour crude. CVI also has a strong logistics system that allows
the company to easily transport and store crude oil and refined
products.
Fitch estimates CVI's refinery EBITDA leverage for 2024 in the 6x
range.
The major differentiator between non-investment grade issuers, such
as CVI and PBF, versus 'BBB' peers is primarily size, geographic
diversification and business line diversification.
Key Assumptions
- Brent price assumptions of $80/bbl in 2024, $70/bbl in 2025,
$65/bbl in 2026, $65/bbl in 2027 and $60/bbl thereafter;
- WTI price assumptions of $75/bbl in 2024, $65/bbl in 2025,
$60/bbl in 2026, $60/bbl in 2027 and $57/bbl thereafter;
- PADD II 3-2-1-1 crack spreads averaging $18.5 in 2024 before
remaining in the $18.50-$19 range;
- Assumes no additional shareholder distributions following the
$151 million paid YTD 2024;
- Total capex ranging from $250 million to $350 million;
- No assumption for acquisitions, divestitures, stock repurchases,
or equity offerings over the forecast period.
Recovery Analysis
Fitch examined CVI on both a going concern (GC) and liquidation
value (LV) basis and expects it would be reorganized as a GC in the
event of bankruptcy.
Fitch assumed an 80% draw under the current available borrowing
capacity of $314 million ABL facility.
Fitch notes that CVI has a crude oil supply agreement in place with
Gunvor USA LLC to reduce the amount of inventory held at certain
locations and mitigate crude oil pricing risk. This facility
expires on Jan. 31, 2026 and is subject to automatic one-year
renewals provided neither party provides 180 days' notice of
termination. Fitch's understanding is that once the crude goes into
the company's tanks, inventory and title transfers. However, given
the lack of public information, Fitch does not analyse this in the
recovery model at this stage.
Fitch applied a 10% administrative claim to the GC enterprise value
(EV). Fitch's GC EBITDA reflects CVI's recovery from a scenario in
which near-term liquidity constraints result in default and
bankruptcy. Fitch uses a 5.5x EBITDA multiple to arrive at its GC
EV, positioned between DK's 5.0x multiple (reflecting CVI's
diversification through the renewables and fertilizer segments) and
Calumet's 5.7x multiple (given their higher margin specialty
chemicals business).
Fitch's assumes a GC EBITDA of $250 million. This figure is based
on the last year in its stress case scenario. The GC EBITDA also
reflects increased long-term midcycle price expectations.
The allocation of value in the liability waterfall results in
recovery corresponding to 'RR1' for the first-lien secured Term
Loan B, and 'RR3' for the senior unsecured notes.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Material reduction in liquidity over a sustained period;
- A change in financial policy from debt reduction following the
proposed term loan B issuance;
- Refinery segment midcycle EBITDA leverage sustained above 4.0x;
- Material regulatory changes that can potentially reduce
earnings.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Greater earnings diversification and scale, or evidence of lower
cash flow volatility;
- Reduced exposure to environmental and regulatory obligations due
to increased focus on renewables;
- Refinery segment midcycle EBITDA leverage sustained at or below
3.0x.
Liquidity and Debt Structure
Fitch believes CVI's liquidity has reduced with cash on hand of
roughly $423 million and $290 million of availability under its
undrawn revolver as of Sept. 30, 2024, excluding CVR Partners.
Fitch will continue to monitor cash balances closely, given the
higher reliance on cash following the recent shift in structural
liquidity with the reduction of the credit facility in June 2022.
The proposed three-year $300 million Term Loan B due December 2027,
along with cash on hand and the availability under the ABL should
allow CVI to support operational and debt obligations, and negative
FCF in the near term. The Term Loan B has first lien on all fixed
assets and second lien on ABL collateral.
On Sept., 24, 2024, CVI entered into an Incremental Commitment
Agreement to increase the ABL by $70 million to $345 million (from
$275 million). As at Sept. 30, 2024, current available borrowing
capacity is $314mm. The company has historically not drawn on the
facility, with only LOCs of $24 million currently outstanding.
Refinancing risk has been reduced, with the $400 million, 5.75%
senior unsecured note due February 2028 and the $600 million, 8.5%
senior unsecured note due January 2029.
The only bond maturity for fertilizer business CVR Partners is its
$550 million, 6.125% secured note due June 2028.
Issuer Profile
CVR Energy, Inc. is a diversified holding company that primarily
engages in petroleum refining, renewable fuels and nitrogen
fertilizer manufacturing. CVI's petroleum segment is composed of
two Mid-Continent refineries (Coffeyville and Wynnewood) and
associated logistics assets.
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
CVI has an ESG Relevance Score of '4' for Governance Structure, as
Carl C. Icahn owns approximately 66% of the voting power of the
common stock. The substantial ownership concentration 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
----------- ------ -------- -----
CVR Energy, Inc. LT IDR B+ Downgrade BB-
senior unsecured LT BB- Affirmed RR3 BB-
CVR Refining, LP LT IDR B+ New Rating
senior unsecured LT BB+ New Rating RR1
DALE HOLLOW: Sec. 341(a) Meeting of Creditors on Jan. 13
--------------------------------------------------------
On December 2, 2024, Dale Hollow Charcoal LLC filed Chapter 11
protection in the Western District of Kentucky. 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 Sec. 341(a) to be held on January 13,
2025 at 12:30 PM at UST-Stonitsch: Phone 866-821-6936, Meeting Code
9917095.
About Dale Hollow Charcoal LLC
Dale Hollow Charcoal LLC is a limited liability company.
Dale Hollow Charcoal LLC sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. W.D. Ky. Case No. 24-10863) on December 2,
2024. In the petition filed by Steve Beyer, as managing member, the
Debtor reports estimated assets and liabilities between $1 million
and $10 million each.
The Debtor is represented by:
Laura Day DelCotto, Esq.
DELCOTTO LAW GROUP PLLC
200 North Upper St.
Lexington, KY 40507
Tel: (859) 231-5800
E-mail: ldelcotto@dlgfirm.com
DAVID VELASQUEZ: Files Chapter 11 Bankruptcy in Texas
-----------------------------------------------------
On December 2, 2024, David Velasquez Realty LLC filed Chapter 11
protection in the Northern District of Texas. According to court
filing, the Debtor reports between $1 million and $10 million in
debt owed to 1 and 49 creditors. The petition states that funds
will be available to unsecured creditors.
About David Velasquez Realty LLC
David Velasquez Realty LLC, doing business as Key Realty, is a
limited liability company.
David Velasquez Realty LLC sought relief under Subchapter V of
Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Tex. Case No.
24-20329) on December 2, 2024. In the petition filed by David
Velasquez, as owner, the Debtor reports estimated assets and
liabilities between $1 million and $10 million each.
Honorable Bankruptcy Judge Robert L. Jones handles the case.
The Debtor is represented by:
Joyce W. Lindauer, Esq.
JOYCE W. LINDAUER ATTORNEY, PLLC
1412 Main Street, Suite 500
Dallas TX 75202
Tel: (972) 503-4033
E-mail: joyce@joycelindauer.com
DMCC HERMITS: Commences Subchapter V Bankruptcy Process
-------------------------------------------------------
On December 1, 2024, DMCC Hermits Trail LLC filed Chapter 11
protection in the Middle District of Florida. According to court
filing, the Debtor reports between $1 million and $10 million in
debt owed to 1 and 49 creditors.
About DMCC Hermits Trail LLC
DMCC Hermits Trail LLC is a limited liability company.
DMCC Hermits Trail LLC sought relief under Subchapter V of Chapter
11 of the U.S. Bankruptcy Code (Bankr. M.D. Fla.
Case No. 24-03663) on December 1, 2024. In its petition, the Debtor
reports estimated assets and liabilities between $1 million and $10
million each.
Honorable Bankruptcy Judge Jason A. Burgess handles the case.
The Debtor is represented by:
Justin M. Luna, Esq.
LATHAM LUNA EDEN & BEAUDINE LLP
201 S. Orange Avenue
Suite 1400
Orlando, FL 32801
Tel: (407) 481-5800
Fax: (407) 481-5801
E-mail: jluna@lathamluna.com
DMCC TECH: Seeks Bankruptcy Protection in Florida
-------------------------------------------------
On December 1, 2024, DMCC Tech Blvd LLC filed Chapter 11 protection
in the Middle District of Florida. According to court filing, the
Debtor reports between $1 million and $10 million in debt owed to 1
and 49 creditors. The petition states funds will be available to
unsecured creditors.
About DMCC Tech Blvd LLC
DMCC Tech Blvd LLC is a limited liability company.
DMCC Tech Blvd LLC sought relief under Subchapter V of Chapter 11
of the U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No. 24-03665) on
December 1, 2024. In the petition filed by Pradeep Matharoo, as
authorized agent, the Debtor reports estimated assets and
liabilities between $1 million and $10 million each.
Honorable Bankruptcy Judge Jason A. Burgess handles the case.
The Debtor is represented by:
Justin M. Luna, Esq.
LATHAM LUNA EDEN & BEAUDINE LLP
201 S. Orange Avenue
Suite 1400
Orlando, FL 32801
Tel: (407) 481-5800
Fax: (407) 481-5801
E-mail: jluna@lathamluna.com
DODGE CONSTRUCTION: Moody's Alters Outlook on 'Caa2' CFR to Stable
------------------------------------------------------------------
Moody's Ratings affirmed Dodge Construction Network LLC's (DCN)
ratings, including the Corporate Family Rating of Caa2 and the
Probability of Default Rating of Caa2-PD. At the same time, Moody's
appended a "/LD" designation to the company's PDR changing it to
Caa2-PD/LD from Caa2-PD, following the recent debt exchange of
senior secured first lien term loan and senior secured second lien
term loan. Moody's also assigned a B2 rating to the company's
backed senior secured first lien first out term loan and backed
senior secured first lien revolving credit facility, Caa2 rating to
the company's backed senior secured first lien second out term
loan, and Ca rating to the backed senior secured second lien term
loan. Moody's downgraded the rating of the company's backed senior
secured third lien term loan (previously backed senior secured
first lien term loan) to Ca from Caa1. Moody's also affirmed the Ca
rating of the company's backed senior secured fourth lien term loan
(previously backed senior secured second lien term loan). The
outlook has been revised to stable from negative.
The rating actions reflect the closing of DCN's exchange offer to
solicit the existing first lien term loan lenders to exchange into
new first out and second out first lien term loans. As part of the
exchange, DCN also received $100 million in new money term loan,
which will have a first lien first out payment priority. DCN also
exchanged its second lien term loan into a PIK interest second lien
term loan. Substantially all of the existing first lien and the
second lien term loan lenders consented to the offer. The remaining
first lien and second lien term loans lenders are subordinated into
third lien and fourth lien term loans, respectively, with stripped
covenants. Moody's considered this transaction a distressed
exchange and a limited default and appended a "/LD" designation to
DCN's PDR. Moody's will remove the "/LD" designation from the
company's PDR in approximately three business days.
The revision of the outlook to stable reflects the company's
improved liquidity, with DCN using the proceeds from the new money
$100 million first lien first out term loan to provide net
liquidity of approximately $50 million and cover fees and expenses.
The company's cash flow is also expected to improve with reduced
cash interest costs stemming from the PIK payments on the second
lien term loan. Pro Forma (PF) for the transaction, DCN's
debt/EBITDA leverage (Moody's adjusted) was about 9x. The company
will need to achieve operational improvements and further improve
its customer retention in order to drive meaningful deleveraging
over the next 12 to 18 months.
Governance is a driver of the rating action, including risks from
an aggressive financial policy with an elevated debt load under the
controlled ownership, and considers the distressed exchange
transaction.
RATINGS RATIONALE
DCN's Caa2 CFR reflects its high PF leverage of about 9x and
Moody's expectation of leverage to remain relatively flat over the
next 12 months primarily due to high amount of PIK interest on the
second lien term loan. The company's operating performance has
remained relatively constrained over the past year as a result of a
decrease in customer retention, delays in invoicing and cash
collections, and cash flow deficits. The company's high leverage
will continue to limit its financial flexibility over the next 12
months.
At the same time, the rating takes into consideration the DCN's
strong market position as a provider of data, analytics, digital
workflow solutions and targeted marketing services to professionals
in the US commercial construction industry. In addition, the rating
accounts for DCN's strategic attempt to convert customers to auto
renewing contracts as it will enhance the company's revenue
visibility and bolster revenue stability over the longer term.
Moody's expect DCN to have adequate liquidity over the next 12
months supported by PF cash in excess of $20 million at the close
of the transaction, full availability under the $40 million
revolving credit facility, and Moody's expectation of high single
digit free cash flow generation. The company does not have
meaningful debt maturities until 2029 with its revolving credit
facility and first lien first out term loan maturing in January
2029, first lien second out term loan and third lien term loan
maturing in February 2029, second lien term loan maturing in March
2029, and fourth lien term loan maturing in February 2030. The
revolving credit facility contains a total net first out first lien
leverage covenant test of 9.02x triggered when 40% or more is
outstanding. Moody's expect DCN to be compliant with its financial
covenants over the next 12 months.
The B2 rating on DCN's senior secured revolving credit facility and
senior secured first lien first out term loan reflects the debt's
senior position in the company's capital structure, above the Caa2
rated senior secured first lien second out term loan, and Ca rated
senior secured second lien term loan, senior secured third lien
term loan, and senior secured fourth lien term loan.
The stable outlook reflects Moody's expectation that DCN's revenue
will grow by low single digits with stable EBITDA margins over the
next 12 months. Moody's expect the company's leverage to remain
relatively flat at about 9x over the outlook period.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if DCN demonstrates recovery in
operating performance and cash collections, sustains positive free
cash flow generation, and reduces its debt/EBITDA leverage.
The ratings could be downgraded if Moody's assessment of recovery
in a default scenario deteriorates.
Headquartered in Bedford, MA, Dodge Construction Network is a
provider of commercial construction project data, market
forecasting and analytics services, advertising and marketing
solutions, and workflow integration solutions for the North
American pre-construction industry. The company is owned by
Symphony Technology Group and Clearlake Capital Group, L.P.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
DRTMG LLC: Rental Income & Sale Proceeds to Fund Plan Payments
--------------------------------------------------------------
DRTMG, LLC, submitted a Small Business Plan of Reorganization under
Subchapter V.
The Plan Proponent's financial projections show that the Debtor
will have projected disposable income of $1,951,540. The final plan
payment is expected to be paid on April 11, 2029.
This Plan of Reorganization proposes to pay creditors of the Debtor
from rental income derived from the property located at 2544-2550
Adams Avenue, Columbus, Ohio. Further plan funding shall come from
the sale of the properties located at 974 Timbernak Drive,
Westerville, Ohio; 1465 Lockbourne Road, Columbus, Ohio; 7138
Cypress Drive, Westerville, Ohio; 98 South James Road, Columbus,
Ohio; 5791 Houchard Road, Dublin, Ohio; and 296 Chase Road,
Columbus, Ohio.
Non-priority unsecured creditors holding allowed claims will
receive distributions, which the proponent of this Plan has valued
at approximately 100 cents on the dollar. This Plan also provides
for the payment of administrative and priority claims.
Class 3 consists of non-priority unsecured creditors. All unsecured
claims shall be paid at 100% based on a pro rata basis. This Class
is unimpaired.
The Debtor shall fund the Plan from rental income derived from the
properties located at 2544-2550 Adams Avenue, Columbus, Ohio.
Further plan funding shall come from the sale of the properties
located at 974 Timbernak Drive, Westerville, Ohio; 1465 Lockbourne
Road, Columbus, Ohio; 7138 Cypress Drive, Westerville, Ohio; 98
South James Road, Columbus, Ohio; 5791 Houchard Road, Dublin, Ohio;
and 296 Chase Road, Columbus, Ohio.
All secured creditors should be paid 100% pursuant to the given
note, including arrearages. Unsecured creditors shall be paid at
100%.
A full-text copy of the Amended Plan dated November 7, 2024 is
available at https://urlcurt.com/u?l=FaTpYP from PacerMonitor.com
at no charge.
Attorney for the Debtor:
Kenneth L. Sheppard, Jr., Esq.
Sheppard Law Offices Co., LPA
8351 North High Street, Suite 101
Columbus, OH 43235
Telephone: (614) 523-3106
Facsimile: (614) 882-6750
Email: ken@sheppardlawoffices.com
About DRTMG LLC
DRTMG LLC is primarily engaged in renting and leasing real estate
properties. The Debtor owns four single family dwellings and one
multi-family home, all are located in Westerville and Columbus,
Ohio having a total current value of $1,789,400.
DRTMG LLC sought protection under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. S.D. Ohio Case No. 24-51398) on April 12, 2024. In the
petition signed by Nathanael Thompson, president/sole member, the
Debtor disclosed $1,789,400 in assets and $1,395,374 in
liabilities.
Judge Mina Nami Khorrami oversees the case.
Kenneth L. Sheppard, Jr., Esq., at Sheppard Law Offices Co., LPA,
serves as the Debtor's counsel.
ECHOSTAR CORP: Dodge & Cox Holds 9.6% of Class A Common Stock
-------------------------------------------------------------
Dodge & Cox disclosed in a Schedule 13G filed with the U.S.
Securities and Exchange Commission that as of September 30, 2024,
it beneficially owned 13,467,353 shares of EchoStar Corporation's
Class A Common Stock, representing 9.6% of the shares outstanding.
Dodge & Cox may be reached at:
DODGE & COX
Katherine M. Primas
Chief Compliance Officer
555 California Street, 40th Floor
San Francisco, CA 94104
Tel: 415-981-1710
A full-text copy of 's SEC Report is available at:
https://tinyurl.com/bdzdk46b
About EchoStar Corporation
EchoStar Corporation (Nasdaq: SATS) -- www.echostar.com -- is a
provider of technology, networking services, television
entertainment, and connectivity, offering consumer, enterprise,
operator, and government solutions worldwide under its EchoStar,
Boost Mobile, Boost Infinite, Sling TV, DISH TV, Hughes, HughesNet,
HughesON, and JUPITER brands. In Europe, EchoStar operates under
its EchoStar Mobile Limited subsidiary, and in Australia, the
Company operates as EchoStar Global Australia.
Denver, Colorado-based KPMG LLP, the Company's auditor since 2002,
issued a "going concern" qualification in its report dated Feb. 29,
2024, citing that the Company has debt maturing in 2024 and expects
to use a substantial amount of cash in the next twelve months. This
raises substantial doubt about the Company's ability to continue as
a going concern.
* * *
On November 2024, S&P Global Ratings raised its Company credit
rating (ICR) on EchoStar Corp. to 'CCC+' due to the improved
liquidity position enabled by fresh capital and debt maturity
extensions.
ECHOSTAR CORP: Renaissance Technologies Holds Less Than 5% Stake
----------------------------------------------------------------
Renaissance Technologies LLC and Renaissance Technologies Holdings
Corporation disclosed in a Schedule 13G/A filed with the U.S.
Securities and Exchange Commission that they ceased to be the
beneficial owner of more than 5 percent of EchoStar Corporation's
Class A common stock.
As of September 30, 2024, the Renaissance Entities reported to
beneficially own 7,287 shares of Class A common stock, representing
0.01% of the shares outstanding.
Renaissance Technologies LLC may be reached at:
Brian Felczak
Chief Financial Officer
800 Third Ave
New York NY 10022
Tel: 212-486-6780
A full-text copy of Renaissance's SEC Report is available at:
https://tinyurl.com/f9c27fc2
About EchoStar Corporation
EchoStar Corporation (Nasdaq: SATS) -- www.echostar.com -- is a
provider of technology, networking services, television
entertainment, and connectivity, offering consumer, enterprise,
operator, and government solutions worldwide under its EchoStar,
Boost Mobile, Boost Infinite, Sling TV, DISH TV, Hughes, HughesNet,
HughesON, and JUPITER brands. In Europe, EchoStar operates under
its EchoStar Mobile Limited subsidiary, and in Australia, the
Company operates as EchoStar Global Australia.
Denver, Colorado-based KPMG LLP, the Company's auditor since 2002,
issued a "going concern" qualification in its report dated Feb. 29,
2024, citing that the Company has debt maturing in 2024 and expects
to use a substantial amount of cash in the next twelve months. This
raises substantial doubt about the Company's ability to continue as
a going concern.
* * *
On November 2024, S&P Global Ratings raised its Company credit
rating (ICR) on EchoStar Corp. to 'CCC+' due to the improved
liquidity position enabled by fresh capital and debt maturity
extensions.
EDUCATIONAL DEVT: Needham Entities Hold 9.38% Equity Stake
----------------------------------------------------------
Needham Asset Management, LLC disclosed in a Schedule 13G filed
with the U.S. Securities and Exchange Commission that as of
September 30, 2024, it and its affiliated entities -- Needham
Investment Management LLC and George A. Needham -- beneficially
owned 805,000 shares of Educational Development Corp.'s common
stock, representing 9.38% of the shares outstanding.
A full-text copy of Needham's SEC Report is available at:
https://tinyurl.com/279jdyzd
About Educational Development Corp
Tulsa, Okla.-based Educational Development Corp is the owner and
exclusive publisher of Kane Miller children's books; Learning
Wrap-Ups, maker of educational manipulatives; and SmartLab Toys,
maker of STEAM-based toys and games. It is also the exclusive
United States Multi-Level Marketing distributor of Usborne
Publishing Limited children's books. Significant portions of our
existing inventory volumes are concentrated with Usborne.
Educational Development Corp sells its products through two
separate divisions, PaperPie and Publishing.
As of August 31, 2024, the Company had $85,194,900 in total assets,
$42,656,300 in total liabilities, and $42,538,600 in total
shareholders' equity.
According to the Company's Quarterly Report on Form 10-Q Report for
the quarterly period ended August 31, 2024, the short-term duration
of the Revolving Loan and uncertainty of the bank's ongoing support
beyond January 4, 2025, along with recurring operating losses and
other items, raise substantial doubt over the Company's ability to
continue as a going concern. To address these concerns, the Company
has taken steps in its plans to reduce debt by selling owned real
estate. The proceeds from the sale are expected to pay off the Term
Loans and Revolving Loan. Following the loan payoff, management
plans to fund ongoing operations with limited borrowings through
local banks or other financing sources. In addition, management's
plans include reducing inventory which will generate free cashflows
and building the active PaperPie Brand Partners to pre-pandemic
levels. Although there is no guarantee these plans will be
successful, management believes these plans, if achieved, will
alleviate the substantial doubt about continuing as a going concern
and generate sufficient liquidity to meet the Company's obligations
as they become due over the next 12 months.
EMERGENT BIOSOLUTIONS: Oak Hill Advisors Holds 6.39% Stake
----------------------------------------------------------
Oak Hill Advisors, L.P. disclosed in a Schedule 13G/A filed with
the U.S. Securities and Exchange Commission that as of September
30, 2024, it beneficially owned 3,613,338 shares of Emergent
Biosolutions Inc.'s Common Stock (including 2,500,000 shares of
Common Stock issuable upon exercise of warrants), representing
6.39% of the 54,019,962 shares of Common Stock, which is the sum
of:
(i) 52,906,624 shares of Common Stock outstanding as of July
30, 2024, as reported in the Company's Quarterly Report on Form
10-Q for the quarterly period ended June 30, 2024, filed with the
Securities and Exchange Commission on August 7, 2024 and
(ii) 1,113,338 shares of Common Stock issued by the Company on
September 17, 2024, as disclosed in the Company's Current Report on
Form 8-K filed with the Securities and Exchange Commission on
September 17, 2024, and assumes the exercise of warrants reported.
Oak Hill Advisors, L.P. may be reached at:
Glenn R. August
Founder and Chief Executive Officer of OHA.
One Vanderbilt Avenue,
16th Floor
New York, New York 10017
Tel: 212-326-1500
A full-text copy of Oak Hill's SEC Report is available at:
https://tinyurl.com/257w5kby
About Emergent Biosolutions
Headquartered in Gaithersburg, Md., Emergent Biosolutions Inc. is a
global life sciences company focused on providing innovative
preparedness and response solutions addressing accidental,
deliberate, and naturally occurring public health threats. The
Company's solutions include a product portfolio, a product
development portfolio, and a contract development and manufacturing
services portfolio.
Tysons, Virginia-based Ernst & Young LLP, the Company's auditor
since 2004, issued a "going concern" qualification in its report
dated March 8, 2024, citing that the Company does not expect to be
in compliance with debt covenants in future periods without
additional sources of liquidity or future amendments to its Senior
Secured Credit Facilities. The report stated that substantial doubt
exists about the Company's ability to continue as a going concern.
As of September 30, 2024, Emergent Biosolutions had $1.5 billion in
total assets, $969.4 million in total liabilities, and $508.4
million in total stockholders' equity.
ENGLOBAL CORP: William Coskey, Alliance 2000 Hold 22% Stake
-----------------------------------------------------------
William A. Coskey and Alliance 2000, Ltd. disclosed in a Schedule
13D/A filed with the U.S. Securities and Exchange Commission that
as of November 12, 2024, they beneficially owned =shares of
ENGlobal Corporation's common stock.
(1) Mr. Coskey is the beneficial owner of 1,133,660 shares of
Common Stock (28,585 shares of Common Stock jointly held by Mr.
Coskey and his spouse, and 1,105,075 shares of Common Stock held by
Alliance, over which he may be deemed to have shared voting and/or
dispositive power as the President of BHC, the sole general partner
of Alliance), which represents approximately 22% of the outstanding
shares of Common Stock of the Company (based on 5,156,583 shares of
Common Stock outstanding on November 12, 2024, as reported in the
Company's Quarterly Report on Form 10-Q filed with the Securities
and Exchange Commission on November 12, 2024).
(2) Alliance is the beneficial owner of 1,105,075 shares of
Common Stock (all held directly by Alliance), which represents
approximately 21.4% of the outstanding shares of Common Stock of
the Company.
On August 1, 1994, the Company entered into an agreement to
purchase all of the issued and outstanding shares of Industrial
Data Systems, Inc., a Texas corporation, in a tax-free exchange of
stock. The Company issued 593,750 shares of its Common Stock to
Mr. Coskey in exchange for the consideration of 100,000 shares of
Industrial Data Systems, Inc. The consideration for the issuance
of 593,750 shares Common Stock of the Company to Mr. Coskey was
valued at $351,131.
On October 27, 1997, Mr. Coskey and his spouse each transferred
593,750 shares of Common Stock of the Company to Alliance. No
funds were exchanged for the transfer of these shares.
On June 16, 1998, Mr. Coskey and his spouse acquired an aggregate
of 13 shares of Common Stock of the Company at the time the Company
became listed with the American Stock Exchange. Mr. Coskey and his
spouse purchased these shares of Common Stock using their own
personal funds, for an aggregate purchase price of approximately
$500.
From November 17, 2017 through December 8, 2017, Alliance acquired
an aggregate of 21,458 shares of Common Stock of the Company
through open market purchases. Alliance purchased these shares of
Common Stock using its working capital, for an aggregate purchase
price of approximately $135,615.
On July 12, 2023, in recognition of the services provided by
members of the Company's Board of Directors for the 2023-2024
service term, Mr. Coskey received 28,572 restricted shares of the
Common Stock, valued at $80,000 based on the fair market value of
the shares on the date of grant, or $2.80 per share. The shares
vested in equal installments on September 30, 2023, December 31,
2023, March 31, 2024 and June 30, 2024.
Mr. Coskey currently serves as the Chairman of the Board and Chief
Executive Officer of the Company. As the Chairman of the Board and
Chief Executive Officer of the Company, Mr. Coskey may have
influence over the corporate activities of the Company.
Alliance 2000, Ltd. may be reached at:
BHC Management Corp., its general partner
William A. Coskey
President
3 Dashwood Court, The Hills
Houston Texas 78738
A full-text copy of Mr. Coskey's SEC Report is available at:
https://tinyurl.com/4mak2nce
About ENGlobal
ENGlobal Corporation (NASDAQ: ENG) -- www.englobal.com -- is a
provider of innovative, delivered project solutions primarily to
the energy industry. ENGlobal operates through two reportable
segments: Commercial and Government Services. The Commercial
segment provides engineering, design, fabrication, construction
management, and integration of automated control systems. The
Government Services segment provides engineering, design,
installation, operations, and maintenance of various government,
public sector, and international facilities, specializing in
turnkey automation and instrumentation systems for the U.S. Defense
industry.
Houston, Texas-based Moss Adams LLP, the Company's auditor since
2017, issued a "going concern" qualification in its report dated
March 29, 2024, citing that the Company has suffered recurring
losses from operations and has utilized significant cash in
operations, raising substantial doubt about its ability to continue
as a going concern.
ENGlobal reported a net loss of $15.2 million for the year ended
December 30, 2023, compared to a net loss of $18.5 million for the
year ended December 31, 2022. As of June 29, 2024, ENGlobal had
$14.8 million in total assets, $18.8 million in total liabilities,
and $3.9 million in total stockholders' deficit.
ENJOY SA: Says Repayment Terms Fulfilled on December 6
------------------------------------------------------
Valentine Hilaire of Bloomberg Law reports that Enjoy met the
repayment conditions agreed upon with creditors on December 6,
2024, according to a company filing. The company announced plans to
adjust terms for certain bonds in the coming days and confirmed the
division of some units, the report relates.
About Enjoy SA
Enjoy SA owns and/or operates hotels and casinos.
Enjoy SA sought relief under Chapter 15 of the U.S. Bankruptcy Code
(Bankr. S.D.N.Y. Case No. 24-10433) on March 15, 2024.
Honorable Bankruptcy Judge Philip Bentley handles the case.
Foreign Representative's Counsel is Pedro A. Jimenez, Esq., at PAUL
HASTINGS LLP.
ENVERIC BIOSCIENCES: Intracoastal, 2 Others Hold 3.1% Stake
-----------------------------------------------------------
Intracoastal Capital LLC, Mitchell P. Kopin, and Daniel B. Asher
disclosed in Schedule 13G Report filed with the U.S. Securities and
Exchange Commission that they beneficially owned shares of Enveric
Biosciences, Inc.'s common stock.
As of the close of business on September 30, 2024, each of the
Reporting Persons may have been deemed to have beneficial ownership
of 290,000 shares of Common Stock issuable upon exercise of a
warrant held by Intracoastal, and all such shares of Common Stock
in the aggregate represent beneficial ownership of approximately
3.1% of the Common Stock, based on (i) 8,919,920 shares of Common
Stock as of August 30, 2024, as reported by the Company and (2)
290,000 shares of Common Stock issuable upon exercise of the
Intracoastal Warrant.
Intracoastal Capital LLC may be reached at:
Mitchell P. Kopin, Manager
245 Palm Trail
Delray Beach Fla. 33483
Tel: 847-562-9030
A full-text copy of Intracoastal Capital's SEC Report is available
at:
https://tinyurl.com/4vzsyx67
About Enveric Biosciences
Enveric Biosciences (NASDAQ: ENVB) -- www.enveric.com -- is a
biotechnology company dedicated to the development of novel
neuroplastogenic small-molecule therapeutics for the treatment of
depression, anxiety, and addiction disorders. Leveraging its unique
discovery and development platform, Psybrary, Enveric has created a
robust intellectual property portfolio of new chemical entities for
specific mental health indications. Enveric's lead program, EB-003,
is a first-in-class approach to the treatment of
difficult-to-address mental health disorders designed to promote
neuroplasticity without inducing hallucinations in the patient.
Enveric is also developing EB-002, formerly EB-373, a next
generation synthetic prodrug of the active metabolite, psilocin,
being studied as a treatment of psychiatric disorders. Enveric is
headquartered in Naples, FL with offices in Cambridge, MA and
Calgary, AB Canada.
East Hanover, New Jersey-based Marcum LLP, the Company's auditor
since 2021, issued a "going concern" qualification in its report
dated March 25, 2024, citing that the Company has incurred
significant losses and needs to raise additional funds to meet its
obligations and sustain its operations. These conditions raise
substantial doubt about the Company's ability to continue as a
going concern.
For the year ended December 31, 2023, the Company had a loss from
operations of $16.4 million. As of March 31, 2024, the Company had
$8.85 million in total assets, $2.37 million in total current
liabilities, and $6.48 million in total shareholders' equity.
ENVIVA INC: Davis Polk Advises Creditors in Restructuring
---------------------------------------------------------
Davis Polk advised an ad hoc group of creditors in connection with
the successful restructuring of Enviva Inc. and certain of its
affiliates. In addition, members of the ad hoc group backstopped a
$500 million debtor-in-possession (DIP) financing and a $250
million new-money equity financing. Davis Polk also separately
advised certain members of the ad hoc group in providing a new
$1.05 billion secured credit facility to support the
restructuring.
Enviva Inc. and certain of its subsidiaries filed voluntary chapter
11 petitions in the United States Bankruptcy Court for the Eastern
District of Virginia on March 12, 2024. Shortly before the filing,
the ad hoc group, which at that time held over $1.5 billion across
the company's debt capital structure, executed a restructuring
support agreement with Enviva and agreed to provide the DIP
financing.
On November 13, 2024, the Bankruptcy Court confirmed Enviva's plan
of reorganization, approving the comprehensive restructuring backed
by the ad hoc group. As a result of the plan, creditors will own
substantially all of reorganized Enviva's equity of reorganization,
and Enviva eliminated approximately $1 billion of debt from its
balance sheet.
Enviva, LLC is a leading producer of industrial wood pellets, a
renewable energy source produced by aggregating a natural resource,
wood fiber, and processing it into a transportable form, wood
pellets. Enviva owns and operates plants throughout the
Southeastern United States and exports its wood pellets to
customers in global markets.
The Davis Polk restructuring team included partners Damian S.
Schaible, David Schiff and Christian Fischer and associates Joseph
W. Brown, Alexander K.B. Shimamura, James Nirappel and Mckenzie K.
Whalen. Partner Paul S. Scrivano and associate Sarah Catherine
Chouinard provided corporate advice. Partner Patrick E. Sigmon
provided tax advice. Partner Elliot Moskowitz provided litigation
advice. Partner Adam Kaminsky provided executive compensation
advice. Partner Yasin Keshvargar provided capital markets advice.
Members of the Davis Polk team are based in the New York, Northern
California and Washington DC offices.
Davis Polk refers to Davis Polk & Wardwell LLP, a New York limited
liability partnership, and its associated entities.
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 itinto 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. The
committee tapped Akin Gump Strauss Hauer & Feld, LLP as lead
bankruptcy counsel; Hirschler Fleischer, PC as local counsel;
Ducera Partners, LLC as investment banker; and AlixParners, LLP as
financial advisor.
FIG & FENNEL: Court OK's Sale of MIA Lease & Concession
-------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Florida,
Fort Lauderdale Division, has authorized Fig & Fennel at MIA, LLC,
to sell its business assets comprised of lease and concession
located at the Miami International Airport, known as Target Asset.
The Court has approved the Debtor's proposed bid procedures,
auction, and sale hearing with respect to its Target Assets,
subject to higher and better offers in accordance with the terms of
the Bid Procedures Order.
The Debtor has identified SSP America MIA II, LLC as the stalking
horse bidder for the Target Assets with the purchase price of
$3,100,000, and the Debtor did not receive any other qualifying
bids.
The Debtor, not having received any qualifying bids, was not
required to hold an auction, since the offer from SSP America
constituted the highest and best bid for the Target Assets.
The Debtor intends to assume certain executory contracts and
unexpired leases and to pay certain related cure amounts in
connection with the assumption of the Target Assets, and the
Purchaser intends to accept an assignment of the Assumed Contracts.
The Court has approved the sale and the consummation of the
transactions contemplated thereby is in the best interest of the
Debtor, estates, creditors, and other parties in interest.
The Court further ordered that to enhance the Debtorsโ level of
liquidity, to preserve the value of the Debtorsโ estates, and
reduce the amount of post-petition expenses borne by the Debtors,
and to maximize the amount of funding available to provide for a
timely exit from these Chapter 11 Cases, it is essential that the
Sale of the Target Assets occur within the time constraints set
forth in the purchase agreement.
About Fig & Fennel at MIA LLC
Fig & Fennel at MIA, LLC and affiliates own and operate restaurants
offering a broad selection of grab-and-go sandwiches, salads,
bowls, snacks, desserts, and more.
The Debtors filed Chapter 11 petitions (Bankr. S.D. Fla. Lead Case
No. 23-18515) on October 18, 2023. Robert Siegmann, manager, signed
the petitions.
At the time of the filing, Fig & Fennel at MIA reported $2,956,271
in total assets and $523,057 in total liabilities.
Judge Scott M. Grossman oversees the cases.
Adam Leichtling, Esq., at Lapin & Leichtling, LLP, represents the
Debtors as legal counsel.
FIRST CHOICE: Posts $817,207 Net Loss in Fiscal Q3
--------------------------------------------------
First Choice Healthcare Solutions, Inc. filed with the U.S.
Securities and Exchange Commission its Quarterly Report on Form
10-Q reporting a net loss of $817,207 for the three months ended
September 30, 2024, compared to a net loss of $3,027,807 for the
three months ended September 30, 2023.
For the nine months ended September 30, 2024, the Company reported
a net loss of $3,884,911, compared to a net loss of $7,703,815 for
the same period in 2023.
The Company has a working capital deficit of $31,881,414 as of
September 30, 2024 and has generated recurring net losses since its
emergence from bankruptcy in April 2022. As of September 30, 2024,
the Company had an accumulated deficit of $67,817,915. This
performance reflected challenges in operating and restructuring the
company as a result of the previous issues that confronted the
Company in the healthcare market, such as growing referral bases
and negotiating favorable contract rates with third party payors
for services rendered, as well as the negative impact of the former
CEO indictment in November 2018 and the bankruptcy from September
2020. As a result of the former CEO's actions the Company has been
subject to litigation as well as incurring damage to its
relationships with its employees and referral sources. The
Company's ability to continue as a going concern is dependent upon
the success of its continuing efforts to acquire profitable
companies, grow its revenue base, reduce operating costs,
especially as related to provider services, and access additional
sources of capital, and/or sell assets. The Company believes that
it will be successful in repairing its relationships with employees
and referral sources, generating growth and improved profitability
resulting in improved cash flows from operations.
However, in order to execute the Company's business development
plan, which there can be no assurance we will achieve, the Company
may need to raise additional funds through public or private equity
offerings, debt financings, corporate collaborations or other means
and potentially reduce operating expenditures. If the Company is
unable to secure additional capital, it may have to curtail its
business development initiatives and take additional measures to
reduce costs in order to conserve its cash, thus raising
substantial doubt about its ability to continue as a going concern
more than 12 months from the date of issuance of the September 30,
2024 financial statements.
As of September 30, 2024, the Company had $4,723,456 in total
assets, $37,208,042 in total liabilities, and $32,484,586 in total
shareholders' deficit.
A full-text copy of the Company's Form 10-Q is available at:
https://tinyurl.com/39av3zt3
About First Choice Healthcare
Melbourne, Fla.-based First Choice Healthcare Solutions, Inc.
provides rehabilitative services, such as physical therapy.
Henderson, Nev.-based Bush & Associates CPA LLC, the Company's
auditor since 2024, issued a "going concern" qualification in its
report dated May 12, 2024, citing that the Company has suffered
recurring losses from operations and has a net capital deficiency
that raises substantial doubt about its ability to continue as a
going concern.
For the years ended December 31, 2023, and 2022, First Choice
reported a net loss of $8.2 million and $9.9 million, respectively.
FLUID MARKET: Bielli & Klauder Represents Vehicle Owners
--------------------------------------------------------
The law firm of Bielli & Klauder, LLC ("BK") filed a verified
statement pursuant to Rule 2019 of the Federal Rules of Bankruptcy
Procedure to disclose that in the Chapter 11 case of Fluid Market,
Inc. and Fluid Fleet Services, LLC, the firm represents a group of
owners of vehicles made available for the Debtors to lease to their
customers (collectively, the "Vehicle Owners").
In November 2024, the Vehicle Owners retained BK as their counsel
with respect to the Fluid Vehicle Investor Program.
BK does not represent or purport to represent any other entities in
connection with the Debtors' chapter 11 cases. BK does not
represent the Vehicle Owners as a "committee" (as such term is used
in the Bankruptcy Code and Bankruptcy Rules) and does not undertake
to represent the interests of, and are not fiduciaries for, any
creditor, party in interest, or other entity that has not signed a
retention agreement with BK.
In addition, the Vehicle Owners do not represent or purport to
represent any other entities in connection with the Debtors'
chapter 11 cases. Should a conflict arise, counsel will disclose it
to the Office of the United States Trustee and seek guidance.
The vehicle Owners' address and the nature and amount of
disclosable economic interests held in relation to the Debtors are:
1. Urban Interests LLC
* $178,216
2. BWB Fleet & Travel, LLC
* $59,392.59
3. CNS Holdings LLC
* $83,777.67
4. JRGS Investments, LLC
* $141,900.56
5. Moonglow Investments LLC
* $56,154.44
6. Pontiac Way Trucking LLC
* $21,803.00
7. M2 Services LLC
* $156,295.19
8. M2 Services II, LLC
* $144,255.12
9. Dog Transport LLC
* $251,185.11
10. M3 Leasing LLC
* $35,788.45
11. Pintler Logistics Inc.
* $185,864.00
The law firm can be reached at:
BIELLI & KLAUDER, LLC
David M. Klauder, Esq.
1204 N. King Street
Wilmington, DE 19801
Phone: (302) 803-4600
Email: dklauder@bk-legal.com
About Fluid Market
Fluid Market, Inc., et al., operate and manage a technology-based,
peer-to-peer truck-sharing platform across the United States with a
fleet of nearly 5,500 vehicles owned by their non-Debtor affiliates
or third-party owners who have elected to put their vehicles on the
Debtors' platform, https://www.fluidtruck.com. Customers have quick
and easy access to the right vehicle whenever they need it via the
Debtors' mobile app and website.
Fluid Market Inc. and Fluid Fleet Services, LLC sought relief under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No.
24-12363) on Oct. 16, 2024. In the bankruptcy petition, Fluid
Market reported $50 million to $100 million in assets and
liabilities.
The petition was signed by T. Scott Avila as chief executive
officer.
Pachulski Stang Ziehl & Jones LLP serves as the Debtors' counsel.
Paladin Management Group, LLC acts as the Debtors' restructuring
advisor; SSG Capital Advisors, LLC acts as investment banker to the
Debtors; and Epiq Corporate Restructuring LLC is claims and
noticing agent to the Debtors.
FREE SPEECH: Jones' Lawyers Slam Onion's Bid to Buy Infowars
------------------------------------------------------------
Alex Wittenberg of Law360 reports that on December 9, 2024,,
lawyers for Alex Jones intensified their criticism of satirical
news outlet The Onion's attempt to acquire the conspiracy
theorist's Infowars website.
They urged a Texas bankruptcy judge to block the transaction and
instead transfer ownership of Infowars to a company running a
supplements website, the report relates.
About Free Speech Systems
Free Speech Systems LLC is a broadcast media production and
distribution company that provides broadcasting aural programs by
radio to the public. Free Speech Systems is a family-run business
founded by Alex Jones.
FSS is presently engaged in the business of producing and
syndicating Jones' radio and video talk shows and selling products
targeted to Jones' loyal fan base via the Internet. Today, FSS
produces Alex Jones' syndicated news/talk show (The Alex Jones
Show) from Austin, Texas, which airs via the Genesis Communications
Network on over 100 radio stations across the United States and via
the internet through websites including Infowars.com.
Due to the content of Alex Jones' shows, Jones and FSS have faced
an all-out ban of Infowars from mainstream online spaces. Shunning
from financial institutions and banning Jones and FSS from major
tech companies began in 2018.
Conspiracy theorist Alex Jones has been sued by victims' family
members over Jones' lies that the 2012 Sandy Hook Elementary School
shooting was a hoax.
Jones' InfoW LLC and affiliates, IWHealth, LLC and Prison Planet
TV, LLC, filed petitions under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. S.D. Texas Lead Case No. 22-60020) on April
18, 2022.
GLOBAL ONE: Hearing on Cash Collateral Access Set for Jan. 22
-------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Nevada is set to hold
a status hearing on Jan. 22 next year related to Global One Media,
Inc.'s use of cash collateral.
The court on Nov. 19 granted the company's renewed motion to use
cash in which Newtek Small Business Finance, LLC asserts an
interest to allow for the continued operation of its business
pending a final hearing.
Global One Media filed its initial motion to use cash collateral on
May 13. Several status hearings ensued to allow the company and
Newtek an opportunity to reach a cash collateral stipulation. No
stipulation had been reached but Newtek committed to allow the use
of its cash collateral until the next status hearing.
About Global One Media
Las Vegas-based Global One Media, Inc. filed a petition under
Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. D. Nev.
Case No. 24-10526) on February 2, 2024, with up to $50,000 in
assets and $1 million to $10 million in liabilities. Richard
Hudson, president and chief executive officer of Global One Media,
signed the petition.
Judge Mike K. Nakagawa oversees the case.
David Riggi, Esq., at Riggi Law Firm represents the Debtor as
bankruptcy counsel.
GMT 3435 REALTY: Case Summary & Four Unsecured Creditors
--------------------------------------------------------
Debtor: GMT 3435 Realty LLC
29 Wilderness Trail
Carmel, NY 10512
Business Description: GMT 3435 Realty LLC is primarily engaged in
renting and leasing real estate properties.
Chapter 11 Petition Date: December 8, 2024
Court: United States Bankruptcy Court
Southern District of New York
Case No.: 24-36191
Debtor's Counsel: Anne Penachio, Esq.
PENACHIO MALARA LLP
245 Main Street
Suite 450
White Plains, NY 10601
Tel: (914) 946-2889
Email: anne@pmlawllp.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by George Gojcaj as manager.
A full-text copy of the petition containing, among other items, a
list of the Debtor's four unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/WQWVEYY/GMT_3435_Realty_LLC__nysbke-24-36191__0001.0.pdf?mcid=tGE4TAMA
GOL LINHAS: Prepares for Initial Ch. 11 Restructuring Plan Filing
-----------------------------------------------------------------
Valentine Hilaire of Bloomberg Law reports that Brazilian airline
Gol is preparing to file an initial plan for its Chapter 11
restructuring, according to a company filing. The plan is a key
step in Gol's financial overhaul, the company stated.
According to Bloomberg, Gol plans to reduce its debt by converting
or eliminating more than $1 billion in obligations. Gol also aims
to raise up to $1.85 billion in new capital to enhance its
liquidity.
Abra, the airline's largest secured creditor, has agreed to accept
approximately $950 million in new equity and $850 million in
take-back debt, the report states.
About Gol Linhas
GOL Linhas Aereas Inteligentes S.A. provides scheduled and
non-scheduled air transportation services for passengers and cargo;
and maintenance services for aircraft and components in Brazil and
internationally. The company offers Smiles, a frequent-flyer
program 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.
GREENWAVE TECHNOLOGY: Reda, SEG Opportunity No Longer Own Shares
----------------------------------------------------------------
Joseph Reda and SEG Opportunity Fund, LLC disclosed in a Joint
Schedule 13G/A Report filed with the U.S. Securities and Exchange
Commission that as of September 30, 2024, they ceased to be the
beneficial owner of more than 5 percent of Greenwave Technology
Solutions, Inc.'s Common Stock.
A full-text copy of Joseph Reda's SEC report is available at:
https://tinyurl.com/835ut947
About Greenwave
Headquartered in Chesapeake, Va., Greenwave Technology Solutions,
Inc. -- https://www.greenwavetechnologysolutions.com/ -- is an
operator of 13 metal recycling facilities in Virginia, North
Carolina, and Ohio. The Company's recycling facilities collect,
classify, and process raw scrap metal (ferrous and nonferrous). The
Company provides metal recycling services to a wide range of
suppliers, including large corporations, industrial manufacturers,
retail customers, and government organizations.
New York, N.Y.-based RBSM LLP, the Company's auditor since 2017,
issued a "going concern" qualification in its report dated April
16, 2024, citing that the Company has net loss, has generated
negative cash flows from operating activities, has an accumulated
deficit and has stated that substantial doubt exists about the
Company's ability to continue as a going concern.
As of Sept. 30, 2024, Greenwave had $69.57 million in total assets,
$18.30 million in total liabilities, and $51.27 million in total
stockholders' equity.
Greenwave reported a net loss of $26.94 million for the year ended
Dec. 31, 2023, compared to a net loss of $35.04 million for the
year ended Dec. 31, 2022.
H-FOOD HOLDINGS: U.S. Trustee Appoints Creditors' Committee
-----------------------------------------------------------
The U.S. Trustee for Region 7 appointed an official committee to
represent unsecured creditors in the Chapter 11 cases of H-Food
Holdings, LLC and its affiliates.
The committee members are:
1. Archer Daniels Midland Co.
4666 Faries Parkway
Decatur, IL 62526
Representative: Mark Speiser
mark.speiser@adm.com
2. Applied Products, Inc.
6035 Baker Rd.
Minnetonka, MN 55345
Representative: Lance Knapp
lknapp@appliedproducts.com
3. Bunge North America, Inc.
1391 Timberlake Manor Pkwy
Chesterfield, MO 63017
Representative: Gregory Zemaitis
greg.zemaitis@bunge.com
4. National Sugar Marketing
100 Galleria Pkwy, Ste 1400
Atlanta, GA 30339
Representative: Sara Crowder
scrowder@natsugar.com
5. PepsiCo, Inc.
1100 Reynolds Blvd.
Winston-Salem, NC 27105
Representative: Matthew Neibart
matthew.neibart@pepsico.com
6. U.S. Bank Trust Co., Indenture Trustee
333 Commerce St., Ste 900
Nashville, TN 37201
Representative: Donna L. Williams
donna.williams5@usbank.com
Official creditors' committees serve as fiduciaries to the general
population of creditors they represent. They may investigate the
debtor's business and financial affairs. Committees have the right
to employ legal counsel, accountants and financial advisors at a
debtor's expense.
About H-Food Holdings
H-Food Holdings, LLC, formerly known as Matterhorn Merger Sub, LLC,
was founded in 2009 in Grand Rapids, Mich. The company and its
affiliated debtors are a contract manufacturer of food products,
producing and supplying, among other things, nutrition bars, frozen
packaged foods, meal kits, snacks, sauces, refrigerated trays,
overwrap, custom packaging solutions, and more to customers. As the
largest food co-manufacturer in North America, the Debtors
manufacture some of the most valued and recognizable brands, and
the Debtors' key customers include many of the leading consumer
packaged goods customers in North America.
The Debtors filed Chapter 11 petitions (Bankr. S.D. Texas Lead Case
No. 24-90586) on Nov. 22, 2024, listing $1 billion to $10 billion
in both assets and liabilities. Robert M. Caruso, chief
restructuring officer, signed the petitions.
Judge Alfredo R. Perez presides over the cases.
The Debtors tapped Ropes & Gray, LLP as general bankruptcy counsel;
Porter Hedges, LLP as co-bankruptcy counsel; Evercore Group, LLC as
investment banker; and Alvarez & Marsal North America, LLC as
financial advisor.
HALL OF FAME: Net Loss Narrows to $4.4 Million in Fiscal Q3
-----------------------------------------------------------
Hall of Fame Resort & Entertainment Co. filed with the U.S.
Securities and Exchange Commission its Quarterly Report on Form
10-Q reporting a net loss of $4,420,330 on $7,501,626 of total
revenue for the three months ended September 30, 2024, compared to
a net loss of $16,164,352 on $8,744,829 for the three months ended
September 30, 2023.
For the nine months ended September 30, 2024, the Company reported
a net loss of $34,539,488 on $16,392,610 of total revenue, compared
to a net loss of $48,850,138 on $17,992,539 of total revenue for
the same period in 2023.
As of September 30, 2024, the Company had $435,640,564 in total
assets, $341,938,767 in total liabilities, and $93,701,797 in total
equity.
Liquidity and Going Concern
The Company has sustained recurring losses through September 30,
2024 and the Company's accumulated deficit was $252.0 million as of
such date. Since inception, the Company's operations have been
funded principally through the issuance of debt and equity. As of
September 30, 2024, the Company had approximately $2.6 million of
unrestricted cash and $4.9 million of restricted cash. During the
nine months ended September 30, 2024, the Company used cash for
operating activities of $7.1 million. The Company has approximately
$97.1 million of debt coming due through November 13, 2025,
including approximately $11.2 million of debt due December 4,
2024.
On September 27, 2024, the Company received a nonbinding proposal
from IRG related to a proposed acquisition of HOFV by IRG. In
response to the proposal, the Company's Board of Directors formed a
special committee made up of independent, disinterested directors
to evaluate the proposal. The Special Committee and IRG are
currently in discussions on this proposed acquisition.
On October 26, 2024, the Company received a notice of termination
due to event of default on its waterpark ground lease. Under the
waterpark ground lease, the notice of termination required that the
Company immediately surrender the waterpark premises and related
improvements to the landlord. The event of default under the
Waterpark Ground Lease results in an event of default under certain
of the Company's loan agreements. Given the Company's financial
position, the Company is in default or risks becoming in default
under certain other loan agreements. The loan agreements under
which the Company is in default total approximately $81 million
gross principal outstanding as of September 30, 2024.
The Company will need to raise additional financing to accomplish
its development plan and fund its working capital. The Company is
seeking to obtain additional funding through debt, construction
lending, and equity financing. There are no assurances that the
Company will be able to raise capital on terms acceptable to the
Company or at all. Cash flows generated from the Company's
operations are insufficient to meet its current operating costs. If
the Company is unable to obtain sufficient amounts of additional
capital, it may be required to reduce the scope of its planned
development, which could harm its financial condition and operating
results, or it may not be able to continue to fund or must
significantly curtail its ongoing operations. These conditions
raise substantial doubt about the Company's ability to continue as
a going concern to meet its obligations as they come due for the
next 12 months.
A full-text copy of the Company's Form 10-Q is available at:
https://tinyurl.com/mu4kpft5
About Hall of Fame Resort
Hall of Fame Resort & Entertainment Co. is a resort and
entertainment company leveraging the power and popularity of
professional football and its legendary players in partnership with
the National Football Museum, Inc., doing business as the Pro
Football Hall of Fame. Headquartered in Canton, Ohio, the Company
owns the DoubleTree by Hilton located in downtown Canton and the
Hall of Fame Village, which is a multi-use sports, entertainment,
and media destination centered around the PFHOF's campus.
HERTZ CORP: Faces Unpaid Interest Fight
---------------------------------------
Kevin Kingsbury of Bloomberg Law reports that Hertz bondholders are
pressing for immediate payment of approximately $320 million in
unpaid interest, citing fears that the company could delay payment
amid new financial challenges.
Their concerns are fueled by Hertz's weak performance and recent
financial actions, despite the company's claims of being
well-capitalized. A federal appeals court recently directed Hertz
to pay interest linked to its 2020 bankruptcy, but the company
plans to appeal the decision.
About Hertz Corp.
Hertz Corp. and its subsidiaries -- http://www.hertz.com/--
operate a worldwide vehicle rental business under the Hertz,
Dollar, and Thrifty brands, with car rental locations in North
America, Europe, Latin America, Africa, Asia, Australia, the
Caribbean, the Middle East, and New Zealand. They also operate a
vehicle leasing and fleet management solutions business.
On May 22, 2020, The Hertz Corporation and certain of its U.S. and
Canadian subsidiaries and affiliates filed voluntary petitions for
reorganization under Chapter 11 in the U.S. Bankruptcy Court for
the District of Delaware (Bankr. D. Del. Case No. 20-11218).
Judge Mary F. Walrath oversees the cases.
The Debtors have tapped White & Case LLP as their bankruptcy
counsel, Richards, Layton & Finger, P.A., as local counsel, Moelis
& Co. as investment banker, and FTI Consulting as financial
advisor. The Debtors also retained the services of Boston
Consulting Group to assist the Debtors in the development of their
business plan. Prime Clerk LLC is the claims agent.
The U.S. Trustee for Regions 3 and 9 appointed a Committee to
represent unsecured creditors in Debtors' Chapter 11 cases. The
Committee has tapped Kramer Levin Naftalis & Frankel LLP as its
bankruptcy counsel, Benesch Friedlander Coplan & Aronoff LLP as
Delaware counsel, UBS Securities LLC as investment banker, and
Berkeley Research Group, LLC, as financial advisor. Ernst & Young
LLP provides audit and tax services to the Committee.
* * *
Hertz Global and its subsidiaries emerged from Chapter 11
bankruptcy at the end of June 2021. Hertz won approval of a Plan of
Reorganization that unimpaired all classes of creditors (who are
legally deemed to have accepted it) and was approved by more than
97% of voting shareholders. The Plan provided for the existing
shareholders to receive more than $1 billion of value.
Recovery by shareholders of close to $8 a share was made possible
after a fierce competition among bidders for control in the
company. Initial offers from potential bidders for Hertz in its
bankruptcy offered nothing for equity. Hertz in May 2021 selected
investment firms Knighthead Capital Management LLC and Certares
Management LLC, joined by other investors including Apollo Global
Management Inc. and a group of existing shareholders, as the
winning bidders for control of the bankrupt company. A rival group
that included Centerbridge Partners LP, Warburg Pincus LLC and
Dundon Capital Partners LLC was outbid at auction.
Hertz's Plan eliminated over $5 billion of debt, including all of
Hertz Europe's corporate debt, and will provide more than $2.2
billion of global liquidity to the reorganized Company. Hertz also
emerged with (i) a new $2.8 billion exit credit facility consisting
of at least $1.3 billion of term loans and a revolving loan
facility, and (ii) an $7 billion of asset-backed vehicle financing
facility, each on favorable terms.
HERTZ CORP: Secured Notes Add-on No Impact on Moody's 'B2' CFR
--------------------------------------------------------------
Moody's Ratings said the add-on offering by The Hertz Corporation
of 12.625% first lien senior secured notes due 2029 with an
aggregate principal amount of $500 million does not affect the
ratings, including the B2 corporate family rating and the Ba3
rating of the existing 12.625% first lien senior secured notes due
2029. The negative outlook is also unaffected.
Hertz intends to use the proceeds from the issuance of the new
notes to repay outstanding borrowings under the first lien
revolving credit facility and for general corporate purposes.
The proceeds from the new first lien notes will augment Hertz'
liquidity at a time when the company continues to contend with
several challenges. The effect of the earnings enhancing plans to
address these challenges remains uncertain and protracted. Moody's
believe there is little cushion for missteps in the execution of
these plans, nor for Hertz to deal with any additional challenges.
The challenges facing the car rental sector are declining revenue
per day, very high depreciation on costly vehicles, and very high
interest expense. Notwithstanding management's heightened focus on
addressing these issues, Hertz will incur substantial losses in
2024. Moody's expect Hertz' pre-tax income margin to turn positive
in 2025, however, accelerated by lower vehicle depreciation
following a $1.0 billion asset impairment in the third quarter of
2024. Debt/EBITDA, calculated including vehicle debt, will exceed 5
times in 2024 before moderating to less than 5 times in 2025,
Moody's estimate.
Moody's expect liquidity to remain adequate (SGL-3). The aggregate
balance of unrestricted cash and availability under the first lien
revolving credit facility was $1.6 billion as of September 30,
benefiting from $1 billion in aggregate gross proceeds from the
first lien senior secured notes and exchangeable senior secured
second lien secured PIK notes issued in June. Hertz also had $2.5
billion of remaining borrowing capacity to fund new vehicles as of
September 30, excluding the capacity under the first lien revolving
credit facility.
The Hertz Corporation is one of the world's leading car rental
companies, operating under the Hertz, Dollar and Thrifty brands.
Revenue was $9.2 billion in the last 12 months ended September 30,
2024.
HILLVIEW LLC: U.S. Trustee Unable to Appoint Committee
------------------------------------------------------
The U.S. Trustee for Region 21 disclosed in a court filing that no
official committee of unsecured creditors has been appointed in the
Chapter 11 case of Hillview, LLC.
About Hillview LLC
Hillview, LLC filed Chapter 11 bankruptcy petition (Bankr. N.D. Ga.
Case No. 24-61747) on November 4, 2024, with $1 million to $10
million in assets and $10 million to $50 million in liabilities.
Judge Jeffery W. Cavender oversees the case.
The Debtor tapped Jones & Walden, LLC as legal counsel.
HISTOGEN INC: Updates Equity Interests Claims Pay
-------------------------------------------------
Histogen Inc. submitted an Amended Subchapter V Plan, with
technical modifications, dated November 7, 2024.
This Plan provides for a liquidation of Histogen and its assets for
the benefit of Holders of Allowed Claims and Equity Interests.
Through this Plan, Histogen will establish a Winddown Debtor,
administered by the Plan Administrator, into which will flow: (i)
all Cash; (ii) the Retained Causes of Action; and (iii) all other
Residual Assets.
Histogen is also involved in litigation with Connie Harrell and her
d/b/a, Syndicated Resources, that has been pending since August of
2018. On September 27, 2024, Harrell moved for relief from the
automatic stay, requesting that the automatic stay be lifted to
allow her to proceed in the state court litigation. The Debtor
strongly opposes this request and will file an opposition in due
course.
In the event the Harrell Claim is allowed in a material amount,
currently estimated at an amount greater than approximately $1.9
million, this may result in reduced or no amounts available for
distribution to Holders of Equity Interests. For the avoidance of
doubt, no Distributions shall be made on account of Allowed General
Unsecured Claims or Allowed Equity Interests until the Harrell
Claim is resolved by Final Order.
Class 3 consists of General Unsecured Claims. Class 3 is Impaired
under the Plan.
* Treatment A. In the event the amount of the all Allowed
General Unsecured Claims, including the Harrell Claim, exceeds the
amount of all GUC Available Cash, on the first Distribution Date or
on the next Distribution Date following the date the Claim becomes
an Allowed General Unsecured Claim, each Holder of an Allowed
General Unsecured Claim shall receive Cash its Pro Rata Share of
GUC Available Cash without interest, except to the extent that the
Holder of the Allowed General Unsecured Claim agrees to payment on
deferred or other, less favorable terms.
* Treatment B. In the event the amount of all Allowed General
Unsecured Claims, including the Harrell Claim, is less than the
amount of all GUC Available Cash, on the first Distribution Date or
on the next Distribution Date following the date the Claim becomes
an Allowed General Unsecured Claim, each Holder of an Allowed
General Unsecured Claim shall receive Cash in the full amount of
such General Unsecured Claim, with interest from the Petition Date
at the Contract Rate, except to the extent that the Holder of the
Allowed General Unsecured Claim agrees to payment on deferred or
other such terms.
Class 4 consists of Equity Interests.
* Treatment A. Impaired under the Plan. In the event Treatment
A applies to Class 3 General Unsecured Creditors, all Equity
Interests shall be discharged, cancelled, released, and
extinguished, without any distributions to Holders.
* Treatment B. Unimpaired under the Plan. In the event
Treatment B applies to Class 3 General Unsecured Creditors, each
holder of an Allowed Equity Interest shall receive one or more
Distributions on a Distribution Date, as determined by the Plan
Administrator, in an amount equal to its Pro Rata Share of the
Available Cash remaining after payment of Allowed Claims in Classes
1, 2, and 3, Allowed Administrative Claims (including Allowed
Professional Fee Claims), and Allowed Priority Tax Claims.
The source of funds to achieve Consummation and to carry out the
Plan shall be the Available Cash, the Reserves, and any Residual
Assets.
A full-text copy of the Amended Subchapter V Plan dated November 7,
2024 is available at https://urlcurt.com/u?l=3ub0WF from
PacerMonitor.com at no charge.
Counsel to the Debtor:
Eric D. Goldberg, Esq.
DLA Piper LLP (US)
2000 Avenue of the Stars
Suite 400 North Tower
Los Angeles, CA 90067-4735
Telephone: (310) 595-3000
Facsimile: (310) 595-3300
Email: eric.goldberg@us.dlapiper.com
david.riley@us.dlapiper.com
About Histogen Inc.
Histogen Inc. is engaged in the research and development of
regenerative medicine.
The Debtor filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. S.D. Calif. Case No. 24-01357) on April 18,
2024, with $3,625,752 in assets as of January 31, 2024 and $207,344
in liabilities as of January 31, 2024. David M. Maggio, chief
executive officer, signed the petition.
The Debtor tapped Eric D. Goldberg, Esq. and David M. Riley, Esq.
at DLA PIPER LLP (US) as bankruptcy counsel; and ARMANINO LLP as
financial advisor.
HISTORIC TIMBER: Gets Court OK to Use Cash Collateral Until Jan. 17
-------------------------------------------------------------------
Historic Timber & Plank, Inc. received third interim approval from
the U.S. Bankruptcy Court for the Southern District of Illinois to
use the cash collateral of its secured creditors to pay its
operating expenses.
The interim order approved the use of cash collateral of the
Internal Revenue Service and First Bank of the Lake for the period
from Nov. 15, 2024 to Jan. 17, 2025.
Historic Timber & Plank must strictly adhere to the approved
budget, and any non-compliance or default could terminate its right
to use cash collateral.
The IRS holds tax liens totaling $352,175, while FBOL is owed
around $5.24 million under a promissory note secured by the
company's assets.
To protect the secured creditors, the court granted them
replacement liens on post-petition assets and ordered the company
to make monthly payments of $4,000 to FBOL.
The next hearing is scheduled for Jan. 16.
About Historic Timber & Plank
Historic Timber & Plank, Inc., a company in Jerseyville, Ill.,
filed Chapter 11 petition (Bankr. S.D. Ill. Case No. 24-30423) on
June 28, 2016, with $500,001 to $1 million in assets and $1 million
to $10 million in liabilities. Joseph Adams, president of Historic
Timber & Plank, signed the petition.
Judge Laura K. Grandy oversees the case.
Desai Law Firm, LLC serves as the Debtor's bankruptcy counsel.
INFINERA CORP: Ramya Rao Holds 6.05% Equity Stake
-------------------------------------------------
In a Schedule 13G filed with the U.S. Securities and Exchange
Commission, Ramya Rao reported beneficial ownership of 14,261,876
shares of Infinera Corp.'s common stock, representing 6.05% of the
shares outstanding.
A full-text copy of Barclays' SEC Report is available at:
https://tinyurl.com/49489ft6
About Infinera Corp.
Headquartered in Sunnyvale, Calif., Infinera Corp. --
www.infinera.com -- is a semiconductor manufacturer and global
supplier of networking solutions comprised of networking equipment,
optical semiconductors, software and services. The Company's
portfolio of solutions includes optical transport platforms,
converged packet-optical transport platforms, compact modular
platforms, optical line systems, coherent optical engines and
subsystems, a suite of automation software offerings, and support
and professional services. Leveraging its U.S.-based compound
semiconductor fabrication plant and in-house test and packaging
capabilities, the Company designs, develops and manufactures indium
phosphide-based photonic integrated circuits for use in its
vertically integrated, high-capacity optical communications
products.
Infinera reported a net loss of $25.21 million for the year ended
Dec. 30, 2023, compared to a net loss of $76.04 million for the
year ended Dec. 31, 2022. As of June 29, 2024, Infinera had $1.52
billion in total assets, $604.45 million in total current
liabilities, $660.42 million in long-term debt, $14.52 million in
long-term accrued warranty, $21.98 million in long-term deferred
revenue, $1.69 million in long-term deferred tax liability, $44.79
million in long-term operating lease liabilities, $39.38 million in
other long-term liabilities, and $131.59 million in total
stockholders' equity.
* * *
Egan-Jones Ratings Company, on September 18, 2024, maintained its
'CC' foreign currency and local currency senior unsecured ratings
on debt issued by Infinera Corporation.
INNOVATE CORP: Jefferies Entities Report 5.3% Stake
---------------------------------------------------
Jefferies LLC and Jefferies Financial Group Inc. disclosed in a
Schedule 13 filed with the U.S. Securities and Exchange Commission
that as of September 30, 2024, they beneficially owned 700,802
shares of Innovate Corp's Common Stock, representing 5.3% of the
13,261,379 shares of Common Stock of the Company outstanding as of
November 1, 2024 as reported in the Company's Form 10-Q filed with
the Securities and Exchange Commission on November 6, 2024.
Jefferies LLC may be reached at:
Michael J. Sharp
Executive Vice President, General Counsel and Secretary
520 Madison Ave.
New York, NY 10022
Tel: 212-460-1900
A full-text copy of Jefferies' SEC Report is available at:
https://tinyurl.com/yc885w9u
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
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.
Going Concern
As of November 6, 2024, there is substantial doubt about the
Company's ability to continue as a going concern within the next 12
months. According to the Company, the principal conditions leading
to this conclusion are the upcoming maturities of current debt at
certain of the Company's subsidiaries as well as from certain
cross-default provisions in the Company's Senior Secured Notes.
Based on these conditions, the Company may not be able to meet its
obligations at maturity and comply with certain cross-default
provisions under the Senior Secured Notes over the next 12 months.
The Company plans to alleviate these conditions through various
initiatives it is currently exploring, including refinancing the
debt at Broadcasting and DBMG, pursuing asset sales, and raising
additional capital. However, there can be no assurance that the
Company will have the ability to raise additional capital when
needed, be successful in any asset sales, or refinance its existing
debt, on attractive terms, or at all, nor any assurances that
lenders will provide additional extensions, waivers or amendments
in the event of future non-compliance with the Company's debt
covenants or other possible events of default. Further, there can
be no assurance that the Company will be able to execute a
reduction, extension, or refinancing of the debt, or that the terms
of any replacement financing would be as favorable as the terms of
the debt prior to the maturity date. There can be no assurance that
these plans will be successfully implemented or that they will
mitigate the conditions that raise substantial doubt about the
Company's ability to continue as a going concern. The inability to
refinance or extend the maturity of the current debt at the
Company's subsidiaries, or to raise sufficient cash to pay the debt
at maturity would have a material adverse effect on the Company's
financial condition and likely cause the price of the Company's
common stock to decline.
* * *
In May 2024, S&P Global Ratings lowered its Company 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 '2โฒ, 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.
INSEEGO CORP: Swings to $8.97 Million Net Income in Fiscal Q3
-------------------------------------------------------------
Inseego Corp. filed with the U.S. Securities and Exchange
Commission its Quarterly Report on Form 10-Q reporting a net income
of $8.97 million on $54.03 million of total revenue for the three
months ended September 30, 2024, compared to a net loss of $21.8
million on $41.36 million of total revenue for the three months
ended September 30, 2023.
For the nine months ended September 30, 2024, the Company reported
a net income of $5.14 million on $143.16 million of total revenue,
compared to a net loss of $31.85 million on $131.37 million of
total revenue for the same period in 2023.
During the previous two quarters, the Company had disclosed that
there was substantial doubt about its ability to continue as a
going concern within one year of the issuance dates of the
quarterly reports on Form 10-Q for those quarters, primarily as a
result of the outstanding balance and due date of the 2025
Convertible Notes. In performing this assessment for the current
quarter, taking into account the Company's liquidity position as a
whole, including the repurchases and exchanges of 2025 Convertible
Notes noted above, the liquidity anticipated to be provided from
the sale of the Telematics Business, and cash inflows expected to
be provided by its continuing operations, the Company has concluded
that there is no longer substantial doubt about the Company's
ability to continue as a going concern within the next 12 months.
"The third quarter had several positive, and meaningfully
transformative events for Inseego, operationally, strategically and
financially," said Phil Brace, Executive Chairman of Inseego. "The
closing of our convertible note restructuring and the announced
sale of our Telematics business have allowed us to deliver on our
commitment to improve the Company's capital structure. In addition,
our operating results in the quarter were the best they have been
in several years. Our focus now is on addressing our 5G pipeline
and continuing the trajectory as we develop new products and look
to drive long-term growth."
"We continue to be focused on driving stockholder value and are
pleased to have restructured 91% of our outstanding convertible
notes, meaningfully reducing debt and right-sizing the Company's
capital structure," Steven Gatoff, Chief Financial Officer of
Inseego, commented. "The $52 million in cash we anticipate
receiving from the closing of the sale of Telematics will add
additional liquidity and flexibility for the Company. On the
operational front, Q3 was a pivotal quarter in which we delivered a
big revenue quarter and generated strong Adjusted EBITDA and
Operating Cash Flow, along with positive GAAP Operating and Net
Income."
A full-text copy of the Company's Form 10-Q is available at:
https://tinyurl.com/4p4uem8b
About Inseego
San Diego, Calif.-based Inseego Corp. is into the design and
development of cloud-managed wireless broadband and intelligent
edge solutions.
As of September 30, 2024, the Company had $113.4 million in total
assets, $198.5 million in total liabilities, and $85.1 million in
total stockholders' deficit.
* * *
This concludes the Troubled Company Reporter's coverage of Inseego
Corp. until facts and circumstances, if any, emerge that
demonstrate financial or operational strain or difficulty at a
level sufficient to warrant renewed coverage.
INTERCEMENT BRASIL: Chapter 15 Case Summary
-------------------------------------------
Four affiliates that concurrently filed voluntary petitions for
relief under Chapter 15 of the Bankruptcy Code:
Debtor Case No.
------ --------
InterCement Brasil S.A. (Lead Case) 24-12291
Avenida das Nacoes Unidas
No. 12495, 13th Floor
Sao Paulo, Sao Paulo
04578-000
Brazil
InterCement Participacoes S.A. 24-12295
InterCement Financial Operations B.V. 24-12296
InterCement Trading e Inversiones S.A. 24-12297
8 San Vicente Street, Plant 6, Dept. 8
Bilbao, Vizcaya 48001
Spain
Business Description: InterCement is the largest cement producer
in Brazil that uses combustible alternatives
in its manufacturing process, contributing
to the reduction of greenhouse gas emissions
and to environmental sustainability. Today,
it has 15 production units distributed
across nine states: Alagoas, Bahia, Goias,
Mato Grosso do Sul, Minas Gerais, Paraiba,
Pernambuco, Rio Grande do Sul and Sao Paulo.
Chapter 15 Petition Date: December 9, 2024
Court: United States Bankruptcy Court
Southern District of New York
Judge: Hon. Martin Glenn
Foreign Representative: Antonio Reinaldo Rabelo Filho
Rua Barao da Torre, 550
Apt. 201, Ipanema
Rio de Janeiro, RJ 22411-002
Brazil
Foreign Proceeding: Case Number 1192002-34.2024.8.26.0100
pending in the 1st Bankruptcy and
Restructuring Court of Sao Paulo
Foreign
Representative's
Counsel: John K. Cunningham, Esq.
Thomas E. MacWright, Esq.
Ricardo M. Pasianotto, Esq.
WHITE & CASE LLP
1221 Avenue of the Americas
New York, New York 10020-1095
Tel: (212) 819-8200
Email: jcunningham@whitecase.com
tmacwright@whitecase.com
ricardo.pasianotto@whitecase.com
- and -
Richard S. Kebrdle, Esq.
Amanda Parra Criste, Esq.
Southeast Financial Center
200 South Biscayne Blvd., Suite 4900
Miami, Florida 33131
Tel: (305) 371-2700
Email: rkebrdle@whitecase.com
aparracriste@whitecase.com
- and -
Jason N. Zakia, Esq.
111 South Wacker Drive, Suite 5100
Chicago, Illinois 60606
Tel: (312) 881-5400
Email: jzakia@whitecase.com
Estimated Assets: Unknown
Estimated Debt: Unknown
Full-text copies of two of the petitions are available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/SBICN4Y/InterCement_Trading_e_Inversiones__nysbke-24-12297__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/R5QXNXI/InterCement_Brasil_SA_and_Antonio__nysbke-24-12291__0001.0.pdf?mcid=tGE4TAMA
INTRUM AB: Dec. 16, 2024 Disclosures & Plan Hearing Set
-------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Texas will
hold a combine hearing to approve the adequacy of the disclosure
statement explaining the Chapter 11 plan of reorganization of
Intrum AB and its debtor-affiliates, and confirm the Debtors'
Chapter 11 plan on Dec. 16, 2024, at 4:00 p.m. CT before the Hon.
Christopher M. Lopez, 515 Rusk Street, Houston, Texas 77002.
Objections to the approval of the disclosure statement and
confirmation of the Debtors' Chapter 11 plan, if any, is Dec. 12,
2024, at 4:00 p.m.
As reported by the Troubled Company Reporter on Nov. 19, 2024,
Swedish debt collector Intrum AB filed for Chapter 11 protection in
Houston, Texas, with a prepackaged plan of reorganization that
would extend maturities of debt owed to revolving lenders and
bondholders and grant bondholders 10% of the equity in the
company.
Intrum is one of Europe's largest credit management companies. The
Company serves more than 80,000 clients across 19 countries and
employs approximately 10,000 individuals across 22 countries. In
2022 alone, more than four million customers across Europe became
debt-free with the Company.
While Intrum AB's origins are in traditional debt collection on a
client's behalf, today the Company offers a wide range of
additional services thanks to development and the Company's
innovation and acquisitions. Through its servicing line of
business, the Company provides clients with tailored debt
collection strategies and solutions to maximize cash flow streams
from loans and other overdue receivables. The Company also offers
value-added services and alternative solutions prior to loans and
other receivables becoming overdue, including credit information
and analysis, data extraction, and accounts receivable services.
Through its portfolio investing line of business, the Company
purchases portfolios of loans and other overdue receivables at a
discount and then services those portfolios using its own debt
collection measures.
In the months leading up to the Petition Date, the Company faced
numerous challenges from the broader macroeconomic market. High
inflation, reduced access to capital markets, and a slowing
European economy all put downward pressure on the Company. European
central banks sharply increased interest rates to combat high
inflation, with the European Central Bank only beginning to cut
rates in June 2024. The combination of slow growth and high
inflation has placed significant stress on households and
businesses throughout Europe: "Stage 2" loans, or loans where
credit risk has increased significantly, were almost 60% higher in
2023 than compared to 2019. These challenges, in turn, negatively
impacted Intrum AB's business and led to market speculation
concerning Intrum AB's ability to repay its 2024 and 2025 debt
maturities.
In January 2024, Intrum AB announced that it would receive a
liquidity boost from a major sale of a portfolio of assets. The
markets, however, reacted negatively to the announcement of the
sale, and in February 2024 Intrum AB began experiencing a series of
downgrades by rating agencies. Following these events, Intrum AB's
share price also dropped significantly.
The Company recognized the significant risk of not being able to
address its debt liabilities on the capital markets, which fell in
successive years from 2024 through 2028 -- including $3.497 billion
in 2025 and 2026 alone -- and that its debt was jeopardizing the
future health of the Company.
To help address these challenges, in the second quarter of 2024
Intrum AB approached creditors regarding potential restructuring
transactions. It thereafter engaged in months of extensive, good
faith negotiations with two separate groups of creditors as well as
its lenders under its revolving credit facility (the "RCF"), and
discussions with an ad hoc group of its noteholders eventually
culminated on July 10, 2024, with entry into a Lock-Up Agreement
(the "Lock-Up Agreement") with beneficial holders of a majority by
principal amount of the notes issued by the Company.
Overwhelming Support for Plan
Given the extensive negotiations with its lenders in advance of the
Petition Date and significant lender support for the Restructuring,
the Debtors elected to pursue a prepackaged restructuring and have
entered these chapter 11 cases with a fully-solicited Plan.
Lenders holding 100% by principal amount of voting claims under the
RCF and holders of approximately 82% by principal amount of voting
claims under the Debtors' nine unsecured notes issuances have voted
to accept the Plan.
"I believe that the Plan will not only help stabilize the
reorganized Debtors' business in the near-term but will position
them to operate successfully and be competitive within their
industry in the long-term. As a result of the Plan, I believe the
Debtors will emerge from these Chapter 11 Cases as a stronger
enterprise, with a sustainable capital structure that is better
aligned with the Debtors' present and future operating prospects,"
Andres Rubio, CEO of Intrum AB said in the U.S. Court filing.
Prepetition Capital Structure
The Debtors have incurred funded debt through three primary types
of debt instruments: (i) the RCF; (ii) the Senior Secured Term Loan
Facility; and (iii) nine unsecured notes issuances. The aggregate
principal indebtedness as of the Petition Date is as follows:
Facility Principal Balance Outstanding
-------- -----------------------------
RCF $1.116 billion
Senior Secured Term Loan Facility $95 million
2025 Eurobonds $843 million
2026 Eurobonds $840 million
2027 Eurobonds $870 million
2028 Eurobonds $473 million
PPNs $79 million
SEK 1.1b 2025 MTNs $100 million
SEK 400m 2025 MTNs $36 million
SEK 1.25b 2025 MTNs $114 million
SEK 1b 2026 MTNs $91 million
--------------
Unsecured Notes (aggregate) $3.445 billion
--------------
Total $4.656 billion
Dissenting Bondholders
In March, Intrum AB announced that it hired Milbank LLP and
Houlihan Lokey to assist it in undertaking a review of its debt
capital structure.
Two bondholder groups formed: a group of short-dated bondholders
holding primarily 2024- and 2025-maturing notes represented by Weil
Gotshal & Manges LLP (the "Minority Ad Hoc Group"), and a group of
bondholders holding widely across Intrum AB's notes issuances
represented by Latham & Watkins LLP (the "Notes Ad Hoc Group").
Shortly thereafter, each of the Minority Ad Hoc Group and Notes Ad
Hoc Group shared two very different transaction proposals with
Intrum AB. With the Minority Ad Hoc Group, Intrum AB negotiated
the terms of a potential uptiering refinancing transaction that
would have refinanced the 2024 and/or 2025 notes on a secured
basis, using existing capacity under Intrum AB's notes indentures.
The potential transaction would have required Intrum AB to (i)
refinance the entirety of the 2025 notes maturities, (ii) obtain
consent from the lenders under the RCF, and (iii) deleverage,
through refinancing 2025 notes at a discount and/or buying back
longer dated notes maturities at a discount.
Negotiations with the Minority Ad Hoc Group ultimately stalled, as
Intrum AB reached an agreement in principle with the Notes Ad Hoc
Group and perceived that the likely benefits of the transaction on
the terms the Minority Ad Hoc Group was willing to offer did not
outweigh the significant complexity and risk of undertaking the
transaction.
With the Notes Ad Hoc Group, Intrum AB negotiated the terms of a
potential pari passu transaction, which ultimately resulted in the
Restructuring. Unlike the potential transaction with the Minority
Ad Hoc Group, the Restructuring addressed Intrum AB's entire
maturity profile and delivered deleveraging to the business by
capturing discount. It also benefitted from being a less complex
transaction, which Intrum AB perceived would improve its ability to
agree to a maturity extension with the RCF lenders and build broad
based support.
On July 10, 2024, Intrum AB entered into the Lock-Up Agreement with
beneficial holders of a majority by principal amount of the Notes
issued by Intrum AB. On the same day, the Lock-Up Agreement was
publicly launched via a website set up and maintained by Kroll
Issuer Services Limited, in its capacity as Information Agent.
Throughout May, June, July, and August, the Company also engaged in
negotiations with a group that collectively holds approximately 76%
of the total commitments under the RCF (the "RCF Steerco Group").
On August 15, 2024, the Company and a requisite majority of
consenting noteholders reached agreement with the RCF Steerco Group
on revised terms of the Restructuring; most notably, the revisions
included a contemplated reduction in total RCF commitments to $1.1
billion, a two-year maturity extension subject to certain springing
maturities, and adjustments to the payment waterfall and
application of proceeds with respect to the new money notes. The
parties' agreement was documented in an amendment and restatement
agreement to the Lock-Up Agreement.
Following the amendment and restatement to the Lock-Up Agreement,
the Company sought support from additional creditors, and as of the
Petition Date, lenders holding approximately 97% by value of the
total commitments represented by the RCF and 73% in principal
amount of the Notes have agreed to support the Restructuring and
vote to accept the Plan by executing the Lock-Up Agreement.
Despite the significant increase in creditor support during the
period from the signing of the initial Lock-Up Agreement in July
2024 until the signing of the amended and restated Lock-Up
Agreement in August 2024, two separate minority ad hoc groups of
Noteholders -- the Minority Ad Hoc Group and another group
represented by Ropes & Gray LLP -- have refused to support the
Restructuring and accede to the Lock-Up Agreement. Holdings of both
groups are understood to be primarily in the 2025 Eurobonds and
2025 MTNs. Notwithstanding months of good faith discussions with
these dissenting ad hoc groups to encourage their support of the
Restructuring, as of the date hereof, the dissenting groups have
not agreed to support the Restructuring and are not party to the
Lock-Up Agreement.
The concerns of the dissenting noteholders appear to be primarily
focused on the pari passu nature of the Restructuring as it relates
to the Debtors' notes issuances: regardless of maturity, pursuant
to the Plan each noteholder receives its pro rata share of the
exchange notes and noteholder equity allotment with no distinction
based on the various maturities. But the dissenting noteholders
have been unable to offer the Debtors an actionable restructuring
alternative compared to the Restructuring that enjoys such
broad-based support throughout the capital structure.
Accordingly, given the significant support for the Debtors'
restructuring, the Debtors elected to pursue a prepackaged
restructuring to maximize value by minimizing both the costs of
restructuring and the impact on the Debtors' businesses
Terms of Chapter 11 Plan
The Lock-Up Agreement and Plan contemplate, among other things: (i)
an approximately two-year extension of the RCF maturity to June 30,
2028 (subject to certain springing maturity rights) and a reduction
of the overall RCF from $1.962 billion to $1.116 billion
(equivalents) in exchange for certain fees, pricing increase, and
an enhanced collateral package; (ii) reinstatement of the Senior
Secured Term Loan; (iii) the exchange of all existing unsecured
notes issuances into second-lien exchange notes at a 10% discount
to face value with staggered maturity dates from 2027-2030 (each
existing unsecured notes issuance to be allocated proportionately
across each exchange notes maturity), in exchange for, among other
things, 10% of post-dilution equity and certain fees payable to
consenting noteholders; (iv) a fully-backstopped new money
injection of approximately EUR526 million ($573 million
equivalent)11 in new secured notes to be utilized for discounted
buy-backs; and (v) payment in full of all general unsecured
claims.
The Plan contemplates the following stakeholder recoveries:
* Each Holder of an Allowed RCF Claim will receive, in full and
final satisfaction, settlement, release and discharge of such Claim
its pro rata share of the SSRCF; provided, that notwithstanding the
foregoing, all Ancillary Facility Claims shall be Reinstated and
each Ancillary Facility shall continue in accordance with its terms
and constitute an ancillary facility under the SSRCF in accordance
with the terms of the SSRCF Credit Agreement. For the avoidance of
doubt, each Holder of an Ancillary Facility Claim shall retain its
rights and claims under the applicable Ancillary Facility;
* The Senior Secured Term Loan Claim will be Reinstated or
otherwise paid in full in cash;
* Each Holder of an Allowed Notes Claim will receive, in full
and final satisfaction, settlement, release, and discharge of such
Claims (i) its pro rata share of the Exchange Notes; and (ii) its
pro rata share of the Noteholder Ordinary Shares. Holders of
Allowed Notes Claims will also receive their pro rata share of the
Subscription Rights in accordance with the Lock-Up Agreement and
the Rights Offering Documents;
* Each Holder of an Allowed General Unsecured Claim will receive
either: (i) Reinstatement of such Allowed General Unsecured Claim;
or (ii) payment in full in cash on (a) the Effective Date, or (b)
the date due in the ordinary course of business in accordance with
the terms and conditions of the particular transaction giving rise
to such Allowed General Unsecured Claim;
* All Allowed Other Secured Claims and Allowed Other Priority
Claims will be rendered Unimpaired; and
* The Existing Equity Interests will be reinstated on the
Effective Date.
In connection with the Restructuring, it is also proposed that the
Company's corporate structure will be reorganized and all assets
and liabilities of Intrum AB hived down to newly created
subsidiaries of Intrum AB. Under the new structure, Intrum AB will
have no material functions other than acting as the entity with
listed shares. Intrum AB's direct subsidiary, Intrum Investments
and Financing AB ("HoldCo"), will become the borrower under the RCF
and the issuer of the new money notes and the exchange notes.
HoldCo's direct subsidiary, Intrum Group Operations AB ("MidCo"),
will assume all operational functions of the Company and become the
immediate parent of the rest of the group. As part of the Company
reorganization, it is also proposed that certain regulated entities
of the Company will be moved from their existing position in the
corporate structure to be held directly by MidCo, subject to
ongoing tax and regulatory analysis, and obtaining all necessary
regulatory approvals. The steps required to implement the Company
reorganization will be set out in a steps plan, agreed between the
Debtors, the Majority Participating Lenders and the Majority Core
Noteholder Company (as such terms are defined in the Disclosure
Statement).
About Intrum
Intrum AB is a provider of credit management services with a
presence in 20 markets in Europe. By helping companies to get paid
and supporting people with their late payments, Intrum leads the
way to a sound economy and plays a critical role in society at
large. Intrum has circa 10,000 dedicated professionals who serve
around 80,000 companies across Europe. In 2023, income amounted to
SEK 20.0 billion. Intrum is headquartered in Stockholm, Sweden and
publicly listed on the Nasdaq Stockholm exchange. On the Web:
http://www.intrum.com/
On November 15, 2024, Intrum AB and U.S. affiliate Intrum AB of
Texas LLC each filed a voluntary petition for the relief under
Chapter 11 of the United States Bankruptcy Code in the United
States Bankruptcy Court for the Southern District of Texas (Bankr.
S.D. Tex. Lead Case No. 24-90575) to seek confirmation of their
Prepackaged Reorganization Plan.
The cases are pending before the Honorable Christopher M. Lopez.
Milbank LLP and Porter Hedges LLP are serving as counsel in the
U.S. restructuring. Houlihan Lokey is the advisor to Intrum. Kroll
Issuer Services Limited is the information agent. Kroll
Restructuring Administration is the claims agent. Brunswick Group
is also serving as advisers to Intrum.
Latham & Watkins LLP and Latham & Watkins (London) LLP, and
Advokatfirmaet Schjodt AS, are advising a group of bondholders
holding widely across Intrum AB's notes issuances (the "Notes Ad
Hoc Group"). PJT Partners (UK) Limited is financial advisor to the
noteholder ad hoc group.
Weil Gotshal & Manges LLP is representing a group of short-dated
bondholders holding primarily 2024- and 2025-maturing notes
("Minority Ad Hoc Group").
Ropes & Gray LLP is representing another minority group of
bondholders.
Clifford Chance US LLP is counsel to the group that collectively
holds approximately 76% of the total commitments under the RCF (the
"RCF Steerco Group").
JOE'S AUTO: Unsecureds Will Get $7,500 per Year for 3 Years
-----------------------------------------------------------
Joe's Auto Service, Inc. filed with the U.S. Bankruptcy Court for
the Southern District of Indiana a Small Business Chapter 11 Plan
dated November 7, 2024.
Joe's Auto has been in operation since 2002. Joe's Auto owns and
operates two auto repair shops, one in Noblesville, Indiana, and
one in Carmel, Indiana.
Joe's Auto is owned by Joe Peil with a 50% interest and Laura Peil
with a 50% interest. Joe Peil and Laura Peil are husband and wife.
One of Joe's Auto's creditors froze Joe's Auto's bank accounts
prompting the emergency filing of this bankruptcy proceeding.
Class 5 consists of General Unsecured Claims. The General Unsecured
Claims shall receive an annual pro rata distribution of the
projected disposable income, which amount shall be deemed to be
$7,500.00 per year of the Debtor commencing on the first day of the
second month of the one-year anniversary date of the Effective Date
for a three-year term. The Debtor shall be entitled to retain any
amounts in excess of $7,500.00 per year as an operating capital
reserve.
Class 6 consists of Equity Holders. Joe Peil shall remain the sole
shareholder.
The source of funds used in this Plan for payments to creditors
shall be from the business operations of the Debtor. In addition,
Waterpoint Capital LLC shall actively seek to sell the real estate
with a lease back option for Joe's Auto to assist with cash flow.
A full-text copy of the Chapter 11 Plan dated November 7, 2024 is
available at https://urlcurt.com/u?l=eEDJmU from PacerMonitor.com
at no charge.
Attorneys for the Debtor:
David R. Krebs, Esq.
Hester Baker Krebs LLC
One Indiana Square, Suite 1330
Indianapolis, IN 46204
Tel: (317) 833-3030;
Fax: (317) 833-3031
Email: dkrebs@hbkfirm.com
About Joe's Auto Service
Joe's Auto Service, Inc., formerly known as Big O Tires,
specializes in brake repairs, diagnostic procedures, and tackling
automotive issues from battery problems. The company is based in
Noblesville, Ind.
Joe's Auto Service filed a petition under Chapter 11, Subchapter V
of the Bankruptcy Code (Bankr. S.D. Ind. Case No. 24-04264) on
August 9, 2024, with $500,000 to $1 million in assets and $1
million to $10 million in liabilities. Joe Peil, president, signed
the petition.
Judge Jeffrey J. Graham presides over the case.
David Krebs, Esq., at Hester Baker Krebs, LLC represents the Debtor
as legal counsel.
L.C.S. UNLIMITED: Bankr. Administrator Unable to Appoint Committee
------------------------------------------------------------------
The U.S. Bankruptcy Administrator for the Middle District of
Alabama disclosed in a filing that no official committee of
unsecured creditors has been appointed in the Chapter 11 case of
L.C.S. Unlimited, LLC.
About L.C.S. Unlimited
L.C.S. Unlimited, LLC filed Chapter 11 petition (Bankr. M.D. Ala.
Case No. 24-32330) on Oct. 15, 2024, with $1 million to $10 million
in both assets and liabilities. The petition was signed by Lisa C.
Sweeney as member.
Judge Christopher L. Hawkins oversees the case.
Anthony B. Bush, Esq., at The Bush Law Firm, LLC is the Debtor's
bankruptcy counsel.
LA DELTA FARMS: Unsecureds to be Paid in Full in Plan
-----------------------------------------------------
LA Delta Farms Oil Company, LLC, filed with the U.S. Bankruptcy
Court for the Eastern District of Louisiana a Plan of
Reorganization for Small Business dated November 7, 2024.
LA Delta Farms is a company that was formed by Ethan A. Miller in
January 2016 and began the active business of oil and gas
production in Lafourche and Jefferson Parishes, Louisiana on
September 30, 2016.
In July 2018, Delta Farms Oil filed lawsuits in Lafourche Parish,
Louisiana against the Dice Parties seeking to collect the monies
owed for unpaid lease operating expenses ("LOEs"), and it suspended
payments of revenue to them as specifically permitted by the
applicable Joint Operating Agreement.
In response, the Dice Parties filed a series of Reconventional
Demands asserting that they had been overcharged by the Operator,
Delta Farms Oil, on the LOEs and further asserted a number of false
claims of fraudulent activity on the part of Delta Farms Oil and
its principal officer Ethan Miller.
The State Court Litigation dragged on for 6 years, with numerous
failed attempts at settlement. The cost of defending the State
Court Litigation exhausted all of Delta Farms Oil's cash reserves,
forcing it to file Chapter 11 Petition on August 9, 2024.
The Debtor will fund the Plan payments from multiple sources, which
includes the sale of assets, collection of the Escrow Funds, and
revenue from the BP 24 well once it is completed.
Class 1 consists of Unsecured Claim of Royalty Owner. To the extent
funds are available from the liquidation of Assets and revenue,
after the Administrative Claims and Priority Tax Claims are paid in
full, the Debtor shall pay the Class 1 Royalty Owners Claims in
full on the Effective Date or thereafter when funds become
available. Class 1 Royalty Owner Claim shall mean a claim made by
the owner of an overriding royalty interest in an oil and gas well
in which the Debtor is or was the operator for payment of a portion
of the revenue collected by the Debtor and due to the claimant.
Class 2 consists of Unsecured Claims of Vendors. To the extent
funds are available from the liquidation of Assets and revenue,
after the Administrative Claims, Priority Tax Claims, and Class 1
Claims are paid in full, the Debtor shall pay the Class 2 claims in
full on the Effective Date or thereafter when funds become
available. The balance remaining on any claims in Class 2 after
three years from the Effective Date shall not be paid.
Class 3 consists of all non-priority unsecured claims in an amount
of less than $500 (Convenience Class). This Class shall receive
pro-rata portion of $2,500 to be paid on the Effective Date. Class
3 is impaired.
Class 4 consists of all non-priority unsecured claims. To the
extent funds are available from the liquidation of Assets and
revenue, after the Administrative Claims, Priority Tax Claims,
Class 1 Claims, and Class 2 Claims are paid in full, the Debtor
shall pay the Class 4 claims in full on the Effective Date or
within three years of the Effective Date when funds become
available. The balance remaining on any claims in Class 4 after
three years from the Effective Date shall not be paid. This Class
is impaired.
Class 5 equity security holder, which consists solely of Mr. Ethan
Miller, will not be impaired by this Plan. The Class 5 equity
security holder will continue to own 100% of the reorganized
Debtor.
This Plan will be funded by the liquidation of the Debtor's assets,
collection of the Escrow Funds, and revenue received from the
completion of the BP 24 Well. The Debtor anticipates that Mr.
Miller, who is an insider of the Debtor, will continue in his
position as sole member and manager of the Debtor. No compensation
will be paid to Mr. Miller.
A full-text copy of the Plan of Reorganization dated November 7,
2024 is available at https://urlcurt.com/u?l=gRtMsI from
PacerMonitor.com at no charge.
About LA Delta Farms Oil Company
LA Delta Farms Oil Company LLC is part of the crude petroleum
extraction industry.
LA Delta Farms Oil Company LLC sought relief under Subchapter V of
Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D. La. Case No.
24-11550) on August 9, 2024. In the petition filed by Ethan A.
Miller, as president/manager, the Debtor reports estimated assets
and liabilities between $1 million and $10 million each.
The Honorable Bankruptcy Judge Meredith S. Grabill oversees the
case.
The Debtor is represented by:
Frederick Bunol, Esq.
THE DERBES LAW FIRM, LLC
3027 Ridgelake Drive
Metairie LA 70002
Tel: 504-207-0908
Email: fbunol@derbeslaw.com
LEARNINGSEL LLC: Lane & Nach Updates List of Creditors
------------------------------------------------------
Adam B. Nach, principal of the law firm of Lane & Nach, PC, filed a
second verified statement pursuant to Rule 2019 of the Federal
Rules of Bankruptcy Procedure to disclose that in the Chapter 11
cases of LearningSEL LLC and affiliates, the firm represents the
following creditors:
1. Mark T. Greenberg;
2. Carol A. Kusche;
3. Rebecca Cortes; and
4. Celene Domitrovich
At the time of the filing of the Petition initiating this case, the
Debtors were indebted, and continue to be indebted to the
Creditors.
Lane & Nach, PC is representing the Creditors in these jointly
administered proceedings.
The law firm can be reached at:
LANE & NACH, P.C.
Adam B. Nach, Esq.
Helen K. Santilli, Esq.
2001 E. Campbell Avenue, Suite 103
Phoenix, AZ 85016
Telephone No.: (602) 258-6000
Facsimile No.: (602) 258-6003
Email: adam.nach@lane-nach.com
Email: helen.santilli@lane-nach.com
About LearningSEL LLC
LearningSEL LLC is a provider of Social and emotional learning
training and professional development services.
LearningSEL LLC sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Ariz. Case No. 24-07015) on August 23,
2024. In the petition filed by Anna-Lisa Mackey, as manager, the
Debtor reports total assets of $703 and total liabilities of
$1,543,051.
The Honorable Bankruptcy Judge Paul Sala oversees the case.
The Debtor is represented by:
D. Lamar Hawkins, Esq.
GUIDANT LAW, PLC
402 E. Southern Ave
Tempe, AZ 85282
Tel: 602-888-9229
Email: lamar@guidant.law
LINEAR COMPANIES: Voluntary Chapter 11 Case Summary
---------------------------------------------------
Debtor: Linear Companies, LLC
d/b/a Linear Investments LLC
d/b/a Linear Investments AZ LLC
7129 E. 6th Avenue
Scottsdale, AZ 85251
Business Description: Linear Companies is primarily engaged in
renting and leasing real estate properties.
Chapter 11 Petition Date: December 9, 2024
Court: United States Bankruptcy Court
District of Arizona
Case No.: 24-10532
Judge: Hon. Eddward P Ballinger Jr.
Debtor's Counsel: Randy Nussbaum, Esq.
SACKS TIERNEY P.A.
4250 N Drinkwater Blvd.
4th Floor
Scottsdale, AZ 85251-3693
Tel: 480-425-2600
Email: Randy.Nussbaum@SacksTierney.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Sean Parsons as 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/MIPR6HI/Linear_Companies_LLC__azbke-24-10532__0001.0.pdf?mcid=tGE4TAMA
LIQTECH INTL: All Four Proposals Approved at Annual Meeting
-----------------------------------------------------------
LiqTech International, Inc. held its annual meeting of stockholders
where 4,803,118 shares of the Company's common stock, par value
$0.001 per share, were present or represented by proxy at the
Annual Meeting, representing approximately 82% of the outstanding
Common Stock as of September 18, 2024, the record date for the
Annual Meeting.
At the Annual Meeting, four proposals were submitted for a vote of
the Company's stockholders:
Proposal No. 1: The stockholders Approved the election of Alexander
Buehler, Fei Chen, Peyton Boswell, Richard Meeusen, and Martin Kunz
for terms until the next succeeding annual meeting of stockholders
or until such directors' successor shall have been duly elected and
qualified.
Proposal No. 2: The stockholders ratified Sadler, Gibb &
Associates, LLC as the Company's independent registered accounting
firm.
Proposal No. 3: The stockholders voted to approve the issuance of
(i) 4,415,471 shares of Common Stock (or pre-funded warrants to
purchase shares of Common Stock in lieu thereof) and (ii) warrants
exercisable for 4,415,471 shares of Common Stock in the second
closing contemplated by the securities purchase agreement dated
September 27, 2024 by and among the Company and certain investors
party thereto.
Proposal No. 4: The stockholders voted to approve, on a non-binding
advisory basis, the compensation to the Company's named executive
officers.
About LiqTech International
Ballerup, Denmark-based LiqTech International, Inc. is a clean
technology company that provides state-of-the-art gas and liquid
purification products by manufacturing ceramic silicon carbide
filters and membranes as well as developing industry-leading and
fully automated filtration solutions and systems.
Draper, Utah-based Sadler, Gibb & Associates, LLC, the Company's
auditor since 2018, issued a "going concern" qualification in its
report dated March 21, 2024, citing that the Company has suffered
recurring losses from operations and has a net capital deficiency
that raises substantial doubt about its ability to continue as a
going concern.
Net loss for the year ended December 31, 2023 was $8,571,145
compared to $14,169,107 for the same period in 2022. As of June 30,
2024, LiqTech had $28,579,302 in total assets, $16,305,054 in total
liabilities, and $12,274,248 in total stockholders' equity.
LJB LLC: Court Extends Use of Cash Collateral to Dec. 20
--------------------------------------------------------
A U.S. bankruptcy judge overseeing the Chapter 11 case of LJB, LLC
extended the company's use of cash collateral from Dec. 4 to Dec.
20.
Judge Janet Bostwick of the U.S. Bankruptcy Court for the District
of Massachusetts authorized the company to use its secured
creditors' cash collateral until Dec. 20 to pay its expenses,
including maintenance fees, utility fees, and property and
liability insurance.
The expenses must be limited to the amount set forth in the
company's projected budget, subject to no more than a 10% variance,
according to the court order.
As adequate protection for any diminution in the value of their
collateral, secured creditors were granted replacement liens on
LJB's post-petition assets with the same priority as their
pre-bankruptcy liens.
The next hearing is scheduled for Dec. 17. Objections are due by
Dec. 16.
About LJB LLC
LJB LLC sought protection under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. D. Mass. Case No. 24-12236) on November 7, 2024, with
$1 million to $10 million in both assets and liabilities. Kenneth
L. Brown, manager, signed the petition.
Judge: Janet E Bostwick oversees the case.
Gary W. Cruickshank, Esq., represents the Debtor as legal counsel.
LL FLOORING: Cowen Financial Ceases 5% Ownership of Common Stock
----------------------------------------------------------------
Cowen Financial Products, LLC disclosed in a Schedule 13 filed with
the U.S. Securities and Exchange Commission that as of September
30, 2024, it ceased to be the beneficial owner of more than five
percent of LL Flooring Holdings, Inc.'s Common Stock.
Cowen Financial Products LLC may be reached at:
John Holmes
Chief Operating Officer
599 Lexington Ave.
New York, NY 10022
Tel: 646-562-1000
A full-text copy of Cowen Financial's SEC Report is available at:
https://tinyurl.com/3yc47zcv
About LL Flooring Holdings
LL Flooring Holdings, Inc. is a specialty retailer of flooring. The
company carries a wide range of hard-surface floors and carpets in
a range of styles and designs and primarily sells to consumers or
flooring-focused professionals.
LL Flooring and four of its affiliates sought relief under Chapter
11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 24-11680)
on August 11, 2024. In the petitions signed by Holly Etlin as chief
restructuring officer, LL Flooring disclosed total assets of
$501,117,025 and total debt of $416,298,035 as of July 31, 2024.
Judge Brendan Linehan Shannon oversees the cases.
The Debtors tapped Skadden, Arps, Slate, Meagher & Flom LLP as
counsel. Houlihan Lokey Capital Inc. serves as the Debtors'
investment banker, AlixPartners LLP acts as the Debtors' financial
advisor, and Stretto, Inc., acts as the Debtors' claims and
noticing agent.
LOS ANGELES KOREAN: Voluntary Chapter 11 Case Summary
-----------------------------------------------------
Debtor: Los Angeles Korean 1st Presbyterian Church Corporation
213 S. Hobart Blvd
Los Angeles CA 90
Business Description: The Debtor is a tax-exempt religious
organization.
Chapter 11 Petition Date: December 9, 2024
Court: United States Bankruptcy Court
Central District of California
Case No.: 24-20014
Judge: Hon. Sheri Bluebond
Debtor's Counsel: Matthew Sean Harrison, Esq.
PROMETHEUS CIVIC LAW
120 Vantis Drive, Suite 300
Aliso Viejo CA 92656
Tel: 949-436-4500
Email: matt@procivlaw.com
Estimated Assets: $10 million to $50 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by John J. Suh as pastor/director.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/QVXCBXI/Los_Angeles_Korean_1st_Presbyterian__cacbke-24-20014__0001.0.pdf?mcid=tGE4TAMA
MCCOY COUNSELING: Unsecureds Will Get 46.76% over 5 Years
---------------------------------------------------------
McCoy Counseling, LLC filed with the U.S. Bankruptcy Court for the
Eastern District of Arkansas a Combined Disclosure Statement and
Small Business Plan of Reorganization dated November 7, 2024.
The Debtor has been in business for a number of years and serves as
a healthcare business in North Little Rock, Arkansas and the
surrounding area. The Debtor provides counseling and wellness
services ancillary to such primary work.
The Debtor leases its building at 513 Main St., in North Little
Rock, Arkansas from Marvin Norman and intend to assume that lease
for continued operation. The Debtor also entered into a lease in
Little Rock post-petition and intends to continue such lease for
continued operations.
The Debtor has continued to operate since the filing of the Chapter
11 on January 23, 2024. Since filing, the Debtor has reduced some
pay to professionals, reduced its staff, and vacated the premises
at 5 leased locations.
This Plan provides for 7 classes and 5 subclasses for Class 1.
Unsecured creditors holding allowed claims will be paid $250,000,
which is 46.76% of allowed aggregated unsecured claims totaling
$535,701.02 over five years from the effective date of the Plan
with no interest.
Class 7 shall be paid consists solely of Debtor's timely filed
allowed general unsecured, non-priority, undisputed, non-insider,
claims in the estimated aggregate amount of $535,701.02 comprised
of the following: (a) $174,281.17 in favor of Black Olive Capital,
LLC; (b) $184,119.85 in favor of Specialty Capital, LLC; (c)
$177,300.00 in favor of John Boone. No other unsecured creditors
will participate in this distribution unless the Bankruptcy Court
orders otherwise.
Unsecured creditors holding allowed claims will be paid $50,000 per
year on a pro-rata basis for five years. Payments shall begin on
the first day of the ninth month following the effective date of
the Plan and shall be made yearly thereafter until five payments
are made. In the event sufficient cash flows are not available for
any given due date, distributions will be made as soon as possible
based on Debtor's cash flow, but a total distribution to this class
will be at total of $250,000 over 5 years. Payments will be made
once per year over the life of the Plan.
The Debtor will continue its current business operations and
payments will be made from cash flow from operations and/or future
income.
A full-text copy of the Combined Disclosure Statement and Plan
dated November 7, 2024 is available at
https://urlcurt.com/u?l=sz6AEJ from PacerMonitor.com at no charge.
Counsel to the Debtor:
Kevin P. Keech, Esq.
KEECH LAW FIRM, PA
2011 S. Broadway St.
Little Rock, AR 72206
Tel: (501) 221-3200
Fax: (501) 221-3201
Email: kkeech@keechlawfirm.com
About McCoy Counseling, LLC
McCoy Counseling, LLC is a marriage and family therapist.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D. Ark. Case No. 24-10180) on January 23,
2024. In the petition signed by Kellee McCoy, member, the Debtor
disclosed up to $500,000 in assets and up to $10 million in
liabilities.
Judge Phyllis M. Jones oversees the case.
Kevin P. Keech, Esq., at KEECH LAW FIRM, PA, represents the Debtor
as legal counsel.
MEG ENERGY: Fitch Affirms 'BB-' LongTerm IDR, Outlook Stable
------------------------------------------------------------
Fitch Ratings has affirmed MEG Energy Corporation's Long-Term
Issuer Default Rating (IDR) at 'BB-'. Fitch has also affirmed the
company's senior unsecured notes at 'BB-' with a Recovery Rating of
'RR4'. The Rating Outlook is Stable.
MEG's ratings reflect its improved credit metrics, material gross
debt reduction and below average refinancing risk with no bond
maturity until 2029. Fitch expects the company will generate
positive FCF over the forecast period. MEG's transport logistics
continue to improve with increased access to tidewater and global
markets with Trans Mountain Expansion (TMX) pipeline online, which
should lead to higher realized prices.
These positive factors are offset by exposure to potentially wide
and volatile West Texas Intermediate (WTI) -Western Canadian Select
(WCS) (WTI-WCS) price differential, lack of diversification and
higher capex uncertainty related to long-term emissions reduction
commitments. The company also faces a challenging regulatory
environment managed by Alberta and the Canadian federal
government.
The Stable Outlook reflects MEG's low leverage and solid liquidity
profile.
Key Rating Drivers
Strengthening Credit Metrics; Higher Distributions: In its
analysis, Fitch assumes MEG allocates 100% of FCF towards
shareholder returns in the form of share buybacks and a modest base
dividend in line with the company's stated capital allocation
objectives. The allocation strategy shifted to 100% of FCF to
shareholder returns after achieving the USD600 million net debt
target following early repayment of the 2027 notes in September
2024. Fitch expects EBTIDA leverage to remain below 1.0x through
the forecast period based on Fitch's current base case oil and gas
price assumptions.
While 100% of FCF will go to shareholder distributions, MEG has
announced a higher capex program over the next three years.
Management expects incremental production capacity improvement up
to 135,000 barrels per day (bbl/d) by 2030. Fitch believes the
successful execution of the production plans will spread fixed
costs over more barrels resulting in a lower breakeven.
Increased Exposure to Global Markets: MEG increased the portion of
its production that receives global pricing via the start-up of the
TMX pipeline, in addition to its existing 100,000 bbl/d committed
capacity on Flanagan South/ Seaway pipelines which transport to the
U.S. Gulf Coast (USGC) which should reflect a long-term premium
over the Western Canada market. Apportionment on the Enbridge
mainline which impacts capacity on Flanagan South/ Seaway pipelines
is expected to trend lower than historical highs through the
forecast, which should allow for a higher realized price.
The start-up of the TMX in 1H24 added 590,000 bpd of egress
capacity out of basin, with MEG having 20,000bbl/d of committed
capacity on the line. The additional capacity provides Canadian
west coast tidewater access with connectivity to eastern Asia and
the U.S. West Coast, where demand from refineries running Canadian
heavy crude should be robust. MEG is expected to have market
exposure with total blend sales volume of approximately 65% to the
USGC, 15% to the West Coast and the remainder to Edmonton/ U.S.
Midwest.
Tighter WCS Differentials: WCS differentials tightened in 3Q24,
declining to USD13.55/bbl from a peak of USD21.89 in 4Q23. Quality
differences linked to demand for competing sour and heavy grades
remain the key driver of the differential. Although TMX added
incremental transportation capacity, future incremental pipeline
capacity remains uncertain due to Federal environmental
regulations, potentially leading to provincial government
production quotas similar to 2018, creating additional project
deferrals and increased reliance on higher cost rail to move
production.
Uncertain Environmental Spending: Fitch will evaluate the credit
impact of additional spending on larger projects as details emerge.
Canada is a more demanding jurisdiction in terms of climate policy,
with carbon tax set to increase to CAD170/tonne by 2030 from
CAD80/tonne currently. Significant uncertainty surrounds long-term
spending for the Pathways Alliance, which previously aimed to
achieve net zero Scope 1 and 2 emissions for oil sands producers by
2050 through CCUS and other technologies. The passage of Bill C-59
adds uncertainty to the consortium's publicly announced plans.
Derivation Summary
MEG is a pure-play oil sands producer with 100% of production in
Canada. Baytex Energy Corp. (BB-/Stable) and Vermilion Energy Inc.
(BB-/Stable) are predominately Canadian producers with production
of 154 thousand barrels of oil equivalent per day (mboed; 86%
liquids) and 84.0mboed (44% liquids) respectively.
MEG has a higher oil cut and larger proved reserve base of 1.2
billion boe, significantly higher than Baytex's 410 million boe and
Vermilion's 268 million boe. MEG faces no near-term financing risk
and is not expected to borrow under its CAD600 million revolver. In
3Q24, MEG's netbacks of USD28 are higher than its peers' and are
100% heavy-oil exposed.
Baytex benefits from a diverse asset base, including Canadian heavy
and light oil and the relatively price-advantaged Eagle Ford shale
in Texas, leading to a netback of USD27.3/boe for 3Q24. Vermilion
gains from exposure to international oil and natural gas indices
with netbacks of USD22.60/boe for 3Q24.
MEG's low diversification in a single basin exposes it to
potentially volatile WTI-WCS price differentials and a lack of
vertical integration compared to larger Canadian oil sands
operators such as Cenovus Energy Inc. (BBB/Stable), Suncor Energy
Inc. (BBB+/Stable), and Canadian Natural Resources Limited (not
rated). However, MEG has substantial proved and probable reserves
and can greatly expand capacity if industry conditions are
favorable.
Compared to U.S. peers, MEG has over 30 years of 1P reserves and a
shallower decline rate of 10%-15%, resulting in lower capex to
sustain production. This is offset by higher production costs,
given additional steam and processing requirements, resulting in
lower cash netbacks.
Key Assumptions
- Base case WTI oil prices of USD75/bbl in 2024, USD65 in 2025,
USD60 in 2026, USD60 in 2027 and USD57 thereafter;
- WCS differential of USD16.00/bbl in 2024, which edges down to
USD14.00/bbl over the remainder of the forecast;
- Production declines slightly in 2025 due to the major planned
turnaround, followed by growth in the low single digits over
forecast period;
- Increase in blended sales receiving global pricing;
- Capex of CAD550 million in 2024, increasing to CAD650 million in
2025 before moderating to CAD600 million in outer year of the
forecast;
- The revolver and LOC facilities are refinanced in 2026;
- Net debt of USD600 million achieved in 2024, resulting in 100% of
FCF allocated to shareholder returns thereafter.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- A change in financial policy that weakens expected credit
metrics;
- Material reduction in liquidity or an inability to access debt
capital markets;
- Midcycle EBITDA leverage sustained above 3.0x;
- Prolonged dislocation in WTI-WCS price differentials.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Production growth resulting in average daily Bitumen production
sustained above 150,000 bbl/d;
- Improving relative cash netbacks through lower and sustainable
operating costs;
- Improved outlook on realized prices and differentials;
- Midcycle EBITDA leverage sustained below 2.0x.
Liquidity and Debt Structure
MEG had CAD158 million of cash on hand as of Sept. 30, 2024. The
credit facility consists of a CAD600 million revolver (undrawn) and
a CAD600 million LOC facility (CAD273 million in LOC's utilized)
with Export Development Canada, both maturing on Oct. 31, 2026.
There is no financial maintenance covenant unless the revolver is
drawn in excess of 50%, which would trigger a first-lien net
debt/EBITDA covenant of 3.5x or less. Fitch characterizes the
company's liquidity as strong due to visibility into free cash flow
generation and an undrawn revolver through its forecast.
On Sept. 30, 2024, a 5.875% senior unsecured note remains
outstanding with a balance of CAD810 million which matures in Feb.
2029.
Issuer Profile
MEG is a Canadian oil sands producer focused on sustainable in situ
oil development. Its 3Q24 production was 103,298 boepd. The company
owns a 100% interest in over 410 square miles of oil sands leases
in Alberta, including a steam-assisted gravity drainage oil sands
(SAGD) at the Christina Lake Project.
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
MEG has an ESG Relevance Score of '4' for GHG Emissions & Air
Quality, which reflects the more stringent regulatory environment
for oil and gas producers in Canada in emissions, as well as the
above average greenhouse gas emissions profile associated with oil
sands due to the additional extraction and upgrading processes in
production. The score also reflects uncertainties around the level
of long-term investment to achieve emissions targets.
Although MEG has a relatively favorable emissions profile among
steam assisted gravity drainage oil sands peers based on its low
steam-to-oil ratio, producers in the space, it nonetheless may be
more likely to be targeted by activists and regulators given its
prominence relative to other producers. This has a negative impact
on the credit profile and is relevant to the rating in conjunction
with other factors.
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Recovery Prior
----------- ------ -------- -----
MEG Energy Corp. LT IDR BB- Affirmed BB-
senior unsecured LT BB- Affirmed RR4 BB-
NUASIN NEXT: Moody's Puts 'Ba1' Rating Under Review for Downgrade
-----------------------------------------------------------------
Moody's Ratings has placed Nuasin Next Generation Charter School's
AKA Metropolitan Lighthouse Charter School (NY) Ba1 rating under
review for downgrade. Previously the outlook was positive. The
school has approximately $24.4 million of debt outstanding.
The rating is under review for downgrade as Moody's assess the
school's current financial condition in light of the school's
request for the consent of bondholders to waive the school's
noncompliance with the Net Income Available for Debt Service
requirement for fiscal 2024, as set forth in the covenant
agreement.
RATINGS RATIONALE
The review for downgrade will assess the cause and credit impact of
the school violating a financial covenant in fiscal 2024. Moody's
review will include an assessment of the likelihood and potentially
significant financial and operational impact of acceleration of
principal and interest, a potential remedy if bondholders do not
provide consent for the waiver, which is expected by the school to
be received by the end of December 2024. Moody's review will also
focus on governance, financial performance, liquidity, coverage,
and student demand as the school remains in a growth mode as it
expands. Moody's will also assess the school's budgeting, including
the fiscal 2025 budget which includes an additional deficit for
fiscal 2025. Management expects one-time unbudgeted funding
sources to offset the deficit, underscoring the financial
challenges ahead.
RATING OUTLOOK
Moody's review will consider the direct and ongoing financial
impacts of the school missing its net income available for debt
service targets fiscal 2024 due to a operating deficit and budgeted
deficit for fiscal 2025. Moody's will also incorporate the risk
that bondholders do not provide the waiver for noncompliance of the
bond covenant, resulting in acceleration of principal.
FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATING
A confirmation will be considered if Moody's believe there is not
likely to be a material change to the school's operating and
financial risks that could significantly impair its operating
performance, liquidity, coverage, and student demand.
FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATING
A downgrade will be considered under a range of circumstances
including deterioration of the school's financial profile resulting
from ongoing financial losses that result in declining coverage
levels, liquidity stress, or a weakened demand profile.
LEGAL SECURITY
The debt is secured by a loan agreement with the Institution. The
lease payments under the loan agreement are funded by the school's
revenues, excluding certain funds, defined as School Pledged
Revenues. The Bank of New York, acting as custodian and trustee,
manages these funds, ensuring a structured flow into designated
accounts for bond service. Additional security comes from a Debt
Service Reserve Fund, backed by the Charter School Finance
Partnership, LLC, and a mortgage on the school property, though the
property's value and environmental concerns near the site pose some
risk.
Covenants are weak and represent a negative credit factor. Notably,
debt service coverage is only sum sufficient if the school has at
least 90 days cash. If liquidity is below this level, debt service
coverage must be at least 1.1x. Failure of the school to achieve
Net Income Available for Debt Service equal to 1x coverage may
result in a declaration of an event of default and include
acceleration of bond principal and interest payments. The agreement
allows for additional bonds and indebtedness under certain
conditions. However, the structure for addressing potential
defaults, necessitating significant bondholder action or trustee
intervention, highlights the arrangement's credit risks.
PROFILE
Nuasin Next Generation Charter School, a public charter entity for
K-12 grades, started in 2010. Located in Highbridge, Bronx, New
York City, NY, it had 693 students FY 2024. The current charter,
authorized by the New York City Department of Education, Chancellor
of Education, expires on June 30, 2027. In New York, charters have
a maximum term of 5 years. The school aims to expand to another
facility and increase its student count to around 1,200 by 2030.
METHODOLOGY
The principal methodology used in this rating was US Charter
Schools published in April 2024.
OUR TOWN REALESTATE: Starts Subchapter V Bankruptcy Protection
--------------------------------------------------------------
On December 2, 2024, Our Town RealEstate LLC filed Chapter 11
protection in the Northern District of Georgia. According to court
filing, the Debtor reports between $1 million and $1 million in
debt owed to 1 and 49 creditors. The petition states that funds
will be available to unsecured creditors.
A meeting of creditors under Sec. 341(a) to be held on January 2,
2025 at 10:00 AM via Telephone conference. To attend, Dial
888-902-9750 and enter participation code 9635734.
About Our Town RealEstate LLC
Our Town RealEstate LLC is a limited liability company.
Our Town RealEstate LLC sought relief under Subchapter V of Chapter
11 of the U.S. Bankruptcy Code (Bankr. N.D. Ga. Case No. 24-62744)
on December 2, 2024. In the petition filed by Al McKeithan, as
manager, the Debtor reports estimated assets and liabilities
between $1 million and $10 million each.
Honorable Bankruptcy Judge Paul W. Bonapfel handles the case.
The Debtor is represented by:
Paul Reece Marr, Esq.
PAUL REECE MARR, P.C.
6075 Barfield Road, Suite 213
Sandy Springs, GA 30328-4402
Tel: (770) 984-2255
E-mail: paul.marr@marrlegal.com
PARTY EMPORIUM: Case Summary & 12 Unsecured Creditors
-----------------------------------------------------
Debtor: Party Emporium LLC
DBA The Party Place
FDBA The Party Depot
DBA Party Ventures LLC
7810 Rogers Ave.
Fort Smith, AR 72903
Chapter 11 Petition Date: December 7, 2024
Court: United States Bankruptcy Court
Western District of Arkansas
Case No.: 24-72049
Judge: Hon. Bianca M Rucker
Debtor's Counsel: Stanley V. Bond, Esq.
BOND LAW OFFICE
525 S. School Ave.
Suite 100
Fayetteville, AR 72701
Tel: 479-444-0255
Fax: 479-235-2827
Email: attybond@me.com
Total Assets: $390,191
Total Liabilities: $1,259,574
The petition was signed by Melody Sanford as managing member.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 12 unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/H6Z7PNQ/Party_Emporium_LLC__arwbke-24-72049__0001.0.pdf?mcid=tGE4TAMA
PEACHY ATHLETIC: Gets OK to Use Cash Collateral Until Dec. 19
-------------------------------------------------------------
Peachy Athletic, LLC received interim approval from the U.S.
Bankruptcy Court for the Middle District of Florida, Tampa Division
to use cash collateral until Dec. 19, marking the second extension
since the company's Chapter 11 filing in November.
The bankruptcy court on Nov. 13 issued its first interim order,
allowing the company to use cash collateral through Nov. 20 to pay
its operating expenses in accordance with its projected budget.
The first interim order granted creditors with an interest in cash
collateral a post-petition lien, with the same validity and
priority as their pre-bankruptcy liens.
The next hearing is set for Dec. 19.
About Peachy Athletic
Peachy Athletic, LLC sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. M.D. Fla. Case No. 24-06501) on November 1,
2024, with $100,001 to $500,000 in assets and $100,001 to $500,000
in liabilities.
Judge Roberta A. Colton oversees the case.
The Debtor is represented by:
Scott A. Stichter, Esq.
Stichter, Riedel, Blain & Postler, P.A.
110 E. Madison St., Suite 200
Tampa, FL 33602
Phone: (813) 229-0144
Email: sstichter.ecf@srbp.com
PEAK ACQUISITION: Public Sale Auction Slated for December 12
------------------------------------------------------------
Concentric Partners I LP, as lander under the credit agreement
dated Feb. 23, 2023, and as collateral agent for the purchaser
under the securities purchase agreement dated Dec. 30, 2022, or its
transferee, nominee, or assign, will offer for sale at public sale
on Dec. 12, 2024, at 10:00 a.m. EST, at the offices of Smith,
Anderson, Blount, Dorsett, Mitchell & Jernigan LLP, 150
Fayetteville Street, Suite 2300, Raleigh, North Carolina 27601, all
of Peak Acquisition Inc., Peak Nutritional Products LLC, and Source
1 Supplements Inc. ("Debtors")'s right, title and interest.
Pursuant to (a) the pledge and security agreement dated Feb. 23,
2023, ("senior security agreement") and (b) the security agreement
dated Dec. 30, 2022 ("junior security agreement") ("security
agreement"), each Debtor granted the secured party a security
interest in all of its rights and interests in the collateral. The
Collateral secures the Debtors' obligations under the credit
agreement, securities purchase agreement, the security agreement,
and certain other loan documents. The Debtor are in default of the
of their obligations under the credit agreement and the securities
purchase agreement. As of Nov. 25, 2024, the aggregate outstanding
principal amount of the obligations under the credit agreement and
the securities purchase agreement is $10,235,000, excluding
applicable interest, fees, expense, costs and charges.
To be a qualified bidder, a prospective bidder must on or before
Dec. 11, 2024, at 5:00 p.m. EST, provide secured party with a cash
deposit, which may be paid via wire, in the form of a certified or
cashier's check or other form acceptable to secured party, in the
amount of $100,000 to serve as a nonrefundable earnest money
deposit. In addition to the foregoing requirements, the secured
party reserves the right to require that prospective bidder
demonstrate their ability to perform and close to the satisfaction
of the secured party to be a qualified bidder at the sale.
Any parties interested in bidding may obtain further information
about the sale by contacting counsel for the secured party:
Smith, Anderson, Blount, Dorsett,
Mitchell & Jernigan LLP
Attn: Brett M. Neve
150 Fayetteville Street
Suite 2300
Raleigh, NC 27601
Tel: (919) 821-6608
Email: bneve@smithlaw.com
PICCARD PETS: U.S. Trustee Unable to Appoint Committee
------------------------------------------------------
The U.S. Trustee for Region 21, until further notice, will not
appoint an official committee of unsecured creditors in the Chapter
11 case of Piccard Pets Supplies Corp, according to court dockets.
About Piccard Pets Supplies
Piccard Pets Supplies Corp., a company in Jacksonville, Fla.,
offers pet supplies and medications.
Piccard Pets Supplies sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. M.D. Fla. Case No. 24-02434) on Aug. 15,
2024, with total assets of $927,465 and total liabilities of
$5,323,839. Marlon Martinez, chief executive officer, signed the
petition.
Judge Henry W. Van Eck oversees the case.
The Debtor is represented by Thomas Adam, Esq., at Adam Law Group,
PA.
PRIME ELECTRICAL: Case Summary & 15 Unsecured Creditors
-------------------------------------------------------
Debtor: Prime Electrical Services, LLC
550 Holts Lake Court
Suite 102
Apopka, FL 32703
Business Description: Prime Electrical is a full service
electrical contractor operating in the
Southeastern United States and specializing
in the disciplines of commercial and
residential electrical installation,
industrial electrical processes, voice/data
and fire alarm systems.
Chapter 11 Petition Date: December 8, 2024
Court: United States Bankruptcy Court
Middle District of Florida
Case No.: 24-06663
Judge: Hon. Tiffany P Geyer
Debtor's Counsel: Jeffrey S. Ainsworth, Esq.
BRANSONLAW, PLLC
1501 E. Concord Street
Orlando, FL 32803
Tel: 407-894-6834
Email: jeff@bransonlaw.com
Total Assets: $256,996
Total Liabilities: $5,419,312
The petition was signed by Camell D. Williams as manager.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 15 unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/XAZHDEI/Prime_Electrical_Services_LLC__flmbke-24-06663__0001.0.pdf?mcid=tGE4TAMA
PROJECT ALPHA: Moody's Cuts Rating on Secured 1st Lien Debt to B2
-----------------------------------------------------------------
Moody's Ratings downgraded Project Alpha Intermediate Holding,
Inc.'s (Qlik) backed senior secured 1st lien bank credit facility
rating to B2 from B1. All other ratings, including the B2 corporate
family rating, have been reviewed in the rating committee and
remain unchanged. The outlook remains negative. Qlik upsized its
initially communicated 1st lien debt by $100 million and downsized
its proposed 2nd lien debt by the same amount. The change in the
1st lien bank credit facility rating to B2, pari to the CFR,
reflects the fact that the 1st lien debt will now make up a
majority of the debt capital structure, with less subordinated debt
cushion.
RATINGS RATIONALE
The B2 CFR reflects the company's high financial leverage, narrow
scope of products within the competitive business intelligence and
analytics (BIA) as well as data integration markets, and challenges
of converting existing perpetual license users to subscription
licenses. Qlik competes against large and well capitalized firms
with superior distribution and bundling capabilities including
Microsoft, SAP, and Salesforce (Tableau). Moody's expect that Qlik
will continue to deploy aggressive financial policies as a private,
controlled company.
Qlik benefits from an increasingly recurring revenue profile and
good geographic diversity. The company's solutions are consistently
regarded as a leader in the BIA market, which partially mitigates
the intense competitive pressures of the industry. With the Talend
acquisition in 2023, Qlik's scale and data integration capabilities
have also improved.
The negative outlook reflects the increase in leverage caused by
the November 2024 recapitalization transaction. September 2024 LTM
adjusted leverage increases to the mid 7x range pro forma for this
transaction from the mid 4x range (inclusive of Moody's standard
adjustments as well as addbacks for foreign exchange gains/losses,
purchase price accounting, and transaction/restructuring-related
costs). With good growth and execution of operating goals, the
company can delever to under 7x (Moody's adjusted), or toward 6x
(Moody's adjusted) when adding back estimated change in deferred
revenue and unbilled receivables. The negative outlook reflects the
risks to achieving this deleveraging, including execution risk to
upsell/cross sell, margin impact of potential cloud infrastructure
investments as the company expands its SaaS business, and potential
for further leveraging transactions. The increased debt and
interest burden apply pressure to cash generation, and Moody's now
expect the company to generate mid-single digit percent annual
FCF/Debt (Moody's adjusted) in 2026.
Qlik has good liquidity. Qlik has historically generated
consistently positive FCF, which Moody's expect to continue in 2024
after the successful integration of Talend (excluding the impacts
of the current transaction). Following the November 2024
recapitalization transaction, Qlik will have roughly $125 million
cash and full revolver availability. Moody's do not expect the
company to keep cash above $200 million for an extended period of
time as excess cash will likely be used for reinvestment into the
company and M&A activity.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Qlik's ratings could be upgraded if the company builds a track
record of conservative financial policies, sustains debt/ EBITDA
below 5x, and FCF/debt approaches 10%.
Qlik's ratings could be downgraded should the company's operating
performance weaken such that debt/ EBITDA remains above 6.5x or
FCF/debt is sustained below the mid-single digit range. In
addition, Qlik could face ratings pressure if liquidity
deteriorates or the company engages in actions characterized by a
significantly aggressive financial policy.
The principal methodology used in these ratings was Software
published in June 2022.
Qlik is a provider of business intelligence, data analytics, and
data integration solutions to over 30,000 unique customers
worldwide (inclusive of Talend). The Company's software products
help users integrate and harmonize disparate data streams to
improve analysis across different groups and lines of business
within an organization. The solutions are delivered on-premise via
term licenses or through the cloud as a Software-as-a-Service
(SaaS) solution. Qlik is wholly owned by private equity firm Thoma
Bravo following the take-private LBO in August 2016.
PRUDENTIAL ENTERPRISE: Seeks Chapter 11 Bankruptcy Protection
-------------------------------------------------------------
On December 2, 2024, Prudential Enterprise LLC filed Chapter 11
protection in the Northern District of Texas. According to court
filing, the Debtor reports between $10 million and $50 million in
debt owed to 1 and 49 creditors. The petition states that funds
will be available to unsecured creditors.
About Prudential Enterprise LLC
Prudential Enterprise LLC is a limited liability company.
Prudential Enterprise LLC sought relief under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. N.D. Tex. Case No. 24-50302) on
December 2, 2024. In the petition filed by George Castillo, as
managing member, the Debtor reports estimated assets between $1
million and $10 million and estimated liabilities between $10
million and $50 million.
The Debtor is represented by:
Max R. Tarbox, Esq.
TARBOX LAW, P.C.
2301 Broadway
Lubbock, TX 79401
Tel: (806) 686-4448
Fax: (806) 368-9785
E-mail: tami@tarboxlaw.com
PUERTO RICO: No Clear Solution to Reduce PREPA Debt
---------------------------------------------------
Michelle Kaske of Bloomberg News reports that mediators have
informed U.S. District Judge Laura Taylor Swain, overseeing Puerto
Rico's seven-year bankruptcy, that no clear solution has emerged
for reducing the debt of the island's power utility.
In a report filed Monday, December 9, 2024, the mediators stated
that recent negotiations have not produced an agreement on
restructuring $9 billion in debt owed by the Puerto Rico Electric
Power Authority or on establishing a framework for resolving
disputes. They cautioned that pursuing litigation at this stage
would likely lead to appeals and further delay the process, the
report related.
About Puerto Rico
Puerto Rico is a self-governing commonwealth in association with
the United States. The chief of state is the President of the
United States of America. The head of government is an elected
Governor. There are two legislative chambers: the House of
Representatives, 51 seats, and the Senate, 27 seats.
In 2016, the U.S. Congress passed PROMESA, which, among other
things, created the Financial Oversight and Management Board and
imposed an automatic stay on creditor lawsuits against the
government, which expired May 1, 2017.
The members of the oversight board are: (i) Andrew G. Biggs, (ii)
Jose B. Carrion III, (iii) Carlos M. Garcia, (iv) Arthur J.
Gonzalez, (v) Jose R. Gonzalez, (vi) Ana. J. Matosantos, and (vii)
David A. Skeel Jr.
On May 3, 2017, the Commonwealth of Puerto Rico filed a petition
for relief under Title III of the Puerto Rico Oversight,
Management, and Economic Stability Act ("PROMESA"). The case is
pending in the United States District Court for the District of
Puerto Rico under case number 17-cv-01578. A copy of Puerto Rico's
PROMESA petition is available at
http://bankrupt.com/misc/17-01578-00001.pdf
On May 5, 2017, the Puerto Rico Sales Tax Financing Corporation
(COFINA) commenced a case under Title III of PROMESA (D.P.R. Case
No. 17-01599). Joint administration has been sought for the Title
III cases.
On May 21, 2017, two more agencies -- Employees Retirement System
of the Government of the Commonwealth of Puerto Rico and Puerto
Rico Highways and Transportation Authority (Case Nos. 17-01685 and
17-01686) -- commenced Title III cases.
U.S. Chief Justice John Roberts named U.S. District Judge Laura
Taylor Swain to preside over the Title III cases.
The Oversight Board has hired as advisors, Proskauer Rose LLP and
O'Neill & Borges LLC as legal counsel, McKinsey & Co. as strategic
consultant, Citigroup Global Markets as municipal investment
banker, and Ernst & Young, as financial advisor.
Martin J. Bienenstock, Esq., Scott K. Rutsky, Esq., and Philip M.
Abelson, Esq., of Proskauer Rose LLP; and Hermann D. Bauer, Esq.,
at O'Neill & Borges LLC are onboard as attorneys.
Prime Clerk LLC is the claims and noticing agent. Prime Clerk
maintains the case Website https://cases.primeclerk.com/puertorico
Jones Day is serving as counsel to certain ERS bondholders.
Paul Weiss is counsel to the Ad Hoc Group of Puerto Rico General
Obligation Bondholders.
REALPAGE INC: Moody's Affirms 'B3' CFR, Outlook Stable
------------------------------------------------------
Moody's Ratings affirmed RealPage, Inc.'s B3 Corporate Family
Rating and B3-PD Probability of Default Rating. RealPage's senior
secured first lien term loan and senior secured first lien
revolving credit facility ratings were downgraded to B3 from B2. A
B3 rating was assigned to the company's proposed incremental senior
secured first lien term loan. The outlook for the company remains
stable.
Proceeds from the proposed $500 million incremental first lien term
loan will be used to repay $500 million of the company's second
lien term loan (unrated). The transaction is leverage neutral and
seeks to lower the company's overall interest cost.
The affirmation of the CFR reflects RealPage's continued revenue
growth, margin improvement and highly leveraged capital structure.
The downgrade of the company's senior secured first lien credit
facilities reflects the relative mix shift of first lien versus
second lien in the company's capital structure. The reduction in
second lien debt and increase in first lien secured, which reduces
junior debt capital, lowers recovery levels on the first lien
secured debt. Moody's expect the company to continue to reduce the
relative proportion of second lien debt relative to first lien
secured debt over time.
RATINGS RATIONALE
The company's B3 CFR reflects its growing and predictable revenues,
high Moody's adjusted leverage and propensity for debt funded
acquisitions. The rating also incorporates the company's exposure
to variable rate debt, the ongoing litigation and its concentrated
ownership. RealPage, a leader in the niche segment of software
solutions and data analytics for rental housing, generates a
sizable majority of its revenues from subscription services. The
company's leverage metrics are weak and its coverage ratio, on a
Moody's adjusted basis, has deteriorated because of its variable
rate debt.
The company is contending with lawsuits that allege one of its
revenue management products helps landlords collude to inflate
rents. The US DOJ has also launched an antitrust investigation to
analyze the product. The product in focus accounts for a small
portion of RealPage's revenues, however, prolonged public scrutiny,
adverse outcomes that could weaken its client relationships and
litigation costs are significant credit concerns.
The stable outlook reflects the expectation that operating income
will continue grow at a steady pace because of sustained demand for
RealPage's products and services, and that liquidity will remain at
about current levels.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if debt to EBITDA (Moody's adjusted)
is consistently below 7.0x, FCF/ Debt (Moody's adjusted) remains
comfortably above 5% and the company exhibits a more conservative
financial strategy.
The ratings could be downgraded if RealPage's revenue contracts
materially from current levels or if the company's FCF turns
negative. Adoption of a more aggressive financial policy or
material adverse litigation outcomes could also result in a
downgrade.
RealPage, Inc., headquartered in Richardson, Texas is a software
and data analytics company that provides solutions and services to
the multifamily real estate industry. The company was acquired by
the private equity firm Thoma Bravo in an LBO transaction in 2021.
The principal methodology used in these ratings was Software
published in June 2022.
RIVER SPRINGS: Moody's Upgrades Revenue Rating to Ba1
-----------------------------------------------------
Moody's Ratings has upgraded to Ba1 from Ba2 the revenue rating of
River Springs Charter School, CA. The outlook has been revised to
stable from positive. The charter school currently has
approximately $63 million in outstanding revenue debt.
The upgrade reflects the school's growing operating revenue and
enrollment.
RATINGS RATIONALE
The Ba1 rating reflects the school's steady growth in operating
revenue and student enrollment which is expected to continue to
contribute to satisfactory financial performance and competitive
considerations. The school's demand profile factors its large
service area in southern California (Aa2 negative) with favorable
demographics, along with its distinctive independent charter school
programmatic offerings which attracts students that are interested
in non-traditional school settings. The school's recent financial
performance has been significantly boosted by federal pandemic
relief aid as well as increases to state funding. Operating cash
flow margins have been sound, and annual debt service coverage is
healthy, though days cash on hand is weaker, currently around 80
days as of year-end fiscal 2024. Moody's credit view further
factors the school's history of charter renewals with its Riverside
County (Aa2 stable) authorizer, along with its moderate debt burden
and likely future borrowing plans.
RATING OUTLOOK
The stable outlook reflects the likelihood that the school's market
position will remain sound in coming years, while financial
performance will remain satisfactory despite the elimination of
federal COVID relief funding and potential stagnation of state
funding.
FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATINGS
-- Sustained improvement to competitive considerations including
enrollment growth, bolstering of student waitlist, and gains in
academic performance
-- Material strengthening of spendable liquidity, both nominally
and year-end days cash on hand
-- Significant moderation to the school's debt and overall
leverage
FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATINGS
-- Decline in demand factors, such as enrollment losses or
decreased academic performance
-- Significant narrowing of cash flow operating margin, days cash
on hand, or annual debt service coverage
-- Substantial increases in the school's debt and overall
leverage
LEGAL SECURITY
The school's outstanding rated Series 2017A bonds are payable from
the gross operating revenue of its charter school operations. With
bondholder consent, River Springs Charter School restructured its
Series 2017A revenue bonds on March 17, 2023 to access additional
funding through the State of California's Charter School Facility
Grant Program. Following the restricting the school now leases its
Bear River, Temecula, and Flabob facilities from River Springs
Facilities III LLC, which assumed all obligations related to the
deeds of trust on the Series 2017 facilities. Updated instructions
were provided to the State Controller's Office to make lease
payments directly to the collateral agent from the school's gross
revenue.
The Series 2017A bonds are parity obligations to the school's
Series 2022A&B, Series 2022C&D, and Series 2023A&B bonds (none of
which are rated by us). The Series 2017A and 2023A&B bonds are
additionally secured by Deeds of Trust on the financed facilities,
with a mortgage interest in the Bear River and Temecula Schools and
a leasehold interest in the Flabob Airport school site, which has a
ground lease running through March 31, 2051, one year before final
debt maturity in 2052.
PROFILE
River Springs Charter School operates under a countywide benefit
charter authorized by Riverside County, with its current charter
valid through June 30, 2025. The school runs 17 student centers,
offering flexible classroom, independent study, and homeschool
options for grades K-12. River Springs currently serves
approximately 7,700 students, with roughly two-thirds enrolled in
homeschool and Keys Independent Study programs. The remaining
students participate in a variety of combined classroom and
independent study programs.
METHODOLOGY
The principal methodology used in these ratings was US Charter
Schools published in April 2024.
S & W SALES: Sec. 341(a) Meeting of Creditors on Jan. 9
-------------------------------------------------------
On December 2, 2024, S & W Sales and Service LLC filed Chapter 11
protection in the Middle District of Georgia. According to court
filing, the Debtor reports between $1 million and $10 million in
debt owed to 50 and 99 creditors. The petition states that funds
will be available to unsecured creditors.
A meeting of creditors under Sec. 341(a) to be held on January 9,
2025 at 10:00 AM at U.S. Trustee Teleconference 2.
About S & W Sales and Service LLC
S & W Sales and Service LLC is a limited liability company.
S & W Sales and Service LLC sought relief under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. M.D. Ga. Case No. 24-51814) on
December 2, 2024. In the petition filed by Waldo Moody, as managing
member, the Debtor reports estimated assets between $500,000 and $1
million and estimated liabilities between $1 million and $10
million.
Honorable Bankruptcy Judge Robert M. Matson handles the case.
The Debtor is represented by:
Wesley J. Boyer, Esq.
BOYER TERRY LLC
348 Cotton Avenue, Suite 200
Macon, GA 31201
Tel: (478) 742-6481
Fax: (770) 200-9230
E-mail: Wes@BoyerTerry.com
SICHEM INC: Case Summary & Six Unsecured Creditors
--------------------------------------------------
Debtor: Sichem, Inc.
1602 East Main Street
Waxahachie, TX 75165
Chapter 11 Petition Date: December 9, 2024
Court: United States Bankruptcy Court
Northern District of Texas
Case No.: 24-44555
Debtor's Counsel: Robert T DeMarco, Esq.
DEMARCO MITCHELL, PLLC
500 N. Central Expressway Suite 500
Plano, TX 75074
Tel: (972) 991-5591
Email: robert@demarcomitchell.com
Estimated Assets: $100,000 to $500,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Ademola Oyerokun as president.
A full-text copy of the petition containing, among other items, a
list of the Debtor's six unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/VNPBHDI/Sichem_Inc__txnbke-24-44555__0001.0.pdf?mcid=tGE4TAMA
SOLCIUM SOLAR: Court OKs Interim Use of Cash Collateral
-------------------------------------------------------
Solcium Solar, LLC received interim approval from the U.S.
Bankruptcy Court for the Middle District of Florida, Orlando
Division, to use cash collateral until Dec. 12, marking the second
extension since the company's Chapter 11 filing in October.
The court issued its first interim order on Nov. 18.
The second interim order signed by Judge Grace Robson on Dec. 3
approved the use of cash collateral to pay the company's operating
expenses set forth in its projected budget.
Solcium Solar may deviate up to 10% from the line items in the
budget, according to the Dec. 3 order.
Secured creditors, if any, will be granted a post-petition lien on
the cash collateral to the same extent and with the same validity
and priority as its pre-bankruptcy lien.
The next hearing is scheduled for Dec. 12.
About Solcium Solar
Solcium Solar, LLC is a privately owned and operated solar energy
company specializing in residential solar solutions, commercial
solar solutions, EV solar solutions, and battery storage
solutions.
Solcium Solar sought relief under Subchapter V of Chapter 11 of the
U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No. 24-05611) on
October 18, 2024, with $100,000 to $500,000 in assets and $1
million to $10 million in liabilities. Aaron R. Cohen serves as
Subchapter V trustee.
Judge Grace E. Robson oversees the case.
The Debtor is represented by Scott W. Spradley, Esq., at The Law
Offices of Scott W. Spradley.
TALEN ENERGY: Fitch Alters Outlook on BB- LongTerm IDR to Negative
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Fitch Ratings has affirmed Talen Energy Supply's Long-Term Issuer
Default Rating (IDR) at 'BB-'. Fitch has also affirmed the 'BB+'
rating and 'RR1' Recovery Rating of the senior secured revolving
credit facility, the upsized term loan B (TL B), term loan C and
senior secured notes, and the 'BB-'/'RR4' rating on the senior
unsecured notes. The Rating Outlook is revised to Negative from
Stable.
The change in Outlook reflects Talen's aggressive financial policy
which involves funding a portion of its share buybacks with debt,
resulting in EBITDA leverage averaging 3.7x over the next four
years under Fitch's assumptions. Reduced geographic diversification
and size with the sale of the ERCOT portfolio, exposure to market
prices in a potentially volatile commodity price environment, and
operating risk associated with the nuclear generation assets are
additional credit concerns. Fitch could lower the rating of Talen
if leverage is above 3.5x starting in 2025.
Key Rating Drivers
Aggressive Financial Policy: In Fitch's view, management's decision
to upsize the TL B and use a significant portion of proceeds for
share buybacks demonstrates a more aggressive financial policy. The
incremental debt is unexpected as per Fitch's previous assumptions
given the company's operations in the volatile power generation
sector and emergence from bankruptcy roughly 18 months ago. Post
this buyback, Talen will have approximately $1.2 billion of
remaining capacity available under its share repurchase program
through 2026.
The company also received a waiver on its covenants, and did not
pay down a proportionate amount of debt upon the sale of the Texas
portfolio.
Higher Leverage: The incremental TL B adds significant leverage
under Fitch's base case resulting in EBITDA leverage averaging 3.7x
over the next four years. Under Fitch's normalized assumptions,
which include future PJM capacity prices below $100/MW-day and
energy prices around $40/MW-hr, leverage would be sustained above
3.5x which is Fitch's downgrade threshold. Fitch assumes lower
margins from additional data center contracts, assuming these are
negotiated as more competitive in front of the meter commercial
agreements. Fitch estimates maintenance capex requirements around
$250 million per year including nuclear fuel amortization expense
and maintenance of the coal facilities.
Tailwinds from Nuclear PPAs: Talen's agreement to sell up to 960MW
of power at favorable terms to AWS, a subsidiary of Amazon Inc.
(AA-/Stable), in a first of its kind agreement illustrates the
competitive advantages of well-placed zero carbon base load
generation. The capacity will come on in a phased manner starting
with 120 MW in 2025 and ramp up to 480 MW by 2028. Each step-up in
the contract has a fixed price for a 10-year term, after which it
reprices based on the prevailing PJM West hub prices.
Sensitivity to Commodity Prices: Similar to other merchant power
generation companies, Talen's generation fleet is exposed to
changes in energy and capacity prices, which creates volatility in
EBITDA and FCF. After two years of volatile energy prices, there is
strong energy demand, well above historical averages from the past
decade from overall economic growth, transport electrification and
demand from data centers. Going forward, lower reliance on
commodity linked cash flows is key to upward ratings momentum.
Favorable Near-Term Capacity Prices: Talen derives over 90% of its
gross margins from PJM where capacity prices jumped to
$269.9/MW-day for the 2025/2026 planning year, partly in
anticipation of higher power demand from data centers. Fitch
assumes capacity prices in PJM will return to more normalized
levels in future actions. Capacity revenue accounts for about 30%
of total margins in 2026, compared to 15% in normalized
conditions.
Limited Diversification and Scale: Talen has limited geographical
and fuel diversity with over 90% of its realized energy margin
coming from PJM. The company recently divested its entire Texas
portfolio comprised of 1.7GW of natural gas fired assets. Its
Susquehanna nuclear plant alone contributes approximately 75% of
total realized energy margin, which creates some asset
concentration risk. As a result, Talen's ratings are constrained by
its relatively small scale and limited geographic diversification
compared to other independent power producers.
Derivation Summary
With respect to size, asset composition and geographic exposure,
Talen is unfavorably positioned when compared with Vistra Corp.
(Vistra, BB/Stable) and Calpine Corporation (Calpine, B+/Stable).
Vistra is the largest independent power producer in the country
with approximately 38GW of generation capacity compared to
Calpine's 26GW and Talen's 10.7GW, post the sale of the ERCOT
assets.
With the sale of its Texas portfolio Talen is largely concentrated
in the PJM, contributing over 90% of consolidated EBITDA. Vistra's
portfolio derives more than 70% of its consolidated EBITDA from
operations in Texas, while Calpine's fleet is more geographically
diversified across PJM, Texas and California. Talen and Vistra also
benefit from nuclear PTCs provided under the IRA. However, Calpine
and Vistra have much larger generation portfolios and more
diversified fleets.
Fitch forecasts Talen's debt to EBITDA leverage ratio averaging
3.7x over the next four years, which is similar to Vistra's 3.5x
and marginally stronger than Calpine's, ranging between 4.0x and
4.5x. The difference in scale, geographic diversity and the overall
competitive advantage of the generation fleet drives the difference
between the credit profiles of Talen and Vistra. Fitch ascribes
greater credit value to these factors compared to the expected
lower leverage at Talen.
Key Assumptions
- $1.2 billion additional share repurchase program executed by YE
2025;
- Capacity revenue per past auction results, and future PJM
capacity normalizing to 2024/2025 levels within the forecast
period;
- Energy prices in PJM normalizing to around $40/MWH over the
forecast period of next three years;
- Total capex including nuclear fuel of about $750 million over
2025-2027;
- Nuclear PTC contemplated in the IRA is executed with a $43.75/MWH
price as expected;
- Starting in 2025, Susquehanna realizes revenue in line with
nuclear PTC in addition to the currently contracted AWS PPA;
- Nuclear fuel amortization expenses are excluded from operating
expenses and treated as capex instead;
- Interest rate assumptions are in line with Fitch's "Global
Economic Outlook": SOFR + 350bps for senior secured term loans, and
around 8% all-in for the unsecured debt.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- EBITDA leverage exceeding 3.5x;
- Constrained liquidity position or hedges that are deemed to be
out of the money;
- Weaker than expected power prices or capacity auctions in core
regions;
- Any further reduction in scale or geographic diversity;
- Unfavorable changes in regulatory constructs or rules in Talen's
markets;
- The rating for term loans and senior notes could be lowered by
one or more notches if the revolving credit facility is given a
super priority lien.
Fitch Could Revise the Outlook to Stable if:
- Contracted cash flows and cash flows generated under normalized
capacity and energy price expectations are sufficient to sustain
leverage below 3.5x over the long term.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
Given the aggregate debt levels, an upgrade is unlikely. However,
Fitch could consider it if:
- EBITDA leverage is lower than 2.5x on a sustainable basis;
- Increased scale and geographic diversity, while demonstrating
greater cash flow visibility on a sustained basis;
- Demonstrated ability to hedge effectively and manage liquidity
through commodity cycles;
- Balanced allocation of FCF that maintains balance sheet
flexibility and leverage within the stated goal.
Liquidity and Debt Structure
Talen has about $648 million of unrestricted cash as of Sept. 20,
2024. In addition, Talen has $700 million of undrawn revolver
liquidity, which is fully available. The maturity on the revolver
will be extended to five years.
The liquidity is sufficient to cover collateral posting
requirements, working capital requirements and increases in
interest rate expenses under Fitch's rating case assumptions. Talen
will issue a standalone $800 million LC facility and terminate its
TLC. As of Sept. 30, 2024, Talen had $545 million in Letters of
Credit outstanding under its various Letter of Credit facilities.
Talen's LC usage will increase per the terms of the AWS PPA over
the next three years.
Near-term maturities are $131 million PEDFA bonds which will come
due in 2027.
Issuer Profile
Talen Energy Supply, a subsidiary of Talen Energy Corporation, is
an independent power producer that owns approximately 10.7GW of
generation capacity, including 2.2 GW of nuclear power, largely in
the PJM.
CRITERIA VARIATION
Variation from Criteria: Fitch's "Corporate Rating Criteria," dated
Nov. 3, 2023, outlines and defines a variety of quantitative
measures used to assess credit risk. Per the criteria, Fitch's
definition of total debt is all encompassing. However, Fitch's
criteria are designed to be used in conjunction with experienced
analytical judgment and, as such, adjustments may be made to the
application of the criteria that more accurately reflects the risks
of a specific transaction or entity.
At this time, Fitch does not consider the $470 million Term Loan C
as debt, which is a variation from its "Corporate Rating Criteria"
definition of total debt. The TLC is fully drawn to cash with the
proceeds held in an escrowed account. It is treated as off-balance
sheet for analytical purposes and excluded from Fitch's leverage
and interest coverage metrics. There is currently no draw on the
cash, which, should it occur, would be treated as debt.
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
----------- ------ -------- -----
Talen Energy Supply, LLC LT IDR BB- Affirmed BB-
senior unsecured LT BB- Affirmed RR4 BB-
senior secured LT BB+ Affirmed RR1 BB+
TANNER DEWEESE: Case Summary & 18 Unsecured Creditors
-----------------------------------------------------
Debtor: Tanner Deweese Paving, LLC
3035 Hamilton Church Road
Antioch, TN 37013
Chapter 11 Petition Date: December 9, 2024
Court: United States Bankruptcy Court
Middle District of Tennessee
Case No.: 24-04736
Judge: Hon. Randal S Mashburn
Debtor's Counsel: R. Alex Payne, Esq.
DUNHAM HILDEBRAND PAYNE WALDRON, PLLC
9020 Overlook Blvd., Suite 316
Brentwood, TN 37027
Tel: 629-777-6529
Fax: 615 777 3765
Email: alex@dhnashville.com
Total Assets: $433,821
Total Liabilities: $1,060,330
The petition was signed by Tanner Deweese as owner.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 18 unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/HE73LZY/Tanner_Deweese_Paving_LLC__tnmbke-24-04736__0001.0.pdf?mcid=tGE4TAMA
TGP HOLDINGS: Moody's Alters Outlook on 'Caa1' CFR to Positive
--------------------------------------------------------------
Moody's Ratings changed TGP Holdings III LLC's (Traeger) outlook to
positive from stable. At the same time, Moody's affirmed Traeger's
ratings, including its Caa1 Corporate Family Rating, Caa1-PD
Probability of Default Rating, and the Caa1 rating on the company's
senior secured first lien bank credit facility. The first lien bank
credit facility consists of a $125 million first lien revolver due
2026, and a $535 million original principal amount first lien term
loan due 2028. Traeger's speculative grade liquidity (SGL) rating
remains unchanged at SGL-3.
"The ratings affirmation and outlook change to positive reflects
Trager's improving profitability, free cash flow, and credit
metrics driven by promotions that are improving grill volumes,"
stated Moody's Ratings VP-Senior Analyst, Oliver Alcantara.
"Traeger's good operating performance during the 2024 grills
selling season, despite a challenging consumer environment, points
to a stabilization of demand for its outdoor grill products and
positions the company well to sustain its profitability and free
cash flow generation in 2025".
Traeger's revenue during the third quarter 2024 period increased 4%
year-over-year, driven by very strong revenue growth from grills of
32%, the company's biggest product category, which more than offset
weaker revenue in consumables and accessories categories. Grill
sales benefitted from the company's promotional activity that drove
higher volumes but with lower average selling price. Despite the
modest revenue growth, Trager's profitability has improved
meaningfully in 2024, and the company anticipates gross margin to
expand over 500 percentage basis points (bps) in 2024 versus the
prior year. Lower freight costs, optimization of operations, and
favorable foreign exchange are contributing to higher
profitability. Traeger's financial leverage remains elevated but is
improving rapidly with debt/EBITDA (all ratios are Moody's-adjusted
unless otherwise stated) at 8.8x for the last twelve month period
(LTM) ending September 30, 2024, down significantly from over 20x
at the end of fiscal 2023.
Consumers are responding well to Traeger's promotional activity,
particularly during key selling periods and despite challenges
affecting consumer discretionary spending. The company anticipates
modest grill's revenue growth in 2024 which points to a
stabilization of demand for its outdoor grill products following
significant pull-forward during the coronavirus pandemic. A more
stable consumer demand backdrop and lean grill inventory levels
positions the company well for new product launches in 2025. As a
result, Moody's expect revenue growth in the low-to-mid single
percentage points with modest EBITDA margin expansion over the next
12 months, and that the company's debt/EBITDA leverage will
continue to improve but remain high at just below 7x. Moody's also
project that the company will generate free cash flow of at least
$20 million.
Still, risks to Traeger's business remain elevated given the
discretionary nature of the company's products, particularly its
premium priced outdoor grills. Cumulative high inflation and high
borrowing rates continue to pressure consumer discretionary
spending, particularly for high ticket items. Moody's expect that
these demand headwinds will continue into 2025, which creates
uncertainty around the company's ability to continue to improve
profitability. In addition, given the high earnings seasonality
around the summer months, consumer demand for the company's
products could deteriorate during the selling season, which would
exacerbate the potential decline in profitability.
RATINGS RATIONALE
Traeger's Caa1 CFR broadly reflects its modest relative scale with
annual revenue of approximately $600 million and narrow product
focus with limited geographic diversification. The discretionary
nature of outdoor grills and Traeger's premium priced grills and
accessories, exposes the company to cyclical changes in consumer
discretionary spending. The company's financial leverage is high
with debt/EBITDA at around 8.8x as of the LTM September 30, 2024
and Moody's expect that leverage will improve but remain high at
under 7x over the next 12 months. Traeger has high customer
concentration, and its earnings and cash flows are highly seasonal,
centered around the summer months.
Traeger's rating also reflects its solid market position within the
niche wood pellet grill industry, and its strong brand image
supported by its good track record of product innovation. The
company benefits from the recurring nature of its sizable
consumables segment that is more resilient to cyclical downturns,
and its growing installed base. Traeger also benefits from its
growing direct-to-consumer and accessories businesses, and
increased distribution in the grocery channel. The company's
Speculative Grade Liquidity Rating of SGL-3 reflects Traeger's
adequate liquidity and Moody's expectation of positive free cash
flow of at least $20 million over the next 12 months, an undrawn
$125 million first lien revolver due 2026, and $35 million
available on its $75 million accounts receivable facility as of
September 30, 2024, which provides financial flexibility to fund
seasonal investments in working capital.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The positive outlook reflects Traeger's improvement in operating
performance and Moody's view that the ongoing normalization of
consumer demand for the company's outdoor grills will support
improvement in profitability and free cash flow generation leading
to lower financial leverage through earnings growth.
The ratings could be upgraded if the company demonstrates a track
record of improving financial operating results including EBITDA
margin recovering towards historical levels, and generates positive
free cash flows with good levels of reinvestments on an annual
basis, while debt/EBITDA is sustained below 6.5x. A ratings upgrade
would also require the company to maintain at least adequate
liquidity, including lower reliance on revolver borrowings.
Ratings could be downgraded if the company's EBITDA margin
deteriorates, or free cash flow is negative on an annual basis. The
ratings could also be downgraded if liquidity deteriorates for any
reason including limited availability on the revolver facility.
Headquartered in Salt Lake City, Utah, TGP Holdings III LLC
("Traeger") is a designer and distributor of wood pellet grills,
grill accessories and related consumables, primarily in North
America. Following the July 2021 initial public offering (IPO) of
Traeger, Inc., funds affiliated with AEA Investors, Ontario
Teachers' Pension Plan Board, and Trilantic Capital Partners
maintain a controlling interest of around 60% in the company.
Traeger, Inc. is the indirect parent of TGP Holdings III LLC, and
its common stock is listed under the ticker symbol "COOK". Traeger
reported revenue of approximately $600 million for the LTM period
ending September 30, 2024.
The principal methodology used in these ratings was Consumer
Durables published in September 2021.
THERMOSTAT PURCHASER: Moody's Rates New $100MM 1st Lien Loan 'B2'
-----------------------------------------------------------------
Moody's Ratings assigned a B2 rating to Thermostat Purchaser III,
Inc.'s (PremiStar) proposed $100 million senior secured first lien
delayed draw term loan (DDTL) due 2028. The company's other
ratings, including its B3 corporate family rating, B3-PD
probability of default rating and B2 senior secured first lien bank
credit facility ratings, which includes a proposed $75 million
add-on to the existing senior secured first lien term loan B, are
unaffected. The outlook is stable.
Proceeds from the $75 million incremental term loan add-on will be
used to fund acquisitions currently under letter of intent and are
expected to close in Q4 2025. The new $100 million DDTL (unfunded
at close) will be used to fund subsequent acquisitions.
Moody's view the transaction as credit neutral because leverage
remains high, with PremiStar's pro forma debt-to-LTM EBITDA at
about 8.3x times at September 30, 2024, which assumes a full draw
on the DDTL. In addition, acquisitions carry a high degree of
execution risk as cash flow generation from these acquisitions is
only realized with a time lag.
RATINGS RATIONALE
PremiStar's B3 CFR reflects the company's high debt leverage, low
interest coverage, an aggressive growth strategy and modest cash
flow generation. Over the next 12 months Moody's expect PremiStar's
growth will largely be driven by acquisitions that will require
further investment over time to fund and integrate them into the
broader business. The company benefits from stable demand drivers
within the commercial HVAC sector that support long term growth, a
historically high revenue retention rate and from a lack of
near-term debt maturities.
Moody's expect PremiStar will maintain adequate liquidity over the
next 12-18 months, supported by availability on the $65 million
revolver due August 2026 and about $18 million of cash on hand as
of September 30, 2024. The company generates most of its cash in
the fourth quarter and Moody's expect the cash balance at year-end
2024 should support the company's capital investment needs over the
next year. Moody's forecast assumes the company will generate about
$4 million in free cash flow in 2024 and $1 million in 2025.
The stable outlook reflects Moody's expectation of sustained demand
for HVAC maintenance and repair, along with maintenance of adequate
liquidity.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
An upgrade of the ratings could result from the successful
generation of organic revenue growth while increasing EBITA margins
and maintaining strong free cash flow. In addition, PremiStar would
need to sustain debt to EBITDA below 6.0x and maintain conservative
financial policies along with a good liquidity profile.
A downgrade would likely result should the company experience
revenue and EBITA margin declines, debt to EBITDA sustained above
7.0x, EBITA-to-interest expense sustained below 1.0x or if the
company experiences a weakening in its liquidity profile. Ratings
could also be downgraded if the company accelerates its debt funded
acquisition activity or undertakes a significant shareholder
return.
PremiStar, headquartered in Deerfield, IL, is a provider of
commercial HVAC, plumbing, and building controls and solutions
serving US municipal and commercial buildings such as universities,
hospitals, churches, banks and manufacturers. For the twelve month
period ended September 30, 2024, the company generated $687 million
in revenue. The company is owned by private equity sponsor,
Partners Group.
The principal methodology used in this rating was Business and
Consumer Services published in November 2021.
TRINET GROUP: Fitch Affirms 'BB+' LongTerm IDR, Outlook Stable
--------------------------------------------------------------
Fitch Ratings has affirmed TriNet Group, Inc. and its subsidiary,
TriNet USA, Inc.'s (collectively, TriNet) Long-Term Issuer Default
Rating (IDR) at 'BB+'. The Rating Outlook remains Stable. Fitch has
also affirmed TriNet's secured revolving credit facility (RCF) at
'BBB-' with a Recovery Rating of 'RR1' and the unsecured bonds at
'BB+'/'RR4'.
TriNet's ratings are supported by its leading market position in
the professional employer organization (PEO) industry, strong
EBITDA-to-FCF generation, and conservative publicly stated
financial policy of maintaining company-defined leverage between
1.5x to 2.0x.
The ratings also reflect TriNet's exposure to the small and midsize
business (SMB) market, rising healthcare utilization and drug
inflation, and limited revenue diversification. The company's high
financial flexibility provides some cushion against insurance
volatility and macroeconomic headwinds. Fitch expects
Fitch-calculated EBITDA leverage to remain below 2.5x over the
rating horizon, with (Cash flow from operations minus capex)/total
debt remaining robust in double-digits.
Key Rating Drivers
Leverage to Remain Low: Fitch expects TriNet's Fitch-calculated
EBITDA leverage to be about 2.3x at the end of 2024 and to remain
below 2.5x through the forecasted period, supported by effective
insurance cost management, price discipline and the gradual
repayment of the outstanding revolver balance. The company has a
$175 million outstanding balance on the revolver, with $25 million
repaid this year to date.
Historically, TriNet operated with leverage under 1.0x, but with
the company's significant, and largely debt-funded share repurchase
strategy in 2023, Fitch expects leverage to be higher than
historical levels. However, TriNet's public commitment to its
stated financial policy is key to its expectation that the company
will maintain leverage within sensitivities.
Insurance Cost Volatility Risk: Fitch expects the 2024 insurance
cost ratio to be above 90% due to increased health utilization
rates, higher outpatient services rates, inflation, and elevated
specialty drug utilization for diabetes and obesity. Higher
insurance costs will drive EBITDA margins down by 150 basis points
to around 9.5%, compared to its initial margin expectations for
this year. Fitch expects insurance costs to range between 89% to
91% of insurance revenues through the rating horizon. The number of
medical claims, access to medical systems and services, and drug
prices in any given period expose TriNet to heightened cost
volatility and uncertainty.
To manage health insurance risk, TriNet has the ability to reprice
a portion of its book quarterly and uses different tools, such as
credit assessments, algorithms to assess claims risk, and manages a
deductible layer with third-party carrier partners. TriNet has
recently bolstered its dedicated actuary team within the Insurance
Services group to enhance risk management capabilities and pricing
strategies, and has implemented price increases for a significant
portion of its customer base. While the likelihood of very high
claims still presents some credit risk to the company's future
insurance business, the distribution of risks between TriNet and
the carriers safeguards the company from higher claim amounts.
Strong Financial Flexibility: Liquidity is strong with $251 million
of unrestricted cash on the balance sheet as of Sept. 30, 2024,
along with $525 million of undrawn RCF. Fitch expects TriNet to
generate mid-single digit FCF margins (before dividends) to further
support its liquidity and capital deployment strategy.
SMBs Negatively Affect Retention: TriNet historically experienced
client attrition rates of about 20%, which is high compared with
enterprise software peers, but in line with other software
companies with similar SMB end-market exposure. The loss of clients
is usually attributed to M&A activity or multi-vendors, alongside
few SMB bankruptcy cases. Fitch believes TriNet will maintain its
retention rates through the forecast period, considering the
majority of its clients operate in predominantly white-collar
industries, and the average client life is five years.
WSE Growth and Macroeconomic Headwinds: TriNet's revenues have a
direct correlation with macroeconomic factors such as employment
levels, GDP growth, wages, and government support for SMBs.
TriNet's higher number of average worksite employees (WSE) provides
visibility to future revenue streams. TriNet is observing some
market stabilization, with a slight improvement in revenue growth.
SMBs continue to navigate through a challenging environment and
remain cautious about their hiring practices.
Employment showed little change in major industries, including
sectors like technology and financial services, where TriNet has
high exposure. Over the rating horizon, Fitch projects revenue
growth to be flat to mid-single digits, reflecting modestly rising
unemployment rates and macroeconomic uncertainties in the near
term, offset by price increases and WSE growth.
Attractive Cross-Selling Opportunities: TriNet benefits from
cross-selling opportunities due to its broad portfolio and its
ability to increase penetration of additional modules into the
existing customer base, aided by acquisitions of Zenefits and
Clarus R+D. TriNet's solutions support a wide range of HR functions
including payroll, benefits, compliance, workers compensation, and
risk mitigation, which the company is able to leverage by offering
a centralized place to manage human capital.
Competitive and Fragmented Landscape: The HCM industry is highly
competitive and fragmented with competitors of various scales. The
company provides HR employers with software tools that automate
processes, including payroll and taxation processing, employee
hiring and engagement, compliance and many more, encircling
employee lifecycle management. Fitch expects continued demand
growth for HCM software as companies migrate to cloud-based
solutions to automate administrative functions to reduce costs and
time spent, while focusing more on strategic investment decisions.
Derivation Summary
Fitch expects demand for HCM software to continue growing as
companies migrate to cloud-based solutions to automate
administrative functions to reduce costs and time spent, while
focusing more on strategic investment decisions. Fitch projects the
North American HCM software spend to grow at a low-teens CAGR for
next five years.
The PEO service market is led primarily by four public companies:
Automatic Data Processing Inc. (ADP; AA-/Stable), TriNet,
Insperity, Inc. and Paychex, Inc. Unlike many peers that are
vertical agnostic, TriNet is focused on core verticals with white
collar clients constituting approximately 80% of WSEs. Fitch
considers this as an important positive factor, considering the
company's exposure to the SMB sector.
The company is small in scale when compared with large vendors such
as ADP, which is rated seven notches higher since its revenues are
four times larger than TriNet and EBITDA margins are in the 30%
range, compared to TriNet's roughly 10%. ADP also has a more
conservative shareholder distribution and financial policies, with
leverage maintained below 1.0x consistently, whereas Fitch expects
TriNet to have leverage of 2.2x-2.5x over the rating horizon.
Compared with other HCM providers, such as Paylocity Holding Corp.,
Paycom Software Inc., and Dayforce Inc., TriNet's revenue scale is
much larger, with capital structure comparable with some of the
peers.
Compared with other software peers in the 'BB+' rating range,
TriNet's revenue scale, market position, average customer life and
financial structure are much stronger. Limitations to the rating
include the company's narrow revenue diversification, and
uncertainty surrounding the insurance service segment. TriNet's
profitability in the high-single digits compares unfavorably with
peers due to high insurance costs associated with the insurance
service segment. Still, Fitch believes TriNet is well positioned in
the 'BB+' category relative to these peers and other SMB-focused
technology issuers rated by Fitch due to its strong credit
profile.
Key Assumptions
- An organic revenue growth rate in the low-to-mid single digits;
- Insurance cost ratio approximately 89%-91% through the forecast
period;
- EBITDA margins in the high-single digits;
- Capex intensity 1.0% of revenue;
- FCF returned to shareholders at 75% annually via a combination of
cash dividend and repurchases;
- SOFR rates as 4.80%, 4.20%, 3.20%, and 3.00% from 2024 to 2027;
- Fitch assumes bolt-on acquisitions of approximately $200 million
through 2027.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Higher than expected incremental debt-financed acquisitions or
share repurchases that materially weaken the company's credit
profile, leading to EBITDA leverage above 3.0x on a sustained
basis;
- An unexpectedly higher number of health claims or health care
utilization, significantly exceeding Fitch's expectation of
insurance costs on a consistent basis;
- Significant market share erosion as evidenced by contract loss,
increased client churn, and lower revenue growth.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
An upgrade is unlikely given the limited revenue diversification
and SMB exposure of the company. However, the ratings could be
upgraded with:
- EBITDA leverage sustained below 2.0x;
- An improved HCM market position, as evidenced by revenue growth
approaching double digits on a sustained basis;
- Evidence of increased revenue diversification into multiple end
markets.
Liquidity and Debt Structure
Sufficient Liquidity: TriNet maintains an adequate liquidity
position, supported by a cash balance of about $251 million, and
remaining revolver capacity of about $525 million as of September
2024. In addition, Fitch expects TriNet to generate mid-single
digit FCF margins to further support its liquidity and capital
deployment strategy.
Debt Structure: TriNet's debt consists of a first lien $700 million
($525 million undrawn) secured revolver due 2028, 3.5% unsecured
notes due 2029 and 7.125% unsecured notes due 2031.
Issuer Profile
TriNet Group, Inc. (NASDAQ: TNET) is a leading PEO (professional
employer organization) and human resources information system
(HRIS) service provider for small to mid-sized companies, serving
about 356,000 Worksite Employees (WSE) and more than 180,000 HRIS
users, as of Sept. 30, 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 Prior
----------- ------ -------- -----
TriNet Group, Inc. LT IDR BB+ Affirmed BB+
senior unsecured LT BB+ Affirmed RR4 BB+
TriNet USA, Inc. LT IDR BB+ Affirmed BB+
senior secured LT BBB- Affirmed RR1 BBB-
TRUE VALUE: Court Orders Appointment of Retiree Committee
---------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware has ordered
the U.S. Trustee for Region 3 to appoint an official committee that
will represent retirees in the Chapter 11 case of True Value
Company, LLC.
The committee will be comprised of retirees or their beneficiaries
who receive benefits under the company's retiree plans.
True Value Company provides post-employment medical, dental and
vision benefits, and life insurance and death benefits to retirees.
As of Oct. 14, the company provides benefits to four retirees under
its retiree health plan, and 303 retirees under its retiree life
plan.
About True Value Company
True Value Company, LLC and its affiliates are hardlines
wholesalers, serving approximately 4,500 stores worldwide. A
globally recognized retail brand, the Debtors provide customers in
over 55 countries an expansive product set across key categories
such as Hardware Lumber and Building, Outdoor Living and Tools, and
Plumbing and Heating.
The Debtors filed voluntary Chapter 11 petitions (Bankr. D. Del.
Lead Case No. 24-12337) on October 14, 2024. True Value estimated
total assets of $100 million to $500 million and total liabilities
of $500 million to $1 billion as of the bankruptcy filing.
Judge Karen B. Owens oversees the cases.
The Debtors tapped Skadden, Arps, Slate, Meagher & Flom LLP, and
Young Conaway Stargatt & Taylor, LLP as bankruptcy counsel; Glenn
Agre Bergman & Fuentes, LLP as conflicts counsel; Houlihan Lokey
Capital, Inc. as financial advisor; and Omni Agent Solutions, Inc.
as claims and administrative agent. The Debtors also tapped M3
Advisory Partners, LP to provide chief transformation officer and
supporting personnel.
The U.S. Trustee for Regions 3 and 9 appointed an official
committee to represent unsecured creditors in the Debtors' Chapter
11 cases.
TRUE VALUE: McGuireWoods & Richards Layton Represent STIHL Group
----------------------------------------------------------------
The law firms of McGuireWoods LLP and Richards, Layton & Finger,
P.A. ("RLF") filed a verified statement pursuant to Rule 2019 of
the Federal Rules of Bankruptcy Procedure to disclose that in the
Chapter 11 cases of True Value Company, LLC and its affiliates, the
firms represent the STIHL Group comprised of STIHL Incorporated and
Independent Distributor.
In October 2024, STIHL Inc. engaged McGuireWoods to represent it in
connection with the Chapter 11 Cases. From October 2024 through
November 2024, certain Independent Distributors likewise engaged
McGuireWoods in connection with the Chapter 11 Cases. In November
2024, the STIHL Group engaged RLF to act as co-counsel in the
Chapter 11 Cases.
McGuireWoods Represents only the STIHL Group. McGuireWoods does not
Represent or purport to Represent any entities other than the STIHL
Group in connection with the Chapter 11 Cases, regardless of
whether they are an Independent Distributor of STIHL Inc. In
addition, the STIHL Group does not claim or purport to represent
any other entity and undertakes no duties or obligations to any
such entity, regardless of whether such entity is an Independent
Distributor of STIHL Inc.
The STIHL Group collectively owns $12,795,009.15 of pre and post
petition claims against the Debtors.
The STIHL Group Members' address and the nature and amount of
disclosable economic interests held in relation to the Debtors are:
1. STIHL Incorporated
536 Viking Drive
Virginia Beach, VA 23452
* $9,471,839.90 for goods sold
2. Blue Mountain Equipment, Inc.
808 Hwy. 34W
Marble Hill, MO 63764
* $1,649,744.21 for goods sold
3. Bryan Equipment Sales, Inc.
6300 Smith Road
Loveland, OH 45140
* $51,214.06 for goods sold
4. Crader Distributing Company
808 Hwy. 34W
Marble Hill, MO 63764
* $454,332.38 for goods sold
5. STIHL Southeast, Inc.
2904 Tradeport Dr.
Orlando, FL 32824
* $1,167,878.60 for goods sold
The law firms can be reached at:
Amanda R. Steele, Esq.
Zachary J. Javorsky, Esq.
Richards, Layton & Finger, P.A.
One Rodney Square
920 North King Street
Wilmington, Delaware 19801
Telephone: (302) 651-7700
Email; steele@rlf.com
javorsky@rlf.com
-and-
Dion W. Hayes, Esq.
K. Elizabeth Sieg, Esq.
Connor W. Symons, Esq.
McGuireWoods LLP
Gateway Plaza
800 East Canal Street
Richmond, VA 23219-3916
Telephone: (804) 775-1000
Facsimile: (804) 775-1061
Email: dhayes@mcguirewoods.com
bsieg@mcguirewoods.com
csymons@mcguirewoods.com
About True Value Company
True Value Company, LLC and its affiliates are hardlines
wholesalers, serving approximately 4,500 stores worldwide. A
globally recognized retail brand, the Debtors provide customers in
over 55 countries an expansive product set across key categories
such as Hardware Lumber and Building, Outdoor Living and Tools, and
Plumbing and Heating.
The Debtors filed voluntary Chapter 11 petitions (Bankr. D. Del.
Lead Case No. 24-12337) on October 14, 2024. True Value estimated
total assets of $100 million to $500 million and total liabilities
of $500 million to $1 billion as of the bankruptcy filing.
Judge Karen B. Owens oversees the cases.
The Debtors tapped Skadden, Arps, Slate, Meagher & Flom LLP, and
Young Conaway Stargatt & Taylor, LLP as bankruptcy counsel; Glenn
Agre Bergman & Fuentes, LLP as conflicts counsel; Houlihan Lokey
Capital, Inc. as financial advisor; and Omni Agent Solutions, Inc.
as claims and administrative agent. The Debtors also tapped M3
Advisory Partners, LP to provide chief transformation officer and
supporting personnel.
The U.S. Trustee for Regions 3 and 9 appointed an official
committee to represent unsecured creditors in the Debtors' Chapter
11 cases.
TW MEDICAL: Gets Final OK to Use Cash Collateral Until Feb. 17
--------------------------------------------------------------
TW Medical Group, LLC and Taylor G. Wright, P.C. received final
approval from the U.S. Bankruptcy Court for the District of Utah to
use cash collateral.
The final order signed by Judge Joel Marker approved the use of
cash collateral until Feb. 17 next year to pay the expenses set
forth in the companies' projected budget.
Secured creditors were granted replacement liens on the companies'
post-petition assets to secure their interests in the event of
diminution in the value of their collateral.
The bankruptcy court previously issued an interim order, allowing
the use of cash collateral to pay the companies' expenses incurred
for the period from Nov. 15 to Dec. 4.
About TW Medical Group
TW Medical Group, LLC is a podiatry practice offering
state-of-the-art care across many locations in the United States.
The Company provides care for patients of all ages, from infants to
older adults. Its podiatry team specializes in diagnosing and
treating many foot and ankle conditions, including plantar
fasciitis, tendonitis, ingrown toenail, toenail fungus, bunions,
and flat feet.
TW Medical Group and Taylor G. Wright, P.C. filed Chapter 11
petitions (Bankr. D. Utah Lead Case No. 24-25495) on October 23,
2024. Zachary Paul, chief financial officer, signed the petitions.
At the time of the filing, TW Medical Group reported $10 million to
$50 million in both assets and liabilities while Taylor G. Wright
reported $100,001 to $500,000 in assets and $1 million to $10
million in liabilities.
Judge Joel T. Marker oversees the cases.
George B. Hofmann, Esq., at Cohne Kinghorn, P.C., represents TW
Medical Group while Ted F. Stokes, Esq., at Stokes Law, PLLC
represents Taylor G. Wright.
US ECO PRODUCTS: Case Summary & 12 Unsecured Creditors
------------------------------------------------------
Debtor: US Eco Products Corporation
143 Essex Street
Haverhill, MA 01830
Chapter 11 Petition Date: December 9, 2024
Court: United States Bankruptcy Court
District of Massachusetts
Case No.: 24-41263
Judge: Hon. Elizabeth D Katz
Debtor's Counsel: Michael B. Feinman, Esq.
FEINMAN LAW OFFICE
The Cambridge Trust Bank Building
69 Park Street
Andover, MA 01810
Tel: 978-476-0080
Fax: 978-475-0852
Email: mbf@feinmanlaw.com
Total Assets: $320,830
Total Liabilities: $1,249,695
The petition was signed by Doreen Blades as president.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 12 unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/CQEL45I/US_Eco_Products_Corporation__mabke-24-41263__0001.0.pdf?mcid=tGE4TAMA
UWM HOLDINGS: Fitch Assigns 'BB-' LongTerm IDR, Outlook Positive
----------------------------------------------------------------
Fitch Ratings has assigned Long-Term Issuer Default Ratings (IDRs)
of 'BB-' to UWM Holdings Corporation and UWM Holdings, LLC. The
Rating Outlooks are Positive.
Fitch has also assigned an expected rating of 'BB-(EXP)' to UWM
Holdings, LLC's proposed senior unsecured debt issuance. Proceeds
from the company's announced issuance are expected to be used to
repay a portion of the amounts outstanding under the company's
mortgage servicing rights (MSR) facilities, with any excess
proceeds held as cash.
Key Rating Drivers
The IDRs of UWM Holdings Corporation, the consolidated parent, and
UWM Holdings, LLC, the wholly owned, intermediate holding company
and debt-issuing subsidiary, are assigned at the same level as
United Wholesale Mortgage, LLC (UWM; BB-/Positive), the wholly
owned, primary operating company. The debt issued by UWM Holdings,
LLC benefits from an upstream corporate guarantee from UWM.
The proposed unsecured debt is expected to rank pari passu with
UWM's existing senior unsecured debt, and therefore the expected
rating is equalized with its outstanding senior unsecured debt and
its Long-term IDR. The equalization reflects average recovery
prospects under a stress scenario given the availability of
unencumbered assets.
Fitch does not expect the debt issuance to have a meaningful impact
on the company's leverage profile as proceeds are expected to
refinance outstanding secured debt.
The ratings are supported by UWM's market position and franchise as
the leading wholesale residential mortgage lender, strong financial
profile with improved capitalization, solid asset quality of the
servicing portfolio, a robust and integrated technology platform,
and an experienced management team. The company has a dominant
position within the wholesale channel with a market share of 43%,
and was the nation's largest mortgage originator in 9M24 and FY23,
according to Inside Mortgage Finance.
The ratings are constrained by the highly cyclical nature of the
mortgage origination business and a reliance on secured,
short-term, uncommitted funding facilities. It is also exposed to
elevated key person risk related to the CEO and president, Mat
lshbia, who, together with the lshbia family, exercises significant
control over the company as majority shareholders. UWM's exclusive
focus on the wholesale channel is another rating constraint, as it
could limit further market share gains within the overall mortgage
market.
The Positive Outlook reflects the significant strengthening of
UWM's franchise over the last several years, which should increase
the durability of its business model through market cycles. It also
reflects improvements to the company's funding profile and
liquidity resources. Fitch could upgrade the ratings by one notch
if the company economically addresses its $800 million 2025
unsecured note maturity without further asset encumbrance and
maintains corporate leverage at or below 1.0x.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
The Outlook could be revised to Stable due to further asset
encumbrance resulting from the refinancing of the 2025 notes and/or
corporate leverage sustained above 1.0x. Beyond that, a rating
downgrade could result from:
- Gross leverage sustained above 5.0x and/or corporate leverage
sustained above 1.5x;
- 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 10%;
- Sustained profitability challenges that erode tangible equity and
the firm's market position;
- Regulatory scrutiny resulting in UWM incurring substantial fines
that negatively impact its franchise or operating performance;
- The departure of Mat lshbia and/or reduced involvement of the
Ishbia family, who have led the growth and direction of the
company.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Refinancing or repayment of the 2025 unsecured notes without
further asset encumbrance;
- Corporate leverage sustained at or below 1.0x;
- Gross leverage sustained below 5.0x;
- Sustained earnings generation in excess of capital
distributions;
- Improvement in the funding profile, including an extension of
funding duration and/or an increase in the proportion of committed
funding and the maintenance of unsecured debt above 25% of total
debt;
- Increased liquidity resources above 30% of total debt;
- Maintenance of market position and leadership in the wholesale
origination channel;
- Demonstrated effectiveness of corporate governance policies.
DEBT AND OTHER INSTRUMENT RATINGS: KEY RATING DRIVERS
The senior unsecured debt ratings are equalized with the IDRs given
the funding mix and adequate unencumbered assets available to the
noteholders, suggesting average recovery prospects in a stressed
scenario.
DEBT AND OTHER INSTRUMENT RATINGS: RATING SENSITIVITIES
The ratings on the unsecured notes are primarily sensitive to
changes in the Long-Term IDRs and would be expected to move in
tandem with them. However, a material decrease in unencumbered
assets and/or an increase in the proportion of secured funding
could result in a widening of the notching between the IDRs and the
unsecured notes.
SUBSIDIARY AND AFFILIATE RATINGS: KEY RATING DRIVERS
The ratings of UWM Holdings, LLC (the debt-issuing subsidiary) and
United Wholesale Mortgage, LLC (the operating company) are
equalized with that of UWM Holdings Corporation given they are
wholly owned subsidiaries, and debt issued by UWM Holdings, LLC
benefits from a corporate guarantee from United Wholesale Mortgage,
LLC.
SUBSIDIARY AND AFFILIATE RATINGS: RATING SENSITIVITIES
The ratings of UWM Holdings, LLC and United Wholesale Mortgage, LLC
are equalized with that of UWM Holdings Corporation and are
expected to move in tandem.
ADJUSTMENTS
The Standalone Credit Profile (SCP) has been assigned below the
implied SCP due to the following adjustment reason: Weakest Link -
Funding, Liquidity & Coverage (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: Non-loan exposures
(negative).
The Earnings & Profitability score has been assigned below the
implied score due to the following adjustment reason: Historical
and future metrics (negative).
The Funding, Liquidity & Coverage score has been assigned below the
implied score due to the following adjustment reason: Funding
flexibility (negative).
ESG Considerations
UWM has an ESG Relevance Score of '4' for Governance Structure due
to elevated key person risk related to its president and CEO, Mat
Ishbia, who has led the growth and strategic direction of the
company since its inception. This has a negative impact on the
credit profile and is relevant to the rating in conjunction with
other factors.
UWM also has an ESG Relevance Score of '4' for Customer Welfare โ
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
----------- ------
UWM Holdings, LLC LT IDR BB- New Rating
senior unsecured LT BB-(EXP) Expected Rating
UWM Holdings
Corporation LT IDR BB- New Rating
VANGUARD MEDICAL: Court Extends Use of Cash Collateral to Jan. 15
-----------------------------------------------------------------
A U.S. bankruptcy judge overseeing the Chapter 11 case of Vanguard
Medical, LLC extended the company's use of cash collateral from
Dec. 6 to Jan. 15 next year.
Judge Janet Bostwick of the U.S. Bankruptcy Court for the District
of Massachusetts approved the use of cash collateral to pay the
company's expenses until Jan. 15 or until the effective date of its
Chapter 11 plan, whichever is earlier.
If the plan is not confirmed or the effective date does not occur
by Jan. 15, Vanguard Medical may file a motion requesting a further
extension of the use of cash collateral.
To protect the interests of the U.S. Small Business Administration,
CHEDR, LLC, and Cardinal Health 105, LLC, the court granted these
secured creditors replacement liens on post-petition assets. These
liens will have the same priority as the pre-bankruptcy liens held
by the secured creditors.
About Vanguard Medical
Vanguard Medical, LLC is a Connecticut limited liability company
formed in September 2018. It conducts business throughout New
England including significant business in the Commonwealth of
Massachusetts.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Mass. Case No. 24-10561) on March 25,
2024, with $7,796,609 in assets and $6,694,550 in liabilities.
Clancy Purcell, chief executive officer, signed the petition.
Judge Janet E. Bostwick oversees the case.
Peter N. Tamposi, Esq., at the Tamposi Law Group, PC, is the
Debtor's bankruptcy counsel.
VIVAKOR INC: Expects to Issue 6.7MM Shares for Endeavor Crude Deal
------------------------------------------------------------------
Vivakor, Inc., disclosed in a Form 8-K filing with the U.S.
Securities and Exchange Commission on December 6, 2024, that it is
still calculating the final purchase price related to the
acquisition of Endeavor Crude, LLC, but has made an initial
calculation as to the number of shares of Common Stock to be issued
as part of the Purchase Price, which is 6,724,291 shares.
On October 1, 2024, the Company, Jorgan Development, LLC, a
Louisiana limited liability company, and JBAH Holdings, LLC, a
Texas limited liability company -- as Sellers -- as the equity
holders of Endeavor Crude, LLC, a Texas limited liability company,
Equipment Transport, LLC, a Pennsylvania limited liability company,
Meridian Equipment Leasing, LLC, a Texas limited liability company,
and Silver Fuels Processing, LLC, a Texas limited liability company
-- Endeavor Entities -- closed the transactions that were the
subject of a previously-disclosed Membership Interest Purchase
Agreement among them dated March 21, 2024, as amended.
Under the MIPA, the purchase price for the Endeavor Entities that
the Company owes to the Sellers is $120 million, subject to
post-closing adjustments, including a reduction for assumed debt of
the Endeavor Entities and a potential earn-out adjustment. The
Purchase Price is payable in a combination of Company common stock,
$0.001 par value per share and Company Series A Preferred Stock
$0.001 par value per share, with the number of shares of Common
Stock calculated as that number of shares that equals 19.99% of the
outstanding Common Stock after giving effect to the issuance, so
long as such amount does not cause the Sellers' direct and indirect
beneficial post-Closing ownership percentage in the Common Stock to
exceed 49.99%, with the remainder of the Purchase Price to be paid
in Preferred Stock.
Sellers are beneficially owned and controlled by James Ballengee,
who is the Company's Chief Executive Officer and a member of the
Board of Directors.
The Company is still calculating the final Purchase Price but has
made an initial calculation as to the number of shares of Common
Stock to be issued as part of the Purchase Price, which is
6,724,291 shares. On December 2, 2024, the Company issued 6,700,000
shares of Common Stock to the Sellers, or their assignees, with
4,999,500 shares issued to Jorgan and 50,500 shares issued to JBAH.
The remaining shares were issued to two non-related parties for
consideration at the instruction of the Sellers. The issuances of
the foregoing securities were exempt from registration pursuant to
Section 4(a)(2) of the Securities Act promulgated thereunder as the
Sellers are controlled by one of executive officers who is an
accredited investor and familiar with the Company's operations and
the two non-related party recipients are known to the Company and
its management and they are familiar with the Company and its
operations.
About Vivakor Inc.
Coralville, Iowa-based Vivakor, Inc. is a socially responsible
operator, acquirer, and developer of technologies and assets in the
oil and gas industry, as well as related environmental solutions.
Currently, the Company's efforts are primarily focused on operating
crude oil gathering, storage and transportation facilities, as well
as contaminated soil remediation services.
Houston, Texas-based Marcum LLP, the Company's auditor since 2022,
issued a "going concern" qualification in its report dated April
16, 2024, citing that the Company has a significant working capital
deficiency, has incurred significant losses, and needs to raise
additional funds to meet its obligations and sustain its
operations. These conditions raise substantial doubt about the
Company's ability to continue as a going concern.
VOBEV LLC: Case Summary & 30 Largest Unsecured Creditors
--------------------------------------------------------
Debtor: Vobev, LLC
5454 W 150 S
Salt Lake City, UT 84104
Business Description: Based in Salt Lake City, Utah, the Debtor
is an innovator in the beverage industry,
offering integrated beverage can production,
filling and warehousing capacity at a single
location, the first of its kind. The
Debtor's state-of-the art custom production
and filling facility came online in 2022,
and now produces and fills tens of millions
of aluminum beverage cans per year for some
of the most well-known beverage companies in
the world. The Debtor also provides
beverage formulation and mixing services.
In addition, the Debtor operates two onsite
warehouses for finished goods, cans and raw
materials to provide warehousing logistics
services for its customers.
Chapter 11 Petition Date: December 9, 2024
Court: United States Bankruptcy Court
District of Utah
Case No.: 24-26346
Judge: Hon. Joel T Marker
Debtor's
Co-Bankruptcy
Counsel: Michael R. Johnson, Esq.
Jeffrey W. Shields, Esq.
David H. Leigh, Esq.
Mel Jones-Cannon, Esq.
RAY QUINNEY & NEBEKER, P.C.
36 South State Street, 14th Floor
Salt Lake City, Utah 84111
Tel: (801) 532-1500
(801) 323-3363
Email: mjohnson@rqn.com
Email: jshields@rqn.com
Email: dleigh@rqn.com
Email: mjonescannon@rqn.com
Debtor's
General
Bankruptcy
Counsel: Eric P. Schriesheim, Esq.
ROPES & GRAY LLP
191 North Wacker Drive
Chicago, Illinois 60606
Tel: (312) 845-1200
Fax: (312) 845-5500
Email: eric.schriesheim@ropesgray.com
- and -
Gregg M. Galardi, Esq.
ROPES & GRAY LLP
1211 Avenue of the Americas
New York, New York 10036
Tel: (212) 596-9000
Fax: (212) 596-9090
Email: gregg.galardi@ropesgray.com
Debtor's
Investment
Banker: HOULIHAN LOKEY CAPITAL, INC.
Debtor's
Financial
Advisor: FTI CONSULTING, INC.
Debtor's
Notice,
Claims,
Solicitation &
Balloting
Agent: KROLL RESTRUCTURING ADMINISTRATION LLC
Estimated Assets: $500 million to $1 billion
Estimated Liabilities: $500 million to $1 billion
The petition was signed by Alan Boyko as chief transformation
officer.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/RK66UOQ/Vobev_LLC__utbke-24-26346__0001.0.pdf?mcid=tGE4TAMA
List of Debtor's 30 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
1. Belvac Production Trade $15,827,090
Machinery, Inc.
ATTN: Daniel Metzger,
General Counsel
237 Graves Mill Road
Lynchburg, VA 24502
United States
TEL: 800-423-5822; 434-239-0358
FAX: 434-239-9252
EMAIL: DANIELM@BELVAC.COM
2. Stolle Europe Ltd. Trade $9,659,595
ATTN: Paul Grainger
Kingston Broadway
Kingston Industrial Estate
Carlisle, CA3 OHA
United Kingdom
TEL: +44 1228 818 125
FAX: +44 1228-514-720
EMAIL: PAUL.GRAINGER@STOLLEMACHINERY.COM
3. Stolle Machinery Co., LLC Trade $6,080,961
ATTN: Gregory Bernarding, Senior
Credit Analyst
6949 S. Potomac Street
Centennial, CO 80112
United States
TEL: 303-708-9044
FAX: 303-708-9045
EMAIL: GREGORY.BERNARDING@STOLLEMACHINERY.COM
4. Tri-Arrows Aluminum, Inc. Trade $5,343,494
Brianna Henrich, Accountant
12501 Plantside Drive
Louisville, KY 40299
United States
PHONE: 502-566-5700
EMAIL: BRIANNA.HEINRICH@TRIAA.COM
5. BVO Holdings Corporation Intercompany $2,891,847
ATTN: President or General Counsel
300 E Citation Way
Milwaukee, WI 53207
United States
PHONE: 414-306-6697
EMAIL: BVOGEL@BVOHOLDINGS.COM;
TNETT@N2ADVANTAGE.COM
6. System Logistics Technology Trade $2,725,276
ATTN: Robert Battistoni,
Director of Finance
115 Vista Blvd
Arden, NC 28704
United States
PHONE: 828-654-7500
EMAIL: ROBERTO.BATTISTONI@SYSTEMLOGISTICS.COM
7. Vojet Aviation, LLC Intercompany $2,115,837
ATTN: Timothy A. Nettesheim,
General Counsel
13845 Bishops Dr
Ste 125
Brookfield, WI 53005-6602
United States
PHONE: 414-306-6697
EMAIL: TNETT@N2ADVANTAGE.COM
8. Container Manufacturing Ltd. Trade $1,622,188
ATTN: Ralph Stodd, President
6450 Poe Avenue
Suite 511
Dayton, OH 45414
United States
PHONE: 937-264-2370
EMAIL: BARB.MYERS@CDL-PLUS.COM
9. A.T. Kearney Professional $1,323,716
ATTN: Azaz Fauki, Partner Services
227 W. Monroe Street
Suite 4000
Chicago, IL 60606
United States
TEL: 312-648-0111
FAX: 312-223-6200
EMAIL: QUAN.VO@KEARNEY.COM;
AZAZ.FARUKI@KEARNEY.COM
10. Nutrabolt Trade $1,272,108
ATTN: Michael Demaggio,
Chief Legal Officer
4407 Monterey Oaks Blvd
Austin, TX 78749
United States
PHONE: 800-870-2070
EMAIL: MDIMAGGIO@NUTRABOLT.COM
11. Vomke, LLC Intercompany $1,181,600
ATTN: President or General Counsel
124 W Freistadt Rd.
Thiensville, WI 53092-0141
United States
EMAIL: APRETTY@GATEWAYPLASTICS.COM
12. Les Olson Company Trade $1,055,303
ATTN: James Olson,
Chief Executive Officer
3244 S 300 W
Salt Lake City, UT 84115
United States
PHONE: 801-486-7431
EMAIL: AR@LESOLSON.COM
13. Orbis Trade $857,109
ATTN: Bill Ash, Principal
1055 Corporate Center Drive
Oconomowoc, WI 53066-0389
United States
TEL: 800-999-8683
FAX: 920โ751โ2478
EMAIL: BILLING@ORBISCORPORATION.COM
14. Alden Group Environmental Trade $840,232
Solutions, LLC
ATTN: Richard Thayer, President
9595 Six Pines Dr. Suite 6370
The Woodlands, TX 77380
United States
PHONE: 832-400-1401
EMAIL: TSTATON@ALDENGROUP.COM
15. Crown Lift Trucks Trade $806,691
ATTN: James F. Dickle II,
Chairman and Chief Executive Officer
44 South Washington Street
New Bremen, OH 45869
United States
TEL: 801-381-2440
FAX: 419-629-2900
EMAIL: ACCOUNTS.RECEIVABLE@CROWN.COM
16. PCA - Packaging Corporation Trade $775,686
of America
ATTN: Jody Hilton, Plant Accountant
451 North 5600 West
Salt Lake City, UT 84116
United States
TEL: 800-200-7115
FAX: 801-321-6257
EMAIL: JODYHILTON@PACKAGINGCORP.COM
17. Prinova Trade $718,392
ATTN: Donald K. Thorp,
President and Chief Executive Officer
6525 Muirfield Drive
Hanover Park, IL 60133
United States
TEL: 931-626-6012
FAX: 690-868-0310
EMAIL: DTHORP@PRINOVAGLOBAL.COM
18. N2 Advantage Law, Ltd. Professional $564,397
ATTN: Lori Waldron, Services
Chief Operation Officer
Pinnacle III
13845 W. Bishops Drive, Suite 125
Brookfield, WI 53005
United States
PHONE: 414-306-6697
EMAIL: LWALDRON@N2ADVANTAGE.COM
19. Bettercans, LLC Trade $521,430
ATTN: Domingo R. Gonzalez, Founder
& Chief Executive Officer
7144 Cabernet Ct.
Dublin, OH 43016-6357
United States
PHONE: 614-949-1786
EMAIL: DRGONGRA@OUTLOOK.COM
20. Cravath, Swaine & Moore LLP Professional $500,941
ATTN: Faiza J. Saeed, Presiding Services
Partner
Two Manhattan West
375 Ninth Avenue
New York, NY 10001
United States
TEL: 1-212-414-1000
FAX: 212-474-3700
EMAIL: NEWYORK@CRAVATH.COM
21. Danisco USA Inc. (IFF) Trade $462,300
ATTN: Melisa Ordunez, Credit Analyst
Four New Century Parkway
New Century, KS 66031
United States
PHONE: 319-379-0583
EMAIL: MELISA.ORDUNEZ@IFF.COM
22. Imbibe Trade $378,721
ATTN: Andrew Rashkow, Chairman
and Chief Executive Officer
7350 N Croname Rd
Niles, IL 60714
United States
PHONE: 847-324-4411
EMAIL: KPATEL@IMBIBEINC.COM
23. Krones Inc. Trade $357,023
ATTN: Christoph Klenk,
Chief Executive Officer
9600 S 58th St
PO Box 320967
Franklin, WI 53132
United States
TEL: 414-409-4000
FAX: 414-409-4100
EMAIL: CHERYL.DEHAHN@KRONESUSA.COM
24. Rocky Mountain Power Trade $351,507
ATTN: Richard Garlish, President
1407 W North Temple
Salt Lake City, UT 84116
United States
EMAIL: RICHARD.GARLISH@PACIFICORP.COM
25. GSL Electric Trade $317,575
ATTN: Luke Peterson, Project
Manager
8540 South Sandy Parkway
Sandy, UT 84070
United States
PHONE: 801-565-0088
EMAIL: LPETERSON@GSLELECTIC.COM
26. Utah Paperbox (UPB) Trade $316,603
ATTN: Steve Keyser, President and
Chief Executive Officer
920 South 700 West
Salt Lake City, UT 84104
United States
TEL: 801-363-0093
FAX: 801-363-9212
EMAIL: HCLARKE@UPBSLC.COM
27. Integrity Express Trade $283,500
Logistics, LLC (IEL)
ATTN: Ryan Charles, Account Manager
62488 Collections Center Drive
Chicago, IL 60693-0624
United States
PHONE: 888-374-5138
EMAIL: SCHARLES@INTXLOG.COM
28. Pride Transport Trade $276,886
ATTN: Ian Peterson,
Chief Executive Officer
5499 West 2455 South
Salt Lake City, UT 84120
United States
PHONE: 801-972-8890
EMAIL: PRIDEBILLING@PRIDEEMAIL.COM
29. Roeslein & Associates, Inc. Trade $267,130
ATTN: Brian Sneed, Chief Executive Officer
9200 Watson Road, Suite 200
Saint Louis, MO 63126
United States
TEL: 314-729-0055
FAX: 314-729-0070
EMAIL: AR@ROESLEIN.COM
30. Arizona Beverages USA LLC Trade Undetermined
ATTN: Abid Rizvi, CEO
60 Crossways Park Drive West
Suite 400
Woodbury, NY 11797
United States
PHONE: 516-812-0300
VOBEV LLC: Seeks Chapter 11, Gets $37.25MM DIP Funding from Ares
----------------------------------------------------------------
Dorothy Ma of Bloomberg reports that Vobev LLC, Salt Lake
City-based beverage can manufacturer, filed for Chapter 11
bankruptcy in the Bankruptcy Court for the District of Utah on
December 9, 2024, according to court filings.
The company has approximately $402 million in funded debt
obligations as of the petition date.
The firm "produces and fills tens of millions of aluminum beverage
cans annually for some of the most well-known beverage companies in
the world," the documents state.
Vobev has negotiated terms with lenders to secure a
debtor-in-possession (DIP) facility of up to $37.25 million, with
Ares Capital listed as one of the DIP lenders.
The case is Vobev, LLC, LC, 24-26346.
About Vobev LLC
Vobev LLC is a Salt Lake City-based beverage can manufacturer.
Vobev LLC sought relief under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. D. Utah Case No. 24-26346) on December 9, 2024. In its
petition, the Debtor reports estimated assets and liabilities
between $500 million and $1 billion each.
Honorable Bankruptcy Judge Joel T. Marker handles the case.
Michael R. Johnson of Ray Quinney & Nebeker P.C. is the Debtor's
counsel.
WATERVILLE REDEVELOPMENT: Files Chapter 11 Bankruptcy in Maine
--------------------------------------------------------------
On December 2, 2024, Waterville Redevelopment Company III LLC filed
Chapter 11 protection in the District of Maine. According to court
documents, the Debtor reports between $1 million and $10 million in
debt owed to 1 and 49 creditors. The petition states funds will be
available to unsecured creditors.
About Waterville Redevelopment Company III LLC
Waterville Redevelopment Company III LLC is engaged in activities
related to real estate.
Waterville Redevelopment Company III LLC sought relief under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Me. Case No.
24-10265) on December 2, 2024. In the petition filed by Kevin J.
Mattson, as sole member, the Debtor reports estimated assets
between $500,000 and $1 million and estimated liabilities between
$1 million and $10 million.
Honorable Bankruptcy Judge Peter G. Cary oversees the case.
The Debtor is represented by:
E. Chris L'Hommedieu, Esq.
L'HOMMEDIEU LAW OFFICE
190 Bates Street
Lewiston, ME 04240
Tel: (207) 786-5244
Fax: (207) 784-3472
Email: Lewistonlawbky@yahoo.com
WING BOSS: Gets Interim OK to Use Cash Collateral Until Dec. 19
---------------------------------------------------------------
The Wing Boss, LLC received interim approval from the U.S.
Bankruptcy Court for the Southern District of Texas to use its
creditors' cash collateral until Dec. 19, marking the second
extension since the company's Chapter 11 filing in November.
The court on Nov. 18 issued its first interim order, allowing the
company to use cash collateral until Dec. 2 to pay up to $69,991.65
in expenses.
The second interim order signed by Judge Jeffrey Norman approved
the use of cash collateral for expenses paid between Nov. 28 and
Dec. 19 in accordance with the company's budget.
The budget shows total projected cash disbursements of $96,650.46.
Creditors with security interest in cash collateral were granted
replacement lien in post-petition accounts receivable, contract
rights, and deposit accounts. These creditors will also receive
monthly payments beginning Dec. 15 as additional protection.
The next hearing is set for Dec. 20.
About The Wing Boss
The Wing Boss, LLC sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Texas Case No. 24-35350) on November
13, 2024, with up to $500,000 in assets and up to $1 million in
liabilities. Anthony James, company owner, signed the petition.
Aaron W. McCardell Sr., Esq., at The McCardell Law Firm, PLLC,
represents the Debtor as bankruptcy counsel
[*] CareTrust Acquires 46 Facilities in Bankruptcy Sale for $97M
----------------------------------------------------------------
CareTrust REIT, Inc. announced that it has acquired a 46-facility,
3,820-bed/unit skilled nursing and seniors housing portfolio
located in the Midwest for a total investment amount of
approximately $97 million (inclusive of transaction costs). Seven
of the 46 facilities acquired are skilled nursing and assisted
living campuses and an additional seven are assisted living
facilities.
In connection with the acquisition, the company entered into a
triple-net master lease with a large skilled nursing investor and
operator who will sublease the portfolio to several licensed
subtenant operators. The new master lease has an initial term of 15
years with two, 5-year extension options and provides for a year 1
contractual lease yield of 11% (inclusive of transaction costs).
The master lease provides for some deferral of base rent in lease
years 1 and 2 resulting in a cash rent yield of 9.0% in year 1 and
10.5% in year 2. Annual CPI-based rent escalators begin in year 4
and continue each remaining year of the lease term.
The acquisition was completed in coordination with the bankruptcy
and sale of all assets of the debtor/seller. The master tenant has
been granted purchase options for each sub-portfolio, with most
purchase options opening in lease years 4 and 5. With the exercise
of each purchase option, additional rent payments to CareTrust may
be triggered up to an aggregate, annual 12.5% yield on CareTrust's
investment amount.
James Callister, CareTrust's Chief Investment Officer, said, "This
transaction commences a new relationship with a skilled nursing
investor and operator we are very excited about and look forward to
growing with in the future. The creative and opportunistic deal
structure on this acquisition aligns incentives with the aim of
improving clinical and operational performance at these
facilities." Joe Callan, Senior Vice President of Investments,
added, "We are excited to be a part of bringing these motivated,
talented operators to the residents and staff at these facilities."
The investment was funded using cash on hand.
CareTrust also announced today that, as anticipated in connection
with the large Tennessee portfolio transaction announced on October
29, 2024, it has closed on its initial acquisition of 14 of the 31
facilities. The initial acquisition was, as previously announced,
completed through a joint venture arrangement entered into between
CareTrust and a large third-party healthcare real estate owner. At
closing, CareTrust provided a combined common equity and preferred
equity investment totaling approximately $245 million at an initial
contractual yield on its combined preferred and common equity
investments in the joint venture of approximately 9.0%. The
acquisition was funded using cash on hand. The company expects to
complete its acquisition of the remaining facilities by year end.
The closing of these transactions brings the company's annual
investment total to over $1.3 billion.
About CareTrust(TM)
CareTrust REIT, Inc. is a self-administered, publicly-traded real
estate investment trust engaged in the ownership, acquisition,
development and leasing of skilled nursing, seniors housing and
other healthcare-related properties. With a nationwide portfolio of
long-term net-leased properties, and a growing portfolio of quality
operators leasing them, CareTrust REIT is pursuing both external
and organic growth opportunities across the United States. More
information about CareTrust REIT is available at
www.caretrustreit.com.
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
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however, be complete or accurate. The Monday Bond Pricing table
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then-ending.
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*********
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